Cummins makes diesel engines, power generators, and the parts that go inside them. It sells those products to truck makers like PACCAR, Daimler, and Stellantis, to construction and mining equipment makers, and to data centers that need reliable backup power. When a truck manufacturer like PACCAR builds a heavy-duty rig, Cummins often supplies the engine, the turbocharger, the exhaust cleanup system, and the electronic controls. Cummins also runs 234 distribution locations across 90 countries that fix engines, stock spare parts, and sign up new customers. That layered structure, where Cummins sells a product and then services it for years, is how the company earns money at multiple stages of the same engine's life. The diagram below traces where the money goes.
Five years of financial data tell a story of growth followed by plateau. Revenue climbed from $24.0 billion in 2021 to $34.1 billion in 2023, then held almost exactly flat through 2024 before slipping slightly to $33.7 billion in 2025. That revenue stall arrived just as the company was absorbing a $2.0 billion emissions settlement payment and writing down its hydrogen business. Free cash flow, which is the cash left after the company pays for its buildings and equipment, swung sharply because of those one-time costs.
One encouraging signal runs underneath the revenue plateau. Gross margin, the share of each sales dollar left after paying for materials and manufacturing, has risen every single year: from 23.7 percent in 2021 to 25.3 percent in 2025. That slow but steady climb suggests Cummins has some ability to raise prices or reduce costs even when total sales are not growing. The Power Systems segment is a key reason why. Power Systems grew sales 16 percent in 2025, driven by data center demand for generators, and its share of total company profit jumped sharply.
The truck engine business told a different story. Heavy-duty truck shipments fell 23 percent in 2025 compared to 2024. Medium-duty truck and bus shipments fell 10 percent. Those two categories together account for most of the Engine segment, which shrank from $11.7 billion in sales to $10.9 billion in a single year. Cummins is not shrinking overall because data center power demand is growing fast enough to partially offset the truck cycle downturn, but the company's largest revenue streams still move with the trucking economy.
The risks facing Cummins are specific and documented. The most immediate is the emissions settlement. Cummins agreed to pay $2.0 billion to resolve claims that it cheated on emissions tests for diesel engines used in RAM 2500, RAM 3500, and Nissan Titan pickup trucks. The cash went out the door in the second quarter of 2024. Ongoing lawsuits from customers and shareholders related to those violations are still unresolved, meaning the financial and reputational cost is not fully closed.
A second risk sits in China. Nearly half of Cummins' profits from joint ventures come from three Chinese engine partnerships: Chongqing Cummins, Dongfeng Cummins, and Beijing Foton Cummins. Cummins does not control these businesses directly. If those ventures perform poorly, or if geopolitical tension disrupts the relationships, Cummins cannot simply step in and fix them. A third risk is structural. Countries including China, India, and Germany plan to ban diesel-powered vehicles in the future. If those bans expand or accelerate, the diesel engine market that generates most of Cummins' revenue shrinks permanently.
Cummins is still pursuing electric powertrain technology through Accelera, including a 30 percent stake in Amplify Cell Technologies, a battery cell joint venture with Daimler Truck and PACCAR that is not expected to begin production until 2028. Cummins has already contributed $412 million to that venture and has up to $418 million more to contribute. That is a meaningful cash commitment to a business that generates no revenue yet, in a market where government incentives have already been cut once.
Cummins issued $2.0 billion of new senior unsecured notes in May 2025 to manage its balance sheet. It also raised its quarterly dividend 10 percent to $2.00 per share in July 2025, signaling confidence in cash generation. Operating cash flow recovered strongly to $3.6 billion in 2025, up from $1.5 billion in 2024, largely because the $1.9 billion settlement payment that crushed 2024 cash flow did not repeat. The question is whether that recovery is a true rebound or a one-year bounce.
The data center power generation business is the most important new growth signal in this story. Power Systems segment sales rose 16 percent in 2025, and the company says demand for data center products extends six to eight quarters into the future. That is a genuinely different demand profile from cyclical trucking. If data center power generation continues to grow, it could become a meaningful counterweight to the diesel truck cycle. But it has not yet been tested through a full downturn in technology spending.