Financial Health Snapshot
What do Deere's latest financial snapshot metrics show?
Deere's financial health looks Strong, with improved recent earnings power as the best factor and cycle-sensitive demand plus debt as the main concern.
Using FY2025 and Q2 2026 as the latest comparable health view, this snapshot blends growth, profitability, cash generation, balance-sheet capacity, and capital efficiency. For a broader company background, see Deere & Company (DE): History, Ownership, Mission, How It Works & Makes Money.
FY2025 showed worldwide net sales and revenues of $45684B, net income of $5027B, and EPS of $1850, with net income growth of -2920% YoY and EPS growth of -2779% YoY, while Q2 2026 showed net income of $1773B, net sales and revenues of $13369B, and EPS of $655, which points to a rebound from the cycle trough.
The first metric to study more closely is revenue growth, because it shows whether Deere's rebound is broad enough to support profit recovery.
Cycle Quality
Are Deere & Company sales and earnings holding up through the cycle?
Mixed. Deere & Company’s latest quarter shows clear earnings improvement, but FY2025 was weak and management still sees 2026 as the projected bottom of the large agriculture equipment cycle. The clearest confirmation is the Q2 2026 rebound in sales, operating income, net income, and EPS.
Investors should separate how much Deere & Company is growing from how good that growth is. Revenue can rise on a short-cycle bounce, but quality looks better when operating income, net income, and EPS improve across the same annual or quarterly period. For background on the business model, see Deere & Company (DE): History, Ownership, Mission, How It Works & Makes Money.
| Measure | Latest Period | Previous Period | Quality Test | Investor Meaning |
|---|---|---|---|---|
| Revenue | $1337B, Q2 2026, 500% YoY | $45684B, FY2025 | Mixed; segment-led improvement, but the period comparison is not like-for-like | Improvement looks real, but cycle timing still matters |
| Operating Income | $301B, 2026-05-03 | FY2025 not supplied | Improved in the latest quarter | Better operating leverage supports the revenue rebound |
| Net Income | $177B, 2026-05-03 | $5027B, FY2025 | Improved versus the prior full year | Final earnings are stronger, but FY2025 showed a sharp drop |
| Diluted EPS | $655, 2026-05-03 | $1850, FY2025 | Per-share earnings improved in the quarter | Shareholders saw a better current result than the full-year baseline |
How durable is Deere & Company revenue through the cycle?
The strongest durability signal is Deere & Company’s mix of equipment, aftermarket, software, and financial services. The biggest limitation is heavy exposure to the agriculture equipment cycle, which CEO John May said should bottom in 2026.
- Demand Quality: Recurring aftermarket, software, and financing help, but core equipment demand remains cyclical and tied to farm and construction spending.
- Pricing and Volume: The prompt shows a strong Q2 2026 rebound, but the price-volume split is not supplied.
- Diversification: Deere & Company spans Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services, but agriculture still drives the cycle.
That mix supports better cash conversion when volumes recover.
Profitability and cash quality
Does Deere & Company turn accounting profit into dependable cash?
Deere & Company’s margins improved sharply in the latest 2026-05-03 period, with operating income recovering to $301B from $156B and $190B in the two prior periods. The supplied cash-flow growth data points to stronger operating and free cash generation, but the cash-flow statement dollar amounts are not provided, so full confirmation is limited.
Gross profit, operating income, and net income are separate profit layers, so they do not mean the same thing as cash. Deere & Company reported $510B gross profit, $301B operating income, and $177B net income for 2026-05-03, while cash conversion still depends on operating cash flow, capital spending, working capital, and dividend payments such as the $147 per share declared in Q2 2026. For mission and strategy context, see Mission Statement, Vision, & Core Values (2026) of Deere & Company (DE).
| Measure | Latest Period | Previous Period | Verified Driver | Investor Meaning |
|---|---|---|---|---|
| Gross Margin | 38.1% for 2026-05-03 | Unavailable from supplied data | Gross profit of $510B on $1337B revenue; tariff costs and mix can pressure this if not offset by pricing or productivity. | Shows product economics are still solid, but cost discipline matters. |
| Operating Margin | 22.5% for 2026-05-03 | Unavailable from supplied data | Operating income improved to $301B from $156B and $190B, showing a recent recovery in operating leverage. | Suggests scale and cost control are improving efficiency. |
| Net Margin | 13.2% for 2026-05-03 | Unavailable from supplied data | Net income was reduced by $71200M interest expense and $51800M tax expense after $229B income before tax. | Confirms Deere & Company still converts operations into bottom-line profit, but financing and tax costs take a meaningful bite. |
| Operating Cash Flow | Growth data only: 31708% for 2026-05-03 | Previous value not supplied | Cash-flow growth improved strongly, but the dollar operating cash flow figure is not supplied. | Suggests earnings quality improved, but exact cash conversion cannot be verified. |
| Free Cash Flow | Unavailable; growth: 15539% for 2026-05-03 | Previous value not supplied | Growth Capital Expenditure was -5378%, signaling spending direction rather than a dollar capex figure. | Indicates more cash may remain after investment, but reinvestment demands still need the actual capex bridge. |
What most affects Deere & Company’s cash conversion?
The strongest verified driver is the sharp improvement in operating cash flow growth, alongside capex direction and working-capital effects that are not fully quantified in the supplied data.
- Main Driver: Operating income recovery and strong cash-flow growth look more structural than temporary, but tariff costs can still pressure margins.
- Evidence Gap: The supplied data does not provide operating cash flow, free cash flow, or working-capital dollar amounts.
- Metric to Monitor: Watch operating cash flow, capex, and dividend coverage.
Liquidity Check
Can Deere & Company’s balance sheet support its obligations and investment needs?
Mixed. Deere & Company has meaningful liquidity and a large asset base, but debt is also heavy, so the main protection is $934B of cash and short-term investments while the main financing concern is $2,156B of short-term debt and refinancing pressure.
Cash alone does not answer the question. You also have to weigh working capital, asset quality, debt service, solvency, liquidity, and refinancing together. Deere & Company’s structure is also shaped by Financial Services, which naturally raises asset and debt intensity; for background, see Deere & Company (DE): History, Ownership, Mission, How It Works & Makes Money.
| Area | Latest Evidence | Assessment | Investor Meaning |
|---|---|---|---|
| Cash and Working Capital | Cash And Cash Equivalents $791B, Short Term Investments $143B, Cash And Short Term Investments $934B, Total Current Assets $2768B, Total Current Liabilities $3521B, Net Receivables $1015B, Inventory $819B, Total Payables $1365B, Account Payables $1365B. | Mixed | Near-term obligations look manageable, but current liabilities are larger than current assets, so investment spending still depends on steady cash generation. |
| Total and Net Debt | Total Debt $6382B, Short Term Debt $2156B, Long Term Debt $4226B, Net Debt $5592B; Total Debt was $6280B on 2026-02-01 and $6394B on 2025-11-02. | Mixed | Leverage is high, but debt has not risen sharply across the supplied periods, so the bigger issue is flexibility, not a sudden jump in borrowing. |
| Debt Service and Refinancing | Short Term Debt $2156B is the key funding item; no maturity schedule, interest expense, or coverage ratio was supplied. | Mixed | Deere & Company likely needs consistent access to funding markets, so refinancing conditions matter a lot if operating cash flow weakens. |
| Asset Quality | Total Assets $10700B, Property Plant Equipment Net $1555B, Goodwill $451B, Intangible Assets $97500M, Long Term Investments $4902B, Total Investments $5045B. | Mixed | The asset base is large, but investors should watch whether finance-related assets and intangibles keep their value in a downturn. |
| Liabilities and Equity | Total Liabilities $7954B, Total Stockholders Equity $2741B, Total Equity $2746B. | Mixed | The capital base is sizable, but liabilities remain much larger, so the balance sheet can absorb stress only if earnings and funding stay stable. |
What balance-sheet risk matters most for Deere & Company?
Refinancing risk matters most, led by $2,156B of short-term debt. Cash helps, but the debt load and finance-arm structure mean investors should watch near-term funding access, not just book equity.
- Current Exposure: $2,156B of short-term debt against $934B of cash and short-term investments.
- Protection: Total Assets $10700B and Total Equity $2741B provide a large capital base.
- Warning Signal: Watch whether current liabilities and short-term debt keep rising faster than cash.
Capital Efficiency
Are Deere's returns strong enough to support reinvestment?
Deere & Company looks Strong on capital efficiency, and internal cash appears likely to cover core reinvestment needs. The balance is less certain for heavy acquisition activity and cycle-driven expansion, so debt capacity still matters.
Return quality has to be judged alongside leverage, asset intensity, capital expenditure, working capital, and any external funding need. Deere & Company’s large debt load and major investment base can lift or distort return ratios, so the real test is whether operating earnings and cash flow can fund reinvestment through the cycle. For mission context, see Mission Statement, Vision, & Core Values (2026) of Deere & Company (DE).
| Capital Measure | Latest Evidence | Quality Test | Investor Meaning |
|---|---|---|---|
| ROIC | Unavailable in the supplied data; use 2026-05-03 Net Income $177B, Total Assets $10700B, Total Debt $6382B, Property Plant Equipment Net $1555B, and Total Investments $5045B as inputs for later calculation. | Operating margins matter, but a large capital base and debt make true capital efficiency depend on disciplined deployment. | Invested capital appears value-creating only if operating earnings stay strong enough to cover the full asset and funding base. |
| ROE and ROA | Total Stockholders Equity $2741B; Book Valueper Share Growth 426%; Weighted Average Shares Growth -007%; Weighted Average Shares Diluted Growth -004%. | ROE can be helped by leverage, while ROA is pressured by asset intensity; the share count moved little, so the equity-base signal matters more. | Shareholder return quality looks supported by earnings growth, but asset efficiency still needs to justify the balance-sheet size. |
| Maintenance and Growth Investment | Research And Development Expenses $58300M; Growth Capital Expenditure -5378%; acquisitions of Sentera, GUSS Automation, and Tenna LLC. | R&D, autonomy kits, AutoTrac Vision 20, Harvest Settings Automation, the electric autonomous tractor goal, the 20 electric construction vehicles goal, and Operations Center engaged-acre targets all point to strategic reinvestment. | Capital needs look meaningful, but they appear tied to long-run product and platform expansion rather than simple maintenance. |
| Internal Funding Capacity | Net income is strong, but the supplied data also show a large debt base and no operating cash flow figure. | Funding looks partly internally generated, yet the mix of acquisitions, R&D, and platform buildout suggests some dependence on balance-sheet flexibility. | Internal funding may cover routine reinvestment, but larger strategic spending could still rely on external capital or debt capacity. |
Are Deere's returns on capital sustainable?
The strongest durability source is Deere & Company’s earnings power across equipment, automation, and precision agriculture. Returns weaken if cash flow falls in a downturn while acquisitions, R&D, and debt service keep rising.
- Operating Source: Margin support comes from product mix, automation, and precision tools that can improve pricing and asset use.
- Funding Requirement: The largest verified capital need is ongoing R&D plus acquisition-led expansion into autonomy and connected operations.
- Durability Test: Watch for rising debt, weaker ROA, or falling cash generation relative to invested capital and reinvestment needs.
Financial Resilience
How resilient is Deere & Company, and which warning signs matter most?
Deere & Company looks Mixed. The main buffer is its large asset base and cash of $934B, but the most important verified warning sign is cycle pressure in agriculture, shown by FY2025 net sales and revenues of $45684B and net income down -2920% YoY.
Resilience depends on whether Deere & Company can keep funding inventory, capex, and finance operations through a weak farm cycle. The link between profits and liquidity matters most here, because Deere & Company sells into a cyclical market and also carries Financial Services debt, so earnings swings can quickly affect cash generation and debt capacity. Deere & Company (DE): History, Ownership, Mission, How It Works & Makes Money
| Pressure | Financial Effect | Existing Protection | Warning Signal |
|---|---|---|---|
| Revenue or Margin Pressure | FY2025 net sales and revenues of $45684B, with revenue growth of -1168% YoY, weaken operating leverage, earnings, cash flow, and debt capacity. | Management said 2026 is the projected bottom of the current large agriculture equipment cycle, and Q2 2026 showed net income of $1773B with net sales growth of 500% YoY. | Watch for weaker net sales growth by segment and lower FY2026 net income guidance. |
| Working-Capital or Investment Pressure | Inventory, receivables, capex, and factory investment can absorb cash when demand is soft or cost pressure rises. | Deere & Company is still investing, including a $70M excavator factory in Kernersville, North Carolina, and a new parts distribution center near Hebron, Indiana. | Monitor operating cash flow, asset growth, and whether investment stays funded without tighter liquidity. |
| Interest or Refinancing Pressure | Short Term Debt $2156B, Long Term Debt $4226B, Total Debt $6382B, and Net Debt $5592B limit flexibility if earnings stay weak; Financial Services debt intensity adds sensitivity. | $934B cash and short term investments and a $10700B total asset base provide some balance-sheet support. | Watch debt growth, interest expense, refinancing terms, and any drop in liquidity. |
Which financial warning signs should investors monitor at Deere & Company?
The strongest signals are segment net sales, FY2026 net income guidance, and operating income or gross profit trends. Cycle pressure is confirmed by FY2025 declines; tariff and legal costs are future risks unless they start cutting margins or cash flow.
Cycle Weakness in Large Agriculture Equipment
FY2025 showed heavy pressure, and 2,400 workers were reduced from July 2024 to August 2025. That matters because it signals demand stress; the next metric is segment sales and management’s FY2026 outlook.
Tariff and Margin Cost Pressure
Expected net tariff costs of $900M for Fiscal Year 2026 can hit gross profit, even after $272M in recovered illegal tariffs. Local-for-local manufacturing helps, so watch operating income and gross margin.
Legal and Debt Sensitivity
Preliminary approval for a $99M antitrust settlement is not a broad solvency threat, but it adds cash-flow sensitivity. Track settlement cash costs, repair-market economics, and the pace of digital diagnostic and Service ADVISOR changes.
Financial Health Scorecard
Is Deere & Company a strong, mixed, or weak financial story for investors?
Deere & Company is a Strong financial story with cyclical and leverage caveats. The strongest factor is latest profitability and cash flow, while the weakest is debt and short-term funding exposure. The key condition for the investment case is whether Deere can keep converting earnings into cash through the cycle.
| Financial Factor | Rating | Evidence and Investor Meaning |
|---|---|---|
| Revenue and Earnings Quality | Mixed | FY2025 revenue growth was -1168% YoY and net income growth was -2920% YoY, but Q2 2026 net sales growth was 500% YoY and net income was $1773B. |
| Profitability and Cash | Strong | Operating Income was $301B, Net Income was $177B, Operating Cash Flow Growth was 31708%, and Free Cash Flow Growth was 15539%; the cash engine is clearly improving. |
| Balance Sheet and Liquidity | Mixed | Cash And Short Term Investments was $934B, but Total Debt was $6382B, Short Term Debt was $2156B, and Net Debt was $5592B, so funding risk remains. |
| Capital Efficiency | Strong | Long-term per-share growth remains strong, but Three Ynet Income Growth Per Share was -3227% and asset intensity is high, so returns depend on disciplined reinvestment. |
| Financial Resilience | Mixed | Tariff costs, agriculture cycle pressure, legal settlement effects, and refinancing needs still matter, even with local manufacturing, supply-chain investments, and Q2 improvement. |
- What Supports the Thesis: Latest profitability, cash-flow growth, and local manufacturing support funding for technology and operations.
- What Challenges the Thesis: High debt and short-term funding exposure leave Deere vulnerable if the cycle weakens.
- What to Monitor: FY2026 net income guidance of $400B–$475B, Net Debt of $5592B, Free Cash Flow Growth of 15539%.
For forecasts, scenarios, and valuation work, the key question is whether Deere’s earnings and cash conversion stay strong enough to offset cyclical pressure and leverage.
FAQ
What Do Investors Ask About 's Financial Health?
Investors most often ask about the company's revenue quality, profitability, cash generation, debt, liquidity, capital efficiency, and ability to withstand financial pressure.
Are Deere's margins improving after FY2025 pressure?
The latest quarter showed better operating profit evidence, with 2026-05-03 Operating Income of $301B versus $156B on 2026-02-01 Do not infer a margin percentage unless calculated separately from the original statements
Does Deere's finance arm add liquidity risk?
Yes, Financial Services makes Deere more debt-intensive because financing assets are funded partly with debt Investors should separate operating equipment health from finance-arm funding needs and track Short Term Debt of $2156B
Can local-for-local manufacturing ease tariff pressure?
It can help reduce exposure to shipping disruption and trade tension, but it does not remove the issue Deere still expects net tariff costs for Fiscal Year 2026 of $900M
What does revised 2026 guidance imply for cash?
The upward revision signals improved earnings expectations after strong Q2 performance, but it is not a cash-flow forecast Investors should connect guidance of $400B–$475B to operating cash flow, capex, dividends, and debt service
Which Deere debt metric matters most now?
Net Debt of $5592B is useful because it compares total debt with cash Short Term Debt of $2156B also matters because near-term funding pressure can affect liquidity during a cyclical downturn