CNH Capital's Q3 Net Income Dips Amid Rising Credit Losses

TL;DR

**CNH Capital's Q3 net income dip and soaring credit loss provisions signal potential trouble ahead, making me bearish on their near-term outlook.**

AI Summary

CNH Industrial Capital LLC reported a slight decrease in net income for the three months ended September 30, 2025, falling to $58,708 thousand from $63,170 thousand in the prior year, a 7.06% decline. However, for the nine months ended September 30, 2025, net income remained relatively stable at $176,257 thousand, compared to $176,481 thousand in 2024. Total revenues for the three-month period decreased by 0.90% to $336,956 thousand from $340,028 thousand, primarily due to a reduction in interest and other income from affiliates, which dropped from $134,729 thousand to $119,683 thousand. Conversely, total revenues for the nine-month period increased by 2.42% to $993,138 thousand from $969,697 thousand. A significant change was the provision for credit losses, which surged by 65.12% to $22,100 thousand for the three months and by 78.39% to $63,640 thousand for the nine months, indicating increased credit risk. Total assets saw a modest increase to $17,013,386 thousand as of September 30, 2025, from $16,926,908 thousand at December 31, 2024, driven by growth in equipment on operating leases, net, which rose from $1,422,001 thousand to $1,520,114 thousand.

Why It Matters

This report highlights CNH Industrial Capital's financial health, crucial for investors as it reflects the demand for CNH Industrial N.V.'s agricultural and construction equipment, which CNH Capital finances. The significant increase in the provision for credit losses, up 78.39% for the nine months, suggests potential weakening in customer credit quality or a more cautious lending outlook, which could impact future profitability and asset quality. For employees, a stable financial services arm ensures continued support for sales. Customers may face stricter lending terms or higher interest rates if credit risks continue to rise. In the broader market, this trend could signal headwinds in the agricultural and construction sectors, potentially affecting competitors like John Deere Financial or Caterpillar Financial.

Risk Assessment

Risk Level: medium — The risk level is medium due to the substantial increase in the provision for credit losses, which rose by 78.39% to $63,640 thousand for the nine months ended September 30, 2025, compared to $35,667 thousand in the prior year. This indicates a deteriorating credit environment or a more conservative stance on potential defaults. Additionally, net income for the three months ended September 30, 2025, decreased by 7.06% to $58,708 thousand, suggesting a potential slowdown in profitability.

Analyst Insight

Investors should closely monitor CNH Industrial Capital's future credit loss provisions and net interest margin. The significant increase in credit loss provisions warrants a cautious approach; consider if this trend is sustainable or if it signals broader economic weakness impacting their customer base. Evaluate CNH Industrial N.V.'s core equipment sales to understand the underlying demand for financing.

Financial Highlights

revenue

$993,138K

total Assets

$17,013,386K

net Income

$176,257K

cash Position

$288,414K

revenue Growth

+2.42%

Revenue Breakdown

Key Numbers

• $58.7M — Net Income (Q3 2025) (Decreased by 7.06% from $63.17M in Q3 2024)
• $176.2M — Net Income (9M 2025) (Stable compared to $176.48M in 9M 2024)
• $336.9M — Total Revenues (Q3 2025) (Decreased by 0.90% from $340.03M in Q3 2024)
• $993.1M — Total Revenues (9M 2025) (Increased by 2.42% from $969.7M in 9M 2024)
• $22.1M — Provision for Credit Losses (Q3 2025) (Increased by 65.12% from $13.38M in Q3 2024)
• $63.6M — Provision for Credit Losses (9M 2025) (Increased by 78.39% from $35.67M in 9M 2024)
• $17.01B — Total Assets (Sep 30, 2025) (Increased from $16.93B at Dec 31, 2024)
• $119.68M — Interest and other income from affiliates (Q3 2025) (Decreased from $134.73M in Q3 2024)

Key Players & Entities

• CNH Industrial Capital LLC (company) — registrant
• CNH Industrial America LLC (company) — parent company
• CNH Industrial N.V. (company) — ultimate parent company
• New Holland Credit Company, LLC (company) — primary operating subsidiary
• CNH Industrial Capital America LLC (company) — primary operating subsidiary
• CNH Industrial Capital Canada Ltd. (company) — primary operating subsidiary
• FASB (regulator) — Financial Accounting Standards Board
• SEC (regulator) — Securities and Exchange Commission
• Bloomberg (company) — financial news outlet

FAQ

Risk Factors

• Increased Provision for Credit Losses [high — financial]: The provision for credit losses surged by 65.12% to $22,100 thousand for Q3 2025 and by 78.39% to $63,640 thousand for the nine months ended September 30, 2025. This significant increase indicates a heightened perception of credit risk within the company's loan and lease portfolios.
• Dependence on Affiliate Income [medium — market]: Interest and other income from affiliates decreased by $15,046 thousand (11.17%) in Q3 2025 compared to Q3 2024, falling from $134,729 thousand to $119,683 thousand. This reliance on affiliate income presents a risk if intercompany transactions or the financial health of affiliates deteriorates.
• Interest Rate Sensitivity [medium — market]: The company's net interest margin is sensitive to changes in interest rates. While total interest expense to third parties decreased by $15,141 thousand in Q3 2025, a sustained rise in interest rates could increase borrowing costs and pressure profitability.
• Growth in Operating Leases [medium — operational]: Equipment on operating leases, net, increased from $1,422,001 thousand to $1,520,114 thousand. While this indicates business growth, it also increases the company's exposure to asset depreciation and potential residual value risk at the end of the lease term.

Industry Context

CNH Industrial Capital operates within the specialized financing sector, providing financial solutions for agricultural, construction, and transportation equipment. The industry is characterized by its sensitivity to economic cycles, interest rate fluctuations, and the demand for heavy machinery. Competition comes from captive finance arms of equipment manufacturers, as well as independent finance companies.

Regulatory Implications

As a financial services provider, CNH Industrial Capital is subject to various financial regulations, including those related to lending practices, capital adequacy, and consumer protection. Changes in these regulations could impact operational costs and business strategies. The increase in credit loss provisions may also attract scrutiny from regulators regarding risk management practices.

What Investors Should Do

1. Monitor the trend in provision for credit losses.
2. Analyze the drivers of decreased interest and other income from affiliates.
3. Evaluate the impact of increased operating lease assets.

Glossary

Provision for credit losses

An expense set aside by a financial institution to cover potential losses from loans or leases that may default. It reflects the estimated uncollectible amount of receivables. (A significant increase in this provision suggests rising concerns about the creditworthiness of CNH Industrial Capital's customers.)

Interest and other income from affiliates

Revenue generated from financial transactions or services provided to related companies within the same corporate group. (A decrease in this income stream directly impacted the company's total revenue, highlighting a potential dependency on intercompany financial activities.)

Equipment on operating leases, net

The net book value of equipment that the company leases out to customers under operating lease agreements, where the company retains ownership and responsibility for the asset. (Growth in this asset category indicates an expansion of the leasing business but also carries risks related to asset depreciation and residual value.)

Comprehensive Income

Includes net income plus all gains and losses that have been recognized in the period but are excluded from net income, such as foreign currency translation adjustments. (While net income was stable, other comprehensive income (loss) fluctuated significantly, primarily due to foreign currency translation, impacting the overall financial performance picture.)

Year-Over-Year Comparison

Compared to the prior year, CNH Industrial Capital LLC experienced a 7.06% decrease in net income for Q3 2025, reaching $58.7 million, though net income remained stable for the nine-month period at $176.2 million. Total revenues saw a slight dip of 0.90% in Q3 but grew 2.42% year-to-date, largely influenced by a significant drop in income from affiliates in the third quarter. A major concern is the dramatic increase in the provision for credit losses, up 65.12% for Q3 and 78.39% year-to-date, signaling heightened credit risk. Total assets grew modestly, driven by an increase in equipment on operating leases.

Filing Documents

• tmb-20250930x10q.htm (10-Q) — 2788KB
• tmb-20250930xex22.htm (EX-22) — 11KB
• tmb-20250930xex31d1.htm (EX-31.1) — 14KB
• tmb-20250930xex31d2.htm (EX-31.2) — 14KB
• tmb-20250930xex32d1.htm (EX-32.1) — 8KB
• 0001104659-25-108346.txt ( ) — 10960KB
• tmb-20250930.xsd (EX-101.SCH) — 47KB
• tmb-20250930_cal.xml (EX-101.CAL) — 63KB
• tmb-20250930_def.xml (EX-101.DEF) — 184KB
• tmb-20250930_lab.xml (EX-101.LAB) — 380KB
• tmb-20250930_pre.xml (EX-101.PRE) — 278KB
• tmb-20250930x10q_htm.xml (XML) — 2916KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 1 Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) 1 Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) 2 Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 (Unaudited) 3 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (Unaudited) 5 Consolidated Statements of Changes in Stockholder's Equity for the Nine Months Ended September 30, 2025 and 2024 (Unaudited) 6 Condensed Notes to Consolidated Financial Statements (Unaudited) 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 26 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk * Item 4.

Controls and Procedures

Controls and Procedures 38

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 39 Item 1A.

Risk Factors

Risk Factors 39 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds * Item 3. Defaults Upon Senior Securities * Item 4. Mine Safety Disclosures 39 Item 5. Other Information 39 Item 6. Exhibits 40 * This item has been omitted pursuant to the reduced disclosure format as set forth in General Instruction (H)(2) of Form 10-Q Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (Dollars in thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 REVENUES Interest income on retail notes and finance leases $ 100,719 $ 92,991 $ 290,412 $ 272,566 Rental income on operating leases 64,692 59,846 185,614 177,192 Revolving charge account income 12,526 11,891 34,590 32,080 Interest income on wholesale notes 34,250 36,509 106,746 94,439 Interest and other income from affiliates 119,683 134,729 364,576 382,462 Other income 5,086 4,062 11,200 10,958 Total revenues 336,956 340,028 993,138 969,697 EXPENSES Interest expense: Interest expense to third parties 165,920 181,061 497,239 518,760 Interest expense to affiliates 762 2,177 1,479 7,769 Total interest expense 166,682 183,238 498,718 526,529 Administrative and operating expenses: Fees charged by affiliates 12,597 12,217 37,200 37,260 Provision for credit losses 22,100 13,384 63,640 35,667 Depreciation of equipment on operating leases 49,020 45,663 143,506 132,958 Other expenses, net 9,196 3,550 18,858 8,845 Total administrative and operating expenses 92,913 74,814 263,204 214,730 Total expenses 259,595 258,052 761,922 741,259 INCOME BEFORE TAXES 77,361 81,976 231,216 228,438 Income tax provision 18,653 18,806 54,959 51,957 NET INCOME $ 58,708 $ 63,170 $ 176,257 $ 176,481 See the accompanying Condensed Notes to Consolidated Financial Statements (Unaudited). 1 Table of Contents CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (Dollars in thousands) (Unaudit

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