Gevo, Inc. Q2 FY2025 earnings call

• Adjusted EBITDA turned positive, and the company achieved incremental net profitability. • Successfully sold voluntary carbon credits from the North Dakota site with carbon capture sequestration and tax credits. • Gevo North Dakota ground 5.7 million bushels of corn to produce 17 million gallons of low-carbon fuel-grade ethanol, 52,000 tons of high-protein animal feed, and over 5 million pounds of distillers corn oil. • Sequestered over 40,000 metric tons of CO2 in the second quarter. • Gevo RNG produced about 92,000 million BTUs of renewable natural gas. • Progress on Verity software platform for traceability and carbon intensity monetization, including a partnership with LANXESS. • Development of Gevo's proprietary ethanol to olefins technology with LG Chem and Axens. • Three standardized ATJ plant designs (ATJ30, ATJ60, ATJ150) to convert low-carbon ethanol into SAF.

During the second quarter, combined operating revenue, interest and investment income was $44.7 million. Income from operations was $5.8 million, and non-GAAP adjusted EBITDA was $17.3 million. Gevo North Dakota generated income from operations of $17.1 million and non-GAAP adjusted EBITDA of $24.2 million. Gevo RNG generated income from operations of $1.5 million and non-GAAP adjusted EBITDA of $2.6 million. Net income per share attributed to Gevo was $0.01 per share for the second quarter.

• Anticipate growing CDR credit sales to $3 million to $5 million by the end of 2025 and long-term sales exceeding $30 million per year. • Expect clean fuel production credits to benefit net income and adjusted EBITDA by more than $10 million per quarter going forward. • Progress on translating ATJ 60 design to ATJ 30 design for deployment at the North Dakota site. • Continue discussions with the U.S. Department of Energy's Loan Programs Office for the ATJ60 project in South Dakota.

• Uncertainties regarding the carbon dioxide pipeline for the ATJ60 project. • Regulatory changes could impact tax credit monetization and carbon credit sales. • Market volatility in low-carbon fuel markets affecting the valuation of co-products like carbon credits.

Q: On the CFPC monetization, why haven't biogas credits been monetized yet and when?

A: The 45Z clean fuel production tax credit for ethanol production was monetized, but biogas credits are tied to production. Expectation is ethanol facilities qualifying for 45Z will see monetization as the regulatory environment stabilizes.

Q: Can we expect similar cadence for RNG business on CFPC monetization?

A: The deal construct for RNG facility is similar to ethanol, and monetization of tax credits from both ethanol and RNG facilities is expected.

Q: Variance on CFPC benefit for next few quarters?

A: The $10 million number is conservative; the company believes it can generate more than $10 million per quarter from 45Z credits from ethanol and RNG facilities.

Q: Path to $30 million in CDR sales?

A: Shift from low carbon fuel markets to CDR sales as the market develops, leveraging high-quality credits and PURO standards.

Q: Faster movement on ATJ30 or ATJ60 projects?

A: Editing of ATJ60 design for ATJ30 is underway, but it takes time; focus is on cost reduction and financing.

Q: Verity customers and prospects?

A: Verity has 5 ethanol customers, with growth expected as it simplifies carbon accounting; more announcements on Verity customers expected this year.

Q: CDR market depth and contract structure?

A: CDR market is developing with spot sales and multiyear agreements; focusing on high-quality credits.

Q: Marketing and optimizing low-carbon ethanol revenue?

A: Balancing between including CCS value in low carbon fuel markets and selling CDRs separately for better returns.

Q: CCS site capacity for third-party volumes?

A: Gevo North Dakota has 1 million tons per year capacity for CO2 sequestration, with potential to accommodate third-party volumes via virtual pipelines and other means.