Intrepid Potash, Inc. (IPI)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered strong profitability and cash generation: Adjusted EBITDA of $16.4M, Adjusted EPS of $0.45, GAAP diluted EPS of $0.25, and cash from operations of $39.9M .
• Segment performance was robust: Potash volumes +25% YoY to 69k tons with COGS/ton down 13% to $337; Trio volumes +11% to 70k tons with COGS/ton down 10% to $235, driving consolidated gross margin to $14.3M vs $7.6M YoY .
• Guidance updated: 2025 and 2026 potash production lowered to 270k–280k tons (from 285k–295k and 300k–310k), CapEx cut to $32–$37M as HB weather and AMAX cavern outcome reduce near-term production; Q3 potash ASP guided to $375–$385/ton and volumes 55k–65k, Trio ASP $383–$393/ton and volumes 27k–37k .
• Estimates context: IPI materially beat S&P Global consensus on normalized EPS (Actual $0.45 vs $0.19*), while revenue/EBITDA bases differ from company-reported figures; use caution when interpreting revenue/EBITDA beats/misses (values marked with asterisks retrieved from S&P Global) *.
• Potential stock reaction catalysts: EPS beat, strong Trio pricing and margins, constructive potash pricing deck, offset by lowered production outlook from HB weather and AMAX cavern developments .

What Went Well and What Went Wrong

What Went Well

• Trio continued to be a standout: 70k tons sold (+11% YoY) at $368/ton (+17% YoY), gross margin $8.1M vs $2.2M YoY; efficiencies from continuous miners and fine langbeinite recovery improved unit economics .
• Potash volumes and cost efficiency improved: 69k tons sold (+25% YoY), COGS/ton down 13% YoY to $337, driving segment gross margin to $4.9M, best in over a year .
• Cash generation and balance sheet strength: Cash from operations of $39.9M; cash and equivalents ~$87M as of Aug 1, 2025, with zero revolver borrowings .

Management quote: “Our adjusted EBITDA of $16.4 million was roughly 75% higher than last year's second quarter… we remain constructive on the outlook for the balance of the year.” — CEO Kevin Crutchfield .

What Went Wrong

• Potash production outlook reduced: 2025/2026 cut to 270k–280k tons due to above-average rainfall at HB and absence of AMAX brine pool; ~15k tons of 2025 production shifted into 1H 2026 .
• Oilfield Solutions softer: Q2 sales fell to $4.3M (–$1.2M YoY) with gross margin down to $1.3M, driven by lower water sales and timing of surface use/easements .
• One-time non-GAAP adjustments: Q2 included $2.155M unpermitted discharge penalty and $0.638M separation costs in adjusted earnings reconciliations .

Financial Results

Summary Financials (GAAP and Non-GAAP)

Segment Breakdown

KPIs and Unit Economics

Q2 2025 vs S&P Global Consensus

Values with asterisks retrieved from S&P Global. Reporting bases for revenue and EBITDA may differ from company “Sales” and “Adjusted EBITDA,” respectively; use caution when interpreting beats/misses.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Our second quarter was highlighted by solid pricing and sales volumes… adjusted EBITDA of $16.4 million was roughly 75% higher than last year's second quarter.” — Kevin Crutchfield, CEO .
• “We now expect our potash production will be between 270,280 tons for both the 2025 and 2026 calendar years.” — Matt Preston, CFO .
• “We successfully drilled the AMAX Cavern sample well… did not find an existing brine pool… evaluating options to pursue an injection well and pipeline.” — Kevin Crutchfield .
• “For Q3, we expect potash sales volumes 55k–65k tons at ASP $375–$385; Trio volumes 27k–37k at ASP $383–$393.” — Matt Preston .

Q&A Highlights

• Production timing/quantification: CFO clarified 2026 net reduction of ~30k tons vs prior forecast (45k total impact offset by 15k shift from 2025) .
• Cost implications: With ~12–13% lower potash production in 2026, cost/ton could rise ~8–10% absent cuts; management seeking mitigation; pricing strength may offset margin impact .
• AMAX timeline/permits: Team evaluating injection well and pipeline permits; AMAX remains critical to Carlsbad long-term plan despite lack of existing brine pool .
• Capital allocation: Board actively discusses options; strong cash build could catalyze future decisions, with potential Exxon-related proceeds as a variable (no specifics provided) .

Estimates Context

• EPS: IPI delivered a significant beat on S&P Normalized/Primary EPS (Actual $0.45 vs consensus $0.19*) for Q2 2025. GAAP diluted EPS was $0.25 *.
• Revenue: S&P consensus $61.6M* vs S&P actual $57.3M*, while company-reported “Sales” were $71.5M; reporting bases differ, so caution is warranted when interpreting a beat/miss *.
• EBITDA: S&P consensus $13.0M* vs S&P actual $13.6M*, while company-adjusted EBITDA was $16.4M *.

Values marked with asterisks retrieved from S&P Global.

Key Takeaways for Investors

• Strong profitability and cash generation with Adjusted EPS $0.45 and CFO $39.9M provide near-term support; cash at ~$87M and undrawn revolver enhance flexibility .
• Trio remains the core earnings engine with resilient pricing, efficient operations, and sustained COGS/ton at $235; monitor seasonally softer Q3 volumes within guided ranges .
• Potash pricing tailwinds (supportive contracts, summer +$20/ton) may offset 2025–26 volume headwinds; Q3 ASP guide $375–$385/ton suggests continued firmness .
• Near-term production downticks from HB weather and AMAX outcome are the principal risk; management plans HB mill shutdown to optimize evaporation and is pursuing AMAX injection alternatives .
• Non-GAAP adjustments (unpermitted discharge penalty, separation costs) influenced adjusted figures; GAAP/adjusted EPS divergence will matter for valuation frameworks .
• For trading: EPS beat and constructive pricing are positives; watch subsequent updates on AMAX permitting/injection plan and any oilfield water sales recovery as catalysts .
• Medium-term: Execution on core potash assets (HB, Wendover), Trio efficiency gains, and capital allocation decisions (given rising cash) are key to re-rating potential .