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Caterpillar

Profitable growth to 2030, November 2025 to 2030

Our measure of success is to grow absolute OPACC dollars
Andrew Bonfield, chief financial officer, at Investor Day 2025

Profitable growth to 2030

At its Investor Day in November 2025 Caterpillar set a target of 5 to 7% sales growth a year to 2030, raised its margin and free cash flow ranges, and doubled its planned capital spending to make more engines and turbines for power generation. It measures success by the growth of its operating profit after capital charge (OPACC) in dollars.

Power & Energy

Demand is growing fastest for the engines and turbines that power data centers.

Sales, Q2 2026
On a year earlier
Segment margin

The yellow mark is the margin a year earlier, 22.1%.

Walk-around, key 1
  1. Power GenerationMore than double Power Generation sales by 2030.
  2. Large enginesDouble large engine capacity, in a capacity program already announced.
  3. Gas turbinesIncrease natural gas turbine capacity to 2.5 times the 2024 level, in the Solar turbines business.

Power & Energy sales of $8.2 billion in the second quarter of 2026, up 17%, and segment profit margin of 24.6%, from 22.1%.

Power Generation sales of $3.1 billion, up 29%, mainly large reciprocating engines and turbines in data center applications.

The largest increase in backlog in the second quarter was in Power & Energy.

The backlog has more than doubled since 2024

Caterpillar’s firm order backlog was $30.0 billion at the end of 2024 and $72.1 billion at the end of June 2026. It grew in all three of its main segments. In the second quarter of 2026, sales and revenues passed $20 billion for the first time.,,

3.5

quarters of sales at the second quarter’s rate of $20.5 billion, worked out.

$9.4bn

added to the backlog in the second quarter alone, with the largest increase in Power & Energy.

$29.2bn

of it not expected to be filled in the following twelve months.

Each block is $5 billion. The pale part is backlog not expected to be filled within twelve months, which Caterpillar gives for December 2025 ($19.3 billion) and June 2026. March 2026 is worked out from June being about $9.4 billion higher.,

Caterpillar raised its margin targets in 2025

In 2017 Caterpillar set a target adjusted operating profit margin of 10% at $42 billion of sales, rising to 22% at $72 billion. In 2025 it changed this to 15% at $60 billion, rising to 25% at $100 billion. The margin on each extra dollar of sales is about the same as before, because Caterpillar is investing ahead of growth.,

10%15%20%25%30%$40bn$60bn$80bn$100bnSales and revenuesAdjusted operating profit margin10% at $42bn22% at $72bnRange set in 201715% at $60bn25% at $100bnRange set in 20252024: 20.7% on $64.8bn2025: 17.2% on $67.6bn

Caterpillar gives only the two ends of each range, so the line between them is an estimate. Adjusted operating profit margin fell from 20.7% in 2024 to 17.2% in 2025. Tariffs cost about $1.8 billion in 2025, worked out from Caterpillar’s expectation of about $2.6 billion in 2026, which it says is $800 million more.,

Power Generation sales to more than double by 2030

Caterpillar is doubling its capacity for large engines and raising its gas turbine capacity to 2.5 times the 2024 level. Its capital spending from 2025 to 2030 will be twice what it spent from 2019 to 2024.,

2×

Large engines

Double, in a capacity program announced earlier

2.5×

Gas turbines, Solar Turbines

2.5 times the 2024 level, announced on 4 November 2025

Power & Energy sales by application, second quarter

Power Generation

$2.41bn to $3.10bn+29%

Oil and Gas

$1.87bn to $2.04bn+9%

Industrial

$1.52bn to $1.65bn+9%

External sales in the second quarter of 2025, the open dot, and of 2026, the black dot.

$30 billion of services revenues by 2030

Services revenues are mostly parts and support for machines already in use. They grew by about 70% from 2016 to $24 billion in 2024. Caterpillar expects the extra machines it sells now to bring more services revenues after 2030.

  1. Name the one measure that decides.

    Caterpillar says that its goal is absolute operating profit after capital charge, not margin, and that if it grows OPACC faster and goes above the margin ranges, that is not a problem. Its CFO says the margin targets “are there just to give you a guide”. We recommend naming the one measure that decides whether the plan worked, and treating other targets as guides to it.

  2. Move the range, and say how.

    Caterpillar moved its margin ranges from 10 to 22% at sales of $42 to 72 billion to 15 to 25% at $60 to 100 billion, and said the pull-through is about the same as before because it is investing in capacity, commercial solutions, and technology. We recommend explaining every change to a target with the reason it is different, and keeping the explanation next to the number.

  3. Set the floor of the range for the bad year.

    The $6 billion low end of its new free cash flow range reflects a challenged economy, and it is there because the dividend, 60 to 65% of free cash flow at most, must be safe even then. We recommend deciding what the bad case has to fund, and setting the bottom of the range by that.

Sources

  1. 1. Caterpillar Inc. (2025). Investor Day 2025, transcript. Caterpillar investor relations, 4 November 2025. investors.caterpillar.com
  2. 2. Caterpillar Inc. (2026). Caterpillar reports second-quarter 2026 results. News release, Form 8-K exhibit 99.1, 4 August 2026. sec.gov
  3. 3. Caterpillar Inc. (2026). Quarterly report on Form 10-Q for the quarter ended 30 June 2026. U.S. Securities and Exchange Commission, 5 August 2026. sec.gov
  4. 4. Caterpillar Inc. (2026). Annual report on Form 10-K for the year ended 31 December 2025. U.S. Securities and Exchange Commission, 13 February 2026. sec.gov

Headwater is not connected with Caterpillar Inc. Caterpillar, Cat, and Solar Turbines are trade marks of their owners. Updated 28 September 2026.

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