Cummins Inc.

The Distribution segment ($12.4 billion in FY2025) anchors a more recurring aftermarket base, and Power Systems carries visible data center backlog extending through 2028. The portfolio falls well short of the 70%-or-more recurring revenue level, as the Engine segment's OEM build schedules introduced a meaningful down-cycle contraction in FY2025 North American revenues.

Cummins reports five segments with no single unit exceeding 40% of FY2025 revenue, but Distribution ($12.4 billion), Engine ($10.9 billion), and Power Systems ($7.5 billion) all depend on the health of power generation and commercial transportation markets that correlate across the economic cycle. The apparent breadth does not represent genuinely uncorrelated end-market exposure.

The United States accounted for approximately 57% of FY2024 consolidated revenue, and North America as a whole comprises the substantial majority of total sales. International operations span more than 190 countries but do not generate sufficient revenue concentration in any single non-U.S. region to materially reduce home-market dependence.

Engine manufacturing requires proportional capital investment and direct labor as volume grows, limiting structural operating leverage. Distribution and Power Systems carry better unit economics through service density, but EBITDA margins targeting 17%-18% in FY2026 are in line with capital-intensive industrial peers rather than reflecting meaningful incremental margin expansion on added volume.

Distribution aftermarket contracts and Power Systems data center agreements represent mission-critical, repeat-purchase revenue, providing a quality floor above pure OEM transactional supply. The Engine segment's supply to truck manufacturers is cyclical and negotiated under long-term agreements that constrain margin autonomy, balancing the more defensible aftermarket base.