Oshkosh Corp (OSK) | The Buildout — AI Infrastructure
The Verdict
Oshkosh describes itself as a global industrial technology company that builds purpose-built vehicles, equipment and integrated ecosystems. It makes JLG aerial work platforms and telehandlers, Pierce and Maxi-Metal fire apparatus, McNeilus refuse trucks, Oshkosh AeroTech airport ground-support equipment, and Oshkosh Defense tactical vehicles plus the USPS delivery van. Its tie to the AI buildout runs through Access equipment: data-center and other mega-project construction is served largely by national rental companies, which buy JLG lifts. The company does not sell to most data-center operators directly and reports no AI revenue line, so its exposure is embedded and unquantified.
| Market Cap | — |
| Revenue (TTM) | $10.6B |
| Revenue Growth | +2.2% |
| EBITDA Margin (TTM) | 9.8% |
| Net Debt | $699M |
| Earnings Beats | 4 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Demand is firm across segments: Access orders were about $1.5B in each of the last two quarters, book-to-bill 1.6 then 1.1, and FY26 Access revenue guidance was raised to growth from a prior 'modest decline.'
- Contracted multi-year revenue: remaining performance obligations of $12.2B at March 31, 2026, with $3.7B expected in the remaining nine months of 2026 and $5.3B in 2027.
- Free cash flow guidance of $550M–$650M was held through the EPS cut; Q2 2026 free cash flow was $348M.
- Defense demand: $142M FMTV A2 and $92M USMC ROGUE-Fires orders, with Oshkosh the sole-source supplier for several key DoD vehicle platforms.
- Municipal fire-apparatus unit backlog was unchanged year over year — the fire-truck problem is throughput, not orders.
What We’re Watching
- The FY26 adjusted EPS guide was cut to the range of $11 from ~$11.50, attributed to fire-truck throughput (~$0.50); management expects Q3 2026 EPS flat to down y/y and a stronger Q4.
- Transport's Q2 2026 operating income of $16M included a $17M favorable one-time NGDV item; the margin step-up depends on an additional NGDV order assumed for Q4 2026 (could be Q3).
- Refuse/recycling unit backlog fell 43.9% y/y at March 31, 2026, versus a −25% to −30% refuse revenue run-rate comment.
- Segment-level guidance has been withdrawn since Q1 2026, reducing visibility; broadening input-cost inflation at component suppliers is a risk to the price-cost-neutral guide.
The thesis looks tested rather than broken. Demand signals are firm — Access orders, defense awards, airport wins, an unchanged fire-truck unit backlog — and the company raised its Access revenue outlook. Against that, the year's earnings were cut on the company's own manufacturing transition, the explanation shifted from weather to production-system timing, and segment guidance is still withheld. The open question is whether the fire-truck throughput inflection and the Q4 NGDV order land, turning a Q4-weighted year into a confirmed timing issue rather than a serial slip.
Earnings Beat
Q2 FY2026 consolidated sales were $2.9B, up $183M or 6.7% year over year, with gross margin of 16.5%. Adjusted EPS was $2.87 and adjusted operating income $258M, down from $313M. Access sales rose 9.4% at an 11.3% adjusted operating margin, Vocational margin was 13.5%, and Transport operating income of $16M included a $17M favorable one-time NGDV item.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.9B | $2.3B | $2.7B | +6.7% |
| Gross margin | 16.5% | 13.5% | 19.2% | -270bps |
| EBITDA | $305M | $143M | $353M | −13.6% |
| EPS | $2.92 | $0.68 | $3.16 | −7.6% |
| Access book-to-bill | 1.1 | 1.6 | n/a | More than doubled y/y |
| Free cash flow | $348M | −$189M | $49M | Prior-year quarter |
the more moderate pace of improvement for firetruck throughput has reduced our expectations by approximately $0.50— Matt Field, CFO, 2026-07-28
Management tone: Management's tone moved from maintained but guarded at the Q1 2026 call to candid at the Q2 2026 call. At Q1 it withdrew segment-level guidance while holding consolidated EPS; at Q2 it cut the EPS guide and owned the cause as its own production pace. The explanation for the fire-truck shortfall shifted from weather and travel at Q1 to production-system and material-flow timing at Q2. Management quantified the ~$0.50 EPS impact and disclosed the Transport one-time item, but gave limited detail on the one-time defense warranty charge.
Management Guidance
Management guides FY26 adjusted EPS in the range of $11, cut from ~$11.50, with the reduction attributed to fire-truck throughput (~$0.50) more than offsetting Access upside. Free cash flow guidance is $550M–$650M, unchanged. Q3 2026 EPS is expected flat to down y/y, with Q4 2026 stronger than Q3 and momentum carrying into 2027. Access revenue is now expected to grow versus 2025, while Vocational margin is guided below the low end of 16%–18% and Transport revenue is ballpark $2.5B. An additional NGDV order is assumed in H2 2026 (for planning, Q4). Price-cost is expected neutral for the year, and the 2028 targets were reaffirmed.
Trajectory
Revenue grew 6.7% year over year in Q2 FY2026 to $2.92B after a flat Q1 FY2026, led by Access and a Transport delivery-vehicle step-up while Vocational was roughly flat. Gross margin was 16.5% in Q2 FY2026, down from 19.2% a year earlier; the Q1 2026 filing attributed that period's decline to unfavorable sales mix, higher tariff-related material costs and higher manufacturing overhead, partly offset by pricing. The near-term drag is fire-truck throughput rather than demand — municipal fire-apparatus unit backlog was unchanged year over year, while refuse/recycling unit backlog fell 43.9%. Management expects Q3 2026 EPS flat to down and a stronger Q4.
The Model
The model projects FY+1 revenue of $11,200M and EBITDA of $1,142M (10.2% margin), rising to FY+2 revenue of $12,070M and EBITDA of $1,388M (11.5% margin). The near-term anchor is the ramp in fire-truck throughput and the second-half NGDV production the company has described. FY+2 depends on the fire-truck production-rate increase completing, NGDV full-rate production with a follow-on order, and Access holding its mega-project demand.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $10.4B | $11.2B | $12.1B |
| YoY Growth | — | +7.5% | +7.8% |
| EBITDA | $1.2B | $1.1B | $1.4B |
| EBITDA Margin | 11.2% | 10.2% | 11.5% |
Projections are the median of 5 independent model runs. The model’s revenue sits 2.2% above analyst consensus.
Management guides FY26 adjusted EPS in the range of $11, cut from ~$11.50, with the reduction attributed to fire-truck throughput (~$0.50) more than offsetting Access upside. Free cash flow guidance is $550M–$650M, unchanged. Q3 2026 EPS is expected flat to down y/y, with Q4 2026 stronger than Q3 and momentum carrying into 2027. Access revenue is now expected to grow versus 2025, while Vocational margin is guided below the low end of 16%–18% and Transport revenue is ballpark $2.5B. An additional NGDV order is assumed in H2 2026 (for planning, Q4). Price-cost is expected neutral for the year, and the 2028 targets were reaffirmed.
What Could Go Right — and Wrong
- Fire-truck throughput visibly inflects in Q3/Q4 2026, confirming the missed quarter as a finite timing issue and de-risking 2027–2028.
- The additional NGDV order lands in Q3 or Q4 2026, lifting Transport margin and giving the supply chain a defined go-forward mix.
- Access private/non-res construction inflects (possible late 2026/early 2027), broadening and mix-improving the Access order book.
- Refuse order flow inflects, with recovery arriving ahead of the −25% to −30% revenue run-rate management assumes.
- Access price-cost turns favorable as tariffs lap, and segment-level guidance returns.
- Fire-truck throughput slips past Q4 2026, turning the Q4-weighted year into a serial timing reset and putting the 2028 targets in question.
- The NGDV follow-on order slips beyond Q4 2026, impairing the Transport margin recovery and the back-half free-cash-flow weighting.
- Refuse stays weak past 2027 — the −43.9% unit backlog proving the leading indicator.
- Access order momentum fades, or mix stays skewed to margin-dilutive national rentals without a price-cost offset.
- Input-cost inflation broadens at component suppliers, breaking the price-cost-neutral guide.
Looking Ahead
The next 12 months turn on execution. Management has guided Q3 2026 EPS flat to down y/y and Q4 2026 stronger than Q3, with the year's recovery resting on fire-truck throughput, the NGDV ramp and the additional NGDV order, and defense repricing in H2 2026. Access demand — mega projects and data centers, served through national rental companies — is described as firm. Refuse recovery and a private/non-res inflection are framed as upside not in guidance.
- Q3 2026Q3 2026 results — EPS guided flat to down y/y; first read on fire-truck shipments.
- Q4 2026Fire-truck production ramp — Tests whether throughput inflects and the Q4 recovery holds.
- Q4 2026Additional NGDV order — Assumed for Q4; gates Transport margin and FCF back half.
- H2 2026FMTV repricing — Revised defense contract pricing steps up in the second half.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $10.7B | $10.4B | $10.6B | -2.9% |
| Gross Margin | 18.4% | 17.4% | 15.9% | 90bps |
| EBITDA | $1.2B | $1.2B | $1.0B | -3.4% |
| EBITDA Margin | 11.3% | 11.2% | 9.8% | 6bps |
| Net Income | $681M | $647M | $556M | -5.0% |
| Free Cash Flow | $269M | $590M | $1.1B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)15.9%
- EBITDA Margin (TTM)9.8%
- Net Margin (TTM)5.2%
- ROIC12.1%
- FCF Conversion111.0%
- SBC / Revenue0.4%
The Company
Oshkosh describes itself as a global industrial technology company that designs and deploys advanced technologies, building purpose-built vehicles, equipment and integrated ecosystems for construction, firefighting, aviation, refuse collection, defense and delivery. JLG is described in the 10-K as a leading designer and manufacturer of aerial work platforms and telehandlers, and Jerr-Dan makes towing and recovery vehicles. Pierce and Maxi-Metal build municipal fire apparatus; Oshkosh AeroTech makes airport ground-support and gate equipment; McNeilus builds refuse and recycling trucks. Under Oshkosh Defense, the company makes heavy, medium and light tactical vehicles and the Next Generation Delivery Vehicle for the U.S. Postal Service.
Oshkosh reports in three segments — Access, Vocational and Transport — and lists 15 plants across the U.S., the U.K., Canada and Mexico. Access plants sit in Pennsylvania, Tennessee and Leicester UK; Vocational plants in Wisconsin, Minnesota, Florida, Oregon, Tennessee, Quebec and Ciudad Juarez, Mexico; and Transport in Spartanburg, South Carolina. Assembly draws on the company's own internal component plants as well as outside suppliers, and the 10-K states Oshkosh is the sole-source supplier for several key vehicle platforms to the DoD.
Business Segments
Competitive Landscape
Oshkosh competes in defined sets across its segments. In aerial work platforms the 10-K lists Genie/Terex, Skyjack/Linamar, Haulotte, XCMG and Zhejiang Dingli; in fire apparatus, Rosenbauer and REV Group (Terex); in refuse, Environmental Solutions Group (Terex), New Way Trucks (Federal Signal) and Labrie Enviroquial. Terex is the only verified counterparty in the evidence set, a direct competitor in aerial lifts, fire trucks and refuse. Terex's improving fire throughput and a large Chicago municipal win contrast with Oshkosh's throughput-driven cut, which the source reads as Oshkosh's fire problem being company-specific execution rather than a soft industry.
- Terex (TEX)The only verified counterparty, a direct competitor in aerial lifts, fire trucks and refuse. Its Q2 2026 Aerials bookings rose 71% and backlog 28%, and Specialty Vehicles EBITDA margin rose 210 bps on improved fire throughput — a contrast with Oshkosh's throughput-driven cut.
- XCMGNamed in the 10-K aerial work platform competitive set; not otherwise discussed.
- Zhejiang DingliNamed in the 10-K aerial work platform competitive set; not otherwise discussed.
- RosenbauerNamed in the 10-K fire apparatus competitive set; not otherwise discussed.
- BAE SystemsNamed in the 10-K defense vehicle competitive set; not otherwise discussed.
Supply Chain
Oshkosh sits downstream of component suppliers and upstream of fleet customers. It buys engines, chassis, axles and batteries, and sells largely through national equipment-rental companies, government agencies and municipalities. No neighbor in the source set names Oshkosh directly.
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