← Back

Mosaic: Mosaic's 2025 Earnings: A Year of Challenges and Recovery

Mosaic reported revenues that were impacted by the weak phosphate demand in the United States during the fourth quarter. The company's EPS came in at $0.22, missing estimates of $0.48. The financial performance was affected by significant market volatility, with inventory builds in both finished products and raw materials weighing on cash flow for much of the year. The impact was significant, with working capital reducing cash flow by $960 million for the year and contributing to an $829 million increase in net debt.

MOS

USD 26.98

-5.3%

A-Score: 5.7/10

Publication date: February 25, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • Phosphate Production Recovery Anticipated 7+ million tonnes in 2026, with Florida and Miski Mayo achieving record outputs in 2025.
  • Potash Output Growth Expected 9 million tonnes in 2026, driven by full Esterhazy rates and HydroFloat ramp-up, matching 2025 levels post-Carlsbad transaction.
  • Cash Flow Improvement Projected $300–500 million working capital release in 2026, reversing 2025’s $960 million cash outflow from inventory builds.
  • Cost Efficiency Conversion costs reduced to $112/tonne in 2025, targeting below $100/tonne, with $500M capex allocated to waste projects in 2026.
  • Debt Reduction Focus Prioritizing net debt reduction in 2026, aiming for free cash flow post-CapEx, after a $829 million debt increase in 2025.

Operational Performance

The company's phosphate production is expected to improve in 2026, with all facilities, except New Wales, already operating at or above an 80% operating factor. The company aims to achieve a 7-plus million tonne production guidance for 2026. In potash, the company is back at full operating rates at Esterhazy, and the HydroFloat project is ramping up, with expectations of record production in 2026. As Bruce Bodine stated, "we are on track to improve phosphate production performance, and we have posted consistently good potash production throughout 2025."

Cost Management and Capital Allocation

Mosaic is maintaining disciplined cost management through all market conditions. The company's conversion costs have declined to $112 per tonne, and it remains confident in its ultimate objective of getting below $100 conversion cost. Capital expenditures are expected to be higher in 2026 than in 2025, driven primarily by required investment in new gyp stacks at multiple sites. The company expects to generate free cash flow after CapEx and other cash spend above the minimum dividend in 2026, allowing it to prioritize debt reduction and subsequently pave the way to resume extraordinary returns to shareholders.

Valuation and Outlook

With a P/E Ratio of 6.51 and an EV/EBITDA of 3.1, the market seems to have priced in the challenges faced by the company. The Net Debt / EBITDA ratio stands at 0.17, indicating a manageable debt burden. Analysts estimate next year's revenue growth at -0.7%. The company's guidance is based on the last three months of production, indicating potential upside. As the company navigates the challenges in the phosphate and potash markets, its focus on cost management and capital allocation will be crucial in driving future growth.

Market Dynamics

The DAP price in North America has remained stable due to farm affordability issues, while the international market has seen price increases over the last five weeks. The company's phosphate rock inventory is higher due to the lower production in the first half of 2025, but with increased production rates, it expects to release around $170-180 million of excess rock inventory. The market dynamics will continue to play a crucial role in shaping Mosaic's performance in 2026.

Mosaic's A-Score