Terex Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Revenue: $2.2 billion, up 8.5% year-over-year on a pro forma basis.

Adjusted EBITDA: $269 million, an increase of 10.7% year-over-year.

Adjusted EPS: $1.37, including a net benefit from IEEPA tariff refunds.

Backlog: $6.9 billion, supporting confidence in future performance.

Operating Cash Flow: $128 million; Free Cash Flow: $101 million.

Net Debt: $2.28 billion; Net Leverage: 2.3x adjusted EBITDA.

Dividends: $20 million returned to shareholders.

2Strategic Updates and Business Highlights

Segment Performance:

Environmental Solutions: Sales increased 5.9% to $456 million; adjusted EBITDA margin at 17.5%.

Materials Processing: Sales up 11.1% to $464 million; adjusted EBITDA margin expanded to 18.8%.

Specialty Vehicles: Sales increased 6.2% to $650 million; adjusted EBITDA margin improved to 14.5%.

Aerials: Sales up 10.9% to $673 million; adjusted EBITDA margin at 5.7%, showing sequential improvement.

Integration Progress: The integration of REV Group is on track, with record earnings performance in Specialty Vehicles.

Capacity Expansion: Investments in Ocala and Brandon are expected to enhance production capacity and reduce lead times.

3Forward Guidance and Outlook

2026 Sales Guidance: Raised to $7.9 billion - $8.2 billion, reflecting strong first-half execution and backlog visibility.

Adjusted EBITDA Guidance: Expected between $960 million and $1 billion.

Adjusted EPS Guidance: Projected at $4.70 - $5.10.

Free Cash Flow Expectation: Anticipated between $300 million and $350 million for the year.

4Challenges and Points of Concern

Environmental Solutions Outlook: Low single-digit revenue growth anticipated due to delays in pre-buy activity for refuse collection vehicles ahead of 2027 EPA regulations.

Aerials Segment Margin Pressure: Despite improvements, margins remain below those of other segments, affected by tariff impacts and unfavorable customer mix.

International Market Sensitivity: European markets are showing signs of softening, which could impact future performance.

Lead Times and Backlog Management: Aiming to reduce lead times in Specialty Vehicles, which may take up to two years to stabilize.

5Notable Q&A Insights

Environmental Solutions: Management noted that bookings are recovering, but the anticipated pre-buy activity for refuse vehicles has been pushed to 2027.

Specialty Vehicles: Focus is on improving throughput and reducing lead times, with a goal to maintain a sustainable backlog.

Aerials Demand: Strong demand from national accounts is driving bookings, but there are concerns about the mix impacting margins.

Market Share Dynamics: Management expressed confidence in the Aerials segment's value proposition and potential for market share gains, despite not providing specific metrics.

Municipal Spending: Management sees consistent patterns in municipal spending, with no signs of slowing demand. This summary encapsulates Terex's strong performance in Q2 2026 while highlighting strategic initiatives and forward guidance, alongside challenges that could impact future growth.