Caterpillar Q4 2025 Earnings: Record $19.1B Quarter, Tariffs Pressure Margins
Caterpillar posted record quarterly and full-year revenue in Q4 2025, fueled by strong power-generation demand, but new tariffs weighed on profit margins.
| Q4 2025 | Reported |
|---|---|
| EPS | — |
| Revenue | $19.13B |
Figures as reported by the company to the SEC for the quarter ended December 31, 2025. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Caterpillar’s fourth-quarter revenue reached $19.1 billion, an 18% increase from $16.2 billion a year earlier, marking the highest single-quarter total in the company’s history. Full-year revenue of $67.6 billion was also a company record.
- Growth was led by the Energy & Transportation business (which makes power generation equipment, engines and turbines): sales rose 23% and segment profit climbed 25%, driven largely by strong demand for turbines and related services, including for data centers.
- The construction and mining equipment segments also grew sales — Construction Industries up 15% and Resource Industries up 13% — but their profits fell (12% and 24%, respectively) because higher manufacturing costs, including new tariffs, ate into what each dollar of sales earned.
- Tariffs (import taxes on materials and components) were a major cost drag: Caterpillar absorbed a net $1.7 billion tariff hit for all of 2025, and expects that cost to grow to about $2.6 billion in 2026, which the company says will keep next year’s profit margin near the low end of its target range.
- The tariff pressure shows up in the numbers: the company’s adjusted operating profit margin (profit as a share of sales, before one-time items) fell to 15.6% in the quarter, down 2.7 percentage points from a year earlier, even as sales grew strongly.
- Caterpillar ended the year with a record order backlog of $51.2 billion, up 71% from a year ago — backlog represents orders customers have placed but the company hasn’t yet delivered and billed for, so a bigger backlog points to strong demand still working its way through the pipeline.
- The business continued to generate substantial cash: $9.5 billion in free cash flow for the year, which funded $7.9 billion returned to shareholders through stock buybacks and dividends.
- CEO Joe Creed called out the milestone in the company’s centennial year, saying it was underscored by “the highest full-year sales and revenues in Caterpillar’s history and a single-quarter record of $19.1 billion.”
Q4 2025 in context
| Metric | Dec 2025 | Dec 2024 | Change |
|---|---|---|---|
| Revenue | $19.1B | $16.2B | +18.0% |
| Free cash flow | $2.7B | $2.7B | +0.1% |
Figures for the quarter ended Dec 2025 and the quarter ended Dec 2024, as reported to the SEC.
How the stock took it
Caterpillar Inc closed at $719.04 on Mar 25, 2026, the last session before the report, and at $695.40 on Mar 27, 2026, the first session after it — -3.3% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Sources: company report · Investing.com