Alto Ingredients (ALTO) reported its fifth straight quarter of positive gross profit, operating income, net income, and adjusted EBITDA, while raising its expectations for 2026 clean fuel tax credit earnings. During its Nov. 4 earnings call, the company disclosed that third-quarter gross profit fell from a year earlier due to narrowing industry ethanol crush margins. Adjusted EBITDA was $21 million, and consolidated net sales reached $258 million. President and CEO Bryon McGregor highlighted that core operations drove the results, with additional contributions from 45Z clean fuel production tax credits.
Third-quarter gross profit declined by $8.7 million to $14.8 million, primarily due to a drop in the industry crush margin from $0.41 per gallon to $0.30 per gallon. Despite the year-over-year decline, McGregor described the margins as healthy and profitable. Alto sold 89 million gallons of renewable fuel and specialty alcohol during the quarter, with an average price increase of $0.14 per gallon. Essential ingredient sales rose $5.5 million to $58.8 million, supported by higher prices and slightly greater volumes.
Alto recognized $7.6 million in 2026-vintage 45Z tax credit earnings during the third quarter, bringing the year-to-date total to $15.8 million net of estimated transaction costs. The company expects to monetize those credits in the first half of 2027. Alto also signed its first multiyear agreement with a local farmer cooperative to supply low-carbon-intensity corn for its Pekin campus, covering up to 20 million bushels. McGregor noted that the company is working on additional agreements to source qualifying corn for its Columbia plant.
Alto completed shipments under a renewable fuel export contract and shifted sales toward the domestic market, where returns are currently more favorable. The company is on track to complete several capital projects, including a dry mill debottlenecking project at Pekin and a third carbon dioxide storage tank at Columbia. Third-quarter operating cash flow was $13 million, supporting a $6.5 million line-of-credit repayment and $4 million in capital expenditures. Alto had $24 million in cash and $108 million in total borrowing availability at quarter-end.