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Montauk Renewables, Inc. (MNTK)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was weak on reported GAAP metrics as Montauk deferred year-end RIN transfers amid extreme D3 RIN price volatility ($2.08–$3.50), resulting in a soft quarter on revenue/profit despite full-year results that were roughly flat YoY; management subsequently sold all remaining 2024 vintage RINs in early 2025, removing a key overhang .
  • Full-year 2024 revenue was $175.7M (flat YoY), net income $9.7M (-34.9% YoY), and Adjusted EBITDA $42.6M (-8.3% YoY), with RNG production up 1.6% to 5.6M MMBtu; Q4 results reflect the deferral of 6.8M unsold RINs at year-end that were sold post-period .
  • 2025 outlook introduced: RNG revenue $150–$170M on 5.8–6.0M MMBtu, and Renewable Electricity revenue $17–$18M on 178–186k MWh; narrative centers on diversification (NC swine energy, biogenic CO2 with European Energy, Tulsa REG-to-RNG conversion) and navigating interconnection/landfill timing risks .
  • Stock reaction catalysts: clarity on RIN monetization (9.9M 2024-compliance RINs transferred in 2025 at ~$2.45), execution milestones (Apex #2 commissioning 2Q25, NC swine early-2026, CO2 projects in 2027), and resolution of Blue Granite/Bowerman interconnection permitting uncertainties .

What Went Well and What Went Wrong

  • What Went Well

    • Subsequent monetization removed overhang: “We have subsequently sold all 6.8 million RINs generated and unsold…”; in total ~9.9M 2024 compliance-year RINs transferred in 2025 at ~$2.45 avg realized price .
    • Portfolio diversification advancing: NC swine energy (REC multiplier enhancements approved; >40 farms, ≥200k hog spaces secured), biogenic CO2 (European Energy) prioritized at multiple sites, and Tulsa REG-to-RNG conversion announced (target 1Q27, $25–$35M capex) .
    • Operational resilience and premium pricing strategy: management continues to target advantageous RIN pricing vs benchmarks and prioritize direct sales to obligated parties, historically achieving premiums and reducing market volatility exposure .

  • What Went Wrong

    • RIN market volatility and EPA uncertainty: Q4 D3 RIN price swung $2.08–$3.50 with muted obligated-party activity; Montauk elected to hold 6.8M RINs at YE, pressuring Q4 GAAP revenue and earnings .
    • Project timing risks: interconnection setbacks delaying Blue Granite (indefinitely) and potential Bowerman commissioning shifts; landfill hosts delaying wellfield installations, pushing feedstock growth timing into 2025+ .
    • Weather/utility outages earlier in 2024 (Houston region) curtailed production in multiple quarters, underscoring ongoing operational exposure to severe weather .

Financial Results

Note: Q4 2024 is derived as FY 2024 minus 9M 2024 where applicable; see citations.

MetricQ2 2024Q3 2024Q4 2024 (derived)
Revenue ($USD Millions)$43.338 $65.917 $27.694 (175.736 FY − 148.042 9M)
Diluted EPS ($)$(0.01) $0.12 $(0.06) (0.07 FY − 0.13 9M)
Net Income ($USD Millions)$(0.712) $17.048 $(8.452) (9.734 FY − 18.186 9M)
Net Income Margin %-1.6% (−0.712/43.338) 25.9% (17.048/65.917) -30.5% (−8.452/27.694)
EBITDA ($USD Millions)$6.741 $28.896 $(3.529) (40.969 FY − 44.498 9M)
EBITDA Margin %15.6% (6.741/43.338) 43.9% (28.896/65.917) -12.7% (−3.529/27.694)

Segment snapshot (FY context)

MetricFY 2023FY 2024
RNG Revenue ($USD Millions)$156.5 $158.0
Renewable Electricity Revenue ($USD Millions)$18.4 $17.8
RNG Production (MMBtu, Millions)5.5 5.6
Renewable Electricity Production (MWh, Thousands)194 186

Q4-specific KPIs and market context

  • Unsold RINs at 12/31/2024: 6.8 million; D3 RIN index range in Q4: $2.08–$3.50 .
  • Post-period: ~9.9 million 2024 compliance-year RINs transferred in 2025 at ~$2.45 average realized price; 0 remaining 2024 compliance RINs to transfer .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RNG RevenueFY 2024$195–$215M (Q2’24) $175–$185M (Q3’24) Lowered
RNG ProductionFY 20245.8–6.1M MMBtu (Q2’24) 5.5–5.7M MMBtu (Q3’24) Lowered
Renewable Electricity RevenueFY 2024$18–$19M (Q2’24) $17–$18M (Q3’24) Lowered
Renewable Electricity ProductionFY 2024190–200k MWh (Q2’24) 180–185k MWh (Q3’24) Lowered
RNG RevenueFY 2025N/A$150–$170M New
RNG ProductionFY 2025N/A5.8–6.0M MMBtu New
Renewable Electricity RevenueFY 2025N/A$17–$18M New
Renewable Electricity ProductionFY 2025N/A178–186k MWh New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q2’24)Previous Mentions (Q-1: Q3’24)Current Period (Q4’24 call)Trend
EPA/RIN regulatory timelineWatching RVO/LCFS processes; reaffirmed 2024 outlook despite volatility Highlighted pathway sharing pressures; contemplating more fixed-price offtake in 2025 EPA delayed 2024 compliance deadline; Montauk sold 100% of 2024 D3 RINs, 0 exposure; sold 9.9M 2024-compliance RINs at ~$2.45 in 2025 Elevated uncertainty but exposure managed
Landfill wellfield timingExpect wellfield capex to lift 2H; Houston weather outages Landfill hosts delaying active-area wellfield installs; timing impacts through 2025 Continues; period of excess capacity at Apex #2 until host increases feedstock Headwind persists
Interconnection/permittingBlue Granite utility upgrades pending Blue Granite shifted to 2027; Bowerman permitting changes may delay to 2027 Blue Granite: utility now not accepting RNG; COD delayed indefinitely; exploring alternative interconnection/commodities Deteriorated
Diversification (NC swine, CO2, Tulsa RNG)NC pilot reactor commissioned; farm equipment installed; CO2 opportunity initiated CO2 project capex $65–$75M; NC permits advancing NC REC multiplier enhances economics; >40 farms secured; Tulsa REG→RNG (1Q27, $25–$35M, ~1,500 MMBtu/d); CO2 monetization targeted in 2027 across sites Advancing
Monetization strategy & pricingSold 4.7M RINs at $3.32 post Q2; prioritize obligated parties Pre-sold Q4 RINs at ~$3.52 avg Expect to continue achieving pricing premiums vs D3 index; committed to transferring within next quarter Mixed (premium strategy intact; pricing lower in early 2025)
Weather/utility outagesWidespread power outages hit production Hurricane Beryl impacted Houston; ~100k MMBtu loss YTD No new Q4-specific outages called out; weather risk remains Ongoing risk
Voluntary market & data centers——Exploratory discussions with data centers/cold storage; voluntary market data remains challenging; flexibility to divert volumes if economics dictate Emerging optionality

Management Commentary

  • “During the fourth quarter of 2024, the D3 RIN market exhibited measurable price volatility... Though these market conditions contributed to our decision to hold a higher balance of D3 RINs... all 2024 vintage D3 RINs have been subsequently sold as obligated parties reentered the market during the first quarter of 2025.”
  • “Our feedstock diversification strategy is poised to further expand in 2026 with the commissioning of our swine waste energy project in Turkey, North Carolina… The majority of our production revenue from this project will be derived from renewable power generation...”
  • “We are pleased to announce our initiative to convert our Tulsa, Oklahoma Renewable Electric Generation facility project through the design and construction of a renewable natural gas facility… average nameplate capacity of approximately 1,500 MMBtus a day… targeted commissioning date in the first quarter of 2027.”
  • “With our previously announced Blue Granite project… we received notice… [utility’s] intention to not accept RNG into their distribution system… we have indefinitely delayed COD and corresponding capital spend… evaluating alternative RNG interconnection strategies… and alternative commodity production opportunities.”
  • “We expect our RNG production volumes to range between 5.8 million and 6 million MMBtus, and corresponding RNG revenues to range between $150 million and $170 million [in 2025].”

Q&A Highlights

  • 2025 RNG revenue guidance mechanics: Expect to continue achieving pricing premiums to D3 index; plan to transfer available RINs up to the next quarter; regulatory reform may affect timing of sales .
  • Landfill capacity/wellfield delays: Hosts cautious about open-face interference, slowing installations; not fatal but timing stretched; prioritizing obligated-party placements to mitigate price volatility .
  • Voluntary markets/data centers: Ongoing discussions with large energy users (e.g., data centers); voluntary market data reliability is challenging; company retains flexibility to divert volumes based on economics and credit quality of counterparties .
  • Tax credits: Continuing to evaluate benefits of expanded 45(b)/ITC under IRA; Bowerman already benefits from PTC .

Estimates Context

  • S&P Global consensus for Q4 2024 EPS and revenue was unavailable at the time of this analysis due to temporary data access limits; as a result, we cannot quantify beat/miss versus Street for the quarter. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • The soft Q4 print is largely a timing issue from deliberate RIN deferrals into early 2025; subsequent transfer of all 2024 RINs (~9.9M at ~$2.45) removes a near-term overhang and clarifies cash conversion cadence .
  • 2025 outlook is conservative on RNG revenue ($150–$170M) with stable production (5.8–6.0M MMBtu), reflecting ongoing volatility in RIN markets and a commitment to measured monetization pacing .
  • Project execution is bifurcated: tangible progress on diversification (NC swine energy, biogenic CO2, Tulsa RNG) offsets interconnection/permit risks (Blue Granite, Bowerman); milestone delivery will be a key stock driver in 2025–2027 .
  • Landfill wellfield delays and weather-driven outages remain operational headwinds; monitoring host activity cadence and utility resilience is critical for forecasting throughput .
  • Pricing strategy continues to emphasize obligated-party sales and opportunistic premiums; watch pathway sharing renewals and potential use of fixed-price contracts to manage attribute-sharing pressures .
  • For trading: near-term relief as RIN overhang clears; medium-term narrative shifts to delivery on Apex #2 commissioning (2Q25), NC project path (early 2026), and interconnection solutions; regulatory headlines (EPA RIN timelines/waivers, LCFS) remain high-signal catalysts .

References:

  • Q4/FY 2024 8-K & Press Release (Mar 13, 2025): ;
  • Q4 2024 Earnings Call Transcript (Mar 13, 2025):
  • Q3 2024 Press Release & Call (Nov 12, 2024):
  • Q2 2024 8-K & Call (Aug 8, 2024):
  • Other Q4-related press releases: Emvolon pilot (Oct 7, 2024)