Aemetis Inc. (NASDAQ: AMTX) reported second-quarter 2026 results that signal a visible operating inflection, as the company achieved positive operating income and adjusted EBITDA, propelled by strong performance in its California-based businesses and the initial recognition of 45Z tax credits. Revenue increased 20% year-over-year and 15% sequentially to $62.7 million, falling short of consensus estimates of $68.6 million, but the underlying operational metrics painted a more favorable picture. The revenue miss was largely attributable to timing of tenders in India, while both the dairy RNG and ethanol segments delivered higher volumes, improved gross profit, and increased environmental credit contributions.
Gross profit improved to $13.5 million from a loss of $3.4 million in the prior year period, and adjusted EBITDA reached $9.7 million, a significant turnaround from negative $5.8 million in the same quarter last year. The company's normalized EPS loss of $0.11 beat consensus expectations of a loss of $0.24. The positive results were driven by quarterly 45Z credit recognition, higher renewable natural gas (RNG) production, and improved ethanol economics, which more than offset weaker India revenue due to tender timing.
The dairy RNG segment remains the clearest growth driver, with sales volume increasing 38% year-over-year to 146,900 MMBtu. Segment gross profit rose to $4.0 million from $0.9 million in the prior year. The company has seven approved LCFS pathways with an average carbon intensity of negative 380, which are already enhancing credit economics. Additionally, six more pathways are nearing approval, and two digesters are expected to be commissioned in the third quarter of 2026, providing further runway for higher production, profitability, and cash flow.
The Keyes ethanol plant continues to advance its earnings improvement plan, with mechanical vapor recompression (MVR) targeted for operation by the end of 2026. Management estimates this could generate approximately $32 million in annual value through reduced natural gas usage and incremental LCFS and 45Z benefits. These operational improvements could materially strengthen the company's earnings profile beginning in 2027. However, the balance sheet remains the primary constraint on the investment thesis, with only $1.0 million in unrestricted cash and $415.9 million in total debt. Progress on refinancing is crucial to translating operating improvements into durable free cash flow.
The quarter underscores that Aemetis is making meaningful progress in its core operations, particularly in the RNG segment, which is benefiting from favorable regulatory support and growing demand for low-carbon fuels. The company's ability to secure additional LCFS pathways and commission new digesters will be key to sustaining momentum. Meanwhile, the market will be closely watching the company's ability to address its liquidity position and refinance its debt, which remains a critical factor for long-term viability.
