Titan Machinery Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS TITAN MACHINERY INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except per share data) July 31, 2025 January 31, 2025 Assets Current Assets Cash $ 32,675 $ 35,898 Receivables, net of allowance for expected credit losses 127,608 119,814 Inventories, net 1,140,000 1,108,672 Prepaid expenses and other 25,999 28,244 Total current assets 1,326,282 1,292,628 Noncurrent Assets Property and equipment, net of accumulated depreciation 377,897 379,690 Operating lease assets 48,210 27,935 Deferred income taxes 11,492 2,552 Goodwill 63,936 61,246 Intangible assets, net of accumulated amortization 48,983 48,306 Other 1,142 1,581 Total noncurrent assets 551,660 521,310 Total Assets $ 1,877,942 $ 1,813,938 Liabilities and Stockholders' Equity Current Liabilities Accounts payable $ 41,502 $ 37,166 Floorplan payable 852,225 755,698 Current maturities of long-term debt 11,432 10,920 Current operating lease liabilities 4,356 5,747 Deferred revenue 41,702 91,933 Accrued expenses and other 59,916 59,492 Total current liabilities 1,011,133 960,956 Long-Term Liabilities Long-term debt, less current maturities 153,058 157,767 Operating lease liabilities 46,082 25,588 Finance lease liabilities 44,570 44,894 Deferred income taxes 9,322 8,818 Other long-term liabilities 3,434 1,838 Total long-term liabilities 256,466 238,905 Commitments and Contingencies Stockholders' Equity Common stock, par value $ .00001 per share, 45,000,000 shares authorized; 23,373,234 shares issued and outstanding at July 31, 2025; 23,124,768 shares issued and outstanding at January 31, 2025 — — Additional paid-in-capital 264,395 262,097 Retained earnings 341,110 360,314 Accumulated other comprehensive income (loss) 4,838 ( 8,334 ) Total stockholders' equity 610,343 614,077 Total Liabilities and Stockholders' Equity $ 1,877,942 $ 1,813,938 See Notes to Condensed Consolidated Financial Statements 3 Table of Contents TITAN MACHINERY INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data) Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Revenue Equipment $ 376,262 $ 465,233 $ 813,102 $ 933,322 Parts 109,222 109,805 214,851 218,032 Service 48,800 47,268 92,817 92,346 Rental and other 12,142 11,368 19,993 18,676 Total Revenue 546,426 633,674 1,140,763 1,262,376 Cost of Revenue Equipment 351,406 422,236 758,755 834,476 Parts 74,573 74,239 147,653 147,390 Service 17,480 16,144 34,089 32,920 Rental and other 9,321 8,676 15,686 13,458 Total Cost of Revenue 452,780 521,295 956,183 1,028,244 Gross Profit 93,646 112,379 184,580 234,132 Operating Expenses 92,661 95,156 189,065 194,314 Impairment of Goodwill — 531 — 531 Impairment of Intangible and Long-Lived Assets 323 942 589 942 Income (Loss) from Operations 662 15,750 ( 5,074 ) 38,345 Other Income (Expense) Interest and other income (expense) 2,638 ( 7,048 ) 2,149 ( 7,335 ) Floorplan interest expense ( 6,812 ) ( 9,218 ) ( 13,338 ) ( 16,282 ) Other interest expense ( 4,724 ) ( 3,734 ) ( 9,256 ) ( 6,193 ) (Loss) Income Before Income Taxes ( 8,236 ) ( 4,250 ) ( 25,519 ) 8,535 (Benefit) Provision for Income Taxes ( 2,236 ) 54 ( 6,315 ) 3,399 Net (Loss) Income $ ( 6,000 ) $ ( 4,304 ) $ ( 19,204 ) $ 5,136 (Losses) Earnings per Share: Basic $ ( 0.26 ) $ ( 0.19 ) $ ( 0.85 ) $ 0.22 Diluted $ ( 0.26 ) $ ( 0.19 ) $ ( 0.85 ) $ 0.22 Weighted Average Common Shares: Basic 22,764 22,617 22,717 22,580 Diluted 22,764 22,617 22,717 22,583 See Notes to Condensed Consolidated Financial Statements 4 Table of Contents TITAN MACHINERY INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (in thousands) Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Net (Loss) Income $ ( 6,000 ) $ ( 4,304 ) $ ( 19,204 ) $ 5,136 Other Comprehensive Income (Loss) Foreign currency translation adjustments 9,511 58 13,172 ( 4,467 ) Comprehensive Income (Loss) $ 3,511 $ ( 4,246 ) $ ( 6,032 ) $ 669 See Notes to Condensed Consolidated Financial Statements 5 Table of Contents TITAN MACHINERY INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (in thousands) Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity Shares Outstanding Amount Balance at January 31, 2025 23,125 $ — $ 262,097 $ 360,314 $ ( 8,334 ) $ 614,077 Common stock issued on grant of restricted stock, net of restricted stock forfeitures and restricted stock withheld for employee withholding tax ( 39 ) — ( 681 ) — — ( 681 ) Stock-based compensation expense — — 1,591 — — 1,591 Net loss — — — ( 13,204 ) — ( 13,204 ) Other comprehensive income — — — — 3,661 3,661 Balance at April 30, 2025 23,086 $ — $ 263,007 $ 347,110 $ ( 4,673 ) $ 605,444 Common stock issued on grant of restricted stock, net of restricted stock forfeitures and restricted stock withheld for employee withholding tax 287 — ( 11 ) — — ( 11 ) Stock-based compensation expense — — 1,399 — — 1,399 Net loss — — — ( 6,000 ) — ( 6,000 ) Other comprehensive income — — — — 9,511 9,511 Balance at July 31, 2025 23,373 $ — $ 264,395 $ 341,110 $ 4,838 $ 610,343 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity Shares Outstanding Amount Balance at January 31, 2024 22,848 $ — $ 258,657 $ 397,225 $ 1,760 $ 657,642 Common stock issued on grant of restricted stock, net of restricted stock forfeitures and restricted stock withheld for employee withholding tax ( 30 ) — ( 794 ) — — ( 794 ) Stock-based compensation expense — — 837 — — 837 Net income — — — 9,441 — 9,441 Other comprehensive loss — — — — ( 4,525 ) ( 4,525 ) Balance at April 30, 2024 22,818 $ — $ 258,700 $ 406,666 $ ( 2,765 ) $ 662,601 Common stock issued on grant of restricted stock, net of restricted stock forfeitures and restricted stock withheld for employee withholding tax 310 — ( 51 ) — — ( 51 ) Stock-based compensation expense — — 1,262 — — 1,262 Net loss — — — ( 4,304 ) — ( 4,304 ) Other comprehensive income — — — — 58 58 Balance at July 31, 2024 23,128 $ — $ 259,911 $ 402,362 $ ( 2,707 ) $ 659,566 See Notes to Condensed Consolidated Financial Statements 6 TITAN MACHINERY INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Six Months Ended July 31, 2025 2024 Operating Activities Net (loss) income $ ( 19,204 ) $ 5,136 Adjustments to reconcile net (loss) income to net cash provided by operating activities Depreciation and amortization 18,329 18,413 Impairment 589 1,473 Deferred income taxes ( 8,826 ) ( 650 ) Stock-based compensation expense 2,990 2,099 Noncash interest expense 494 493 Noncash lease expense 2,583 4,630 Sale-leaseback finance modification expense — 11,159 Gain on extinguishment of debt — ( 3,585 ) Other, net ( 3,864 ) 2,689 Changes in assets and liabilities, net of effects of acquisitions Receivables ( 4,199 ) 18,499 Prepaid expenses and other assets 6,304 9,301 Inventories ( 2,929 ) ( 242,113 ) Manufacturer floorplan payable 100,638 206,103 Deferred revenue ( 51,417 ) ( 58,326 ) Accounts payable, accrued expenses and other and other long-term liabilities 8,406 ( 22,688 ) Net Cash Provided by (Used for) Operating Activities 49,894 ( 47,367 ) Investing Activities Rental fleet purchases — ( 361 ) Property and equipment purchases (excluding rental fleet) ( 15,655 ) ( 22,174 ) Proceeds from sale of property and equipment 3,829 1,198 Acquisition consideration, net of cash acquired ( 13,370 ) ( 260 ) Other, net 344 130 Net Cash Used for Investing Activities ( 24,852 ) ( 21,467 ) Financing Activities Net change in non-manufacturer floorplan payable ( 19,633 ) 78,965 Proceeds from long-term debt borrowings 1,460 — Principal payments on long-term debt and finance leases ( 11,077 ) ( 11,853 ) Payment of debt issuance costs — ( 3,745 ) Other, net ( 711 ) ( 956 ) Net Cash (Used for) Provided by Financing Activities ( 29,961 ) 62,411 Effect of Exchange Rate Changes on Cash 1,696 ( 424 ) Net Change in Cash ( 3,223 ) ( 6,847 ) Cash at Beginning of Period 35,898 38,066 Cash at End of Period $ 32,675 $ 31,219 Supplemental Disclosures of Cash Flow Information Cash paid during the period Income taxes, net of refunds $ 559 $ 6,712 Interest $ 22,023 $ 21,408 Supplemental Disclosures of Noncash Investing and Financing Activities Net property and equipment financed with long-term debt, finance leases, accounts payable and accrued liabilities $ ( 2,341 ) $ 8,415 Long-term debt to acquire finance leases $ — $ 42,182 Net transfer of assets to property and equipment from inventories $ 336 $ ( 7,201 ) See Notes to Condensed Consolidated Financial Statements 7 Table of Contents TITAN MACHINERY INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. The quarterly operating results for Titan Machinery Inc. ("we", "us", "our", or the “Company”) are subject to fluctuation due to varying weather patterns and other factors influencing customer profitability, which may impact the timing and amount of equipment purchases, rentals, and after-sales parts and service purchases by the Company’s agriculture, construction and international customers. Therefore, operating results for the six-months ended July 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2026. The information contained in the consolidated balance sheet as of January 31, 2025 was derived from the audited consolidated financial statements of the Company for the fiscal year then ended. These Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2025 as filed with the SEC. Nature of Business The Company is engaged in the retail sale, service and rental of agricultural and construction machinery through its stores in the United States, Europe, and Australia. The Company’s North American stores are located in Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, Washington, Wisconsin, and Wyoming. Internationally, the Company's European stores are located in Bulgaria, Germany, Romania, and Ukraine and the Company's Australian stores are located in New South Wales, South Australia, and Victoria in Southeastern Australia. Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, particularly related to realization of inventory, impairment of long-lived assets, goodwill, or indefinite lived intangible assets, collectability of receivables, and income taxes. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material accounts, transactions and profits between the consolidated companies have been eliminated in consolidation. Recently issued accounting pronouncements not yet adopted In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ( “ ASU ” ) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires additional income tax disclosures in the rate reconciliation table for federal, state and foreign income taxes, in addition to more details about the reconciling items in some categories when items meet a certain quantitative threshold. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in ASU 2024-03 require public entities to disclose specified information about certain costs and expenses. Additionally, in January 2025, FASB issued ASU 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date to clarify the effective date of ASU 2024-03. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements. 8 Table of Contents In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“VIE”), which provides clarifying guidance on determining the accounting acquirer in certain transactions involving VIEs. The update aims to improve consistency and comparability in financial reporting. The guidance will be effective for annual periods beginning after December 15, 2026, including interim periods within those annual periods. Early adoption is permitted. Upon adoption, the guidance will be applied prospectively. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements. In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides all entities, including public business entities, with a practical expedient, which allows the entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when developing reasonable and supportable forecasts as part of estimating expected credit losses. The amendments in ASU No. 2025-05 should be applied prospectively and are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements. NOTE 2 - EARNINGS PER SHARE The following table sets forth the calculation of basic and diluted earnings per share (“EPS”): Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 (in thousands, except per share data) Numerator: Net (loss) income $ ( 6,000 ) $ ( 4,304 ) $ ( 19,204 ) $ 5,136 Allocation to participating securities — — — ( 78 ) Net (loss) income attributable to Titan Machinery Inc. common stockholders $ ( 6,000 ) $ ( 4,304 ) $ ( 19,204 ) $ 5,058 Denominator: Basic weighted-average common shares outstanding 22,764 22,617 22,717 22,580 Plus: incremental shares from vesting of restricted stock units — — — 3 Diluted weighted-average common shares outstanding 22,764 22,617 22,717 22,583 (Losses) Earnings Per Share: Basic $ ( 0.26 ) $ ( 0.19 ) $ ( 0.85 ) $ 0.22 Diluted $ ( 0.26 ) $ ( 0.19 ) $ ( 0.85 ) $ 0.22 Anti-dilutive shares excluded from diluted weighted-average common shares outstanding: Restricted stock units 15 12 15 — 9 Table of Contents NOTE 3 - REVENUE Revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration we expect to collect in exchange for those goods or services. Sales, value added and other taxes collected from our customers concurrent with our revenue activities are excluded from revenue. The following tables present our revenue disaggregated by revenue source and segment: Three Months Ended July 31, 2025 Agriculture Construction Europe Australia Total (in thousands) Equipment $ 235,657 $ 42,363 $ 77,880 $ 20,362 $ 376,262 Parts 73,216 13,011 16,070 6,925 109,222 Service 35,156 7,219 3,440 2,985 48,800 Other 1,091 424 525 295 2,335 Revenue from contracts with customers 345,120 63,017 97,915 30,567 536,619 Rental 635 8,970 202 — 9,807 Total revenue $ 345,755 $ 71,987 $ 98,117 $ 30,567 $ 546,426 Three Months Ended July 31, 2024 Agriculture Construction Europe Australia Total (in thousands) Equipment $ 312,556 $ 52,844 $ 49,146 $ 50,687 $ 465,233 Parts 75,430 11,049 15,407 7,919 109,805 Service 34,570 7,214 3,076 2,408 47,268 Other 1,000 520 198 284 2,002 Revenue from contracts with customers 423,556 71,627 67,827 61,298 624,308 Rental 480 8,564 322 — 9,366 Total revenue $ 424,036 $ 80,191 $ 68,149 $ 61,298 $ 633,674 Six Months Ended July 31, 2025 Agriculture Construction Europe Australia Total (in thousands) Equipment $ 513,422 $ 89,047 $ 155,158 $ 55,475 $ 813,102 Parts 146,249 25,694 29,442 13,466 214,851 Service 67,575 14,009 6,065 5,168 92,817 Other 2,009 719 941 421 4,090 Revenue from contracts with customers 729,255 129,469 191,606 74,530 1,124,860 Rental 886 14,648 369 — 15,903 Total revenue $ 730,141 $ 144,117 $ 191,975 $ 74,530 $ 1,140,763 10 Table of Contents Six Months Ended July 31, 2024 Agriculture Construction Europe Australia Total (in thousands) Equipment $ 651,269 $ 99,939 $ 96,645 $ 85,469 $ 933,322 Parts 150,395 22,879 29,931 14,827 218,032 Service 67,512 14,014 5,833 4,987 92,346 Other 1,875 836 351 435 3,497 Revenue from contracts with customers 871,051 137,668 132,760 105,718 1,247,197 Rental 670 14,015 494 — 15,179 Total revenue $ 871,721 $ 151,683 $ 133,254 $ 105,718 $ 1,262,376 Unbilled Receivables and Deferred Revenue Unbilled receivables from contracts with customers amounted to $ 30.3 million and $ 24.6 million as of July 31, 2025 and January 31, 2025, respectively. This increase in unbilled receivables is primarily the result of a seasonal increase in the volume of our service transactions in which we recognize revenue as our work is performed and prior to customer invoicing. Deferred revenue from contracts with customers amounted to $ 41.4 million and $ 91.7 million as of July 31, 2025 and January 31, 2025, respectively. Our deferred revenue most often increases in the fourth quarter of each fiscal year due to a higher level of customer down payments or prepayments and longer time periods between customer payment and delivery of the equipment asset, and the related recognition of equipment revenue, prior to its seasonal use. During the six months ended July 31, 2025 and 2024, the Company recognized $ 87.8 million and $ 85.6 million, respectively, of revenue that was included in the deferred revenue balance as of January 31, 2025 and January 31, 2024, respectively. No material amount of revenue was recognized during the six months ended July 31, 2025 or 2024 from performance obligations satisfied in previous periods. NOTE 4 - RECEIVABLES The Company provides an allowance for expected credit losses on its nonrental receivables. To measure the expected credit losses, receivables have been grouped based on shared credit risk characteristics as shown in the table below. Trade and unbilled receivables from contracts with customers have credit risk and the allowance is determined by applying expected credit loss percentages to aging categories based on historical experience that are updated each quarter. The rates may also be adjusted to the extent future events are expected to differ from historical results. In addition, the allowance is adjusted based on information obtained by continued monitoring of individual customer credit. Short-term receivables from finance companies, other receivables due from manufacturers, and other receivables have not historically resulted in any credit losses to the Company. These receivables are short-term in nature and deemed to be of good credit quality and have no need for any allowance for expected credit losses. Management continually monitors these receivables and should information be obtained that identifies potential credit risk, an adjustment to the allowance would be made if deemed appropriate. Trade and unbilled receivables from rental contracts are primarily in the United States and are specifically excluded from the accounting guidance in determining an allowance for expected losses. The Company provides an allowance for these receivables based on historical experience and using credit information obtained from continued monitoring of customer accounts. 11 Table of Contents July 31, 2025 January 31, 2025 (in thousands) Trade and unbilled receivables from contracts with customers Trade receivables due from customers $ 66,757 $ 49,777 Unbilled receivables 30,269 24,584 Less allowance for expected credit losses ( 2,277 ) ( 1,994 ) 94,749 72,367 Short-term receivables due from finance companies 15,180 16,793 Trade and unbilled receivables from rental contracts Trade receivables 5,397 4,015 Unbilled receivables 1,207 580 Less allowance for expected credit losses ( 594 ) ( 578 ) 6,010 4,017 Other receivables Due from manufacturers 11,070 25,692 Other 599 945 11,669 26,637 Receivables, net of allowance for expected credit losses $ 127,608 $ 119,814 Following is a summary of allowance for credit losses on trade and unbilled accounts receivable by segment: Agriculture Construction Europe Australia Total (in thousands) Balance at January 31, 2025 $ 605 $ 209 $ 1,132 48 $ 1,994 Current expected credit loss provision 86 28 257 70 441 Write-offs charged against allowance ( 239 ) ( 71 ) — ( 28 ) ( 338 ) Credit loss recoveries collected 24 8 4 — 36 Foreign exchange impact — — 139 5 144 Balance at July 31, 2025 $ 476 $ 174 $ 1,532 $ 95 $ 2,277 Agriculture Construction Europe Australia Total (in thousands) Balance at January 31, 2024 $ 164 $ 177 $ 2,638 59 $ 3,038 Current expected credit loss provision 146 110 ( 81 ) 38 213 Write-offs charged against allowance ( 46 ) ( 122 ) ( 42 ) (31) ( 241 ) Credit loss recoveries collected 2 34 57 — 93 Foreign exchange impact — — ( 26 ) (1) ( 27 ) Balance at July 31, 2024 $ 266 $ 199 $ 2,546 $ 65 $ 3,076 12 Table of Contents The following table presents impairment losses (recoveries) on receivables arising from sales contracts with customers and receivables arising from rental contracts reflected in Operating Expenses in the Condensed Consolidated Statements of Operations: Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 (in thousands) Impairment losses (recoveries) on: Receivables from sales contracts $ 211 $ ( 61 ) $ 391 $ 213 Receivables from rental contracts 27 16 55 130 $ 238 $ ( 45 ) $ 446 $ 343 NOTE 5 - INVENTORIES July 31, 2025 January 31, 2025 (in thousands) New equipment $ 686,176 $ 611,916 Used equipment 267,353 313,867 Parts and attachments 181,502 177,719 Work in process 4,969 5,170 $ 1,140,000 $ 1,108,672 NOTE 6 - PROPERTY AND EQUIPMENT July 31, 2025 January 31, 2025 (in thousands) Rental fleet equipment $ 71,511 $ 76,447 Machinery and equipment 39,140 38,306 Vehicles 120,922 114,402 Furniture and fixtures 31,175 29,840 Land, buildings, and leasehold improvements 294,189 288,761 556,937 547,756 Less accumulated depreciation ( 179,040 ) ( 168,066 ) $ 377,897 $ 379,690 The Company includes depreciation expense related to its rental fleet and its trucking fleet for hauling equipment in Cost of Revenue in the Condensed Consolidated Statements of Operations, which was $ 2.2 million and $ 2.4 million for the three months ended July 31, 2025 and 2024, respectively, and $ 4.1 million and $ 4.3 million for the six months ended July 31, 2025 and 2024, respectively. All other depreciation expense is included in Operating Expenses in the Condensed Consolidated Statements of Operations, which was $ 6.2 million and $ 6.1 million for the three months ended July 31, 2025 and 2024, respectively, and $12.3 million and $12.2 million for the six months ended July 31, 2025 and 2024, respectively The Company reviews its long-lived assets for potential impairment whenever events or circumstances indicate that the carrying value of the long-lived asset (or asset group) may not be recoverable. In the six months ended July 31, 2025, the Company determined, based on changing expectations regarding the future use of certain long-lived assets, that the $13.1 million carrying value of certain assets may not be fully recoverable. Accordingly, the Company performed an impairment analysis and estimated the fair value of the asset using an income approach. As a result, the Company recognized an impairment charge of $ 0.6 million within the Agriculture segment, which is included in Impairment of Intangibles and Long-Lived Assets in the Condensed Consolidated Statements of Operations. In the six months ended July 31, 2024, the Company determined, based on changing expectations regarding the future use of certain long-lived assets, that the $12.7 million carrying value of certain assets may not be fully recoverable. Accordingly, the Company performed an impairment analysis and estimated the fair value of the asset using an income approach. As a result, the Company recognized an impairment charge of $ 0.9 million within the Europe segment, which is included in Impairment of Intangibles and Long-Lived Assets in the Condensed Consolidated Statements of Operations. 13 Table of Contents NOTE 7 - INTANGIBLE ASSETS AND GOODWILL Finite-Lived Intangible Assets The Company's finite-lived intangible assets consist of customer relationships and covenants not to compete. The following is a summary of intangible assets with finite lives as of July 31, 2025 and January 31, 2025: July 31, 2025 January 31, 2025 Cost Accumulated Amortization Net Cost Accumulated Amortization Net (in thousands) (in thousands) Covenants not to compete $ 975 $ (592) $ 383 $ 1,125 $ (642) $ 483 Customer relationships 11,528 (3,027) 8,501 11,137 (2,278) 8,859 $ 12,503 $ (3,619) $ 8,884 $ 12,262 $ (2,920) $ 9,342 Total expense related to the amortization of intangible assets, which is recorded in Operating Expenses in the Condensed Consolidated Statements of Operations, was $ 0.5 million for three months ended July 31, 2025 and 2024. Total expense related to the amortization of intangible assets, which is recorded in Operating Expenses in the Condensed Consolidated Statements of Operations, was $ 0.9 million and $ 1.0 million for the six months ended July 31, 2025 and 2024, respectively. The Company performed an impairment test in the six months ended July 31, 2025 with respect to its German subsidiary's intangibles assets and recorded an impairment charge of $0.1 million within the Europe segment, which is included in Impairment of Intangible and Long-Lived Assets in the Condensed Consolidated Statements of Operations. Future amortization expense, as of July 31, 2025, is expected to be as follows: Fiscal Year Ending January 31, Amount (in thousands) 2026 (remainder) $ 891 2027 1,805 2028 1,758 2029 1,638 2030 1,599 Thereafter 1,193 $ 8,884 Indefinite-Lived Intangible Assets The Company's indefinite-lived intangible assets consist of distribution rights assets. The following is a summary of the changes in indefinite-lived intangible assets, by segment, for the six months ended July 31, 2025: Agriculture Construction Australia Total (in thousands) January 31, 2025 $ 18,154 $ 72 $ 20,738 $ 38,964 Foreign currency translation — — 1,135 1,135 July 31, 2025 $ 18,154 $ 72 $ 21,873 $ 40,099 14 Table of Contents Goodwill The following presents changes in the carrying amount of goodwill, by segment, for the six months ended July 31, 2025: Agriculture Australia Total (in thousands) January 31, 2025 $ 37,820 $ 23,426 $ 61,246 Arising from business combinations 1,400 — 1,400 Foreign currency translation — 1,290 1,290 July 31, 2025 $ 39,220 $ 24,716 $ 63,936 The Company performed an interim impairment test in the six months ended July 31, 2025 for the German reporting unit. Under the impairment test, the fair value of the reporting unit is estimated using an income approach in which a discounted cash flow analysis is utilized, which includes a five-year forecast of future operating performance for the reporting unit and a terminal value that estimates sustained long-term growth. The discount rate applied to the estimated future cash flows reflects an estimate of the weighted-average cost of capital of comparable companies. The quantitative goodwill impairment analysis for the German reporting unit indicated that the estimated fair value of the reporting unit was less than the carrying value. The implied fair value of the goodwill associated with the reporting unit approximated zero, thus requiring a full impairment charge of the goodwill carrying value of the reporting unit. As such, a goodwill impairment charge of $0.5 million was recognized within the Europe segment, which is included in Impairment of Goodwill in the Condensed Consolidated Statements of Operations. NOTE 8 - FLOORPLAN PAYABLE/LINES OF CREDIT As of July 31, 2025, the Company had floorplan and working capital lines of credit totaling $ 1.5 billion, which is primarily comprised of three floorplan lines of credit: (i) $ 875.0 million credit facility with CNH Industrial N.V. (“CNH”), (ii) $ 390.0 million floorplan line of credit and $110.0 million working capital line of credit under its credit agreement with a syndicate of banks (“Bank Syndicate Agreement”), and (iii) $ 80.0 million credit facility with DLL Finance LLC (“DLL Finance”). The Company's outstanding balances of floorplan lines of credit as of July 31, 2025 and January 31, 2025, consisted of the following: July 31, 2025 January 31, 2025 (in thousands) CNH $ 613,161 $ 520,927 Bank Syndicate Agreement Floorplan Loan 124,489 127,154 DLL Finance 39,416 37,859 Other outstanding balances with manufacturers and non-manufacturers 75,159 69,758 $ 852,225 $ 755,698 As of July 31, 2025, the interest-bearing floorplan payables carried a variable interest rate with a range of 3.08 % to 7.50 % compared to a range of 4.06 % to 9.15 % as of January 31, 2025. The Company had non-interest-bearing floorplan payables of $ 394.8 million and $ 302.4 million, as of July 31, 2025 and January 31, 2025, respectively. 15 Table of Contents NOTE 9 - LONG TERM DEBT The following is a summary of the Company's long-term debt as of July 31, 2025 and January 31, 2025: Description Maturity Dates Interest Rates July 31, 2025 January 31, 2025 (in thousands) Mortgage loans, secured Various through May 2039 2.1% to 7.3% $ 124,963 $ 129,604 Sale-leaseback financing obligations December 2028 to December 2030 6.1% to 6.2% 9,685 9,804 Vehicle loans, secured Various through February 2031 2.1% to 7.6% 27,994 27,198 Other Various through September 2029 2.4% to 7.4% 1,848 2,081 Total debt 164,490 168,687 Less: current maturities ( 11,432 ) ( 10,920 ) Long-term debt $ 153,058 $ 157,767 NOTE 10 - DERIVATIVE INSTRUMENTS The Company holds derivative instruments for the purpose of minimizing exposure to fluctuations in foreign currency exchange rates to which the Company is exposed in the normal course of its operations. From time to time, the Company uses foreign currency forward contracts to hedge the effects of fluctuations in exchange rates on outstanding intercompany loans. The Company does not formally designate and document such derivative instruments as hedging instruments; however, the instruments are an effective economic hedge of the underlying foreign currency exposure. Both the gain or loss on the derivative instrument and the offsetting gain or loss on the underlying intercompany loan are recognized in earnings immediately, thereby eliminating or reducing the impact of foreign currency exchange rate fluctuations on net income. The Company's foreign currency forward contracts generally have one-month to three-month maturities. The notional value of outstanding foreign currency contracts was $ 34.8 million and $ 46.1 million as of July 31, 2025 and January 31, 2025, respectively. As of July 31, 2025 and January 31, 2025, the fair value of the Company's outstanding derivative instruments was not material. Derivative instruments recognized as assets are recorded in Prepaid expenses and other in the Condensed Consolidated Balance Sheets, and derivative instruments recognized as liabilities are recorded in Accrued expenses and other in the Condensed Consolidated Balance Sheets. The following table sets forth the gains and losses recognized in income from the Company’s derivative instruments for the three and six months ended July 31, 2025 and 2024. Gains and losses are recognized in Interest and other income (expense) in the Condensed Consolidated Statements of Operations: Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 (in thousands) Foreign currency contract (loss) gain $ ( 140 ) $ ( 25 ) $ ( 2,186 ) $ 128 16 Table of Contents NOTE 11 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following is a summary of the changes in accumulated other comprehensive income (loss), by component, for the six month periods ended July 31, 2025 and 2024: Foreign Currency Translation Adjustment Net Investment Hedging Gain Total Accumulated Other Comprehensive Income (Loss) (in thousands) Balance, January 31, 2025 $ ( 11,045 ) $ 2,711 $ ( 8,334 ) Other comprehensive income 3,661 — 3,661 Balance, April 30, 2025 ( 7,384 ) 2,711 ( 4,673 ) Other comprehensive income 9,511 — 9,511 Balance, July 31, 2025 2,127 2,711 4,838 Foreign Currency Translation Adjustment Net Investment Hedging Gain Total Accumulated Other Comprehensive Income (Loss) (in thousands) Balance, January 31, 2024 $ ( 951 ) $ 2,711 $ 1,760 Other comprehensive loss ( 4,525 ) — ( 4,525 ) Balance, April 30, 2024 ( 5,476 ) 2,711 ( 2,765 ) Other comprehensive income 58 — 58 Balance, July 31, 2024 ( 5,418 ) 2,711 ( 2,707 ) NOTE 12 - LEASES As Lessor Revenue generated from leasing activities is disclosed, by segment, in Note 3 - Revenue. The following is the balance of our dedicated rental fleet assets, included in Property and equipment, net of accumulated depreciation in the Condensed Consolidated Balance Sheets, of our Construction segment as of July 31, 2025 and January 31, 2025: July 31, 2025 January 31, 2025 (in thousands) Rental fleet equipment $ 71,511 $ 76,447 Less accumulated depreciation ( 25,344 ) ( 26,327 ) $ 46,167 $ 50,120 NOTE 13 - FAIR VALUE OF FINANCIAL INSTRUMENTS As of July 31, 2025, the fair value of the Company's foreign currency contracts, which are either assets or liabilities measured at fair value on a recurring basis, was not material. These foreign currency contracts were valued using a discounted cash flow analysis, which is an income approach, utilizing readily observable market data as inputs, which is classified as a Level 2 fair value measurement. The Company also has financial instruments that are not recorded at fair value in the Condensed Consolidated Balance Sheets, including cash, receivables, payables and long-term debt. The carrying amounts of these financial instruments approximated their fair values as of July 31, 2025 and January 31, 2025. The fair value of these financial instruments was estimated based on Level 2 fair value inputs. The estimated fair value of the Company's Level 2 long-term debt, which is provided for disclosure purposes only, is as follows: July 31, 2025 January 31, 2025 (in thousands) Carrying amount $ 154,805 $ 158,883 Fair value $ 142,838 $ 145,010 17 Table of Contents NOTE 14 - INCOME TAXES The effective tax rate was 27.1 % and 1.3 % for the three months ended July 31, 2025 and 2024, respectively. The effective tax rate was 24.7 % and 39.8 % for the six months ended July 31, 2025 and 2024, respectively. The effective tax rate is subject to variation of the impact of certain discrete items, mainly the vesting of share-based compensation, the mix of domestic and foreign income and the impact of the recognition of valuation allowance on our foreign deferred tax assets. On July 4, 2025, One Big Beautiful Bill Act was enacted into law in the United States. This legislation includes various tax provisions that may affect U.S. corporate taxpayers, including changes to the deductibility of interest expense and depreciation of certain property, among other items. The Company is currently assessing the potential impact of this new legislation on its annual income tax expense, deferred tax assets and liabilities and valuation allowances. Based on its preliminary analysis, the Company does not expect the legislation to have a material effect on its financial statements. NOTE 15 - BUSINESS COMBINATIONS Fiscal 2026 On May 15, 2025, the Company acquired certain assets of Farmers Implement and Irrigation, Inc. “Farmers Implement”. This acquired New Holland agriculture dealership consists of one agriculture equipment store in Brookings, South Dakota. This acquisition occurred within the Company’s Agriculture segment. The total consideration transferred for the acquired business was $13.4 million paid in cash, which included the real estate. In connection with the acquisition, the Company acquired from CNH and certain other manufacturers equipment and parts inventory previously owned by Farmers Implement. Upon acquiring such inventories, the Company was offered floorplan financing by the respective manufacturers. In total, the Company acquired inventory and recognized a corresponding financing liability of $7.0 million. The recognition of these inventories and the associated financing liabilities are not included as part of the accounting for the business combination. Fiscal 2025 The Company acquired Gose Landtechnik e.K. on March 1, 2024, which consists of one location in Germany and is included in the Europe segment. This acquisition is not considered material to the Company's consolidated financial results during the six months ended July 31, 2024 and has been included in the Condensed Consolidated Financial Statements from the date of the acquisition. NOTE 16 - CONTINGENCIES The Company is engaged in legal proceedings incidental to the normal course of business. Due to their nature, these legal proceedings involve inherent uncertainties, including but not limited to, court rulings, negotiations between affected parties and governmental intervention. Based upon the information available to the Company and discussions with legal counsel, it is the Company's opinion that the outcome of these various legal actions and claims will not have a material impact on its financial position, results of operations or cash flows. These matters, however, are subject to many uncertainties, and the outcome of any matter is not predictable. NOTE 17 - BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION The Company has four reportable segments: Agriculture, Construction, Europe and Australia. Revenue between segments is immaterial. The Company retains various unallocated income/(expense) items and assets at the general corporate level, which the Company refers to as “Shared Resources” in the table below. Shared Resources assets primarily consist of cash and property and equipment. Net sales and long-lived assets by geographic area were as follows: Revenue Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 (in thousands) (in thousands) United States $ 417,742 $ 504,227 $ 874,258 $ 1,023,404 Australia 30,567 61,298 74,530 105,718 Other international countries 98,117 68,149 191,975 133,254 $ 546,426 $ 633,674 $ 1,140,763 $ 1,262,376 18 Table of Contents Long-lived assets July 31, 2025 January 31, 2025 (in thousands) United States $ 377,610 $ 363,672 Australia 27,098 24,512 Other international countries 22,063 20,323 $ 426,771 $ 408,507 Certain financial information for each of the Company's business segments is set forth below. Three Months Ended July 31, 2025 (in thousands) Agriculture Construction Europe Australia Total Revenue Equipment $ 235,657 $ 42,363 $ 77,880 $ 20,362 $ 376,262 Parts 73,216 13,011 16,070 6,925 109,222 Service 35,156 7,219 3,440 2,985 48,800 Rental and other 1,726 9,394 727 295 12,142 $ 345,755 $ 71,987 $ 98,117 $ 30,567 $ 546,426 Cost of Revenue Equipment $ 228,867 $ 38,937 $ 65,364 $ 18,238 Parts 48,822 9,075 11,861 4,816 Service 12,490 2,270 1,750 971 Rental and other 1,655 6,926 500 238 Operating expense 59,492 13,572 12,150 7,397 Impairment charge (1) 323 — — — Floorplan interest expense 4,371 1,226 639 503 Other segment expense (income), net (2) 2,030 1,197 706 511 Segment (loss) income before taxes $ ( 12,295 ) $ ( 1,216 ) $ 5,147 $ ( 2,107 ) $ (10,471) Shared resources unallocated expense 2,235 Loss before taxes $ ( 8,236 ) Depreciation and amortization $ 4,262 $ 2,668 $ 890 $ 851 Capital expenditures $ 908 $ 4,481 $ 453 $ 821 $ 6,663 Shared Resources Capital expenditures (3) 1,004 Total Capital expenditures $ 7,667 (1) Impairment charge related to long-lived assets. (2) Balance consists of other interest income (expense) and foreign currency. (3) Shared Resources balance includes construction in process activity for Agriculture and Construction. 19 Table of Contents Three Months Ended July 31, 2024 (in thousands) Agriculture Construction Europe Australia Total Revenue Equipment $ 312,556 $ 52,844 $ 49,146 $ 50,687 $ 465,233 Parts 75,430 11,049 15,407 7,919 109,805 Service 34,570 7,214 3,076 2,408 47,268 Rental and other 1,480 9,084 520 284 11,368 $ 424,036 $ 80,191 $ 68,149 $ 61,298 $ 633,674 Cost of Revenue Equipment $ 287,022 $ 47,309 $ 43,054 $ 44,853 Parts 49,686 7,840 11,410 5,302 Service 11,691 2,050 1,539 863 Rental and other 1,611 6,515 288 262 Operating expense 62,187 14,431 10,979 7,424 Impairment charge (1) — — 1,473 — Floorplan interest expense 4,614 1,113 1,053 730 Sale-leaseback financing expense 6,067 5,092 — — Other segment expense (income), net (2) 523 734 623 502 Segment income (loss) before taxes $ 635 $ ( 4,893 ) $ ( 2,270 ) $ 1,362 $ (5,166) Shared resources unallocated expense 916 Loss before taxes $ ( 4,250 ) Depreciation and amortization $ 3,527 $ 2,646 $ 1,026 $ 849 Capital expenditures $ 11,033 $ 4,625 $ 1,857 $ 568 $ 18,083 Shared Resources Capital expenditures (3) ( 6,666 ) Total Capital expenditures $ 11,417 (1) Impairment charge related to goodwill, intangible and long-lived assets. (2) Balance consists of other interest income (expense) and foreign currency. (3) Shared Resources balance includes construction in process activity for Agriculture and Construction. 20 Table of Contents Six Months Ended July 31, 2025 (in thousands) Agriculture Construction Europe Australia Total Revenue Equipment $ 513,422 $ 89,047 $ 155,158 $ 55,475 $ 813,102 Parts 146,249 25,694 29,442 13,466 214,851 Service 67,575 14,009 6,065 5,168 92,817 Rental and other 2,895 15,367 1,310 421 19,993 $ 730,141 $ 144,117 $ 191,975 $ 74,530 $ 1,140,763 Cost of Revenue Equipment $ 497,469 $ 81,976 $ 129,994 $ 49,316 Parts 98,109 18,270 21,978 9,296 Service 24,609 4,538 3,217 1,725 Rental and other 3,155 11,173 861 497 Operating expense 119,040 28,729 23,359 14,512 Impairment charge (1) 589 — — — Floorplan interest expense 8,236 2,412 1,403 1,072 Other segment expense (income), net (2) 4,009 2,412 1,306 781 Segment (loss) income before taxes $ ( 25,075 ) $ ( 5,393 ) $ 9,857 $ ( 2,669 ) $ (23,280) Shared resources unallocated expense ( 2,239 ) Loss before taxes $ ( 25,519 ) Depreciation and amortization $ 8,532 $ 4,910 $ 1,722 $ 1,680 Capital expenditures $ 3,144 $ 5,348 $ 1,055 $ 1,195 $ 10,742 Shared Resources Capital expenditures (3) 4,913 Total Capital expenditures $ 15,655 (1) Impairment charge related to long-lived assets. (2) Balance consists of other interest income (expense) and foreign currency. (3) Shared Resources balance includes construction in process activity for Agriculture and Construction. 21 Table of Contents Six Months Ended July 31, 2024 (in thousands) Agriculture Construction Europe Australia Total Revenue Equipment $ 651,269 $ 99,939 $ 96,645 $ 85,469 $ 933,322 Parts 150,395 22,879 29,931 14,827 218,032 Service 67,512 14,014 5,833 4,987 92,346 Rental and other 2,545 14,851 845 435 18,676 $ 871,721 $ 151,683 $ 133,254 $ 105,718 $ 1,262,376 Cost of Revenue Equipment $ 588,689 $ 87,266 $ 82,721 $ 75,800 Parts 99,713 15,931 21,787 9,960 Service 23,978 4,145 3,079 1,718 Rental and other 2,480 10,046 446 485 Operating expense 126,931 30,052 21,583 14,714 Impairment charge (1) — — 1,473 — Floorplan interest expense 9,726 2,372 2,054 1,240 Sale-leaseback financing expense 6,067 5,092 — — Other segment expense (income), net (2) 457 1,404 1,030 925 Segment income (loss) before taxes $ 13,680 $ ( 4,625 ) $ ( 919 ) $ 876 $ 9,012 Shared resources unallocated expense ( 477 ) Income before taxes $ 8,535 Depreciation and amortization $ 6,776 $ 4,753 $ 1,836 $ 1,761 Capital expenditures $ 13,335 $ 4,740 $ 2,697 $ 2,030 $ 22,802 Shared Resources Capital expenditures (3) ( 628 ) Total Capital expenditures $ 22,174 (1) Impairment charge related to goodwill, intangible and long-lived assets. (2) Balance consists of other interest income (expense) and foreign currency. (3) Shared Resources balance includes construction in process activity for Agriculture and Construction. Total Assets July 31, 2025 January 31, 2025 (in thousands) Agriculture $ 1,091,687 $ 1,060,180 Construction 250,933 252,471 Europe 282,020 248,282 Australia 200,376 192,331 Shared Resources Assets (1) $ 52,926 $ 60,674 $ 1,877,942 $ 1,813,938 (1) Agriculture and Construction cash balances are held at Shared Resources. 22 Table of Contents