AGCO Corporation

07/30/2026 | Press release | Distributed by Public on 07/30/2026 09:37

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Our operations are subject to the cyclical and seasonal nature of the agricultural industry. Sales of our equipment are affected by, among other things, changes in farm income, farm land values and debt levels, financing costs, acreage planted, crop yields, weather conditions, the demand for agricultural commodities, commodity and protein prices, agricultural product demand and general economic conditions and government policies, tariffs and subsidies. We sell our equipment, precision agriculture technology and replacement parts to our independent dealers, distributors and other customers. A large majority of our sales are to independent dealers and distributors that sell our products to end users. To the extent practicable, we attempt to sell products to our dealers and distributors on a level basis throughout the year to reduce the effect of seasonal demands on our manufacturing operations and to minimize our investment in inventories. However, retail sales by dealers to farmers are highly seasonal and are a function of the timing of the planting and harvesting seasons. In certain markets, particularly in North America, there is often a time lag, which varies based on the timing and level of retail demand, between our sale of the equipment to the dealer and the dealer's sale to a retail customer.
In 2025, the U.S. government implemented a series of tariffs on goods imported into the United States from various countries, and in many cases these measures resulted in reciprocal tariffs and other actions on goods exported from the United States. These tariffs and related actions are complex, continuously evolving and remain highly volatile as trade negotiations and legal challenges proceed. In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act ("IEEPA"), which the U.S. government had relied on to impose certain tariffs, does not authorize the administration to impose such tariffs. Following that decision, on March 4, 2026, the U.S. Court of International Trade ("CIT") ordered U.S. Customs and Border Protection ("CBP") to process refunds of tariffs imposed under IEEPA, and on March 27, 2026, the CIT issued an amended order expanding the scope of entries subject to reliquidation. On April 20, 2026, the Consolidated Administration and Processing of Entries system opened for the first phase of refund filings. We have submitted certain refund claims under this initial phase; however, these claims remain subject to CBP review, and we cannot predict the timing, amount or ultimate collectability of any refunds to which we may be entitled. The IEEPA tariffs refund process remains subject to CBP review, and the administration has appealed the CIT's refund order to the U.S. Court of Appeals for the Federal Circuit, contesting both the scope of the refund obligation and the reliquidation of finally liquidated entries for importers who have not filed individual lawsuits. It remains uncertain when, or to what extent, such refunds will ultimately be collected. Following the U.S. Supreme Court's ruling, the administration has also imposed tariffs under alternative statutory authorities, the validity of which is also subject to legal challenge. As a result, the timing and extent of any refunds, the structure and scope of any new tariffs and the overall tariff framework remain uncertain and could create significant risks for our business. Depending on the countries affected, increases in tariffs have raised, and may continue to raise, the costs of inputs used in manufacturing our products, which in turn has impacted, and may further impact, our cost of goods sold. In addition, higher tariffs may lead to increased after-tariff sales prices for the products we sell. Additionally, the economic uncertainty caused by the tariffs may result in customers delaying planned purchases of products and services. While impacts of the tariffs may be partially mitigated by the fact that a majority of our sales and manufacturing takes place outside the United States, there can be no guarantee that we will be able to fully offset the impact of existing or future tariffs through pricing, sourcing changes or other measures. Furthermore, retaliatory tariffs imposed by other countries on our exported products could negatively affect our sales and marketplace access in those countries. The economic uncertainty caused by these tariffs and related trade policy developments, together with uncertainty regarding their enforceability, continuation or modification, has adversely impacted, and is expected to continue to adversely impact, our sales.
We depend on suppliers for components, parts and raw materials for our products, and any failure by our suppliers to provide products as needed, or by us to promptly address supplier issues, will adversely impact our ability to timely and efficiently manufacture and sell products. We cannot predict or control the impact of the conflicts in Ukraine or the Middle East on our business. These conflicts have already driven increased volatility across global energy, logistics and input markets, leading to higher fuel, fertilizer, transportation and input costs, as well as general uncertainty for farmers. In addition, the potential of future natural gas shortages in Europe, as well as predicted overall shortages in other energy sources, could also negatively impact our production and that of our supply chain in the future. There can be no assurance that there will not be future disruptions.
Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)
RESULTS OF OPERATIONS
Financial Highlights
The following tables set forth the percentage relationship to net sales of certain items included in our Condensed Consolidated Statements of Operations (in millions, except percentages):
Three Months Ended June 30,
2026 2025
$
% of Net Sales(1)
$
% of Net Sales(1)
Net sales $ 2,609.7 100.0 % $ 2,635.0 100.0 %
Cost of goods sold 1,963.8 75.3 1,976.4 75.0
Gross profit 645.9 24.7 658.6 25.0
Selling, general and administrative expenses 335.7 12.9 326.4 12.4
Engineering expenses 141.2 5.4 117.8 4.5
Amortization of intangibles 17.1 0.7 15.7 0.6
Impairment charges - - 6.8 0.3
Restructuring and business optimization expenses
11.2 0.4 15.6 0.6
Loss on sale of business
- - 12.3 0.5
Income from operations
140.7 5.4 164.0 6.2
Interest expense, net 17.0 0.7 17.8 0.7
Other expense, net 15.5 0.6 48.9 1.9
Income before income taxes and equity in net earnings of affiliates
108.2 4.1 97.3 3.7
Income tax provision (benefit) 40.4 1.5 (205.5) (7.8)
Income before equity in net earnings of affiliates
67.8 2.6 302.8 11.5
Equity in net earnings of affiliates 7.0 0.3 11.6 0.4
Net income
74.8 2.9 314.4 11.9
Net loss attributable to noncontrolling interests
2.4 0.1 0.4 -
Net income attributable to AGCO Corporation
$ 77.2 3.0 % $ 314.8 11.9 %
______________________________
(1) Rounding may impact summation of amounts.
Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)
Six Months Ended June 30,
2026 2025
$
% of Net Sales(1)
$
% of Net Sales(1)
Net sales $ 4,952.6 100.0 % $ 4,685.5 100.0 %
Cost of goods sold 3,725.3 75.2 3,506.3 74.8
Gross profit 1,227.3 24.8 1,179.2 25.2
Selling, general and administrative expenses 674.8 13.6 652.2 13.9
Engineering expenses 273.8 5.5 233.8 5.0
Amortization of intangibles 34.0 0.7 31.0 0.7
Impairment charges 2.1 - 7.9 0.2
Restructuring and business optimization expenses 21.2 0.4 28.6 0.6
Loss on sale of business
- - 12.3 0.3
Income from operations 221.4 4.5 213.4 4.6
Interest expense, net 32.2 0.7 36.3 0.8
Other expense, net
42.0 0.8 81.2 1.7
Income before income taxes and equity in net earnings of affiliates 147.2 3.0 95.9 2.0
Income tax provision (benefit) 45.0 0.9 (203.5) (4.3)
Income before equity in net earnings of affiliates 102.2 2.1 299.4 6.4
Equity in net earnings of affiliates 25.0 0.5 23.7 0.5
Net income
127.2 2.6 323.1 6.9
Net loss attributable to noncontrolling interests 5.0 0.1 2.2 -
Net income attributable to AGCO Corporation
$ 132.2 2.7 % $ 325.3 6.9 %
___________________________________
(1) Rounding may impact summation of amounts.
Net income attributable to AGCO Corporation for the three months ended June 30, 2026, was $77.2 million, or $1.08 per diluted share, compared to $314.8 million, or $4.22 per diluted share, for the three months ended June 30, 2025. Net income attributable to AGCO Corporation for the six months ended June 30, 2026, was $132.2 million, or $1.84 per diluted share, compared to $325.3 million, or $4.36 per diluted share, for the six months ended June 30, 2025.
Net sales during the three months ended June 30, 2026 were approximately $2,609.7 million, or 1.0% lower than the three months ended June 30, 2025, primarily due to lower sales volumes in the Europe/Middle East, Latin America and Asia/Pacific/Africa regions, most significantly in tractors and implements, partially offset by higher sales volumes in the North America region, most significantly in high-horsepower tractors and hay tools, and favorable currency translation. Income from operations was $140.7 million for the three months ended June 30, 2026 compared to $164.0 million in the three months ended June 30, 2025. The decrease in income from operations during 2026 was primarily the result of lower sales and production volumes, higher tariff-related costs, selling, general and administrative expenses ("SG&A expenses") and engineering expenses, partially offset by the benefit of certain IEEPA tariff refunds recognized during the period.
Net sales during the six months ended June 30, 2026 were approximately $4,952.6 million, or 5.7% higher than the six months ended June 30, 2025, primarily due to higher sales volumes in the North America, Europe/Middle East and Asia/Pacific/Africa regions, most significantly in high-horsepower tractors, and favorable currency translation, partially offset by lower sales volumes in Latin America, most significantly in tractors, implements and combines. Income from operations was $221.4 million for the six months ended June 30, 2026 compared to $213.4 million in the six months ended June 30, 2025. The increase in income from operations during 2026 was primarily the result of higher sales and production volumes, partially offset by higher tariff-related costs, SG&A expenses and engineering expenses.
Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)
We estimate that worldwide average price increases were approximately 2.2% and 0.1% for the three months ended June 30, 2026 and 2025, respectively, and 1.9% and 0.0% for the six months ended June 30, 2026 and 2025, respectively. Consolidated net sales of tractors and combines, which comprised approximately 67.7% and 67.4% of our net sales for the three and six months ended June 30, 2026, respectively, increased (decreased) approximately (1.5)% and 7.7% compared to the same periods in 2025.
Overall, global production hours increased (decreased) approximately (1.0)% and 6.2% during the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, reflecting our response to end market demand.
Results of Operations
Gross profit as a percentage of net sales decreased during the three months ended June 30, 2026 compared to the same period in 2025, primarily due to lower production volumes. Gross profit as a percentage of net sales decreased during the six months ended June 30, 2026 compared to the same period in 2025, primarily due to higher manufacturing costs, including increased tariff-related costs.
SG&A expenses, as a percentage of net sales, were higher during the three months ended June 30, 2026 compared to the same period in 2025 as net sales decreased at a faster rate than SG&A expenses. SG&A expenses, as a percentage of net sales, were lower during the six months ended June 30, 2026 compared to the same period in 2025 as net sales increased at a faster rate than SG&A expenses. The absolute level of SG&A expenses increased during the three and six months ended June 30, 2026 primarily due to foreign currency translation. We recorded $17.1 million and $27.4 million of stock compensation expense within SG&A expenses during the three and six months ended June 30, 2026, respectively, compared to $10.3 million and $17.4 million during the same periods in 2025.
Engineering expenses, as a percentage of net sales, were higher during the three and six months ended June 30, 2026 compared to the same periods in 2025 as net sales fluctuated at a slower rate than engineering expenses. The absolute value of engineering expenses increased during the three and six months ended June 30, 2026 driven by an increase in product innovation and other technology investments.
No impairment charges were recorded during the three months ended June 30, 2026, and impairment charges of $2.1 million were recorded during the six months ended June 30, 2026, compared to $6.8 million and $7.9 million recorded during the three and six months ended June 30, 2025, respectively, related to the impairment of certain other assets.
We recorded restructuring and business optimization expenses of $11.2 million and $21.2 million during the three and six months ended June 30, 2026, respectively, compared to $15.6 million and $28.6 million during the same periods in 2025. The Company announced a restructuring program (the "Program") in response to increased weakening demand in the agriculture industry in 2024. The Company incurred a substantial portion of the charges by the end of fiscal year 2025. The restructuring expenses recorded during the three and six months ended June 30, 2026 and 2025 primarily related to severance, business optimization and other related costs associated with the Company's Program. Refer to Note 8 of our Condensed Consolidated Financial Statements for further information.
We recorded a loss on sale of business of $12.3 million during the three and six months ended June 30, 2025 related to the finalization of the preliminary working capital and other adjustments related to the sale of the majority of the Company's Grain & Protein business.
Interest expense, net was $17.0 million and $32.2 million for the three and six months ended June 30, 2026, respectively, compared to $17.8 million and $36.3 million for the comparable periods in 2025, resulting primarily from a decrease in interest expense related to lower borrowings on the Company's Credit Facility. Refer to "Liquidity and Capital Resources" for further information on our available funding.
Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)
Other expense, net was $15.5 million and $42.0 million for the three and six months ended June 30, 2026, respectively, compared to $48.9 million and $81.2 million for the comparable periods in 2025. The decrease was primarily driven by a decrease in foreign currency exchange losses which were approximately $6.8 million and $12.0 million for the three and six months ended June 30, 2026, compared to $28.6 million and $42.2 million for the comparable periods in 2025. On April 30, 2026, the Company executed an Interests Purchase Agreement and Share Purchase Agreement (collectively the "Agreements") with wholly owned subsidiaries of Rabobank to sell its 49% equity interests in the joint ventures in the U.S. and Canada, AGCO Finance LLC and AGCO Finance Canada, Ltd. (collectively the "North America AGCO Finance joint ventures"), respectively, for aggregate consideration of approximately $188.4 million. In connection with the Agreements, the Company entered into Financing Framework Agreements with wholly owned subsidiaries of Rabobank, which establish the commercial terms governing the future provision of financing solutions to dealers and farmers for those markets. Approximately $20.0 million of the total consideration, representing the estimated future net earnings associated with the run-off of the North America AGCO Finance portfolios existing as of the transaction date, was recognized in "Other expense, net" during the three and six months ended June 30, 2026. Losses on sales of receivables, primarily related to our accounts receivable sales agreements with our finance joint ventures in North America, Europe and Brazil and included in "Other expense, net," were approximately $21.1 million and $39.7 million, for the three and six months ended June 30, 2026, compared to $19.8 million and $38.7 million for the comparable periods in 2025.
We recorded an income tax provision (benefit) of $40.4 million and $45.0 million for the three and six months ended June 30, 2026, respectively, compared to $(205.5) million and $(203.5) million for the three and six months ended June 30, 2025. Our effective tax rate varies from period to period due to the mix of taxable income and losses in the various tax jurisdictions in which we operate. During the three and six months ended June 30, 2025, the Company's income tax provision included a net tax benefit of $255.2 million related to a legal entity reorganization.
Equity in net earnings of affiliates, which is primarily comprised of income from our AGCO Finance joint ventures, was $7.0 million and $25.0 million for the three and six months ended June 30, 2026, respectively, compared to $11.6 million and $23.7 million for the three and six months ended June 30, 2025.
The Company recorded a net loss attributable to noncontrolling interests of $2.4 million and $5.0 million during the three and six months ended June 30, 2026, respectively, compared to $0.4 million and $2.2 million recorded during the three and six months ended June 30, 2025. The net loss primarily relates to the noncontrolling interests of the PTx Trimble joint venture held by Trimble, which owns a 15% interest in the joint venture.
Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)
Results of Operations - Segment Information
The Company has four operating segments which are also its reportable segments which consist of the Europe/Middle East ("EME"), North America, Latin America ("LATAM") and Asia/Pacific/Africa ("APA") regions. Effective January 1, 2026, the Company realigned its organizational structure to support its Farmer-First transformation initiatives in North America. As a result, the Company's Mexico operations were transferred from the North America segment to the South America segment, which was renamed Latin America. Segment information for all prior periods presented has been retrospectively adjusted to reflect this change. The Company's reportable segments are geography based and distribute a full range of agricultural machinery and precision agriculture technology. The Company evaluates segment performance primarily based on income from operations. Sales for each segment are based on the location of the third-party customer. The Company's selling, general and administrative expenses and engineering expenses are charged to each segment based on the region and division where the expenses are incurred. As a result, the components of income (loss) from operations for one segment may not be comparable to another segment.
EME
Three Months Ended
June 30, 2026 		Change Six Months Ended
June 30, 2026 		Change
2026 2025 $ 2026 2025 $
Net sales $ 1,732.4 $ 1,774.9 $ (42.5) $ 3,333.2 $ 3,105.4 $ 227.8
Income from operations 260.2 261.3 (1.1) 519.2 415.7 103.5
Net sales in EME decreased in the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to sales volume decreases, most significantly in high-horsepower and mid-range tractors, partially offset by favorable foreign currency translation. Income from operations for the three months ended June 30, 2026 was approximately flat compared to the three months ended June 30, 2025, despite lower sales.
Net sales in EME increased in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to sales volume increases, most significantly in high-horsepower tractors, and favorable foreign currency translation. Income from operations increased $103.5 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 as a result of higher sales and production volumes and favorable product mix.
North America
Three Months Ended
June 30, 2026 		Change Six Months Ended
June 30, 2026 		Change
2026 2025 $ 2026 2025 $
Net sales $ 471.5 $ 393.9 $ 77.6 $ 877.9 $ 763.4 $ 114.5
Loss from operations (24.5) (25.2) 0.7 (75.5) (49.4) (26.1)
Net sales in North America increased in the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to sales volume increases, most significantly in high-horsepower tractors and hay tools. Loss from operations for the three months ended June 30, 2026 was approximately flat compared to the three months ended June 30, 2025, primarily due to higher tariff-related costs, partially offset by the benefit of certain IEEPA tariff refunds recognized during the period.
Net sales in North America increased in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to sales volume increases, most significantly in high-horsepower tractors and hay tools. Loss from operations increased $26.1 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to higher tariff-related costs partially offset by higher sales and production volumes.
Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)
LATAM
Three Months Ended
June 30, 2026 		Change Six Months Ended
June 30, 2026 		Change
2026 2025 $ 2026 2025 $
Net sales $ 271.3 $ 330.4 $ (59.1) $ 483.0 $ 586.4 $ (103.4)
Income (loss) from operations (21.8) 26.9 (48.7) (62.7) 33.4 (96.1)
Net sales decreased in LATAM in the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to sales volume declines, most significantly in tractors, implements and combines, partially offset by favorable foreign currency translation. Income from operations decreased $48.7 million in the three months ended June 30, 2026 compared to the three months ended June 30, 2025, as a result of lower sales and production volumes and higher engineering expenses.
Net sales decreased in LATAM in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to sales volume declines, most significantly in tractors, implements and combines, and negative pricing impacts, partially offset by favorable foreign currency translation. Income from operations decreased $96.1 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, as a result of lower sales and production volumes, higher engineering expenses and negative pricing impacts.
APA
Three Months Ended
June 30, 2026 		Change Six Months Ended
June 30, 2026 		Change
2026 2025 $ 2026 2025 $
Net sales $ 134.5 $ 135.8 $ (1.3) $ 258.5 $ 230.3 $ 28.2
Income from operations 10.3 9.4 0.9 14.3 6.7 7.6
Net sales decreased in APA in the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to sales volume decreases, most significantly in high-horsepower and mid-range tractors, partially offset by favorable foreign currency translation. Despite lower sales, income from operations for the three months ended June 30, 2026 was approximately flat compared to the three months ended June 30, 2025.
Net sales increased in APA in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to sales volume increases, most significantly in high-horsepower tractors, combines and sprayers, and favorable foreign currency translation. Income from operations increased $7.6 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to higher sales and production volumes.
Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)
LIQUIDITY AND CAPITAL RESOURCES
Our financing requirements generally are subject to variations due to seasonal changes in inventory and receivable levels. Internally generated funds are supplemented when necessary from external sources, primarily our credit facilities and accounts receivable sales agreement facilities. Additional information regarding our indebtedness is contained in Note 7 to the Condensed Consolidated Financial Statements. We believe that the borrowings and facilities listed below, together with available cash and internally generated funds, and assuming customary renewals and replacements, will be sufficient to support our working capital, capital expenditures and debt service requirements for the foreseeable future (in millions):
June 30, 2026(1)
Credit facility, expires 2027 $ 290.0
5.450% Senior notes due 2027
400.0
5.800% Senior notes due 2034
700.0
0.800% Senior notes due 2028
683.9
EIB Senior term loan due 2029 285.0
EIB Senior term loan due 2030 193.8
Senior term loans due between 2026 and 2028
95.2
____________________________________
(1) The amounts above are gross of debt issuance costs of an aggregate amount of approximately $8.4 million.
The Company has a credit facility providing for a $1.25 billion multi-currency unsecured revolving credit facility ("Credit Facility") that matures on December 19, 2027. As of June 30, 2026, the Company had $290.0 million in outstanding borrowings under the revolving credit facility and had the ability to borrow $960.0 million.
In addition, the Company has an uncommitted revolving credit facility that allows the Company to borrow up to €200.0 million (or approximately $228.0 million as of June 30, 2026). The credit facility expires on December 31, 2026. As of June 30, 2026, the Company had no outstanding borrowings under the revolving credit facility.
AGCO Finance joint ventures offer both retail financing and wholesale financing to our dealers in the U.S., Canada, Europe, Brazil, Argentina, and Australia. The equity joint ventures are structured with AGCO holding a 49% ownership interest, with the remaining interest owned by a wholly owned subsidiary of Rabobank. The Company continually evaluates opportunities to optimize regulatory capital efficiency and capital deployment, while strengthening its strategic partnership with Rabobank and its commitment to providing competitive financing solutions to farmers and dealers.
To better align with evolving market dynamics and increasing regulatory and compliance requirements, on April 30, 2026, the Company executed an Interests Purchase Agreement and Share Purchase Agreement (collectively the "Agreements") with wholly owned subsidiaries of Rabobank to sell its 49% equity interests in the joint ventures in the U.S. and Canada, AGCO Finance LLC and AGCO Finance Canada, Ltd. (collectively the "North America AGCO Finance joint ventures"), respectively, for aggregate consideration of approximately $188.4 million. The consideration consisted of (i) approximately $168.4 million, representing the carrying value of the Company's equity interests in the North America AGCO Finance joint ventures, previously included in "Investments in affiliates" on the Company's Condensed Consolidated Balance Sheets, and (ii) approximately $20.0 million, representing the estimated future net earnings associated with the run-off of the North America AGCO Finance portfolios existing as of the transaction date, which was recognized in "Other expense, net" within the Company's Condensed Consolidated Statements of Operations during the three and six months ended June 30, 2026. The proceeds were used as a source of funding for the Company's most recent share repurchase program executed in the second quarter of 2026. In connection with the Agreements, the Company entered into Financing Framework Agreements with wholly owned subsidiaries of Rabobank, which establish the commercial terms governing the future provision of financing solutions to dealers and farmers for those markets. The Company will continue to evaluate similar agreements in respect of other joint ventures with wholly owned subsidiaries of Rabobank in the future. This structural evolution strengthens the Company's Farmer-First strategy, ensures continued access to competitive financing offerings, and allows AGCO and Rabobank and its subsidiaries to more effectively address increasing regulatory and compliance requirements.
The Company had redeemable noncontrolling interests of $292.4 million as of June 30, 2026 resulting from the PTx Trimble joint venture transaction, which may require the use of cash in certain instances, beginning in 2027.
Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)
The Company is in compliance with the financial covenants contained in these facilities and expects to continue to maintain such compliance. Should we ever encounter difficulties, our historical relationship with our lenders has been strong, and we anticipate their continued long-term support of our business.
Our debt to capitalization ratio, which is total indebtedness divided by the sum of total indebtedness, excluding short-term borrowings due within one year, and stockholders' equity, was 39.3% and 35.8% at June 30, 2026 and December 31, 2025, respectively.
Supplemental Guarantor Financial Information
On March 21, 2024, the Company issued (i) $400.0 million aggregate principal amount of 5.450% Senior Notes due 2027 (the "2027 Notes") and (ii) $700.0 million aggregate principal amount of 5.800% Senior Notes due 2034 (the "2034 Notes", and together with the 2027 Notes, the "Notes"). The 2027 Notes and the 2034 Notes are unsecured and unsubordinated indebtedness of the Company and are guaranteed on a senior unsecured basis, jointly and severally, by AGCO International Holdings B.V., AGCO International GmbH and Massey Ferguson Corp., direct and indirect subsidiaries of the Company (collectively, the "Guarantors").
The following tables present summarized financial information of AGCO Corporation, as the issuer of the 2027 Notes and the 2034 Notes, and the Guarantors on a combined basis after elimination of intercompany transactions and balances within the Guarantors and equity in the earnings from and investments in any non-guarantor subsidiary. As used herein, "obligor group" means AGCO Corporation, as the issuer of the debt securities, and the Guarantors on a combined basis. The summarized financial information is provided in accordance with the reporting requirements of Rule 13-01 under SEC Regulation S-X for the obligor group and is not intended to present the financial position or results of operations of the obligor group in accordance with generally accepted accounting principles as such principles are in effect in the United States.
Balance Sheet Information
(in millions) As of June 30, 2026 As of December 31, 2025
Current assets(a)
$ 4,871.6 $ 4,771.1
Noncurrent assets(b)
1,610.3 1,575.9
Current liabilities(c)
4,467.1 4,155.6
Noncurrent liabilities(d)
4,341.4 4,192.5
____________________________________
(a) Includes amounts due from non-guarantor subsidiaries of $2,776.9 million and $2,628.9 million as of June 30, 2026 and December 31, 2025, respectively.
(b) Includes amounts due from non-guarantor subsidiaries of $280.3 million and $108.2 million as of June 30, 2026 and December 31, 2025, respectively.
(c) Includes amounts due to non-guarantor subsidiaries of $2,445.5 million and $2,557.6 million as of June 30, 2026 and December 31, 2025, respectively.
(d) Includes amounts due to non-guarantor subsidiaries of $1,861.1 million and $1,556.0 million as of June 30, 2026 and December 31, 2025, respectively.
Statement of Operations Information
(in millions) Six Months Ended June 30, 2026
Revenues(a)
$ 3,837.5
Income from operations 285.2
Net loss (20.6)
Net loss attributable to obligor group (20.6)
____________________________________
(a) Includes intercompany revenues generated from non-guarantor subsidiaries of $2,627.3 million.
The following tables present summarized financial information of AGCO International GmbH, after elimination of intercompany transactions and balances within the Guarantors and equity in the earnings from and investments in any non-guarantor subsidiary.
Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)
Balance Sheet Information
(in millions) As of June 30, 2026 As of December 31, 2025
Current assets(a)
$ 3,765.9 $ 3,661.3
Noncurrent assets(b)
541.5 371.8
Current liabilities(c)
3,234.5 3,281.7
Noncurrent liabilities(d)
1,923.3 1,619.0
____________________________________
(a) Includes amounts due from non-guarantor subsidiaries of $2,420.3 million and $2,329.1 million as of June 30, 2026 and December 31, 2025, respectively.
(b) Includes amounts due from non-guarantor subsidiaries of $274.7 million and $102.6 million as of June 30, 2026 and December 31, 2025, respectively.
(c) Includes amounts due to non-guarantor subsidiaries of $2,306.1 million and $2,368.1 million as of June 30, 2026 and December 31, 2025, respectively.
(d) Includes amounts due to non-guarantor subsidiaries of $1,861.1 million and $1,556.0 million as of June 30, 2026 and December 31, 2025, respectively.
Statement of Operations Information
(in millions) Six Months Ended June 30, 2026
Revenues(a)
$ 3,108.7
Income from operations 447.3
Net income 147.7
Net income attributable to obligor group 147.7
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(a) Includes intercompany revenues generated from non-guarantor subsidiaries of $2,458.1 million.
Our accounts receivable sales agreements in North America, Europe and Brazil permit the sale, on an ongoing basis, of a majority of our receivables to our U.S., Canadian, European and Brazilian finance joint ventures. The sales of all receivables are without recourse to us. We do not service the receivables after the sales occur, and we do not maintain any direct retained interest in the receivables. These agreements are accounted for as off-balance sheet transactions. The cash received from receivables sold under these accounts receivable sales agreements that remain outstanding as of June 30, 2026 and December 31, 2025 was approximately $1.8 billion and $2.1 billion, respectively.
In addition, we sell certain trade receivables under factoring arrangements to other financial institutions around the world. The cash received from trade receivables sold under factoring arrangements that remain outstanding as of June 30, 2026 and December 31, 2025 was approximately $257.2 million and $270.5 million, respectively.
In order to efficiently manage our liquidity, we generally pay vendors in accordance with negotiated terms. To enable vendors to obtain payment in advance of our payment due dates to them, we have established programs in certain markets with financial institutions under which the vendors have the option to be paid by the financial institutions earlier than the payment due dates. Should we not be able to negotiate extended payment terms with our vendors, or should financial institutions no longer be willing to participate in early payment programs with us, we would expect to have sufficient liquidity to timely pay our vendors without any material impact on us or our financial position. As of June 30, 2026 and December 31, 2025, the amount outstanding that remains unpaid to the banks or other intermediaries associated with these programs totaled $41.8 million and $31.7 million, respectively. Refer to Note 6 of our Condensed Consolidated Financial Statements for further discussion.
Cash Flows
Cash flows used in operating activities were approximately $245.0 million for the first six months of 2026 compared to cash flows provided by operating activities of approximately $153.5 million for the same period in 2025. Cash used in operating activities during the six months ended June 30, 2026 was driven by changes in working capital.
Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)
Our working capital requirements are seasonal, with investments in working capital typically building in the first half of the year and then reducing in the second half of the year. We had approximately $1,296.5 million in working capital at June 30, 2026 as compared to $1,467.0 million at December 31, 2025. Inventories as of June 30, 2026 were approximately $3,007.1 million as compared to $2,709.3 million at December 31, 2025. Accounts and notes receivable, net, as of June 30, 2026 were approximately $152.7 million higher than at December 31, 2025 primarily due to timing of sales of accounts receivable under our factoring arrangements. Accounts payable and Accrued expenses as of June 30, 2026 were approximately $118.8 million lower than at December 31, 2025. Borrowings due within one year increased by approximately $429.0 million as of June 30, 2026, primarily due to the reclassification of the $400.0 million 5.450% Senior notes to current liabilities, as the notes mature on March 21, 2027.
Capital expenditures for the first six months of 2026 were approximately $101.8 million compared to $90.4 million for the same period in 2025.
Share Repurchase Program and Dividends
On July 9, 2025, the Company's Board of Directors authorized a new share repurchase program authorizing the Company to repurchase up to $1.0 billion of the Company's common stock, which has no expiration date. In May 2026, the Company entered into an accelerated share repurchase ("ASR") agreement with a financial institution to repurchase an aggregate of $293.0 million of shares of its common stock. The Company received approximately 1,997,613 shares associated with this transaction as of June 30, 2026. In November 2025, the Company entered into ASR agreements with two financial institutions to repurchase an aggregate of $250.0 million of shares of its common stock. The Company received approximately 1,997,204 shares associated with these transactions as of December 31, 2025. In February 2026, the Company received an additional 333,755 shares upon final settlement of its November 2025 ASR agreements. All shares received under the ASR agreements were retired upon receipt, and the excess of the purchase price over par value per share was recorded to a combination of "Additional paid-in capital" and "Retained earnings" within the Company's Condensed Consolidated Balance Sheets. In conjunction with the Cooperation Agreement entered into with Tractors and Farm Equipment Limited ("TAFE") in June 2025 (the "Cooperation Agreement"), TAFE agreed to participate on a pro rata basis in the Company's share repurchase programs as authorized by the Company's Board of Directors from time to time. Under the Cooperation Agreement, TAFE also retains the right to maintain its existing percentage of beneficial ownership of the Company's common stock. In February 2026, pursuant to the Cooperation Agreement, the Company committed to repurchase a pro-rata amount of shares from TAFE related to the Company's share repurchase program executed in the fourth quarter of 2025. The Company accounted for this arrangement as a forward share repurchase contract and, as of March 31, 2026, recorded a liability. Settlement occurred in May 2026, resulting in the repurchase of 422,590 shares for approximately $52.1 million. The shares repurchased were retired upon receipt, and the excess of the purchase price over par value per share was recorded to a combination of "Additional paid-in capital" and "Retained earnings" within the Company's Condensed Consolidated Balance Sheets. As of June 30, 2026, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $439.9 million, which has no expiration date.
During the three months ended June 30, 2026 and 2025, the Company declared and paid cash dividends of $0.30 and $0.29 per common share, respectively. During the six months ended June 30, 2026 and 2025, the Company declared and paid cash dividends of $0.59 and $0.58 per common share, respectively. On April 23, 2026, the Company's Board of Directors approved an increase in the Company's regular quarterly dividend to $0.30 per share, from $0.29 per share. On July 8, 2026, the Company's Board of Directors declared a regular quarterly dividend of $0.30 per common share to be paid on September 15, 2026, to all stockholders of record as of the close of business on August 14, 2026.
Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)
COMMITMENTS, OFF-BALANCE SHEET ARRANGEMENTS AND CONTINGENCIES
We are party to a number of commitments and other financial arrangements, which may include off-balance sheet arrangements. At June 30, 2026, we had outstanding guarantees issued to our Argentine finance joint venture, AGCO Capital, of approximately $81.7 million. In addition, the Company guarantees residual values that may be owed to its finance joint ventures, primarily in the United States and Canada, due upon expiration of certain eligible operating leases between the finance joint ventures and end users. At June 30, 2026, the Company had accrued approximately $12.7 million of outstanding guarantees of residual values related to the United States and Canada. The maximum potential amount of future payments under these guarantees is approximately $235.7 million.
We sell certain accounts receivable under factoring arrangements to our finance joint ventures and to financial institutions around the world. We account for the sale of such receivables as off balance sheet transactions. Our finance joint ventures in Europe, Brazil and Australia also provide wholesale financing directly to our dealers. As of June 30, 2026 and December 31, 2025, these finance joint ventures had approximately $112.2 million and $107.5 million, respectively, of outstanding accounts receivable associated with these arrangements. The total finance portfolio in our finance joint ventures was approximately $15.1 billion and $15.1 billion as of June 30, 2026 and December 31, 2025, respectively. The total finance portfolio as of June 30, 2026 and December 31, 2025 included approximately $12.8 billion and $12.7 billion, respectively, of retail receivables and $2.3 billion and $2.4 billion, respectively, of wholesale receivables from AGCO dealers.
Contingencies
We are party to various claims and lawsuits arising in the normal course of business. We closely monitor these claims and lawsuits and frequently consult with our legal counsel to determine whether they may, when resolved, have a material adverse effect on our financial position or results of operations and accrue and/or disclose loss contingencies as appropriate. Refer to Note 15 of our Condensed Consolidated Financial Statements for further information.
OUTLOOK
Global industry demand for farm equipment, driven by farm income, is expected to be relatively flat during 2026 in most major markets compared to 2025. Our net sales are expected to modestly increase in 2026 compared to 2025, resulting from positive pricing, favorable currency translation and sales mix. Operating margins will reflect the impact of modestly higher net sales, positive pricing, relatively flat to lower production volumes and continued cost controls, partially offset by tariff headwinds.
Our outlook is based on current assumptions regarding a number of factors including demand, currency stability, pricing and market share gains. If our assumptions are incorrect, or other issues arise or return, such as tariffs or a worsening of our supply chain, our results of operations will be adversely impacted. Refer to "Risk Factors" in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2025 for further discussion.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The discussion and analysis of our financial condition and results of operations are based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates estimates, including those related to discount and sales incentive allowances, deferred income taxes and uncertain income tax positions, pensions, goodwill, other intangible and long-lived assets. Management bases these estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. A description of critical accounting policies and related judgments and estimates that affect the preparation of our Condensed Consolidated Financial Statements is set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.
Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)
FORWARD-LOOKING STATEMENTS
Certain statements in "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Quarterly Report on Form 10-Q are forward-looking, including certain statements set forth under the headings "Liquidity and Capital Resources" and "Outlook." Forward-looking statements reflect assumptions, expectations, projections, intentions or beliefs about future events. These statements, which may relate to such matters as earnings, net sales, margins, industry conditions, market demand, commodity prices, farm incomes, weather conditions, foreign currency translation impacts, general economic outlook, dividends, share repurchases, availability of financing, product development and enhancement, factory productivity, production and sales volumes, benefits from cost reduction initiatives, material costs, pricing impacts, tax rates, compliance with loan covenants, capital expenditures and working capital and debt service requirements are "forward-looking statements" within the meaning of the federal securities laws. These statements do not relate strictly to historical or current facts, and you can identify certain of these statements, but not necessarily all, by the use of the words "anticipate," "assumed," "indicate," "estimate," "believe," "predict," "forecast," "rely," "expect," "continue," "grow" and other words of similar meaning. Although we believe that the expectations and assumptions reflected in these statements are reasonable in view of the information currently available to us, there can be no assurance that these expectations will prove to be correct.
These forward-looking statements involve a number of risks and uncertainties, and actual results may differ materially from the results discussed in or implied by the forward-looking statements. Adverse changes in any of the following factors could cause actual results to differ materially from the forward-looking statements:
• general economic and capital market conditions;
• availability of credit to our retail customers;
• the worldwide demand for agricultural products;
• grain stock levels and the levels of new and used field inventories;
• cost of steel and other raw materials;
• energy costs;
• performance and collectability of the accounts receivable originated or owned by AGCO or our finance joint ventures;
• government policies, tariffs and subsidies;
• uncertainty regarding changes in the international tariff regimes (including implementation of new tariffs and retaliatory measures) and product embargoes and their impact on the cost of the products that we sell;
• weather conditions;
• interest and foreign currency exchange rates;
• limitations on ability to repatriate funds;
• inflation, including in individual countries that have been designated as highly inflationary;
• pricing and product actions taken by competitors;
• commodity prices, acreage planted and crop yields;
• farm income, land values, debt levels and access to credit;
• pervasive livestock diseases;
• production disruptions, including due to component and raw material availability;
• production levels and capacity constraints at our facilities, including those resulting from plant expansions and systems upgrades;
• integration of recent and future acquisitions, including the completed acquisition on April 1, 2024 of the Trimble ag assets and formation of the joint venture, PTx Trimble, and the ability to obtain the expected results;
• our expansion plans in emerging markets;
• supply constraints, including energy shortages;
• our cost reduction and control initiatives;
• our research and development efforts;
• dealer and distributor actions;
• regulations affecting privacy and data protection;
Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)
• technological difficulties;
• the impact of future pandemics on product demand and production;
• the occurrence of future cyberattacks, including ransomware attacks; and
• the conflict in Ukraine and the Middle East.
In 2025, the U.S. government implemented a series of tariffs on goods imported into the United States from various countries, and in many cases these measures resulted in reciprocal tariffs and other actions on goods exported from the United States. These tariffs and related actions are complex, continuously evolving and remain highly volatile as trade negotiations and legal challenges proceed. In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act ("IEEPA"), which the U.S. government had relied on to impose certain tariffs, does not authorize the administration to impose such tariffs. Following that decision, on March 4, 2026, the U.S. Court of International Trade ("CIT") ordered U.S. Customs and Border Protection ("CBP") to process refunds of tariffs imposed under IEEPA, and on March 27, 2026, the CIT issued an amended order expanding the scope of entries subject to reliquidation. On April 20, 2026, the Consolidated Administration and Processing of Entries system opened for the first phase of refund filings. We have submitted certain refund claims under this initial phase; however, these claims remain subject to CBP review, and we cannot predict the timing, amount or ultimate collectability of any refunds to which we may be entitled. The IEEPA tariffs refund process remains subject to CBP review, and the administration has appealed the CIT's refund order to the U.S. Court of Appeals for the Federal Circuit, contesting both the scope of the refund obligation and the reliquidation of finally liquidated entries for importers who have not filed individual lawsuits. It remains uncertain when, or to what extent, such refunds will ultimately be collected. Following the U.S. Supreme Court's ruling, the administration has also imposed tariffs under alternative statutory authorities, the validity of which is also subject to legal challenge. As a result, the timing and extent of any refunds, the structure and scope of any new tariffs and the overall tariff framework remain uncertain and could create significant risks for our business. Depending on the countries affected, increases in tariffs have raised, and may continue to raise, the costs of inputs used in manufacturing our products, which in turn has impacted, and may further impact, our cost of goods sold. In addition, higher tariffs may lead to increased after-tariff sales prices for the products we sell. Additionally, the economic uncertainty caused by the tariffs may result in customers delaying planned purchases of products and services. While impacts of the tariffs may be partially mitigated by the fact that a majority of our sales and manufacturing takes place outside the United States, there can be no guarantee that we will be able to fully offset the impact of existing or future tariffs through pricing, sourcing changes or other measures. Furthermore, retaliatory tariffs imposed by other countries on our exported products could negatively affect our sales and marketplace access in those countries. The economic uncertainty caused by these tariffs and related trade policy developments, together with uncertainty regarding their enforceability, continuation or modification, has adversely impacted, and is expected to continue to adversely impact, our sales.
We depend on suppliers for components, parts and raw materials for our products, and any failure by our suppliers to provide products as needed, or by us to promptly address supplier issues, will adversely impact our ability to timely and efficiently manufacture and sell products. We cannot predict or control the impact of the conflicts in Ukraine or the Middle East on our business. These conflicts have already driven increased volatility across global energy, logistics and input markets, leading to higher fuel, fertilizer, transportation and input costs, as well as general uncertainty for farmers. In addition, the potential of future natural gas shortages in Europe, as well as predicted overall shortages in other energy sources, could also negatively impact our production and that of our supply chain in the future. There can be no assurance that there will not be future disruptions.
We have a substantial amount of indebtedness, and, as a result, we are subject to certain restrictive covenants and payment obligations that may adversely affect our ability to operate and expand our business.
Any forward-looking statement should be considered in light of such important factors. For additional factors and additional information regarding these factors, see "Risk Factors" in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2025.
New factors that could cause actual results to differ materially from those described above emerge from time to time, and it is not possible for us to predict all of such factors or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. Any forward-looking statement speaks only as of the date on which such statement is made, and we disclaim any obligation to update the information contained in such statement to reflect subsequent developments or information except as required by law.
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