Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Caterpillar Inc., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2025	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Sales of Machinery, Power & Energy	63,980)	61,363)	63,869)	56,574)	48,188)
Cost of goods sold	(44,752)	(40,199)	(42,767)	(41,350)	(35,513)
Gross margin	19,228)	21,164)	21,102)	15,224)	12,675)
Revenues of Financial Products	3,609)	3,446)	3,191)	2,853)	2,783)
Selling, general and administrative expenses	(6,985)	(6,667)	(6,371)	(5,651)	(5,365)
Research and development expenses	(2,148)	(2,107)	(2,108)	(1,814)	(1,686)
Interest expense of Financial Products	(1,359)	(1,286)	(1,030)	(565)	(455)
Goodwill impairment charge	—)	—)	—)	(925)	—)
Other operating income (expenses)	(1,194)	(1,478)	(1,818)	(1,218)	(1,074)
Operating profit	11,151)	13,072)	12,966)	7,904)	6,878)
Interest expense excluding Financial Products	(502)	(512)	(511)	(443)	(488)
Investment and interest income	416)	482)	494)	167)	80)
Foreign exchange gains (losses)	(168)	71)	(96)	104)	110)
License fee income	143)	142)	146)	142)	123)
Gains (losses) on securities	30)	39)	11)	(56)	134)
Net periodic pension and OPEB income, excluding service cost	343)	165)	47)	868)	1,279)
Miscellaneous income (loss)	128)	(86)	(7)	66)	88)
Other income (expense)	892)	813)	595)	1,291)	1,814)
Consolidated profit before taxes	11,541)	13,373)	13,050)	8,752)	8,204)
Provision for income taxes	(2,768)	(2,629)	(2,781)	(2,067)	(1,742)
Profit of consolidated companies	8,773)	10,744)	10,269)	6,685)	6,462)
Equity in profit of unconsolidated affiliated companies	109)	44)	63)	19)	31)
Profit of consolidated and affiliated companies	8,882)	10,788)	10,332)	6,704)	6,493)
(Profit) loss attributable to noncontrolling interests	2)	4)	3)	1)	(4)
Profit attributable to common stockholders	8,884)	10,792)	10,335)	6,705)	6,489)

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

The financial performance over the five-year period demonstrates a generally positive trajectory, although recent years show signs of stabilization and, in some areas, decline. Sales of Machinery, Power & Energy experienced substantial growth from 2021 to 2023, peaking at US$63,869 million, before experiencing a slight decrease in 2024 and a modest recovery in 2025. Cost of goods sold increased consistently throughout the period, culminating in US$44,752 million in 2025, contributing to fluctuations in gross margin.

Gross margin exhibited significant improvement between 2021 and 2023, rising from US$12,675 million to US$21,102 million, but then plateaued and decreased slightly to US$19,228 million in 2025. Revenues from Financial Products showed consistent, albeit moderate, growth over the period, increasing from US$2,783 million to US$3,609 million. Operating profit mirrored the trend in gross margin, with substantial gains through 2023 followed by a decline in 2025.

Profitability Analysis: Consolidated profit before taxes increased significantly from US$8,204 million in 2021 to US$13,050 million in 2023, indicating improved operational efficiency and revenue generation. However, this trend reversed in 2024 and 2025, with profit before taxes decreasing to US$11,541 million. The provision for income taxes followed a similar pattern, increasing with profits and then decreasing as profits declined. Profit attributable to common stockholders demonstrated a comparable pattern, peaking at US$10,335 million in 2023 and falling to US$8,884 million in 2025.
Expense Management: Selling, general and administrative expenses increased steadily throughout the period, from US$5,365 million to US$6,985 million, suggesting increased investment in sales and marketing activities. Research and development expenses also rose consistently, reaching US$2,148 million in 2025, indicating a continued commitment to innovation. Interest expense related to Financial Products experienced a substantial increase, more than doubling from US$455 million in 2021 to US$1,359 million in 2025, potentially reflecting increased borrowing or higher interest rates. Other operating expenses also increased, though with some fluctuation.
Other Income and Financial Items: Other income exhibited variability, with a peak in 2021 at US$1,814 million and a subsequent decline to US$892 million in 2025. Components of other income, such as investment and interest income, license fee income, and gains (losses) on securities, showed individual fluctuations. Net periodic pension and OPEB income decreased significantly from US$1,279 million in 2021 to US$343 million in 2025, potentially impacting overall profitability. Foreign exchange gains (losses) were volatile, shifting from gains to losses in 2025.

In summary, the period began with strong growth in revenue and profitability, driven by increased sales and improved gross margins. However, the latter years demonstrate a stabilization and, in some instances, a decline in these metrics, potentially attributable to rising expenses, increased interest costs, and fluctuations in other income components. The company experienced a peak in performance in 2023, followed by a moderation in 2024 and 2025.

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Caterpillar Inc. (NYSE:CAT)

Income Statement