Cummins Inc.

Greetings and welcome to Cummins, Inc. First Quarter 2026 Earnings Conference Call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star 0 on your telephone keypad. If you wish to register a question during today's conference, please press star 1 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Nick Ahrens, Executive Director of Investor Relations. Thank you. Please go ahead.

Thank you, Donna. Good morning, everyone, and welcome to our teleconference today to discuss Cummins results for the first quarter of 2026. Participating with me today are Jennifer Rumsey, our Chair and Chief Executive Officer, and Mark Smith, our Chief Financial Officer. We will all be available to answer questions at the end of the teleconference. Before we start, please note that some of the information that you will hear or be given today will consist of forward-looking statements within the meaning of the Security Exchange Act of 1934. Such statements express our forecasts, expectations, hopes, beliefs, and intentions on strategies regarding the future. Our actual future results could differ materially from those projected in such forward-looking statements because of several risks and uncertainties. More information regarding such risks and uncertainties is available in the forward-looking disclosure statement in the slide deck and our filings with the Securities and Exchange Commission, particularly the risk factors section of our most recently filed annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q. During this call, we will be discussing certain non-GAAP financial measures, and we will refer you to our website for the reconciliation of those measures to GAAP financial measures. Our press release with a copy of the financial statements and a copy of today's webcast presentation are available on our website within the investor relations section at Cummins.com. With that out of the way, I will turn you over to our chair and CEO, Jennifer Rumsey, to kick us off.

Thank you, Nick. Good morning, everyone. I'll start with the summary of our first quarter accomplishments and financial results, then discuss our sales and end market trends by region. I will finish with the discussion of our outlook for 2026. Mark will then walk you through additional detail on our first quarter performance and our full year forecast. Before getting into the details of our performance, I want to highlight a few major events from the quarter. In February, Cummins marked a significant milestone with the deployment of the world's first commercial hybrid electric ultra-class mining truck, now in operation and production at the Casaronas Open Pit Mine in Chile. This pilot represents our first retrofit of a 300-ton Komatsu haul truck using first-mode hybrid technology in daily operation. It reflects our strategy of delivering solutions that reduce CO2 emissions today while advancing our customers' long-term decarbonization goals. In March, Mack Truck announced the integration of the Cummins X10 engine into the Mack Granite chassis. This milestone reflects the strong collaboration between the Mack and Cummins teams and our shared commitment to delivering reliable, high-performing solutions for vocational customers. The X10 is well-suited for demanding work applications, and its integration into the Granite platform will provide customers with a compelling option in the vocational truck segment. Finally, during the quarter, we took targeted actions in our Accelera segment by completing the sale of our low pressure fuel cell business and related customer commitments for this business. This sale will enable continued improvement in our trajectory of our financial results in the Accelera segment. Together, these actions demonstrate how we are executing against our strategy across our businesses. Now I will turn to our overall company performance for the first quarter of 2026 and cover some of our key markets. Sales for the first quarter were $8.4 billion, an increase of 3% compared to the first quarter of 2025. Growth was driven primarily by higher demand and power generation markets, particularly from data centers. This increase was partially offset by weaker North America heavy and medium duty truck demand, with unit volumes down 20% from a year ago. EBITDA was $1.3 billion, or 15.4%, which included a net charge of $199 million related to the sale of our low-pressure fuel cell business. Excluding this net charge, EBITDA was $1.5 billion, or 17.7%, compared to $1.5 billion, or 17.9%, a year ago. Lower North America truck volumes and higher compensation expenses were partially offset by higher power generation demand favorable pricing, and increased joint venture income. In power systems, we delivered record EBITDA dollars, reflecting continued operational improvements and strong end market demand. Our first quarter revenues in North America decreased 6% compared to 2025. Industry production of heavy-duty trucks in the first quarter was 50,000 units, down 23% from 2025 levels. while our heavy-duty unit sales were 18,000, down 16% year-over-year. Industry production of medium-duty trucks was 27,000 units in the first quarter of 2026, a decrease of 20% from 2025 levels, while our unit sales were 25,000, down 19% year-over-year. We shipped 30,000 engines to Stellantis for use in their RAM pickups in the first quarter of 2026, up 4% from 2025 levels, Revenues for North America power generation increased by 23%, driven primarily by continued strong data center demand. Our international revenues increased by 16% in the first quarter of 2026 compared to a year ago. First quarter revenues in China, including joint ventures, were $2.1 billion, an increase of 19% year over year, driven by accelerating data center demand and strong and off-highway export activity by our OEM customers. Industry demand for medium and heavy-duty trucks in China was 353,000 units, an increase of 20% from last year, driven by strong export demand. Our sales in units, including joint ventures, were 55,000, an increase of 14%. Industry demand for excavators in China in the first quarter was 73,000 units, an increase of 19% from 2025 levels. We sold 14,000 units, an increase of 25%, primarily driven by strong export demand. Sales of power generation equipment in China increased 84% in the first quarter due to accelerating data center demand. First quarter revenues in India, including joint ventures, were $814 million, an increase of 12% from the first quarter a year ago. Industry truck production increased 21% from 2025, driven by tax incentives that are accelerating underlying demand. Now let me provide our outlook for 2026, including some comments on individual regions and end markets. We are pleased to share that our expectations for 2026 have improved since our initial guidance issued in February. We are raising our forecast for total company revenues in 2026 to a range of up 8% to 11%, compared to our prior guidance of up 3% to 8%. We are raising our 2026 North America heavy duty truck forecast to a range of 230,000 to 250,000 units, up from our prior guidance of 220,000 to 240,000 units. This increase reflects the trend of strong recent orders and improving spot rates. We now expect the first half of the year to be stronger than previously anticipated, while the second half remains largely consistent with our prior outlook, including a modest pre-buy ahead of the 2027 EPA regulations. In the North America medium-duty truck market, we are increasing our forecast to 125,000 to 135,000 units in 2026, compared to our prior guide of 110,000 to 120,000 units, reflecting stronger than anticipated demand in the first half and momentum expected to continue into the second half of the year. Consistent with our prior guidance, our engine shipments for pickup trucks in North America are expected to be 125,000 to 140,000 units in 2026. In China, we now expect total revenue, including joint ventures, to increase 10% in 2026, an improvement from prior outlook of down 1%, driven by stronger data center demand. For heavy and medium-duty truck demand, we continue to expect a range of down 10% to flat versus prior year, consistent with our prior guidance and reflecting moderation and the benefits of scrapping policy, partially offset by continued strength and export demand. In India, we now project total revenue, including joint ventures, to increase 2% in 2026, up from our prior guide of 5% declines. We expect industry demand for trucks to be down 5% to up 5% for the year compared to our prior guidance of down 10% to flat, supported by tax rate reductions improving underlying demand. For global construction, we now expect demand to range from flat to up 10% year over year, an improvement from our prior outlook of down 10% to flat. In China, strong export demand is expected to partially offset continued domestic weakness. While in North America, we expect demand to remain largely flat given ongoing tariffs and interest rate uncertainty. We expect our major global high horse power markets to remain strong in 2026. In global power generation, we now project revenues to increase 15% to 25%, up from our prior guidance of 10% to 20%. This reflects accelerating data center demand supported by capacity additions we brought on in North America at the end of 2025. We are also seeing stronger than expected international growth, particularly in China and the broader Asia Pacific region, along with increased demand for lower output jet sets to meet customer demand amid ongoing capacity constraints and larger configurations. In mining, engine sales are expected to be flat to up 10%, driven by replacement demand and consistent with our prior outlook. For aftermarket, we expect a range of 2% to 8% increase for 2026, consistent with our prior outlook, supported by aging fleets, higher parts consumption, and increased rebuild activity. In summary, coming off a strong first quarter, we are raising our full-year sales outlook to 8% to 11% increase, and increasing our EBITDA margin guidance to a range of 17.75% to 18.5%. This reflects improving momentum in North America heavy and medium-duty truck markets, with volumes recovering from cyclical loads faster than previously anticipated, a higher outlook for global power generation, improvement in Accelera, and continued strong execution across our businesses. Additionally, this quarter, we returned $519 million to shareholders, including $243 million in share repurchases, consistent with our longstanding commitment to return approximately 50% of operating cash flow to shareholders. I want to thank our employees and leaders around the world for their commitment to our customers and to each other. Their focus and execution are delivering strong financial results. While continuing to strengthen our ability to invest in future growth, advanced sustainable solutions, and create long-term value for shareholders. I look forward to discussing our long-term strategy and updated financial targets at our analyst day on May 21st. Now, let me turn it over to Mark.