Gevo (NASDAQ:GEVO) reported record third-quarter revenue and a return to profit, helped by sales of carbon credits and stronger low-carbon ethanol production. The company also raised its 2027 adjusted earnings outlook and outlined plans to prioritize an expansion of its North Dakota ethanol plant before committing significant capital to sustainable aviation fuel.
Revenue rose to $83 million from $43 million a year earlier, while net income attributable to Gevo was $23 million, or 9 cents per diluted share, compared with a loss of $8 million. Adjusted EBITDA increased to $44 million from $7 million, and operating cash flow was approximately $41 million. Gevo ended the quarter with about $68 million in cash and cash equivalents.
Chief Executive Officer Paul Bloom said the results reflected a stronger operating platform that gives the company more flexibility in funding growth. “Our operations are generating cash. Our carbon business is creating real value. We are expanding production,” he said.
Carbon credits boost results
Third-quarter revenue included approximately $20 million from the sale of previously banked Canadian Clean Fuel Regulation credits and approximately $10 million from credits recognized during the quarter. Excluding the nonrecurring banked credits, revenue grew about 47% year over year, driven by higher ethanol volumes and pricing and growth in the carbon business, Chief Financial Officer Leke Agiri said.
Gevo expects more than $50 million in carbon revenue for 2026. Excluding one-time items, Bloom estimated the business could generate about $30 million in annual revenue at current capacity and market conditions. He cautioned that carbon prices and regulations can change.
Gross profit was $48 million, for a margin of approximately 58%. Agiri said Gevo recognizes the value of 45Z Clean Fuel Production Tax Credits as a reduction to cost of goods sold when the credits are generated. Cash receipts can arrive in a different quarter from the associated adjusted EBITDA benefit, he said.
Bloom said changes to the 45Z emissions model could add more than $10 million of value from Gevo’s existing renewable natural gas assets in 2026, subject to third-party validation. That would be incremental to approximately $70 million of 45Z credits sold through the third quarter, he said.
Company raises 2027 outlook
Gevo said full-year 2026 adjusted EBITDA could exceed $90 million, including the $20 million from previously banked carbon credits and the anticipated additional renewable natural gas tax credit value. Agiri said the company was also on track for positive operating cash flow for the year.
For 2027, Gevo now expects adjusted EBITDA of more than $70 million, up from approximately $60 million previously. The outlook excludes the nonrecurring banked credit sale and includes both the expected renewable natural gas tax credit benefit and a full year of increased production from the North Dakota debottlenecking project.
Agiri said the additional $10 million in expected tax credit value accounted for the increase in the 2027 outlook. He said operating performance could provide further upside, but the company would offer more detailed guidance early next year.
North Dakota expansion takes priority
Gevo’s fully funded debottlenecking project is designed to bring annual low-carbon ethanol production at Gevo North Dakota to approximately 75 million gallons on a sustainable basis. Some projects are operating, with the remainder being commissioned, and completion is expected by year-end.
Bloom said the plant produced 19 million gallons in the third quarter, close to the targeted annualized rate, but the company still needs to demonstrate that level is reliable and repeatable.
The next phase aims to roughly double annual production capacity to 150 million gallons and increase carbon capture to approximately 400,000 tons per year, with startup expected to begin in 2028. Gevo has already acquired and paid for about half the equipment expected to be used, including some long-lead items, Bloom said.
The company expects to finalize a project-level joint venture with Ara Energy in the fourth quarter, subject to definitive agreements. A final investment decision and financial close would follow. Agiri said Gevo intends to fund its equity commitment with cash on hand and operating cash generation, with Ara capital and project-level debt covering the remainder. Bloom said the company had not disclosed the expansion’s total capital cost.
SAF investment awaits project economics
Gevo continues to advance its Project Northstar sustainable aviation fuel development, but Bloom said the North Dakota expansion offers a more attractive near-term use of capital. Expanding ethanol production first could provide more low-carbon feedstock and strengthen the balance sheet for a future aviation fuel investment, he said.
Agiri said Gevo intends to make a final investment decision on Northstar once it has financeable offtake agreements and a financing structure that supports the project.
Gevo is also pursuing a licensing and catalyst-sales opportunity in India with Praj. Bloom said Praj is building a demonstration plant for an oil company and that revenue could begin in 2028 if testing, approvals and other steps go well.
About Gevo (NASDAQ:GEVO)
Gevo, Inc. is a renewable fuels and chemicals company headquartered in Englewood, Colorado. The company develops technologies that use renewable carbon sources, including plant-based feedstocks, to produce lower-carbon alternatives to petroleum-based products. Its work is focused on reducing greenhouse-gas emissions across the life cycle of fuels and chemicals. Gevo’s activities have included the development and production of renewable alcohols and hydrocarbons, including isobutanol and sustainable aviation fuel.
