Cummins (NYSE:CMI) executives highlighted record underlying profitability in 2025 and outlined expectations for revenue growth and margin stability in 2026, as the company navigates a prolonged North America truck downturn, volatile tariffs, and shifting energy-transition demand.
2025 results: record underlying EBITDA despite truck weakness
Chair and CEO Jennifer Rumsey said Cummins delivered “strong financial performance” in 2025 despite weak North America heavy- and medium-duty truck demand, ongoing tariff volatility, and regulatory uncertainty. Fourth-quarter revenue totaled $8.5 billion, up 1% year-over-year, driven by strong global power generation demand, higher pickup-truck engine volumes, and pricing, which more than offset lower North America truck volumes.
For the full year, revenue was $33.7 billion, down 1% from 2024. Reported EBITDA was $5.4 billion, or 16.0% of sales, compared with $6.3 billion, or 18.6%, in 2024. The 2025 figure included $458 million of electrolyzer-related charges, while 2024 results included a $1.3 billion gain related to the separation of Atmus and additional restructuring and Accelera-related charges. Excluding these items, Cummins reported record EBITDA of $5.8 billion, or 17.4% of sales, versus $5.4 billion, or 15.7%, in 2024.
CFO Mark Smith said the underlying EBITDA margin improved 170 basis points year-over-year, crediting higher power generation volumes, pricing, lower compensation expense, and operational improvements, which more than offset lower North America truck volumes and tariff impacts.
Segment performance: power systems and distribution set records
Management emphasized record profitability in Power Systems and Distribution. Rumsey said full-year EBITDA reached record levels in both segments, and Smith added detail on full-year operating performance excluding electrolyzer strategic review costs.
- Power Systems: Revenue rose 16% to a record $7.5 billion, driven primarily by demand for power generation equipment, especially data center applications in North America and China. EBITDA was a record 22.7% of sales, up from 18.4% in 2024.
- Distribution: Revenue increased 9% to a record $12.4 billion. EBITDA was a record 14.6% of sales, up from 12.1% in 2024, driven by higher power generation volumes and pricing.
- Engine: Revenue declined 7% to $10.9 billion, with EBITDA margin of 12.7% versus 14.1% in 2024, primarily due to lower North America heavy- and medium-duty volumes.
- Components: Revenue fell 10% to $10.1 billion; EBITDA margin improved to 13.8% from 13.5% as cost reductions offset the impact of lower truck volumes.
- Accelera: Revenue increased to $460 million. The segment posted a net operating loss of $438 million, compared with a $452 million loss in the prior year, with Smith citing cost reductions partially offset by higher product coverage costs in the fourth quarter.
Product and portfolio updates: new engines, mining hybrid push, and electrolyzer pullback
Rumsey highlighted several strategic moves made during 2025. In engines, Cummins introduced the X10 under its HELM platforms, intended to replace both the L9 and X12 platforms, and unveiled the new B7.2 diesel engine. Both engines will be manufactured for North America markets at the Rocky Mount Engine Plant in North Carolina.
In Power Systems, the company expanded its hybrid and power generation offerings, including the acquisition of assets from First Mode, described as a provider of retrofit hybrid solutions for mining and rail. Cummins also announced a collaboration with Komatsu to develop hybrid powertrains for surface-hauling mining equipment. Rumsey said the company also launched a new 17-liter engine platform generator set producing up to 1 MW (the S17 Centum genset) and completed a capacity expansion of its 95-liter platform ahead of schedule.
On the energy transition, management said it is “pacing and refocusing” investments as zero-emission adoption slows in some regions. The strategic review of the electrolyzer business led to additional fourth-quarter charges. In the Q&A, executives said green hydrogen demand has fallen sharply amid policy changes, leading Cummins to stop future commercial activity in electrolyzers while continuing to meet existing customer commitments. Smith said the fourth-quarter actions included a mix of personnel actions, inventory write-downs, and contract exits, and were intended to lower costs going forward.
Tariffs: recovering dollars, but margin dilution remains
Tariffs were a recurring theme in the call. Smith said the gross impact “accumulated through the year” in 2025, with the fourth quarter showing the largest gross impact, though management said it was able to offset much of the cost through mitigation and recovery actions. Looking to 2026, Smith estimated tariffs would be roughly a 50-basis-point headwind to EBITDA margin at the midpoint, characterizing it as largely a “math” issue: higher tariff-driven costs and recoveries inflate both revenues and cost of sales, diluting margins even if the company is largely recovering costs in dollars.
Executives also noted uncertainty around Section 232 details, including an “engine offset program” and how U.S. content is defined, with Rumsey saying the company hopes to have more clarity after the first quarter.
2026 outlook: revenue growth led by power generation; truck recovery expected later in year
For 2026, Cummins forecast total company revenue growth of 3% to 8% versus 2025, with EBITDA margin (including tariff dilution) expected to be 17% to 18%. Rumsey said the company expects continued weakness in first-half North America truck demand, with a stronger second half. Cummins projected North America heavy-duty truck industry production of 220,000 to 240,000 units (flat to up 10%) and medium-duty production of 110,000 to 120,000 units (also flat to up 10%). Pickup-truck engine shipments are expected to be 125,000 to 140,000 units (down 5% to up 5%).
By segment, Smith guided to flat to up 5% revenue for both Engine and Components, with Engine EBITDA margin expected at 12% to 13% and Components at 13% to 14%. Distribution revenue is projected to increase 5% to 10%, with EBITDA margin of 13.25% to 14.25%. Power Systems is expected to grow 12% to 17% with EBITDA margin of 23% to 24%. Accelera revenue is expected at $300 million to $350 million, with net losses narrowing to $325 million to $355 million.
In Power Systems, executives said demand remains strong, with record order intake in the fourth quarter and orders being taken “well into 2028.” Rumsey also provided an update on data center exposure: the company estimated approximately $3.5 billion of 2025 revenue tied to data centers across Power Systems and Distribution, up from the level discussed the prior year.
Cummins also pointed to increased regulatory clarity after the EPA confirmed the 2027 Low NOx rule. In Q&A, Rumsey said the company expects some pre-buy activity in the second half of 2026, alongside a cyclical recovery in truck demand, while noting continued uncertainty given the proximity to the regulatory change.
Capital spending for 2026 is expected to be $1.35 billion to $1.45 billion, and Smith reiterated a long-term goal of returning at least 50% of operating cash flow to shareholders via dividends and share repurchases. The company scheduled its Analyst Day for May 21 in New York City, where it plans to provide additional updates on strategy and long-term targets.
About Cummins (NYSE:CMI)
Cummins Inc (NYSE: CMI) is a global power technology company that designs, manufactures, distributes and services a broad portfolio of diesel and natural gas engines, electrified powertrains, power generation systems and related components. Founded in 1919 and headquartered in Columbus, Indiana, Cummins has grown into one of the world’s leading suppliers of internal combustion engines and a provider of technologies that reduce emissions and improve fuel efficiency.
The company’s product lineup includes heavy-, medium- and light-duty engines for on-highway and off-highway applications, generator sets and power systems for commercial and industrial use, and key engine components such as turbochargers, fuel systems, air handling, filtration and aftertreatment solutions.
