Why Is Gevo Stock Gaining Wednesday?

Gevo Inc. (NASDAQ:GEVO) stock surged Wednesday after the company reported better-than-expected third-quarter 2026 results.

The renewable fuels and carbon management company beat Wall Street’s earnings and revenue estimates, driven by strong growth in its carbon business.

Gevo reported adjusted earnings of 12 cents per share, beating the analyst estimate of 3 cents.

Revenue jumped 94.2% year over year to $82.95 million, topping the $54.41 million estimate.

CEO Paul Bloom described the quarter as Gevo’s strongest financial performance to date. He highlighted growing revenue and cash flow from compliance and voluntary carbon markets.

Gevo Revenue Jumps 94%, Profit Surges

Gevo’s carbon business drove much of the growth. Revenue included approximately $20 million from previously banked Canadian Clean Fuel Regulation (CFR) credits and approximately $10 million from additional CFR credits recognized during the third quarter.

Gross profit surged to $48 million from $13 million a year earlier.

Gross margin expanded to approximately 58% from 30% a year earlier. Excluding $20 million in nonrecurring CFR credit revenue, quarterly revenue still grew about 47% year over year.

Adjusted EBITDA climbed to $44 million from $7 million in the year-ago quarter.

Meanwhile, Gevo reported net income of $23 million, or 9 cents per diluted share, compared with a net loss of $8 million a year earlier.

The company ended September with $68 million in cash and cash equivalents. Third-quarter operating cash flow reached $41 million.

Clean Fuel Tax Credits And Production Expansion

Gevo secured contracts to sell $70 million in Section 45Z clean fuel production tax credits. These agreements cover substantially all its expected 2026 credits from ethanol and renewable natural gas production.

The company expects higher credit sales in 2027 as production expands.

Gevo plans to complete its North Dakota debottlenecking project by year-end 2026. The expansion should increase annual low-carbon ethanol production capacity to approximately 75 million gallons.

The company plans to roughly double annual low-carbon ethanol production to approximately 150 million gallons, with startup expected to begin in 2028.

Third-quarter ethanol production rose to 19 million gallons from 17 million gallons a year earlier.

However, renewable natural gas production slipped to 91,729 MMBtu from 92,396 MMBtu.

Gevo also continues to pursue commercial offtake agreements for its planned sustainable aviation fuel project.

Gevo Raises 2026 Earnings Forecast

Gevo expects its carbon business to generate more than $50 million in revenue during 2026.

The company raised its full-year adjusted EBITDA forecast to more than $90 million.

Meanwhile, Gevo raised its 2027 adjusted EBITDA forecast to more than $70 million from its previous outlook of approximately $60 million.

However, the 2026 forecast includes approximately $20 million in nonrecurring revenue from previously banked CFR credits.

Gevo expects recent changes to the 45ZCF-GREET model to generate more than $10 million in additional annual gross profit benefits from its existing renewable natural gas assets, subject to third-party validation.

Meanwhile, Gevo’s partnership with Praj in India aims to generate revenue through isobutanol technology licensing and catalyst sales, potentially starting in 2028.

During its earnings call, management emphasized disciplined capital allocation. The company plans to prioritize projects offering attractive risk-adjusted returns while preserving financial flexibility.

GEVO Price Action: Gevo shares were up 15.83% at $1.61 during premarket trading on Wednesday, according to Benzinga Pro data.

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