Skip to content
    OSK
    Earnings call· Jun 2026(Q2 FY26)

    OSHKOSH Q2 FY26 earnings call OSK

    Jul 28, 2026 Source

    Executive summary

    Oshkosh Q2 FY26 — Access Segment Strength and NGDV Ramp Offset Vocational Production Delays

    Oshkosh reported a mixed Q2 FY26, with strong performance in its Access segment driven by mega-project demand and robust order intake, alongside continued ramp-up of the Next-Generation Delivery Vehicle. However, challenges in modernizing fire truck manufacturing led to a revised full-year EPS outlook, reflecting a slower-than-expected production throughput. The company remains confident in its long-term targets, anticipating a strong Q4 and momentum into FY27.

    Highlights

    5

    • Consolidated sales increased by $183 million or 6.7% year-over-year to $2.9 billion.

    • Access segment delivered double-digit operating income margins (11.3%) with strong Q2 sales of $1.4 billion, up 9.4% YoY.

    • Access segment order intake was strong at $1.5 billion, resulting in a book-to-bill ratio of 1.1 and a $2 billion backlog.

    • Free cash flow significantly improved to $348 million, up from $49 million last year.

    • Transport segment sales increased 12% to $536 million, driven by a $155 million increase in NGDV revenue to $262 million.

    Concerns

    5

    • Full-year adjusted EPS guidance was updated to $11, a reduction of $0.50 primarily due to a more moderate pace of fire truck throughput.

    • Adjusted operating income decreased to $258 million from $313 million YoY, primarily due to unfavorable mix and higher manufacturing overhead costs.

    • Access segment operating income margin was lower YoY due to adverse product and customer mix, and unfavorable price/cost dynamics from tariff costs.

    • Vocational segment sales were relatively flat, with lower volume in Refuse and recycling vehicles.

    • Transport segment operating income was down $2 million YoY, reflecting adverse mix and higher warranty and manufacturing overhead costs.

    Guidance & targets

    11
    CategoryTargetConfidence
    Full-year adjusted EPS
    $11
    high materiality
    High
    Full-year free cash flow
    $550 million to $650 million
    medium materiality
    High
    Access segment full-year revenue growth
    grow compared to 2025
    medium materiality
    High
    Fire truck production increase (this year)
    about a 10% increase
    medium materiality
    Medium
    Fire truck production increase (total target)
    25% to 30% production rate increase
    medium materiality
    High
    Additional NGDV order
    expect to receive an additional NGDV order
    high materiality
    High
    Transport operating margin
    grow in the back half of the year
    medium materiality
    High
    Q4 results
    stronger than Q3
    medium materiality
    High
    Vocational long-term operating margin target
    16% to 18%
    medium materiality
    High
    Refuse business return to normal
    return to a little bit more normal state
    low materiality
    Medium
    Private non-residential construction market improvement
    start to improve
    medium materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Access
    Sales driven by higher volume and improved pricing. Margin lower due to adverse product/customer mix and unfavorable price/cost from tariffs. Demand improving, driven by mega projects.
    Book-to-bill ratio: 1.1Backlog: $2 billion
    		$1.4 billion9.4%—11.3% adjusted operating income margin
    Vocational
    Lower volume, primarily Refuse and recycling vehicles, offset by improved pricing. Fire truck shipments roughly in line with last year. Margin impacted by adverse sales mix and higher manufacturing overhead, partially offset by favorable price/cost.
    		$967 millionrelatively flat—13.5% adjusted operating income margin
    Transport
    Primarily due to higher sales volume. NGDV revenue grew significantly, offsetting lower defense volume (due to JLTV build completion in May 2025). Operating income down due to adverse mix, higher warranty and manufacturing overhead, partially offset by a $17 million one-time item related to NGDV.
    Delivery vehicle revenue: $262 millionDelivery vehicle revenue growth: $155 millionDelivery vehicle revenue sequential growth: >20%
    		$536 million12%—$16 million operating income

    Operational metrics

    16
    Consolidated sales
    $2.9 billion6.7% YoY increase
    Q2 FY26

    Increase primarily reflected improved sales volume and pricing.

    Adjusted EPS
    $2.87
    Q2 FY26

    Adjusted earnings per share.

    Adjusted operating income
    $258 milliondown from $313 million YoY
    Q2 FY26

    Primarily due to unfavorable mix and higher manufacturing overhead costs, partially offset by higher sales volume.

    Share repurchases
    $92 million
    Q2 FY26

    Amount of stock repurchased during the quarter.

    Tariff net impact
    $40 million to $50 million
    Q2 FY26

    Net impact on tariffs, all in line with expectations for the full year. Includes a recovery of approximately $20 million, up from $13 million in Q1.

    Transport one-time item
    $17 million
    Q2 FY26

    Favorable one-time item related to the NGDV program, partially offsetting higher warranty and manufacturing overhead costs. Analyst referred to it as $16.6 million.

    Fire truck production increase (this year)
    about a 10%
    FY26

    Expected increase in fire truck production for the current year.

    Fire truck production increase (total target)
    25% to 30%
    future

    Overall target for fire truck production rate increase, with sequential increases expected through 2027.

    Defense business share
    10%
    current

    Represents the proportion of the company's business that is defense-related.

    Commercial business share
    90%
    current

    Represents the proportion of the company's business that is commercial-related.

    FMTV A2 program order
    $142 million
    Q2 FY26

    Order received from U.S. and international customers.

    Rogue Fires platform order
    $92 million
    Q2 FY26

    Order supporting the United States Marine Corps Rogue Fires platform.

    Refuse business outlook
    down
    2026

    Customers remain cautious on CapEx; expected to return to a more normal state in 2027.

    Fire truck industry run rate
    4,000 units per year
    normal state

    Considered a healthy state for the industry.

    Transport full-year revenue
    $2.5 billion
    FY26

    Ballpark estimate for the full year.

    Vocational long-term operating margin target
    16% to 18%
    long-term

    Long-term target for the Vocational segment. Expected to be below the low end of this range for the current year.

    Industry KPIs

    5
    MetricValueDetails
    Capacity expansion25% to 30%%
    Tariff cost impact$40 million to $50 millionUSD
    Data center prime power demandimportant sources of demand
    Order backlog order intake by segment$1.5 billionUSD
    Industry production market size forecasts4,000 units per yearunits

    Orderbook & backlog

    5
    Access segment backlog$2 billionend of Q2 FY26
    Access segment book-to-bill ratio1.1Q2 FY26

    more than double the second quarter last year

    Access segment order intake$1.5 billionQ2 FY26
    Vocational segment backlogrobustcurrent

    Provides excellent visibility and supports investment in manufacturing operations.

    Transport segment backlogrobustcurrent

    Product announcements

    2
    ProductTypeDetails
    Autonomous, AI-enabled ground support robotmilestone
    Micro-sized scissors and ClearSky smart fleet connected technologiesupdate

    Deals & partnerships

    2
    Chicago, Denver, Philadelphia airportsKey wins for passenger boarding bridges

    Order intake for passenger boarding bridges was solid, with key wins in these cities.

    Sanitation Department of New YorkSignificant order for refuse collection vehicles

    Notable recent order for refuse collection vehicles, described as an 'expanded win'.

    Capital programs

    1
    Fire truck manufacturing modernizationunderway

    Benefit: 25% to 30% production rate increase

    Initiatives to modernize manufacturing operations and implement changes to improve material flow and assembly efficiency, transforming from bay build to high-flow production lines. Expected to produce and ship fewer fire trucks this year than previously planned, but positions well for 2027 and 2028.

    Risks & headwinds

    8
    Fire truck throughputnear-term / FY26

    reduced expectations by approximately $0.50 for full year adjusted EPS

    Mitigation: Implementing production changes to improve throughput, modernizing manufacturing operations, implementing new material flow processes.

    Unfavorable mix and higher manufacturing overhead costsQ2 FY26

    adjusted operating income down $55 million YoY

    Mitigation: Investments for future production, higher sales volume partially offsetting.

    Adverse product and customer mix in AccessQ2 FY26

    Access operating income margin lower than last year

    Mitigation: Focus on managing the business with discipline, improving price/cost dynamics, driving operational productivity.

    Unfavorable price/cost dynamics in AccessQ2 FY26

    primarily due to tariff costs

    Mitigation: Expect to be price/cost neutral for the year, working on tariff engineering and cost reductions.

    Lower volume in Refuse and recycling vehiclesQ2 FY26

    Vocational sales relatively flat

    Mitigation: Long-term outlook remains strong due to aged fleets and consistent demand; expected return to normal in 2027.

    Adverse mix, higher warranty and manufacturing overhead costs in TransportQ2 FY26

    operating income down $2 million compared with last year

    Mitigation: Expect Transport operating margin to grow in the back half of the year as NGDV production ramps and new defense contracts are implemented.

    Refuse business slowdown2026

    customers remain cautious on CapEx

    Mitigation: Expectation for business to return to a more normal state in 2027.

    Vocational top-line guide reduction (analyst-cited)prior period

    Analyst-cited prior reduction of $100 million to $200 million from initial top-line guide

    Mitigation: Company expects current year Vocational margins to be below the long-term target of 16-18% due to revised production plan, but heading in the right direction for 2027 and 2028.

    What to watch in Q3 FY26

    5

    Fire truck production throughput

    Q3 FY26 and Q4 FY26
    Currentmore gradually than initially expected
    Targetsequential increase in Q3 and Q4

    Why it matters

    Improvement in fire truck production is key to achieving full-year EPS guidance and long-term targets, as current delays impacted the FY26 outlook.

    As we execute fire truck production plans, anticipate receiving an additional order for NGDV, increase NGDV production and build on revised defense contracts, we expect that our results in Q4 will be stronger than Q3.

    Q&A highlights

    5

    Clarify if the $0.50 EPS reduction is solely from Vocational, implying Access upside was larger.

    Confirmed that the more moderate pace of Vocational production more than offsets the upside in Access, which was the revision to the guide.

    “Yes, that's the right way to think about it fundamentally is with the more moderate pace of production, that more than offsets the upside in Access, which was the revision to the guide.”

    asked by David Raso · answered by Steven Fisher

    2 min read6 chapters

    Detailed Narrative

    01

    Access Segment Performance and Outlook

    The Access segment demonstrated strong performance with $1.4 billion in sales, up 9.4% YoY, and a solid 11.3% adjusted operating income margin. Demand is primarily driven by large infrastructure and mega-projects, with micro-sized scissors and ClearSky connected technologies resonating with customers. The company now expects full-year Access revenue to grow compared to 2025, an improvement from original expectations of a modest decline, and anticipates the private non-residential construction market to improve by late 2026 or early 2027.

    02

    Vocational Segment Modernization Challenges

    While backlog and demand for fire apparatus and airport products remain strong, the modernization of fire truck manufacturing operations is progressing more gradually than initially expected. This has led to a revised expectation of fewer fire trucks produced and shipped this year, impacting full-year adjusted EPS by approximately $0.50. The initiatives aim to transform manufacturing from bay build to high-flow production lines, positioning the segment for stronger performance in 2027 and 2028, with a target of 25-30% production rate increase.

    03

    Transport Segment and NGDV Ramp

    The Transport segment saw sales increase 12% to $536 million, largely due to a $155 million increase in Next-Generation Delivery Vehicle (NGDV) revenue to $262 million. The NGDV fleet has surpassed 35 million miles with positive feedback. The company anticipates an additional NGDV order in Q4, which, combined with new pricing on defense contracts, is expected to drive Transport operating margin growth in the second half of the year, contributing to a full-year Transport revenue ballpark of $2.5 billion.

    04

    Defense Business Momentum

    Oshkosh Defense is building momentum with significant orders, including $142 million for the FMTV A2 program and $92 million for the United States Marine Corps Rogue Fires platform. The company is leveraging its engineering capabilities and manufacturing scale to pursue additional domestic and international opportunities, integrating commercial technologies where applicable. The defense business currently represents about 10% of the company's total business, with commercial making up 90%.

    05

    Free Cash Flow and Capital Allocation

    Free cash flow for the quarter was $348 million, a significant improvement from $49 million last year, reflecting strong working capital management and higher customer advances. The company repurchased approximately 667,000 shares for $92 million during the quarter, maintaining its full-year free cash flow guidance of $550 million to $650 million. The company remains confident in its plans to achieve its 2028 financial targets.

    06

    Market Dynamics and Price/Cost

    The Access market is seeing strong utilization rates and building backlogs, with mega-projects driving current demand. While tariff costs impacted Access margins, the company expects to be price/cost neutral for the year, with price/cost dynamics improving as tariff comparisons ease and cost reductions take effect. The net tariff impact🌐 for Q2 was $40 million to $50 million, with a $20 million recovery, all in line with expectations.

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