Aemetis (AMTX) Q2 Revenue Falls 33%

Aemetis (AMTX -5.06%), a renewable fuels producer with operations in California and India, reported its latest quarterly results on August 7, 2025. The release highlighted a sizable revenue miss relative to analyst expectations, with reported GAAP revenue at $52.2 million compared to the $77.5 million consensus estimate. This 32.7% GAAP revenue shortfall was primarily due to lower-than-expected sales. Aemetis also posted a net loss (GAAP) of $(23.4) million, down from $(29.2) million in Q2 2024, but still reflecting persistent negative cash generation and high financial leverage. While the company made tangible progress in expanding its renewable natural gas (RNG) output and advancing several technology and efficiency initiatives, these developments have not yet resulted in positive earnings or a turnaround in operating cash flow. Overall, the quarter adds to Aemetis’s operational foundation but keeps financial risks and uncertainties at the forefront heading into the second half of fiscal 2025.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Recent Focus

Aemetis specializes in the production of renewable fuels: ethanol, biodiesel, and renewable natural gas. It operates a major ethanol plant in California and a large biodiesel plant in India. The company’s approach aligns with global priorities on reducing carbon emissions and dependence on fossil fuels. Key revenue streams come from the California Low Carbon Fuel Standard, U.S. federal Renewable Fuel Standards, and Indian government mandates for biofuels.

In recent quarters, Aemetis’s main business priorities have included technology-driven efficiency initiatives, expansion of renewable natural gas capabilities, and the development of new lines such as sustainable aviation fuel (SAF) and carbon capture. The success of these efforts relies on ramping up production volumes, capturing environmental credits, and navigating government-driven demand—especially in India and California. Regulatory compliance and the ability to monetize new tax credits are also central to the company’s strategy.

Quarter in Review: Key Developments and Data

The quarter’s most notable theme was the large revenue and earnings miss versus expectations, with GAAP revenue of $52.2 million falling short of the analyst estimate of $77.51 million. Reported GAAP revenue of $52.2 million represented a sequential improvement from Q1 but a drop of 22% compared to the second quarter of 2024. The shortfall was most pronounced in the India Biodiesel segment, where sales dropped sharply. Only 25.2% of the segment’s nameplate capacity was utilized, and both sales volume and average selling price declined. Biodiesel revenue in India reached $11.9 million, with 9,400 metric tons of biodiesel sold at an average price of $1,010 per ton—about 54% fewer tons and a 13% lower average price than in Q2 2024. Management cited ongoing volatility in government contract timing as the cause. These swings in India’s biofuels business have emerged as a consistent risk.

The California Ethanol segment also saw reduced output and sales compared to Q2 2024. Ethanol gallons sold totaled 13.8 million, down from 14.8 million in Q2 2024. The plant ran at full capacity (100% of nameplate capacity) but was below the 108% utilization level achieved in Q2 2024. Average ethanol price in California increased only marginally to $2.01 per gallon Wet distillers grains, a co-product, saw slightly weaker pricing in the prior fiscal year.

Renewable natural gas (RNG) operations were a bright spot. RNG revenue was $3.1 million, with production of 106,400 million British thermal units (MMBtu), a 21% increase compared to Q2 2024. The company also sold 763,600 Renewable Identification Numbers (RINs), up from 341,000 RINs in Q2 2024. However, average prices for Low Carbon Fuel Standard (LCFS) credits and RINs were down, which limited the financial benefit. Seven new dairy RNG pathways gained approval from California regulators, setting the stage for potential revenue expansion in coming quarters.

Operating performance reflected ongoing cost and margin pressure. Gross loss (GAAP) widened to $(3.4) million on higher cost of goods sold relative to revenue. Selling, general and administrative expenses (GAAP) decreased to $7.3 million from $11.8 million versus Q2 2024, in part due to lower asset disposal charges, but remained elevated relative to scale. Interest expense (excluding accretion) increased to $12.3 million due to high levels of debt, which remains a persistent challenge. At the end of Q2 2025, Aemetis had just $1.6 million in cash (GAAP) and faced $247.6 million in current long-term debt (GAAP), with total liabilities far exceeding assets and a stockholders’ deficit of $(289.3) million (GAAP).

No material one-time gains or expenses were recognized in the period, and the company did not declare or adjust any dividend.

Growth Initiatives, Innovation, and Business Mix

Aemetis continues to invest in projects aimed at reducing costs and carbon intensity. A key example is the mechanical vapor recompression (MVR) system at the California ethanol plant. This technology is designed to cut natural gas use, allowing future eligibility for federal Section 45Z production tax credits, which could substantially increase cash flow starting in 2026. Most of the $3.6 million in capital expenditures was allocated to this project and the ongoing construction of new dairy digesters for RNG production.

The RNG business, branded as Aemetis Biogas, expanded with seven new digester pathways receiving approval and a $27 million agreement signed for more dairy digester infrastructure. Aemetis now operates 11 digesters and expects further volume growth from additional dairies coming online. Executive commentary reaffirmed the expectation that LCFS credits and RNG sales from these sites could eventually contribute up to $60 million in annual credit revenue once the portfolio is fully operational.

There was also continued progress in project development for sustainable aviation fuel (SAF) and carbon capture, although these remain pre-revenue. The Riverbank site for future SAF production, along with associated CO2 sequestration facilities, advanced in permitting, engineering, and development activities. Management said progress on these fronts depends upon further clarity from regulators and completion of financing arrangements.

To position the India Biodiesel business for growth and a possible public offering, Aemetis brought in a new CFO with IPO experience and continues to target an India subsidiary listing in early 2026. While IPO proceeds could eventually benefit parent company cash flow, no benefit is expected until after the listing. In the current quarter, this segment’s operating volatility continued due to shifting government orders—an enduring risk for future results.

Looking Ahead: Guidance and Items to Monitor

Looking forward, Aemetis management projected a "significant ramp in RNG revenues starting in Q3 2025," driven by additional digesters coming online and regulatory approvals unlocking new revenue streams. The company also anticipates financial benefits from the federal Section 45Z production tax credit and the impact of completed technology projects in the California Ethanol segment, though these are not expected to make a material contribution until FY2026.

Investors should monitor the speed and scale of the RNG business expansion, the actual realization of new environmental credits and tax incentives, and the pace of capital raising or asset monetization—especially as balance sheet risk and limited liquidity were highlighted by the quarter’s results. Continued swings in India Biodiesel volumes and further clarity on SAF development also remain critical for upcoming periods.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.