Corteva, Inc. (CTVA) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
Corteva's earnings call indicates strong financial performance with 14% EBITDA growth and improved margins. The strategic separation into two companies and new product launches are positive indicators. The Q&A highlights promising developments like the Bayer agreement and gene editing prospects in Europe. Despite some currency headwinds and SG&A increases, the overall sentiment remains positive due to strong market position, growth in key markets, and optimistic financial guidance, warranting a positive stock price prediction.
Key Financial Performance
Revenue Grew the top line low single digits year-over-year, driven by growing demand for technology, exceptional performance of commercial teams, and disciplined execution on operational efficiency.
Operating EBITDA Improved low double digits year-over-year, leading to over 200 basis points of margin expansion, surpassing 22% for the first time as a public company. This was due to organic sales growth, lower input costs, and productivity benefits.
Seed Business Net Cost Improvements Delivered about $340 million of net cost improvements and $90 million in royalty improvement, reflecting a growing position in North America corn and progress in soybean licensing in Brazil.
Crop Protection Business Productivity and Cost Benefits Generated over $300 million of productivity and cost benefits, despite less than ideal market conditions.
Free Cash Flow Improved by about $1.2 billion year-over-year to $2.9 billion, driven by increased EBITDA, lower cash taxes, and working capital discipline.
Organic Sales Growth Up 4% year-over-year, with growth in both Seed and Crop Protection. Seed price/mix and volume gains were 3% and 2%, respectively, while Crop Protection volume was up 5% despite a 2% price decline.
Net Royalty Expense Reduced by $90 million year-over-year, driven by increased out-licensing income in North American corn and lower royalty expense in soybeans.
SG&A and R&D Expenses SG&A increased due to higher commissions and compensation expenses. R&D investment aligned with the target of just over 8% of sales for the full year.
Currency Impact A $217 million headwind on EBITDA, driven by the Brazil real, Canadian dollar, and Turkish lira.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Conkesta E3 soybeans: Expected to cross double-digit trade penetration in Brazil, the largest soybean market, with over 300 basis points of margin expansion this year.
Gene editing in hybrid wheat: Growth platforms like gene editing in hybrid wheat are starting to take off.
Crop Protection new products and biologicals: Crop Protection volumes driven by new products and biologicals are expected to grow in 2026.
North America corn: Gained share in corn and soybeans, reflecting a growing position in North America corn.
Soybean licensing in Brazil: Progress in soybean licensing in Brazil, contributing to royalty improvement.
Cotton licensing market in the U.S.: Entered the cotton licensing market in the U.S., expanding the addressable market.
Operational efficiency: Achieved over $650 million in net cost improvements, including lower seed commodity costs, raw material deflation, and productivity actions.
Free cash flow: Improved free cash flow by $1.2 billion to $2.9 billion, driven by increased EBITDA, lower cash taxes, and working capital discipline.
Net royalty expense: Achieved $90 million in reduced net royalty expense, progressing towards royalty neutrality.
Separation of Corteva: On track for a second-half separation, including the launch of SpinCo's name and brand identity, and completion of IT system separation.
Resolution with Bayer: Reached a comprehensive resolution with Bayer, allowing acceleration of proprietary technologies and entry into new markets, expected to generate $1 billion in aggregate earnings over 10 years.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Separation Costs and Disruptions: The company is undergoing a separation process, which includes IT system separation, capital structure submissions, and board appointments. This process is expected to incur net dissynergies of approximately $100 million, with $50 million already built into the 2025 guidance. These disruptions could impact operational focus and financial performance during the transition.
Competitive Pricing Dynamics: The Crop Protection business is facing competitive pricing pressures in major markets such as Latin America and Asia Pacific. This has led to price declines, which could impact revenue and margins.
Market Conditions in Crop Protection: The Crop Protection market is described as less than ideal, with modest growth expected in 2026. Competitive dynamics and pricing pressures remain a challenge, particularly in Latin America.
Economic and Currency Risks: Currency fluctuations, particularly in the Brazilian real, Canadian dollar, and Turkish lira, have been a headwind, impacting EBITDA by $217 million in 2025. While some currency tailwinds are expected in 2026, economic uncertainties remain a risk.
Supply Chain and Timing Shifts: The company experienced timing shifts in Seed and Crop Protection sales due to freight optimization and weather conditions in North America, as well as fungicide demand timing in Latin America. These shifts could disrupt revenue recognition and operational planning.
Litigation and Licensing Costs: The company resolved a legal dispute with Bayer, committing to a $610 million payment. While this resolution is expected to generate long-term earnings upside, the upfront cost could strain short-term financials.
Farmer Margins and Demand: Farmers are managing tighter margins, which could impact their purchasing decisions for premium technologies. This is a potential risk to revenue growth in both Seed and Crop Protection segments.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Separation Timeline: The company remains on track for a second-half separation, likely in the fourth quarter of 2026. Key milestones include announcing the new CEO and brand identity for SpinCo in the first half, filing Form 10 with the SEC, and completing IT system separation in the second half.
2026 Operating EBITDA: Expected to be in the range of $4 billion to $4.2 billion, representing approximately 7% growth over 2025. This includes momentum in the Seed Licensing business, growth in Crop Protection volumes driven by new products and biologicals, and productivity benefits.
Crop Protection Market Outlook: Modest growth is expected in 2026, marking a positive shift after a period of stagnation. Competitive pricing dynamics in Latin America and Asia Pacific persist, but underlying farmer demand remains consistent.
Seed Business Projections: Flat volumes are expected in 2026 due to a shift from corn to soybeans in North America. However, share gains in North America and licensing growth in Brazil are anticipated to contribute positively.
Royalty Neutrality: The company expects to achieve royalty neutrality in 2026, two years ahead of prior expectations, driven by a resolution with Bayer and progress in out-licensing.
Free Cash Flow: Free cash flow in 2026 will be impacted by separation items and the Bayer agreement. Excluding these, it would align with long-term targets.
Capital Allocation: The company plans to return approximately $500 million to shareholders through share repurchases in the first half of 2026.
Crop Protection Volume Growth: Mid-single-digit growth is expected, driven by demand for new products and biologicals.
Currency Impact: A low single-digit tailwind on net sales and a $75 million tailwind on operating EBITDA are expected due to currency appreciation, particularly the Brazilian real, euro, and Canadian dollar.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Dividend Announcement: The company announced the first quarter dividend for 2026.
Dividend Return in 2025: Approximately $1.5 billion was returned to shareholders in fiscal 2025 through a combination of dividends and share repurchases.
Share Repurchase Plan for 2026: The company is targeting about $500 million of share repurchases in the first half of 2026.
Share Repurchase in 2025: Part of the $1.5 billion returned to shareholders in 2025 included share repurchases.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you break down Slide 27 regarding the Bayer litigation and its impact on E3 or Conkesta acceleration?
A:The agreement with Bayer provides freedom to operate and increased access to the licensing market, accelerating the corn licensing business to as early as 2027 and entering the cotton licensing market. It resolves outstanding litigation with Bayer and sets a path to deliver about $1 billion in licensing income in the next decade. It also allows for triple-stack options to enter the market 5 years earlier and brings the third-gen above-ground product 2 years forward.
Q:Does the $610 million payment to Bayer eliminate existing licensing expenses?
A:Yes, some Bayer royalties will no longer be paid, contributing to a net royalty benefit of $120 million in 2026. However, access to HT4 from Bayer will still require royalties.
Q:How does the new agreement with Bayer affect the royalty journey and financial projections?
A:The agreement accelerates the royalty journey by pulling forward corn licensing to 2027 and introducing cotton licensing. This changes the financial trajectory, with significant growth expected post-2030, including potential wheat opportunities.
Q:What is the outlook for gene editing in Europe and the commercialization of multi-disease resistant corn?
A:Europe is expected to adopt a regulatory framework for gene editing by 2026, which will simplify processes and improve crop technology access. The multi-disease resistant corn hybrid is expected to be commercialized within 1-2 years after regulatory approvals.
Q:What is the status of the U.S. order book and farmer buying activities?
A:The U.S. order books are strong, with prepay levels on par with the prior year. There may be a slight shift towards more soy acres, but the mix is manageable within the provided guidance.
Q:What is the outlook for free cash flow in 2026?
A:Free cash flow is expected to be in the range of 45%-50%, with some headwinds from working capital normalization and onetime items like the Bayer agreement and separation costs.
Q:What is the progress of Conkesta soybeans in Brazil?
A:Conkesta soybeans are expected to double market share in 2026, reaching mid-teens percentage. The transition to a licensing model is progressing well, with significant earnings growth anticipated.
Q:What is the share of off-patent versus patented products in the Crop Protection business in 2026?
A:The portfolio remains about 2/3 differentiated, with no major shifts expected. New products like the fungicide Visa are expected to augment the differentiated portfolio.
Q:What were the market share gains or losses in major crops and geographies in 2025?
A:Market share gains were achieved in corn and soy in North America, mid-single-digit gains in Brazil, and recovery in India and EMEA. No significant losses were reported.
Q:What is the impact of the Bayer agreement on Enlist soybeans?
A:The Bayer agreement does not include access to Enlist soybeans.
Q:What are the key elements of the 2026 EBITDA guidance?
A:The guidance includes low single-digit seed price increases, increased royalty income, flat seed volume, and continued growth in new products and biologicals. Cost improvements of $200 million are expected, with some headwinds from tariffs and dissynergies.
Q:What is the outlook for the Latin American Crop Protection market in 2026?
A:The market is expected to grow modestly, with volume growth offset by pricing pressures. Channel inventories are normal, but farmers face financial stress due to high interest rates and suppressed commodity prices.
Q:What is the strategy for expanding beyond corn and soy in the Seed business?
A:The focus is on growing the core businesses, entering the cotton and hybrid wheat markets, and leveraging gene editing for adjacent crops. Expansion will depend on providing unique and differentiated technology.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the reconciliation of financial projections from the 2024 Investor Day deck with the updated projections, using vague language about acceleration and strategic value without providing specific numerical details.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
America Asia
America agreement
Asia Pacific
Bayer seed
CP productivity
Day event
Farmers Tier
Form SEC
Form appointment
Instructions VP
Licensing Crop
Pacific farmer
SEC separation
Seed Licensing
Seed cost
Seed region
SpinCo trajectory
SpinCo transition
Tier technology
VP Investor
acceleration year
account result
agency capital
agreement SpinCo
agreement corn
agreement introduction
canola
capital structure
company
cotton
market condition
name
team
website
win
year resolution
CTVA Transcript
Corteva, Inc. (CTVA) Q4 2025 Earnings Call Transcript
Positive2-4
Corteva's earnings call indicates strong financial performance with 14% EBITDA growth and improved margins. The strategic separation into two companies and new product launches are positive indicators. The Q&A highlights promising developments like the Bayer agreement and gene editing prospects in Europe. Despite some currency headwinds and SG&A increases, the overall sentiment remains positive due to strong market position, growth in key markets, and optimistic financial guidance, warranting a positive stock price prediction.
Corteva, Inc. (CTVA) Q3 2025 Earnings Call Transcript
Positive11-5
Corteva's earnings call reveals strong financial performance with raised guidance for EBITDA and EPS, indicating confidence in future growth. The commitment to a $1 billion share buyback and positive outlook for biologicals and crop protection further bolster sentiment. While management was vague on some specifics, the overall tone was optimistic, supported by strong market share gains and promising product developments. With increased free cash flow and strategic plans for growth, the stock is likely to see a positive reaction.
Corteva, Inc. (CTVA) Q2 2025 Earnings Call Transcript
Positive8-7
The earnings call highlights strong financial performance, with organic sales and operating EBITDA growth, significant cost savings, and improved free cash flow guidance. The Q&A section reveals confidence in pricing strategies, share gains in key markets, and minimal tariff impacts. Despite some competitive pressures in Brazil, overall guidance remains optimistic with new product launches and partnerships. The lack of specific details in some management responses does not outweigh the positive financial and strategic developments, suggesting a positive stock price movement in the short term.
Corteva, Inc. (CTVA) Presents at Wolfe Research 2nd Annual Materials of the Future Conference Transcript
Neutral6-17
CTVA Slides
CTVA Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
