CMI · 10-Q · 2026Q2 · Full report

Operating Expense Trends

CUMMINS INC · 2026-08-04 · Importance 24 · Surprise 14

Selling, general and administrative expense increased $114 million in the second quarter and $188 million in the first half of 2026, with expense ratios rising 0.4 and 0.5 percentage points to 9.4% and 9.7%. The increases were primarily caused by higher compensation expenses and increased consulting costs. Research, development and engineering expense increased $28 million in the quarter and $42 million year to date, primarily because of higher compensation expenses, while remaining 4.1% and 4.2% of sales. Research spending continued to target emissions-compliant products, diesel and natural-gas fuel economy, and electrified power systems including battery and electric-power technologies.

Key facts

• Three months ended June 30, 2026 cost of sales: $6,992 million (increase $630 million versus prior year) source
• Other operating expense, net for the six months ended June 30, 2026 increased by $227 million primarily due to the loss on sale of business and settlement of current and future customer obligations source
• Provision for base warranties as a percentage of sales for three and six months ended June 30, 2026: 1.9% and 1.9% source
• Selling, general and administrative expenses increased $114 million for the three months ended June 30, 2026 versus 2025 source
• Research, development and engineering expenses increased $28 million for the three months ended June 30, 2026 versus 2025 source