ADM Archer Daniels Midland 10-Q 2026-06-30 section summaries

ADM — Q2 and first half 2026

ADM’s second-quarter results improved substantially year over year, with higher gross profit and lower restructuring charges. First-half earnings also rose, but operating cash flow fell sharply as working-capital movements were less favorable than in 2025.

Consolidated results

Q2 revenue increased 7.2%, principally because Topic 815 revenue—mainly physical commodity sales accounted for as derivatives—rose to $16.295B from $14.825B. Topic 606 revenue was $6.386B versus $6.341B. Lower restructuring costs and stronger segment results contributed to the earnings improvement. Q2 interest and investment income was $116M, compared with $70M of net expense a year earlier; consolidated interest expense was $148M versus $159M. Effective tax rates declined to 16.2% in Q2 and 17.5% in H1, from 22.2% and 19.5%, respectively, reflecting non-taxable Section 45Z benefits and the tax effects of 2025 impairments.

Q2 segment results

Ag Services and Oilseeds growth was concentrated in crushing and refined products. Nutrition and Carbohydrate Solutions revenue declined modestly, while both segments’ operating profit increased. Ag Services and Oilseeds combines commodity origination, merchandising, logistics and processing; Carbohydrate Solutions makes food, feed and industrial products and is pursuing carbon-capture and other lower-carbon initiatives; Nutrition supplies specialty food, beverage, feed and pet ingredients.

Q2 reconciliation to pretax earnings included Corporate expense of $460M (versus $498M), sale gains of $21M (versus $8M), and impairment, exit, restructuring and settlement charges of $3M (versus $224M). Q2 2025 included a $69M contract-termination gain. For H1 2026, sale gains were $83M versus $8M, impairment/exit/restructuring/settlement charges were $20M versus $273M, and ADM recorded $55M of its share of non-recurring equity-method investment charges. February 2025 cost-optimization and portfolio-simplification initiatives are expected to generate more than $500M of savings over 3–5 years.

Cash flow, balance sheet and liquidity

H1 operating cash flow was pressured by working capital: inventory was a $298M use of cash versus a $2.152B source in H1 2025; receivables were a $379M use versus a $197M source; and segregated investments were a $177M use versus a $1.261B source. Cash dividends paid were $510M versus $495M. Q2 shares outstanding were 482M at both the beginning and end of the quarter. The company had 234.1M treasury shares at June 30, versus 235.5M at year-end; 115M shares remained available under its repurchase authorization, extended through December 31, 2029.

Total debt comprised $407M short-term debt, $1.153B of current maturities and $6.451B of long-term debt. Credit lines, including receivables securitization programs, totaled $12.6B, with $10.0B unused; commercial paper outstanding was $30M, down from $715M at year-end. Segregated cash and investments were $8.516B, largely held for regulatory and customer-related purposes, alongside $9.175B of brokerage-customer payables.

Risk, valuation and other developments

Commodity derivatives and related positions create earnings volatility: non-designated derivatives produced Q2 pretax gains of $656M versus $296M, but H1 results were a $61M loss versus a $467M gain. Commodity-contract results were a $574M Q2 gain but a $300M H1 loss; foreign-currency contracts contributed gains of $82M in Q2 and $239M in H1. ADM recognizes many commodity mark-to-market changes in earnings, primarily cost of products sold, and results can be affected by price correlations, freight volatility and counterparty defaults. At June 30, non-designated derivative assets were $1.157B and liabilities $1.132B.

Level 3 fair-value assets were $3.960B and liabilities $528M at June 30. H1 unrealized changes recognized in cost of products sold included a $175M net decrease in asset-side gains and $862M of increased liability losses. Valuations rely partly on unobservable local basis and transportation inputs; in some markets, price quotes come from only one or two independent sources. ADM’s 22.5% Wilmar investment had a $4.1B carrying value and $3.9B market value; ADM concluded it was not other-than-temporarily impaired but will continue to reassess the investment.

ADM accounts for qualifying Section 45Z clean-fuel credits as government grants when fuel is produced and sold and eligibility is probable, recording benefits and related transaction costs in cost of products sold. H1 dividends were $1.04 per share versus $1.02. Receivables-sale programs had $2.2B of transferred and derecognized receivables outstanding at June 30; first-half receivables sold were $24.2B versus $22.7B. Supplier Payable Program obligations rose to $427M from $301M at year-end.

ADM faces unresolved commercial, securities and derivative litigation. Plaintiffs in ethanol-derivatives-related class actions alleged damages of approximately $500M to more than $2.0B; some cases were dismissed with prejudice, while an appeal and other proceedings remain. In securities and derivative suits related in part to the intersegment-sales investigation, ADM cannot predict outcomes or estimate reasonably possible losses.

ADM — Q2 and first half of 2026

Consolidated results

Q2 revenue grew $1.515B, largely from higher selling prices for oils, soybeans and biodiesel in Ag Services and Oilseeds; higher prices added $2.0B, partly offset by $356M of lower corn and soybean sales volumes. H1 revenue rose $1.830B: $2.9B of higher selling prices in Ag Services and Oilseeds more than offset $918M of lower corn, biodiesel and soybean volumes. Because commodity prices can lift both merchandising revenue and product costs, margins are more informative than revenue alone.

Q2 gross profit increased $565M (41%); the H1 increase was $607M (24%). Higher commodity and freight costs contributed to higher product costs in both periods. Manufacturing expenses rose $109M to $2.0B in Q2 and $150M to $4.0B in H1, reflecting North American energy, maintenance and compensation costs. SG&A increased $115M to $1.0B in Q2 and $144M to $2.0B in H1.

GAAP earnings benefited from a difficult prior-year comparison: Q2 2025 included $324M of impairment, exit, restructuring and revaluation losses; H1 2025 included $362M of such costs and losses. Q2 interest and investment income was $116M, up $186M, in part because the prior-year quarter included $187M of revaluation losses. H1 interest and investment income rose $173M to $241M. Income tax expense was $176M in Q2 and $257M in H1; effective rates declined to 16.2% and 17.5%, respectively, mainly reflecting non-taxable Section 45Z benefits and tax effects of prior-year impairments.

Q2 segment results

All three reportable segments improved their operating profit in Q2 and H1. Ag Services and Oilseeds benefited from improved crush margins, execution, trading and freight margins, and higher utilization; Q2 processed oilseeds volume rose to 9.477M metric tons from 9.051M, while processed corn volume was 4.736M versus 4.614M. However, Q2 segment profit included about $100M of net positive mark-to-market and timing impacts, mainly in Crushing. H1 results included about $200M of net negative mark-to-market and timing impacts attributable to Refined Products and Other and Crushing. Crushing also benefited from favorable U.S. biofuel policy, soybean meal sales and $20M of Decatur East insurance proceeds. Wilmar earnings declined.

Carbohydrate Solutions’ Q2 profit rose 22%, supported by stronger ethanol margins and policy incentives; H1 profit was $767M versus $576M. Nutrition’s Q2 profit rose 51%; H1 profit was $307M versus $210M. Human Nutrition benefited from Flavors sales and margins, foreign-exchange gains and Decatur East recovery. Animal Nutrition benefited from portfolio actions and cost optimization. Nutrition revenue was pressured by lower volumes associated with portfolio actions and the Akralos joint venture; the prior year had included a $55M contract-cancellation benefit.

H1 segment-profit reconciliation

Cash flow, liquidity and commitments

Lower operating cash flow chiefly reflected working-capital movements: inventory was a $298M outflow versus a $2.2B inflow, trade receivables a $379M outflow versus a $197M inflow, and segregated investments a $177M outflow versus a $1.3B inflow. Other current assets used $549M versus $41M, partly due to derivative valuation changes and unmonetized Section 45Z credits. Financing outflows included $389M of net short-term credit repayments versus $1.1B; ADM repurchased no shares in Q2 or H1, with $115M remaining under its repurchase program.

At June 30, shareholders’ equity was $23.6B and cash and cash equivalents were $1.1B, including $374M held by foreign subsidiaries and considered indefinitely reinvested. Available liquidity was $11.1B. Credit lines, including receivables securitization programs, totaled $12.6B, of which $10.0B was unused; commercial paper outstanding was $30M. ADM expects cash, cash flows and unused lines to cover liquidity needs for at least 12 months, while noting its reliance on credit-market access for working capital and capital expenditures. Purchase obligations were $16.2B, up from $13.8B at December 31, 2025; $13.5B was expected to be paid within 12 months.

Strategy and risks

ADM launched Two Rivers Premium Oils, a cottonseed joint venture with Planters, in January 2026, and Akralos, a North American animal-feed joint venture with Alltech, in March. Targeted cost optimization and portfolio simplification are expected to generate more than $500M of aggregate savings over three to five years, starting in 2025. Priorities include manufacturing efficiency, digitalization and AI, advanced nutrition, functional health, biosolutions, precision fermentation and decarbonization.

Proposed Section 45Z regulations and higher 2026–27 Renewable Volume Obligations supported biofuel and crush economics, but results remain exposed to policy implementation and credit-value changes. ADM is also monitoring tariff, USMCA, geopolitical, weather, crop, freight, energy, demand and commodity-market risks. The February 2026 Supreme Court ruling invalidated IEEPA-based tariffs and CBP began processing refunds in Q2, but neither a refund mechanism nor outcome is assured.

Item 3 — Quantitative and Qualitative Disclosures About Market Risk

ADM is exposed to potential losses from adverse movements in commodity prices affecting its net commodity position, foreign-exchange rates, equity prices, and interest rates. For details on market-risk-sensitive instruments and positions, the company refers readers to Item 7A of its 2025 Form 10-K.

Item 4 — Controls and Procedures

As of June 30, 2026, ADM’s CEO and CFO concluded that the company’s disclosure controls and procedures were effective. No changes in internal control over financial reporting during Q2 2026 materially affected, or were reasonably likely to materially affect, those controls.

The section refers readers to ADM’s Form 10-K for the year ended December 31, 2025, for the risk factors to consider. It identifies no new or changed risks.

For Q2 2026, no ADM director or officer adopted, modified, or terminated a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement. This section reported no financial results or other business developments.