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Andersons, Inc. (ANDE)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered mixed results: Adjusted EPS was $0.84, a major beat versus S&P Global consensus $0.46*, while revenue of $2.68B declined year over year and missed the $2.89B consensus* due to oversupplied grain markets; Adjusted EBITDA was $78.3M, down year over year .
  • Renewables outperformed on efficient ethanol operations, full-ownership benefits starting in August–September, and recognition of YTD 45Z tax credits ($20M); Agribusiness was weak on low prices/volatility and trade-policy uncertainty .
  • Guidance shifted favorably for taxes: full-year adjusted effective tax rate lowered to ~15–18% from 22–25% previously; Q4 expects $10–$15M incremental EBITDA from 45Z credits; capex maintained near ~$200M .
  • Near-term catalysts: Investor Day (Dec 9) to update long-range targets, carbon sequestration (Class VI) permit at Clymers advancing, and potential trade-policy clarity (sorghum/soy exports) that could normalize Agribusiness margins in 2026 .

What Went Well and What Went Wrong

What Went Well

  • Strong Renewables segment: pretax income $43.5M; adjusted pretax income attributable $46.3M vs $25.9M in Q3 2024; adjusted EBITDA $66.5M vs $62.6M prior year, aided by YTD 45Z tax credits and two months of full ownership .
  • Strategic progress: Full ownership of ethanol plants (closed July 31) added $12M pretax ($0.28/share) in Q3; portfolio optimization continued; Port of Houston expansion on track for mid-2026 .
  • Cash generation and balance sheet discipline: Q3 operating cash flow $233.9M (vs -$2.1M in Q3 2024); long-term debt/EBITDA ~2x and target <2.5x reiterated .

Management quotes:

  • “We are excited to have full control over these strategic assets… improving ethanol and co-product yields while lowering carbon intensity…” — CEO Bill Krueger .
  • “We now have access to 100% of the cash generated by our ethanol operations… we remain below our long-term debt to EBITDA target of less than 2.5x” — CFO Brian Valentine .

What Went Wrong

  • Agribusiness softness: adjusted pretax attributable $2.5M in Q3 2025 vs $19.2M in Q3 2024; adjusted EBITDA fell to $29.1M from $45.0M on oversupplied grain markets, low prices, and weak merchandising .
  • Margin pressures: Board crush decline (offset partly by lower corn basis at harvest), higher natural gas costs, and weak distillers grains values; overall company gross profit down and opex up with Skyland integration .
  • Non-GAAP adjustments impacted comparability: $11.4M asset impairment, $5.9M acquisition costs, insurance recoveries, and other items, highlighting ongoing portfolio changes and transaction effects .

Financial Results

Consolidated Performance vs Prior Year and Prior Quarter

MetricQ3 2024Q2 2025Q3 2025
Sales & Merchandising Revenues ($USD Billions)$2.62 $3.14 $2.68
Gross Profit ($USD Millions)$177.1 $158.4 $170.9
Operating, Admin & General ($USD Millions)$120.5 $134.6 $172.6
Net Income Attributable to ANDE ($USD Millions)$27.4 $7.9 $20.1
Diluted EPS (GAAP)$0.80 $0.23 $0.59
Adjusted EPS (Non-GAAP)$0.72 $0.24 $0.84
EBITDA ($USD Millions)$101.0 $69.4 $69.0
Adjusted EBITDA ($USD Millions)$97.4 $65.2 $78.3

Notes: Non-GAAP values reconciled in exhibits; see press release/8-K tables .

Segment Breakdown (Q3 2025 vs Q3 2024)

Segment MetricQ3 2024Q3 2025
Agribusiness: Adjusted Pretax Income Attributable ($USD Millions)$19.2 $2.5
Agribusiness: Adjusted EBITDA ($USD Millions)$45.0 $29.1
Renewables: Adjusted Pretax Income Attributable ($USD Millions)$25.9 $46.3
Renewables: Adjusted EBITDA ($USD Millions)$62.6 $66.5

KPIs

KPIQ3 2024Q3 2025
Cash from Ops (before WC changes, $USD Millions)$86.2 $68.5
Cash Provided by Operating Activities ($USD Millions)$(2.1) $233.9
Capex ($USD Millions)$38 $67
45Z Tax Credits Recognized YTD ($USD Millions)—$20
Q3 Pretax contribution from full ownership ($USD Millions)—$12 ($0.28/share)

Actuals vs S&P Global Consensus (Q3 2025)

MetricActualConsensusSurprise
Adjusted EPS ($)0.84 0.46*Beat
Revenue ($USD Billions)2.68 2.89*Miss
EBITDA ($USD Millions)69.0 (EBITDA) / 78.3 Adj 72.8*Mixed vs EBITDA; Adj EBITDA below

Disclaimer: *Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Effective Tax RateFY 2025~22–25% (Q2 call) ~15–18% (Q3) Lowered
45Z Credit ContributionQ4 2025Not previously quantifiedEBITDA +$10–$15M New
CapexFY 2025~$200M ~$200M (maintained) Maintained
Long-term Debt/EBITDA TargetOngoing<2.5x <2.5x (maintained) Maintained
Run-rate EPS TargetBy end of 2026~$4.30 (converted from prior EBITDA target) Reaffirmed Maintained
DividendQ4 2025—$0.195/share declared Announced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
45Z Tax CreditsPreparing plants to qualify; credits expected over next year $20M YTD recognized; Q4 EBITDA benefit $10–$15M; higher credit rates expected 2026–2029 Increasing impact
Ethanol Demand/ExportsStrong demand; potential record exports; board crush uptick in July Record exports expected in 2025; board crush down, corn basis retreating; California E15 approval seen positive for 2026 Constructive
Corn Basis/Nat Gas CostsElevated eastern corn basis; higher nat gas costs pressured margins Corn basis retreating at harvest; nat gas remains a headwind Improving basis
Port of Houston ProjectMid-2026 completion; export soybean meal capacity expansion Progressing on schedule; strategic positioning for surplus meal exports On track
Carbon Sequestration (Class VI)Permit filed for Clymers EPA process progressing; enables lower CI and more credits once approved Advancing
Agribusiness Trade Policy/TariffsQ1 uncertainty dampened flows; oversupply in western assets Clarity expected to improve merchandising; sorghum exports could normalize Skyland EBITDA Potential tailwind
Fertilizer MarginsStrong Q2 on larger corn acres Higher Q3 margins and volumes vs prior year; caution if demand delayed Resilient

Management Commentary

  • Strategy and assets: “We are both evaluating and implementing… enhancements to continue improving ethanol and co-product yields while lowering the carbon intensity… We will look for further opportunities to grow our presence in the space.” — CEO Bill Krueger .
  • Balance sheet and funding: “We expect to continue to fund many of our growth projects internally… we remain below our long-term debt to EBITDA target of less than 2.5 times.” — CFO Brian Valentine .
  • Outlook on credits: “Our expected Q4 production should enable us to generate additional 45Z tax credits, resulting in $10–$15M of EBITDA… Guidelines effective for 2026–2029 are expected to increase credit generation.” — CEO Bill Krueger .

Q&A Highlights

  • 45Z per-gallon contribution and 2026 outlook: Management guided Q4 benefit of $10–$15M EBITDA, with more detailed 2026 guidance at Investor Day; per-gal uplift to be clarified later .
  • Agribusiness normalization: With trade-policy clarity (e.g., China sorghum), margins could improve quickly; Skyland 2025 EBITDA targeted ~$25–$30M (vs initial $30–$40M range) .
  • California E15 approval: Positive for 2026 consumption; plenty of capacity to meet incremental barrels; export volumes expected to remain strong .
  • Capex/project pacing: Full-year capex ~$200M; remaining spend for large projects ~$30–$50M; larger-scale M&A more plausible given expected cash flows from credits .
  • Farmer sentiment and fertilizer demand: Sentiment improved with commodity rallies; potential delay to spring if uncertainty persists .

Estimates Context

  • Adjusted EPS beat: $0.84 vs $0.46* (consensus); strong Renewables performance and 45Z credits drove upside .
  • Revenue miss: $2.68B vs $2.89B* (consensus) on oversupplied grain markets and reduced merchandising opportunities .
  • Q4 2025 set-up: EPS consensus $1.51*; revenue consensus $3.26B*; management expects additional 45Z credit EBITDA and robust production, but board crush has softened; basis retreating .

Disclaimer: *Values retrieved from S&P Global.

Key Takeaways for Investors

  • EPS surprise driven by Renewables and 45Z credits; Agribusiness weakness masks underlying renewable cash flow strength; expect continued credits in Q4 .
  • Revenue miss reflects cyclical grain oversupply and policy uncertainty; Catalysts (tariff clarity, sorghum exports) could reverse margin headwinds into 2026 .
  • Tax guidance lowered (15–18%), boosting after-tax earnings power in 2H25/2026 .
  • Balance sheet supports growth: long-term debt/EBITDA ~2x; capacity for larger M&A and organic projects (Port of Houston, Clymers sequestration) .
  • Watch Investor Day (Dec 9) for updated targets through 2028 and 45Z monetization roadmap; potential narrative re-rating catalyst .
  • Near-term trading setup: Expect positive sentiment tied to Q4 45Z EBITDA and production strength, tempered by board crush softness; stock likely sensitive to policy headlines (tariffs/E15 finalization) .
  • Medium-term thesis: Renewables-led earnings growth with structural advantages (full ownership, low CI strategy) and optionality from carbon sequestration; Agribusiness leverage to trade normalization and elevation/space income .