Financial Trends -- 3/10
A phosphate/potash commodity producer where revenue is volume x realized-price, so YoY swings track
the fertilizer price cycle, not durable demand growth. Revenue YoY is positive but choppy, yet the
substance is bleak: margins are collapsing, operating earnings have turned negative, and free cash
flow is deeply negative. Headline +14.4% Q1'26 revenue growth is volume/price noise that masks a
-1,072 bps YoY gross-margin collapse to 7.9%, a -$372.9M operating loss, and negative FCF with debt
up 27% in 2025. The profile of a down-cycle commodity name, not a compounder. Mandatory penalties:
negative FCF (-2), revenue up / operating income down (-1).
Weight: 25%
Quarterly Metrics (last 8 comparable quarters, $M unless noted)
| Metric | Q2'24 | Q3'24 | Q4'24 | Q1'25 | Q2'25 | Q3'25 | Q4'25 | Q1'26 |
|---|---|---|---|---|---|---|---|---|
| Net sales | $2,817 | $2,811 | $2,816 | $2,621 | $3,006 | $3,452 | $2,974 | $2,998 |
| Net sales YoY | — | — | — | -2.2% | +6.7% | +22.8% | +5.6% | +14.4% |
| Gross profit $ | $394 | $417 | $302 | $488 | $519 | $552 | $343 | $236 |
| Gross margin % | 14.0% | 14.8% | 10.7% | 18.6% | 17.3% | 16.0% | 11.5% | 7.9% |
| Gross margin YoY (bps) | — | — | — | +373 | +330 | +120 | +78 | -1,072 |
| Operating earnings (GAAP) | $233 | $115 | $100 | $339 | $244 | $340 | ($101) | ($373) |
| Operating margin (GAAP) | 8.3% | 4.1% | 3.5% | 12.9% | 8.1% | 9.8% | -3.4% | -12.4% |
| Adj EBITDA (non-GAAP) | $584 | $448 | $594 | $544 | $566 | $806 | $505 | $416 |
| Adj EBITDA margin | 20.7% | 15.9% | 21.1% | 20.8% | 18.8% | 23.3% | 17.0% | 13.9% |
| Adj diluted EPS (non-GAAP) | $0.54 | $0.34 | $0.45 | $0.49 | $0.51 | $1.04 | $0.22 | $0.05 |
| GAAP diluted EPS | ($0.50) | $0.38 | $0.53 | $0.75 | $1.29 | $1.29 | ($1.64) | ($0.81) |
| Diluted shares (M) | 321.2 | 319.4 | 318.5 | 318.2 | 319.0 | 319.4 | 317.4 | 317.5 |
| FCF (non-GAAP) | — | — | $47 | — | — | ($135) | ($535) | ($253) |
Revenue growth is a mirage; the margin collapse is the story.
Net sales YoY reads positive and choppy (-2.2% to +6.7% to +22.8% to +5.6% to +14.4%), driven by
volume/price swings — not a clean, durable acceleration. Meanwhile consolidated gross margin fell
from 18.6% (Q1'25) to 7.9% (Q1'26), a -1,072 bps YoY collapse; operating earnings flipped from
+$339M to a -$373M loss; and Adj EBITDA margin dropped to 13.9%. Q1'26 also carried $442M of
notable items ($328M non-cash, Riverview wind-down).
Segment EBITDA ($M, quarterly)
| Segment | Q2'24 | Q3'24 | Q4'24 | Q1'25 | Q2'25 | Q3'25 | Q4'25 | Q1'26 |
|---|---|---|---|---|---|---|---|---|
| Phosphate | $308 | $265 | $341 | $276 | $217 | $280 | $144 | $115 |
| Potash | $271 | $180 | $212 | $240 | $278 | $329 | $336 | $275 |
| Mosaic Fert (Brazil) | $96 | $83 | $82 | $122 | $159 | $241 | $45 | $79 |
The margin story is segment-driven: Phosphate EBITDA more than halved
to $115M in Q1'26 (from $276M in Q1'25, -58% YoY) as the sulfur/ammonia raw-material stack
inflated and DAP realizations compressed. Potash is the lone durable leg (Canpotex sold out, ~$275M
Q1'26); Mosaic Fertilizantes (Brazil) is volatile on FX/credit. Segment EBITDA sourced from Daloopa
via the Q1'26 release reconciliation.
Annual Financial Summary (FY ends December)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Net sales ($M) | $12,357 | $19,125 | $13,696 | $11,123 | $12,052 |
| Net sales YoY | — | +54.8% | -28.4% | -18.8% | +8.4% |
| Gross profit $ ($M) | $3,200 | $5,756 | $2,211 | $1,512 | $1,902 |
| Gross margin % | 25.9% | 30.1% | 16.1% | 13.6% | 15.8% |
| Operating earnings ($M) | $2,469 | $4,785 | $1,338 | $622 | $822 |
| Operating margin % | 20.0% | 25.0% | 9.8% | 5.6% | 6.8% |
| GAAP diluted EPS | $4.27 | $10.06 | $3.50 | $0.55 | $1.70 |
| Diluted shares (M) | 381.6 | 356.0 | 333.2 | 320.7 | 318.9 |
| FCF (non-GAAP) ($M) | — | $2,594 | $795 | ~neg | ~neg |
| Total long-term debt ($M) | $3,979 | $3,397 | $3,362 | $3,378 | $4,294 |
Key trends
- Revenue is cyclical, off the 2022 peak: $12.4B (2021) spiked to $19.1B (2022) then fell to $11.1B (2024) before a modest +8.4% rebound to $12.1B (2025) — a price/volume cycle, not compounding
- Gross margin compressed ~1,000+ bps off peak: from 30.1% (2022) to 15.8% (2025); operating margin from 25.0% to 6.8%
- Share count declining: 381.6M (2021) to 318.9M (2025), -16% over five years — the one clear positive, no dilution
- FCF turned negative and debt rose: FY2022 FCF of $2,594M faded to negative in 2024-2025; total long-term debt jumped +27% in 2025 (to $4,294M) vs revenue +8.4%, partly funding the negative-FCF/CapEx gap
Free Cash Flow -- Negative and Deteriorating
FCF is negative and worsening — the mandatory-penalty driver.
Standalone quarterly prints are clearly negative: Q3'25 -$135M,
Q4'25 -$534.6M,
Q1'26 -$252.6M,
with negative TTM FCF corroborated by FMP's negative TTM FCF yield (~-6.9%). CapEx is running above
operating cash flow. This triggers the -2 penalty and the quality-gate NO on positiveGrowingFcf.
Score Rationale
Score of 3/10 reflects weak, cyclically deteriorating financial trends. Base read (revenue YoY choppy-positive but margins compressing 100+ bps, operating income turning negative, FCF declining) sits around a 5 on the raw rubric, helped only by the declining share count.
Mandatory penalty modifiers:
- Negative FCF: -2 (and caps score at 6) — FCF is negative and worsening
- Revenue growing but operating income declining/negative: -1 — Q1'26 revenue +14.4% YoY yet operating earnings -$372.9M
- Debt growing faster than revenue: not cleanly established quarter-by-quarter (the spike is concentrated in 2H'25), so not double-penalized
- No dilution penalty (share count declining)
5 (base) − 2 (negative FCF) − 1 (revenue up / op income down) = 2, rounded up to 3/10 to give credit for the durable Potash leg, the declining share count, and the consensus-modeled 2026→2027 phosphate-margin recovery. The cap-at-6 from negative FCF is non-binding here.
Quality gate — positiveGrowingFcf: NO. FCF is negative on a TTM basis and deteriorating (Q4'25 -$534.6M, Q1'26 -$252.6M).
Per the trajectory-over-absolutes principle, accelerating revenue alone is not financial strength when margins, operating income, and FCF are all moving the wrong way.
Data sourced from Daloopa (company_id 492) and FMP (market/valuation). Fiscal year ends December 31. Adj EBITDA / segment EBITDA / Adj EPS from the Q1'26 release reconciliation. All financials in USD.