Outdoor equipment company Toro (NYSE: TTC) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 4.2% year on year to $1.04 billion. Its non-GAAP profit of $0.74 per share was 14.2% above analysts’ consensus estimates.
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The Toro Company (TTC) Q4 CY2025 Highlights:
- Revenue: $1.04 billion vs analyst estimates of $1 billion (4.2% year-on-year growth, 3.5% beat)
- Adjusted EPS: $0.74 vs analyst estimates of $0.65 (14.2% beat)
- Management raised its full-year Adjusted EPS guidance to $4.50 at the midpoint, a 1.7% increase
- Operating Margin: 8.4%, in line with the same quarter last year
- Free Cash Flow was $14.6 million, up from -$67.7 million in the same quarter last year
- Market Capitalization: $9.82 billion
Company Overview
Ceasing all production to support the war effort during World War II, Toro (NYSE: TTC) offers outdoor equipment for residential, commercial, and agricultural use.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, The Toro Company grew its sales at a tepid 5.5% compounded annual growth rate. This fell short of our benchmark for the industrials sector and is a poor baseline for our analysis.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. The Toro Company’s recent performance shows its demand has slowed as its annualized revenue growth of 1.6% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
We can better understand the company’s revenue dynamics by analyzing its most important segments, Professional
and Residential
, which are 79.5% and 19.9% of revenue. Over the last two years, The Toro Company’s Professional
revenue (sales to contractors) averaged 3% year-on-year growth. On the other hand, its Residential
revenue (sales to homeowners) averaged 11.8% declines. 
This quarter, The Toro Company reported modest year-on-year revenue growth of 4.2% but beat Wall Street’s estimates by 3.5%.
Looking ahead, sell-side analysts expect revenue to grow 3.3% over the next 12 months. Although this projection indicates its newer products and services will catalyze better top-line performance, it is still below average for the sector.
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Operating Margin
The Toro Company has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.8%. This result isn’t too surprising as its gross margin gives it a favorable starting point.
Looking at the trend in its profitability, The Toro Company’s operating margin decreased by 2.4 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
In Q4, The Toro Company generated an operating margin profit margin of 8.4%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
The Toro Company’s unimpressive 5.9% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
Although it wasn’t great, The Toro Company’s two-year annual EPS growth of 5.3% topped its 1.6% two-year revenue growth.
Diving into the nuances of The Toro Company’s earnings can give us a better understanding of its performance. A two-year view shows that The Toro Company has repurchased its stock, shrinking its share count by 6.1%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings. 
In Q4, The Toro Company reported adjusted EPS of $0.74, up from $0.65 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects The Toro Company’s full-year EPS of $4.31 to grow 5.7%.
Key Takeaways from The Toro Company’s Q4 Results
We were impressed by how significantly The Toro Company blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $101.60 immediately following the results.
The Toro Company had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
