Cummins Inc. (NYSE: CMI) released its financial performance for the fourth quarter of 2025 on Thursday, showing revenue growth that surpassed expectations but accompanied by substantial charges tied to its hydrogen electrolyzer business in the Accelera segment. Despite the top-line strength, the stock experienced a notable decline as investors balanced enthusiasm over expanding data center demand against concerns over the scaling back of hydrogen technology initiatives.
The company recorded $8.54 billion in revenue for the quarter, marking a 1% year-over-year increase and exceeding analysts’ consensus projections set at approximately $8.13 billion. Adjusted earnings per share stood at $5.81, outperforming the projected $5.11 figure. On a GAAP basis, earnings per share were $4.27 for the quarter and $20.50 for the full fiscal year 2025. These GAAP results integrated $458 million in mostly non-cash expenses connected to a strategic realignment within the Accelera unit.
Jennifer Rumsey, Cummins’ Chair and Chief Executive Officer, emphasized the company’s operational resilience throughout the quarter and entire year, despite ongoing softness in North American truck markets. She noted that both the Distribution and Power Systems segments achieved record sales and profitability, attributed to disciplined execution and elevated demand for data center backup power solutions.
Addressing the fourth-quarter charges, Rumsey explained that these expenses pertained to the electrolyzer business under the Accelera segment. The company initiated a strategic review in response to evolving expectations surrounding hydrogen adoption. As a result, Cummins opted to streamline operations and lower costs given the less optimistic demand outlook.
Segment-specific performances varied during the quarter. The Distribution segment generated $3.3 billion in revenue, rising 7% year over year. This growth was fueled predominantly by a 10% increase in North American demand for power generation equipment and aftermarket parts.
The Power Systems segment experienced the strongest growth, reporting an 11% jump in sales to $1.9 billion and achieving an EBITDA margin of 21.7%. This segment’s performance reflected solid global demand from data center customers requiring reliable power backup solutions.
Conversely, the Engine segment saw a 4% revenue decline, pulling in $2.6 billion. This drop was influenced largely by a 5% decrease in North American revenue resulting from weakened truck market conditions. Components sales similarly fell by 7% to $2.4 billion, impacted by a 15% reduction in North American demand, which was partially offset by growth in international markets.
The Accelera segment’s revenue rose 31% to $131 million. However, it incurred a significant EBITDA loss of $374 million, primarily due to the restructuring charges associated with the electrolyzer business realignment.
In terms of cash flow, Cummins generated $1.5 billion from operations during the quarter and concluded the fiscal year with a $2.8 billion cash balance, reinforcing its liquidity position.
Strategically, Cummins expanded its technological offerings by acquiring assets from First Mode, boosting its retrofit hybrid system portfolio aimed at mining and rail applications. The company also advanced its HELM multi-fuel engine platforms, unveiling the B7.2 and X10 engines as part of its broader "Destination Zero" initiative focused on leading industry decarbonization.
Looking ahead to 2026, Cummins projects revenue growth in the range of 3% to 8% alongside EBITDA margins between 17.0% and 18.0%. Rumsey anticipates a modest recovery in North American on-highway truck demand, particularly during the latter half of the year, combined with sustained strength in data center power generation markets. She reaffirmed the company’s commitment to investing in future growth, delivering strong financial outcomes, and returning capital to shareholders throughout 2026.
The stock market response on Thursday reflected investor caution, with Cummins shares falling 8.91% to $551.68 at the time of reporting, according to Benzinga Pro data.
In summary, Cummins’ fourth-quarter results illustrate a company navigating the challenge of shifting market dynamics. While benefiting from increased demand in data center infrastructure and maintaining robust cash flows, it confronts the headwinds of a softer truck market and a strategic retreat in hydrogen electrolyzer investments, prompting sizeable non-cash restructuring charges.
The company recorded $8.54 billion in revenue for the quarter, marking a 1% year-over-year increase and exceeding analysts’ consensus projections set at approximately $8.13 billion. Adjusted earnings per share stood at $5.81, outperforming the projected $5.11 figure. On a GAAP basis, earnings per share were $4.27 for the quarter and $20.50 for the full fiscal year 2025. These GAAP results integrated $458 million in mostly non-cash expenses connected to a strategic realignment within the Accelera unit.
Jennifer Rumsey, Cummins’ Chair and Chief Executive Officer, emphasized the company’s operational resilience throughout the quarter and entire year, despite ongoing softness in North American truck markets. She noted that both the Distribution and Power Systems segments achieved record sales and profitability, attributed to disciplined execution and elevated demand for data center backup power solutions.
Addressing the fourth-quarter charges, Rumsey explained that these expenses pertained to the electrolyzer business under the Accelera segment. The company initiated a strategic review in response to evolving expectations surrounding hydrogen adoption. As a result, Cummins opted to streamline operations and lower costs given the less optimistic demand outlook.
Segment-specific performances varied during the quarter. The Distribution segment generated $3.3 billion in revenue, rising 7% year over year. This growth was fueled predominantly by a 10% increase in North American demand for power generation equipment and aftermarket parts.
The Power Systems segment experienced the strongest growth, reporting an 11% jump in sales to $1.9 billion and achieving an EBITDA margin of 21.7%. This segment’s performance reflected solid global demand from data center customers requiring reliable power backup solutions.
Conversely, the Engine segment saw a 4% revenue decline, pulling in $2.6 billion. This drop was influenced largely by a 5% decrease in North American revenue resulting from weakened truck market conditions. Components sales similarly fell by 7% to $2.4 billion, impacted by a 15% reduction in North American demand, which was partially offset by growth in international markets.
The Accelera segment’s revenue rose 31% to $131 million. However, it incurred a significant EBITDA loss of $374 million, primarily due to the restructuring charges associated with the electrolyzer business realignment.
In terms of cash flow, Cummins generated $1.5 billion from operations during the quarter and concluded the fiscal year with a $2.8 billion cash balance, reinforcing its liquidity position.
Strategically, Cummins expanded its technological offerings by acquiring assets from First Mode, boosting its retrofit hybrid system portfolio aimed at mining and rail applications. The company also advanced its HELM multi-fuel engine platforms, unveiling the B7.2 and X10 engines as part of its broader "Destination Zero" initiative focused on leading industry decarbonization.
Looking ahead to 2026, Cummins projects revenue growth in the range of 3% to 8% alongside EBITDA margins between 17.0% and 18.0%. Rumsey anticipates a modest recovery in North American on-highway truck demand, particularly during the latter half of the year, combined with sustained strength in data center power generation markets. She reaffirmed the company’s commitment to investing in future growth, delivering strong financial outcomes, and returning capital to shareholders throughout 2026.
The stock market response on Thursday reflected investor caution, with Cummins shares falling 8.91% to $551.68 at the time of reporting, according to Benzinga Pro data.
In summary, Cummins’ fourth-quarter results illustrate a company navigating the challenge of shifting market dynamics. While benefiting from increased demand in data center infrastructure and maintaining robust cash flows, it confronts the headwinds of a softer truck market and a strategic retreat in hydrogen electrolyzer investments, prompting sizeable non-cash restructuring charges.