PCAR: FY25 Deep Dive
FY25 revenue $28.4B (-15.5%) — operating income $2.96B (-39%); net income $2.38B (-43%); diluted EPS $4.51 (vs $7.90 FY24). Cycle trough year for heavy-duty trucks. FCF $3.03B. Dividend $2.27B held. Total debt zero ($0, vs $15.9B FY24 — significant balance sheet shift). Citi $125→$130; Evercore $119→$143; Freedom Broker downgrade Buy→Hold March 26.
Key Takeaways
PACCAR closed fiscal 2025 (calendar year ended December 31, 2025) at $28.4 billion of revenue, down 15.5% YoY — the cyclical trough year for heavy-duty truck OEMs (Class 8 production cycle bottom). Operating income $2.96 billion (-39%); net income $2.38 billion (-43%); diluted EPS $4.51 (vs $7.90 FY24). Free cash flow $3.03 billion (+5%). Dividend $2.27 billion held. Total debt zero at end-FY25 (vs $15.9B FY24) — major balance sheet restructuring (debt classification or fully repaid through PACCAR Financial reset). Sell-side coverage Feb-April 2026: Citi $125 → $130 April 13 (Neutral); Evercore $119 → $143 (Outperform); Morgan Stanley $102 → $109 (EW); Freedom Broker downgraded Buy → Hold March 26 ($87 → $90).
Main business structure
PACCAR operates 3 segments:
| Segment | FY25 Approx |
|---|---|
| Trucks | ~80% (Kenworth, Peterbilt, DAF) |
| Parts | ~12% (aftermarket, the high-margin recurring) |
| Financial Services | ~8% (PACCAR Financial) |
Trucks: Class 8 (heavy-duty) trucks — Kenworth + Peterbilt (US/Canada) + DAF (Europe). FY25 was Class 8 production cycle trough (~250-260K vs ~340K peak FY23).
Parts: aftermarket parts — durable high-margin recurring revenue. ~30% gross margin segment.
Financial Services: financing for truck buyers. PACCAR Financial captive.
Key core metrics (3-year trend)
| FY23 | FY24 | FY25 | |
|---|---|---|---|
| Revenue ($B) | 35.13 | 33.66 | 28.44 |
| Operating income ($B) | 5.95 | 4.89 | 2.96 |
| Net income ($B) | 4.60 | 4.16 | 2.38 |
| Diluted EPS | $8.76 | $7.90 | $4.51 |
| FCF ($B) | 2.93 | 2.90 | 3.03 |
| Dividends ($B) | 1.52 | 2.29 | 2.27 |
The FY25 cycle trough mirrors the broader Class 8 production cycle. Recovery visibility into FY26 dependent on freight + EPA 2027 pre-buy + dealer order activity.
Market evaluation
Sell-side coverage (Feb-April 2026):
- Citigroup: $125 → $130 April 13 — Neutral maintained
- Evercore ISI: $119 → $143 Feb 23 — Outperform, +$24 (Street-high)
- Morgan Stanley: $102 → $109 Feb 3 — EW maintained
- Freedom Broker: Buy → Hold March 26 — lone downgrade
Buy-side positioning. PCAR is a core industrial / truck OEM holding paired with CMI, ALSN.
FY25 corporate structure: cycle trough + Parts + balance sheet reset
FY25 was the Class 8 cycle trough year for PACCAR: revenue -15.5%, EPS halved. The Parts segment + Financial Services held in better. Total debt reset to $0 is a structural balance sheet event. The Q1 FY26 earnings print this week is the proximate event for measuring continued cycle trajectory + EPA 2027 pre-buy commentary.