Executive Summary

Q1 FY26 was in line with internal expectations; management reiterated FY26 guidance of $2.3B–$2.5B revenue and $205M–$235M adj. EBITDA, highlighting a normalized cycle with buying 1H and shipments 2H .
Revenue fell 19.9% YoY to $508.8M on shipment pull-forward into Q4 FY25; pricing per kilo increased, and processing revenue rose, but regional/customer mix modestly compressed gross margin to 12.9% .
Profitability reset seasonally: operating income was $21.0M, EPS was $(0.62), and adj. EBITDA was $29.5M; net interest expense improved by ~$3.5M YoY on lower rates and reduced long-term debt .
Working capital execution remained a focus: cash conversion cycle improved to 160 days (from 172), inventory replenishment reflects larger crops in South America/Africa; uncommitted processed inventory stayed low at 2.4%, signaling strong demand .
Stock catalysts: unchanged FY26 guidance despite softer Q1 seasonal revenue, continued demand/low uncommitted inventory, and normalization of supply (Africa/South America) that support 2H shipment execution .

What Went Well and What Went Wrong

What Went Well
- Guidance held; management emphasized confidence in 2H execution and normalized buy/sell cadence: “buying in the first half... selling in the second half… improving our alignment with customer requirements” .
- Pricing resilience and processing growth: average price per kilo increased to $6.85 and processing & other revenues rose to $50.2M (+20% YoY) .
- Cash conversion improved (160 vs 172 days) and net interest expense improved by ~$3.5M YoY, reflecting lower average rates and reduced long-term debt .
- CEO quote: “We… captured buying opportunities generated by record crop sizes in South America and Africa… We expect this impact to be increasingly visible in the second half” .
What Went Wrong
- Revenue down 19.9% YoY to $508.8M on shipment pull-forward to Q4 FY25; gross margin compressed to 12.9% on regional/customer mix, tempering profitability .
- Operating income fell to $21.0M (from $40.5M) and EPS declined to $(0.62) (from $0.18) on lower volumes and gross profit .
- Seasonal working capital build: adjusted free cash flow of $(458.6)M in the quarter; net debt increased YoY alongside inventory replenishment for larger crops .

Financial Results

Metric	Q3 FY2025	Q4 FY2025	Q1 FY2026
Revenue ($USD Millions)	$778.3	$501.7	$508.8
Gross Profit ($USD Millions)	$116.4	$67.2	$65.6
Gross Margin (%)	15.0%	—	12.9%
Operating Income ($USD Millions)	$66.1	$13.7	$21.0
Net Income (Loss) Attrib. ($USD Millions)	$18.9	$(5.1)	$(15.8)
Diluted EPS ($)	$0.74	$(0.20)	$(0.62)
Adjusted EBITDA ($USD Millions)	$80.5	$28.6	$29.5

YoY comparison for the quarter (Q1):

Metric	Q1 FY2025	Q1 FY2026
Revenue ($USD Millions)	$634.9	$508.8
Gross Profit ($USD Millions)	$83.9	$65.6
Gross Margin (%)	13.2%	12.9%
Operating Income ($USD Millions)	$40.5	$21.0
Diluted EPS ($)	$0.18	$(0.62)
Adjusted EBITDA ($USD Millions)	$55.0	$29.5

Segment breakdown (Q1):

Leaf Segment	Q1 FY2025	Q1 FY2026
Product Revenues ($USD Millions)	$589.2	$458.2
Product Gross Profit ($USD Millions)	$80.4	$57.4
Kilos Sold (Millions)	95.7	66.9
Avg Price per Kilo ($/kg)	$6.16	$6.85
Avg Cost per Kilo ($/kg)	$5.32	$5.99
Avg Gross Profit per Kilo ($/kg)	$0.84	$0.86

Processing & Other	Q1 FY2025	Q1 FY2026
Revenues ($USD Millions)	$41.8	$50.2
Gross Profit ($USD Millions)	$4.4	$7.6
GP %	10.5%	15.1%

Selected KPIs and balance sheet:

KPI / Balance	Q1 FY2025	Q1 FY2026
Cash Conversion Cycle (days)	172	160
Tobacco Inventory ($USD Millions)	$980.6	$1,089.8
Processed Inventory ($USD Millions)	$605.5	$575.9
Uncommitted Processed Inventory ($USD Millions, %)	$14.7 (2.4%)	$13.6 (2.4%)
Net Interest Expense ($USD Millions, quarterly)	$33.3	$29.8

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Billions)	FY2026	$2.3–$2.5B (6/10/25)	$2.3–$2.5B (8/6/25)	Maintained
Adjusted EBITDA ($USD Millions)	FY2026	$205–$235M (6/10/25)	$205–$235M (8/6/25)	Maintained

Management reiterated 2H weighting for sales and pointed to larger crops and normalized cycle as drivers of execution against guidance .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 FY25 and Q4 FY25)	Current Period (Q1 FY26)	Trend
Cycle normalization and shipment timing	Q3: timing of shipments supported strong volume; Q4: expect larger crops, plan to replenish inventory and grow again .	Explicitly highlighted “buying 1H, selling 2H” normalized cadence; Q1 in line with expected cycle .	Improving alignment with customers .
Regional crop dynamics (South America/Africa)	Q3: El Niño constrained South America; Q4: anticipate larger crop sizes South America/Africa .	“Record crop sizes in South America and Africa” underpin replenishment; more balanced global leaf market expected .	Improving supply .
Working capital / cash conversion	Q3: CCC improved by 20 days YoY; strong adjusted FCF .	Q4: operating cycle accelerated by 38 days YoY .	Q1: CCC improved to 160 days (from 172) .
Tariffs / macro	Q4: guidance range reflected tariff assumptions .	Q1: “highly dynamic and competitive market”; risk disclosures continue to include tariffs/macro .	Watchful/unchanged risk posture .
Pricing/mix and processing	Q3: higher ASPs and favorable mix raised GP/kg to $0.91 .	Q1: ASP up to $6.85/kg; processing revenues +20% YoY; GP% in processing up .	Mixed: price/processing up; GM pressured by region/customer mix .

Management Commentary

“We are pleased to report first quarter results that align with our financial expectations and position the business to achieve our full-year guidance… [reflecting] a more normalized cycle—buying in the first half… and selling in the second half” — Pieter Sikkel, CEO .
“We… captured buying opportunities generated by record crop sizes in South America and Africa… [to] satisfy continued strong customer demand… increasingly visible in the second half” — Pieter Sikkel, CEO .
Slides reinforced confidence: normalized cycle, increased seasonal borrowing capacity (+$200M YoY) and improved flexibility with ABL; no outstanding ABL balance vs. $44M last year .

Q&A Highlights

The company cautioned that unauthorized call transcripts may not accurately reflect contents and prohibits unauthorized reproductions; Pyxus made an archived recording available via its IR site after the call .
Public transcript links (third-party) for reference: Seeking Alpha (Aug 6–7, 2025) , MarketScreener (S&P Capital IQ) , GuruFocus .
We were unable to retrieve the full transcript text via the document tools; themes above are drawn from the company’s prepared remarks and slides .

Estimates Context

Wall Street consensus (S&P Global) for Q1 FY26 was not available for EPS and revenue; thus, beat/miss vs. consensus cannot be assessed. The company characterized results as in line with internal expectations . Values retrieved from S&P Global.*

Metric	Q1 FY2026 Consensus	Q1 FY2026 Actual
Revenue ($USD Millions)	N/A*	$508.8
Primary EPS ($)	N/A*	$(0.62)

*Values retrieved from S&P Global.

Where estimates are unavailable, we anchor to management guidance: FY26 revenue $2.3–$2.5B and adj. EBITDA $205–$235M maintained .

Key Takeaways for Investors

Seasonal trough consistent with normalized cycle; focus remains on 2H shipments to drive FY26 guidance delivery .
Pricing and processing support unit economics; watch gross margin mix as volumes shift by region/customer through 2H .
Execution on working capital and lower interest burden are positive; net interest improved YoY and CCC improved despite inventory rebuild .
Low uncommitted processed inventory and larger crops in South America/Africa underpin demand visibility and supply availability into 2H .
No change to FY26 guide de-risks near term; delivery hinges on logistics/tariff backdrop and customer timing; guidance embeds dynamic trade assumptions .
Short-term trading: shares may react to confirmation of 2H shipment cadence and any incremental tariff headlines; absence of estimate benchmarks limits beat/miss narrative .
Medium-term: if supply normalization persists and mix improves, EBITDA and leverage trajectory can continue to strengthen into FY26 exit and FY27 setup .

PYXUS INTERNATIONAL, INC. (PYYX)·Q1 2026 Earnings Summary