Toromont Industries Ltd (TMTNF) Q4 2025 Earnings Call Highlights: Strong Revenue Growth and …

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Thu, February 12, 2026 at 4:02 AM GMT+9 3 min read

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This article first appeared on GuruFocus.

Release Date: February 11, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Toromont Industries Ltd (TMTNF) reported a 9% increase in consolidated revenue for the fourth quarter, driven by higher equipment group and Simco revenues.

The company saw a 47% increase in bookings for the fourth quarter compared to the previous year, with strong contributions from the equipment group and mining activity.

Operating income increased by 3% in the fourth quarter, reflecting higher revenue and improved gross profit margins.

The company ended the year with ample liquidity, including $1.3 billion in cash and an additional $453 million available under existing credit facilities.

The board of directors approved a 7.7% increase in the quarterly dividend, marking the 37th consecutive year of dividend increases.

Negative Points

Full-year earnings showed a modest decline due to factors such as investment in growth initiatives, lower net interest income, and non-cash costs from the AVL acquisition.

Net interest income was significantly lower for the year, reflecting higher interest expenses and lower interest income due to lower interest rates.

The equipment group's rental revenue improved, but utilization levels remained lower than the prior year.

Return on equity was below the company's target at 16.9%, reflecting slightly lower earnings and higher shareholders' equity.

The company faced higher selling and administrative expenses, which increased by 10% in the quarter and 5% for the year, reflecting continued investment in strategic areas.

Q & A Highlights

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Q: Are there opportunities for AVL in the large data center market, particularly for prime and backup power solutions? A: Mike McMillan, President and CEO, explained that AVL is currently focused on standby power for data centers. While there is potential for larger enclosures and gas solutions, it’s early in the process, and they will evaluate these opportunities as they ramp up production in Charlotte.

Q: Can you provide an update on the ramp-up at the Charlotte facility and any plans for expanding the AVL network? A: John Doolittle, EVP and CFO, stated that the Charlotte facility is progressing well, with limited production already underway. They expect growth throughout 2026. Mike McMillan added that they are focusing on ramping up production in both Hamilton and Charlotte before considering further expansion.

Story Continues  

Q: What is driving the inflection in the backlog for the core equipment group, and how does it relate to market demand? A: Mike McMillan noted that equipment availability has improved, and demand in Canada is softer. However, strong bookings and backlog levels persist, driven by customer demand and infrastructure projects. Customers are making purchase decisions aligned with project pipelines.

Q: How significant was the impact of the Charlotte ramp-up on AVL’s margin performance in Q4? A: John Doolittle mentioned that the Charlotte ramp-up did not significantly impact Q4 margins. As production grows in Charlotte, margins are expected to improve over the course of the year.

Q: Can you elaborate on the construction orders being up 9% in the equipment group and the factors driving this growth? A: Mike McMillan explained that improved equipment availability and year-end customer purchases contributed to strong Q4 bookings. However, confidence in the market remains cautious due to economic uncertainty, and they are monitoring infrastructure and construction activity closely.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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