Calumet Inc. (CLMT) | The Buildout — AI Infrastructure
The Verdict
Calumet is a specialty chemicals and renewables company. It refines crude oil into solvents, waxes, lubricating oils, white oils, petrolatums and esters, and processes renewable feedstocks into renewable diesel, sustainable aviation fuel and renewable naphtha. Its output reaches consumer and industrial markets, from packaged lubricant brands to asphalt and fuel co-products. On the AI-infrastructure build-out, the disclosed evidence shows no identifiable role: management never mentions AI, data centers or power demand on its calls, and the demand story it tells is about geopolitical oil-supply disruption and U.S. biofuel policy. The single adjacent thread is a supply-chain map listing electrical-equipment makers as buyers of transformer oils and insulating fluids — inferred, undocumented, and carrying no disclosed revenue figure.
| Market Cap | — |
| Revenue (TTM) | $4.6B |
| Revenue Growth | +12.8% |
| EBITDA Margin (TTM) | 3.9% |
| Net Debt | $2.1B |
| Earnings Beats | 3 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Adjusted EBITDA with tax attributes reached $175.2M in Q2 2026, more than double the $76.5M of a year earlier, delivered while running three planned turnarounds.
- Remaining MaxSAF Phase 2 capital is $137M versus the $1.2B contemplated in the original plan, with no third-party equity required.
- Specialty Products and Solutions adjusted EBITDA was $161.7M, more than double the prior year, on record specialty production above 20,000 bpd for a seventh consecutive quarter.
- Deleveraging accelerated: leverage below 4x, $100M of 2028 MIRA notes called, a $115M CMR truck-rack sale-leaseback repurchased, and the ABL upsized to $600M (+$100M) on 2026-09-14.
- The SAF ramp is contract-backed — a $1 to $2 per gallon premium over renewable diesel on 2- to 3-year evergreen terms that have continued to roll forward.
What We’re Watching
- Leverage is below 4x but not yet below 3x; total debt was $2,258.7M against $109.8M of cash as of 2026-06-30.
- Performance Brands adjusted EBITDA of $6.3M was down about $6.2M year over year, with a $7M LIFO headwind, despite volumes up 18%.
- Crude-supply concentration tightened to four suppliers providing about 98.8% of supply in Q1 2026, from 88.8% in Q1 2025.
- An EPA small-refinery-exemption update was released 2026-09-02 with no stated direction, and the winter reactor swap relies on a patent-pending polishing service not yet proven at scale.
On the AI-infrastructure thesis, the disclosed evidence does not support one — management's demand story is entirely geopolitical oil-supply disruption and U.S. biofuel policy, with no AI, data-center or power-demand mention on either call. As a business, the picture is strengthening: earnings inflected in Q2 2026, leverage is falling faster than framed a quarter earlier, and the path to ~200M gallons of SAF got far cheaper.
Earnings
Calumet reported Q2 2026 revenue of $1,445.1M and a gross margin of 1.3%. The standout print was Adjusted EBITDA with tax attributes of $175.2M, with cash flow from operations over $90M despite a $70M working-capital build. The company reported a net loss of $(95.9)M, which it attributed to non-cash RINs and other mark-to-market items.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.4B | $1.0B | $1.0B | +40.8% |
| Gross margin | 1.3% | -8.5% | -4.2% | +550bps |
| EBITDA | −$14M | −$130M | −$53M | −74.0% |
| EPS | $-1.09 | $-3.64 | $-1.70 | −35.8% |
| Adj. EBITDA with tax attributes | $175.2M | $50.1M | $76.5M | +129% |
| Specialty Products & Solutions adj. EBITDA | $161.7M | n/a | n/a | More than doubled |
we no longer have to do it as a prerequisite to grow our specialties business, which I think is critical.— Todd Borgmann, CEO, 2026-08-07
Management tone: Between the Q1 call (2026-05-08) and the Q2 call (2026-08-07), management's tone moved from repair-mode to confidence. It reported leverage below 4x and guided to surpass 3x next quarter, called $100M of 2028 notes, retired a $115M sale-leaseback, and re-scoped MRL monetization from a prerequisite to optionality. On the Q2 call it answered most analyst questions directly and deferred two sets of specifics — the CMR reactor economics and the MRL intercompany-payable mechanics — each with a stated future timing. The Performance Brands margin recovery it had pointed to slipped again.
Management Guidance
Calumet does not run a traditional annual EPS or EBITDA guide; it guides to operating and balance-sheet milestones. On the Q2 call management said leverage was below 4x and that it expects to surpass 3x next quarter, and expects Q3 Montana Renewables adjusted EBITDA to be "meaningfully higher," with a normalized Q2 run rate around $60M. It guides SAF to an 80–100M gallon run rate by year-end 2026 and over 120M gallons by spring 2027, and expects over $50M of CMR EBITDA between Q2 and the winter reconfiguration. The 10-Q forecasts 2026 capital expenditures of approximately $130.0M to $160.0M.
Trajectory
Revenue stepped up to $1,445.1M in Q2 2026 from $1,029.7M in Q1, about 40% higher sequentially, as Montana Renewables returned to full operation and asphalt season peaked. Reported figures label revenue accelerating while margin trends compress on a trailing basis, and the GAAP gross line is a poor guide — it swung from 34.7% in Q3 2025 to -8.5% in Q1 2026 and to 1.3% in Q2 2026 because it carries large non-cash RINs and mark-to-market items. On the company's Adjusted EBITDA with tax attributes measure the swing is clearer: the measure rose from $50.1M in Q1. The drivers management cites are base-oil tightness, the RVO biofuel margin reset and the SAF ramp.
The Model
The model projects FY+1 revenue of $5,285M and EBITDA of $534M, a 10.1% margin, then FY+2 revenue of $5,620.0M and EBITDA of $708M, a 12.6% margin. Near term, the anchor is the SAF run-rate ramp from about 60M gallons now to 80–100M by year-end 2026, alongside the base-oil margin environment. The FY+2 step reflects full ~200M-gallon SAF capability at 17,000 bpd of total fresh feed and the first results from the ~$50M specialties growth pipeline, which management says lands mostly in 2028.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $4.1B | $5.3B | $5.6B |
| YoY Growth | — | +27.7% | +6.3% |
| EBITDA | $268M | $534M | $708M |
| EBITDA Margin | 6.5% | 10.1% | 12.6% |
Projections are the median of 5 independent model runs. The model’s revenue sits 0.9% below analyst consensus.
Calumet does not run a traditional annual EPS or EBITDA guide; it guides to operating and balance-sheet milestones. On the Q2 call management said leverage was below 4x and that it expects to surpass 3x next quarter, and expects Q3 Montana Renewables adjusted EBITDA to be "meaningfully higher," with a normalized Q2 run rate around $60M. It guides SAF to an 80–100M gallon run rate by year-end 2026 and over 120M gallons by spring 2027, and expects over $50M of CMR EBITDA between Q2 and the winter reconfiguration. The 10-Q forecasts 2026 capital expenditures of approximately $130.0M to $160.0M.
What Could Go Right — and Wrong
- Leverage falls below 3x as guided next quarter, keeping the platform self-funding.
- Montana Renewables prints toward the ~$60M normalized run rate in Q3 as it runs full.
- The winter reactor swap completes on schedule and the polishing service holds the ~200M-gallon SAF path.
- Base-oil tightness proves structural, holding specialty margins into 2027.
- The ~$50M specialties growth pipeline clears FEL and enters the 2027–2028 budget.
- A repeat Montana Renewables outage or a delayed reactor swap pushes the SAF ramp out.
- Performance Brands recovery slips a second time, keeping segment EBITDA depressed.
- A crude-supply disruption hits one of the four suppliers that provided 98.8% of supply.
- An adverse EPA small-refinery-exemption decision compresses the renewables margin.
- A $1.00 rise in RINs prices costs roughly $65M of net income per year, widening the gap between reported losses and adjusted EBITDA.
Looking Ahead
Over the next 12 months the tests are execution milestones: the winter reactor swap, the SAF ramp to an 80–100M gallon run rate by year-end 2026 and over 120M by spring 2027, the leverage ratio crossing below 3x, and a Shreveport turnaround in Q4 2026 with no Q3 turnaround scheduled. The company also faces a September 2026 EPA small-refinery-exemption decision and investor-fraud investigation notices whose substance the source does not state.
- Q3 2026Q3 Montana Renewables print — Tests guidance of "meaningfully higher" than Q2's $17M.
- Q4 2026Shreveport turnaround — Scheduled fourth-quarter maintenance at the Shreveport plant.
- Early winterSecond reactor swap — About two weeks of fossil-side downtime; polishing service.
- Year-end 2026SAF 80-100M gal run rate — First ramp milestone, up from about 60M gallons now.
- Spring 2027SAF over 120M gallons — Second ramp milestone toward ~200M gallons.
- Year-end 2028~200M gal SAF capability — Full build-out at 17,000 bpd of total fresh feed.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $4.2B | $4.1B | $4.6B | -1.2% |
| Gross Margin | 5.7% | 5.5% | 6.6% | 15bps |
| EBITDA | $186M | $268M | $179M | +44.4% |
| EBITDA Margin | 4.4% | 6.5% | 3.9% | +205bps |
| Net Income | −$220M | −$34M | −$137M | +84.7% |
| Free Cash Flow | −$123M | $57M | $150M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)6.6%
- EBITDA Margin (TTM)3.9%
- Net Margin (TTM)-3.0%
- ROIC3.8%
- FCF Conversion83.8%
- SBC / Revenue0.9%
The Company
Calumet manufactures, formulates and markets specialty products and renewable fuels. Its three reportable segments are Specialty Products and Solutions — solvents, waxes, customized lubricating oils, white oils, petrolatums, gels and esters — Performance Brands, which blends and packages products under the Royal Purple, Bel-Ray and TruFuel brands, and Montana/Renewables, which processes renewable feedstocks into renewable diesel, sustainable aviation fuel and renewable naphtha alongside conventional fuels and specialty asphalt.
The company is integrated: it refines crude oil and feedstocks into specialties and keeps the fuels and asphalt co-products, which management describes as a competitive advantage over competitors that must buy intermediates. It runs ten disclosed sites, including a 60,000 bpd Shreveport, Louisiana refinery, a 13,600 bpd Cotton Valley plant, and the co-located Great Falls, Montana assets where renewable fuels and specialty asphalt share fixed costs, workforce and services. International sales were less than 10% of consolidated sales in Q1 2026.
Business Segments
Competitive Landscape
Calumet competes product line by product line. The 10-K names ExxonMobil and Phillips 66 across several categories — paraffinic lubricating oils, paraffin waxes, packaged products and U.S. West Coast renewable fuels — alongside Chevron, HF Sinclair and Marathon Petroleum in renewable fuels, and Ergon and Cross Oil in naphthenic oils. Management frames the company's edge as integration and domestic, nearby crude supply. The same input-cost move that squeezes Performance Brands benefits Specialty Products, which management notes is 35 times larger by production.
- ExxonMobilNamed in 10-K filings across paraffinic lubricating oils, paraffin waxes, solvents, packaged products and West Coast renewable fuels; a neighbor read-through of its own call reports "best ever basestock margins" and that it is "leaning in as hard as we can" on basestock production.
- Phillips 66Named in filings as a competitor in paraffinic lubricating oils, waxes, fuels and West Coast renewable fuels; also a long-term feedstock supplier to Calumet's Karns City and Dickinson plants.
- ChevronNamed in filings in paraffinic lubricating oils and U.S. West Coast renewable fuel products.
- Marathon PetroleumNamed in filings in U.S. West Coast renewable fuel products.
- HF SinclairNamed in filings in paraffinic lubricating oils and paraffin waxes.
Supply Chain
Calumet buys crude oil and feedstocks from a very small set of suppliers, refines them into specialty products and renewable fuels, and sells into a customer base where no single buyer reaches 10% of consolidated sales.
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