Mig Dobre

Mig Dobre sought specific year-over-year revenue decline and margin expectations for the Access segment in Q1 2026. Dobre also questioned the visibility for the full-year Access revenue guide of $4.2 billion, given the Q4 2025 order intake, and asked when Oshkosh anticipates reaching a $300 million quarterly revenue run rate for the Next Generation Delivery Vehicle (NGDV) program.

Answer

CFO Matt Field stated that the Q1 2026 Access revenue decline year-over-year is expected to be higher than the full-year guide of 6-7% due to strong Q4 2025 sales from pricing actions. CEO John Pfeifer explained that the $1.3 billion Access backlog, representing 3-6 months of demand, supports the $4.2 billion full-year guide, with the first half under pressure but showing consistent progress. Pfeifer confirmed NGDV production is at or ahead of USPS requirements, with 2026 units at the low end of the 16,000-20,000 annual range, and NGDV revenue comprising about half of the Transport business guide.

Mig Dobre requested specific year-over-year revenue decline and margin expectations for the Access segment in Q1. He also questioned the visibility for the implied improvement in the full-year Access guide of $4.2 billion, and when the NGDV program is expected to reach its full run rate of $300 million quarterly revenue.

Answer

EVP and CFO Matt Field stated that the Q1 Access revenue decline year-over-year is expected to be higher than the full-year guide due to Q4 sales pull-forward. President and CEO John Pfeifer noted that the $1.3 billion backlog, representing three to six months of demand, supports the full-year Access guide. For NGDV, John Pfeifer confirmed they are at or ahead of USPS delivery requirements, with 2026 production at the low end of the 16,000-20,000 unit range, and about half of the Transport segment's revenue for 2026 will be from NGDV.

Mig Dobre from Baird asked about the outlook for the European segment in fiscal 2027, particularly concerning the dissipation of EU subvention funds in Romania and broader regional trends. He also questioned the potential for further stimulus packages in Europe and the outlook for the North American business in fiscal 2027, including expected declines and equipment margins. Finally, he sought clarification on inventory levels in terms of unit counts, considering price increases and store count changes.

Answer

CFO Bo Larsen stated that Romania's revenue doubled year-over-year due to funds, but a 30-40% pullback is expected for fiscal 2027, with some prescriptive funds continuing through 2027. He projected a high-teens to 20% year-over-year decline for Europe ex-Germany. For North American margins, Bo Larsen indicated that domestic ag equipment margins improved to 6.5% in the second half of the current fiscal year (5.25% excluding incentives), which could be a proxy for early fiscal 2027. President and CEO Bryan Knutson discussed ongoing footprint optimization and multi-brand strategy with CNH, and highlighted commodity prices and government stimulus as key variables for 2026 demand. On inventory, Bo Larsen explained that while dollar values are up due to price increases, unit counts are significantly better than prior downturns, with aged used equipment being a key focus for reduction. Bryan Knutson emphasized monitoring inventory turns and interest expense as better indicators than pure dollar value.

Mig Dobre asked about the Europe segment's performance, particularly the dissipation of stimulus in Romania, and sought an outlook for fiscal 2027. He also questioned the US business outlook for fiscal 2027, asking if another year of decline is expected and how equipment margins would fare with volume compression. Additionally, he inquired about inventory levels in terms of unit counts relative to prior cycles.

Answer

Bo Larsen, CFO, indicated that Romania's business doubled year-over-year but expects a 30-40% pullback in fiscal 2027, with Europe ex-Germany potentially down high teens to 20%. He noted that domestic ag equipment margins improved significantly in the second half of fiscal 2026, suggesting a 5.25% proxy for early fiscal 2027. Bryan Knutson, President and CEO, discussed ongoing footprint optimization, multi-brand strategy, and the challenging outlook for growers in fiscal 2027 due to commodity prices and government assistance. Both executives emphasized managing inventory by turns and interest expense, aiming for leaner inventories.