EARNINGS RESULTS · Q3 2026

Deere Q3 2026: Revenue Up 4.91%, Operating Margin 20.56%

Results for the quarter ended 2026-08-02 bring the business drivers and cash after investment into focus. Quarterly free cash flow was $1.94 bn. The dated assessment on 2026-10-08 was avoid at a reference price of $656.87.

Deere · DEPublished October 8, 2026Quarter ended August 2, 2026

Q3 2026: What the Quarter Delivered

Revenue: $12.61 bn
Revenue growth YoY: 4.9%
Operating income: $2.59 bn
Operating margin: 20.6%
Diluted EPS, GAAP: $5.1

Deere reported $12.61 bn of revenue in Q3 2026. Revenue rose 4.91% from the comparable prior-year quarter. Operating profit was $2.59 bn, with an operating margin of 20.56%. Reported diluted EPS was $5.1.

Deere sold more and earned more operating profit than in the comparable fiscal quarter. Operating margin—the share of revenue retained after operating costs—also improved, showing that the sales recovery brought better profitability rather than merely more activity.

How Revenue Reached Operating Profit

The quarter's revenue and operating result imply an operating margin of 20.56%: $20.56 of operating profit for every $100 of revenue, before interest and tax.

The latest margin improvement is encouraging because shareholder value depends on retaining profit from equipment sales, not simply shipping more machines. A stronger replacement cycle could spread factory costs across greater production, which is the economic mechanism behind our favorable scenario.

What the Reported Earnings Include

Other non-operating income: $0.02 bn
GAAP net income: $1.38 bn
Diluted weighted-average shares: 0.27 bn shares

Q3 2026 GAAP net income was $1.38 bn. Other non-operating income was $0.02 bn.

Reported net income and diluted earnings per share improved against the comparable fiscal quarter. The diluted share count also declined modestly, helping per-share results, but the increase in net income shows that the improvement was not merely a shrinking share denominator. Our valuation applies subjective allowances for future interest expense and tax. Those allowances are not reported tax rates or company guidance, and the model does not add an unsupported interest-income offset.

Cash Left After Investment

Operating cash flow: $7.25 bn
OCF less cash PPE purchases, plus PPE sales: —
Quarterly operating cash flow: $2.21 bn
Quarterly cash CapEx: $0.27 bn
Quarterly OCF less cash PPE purchases: $1.94 bn

In Q3 2026, operating cash flow of $2.21 bn less cash capital expenditure of $0.27 bn left $1.94 bn of free cash flow. Operations funded cash investment and left cash after that spending.

Operating cash flow comfortably exceeded identified cash capital purchases over the trailing fiscal period. That supports Deere's ability to fund those investments, though the latest quarter generated less operating cash than the comparable fiscal quarter despite higher net income.

The displayed free-cash-flow measure subtracts reported cash purchases of productive assets from operating cash flow. It does not subtract all financing and investing outflows, and it is not the separate measure that also includes proceeds from property and equipment sales.

The Verdict Recorded on 2026-10-08

Verdict Invest recorded avoid on 2026-10-08, using a reference price of $656.87 dated 2026-10-07. This assessment relates to the Q3 2026 results, with a 12-month horizon and stated validity through 2026-11-07.

Confirmation to watch: Stronger equipment replacement demand accompanied by improving consolidated operating margins.
Confirmation to watch: Further easing of interest expense without deterioration in customer financing economics.
Confirmation to watch: Sustained operating cash generation alongside disciplined cash capital purchases.
Risk to this assessment: Sustained growth and stronger margins make the bull case a more credible central outcome, undermining the valuation-based avoid judgment.
Risk to this assessment: A price decline creates a substantial discount to reassessed scenario value.
Risk to this assessment: Renewed equipment weakness, worsening financing costs or persistent cash deterioration undermine the favorable business-quality assessment.