Titan Machinery (NASDAQ:TITN) reported fiscal first-quarter results that management said were slightly ahead of expectations, helped by earlier-than-anticipated equipment margin improvement, but the company reaffirmed its full-year outlook as demand remains pressured across key customer groups.
President and Chief Executive Officer Bryan Knutson said the quarter benefited from disciplined efforts over recent periods to reduce aged inventory and improve the health of the company’s equipment mix. He cautioned, however, that equipment margins remain below normal levels and that the underlying customer demand environment is still challenged by low commodity prices and higher input costs.
Revenue Declines, but Margins Improve
For the fiscal first quarter ended April 30, 2026, Titan Machinery reported total revenue of $522.4 million, down from $594.3 million in the prior-year period. Management said same-store sales decreased 10.4%, driven by softer demand in domestic agriculture, construction and Europe, partially offset by growth in Australia.
Gross profit was $89.3 million, compared with $90.9 million a year earlier. Gross margin expanded to 17.1% from 15.3%, with management pointing to stronger equipment margins and a higher mix of parts and service revenue. Equipment margins rose about 100 basis points year over year to 7.8%.
Operating expenses declined to $94.4 million from $96.4 million, reflecting lower headcount and discretionary spending, partially offset by higher variable expenses tied to sales activity. Floor plan and other interest expense fell 26% to $8.2 million from $11.1 million, which management attributed to lower interest-bearing inventory levels.
The company reported a net loss of $12.6 million, or $0.55 per diluted share, compared with a net loss of $13.2 million, or $0.58 per diluted share, in the prior-year quarter. Adjusted EBITDA was $1 million, down from $2.6 million a year earlier.
Inventory Focus Shifts to Mix Optimization
Knutson said Titan Machinery’s focus has shifted from absolute inventory reduction to “mix optimization” after two years of work to reduce aged equipment. Total inventory at quarter-end was $914.8 million, up $12 million from year-end, which management said reflected normal seasonality.
Knutson said aged equipment inventory continued to decline each month so far this year and called that trend “a critical leading indicator of sustained equipment margin improvement.” He said the company still has work to do in certain used equipment categories and select slower-moving seasonal new equipment categories.
The company ended the quarter with approximately $30 million in cash and an adjusted debt-to-tangible-net-worth ratio of 1.6 times, below its bank covenant of 3.5 times.
Segment Performance Reflects Mixed Conditions
In domestic agriculture, sales were $344.2 million, with same-store sales down 8.2% due to continued softness in equipment demand. Management said results were stronger than expected because some customer deliveries occurred earlier than anticipated. The segment’s pre-tax loss narrowed to $6.2 million from $12.8 million a year earlier, reflecting inventory actions and improved equipment margins.
Knutson said the environment for growers remains difficult, with commodity prices below break-even levels for many producers and input costs still elevated. He said government support remains an important near-term variable and highlighted year-round E15 adoption, biodiesel and sustainable aviation fuel as policy areas that could help address oversupply in corn and soybeans.
Construction segment sales declined 6.5% on a same-store basis to $67.5 million, primarily due to equipment delivery timing. The segment’s pre-tax loss narrowed to $0.6 million from $4.2 million. Knutson said infrastructure and data center activity are providing a healthy baseline of demand, while the portion of construction sales tied to farmers is experiencing softness similar to domestic agriculture.
In Europe, sales fell to $60.4 million, including a $4.2 million currency benefit. On a constant-currency basis, revenue declined about 40%, mainly due to softer demand in Romania after the prior-year period benefited from European Union subvention program activity. The segment reported a pre-tax loss of $0.9 million, compared with pre-tax income of $4.7 million a year earlier. Knutson said the company completed most of the wind-down of its German operations during the quarter.
Australia sales rose 14% to $50.3 million, including a $5.1 million currency benefit. On a constant-currency basis, revenue increased 2.8%, helped by additional revenue from the Belle-Vue Machinery acquisition completed last fall. The segment posted a pre-tax loss of $1.8 million, compared with a $0.6 million loss a year earlier. Knutson said Australian growers are facing elevated diesel fuel and fertilizer costs, but increased rainfall has improved growing conditions across much of the company’s footprint.
Full-Year Outlook Reaffirmed
Management reaffirmed its fiscal 2027 assumptions despite the modestly better first quarter, saying the demand backdrop remains consistent with its prior outlook.
- Agriculture revenue is expected to decline 15% to 20%.
- Construction revenue is expected to be flat to up 5%.
- Europe revenue is expected to decline 20% to 25%.
- Australia revenue is expected to increase 10% to 15%.
- Full-year consolidated equipment margin is expected to be approximately 8.4%, up from 7.3% in fiscal 2026.
Management also reaffirmed expectations for operating expenses of approximately 17% of sales and a roughly 25% year-over-year decline in floor plan interest expense. The company maintained its full-year adjusted EBITDA forecast of $17 million to $29 million and adjusted diluted loss per share guidance of $1.25 to $1.75.
Management Sees Stability in Used Equipment Pricing
During the question-and-answer session, B. Riley analyst Liam Burke asked about the competitive pricing environment. Knutson said used equipment values have stabilized after roughly 18 months to nearly two years of sequential declines. He said new equipment price increases have also moderated, with manufacturers generally discussing increases in the 1% to 2% range, and in some categories up to 3%.
“Ultimately, the pricing has stabilized,” Knutson said, adding that improvement in farm profitability would depend on higher commodity prices and lower input costs.
Knutson also said customers are running equipment longer and taking a “fix-as-fail” approach in the current environment. He said that dynamic could support future parts, service and equipment replacement demand as industry conditions improve.
About Titan Machinery (NASDAQ:TITN)
Titan Machinery, Inc is a leading full-service dealer specializing in the sale, rental, and servicing of agricultural and construction equipment. The company represents major brands such as Caterpillar, Case IH and New Holland, offering new and pre-owned tractors, combines, excavators, loaders and other heavy machinery. In addition to equipment sales, Titan provides parts distribution, preventative maintenance and field service support to help customers maximize uptime and productivity.
Beyond equipment transactions, Titan Machinery offers a comprehensive suite of support services.
