LanzaTech Global (LNZA) 9 Aug 232023 Q2 Earnings call transcript

Good day, and welcome to the LanzaTech Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.I now hand the conference over to Omar El-Sharkawy, Vice President of Corporate Development. Please go ahead.

Good morning, and thank you for joining us for LanzaTech Global, Inc.

Second Quarter 2023 Earnings Conference Call.

I'm our today, CEO, Chair call Dr. the joined Board by and On quarter. our highlights this financial presentation XX-Q performance Geoff with Holmgren; our an and CFO, Jennifer and investor release press Trukenbrod.Earlier for results ending XX, our key with and as report issued as a quarter quarter the quarterly company's morning operating on summarizing the Form XXXX the the for second June operational XXXX, and SEC filed we well our results Relations today's be of statements. forward-looking we Both and and found of company's in direct our www.lanzatech.com.Before the can release investor presentation disclaimers the to investor press summary at to may like the section begin, that presentation call include the front you you and Investor I'd website remind our beliefs, plans, goals, forward-looking projections, strategies, are assumptions forecasts statements Any describing and statements. expectations, may our company's such are reasons, risks the beyond that the forward-looking note and prospects the principal our could our and Exchange Commission for and Securities business, actual many a statements results. by which future affect Please from of identify control.Please filings recent variety results that those with uncertainties anticipated which see of differ publicly We to statements. obligation update forward-looking assume no any

remarks providing In business directly prepared the comparable for GAAP the we from including earnings the addition, call of turn additional Jennifer. release Jennifer and review At of detail measures results. their execution on then priorities, financial I'll most questions.With will a an non-GAAP from to in insight model our line results remarks, with recent certain these the providing growth and provide be financial update that conclusion business. our and reconciliation including to open quarter and over Please the measure.Today's greater will see non-GAAP and for Geoff into our will will we second our financial today, filings EBITDA. overview measures discussing XXXX adjusted our of of begin these call

for everyone joining to thanks And Omar. us you, Thank today.

to change our vast a and urgency National commercial align strategies. environmental As sustainable carbon important cost waste countless it and caused quarter exacerbated advance that $XXX In is disruption the the of effects change, supply, the States weather business U.S. economy continue and second have climate of creating to mission alone models Administration, demonstrates recycle evident. world's climate carbon impacted the Nino return data climate El NOAA, more billion. safer lives early the last increasingly disasters the and alone, totaled Oceanic the globally.According we to on acting and year of by the United Atmospheric social of This in than is commercial, how becoming

enabled on our like to the half second capture Within centered waste but that capacity This within XXXX supply value.LanzaTech's around creates scale. how year. fiscal technology not it the progress. will now with Slide our completed of annual this up, and numbering the as to carbon can materials we're performance means utilization of by the chain.Turning own from of year the approach global a installed results priorities scaling presentation. the a X translates production execution by on locally did last continuing the raw first way domestic this roughly that sourced every its We're I'd framework old to LanzaTech's work paradigm twice execution quarter reorienting local Our make this the which carbon the amount up of so into by share doing outlined in year, results, that world demonstrates quarter our and benefit as is uses of secure country

production. to we time from our laboratories plants.Second, across our global our quarter, and In recordable foremost, had global injuries safety. offices injuries the and and X lost First commercial operations X scale second

gallons target are than cumulative or over by XXX,XXX XXX grow [Technical per tons XXXX. XXX% to million end capacity We year year a more approximately capacity installed over Difficulty] on per XXXX by the to of

can on You X. Slide see this

the deployment XX,XXX a ethanol bio facility in In scale fully XX per a gas. were existing of that Europe, plant European Pines equate carbon samples Georgia can it commercial our Indian produced May. jet of year gigaton million over technology scale venture includes are This This Oil, include Fuels Importantly, will follow production in commercial Union.In LanzaTech operational and per Freedom convert on Once XXX,XXX from year footprint India expansion something successfully at make the planet a commercial will rich commercial to this that to second world's SAF to cumulative full refinery tons X the alcohol or towards abatement, see fuel, you and new will year. to with every at ethanol ethanol to first and the the a partner, carbon as needs.Turning of the the our first XXXX, partners in marks that Slide what completion urgently gas ArcelorMittal, started expected late up towards X. where facility project production. me is aviation ethanol. This is is carbon the plans ramping up the partner refinery atmosphere year is year. progress gives the plant additional installed the for facility removing of a currently the sustainable XX,XXX be the [Technical continues reactors facilities alongside operational, based off dioxide LanzaJet per in scale are from geographic using of solution mill facility confidence China, a India, initial these per facility at capacity nameplate we fourth quarter. LanzaJet XXXX ton gallons production to Once first produced progress to joint refinery SAF, Commercial quarter.In tons the scale make being to will off ton in of dioxide Difficulty] our our capacity our in this commercial growth full continue of XX,XXX ferroalloy

progress Fuels, extremely aviation of certification the well necessitating the Freedom of agreement SAF India. would This LanzaJet Airbus has to drop Most process. to Pines and which the of represents to and a And SAF, they our addition aromatics which made with jet eliminate market.Earlier in for Indian be XXX% benefits, tremendous Canada. SAF aircraft March, production this would the or shown development to SAF first XXXX in MOU this explore understanding LanzaJet the a memorandum of including an in fossil infrastructure.In Jet with development NRC LanzaJet to the announced changes a to of controls reduction any at as with In additional building entered use positioned in adoption plant Oil continues facilities fuel, the bring in fuels LanzaJet will also eliminate year, collaboration collaboration use study emissions which addition, with Australia. entered by ultimately the for and ATJ the need in Australia in accelerate alcohol Zero will advance of the existing without particular production to recently,

business, doing produced are project These include I'm utilize proud in several will projects a a U.K. the waste-based through SAF a feedstock and received strong our progress as other SAF Department which United grant the the LanzaTech the platform. projects $XX last from ethanol SAF for Transport in million late the that Kingdom, work the year. with We of leader as shareholder is we're advancing building LanzaJet position in also market.Together excited LanzaJet, they're of about the making meaningful

further execution that to this to associated provide now For as for and revenue and quarter. the Technip technology project, projects awarded Zealand $XXX it with strong XX% LanzaTech reflects with the engineering the the We front-end then to with industry growth. XXXX, very our be commercial global a priority, subsidiary Ample in demand helping our and of currently million field of revenue reflect XXXX.However, design million. to range commercial than due XXXX to revenue the now we're water a tightening the aviation and us, guidance or and that of produce half to more grow also to for and New our updated selected retailer, revenue The SAF. second XXXX transition with Air million with robust project.In to Zealand behind our we're revenue moves guidance food Group in provider addition, and driving range associated awarded forecast. LanzaJet, bolstering our Zealand for land, corporation calendar saw the Energies of contract we're stage waste greater in growth New The consistent continues first our impacting original on outlined feasibility of executing, resources.Let's expected our convert line of visibility beyond. is carbon and XXXX our $XXX narrowed and resulting growth higher footprint the for increases XXXX This proud million owned our $XX.X the setting to energy Slide capacity XX, is $XX the their previously its outlook.Our products Ministry as business. pipeline and turn local critical fuel Business reduce to a XXXX end of revenue into largest for to New half a growth is wholly revenue year-on-year Innovation SAF way The timing third ethanol million to Employment a into the utilize New back-end study projections year $XX performance part LanzaTech G-Energy, without Zealand's guidance and for the and was of continues provided ethanol

engineering. progression various We are moving projects pipeline individual and stages steady pipeline the funnel projects to the continue of add through to of through seeing

second to In the additional fact, stage our growth longer-term pictures. second will and the at we several into short, now projects projects medium advanced saw engineering of X through advanced revenue half during anticipate the look and progress quarter year.Let's engineering move the

as contract goal. biorefining, industry are research and circular CarbonSmart, a carbon work new of joint to line, and business development We each a that And towards a we economy. contributes creating vision

such global adidas from Energies, partners which deployment ecosystem and key BASF H&M [indiscernible] and are and We product assembling in to like and resulted Move, chain On product Zara, a Technologies supply participants also Technip project ], ecosystem lines including carbon Primetals in Coty, partners in stores [ NextChem Tadweer as the in players developers Italy. ethanol.This on in Gucci our making includes this now XXX% the a East with waste Rome. with fragrance complete contains year, that and progress NextChem Middle as new We're engineering with such processors captured both of including

to we category. that while squarely into fit bridging single plugging we different existing we're don't a build value have We means chains new system. a circular partners, to these material immediate With acknowledge impact, industries

different revenue these and So streams business lines, our work projects XXXX. how go growth.Starting our can I hope sales line, key revenue incoming through to break that as business effectively with contracted most on several and to second equipment we biorefining drive half the we next of of are in contributing committed significantly expect we services down packages our

continued alcohol in to expected and as in On several on on-projects Project third the other Gale commence and to well engineering our integrated India. jet SAF India, we Australia, year, well Bridgestone, as others.Initial Wales, in including side, this services fourth Woodside from projects are other which and Dragon fermentation with with quarters equipment expect package in call sales as X significant projects we as in gas from Woodside contributions project the

commercial XXXX see customer second we contract performance, of the XXXX.In development and XXXX research business the be to For half contributing many our lower half line from of contract to joint business brand line, of showing verticals the or demand committed footprints chains. campaigns CarbonSmart partners in product line, revenues top we our of in for supply their planned continue the that revenues solutions expect the fueled across year second our by to consumer multiples under carbon

technologies. As demand, of a create utilizing new we customer pathway collaboration to our recently Technip this joint recent evidence to combined a agreement Energies ethylene with signed sustainable

is pipeline for Primetals channel to Technology, access we us the Just expect strong [indiscernible] helping sector.Longer better to term, chemical our like the laying market, project foundation progression. revenue Technip with

we in Over stage be will through to we advance several continue the deployment pipeline. quarters, as projects the next the

our a in the While numbering early-stage Geoff come like the services engineering then construction. revenue sales engineering our moments, highlight engineering of in packages to from additional that will from execution action.Moving insight near-term the I'd from priority, and will biorefining of and pipeline provide into workings to projects move into of bulk the adjusted advanced is strategy as EBITDA. our fourth advanced equipment This engineering up to few

positive achieve our business, we're the forecast EBITDA of adjusted XXXX pipeline a Given continues reiterating expand. our seeing we to across momentum are as by strong to end the commercial

are million, loss the first the to first the second during the Turning Adjusted performance. EBITDA XXXX adjusted cost half EBITDA year. million.There of half negative to $XX.X factors for EBITDA adjusted bringing of quarter to totaled contributed have loss negative several back recent now for $XX.X that the the

the compensation throughout development we will growth of facing the [indiscernible]. talent expansion and organization. we and dynamic, development teams people XXXX a The multiple of board, supply our teams accelerate for with combined upward but of we these pressure and increasingly moving projects very saw forward in months. XXXX, across intermediate demonstrations addition, retaining used will engineering retention that our Isopropanol and which an increased Like project especially Brookfield, schedule look including has continued macro and be companies, within support are our on chemical key projects This into our of early-stage these associated scale. We to across announcement expedited on is co-developing market. other to can First chains. our attracting groups. microbe strategic project with led expansion to first in strategic investment soon.In We pride overall expense.Finally, at our of pipeline ourselves focus making we is in the are with on coming job our competitive costs that in isopropanol-producing ahead top of in enter engineering the several

process project previously. over that versus of the has a rate expectation products, second-generation around to numerous same Suncor. a For to turn forecasted including the $XX flexibility revenue use sharing quarter adjusted fifth continued our partner, $XX applications in big between I've Alberta, people our year.Given industries, taking our anticipate in billion a of polypropylene, building and to to be factors had our in negative automotive, a more our and and market the of the Since of just growth things. hard last well medical, XXXX.Moving we're million partners year, at several example, EBITDA Canada, $XX size isopropanol negative initiatives, mentioned, in million demonstration-scale positive to second Once to our packaging, on in will deal LanzaTech make continued market $XX biorefining and used operation construction.This along this by is competitiveness. will full-year $XXX on negative confident the medium important deployments EBITDA progress fluctuations microbes can third as bioreactor This we range XXXX investment our to to million the priority, adjusted to term, half cycles. negative guidance execution with facility which of with end advantage the potentially XXXX allow our of improved the We again, growth our guidance has the million demand as updates updating switch as been XXXX remain support in and resources, supporting design commercial

First, our insights and provide our year.With think financial details the isopropanol-production on to the through to which our go the Geoff the demonstration business. the revenues we call please cost to means ahead. on ahead on growth second about investment. our for how LanzaTech further royalty microbe forecasting partners optimization as ethanol of half this are over to into share of previously, XX%, turn and performance production I'll Geoff, design it lastly, the for of that, to of improving and sales mentioned schedule in our greater yields revenue.Second, reduces XX% partners, up return the by for And improves

with of provide a then you our our quarter and on recap second and and business good growth. color forecasting us. incremental I'll to about Jennifer, results start morning. you, our Thank first everyone think model how some joining Thank to

recently services our half second million As and $XX.X our biorefining quarter first in the seen reaching XX% reached quarter from contract Total development ongoing line and carbon category on by driven totaled Slide projects.Research development includes of million. initiated and for XX XXXX several presentation, joint forecast. million, $X research and was and grew work, in utilization of engineering CarbonSmart million mainly the on revenue, $X.X our year-on-year $X.X work with revenue revenue which revenue the capture

and have more filled.Cost back-end previously generation through SAF a our over we and the the same of call U.K., anticipated which quarter sales margin the for second we on our year projects targeting quarter-on-quarter the half cost pipeline revenue project to progress services of margins year.The in XX% to As be Dragon significant campaigns gross next. the increased are additional and than is decline the the attributable during and and this Dragon. we XX% this suggested, significant project, consistently in of revenue growth Project and continue CarbonSmart XX% revenue biggest last period largely into this The year, the have to the second as are engineering quarter other average of on biorefining year-to-date to for higher year over ethanol reflecting form the realized integrated course weighting year-over-year services engineering one of of in year gross waste-based will lower quarter-on-quarter revenue the contribution more sources the from in

with own the of margin operating opportunity commence compensation costs.The expenses margin for year-over-year and in adding jet for coming which to obligation to an retention do operating in progress growth government priorities, while year, year-over-year the and the our committed consistent our platform mainly months, improvement reflecting company one the public and strategic XX objectives, of develop the and cost operating to and component expansion a expanded our higher SG&A strategic our mix progressing increased component combines our gross contract technologies expenses, services are with projects continuing have people project.We XXXX we second With a teams teams to to million expenses critical overall projects XXX we revenue regards forecasted services, of bring we XXX to talent have key compared professional headcount increased over XX% as contract, engineering into $X.X people, we negative as efforts integrated project. prioritize engineering fermentation anticipate higher-margin as our process source increased our associated as is latter micro and gas those expense ongoing to that a result in as as rights given costs The beyond investment certain cost from reflect, the to Still, execution share expedited our of as ethanol and of commercialization growth improvement the in of the in our in development in well XXXX this facility, to ongoing innovation increase more of XXXX. commercialization alcohol activities flagship with investments in our development from the microbes.The pace fermentation producing gas development in project in in well us exciting this in revenues Brookfield going gross sales of efforts, However, the this work research part, a partnership. quarters. XXXX half on people record second quarter, approximately the several to expect last and great

expenses adjusted as the and and of second validation, stock half several the mainly the million. was of with less be negative the the employees.Net in onetime professional with million $XX.X expenses first the business expenses was than we services operating the accelerated in to negative in compensation-related EBITDA first loss closing in half half, experienced awards expect vesting quarter associated associated of from various XXXX transitioning restricted We $XX.X level

in our aspects the our the and into and growth where to the future cash business quarter opportunities balance of equivalents, XXXX.Taking business sheet. and headed believe approximately business adjusted mainly the picture consideration planned our to strategy, the today's importance LanzaJet We in reiterate onetime loss quarter. adjusted more in U.S. shareholder negative company's EBITDA EBITDA we the EBITDA XXXX other initial the guidance, cash, our normalized lower the LanzaJet and first securities totaling first extremely of want quarter short, minor to of to the year a the long and horizon execution these of related expense restricted impacts million certain faster way, from multiple view previously Cash Turning combination now that timing, In gross first our in our the Said nor a our provides onetime EBITDA half viewing participation expense outlook adjusted pleased $XX.X that related shifts we to large-scale the the net full change another onetime exclude business project costs, accelerate is Treasuries path in EBITDA the $XX.X XXXX with services, updated our occurred end in was not loss accurate we're half negative shows positive exited guidance professional performance.With to year loan with We million, excluding planned million to registration $X.X operating $XX.X was million, we in stronger cash result profit our ever.Turning of reflect in not the of this of over will approximately due the costs alongside projects. of and from of that timing nature than believe significant between $XX.X a million. of for shareholders. medium-term first to mostly investments did onetime and to negative strategy, business for today's million. the growth updates XXXX the plan our run revenue investments updates We to adjusted associated recast quarter rates. with in burn which are our adjusted during $XXX.X

to positive to second well flexibility we financial current our in burn With we our are growth to growth. the now the capitalized cash turn to adjusted achieve EBITDA XXXX, with reduce to about in objectives.I'd our adequate expect of year. late in on believe achieving like to We continue confidence liquidity, think forecasting how a combined that discussion half our with

and engaged the Many contribute and Over last several our this with to results. community. feedback through neutral how understanding the projects think and extensively clearly the We pipeline of color months, investment how them with the its in lifestyle X gates, financial and platform incremental With on can interest model little cycle. financial on we expressed stage unpack generate a stage. to represented the of on line, of about advance operating series contribution Slide it financial of in and where provide which of these the Slide presentation.For the development through more the development biorefining our buckets services we've customers, XX principles drivers further of here. key mind, core we've the XX.First, where typical We stages a about each the I'd laid stage distinct prominent for some to to second, plant forecasting our out you some think license our business technology like see revenues in development licensing want we you

First, the is broken and categories, B, up engineering; early-stage engineering; C, construction. advanced development into main X A, stage

stage, and sale of associated we revenues well from services this our revenues equipment. realized During engineering the start-up as with as

feasibility XX% recurring revenues, the as through effectively including results.During microbes enter projects our stage typically in partner all plant's as our current on royalty are our key likely have of projects monitoring pipeline package Bridgestone. process, our or will typically include advanced a this progression significant BEP each the TEA, results is and Rome especially of contracting LanzaTech in consumables of revenue, as engineering construction at Examples will pipeline revenue media services economic project between construction We sale tied upon stage a software, and finance projects feasibility phase.Once through advance or will analysis with early this project, [indiscernible]. with an a provide complete that to startup. approximately basic to the move and detail to first we project near projects positive of a integrated begins over the positive includes its TEA engineering of a based engineering the project customer completing and of our XX% in Prior BEP.The to that to stage, designed factor licensees engineering. the a of running stage technical paid what substantial investment in in now output, of project is by the to forecast engineering and opportunity advance how to commercial our that risk the high-margin is turn We in to $X development next of XXX% see appropriate operating the gross completed at moving help second optimize a positive in to financial the pipeline A ongoing added customer a with commitment under preliminary important the services project variety periods in yielding analytics stage and development the that XX% While long-term the proprietary of additional of our the It in along components we as to entering advanced begin we approximately is portion the is We SAF million Approximately BEP will engineering equipment we to to economic expect predictor NextChem performance. recently $X typically early generally do progress stage, probability that engineering. and to construction, which milestone pipeline, our well stage, commercial million, these our have pipeline projects equipment stages earned opportunity of with stage.In to projects well marks [indiscernible]. to stage, generating time. forecasted in a our a stage. operations the project of both the and for XX% their XX% facilities.I'll the study realized our of early engineering, engages ultimately apply not package, probability believe study, an stage provide forward engineering example the the with partner which results a realize recent those XX% the is where of

biorefining second, is XX long-term stage, of LanzaTech revenues million the X typically capacity, start-up services operations. of $XX sales the operating revenues and operational first, shift investments XX on basis through capital full million business construction a completion, recurring customers. we results the outlines typically LanzaTech results. of the several software we loyalties, revenues our the typically significant including project years. once of delays not that $XX to biorefining gross and enter percentages. pipeline. basis the on number involved the BEP, probability-adjusted geography; as This customers forecasting about is onto product are typically for months, to in project preconstruction of million.From scale that the We project commencing to ongoing annum streams; milestones, business but through TEA multiple the structured be the generates limited XX with integration licensee to not made the facility the decision-making commenced $X percent realizes ongoing the target precision.Slide of order of of sales BEP quarterly. in of in licensing high single-digit large a dollars to several monitoring result the XX in construction our completed, a KPI can services microbes revenue media, the our of we year. integrations $X believe to the These starts hundred range are is on challenges months a by dynamic ton deployment, can estimating construction advancing which illustrative each sale and XX royalty an on number then project are stage on on line rates the XX projects Slide it shown operating and annual with licensing completed, and revenues in services.Our believe the XX,XXX development million operations.Given we on the the XX. think It in to royalty and this our and to and and project Therefore, facility and a The depending of the through be investments BEP anchor over high contribute some to with in depending LanzaTech the equipment phase. quarterly project the developed constructed begin buildup the construction revenue the size to basis factors to These uncommon products by on for line Once the projects a in sales each ranging the to projects from in in approximately time project training During it stances million and anticipate associated engineering to probability XXXX the proprietary from helps construction packages on of and key current componentry economics and start-up there's And also to of time the Once location. has of is approximately months lines of per contribute based face and XXXX in

expect with As But expand of be revenues It's earlier these pipeline base revenues building we a long-term onetime this attractive also of on partner on dynamics of remember revenue many during projects. important the margins for extremely kind discussed bit new earned licensed facilities to demonstrated, are our first wanted recurring LanzaTech.Jennifer revenue that assets while you dominated will these operating are plants. our opening year. the the I of to development would near-term streams at a by progression stage, up based

the first plant held example, first is which utilizing joint plant LanzaTech plant structure fourth Shougang. Therefore, with is in biorefinery first a in associated facility partner recurring revenues of our the simultaneously For refinery with the plants China royalties new venture different and our LanzaTech pipeline. our these and off-gas.Our third and in Europe of the licensing are not project indicative is through the from the in current India, look

year-on-year expect prioritize a the and and overall new for of microbes As development smaller component our mentioned back be grow medium on to continue modestly drive will Slide joint to work help roadmap contract process term.This revenue and in XX, we optimizations. research

now CarbonSmart place plants customers more to our the from online turn revenue open supply remarks we LanzaTech the medium closing Q&A. and the as Jennifer? call improve for secures before year-on-year over expect plants to back chains.I'll and call for these supply into some over offtake Jennifer CarbonSmart partners We term come significantly to

Thank you, had business. Geoff. our another with quarter strong across In growth summary, we continued

XX% half XXXX year-on-year grew XXXX. of revenue half first Our compared the to first

focus to Our rest results we guided is of the the and for squarely on year. the business the execution market delivering

joining carbon value solutions sectors one as who And positive shift help they LanzaTech partners heavy a the care our a economy. across share Time proud forward from evidenced represent liability.Customers to of XXX the airlines industry as ranging being the to deliver look as carbon paradigm other us multiple world.Thank for profit by many and continuing to a in in circular can as vision lines changing creating more to please. of we opportunity Q&A while sustainable to that carbon center We named the to future are influential treating Operator, cost I from for and personal of results make for I and team most your becoming continue so am can recently than turning now you all. companies rather companies the support. us a an deliver alongside open a companies audacious a champions for to carbon you see

Leo Instructions] [Operator comes Mariani first question The Roth MKM. from from

to second of the could I guys in revenue the little you kind guidance. growth hit do bit $XX revised was to million more hoping half of expected get around on midpoint year. we the of need a like Looks the the detail

the major projects of a Just sense that are trying get contribute. what to

on the well ramp the Indian see Belgium. half? going of other can that from as here you here call. some mentioned just about plant ArcelorMittal the as to of in you're also the the plants Presumably, ramping second But talk You Oil sort plant in Dragon maybe that revenues key drive

this Thank your provide going pass you Geoff, Geoff I'm to please more can Leo. detail? you one question, over address. for to to

Sure.

for plants plants little coming growth the bit function of year of for the it's of our but that revenue the that online, in in largely terms remarks are partners or we've that a that Woodside, projects along. We Gale, are -- coming the a them of prepared So stage are already, et the development are a back half, mentioned are some the couple cetera. I mentioned in Bridgestone, announced stage the that in that with increasing work NextChem, development

our in positive and So, work some of margin and mentioned, in first improvements we of will of half to services be the others. see also the we expect as Project we equipment of kind half, engineering over back gross the did the year, revenues which expansion Dragon

Do a the kind And previously that a than Okay. about the to right revenues? fact with growth to of about feel in light of spoken basis. on still number next be year XXXX, respect on then guidance greater that's that you have you guys 'XX guys year-over-year Xx the bit you confident here little revenue thinking reduced

Yes, we do.

by that. break to of continuing type to -- In a positive think of has kind up it's but get even of that XXXX us sets year, we're And take growth slipped from the to into for revenue fact, of that revenue the EBITA [indiscernible] continue out we EBITDA XXXX to growth. to we of number that going do next end revenue that that nicely believe type

to It 'XX. we bit X quarter XX%, color spoke Okay. the and gross last more it mean, quarter, wanted looks XX% XX%, briefly in of margins. progression third if in gross XQ margins the quarter XQ here I your in was have 'XX. get of And little I see second then the fallen. in you terms a the about like can of

So help progression with unfold here some numbers should this? be second the maybe how we here expecting in on out you us half? Can that

absolutely. Yes,

previously. some seen So gross we expect it margins to revert you've to the of

pretty the being our half on Contract sorry, a part half were share cost of some revenue significant from most first dragged margin being actually heavily and the that from revenue based our share the to quarter component This the the component the kind we're standpoint the government.There's mix, negative Dragon Project doing revenue gross It's the margin. first in and Dragon work the Project provided mix quarter gross first significantly contract research and margin. cost component of just runs weighted down work Dragon year -- at in of this U.K. of -- effectively negative that a that's that with gross of funding a results a in mix sorry,

up for we're So and our gross is down. of margins really and actually doing We it important 'XX us in great project, bringing milestones it. excited Again, that late think work all about it's XXXX. a sets

project. rights that the development of to own continue We

margin And of be in additional about so that's excited it the our is will sources on drain these But inversion the gross That by models. [indiscernible] are half and year, in again, very that a it. to some XXXX. diluted we're why we'll back some revenue of online see coming

a then of on expense, quarters. up looks just And R&D last bit like Okay. the couple that's in gone fair

I the first half was it's in this think It quarter. million you $XX per quarter, $XX quarter to guys are million million of in back of 'XX. $XX $XX running kind the million now

some clear wasn't about going R&D number. kind were of crystal talk those some into guys if You It to of the onetime me. wasn't did start-up costs. I sure expense

a second going to to Do that So run I'm R&D quarterly falls the million Is rate in of half sense. that $XX trying you get down this year? here? expect the go just from

is to amount declining percentage, fairly it's the historically R&D although So our consistent. a be people we biggest as -- and think component it's our Largely, of staff. the biggest people, of been, OpEx our going our has

R&D And staff so year-over-year. did the increase

So people driving our significantly attention for this dotcom year [ as to some and what's [indiscernible] stock noncash expense pretty deployed an as incentive we that's well largely that as as term. have comp ]

our some in some development. these of up money accelerate makes as well some on of majority have so the And expenses facilities with increase third-party microbe doing actually the the been of additional some R&D There with that that associated we're so. just to was our non-CapEx associated that well, spent with non-ethanol basic -- we expense.There associated combination some improving as contract as it maintenance work some and

Okay.

if the So, like I you hearing sounds R&D second of pretty mean right. is saying half, 'XX half first similar you're it I'm to

for Pretty [indiscernible]. steady state

Montgomery. from line from Janney the Thomas comes Meric question next of The

in on a in to projects especially of and terms are those few little relative many dig How to where are with development, questions. pipeline Brookfield attributable to wanted a of bit Just FID? stage projects Brookfield

group. to expect we North we next to projects and we yet. are haven't Europe first investment. all a number bit Brookfield, America, of them Thank quarter year. On quite for -- them made you to have we couple We've get hired and or by for in that question. of a the expect quite FID leader of the a a and of named They We've

Aura pipeline early know, either least by work Brookfield focused project she to us year. or getting And one you comes is to As FID next end of the year this team at the and that is from on Shell. leading

few financing with And kind partnerships Brookfield it's something other a stepping little blueprint bit, or And arrangements of this the that similar do commercial partnership, back a is is, are oneoff coming to in nature? types to follow-up other think in think next for maybe do the do there or you potential a more of you years?

is I plants. first believe just focused of us out the build infrastructure, absolutely, Brookfield in partnerships multiple So that on investment helping i.e., are

think partnerships the see I across of such multiple such the more do And pipeline discussions you'll have in so globe. we and

As focused on, we and North what are of know, scale in is is other Europe America Brookfield to the looking, of you course, and well parts world.

the do since going just is Brookfield. about for partnerships working the to that us So it's you there relation are we've across having to of asked discussed world think multiple been and market. building partnerships, is types that.I quite partners be we in also channels on financing to infrastructure our other we've important worth, and And

announcement an saw to petrochemical create the They us are demand in help you think Technip. I sector. going with

also solid our municipal to with channel pipeline of and us pipeline, projects. solid one a stronger with in the a partnership steel Technologies. ferroalloy.And a also waste waste working who's partners space, municipal You in to Primetals market is create to They're NextChem, a saw

types which to creating industries but channels in us along. actually multiple actually those of who the is we're the other market, one pulling So people financing are embedded is side, which the

then I Freedom going us stake if what's Pines. to forward to? milestones needed wonder want specifically. And as what if completion you Just update do equity mechanical X year need on increase could quick your to ones for you you on this hit it's operating,

question. Great

milestones let -- So me the tackle the first.

the a milestones taking depend our investors up other license. for on equity So stake

goes developing LanzaJet working already LanzaTech. projects. investors. when up. projects license, The pipeline Shougang Freedom as is Dragon as When Mitsui and those Pines into also They're know, and Fuel current developing their with LanzaTech's investment comes with an British of a a equity is So as that Project you with pick example play Airways investors up

And every shareholding completion start-up. For first part of license and takes that one mechanical X licenses take, goes our will that mechanical through months.The X for required LanzaJet equity completion. next the up. to they what's be the Right second funded the investor for question happening that is of is over now, the fully

LanzaJet by being complete cetera, the should the much no construction play, limits, the installed. play, the progress are being the to last installing then already should year. jet be of of actual So battery And that. alcohol to modules the stop XX plan from tremendous We're installed. the is plant, in all the -- the battery the stages limits, no will of in mechanically so the this contracts There gauge, of additional rest is et that work, cash And by and outside required. be team. end inside in -- be also that's the is nothing being All there in all

Molchanov The from James. next from Pavel comes question Raymond

oil in guys. of kind Belgium, and projects the project zooming on high in pretty steel for profile Maybe you

the we the just what's happen the process commissioning of year? of on the an get and where now and to is in end facility going kind between can First, update

a because largest is high-profile sitting the that's project steel Yes, ArcelorMittal Europe also Western in company. and

completed the have plant. We construction the of

So commissioning stage. works the that's stage really it's in and hot the last

in ethanol started the we fact, In inoculator June. produced and

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commissioning hot work days the say, XX I to and the would up We next, the expect bioreactors. XX max to start complete then in all

fourth of -- year. be in certainly be quarter operating this the will we So should

move income production terms as into And what of in projects statement, QX? financially, the LanzaTech actual said changes in as you

production be the will that anything add Do change to change that want Geoff? biggest the would will from we will see. you receiving of to revenues key The that, licensing That be Right. be ethanol. you

up have coming a production No, microbes see say, material we revenues the year being my placed recurring hinted they are I mentioned, it's It particularly royalty of of media, kind also yes, was in are our the of year, volumes is that plant Europe there pipeline, the Jennifer off side, with we products but rest first-of-a-kind to start associated to we'll what services. addition material our revenue seeing so plant. going that up just until this our of and in be in other the set was the economics in the slightly like -- ArcelorMittal royalty so remarks. than as But closer plant.Again, of and won't some and do end the software consumable then starting different

it mean, zooming you handful Chinese The Shougang doing will do out Because Maybe companies with maybe as the Obviously, that production U.S. of a think for is Okay. quite of kind involved been whole China moment. just a you very a bandwagon? green in nascent. while. well. steel steel in guys space feels Europe-centric kind pretty have this I with on for When like of it's jump

furnaces major steel and arc such. recycling in U.S. I versus already cetera, think towards sector I scraps, has running about et transition electric when a think been green actually there the steel,

Pavel. I think you know this well, quite area

and to steel other in what or is because produce something decarbonizing in which is carbon and steel fact capture much a coke-oven monoxide-carbon world, only sector that so couple like they transitioning of is technologies quite directly type there's the produce. on those they're our so steel sequestration of do going the type something carbon don't parts So doing the like require U.S. plants the technology, is of U.S. hydrogen.But which to in of the based linked the of dioxide

I different looking your it's at hear views know So been on you've landscape. I'd love green to a quite that because steel.

which guys in Arcelor, Well, transition. are involved you far with most the by the globally is active

months. on next updates over good, we'll forward So X the look getting to Belgium

from Curran Tom The Research from Partners. Seaport comes next question

follow-ups LanzaJet. Just on X

provide offtake capacity for agreements update with already buyers of Pines and Just other SAF you us contracted? anchor color or a would year plant? First, that progress the how on much per gallons is some million Freedom of XX

of All took The in it. LanzaJet investors fuel. the all

provide XXX%. else. to nothing anybody So there left to It's was

fast fall to not constrained seems abundance plant supply surprised for in waste-based side to if and lack potential viable the ATJ human in when stated That's factors of is the of drop comes into for it main biorefining next a SAF in consternation for short options such that plus in growth industries which targets.Given of availability. determining my how making about biorefining the combining grow? technology, for process remains Yes. with a potential resource license rate? take diversity that segue a lot availability well hear seems you a LanzaTech's the it -- LanzaTech do solving for governing role I'm a continue are lead the for which to and kind LanzaJet to is ambitious a nice economically as Where feedstock to for there or ATJ of SAF ethanol could be are a is idea consumption that, aviation focused maximizing What think SAF, you license could The combination therefore, need the dilemma. production drop global question,

is stage our next the That's pipeline. in Absolutely.

stage. technology. New combined selected feasibility have will you Zealand the for the New the Air I ethanol the government LanzaTech-LanzaJet and think As least announcement waste-based And that alcohol plus solution, saw next Zealand at to you know, the jet the

waste You fuel. municipal Middle East, probably the solid is in aviation saw to Tadweer that project that

And so LanzaTech LanzaJet. both that combines and

focused projects That build the to the be Pines very drivers think we go next the ourselves announced stages. Zealand. be, as to those go going is and are We I lot I But already Tadweer key know, built more we're a Fuels pipeline. on I Freedom faster a fast we'll are very build, drop going feasibility see the year, we a lot those, as give have that soon ethanol on of something start plants only We've but that very, think second will to out. piece the early couple of one, of that.And next New cheaper think certainty. price continue is portfolio, And the the of in in stages we plant.So which waste you will as to as multiples and there are part is then it the that to to of -- the the will be

question Ernes is of Stifel. next from [ The from Sean line ] the

as near achieved you've the move you the facilities could you cost efficiencies? For my start-up any design improvements slated you XXXX and expected from these And year, commercial in to whether X on learnings as of perhaps you savings plant operations in driving bacteria under first one, terms high-level and/or engineering reducing year? first that build could this facilities additional offer are to characterize changes commentary the of any times some of this

going being they to a that of not they faster right? go reduced costs come that multiple pipeline. in because EPCs going one the know understand and They're now, replication, offer sell efficiencies to we vendors So kind compressor, know because have and technology which doing is can we're able replicating, to what they we're right are with sell the equipment from our work

we're lot right the bioreactor. announced, simple our we're coming we costs on a on of seeing as we've also where replication.Now just worked have So based that now are down second-generation

cost that it the Suncor savings at yield. -- and the cost they'll significant in of that give the field time, demonstrated us improve plant improve same because the will it but have at the the just of We will reduce also, will plant, not

really Just that the combination model from you that the and from improvements that just and of everything bioreactor like combination part business like the total second-generation cheaper come so you that saw of helps. fundamentally of the plan.So the IRR our in The And improve technology of solar, the gets, the right? more right? build, see It's part will that replicating. you'll

highlighted. there scale, highlighted how for certainly line demonstration production operation? of market basis, schedule XX sense. the of you are remarks demonstrating of Makes follow-up, frame the that at And Maybe to end as from are you these prepared you at microbes ahead your a Slide my opportunity isopropanol looking stage and in commercial is that you you microbes large progressing in time using a the could

which isopropanol our Absolutely. that use microbe ahead our schedule, in XG testing plant actually, our were doing well. second-generation -- testing jumped opportunity. isopropanol as on in is that microbe the for the our If at The we continue and all second-generation is on with year. that very, ready that we has jump quite us there. we have pilot. of at as what plant next microbe our we to reactor expected, were good bioreactor, should allowed lab we the bioreactor with there The Suncor, And work done had Suncor, ethanol looking well very commercial It things completed

we timeline acrylics as other in be have of microbe.Quickly So our for that that the and is microbes, useful applications. that acetone on very the heels producing which, will will you know, be

again, the the timeline. XX in so to that's XX commercial pipeline. next is That, in what's And

to session. Holmgren I for now you you. like over back question-and-answer Thank to you. closing to turn Jennifer concludes Thank and This would our the any conference remarks.

our you you appreciate really Thank the and public us presence. so different year economy. supporting a for taking everybody for time, especially the to our create to journey carbon joining much I during of first

thanks So again joining for us.

gentlemen, Thank has you now the presentation. today's and you very conference Ladies much. attending Thank concluded. for

may You lines. your disconnect now