I am an avid investor with a major focus on small cap companies with experience in investing in US, Canadian, and European markets. My investment philosophy to generating great returns on the stock market revolves around identifying mispriced securities by understanding the drivers behind a company's financials, and ultimately, most often revealed by a DCF model valuation. This methodology doesn't limit an investor into rigid traditional value, dividend, or growth investing, but rather accounts for all of a ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Presents the unaudited condensed consolidated financial statements and detailed notes for July 31, 2025 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | July 31, 2025 (in thousands) | January 31, 2025 (in thousands) | | :--- | :--- | :--- | | Total Assets | $1,877,942 | $1,813,938 | | Total Liabilities | $1,267,599 | $1,199,861 | | Total Stockholders' Equity | $610,343 | $614,077 | | Cash | $32,675 | $35,898 | | Inventories, net | $1,140,000 | $1,108,672 | | Floorplan payable | $852,225 | $755,698 | - Total assets increased by **$63.9 million**, primarily driven by an increase in inventories. Total liabilities increased by **$67.7 million**, mainly due to a significant rise in floorplan payable. Stockholders' equity slightly decreased by **$3.7 million**[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Metric | Three Months Ended July 31, 2025 (in thousands) | Three Months Ended July 31, 2024 (in thousands) | Six Months Ended July 31, 2025 (in thousands) | Six Months Ended July 31, 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $546,426 | $633,674 | $1,140,763 | $1,262,376 | | Gross Profit | $93,646 | $112,379 | $184,580 | $234,132 | | Income (Loss) from Operations | $662 | $15,750 | $(5,074) | $38,345 | | Net (Loss) Income | $(6,000) | $(4,304) | $(19,204) | $5,136 | | Basic EPS | $(0.26) | $(0.19) | $(0.85) | $0.22 | | Diluted EPS | $(0.26) | $(0.19) | $(0.85) | $0.22 | - For the three months ended July 31, 2025, total revenue decreased by **13.8% YoY**, and net loss widened to **$6.0 million** from **$4.3 million** in the prior year. For the six months ended July 31, 2025, total revenue decreased by **9.6% YoY**, and the company reported a net loss of **$19.2 million** compared to a net income of **$5.1 million** in the prior year[9](index=9&type=chunk)[74](index=74&type=chunk)[105](index=105&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) | Metric | Three Months Ended July 31, 2025 (in thousands) | Three Months Ended July 31, 2024 (in thousands) | Six Months Ended July 31, 2025 (in thousands) | Six Months Ended July 31, 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net (Loss) Income | $(6,000) | $(4,304) | $(19,204) | $5,136 | | Foreign currency translation adjustments | $9,511 | $58 | $13,172 | $(4,467) | | Comprehensive Income (Loss) | $3,511 | $(4,246) | $(6,032) | $669 | - Comprehensive income for the three months ended July 31, 2025, was **$3.5 million**, a significant improvement from a loss of **$4.2 million** in the prior year, primarily due to positive foreign currency translation adjustments. For the six months, comprehensive loss was **$6.0 million**, compared to income of **$0.7 million** in the prior year, despite positive foreign currency adjustments[10](index=10&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric | July 31, 2025 (in thousands) | January 31, 2025 (in thousands) | July 31, 2024 (in thousands) | January 31, 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Stockholders' Equity | $610,343 | $614,077 | $659,566 | $657,642 | | Retained Earnings | $341,110 | $360,314 | $402,362 | $397,225 | | Accumulated other comprehensive income (loss) | $4,838 | $(8,334) | $(2,707) | $1,760 | - Total stockholders' equity decreased from **$614.1 million** at January 31, 2025, to **$610.3 million** at July 31, 2025, primarily due to net losses, partially offset by positive other comprehensive income from foreign currency translation adjustments[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric | Six Months Ended July 31, 2025 (in thousands) | Six Months Ended July 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net Cash Provided by (Used for) Operating Activities | $49,894 | $(47,367) | | Net Cash Used for Investing Activities | $(24,852) | $(21,467) | | Net Cash (Used for) Provided by Financing Activities | $(29,961) | $62,411 | | Net Change in Cash | $(3,223) | $(6,847) | | Cash at End of Period | $32,675 | $31,219 | - Net cash provided by operating activities significantly improved to **$49.9 million** for the first six months of fiscal 2026, compared to a net cash outflow of **$47.4 million** in the prior year, driven by changes in inventory and floorplan financing. Net cash used for investing activities increased to **$24.9 million**, primarily due to an acquisition. Net cash used for financing activities was **$30.0 million**, a reversal from **$62.4 million** provided in the prior year, mainly due to lower non-manufacturing floorplan payables[14](index=14&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The notes provide detailed information on the company's business activities, significant accounting policies, and specific financial statement line items, including revenue disaggregation by source and segment, receivables, inventories, property and equipment, intangible assets and goodwill, floorplan payable, long-term debt, derivative instruments, accumulated other comprehensive income (loss), leases, fair value of financial instruments, income taxes, business combinations, contingencies, and business segment and geographic information[16](index=16&type=chunk)[17](index=17&type=chunk)[24](index=24&type=chunk) [NOTE 1 - BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=NOTE%201%20-%20BUSINESS%20ACTIVITY%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - The company is engaged in the retail sale, service, and rental of agricultural and construction machinery through stores in the United States, Europe (Bulgaria, Germany, Romania, Ukraine), and Australia[17](index=17&type=chunk) - Operating results are subject to fluctuation due to weather patterns and factors influencing customer profitability, impacting equipment purchases, rentals, and after-sales services[16](index=16&type=chunk) - The company is evaluating new FASB ASUs (2023-09, 2024-03, 2025-01, 2025-03, 2025-05) regarding income tax disclosures, expense disaggregation, business combinations, and credit loss measurement, with no material impact expected from preliminary analysis[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) [NOTE 2 - EARNINGS PER SHARE](index=10&type=section&id=NOTE%202%20-%20EARNINGS%20PER%20SHARE) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net (loss) income attributable to common stockholders (in thousands) | $(6,000) | $(4

Core Insights - Titan Machinery Inc. reported an adjusted loss per share of 26 cents for Q2 fiscal 2026, which was better than the Zacks Consensus Estimate of a 56 cents loss, but a reversal from the adjusted earnings of 17 cents per share in the same quarter last year [1][8] - Total revenues for the quarter were $546 million, down 13.8% year-over-year, but exceeded the consensus estimate of $504 million [2][8] - The company anticipates a loss of $1.50 to $2.00 per share for fiscal 2026, reflecting weak demand, which is an update from the previous expectation of a loss of $1.25 to $2.00 per share [9] Revenue Breakdown - Equipment revenues decreased by 19.1% year-over-year to $376 million, while parts revenues fell slightly by 0.5% to $109 million [2] - Service revenues increased by 3.2% year-over-year to approximately $49 million, and rental and other revenues rose by 7.1% to $12 million [2] - Agriculture segment revenues fell 18.4% to $346 million, and construction revenues were down 10.2% to $72 million [4] Segment Performance - Europe revenues increased by 44.1% year-over-year to $98 million, driven by favorable foreign currency impacts, with income before taxes rising 121.7% to $5.1 million [5] - The Australia segment reported a significant decline in revenues, down 50.1% year-over-year to $31 million, resulting in a loss before taxes of $2.1 million [5] Cost and Margin Analysis - Cost of sales decreased by 13.1% to $453 million, while gross profit fell 16.6% year-over-year to $94 million, leading to a gross margin of 17.1%, down from 17.7% in the prior year [3] - Operating expenses decreased by 2.6% year-over-year to $93 million, attributed to lower variable expenses [3] - Adjusted EBITDA was reported at $5.6 million, a decline from $20.2 million in the prior year [3] Cash Flow and Balance Sheet - Cash used for operating activities was $50 million in the first half of fiscal 2026, compared to an outflow of $48 million in the same period last year [6] - The company ended the quarter with a cash balance of approximately $33 million and long-term debt of $153 million, down from $158 million at the end of fiscal 2025 [6] Future Outlook - The Agriculture segment's revenue decline is now expected to be between 15% to 20%, an improvement from the previous forecast of 20% to 25% [7] - The Construction segment's revenues are anticipated to decline by 3% to 8%, updated from a previous estimate of 5% to 10% [9] - Year-over-year revenue growth in Europe is projected at 30% to 40%, an increase from the earlier estimate of 23% to 28% [9] Stock Performance - Over the past year, Titan Machinery's shares have increased by 38.2%, outperforming the industry's growth of 15.8% [10]

Company Overview - Titan Machinery Inc. held its Second Quarter Fiscal 2026 Earnings Call on August 28, 2025, featuring key executives including Bryan Knutson, President and CEO, and Robert Larsen, CFO [1][3]. Earnings Release - The earnings release for the second quarter ended July 31, 2025, is accessible on Titan's Investor Relations website, indicating transparency and availability of financial information for stakeholders [3]. Presentation Materials - A supplemental presentation was provided to accompany the prepared remarks during the earnings call, along with webcast and replay information, enhancing the communication of financial results [4]. Forward-Looking Statements - The company included forward-looking statements in its prepared remarks, which are based on current expectations and involve inherent risks and uncertainties, emphasizing the need for caution in interpreting these projections [4][5].

Financial Data and Key Metrics Changes - Total revenue for the second quarter was $546.4 million, a 14% decrease from $633.7 million in the prior year period [13] - Gross profit decreased to $93.6 million from $112.4 million, with a gross profit margin of 17.1% compared to 17.7% in the prior year [13] - The net loss for the quarter was $6 million, resulting in a loss per diluted share of $0.26, compared to adjusted net income of $4 million or adjusted diluted earnings per share of $0.17 for the same period last year [14] Business Line Data and Key Metrics Changes - Domestic Agriculture segment saw a same-store sales decrease of 18.7% to $345.8 million, with a pretax loss of $12.3 million compared to adjusted pretax income of $6.7 million in the prior year [15] - Construction segment's same-store sales decreased 10.2% to $72 million, resulting in a pretax loss of $1.2 million compared to adjusted pretax income of $200,000 in the prior year [15] - Europe segment experienced a 44% increase in same-store sales to $98.1 million, with a pretax income of $5.1 million compared to a pretax loss of $2.3 million in the prior year [16] - Australia segment's same-store sales decreased 50.1% to $30.6 million, with a pretax loss of $2.1 million compared to pretax income of $1.4 million in the prior year [17] Market Data and Key Metrics Changes - Farmer sentiment in the domestic agriculture segment remains cautious due to low commodity prices, with net income heavily dependent on uncertain government support programs [8] - The construction segment is experiencing weaker demand as customers are cautious with capital expenditures amid broader economic uncertainty [9] - The European segment, particularly Romania, is performing well due to EU stimulus programs [9] Company Strategy and Development Direction - The company is focused on inventory reduction initiatives, targeting a reduction of $100 million for the fiscal year, with expectations to exceed this target [6][17] - The strategy includes optimizing the used equipment portfolio and enhancing customer experience through a customer care initiative [7] - The company aims to emerge from the current cycle stronger and better positioned for fiscal 2027 [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving inventory reduction targets and improving equipment margins in the future [18] - The company expects equipment margins to remain subdued through the rest of fiscal 2026, with a revised full-year equipment margin expectation of approximately 6.6% [18] - Management highlighted the importance of government support and crop health for the agriculture segment's performance [8][33] Other Important Information - The company has reduced inventory by approximately $365 million over the past year [11] - Cash on hand was $33 million, with an adjusted debt to tangible net worth ratio of 1.8 as of July 31, 2025 [17] Q&A Session Summary Question: What conditions are needed for equipment margins to improve? - Management indicated that mix optimization, pricing discipline, and geographic optimization are key factors for margin recovery [24][26] Question: How much does the company expect to exceed the $100 million inventory reduction target? - Management stated that internal goals for inventory reduction are significantly higher than $100 million, but external factors will influence the final outcome [46] Question: What is the outlook for OEM pricing and incentives? - Management noted that OEMs are discussing price increases of 2% to 4%, and the company is working closely with suppliers to manage these costs [50] Question: How is the company handling trade-ins and used equipment? - Management confirmed that they are actively managing trade-ins and have seen success in moving late-model used equipment [66] Question: What is the impact of the pending farm bill on farmer support? - Management highlighted ongoing debates about the farm bill, emphasizing the need for permanent support and increased funding for research in crop utilization [91]

Financial Data and Key Metrics Changes - Total revenue for the second quarter was $546.4 million, a 14% decrease from $633.7 million in the prior year period [14] - Gross profit decreased to $93.6 million from $112.4 million, with a gross profit margin of 17.1% compared to 17.7% in the prior year [14] - The net loss for the quarter was $6 million, translating to a loss per diluted share of $0.26, compared to adjusted net income of $4 million or adjusted diluted earnings per share of $0.17 for the same period last year [15] Business Line Data and Key Metrics Changes - Domestic Agriculture segment saw a same-store sales decrease of 18.7% to $345.8 million, with a pretax loss of $12.3 million compared to adjusted pretax income of $6.7 million in the prior year [16] - Construction segment's same-store sales decreased 10.2% to $72 million, resulting in a pretax loss of $1.2 million compared to adjusted pretax income of $200,000 in the prior year [16] - Europe segment experienced a 44% increase in same-store sales to $98.1 million, with a pretax income of $5.1 million compared to a pretax loss of $2.3 million in the prior year [16] - Australia segment's same-store sales decreased 50.1% to $30.6 million, with a pretax loss of $2.1 million compared to pretax income of $1.4 million in the prior year [16] Market Data and Key Metrics Changes - Farmer sentiment in the domestic agriculture market remains cautious due to low commodity prices, with net income heavily dependent on uncertain government support programs [10] - The European segment is performing well, particularly in Romania, driven by EU stimulus programs [11] - The Australian market is tracking similarly to North American agriculture, with industry volumes below prior trough levels [12] Company Strategy and Development Direction - The company is focused on inventory reduction initiatives, targeting a reduction of $100 million for the fiscal year, with expectations to exceed this target [7][18] - The strategy includes optimizing the used equipment portfolio and enhancing customer experience through a customer care initiative [9] - The company aims to emerge from the current cycle stronger and better positioned for fiscal 2027 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving inventory reduction targets and improving equipment margins in the future [19] - The company expects subdued equipment margins through the rest of fiscal 2026, with a revised full-year equipment margin expectation of approximately 6.6% [22] - Management highlighted the importance of government support and crop health for the agriculture segment's performance [10][11] Other Important Information - The company reduced inventory by approximately $365 million over the past year [13] - Cash on hand was $33 million, with an adjusted debt to tangible net worth ratio of 1.8 as of July 31, 2025 [18] Q&A Session Summary Question: Conditions for achieving historic equipment margin range - Management discussed the need for mix optimization, pricing discipline, and geographic optimization to improve margins [25][27][30] Question: Impact of net farm income on equipment margins - Management emphasized the importance of net farm income, which is influenced by yield, price, and government payments [34] Question: Clarification on equipment margin expectations - Management confirmed that the consolidated total equipment margin is expected to be 6.6%, with domestic agriculture margins at 3.8% for the full year [38][39] Question: Inventory reduction goals - Management indicated confidence in exceeding the $100 million inventory reduction target, with internal goals set higher [46] Question: OEM pricing and cost pressures - Management noted that OEMs are discussing price increases of 2% to 4%, and the company is working closely with suppliers to manage these costs [52] Question: Floor planning arrangements and tariff impacts - Management stated that floor plan interest expense has not been significantly impacted by tariffs, focusing instead on minimizing stock inventory [78] Question: OEM incentives and revenue guidance - Management provided insights on expected OEM incentives and revenue consistency between Q3 and Q4, with a noted mix change affecting profitability [82][84] Question: Pending farm bill and farmer support - Management highlighted ongoing debates around the farm bill, emphasizing the need for permanent support and funding for research in crop utilization [90][92]

分组1 - Titan Machinery reported a quarterly loss of $0.26 per share, better than the Zacks Consensus Estimate of a loss of $0.56, representing an earnings surprise of +53.57% [1] - The company posted revenues of $546.43 million for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 8.40%, but down from $633.67 million year-over-year [2] - Titan Machinery shares have increased approximately 48.7% since the beginning of the year, significantly outperforming the S&P 500's gain of 10.2% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is -$0.31 on revenues of $570.39 million, and for the current fiscal year, it is -$1.81 on revenues of $2.27 billion [7] - The Automotive - Retail and Whole Sales industry, to which Titan Machinery belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook [8]

Financial Performance - Revenue for Q2 FY2026 was $546.4 million, a 13.8% decrease compared to $633.7 million in Q2 FY2025[30, 32, 34] - The company reported a pre-tax loss of $8.2 million in Q2 FY2026[10, 34] - Diluted loss per share was $0.26[10, 32] - For the first six months of FY2026, total revenue was $1.1408 billion, a 9.6% decrease from $1.2624 billion in the first six months of FY2025[35, 37, 39] - The adjusted pre-tax loss for the first six months of FY2026 was $25.5 million[39] Segment Performance - Agriculture segment revenue decreased by 18.5% to $345.8 million in Q2 FY2026[34] and is expected to be down 15% to 20% for FY26[15] - Construction segment revenue decreased by 10.2% to $72.0 million in Q2 FY2026[34] and is expected to be down 3% to 8% for FY26[20] - Europe segment revenue increased by 44.0% to $98.1 million in Q2 FY2026[24, 34] and is expected to be up 30% to 40% for FY26[24] - Australia segment revenue decreased by 50.1% to $30.6 million in Q2 FY2026[29, 34] and is expected to be down 20% to 25% for FY26[29] Inventory and Balance Sheet - Equipment inventory increased by $28 million from January 31, 2025, to July 31, 2025[42] - The company is targeting an inventory reduction of approximately $100 million in fiscal year 2026[42]

Core Viewpoint - Titan Machinery Inc. reported a net loss of $6.0 million for the second quarter of fiscal 2026, reflecting challenges in the agricultural and construction equipment markets, while maintaining a focus on inventory reduction and operational optimization [2][7][16]. Financial Performance - Revenue for the second quarter of fiscal 2026 was $546.4 million, down from $633.7 million in the same quarter last year, representing a decrease of 13.8% [3][34]. - Equipment revenue decreased to $376.3 million from $465.2 million year-over-year, a decline of 19.1% [3][34]. - Parts revenue remained relatively stable at $109.2 million compared to $109.8 million last year, while service revenue increased to $48.8 million from $47.3 million [3][34]. - Gross profit for the quarter was $93.6 million, down from $112.4 million, with a gross profit margin of 17.1%, slightly lower than 17.7% in the previous year [4][34]. Operating Expenses and Losses - Operating expenses were reduced to $92.7 million from $95.2 million year-over-year, with operating expenses as a percentage of revenue increasing to 17.0% from 15.0% [5][34]. - The company reported a net loss of $6.0 million, or a loss per diluted share of $0.26, compared to a net loss of $4.3 million, or $0.19 per diluted share, in the same period last year [7][34]. Segment Performance - The Agriculture segment saw revenue decline to $345.8 million, down 18.7% year-over-year, with a pre-tax loss of $12.3 million compared to a pre-tax income of $0.6 million last year [10][34]. - The Construction segment's revenue decreased to $72.0 million, down 10.2%, with a pre-tax loss of $1.2 million, an improvement from a loss of $4.9 million in the previous year [11][34]. - The Europe segment experienced significant growth, with revenue increasing to $98.1 million, up 44.0%, and a pre-tax income of $5.1 million compared to a loss of $2.3 million last year [12][34]. - The Australia segment's revenue fell to $30.6 million, down 50.1%, with a pre-tax loss of $2.1 million compared to a pre-tax income of $1.4 million last year [13][34]. Inventory and Cash Flow - The company reiterated its target to reduce inventory by $100 million for fiscal 2026, with inventory levels remaining flat at $1.1 billion as of July 31, 2025 [2][14]. - Cash at the end of the second quarter was $32.7 million, with net cash provided by operating activities amounting to $49.9 million, a significant improvement from a net cash used of $47.4 million in the same period last year [14][15]. Future Outlook - The company adjusted its revenue modeling assumptions for fiscal 2026, expecting a decrease in Agriculture segment revenue of 15% to 20%, and an increase in Europe segment revenue of 30% to 40% [17][16]. - The adjusted diluted loss per share guidance was narrowed to a range of ($1.50) to ($2.00) [18][16].

Core Viewpoint - Titan Machinery Inc. will release its financial results for the second quarter on August 28, 2025, followed by an investor conference call [1] Group 1: Financial Results Announcement - The financial results for the second quarter ending July 31, 2025, will be announced on August 28, 2025 [1] - An investor conference call is scheduled for 7:30 a.m. Central time (8:30 a.m. Eastern time) on the same day [1] Group 2: Participation Details - Investors can participate in the live call by dialing (877) 704-4453 from the U.S. or (201) 389-0920 for international callers [2] - A telephone replay will be available approximately three hours after the call and will last until September 28, 2025 [2] Group 3: Webcast Information - A live webcast of the conference call will be available on the Investor Relations section of the company's website [3] - The webcast will be archived for 30 days for later access [3] Group 4: Company Overview - Titan Machinery Inc. was founded in 1980 and is headquartered in West Fargo, North Dakota [4] - The company operates a network of full-service agricultural and construction equipment dealer locations across North America, Europe, and Australia [4] - The network includes U.S. locations in multiple states and international locations in Bulgaria, Germany, Romania, Ukraine, and Australia [4]