Cummins reported QQ3 2025 revenue of $8.317 billion, a year-over-year decline of 1.64% and a quarter-over-quarter decline of 3.77%. Despite a softer top line, the company delivered a solid gross margin of approximately 25.6% and an operating margin near 10.2%, with operating income of $0.852 billion and net income of $0.536 billion (EPS $3.88). The quarter underscored resilience in profitability driven by cost discipline and a favorable mix toward higher-margin aftermarket activities, even as cyclical demand remained modest in certain regions.
Cash generation remained robust, highlighted by operating cash flow per share of $9.47 and free cash flow per share of $7.31, supported by a payout ratio around 51.5% and a strong balance sheet (debt ratio ~0.217; interest coverage ~10.3x). Cummins also exhibits a healthy capital framework with ample liquidity to fund capex and value-creating aftermarket initiatives, while continuing to invest in New Power and electrified solutions. Looking ahead, the company faces a mixed macro backdrop with continued cyclicality in engine demand, but maintains a constructive longer-term outlook supported by durable aftermarket demand, service penetration, and strategic expansion in electrified power systems.