OPAL — OPAL Fuels Inc.

OPAL Fuels Inc. Q4 and Full Year 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Q4 2025 Results: Revenue reached $99.8 million, with adjusted EBITDA of $34.2 million, compared to $80.0 million and $22.6 million in Q4 2024.
• Full Year 2025: Adjusted EBITDA was $90.2 million, flat year-over-year despite a 28% increase in RNG production to 4.9 million MMBtu. The decline in D3 RIN prices (averaging $2.45 in 2025 vs. $3.13 in 2024) negatively impacted EBITDA by approximately $33 million.
• Liquidity Position: Ended the year with $184 million in total liquidity, including $30 million in cash and $138 million in undrawn credit capacity.

2. Strategic Updates and Business Highlights

• Production Growth: RNG production increased significantly, driven by improved operations and the ramp-up of newly commissioned facilities, particularly the Atlantic facility.
• Fuel Station Services Expansion: Grew to 61 owned stations, with a focus on supporting RNG and CNG infrastructure for heavy-duty trucking. The segment's EBITDA increased to $46.7 million, up 22% from 2024.
• Capital Structure Improvement: Completed a $180 million Series A preferred stock facility, which enhanced liquidity and allowed for the repayment of a $100 million preferred investment.

3. Forward Guidance and Outlook

• 2026 Guidance: Expected adjusted EBITDA between $95 million and $110 million, representing approximately 14% growth at the midpoint compared to 2025. Anticipated RNG production is projected to be between 5.4 million and 5.8 million MMBtu.
• Long-term Growth: The company is optimistic about 2026 being an inflection point for fleet adoption of CNG and RNG, although immediate financial impacts from new fleet deployments may not be realized until 2027.

4. Bad News, Challenges, or Points of Concern

• Market Headwinds: The Fuel Station Services segment faced challenges in 2025 due to deferred investment decisions by fleet partners amid macroeconomic pressures, which may continue to affect growth in 2026.
• RIN Price Declines: The significant drop in D3 RIN prices has been a major headwind, impacting overall financial performance despite operational growth.
• Challenging Start to 2026: Severe winter conditions have posed operational challenges, potentially affecting production and dispensing volumes early in the year.

5. Notable Q&A Insights

• Operational Improvements: Management highlighted ongoing initiatives to improve operational efficiencies, with a target utilization rate of 85-86% for existing projects.
• Future Growth Projects: There are robust opportunities for new RNG projects and investments in fuel stations, with a focus on capital allocation across various segments.
• Market Dynamics: There is cautious optimism regarding the re-engagement of fleets in purchasing decisions, driven by rising diesel prices and a shift towards sustainability.
• Regulatory Environment: The company remains focused on the cellulosic category within the RFS, noting bipartisan support but a lack of emphasis compared to other biofuels.

Overall, OPAL Fuels Inc. demonstrated resilience in 2025 despite market challenges, with a solid growth outlook for 2026 and beyond, driven by operational improvements and strategic investments.