Terex (TEX) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales were $1.23B, down 4.9% year-over-year, with adjusted operating margin at 9.1% and EPS of $0.83; Environmental Solutions (ES/ESG) drove outperformance and accounted for about one-third of sales.

• Backlog grew 13% sequentially to $2.6B, with a book-to-bill ratio of 124%.

• ESG acquisition completed, contributing $399M in Q1 sales and significant margin expansion in ES.

• North America accounted for 73% of sales, with growth driven by ESG; sales declined in other regions.

• Integration of ESG is on track, with over $25M in run-rate synergies expected by end of 2026.

Financial highlights

• Adjusted operating profit was $111M (9.1% margin), down from $163M (12.6%) in Q1 2024; adjusted EBITDA was $128M (10.4% margin).

• Free cash flow was negative $55M, improved year-over-year; net income was $21M ($0.31 per share), with adjusted net income at $55M ($0.83 per share).

• Interest and other expenses rose to $41M–$43M, mainly from ESG acquisition financing.

• SG&A expenses increased due to ESG integration, litigation, and severance.

• ROIC for the trailing twelve months was 15.0%.

Outlook and guidance

• Full-year 2025 net sales expected at $5.3B–$5.5B, with organic sales projected to decline 8–12% versus 2024; growth driven by ESG acquisition.

• Full-year adjusted EPS guidance maintained at $4.70–$5.10, including a $0.40 net tariff impact and assuming easing of tariffs.

• Segment operating margin expected at ~12%; free cash flow guidance of $300M–$350M.

• Q2 and Q3 EPS expected to be stronger than Q1 and Q4.

• Backlog at $2.6B supports the outlook.