Toromont Industries (TIH) Q3 2025 earnings summary

Executive summary

• Net income rose 7% in Q3, driven by a $13.7M property sale and AVL acquisition, despite macroeconomic and trade challenges and lower net interest income.

• Q3 revenue declined 2% year-over-year, with Equipment Group down 4% and CIMCO up 22%.

• Bookings surged 47% year-over-year, and backlog reached $1.3B, up from $1.1B, supported by strong new order intake and AVL's contribution.

• Financial position remains robust, with ample liquidity and continued focus on safe operations and long-term growth.

• Market conditions remain uncertain, with mixed end market activity and customer purchasing decisions.

Financial highlights

• Net income increased 7% ($140.6M) in Q3 year-over-year; basic EPS was $1.73 for the quarter and $4.18 year-to-date.

• Consolidated revenue decreased 2% in Q3; Equipment Group revenue down 4%, CIMCO up 22%.

• Operating income up 8% in Q3 to $189.5M; excluding property gain, up 1% year-over-year.

• Gross profit margin for Q3 improved to 26.7%, up 250 bps year-over-year.

• Free cash flow was strong at ~$250M in Q3, driven by inventory management.

Outlook and guidance

• Focus remains on executing strategic priorities, maintaining operational discipline, and supporting long-term growth.

• Backlog of $1.3B, up 17% year-over-year, with 80% expected to be delivered in the next 12 months, subject to timing.

• AVL acquisition is tracking to plan, with modest near-term earnings due to non-cash adjustments; Charlotte facility ramping up through 2026.

• No unusual seasonality expected for Q4; normalization anticipated.

• Business environment expected to be influenced by trade negotiations, inflation, interest rates, FX, and geopolitical factors.