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MOSAIC CO (MOS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered strong results: net sales $3.45B, diluted EPS $1.29, adjusted EPS $1.04, and adjusted EBITDA $806M, with broad segment strength and notable items netting a $0.25 EPS tailwind .
  • Versus Wall Street: adjusted EPS beat consensus ($1.04 vs $0.95*) and adjusted EBITDA outpaced consensus ($806M vs $769M*), while revenue was slightly below ($3.45B vs $3.53B*). Shipment timing and Brazil distribution margins were key drivers. Values retrieved from S&P Global*.
  • Guidance mixed: full-year phosphate production cut to 6.3–6.5Mt (from 6.9–7.2Mt), potash trimmed to 9.1–9.4Mt (from 9.3–9.5Mt), Fertilizantes to 9.4–9.6Mt (from 10.0–10.8Mt), with Q4 price/volume ranges provided for DAP ($700–$730/t) and MOP ($270–$280/t) .
  • Strategic actions/updates: completed Patos de Minas ($111M proceeds) and Taquari mine sales ($27M; eliminates capex >$25M and $22M ARO), and reiterated capital reallocation plans; cash from operations was $229M in Q3, held back by working capital build that is expected to reverse in Q4 .
  • Call tone: confident on asset health recovery and potash demand; cautious on Q4 Fertilizantes EBITDA (~$100M) and potential North America phosphate deferral; management emphasized cost reductions and operational discipline into 2026 .

What Went Well and What Went Wrong

What Went Well

  • Phosphates inflected: segment operating earnings improved to $102M (from $(8)M in Q2), with DAP realizations rising to $714/t and gross margin per tonne up to $92/t; production reached 1.7Mt in Q3 and ~1.8Mt on a trailing three-month basis .
  • Potash strength: operating earnings rose to $229M and adjusted EBITDA to $329M, with MOP prices up to $271/t and cash costs down to $71/t on higher production and lower idle/turnaround expenses .
  • Fertilizantes outperformance: adjusted EBITDA surged to $241M (vs $83M prior year), with operating income up 71% YoY to $96M; management highlighted disciplined risk management amid Brazil credit conditions .
    • Quote: “Our business in Brazil continued to perform well… and we delivered solid performance in our potash business” — Bruce Bodine, CEO .

What Went Wrong

  • Working capital drag on FCF: cash from operations fell to $229M (vs $313M prior year) due to inventory builds (North America/Brazil end-products and phosphate rock), timing of shipments, and higher prices; free cash flow was $(135)M .
  • Phosphate conversion costs elevated: cash cost of conversion rose to $131/t (vs $101/t prior year), reflecting asset health initiatives primarily in July; management expects sequential decline in Q4 .
  • Q4 Fertilizantes guidance soft: segment EBITDA guided to ~$100M on lower prices, compressed distribution margins (below $30–$40/t norm), seasonality, and credit constraints; distribution margin in Q3 was below normal .
    • Analyst concern: potential North America demand deferral impacting phosphate and potash application timing into Q1 2026 .

Financial Results

Consolidated performance versus prior quarters

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$2.621 $3.006 $3.452
Diluted EPS ($)$0.75 $1.29 $1.29
Adjusted EPS ($)$0.49 $0.51 $1.04
Gross Margin %19% 17% 16%
Operating Earnings ($USD Millions)$338.5 $244.4 $339.8
Adjusted EBITDA ($USD Millions)$544 $566 $806

Q3 2025 Actual vs Wall Street Consensus

MetricConsensusActual
EPS (Adjusted) ($)0.951*1.04
Revenue ($USD Billions)3.530*3.452
EBITDA (Adjusted) ($USD Millions)769*806
Values retrieved from S&P Global*.

Segment performance

SegmentQ1 2025 Net Sales ($MM)Q2 2025 Net Sales ($MM)Q3 2025 Net Sales ($MM)
Phosphate$1,099 $1,173 $1,290
Potash$570 $710 $695
Mosaic Fertilizantes$934 $1,175 $1,592
SegmentQ1 2025 Operating Earnings ($MM)Q2 2025 Operating Earnings ($MM)Q3 2025 Operating Earnings ($MM)
Phosphate$139 $(8) $102
Potash$157 $194 $229
Mosaic Fertilizantes$98 $109 $96
SegmentQ1 2025 Adj. EBITDA ($MM)Q2 2025 Adj. EBITDA ($MM)Q3 2025 Adj. EBITDA ($MM)
Phosphate$276 $217 $280
Potash$240 $278 $329
Mosaic Fertilizantes$122 $159 $241

KPIs

KPIQ1 2025Q2 2025Q3 2025
DAP Selling Price (FOB plant, $/t)$623 $668 $714
MOP Selling Price (FOB mine, $/t)$223 $261 $271
Phosphate Cash Conversion Cost ($/t)$134 $126 $131
Potash Cash Cost of Production ($/t)$78 $75 $71
Phosphate Sales Volumes (Mt)1.5 1.5 1.6
Potash Sales Volumes (Mt)2.1 2.3 2.3

Guidance Changes

MetricPeriodPrevious Guidance (as of Q2’25)Current Guidance (Q3’25)Change
Phosphate Production Volumes (Mt)FY 20256.9 – 7.2 6.3 – 6.5 Lowered
Potash Production Volumes (Mt)FY 20259.3 – 9.5 9.1 – 9.4 Lowered
Fertilizantes Sales Volumes (Mt)FY 202510.0 – 10.8 9.4 – 9.6 Lowered
Total Capital Expenditures ($B)FY 2025$1.2 – $1.3 Approx. $1.3 Maintained/Upper end
DDA ($B)FY 2025$1.1 – $1.2 $1.1 – $1.2 Maintained
SG&A ($MM)FY 2025$520 – $550 $530 – $550 Slightly raised floor
Net Interest Expense ($MM)FY 2025$180 – $200 $180 – $200 Maintained
Effective Tax RateFY 2025High 20s% High 20s% Maintained
Cash Tax RateFY 2025Low 20s% Low 20s% Maintained
Phosphate Sales Volumes (Mt)Q4 2025—1.7 – 1.9 New
DAP FOB Plant Price ($/t)Q4 2025—$700 – $730 New
Potash Sales Volumes (Mt)Q4 2025—2.3 – 2.6 New
MOP FOB Mine Price ($/t)Q4 2025—$270 – $280 New

Earnings Call Themes & Trends

TopicQ-2 (Q2’25)Q-1 (Q1’25)Current (Q3’25)Trend
Phosphate asset health, production cadenceTurnarounds elevated; conversion cost $126/t; sales 1.8–2.0Mt in Q3 guided Turnarounds completed; conversion cost $134/t; FY prod 7.2–7.6Mt 1.7Mt Q3; trailing 1.8Mt; conversion $131/t with expected Q4 decline; FY prod 6.3–6.5Mt Improving reliability; guidance more conservative
Potash demand/costsMOP $261/t; cash cost $75/t; FY prod 9.3–9.5Mt MOP $223/t; cash cost $78/t; FY prod raised to 9.0–9.4Mt MOP $271/t; cash cost $71/t; FY prod 9.1–9.4Mt Strong demand; costs trending lower
Brazil credit environment & distribution marginsProvisions and bad debt recovery; mid-$20/t margins; Q3 EBITDA >$200M guided Sales +15% FY guide; mid-$20/t margins; FX hedges headwind Q4 EBITDA ~$100M; distribution margin below $30–$40/t norm; recovered $27M bad debt Near-term margin compression; risk-managed sell-through
Stripping margins/raw materials (sulfur/ammonia)Benchmark margins expected near/above $500/t Margins elevated despite sulfur; ammonia expected lower Margins above historical norms but moderating; sulfur tighter; ammonia easing later Moderating but still healthy
Mosaic BiosciencesSales to double to ~$70M in 2025; Q4 EBITDA positive >100% YoY growth; China launch First 9 months sales more than doubled; positive EBITDA in Q4 Scaling; expanding geographies
Capital reallocation (asset sales)In process: Patos, Taquari, Carlsbad; Hydrofloat commissioning Dual-track for Araxa/Patrocinio; Patos sale planned Patos and Taquari completed; proceeds and ARO/capex eliminated Executing, freeing capital
Cash flow/working capitalCFO flagged WC build; Q2 CFO $610M Q1 CFO $43M, expected stronger H2 Q3 CFO $229M; reversal expected in Q4, stronger in 2026 Near-term WC headwind; 2026 tailwind

Management Commentary

  • Strategic positioning: “We’ve demonstrated the ability to shift tons to regions with the strongest demand… and we are navigating near-term fertilizer affordability issues while looking ahead to positive structural market trends” — Bruce Bodine .
  • Phosphate reliability focus: “We have experienced three consecutive quarters of production volumes improvement… We just need to lock in on more consistency and then sustain that for longer periods of time” — Bruce Bodine .
  • Operational discipline/costs: “Cost initiatives are progressing across the company… we are on track to achieve our revised $250 million cost savings target by the end of 2026” — Bruce Bodine .
  • Fertilizantes resilience: “Underpinning a strong quarter despite the challenging credit environment… distribution margins compressed, but production margins improved” — Luciano Siani Pires .
  • Market view: “Phosphate markets remain tight… Chinese export approvals have been pulled back… Potash markets are balanced after a first-half supply deficit” — Jenny Wang .

Q&A Highlights

  • Q4 phosphate sales/deferral: Management cautioned potential deferral into Q1 depending on government payments and weather; potash may be co-impacted due to joint application with phosphate .
  • Phosphate run rate realism: Targeting 1.8Mt near term with aspiration to 2.0Mt per quarter; fixed-cost absorption could drive conversion cost from sub-$120/t toward $100–$105/t at 2.0Mt .
  • Brazil EBITDA drop in Q4: Guided decline driven by product mix (more low-analysis), lower co-product sales, and lack of bad-debt tailwind; still above prior-year Q4 .
  • Sulfur/ammonia inputs and margins: Sulfur tightness elevates costs near term; ammonia expected to trend lower with new capacity; stripping margins remain above historical norms .
  • Cash conversion/free cash flow trajectory: 2025 EBITDA-to-CFO ~50% due to WC; 2026 expected 70–80% with WC wind-down; long-term capex/ARO reductions to support FCF .

Estimates Context

  • Q3 2025 comparisons: adjusted EPS beat ($1.04 vs $0.95*), adjusted EBITDA beat ($806M vs $769M*), revenue slight miss ($3.452B vs $3.530B*). Shipment timing and Brazil distribution margins weighed on sales; improved production and prices lifted profitability . Values retrieved from S&P Global*.
  • Prior quarters: Q2 2025 adjusted EPS matched/slightly beat ($0.51 vs $0.72* estimate implies miss on GAAP but adjusted in line), revenue was below ($3.006B vs $3.132B*), EBITDA below ($566M vs $672M*) due to provisions/turnarounds . Values retrieved from S&P Global*.
  • Implications: Street likely raises near-term profitability (phosphate/potash margin) but trims FY volume assumptions, especially in phosphate and Brazil distribution margins; Q4 guide (~$100M Fertilizantes EBITDA, DAP/MOP ranges) sets conservative bar for seasonality .

Key Takeaways for Investors

  • Quality beat: Adjusted EPS and EBITDA beat consensus amid higher DAP/MOP realizations and improved operating rates; revenue miss tied to shipment timing — watch Q4 sell-through and Q1 deferral risk. Values retrieved from S&P Global*.
  • Phosphate recovery is real but gradual: Reliability gains and fixed-cost absorption support margin trajectory; conversion costs expected to decline in Q4; FY phosphate production reset lower reflects prudent guidance .
  • Potash remains a pillar: Prices firm, costs declining (Hydrofloat and mix), and 2025 production trending near record; Q4 mine-gate price $270–$280/t anchors stable profitability .
  • Brazil execution strong, Q4 softer: Q3 EBITDA strength proves structural cost improvements, but Q4 margins seasonally/commercially weaker; credit environment warrants continued cautious distribution strategies .
  • Cash flow optics improve in 2026: Working capital reversal and lower ARO/environmental outflows should lift CFO/FCF conversion; near-term buybacks/dividends prudently deferred .
  • Strategic portfolio moves ongoing: Asset sales (Patos, Taquari) unlock capital and reduce capex/ARO; further reallocation expected in 2026 — a potential rerating catalyst as ROIC improves .
  • Trading setup: Into Q4, watch NA weather/government payments (phosphate deferral risk), sulfur pricing (stripping margin sensitivity), and Q4 Fertilizantes EBITDA execution (~$100M).

Notes: Consensus values marked with * are from S&P Global (Capital IQ).