Production and Precision Agriculture, Deere’s largest reported business, reported revenue of $4.1 billion in the first nine months ended August 2, down 6.5% from the comparable period. The smaller agriculture and turf line grew 11.6%, while Construction and Forestry jumped 18.0%. Deere’s total revenue still rose 4.9% to $12.6 billion, and net income climbed 7.0% to $1.4 billion.
The cleaner headline is growth. The harder one is that operating cash flow fell from $3.5 billion to $3.2 billion over the same nine months. Deere generated more accounting profit, but less operating cash overall.
Management tied the pressure to the physical business: fewer shipments, a less favorable sales mix, and more expensive materials. Price realization and foreign exchange helped offset some of that drag, but not enough to keep operating profit moving in the same direction as revenue.
Deere described the trade-off this way:
"Operating profit decreased primarily due to lower shipment volumes / sales mix and higher production costs from an increase in material costs, partially offset by favorable price realization and the effects of foreign currency exchange."
Deere / 10-Q / 2026-08-27
That is a fairly specific list. Volume and mix work against the business, materials add cost, and pricing provides a partial counterweight. Net margin nevertheless edged up to 10.9% from 10.7%, helped by the combination of higher revenue and earnings, even as cash conversion weakened.
Working capital supplies one concrete piece of that cash picture. Trade receivables increased $2,406 million during the first nine months, which Deere attributed to seasonality and higher sales volumes. The company also said accounts payable and accrued expenses fell by $241 million, primarily because employee-benefit and dealer-incentive accruals declined. Those movements are reported facts, not a disclosed explanation for the entire cash-flow change, but they provide context for why operating cash flow did not rise with earnings.
The financial-services arm adds another wrinkle. Its nine-month revenue fell 3% because of a lower average portfolio, yet net income rose 9%, as favorable financing spreads more than offset the smaller book. Deere said interest expense declined with lower average borrowing rates and lower average borrowings. Financing helped earnings, even as the industrial side faced shipment and material-cost pressure.
Capital spending also fell 16.0% to $716 million, while research and development increased slightly. Deere returned cash to shareholders, with financing outflows of $1.8 billion. Shares were down only 0.3% on a diluted basis, so the per-share increase to $5.10 mostly followed the earnings increase rather than a major change in the share count.
The longer record makes the current tension less abstract. Deere’s annual revenue reached $61.3 billion in 2023 before falling to $45.7 billion in 2025, while its latest annual net margin stood at 11.0%. At the latest close of $634.12, the shares carried a 34.3x price-to-earnings multiple. That leaves the current filing balancing two visible facts: the business is producing modest nine-month growth, while the operating cash stream and the core agriculture line remain under pressure.
Deere’s next quarterly report leaves one unanswered question: does operating cash flow recover alongside earnings, or do lower shipment volumes and higher material costs continue to absorb the benefit of price realization?
Source: Deere & Company 10-Q filed August 27, 2026.