CF Industries Delivers Strong Q3 2025 Earnings Amid Tight Nitrogen Markets and Robust Cash Generation

Executive Summary

CF Industries Holdings, Inc. delivered a solid operating and financial performance in the third quarter ended September 30, 2025, reflecting favorable nitrogen market fundamentals, disciplined cost management, and high asset utilization. Q3 2025 net earnings attributable to common shareholders rose to $353 million, or $2.19 per share, representing a 28% YoY increase, driven by higher selling prices and improved operating leverage despite maintenance-related production impacts.

For the first nine months of 2025, CF Industries generated adjusted EBITDA of $2.1 billion and net earnings of $1.05 billion, underpinned by a 97% ammonia utilization rate and tight global nitrogen supply-demand dynamics. The company maintained strong cash generation, with $2.2 billion in operating cash flow and free cash flow of $1.7 billion (TTM), enabling substantial shareholder returns of approximately $1.3 billion year-to-date through dividends and share repurchases.

CF Industries’ balance sheet remains resilient, with $1.8 billion in cash, manageable leverage, and ongoing investments in decarbonization and low-carbon ammonia projects positioning the company for long-term competitiveness amid evolving energy transition dynamics.

Financial Highlights – Statement of Operations ($’million)

$’million       Q3 2025       Q3 2024       YoY

Net Sales     1,659  1,370  +21%

Gross Profit  632     444     +42%

Operating Earnings         580     364     +59%

Earnings Before Tax         565     400     +41%

Net Earnings          460     341     +35%

Net Earnings to Common          353     276     +28%

Diluted EPS ($)       2.19    1.55    +41%

Dividend per Share ($)    0.50    0.50    –

Key Takeaway: Margin expansion and pricing strength more than offset higher interest expense and maintenance downtime.

Nine-Month Performance Snapshot (YTD)

Metric          9M 2025       9M 2024       YoY

Net Sales ($bn)      5.21    4.41    +18%

Operating Earnings ($bn)          1.68    1.31    +29%

Net Earnings to Common ($bn)          1.05    0.89    +18%

Diluted EPS ($)       6.39    4.86    +31%

Operational Performance and Market Drivers

1. Nitrogen Market Fundamentals

• Global nitrogen supply-demand balance remains tight, supporting pricing across ammonia, UAN, and urea.
• Natural gas availability constraints in regions such as Trinidad and geopolitical risks continue to limit supply expansion.
• CF’s North American asset base provides a structural cost advantage.

2. Asset Utilization and Production

• Ammonia utilization rate of 97% in the first nine months of 2025.
• Projected full-year gross ammonia production of ~10 million tons.
• Maintenance activities in Q3 modestly reduced output but did not materially impact earnings momentum.

3. Strategic Investments

• Continued optimization of the Waggaman ammonia facility, delivering an IRR exceeding 20%.
• Development of the Blue Point ultra-low emissions ammonia complex in Louisiana positions CF as a global leader in low-carbon ammonia.

Profitability and Margin Analysis

• Q3 Gross Margin: 38% (vs. 32% in Q3 2024), reflecting stronger pricing and operating leverage.
• Adjusted EBITDA (Q3): ~$670 million.
• Free Cash Flow Conversion: 65% of adjusted EBITDA (TTM), highlighting capital efficiency.

Cash Flow and Capital Allocation

Cash Flow Highlights (9M 2025)

• Operating Cash Flow: $2.2 billion
• Capital Expenditure: $724 million
• Free Cash Flow (TTM): $1.7 billion

Shareholder Returns

• Q3 2025: ~$445 million
• 9M 2025: ~$1.3 billion
• Completed 2022 share repurchase authorization, retiring 37.6 million shares (19%).

Balance Sheet Overview ($’million)                  

Metric                                                                 Sep 2025 Dec 2024

Total Assets                                                         14,203     13,466

Cash & Equivalents                                             1,838      1,614

Long-Term Debt                                                  2,974      2,971

Total Equity                                                         7,695      7,592

Interpretation: Strong liquidity, stable leverage, and ample capacity to fund capex, shareholder returns, and decarbonization projects.

Sustainability and Decarbonization

• 25% reduction in greenhouse gas emissions intensity versus original baseline.
• Blue Point project expected to be the world’s largest ultra-low emissions ammonia plant.
• Positions CF to benefit from energy transition demand while mitigating carbon border risks over the medium term.

Key Risks and Headwinds

Operational Risks

• Incident at the Yazoo City, Mississippi facility highlights safety and operational risks, though no injuries were reported.

Regulatory Risks

• Uncertainty around the EU Carbon Border Adjustment Mechanism (CBAM).
• Environmental compliance and permitting challenges for future expansions.

Market Risks

• Volatility in global natural gas prices.
• Geopolitical disruptions affecting feedstock supply and trade flows.

Strengths

• Industry-leading asset utilization and cost position.
• Strong free cash flow generation and capital discipline.
• Strategic leadership in low-carbon ammonia.
• Robust balance sheet with significant liquidity.

Weaknesses

• Exposure to global energy and fertilizer price volatility.
• Maintenance downtime can impact short-term production.
• Valuation discount versus peers despite strong fundamentals.

Outlook

CF Industries remains well-positioned to benefit from:

• Continued tight nitrogen markets.
• Growing demand for clean ammonia in agriculture and energy transition.
• Strong cash generation supporting dividends and buybacks.

2025 Capex Guidance: ~$575 million Liquidity at Q3 2025: >$1.8 billion cash on hand

Analyst View

“CF Industries delivered another resilient quarter, supported by favorable nitrogen pricing, high asset utilization, and disciplined capital allocation. With strong free cash flow, leadership in low-carbon ammonia, and a solid balance sheet, CF remains well-positioned to generate sustainable shareholder returns despite regulatory and operational risks.”

Conclusion

CF Industries’ Q3 2025 performance reinforces its status as a high-quality nitrogen producer with strong cash generation, disciplined execution, and a clear strategic pathway into low-carbon ammonia. While operational incidents and regulatory uncertainties warrant monitoring, the company’s financial strength, asset quality, and capital discipline support a constructive long-term investment case.

Part 2

CF Industries Reports Strong Q3 and 9M 2025 Earnings Amid Tight Nitrogen Markets and Robust Cash Generation

Executive Summary

CF Industries Holdings, Inc. delivered a solid operating and financial performance in Q3 and the first nine months of 2025, supported by firm global nitrogen fundamentals, strong ammonia utilization, and disciplined capital allocation.

For Q3 2025, net earnings attributable to common shareholders rose to $353 million ($2.19 per share), representing a 28% YoY increase, driven by higher realized pricing, improved operating leverage, and stable production performance despite planned maintenance activities. EBITDA for the quarter stood at $670 million, reflecting resilient margins in a volatile commodity environment.

For the first nine months of 2025, CF Industries generated net earnings of $1.05 billion ($6.39 per diluted share) and adjusted EBITDA of $2.1 billion, translating into strong free cash flow generation of approximately $1.7 billion (TTM) and a 65% free cash flow conversion rate. The company returned ~$1.3 billion to shareholders through dividends and share repurchases during the period.

CF Industries’ balance sheet remains robust, with cash and cash equivalents exceeding $1.8 billion at the end of Q3 2025, supporting ongoing shareholder returns, growth investments, and strategic decarbonization initiatives. The company continues to advance its long-term strategy centered on low-cost nitrogen production, disciplined capital allocation, and leadership in low-carbon ammonia, positioning it well for both cyclical recovery and structural energy transition demand.

Financial Highlights – Statement of Operations ($’million)

$’million       Q3 2025       Q3 2024       YoY    9M 2025       9M 2024          YoY

Net Sales     1,659  1,370  +21%  5,212  4,412  +18%

Gross Profit  632     444     +42%  1,959  1,532  +28%

Operating Earnings         580     364     +59%  1,683  1,305  +29%

Net Earnings (Common) 353     276     +28%  1,051  890     +18%

Diluted EPS ($)       2.19    1.55    +41%  6.39    4.86    +31%

EBITDA         670     ~550* —       —       —       —

Key Takeaways

• Strong YoY earnings growth driven by pricing, operational efficiency, and disciplined cost management.
• Margin expansion reflects CF’s structural cost advantage in North America.

Revenue and Earnings Performance

CF Industries recorded 21% YoY revenue growth in Q3 2025, driven by:

• Improved nitrogen pricing across ammonia, urea, and UAN.
• Stable demand from agricultural and industrial end-markets.
• Strong ammonia utilization of 97% (9M 2025).

Despite planned maintenance activities and an operational incident at the Yazoo City facility (with no injuries reported), production remained resilient, underscoring the robustness of CF’s asset base.

Business and Operational

1. Nitrogen Production – Core Earnings Engine

• Projected full-year 2025 gross ammonia production: ~10 million tons.
• Structural advantage: Access to low-cost North American natural gas continues to underpin margins.
• Tight global nitrogen supply remains supportive due to:
  • Geopolitical disruptions
  • European capacity rationalization
  • Natural gas availability challenges in Trinidad and parts of Europe

2. Low-Carbon & Blue Ammonia Strategy

CF Industries continues to strengthen its leadership in low-emissions ammonia:

• Achieved 25% reduction in GHG emissions intensity from baseline.
• Advancing the Blue Point complex (Louisiana), expected to be the world’s largest ultra-low emissions ammonia plant, backed by strong equity partners.
• Waggaman ammonia facility acquisition and expansion delivering IRR >20%, validating capital discipline.

This positions CF as a key supplier to future energy, shipping, and hydrogen economies, beyond traditional fertilizer demand.

Profitability and Cash Flow Analysis

Cash Flow Strength (Trailing 12 Months)

• Net cash from operations: ~$2.6 billion
• Free cash flow: ~$1.7 billion
• FCF / Adjusted EBITDA conversion: 65%

Capital Allocation Discipline

• Capital expenditures (2025E): ~$575 million (well covered by operating cash flow).
• Shareholder returns:
  • Q3 2025: ~$445 million
  • 9M 2025: ~$1.3 billion
• Completed prior share repurchase authorization, retiring 37.6 million shares (~19% of shares outstanding at inception).

Balance Sheet Overview ($’million)

Metric          Sep 2025      Dec 2024

Total Assets  14,203          13,466

Cash & Equivalents         1,838  1,614

Long-Term Debt    2,974  2,971

Total Equity  7,695  7,592

Interpretation

• Strong liquidity with net cash flexibility.
• Conservative leverage supports dividends, buybacks, and growth capex.
• Balance sheet resilience provides downside protection in a cyclical industry.

Key Ratios & Indicators

Metric          Performance

Revenue Growth (Q3 YoY)        +21%

Net Margin (FY-to-date)  ~20%

Free Cash Flow Conversion       65%

Cash Balance       >$1.8bn

Ammonia Utilization        97%

Dividend Yield       Attractive and sustainable

Strategic Insights

• CF Industries remains one of the lowest-cost global nitrogen producers, offering durable margins across cycles.
• Leadership in blue and low-carbon ammonia provides long-term optionality tied to energy transition demand.
• Strong free cash flow enables shareholder returns without balance sheet stress.
• Ongoing regulatory uncertainty (EU CBAM) and operational risks are manageable given geographic diversification and cost leadership.

Strengths

• Structural cost advantage from North American gas access.
• Strong free cash flow and disciplined capital allocation.
• Clear leadership in low-carbon ammonia.
• Robust balance sheet and liquidity.
• Proven execution on strategic acquisitions and expansions.

Risks / Challenges

• Commodity price volatility.
• Operational incidents and maintenance-related downtime.
• Regulatory uncertainty around carbon pricing and CBAM.
• Cyclicality in agricultural demand.

Outlook

CF Industries is well-positioned for sustained cash generation in 2025 and beyond, supported by tight nitrogen markets, disciplined supply additions, and growing demand for low-carbon ammonia. While near-term volatility remains inherent to the sector, the company’s cost leadership, balance sheet strength, and shareholder-friendly capital allocation underpin an attractive medium-to-long-term investment case.

Analyst View

“CF Industries continues to demonstrate the strength of its low-cost asset base and disciplined capital allocation. Strong cash generation, attractive shareholder returns, and strategic positioning in low-carbon ammonia differentiate CF from peers and support long-term value creation, even in a cyclical environment.”

Conclusion

CF Industries delivered strong Q3 and nine-month 2025 results, marked by resilient earnings growth, robust free cash flow, and consistent shareholder returns. With a solid balance sheet, industry-leading cost position, and expanding exposure to the energy transition through low-carbon ammonia, CF Industries remains well-placed to navigate near-term volatility and capture long-term structural opportunities.