Core Insights - Sage Capital Advisors, LLC reduced its position in Costco by selling 3,424 shares valued at approximately $3.28 million in Q3 2025, resulting in a decrease in their holdings from 2.3937% to 1.4023% of reportable AUM [1][3][4] Company Overview - Costco operates a membership-based warehouse model, offering a wide range of branded and private-label merchandise, including groceries, electronics, and specialty services [4] - As of September 2025, Costco had 914 membership warehouses globally [4] - The company's revenue for the trailing twelve months (TTM) was $275.24 billion, with a net income of $8.10 billion and a dividend yield of 0.54% [3] Stock Performance - As of October 6, 2025, Costco shares were priced at $910.94, reflecting a 4.3% increase over the past year, but underperforming the S&P 500 by 13.7 percentage points [3][6] - Despite the recent sell-off by Sage Capital Advisors, Costco remains a desirable investment for many, indicating potential ongoing interest from other investors [6][7] Investment Context - The sale by Sage Capital Advisors represents about a 34% reduction in their Costco holdings, which may be viewed as a rebalancing move rather than a negative outlook on the company [4][7] - Investors have expressed concerns about Costco being overvalued and having limited growth potential in the near term [5]

Financial Data and Key Metrics Changes - For the fourth quarter of 2024, revenue was $80 million and adjusted EBITDA was $22.6 million, compared to $87 million and $32 million in the same quarter of 2023, respectively [21] - The net loss for the quarter was $5.4 million, down from a net income of $20.1 million in 2023, primarily due to the timing and pricing of environmental credit sales [22] - For the full year 2024, revenue was $299.9 million, adjusted EBITDA was $90 million, and net income was $14.3 million, compared to $256.1 million, $51.9 million, and $127 million in 2023 [22] Business Line Data and Key Metrics Changes - The Fuel Station Service segment's EBITDA for 2024 was $40.2 million, a 70.6% increase compared to 2023 [9] - RNG fuel production for 2024 was 3.8 million MMBtus, up 41% from 2023, but slightly below the guidance of 4 million MMBtus [9][18] - The company has increased its RNG projects from 2 to 11 since going public in 2022, tripling its annual design capacity [10] Market Data and Key Metrics Changes - The company expects RNG production to range between 5 million and 5.4 million MMBtus in 2025, representing a 30% to 40% increase compared to 2024 [14] - The Fuel Station Services segment is projected to grow adjusted EBITDA by 30% to 50% in 2025 compared to 2024 [20] Company Strategy and Development Direction - The company aims to continue its growth through the execution of successful RNG projects and vertical integration, which enhances value for both the company and its feedstock partners [10][12] - The strategic focus includes expanding the Fuel Station Service segment, which provides diversification and predictable cash flows [11] - The company is optimistic about the potential for RNG as a cleaner alternative to diesel fuel, particularly in the heavy-duty trucking sector [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory for 2025, despite near-term volatility, citing strong market fundamentals [20] - The company anticipates adjusted EBITDA for 2025 to range from $90 million to $110 million, based on production guidance and RIN price assumptions [14][24] - Management highlighted the importance of regulatory clarity and the potential for renewable power projects to contribute to future growth [64] Other Important Information - The company has appointed Kazi Hasan as the new CFO, who is expected to add significant value to the team [12] - Capital expenditures for 2024 were $162.3 million, with expectations for continued investment in growth projects [23] Q&A Session Summary Question: Production guidance and Q4 design capacity - Management expects increasing utilizations from facilities and anticipates sequential upticks throughout the year [29][33] Question: Competitive landscape and growth opportunities - The company is focused on executing existing projects while evaluating new opportunities in the market [35][38] Question: ITC and PTC credits in 2025 guidance - The guidance includes a material amount of 45Z credits, with ongoing discussions about potential improvements in scoring [44][45] Question: Tightness in the dispensing market - The market has tightened due to slower adoption of new engine technologies and regulatory uncertainties, but management sees potential for acceleration in adoption [48][50] Question: CapEx and equipment cost inflation - The company commits to equipment costs early in the project lifecycle to mitigate inflation impacts [54][56] Question: Timeline for EPA resolution on partial waiver - Management anticipates a resolution in the April-May timeframe [58][60] Question: Project development and federal incentives - There has not been a slowdown in early-stage project discussions despite uncertainties around federal incentives [77][78] Question: Balancing growth and capital preservation - The company has the flexibility to toggle between growth and generating free cash flow as needed [80][82] Question: Mix between upstream and downstream segments - The Fuel Station Services segment is growing faster, but it does not yet constitute 50% of the overall EBITDA [86][89]