Titan Machinery Q2 Earnings Call Highlights

Titan Machinery Q2 Earnings Call Highlights

Revenue and earnings weakened: Fiscal Q2 revenue fell 9.2% to $496.4 million, while the net loss widened to $9.2 million, or $0.40 per share. Adjusted EBITDA declined to $4.6 million from $5.6 million.

Margin improvements mitigated lower demand: Gross margin expanded to 18.6% as equipment margins improved through aged-inventory reductions and better inventory mix. Floor-plan interest expense also fell 30% to $8.1 million.

Outlook was maintained: Titan reaffirmed fiscal 2027 adjusted EBITDA guidance of $17 million to $29 million and an adjusted diluted loss-per-share range of $1.25 to $1.75, while expecting continued weakness in domestic agriculture and Europe but growth in construction and Australia.

Titan Machinery NASDAQ: TITN reported a second-quarter fiscal 2027 net loss as revenue declined amid continued weakness in agricultural equipment demand, though the company said inventory-management efforts supported improved equipment margins and lower floor-plan interest expense.

For the quarter ended July 31, 2026, Titan recorded total revenue of $496.4 million, down from $546.4 million a year earlier, reflecting a 6.2% same-store sales decline. Net loss was $9.2 million, or $0.40 per share, compared with a net loss of $6 million, or $0.26 per share, in the prior-year quarter.

Adjusted EBITDA was $4.6 million, compared with $5.6 million a year earlier.

Margin gains offset lower sales Chief Executive Officer Bryan Knutson said quarterly results were largely in line with the company’s expectations. He highlighted continued improvement in agricultural equipment margins, which he attributed to actions including reducing aged inventory, improving inventory mix and strengthening inventory-management processes.

Gross profit was essentially unchanged at $92.4 million despite the revenue decline. Gross margin expanded 150 basis points year over year to 18.6%, according to Chief Financial Officer Bo Larsen. Equipment margins increased 190 basis points to 8.5%, supported by healthier inventory and a higher consolidated mix of parts and service revenue.

“These margin improvements are being driven by actions within our control rather than any meaningful improvement in underlying industry demand,” Knutson said.

Operating expenses rose modestly to $94.1 million, primarily due to variable expenses associated with sales initiatives and efforts to clear aged inventory. Larsen said headcount and discretionary spending remained below prior-year levels.

Floor-plan and other interest expense fell 30% to $8.1 million from $11.5 million, reflecting lower interest-bearing inventory levels.

Domestic agriculture remains pressured Domestic agriculture segment sales totaled $310.2 million, with same-store sales down 8.4%. Equipment revenue declined 13.5%, although it came in modestly ahead of management’s expectations. The segment’s pre-tax loss improved by $9 million to $3.3 million as stronger equipment margins helped offset lower demand.

Knutson said grower profitability remains under pressure because corn and soybean prices, despite recent gains, remain below levels that would support a meaningful broad-based equipment-demand recovery. Elevated input costs also continue to weigh on farm economics.