Cummins 8-K

Summary

Q3 2026 results with updated FY2026 outlook. Strength in power generation, particularly data-center demand, drove record EBITDA (earnings before interest expense, income taxes, depreciation and amortization and noncontrolling interests), while weaker North American pickup demand offset stronger truck markets: revenue grew 13.5% Y/Y but slipped 0.2% Q/Q, after rising 12.6% Q/Q in Q2.

FY2026 revenue growth guidance was lowered to ≈10% from 10%-13%; non-GAAP EBITDA margin guidance, excluding charges related to the low-pressure fuel cell business sale, narrowed to ≈18.2% from 18.0%-18.5%. Cummins reaffirmed its 23.0% effective tax rate outlook excluding discrete items and the sale-related tax impact. Pickup weakness is expected to persist through year-end, while Q4 revenue is expected to rise from Q3 and set a record; the company remains committed to returning 50% of operating cash flow to shareholders.

Developments

• Cummins’ Power Generation business was selected to supply battery energy storage systems (BESS) for a large U.S. data-center project, its largest BESS deployment to date. The systems are intended to help manage AI-driven load fluctuations and improve ride-through performance.
• More than 500 customers and dealers experienced Cummins’ upcoming HELM engine platforms during its 2026 Forever Rising Tour, including the 2027 X15, X10 and natural gas X15N engines.
• Cummins raised its quarterly common-stock dividend in July to $2.20 per share from $2.00; it has increased the dividend for 17 consecutive years.

Results with guidance

Metric	Q3 2026 actual	9M 2026	FY2026 guide
Revenue	$9.44B+13% Y/Y, -0.2% Q/Q	$27.3B+8.6% Y/Y	10% growth Y/Y
Effective tax rate (excluding items)	—	—	23.0%reaffirmed from 23.0%
EBITDA margin (non-GAAP) (excluding items)	—	—	18.2%narrowed from 18.0%-18.5%

Results without guidance

Metric	Q3 2026	Change	9M 2026
Operating income	$1.44B	+69% Y/Y, +13% Q/Q	$3.67B+14% Y/Y
Net income	$1.14B	+113% Y/Y, +22% Q/Q	$2.73B+21% Y/Y
Diluted EPS	$8.25	+114% Y/Y, +23% Q/Q	$19.70+21% Y/Y
Operating cash flow	$1.41B	+7.7% Y/Y, -6.3% Q/Q	$3.21B+54% Y/Y
Capital expenditures	$303M	+1.7% Y/Y, +22% Q/Q	$741M+7.2% Y/Y
Cash and cash equivalents	$3.57B	+12% Q/Q	—
Cash and marketable securities	$4.18B	+6.7% Q/Q	—
Diluted shares	138M	-0.5% Y/Y, -0.3% Q/Q	138M-0.1% Y/Y

What moved the numbers

• Q3 GAAP diluted earnings per share included $0.54 of favorable discrete tax items. Q3 2025 included $240M of non-cash Accelera charges.
• Engine segment sales were $3.1B, up 20% Y/Y; segment EBITDA was $422M, or 13.5% of sales, vs $261M and 10.0%. Components sales were $2.9B, up 23%; EBITDA was $408M, or 14.3% of sales, vs $292M and 12.5%.
• Distribution sales were $3.3B, up 4% Y/Y; EBITDA was $461M, or 13.9% of sales, vs $492M and 15.5%. Power Systems sales were $2.3B, up 15%; EBITDA was $582M, or 25.4% of sales, vs $457M and 22.9%. Data-center power generation demand drove growth in both segments.
• Accelera sales were $103M, down 15% Y/Y, primarily due to lower electrolyzer sales following a strategic review; its EBITDA loss was $56M. Q3 2025 included a $210M goodwill impairment and a $30M inventory write-down.
• The Q1 sale of the low-pressure fuel cell business, cancellation of future commitments and settlement of customer claims resulted in a $199M net charge and a $175M net payment by Cummins. Q3 shareholder returns totaled $661M: $359M in share repurchases and $302M in dividends.

Other guidance (1)

Metric	Period	Guidance
Operating cash flow returned to shareholders	unspecified	50%

Figures extracted from the filings and checked against their text; changes and verdicts computed from them.