01—Abstract
Summary
Summary of the 10-Q filed November 6, 2025. Cited figures are marked; the original filing is the authoritative source.
Cummins Inc. (CMI) reported a decrease in net sales and net income for the third quarter and first nine months of fiscal year 2025 compared to the prior year.
For the three months ended September 30, 2025, net sales were $8.317 billiona, down 2% from $8.456 billion in the prior year period, and net income attributable to Cummins Inc. was $536 million ($3.86 per diluted share), a significant decrease from $809 million ($5.86 per diluted share) in the prior year. This decline was attributed to lower demand in on-highway commercial truck markets, a goodwill impairment charge and inventory write-down in the Accelera segment, and unfavorable tax impacts from new legislation, partially offset by strong growth in power generation and light-duty automotive markets. The nine-month period also saw a decline in net sales and net income.
Net sales were $25.134 billionb, down 2% from $25.655 billion in the prior year, and net income attributable to Cummins Inc. was $2.250 billion ($16.23 per diluted share), down from $3.528 billion ($25.31 per diluted share) in the prior year. The year-to-date figures were significantly impacted by the absence of a large gain from the Atmus divestiture in the prior year, alongside the same factors affecting the third quarter performance. Despite these headwinds, the company highlighted strong cash flow generation from operations and maintained a solid liquidity position with significant cash and marketable securities and access to credit facilities.
02—Key points
Key Highlights
- Net sales for Q3 2025 were $8.317 billion, a 2% decrease year-over-year, reflecting softer demand in on-highway truck markets.
- Net income attributable to Cummins Inc. for Q3 2025 was $536 million ($3.86 diluted EPS), a significant decrease from $809 million ($5.86 diluted EPS) in Q3 2024, impacted by goodwill impairment and tax changes.
- The Accelera segment recorded a $210 million goodwill impairment charge and a $30 million inventory write-down in the third quarter, impacting profitability.
- Despite overall sales decline, the Power Systems segment saw an 18% increase in sales for the nine-month period, driven by strong demand in power generation.
- The company generated $2.087 billion in cash from operating activities for the first nine months of 2025, a substantial increase from $65 million in the prior year, largely due to lower working capital requirements and absence of large prior-year settlement payments.
- Cummins Inc. declared a quarterly dividend of $2.00 per share, an approximate 10% increase, demonstrating continued commitment to returning capital to shareholders.
- The company's debt-to-capital ratio improved to 36.8% at September 30, 2025, from 38.4% at December 31, 2024, indicating a stronger balance sheet.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Cummins Inc kept $0.06.
- Revenue$8.32B100.0%
- Cost of revenue−$6.19B74.4%
- Gross profit$2.13B25.6%
- Operating costs−$1.28B15.4%
- Operating income$852.0M10.2%
- Interest, other & tax−$316.0M3.8%
- Net income$536.0M6.4%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed November 6, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $8.32B$8.46B | −1.6% |
| Cost of Revenue | $6.19B$6.29B | −1.5% |
| Gross Profit | $2.13B$2.17B | −1.9% |
| R&D Expenses | $345.00M$359.00M | −3.9% |
| SG&A Expenses | $789.00M$807.00M | −2.2% |
| Operating Income | $852.00M$1.05B | −18.9% |
| Interest Expense | $83.00M$83.00M | 0.0% |
| Net Income | $536.00M$809.00M | −33.7% |
| EPS (Basic) | $3.88$5.90 | −34.2% |
| EPS (Diluted) | $3.86$5.86 | −34.1% |
| Shares Outstanding (Basic) | 138.00M137.20M | +0.6% |
| Shares Outstanding (Diluted) | 138.80M138.10M | +0.5% |
05—Questions
Frequently Asked Questions
What were the primary drivers for the decrease in net income in Q3 2025?
The decrease in net income for the third quarter of 2025 was primarily driven by lower demand in on-highway commercial truck markets, a goodwill impairment charge and inventory write-down in the Accelera segment totaling $240 million, and an unfavorable tax expense resulting from the 'One Big Beautiful Bill Act.' These factors were partially offset by strong growth in power generation markets, increased demand in light-duty automotive markets, and lower compensation expenses.
How did the Atmus divestiture impact the year-to-date financial results?
The nine-month results for 2025 were impacted by the absence of the significant $1.3 billion non-taxable gain on the Atmus divestiture that was recognized in the prior year period (nine months ended September 30, 2024). While the gain itself is not present, the divestiture did contribute to a decrease in reported sales for the nine-month period in the Components segment.
What is the current financial health and liquidity position of Cummins?
Cummins maintains a strong financial position. The company generated $2.087 billion in cash from operating activities for the first nine months of 2025. As of September 30, 2025, the company had $3.2 billion in cash and marketable securities and access to $4.0 billion in credit facilities. The debt-to-capital ratio improved to 36.8%, and the company continues to return capital to shareholders through dividends.
What are the company's key challenges and outlook for the remainder of 2025?
Key challenges include continued weak demand for medium-duty and heavy-duty trucks in North America, potential impacts from increased costs, tariffs, and inflationary pressures. The company also faces regulatory uncertainties related to emissions standards and government policies impacting the adoption of zero-emission technologies. The outlook anticipates continued strength in Power Systems and a stable aftermarket business, but warns of these persistent challenges.
06—Continue