AI Takeaway
CAT delivered strong Q1 FY2026 results with revenue surging 22.2% YoY to $17.4B and EPS jumping 30.3% to $5.50, driven by robust demand across its business segments, though operating margin edged slightly lower and aggressive share buybacks of $5.0B highlight continued capital returns to shareholders.
Revenue
$17.41B
++22.22% YoY
EPS (Basic)
$5.50
++30.33% YoY
Operating Income
$3.08B
++19.62% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Revenue grew 22.2% YoY to $17.4B in Q1 FY2026 (from $14.2B in Q1 FY2025), reflecting strong end-market demand. This top-line acceleration suggests broad-based strength in Caterpillar's construction, resource, and energy & transportation segments.
Source: Source: 10-Q Income Statement Data
Cost of Revenue rose 26.1% YoY to $11.3B, outpacing revenue growth of 22.2%, which compressed gross margins. This cost acceleration likely reflects higher material, manufacturing, and supply chain costs that partially offset the benefit of higher sales volumes.
Source: Source: 10-Q Income Statement Data
Operating income grew 19.6% YoY to $3.1B, but operating margin declined modestly from 18.1% to 17.7%, indicating that while absolute profitability improved, cost pressures are creating a slight headwind to margin expansion.
Source: Source: 10-Q Income Statement & Ratio Data
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Upgrade to unlockCost of Revenue grew 26.1% YoY, significantly faster than revenue growth of 22.2%, compressing gross margins. Sustained input cost inflation in materials, labor, and logistics could further pressure profitability if Caterpillar is unable to fully offset these costs through pricing actions.
Source: Source: 10-Q Income Statement Data
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Upgrade to unlockReported EPS of $5.54 versus the $4.66 analyst consensus — a +18.8% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $17.41B | $14.25B | +22.22% |
Cost of Revenue | $11.31B | $8.96B | +26.11% |
Operating Income | $3.08B | $2.58B | +19.62% |
EPS (Basic) | $5.50 | $4.22 | +30.33% |
EPS (Diluted) | $5.47 | $4.20 | +30.24% |
R&D Expense | $537M | $480M | +11.88% |
SG&A Expense | $1.82B | $1.59B | +14.00% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $95.55B | $84.97B | +12.45% |
Current Assets | $48.57B | $43.02B | +12.90% |
Total Liabilities | $76.89B | $66.9B | +14.93% |
Current Liabilities | $35.9B | $32.59B | +10.15% |
Cash & Equivalents | $4.07B | $3.56B | +14.32% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $1.87B | $1.29B | +45.07% |
Investing Cash Flow | $-1.77B | $-175M | -914.29% |
Financing Cash Flow | $-5.95B | $-4.5B | -32.34% |
Share Buybacks | $5.03B | $3.66B | +37.38% |
D&A | $595M | $540M | +10.19% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 17.7% | 18.1% | -0.38% |
Current Ratio | $1.353 | — | — |
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Caterpillar's revenue grew 22.2% YoY to $17.4B in Q1 FY2026, up from $14.2B in Q1 FY2025. This strong top-line growth reflects robust demand across its key end markets including construction, mining, and energy & transportation.
The key takeaways from CAT's Q1 FY2026 earnings are strong revenue growth of 22.2% to $17.4B, EPS growth of 30.3% to $5.50, and a 45.1% surge in operating cash flow to $1.87B. However, gross margin compressed as costs grew faster than revenue, and CAT deployed $5.0B in share buybacks, reflecting its aggressive capital return strategy.
Yes, CAT's basic EPS grew 30.3% YoY to $5.50 in Q1 FY2026, compared to $4.22 in Q1 FY2025. The EPS growth significantly outpaced revenue growth of 22.2%, largely because aggressive share buybacks of $5.0B reduced the outstanding share count, amplifying per-share earnings.
Based on the financial data, key risks include cost inflation (Cost of Revenue grew 26.1% vs. revenue growth of 22.2%), elevated leverage with total liabilities rising 14.9% to $76.9B, and a dramatic increase in investing cash outflows to -$1.78B from -$175M. Additionally, operating margin declined modestly from 18.1% to 17.7%, signaling potential structural cost pressure.
Caterpillar's financial health appears solid but leveraged: it holds $4.1B in cash, generates strong operating cash flow of $1.87B, and maintains a current ratio of 1.35x. However, total liabilities of $76.9B are substantial relative to estimated equity of ~$18.7B, and the company is returning capital aggressively through $5.0B in quarterly buybacks, which limits financial flexibility.