Toro Bolsters Professional Segment with $279M Hydrovac Acquisition

Ticker: TTC · Form: 10-K · Filed: 2025-12-17T00:00:00.000Z

Sentiment: bullish

Topics: Construction Equipment, Turf Maintenance, Acquisition, Professional Services, Agricultural Irrigation, Supply Chain, Sustainability

Related Tickers: TTC, DE, CAT, CMI

TL;DR

**TTC is digging deeper into professional services with a smart acquisition, signaling strong growth ahead.**

AI Summary

The Toro Company (TTC) reported a strong fiscal year ending October 31, 2025, with its Professional segment accounting for 80.3% of consolidated net sales, and the Residential segment contributing 19.0%. The company completed a strategic acquisition on December 8, 2025, purchasing Tornado Infrastructure Equipment Ltd. for $279.3 million Canadian dollars, expanding its Professional segment and dealer network in hydrovac excavation solutions. TTC funded this acquisition through existing revolving credit facilities and additional financial arrangements. The company continues to prioritize innovation, with a significant portion of net sales derived from new and enhanced products introduced within the last three fiscal years. Strategic outlook includes disciplined portfolio management, prudent capital allocation, and a focus on sustainability through alternative power, smart connected, and autonomous solutions. Risks include macroeconomic factors like inflation, supply chain disruptions, and geopolitical tensions, as highlighted in their cautionary note regarding forward-looking statements.

Why It Matters

Toro's strategic acquisition of Tornado Infrastructure Equipment for $279.3 million CAD significantly strengthens its Professional segment, which already drives over 80% of its revenue. This move expands TTC's footprint in the growing underground construction market, enhancing its competitive position against rivals by offering a broader suite of solutions. For investors, this indicates a commitment to growth and market leadership through targeted M&A, potentially boosting future earnings and shareholder value. Employees and customers benefit from an expanded product portfolio and dealer network, fostering innovation and service capabilities in critical infrastructure sectors.

Risk Assessment

Risk Level: medium — The company faces medium risk due to its exposure to global supply chain disruptions, inflationary pressures, and geopolitical tensions, as explicitly stated in its 'Cautionary Note Regarding Forward-Looking Statements.' While the acquisition of Tornado Infrastructure Equipment Ltd. for $279.3 million CAD expands its market, it also introduces integration risks and reliance on existing revolving credit facilities for funding.

Analyst Insight

Investors should monitor TTC's integration of Tornado Infrastructure Equipment and its impact on the Professional segment's profitability. Evaluate the company's ability to manage ongoing supply chain challenges and inflationary costs, as these factors could influence future earnings despite strategic growth initiatives.

Key Numbers

Key Players & Entities

FAQ

What was The Toro Company's (TTC) revenue breakdown by segment in fiscal 2025?

For fiscal year 2025, The Toro Company's Professional segment accounted for 80.3% of consolidated net sales, while the Residential segment contributed 19.0%. The remaining 0.7% was attributed to 'Other' activities.

What was the key acquisition made by The Toro Company (TTC) in late 2025?

On December 8, 2025, The Toro Company acquired Tornado Infrastructure Equipment Ltd., a hydrovac excavation solutions manufacturer, for a purchase price of $279.3 million Canadian dollars.

How did The Toro Company (TTC) fund the Tornado Infrastructure Equipment acquisition?

The Toro Company funded the acquisition of Tornado Infrastructure Equipment Ltd. with borrowings under its existing revolving credit facility and additional financial arrangements.

What are the primary risks highlighted in The Toro Company's (TTC) 10-K filing?

The 10-K highlights risks including elevated field inventory levels, global supply chain disruptions, inflationary environments, tariffs, governmental budget cuts, and geopolitical tensions such as the war between Ukraine and Russia and Middle East conflicts.

What is The Toro Company's (TTC) strategy for new product development?

The Toro Company commits to funding research, development, and engineering activities to improve existing products and develop new ones. A significant portion of net sales historically comes from products introduced in the current and previous two fiscal years.

What is the market value of The Toro Company's (TTC) common stock held by non-affiliates?

As of May 2, 2025, the aggregate market value of The Toro Company's common stock held by non-affiliates was approximately $7.0 billion, based on the closing price on the New York Stock Exchange.

What are some of the key brands under The Toro Company's (TTC) Professional segment?

Key brands in the Professional segment include Toro, Ditch Witch, eXmark, Spartan, BOSS, Ventrac, American Augers, Subsite, HammerHead, Radius, Perrot, Hayter, Unique Lighting Systems, and Irritrol.

How does The Toro Company (TTC) address sustainability in its operations?

Sustainability is integrated into TTC's strategic priorities, focusing on accelerating profitable growth, driving productivity, and empowering its people. This includes efforts in alternative power, smart connected, and autonomous solutions, as well as environmental, social, and governance initiatives.

What types of products does The Toro Company (TTC) offer for the golf market?

For the golf market, TTC offers equipment under the Toro and Ventrac brands, including mowers, greens rollers, utility vehicles, and aeration equipment. It also provides Toro-branded irrigation products like sprinkler heads, controllers, and turf sensors.

When was The Toro Company's (TTC) 10-K filed and for what fiscal year?

The Toro Company's 10-K was filed on December 17, 2025, for the fiscal year ended October 31, 2025.

Filing Stats: 4,262 words · 17 min read · ~14 pages · Grade level 16.3 · Accepted 2025-12-17 14:34:38

Key Financial Figures

Filing Documents

Business

Business 4 ITEM 1A.

Risk Factors

Risk Factors 15 ITEM 1B. Unresolved Staff Comments 31 ITEM 1C. Cybersecurity 31 ITEM 2.

Properties

Properties 33 ITEM 3.

Legal Proceedings

Legal Proceedings 33 ITEM 4. Mine Safety Disclosures 33 Information About Our Executive Officers 34 PART II ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 35 The Toro Company Common Stock Comparative Performance Graph 36 ITEM 6. [Reserved] 36 ITEM 7.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 37 Company Overview 37 Results of Operations 38 Business Segments 40 Financial Position 41 Non-GAAP Financial Measures 45 Critical Accounting Policies and Estimates 47 ITEM 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 52 ITEM 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 55 Management's Report on Internal Control over Financial Reporting 55 Report of Independent Registered Public Accounting Firm 56 Consolidated Statements of Earnings 58 Consolidated Statements of Comprehensive Income 58 Consolidated Balance Sheets 59 Consolidated Statements of Cash Flows 60 Consolidated Statements of Stockholders' Equity 61

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 62 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 97 ITEM 9A.

Controls and Procedures

Controls and Procedures 97 ITEM 9B. Other Information 97 ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 97 PART III ITEM 10. Directors, Executive Officers and Corporate Governance 98 ITEM 11.

Executive Compensation

Executive Compensation 98 ITEM 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 98 ITEM 13. Certain Relationships and Related Transactions, and Director Independence 98 ITEM 14. Principal Accountant Fees and Services 98 PART IV ITEM 15. Exhibit and Financial Statement Schedules 99 ITEM 16. Form 10-K Summary 102

SIGNATURES

SIGNATURES 103 2 Table of Contents GENERAL Unless the context requires otherwise, references to "TTC," the "company," "we," "us," and "our," refer to The Toro Company and its consolidated subsidiaries. References to fiscal years, such as "fiscal 2025," are to the fiscal year ending on October 31 of the specified year. We use "Toro" and many other marks as trademarks in the United States and/or in other countries. This Annual Report on Form 10-K contains references to our registered or common law trade names, trademarks or service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Annual Report on Form 10-K, including logos, artwork and other visual displays, may appear without the or symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other entities' trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity unless otherwise stated. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains, or incorporates by reference, not only historical information, but also forward-looking statements regarding future events and our future results within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and the Private Securities Litigation Reform Act of 1995, and that are subject to the safe harbor created by those sections. In addition, we or others on our behalf may make forward-looking statements from time to time in oral presentations, including telephone conferences and/or web casts open to the public, in press releases or reports, on our websites or otherwise. Sta

BUSINESS

ITEM 1. BUSINESS Introduction We design, manufacture, market and sell professional turf maintenance equipment and services; turf irrigation systems; landscaping equipment and lighting products; snow and ice management products; agricultural irrigation ("ag-irrigation") systems; rental, specialty and underground construction equipment; and residential yard and snow thrower products. Our purpose is to help our customers enrich the beauty, productivity, and sustainability of the land. Our products are marketed and sold worldwide through a network of distributors, dealers, mass retailers, hardware retailers, equipment rental centers, and home centers, as well as online and direct to end-users under the primary trademarks of Toro, Ditch Witch, eXmark, Spartan, BOSS, Ventrac, American Augers, Subsite, HammerHead, Radius, Perrot, Hayter, Unique Lighting Systems, Irritrol, and Lawn-Boy, most of which are registered in the United States ("U.S.") and/or in the primary countries outside the U.S. where we market our products branded under such trademarks. We focus on innovation and quality in our products, customer service, manufacturing, and marketing. We strive to provide innovative, well-built, and dependable products supported by an extensive service network. We commit to funding research, development, and engineering activities in order to improve and enhance existing products and develop new products. Through these efforts, we seek to be responsive to trends that may affect our target markets now and in the future. A significant portion of our net sales has historically been, and we expect will continue to be, attributable to new and enhanced products. We define new products as those introduced in the current and previous two fiscal years. We have continued to complement our brands, enhance our product portfolios, and improve our technologies through innovation and strategic acquisitions over the more than 100 years we have been in business, including most recently ou

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