Cummins reported its third quarter on 5 November, and the part of the business that builds large engines and generator sets had its best quarter so far. Power Systems sales were $2,289 million, 15 percent more than a year earlier, and the segment's EBITDA rose to 25.4 percent of sales from 22.9 percent. Chief executive Jennifer Rumsey put it down to data center construction in the release: demand for power generation equipment, she said, is exceptionally strong.
Where The Growth Came From
Inside the segment, power generation sales were $1,557 million against $1,280 million in the same quarter of 2025, and generator technologies (the alternator business) rose to $214 million. Industrial engines were slightly down. According to the release, North American segment revenue grew 20 percent and international revenue 11 percent, led by data center demand in the US, China and Asia Pacific.
On the earnings call Rumsey added more detail. North American power generation revenue was up 22 percent, helped by manufacturing capacity that came online at the end of 2025, and power generation sales in China rose 42 percent. Finance chief Mark Smith said international data center orders are now roughly level with domestic ones, with China and Southeast Asia accelerating fastest.
For the whole company, revenue was $9.4 billion, up 13 percent, and EBITDA was a record 18.9 percent of sales. The full-year revenue guidance was trimmed to about 10 percent growth, mostly because of weaker pickup truck demand in North America, not because of power generation.
Booked Out Into 2028
The more telling numbers are about time. Rumsey said orders for the larger gensets now extend into the second half of 2028, and that Cummins has contractual commitments with some hyperscalers that reach beyond its firm order board. Order intake in the quarter was higher than the company had expected. Customers are also turning to the next size down, she said, because the larger configurations remain constrained.
Supply is the brake. A supplier problem in the quarter pushed about $200 million of revenue into the fourth quarter, Smith said, and Cummins expects to recover most of those shipments by year-end. Capacity is to step up in 2027, with most of the increase in 2028, for both backup and prime power duty. A 130-litre natural gas engine is in development, with pilot units planned for 2028 and meaningful revenue not before 2029; the 78-litre gas engine is already in production. For 2026 the company now guides Power Systems revenue up 15 to 18 percent.
Smaller Sets, More Of Them
When the largest gensets are sold out, a project does not wait; it changes the layout. Two smaller sets in place of one large one means more units in the yard, more exhaust stacks, more cooling to arrange and more connections to the switchgear. It also changes the service picture for the site. Anyone writing a specification for a data center due in 2028 should ask early which frame sizes are still on offer for that date, and plan the site around the answer. Caterpillar reported a similar picture a few days earlier, as covered in our report on its quarter.
Sources: Cummins (SEC filing), The Motley Fool (call transcript)
