American Vanguard 2025 Q3 Earnings Misses Targets but Narrows Losses by 52%

American Vanguard (AVD) reported its fiscal 2025 Q3 earnings on Nov 10, 2025, with total revenue rising 0.9% to $119.31 million. The company narrowed its net loss to $12.36 million, a 52% improvement year-over-year, and maintained its full-year 2025 adjusted EBITDA guidance of $40–$44 million. Despite missing revenue and net income estimates, management remains optimistic about Q4 performance and long-term growth prospects.

Revenue

U.S. crop sales surged 22% to $43.31 million, driven by strong herbicide and granular soil insecticide demand, while international revenue dipped 6% to $56.77 million due to strategic shifts in Brazil and adverse weather in Australia. The U.S. non-crop segment declined 14% to $19.23 million, impacted by product liability issues in the horticultural business.

Earnings/Net Income

The company narrowed its net loss to $12.36 million, or $0.43 per share, from $25.74 million, or $0.91 per share, in 2024 Q3. Adjusted EBITDA surged 350% to $8.2 million, reflecting improved gross margins and cost discipline. The EPS improvement, though still a loss, signals operational progress.

Post-Earnings Price Action Review

A 350% increase in adjusted EBITDA, coupled with improved gross profit margins and reduced operating expenses, underscores AVD’s operational strength. Despite missing earnings, the market anticipates Q4 cash flow improvements and a stock rebound, supported by inventory management and production efficiency. While historical data on this strategy is limited, AVD’s EBITDA trajectory and debt reduction efforts justify a 30-day holding period post-revenue beats. Risks remain, including inventory pressures and pricing challenges, but proactive initiatives mitigate these concerns.

CEO Commentary

CEO Douglas Kaye highlighted a 350% EBITDA surge, driven by cost cuts and operational restructuring, and a $6 million reduction in operating expenses year-to-date. He emphasized long-term cost savings from shifting production to Alabama and a $100 million growth pipeline from new crop protection products.

Guidance

The company reaffirmed 2025 adjusted EBITDA guidance of $40–$44 million and revised net sales to $520–$535 million, reflecting weaker international markets. Q4 free cash flow will prioritize debt reduction, with $5–$6 million in CapEx expected for 2025.

Additional News

1. Product Liability Charge: A $7.6 million charge for contaminated product claims, expected to be recouped from a third-party formulator, was included in adjusted EBITDA.

2. Name Change for Specialty Business: The non-crop segment will be rebranded as "Specialty" to reflect its advanced technologies in mosquito control and pest management.

3. Inventory Reduction: Total inventory dropped $47 million year-over-year, easing credit facility reliance and aligning with Q4 seasonal drawdowns.