Name: LINDSAY CORP Q1 2025 Earnings Call
Start: 2025-01-07T16:01:00.000Z

Executive Summary

Q1 FY2025 delivered modest topline growth and stronger earnings: revenue rose 3% to $166.3M while diluted EPS increased 15% to $1.57, driven by international irrigation projects and infrastructure margin expansion despite softer North America/Brazil irrigation demand .
Mix shift toward lower-margin international projects compressed irrigation segment margin (16.8% vs. 18.1% YoY), but infrastructure operating margin expanded to 21.5% on cost controls and efficiency gains, lifting segment operating income 14% despite lower revenue .
Backlog remains elevated at $168.2M (vs. $86.8M YoY), underpinned by the large MENA project; management also secured a >$20M Road Zipper project expected to fully deliver in Q2, a near-term revenue and margin catalyst .
Strategic Pessl Instruments minority stake closed (49.9%), expanding Lindsay’s connected device footprint and ARR potential across FieldNET/FieldWise; management highlighted access to 240k+ connected devices via partnership to drive future ARR growth .

What Went Well and What Went Wrong

What Went Well
- International irrigation growth offset cyclical weakness: international irrigation revenue +37% YoY to $69.4M, primarily from the large MENA project and stronger Europe/LatAm, partially offset by Brazil softness; FX headwind was ~$2.1M .
- Infrastructure profitability improved on lower revenue: operating margin expanded to 21.5% (from 17.1%), with operating income +14% YoY on improved manufacturing efficiency and lower OpEx .
- Earnings quality tailwinds: EPS +15% YoY benefited from higher other income and a lower effective tax rate; CFO noted mix shift of earnings from Brazil to Turkey’s free trade zone (tax-advantaged), implying ~23% ETR going forward .
What Went Wrong
- North America irrigation weakness: revenue fell 13% YoY to $77.7M on lower unit volume, less favorable mix (shorter machines), and selective discounting, while commodity-driven farm income pressure constrained demand .
- Irrigation margin dilution: irrigation operating margin fell to 16.8% (from 18.1%) due to a higher proportion of lower-margin international project revenue .
- Infrastructure revenue timing: top line down 9% YoY to $19.2M on lease timing and lower road safety product sales; management emphasized quarter-to-quarter timing gaps in lease projects despite stability over a full year .

Financial Results

Overall performance trend (sequential: Q3 FY2024 → Q4 FY2024 → Q1 FY2025)

Metric	Q3 FY2024	Q4 FY2024	Q1 FY2025
Revenue ($M)	$139.2	$155.0	$166.3
Operating Income ($M)	$19.9	$13.5	$20.9
Operating Margin (%)	14.3%	8.7%	12.6%
Net Earnings ($M)	$20.4	$12.7	$17.2
Diluted EPS ($)	$1.85	$1.17	$1.57

Q1 FY2025 YoY comparison

Metric	Q1 FY2024	Q1 FY2025
Revenue ($M)	$161.4	$166.3
Operating Income ($M)	$21.1	$20.9
Operating Margin (%)	13.1%	12.6%
Net Earnings ($M)	$15.0	$17.2
Diluted EPS ($)	$1.36	$1.57

Segment breakdown (sequential: Q3 FY2024 → Q4 FY2024 → Q1 FY2025)

Segment	Metric	Q3 FY2024	Q4 FY2024	Q1 FY2025
Irrigation	North America Revenue ($M)	$68.2	$61.7	$77.7
	International Revenue ($M)	$46.6	$64.2	$69.4
	Total Revenue ($M)	$114.8	$125.9	$147.1
	Operating Income ($M)	$19.5	$17.1	$24.7
	Operating Margin (%)	17.0%	13.6%	16.8%
Infrastructure	Revenue ($M)	$24.4	$29.1	$19.2
	Operating Income ($M)	$6.3	$5.6	$4.1
	Operating Margin (%)	25.8%	19.2%	21.5%

KPIs and balance sheet snapshots

KPI	Q3 FY2024	Q4 FY2024	Q1 FY2025
Backlog ($M)	$246.9 (as of 5/31/24)	$180.9 (as of 8/31/24)	$168.2 (as of 11/30/24)
Cash & Cash Equivalents ($M)	$140.221	$190.879	$194.066
Dividend Declared per Share ($)	$0.35	$0.36	$0.36

Notes:

Q1 revenue growth was led by MENA project volume; NA irrigation remained pressured by lower commodity prices and grower profitability .
EPS benefited from higher other income and lower effective tax rate; CFO cited earnings mix shift to Turkey free trade zone for the MENA project .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Infrastructure revenue/margin mix (Road Zipper)	FY2025; Q2 timing	Expect continued growth supported by U.S. infrastructure funding; pipeline visibility but timing uncertain	Signed >$20M Road Zipper project; expected full delivery in Q2; accretive to segment and company margins (historically >30%)	Raised specificity / Timing clarified
North America irrigation demand	Near-term	Stable to tempered until farm income improves	Softer near term; signs of nearing trough with some commodity stabilization	Maintained (tone slightly cautious)
Brazil irrigation	Near-term	Headwinds from prices/credit; some improvement in rates/prices	Order volume stabilized; state-level financing in Paraná/São Paulo supportive H2; not significantly better/worse near term	Slightly improved visibility
International projects (MENA)	FY2025–FY2026	Project underway; deliveries through FY2026	Continued growth in developing markets; MENA project contributed ~$20M in Q1; cadence ~ $20M per quarter expected	Maintained with cadence detail
Effective tax rate	FY2025	Not specified	Lower ETR expected (~23%) due to earnings mix (Turkey free trade zone)	New
Dividend	Ongoing	$0.36 declared in Q4	$0.36 declared in Q1	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 FY2024, Q4 FY2024)	Current Period (Q1 FY2025)	Trend
International irrigation (MENA)	Q3: secured >$100M multi-year MENA project ; Q4: delivery began	Drove 37% YoY international growth; ~$20M recognized in Q1; cadence ~ $20M/quarter	Positive execution; sustained contribution
North America irrigation	Q3: softness/wet conditions ; Q4: steady demand with improved volume	Softer market near term; possible trough approaching with commodity stabilization	Mixed/near trough
Brazil irrigation	Q3: lower prices/tight credit ; Q4: headwind persists; rates declining	Stabilized orders; state financing programs supportive; near-term neither much better nor worse	Stabilizing
Infrastructure (Road Zipper)	Q3: lease momentum; margin expansion ; Q4: improved results; higher RZ sales/leases	>$20M project finalized post-quarter; full Q2 delivery expected; accretive margins	Strengthening pipeline
Pricing/ASPs	Q3: slightly lower ASPs NA	Selective discounting; margin neutral; steel softer but other inputs inflating; overall cost stable	Competitive yet controlled
FX impact	Q3: +$0.7M benefit	Q4: -$3.1M ; Q1: -$2.1M	Volatile headwind recently
Tax rate	Q3: Brazil tax credit boosted EPS ; Q4: low ETR 16.1%	Lower ETR expected (~23%) from mix to Turkey FZ	Structurally lower vs. historical Brazil mix

Management Commentary

CEO on resilience and mix: “We were able to deliver revenue growth and expansion to net earnings, despite the ongoing cyclical challenges… our international irrigation business drove revenue growth… supported by additional volumes from our large project in the MENA region.”
CEO on infrastructure: “Revenues… were slightly lower… however our diligent focus on cost management and manufacturing efficiency helped expand margins and drive higher operating income.”
CEO on pipeline and strategy: “We finalized a Road Zipper System contract valued at more than $20 million… expect to fully deliver in our fiscal second quarter.”
CFO on project cadence: “We were slightly above $20 million for the quarter… we were expecting roughly $20 million a quarter” for the MENA project .
CFO on tax rate: “Going forward, probably somewhere in that 23% range” due to shift of earnings from Brazil to Turkey free trade zone for the MENA project .
Technology/ARR: “With the [Pessl] investment, we now have access to over 240,000 connected devices, which will support long-term growth in annual recurring revenue.”

Q&A Highlights

International project cadence: MENA recognition slightly above $20M in Q1; quarterly cadence targeted around $20M going forward .
NA pricing and cost: Selective discounting in pockets; overall margin neutral; steel softening offset by inflation in other inputs; cost environment stable .
Infrastructure lease timing: Quarter-to-quarter variability from project start/stop timing, though stable over full-year; new >$20M Road Zipper project accretive to margins .
Brazil outlook: Market not worsening, not improving materially near term; state financing programs could provide uplift later in year .
Aftermarket from MENA: Expect ongoing parts consumption given high operating hours; initial spares included may delay near-term parts revenue .
Effective tax rate: Lower run-rate (~23%) expected given earnings mix; interest income remains a tailwind; FX remains unpredictable .

Estimates Context

S&P Global consensus estimates could not be retrieved at this time due to data access limits; as a result, we cannot assess beat/miss versus consensus for Q1 FY2025, Q2 FY2025, or FY2025. We will update when access is restored. (S&P Global consensus unavailable)

Key Takeaways for Investors

International projects are doing the heavy lifting: MENA contributed ~+$20M in Q1 and is expected to continue near this cadence, supporting revenue visibility despite NA/Brazil softness .
Infrastructure is a margin lever: Ongoing cost/efficiency gains and the >$20M Road Zipper project scheduled for full Q2 delivery should lift mix and margins near term; management expects accretion at segment and company levels, historically >30% project margins .
Earnings quality improving: Lower ETR (~23%) from geographic mix and increased other income support EPS durability even if irrigation volumes remain cyclically soft .
Backlog still robust: $168.2M backlog (up sharply YoY) provides medium-term visibility, though stepped down sequentially as deliveries commenced; additional projects in MENA remain in view .
NA irrigation likely near trough: Commodity stabilization and potential policy tailwinds could incrementally improve sentiment, but management still anticipates near-term softness; maintain cautious expectations for NA/Brazil .
Strategic AgTech positioning strengthened: Pessl investment deepens sensor footprint and ARR opportunity across FieldNET/FieldWise; builds longer-term differentiation and monetization avenues .
Near-term trading setup: Q2 should benefit from full Road Zipper project delivery and continued MENA contributions; watch for updates on Brazil financing traction, NA demand indicators, and FX headwinds .

LINDSAY CORP (LNN)·Q1 2025 Earnings Summary