Services: $24 Billion Through the DealersWide moat

Caterpillar (CAT) — moat facet

Parts and service bring in about $24 billion a year through Caterpillar's dealers, a third of the company, and they keep coming when new machine sales stop.

The dealer network's real product is not the machine but everything after it. Caterpillar's services revenues totalled $24 billion in 20251, against total sales and revenues of $67.589 billion2, about 36% of the company3. The target is $30 billion by 20304.

Caterpillar services revenues2025 services revenues$24bn2030 target$30bnShare of 2025 sales and revenuesabout 36%Growth needed to reach targetabout 4.6% a yearExcludesmost Financial Products revenuesCaterpillar Q4 2025 call; Barclays fireside deck, Feb 2026; share and growth calculated
Six billion dollars of services to add by 2030.

Caterpillar defines services revenues as aftermarket parts and other service-related revenues, excluding most Financial Products revenues, discontinued products and captive dealer services5. In other words, it is mostly parts sold to dealers, who fit them to machines already working in the field.

The installed base makes it possible. Caterpillar reported more than 1.6 million connected and reporting assets at the end of 2025, with a target of 2 million by 2030, and 191,000 tech-enabled machines against a target of 500,0006. A connected machine tells the dealer when a part is wearing out, which turns a repair into a scheduled sale.

The network is what keeps this revenue with Caterpillar. A contractor in a remote region buys genuine parts because the Cat dealer is the one that stocks them and sends the mechanic, and the dealer's business depends on it. That loop is why Caterpillar's volume can fall in a downturn while parts keep flowing.

The dealers' service businesses are growing with the machines. Management reported in January 2026 that full-year sales to users in Construction Industries grew 5% in 2025, toward a 2030 goal of 1.25 times the 2024 level7. Each machine sold to a user adds to the fleet that will need parts for the next decade or more.

The services figure, reported annually, is the one to watch. Reaching the $30 billion target needs growth of about 4.6% a year from 20258. Services falling behind that pace while machine sales boom would mean the network is selling more iron and capturing less of its life.

Moat trajectory: Widening

Services $24bn in 2025; target $30bn by 2030; connected assets above 1.6 million.

The number that tests this moat
Moat Explorer calc
Services share of sales and revenues
About 36% ($24bn of $67.6bn, 2025)

The annuity share; it falls when machine booms outrun services, and should rise when they end.

How it's calculated: Services revenues of $24 billion (Q4 2025 call) divided by total sales and revenues of $67,589 million (FY2025 10-K).
Source: Moat Explorer calculation from Caterpillar filings ↗
⚠ Threats to the moat
⚠ THREAT 01
Services Need a Busy Fleet
Caterpillar's parts business is steadier than its machine business, but it still needs the machines to be working.
References
  1. ReportedCaterpillar's services revenues totalled $24 billion in 2025, against total sales and revenues of $67.589 billion, about 36% of the company.
    Caterpillar fourth-quarter 2025 earnings call transcript (company PDF) - services revenues, tariff headwinds, power generation, autonomous trucks and the AIP order. — Q4 2025 · publ. 29 January 2026 · source ↗
  2. ReportedCaterpillar's services revenues totalled $24 billion in 2025, against total sales and revenues of $67.589 billion, about 36% of the company.
    Caterpillar Form 10-K for fiscal 2025 - Item 1 business: history, products, Cat Financial, employees and order backlog. — FY2025 · publ. 13 February 2026 · source ↗
  3. Moat Explorer calcCaterpillar's services revenues totalled $24 billion in 2025, against total sales and revenues of $67.589 billion, about 36% of the company.
    Moat Explorer calculation from Caterpillar's reported figures ($ millions unless stated). Dealers: 41 + 109 = 150 (2025); 43 + 113 = 156 (2022); 46 + 119 = 165 (2019). Segment margins (segment profit / total segment sales, FY2025 10-K basis): Construction Industries 6,975 / 27,418 = 25.4% (2023), 6,165 / 25,455 = 24.2% (2024), 4,675 / 25,060 = 18.7% (2025); Resource Industries 2,836 / 13,669 = 20.7%, 2,538 / 12,471 = 20.4%, 1,988 / 12,474 = 15.9%; Power & Energy 4,936 / 28,001 = 17.6%, 5,736 / 28,854 = 19.9%, 6,418 / 32,201 = 19.9%; Financial Products 909 / 3,785 = 24.0%, 932 / 4,053 = 23.0%, 966 / 4,220 = 22.9%, 590 / 3,044 = 19.4% (2020). Recast (Rail in Resource Industries): 2,151 / 15,920 = 13.5% (2025), 2,676 / 15,745 = 17.0% (2024); Power & Energy 6,256 / 28,624 = 21.9%. Construction Industries H1 2026 3,482 / 15,507 = 22.5%. Implied Rail: sales 15,920 - 12,474 = 3,446 and profit 2,151 - 1,988 = 163, 163 / 3,446 = 4.7% (2025); sales 15,745 - 12,471 = 3,274 and profit 2,676 - 2,538 = 138 (2024). Power generation 10,275 / 3,963 = 2.6 times (2020-2025); 10,275 / 67,589 = 15.2% of sales and revenues; three times the 2024 base 7,756 x 3 = 23,268. Oil and gas 7,502 / 27,143 = 27.6% of Power & Energy external sales; 7,502 / 3,701 = 2.0 times. Services 24 / 67.589 = 35.5%; (30 / 24)^(1/5) - 1 = 4.6% a year. Backlog 72.1 / 30.0 = 2.4 times; long end 29.2 / 19.3 - 1 = 51%. Customer advances 4,777 / 3,314 - 1 = 44%. Price realization H1 2026 426 + 595 = 1,021; 2024 against 2023 1,238 / 5,596 = 22%. Volume H1 2026 2,318 + 3,113 = 5,431. Capex excluding leased equipment 2,821 / 1,597 - 1 = 77%. Pre-tax return on average MP&E net assets (MP&E adjusted operating profit / average MP&E net assets): 4,675 / 20,070 = 23.3% (2020), 6,453 / 19,662 = 32.8% (2021), 8,656 / 19,841 = 43.6% (2022), 13,439 / 19,450 = 69.1% (2023), 13,246 / 19,999 = 66.2% (2024), 11,327 / 21,417 = 52.9% (2025). Profit 8,884 / 6,147 - 1 = 44.5% and diluted EPS 18.81 / 10.26 - 1 = 83.3% (2018-2025). Dividends paid 2,749 / profit 8,884 = 30.9%. Return on average equity 8,884 / ((19,494 + 21,318) / 2) = 43.5%. Price to earnings at year end (market capitalisation $bn / profit $bn): 39.57 / 2.512 = 15.8 (2015); 93.75 / 0.754 = 124.3 (2017); 74.98 / 6.147 = 12.2 (2018); 81.62 / 6.093 = 13.4 (2019); 98.88 / 2.998 = 33.0 (2020); 111.83 / 6.489 = 17.2 (2021); 124.67 / 6.705 = 18.6 (2022); 150.52 / 10.335 = 14.6 (2023); 175.14 / 10.792 = 16.2 (2024); 268.09 / 8.884 = 30.2 (2025); trailing 370.15 / 10.844 = 34.1. Share price 805.25 / 1,073.46 - 1 = -25%. Trailing twelve months to June 2026: sales and revenues 67,589 - 30,818 + 37,958 = 74,729; profit 8,884 - 4,182 + 6,142 = 10,844; diluted EPS 18.81 - 8.82 + 13.23 = 23.22. Debt at 30 June 2026 5,046 + 35 + 8,026 + 10,655 + 21,384 = 45,146; at 31 December 2025 5,514 + 35 + 7,085 + 10,678 + 20,018 = 43,330; Financial Products debt 5,514 + 7,085 + 20,018 = 32,617, 32,617 / 43,330 = 75%. Financial Products segment assets 41,476 / 64,392 = 64%. Downturns: 38,537 / 47,011 - 1 = -18% (2016); 41,748 / 53,800 - 1 = -22% (2020). Construction Industries Asia/Pacific external sales 3,783 / 4,390 - 1 = -14%; North America share 14,064 / 24,800 = 57%. Shares of 2025 sales and revenues of 67,589: Construction Industries 24,800 = 36.7%; Resource Industries 12,185 = 18.0%; Power & Energy 27,143 = 40.2%; Financial Products 4,220 = 6.2%; Construction and Resource together (24,800 + 12,185) / 67,589 = 54.7%. Segment external sum 27,143 + 24,800 + 12,185 + 4,220 = 68,348 against 67,589 (difference 759, All Other +46 and corporate items -805); 2024 25,344 + 12,100 + 24,088 + 4,053 = 65,585 against 64,809 (776); 2023 27,294 + 13,329 + 23,355 + 3,785 = 67,763 against 67,060 (703). Power & Energy share 27,143 / 68,348 = 39.7%. 2030 range: 64,809 x 1.06^6 = 91,933; 64,809 x 1.09^6 = 108,691. RPMGlobal 733 / 67,589 = 1.1%. Autonomous trucks 827 / 690 - 1 = 20%; 690 x 3 = 2,070. Tech-enabled machines 500 / 191 = 2.6 times. Latin America employees 22,300 - 19,700 = 2,600 (EAME 16,700 - 15,900 = 800; Asia/Pacific 26,900 - 25,300 = 1,600; North America 52,100 - 52,000 = 100). Profit 2025 8,884 / 10,792 - 1 = -17.7%. Cost of goods sold 44,752 / 40,199 - 1 = 11.3%. Financial Products segment assets 41,476 / 36,925 - 1 = 12.3%. Power generation growth 7,756 / 6,362 - 1 = 21.9%, 10,275 / 7,756 - 1 = 32.5%. Engine capex at 4% to 5% of 2025 machinery, power and energy sales of 63,980: 2,559 to 3,199. Earnings implied by forward and trailing P/E 34.70 / 28.01 - 1 = 24%. Analyst target 975.61 / 805.25 - 1 = 21%. Segment capex 2025: Construction Industries 358 + Resource Industries 626 = 984, against Financial Products 1,341. Power & Energy Q2 2026 external sales: North America 4,182 against other regions 373 + 1,348 + 892 = 2,613 - revenue mix, segment shares and concentration. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Caterpillar's Forms 10-K, 10-Q, results releases, the March 2026 recast exhibit, the February 2026 Barclays deck, the earnings calls and market data; operands shown in the source line.
  4. ReportedThe target is $30 billion by 2030.
    Caterpillar presentation for the Barclays fireside chat, 18 February 2026 - Investor Day targets, services, MP&E free cash flow, share count, buyback prices and the OPACC reconciliation. — 2019-2025 · publ. 18 February 2026 · source ↗
  5. ReportedCaterpillar defines services revenues as aftermarket parts and other service-related revenues, excluding most Financial Products revenues, discontinued products and captive dealer services.
    Caterpillar presentation for the Barclays fireside chat, 18 February 2026 - Investor Day targets, services, MP&E free cash flow, share count, buyback prices and the OPACC reconciliation. — 2019-2025 · publ. 18 February 2026 · source ↗
  6. ReportedCaterpillar reported more than 1.6 million connected and reporting assets at the end of 2025, with a target of 2 million by 2030, and 191,000 tech-enabled machines against a target of 500,000.
    Caterpillar presentation for the Barclays fireside chat, 18 February 2026 - Investor Day targets, services, MP&E free cash flow, share count, buyback prices and the OPACC reconciliation. — 2019-2025 · publ. 18 February 2026 · source ↗
  7. ReportedManagement reported in January 2026 that full-year sales to users in Construction Industries grew 5% in 2025, toward a 2030 goal of 1.25 times the 2024 level.
    Caterpillar fourth-quarter 2025 earnings call transcript (company PDF) - services revenues, tariff headwinds, power generation, autonomous trucks and the AIP order. — Q4 2025 · publ. 29 January 2026 · source ↗
  8. Moat Explorer calcReaching the $30 billion target needs growth of about 4.6% a year from 2025.
    Moat Explorer calculation from Caterpillar's reported figures ($ millions unless stated). Dealers: 41 + 109 = 150 (2025); 43 + 113 = 156 (2022); 46 + 119 = 165 (2019). Segment margins (segment profit / total segment sales, FY2025 10-K basis): Construction Industries 6,975 / 27,418 = 25.4% (2023), 6,165 / 25,455 = 24.2% (2024), 4,675 / 25,060 = 18.7% (2025); Resource Industries 2,836 / 13,669 = 20.7%, 2,538 / 12,471 = 20.4%, 1,988 / 12,474 = 15.9%; Power & Energy 4,936 / 28,001 = 17.6%, 5,736 / 28,854 = 19.9%, 6,418 / 32,201 = 19.9%; Financial Products 909 / 3,785 = 24.0%, 932 / 4,053 = 23.0%, 966 / 4,220 = 22.9%, 590 / 3,044 = 19.4% (2020). Recast (Rail in Resource Industries): 2,151 / 15,920 = 13.5% (2025), 2,676 / 15,745 = 17.0% (2024); Power & Energy 6,256 / 28,624 = 21.9%. Construction Industries H1 2026 3,482 / 15,507 = 22.5%. Implied Rail: sales 15,920 - 12,474 = 3,446 and profit 2,151 - 1,988 = 163, 163 / 3,446 = 4.7% (2025); sales 15,745 - 12,471 = 3,274 and profit 2,676 - 2,538 = 138 (2024). Power generation 10,275 / 3,963 = 2.6 times (2020-2025); 10,275 / 67,589 = 15.2% of sales and revenues; three times the 2024 base 7,756 x 3 = 23,268. Oil and gas 7,502 / 27,143 = 27.6% of Power & Energy external sales; 7,502 / 3,701 = 2.0 times. Services 24 / 67.589 = 35.5%; (30 / 24)^(1/5) - 1 = 4.6% a year. Backlog 72.1 / 30.0 = 2.4 times; long end 29.2 / 19.3 - 1 = 51%. Customer advances 4,777 / 3,314 - 1 = 44%. Price realization H1 2026 426 + 595 = 1,021; 2024 against 2023 1,238 / 5,596 = 22%. Volume H1 2026 2,318 + 3,113 = 5,431. Capex excluding leased equipment 2,821 / 1,597 - 1 = 77%. Pre-tax return on average MP&E net assets (MP&E adjusted operating profit / average MP&E net assets): 4,675 / 20,070 = 23.3% (2020), 6,453 / 19,662 = 32.8% (2021), 8,656 / 19,841 = 43.6% (2022), 13,439 / 19,450 = 69.1% (2023), 13,246 / 19,999 = 66.2% (2024), 11,327 / 21,417 = 52.9% (2025). Profit 8,884 / 6,147 - 1 = 44.5% and diluted EPS 18.81 / 10.26 - 1 = 83.3% (2018-2025). Dividends paid 2,749 / profit 8,884 = 30.9%. Return on average equity 8,884 / ((19,494 + 21,318) / 2) = 43.5%. Price to earnings at year end (market capitalisation $bn / profit $bn): 39.57 / 2.512 = 15.8 (2015); 93.75 / 0.754 = 124.3 (2017); 74.98 / 6.147 = 12.2 (2018); 81.62 / 6.093 = 13.4 (2019); 98.88 / 2.998 = 33.0 (2020); 111.83 / 6.489 = 17.2 (2021); 124.67 / 6.705 = 18.6 (2022); 150.52 / 10.335 = 14.6 (2023); 175.14 / 10.792 = 16.2 (2024); 268.09 / 8.884 = 30.2 (2025); trailing 370.15 / 10.844 = 34.1. Share price 805.25 / 1,073.46 - 1 = -25%. Trailing twelve months to June 2026: sales and revenues 67,589 - 30,818 + 37,958 = 74,729; profit 8,884 - 4,182 + 6,142 = 10,844; diluted EPS 18.81 - 8.82 + 13.23 = 23.22. Debt at 30 June 2026 5,046 + 35 + 8,026 + 10,655 + 21,384 = 45,146; at 31 December 2025 5,514 + 35 + 7,085 + 10,678 + 20,018 = 43,330; Financial Products debt 5,514 + 7,085 + 20,018 = 32,617, 32,617 / 43,330 = 75%. Financial Products segment assets 41,476 / 64,392 = 64%. Downturns: 38,537 / 47,011 - 1 = -18% (2016); 41,748 / 53,800 - 1 = -22% (2020). Construction Industries Asia/Pacific external sales 3,783 / 4,390 - 1 = -14%; North America share 14,064 / 24,800 = 57%. Shares of 2025 sales and revenues of 67,589: Construction Industries 24,800 = 36.7%; Resource Industries 12,185 = 18.0%; Power & Energy 27,143 = 40.2%; Financial Products 4,220 = 6.2%; Construction and Resource together (24,800 + 12,185) / 67,589 = 54.7%. Segment external sum 27,143 + 24,800 + 12,185 + 4,220 = 68,348 against 67,589 (difference 759, All Other +46 and corporate items -805); 2024 25,344 + 12,100 + 24,088 + 4,053 = 65,585 against 64,809 (776); 2023 27,294 + 13,329 + 23,355 + 3,785 = 67,763 against 67,060 (703). Power & Energy share 27,143 / 68,348 = 39.7%. 2030 range: 64,809 x 1.06^6 = 91,933; 64,809 x 1.09^6 = 108,691. RPMGlobal 733 / 67,589 = 1.1%. Autonomous trucks 827 / 690 - 1 = 20%; 690 x 3 = 2,070. Tech-enabled machines 500 / 191 = 2.6 times. Latin America employees 22,300 - 19,700 = 2,600 (EAME 16,700 - 15,900 = 800; Asia/Pacific 26,900 - 25,300 = 1,600; North America 52,100 - 52,000 = 100). Profit 2025 8,884 / 10,792 - 1 = -17.7%. Cost of goods sold 44,752 / 40,199 - 1 = 11.3%. Financial Products segment assets 41,476 / 36,925 - 1 = 12.3%. Power generation growth 7,756 / 6,362 - 1 = 21.9%, 10,275 / 7,756 - 1 = 32.5%. Engine capex at 4% to 5% of 2025 machinery, power and energy sales of 63,980: 2,559 to 3,199. Earnings implied by forward and trailing P/E 34.70 / 28.01 - 1 = 24%. Analyst target 975.61 / 805.25 - 1 = 21%. Segment capex 2025: Construction Industries 358 + Resource Industries 626 = 984, against Financial Products 1,341. Power & Energy Q2 2026 external sales: North America 4,182 against other regions 373 + 1,348 + 892 = 2,613 - segment margins, growth and price realization. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Caterpillar's Forms 10-K, 10-Q, results releases, the March 2026 recast exhibit, the February 2026 Barclays deck, the earnings calls and market data; operands shown in the source line.
Sources
Generated September 25, 2026