AGCO (AGCO) Q4 2025 earnings summary

Executive summary

• Net sales for 2025 were $10.1B, down 13.5% year-over-year, with adjusted operating margin of 7.7% and adjusted EPS of $5.28; Q4 net sales were $2.92B, up 1.1% year-over-year, with adjusted operating margin of 10.1%.

• Record free cash flow of $740M in 2025, up $440M from 2024, driven by working capital execution and lower capex; free cash flow conversion reached 188%.

• Q4 2025 operating income surged 185.8% year-over-year to $230.7M; full-year operating income was $595.7M, a 587.9% increase from 2024.

• Executed $250M in share repurchases in Q4 as part of a $1B capital return program; $87M paid in dividends for 2025.

• Gained record global market share, with North America seeing the largest one-year gain in large ag.

Financial highlights

• Gross margin for 2025 was 25.5%, up from 24.9% in 2024; Q4 gross margin was 25.4%, up 150bps year-over-year.

• Q4 2025 adjusted operating margin was 10.1%; full-year 2025 adjusted operating margin was 7.7%.

• Parts sales reached $440M in Q4 (+5% reported), $1.9B for the year (+2% reported).

• Free cash flow conversion targeted at 75%-100% of adjusted net income for 2026.

• Regular quarterly dividend of $0.29/share, totaling $87M in 2025.

Outlook and guidance

• 2026 net sales outlook: $10.4B–$10.7B; adjusted EPS $5.50–$6.00; capex ~$350M; adjusted operating margin guidance: 7.5%–8%; effective tax rate: 32%–34%.

• Free cash flow conversion targeted at 75%-100% for 2026; engineering expense projected at ~5% of sales.

• First quarter 2026 net sales expected modestly up year-over-year; EPS $0.40–$0.45.

• North America large ag sales forecast down ~15% in 2026; Western Europe tractor volumes up modestly or down ~15%; Brazil flat.

• Tariff costs to be a $65M incremental headwind in 2026, mostly impacting first half.