PACCAR INC
For the period ended Sep 30, 2025. Filed Oct 30, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 30, 2025
PCAR$101.98-2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0000950170-25-100887
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-30.
0001193125-25-258509
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 167 previous paragraphs and 168 current paragraphs.
47 unchanged; 111 reworded; 8 added; 6 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 23 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Third Quarter Financial Highlights:
Current report
Capital investments were $156.0 million in 2025 compared to $183.8 million in 2024.
Current report
First Nine Months Financial Highlights:
Current report
Capital investments were $549.0 million in 2025 compared to $567.7 million in 2024.
Current report
PACCAR is finalizing construction of a new $92 million, 46,000 square-foot chassis frame painting facility which will increase capacity with robotic paint capabilities in Chillicothe, Ohio, to be opened in early 2026. PACCAR is also finalizing construction of a new $35 million, 50,000 square-foot engine remanufacturing facility in Columbus, Mississippi, to be opened in 2026. PACCAR will open a new 180,000 square-foot Parts Distribution Center (PDC) in Calgary, Canada, in 2026, to expedite parts delivery to dealers and customers in the region. In the third quarter 2025, Kenworth launched the T880S high horsepower vocational truck for heavy-haul, logging, and other high horsepower applications, featuring a set-forward front axle configuration to optimize weight distribution and bridge law compliance.
Current report
The Company's truck and parts products have been negatively affected since March 2025 by import tariffs imposed by the U.S. government and actions taken by other countries. While the Company has taken mitigating actions to reduce the impact, the ongoing impact from import tariffs on truck order intake and profit margins remains unfavorable. The recently announced clarification of the Section 232 tariffs on medium- and heavy-duty trucks, which imposes a 25% tariff on imported trucks, is positive for the Company. The Company manufactures over 90% of its trucks for U.S. customers in its Ohio, Texas, and Washington State factories. As tariff policy, including the expected U.S. Supreme Court ruling on the International Emergency Economic Power Acts (IEEPA) tariffs, brings clarity to the market in the coming months, the impact could benefit the Company.
Current report
The currency translation effects reflect the changes in the value of foreign currencies relative to the U.S. dollar, primarily the Mexican peso and the euro.
Current report
The effective tax rate for the third quarter of 2025 was 20.7% compared to 22.6% for the third quarter of 2024, primarily reflecting higher U.S. Federal R&D tax credits. The effective tax rate for the first nine months of 2025 was 21.6% compared to 22.6% for the first nine months of 2024. Excluding the $350.0 million EC charge and its associated tax benefit, the adjusted year-to-date effective tax rate for 2025 was 21.9%.
Removed paragraphs (6)
Previous report
Second Quarter Financial Highlights:
Previous report
Capital investments were $221.1 million in 2025 compared to $219.6 million in 2024.
Previous report
First Six Months Financial Highlights:
Previous report
Capital investments were $393.0 million in 2025 compared to $383.9 million in 2024.
Previous report
The Company has been affected by the import tariffs imposed by the U.S. government since March 2025 and actions taken by other countries. The ongoing impact from import tariffs on truck order intake and profit margins is uncertain due to the rapidly evolving tariff environment. If tariff policy uncertainty continues, economic conditions may likely weaken and truck industry retail sales would likely decline.
Previous report
The effective tax rate for the second quarter of 2025 was 22.3% compared to 23.2% for the second quarter of 2024. The effective tax rate for the first six months of 2025 was 22.0% compared to 22.6% for the first six months of 2024. The lower effective tax rate in the second quarter of 2025 was primarily due to a lower mix of pre-tax income in jurisdictions with higher tax rates. Included in the first quarter of 2025 was the EC-related charge of $350.0 million, which lowered the effective tax rate. Excluding the EC charge and related tax benefits, the effective tax rate for the first six months of 2025 was 22.4%.
Reworded paragraphs (111)
Previous wording
Worldwide net sales and revenues were $7.51 billion in 2025 compared to $8.77 billion in 2024, primarily due to lower truck revenues, partially offset by higher parts and financial services revenues.
Current wording
Worldwide net sales and revenues were $6.67 billion in 2025 compared to $8.24 billion in 2024, primarily due to lower truck revenues, partially offset by higher parts and financial services revenues.
Previous wording
Truck sales were $10.47 billion in 2025, compared to $13.12 billion in 2024, due to lower truck deliveries in all major markets.
Current wording
Truck sales were $4.38 billion in 2025 compared to $6.03 billion in 2024, due to lower truck deliveries, primarily in the U.S. and Canada and Mexico.
Previous wording
Parts sales were $1.72 billion in 2025 compared to $1.66 billion in 2024, reflecting higher sales in the U.S. and Canada.
Current wording
Parts sales were $1.72 billion in 2025 compared to $1.66 billion in 2024, reflecting higher sales in the U.S. and Canada and Europe.
Previous wording
Financial Services revenues were $547.7 million in 2025 compared to $509.8 million in 2024, primarily due to higher interest income driven by portfolio growth and higher portfolio yields.
Current wording
Financial Services revenues were $565.3 million in 2025 compared to $536.1 million in 2024, primarily due to higher interest income driven by retail portfolio growth and higher portfolio yields.
Previous wording
Net income was $723.8 million ($1.37 per diluted share) in 2025 compared to $1.12 billion ($2.13 per diluted share) in 2024.
Current wording
Net income was $590.0 million ($1.12 per diluted share) in 2025 compared to $972.1 million ($1.85 per diluted share) in 2024.
Previous wording
Research and development (R&D) expenses were $112.9 million in 2025 compared to $117.1 million in 2024.
Current wording
Research and development (R&D) expenses were $111.0 million in 2025 compared to $115.0 million in 2024.
Previous wording
Worldwide net sales and revenues were $14.95 billion in 2025 compared to $17.52 billion in 2024, primarily due to lower truck revenues, partially offset by higher parts and financial services revenues.
Current wording
Worldwide net sales and revenues were $21.62 billion in 2025 compared to $25.76 billion in 2024, primarily due to lower truck revenues, partially offset by higher parts and financial services revenues.
Previous wording
Truck sales were $5.24 billion in 2025 compared to $6.58 billion in 2024, due to lower truck deliveries in all major markets.
Current wording
Truck sales were $14.85 billion in 2025, compared to $19.15 billion in 2024, due to lower truck deliveries in all major markets.
Previous wording
Parts sales were $3.41 billion in 2025 compared to $3.34 billion in 2024, reflecting higher sales in the U.S. and Canada.
Current wording
Parts sales were $5.14 billion in 2025 compared to $5.00 billion in 2024, reflecting higher sales in the U.S. and Canada.
Previous wording
Financial Services revenues were $1.08 billion in 2025 compared to $1.02 billion in 2024, primarily due to higher interest income driven by portfolio growth and higher portfolio yields.
Current wording
Financial Services revenues were $1.64 billion in 2025 compared to $1.56 billion in 2024, primarily due to higher interest income driven by retail portfolio growth and higher portfolio yields.
Previous wording
Net income was $1.23 billion ($2.33 per diluted share) in 2025 compared to $2.32 billion ($4.40 per diluted share) in 2024. In 2025, adjusted net income (non-GAAP), excluding a $264.5 million after-tax charge related to civil litigation in Europe was $1.49 billion ($2.83 per diluted share). See Reconciliation of GAAP to Non-GAAP Financial Measures on page 53.
Current wording
Net income was $1.82 billion ($3.45 per diluted share) in 2025 compared to $3.29 billion ($6.25 per diluted share) in 2024. In 2025, adjusted net income (non-GAAP), excluding a $264.5 million after-tax charge related to civil litigation in Europe was $2.08 billion ($3.95 per diluted share). See Reconciliation of GAAP to Non-GAAP Financial Measures on page 52.
Previous wording
Research and development (R&D) expenses were $228.3 million in 2025 compared to $222.6 million in 2024.
Current wording
Research and development (R&D) expenses were $339.3 million in 2025 compared to $337.6 million in 2024.
Previous wording
The PACCAR Financial Services (PFS) group of companies has operations covering four continents and 26 countries. The global breadth of PFS and its rigorous credit application process support a portfolio of loans and leases with total assets of $23.31 billion. PFS issued $1.84 billion in medium-term notes during the first six months of 2025 to support new business volume and market share growth and repay maturing debt.
Current wording
The PACCAR Financial Services (PFS) group of companies has operations covering four continents and 26 countries. The global breadth of PFS and its rigorous credit application process support a portfolio of loans and leases with total assets of $23.02 billion. PFS issued $2.37 billion in medium-term notes during the first nine months of 2025 to support new business volume and market share growth and repay maturing debt.
Previous wording
Truck industry heavy-duty retail sales in the U.S. and Canada in 2025 are expected to be 230,000 to 260,000 units compared to 268,100 in 2024. In Europe, 2025 truck industry registrations for over 16-tonne vehicles are expected to be 270,000 to 300,000 units compared to 316,100 in 2024. In South America, heavy-duty truck industry registrations in 2025 are projected to be 90,000 to 100,000 units compared to 119,000 in 2024.
Current wording
Truck industry heavy-duty retail sales in the U.S. and Canada in 2025 are expected to be 230,000 to 245,000 units compared to 268,100 in 2024. Estimates for the U.S. and Canada truck industry heavy-duty retail sales in 2026 are in the range of 230,000 to 270,000 units. In Europe, 2025 truck industry registrations for over 16-tonne vehicles are expected to be 275,000 to 295,000 units compared to 316,100 in 2024. The European truck registrations in the above 16-tonne truck market for 2026 are projected to be in a range of 270,000 to 300,000 units. In South America, heavy-duty truck industry registrations in 2025 are projected to be 95,000 to 105,000 units compared to 119,000 in 2024, and in a similar range for 2026.
Previous wording
In 2025, PACCAR Parts sales are expected to increase 2-4% compared to 2024, depending on the economic conditions, including the effect of ongoing tariff uncertainty.
Current wording
In 2025, PACCAR Parts sales are expected to increase 2-4% compared to 2024, depending on the economic conditions, including the effect of ongoing tariff uncertainty. In 2026, PACCAR Parts sales are expected to increase from 2025 levels, depending on the economic conditions.
Previous wording
In 2025, average earning assets are expected to increase 4-6% compared to 2024. The used truck market has been improving, which is reflected in PFS’ quarterly results this year. If freight transportation conditions decline due to a weaker economy, then past due accounts, truck repossessions and credit losses would likely increase from the current levels and new business volume would likely decline.
Current wording
In 2025, average earning assets are expected to increase 5-6% compared to 2024. The used truck market has been improving, which is reflected in PFS’ quarterly results this year. If freight transportation conditions decline due to a weaker economy, then past due accounts, truck repossessions and credit losses would likely increase from the current levels and new business volume would likely decline. In 2026, average earning assets are expected to be comparable to 2025 levels.
Previous wording
Capital investments in 2025 are expected to be $750 to $800 million and R&D is expected to be $450 to $480 million. PACCAR is investing in next generation clean diesel and alternative powertrains, integrated connected vehicle services, expanded manufacturing capabilities, and advanced driver assistance systems that create value for customers. In addition to the capital and R&D investments, the company plans to invest a total project amount of $600 to $900 million in its battery joint venture, Amplify Cell Technologies.
Current wording
Capital investments in 2025 are expected to be $750 to $775 million and R&D is expected to be $450 to $465 million. In 2026, capital investments are projected to be $725 to $775 million and R&D is expected to be $450 to $500 million. PACCAR is investing in next generation clean diesel and alternative powertrains, integrated connected vehicle services, expanded manufacturing capabilities, and advanced driver assistance systems that create value for customers. In addition to the capital and R&D investments, the company plans to invest a total project amount of $600 to $900 million in its battery joint venture, Amplify Cell Technologies.
Previous wording
The Company’s results of operations for the three and six months ended June 30, 2025 and 2024 are presented below.
Current wording
The Company’s results of operations for the three and nine months ended September 30, 2025 and 2024 are presented below.
Previous wording
The Company’s Truck segment accounted for 70% of revenues in both the second quarter and first six months of 2025, compared to 75% in both the second quarter and first six months of 2024.
Current wording
The Company’s Truck segment accounted for 66% of revenues in the third quarter and 68% for the first nine months of 2025, compared to 73% in the third quarter and 74% for the first nine months of 2024.
Previous wording
Worldwide new truck deliveries decreased in the second quarter and first six months of 2025 compared to the same periods of 2024, reflecting lower deliveries in all major markets from lower retail demand.
Current wording
Worldwide new truck deliveries decreased in the third quarter compared to the same period of 2024, reflecting lower deliveries in the U.S. and Canada and Brasil, partially offset by higher deliveries in Europe. New truck deliveries also decreased for the first nine months of 2025 compared to the same period of 2024, reflecting lower retail demand in all major markets.
Previous wording
In the first six months of 2025, industry retail sales in the heavy-duty market in the U.S. and Canada were 120,800 units compared to 127,600 units in the same period of 2024. The Company’s heavy-duty truck retail market share was 30.4% in the first six months of 2025 compared to 31.5% in the first six months of 2024. The medium-duty market was 49,600 units in the first six months of 2025 compared to 52,300 units in the same period of 2024. The Company’s medium-duty market share was 15.3% in the first six months of 2025 compared to 17.3% in the first six months of 2024.
Current wording
In the first nine months of 2025, industry retail sales in the heavy-duty market in the U.S. and Canada were 180,300 units compared to 198,600 units in the same period of 2024. The Company’s heavy-duty truck retail market share was 30.3% in the first nine months of 2025 compared to 31.1% in the first nine months of 2024. The medium-duty market was 70,200 units in the first nine months of 2025 compared to 80,800 units in the same period of 2024. The Company’s medium-duty market share was 15.7% in the first nine months of 2025 compared to 17.2% in the first nine months of 2024.
Previous wording
The over 16‑tonne truck market in Europe in the first six months of 2025 was 151,100 units compared to 174,800 units in the first six months of 2024. DAF over 16‑tonne market share was 14.2% in the first six months of 2025 compared to 13.7% in the same period of 2024. The 6 to 16‑tonne market in the first six months of 2025 was 19,900 units compared to 27,700 units in the same period of 2024. DAF market share in the 6 to 16-tonne market in the first six months of 2025 was 9.9% compared to 8.4% in the same period of 2024.
Current wording
The over 16‑tonne truck market in Europe in the first nine months of 2025 was 218,300 units compared to 239,800 units in the first nine months of 2024. DAF over 16‑tonne market share was 13.6% in the first nine months of 2025 compared to 14.0% in the same period of 2024. The 6 to 16‑tonne market in the first nine months of 2025 was 29,700 units compared to 38,900 units in the same period of 2024. DAF market share in the 6 to 16-tonne market in the first nine months of 2025 was 9.7% compared to 9.1% in the same period of 2024.
Previous wording
The over 16-tonne truck market in Brasil in the first six months of 2025 was 41,700 units compared to 44,600 units in the same period of 2024. DAF Brasil market share for the first six months of 2025 was 9.4% compared to 10.3% in the same period in 2024.
Current wording
The over 16-tonne truck market in Brasil in the first nine months of 2025 was 63,900 units compared to 71,500 units in the same period of 2024. DAF Brasil market share for the first nine months of 2025 was 9.1% compared to 10.0% in the same period in 2024.
Previous wording
The Company’s worldwide truck net sales and revenues in the second quarter decreased to $5.24 billion in 2025 from $6.58 billion in 2024. Revenues for the first six months decreased to $10.47 billion in 2025 from $13.12 billion in 2024. The decrease in both periods was primarily due to lower truck unit deliveries in all major markets from lower retail demand reflecting economic conditions as well as higher tariff costs resulting from current trade policies primarily in the U.S.
Current wording
The Company’s worldwide truck net sales and revenues in the third quarter decreased to $4.38 billion in 2025 from $6.03 billion in 2024. Revenues for the first nine months decreased to $14.85 billion in 2025 from $19.15 billion in 2024. The decrease in both periods was primarily due to lower truck unit deliveries in most major markets from lower retail demand, reflecting economic conditions as well as higher tariff costs resulting from current trade policies primarily in the U.S.
Previous wording
In the second quarter and first six months of 2025, Truck segment income before taxes and pre-tax return on revenues decreased primarily due to lower truck unit deliveries and lower price realization.
Current wording
In the third quarter and first nine months of 2025, Truck segment income before taxes and pre-tax return on revenues decreased primarily due to lower truck unit deliveries and progressively lower price realization.
Previous wording
Truck sales volume decreased revenues by $2.37 billion and costs by $1.97 billion, primarily reflecting lower truck deliveries in all major markets.
Current wording
Truck sales volume decreased revenues by $1.64 billion and costs by $1.39 billion, primarily reflecting lower truck deliveries in the U.S. and Canada and Mexico, partially offset by higher deliveries in Europe.
Previous wording
Average truck sales prices decreased $153.8 million, primarily due to lower price realization, reflecting an increased competitive environment in all markets, partially offset by tariff price increases in the U.S.
Current wording
Average truck sales prices decreased $78.3 million, primarily due to lower price realization, reflecting an increased competitive environment in all markets, partially offset by tariff price increases in the U.S.
Previous wording
Average truck costs increased $216.6 million, primarily reflecting higher mix of trucks with higher content, product support accruals and higher tariff costs in the U.S.
Current wording
Average truck costs increased $243.4 million, primarily reflecting higher tariff costs in the U.S. and higher regulatory and other truck content, partially offset by a higher mix of fleet trucks and lower product support cost.
Previous wording
Factory overhead and other indirect costs decreased $99.6 million, primarily due to lower labor costs, maintenance costs and factory supplies from lower truck build rates.
Current wording
Factory overhead and other indirect costs decreased $58.1 million, primarily due to lower labor costs, repair and maintenance costs and factory supplies from lower truck build rates.
Previous wording
Extended warranties, operating leases and other increased revenues by $24.9 million, primarily due to higher volume of extended warranty and R&M contracts. The increase in extended warranty, operating leases and other cost of $49.1 million reflects higher used truck costs, primarily in Europe, and higher costs from extended warranty and R&M contracts.
Current wording
Extended warranties, operating leases and other increased revenues by $8.2 million, primarily due to higher volume of extended warranty and R&M contracts. The increase in extended warranty, operating leases and other costs of $24.1 million reflects higher costs from extended warranty and R&M contracts and higher used truck costs.
Previous wording
The currency translation effect on sales and cost of sales primarily reflects an increase in the value of the euro relative to the U.S. dollar, partially offset by the decline in the value of the Brazilian real, Australian dollar and Canadian dollar relative to the U.S. dollar.
Current wording
The currency translation effect on sales and cost of sales primarily reflects an increase in the value of the euro and the Brazilian real relative to the U.S. dollar, partially offset by the decline in the value of the Australian dollar and Canadian dollar relative to the U.S. dollar.
Previous wording
Truck gross margin was 8.7% in the second quarter of 2025 compared to 15.0% in the same period of 2024 due to the factors noted above.
Current wording
Truck gross margin was 5.8% in the third quarter of 2025 compared to 13.0% in the same period of 2024 due to the factors noted above.
Previous wording
The major factors for the Truck segment changes in net sales and revenues, cost of sales and revenues and gross margin between the six months ended June 30, 2025 and 2024 are as follows:
Current wording
The major factors for the Truck segment changes in net sales and revenues, cost of sales and revenues and gross margin between the nine months ended September 30, 2025 and 2024 are as follows:
Previous wording
Truck sales volume decreased revenues by $1.25 billion and costs by $1.06 billion, primarily reflecting lower truck deliveries in all major markets.
Current wording
Truck sales volume decreased revenues by $4.01 billion and costs by $3.37 billion, primarily reflecting lower truck deliveries in all major markets.
Previous wording
Average truck sales prices decreased by $268.5 million, primarily due to lower price realization in the U.S. and Canada and Europe, reflecting an increased competitive environment in all markets.
Current wording
Average truck sales prices decreased by $346.8 million, primarily due to lower price realization in the U.S. and Canada and Europe, reflecting an increased competitive environment, partially offset by tariff price increases in the U.S.
Previous wording
Average truck costs increased by $438.4 million, primarily reflecting higher mix of trucks with higher content, increased tariff costs and product support accruals.
Current wording
Average truck costs increased by $681.8 million, primarily reflecting higher regulatory and other truck content, increased tariff costs and product support accruals.
Previous wording
Factory overhead and other indirect costs decreased $55.3 million, primarily due to lower labor costs, maintenance costs and factory supplies from lower truck build rates.
Current wording
Factory overhead and other indirect costs decreased by $157.7 million, primarily due to lower labor costs, maintenance costs and factory supplies from lower truck build rates.
Previous wording
Extended warranties, operating leases and other increased revenues by $35.4 million due to higher volume of extended warranty and R&M contracts and higher dealer support services. The increase in extended warranty, operating leases and other cost of $53.4 million reflects higher used truck costs, primarily in Europe, higher dealer support services and higher volume of extended warranty contracts.
Current wording
Extended warranties, operating leases and other increased revenues by $43.6 million due to higher volume of extended warranty and R&M contracts and higher dealer support services. The increase in extended warranty, operating leases and other cost of $77.5 million reflects higher volume of extended warranty contracts, higher used truck costs, primarily in Europe, and higher volume of R&M contracts.
Previous wording
The currency translation effect on sales and cost of sales primarily reflects a decline in the value of the Brazilian real, Canadian dollar and the Australian dollar relative to the U.S. dollar, partially offset by the increase in value of the euro relative to the U.S. dollar.
Current wording
The currency translation effect on sales and cost of sales primarily reflects an increase in the value of the euro relative to the U.S. dollar, partially offset by the decrease in value of the Brazilian real, Canadian dollar and the Australian dollar relative to the U.S. dollar.
Previous wording
Truck gross margin was 9.2% in the first six months of 2025 compared to 15.3% in the same period of 2024 due to the factors noted above.
Current wording
Truck gross margin was 8.2% in the first nine months of 2025 compared to 14.6% in the same period of 2024 due to the factors noted above.
Showing the first 40 of 111 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The currency translation effect on sales and cost of sales primarily reflects an increase in the value of the euro relative to the U.S. dollar.
Current report — wording carried from elsewhere
The currency translation effects reflect an increase in the value of foreign currencies relative to the U.S. dollar, primarily the euro, the Mexican peso and Brazilian real.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
The currency translation effect on sales and cost of sales reflects an increase in the value of the euro relative to the U.S. dollar.
Previous report — wording carried elsewhere
The currency translation effects reflect a decrease in the value of foreign currencies relative to the U.S. dollar, primarily the Mexican peso and Brazilian real.
Previous report — wording carried elsewhere
The currency translation effects reflect a decrease in the value of foreign currencies relative to the U.S. dollar, primarily the Mexican peso.