Gevo (GEVO) Q2 FY26 earnings call: guidance and Q&A

How much of the $60 million adjusted EBITDA target for 2026 is from one-time retroactive Canadian credits versus the true recurring earnings power of the business?

Paul Bloom clarified that the carbon business has a run rate of about $30 million per year. While a significant portion (>40%) of the bank CFR credits realized this year contribute to the $60 million, the completion of de-bottlenecking by year-end means most of the $60 million is expected to be a repeatable run rate into 2027, with the company aiming to exceed it through 45Z tax credit increases.

“So when we think about that, there's a big component of those bank credits that really are in a run rate for 2026. So that is a big component going forward. But I would say that when you think about the 60 million that we're talking about, going forward, remember we're going to be completing the de-bottle decking 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.”

asked by Jeffrey Grampp · answered by Paul Bloom

What percentage of ethanol does Gevo expect to send to Canada in H2 2026, and are there any constraints or other market factors influencing this decision?

Gevo aims to maximize returns by sending volumes to the most economic markets, including Canada, which is a strong >1 billion gallon opportunity. There are no limitations on how much can be sent, but the company also weighs the voluntary carbon market and diversifies its sales to avoid having 'all eggs in one basket,' balancing compliance and voluntary markets for total return.

“So we want to continue to maximize the volumes to where we're going to get the highest returns. So really no limitations. on how much we can send. We're going to continue to make sure that we've got the right certifications and everything in place to do that. But then we have to look at the other markets. We have to take a look at, how's the voluntary market developing?”

asked by Jeffrey Grampp · answered by Paul Bloom

Can Gevo provide an update on the CAPEX requirements for the ethanol expansion project?

Paul Bloom stated that the capital requirements for the expansion have not yet been disclosed. He referenced the de-bottlenecking project's ~$24 million capital (half for reliability, half for output improvement). Greg Hanselman added that the engineering team is optimizing CapEx and OpEx for an integrated plant design, and they are still refining estimates, similar to the FEL process for ATJ30.

“So we haven't disclosed the capital requirements on the ethanol expansion. You know, we, if you, you know, flip back to the deval necking, we said we were deploying about a $24 million of capital in that range, about half of that was going to operational reliability. The other half was going to the actual de-bottlenecking to improve the output from 67 million gallons to 75 million gallons.”

asked by Amit Dayal · answered by Paul Bloom

Will Gevo potentially partner with Aira for ATJ30 financing, or are they exploring other options?

Gevo is engaged with multiple project-level lenders and equity providers, not just Aira, for ATJ30. The company emphasizes securing bankable offtake contracts with the right partners and economics to de-risk the project. Existing operations' cash flows are crucial for funding Gevo's portion of construction capital, and they are pursuing a non-dilutive financing approach.

“I think just to probably sum it up, in terms of cap raise or capital raise profile, we're engaged with multiple project level lenders and equity providers. So just not... era at this point. But also just to express really the excitement that we have is as we look to the development of ATJ30, what's also very important is to highlight our existing operations, the cash flows that we're generating now, those actually enable the ability for us to fund ATJ30 from a development perspective, but also fund our portion of the construction capital as well.”

asked by Amit Dayal · answered by Unknown Speaker

Any updates on the commercialization progress of the Verity platform?

Paul Bloom stated that Verity is a key component of Gevo's internal carbon business, enabling tracking and optimization across multiple markets. While internally very optimistic about its value contribution, external development has been slower due to a lack of clarity on 45Z agricultural benefits. Gevo maintains eight external customers and expects demand to grow as the carbon business model becomes more widespread.

“Externally, we've got a number of customers. I would say a little bit slower on the uptake of, you know, external development, mostly because we still don't have good clarity on things like 45 Z ag benefits, right? Those are kind of the some of the big things that we've we've looked at.”

asked by Amit Dayal · answered by Paul Bloom

What is the expected capital structure for the FNL expansion to 150M gallons, and how will expected CSA policy benefit Gevo's 45Z credits given its low CI plant?

For the expansion, Gevo plans to maintain a controlling interest and consolidate the plant on its balance sheet, with project-level debt optimizing financing. Gevo's low carbon intensity (CI) means less room for further reduction from CSA/ag benefits compared to others, but it could still yield a few million dollars. The focus is on energy optimization and volume expansion to further drive down CI and improve economics.

“So on the capital structure, right, as we work through the details with ARA on the expansion, you know, we'll stay in the lead, right? So we're going to be, have a controlling interest in the plant. Obviously we will operate the plant and as we work through that everything's going to be consolidated on our balance sheet. That's the plan going forward.”

asked by Derek Whitfield · answered by Paul Bloom

What are the implications of the new Frontier Infrastructure and Carbon Future partnership for marketing CDRs from ethanol CO2, and how does Gevo fit into the broader CDR market?

Paul Bloom explained that CDR (carbon dioxide removal) refers to the voluntary carbon market, where Gevo is already certified through Puro.Earth and is a trusted supplier. He noted that while $12 billion has been committed in CDR purchases globally, only 3.3% has been delivered. Gevo is ranked #5 on CDR.FYI as a supplier, emphasizing its ability to not only sell but also deliver high-quality CDRs.

“So the thing that I think is great about what we're doing is we're one of, you know, the handful of companies who can actually not only just talk about CDRs and sell CDRs, but we can deliver those CDRs. So we're becoming, I would say as you work through the quality requirements which are very we have very high quality carbon and we're going to stay focused on delivering that high quality product that you know we're a trusted supplier in this space.”

asked by Peter Gastric · answered by Paul Bloom

What is the progress on the EBITDA challenge, and are there any other cost benefits from exiting the South Dakota project that could appear in future quarters?

Gevo has identified over three dozen opportunities for the EBITDA challenge, implementing about 50% of them. These are recurring operational efficiencies, not related to the South Dakota project, and are expected to manifest in Q3 and Q4 FY26 financial performance. The challenge focuses on unlocking revenue through new pathways (like CFR) and disciplined cost control.

“So in terms of the challenge, we're at a place where we've identified over three dozens of opportunities in front of us, which are really probably half of it is low hanging fruit. So to date, we've actually implemented about 50 percent of those identified items, which is not necessarily a good thing. related to ATJ 60 or the South Dakota project.”

asked by Peter Gastric · answered by Unknown Speaker