Titan Machinery sees 9% drop in agriculture revenue

Equipment dealer Titan Machinery found some relief in its construction segment in the third quarter of its fiscal 2025 as agriculture and total revenue declined.  

STATE OF PLAY: The West Fargo, N.D.-based company attributed revenue declines to a beleaguered agriculture sector that’s been grappling with “softening demand” and “sustained higher interest rates,” Chief Executive Bryan Knutson said during today’s earnings call. 

“The decrease in net farm income is largely being driven by significantly lower commodity prices for most key cash crops in our footprint, which have steadily declined since the beginning of the year,” he said. “These elements, combined with mixed growing conditions across our footprint, are negatively impacting farmer sentiment and have manifested in lower retail demand for equipment purchases.” 

The company is selling equipment at lower margins as it aggressively works to offload excess inventory, particularly used equipment, Knutson said. The strategy will allow Titan Machinery to reduce floorplan interest expenses and “accelerate our return to a more normalized margin profile.” 

BY THE NUMBERS: Meanwhile, a stabilizing construction sector and interest in new products led to sales growth in this segment, Knutson said.  

In Q3 of fiscal 2025, ending Oct. 31, Titan Machinery reported the following product segment results in today’s earnings statement and presentation:  

• Agriculture revenues totaled $482 million, down 9.3% year over year; 
• Agriculture same-store sales fell 10.8% YoY to $474 million; 
• Construction revenue rose 10.1% YoY to $85.3 million; and 
• Construction same-store sales rose 10% YoY to $85.3 million. 

Other Q3 results included: 

• Total revenue of $679.8 million, down 2.1% YoY; 
• Equipment revenue dropped 5.1% YoY to $495.1 million; 
• Rental and other revenue fell 1.1% YoY to $12.5 million; and 
• Inventory turn rate — the cost of sales on equipment for the past 12 months divided by the average month-end inventory balance — was 1.6, down 33.3% YoY. 

Q3 inventory and floorplan results included: 

• Equipment inventory totaled $1.2 billion, up 12.3% YoY; 
• Floorplan payables increased 41.6% YoY to $1 billion; and 
• Floorplan and other interest expense was $14.3 million, up 160% YoY. 

FLASHBACK: Titan Machinery in January acquired Mitchell, S.D.-based dealership Scott Supply Co. That deal and other acquisitions over the past year contributed to a 7.3% YoY increase in operating expenses to $98.8 million in Q3, Chief Financial Officer Bo Larsen said during the earnings call. 

MARKET REACTION: Shares of Titan Machinery (NYSE: TITN) were up 4.2% from market open to $16.07 as of market close today. It has a market capitalization of $364.9 million.  

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