Business model breakdowns: ag equipment dealer Titan Machinery, with Shane Thomas

So Shane, maybe starting with you, like what is Titan Machinery? Give us a bit of the high level.

Yeah, so Titan Machinery is the largest CNH dealership in the world.

They have about $2.5 billion in revenue, primarily coming from selling agricultural equipment and the parts and services support that along with some construction revenue as well.

And they sell products like Case IH and New Holland and Case Construction equipment.

They're based in the United States, but they have about 144 locations total.

with 90 of those in the Midwest US, some in Eastern Europe, as well as some locations in Australia too.

They are one of the largest dealers for CNH and one of the only publicly traded ones.

And so they give a good lens of margins, revenues, business segments, and the dynamics around ag equipment sales and ag equipment dealers.

And a lot of that's why we wanted to talk about dealers.

I've heard many conversations that just talk about equipment or equipment companies.

And there's not enough nuance in who makes it, who sells it, that kind of thing.

So pretty interesting area to dig into.

Mackie, why were you excited to talk about dealers?

I just, like, it's the aggest of ag, right? Like, equipment dealership is just where it all happens, where the big iron gets moved.

And in terms of business model, you know, it's such a cornerstone thing.

of how economic value flows through agriculture.

I mean, we talk a lot about ag retail as well, but I think between equipment dealerships and ag retail in the end, that's where the rubber really meets the road in terms of economic value flows.

So I think most people think like a dealer is on a tractor shop, like a physical place that you go in and buy a tractor.

What is it actually, Shane?

I mean, that's one part of it, I guess.

The dealership is where the equipment from the ag equipment manufacturers either sits on a lot, that's where it transacts with the farmers.

And so you have the dealers that actually have customer relationships with the farmers and sell pieces of new and used equipment, whether that's a combine, whether that's a tractor, whether that's some sort of tillage implement, they are the ones that sell that equipment to the farmer.

And that's kind of the core of the pillar foundation of their entire business.

But then on top of that, there are three other segments that support it and drive it.

And one of those is parts.