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Corteva, Inc. (CTVA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered resilient execution: net sales $4.42B (-2% YoY; +3% organic), Operating EBITDA $1.19B (+15% YoY), Operating EPS $1.13 (+27% YoY), and GAAP diluted EPS (continuing ops) $0.97 . Margin expanded ~390 bps, to ~26.9% Operating EBITDA margin (calc: $1.189B/$4.417B) .
  • Results vs consensus: revenue missed ($4.42B vs $4.55B*) while EPS materially beat ($1.13 vs $0.88*); FX was a 5% sales headwind and ~$90M EBITDA headwind; price in Crop Protection remained down low-single digits offset by strong volume and cost productivity . Values retrieved from S&P Global.
  • Full-year 2025 guidance reaffirmed: net sales $17.2–$17.6B, Operating EBITDA $3.6–$3.8B, Operating EPS $2.70–$2.95; FCF-to-EBITDA conversion 40–45%; ~$1B share repurchases .
  • Key catalysts: double-digit EBITDA gains across both segments, strong Seed pricing (+3%) and CP volume (+5%) on new products/biologicals; tariff exposure estimated at $50M and excluded from guidance, with mitigation underway; BRL/FX headwind ($275M for FY) hedged >80% in Q3 .

What Went Well and What Went Wrong

What Went Well

  • “Operating EBITDA was up more than $150M to just under $1.2B… Operating EBITDA margin of nearly 27% was up 390 bps driven by organic sales growth and lower input costs/productivity” .
  • Seed out-licensing and royalty trajectory: “Seed continues to make progress on its path to royalty-neutrality with another $20M decrease in net royalty expense” .
  • Product-led growth: “Organic sales were up 3% in Crop Protection driven by double-digit volume growth for both new products and Biologicals… four consecutive quarters of volume gains” .

What Went Wrong

  • Pricing pressure persisted: “Crop Protection price was down 2%… competitive market dynamics”; Seed volume down 1% due to timing; currency headwind 5% of sales .
  • FX drag on profitability: currency headwind ~$90M on EBITDA in Q1; full-year FX headwind still ~$(275)M expected .
  • Tariffs uncertainty: management estimates ~$50M direct cost impact in 2025 and kept it out of guidance pending mitigation specifics .

Financial Results

Headline results vs prior year, prior quarter, and consensus

MetricQ1 2024Q4 2024Q1 2025Consensus Q1 2025
Net Sales ($USD Billions)$4.49 $3.98 $4.42 $4.55*
Operating EBITDA ($USD Billions)$1.03 $0.53 $1.19 —
Operating EBITDA Margin %22.9% (calc: $1.03B/$4.49B) 13.2% (calc: $0.525B/$3.978B) 26.9% (calc: $1.189B/$4.417B) —
GAAP Diluted EPS – Continuing Ops ($)$0.53 $(0.08) $0.97 —
Operating EPS ($)$0.89 $0.32 $1.13 $0.88*

Values retrieved from S&P Global.

Segment breakdown (Q1)

SegmentQ1 2024 Net Sales ($MM)Q1 2025 Net Sales ($MM)Q1 2024 Op EBITDA ($MM)Q1 2025 Op EBITDA ($MM)
Seed$2,751 $2,707 $748 $842
Crop Protection$1,741 $1,710 $310 $377

KPIs and operational drivers (Q1 2025)

KPIValue
Organic sales growth (Total)+3%
Seed: Price / Volume / Currency+3% / -1% / -4%
Crop Protection: Price / Volume / Currency-2% / +5% / -5%
Cost/productivity benefits (Q1)>$200M combined Seed & CP
Net royalty improvement (Q1)$20M decrease
Currency headwind5% of sales; ~$90M EBITDA (Q1)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesFY 2025$17.2–$17.6B $17.2–$17.6B Maintained
Operating EBITDAFY 2025$3.6–$3.8B $3.6–$3.8B Maintained
Operating EPSFY 2025$2.70–$2.95 $2.70–$2.95 Maintained
FCF-to-EBITDA conversionFY 202540–45% 40–45% Maintained
Share repurchasesFY 2025~$1.0B ~$1.0B Maintained
CP pricing assumptionFY 2025Down low-single digits Down low-single digits Maintained
Volume assumptionFY 2025Seed up; CP low–mid-single-digit CP high single-digit volume; Seed solid Slightly stronger volumes
FX headwindFY 2025~$(275)M ~$(275)M Maintained
Tariffs in guidanceFY 2025Not included Not included; ~$50M direct cost being mitigated Maintained (disclosed size)

Earnings Call Themes & Trends

TopicQ3 2024Q4 2024Q1 2025Trend
Crop Protection pricingCompetitive; LATAM-led declines; stabilization beginning Expect down low-single digits in 2025 Down low-single digits through year, stabilizing as lapping occurs; China generics pricing stable Improving trajectory (less negative)
Biologicals & new productsDouble-digit CP new-product volumes; biologicals mid-single-digit New products >20% volume in Q4 Double-digit CP volume growth from biologicals/new products Strengthening growth driver
Seed pricing/mix and out-licensingPrice gains across regions; share gains in NA Royalty improvement trajectory; out-licensing ramp +3% price; $20M royalty reduction; >100 licensees; PowerCore/Conkesta momentum Continuing execution
FX and BRL exposureFX headwinds highlighted FX headwind ~$(275)M; BRL major exposure ~$(275)M headwind; hedged >80% in Q3; ~20% Q4 Managed with hedging
Tariffs/trade policyMonitoring Not included in guidance ~$50M direct cost; not in guidance; mitigation underway Manageable; transparent
Regional trends (Brazil/NA corn)Brazil CP early season; Argentina corn area reduced “Year of corn” setup; Q4 Brazil strong CP NA corn up; Brazil summer/safrinha expansion; healthy channel Positive acreage backdrop

Management Commentary

  • “2025 is off to a good start… CP destocking is firmly behind us… Year-over-year, Q1 EBITDA +15% and nearly 400 bps margin expansion” — CEO Chuck Magro .
  • “Operating EBITDA margin of nearly 27% was up 390 bps… price/mix, volume gains and cost benefits more than offset currency headwinds” — CFO David Johnson .
  • “Tariffs direct cost impact should be about $50M… not impacting our full-year guidance range” — CEO .
  • “Enlist beans will be planted on just over 65% of all U.S. soybean acres in 2025… #1 selling soybean technology in the U.S.” — CEO .
  • “Hybrid wheat remains on track for 2027 launch… initial yield unlock 10–20%… $1B peak revenue potential” — CEO .

Q&A Highlights

  • Back-half derisk: First half stronger than plan; CP in Brazil expected to match last year; guide derisked despite maintained range .
  • CP pricing cadence: Less negative but longer; stabilization signs in China generics; growth weighted to higher-margin biologicals/new products .
  • FX/BRL: ~85% BRL exposure in back half; >80% hedged for Q3; slightly favorable hedge vs initial 6.0 guide .
  • Seed transitions and cost: ~$200M full-year seed cost benefits; front-end loaded; trade launches create transitional costs but fading over time .
  • Soy vs corn and profitability: Shift to corn (U.S. +5% area) benefits Seed; 1M-acre shift soy→corn equates to ~$10–15M EBITDA shift for Corteva .

Estimates Context

  • Revenue: Missed consensus ($4.42B actual vs $4.55B*), largely due to FX (5% sales headwind) and CP pricing pressure (-2%) despite volume strength (+5%) . Values retrieved from S&P Global.
  • EPS: Beat consensus ($1.13 actual vs $0.88*), driven by price/mix, lower input costs/productivity (> $200M), and royalty improvement ($20M), overcoming FX headwind (~$90M) . Values retrieved from S&P Global.
  • Estimate implications: Street may need to raise EPS on sustained cost productivity and margin expansion, while trimming CP pricing assumptions and embedding FX sensitivity; guidance reaffirmation supports 10% EBITDA growth at mid-point .

Key Takeaways for Investors

  • Margin expansion is durable: self-help levers ($400M net in 2025) and portfolio mix are driving Operating EBITDA margin to ~27% this quarter; full-year 10% EBITDA growth target reaffirmed .
  • Product engines intact: biologicals/new products continue double-digit volume growth; Seed pricing remains firm (+3%) with broad pipeline launches and out-licensing scaling .
  • FX/tariffs are manageable: $(275)M FY FX headwind hedged; tariff direct cost ($50M) excluded from guidance but slated for mitigation; neither changes FY range .
  • CP pricing headwinds persist but stabilize: expect down low-single digits in 2025, offset by volume/mix and cost deflation/productivity .
  • North America “year of corn”: acreage shift to corn supports Seed volume/mix; Brazil’s safrinha and corn ethanol expansion add structural tailwinds .
  • Capital returns steady: ~$1B share repurchases in 2025 and 40–45% FCF-to-EBITDA conversion remain on track .
  • Risk/reward: With guidance intact and second half derisked, narrative hinges on CP pricing stabilization and FX trajectory; execution on cost and Seed royalty/out-licensing should sustain EPS/margin momentum .

Other Relevant Q1 2025 Materials

  • Capital structure: Corteva priced $500M of 5.125% Senior Notes due 2032; proceeds to redeem/repay 2025 notes; maintains balance-sheet flexibility .

Notes: All values marked with an asterisk (*) are consensus estimates. Values retrieved from S&P Global.