Transcript: Gevo Q2 2026 Earnings Conference Call

Gevo (NASDAQ: GEVO ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Gevo Incorporated reported a 7% increase in revenue for Q2 2026 compared to the previous quarter, with a 70% increase in gross profit over the past six months year-over-year. The company is on track with its three-stage expansion plan at the Gevo North Dakota facility, aiming to increase low-carbon ethanol capacity to 75 million gallons per year by the end of 2026. Gevo received approval for its Canada Clean Fuel Regulation pathway, opening access to a large compliance market and diversifying cash flows. A $176 million non-cash impairment charge was recognized due to the discontinuation of the ATJ 60 project in South Dakota.

The company's non-GAAP adjusted EBITDA target for 2026 is more than $60 million, doubling the previous estimate, driven by new market access and cost efficiencies. Gevo's carbon business is projected to deliver over $30 million in annual revenue, excluding banked CFR credit sales. The company exited non-core project activities to focus on the more strategically valuable Gevo North Dakota complex. Gevo is advancing its ATJ 30 synthetic aviation fuel project, with FEL3 engineering estimates refined and favorable results reported.

The company plans to maintain a non-dilutive financing approach for expansions and projects, ensuring a controlling interest in the Gevo North Dakota expansion. Management highlighted ongoing improvements in adjusted EBITDA and cash flow generation, with significant growth expected in the second half of 2026. Full Transcript OPERATOR Thank you for standing by. 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. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad.

Once again, star one. And if you'd like to withdraw your question, simply press star one again. Thank you. I would now like to turn the call over to Eric Frey.

Eric Frey, Vice President of Finance and Strategy 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 Leike Aguirre, 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 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 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 I'd now like to turn the call over to the CEO of Gevo, Paul Bloom.

Paul Bloom, Chief Executive Officer 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.

But 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 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 Regulation, 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 one 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 our 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. Leike will talk more about this non-cash charge. Continuing with our growth plans.

Stage two at Gevo North Dakota targets doubling our capacity to about 150 million gallons per year of low-carbon ethanol with the 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 Arra 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 three 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 FEL3 engineering estimates on schedule in the second quarter.

As we moved from FEL2 to FEL3, 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 FEL2 estimate and we believe it provides a much higher level of confidence as we approach FID. FEL3 showed very favorable results for the underlying alcohol-to-jet process modules, which were within 2% 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 cost increased in FEL3, 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 and 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 Leike to discuss our financial results and outlook in more detail.

Leke Agiri, Chief Financial Officer 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 7% 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 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 credit 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 prior ATJ 60 project in Lake Preston, South Dakota and other prior initiatives that are no longer in alignment with our strategic 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 obligation 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. 75 per share in the second quarter. 01 per share. A 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 the 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 have already closed on the sale of 20 million in 45Z credit 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.