Terex Q2 Earnings Call Highlights

Key Points

• Terex raised its 2026 outlook after reporting $2.24 billion in second-quarter revenue, an 8.5% pro forma sales increase, and a 10.7% rise in adjusted EBITDA to $269 million. The company now expects $7.9 billion–$8.2 billion in sales, $960 million–$1 billion in adjusted EBITDA, and adjusted EPS of $4.70–$5.10.
• Demand indicators strengthened, with pro forma bookings up 25% to $2 billion and backlog reaching $6.9 billion. Materials Processing and Specialty Vehicles posted improved margins, while Aerials benefited from stronger infrastructure-related demand despite tariff pressure.
• Terex generated $101 million in free cash flow and reduced net leverage to 2.3 times adjusted EBITDA. Management also said REV Group integration is on track, while the company continues reviewing strategic alternatives for its Aerials segment.

Terex NYSE: TEX reported second-quarter revenue of $2.24 billion and raised its full-year outlook, citing growth across all four segments, stronger bookings, backlog coverage and progress integrating REV Group.

On a pro forma basis, excluding the sale of its Cranes and Midwest businesses, second-quarter sales increased 8.5% year over year. Adjusted EBITDA rose 10.7% to $269 million, while adjusted EBITDA margin reached 12.0%, compared with 11.8% on a pro forma basis in the prior-year period. Adjusted earnings per share were $1.37, including an $8 million net benefit from IEEPA tariff refunds and a one-time unfavorable customs-related accrual.

President and Chief Executive Officer Simon Meester said the company’s results reflected higher revenue, better earnings conversion and execution against strategic priorities. Consolidated bookings increased 25% year over year on a pro forma basis to $2 billion, and Terex ended the quarter with $6.9 billion of backlog.

Demand backdrop and portfolio execution

Meester said the company is seeing a positive and improving demand environment in many of its verticals. He pointed to U.S. non-residential construction starts, which rose 18% year to date to $368 billion, driven by data centers, energy investments and civil infrastructure projects. Mega-project starts totaled approximately $80 billion through May, according to the company.

Terex said higher equipment utilization, increased customer capital spending and favorable channel-partner sentiment are supporting demand. The company also cited municipal replacement activity for fire apparatus, ambulances and refuse collection vehicles. During the quarter, the City of Chicago approved purchases of 80 fire trucks and 40 ambulances, Terex said.

Meester said the company’s acquisition of Environmental Solutions Group and merger with REV Group, completed over the past two years, are both tracking ahead of their respective business cases to date. The REV integration is progressing as planned, he said, with synergy realization proceeding as expected.

In Specialty Vehicles, Terex is expanding its ladder-truck plant in Ocala, Florida, and nearing completion of an expansion in Brandon, South Dakota. The Brandon project is intended to increase capacity for the S-180 semi-custom pumper and reduce lead times, with first deliveries expected in the fourth quarter. Meester said the company expects the new capacity additions to reach normal run rates in 2027.

The company continues to pursue a strategic review of its Aerials segment. Meester said Terex has interest from multiple parties and is working toward an outcome intended to maximize shareholder value, but he did not provide a timetable or further details.

Segment results

• Environmental Solutions: Sales increased 5.9% to $456 million, as growth in Terex Utilities more than offset temporary softness in refuse collection vehicles at ESG. Adjusted EBITDA margin declined 250 basis points to 17.5%, reflecting unfavorable mix, production ramp-up inefficiencies and lower absorption at ESG. ESG bookings increased year over year for the first time since the first quarter of 2025, though Terex no longer expects a material second-half pre-buy of refuse collection vehicles ahead of 2027 emissions regulations.
• Materials Processing: Sales rose 11.1% to $464 million, driven particularly by U.S. mobile-crusher demand tied to infrastructure, data centers and industrial projects. Adjusted EBITDA margin expanded 440 basis points to 18.8%, aided by product mix and price-cost discipline. The company said one-time benefits contributed about 180 basis points to the quarterly margin. Segment bookings rose 18%, and backlog increased 63% year over year to $599 million.
• Specialty Vehicles: Sales rose 6.2% to $650 million as throughput improved in fire equipment. Adjusted EBITDA margin increased 210 basis points to 14.5%, supported by favorable mix, operational efficiencies and price realization, partly offset by inflation. Bookings increased 9%, while backlog declined as the company increased production. Meester said Terex intends to reduce fire-equipment lead times toward about one year over roughly the next two years.
• Aerials: Sales increased 10.9% to $673 million, supported by national-account demand tied to large infrastructure and non-residential projects. Adjusted EBITDA margin was 5.7%, down 340 basis points from the prior year because of higher tariff effects. However, margin improved 560 basis points sequentially as volume increased and price-cost dynamics improved. Chief Financial Officer Jennifer Kong-Picarello said that excluding an unfavorable customer accrual, Aerials would have generated an 8.3% adjusted EBITDA margin in the quarter.

Meester said bookings from independent aerial-equipment customers continued to improve sequentially, although national accounts grew faster during the first half. He said the company views the U.S. market as more resilient than Europe, where it has seen some softening. In Materials Processing, Terex said Australia and India remain strong, supported by mining and infrastructure investment, respectively, while European demand remains positive but has softened.

Cash flow, leverage and updated outlook

Terex generated $128 million of operating cash flow and $101 million of free cash flow in the quarter. Net working capital declined to 15.2% of sales from 16.7% in the first quarter and 22.8% a year earlier. Net debt ended the quarter at $2.28 billion, including $407 million of cash, while net leverage improved to 2.3 times trailing-12-month adjusted EBITDA. The company returned $20 million to shareholders through dividends.

For 2026, Terex raised its sales outlook to a range of $7.9 billion to $8.2 billion and its adjusted EBITDA outlook to $960 million to $1 billion. The company now expects adjusted EPS of $4.70 to $5.10 and free cash flow of $300 million to $350 million.

Kong-Picarello said the higher revenue outlook is primarily driven by stronger-than-expected Aerials growth and improved Materials Processing performance. She said the modest increase in EBITDA relative to the sales increase reflects mix, as Aerials carries lower margins than the company’s other segments. Terex expects approximately $28 million of merger-related synergies in its 2026 EBITDA outlook.

About Terex (NYSE:TEX)

Terex Corporation is a global manufacturer of lifting and material-handling plant and equipment, serving a range of industries that includes construction, infrastructure, energy, manufacturing and shipping logistics. Its product portfolio encompasses aerial work platforms, rough terrain and tower cranes, port and cargo handling equipment, material processing machinery and utility products. These offerings are marketed under well-known brands such as Genie®, Terex® AWP, Terex® Cranes, Demag®, and Powerscreen®, and are designed to meet diverse application requirements from building sites to industrial facilities and ports.

Headquartered in Westport, Connecticut, Terex traces its roots back to 1933 and has grown through strategic acquisitions and organic expansion.

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