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Precision TechnologyNarrow moat

Deere & Company (DE) — moat facet

Deere's precision technology reaches more than 520 million acres and sells machines, but its software revenue is still too small to report.

Deere is trying to make a tractor into a computing platform, and the attempt is working on the farm while barely registering in the accounts. On the third-quarter call it reported "more than 520 million engaged acres across nearly 1.2 million connected machines," with highly engaged acres above 190 million1. See & Spray is expected on about one-third of North American sprayers on order2, and factory-installed SmartGrade adoption in construction rose more than 50% year to date3.

Deere research and development as a share of equipment net sales (%)3.9FY20235.1FY20245.9FY20255.59M FY2026Deere Form 10-K FY2025; Form 10-Q Q3 FY2026; research expense over equipment net sales
Spending held while sales fell.

The reason this is a moat is that it raises the cost of switching. A farmer whose field records live in the Operations Center, whose sprayer has learned to see his weeds, and whose dealer is trained on the system, has more to lose by buying the next machine from someone else. Deere has backed it with money: research and development rose from $2,177 million in fiscal 2023 to $2,311 million in fiscal 2025 while sales fell4.

What it has not done is generate much separate revenue. Deere states that "revenue from SaaS products did not represent a significant percentage of our revenues"5, and its 10-K says adoption of some solutions and subscription models "has been slower than we expected"6. The technology is paid for in the machine price.

Four pages follow it. Five Hundred and Twenty Million Engaged Acres is the data. See & Spray and the Herbicide Bill is the proof. Research Held Through the Downturn is the commitment. Autonomy Kits and SmartGrade is the next layer.

Deere is not alone in attaching technology to the machine. Its Wirtgen roadbuilding business sells its own digital tools, and its 10-K says the industry is attracting technology-focused companies and start-ups7. The advantage Deere has is scale of deployment: the connected base reaches across nearly 1.2 million machines8, and every new machine adds to it.

The technology moat is narrow and widening, real on the farm and thin in the income statement. Until Deere reports technology revenue as a line, this part of the moat rests on adoption figures that Deere alone defines, and a year without any such line would leave it there.

Moat trajectory: Widening

See & Spray factory adoption nearly doubling; highly engaged acres up double digits.

The number that tests this moat
Reported
Engaged acres
more than 520 million across nearly 1.2 million connected machines (August 2026)

The reach of the data position; a flat count would mean connection has stopped spreading.

Source: Deere & Company Q3 FY2026 earnings call transcript ↗
Aspects of the moat
DIG DEEPER 01
Five Hundred and Twenty Million Engaged Acres
Deere's machines report on more than 520 million acres and 190 million are highly engaged, a data position that sells the next machine more than it…
DIG DEEPER 02
See & Spray and the Herbicide Bill
See & Spray, bought for $284 million in 2017, saves farmers more than half their herbicide and is on about a third of North American sprayers on…
DIG DEEPER 03
Research Held Through the Downturn
Deere raised research spending every year through a 30% sales fall, from $2.18 billion to $2.31 billion, while cutting a tenth of its workforce.
DIG DEEPER 04
Autonomy Kits and SmartGrade
Deere sells autonomy as a kit for tractors already in the field and SmartGrade as a factory option, adoption up more than 50% this year.
⚠ Threats to the moat
⚠ THREAT 01
Data Rules Written by Others
Deere's data moat depends on rules about farm data and AI that legislators, not Deere, will write.
⚠ THREAT 02
Non-Traditional Competitors
Deere's 10-K names technology companies and start-ups as new rivals; so far it has bought them, for $284 million and $439 million.
References
  1. ReportedOn the third-quarter call it reported "more than 520 million engaged acres across nearly 1.2 million connected machines," with highly engaged acres above 190 million.
    Deere & Company third-quarter fiscal 2026 earnings call, FactSet corrected transcript - engaged and highly engaged acres, See & Spray adoption, early order programs, construction backlogs, tariffs, equipment cash flow guidance and the FTC settlement - precision technology: engaged acres, See & Spray and SmartGrade. — Q3 FY2026 · publ. 20 August 2026 · source ↗
  2. ReportedSee & Spray is expected on about one-third of North American sprayers on order, and factory-installed SmartGrade adoption in construction rose more than 50% year to date.
    Deere & Company third-quarter fiscal 2026 earnings call, FactSet corrected transcript - engaged and highly engaged acres, See & Spray adoption, early order programs, construction backlogs, tariffs, equipment cash flow guidance and the FTC settlement - precision technology: engaged acres, See & Spray and SmartGrade. — Q3 FY2026 · publ. 20 August 2026 · source ↗
  3. ReportedSee & Spray is expected on about one-third of North American sprayers on order, and factory-installed SmartGrade adoption in construction rose more than 50% year to date.
    Deere & Company third-quarter fiscal 2026 earnings call, FactSet corrected transcript - engaged and highly engaged acres, See & Spray adoption, early order programs, construction backlogs, tariffs, equipment cash flow guidance and the FTC settlement - precision technology: engaged acres, See & Spray and SmartGrade. — Q3 FY2026 · publ. 20 August 2026 · source ↗
  4. ReportedDeere has backed it with money: research and development rose from $2,177 million in fiscal 2023 to $2,311 million in fiscal 2025 while sales fell.
    Deere & Company Form 10-K for fiscal 2025 (year ended 2 November 2025), $ millions - selected financial data, MD&A and the supplemental consolidating data for equipment operations and financial services. — FY2025 · publ. 18 December 2025 · source ↗
  5. ReportedDeere states that "revenue from SaaS products did not represent a significant percentage of our revenues", and its 10-K says adoption of some solutions and subscription models "has been slower than we expected".
    Deere & Company Form 10-Q for the quarter ended 2 August 2026, $ millions - income statement, balance sheet, receivables, financing receivables, cash returned and the outlook. — Q3 FY2026 · publ. 27 August 2026 · source ↗
  6. ReportedDeere states that "revenue from SaaS products did not represent a significant percentage of our revenues", and its 10-K says adoption of some solutions and subscription models "has been slower than we expected".
    Deere & Company Form 10-K for fiscal 2025 (year ended 2 November 2025), $ millions - Item 1A risk factors and legal proceedings: the farm cycle, interest rates, tariffs, technology adoption, competition and the right-to-repair litigation. — FY2025 · publ. 18 December 2025 · source ↗
  7. ReportedIts Wirtgen roadbuilding business sells its own digital tools, and its 10-K says the industry is attracting technology-focused companies and start-ups.
    Deere & Company Form 10-K for fiscal 2025 (year ended 2 November 2025), $ millions - segment net sales and operating profit (Note 27), revenue by product line and geography (Note 5), backlog and goodwill. — FY2025 · publ. 18 December 2025 · source ↗
  8. ReportedThe advantage Deere has is scale of deployment: the connected base reaches across nearly 1.2 million machines, and every new machine adds to it.
    Deere & Company third-quarter fiscal 2026 earnings call, FactSet corrected transcript - engaged and highly engaged acres, See & Spray adoption, early order programs, construction backlogs, tariffs, equipment cash flow guidance and the FTC settlement - precision technology: engaged acres, See & Spray and SmartGrade. — Q3 FY2026 · publ. 20 August 2026 · source ↗
Sources
Generated October 5, 2026