Financial Performance - Total revenue for Q3 FY2026 was $644.5 million, a decrease of 5.2% compared to $679.8 million in Q3 FY2025 [8, 27, 29] - Pre-tax income for Q3 FY2026 was $2.8 million [8, 31] - Diluted earnings per share for Q3 FY2026 were $0.05, a decrease of 28.6% [8, 29] - For the first nine months of FY2026, total revenue was $1.7853 billion, down 8.1% from $1.9422 billion in the same period of FY2025 [32, 34, 36] - The company anticipates a loss of $2 to $4 million in Q4 due to the divestiture of dealership operations in Germany [21] Segment Performance - Agriculture segment revenue is expected to be down 15% to 20% for FY26 [12, 45] - Construction segment revenue is expected to be down 5% to 10% for FY26 [16, 45] - Europe segment revenue is expected to be up 35% to 40% for FY26 [21, 45] - Australia segment revenue is expected to be down 20% to 25% for FY26 [26, 45] Balance Sheet - Equipment inventory decreased by $97 million as of October 31, 2025, compared to January 31, 2025 [39] - Used equipment inventory decreased by $96 million [39] - Rental fleet assets decreased to $71 million as of October 31, 2025, from $76 million as of January 31, 2025 [39]

Core Insights - Titan Machinery Inc. achieved a cumulative inventory reduction of $98 million in the first nine months of fiscal 2026 and has increased its inventory reduction target for the full year to $150 million from a previous target of over $100 million [1][2][3] - The company reported a revenue of $644.5 million for the third quarter of fiscal 2026, a decrease from $679.8 million in the same quarter last year [3][36] - Equipment revenue for the third quarter was $459.9 million, down from $495.1 million year-over-year, while parts revenue slightly increased to $122.3 million from $121.1 million [3][36] Financial Performance - Gross profit for the third quarter was $111.0 million, with a gross profit margin of 17.2%, compared to $110.5 million and 16.3% in the same quarter last year [4][36] - Operating expenses rose to $100.5 million, up from $98.8 million year-over-year, resulting in an operating expense as a percentage of revenue of 15.6% compared to 14.5% [5][36] - Net income for the third quarter was $1.2 million, with diluted earnings per share of $0.05, compared to net income of $1.7 million and earnings per share of $0.07 in the prior year [7][36] Segment Analysis - The Agriculture segment reported revenue of $420.9 million, down 12.3% year-over-year, attributed to lower demand driven by reduced commodity prices and high interest rates [8][10] - The Construction segment's revenue decreased to $76.7 million, reflecting a 10.1% decline, primarily due to lower equipment sales [10][36] - The Europe segment saw significant growth, with revenue increasing to $117.0 million from $62.4 million, largely due to EU stimulus programs, resulting in a pre-tax income of $3.5 million compared to a loss in the previous year [11][36] Inventory and Cash Flow - Total inventories decreased by $97.9 million to $1.0 billion as of the end of the third quarter, with equipment inventories down by $96.9 million [13][36] - The company reported net cash provided by operating activities of $83.9 million for the nine months ended October 31, 2025, compared to a net cash used of $56.2 million in the same period last year [14][36] Management Commentary - The CEO highlighted the stronger-than-expected equipment margins and the ongoing inventory optimization efforts, while also noting the anticipated recognition of a non-cash valuation allowance that may increase tax expenses in the fourth quarter [15][36] - The company remains focused on improving performance and positioning itself for better market conditions in fiscal 2027 [15][36] Modeling Assumptions - Updated modeling assumptions for fiscal 2026 indicate that agriculture revenue is expected to decline by 15% to 20%, construction revenue by 5% to 10%, while Europe revenue is projected to increase by 35% to 40% [16][36]

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Core Viewpoint - Titan Machinery Inc. is set to release its financial results for the third quarter ending October 31, 2025, on November 25, 2025, followed by an investor conference call [1]. Company Overview - Titan Machinery Inc. was founded in 1980 and is headquartered in West Fargo, North Dakota. 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 states such as Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, Washington, Wisconsin, and Wyoming. Internationally, it has stores in Bulgaria, Germany, Romania, Ukraine, and Australia [4]. - Titan Machinery represents various CNH Industrial Brands, including Case IH, New Holland Agriculture, Case Construction, New Holland Construction, and CNH Industrial Capital [4]. Investor Participation - Investors can participate in the live conference call by dialing (877) 704-4453 from the U.S. or (201) 389-0920 for international callers. A telephone replay will be available approximately three hours after the call and can be accessed until December 25, 2025 [2]. - A live webcast of the call will also be available on the Investor Relations section of the company's website, with an archive accessible for 30 days [3].

Core Viewpoint - Titan Machinery Inc. is divesting its dealership operations in Germany to optimize its dealership network and enhance returns on invested capital, aligning with CNH Industrial's dual-brand strategy [1][2]. Group 1: Planned Transactions - The divestiture involves two separate asset sale transactions to existing New Holland dealers in Germany [1]. - These transactions are expected to close within the next 120 days, pending customary closing conditions and regulatory approvals [2]. - The company anticipates a pre-tax loss on sale of approximately $3 million to $4 million from these transactions [2]. Group 2: Operational Challenges - Titan Machinery's German operations have faced challenges that negatively impacted returns within its European operating segment [2]. - The company is focusing resources on markets where it can leverage its operational expertise and service network to improve returns for shareholders [2]. Group 3: Company Overview - Titan Machinery Inc. operates a network of full-service agricultural and construction equipment dealer locations across North America, Europe, and Australia [3]. - The company's network includes locations in various U.S. states and international stores in Bulgaria, Germany, Romania, and Ukraine, as well as Australia [3].

Core Insights - The article emphasizes the investment philosophy focused on small cap companies, highlighting the importance of identifying mispriced securities through understanding financial drivers and utilizing DCF model valuation [1]. Group 1: Investment Philosophy - The investment approach is not confined to traditional categories such as value, dividend, or growth investing, but rather considers all prospects of a stock to assess risk-to-reward [1]. Group 2: Market Focus - The investment strategy encompasses markets in the US, Canada, and Europe, indicating a broad geographical focus for potential investment opportunities [1].

[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]