Earnings call transcript: Boa Safra Sementes posts Q2 2026 miss, shares jump

In Brazil's seed industry, Boa Safra Sementes reported a loss and lower revenue than expected for the second quarter of 2026. However, investors focused on the company's improved margins, reduced working capital, and optimistic outlook for the second half. Boa Safra's earnings per share (EPS) came in at -0.169, well below the forecasted -0.1065, a 58.7% miss.

Meanwhile, revenue was 125 million, 17.9% below the 152.24 million consensus estimate. Despite the miss, the stock surged 19.28% to $6 from $5.03, nearing its 52-week range. Management attributed this growth to restructuring, efficiency gains, and a stronger second-half outlook, with record backlog and better pricing conditions.

Q2 typically sees weaker soybean seed sales, but the company is entering the main selling season with a backlog and improved pricing. The Brazilian seed market is becoming more rational, with competitors reducing volumes and tightening working capital, which has supported pricing. Investors appear to have looked past the miss due to the company's progress in profitability and cash generation.

The company expects new crop revenue to exceed 14% of total revenue by year-end and aims to restore historical margins through better quality, lower losses, and a more favorable pricing environment. Boa Safra is continuing to invest in growth, with capex totaling BRL 150 million for new partnerships and upgrades. Management is optimistic about the company's return to profitability in 2026 and beyond, citing better results in the second half of the year.