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How Caterpillar and Komatsu make money
Both companies design and sell capital-intensive equipment used in construction, mining and other industrial settings. Their business models extend beyond the initial sale: parts, maintenance and other services can generate revenue over the equipment lifecycle, while financing helps customers fund purchases. Those revenue streams can support earnings when new-equipment demand softens, but they do not remove cyclical risk.
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Caterpillar: machinery, power and services
Caterpillar Inc. reports Construction Industries, Resource Industries, Power & Energy and Financial Products. Its products include construction and mining equipment, off-highway diesel and natural-gas engines, industrial gas turbines and diesel-electric locomotives. An extensive independent dealer network connects the company with customers, while Cat Financial provides financing and leases to customers and dealers. Caterpillar’s 2025 Form 10-K describes the business and its reporting structure; rail moved into Resource Industries on January 1, 2026.
Aftermarket parts and service are a material part of Caterpillar’s lifecycle proposition. The company reported $24 billion in 2025 machinery, power and energy services revenue. Caterpillar’s definition includes aftermarket parts and other service-related revenue, but excludes most Financial Products revenue, discontinued products and captive dealer services. It is not a standalone recurring-revenue guarantee, nor is it a directly comparable figure to Komatsu’s disclosures.
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Caterpillar also offers Customer Value Agreements, condition monitoring, digital tools, rentals and repairs. Its 2025 annual-report highlights cited more than 1.6 million connected and reporting assets and described expansion of autonomous hauling. These capabilities can deepen customer relationships and support service activity, but the asset count does not by itself establish future revenue or profitability.
Power & Energy gives Caterpillar exposure beyond construction and mining equipment. In its 2025 highlights, the company described investment in large-engine capacity and gas-turbine production, announced the G3500K natural-gas generator-set series, and noted agreements with Hunt Energy Company and Vertiv for integrated on-site power solutions. These are strategic investments and commercial opportunities, not assurance that demand or returns will meet expectations.
Komatsu: equipment, retail finance and industrial businesses
Komatsu Ltd. reports three segments: construction, mining and utility equipment; retail finance; and industrial machinery and others. The first overlaps most directly with Caterpillar, while the broader industrial segment means Komatsu’s consolidated sales are not a pure measure of construction-equipment activity. Komatsu’s investor materials describe industrial activity that includes large presses and semiconductor-related excimer-laser maintenance.
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Komatsu earns additional income from retail finance and from mining aftermarket parts and services. Those businesses broaden its earnings sources beyond new equipment. They should not be treated as identical to Caterpillar’s dealer, service or Financial Products arrangements: the companies report different structures and measures.
What the latest reported financials do—and do not—show
The latest periods in the cited company materials are not aligned. Caterpillar’s 2025 fiscal year ended December 31, 2025; Komatsu’s FY2025 ran from April 1, 2025 through March 31, 2026. The figures below are in each company’s reporting currency and use the companies’ reported labels.
| Measure | Caterpillar | Komatsu |
|---|---|---|
| Period | Year ended December 31, 2025 (Caterpillar Inc., 2025 Form 10-K) | FY2025, ended March 31, 2026 (Komatsu Ltd., results announced April 28, 2026) |
| Consolidated sales measure | $67.589 billion in sales and revenues (Caterpillar Inc., 2025 Form 10-K) | JPY 4,132.8 billion in net sales, up 0.7% year over year (Komatsu Ltd., FY2025 results) |
| Operating income and margin | Not stated in the cited Caterpillar figures here (Caterpillar Inc., 2025 Form 10-K) | JPY 567.3 billion; 13.7% operating-income ratio. Income fell 13.7% and the ratio declined 2.3 percentage points year over year (Komatsu Ltd., FY2025 results) |
| Services-related figure | $24 billion in 2025 machinery, power and energy services revenue, under Caterpillar’s stated definition | A directly comparable consolidated services figure is not stated in the cited Komatsu materials here (Komatsu Ltd., FY2025 results and CFO message) |
Do not rank company scale or operating performance by putting the two sales totals side by side as if they measured the same business. The amounts are in different currencies, the reporting periods are offset by three months, the labels and segment perimeters differ, and Komatsu’s consolidated total includes industrial businesses beyond the closest Caterpillar overlap. No exchange-rate conversion is made here.
Komatsu’s FY2025 results illustrate why sales growth alone does not describe performance: net sales rose 0.7%, while operating income declined 13.7%. The company attributed the profit pressure primarily to higher costs and lower sales volume. Retail finance and industrial machinery and others posted profit growth even as construction, mining and utility equipment faced pressure, according to Komatsu’s results and CFO message.
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Risks that matter to both businesses
Investors should assess the risks by segment and geography rather than treating both companies as simple construction-equipment makers. Their common exposure to capital-intensive machinery makes customer activity, utilization and spending decisions important to monitor. A downturn can delay new purchases or replacements; lower volume can leave fixed costs spread over fewer units.
- End-market cycles: Construction, mining, infrastructure and industrial activity affect demand, but company exposure depends on customer and regional mix.
- Costs and pricing: Input-cost increases can pressure margins if pricing, productivity or product mix do not offset them. Komatsu identified cost increases as a major cause of its FY2025 operating-income decline.
- Financing and credit: Retail finance and equipment financing can support sales and produce interest income, while also making funding conditions and customer credit quality relevant. Assess each company’s formal disclosures for its specific exposures.
- Trade, foreign exchange and geography: Trade barriers, tariffs and currency movements can affect costs, sales and reported results differently across regions. Review the companies’ filings and stated outlooks for company-specific exposure rather than assuming the effect is equal.
- Investment execution: Capacity expansion and technology initiatives can position a company for demand, but also require capital and do not guarantee utilization or returns.
Caterpillar’s 2025 Form 10-K discusses its competitive environment and names Komatsu among competing equipment makers. Its risk profile should not be reduced to construction cycles: Power & Energy is also a strategic area, with its own demand and investment considerations.
What Komatsu’s FY2026 outlook says
Komatsu’s FY2026 is the year ending March 31, 2027. In its April 28, 2026 results release, the company projected lower consolidated sales and profits. That is Komatsu’s outlook, not an independent forecast. It cited reduced demand in some regions affected by the Middle East situation, lower demand for mining equipment, rising costs including U.S. tariff effects, and higher fixed costs as relevant factors.
The company also projected that segment results could diverge: retail-finance revenue may increase while segment profit declines because of costs; industrial-machinery sales may rise while profit falls because of product mix and costs. The distinction matters because a consolidated forecast can conceal different conditions across businesses.
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Operating results are not stock returns. Caterpillar’s common-stock ticker is CAT, and the stock trades on the NYSE in U.S. dollars. The materials cited here do not establish a current share price, valuation multiple, dividend yield or aligned total-return comparison, and they do not identify a specific Komatsu listing and trading-currency price series for a stock-performance comparison. Those market data can change daily; do not infer a valuation or investment winner from the operating figures above.
A useful comparison should use the same measurement date and disclose the listing, currency and methodology for each market figure. For cross-border returns, specify whether performance is in local currency or converted to the investor’s base currency; exchange-rate movements can change the result.
| Question | What to compare |
|---|---|
| Are the businesses improving? | Sales, operating profit, segment margins, cash generation and returns on capital, with fiscal periods and accounting definitions stated. |
| What is the stock priced for? | A specified valuation measure, such as price-to-earnings or an enterprise-value-based ratio, calculated consistently on the same date. |
| What have shareholders received? | Dividends and buybacks alongside price-only or dividend-reinvested total returns over a defined interval. |
| What could change the outlook? | Equipment demand, customer and geographic mix, financing, input costs, foreign exchange, trade measures and each company’s current guidance. |
A company can report strong operations while its shares underperform if expectations or valuation are high; a share-price gain does not prove the underlying business is more resilient. Choosing between CAT and Komatsu therefore requires current market data and an investor-specific view of risk, time horizon and currency exposure, none of which can be settled by these operating figures alone.
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