Deere & Company (DE): What This Company Actually Does

How Deere makes money

Deere buys parts from suppliers and builds tractors, combines, and excavators at its own factories (about $2.3B/year in R&D), selling through an independent dealer network — roughly 2,050 dealers in the US and Canada, plus 100-plus countries worldwide. John Deere Financial then finances the purchase for the farmer or contractor, earning interest income. Even after the sale, the company keeps earning money from the same customer through parts, repairs, and — increasingly — precision-agriculture software subscriptions.

Four segments: PPA (large ag equipment), SAT (small/mid ag & turf), CF (construction/forestry), FS (financial services). Source: 10-K FY2025, p.2, p.7-9.

Where the revenue comes from

Source: 10-K FY2025, p.58 (Note 5), p.80-81 (Note 27).

Regionally: US 52.5% (down from 58.5% in FY2024 — a sign the US market fell harder than others), Western Europe 14.3%, Latin America 12.3%, Asia-Pacific/Middle East/Africa 9.3%, Canada 8.2%, Central Europe/CIS 3.4%.

Source: 10-K FY2025, p.58 (Note 5, geographic revenue).

Customers and competitors

Deere doesn't sell directly to end customers — sales run through independent dealers to large grain farms (PPA), dairy/livestock/landscaping operations (SAT), and construction/road-building companies (CF). No customer-concentration risk is disclosed, since the dealer network is broad.

• AGCO / CNH Industrial (Case IH, New Holland) — direct large-ag equipment rivals; Deere holds an edge in precision-ag software (Operations Center) and dealer network scale.
• Kubota — strong in small/mid tractors, especially in Asia and smaller farms, competing directly with Deere's SAT segment.
• Caterpillar / Komatsu — construction equipment rivals; Caterpillar leads globally, while Deere (via its Wirtgen acquisition) holds strength in road-building and forestry equipment.

Source: 10-K FY2025, p.6-9.

The metric that matters most in this sector

Deere is a highly cyclical business, so segment operating margins swing far more than revenue does. Order backlog shows what's already committed — a leading indicator for the next quarter or two.

Large-ag backlog (PPA) has fallen 59% in three years — a clear signal that the post-pandemic farm-equipment boom is over and demand has normalized. Construction backlog (CF) bottomed in FY2024 and rebounded in FY2025.

Source: 10-K FY2025, p.8; 10-K FY2023, p.9.

Leadership and ownership

CEO John C. May, 56, has led the company since 2019 and added the Chairman role in 2020 — an internal promotion (President and COO before becoming CEO). No descendants of founder John Deere (who started the company in 1837) remain involved in management. Directors and executives together own under 1% of shares (about 806,000 of 270 million shares); the largest holders are institutional — Bill Gates's Cascade Investment (8.74%), Vanguard (8.01%), and BlackRock (roughly 6-7%).

Source: 10-K FY2025, p.12; DEF 14A 2026, ownership sections.

Capital returns

Even as profit roughly halved in FY2025, Deere still raised its dividend — five consecutive years of increases. Buybacks, by contrast, were sharply reduced (from $7.2B in FY2023 to $1.1B in FY2025) to conserve cash; $7.9B remains available under an $18B buyback authorization from December 2022. Diluted average shares fell from 293.6M (FY2023) to 271.7M (FY2025) — a real reduction net of employee compensation issuance.

Source: 10-K FY2025, p.47, p.49, p.72-73.

How this company could fail

• Agricultural cyclicality — large equipment (PPA, 39% of revenue) is hit first and hardest when grain prices, farm income, and interest rates worsen. Management itself said "farmer sentiment remains constrained" in FY2025 results.
• Tariff and trade-policy risk — steel and other input tariffs, plus import/export regulation, directly affect costs and the roughly 47% of revenue coming from abroad. Policy shifts can be sudden and hard to predict.
• Right to Repair antitrust litigation — the FTC and multiple state governments are suing Deere over allegedly monopolizing repairs by routing them only through authorized dealers. A loss could threaten the parts-and-repair recurring-revenue model at the core of the business.

Source: 10-K FY2025, p.14 (agricultural cyclicality), p.3 (tariffs), p.14-15 (Right to Repair litigation), Item 3 Legal Proceedings.

Five-year financials

Source: 10-K FY2025, p.46, p.48-49, p.80-81; 10-K FY2023 (prior-year figures); 10-K FY2021.

What we still don't know

• Exactly how much 2025-2026 tariffs added to costs beyond the 10-K's disclosure requires recent earnings materials to fully confirm.
• The timing and outcome of the Right to Repair lawsuit (settlement vs. trial) isn't knowable from this data.
• Equipment-only net debt, excluding the financial services arm's loan book isn't separately disclosed in the 10-K.
• Exactly when large-ag equipment demand bottoms and recovers is unpredictable — management itself said only "customer sentiment remains constrained" on the Q2 FY2026 call (May 2026).