ANDE — The Andersons, Inc.

Summary of The Andersons Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Net Income: $67 million ($1.97 per diluted share), up from $47 million ($1.36 per diluted share) in Q4 2024.
• Adjusted Net Income: $70 million ($2.04 per diluted share), compared to $47 million in Q4 2024.
• Gross Profit: $231 million, an 8% increase year-over-year, driven by higher volumes and margins in renewables.
• Adjusted EBITDA: $137 million in Q4 2025, up from $117 million in Q4 2024; full-year adjusted EBITDA was $337 million, down from $363 million in 2024.
• Cash Flow from Operations: $110 million in Q4 2025, compared to $100 million in Q4 2024; full-year cash flow was $278 million, down from $323 million in 2024.
• Long-term Debt to EBITDA: 1.8x, below the target of 2.5x.

2. Strategic Updates and Business Highlights

• Agribusiness Performance: Q4 pretax income of $46 million, down from $56 million in Q4 2024, attributed to challenges in grain merchandising due to low prices despite strong harvest volumes.
• Renewables Segment: Pretax income increased significantly to $54 million from $17 million in Q4 2024, aided by full ownership of ethanol plants and record production levels.
• Capital Investments: Continued focus on strategic investments, including a new renewable feedstock storage facility and expansions in agribusiness and renewables.
• Skyland Grain Acquisition: Improved performance noted, with EBITDA contribution finishing the year just shy of $20 million.

3. Forward Guidance and Outlook

• 2026 Expectations: Optimism for better financial results in Agribusiness due to anticipated stability in global grain markets and strong demand for ethanol.
• Agribusiness Strategy: Focus on connecting supply to demand, with expectations for higher-than-normal planted acres and increased fertilizer applications.
• Renewables Outlook: Continued strong demand for ethanol and supportive biofuels policies anticipated, with expectations for increased 45Z tax credits.

4. Bad News, Challenges, or Points of Concern

• Agribusiness Challenges: Declining adjusted EBITDA in Agribusiness due to low grain prices and competitive pressures; the segment's performance was impacted by external market conditions.
• Cash Flow Decline: Full-year cash flow decreased compared to the previous year, reflecting challenging agricultural market conditions.
• Farmer Selling Dynamics: Farmers are holding onto stored crops due to unfavorable economics, which could delay selling until prices improve.

5. Notable Q&A Insights

• Skyland Business Performance: Management indicated that the strong performance aligned with expectations due to favorable harvest conditions, with a projected EBITDA contribution for 2026 in the $25 million to $35 million range.
• Fertilizer Application Strategy: The company is poised for stronger-than-normal applications in Q1 2026, despite uncertainties in farmer decisions influenced by economic conditions.
• Farmer Selling Behavior: Farmers are likely to hold off on selling until prices improve, with a significant portion of stored crops needing to be marketed before the next harvest.

Overall, The Andersons reported a strong finish to 2025, particularly in the renewables segment, while facing challenges in Agribusiness. The outlook for 2026 remains positive, with expectations for improved performance driven by favorable market conditions and strategic investments.