AI Takeaway
Caterpillar (CAT) posted FY2025 revenue of $67.6B (+4.3% YoY) but saw operating income fall 14.7% to $11.2B as cost of revenue surged 11.3%, compressing operating margin by ~370 basis points to 16.5%.
Revenue
$67.59B
++4.29% YoY
EPS (Basic)
$18.90
-14.75% YoY
Operating Income
$11.15B
-14.70% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
CAT grew total revenue 4.3% YoY to $67.6B in FY2025 (from $64.8B in FY2024), indicating continued demand across its construction, mining, and energy segments despite a challenging macro environment.
Source: Source: 10-K Income Statement
Cost of revenue jumped 11.3% YoY to $44.8B, far outpacing revenue growth of 4.3%, which drove gross profit lower and compressed operating margin from 20.2% to 16.5% — a decline of approximately 370 basis points.
Source: Source: 10-K Income Statement
Operating income fell 14.7% to $11.2B and diluted EPS dropped 14.7% to $18.81 (from $22.05), reflecting the combined impact of higher input costs and elevated SG&A expenses of $7.0B (+4.8% YoY).
Source: Source: 10-K Income Statement
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Upgrade to unlockCost of revenue grew 11.3% YoY versus revenue growth of only 4.3%, indicating that input cost inflation — including materials, manufacturing, and supply chain costs — is significantly outpacing pricing power. If this trend continues, operating margins could compress further from the already-reduced 16.5% level.
Source: Source: 10-K Income Statement
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Upgrade to unlockReported EPS of $5.16 versus the $4.72 analyst consensus — a +9.3% beat for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $67.59B | $64.81B | +4.29% |
Cost of Revenue | $44.75B | $40.2B | +11.33% |
Operating Income | $11.15B | $13.07B | -14.70% |
EPS (Basic) | $18.90 | $22.17 | -14.75% |
EPS (Diluted) | $18.81 | $22.05 | -14.69% |
R&D Expense | $2.15B | $2.11B | +1.95% |
SG&A Expense | $6.99B | $6.67B | +4.77% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $98.58B | $87.76B | +12.33% |
Current Assets | $52.48B | $45.68B | +14.89% |
Total Liabilities | $77.27B | $68.27B | +13.18% |
Current Liabilities | $36.56B | $32.27B | +13.28% |
Cash & Equivalents | $9.98B | $6.89B | +44.87% |
Long-Term Debt | $30.7B | $27.35B | +12.23% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $11.74B | $12.04B | -2.46% |
Investing Cash Flow | $-4.71B | $-2.45B | -91.89% |
Financing Cash Flow | $-3.9B | $-9.56B | +59.24% |
Share Buybacks | $5.19B | $7.7B | -32.57% |
D&A | $2.26B | $2.15B | +5.06% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 16.5% | 20.2% | -3.67% |
Current Ratio | $1.436 | — | — |
Other companies in Construction Machinery & Heavy Transportation Equipment
Caterpillar reported FY2025 revenue of $67.6B, up 4.3% YoY, but operating income fell 14.7% to $11.2B due to surging costs. Diluted EPS declined to $18.81 from $22.05 in FY2024, reflecting significant margin compression.
CAT's cost of revenue jumped 11.3% to $44.8B — more than double the pace of revenue growth — which compressed gross and operating margins sharply. SG&A expenses also rose 4.8% to $7.0B, further weighing on the bottom line.
CAT maintains solid liquidity with $10.0B in cash (+44.9% YoY) and a current ratio of 1.44x, and generated $11.7B in operating cash flow. However, long-term debt rose 12.2% to $30.7B and total liabilities grew to $77.3B, indicating increased leverage.
Yes, Caterpillar reduced share repurchases by 32.6% to $5.2B in FY2025, down from $7.7B in FY2024. This reduction, combined with higher debt levels, suggests a more cautious capital allocation approach during the year.
The primary risk is sustained cost inflation, with cost of revenue growing 11.3% versus revenue growth of only 4.3%, threatening further margin erosion. Additionally, long-term debt rose to $30.7B and investing outflows nearly doubled to -$4.7B, raising questions about future free cash flow generation.