With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

World's Most Admired Companies

Industries included in the sector are electrical equipment and industrial machinery.

Fortune Sector Leaders: Industrials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-331-AGCO

Known for its tractor lines, such as Challenger and Fendt, the company sells a wide array of farming equipment such as combine harvesters and grain storage.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-350-AGCO

AGCO manufactures and distributes agricultural equipment, including grain storage structures, tractors, and replacement parts.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Sector

Industry

Current All-Star Rank

Previous All-Star Rank

Industry Rank

Previous Industry Rank

Overall Score

Innovation

People Management

Use of Corporate Assets

Social Responsibility

Quality of Management

Financial Soundness

Long-Term Investment Value

Quality of Products/Services

Global Competitiveness

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

AGCO Corporation is a manufacturer of agricultural equipment and machinery. Founded in 1990, AGCO provides a range of agricultural equipment, including tractors, combines, and seeding and planting equipment. The company markets its products under the Fendt, Massey Ferguson, PTx, and Valtra brands.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

AGCO (AGCO): Company Profile, Stock Price, News, Rankings

legacy

AGCO

agco

Please note this event is being recorded.

I would now like to turn the conference over to Greg Peterson, AGCO Head of Investor Relations. Please go ahead.

Thanks, and good morning. Welcome to those of you joining us for AGCO's first quarter twenty twenty five earnings call. We will refer to a slide presentation this morning that's posted to our website at www.agcucorp.com. The non GAAP measures used in the slide presentation are reconciled to GAAP measures in the appendix of that presentation. We will make forward looking statements this morning, including statements about our strategic plans and initiatives as well as their financial impacts.

We'll discuss demand, product development and capital expenditure plans and timing of those plans and our expectations concerning the costs and benefits of those plans and the timing of those benefits. We'll also cover revenue, crop production and farm income, production levels, price levels, margins, earnings, operating income, cash flow, engineering expense, tax rates, and other financial metrics. All of these are subject to risks that could cause actual results to differ materially from those suggested by the statements. These risks include, but are not limited to, adverse developments in the agricultural industry, supply chain disruption, inflation, tariffs, weather, commodity prices, changes in product demand, the possible failure to develop new and improved products on time, including premium technology and smart farming solutions within budget and with the expected performance and price benefits difficulties in integrating the PTX Trimble business in a manner that would produce the expected financial results introduction of new or improved products by our competitors and reductions in pricing by them, war in The Ukraine, difficulties in integrating acquired businesses, and in completing expansion and modernization plans on time and in a manner that produces the expected financial results and adverse changes in the financial and foreign exchange markets.

Actual results could differ materially from those suggested in these statements. Further information concerning these and other risks is included in filings with the Securities and Exchange Commission, including its Form 10 ks for the year ended 12/31/2024. PACCO disclaims any obligations to update any forward looking statements, as required by law. We will make a replay of this call available on our corporate website later today. On the call with me this morning is Eric Ansodia, our Chairman, President and Chief Executive Officer and Damon Adia, our Senior Vice President and Chief Financial Officer.

Thanks, Greg, and good morning to everyone on the call. I'm pleased to announce AGCO delivered solid results in the first quarter in the midst of a very challenging industry and an uncertain and evolving trade environment. We achieved over $2,000,000,000 in net sales, down approximately 30% compared to quarter one twenty twenty four. The lower net sales are a result of continued soft demand in the ag market, coupled with our efforts to destock dealer inventories as well as the impact of the divestiture of the grain and protein business.

Excluding last year's grain and protein results, sales declined by about 25%. Consolidated operating margins were 2.4% on a reported basis and 4.1% on an adjusted basis, reflecting decremental margins in the low to mid-twenty percent range. This reflects the strong performance from our teams around the world. They are executing on our sales plans as well as on the restructuring actions. We achieved these decremental margins despite a 33% reduction in production hours versus quarter one twenty twenty four as we look to better align dealer inventories.

We've made headway lowering both working capital and dealer inventories, which were down across all regions. Our working capital progress showed up in our cash usage for the quarter, which was significantly improved compared to the first quarter of twenty twenty four. Sentiment in Europe, as measured by the CEMA Index, is on an upward trend. Europe currently represents the majority of AGCO sales and should help mitigate the adverse impact of The U. S.

Trade policy on our financials. Geopolitical uncertainties and trade friction have dampened US Farmer sentiment recently, and as a result, demand for machinery was lower in the quarter than we had expected. Despite higher net farm income forecasts related to government aid, margins for US Farmers remain tight due to high input costs and reduced export demand. On the flip side, South American farmers are expected to expand global share in key commodities over the next year due to trade policies. Our top priority during the geopolitical uncertainty is to take care of our farmers.

We want to be there to help them be more productive and more profitable by leveraging our industry leading solutions. We will continue to monitor the rapidly changing tariff policies and implement pricing actions or supply chain adjustments where it makes sense and is feasible. AGCO continues to focus on its three high margin growth levers by investing in key strategic markets and products, including smart farming solutions and enhanced digital capabilities to help deliver more resilient and higher earnings across the ag cycle. Our financials continue to be weighted toward the second half of the year as we expect the market to find bottom and start recovering along with optimizing dealer inventories. Slide four details industry unit retail sales by region for quarter one twenty twenty five.

Global industry retail sales of farm equipment remained challenged in North America and Europe with some early signs of recovery in Brazil. In Western Europe, industry retail tractor sales decreased 17% during the first three months of twenty twenty five compared to the first three months of twenty twenty four. You'll recall that last year at this time, we were still seeing relatively strong demand. Industry demand is expected to remain soft in 2025 as lower income levels pressure demand from arable farmers, while healthy demand from dairy and livestock producers is expected to mitigate some of the decline. North America industry retail sales decreased 14% during the first three months compared to the first three months of twenty twenty four.

Sales declines were relatively consistent across the horsepower categories, with higher horsepower categories declining more in recent months. Combine unit sales were down 46% compared to the same period in 2024. Uncertain demand for grain exports and higher input costs are expected to pressure industry demand in 2025, leading to weaker North American sales compared to 2024, particularly in large equipment. Brazil industry sales increased 11% during the first three months of twenty twenty five compared to the first three months of twenty twenty four, primarily in the smaller tractor categories. While The US may face reduced market access for key exports, Brazil is likely to ship more to China, which should help the industry recover faster.

Despite record soybean harvests and potential trade benefits, we haven't seen meaningful improved demand for larger equipment yet. If increased trade benefits, farm economics, we could see improved demand later this year. For now, we expect industry demand in Brazil to improve modestly in 2025. Regardless of the near term trade environment, AGCO will benefit from the long term growth of the agricultural equipment segment, thanks to market expansion stemming from population growth and a middle class with diets that consist of greater amounts of protein. Our tech stack has been evolving significantly over the past few years and allows us to provide farmers with the differentiated precision ag solutions needed to raise yields and meet the world's growing agricultural needs.

AGCO's factory production hours are shown on slide five. To improve comparability, we have eliminated grain and protein production hours from the twenty twenty four hours shown here. Significant production cuts were made in all regions in quarter one twenty twenty five, with the biggest reductions occurring in North And South America. Our production hours were down approximately 33% in quarter one twenty twenty five versus quarter one twenty twenty four. We remain laser focused on reducing dealer inventories as quickly as possible in 2025 given the current soft demand environment and elevated dealer inventory levels.

As I mentioned earlier, we have made progress in destocking the dealer channel in the first quarter, but still have work to do, primarily in North America and South America. We are projecting 2025 production hours between 1520% 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. Diving into regional breakdown, in Europe, Dealer inventory reduced modestly to just under four months, which is in line with our target.

Fent is still below this average, and Massey Ferguson and Valtra is slightly above. Our near target dealer inventory level in Europe remains a positive for AGCO, given significant exposure to this region. In South America, we reduced the number of units on hand at dealers by 7% from the quarter four twenty twenty four level, reducing the months of supply from around five months to approximately four. Given the forward outlook, this is still above our targeted level of three months. We still anticipate to underproduce relative to retail demand in the second quarter to further reduce dealer inventory levels.

Similarly, in North America, we further reduced the units on hand at dealers by approximately 1% in total from quarter four twenty twenty four levels. This is still approximately eight point five 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.

Moving to slide six, where you'll see our three high margin growth levers aimed at improving our mid cycle operating margins to our new target of 14% to 15% by 2029 and outgrowing the industry by 4% to five percent annually. This demonstrates we are a much stronger company that has less variability throughout the business cycle, higher mid cycle, but also higher highs and higher lows. To reiterate our 2029 growth lever targets we discussed at our analyst meeting last December, number one, the globalization and full line product rollout of our FENT brand, where we now expect North And South America FENT revenues to reach $1,700,000,000 number two, growing our precision ag sales to $2,000,000,000 globally and number three, focusing on accelerating our global parts business and increasing the market share of Genuine AGCO parts to achieve approximately $2,300,000,000 in global sales. AGCO's continued strong investment in R and D has been recognized by numerous global organizations with awards and illustrates how we innovate to put farmers first. On slide seven, you'll see a few of the products that have won prestigious awards recently, each aimed to help farmers improve their profitability through lower costs or increased yields while also focusing on the ease of use and operator comfort.

The first is our PTX Trimble OutRun retrofit autonomy kit, which was awarded the esteemed Davidson Prize for the absolute most innovative products of the year. OutRun is the first commercially available autonomous retrofit grain cart solution on the market and is recognized for its ability to help farmers maximize yield and combat the labor shortage many farmers are facing around the world. This is just the first of several retrofit autonomous solutions being developed by the PTX team. The Valtra S series, which was the brand's flagship product, has won three major design awards in just a few months since launch: a Good Design Award, an IF Design Award, and now the prestigious Red Dot Award for product design. This hat trick has never before been achieved by any tractor brand.

Red Dot judges were so impressed with the S Series design and attention to user experience that they awarded the tractor the Red Dot best of the best award. This special recognition is the highest distinction in the competition and is only awarded to truly pioneering designs. Finally, the Massey Ferguson five m series tractor was awarded with its own Red Dot Award for product design. This affordable and versatile tractor was recognized by judges for its straightforward and accessible features, high performance and efficiency with the best value for price. I want to take a moment to thank the teams that earned these awards, helping AGCO deliver on our vision of being farmers' trusted partner for industry leading smart farming solutions.

Now I'll hand it over to Damon to walk you through some of the financials for the quarter.

Thank you, Eric, and good morning, everyone. Slide eight provides an overview of regional net sales performance for the first quarter. Net sales were down approximately 25% in the first quarter compared to the first quarter of twenty twenty four when excluding the negative effect of currency translation and the positive impact of acquisitions. For comparison purposes, the impact of the divestiture of the grain and protein business, which was approximately $200,000,000 in Q1 of twenty twenty four, has also been excluded. Pricing in the quarter was roughly flat compared to the first quarter of twenty twenty four.

Positive pricing in North America mostly offset negative pricing in South America and in Europe. By region, the Europe Middle East segment reported sales down roughly 23% in the quarter compared to the strong results in the same period in 2024, excluding the impact of unfavorable currency translation and favorable impact of acquisitions. Sales were lower across most of the Western European markets, partially offset by growth in Spain and Eastern Europe. The products showing the most significant declines were high horsepower and mid range tractors, as well as hay equipment. South American net sales decreased approximately 6%, excluding the impact of unfavorable currency translation and the favorable impact of acquisitions.

The market for larger equipment continues to be challenged, and we continue to under produce relative to retail demand. Lower sales of high horsepower tractors and planters accounted for most of the decline. Net sales in the North American region decreased approximately 34%, excluding the impact of unfavorable currency translation and the favorable impacts of acquisitions. Softer industry sales and underproduction relative to end market demand contributed to lower sales. High horsepower tractors, sprayers, and combines saw the largest declines.

Net sales in Asia Pacific Africa decreased 38%, excluding the favorable currency translation impacts and the favorable impact of acquisitions due to weaker end market demand and lower production volumes. The most significant declines occurred in Australia, Japan, and China. Finally, consolidated replacement part sales were approximately $433,000,000 for the first quarter, flat year over year on a reported basis, and up approximately 3% year over year when excluding the effect of unfavorable currency translation. Turning to slide nine. The first quarter adjusted operating margin was 4.1%, a decline of five fifty basis points compared to the first quarter of twenty twenty four.

The weak industry conditions are resulting in significantly higher costs related to factory under absorption and higher discounts. By region, the Europe Middle East segment income from operations decreased by $141,000,000 and operating margins decreased to just over 11%. The lower margins resulted from reduced sales volume, factory under absorption, and increased discounts. North American income from operations in the quarter decreased approximately $48,000,000 year over year and operating margins were negative in the first quarter. Lower sales from weak market conditions and lower production hours were the primary drivers for the lower operating margins year over year.

Operating income in South America decreased by approximately $10,000,000 in Q1 of twenty twenty five versus Q1 of twenty twenty four, and operating margins remained positive in the quarter at roughly 1%. Market conditions in the region have continued to remain weak, and we have reacted with significant production cuts now for six consecutive quarters. Income from operations in our Asia Pacific Africa segment decreased by approximately 12,000,000 due to the lower sales volumes. Slide 10 shows our year over year free cash flow. As a reminder, cash flow represents cash used in or provided by operating activities, less purchases of property, plant, and equipment.

Free cash flow conversion is defined as free cash flow divided by adjusted net income. We used $260,000,000 of cash in the first quarter of twenty twenty five, approximately $2.00 $5,000,000 or 44% less than the first quarter of twenty twenty four, primarily related to improved working capital and lower capital expenditures. For the full year, we anticipate our free cash flow to be in the targeted range of 75% to 100% of adjusted net income. Our capital allocation plan includes reinvesting back into our business, repaying debt to maintain our investment grade credit ratings, and rewarding investors with direct returns with our regular quarterly dividend of $0.29 per share. We remain focused on deploying capital in the most effective ways for the benefits of our shareholders.

Slide 11 highlights our current 2025 market forecast for our three major regions. All three regions have changed modestly from what we communicated on our fourth quarter call. For North America, we expect demand to be meaningfully lower in 2025 compared to 2024. Despite net farm income forecasts revising higher related to government aid, farmers are delaying equipment purchases due to still elevated input costs and uncertain export demand causing tighter profit margins. We now expect the large ag segment to be down around 25% to 30% versus 2024, which is a marginal deterioration from our prior forecast.

The Small Tractor segment is expected to be down between 0% to 5% after several years of significant decline. For Western Europe, we expect the industry to be down approximately 5% compared to our prior forecast of down zero to 5%. Wheat production has been negatively impacted by persistent rain and poor growing conditions. Decreased commodity prices and elevated input costs are also pressuring farm income. For Brazil, after the significant decline we saw in 2024, we now expect the market to be up zero to 5% versus our prior forecast of the industry being flat year over year.

Farmer optimism around healthy soybean yields in the Midwest and the expectation for farmers to expand global share in key commodities due to trade policies is expected to support retail demand for tractors. Slide 12 shows our primary assumptions used in our current 2025 outlook. We continue to anticipate 2025 global industry demand to be approximately 85% of mid cycle. Our sales plan include market share gains and pricing in the 1% range, which is up from the flat to 1% range communicated on our fourth quarter call. Additionally, based on the weakening of The US Dollar, our expectation now is for no foreign currency impact in 2025 versus 2024, which has been revised up from the 3% foreign currency headwind we had communicated previously.

Tariffs are creating significant demand uncertainty and increased cost for us. Our current full year guidance takes into consideration only the tariffs currently in effect across the company's global markets and our anticipated plans to mitigate them through potential pricing actions or cost mitigation actions. That said, the potential for retaliatory measures or additional U. Tariffs, particularly targeting the EU, could influence our current outlook. We're closely monitoring these developments and remain nimble in our approach.

We will update our outlook if necessary as the situation evolves. Engineering expenses are expected to be approximately flat compared to 2024. With the continued need to destock the dealer inventory channel, our production hours will be down 15% to 20% in 2025, as Eric mentioned earlier. These production cuts will be primarily focused in the first half of twenty twenty five, with the second quarter down 15% to 20%. With this lower level of sales and production in 2025, and despite geopolitical trade conflicts, we still expect our adjusted operating margin to be between 77.5%.

With the structural changes we have made to our business, coupled with the cost initiatives we've implemented, we continue to view this outlook as achievable. We are still projecting 2025 to be the bottom of the trough. Our current adjusted operating margins projections is approximately 300 to three fifty basis points above AGCO's performance at the last trough in 2016 due to the structural transformation that has been implemented across the company. Lastly, our effective tax rate is now anticipated to be approximately 35% for 2025, which is at the lower end of the 30 to 35% range previously communicated. Turning to slide 13 for our 2025 outlook.

Our projected net sales, capital spending and free cash flow targets remain unchanged from those communicated at the start of the year. Our full year net sales outlook is $9,600,000,000 which reflects the market environment, the weaker US dollar, the elimination of the grain and protein sales, and the softer demand resulting from the announced tariffs across the company's global markets, net of our planned mitigation actions. Our 2025 earnings per share remain in the $4 to $4.5 range. These full year estimates reflect the projected impact of tariffs in place as of 05/01/2025, along with our planned mitigation actions. Changes to the tariffs or other actions in response to them could result in a change to these estimates.

Given the weaker market environment, our estimated CapEx spending continues to be approximately $375,000,000 versus the $393,000,000 in 2024, which keeps AGCO well positioned for any future demand inflections. Our free cash flow conversion target remains 75% to 100% of adjusted net income as we look to further reduce working capital in 2025. Lastly, our Q2 twenty twenty five net sales are expected to be approximately $2,500,000,000 If you were to exclude grain and protein sales from the Q2 twenty twenty four, our sales will be down roughly 17% on a like for like basis. Given the lower sales volumes and significant reduction in production hours again, we anticipate Q2 earnings per share to be in the $1 to $1.1 range. On slide 14, you can see the details of our twenty twenty five Tech Days in October of Germany, where we will provide a FENT factory tour and product experience on September 30, followed by field demonstrations on October 1.

We hope you will join us, and we look forward to seeing you there. With that, I will turn the call over to the operator to begin the Q and A.

We will now begin the question and answer session. Please go ahead.

Hi, good morning. I guess my first question, the first quarter came in better than you guys had expected. I think you were guiding to breakeven in an adjusted basis. You came in at zero four one dollars So Damon, just any color on where you performed better versus what you would have thought? And then I guess my second question, just a little more color on tariffs and the actions you're taking to mitigate tariffs.

Guess, one, can you talk to your order book? Is there any risk in order book in your order book associated with tariffs sort of the price increases that you're talking about and actions you're taking? I don't know if you can put a dollar amount on that because it's impressive you are still maintaining your guide. Thank you.

Yeah, sure, Jamie. So, you're right, we did do better in the first quarter than what we had originally expected. I think there's probably two items or two different categories, but I think at the operational side of the house, the teams did a little bit better in pricing and mix was stronger, especially in our European operations, and then as you heard us talk last year about our cost control actions, we're starting to see those were a little bit ahead of schedule in what we dropped to the bottom line. So I think price mix and costs were all a little bit better. We did cut production a little bit more in the quarter than what we had originally guided to, so that was a little bit a net negative of a headwind.

So when I look at those categories operationally, I'd say that was about zero two five dollars of a positive versus our outlook. And then we did better below the line, so if you look at the foreign currency gain and losses, we had some lower discounting of receivables, so those other below the line items were about $0.20 and that's what brought us to the $0.41 for the quarter. As we think about your question on tariffs, as we've said, we are looking at what is in effect today. We have assumed some modest price increases, we have already have some in effect for our parts operations, or parts products, excuse me, 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. We've not factored that into our industry outlook, because we're not sure whether that would be unique to AGCO, or whether that would affect the industry. And when we look at those two things together, we see the price net of the lower North American volume as a net negative on sales. I would say it's about less than 1% of total company revenues, and it's a negative to earnings per share, and if I look at that, that's about a $0.30 headwind related to our business here in our current outlook that we've embedded in our outlook. Order boards, as you know, boards have been coming down as we came out of the supply chain challenges.

Right now, as we sit here in North America, we're somewhere in the range of four to five months of orders, depending on the product. Again, any actions will likely have an effect on pricing later on in the year, given the current order board that we see. Other actions we're taking on tariffs, again, 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 of what would happen in Canada, and obviously we're having active discussions with our suppliers, you know, as to how do we help mitigate the cost we have to absorb in actions that they can take to try to dampen the overall impact to AGCO.

So, I think like most large industrials, we're pulling every lever out there. We're working with advisors is what they may be hearing and seeing others doing to make sure that we're looking at all of these different options to mitigate the cost, given the dynamic situation we're in right now.

The next question comes from Kyle Mengus with Citigroup. Please go ahead.

Thank you. So I know Damon you called out just the EMEA margins particularly strong in the quarter at least partly driven by mix. I guess the question is really just around the sustainability of the EV margins and just how do we think about the risks of a potential mix shift from Fence to maybe the other brands and just how to think about mix impacts on EME margins, how to think about that for the rest of the year and then maybe in the kind of medium term?

Yeah, I think overall, Kyle, the European market, again reminding for the group, is the most stable of all of our three major markets, given the level of subsidies in that market. It's historically been the most stable and predictable, and so that part of the world, at least thus far, has been relatively solid for us. If you think about what we've been seeing here, you know, there's somewhat of a sense of a flight to quality as farmers are on the fringes who are less profitable, you know, think about them likely buying more of our volume orientated brands, and so Fence has continued to do well in gaining significant market share over the last one year. Fence has done exceptionally well in gaining share, whether that's through some of the new product introductions or some of the next generation products, and the portfolio of new products coming out for Fence is still pretty rich as we look over the next couple of years, and so again, you've heard us say this before, but FENT is the best of the best, you know, it's driving the latest innovation, the best fuel efficiency out there, and so as farmers are really challenged on their profitability, you know, they're looking for ways to minimize their input costs, maximize their output and their yield, and FENT delivers on that in the products that they're offering.

So, you know, I don't see necessarily FENT eroding in exchange for another product or another brand, but what you may see is if the economy recovers, and some of these more volume orientated brands start to outpace in a recovery mode, it may have a a little bit of effect, but I don't see that changing the overall E and E margins significantly from what you've been seeing us perform over the last couple of quarters.

That's helpful. Thank you. And then I think it'd also be helpful just to get some sense of what Trimble top line and margins looked like in the quarter, like were margins possible positive? And then just how should we be thinking about as you start lapping that C and H dealer stock up that we saw? Just what are you seeing now in terms of the dealer inventories and order trends from those dealers?

Yes, so I'll touch on maybe the numbers and I'll let Eric talk about what he's seeing specifically related to some of the dealers and the products here. But if you remember, we did not have PTX Trimble in the portfolio here in the first quarter, so for our overall PTX revenue, that's incremental sales for that part of the business were just over $60,000,000 in the quarter, you know, and if you remember what Trimble would have announced, it was a little bit over 80, that did include AGCO related sales, so down a little bit, you know, not too different than the overall industry, so very much in line. So we're feeling pretty good about what we're seeing relative to the industry dynamics, but you know, can talk about what we're seeing with the CNH channel and some of the other Agco dealer channels that we're bringing on board right now.

Yeah, the main focus we've got is establishing the channel of the future, and that's ramping up our Agco dealers to also take on the PTX contract. From where we were at the end of twenty twenty four till today, we've about tripled the amount of industry coverage that we've got covered by AGCO dealers that also carry PTX. We expect that the bulk of that work to be done by the end of the second quarter will have most of the large sized dealers signed up. And so that channel is our most urgent to get activated and it's underway in a good way. Second topic is utilizing Trimble technology on AGCO products.

We started when we launched the JV a year ago, we were at about 20% take rate. We got it to about 70% take rate at the end of twenty twenty four, and now we're more like 90% take rate, which is about where we think it'll stabilize, because there'll always be niches that we may still provide other brands. But, so that's fundamentally well in place. And we think that the last time buy of CNH made just prior to the deal closing is getting closer to being exhausted. And so that should no longer be a headwind to the overall business.

So feeling very good about first quarter acceleration of channel readiness as well as the cross selling activity in the full line tech channel. I talked about the AGCO dealers. Those are the machinery dealers that sell planters, sprayers, combines, so on that also sell PTX. But then we've got this unique, we're the only ones in the industry that have a full line tech channel and all they sell is technology. Those are either former Trimble dealers or former Precision Planting dealers that are going to sell the full portfolio.

And we're working on cross selling, helping those dealers be capable and proficient at cross selling the entire line. Taking hold this year. It'll be a little bit longer runway on that because it's a little bit more complicated, but we feel like we're on pace with that as well.

And then Kyle, wrapping up on the profitability, PTX Trimble was profitable for us in the quarter, not to the levels we wanted to shed, but again, as we talked in the past, given the lower levels of volume and the high incrementals and decrementals there, we know we need to get volume back in, but we were profitable here for the first quarter, so a good start to the year with

We have one more comment because I imagine there's other questions on other people's minds, so I'll just say. You know, we reorganized the leadership team of the PTX business in quarter four, where we had PTX Trimble as the JV and Precision Planting along with the other tech companies that we had bought. We blended all that together, melted together into one global PTX leadership team. And with that, in quarter one, we've seen a significant acceleration in the synergies both within PTX, ideas of revenue synergies and cost synergies, as well as with PTX to AGCO.

So that's the other element that we were committed to getting done, we found a nice acceleration in quarter one.

next question comes from Kristen Owen with Oppenheimer. Please go ahead.

Good morning. Thank you for taking the question. I wanted to follow-up on some of what Jamie touched on in her question and just making sure I understand the mechanics on the full year guide. So you've got the Q1 top line in line, full year maintained, bottom line beat by $0.40 full year maintained, but you've also lifted some of the outlook for price for FX. So is it fair to think that your assumptions around tariffs are something on the order of the four points that you added to the top line that that could be a four percentage point headwind, and similarly a 40% headwind on the bottom line?

Sorry for the long winded question there, but I just want to make sure I understand the mechanics. And then I do have an unrelated follow-up.

Yeah, I think, so Kristen, maybe I'll do it by EPS or by earnings per share, just to keep it simple for me. Our guide was four to 4.5. If I roll through the $0.40 beat directionally that we had in the first quarter. Foreign currency is a positive for us, as we've said we went from negative three to around flat, you know, think of that as probably directionally around a $0.40 pick up as well. We've taken the industry outlooks in North America and Europe down.

Asia is also down. And so when I look at those industry dynamics, South America is up, that's around a $0.30 headwind for us. Tariff, the net tariff impact to us, so pricing coupled with that volume comment I made earlier, that's around 30¢, and then you got some incremental negative absorption because of the industry changes, you know, we're still in the 15 to 20 hours cut, but that's because we're taking the industry down and we have the assumption North America, we have some further absorption embedded in our numbers. So that coupled with some other things is about another $0.10 or so.

That's incredibly helpful. Thank you for that, Damon. And then I did want to ask since you mentioned it in the prepared remarks as you typically do about your capital allocation strategy. Just given the progress with your large shareholder and their decision not to stand for reelection, I'm wondering if you can maybe update us on what potential outcomes could look like there and how that might influence your capital allocation going forward. Thank you.

Yeah, I'll take that one. We feel really good about the progress we've made in discussions with TAFE and you've seen that the board seat that TAFE had is no longer in place and so gone from 10 directors down to nine. And so you can kind of imagine that the overall discussions are pretty robust. We're not all the way done with them yet, but we're getting close. And we recognize that investors would like us to do share buybacks.

And because of that, we would like to do that as well. We've been constrained from doing them over the last several years because of that shareholder concentration. As you can imagine, that's part of our discussions and we're trying to represent that on behalf of our investors. I can't see any specifics right now because the discussions aren't done, but I promise you that that's certainly at the forefront of what we're trying to get accomplished. And as soon as we can share it, I promise you we will.

The next question comes from Jerry Revich with Goldman Sachs. Please go ahead.

Yes, hi. Good morning, everyone. Nice quarter. Eric, I wanted to ask, if you folks look at the scenario that I'm sure you've evaluated if you were to bring scent production into The U. S.

For The U. S. Market, what would that look like for AGCO? What would the impact be on unit costs if you were to move in that direction? How long would that transition take?

Can you just fill us in on that contingency plan and how you folks have evaluated it if it were to come down to it?

Yeah, we've looked at that. We actually even looked at it before the tariffs. We look at it every year of 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. We've been gaining market share nicely with Fenton North And South America. So it's a natural thing that we do annually.

I would say that for any of these footprint decisions, one of the things that we need to count on is a sustainable set of assumptions. And that we can count on those for the long term. So right now that environment doesn't exist and so we've got a few different scenarios of what we might do. But as you can imagine, tractor production especially involves a lot of machining capability. Designing the transmission and engine and powertrain particularly, but a lot of the castings take a lot of machining.

Machining are high capital goods items. And so all the major players kind of centralize those into one spot for high horsepower production. Now that's for the components. To do final assembly, it's a little bit more flexible. So we've got options for different levels of how much vertical integration we would potentially do.

We've got the site selected and understand 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 up until things stabilize further.

Super. And then just to shift gears, nice to hear progress about the precision ag reorganization and what that has meant for cross selling. Can you just update us on your views on the legacy Trimble retrofit kit? You've got a competitor that's spoken publicly about making good headway in terms of launching that product at a lower upfront cost with subscription over time. What's the AGCO counterpoint to that offering?

Are you folks in the market? The numbers that Damon quoted earlier include potential lower ASP but higher subscription value. Can you just talk about how you're thinking about the competitive landscape?

Yes. In fact, this week we're launching the new latest and greatest guidance technology. We call it the NAV960. That's just the new model number. It's at Agrishow and it's getting tremendous interest from the market down there.

In fact, the overall AGRISHOW is very positive. We see ordering up across all of our brands, lots of interest, especially in FENT, but across all three of our brands in South America. And then coming back to the technology, we've got PTX marketing and education embedded in each of our brand booths within the show as well as our PTX unique story. So PTX is playing a very strong position in the market and we just rolled out the latest new technology. We're excited about the new nine sixty.

As it relates to pricing, we have experimented with both full price on the hardware upfront and subscription based pricing. And I think we're gonna end up having a bit of a mix as it goes into the market, where depending on where we are in the world, we'll probably use different tools. And it's really because we want to be the most farmer focused company in the industry and serve those markets the way the farmers want to consume that technology. We recognize the value in subscriptions as it relates to our income statement but we're trying to balance that with what farmers want to make sure they're most productive in their operation. So I think you'll see a little bit of both.

The next question comes from Steven Volkmann with Jefferies. Please go ahead.

Hey, good morning guys. Damon, I'm wondering if you can sort of mark us to market relative to your various cost cut programs. What have you achieved so far? What do you expect to achieve by year end? Any changes in that outlook?

No changes, Steve. I think we are on very good pace. I think at the end of the first quarter, we've expensed somewhere in the range of around $160,000,000 If you remember, our guide was somewhere in the range of 150,000,000 to 200,000,000 in total cost. We're getting through the bulk of that is past us here. Savings wise, our guide was 100 to 125.

I feel very confident that we will be exiting the year here at that level.

priority for our whole leadership team all last year and into this year. We just had two and a half days working on that. We've got a very detailed management approach to this. A whole working tool that tracks every project by date, by location. So it's not a hope, it's a very detailed and well managed program to deliver on that.

Eva, I would say that we also announced that you remember at the December Investor Day we announced another 75,000,000 of cost opportunities we saw that we thought we could materialize by end of twenty twenty six. Given the environment we're in right now, probably no surprise to you, we are, as Eric said, working with our teams around the world in where our areas potentially accelerate those cost out opportunities, trying to enhance that 100 to 125,000,000 of run rate savings we have with the original restructuring. So nothing to add incremental right now, but I would say, as Eric said, it's top priority of this team around the world looking for ways to pull that in where appropriate.

Super, thank you for that. And I guess, as I think forward, I think Damon, you said you're still looking at 25 as kind of the trough of the cycle. I guess just based on all this cost stuff, there shouldn't be any real reason that we wouldn't factor in potentially meaningfully higher incremental margins once we start turning back up again, or is there some offset you'd like us to keep in mind?

No, I mean, again, think as we look at the structural costs that we're taking out, if you look at our decrementals this quarter, we were actually slightly positive to our normal, call it around 30%, and part of that is the cost savings actions that are dropping to the bottom line. I think, obviously, as you start to go into an upswing in the market, Steve, there's some variable cost that comes in, things like variable comp hopefully gets go to become a headwind for us, but I think overall, we would feel that we have structurally changed the profitability of this business through the cost actions coupled with the primary growth engines Eric talked about. So, hopefully the incrementals will be above our normal, but let's get to that point in the conversation when the industry is recovering and we can dig deeper at that point in time.

The next question comes from Tammy Zakaria with JPMorgan. Please go ahead.

Hey, good morning. Thank you so much. So my first question is on FEND. So if there's tariff import on tariffs from the EU starting in July, what's your plan regarding the FEND brand? My understanding is it's a premium priced product already.

AGCO (AGCO) Q1 2025 Earnings Call Transcript

Company Participants