Finning reports Q4 and Annual 2025 results

Core Insights - Finning International Inc. reported strong financial performance for 2025, with significant growth in revenue, earnings, and cash flow, driven by focused execution and resilience in various market conditions [3][4]. Financial Performance - Q4 2025 revenue reached $2.7 billion, a 6% increase from Q4 2024, with annual revenue of $10.6 billion, up 7% [6]. - Product support revenue grew 8% to $1.5 billion, marking the seventh consecutive quarter of year-over-year growth [6]. - New equipment sales increased by 9% to $1.0 billion, with a record equipment backlog of $3.1 billion as of December 31, 2025 [6]. - Adjusted EPS for Q4 2025 was $1.00, a 3% increase from $0.97 in Q4 2024 [6]. - Free cash flow from continuing operations was $642 million, a 61% increase compared to Q4 2024 [6]. Operational Highlights - The company achieved an Adjusted ROIC of 19.2%, up 130 basis points from the previous year [6]. - SG&A margin was reduced to 15.4%, despite a $21 million long-term incentive plan expense impacting margins [6]. - Adjusted EBIT for Q4 2025 was $209 million, with an Adjusted EBIT margin of 7.8%, down 60 basis points from Q4 2024 [6]. Regional Performance - South America operations saw a 5% revenue increase, driven by strong construction and power & energy sectors, while mining sector sales were lower [12]. - Canada operations reported steady activity levels in mining and power & energy sectors, with expectations for increased construction activity [22][23]. - UK & Ireland operations faced soft demand in construction but anticipated growth in power & energy due to strong quoting activity [25]. Market Outlook - The company is optimistic about growth opportunities in 2026, particularly in construction equipment as political and economic conditions improve [4][27]. - In South America, demand for mining equipment is expected to remain strong, supported by high copper prices and capital investments [18][21]. - The company plans to invest over $350 million in net capital and rental fleet expenditures in 2026 to capture market opportunities [28].