Green Plains Q3 Earnings Call Highlights

Key Points

• Green Plains posted record Q3 adjusted EBITDA of $118 million, more than double the year-earlier result, while net income rose to $85 million. Revenue slipped 2.5% to $496 million, but stronger plant performance lifted ethanol crush margins; $65 million of adjusted EBITDA came from 45Z tax credits.
• The company raised its 2026 forecast for carbon-related adjusted EBITDA to $230 million–$250 million and expects at least $250 million from its low-carbon platform in 2027. It plans to transfer $250 million–$325 million in gross face value of 2026 tax credits, with cash proceeds reduced by discounts and related costs.
• Management expects Q4 gross margins to remain above historical averages, supported partly by exports, lower corn prices and low natural gas costs. Green Plains ended the quarter with $160 million in cash and $478 million in debt, and plans to increase growth spending on projects such as grain storage and efficiency improvements.

Green Plains NASDAQ: GPRE reported record adjusted EBITDA of $118 million for the third quarter of 2026, as improved ethanol plant performance and clean fuel production tax credits helped lift earnings despite a decline in revenue.

The result more than doubled adjusted EBITDA of $53 million a year earlier. Net income attributable to the company rose to $85 million, or $1.03 per diluted share, from $12 million, or $0.17 per diluted share, in the third quarter of 2025.

Revenue fell 2.5% to $496 million from $508 million, primarily because of lower ethanol volumes following the sale of the Obion plant, Chief Financial Officer Ann Reis said. Higher volumes from continuing operations and higher weighted average selling prices partly offset the decline.

Plant Performance Boosts Margins

Chief Executive Officer Chris Osowski said platform utilization recovered to approximately 95%, while production increased by 14 million gallons from the second quarter. Ethanol and renewable corn oil yields reached quarterly records, and energy use per gallon improved from a year earlier.

Consolidated ethanol crush margin rose to $123 million, or $0.70 per gallon, from $60 million, or $0.30 per gallon, a year earlier. Osowski said the margin improved approximately $0.11 per gallon sequentially, with most of that gain coming from plant performance, commercial execution and other factors beyond the commodity environment.

The Madison plant, which had extended downtime in the second quarter, achieved its highest quarterly ethanol production in more than 15 years of operation, Osowski said. Reis added that improved yields lowered the plant’s carbon intensity enough to qualify for a more favorable tax credit tier, generating approximately $6 million in additional credits during the quarter.

Of the company’s third-quarter adjusted EBITDA, $65 million came from 45Z production tax credit value, net of discounts and associated costs, while the base business generated $53 million, Reis said.

Tax Credit Agreement and Outlook

Green Plains signed an agreement in the fourth quarter to transfer a minimum of $250 million and a maximum of $325 million in gross face value of its 2026 tax credits. Buyers have an option to purchase an additional $30 million, depending on how much the company generates.

Reis said the face value is not a dollar-for-dollar contribution to adjusted EBITDA: cash proceeds reflect a transfer discount, and related adjusted EBITDA is also net of associated operating expenses.

The company had approximately $210 million in 45Z receivables at September 30. It expects to convert approximately $140 million of those receivables into cash during the fourth quarter and monetize its third- and fourth-quarter production in the first half of 2027.

Osowski said Green Plains now expects $230 million to $250 million in carbon-related adjusted EBITDA for full-year 2026, up from an initial expectation of approximately $188 million. The company also expects at least $250 million from its low-carbon platform in 2027.

Green Plains has introduced its Farm Forward incentive program at its Nebraska facilities to encourage recognized farming practices that can lower the carbon intensity of qualifying gallons. Reis said the program offers premiums of $0.05 to $0.25 per bushel, depending on a farmer’s carbon intensity score, but it was too early to quantify the program’s additional contribution.

Fourth-Quarter Conditions and Capital Spending

Imre Havasi, senior vice president of trading and commercial operations, said the fourth quarter started well and that Green Plains expects gross margins to remain above historical averages, even though industry margins are below levels seen during portions of the third quarter.

Havasi said seasonal weakness in domestic ethanol demand and softer renewable corn oil values were being offset in part by lower corn futures prices, robust export sales and low natural gas costs. He cautioned that delayed harvests and farmers’ reluctance to sell after corn prices fell could affect physical corn availability.

Green Plains forecasts U.S. ethanol exports of more than 2.6 billion gallons in 2027, up from an estimated 2.4 billion to 2.5 billion gallons this year, Havasi said. He expects the main export markets to remain broadly similar, with potential incremental growth in Asia and South America.

The company ended the quarter with $160 million in cash and $478 million in total debt. Capital expenditures were approximately $12 million in the quarter and $29 million for the first nine months.

Osowski said Green Plains plans to address some convertible debt in early 2027 and expects growth capital spending to rise from the $20 million to $25 million figure cited by an analyst for 2026. Projects include additional grain storage, oil recovery improvements and work to reduce natural gas consumption. The company will also weigh potential acquisitions and share repurchases against investments in its existing facilities, he said.

About Green Plains (NASDAQ:GPRE)

Green Plains Inc is a renewable fuels and agricultural technology company headquartered in Omaha, Nebraska. The company operates biorefineries in the central United States that convert corn into renewable, low-carbon products, including ethanol, animal feed ingredients and corn oil.

Its product portfolio includes fuel-grade ethanol for blending into gasoline, distillers grains and other feed products for livestock and aquaculture, and corn oil used in feed and renewable fuel applications.

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