Corteva Q2 Earnings Call Highlights

Key Points

• Corteva raised its 2026 outlook after strong first-half results, now targeting operating EBITDA of $4.1 billion–$4.3 billion and operating EPS of $3.60–$3.80. First-half sales rose 4% to $11.3 billion, while EBITDA increased 10% to $3.7 billion.
• Growth was supported by seed demand, licensing income, newer crop-protection products and cost savings, which offset pricing pressure in crop protection—particularly in Brazil. Management expects low-double-digit seed sales growth and high-single-digit crop-protection volume growth in the second half.
• Corteva remains on schedule and under budget to separate its businesses on Oct. 1, with the advanced seed and genetics company to operate as Vylor. The company has appointed leadership, filed its separation documents and expects significantly lower separation-related dis-synergies than previously projected.

Corteva NYSE: CTVA raised its full-year outlook after reporting higher first-half sales, earnings and margins, citing demand for its seed technologies, growth in new crop-protection products, licensing income and cost discipline. The agricultural company also said it remains on schedule to separate its businesses on Oct. 1, with its advanced seed and genetics company expected to operate as Vylor.

For the first half of 2026, net sales increased 4% to $11.3 billion, while organic sales rose 2%. Operating EBITDA increased 10% year over year to $3.7 billion, and operating EPS increased 14%, Chief Executive Officer Chuck Magro said. Operating EBITDA margin expanded to 32.8%, an increase of nearly 200 basis points, according to Chief Financial Officer David Johnson.

Second-quarter net sales totaled $6.4 billion, while operating EBITDA rose 4% to $2.3 billion.

Outlook Raised on First-Half Execution

Corteva raised its 2026 operating EBITDA forecast to a range of $4.1 billion to $4.3 billion and increased its operating EPS outlook to $3.60 to $3.80 per share. At the midpoint, the company said the updated outlook implies approximately 9% EBITDA growth and 11% EPS growth from the prior year.

The company also lifted its operating EBITDA margin outlook to 22.5% to 23.5%. Johnson said higher net interest expense would partially offset EBITDA gains, but management continues to expect earnings growth and margin expansion.

Management expects second-half EBITDA to be approximately flat from the prior year. The company said the back half will include the effects of tariffs, separation dis-synergies and the Middle East conflict, while the third quarter is expected to post an operating EBITDA loss broadly comparable with the loss recorded in the third quarter of 2024. Corteva expects all second-half earnings to be delivered in the fourth quarter.

• First-half price and mix contributed nearly $100 million to EBITDA growth.
• Volume added about $40 million, supported by North American seed demand and high-single-digit growth in crop-protection new products.
• Cost performance added more than $160 million through lower input costs, manufacturing efficiencies and productivity efforts.
• Currency provided an approximately $85 million benefit, primarily related to the euro.
• Improved seed net royalties contributed about $90 million, as lower royalty expense and higher royalty income positioned the company to be net royalty positive for the year.

Seed Demand and Licensing Support Results

Seed organic sales increased by low single digits during the first half, with growth in every region led by North America and Europe, the Middle East and Africa. Johnson said demand continued for the company’s differentiated technology portfolio, while expanded out-licensing income also supported results.

In North America, Executive Vice President of the Seed Business Unit Judd O’Connor said Corteva believes it gained “a tick of share” in corn, including through its Pioneer and Brevant brands. He said the company expects soybean share to be roughly flat overall, with gains in the western and eastern Corn Belt offset by pressure in the Delta tied to the return of the dicamba label and its effect on cotton.

For the second half, Corteva expects seed organic sales growth in the low-double-digit range. The company expects Brazil corn planted area to be approximately flat, although Johnson said Corteva’s order book is ahead of the market. Management cited tight credit, as well as fuel and fertilizer costs, as factors encouraging Brazilian growers to make purchase decisions closer to planting.

Corteva expects Conkesta E3 to reach high-single-digit to low-double-digit market penetration in 2027, Johnson said.

Crop Protection Volumes Offset Pricing Pressure

Crop-protection pricing declined by low single digits during the first half amid competitive conditions, particularly in Latin America, while volumes increased by low single digits as customers adopted newer products. Corteva expects second-half crop-protection volumes to rise at a high-single-digit rate, while pricing is projected to decline by low to mid-single digits.

Magro said pricing in Europe and the U.S. was essentially flat in the first half, while the company’s newer crop-protection products recorded flat pricing and high-single-digit volume growth. The company expects its new-product portfolio to approach $2 billion in revenue this year.

Management said pricing pressure in Brazil was partly associated with certain products facing generic competition after patent expirations, including a pre-emergent herbicide. Magro said Corteva had reduced its cost structure in anticipation of the competition, enabling it to maintain margins and market share despite lower pricing.

“We don't think that the high-single-digit pricing pressure is the new normal in Brazil,” Magro said, adding that the company does not expect price recovery in the country during 2026. He said the market remains well supplied but is growing, supported by acreage and increased disease and pest pressure.

Luke Kissam, the future CEO of New Corteva, said two-thirds of the crop-protection portfolio consists of differentiated technology. He also highlighted a pipeline of seven new active ingredients expected over the next decade. Magro identified Haviza, a fungicide planned for launch in Brazil in coming years, as the next product in that pipeline.

Separation Remains Targeted for Oct. 1

Corteva said the planned separation remains on time and under budget. The company has named Kissam as CEO of New Corteva, selected Vylor as the name of the future advanced seed and genetics company, filed a Form 10 publicly, appointed both boards and engaged credit rating agencies on planned capital structures.

Magro said the company has largely offset separation-related dis-synergies on a run-rate basis. Corteva expects about a $25 million headwind this year due to the timing of separation activities, compared with earlier expectations of approximately $100 million in annual dis-synergies.

Remaining steps include amendments to the Form 10, finalizing capital structures, completing IT separation work and obtaining effectiveness for the Form 10. Corteva and Vylor plan to hold separate Investor Day events on Sept. 15 at the New York Stock Exchange, where management said the companies will provide 2029 financial frameworks.

Magro said this was his final earnings call as CEO of the combined organization. He said that since Corteva was formed in 2019, operating EBITDA had improved by $1.7 billion, margins had expanded by more than 750 basis points, the company had invested nearly $9 billion in research and development, and it had returned close to $8 billion of cash to shareholders.

About Corteva (NYSE:CTVA)

Corteva, Inc NYSE: CTVA is an independent global agriculture company that was established as a publicly traded firm in mid‑2019 following the separation of the agriculture businesses from DowDuPont. The company focuses on delivering technologies and products that help farmers increase productivity and manage crop health. Corteva's operations combine seed genetics, crop protection chemistries, digital tools and biological solutions to address the full cycle of crop production.

Core business activities include research and development of seed genetics and trait technologies, formulation and sale of crop protection products (such as herbicides, insecticides and fungicides), and the development of seed treatments and biologicals.

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