Aemetis, Inc

Hello and welcome to the AMETIS First Quarter 2026 Earnings Conference Call. Joining us today are Eric McAfee, Chairman and Chief Executive Officer, Todd Waltz, Chief Financial Officer, and Andy Foster, President of AMETIS Advanced Fuels. I will now turn the call over to Todd Waltz.

Thank you and welcome everyone. Before we begin, I'd like to remind you that during the call, we'll make forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995. These statements involve risk and uncertainty that could cause actual results to differ materially from those expressed or implied. Please refer to our earnings release and SEC filings for discussion of these risks. For the first quarter of 2026, revenue grew 27% to $54.6 million, compared with $42.9 million in the first quarter of 2025, with growth across each of the three reportable operating segments. Gross profit was $2.8 million in the quarter, a year-over-year improvement of nearly $8 million from the gross loss of $5.1 million in the first quarter of 2025. Operating loss improved approximately 60% to $6.3 million, compared with $15.6 million in the prior period. Net loss improved to $21.7 million, compared to $24.5 million in the first quarter of 2025. Production tax credits under Section 45 contributed $4 million of operating income during the quarter. $1.4 million in dairy RNG and $2.6 million in California ethanol, representing our first quarter of ongoing credit generation tied to quarterly production since 45Z eligibility was established in the fourth quarter of 2025. Adjusted EBITDA for the quarter was negative $1.3 million, reflecting typical winter seasonality with stronger revenue and mortgage and performance later in the quarter. Adjusted EBITDA and reconciliation of EBITDA to net loss as described in our earnings release issued earlier today. Cash and cash equivalent at the end of the quarter were $4.8 million compared to year-end 2025. Sorry, comparable to year-end 2025. Capital investments in carbon intensity reduction and dairy digester construction totaled $6.5 million during the quarter. With that overview, I'll turn the call over to Eric.

Thank you, Todd. I want to highlight three key takeaways from the first quarter of 2026. First, Q1 was a financial inflection point. We grew consolidated revenue 27% year over year, posted positive gross profit, and improved operating loss by more than $9 million. All three of our reportable operating segments contributed to this result. Second, we benefited from the California Air Resources Board approval of seven new low-carbon fuel standard pathways for our renewable natural gas business at an average carbon intensity score of negative 380 compared with the negative 150 default, which has been providing additional revenue at the higher LCFS value each quarter since Q3 2025. Six additional biogas digester pathways are nearing approval. These LCFS pathways approvals substantially expand the LCFS credit generation per MMBTU of RNG produced and will continue to drive meaningful revenue increases as we scale production. And third, our capital projects are advancing. We received the initial deliveries of dairy biogas pretreatment skids in April under our $27 million fabrication contract. Major equipment for the $40 million mechanical vapor compression project at our Keys, California, ethanol plant has arrived on site and construction has begun. In dairy RNG, we sold 110,000 MMBTUs in Q1, a 55% increase over the same quarter last year. With H2S cleanup and biogas depression equipment contracted for 15 additional digesters, and four of the equipment units already delivered by the vendor, we are on track to double our operating dairy network with construction into 2027. At our ethanol plant, the MVR project is on track for completion later this year. The system will use onsite solar and grid electricity to displace approximately 80% of the fossil natural gas consumption at the plant. We expect NDR commissioning later this year to add approximately $32 million in annual cash flow from operations, including additional 45Z and LCFS uplift from the expected reduction in the carbon intensity of the ethanol produced by the plant and cost savings on natural gas. In India, biodiesel revenue rebounded to $10.5 million in Q1, with the resumption of oil marketing company shipments under new contracts. This revenue growth supports our planned initial public offering of the India subsidiary, Universal Biofuels Private Limited, from which we have retained legal, accounting, and IPO advisors. Looking ahead, our focus for 2026 is scaling production, monetizing the stacked credit value of our renewable fuels platform, completing the India IPO, and the refinancing of existing debt into long-term financing. The principal catalysts we are tracking through the year include the publication of the updated 45Z CF Greek model by the Department of Energy to significantly increase revenues and margins, commissioning the MBR at the Keys ethanol plant, rising LCFS credit prices caused by continued quarterly credit deficits, and progress on the India IPO. Thank you to our shareholders, analysts, and partners for your continued support. Operator, let's take some questions.