Thu, Jun 5, 4:07 PM (19 days ago)
**The Toro Company (TTC) Q2 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** Q2 2025 revenue was $1,317.9 million, down 2.3% YoY. H1 2025 revenue was $2,312.9 million, down 1.6% YoY. - **Profit Margins:** Q2 2025 gross margin was 33.1%, down 50 basis points YoY. H1 2025 gross margin was 33.4%, also down 50 basis points YoY. - **Net Earnings:** Q2 2025 net earnings were $136.8 million, or $1.37 per diluted share, down from $144.8 million, or $1.38 per diluted share in Q2 2024. H1 2025 net earnings were $189.6 million, or $1.88 per diluted share, down from $209.7 million, or $2.00 per diluted share in H1 2024. - **Cash Flow:** H1 2025 operating cash flow was $123.1 million, down from $135.1 million in H1 2024. Capital expenditures were $38.4 million in H1 2025, leading to a free cash flow of $84.7 million. **Segment Performance:** - **Professional Segment:** Q2 2025 revenue was $1,014.1 million, up 0.8% YoY. H1 2025 revenue was $1,782.9 million, up 1.2% YoY. Earnings margin increased to 19.9% in Q2 2025 and 18.5% in H1 2025. - **Residential Segment:** Q2 2025 revenue was $297.4 million, down 11.4% YoY. H1 2025 revenue was $518.4 million, down 10.0% YoY. Earnings margin decreased to 5.4% in Q2 2025 and 6.4% in H1 2025. **Trends and Uncertainties:** - **Tariffs and Inflation:** TTC continues to face challenges from tariffs and inflation, which are being mitigated through price increases and operational efficiencies. - **Productivity Initiative (AMP):** The AMP initiative has delivered $30.0 million in cumulative cost savings and is expected to achieve $70.5 million in annualized cost savings by the end of 2025. - **Inventory and Backlog:** Inventory levels were higher in Q2 2025, with increased balances in lawn care, underground construction, and golf and grounds products. Order backlog remains elevated due to sustained demand. **Future Operations Impact:** - **Dividends and Share Repurchases:** TTC increased its quarterly dividend by 5.6% and repurchased 2,550,293 shares in H1 2025. - **Liquidity:** As of May 2, 2025, TTC had $899.4 million in available liquidity, including $176.5 million in cash and $722.9 million in revolving credit facility availability. - **Debt:** TTC has $1,077.1 million in long-term debt, with $175.0 million outstanding under the revolving credit facility. The company is in compliance with all debt covenants.