Q1 2025 Ag Equipment Manufacturer Results Highlights and Analysis

Index

1. Financial Snapshot

2. Key Takeaways by Company

3. Themes

   i. Hitting the Bottom?

   ii. Inventory and Production Coming Down

   iii. Precision Ag Insights

   iv. LatAm, Especially Brazil, a Bright Spot

   v. Tariffs

4. Company Overviews

   a. John Deere

   b. CNH Industrial

   c. AGCO

   d. Valmont

About Upstream Ag Professional Agribusiness Breakdowns

Each quarter in Upstream Ag Professional, we shrewdly analyze publicly traded agribusiness earnings, cutting through the noise to highlight the key takeaways that matter for those of us working in the agriculture industry.

By breaking down earnings results and executive commentary, I provide the strategic insights agribusiness professionals need to stay ahead of their competitors, their suppliers and ultimately their customers.

The below is just one component— more deep dives on the most influential agribusinesses, their market positioning, and strategic initiatives will be published as results become available.

If you want to satiate your curiosity and be the best-informed in the industry, you’re in the right place.

Want to dive deeper?

Access the financials I have compiled to be able to effectively look at major agribusinesses in detail here: Agribusiness Financial Data Q4 2022 to Q4 2024 (Excel Workbooks)

Other Related Breakdowns:

Q1 2025 Crop Protection & Seed Company Results: Themes, Highlights and Analysis - Upstream Ag Professional

Q1 2025 Fertilizer Manufacturers Results Highlights and Analysis - Upstream Ag Professional

What Agribusiness Executives Are Saying About Tariffs Right Now (May 2025) - Upstream Ag Professional

Financial Snapshot

Key Takeaways by Manufacturer

John Deere Key Takeaways

• Production & Precision Ag sales fell 21% YoY to $5.2B; operating margin declined from 25.1% to 22% due to lower large equipment turnover.

• Precision ag recurring revenue model is scaling: 10,000+ orders for “Precision Essentials” in H1—exceeding all of FY2024.

• Renewal rate target set at 70% for first-year subscriptions with Precision Essentials, ~66% of eligible customers have renewed so far, with more expected.

• See & Spray adoption accelerating: Over 1,000 new orders in 2025 (vs. a few hundred in 2024), with stronger in-season utilization and repeat purchases.

• Engaged acres on Deere’s digital platform rose 15% YoY to 475M+, with “highly engaged” acres up 25%, now ~30% of total.

CNH Industrial Key Takeaways

• Agriculture segment net sales fell 23% to $2.58 billion, with adjusted EBIT down 64% to $139 million and margins halving to 5.4%

• North America tractor sales fell 24% for larger tractors; combine sales dropped a sharp 51%. In contrast for South America, tractor and combine demand grew by 10% and 1% respectively.

• On the Finance Business Segment, delinquencies were higher, with continued pressure in South America, particularly in Brazil and growing delinquencies in North America.

• Q1 2025 production hours for ag were down 43%. Large ag was down 36% versus 2024 and 50% versus 2023.

• Inventory is $1 billion lower since Q1 2024, with the largest CNH dealer (Titan Machinery) having its inventory down drastically over the last two quarters.

AGCO Key Takeaways

• Revenues down 30% in the quarter with net sales of $2.1 billion.

• North America had a decline of 34%.

• Operating margins were 2.4% for the quarter.

• Operating income was down over 80%

• Machine production was down 33%, with expectations for the remainder of 2025 to be down between 15% and 20%.

• AGCO still expects 2025 to be the bottom of the cycle.

• AGCO has already implemented tariff related price increases for its parts products and is considering similar actions for equipment. However, it anticipates that raising equipment prices could further dampen demand in the North American market.

• Other tariff strategies include the use of bonded warehouses and supplier management.

• PTx Trimble sales are down similar to equipment, but was profitable in the quarter and the AGCO executive team remains optimistic about the future of the segment.

Valmont Key Takeaways

• Agriculture sales grew 3.3% YoY to $267.3M, driven by strong international demand, especially in EMEA and Brazil offsetting North American weakness.

• Operating income declined 11.6% to $36.2M, with margins tightening to 13.6%, largely due to a greater mix of lower-margin international projects and softer U.S. volumes.

• New e-commerce platform launched, aimed at boosting aftermarket parts revenue which has been shown to be a high-margin, recurring busines for them.

• Early success with AgSense 365, Valmont’s new agtech platform, which is driving precision irrigation adoption and receiving strong customer feedback.

• Tariffs cost $3M in Q1, but Valmont expects to be cost-neutral for full-year 2025 via pricing and operational adjustments. Mitigation tactics include greater use of U.S.-sourced steel, domestic galvanizing capacity expansion, and localized manufacturing via the "Local for Local" strategy.

Themes

1. Hitting the Bottom?

During their investor call, CNH shared an image of the commodity cycle illustrating the range of outcomes by year:

On their results calls, AGCO and CNH stated that they believe 2025 will mark the bottom of the cycle.

The numbers overall were down for all players:

John Deere’s Production and Precision Ag revenue fell 21% YoY to $5.2 billion, with operating profit down 30% to $1.15 billion and margins dropping from 25.1% to 22.0%.

AGCO had a 30% YoY decline for Q1 2025, with sales totaling $2.1 billion. North America led the downturn with a 34% drop, while company-wide operating income fell over 80%, resulting in tight operating margins of just 2.4%.

CNH’s Agriculture segment sales declined 23% to $2.58 billion in the quarter, with EBIT down 64% to $139 million and margins dropping by half to 5.4%. In North America, large tractor sales fell 24% and combine sales plunged 51%.

2. Inventory and Production Coming Down

Inventory relative to Q1 2024 is down for all of the OEMs:

OEMs are slowing manufacturing and under producing:

CNH Executives stated:

On production in H2:

AGCO cut production hours 33% YoY in Q1 to pull down channel inventory with FY 2025 projected to be down 15%-20%:

3. Precision Ag Insights

John Deere shared some details on uptake of their Solutions as a Service initiative:

How about retention? That is one of the most important considerations to watch as Deere continues down this recurring revenue path. It’s still early, so they have seemingly set a lower retention target than they would want long term:

Precision Essentials is one of the enabling technologies, which can lay a foundation for the higher value segments like autonomy and See & Spray.

Deere alluded to their flexibility in managing the pricing, and things like retention, by talking about how they will be looking at bundling for pricing various Solutions together:

See & Spray Uptake

In 2024, Deere had a few hundred units in the field and did over 1 million acres. Seeing 3-4x more units, and likely seeing some of those units expand usage means we could see 3-4 million+ acres for John Deere in 2025.

Digital Solutions Growth

AGCO shared did not share a lot on PTx Trimble, but did state that sales are down similar to equipment, and was profitable in the quarter. The AGCO executive team remains optimistic about the future of the segment.

They do expect improving margins for the FY 2025.

Priorities for PTx include:

There were concerns with a loading the channel with inventory before the PTx deal, which lead to tough sell through given the market conditions. AGCO thinks that is now being full worked through:

For more detail on the PTx impairment charge, check out FY 2024 Ag Equipment Manufacturer Earnings Highlights and Analysis.

CNH shared very little during their Q1 results, however, they shared multiple details during their recent Investor Day.

• CNH is spending about $230 million annually on precision tech R&D. The R&D expenditure is contributing to 15 new tractor launches, 10 combine launches, 19 crop production launches, and over 30 precision technology releases between now and the end of 2027.

• CNH produces ~80% of its Precision Tech stack in-house, and plans to reach 90% by 2030, making them a very integrated player.

  

• They shared that effectively 100% of large machines do have factory fits for guidance, connectivity and display:

  

• In 2024, 5.6% of their revenue was precision related. Which means, they had $784 million in precision technology revenue in 2024. For context, AGCO’s PTx Trimble sold about $850 million in 2024 with ambitions to hit $2 billion by 2030.

  CNH is expecting precision technology to become 10% of total revenue by 2030 with a 50-75 basis point increase in operating margin by 2030.

  Assuming some overall revenue growth, that means more than a doubling in precision tech revenue by 2030 towards $~1.5 billion.
  

  

• CNH has shared sparing details of their Precision Spraying approach until recently. They did share some incremental details

  

4. LatAm, Especially Brazil, a Bright Spot

AGCO is seeing positive order growth in Brazil:

CNH highlighted stabilizing trends in Brazil, despite a difficult 2024:

Deere sees improving FX tailwinds and expects Brazil to strengthen in the second half.

5. Tariffs

John Deere - Faces a ~$500M tariff hit in FY2025 with limited short-term pricing flexibility due to priced order books. Plans to look at adjusting pricing for 2026 models and is pursuing USMCA certifications to reduce future exposure. Most components (76%) and complete goods (79%) are U.S.-sourced, providing partial insulation.

CNH Industrial - Sources ~80% of U.S. components from USMCA regions with remaining exposure (mainly Europe and China) being managed through supplier cost-sharing, modest pricing adjustments, and sourcing shifts. Worst-case scenario seen as only a ~5% hit to North American retail demand.

AGCO - Largest tariff exposure stems from EU-sourced products (25% of North American revenue). Tariff costs are being spread evenly across the full product portfolio rather than assigned to specific models. Mitigation efforts include bonded warehouses, supplier negotiations, and selective price increases. Final assembly location changes are on hold until volatility stabilizes.

For more on tariffs, check out What Agribusiness Executives Are Saying About Tariffs Right Now (May 2025)

Companies

a. Deere & Co. Q2 2025 Results - Deere

Production & Precision Ag

• Sales fell 21% YoY to $5.2 billion, with operating profit down 30% to $1.15 billion and margins dropping from 25.1% to 22.0%.

• The biggest drag came from volume declines ($610M hit), indicating slower large equipment turnover— a signal of tightening farmer capital budgets or delayed fleet upgrades.

• Currency headwinds were notable (-$92M), but Deere offset some pressure through price and lower production costs.

Deere expects weaker margins throughout the remainder of 2025:

Tariffs

Deere expects a pre-tax tariff impact in fiscal year 2025 of just over $500 million should these tariff levels continue throughout the remainder of the fiscal year. They said they see little opportunity for price management to impact fiscal 2025, given where order books for most product lines are for the year.

They also stated that they are contemplating tariff impacts for product cost structure as they looked to model year 2026 pricing.

Deere shared a sourcing image illustrating where the source components and complete products:

Deere went on to state some other actions they are taking:

b. CNH Industrial Q1 2025 Results - CNH Industrial

Overview

CNH Industrial reported a down first quarter of 2025, with consolidated revenues down 21% to $3.83 billion and adjusted net income dropping 66% year-over-year to $132 million. The decline was driven by lower equipment demand, dealer destocking, and global trade uncertainty. Agriculture segment net sales fell 23% to $2.58 billion, with adjusted EBIT down 64% to $139 million and margins halving to 5.4%. Volume and mix were the largest driver of performance. Pricing was slightly negative in the quarter as incentives for dealers to retail aged and used inventory were increased.

Margin Pressure

Agriculture adjusted EBIT margin dropped to 5.4% (from 11.5%), driven by lower shipments, though partially offset by improved manufacturing and SG&A discipline​.

Tractor Sales by Type, North America Weakness

In North America, tractor sales fell 12% for units under 140 HP and 24% for larger tractors; combine sales dropped a sharp 51%. In contrast for South America, tractor and combine demand grew by 10% and 1% respectively.

Has the equipment cycle hit bottom? CNH executives suggest things shouldn’t get much lower, but still no expectation for growth until 2026:

At an industry level, the North American ag machinery market was already forecasted to reach cyclical trough levels in 2025, which implies that the demand levels should not get much lower. However, lower farm income or restricted access to financing could drive demand lower or drag out the cycle recovery. We will reevaluate a narrower range of potential outcomes later this year.

Financial Services

One notable chart is in the bottom right on delinquencies which is a useful indicator of general farm financial health:

Brazil has been challenged, but the numbers are growing in North America, too:

Delinquencies are higher, with continued pressure in South America, particularly in Brazil and growing delinquencies in North America. This is in line with what we expect, while in a downturn, and we’re focusing our efforts on collections.

Tariffs

CNH shared the most detail on tariff impacts for their business:

The CNH supply chain footprint is designed to balance cost center of product excellence, local content and proximity to our key markets. As you can see in the pie chart, last year, our U.S. plant sourced 70% of their components from U.S. suppliers with about an additional 10% coming from Mexico and Canada. We have been working with our suppliers to ensure that we have USMCA documentation for those parts. That leaves the remaining 20% of components sourced mainly from Europe and China. Also keep in mind that U.S. plants export to other regions, mainly to APAC and EMEA.

They laid out that they will look to mitigate tariffs through:

1. working with suppliers

2. exploring sourcing options

3. engaging with trade groups

4. modest price adjustments.

Tariff Considerations

What we are doing, we thoughtfully go through the bill of material, how these tariffs do apply to the various different aspects of the machine. We then thoughtfully go through the list of suppliers and the sources of supply seek for a reasonable sharing of those tariffs, and then remainder is rolled up into a price increase on the machine, on the retail price, on the wholesale price, and then eventually on the retail price here in the U.S. So that is how it’s done. But we also have a very thorough look at the inventory levels of those machines in the country.

CNH shared the implication based on various assumptions, which as they alluded to can be difficult to make, but it provides good clarity on how they feel. A ~worst case scenario only impacts retail demand by about 5% in North America in their minds:

CNH is working to manage the implications with suppliers:

On the sharing with suppliers, obviously, we are working very actively with our supply base on the impact from this tariff exposure from the exposure that is certain at this point, the 10% for everyone and obviously, also the exposure on China and certain materials like steel, but that is, from our point of view, pretty logical to approach suppliers and that is also common in the industry to approach suppliers to have a sharing of those cost increases as we look through this phase of uncertainty, which will trigger, obviously resourcing and probably also most likely relocation of certain production facilities of suppliers into countries with more favorable tariff exposure, including obviously, the United States.

CNH sees themselves as positioned well given tariffs:

We may see a shift in commodity demand away from the U.S. and towards other regions such as Brazil, like we saw with tariffs 1.0. We are uniquely positioned to benefit from that kind of shift because CNH is the most geographically balanced of the major ag OEMs. Beyond this global rebalancing of commodity trade and farm equipment supply, please allow me to stress that we are confident that the U.S. administration will define a support package that is not just short-term, but also provides mid- to long-term certainty for our farmers in our lands of the United States of America.

I think from a U.S. point of view, I think we are more or less exposed similar to the larger competitor in the United States when it comes to these tariffs while I think, obviously, being attached to the European production, predominantly, that is not exactly helpful at this point in time.

They also do not see tractors being priced out by tariffs:

All machines, all equipment that we import to the U.S. still makes very much sense to be imported and to be made. The 10% flat on everybody does not change that attractiveness of the product.

c. AGCO Q1 2025 Results - AGCO

AGCO reported a 30% year-over-year decline in Q1 2025 net sales to $2.1 billion. Excluding last year's Grain & Protein results, sales declined by about 25%. Operating income was down over 80% at less than $50 million.

Revenue declines were sharpest in North America (-34.2%) and Asia-Pacific (-36.0%), with regional operating margins under pressure, including a -5.0% margin in North America. Europe/Middle East held up better with an 11.6% margin despite a 22.1% sales decline. Consolidated operating margins were 2.4% on a reported basis.

Equipment markets remain volatile due to high inventory levels, tariffs, lower farmer sentiment, and declining combine and high-horsepower tractor demand—particularly acute in North America where combine unit sales fell 46%.

Production Hours and Inventory

The company reduced production hours by 33% year-over-year to manage inventory.

We are projecting 2025 production hours between 15% and 20% lower than 2024, with the North America region showing the biggest decline. Our plan remains front loaded and aggressive to get inventory rightsized quickly. Our current outlook for 2025 assumes production in North America and South America will be less than retail demand.

Similarly in North America, we further reduced the units on hand at dealers by approximately 1% in total from quarter four 2024 levels. This is still approximately 8.5 months of supply versus our six-month target. However this modest change is reflective of good momentum in large ag where we reduced inventory by around two months and around 7% on a unit basis. This solid progress was offset by the normal seasonal position for small ag equipment entering the peak selling season for dealers. Given the continued challenging outlook in 2025, we currently expect to underproduce to retail demand into the third quarter.

2025 Outlook

The company is projecting ~$9.6 billion in sales for 2025.

AGCO stated the same view as CNH on the market trough:

We are still projecting 2025 to be the bottom of the trough.

Tariffs

AGCO expects price increases and has already implemented some:

We have assumed some modest price increases. We have already had some in effect for our parts products. Those have already been in effect. We are contemplating things on equipment. In that though, we have also assumed that to the extent we do take pricing actions there would be an incremental slowdown to the North American business.

Other actions:

We talked about potentially implementing some prices for equipment. We already have prices in effect for parts. As I've mentioned on other calls, we are looking to mitigate some of these costs where possible. Some of the products that we brought in from Europe we're looking at things like bonded warehouses now to minimize the price effects. And obviously, we're having active discussions with our suppliers as to how do we help mitigate the costs we have to absorb in actions that they can take to try to dampen the overall impact to AGCO.

Eric Hansotia provided good context on how they think about managing tariffs across the product portfolio and managing manufacturing location:

Just because one product from one country gets a tariff, that doesn't mean you can put all of that load on that one product coming from that 1 country. It gets that machine out of whack in the marketplace. So instead, we're looking at it more strategically and saying, what are the total costs the company is incurring across all components and all machines that we export to a new market and then evaluating what can we do about that cost.

Number two, how much can our suppliers, either by us resourcing or working with them to take cost out, how much can be absorbed in our supply base? And then when we're all done, it's probably going to be a bit of a more broad-based pricing strategy versus the one model that originated the cost increase. And that's because you need to keep your overall portfolio essentially in line with the market.

So all of the models within a given brand but also from one brand to the next, you want to keep them matched with the value proposition that they deliver and the position they have in the market. So it will be more likely spread across the overall portfolio versus the models that originated the issue.

We look every year at our overall footprint and understand what market demand is looking like and where is the best place to produce as exchange rates move and the volumes change and things like that.

To do final assembly, it's a little bit more flexible. We've got options for different levels of how much vertical integration we would potentially do. We've got the sites selected and understand what the impact of the supply base. But right now we're waiting until things stabilize. We don't anticipate to make any real changes in manufacturing locations in the short-term. Now we're working with our suppliers to move component production around because that's a little bit more flexible. But final production is something that we're holding off until things stabilize further.

Fendt in North America

AGCO has made Fendt a key effort for North and South America, and they say things are working well for them so far and is expected to continue:

d. Valmont Q1 2025 Results - Valmont

Valmont Industries reported steady performance in their Q1 2025 results, with Agriculture segment sales increasing 3.3% year-over-year to $267.3 million, representing 27.4% of total company sales.

While North America continued to experience softness in irrigation equipment demand, strong international performance offset the weakness, driven by robust growth in the Europe, Middle East, and Africa (EMEA) region and a stabilizing market in Brazil. Despite the topline growth, Agriculture operating income declined 11.6% to $36.2 million, with margins tightening to 13.6% due to a greater mix of large international projects and lower North American volumes.

Valmont reaffirmed its 2025 Agriculture sales outlook between $980 million and $1.04 billion, expecting international strength to continue playing a key role in supporting results through the balance of the year.

E-Commerce

Valmont talked about a new e-commerce platform driving aftermarket parts & AgSense 365 driving tech adoption.

Executives share the following quote:

Tariffs

Valmont acknowledged that tariffs had a $3 million impact in Q1 2025, but emphasized confidence in mitigating those costs for the remainder of the year:

The company expects to be cost-neutral on a dollar basis for full-year 2025, across both its Infrastructure and Agriculture segments, through a mix of pricing strategies and operational adjustments:

Specifically for Agriculture, which is heavily international, Valmont implemented several mitigation actions:

• Increased use of U.S.-sourced steel.

• Shifted coatings work to U.S.-based galvanizing facilities.

• Raised prices in response to increased tariff-driven costs:

Additionally, the company highlighted its “Local for Local” strategy as a long-term buffer against tariff risks. This includes manufacturing agricultural products closer to the end markets they serve:

The company also confirmed that their Mexico operations remain USMCA compliant.

CFO Thomas Liguori stated that even though the first quarter bore the brunt of the tariff costs, they plan to recover those costs in the remaining quarters.