Net Income (overall)

FY 2025

$4.75B to $5.50B "

$4.75B to $5.25B " "

lowered

Effective Tax Rate

FY 2025

20% to 22% "

19% to 21% "

lowered

Operating Cash Flow

FY 2025

$4.5B to $5.5B "

$4.5B to $5.5B "

no change

Construction and Forestry – Net Sales

FY 2025

Decline by 10% to 15% "

Decline by 10% to 15% "

no change

Construction and Forestry – Operating Margin

FY 2025

8.5% to 11.5% "

8.5% to 10% "

lowered

Financial Services – Net Income

FY 2025

$750 million "

$770 million "

raised

Tariff Costs / Impact

FY 2025

Just over $500 million "

$600 million " "

raised

Efficient Inventory Management and Production Planning

In Q1 and Q2, Deere consistently discussed reducing excess inventories, aligning production schedules to demand, and proactively underproducing certain segments through detailed inventory reductions and production adjustments. " " " "

In Q3, Deere emphasized aggressive inventory reductions across segments, efficient factory operations, and strategic production planning to set the stage to quickly respond to future market demand. " "

Recurring focus with a heightened emphasis on aggressive inventory reduction and precise production planning to navigate current market challenges. " "

Early Order Programs and Pricing Flexibility

Q1 and Q2 discussions highlighted phased early order programs with slower bookings in some product lines and the integration of modest price increases or flexibility to adjust for tariffs, with incentives to stabilize the used market. " " " "

Q3 commentary described adjusted EOP structures—shorter program windows and more flexibility in price adjustments, including price changes to account for potential tariff shifts, with clearer visibility into order books. " "

Recurring topic with evolved program structure and more dynamic pricing flexibility to match market and tariff uncertainties. " "

Technological Innovation and Precision Agriculture

Q1 and Q2 calls focused on the rollout of Precision Ag Essentials, JDLink connectivity solutions, and the expansion of SaaS platforms with significant orders and increased digital engagement; initiatives included precision technology adoption and connectivity improvements. " " " "

Q3 emphasized continued adoption of JDLink Boost, broadening global reach of precision offerings (e.g., satellite connectivity in regions lacking cell coverage) and leveraging AI for data utilization, reinforcing the strategic innovation narrative. " "

Recurring and strengthening emphasis on innovation and precision ag with accelerated global adoption and integration of advanced connectivity and AI-driven insights. " "

Tariff Pressures and Cost Management

In Q1 and Q2, Deere addressed tariff exposures with moderate impacts and outlined initiatives for cost reduction through tighter sourcing, dual sourcing, and efficient production – noting impacts on margins and forecasting challenges. " " " "

Q3 highlighted increased tariff costs (with a full-year forecast rising to nearly $600 million) and further cost management initiatives including material cost reductions and adjusted production efficiencies, emphasizing more acute tariff pressures. " " " "

Recurring topic with increased intensity in tariff costs forcing a stronger focus on cost management and mitigation actions. " "

Margin Pressures and Pricing Uncertainty

Across Q1 and Q2, Deere discussed margin pressures driven by production underperformance in certain segments, negative price realizations (especially in construction & forestry), and cautious pricing measures to maintain a narrow positive price realization guide. " " " " "

Q3 continued to report margin compression due to increased tariffs and production cost challenges, noting negative price realizations in some segments while embedding tariff-driven pricing adjustments in early order programs to protect overall margins. " " " " "

Recurring concerns about margin and pricing volatility, with pressures intensifying due to external cost factors while maintaining a cautious pricing approach. " "

Demand Uncertainty and Operational Challenges

In Q1 and Q2, Deere addressed widespread demand uncertainty across agricultural and construction sectors with cautious customer behavior, production adjustments (e.g., underproduction to trim inventories) and noted macroeconomic headwinds along with operational challenges in managing production and cost control. " " " " "

Q3 depicted similar uncertainty with more explicit identifiers such as challenging global trade, heightened customer caution, and detailed operational tweaks like aggressive inventory management and production adjustments to cope with varied regional demand trends. " " " "

Recurring theme of demand volatility with continued operational adjustments; the emphasis on disciplined execution has intensified in the current period. " " "

Government Support Impacts on Equipment Demand

Q1 and Q2 mentioned that substantial government payments and support measures helped stabilize farmer balance sheets, though historical patterns suggested these aids served more to maintain liquidity than to drive immediate equipment orders. " " "

In Q3, government support was cited as a mitigating factor—such as stable farm balance sheets and favorable tax policies—but its impact was seen as supportive rather than transformational for immediate equipment demand. " " "

Recurring supportive theme; government aid continues to cushion demand uncertainty although it has not translated into robust immediate equipment orders. " " "

Future Recovery Uncertainty and Potential Need for Restructuring

Q1 discussion explicitly acknowledged future recovery uncertainty; management, led by Josh Jepsen, stressed that while 2026 remains unpredictable, the current focus is on managing controllable factors without resorting to restructuring. Similar themes were implied in Q2 without explicit restructuring mention. " " "

In Q3, while future recovery uncertainty was acknowledged as part of the challenging market dynamics, there was no direct discussion on restructuring—emphasis remained on targeted cost management and inventory adjustments to be well‐positioned for recovery. " " " "

Recurring acknowledgment of uncertainty about recovery with a consistent message across periods that the company is addressing challenges through disciplined management rather than restructuring. "