AI Takeaway
PACCAR (PCAR) reported a significant revenue decline of 15.5% to $28.4B in FY2025, with net income falling 42.9% to $2.4B, reflecting a cyclical downturn in truck demand, though the company maintained strong operating cash flow of $4.4B and grew stockholders' equity by 10%.
Revenue
$28.44B
-15.50% YoY
EPS (Basic)
$4.52
-42.93% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
PACCAR's total revenue fell 15.5% year-over-year from $33.7B to $28.4B in FY2025, reflecting a broad cyclical downturn in the commercial truck market. This is consistent with industry-wide demand normalization following elevated post-pandemic order levels.
Source: Source: 10-K Income Statement, Financial Data
Net income dropped 42.9% from $4.2B to $2.4B, with net margin contracting to 8.4% from approximately 12.4% in the prior year. The sharper decline in earnings relative to revenue reflects the impact of fixed cost absorption on profitability as volumes declined.
Source: Source: 10-K Income Statement, Financial Data
Cost of revenue declined 12.8% to $22.7B, and both R&D ($445.5M, -1.6%) and SG&A ($735.8M, -1.1%) expenses were held relatively flat, demonstrating disciplined cost management even as the top line contracted significantly.
Source: Source: 10-K Income Statement, Financial Data
2 more insights available
Upgrade to unlockPACCAR's revenues are highly sensitive to the cyclical nature of the commercial trucking industry. The 15.5% revenue decline in FY2025 illustrates how quickly demand can contract, compressing earnings by nearly 43%. Prolonged downturns could further pressure margins and cash generation.
Source: Source: 10-K Income Statement, Financial Data
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $1.06 versus the $1.08 analyst consensus — a -2.1% miss for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $28.44B | $33.66B | -15.50% |
Cost of Revenue | $22.74B | $26.07B | -12.78% |
Net Income | $2.38B | $4.16B | -42.92% |
EPS (Basic) | $4.52 | $7.92 | -42.93% |
EPS (Diluted) | $4.51 | $7.90 | -42.91% |
R&D Expense | $445.5M | $452.9M | -1.63% |
SG&A Expense | $735.8M | $744M | -1.10% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $44.34B | $43.42B | +2.11% |
Stockholders' Equity | $19.26B | $17.51B | +10.04% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $4.42B | $4.64B | -4.85% |
Investing Cash Flow | $-2.27B | $-4.49B | +49.48% |
Financing Cash Flow | $-3.08B | $-123.1M | -2403.98% |
Dividends Paid | $2.27B | $2.29B | -0.94% |
Share Buybacks | $36.1M | $4.5M | +702.22% |
D&A | $398.2M | $398.4M | -0.05% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Net Margin | 8.4% | — | — |
ROE | 12.3% | — | — |
ROA | 5.4% | — | — |
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PACCAR's revenue declined 15.5% to $28.4B in FY2025, down from $33.7B in FY2024, driven by a cyclical softening in commercial truck demand. Net income fell more sharply by 42.9% to $2.4B, reflecting operating leverage as fixed costs were absorbed over a lower revenue base.
The key takeaways from PCAR's FY2025 10-K are a significant cyclical revenue and earnings decline, disciplined cost management (R&D and SG&A held nearly flat), and strong operating cash flow of $4.4B that supported $2.3B in dividends. Stockholders' equity grew 10% to $19.3B, indicating balance sheet resilience despite the downturn.
Yes, PACCAR paid $2.3B in dividends in FY2025, nearly flat compared to $2.3B in FY2024 (-0.9%), demonstrating the company's commitment to returning capital to shareholders even during a cyclical earnings decline. The company also increased share buybacks significantly to $36.1M from just $4.5M in FY2024.
Based on the financial data, key risks include cyclical commercial truck demand volatility (evidenced by the 15.5% revenue drop), operating leverage risk that amplified the earnings decline to 42.9%, and the challenge of sustaining R&D investment for EV and autonomous truck development while managing a cyclical downturn. Financial services credit risk also remains a concern given PACCAR's large asset base of $44.3B.
Despite the earnings decline, PACCAR remains financially healthy with $4.4B in operating cash flow, a 10% increase in stockholders' equity to $19.3B, and an ROE of 12.3%. The company's ability to sustain its dividend program and grow its equity base during a cyclical downturn reflects a strong underlying financial position.