Aemetis, Inc

Good day, ladies and gentlemen, and welcome to the AMETIS fourth quarter and full year 2025 earnings review conference call. Joining us today are Eric McAfee, the chairman and chief executive officer of AMETIS, and Todd Walsh, chief financial officer. I would now like to turn the call over to Mr. Todd Walsh. Sir, the floor is yours.

Thank you, Ollie, and welcome, everyone. Before we begin, I'd like to remind everyone that during this call, we'll make forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Please refer to our earnings release and our SEC filings for discussion of these risks. For the fourth quarter of 2025, revenue plus tax credits totaled $53.7 million compared to $47 million in the fourth quarter of 2024. Quarterly gross profit improved to $7.7 million compared to a gross loss of $2 million in the prior year period. Operating loss improved to $2.5 million compared to $13.5 million in the fourth quarter of 2024. The net loss improved to $5.3 million compared to $16.2 million last year. For the full year 2025, revenue plus tax credits totaled $208 million compared to $268 million in 2024. Operating loss improved to $37.2 million and net loss improved to $77 million compared to $87.5 million in the prior year. During the fourth quarter, ethanol and RNG operations generated $10.3 million of production tax credits, reflecting the growing contribution of federal clean fuel incentives to the company's financial profile. With that overview, I'd like to turn the call over to Eric McAfee, Chairman and CEO of AMS.

Thank you, Todd. Before discussing the business segments, I want to highlight three key takeaways from the fourth quarter and last year. First, our dairy renewable natural gas platform reached an important milestone during 2025, achieving positive segment net income and EBITDA, while production increased 61% year over year in the fourth quarter. We generated net income of $12.2 million in our biogas segment in the fourth quarter of 2025. We expect strong annual growth in cash flow and profitability from the biogas segment for the next four years as 45Z is implemented, and we continue to expand production. Second, during 2025, we continue to advance mechanical vapor recompression upgrade at our Keys ethanol plant. which is expected to increase plant cash flow by approximately $32 million per year when completed in 2026. And third, revenue from dairy RNG and ethanol production is generated by renewable fuel sales as well as environmental credit monetization, including LCFS credits, federal D3 RINs, and 45Z production tax credits. the 60% increase in the price of low-carbon fuel standard credits in the past nine months since the LCFS was extended by 20 years, and the recent Treasury guidance for the 45Z production tax credit are important contributors to our growth in revenue and cash flow. Our dairy RNG platform continues to grow production and is becoming a significant driver of revenue and cash flow growth at Ametis. During 2025, the dairy RNG business produced approximately 405,000 MMBTUs of renewable natural gas and expanded to 12 operating digesters. Looking ahead, we expect RNG production to grow during 2026 as additional dairy digesters come online, with equipment fabrication contracted for the H2S cleanup and biogas compression units for 15 digesters, which will double the number of operating dairies in our network. Turning to our California ethanol business, the Keys ethanol plant generated 158 million of revenue during 2025 and has approximately 65 million gallons of annual production capacity. We began receiving equipment on site for the installation of the mechanical vapor compression system at the ethanol plant for completion later this year. The MVR system is expected to reduce natural gas consumption by 80%, lower the carbon intensity of ethanol produced by the plant, and increase annual plant cash flow by approximately $32 million. In India, our biodiesel facility generated $29.7 million of revenue during 2025 and has significant available capacity to supply expanding government goals for biodiesel blending. Our plant has approximately 80 million gallons of biodiesel production capacity, along with about 8 million gallons of glycerin refining capacity. India continues to represent an attractive growth opportunity as a country focuses on the production of domestic renewable fuels to displace imported crude oil and to supply fuel to a fast-growing economy. We are expanding the India business into biogas production and sustainable aviation fuel as part of our work on an initial public offering of the India subsidiary this year. Looking ahead to 2026, our focus is on scaling production and monetizing the environmental credit values associated with our renewable fuels platform, as well as completing the India IPO and long-term refinancing of existing debt. Key policy developments include the finalization of the 45Z emissions rate calculation by the Department of Energy, further strengthening of LCFS markets, expanded ethanol markets via E15 blending approval in California, and biodiesel blending mandates in India, which are expected to support long-term growth in low-carbon fuels. Thanks to our shareholders, analysts, and partners for your continued support. Operator, why don't we take some questions now?