Corteva Lifts Outlook as Split Plan Gathers Steam, Banking on Seeds, New Chemistries and Biologicals
CEO Chuck Magro says separating seed and crop-protection units “opens more doors” for partnerships and growth; 2025 EBITDA raised to $3.8–$3.9B on mix, productivity and early Brazil demand
Corteva, Inc. struck an upbeat tone on its third-quarter earnings call, pairing a guidance raise with fresh detail on its plan to divide into two publicly traded companies in the second half of 2026. Management argued that the split will sharpen focus for both the Seed and Crop Protection (CP) franchises just as gene editing, AI, and biologicals reshape how innovation reaches the farm. “It’s not that we believe things aren’t going well today. They are,” Chief Executive Chuck Magro told investors. “It’s that we believe things could be even better in the future as two separate companies.”
Results and outlook
CFO David Johnson said third-quarter organic sales rose 11% on 12% volume growth, flipping last year’s Q3 loss to positive operating EBITDA and expanding margins by more than 600 basis points. Year-to-date, organic sales climbed 6% with operating EBITDA up 19% to more than $3.4 billion and margins exceeding 25%, aided by roughly $500 million in productivity and input-cost deflation and a $90 million improvement in net royalties.
On the back of that performance, Corteva lifted full-year operating EBITDA to $3.8–$3.9 billion (about 14% growth at the midpoint) and operating EPS to $3.25–$3.35 (up ~28%). Free cash flow of ~$1.9 billion and ~50% cash conversion were reaffirmed, and the company remains on track to repurchase $1 billion of stock in 2025. “If we end up having a typical credit mix this year… we’ll likely be north of that $1.9 billion number,” Johnson added.
Why split now
Magro framed the separation as a pragmatic response to changing industry dynamics. In seeds, gene editing and AI are expanding the technology toolkit and favor “open” licensing models that depend on elite germplasm and global production, he said. In crop protection, tougher pest and disease pressure and shifting weather favor multiple modes of action and faster adoption of biologicals, encouraging collaboration over fully integrated proprietary stacks.
“As an independent CP company, there will simply be more doors that will open,” Magro said, pointing to seed-applied technologies (SAT) and new retail relationships. Dis-synergies remain estimated at $80–$100 million, with part of that earmarked to replicate Corteva’s integrated digital and AI stack (e.g., CARL and Granular) so each stand-alone company preserves its innovation speed.
Seed momentum: share gains, royalties, and Conkesta
Seed performance continued to benefit from price/mix, acreage, and productivity. Johnson highlighted roughly $90 million in net royalty improvement year-to-date and said full-year net royalty expense should finish near $120 million, consistent with management’s path to royalty neutrality and eventual royalty income after 2028.
EVP Judd O’Connor said Corteva gained share in North American corn and “even more” in soybeans, attributing the gains to germplasm strength and brand execution. He flagged a sizeable 2026 pipeline of new hybrids and varieties and a rapid ramp for Conkesta in Brazil: “In 2025, 8%–10% of the market; in 2026 we’ll be in double digits; by 2030 we could be about a third of the market in Brazil with E3 + Conkesta.”
On potential U.S. acreage shifts after a high-corn 2025, Magro called the earnings impact modest: “About $10 million of EBITDA for every 1 million acres that shifts from corn to soybeans,” and already embedded in Corteva’s 2026 first look.
Hybrid wheat remains on track for a 2027 launch with 10%–15% yield uplift in trials. “We believe this is a $1 billion revenue opportunity in the next decade,” Magro said, adding that wheat could become a “third leg” alongside corn and soy.
On the longer-term implications of gene editing, Magro downplayed fears of disruption by small entrants. The differentiators, he said, will be elite germplasm, global seed production, and distribution — factors likely to push the industry toward more partnerships.
Crop Protection: mix upgrade, biologicals and a new active
Corteva’s CP business delivered double-digit operating EBITDA growth and continued to skew toward higher-margin innovation. EVP Robert King said about 65% of the portfolio is now differentiated; the remaining 35% isn’t “commodity generic,” but branded offerings positioned lower on the price ladder to fit farm economics.
New chemistry is scaling: Rinskor and Arylex together are expected to reach ~$1 billion of revenue in 2027, “and that’s not the top side,” King said. Corteva also unveiled Varpelgo, a next-generation insecticide active for chewing pests in fruits and vegetables, row crops and rice, targeting an early 2030s launch and ~$750 million peak sales.
Biologicals continue to outgrow the market. Magro said the franchise has climbed from ~$400 million at entry to ~$600 million this year, with a branded North American launch and expansion into Brazil and Europe. He expects high-single to low-double-digit biologicals growth next year.
A standout is the Spinosyns microbial family, which King said should reach ~$900 million this year — about 5% organic growth in a flat insecticides market — thanks to its role as a rotation partner to manage resistance. Magro emphasized why Spinosyns can hold a premium even off patent: “It’s a microbial — a living organism that’s very hard to replicate. We’ve been engineering it for almost 20 years.”
Pricing, Brazil and the 2026 market view
Corteva expects 2025 CP pricing to finish down low single digits, driven mainly by Brazil; most other regions are flat.
Looking to 2026, Magro sees the global CP market up low single digits, led by volume, with pricing stabilizing worldwide — Brazil still slightly negative but improving. “There is stability in the crop protection industry,” he said, citing steady offtake and channel inventories “in normal ranges,” and more stable generic prices out of China.
Costs, margins and cash
Corteva’s margin “journey” remains intact. Company-wide operating margin has expanded from below 15% in 2019 to the mid-20s today, and management reiterated a ~24% at the midpoint by 2027 target, supported by new products, seed out-licensing, and cost/productivity. King said CP operations and footprint optimization should deliver about $200 million of productivity in 2025 alone, with a work plan extending beyond 2027. Johnson added that working capital has improved year-over-year, with a typical fourth-quarter inventory build expected.
Latin America credit conditions
Asked about stress among leveraged growers in Brazil and Argentina, Johnson acknowledged higher borrowing costs and rising bankruptcies but said Corteva’s limited exposure to national distributors and a robust barter system — “about 40% of our Brazil sales” — have contained risk. “Past dues as a percent of AR are a couple hundred basis points better than last year,” he noted.
Capital deployment and next steps
Corteva will complete $1 billion of 2025 buybacks, Magro confirmed. Johnson said 2026 capital plans and post-split capital structures will come with formal 2026 guidance in early February. Two investor days — one for each business — will outline post-2027 margin trajectories as the separation approaches.
“We built a foundation of strength,” Magro said in closing. “The separation is about sharpening focus, accelerating innovation, and unlocking value — and we’re committed to delivering results like this past quarter throughout the transition.”
