ADM · Q2 2025 Earnings
CautiousArcher Daniels Midland
Reported August 5, 2025
30-second summary
30-second take: ADM delivered a weak Q2 with revenue down 4.9% YoY to $21.2B, adjusted EPS of $0.93, and segment operating profit of $830M — but the print is secondary to management tightening FY2025 adjusted EPS to ~$4.00 and effectively pre-announcing a Q3/Q4 split of roughly 35/65. The recovery thesis hinges on three external/internal catalysts landing in Q4: 45Z tax credit clarity plus the RBO proposal lifting soybean oil and crush margins, Decatur East coming back online (removing a $20–25M quarterly cost drag), and North American harvest improving Ag Services. This is a policy-and-execution-dependent guide, not a momentum guide.
Headline numbers
EPS
Q2 FY2025
$0.93
Revenue
Q2 FY2025
$21.17B
-4.9% YoY
Gross margin
Q2 FY2025
6.5%
Key financials
Q2 FY2025| Metric | Q2 FY2025 | YoY |
|---|---|---|
| Revenue | $21.17B | -4.9% |
| EPS | $0.93 | — |
| Gross margin | 6.5% | — |
Guidance
Prior quarter data unavailable — comparison not possible.
Segment performance
Q2 FY2025| Segment | Q2 FY2025 | YoY |
|---|---|---|
| Ag Services and Oilseeds | $16.269B | -6.2% |
| Carbohydrate Solutions | $2.792B | -3.5% |
| Nutrition | $1.993B | +4.5% |
Platform metrics
Q2 FY2025| Segment | Q2 FY2025 |
|---|---|
| Oilseeds Processed Volumes | 9,051 thousand metric tons |
| Corn Processed Volumes | 4,614 thousand metric tons |
Profitability
Q2 FY2025| Segment | Q2 FY2025 |
|---|---|
| Total Segment Operating Profit | $830 million |
| Adjusted ROIC | 6.9% |
| Adjusted EBITDA | $931 million |
| Operating Cash Flow (YTD) | $4.0 billion |
| Cash Flow from Operations before Working Capital (YTD) | $1.2 billion |
| FY2025 Adjusted EPS Guidance | ~$4.00/share |
Management tone
Tone is cautious but conditional, not defeated. Management has built the H2 narrative around external catalysts (biofuel policy, harvest) with self-help as ballast — the inverse of the typical ADM framing where operational execution leads.
Biofuel policy moved from headwind to thesis anchor. Earlier in the year policy uncertainty was framed as a constraint on customer decisions and crush economics; this quarter management cited the 45Z producer tax credit extension to 2029 (limited to North American feedstocks) and the proposed RBO as already moving soybean oil prices and crush margins. From the call: "With the favorable proposed RBO and finalization of the 45Z producer tax credit, soybean oil has rallied and board crush margins have improved." That's the first quarter where management can point to observable margin impact rather than theoretical benefit.
Decatur East has flipped from drag to bridge. The facility was a recurring drag on specialty ingredients; this quarter management confirmed recommissioning and is ramping production. Per the call: "This will have a positive impact on cost within our specialty ingredients business as we move through the back half of the year." The Q&A pinned the quarterly cost headwind at $20–25M and the annualized 2026 benefit at roughly $100M — a quantified earnings bridge that wasn't on the table before.
Cost program has moved from aspiration to delivery. Management restated the $500–750M three-to-five-year cost target but layered in evidence: "we are seeing through these actions that our assets are running better." This is the first time the program is being presented as a near-term contributor to the tightened FY EPS rather than a multi-year aspiration.
The H2 split is unusually explicit. Management volunteered a 35/65 Q3/Q4 earnings split — rare granularity for a company that typically guides annual EPS only. The implication: don't extrapolate Q3 weakness. The risk: Q4 has to do an enormous amount of work, and if any one of policy, harvest, or Decatur slips, the $4.00 anchor breaks.
Material weakness was addressed head-on. Management confirmed remediation of the previously disclosed material weakness in intersegment pricing and measurement controls this quarter, following an 18-month plan with auditor engagement throughout. Full audit validation comes at the 10-K, but the framing signals confidence the issue is behind them.
Recurring themes management leaned on this quarter:
Risks management surfaced:
Q&A highlights
Andrew Strelcic · BMO
Request for explicit earnings split between Q3 and Q4 2025, and whether annualizing Q4 makes sense as a starting point for 2026 modeling
Management provided approximately 35-65 split (Q3-Q4) for earnings, noting Q3 benefits are limited due to prior contracting while Q4 will capture RBO/45Z benefits, improved crush margins, Decatur East restart, and better services earnings. For 2026, management stated it's too early but typically the exit rate becomes the entry rate.
Ben Burra · BART
Request for outlook on nutrition segment in H2 2025 and 2026, specifically quantification of Decatur East restart benefits and run-rate operating income for the segment
Management detailed nutrition recovery across animal nutrition (margin expansion story on 7 quarters of self-help), human nutrition (flavors driving strong revenue growth while maintaining EBITDA margins, biotics +9% revenue growth), and special ingredients (headwind of $20-25M/quarter from Decatur downtime ending). Indicated ~$100M of specialty ingredient headwinds not present in 2026 but declined to provide specific 2026 run-rate numbers.
Manav Gupta · UBS
Clarification on material weakness remediation, whether SEC/auditors have validated controls, and measures to prevent recurrence
Management confirmed material weakness remediation completed this quarter through 18-month robust remediation plan focusing on intersegment pricing and measurement controls. Engaged auditors throughout process; management and audit committee tested controls over multiple periods. While full audit validation occurs at 10-K filing, auditors have ongoing obligation to validate public disclosures. Going forward, will continue focusing on transparency and compliance initiatives.
Heather Jones · Heather Jones Research
Two-part question: clarification on replacement curve definition in crush margin guidance; and big-picture outlook for crush business in 2026-27 if RVO/SRE policy plays out benignly
Management clarified replacement curve includes both bold crush and cash margins. On big picture, emphasized oil will capture ~50% of crush (historically hasn't happened in years), benefiting from increased soybean oil demand via RVOs. Expects ~6M tons extra feedstocks + 800k tons food growth. Acknowledged some initial margin compression in refining from pretreatment capacity, but strong outlook for crash if RVOs confirmed and SREs kept in check. Noted currently exporting soybean oil but will stop; adjusting customer blends (peanut, cotton, rapeseed oils).
Stephen Haynes · Morgan Stanley
Analysis of why RD (renewable diesel) margins have remained pressured despite RVO proposal, with value accruing to crush rather than renewable diesel; expectation for future dynamics
Management attributed current margin pressure to uncertainty until final RVO/SRE numbers are confirmed. Cautioned against reading too much into current dynamics given rumor-driven volatility. Referenced historical precedent that when oil takes 50%+ of crush, margins improve. Emphasized industry has produced little to meet mandates in H1; expects accelerated production in H2 when clarity emerges. RD values up significantly YoY (40 cents to $1.15-1.16) but room for further improvement.
What to watch into next quarter
Whether Q3 adjusted EPS lands near the implied ~$0.83 (35% of the ~$2.37 H2 EPS implied by tightening FY to $4.00 minus H1's $1.63). A Q3 print materially below that puts the $4.00 FY anchor at immediate risk because Q4 cannot stretch further.
Final RVO numbers and SRE treatment from EPA. Management has explicitly told investors crush margin expansion depends on these confirmations; the Q4 $60–70/mt soybean crush guide assumes benign outcomes.
Decatur East production ramp confirmation. The $20–25M quarterly cost headwind must visibly fade in Q3 results to support the $100M 2026 bridge management has now committed to publicly.
Ag Services Q4 commentary on North American harvest pace and export flows. Management is leaning on "strong crops in North America" for the Q4 step-up; a weak harvest or export disruption breaks that leg.
Whether nutrition operating profit growth continues to outpace the rest of the portfolio. Seven quarters of animal nutrition margin expansion is the cleanest secular story ADM has; any break would force the recovery thesis to rest entirely on the cyclical crush segments.
10-K filing confirmation of material weakness remediation. Auditor validation at year-end is the final gate; if remediation slips, the governance overhang returns.
Sources
- ADM Q2 2025 press release (Form 8-K Exhibit 99.1), filed 2025-08-05 — https://www.sec.gov/Archives/edgar/data/7084/000000708425000040/adm-ex991_20250630xq2.htm
- ADM Q2 2025 earnings call transcript (management remarks and Q&A)
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