管理層發言
My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to today's Gevo, Incorporated Q2 2026 earnings call. I would now like to turn the call over to Eric Frey. Eric.
Good afternoon, everyone. And thank you for joining us on today's call to discuss Gevo's second quarter results. I'm Eric Frey, Vice President of Finance and Strategy at Gevo. With me today, we have Paul Bloom, our Chief Executive Officer, and Leke Agiri, our Chief Financial Officer. We also have Kyle James, our Chief Commercial Officer, and Greg Hanselman, our Executive Vice President of Operations and Engineering. Earlier today we issued a press release that outlines our second quarter 2026 results and some of the topics we plan to discuss. Copies of the press release are available on our website at www.gevo.com. Please be advised that our remarks today, including answers to your questions, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those currently anticipated. Those statements include projections about the timing, development, engineering, financing, and construction of our potential expansion and debottlenecking of our Gevo North Dakota plant, our expected future cash flows and adjusted EBITDA, our expected carbon business revenues, our expected future tax credit monetizations, and other activities described in our filings with the Securities and Exchange Commission, which are incorporated by reference. We disclaim any obligation to update these forward-looking statements. In addition, we may provide certain non-GAAP financial information on this call. The relevant definitions and GAAP reconciliations may be found in our earnings release, which can be found on our website at www.gevo.com in the Investor Relations section. Following the prepared remarks, we'll open the call for questions. I'd like to remind everyone that this conference call is open to the media, and we're providing a simultaneous webcast to the public. A replay of this call and other past events will be available via the company's investor relations page at www.gevo.com. I'd now like to turn the call over to the CEO of Gevo, Paul Bloom. Paul.
Good afternoon, everyone. Gevo is a strong, growing business. Our operating results this quarter demonstrate that our company is set to deliver revenue growth and positive cash flow from operations. Our carbon strategy is working well, and we are positioning the business for three stages of expansion that build on our existing operations and capture near- and medium-term opportunities. Long term, we believe the businesses we are building today will serve as the blueprint for future growth. Our results also demonstrate that Gevo is not just a future story. Revenue increased 7% compared to the last quarter and gross profit increased 70% in the past six months compared to the same period last year. Some of that increase reflects six full months of benefit from the Red Trail assets we acquired instead of five months during the same period last year. The majority of that increase reflects a durable strengthening of our core low-carbon ethanol and renewable natural gas businesses. In the second quarter, our team continued to deliver on critical milestones we've communicated previously. Our debottlenecking activities in our Gevo North Dakota facility remain on target to increase our low-carbon ethanol capacity to 75 million gallons per year by the end of 2026. We also advanced new carbon market pathways, identified new cost efficiencies, and optimized the sale of carbon attributes. As a result, we now expect full-year 2026 non-GAAP adjusted EBITDA of more than $60 million, which is double our previous estimate. These developments are significant, and they reflect a disciplined execution to unlock new revenue opportunities. A particularly important milestone is our recent Canada Clean Fuel Regulations, or CFR, pathway approval for low-carbon ethanol with carbon capture and sequestration, which was granted in the second quarter. This pathway gives Gevo access to a more than 1 billion gallon per year compliance market for our low-carbon ethanol beginning in the third quarter and further diversifies our cash flows internationally. It also gives us another lever to improve returns from our carbon business by directing carbon value to the markets where it is worth the most, whether bundled with our fuels in compliance markets or sold separately in voluntary markets. Importantly, the approval also applies retroactively to credits we banked for low-carbon ethanol sold into Canada beginning in 2025. And we've already sold approximately 17 million of these banked credits to be recognized in the third quarter. Going forward, we believe our carbon business, based on current capacity and market conditions, can deliver over $30 million per year in revenue on a run-rate basis, excluding our banked CFR credit sales. We're not simply producing low-carbon ethanol, co-products, and RNG. Those commodity products are a means to deliver energy that drops into supply chains today while also driving down carbon intensity, producing more efficiently, capturing and storing carbon, and selling high-quality credits into compliance and voluntary carbon markets. And importantly, we believe the carbon business model we are building today will be the same durable model we use in the future for SAF, isobutanol, and other renewable fuels and chemicals powered by our Verity Carbon Accounting Digital Solutions platform. We expect to grow with discipline by scaling the businesses we have today and delivering the products and solutions our customers and markets demand. At Gevo North Dakota, we are focused on growing our low-carbon fuel and carbon businesses through a three-stage plan. First, debottlenecking the plant; second, expanding capacity to double low-carbon ethanol and carbon capture; and third, producing SAF. Stage 1 is our debottlenecking initiative to increase low-carbon ethanol co-products, carbon capture and associated incentive volumes by approximately 10% to 15% by the end of this year. Meaningful progress was made during the second quarter, and we remain on track and on budget to deliver this anticipated extra capacity, thereby enhancing revenues, growing adjusted EBITDA, and expanding our margins in 2027. This near-term expansion is fully funded and budgeted for this year and builds on an asset we already own and operate. We believe our Gevo North Dakota complex can create more value in the near term while also supporting longer-term growth. Stronger cash generation from Gevo North Dakota helps us reduce risk and enhances our future financing flexibility. Our Gevo North Dakota complex is better suited to support a strategic platform growth than the Lake Preston, South Dakota site we were previously developing. Gevo North Dakota combines one of the strongest active on-site carbon capture and sequestration capabilities in the world with access to advantaged local feedstocks, established rail and truck logistics, an experienced operating workforce, available land and pore space capacity for future growth, and it's in a business-friendly state that supports agriculture, energy, and carbon management. Given the strengths of the Gevo North Dakota complex and other business factors we considered, we have finalized our decision to exit our ATJ-60 project activities in South Dakota and formally discontinued other non-core project activities. As a result, we recognized a $176 million one-time non-cash impairment charge. Leke will talk more about this non-cash charge. Continuing with our growth plans, stage 2 at Gevo North Dakota targets doubling our capacity to about 150 million gallons per year of low-carbon ethanol with associated carbon capture and sequestration and tax incentive opportunities. Financing efforts for this expansion are on track and are targeted to be completed in the second half of 2026, consistent with our previously announced arrangement and timeline with Ara Energy. Engineering, permitting, and initial equipment procurement for the expansion project are underway. We anticipate completion of the expansion in 2028 once financing is complete and construction commences. This expansion is expected to result in meaningful revenue and gross profit growth. Stage 3 of our growth plan contemplates the conversion of approximately one-third of Gevo North Dakota's expanded low-carbon ethanol capacity into higher-value synthetic aviation fuel through Project Northstar, also known as ATJ-30, which is our 30 million gallon-per-year alcohol-to-jet development project. We are making good progress on this medium-term, multi-year effort and provided details on our milestones in our recent business update. The team delivered our FEL-3 engineering estimates on schedule in the second quarter. As we moved from FEL-2 to FEL-3, the capital estimate was refined based on substantially more detailed engineering, vendor engagement and execution planning. The updated estimate of $600 million remains within the expected range and accuracy associated with an FEL-2 estimate, and we believe it provides a much higher level of confidence as we approach FID. FEL-3 showed very favorable results for the underlying alcohol-to-jet process modules, which were within two percent of the previous estimates. That's a good sign for enabling the development in a repeatable fashion at other locations in the future. The site-specific engineering and equipment logistics costs increased in FEL-3, but we believe that the project's ROI remains attractive. Securing additional financeable offtake agreements is needed to reach FID and remains a gating item. These are complex multi-year economic commitments. We are making progress advancing these agreements from the current term sheet stage. We remain committed to advancing our ATJ-30 initiative in a disciplined way, sequencing capital based on customer demand, project financeability, and policy support. And as a reminder, we are currently pursuing non-dilutive project-level financing for the project. We do not have to choose between becoming a cash-generating, low-carbon fuels and carbon management business and building future ATJ projects. The Gevo North Dakota site and its near-term cash generation are expected to support ATJ in the future. We continue to target final investment decision for this initiative by the end of the year. I will now turn the call over to Leke to discuss our financial results and outlook in more detail.
Thank you, Paul. This last quarter was an important one for Gevo. We delivered solid operating performance and completed planned maintenance and debottlenecking activities to expand capacity at our flagship North Dakota site. During the second quarter, we reported revenue of $47 million, compared to $43 million in the same quarter last year. This seven percent year-over-year growth reflects consistent operations of our low-carbon businesses, even with modest impact of planned downtime at our Gevo North Dakota site for maintenance and debottlenecking activities. In comparison to the first half of 2025, revenue during the first half of 2026 grew by 23% to $89 million, reflecting a full six months of the benefit of our Red Trail Energy acquisition compared to just five months last year, coupled with continued solid performance in our carbon business. Gross profit was $20 million in the second quarter, representing a gross margin of 43% compared to gross profit of $19 million and gross margin of 44% in the same quarter last year. Relative to revenues alone, we believe that gross profit is a meaningful barometer of our business performance. It captures not only our revenue performance, but also the impact of optimizing carbon, commodities, and incentives that are monetized as part of our business model. During the first half of 2026, gross profit was $36 million, an increase from $21 million in the first half of 2025, reflecting a full six months of the benefit of our Red Trail Energy acquisition, coupled with dynamic efforts to optimize 45Z tax credit generation from our assets. Note that we recognize the benefit of 45Z tax credits as a reduction to cost of goods sold. Operating expenses in the second quarter included a one-time non-cash impairment charge of $176 million. This was related to capitalized development and engineering expenses previously incurred, which was primarily associated with our prior ATJ-60 project in Lake Preston, South Dakota, and other prior initiatives that are no longer in alignment with our strategic project priorities. This non-cash impairment charge does not impact our cash position, liquidity, or operating cash flow outlook. It does not trigger additional cash payment obligations or affect the underlying economics of Gevo North Dakota or ability to execute our development plan there as our core growth platform. Excluding the non-cash impairment charge, operating expenses in the second quarter were up 18% over the second quarter of 2025, which reflects an increase in G&A expenses primarily due to non-recurring employee severance and accelerated equity award charges. On a GAAP basis, net loss attributable to Gevo was $177 million or $0.75 per share in the second quarter. On a non-GAAP basis, adjusted net loss attributable to Gevo was $1 million or $0.01 per share. Reconciliation of this amount to the GAAP measure is included in today's earnings release. Non-GAAP adjusted EBITDA for the second quarter was $11 million. Note that the second quarter results did not include revenue related to our recently approved CFR pathway, which is expected to show up in the third quarter. We believe that this quarter's adjusted net loss, coupled with the growing adjusted EBITDA, reflect an ongoing improvement in our underlying earnings power of our business. This quarter establishes a strong foundation from which we expect meaningful adjusted EBITDA and operating cash flows during the second half of the year. As we look to the full year, we now expect 2026 adjusted EBITDA of more than $60 million, which is more than double our prior outlook of $30 million. This is a meaningful acceleration from our first half 2026 operating performance and is supported by four main drivers. First, the recently approved Canada CFR pathway and associated sales. We expect to begin realizing those sales in the third quarter. Second, our assets are on track to generate more than $70 million of 45Z tax credits that we expect to monetize in 2026 compared to $52 million last year. This is driven by updated policy guidance and our operational efficiencies this year that improve the carbon intensity of our operating assets. Third, continued operational execution of low-carbon fuel sales, including revenue growth from our specialty fuels. And fourth, further fiscal discipline. Of the more than $70 million in 45Z monetization we expect to achieve this year, we already closed on the sale of $20 million in 45Z credits after the end of the second quarter. With our current engagement with seasoned tax credit buyers, we expect to monetize the remaining approximately $50 million of credits and receive the associated proceeds by year end. A reminder that our 45Z tax credit incentives are generated ratably each quarter based on the volume and carbon intensity of our low-carbon ethanol and RNG production. These credits show up as a reduction in our cost of goods sold on our income statement and are a benefit to our adjusted EBITDA. Note that the cash proceeds from 45Z can lag behind the quarter in which the credit is generated. This results in some quarter-to-quarter variability in our cash flow from operations. While we continue to expect operating cash flow to be neutral to positive for full year 2026, we also expect meaningful positive operating cash flow in the second half of the year. This further demonstrates the underlying cash-generating power of our businesses continues to strengthen. Turning to liquidity, we ended the quarter with cash, cash equivalents, and restricted cash of $58 million. Importantly, this does not include approximately $16 million of cash proceeds from the monetization of 45Z credits that we have collected since the end of the second quarter. We are also excited about our performance in 2027 and beyond. Our debottlenecking project remains on track and on budget. We expect 2027 adjusted EBITDA to be broadly in line with our current 2026 full-year target after we factor in some non-recurring revenue this year and the debottlenecking production uplift starting at the end of this year. Our expansion of Gevo North Dakota to double its production capacity is advancing, with financing on track for completion in the second half of 2026. This is consistent with our previously announced arrangement with our financing partner, Ara Energy. And as Paul mentioned earlier, we also continue to push forward on securing bankable offtake contracts to enable securing accretive financing of our ATJ-30 project. We are engaged with various project-level capital providers and remain focused on moving forward to FID by year end. In closing, we are seeing continued improvement in adjusted EBITDA and cash flow generation supported by the strong underlying fundamentals of our business. We are confident in our ability to sustain our positive momentum as our near-term growth projects at Gevo North Dakota continue to mature on schedule. Today's results anchor Gevo's growth trajectory, further strengthening our capacity to execute our long-term objectives while delivering sustainable value to our shareholders. With that, I would turn the call back to Paul.
Thanks, Leke. We strengthened our financial position, doubled our expected 2026 adjusted EBITDA outlook, and are starting to show that Gevo North Dakota can serve as a scalable blueprint for profitable growth. We've talked before about the potential for a capital licensing or franchise-type model, and that opportunity is becoming more tangible as we demonstrate how our technology, operating model and carbon capabilities can be deployed to meet customer demand and capture value across markets. We'll have more to share as these initiatives advance. For now, I want to thank our employees, partners, customers, and shareholders for their continued support. We're building Gevo with discipline, focus, and a clear path to creating long-term value. With that, we'll open the call for questions.
分析師問答
Looks like our first question today comes from the line of Jeff Grampp with Northland.
I wanted to dive into the $60 million EBITDA target that you guys have refreshed here lately. I just wanted to understand some of the moving parts with respect to the approval to reach the Canadian markets. It sounded like some of that $60 million is a little bit of a one-time bump related to some volumes prior to getting that approval, like a retroactive credit, if you will. Can you help us understand how much of a windfall that might be just to kind of level set, I guess, kind of what the true earnings power of the business is in '26?
Yes, sure thing. That's a perfect question. We're excited that the carbon business itself has grown to what we think is a run rate of about $30 million a year going forward. So that's the part that goes forward into 2026. When we think about the CFR credits, this is a big part of what we wanted to get done because we had made a bet that we were going to be able to capture the value from the CFR credits once we got the approval. We had sold a lot of fuel in 2025 and the first half of 2026, so we haven't been able to monetize those credits yet, but a little more than 40% are credits that were realized this year. So a big component of those banked credits are in the run rate for 2026. That is a big component going forward. But I would say that when you think about the $60 million we're talking about, going forward, remember we're going to be completing the debottlenecking by the end of the year. So we believe that this is really the upside of that, minus maybe these one-time events. We're really kind of flattish going into 2027. So we think most of the $60 million is going to be a repeatable run rate on the forward basis. Leke, if you have any other comments on that?
Thanks, Paul. I generally agree with that description. The way to think about it is what Paul just mentioned. As we complete the debottlenecking, there will be uplift in production volume that increases our revenue profile. When we subtract out the non-recurring items from 2026, effectively we end up at that flattish projection as to where we are for 2027.
Yes. And remember, this is about how we grow this EBITDA. It's also about the increase in the 45Z tax credits that we've got. So we're putting all of these different levers together to make sure we can have a durable business going forward that exceeds that $60 million target.
Got it. Thanks for the details. For my follow-up, just to stick in the Canadian market: what percent, do you have an estimate? I know this changes as market prices and dynamics change, but round numbers, how much of your ethanol do you expect to send to Canada in the second half of this year? It seems like that's the most economic market for you, but perhaps there are other factors at play that might make sense to send to other markets or if there's any constraints to how much you can send to Canada?
Great question. This is the whole point of our carbon arbitrage strategy. We want to make sure we have all the levers to maximize returns for Gevo and our shareholders. Canada is a very strong market with a large opportunity. We're much smaller than that market, so we will continue to maximize volumes where we get the highest returns. There are no inherent limitations on how much we can send; we'll ensure the right certifications and logistics are in place. We also consider other markets, including the voluntary market. We weigh placing carbon into either a compliance market or a voluntary market to achieve the best total return and diversify our business so we don't have all our eggs in one basket.
And our next question comes from the line of Amit Dayal with H.C. Wainwright.
Congrats on all the progress. On the ethanol expansion, Paul, can you remind us what the CapEx requirements are going to be on this project?
We haven't disclosed the capital requirements on the ethanol expansion. For the debottlenecking, we said we were deploying about $24 million of capital in that range; about half of that was for operational reliability and the other half was for the debottlenecking to improve output from 67 million gallons to 75 million gallons. We'll provide more details as we get further along. We're moving quickly on permitting and engineering because the expansion essentially doubles what we're doing today at Gevo North Dakota. Because the carbon business is working and we're monetizing tax credits, this is the most accretive project in our pipeline. We want to get this to the finish line.
Understood. So we'll have maybe more color on this in the 3Q earnings call?
Most likely. I think the biggest thing is refining the estimates as we progress.
Capital: we don't know the exact timing, but the engineering team is working hard on designing an integrated plant. This isn't two separate facilities. We want to optimize CapEx and OpEx to drive the best synergies for the long term. We don't have all those answers yet, but we're working to solidify that so we have the information later in the second half.
Yes. As with ATJ, we're refining estimates as we move through FEL stages. We're not yet at the refined estimate for the expansion, but we'll continue to advance engineering so we can communicate details when ready.
OK, understood. So for ATJ-30, would you potentially go with Ara or are you looking at other financing options and partners?
I'll let Leke chime in on financing updates. The key is making the project bankable: completing FEL-3 estimates and securing financeable offtakes. Financing requires bankable offtake customers who are committed for the multi-year horizon. Once we secure bankable offtakes with the right partners and economics, project financing becomes feasible. We're working through that de-risking today.
In terms of capital raise, we're engaged with multiple project-level lenders and equity providers, so it's not just Ara. Importantly, our existing operations and the cash flows we're generating can enable the development of ATJ-30, including funding our portion of the construction capital. Engagement with project-level capital providers is on the right track, and as we secure bankable offtakes with the right partners and economics, the puzzle comes together for moving forward at the right time.
Just to close the loop regarding Ara: we're laser-focused on the near-term expansion. We want to get that executed; 2028 will be here before you know it, so there's a full-court press to get that project done.
Just last one for me, maybe just on Verity, any updates on progress with commercialization, et cetera, for that offering?
Verity is a key component of how we manage and scale the carbon business. The platform was built to take a single source of data from multiple areas—farm inputs, energy inputs, carbon capture—tie it all together, and substantiate and track carbon accounting into multiple markets, whether Canadian CFR, 45Z, or voluntary markets. Verity is becoming a bigger part of the carbon business results you see today. Beyond tracking, it enables optimization. Internally, we're optimistic about how Verity contributes value. Externally, adoption has been slower than expected, partly because there isn't full clarity on some policy benefits and because not every company is running a carbon business like ours. We continue to have multiple external customers, including repeat buyers, and we are developing that portfolio, but external uptake is a bit slower.
And our next question comes from the line of Derrick Whitfield with Texas Capital.
Congrats on the quarter. I have two questions for you guys, both on ethanol. With respect to the ethanol expansion to 150, could you speak to the expected capital structure for the expansion? Second, staying on the ethanol facility: it's clear that you operate a very low CI plant based on efficiency and CCUS, given that you operate in a more progressive region for climate-smart agriculture practices, how are you thinking about the benefit of expected CSA policy on your 45Z credits?
On the capital structure: as we work through details with Ara on the expansion, we'll remain the lead and maintain a controlling interest in the plant. We will operate the plant and consolidate it on our balance sheet. Leke can add more detail.
To add: there will be project-level debt used to optimize the financing strategy. We'll be targeting a controlling interest, consolidating the expansion project, and the remaining capital stack will be provided by us and Ara. Our existing operations generating recurring EBITDA and cash allow us to fund our ownership interest of the expansion.
Yes. Also, this will be a non-dilutive, project-level financing approach. Regarding CI: we have one of the lowest carbon intensity scores out there, so the remaining upside from climate-smart agriculture or agricultural benefits is smaller compared to others because you can't go below zero. There is still opportunity from energy optimization and throughput—more volume dilutes fixed impacts—and from operational efficiencies. We're focused on reliability and operational excellence to maximize output and minimize downtime, which improves economics and CI. Expansion provides more volume and additional levers to continue to lower CI and improve returns.
Excellent. Congratulations on all your progress.
And it looks like our final question today comes from the line of Peter Gastreich with Water Tower Research.
Congratulations on the results. A couple questions. First, Frontier Infrastructure and Carbonfuture announced a new partnership to market CDRs from ethanol CO2. That's a parallel initiative. Does that have any implications for you in terms of advancing strategy and what can you share about that? Second, regarding the EBITDA challenge you discussed in Q1, have you thought about where some of the low-hanging fruit could lie and also with respect to the South Dakota project, are there any other benefits to your cost structure or reporting that could be reflected in subsequent quarters?
CDR is a market we participate in today; it's the voluntary side of the carbon market and stands for carbon dioxide removal. We've been certified through Puro.earth and continue to grow that business. We sold 8,500 tons to Nasdaq and are finalizing other transactions. The overall macro is strong—the committed CDR purchases are large but only a small percentage has been delivered. We are among a handful of companies that can actually deliver CDRs consistently, and our focus is on delivering high-quality product as a trusted supplier. Regarding the EBITDA challenge, we're making progress. Leke is the champion of the initiative and can provide details.
Great question. For the EBITDA challenge, we've identified over three dozen opportunities, with about half being low-hanging fruit. To date, we've implemented about 50% of the identified items, which are recurring operational and efficiency improvements not related to ATJ-60 or the South Dakota project. We expect implementation to manifest in Q3 and Q4 results as we execute these actions. We're on track and expect to see meaningful improvements in the second half of the year.
Yes. It's both unlocking revenue through new pathways like CFR and controlling costs with a disciplined approach. We understand the returns associated with each action and are executing accordingly to drive value for shareholders.
And ladies and gentlemen, that does conclude our question and answer session. So I will now turn the call back over to CEO Paul Bloom for closing remarks. Paul?
Thank you. This quarter shows that Gevo is really executing. We've got stronger adjusted EBITDA. We're improving our cash generation. We have a working carbon business and a disciplined growth plan centered on Gevo North Dakota, and that's the platform that we intend to scale. I want to thank our colleagues, partners, customers, and shareholders for their support. Thank you very much.
Thanks, Paul. And ladies and gentlemen, that concludes today's call. Thank you so much for joining and you may now disconnect. Have a great day, everyone.