Reported sales rose 58.4% on the REV deal, or 11.6% pro forma, yet operating margin fell to 8.3% from 10.1% and diluted EPS rose only 2.0% 8-K. Management refined 2026 guidance to sales of $8.0 to $8.2 billion 8-K.
Terex Corporation · Q3 2026 · Reported 28 Oct 2026 · US
Key figures
Million USD | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
Revenue | 2,197.00 | 1,387.00 | +58.4 % |
Operating income | 183.00 | 140.00 | +30.7 % |
Net income | 114.00 | 65.00 | +75.4 % |
Diluted EPS | 1.00 USD/share | 0.98 USD/share | +2.0 % |
Operating cash flow | 241.00 | 154.00 | +56.5 % |
Operating margin | 8.3 % | 10.1 % | -1.8 pp |
Net margin | 5.2 % | 4.7 % | +0.5 pp |
Figures in USD, as reported. Margins are computed from the reported lines. Operating cash flow for the quarter are derived by subtracting year-to-date periods.
Most of the sales jump is acquired; pro forma growth was 11.6%
Sales reached $2.2 billion, up 58.4% on a reported basis against $1.39 billion a year earlier 8-K. Pro forma sales, which treat mergers and divestitures as if they had occurred earlier, grew 11.6%, driven by Materials Processing, Specialty Vehicles and Aerials 8-K.
Backlog stood at $7.0 billion, up 12.9% on a pro forma basis, and bookings of $2.3 billion implied a book-to-bill of 103% 8-K. That supports the volume story, but the 58.4% headline mostly reflects the enlarged company 8-K.
Reported margins fell, while adjusted operating margin barely moved
Operating income rose 30.7% to $183 million, well behind sales, so operating margin fell to 8.3% from 10.1% a year earlier 8-K. Gross margin was 19.8% against 21.6% 8-K. Amortization of purchased intangibles was $53 million against $17 million, and purchase price accounting added $60 million to the operating profit adjustment 8-K.
Company-defined adjusted operating margin was 11.9% against 12.1% a year earlier, so most of the reported compression is acquisition accounting and other adjusted items rather than a change in the adjusted result 8-K. Company-defined adjusted EBITDA was $286 million, a 13.0% margin 8-K.
Net income rose 75.4%, but EPS barely moved
Net income rose 75.4% to $114 million, while diluted EPS rose 2.0% to $1.00 from $0.98 8-K. The implied diluted share count rose about 72%, which explains the gap 8-K. A lower GAAP effective tax rate also helped, at 15.6% against 31.4% a year earlier 8-K. Company-defined adjusted EPS was $1.50, the same as a year earlier 8-K.
Operating cash flow was $241 million against $154 million, and free cash flow was $209 million against $130 million 8-K. Cash conversion was 211% of net income against 237% a year earlier. The CFO credited improved working capital efficiency 8-K.
Segment margins diverged: Materials Processing and Specialty Vehicles up, Environmental Solutions and Aerials down
Materials Processing adjusted EBITDA margin was 19.3% against 13.5% a year earlier, on higher volume, mix and absorption 8-K. Specialty Vehicles reached 16.0% against 13.0% pro forma 8-K.
Environmental Solutions sales fell 8.0% on lower refuse collection vehicle shipments, and its margin fell to 15.3% from 19.2%, which management attributed to mix, a Utilities production ramp-up, under-absorption and inflation 8-K. Aerials sales rose 32.0%, yet its margin fell to 8.7% from 10.5% on customer mix, inflation and tariffs 8-K.
What to watch next
Management expects 2026 sales of $8.0 to $8.2 billion, adjusted EBITDA of $930 million to $960 million, adjusted EPS of $4.80 to $5.00 and free cash flow of $360 million to $400 million, with 113 million diluted shares in Q4 8-K.
The Aerials separation has moved to active engagement with multiple strategic counterparties; its outcome could change the mix 8-K.
The new $500 million buyback authorization, which brings total availability to $611 million, will show whether it offsets the larger share count 8-K.
The report does not give Aerials separation timing.
Sources
Produced by Clarifo Research with the Clarifo financial research engine from the company's public filings. AI was used in parts of the analysis and drafting. Figures are checked automatically against the filings they come from. This is not investment advice.