Ingredion (NYSE:INGR) executives told investors the company delivered record full-year operating income and earnings-per-share growth in 2025 despite operational disruptions at its largest U.S./Canada facility and softer industry demand for sweeteners. Management said strength in Texture and Healthful Solutions (T&H) and solid profitability in Food and Industrial Ingredients (F&I) LATAM helped offset challenges at the Argo facility in the F&I U.S./Canada segment.
Fourth-quarter performance: volumes mixed, Argo disruptions weighed on results
For the fourth quarter, Ingredion reported net sales of $1.8 billion, down 2% from the prior year. CFO James Gray said the decline was driven by $40 million in lower volume and $39 million in lower price/mix, partially offset by $36 million of favorable foreign exchange. Gross margin was 24.5%, with cost of goods sold affected by higher manufacturing expense in the U.S./Canada food and ingredients business. Reported operating income was $220 million and adjusted operating income was $228 million.
Management estimated the fourth-quarter financial impact of Argo’s operational issues at about $16 million, driven by idle time, yield loss, and incremental maintenance costs. In the Q&A, executives said Argo was the primary driver of the quarterly volume decline, estimating the apportionment at roughly two-thirds to three-quarters Argo-related and the remainder tied to sweetener volume softness.
Full-year 2025: record operating income, margin expansion, and strong cash generation
For the full year, net sales were $7.2 billion, down 3% year over year, driven by $144 million in lower price/mix and $75 million in lower volume, partially offset by $8 million of favorable foreign exchange. Gross margin increased to 25.3% and the company reported operating income of $1.016 billion and adjusted operating income of $1.028 billion. Gray said adjusted diluted EPS rose 4.5% year over year.
Zallie highlighted record gross profit and margin expansion to “over 25%,” which he attributed to portfolio diversification, mix optimization toward higher-value solutions, and operational discipline. He also said Ingredion delivered $59 million of cost-to-compete run-rate savings in 2025, exceeding its previously stated $50 million target, and plans to transition its operational excellence focus toward “long-term enterprise productivity.”
Cash from operations was $944 million in 2025, including $75 million of investment and working capital. Capital expenditures net of disposals were $433 million. Ingredion repurchased $224 million of shares—exceeding the $100 million repurchase target announced at the beginning of the year—and paid $211 million in dividends, raising the quarterly dividend to $0.82 in the third quarter for its 11th consecutive annual dividend increase.
Segment highlights: T&H growth, LATAM margin strength, and U.S./Canada operational headwinds
- Texture and Healthful Solutions: Full-year net sales rose 1% and operating income increased 16%, driving operating income margin to 16.9%, up more than 200 basis points. Gray said the improvement reflected lower raw material/input costs and improved margins and volumes, partially offset by unfavorable price/mix. Management also noted that T&H’s fourth-quarter operating income comparisons were affected by one-time SG&A benefits in the prior-year quarter.
- F&I LATAM: Full-year net sales fell 4%, but operating income rose to $493 million and operating income margin reached a record 21.1%. Zallie said Mexico delivered another record year of operating income and repurposed part of its grind toward higher-margin ingredients. He also cited a Brazil network optimization: closing the Alcântara facility and expanding polyol production at Mogi Guaçu, supported by long-term customer commitments.
- F&I U.S./Canada: Full-year net sales declined 7% and operating income fell 16% to $315 million. Executives pegged Argo’s full-year operating income impact at approximately $40 million and said industry sweetener demand was down in the second half.
- All other: Net sales increased 2% on growth in sugar reduction and protein fortification, while operating loss improved by $20 million, driven mainly by gains in protein fortification.
Management emphasized that T&H clean label volumes grew across Asia-Pacific and U.S./Canada, calling clean label “one of the food industry’s fastest-growing areas.” The company also pointed to a record year for protein fortification, with net sales growth exceeding 40% as Ingredion doubled production and increased average selling price through product innovation. Executives later linked protein fortification momentum to the “GLP-1 effect,” noting the business is “fully contracted for 2026.”
Investments, innovation, and commercial initiatives
Ingredion highlighted several completed and in-progress projects aimed at capacity, cost, and solutions capabilities. In T&H, a starch modernization project at the Indianapolis facility was completed in the fourth quarter, which management said will reduce modified starch production costs through more efficient flows and debottlenecking and will release new capacity. The company also completed an expansion of its Belcamp, Maryland blending center, which management said increases customized solutions revenue potential by $30 million annually.
On innovation, Zallie said Ingredion developed ingredient solutions to help customers replace inputs affected by shortages and rising raw material costs, citing cocoa-replacement solutions with steady sales increases in 2025. He also discussed progress on a sugar reduction taste modulation platform in collaboration with Oobli, and described “Texture Elevation,” a co-creation approach using consumer insights, sensory science, and rapid formulation to deliver preferred textures faster.
In the Q&A, executives offered additional detail on the solutions business, saying it is “just over $1 billion” and represents about 40% of T&H revenue, with gross margins higher than the segment average. Management characterized solutions margins as roughly 5 percentage points higher than the segment overall, and also described solutions as “up, like, 30%-35%” in gross margins versus other parts of the segment.
2026 outlook: modest growth, Argo recovery expected to be gradual
For 2026, Gray guided to net sales up low single digits to mid-single digits and reported and adjusted operating income up low single digits. The company forecast adjusted EPS of $11.00 to $11.80, based on 64–65 million shares outstanding, with financing costs expected to be $40 million to $50 million and an effective tax rate of 25.5% to 27%. Cash from operations is expected to be $820 million to $940 million, with capital expenditures of $400 million to $440 million. Management said guidance reflects tariff levels in effect at the end of January 2026 and excludes acquisition-related integration/restructuring and potential impairment costs.
By segment, Ingredion expects T&H net sales and operating income to rise low single digits to mid-single digits on volume growth; LATAM net sales up low to mid-single digits with operating profit flat to up low single digits, partially offset by foreign currency transactional headwinds in Mexico; and F&I U.S./Canada net sales generally flat with operating income flat as Argo recovers but manufacturing inflation pressures margins. Executives said they anticipate continued Argo challenges through the first quarter and “steady improvement” throughout the year, with potential to regain some Argo-related benefit in the back half of 2026, while cautioning that higher labor and energy costs remain a headwind not fully offset by pricing.
For the first quarter of 2026, management expects net sales down low single digits and operating income down “mid double digits,” citing a tough comparison to first-quarter 2025, when operating income rose 26%.
Ingredion also announced a leadership transition: Gray will retire as CFO on March 31, 2026, and the company has begun a search for his successor.
About Ingredion (NYSE:INGR)
Ingredion Incorporated is a global ingredient solutions company specializing in the production and sale of starches, sweeteners, nutrition ingredients and biomaterials derived primarily from corn and other plant-based raw materials. The company serves a diverse set of industries, including food and beverage, brewing, pharmaceuticals and personal care, providing functional ingredients that enhance texture, stability, flavor and nutritional value in a wide array of end products.
The company’s product portfolio comprises native and modified starches, high-fructose corn syrup, dextrose, maltodextrins, specialty sweeteners and various texturizers.
