The following is a summary of the Titan Machinery Inc. (TITN) Q3 2025 Earnings Call Transcript:

Financial Performance:

• Titan Machinery Inc. reported a revenue of $679.8 million for Q3 2025, marking a 2.1% decrease compared to the previous year. Gross profit for the quarter was $110 million, with a contracted gross profit margin of 16.3%.

• Net income for the third quarter of fiscal 2025 was $1.7 million or $0.07 per diluted share, compared to last year's third quarter net income of $30.2 million or $1.32 per diluted share.

Business Progress:

• The company continues its strategy to manage inventory levels downward, successfully decreasing total inventory by approximately $115 million during the quarter. The inventory reduction was driven by enhanced sales incentives to drive retail demand.

• Construction segment reported a 10% same-store sales increase, although performance is expected to remain flattish compared to the prior year.

• In response to the current market environment, Titan Machinery is also accelerating its inventory reduction strategy to reach targeted equipment inventory levels as quickly as possible.

Opportunities:

• The federal infrastructure bill is expected to provide long-term support for the construction industry. Improved equipment availability and new product introductions from suppliers are anticipated to further support the segment.

• The continued growth in service business and parts, with expectations for high single-digit growth in service business and low single-digit growth in parts business for the full fiscal year, indicates a strengthening of recurring revenue streams.

Risks:

• Challenging conditions in the agricultural sector including lower net farm income, high input costs, and the effects of higher interest rates are impacting domestic agriculture segment performance.

• In Europe, particularly in Romania, severe drought conditions have significantly reduced crop yields, impacting demand. Similar challenging conditions are reported in Australia due to below-average rainfall and early frost events.

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