Vylor Inc. (VYLR) Earnings Call Transcript

Hello, everyone. Thank you for joining us, and welcome to the Vylor Third Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Kim Booth, Head of Investor Relations. Please go ahead.

Good morning, and welcome to Vylor's Third Quarter 2026 Earnings Conference Call. Our prepared remarks today will be led by Chuck Magro, Chief Executive Officer; and David Johnson, Chief Financial Officer. Additionally, Judd O'Connor, Chief Commercial and Operations Officer, will join the Q&A session. We have prepared presentation points to supplement our remarks during this call, which are posted on the Investor Relations section of the Vylor website and through the link to our webcast. During this call, we will make forward-looking statements which are our expectations about the future. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Our actual results could materially differ from these statements due to these risks and uncertainties including, but not limited to, those discussed on this call and in the Risk Factors section of our registration statement on Form 10 and reports filed with the SEC. We do not undertake any duty to update any forward-looking statements, except as required by applicable law. As we completed the separation on October 1, Vylor's Form 10-Q for the period ended September 30, 2026, will reflect the consolidated financial results of Corteva, Inc. Today's presentation will focus on Vylor as a stand-alone company on an adjusted pro forma basis. We will be making references to certain non-GAAP financial measures during this call. As used in today's discussion, net sales means pro forma net sales. EBITDA means adjusted pro forma operating EBITDA, EBITDA margin means adjusted pro forma operating EBITDA margin and operating EPS means adjusted pro forma operating EPS. Further information regarding Vylor's pro forma financial information, management adjustments and reconciliations of the non-GAAP measures can be found in our earnings press release and related schedules, along with our supplemental financial summary slide deck available on our Investor Relations website. It's now my pleasure to turn the call over to Chuck.

Thanks, Kim. Good morning, everyone. On October 1, Vylor began operating as an independent public company. We moved quickly from completing the separation to executing as a stand-alone company and I want to start by thanking our employees around the world. They completed a transaction of significant complexity on time and under budget, while continuing to serve our customers and run the business with discipline. We entered this new chapter with strong year-to-date performance, a clear strategy and confidence in both our near-term commitments and our longer-term opportunities. As a pure play, Vylor has a sharper strategic focus, faster decision-making and clear accountability. We can now align the full organization and our capital allocation around a highly specialized model, an advanced global [indiscernible] genetics platform built on elite germplasm, innovation and intellectual property. We also began this new chapter from a position of strength. From 2020 through 2025 as part of Corteva, the same business unit more than doubled in EBITDA and expanded EBITDA margin by more than 1,000 basis points. We launched more than 1,700 products and improved our net licensing position by more than $550 million. That track record is important because the strategy we presented at Investor Day is not dependent on reinventing Vylor. It is about extending the strength and capabilities we already have and monetizing them more broadly and efficiently. Of course, we are very focused on closing out 2026 strong and delivering on the commitments we've made for the year. So let me now turn to our third quarter and full year performance. Q3 is seasonally our smallest quarter. In fact, we lose money most of the time because most farmers are in the field rather than making seed purchase decisions. As a result, quarterly comparisons can either be affected by weather and the timing of shipments. And that's exactly what happened this year. We also made deliberate strategic changes to our Brazil soybean through the market as we continue to ramp up our licensing business. David will discuss this in more detail, but the net effect will be less volume in Q3, but more price and more importantly, more margin, which will come in Q4. When I look at the first 9 months of the year, we've had another strong year so far. Through 9 months, revenue is growing, EBITDA is growing faster than revenue, margins are expanding and royalty economics are improving. That reflects strong demand for our technology, price for value execution and productivity. Importantly, these results support our expectation that fourth quarter performance. We'll complete the year as planned, and that Vylor remains on track to deliver its full year 2026 revenue and EBITDA commitments. For the full year, we expect revenue to increase approximately 3% to about $10.4 billion. We expect operating EBITDA to increase approximately 10% to $2.8 billion, with EBITDA margin expansion of about 100 basis points to roughly 27%. This is consistent with the full year outlook reflected in the financial framework we shared at Investor Day. [indiscernible] earnings growth was being driven by the same levers at the center of Vylor's investment thesis, price for value, a growing royalty business, controlling our controllables and a more attractive portfolio mix. For example, royalty income is expected to increase by more than $100 million, supported primarily by Brazil saving licensing change in North American corn. We continue to manage the realities of operating a global ag business, including weather across several geographies, market conditions in Latin America and elevated freight and energy-related costs. What gives us confidence that our underlying execution remains strong and the controllable elements of the business continue to perform. Now a few early high-level comments on 2027. We anticipate another strong year of growth driven by pricing for value of our technology and incremental licensing gains. This is expected to be against the backdrop of a relatively stable global acreage environment. We should see more planned area in Europe and APAC as weather patterns normalize. It's still early, but our current thinking is that we could see normalized corn and soybean planting in the U.S. next year due to a host of reasons including farmer economics and weather. At the same time, Brazil should continue to expand, particularly in corn, supported by growing domestic ethanol demand. Overall, we view this as a neutral to constructive mix for Vylor. As usual, we will provide formal 2027 guidance on our Q4 earnings call in February. Specific to Vylor, two milestones, I'm particularly excited about for next year, are the launch of our first hybrid wheat product and our entry into the high-value triple-stack corn licensing market in North America. Although it will take some time to ramp up supply in both of these areas, both demonstrate the increasing value of our technology and represent important steps in expanding our addressable market. Before handing the call over to David, A few final comments on our technology pipeline and what's to come. At our September Investor Day, we laid out a clear path for Vylor's next phase of growth. Build on our leading [indiscernible] soybean franchise, expand the value we capture through licensing and bring industry-leading innovation to the market, including hybrid wheat and our next generation of technologies. We have 12 new technology platforms advancing over the next decade, more than ever, creating a significant runway for innovation and growth. Together with these growth factors underpinning our 2027 through 2029 financial framework and our expectation that earnings will grow faster than sales. longer-term opportunities in areas such as gene editing and biofuels provide additional upside beyond the framework. Going forward, we plan to give investors greater visibility into that pipeline by regularly reporting progress against key development, regulatory and commercialization milestones as each platform moves closer to market. For farmers, innovations like these will be increasingly important reducing more from every acre, while managing variable growing conditions. Our job now is clear: serve our customers, deliver innovation that creates measurable value for farmers, maintaining discipline on cost and capital and consistently translate our technology leadership into earnings growth, cash generation and long-term shareholder value. We laid out that road map at Investor Day. Our year-to-date results reinforce our confidence in it. And as a stand-alone Vylor, we are just getting started. David, over to you.

Thanks, Chuck. Welcome, everyone, to the call. Let's start on Slide 8, which provides the financial results of the first half, third quarter and year-to-date period. Briefly touching on the third quarter, which is our smallest quarter. Net sales were $938 million, down 1% from prior year, while organic sales were down 3%. Price/mix gains were driven by increased licensing income and continued value capture for our technology, while volumes declined due to timing whether in the transition of our Brazil soybean business to a license model. As a result, third quarter operating EBITDA was a loss of $269 million down 33% versus prior year. Focusing on year-to-date, net sales increased 4% to $8.5 billion due to strong market demand in North America and continued value capture for our technology across all regions, partially offset by weather-related reductions in corn acres and the Brazil soybean licensing transition. Year-to-date operating EBITDA was about [ $2.7 billion ], up 8% versus prior year. Operating EBITDA margin of 31.2% expanded about 130 basis points reflected the growing benefits from net licensing, execution on our price for value strategy and productivity actions. In the Americas, margin expansion reflected the growing benefits from net licensing, our price for value strategy, lower commodity costs and ongoing productivity. This was partially offset by higher fragrant warehousing costs, higher SG&A, including legal fees on a favorable settlement and higher IT costs. Across the rest of the world, margin contraction reflected weather-related volume pressure, higher freight duty and other production costs as well as higher selling expenses, partially offset by price/mix execution and benefits from net licensing. As a reminder, corporate costs and R&D are managed at a global level and are, therefore, reflected as reconciling items to consolidated Viola operating EBITDA. Overall, the first 9 months demonstrated resilience of the portfolio and our ability to expand earnings quality through licensing, productivity and disciplined execution. Turning to Slide 9. It is important to look through the seasonality of the third quarter and focus on the underlying performance of the business. As I mentioned, third quarter net sales were down 1%, with price and mix up 6%, the volumes down 9%. Price/mix, excluding licensing income was up 3%. These volume declines reflect 3 primary factors: first, favorable early spring weather in North America, shifted soybean seed sales into the second quarter, paying a difficult third quarter comparison. Second, historic drop in EMEA and delayed rainfall in Asia Pacific affected plan in area. Third, as we mentioned previously, we deliberately moved away from lower-margin branded seed sales towards a more profitable and capital-efficient licensing model in Brazil soybeans. The shift reduces reported revenue and volume by about $50 million in the third quarter, we moved the majority of income recognition into the fourth quarter, where it will be reported as part of price and mix. Importantly, our licensing model carries substantially lower cost, improved margins and allows Conkesta to reach a much larger acreage opportunity to [indiscernible] and third-party germplasm providers. On average, our margins are 3x higher in our licensing business in Brazil than our traditional branded business. So while this transition creates a near-term headwind to reported volume, it is a meaningful long-term benefit to our earnings quality. These volume declines were partially offset by higher demand in Argentina and Brazil summer corn. Overall, the third quarter variability is largely a function of timing, weather and our intentional licensing transition. We expect stronger licensing income and improved margins in the fourth quarter and our full year outlook remains intact. Turning to Slide 10. This bridge summarizes the drivers of our year-to-date operating EBITDA. Operating EBITDA was up about $200 million to just over $2.66 billion. Price/mix contributed about $190 million, driven by continued demand for our leading technology across all regions and disciplined execution on Vylor capture. [indiscernible] was roughly a [ $50 million ] headwind, primarily reflecting lower corn acreage across rest of the world due to historic drought as well as El Nino impact in Asia Pacific. This was partially offset by higher soybean acres in North America. Net licensing contributed about $150 million driven by corn and soybean benefits across both licensing income and expense. We crossed an important milestone in the quarter, moving into a net out-licensing position. That represents an inflection point for Vylor and an early proof point in the licensing growth opportunities we outlined at Investor Day. Net cost and productivity contributed roughly $30 million, including approximately $55 million of productivity savings, partially offset by higher freight and warehousing and other production costs. Investments in R&D increased by about $50 million as we continue to target reinvesting roughly 10% of sales into our future growth. We also had about $60 million headwind from SG&A, as I already mentioned. Overall, we're continuing to demonstrate that disciplined execution and technology leadership can drive meaningful earnings growth even in a dynamic macro environment as evidenced by our 8% growth in operating EBITDA year-over-year. Let's turn to Slide 11. Based on our strong performance in the first 9 months and our expectations for the fourth quarter, we are reaffirming our full year 2026 guide that we provided at our Investor Day. We continue to expect approximately $10.4 billion of net sales or roughly 3% growth versus prior year, supported by broad-based organic growth and the incremental benefit of controllable levers. Operating EBITDA is expected to be approximately $2.8 billion, representing about 10% growth with operating EBITDA margin of approximately 27%. Our outlook continues to be supported by price and mix, net licensing and productivity, which are driving both earnings growth and margin expansion. We've included the full year operating EBITDA bridge in the appendix for additional detail on those drivers. We expect operating EPS of $2.25 to $2.35, representing approximately 5% growth at the midpoint. EBITDA growth is expected to be partially offset by higher exchange losses, taxes and net interest expense, which I will discuss more in a minute. As we've previously discussed, our full year free cash flow conversion will be impacted by several onetime items, including the [indiscernible] agreement earlier this year and onetime separation actions. Absent these items, we would expect full year free cash flow conversion to be in line with our midterm target discussed at our Investor Day in September. Overall, our reaffirmed guidance reflects strong year-to-date performance and confidence in our expectations for the fourth quarter. Turning to Slide 12, which provides additional modeling assumptions for EPS for the full year. I'd like to briefly discuss some of these expectations that might look a little different than what you're used to. The 24% to 26% base tax rate range is above historical Corteva levels, reflecting Vylor's stand-alone geographic mix of earnings, which is heavier in the Americas. We believe this range provides the appropriate starting point for modeling Vylor on a go-forward basis. We also expect interest expense to be higher in 2027 as the 2026 outlook captures only a partial year of interest on the separation-related debt compared with full year impact next year. With respect to ETL, our full year 2026 operating EPS includes an approximately $0.20 headwind from exchange gains and losses that do not fully reflect Vylor as a stand-alone business. In the first half of the year, the balance sheet hedging program covered all Corteva. Because of the separation's reverse spin treatment for SEC reporting purposes, all [indiscernible] gains and loss stay with Vylor while the exchange gains and losses on the underlying crop protection exposures were removed from our pro forma results. That creates a mismatch particularly because the program exposures this year were weighted heavily towards crop protection. Looking ahead to 2027, we expect EDL to normalize. Moving to Slide 13. Our reaffirmed 2026 outlook provides a strong starting point for the financial framework we presented at Investor Day. For 2027 through 2029, we continue to target annual net sales growth of 3% to 4%, driven by continued trade penetration, new product launches and our price for value strategy across a resilient global portfolio. We expect fairly ratable annual operating EBITDA growth of 7% to 8% across the 3 years, nearly twice the rate of top line growth. That earnings compounding is expected to be fueled by higher margin licensing expansion, ongoing productivity to offset inflation and a richer portfolio mix. By 2029, we are targeting an operating EBITDA margin of approximately 30% at the midpoint, representing roughly 300 basis points of structural expansion from our 2026 guidance. We also continue to target average free cash flow conversion of approximately 60%, about $1 billion of annual share repurchases, excluding significant M&A and a modestly growing dividend. The framework reflects the earnings quality we expect from our royalty advanced technology portfolio, disciplined capital allocation and a sharper focus on the highest return opportunities for Vylor. Let me close with some key takeaways on Slide 14. First, we completed the separation on time and under budget, allowing us to begin stand-alone operations from a position of financial strength. Second, we delivered strong year-to-date execution across both Americas and Rest of the World, navigating weather challenges through commercial discipline and value-based pricing. Third, improvements in net licensing and the disciplined execution of our controllable actions translate into meaningful margin expansion. And finally, our reaffirmed 2026 guidance reflects sustainable operational momentum and full confidence in our fourth quarter delivery. Taking a step back, our 2026 outlook supports the 2029 financial framework we laid out at Investor Day, including durable above-market earnings growth, structural margin expansion and strong cash generation. With that, let me turn the call back over to Kim.

Thanks, David. Now let's move on to your questions. I would like to remind you that our cautions on forward-looking statements and non-GAAP measures apply to both our prepared remarks and the following Q&A. Operator, please provide the Q&A instructions.

[Operator Instructions] Your first question comes from the line of Chris Parkinson from Wolfe Research.

Great. Just want to go over some of the stuff on the net licensee fees. You've increased your guide to 180, which I think was the legacy versus 130. And that, by my simple calculation gets you to a plus 60 for the year. So kind of passing that net neutral to benchmark. Two simple questions. Is that generally Conkesta as I think about the second half of 2026? Is there anything else that's well exceeding our expectations as it applies to 4Q and order books there? And then is this -- is there something else to me that implies that the $200 million improvement, the '26 to '29 targets at your CMD are kind of appearing pretty conservative at this point. Is that a fair assessment? Or how should we be thinking about that?

Maybe I'll start and I'll give you the the situation and then answer your question, but maybe Judd can just talk about licensing contracting because we're actually in contracting season right now. So look, you know this, I think, but I think that licensing is the largest near-term opportunity Vylor has to create value. And we finally are unencumbered in that and we have access to some of the best technology to move to our licensees. And you're absolutely right. We hit a milestone this third quarter where we're finally royalty neutral after 7 years and something like $700 million in the whole. And we will close the year out a little better than we thought and we're saying approximately $60 million positive. So your $180 million number is right. Please remember that what we're trying to do is deliver $1 billion in net royalty income by 2035. So the 3-year framework that we've laid out just in September would be approximately another 100 a year of income. Now to your question on what's the driver, it's multiple fold. So it's not 1 market. We are seeing better trade penetration in Brazil through Conkesta and we went over that 10% mark now. We're probably -- we have to wait and see when we add it all up, but certainly well over the 10%, probably closer to 12%. But we're also seeing very strong demand for corn in the U.S., both germplasm and [indiscernible] technology, the problem that we've got right now is we are supply limited. And so we're producing as much as we can. But as you know, this is a brand-new ramp-up for us. most of this journey has been soybean-based and now we're able to do this with corn, but we are seeing very strong demand for corn. And maybe, Judd, just give some color on the contracting this year.

Yes. No, very good. Thanks for the question, Chris. Chuck covered the most of it quite well. When you look at North America corn, we've nearly doubled what we did from '25 and '26. And the current production that licensees have in the ground would allow us to push another 40% or 50% growth going into 2027. So we feel extremely good about that. Chuck already talked about Conkesta E3, the trade from an insect control standpoint has performed extremely well. And you'll start to see us come with proprietary germplasm in a really robust way as we've got some very, very good performing germplasm that's come through the pipeline in Brazil. So feel very optimistic about where we're going to be in '27 and certainly everything that we have in the 3-year framework through '29, we feel like we're in a strong position.

Your next question comes from the line of Vincent Andrews from Morgan Stanley.

Chuck, wondering if you could assess for us the Brazilian operating environment, particularly as it relates to El Nino and your expectation is probably maybe more importantly for the safrina corn crop, which I know is important. And in particular, the pace of planting for the first crop has been fast. It still obviously all need a risk out there, but do you see your order book for the safrina crop shaping up well despite the online uncertainty? And then any early indications you have on the North American order book, particularly given the recent volatility in corn and soy prices would be helpful.

Yes. So I'll take the question, Vincent, and I'll let Judd -- Judd was just there last week in Brazil and Latin America, but let me give you sort of how we're thinking about things. So you're absolutely right. We don't usually talk a lot about weather. But if you think about what happened in 2026 with El Nino being generationally unprecedented is what we're told and extreme drought in Europe and then delayed monsoons in India, it goes just around and around. We did see volume impacts in our portfolio around the world. And so where we're most cautious right now to finish out the year, the guide that we gave, which was the $2.8 billion, we need to see a good safrina planting. And early indications are we're going to see it. And maybe, Judd, I should just turn it over to you right now because you were there last week assessing the situation.

Yes, Vincent, you're correct. The summer corn crop went in the ground extremely well. Soybean crop, maybe even more importantly, is gone in the ground quickly on time and looks good in terms of how it's progressing right now. And that soybean crop is really what sets us up for Safrina. When the crop goes in early, it comes off early, and it gives us a nice window to put safrina in the ground. Currently, within our plan, we're looking at roughly flattish to premia acres, but we're certainly set up to see that potentially expand going forward. So I feel really good about where we are. Our order books are solid. As you know, we've got credit and interest rate challenges that are -- that the Brazilian farmers are dealing with right now, but our BARDA program is strong. We see it continuing to be in a position to expand to help support that. So feel really good about where we're going into from a [indiscernible] crop. From a North America perspective, if you look at what we know today, our Brevant business has continued to grow at an exponentially fast pace. We had a really strong year another strong year '25 and '26 is no different. So we see that evolved footprint and share position continue to expand retail. The portfolio looks good and retail likes what we're doing in terms of how we're working with them. Pioneer has done well, both in corn and soy. On the soy side, both in the Eastern and Western Corn Belt. We saw some nice share gains. We gave some back in the South. Be the first one to say, we did give some share back in the South, where we've got very, very high [indiscernible] pressure with both soy and cotton in that market. So from a set up for 2027 from North America, share position is strong. We've got a really good product portfolio coming through in terms of mix for 2027 and feel good about where we sit today.

Your next question comes from the line of David Begleiter from [ Deutsche Bank ].

Chuck, just following up on the last share question. Do you have final share numbers for corn and soybeans in the U.S. totality? And again, early thoughts on '27 share in soybeans to expect in total to be neutral or maybe give up a little bit, especially in the South.

Yes. So the answer is we don't have final numbers yet. We'll need to add it up as we close out the year. But here's how we are sizing and I think Judd did a pretty good job, but I'll use my words and recap it. So overall, we're very pleased, right? We enjoy U.S. market leadership in both corn and soybeans and then corn in Brazil, and we're highly focused on Brazil soy now with Conkesta and we're seeing gains there. So when I look at it from what we can tell right now in corn, the U.S. corn share is probably up a little bit in 2026, really driven by Brevant growth, which Judd covered. In Brazil, we grew our corn share as well, once again, another year of growth. When we look at corn Rest of World, this is where the weather impacts are most likely going to distort the numbers. So I'm not sure we're going to have actually very good data for 2026 because of the reduced planted area. So we'll have to look at that with a careful set of eyes. But really, just to be candid with you, the major driver for our corn share in the future is going to be licensing, especially when we start adding the germplasm and the trade penetration that we're going to have. Judd just said that we, in essence, doubled our corn licensing and we're going to be up again in 2027. So that's really the focus area for us to drive corn share. And soy, I'd say right now, the Enlist market share is still in that 65-ish percent range. We gained in the key Midwest and Eastern corn belt. We probably, as Judd said, lost a little bit in the South. And then for us, really, the focus area is the trade share in Brazil, and we've crossed over that 10% threshold and we see continued demand for that. So overall, I'd say our share is steady to growing in the areas that we're focused on strategically.

Your next question comes from the line of Joel Jackson from BMO Capital Markets.

Chuck, I appreciate you gave a bit of color on 2027. Can you talk about for the $3 billion EBITDA number you've given as a placeholder for 2027, maybe what some of the puts and takes are from some of the things you're talking about today. So how does the change in the go-to-market strategy in Brazilian soybean change that number? How does seeing a bit of better licensing revenue in general, change that number perhaps? And then could you also talk about what you're embedding in the $3 billion number for next year and how it might change the corn that's $4, $4.50, $5, $5.50, et cetera.

Yes. Joel, David and I will try to give you some color. But just for the record, we are not giving a guide number in terms of an EBITDA for 2027. We have a lot of farming to do and a lot of sales to do, and we will do that in February at our fourth quarter call. But look, early view of 2027, I think, is constructive. If you look at what we're seeing, we're seeing demand for -- record demand for grains and oilseeds and biofuels. We've got below inventories when it comes to stocks to use literally around the world, significantly well below the 5-year average, and I think we're seeing modestly higher crop pricing. So the general setup for '27 isn't bad. In fact, I'd say it's a little better than most think. And then when you think about our business and the one driver will be planet area, we do expect a rebound in the planet area in Europe and in APAC, given a significant weather headwinds we saw this year. So that will drive volume when you start thinking about that. And then in the U.S., it's really early, but you know that the U.S. planted well over 180 million acres of corn and soybeans in 2026. It was like in the [indiscernible] 83 range, and we think that, that might come down a little bit, but still be one of the highest planted areas for corn and soybeans we've seen in recent memory. So we think that that's constructive for our business as well. And then when you think about our licensing, we've already talked about the $300 million in 2029 framework. So if it's ratable, which we think it is, it's another $100 million of revenue. There will be some offsets with incremental licensing expense because we're growing our business faster and we can have supply, which we've talked about before. And so when I think about the setup, it's pretty constructive. David, over to you now on some of the math potentially.

Yes. So when you look at probably kind of what we're expecting in the next -- I will say in that 3-year period, especially in 2027, I think Chuck hit the -- really constructively on the volume. So we're expecting a little bit more volume than we typically would have in the last 3 years. And again, some of that is due to the expanded acres where we saw some reduction this year. We also expect Bevan to perform well and so on and so forth here in the United States. So I think that's good. We have the ratable revenue for the licensing of about $100 million. It will have a little less impact on the bottom line because as we talked about during our 3-year framework, this is a point in time when we're growing corn, we will have some additional licensing costs. But as you know, that's a setup for even bigger things to come whenever we look beyond our framework. So when you look at kind of the setup, we feel really good going into this year, and we expect to perform well here in the fourth quarter and have good momentum going into 2027.

Your next question comes from the line of Kevin McCarthy from Vertical Research Partners.

Yes. Thank you, David, it looks like you ended the quarter around $4.3 billion of net debt. I was hoping you could kind of step us through the projected cash harvest in the fourth quarter. Obviously, the portfolio today is a little bit different than it was under the Corteva umbrella. So maybe you could just comment on working capital, any extraordinary items and where you would expect to end the year from a net debt perspective.

Yes. And I like the way you put the hardest thing on cash yes. No, we expect -- as you know, in our seed business in Q4 and particularly in December, we have 2 things that happened with our cash. One is we collect our normal receivables typically in the fourth quarter, towards the end of the year and then we have our prepays. As we look at it today, we expect our prepaid percentage to be very much in line with what we've seen in the last couple of years. And for us, that's in the high 60% for us. And so when you add that all together, it's probably a positive $3.5 billion to $4 billion. And so we would expect to end the year financial debt in total probably that $2.5 billion kind of range, and then we'll have a pretty substantial cash balance. So net debt will be slightly net debt -- we will have some slight net debt, but it's certainly going to be less than Q3, which as you know, is probably where our balance sheet looks to worse when you come to commercial paper and all those sort of things.

Your next question comes from the line of Duffy Fischer from Goldman Sachs.

Question just around the triple stack and the corn licensing opportunity. So roughly how much does that contribute from now to your 2029 goal? And I guess, importantly, how will that change the revenue recognition by quarter, just like we're seeing a change in Brazil with soybeans as that licensing business changes in corn, does that change when you guys will recognize revenue and when profit runs through the P&L?

So let me take a kick at this and then David can kind of talk about the revenue rec items there probably is going to be a little bit of a shift because of when we recognize licensing revenue and income. But look, [indiscernible] is going to be -- it's ramping up now. If you recall, it was tied to the situation we had in February with the settlement, and we didn't have freedom to operate and then with that settlement that we constructed, we had -- we been able to pull the triples 5 years earlier. And so now we're in complete ramp-up mode. So the impact actually over the next 3 years will be relatively small compared to other parts of the corn portfolio, which would be the doubles. And that's the reference that Judd already gave you, it is that we're seeing very strong demand for that. Now the order book for chrome licensing, that's the triples, is very strong. The question that we've got to work through is how much supply and volume can we put into the hands of those licensees who are in desperate need to get it. And that's where it's going to take us some time because this is the first year of production. So normal course is that it takes a few years before we'll have sort of commercial scale volumes to be -- really be able to move the market. But it will have an impact, David, in the '28-'29 time frame, but very small in '27 and then maybe revenue rec, David.