LanzaTech Global Inc (LNZA, Financial), a pioneer in carbon recycling, announced its financial results for the third quarter of 2023 on November 9, 2023. The company reported a significant increase in operating revenues, which reached $19.6 million, marking a 143% rise compared to $8.1 million in the third quarter of 2022. This growth was primarily driven by the biorefining business's engineering and other services revenue as projects advanced, and a 34% year-on-year growth in the CarbonSmart business.
Financial Performance Overview
Cost of revenues increased to $14.4 million in Q3 2023, up from $6.0 million in the same quarter of the previous year, mainly due to higher revenue performance and engineering costs associated with Project Dragon in the UK. Despite the increase in costs, LanzaTech improved its gross margins to 27% in the third quarter of 2023, a 10.5 percentage point increase from the second quarter of 2023, thanks to a beneficial shift in revenue mix.
Operating expenses for the quarter totaled $29.8 million, reflecting a 31% increase from the prior year. This rise was attributed to headcount growth and the expansion of key teams to accelerate project development. However, operating expenses saw a 9% decline quarter-on-quarter compared to Q2 2023.
The net loss for the quarter was $(25.3) million, compared to a net loss of $(22.3) million in Q3 2022. Adjusted EBITDA showed a quarter-on-quarter improvement of 20%, resulting in $(19.1) million for Q3 2023, due to higher gross profit and sequentially lower operating expenses.
Operational and Strategic Highlights
LanzaTech made significant progress in its operations, including the successful startup at IndianOil Corporation’s refinery off-gas facility in India, marking the first commercial-scale deployment of LanzaTech technology in the country. The company also advanced its first two projects expected to co-develop with Brookfield in Europe and delivered Basic Engineering Packages for multiple projects, including Project Dragon and a plant in Rome, Italy.
Furthermore, LanzaTech's Freedom Pines Fuels facility is anticipated to complete construction by year-end, with operations starting in early 2024. The company also announced a joint venture in Saudi Arabia to accelerate the commercial deployment of its carbon recycling technology.
Balance Sheet and Liquidity
As of September 30, 2023, LanzaTech had a total of $136.9 million in cash, restricted cash, and investments. The company expects to see ongoing improvements in cash flow from operations as it progresses towards becoming cash flow positive. Additionally, LanzaTech revised the accounting treatment of the Forward Purchase Agreement in its financial statements, reclassifying certain amounts to equity and non-current liabilities, with no impact on liquidity, cash flows, or results of operations for the third quarter.
For more detailed information on LanzaTech's financials, including the balance sheet and statements of operations, please visit GuruFocus.com.
LanzaTech's CEO, Jennifer Holmgren, commented on the company's commitment to achieving long-term climate goals and deploying industrial decarbonization solutions on a large scale. She highlighted the progress made across the company's pipeline of commercial development projects.
Investors and analysts can access a replay of the conference call discussing the financial results until November 23, 2023, and an archive of the webcast will be available on LanzaTech’s website for twelve months following the call.
LanzaTech's mission is to transform waste carbon into sustainable raw materials, contributing to a future where carbon is reused rather than wasted. The company's technology platform uses various waste feedstocks to produce sustainable fuels, fabrics, packaging, and other products, aiming to create a circular carbon economy.
This summary provides an overview of LanzaTech Global Inc (LNZA, Financial)'s financial results for the third quarter of 2023. For more in-depth analysis and detailed financial data, please refer to the full earnings report and visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from LanzaTech Global Inc for further details.
