Corteva (NYSE:CTVA) executives highlighted a “strong year” in 2025, progress toward a planned second-half separation, and an updated 2026 outlook during the company’s fourth-quarter earnings call. Management said fourth-quarter results were in line with expectations, while cash flow exceeded internal assumptions, and the company reiterated a 2026 operating EBITDA midpoint of $4.1 billion.
Separation planning and expected costs
CEO Chuck Magro said Corteva remains on track for a second-half separation, “most likely sometime in the fourth quarter,” while noting it is still early in planning. Magro outlined a series of milestones expected throughout 2026, including a global CEO search for the “new Corteva,” the launch of the SpinCo name and brand identity, leadership team announcements for both companies, capital structure work with credit agencies, Form 10 filings, and IT systems separation.
2025 performance: margin expansion and record free cash flow
Magro said 2025 included low single-digit top-line growth and low double-digit operating EBITDA growth, producing more than 200 basis points of margin expansion to above 22% for the first time since becoming a public company.
CFO David Johnson said that while fourth-quarter sales and operating EBITDA declined versus the prior year, the quarter was still the second-highest fourth quarter on record, with the prior-year period described as a record. Organic sales in the fourth quarter were down 4%, driven by declines in both businesses, which management attributed largely to timing shifts and competitive dynamics.
For the full year, Johnson reported:
- Organic sales up 4%, with growth in both seed and crop protection.
- Operating EBITDA up 14% to $3.85 billion, with operating EBITDA margin above 22% (up about 215 basis points).
- Currency headwind of $217 million to EBITDA, driven by the Brazilian real, Canadian dollar, and Turkish lira.
- Free cash flow of $2.9 billion, an improvement of about $1.2 billion from the prior year, driven by higher EBITDA, lower cash taxes, and working capital discipline.
Johnson also said the company returned about $1.5 billion to shareholders in 2025 through dividends and share repurchases.
Segment commentary: seed share gains, licensing progress, and crop protection resilience
Management said the seed business delivered organic growth in every region and share gains in corn and soybeans. Magro said the seed segment generated about $340 million of net cost improvements and $90 million in royalty improvement in 2025. Johnson added that seed’s net royalty expense improved by about $90 million, leaving the company with a net royalty expense position of around $120 million at year-end.
On Brazil soybeans, Magro reiterated expectations to cross double-digit trait penetration for Conkesta in 2026. During Q&A, Seed EVP Judd O’Connor said Corteva expects to finish 2025 in the mid-single digits for Enlist E3/Conkesta E3 in Brazil, then “double or more than double” in 2026, with a view toward mid-teens-plus in 2026 as the company becomes “100% focused on licensing through multipliers.”
In crop protection, Magro said the business delivered growth and margin expansion despite “less than ideal” market conditions, supported by a pipeline described as $9 billion of differentiated technologies. Johnson said crop protection price was down 2% for the year, as expected, driven mostly by Brazil, while volume was up 5% with gains in nearly every region. Management highlighted strong demand for new products and said biologicals delivered double-digit volume gains versus the prior year.
Crop Protection EVP Robert King said the portfolio remains about two-thirds differentiated and that Corteva does not face major shifts from products coming off patent. King also said the company hopes for a “visa launch” later in 2026 for a fungicide targeting Asian soybean rust, pending registration.
Bayer agreement: litigation resolution and accelerated licensing plans
Magro said Corteva reached a “comprehensive resolution” with Bayer related to seed freedom to operate, which he said provides certainty and resolves outstanding litigation. He said the company committed to a $610 million payment that was “largely completed” in the prior month, and management believes the agreement could generate about $1 billion of aggregate earnings upside over the next 10 years across corn, cotton, and canola through outlicensing and branded sales.
Management outlined several expected impacts, including accelerated licensing timelines. Magro said the agreement helps accelerate the licensing of existing Corteva proprietary triple-stack corn technologies, with licensing now expected “as early as 2027,” and facilitates the introduction of a third-generation above-ground trait platform in North America corn by the end of the decade. O’Connor added that the agreement provides freedom to operate in canola in specific markets and advances triple-stack market options five years versus the prior plan, while bringing the next proprietary third-generation above-ground product two years forward.
On royalties, Johnson said Corteva now expects to reach royalty neutrality in 2026, two years earlier than previously expected. He said a portion of the company’s projected $120 million net royalty benefit in 2026 reflects Bayer royalties that will no longer be paid in 2026 and 2027, while the broader financial upside from the agreement is expected to ramp later, “past 2027.” O’Connor also clarified that access to Bayer’s HT4 trait would not be royalty-free, describing a reciprocal royalty structure.
2026 guidance: EBITDA growth, tariffs, and capital returns
Johnson reiterated 2026 operating EBITDA guidance of $4.0 billion to $4.2 billion, with a midpoint of $4.1 billion (about 7% growth from 2025 at the midpoint). Operating EPS is expected to be $3.45 to $3.70, reflecting higher earnings and a lower average share count, partially offset by higher net interest expense.
Key elements of management’s 2026 bridge included:
- Total company pricing slightly up, with seed gains partially offset by crop protection declines; crop protection prices expected down low single digits.
- Seed volume expected to be relatively flat, with North America share gains offset by a corn-to-soy acreage shift and a full year of Brazil soybean licensing.
- Crop protection volume expected up mid-single digits, led by new products and biologicals.
- About $120 million improvement in net royalty expense, driven by Conkesta E3 soybeans and PowerCore Enlist corn licensing.
- Approximately $200 million of productivity savings, partially offset by about $80 million in tariffs (described as mostly crop protection, largely tied to China actives coming into the United States).
- A currency tailwind versus 2025, expected to contribute about $75 million to operating EBITDA.
Johnson said the company expects about 60% of sales and roughly 85% of EBITDA to be delivered in the first half of 2026. On capital returns, management said Corteva announced its first-quarter dividend and is targeting about $500 million of share repurchases in the first half of 2026, while noting free cash flow in 2026 will be affected by separation items and the Bayer agreement.
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.
