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MOSAIC CO (MOS)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 net sales were $3.01B, GAAP diluted EPS was $1.29, and adjusted EPS was $0.51; adjusted EBITDA was $566M. GAAP EPS benefited from $0.78 of notable items (FX/derivatives/Ma’aden mark-to-market), while adjusted EBITDA was pressured by larger-than-usual provisions and elevated idle/turnaround costs .
  • Mosaic Fertilizantes outperformed with operating income of $109M and adjusted EBITDA of $159M; management guided Q3 segment EBITDA to “over $200M” on peak seasonal volumes and distribution margins normalizing .
  • Guidance updates: Potash production raised to 9.3–9.5Mt (from 9.0–9.4Mt); Phosphate production lowered to 6.9–7.2Mt (from 7.2–7.6Mt); SG&A raised to $520–$550M (from $470–$500M); Q3 DAP $700–$720/t and MOP $270–$290/t .
  • Stock reaction: Results missed Street estimates (EPS $0.51 vs $0.72; revenue $3.01B vs $3.16B), and shares fell ~11.32% on the day of the release .

What Went Well and What Went Wrong

What Went Well

  • Mosaic Fertilizantes execution drove higher prices, lower unit costs, and segment adjusted EBITDA of $159M; management expects Q3 EBITDA “significantly above” Q2 and to exceed $200M .
  • Potash pricing strengthened (MOP $261/t, +$37/t QoQ) with sales volumes at 2.3Mt and segment adjusted EBITDA at $278M; Hydrofloat commissioning adds 400k t/yr low-cost capacity at Esterhazy .
  • Cost program achieved $150M and expanded to $250M, targeting automation, supply chain optimization, margin optimization, and fixed-cost absorption improvements as phosphate run-rates normalize .
  • Quote: “The work we completed in the first six months of the year sets the stage for a strong second half… We expect to generate significant free cash flow through the balance of the year” — Bruce Bodine, CEO .

What Went Wrong

  • Phosphate operating earnings were $(8)M; adjusted EBITDA fell to $217M, with 1.5Mt sales (down from 1.7Mt YoY) due to turnarounds/reliability work; conversion costs were $126/t (vs $100/t YoY) and idle/turnaround expenses rose $48M YoY to $84M .
  • SG&A rose to $167M (+$39M YoY) driven by $33M bad-debt provisions (including a $30M single customer) and global digital project amortization; management expects insurance to recover a significant portion over time .
  • Distribution margins in Brazil ran “mid-$20s” in Q2 below the normalized $30–$40/t; shipment deferrals amid credit challenges pushed volumes into Q3 .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Net Sales ($USD Billions)$2.817 $2.621 $3.006
Diluted EPS (GAAP) ($)$(0.50) $0.75 $1.29
Adjusted EPS ($)$0.54 $0.49 $0.51
Gross Margin ($USD Millions)$394.0 $488.4 $518.6
Gross Margin Rate (%)14% 19% 17%
Adjusted EBITDA ($USD Millions)$584 $544 $566
SegmentQ2 2024Q1 2025Q2 2025
Phosphate Net Sales ($USD Billions)$1.2 $1.1 $1.2
Phosphate Operating Earnings ($USD Millions)$133 $139 $(8)
Phosphate Adjusted EBITDA ($USD Millions)$308 $276$217
Potash Net Sales ($USD Millions)$663 $570 $711
Potash Operating Earnings ($USD Millions)$174 $157 $194
Potash Adjusted EBITDA ($USD Millions)$271 $240 $278
Fertilizantes Net Sales ($USD Billions)$1.0 $0.9 $1.2
Fertilizantes Operating Earnings ($USD Millions)$61 $98 $109
Fertilizantes Adjusted EBITDA ($USD Millions)$96 $122$159
KPIQ2 2024Q1 2025Q2 2025
Potash Sales Volumes (Mt)2.3 2.1 2.3
MOP Selling Price (FOB mine, $/t)$224 $223 $261
MOP Cash Cost ($/t)$64 $78 $75
Phosphate Sales Volumes (Mt)1.7 1.5 1.5
DAP Selling Price (FOB plant, $/t)$575 $623 $668
Phosphate Conversion Cost ($/t)$100 $134 $126
Fertilizantes Sales Volumes (Mt)2.2 1.8 2.2
Fertilizantes Gross Margin ($/t)$46 $69 $73

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Potash Production Volumes (Mt)FY 20259.0–9.4 9.3–9.5 Raised
Phosphate Production Volumes (Mt)FY 20257.2–7.6 6.9–7.2 Lowered
Mosaic Fertilizantes Sales (Mt)FY 202510.0–10.8 10.0–10.8 Maintained
SG&A ($)FY 2025$470–$500M $520–$550M Raised
Capex ($)FY 2025$1.2–$1.3B $1.2–$1.3B Maintained
Effective Tax RateFY 2025High-20s% High-20s% Maintained
Cash Tax RateFY 2025Mid-to-high 20s% Low 20s% Lowered
Potash Sales (Mt)Q3 20252.3–2.5 (for Q2) 2.2–2.4 Lower vs prior quarter guidance context
MOP Price (FOB, $/t)Q3 2025$230–$250 (for Q2) $270–$290 Raised vs prior quarter guidance context
Phosphate Sales (Mt)Q3 20251.7–1.9 (for Q2) 1.8–2.0 Raised vs prior quarter guidance context
DAP Price (FOB, $/t)Q3 2025$635–$655 (for Q2) $700–$720 Raised vs prior quarter guidance context
DividendQ2 2025$0.22 paid Q1 $0.22 paid Q2 ($70M) Maintained payout

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
Asset reliability & turnaroundsQ4’24: Hurricane Milton idle costs; elevated maintenance; Q1’25: Bartow/New Wales turnarounds completed; March production strong despite downtime Significant downtime at Riverview/New Wales/Louisiana; turnarounds completed in July; ramp to 8Mt annual run-rate Aug–Dec Improving from Q3 onward
Potash price & volumeQ1’25: Raised FY potash 9.0–9.4Mt; prices recovering; Q2 guidance 2.3–2.5Mt FY potash raised to 9.3–9.5Mt; Q3 2.2–2.4Mt; MOP $270–$290/t; Hydrofloat adds 400k t/yr Strengthening
Brazil credit & distributionQ1’25: Distribution margin normalized expected ($30–$40/t); FX hedges/structured payables impact Q2 margins mid-$20s on customer deferrals; expect normalized $30–$40/t and >$200M EBITDA in Q3 Near-term headwind, Q3 normalization
Cost reduction programQ1’25: On track for $150M savings $150M achieved; expanded to $250M initiatives Positive expansion
Mosaic BiosciencesQ1’25: Sales doubled YoY; ~$70M FY target H1’25 sales >100% YoY; tracking to ~$70M and EBITDA positive in Q4 Accelerating
FX/derivative impactsQ4’24: large FX loss; Q1’25: FX gains/derivatives gains Q2 notable +$339M pre-tax, including FX gains and Ma’aden mark-to-market Volatile but favorable in Q2

Management Commentary

  • “Mosaic’s second quarter 2025 performance reflects extensive maintenance activity and several discreet items… We expect to generate significant free cash flow through the balance of the year.” — Bruce Bodine, President & CEO .
  • “$150 million cost reduction program was achieved and is expanded to $250 million to include value capture and additional cost reduction initiatives.” — Press release .
  • Phosphate outlook: “Sales volumes are expected to be 1.8 to 2.0 million tonnes [in Q3], … cash cost of conversion … $100–$105/t … DAP prices … $700 to $720/t” .
  • Potash outlook: “Full-year production volume … 9.3–9.5Mt … Hydrofloat producing the first potash product tonnes … expected to drive production cost per tonne lower” .

Q&A Highlights

  • Asset reliability ramp: CEO discussed a two-week delay on New Wales’ third pumping system, with encouraging early August run-rate; Louisiana trending better than visuals suggested .
  • Brazil credit dynamics: Shipment deferrals and cautious sales prioritizing strong credit profiles; Q3 distribution margins expected to normalize [$30–$40/t] .
  • Potash costs/mix: Hydrofloat ramp and Colonsay run decision imply FY cash cost target revised to $70–$75/t (from $64–$69) due to mix and CAD strength .
  • Segment disclosure additions: Management highlighted new production sales volumes and margin disclosures to aid modeling (transcript services) .

Estimates Context

MetricQ2 2024Q1 2025Q2 2025
EPS Consensus Mean ($)0.54*0.445*0.717*
EPS Actual ($)0.54*0.49*0.51*
Revenue Consensus Mean ($USD Billions)2.818*2.710*3.132*
Revenue Actual ($USD Billions)2.817*2.621*3.006*

Values retrieved from S&P Global.
Result vs consensus Q2 2025: EPS miss (0.51 vs 0.717); Revenue miss ($3.01B vs $3.13B). Number of estimates: EPS n=13*, Revenue n=9*.

Key Takeaways for Investors

  • Q2 missed Street on adjusted EPS and revenue; GAAP EPS uplifted by notable items, masking underlying operational pressure — expect re-rating tied to Q3 execution in phosphate and Brazil distribution .
  • Potash tailwinds are intact: higher realized pricing, increased FY production, Hydrofloat capacity adding low-cost tons — monitor CAD FX and Colonsay mix for cost trajectory .
  • Phosphate recovery hinges on asset reliability and turnaround normalization; conversion costs guided to $95–$100/t by year-end as volumes ramp .
  • Brazil remains a growth driver; expect Q3 volume surge, normalized distribution margins, and segment EBITDA >$200M — watch credit conditions/insurance recovery timing .
  • Corporate cost agenda has more room: $250M program expansion could structurally improve margins and SG&A over 2026 .
  • Near-term trading setup: sensitivity to DAP/MOP prices is high (each $10/t ≈ $70M/$65M EBITDA full-year) — Q3 pricing guidance implies favorable margin setup if volumes materialize .
  • Medium-term thesis: tight global phosphate/potash supply, market access, and biosciences growth support FCF generation; asset reliability execution is the key catalyst for multiple expansion .

Notes:

  • Non-GAAP definitions and reconciliations are provided by the company; GAAP-to-adjusted differences are primarily notable FX/derivatives/Ma’aden marks this quarter .
  • Cash dividends: $0.22/share paid in Q2 ($70M) .