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Caterpillar Inc. CAT

Industrials  —  Farm & Heavy Construction Machinery
821.58 16.33 2.03% as of 25 Sep
Market cap
$373.2B
P/E
35.2×
S&P 500 Member Dividend Aristocrat Insider Buys (last 12m)
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Overview Business Profile Financial Analysis Income Statement Balance Sheet Cash Flow Metrics & Ratios 10-Q 10-K

Caterpillar Inc. (CAT) Financial Analysis

Updated · Covers results through Q2 FY2026 · How this is made

Snapshot

Caterpillar generated $67.6 billion of revenue, $8.9 billion of net income and $18.81 of diluted EPS in FY2025. Revenue growth was 4.29% in FY2025 against FY2024, while net income growth was −17.7% in FY2025 against FY2024.

In Q2 FY2026, revenue was $20.5 billion, gross profit was $7.8 billion, operating income was $4.3 billion and net income was $3.6 billion. Diluted EPS was $7.77 in Q2 FY2026. On a trailing-twelve-month basis to Q2 FY2026, revenue reached $74.7 billion and net income reached $10.8 billion.

Growth

Revenue was $67.6 billion in FY2025, growing 4.29% in FY2025 against FY2024. Revenue compound annual growth was 4.38% in FY2022–FY2025 and 10.1% in FY2020–FY2025. Diluted EPS was $18.81 in FY2025, with growth of −14.7% in FY2025 against FY2024; its compound annual growth was 14.2% in FY2022–FY2025 and 28.1% in FY2020–FY2025.

Free cash flow was $8.2 billion in FY2025, down −14.5% in FY2025 against FY2024. Free cash flow compound annual growth was 10.8% in FY2022–FY2025 and 10.4% in FY2020–FY2025. Revenue was $20.5 billion in Q2 FY2026, up 24.0% in Q2 FY2026 against Q2 FY2025. Diluted EPS was $7.77 in Q2 FY2026, up 68.2% in Q2 FY2026 against Q2 FY2025, while free cash flow was $3.5 billion in Q2 FY2026, up 47.1% on the same basis.

Profitability

Gross margin was 33.8%, operating margin was 16.5%, pre-tax margin was 17.1% and net margin was 13.1% in FY2025. Over FY2024–FY2025, gross margin changed by −4.2 percentage points, operating margin by −3.7 percentage points, pre-tax margin by −3.6 percentage points and net margin by −3.5 percentage points.

Over FY2020–FY2025, gross margin changed by 3.4 percentage points, operating margin by 5.6 percentage points, pre-tax margin by 7.5 percentage points and net margin by 5.9 percentage points. Return on equity was 43.5%, return on assets was 9.53% and return on invested capital was 12.8% in FY2025. Industry-median comparisons for these margins and returns are not reported.

Balance sheet

Total debt was $43.3 billion, net debt was $33.4 billion and cash and short-term investments were $10.0 billion in FY2025. Shareholders’ equity was $21.3 billion and working capital was $15.9 billion in FY2025.

At Q2 FY2026, net debt was $38.4 billion, compared with $39.0 billion in Q1 FY2026 and $35.3 billion in Q2 FY2025. The current ratio was 1.4× and debt to equity was 2.3× in Q2 FY2026. Book value per share was $45.36 in FY2025.

Cash flow & capital return

Operating cash flow was $11.7 billion, capital expenditure was $3.6 billion and free cash flow was $8.2 billion in FY2025. Free cash flow represented 91.9% of net income in FY2025. Operating cash flow growth was −2.46% in FY2025 against FY2024, while free cash flow growth was −14.5% in FY2025 against FY2024.

Dividends paid were $2.7 billion and net share repurchases were $5.2 billion in FY2025, for $8.0 billion of capital returned to shareholders in FY2025. Capital returned to shareholders totaled $37.3 billion in FY2021–FY2025. Weighted average shares were 470.0 million shares in FY2025, and the share count changed by −13.6% in FY2020–FY2025. In Q2 FY2026, free cash flow was $3.5 billion.

Valuation

Market capitalisation was $370.7 billion as of September 24, 2026. The P/E was 34.5× as of September 24, 2026, higher than the 17.3× five-year median as of September 24, 2026, over the five fiscal years to FY2025; it was 2.0× the five-year median as of September 24, 2026.

The P/S was 5.0× and EV/Sales was 5.5× as of September 24, 2026. P/S was higher than its 2.2× five-year median and 2.2× ten-year median as of September 24, 2026; EV/Sales was higher than its 2.8× five-year median and 2.7× ten-year median as of September 24, 2026. P/B was 19.1× as of September 24, 2026, higher than its 7.9× five-year median and 6.8× ten-year median as of September 24, 2026. Industry-median valuation comparisons are not reported.

What changed since last quarter

Revenue was $20.5 billion in Q2 FY2026, compared with $17.4 billion in Q1 FY2026, a change of 18.0% in Q2 FY2026 against Q1 FY2026. Diluted EPS was $7.77 in Q2 FY2026, compared with $5.47 in Q1 FY2026, a change of 42.0% on that basis. Free cash flow was $3.5 billion in Q2 FY2026, compared with $1.0 billion in Q1 FY2026, a change of 247.0% on that basis.

Against Q2 FY2025, Q2 FY2026 revenue changed by 24.0%, diluted EPS changed by 68.2% and free cash flow changed by 47.1%. Gross margin was 37.8% and operating margin was 20.9% in Q2 FY2026, with changes of 3.0 percentage points and 3.6 percentage points, respectively, against Q2 FY2025. No management explanation for the changes is reported.

Open questions

  • What factors drove the change in revenue between Q2 FY2025 and Q2 FY2026?
  • What caused the changes in gross margin and operating margin in Q2 FY2026?
  • What accounts for the increase in net debt from Q2 FY2025 to Q2 FY2026?
  • How are capital expenditure and capital returns expected to be funded?

This page is for information only. It is not investment advice, a recommendation or an offer to buy or sell any security. Figures may contain errors; verify against the company's filings.