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Gevo, Inc. (GEVO)·Q2 2025 Earnings Summary

Executive Summary

  • Gevo delivered its first positive net income ($2.1M) and positive Adjusted EBITDA ($17.3M) in Q2 2025, driven by low‑carbon ethanol with CCS, RNG, and monetization of Clean Fuel Production Credits (CFPC) and durable CDR credits .
  • Results materially beat Street on EPS (actual $0.01 vs −$0.055 consensus) and on EBITDA (actual $17.3M vs −$1.45M consensus); revenue was roughly in line ($43.4M actual vs $43.7M consensus). CFPC is recorded against COGS, not revenue, magnifying margins; management expects >$10M per quarter of CFPC through 2029 *.
  • Operational KPIs showed strong execution: 17M gallons ethanol, ~52K tons feed, >5M lbs corn oil, and >40K metric tons CO2 sequestered in Q2; RNG delivered YTD 172K MMBtu and contributed to segment profitability .
  • Strategic catalysts: CFO reiterated recurring, step‑change profitability and indicated CFPC could exceed $10M/quarter; CDR sales expected to reach $3–5M in 2025 with long‑term potential >$30M/year; RNG bond refinancing freed ~$30M restricted cash, improving liquidity .

What Went Well and What Went Wrong

What Went Well

  • Achieved first positive net income and positive Adjusted EBITDA; consolidated Adjusted EBITDA was $17.3M in Q2, with GevoND contributing $24.2M and GevoRNG $2.6M. “Our results are delivering on the targets we said we would achieve this year” — CEO Patrick Gruber .
  • Monetized CFPC ($22M executed; accounting through COGS), enabling margin expansion and recurring cash flow. “Our CFPC production is booked each quarter as a reduction in COGS... backed by a tax insurance policy” — CFO Leke Agiri .
  • Initiated durable CDR credit sales (> $1M in Q2), with >40K metric tons CO2 sequestered and a certified CCS site with up to 1M tons/year capacity; management targets $3–5M CDR sales by year‑end and >$30M/year long term .

What Went Wrong

  • Interest expense increased $3.2M YoY due to debt for GevoND and higher rates on remarketed RNG bonds, partially offset by lower interest and investment income (−$2.8M YoY) as cash balances declined post‑acquisition .
  • Consolidated G&A remained elevated ($10.8M Q2), although down $0.7M YoY; ongoing insurance and professional costs offset stock‑based comp reductions .
  • Project development costs decreased (−$6.9M YoY) benefitting Q2, but the ATJ‑60 timeline remains contingent on DOE financing and Summit CO2 pipeline clarity, pushing near‑term deployment focus to ATJ‑30 .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Total Operating Revenues ($USD Millions)$16.9 $29.1 $43.4
Income (Loss) from Operations ($USD Millions)$(19.6) $(20.1) $5.8
EPS (Diluted) ($USD)$(0.08) $(0.09) $0.01
Adjusted EBITDA (Non‑GAAP) ($USD Millions)$(11.3) $(15.4) $17.3

Q2 2025 Actual vs S&P Global Consensus (Wall Street):

MetricConsensusActualBeat/Miss
Revenue ($USD Millions)$43.7*$43.4 In line/slight miss*
EPS (Primary) ($USD)$(0.055)*$0.01 Bold beat*
EBITDA ($USD Millions)$(1.45)*$17.33 Bold beat*
# EPS Estimates2*——
# Revenue Estimates2*——

Values retrieved from S&P Global.*

Segment contribution (Income from Operations and Adjusted EBITDA):

Segment MetricQ1 2025Q2 2025
GevoND – Income from Operations ($USD Millions)$1.1 $17.1
GevoND – Adjusted EBITDA ($USD Millions)$1.8 $24.2
GevoRNG – Income from Operations ($USD Millions)$0.5 $1.5
GevoRNG – Adjusted EBITDA ($USD Millions)$2.7 $2.6
GevoFuels – Income from Operations ($USD Millions)$(0.7) $(0.4)

Operational KPIs:

KPIQ1 2025Q2 2025
Ethanol Production (Gallons)11.1M 17.0M
High‑Protein Feed (Tons)>40,000 52,000
CO2 Sequestered (Metric Tons)~29,000 >40,000
RNG Production (MMBtu)79,963 172,000 (six months YTD)

Notes:

  • CFPC (Section 45Z) is recognized as a reduction to COGS, not revenue, enhancing margins .
  • Combined Q2 operating revenue, interest and investment income totaled $44.7M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA (Consolidated)FY 2025“We believe we can get to positive Adjusted EBITDA this year” (Q1) Achieved positive in Q2; “recurring step‑change” growth expected Raised/achieved
CFPC (Section 45Z) monetizationQ3–Q4 2025 and through 2029Expected monetization in 2025; supportive legislative extension discussed (Q1) Expect >$10M per quarter through end of 2029; CFO suggests potential “better than $10M”/quarter Raised/quantified
CDR credit salesFY 2025Developing voluntary CDR market; initial sales anticipated (Q1) Expect $3–5M by year‑end; long‑term >$30M/year potential from GevoND Raised/quantified
ATJ‑60 (South Dakota)2025+DOE loan guarantee conditional commitment; timeline subject to DOE and Summit pipeline Continuing DOE engagement; pacing dev spend to financing timeline; focus shifts near‑term to ATJ‑30 Maintained/strategic focus shift
Liquidity (Restricted cash)2025Planned RNG refinancing (Q1) ~$30M restricted cash released post RNG refinancing in July Executed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Profitability trajectoryAdj. EBITDA loss; building LCFS pathway; foundational setup “Positive Adj. EBITDA this year” target Achieved positive net income and Adj. EBITDA Improving
CFPC (45Z)Preparing pathways, IRS approvals; expectation to monetize Monetization expected; legislative support emphasized $22M executed; >$10M/quarter through 2029; COGS reduction Executing/scaling
Durable CDR creditsNot highlightedMarket development; BECCS CDR optionality >$1M sold; $3–5M 2025 target; >$30M/year LT; CCS capacity 1M tpy Scaling
ATJ platform (ATJ‑60/ATJ‑30)ATJ‑60 engineering; DOE process; LCFS positioning ATJ‑30 copy‑edit from ATJ‑60; >50% capacity prelim sold; Book & Claim ATJ‑30 prioritized for faster/cheaper deployment at GevoND; DOE engagement continues Focus shifting to ATJ‑30 first
RNG operations & financingLCFS pathway anticipated; RNG EBITDA positive Q4 RNG CI −339 confirmed; strong revenue growth RNG refinancing released ~$30M restricted cash; steady ops Strengthening
Verity (digital MRV)Business update reaffirmed New customers Landus & MSP; SAF Scope credits via FEG Landus CFR expansion; supply chain CI tracking; farmer premiums Growing adoption
Regulatory environmentLCFS pathway expectations 45Z extension/ILUC removal support One Big Beautiful Bill Act extends CFPC through 2029; monetization underway Supportive

Management Commentary

  • “This was a landmark quarter… recurring Adjusted EBITDA… real cash flow… running our GevoND operations efficiently, capturing carbon, and selling voluntary carbon credits as CDRs and CFPCs” — CEO Patrick Gruber .
  • “Our CFPC production is booked each quarter as a reduction in COGS… backed by a tax insurance policy… residual risk mitigated” — CFO Leke Agiri .
  • “We started our carbon business and sold over $1,000,000 worth of CDRs… anticipate $3–5M by the end of this year and long‑term >$30M/year” — CBO Paul Bloom .
  • “In the second quarter, we ground 5.7M bushels… produced 17M gallons ethanol… sequestered over 40,000 metric tons of CO2” — President & COO Chris Ryan .

Q&A Highlights

  • CFPC monetization: Structure supported by tax insurance; ethanol and RNG credits expected with similar constructs; pathway identified for 2026 credits; accounting to COGS, not revenue .
  • CFPC magnitude: $10M/quarter viewed as conservative; management believes it can do better, subject to production and no going‑concern issues .
  • CDR strategy: Shift carbon value between LCFS and CDR to optimize returns; pursuit of longer‑term contracts; ability to deliver now differentiates Gevo in an emerging spot market .
  • ATJ timing and capital: ATJ‑30 engineering progressing via copy‑edit from ATJ‑60; financing rate‑limiting; DOE process for ATJ‑60 continues, pending Summit pipeline clarity .

Estimates Context

  • Q2 actuals vs consensus: EPS $0.01 vs −$0.055 (beat), revenue $43.4M vs $43.7M (slight miss), EBITDA $17.3M vs −$1.45M (beat). Street had minimal coverage (two estimates for Q2 revenue/EPS) *.
  • Forward quarters: Consensus expects Q3 revenue ~$31.4M and Q4 ~$45.4M, with EPS remaining negative; management’s CFPC and CDR programs could necessitate upward revisions to margin and EPS trajectories if execution persists*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Margin expansion from CFPC booked against COGS is a structural catalyst; management guides >$10M per quarter through 2029, with potential upside per CFO .
  • Durable CDR sales add a new revenue stream with near‑term $3–5M potential and long‑term >$30M/year from GevoND; CCS capacity and certification create scarcity value .
  • Segment profitability led by GevoND (Q2 Adj. EBITDA $24.2M) validates the ethanol+CCS thesis; RNG contributes steady EBITDA and improved liquidity post refinancing .
  • Near‑term ATJ focus on ATJ‑30 at GevoND lowers capital intensity and accelerates deployment; ATJ‑60 remains viable with DOE engagement, pending pipeline clarity .
  • Liquidity strengthened by ~$30M restricted cash release; cash, cash equivalents and restricted cash stood at $126.9M at quarter end .
  • Estimate revisions likely: Street modeled negative EBITDA and EPS; actual results and CFPC/CDR visibility suggest upward bias to margins and EPS path*.
  • Trading implications: Positive earnings inflection, margin drivers (CFPC/CDR), and operational KPIs should support re‑rating; watch legislative follow‑through, ATJ financing milestones, and sustained CFPC/CDR execution .

*Values retrieved from S&P Global.

Appendix: Additional Q2 Press Releases and Context

  • RNG bond refinancing: Barclays purchased $40M of new bonds; release of ~$30M restricted cash after reserves and transaction costs .
  • CDR sales announcement: First Puro.earth CORCs sold to a global technology/finance company; CCS capacity up to 1M tpy at GevoND .
  • Landus partnership: Verity‑enabled CFR and CI supply chain program expanded; farmer premiums and broader adoption signal Verity growth .
  • Q1 baseline: Revenue $29.1M; consolidated Adj. EBITDA loss $(15.4)M; GevoND and RNG positive income/Adj. EBITDA; positioning for CFPC monetization .