Terex Q3 2026 Sales Jump 58% as Full-Year Outlook Is Refined

Terex Corporation reported a sharp increase in third-quarter fiscal 2026 revenue following its combination with REV Group, while adjusted earnings per share remained unchanged as weaker profitability in Environmental Solutions and margin pressure in Aerials offset gains elsewhere. The equipment manufacturer refined its full-year outlook, raising its sales and free-cash-flow ranges but reducing its adjusted EBITDA range.

For the three months ended September 30, Terex generated net sales of $2.20 billion, up 58.4% from $1.39 billion a year earlier. Adjusted EBITDA rose 53.8% to $286 million, although the adjusted EBITDA margin declined to 13.0% from 13.4%. Adjusted diluted EPS was unchanged at $1.50.

On a GAAP basis, net income increased to $114 million from $65 million, and diluted EPS rose to $1.00 from $0.98. Adjusted results excluded restructuring, deal-related and purchase-price-accounting items, as well as divestiture effects.

Specialty Vehicles, which includes the REV businesses, contributed $657 million of quarterly sales. Compared on a pro forma basis, the segment’s revenue increased 8.1% from $608 million, driven by higher sales of fire apparatus and recreational vehicles. Terex said its legacy operations delivered 13.1% pro forma, foreign-exchange-neutral sales growth, while the divestiture of the Cranes business reduced the year-over-year comparison by $27 million.

Materials Processing and Specialty Vehicles support earnings

Materials Processing posted sales of $434 million, up 11.3% year over year and 11.9% on a foreign-exchange-neutral basis. Increased shipments across most product categories and strong North American utilization and aggregates demand supported the result. Adjusted EBITDA climbed 52.7% to $84 million, with the margin expanding to 19.3% from 14.0% as higher volume, favorable mix, price-cost discipline and improved cost absorption lifted profitability.

Specialty Vehicles’ adjusted EBITDA increased 32.9% on a pro forma basis to $105 million. Its margin rose to 16.0% from 13.0%, reflecting operating efficiencies and price-cost discipline, partly offset by inflationary pressure. Terex is working to expand capacity in the segment to reduce lead times.

Aerials recorded a 32.0% sales increase to $709 million, supported by national-account demand and capital spending tied to large projects. Adjusted EBITDA rose 10.7% to $62 million, but the margin contracted to 8.7% from 10.5%. Higher volume and cost-reduction measures were outweighed in part by unfavorable customer mix, inflation and tariffs.

Environmental Solutions was the only segment to report lower sales and adjusted EBITDA. Revenue declined 8.0% to $400 million as higher utility-product sales were more than offset by fewer refuse collection vehicle shipments. Adjusted EBITDA fell 26.5% to $61 million, and the margin narrowed to 15.3% from 19.2% because of unfavorable mix and inefficiencies related to the Utilities production ramp. Terex said refuse collection vehicle order activity was recovering, though shipment improvement remained gradual.

Orders exceed sales as backlog reaches $7 billion

Consolidated bookings increased 53% from the prior-year quarter, producing a book-to-bill ratio of 103%. Quarter-end backlog was $7.0 billion, including deliveries scheduled beyond 12 months.

Materials Processing and Environmental Solutions recorded book-to-bill ratios of 118% and 112%, respectively, while Specialty Vehicles reached 101%. Aerials came in at 91%. Terex characterized demand as healthy across its portfolio, citing infrastructure, power and data-center activity, along with durable municipal replacement demand for fire and emergency equipment. Commercial and residential construction remained below historical levels but had generally stabilized, while conditions in Europe were mixed.

In legacy operations excluding Specialty Vehicles, foreign-exchange-adjusted North American sales rose 16%. Asia-Pacific increased 4% and the rest of the world gained 1%, while Western Europe declined 3%.

Cash flow improves; 2026 outlook refined

Third-quarter free cash flow increased 60.8% to $209 million, comprising $241 million of operating cash flow less $32 million of capital expenditures, net of asset-sale proceeds. Terex repurchased $72 million of shares and paid $19 million in regular quarterly dividends.

The company ended the quarter with $2.17 billion of net debt, including $407 million of cash, and reported net leverage of 2.3 times trailing 12-month pro forma adjusted EBITDA.

For fiscal 2026, Terex now expects net sales of $8.0 billion to $8.2 billion, compared with its prior range of $7.8 billion to $8.1 billion. It projects adjusted EBITDA of $930 million to $960 million, versus $960 million to $1.0 billion previously. The adjusted diluted EPS range was narrowed to $4.80 to $5.00 from $4.70 to $5.10.

Free cash flow is expected to reach $360 million to $400 million, above the prior range of $300 million to $350 million. The outlook assumes tariffs broadly remain at current rates and includes REV Group businesses from February 2 through December 31.

At the segment level, Terex expects Environmental Solutions sales to be flat with 2025, Materials Processing and Aerials sales to increase by low double digits, and Specialty Vehicles sales to rise by high single digits on the comparison bases specified by the company.

Management’s operating priorities include capturing integration and procurement savings, standardizing manufacturing practices, expanding Utilities and Specialty Vehicles capacity, and improving production flow and cost absorption. The outlook remains subject to risks including the integration of REV, tariff changes, inflation, supply-chain disruption, order delays or cancellations, cyclical end markets, foreign-exchange movements and the company’s ability to generate sufficient cash flow while servicing its debt.