AI Takeaway
Deere & Company posted Q2 FY2026 revenue of $13.37B (+4.7% YoY) but net income slipped 1.7% to $1.77B as higher costs offset top-line growth, while operating cash flow surged 83.5% year-to-date to $1.04B.
Revenue
$13.37B
++4.75% YoY
EPS (Basic)
$6.57
-1.20% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Revenue rose 4.7% YoY to $13.37B in Q2 FY2026, yet net income declined 1.7% to $1.77B, indicating that cost increases—including a 6.2% rise in R&D to $583M and a 1.0% rise in SG&A to $1.21B—outpaced top-line gains and compressed profitability.
Source: Source: 10-Q Income Statement
Fiscal year-to-date operating cash flow improved dramatically by 83.5% to $1.04B (vs. $568M in the prior-year period), suggesting improved working capital management and cash conversion despite softer net income.
Source: Source: 10-Q Cash Flow Statement (YTD)
Total liabilities fell 2.9% YoY to $79.54B while stockholders' equity grew 12.8% to $27.41B, reflecting a meaningful improvement in the company's capital structure and financial resilience.
Source: Source: 10-Q Balance Sheet
2 more insights available
Upgrade to unlockDespite a 4.7% revenue increase, net income fell 1.7% as R&D and SG&A expenses grew. If cost inflation continues to outpace revenue growth, profitability could deteriorate further in subsequent quarters.
Source: Source: 10-Q Income Statement
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $6.55 versus the $5.87 analyst consensus — a +11.5% beat for Q2 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $13.37B | $12.76B | +4.75% |
Net Income | $1.77B | $1.8B | -1.72% |
EPS (Basic) | $6.57 | $6.65 | -1.20% |
EPS (Diluted) | $6.55 | $6.64 | -1.36% |
R&D Expense | $583M | $549M | +6.19% |
SG&A Expense | $1.21B | $1.2B | +1.00% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $107B | $106.3B | +0.66% |
Total Liabilities | $79.54B | $81.92B | -2.91% |
Stockholders' Equity | $27.41B | $24.29B | +12.84% |
Cash & Equivalents | $7.91B | $7.99B | -1.08% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $1.04B | $568M | +83.45% |
Investing Cash FlowYTD | $93M | $779M | -88.06% |
Financing Cash FlowYTD | $-1.63B | $-821M | -98.17% |
Share BuybacksYTD | $500M | $838M | -40.33% |
D&A | $594M | $555M | +7.03% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Net Margin | 13.3% | — | — |
ROE | 6.5% | — | — |
ROA | 1.7% | — | — |
Debt to Equity | $2.902 | — | — |
Deere reported Q2 FY2026 net income of $1.77B and diluted EPS of $6.55, both slightly below the prior year's $1.80B and $6.64. Whether these figures beat or missed Wall Street consensus estimates would require comparison to analyst forecasts, which are not included in the 10-Q filing itself.
Revenue grew 4.7% YoY to $13.37B, but net income fell 1.7% to $1.77B as R&D and SG&A costs rose. On the positive side, year-to-date operating cash flow surged 83.5% to $1.04B and stockholders' equity grew 12.8% to $27.41B, reflecting improved cash generation and a stronger balance sheet.
Deere's revenue increased 4.7% YoY from $12.76B to $13.37B in Q2 FY2026, demonstrating resilient top-line demand. However, this revenue growth did not fully translate to the bottom line due to rising operating costs.
Based on the financial data, key risks include margin compression from rising R&D and SG&A costs, high financial leverage with a debt-to-equity ratio of approximately 2.90, and reduced share buyback activity (down 40.3% YTD to $500M) suggesting tighter capital return flexibility. The company's significant financial services portfolio also exposes it to credit and interest rate risks.
Deere's financial health shows mixed signals: the balance sheet strengthened with equity up 12.8% to $27.41B and liabilities down 2.9%, and YTD operating cash flow nearly doubled to $1.04B. However, profitability is under modest pressure with net margin at ~13.3% and a high debt-to-equity ratio of ~2.90 reflecting the leverage inherent in its financial services business.