DEBy Calypso Research7 min read

Deere & Company (DE) Q4 2025 Earnings Analysis

Farming Up 16.3% as Deere Rides High on Earnings Day

Key Takeaways

Deere & Company (DE) reported Q4 2025 earnings with revenue of $9.6B, representing a +16.3% year-over-year change. The stock moved +11.6% on earnings day.

The bull case: Bulls argue that 2026 is the trough with C&F strength, improving large ag orders, cleaner used inventory, and accelerating tech adoption positioning Deere for margin expansion and above-industry growth into 2027.

The bear case: Bears contend that fragile farm economics, tariff and pricing uncertainty, lingering used inventory risk, and potentially conservative C&F assumptions could cap upside and leave earnings vulnerable if macro or policy tailwinds fade.

Financial Highlights

  • Revenue: $9.6B (+16.3% YoY)
  • Gross Profit: $3.3B (34.7% margin, -4.4% YoY)
  • Operating Income: $1.6B (16.2% margin, -1.7% YoY)
  • Net Income: $656M
  • TTM Revenue: $46.0B

Stock Performance

  • Earnings Day Move: +11.6%
  • Year-to-Date: +38.6%
  • 1-Year Return: +33.5%
  • vs. S&P 500 (since earnings): +32.0%
  • vs. Nasdaq (since earnings): +33.6%

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What Management Said

Here are the key debates and direct quotes from Deere & Company's Q4 2025 earnings call:

Sustainability and Drivers of Construction & Forestry (C&F) Strength and Order Momentum

Sentiment: Positive

"What's perhaps most encouraging is that our order bank has risen by over 50% in the past quarter, reaching its highest point since May of 2024. This provides us with clear visibility into the second half of the fiscal year, allowing the Construction & Forestry team to optimize their production plans accordingly." — Josh Beal
"They feel confident. I think the construction activity has been strong in the last couple of years... now the confidence in their backlog is growing and they need to start making more investments in the fleet." — Ryan Campbell

Large Ag Cycle Bottoming: Order Book, Replacement Demand, and 2026 vs. 2027 Setup

Sentiment: Positive

"Our spring seasonal products... are probably the upper end of that range, closer to 20%. What we saw over the course of the quarter on the tractor side was some pickup in order velocity... so we're probably closer to down 15 or so on tractors... and then combines... will finish better than the range, more like probably down 10% to 15% for combines in that segment." — Josh Beal
"We are seeing some increased build rates in tractors, and that's kind of back half related to this order activity that we saw come through... But that's based on actual orders that we're seeing... but it's not a bounce. It's not inflecting hard. It's just we're seeing some positive progress and momentum." — Joshua Jepsen

Pricing Power, Competitive Intensity, and Price/Cost Neutrality (Especially in PPA and C&F)

Sentiment: Mixed

"We're probably closer now to price/cost neutral for the full year, just given particularly a little bit of a reduction on the pricing side in C&F... But overall, again, price/cost neutral with the price actions that we're taking." — Josh Beal
"We took the guide down slightly. That wasn't a function of our lack of confidence in us being able to execute price increases, really a function of how fast the year started... we were surprised at how quickly we had built our backlog... So the price actions are going to be delayed a little bit." — Ryan Campbell

Used Inventory Normalization, Dealer Health, and the Trade Ladder in Large Ag

Sentiment: Positive

"Deere high horsepower tractor units were down mid-single digits in our first quarter and have declined by over 10% from their March 2025 peak... model year '22 and model year '23 ADARs were down over 20% sequentially with model year '24 ADARs also declining by over 10%." — Josh Beal
"Our channel has consistently worked to reduce used inventory levels and our deliberate approach to managing production and inventory set us up favorably both this year and into the next... we've seen stability in used prices. And then as you take inventory down, it's facilitating more activity there." — Joshua Jepsen

Regional Mix Shifts and Margin Implications in Production & Precision Ag (PPA)

Sentiment: Mixed

"If you look at overall volume in the large ag business in Q1, we were effectively flattish year-over-year in terms of total volume, but that mix was Europe up... and then both North America and South America down year-over-year in Q1. So given the different profitability profile... that was unfavorable mix for us in the first quarter." — Josh Beal
"You can expect us in large ag to do double-digit margins each quarter for the rest of the year. So it really is a mix that's improving as you move through 2026... when you look at the first quarter versus the rest of the year... a big part of that is a little bit more normal mix geographically." — Joshua Jepsen

Bull Case

Bulls argue that 2026 is the trough with C&F strength, improving large ag orders, cleaner used inventory, and accelerating tech adoption positioning Deere for margin expansion and above-industry growth into 2027.

Bear Case

Bears contend that fragile farm economics, tariff and pricing uncertainty, lingering used inventory risk, and potentially conservative C&F assumptions could cap upside and leave earnings vulnerable if macro or policy tailwinds fade.

Looking Ahead

With revenue growing +16.3% year-over-year, the key question is whether Deere & Company can sustain this growth trajectory, particularly around sustainability and Drivers of Construction & Forestry (C&F) Strength and Order Momentum. With operating margins at 16.2%, margin trends will remain a focal point. The market's positive reaction on earnings day suggests confidence in management's direction, and the next earnings report will be a key catalyst for the stock.

Frequently Asked Questions

What was Deere & Company's revenue in Q4 2025?

Deere & Company reported Q4 2025 revenue of $9.6B, representing a +16.3% year-over-year change.

Did Deere & Company beat earnings expectations in Q4 2025?

The stock rose +11.6% on earnings day, suggesting the results met or exceeded market expectations. The current bull case centers on: Bulls argue that 2026 is the trough with C&F strength, improving large ag orders, cleaner used inventory, and accelerating tech adoption positioning Deere for margin expansion and above-industry growth into 2027.

What is the bull case for DE stock?

The bull case for DE centers on: Bulls argue that 2026 is the trough with C&F strength, improving large ag orders, cleaner used inventory, and accelerating tech adoption positioning Deere for margin expansion and above-industry growth into 2027.

What is the bear case for DE stock?

The bear case for DE centers on: Bears contend that fragile farm economics, tariff and pricing uncertainty, lingering used inventory risk, and potentially conservative C&F assumptions could cap upside and leave earnings vulnerable if macro or policy tailwinds fade.

How has DE stock performed since its Q4 2025 earnings?

DE moved +11.6% on the day of its Q4 2025 earnings report, outperforming the S&P 500 by +32.0% since earnings. Year-to-date, the stock has returned +38.6%.

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