Key financial results
- Cummins reported third quarter revenues of $9.4 billion, representing a 13% increase compared to the third quarter of 2025.
We delivered third quarter revenues of $9.4 billion, an increase of 13% compared to the third quarter of 2025.
- The company achieved record quarterly EBITDA of $1.8 billion, or 18.9% of sales, compared to $1.2 billion, or 14.3% of sales, in the prior year period.
We achieved record quarterly EBITDA of $1.8 billion or 18.9% of sales compared to $1.2 billion or 14.3% of sales a year ago.
- Diluted earnings per share were $8.25 compared to $3.86 a year ago, with the prior year including $240 million in noncash Accelera charges.
All-in net earnings were $1.1 billion or $8.25 per diluted share compared with $536 million or $3.86 per diluted share a year ago.
- Operating cash flow for the quarter was $1.4 billion compared to $1.3 billion in the third quarter of 2025.
All in operating cash flow was $1.4 billion compared with $1.3 billion a year ago.
- Gross margin reached a record 27.7% of sales, up from 25.6% a year ago, driven by higher volumes and favorable pricing.
Gross margin was $2.6 billion or a record 27.7% of sales compared with $2.1 billion or 25.6% of sales a year ago.
Business segment results
- Engine business: Engine business third quarter revenues were $3.1 billion, up 20% from a year ago, with EBITDA margin improving to 13.5% from 10%.
Engine business third quarter revenues were $3.1 billion, up 20% from a year ago.
- Components: Components revenues were $2.9 billion, up 23% from a year ago, with EBITDA margin increasing to 14.3% from 12.5%.
Components revenues were $2.9 billion, up 23% from a year ago.
- Distribution: Distribution revenues increased 4% to $3.3 billion, while EBITDA margin declined to 13.9% from 15.5% due to a lower mix of aftermarket revenues.
Distribution revenues increased 4% from a year ago to $3.3 billion, and EBITDA margin declined to 13.9% from 15.5% a year ago
- Power Systems: Power Systems revenues reached a record $2.3 billion, up 15% year-over-year, and EBITDA margin increased to 25.4% from 22.9%.
Power Systems revenues were a record $2.3 billion, up 15% year-over-year, and EBITDA margin increased 250 basis points to 25.4% from 22.9% a year ago
- Accelera: Accelera revenues were $103 million compared to $121 million a year ago, and EBITDA was a loss of $56 million.
Accelerated revenues were $103 million compared with $121 million a year ago, mainly due to a lower electrolyzer sales.
Capital allocation
- During the quarter, Cummins returned $661 million to shareholders, consisting of $359 million in share repurchases and $300 million in cash dividends.
During the quarter, we returned $661 million to shareholders consistent with our long-standing commitment to return approximately 50% of operating cash flow to shareholders.
- Total capital investments guidance for 2026 remains unchanged between $1.35 billion and $1.45 billion.
Our outlook for capital investments is unchanged between $1.35 billion and $1.45 billion
Industry trends and dynamics
- Demand for power generation remains exceptionally strong, particularly from global data center customers, with order intake extending into the second half of 2028.
We continue to see robust order intake and engaged a multiyear strategic planning discussions with large data center customers.
- North America medium-duty truck demand was below expectations as regulatory uncertainty and the anticipated transition to EPA 2027 products delayed customer purchasing decisions.
Demand was below our expectations as regulatory uncertainty and the anticipated phased transition to EPA 27 products continued to delay some customer purchasing decisions.
- Pickup truck engine shipments declined 16% year-over-year due to elevated diesel prices and interest rates.
We shipped 34,000 engines for pickup trucks in the third quarter of 2026, down 16% from a year ago.
Competitive landscape
- Management noted that Cummins benefits from its global manufacturing footprint and in-house distribution system, giving customers confidence in support.
- The company continues to expand capacity and develop new products like the X15 engine to maintain its competitive position.
Together, these milestones demonstrate the progress we're making against our strategic priorities, strengthening our core business, expanding our capabilities and investing in technologies and capacity
Macroeconomic environment
- The net impact of tariffs was immaterial in the third quarter.
The net impact of tariffs, if we're still asking about that, was immaterial in the quarter.
- Elevated interest rates and diesel prices continue to pressure specific markets such as pickup trucks and mining equipment inventory levels.
Demand was weaker than anticipated amid elevated diesel prices and interest rates.
Growth opportunities and strategies
- The Power Systems business was selected to supply battery energy storage systems for a large U.S. data center project to help manage AI-driven power fluctuations.
In August, we announced that our Power Systems business was selected to supply battery energy storage systems for a large U.S. data center project.
- Cummins celebrated the opening of a 500,000 square foot manufacturing facility for IEA cooling systems in Somers, Wisconsin, investing approximately $100 million.
Recently, we celebrated the opening of a 500,000 square foot manufacturing facility for our IEA cooling systems business in Somers, Wisconsin.
Financial guidance and outlook
- Cummins updated its full year 2026 outlook to revenue growth of approximately 10% and an EBITDA margin of approximately 18.2%.
We have updated our full year 2026 outlook and now expect revenue growth of approximately 10% and an EBITDA margin of approximately 18.2%
- For the Engine segment, Cummins expects 2026 revenue growth of 8% to 11% and EBITDA margins of 12.25% to 12.75%.
- For Components, the company expects revenue growth of 8% to 11% and EBITDA margins of 13.25% to 13.75%.
- For Distribution, Cummins expects revenue growth of 10% to 13% and EBITDA margins of 13.6% to 14.1%.
- For Power Systems, the company expects revenue growth of 15% to 18% and EBITDA margins of 25.1% to 25.6%.
- For Accelera, the company expects revenues of $350 million to $400 million and a net EBITDA loss of $260 million to $290 million.
For 2026, we now expect accelerated revenues of $350 million to $400 million and net losses -- net EBITDA loss of $260 million to $290 million
Electrolyzer stop use recommendation
- During the third quarter, wholly-owned subsidiaries Hydrogenics and Hydrogenics Europe NV issued a stop use recommendation to customers of HyLYzer electrolyzer products.
During the third quarter, 2 wholly-owned subsidiaries, Hydrogenics and Hydrogenics Europe NV issued a stop use recommendation to customers of high laser electrolyzer products
- Hydrogenics has not initiated a recall campaign and continues to evaluate whether modifications are required, with potential financial impacts not yet reflected in guidance.
At this time, Hydrogenics has not initiated a recall campaign and continues to evaluate whether any modifications are required to return the electrolyzers to service.
Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Revenues | $9.4 billion | up 13% |
| EBITDA | $1.8 billion | record |
| EBITDA margin | 18.9% | up from 14.3% |
| Gross margin | 27.7% | record |
| Diluted earnings per share | $8.25 | up from $3.86 |
How management sounded
Balanced (+25 on our -100 to +100 scale). Management highlighted record quarterly profitability and strong power generation demand, although tempered by supply chain constraints and weaker pickup truck markets. Management sounded more upbeat than on 6% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- Final EPA 2027 rulings and non-conforming penalty (NCP) details.
- Execution of fourth quarter shipment recovery in Power Systems and distribution.
- Resolution of the stop use recommendation for high laser electrolyzer products.
Earlier calls
- Q2 2026 (Aug 4, 2026), tone Balanced: Cummins reported record second quarter sales of $9.5 billion and raised its full-year revenue growth outlook to 10% to 13%, driven by strong global demand for power generation and data center markets.
