Direct Answer
43 SEC filers are classified under the Standard Industrial Classification codes that describe the machinery industry, and their latest annual reports show $190.1 billion of combined revenue and a median operating margin of 8.8%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
Machinery companies build engines, heavy equipment, farm machinery and industrial systems sold to businesses and governments. Cyclical orders and aftermarket parts and service shape revenue. The first numbers to compare across companies here are orders and backlog, aftermarket share and gross margin.
Key Industry Metrics
- Orders and backlog: Orders show demand booked in a period, and backlog is what remains to be delivered. They lead revenue and reflect customer capital budgets, so they help show the turning points of the cycle.
- Aftermarket share: Revenue from replacement parts and service on equipment already in use. A higher share is steadier and usually higher margin than new equipment sales.
- Gross margin: Sales less production cost as a share of sales. It reflects pricing, mix of equipment and service, and how well steel and component cost inflation is passed on.
- Dealer inventory: Equipment held by independent dealers that has been sold by the manufacturer but not yet to end users. Rising dealer stock can mean production exceeds real demand, and destocking later cuts factory orders.
- End-market mix: Share of sales to construction, mining, agriculture, energy and other customers. Each follows its own commodity and capital cycle, so mix shapes how cyclical results are.
Primary Macro Drivers
- Capital spending: Customers in construction, mining, farming and industry buy equipment as budgets expand, so capex drives orders and backlog.
- Commodity prices: Prices of crops, metals and energy set customer income and willingness to buy equipment, moving demand with a lag.
- Interest rates: Equipment is often financed, so rate changes alter affordability and the timing of purchases and replacement.
- Replacement cycles: Aging fleets need renewal after a cycle of use, creating demand independent of new expansion and supporting parts and service.
Major Risks
- Cyclical demand: Orders and dealer purchases can fall together in downturns, causing production cuts and fixed-cost absorption problems; watch backlog and order rates.
- Input costs: Steel, component and freight cost increases can exceed price recovery, lowering gross margin; watch the price-cost spread.
- Competition: Global rivals and low-cost makers can force discounts or take share, lowering pricing and margin; watch pricing commentary.
- Dealer inventory swings: Dealers building then cutting stock make factory shipments overstate or understate retail demand; watch dealer inventory and retail versus wholesale sales.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Cyclical |
| Capital Intensity | Medium |
| Regulatory Intensity | Medium |
| Industry Maturity | Mature |
| Geographic Importance | Global |
Machinery Filers in the SEC Record
43 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification codes 3523, 3531, 3537, 3540, 3550, 3559, 3560, 3561, 3569. Their latest fiscal years end between 2025 and 2026, and together they reported $190.1 billion of revenue. Median revenue growth over the prior year was 3.8%. Median operating margin was 8.8% and median net margin 7.2%. Median total liabilities were 45% of total assets, and 28 of 43 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| Caterpillar Inc | $67.6 billion | 4.3% | 16.5% | 13.1% | FY 2025 |
| Lam Research Corp | $23.2 billion | 26.0% | 35.3% | 31.3% | FY 2026 |
| Illinois Tool Works Inc | $16.0 billion | 0.9% | 26.3% | 19.1% | FY 2025 |
| Agco Corp | $10.1 billion | -13.5% | 5.9% | 7.2% | FY 2025 |
| Xylem Inc. | $9.0 billion | 5.5% | 13.5% | 10.6% | FY 2025 |
| Ingersoll Rand Inc. | $7.7 billion | 5.7% | 15.0% | 7.6% | FY 2025 |
| Regal Rexnord Corp | $5.9 billion | -1.6% | 11.5% | 4.7% | FY 2025 |
| Terex Corp | $5.4 billion | 5.7% | 8.8% | 4.1% | FY 2025 |
The 8 largest of 43 by revenue. Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code.
Where to Go Next
The Machinery guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
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Frequently Asked Questions
What are the main KPIs for the Machinery industry?
Key performance indicators for the Machinery industry include: Orders and backlog, Aftermarket share, Gross margin, Dealer inventory, End-market mix. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Machinery industry?
The Machinery industry is cyclical, meaning its revenues and earnings tend to expand during economic expansions and contract during downturns. Investors should monitor leading economic indicators and interest rate trends when evaluating timing.
What are the biggest risks in the Machinery industry?
The primary risks for Machinery companies include: Cyclical demand, Input costs, Competition, Dealer inventory swings. Investors should assess each company's exposure to these factors and its track record of navigating them.