Cummins reported Q2 2025 revenue of $8.643 billion, down 1.74% year-over-year but up 5.74% from the prior quarter, reflecting a mixed demand environment across end-markets. Gross margin of 26.39% expanded modestly year-over-year, driving a 17.3% YoY increase in operating income and a 22.6% YoY rise in net income to $0.89 billion; diluted EPS reached $6.42-$6.46 depending on share count. Free cash flow was robust at $554 million, while operating cash flow was $785 million; the company ended the quarter with $2.32 billion in cash and equivalents and a net debt position of $6.37 billion, underscoring strong liquidity against a $34.26 billion asset base.
Despite topline headwinds, Cummins demonstrated earnings leverage through mix and efficiency, supported by a resilient aftermarket segment and ongoing cost discipline. The balance sheet remains solid, with a current ratio of 1.64 and a debt-to-capitalization of 42.4%. The near-term outlook will hinge on demand stability in key industrials markets, the pace of aftermarket growth, and the company’s execution of its New Power and electrified propulsion initiatives. Investors should monitor macro demand signals, supply chain dynamics, and currency effects as the company advances its capital allocation and growth agenda.