PACCAR(PCAR) - 2025 Q2 - Quarterly Results

Overall Performance and Outlook Q2 2025 Financial Performance PACCAR reported a decline in revenues and net income for Q2 2025 compared to Q2 2024, reflecting a significant year-over-year decrease Q2 2025 vs Q2 2024 Key Financials | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales & Financial Services Revenues | $7.51 billion | $8.77 billion | -14.4% | | Net Income | $723.8 million | $1.12 billion | -35.5% | | Diluted EPS | $1.37 | $2.13 | -35.7% | Q2 2025 Operational & Financial Highlights | Highlight | Value | | :--- | :--- | | Consolidated Net Sales and Revenues | $7.51 billion | | Consolidated Net Income | $723.8 million | | Global Truck Deliveries | 39,300 units | | PACCAR Parts Revenues | $1.72 billion (Record) | | PACCAR Parts Pre-tax Income | $416.5 million | | PACCAR Financial Services Pre-tax Income | $123.2 million | | Cash Generated from Operations | $833.4 million | First Half 2025 Financial Performance PACCAR's first half 2025 net income was $1.23 billion, impacted by a significant after-tax charge from European litigation First Half 2025 Key Financials | Metric | Value | | :--- | :--- | | Net Sales & Financial Services Revenues | $14.95 billion | | Net Income (GAAP) | $1.23 billion | | Diluted EPS (GAAP) | $2.33 | | Adjusted Net Income (Non-GAAP) | $1.49 billion | | Adjusted Diluted EPS (Non-GAAP) | $2.83 | - The first half results were impacted by a $264.5 million after-tax non-recurring charge related to civil litigation in Europe[3] Management Commentary and Outlook Management noted strong divisional performance despite North American market headwinds, continuing investments for future growth - The CEO highlighted strong performance from Peterbilt, Kenworth, DAF, PACCAR Parts, and PACCAR Financial Services[2] - The North American truck market is facing headwinds from economic conditions, tariffs, and a soft truckload market[4] - Customer demand is good in the less-than-truckload and vocational segments, such as construction[4] Business Segment and Market Analysis Global Truck Markets PACCAR provided 2025 industry sales estimates for key global truck markets, maintaining strong North American share and highlighting product innovation U.S. and Canada Market The 2025 U.S. and Canada Class 8 truck market is estimated at 230,000-260,000 units, with Kenworth and Peterbilt achieving 30.4% market share - 2025 U.S. and Canada Class 8 truck industry retail sales are estimated to be in a range of 230,000-260,000 trucks[6] - Kenworth and Peterbilt achieved a 30.4% market share in the first six months of 2025[6] European Market European truck registrations for 2025 are projected at 270,000-300,000 units, with DAF's new models offering a three percent fuel efficiency improvement - 2025 European truck industry registrations (>16-tonne) are estimated to be in a range of 270,000-300,000 vehicles[7] - DAF's 2025 model year trucks have increased fuel efficiency by three percent through innovations in turbo systems, engine valve timing, and aerodynamics[7] South American Market The 2025 South American truck market (>16-tonnes) is estimated at 90,000-100,000 units, with DAF's quality driving customer appreciation - The 2025 South American >16-tonne truck market is estimated to be in the range of 90,000-100,000 units[10] PACCAR Parts PACCAR Parts achieved record Q2 2025 revenues and strong profits, driven by strategic investments and year-over-year growth PACCAR Parts Financial Performance (in millions) | Period | Revenues | Pre-tax Income | | :--- | :--- | :--- | | Q2 2025 | $1,720 (Record) | $416.5 | | Q2 2024 | $1,660 | $413.8 | | H1 2025 | $3,410 | $843.0 | | H1 2024 | $3,340 | $869.6 | - Growth is attributed to investments in 20 global parts distribution centers, transportation solutions like Managed Dealer Inventory, and a growing number of PACCAR trucks in operation[14] PACCAR Financial Services (PFS) PACCAR Financial Services reported strong Q2 and H1 2025 results, with revenue and pre-tax income growth driven by portfolio quality and market improvements PFS Financial Performance (in millions) | Period | Revenues | Pre-tax Income | | :--- | :--- | :--- | | Q2 2025 | $547.7 | $123.2 | | Q2 2024 | $509.8 | $111.2 | | H1 2025 | $1,075.7 | $244.3 | | H1 2024 | $1,019.1 | $225.1 | - PFS has a portfolio of 233,000 trucks and trailers, with total assets of $23.31 billion[16] - The company's A+/A1 credit ratings enable competitive financing and PFS issued $1.84 billion of medium-term notes during the first half of 2025[17] Strategic Initiatives and Investments Product Innovation (Electric Trucks) PACCAR launched its next generation of Kenworth and Peterbilt battery electric trucks, offering enhanced range and aerodynamic refinements - New battery electric trucks launched include the Kenworth T680E, Peterbilt 579EV, Kenworth T880E, and Peterbilt 567EV[18][19] - The new electric trucks have a range of up to 250 miles on a single charge[18] Capital and R&D Investments PACCAR continues significant investments in facilities, products, and technologies, with substantial capital and R&D expenditures projected for 2025 Investment Spending (in millions) | Period | Capital Expenditures | R&D Expenses | | :--- | :--- | :--- | | Q2 2025 | $226.8 | $112.9 | | 2025 Projection | $750 - $800 | $450 - $480 | - Over the past decade, PACCAR has invested $9.0 billion in new and expanded facilities, innovative products, and new technologies[21] Financial Statements Summary Statements of Operations The summary statement of operations indicates a year-over-year decline in revenues and net income for Q2 and H1 2025, with H1 impacted by a litigation charge Q2 2025 vs Q2 2024 Income Statement (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Net Sales and Revenues | $7,510.5 | $8,772.1 | | Total Income Before Income Taxes | $931.9 | $1,460.8 | | Net Income | $723.8 | $1,122.6 | H1 2025 vs H1 2024 Income Statement (in millions) | Line Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total Net Sales and Revenues | $14,952.2 | $17,516.4 | | Total Income Before Income Taxes | $1,575.0 | $2,995.3 | | Net Income | $1,228.9 | $2,317.9 | Condensed Balance Sheets PACCAR's balance sheet as of June 30, 2025, shows strong total assets of $44.1 billion and stockholders' equity of $18.9 billion Balance Sheet Highlights (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and marketable securities | $8,279.7 | $9,649.9 | | Total Assets | $44,094.8 | $43,418.9 | | Total Liabilities | $25,152.2 | $25,912.0 | | Stockholders' Equity | $18,942.6 | $17,506.9 | Condensed Cash Flow Statements PACCAR generated $1.74 billion in cash from operations in H1 2025, a decrease from 2024, with significant cash usage in investing and financing Six Months Ended June 30 Cash Flow (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $1,743.7 | $1,909.0 | | Net Cash Used in Investing Activities | $(1,010.1) | $(1,569.8) | | Net Cash Used in Financing Activities | $(2,425.8) | $(1,579.3) | | Net Decrease in Cash and Cash Equivalents | $(1,510.9) | $(1,310.2) | Segment and Geographic Information The Truck segment experienced significant declines in sales and profit, while Parts saw higher sales but lower profit, and Financial Services grew both H1 2025 Sales and Pretax Profit by Segment (in millions) | Segment | H1 2025 Sales | H1 2025 Pretax Profit | H1 2024 Pretax Profit | | :--- | :--- | :--- | :--- | | Truck | $10,468.9 | $673.7 | $1,718.9 | | Parts | $3,410.8 | $843.0 | $869.6 | | Financial Services | $1,075.7 | $244.3 | $225.1 | H1 2025 vs H1 2024 Geographic Revenue (in millions) | Region | H1 2025 | H1 2024 | | :--- | :--- | :--- | | United States and Canada | $9,375.8 | $11,253.5 | | Europe | $3,239.8 | $3,550.2 | | Other | $2,336.6 | $2,712.7 | H1 2025 vs H1 2024 New Truck Deliveries (Units) | Region | H1 2025 | H1 2024 | | :--- | :--- | :--- | | United States and Canada | 45,200 | 58,200 | | Europe | 21,000 | 23,100 | | Other | 13,200 | 15,200 | | Total | 79,400 | 96,500 | Supplementary Information Reconciliation of GAAP to Non-GAAP Measures PACCAR provides a non-GAAP reconciliation, adjusting for a $264.5 million after-tax charge in Q1 2025 related to European civil litigation - The company recorded an additional pre-tax charge of $350.0 million ($264.5 million after-tax) in Q1 2025 for EC-related claims[39] H1 2025 GAAP to Non-GAAP Reconciliation (in millions, except per share) | Metric | Value | | :--- | :--- | | Net income (GAAP) | $1,228.9 | | EC-related claims, net of taxes | $264.5 | | Adjusted net income (non-GAAP) | $1,493.4 | | Diluted EPS (GAAP) | $2.33 | | EC-related claims, net of taxes (per share) | $0.50 | | Adjusted diluted EPS (non-GAAP) | $2.83 |