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FMC CORP (FMC)·Q1 2025 Earnings Summary

Executive Summary

  • FMC delivered Q1 2025 revenue of $791.4M and adjusted EPS of $0.18, both above S&P Global consensus (Revenue $777.7M; EPS $0.09), while GAAP diluted EPS was -$0.12; adjusted EBITDA was $119.7M .*
  • Management reaffirmed full-year 2025 guidance (Revenue $4.15–$4.35B, Adjusted EBITDA $870–$950M, Adjusted EPS $3.26–$3.70, FCF $200–$400M) and introduced Q2 guidance (Revenue $0.94–$1.10B, Adjusted EBITDA $175–$205M, Adjusted EPS $0.52–$0.68) .
  • Headwinds were driven by pricing (-9%, over half from cost-plus contract adjustments to diamide partners), FX (-4%), and modest volume (-1%); cash from operations was -$545.0M due to normal seasonal working capital build .
  • Strategic focus on product-on-the-ground and prudent selling helped align channel inventories; management expects second-half growth from new products and new direct route-to-market in Brazil; tariff headwind estimated at $15–$20M in 2025, offset by costs and volume .

What Went Well and What Went Wrong

What Went Well

  • “First quarter sales were largely in line with our expectations,” with deliberate channel management aligning distributor inventories to target levels; sets up substantial H2 growth .
  • Latin America sales grew 10% (+17% ex-FX) on higher direct sales to cotton growers in Brazil; Plant Health grew 1% driven by biologicals, outperforming the company .
  • Costs were a tailwind: favorable COGS more than offset increased selling/R&D; interest expense reduced to $50.1M; adjusted EBITDA $119.7M despite pricing/FX headwinds .

What Went Wrong

  • Price declined 9% YoY (over half from cost-plus diamide contract resets due to lower manufacturing costs), FX -4% and volume -1%; North America sales fell 28% on delayed purchases and trade dynamics .
  • Asia revenue fell 24% (-21% ex-FX) due to prudent selling to enable destocking; EMEA down 11% (-7% ex-FX) including expected loss of triflusulfuron registration .
  • Cash from operations -$545.0M and FCF -$595.7M reflecting seasonal working capital build and lower inventory reduction vs prior year .

Financial Results

Consolidated results vs prior quarters

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$1.065 $1.224 $0.791
GAAP Diluted EPS ($)$0.52 -$0.13 -$0.12
Adjusted EPS ($)$0.69 $1.79 $0.18
Adjusted EBITDA ($USD Millions)$201.4 $338.9 $119.7
Gross Profit ($USD Millions)$386.4 $524.7 $316.7
Gross Margin (%)36.3%*42.9%*40.0%*
Cash from Operations ($USD Millions)$159.5 $427.9 -$545.0
Free Cash Flow ($USD Millions)$132.1 $388.8 -$595.7

*Calculated from reported revenue and gross profit. Values retrieved from S&P Global.

Q1 2025 price/volume/FX mix

ComponentYoY Impact
Price-9%
FX-4%
Volume-1%
Organic Revenue Change-10%

Regional/portfolio breakdown (Q1 2025 YoY)

Region/PortfolioGAAP YoY ChangeOrganic (ex-FX) YoY Change
North America-28% N/A
Latin America+10% +17%
Asia-24% -21%
EMEA-11% -7%
Plant Health+1% N/A

Guidance Changes

MetricPeriodPrevious Guidance (Feb 4, 2025)Current Guidance (Apr 30, 2025)Change
Revenue ($B)FY 2025$4.15–$4.35 $4.15–$4.35 Maintained
Adjusted EBITDA ($M)FY 2025$870–$950 $870–$950 Maintained
Adjusted EPS ($)FY 2025$3.26–$3.70 $3.26–$3.70 Maintained
Free Cash Flow ($M)FY 2025$200–$400 $200–$400 Maintained
Tariff cost headwind ($M)FY 2025N/A$15–$20 New disclosure
COGS tailwinds ($M)FY 2025$175–$200 Not reiterated in Q1 PRPreviously communicated
Revenue ($B)Q2 2025N/A$0.94–$1.10 New
Adjusted EBITDA ($M)Q2 2025N/A$175–$205 New
Adjusted EPS ($)Q2 2025N/A$0.52–$0.68 New
Dividend ($/share)Q2/Q3 2025N/A$0.58 payable Jul 17, 2025 Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Channel destocking & inventoryRecovery timelines: U.S./Europe normalizing; LatAm improving by Q2’25; Asia challenging Customers holding lower-than-historical inventories; volume up but below expectations Destocking nearly complete in most countries; maintaining prudent selling in Q2; strong POG focus Improving; sets stage for H2 growth
Pricing dynamicsPressure mainly in LatAm/Asia; mid-single-digit headwind expected in Q4’24 Price -3% in Q4; decline expected in FY’25 low-to-mid-single digits Q1 price -9% (over half from cost-plus resets); comps to ease in H2 Stabilizing into H2
New product launches (fluindapyr, Isoflex, diamides)Strong demand; new actives contributing ~half of Q4 growth expected Growth portfolio drove >75% of Q4 sales growth; new actives near $130M FY’24 Expect H2 revenue growth from new products; sales expected $200–$250M for new diamide formulations Accelerating contribution
Brazil direct route-to-marketNot yet in placeAnnounced plans; investment in SG&A Sales org in place; fully operational in Q2; “multi-$100M” opportunity over time Execution starting Q2
Tariffs/macro & sourcing flexibilityFX headwinds (BRL); cost savings ramping FY’25 FX headwind $65–$75M; COGS tailwinds $175–$200M Tariff headwind $15–$20M; exemptions/duty drawback and sourcing flexibility to limit impact Manageable with offsets
R&D optimizationCost savings via governance/screening; protect pipeline —Increased investment in selling/R&D offset by COGS favorability Leaner R&D; targeted spend
Asia channel & regulatoryIndia destocking; Asia challenging into 2025 Asia +10% Q4 volume; still FX/pricing headwinds Asia down 24% Q1; prudent selling to enable destocking Still a headwind
Leverage & cashCovenant leverage improving; FCF recovery in 2024 CFFO +$1.04B FY’24; FCF $614M Seasonal working capital build drove negative CFFO/FCF; leverage metrics updated on call H1 cash outflow; normalize H2

Management Commentary

  • “Our strong focus on increasing product-on-the-ground while controlling sales into the channel allowed us to decrease the level of FMC inventory at our distribution partners… A continued prudent approach through Q2 will position us to deliver substantial growth in the second half.” — Pierre Brondeau .
  • “After a detailed review… we estimate an incremental cost headwind of $15 million to $20 million [from tariffs]… we do not expect tariffs to be a significant obstacle to reaching full 2025 goals.” — Management .
  • “Access to this new [Brazil] market is expected to provide a multi-$100 million growth opportunity over time… organization will be fully operational in Q2.” — Management .
  • “Costs were a tailwind as favorability in COGS more than offset increased investment in selling and R&D.” — Management .

Q&A Highlights

  • Pricing trajectory: Expect stabilization into H2 as comps ease; Q1 high-single-digit decline driven by cost-plus contracts and country mix; fewer sequential actions ahead .
  • Second-half confidence: Revenue growth driven by new products and Brazil route-to-market; automatic ~$50M H2 EBITDA uplift from absence of 2024 manufacturing variance; strong channel position entering H2 .
  • Tariffs: $15–$20M headwind; offsets from cost savings and volume; flexibility to switch sources; over time pricing may adjust as clarity increases .
  • Channel inventory strategy: Focus on grower pull to increase POG rather than rebates/discounts; careful replenishment to rebuild inventories .
  • Brazil route-to-market: Q1 impact primarily SG&A investment; expected to turn positive starting late Q2/Q3 with soybean and corn invoicing; high confidence in 2025 contribution .

Estimates Context

MetricConsensus (S&P Global)ActualSurprise
Revenue ($USD Millions)777.7*791.4 +$13.7M (Beat)
Primary/Normalized EPS ($)0.09*0.18 +$0.09 (Beat)
# of EPS Estimates17*——
# of Revenue Estimates13*——

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Results modestly beat revenue and EPS consensus, with management reaffirming FY 2025 guidance and introducing a cautious Q2 guide; narrative centers on H2 acceleration from new products and Brazil direct sales .*
  • Pricing pressure is concentrated in cost-plus contracts and competitive LatAm/Asia markets; comps should ease in H2 while cost tailwinds and volume gains support EBITDA growth .
  • Channel reset and POG strategy is progressing; NA softness and Asia destocking persist, but inventory alignment should enable cleaner H2 sell-through and stronger pricing posture .
  • Tariff headwinds ($15–$20M) appear manageable via sourcing flexibility and cost/volume offsets; monitor updates as trade negotiations evolve .
  • Cash flow is seasonally negative in H1; expect normalization and release in H2; leverage within covenant limits with year-end improvement targeted .
  • Watch execution milestones: Q2 ramp of Brazil route-to-market, new diamide formulations uptake ($200–$250M expected in 2025), and fluindapyr/Isoflex rollouts .
  • Estimate revisions likely modestly upward for Q1 actuals, but Street will focus on H2 trajectory amid FX/pricing headwinds; catalysts include H2 product sales, improved channel health, and tariff clarity .
Notes:
* Where asterisks appear, values are calculated or retrieved from S&P Global. Values retrieved from S&P Global.