Cummins Inc.

Cummins reported second-quarter 2026 revenue of $9.5 billion, up 9% year over year. EBITDA was $1.7 billion, or 17.5% of sales, versus $1.6 billion or 18.4% a year ago; net earnings were $932 million, or $6.73 per diluted share, versus $890 million, or $6.43 per diluted share. Gross margin was $2.5 billion, or 26.1% of sales, compared with $2.3 billion, or 26.4% last year. Operating cash flow was a record second-quarter $1.5 billion, and the company returned $501 million to shareholders through $225 million of repurchases and $276 million of dividends. For 2026, Cummins now expects total revenue growth of 10% to 13% and EBITDA margin of 18% to 18.5%; it also expects an effective tax rate of about 23% excluding discrete items and capital spending of $1.35 billion to $1.45 billion. Segment guidance included Engine revenue up 9% to 14%, Components up 8% to 13%, Distribution up 9% to 14%, Power Systems up 14% to 19%, and Accelera revenue of $350 million to $400 million.

Jennifer Rumsey framed the quarter as evidence that the company’s strategy is working, pointing to stronger demand in key markets, Analyst Day actions, and expanding power generation capacity. She emphasized that the EPA’s proposed 2027 rule supports a more measured transition to new engine platforms, which should help maintain product availability and reduce abrupt swings in demand. Her tone was confident and upbeat, especially around data centers, global power generation, and the long-term growth opportunity in engines and components.

Mark Smith highlighted record quarterly sales, EBITDA dollars, and operating cash flow, noting that gross margin was $2.5 billion or 26.1% of sales and that the net impact of tariffs was immaterial to EBITDA dollars in the quarter. He said second-quarter cash flow was $1.5 billion and that the company returned $501 million to shareholders, reinforcing a long-standing target of returning about 50% of operating cash flow. He also gave specific guidance updates, including a roughly $200 million reset in incentive compensation next year, second-half incentive comp running about $25 million per quarter below Q2, and capital investments of $1.35 billion to $1.45 billion.

Analysts focused on the EPA 2027 transition, asking how much prebuy could show up, how smooth the engine rollout might be, and whether NCPs or credits could affect margins. Management said the staged transition should make the shift smoother, that customers want both the current and new products, and that they do not expect a big use of credits to offset NCPs. Questions also centered on power generation capacity, backlog, and margins; Cummins said demand remains ahead of supply, backlog is strong, and incremental margin performance has been better than expected mainly because of China strength and good execution.