Alto Ingredients Flips to Profit, Eyes Green Future with Tax Credits

PEKIN, IL – May 06, 2026 – Alto Ingredients, Inc. (NASDAQ: ALTO) today announced a significant financial turnaround, reporting a profitable first quarter for 2026 that stands in stark contrast to the substantial losses of the prior year. The renewable fuels producer credited a combination of strategic operational overhauls, favorable market conditions, and the initial impact of new federal clean energy incentives for its robust performance.

For the quarter ending March 31, 2026, the company posted a net income of $4.0 million, or $0.05 per diluted share. This marks a remarkable $16.0 million improvement from the $12.0 million net loss reported in the same period of 2025. Gross profit saw a similar reversal, reaching $9.2 million compared to a gross loss of $1.8 million a year ago. The positive results signal that a multi-year effort to streamline the business and enhance efficiency is bearing fruit, positioning the company for sustained performance in a volatile market.

A Turnaround Years in the Making

The strong start to 2026 builds on momentum from late 2025 and represents a pivotal shift for a company that navigated consistent losses through 2023 and much of 2024. This quarter’s success was not an anomaly but the result of a deliberate strategy to fortify the company’s financial foundation.

President and Chief Executive Officer Bryon McGregor emphasized the depth of the operational improvements. “In a seasonally weak period for Alto and the industry, we delivered profitability on an adjusted EBITDA and net income basis through the contributions of strong export sales, higher crush margins and incremental earnings from Section 45Z tax credits,” McGregor stated in the company’s press release. Crucially, he added, “Even without the contribution of the tax credits we were profitable.”

This underlying profitability points to the success of what McGregor termed the company's “strategic realignment.” Historical data shows a challenging period with net losses of $12.0 million in Q1 2024 and $13.5 million in Q1 2023. The shift to a $4.0 million profit this quarter underscores the effectiveness of initiatives to reduce structural costs and enhance plant efficiency. Adjusted EBITDA, a key measure of operational profitability, further illustrates the turnaround, improving by $9.1 million to $4.7 million from a negative $4.4 million in the first quarter of 2025.

The Green Catalyst: Leveraging Tax Credits and Carbon Capture

A significant new element in Alto's financial picture is the Section 45Z clean fuel production tax credit, part of the Inflation Reduction Act. The company recorded $3.9 million in earnings from these credits in the first quarter alone. This tax credit is designed to incentivize the production of fuels with a lower carbon intensity score, rewarding producers for reducing their environmental footprint.

Alto Ingredients is actively positioning itself to maximize this new revenue stream. Research indicates the company expects to qualify approximately 90 million gallons of its annual production for 45Z credits, potentially generating around $15 million in net proceeds throughout 2026. This provides a predictable, high-margin income source that de-risks investments in cleaner production technologies.

Beyond the immediate financial boost from tax credits, Alto is focused on a broader decarbonization strategy. McGregor highlighted the company’s focus on “optimally monetizing the value of our biogenic CO2 production across our facilities to lower our carbon footprint.” This isn't just a talking point; it's a core part of the company's capital planning. The 2026 capital expenditure plan includes installing a new CO2 tank at its Columbia, Oregon facility, a direct investment in the infrastructure needed to capture and sell this valuable co-product. This strategy was bolstered by the 2025 acquisition of Alto Carbonic, a CO2 processing plant that has already improved the profitability of its adjacent ethanol plant.

Operational Agility and Diversification

While green incentives provide a powerful tailwind, the core of Alto's recovery lies in its operational execution and diversified business model. The company has moved beyond being a pure-play ethanol producer, leveraging its assets to generate revenue from specialty alcohols for consumer and industrial products, as well as essential ingredients like high-protein animal feed and corn oil.

This quarter, the value of that diversification was clear. The company’s consolidated return on essential ingredients—a measure of co-product revenue relative to corn cost—improved significantly to 53.4% from 48.2% a year prior. This was achieved alongside better crush margins, driven in part by a decrease in the average cost of corn per bushel, which fell to $4.58 from $4.81 in Q1 2025.

The company has also demonstrated market agility by strategically shifting production to meet demand where it is strongest. A key example is the focus on producing ISCC-certified (International Sustainability & Carbon Certification) renewable fuel, which commands a premium in European markets where demand for low-carbon fuels is robust.

Looking ahead, Alto Ingredients plans to continue this focus on operational excellence. The company has a $25 million capital project plan for 2026 aimed at improving plant utilization and reliability. Projects include a Pekin dry-mill debottleneck to add capacity and Pekin dock repairs to improve logistics. “Looking ahead, our priorities are straightforward: improve utilization and reliability; execute our 2026 optimization and capital projects on time and on budget; and leverage the flexibility we have with multiple revenue streams to respond to market shifts and perform profitably through commodity cycles,” McGregor said. Management will host a conference call later today to discuss the results and provide further details on its outlook.