Terex (NYSE:TEX) reported first-quarter 2026 results it described as a solid start to the year, supported by growth across all four segments and an initial contribution from its newly created Specialty Vehicles segment following the REV Group merger that closed Feb. 2.
First-quarter performance and backlog
President and CEO Simon Meester said the company grew sales 11% on a pro forma basis, with growth in every segment led by Specialty Vehicles, which grew 20% versus the prior-year period. Meester also highlighted Terex Utilities as the fastest-growing business in the quarter, citing a “very bullish market” as the team ramps production.
REV integration and portfolio actions
Meester said integration of the REV acquisition is “progressing as planned,” following a playbook used in the prior ESG integration, which he said was completed ahead of schedule and within budget with synergies above target. For REV, Terex expects to realize about $28 million of synergies in 2026 through duplicate overhead elimination and said it has “line of sight” to a $75 million synergy run-rate within 24 months.
Meester added that all integration workstreams are “at or ahead of schedule,” and said the legacy teams’ cultures are “meshing really well.” He also pointed to the Specialty Vehicles team showcasing its “3rd Eye Digital Solution” at a fire and emergency trade show, describing it as an AI-based situational awareness product originally developed in Environmental Solutions and now being extended to utility vehicles, cement mixers, and fire and emergency vehicles.
On Terex’s ongoing strategic review of its Aerials business, Meester said the company continues to engage with “multiple interested parties” and is working toward an outcome that “maximizes value,” but provided no specific details or timing.
Segment results: MP strength, Specialty Vehicles debut, Aerials seasonality
Senior Vice President and CFO Jennifer Kong-Picarello said first-quarter sales were $1.7 billion, up $505 million, or 41% on a reported basis, driven by the REV merger and growth in each legacy segment. On a pro forma basis, revenue rose 10.8%, and excluding the merger plus the sale of the cranes and Midwest businesses, organic revenue increased 8.1%.
EBITDA margin was 9.9%, down 50 basis points from the prior year, which Kong-Picarello attributed primarily to tariff impacts “which were not in effect in the prior year period,” partially offset by improved performance in Materials Processing and Specialty Vehicles.
Other key items included:
- Interest and other expense: $44 million, down $1 million year over year.
- Effective tax rate: 11% due to favorable one-time tax attributes; EPS included about $0.10 of one-time tax benefit versus the company’s expected 21% full-year rate.
- Free cash flow: outflow of $57 million, consistent with Q1 last year; Kong-Picarello reiterated Terex cash generation is typically weighted to the back half of the year.
- Working capital and leverage: net working capital improved to 16.7% of sales from 26% a year ago; net leverage ratio declined to 2.4x.
By segment:
- Environmental Solutions: sales up 3.3% as Utilities ramped production to meet demand for bucket trucks, digger derricks, and parts and services. EBITDA margin was 18%, down year over year due to higher Utilities mix and lower ESG volume, partially offset by higher synergy realization.
- Materials Processing (MP): sales were $419 million, up 18.3% pro forma (or 12% excluding FX). Kong-Picarello said aggregates drove growth, with sales increasing in every region. MP EBITDA margin improved to 15%, up 310 basis points, driven by volume, efficiency improvements, and pricing actions.
- Specialty Vehicles (new segment): generated $436 million of revenue in February and March, up 20% versus the same period last year. EBITDA margin rose 160 basis points to 14.2%, driven by throughput, price realization, and operational efficiency.
- Aerials: bookings produced a 132% book-to-bill ratio and a $1 billion backlog. Sales were $469 million, up 4.2% year over year largely due to FX. EBITDA was break-even, which Kong-Picarello said reflected seasonally low Q1 volume as well as tariffs and a temporary unfavorable mix.
Bookings trends and commentary on tariffs and inflation
Terex reported first-quarter pro forma bookings of $2.1 billion, a 109% book-to-bill ratio, contributing to modest backlog growth sequentially and year over year. Kong-Picarello noted Environmental Solutions bookings were slightly lower due to timing of large Utilities orders booked in Q4, while MP bookings were $623 million, up 38% year over year on a pro forma basis, with backlog rising 53% to $594 million.
In the Q&A, Meester said MP momentum was supported by healthy fleet levels and utilization, with rental purchase option (RPO) conversions “picking back up.” He added the company was “particularly encouraged” by signs of early-cycle momentum in MP and Aerials, including “some independents picking up in Aerials.”
On tariffs, Kong-Picarello told analysts she did not see additional sequential headwinds, adding that a change in the Section 232 calculation was “largely offset by the IEEPA going away.” She said Terex had visibility into six months of Aerials backlog and was “very comfortable with the price cost favorability for the rest of the year.”
Asked about broader inflation, Kong-Picarello said commodity inflation was already baked into the outlook and that CPI changes typically lag due to vendor contracts and a hedging program. She cited higher inbound freight on some international routes as a potential risk, while noting mechanisms including value-added pricing in Specialty Vehicles backlog and the ability in some businesses to pass through cost changes via surcharges.
2026 guidance reiterated
Kong-Picarello said the company’s first-quarter performance, bookings trends, and $7.1 billion backlog supported reconfirming the full-year outlook previously provided in February. Terex reiterated expectations for:
- Sales: $7.5 billion to $8.1 billion in 2026, up about 5% on a pro forma basis.
- Pro forma EBITDA: $930 million to $1.0 billion, up about $100 million, or 12% year over year, with a 12.4% midpoint margin.
- Synergies: about $28 million included in 2026 EBITDA outlook.
- Interest and other expense: about $190 million, based on average debt outstanding of approximately $2.7 billion.
- Effective tax rate: 21% for the full year.
- EPS: $4.50 to $5.00, with quarter two through four share count expected at about 115 million.
- Free cash conversion: 80% to 90% of net income.
Meester said holding guidance was “much more about discipline and timing than any change in how we feel about the fundamentals of the business,” citing that the company is only one quarter into the year amid macro and tariff uncertainty. In closing remarks, he said Terex has “effectively merged three businesses into a single, much stronger company” in less than two years and remains focused on execution and integration.
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.
