Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 7, 2026 · Beat 3 of last 7 quarters
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Calumet's capital-efficient expansion of Montana Renewables—repurposing an existing reactor to boost SAF output to 200 million gallons by 2028—signals a shift toward lower-cost, faster renewable fuel capacity additions. The strong specialty margins and accelerated deleveraging also position Calumet to fund growth internally, reducing reliance on external capital. This could support the broader AI infrastructure buildout by freeing up capital for other energy transition projects.
Calumet delivered $175 million of adjusted EBITDA with tax attributes in Q2, driven by record specialty production and strong fuel margins, despite planned turnarounds at Princeton, Cotton Valley, and Montana Renewables. Specialty Products & Solutions EBITDA more than doubled to $161.7 million, while Montana Renewables contributed $17 million despite downtime. The company completed the first phase of MaxSAF-150, with the new catalyst meeting or exceeding expectations, and is executing a capital-efficient expansion using a second reactor from CMR. Post-quarter, they called $100 million of notes and repurchased a $115 million sale leaseback, reducing leverage. Performance Brands EBITDA declined to $6.3 million due to timing and LIFO effects, with volumes up 18%.
Management expects continued and accelerated deleveraging, with restricted group leverage expected to fall below 3x next quarter. They plan to complete the DOE modification and disclose full expansion details before the next call. The second phase of MaxSAF-150 uses a repurposed second reactor from CMR in a patent-pending polishing service, enabling best-in-class SAF yields with minimal byproducts. They expect to run at a 60 million gallon SAF run rate until reconfiguration this winter, then ramp to 80-100 million gallons by year-end and over 120 million gallons by spring 2027, ultimately reaching 200 million gallons by 2028. They also highlighted a $50 million EBITDA opportunity at CMR before the reconfiguration, and expect to deploy a $50 million growth CapEx pipeline in 2027-2028. The tone was confident, emphasizing strong margins, record specialty production, and a favorable renewable fuels market under the Set 2 RVO.
“In short, there's simply not enough base oil to go around.”
on Base oil market tightness
“We're looking at MRL monetization purely through the lens of shareholder value optimization, which is exactly where you want to be when approaching a potential transaction of that size with the value creation potential that it has.”
on Montana Renewables monetization
“We've not found the bottom of the voluntary demand.”
on SAF demand
How durable will high base oil cracks be? And how much of the margin gains are just pass-through of feed costs like VGO?
Scott Obermeier said the market is not short-term; structural impacts from the Iran war, Russian drone strikes, and refineries diverting to distillate will take months to stabilize. He expects tightness to continue through 2026.
What is your confidence level for full MRL contribution in 3Q '26 and second half?
Todd Borgmann said absolutely yes, citing July ramp and normalized run rate of ~$60 million. He expects meaningful improvement in Q3 as the market reacts to the RVO.
Can you share the cost of the reactor project and the yield loss at the conventional Montana plant?
Todd Borgmann deferred details but said a good chunk of CMR EBITDA will be traded for a much larger number at MRL with massive cost savings. Bruce Fleming added that CMR will keep asphalt and gasoline racks open, maintain employment, and only rearrange black oils.