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Deere’s construction and compact-equipment businesses broaden its precision-technology story, but they have not displaced agriculture as the company’s largest equipment business. Fiscal 2025 sales show a meaningful construction platform—not proof yet that it will materially improve recurring software revenue, margins, or resilience through business cycles.
What Deere’s fiscal 2025 mix says about the shift
Deere reports equipment operations in three segments: Production & Precision Agriculture, Small Agriculture & Turf, and Construction & Forestry. Its fiscal 2025 net sales mix shows construction is substantial, while agriculture remains larger overall:
| Equipment segment | Fiscal 2025 net sales | Share of equipment-operations net sales |
|---|---|---|
| Production & Precision Agriculture | $17.311 billion | 45% |
| Small Agriculture & Turf | $10.224 billion | 26% |
| Construction & Forestry | $11.382 billion | 29% |
These are Deere & Company figures for fiscal 2025 equipment-operations net sales, as reported in its 2025 Annual Report. The two agriculture segments together represented 71% of equipment-operations sales. Construction & Forestry is therefore large enough to extend the company’s technology proposition to another customer base, but its sales share does not support a claim that Deere has shifted away from agriculture.
How the technology story extends into construction
Compact machines are one part of a wider segment
Deere lists skid steers, compact excavators, compact wheel loaders, and compact track loaders among its compact-construction products. But Construction & Forestry is not simply a small-equipment business: it also includes large earthmoving and forestry equipment and Wirtgen roadbuilding equipment. The construction technology narrative spans that broader portfolio.
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Named offerings connect precision, automation, safety, and operations
In its annual report, Deere names SmartWeigh, Smart Grade, machine and system automation, SmartDetect, and John Deere Operations Center among technologies addressing construction customers’ needs. The company frames these offerings around challenges such as jobsite safety, skilled-labor shortages, volatile input costs, rework, uptime, and environmental footprint. These are stated purposes and intended benefits—not quantified proof of productivity gains or customer returns.
Deere also identifies roadbuilding systems including Wirtgen Performance Tracker, Mill Assist, Level Pro, Vögele Roadscan, Smart Compact, WITOS Paving, and Spective Connect. The range supports a broader interpretation of the strategy: applying connected and precision capabilities across equipment types and work sites, rather than merely adding compact machines.
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Autonomy signals ambition, not yet measured impact
At CES 2025, Deere announced autonomous machines intended for customer uses in construction and commercial landscaping as well as agriculture. The announcement is evidence that Deere is pursuing technology across categories; it does not establish widespread commercial deployment, customer adoption, or a financial contribution. Deere’s investor-relations materials describe its direction as a Smart Industrial strategy built around an integrated technology stack (Deere Investor Relations), but the strategic framing alone cannot answer how much value construction technology is producing.
Why precision equipment does not automatically mean software-like revenue
Deere says software-as-a-service (SaaS) revenue did not represent a significant percentage of fiscal 2025 revenue. That qualification matters: connected features, automation, and precision systems may strengthen the equipment offering without yet making the business materially dependent on recurring software sales.
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The company describes aftermarket precision technology and retrofit solutions as available through its dealer network, with connected-machine support through Operations Center. It also says many service parts are proprietary. Those channels and parts may be relevant to customer retention and lifecycle economics, but Deere’s reported materials do not quantify their contribution to construction revenue or margins. The presence of connected tools is not, by itself, evidence of software-scale monetization or improved earnings quality.
Construction adds a different set of business-cycle exposures
Construction & Forestry demand is influenced by residential, commercial, and public construction; infrastructure investment; economic conditions and interest rates; trade-policy uncertainty; government spending; credit; and relevant commodity prices, according to Deere’s annual report. Agriculture demand, by contrast, is tied more directly to farm economics. A larger construction technology platform can diversify the sources of demand, but it does not make Deere immune to cyclical downturns or financing conditions.
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Deere reported a Construction & Forestry backlog of $3.8 billion at November 2, 2025, compared with $2.2 billion at October 27, 2024. Those are dated backlog measures from the 2025 annual report, not a forecast of revenue recognition; timing, cancellations, and subsequent orders affect what ultimately becomes sales.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What would show that the narrative is changing financially?
Deere’s annual report describes a persistent trend: “Deeper integration of technology into equipment to enable customers to do more with less remains a persistent market trend.” The strategic direction is clear. Whether construction and small equipment reshape the investment case depends on evidence beyond product lists and announcements, including:
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- Whether customers adopt the named precision, automation, and connected systems at meaningful scale.
- Whether Deere can show measurable customer value and durable economics from those systems, rather than only describing intended benefits.
- Whether technology contributes materially to construction margins or recurring revenue over time.
- Whether the construction business sustains that contribution across its distinct demand cycles.
Fiscal 2025 establishes a meaningful construction business and a technology portfolio that reaches beyond agriculture. It does not establish that this expansion will offset agricultural cyclicality, materially improve margins, or create significant recurring software revenue. Deere’s precision-tech narrative is broader; the financial transformation remains unproven.
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