CHS Inc. Q1 2026 Financial Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended November 30, 2025 (Fiscal Q1 2026) for CHS Inc., a Minnesota cooperative corporation. Effective September 1, 2025, the company implemented a new product-line operating model, recasting prior period segment data to align with three reportable segments: Energy, Grains, and Agronomy, plus Corporate and Services.
Key Financial Metrics
| Metric (in thousands) | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenues | $8,864,104 | $9,294,112 |
| Gross Profit | $389,352 | $400,676 |
| Operating Earnings | $121,232 | $137,826 |
| Net Income | $260,457 | $245,593 |
| Net Income Attributable to CHS Inc. | $260,483 | $244,790 |
| Income Before Income Taxes (IBIT) | $272,188 | $258,837 |
| Cash and Cash Equivalents | $374,694 | $327,826 |
| Total Debt (Notes Payable + Long-Term) | $3,689,241 | $2,988,290 |
| Working Capital | $2,931,825 | $2,803,865 |
Note: Total Debt calculated as Notes Payable ($1,859,159) + Long-Term Debt ($1,740,200) + Current Portion of Long-Term Debt ($89,882).
Material Changes vs. Prior Period
- Revenue Decline: Total revenues decreased 4.6% year-over-year, primarily driven by lower commodity selling prices in the Grains segment and reduced volumes in Agronomy.
- Profitability Increase: Despite lower revenues, Net Income increased 6.1% and IBIT increased 5.2%. This was driven by significant improvements in the Energy segment and strong equity income from investments.
- Segment Performance:
- Energy: IBIT surged 868.9% to $152.3 million, fueled by higher crack spreads and record premium diesel sales volumes.
- Grains: IBIT dropped 78.3% to $36.2 million due to lower selling prices for oilseeds/wheat and reduced export volumes.
- Agronomy: IBIT rose 30.9% to $36.8 million, largely due to strong performance from the CF Nitrogen joint venture, offsetting weaker U.S. farm economy volumes.
- Debt Levels: Short-term notes payable increased significantly to $1.86 billion from $1.15 billion to fund working capital needs, leading to a 35.1% increase in interest expense.
Outlook, Risks, and Management Commentary
- Guidance & Trends: Management anticipates continued headwinds in fiscal 2026 due to global economic factors, including geopolitical conflicts (Russia-Ukraine, Middle East), shifting trade flows, and potential tariff changes. Reduced margins for energy and agricultural commodities are expected to persist.
- Capital Allocation: Total capital expenditures for fiscal 2026 are projected at approximately $575.1 million. Major maintenance costs are expected to decrease to $53.3 million compared to $271.4 million in fiscal 2025 due to reduced refinery turnarounds.
- Liquidity: The company maintains a current ratio of 1.4 and is in compliance with all debt covenants. Liquidity is supported by operating cash flows and credit facilities, including a $2.8 billion revolving credit facility and a securitization facility.
- Risks: Key risks include volatility in commodity prices (crude oil, grain, fertilizer), global trade disputes, weather-related crop damage, and the impact of inflation on labor and freight costs.
- Subsequent Events: On December 31, 2025, CHS finalized an agreement to exit its joint venture in Producer Ag with Mid-Kansas Cooperative, receiving working capital in exchange for its equity interest.
Investor Verification Checklist
- Energy Margin Sustainability: Verify if the record crack spreads and diesel volumes in Q1 are sustainable given global supply/demand shifts.
- Grains Segment Recovery: Assess the impact of global trade dynamics and export volumes on the significant decline in Grains IBIT.
- Debt Servicing: Monitor the impact of the increased short-term debt balance on future interest expenses and cash flow.
- CF Nitrogen Performance: Confirm the continued strength of the CF Nitrogen joint venture, which was a primary driver of Agronomy profitability.
- Capital Expenditure Execution: Track progress against the $575.1 million fiscal 2026 capital expenditure plan.