Deere 2025 Q4 Earnings Mixed Earnings as Revenue Rises 11.7% and Net Income Falls 14.7%

Deere reported stronger-than-expected Q4 revenue, but its 2026 guidance fell short of estimates. The company’s net income and EPS declined year-over-year, driven by tariff impacts and margin pressures. Management acknowledged near-term challenges in North American agriculture while expressing optimism about long-term growth through innovation and market diversification.

Revenue

Deere’s total revenue surged to $12.39 billion in Q4 2025, driven by a 11.7% year-over-year increase. This growth was fueled by robust net sales of $10.58 billion, complemented by finance and interest income of $1.51 billion. Additional contributions from other income sources added $300 million, rounding out the company’s strong top-line performance.

Earnings/Net Income

Deere's EPS declined 13.8% to $3.94 in 2025 Q4 from $4.57 in 2024 Q4. Meanwhile, the company's net income fell to $1.06 billion in 2025 Q4, a 14.7% drop from $1.24 billion in 2024 Q4.

The decline in EPS and net income underscores ongoing challenges from tariff-related costs and margin compression in key agricultural segments.

Post-Earnings Price Action Review

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CEO Commentary

John May, Chairman, President & CEO, highlighted Deere’s resilience in 2025 despite market challenges, noting $5 billion in net income and 12.6% equipment operating margins, including 1.5 points from tariffs. He emphasized structural performance improvements since launching Smart Industrial in 2020, outperforming prior cycle troughs. May underscored progress in technology, including JD Link Boost, Precision Essentials, and autonomy solutions, positioning Deere to unlock customer value. He acknowledged near-term challenges in North American large ag but expressed optimism about long-term growth through innovation, diversified markets, and inventory management. Leadership tone was cautiously optimistic, stressing preparedness for market inflection while advancing tech-driven value creation.

Guidance

Deere guided fiscal 2026 net income to $4–4.75 billion, EPS of $16 midpoint (reflecting sub-draft PPA conditions), and equipment operating cash flow of $4–5 billion. Tariff expenses are projected at $1.2 billion pretax, with effective tax rates of 25–27% due to geographic mix. Production & Precision Ag sales expected down 5–10%, while Small Ag & Turf and Construction & Forestry sales up ~10%. North American large ag production will start lean but remain flexible. Cash returns to shareholders, including buybacks, expected to resume in 2026.

Additional News

Recent developments include Deere’s acquisition of Sentera to enhance its precision agriculture offerings and its upcoming Investor Day on December 8, 2025, where long-term strategic initiatives will be detailed. The company also announced plans to resume share repurchases in 2026, signaling confidence in its financial flexibility and commitment to shareholder returns. Other notable moves include the integration of Sentera’s drone-based imagery into Deere’s Operations Center™, aiming to boost data-driven farming solutions. These steps align with Deere’s broader strategy to transition toward technology-led revenue streams amid cyclical industry challenges.

Price Action

The stock price of Deere has edged down 1.52% during the latest trading day, has edged down 1.03% during the most recent full trading week, and has edged down 1.72% month-to-date.