Deere 2025 Q4 Earnings Revenue Grows 11.7% but Net Income Falls 14.7%

Deere reported Q4 2025 earnings with strong revenue growth but declining profitability. The company exceeded revenue estimates while EPS and net income fell year-over-year, and 2026 guidance fell below analyst expectations, reflecting ongoing margin pressures from tariffs and agricultural sector challenges.

Deere (DE) reported fiscal 2025 Q4 earnings on Nov 26, 2025, with total revenue rising 11.7% to $12.09 billion, outpacing 2024’s $10.83 billion. The performance was driven by robust demand and pricing power across its core operations.

Revenue

Net sales formed the backbone of the revenue increase, contributing $10.58 billion, while finance and interest income added $1.51 billion. Other income, including non-core activities, accounted for $300 million, bringing the total to $12.39 billion. The growth reflected higher shipments and strategic price adjustments, particularly in its Production & Precision Agriculture segment, which saw a 10% year-over-year increase to $4.74 billion.

Earnings/Net Income

Despite revenue gains, Deere’s earnings contracted. EPS declined 13.8% to $3.94, and net income fell 14.7% to $1.06 billion, weighed down by elevated costs linked to tariffs and margin compression in its large ag segment. The performance underscores the challenges of balancing top-line growth with bottom-line sustainability in a volatile market.

Post-Earnings Price Action Review

The strategy of buying DE when revenues beat and holding for 30 days resulted in a 61.63% return, significantly underperforming the benchmark return of 83.07%. While the approach avoided significant losses with a 0.00% maximum drawdown, its Sharpe ratio of 0.47 and volatility of 21.64% highlighted its suboptimal risk-adjusted returns.

CEO Commentary

CEO John May emphasized Deere’s resilience amid market headwinds, citing $5 billion in net income for 2025 and progress in technology-driven solutions like JDLink Boost. He highlighted inventory management and supply chain improvements as key to navigating cyclical downturns, expressing optimism about 2026’s potential for recovery.

Guidance

Deere guided to 2026 net income of $4–4.75 billion, below analyst estimates of $5.33 billion, and expects a 15–20% decline in U.S. and Canadian large ag sales. Operating margins for core segments are projected to range between 8–14%, reflecting ongoing cost controls and tariff impacts.

Additional News

Deere’s acquisition of Sentera, a remote imagery solutions provider, underscores its push into precision agriculture. The company also announced plans to host an Investor Day on Dec 8, 2025, to detail long-term technological initiatives. Meanwhile, its guidance for 2026 highlights a strategic pivot toward lower-margin markets in Small Agriculture & Turf and Construction & Forestry to offset declines in core ag segments.

Deere’s Q4 results highlight a delicate balance between revenue growth and margin pressures. While the company’s focus on technology and operational efficiency positions it for long-term resilience, near-term challenges from tariffs and agricultural sector downturns remain critical risks. Investors are advised to monitor its inventory management strategies and the pace of recovery in North American ag markets.