Terex Corporation (TEX) - Q2 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026. Terex Corporation, a global industrial equipment manufacturer, completed the acquisition of REV Group, Inc. ("REV") on February 2, 2026. Consequently, the Company now reports four segments: Environmental Solutions (ES), Materials Processing (MP), Specialty Vehicles (SV), and Aerials. The SV segment results reflect the inclusion of REV operations from the closing date.
Key Financial Metrics
| Metric ($ millions) | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 |
|---|---|---|---|---|
| Net Sales | 2,238 | 1,487 | 3,972 | 2,716 |
| Gross Profit | 444 | 308 | 651 | 556 |
| Operating Profit | 187 | 129 | 105 | 198 |
| Net Income | 110 | 72 | 21 | 93 |
| Diluted EPS | $0.96 | $1.09 | $0.20 | $1.40 |
| Adjusted EBITDA | 269 | 182 | 442 | 310 |
| Free Cash Flow | 101 (Q2) | 78 (Q2) | 44 (YTD) | — |
| Cash & Equivalents | 407 | — | — | — |
| Total Debt | 2,687 | — | — | — |
Note: YTD 2025 Free Cash Flow is not explicitly provided in the text for the six-month period, though Q2 2025 was $78 million.
Material Changes vs. Prior Period
- Revenue Growth: Q2 2026 net sales increased 50.5% to $2.238 billion, driven primarily by the inclusion of the SV segment ($650 million). Excluding SV, organic growth was supported by higher shipments in Aerials, MP, and ES.
- Profitability: Q2 Operating profit rose 45.0% to $187 million. However, YTD Operating profit declined 47.0% to $105 million due to significant purchase price accounting charges ($199 million) and deal-related costs ($80 million) associated with the REV acquisition.
- EPS Dilution: While Q2 Net Income increased, YTD Diluted EPS dropped significantly from $1.40 to $0.20 due to the share issuance for the REV transaction (47.9 million new shares) and acquisition-related expenses.
- Balance Sheet: Total assets increased from $6.139 billion to $10.344 billion. Goodwill increased by $1.47 billion, and Intangible assets increased by $1.879 billion due to the REV acquisition.
- Working Capital: Net working capital as a percentage of trailing three-month annualized sales improved to 15.2% from 22.8% in the prior year.
Guidance, Outlook, and Risks
- Outlook: Management expects demand in waste/recycling, utilities, and infrastructure to remain resilient. Backlog stands at $6.9 billion. The Company is focused on integrating REV and deploying the Terex Operating System (TOS) to realize synergies.
- Dividends: A quarterly dividend of $0.17 per share was declared in July 2026, payable September 18, 2026.
- Share Repurchases: No shares were repurchased under the authorized program during the six months ended June 30, 2026. Approximately $183 million remains available under the program.
- Risks & Contingencies:
- Integration Risk: Challenges in integrating REV operations and realizing anticipated synergies.
- Tariffs: Exposure to international tariffs; however, the Company received $29 million in IEEPA tariff refunds in Q2 2026.
- Debt Covenants: The Company must maintain a first lien net leverage ratio of not more than 3.00x if revolver utilization exceeds 30%. The Company was in compliance as of June 30, 2026.
- Legal: Outstanding performance and bid bonds totaled $592 million, primarily related to REV.
Investor Verification Checklist
- REV Integration Progress: Verify the timeline for realizing cost synergies and the impact of purchase price accounting adjustments on future earnings.
- Debt Servicing Capacity: Confirm cash flow sufficiency to service the increased debt load ($2.687 billion) and interest expense ($50 million in Q2).
- Tariff Refund Realization: Monitor the status of remaining IEEPA tariff refund claims filed ($51 million filed, $29 million received).
- Segment Mix: Assess the sustainability of the SV segment's contribution to Adjusted EBITDA ($94 million in Q2) versus legacy segments.
- Working Capital Efficiency: Validate the continued improvement in working capital management (15.2% of sales) amidst expanded operations.