Gevo Swings to Profit, Doubles EBITDA Outlook on Ethanol, Tax Credits
The sustainable-fuels producer now expects 2026 Adjusted EBITDA to potentially exceed $60 million, more than doubling its earlier $30 million target.
Gevo Inc. (GEVO) reported first-quarter 2026 revenue of $43 million, up 48% from a year earlier, as the sustainable-fuels producer rode higher output from its North Dakota ethanol plant and signaled a sharply improved profitability outlook for the full year.
The company now expects 2026 non-GAAP Adjusted EBITDA to potentially more than double its previous estimates, up from the $30 million target set at the start of the year and the $40 million annualized run-rate it had reiterated in prior quarters. The upgraded outlook reflects a combination of rising production volumes, a new federal tax-credit regime, and cost cuts that are beginning to flow through the business.
Adjusted EBITDA reached $8.5 million in the quarter, swinging from a negative $15.4 million loss in the first quarter of 2025 — a $24 million improvement. The result marked the company's fourth consecutive quarter of positive Adjusted EBITDA, building on a $7.7 million print in the fourth quarter of 2025 and a full-year 2025 total of $16.4 million, compared with negative $57.8 million in 2024. Net loss was flat at $22 million year over year, though the latest quarter included an $11 million one-time charge tied to bond extinguishment and debt-modification costs.
Gevo North Dakota, the ethanol and carbon-capture operation acquired in January 2025, produced 18 million gallons of low-carbon ethanol in the quarter, up 64% from the year-ago period that included only two months of ownership. Carbon-capture and storage volumes at the site reached 46,000 metric tons, up 59%. Renewable natural gas production climbed 15% to 92,000 MMBtu and has since accelerated, with second-quarter output running at roughly 106% of budget. A debottlenecking project aimed at lifting capacity to 75 million gallons a year — representing 10-15% growth — remains on budget and on track for completion in 2026, with incremental output starting in 2027.
Tax credits are becoming a material earnings driver. Gevo is targeting monetization of more than $70 million in Section 45Z credits during 2026, a significant step-up from the $52 million of production tax credits it sold across all of 2025. The company also completed a new Canada Clean Fuel Regulation carbon-intensity pathway in the second quarter, opening a compliance market where credit sales are expected to begin contributing to third-quarter results.
On the strategic front, Gevo is considering exiting all sustainable-aviation-fuel activities in Lake Preston, South Dakota, to concentrate resources on Project Northstar, its planned alcohol-to-jet facility at the North Dakota site. FEL-3 engineering for Northstar is now complete, with estimated capital costs of roughly $600 million — about $100 million higher than earlier projections due to soil and logistics factors, though the process modules came within 2% of the prior estimate. An expansion to approximately 150 million gallons a year at Gevo North Dakota, effectively doubling output, has engineering, permitting and initial equipment procurement underway, targeting 2028 completion.
A February 2026 debt refinancing redeemed about $68 million in RNG bonds and consolidated borrowings into a $175 million loan facility plus a $20 million revolver, freeing up more than $35 million of previously restricted cash. Cash and equivalents stood at $78.9 million at quarter-end, down modestly from $81.2 million at the start of the year, but with restricted cash fully eliminated. Separately, corporate cost-optimization initiatives are expected to deliver run-rate savings of more than $5 million in 2026, and the Silsbee, Texas specialty-fuel operations are converting from a cost center to an expected profit center this year.