Cummins sees solid Q3, plans ‘strategic review’ of electrolyzers

Cummins Inc. reported continued strong operating results for the third quarter of 2025, driven by a growth in profits in the Power Systems and Distribution segments, said Jennifer Rumsey, chair and CEO. She attributed the growth, in part, to the continued rise in demand for backup power for data centers, as well as effective cost management across the company that helped to offset an anticipated sharp decline in the North American truck market.

Jennifer Rumsey, Cummins chair & CEO. (Photo: Cummins)

Third quarter revenues dipped 2% to $8.3 billion vs. Q3 2024. A 4% decline in sales in North America was tempered by a 2% increase in international revenues due to higher demand in China and Europe.

Net income attributable to Cummins in Q3 was $536 million, compared to $809 million in Q3 2024. The current quarter results include Accelera non-cash charges of $240 million. The tax rate in the third quarter was 32.7% due primarily to non-deductible costs related to Accelera non-cash charges and $36 million of tax costs related to the implementation of the One Big Beautiful Bill Act.

According to Rumsey, the non-cash charges related to its electrolyzer business within the Accelera segment reflect policy-driven shifts in hydrogen adoption expectations. “Due to the significantly weaker prospects for demand, we are undertaking a strategic review of the electrolyzer business,” she added.

Earnings before interest, taxes, depreciation and amortization (EBITDA) in Q3 2025 – which include the costs cited above – were $1.2 billion, or 14.3% of sales, compared to $1.4 billion, or 16.4% of sales, a year ago.

Third quarter 2025 results by business segment were as follows:

• Engine Segment – Cummins recorded sales of $2.6 billion for the segment, down 11% compared to Q3 2024. EBIDTA was $261 million, or 10.0% of sales, compared to $427 million, or 14.7% of sales. Revenues decreased 12% in North America and 5% in international markets due to lower medium-duty and heavy-duty truck demand in the United States and Mexico.
• Components Segment – Sales fell 15% to $2.3 billion compared to the prior year period. EBITDA was reported at $292 million, or 12.5% of sales, compared to $351 million, or 12.9% of sales in Q3 2024. International sales were primarily flat, while revenues in North America plunged 24% due to lower medium-duty and heavy-duty truck demand in the United States. 
• Distribution Segment - Sales rose 7% to $3.2 billion, with EBITDA of $492 million, or 15.5% of sales, compared to $370 million, or 12.5% of sales, in Q3 2024. Revenues in North America rose 13% due to increased demand for power generation, while international sales declined 3%.
• Power Systems Segment - Sales rose 18% to $2.0 billion. EBIDTA came in at $457 million, or 22.9% of sales, compared to $328 million, or 19.4% of sales. Revenues in North America leapt 20% and international sales increased 17%, driven primarily by increased power generation demand, particularly for data center markets in North America, India and China.
• Accelera Segment – Sales for the segment rose 10% to $121 million in Q3 due to higher eMobility demand. However, an EBIDTA loss of $336 million was reported due to the previously noted non-cash charges related to goodwill impairment and inventory write-downs. The company said it remains committed to pacing and focusing its zero-emissions investments on the most promising paths to ensure it is set up for long-term success as part of our Destination Zero strategy. These continued investments further contributed to the EBITDA losses.

Cummins announced it will not be providing an outlook for revenue or profitability for the remainder of 2025.

“While uncertainty in a number of our end markets persists, our strong third quarter results are a testament to our diversified portfolio, effective cost discipline and commitment to delivering for our customers,” said Rumsey. “Cummins continues to operate from a position of strength as we navigate this dynamic environment, and we look forward to reinstating our financial guidance in February when we provide our outlook for 2026.”