10-KPeriod: FY2025

CUMMINS INC Annual Report, Year Ended Dec 31, 2025

Filed February 10, 2026For Securities:CMI

Summary

Cummins Inc. (CMI) reported a decline in net sales and net income for the year ended December 31, 2025, compared to the prior year. Net sales decreased by 1% to $33.7 billion, primarily due to weaker demand in on-highway commercial truck markets and the divestiture of Atmus Filtration Technologies. Net income attributable to Cummins Inc. fell by 28% to $2.8 billion. This decline was mainly driven by the absence of a significant gain from the Atmus divestiture in the prior year and substantial charges related to the Accelera segment's strategic review and market deterioration in electrolyzer and hydrogen markets. Despite the overall dip, the company saw strength in its Power Systems segment, with a 16% increase in sales driven by power generation demand, particularly from data centers and commercial markets. The Distribution segment also experienced growth, with a 9% sales increase, also boosted by power generation. The company generated strong operating cash flow, an increase of $2.1 billion, largely due to the absence of significant settlement payments made in the prior year. Cummins remains focused on its "Destination Zero" strategy to navigate the energy transition, investing in new technologies while managing through market cyclicality and ongoing regulatory environments.

Financial Highlights

56 data points
Beta

Revenue

$33.67B

25.3% Gross Margin

Net Income

$2.84B

8.4% Net Margin

EPS (Diluted)

$20.50

Total Assets

$33.99B

Cash & Equivalents

$2.85B

Free Cash Flow

$2.39B

Financial Statements
Beta
Revenue$33.67B
Cost of Revenue$25.15B
Gross Profit$8.52B
R&D Expenses$1.40B
SG&A Expenses$3.13B
Operating Income$4.03B
Interest Expense$329.00M
Net Income$2.84B
EPS (Basic)$20.62
EPS (Diluted)$20.50
Shares Outstanding (Basic)137.90M
Shares Outstanding (Diluted)138.70M

Key Highlights

  • 1Net sales for 2025 were $33.7 billion, a 1% decrease from 2024, primarily impacted by weaker on-highway truck markets and the Atmus divestiture.
  • 2Net income attributable to Cummins Inc. decreased 28% to $2.8 billion ($20.50 diluted EPS) compared to $3.9 billion ($28.37 diluted EPS) in 2024.
  • 3The Accelera segment recorded significant charges of $458 million in 2025 due to market deterioration and strategic reviews, impacting overall profitability.
  • 4The Power Systems segment showed strong growth, with sales up 16% driven by robust demand in power generation markets.
  • 5The Distribution segment also reported a 9% sales increase, supported by power generation demand.
  • 6Operating cash flow significantly improved, increasing by $2.1 billion to $3.6 billion, largely due to the absence of prior year settlement payments.
  • 7The company's debt-to-capital ratio improved to 36.0% from 38.4% at the end of 2024.
  • 8Cummins announced a quarterly dividend increase of approximately 10% to $2.00 per share in July 2025.

Frequently Asked Questions

The primary drivers for the 1% decrease in net sales to $33.7 billion were lower demand in North American heavy-duty and medium-duty truck markets, and the impact of the Atmus divestiture completed in March 2024. Partially offsetting these decreases were strong growth in power generation markets and favorable pricing in light-duty automotive engines.

The company incurred $458 million in charges related to Accelera actions in 2025. These included goodwill impairment, inventory write-downs, intangible and fixed asset impairments, severance, and contract termination costs, primarily due to deteriorating conditions in electrolyzer and hydrogen markets.

The Engine and Components segments saw sales decreases, largely due to softer truck markets and the Atmus divestiture for Components. The Power Systems segment experienced robust 16% sales growth driven by power generation demand, and the Distribution segment grew by 9%, also supported by power generation. The Accelera segment reported a sales increase but remained in a significant operating loss due to ongoing investments and market challenges.

Cummins expects strong demand in Power Systems and stable aftermarket business. However, challenges include continued weakness in North American medium and heavy-duty truck markets in the first half of 2026, inflationary pressures, potential trade disruptions, and ongoing operating losses in Accelera despite restructuring. Regulatory changes regarding emissions credits are also a potential factor.