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LSB INDUSTRIES, INC. (LXU)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered a clear inflection: revenue rose to $155.4M, GAAP diluted EPS to $0.10, and Adjusted EBITDA to $40.1M, with both price and volume tailwinds and no planned turnarounds; Street revenue and EPS were beaten, while EBITDA underperformed on a non-adjusted SPGI basis .
  • S&P Global consensus indicated LXU beat Q3 revenue ($155.4M vs $138.3M*) and Primary EPS ($0.152* actual vs $0.085* est.), but missed on EBITDA ($35.4M* vs $38.4M*); company-reported Adjusted EBITDA was $40.1M, reflecting non-GAAP adjustments .
  • Management expects Q4 to be higher than prior-year on better pricing/production; Tampa ammonia settled at $650/mt for Nov, NOLA UAN averaging >$300/t early-Q4, with ~35% of natural gas costs now contractually passed through—improving earnings visibility .
  • Narrative/catalysts: robust industrial demand (nitric acid, AN for mining), tight U.S. nitrogen supply, strengthening UAN, CCS (El Dorado) tracking for end-2026 start; management emphasized renewed free cash flow generation and net leverage ~2x as of Q3 .

Values with * are retrieved from S&P Global.

What Went Well and What Went Wrong

  • What Went Well

    • Price and volume tailwinds across products; net sales +42% y/y with UAN revenue +103% and AN & Nitric Acid +20% as higher operating rates and absence of 2024 turnarounds lifted volumes .
    • Adjusted EBITDA more than doubled y/y to $40.1M, driven by pricing and volume, despite higher gas and transition costs; management reiterated free cash flow resumption and ~2x net leverage .
    • Strategic positioning: strong industrial markets—tariff-supported domestic MDI boosting nitric acid; mining demand robust on copper/gold; “We’re encouraged with our progress and remain confident…creating long-term value for shareholders” (CEO) .

  • What Went Wrong

    • Non-adjusted EBITDA (SPGI) missed consensus ($35.4M* actual vs $38.4M* est.), reflecting higher natural gas and costs linked to the HDAN-to-AN solution transition (railcar and maintenance) .
    • UAN production undershot internal expectations in Q3 (volumes ~134.6k tons vs ~151.8k in Q2); management expects normalization in Q4 .
    • Input costs: average natural gas used in production was $3.08/MMBtu vs $2.17 y/y; cost headwinds persisted, though partial mitigation via ~35% gas cost pass-through in industrial mix .

Values with * are retrieved from S&P Global.

Financial Results

Consolidated P&L (GAAP) and Key Non-GAAP

MetricQ4 2024Q1 2025Q2 2025Q3 2025
Revenue ($M)$134.9 $143.4 $151.3 $155.4
Net Income ($M)$(9.1) $(1.6) $3.0 $7.1
Diluted EPS ($)$(0.13) $(0.02) $0.04 $0.10
Gross Profit ($M)$6.0 $14.4 $23.2 $25.5
EBITDA ($M, SPGI)*$19.8*$24.7*$33.6*$35.4*
Adjusted EBITDA ($M, Company)—$29.1 $38.3 $40.1
Gross Margin (% , SPGI)*4.48%*10.03%*15.32%*16.43%*
EBITDA Margin (% , SPGI)*14.68%*17.19%*22.24%*22.78%*

Values with * are retrieved from S&P Global.

Notes: Q3 2025 diluted EPS (GAAP) $0.10; Street “Primary EPS” differs in definition and is shown in Estimates Context below .

YoY Comparison (Select Q3 Metrics)

MetricQ3 2024Q3 2025YoY Direction
Revenue ($M)$109.2 $155.4 Higher
Net Income ($M)$(25.4) $7.1 Higher
Diluted EPS ($)$(0.35) $0.10 Higher
Adjusted EBITDA ($M)$17.5 $40.1 Higher
Avg Natural Gas Used ($/MMBtu)$2.17 $3.08 Higher

Product Sales Mix (Revenue)

Product Sales ($M)Q3 2024Q2 2025Q3 2025
AN & Nitric Acid$48.0 $61.7 $57.5
UAN$25.3 $52.3 $51.4
Ammonia$28.5 $26.8 $37.1
Other$7.4 $10.5 $9.4
Total Net Sales$109.2 $151.3 $155.4

KPIs: Volumes, ASPs, Benchmarks, Input Costs

KPIQ3 2024Q2 2025Q3 2025
Volumes – AN & Nitric Acid (short tons)127,139 161,509 159,662
Volumes – UAN (short tons)95,468 151,807 134,634
Volumes – Ammonia (short tons)68,497 66,069 86,322
ASP – AN & Nitric Acid ($/short ton)$308 $328 $307
ASP – UAN ($/short ton)$222 $308 $333
ASP – Ammonia ($/short ton)$387 $369 $400
Tampa Ammonia Benchmark ($/ton)$485 $416 $491
NOLA UAN ($/ton)$204 $344 $336
Avg Nat Gas Used in Production ($/MMBtu)$2.17 $3.37 $3.08

Guidance Changes

Metric/TopicPeriodPrevious GuidanceCurrent Guidance/CommentaryChange
Q4 performance vs prior-yearQ4 2025Not previously specified“We’d expect the fourth quarter of 2025 to be higher than the prior year fourth quarter” (pricing, production >, costs higher) Qualitative raise vs PY
Tampa Ammonia settlementNov 2025—Settled at $650/mt (Nov), up from $590/mt (Oct) Update
NOLA UAN pricingQ4-to-date—Averaging >$300/ton so far in Q4 Update
Henry Hub gasQ4-to-date—~ $3.45/MMBtu, trending higher seasonally Update
Gas cost pass-throughOngoing—~35% of natural gas costs passed through (industrial mix) Structural improvement
CCS (El Dorado) startEnd-2026 targetEnd-2026Reaffirmed; awaiting Class VI permit; expect ~$15M annual EBITDA, majority from 2027 Maintained
Numeric revenue/EBITDA guidance——Not provided —

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
Industrial demand (nitric acid/AN for mining)Strong demand; copper/gold mining supporting AN; nitric acid steady “Demand for AN for explosives is robust… MDI production up on tariffs/anti-dumping supports nitric acid” Strengthening
UAN pricing and inventoriesUAN strengthened; tight U.S. supply; inventories tight UAN ASP $333/ton; producers well sold; expect healthy prices into Q1–Q2 2026 Supportive
Ammonia marketHealthy; delays in new U.S. capacity Tight supply; Tampa rising; Middle East/Trinidad disruptions; Nov at $650/mt Tightening
Natural gas costsMaterial y/y headwind in H1; moderated into Q3 Q3 used gas $3.08/MMBtu; ~35% pass-through now Improving visibility
Product mix transition (HDAN → AN solution)Strategy noted Transition completed; some Q3 costs (railcar/maintenance) Executed; transient costs
Free cash flowFocus stated; heavy capex in 2024/H1’25 Back to FCF; ~$20M YTD, ~$36M in Q3 Positive inflection
CCS (El Dorado)Permit under review; end-2026 start targeted Permit tech review expected Q1 next year; end-2026 start; ~$15M annual EBITDA; monetization paths On track

Management Commentary

  • “The third quarter presented a strong market backdrop, and we delivered solid results with clear momentum… We’ve generated solid free cash flow so far this year… strengthening our balance sheet” — Mark Behrman, CEO .
  • “Higher pricing and increased sales volumes were somewhat offset by higher natural gas and other costs… we are back to generating free cash flow… net leverage at approximately two times” — Cheryl Maguire, CFO .
  • “Demand for ammonium nitrate for explosives is robust… MDI production… supported by tariffs and anti-dumping duties… nitric acid sales remained strong” — Damien Renwick, CCO .
  • On CCS: “We continue to expect the technical review of our permit to be completed in the first quarter of next year… operations to then begin by the end of 2026… approximately $15 million in annual EBITDA” — CEO .

Q&A Highlights

  • Ammonia market tightness and pricing flow-through: management cited supply disruptions (Middle East, Trinidad), delays in new U.S. capacity, and healthy fall ammonia application; Tampa index flows through to pricing; Q4 outlook benefits .
  • UAN outlook into 2026: management “well sold forward,” expects tightness and healthy pricing into Q1–Q2, as Chinese urea exports likely remain constrained; producers comfortable on inventory .
  • Cost/mix impacts from HDAN transition: higher railcar/maintenance costs hit Q3; expect AN solution/nitric acid volumes “in line” with Q3; UAN volumes likely higher in Q4 .
  • Contracting and margin power: stronger industrial demand and supportive nitrogen pricing aid renewals; impact depends on expiries but environment supports maintaining/increasing prices .
  • Growth options: evaluating a second urea expansion (potential DEF entry) and an El Dorado ammonia expansion (~100k tons); would consider offtake backstops for larger expansions; CCS monetization via product premiums and environmental attributes .

Estimates Context

  • Q3 2025 vs S&P Global consensus: Revenue beat and EPS beat; EBITDA below consensus (non-adjusted).

    • Revenue: $155.4M actual vs $138.3M est. — Beat* .
    • Primary EPS (SPGI): $0.152* actual vs $0.085* est. — Beat*. GAAP diluted EPS reported by company was $0.10 .
    • EBITDA (SPGI): $35.4M* actual vs $38.4M* est. — Miss*. Company Adjusted EBITDA was $40.1M .

  • Forward consensus (SPGI):

    • Q4 2025: Revenue $157.7M*, Primary EPS $0.124*;
    • FY 2025: Revenue $603.2M*, Primary EPS $0.367*;
    • FY 2026: Revenue $581.1M*, Primary EPS $0.436*.

Values with * are retrieved from S&P Global.

Estimates and Actuals Table (SPGI)

MetricQ3 2025 Estimate*Q3 2025 Actual*Q4 2025 Estimate*FY 2025 Estimate*FY 2026 Estimate*
Revenue ($M)138.3155.4157.7603.2581.1
Primary EPS ($)0.0850.1520.1240.3670.436
EBITDA ($M)38.435.446.5154.0146.2
# EPS Estimates4—223
# Revenue Estimates3—145
Target Price (Consensus, $)10.510.510.510.510.5

Values with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Mix/price tailwinds plus higher run-rates delivered a revenue/EPS beat; non-adjusted EBITDA under-shot Street, but company Adjusted EBITDA was strong—expect investors to focus on cash generation and margin visibility from industrial pass-through .
  • Macro setup looks favorable into Q4–H1’26: Tampa ammonia rising, UAN pricing firm, tight U.S. supply, robust mining and MDI-driven nitric acid demand—supportive for pricing and utilization .
  • Transition from HDAN to AN solution is complete; near-term cost noise should fade, with benefits accruing via contract structures and pass-throughs (~35% gas exposure hedged via pricing) .
  • Balance sheet and FCF improving: ~$36M FCF in Q3 and ~2x net leverage enhances optionality for reliability capex and selective growth (urea/DEF, El Dorado ammonia debottleneck) .
  • CCS (El Dorado) remains a 2026–2027 earnings lever (~$15M EBITDA run-rate), with multiple monetization avenues (premium products, environmental attributes) .
  • Watch list: Q4 execution on UAN volumes, gas cost trend into winter, any normalization in ammonia/UAN prices, and timing/progress on the EPA Class VI permit for CCS .
  • Setup for estimate revisions: likely upward bias to revenue/EPS near term given pricing and volumes; EBITDA modeling should distinguish company Adjusted EBITDA vs SPGI EBITDA and reflect pass-through dynamics .

Appendix: Additional Data (Company-Reported)

  • Product sales YoY (Q3 2025 vs Q3 2024): UAN +103%, Ammonia +30%, AN & Nitric Acid +20% .
  • Key Q3 volumes: 380.6k total tons (AN & Nitric 159.7k; UAN 134.6k; Ammonia 86.3k) vs 291.1k in Q3’24 .
  • Average selling prices: UAN $333/t (+50% y/y), Ammonia $400/t (+3% y/y), AN & Nitric Acid $307/t (flat) .
  • Gas inputs: Avg used $3.08/MMBtu vs $2.17 y/y .

References:

  • Q3 2025 8‑K/Press Release and financials .
  • Standalone press release (same metrics presentation) .
  • Q2 2025 press release for prior-quarter comps .
  • Q1 2025 press release for multi-quarter context .
  • Q3 2025 earnings call transcript for commentary and outlook .

Values with * are retrieved from S&P Global.