How Does Deere Company Work?

StarFire guidance, AutoTrac, variable-rate tools (e.g., See & Spray), JDLink connectivity, and Operations Center analytics link machines, fields, and prescriptions to measurable economics.

• Machines ship tech-ready; guidance converts passes into geospatial data and prescriptions.
• Dealers convert data into uptime, parts sales, and residual-value protection, strengthening customer loyalty.
• Precision systems deliver fewer inputs per acre and higher yields; published case studies show single-digit to low-double-digit input savings and yield uplifts depending on crop and region.
• Deere Financial underpins equipment affordability and supports aftermarket revenue and resale values.

Trade‑ins, dealer remarketing and used unit sales help stabilize residual values and support new unit velocity; Deere influences floorplan and remarketing economics to protect margins.

• Production & Precision Agriculture and Construction & Forestry made up the majority of equipment net sales in 2023.
• North America typically accounts for roughly 55–60% of consolidated sales, with growth in Europe and Latin America.
• FY2024 showed normalization after the 2021–2023 upcycle as lower commodity prices and higher rates tempered demand, shifting mix toward parts and services resilience.
• Monetization expansion via tiered connected features, bundles (iron + precision + finance) and cross‑selling enhances lifetime customer value.

Scale in large agriculture and premium construction segments funds R&D intensity and component leverage; connected fleets generate proprietary data that improves products and supports aftermarket revenue.

• Brand and dealer density drive distribution and high residual values
• Integrated hardware, software and services increase customer lock-in and recurring revenue
• R&D scale supports precision and autonomy advances (See & Spray, ExactShot)
• Data from connected fleets enhances product cycles and Deere financial performance

Principal risks span macro cyclicality, financing headwinds, tech competition, regulation, supply volatility, and geopolitics.

• Cyclical exposure: farm incomes and construction starts drive demand; historical tractor aftermarket and new-equipment cycles can swing revenue by double digits year-over-year.
• Financing & rates: elevated interest rates raise financing costs and lower approval rates for dealer loans and retail finance, pressuring unit sales.
• Competitive tech: CNH, AGCO and OEMs accelerating autonomy and precision offerings could compress Deere equipment pricing and software share.
• Regulatory & Right to Repair: evolving repairability rules and data-access mandates could affect software monetization and dealer models.
• Supply-chain & component risks: semiconductor and specialty component shortages can delay production and inflate costs.
• Transition risks: rapid shifts to electrification, hydrogen, or new telematics standards require capital and create retrofit/aftermarket uncertainty.
• Currency & geopolitics: foreign-exchange swings and trade restrictions impact margins and regional profitability.

Deere is executing on precision adoption, autonomy-ready platforms, connected services via Operations Center, and selective electrification to raise recurring revenue per machine and smooth cyclicality.

• Recurring revenue: management targets higher penetration of subscription and after-sales services—software, telematics, parts and dealers—to increase margin stability and lifetime value.
• Autonomy & precision: continued investment in autonomy-ready tractors, sprayers and construction machines to capture premium pricing and labor-constrained demand.
• Electrification pathway: pilots and platform-level electrification/hybridization in select classes to meet emissions trends while managing CAPEX intensity.
• Dealer-enabled services: deepen dealer service offerings and finance penetration to protect unit sell-through and parts loyalty.
• Capital discipline: focus on cash conversion and buybacks/dividend policy to balance investment in tech with shareholder returns.
• Revenue mix target: expand parts, software and financing revenue per machine to reduce reliance on new-unit cyclicality and compound margins over a multi-year horizon.