Earnings call transcript: Zeo Energy’s Q4 2025 highlights innovation and growth

Zeo Energy Corp’s recent earnings call for the fourth quarter of 2025 highlighted significant advancements in product development and strategic partnerships. The company, known for its innovative mineral and technology solutions and currently valued at $35.36 million in market capitalization, showcased its financial and operational progress, despite no specific earnings or revenue forecasts being provided. Zeo Energy’s stock remained stable in aftermarket trading, reflecting cautious investor optimism, though InvestingPro data shows the stock has declined 77.73% over the past year.

Key Takeaways

• Zeo Energy raised $1.8 million through a company-led placement.
• The launch of OzPoz, a high-reactivity medicalian, is gaining traction in multiple industries.
• The company secured a Japanese patent for its Zeolite technology.
• A Memorandum of Understanding was signed with Whole Shame Australia.
• Preliminary Feasibility Study (PFS) completion is targeted for Q2 2024.

Company Performance

Zeo Energy demonstrated robust performance by securing substantial funding and grants, including a $900,000 research and development incentive and a $145,000 grant from the Queensland government. The company’s innovative product, OzPoz, has been developed with over two tons produced in a pilot plant, signaling potential for large-scale application in various sectors such as methane mitigation and concrete enhancement.

Financial Highlights

• Raised $1.8 million through a placement.
• Received $900,000 R&D incentive.
• Secured $145,000 METS grant.

Outlook & Guidance

Zeo Energy’s forward guidance indicates a focus on completing its Preliminary Feasibility Study by the second quarter of 2024. The company is actively pursuing offtake agreements for its products and exploring early commercial opportunities for OzPoz. Additionally, on-site trials for its Zeolite technology are planned, with testing results from North American animal feed samples anticipated. InvestingPro’s analysis reveals a weak overall Financial Health Score of 1.57, suggesting investors should closely monitor the company’s execution of these initiatives. InvestingPro subscribers have access to 11 additional key insights about Zeo Energy’s market position and growth potential.

Executive Commentary

James, a company executive, emphasized the market demand for Zeo Energy’s products, stating, "Customers are actively seeking this product. They want it, they’re asking for it and they do need it." He also highlighted the environmental impact of methane, noting, "Methane is 28 times worse as a greenhouse gas than carbon dioxide."

Risks and Challenges

• Potential delays in feasibility studies and project development.
• Market competition in the methane mitigation and construction sectors.
• Regulatory challenges in international markets.
• Dependence on successful commercialization of new technologies.
• Economic fluctuations impacting funding and investment.

Zeo Energy’s strategic initiatives and innovative product offerings position it well for future growth, with ongoing efforts to secure partnerships and expand its market presence. The company’s ability to navigate potential challenges and capitalize on emerging opportunities will be crucial in sustaining its momentum.

Full transcript - Zeo Energy Corp (ZEO) Q2 2025:

James, Company Executive/CEO: quarter and also let you know what’s happening next. So I just brought a slide up there to summarize all the activities from the last quarter and quite a lot of things happening there. We’ve been very busy with a small team. First of all, very important or very importantly though is the MOU we signed with Whole Shame Australia. That was a major step forward in the company’s progress being such an important company in the world of building products.

So that was done first off. We then had made and delivered several hundred kilos of our OzPoz, high reactivity medicalian to the majority of major concrete cement companies in Australia. So a lot of work there, a lot of testing going on. Large samples were also sent over to Europe and The USA. Quite interesting that those opportunities all involve geopolymer applications, which is something that’s not quite so big in Australia, but it’s certainly very big in those parts of the world.

So they’ve had samples there testing. We also started some of our own testing, very important to get our own data which we can present. That data is ongoing, it’s going extremely well and we are planning to release that data as soon as it’s complete, which should be towards the end of this month or start of next month. During the quarter, we also produced just over two tons of Aus Pos in a pilot plant production. It took a while initially to get that going smoothly and consistently, but now we are making batch after batch every day, which has got maximum reactivity and very high grade materials.

So that’s been ongoing and it’s still ongoing. The PFS work, a lot of work go on that space. It’s going extremely well. We have now engaged consultants to cover every aspect of that PFS and to work closely with the ZA Tech team to make sure that we can produce a very professional PFS in the timescale required. And part of that process was to engage Tim Anderson, very experienced executive study leader, importantly experienced in the world of Kaolin studies as well.

So he’s helped tremendously and he joined during the quarter. We’ve got Geotech Drilling, that’s actually in progress right now at Tuondun. That is the final drilling required to give us our mine design. So once that’s completed in the next couple of weeks, then we will have all the data required to complete the mine design. Also during the quarter, we identified a potential site to produce our OZPAS in Bundaberg Port.

So lots of work gone into that aspect. And we also raised just over $1,800,000 through a heavily supported company led placement. So that gave us enough money to keep the company going and keep us going through our PFS procedures. Also during the period, we got $900,000 R and D incentive back and we got some very encouraging early stage results from methane control program, which involves the zeolite side of the business. The Queensland government, METS grant gave us $145,000 grant, match funding, very important to get that to help the PFS, not just for the financial also the fact that the Queensland government are very, very interested in what we’re doing now.

And once we finalize the PFS, then they’ll look very closely at what we’ve done and then we start discussions on how they’re gonna help us going forward. We got a Japanese patent granted for Zeolyte technology in Japan, so that was a step forward in the Zeolyte technology and we also been progressing some DSO opportunities domestically, interestingly enough, but also overseas where most of that opportunity lies. So a very busy quarter, lots going on. And question, what’s next? Well, now we’ve ticked off those activities and we’re looking forward to the coming quarter.

So the PFS will be completed second quarter this year. So that’s on track. It’s going very well and it’s going to be a very high quality PFS because we are making sure that we are keeping the project straightforward as simple as possible and using conventional technology. So that’ll be a high standard PFS coming out second quarter this year. We’re looking towards securing offtake agreements, so commercially very important aspect of the project.

We’re looking at offtake agreements for DSO, which will get us into some early cash flow and also for the AusBoz, which will give us the support for the financial case for the plant to produce AusBoz. We’re looking at executing an agreement for the proposed production site, so standby for news on that one. And also looking at DSO supply activities for that early cash flow. So the Geotech drilling that’s in progress right now, that will give us some mine design which we need to open the ground up, which will then lead us into DSO and hopefully some early cash flow. Also, we’re looking at some interesting early stage opportunities to produce AusPods commercially.

We know we can make it, we know how to make it. So it’s just a case of finding some equipment that’s available right now that can make it. So there are opportunities there and we’ll be certainly trying to progress those because the earlier we can get Auspol’s out into market, get the product branding out there, get the product out there being used by people, then the better for the whole company as we go forward. The results that we’re doing from AusPods testing ourselves, then we’ll evaluate those results. It’s gonna be a first stage and we’ll probably lead on to secondary stage testing, but those results should be very interesting.

Results that we’ve got so far are probably, I would say, exceeding expectations. So certainly no problem with the reactivity and the performance of the Oz Boz, but we would love to get some really high quality data out there into the market which we will we aim to do in the coming quarter. On the Zeolite front, we’re looking at opportunities to move from the university trials that we did to potential on-site trials, field trials. So that going to be the next stage and we are ramping up currently ramping up our zeolite production, which uses medical and as a feed, mean readiness for some potential on-site trials. Also, we’re waiting for feedback from the half a ton of Zeolyte that we sent over to North America for testing in animal feeds.

So that’s what’s happening next. And now I would like to take any questions that come through, please, Peter.

Peter, Moderator/Investor Relations, MWR Communications: Thanks, James. I’d like to ask a little bit more around the Zeolyte product. The Japanese patents was an announcement that was made recently. Can you expand a bit more about the scale of the industry, whether it’s in Japan, whether it’s global, a bit more about that opportunity and the uses of our zeolites?

James, Company Executive/CEO: Yeah, so the zeolite opportunity is interesting. Now zeolite is what what we call our second horizon product because it needs Medicardine, which is the AusPods as a feed before we can produce Zeolite. So our first horizon product will be the AusPods for the construction industry. And then once we’ve got that going, we’ve got to feed that zeolite, sorry, feed a certain amount of that production into the zeolite production, which will need another plant constructed to make the zeolite. Now the patent is interesting to get that in Japan, get it grounded in Japan, that protects us over there for some IP we have around that material.

But the big opportunity there probably is in the methane mitigation within Australia at the moment. It’s shown in trials at in university trials here in Australia that it can potentially absorb very large amounts of methane from landfill sites. So it presents an opportunity for waste disposal companies and we are working with Cleanaway. They could use this material to put a layer down over the landfill site and that would absorb significant amounts of methane, which you may know that methane is 28 times worse as a greenhouse gas than carbon dioxide. So this potentially offers a very simple low cost solution to mitigating those emissions because the alternative to doing that is to capture the landfill and then use flashing, so burning off the methane, which is very expensive and also a lot of health and safety implications.

Peter, Moderator/Investor Relations, MWR Communications: And James, there were some university trials around that methane absorption. Can you expand a little bit more on those results?

James, Company Executive/CEO: Yes, so we released those results during the quarter and we got results of roundabout up to 80% of absorption of the methane that was being emitted from that landfill, reconstructed landfill situation. So this was a university test, quite large sort of IBC type size containers of landfill type material. And during that testing, which was run over a long period through different weather conditions and we got those very encouraging results of around about up to 80% absorption of the methane. And the good thing is that the Z light that we’re using this, the Z light houses the actual organic component that absorbs the methane. So this can be just recoated.

Once it’s put down, it can be just recoated and keep going as the same layer. So as a technology, it’s interesting because it’s obviously a long term and very effective solution for the methane emissions. And the methane emissions themselves, there could be a way of monetizing those, which would make this very interesting.

Peter, Moderator/Investor Relations, MWR Communications: Thanks, James. And moving on to Holsham, obviously we’re using and producing HRM in other parts of the world. Can you describe a little bit more about how they’re using that, where they’re using it, what they’re finding and how that relates to our memorandum of understanding with them?

James, Company Executive/CEO: Yes, so the testing started initially. We delivered a 400 kilo sample of OZPOS to them. They did the first round of testing on that, which was proof of concept testing. So the idea was, okay, you’ve got this product, does it work? So just dropped into a standard mixed concrete mix design.

The results from that came back and they were far better than anyone expected, so that was fantastic. So those results was great. So since then, we’ve now moved on and we’ve just delivered 1.1 tons of Ausbos to them. So that was delivered recently. So that testing will now have expanded to different concrete mix designs to see how to optimize it.

AusPods is a medallion, it’s high reactivity medallion, something that’s been used in concrete around the world for decades, but not used in very large addition levels. Now it’s being used in large addition levels because it not only improves the concrete, but but it reduces carbon footprint significantly. So the fact that we can produce an economic grade with a very low carbon footprint that is very high activity means that we’ve got something here that obviously Holstein we’re very interested in looking at. And since we announced that relationship, that’s led to samples going out to all the virtually all the majors in Australia. So as we move forward with the principles of the MOU we signed, discussions will move into opportunities for joint venture or maybe profit sharing schemes and potential financing.

So that will go on now and as the testing proceeds, then once we get a full validation of the product, it’ll be a case of well producing much larger amounts to go into live trials. And live trials will be the next stage where we’ve already had indications that they might want 30 tonnes or more to do those trials.

Peter, Moderator/Investor Relations, MWR Communications: The exciting space for shareholders to keep their eye on James and a lot of this will be contingent upon the PFS which you discussed in points areas that the PFS has progressed throughout the last quarter. Can you give us a bit of expansion on that? I believe you’re heading up to Bundaberg this Friday as well.

James, Company Executive/CEO: Yep. Certainly. So we’re moving ahead on all fronts here. Now it’s, it’s, the project and it’s, as a whole is, is quite straightforward. And I know in my experience in industry, this is a very straightforward one.

It’s because the mining is very simple. There’s virtually no refining required of the kiln, which is very unique in the world of Kallen. The technology that we want to use is off the shelf, tried and tested, been working for, in fact, it’s been since the 1800s to make this. So it means that PFS is much more straightforward than normal, but it’s still a lot to do. So there’s still a lot of work to do.

So we’ve got expert consultants now engaged in every aspect of the PFS along with the Ziatek team who are covering the specialist sections. So at the moment, we are well, we say, as you mentioned there, Peter, we’re going there tomorrow. The Ziatek drilling is in progress. There’s some other work going on around the mine site tomorrow. We’re going to the Bundaberg Port to discuss use of a potential site there for operations.

We’re taking logistics consultants there who will film and track and examine the whole transport route all the way from pit to port and look at the access road and the access road where it joins the Council Road. So there’s a lot happening in that space. We’re also going through the modeling, which is very important. So the project modeling is well advanced and we are feeding all of the OpEx and CapEx that we details that we’re getting into that model and we’re working very closely with the other consultants that are involved, which includes, of course, the geologists, the mining engineers and the environmental people.

Peter, Moderator/Investor Relations, MWR Communications: James, there’s been a few questions come through which obviously will relate to the PFS and I think that those questions will be answered once the PFS is delivered and we can analyze the data that comes from there. The things to do with, you know, mine design, supply and demand for the products, etcetera. So for those that ask those questions, if you’ve got some specifics, please send them through to me at peter@mwrcommunications.com.au. I’ll make sure that James gets them because he’d be happy to engage. But, many of these questions will relate to the PFS, which I’m sure you’re looking forward to delivering very, very soon, James.

James, Company Executive/CEO: Yes. So yes, definitely. No, we are we’re working very hard to get that on it’s on track. So I know the project management is being well very well controlled by Tim and the team. So it’s on track.

Things are moving along. As I said, we’re trying to keep it simple and straightforward, but we are aided considerably by the fact that from a commercial perspective, usually with Kallen projects and although this is not strictly a Kallen, it’s a Medicallen, commercial side is very difficult and is the hardest part of the whole project to overcome. Well, this is different. I might have mentioned before in a presentation that in all my years in the Canadian industry and this is the first time got a project where customers are actively seeking this product. They want it, they’re asking for it and they do need it.

Now the construction industry needs us to decarbonize. So that means that the PFS has got a lot of advantages over normal PFSs. And so, yeah, definitely, we’re all very keen to get this done on time and looking forward to getting that news out in the second quarter this year.

Peter, Moderator/Investor Relations, MWR Communications: Right. Thanks, James. Given this is predominantly an update on the quarterly milestones achieved and an outlook going ahead, I think we’ve covered those and I’m looking forward to more comprehensive presentation to shareholders in the near future as you have some more news to deliver.

James, Company Executive/CEO: Yep. Thanks for your time, everybody. And looking forward to being able to give you more news in the future.

Peter, Moderator/Investor Relations, MWR Communications: Thanks very much, James. Thank you for everybody attending.

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