The Toro Company Reports Fourth-Quarter and Full-Year Fiscal 2025 Financial Results (Form 8-K)

The Toro Company Reports Fourth-Quarter and Full-Year Fiscal 2025 Financial Results

Exceeded Full-Year Expectations Driven by Strength in Underground Construction and Golf

•Professional segment full-year earnings margin of 19.4%, up from 18.0%

•Record free cash flow of $578 million, primarily driven by net working capital improvements

•Returned $441 million to shareholders via cash dividends and common stock repurchases

•Mitigated tariff headwinds and maintained margins for full-year fiscal 2025

•AMP run-rate savings target increased to $125 million by 2027, up from the initial expectation of at least $100 million

•Full-year fiscal 2026 *adjusted diluted earnings per share guidance of $4.35 to $4.50

BLOOMINGTON, Minn.-(BUSINESS WIRE) - December 17, 2025-The Toro Company (NYSE: TTC), a leading global provider of solutions for the outdoor environment, today reported results for its fiscal fourth-quarter and full-year ended October 31, 2025.

Fourth quarter net sales were $1.07 billion, compared to $1.08 billion in the same period of fiscal 2024. Full-year net sales were $4.51 billion, compared to $4.58 billion in fiscal 2024, with most of the difference due to prior year divestitures of non-core assets.

Fourth quarter reported diluted earnings per share ("EPS") were $0.74 and *adjusted diluted EPS were $0.91, compared to $0.87 reported diluted EPS and $0.95 *adjusted diluted EPS in the same period of fiscal 2024. Full-year reported diluted EPS were $3.17 and *adjusted diluted EPS were $4.20, beating expectations, compared to $4.01 reported diluted EPS and $4.17 *adjusted diluted EPS in fiscal 2024.

"We delivered fourth quarter and full-year performance that exceeded our expectations, driven by strength in our Professional segment and strategic investments in productivity improvement measures," said Richard M. Olson, chairman and chief executive officer. "Our Professional segment, which represents about eighty percent of our portfolio, achieved full-year earnings margin of 19.4%, demonstrating the resilience and quality of our core businesses. Additionally, due to the accelerated performance of our AMP initiative, we are increasing our run-rate savings goal to $125 million by fiscal 2027, up from the original target of $100 million."

"We generated record free cash flow in fiscal 2025, largely due to working capital improvements. Our long-standing financial discipline is evident in our strong balance sheet position and contributed to positive momentum in our return on invested capital," added Olson.

1

OUTLOOK

"Looking ahead, our positive momentum is reinforced by our continued investment in technology leadership, as well as strategic acquisitions like Tornado. Our innovation and business development pipeline remains robust, and our focus on operational excellence and structural improvements is delivering meaningful cost savings in both the Professional and Residential segments. We are confident in our proven ability to generate cash and remain committed to creating value for all our stakeholders," Olson said.

For fiscal 2026, management expects total company net sales growth in the range of 2% to 5% and *adjusted diluted earnings per share in the range of $4.35 to $4.50. This guidance reflects mid-single digit earnings growth for the near term, with a clear path to higher growth rates over time as the company focuses on its execution of margin expansion and innovation priorities.

This guidance is based on current visibility, inclusive of anticipated tariff impacts, and reflects:

•Continued strong demand and stable supply for our underground construction, golf and grounds, and professional landscape contractor businesses

•Conservative assumptions for homeowner markets reflecting current consumer dynamics

•Continued progress towards normalizing field inventories of turf products and snow and ice management solutions

•The Tornado Infrastructure Equipment acquisition which is expected to add approximately 2% to total company net sales and have a modestly accretive impact to *adjusted diluted earnings per share

•Weather patterns aligned with historical averages

2

FOURTH-QUARTER FISCAL 2025 FINANCIAL HIGHLIGHTS

						Reported																		Adjusted*
(dollars in millions, except per share data)						F25 Q4						F24 Q4						% Change						F25 Q4						F24 Q4						% Change
Net Sales						$	1,066.2					$	1,076.0					(1)		%				$	1,066.2					$	1,076.0					(1)		%
Net Earnings						$	73.0					$	89.9					(19)		%				$	89.4					$	97.7					(9)		%
Diluted EPS						$	0.74					$	0.87					(15)		%				$	0.91					$	0.95					(4)		%

FULL-YEAR FISCAL 2025 FINANCIAL HIGHLIGHTS

						Reported																		Adjusted*
(dollars in millions, except per share data)						F25						F24						% Change						F25						F24						% Change
Net Sales						$	4,510.4					$	4,583.8					(2)		%				$	4,510.4					$	4,583.8					(2)		%
Net Earnings						$	316.1					$	418.9					(25)		%				$	419.6					$	435.2					(4)		%
Diluted EPS						$	3.17					$	4.01					(21)		%				$	4.20					$	4.17					1		%

SEGMENT RESULTS

Professional Segment

•Professional segment net sales for the fourth quarter were $910.3 million, down 0.4% from $913.9 million in the same period last year. The decrease was primarily driven by lower shipments of golf and grounds products and zero-turn mowers coming off strong fiscal 2024 comparables, as well as prior year divestitures, mostly offset by net price realization and higher shipments of underground construction and snow and ice management products.

•Full-year fiscal 2025 professional segment net sales were $3.62 billion, up 1.9% from $3.56 billion last year. The increase was primarily due to higher shipments of golf, grounds, and underground construction products, as well as net price realization, partially offset by prior year divestitures and lower shipments of specialty construction products.

•Professional segment earnings for the fourth quarter were $174.7 million, up 2.9% from $169.7 million in the same period last year. Professional segment earnings margin was 19.2%, up from 18.6% in the prior-year period. The increase was primarily due to net price realization and productivity improvements, partially offset by higher material and manufacturing costs and lower net sales volume.

•Full-year fiscal 2025 professional segment earnings were $702.5 million, up 10.0% compared with $638.9 million in the prior fiscal year. Professional segment earnings margin was 19.4%, up from 18.0% last year. The increase was primarily driven by net price realization, productivity improvements, and cost savings measures, partially offset by higher material and manufacturing costs and inventory valuation adjustments.

Residential Segment

•Residential segment net sales for the fourth quarter were $147.2 million, down 5.1% from $155.1 million in the same period last year. The decrease was primarily driven by lower shipments of walk power mowers, partially offset by higher shipments of snow products and net price realization.

•Full-year fiscal 2025 residential segment net sales were $858.4 million, down 14.0% from $998.3 million last year. The decrease was primarily due to lower shipments broadly across the segment, as well as the prior year Pope divestiture.

•Residential segment loss for the fourth quarter was $1.2 million, compared to a loss of $13.8 million in the same period last year. The change was primarily driven by cost savings measures, productivity improvements, and net price realization, partially offset by inventory valuation adjustments, higher material costs, and lower net sales volume.

3

•Full-year fiscal 2025 residential segment earnings were $35.8 million, down 54.3% from $78.4 million in the prior fiscal year. Residential segment earnings margin was 4.2%, compared to 7.9% last year. The decrease was primarily driven by lower net sales volume, higher material and manufacturing costs, and inventory valuation adjustments, partially offset by productivity improvements and cost savings measures.

OPERATING RESULTS

Gross margin for the fourth quarter was 32.9%, compared with 32.4% for the same prior-year period. *Adjusted gross margin for the fourth quarter was 34.5%, compared with 32.3% for the same prior-year period. The increases in reported and *adjusted gross margin were primarily due to net price realization and productivity improvements, partially offset by lower net sales volume, higher material and manufacturing costs, and product mix.

For fiscal 2025, gross margin was 33.4%, compared to 33.8% for fiscal 2024. *Adjusted gross margin for fiscal 2025 was 34.1%, compared with 33.9% for fiscal 2024. The changes in reported and *adjusted gross margin were primarily driven by lower net sales volume, higher material and manufacturing costs, inventory valuation adjustments, and higher productivity initiative charges, partially offset by productivity improvements, net price realization, and product mix.

SG&A expense as a percentage of net sales for the fourth quarter was 24.2%, compared with 22.3% in the prior-year period. For fiscal 2025, SG&A expense as a percentage of net sales was 22.5%, compared with 22.2% for fiscal 2024. The changes for both the fourth quarter and full-year comparisons were primarily driven by lower net sales volume and higher incentive expenses, partially offset by cost savings measures.

Operating earnings margin for the fourth quarter was 8.7%, compared with 10.1% in the same prior-year period. *Adjusted operating earnings margin for the fourth quarter was 10.4%, compared with 10.9% in the same prior-year period.

For fiscal 2025, operating earnings margin was 9.1%, compared with 11.6% in fiscal 2024. *Adjusted operating earnings margin for fiscal 2025 was 12.0%, compared with 12.2% for fiscal 2024.

Interest expense was $13.2 million for the fourth quarter, down $1.3 million from the same prior-year period. Interest expense was $59.1 million for fiscal 2025, down $2.8 million compared to fiscal 2024. The decreases for both the fourth quarter and full-year comparisons were primarily driven by lower average interest rates.

The reported and *adjusted effective tax rates for the fourth quarter were 14.1% and 15.1%, respectively, compared with 17.7% and 16.9%, respectively, in the same prior-year periods. The decreases in reported and *adjusted effective tax rates were primarily due to a more favorable geographic mix of earnings.

For fiscal 2025, the reported effective tax rate was 16.3%, compared with 18.3% in fiscal 2024. The decrease was primarily due to the impact of the non-cash impairment charge and a more favorable geographic mix of earnings, partially offset by lower tax benefits recorded as excess tax deductions for stock-based compensation. The *adjusted effective tax rate for fiscal 2025 was 17.8%, compared with 18.8% in fiscal 2024. The decrease was primarily driven by a more favorable geographic mix of earnings.

*Non-GAAP financial measure. Please refer to the "Use of Non-GAAP Financial Information" for details regarding these measures, as well as the tables provided for a reconciliation of historical non-GAAP financial measures to the most comparable GAAP measures.

4

LIVE CONFERENCE CALL

December 17, 2025 at 10:00 a.m. CT

www.thetorocompany.com/invest

The Toro Company will conduct its earnings call and webcast for investors beginning at 10:00 a.m. CT on December 17, 2025. The webcast will be available at www.thetorocompany.com/invest. Webcast participants will need to complete a brief registration form and should allocate extra time before the webcast begins to register and, if necessary, install audio software.

About The Toro Company

The Toro Company (NYSE: TTC) is a leading global provider of solutions for the outdoor environment including turf and landscape maintenance, snow and ice management, underground utility construction, rental and specialty construction, and irrigation and outdoor lighting solutions. With net sales of $4.5 billion in fiscal 2025, The Toro Company's global presence extends to more than 125 countries through a family of brands that includes Toro, Ditch Witch, Exmark, BOSS, Ventrac, Tornado, HammerHead, American Augers, Spartan, Subsite, Radius, Hayter, Perrot, Unique Lighting Systems, Irritrol, and Lawn-Boy. Through constant innovation and caring relationships built on trust and integrity, The Toro Company and its family of brands have built a legacy of excellence by helping customers work on golf courses, sports fields, construction sites, public green spaces, commercial and residential properties and agricultural operations. For more information, visit www.thetorocompany.com.

Use of Non-GAAP Financial Information