EARNINGS RESULTS · Q2 2026

Caterpillar Q2 2026: Revenue Up 23.98%, Operating Margin 22.67%

Results for the quarter ended 2026-06-30 bring the business drivers and cash after investment into focus. Quarterly free cash flow was $3.78 bn. The dated assessment on 2026-10-08 was avoid at a reference price of $813.83.

Caterpillar · CATPublished October 8, 2026Quarter ended June 30, 2026

Q2 2026: What the Quarter Delivered

Revenue: $20.54 bn
Revenue growth YoY: 24%
Operating income: $4.66 bn
Operating margin: 22.7%
Diluted EPS, GAAP: $7.77

Caterpillar reported $20.54 bn of revenue in Q2 2026. Revenue rose 23.98% from the comparable prior-year quarter. Operating profit was $4.66 bn, with an operating margin of 22.67%. Reported diluted EPS was $7.77.

Caterpillar’s latest quarter delivered more than a sales rebound. Operating profit grew faster than revenue compared with the same fiscal quarter in the prior year, showing that the company retained more profit from its larger sales base.

How Revenue Reached Operating Profit

The quarter's revenue and operating result imply an operating margin of 22.67%: $22.67 of operating profit for every $100 of revenue, before interest and tax.

The latest operating margin improved against the comparable prior-year quarter. This is the clearest evidence that stronger sales are creating shareholder value: more revenue is reaching operating profit rather than being absorbed by operating costs.

What the Reported Earnings Include

Other non-operating income: $0.4 bn
GAAP net income: $3.59 bn
Diluted weighted-average shares: 0.46 bn shares

Q2 2026 GAAP net income was $3.59 bn. Other non-operating income was $0.4 bn.

Reported diluted earnings benefited from stronger net income and a lower diluted share count. A shrinking share base can increase each remaining share’s claim on earnings, but it should complement durable profit growth rather than substitute for it.

Cash Left After Investment

Operating cash flow: $13.57 bn
OCF less cash PPE purchases, plus PPE sales: $10.62 bn
Quarterly operating cash flow: $4.37 bn
Quarterly cash CapEx: $0.59 bn
Quarterly OCF less cash PPE purchases: $3.78 bn

In Q2 2026, operating cash flow of $4.37 bn less cash capital expenditure of $0.59 bn left $3.78 bn of free cash flow. Operations funded cash investment and left cash after that spending.

Operating cash generation comfortably exceeded identified cash capital purchases in the latest quarter. Positive cash remaining after those purchases supports financial flexibility and the capacity for shareholder distributions, without establishing how that cash will be allocated. These are consolidated cash flows, including Financial Products. Subtracting identified capital purchases does not capture every financing or investing outflow, and our normalized earnings model is not a free-cash-flow forecast.

The Verdict Recorded on 2026-10-08

Verdict Invest recorded avoid on 2026-10-08, using a reference price of $813.83 dated 2026-10-07. This assessment relates to the Q2 2026 results, with a 12-month horizon and stated validity through 2026-11-07.

Confirmation to watch: Conversion of disclosed long-duration contracts into recognized revenue.
Confirmation to watch: Sustained operating margins as revenue growth moderates.
Confirmation to watch: Continued cash generation and net share retirement.
Confirmation to watch: A share-price reset that restores a meaningful discount to scenario value.
Risk to this assessment: Sustained growth and margins materially stronger than our base assumptions would weaken the avoid judgment.
Risk to this assessment: A price decline into the model’s attractive-entry range would remove the current valuation objection.
Risk to this assessment: Deteriorating order conversion, cash generation or captive-finance funding would undermine the favorable business assessment.