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Oil-Dri Corp of America (ODC)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 delivered record fourth‑quarter performance: revenue $125.2M (+10% y/y), diluted EPS $0.89 (+51% y/y), and net income $13.1M (+53% y/y), driven by strong B2B demand, while gross margin eased to 27.8% (vs. 29.0% prior year) .
  • Segment mix was favorable: B2B net sales +24% y/y to $48.1M (agricultural +104% to $11.9M; fluids purification +11% to $27.7M), while Retail & Wholesale grew +3% to $77.1M with lighter cat litter momentum but tempered clay sales amid competitor promotions .
  • Operating cadence and cash generation remain robust: operating income $15.6M (+21% y/y), EBITDA $21.4M (+17% y/y), and cash and equivalents rose to $50.5M as of July 31, 2025; the Board declared quarterly dividends ($0.18 Common, $0.135 Class B) payable Nov 21, 2025 .
  • Management set qualitative guidance: first half of FY2026 comparisons will be challenging against a strong H1 FY2025, but the team “has every expectation of delivering a year that beats last year,” highlighting disciplined capital allocation and “Miney ball” analytics as execution pillars .

What Went Well and What Went Wrong

What Went Well

  • B2B outperformance and product records: agricultural revenue hit an all‑time high ($11.9M, +104% y/y), fluids purification remained strong ($27.7M, +11% y/y), Amlan reached a record $8.4M (+5% y/y); B2B segment operating income rose +16% y/y to $15.0M .
  • Cash flow and balance sheet strength: FY2025 net cash from operating activities reached $80.2M; cash grew to $50.5M despite $32.6M capex, $11.0M debt repayment, and $8.4M dividends; management emphasized prioritizing growth investments and sustainable payouts .
  • Strategic clarity and execution: CEO underscored “Miney ball” (data‑driven decisioning) and a balanced capital recapture approach that aligns pricing with higher replacement costs; CFO highlighted investments in IT/cyber upgrades and centralized analytics to unlock future AI use cases .

What Went Wrong

  • Margin compression vs. prior year in Q4: gross margin fell to 27.8% (from 29.0%) due to higher material costs despite lower freight/packaging; operating cost increases offset R&W revenue gains, keeping R&W operating income flat y/y .
  • Promotional environment tempered clay‑based litter: competitors’ price discounting, coupons, and trade spend, especially in lightweight, dampened clay sales; Oil‑Dri shifted spend to match market dynamics while remaining bullish on lightweight adoption .
  • Planned outages raised near‑term costs and drew down inventories: management executed capex projects during outages, incurring incremental repair and contract services to maintain service levels, pressuring near‑term margins .

Financial Results

Consolidated Results vs Prior Periods

MetricQ2 2025Q3 2025Q4 2025
Revenue ($USD Millions)$116.9 $115.5 $125.2
Diluted EPS (Common)$0.89 $0.80 $0.89
Gross Margin (%)29.5% 28.6% 27.8%
Operating Income ($USD Millions)$17.5 $13.9 $15.6
Operating Income (% of Sales)15.0% 12.0% 12.5%
Net Income ($USD Millions)$12.9 $11.6 $13.1
EBITDA ($USD Millions)$22.2 $20.2 $21.4

Year-over-Year Q4 Comparison

MetricQ4 2024Q4 2025y/y Change
Revenue ($USD Millions)$113.7 $125.2 +10%
Diluted EPS (Common)$0.59 $0.89 +51%
Gross Margin (%)29.0% 27.8% -120 bps
Operating Income ($USD Millions)$12.9 $15.6 +21%
Net Income ($USD Millions)$8.5 $13.1 +53%
EBITDA ($USD Millions)$18.2 $21.4 +17%

Segment Breakdown (Net Sales and Segment Operating Income)

Segment MetricQ2 2025Q3 2025Q4 2025
B2B Net Sales ($M)$43.4 $42.7 $48.1
B2B Segment Op Income ($M)$14.3 $13.4 $15.0
R&W Net Sales ($M)$73.5 $72.8 $77.1
R&W Segment Op Income ($M)$11.3 $9.7 $9.7

Product KPIs (Selected)

KPIQ2 2025Q3 2025Q4 2025
Agricultural Sales ($M)$9.2 $11.6 $11.9
Fluids Purification Sales ($M)$26.5 $25.3 $27.7
Amlan (Animal Health) Sales ($M)$7.7 $5.8 $8.4
Domestic Clay Cat Litter (ex co‑pack) ($M)$51.3 $48.0 $57.5
Industrial & Sports Sales ($M)$9.8 $12.3 $11.3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue/EPS (quantitative)FY2026None providedNo numerical guidance; management expects challenging H1 comps vs strong H1 FY2025 and plans to “deliver a year that beats last year” Maintained qualitative only
B2B Demand DriversFY2026N/AContinued tailwinds from edible oil/renewable diesel filtration; soybean oil processing expected to support fluids purification demand Commentary update
Amlan GrowthFY2026N/AExpect “good growth” via expansion in Asia/LatAm; more consistent growth pattern post industry recovery Commentary update
Advertising Spend MixFY2025 Exit/near‑termFY2025 to be lower than FY2024 Shift toward trade/promotional spend in Q4; expect promotional activity to subside over time Strategic shift
DividendQ4 FY2025Prior rate$0.18 (Common), $0.135 (Class B) payable Nov 21, 2025; 22nd consecutive annual increase history affirmed Raised/maintained cadence

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 FY2025)Current Period (Q4 FY2025)Trend
AI/data analyticsInvestment in centralized analytics and lower FY2025 advertising; building analytics foundation CFO: expanding analytics; exploring AI where ROI/risk acceptable; R&D leader outlines phased AI across R&D and operations Increasing focus, disciplined adoption
Renewable diesel/soybeansFluids purification growth tied to renewable diesel capacity expansion Expect more soybean crushing; renewable diesel processing to drive filtration demand; supported Q4 sales Structural tailwind
Cat litter category dynamicsLightweight segment outgrowing category; promotional activity pressure; distribution changes Competitor promotions tempered clay sales; Oil‑Dri shifted spend; lightweight viewed as LT positive driver Near‑term promo headwind, LT mix positive
International/AmlanFlat in Q3 while optimizing distribution Record in Q4 on higher international volumes; 2026 growth expected via Asia/LatAm Improving trajectory
Capex/outages & margin opticsOngoing plant investments and infra; depreciation rising with asset replacement Planned outages for upgrades; margin pressure from higher replacement‑cost pricing; emphasis on cash generation Execution with near‑term cost impact
Capital allocationPaid down revolver; dividends sustained; selective M&A (Ultra Pet) Undrawn revolver; sustained dividends; M&A aligned to sorbent solutions and customer adjacencies Consistent, conservative stance

Management Commentary

  • CEO: “We closed the fourth quarter and fiscal year 2025 with record results… As we enter fiscal year 2026, the first six months will be measured against a particularly strong first half of fiscal year 2025… we remain confident in our ability to build on our past success” .
  • CFO: “Net cash provided by operating activities was $80,000,000… Full year EBITDA of $90,000,000 was up 29%… we plan to expand [analytics] to leverage AI… where the payback generates acceptable returns” .
  • CEO on margin optics: “We launched our capital recapture program… pricing to higher replacement cost… apples to apples… margin pressure on historic price products… cash generation stays the same” .
  • R&W lead: “Heavy price discounts, couponing, and trade spend… we shifted some of our advertising… lightweight promotional spend drives trial and educates consumers on benefits” .

Q&A Highlights

  • R&D and AI: Dr. D’Souza articulated a “crawl, walk, run” approach, emphasizing data quality and phased AI adoption across R&D and operations to enhance efficiency and sustainability .
  • Renewable diesel tailwind: Increased soybean crushing and renewable diesel processing expected to support fluids purification demand into FY2026, continuing Q4 momentum .
  • Amlan growth sustainability: Management expects “good growth” in 2026 with expansion in Asia/LatAm and more consistent demand patterns post ag industry recovery .
  • Cat litter promotions: Competitor trade spend (rollbacks/BOGO/coupons) tempered clay sales; Oil‑Dri matched shifts but remains positive on lightweight category education and private label momentum .
  • Ultra Pet integration: Distribution adds exceeded estimates; synergies in freight/operations/SG&A offset softness in legacy customers; co‑loading crystal and clay supports customer value .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 FY2025 EPS and revenue was unavailable at the time of retrieval; reported actuals: revenue $125.2M and EBITDA $21.4M . Values retrieved from S&P Global.*
  • Implication: Without published consensus, the magnitude of beat/miss vs. Street cannot be quantified; however, y/y growth and segment strength indicate positive fundamental momentum .

Key Takeaways for Investors

  • Mix shift toward higher‑margin B2B (agriculture, fluids purification) and lightweight litter supports top‑line resilience despite promotional headwinds in clay; watch continued renewable diesel capacity additions as a structural demand driver .
  • Near‑term margin variability likely as replacement‑cost pricing and planned outages flow through; operating discipline and strong cash generation mitigate risk and fund growth/dividends .
  • Amlan’s international expansion and distribution optimization are accelerating; expect steadier growth cadence into FY2026 .
  • Dividend continuity and conservative leverage (undrawn revolver) bolster downside protection; M&A remains targeted to sorbent‑adjacent offerings to enhance portfolio .
  • Short‑term trading: Promotional dynamics in litter and H1 FY2026 tough comps may cap near‑term multiple expansion; catalysts include fluids purification demand prints, lightweight share gains, and visibility on FY2026 trajectory .
  • Medium‑term thesis: Data/AI‑enabled operations, capital recapture pricing framework, and category leadership in lightweight litter underpin sustainable EPS and FCF growth with balanced capital returns .

Footnote: *Values retrieved from S&P Global.