Mission Produce (AVO) Q4 2025: International Farming Sales Surge 97%, Unlocking Global Growth Leverage
Mission Produce capped a defining year with record avocado volumes and a sharp pivot to international expansion, as global sourcing and vertical integration drove segment outperformance. Strategic investments in Europe and Asia, combined with a disciplined capital allocation shift, set the stage for accelerated free cash flow and new category penetration in fiscal 2026. With heavy CapEx behind, management signals both organic and inorganic growth ambitions, leveraging a strengthened balance sheet.
Summary
- International Farming Outperformance: Peruvian orchards and global sourcing delivered segment sales up 97% YoY, validating vertical integration strategy.
- Volume-Centric Model Drives Penetration: Record 691M pounds sold, with European and Asian volumes up sharply amid pricing headwinds.
- Capital Deployment Flexibility Emerges: CapEx cycle winds down, freeing up cash for both organic expansion and potential acquisitions.
Performance Analysis
Mission Produce’s Q4 2025 showcased the power of its integrated platform, with total revenue of $319 million despite a 27% drop in average per-unit avocado prices. The headline number masked a robust 13% volume growth in the quarter, reinforcing the company’s volume-centric business model, which prioritizes expanding pounds sold and per-unit margin control over chasing price-driven revenue swings. The marketing and distribution segment, responsible for the bulk of sales, saw net sales fall 15% but delivered an 11% increase in segment-adjusted EBITDA, demonstrating disciplined execution under volatile market conditions.
The international farming segment was the standout, with sales up 97% and segment EBITDA more than tripling, thanks to normalized Peruvian orchard yields and strategic supply allocation. Blueberry sales rose 16% on higher volumes, though margins compressed as newer acreage entered production and yields lagged. The company’s focus on operational leverage and cost discipline was evident in flat gross profit and a 180 basis point margin expansion to 17.5%, even as SG&A remained tightly managed.
- Global Sourcing Leverage: Increased Mexican and Peruvian supply enabled real-time channel optimization across North America, Europe, and Asia.
- Margin Resilience Amid Price Volatility: Per-unit margin management offset industry-wide price declines, driving record adjusted EBITDA.
- Cash Flow and Balance Sheet Strength: Two-year operating cash flow exceeded $180 million, with net leverage now well below 1x EBITDA.
Mission’s ability to grow volume and maintain profitability in a deflationary environment underpins its competitive positioning for FY26, with additional upside from new category and geographic penetration.
Executive Commentary
"We are a connected global team that can adjust and pivot in real time to seize opportunities, creating a genuine differentiator for our company... The growth we achieved in Europe and Asia this year wasn't a one-time event. It was the result of deliberate investment and execution that we will build upon in future years."
John West, Chief Executive Officer
"Adjusted EBITDA increased 12% to a record $41.4 million compared to $36.9 million last year, driven by increased avocado production in our international farming segment and higher overall volume sold in our marketing and distribution segment."
Brian Woods, Chief Financial Officer and Treasurer
Strategic Positioning
1. Global Platform and Vertical Integration
Mission’s global sourcing network and vertical integration, especially in Peru, provide supply consistency and quality control that competitors struggle to match. This enables proactive allocation of fruit to the highest-value markets and supports deep retailer relationships, particularly in Europe and Asia where volume growth outpaced North America. The company’s ability to program its own fruit across multiple regions is a core differentiator, especially as it relates to weather and supply volatility.
2. Category Expansion and Household Penetration
Avocado household penetration in the U.S. approaches 70%, with management targeting 73-75% in the next two to three years as lower pricing environments historically drive promotional activity and consumer adoption. The mango business is following the avocado playbook, with share up to 5.2% and household penetration now nearing 40%. Blueberries represent a long-term bet on health-driven snacking, with 700 hectares now in production in Peru.
3. Capital Allocation and Free Cash Flow Inflection
The company has exited its heavy CapEx cycle, guiding to $40 million in FY26, split evenly between growth and maintenance. This inflection point frees up capital for shareholder returns, M&A, and organic expansion. Management’s growing comfort with buybacks and a sub-1x leverage ratio signal a willingness to pursue both bolt-on acquisitions and capacity expansion in core and adjacent categories.
4. Data and Commercial Agility
Investments in data and commercial tools are enhancing the company’s ability to make faster, smarter decisions with customers, driving real-time category management and supporting margin resilience. This digital backbone is becoming a competitive asset as Mission seeks to deepen global retailer partnerships and optimize promotional strategies in dynamic markets.
Key Considerations
Mission Produce’s Q4 marks a strategic transition from infrastructure build-out to commercial scaling, with the business now positioned to leverage its global assets for both volume and margin growth.
Key Considerations:
- International Expansion Momentum: European and Asian growth validates management’s multi-year investment thesis and opens new avenues for volume leverage.
- Margin Management in Deflationary Cycles: Per-unit margin discipline will be tested as industry-wide supply increases and pricing remains pressured in FY26.
- Blueberry and Mango Ramp: Success in these categories hinges on yield maturation and the ability to replicate the avocado playbook in consumer engagement and supply consistency.
- Capital Allocation Optionality: Newfound free cash flow enables a mix of organic and inorganic growth, with management weighing bolt-on M&A and share buybacks against expansion in core categories and geographies.
- Data-Driven Commercial Execution: Continued investment in analytics and category management tools will be critical to sustaining outperformance as the market evolves.
Risks
Key risks include agricultural yield variability, especially in new blueberry acreage and Peruvian orchards, as well as exposure to global pricing cycles that can compress per-unit margins. Geopolitical and trade risks—including tariffs and cross-border supply disruptions—could impact sourcing flexibility. Finally, the transition from CapEx-heavy investment to cash deployment introduces execution risk if growth initiatives or M&A fail to deliver anticipated returns.
Forward Outlook
For Q1 2026, Mission Produce guided to:
- 10% YoY increase in avocado industry volumes, driven by a larger Mexican crop
- 25% YoY decline in average avocado pricing, reflecting higher industry supply
For full-year 2026, management expects:
- CapEx of approximately $40 million, with a balanced split between maintenance and growth investments
- Continued cash flow strength and optionality for capital deployment
Management highlighted several factors that will shape FY26:
- Seasonal margin compression in Q1 due to sourcing environment
- Blueberry profitability weighed by lower yields as new acreage matures
- Ongoing focus on maximizing household penetration and category leadership
Takeaways
Mission Produce’s business model is entering a new phase, with infrastructure investments now poised to deliver outsized returns through global volume growth and improved cash conversion.
- International Leverage: The company’s vertical integration and global sourcing are now translating into real market share gains and operational flexibility, particularly in Europe and Asia.
- Cash Flow Inflection: With CapEx stepping down, Mission is positioned to generate meaningful free cash flow, enabling both organic growth and capital returns.
- Next Leg of Growth: Investors should monitor execution in new categories, the pace of household penetration gains, and management’s discipline in capital deployment as the company transitions from building to scaling.
Conclusion
Mission Produce’s Q4 2025 results mark a strategic inflection, as the company leverages its global network and operational discipline to drive international growth and unlock free cash flow. With a strong balance sheet and multiple avenues for expansion, the business is well positioned for the next phase of value creation.
Industry Read-Through
Mission’s results highlight a broader industry trend: vertical integration and global sourcing are becoming essential for produce companies seeking margin stability and growth in a deflationary price environment. The ability to flex supply chains and penetrate new geographies will increasingly separate winners from laggards. For peers in produce and perishable categories, the shift from CapEx-heavy infrastructure build to capital-light scaling and cash generation is a playbook that could reshape capital allocation and competitive dynamics across the sector in the coming years.