Terex reported sharply contrasting profitability trends across its Materials Processing and Aerials businesses during the second quarter of 2026, as stronger demand and operating leverage lifted Materials Processing margins while tariffs and inflation pressured Aerials.
Materials Processing generated net sales of $464 million, representing a 2.2% reported increase and an 11.1% increase on a pro forma basis. Growth was driven particularly by stronger U.S. demand for mobile crushers used in road construction, infrastructure projects, and selected commercial building activities.
The segment’s adjusted EBITDA increased to $87 million from $62 million in the prior-year period. Compared with pro forma adjusted EBITDA of $60 million, the increase was approximately 45%.
Materials Processing’s adjusted EBITDA margin expanded to 18.8% from 13.8% on a reported basis and 14.4% on a pro forma basis. Favorable product mix, pricing, and improved absorption from higher production volumes more than offset increased transportation expenses.
The improvement contrasted with Terex’s Aerials segment, where higher sales did not translate into stronger earnings.
Aerials revenue increased 10.9% to $673 million, supported primarily by increased shipments to large national customers working on major projects. Favorable foreign exchange movements also contributed to the increase.
However, adjusted EBITDA declined 31% to $38 million from $55 million. The segment’s adjusted EBITDA margin contracted to 5.7% from 9.1%.
Terex attributed the decline primarily to higher tariff expenses and inflationary pressure. Pricing actions and cost-reduction initiatives provided partial offsets but were not enough to prevent the segment’s profitability from weakening.
The Aerials results highlight the uneven effect that tariffs are having across Terex’s expanded portfolio. While customer demand and shipment volume remained healthy, rising import-related costs reduced the earnings generated from the additional sales.
Terex received approximately $8 million of refunds related to International Emergency Economic Powers Act tariffs during the quarter. The amount was reported net of a one-time unfavorable customs-related accrual and was included in the company’s adjusted earnings per share.
Companywide second-quarter sales increased 50.5% to approximately $2.24 billion, largely reflecting the addition of businesses formerly operated by REV Group. On a pro forma basis, which assumes the combination occurred earlier, sales increased 8.5%, with growth across all four Terex segments.
Adjusted EBITDA increased 10.7% on a pro forma basis to $269 million, representing a margin of 12%. Terex said the improvement was driven largely by stronger results in Materials Processing and Specialty Vehicles.
Specialty Vehicles generated $650 million in sales, representing pro forma growth of 6.2%, as fire apparatus shipments and pricing increased. Adjusted EBITDA rose to $94 million from $76 million, while its margin expanded to 14.5% from 12.4%.
Environmental Solutions revenue increased 5.9% to $456 million, but adjusted EBITDA declined to $80 million from $86 million. Its adjusted EBITDA margin contracted to 17.5% from 20% because of production-ramp inefficiencies in Utilities, lower refuse collection vehicle volumes, and a greater contribution from lower-margin Utilities sales.
Terex reported net income of $110 million, compared with $72 million in the second quarter of 2025. Adjusted net income increased to $156 million from $98 million.
Despite the higher net income, diluted earnings per share declined to $0.96 from $1.09, while adjusted diluted earnings per share fell to $1.37 from $1.49. The decline reflected a substantial increase in shares outstanding following the REV transaction.
Terex’s diluted weighted-average share count increased to 114.2 million from 65.9 million. The larger earnings base was therefore distributed across approximately 73% more shares.
Bookings increased 25.2% on a pro forma basis to $2 billion, with growth across every segment. Backlog increased 3.9% to $6.9 billion, providing Terex with additional visibility into future equipment deliveries.
The quarterly book-to-bill ratio was 90%, indicating that Terex recognized more revenue than the value of new orders booked during the period.
Terex generated free cash flow of $101 million, increasing by $23 million year-over-year. The company ended the quarter with $1.1 billion of liquidity and returned $20 million to shareholders through dividends.
Following the stronger operating performance, Terex raised its full-year outlook. The company now expects 2026 sales of between $7.9 billion and $8.2 billion, compared with its previous range of $7.5 billion to $8.1 billion.
Adjusted EBITDA is expected to range from $960 million to $1 billion, with an adjusted EBITDA margin of approximately 12.2% at the midpoint. Adjusted earnings per share are projected to range from $4.70 to $5.10.
Terex expects approximately $28 million of realized synergies from the REV combination during 2026 and remains on track to achieve a $75 million annual synergy run rate within two years. Its outlook assumes tariff rates remain broadly at their current levels.
The company expects Materials Processing and Aerials revenue to increase at low double-digit rates during 2026. However, the second-quarter margin divergence shows that similar revenue growth can produce significantly different earnings outcomes depending on product mix, pricing, inflation, and tariff exposure.
KEY QUOTES:
“Terex delivered a strong second quarter, with revenue growth in all segments, improved profitability, and positive booking trends.”
Simon Meester, President And Chief Executive Officer Of Terex
