Q1 2026 Earnings Call Transcript

Will host a question and answer session. If you would like to ask a question, please press 1 to raise your hand. To withdraw your question, press 1 again. I will now hand the conference over to Kimberly Booth, VP of Investor Relations. Please go ahead.

Good morning, and welcome to Corteva, Inc.'s first quarter 2026 Earnings Conference Call. Additionally, Judd O’Connor, executive vice president seed business unit, and Robert King, executive vice president, Crop Protection Business Unit, will join the Q&A session. We have prepared presentation slides to supplement our remarks during this call which are posted on the Investor Relations section of the Corteva, Inc. website and through the link to our webcast. During this call, we will make forward-looking statements, which are our expectations about the future.

These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Our actual results could materially differ from these statements due to these risks and uncertainties, including, but not limited to, those discussed on this call and in the Risk Factors section of our reports filed with the SEC. We do not undertake any duty to update any forward-looking statement. Please note, in today's presentation, we will be making references to certain non-GAAP financial measures.

Reconciliations of the non-GAAP measures can be found in our earnings press release and related schedules along with our supplemental financial summary slide deck available on our Investor Relations website. It is now my pleasure to turn the call over to Charles. Our prepared remarks today will be led by Charles Victor Magro, Chief Executive Officer and David P. Johnson, Executive Vice President and Chief Financial Officer.

Thanks, Kim. Good morning, everyone, and thanks for joining us today. Spring is always a busy and exciting time for agriculture, and this year is no exception. Planting in the Northern Hemisphere is proceeding well, the weather has cooperated for the most part, and we are well positioned with technology that is in high demand.

However, farmers remain cautious and value-driven. Crop mix and technology choices are increasingly strategic, aligning acreage and input decisions towards crops with the best demand signals. Overall, strong crop acreage is supporting strong seed and crop protection volume demand. There are some back half risks we are monitoring.

We will discuss those today, but let us start with the quarter. Both Seed and CP delivered healthy double-digit EBITDA gains, with all-in benefits on price mix, volume, cost, and currency. Year-over-year, Corteva, Inc. delivered a 21% increase in Q1 EBITDA and over 200 basis points of margin expansion driven by our core portfolio, our growth platforms, and focused cost execution. While some of Seed's strong North American volume performance can be attributed to timing shift, price mix gains in every region are a clear signal that regardless of tight margins, farmers continue to plant our latest hybrids and varieties in order to increase yield per acre and their own profitability.

Volume gains in crop protection across all regions were driven by double-digit gains in new products and Spinosyns, reflecting continued demand for our premium technologies. This performance allows us to reaffirm our full-year guidance, which we announced in February. It also allows us to de-risk the second half of the year slightly—David will explain more. Factored into our guidance is the fact that farmers in the U.S. are expecting to shift planted area from corn to soybeans, resulting in a projected 3% to 4% reduction in corn acres.

And if current trends hold, Enlist beans will be planted on about 65% of all U.S. soybean acres in 2026. As it approaches maturity, Enlist is the number one selling soybean technology in the U.S. As you know, our focus is now set on becoming the leading provider of soybean technology in Brazil, the largest soybean market on the planet. Our branded corn business already holds the number one position in Brazil, and we are confident our licensing model for soybeans will allow us to efficiently gain share in this critical market. We are making great strides on that front, and we are expecting trait penetration to cross into double digits this year.

With regards to the Middle East conflict, although we have minimal commercial presence in the area, we are monitoring the situation closely. Given what we know today, while we are keeping an eye on any feedstock exposure to our supply base, the main impact for Corteva, Inc. is currently related to increases in oil prices. However, given typical inventory cycle turns, we believe the 2026 impact is manageable within our current guidance range. David will get into the details, but we are also seeing some favorability on the tariff front from what we communicated in February.

Globally, from an overall industry perspective, we continue to see mixed fundamentals. Record demand for grains and oilseeds continues, and farmers are investing in premium seed and crop protection technologies to enhance and protect their yields. Overall, crop prices have increased from a year ago, but margins are still tight as large global crop production and geopolitical uncertainty continues to weigh on the markets, and several farmer input costs such as fertilizer and fuel have been impacted by higher oil prices. Our latest view on the crop protection market for the full year assumes modest growth with low single-digit volume gains more than offsetting slightly negative pricing.

For Corteva, Inc., we expect mid single-digit volume gains more than offsetting low single-digit pricing headwinds. So as we sit here today in May, I am pleased with our first quarter performance. As we all know, the first quarter does not dictate the full year in agriculture, but I would say the first half is playing out a little better than expected. We are showing good progress on our growth platforms, and I believe we have the appropriate level of attention on improving our cost position through our controllable levers.

Crossing the milestone of royalty neutrality into royalty positive later this year is a monumental accomplishment and a sign of what is to come. We already have over 100 independent seed company licensees for PowerCore and Enlist Corn and Enlist E3 soybeans. These self-help levers continue to drive value creation for the company and provide meaningful margin enhancement through the ag cycle. Let me also give you a quick update on our separation.

First, we remain on track for a separation sometime in the fourth quarter and we are trending favorably against our estimated $100 million of net dis-synergy estimate. As you will have seen a few weeks ago, we announced the new CEO for the company that will become Corteva, Inc., home to our CP business. Luke Kism is an experienced CEO with a proven track record of delivering results and we are pleased he will be joining the company on June 1. We also announced the two executive leadership teams for the new companies, both of which include a mix of existing and new members, but all of whom are aligned to our culture and values.

As such, they share a passion for agriculture science and innovation, as well as a commitment to the teams that they will lead and the employees, customers, and shareholders they will serve. In addition, we filed our initial Form 10 with the Securities and Exchange Commission with the intention of having a public filing later in the second quarter. And last but not least, earlier this week, we announced the name of the future pure play global advanced seed and genetics company. When we started thinking of a new name for our new company, we knew we wanted to honor the legacy of the generations of employees and farmers whose ingenuity and hard work have fed the world and made us an undisputed leader in solving some of the world's biggest challenges, including food and energy security.

We wanted to ensure that the technology that stands our company apart was reflected in the brand with a look and feel that was modern and tech forward but still rooted in the conviction that science and innovation can change the world for the better. I am therefore pleased to introduce the culmination of our efforts—Vylor. The name itself is derived from the word “valor,” again acknowledging the generations whose work made Vylor possible. We will talk more about this at our September 15, 2026 Investor Day event, but Vylor's success will be driven by industry-leading germplasm, biotech and gene editing capabilities, as well as a world-class pipeline that includes an exciting new licensing business, proprietary hybrid wheat technology launching next year, and the next-gen biofuels development program.

And with a nod towards the future, Vylor reflects our passion, our ambition, and our shared determination to advance agriculture to maybe one-day opportunities beyond row crops. So you can see that this year is off to a busy start as we work to get this separation across the finish line while ensuring our customers continue to get the level of performance and support they have come to expect from Corteva, Inc. Before I turn it over to David, I would like to take a minute to honor the fact that just a few weeks ago, Pioneer turned 100—an iconic brand if there ever was one. In 1926, Pioneer and its hybrid corn did not just change agriculture.

It changed the world. And we are about to do it again, and just like last time, we will do it with groundbreaking technologies, from gene editing to hybrid wheat to safe, effective, sustainable crop protection products including biologicals. It is easy to lose sight of accomplishments when we are so focused on the critical tasks at hand, but a milestone like this deserves to be celebrated. Lastly, I want to take a moment to recognize our employees for staying focused on what matters most—executing for our customers—while managing a significant number of competing priorities during the quarter.

David, over to you.

Thanks, Chuck, and welcome everyone to the call. Let us start on slide six, which provides the financial results for the first quarter. Results for the quarter were strong, led by an expected timing shift from fourth quarter and early season start in seed deliveries, and crop protection volume gains in all regions. Organic sales were up 7% compared to last year, with seed up 9% and crop protection up 4%.

Currency was a tailwind to the top line at 4% of sales, in line with expectations. Seed price mix was up 3% in the quarter, with gains in all regions as we continue to price for value. Seed volumes were up 6% compared to the prior year. Volume shifts in North America from fourth quarter 2025 were expected, and we also had an early start to the North America season due to favorable weather.

In addition, we saw continued growth in our Brevant retail brand. Crop protection price was down 2% as expected, driven by competitive market dynamics, primarily in Latin America. Crop protection volume was up 6% with gains in every region. Notably, new products and Spinosyns delivered double-digit volume gains in the quarter.

As mentioned before, it is more meaningful to look at our business by half. Timing shifts between the first and second quarter are routine in our industry, while performance in Northern and Southern Hemisphere is more complete when looking at the six-month period. Operating EBITDA was up 21% over last year. Operating EBITDA margin of over 29% was up 240 basis points driven by organic sales growth and continued cost savings from productivity.

Moving on to slide seven for a summary of first quarter operating EBITDA performance, operating EBITDA was up nearly $250 million to over $1.4 billion. Volume gains, price and mix, currency, and cost benefits more than offset headwinds from higher selling expenses. Seed continues to make progress on the path to becoming royalty positive later this year, with another $30 million decrease in net royalty expense this quarter. This improvement was driven by lower royalty expense on certain Enlist traits.

Seeds and crop protection combined to deliver roughly $70 million in productivity and input cost benefits, including lower seed commodity costs. In the first quarter, SG&A was up compared to prior year driven by unfavorable currency, bad debt, higher commissions from sales increases, and higher compensation and functional spend. We expect first-half SG&A as a percentage of sales to be relatively flat compared to 2025. Currency was roughly a $60 million tailwind on EBITDA, primarily driven by the euro. Both Seed and Crop Protection had an impressive first quarter and delivered double-digit EBITDA growth and meaningful margin expansion.

Moving to slide eight, let me briefly reaffirm our full-year 2026 guidance. We continue to expect operating EBITDA in the range of $4 billion to $4.2 billion with margins of 22% to 23%, and operating EPS of $3.45 to $3.70, representing approximately 7% growth at the midpoint. This outlook is underpinned by broad-based organic growth, supported by continued execution on our controllable levers. While we are seeing some favorable signs from an early start to the northern season, we will have a better view in a few months if we foresee any changes to our full-year expectations.

With that, let us go to slide nine and transition to the key assumptions for the first half and second half of the year. Starting with the first half, our performance is driven by strong execution in North American seed. Overall price mix is expected to be roughly flat with seed up low single digits offset by low single-digit declines in crop protection. We continue to keep an eye on broader ag input pricing but believe the majority of U.S. inputs have already been purchased for the season and will not be impacted by recent price increases.

We are also seeing meaningful benefits from productivity and lower input costs in the first half, which is helping support margin expansion. At the same time, SG&A is expected to increase modestly from the prior year from higher commissions and bad debt. From a currency standpoint, we are seeing a benefit in the first half primarily driven by the euro. Turning to the second half, we expect continued momentum driven by volume growth in crop protection, particularly in Latin America, with our biologicals portfolio contributing more meaningfully as it is weighted to the back half.

On the seed side, we see a stable demand environment supported by stable corn acreage in Brazil. From a price mix perspective, seed is expected to improve low to mid single digits while crop protection pricing remains pressured, with low single-digit declines year-over-year. Productivity will continue in the second half across both businesses. We also expect to see the net impact of tariffs and higher oil prices show up more meaningfully in the back half of the year, aligned with crop protection inventory turns.

As a reminder, tariffs are included in our guide and are trending slightly better than expected, while higher oil prices are driving a $40 million headwind—also included in guide—with active mitigation underway. And finally, currency is expected to be a tailwind in the second half as well, driven by exposure to the Brazilian real. With that, let us go to slide 10 and summarize the key takeaways. First, we delivered a strong start to the year with first quarter performance ahead of expectations, driven by continued organic growth across both seed and crop protection.

This reflects the strength of our portfolio and continued execution of price-for-value strategy. We are seeing clear benefits from our focus on controllables, with input cost savings and productivity improvements translating into meaningful margin expansion in the quarter. In addition, we made solid progress this quarter on our path to becoming royalty positive. We also remain on track to return significant capital to shareholders, including a plan to complete approximately $500 million of share repurchases in the first half of the year.

As expected, first quarter cash flow was impacted by the Bayer agreement and separation items. Absent these items, we would expect our full-year free cash flow conversion to be in line with our midterm target discussed at the 2024 Investor Day. And we are reaffirming our outlook, which reflects continued growth in sales, EBITDA, and margin for the full year. This is supported by strong demand for our differentiated technology and disciplined operational execution across the business.

Finally, we remain on track with the separation, announcing many key milestones over the last several weeks. We recently filed our initial Form 10 and expect to have a public filing towards the end of the second quarter. Due to regulatory requirements, the separation is being treated as a reverse spin-off in the Form 10 and new Corteva, Inc. presented as a discontinued operation. We expect one-time cost to be approximately $350 million, consistent with external benchmark ranges, with the majority expected to be incurred during the second half of the year.

We are also seeing some favorability in our previous estimate of $100 million in net dis-synergies, with $50 million included in our 2026 guide. And finally, I wanted to share an important update regarding our ongoing capital structure setup. Last week, the board approved a $1.5 billion discretionary contribution to the U.S. pension plan. This decision is a strategic part of our broader capital structure setup, aimed at positioning both companies for long-term success.

By taking this step, we are ensuring that each entity develops a strong investment grade credit profile on a standalone basis, which is made possible by the strength of Corteva, Inc.'s balance sheet today. With that, let me turn it back to Kim.

Thanks, David. Now let us move on to your questions. I would like to remind you that our cautions on forward-looking statements and non-GAAP measures apply to both our prepared remarks and the following Q&A. Operator, please provide the Q&A instructions.

Thank you.

We will now begin the question and answer session. We ask that you limit yourself to one question. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again.

We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Christopher S.

Parkinson with Wolfe Research. Please go ahead.

Great. Thank you so much. Chuck, obviously, there is a lot going on this year in terms of the world of agriculture between yourself, you know, Syngenta, BASF. And the numbers, you know, have kind of spoken for themselves thus far.

But in terms of your competitive positioning as a company within the industry, and I do not care if you want to focus on the seed side of it, or the crop protection side of it. But everybody is kind of touting their portfolio and how it is best. Where do you think investors should be focusing the vast majority of their time into the second half? Where is the most optionality?

What should we be the most enthusiastic about? I would love to hear your perspectives on that in terms of the trajectory of the company for the next few years. Thank you.

Yes. It is a great question. And I will give you some thoughts today, but of course, this is going to be the entire focus of the Investor Day that we have planned for September 15, 2026 in New York, and both companies will lay out actually multiyear financial and strategic plans. So that is my plug for the morning—please dial in for that.

But let me just give you some thinking. So, look, I think from an overall perspective, Corteva, Inc. laid out the three-year plan. We are well on track—some could say even trending slightly better than that. And if you come down to why that is, there are really two big levers that we are pulling.

We are using our technology, and we are developing new technology and putting it into the hands of farmers—and let me unpack that in just a minute. And then I think we have been one of the first in our industry to really go after cost productivity with a very set of disciplined processes internally. That has created an awful lot of value. In the last three-year plan we put in place, there was $1 billion of cost, and we are trending a little ahead of that.

Beyond that, to answer your question, we would stack up our technology and our pipeline on both sides of the house to anybody in the industry. In fact, I would say in many ways we are leading. If you look at new Corteva, the crop protection business, we have talked about the size of the portfolio, and in the next decade, we are going to have something like seven new active ingredients, plus a whole host of new biologicals. In fact, we are going to roll out our first biocontrol, which would be one of the first in the industry with the efficacy that we think we have.

There is a lot of excitement there. We made the investment a few years ago in biologicals, and today, our CP business would be one of the leaders there. The separation, I think, is going to open more doors for the crop protection business, but I would say that our portfolio is extremely strong in CP. On the other side of the house, when it comes to now Vylor—so no more SpinCo, which I think is one of my favorite things of this call today—you think how we are going to grow the seed business in the future.

It is going to come down from out-licensing, and this is the first year that we are going to be royalty positive—and that is new information for this morning. We were thinking we would be royalty neutral, but with the Bayer agreement that we signed back in February, we are seeing very strong demand for our corn and soybean technology. We said last quarter that that would be about $1 billion incremental revenue over the next decade or so—pretty sizable growth from licensing our bread and butter, which is corn and soybeans. On top of that, you have got the hybrid wheat program—another $1 billion opportunity.

It may be a little longer term, but a $1 billion opportunity nevertheless, with our own proprietary sterility system, and we are going to take that technology globally. Beyond that, the gene editing and biotech capabilities that we have today—especially gene editing capabilities—we feel we can go beyond corn and soybeans and potentially wheat to other row crops and even potentially beyond that. That is the information that we are going to share in September and our longer-term growth strategy. But even the core growth we just said—if you start thinking about what that looks like from a growth perspective, I think Vylor is a classic growth compounder when you look at its margins, its conversion to free cash flow, and its top and bottom line growth.

Your next question comes from the line of Vincent Stephen Andrews with Morgan Stanley. Please go ahead. Vincent, a reminder to please unmute yourself locally. Sorry. I have not done that in a while.

Thank you, and good morning, everyone. Chuck, in the press release, you talked about, or you kind of teased us with, the idea that the S&D environment in crop chemicals is starting to improve with some developments out of China. So I am wondering if you could speak to that and when you think that might manifest itself in your results. It does not seem like you are putting anything into the back half of the year for it.

Yes. Good morning, Vincent. We all know where we are in the global CP industry cycle. If you think about 2025, that was the first year we were actually flat, and we sort of celebrated that we saw a flat market because the prior two years, 2024 and 2023, were pretty tough in this industry.

In February, when we gave our annual guide, we said 2026 will be the first year in several that will see the industry return to growth—but do not get excited because it is going to be modest, and we said low single digits. We are still of that view. So the macro perspective for us has not changed. We think globally, the crop protection industry will grow slightly in 2026, but it is a lot better than where it has been.

What is driving our conviction on that? A couple things. With higher energy and oil pricing around the world, that is adding cost inflation to AI production in low-cost production jurisdictions around the world, namely India and China. We are seeing price increases for certain AIs.

We are also seeing a slight slowdown in China exports into Brazil. It is slight; I would not say you can call it a trend yet because the data is recent as of March, but it is a good data point. When we add it all up, for 2026 the impact is probably minimal, just to be candid, because Brazil has the inventories they are going to need for at least most of the year. But this could be a positive sign as we get late 2026 and as we enter 2027 first half.

Also, China put some export controls of EAT back on, which is causing about an 8% price increase for certain amounts of AI—another positive data point, Vincent.

Your next question comes from the line of Joel Jackson with BMO Capital Markets. Please go ahead.

Hi. Good morning. A couple of questions together. Can you just first talk about how much of earnings from Q4 got pushed into Q1?

And then I know you do not like, Chuck, to change your guidance in May for a year until the season is over for North America. But can you talk about the bridge for 2026 and what has changed versus a few months ago? FX seems a bit better, royalty is a bit better, energy cost a bit worse. Can you maybe just give us the high-level buckets of what is better and worse versus what you had a few months ago?

Yes, Joel, I will have David answer those questions, but you are right. In agriculture, we are still planting right now. There is not much difference between what we know in February and what we know at the end of the first quarter. So we usually do not adjust guidance.

We think about our business squarely first half, second half, and we will make the necessary adjustments after Q2. Overall, there are puts and takes. David will walk you through those, but overall, the year is shaping up to be a little better than we expected in February. David, over to you.

When you look at the amount that went into the first quarter, we had that in our original bridge. So versus our original assumptions, we are pretty much in line. Q1 was a very strong start. We did say that even though we look at our business in halves, we expect the first half to be up more than we had originally expected.

We had expected both halves would be fairly flat from a year-over-year percentage increase, around that 7% kind of number, but right now we expect the first half to be a little bit stronger than that. For the bridge items, you laid them out well. Currency is likely to be a little bit favorable. Our royalty journey is probably going to be a little more favorable than our original assessment.

But there are things like the Iran conflict adding to inflation, mainly in the back half of the year. We have sized that up as a negative $40 million kind of number right now. Tariffs are expected to be slightly favorable. Add all that together, and these are pretty minor puts and takes when you think of a $4-plus billion outlook number.

Again, we will look at these items, and also things like our interest expense and tax rates, because I do feel like we are a little bit favorable, probably on the lower end, on our tax rate assumptions also.

Your next question comes from the line of David L. Begleiter with Deutsche Bank. Please go ahead.

Thank you. Good morning. Chuck, I know you mentioned input costs would not impact U.S. farmers this year. But looking to next year, do you expect any impact on farmer behavior and buying decisions given what we have seen on the cost side? Thank you.

Good morning, David. Starting with what we have seen this year, if you look at the futures pricing, the market right now is calling for a bit more corn area to be planted, and our order book would reflect elements of that. As we said in the prepared remarks, the majority of U.S. farmers already had fertilizer for the season, so we do not anticipate that higher energy prices today have or will impact U.S. planting decisions. Higher fuel pricing on the farm is stressing farmers in the U.S. and around the world as well.

We are watching this for the second half in Latin America. If higher energy prices persist, it could impact not only the amount of area planted but also what is planted in Brazil specifically. Our second half forecast is around flat area for safrinha, and this is an uncertainty we are monitoring. Looking forward into the U.S. second half of the year and into 2027, there are a lot of puts and takes.

One thing we are quite confident in for the U.S. is that you are going to see 180 million acres planted of corn and soybeans. The mix will be determined by energy prices, fertilizer availability and cost, as well as futures pricing. For this year, we are still very comfortable with 95 million acres of corn and around 85 million acres of soybeans being planted—that is directionally what we are thinking about for this spring.

Your next question comes from the line of Kevin William McCarthy with Vertical Research Partners. Please go ahead.

Thank you, and good morning. Chuck, was wondering if you might walk us through some of the next mileposts that you are most focused on in terms of the pending separation. Nice to see the new name, Vylor, and the new management as well. Sounds like a Form 10 is coming over the next month or two.

But more interest on the operational side—maybe you can elaborate on what you are able to do, if anything, to attack the dis-synergies pre-spin versus post-spin, and other mileposts that you need to pass prior to the Capital Markets Day?

Good morning, Kevin. I will start, and then David can add some details. Bottom line, there have been no surprises so far in the separation process. Lots of moving parts—we have literally hundreds of people doing two jobs right now, separating and taking care of their customers.

We are on track for Q4 and that still feels very good. As David mentioned, the net dis-synergies are trending a little better than the $100 million, and we have $50 million built into the guide. We had some important milestones in Q1—we announced Luke as the new Corteva, Inc. CEO, which we are delighted about; we named the two executive leadership teams; we filed the initial Form 10; and we now have a name for the seed and genetics company, Vylor.

We still have some headquarter decisions to make—where we are going to base our operations—so that will be in the second quarter. We will have the public filing in the second quarter as well. In the second half of the year, we will announce the board of directors for both companies, finalize the capital structure, and then September 15, 2026 will be the highlight where both companies will introduce the management teams and the strategic and financial plans. David, what did I miss?

You hit just about everything, Chuck, but I will give a little more color on the net dis-synergies. When we first came out, we said about $100 million. Break it into two major categories: there is an outside spend component—think IT costs, corporate costs, external public company costs—and those are trending where we expected and will be dis-synergies, or just more cost whenever you separate the businesses. Then the other side is organizational structure.

A lot of the heavy lifting recently, other than IT, was getting our org structures appropriate for both businesses. We have talked before that the new Corteva, Inc. business is basically operated as a global functional business, and Vylor will be more of a regional business. As we have unwound that, we have implemented a restructuring program of about $80 million that we took in Q1. That is to get these two org structures appropriate for both businesses. Add that up, and that is probably where we are a little bit favorable versus our original estimates.

Splitting 22 thousand-plus people into two organizations is a lot of work, but that is where a lot of heavy lifting has been recently.

Your next question comes from the line of Jeffrey John Zekauskas with JPMorgan. Please go ahead.

Thanks very much. The first quarter was a little bit puzzling because corn volumes were up 7% and soybeans were down. But all things being equal, soybean acres should be up this year and corn acres down. So why was corn up and soy down?

And for Dave, I think you said you are going to contribute—there was no free cash flow slide—and I think you plan to contribute $1.5 billion to your pension plan, which comes out of cash flow from operations. So are you giving an adjusted number for free cash flow? And in the first quarter, you used I think $100 million more cash flow than you did last year. Can you break that up into pieces and explain it?

Thanks.

We will have Judd answer the corn-soy question and David can handle free cash flow. Go ahead, Judd.

Judd O’Connor: Thanks, Jeff, for the question. Maybe just touch on both. North America, in particular, is a first-half business versus a first-quarter business. That March 31/April 1 date—one week of deliveries—can make a big swing. We did have some volume of corn that came out of fourth quarter 2025, just because we did not get as much into fourth quarter 2025 as we had typically in prior years. Then on the soy volume side, we will just have to wait and see. From an order book standpoint, we are in a solid position. It is timing between first quarter and second quarter, and we will know more at the half. No red flags—crops are going in the ground well. We are a little bit ahead for both corn planting as well as soy planting. We feel like we have a very strong position from a corn share perspective, and soy acres we believe are going to be up, and we are going to be participating on our share of those acres. Let us get through planting and we will be able to give you the full story.

On free cash flow, we always said going into this year that free cash flow was going to be a little bit unusual because we would have some discrete elements regarding our capital allocation, mainly setting up the two structures going forward. In Q1, the roughly $700 million usage—by and large, the biggest impact was the Bayer agreement that we paid out in Q1. From an operational side—the most important side—the business itself is still right in that 40% to 50%, 45% at the midpoint, conversion rate. As we go forward, we will have elements of one-time separation costs we outlined—$350 million. We have the Bayer agreement.

We will have the $1.5 billion in pension, which is on a pretax basis; the tax savings on that is about $290 million.

Your next question comes from the line of Duffy Fischer from Goldman Sachs. Please go ahead.

Good morning, guys. I want to drill down on Latin America and the upcoming season. You are holding your expectation for corn acres flat, but nitrogen is what has really ripped in the last couple months, which makes soy more favorable, all else equal, relative to corn. So what is the logic in holding that?

And if you move a million acres from corn to soy in Latin America, what would that do to your P&L in Latin America? And as working capital has become—or bad debts have become—a bit of an issue in North America, how are you thinking about that for Latin America? How much working capital are you willing to put out this year relative to last year?

Judd O’Connor: I will take the first couple pieces and then David can touch on the bad debt question. From a safrinha perspective, it is a bit different in Latin America, particularly Brazil, than it is in North America. North America is corn acre or soy acre. In Latin America, the safrinha acre goes after the soy acre in the timing of that crop—it is a double crop system. When we say we are flat with safrinha, that reflects we have continued to expand that second corn crop following soybeans for the last eight to 10 years in a row. This year, with fertilizer prices, we are looking at a flat year—not actually expanding the area. From an acreage planted standpoint, it is a bit of a blue ocean: we are still with safrinha corn on a fraction of the soy acres. On the soy-corn shift P&L impact, I do not have the Latin American number, but it would be materially less than the North American rule of thumb. A million-acre shift in Latin America would be much less impactful than in North America.

When we look at what we are offering in Latin America regarding credit terms, given interest rates, that is where we rely on our barter program, which we believe is number one in the industry and growing. For Seed, we still get some prepayments of cash going into the season. For CP, where we increase credit offerings, we are very strategic—customer by customer. We talked about a little bit more bad debt this quarter.

SG&A was up roughly $100 million in Q1, and about 25% of that was bad debt. As we sit here today, our past due as a percentage of sales is very much in line, if not a little bit favorable, to where we were at this point last year. We balance risk and opportunities by customer in close coordination between commercial and treasury teams.

Your next question comes from the line of Joshua Spector with UBS. Please go ahead.

Good morning. This is, Lucas Stone on for Josh. Just wanted to go back to the crop chem volume acceleration in the second half that you are expecting. You are looking for volumes to move up from low single digits in the first half to high single digits as we get into the second half of the year.

Could you give a bit more detail on where you see that coming from product-wise and regionally? And how would you compare your growth there to what you are expecting for the market in the second half? Thanks.

I will jump in on that one. When we talk about the second half and the volume increase we think we will see as compared to the first half or first quarter, it is primarily Latin America-driven. More acres are going into production again this year. As Judd talked about, safrinha could be flat, but those acres will get planted into a crop and that still takes crop protection.

Our biologicals in that area continue to grow—we have key products like Utrisha and BlueN, a nitrogen generator for plants. Given fertilizer pricing—especially ammonia and urea—this is an alternative, and we are seeing double-digit growth. Add to that the growth we saw in first quarter of Spinosyns due to increased pest pressure, and the overall demand from more land and the tropical climate with resistance continuing to grow. That is really what is driving us in the second half to get to high single-digit growth for crop protection.

Your next question comes from the line of Analyst with Oppenheimer. Please go ahead.

A little bit different tack on what is going on in the Middle East and how that influences your business. Chuck, you noted the forward curve calling for more corn acres. We have had a significant shift in the global biofuels backdrop not just in the U.S., but Brazil, Argentina, Indonesia, as a factor for mitigating energy cost inflation. Can you talk about how you are thinking about this impact on your business?

Are you seeing incremental interest in the new production system platform and winter canola? How is the biofuels backdrop changing how you are thinking about exiting 2026 into 2027? Thank you.

Thank you for the question. We are very excited about the momentum gaining around the world on biofuels—both traditional and next gen. It is a little too early to call it a structural change yet, but this year we expect another record demand year for biofuels globally. Last year was also a record, and we think we will see even more demand if energy prices stay elevated globally.

Around the world: Brazil is moving to E32 and will consume more of its domestic corn crop than ever—structurally great for farming in Brazil and helps with energy cost. Southeast Asia has lofty goals to be a leader in next-generation aviation fuel; if they hit their goal, that will drive a lot of crop demand. In the U.S., I think we are close to an E15 year-round mandate. We still need to get that across the line, but it makes strategic and economic sense and certainly would help farming.

Our view is E15 could consume up to another 15% of the U.S. corn crop, which would be very good for U.S. farmers. There is a lot to like, and we think we will see continued growth. On our program, we have one of the leading biofuel crop development programs with multiple partners around the world. Judd?

Judd O’Connor: Thanks, Chuck. Near term, in the South of the U.S., we are getting ready to harvest roughly 100,000 acres of crop that went in last fall focused with Bunge and Chevron on sustainable aviation fuel. The crop looks good agronomically. Yields look favorable and farmers are going to be profitable. Our retention rate with farmers in this new cropping system has been over 90%—if a farmer tries it once, they have built it into their program. We are excited about that. We are going to expand to somewhere north of 400,000 acres next year—material growth over the last three years as we have proven out the concept. Also note our 50/50 JV with BP in Latin America—mustard crops in Latin America—and we are looking at a number of other crops as well: winter canola and sunflower. We are just getting started. We will have crop that starts to go in the ground in 2027 in a more material way, and we will keep you informed. We are very excited about our internal platform around biofuels and what the next five to 10 years can look like.

Your next question comes from the line of Benjamin Theurer with Barclays. Please go ahead.

Yes, good morning. Thanks for taking my questions. Just wanted to follow up on separation. You have talked about the capital structure for the two new businesses.

What are the considerations you are putting into place as it relates to the level of capitalization or leverage between the crop protection versus the new seed company? How should we think about the capital split and your ability to engage in scaling the business in seed, but also on the CP side? What is your current target?

Right now, publicly, we have addressed that we would like both companies to have investment grade metrics from a credit standpoint. We are in pretty good shape to hit those targets given the strength of the overall Corteva, Inc. balance sheet. When the board does final approval toward the split date, major considerations will be where the liabilities sit—liabilities will stay with the company that they are in today. One element we addressed today was that the pension will be staying with new Corteva, Inc., and we are able to put a $1.5 billion discretionary payment in to ensure funding levels make sense.

Beyond that, it is really cash levels and financial debt levels of the two. Both will be set up not only for investment grade metrics, but also to be on the offensive with plenty of strategic opportunities they will be able to execute on.

Your next question comes from the line of Laurence Alexander with Jefferies. Please go ahead.

Hey. Good morning. This is Kevin Astok on for Lawrence. Back to the spin-off: you called out $100 million in dis-synergies. Can you walk through what remains to be absorbed post-spin? And related, how will these companies’ eventual standalone margin profiles compare to today?

The fortunate situation for us going into the spin is that the way we have been segment reporting will be the way the businesses will be portrayed going forward. The only other adjustments will be how corporate costs are allocated between the two different businesses. Then two other elements: one being net dis-synergies and which business they go on—we are working very hard to reduce that as much as possible. The final element is whether there are any agreements with any shifts between the two businesses.

As we sit here today, there are not any material shifts between the two businesses when it comes to ongoing offerings. It really will come down to the split of the corporate cost and where we land on dis-synergies between the two. Margin profiles are not going to change post split relative to how you see the segments today.

Your next question comes from the line of Arun Viswanathan from RBC Capital Markets. Please go ahead.

Great. Thanks for taking my question. Maybe I can get your thoughts on the competitive environment in seed. Your main competitor has been potentially a little strapped in the last few years, but they do have some new products coming out over the next few years.

Do you view that as a competitive threat that reemerges, or do you feel like the pipeline at Corteva, Inc.—maybe discuss some of the pipeline projects you have that would offset that. You have talked about short-stature corn in the past and wheat as well, but anything else you would highlight? Thanks.

Judd O’Connor: Thanks for the question. I will walk through our internal view for the next five-year window and then the competitive environment. There are a lot of good competitors in the market—we are competing with them at the farm gate each and every day. It all starts with germplasm. Our corn germplasm is as good as I have seen it in my 27–28 years with the company and continues to improve. The rate of genetic gain our R&D team is bringing is tremendous. The funnel and diversity of germplasm to fill all of our brands and licensing is fantastic. Our Z-series soybeans have been the best class of soybean we have brought to market and continue to improve. We have settled in around 65%+ Enlist penetration from a market perspective. There are going to be some new competitive entrants in that space. Germplasm is where it starts. The herbicide platform is important, but others are catching up to where we have been with Enlist, and we will compete accordingly. When we brought Enlist into the market, we had material market share gains, but it was not a flip of the switch. When Dicamba came to market and until they got their most recent label back, there was not a big switch. It is a lot about germplasm and yield—and it will continue to be. We have next-gen aboveground coming in 2030 in North America, next-gen aboveground coming in 2030 in Latin America. In 2030–2031, we will have above and below ground—brand new, novel mode of action, fully proprietary traits for Vylor. I feel as good as I have ever felt about our product portfolio. Our competitors will not stop; they will continue to work at it as well, but we have had a really good five-year run, and I see the next five years being very similar. We have a lot of things going in the right direction for us.

Your final question comes from the line of Patrick David Cunningham with Citi. Please go ahead.

Hi. Good morning. Your differentiated mix—patented products within CP—sits at roughly 65%. What is the target percentage for this mix by the end of the decade? And what are the most meaningful patent cliffs we should be mindful of?

Good observation. We are running about two-thirds, a little bit north of two-thirds today, on a portfolio being differentiated. As you look at our pipeline and how we will continue to evolve, our new products are going to be pushing $2 billion in revenue this year and continuing to grow. We like what we have there.

Rinskor and Rinskor-based solutions and RLEXs are still not at their peak and are going to continue; they will outpace Enlist once they get to their peak revenue. We have more coming—as Chuck talked about—at least seven actives that will hit the market over the next decade. By the end of this decade, Aviso will come out—this is going to be a blockbuster in Latin America for Asian soybean rust. We have biologicals coming as well.

We expect the differentiated mix will continue to grow—slightly increasing from where it is today as we approach the end of the decade. Adding biologicals gives us a whole lot of strength in our value proposition at the farm gate.

We have reached the end of the Q&A session. I will now pass the call back to Kimberly Booth for closing remarks.

Thanks for joining the call and for your interest in Corteva, Inc., and we hope you have a safe and wonderful day.

This concludes today's call. Thank you for attending. You may now disconnect.