Mission Produce Q2 2025 slides: record revenue amid pricing surge, profit margins compress

Introduction & Market Context

Mission Produce Inc (NASDAQ:AVO) reported record second-quarter revenue for fiscal 2025, driven primarily by robust avocado pricing amid Mexican supply constraints. According to the company’s Q2 presentation delivered on June 5, 2025, the global produce distributor leveraged its diversified sourcing network to navigate seasonal challenges while satisfying customer commitments.

The company’s stock closed at $12.14 on June 12, reflecting a 5.38% gain, though premarket trading on June 13 showed a 3.62% decline. With a market capitalization of approximately $746 million, Mission Produce continues to position itself as a leading player in the global avocado market while expanding its presence in complementary produce categories.

Quarterly Performance Highlights

Mission Produce achieved total revenue of $380.3 million in Q2 2025, representing a substantial 28% year-over-year increase. This growth was primarily driven by a 26% rise in average selling price to $2.00 per pound, offsetting a slight 1% decrease in avocado volume sold (166.4 million pounds). However, adjusted EBITDA declined by 5% year-over-year to $19.1 million, indicating some margin compression despite the revenue gains.

As shown in the following financial snapshot from the company’s presentation:

The company’s diversification strategy delivered promising results across multiple segments during the quarter. The mango business achieved record volumes and gained significant market share, while the blueberry segment posted impressive 57% revenue growth. Additionally, the International Farming division saw its adjusted EBITDA turn positive, reflecting improved utilization and operational efficiencies.

Detailed Financial Analysis

A closer examination of Mission Produce’s financial performance reveals a more nuanced picture behind the record revenue figures. Net income for the three months ended April 30, 2025, was $3.0 million, down from $7.0 million in the same period last year. This decline occurred despite the substantial revenue increase, suggesting higher costs and operational challenges.

The reconciliation of non-GAAP financial measures provides additional context:

Notable items in the reconciliation include:

• Interest expense decreased from $3.4 million to $2.5 million year-over-year
• Provision for income taxes declined from $3.4 million to $1.7 million
• Depreciation and amortization increased from $5.7 million to $7.0 million
• Losses on asset impairment and disposals rose significantly from $0.2 million to $1.7 million

These figures align with the earnings report, which noted that despite the revenue growth, gross profit decreased slightly to $28.4 million from $31.0 million in the prior year. The adjusted net income for the quarter was $8.7 million, or $0.12 per diluted share.

Strategic Initiatives

Mission Produce’s presentation highlighted its global sourcing strategy as a key competitive advantage. The company’s ability to source avocados from multiple regions helps mitigate supply risks and maintain consistent availability throughout the year.

The following chart from the presentation illustrates the company’s global avocado sourcing calendar:

This diversified sourcing approach is particularly valuable given the seasonal nature of avocado production across different regions. While Mexico remains the dominant supplier throughout most of the year, Peru’s production peaks during summer months, providing an important alternative source when Mexican supplies typically decline.

Beyond geographic diversification, Mission Produce has strategically expanded its product portfolio. According to the earnings report, the company has established itself as the second-largest mango distributor in the United States. This product diversification strategy appears to be yielding positive results, with record mango volumes and substantial growth in the blueberry segment during Q2.

Forward-Looking Statements

Looking ahead, Mission Produce expressed optimism about its second-half prospects. The company anticipates strong cash generation in the latter half of fiscal 2025, supported by increased Peruvian supply coming online to meet continued strong demand for avocados.

The presentation noted that the company is well-positioned to leverage its global sourcing network, particularly as Peruvian production ramps up. This strategic positioning could help Mission Produce navigate ongoing supply challenges while capitalizing on strong consumer demand.

According to the earnings report, the company maintained its full-year capital expenditure guidance between $50 million and $55 million, suggesting continued investment in growth initiatives. Analysts maintain a bullish outlook on Mission Produce, with price targets ranging from $16 to $18, indicating potential upside from current trading levels.

While the company faces challenges including supply chain disruptions, potential market saturation, and macroeconomic pressures affecting consumer spending, its diversification strategy and global sourcing capabilities provide some resilience against these headwinds. As CEO Steve Barnard noted in the earnings call, "Our diversification strategy is delivering exactly what we designed it to do," highlighting the strategic benefits of expanding their product portfolio beyond their core avocado business.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.