Sign in

You're signed outSign in or to get full access.

OF

OPAL Fuels Inc. (OPAL)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 results were in line with expectations; revenue $83.4M (-0.8% YoY, +3.6% QoQ) and Adjusted EBITDA $19.5M (down YoY on lower D3 RIN prices), while RNG production rose 30% YoY to 1.3M MMBtu and sequentially higher versus Q2 .
  • Management maintained full-year 2025 guidance (Adjusted EBITDA $90–$110M on 5.0–5.4M MMBtu RNG production; FSS EBITDA +30–50%; ~2.0M MMBtu into construction), with sensitivity of ~$5–$6M per $0.10/gal change in D3 RIN price .
  • Near-term catalysts include higher Q4 D3 RIN pricing (~$2.40), initial recognition of 45Z tax credits in Q4, and continued production ramp; October production reached a record pace following September .
  • Strategic progress: Atlantic project commissioned (adds ~0.33M MMBtu annual design capacity); CMS Concord entered construction (~1.0M MMBtu net), lifting operating projects to 12 with 9.1M MMBtu annual design capacity .

What Went Well and What Went Wrong

  • What Went Well

    • RNG production increased 30% YoY to 1.3M MMBtu, with record output in September and the highest run-rate in October; management emphasized improving consistency and uptime across sites .
    • Atlantic RNG commenced operations, CMS Concord entered construction; in-construction landfill RNG totals 2.8M MMBtu, underpinning forward capacity growth .
    • Vertically integrated FSS network continues to deliver recurring cash flows less correlated to environmental credit prices; 47 stations operating and 41 under construction (16 OPAL-owned) .

  • What Went Wrong

    • Adjusted EBITDA fell to $19.5M from $31.1M in Q3’24 on lower realized D3 RIN pricing and ISCC pathway expiration; realized RIN price in Q3 was ~$2.15 vs ~$3.13 last year .
    • Renewable Power segment impacted by discontinuation of ISCC carbon credits; segment Adjusted EBITDA declined YoY to $4.0M from $7.0M .
    • Construction delays at two California dairy projects (Hilltop, Vander Schaaf) due to EPC disputes persisted, pushing completion timelines .

Financial Results

Consolidated P&L and Margins (GAAP)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$85.407 $80.456 $83.357
Net Income ($USD Millions)*$2.382*$3.417*$4.067*
Diluted EPS - Continuing Ops ($USD)$(0.01) $0.03 $0.05
EBITDA ($USD Millions)*$4.722*$2.475*$8.517*
EBITDA Margin %*5.53%*3.08%*10.22%*
Gross Profit ($USD Millions)*$20.689*$19.935*$22.893*
Gross Margin %*24.22%*24.78%*27.46%*
Cash from Operations ($USD Millions)*$29.679 $(7.874)*$18.212*

Values marked with * retrieved from S&P Global.

Segment Revenue and Adjusted EBITDA

SegmentQ3 2024Q2 2025Q3 2025
RNG Fuel Revenue ($USD Millions)$25.864 $25.130 $22.921
Fuel Station Services Revenue ($USD Millions)$45.395 $47.026 $51.722
Renewable Power Revenue ($USD Millions)$12.788 $8.300 $8.714
RNG Fuel Adjusted EBITDA ($USD Millions)$22.657 $16.867 $16.956
Fuel Station Services Adjusted EBITDA ($USD Millions)$11.966 $11.203 $11.403
Renewable Power Adjusted EBITDA ($USD Millions)$6.974 $3.311 $4.026
Corporate Adjusted EBITDA ($USD Millions)$(10.494) $(14.872) $(12.929)
Consolidated Adjusted EBITDA ($USD Millions)$31.103 $16.509 $19.456

KPIs

KPIQ1 2025Q2 2025Q3 2025
RNG Produced (Million MMBtu)1.1 1.2 1.3
RNG Dispensed (Million GGE)19.5 20.6 20.4
Total Volumes Sold/Dispensed/Serviced (Million GGE)40.6 40.8 38.9

Liquidity and Capex

  • Liquidity at 9/30/25: $183.8M (cash $29.9M; $138.4M undrawn term facility; $15.5M revolver) .
  • YTD capex through 9/30/25: $60.9M (OPAL-owned RNG/fueling projects); unconsolidated entities capex share $17.9M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($USD Millions)FY 2025$90–$110 $90–$110 Maintained
RNG Production (MMBtu)FY 20255.0–5.4 5.0–5.4 Maintained
FSS Segment Adjusted EBITDA GrowthFY 2025+30%–50% vs 2024 +30%–50% vs 2024 Maintained
RNG Capacity put into constructionFY 2025~2.0M MMBtu ~2.0M MMBtu Maintained
ITC monetization (excluded from Adj. EBITDA)FY 2025~+$50M cash/net income ~+$50M cash/net income Maintained
D3 RIN sensitivityFY 2025~$5–$6M per $0.10/gal ~$5–$6M per $0.10/gal Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
RNG production trajectoryQ1: 1.1M MMBtu; production ramp from late-2024 startups . Q2: 1.2M MMBtu; +33% YoY; operational improvements .1.3M MMBtu; +30% YoY; record Sept/Oct run-rate; consistent uptime .Improving and accelerating
Regulatory/RIN pricingQ2: One Big Beautiful Bill extends 45Z through 2029; RIN volatility .Q4 D3 RIN ~ $2.40; cautious optimism on RVO timeline post-shutdown .Constructive near-term
45Z tax creditsFY contribution expected 2026 full-year; mechanics being finalized .Begin recognizing 45Z in Q4; registered all facilities .Turning on in Q4
Downstream/FSS strategyQ2: emphasize vertical integration and predictable per-gallon economics .Expanded focus on FSS; 47 operating, 41 under construction (16 OPAL-owned) .Strategic emphasis increasing
Macro/Equipment (CNG tractors)Q2: macro headwinds and tariffs slowed purchase decisions .Pricing/residuals improving; expect fleet adoption decisions to accelerate into 2026–27 .Improving set-up

Management Commentary

  • “Third quarter results were in line with our expectations. RNG production continues to increase, up 8% sequentially and 30% YoY… We expect full year results to be within our 2025 guidance range, despite a lower D3 RIN price environment.” — Co-CEO Adam Comora .
  • “Our annual design capacity is now at 9.1 million MMBtu across twelve operating projects… RNG and CNG are the most attractive alternatives to replace diesel for the Class 8 trucking market.” — Co-CEO Jonathan Maurer .
  • “Revenue for the quarter was $83 million, and adjusted EBITDA was $19.5 million… impacted by lower realized RIN pricing and the expiration of ISCC pathway.” — CFO Kazi Hasan .
  • “Atlantic’s commissioning… adds ~0.33M MMBtu… CMS now in construction… in-construction landfill RNG totals 2.8M MMBtu.” — Co-CEO Jonathan Maurer .

Q&A Highlights

  • Production ramp: Management validated ~0.1M MMBtu sequential growth pace and expects trajectory to continue into 2026, driven by data-driven operations and uptime improvements .
  • Regulatory outlook: Expect RVO timing impacted by government shutdown; maintain bipartisan support view for RNG; constructive stance on D3 volumes .
  • D3 RIN pricing & Q4 setup: Q4 D3 ~ $2.40; sequential lift from pricing, production, FSS seasonality (LCFS aggregation), and 45Z; implied Q4 Adj. EBITDA ramp toward low end of range .
  • Downstream strategy: FSS provides balanced, less credit-sensitive cash flows; capital allocation increasingly focused downstream to drive predictable returns .
  • Free cash flow and capex discipline: Maintenance capex embedded in operating cash flow; growth capex reserved for projects meeting 4–5 year payback thresholds .

Estimates Context

MetricQ1 2025Q2 2025Q3 2025
Revenue Consensus Mean ($USD)$82.237M*$85.202M*$91.388M*
Revenue Actual ($USD)$85.407M $80.456M $83.357M
Revenue Surprise ($USD / %)+$3.170M / +3.9%*-$4.746M / -5.6%*-$8.031M / -8.8%*
Primary EPS Consensus Mean ($)$0.110*$0.092*$0.143*
Primary EPS Actual ($)$0.2385*$(0.0589)*$(0.0963)*
EPS Surprise ($ / %)+$0.1285 / +117%*-$0.151 / -164%*-$0.2395 / -167%*

Values marked with * retrieved from S&P Global.

Notes:

  • EPS comparisons reflect S&P Global Primary EPS, which may differ from reported GAAP diluted EPS due to methodology and ownership structure.

Key Takeaways for Investors

  • Guidance maintained: Despite lower Q3 RIN pricing, OPAL affirmed FY25 targets; Q4 set-up benefits from higher D3 RIN, 45Z credits beginning, and continued RNG ramp .
  • Mix improvement: FSS growth and vertical integration provide more durable, credit-independent cash flows, supporting balance and resilience through commodity cycles .
  • Capacity expansion: Atlantic online; CMS in construction; in-construction portfolio at 2.8M MMBtu, positioning for 2026 capacity and production growth .
  • Credit monetization: Year-to-date ITC sales >$40M; ~+$50M FY ITC monetization excluded from Adjusted EBITDA but supportive of liquidity and net income .
  • Regulatory tailwinds: 45Z extended through 2029; constructive stance on RVO/D3; monitor EPA timelines and D3 price trajectory as key drivers of 2026 economics .
  • Execution discipline: Capital deployment targets 4–5 year paybacks; maintenance capex embedded in operating cash flow; continued focus on uptime and inlet gas utilization .
  • Trading implications: Near-term sentiment likely tied to Q4 delivery vs low end of Adj. EBITDA range and clarity on 45Z monetization mechanics; mid-term rerating potential as downstream growth and production ramps de-risk earnings mix .