Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 30, 2026 · Beat 5 of last 5 quarters
Terex Corporation reported Q2 FY2026 revenue of $2.24B, a beat of 4.6% against consensus, and EPS of $1.37, a beat of 11.4%.
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Terex is a direct beneficiary of the AI infrastructure buildout through its Terex Utilities business, which is seeing accelerating demand from data center-related power needs and grid modernization. The company is expanding utility capacity by 30% by end of next year to meet this demand, and management expects solid bookings for years to come. Additionally, nonresidential construction starts, driven by data centers and energy investments, are supporting demand across Aerials and Materials Processing.
Terex delivered a strong second quarter with revenue of $2.24B, up 8.5% pro forma, and adjusted EBITDA of $269M, up 10.7% pro forma. All four segments grew revenue, with Specialty Vehicles achieving record earnings and Materials Processing expanding margins 440 bps to 18.8%. Bookings increased 25% YoY to $2.0B, and backlog reached $6.9B. The company raised full year guidance and noted progress on the strategic review of Aerials, with interest from multiple parties. Free cash flow was $101M in the quarter, and net leverage improved to 2.3x.
Management raised full year 2026 guidance, now expecting sales of $7.9B to $8.2B, adjusted EBITDA of $960M to $1.0B, and adjusted EPS of $4.70 to $5.10. The raise reflects strong first half execution, increased Aerials volume, and improved Materials Processing performance. They expect 22% incremental EBITDA margin conversion at the midpoint despite a dynamic tariff environment, and remain on track to be price/cost neutral in Aerials for the year. The company noted a pushout of refuse prebuy activity into 2027 due to EPA regulation timing, leading to a lower Environmental Solutions revenue outlook of low single-digit growth. Management expressed confidence in 2027 growth for refuse and continued strong demand in utilities, with capacity expansions in Specialty Vehicles coming online in Q4 and reaching normal run rates in 2027.
“We have interest from multiple parties and are working towards an outcome that maximizes value for our shareholders.”
on Aerials strategic review
“We no longer expect a material second-haLa Fresnaisprebuy of RCVs ahead of 2027 EPA regulations. As a result, we're updating our second-haLa Fresnaisyear segment revenue outlook to low single-digit growth.”
on Environmental Solutions outlook
“We are raising our full year guidance because of the performance we delivered in the first half and the visibility we have in the backlog and the momentum we're building.”
on Guidance raise
Can you give us a little perspective as to what's embedded in that low single-digit revenue growth outlook for Environmental Solutions, and how should we think about the effect on margins?
Simon explained that utilities demand is accelerating and capacity is being expanded, while ESG bookings are up year-over-year and sequentially, indicating momentum building for 2027. The prebuy activity is pushed out to 2027 due to EPA regulation timing. Jen added that Q3 margins will be similar to Q2, with a step-up in Q4 driven by favorable mix and reduced inefficiencies.
Could you elaborate on what you're seeing in the fire truck business and how you're thinking about Aerials margins in the back half?
Simon said they want backlog to come down as lead times improve, with a sustainable target of about a year. Aerials margins came in better than expected, with sequential improvement of 560 bps, and they expect continued quarter-over-quarter improvement in the second half, achieving price/cost neutrality for the year.
When it comes to the guide raise, is the modest EBITDA bump relative to revenue solely a function of mix?
Jen confirmed that the top line growth is primarily driven by Aerials (low double-digit growth) while the most profitable segment, Environmental Solutions, was lowered to low single-digit growth. This mix change fully explains the drop-through in margin profile. She noted 22% incremental margin year-over-year despite higher tariffs and customs accruals.