Executive Summary

Q1 FY2025 was a transitional quarter: revenue fell 22.8% to $8.3M as international forage volumes/pricing declined and the Australia business moved to discontinued operations, while gross margin compressed to 16.1% and adjusted EBITDA was ($3.1)M .
Management reframed the story to a U.S./Americas-centric, sorghum-trait business (Double Team, DT2, Prussic Acid Free), introduced FY25 guidance of $34.5–$38.0M revenue and ($5.0)M–($3.0)M adjusted EBITDA, and indicated the remaining three quarters’ adjusted EBITDA range of ($1.9)M to $0.1M; guidance was reaffirmed after the 10-Q and VA completion press releases .
Structural de-risking: the Australian VA concluded (DOCA effective Nov 22), S&W was released from the AUD $15.0M NAB guarantee and secured a new $25M working capital facility (Dec 23), improving liquidity and simplifying the perimeter for go-forward operations .
Key stock catalysts: U.S. sorghum trait adoption trajectory (DT on ~10% of U.S. acres in 2024; mgmt targeting 12–14% in 2025), execution on gross margin expansion (company 33–36% FY25; Americas 35–39%) and delivering breakeven to slightly positive adjusted EBITDA for the rest of FY25 as guided .

What Went Well and What Went Wrong

What Went Well

Portfolio focus and strategic clarity: management is “exclusively focused” on core U.S.-based operations led by high-margin Double Team sorghum traits post-VA, with PAF launch this year and stacked traits coming thereafter .
Clear margin improvement roadmap: FY25 gross margin guidance of 33–36% (Americas 35–39%) vs FY24 at 26.2%, driven by product mix shift to traits and cost actions; Double Team carries ~70% gross margin, PAF ~30% .
Liquidity and capital structure progress: closure of Australian VA (release from AUD $15.0M guarantee) and new $25M revolver supported by an MFP letter of credit, plus cost optimization and OpEx discipline .

What Went Wrong

Top-line pressure and mix: Q1 revenue down 22.8% YoY and gross margin fell to 16.1%, with international price/volume headwinds (Saudi import ban; South Africa seed mix) and inventory write-offs in the Americas .
EBITDA/EPS softness: adjusted EBITDA deteriorated to ($3.1)M vs ($1.7)M YoY; GAAP net loss per share was ($7.11), with ($2.73) from continuing ops and ($4.38) from discontinued ops reflecting VA-related effects .
Forage pricing pressure: management cited lower pricing in Latin America and MENA, and domestic forage margin weakness tied to price competition and inventory dynamics .

Financial Results

Quarterly Trend (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$18.3	$14.82	$8.31
Gross Margin (%)	27.4%	—	16.1%
GAAP Operating Expenses ($M)	$7.7	$10.03	$5.57
Adjusted EBITDA ($M)	($1.2)	($2.63)	($3.09)
GAAP EPS ($)	($0.13)	($5.31)	($7.11)

Q1 2025 vs Q1 2024 vs Estimates

Metric	Q1 2024	Q1 2025	Consensus Estimate
Revenue ($USD Millions)	$10.76	$8.31	N/A (S&P Global consensus unavailable at time of query)
Gross Margin (%)	25.3%	16.1%	N/A (S&P Global consensus unavailable at time of query)
Adjusted EBITDA ($M)	($1.70)	($3.09)	N/A (S&P Global consensus unavailable at time of query)
GAAP EPS ($)	($2.63)	($7.11)	N/A (S&P Global consensus unavailable at time of query)

Note: Consensus estimates could not be retrieved from S&P Global due to system limits at query time.

Segment/Channel Mix (Q1)

Category	Q1 2024 ($M)	Q1 2025 ($M)
Sorghum Sales	$2.30	$0.55
Americas Forage	$2.40	$3.40
International ex-U.S. Forage	$5.90	$4.10
Service Revenue (VBO etc.)	—	~$0.20

Key drivers (company detail): YoY revenue decrease was driven by MENA non-dormant alfalfa (-$1.5M), Mexico sorghum (-$0.8M), Double Team (-$0.5M), South Africa sorghum (-$0.4M), conventional sorghum (-$0.3M); partially offset by U.S. alfalfa increases (+$0.5M and +$0.3M) and U.S. dormant alfalfa (+$0.3M) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	n/a	$34.5M–$38.0M	New; Maintained on Nov 26
Adjusted EBITDA	FY 2025	n/a	($5.0)M–($3.0)M	New; Maintained on Nov 26
Adjusted EBITDA (remaining 3 quarters)	Q2–Q4 FY25	n/a	($1.9)M to $0.1M	New
Total Sorghum Revenue	FY 2025	n/a	$20.5M–$23.5M	New
Double Team Revenue	FY 2025	n/a	$12.0M–$14.5M	New
PAF Pilot Sales	FY 2025	n/a	~$0.2M	New
Americas Forage	FY 2025	n/a	$8.5M–$9.0M	New
International Forage	FY 2025	n/a	~$4.9M (incl. $4.1M in Q1)	New
Gross Margin (ongoing business)	FY 2025	n/a	33%–36%; Americas-only 35%–39%	New

Earnings Call Themes & Trends

Topic	Q-2 (Q3 2024)	Q-1 (Q4 2024)	Current (Q1 2025)	Trend
Sorghum trait adoption (DT/DT2)	DT targeted >10% of U.S. acres in 2024; DT margins ~60%	DT at ~10% U.S. acres; plan DT2 launch window	DT ~10% acres in 2024; 12–14% expected in 2025; DT margins ~70%	Positive adoption trajectory
Prussic Acid Free (PAF)	Pilot in 2024; commercial in 2025	Full launch plan; stacking with DT in pipeline	Pilot revenue ~$0.2M FY25; stacking later	Advancing to commercialization
International/MENA/Saudi ban	$6–$7M FY24 impact; MENA disruptions	Continued pressure; Australia VA in process	Q1 YoY declines tied to MENA pricing/volume and SA ban	Persistent headwind, now largely scoped
Australia VA/DOCA	VA contemplated to mitigate international exposure	VA underway; NAB guarantee highlighted	DOCA effective Nov 22; release from AUD $15M guarantee	Resolution completed
Liquidity and financing	Shell $6M, Trigall $1.4M support FY24 cash	New lender discussions ongoing	New $25M facility; MFP LoC support	Improved flexibility
Gross margin and OpEx discipline	GM improvement vs FY23; OpEx control	Americas GM 29% FY24; cost reductions	FY25 GM guide 33–36%; Americas 35–39%; OpEx plan ~$16.5M ex-D&A/stock comp/one-time	Expansion path intact
VBO (Shell JV)	License to glufosinate-resistant Camelina; demos	Continued progress; 34% minority stake	Demos ongoing; timeline visibility being built	Medium-term option value

Management Commentary

“On a go forward basis S&W will be exclusively focused on its core U.S.-based operations led by our high margin Double Team sorghum solutions… [and] planned launch of our Prussic Acid Free trait this fiscal year… leading to our first ‘stacked trait’.” — CEO Mark Herrmann .
“We are expecting total gross margins for the ongoing business for fiscal 2025 to be between 33% and 36%… [Americas-only] 35% to 39%… driven by Double Team (~70% margin) and Prussic Acid Free (~30%).” — CFO Vanessa Baughman .
“We are… expecting the high end of our range to be at adjusted EBITDA breakeven for the rest of fiscal 2025… a significant potential milestone if we can achieve our expectations.” — CEO Mark Herrmann .
“The effectuation of the DOCA has resulted in providing the resources we believe are needed to create a going concern for all entities.” — CFO Vanessa Baughman (Australia VA finalization) .

Q&A Highlights

Liquidity runway: Management expected clarity on liquidity shortly after VA completion; the company subsequently closed a $25M revolver supported by MFP’s $13M LoC collateral .
Working capital: Net working capital needs should be slightly improved YoY given removal of international forage support, offset by growth investment in DT/PAF; further corporate cost reductions targeted .
Forage margins: Domestic/Latin America pricing pressure reduced forage margins; to be addressed via pricing/product mix .
Seasonality: DT orders accelerating into Q2, but majority of sales remain in Q3–Q4; Q1 is seasonally small .
Sorghum acreage outlook: US sorghum acreage expected to increase; ROI case for DT reinforced by third-party trials (Kansas State ROI reference) .

Estimates Context

S&P Global consensus estimates were unavailable at time of query; therefore, no vs-consensus comparisons can be shown for revenue, EPS or EBITDA for Q1 FY2025. Management’s guidance implies breakeven to slightly positive adjusted EBITDA over Q2–Q4 FY2025, which, if achieved, could drive upward estimate revisions on margins even if full-year revenue stays within the guided range .
Note: Consensus data from S&P Global could not be retrieved due to system limits at query time.

Key Takeaways for Investors

The equity story is now a concentrated, higher-margin U.S./Americas sorghum-trait platform (DT/DT2/PAF), with a credible path to margin expansion (FY25 GM 33–36%) and potential adjusted EBITDA breakeven across the remainder of FY25 if execution holds .
Structural risk reduction post-VA (DOCA effective, AUD $15M guarantee release) and new $25M revolver de-risk liquidity and simplify the perimeter; monitor borrowing base covenants and seasonal working capital usage into Q3–Q4 .
Near-term print risk remains on international forage pricing/volume and domestic forage price competition; the pivot to trait mix is the lever to offset this over time .
DT adoption remains the primary KPIs: planted on ~10% of U.S. grain sorghum acres in 2024; mgmt targets 12–14% in 2025, with DT margins ~70%; early PAF commercialization adds incremental monetization and stacking potential .
Trend watch: Q2–Q4 delivery against breakeven adjusted EBITDA guide is the key stock catalyst; gross margin progression vs. guided ranges and the cadence of DT shipments (Q3–Q4 weighted) will drive sentiment .
Optionality from Vision Bioenergy (Shell JV) remains medium-term; not a near-term P&L driver but could enhance strategic value .
Trading implication: Shares likely react most to evidence of DT sell-through and gross margin inflection into spring planting (Q3), liquidity stability under the new facility, and further simplification/strategic alternatives outcomes disclosed post-Q1 .

Appendix: Additional Detail

Q1 2025 Results Drivers (Company Narrative)

Revenue decreased to $8.3M due to MENA (Saudi import ban), Mexico sorghum credit tightening/carryover, lower DT timing, and South Africa seed mix; offset by U.S. alfalfa gains .
Gross margin decreased to 16.1% mainly from International mix/pricing (MENA -3.8 pts; South Africa -2.7 pts); Americas net GM declined due to inventory write-offs .
GAAP OpEx was $5.6M; adjusted OpEx $4.5M, reflecting lower SG&A excluding non-recurring costs .
Net loss from continuing operations ($6.2)M ($2.73/sh); discontinued operations loss ($10.0)M ($4.38/sh) related to Australia VA; GAAP net loss ($16.2)M ($7.11/sh) .
Adjusted net loss ($4.9)M; adjusted EBITDA ($3.1)M; definitions and reconciliations provided by company .

Prior Quarters Reference

Q4 FY2024: revenue $14.82M; adjusted EBITDA ($2.63)M; Americas gross margin for FY2024 was 29%; Australia VA and NAB cross-default disclosures prominent .
Q3 FY2024: revenue $18.3M; gross margin 27.4%; adjusted EBITDA ($1.2)M; guidance revisions tied to MENA and Australia headwinds .

S&W Seed Co (SANW)·Q1 2025 Earnings Summary