Manitowoc's Q3 2025: Contradictions Emerge on Tariff Impact, Pricing Strategy, Market Conditions, and Mitigation Strategies

Date of Call: None provided

Financials Results

• Revenue: $553M, up 5% YOY
• Gross Margin: Non-new machine sales generate roughly 35% gross margin; company-level gross margin not provided
• Operating Margin: Adjusted EBITDA margin 6%, up 120 bps YOY; adjusted EBITDA $34M, up 30% YOY

Guidance:

• Expect ~60% of backlog ($667M) to ship by year-end.
• Inventory expected to decrease substantially as build plans right-size; net working capital to only modestly decrease.
• Full-year results expected to come in at the low end of adjusted EBITDA guidance.
• Estimate 2025 gross tariff costs of ~$44M, expect to mitigate 80%-90%.
• Need approximately $100M of free cash flow to hit the low end of guidance.

Business Commentary:

* Revenue and Earnings Growth:
- Manitowoc Company reported adjusted EBITDA of $34 million in Q3 2025, up 30% year-over-year.
- The growth was driven by strong non-new machine sales, particularly in the tower crane business, despite tariff headwinds.

• European Market Recovery:
• The company's European tower crane business showed improvement with a 34% increase in new machine orders compared to last year.

• The recovery was attributed to positive signs in Germany and France, such as housing permits and infrastructure investments.

• Crane Plus 50 Strategy and Non-New Machine Sales:

• Non-new machine sales reached $667 million on a trailing 12-month basis, up 8% year-over-year.

• The growth was due to the successful implementation of the Crane Plus 50 strategy, which focuses on higher-margin, more consistent revenue streams.

• Backlog and Order Growth:

• Manitowoc ended the quarter with a backlog of $667 million, with approximately 60% expected to ship by the end of the year.
• The increase in backlog was largely due to higher orders, particularly in the Americas and European tower crane businesses.

Sentiment Analysis:

Overall Tone: Neutral

• Management called the quarter 'pleased' with recovery and highlighted $553M revenue and $34M adjusted EBITDA (up 30% YOY) and margin expansion, but repeatedly noted tariff headwinds, working-capital drag and that full-year results are likely at the low end of EBITDA guidance.

Q&A:

• Question from Tyler Russell (Barclays): You mentioned positive mix and margins were up; what were the drivers of the margin improvement? Was the revenue increase mainly driven by tower cranes (up 34%) or other factors?
  Response: Margin improvement was driven primarily by growth in higher‑margin non-new machine sales and improved performance in the tower crane business—mix shifted toward these stronger-margin businesses.