Transcript: Green Plains Q2 2026 Earnings Conference Call

Green Plains (NASDAQ: GPRE ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. This content is powered APIs. For comprehensive financial data and transcripts, visit The full earnings call is available at Summary Full Transcript OPERATOR Good morning and welcome to the Green Plains Inc.

second quarter 2026 earnings conference call. Following the Company's prepared remarks, instructions will be provided for Q&A. At this time, all participants are in a listen-only mode. I will now hand the call over to your host, Will Joekel, Vice President and Treasurer.

Please go ahead, Will. Will Joekel, Vice President and Treasurer Thank you and good morning. I would like to welcome everyone to the Green Plains Inc. second quarter 2026 earnings conference call.

Joining me on today's call are Chris Osowski, President and Chief Executive Officer, Ann Reis, Chief Financial Officer, Imre Havasi, Senior Vice President of Trading and Commercial Operations, along with the rest of our senior leadership team. There is a slide presentation available on the Investor page under the Events and Presentations link on our website. During this call we will be making forward-looking statements which are predictions, projections and other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties.

Actual results can materially differ because of risk factors discussed in today's press release; comments made during this call; and in the Risk Factors section of our Form 10-K, 10-Q and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statements. I'll now hand the call over to Chris. Chris Osowski, Chief Executive Officer Thanks, Will, and good morning, everyone.

The second quarter marked another period of strong execution for Green Plains. 4 million in the second quarter of last year. Successfully executing our maintenance program while achieving our strongest quarterly performance in years highlights the strength of our operations and our team. Green Plains today is a fundamentally different company than it was a year ago.

We are focused on operational excellence across our platform. We have a growing carbon business that is delivering significant value and we are benefiting from favorable demand fundamentals across ethanol, corn oil and protein markets. Together, those advantages are creating a business with a higher floor, stronger free cash flow and significantly more flexibility than we've had before. Before I discuss our outlook, I want to start with safety.

Safety is the foundation for everything we do. A safe plant is a reliable plant and a reliable plant is what allows us to consistently deliver for our customers, our shareholders and our employees. During the quarter, our employees worked safely and we continued to improve the risk profile of the fleet. Recently, our Superior, Iowa facility achieved Highly Protected Risk status from FM, becoming our second facility to earn that recognition after Central City, Nebraska in Q1.

Superior also recently surpassed three years without a recordable accident, which is a fantastic achievement. In June we held our annual Safety Week across the organization with senior leadership team spending time in our plants alongside our teams at Fluid Quip Technologies and Fluid Quip Mechanical. That kind of visible, hands-on engagement reinforces that safety is owned by all of us every day. Operationally, the quarter played out largely as planned.

We produced nearly 161 million gallons of ethanol and ground over 54 million bushels of corn while completing our normal spring maintenance. Capacity utilization averaged nearly 90% reflecting those planned outages plus a molecular sieve bead changeout at Madison, Illinois. It's a normal course maintenance item, but one that typically occurs once in every eight to ten years. We remain on track for roughly 95% capacity utilization for the full year.

These results give us confidence in our sustainability of our operating rates as we move through the back half of the year. That consistency matters because it's the foundation for everything we do: lowering CI scores, improving capture rates, raising yields, taking out costs and finding opportunities through our benchmarking efforts. Operational excellence isn't a side project here, it's the engine behind our earnings growth and long-term value creation, and nowhere is that more evident than in our carbon platform. Capture performance is at or near our expected long-term rates and the earnings keep building.

2 million in the first quarter, bringing first half carbon EBITDA to approximately $114 million. We are earning 45Z credits as we produce qualifying low-carbon ethanol and the value we generate begins with operational execution. As we continue to execute, we increase the value of the credits we earn. We have not monetized any portion of our 2026 credits to date.

Staying patient is allowing us to negotiate a deal that generates stable, predictable cash flows. And while we haven't announced a partner for these credits, we're pleased with the progress we've made and believe our approach is positioning us well. Our focus remains straightforward: maximize value while ensuring we maintain the necessary compliance and documentation to fully monetize the credits. Ann will provide more detail on the accounting and cash flow considerations in her remarks, but before I hand it over to her, I want to spend a moment on the broader demand outlook for ethanol.

We're seeing several demand drivers line up at once. Domestic demand remains healthy, exports are performing well, and the policy backdrop for higher blends remains encouraging. Permanent year-round E15 remains an important opportunity, but it's only one part of a larger demand story. On the policy front, the Senate Agriculture Committee is set to formally schedule the farm bill markup later today.

We also see growing interest in ethanol's role in maritime fuel applications, continued discussion around sustainable aviation fuel, expanding international blending mandates, and a broader recognition of ethanol's role in energy security. Geopolitical uncertainty, evolving trade dynamics and changing global fuel requirements continue to create opportunities for low-carbon liquid fuels. Weather, crop size and global grain flows will continue to influence feedstock markets, but the demand picture is solid.

Importantly, these potential demand catalysts are not embedded in our current outlook, but they reinforce our positive long-term view of ethanol demand and the strategic position Green Plains has built. With that, I'll turn it over to Ann to review the financials. Ann Reis, Chief Financial Officer Thanks, Chris. The second quarter reflected strong execution across the business and continued growth from our carbon platform.

42 per diluted share in the first quarter. 5 million in the first quarter, reflecting improved operating performance and a growing contribution from 45Z. 6 million in the second quarter of 2025. During the second quarter, the carbon business generated $59 million of net EBITDA, which is the net contribution after discounts, incremental electrical expense at the plant, and the transportation and sequestration of the CO2.

As Chris noted, the improvement reflects the value of credits earned through our operations, supported by strong capture performance, lower carbon intensity and continued improvement across the platform. Cash generation was a highlight. We generated nearly $87 million of operating cash flow and ended June with over $243 million of cash and cash equivalents. Our total debt for the quarter was approximately $484 million.

We received the final cash payment related to our 2025 45Z credits during the second quarter totaling $41 million. That relates to prior-year credits and is separate from the 45Z EBITDA we recognized this quarter. As we continue to generate cash, our priorities remain straightforward. We will continue to invest in safe and reliable operations, maintain a strong balance sheet and allocate capital to the opportunities that create the greatest long-term value for shareholders.

We're focused on generating increasingly predictable free cash flow and deploying that capital in a disciplined manner. Chris will discuss our capital allocation framework in more detail later on the call. Turning to expenses, SG&A totaled around $21 million for the quarter, a reduction of 21% when compared to Q2 of 2025, and we remain on track to finish the year at approximately $90 million of SG&A expense. Interest expense was $8 million during the second quarter and depreciation and amortization was $23 million.

We continue to expect full-year interest expense of approximately $35 million. Capital expenditures were around $11 million during the quarter. Given the opportunities we're seeing to enhance reliability and operational performance across the fleet, we expect sustaining CapEx near the top of our range, about $25 million for the year. With that, I'll turn it over to Imre for the commercial update.

Imre Havasi (Senior Vice President of Trading and Commercial Operations) Thank you, Ann. The commercial environment was strong in the second quarter with historically high crush margins and firm co-product prices. Q3 margins are only a touch below Q2 and the setup into the second half of the year is solid. Margins were supported by several factors working together.

Energy prices moved higher during the quarter, with geopolitical volatility in the Middle East contributing to strength across the broader energy complex. Favorable corn values helped reduce feedstock costs while ethanol demand remained solid both domestically and in export markets. Co-product values also contributed, with corn oil benefiting from renewable diesel demand and protein markets remaining stable. Industry production remained elevated, but demand kept up across both domestic blending and exports.

The long-term outlook remains positive, particularly on the export front, driven by higher ethanol mandates overseas and expanding low carbon fuel programs. S. ethanol will need to remain competitive with Brazil as production expands. However, global demand continues to grow and policy developments both internationally and domestically remain supportive of long-term ethanol consumption.

Corn prices fluctuated during the quarter and that volatility has continued into Q3. Planting season was off to a good start and yield expectations were initially high enough to offset lower planted acres. Most recently, hot and dry weather has raised uncertainty around yield potential, bringing weather back into focus as the key variable. Current expectations continue to point to a favorable overall outlook.

Corn oil prices increased during most of Q2, driven by high demand from the renewable diesel industry. Protein and distillers grains also remain stable contributors. High protein demand remains strong while DDGs values are trending lower in Q3 due to normal seasonal factors. On natural gas, prices have remained manageable and our realized cost was down from the first quarter, providing an additional tailwind to margins.

We continue to manage that exposure actively as part of our overall hedging program. Finally, from a risk management perspective, hedging costs were generally consistent with the first quarter. We recorded mark-to-market losses at quarter end as corn prices moved lower late in June. However, prices have since recovered.

We continue to manage commodity exposure through a disciplined and consistent hedging approach. What encourages us the most is the forward setup. Demand fundamentals remain supportive, feedstock economics continue to be favorable and co-product values remain healthy. While the markets will continue to move, we believe the overall commercial environment remains constructive as we move through the balance of the year.

Our philosophy remains the same: we are protecting the margin while maintaining the flexibility to participate in improving market conditions. With that, I'll turn the call back to Chris. Chris Osowski, Chief Executive Officer Thanks, Imre. As you've heard this morning, we're seeing strength across the business.

Operational performance remains solid, the carbon platform continues to perform well, and the market backdrop for our products remains constructive. The question for Green Plains today is no longer whether we can generate earnings and free cash flow. The question is how we allocate that free cash flow to create long-term shareholder value. We believe a clear capital allocation framework is important, so let me walk through how we're thinking about it.

First, we'll continue to invest in the safe and reliable operation of our assets. Plant reliability is how we capture margin, and sustaining capital will always be our highest priority. Based on what we're seeing across the fleet, we expect sustaining capital to be approximately $25 million annually. Second, we will continue to strengthen the balance sheet.

We have developed a debt reduction strategy designed to use carbon-supported cash flow to increase financial flexibility and reduce the leverage ratio as we move beyond 2029. Third, we'll reinvest in the business through our operational excellence and benchmarking efforts. We continue to identify opportunities to improve yields, lower energy consumption, reduce carbon intensity, and raise the earnings power of our existing assets. These are typically targeted investments with attractive returns and measurable operating benefits.

They are the type of opportunities that compound value over time. And fourth, we will pursue larger growth opportunities when they meet our return thresholds. Even with our debt reduction initiative, we will have substantial cash flow over the coming years and we will remain disciplined in evaluating both organic and inorganic opportunities. We will only deploy capital into projects that generate returns meaningfully above our cost of capital.

These priorities aren't either-or. The cash flow we're generating allows us to invest in the fleet, strengthen the balance sheet, and pursue attractive growth opportunities at the same time. More importantly, it turns operational excellence into a measurable capital plan. Through our benchmarking work, we're able to identify performance gaps, quantify expected returns, and prioritize the opportunities that create the most value over time.

These incremental improvements compound, helping us build a higher and more durable earnings floor across the business. That benchmarking effort is already helping us shape our investment priorities. At Wood River, we continue to advance our grain storage expansion project, improving procurement flexibility, reducing basis exposure, and supporting lower-carbon grain sources. We are currently evaluating additional storage projects across the platform and expect to make investments in additional infrastructure over the next 12 months.

At York, we're continuing engineering work on a low-energy distillation project, which is designed to reduce energy consumption, lower operating costs, and further reduce carbon intensity. We're also advancing corn oil projects across the network to enhance yields. These are exactly the type of targeted investments that improve operating performance, strengthen returns, and compound value over time. Looking ahead, we're encouraged by what we're seeing across the business.

Demand remains healthy across ethanol markets, corn oil fundamentals are favorable, and protein values remain stable. The carbon platform continues to generate increasing value, and our improving operational performance gives us confidence in the business heading into the second half of the year. Beyond 2026, we continue to see additional opportunities through LCFS and other low-CI ethanol markets, as well as continued momentum in export demand, maritime fuels, sustainable aviation fuel, voluntary carbon credit programs, and progress toward permanent year-round E15.

None of those opportunities are necessary for our current outlook, but each represents potential upside to an already improving foundation. The free cash flow we are generating gives us the ability to fund high-return growth opportunities while continuing to strengthen the balance sheet, with the goal of building a more durable and higher-quality earnings stream over time. In summary, Green Plains is operating from a position of strength. Our assets are performing at a high level, our carbon platform is delivering, and market fundamentals remain supportive.

We have a strong set of opportunities in front of us and will continue to approach capital allocation with the same discipline we're applying across the rest of the business. Operator, we're now ready to take questions. OPERATOR We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up.

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Please stand by while we compile the Q&A roster.