Ag Growth International Inc.

Q4 2025 revenue increased 4% year over year to $396 million. Adjusted EBITDA decreased 38% to approximately $48 million, and adjusted EBITDA margin compressed to 12.2%, down about 830 basis points year over year. Farm segment revenue declined 8% to $123 million; Farm adjusted EBITDA fell 39% to $19.8 million and margin declined to 16% from 24.1%. Commercial segment revenue increased 10% to $273 million; Commercial adjusted EBITDA declined 39% to $33 million and margin compressed to 12% from 21.6%. Full-year free cash flow was negative $111 million, and year-end net debt leverage was 4.7x versus 3.9x quarter over quarter and 3.1x year over year. The order book ended at $543 million, down 26% year over year. Management said the restructuring should drive at least $20 million of annualized SG&A savings, ERP termination should avoid about $20 million of cash cost over the next two years, and Q1 2026 is expected to remain tough with negative free cash flow still likely; they also said they expect to monetize $80 million to $100 million shortly by H1.

Paul Brisebois framed the quarter as a difficult one and said the company is entering a “new era” focused on simplification, customer focus, and debt reduction. He emphasized that the business has become too complex and that management is taking direct action, including cutting layers, reorganizing North America, and ending ERP, to move faster and improve execution. His tone was candid and urgent, but also cautiously optimistic that the changes can restore historical margins over time and improve customer experience by the end of 2026.

James Rudyk highlighted the financial pressure from lower farm volumes, Brazil execution issues, and North American commercial inefficiencies. He said Q4 free cash flow was negative largely because of temporary working capital tied to large Brazilian projects, but management expects cash pressure to ease as receivables are monetized and new financing-heavy projects are halted. He pointed to $7 million of inflows to date from the Brazil monetization vehicle, said the company expects $80 million to $100 million of inflows shortly by H1, and noted the bank syndicate is supportive, covenants are in compliance, and the senior credit facility maturity was extended to 2030.

Analysts pressed management on the Brazil margin problems, the size of one-time or nonrecurring charges, the expected timing of restructuring benefits, and the path back to positive free cash flow. Management said roughly half of the Brazil execution problems were cost overruns and warranty/remediation charges and half were bad debt write-offs, and that these costs were left in operating results rather than adjusted out. On timing, management said the executive team changes are already done, the North American restructuring should be completed within about 30 days, Q1 will still be difficult, and annualized savings should ramp in a way that is roughly $5 million per quarter starting in Q3, though they hope to move faster.