Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

CMI · Q1 2026 Earnings

Cummins

Reported May 5, 2026

30-second summary

Cummins raised FY2026 revenue growth to +8% to +11% (from +3% to +8%) and EBITDA margin to 17.75%–18.50% (from 17.0%–18.0%) just one quarter after reinstating guidance, with the upgrade spanning every segment and nearly every end market. Q1 revenue grew 3% YoY to $8.4B at an 11.3% operating margin and 15.4% EBITDA margin (17.7% ex fuel-cell charges), with Power Systems +18.6% at a 29.5% EBITDA margin carrying the print while Engine and Components remained in trough territory. The story this quarter is a comprehensive demand reset — China flipped from -1% to +10%, India from -5% to +2%, construction from -10%-to-flat to flat-to-+10%, and North America truck volumes raised — that retires the cautious framing dominant since Q2 2025.

Headline numbers

EPS

Q1 FY2026

$4.71

Revenue

Q1 FY2026

$8.40B

+3.0% YoY

Gross margin

Q1 FY2026

26.7%

Free cash flow

Q1 FY2026

$0.12B

Operating margin

Q1 FY2026

11.3%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$8.40B	+3.0%	$8.54B	-1.6%
EPS	$4.71	—	$4.27	+10.3%
Gross margin	26.7%	—	22.8%	+390bps
Operating margin	11.3%	—	9.5%	+180bps
Free cash flow	$0.12B	—	$0.99B	-87.9%

Guidance

Cummins significantly raised full-year FY2026 revenue growth guidance to 8-11% (from 3-8%) and EBITDA margin to 17.75-18.5% (from 17.0-18.0%), driven by substantially improved outlooks across geographies (China +10%, India +2%) and end markets (construction, power generation, heavy/medium-duty trucks).

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

New guidance

Metric	Period	Guide	YoY
Pickup truck engine shipments (North America)	FY 2026	125,000 to 140,000 units	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue Growth	FY 2026	+3% to +8%	+8% to +11%	+5 to +3 percentage points at low end; +3 pts at high end	Raised
EBITDA margin	FY 2026	17.0% to 18.0%	17.75% to 18.50%	+75 to +50 basis points at low end; +50 bps at high end	Raised
North America heavy-duty truck units	FY 2026	220,000 to 240,000 units	230,000 to 250,000 units	+10,000 units at both low and high end	Raised
North America medium-duty truck units	FY 2026	110,000 to 120,000 units	125,000 to 135,000 units	+15,000 units at both low and high end	Raised
China revenue growth (including joint ventures)	FY 2026	-1%	+10%	+11 percentage points	Raised
India revenue growth (including joint ventures)	FY 2026	-5%	+2%	+7 percentage points	Raised
Global construction demand	FY 2026	-10% to flat	flat to +10%	+10 to +10 percentage points (flat scenario improved by 10pts; downside improved by 10pts)	Raised
Global power generation revenue growth	FY 2026	+10% to +20%	+15% to +25%	+5 percentage points at both low and high end	Raised

Reaffirmed unchanged this quarter: Mining engine sales growth (flat to +10%), Aftermarket growth (+2% to +8%)

Segment KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
Engine	$2.672B	-3.6%
Components	$2.53B	-5.2%
Distribution	$3.116B	+7.2%
Power Systems	$1.956B	+18.6%
Accelera	$0.101B	-1.9%
Distribution Segment Revenue Growth	+7%	—
Power Systems Revenue Growth	+19%	—

Other KPIs

Q1 FY2026

Segment	Q1 FY2026
EBITDA Margin	15.4%
EBITDA Margin (excluding fuel cell charges)	17.7%
Power Systems EBITDA Margin	29.5%
Operating Cash Flow	$309 million
Capital Expenditures	$189 million
Shareholder Returns	$519 million

Management tone

Q2 2025 → Q3 2025 → Q4 2025 → Q1 2026 arc: Truck cycle cratering, guidance pulled → Cautious hope for a Q4 bottom → Guidance reinstated with tariff dilution caveat → Broad-based raise, tariffs no longer the headline.

Two quarters ago management called recent truck orders "amongst the weakest three or four-month periods we've had in the last 20 years." Last quarter they conceded an H1-weakness/H2-recovery cadence and warned tariffs would "continue to dilute the EBITDA percent of every single segment in 2026." This quarter the recovery has pulled forward into H1 and the tariff frame has receded entirely from the headline narrative. The anchor: "We now expect the first half of the year to be stronger than previously anticipated, while the second half remains largely consistent with our prior outlook... strong recent orders and improving spot rates." The structural margin-ceiling discussion that dominated Q4 has been replaced by "improved profit outlook for all of our segments."

The China reversal is the most material multi-quarter swing. Through 2025 Cummins repeatedly cited China as a drag; Q4 guided -1% for FY2026. This quarter the call language jumped to "China's definitely more of a tailwind than a headwind right now" with the guide moving to +10%. An 1,100bp swing on a major geography between two consecutive prints is not a forecasting tweak — it is a recognition that data center capex in Asia is moving through Cummins' order book faster than the cautious Q4 frame allowed for.

On Accelera, last quarter management committed to "permanently reducing the rate of participation in electrolyzers." This quarter that commitment converted into action — the fuel cell business was sold, segment losses were re-guided from $325–355M EBITDA to $270–300M ex-charge, and the Q1 print absorbed the fuel-cell sale charge. The strategic-retreat language that took three quarters to crystallize has now produced a measurable cost-structure improvement. Risk: the +$240M Q3 electrolyzer impairment and now the Q1 fuel-cell sale charge mean Cummins has taken material non-cash hits two of the last three quarters, and management still hedges that "we anticipate changes in the longer emissions warranty" subject to assumptions.

The hedging that does remain is concentrated on regulatory timing rather than demand. Management still uses phrases like "we currently expect that the net impact of tariffs will continue to be immaterial" and notes EPA 27 details are "not finalized yet, but our guidance does reflect our assumptions." Compared to Q3 2025's repeated refusal to model rebate scenarios, this is a meaningfully tighter risk register.

Recurring themes management leaned on this quarter:

Data center demand acceleration as primary growth driver, especially in China and Asia PacificNorth America heavy and medium-duty truck market recovery faster than anticipatedPower generation segment achieving record EBITDA dollars and margin expansionAccelera segment rationalization through asset sales and business focusEPA 27 platform launches providing content uplift and margin opportunitySupply chain mitigation of tariff impacts through collaboration with suppliers and customers

Risks management surfaced:

North America truck demand cyclical recovery pace and potential supply chain constraintsUncertainty around EPA 27 emissions regulation finalization and compliance timelinesMedium-duty engine (B-Series) launch delayed to January 2028Tariff policy changes creating ongoing margin volatility and mitigation complexityAccelera electrolyzer business winding down with remaining customer commitments

Answers to last quarter's watch list

Whether FY2026 EBITDA margin guidance holds at 17.0–18.0% through Q1, or gets trimmed — Not trimmed; raised. The range moved up 75bps at the low end and 50bps at the high end to 17.75%–18.50%. The "thinnest cushion in years" framing from Q4 has been replaced by a midpoint expansion to 18.125%. Status: Resolved positively.

Q1 Engine and Components revenue trajectory — Engine -3.6% YoY and Components -5.2% YoY in Q1. The H1-stronger-than-expected language and the raise of NA heavy-duty (+10k units) and medium-duty (+15k units) volume guides indicate the recovery is pulling into H1 rather than getting deferred. Status: Resolved positively.

Power Systems EBITDA margin holding above 21% and any incremental capacity expansion — Power Systems EBITDA margin printed 29.5%, well above the 21% threshold and substantially above the year-ago 23.6%. Revenue grew 18.6% YoY. The global power generation revenue guide was raised to +15% to +25% (from +10% to +20%). No formal new capacity announcement on the print, but the segment economics now look materially stronger than the Q4 guide assumed. Status: Resolved positively.

Accelera segment trajectory after permanent electrolyzer reduction — Losses re-guided to $270–300M (ex fuel-cell-sale charge), improving from prior $325–355M projection. Fuel cell business sold this quarter, with the charge flowing through Q1 EBITDA (15.4% reported vs 17.7% ex-charge). Cost structure visibly tightening; Q1 segment revenue -1.9% YoY reflects the scope reduction. Status: Resolved positively.

EPA 2027 pre-buy assumption quantification — Management still has not numerically disclosed the pre-buy assumption embedded in the FY guide. Hedging language ("not finalized yet, but our guidance does reflect our assumptions") suggests the assumption remains a range rather than a point. The raised volume guides (NA heavy-duty 230k–250k) implicitly carry a pre-buy assumption but it is not isolated. Status: Continue monitoring.

Distribution segment EBITDA margin vs the 13.25–14.25% FY2026 guide step-down — Q1 Distribution EBITDA margin printed 14.2% (vs 12.9% a year ago), and management raised the FY2026 guide to 13.7%–14.7% (from 13.25%–14.25%). Segment revenue grew 7.2% YoY. The step-down concern has been answered upward. Status: Resolved positively.

What to watch into next quarter

Whether Power Systems EBITDA margin holds above 25% — Q1's 29.5% benefited from one-time non-tariff cost recovery and net tariff recovery that management said will not persist. Sustained 25%+ would underwrite the raised 25–26% FY band; a snap back below 22% would expose the guide as front-loaded.

China growth trajectory tracking to the +10% FY guide — The 1,100bp upgrade is the single largest swing in the raised guide, and management noted China buying patterns are first-half weighted. A Q2 international revenue print that decelerates sharply from Q1's +16% would put pressure on the back half.

Engine and Components reaching positive YoY growth — Q1 was -3.6% and -5.2% respectively. The H1-recovery thesis embedded in the raised volume guides needs sequential improvement to convert to growth by Q3.

EBITDA margin trajectory toward the 17.75%–18.50% FY band — Q1 reported 15.4% (17.7% ex fuel-cell charge). Whether subsequent quarters print inside the band on a reported basis, or continue to require ex-charge adjustments, will determine the quality of the raise.

Any quantified EPA 2027 pre-buy contribution to the raised NA truck volume guides. The 10k heavy-duty and 15k medium-duty increases either reflect underlying demand or a pulled-forward pre-buy that reverses in 2027. The B-platform launch delay to January 2028 changes the pre-buy math for medium-duty specifically.

Whether Accelera losses tighten toward the $270M end of the new $270–300M guide as fuel-cell exit costs anniversary out.

Analyst day on May 21st — management flagged updates to medium-term financial targets, capital deployment, and data center growth opportunities, with a specific commitment to refresh the 2030 framework given prior targets were achieved early.

Sources

Cummins Q1 2026 Form 8-K, Exhibit 99 (press release): https://www.sec.gov/Archives/edgar/data/26172/000002617226000013/cmi2026q18-kex99.htm
Cummins Q1 2026 prepared management commentary (disclosed alongside the press release)

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