third quarter 2026
Filed Oct 30, 2026Terex reported higher third-quarter sales, adjusted EBITDA and cash flow, with strong order growth and raised free-cash-flow outlook despite Environmental Solutions ramp inefficiencies and tariff and inflation pressure.
Pro forma sales grew 11.6%, adjusted EBITDA increased to $286 million and free cash flow reached $209 million. MP and SV delivered growth and margin expansion, Aerials improved sequentially, and bookings increased across all four segments. ES sales and margin declined, while Aerials margin remained below the prior year.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Consolidated sales, including SVother | $2.2B | slightly lower sales | up $810 million, or 58%, as reported |
| Consolidated sales, proforma excluding the sale of the Cranes and Midwest businessesother | $2.2B | – | grew $229 million, or 11.6% |
| Adjusted EBITDAnon-GAAP | $286M | – | rose $35 million |
| Adjusted EBITDA marginnon-GAAP | 13.0% | – | – |
| Adjusted diluted EPSnon-GAAP | $1.50 | – | – |
| Net working capital as a percentage of salesother | 15.0% | – | – |
| Operating cash flowother | $241M | – | – |
| Free cash flowother | $209M | – | – |
| Capital expendituresother | $32M | – | – |
| Net debt at quarter-endother | $2.2B | – | – |
| Cash on handother | $407M | – | – |
| Net leveragenon-GAAP | 2.3x net debt to 12-month adjusted EBITDA on a proforma basis | – | – |
| Consolidated third quarter bookingsother | $2.3B | – | up $781 million, or 53%, year-over-year on a proforma basis |
| Consolidated backlogother | $7B | – | – |
| Consolidated book-to-billother | approximately 103% | – | – |
| Environmental Solutions adjusted EBITDA marginnon-GAAP | 15.3% | – | down 390 basis points year over year |
| Materials Processing adjusted EBITDA marginnon-GAAP | 19.3% | – | expanded 530 basis points |
| Specialty Vehicles adjusted EBITDA marginnon-GAAP | 16.0% | – | improved 300 basis points |
| Aerials adjusted EBITDA marginnon-GAAP | 8.7% | 300 basis points higher versus the second quarter | down 180 basis points from the prior year |
| Environmental Solutions third quarter bookingsother | $445M | – | increased 14% year over year |
| Materials Processing third quarter bookingsother | $511M | – | grew 41% on a proforma basis |
| Materials Processing backlogother | $676M | – | nearly doubled |
| Specialty Vehicles third quarter bookingsother | $665M | – | rose 30% year over year |
| Aerials third quarter bookingsother | $646M | – | rose 194% year over year |
| Aerials backlogother | $852M | – | increased $455 million from the prior year |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Environmental SolutionsIndustry channel adjustments in refuse collection vehicles, partially offset by healthy demand and higher shipments in Terex Utilities. | $400M | – | decreased $35 million, or 8.0%, from the prior year |
| Materials ProcessingHealthy equipment utilization and demand, particularly for mobile crushers and screeners in the U.S., supported by infrastructure, data center, and other construction projects. | $434M | – | grew 11.3%, or $44 million |
| Specialty VehiclesIncreased sales of fire apparatus and, to a lesser degree, recreational vehicles. | $657M | – | rose $49 million, or 8.1% |
| AerialsNational account demand in the U.S. associated with large infrastructure projects. | $709M | – | grew 32.0% year-over-year |
full-year 2026 outlook
- Revenue$8.0 billion to $8.2 billion
- Tax rate19%
- Note2026 proforma sales growth of approximately 8.0% at the midpoint
- NoteProforma EBITDA is expected to grow approximately 10% year over year to a range between $930 million and $960 million, excluding Capacity/Laymor
- Note11.7% EBITDA margin at the midpoint
- Noteapproximately $28 million of realized synergies
- Noteinterest and other expenses to be approximately $180 million
- Noteaverage debt outstanding of $2.6 billion
- Noteexpected 2026 EPS of $4.80 to $5.00
- Notefree cash flow outlook of $360 million to $400 million for 2026
- Notecapital expenditure outlook of $145 million for the full year
- NoteEnvironmental Solutions full year sales outlook to be approximately flat year over year
- NoteMaterials Processing low-double digit sales growth for the year
- NoteSpecialty Vehicles high-single digit full year sales growth outlook
- NoteAerials low-double digit revenue growth which we approximate as mid-teens
- Notetypical approximately 15% sequential decline in Specialty Vehicles fourth quarter sales
Capital returns
- Returned $91 million to shareholders during the quarter, including $72 million of share repurchases and $19 million of regular cash dividends.
- The Board approved a new $500 million share repurchase authorization.
- $111 million remained under the prior authorization as the company exited the third quarter.
- Total share repurchase capacity was $611 million.
What drove it
- Higher volume, synergies and operational execution supported adjusted earnings.
- Materials Processing benefited from higher shipment volume, favorable mix, price cost discipline and improved absorption related to higher production volumes.
- Specialty Vehicles benefited from favorable mix, operating efficiencies and price cost discipline.
- Aerials growth was driven largely by national account demand associated with large infrastructure projects.
- Order activity improved across all four segments, with orders exceeding sales in MP, SV and ES.
- Terex is expanding Utilities production capacity and expanding Specialty Vehicles capacity at the Brandon facility.
- The company launched a centralized procurement organization to coordinate sourcing, simplify the supply base and reduce product complexity.
- The company exited Capacity and Laymor to reduce complexity and cyclicality.
Concerns
- Environmental Solutions sales decreased 8.0% and its adjusted EBITDA margin declined 390 basis points due to unfavorable mix, Waukesha ramp inefficiencies and lower-volume absorption in ESG.
- Aerials adjusted EBITDA margin was down 180 basis points from the prior year due to unfavorable customer mix, tariffs and other inflationary pressures.
- Tariffs and inflation created meaningful pressure across the industrial sector.
- Utilities production ramp up inefficiencies continue to limit near-term shipments.
- U.S. commercial and residential construction remain below historical levels, while Europe is mixed.
- Fourth-quarter sales are subject to normal seasonal patterns, including an expected typical approximately 15% sequential decline in Specialty Vehicles sales.
What to watch
- Execution and cost absorption at the Waukesha production ramp and Utilities capacity expansion.
- Whether strong Materials Processing backlog of $676 million and Aerials backlog of $852 million convert into shipments and margins.
- Aerials margin recovery following the 300-basis-point sequential improvement.
- Delivery of approximately $28 million of realized synergies and the longer-term integration savings pipeline.
- Progress in active engagement with multiple strategic counterparties in the Aerials separation process.
- Fourth-quarter seasonal sales and earnings stepdown embedded in the full-year outlook.
Balance sheet and cash flow
- Generated $241 million of operating cash flow during the quarter.
- Generated $209 million of free cash flow during the quarter.
- Capital expenditures were $32 million.
- Paid down $113 million of debt.
- Net debt at quarter-end was $2.2 billion, including $407 million of cash on hand.
- Net leverage was 2.3x net debt to 12-month adjusted EBITDA on a proforma basis.
- Net working capital was 15.0% of sales, compared to 18.1% a year ago on a proforma basis.
Analysis
Terex reported a solid third quarter, with consolidated sales of $2.2 billion and pro forma sales growth of 11.6%. Adjusted EBITDA increased $35 million to $286 million and adjusted EBITDA margin reached 13.0%, compared with 12.8% on a pro forma basis in the prior year. Adjusted diluted EPS was $1.50. The company also stated that consolidated earnings increased sequentially despite slightly lower sales, reflecting improved execution and earnings conversion.
Demand and order activity strengthened across the portfolio. Consolidated third-quarter bookings were $2.3 billion, up $781 million, or 53%, year-over-year on a pro forma basis, while backlog reached $7 billion and consolidated book-to-bill was approximately 103%. MP posted $434 million of sales, 11.3% growth, and its adjusted EBITDA margin expanded 530 basis points to 19.3%. SV sales rose 8.1% to $657 million and adjusted EBITDA margin improved 300 basis points to 16.0%. Aerials sales grew 32.0% to $709 million, supported by U.S. national account demand tied to large infrastructure projects.
Margin performance was uneven by segment. Aerials adjusted EBITDA margin improved 300 basis points from the second quarter to 8.7%, but remained down 180 basis points from the prior year because of unfavorable customer mix, tariffs and other inflationary pressures. ES sales decreased 8.0% to $400 million and its adjusted EBITDA margin declined 390 basis points to 15.3%. The company attributed ES pressure to refuse collection vehicle channel adjustments, higher Utilities mix, Waukesha ramp inefficiencies and lower-volume absorption in ESG. Management continues to invest in Utilities capacity, with near-term ramp inefficiencies limiting shipments.
Cash generation and capital allocation were notable. Terex generated $241 million of operating cash flow and $209 million of free cash flow, while net working capital improved to 15.0% of sales from 18.1% a year ago on a pro forma basis. The company paid down $113 million of debt, ended the quarter with $2.2 billion of net debt and $407 million of cash, and returned $91 million to shareholders. The board's new $500 million authorization, combined with $111 million remaining under the prior authorization, brought repurchase capacity to $611 million.
For full-year 2026, Terex refined its outlook to sales of $8.0 billion to $8.2 billion and pro forma EBITDA of $930 million to $960 million, excluding Capacity/Laymor. It raised free-cash-flow guidance to $360 million to $400 million and expects $145 million of full-year capital expenditures. The outlook embeds normal fourth-quarter seasonality, the ES production ramp, tariffs and inflation, as well as a typical seasonal stepdown in the fourth quarter. The principal execution items are conversion of elevated segment backlog, stabilization of ES profitability, Aerials margin recovery, realization of approximately $28 million of synergies and progress in the Aerials separation process.
Management, verbatim
Sales of $2.2 billion increased approximately 12% year over year, and adjusted EBITDA of $286 million rose approximately 14% on a proforma basis.
Simon A. Meester, President and Chief Executive Officer
Adjusted EBITDA rose $35 million to $286 million, supported by higher sales, operational execution, and realized synergies, which more than offset year-over-year tariff and inflation headwinds.
Jennifer Kong-Picarello, Senior Vice President and Chief Financial Officer
Since our last update, we have made good progress, advanced the carve out work, and moved from evaluating inbound interest to active engagement with multiple strategic counterparties.
Simon A. Meester, President and Chief Executive Officer
Not in the filing
stated, not guessed- Quarter-end date
- GAAP gross margin
- GAAP operating income
- GAAP net income
- GAAP diluted EPS
- GAAP diluted EPS prior-year comparison
- Adjusted diluted EPS prior-year comparison
- Adjusted EBITDA prior-year value
- Operating cash flow prior-year comparison
- Free cash flow prior-year comparison
- Gross-margin guidance
- Operating-expense guidance
- Prior-release outlook for comparison
- Specific timeline for the Aerials separation process
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.