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- **Hybrid Power Collaboration**: Komatsu partnership to develop low-carbon solutions for mining.
- **Engine Efficiency**: X15N natural gas engine outperformed in fuel economy, driving 10% EBITDA margin.
- **Tariff Mitigation**: 80% of tariff costs recovered, with Q4 nearing price/cost neutrality.
- **China Growth**: 35% truck sales increase, driven by NS4 incentives and rural infrastructure.
- **Power Systems Strength**: 22.9% margin in Power Systems, supported by data center demand.
- **Electrolyzer Review**: Strategic assessment due to reduced U.S. incentives and slower international adoption.

**【CEO Summary Section】**
- Announced collaboration with Komatsu to develop hybrid powertrains for mining equipment, aiming to reduce operational costs and emissions.
- X15N natural gas engine showcased superior fuel efficiency during the Run on Less event, highlighting customer value.
- Global power generation demand drove 27% revenue growth in North America and 26% in China, supported by data center expansion.
- North America truck demand declined 40%, offset by 44% growth in light-duty truck engines for Ram pickups.
- China truck sales increased 35% due to NS4 scrapping incentives and rural infrastructure projects.
- Tariffs negatively impacted profitability, but 80% of costs were recovered through pricing.

**【CFO Financial Commentary】**
- Q3 EBITDA was $1.4 billion (17.2% of sales), excluding $240M noncash charges, driven by Power Systems and Distribution growth.
- Engine segment EBITDA margin improved to 10%, despite 38% decline in North America truck volumes.
- Power Systems segment EBITDA reached $457M (22.9% margin), supported by data center demand.
- Distribution segment set records with 15.5% margin, up from 12.5% YoY.
- Operating cash flow was $1.3B, up 108% YoY, reflecting cost containment and tariff recovery.

**【Q&A Highlights】**
- Engine margins expected to stabilize at 10% in Q4, with 15% sequential decline in on-highway shipments.
- Power Systems to invest in natural gas engines for prime power applications, targeting data center growth.
- Tariffs remain headwind, but 80% of costs recovered through pricing.
- China e-mobility sales grew, while electrolyzer business faces strategic review due to weak demand.
- 2027 EPA rule uncertainty delays product launches, but 2026 R&D spend expected to flatten post-regulatory clarity.


Cummins Inc. (CMI) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

CMI

CMI fundamentals

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