Breaking Down The Mosaic Company (MOS) Financial Health: Key Insights for Investors

You're looking at The Mosaic Company (MOS) and seeing a classic mixed signal: strong operational execution clashing with a challenging top-line environment, so you need to know which story wins. The company just reported a Q3 2025 net income of $411 million and an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $806 million, an 80% jump year-over-year, which is defintely a sign of asset health improving. But here's the quick math: net sales of $3.5 billion missed analyst expectations, and the company burned through $135 million in free cash flow, mostly due to a working capital build. Still, the underlying business is showing muscle, with their Mosaic Fertilizantes segment's operating income up 71% and potash production trending toward a record level for 2025. This is a story of a company fixing its engine while navigating a choppy sea of commodity price volatility and demand deferrals, and we'll break down whether the operational gains justify the current stock price near $24.52.

Revenue Analysis

You need to know where The Mosaic Company (MOS) is making its money right now, because the mix is shifting, and that points to where the near-term opportunities lie. The direct takeaway is that while the Potash and Phosphate segments are the core products, the Mosaic Fertilizantes segment, which focuses on the high-growth Brazilian market, is the primary engine of revenue growth and margin expansion in 2025.

For the third quarter of 2025 (Q3 2025), The Mosaic Company delivered consolidated revenues of $3.45 billion, which represents a strong year-over-year increase of 22.8%. That's a significant rebound from the revenue declines seen in 2024, showing the company is successfully capitalizing on the constructive agricultural and fertilizer market trends. Here's the quick math on the segment contribution:

The primary revenue sources are clearly the sales of concentrated phosphate and potash crop nutrients, but the regional distribution-specifically Brazil-is what's driving the outperformance. The three segments don't just sell products; they also offer services and blended products, especially through Mosaic Fertilizantes, which is a key differentiator in the South American market.

The Brazil Growth Engine and Core Product Strength

The most defintely significant change in the revenue profile is the explosive growth in the Mosaic Fertilizantes segment. In Q3 2025, this segment's adjusted EBITDA surged by a massive 190% compared to the prior year quarter, with operating income up 71%. This performance highlights the strategic advantage of Mosaic's unparalleled global market access, particularly in Brazil, where they expect sales volumes to grow meaningfully in 2025, with Q1 sales volumes already up 15% year-over-year.

The core product segments are also showing strength and operational recovery. Potash is benefiting from strong global demand, pushing prices higher and driving production volumes toward a record level for the full year 2025. In the Phosphate segment, production volumes hit 1.7 million tonnes in Q3 2025, marking the third consecutive quarter of improvement as asset health restoration efforts pay off. This focus on operational efficiency is crucial, and it's why management is also simplifying the portfolio by completing strategic asset sales in Brazil, like the Patos de Minas and Taquari transactions, which generated $63 million in immediate aggregate proceeds. You can see the long-term thinking behind this in their Mission Statement, Vision, & Core Values of The Mosaic Company (MOS).

• Potash production is trending toward a 2025 record.
• Phosphate volumes are steadily improving after maintenance.
• Brazil market is the key to margin expansion.

The near-term risk here is the ongoing credit issues in Brazilian agriculture, which the Mosaic Fertilizantes business is navigating, but the segment's strong results show resilience against those headwinds.

Profitability Metrics

When we look at The Mosaic Company (MOS), the profitability picture in 2025 is one of margin recovery and operational strength, especially when benchmarked against the broader agriculture industry. You're seeing the benefits of stabilizing fertilizer prices and deliberate cost management flow directly to the bottom line.

For the first quarter of 2025 (Q1 2025), The Mosaic Company reported consolidated net sales of $2.621 billion. This translated into a significant rebound in key profitability ratios, a clear signal that the company is effectively navigating the volatile input cost environment.

Here's the quick math: the Q1 2025 Gross Margin of 19% is still a bit below the industry median of 22.47%, but the real story is the operational efficiency. The company's Operating Profit Margin of about 12.9% significantly outperforms the fertilizer industry's trailing twelve-month average of 9.62%. That spread-the difference between the gross and operating margins-tells you The Mosaic Company is defintely doing a better job controlling selling, general, and administrative (SG&A) expenses than many of its peers.

The trend over time is strongly positive. The Q1 2025 Gross Margin of 19% improved sharply from 15% in the first quarter of 2024. More impressively, Q1 2025 operating earnings of $339 million almost doubled from the $173 million reported a year earlier. This isn't just a pricing tailwind; it's a structural improvement driven by better cost management and strong segment performance.

Operational efficiency is a major theme. The Mosaic Company has not only achieved its initial cost reduction program but has also expanded it to a target of $250 million. This focus is paying off, particularly in the Mosaic Fertilizantes segment (Brazil market focus), where operating earnings grew by 133% year-over-year in Q1 2025. Looking ahead, the positive momentum continued, with net income hitting $411 million in both Q2 2025 and Q3 2025. You can see the earnings power is recovering quickly. For a deeper look at who is betting on this recovery, check out Exploring The Mosaic Company (MOS) Investor Profile: Who's Buying and Why?

• Gross Margin: 19% in Q1 2025, up from 15% in Q1 2024.
• Operating Earnings: Nearly doubled year-over-year in Q1 2025.
• Cost Management: Program target expanded to $250 million.
• Segment Strength: Mosaic Fertilizantes operating earnings grew 133% year-over-year.

Debt vs. Equity Structure

The Mosaic Company (MOS) maintains a conservative and well-structured balance sheet, leaning heavily on equity financing, which is a sign of financial stability. Your key takeaway is that their debt load is manageable and strategically deployed, evidenced by a mid-2025 Debt-to-Equity (D/E) ratio of just 0.37. This low leverage gives the company significant flexibility to navigate the cyclical nature of the fertilizer market.

As of the second quarter of 2025, The Mosaic Company's total debt stood at approximately $4.63 billion. This figure breaks down into a smaller portion of near-term obligations and a larger, more structured long-term component. Specifically, the breakdown of debt and equity for the period ending June 2025 was:

• Short-Term Debt & Capital Lease Obligation: $1.12 billion
• Long-Term Debt & Capital Lease Obligation: $3.51 billion
• Total Stockholders' Equity: $12.44 billion

Here's the quick math: with over $12.4 billion in total equity, the company is funding roughly three-quarters of its assets with shareholder capital, not borrowed money.

Leverage Compared to the Industry

A Debt-to-Equity ratio of 0.37 is defintely on the lower end for the Basic Materials sector, which includes agricultural chemicals. This indicates a preference for equity funding (retained earnings and shareholder capital) over debt financing (borrowing). To be fair, a low D/E ratio isn't always best-sometimes, cheap debt can boost returns-but in a commodity business, low financial leverage is a major risk mitigator.

Look at how The Mosaic Company stacks up against key competitors in the agriculture industry:

The Mosaic Company's ratio is comparable to Albemarle Corp. but significantly lower than CF Industries Holdings, Inc., showing a deliberate choice to keep financial leverage (the use of borrowed money to increase potential returns) below many peers. This conservative approach supports the company's Mission Statement, Vision, & Core Values of The Mosaic Company (MOS).

Recent Capital Market Activity

The company is still active in managing its debt profile. Just recently, on November 13, 2025, The Mosaic Company completed a public offering of $900 million in senior unsecured notes. This was a strategic move to lock in fixed financing costs and manage upcoming maturities.

• $500 million of 4.350% notes due January 2029
• $400 million of 4.600% notes due November 2030

The net proceeds from this issuance are earmarked for general corporate purposes, including the repayment of existing indebtedness. The CFO has been clear that these metrics continue to support their investment grade credit rating, which is crucial for keeping their cost of debt low. This is how they balance: they use debt strategically to manage liquidity and smooth out maturity schedules, but they rely on their large equity base for core funding, keeping the overall risk profile low.

Liquidity and Solvency

You're looking at The Mosaic Company (MOS) and asking the right question: can they cover their short-term bills while funding their big operational shift? The direct takeaway is that their liquidity position is tight but manageable, driven by a strategic, near-term drag on cash flow. The balance sheet shows sufficient current assets, but the quality of those assets-specifically the inventory buildup-is what you need to focus on.

The company's ability to meet its immediate obligations is measured by the Current Ratio (Current Assets / Current Liabilities) and the Quick Ratio (Acid-Test Ratio). As of the third quarter of 2025, The Mosaic Company's Current Ratio stood at a modest 1.14 ($\mathbf{\$5,076}$ million in current assets divided by $\mathbf{\$4,450}$ million in current liabilities). This is above the critical 1.0 mark, meaning current assets technically cover current liabilities, but it's not a wide safety margin.

Here's the quick math on their immediate cash position:

• Current Ratio: $\mathbf{1.14}$ (Adequate, but not strong)
• Quick Ratio: $\mathbf{0.40}$ (Tight, indicating reliance on inventory sales)

The Quick Ratio, which strips out inventory-a less liquid asset-falls to a tight $\mathbf{0.40}$ ($\mathbf{\$1,797}$ million in quick assets divided by $\mathbf{\$4,450}$ million in current liabilities). This low number is a flag. It tells you that if sales slow down, The Mosaic Company is defintely relying heavily on turning their $\mathbf{\$3,279}$ million inventory into cash to pay their short-term debts.

Working Capital and Inventory Trends

The Working Capital (Current Assets minus Current Liabilities) for the quarter was $\mathbf{\$626}$ million, but the trend is the key story. In Q3 2025, the company saw a spike in working capital that management explicitly called out as a cash flow shock. They tied up over $\mathbf{\$400}$ million in working capital, largely due to a strategic increase in product inventories to support the ramp-up of their phosphate production assets.

This inventory build is a double-edged sword. It's a positive sign of anticipated higher production rates and future sales volume, but it's a near-term cash drain. Investors are betting that this inventory will be sold at good margins in 2026, reversing the cash flow pressure. If demand or pricing falters, that inventory becomes a significant liquidity risk.

Cash Flow Statements Overview

The cash flow statement confirms the liquidity pressure. Despite a strong operational quarter with Adjusted EBITDA of $\mathbf{\$806}$ million, the company's Free Cash Flow (FCF) was negative $\mathbf{\$135.9}$ million in Q3 2025. This is the number that rattled the market, and it's a classic disconnect between accounting profit and actual cash generation.

The cash flow breakdown for Q3 2025 shows exactly where the money went:

Cash Flow from Operations (OCF) was $\mathbf{\$229}$ million, a reduction from the prior year, directly attributed to the higher working capital and inventory. The large capital expenditures (CapEx) for asset maintenance and production improvements, implied at around $\mathbf{\$365}$ million for the quarter, pushed the FCF into negative territory. The $\mathbf{\$63}$ million from the Patos de Minas and Taquari asset sales provided a small, positive offset in investing/financing activities.

Potential Liquidity Concerns and Strengths

The primary concern is the low Quick Ratio and the negative FCF, which signals a reliance on future inventory sales and external funding to cover current investment needs. The major strength, however, is the clear strategic intent behind the cash drain: they are investing heavily in their core assets to drive higher, more efficient production in 2026.

The company is not facing an immediate crisis, but they have traded short-term cash flow for long-term operational leverage. The risk is an execution risk: if the phosphate production ramp-up is delayed, or if fertilizer prices drop unexpectedly, the inventory build becomes a liability, not an asset. The next step for you is to monitor the Q4 2025 inventory turnover and management's 2026 cash flow guidance closely.

Valuation Analysis

You're looking at The Mosaic Company (MOS) and asking the core question: is it a bargain or a value trap? Right now, the valuation metrics suggest the market views it as significantly undervalued, especially when you look at its earnings power, but the stock price trend tells a story of caution. The disconnect between a low Price-to-Earnings (P/E) multiple and a declining stock price is the main signal here.

Is The Mosaic Company (MOS) Overvalued or Undervalued?

Based on a snapshot of its 2025 fiscal year data, The Mosaic Company (MOS) appears to be undervalued compared to the broader market and historical norms for a cyclical basic materials company. Its valuation multiples are incredibly low, but this is a classic sign of market skepticism about the sustainability of its current earnings.

Here's the quick math on the key valuation ratios as of November 2025:

• Price-to-Earnings (P/E) Ratio: The trailing P/E is around 6.74x, with a forward P/E of approximately 8.62x. This is extremely low, signaling that for every dollar of earnings, you are paying less than seven dollars for the stock.
• Price-to-Book (P/B) Ratio: The P/B ratio sits at about 1.09x. This means the stock is trading barely above its net asset value, which is defintely cheap.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio, which accounts for debt, is also low at around 5.65x (Trailing Twelve Months). For context, many stable industrial companies trade closer to 10x or higher.

The low multiples suggest the market is pricing in a sharp decline in future earnings, a common issue for commodity producers. For a deeper dive into the company's long-term strategy, check out its Mission Statement, Vision, & Core Values of The Mosaic Company (MOS).

Stock Price and Analyst Sentiment

The stock price action over the last 12 months reflects the market's skepticism. While the 52-week high was $38.23, the stock has been trading in the $24.52 to $26.05 range in mid-November 2025. The market capitalization has actually decreased by 8.72% over the past year, which shows a clear downtrend despite the strong underlying P/E ratio. Honestly, the price trend is a near-term risk.

The analyst community is split, but the consensus leans positive, still with a lot of recent caution. Out of 14 analysts, the consensus rating is a 'Buy' or 'Hold,' with an average price target of roughly $34.93. That suggests a significant upside from the current price, but to be fair, the low-end target is only $26.00, indicating some analysts see little to no near-term appreciation.

Here is a summary of the current analyst view and the price range:

Dividend Health and Payout

The dividend picture is solid, which is a key factor for value investors. The Mosaic Company (MOS) maintains an annual dividend of approximately $0.87 to $0.88 per share, resulting in a dividend yield of about 3.38%. More importantly, the dividend payout ratio is a sustainable 22.5% of earnings. This low payout ratio gives the company a lot of room to maintain or even grow the dividend, even if earnings temporarily dip, which is a good sign for capital allocation.

Actionable Insight: The low multiples scream 'undervalued,' but the stock price decline and analyst caution on the low end suggest you should treat this as a deep value play, not a growth story. Your clear action is to model a sensitivity analysis on their 2026 free cash flow (FCF) using a lower-than-forecasted phosphate price to stress-test the current valuation.

Risk Factors

You're looking for the clear-cut risks facing The Mosaic Company (MOS) right now, not just vague industry worries. The direct takeaway is that while commodity fundamentals are strong, operational execution and volatility in key international markets-especially Brazil-are the primary near-term threats to 2025's full-year guidance. We need to watch asset health and credit risk.

The biggest internal risk for The Mosaic Company has been operational stability, specifically in the Phosphate segment. We saw this play out in the third quarter of 2025 with unexpected mechanical issues at the Riverview sulfuric acid plant and utility interruptions at Bartow in mid-September, causing a meaningful dip in overall production. To be fair, this followed delays in asset health restoration activities discussed in the Q2 earnings call. The company is working to fix this, but until operating rates are sustainably higher, production risk remains elevated.

Here's the quick math on production risk: The full year 2025 Phosphate production volume guidance was revised down in June to 7.0-7.3 million tonnes from the earlier 7.2-7.6 million tonnes range, a clear sign of the operational drag. Still, Potash production volumes are trending towards a record level in 2025, which helps offset some of the Phosphate weakness. This is a tale of two segments.

Externally, the risks are concentrated in market volatility and international exposure. The company's global footprint, while a strategic advantage, exposes it to significant political and economic instability, plus changes in government policies in countries where they operate. Also, the predictability of raw material costs is a constant headache; sulfur prices, for instance, have remained firm and elevated longer than anticipated, which pressures cash conversion costs.

• Market Volatility: Prices for raw materials like sulfur remain high.
• Credit Risk: Ongoing credit issues in Brazilian agriculture.
• Policy Changes: Instability in international operating countries.

The most concrete financial risk is tied to the Brazilian market, where the Mosaic Fertilizantes segment operates. Management noted they are navigating ongoing credit issues in Brazilian agriculture, which impacts sales volume and cash flow from operations. For the third quarter of 2025, Cash flow from operations was $229 million, down from $313 million in the same quarter last year, driven primarily by higher working capital due to the timing of shipments and higher volumes of product inventories in Brazil. This is a classic working capital crunch driven by market conditions.

The Mosaic Company is defintely not sitting still, though. Their mitigation strategy centers on two things: operational fixes and portfolio optimization. In Phosphates, they completed the elevated turnaround and asset restoration work in early August, which helped production volumes hit 1.7 million tonnes in Q3 2025, marking the third consecutive quarter of improvement. Plus, they are actively optimizing their portfolio, completing the sale of the Patos de Minas mine for $111 million and the Taquari potash mine for $27 million in the fourth quarter to generate immediate aggregate proceeds of $63 million. This is smart capital allocation to fund growth and manage debt. For a deeper dive into the company's valuation, you can read more at Breaking Down The Mosaic Company (MOS) Financial Health: Key Insights for Investors.

Here is a quick look at the third quarter's financial performance, which shows the company is generating strong earnings despite these operational and market challenges:

Growth Opportunities

You're looking for a clear map of where The Mosaic Company (MOS) is headed, not just where it's been, and the near-term story is about operational execution and high-margin product mix. The company is actively shedding non-core assets and pouring capital into its most efficient operations and its specialty segment, which should drive a significant profit inflection in 2026.

The core growth drivers for The Mosaic Company are surprisingly simple: get the plants running at full capacity and sell more of the high-value stuff. That's the whole game.

• Maximize throughput at core assets.
• Scale the high-margin Biosciences unit.
• Capitalize on superior market access in Brazil.

Strategic Focus: Operational Efficiency and Portfolio Shaping

The Mosaic Company's near-term profitability hinges on normalizing its phosphate production. After substantial downtime and mechanical issues in 2024 and early 2025, the focus is on reliability. For example, the Bartow phosphate facility is now operating at its target rate, on track for an annual output exceeding 2 million tonnes. Plus, they are completing the 400,000 ton per year hydrofloat project at the Esterhazy potash complex, which is designed to increase production volumes and drive per-ton costs lower. This operational leverage is defintely the most critical factor for the next 12-18 months.

The company is also simplifying its structure, a smart move. They've been shedding non-core assets, including the sale of a Brazilian potash mine, which removes over $25 million in future capital expenditure (CapEx) needs. This strategic capital reallocation is key, especially with the 2025 CapEx expected to be between $1.2 billion and $1.3 billion.

High-Margin Product and Market Expansion

The most exciting growth engine is the high-margin Performance Products segment, particularly Mosaic Biosciences (biological solutions for crop performance). This business is on track to double its revenue for the full year 2025, targeting $70 million in revenue. This is a clear move into the regenerative agriculture space, a structural long-term growth trend. They recently launched the new product Neptunion in the China market, showing their commitment to product innovation and global reach.

Market expansion is centered on their dominant position in Latin America. The new Palmeirante facility in Brazil, inaugurated in 2025, adds 1 million tonnes of distribution capacity in the fast-growing northern region, reinforcing their industry-leading market access. You can read more about their long-term vision here: Mission Statement, Vision, & Core Values of The Mosaic Company (MOS).

Financial Projections and Competitive Edge

Despite some volatility, the overall outlook for 2025 is positive, underpinned by strong fertilizer demand and tight supply. The company reported a strong Q3 2025 with sales of $3.45 billion and net income of $411.4 million. Analysts project the fiscal year 2025 Earnings Per Share (EPS) to be around $2.20 per share.

The Mosaic Company's competitive advantage lies in its sheer scale and geographic reach, which allows it to move product where margins are best. Here's a snapshot of their operational guidance for the year, showing where they are focusing their production efforts:

The raised Potash guidance is a strong signal. The ability to run the world-class Esterhazy complex, which generates strong cash flow across the commodity cycle, is a huge structural advantage.

Next Step: Portfolio Managers should model the impact of the $70 million in annualized savings from the digital overhaul (expected by year-end 2025) on the 2026 earnings forecast.