Deere faces headwinds in Q3 update and announces Reservoir R&D partnership

Danny Bernstein (l) from Reservoir and Sean Sundberg (r) from John Deere announced a partnership at the Ruggedize event. | Credit: Reservoir

Deere & Co. last week posted Q3 2026 net income of $1.379 billion, or $5.10 per share, outperforming market expectations despite headwinds in its Production and Precision Agriculture division—the primary unit driving revenue from the company’s autonomous machinery, smart targeting systems, and precision technologies.

The revised outlook signaled that the multi-year downturn in global farm machinery demand may finally be reaching its floor. By raising its full-year net income guidance to a range of $4.75 billion to $5 billion, Deere is reinforcing its thesis that fiscal 2026 represents the trough of the current agricultural equipment cycle.

Crucially, as traditional equipment order volumes contend with elevated input costs and softer international demand, the company is poised for a tech-enabled recovery as global replacement cycles resume. Deere said it expects to benefit from expanding adoption of high-margin autonomous capabilities, automated spraying systems, and connected fleet software, which are providing a vital structural buffer for operating margins.

This week, Reservoir announced a $10 million, three-year research and development partnership with John Deere to accelerate real-world development and commercialization of rugged AI technologies for high-value crop agriculture.

The partnership builds on a relationship that began when Reservoir was founded in 2024 and reflects Deere’s commitment to an innovation ecosystem that moves faster from prototype to grower impact.

Reservoir hosted its first Ruggedize event this week in Salinas, Calif. The event brought together engineers, founders, and technical teams building robotic and AI systems that must survive the realities of active farmland. Deere is key investor in Reservoir.

“John Deere is committed to helping high-value crop growers do more with less, and that requires strong innovation built in the field, not just in the lab,” said Jason Brantley, vice president of production systems, small ag and turf, at John Deere.

“Real-world validation is a key part of Deere’s mission and helps ensure new solutions are addressing real challenges farmers are facing,” he added. “Automation on the farm is addressing the immediate labor and efficiency needs of the industry, and Reservoir is also helping explore what innovations come next across data, connectivity and other emerging agtech solutions.”