Titan Machinery reported a narrower business at the top line in its fiscal second quarter ended July 31, 2026, but gross margin improved as the company kept reducing aged inventory.
Revenue fell to $496.4 million from $546.4 million a year earlier, a decline of $50.0 million. Equipment revenue dropped to $328.5 million from $376.3 million, while parts revenue slipped to $106.6 million from $109.2 million and service revenue eased to $46.4 million from $48.8 million. Rental and other revenue rose to $14.8 million from $12.1 million.
Gross profit edged down to $92.4 million from $93.6 million, but gross margin widened to 18.6% from 17.1%, an increase of 150 basis points. The company said the improvement came mainly from stronger equipment margins tied to continued reductions in aged inventory, along with a higher mix of parts and service revenue.
Operating expenses rose to $94.1 million from $92.7 million, pushing expenses to 19.0% of revenue from 17.0% a year earlier. Floorplan interest expense and other interest expense fell to $8.1 million from $11.5 million, reflecting lower interest-bearing inventory levels.
Titan posted a net loss of $9.2 million, or $0.40 per diluted share, compared with a net loss of $6.0 million, or $0.26 per diluted share, in the same quarter last year. Adjusted EBITDA declined to $4.6 million from $5.6 million.
By segment, agriculture revenue fell to $310.2 million from $345.8 million, a same-store sales decline of 8.4%. Even so, the segment’s pre-tax loss improved sharply to $3.3 million from $12.3 million.
Construction revenue increased to $78.6 million from $72.0 million, with same-store sales up 9.2%. The segment moved to pre-tax income of $0.4 million from a pre-tax loss of $1.2 million.
Europe revenue dropped to $66.1 million from $98.1 million. Excluding a $1.1 million foreign-currency benefit, revenue fell $33.1 million, or 33.7%. The segment’s pre-tax result swung to a $1.3 million loss from $5.1 million of income a year earlier.
Australia revenue climbed to $41.4 million from $30.6 million. Excluding a $3.9 million foreign-currency benefit, revenue rose $6.9 million, or 22.5%. The segment’s pre-tax loss widened to $3.4 million from $2.1 million.
On the balance sheet, cash stood at $29.5 million at quarter-end. Inventories increased by $28.4 million from January 31 to $931.5 million, including a $21.7 million increase in equipment inventories to $746.9 million. Floorplan payables rose to $623.6 million from $553.8 million at the January 31 balance.
For the first six months of fiscal 2027, Titan used $25.1 million in operating cash, compared with $49.9 million of operating cash generated in the same period last year.
The company kept its fiscal 2027 profitability outlook unchanged, with adjusted EBITDA still targeted at $17.0 million to $29.0 million, adjusted consolidated pre-tax loss at $28.0 million to $39.0 million, adjusted net loss at $28.0 million to $40.0 million, and adjusted diluted loss per share at $1.25 to $1.75.
It did, however, change its segment revenue assumptions. Agriculture remained at down 15% to down 20%. Construction was raised to up 5% to up 10% from flat to up 5%. Europe was cut to down 30% to down 40% from down 20% to down 25%. Australia was lifted to up 15% to up 20% from up 10% to up 15%. Today the company's shares have moved -1.36% to a price of $18.555. Check out the company's full 8-K submission here.
