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MOSAIC CO (MOS)·Q1 2025 Earnings Summary

Executive Summary

  • Mosaic reported Q1 2025 net income of $238 million, diluted EPS $0.75 and adjusted EPS $0.49, with adjusted EBITDA $544 million; gross margin rate improved to 19% on stronger pricing and stripping margins .
  • Against S&P Global consensus, adjusted EPS beat ($0.49 vs $0.45*) while revenue missed ($2.62B vs $2.71B*); 14 EPS and 10 revenue estimates contributed to consensus (Values retrieved from S&P Global) .*
  • Guidance: Mosaic raised 2025 potash production to 9.0–9.4Mt (from 8.7–9.1Mt in Feb), maintained capex $1.2–$1.3B, and introduced Mosaic Fertilizantes sales volume guidance of 10.0–10.8Mt; Q2 price/volume outlooks were increased (DAP $635–$655/t; MOP $230–$250/t) .
  • Stock-relevant narrative drivers: elevated phosphate stripping margins and improving potash pricing on tightened global supply, plus Brazil efficiency gains; FX tailwinds benefited Q1 EPS via notable items, but management guided to operational cost improvements as the more durable driver .

What Went Well and What Went Wrong

What Went Well

  • Pricing upside and margin expansion: realized prices exceeded guidance in both phosphate ($623/t) and potash ($223/t), lifting gross margin rate to 19% vs. 15% YoY . CEO: “first quarter realized prices…exceeded our guidance ranges” .
  • Brazil turnaround: Mosaic Fertilizantes operating earnings +133% YoY to $98M and adjusted EBITDA +47% YoY to $122M on unit-cost reductions and higher volumes; management expects “significant sequential segment adjusted EBITDA growth in the second quarter” . CFO: “Q2 EBITDA for Fertilizantes will be above $150 million” .
  • Strategic progress and raised potash plan: 2025 potash production guidance increased to meet strong demand; Esterhazy Hydrofloat on track to reduce cash costs and add 400kt capacity, supporting higher-margin non-standard product mix .

What Went Wrong

  • Revenue miss vs consensus and volume headwinds: consolidated net sales declined 2% YoY to $2.62B, impacted by lower Potash selling prices and phosphate volumes due to planned turnarounds .*
  • Unit cost pressure in phosphate: cash conversion cost rose to $134/t (fixed cost absorption during downtime), with management targeting $95–$100/t by year-end as volumes normalize . CFO cited extraordinary maintenance outside idle/turnaround lines .
  • FX/derivatives volatility: notable items included a $148M FX gain and a $59M derivatives gain offset by a $(117)M Ma’aden mark-to-market (net EPS impact +$0.26), highlighting non-operating noise; adjusted EBITDA declined YoY to $544M .

Financial Results

Consolidated performance vs prior periods and estimates

MetricQ1 2024Q4 2024Q1 2025
Net Sales ($USD Billions)$2.68 $2.82 $2.62
Diluted EPS (GAAP, $)$0.14 $0.53 $0.75
Adjusted EPS (non-GAAP, $)$0.65 $0.45 $0.49
Gross Margin Rate (%)15% 11% 19%
Operating Earnings ($USD Millions)$173 $100 $339
Adjusted EBITDA ($USD Millions)$576 $594 $544
Revenue Consensus Mean ($USD Billions)——$2.71*
Primary EPS Consensus Mean ($)——$0.45*
Primary EPS - # of Estimates——14*
Revenue - # of Estimates——10*

Values marked with * retrieved from S&P Global.

Segment breakdown (Net Sales, Operating Earnings, Adjusted EBITDA)

SegmentMetricQ1 2024Q4 2024Q1 2025
PotashNet Sales ($USD Millions)$643 $557 $570
PotashOperating Earnings ($USD Millions)$198 $123 $157
PotashAdjusted EBITDA ($USD Millions)$281 $212 $240
PhosphateNet Sales ($USD Billions)$1.2 $1.2 $1.1
PhosphateOperating Earnings ($USD Millions)$40 $44 $139
PhosphateAdjusted EBITDA ($USD Millions)$277 $341 $276
Mosaic FertilizantesNet Sales ($USD Billions)$0.9 $1.1 $0.9
Mosaic FertilizantesOperating Earnings ($USD Millions)$42 $79 $98
Mosaic FertilizantesAdjusted EBITDA ($USD Millions)$83 $82 $122

KPIs and unit costs

KPIQ1 2024Q4 2024Q1 2025
Potash MOP Price (FOB mine, $/t)$241 $199 $223
Potash Sales Volumes (Mt)2.2 2.2 2.1
Potash Cash Cost of Production ($/t)$72 $73 $78
Phosphate DAP Price (FOB plant, $/t)$598 $593 $623
Phosphate Sales Volumes (Mt)1.6 1.6 1.5
Phosphate Cash Conversion Cost ($/t)$110 $118 $134
Fertilizantes Avg Finished Price ($/t)$463 $433 $452
Fertilizantes Sales Volumes (Mt)1.7 2.2 1.8
Fertilizantes Gross Margin (GAAP, $/t)$44 $46 $69

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Potash Production Volumes (Mt)FY 20258.7–9.1 9.0–9.4 Raised
Phosphate Production Volumes (Mt)FY 20257.2–7.6 7.2–7.6 Maintained
Mosaic Fertilizantes Sales Volumes (Mt)FY 2025—10.0–10.8 New
Total Capital Expenditures ($B)FY 2025$1.2–$1.3 $1.2–$1.3 Maintained
DDA ($B)FY 2025$1.1–$1.2 $1.1–$1.2 Maintained
SG&A ($M)FY 2025$470–$500 $470–$500 Maintained
Net Interest Expense ($M)FY 2025$180–$200 $180–$200 Maintained
Effective Tax RateFY 2025High-20s% High-20s% Maintained
Phosphate Sales Volumes (Mt)Q2 2025—1.7–1.9 New
DAP Price (FOB plant, $/t)Q2 2025—$635–$655 New
Potash Sales Volumes (Mt)Q2 2025—2.3–2.5 New
MOP Price (FOB mine, $/t)Q2 2025—$230–$250 New

Management also noted Q1 guide (from Feb) was DAP $595–$615 and MOP $200–$220; current Q2 guidance is higher .

Earnings Call Themes & Trends

TopicQ3 2024 MentionsQ4 2024 MentionsQ1 2025 Current PeriodTrend
Phosphate asset reliability and turnaroundsRecovery to full operations post hurricanes; margin strength despite lower volumes Heavy turnarounds in Q1 2025 planned; acceleration of reliability CapEx Bartow/New Wales turnarounds completed; March production among top-3 in 18 months; maintaining 7.2–7.6Mt guidance Improving reliability; cost normalization targeted
Potash pricing and supplyPrices bottoming and moving higher; balanced demand Strong demand; tariff uncertainty; affordable prices; Hydrofloat and compaction projects Price momentum across geographies; Q2 realized $230–$250/t; volume guide raised; cost range $64–$69/t targeted H2 Improving pricing; cost reductions coming H2
Brazil (Fertilizantes) execution & FXBad debt reserve; underlying cost improvements; seasonality Strong margins; FX headwinds on structured payables; EBITDA underlying ~$120M Operating earnings +133% YoY; adjusted EBITDA +47% YoY; Q2 EBITDA expected >$150M; 15% FY sales volume growth; credit-mix shift to mega farmers/co-ops Structural improvements; strong Q2 seasonality
Tariffs/macroNA pricing reset minimal; tight phosphate supply Canadian potash tariff uncertainty; minimal demand destruction expected Ammonia exempt; minimal tariff impact expected; U.S. buyers not concerned; supply tightness supports prices Manageable macro; supportive pricing
Mosaic Biosciences9M acres and growth vector Doubling revenues and acreage; more disclosure planned >100% YoY product sales growth; 2025 revenue on track ~$70M; margins 60% own products/30–40% licensed; China launch (Neptunion) Rapid growth; product pipeline scaling

Management Commentary

  • Bruce Bodine (CEO): “First quarter realized prices of $623 per tonne for phosphate and $223 per tonne for potash exceeded our guidance ranges” . “We increased our 2025 potash production plans to meet growing international demand” .
  • Jenny Wang (EVP, Commercial): “We do not anticipate any price reset post the spring season in North America and the prices in the rest of the world…are pretty much at parity at $700 level” . “India will see phosphate demand return…to 6.4 million tonnes, up 40% YoY” .
  • Luciano Siani Pires (CFO): “It’s very reasonable to expect that Q2 EBITDA for Fertilizantes will be above $150 million” . “Potash costs should be in range in H2; phosphates H2 in range, full-year phosphate a little over given high Q1 cost” .

Q&A Highlights

  • DAP price realization: April DAP prices were “higher than the high end” of guidance; management sees continued strength through Q2 and minimal summer reset .
  • Potash cost cadence: Costs elevated in Q1 due to weather/logistics and maintenance; cost per tonne expected to “dramatically improve” into H2 with Hydrofloat and Belle Plaine normalization .
  • Tariffs on Canadian potash: Ammonia costs insulated; U.S. demand affordability remains strong; tariffs likely borne downstream with limited demand impact; price momentum already evident .
  • Phosphate production trajectory: Despite heavy turnarounds, full capacity output expected in H2; annual guidance 7.2–7.6Mt maintained with potential upside above 2.0Mt per quarter in H2 .
  • Brazil EBITDA math and credit quality: Distribution margins normalizing to $30–$40/t with ~30% Q2 volume uplift; shift towards mega-farmers, traders, and co-ops to mitigate credit risk .

Estimates Context

  • Q1 2025 actuals vs S&P Global consensus: Adjusted EPS $0.49 vs $0.45*, a beat; Revenue $2.62B vs $2.71B*, a miss; 14 EPS estimates and 10 revenue estimates underpin consensus (Values retrieved from S&P Global) .*
  • Implications: Elevated margins offset unit-cost pressure in phosphate; analysts may raise price/volume and Fertilizantes EBITDA assumptions for Q2, while trimming potash cost trajectory to H2 and adjusting consolidated revenue for planned phosphates downtime .

Key Takeaways for Investors

  • Phosphate narrative is constructive: tight supply, elevated stripping margins, and stronger realized prices underpin gross margin resilience despite temporary conversion-cost pressure; watch H2 cost normalization to $95–$100/t .
  • Potash setup improving: global supply reductions and mix shift to non-standard products support margin expansion; Hydrofloat and production plan raise (9.0–9.4Mt) are catalysts for H2 cost/earnings leverage .
  • Brazil execution is a tailwind: structural cost reductions, market access, and a healthier credit mix point to Q2 EBITDA >$150M and ~15% FY volume growth .
  • Near-term trading: Q2 guide implies higher realized prices (DAP and MOP) and volume seasonality—position for potential upside in Q2 segment profitability, particularly Fertilizantes .
  • Estimate revisions: Expect upward adjustments to Q2 price realizations and Fertilizantes EBITDA, with H2 potash/phosphate cost normalization shaping FY margin trajectory; revenue modeling should reflect Q1 turnarounds and H2 volume recovery .
  • Watch macro/tariffs: Management views impact as manageable; affordability remains supportive and buyers indicate limited concern—focus on sustained price momentum and logistics fluidity .
  • Strategic optionality: Capital reallocation (Carlsbad/Taquari processes) plus Biosciences growth (target ~$70M 2025 revenue) provide medium-term multiple and cash-flow optionality .
Notes
* Values retrieved from S&P Global.