OPAL — OPAL Fuels Inc.

OPAL Fuels Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Adjusted EBITDA: $16.7 million, down from $20.1 million in Q1 2025, primarily due to lower Renewable Identification Number (RIN) prices.
• Revenue: $73.3 million, compared to $85.4 million in the prior year period.
• RNG Production: 1.2 million MMBtu, a 9% increase year-over-year.
• Fuel Station Services EBITDA: $9.2 million, down from $10.9 million, attributed to lower construction revenues and RIN prices.
• Liquidity: Approximately $233 million, including $133 million in cash and short-term investments.

2. Strategic Updates and Business Highlights

• Production Improvement: Despite a challenging winter, RNG production increased, and operational efficiency is expected to continue improving.
• Fleet Engagement: Strong interest in CNG and RNG from heavy-duty trucking fleets due to high diesel prices, regulatory clarity, and successful engine tests.
• Investment in Technology: Ongoing investments in personnel, technology, and AI to enhance operational performance.
• RIN Pricing: Positive developments in the RIN market, with prices for D3, D4, D5, and D6 increasing significantly.

3. Forward Guidance and Outlook

• 2026 Guidance: OPAL Fuels maintains its full-year guidance, anticipating growth driven by increased RNG production and a strengthening RIN environment.
• Long-term Growth: Expected growth in 2027 and beyond as fleet operators recognize the benefits of CNG and RNG amidst volatile diesel prices.
• Project Development: Anticipation of bringing online over 2 million MMBtu of annual design capacity from in-construction projects within the next year.

4. Bad News, Challenges, or Points of Concern

• Declining EBITDA: The drop in adjusted EBITDA and revenue compared to the previous year raises concerns about profitability amidst lower RIN prices.
• Weather Impact: Severe winter conditions affected operations, leading to increased operational expenses and challenges in gas collection.
• Market Sensitivity: Continued sensitivity to RIN prices and the timing of construction revenues may introduce volatility in financial performance.

5. Notable Q&A Insights

• Fleet Conversions: Factors driving fleet conversions include high diesel prices, regulatory clarity, and successful testing of new natural gas engines, with initial deployments expected in 2027.
• Production Challenges: The extraordinary cold weather impacted production and operational costs, but the company remains optimistic about growth in subsequent quarters.
• Capital Allocation: OPAL Fuels is focused on disciplined capital allocation, prioritizing investments in existing projects and exploring M&A opportunities in the RNG sector.
• Operational Learnings: The company is leveraging insights from its existing facilities to improve gas collection and operational efficiency across its projects.

Overall, OPAL Fuels is navigating a challenging environment while positioning itself for future growth through strategic investments and operational improvements. However, it faces headwinds from declining financial metrics and external market pressures.