With CNH badges as their main drawcard the Titan Machinery group has managed to keep a comparative sales drop to an enviable 5.5% for Q1 2026
Titan Machinery runs dealerships worldwide with Case IH and New Holland as their mainstay badges, has reported some solid financial results for the fiscal first quarter ended 30 April 2025. Down just 5.5% on last year.
With successful dealerships worldwide, of interest to us locally is the performance of the O’Connors dealership, taken over by Titan in September 2024. See the takeover story here.
The deal was reported to be worth $100 million to O’Connors shareholders, and at the time Titan described the 16-yard dealership as Australia’s leading Case IH dealership with a record of delivering strong financial performance.
The rational titan machinery executives placed on the purchase was based on O’Connors Group annual sales of US$258 million and annual profit before income tax of US$21.4 million.
Since the AU$100 million takeover of O’Connors Group at the peak of the highest farm equipment sales in local history, the giant US-based dealer network has written down the value of its Australian business.
However, the O’Connors Group sales figures for Q1 of 2026 have been most encouraging with a solid US$44.0 million swath of sales, and this compares favourably with the US$44.4 million sold in the first quarter last year, which includes a US$2.0 million negative impact due to foreign currency fluctuations.
Net of the effect of these foreign currency fluctuations, revenue actually increased US$1.6 million or 3.6%. Pre-tax loss for the first quarter of fiscal 2026 from the local operation was US$0.6 million, compared to US$0.5 million in the first quarter last year.
Worldwide Titan Machinery in in a better position than most of its competitors. This is due to the steps the company took to destock its older inventory and realign its mix across both ag and construction.
Margins reflected the pressure associated with destocking through a demand downturn, inventories were lowered by US$12.5 million, with steeper reductions set to take place in the coming quarters.
Titan Machinery’s President and Chief Executive Officer Bryan Knutson takes up reckoning behind the results for Q1, “Our fiscal first quarter results demonstrated our ability to advance our short-term goals in a challenging market environment, and while headwinds persist across the agricultural sector, our team remains focused on continuing to execute upon our initiative to optimize inventory and navigate through the trough of the cycle.
“The stronger than expected top-line performance during the fiscal first quarter of 2026 primarily reflects the timing of delivery on pre-sold equipment, as opposed to an increase in demand, and does not change our overall expectations for the full fiscal year.
“We continue to anticipate a very subdued retail environment given the ongoing likelihood of weak farmer profitability, with government support programs remaining an important but still very much undefined variable.
“And while challenges persist in the marketplace, our team’s relentless focus on disciplined execution of our inventory reduction initiatives and our customer care strategy is allowing us to manage key variables of the business that will improve our position as we navigate this cycle,” Bryan Knutson concluded.
Agriculture segment results
Agriculture revenue for the first quarter of fiscal 2026 was US$384.4 million, compared to US$447.7 million in the first quarter last year, reflecting a same-store sales decrease of 14.1%.
The revenue decrease resulted from a softening of demand for equipment, driven by the decline in net farm income and sustained high interest rates. Pre-tax loss for the first quarter of fiscal 2026 was US$12.8 million, compared to US$13.0 million of pre-tax income in the first quarter last year.
Construction segment results
Revenue from construction equipment sales for the first quarter of fiscal 2026 was US$72.1 million, compared to US$71.5 million in the first quarter last year, reflecting a same-store sales increase of 0.9%.
Pre-tax loss for the first quarter of fiscal 2026 for construction was US$4.2 million, compared to US$0.3 million of pre-tax income in the first quarter last year.
Titan Machinery Q1 results in detail
For the first quarter of fiscal 2026, revenue was US $594.3 million compared to US$628.7 million in the first quarter of last year.
Equipment revenue was US$436.8 million for the first quarter of fiscal 2026, compared to US$468.1 million in the first quarter last year.
Parts revenue was US$105.6 million for the first quarter of fiscal 2026, compared to US$108.2 million in the first quarter last year.
While revenue generated from service was US$44.0 million for the first quarter of fiscal 2026, compared to US$45.1 million in the first quarter last year. Revenue from rental and other sources was US$7.9 million for the first quarter of fiscal 2026, compared to US$7.3 million in the first quarter last year.
Gross profit for the first quarter of fiscal 2026 was US$90.9 million, compared to US$121.8 million in the first quarter last year. The Company’s gross profit margin was 15.3% in the first quarter of fiscal 2026, compared to 19.4% in the first quarter last year.
The year-over-year decrease in gross profit margin was primarily due to lower equipment margins, driven by softer retail demand and the Company’s initiatives to manage inventory to targeted levels.
Operating expenses were US$96.4 million for the first quarter of fiscal 2026, compared to US$99.2 million in the first quarter last year. The decrease was primarily driven by lower variable expenses associated with the year-over-year decline in revenue and profitability.
Operating expense as a percentage of revenue was 16.2% for the first quarter of fiscal 2026, compared to 15.8% of revenue in the first quarter last year.
Floorplan interest expense and other interest expense was US$11.1 million in the first quarter of fiscal 2026, compared to US$9.5 million for the same period last year.
The increase in interest expense is the result of higher long-term debt outstanding resulting from the Company’s purchase of previously leased facilities, as well as an increase in facilities being financed with finance leases. Floorplan and other interest expense decreased 15.3% sequentially, reflecting the Company’s continued efforts to optimize its inventory position.
In the first quarter of fiscal 2026, net loss was US$13.2 million, with loss per diluted share of US$0.58, compared to net income of US$9.4 million, with earnings per diluted share of US$0.41, for the first quarter last year.
EBITDA in the first quarter of fiscal 2026 was US$2.6 million, compared to US$30.9 million in the first quarter last year.
European division results
Revenue for the first quarter of fiscal 2026 was US$93.9 million, compared to US$65.1 million in the first quarter last year, which includes a US$2.1 million negative impact related to foreign currency fluctuations.
Net of the effect of these foreign currency fluctuations, revenue increased US$30.9 million, or 47.5%, largely driven by a stronger than expected response to European Union stimulus programs in Romania. Pre-tax income for the first quarter of fiscal 2026 was US$4.7 million, compared to US$1.4 million in the first quarter last year.
Australian division results
Revenue for the first quarter of fiscal 2026 was US$44.0 million, compared to US$44.4 million in the first quarter last year, which includes a US$2.0 million negative impact related to foreign currency fluctuations.
Net of the effect of these foreign currency fluctuations, revenue increased US$1.6 million or 3.6%. Pre-tax loss for the first quarter of fiscal 2026 was US$0.6 million, compared to US$0.5 million in the first quarter last year.
Titan Machinery balance sheet
Cash at the end of the first quarter of fiscal 2026 was US$21.5 million. Inventories were flat at US$1.1 billion as of 30 April 2025 compared to 31 January 2025.
Outstanding floorplan payables were US$769.6 million on a US$1.5 billion total available floorplan and working capital lines of credit as of 30 April 2025, compared to US$755.7 million outstanding floorplan payables as of 31 January 2025.
For the three months ended April 30, 2025, the Company’s net cash provided by operating activities was US$6.2 million, compared to net cash used for operating activities of US$32.4 million for the three months ended 30 April, 2024.
The change in cash from operating activities was primarily attributable to changes in inventory and a changing mix in floorplan financing, which was partially offset by a decrease in net income for the first three months of fiscal 2026 compared to the prior year period.
Company outlook
Titan Machinery’s President and Chief Executive Officer Bryan Knutson outlines his thoughts for the rest of the year, “We are reiterating our full year diluted adjusted earnings per share guidance, as our consolidated performance is tracking within our expected range.
“Internationally, we are updating our segment revenue assumptions for both Europe and Australia given local dynamics, but we believe that absent unique variables, the broader agriculture sector remains challenged in the near-term, given broad-based weakness in commodity prices, which is consistent with our base expectations.
“Looking ahead, the progression of our inventory reduction efforts remains core to our operating strategy to stabilise equipment margins and restore the business’s earnings power.”
Titan Machinery Q1 2026 segment results
