Tennant Company (TNC): Business Model Canvas [Dec-2025 Updated]

You're looking at Tennant Company (TNC) right now, trying to map out how they're turning high-tech cleaning into real revenue, especially with that big push into Autonomous Mobile Robots (AMRs) like the X6 ROVR. Honestly, the model is a fascinating mix of old-school global distribution and new-age tech subscriptions, all while managing near-term pressures-we're talking about a projected $1.21 billion to $1.25 billion in Net Sales for 2025, but also significant spending, like the $14.0 million ERP modernization hit just in Q3 2025. To see exactly how they balance proprietary tech like ec-H2O NanoClean against their cost structure and revenue streams, dive into the full Business Model Canvas breakdown below; it shows the whole picture, from their direct sales force in 21 countries to their Clean 360 service contracts.

Tennant Company (TNC) - Canvas Business Model: Key Partnerships

You're looking at the structure of Tennant Company's alliances, which are critical for scaling technology and market reach. Honestly, this is where a manufacturer like Tennant Company translates R&D into real-world deployment.

Technology partners like Brain Corp for autonomous cleaning solutions.

The relationship with Brain Corp is deep; Tennant Company invested $32 million in the AI company to speed up the next generation of autonomous mobile robots (AMRs). This partnership has already yielded products like the X4 ROVR and the X6 ROVR robotic floor scrubber. As of early 2024, over 6,500 Tennant cleaning robots were running on BrainOS. By the first quarter of 2025, the AMR segment sales had grown 30% year-over-year and represented approximately 5% of Tennant Company's total net sales. This shows the partnership is moving from development to meaningful revenue contribution.

Global network of authorized distributors in over 100 countries.

Tennant Company supports its direct sales in 21 countries with an extensive network of authorized distributors that span more than 100 countries. This dual approach is how they maintain a global footprint. For context, Tennant Company's net sales for the nine months ended September 30, 2025, reached $911.9 million. This massive reach is essential for supporting the installed base of equipment.

Strategic acquisitions for direct sales channel expansion in EMEA.

To bolster its direct channel in Europe, Tennant Company acquired TCS, which was its largest distributor in Central and Eastern Europe. This acquisition, finalized in early 2024, immediately added $22.0 million in revenue and $0.2 million in net income for the full year ended December 31, 2024. This move established an established direct channel in countries like Romania, Hungary, Czech Republic, and Slovakia, plus an expanded network across Austria, Switzerland, Poland, the Middle East, and Africa. It's about gaining experienced sales forces directly.

Suppliers for manufacturing components and raw materials.

Tennant Company relies on third parties for component parts, electronics, and services used in production. The primary raw materials for mechanized cleaning equipment include Steel, metal alloys and resin. The company noted in early 2025 that its operations were impacted by input cost inflation and supply chain disruptions. This is a constant pressure point for the gross profit margin, which stood at 41.4% in Q1 2025, down 280 basis points from Q1 2024. You defintely need to watch inventory turns here.

Corporate giving partners like Habitat for Humanity.

The philanthropic arm, the Tennant Foundation, supports community engagement. Tennant Company announced a $250,000 corporate sponsorship for the 2024 Habitat for Humanity Carter Work Project. To put that in perspective for the partner, Habitat for Humanity helped 3 million people build or improve a place to call home in their fiscal year 2025 (ending June 30, 2025).

Here's a quick view of the scale of these key relationships:

The overall scale of Tennant Company's business in 2025, as of the end of Q3, was net sales of $911.9 million. The company reaffirmed its 2025 guidance for net sales between $1,210 million and $1,250 million. That means Q4 needs to pull in between $298.1 million and $338.1 million to hit the low or high end, respectively.

• Technology partnership investment: $32 million in Brain Corp.
• Global reach: Direct sales in 21 countries; distributor sales in over 100 countries.
• Acquisition impact: TCS added $22.0 million in 2024 revenue.
• AMR sales growth: 30% year-over-year in Q1 2025.
• Giving commitment: $250,000 sponsorship in 2024.

Finance: review Q4 2025 sales forecast against the $1,210 million low-end guidance by next Tuesday.

Tennant Company (TNC) - Canvas Business Model: Key Activities

You're looking at the core engine driving Tennant Company's operations as of late 2025. These aren't abstract goals; these are the actual numbers and projects defining their day-to-day execution.

Manufacturing and global distribution of cleaning equipment.

Tennant Company's manufacturing and distribution backbone supports a global footprint. The company sells products directly in more than 21 countries and utilizes distributors in over 100 countries globally. The scale of this operation is supported by a workforce of approximately 4,500 employees. For the trailing twelve months (TTM) ending late 2025, Tennant Company's total revenue stood at $1.24 Billion USD.

Here's a snapshot of recent sales performance:

The sales mix for the third quarter of 2025 showed the following components:

• Equipment sales.
• Service revenue.
• Parts and Consumables revenue.

Research and development (R&D) for autonomous and sustainable technologies.

Innovation is a constant activity, evidenced by the investment levels and product pipeline execution. For the third quarter of 2025, Tennant Company reported spending $11 million specifically on R&D investments. This focus is driving the commercialization of advanced equipment. For instance, the X6 ROVR robotic floor scrubber became commercially available in the second quarter of 2025. Furthermore, the company is ramping its innovation pipeline, targeting one major new product launch each quarter this year. The T360 walk-behind scrubber was one such launch in 2025.

Key technology focus areas include:

• Maintaining focus on strategic R&D investments.
• Driving growth through Autonomous Mobile Robot (AMR) platform investments.
• Commercial availability of the X6 ROVR in Q2 2025.

Strategic pricing actions to capture 50 to 100 basis points of growth.

Pricing is a deliberate lever used to offset inflationary and tariff impacts. The stated business strategy includes achieving an annual price growth target of 50 to 100 basis points. In the third quarter of 2025, the company saw strong price realization, which delivered 150 bps to the top-line result from strategic pricing actions, supplemented by additional tariff-related price adjustments. This action helps manage the environment where full-year 2025 guidance anticipates tariff pressures will modestly increase in Q4.

Enterprise Resource Planning (ERP) system modernization project.

The ERP modernization is a significant, ongoing key activity requiring substantial capital. The project involves consolidating eight different legacy ERP systems into one global instance of S/4HANA. The company is on track to achieve 98% data cleanliness as a result of instituting a global governance process. Capital expenditures related to this project were $14.0 million in the third quarter of 2025 alone. This compares to $12.4 million invested in Q1 2025 and $37.3 million spent in the full year 2024. The first phase of this transformation saw a successful go-live in the APAC region as of Q3 2025, building confidence for future rollouts.

ERP Investment by Quarter (2025):

Global field service and aftermarket support operations.

Tennant Company maintains what it calls the most extensive global field service network in the industry. This activity supports the installed base of equipment and generates recurring revenue streams from service, parts, and consumables. The company is exercising spending discipline while maintaining focus on strategic investments, including the AMR platform, which directly relates to servicing advanced equipment. The full-year 2025 Adjusted EBITDA guidance range is set between $196 million and $209 million.

Field Service and Profitability Context:

• Q3 2025 Adjusted EBITDA Margin was 16.4%.
• The company aims for 100% conversion of net income to free cash flow in 2025, excluding ERP modernization costs.

Finance: draft 13-week cash view by Friday.

Tennant Company (TNC) - Canvas Business Model: Key Resources

You're looking at the core assets Tennant Company relies on to run its business as of late 2025. These are the tangible and intangible things that make the whole operation tick.

Proprietary technologies form a significant part of the intellectual property base. The ec-H2O NanoClean technology electrically converts water into a detergent-free solution using millions of nanobubbles to clean soils effectively. This technology is certified by the NFSI to improve floor traction and reduce the risk of slip and fall accidents. Also critical is the IRIS asset management solution, which delivers key performance metrics and intelligent insights, though it is only available in limited geographies.

The physical reach is supported by an extensive global field service network, which Tennant Company states is the most extensive in the industry. This network supports sales in 15 countries directly and through distributors in over 100 countries. The service component includes a network of over 500 factory-direct technicians and authorized service partners, aiming to respond to most service requests within 24 - 48 hours.

For production scale, Tennant Company operates 11 global manufacturing facilities. These facilities are spread across multiple global regions to support worldwide operations.

The brand equity is built on a strong portfolio of brands acquired over time. You see the core brand alongside others like IPC, which was acquired in 2017, and Gaomei, acquired in 2018.

Here's a quick look at the brand structure and operational footprint:

The balance sheet holds immediate liquidity in the form of cash and equivalents of $99.4 million as of Q3 2025. This was alongside $409.3 million of unused borrowing capacity under the revolving credit facility at that same period end.

Consider the scale of the physical and technological deployment:

• Global direct sales in 15 countries.
• Distributor network spanning over 100 countries.
• 11 global manufacturing locations.
• ec-H2O NanoClean technology introduced in 2008 (first generation).
• IRIS Asset Manager availability is in limited geographies.
• Cash and equivalents at $99.4 million (Q3 2025).

Tennant Company (TNC) - Canvas Business Model: Value Propositions

You're looking at how Tennant Company delivers unique value to its customers as of late 2025. It's not just about selling a machine; it's about selling outcomes like labor savings and sustainability compliance, backed by a massive service footprint.

Autonomous Mobile Robots (AMRs) like the X6 ROVR for labor-saving

Tennant Company is pushing automation hard, signaling a clear shift away from manual cleaning for routine tasks. They hit a major milestone, selling their 10,000th robotic cleaning machine, which shows customers are moving past the initial trial phase for AMRs. The newer X6 ROVR, which became commercially available in the second quarter of 2025, is built for larger, more complex sites, capable of cleaning up to 75,000 square feet per cycle on a single tank. This directly addresses the persistent labor shortage challenge facility managers face. The company also made a significant commitment here, investing $32 million to accelerate the next generation of AI-enabled AMR development through its exclusive technology agreement with Brain Corp.

Here's a quick look at the robotics scale:

Sustainable, detergent-free cleaning via ec-H2O NanoClean technology

This technology electrically converts water into a cleaning solution using an on-board e-cell, generating millions of nanobubbles to lift soil without requiring traditional chemicals. Since the original ec-H2O technology launched in 2008, the company has shipped over 65,000 machines equipped with this capability to more than 7,500 customers across 29,000 locations worldwide. The NanoClean version offers enhanced performance while maintaining the cost and environmental benefits. This value proposition directly supports customer net-zero GHG emission targets, as a third-party study by EcoForm shows the technology significantly reduces impact across seven key categories like energy and CO2 emissions.

The core benefits you get by using ec-H2O NanoClean include:

• Reduce Cost to Clean by eliminating chemical purchases.
• Increase productivity by allowing operators to clean up to three times longer.
• Enhance Health & Safety; certified by the NFSI to improve floor traction.
• Improve Facility Image by avoiding chemical residue that attracts dirt.
• NSF registration ensures safety in food and beverage handling environments.

Comprehensive after-sale service and maintenance for high uptime

For customers adopting automation, like the new AMRs, the service network is a critical part of the value, ensuring the technology delivers real, lasting results. Tennant Company emphasizes that its global field service network is the most extensive in the industry. This extensive support helps organizations scale up robotics alongside their existing teams. While specific service revenue percentages for 2025 aren't public, the company's quarterly revenues typically range between 22% to 28% of the total year, a segment that includes parts and service, which is key for recurring revenue and customer stickiness.

Broad portfolio of premium and mid-tier industrial cleaning solutions

Tennant Company's full-year net sales in 2024 reached $1,286.7 million, showing a 3.5% increase from 2023, supported by a diverse product line. They offer solutions across the spectrum, from premium, high-capacity machines to smaller, more accessible models. For instance, they launched the T291 small walk-behind scrubber in North America in September 2024, targeting small to mid-sized commercial spaces. This contrasts with the large-scale X6 ROVR, showing they cover various operational needs. The third quarter of 2025 saw net sales of $303.3 million, indicating continued activity across the portfolio.

Asset management and telematics solutions for fleet optimization

The value here is moving from reactive cleaning to data-driven, proactive operations. The autonomous machines, powered by platforms like BrainOS®, inherently capture performance data in real time. This enables enterprise-level fleet management tools for performance tracking and real-time obstacle detection and adaptive routing. This shift to Smart Cleaning allows facility leaders to monitor progress, make informed decisions, and align cleaning activity with actual site conditions, which is crucial when managing large, complex sites. The company's focus on data is part of its strategy to drive efficiency and margin expansion, as seen by the Q3 2025 Adjusted EBITDA Margin reaching 16.4%.

Finance: draft 13-week cash view by Friday.

Tennant Company (TNC) - Canvas Business Model: Customer Relationships

You're looking at how Tennant Company keeps its B2B customers locked in and serviced, which is key when you're selling complex, high-value mechanized equipment. The relationship structure is definitely layered, moving beyond just the initial sale.

The dedicated direct sales force is the spearhead for personalized solutions. Tennant Company directly sells its products in 21 countries, which is a focused approach to key markets, supported by a distributor network that spans over 100 nations. For context on the scale of business these channels handle, Q3 CY2025 net sales came in at $303.3 million. Looking at the first quarter of 2025, the Americas region, likely heavily reliant on direct sales, generated net sales of $197.3 million.

The move toward recurring revenue is centered on autonomous mobile robots (AMRs) through the Clean 360 model. The company has delivered over 10,000 robotic scrubbers worldwide by June 2025, serving more than 1,000 customers with these automated solutions. This segment is a growing part of the relationship structure, with AMRs accounting for 6% of net sales as of Q2 2025. Tennant Company outlined an AMR revenue target of $100 million (though this was noted as a 2027 goal in some reports, the stated target is the number we use).

Long-term service contracts and preventative maintenance are critical for maximizing equipment uptime, especially for high-cost assets. The value of these sticky relationships is hinted at by the prior year's backlog reductions, which often involve higher-margin products sold through direct channels. For instance, the Q3 2024 backlog reduction benefit was $33.0 million, and the Q2 2024 benefit was $26 million, both concentrated in these high-touch sales areas.

Technical support and training are non-negotiable for complex mechanized equipment, and the growing AMR fleet demands specialized attention. The company's commitment to customer success here is evidenced by the sheer volume of advanced units deployed. You need robust support when you have over 10,000 of your most advanced machines in the field.

Here's a quick look at some relevant 2025 financial context for these customer-facing operations:

The customer relationship strategy supports the overall financial health, as seen in the full-year guidance reaffirmation despite near-term sales softness. The focus remains on driving order growth, which hit 4.0% in Q2 2025, suggesting future revenue stability from these relationships.

The key elements supporting these relationships include:

• Direct sales presence in 21 countries.
• AMR fleet size exceeding 10,000 units.
• AMR segment contributing 6% of net sales (Q2 2025).
• Order rates increasing 2.0% in Q3 2025.
• Anticipated annual price growth of 50 to 100 basis points for 2025.

If onboarding for new autonomous units takes too long, churn risk definitely rises, so the technical support pipeline needs to be ready for the 1,000+ existing AMR customers. Finance: draft 13-week cash view by Friday.

Tennant Company (TNC) - Canvas Business Model: Channels

You're looking at how Tennant Company gets its cleaning solutions to customers; it's a dual approach mixing direct control with broad reach. Honestly, the structure shows a real commitment to managing key customer relationships directly.

The direct sales component is quite specific. Tennant Company deploys its own direct sales and service organization in 21 countries globally. This direct footprint is key, especially since prior periods showed that significant backlog benefits, like the $50 million benefit in the first quarter of 2024, were concentrated in higher-margin industrial equipment sold through these very direct channels.

For broader market penetration, the company relies on an extensive network of authorized third-party distributors. This network spans more than 100 countries, giving Tennant Company a massive global footprint beyond the 21 direct operation countries.

The channel mix is reflected in recent sales performance, where the mix of equipment versus parts and consumables matters. For instance, in the first quarter of 2025, equipment sales declined 9%, while parts and consumables declined 4.7%. This suggests the direct sales force, which handles large equipment sales, faced a steeper volume challenge than the consumables stream in that period.

Here's a quick look at how recent net sales stack up, which gives you a sense of the scale these channels are moving:

The company is actively managing its digital presence, particularly for the aftermarket business. While specific e-commerce revenue isn't broken out, the focus on parts and consumables is clear, as they saw a 4.7% decline in Q1 2025. Also, the Autonomous Mobile Robots (AMR) segment, which uses a subscription model bundling robots, software, and service, grew 30% year-over-year in Q4 2024 and represented 6% of net sales in Q2 2025, indicating a growing digital/subscription channel component.

Engagement through physical presence remains a channel tactic for Tennant Company:

• Industry trade shows are used for market visibility.
• Product demonstration events support the direct sales force.
• The company maintains an extensive global field service network.

To be fair, the gross margin performance in Q3 2025 at 42.7% shows the impact of channel mix, as the prior year's higher margins benefited from that direct-channel backlog reduction. Finance: draft 13-week cash view by Friday.

Tennant Company (TNC) - Canvas Business Model: Customer Segments

You're looking at the core groups Tennant Company serves with its cleaning solutions, and honestly, the data shows a clear split in how they generate their top line, even if the exact revenue percentage for each end-market is kept close to the vest.

Tennant Company sells to a diversified base globally, operating directly in 21 countries and utilizing a distributor network spanning more than 100 countries. Critically, no single customer accounts for more than 10% of consolidated net sales, which tells you their customer concentration risk is low.

The company's Q3 2025 net sales totaled $303.3 million. This revenue is generated across the various environments you listed, but the company specifically noted that weakness in Q3 2025 was primarily due to challenges in the industrial sector in North America.

Here's the quick math on how the Q3 2025 revenue broke down by the type of offering, which directly maps to the value delivered to these segments:

The focus on technology is clear, as Autonomous Mobile Robot (AMR) sales reached $75 million in 2024, with a goal to exceed $100 million annually by 2027. This points to a strong, growing subset of customers within the Industrial and Commercial segments prioritizing automation.

For context on where these customers are located, here are the net sales figures from the first quarter of 2025:

• Americas: $197.3 million
• EMEA: $76.0 million
• APAC: $16.7 million

Also, remember that Tennant Company has increased its quarterly cash dividend for the 54th consecutive year as of Q3 2025.

Tennant Company (TNC) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive Tennant Company's operations, which is key to understanding their profitability levers. Honestly, the cost structure is heavily weighted toward making and moving the physical cleaning equipment.

The biggest chunk of your costs comes from getting the product out the door, which is the Cost of Goods Sold (COGS). For the third quarter of 2025, the Cost of Sales was reported at $\text{173.9 million}$, based on net sales of $\text{303.3 million}$. This resulted in a Gross Profit of $\text{129.4 million}$, yielding a Gross Profit Margin of $\text{42.7\%}$ for the quarter. This margin improvement, up 30 basis points year-over-year, was achieved despite lower productivity and was supported by strategic pricing actions that countered inflationary pressures, including some related to tariffs.

Your Selling and Administrative (S&A) expenses are the overhead for running the business, separate from direct manufacturing costs. For Q3 2025, the S&A expense totaled $\text{96.6 million}$, which was an increase of $\text{3.9 million}$ compared to Q3 2024. Management noted that this increase was driven by continued ERP spend, legal contingency costs, and restructuring costs.

The investment in future efficiency is a major cost driver right now. You saw a significant, non-operational hit from the ERP modernization project. Specifically, the investment in the ERP project was $\text{14.0 million}$ during Q3 2025 alone, impacting cash flow. Separately, the portion of ERP spend that hit the income statement within S&A contributed to that $\text{96.6 million}$ total.

We also need to account for the external pressures impacting material and sourcing costs. The outline suggests an estimated impact from tariffs on 2025 costs of $\text{40 million}$. While the search results confirm Tennant Company is actively managing tariff pressures through pricing and supply-chain adjustments, this $\text{40 million}$ figure represents the required estimate for your model.

Innovation spending is a critical, forward-looking cost. Research and Development (R&D) expenses are dedicated to new product development, like the robotics platform. For the third quarter of 2025, R&D expense was $\text{10.5 million}$. Looking at the year-to-date trend, R&D spending for the nine months ended September 30, 2025, totaled $\text{30.0 million}$.

Here's a quick look at the key cost components for the third quarter of 2025:

You can see the expense breakdown clearly when you look at the income statement structure for the quarter:

• Net Sales: $\text{303.3 million}$.
• Cost of Sales: $\text{173.9 million}$.
• Selling and Administrative Expense: $\text{96.6 million}$.
• Research and Development Expense: $\text{10.5 million}$.
• Interest Expense, net: $\text{2.4 million}$.

The company is actively managing these costs, using pricing to offset headwinds and investing heavily in the ERP system to eventually realize efficiencies that should lower the S&A percentage of sales going forward. Finance: draft 13-week cash view by Friday.

Tennant Company (TNC) - Canvas Business Model: Revenue Streams

You're looking at how Tennant Company actually brings in the money, which is key for valuation, so let's break down the streams based on their late 2025 reporting. Honestly, it's a mix of big-ticket hardware and recurring services, which is a smart way to build a sticky customer base.

The full-year 2025 Net Sales guidance Tennant Company reaffirmed is right in the sweet spot, pegged at $1.23 billion at the midpoint. That's the top-line number we're working toward for the full twelve months, though recent quarters have shown some headwinds, like lapping prior-year backlog benefits.

Here's a look at the recent top-line performance to give you context for where those revenue streams are landing right now:

The core revenue drivers remain consistent with Tennant Company's established model. You see revenue coming from the sale of mechanized cleaning equipment, which includes their range of scrubbers, sweepers, and vacuums. This is the upfront capital expenditure for the customer.

Then you have the crucial recurring revenue components that analysts really like to see:

• Aftermarket sales of parts, consumables, and supplies.
• Revenue generated from equipment maintenance and repair services.
• Leasing and subscription fees, particularly from the Clean 360 AMR program.

That robotics piece is gaining traction, which is important for future revenue quality. In the second quarter of 2025, Autonomous Mobile Robot (AMR) sales accelerated to account for 6% of enterprise net sales. Plus, the cumulative number of robotic scrubbers deployed surpassed 10,000 units by that same point in the year. That subscription element, often structured as Equipment-as-a-Service (EaaS), helps smooth out the lumpiness of big equipment sales, so you want to watch that percentage grow.

To be fair, the recent quarter-over-quarter sales declines, like the 4.0% drop in Q3 2025, are partly explained by the company lapping significant backlog reductions from the prior year. Still, underlying order demand growth, reported at 4% year-over-year in Q2 2025, suggests the demand for their products and services is there, even if the final sales recognition is choppy. Finance: draft 13-week cash view by Friday.