AGCO (AGCO) Q1 2026 earnings summary

Executive summary

• Net sales rose 14.3% year-over-year to $2.34 billion in Q1 2026, driven by strong EME, North America, and Asia/Pacific/Africa performance, with adjusted EPS at $0.94 and operating income at $80.7 million.

• Operating margin improved 100 basis points to 3.4%, while adjusted operating margin reached 4.6%, reflecting business optimization and volume leverage.

• Net income attributable to shareholders was $55.0 million ($0.76 per diluted share), up from $10.5 million ($0.14 per diluted share) in Q1 2025.

• Dealer inventories improved, supporting operational stability and better customer service.

• AI integration, innovation awards, and strategic evolution of finance joint ventures highlight ongoing investment in technology and operational efficiency.

Financial highlights

• Gross margin was 24.8% in Q1 2026, down from 25.3% year-over-year due to higher manufacturing costs, including tariffs.

• Free cash flow was negative $455 million in Q1 2026, reflecting normal seasonal inventory build.

• Consolidated replacement part sales were $447 million, up 3% year-over-year.

• SG&A expenses rose in absolute terms but declined as a percentage of sales (14.5% vs. 15.9%).

• Engineering expenses increased to $132.6 million, reflecting higher investment in product innovation.

Outlook and guidance

• Full-year 2026 net sales outlook is $10.5–$10.7 billion, with adjusted EPS targeted at ~$6.00 and adjusted operating margin at 7.5%-8%.

• Free cash flow conversion remains targeted at 75%-100% of adjusted net income, with capex of ~$350 million.

• Second quarter net sales expected between $2.7–$2.8 billion; EPS targeted at $1.35–$1.40.

• Tariff costs for 2026 expected at ~$135 million, $90 million higher than 2025.

• Production volumes anticipated to remain flat or slightly lower, with cost controls and positive pricing supporting performance.