Terex (TEX) Q3 2025 earnings summary

Executive summary

• Terex and REV Group announced a definitive merger agreement, creating a large-scale, U.S.-centric specialty equipment manufacturer with complementary operations and leading brands.

• Q3 2025 net sales reached $1.4 billion, up 14% year-over-year, with adjusted EPS of $1.50 and free cash flow conversion at 200%.

• The merger will result in Terex shareholders owning 58% and REV shareholders 42% of the combined company, with $425 million in cash consideration to REV shareholders.

• The combined company will exit the Aerial Segment, reducing exposure to cyclical markets and enhancing earnings predictability.

• The merger is expected to close in the first half of 2026, subject to customary conditions.

Financial highlights

• The combined company is projected to generate $5.8 billion in revenue and achieve EBITDA margins of about 14% post-synergies and Aerial exit.

• Q3 2025 adjusted operating margin was 12.1% and adjusted EBITDA margin was 13.4%.

• REV Group has a $4.5 billion backlog, with $4.2 billion in Specialty Vehicles and $300 million in Recreational Vehicles, representing a 2–2.5 year backlog.

• Free cash flow for Q3 2025 was $130 million, with a free cash flow conversion rate of 200%.

• Gross profit for Q3 2025 was $282 million (20.3% of sales), up from $245 million (20.2%) in Q3 2024.

Outlook and guidance

• Full-year 2025 net sales are expected to be $5.3–$5.5 billion, with EPS guidance maintained at $4.70–$5.10.

• The merged entity targets at least $75 million in annual synergies, with half expected within 12 months of closing.

• Pro forma 2025 adjusted EBITDA margin is expected to be in the mid-teens, near the top of the specialty equipment peer group.

• The company anticipates continued growth driven by resilient end markets, infrastructure spending, and utility upgrades.

• Tariffs are expected to have a net unfavorable impact of $0.70 per share for the full year.