Overview and Conclusion Results for the quarter exceeded expectations, primarily driven by a one-time IEEPA tariff refund of $272 million, though core operations met forecasts. Performance across diversified segments was mixed.

Key Data Total net sales of $13.369 billion, up 5% YoY; net income of $1.773 billion, EPS of $6.55; equipment operating margin of 16.9% (refund contributed nearly 2.5 percentage points).

Business Progress Construction & Forestry net sales rose 29%, with order backlog up over 60% since November; Small Ag & Turf increased 16%, with market share growing in South America. Sales of six new ADAR/ADAR X tractors, See & Spray software upgrades, and JDLink Boost kits grew 25% QoQ, while monthly active digital users approached 440,000, strengthening long-term competitiveness.

Guidance and Outlook Full-year net income guidance maintained at $4.5–5.0 billion; Construction & Forestry net sales guidance raised to approximately 20% growth; Financial Services net income guidance raised to $860 million.

Risk/Highlight Signals Negative signals: South America ag equipment industry outlook revised down to a 15% decline; tariff costs of approximately $1.2 billion for the year (3% margin headwind); large ag customer sentiment weak. Positive signals: Strong construction demand with orders covering over 80% of production; improved inventory management.