Fourth Quarter 2025 Earnings Teleconference February 5th, 2026 CONTENTS 2025 Summary Q4 2025 Summary 2026 Guidance Q4 2025 Supplemental Information Appendix 2 Disclosure Regarding Forward-Looking Statements Information provided in this presentation that is not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our forecasts, guidance, preliminary results, expectations, hopes, beliefs and intentions on st ...

Core Insights - Cummins Inc. reported earnings per share (EPS) of $3.86, missing the estimated $4.83, but exceeded revenue expectations with $8.32 billion against an estimate of $7.99 billion, driven by strong performance in the Power Systems and Distribution segments due to rising demand for backup power solutions for data centers [2][6] - The company has implemented effective cost management strategies to mitigate the impact of a downturn in the North American truck market, helping to maintain profitability [3][6] - Cummins recorded non-cash charges related to its electrolyzer business, which may have affected its earnings [4] Financial Metrics - The company has a price-to-earnings (P/E) ratio of approximately 21.92, indicating favorable market valuation of its earnings [4] - The price-to-sales ratio is about 1.91, and the enterprise value to sales ratio is 2.10, reflecting the market's valuation of its revenue and total value [4] - Cummins has an earnings yield of about 4.56%, a debt-to-equity ratio of approximately 0.74, and a current ratio of about 1.64, indicating a balanced approach to financing and strong ability to cover short-term liabilities [5]

Core Insights - The article discusses the journey towards financial independence through dividend growth investing, emphasizing the importance of passive income exceeding expenses [1]. Group 1 - The author has been investing since September 2017 and has a long-standing interest in dividend investing since 2009 [1]. - The blog "Kody's Dividends" documents the author's path to financial independence using dividend growth investing as a strategy [1]. - The author expresses gratitude for the blog's role in connecting with the Seeking Alpha community as an analyst [1].

Company Overview - Cummins Inc. has a market cap of $55.8 billion and is a global leader in designing, manufacturing, and distributing engines and power solutions, operating through five segments: Engine, Distribution, Components, Power Systems, and Accelera [1] - The company serves OEMs, distributors, and dealers worldwide, delivering innovative solutions across transportation, industrial, and energy markets [2] Stock Performance - Cummins shares have decreased marginally from a 52-week high of $413.52, but have surged 27.2% over the past three months, outperforming the Dow Jones Industrials Average's 7.5% gain during the same period [3] - Year-to-date, CMI stock is up 18.1%, compared to DOWI's 8.3% return, and has climbed 40.3% over the past 52 weeks, while DOWI increased by 12.7% [4] Recent Earnings - On August 5, Cummins reported Q2 2025 earnings of $6.43 per share and revenue of $8.6 billion, exceeding analyst estimates, with growth driven by a 19% increase in its Power Systems segment to $1.89 billion, fueled by strong demand for power generation products [5] Competitive Position - CMI stock has outperformed its rival AMETEK, Inc., which has seen a 5.5% increase year-to-date and a 15.1% increase over the past 52 weeks [6] - Analysts maintain a cautiously optimistic outlook for Cummins, with a consensus rating of "Moderate Buy" from 21 analysts and a mean price target of $415.06, indicating a slight premium to current levels [6]

Financial Performance - Cummins Inc reported Q2 2025 revenue of $8643 million, a decrease of 2% compared to Q2 2024[9, 13] - The company's EBITDA for Q2 2025 was $1587 million, representing 184% of sales[9, 13] - Net income for Q2 2025 reached $890 million, with a diluted EPS of $643[9] Segment Performance - Engine segment revenue decreased by 8% to $2899 million due to lower On-Highway demand in North America[13, 22] - Components segment sales declined by 9% to $2705 million, also driven by lower On-Highway demand in North America[13, 25] - Distribution segment experienced a 7% increase in sales, reaching $3041 million, fueled by higher demand for power generation products in North America[13, 28] - Power Systems segment saw a significant 19% revenue increase to $1889 million, primarily due to increased power generation demand[13, 31] - Accelera segment reported sales of $105 million, a decrease of 5%, with an EBITDA loss of $100 million[13, 34] Additional Information - Operating cash flow for Q2 2025 was $785 million[39]