AGCO Corporation (AGCO) Business Profile

What it does

AGCO makes agricultural machinery and precision agriculture technology for farmers. Its equipment includes tractors, combines, planting machines, hay and forage equipment, and machines that apply fertilizer and crop-protection chemicals. It also sells replacement parts for the equipment it makes, including products no longer in production.

Its brands include Fendt, Massey Ferguson, Valtra and PTx. Tractors range from compact machines used on small farms and for landscaping to high-horsepower machines used in large-scale crop production. Combines harvest grain crops such as corn, wheat, soybeans and rice. AGCO sells most of its products to independent dealers and distributors, which in turn sell equipment to farmers and provide service.

PTx is AGCO’s precision agriculture business. Its technology includes satellite-based steering, field-data collection and yield mapping. Some products are installed on new machines; others can be added to existing equipment, including machines made by other manufacturers. AGCO also offers autonomous technology for tasks such as operating a grain cart or tilling a field.

AGCO was incorporated in 1991. Eric Hansotia is its chairman, president and chief executive officer. AGCO also provides equipment financing through joint ventures with Rabobank, although it sold its interests in the U.S. and Canadian finance joint ventures in 2026.

How it makes money

AGCO earns revenue by selling machinery, precision agriculture technology and replacement parts. It sells a large majority of those products to independent dealers and distributors. The company also sells precision agriculture solutions to other equipment manufacturers and provides financing through joint ventures.

Net sales were $10,082.0 million for 2025 and approximately $2.3 billion for the third quarter of 2026. Third-quarter net sales were 8.6% lower compared with the prior year.

Tractors are the largest product category. AGCO’s tractor range serves different farm sizes and uses, while combines, planters and other equipment address separate stages of the crop cycle. Tractors and combines together comprised approximately 68.8% of net sales in 2025. AGCO organizes its reporting segments by geography, with each distributing agricultural machinery and precision technology.

Replacement parts provide sales after the original equipment purchase. AGCO maintains parts for products no longer in production and says most of its products can be economically maintained with parts and service for a period of 10 to 20 years. In the third quarter of 2026, replacement parts sales were $506 million. AGCO says farmers continued to prioritize maintenance while being more cautious about equipment investment.

Pricing, product mix and currency movements affect revenue alongside the number of machines sold. AGCO estimates worldwide average price increases were approximately 1.1% in 2025. It offers sales incentives, including financing incentives, through dealers. Its finance joint ventures can provide retail financing to equipment buyers and wholesale financing for dealer inventories. AGCO sold its equity interests in the U.S. and Canadian finance joint ventures in 2026; its joint ventures also serve other markets.

Customers and how it sells

AGCO sells to independent dealers, distributors and other customers, including equipment manufacturers that buy PTx technology. Dealers sell machinery to end users and handle after-sales service and support. Some distributors operate through their own dealer networks, while others also sell directly and provide customer support.

The company distributes most of its products through approximately 2,800 independent dealers and distributors in approximately 140 countries. Its sales are not dependent on any specific dealer, distributor or group of dealers. AGCO monitors dealer performance and provides sales incentives, demonstrations, advertising support and tools for sales and servicing.

AGCO operates through geographic segments covering Europe and the Middle East, North America, South America, and Asia/Pacific/Africa. Its products serve farms ranging from small operations and specialty agricultural businesses to large row-crop farms. Applications include livestock and dairy, orchards and vineyards, and grain production.

Dealer sales to farmers are seasonal, reflecting planting and harvesting schedules. In some markets, particularly North America, there can be a lag between AGCO’s sale to a dealer and the dealer’s sale to a farmer. AGCO attempts to ship to its distribution network on a level basis through the year to reduce seasonal pressure on manufacturing and inventory.

Suppliers and costs

AGCO manufactures and assembles products globally, while buying some complete machinery, components and replacement parts from outside suppliers. Its AGCO Power division makes diesel engines used in a majority of its tractors, combines and sprayers, and also sells engines to third parties. The company says it balances internal manufacturing with externally sourced products to manage costs, inventories and component supply.

Outside suppliers provide complete tractors and other machinery as well as components used in AGCO’s factories. AGCO has experienced supply disruptions for components such as semiconductors and says future disruptions are possible. It also develops some supplier products or parts to its own design requirements.

Manufacturing costs, engineering, selling and administrative expenses are important costs. Lower production volumes can leave factory costs spread over fewer units: AGCO attributed part of its third-quarter 2026 adjusted operating-margin decline to lower factory absorption from reduced production. Tariffs have raised the costs of some manufacturing inputs. AGCO is using sourcing, pricing and cost initiatives to mitigate tariff effects, but says it cannot guarantee that it will fully offset them.

Competitive position

AGCO competes in agricultural machinery with large full-line suppliers and with manufacturers focused on narrower product categories or specialties. Its principal worldwide competitors are Deere & Company and CNH Industrial N.V. Technology companies and start-ups are also entering agricultural markets as technology plays a greater role across the crop cycle.

AGCO says equipment buyers consider dealer quality, product quality and price, brand loyalty, availability, financing terms and customer service. Its dealers sell and service machinery, while AGCO supports them with sales programs, warranties and parts availability. FarmerCore adds mobile, digital and on-farm service to the distribution model.

Our reading: The dealer and service network is a meaningful source of competitive strength because it helps AGCO reach farmers and support machines after purchase, although buyers can also choose established competing networks.

PTx offers technology that can be added to existing equipment and used across mixed-brand fleets. AGCO also owns or licenses patents, trademarks and brand names; it says it is not dependent on any single patent or group of patents.

Our reading: Mixed-fleet technology and recognized brands can help AGCO reach customers beyond its own machinery base, but the presence of full-line manufacturers and technology entrants limits the protection those assets provide.

Growth opportunities

AGCO is investing in precision agriculture, automation and digital tools alongside its machinery business. PTx combines Precision Planting and the PTx Trimble joint venture. Its products can be installed at the factory, supplied to equipment manufacturers or retrofitted to machines already in use, including mixed-brand fleets.

FarmENGAGE is a mixed-fleet platform designed to deploy work plans, track fieldwork and collect data across machines. AGCO’s OutRun technology enables autonomous grain-cart and tillage operations. Its Symphony products target crop-protection application. AGCO expects its precision products and related technology to contribute to equipment sales and revenue growth.

The company is also expanding FarmerCore with its dealers. The model brings service, parts and support closer to farmers through mobile, digital and on-farm service. AGCO says building its technology dealer channel is the main constraint on scaling PTx.

AGCO estimates that tractor fleets have been aging and says replacement needs should support demand when farm economics improve. The company expects some industry recovery in 2027, although it says the timing and pace will vary by market. For 2026, AGCO expects full-year net sales of between $9.8 billion and $10 billion. It also projects production hours to be approximately 5% below 2025 as it aligns output with retail demand and dealer inventory needs.

Structural risks

• Farm economics and weather: Demand for agricultural equipment is cyclical. Farm income, commodity prices, financing costs, weather, crop yields and government policies affect farmers’ equipment purchases. AGCO says higher input costs, European drought and pressure on commodity prices have weakened farmer sentiment.

• Dealer inventory and production: AGCO can sell equipment to dealers before it reaches farmers. In the third quarter of 2026, Latin American dealer inventory was just under five months of supply, above the company’s three-month target. AGCO is reducing production and shipments to reflect demand.

• Supply chain and tariffs: AGCO relies on outside suppliers for machinery and components and has previously experienced component disruptions. Tariffs have increased some input costs, while changes in trade policy can affect sales and access to markets.

• Product development: AGCO’s long-term results depend on successfully introducing and marketing new products. Development requires substantial spending, and success depends on product performance, customer acceptance, suppliers and manufacturing execution.

• Financial and operating exposure: Currency and interest-rate volatility can hurt performance. AGCO also says indebtedness can limit financial flexibility, while union and collective-bargaining obligations expose it to potential work interruptions and higher costs.

Bottom line

Our reading

AGCO is a machinery business tied to farmers’ ability and willingness to invest, with parts sales and precision technology extending its relationship with customers beyond a new equipment purchase. Its dealer network and mixed-fleet offerings support its reach, but they do not remove exposure to farm cycles or competing suppliers. Current production cuts and dealer inventory levels show how weaker retail demand can affect both factory economics and the distribution channel.