I count every minute. I think we're live.
Okay.
Good afternoon, everyone. This is Tami Zakaria, Head of Machinery Equity Research at JP Morgan. We are delighted to have with us today Team Oshkosh. We have John Pfeifer, CEO, and we have Pat Davidson, Head of IR.
Mm-hmm.
John, I'll pass it on to you for an intro to Oshkosh.
Sure. Yeah, I'll just do a brief intro to level set everybody on who we are and what we do. This kinda gives at a glance a little bit about us. It says 2025 revenue at $10.4 billion. 2026, we got to do $11 billion in revenue. What we do is we are, we make heavy duty vehicles and equipment. It's vehicles and equipment that you see all around us. You cannot leave your house or your place of work without passing by critical equipment that's doing work in our communities every day. If you go to the next slide, Pat, you know, we have a representation of this one. Just how present our equipment is in communities. It's doing last mile delivery.
It's doing fire and emergency. It's doing environmental in the form of refuse and recycling service vehicles, wreckers, ground support equipment at an airport. Every time you fly and you see the ground support equipment, it's usually our equipment that's managing operations at the gate of an airport. Access equipment is probably our biggest brand with JLG. It's present in communities all over the place. Wherever people have to work at height, you typically see our equipment present in communities. The meaning of this is we're, you know, we lead in pretty much every end market that we're in, and communities that we all live in don't work if our equipment isn't present productively doing work that needs to get done in our communities.
I think what's really exciting about our business is that we've got a pretty powerful purpose. You know, we serve people in our communities that do the hardest work that there is to do. You think about a firefighter, or you think about a soldier in our defense business, or you think about somebody working on the tarmac of an airport when it's a rainstorm or 10 below zero. These are people that do tough work, and we look at our mission as giving them the ability every year to work safer, to work more productively, and to have more intuitive design of the equipment that they're using so they can get the job done and get it done well. The other thing that's exciting is that we're an engineering and technology company at our core.
We apply technology in where it makes sense for those people to do work more productively and more safely. When we lay out our vision of the future, we talk about what does the airport of the future look like? What does the neighborhood of the future look like? What does the job site of the future look like? When we lay out what those futures are, it's really about applying technology, and the where you see our technology more and more is in the form of autonomous functionality, sometimes fully autonomous vehicles.
In the future on a job site, even in the present on a job site, even in the present at an airport, you're seeing more and more autonomous operation where we're able to do work that people don't want to do, sometimes people shouldn't be doing them 'cause it's a little bit too dangerous, and getting it done more productively so that people can do work that's more fit for people to be doing. It's augmenting autonomy with people to get jobs done better in our end markets. We also embed AI into lots of our products today, where we can use AI to detect and do welding at height versus a person having to do it.
We can triangulate data at the gate of an airport to tell gate agents and people on the ground problems that might occur based upon machine learning and data that our system is learning, so we can prevent those problems and make sure flights are on time more often than they have been in the past. There's a lot of technology that's allowing us to shape the future of this work. We think that's really exciting, and it impacts people's lives who do that work, which is the most important thing about it. I'll finish with we laid out our targets to 2028 last year. We said we'll grow to $13 billion-$14 billion in revenue. We'll increase our operating margins by 200-400 basis points.
That would take it to 12%-14% at the highest level. We will deliver $18-$22 per share with what we see ahead of us in terms of how we're growing the company and the different end markets that we serve. With that kinda wraps up my intro, Tami.
That is a fantastic way to transition to the Q&A. We'll take questions from the audience here, but also we are taking questions online for this session as well. For those who are listening in, feel free to type in your question, and we will get your question answered by John and Pat. With that, I wanna start with your 2028 vision. You have some financial targets laid out there. You shared these targets last year. Since then, tariffs, wars?
Yeah
Many things not in anyone's, any company's control...
Right
...have happened. How confident are you in those targets still? What gives you the confidence to in those targets?
I'm still just as confident today as I was in June when we laid out the, w hen we laid out the targets. Sure, the last year has not been. It has had some unexpected disruptions. You talked about tariffs, we talk about wars happening. When we look at our growth, I would say, growth is rarely linear. 2025 was probably a bit more of a hiccup year 'cause we spent a lot of time in 2025 doing tariff engineering to minimize the impacts of tariffs to us or sometimes supply chain resourcing if that was gonna help us. That was our primary focus. When you look at the totality of what we do between now and 2028, if you look at half of our business already today has the backlog to deliver what we're forecasting in 2028.
The other businesses, the trajectory of growth for the Access Equipment segment, for example, is most correlated with non-residential construction. Right now that business is in a bit of a trough. It came down in 2025. We think it's gonna come down a touch in the first half of 2026 before it starts to grow again. When you look at that business and you look at our leading position in it, we know that there will be a point in time where it will start to turn and non-residential construction will turn, too. To not believe in that end market, and we do believe in that end market, would tell you that you don't believe in the American economy.
We are firm believers in the American economy, and we're firm believers that the end markets that we serve are going to continue to grow. Airports at a you know low double-digit growth rate right now. Access equipment will come back as construction starts to come back online outside of data centers, which tends to be where most of the growth is. We're just as confident today as we were back in June of last year, even though we've been through a bit of a tumultuous period of time.
Let's focus on some macro issues ongoing right now, the war in the Middle East.
Mm-hmm.
Do you have any direct or indirect exposure? We've seen footage of drone attacks, bombings, airports getting hit. Either way, is there any, you know, opportunity or, you know, any challenges stemming from this situation?
Well, I think the biggest thing that we pay attention to, and I think anybody that manufactures anything has to pay attention to this, and any consumer in our economy has to pay attention to it, is we want this to end quickly. I don't know when it's gonna end. I really don't. We want it to end quickly because it's gonna create and already is creating, will continue to create problems with supply in our economy. 25% of the world's aluminum comes through the Strait of Hormuz. We all know 20% of the world's oil comes through the Strait of Hormuz, and I could go on and on and on with other things that move through that critical supply chain.
That will be very disruptive to economies, ours and others, if it doesn't get resolved in a relatively expeditious way. I think, you know, I have to be honest, I think that's the biggest threat to this whole thing, is the impact to the economy that it could create. Of course, we're in the defense business. We make defense products. We make vehicles that are in use today as part of that conflict. We don't look at that as an opportunity. That's more of just our duty in terms of what we do to serve the Department of Defense.
Understood. Rate cuts, I think we've had six rate cuts since September 2024. Remind us which of your three segments have sensitivity to the fed rate?
Yeah
More importantly, on the ground, what are you hearing from customers? Are rates low enough now to spur incremental activity?
The simple answer to your question about where's our most sensitivity, it's clearly in the access equipment world. The reason it's in the access equipment world is 'cause we serve, of course, the big customers that we have, like United Rentals, Sunbelt, now, you know, EquipmentShare's a big player. We serve those customers, and they're great customers, but there's also thousands of independent operators that are in that market that we serve. They tend to be a little bit more sensitive to interest rates 'cause they have to carry fleet. Interest rates when they buy fleet matter in terms of when and what and how much they're going to buy. That's the biggest sensitivity to it. I think though, if I, y ou know, when I talk to our customer base and when I talk to even construction firms themselves, people that our customers are serving to put equipment where it's needed, whether it's a data center that's being built or just a small private non-residential project, I don't think that that's the thing that's holding them back today.
I think the thing that's holding customers back are two primary things that I hear. I hear about labor availability in construction end markets. Very hard to get labor to complete projects. Construction operators don't wanna kick off projects if they can't complete it on time. If they don't have enough people to complete it on time, their costs go up precipitously. That's something that holds back. The other thing is just uncertainty.
There's been a lot of uncertainty over the last year. What's around the next corner? They kinda wanna see that the environment is predictable over at least a couple of years to have the confidence to continue to renew and grow their fleet size. But the first thing about labor availability and construction end markets, that's why we're putting so much technology into our JLG brand and the access equipment market today, because what our customers want is productivity. If we can make material improvements in productivity in the end market, that gives them a lot more confidence in starting projects and getting projects done effectively and efficiently. You see a lot of technology on our JLG equipment today that's autonomous.
Staying on the macro theme, IEEPA tariffs?
Mm-hmm
Got struck down. I think, if I remember correctly, you spoke about $200 million of tariff.
Total tariff, yeah.
Total tariff pressure.
Yeah
This year. With IEEPA gone, does that change your expectation?
Well, a little bit, and I'll have to explain. The biggest tariff. Tariffs come in different forms, as we all know. The biggest impact to our company from a tariff perspective is Section 232 tariffs. When you think about Section 232, it is tariffs that are meant to provide support for critical industry, primarily. Steel's part of it, aluminum's part of it, automotive parts is part of it. That impacts us more than IEEPA does. When you think about IEEPA tariffs, sure, it's a material amount to us. When it was overturned, if you would just say, "Okay, it's overturned and nothing else is gonna happen," you'd say, "Sure, that's a bit of a change for the positive." However, they immediately implemented, as we all know, Section 122.
Section 122 is a flat 10% tax rate. When you look at the totality of the impact of a 10% tax rate versus IEEPA, it's a little bit of a tailwind for us versus the IEEPA tariff, but it's only gonna last until the end of July. From all the work that we do in Washington, D.C., we know that they'll replace it, and from what we understand, with something that looks very similar to what the IEEPA tariffs were. We're expecting the tariff landscape to look similar to what it did prior to the overturn of IEEPA. That's our expectation. Can't guarantee that, but that's what we're expecting.
Understood. Another topic comes up a lot in our conversations with investors is USMCA, which is, I think.
Yeah
Expiring this year. From Oshkosh's perspective, what would be a desirable outcome for you?
USMCA is really important to us. I think it is to most manufacturers in the United States. We have a lot of trade between Canada, the U.S., and Mexico, between the three countries. The best outcome for us would be if they make Section 232 tariffs exempt within USMCA. That would be the best outcome for us. Simple answer to your question.
That is super helpful. Let's switch to aerials. One of your peers has announced a strategic review of their business. You being the largest, how do you think about a potential sale of one of your peers? How could that impact you in terms of, you know, market share, pricing power down the line? How are you thinking about it?
It all depends on who ends up owning that business, right? It's a good business. The access equipment market in North America is a good business. It really depends on who owns it in terms of what does it mean for us. Of course, we're interested in who the future owner of the business is. We try not to get tied up in knots on that. We're the leader in the market. We're focused on our customers. We're focused on innovation for the product.
If you went to the CONEXPO show a week or two weeks ago now, I guess it is, you saw our JLG brand there present with all the technology we're bringing to life, whether it's autonomous welding at height and other activities that can be done without a human having to go to height, or you think about, we've showcased another innovation with autonomous robotic drywall finishing. That's a huge leap forward for construction operators. We put a lot of connectivity on our products to deliver digital insights to customers with a really strong uptake within our customer base. That stuff all matters.
It matters to the construction operators using the equipment and we're, you know, our intent is to stay focused on what matters for the end market and for the customers that use our equipment, and we believe that if we do that, we'll continue to be the leader in the market. We'll see who ends up being the future owner of that business.
Awesome. One question we get a lot from investors is there's some chatter that some equipment dealers are stepping up efforts in rental. What does that mean for someone like Oshkosh? I would think it probably would be good for you. It would diversify your customer mix, maybe improve your pricing power with a more diversified customer base. I wanna hear your take on this. How would you welcome if the industry were to go in that direction?
I guess the best way for me to answer that question is we are the most present in the aerial work platform space. Our brand is the leading brand. It's the most recognized in the end market. It's a premium brand. We work really closely with our customers. If people that use our equipment, the end users of our equipment, desire to buy from a specific channel, then we will be there to support that channel so that the end users of the equipment can get what they want to complete work when it needs to be completed. You know, I can't really comment beyond that.
Awesome. That's super helpful. Let's switch to the transportation segment. NGDVs, USPS, we know, has a vast fleet of...
Mm-hmm
...of, vehicles, and it's pretty old.
Yeah.
Do you see opportunity for that NGDV contract to be upsized down the line should the USPS decide to renew more of its fleet?
Well, I mean, it's already pretty big. We're talking in terms of last-mile delivery vehicles, the United States Postal Service has more than 200,000 vehicles on the road every day, six days a week. We're contracted right now to replace most of them, 165,000 vehicles. It will take us years to do that, and that was the plan with the Postal Service right from the beginning in terms of the pace of putting new vehicles in the market. It's not just about how fast can we build vehicles, it's also about they have to onboard and deploy vehicles at a pace that they can afford to train people and put those vehicles into the market. We decided that will happen over about a 10-year period.
That replaces a significant number of their vehicles. Sure there's been discussion about other opportunities beyond that, but right now, hey, just focusing on that 165,000 vehicles is a big program. It's going well. We're ahead of pace with deliveries to the United States Postal Service. We're continuing to run that plant as best that we possibly can. The drivers love the vehicles. They're a giant leap forward in functionality and productivity versus the vehicles they have been using for the last 40 years. Right now everything's on track, and we intend to keep it that way.
Awesome. That's great to know. A follow-up question on NGDVs. I think it started off a little slower than you would have liked?
Yeah, yeah.
What have been the learnings throughout this process, and what has been the feedback from your customer in terms of the functionality of the product? Is it being well-received? What's been the feedback from USPS?
Yeah. The feedback has been phenomenal from the drivers. You know, it was actually one of our buy-side analysts had one of the new Next Generation Delivery Vehicles go by their mailbox. This particular person asked the driver, "Hey, how's your new vehicle?" The driver talked about all the different advantages of the vehicle, how easy it was to operate. This particular person came back to us and had said, "It was as if you planted your storyline with this specific driver, and I just asked a random question when they were delivering my mail. That's just evidence that, you know, the drivers really do love the vehicle, and it's so much easier for them to get their work done efficiently than technology that was developed 30 and 40 years ago. We're pretty excited about that. You know, I'd say that, you know, we've really been driving hard on production output. Whenever you're in manufacturing and you create a brand-new plant with a brand-new product, you always wanna go to 0% to 100% in, like, a week, right? We've gone through that curve of getting the product up to production.
You know, it's a complicated vehicle and a 1 million sq ft plant with 1,000 workers in it, a lot of technology in the plant. It's never easy to do that. Sometimes, you know, you might hear the frustration that, hey, we're continuing to drive to get more production output. We're pretty happy with where we are, and I think our customer's pretty happy with where we are.
Maybe it's a little too early to ask this, but I'm still gonna ask. How do you think about the aftermarket opportunity down the line for this?
Yeah.
Given this is your proprietary product.
Yeah.
And fairly complex in terms of engineering.
Yeah
Even though it's easy to drive.
Yeah
It's user-friendly, so how do you view that as an opportunity?
Super important. The first thing about the importance of it is that aftermarket is really important to our customer. Any customer that we serve, no matter what the end market, but postal service or any last mile deliveries right there with it, keeping vehicles on the road productive is they care a lot about. In order to make that happen, you have to have a really good structure to supply aftermarket parts to keep vehicles on the road immediately. We've set up that structure. When you think about this fleet of vehicles, you know, we're talking about an enormous number of vehicles that are on the road six days a week, up to 10 hours a day, 52 weeks of the year. That's a really tough duty cycle.
You think about stop, start, stop, start, stop, start, stop, start all day long, every day of the year except Sunday. That's a tough duty cycle. That means there's a lot of service that has to happen to these vehicles throughout their life cycle, and the life cycle is designed to be minimum of 20 years. These vehicles probably themselves last up to 30 years. That drives a lot of aftermarket, and that aftermarket business is always a good business for us, the service provider, and we intend to be there with responsive service for the Postal Service as they need it at their VMF facilities around the country.
Awesome. Let's switch to your vocational segment, vocational trucks. I think if I remember correctly, you have two years of backlog for fire apparatus?
Closer to three.
Closer to three. Even better. If I were to, should we worry about a cliff event after this backlog is burned?
Mm-hmm
What is sort of the normalized demand that you see for that segment?
We don't see this as a cyclical market. You know, the only time we've seen cyclicality, I think, in this market was black swan events like the great global financial crisis or The Great Recession, whatever way we wanna term it. That was a real estate infused crisis where property tax values went down dramatically, and therefore municipalities stopped buying a lot of equipment, and that caused the market to have some have a downturn. Other than that, it's a pretty stable market. When you look forward into the market, you see that, there's a lot of aged vehicles on the road, and you also see municipalities, not every, but lots of municipalities wanna upgrade to the latest and greatest in their fleet. They want the latest technology in their fleet.
Every municipality wants their fire apparatus to be a showcase of their community. They always star in the Fourth of July parade. Not only they do critical work on a day-to-day basis, they always star in the Fourth of July parade. We see continued need for investment in fire apparatus for the foreseeable future. Right now we've got a three-year backlog. We have continued healthy orders coming in even with a three-year backlog. What we're doing is we're being very prudent. We are increasing capacity. These are very complicated products to build. They are more complicated than anything else we make. They're more complicated than building any automobile that we're all familiar with driving. The bill of materials is a mile long, and there's a lot of technology built into the vehicle at many different points of the vehicle.
When you say we're increasing capacity, which we are, and we increase capacity about 10% a year, you know, that's a lot of work to get another 10% of a very complicated vehicle off the end of the assembly line and ready to be delivered to municipality. We're gonna continue to do that, but we're not going to build capacity that's so big that we risk having unabsorbed capacity five years into the future. We see demand healthy in this end market for quite some time.
Let's turn to the audience if there's any questions in the room.
You actually hit on a point earlier with the USPS, and I think it pertains to almost all your lines of business. When you show up, you generally create a mixed fleet of aged equipment and new equipment. Is there an opportunity there for you for even managing around the aged equipment as you're creating a different level of value on asset management and utilization with the new equipment?
In the aftermarket are you referring to?
Well, in the aftermarket and just in the overall fleet management because that fleet probably isn't a smart fleet. Are there opportunities in there for you to upgrade it in some way to make it smarter through..
So...
...independent devices?
There's two answers to your question. In the aftermarket, in terms of how do we support the aftermarket for these products, we do kind of work with the firm that allows the Postal Service ease of use in terms of how they service, whether it's a 40-year-old LLV that they call the old vehicle or a brand-new NGDV, it's seamless for them in terms of how quickly can they get the parts and how do they get those parts to service the vehicles. That part of it we have done collaboration with to make it seamless for the customer. In terms of upgrading the old fleet, there's not much opportunity. We did look at it a while back. When you take a 40-year-old vehicle and say you're gonna upgrade the technology on it, there's not a lot of opportunity to go on there.
Yeah.
The Post Office has done some upgrade to those fleet. The Post Office has put connectivity in the old fleets. They, you know, they've done some work on their own to try to keep those vehicles current, and they've done a nice job at that.
On the first part of that, where you partnered with somebody, what role are you playing there, and are there other ways to play that role in other parts of the business for mixed fleets?
In most parts of our business, we tend to be the direct supplier to service centers for aftermarket support of our vehicles, and we have lots of distribution centers set up, and we've got lots of connectivity on our equipment in different end markets to make sure that it's real-time and rapid. Our desire with the United States Postal Service was to work with their current supply chain to make sure that it was seamless for the Postal Service, easy for the Postal Service, and no added cost to the Postal Service in terms of how they're able to support vehicles, and that's the structure we set up 'cause it was right for that specific end market.
Thank you.
Yeah.
As a reminder, those listening in to the webcast, you can also submit questions online. I received a question. This year's guidance is unique in the sense that your first quarter is starting off on a slower note.
Yeah.
I think 10% of EPS expected in the first quarter. What gives confidence in the robust ramp through the rest of the year?
When you look at our 2026 guidance, we've provided 2026 guidance of $11 billion in revenue, in January, in late January. We're still confident in that guidance as we look forward. When you look at Q1, it's more of a blip than an indication of the current run rate of the business. You'd say, "Well, why is it a blip, and why is it a little bit lower than we would normally like to see?" A couple of reasons for it. Two primary reasons are we had a big sell-in, particularly in our Access Equipment segment, because we announced tariff pricing in 2026. We had done a lot of work to mitigate tariffs. We talked earlier about a $200 million tariff impact in total.
We've done tariff engineering. We've done supply chain work. We've done all sorts of work to try to mitigate a lot of that $200 million. You know, before we say, okay, do we have to push some on in terms of price? When we made that announcement, lots of customers pulled in equipment into the fourth quarter because they wanted to make sure they were gonna get it at the current price and not the new price. That pulled in some of the volume from Q1 into Q4 based on what our customers wanted to do. We still have some price cost lingering in Q1 before we get to a full price level.
Those two phenomena are probably the biggest reasons that we're seeing a little bit lighter Q1 than we'll see normally in terms of our run rate, and it's why we're confident in our guidance for 2026.
We have a few more minutes. I do wanna touch on AI because I personally was blown away by some of the demonstrations you had at CONEXPO, the robotic welding, the refuse trucks with cameras. For those who didn't get to witness some of these new products, share some examples. How are you incorporating AI in your processes and products, and which do you think in the future will set you apart from your competition?
Yeah. You know, we're trying to move as fast as we can and as prudently as we can. When we look at the AI landscape, we look at it in our own operations, and then we look at it in terms of what can we provide for our customers to provide what they really want, which is typically productivity and ease of use. When we look at our own operations, we apply AI. We're moving towards digital twins of our manufacturing plants. We're getting them as connected as they possibly can be, where we can run different scenarios on how we can operate the most efficiently based upon what our SIOP processes are telling us is needed.
That really helps us to drive efficiency, productivity, and quality to a level that you couldn't conceive of just a couple of years ago. In the end markets that we serve, we're applying AI. If you look at the robotic welding that we showed at CONEXPO, there's AI built into that. Sometimes we use vision systems, sometimes we use other technologies when we have VLMs, you know, that instead of a large language model, it's a large video or pictorial model where the machine knows what it's seeing and puts the weld based on what it's seeing in the right place and can determine, as it's welding, whether or not the weld is good or bad. Therefore, a human doesn't have to do it. We also build AI into our products.
Another example would be on the tarmac of an airport. On the right-hand side of this chart there, you see a robot-looking device. That's the future wing walker, a future baggage handling cart on the tarmac of an airport. In the future, you will not see somebody driving a baggage handling cart, you will see a robot driving a baggage handling cart. You'll see a robot as the wing walker. You know, the guys that stand in front of the airplane guiding it into the gate. That's an area that our customers want to make autonomous. We're also using data in our end markets.
We're real-time triangulating hundreds of data points, for example, at the gate of an airport or at a construction site, which tell a gate agent, somebody on the ground or a project manager what the AI is learning about the data that it's seeing at a construction site, and therefore, what the project manager should do about something that may not be going to plan. Those are all. You know, we're continuing to roll it out. We're learning every day about it. Our customers are learning, and it's exciting, but there's a long way to go and a lot of productivity to be had with these technologies.
That is awesome. That's all the time we had today. Thanks, John and Pat. Hope to see you next year. It's always a pleasure to host you.
Thanks, Tami.