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FMC CORP (FMC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered at the high end of guidance with revenue $1.05B, adjusted EPS $0.69 and adjusted EBITDA $206.5M; results reflected 6% volume growth offset by a 3% price decline and a 1% FX headwind .
  • Versus Wall Street consensus, FMC posted broad beats: EPS $0.69 vs $0.62*, revenue $1.05B vs $0.995B*, and EBITDA $206.5M vs $194.8M*; Q1 2025 also modestly beat on EPS/revenue/EBITDA while Q4 2024 missed on revenue and EBITDA but beat EPS .
  • FMC will divest its India commercial business; FY25 guidance was reaffirmed for adjusted EBITDA, adjusted EPS and FCF, while revenue guidance was adjusted to $4.08–$4.28B excluding India (previously $4.15–$4.35B including India) .
  • Key catalysts: India exit (reduces working capital risk), stronger EMEA and growth portfolio momentum (fluindapyr, Isoflex), and Q3/Q4 acceleration supported by cost tailwinds and a new direct route to market in Brazil .

What Went Well and What Went Wrong

What Went Well

  • EMEA strength: sales up 29% (+27% ex-FX) driven by herbicides, diamide partner sales, and branded Cyazypyr; Plant Health grew 3% on biologicals .
  • Cost execution: adjusted EBITDA up 2% YoY to $206.5M as lower raw materials, improved fixed-cost absorption and restructuring benefits offset price/FX headwinds; “cost tailwinds are quite substantial in Q3 and Q4” .
  • Strategic product momentum: registration for Fundatis herbicide with Isoflex active in Great Britain supports growth portfolio ramp; strong demand for Isoflex and fluindapyr cited by management .

What Went Wrong

  • Pricing pressure: company-wide price declined ~3%, over half from “cost-plus” diamide partner adjustments; Asia revenue fell 17% (-15% ex-FX) on lower pricing and India destocking .
  • Cash generation muted: Q2 cash from ops fell to $65.9M (down $226M YoY) and FCF to $39.7M (down $241M YoY) due to smaller inventory reductions vs prior year .
  • GAAP optics: GAAP diluted EPS of $0.53 fell 77% YoY due to prior-year tax incentive gains (Swiss tax incentives), complicating YoY comparisons despite better adjusted EPS .

Financial Results

Quarterly Performance and Cash Generation

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$1,224.3 $791.4 $1,050.5
GAAP Diluted EPS ($USD)-$0.13 -$0.12 $0.53
Adjusted EPS ($USD)$1.79 $0.18 $0.69
Adjusted EBITDA ($USD Millions)$338.9 $119.7 $206.5
Cash from Operations ($USD Millions)$427.9 -$545.0 $65.9
Free Cash Flow ($USD Millions)$388.8 -$595.7 $39.7

Margin Evolution

MetricQ2 2024Q1 2025Q2 2025
Gross Profit Margin %38.34%*40.02%*38.68%*
EBITDA Margin %19.42%*15.13%*19.66%*
Note: Values retrieved from S&P Global.*

Price/Volume/FX Bridge

Driver (% YoY)Q1 2025 vs Q1 2024Q2 2025 vs Q2 2024
Volume-1% +6%
Price-9% -3%
FX-4% -1%

Regional Trends (Q2 2025 YoY)

Region/BusinessReported YoYEx-FX YoY
North America-5% —
Latin America+1% +5%
Asia-17% -15%
EMEA+29% +27%
Plant Health+3% —

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($)FY 2025$4.15B–$4.35B $4.08B–$4.28B (ex-India) Lowered (scope change: excludes India)
Adjusted EBITDA ($)FY 2025$870M–$950M $870M–$950M Maintained
Adjusted EPS ($)FY 2025$3.26–$3.70 $3.26–$3.70 Maintained
Free Cash Flow ($)FY 2025$200M–$400M $200M–$400M Maintained
Revenue ($)Q3 2025—$1.00B–$1.10B (ex-India) New/Updated
Adjusted EBITDA ($)Q3 2025—$210M–$250M New/Updated
Adjusted EPS ($)Q3 2025—$0.78–$0.98 New/Updated
Revenue ($)Q4 2025—$1.24B–$1.34B (ex-India) New/Updated
Adjusted EBITDA ($)Q4 2025—$334M–$374M New/Updated
Adjusted EPS ($)Q4 2025—$1.62–$1.84 New/Updated
DividendNext Payable—$0.58 per share payable Oct 16, 2025 Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
India market strategyDestocking and channel normalization; prudent selling Divest India commercial business; exclude India from adjusted EBITDA/EPS; possible Q3 impairment; rationale: low EBITDA, high working capital Intensified action; exit model adopted
Brazil route to marketAdditional route to market planned for 2025 Direct sales team active; impact expected starting Q3; 35–40% H2 orders booked Accelerating execution
Diamide partner pricingLow-to-mid-single digit price declines expected; cost-plus adjustments Major price reset already occurred; future adjustments incremental Stabilizing
Cost tailwinds (COGS)$175–$200M COGS tailwinds guided for FY25 Lower raw materials, better absorption, restructuring benefits; strongest in Q3 Continuing tailwind
FXQ4: -5%; Q1: -4% headwind Q2: -1% headwind; full-year expected flat to minor headwind Moderating
Growth portfolio (Isoflex/fluindapyr)>75% of Q4 sales growth from growth portfolio Strong demand; GB Fundatis registration; continued ramp Ramping
Pheromones—First full-scale pilot in Q4; contribution dependent on results Early-stage pilot

Management Commentary

  • “Results overall were at the higher end of our expectations, with EBITDA and EPS slightly exceeding the high end of our guidance.” — Pierre Brondeau .
  • “Lower raw material costs… improved fixed cost absorption and restructuring actions… are key contributors to our cost tailwinds, and those tailwinds are quite substantial in Q3 and Q4.” — Andrew Sandifer .
  • “We have made the decision to initiate the divestment of [our] commercial business in India… India generates very limited EBITDA and has substantial working capital.” — Pierre Brondeau .
  • “We anticipate seeing early [Brazil] results starting in the third quarter as Brazil’s next growing season begins.” — Pierre Brondeau .
  • “All three rating agencies reaffirmed their investment grade ratings… leverage was 4.8x vs covenant limit of 5.25x.” — Andrew Sandifer .

Q&A Highlights

  • 2027 target intact: Management reiterated EBITDA ambition of ~$1.2B for 2027, driven by growth portfolio and Renaxypyr strategy .
  • Brazil H2 setup: Orders booked 35–40% of H2 needs; favorable farmer economics in corn; direct route expected to contribute starting Q3 .
  • Diamide pricing: Annual cost-plus reset largely completed; forward adjustments expected to be incremental rather than dramatic .
  • Guidance mechanics for India: India excluded from adjusted EBITDA/EPS and revenue guidance; reported revenue will include India until sale closes; potential Q3 impairment noted .
  • FCF drivers: FY25 FCF $200–$400M reaffirmed, with working capital the key swing factor; receivables collection focus in H2 .

Estimates Context

MetricQ4 2024 Estimate*Q4 2024 ActualQ1 2025 Estimate*Q1 2025 ActualQ2 2025 Estimate*Q2 2025 Actual
Primary EPS ($)$1.604*$1.79 $0.092*$0.18 $0.621*$0.69
Revenue ($USD Millions)$1,312.6*$1,224.3 $777.7*$791.4 $994.6*$1,050.5
EBITDA ($USD Millions)$333.7*$338.9 $113.3*$119.7 $194.8*$206.5
Note: Values retrieved from S&P Global.*

Interpretation:

  • Q2 2025: Broad beats on EPS, revenue, and EBITDA versus consensus; guidance for Q3 (+14% EBITDA at midpoint) suggests upward estimate revisions to H2 .
  • Q1 2025: Modest beats on EPS/revenue/EBITDA amid price/FX headwinds .
  • Q4 2024: EPS beat; revenue miss; EBITDA aligned-to-slight beat vs S&P’s estimate using FMC’s adjusted EBITDA definition .

Key Takeaways for Investors

  • FMC executed a volume-led recovery with disciplined channel management; EMEA outperformance and growth portfolio adoption offset pricing pressure, supporting adjusted EPS/EBITDA beats in Q2 .
  • India commercial exit de-risks working capital and volatility; FY25 adjusted EBITDA/EPS/FCF guidance maintained while revenue guidance re-scoped to exclude India, clarifying go-forward earnings power .
  • Cost tailwinds (lower raw materials, absorption, restructuring) are strongest in Q3, underpinning a guided +14% EBITDA YoY; traders should watch Q3 execution and Brazil direct route contributions .
  • Product catalysts: Isoflex registration in Great Britain and fluindapyr U.S. expansion via Corteva broaden TAM, reinforcing the growth portfolio narrative into H2 and 2026 .
  • Cash generation normalized: Q2 FCF of $39.7M reflects less inventory reduction vs prior year; H2 collections discipline will be pivotal for delivering the $200–$400M FY25 FCF range .
  • Balance sheet: Investment-grade ratings reaffirmed; covenant leverage at 4.8x vs 5.25x limit with expected improvement by year-end from H2 EBITDA and prospective India sale proceeds .
  • Watch for Q3 impairment related to India held-for-sale designation and for pricing stabilization in diamide partner contracts; management indicates the largest reset is behind them .