Cummins Inc. (CMI): Business Model Canvas [Dec-2025 Updated]

You're looking to map out exactly how Cummins Inc. is navigating the energy transition, and honestly, their Business Model Canvas tells a compelling, dual-track story. As an analyst who's seen market shifts for twenty years, I see a company balancing its cash cow-the massive global engine and aftermarket service business, which saw Distribution revenue hit $3.0 billion in Q2 2025-with a huge bet on the future via Accelera, evidenced by that $240 million non-cash charge in Q3 2025 for their electrolyzer push. This model hinges on fuel-agnostic power, from diesel to hydrogen, supported by a vast dealer network and strategic OEM deals, all while projecting a full-year 2025 revenue that's flat to slightly up from 2024's $34.1 billion; dig into the details below to see how they plan to keep the lights on while building the next generation of power.

Cummins Inc. (CMI) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that power Cummins Inc.'s diverse business as of late 2025. These aren't just handshake agreements; they are multi-million dollar contracts and strategic technology alliances that define market access and future growth vectors, especially in the energy transition space.

Global Original Equipment Manufacturers (OEMs) for Engine Supply

Cummins Inc. maintains deep, long-standing relationships providing core engine supply to a wide variety of OEMs across on-highway, off-highway, and power generation sectors. This forms the foundational revenue base for the traditional business.

• Leveraging a strong legacy of diesel engine supply across diverse equipment platforms.
• Providing power technology solutions that are integrated into partner equipment globally.

Strategic Technology and Decarbonization Alliances

The company is actively partnering to accelerate its transition and that of its customers, particularly in heavy-duty and industrial applications. The recent acquisition of First Mode assets in February 2025 bolstered internal capabilities for these external collaborations.

The defense contract for Poland is a direct win for the Power Systems segment, building on a prior potential $509.5 million Army award from 2024 for tactical generators.

International Manufacturing and Distribution

To support global scale, Cummins Inc. relies on established structures for market penetration and service delivery.

• Joint ventures for manufacturing and distribution in key international markets.
• Leveraging global scale and capabilities with partners like Komatsu.

For context on the scale of the clean energy segment driving some of these partnerships, Accelera by Cummins recorded non-cash charges of $240 million, or $1.73 per diluted share, in the third quarter of 2025, reflecting shifts in hydrogen adoption expectations. Still, prior to this, the company had a projection for electrolyzer revenues of at least $400 million in 2025.

Overall, third quarter 2025 revenues for Cummins Inc. were $8.3 billion, with total EBITDA at $1.2 billion, or 14.3% of sales.

Cummins Inc. (CMI) - Canvas Business Model: Key Activities

Research and development for the 'Destination Zero' strategy

• Cummins Inc. is navigating the energy transition guided by its Destination Zero strategy, aiming for net-zero emissions by 2050.
• The company employs a pragmatic "two-plank strategy," advancing internal combustion engines (ICE) with "bridge technologies" like the HELM™ fuel-agnostic platform while investing in Accelera.
• Selling, general, and research expenses for the third quarter of 2025 were $1.1 billion, or 13.6% of sales.
• The company remains committed to pacing and focusing zero emissions investments on the most promising paths.

Manufacturing of advanced diesel, natural gas, and hydrogen engines

The Engine segment is focused on manufacturing, including the introduction of the X10 as part of the Cummins HELM™ platforms, which replaces the L9 and X12 engine platforms. The X15N natural gas engine began full production at the Jamestown Engine Plant in September 2024.

Revenues in the Engine segment decreased due to lower medium-duty and heavy-duty truck demand in the United States and Mexico.

Global aftermarket service and parts distribution

The Distribution segment supports the global service and parts network. Aftermarket demand for parts and service was noted as stable in the second quarter of 2025.

Revenues in North America for the Distribution segment were up 22% in Q2 2025, primarily due to increased demand for power generation products and favorable pricing.

Designing and executing large-scale power generation projects

The Power Systems segment is a key driver, fueled by surging demand for mission-critical power solutions in data centers. Management expects data center-related revenues to rise 30-35% in 2025.

• Power Systems segment sales reached a record $2.0 billion in the third quarter of 2025, an 18% increase year-over-year.
• In the second quarter of 2025, Power Systems sales were $1.9 billion, up 19%, with an EBITDA margin of 22.8%.
• The company is leading a large-scale green hydrogen project for bp, a 100MW PEM electrolyzer, designed to produce 11,000 tons/year of clean hydrogen.
• Third quarter 2025 results showed Power Systems segment EBITDA at $430 million, or 22.8% of sales, compared to $301 million, or 18.9% of sales, a year ago.

Developing and commercializing zero-emissions technologies (Accelera)

The Accelera segment focuses on zero-emissions technologies, including eMobility and electrolyzers. The company recorded significant non-cash charges related to this business in the third quarter of 2025.

The Q3 2025 EBITDA loss included $240 million of non-cash charges related to goodwill impairment and inventory write-downs for the electrolyzer business. The company is undertaking a strategic review of the electrolyzer business due to policy-driven shifts in hydrogen adoption expectations.

Cummins Inc. (CMI) - Canvas Business Model: Key Resources

You're looking at the core assets Cummins Inc. (CMI) relies on to execute its strategy, especially as it balances its traditional power business with the transition to zero-emissions technology. These aren't just line items on a balance sheet; they are the engines, the people, and the reach that make the business function.

Global Network and Distribution Reach

The physical footprint for service and distribution is massive, which is a huge competitive advantage, particularly for heavy-duty equipment where uptime is everything. Cummins serves its customers through a service network that includes company-owned, joint venture, and independent distributor locations, alongside a huge base of certified dealers.

As of the early 2025 filings, Cummins supported its global customer base with a vast service network of approximately 650 wholly-owned, joint venture, and independent distributor locations. This is complemented by a service reach extending through more than 19,000 Cummins certified dealer locations across approximately 190 countries and territories.

Workforce and Human Capital

The people are definitely a key resource, especially given the complexity of both legacy engine technology and new zero-emissions development. The workforce size has seen some fluctuation recently, reflecting strategic shifts.

As of the end of fiscal year 2024, Cummins reported having 69,600 employees. This represented a decrease from the 75,500 employees reported at the end of fiscal year 2023. By the first and second quarters of 2025, the reported employee count hovered around 69,600 people worldwide. The company's career information, however, still references a commitment from approximately 70,000 people worldwide.

Technology Platforms and Intellectual Property

Cummins Inc. holds significant intangible assets, particularly in the core internal combustion engine space and the emerging zero-emissions sector. The company's intellectual property is deeply embedded in its engine controls and aftertreatment systems, which are critical for meeting current emissions standards.

The HELM™ (Higher Efficiency, Lower Emissions, Multiple Fuels) engine platform represents the current state-of-the-art in their traditional power segment, designed to maximize efficiency and minimize emissions across various fuel types. This platform is a direct result of decades of proprietary engine control and aftertreatment system development.

Accelera Zero-Emissions Technology Portfolio

The Accelera by Cummins segment houses the future-facing assets, including batteries, fuel cells, and electrolyzers. Investment in this area is substantial, though it has recently involved reorganization actions, with $312 million in charges recorded in the fourth quarter of 2024 related to streamlining these operations.

Here is a look at some of the deployment and backlog statistics for Accelera's key zero-emissions technologies as of mid-2025 reporting:

The backlog of electrolyzers, when commissioned, is expected to produce approximately 225 tons of hydrogen per day. The company continues to invest in these areas, as evidenced by the $105 million in sales reported by the Accelera segment in the second quarter of 2025, despite an EBITDA loss of $100 million for that quarter.

You can see the scale of their commitment across the segments in their 2024 performance, where the Distribution segment generated $34.1 billion in revenue, while Accelera sales were $414 million for the full year 2024.

Cummins Inc. (CMI) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Cummins Inc. (CMI) right now, late in 2025. It's about balancing the present revenue streams with the big bets on the future.

Fuel-agnostic power solutions for a seamless energy transition

The push toward cleaner power is reflected in the performance of the Accelera by Cummins segment, which houses the zero-emissions tech. While still operating at a loss, the revenue growth shows adoption is happening, even with recent headwinds in the hydrogen space.

The HELM engine platforms, introduced in 2024, give customers the choice between advanced diesel and alternate fuels like natural gas and hydrogen.

Dependable, mission-critical power for data centers and industrial applications

The Power Systems segment is clearly delivering on the need for reliable backup power, especially for the digital economy.

• Power Systems Segment Sales in Q1 2025: $1.6 billion, a 19% increase.
• Power Systems Segment Sales in Q3 2025: Record $2 billion, an 18% increase.
• The Q1 2025 growth was driven primarily by data center demand.

Lower total cost of ownership through high-efficiency ICEs and service

While specific TCO savings percentages aren't public for every product line, the focus on efficiency and service is evident in the core Engine and Distribution segment performance.

The Distribution segment, which includes service and parts, posted sales of $3.2 billion in Q3 2025.

Global 24/7 service and parts availability for maximum uptime

The strength of the Distribution segment shows the service network is holding up, even as some end markets soften. Aftermarket demand for parts and service remained stable in Q2 2025.

• Distribution Segment Sales in Q1 2025: $2.9 billion, up 15%.
• The company operates globally in approximately 190 countries and territories.

Compliance with increasingly stringent global emissions regulations

The Engine segment is managing lower on-highway demand while maintaining decent margins, suggesting its advanced diesel and natural gas offerings meet current compliance needs.

For the trailing twelve months ending September 2025, Cummins Inc. reported total revenue of $33.581 billion.

The company invested $1.463 billion in Research & Development in 2024 to support future compliance and technology shifts.

Cummins Inc. (CMI) - Canvas Business Model: Customer Relationships

You're looking at how Cummins Inc. locks in its massive global customer base, which is key given the mixed signals in the markets as of late 2025. The relationships are built on deep, long-term commitments, especially with Original Equipment Manufacturers (OEMs).

Long-term, strategic supply agreements with major OEMs

The nature of agreements with most OEMs involves long-term price and operations contracts designed to ensure product availability over the contract duration. For instance, PACCAR remains a critical partner, having been a customer for 80 years; PACCAR accounted for more than 10 percent of Cummins Inc.'s net sales in 2024. These agreements specify engine requirements for particular vehicle models, not always a fixed volume of engines. The company is also actively collaborating on future tech, such as the reported collaboration with Komatsu to develop hybrid powertrains for surface haulage heavy mining equipment. This engineering alignment helps secure future business, even as near-term risks persist, like the expected decline in North America on-highway truck demand through the end of 2025.

Dedicated account management for large fleet and government customers

While specific account management metrics aren't public, the performance of segments heavily reliant on these customers shows their importance. The Distribution segment, which often services fleets and aftermarket needs, posted record sales of $3.2 billion in the third quarter of 2025, an increase of 7% year-over-year. Similarly, government-related demand, such as in the power generation sector, is robust; North America Power Systems equipment revenue increased by 25% in the second quarter of 2025, driven by data centers and mission critical applications. The company's commitment to these sectors is underscored by plans to invest $200 million across manufacturing sites in the U.S., England, and India, largely to support this rising power generation demand.

Partnership-based service model for emergency power generation

The service relationship for power generation, which includes emergency standby power, often involves long-term maintenance agreements. These agreements frequently include a variable component based on a cost per hour of usage basis. For certain standby generator agreements, there may be monthly minimum payments, which adds a layer of revenue certainty. The Power Systems segment, which houses generator sets, delivered record revenues of $2 billion in the third quarter of 2025, marking an 18% increase from the prior year, reflecting strong customer reliance on this installed base.

The following table summarizes key segment revenue performance, which reflects the health of these customer relationships across different end-markets as of the third quarter of 2025:

Digital tools like Guidanz for remote monitoring and diagnostics

Cummins Inc. deploys digital tools like Guidanz for remote monitoring and diagnostics to maintain ongoing relationships post-sale. These tools are part of the Connected Solutions offering. Specific metrics on the number of active units or customer adoption rates for Guidanz as of late 2025 were not available in the latest filings. However, the overall focus on digital capabilities supports the stable aftermarket demand, which the company noted remained steady even when on-highway truck volumes declined sharply.

Direct engineering collaboration on new product integration

Direct engineering collaboration is evident in the introduction of the Cummins HELM™ platforms, which offer customers the choice between advanced diesel or alternate fuels like natural gas and hydrogen for the X15-series engines. The new X10 engine, introduced as part of this, is designed to replace both the L9 and X12 platforms, requiring close integration with OEM vehicle designs. Furthermore, the company is working with partners like Komatsu on hybrid powertrains, which is a direct form of engineering collaboration aimed at accelerating decarbonization for mining customers.

Cummins Inc. (CMI) - Canvas Business Model: Channels

You're looking at how Cummins Inc. (CMI) gets its power solutions and services to the customer base, which is a massive, multi-layered physical and digital footprint. It's not just about selling an engine; it's about supporting it globally for its entire lifecycle.

The backbone of aftermarket support and parts sales is the Global Distribution Segment. This segment is a powerhouse, delivering $3.0 billion in sales in the second quarter of 2025, marking a 7% increase year-over-year for that quarter. For the first quarter of 2025, this segment brought in $2.9 billion in sales, a 15% jump from Q1 2024. Honestly, that segment's growth in Q1 was a bright spot when overall company revenue dipped.

The physical reach of Cummins Inc. (CMI) is extensive, covering approximately 190 countries and territories. This network is structured to ensure parts and service are always nearby.

• The service network includes approximately 650 wholly-owned, joint venture, and independent distributor locations.
• This is complemented by a network of over 19,000 Cummins certified dealer locations.
• The company employed approximately 69,600 people worldwide as of early 2025.

The Distribution Segment's operational performance shows the strength of this channel, especially in North America where power generation demand was high in Q2 2025. Here's a quick comparison of the segment's top-line and profitability across the first two quarters of 2025:

For large industrial and Power Systems customers, Cummins Inc. (CMI) relies on a direct sales force. This is crucial for complex, high-value projects, like the data center power generation demand that drove Power Systems sales up 19% in Q1 2025 and 19% in Q2 2025.

The direct-to-OEM sales channel remains a primary route for engine and component integration. Customers like PACCAR, Daimler, and Volvo utilize these components in their product platforms. While specific revenue splits aren't always public, the Engine segment sales were $2.8 billion in Q1 2025 and $2.9 billion in Q2 2025, showing the scale of OEM business, even with North America on-highway demand softening.

Digital channels are growing, though they face near-term headwinds. The e-commerce and digital platforms support parts and service. For context, the online store generated annual sales of $224.8M in 2024. For 2025, revenue is projected to decline by 10-20%. In October 2025 alone, the site generated online sales revenue of $15,176,403, with an average order value (AOV) between $800-$825.

The company also returned $251 million to shareholders in Q2 2025, partly through a 10% increase in the quarterly dividend to $2 per share. Finance: draft 13-week cash view by Friday.

Cummins Inc. (CMI) - Canvas Business Model: Customer Segments

You're looking at the core customer groups Cummins Inc. (CMI) serves as of late 2025, based on their recent quarterly performance reports. The business model clearly shows a split between legacy, economically sensitive markets and high-growth, secular demand areas.

Heavy- and medium-duty truck Original Equipment Manufacturers (OEMs)

This segment, primarily served by the Engine Segment, showed clear signs of cyclical weakness through the first half of 2025. You can see the pressure in the year-over-year sales declines reported.

The Chair and CEO noted that North America truck build rates were expected to decline sharply starting in the third quarter of 2025.

Global Power Generation customers (especially data centers, mission-critical)

This group, largely served by the Power Systems Segment, is a major growth driver, offsetting the on-highway weakness. Demand here is robust, supported by clear secular drivers.

• Power Systems Segment Sales in Q1 2025 were $1.6 billion, up 19% year-over-year.
• Power Systems Segment Sales in Q2 2025 reached $1.9 billion, up 19% year-over-year.
• North America power generation demand in Q2 2025 rose 23% year-over-year.
• Management projected data center-related revenues to rise 30% to 35% for the full year 2025.

The Distribution Segment also benefited, with North American revenues increasing 22% in Q1 2025 due to increased demand for power generation products.

Mining, construction, marine, rail, and agriculture industries

These sectors fall under the Engine Segment's traditional scope, though specific revenue breakouts aren't itemized separately from general on-highway weakness in the latest reports. However, strategic customer engagement is visible.

• The Engine Segment manufactures and markets engines for construction, farm equipment, mining, marine, and rail applications.
• The CEO highlighted a collaboration with Komatsu to develop hybrid powertrains for surface haulage heavy mining equipment.

The Power Systems Segment also serves mining, rail, and marine applications with large industrial engines.

Government and defense agencies (e.g., U.S. Army)

This customer group is served through the Power Systems Segment, which manufactures large industrial engines for defense applications. No specific 2025 financial figures were detailed for this segment in the provided earnings summaries.

Light-duty automotive manufacturers (e.g., Stellantis for Ram pickups)

These customers are part of the broader on-highway market that experienced lower demand, contributing to the Engine Segment's revenue decline. The company is focused on its HELM platforms across its X15-series portfolio, offering alternate fuel options to these and other on-highway customers.

The overall Components Segment, which supplies products like aftertreatment and transmissions, saw sales fall 20% in Q1 2025 and 9% in Q2 2025, reflecting the downturn in the core truck markets it supports.

Finance: draft updated customer segment revenue weighting based on Q3 2025 results by next Tuesday.

Cummins Inc. (CMI) - Canvas Business Model: Cost Structure

You're looking at the major drains on Cummins Inc. (CMI)'s bottom line as of late 2025. It's a mix of heavy, long-term asset costs and significant, ongoing technology investment, plus the recent, sharp impact of market shifts in their zero-emission unit.

High fixed costs from global manufacturing and assembly plants are a given for a company this size. While specific fixed overhead isn't broken out in the latest reports, the scale of investment points to substantial ongoing costs. For instance, Capital Expenditures (CapEx) for the latest twelve months ending September 2025 peaked at $1.231 billion. Furthermore, CapEx as of September 30, 2025, was reported at $1.2B USD. These figures reflect continuous spending to maintain and upgrade the global footprint that supports the Engine and Components segments.

Significant R&D expenditure for Destination Zero and Accelera technologies is a major, recurring cost. The company has maintained its commitment to innovation, with R&D investment steady at about 4.25% of revenue as of mid-2025. This investment is clearly visible in the performance of the Accelera segment, which is driving the zero-emissions push. In the third quarter of 2025, the Accelera segment recorded an EBITDA loss of $336 million. That loss was heavily influenced by specific write-downs, but the underlying investment in future tech is a constant cost driver.

The costs associated with the Accelera segment's strategic pivots are concrete and recent. During the third quarter of 2025, Cummins recorded specific non-cash charges related to Accelera's electrolyzer business totaling $240 million. This charge broke down into a $210 million goodwill impairment and a $30 million inventory write-down. These non-cash items reflect the cost of adjusting expectations for hydrogen adoption due to policy shifts.

Costs associated with maintaining the vast global distribution and service network represent the operational backbone cost. While direct maintenance cost figures aren't itemized, the sheer scale of the Distribution segment shows the size of this cost base. In Q3 2025, the Distribution Segment generated sales of $3.0 billion. That level of revenue implies significant fixed and variable costs for parts inventory, facility upkeep, and service personnel across the globe.

When you look at the segment performance in Q3 2025, you see where the cost pressures are hitting hardest:

• Accelera Segment EBITDA Loss: $336 million.
• Engine Segment EBITDA: $261 million, down from $427 million in Q3 2024.
• Components Segment EBITDA: $292 million, down from $351 million in Q3 2024.

Here's a quick look at the Q3 2025 segment financial scale, which helps frame the cost base:

The company's overall Q3 2025 EBITDA was $1.2 billion, or 14.3% of sales, a drop from 16.4% of sales in Q3 2024. That margin compression is the direct result of cost pressures, including the write-downs and lower volume in economically sensitive areas like North American truck engines, where sales fell 11% year-over-year in Q3 2025. Effective cost management is definitely helping, but the structural costs remain high.

Finance: draft 13-week cash view by Friday.

Cummins Inc. (CMI) - Canvas Business Model: Revenue Streams

You're looking at the revenue generation engine for Cummins Inc. as of late 2025. The streams are diverse, spanning traditional power to zero-emissions technology, though near-term market dynamics have introduced some volatility.

Cummins Inc. had projected a full-year 2025 revenue range that could decrease by 2% to increase by 3% year-over-year, based on the initial forecast from February 2025, using the $34.1 billion in revenue from 2024 as the base. However, due to growing economic uncertainty, particularly driven by tariffs, the company officially withdrew this full-year outlook in its first-quarter 2025 report. This means the near-term picture is less certain, but the underlying revenue sources remain the same.

The business model relies on five core segments, with Q2 2025 results showing a total revenue of $8.64 billion for the quarter. The high-margin Distribution/Aftermarket service and parts sales continue to be a strong performer; Q2 2025 Distribution revenue was reported at $3.0 billion, marking a 7% increase year-over-year. Also, the Power Systems segment delivered record profitability in Q2 2025, with sales soaring 19% year-over-year to $1.9 billion.

Here's a look at the revenue contribution by segment for the second quarter of 2025:

You generate revenue across the product lifecycle, from initial equipment sales to ongoing service. The specific product lines feeding these segments translate into the following revenue drivers:

• Engine sales (diesel, natural gas, hydrogen ICEs) are primarily captured within the Engine Segment, which posted $2.90 billion in Q2 2025 sales.
• Components sales (turbochargers, aftertreatment, transmissions) are booked through the Components Segment, which saw revenues of $2.7 billion in Q2 2025.
• Power Systems sales (generators, alternators, switchgear) are the core of the Power Systems Segment, which achieved $1.9 billion in Q2 2025 sales.
• High-margin Distribution/Aftermarket service and parts sales: Q2 2025 Distribution revenue was $3.0 billion.
• Accelera sales from zero-emissions products (electrolyzers, battery systems) are reported in the Accelera segment, which had sales of $105 million in Q2 2025.

The revenue mix shows a clear split between traditional power (Engine, Components, Distribution) and future-focused areas (Power Systems strength, Accelera investment). For instance, in Q2 2025, the Engine segment revenue of $2.90 billion was down due to lower on-highway demand in the United States and Mexico, while the Power Systems segment, driven by data center demand, grew to $1.9 billion.

The full-year 2025 revenue is projected to be in the range of down 2% to up 3% from $34.1 billion in 2024, though this forecast was withdrawn as of May 2025. The Q1 2025 revenue was $8.2 billion, a 3% decrease year-over-year, showing the early impact of market softness before the guidance withdrawal.

Finance: draft 13-week cash view by Friday.