Agricultural and farm machinery company Lindsay (NYSE: LNN) reported Q3 CY2025 results beating Wall Street’s revenue expectations, but sales were flat year on year at $153.6 million. Its non-GAAP profit of $0.99 per share was 10% below analysts’ consensus estimates.

Is now the time to buy LNN? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Lindsay’s third quarter saw a flat year-on-year revenue performance, coming in slightly above analyst expectations, but the market reacted negatively as non-GAAP profit missed consensus by 10%. Management attributed the quarter’s mixed performance to diverging trends across its irrigation and infrastructure segments. Strength in international irrigation, particularly in South America and the Middle East, was offset by ongoing weakness in North America, where low commodity prices and reduced storm damage demand suppressed sales. CEO Randy Wood acknowledged, “Pivot analytics data indicates irrigated hours across the core Midwest markets of Nebraska, Oklahoma and Texas were down over 20% versus prior year,” highlighting the challenging backdrop for domestic sales.

Looking ahead, Lindsay’s forward guidance is shaped by persistent headwinds in North American irrigation, where management anticipates subdued demand will continue until commodity prices and farm incomes recover. Despite these challenges, the company sees stability in Brazil and expects ongoing project activity in the Middle East and North Africa to underpin international growth. Wood emphasized, “We are pleased at the momentum we have and expect to realize additional project volume during fiscal 2026,” while cautioning that high interest rates and credit constraints remain a risk in certain markets. New product introductions, such as the TowerWatch platform, and continued expansion of recurring subscription revenue are expected to support margins and future growth.

Key Insights from Management’s Remarks

Management identified uneven demand between domestic and international markets, along with subdued North American irrigation sales and shifting project timing, as key factors shaping the quarter.

• International irrigation expansion: Lindsay’s irrigation business outside North America delivered double-digit growth, driven by stable demand in Brazil, ongoing project deliveries in the Middle East and North Africa (MENA), and higher sales in Australia. Management cited increased agricultural exports to China and continued adoption of mechanized irrigation as underlying drivers.

• North America softness: The North American irrigation segment experienced lower unit sales due to weak crop receipts, low commodity prices, and significantly reduced storm-related replacement demand. Wet summer weather further limited equipment run times, and management noted customer sentiment is “approaching lows that we haven’t seen since the pandemic.”

• Infrastructure segment margin mix: While global road safety products performed well, the infrastructure business faced margin pressure from fewer large Road Zipper System projects and a less favorable revenue mix. Management expects operating margins in this segment to normalize closer to 20% without major project deliveries.

• Recurring subscription revenue: Lindsay’s technology portfolio surpassed 150,000 connected devices, with annual recurring revenue growing 20% year over year. Management highlighted this cycle-resistant, high-margin revenue stream as a key support for overall margins, even amid cyclical weakness in equipment sales.

• Leadership transition: CFO Brian Ketcham announced his upcoming retirement, with Sam Hinrichsen set to assume the role. Management credited Ketcham’s financial stewardship for building a strong balance sheet and supporting the company’s expansion, noting that he will remain as a consultant through 2026 to support continuity.

Drivers of Future Performance

Lindsay’s outlook is shaped by persistent domestic headwinds, stable international demand, and ongoing investment in technology and operations.

• Domestic irrigation headwinds: Management expects North American irrigation demand to remain subdued, with volumes likely to decline low to mid-single digits. Factors include weak commodity prices, limited crop receipts, and customer caution despite some government support. The company plans to lean on pricing discipline and cost controls to offset volume declines, but does not anticipate significant growth until farm incomes recover.

• International project pipeline: While project timing in the MENA region remains uncertain, Lindsay anticipates that continued demand for large-scale irrigation projects and stable conditions in Brazil and Australia will underpin modest international revenue growth. CEO Randy Wood noted that replacing major projects delivered in 2025 will be key, and that “the potential does exist” to backfill with new opportunities, though timing is unpredictable.

• Margin management and investments: Higher-margin recurring subscription revenue and recent investments in manufacturing automation are expected to support margins. However, additional depreciation from capital projects could temporarily pressure operating margins. Management is targeting operating margin stability by balancing cost levers, subscription growth, and disciplined capital allocation, with capital expenditures set to rise for expanded galvanizing capacity.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will closely watch (1) whether North American irrigation demand begins to recover as commodity prices and farm income evolve, (2) the pace and timing of new international irrigation projects, especially in the MENA region, and (3) the impact of increased recurring subscription revenue and manufacturing investments on margin stability. Execution on capital projects and successful navigation of credit constraints in Brazil will also be important signposts.

Lindsay currently trades at $116.86, down from $122.65 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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