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Dec 31, 2025
Caterpillar Q4 2025 Earnings Report
Caterpillar reported record revenue and backlog in Q4 2025 despite tariff-related cost pressures.
Key Takeaways
Caterpillar delivered a strong Q4 2025 with $19.1B in revenue and $2.4B in net income. Adjusted EPS came in at $5.16, with MP&E free cash flow rising to $3.7B. Order backlog surged to a record $51.2B, although operating income declined due to higher manufacturing costs, largely driven by tariffs.
Revenue hit $19.1B, up from $16.2B a year ago.
Adjusted EPS came in at $5.16, slightly above last year.
Operating income fell due to higher manufacturing and tariff-related costs.
Order backlog surged to $51.2B, setting a new record.
Revenue by Segment
Forward Guidance
Caterpillar expects revenue growth near the top of its long-term CAGR target in 2026, with adjusted margins pressured by $2.6B in incremental tariffs.
Positive Outlook
- Sales and revenues expected to grow near top end of 5-7% CAGR target
- Services revenues projected to grow year over year
- Adjusted operating profit margin expected in top half of range excluding tariffs
- Dealer inventories expected to normalize seasonally in Q1 2026
- Continued strong MP&E free cash flow anticipated
Challenges Ahead
- Incremental tariff costs estimated at $2.6B in 2026
- Adjusted margins will be near bottom of range including tariffs
- MP&E free cash flow expected to decline slightly from 2025
- Q1 2026 margin expected to decline if including tariffs
Historical Earnings Impact
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Avg. Return Before/After Earnings
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