Vylor Q3 2026 Earnings Call - Royalty Neutrality Achieved as Licensing Shift Reshapes Growth

Operator: I will now hand the conference over to Kim Booth, Head of Investor Relations. Please go ahead.

Kim Booth, Head of Investor Relations, Corteva Inc.: Good morning, and welcome to Vylor’s third quarter 2026 earnings conference call. Our prepared remarks today will be led by Chuck Magro, Chief Executive Officer, and David Johnson, Chief Financial Officer. Additionally, Judd O’Connor, Chief Commercial and Operations Officer, 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 Vylor 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 factor section of our registration statement on Form 10 and reports filed with the SEC. We do not undertake any duty to update any forward-looking statement except as required by applicable law. As we completed the separation on October 1, Vylor’s Form 10-Q for the period ended September 30, 2026, will reflect the consolidated financial results of Corteva Inc. Today’s presentation will focus on Vylor as a standalone company on an adjusted pro forma basis. We will be making references to certain non-GAAP financial measures during this call. As used in today’s discussion, net sales means pro forma net sales. EBITDA means adjusted pro forma operating EBITDA. EBITDA margin means adjusted pro forma operating EBITDA margin.

Operating EPS means adjusted pro forma operating EPS. Further information regarding Vylor’s pro forma financial information, management adjustments, and 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’s now my pleasure to turn the call over to Chuck.

Chuck Magro, Chief Executive Officer, Corteva Inc.: Thanks, Kim. Good morning, everyone. On October 1, Vylor began operating as an independent public company. We moved quickly from completing the separation to executing as a standalone company, and I want to start by thanking our employees around the world. They completed a transaction of significant complexity on time and under budget while continuing to serve our customers and run the business with discipline. We enter this new chapter with strong year-to-date performance, a clear strategy, and confidence in both our near-term commitments and our longer-term opportunities. As a pure play, Vylor has a sharper strategic focus, faster decision-making, and clearer accountability. We can now align the full organization and our capital allocation around a highly specialized model, an advanced global seed and genetics platform built on elite germplasm, innovation, and intellectual property. We also begin this new chapter from a position of strength.

From 2020 through 2025, as part of Corteva, the seed business unit more than doubled in EBITDA and expanded EBITDA margin by more than 1,000 basis points. We launched more than 1,700 products and improved our net licensing position by more than $550 million. That track record is important because the strategy we presented at Investor Day is not dependent on reinventing Vylor. It is about extending the strengths and capabilities we already have and monetizing them more broadly and efficiently. Of course, we are very focused on closing out 2026 strong and delivering on the commitments we’ve made for the year. Let me now turn to our third quarter and full year performance. Q3 is seasonally our smallest quarter. In fact, we lose money most of the time because most farmers are in the field rather than making seed purchase decisions.

As a result, quarterly comparisons can easily be affected by weather and the timing of shipments, and that’s exactly what happened this year. We also made deliberate strategic changes to our Brazil soybean route to market as we continue to ramp up our licensing business. David will discuss this in more detail, but the net effect will be less volume in Q3, but more price, and more importantly, more margin, which will come in Q4. When I look at the first nine months of the year, we’ve had another strong year so far. Through nine months, revenue is growing, EBITDA is growing faster than revenue, margins are expanding, and royalty economics are improving. That reflects strong demand for our technology, price for value execution, and productivity.

Importantly, these results support our expectation that fourth quarter performance will complete the year as planned and that Vylor remains on track to deliver its full year 2026 revenue and EBITDA commitments. For the full year, we expect revenue to increase approximately 3% to about $10.4 billion. We expect operating EBITDA to increase approximately 10% to $2.8 billion, with EBITDA margin expansion of about 100 basis points to roughly 27%. This is consistent with the full year outlook reflected in the financial framework we shared at Investor Day. That earnings growth is being driven by the same levers at the center of Vylor’s investment thesis: price for value, a growing royalty business, controlling our controllables, and a more attractive portfolio mix. For example, royalty income is expected to increase by more than $100 million, supported primarily by Brazil soybean licensing change and North American corn.

We continue to manage the realities of operating a global ag business, including weather across several geographies, market conditions in Latin America, and elevated freight and energy-related costs. What gives us confidence is that our underlying execution remains strong and the controllable elements of the business continue to perform. Now, a few early high-level comments on 2027. We anticipate another strong year of growth, driven by pricing for value of our technology and incremental licensing gains. This is expected to be against the backdrop of a relatively stable global acreage environment. We should see more planted area in Europe and APAC as weather patterns normalize. It’s still early, but our current thinking is that we could see normalized corn and soybean planting in the U.S. next year due to a host of reasons, including farmer economics and weather.

At the same time, Brazil should continue to expand, particularly in corn, supported by growing domestic ethanol demand. Overall, we view this as a neutral to constructive mix for Corteva. As usual, we will provide formal 2027 guidance on our 4Q earnings call in February. Specific to Corteva, two milestones I’m particularly excited about for next year are the launch of our first hybrid wheat product and our entry into the high-value triple-stack corn licensing market in North America. Although it will take some time to ramp up supply in both of these areas, both demonstrate the increasing value of our technology and represent important steps in expanding our addressable market. Before handing the call over to David, a few final comments on our technology pipeline and what’s to come. At our September Investor Day, we laid out a clear path for Corteva’s next phase of growth.

Build on our leading corn and soybean franchise, expand the value we capture through licensing, and bring industry-leading innovation to the market, including hybrid wheat and our next generation of technologies. We have 12 new technology platforms advancing over the next decade, more than ever, creating a significant runway for innovation and growth. Together with these growth factors underpinning our 2027 through 2029 financial framework and our expectation that earnings will grow faster than sales, while longer-term opportunities in areas such as gene editing and biofuels provide additional upside beyond the framework. Going forward, we plan to give investors greater visibility into that pipeline by regularly reporting progress against key development, regulatory, and commercialization milestones as each platform moves closer to market. For farmers, innovations like these will be increasingly important to producing more from every acre while managing variable growing conditions.

Our job now is clear: serve our customers, deliver innovation that creates measurable value for farmers, maintain discipline on cost and capital, and consistently translate our technology leadership into earnings growth, cash generation, and long-term shareholder value. We laid out that roadmap at Investor Day. Our year-to-date results reinforce our confidence in it, and as a standalone Corteva, we are just getting started. David, over to you.

David Johnson, Chief Financial Officer, Corteva Inc.: Thanks, Chuck, and welcome to everyone to the call. Let’s start on slide eight, which provides the financial results for the first half, third quarter, and year-to-date period. Briefly touching on the third quarter, which is our smallest quarter, net sales were $938 million, down 1% from prior year, while organic sales were down 3%. Price mix gains were driven by increased licensing income and continued value capture for technology, while volumes declined due to timing, weather, and the transition of our Brazil soybean business to a licensing model. As a result, third quarter operating EBITDA was a loss of $269 million, down 33% versus prior year. Focusing on year-to-date, net sales increased 4% to $8.5 billion due to strong market demand in North America and continued value capture for our technology across all regions, partially offset by weather-related reductions in corn acres and the Brazil soybean licensing transition.

Year-to-date operating EBITDA was about $2.7 billion, up 8% versus prior year. Operating EBITDA margin of 31.2% expanded about 130 basis points, reflected the growing benefit from net licensing, execution on our price for value strategy, and productivity actions. In the Americas, margin expansion reflected the growing benefit from net licensing, our price for value strategy, lower commodity costs, and ongoing productivity. This was partially offset by higher freight and warehousing costs, higher SG&A, including legal fees on a favorable settlement, and higher IT costs. Across the rest of the world, margin contraction reflected weather-related volume pressure, higher freight, duty, and other production costs, as well as higher selling expenses, partially offset by price mix execution and benefits from net licensing. As a reminder, corporate costs and R&D are managed at a global level and are therefore reflected as reconciling items to consolidated operating EBITDA.

Overall, the first nine months demonstrated resilience of the portfolio and our ability to expand earnings quality through licensing, productivity, and disciplined execution. Turning to slide nine, it’s important to look through the seasonality of the third quarter and focus on the underlying performance of the business. As I mentioned, third quarter net sales were down 1%, with price and mix up 6%, and volumes down 9%. Price mix, excluding licensing income, was up 3%. These volume declines reflect three primary factors. First, favorable early spring weather in North America shifted soybean seed sales into the second quarter, creating a difficult third quarter comparison. Second, historic drought in EMEA and delayed rainfall in Asia-Pacific affected planted area. Third, as we mentioned previously, we deliberately moved away from lower-margin branded seed sales towards a more profitable and capital-efficient licensing model in Brazil soybeans.

The shift reduces reported revenue and volume by about $50 million in the third quarter and moves the majority of income recognition into the fourth quarter, where it will be reported as part of price and mix. Importantly, our licensing model carries substantially lower costs, improves margins, and allows Conkesta to reach a much larger acreage opportunity through Cordius and third-party germplasm providers. On average, our margins are three times higher in our licensing business in Brazil than our traditional branded business. So while this transition creates a near-term headwind to reported volume, it is a meaningful long-term benefit to our earnings quality. These volume declines were partially offset by higher demand in Argentina and Brazil summer corn. Overall, third quarter variability is largely a function of timing, weather, and our intentional licensing transition.

We expect stronger licensing income and improved margins in the fourth quarter, and our full-year outlook remains intact. Turning to slide 10, this bridge summarizes the drivers of our year-to-date operating EBITDA. Operating EBITDA was up about $200 million to just over $2.66 billion. Price mix contributed about $190 million, driven by continued demand for our leading technology across all regions and disciplined execution on value capture. Volume was roughly a $60 million headwind, primarily reflecting lower corn acreage across rest of the world due to historic drought, as well as El Niño impact in Asia-Pacific. This was partially offset by higher soybean acres in North America. Net licensing contributed about $150 million, driven by corn and soybean benefits across both licensing income and expense. We crossed an important milestone in the quarter, moving into a net out-licensing position.

That represents an inflection point for Vylor and an early proof point in the licensing growth opportunity we outlined at Investor Day. Net costs and productivity contributed roughly $30 million, including approximately $55 million of productivity savings, partially offset by higher freight and warehousing and other production costs. Investments in R&D increased by about $50 million as we continue to target reinvesting roughly 10% of sales into our future growth. We also had about $60 million headwind from SG&A, as I already mentioned. Overall, we’re continuing to demonstrate that disciplined execution and technology leadership can drive meaningful earnings growth, even in a dynamic macro environment, as evidenced by our 8% growth in operating EBITDA year over year. Let’s turn to slide 11.

Based on our strong performance through the first nine months and our expectations for the fourth quarter, we are reaffirming our full-year 2026 guide that we provided at our Investor Day. We continue to expect approximately $10.4 billion of net sales, or roughly 3% growth versus prior year, supported by broad-based organic growth and the incremental benefit of controllable levers. Operating EBITDA is expected to be approximately $2.8 billion, representing about 10% growth, with operating EBITDA margin of approximately 27%. Our outlook continues to be supported by price and mix, net licensing and productivity, which are driving both earnings growth and margin expansion. We’ve included the full-year operating EBITDA bridge in the appendix for additional detail on those drivers. We expect operating EPS of $2.25-$2.35, representing approximately 5% growth at the midpoint.

EBITDA growth is expected to be partially offset by higher exchange losses, taxes, and net interest expense, which I will discuss more in a minute. As we’ve previously discussed, our full-year free cash flow conversion will be impacted by several one-time items, including the Bayer agreement earlier this year and one-time separation actions. Absent these items, we would expect full-year free cash flow conversion to be in line with our midterm target discussed at our Investor Day in September. Overall, our reaffirmed guidance reflects strong year-to-date performance and confidence in our expectations for the fourth quarter. Turning to slide 12, which provides additional modeling assumptions for EPS for the full year, I’d like to briefly discuss some of these expectations that might look a little different than what you’re used to.

The 24%-26% base tax rate range is above historical Corteva levels, reflecting Vylor’s standalone geographic mix of earnings, which is heavier in the Americas. We believe this range provides the appropriate starting point for modeling Vylor on a go-forward basis. We also expect interest expense to be higher in 2027, as the 2026 outlook captures only a partial year of interest on the separation-related debt, compared with full-year impact next year. With respect to EGL, our full-year 2026 operating EPS includes an approximately $0.20 headwind from exchange gains and losses that do not fully reflect Vylor as a standalone business. In the first half of the year, the balance sheet hedging program covered all of Corteva.

Because of the separation’s reverse spin treatment for SEC reporting purposes, all hedge gains and losses stayed with Vylor, while the exchange gains and losses on the underlying crop protection exposures were removed from our pro forma results. That creates a mismatch, particularly because the program exposures this year were weighted heavily towards crop protection. Looking ahead to 2027, we expect EGL to normalize. Moving to slide 13, our reaffirmed 2026 outlook provides a strong starting point for the financial framework we presented at Investor Day. From 2027 through 2029, we continue to target annual net sales growth of 3%-4%, driven by continued trait penetration, new product launches, and our price for value strategy across a resilient global portfolio. We expect fairly ratable annual operating EBITDA growth of 7%-8% across the three years, nearly twice the rate of top-line growth.

That earnings compounding is expected to be fueled by higher-margin licensing expansion, ongoing productivity to offset inflation, and a richer portfolio mix. By 2029, we’re targeting an operating EBITDA margin of approximately 30% at the midpoint, representing roughly 300 basis points of structural expansion from our 2026 guidance. We also continue to target average free cash flow conversion of approximately 60%, about $1 billion in annual share repurchases, excluding significant M&A, and a modestly growing dividend. The framework reflects the earnings quality we expect from our world-leading advanced technology portfolio, disciplined capital allocation, and a sharper focus on the highest return opportunities for Vylor. Let me close with some key takeaways on slide 14. First, we completed the separation on time and under budget, allowing us to begin standalone operations from a position of financial strength.

Second, we delivered strong year-to-date execution across both Americas and the rest of the world, navigating weather challenges through commercial discipline and value-based pricing. Third, improvements in net licensing and the disciplined execution on controllable actions translated into meaningful margin expansion. Finally, our reaffirmed 2026 guidance reflects sustainable operational momentum and full confidence in our fourth quarter delivery. Taking a step back, our 2026 outlook supports the 2029 financial framework we laid out at Investor Day, including durable above-market earnings growth, structural margin expansion, and strong cash generation. With that, let me turn the call back over to Kim.

Kim Booth, Head of Investor Relations, Corteva Inc.: Thanks, David. Now let’s 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.

Operator: We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question, and if you’re muted locally, please remember to unmute your device. Your first question comes from the line of Chris Parkinson from Wolfe Research. Please go ahead.

Chris Parkinson, Analyst, Wolfe Research: Great. Thank you so much. Just want to go over some of the stuff on the net licensee fees. You’ve increased your guide to $180 million, which I think was the legacy, versus $130 million, and that, by my simple calculation, gets you to a +$60 million for the year, so kind of passing that net neutrality benchmark. Two simple questions. Is that generally contested as I think about the second half of 2026? Is there anything else that’s well exceeding your expectations as it applies to 4Q and order books there? Is there something else? That implies that the $200 million improvement, the 2026 to 2029 targets at your CMD are kind of appearing pretty conservative at this point. Is that a fair assessment, or how should we be thinking about that? Thank you.

Chuck Magro, Chief Executive Officer, Corteva Inc.: Yeah. Good morning, Chris. Maybe I’ll start, and I’ll give you the situation and then answer your question, but maybe Judd can just talk about licensing contracting, because we’re actually in contracting season right now. Look, you know this, I think, but I think that licensing is the largest near-term opportunity Corteva has to create value. We finally are unencumbered and we have access to some of the best technology to move to our licensees. You’re absolutely right, we hit a milestone this third quarter where we’re finally royalty neutral after seven years and something like $700 million in the hole. We will close the year out a little better than we thought, and we’re saying approximately $60 million positive. So your $180 million number is right. Please remember that what we’re trying to do is deliver $1 billion in net royalty income by 2035.

The three-year framework that we have laid out just in September would be approximately another $100 a year of income. To your question on what is the driver, it is multiple fold, so it is not one market. We are seeing better trait penetration in Brazil through Conkesta, and we have went over that 10% mark now. We probably have to wait and see when we add it all up, but certainly well over the 10%, probably closer to 12%. But we are also seeing very strong demand for corn in the U.S., both germplasm and trait technology. The problem that we have got right now is we are supply limited. We are producing as much as we can, but as you know, this is a brand new ramp-up for us.

Most of this journey has been soybean-based, and now we are able to do this with corn, but we are seeing very strong demand for corn. Maybe, Judd, just give some color on the contracting this year.

Judd O’Connor, Chief Commercial and Operations Officer, Corteva Inc.: Yeah, no, very good. Thanks for the question, Chris. Chuck covered most of it quite well. When you look at North America corn, we nearly doubled what we did from 2025 into 2026, and the current production that licensees have in the ground would allow us to push another 40% or 50% growth going into 2027. So feel extremely good about that. Chuck already talked about Conkesta E3. The trait from an insect control standpoint has performed extremely well, and you will start to see us come with proprietary germplasm in a really robust way, as we have got some very good performing germplasm that has come through the pipeline in Brazil. So feel very optimistic about where we are going to be in 2027, and certainly everything that we have in the three-year framework through 2029, we feel like we are in a strong position.

Operator: Your next question comes from the line of Vincent Andrews from Morgan Stanley. Please go ahead.

Vincent Andrews, Analyst, Morgan Stanley: Thank you, Chuck. Wondering if you could assess for us the Brazilian operating environment, particularly as it relates to El Niño and your expectations probably maybe more importantly for the safrinha corn crop, which I know is important. The pace of planting for the first crop has been fast. There is still obviously El Niño risk out there, but do you see your order book for the safrinha crop shaping up well despite the El Niño uncertainty? Then any early indications you have on the North American order book, particularly given the recent volatility in corn and soy prices would be helpful.

Chuck Magro, Chief Executive Officer, Corteva Inc.: Yeah. So, I will take the question, Vincent, and I will let Judd. Judd was just there last week in Brazil and Latin America, but let me give you sort of how we are thinking about things. So, you are absolutely right. We do not usually talk a lot about weather. But if you think about what happened in 2026 with El Niño being generationally unprecedented is what we are told, and extreme drought in Europe and then delayed monsoons in India, it goes just around and around. We did see volume impacts in our portfolio around the world. So, where we are most cautious right now to finish out the year at the guide that we gave, which was the $2.8 billion, we need to see a good safrinha planting. Early indications are we are going to see it.

Maybe, Judd, I should just turn it over to you right now because you were there last week assessing the situation.

Judd O’Connor, Chief Commercial and Operations Officer, Corteva Inc.: Yeah, Vincent, you are correct. The summer corn crop went in the ground extremely well. Soybean crop, maybe even more importantly, has gone in the ground quickly, on time, and looks good in terms of how it is progressing right now. That soybean crop is really what sets us up for safrinha. When that crop goes in early, it comes off early, and it gives us a nice window to put safrinha in the ground. Currently, within our plan, we are looking at roughly flattish safrinha acres, but we are certainly set up to see that potentially expand going forward. So feel really good about where we are. Our order books are solid. As you know, we have got credit and interest rate challenges that the Brazilian farmers are dealing with right now, but our barter program is strong. We see it continuing to be in position to expand to help support that.

Feeling really good about where we are going into from a safrinha crop. From a North American perspective, if you look at what we know today, our Brevant business has continued to grow at an exponentially fast pace. We had a really strong year in 2024, another strong year in 2025, and 2026 is no different. We see that Brevant footprint and share position continue to expand at retail. The portfolio looks good, and retail likes what we are doing in terms of how we are working with them. Pioneer has done well both in corn and soy. On the soy side, both in the eastern and western corn belt, we saw some nice share gains. We gave some back in the south.

I will be the first one to say we did give some share back in the south, where we have got very high dicamba pressure with both soy and cotton in that market. From a set up for 2027 from North America, share position is strong. We have got a really good product portfolio coming through in terms of mix for 2027, and feel good about where we sit today.

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

David Begleiter, Analyst, Deutsche Bank: Thank you. Chuck, just following up on the last share question. Do you have final share numbers for corn and soybeans in the U.S. totality? Again, early thoughts on 2027 share in soybeans. Do you expect in total to be neutral or maybe give up a little bit, especially in the South? Thank you.

Chuck Magro, Chief Executive Officer, Corteva Inc.: Yes. The answer is we don’t have final numbers yet. We’ll need to add it up as we close out the year. But here’s how we are sizing, and I think Judd did a pretty good job, but let me, I’ll use my words and recap it. Overall, we’re very pleased, right? We enjoy U.S. market leadership in both corn and soybeans, and then corn in Brazil, and we’re highly focused on Brazil soy now with Conkesta, and we’re seeing gains there. So when I look at it, from what we can tell right now in corn, the U.S. corn share is probably up a little bit in 2026, really driven by Brevant growth, which Judd covered. In Brazil, we grew our corn share as well, once again, another year of growth.

When we look at corn rest of world, this is where the weather impacts are most likely going to distort the numbers. So I’m not sure we’re going to have actually very good data for 2026 because of the reduced planted area, so we’ll have to look at that with a careful set of eyes. But really, just to be candid with you, the major driver for our corn share in the future is going to be licensing, especially when we start adding the germplasm and the trait penetration that we’re going to have. Judd just said that we, in essence, doubled our corn licensing, and we’re going to be up again in 2027. So that’s really the focus area for us to drive corn share. In soy, I’d say right now the Enlist market share is still in that 65%-ish range.

We gained in the key Midwest and Eastern Corn Belts. We probably, as Judd said, lost a little bit in the South. And then for us, really the focus area is the trait share in Brazil, and we’ve crossed over that 10% threshold, and we see continued demand for that. So overall, I’d say our share is steady to growing in the areas that we’re focused on strategically.

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

Joel Jackson, Analyst, BMO Capital Markets: Morning. Chuck, appreciate you gave a bit of color on 2027. Can you talk about, for the $3 billion EBITDA number you have given as a placeholder for 2027, maybe what some of the puts and takes are from some of the things you are talking about today? How does the change in the go-to-market strategy in Brazilian soybean change that number? How does seeing a bit of better licensing revenue in general change that number perhaps? Could you also talk about what you are embedding in the $3 billion number for next year, and how it might change if corn is $4, $4.50, $5, $5.50, et cetera?

Chuck Magro, Chief Executive Officer, Corteva Inc.: Yeah. Good morning, Joel. David and I will try to give you some color, but just for the record, we are not giving a guide number in terms of an EBITDA for 2027. We have a lot of farming to do and a lot of sales to do, and we will do that in February at our fourth quarter call. Look, early view of 2027, I think, is constructive. If you look at what we are seeing, we are seeing record demand for grains and oil seeds and biofuels. We have got below inventories when it comes to stocks to use literally around the world, significantly well below the five-year average. I think that we are seeing modestly higher crop pricing. So the general setup for 2027 is not bad. In fact, I would say it is a little better than most think.

When you think about our business, the one driver will be planted area, we do expect a rebound in the planted area in Europe and in APAC, given the significant weather headwinds we saw this year. So that will drive volume when you start thinking about that. In the U.S., it is really early, but you know that the U.S. planted well over 180 million acres of corn and soybeans in 2026. It was in the 183 range, and we think that that might come down a little bit, but still be one of the highest planted areas for corn and soybeans we have seen in recent memory. So we think that that is constructive for our seed business as well. When you think about our licensing, we have already talked about the $300 million 2029 framework.

If it is ratable, which we think it is, it is another $100 million of revenue. There will be some offsets with incremental licensing expense because we are growing our business faster than we can have supply, which we have talked about before. So when I think about the setup, it is pretty constructive. David, over to you now on some of the math potentially.

David Johnson, Chief Financial Officer, Corteva Inc.: Yeah. When you look at probably kind of what we are expecting in the next, I will not say in that three-year period, but especially in 2027, I think Chuck hit really constructively on the volume. We are expecting a little bit more volume than we typically would have in the last three years. Again, some of that is due to the expanded acres where we saw some reduction this year. We also expect Brevant to perform well and so on and so forth here in the U.S., so I think that is good. We have the ratable revenue for the licensing of about 100. It will have a little less impact on the bottom line because as we talked about during our three-year framework, this is a point in time when we are growing corn, we will have some additional licensing costs.

But as you know, that is a setup for even bigger things to come whenever we look beyond our framework. So, when you look at kind of the setup, we feel really good going into this year, and we expect to perform well here in the 4Q and have good momentum going into 2027.

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

Kevin McCarthy, Analyst, Vertical Research Partners: Yeah. Thank you, and good morning. David, it looks like you ended the quarter around $4.3 billion of net debt. I was hoping you could kind of step us through the projected cash harvest in the 4Q. Obviously, the portfolio today is a little bit different than it was under the Corteva umbrella. So, maybe just comment on working capital, any extraordinary items, and where you would expect to end the year from a net debt perspective.

David Johnson, Chief Financial Officer, Corteva Inc.: Yeah. Thanks, Kevin. I like the way you put the harvesting on cash. Yeah, we expect, as you know, in our seed business in 4Q, and particularly in December, we have two things that happen with our cash. One is we collect our normal receivables, typically in the fourth quarter, towards the end of the year, and then we have our prepays. As we look at it today, we expect our prepay percentage to be very much in line with what we’ve seen in the last couple years. For us, that’s in the high 60% for us. When you add that all together, it’s probably a positive $3.5 billion-$4 billion. We would expect to end the year financial debt in total, probably that $2.5 billion kind of range, and then we will have a pretty substantial cash balance.

Net debt will be slightly net. We will have some slight net debt, but it’s certainly going to be less than 3Q, which, as you know, is probably where our balance sheet looks the worst when you come to commercial paper and all those sort of things.

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

Duffy Fischer, Analyst, Goldman Sachs: Yeah. Good morning, guys. Question just around the triple-stack and the corn licensing opportunity. Roughly how much does that contribute from now to your 2029 goal? I guess, importantly, how will that change the revenue recognition by quarter? Just like we’re seeing a change in Brazil with soybeans, as that licensing business changes in corn, does that change when you guys will recognize revenue and when profit runs through the P&L?

Chuck Magro, Chief Executive Officer, Corteva Inc.: Good morning, Duffy. Let me take a kick at this, and then David can kind of talk about the revenue rec items. There probably is going to be a little bit of a shift because of when we recognize licensing revenue and income. Look, Qrome’s going to be. It’s ramping up now. If you recall, it was tied to the situation we had in February with the settlement, and we didn’t have freedom to operate. Then with that settlement that we constructed, we were able to pull the triples five years earlier. So now, we’re in complete ramp-up mode. So, the impact actually over the next three years will be relatively small compared to other parts of the corn portfolio, which would be the doubles. That’s the reference that Judd already gave you, is that we’re seeing very strong demand for that.

Now, the order book for Qrome licensing, that’s the triples, is very strong. The question that we’ve got to work through is how much supply and volume can we put into the hands of those licensees who are in desperate need to get it? That’s where it’s going to take us some time, because this is the first year of production. So, normal course is that it takes a few years before we’ll have sort of commercial-scale volumes to really be able to move the market. But it will have an impact, David, in the 2028, 2029 timeframe, but very small in 2027. Then maybe revenue rec, David.

David Johnson, Chief Financial Officer, Corteva Inc.: Totally agree. So, in one of the things in this particular quarter, when you’re looking at Brazil, for instance, it’s really dependent contract by contract. When you look at the contracts now that we have for soybeans in Brazil, that’s why it moved for us to a bag revenue that we used to book in Q3, now it moves to Q4. For corn, I would say, early days, but right now, it looks like we’re a little bit more in the first half of the year. But that, again, is dependent on the contract as far as how much we get up front, how much we get per bag, and so on and so forth.

Judd O’Connor, Chief Commercial and Operations Officer, Corteva Inc.: Maybe just one additional to add. In terms of the difference between triples or doubles and how we work with licensees, the timing of production, the timing of revenue recognition, regardless of whether it’s a double or whether it’s a triple, you’re going to see the same type of timing for the entire end-to-end process.

Operator: Your next question comes from the line of Kristen Owen from Oppenheimer. Please go ahead.

Kristen Owen, Analyst, Oppenheimer: Hi. Good morning. Thank you for the question. Just a follow-up on the Brazil licensing transition. At what point does that volume drag flip to neutral or tailwind? Maybe asked a slightly different way, how much branded seed inventory are you still sitting on, and when does that go away? Thank you.

David Johnson, Chief Financial Officer, Corteva Inc.: Yeah, Kristin, this is a pretty easy one for us because after this quarter, it’s basically going to be zero. Going forward, you’re going to see licensing income grow and really no impact on volume year over year.

Chuck Magro, Chief Executive Officer, Corteva Inc.: Kristin, I think that this is an important change, though. If you think about the Brazil market structure in soybeans, we’re not talking corn. Very different. 85% of the Brazil soy market is a licensing market, and only 15% is branded. We were going to market in that 15% as a branded business. We’ve made the deliberate change. I think it’s going to allow us to really reach our licensing aspiration. As you know, that’s very different than the U.S. market, where only about a third of the market is licensing. We’re going to see, or we saw the volume hit in Q3. You’re going to see the price gain and the margin gain in the fourth quarter. In another quarter or two, when you put it all together, you’re going to see the value creation, and we think it’s quite substantial.

Operator: Your next question comes from the line of Matthew DeYoe from Bank of America. Please go ahead. Matthew, your line is open. A reminder to unmute your device.

Matthew DeYoe, Analyst, Bank of America: Hello?

Operator: We can hear you now. Go ahead. Your next question comes from the line of Frank Mitsch from Fermium Research. Please go ahead.

Frank Mitsch, Analyst, Fermium Research: Good morning, and congrats on the separation. In the presentation, you’re showing that you’re targeting $1 billion in annual buybacks. Should we be assuming that that’ll be prorated $250 million a quarter? David, you indicated higher tax rate, higher interest expense, exchange gains and losses elevated this year, but that’s going to normalize. I’m just curious, when you boil all this down, if we achieve the 7%-8% EBITDA growth, what would you likely see in terms of EPS growth, given all these moving parts? Thank you.

David Johnson, Chief Financial Officer, Corteva Inc.: Yeah, thank you for the question. On the first current year buyback, our intention would be to be more ratable through the year, so about $250 million or so. We would expect to start that in Q1 of 2027. Regarding kind of the elements that we showed, the reconciliation for EPS, we did mention, and maybe it’s worth a little bit more color around the EGL. If you do the math on what we showed for 2026 impact on EGL, you get to roughly a $0.29-$0.30 impact negative. We said about $0.20 of that is due to separation items, which I think we did a pretty decent job of going through the details of that. So going forward, that would say your kind of normalized EGL impact would be about a negative $0.10 or so going forward.

When we look at it right now, and again, we’ll give more details when we give our official guide in February of next year, we’d probably be at a similar growth rate, if not a little bit more of our overall EBITDA growth rate.

Operator: Your next question comes from the line of Edlain Rodriguez from Mizuho. Please go ahead.

Edlain Rodriguez, Analyst, Mizuho: Thank you. Good morning, everyone. A quick one on Brazil. I mean, clearly farmers there, they’re not in a great financial shape, but at the same time, they have to prioritize seed inputs. If you can talk about the puts and takes there. Also, are you seeing any trading down by farmers because of the financial condition?

Judd O’Connor, Chief Commercial and Operations Officer, Corteva Inc.: Yeah, so thanks for the question, Edlain. Let me try to get to that. I mean, from a macro/net farm income standpoint, certainly interest rates are a bit high. We know that. Cash and credit is tight. We know that. I think that sets up well for us from a barter perspective. I do believe that we are going to see a small expansion of the soybean area planted. We’re looking at flat safrinha right now, but with as well as the soybean crop went in the ground, I think that a lot of the growers in Brazil are going to want to put in a good safrinha crop, so we may see expansion. Maybe just as a reminder, safrinha used to be an opportunistic crop. If we had good soybeans and they could expand with some additional second crop corn, they would.

It has really become a very established agronomic practice that the soybean crop and the corn yields depend on each other in that rotation. It is a very stable market at this point in time. In terms of trading down, we haven’t seen that yet. In fact, we continue to see low single-digit price increase opportunities because of the new mix of new technologies, higher yielding, more productive products that we’re putting into the lineup every year. Growers are those are the first products that they’re purchasing and making sure that we can have the inventory available to supply it. Again, very cautious and eyes wide open in terms of what the economic situation is for our farmer customers, but at the same time, we see them investing in the seed as a way of yielding their way through that.

Chuck Magro, Chief Executive Officer, Corteva Inc.: Yeah. Then, Ellen, there’s one other structural dynamic that you have to be aware of in Brazil, right, is they are now becoming a global leader in corn ethanol, and a lot of the corn crop is not leaving the country. In fact, there’s another something like 30 new ethanol plants on the design books on top of what they’ve already constructed over the last decade. So this crop needs to grow. It’s driving a government mandate on biofuel blending, and I think that what we’re seeing is not only solid agronomic practices with rotation from soy to corn, but also very strong domestic demand for corn ethanol, which is a structural change that we’re seeing. Given, we can talk all day long about the health of the farmer in Brazil.

It starts with the seed, and as we’ve seen many, many times, and this is the perfect test case, is farmers don’t usually trade down because they really do need the yield, especially when margins are tighter.

Operator: Your next question comes from the line of Lucas Beaumont from UBS. Please go ahead.

Lucas Beaumont, Analyst, UBS: Thanks. Good morning. I just wanted to ask a longer-term question on the development of the hybrid wheat market and the competitive landscape there. I mean, you guys have your technology coming that you’ve been focused on and the process there, primarily in North America. Other competitors have launched other products focused more on Europe. Both have been framed in the market as having their own benefits and addressing production cost problems in different ways. Can you just walk us through why you think Vylor’s technology is advantaged and why you see you have the right to win and capture share there, and what’s driving your market focus versus others as well? Thanks.

Chuck Magro, Chief Executive Officer, Corteva Inc.: Yep, sure. Thank you for the question, Lucas. Look, it is an important distinction. The whole industry has been trying to move hybridization of wheat for decades, including legacy Corteva, for many, many decades. The opportunity is clear, right? If you look at the yield gains we’ve seen in corn and soybeans versus wheat has lagged. The challenge hasn’t been the desire to be able to hybridize it. It’s finding an economic production system that farmers are willing to pay incremental value because they can see yield and making it low cost enough that the producers can make money. So that’s the challenge that the entire industry has been trying to solve for a very, very long time. When we look at our system, we have a proprietary hybridization production system. We call it Expedite.

It is proprietary to only Vylor, and it’s the only production system which we believe will be able to produce the hybrids at a cost. Most importantly, what we’re seeing with the early generations coming outside of the pipeline are up to 20% in dry conditions, on average 10% yield improvement. So there’s a clear benefit, I think, for farmers to pay for the seed, which is really the challenge we’re going to have. There’s enough margin there for us to keep investing in R&D and breeding. These are the worst that we’re going to have on our pipeline because they’re the first ones coming out. So we’re really excited about what we can do with this. I would put our technology in that disruptive camp.

There are other systems which you’ve talked about today, but they’re based on a different technology, and we’ve tried to use those technologies, and we couldn’t make them work. So that’s why we have a lot of confidence in this. Now, what’s happening with us is we will launch this year in 2027, and we are planning to grow this pretty rapidly. It will start in the U.S., but I want to correct one thing you said. We have plans to take this around the world, including areas of Asia, Latin America, and Europe. So this will be a global business, whether it’s branded or licensing, and the answer is probably both. Our goal is to deliver about $500 million of revenue by 2035 or $1 billion by 2040. So this becomes the third leg of the stool.

The way to think about this from an economics perspective is once it is at scale, it will look very similar to our soybean business. So it becomes the third crop that is that billion-dollar-plus franchise that is global for us. But it all hinges on our proprietary production technology, and we are the only ones that have that.

Operator: Your next question comes from the line of Salvator Tiano from KeyBanc Capital Markets. Please go ahead.

Salvator Tiano, Analyst, KeyBanc Capital Markets: Yes, thank you very much. I just want to ask a little bit about whether there has been any recent updates on the regulatory front on gene editing, whether that is any more, I guess, member states in Europe moving ahead with ratifying the directive, or any update on what is happening in China, and what are your expectations there?

Chuck Magro, Chief Executive Officer, Corteva Inc.: Yeah. Good morning. So, as you probably know, the EU Parliament did pass the legislation earlier this year, and we were delighted to see it. That puts the European Union squarely kind of on the leading edge of being able for European farmers to use gene-edited crops, which I think is going to be fantastic for food security and national security for that region. So now, you are right, each country has to work within that framework to implement their country-specific laws, and that is the work that is happening now. That will take some time throughout 2027, maybe even into 2028, but there are numerous countries that are working through it right as we speak. So I think that that is really good progress. When it comes to China, so we still need the Chinese import approval for gene editing crops. We still remain hopeful.

They allow the cultivation of gene editing inside of the country, so I think the next logical extension will be the importation of corn and soybeans that’s gene edited. For us, what we’re doing is we’re getting ready. Our very first gene-edited technology will be a gene-edited corn hybrid. It’ll be a disease-resistant corn hybrid for very important diseases. We did receive approval from the U.S. a couple years ago, so this technology is more or less ready to go, and now we’re trying to work through, okay, do we put it in Europe once each of the individual countries have approved it? Do we move it into the United States in a stewarded launch designed to be maybe perhaps in the ethanol crop? Because a third of the corn crop does not leave the United States. It ends up in the ethanol pool.

That’s what we’re doing right now, is we’re working through sort of how to move the first gene-edited corn hybrid into the global markets, and we’re looking at options in both Europe and the U.S. right now. So very good progress, I think, from a gene editing perspective.

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

Arun Viswanathan, Analyst, RBC Capital Markets: Great. Thanks for taking my question. You provided some longer-term targets as well, so I just wanted to maybe ask on that. As you look into 2027, understanding this year had some puts and takes, one time in nature, do you expect to kind of be within that 7%-8% EBITDA growth? What would maybe offset that on the cost side, if anything at all? Thanks.

David Johnson, Chief Financial Officer, Corteva Inc.: Yeah, Arun, I think one of the things we wanted to point out certainly during this call was that we feel very comfortable with our three-year financial framework that we provided just a couple months ago. Really, when you look at where we’re exiting 2026 going into 2027, we feel good about that framework. The only thing we really provided on 2027 was we said that we expect the 7%-8% to be ratable. I think what we talked about regarding our progress on licensing, our expectations on volume for next year, we feel that that’s a good starting point going into next year.

Operator: At this time, there are no further questions. I will now turn the call back to Kim Booth for closing remarks.

Kim Booth, Head of Investor Relations, Corteva Inc.: Great. Thanks for joining the call and for your interest in Corteva, and we hope you have a safe and wonderful day.

Operator: This concludes today’s call. Thank you all for attending. You may now disconnect.