On this page of StockholderLetter.com we present the latest annual shareholder letter from TORO CO — ticker symbol TTC. Reading current and past TTC letters to shareholders can bring important insights into the investment thesis.
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2/3/2026 Letter Continued (Full PDF)
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2/7/2023 TTC Stockholder Letter
• 2/6/2024 TTC Stockholder Letter
• 2/4/2025 TTC Stockholder Letter
• More "Industrial Machinery & Equipment" Category Stockholder Letters
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TTC Benford's Law Stock Score = 75
2/3/2026 Letter Continued (Full PDF)
•
2/7/2023 TTC Stockholder Letter•
2/6/2024 TTC Stockholder Letter•
2/4/2025 TTC Stockholder Letter•
More "Industrial Machinery & Equipment" Category Stockholder Letters•
TTC Benford's Law Stock Score = 75TTC Shareholder/Stockholder Letter Transcript:
The Toro Company 8111 Lyndale Avenue South Bloomington, MN 55420-1196 952-888-8801 www.thetorocompany.com 2025 ANNUAL REPORT EXECUTIVE OFFICERS Richard M. Olson Chairman of the Board and Chief Executive Officer Kevin N. Carpenter EXPANDING LEADERSHIP IN UNDERGROUND Supported by demand in the pipeline, water infrastructure and energy transmission sectors, The Toro Company took several intentional actions in fiscal 2025 to strengthen its position in underground construction. Following divestitures of the Trencor equipment brand and the auger boring product category of the American Augers brand, we decided to acquire Tornado Infrastructure Equipment Ltd., a leading manufacturer in hydrovac excavation solutions. Designed to safely excavate in urban areas and around critical infrastructure, the addition of Tornado along with our extensive portfolio of leading construction brands significantly strengthens our leadership in the industry. We believe this will enable The Toro Company to capture a greater share of the rapidly growing infrastructure space, build on the momentum of our professional segment, and deliver sustained value to our shareholders. BOARD OF DIRECTORS Peter D. Moeller Group Vice President, Underground, Specialty Construction and International Dianne C. Craig Retired, President Lincoln | Ford Motor Company Gary L. Ellis* Vice President, Global Operations and Integrated Supply Chain Lori A. Riley Angela C. Drake Kurt D. Svendsen Vice President, Technology Chairman, President and Chief Executive Officer AGCO Corporation Edric C. Funk Joanna M. Totsky Jeffrey L. Harmening Vice President and Chief Financial Officer President and Chief Operating Officer Gregory S. Janey Group Vice President, Landscapes and Contractor Vice President, Human Resources Vice President, General Counsel and Corporate Secretary Grant M. Young Group Vice President, Golf, Grounds and Irrigation Retired, Executive Vice President Medtronic plc Eric P. Hansotia Chairman and Chief Executive Officer General Mills, Inc. D. Christian Koch Chairman, President and Chief Executive Officer Carlisle Companies Incorporated Joyce A. Mullen President and Chief Executive Officer Insight Enterprises, Inc. Richard M. Olson Chairman of the Board and Chief Executive Officer James C. O Rourke Retired, President and Chief Executive Officer The Mosaic Company Jill M. Pemberton Chief Financial Officer, North America LVMH Mo t Hennessy Louis Vuitton *Lead Independent Director KEY PRODUCT HIGHLIGHTS (1) Toro s Spatial Adjust uses TurfRad sensors on fairway mowers or vehicles to transform thousands of soil moisture readings into actionable irrigation insights, giving customers a competitive edge in turf health and resource savings. (2) With its vertical lift design and easy to use controls, the powerful Toro Dingo TX 1000 TURBO enables crews to dig, grade, move material and do more without slowing down. (3) Designed for demanding utility work, the Ditch Witch AT32 is the next generation of all-terrain drilling, packing performance and strength into a sleek package. (4) With the Sidewinder cutting system and floating Contour Plus decks, the Toro Groundsmaster 3500 is designed to provide unmatched trimming without scalping on undulating terrain. SHAREHOLDER INFORMATION Shareholder Assistance Communications concerning The Toro Company stock, including shareholder change of address, certificate replacement, share transfer requirements, the direct stock purchase plan, dividends, the dividend reinvestment plan and similar matters should be directed to our transfer agent at: Broadridge Shareholder Services c/o Broadridge Corporate Issuer Solutions P.O. Box 1342 Brentwood, NY 11717-0718 1-844-956-0809 or 1-303-562-9697 shareholder@broadridge.com www.shareholder.broadridge.com/TTC Investor Inquiries Individual shareholders may direct any questions to invest@thetorocompany.com. Richard M. Olson Chairman and Chief Executive Officer To Our Valued Shareholders, Fiscal 2025 was a year of strategic focus and resilience for and the effectiveness of our long-term strategy to drive The Toro Company. By concentrating on expanding our sustainable, profitable growth for our valued shareholders. position in key growth markets and executing deliberate actions to enhance productivity, we delivered fourth quarter and full-year performance that exceeded our expectations. These results underscore the strength of our diversified portfolio and our commitment to market-leading innovation. As a testament to our disciplined execution and strategic focus, we generated a record free cash flow of $578 million for the year. This significant year-over-year increase, driven largely by favorable working capital improvements, enabled us to return $441 million to shareholders through dividends Full-year net sales exceeded our guidance at $4.51 billion. and share repurchases. It also positions us to continue While this reflects a 1.6% decline from fiscal 2024, the driving growth and value creation in the years ahead. decrease was driven in part by the strategic divestitures Building upon a rich history of delivering positive financial of company-owned dealers and the Pope product line. Our professional segment delivered net sales growth for the year, highlighting the strength of the core businesses that make up roughly 80% of our portfolio. We re continuing to invest in the golf and grounds and underground and specialty construction markets, where we see long-term, secular growth and exciting opportunities ahead. Our residential segment delivered stronger-thananticipated sales to close out the fiscal year, fueled by solid price realization, increased snow product shipments, and continued strength in the mass retail channel. While we remain mindful of macroeconomic pressures, such as inflation and interest rates, that could weigh on consumer confidence, we believe the actions we ve taken position us to capture growth as conditions improve. outcomes and enduring value for stakeholders, we continue to advance our strategic priorities of accelerating profitable growth, driving productivity and operational excellence, and empowering our people. Through our focus on key growth markets and deliberate actions to improve productivity, we strengthened our competitive position and accelerated performance this year. This progress is fueled by the passion and perseverance of our dedicated team, whose commitment drives innovation and sets the foundation for lasting success. Operational Excellence & Strategic Transformation Operational excellence remains a cornerstone of our strategy with our multi-year Amplifying Maximum Productivity (AMP) program continuing to deliver meaningful results. To date, we have achieved annualized run-rate Turning to profitability, we delivered adjusted diluted cost savings of $86 million driven largely by strategic earnings per share of $4.20, surpassing our expectations moves to optimize our footprint and divestitures of non- and reinforcing the strength of our business model. These core businesses and product lines. Combined with results were incredibly strong, given the challenging disciplined supply chain strategies and selective pricing, environment of the past two years. Strategic pricing these actions helped offset tariff impacts and sustain actions, rigorous cost management, and operational strong margins throughout fiscal 2025. Looking ahead, efficiencies enabled us to protect margins while we are raising our AMP savings target to $125 million by continuing to invest in innovation and growth. This fiscal 2027, underscoring our confidence in driving deeper outcome reflects the power of our diversified portfolio efficiencies and accelerating growth across the business. We also made strategic acquisitions across our brand capability, coupled with Edric s proven ability to deliver portfolio this year to position the company for sustained, operational excellence and innovation, positions us profitable growth. In February, HammerHead Trenchless well to execute our strategic priorities with discipline expanded its capabilities with the acquisition of ProKASRO and to create long-term value for our shareholders. Services USA a leader in advanced robotics, UV pipelining solutions, and lateral rehabilitation technologies. Strengthening Innovation Leadership ProKASRO s innovative trenchless solutions enable utility Across our global brands and businesses, we continue contractors to rehabilitate underground wastewater and water to accelerate breakthroughs in the key technology areas pipelines without digging or disrupting outdoor environments, of alternative power, smart-connected and autonomous perfectly complementing our market-leading Bluelight LED solutions. In fiscal 2025, we advanced our innovation system for the lateral light-curing market and reinforcing our leadership with strategic investments that expand our commitment to efficiency and environmental stewardship. portfolio and sharpen our competitive edge, all aimed at We also strengthened our leadership in the rapidly growing infrastructure space with the acquisition of Tornado Infrastructure Equipment, a leading manufacturer in hydrovac excavation solutions for the underground construction, power transmission and energy markets. This strategic addition complements our Ditch Witch brand and other marketleading underground construction solutions, expanding driving greater productivity for our customers. This includes the new BOSS Cold Front Technology electrical system for effortless connections and maximum efficiency, the next-generation Toro e2500 Ultra Buggy and eDingo TX 750 powered by our HyperCell power system for extended runtime, and the all-new Ventrac 45RC tractor, setting a new standard for slope mowing performance. our innovation pipeline and positioning us to meet rising We continue to invest in technology solutions and markets global demand with technologies that deliver lasting value. with strong growth potential. For golf course superintendents, In fiscal 2025, we also announced the sale of our Trencor equipment brand and the auger boring product category, a subset of the American Augers brand. This transaction allows additional focus on the core underground categories that we believe will provide the greatest growth opportunity and best position our business for future success. Reflecting our commitment to optimize our portfolio, these strategic moves are designed to sharpen our focus on core underground construction markets and unlock efficiencies that strengthen our competitive edge. With robust demand Toro s Lynx Drive mobile control system brings flexibility and real-time responsiveness to irrigation management, while our new Spatial Adjust software optimizes water use for healthier turf and improved playing conditions. These advancements reinforce our leadership in smart irrigation and set a new standard for efficiency and sustainability in golf course management. In underground construction, targeted investments and strategic acquisitions are driving performance, supported by innovative solutions like the Ditch Witch JT21 Drill and W8 hydro vacuum excavator. in the pipeline, water and energy sectors, we re energized to Autonomous represents a significant technology deliver innovative solutions that drive sustainable growth. breakthrough and remains a major focus for our businesses Key Leadership Appointments and teams as we work to deliver market-leading solutions that help our customers increase productivity and reduce As we continue to advance our strategic business priorities, operational costs. Toro introduced Turf Pro , a robotic we were very excited to announce two significant leadership mowing platform for large turf areas, and Range Pro , an appointments in fiscal 2025. Edric Funk, a 29-year veteran autonomous golf ball collection system, both designed of The Toro Company, was appointed president and chief to deliver significant productivity gains for commercial operating officer. Previously serving as group vice president customers. The fully autonomous Exmark Turf Tracer of golf, grounds and irrigation, Edric s track record of with XiQ Technology, a contractor-grade walk-behind driving business performance and fostering innovation mower with smart robotic controls, added another equips him well to take on this expanded responsibility. advanced option for efficiency, while Toro s GeoLink We also welcomed Lori Riley, who joined us from Northern Solutions Autonomous Fairway Mower continues Tool + Equipment, as vice president of human resources. to revolutionize the golf industry for its innovation, Both Edric and Lori will play instrumental roles in helping precision, flexibility and game-changing impact. navigate the complexities of our evolving markets and By investing in these technologies, we are well-positioned driving operational transformation across the enterprise. to capture emerging opportunities and deliver innovative Lori s focus on strengthening talent and organizational solutions that enhance productivity, strengthen our leadership, and drive sustainable growth in markets more efficiently. As the only company delivering both where efficiency and precision are paramount. equipment and irrigation solutions, and the worldwide Trusted Partnerships, Shared Success leader in each, we offer an integrated approach unmatched in the industry. Looking ahead, we see enduring strength In fiscal 2025, we were honored to serve as the official in the golf market and a clear opportunity to help guide golf course maintenance equipment and irrigation its evolution drawing on our innovative portfolio, strong provider for the Ryder Cup at Bethpage Black in customer relationships, and best-in-class distribution Farmingdale, New York. We also proudly supported the network to capture growth for years to come. Open Championship at Royal Portrush with an innovative fleet of electric turf management solutions, ensuring the highest standards of play. In addition, our presence at the PGA Championship at Quail Hollow in North Carolina and the U.S. Women s Open at Erin Hills reinforced our commitment to excellence on golf s biggest stages. Innovation remains at the core of our strategy and the foundation of our leadership. We continue to make disciplined investments in technology and our markets focusing on alternative power, smart connectivity, and autonomous solutions that will shape the future of our industries. With a proven track record of turning These partnerships demonstrate the trust placed in our teams breakthrough ideas into advanced solutions, we enter and products to deliver precision, reliability, and innovation fiscal 2026 with a robust pipeline of new products when it matters most. Working hand-in-hand with customers designed to deliver meaningful value for our customers and our dedicated distributor network, we continue to set and accelerate growth across our portfolio. the benchmark for performance in the golf industry. From advancing sustainable technologies to delivering solutions that enhance course playability and operational efficiency, our leadership in golf is built on a legacy of innovation and a relentless focus on helping our customers succeed. Leading With Purpose Looking forward, we remain focused on executing our strategic priorities with discipline and agility. With strong demand in key sectors and a resilient business model, we At the same time, we are committed to technologies that enhance productivity and sustainability while driving efficiencies through our AMP program and targeted initiatives. Operational excellence remains a critical pillar of our success. Through disciplined execution and continuous improvement, we are streamlining processes, strengthening our supply chain, and aligning resources to meet evolving customer needs to ensure we remain agile, resilient and ready to deliver superior performance in any environment. are confident in our ability to deliver exceptional financial As we move into fiscal 2026 and beyond, we are doubling performance, create enduring shareholder value, and down on what has always set The Toro Company apart advance our purpose of helping customers enrich the our people, our partners, and our global network. These beauty, productivity, and sustainability of the land. relationships have been the cornerstone of our success for First, we are incredibly excited about our underground construction business. Aging infrastructure, combined with surging demand for transportation, broadband, electric grid, water quality, and data centers, is creating multi-year growth opportunities. Following the recent additions of ProKASRO and Tornado to our portfolio of leading construction brands, we ve expanded our capabilities in trenchless rehabilitation and vacuum excavation, strengthening our competitive position to capture a greater share of this rapidly growing market. With the most comprehensive lineup more than a century and will remain critical to delivering the innovation and customer care that define our brands. Guided by the principles that have fueled our growth for 111 years and supported by our talented team and loyal partners, we are confident in our ability to seize opportunities, navigate change, and deliver strong performance year after year. The Toro Company is built for the long term and together, we will continue to lead, innovate, and create lasting value for our customers, partners, and shareholders. Sincerely, of underground and specialty construction equipment and brands in the industry, we re uniquely positioned to lead the transformation of global infrastructure. Fueled by three consecutive years of record U.S. golf rounds Richard M. Olson Chairman and Chief Executive Officer played, we also see exceptional growth opportunities in the golf business. This momentum is driving innovation that empowers superintendents to manage smarter and *This Annual Report includes certain non-GAAP financial measures. Please refer to the disclosure, entitled Non-GAAP Financial Measures, which begins on page 45 of the Form 10-K.