ANNA — Q2 2026 Financial Report Analysis

Q2 2026: a full quarter of Italian gas sales lifts revenue 153%, but a tax benefit carries almost half of profit

AleAnna is a small Nasdaq-listed company that owns a 33.5% share of the Longanesi gas field in Italy's Po Valley, plus two small farm-waste biogas plants that sell electricity. It came to market in December 2024 by merging with a blank-check company (Swiftmerge Acquisition Corp.), and Longanesi only started producing in March 2025. That timing drives the year-on-year comparison. Q2 2025 held the field's first months of output. Q2 2026 is a full quarter at steady production. Revenue rose from $4.0 million to $10.2 million, and the 10-Q credits "a full period of production... from the five wells at the Longanesi field." Profit rose too, but the quarter's pre-tax income was only $2.1 million. A $1.7 million income tax benefit (a credit, not a charge) took net income to $3.8 million.

At a glance

• Revenue $10.2 million, up 153% year on year and about 9% on Q1 ($9.3 million). Nearly all of it ($9.5 million) came from AleAnna's share of Longanesi gas. The comparison with last year is flattered by Longanesi's mid-ramp start, while the change from Q1 shows how the business runs now.
• Pre-tax income $2.1 million, down from $3.8 million in Q1, yet net income went up. A $1.7 million tax benefit, which the company attributes to "temporary differences of its Italian subsidiaries", made up about 46% of the quarter's $3.8 million net income.
• $32.6 million of cash, no bank debt, and $7.1 million of operating cash flow in the first half. That paid for the first half's $5.9 million of capital spending, mostly a permanent gas-processing plant at Longanesi. Free cash flow (operating cash flow minus capital spending) was a modest $1.2 million.

Key figures

Operating margin is the share of revenue left after running the business, before interest and tax. Adjusted EBITDA is the company's own measure of earnings before interest, tax, depreciation and depletion, with stock-based pay and a one-off accounting adjustment also excluded. The EPS change uses figures rounded to the cent ($0.06 vs $0.01), so the 500% figure is approximate.

Where the money comes from

Longanesi gas is the business. The conventional segment earned $4.9 million of operating income on $9.5 million of revenue, a 51.9% margin, against $0.9 million a year earlier. Costs grew with production but stayed well below revenue: cost of revenues (gas tariffs, royalties and rent) was $0.7 million, field operating costs were $1.8 million, and depletion was $0.8 million. Depletion is the accounting charge that writes down the cost of the gas reserves as they are produced. AleAnna does not operate the field. Its partner Società Padana Energia (part of Milan-listed Gas Plus) runs it, so AleAnna's output depends on another company's operations, and the 10-Q lists this as a risk.

The biogas side is still losing money. The two renewable natural gas plants (Casalino and Campopiano) burn gas made from animal and farm waste to generate electricity, which they sell to the local state-owned utility. They brought in $0.74 million of revenue in Q2 but cost $0.75 million to run before overheads, and posted a segment operating loss of $0.32 million. A year earlier they made a $0.30 million profit. First-half renewable revenue was down 14% year on year. The plan is to convert these plants from making electricity to producing biomethane (renewable gas) for sale. Until that happens, this segment is a small drag.

Head-office costs jumped. Corporate general and administrative expense, which sits outside both segments, rose from $0.59 million to $2.68 million. The 10-Q attributes the increase in total G&A (from $1.8 million to $4.1 million) "primarily" to stock-based compensation, more staff and professional fees for running a public company. Stock-based pay alone was $1.35 million this quarter, against zero a year earlier, because the incentive plan was only approved in June 2025.

What the headline numbers hide

• Taxes, not operations, lifted net income from Q1 to Q2. Pre-tax income fell from $3.84 million in Q1 to $2.06 million in Q2. Over the same period the tax line went from a $0.44 million expense to a $1.74 million benefit, and a $2.3 million deferred tax asset (an expected future tax saving recorded on the balance sheet) appeared for the first time. Without the benefit, Q2 profit would have been about $2.1 million rather than $3.8 million. A benefit of this kind is not cash coming in, and investors should not expect it every quarter.
• Underlying operating profit was roughly flat from Q1, once two items are stripped out. Q1 included a $0.64 million gain from lowering the estimated cost of eventually plugging and restoring old wells (the asset retirement obligation). Q2 included $1.35 million of stock-based pay, against about $0.05 million in Q1. Excluding both, operating income was about $3.3 million in Q2 and $3.1 million in Q1. On the company's own measure, Adjusted EBITDA slipped slightly, from $4.29 million in Q1 to $4.14 million in Q2.
• Cash conversion is good, with one point to watch. First-half operating cash flow of $7.1 million roughly matched net income of $7.2 million. However, unpaid customer bills (accounts receivable) more than doubled, from $1.96 million at year-end to $4.66 million, while quarterly revenue rose only about 9% from Q1. The 10-Q does not explain the build-up. It may just be timing of gas-sale settlements, but if it keeps growing, cash would start to trail reported profit.
• "No debt" leaves out a sizeable bill owed to Enel. When AleAnna bought its Longanesi stake from Enel in 2016, it agreed to pay up to €24 million more once the field produced, linked to sales volumes and gas prices over the first 12 years. That contingent liability was carried at $27.4 million at June 30, and $11.8 million of it is classed as due within a year, equal to about a third of the company's cash. $1.2 million of cash is held as collateral against it. Higher gas prices increase this liability, so AleAnna keeps less of any price rally than the revenue line implies.
• Class A shareholders own only part of the profit. AleAnna, Inc. owns 60.94% of the operating holding company. The other ~39% belongs to the holders of Class C shares, which is why $1.44 million of Q2's $3.80 million net income went to "noncontrolling interests". Another 11.2 million public warrants and 26.0 million Class C shares, which can be exchanged for Class A, were left out of diluted EPS because including them would have raised it. Share count was not a factor in EPS growth: the weighted average rose 0.7%.
• Volumes and prices are not disclosed. The 10-Q and the earnings release give no production volumes or realised gas prices, so we can't split revenue growth between more gas and higher prices. Exchange rates also affect the US-dollar figures, because all revenue is in euros.

Takeaway: One partner-operated field now drives AleAnna's results, and it earns well: a 52% segment margin and enough cash to fund its own expansion. But this quarter's jump in net income came from a tax benefit rather than more gas. Pre-tax profit nearly halved from Q1 as stock-based pay and head-office costs rose, so the figure to watch is pre-tax profit, not EPS.

Outlook

Management gave no numerical guidance. It says cash on hand plus operating cash flow will cover operating needs "for at least the next 12 months." It also says it is exploring a reserve-based loan and other project financing, but "there is no guarantee that such financing will be available." Three items will shape the next few quarters:

• The permanent Longanesi processing plant. The field still runs on temporary processing equipment. The permanent plant is "expected to be constructed over the remainder of 2026 and early 2027." This is the main use of capital spending now, and it is meant to support steadier long-term output.
• Gradizza, AleAnna's first field it owns and runs outright. Construction began in Q2 2026, after Italian regional and national approvals for the production concession in 2025 and January 2026. AleAnna holds 100% of Gradizza and operates it. No first-gas date is given, so it is unlikely to add revenue in 2026.
• Reserves. The year-end 2025 independent reserves report (DeGolyer and MacNaughton) showed total proved reserves up 47% from year-end 2024 after adjusting for 2025 production. The company says Longanesi is on track to outperform its initial expectations, but without disclosed volumes that claim can't yet be checked against quarterly production.

Our read: with Longanesi steady, quarterly revenue has settled at about $9–10 million, and the 9% rise from Q1 suggests modest gains rather than a new step up. Earnings growth from here depends on Gradizza and the permanent Longanesi plant, both still under construction. In the meantime, rising head-office costs, the money-losing biogas plants and payments to Enel will absorb much of the cash the field produces. The Q3 report should show whether pre-tax profit recovers toward Q1's $3.8 million or stays near $2 million.