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    ANDE
    Earnings call· Jun 2026(Q2 FY26)

    Andersons Q2 FY26 earnings call ANDE

    Aug 4, 2026 Source

    Executive summary

    The Andersons Q2 FY26 — Record Renewables Earnings Drive Strong Performance

    The Andersons delivered a strong second quarter, primarily driven by record performance in its Renewables segment due to efficient ethanol production and higher margins. The Agribusiness segment also improved year-over-year, supported by strong fertilizer results. The company is progressing on long-term growth projects and maintains a healthy balance sheet, positioning it to capitalize on market opportunities despite ongoing geopolitical and weather-related variables.

    Highlights

    5

    • Renewables segment achieved record earnings, with adjusted pretax income of $88 million, up from $10 million in Q2 FY25.

    • Adjusted earnings per share reached $2.15, significantly higher than $0.24 in Q2 FY25.

    • Adjusted EBITDA for the quarter was $140 million, more than double the $65 million reported in Q2 FY25.

    • Agribusiness segment showed year-over-year improvement, with adjusted pretax income of $20 million compared to $17 million in Q2 FY25.

    • Long-term debt-to-EBITDA stood at a healthy 1.3x, well below the stated target of less than 2.5x.

    Concerns

    4

    • Increased market volatility in 2026 led to higher short-term borrowings compared to the prior year.

    • Agribusiness asset footprint experienced limited space income due to higher commodity prices and volatility.

    • The Western Corn Belt, particularly the Skyland assets, faced dryness, which minimized hard wheat production.

    • Board crush margins are being closely monitored due to increased volatility in corn futures and U.S. ethanol pricing near parity with Brazil.

    Guidance & targets

    4
    CategoryTargetConfidence
    Full-year adjusted effective tax rate
    14% to 18%
    medium materiality
    High
    Full-year capital spending
    approximately $225 million
    medium materiality
    High
    Long-range run rate EPS target
    $7 per share
    high materiality
    High
    Full-year 45Z tax credits
    $90 million to $100 million
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Agribusiness
    The segment reported improved year-over-year results, driven by a strong fertilizer application season with improved margins and operational efficiencies. Higher commodity prices and volatility provided merchandising opportunities, though asset footprint experienced limited space income. Premium ingredients business continues to operate well.
    Adjusted pretax income: $20 million (Q2 FY26) vs $17 million (Q2 FY25)Adjusted EBITDA: $53 million (Q2 FY26) vs $46 million (Q2 FY25)
    		———$20 million
    Renewables
    The segment had an outstanding quarter, generating record second-quarter ethanol production and efficient operations. Ethanol margins were up significantly year-over-year due to strong domestic and export demand, as well as higher co-product values. Merchandising businesses performed well with improved corn oil prices and volumes.
    Adjusted pretax income: $88 million (Q2 FY26) vs $10 million (Q2 FY25)Adjusted EBITDA: $103 million (Q2 FY26) vs $30 million (Q2 FY25)45Z tax credits recorded: $24 million (Q2 FY26)
    		———$88 million

    Operational metrics

    12
    Net Income Attributable
    $57 million
    Q2 FY26

    GAAP net income attributable to The Andersons. Explicitly requested to be captured despite being a GAAP statement line.

    Diluted EPS
    $1.65
    Q2 FY26

    GAAP diluted earnings per share. Explicitly requested to be captured despite being a GAAP statement line.

    Adjusted Net Income
    $74 millionup from $8 million in Q2 FY25
    Q2 FY26

    Non-GAAP adjusted net income.

    Adjusted EPS
    $2.15up from $0.24 in Q2 FY25
    Q2 FY26

    Non-GAAP adjusted earnings per share.

    Adjusted Pretax Earnings
    $93 millionup from $15 million in Q2 FY25
    Q2 FY26

    Non-GAAP adjusted pretax earnings.

    Adjusted EBITDA
    $140 millionup from $65 million in Q2 FY25
    Q2 FY26

    Non-GAAP adjusted EBITDA.

    Capital Spending
    $76 millionup from $49 million in Q2 FY25
    Q2 FY26

    Includes funding for long-term growth projects and normal maintenance capital.

    Long-term Debt-to-EBITDA
    1.3xbelow stated target of less than 2.5x
    Q2 FY26

    Remains well below the company's target.

    Effective Tax Rate
    20%
    Q2 FY26

    Varies based on tax credits and noncontrolling interests.

    45Z Tax Credits Recorded
    $24 million
    Q2 FY26

    Recorded in the Renewables segment.

    Ethanol Blend Rate (US)
    10.51%gained 14 basis points from 2024
    2025

    Expected to continue trending higher.

    Trailing 12-Month EPS
    exceeding $6
    TTM

    Demonstrates ability to exceed target.

    Capital programs

    2
    Houston grain elevator upgradesunderway
    Spent to date: Grain elevator upgrades completed, soybean meal export portion remaining

    Benefit: Increased overall Agribusiness results, soybean meal export capability

    We have completed the grain elevator upgrades at Houston, leaving only our soybean meal export portion of this Agribusiness project to be completed. We expect this to be fully operational in the fourth quarter.

    Clymers Class VI well permitunderway
    Spent to date: Progressing through regulatory review

    Benefit: Further reduced carbon intensity score of ethanol, enabling additional tax credit generation

    The Class VI well permit for our Clymers, Indiana facility continues to progress through regulatory review. And once approved and operational, this initiative will further reduce the carbon intensity score of our ethanol, enabling additional tax credit generation.

    Risks & headwinds

    7
    Increased market volatility2026

    Increased short-term borrowings

    Limited space income in AgribusinessQ2 FY26

    Limited space income

    Mitigation: Merchandising opportunities from higher commodity prices and volatility

    Weather market and dryness in Western Corn BeltCurrent

    Reduced rainfall across much of the Western corn belt; minimized hard wheat produced in Skyland region

    Mitigation: Merchandising opportunities from potentially smaller feed grains crop in the West

    Geopolitical tensionsRemainder of 2026

    Unquantified impact on market variables

    Mitigation: Diversified portfolio and merchandising potential

    Competition in ethanol exportsCurrent

    Some recent competition from Brazil

    Mitigation: Elevated global fuel prices enhancing ethanol's appeal; continued strong ethanol exports expected

    Board crush margin volatilityCurrent

    Increased volatility in corn futures and U.S. ethanol currently priced near parity with Brazil

    Mitigation: Monitoring closely; potential for increased corn prices to drive DDG co-product values up

    Global fertilizer supply issuesOngoing

    Unquantified impact

    Mitigation: Well positioned for spring planting; continued monitoring

    What to watch in Q3 FY26

    5

    Houston soybean meal export facility completion

    Q4 FY26
    CurrentGrain elevator upgrades completed, soybean meal export portion remaining
    TargetFully operational

    Why it matters

    This project is expected to increase overall Agribusiness results and is a key growth investment.

    We have completed the grain elevator upgrades at Houston, leaving only our soybean meal export portion of this Agribusiness project to be completed. We expect this to be fully operational in the fourth quarter.

    Q&A highlights

    7

    How did fertilizer seasonality compare to expectations, and what drove the elevated profitability in Q2?

    Seasonality skewed slightly more to Q1, in line with expectations. Profitability was driven by improved operating efficiencies, solid management, and effective risk management, combined with the ability to place planned volumes.

    “The first one was the efficiencies that we were able to realize really throughout the first half of the year, combined with solid management, continued integration into the Agribusiness really drove a little bit higher margin and execution.”

    asked by Ben Klieve · answered by William Krueger

    2 min read6 chapters

    Detailed Narrative

    01

    Renewables Segment Drives Record Performance

    The Renewables segment delivered record earnings in Q2 FY26, with adjusted pretax income surging to $88 million from $10 million in Q2 FY25. This was fueled by efficient ethanol production, significantly higher margins, and strong domestic and export demand. Increased co-product values and $24 million in 45Z tax credits further bolstered the segment's outstanding results, demonstrating the success of operational efficiencies and market positioning.

    02

    Agribusiness Segment Improvement and Fertilizer Strength

    The Agribusiness segment reported a year-over-year improvement, with adjusted pretax income rising to $20 million from $17 million in Q2 FY25. This was primarily driven by a robust fertilizer application season, which benefited from improved margins and operational efficiencies. While higher commodity prices and volatility created merchandising opportunities, the segment's asset footprint experienced limited space income, indicating a mixed environment for its various businesses.

    03

    Disciplined Capital Allocation and Strong Balance Sheet

    The company maintains a disciplined approach to capital spending, with Q2 FY26 capital expenditures totaling $76 million, an increase from $49 million in Q2 FY25, reflecting investments in long-term growth projects and maintenance. The balance sheet remains strong, with a long-term debt-to-EBITDA ratio of 1.3x, well below the target of 2.5x. This financial flexibility supports ongoing evaluations of acquisitions and organic growth opportunities that meet strategic and financial criteria.

    04

    Strategic Growth Initiatives and Carbon Reduction

    The Andersons is actively pursuing long-term growth through projects aimed at enhancing productivity, efficiency, and shareholder value. Key initiatives include reducing the carbon intensity of ethanol production and increasing volumes. The Class VI well permit for the Clymers, Indiana facility is progressing through regulatory review, which, once approved, is expected to further reduce carbon intensity and generate additional tax credits. The Houston grain elevator upgrades are nearing completion, with the soybean meal export portion anticipated to be fully operational in Q4.

    05

    Navigating Market Volatility and Geopolitical Factors

    The market outlook for the remainder of 2026 is characterized by increased variables, including geopolitical tensions, biofuels and farm bill policy, and weather events. While current corn and soybean crop conditions are generally comparable in key regions, the Western Corn Belt is experiencing dryness. Management expects continued strong ethanol exports and opportunities in bio-based diesel production, emphasizing the company's diversified portfolio and merchandising potential in volatile grain markets.

    06

    Progress Towards Long-Range EPS Target

    The company remains committed to achieving its long-range run rate EPS target of $7 per share by the end of 2028. Recent strong execution and favorable market conditions have already enabled the company to exceed $6 per share for the trailing 12 months. Management believes that the successful completion of remaining key growth projects, sustained operational excellence, and solid market conditions will position The Andersons to meet this ambitious target.

    AI-generated summary of the company’s earnings call. Not investment advice.