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    LNN
    Earnings call· May 2026(Q3 FY26)

    LINDSAY Q3 FY26 earnings call LNN

    Jul 2, 2026 Source

    Executive summary

    Lindsay Corporation Q3 FY26 — Infrastructure Growth and Strategic Investments Amidst Agricultural Headwinds

    Lindsay Corporation navigated a challenging Q3 FY26, marked by a cyclical bottom in agricultural markets and soft irrigation demand in North America and Brazil. Despite these headwinds, the company achieved growth in its Infrastructure segment and continued strategic investments in manufacturing and technology, while implementing restructuring actions to optimize its cost structure for long-term agility and future growth.

    Highlights

    5

    • Infrastructure segment revenue increased 8% year-over-year, marking three consecutive quarters of growth.

    • Technology revenue is expected to achieve sustained double-digit growth in fiscal 2026.

    • Total available liquidity stood at $204.8 million, including $154.8 million in cash and cash equivalents.

    • The new tube mill has been successfully commissioned and is now in full production, enhancing efficiency.

    • The Brazil financing rate for the 2026-2027 crop plan declined from 12.5% to 11.5%.

    Concerns

    5

    • Total revenues decreased 5% to $160.8 million compared to the prior year.

    • Operating income decreased to $18.5 million from $23.8 million, with operating margin at 11.5% of sales compared to 14% last year.

    • North America irrigation revenues decreased 11% due to lower unit sales volume.

    • International irrigation revenues decreased 4%, primarily driven by lower sales volume in Brazil.

    • Total funding allocated to irrigation within Brazil's FINAME program was reduced by 38%, from BRL 2.75 billion to BRL 1.7 billion.

    Guidance & targets

    4
    CategoryTargetConfidence
    Technology revenue growth
    sustained double-digit growth
    medium materiality
    High
    Road safety product sales growth
    continued growth
    low materiality
    Medium
    Restructuring savings
    begin
    medium materiality
    High
    Middle East project revenue recognition
    $10 million
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Irrigation
    Decrease due to lower unit sales volume, higher input costs, and fixed cost deleverage.
    Operating margin: 15.3% of sales (vs 18.9% last year)
    		$133 million-7%—$20.3 million
    North America Irrigation
    Reflects continued softness in the U.S. market due to challenging farm economics.
    Primary driver: lower unit sales volume, partially offset by higher average selling prices
    		$61.3 million-11%——
    International Irrigation
    Impacted by high interest rates and limited credit access in Brazil.
    Primary driver: lower sales volume in Brazil, partially offset by growth in other international markets
    		$71.7 million-4%——
    Infrastructure
    Operating margin decrease due to less favorable mix from lower road safety revenues.
    Operating margin: 19.5% of sales (vs 21.1% last year)Driver: higher road safety product revenues
    		$27.7 million8%—$5.4 million

    Operational metrics

    14
    Adjusted Diluted EPS
    $1.53down from $1.78 YoY
    Q3 FY26

    Reflected lower operating income, partially offset by increased other income and lower effective tax rate.

    Total available liquidity
    $204.8 million
    Q3 FY26 end

    Reflects the strength of the balance sheet.

    Capital expenditures
    $35.5 million
    9 months FY26 YTD

    Reflecting ongoing strategic investments at the Lindsay, Nebraska site.

    Share repurchases
    $25.2 million
    Q3 FY26

    Deployed towards share repurchases during the quarter as part of capital allocation priorities.

    Share repurchases
    $80.7 million
    9 months FY26 YTD

    Returned to shareholders through share repurchases during the first 9 months of the fiscal year.

    Brazil FINAME financing rate
    11.5%down from 12.5%
    2026-2027 crop plan

    Lower financing costs are a positive development for growers and should improve affordability and ROI of irrigation systems.

    Brazil FINAME program funding
    BRL 1.7 billiondown from BRL 2.75 billion (38% reduction)
    2026-2027 crop plan

    Reduced funding pool effectively places a ceiling on near-term market growth, tempering enthusiasm for rapid recovery. Historically, not 100% of funds were appropriated.

    Middle East project revenue recognized
    $70 million
    FY26

    Portion of an $80 million major irrigation order expected to be recognized in fiscal 2026.

    Middle East project revenue remaining
    $10 million
    early FY27

    Remaining portion of the $80 million major irrigation order, expected to spill into early fiscal year 2027.

    Build America 250 Act reauthorization
    $580 billion
    5-year

    Bipartisan reauthorization establishing a framework for core highway and bridge investments, strengthening funding to states.

    Drought conditions (severe to exceptional)
    >1/3vs 15% a year ago
    current

    Significant increase in drought severity, impacting core irrigation states like Nebraska and potentially leading to negative yield impacts.

    Tariff refunds
    onetime benefit
    Q3 FY26

    Represents a partial reversal of tariff costs incurred to date.

    Technology revenue growth
    double-digit
    FY26

    Expected to be sustained, reinforcing competitive advantage and expanding recurring revenue base.

    Restructuring savings
    begin
    FY27

    Expected to result from initiatives to restructure and rightsize the organization, optimizing operating cost structure.

    Industry KPIs

    2
    MetricValueDetails
    Tariff cost impactonetime benefit
    Parts aftermarket businesssustained double-digit growth%

    Orderbook & backlog

    1
    Middle East Irrigation Project$80 millionQ3 FY26

    $70 million expected to be recognized in FY26, $10 million in early FY27.

    Product announcements

    1
    ProductTypeDetails
    Tower Watch featurelaunch

    Capital programs

    3
    New Tube Millcompleted

    Benefit: industry-leading automation and technology that increases safety, efficiency and throughput

    Successfully commissioned and now in full production in Lindsay, Nebraska, allowing rapid response to demand shifts.

    New Galvanizing Facilityon schedule

    Benefit: expand galvanizing capabilities, improving quality and opening new opportunities for growth

    Remains on schedule, expected to be turned over to production in early calendar 2027. This is the final step of strategic investments.

    Restructuring and Rightsizing Initiativeunderway
    Start: Q3 FY26

    Benefit: improving efficiency, eliminating complexity and better aligning resources with anticipated market demand

    Initiative to restructure and rightsize portions of the organization and optimize operating cost structure. Expected savings to begin in fiscal 2027.

    Risks & headwinds

    6
    Cyclical bottom in agricultural marketsQ3 FY26, multiyear trend

    Total revenues decreased 5% to $160.8 million; North America irrigation revenues decreased 11%; International irrigation revenues decreased 4%.

    Mitigation: Focus on pricing, cost management, operational efficiency, strategic investments, and restructuring.

    Trade uncertainty, high input costs, weak farmer sentimentcurrent, ongoing

    USDA projections indicate cost of production will exceed commodity prices.

    Mitigation: Focus on levers within control; no significant near-term recovery expected until economics improve.

    High interest rate environment and limited access to credit in Brazilcurrent, near term

    Brazil financing rate declined from 12.5% to 11.5%; total FINAME funding reduced from BRL 2.75 billion to BRL 1.7 billion (38% reduction).

    Mitigation: Cautiously optimistic in short term, high confidence in long-term growth opportunity.

    Fixed cost deleverage in Irrigation segmentQ3 FY26

    Operating income decreased to $18.5 million from $23.8 million; operating margin was 11.5% of sales compared to 14% last year.

    Mitigation: Restructuring and rightsizing portions of the organization, optimizing operating cost structure.

    More competitive pricing environment in domestic irrigationcurrent

    Can create a pinch on margins.

    Mitigation: Protect customer relationships and dealers, not using pricing to drive volume or market share, maximizing pricing where possible.

    Extreme drought conditions in core irrigation statescurrent season

    >1/3 of the country in severe to exceptional drought (vs 15% a year ago), Western Corn Belt experiencing extreme drought.

    Mitigation: Promoting efficient use of water and utilization of tools like FieldNET Advisor.

    What to watch in Q4 FY26

    5

    Brazil irrigation demand recovery

    Q1 FY27
    CurrentSoft, constrained by credit availability and reduced FINAME funding
    TargetProgress of 'shovel-ready' projects through funding mechanisms, leading to increased sales volume

    Why it matters

    Brazil is a key long-term growth opportunity; recovery here is crucial for international segment performance.

    So we don't see an immediate spike in jump in Brazil, but we do know some of those projects that had been on hold are now going to progress through the system, and we'd hope to get our fair share of those likely not seeing that until first quarter of our next fiscal year.

    Q&A highlights

    6

    Inquiring about the outlook for Middle East projects beyond the current large order, given the conflict and the timing of water/electrical infrastructure development.

    Randy Wood stated that public proclamations from leaders in the MENA region indicate continued investment in domestic agricultural production for food security. He sees significant market opportunity, describing it as 'early to mid innings with more growth to come,' dependent on water and electrical infrastructure development.

    “The pipeline, Ryan, when you look at all of the public proclamations that [indiscernible] has made specifically, but not only in Egypt, if you look at Northern Africa and then across the Middle East, I think there's a lot of very public statements from leaders looking to continue investing in domestic ag production for food security purposes. And we haven't seen any significant shift in the total market opportunity.”

    asked by Ryan Connors · answered by Randy Wood

    2 min read7 chapters

    Detailed Narrative

    01

    North American Irrigation Market Softness

    The U.S. irrigation market remains soft due to trade uncertainty, high input costs, and weak farmer sentiment. Growers are delaying large capital purchases as USDA projections indicate production costs will exceed commodity prices for several key commodities, a multi-year trend. No meaningful near-term recovery is expected until these economic conditions improve.

    02

    International Irrigation Dynamics

    International revenues were slightly down, primarily due to lower sales volumes in Brazil. While the financing rate under Brazil's 2026-2027 crop plan improved from 12.5% to 11.5%, the total funding allocated to irrigation within the FINAME program was reduced from BRL 2.75 billion to BRL 1.7 billion. This 38% reduction tempers enthusiasm for rapid market recovery despite strong customer interest, as credit availability remains a constraint.

    03

    Infrastructure Segment Growth

    The Infrastructure business continued its growth trajectory, with revenues increasing 8% year-over-year, marking three consecutive quarters of growth. This was driven by higher road safety product revenues. While a large Road Zipper project is not anticipated this fiscal year, the pipeline for such projects remains strong, supported by legislative frameworks like the Build America 250 Act.

    04

    Strategic Manufacturing Investments

    Lindsay successfully commissioned a new tube mill in Lindsay, Nebraska, which is now in full production, enhancing safety, efficiency, and throughput. The new galvanizing facility remains on schedule for turnover in early calendar 2027, further expanding capabilities and opening new growth opportunities. These investments are designed to prepare the company for successful operation through market cycles and capitalize on future growth.

    05

    Technology and Innovation

    The company's FieldNET and FieldWise platforms continue to drive adoption, with new features like the Smart Pivot platform's 'tower watch' improving machine diagnostics and reducing downtime. Management expects sustained double-digit technology revenue growth in fiscal 2026, reinforcing technology as a core competitive advantage for expanding recurring revenue, improving margin mix, and strengthening long-term customer retention.

    06

    Restructuring and Cost Optimization

    Lindsay initiated restructuring actions to rightsize the organization and optimize its operating cost structure, aiming for improved efficiency, reduced complexity, and better alignment of resources with anticipated market demand. These actions are expected to yield savings starting in fiscal 2027, without compromising investment in core strategic priorities like innovation and growth opportunities.

    07

    Drought Conditions and Impact

    Drought conditions in primary irrigation regions have significantly worsened year-over-year, with over one-third of the U.S. currently experiencing severe to exceptional drought, compared to 15% a year ago. While drought generally promotes efficient water use and technology adoption, extreme drought in areas like the Western Corn Belt could negatively impact crop yields, potentially influencing future commodity pricing.

    AI-generated summary of the company’s earnings call. Not investment advice.