ANDE — The Andersons, Inc.

Summary of The Andersons Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Net Income: $67 million, or $1.97 per diluted share; adjusted net income was $70 million, or $2.04 per diluted share, compared to $47 million, or $1.36 per diluted share 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, up from $117 million in Q4 2024; full-year adjusted EBITDA was $337 million, down from $363 million in 2024.
• Cash Flow: Q4 cash flow from operations before changes in working capital was $110 million, 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 less than 2.5x.

2. Strategic Updates and Business Highlights

• Agribusiness: Reported Q4 pretax income of $46 million, down from $56 million in 2024, with challenges in merchandising due to low grain prices.
• Renewables: Achieved a pretax income of $54 million, significantly up from $17 million in Q4 2024, benefiting from full ownership of ethanol plants and record production.
• Capital Investments: Announced investments in the Clymers Indiana facility and a renewable feedstock storage facility in Kansas, aimed at increasing production capacity.
• Skyland Grain: Improved performance noted, with an EBITDA contribution expected to normalize between $25 million to $35 million in 2026.

3. Forward Guidance and Outlook

• 2026 Expectations: Anticipate better financial results in Agribusiness due to more certainty in global grain markets and strong demand for ethanol.
• Agribusiness Strategy: Focus on connecting supply to end users, with expectations of higher planted acres and increased fertilizer applications.
• Renewables Outlook: Continued strong domestic and global demand for ethanol is expected, with potential benefits from biofuels policy clarifications.

4. Bad News, Challenges, or Points of Concern

• Agribusiness Challenges: The segment faced headwinds from well-supplied grain markets and low prices, impacting merchandising opportunities.
• Cash Flow Decline: Year-over-year decrease in full-year cash flow attributed to challenging agricultural market conditions in the first half of 2025.
• Farmer Selling Dynamics: Farmers are holding onto crops due to low prices, which may delay selling until prices improve, affecting market liquidity.

5. Notable Q&A Insights

• Skyland Performance: Management indicated that the strong performance was not surprising given the large fall harvest, with EBITDA contributions aligning with expectations.
• Fertilizer Application Strategy: Anticipated higher nitrogen applications for 2026, although economic conditions at the farm gate may influence farmer decisions.
• Farmer Selling Behavior: Farmers are likely to hold grain until prices improve, with significant selling expected before the next harvest, influenced by recent price rallies.

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