Caterpillar (CAT) Q3 2025 earnings summary

Executive summary

• Achieved record third-quarter sales and revenues of $17.6 billion, up 10% year-over-year, driven by resilient demand and strong execution across all segments.

• Backlog reached a record $39.8 billion, increasing $2.4 billion sequentially and $11.2 billion year-over-year.

• Adjusted operating profit margin was 17.5%, slightly above expectations but down from 20.0% the prior year, with profit per share at $4.88 ($4.95 adjusted), both lower year-over-year due to higher tariffs and tax rates.

• ME&T free cash flow was $3.2 billion for the quarter, and $1.1 billion was returned to shareholders via dividends and share repurchases.

• Operating profit margin declined to 17.3% from 19.5% year-over-year, impacted by higher manufacturing costs and tariffs.

Financial highlights

• Sales and revenues rose 10% year-over-year to $17.6 billion, with higher sales volume offsetting unfavorable price realization.

• Adjusted operating profit was $3.1 billion; adjusted profit per share was $4.95, down from $5.17 last year.

• Net impact of incremental tariffs was near the top end of the $500-$600 million range for the quarter, with full-year impact expected at $1.6-$1.75 billion.

• Effective tax rate increased to 24.0% for 2025, up from 23.0% in 2024, with discrete items and new U.S. tax legislation affecting results.

• Enterprise operating cash flow for the first nine months was $8.1 billion.

Outlook and guidance

• Full-year 2025 sales and revenues expected to be modestly higher than 2024, with services revenues about flat.

• Fourth quarter sales growth anticipated across all segments, especially in Construction Industries and Energy & Transportation.

• Full-year adjusted operating profit margin, excluding tariffs, expected in the top half of the target range; including tariffs, near the bottom.

• ME&T free cash flow projected above the midpoint of the $5-$10 billion target range.

• 2025 restructuring costs expected at $300–$350 million; capital expenditures around $2.5 billion.