Green Plains Inc. Q1 FY2026 earnings call

• Operational Performance & Safety

  • Achieved 97% operating capacity utilization across the fleet, producing 174 million gallons of ethanol in the quarter, with the York, Nebraska facility setting a monthly production record and the Superior, Iowa facility setting a new quarterly production record.
  • Completed Q1 with zero recordable injuries, and the Central City plant received Highly Protected Risk recognition from property insurer FM for exceptional safety and operational discipline.
  • Ethanol, corn oil, and protein yields remained strong across all facilities, supporting gross margin expansion.

• Carbon Program Update

  • All construction and start-up of carbon sequestration facilities was completed in 2025, and Q1 2026 was the first full quarter of operations. Carbon capture performance is now near expected long-term rates, reducing carbon intensity (CI) and generating meaningful value.
  • Generated $65.6 million in gross 45Z tax credit value in Q1; net of monetization discounts and operating costs, the program contributed $55.2 million to adjusted EBITDA, a $32 million increase from Q4 2025 driven by full-quarter operations at the three Nebraska facilities.

• Commercial & Market Dynamics

  • Strong Q1 crush margins, particularly in the second half of the quarter, supported by lower corn prices, solid domestic and international ethanol demand, rising corn oil values, and energy price tailwinds from geopolitical risk.
  • Exports continue to provide strong margin support, driven by destination market blending mandates. The EPA finalized 2026 and 2027 Renewable Volume Obligations at the highest levels in program history, with sharp increases in biomass-based diesel volumes and restrictions on imported feedstocks, driving strong, sustained demand for low-CI domestic corn oil.
  • Ultra-high protein products continue to deliver solid margin contributions, with strengthening relative value versus soybean meal as customers recognize its differentiated quality.
  • Disciplined, full-margin-stack hedging strategy worked as designed in Q1, delivering downside protection while preserving upside, even with a late-quarter ethanol rally driven by geopolitical events.

• Capital Allocation Strategy

  • The company has shifted from business stabilization and simplification to disciplined execution and targeted capital deployment, prioritizing high-return projects that strengthen the base business and improve CI scores.
  • Priority 1 is sustaining capital expenditures ($15 million to $25 million for full-year 2026) to maintain plant reliability, safety, and regulatory compliance, which is critical for consistent margin capture.
  • Next, capital is allocated to small, short-payback efficiency and CI improvement projects across the fleet, with formal benchmarking to identify gaps and scale best practices. Two approved growth projects are: 1) 4.5 million bushels of new grain storage at Wood River, Nebraska, which reduces corn basis risk, improves procurement flexibility, enables more direct farmer-sourced corn, and supports lower CI scores; 2) low-energy distillation upgrades at York, Nebraska, which reduce energy consumption, lower operating costs, and reduce CI.
  • The company plans to retire the full $60 million of 2027 convertible notes at maturity using available cash. Incremental free cash flow will be allocated to the highest-return opportunities, including additional efficiency projects, growth, or capital structure optimization.

Green Plains reports consolidated first quarter 2026 revenue of $446 million, lower year-over-year due to the sale of the Obion, Tennessee facility. Adjusted EBITDA for the quarter was $71.5 million, up $22 million from Q4 2025 and more than $95 million higher than Q1 2025. The 45Z carbon program was the largest contributor to adjusted EBITDA this quarter, delivering $55.2 million in net contribution, representing 77% of total adjusted EBITDA. The base ethanol and co-product business (including ethanol, corn oil, and protein) contributed $16 million in adjusted EBITDA, representing 23% of total adjusted EBITDA. Gross margin for the quarter was $88 million, up from $3 million in Q1 2025, with all segments contributing to the year-over-year improvement.

• 45Z Carbon Program EBITDA Contribution: Management raised full-year 2026 guidance from the prior $188 million minimum to a new range of $200 million to $225 million in net adjusted EBITDA contribution. Advantage Nebraska is expected to contribute $140 million to $165 million of this total, with non-Nebraska facilities contributing the remaining ~$60 million (up from the prior expectation of $38 million).
• Full-Year SG&A: Full-year SG&A is still expected to hit the prior target of approximately $90 million, and Q1 SG&A of $19.5 million continued the year-over-year downward trend.
• Full-Year Interest Expense: Full-year interest expense is unchanged from prior guidance, expected to come in at approximately $35 million.
• Sustaining Capital Expenditures: Full-year 2026 sustaining capital expenditures for maintenance, safety, and regulatory projects are guided to a range of $15 million to $25 million, consistent with prior outlooks.
• Q2 2026 Performance: Management expects Q2 2026 adjusted EBITDA to be higher than Q1 2026, supported by current strong margins, co-product pricing, and carbon program contributions.

• Input commodity prices, specifically corn and natural gas prices, are the primary near-term uncertainty for industry and company margins, with 2026 corn crop outcomes dependent on weather, which cannot be forecast far in advance.
• Final Treasury guidance and the official calculator for on-farm practice 45Z credit enhancements have not been released, so the magnitude of additional value from this opportunity remains uncertain.
• The 45Z carbon program has extensive compliance and audit requirements to verify production and CI scores; failure to meet all requirements could reduce the value of generated credits.
• Geopolitical instability creates volatility in energy commodity prices, which can impact ethanol margins, though management’s hedging strategy is designed to mitigate this downside risk.
• Industry ethanol production levels have been elevated at the start of 2026 following the removal of the iLUC penalty, which could create short-term market imbalances.

Q: With 45Z Q1 run rate above the original full-year guidance range even in the seasonally slow first quarter, what moving pieces explain the updated guidance range? / A: Management noted that Q1 achieved 97% utilization, but Q2 will include planned seasonal spring maintenance, and full-year maintenance activity balances out annual 45Z generation. The guidance increase reflects the company now having several months of operating data that confirms capture efficiency is meeting or exceeding expectations, giving leadership greater confidence to raise the full-year projection. (301 characters)

Q: Why has the expected 45Z contribution from non-Nebraska plants increased, and are on-farm practice benefits included in the current guidance? / A: On-farm practice benefits are not included in the 2026 guidance, as the final Treasury ruling and official CI calculator for these enhancements have not been released. The increase in non-Nebraska contributions comes from three factors: removal of the 6 CI point iLUC penalty for corn in 2026, the ability to purchase RECs to offset electricity-related emissions, and better-than-expected operating efficiency across non-Nebraska plants. (387 characters)

Q: Are corn oil yield improvement projects part of your current small-scale, high-impact capital allocation plan? / A: Yes, improving processing yields is a core part of the company’s ongoing operational excellence program across all plants, starting with ethanol yields which also support higher protein and corn oil (DCO) yields. Green Plains already has MSC yield-enhancing technology installed at many plants, and is now evaluating and rolling out yield improvement projects for non-MSC facilities to boost corn oil outputs to historic highs, as part of the 2026 capital plan. (362 characters)

Q: What is the timing of cash receipts for recognized 45Z tax credits? Is there still a lag between P&L recognition and cash inflow? / A: All cash for 2025 45Z credits was received in April 2026, so no remaining lag for 2025 generation. Under the new ASU 2025-10 accounting standard adopted this quarter, 2026 credits are recognized on the balance sheet as a current asset in the quarter they are produced, after production verification and CI auditing. Cash will be received as monetization is completed, resulting in approximately a one-quarter lag between recognition and cash inflow. (392 characters)

Q: What upside potential exists for the base business in Q2 given the strong Q1 performance, and how is hedging positioned for the quarter? / A: The company is well-hedged for Q2, after the late-Q1 energy price rally created an opportunity to lock in attractive margins. Input costs are largely locked in, and the company secured attractive long-term corn oil prices in recent weeks. Green Plains is not fully hedged on the sell side, so there remains meaningful upside potential if market prices strengthen further, which aligns with the company’s consistent hedging strategy of protecting downside while retaining upside exposure. (368 characters)