Net sales for Q2 2025 increased by 6% in volume, contributing to a total 5.6% net sales increase to $6,456 million. Crop Protection volume grew primarily in Latin America due to demand for new products, while Seed volume growth was driven by increased corn area and market share gains in North America.

The Crop Protection Operations Strategy Restructuring Program, initiated in November 2023, is expected to generate an estimated $180 million in run-rate savings by 2027. This initiative aims to optimize the manufacturing and external partner network, with actions expected to be substantially complete by the end of 2026.

Research and development expense increased by 5.0% to $375 million for Q2 2025 compared to $357 million in Q2 2024, and by 3.0% to $710 million for the six months ended June 30, 2025. This reflects the company's commitment to investing in its seed research and development to drive future innovation.

Gross profit margin improved from 52.3% in Q2 2024 to 54.6% in Q2 2025, with gross profit increasing to $3,524 million from $3,194 million. This improvement is attributed to ongoing cost and productivity actions, Crop Protection raw material deflation, lower commodity prices, and a reduction in net royalty expense.

Through Q2 2025, the company recorded net pre-tax restructuring and asset-related charges of $566 million under the Crop Protection Operations Strategy Restructuring Program, with $116 million in cash payments made. Management expects these actions to be substantially complete by the end of 2026 and yield $180 million in annual run-rate savings by 2027.

EIDP management concluded that the material weakness identified in its internal control over financial reporting, related to the classification of intercompany transactions in cash flows, has been remediated as of June 30, 2025. This indicates effective management response to prior audit findings and improved financial reporting integrity for the subsidiary.

The company recorded a pre-tax loss of $72 million ($58 million after-tax) in Q2 2025 related to its estimated share of the NJ Statewide Settlement for PFAS liabilities. Additionally, the EPA issued CERCLA claims in November 2024, and numerous other lawsuits related to PFAS contamination are ongoing, indicating significant and potentially increasing financial exposure.

The filing highlights that recent funding and staff reductions at key U.S. government agencies (EPA, USDA, FDA, HHS) could significantly impact the timelines for reviewing regulatory submissions and re-registrations. This may extend the time to commercialize new products, potentially having a material adverse effect on business and intellectual property value.

Unfavorable currency impacts, primarily from the Brazilian Real and Canadian Dollar, partially offset net sales growth by 1% in Q2 2025 and 3% for the six months ended June 30, 2025. While the company uses hedging programs, net after-tax exchange gain (loss) attributable to Corteva was $(36) million for Q2 2025, indicating ongoing exposure and the challenge of fully mitigating these effects.

Seed net sales increased by 5% in Q2 2025, with volume growth attributed to increased corn area and market share gains in North America, and pricing increases due to demand for top technology and out-licensing income. This indicates a strong competitive position in the Seed segment, allowing for effective price execution.

Despite an 11% volume increase in Crop Protection sales in Q2 2025, pricing declined by 2%, primarily due to the competitive pricing environment in Latin America. This suggests that while demand for new products is strong, the company faces challenges in maintaining pricing power in certain key markets within this segment.

While the PTAB invalidated three patents related to AAD-1 herbicide resistance technology in December 2024, Corteva has appealed this decision and states it holds numerous additional patents covering its Enlist® traits. Management believes the IPR process is not expected to impact its ability to license and protect its core Enlist E3® traits.

Cost of goods sold for Q2 2025 increased only marginally to $2,932 million from $2,918 million in Q2 2024, despite higher sales volumes. This was achieved through ongoing cost and productivity actions, raw material deflation in Crop Protection, lower commodity prices, and a reduction in net royalty expense, leading to a significant expansion in gross margin.

The Crop Protection Operations Strategy Restructuring Program is progressing, with $116 million in cash payments made through Q2 2025 towards total anticipated charges of $330-$360 million. The program is expected to be substantially complete by the end of 2026 and is projected to deliver $180 million in annual run-rate cost and productivity improvements by 2027.

Amortization of intangibles decreased by 7.5% to $161 million for Q2 2025 from $174 million in Q2 2024. This reduction is attributed to certain Merger-related intangible assets becoming fully amortized, indicating a natural reduction in a fixed cost component over time.

Research and development expense increased by 5.0% to $375 million for Q2 2025 compared to $357 million in Q2 2024, and by 3.0% to $710 million for the six months ended June 30, 2025. This ongoing investment is crucial for developing new products and technologies, as evidenced by the demand for 'top technology' in the Seed segment and new products in Crop Protection.

While the Patent Trial and Appeal Board (PTAB) invalidated three patents related to AAD-1 herbicide resistance technology in December 2024, Corteva has appealed and asserts it holds numerous additional patents covering its Enlist® traits. Management believes the IPR process is not expected to impact its ability to license and protect its core Enlist E3® traits.

Crop Protection volume increases were driven primarily by Latin America on demand for new products, including fungicides, spinosyns, and biologicals. This highlights the company's ability to successfully develop and commercialize innovative solutions that resonate with market needs, contributing to organic growth.

The Board authorized a common stock dividend of $0.18 per share payable in July 2025, representing a 5.9% increase from prior dividends. Additionally, the company repurchased $520 million of common stock during the six months ended June 30, 2025, under its $3 billion (2024) and $2 billion (2022) share repurchase programs, signaling confidence in future cash flows.

In May 2025, Corteva issued $500 million of 5.125% Senior Notes due May 2032, with proceeds used to repay $500 million senior notes maturing in July 2025. This proactive debt management ensures liquidity and maintains a stable capital structure, with total long-term debt decreasing to $1,687 million at June 30, 2025 from $1,953 million at December 31, 2024.

The increase in debt balances from December 31, 2024, to June 30, 2025, was primarily due to the May 2025 Senior Notes issuance and higher short-term debt, used to fund working capital needs, capital spending, dividend payments, and share repurchases. Capital expenditures for the six months ended June 30, 2025, were $(212) million, a decrease from $(262) million in the prior year, indicating efficient capital deployment.

The company recorded a pre-tax loss of $72 million ($58 million after-tax) in Q2 2025 related to its share of the NJ Statewide Settlement for PFAS liabilities. Additionally, an accrual was established for Corteva's estimated voluntary contribution of $37 million for the AltEn facility remediation plans. These actions reflect the company's ongoing efforts to address legacy environmental issues.

A settlement in principle was reached in June 2025 for the New York Baker Class Action (PFOA) for $22 million, plus annual funding for a medical monitoring fund. These settlements, along with the NJ Statewide Settlement, demonstrate the company's commitment to resolving historical environmental liabilities, although they incur significant costs.

The One Big Beautiful Bill Act (OBBBA), signed on July 4, 2025, is expected to have favorable impacts on the company's cash tax outflow for the second half of 2025 due to the reinstatement of expensing domestic research and development expenditures. This could indirectly support ESG initiatives by incentivizing R&D into more sustainable agricultural solutions.

Unfavorable currency impacts, primarily from the Brazilian Real and Canadian Dollar, partially offset net sales growth by 1% in Q2 2025 and 3% for the six months ended June 30, 2025. This highlights the ongoing challenge of managing foreign exchange volatility, particularly in key international markets.

The One Big Beautiful Bill Act (OBBBA) was signed into law in July 2025, changing federal tax law, and the EPA issued CERCLA claims related to PFAS in November 2024. These developments indicate an evolving and potentially more stringent regulatory landscape that the company must navigate, requiring ongoing evaluation of impacts.

The company experienced a 6% increase in sales volume for Q2 2025, driven by increased corn area and market share gains in North America for Seed products, and demand for new products (fungicides, spinosyns, biologicals) in Latin America for Crop Protection. This indicates a robust underlying market for agricultural inputs despite some regional pricing pressures.