Executive Summary

Mixed print with revenue resilience but margin compression: consolidated revenue $4.40B (-5% y/y) beat consensus ($4.22B*) while adjusted EPS $0.08 missed ($0.14*), driven by tariffs, NA ag weakness, and adverse mix (consensus via S&P Global*).
Guidance pivot: net sales outlook tightened higher for both Ag and Construction, but margins/EPS cut to reflect expanded U.S. steel/aluminum tariffs and mix; FY adj. EPS cut to $0.44–$0.50 from $0.50–$0.70; Industrial FCF floor raised to $200–$500M .
Ag under pressure (NA tractors >140HP -41% y/y; combines -23%); EMEA tractors modestly lower, combines +19%; Construction net sales +8% y/y but margins impacted by tariffs .
Management emphasized tariff mitigation (sourcing, footprint, pricing) and structural cost/quality programs; combine slots in NA sold out for the year; Tech Day to showcase iron + tech integration and AI-enabled features .

What Went Well and What Went Wrong

What Went Well
- Revenue held up vs estimates on stronger EMEA Ag and Construction volume/pricing; consolidated revenue $4.40B vs $4.22B* consensus (consensus via S&P Global*).
- Operational execution on quality and costs: management cites >$60M YTD quality cost reductions; adjusted gross margin outperformed GAAP by 30bps (19.4% vs 19.1%) due to discrete items .
- Commercial traction and product pipeline: NA flagship combine slots sold out for the year; multiple tractor/hay & forage launches and AI-enabled automation to be highlighted at Agritechnica/Tech Day .
What Went Wrong
- EPS miss and sharp margin compression: adjusted EPS $0.08 vs $0.14*; Industrial Activities adj. EBIT margin fell to 2.8% (−560 bps y/y) on tariffs, NA mix, and destocking (consensus via S&P Global*).
- Agriculture profitability deteriorated: adj. EBIT margin 4.6% (−560 bps y/y) with NA Ag sales −29% and tariff drag; R&D ratio rose to 8.6% of sales including a $49M Bennamann IPR&D impairment .
- Financial Services softness: net income $47M (−40% y/y) on higher Brazil risk costs; delinquencies >30 days increased to 3.5% vs 2.2% last year .

Financial Results

Headline metrics (GAAP unless noted)

Metric	Q3 2024	Q2 2025	Q3 2025	Consensus Q3 2025
Consolidated Revenues ($USD B)	$4.65	$4.71	$4.40	$4.22*
Net Sales of Industrial Activities ($USD B)	$4.00	$4.02	$3.70	—
Diluted EPS (GAAP) ($)	$0.24	$0.17	$0.06	—
Adjusted Diluted EPS ($)	$0.24	$0.17	$0.08	$0.14*
Adj. EBIT – Industrial Activities ($USD M)	$336	$224	$104	—
Adj. EBIT Margin – Industrial Activities (%)	8.4%	5.6%	2.8%	—
Gross Profit Margin – Industrial Activities (%)	21.7%	20.6%	19.1%	—
Cash from Operations ($USD M)	$791	$772	$659	—

Segment performance

Segment	Metric	Q3 2024	Q2 2025	Q3 2025
Agriculture	Net Sales ($USD M)	3,310	3,248	2,963
	Adjusted EBIT ($USD M)	336	263	137
	Adjusted EBIT Margin (%)	10.2%	8.1%	4.6%
Construction	Net Sales ($USD M)	687	773	739
	Adjusted EBIT ($USD M)	40	35	14
	Adjusted EBIT Margin (%)	5.8%	4.5%	1.9%
Financial Services	Revenues ($USD M)	659	685	684
	Net Income ($USD M)	78	87	47

KPIs and operating drivers

| KPI | Q3 2024 | Q2 2025 | Q3 2025 | |---|---|---:|---:|---:| | Industrial Activities Free Cash Flow ($USD M) | (180) | 451 | (188) | | Cash & Equivalents ($USD M) | — | 2,512 | 2,303 | | ETR (GAAP) (%) | 20.8% | 27.6% | 2.0% | | Dealer Inventory Sequential Change ($USD B) | — | — | (0.2) | | Ag Production Hours Δ YoY | — | — | (2)% | | CE Production Hours Δ YoY | — | — | +3% | | FS Delinquencies >30 days (%) | 2.2% | — | 3.5% |

Notes on non-GAAP/adjustments: Adjusted results exclude $49M Bennamann IPR&D impairment and $10M methane tractor write-down; both recognized in Q3 and added back in adjusted EBIT/adjusted net income reconciliations .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Agriculture Net Sales (YoY, cc impact noted)	FY 2025	Down 12%–20% incl. ~−1% FX	Down 11%–13% (no FX)	Raised (narrowed higher)
Agriculture Adjusted EBIT Margin	FY 2025	7%–9%	5.7%–6.2%	Lowered
Construction Net Sales (YoY, cc impact noted)	FY 2025	Down 4%–15% incl. ~−1% FX	Down 3%–5% (no FX)	Raised (narrowed higher)
Construction Adjusted EBIT Margin	FY 2025	2%–4%	1.7%–2.2%	Lowered
Industrial Activities Net Sales (YoY)	FY 2025	(19%)–(11%)	(12%)–(10%)	Raised
Industrial Activities Adj. EBIT Margin	FY 2025	4.5%–6.5%	3.4%–3.9%	Lowered
Industrial Activities Free Cash Flow	FY 2025	$0.1B–$0.5B	$0.2B–$0.5B	Raised floor
Adjusted Diluted EPS	FY 2025	$0.50–$0.70	$0.44–$0.50	Lowered

Why guidance moved: Expanded Section 232 steel/aluminum tariffs in August, NA→EMEA sales mix shift, and product mix (large→small ag) pressured margins; mitigation underway (sourcing, footprint, pricing) but CNH is sharing net tariff costs near-term .

Earnings Call Themes & Trends

Topic	Q1 2025 (May)	Q2 2025 (Aug)	Q3 2025 (Nov)	Trend
AI/Technology	Emphasis on operational excellence and upcoming strategy day; continued precision tech investments .	Ongoing cost/tech execution; reaffirmed priorities .	Tech Day announced; AI-enabled corn header automation and ForageCam; dealer AI tech assistant improving help desk efficiency >30% .	Increasing focus and productization
Supply Chain & Tariffs	Updated guidance to reflect multiple trade scenarios and tariff uncertainty .	“Uncertainty of U.S. trade policy” flagged; guidance reaffirmed .	Concrete tariff sizing: 2025 net impact ~$100M Ag/$40M CE; Q4 ~$60M/$20M; gross annualized costs ~$250M/$125M (to be fully offset over time) .	Rising near-term headwind; long-term offset plan
Product Performance	Ag & CE net sales −23%/−22% y/y on destocking/market decline .	Ag −17% y/y; CE −13% y/y .	Ag −10% y/y; CE +8% y/y; EMEA Ag support; NA Ag weak .	Ag stabilizing ex-NA; CE improving
Regional Trends	NA Ag down; EMEA Ag down; APAC tractors up .	NA down; EMEA mixed; APAC modestly positive .	NA tractors >140HP −41%, combines −23%; EMEA tractors −2%, combines +19% .	Mix shift toward EMEA
R&D Execution	Ag R&D 6.3% of sales .	Ag R&D 6.0% of sales .	Ag R&D 8.6% incl. $49M IPR&D impairment (Bennamann) .	Elevated (one-time impact)
Regulatory/Legal	Trade/tariff uncertainty embedded in scenarios .	—	Supreme Court/tariff relief asked; CNH not assuming relief (232 ~20% of costs) .	Not in base case

Management Commentary

CEO tone: “While the current trade environment remains challenging... we are maintaining disciplined production levels, reducing channel inventories, investing in technology, and driving operational excellence... I am confident that the steps we are taking will position CNH for renewed growth” .
Cost/quality progress: “Our diagnostic AI tech assistant... has significantly reduced the time to identify solutions... we have reduced our quality costs by over $60 million year-to-date” .
Tariff strategy: “We intend to fully offset the tariff cost impacts through cost mitigation, structural realignments, and pricing actions... 2025 is absorbing some impact alongside suppliers, network partners, farmers, and builders” .
Commercial demand: “Our flagship combines in North America... production slots are sold out for the entire year” .

Q&A Highlights

Ag margin bridge: Decline driven by NA −29% sales, higher SG&A (normalized variable comp), tariffs, and geographic mix; underlying decrementals ~25–30% excluding these effects. Product cost breakout: +$33M favorable including $44M tariff cost; ex-tariffs, +$77M (quality +$44M, purchasing/manufacturing +$17M, other +$16M) .
Tariff quantification and outlook: 2025 net impact ~$100M Ag/$40M CE; Q4 ~$60M/$20M; gross annualized ~~$250M/~~$125M equating to ~200 bps Ag and ~425 bps CE margin headwinds at 2025 volumes; plan to fully offset longer term .
Pricing stance: More aggressive/faster pricing in CE vs peers; Ag list price +3–4% for early order program, tracking well with filled production slots .
2026 setup: Expect production closer to retail (mid‑single-digit % increase in production hours y/y) with absorption benefit; industry retail demand in 2026 seen flat to slightly down overall; NA large Ag slightly down, EMEA slightly up .
Channel inventories: New NA dealer inventory target achievable in next few months; used inventory trending lower for three consecutive quarters but still above optimal levels .

Estimates Context

Q3 2025 results vs S&P Global consensus: revenue beat ($4.40B vs $4.22B*) and adjusted EPS miss ($0.08 vs $0.14*). EPS shortfall reflects tariff costs, adverse NA/EMEA mix, and higher SG&A accruals; revenue aided by EMEA Ag strength and CE volume/pricing (consensus via S&P Global*).
Implications: Street likely to reduce FY margin/EPS estimates to new guidance ranges and embed higher tariff headwinds while acknowledging improved sales trajectory and better Industrial FCF floor .

Values retrieved from S&P Global*

Key Takeaways for Investors

Near-term: Mixed print likely read negatively on margins/EPS/guidance cuts despite revenue/FCF positives; tariff sizing (Q4 heavier) and NA Ag trajectory remain key trading drivers .
Medium-term: Tariff mitigation roadmap (sourcing, footprint, pricing) and structural cost/quality gains support recovery in cycle normalization; 2030 margin targets reiterated as not jeopardized .
Watch mix: EMEA-led Ag recovery helps top line but dilutes margins vs NA; product launches/EMEA network upgrades are intended to raise EMEA profitability over time .
Channel normalization: New equipment inventories approaching targets; used inventories improving but still elevated—monitor resale values and wholesale activity into 2026 .
Construction: Demand steadier and pricing more responsive, but tariff bps impact is proportionally larger; footprint optimization (e.g., Burlington plan closure by 2Q26) should aid structural margins .
Liquidity/funding: Available liquidity remains solid; August €500M 3.875% 2035 notes enhance flexibility (general corporate/debt repayment) .
Event catalysts: Tech Day/Agritechnica launches and ongoing tariff policy developments; Q4 call to detail cost improvement vs investor day targets .

Additional Context: Other Relevant Q3 2025 Press Releases

Financing: Priced €500M 3.875% notes due 2035 for general corporate purposes/debt repayment, supporting balance sheet flexibility .
Technology: CNH highlighted AI’s role in precision ag (SenseApply, FieldOps), reinforcing “iron + tech” narrative ahead of Agritechnica .

Appendix – Segment and Industry Details (select)

Agriculture: NA small tractors flat; >140 HP −41% y/y; combines −23% y/y. EMEA tractors −2% y/y; combines +19% y/y. APAC tractors +19% y/y .
Construction: Global industry up 6% (heavy) and 3% (light) y/y in Q3; CE net sales +8% y/y; adj. EBIT margin 1.9% on tariff/SG&A headwinds despite pricing .

CNH Industrial N.V. (CNH)·Q3 2025 Earnings Summary