Montauk Renewables, Inc. (MNTK)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered a revenue beat and headline EPS miss: revenue was $45.1M vs S&P Global consensus $43.3M (beat), while diluted EPS was -$0.04 vs +$0.01 consensus (miss). EBITDA also missed consensus ($5.17M* vs $9.84M*), with company-reported EBITDA of $4.63M and Adjusted EBITDA of $5.03M .*
• Management reaffirmed full-year 2025 outlook across RNG and Renewable Electricity (REG) volumes and revenues, signaling no change to guidance ranges despite regulatory headwinds and timing effects from the EPA’s Biogas Regulatory Reform Rule (BRRR) .
• Strategic execution advanced: the second RNG facility at Apex (Ohio) was commissioned; a 10-year PPA (~$48/MWh) was signed for the Montauk Ag Renewables Turkey, NC project; and a new GreenWave JV was formed to expand RNG transportation pathways, with Montauk expected to act as RIN separator .
• Regulatory dynamics remained the critical swing factor: ~3.0M D3 RINs were generated but unseparated at quarter-end due to BRRR timing; EPA proposed RFS standards and partial waivers citing transportation capacity limitations—Montauk plans to participate in the rulemaking comment process .

What Went Well and What Went Wrong

What Went Well

• Apex second RNG facility commissioned, expanding processing capacity at the Amsterdam, OH site; RNG production held flat YoY at 1.4M MMBtu despite site-specific puts/takes .
• Commercial momentum: 10-year PPA signed for Montauk Ag Renewables’ Turkey, NC project at an average ~$48/MWh, improving visibility on monetization once commissioned .
• Strategic adjacency: Emvolon JV scales biogas-to-green methanol opportunities (targeting up to 50K metric tons annually by 2030), broadening end markets beyond traditional RNG/power; “Montauk continues to expand the horizon of the beneficial uses of biogas” — CEO Sean McClain .

What Went Wrong

• Profitability compression: Adjusted EBITDA fell 27.7% YoY to $5.0M (Q2 2025) on higher RNG O&M (preventative maintenance, media changeouts, wellfield enhancements) and lower realized D3 RIN pricing ($2.42, -22.4% YoY) .
• EPS miss and widening net loss: diluted EPS -$0.04 and net loss -$5.5M vs -$0.7M in Q2 2024, as operating loss (-$2.4M) reflected cost timing and regulatory impacts on RINs availability .
• Regulatory timing and market structure: ~3.0M RINs generated but unseparated due to BRRR K2 separation and EPA’s extended 2024 compliance period, constraining sellable RINs and adding quarter-to-quarter volatility .

Financial Results

• Company-reported Consolidated EBITDA was $4.63M and Adjusted EBITDA $5.03M in Q2 2025 . The S&P “EBITDA actual” shown ($5.17M*) reflects S&P’s standardized mapping; we use S&P’s EBITDA for consensus comparison but anchor core analysis to company-reported EBITDA. Values retrieved from S&P Global.*

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Montauk continues to expand the horizon of the beneficial uses of biogas… the combination of Montauk’s expertise… with Emvolon’s unique platform… helps shape the economic viability of current and future biogas projects.” — Sean McClain, CEO .
• Regulatory posture: Montauk supports cellulosic emphasis within RFS and will engage in EPA comment period; BRRR-induced timing reduced available sellable RINs, contributing to Q2 variability .
• Operational discipline: RNG O&M expenses rose on preventative maintenance, media changeouts, and wellfield enhancement programs across Apex, McCarty, Rumpke, and Atascocita .
• Capital allocation: Directors elected not to declare a dividend to prioritize development pipeline execution .

Q&A Highlights

• Rumpke relocation: Management expects uninterrupted production; consolidation enables addition of food-grade CO2 processing, modernizing older tech deployments .
• Operating expense modeling: CFO emphasized internal modeling by unit production rather than % of revenue given RIN timing volatility; REG O&M influenced by engine age/overhauls; RNG O&M timing depends on feedstock/environmental factors .
• North Carolina swine project: Detailed closed-loop system, pelletized fuel, multi-output commodities (RNG, power, char/fertilizer), and potential for significantly lower CI; scalable beyond initial 7 reactor trains, with 2026 showcase targeted .
• Industry/tariffs: Management noted cautious industry sentiment due to regulatory uncertainty and tariffs; Montauk focuses on domestically sourcing long-lead equipment and advancing internal developments .
• American Environmental Landfill (Tulsa) RNG expansion: New facility complements existing REG; increase in gas feedstock and wellfield investment supports project .

Estimates Context

• Q2 2025 actuals vs consensus: Revenue beat ($45.13M vs $43.29M*), EPS miss (-$0.04 vs $0.01*), EBITDA miss ($5.17M* vs $9.84M*). Company-reported EBITDA was $4.63M; Adjusted EBITDA $5.03M . Values retrieved from S&P Global.*
• Prior period context: Q1 2025 actual revenue $42.60M vs $42.40M* and EPS -$0.00 vs $0.011*; Q2 2024 actual revenue $43.34M vs $46.97M*, EPS -$0.01 vs $0.066* .*
• FY 2025 consensus revenue $176.69M* sits within the company’s combined RNG+REG guidance bands ($167–$188M), consistent with maintained full-year outlook . Values retrieved from S&P Global.*

Key Takeaways for Investors

• Revenue resilience amid regulatory timing: self-marketing and contract timing drove Q2 revenue above consensus despite BRRR-related separation delays and lower realized D3 RIN prices . The EPS/EBITDA miss reflects cost timing and regulatory effects—watch EPA rule finalization as a near-term stock catalyst .*
• Execution on growth projects: Apex commissioning and Turkey, NC PPA de-risk near-term capacity and medium-term monetization; these items should improve visibility into 2026 volume and attribute pathways .
• Policy path matters more than volumes: with RNG output flat YoY, attribute price/timing dominate profitability; elevated RNG O&M from maintenance cycles and wellfield enhancements is a headwind to margins in the near term .
• Portfolio optionality expanding: Emvolon JV and GreenWave JV broaden end-markets and transportation pathways; these can diversify revenue streams beyond traditional D3 RIN arbitrage, potentially smoothing cycle volatility over time .
• Guidance credibility: reaffirmed 2025 ranges support steadier expectations; consensus FY revenue sits inside combined guidance, reducing risk of near-term guide-down absent policy shocks .*
• Watch for definitional differences: S&P “EBITDA actual” varies from company-reported EBITDA/Adjusted EBITDA—anchor analysis on company definitions, but weigh consensus comparisons using S&P’s standardized view .*
• Monitoring list: EPA’s 2025 cellulosic waivers and 2026–27 standards, BRRR separation timing normalization, RIN inventory drawdown cadence, RNG price indices, maintenance cycle intensity, and commissioning timelines across Apex/Ag Renewables/Rumpke CO2 .

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Bold beats/misses:

• Revenue: beat vs consensus in Q2 2025.**
• EPS: miss vs consensus in Q2 2025.**
• EBITDA: miss vs consensus in Q2 2025 (company-reported EBITDA and Adjusted EBITDA below market expectations).**

Notes:

• No Q2 2025 earnings call transcript was available in the document set; Q1 2025 transcript used for themes and Q&A context -.
• Values retrieved from S&P Global.*