Terex Corporation (TEX) | The Buildout — AI Infrastructure
The Verdict
Terex is a global industrial equipment manufacturer whose products support maintenance, manufacturing, energy, waste, recycling, construction, and utility end markets. Its utility equipment is tied to U.S. grid investment driven by data-center expansion and AI; its 3rd Eye smart-truck technology is an actual AI-based product line; and its materials processing machines and new Specialty Vehicles serve infrastructure and emergency-service demand.
| Market Cap | — |
| Revenue (TTM) | $6.7B |
| Revenue Growth | +29.2% |
| EBITDA Margin (TTM) | 9.3% |
| Net Cash | $403M |
| Earnings Beats | 5 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Pro forma 2025 revenue was about 80% North American, with roughly 85% of that manufactured in the United States.
- Terex Utilities was the fastest-growing Q1 business and is adding 30% capacity by end-2027 to meet grid/data-center demand.
- Materials Processing Q1 bookings rose 38% pro forma, and backlog rose 53% to $594 million.
- Specialty Vehicles produced $436 million in its first two months and is achieving REV's 2027 margin profile one year early.
- Q2 press release raised full-year guidance to $7.9–$8.2 billion sales and $960 million–$1.0 billion adjusted EBITDA.
What We’re Watching
- Aerials Q1 adjusted EBITDA was breakeven despite a 132% book-to-bill; full-year 2026 guidance still assumes sales and margin similar to 2025.
- Management says Specialty Vehicles bookings should eventually decline as lead times improve and backlog normalizes from about two years toward one year.
- Environmental Solutions Q1 ESG volume was lower; ESG orders are expected to be second-half weighted, including deliveries ahead of the 2027 EPA regulations.
- The Aerials strategic review has no deadline; a sale could remove the Genie/Apptronik robotics collaboration from the portfolio.
The operating thesis strengthened after the July 30 guidance raise, which confirmed the Q1 order momentum was real rather than a one-quarter signal. The open question is whether AI-linked utility demand gets separately disclosed or stays embedded, and what the Aerials strategic review ultimately leaves in the portfolio.
Earnings Beat
Second-quarter 2026 revenue was $2.2 billion, up 50.5% reported and 8.5% pro forma. Gross margin was 19.8%. EBITDA was $273 million on a reported basis, or 12.2% of sales; adjusted EBITDA was $269 million, or 12.0% of sales.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.2B | $1.7B | $1.5B | +50.5% |
| Gross margin | 19.8% | 11.9% | 19.6% | +20bps |
| EBITDA | $273M | −$5M | $170M | +60.6% |
| EPS | $1.66 | $-1.34 | $1.09 | +51.9% |
| Pro forma bookings | $2.0 billion | $2.1 billion | n/a | +25.2% pro forma YoY |
Management tone: No earnings call on record for the latest period.
Management Guidance
On July 30, 2026, Terex raised its full-year 2026 outlook to sales of $7.9–$8.2 billion and adjusted EBITDA of $960 million–$1.0 billion, with a midpoint adjusted EBITDA margin of 12.2%. The Q2 press release did not include an updated EPS range or updated segment-level guidance.
Trajectory
Revenue moved from $1.7 billion in Q1 2026 to $2.2 billion in Q2 2026. The first quarter was the first with Specialty Vehicles for two months, and its gross margin was depressed by the $112 million REV inventory step-up; by Q2, gross margin recovered to 19.8%. The forward indicators are stronger than the P&L in places: Q1 pro forma bookings were $2.1 billion, a 109% book-to-bill, Materials Processing backlog was up 53%, and Aerials carried a 132% book-to-bill despite breakeven EBITDA.
The Model
The model projects FY+1 revenue of $7,900 million and EBITDA of $988 million, a 12.5% margin. For FY+2, the model projects revenue of $8,600 million and EBITDA of $1,170 million, a 13.6% margin. The FY+1 anchor is the enlarged portfolio after the REV Specialty Vehicles addition plus utility grid demand; FY+2 assumes utility capacity and Specialty Vehicles capacity additions convert as Aerials recovers.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $5.4B | $7.9B | $8.6B |
| YoY Growth | — | +45.7% | +8.9% |
| EBITDA | $634M | $988M | $1.2B |
| EBITDA Margin | 11.7% | 12.5% | 13.6% |
Projections are the median of 5 independent model runs. The model’s revenue sits 0.8% above analyst consensus.
On July 30, 2026, Terex raised its full-year 2026 outlook to sales of $7.9–$8.2 billion and adjusted EBITDA of $960 million–$1.0 billion, with a midpoint adjusted EBITDA margin of 12.2%. The Q2 press release did not include an updated EPS range or updated segment-level guidance.
What Could Go Right — and Wrong
- Utilities +30% capacity comes online by end-2027 and grid/data-center capex keeps flowing into orders.
- Specialty Vehicles capacity additions reduce lead times and convert roughly two years of backlog at better margins.
- Materials Processing bookings remain strong beyond dealer restocking as end-user demand and RPO conversions continue.
- Aerials' 132% book-to-bill and roughly $1 billion backlog convert to EBITDA improvement in 2027.
- 3rd Eye expands into utility, cement, and emergency vehicles and becomes a disclosed digital revenue layer.
- Utility orders turn lumpy or capacity ramp slips, leaving the AI-linked grid story embedded and unmeasurable.
- Specialty Vehicles bookings fall faster than production as lead times normalize, misread as demand weakness.
- Environmental Solutions ESG volume remains lower and second-half order timing slips, delaying the expected margin improvement.
- Aerials stays breakeven or the strategic review removes the Apptronik/Genie optionality.
- Tariff policy reverses and the Section 232/IEEPA offsets that made recent tariff changes negligible disappear, reopening margin pressure.
Looking Ahead
The next 12 months hinge on execution of capacity and order conversion. Management expects ESG orders to be second-half weighted, including deliveries ahead of the 2027 EPA regulations; Specialty Vehicles capacity mostly comes online in Q4 2026 with volume impact in 2027; Utilities capacity targets end-2027. The Aerials strategic review and a possible bookings normalization in Specialty Vehicles are the main portfolio-shape and sentiment tests.
- H2 2026ESG prebuy orders — Second-half weighted ESG orders expected, including ahead of 2027 EPA rules.
- Q4 2026Specialty Vehicles capacity online — Ocala +35% ladder truck capacity mostly online; volume impact mostly 2027.
- End of 2027Utilities +30% capacity — Waukesha and Birmingham phased capacity completion.
- No deadlineAerials strategic review outcome — Transaction, close, or formal conclusion; through-cycle process.
- Within 24 months of closeREV synergy run-rate — $75 million run-rate target.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $5.1B | $5.4B | $6.7B | +5.7% |
| Gross Margin | 20.7% | 19.4% | 17.7% | 138bps |
| EBITDA | $608M | $634M | $4.1B | +4.3% |
| EBITDA Margin | 11.9% | 11.7% | 9.3% | 17bps |
| Net Income | $336M | $221M | $149M | -34.2% |
| Free Cash Flow | $189M | $322M | $2.0B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)17.7%
- EBITDA Margin (TTM)9.3%
- Net Margin (TTM)2.2%
- ROIC6.7%
- FCF Conversion54.3%
- SBC / Revenue0.1%
The Company
Terex is a global industrial equipment manufacturer. After the REV Group deal closed in February 2026, it operates four segments: Environmental Solutions, Materials Processing, Specialty Vehicles, and Aerials. Its utility equipment ties the company to U.S. grid spending driven by data-center expansion and AI; 3rd Eye is an AI-based smart-truck system; Materials Processing machines support roads, bridges, and aggregate work; Specialty Vehicles makes fire and emergency vehicles.
Manufacturing spans North America, Europe, and Asia Pacific. Pro forma 2025 results were about 80% North American, with roughly 85% of that manufactured in the United States. The company is adding 30% utility capacity by end-2027 and 35% ladder-truck capacity at Ocala, Florida, while REV integration workstreams are at or ahead of schedule.
Business Segments
Competitive Landscape
The provided SEC extracts do not include a competitor table. The financial context notes that if Terex cannot deliver, substitute equipment from Oshkosh, Caterpillar, and others is readily available.
- OshkoshIdentified in the financial context as a substitute equipment provider if Terex cannot deliver.
- CaterpillarIdentified in the financial context as a substitute equipment provider if Terex cannot deliver.
Supply Chain
Terex delivers machines to utility, waste, aggregate, construction, and fire/emergency end markets. The 10-K risk extract says some businesses receive materials and components from limited or single-source suppliers but names no specific counterparties; wiring output infers Volvo as a supplier of MD Electric chassis for electric utility trucks.