Executive Summary

Strong YoY quarter amid maintenance season: net sales $1.66B (+21% YoY), gross margin 38.1% (+570 bps YoY), diluted EPS $2.19 (+41% YoY); sequentially softer vs Q2 due to planned outages and seasonal mix . Versus S&P Global consensus, revenue was a slight beat ($1.66B vs $1.65B*) and EPS was essentially in line ($2.19 vs $2.17*) (see Estimates Context).
Constructive nitrogen fundamentals and monetization of decarbonization: adjusted EBITDA $667M (vs $511M in Q3’24) as higher prices and volumes offset gas costs and the company sold certified low‑carbon ammonia at premiums of $20–$25/ton, in addition to generating 45Q credits .
Capital returns remain aggressive; capex guidance raised: $445M returned in Q3 and ~$1.3B YTD; company completed the $3B buyback in Oct and began a new $2B program through 2029 . 2025 CF‑funded capex increased to ~$725M (incl. ~$150M Blue Point) from ~$650M prior; within that, ~ $575M is for the existing network .
Strategic catalysts: Blue Point JV on schedule (long‑lead items procured, modular construction path), CBAM expected to support low‑carbon premia in Europe, and CFO reiterated persistent US‑EU gas spread tailwinds .

What Went Well and What Went Wrong

What Went Well
- “We are generating 45Q tax credits and moved to full rate safely through the quarter” at Donaldsonville CCS; “we are selling the resulting low‑carbon ammonia at a premium” .
- Management disclosed realized premia of “$20–$25 per ton” on low‑carbon ammonia, with economics materially better than initial assumptions (45Q ~$100M cash benefit at 2Mtpa; premia adding ~$40–$50M) .
- Capital return and FCF conversion: “free cash flow was $1.7B” LTM with 65% FCF/Adj. EBITDA conversion; Q3 net earnings $353M ($2.19/share) and adjusted EBITDA $667M .
What Went Wrong
- Q3 seasonality and maintenance reduced volumes (typical for the quarter) and lifted some non‑gas costs; mix included higher purchased ammonia (UK, Trinidad) at market prices, affecting segment COGS .
- Natural gas cost/COGS rose vs Q3’24 ($2.96/MMBtu vs $2.10), partially offset by price/volume tailwinds .
- Incident at Yazoo City: no significant injuries; investigation underway; ammonia plant still operating; management not focused on financial impact but flagged inventory constraints if upgrades are down for long .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Net Sales ($USD Millions)	$1,370	$1,663	$1,890	$1,659
Gross Margin ($USD Millions)	$444	$572	$755	$632
Gross Margin (%)	32.4%	34.4%	39.9%	38.1%
Diluted EPS ($)	$1.55	$1.85	$2.37	$2.19
EBITDA ($USD Millions)	$509	$617	$757	$671
Adjusted EBITDA ($USD Millions)	$511	$644	$761	$667
Diluted Wtd Avg Shares (M)	178.6	168.8	163.1	161.2
Natural Gas Costs in COGS ($/MMBtu)	$2.10	$3.69	$3.36	$2.96
Henry Hub Avg ($/MMBtu)	$2.08	$4.28	$3.16	$3.03
Depreciation & Amortization ($USD Millions)	$229	$221	$232	$217
Capital Expenditures ($USD Millions)	$139	$132	$245	$347

Notes: Q3 YoY expansion driven by higher prices/volumes; sequential softness reflects planned turnarounds and mix . Gas cost per MMBtu declined vs Q2, aiding sequential cost tailwinds .

KPIs (LTM unless noted)

Capacity utilization 9M 2025: 97%
Recordable incident rate (12‑mo rolling): 0.37 per 200k hours
LTM Cash from Operations: $2.63B
LTM Free Cash Flow: $1.70B
FCF/Adj EBITDA conversion: 65%
FCF Yield: 12.0% (as of 9/30/25 market cap basis)
End‑period shares outstanding: 157.7M

Segment breakdown: Not disclosed in the Q3 8‑K/presentation deck; call commentary cited stronger ammonia gross margin dollars (+30% YoY) and purchased tons impact on COGS mix .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
CF‑funded Capex (incl. Blue Point share)	FY 2025	~$650M (incl. ~$150M Blue Point)	~$725M (incl. ~$150M Blue Point); existing network ≈$575M	Raised
Gross Ammonia Production	FY 2025	~10M tons	~10M tons	Maintained
Share Repurchase Authorization	Through 2029	$3B program (nearing completion) + new $2B approved	$3B completed in Oct’25; executing new $2B thru Dec 2029	Executing new plan
Dividend	Q4 2025	—	$0.50/share payable Nov 28, 2025 (record Nov 14)	Declared
Blue Point Timeline	2026–2029	Site prep/LLIs 2025; major spend 2027–28; production 2029	Permits expected 1H’26; begin construction 2026; commissioning 2029	Reiterated

Earnings Call Themes & Trends

Topic	Q1 2025 (May)	Q2 2025 (Aug)	Q3 2025 (Nov)	Trend
Low‑carbon ammonia monetization	CCS startup expected 2H; plan to sell at premium	CCS started in July; “EBITDA and FCF north of $100M annually” from tax incentives and premia	Premiums quantified at $20–$25/ton; additional ~$40–$50M benefit; first EU cargoes shipped	Strengthening monetization
CBAM/Europe	Positioning for low‑carbon AN in UK/EU; CBAM viewed favorably	CBAM seen as carbon arbitrage opportunity (est. $25/mt benefit rising to ~$100/mt by 2030)	Confident on competitive position; customer discussions supportive	Positive policy tailwind
Nitrogen S&D/China	Expect 3–4Mt China exports; tight inventories; strong Brazil/India	Tight global market, outages in Egypt/Iran/Russia; robust demand; US low gas tailwind	Tight balance persists; 2026 outlook constructive
Blue Point project	JV formed; capex plan; modular approach mentioned	LLIs ordered; Linde ASU agreement; 2029 start; modular construction plan	Long‑lead equipment procured; tariffs contingency; on budget path	Execution progressing
Capital returns/valuation	New $2B buyback authorized	Plan to finish $3B then start $2B; LTM FCF $1.7B; 70% LTM FCF/Adj EBITDA	$3B completed; $2B underway; mgmt emphasizes “valuation disconnect” and buybacks	Accelerated returns
Safety/Operations	100% utilization in Q1; no lost‑time days	99% 1H utilization; inventory tight; logistics agility	97% 9M utilization; Yazoo incident contained, no major injuries	Operational resilience

Management Commentary

“We are generating 45Q tax credits and moved to full rate safely through the quarter… We are… monetizing through the sale of carbon credits” and “selling low‑carbon ammonia at a premium” .
“Today, the premium is $20–$25 per ton… 45Q… about $100 million of cash… and then… another roughly almost $40–$50 million from product premium” .
On valuation: “we have traded at an anemic average cash flow multiple of barely 7.5 times… We will continue aggressively repurchasing shares from the non‑believers” .
On Blue Point cost control: “We are going with modular construction… last time… labor costs got out of control. …long lead items… fixed fee bids… covered with contingency” .
On S&D: “Global inventories are low… outages… new capacity delayed… expect global nitrogen… to remain constructive” .

Q&A Highlights

Valuation/buybacks: Management reiterated the “valuation disconnect,” intends to “continue aggressively repurchasing shares,” and maintains balance sheet flexibility to fund Blue Point and buybacks concurrently .
Low‑carbon premiums/CBAM: Premiums at $20–$25/ton; CBAM expected to add $25/mt near‑term rising toward ~$100/mt by 2030; first certified low‑carbon cargoes sold to Europe/N. Africa and shipped with Trafigura/Envalior .
Blue Point schedule/cost: LLIs procured; modular build and fixed‑fee modules to mitigate labor/tariff inflation; $3.7B JV capex with ~$500M contingency; 2029 start .
Operational issues: Yazoo City incident contained; ammonia plant operating; investigation underway; production guidance unchanged (~10Mt) .
Cost/SG&A: Q3 SG&A higher due to bonus accrual timing; ammonia segment COGS impacted by purchased tons/imports; maintenance timing drove non‑gas cost variability .

Estimates Context

Metric	S&P Global Consensus*	Actual Reported
Revenue ($B)	1.655*	1.659
Diluted EPS ($)	2.17*	2.19
EBITDA ($M)	692*	667 (Adj. EBITDA)

Values retrieved from S&P Global. Note: S&P EBITDA definitions may differ from company-reported EBITDA/Adjusted EBITDA; we compare consensus to company Adjusted EBITDA for consistency.

Takeaways: Revenue modestly beat; EPS essentially in line; EBITDA performance strong YoY but slightly below S&P consensus when compared to company Adjusted EBITDA (definition differences may apply). Estimates count: EPS (9), Revenue (8)*.

Key Takeaways for Investors

Decarbonization is now a P&L driver: 45Q credits plus $20–$25/ton low‑carbon premia created incremental, relatively ratable cash flows, with further upside as CBAM scales in Europe .
Cycle still favorable into 2026: low inventories, delayed startups, EU gas premiums, and persistent outages support pricing and margins; management expects full‑year results “well above mid‑cycle” .
Capital allocation remains shareholder‑friendly: $3B buyback completed; $2B new authorization underway; LTM FCF $1.7B with 65% conversion sustains returns and growth investment .
Capex rising but focused: 2025 CF‑funded capex raised to ~$725M (ex‑network ~$575M; Blue Point ~$150M); modular fixed‑fee procurement helps contain risk .
Watch items: execution on Blue Point milestones (permitting 1H’26, construction start 2026); EU CBAM implementation details; any operational disruptions (e.g., Yazoo City) .
Trading implication: near‑term setup constructive (tight ammonia/UAN/urea, low HH gas), with incremental catalysts from low‑carbon contract wins and continued buyback execution .
Medium‑term thesis: structural low‑cost advantage plus low‑carbon differentiation and Blue Point expansion support management’s path toward ~$3B mid‑cycle EBITDA and ~$2B FCF by ~2030 .

Supporting Press Releases (Q3 period)

Declared $0.50 quarterly dividend (payable Nov 28, 2025; record Nov 14) .
Shipped 23,500 t certified low‑carbon ammonia to Europe with Trafigura/Envalior (VACI‑certified) .
CEO transition announced: W. Anthony Will to retire Jan 4, 2026; COO Chris Bohn elected successor .

Citations:

Q3 2025 8‑K and presentation:
Q3 2025 earnings call transcript:
Q2 2025 8‑K/presentation and call:
Q1 2025 8‑K/presentation and call:
Press releases: dividend ; low‑carbon shipment ; CEO transition

(*) Values retrieved from S&P Global.

CF Industries Holdings, Inc. (CF)·Q3 2025 Earnings Summary