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Core Viewpoint - OPAL Fuels Inc. has experienced a 13.3% decline in shares over the past week, but the formation of a hammer chart pattern suggests potential support and a possible trend reversal in the future [1][2]. Technical Analysis - The hammer chart pattern indicates a minor difference between opening and closing prices, with a long lower wick suggesting that selling pressure may be exhausting [4]. - This pattern typically forms during a downtrend, where the stock opens lower, makes a new low, but then closes near or above the opening price, indicating a potential loss of control by bears [5]. Fundamental Analysis - There has been a recent upward trend in earnings estimate revisions for OPAL, which is a bullish indicator suggesting potential price appreciation [7]. - Over the last 30 days, the consensus EPS estimate for the current year has increased by 100%, indicating that analysts expect better earnings than previously predicted [8]. - OPAL currently holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9][10].

Project Operations and Capacity - As of September 30, 2025, the company owned and operated 26 projects, including 11 RNG projects with a design capacity of 8.8 million MMBtus per year and 15 Renewable Power Projects with a nameplate capacity of 105.8 MW per hour[187]. - The Atlantic RNG facility commenced commercial operations on October 6, 2025, contributing approximately 0.3 million MMBtu to the company's annual design capacity[188]. - The landfill RNG facility's design capacity increased from 1.7 million MMBtus in Q3 2024 to 2.2 million MMBtus in Q3 2025, with inlet gas volume rising from 1.2 million MMBtus to 1.6 million MMBtus in the same period[206]. - RNG fuel volume produced increased from 1.0 million MMBtus in Q3 2024 to 1.2 million MMBtus in Q3 2025, reflecting a utilization of inlet gas at 77% in Q3 2025[206]. - The company has a total of 8,804,931 MMBtus of RNG projects in operation and 2,631,139 MMBtus in construction as of September 30, 2025[210]. - The company expects to maintain utilization of inlet gas in the range of 80% to 90%[208]. Financial Performance - Total revenues for Q3 2025 were $83.36 million, a slight decrease of 1% compared to $84.05 million in Q3 2024, while revenues for the nine months ended September 30, 2025, increased by 13% to $249.22 million from $219.95 million in the same period of 2024[213]. - Operating income for Q3 2025 was $3.59 million, down 71% from $12.31 million in Q3 2024, and for the nine months, it decreased by 96% to $0.82 million from $21.57 million[213]. - The company reported a net income of $11.39 million for Q3 2025, a decrease of 33% from $17.11 million in Q3 2024, while net income for the nine months increased slightly by 3% to $20.23 million[213]. - Net cash provided by operating activities for the nine months ended September 30, 2025 was $40.0 million, an increase of $8.1 million compared to $31.9 million for the same period in 2024[266]. - Net cash used in investing activities decreased to $69.9 million for the nine months ended September 30, 2025, down from $86.5 million in 2024[268]. - Net cash provided by financing activities increased to $35.0 million for the nine months ended September 30, 2025, compared to a net cash used of $31.6 million in 2024[270]. Revenue Sources and Trends - The company generates revenues from the sale of RNG fuel, Renewable Power, and associated Environmental Attributes, with significant contributions from construction and servicing of Fueling Stations[201]. - Revenue from RNG Fuel decreased by $2.9 million or 11% for the three months ended September 30, 2025 compared to the same period in 2024, primarily due to a $5.3 million decrease in the sale of environmental attributes[216]. - Revenue from RNG Fuel increased by $12.6 million, or 20%, for the nine months ended September 30, 2025 compared to the same period in 2024, driven by a $6.5 million increase in brown gas sales and a $5.9 million increase in environmental attributes[217]. - Revenue from Fuel Station Services increased by $6.3 million or 14% for the three months ended September 30, 2025 compared to the same period in 2024, attributed to increased GGE volume and project construction timing[219]. - Revenue from Renewable Power decreased by $4.1 million, or 32%, for the three months ended September 30, 2025 compared to the same period in 2024, mainly due to the termination of an ISCC Carbon Credit contract[221]. Costs and Expenses - The company’s cost of sales for RNG fuel increased by 18% to $11.77 million in Q3 2025, compared to $9.99 million in Q3 2024[213]. - Cost of sales from RNG Fuel increased by $1.8 million, or 18%, for the three months ended September 30, 2025 compared to the same period in 2024, primarily due to increased costs from the Polk facility[223]. - Selling, general, and administrative expenses increased by $1.7 million, or 13%, for the three months ended September 30, 2025 compared to the same period in 2024, mainly due to higher professional fees and compensation costs[231]. - Project development and startup costs decreased by $4.3 million, or 63%, for the three months ended September 30, 2025 compared to the same period in 2024, mainly related to virtual pipeline costs[229]. Customer Concentration - As of September 30, 2025, Customer A accounted for 41% of consolidated accounts receivable, while Customer B accounted for 14%, indicating a concentration of revenue sources[205]. Tax and Income - The company’s income tax benefit for Q3 2025 was $14.57 million, a 64% increase from $8.91 million in Q3 2024[213]. - Income tax benefit increased by $5.7 million or 64% for the three months ended September 30, 2025 compared to the same period in 2024, primarily due to the sale of Investment Tax Credits for the Polk facility[242]. - Net income attributable to equity method investments decreased by $3.2 million, or 83%, for the three months ended September 30, 2025 compared to the same period in 2024, primarily due to a decrease in the realized price of RINs[235]. Liquidity and Financing - Liquidity as of September 30, 2025 was $183.8 million, consisting of $138.4 million of unused capacity under the senior secured credit facility and $29.9 million of cash and cash equivalents[248]. - The company anticipates seeking additional capital through equity or debt financings to fund future growth, with the timing and amount depending on project development efforts[251]. - As of September 30, 2025, the outstanding loan balance was $331.6 million, an increase from $286.6 million as of December 31, 2024[257]. - The Sunoma Loan Agreement was increased from $20 million to $23 million, with a maturity date of July 19, 2033[259]. - The Series A preferred units issued by OPAL Fuels LLC have a dividend rate of 8% per annum, with no accrued preferred dividend payable as of September 30, 2025[263]. - The company paid a one-time nonrefundable fee of $1.25 million in connection with the Credit Agreement Amendment[256]. Market and Regulatory Environment - Demand for RNG is influenced by U.S. federal and state energy regulations, with the EPA setting proposed Renewable Volume Obligations (RVOs) for D3 RINs for 2023 through 2025[193]. - Transportation, particularly heavy-duty trucking, accounts for approximately 30% of overall GHG emissions in the U.S., highlighting the importance of transitioning to low and negative carbon fuels[194]. - The company is exposed to commodity prices of natural gas and diesel, which can impact the demand for RNG[195]. - The company is actively pursuing expansion of its RNG-generating capacity, with six Renewable Power Projects being considered for conversion to RNG projects in the near future[187].

Financial Data and Key Metrics Changes - Third quarter revenue was $83 million, down from $84 million in the same period last year, while adjusted EBITDA was $19.5 million, compared to $31.1 million last year, primarily due to lower realized RIN pricing and the expiration of ISCC pathway [13][14][15] - Realized RIN price decreased to $2.15 from $3.13 year-over-year [14] - Total liquidity at the end of the quarter was $184 million, including $29.9 million in cash and short-term investments [15] Business Line Data and Key Metrics Changes - RNG production reached 1.3 million MMBTU, a 30% increase year-over-year, driven by improved uptime and ramp-up of existing projects [5][10] - The company now operates 12 RNG facilities with a combined annual design capacity of 9.1 million MMBTU, up from two facilities at the time of going public in 2022 [10] - The fuel station services segment is expected to meet the lower end of the 30%-50% segment EBITDA growth target despite a challenging logistics environment [12] Market Data and Key Metrics Changes - The company is seeing a growing need for energy infrastructure assets to support CNG and RNG adoption in heavy-duty trucking, which is being recognized as a cost-effective alternative to diesel [9] - The downstream fuel station services business is performing well, with 47 operating fueling stations and 41 under construction, enhancing the company's cash flow profile [12][53] Company Strategy and Development Direction - The company is focused on expanding its vertically integrated platform and investing in fuel station services as a key growth area [9][54] - The strategy includes advancing new project opportunities and maintaining a disciplined capital allocation framework to ensure alignment with returns and liquidity [11][49] - The company aims to achieve a balanced earnings profile by leveraging both upstream RNG production and downstream fuel distribution [52][54] Management's Comments on Operating Environment and Future Outlook - Management remains confident in achieving full-year guidance despite lower RIN prices, citing improvements in production and the expected recognition of 45Z production tax credits [8][16] - The company anticipates continued growth in 2026, supported by strong production and the full-year impact of 45Z credits [22][28] Other Important Information - The company completed its fourth investment tax credit monetization for the year, bringing total gross proceeds to $43 million year-to-date [6][15] - The company is working on refinancing its preferred equity with Nexterra to enhance its capital structure [16] Q&A Session Summary Question: What is the trajectory of RNG production growth? - Management confirmed that RNG production is expected to continue growing at a rate of approximately 0.1 million MMBTU per quarter, with strong sequential growth anticipated through year-end and into 2026 [21][22] Question: What are the expectations for the final RVO and D3 RVO? - Management indicated that the final RVO rules are impacted by the government shutdown, but they remain cautiously optimistic about bipartisan support for RNG [23][24] Question: How does the company balance growth spending with free cash flow generation? - Management clarified that maintenance CapEx is included in operating cash flow, while growth CapEx is focused on new projects, ensuring a disciplined approach to capital deployment [26][49] Question: What is the outlook for the natural gas vehicle market? - Management expressed optimism about the adoption of natural gas vehicles, highlighting ongoing improvements in equipment pricing and the potential for significant growth in the coming years [35][38] Question: Is the company considering opportunities in the voluntary market? - Management noted interest in the marine fuel market but emphasized that they have not yet found it advantageous to transact in voluntary markets due to regulatory uncertainties [41][43] Question: Has competition in the RNG project development space increased? - Management acknowledged that while there are new entrants, limited access to capital and offtake markets may constrain competitors' growth [47][48]

Third Quarter 2025 Earnings Presentation September 2025 Disclaimer For the purposes of this notice, the "presentation" that follows shall mean and include the slides that follow, the oral presentation of the slides by members of management of OPAL Fuels Inc. (the "Company" or "OPAL Fuels") or any person on their behalf and the question-and-answer session that follows that oral presentation. By reading the presentation slides, you will be deemed to have (i) agreed to the following limitations and notificatio ...

Revenue and Income - Revenue for Q3 2025 was $83.4 million, a decrease of 1% year-over-year, while revenue for the nine months ended September 30, 2025, was $249.2 million, an increase of 13% compared to the prior year[4] - Total revenues for the three months ended September 30, 2025, were $83,357,000, a slight decrease of 0.8% compared to $84,047,000 for the same period in 2024[36] - Net income for the nine months ended September 30, 2025, was $20,229,000, compared to $19,692,000 for the same period in 2024, reflecting an increase of 2.7%[37] - Operating income for the three months ended September 30, 2025, was $3,588,000, down 70.8% from $12,309,000 in the same period of 2024[36] - Net income for the three months ended September 30, 2025, was $11,386, a decrease from $17,107 in the same period of 2024, representing a decline of approximately 33.5%[44] - The company reported a basic net income per share of $0.05 for the three months ended September 30, 2025, down from $0.09 in the same period of 2024[36] Adjusted EBITDA and Expenses - Adjusted EBITDA for Q3 2025 was $19.5 million, down 37% from $31.1 million in Q3 2024, while for the nine months it was $56.0 million, down 17% from $67.4 million in the same period last year[7] - Adjusted EBITDA for the three months ended September 30, 2025, was $19,456, compared to $31,103 for the same period in 2024, indicating a decrease of about 37.5%[44] - The total Adjusted EBITDA for the nine months ended September 30, 2025, was $56,028, compared to $67,407 for the same period in 2024, reflecting a decline of about 16.8%[44] - The company incurred total operating expenses of $79,769,000 for the three months ended September 30, 2025, compared to $71,738,000 in 2024, marking an increase of 11.1%[36] Production and Capacity - RNG production increased by 30% year-over-year to 1.3 million MMBtu for Q3 2025 and 25% to 3.5 million MMBtu for the nine months ended September 30, 2025[7] - The Atlantic RNG Project commenced commercial operations in October 2025, contributing approximately 0.3 million MMBtu to OPAL Fuels' annual design capacity[7] - The company’s annual design capacity now stands at 9.1 million MMBtu across twelve operating projects[3] - The CMS Concord RNG facility in North Carolina began construction in October 2025, representing approximately 0.7 million MMBtu of annual design capacity[8] Financial Position and Liquidity - As of September 30, 2025, OPAL Fuels reported liquidity of $183.8 million, including $138.4 million of unused capacity under its $450.0 million senior secured credit facility[14] - Total assets increased to $916.7 million as of September 30, 2025, up from $881.1 million at the end of 2024[34] - Current liabilities decreased to $83.5 million as of September 30, 2025, compared to $103.6 million at the end of 2024[35] - Stockholders' equity attributable to the company improved to $7.5 million as of September 30, 2025, from a deficit of $148.4 million at the end of 2024[35] - Cash and cash equivalents increased to $29.9 million as of September 30, 2025, compared to $24.3 million at the end of 2024[34] - OPAL Fuels expects available cash and other assets to be sufficient to meet existing commitments for at least twelve months from the date of the report[15] Investments and Capital Expenditures - For the nine months ended September 30, 2025, OPAL Fuels invested $60.9 million in RNG projects and fueling stations, a decrease from $72.8 million in the prior year[16] - The company's share of capital expenditures in unconsolidated entities for the same period was $17.9 million[16] Fueling Stations and Services - At September 30, 2025, the company had 47 operating fueling stations and 16 under construction, with an additional 25 owned by third parties[8] - The Fuel Station Services segment sold 38.9 million GGEs of transportation fuel in Q3 2025, an increase of 1% year-over-year, with RNG accounting for 20.4 million GGEs, up 4%[7] Tax Credits and Guidance - The company completed the sale of IRA Investment Tax Credits totaling over $40 million in 2025, with $17.3 million completed in Q3[3] - The company maintains its full-year 2025 guidance despite a lower D3 RIN price environment[8] Other Financial Metrics - Cash flows from operating activities for the nine months ended September 30, 2025, increased to $40,017,000 from $31,917,000 in 2024, representing a growth of 25.3%[37] - The company reported a net cash used in investing activities of $69,933,000 for the nine months ended September 30, 2025, compared to $86,546,000 in 2024[38] - The weighted average shares outstanding of Class A common stock for the three months ended September 30, 2025, was 28,279,527, an increase from 27,709,203 in the same period of 2024[36] Interest and Financing - The company’s interest and financing expense for the three months ended September 30, 2025, was $6,898,000, an increase from $5,026,000 in 2024[36] - Interest and financing expense for Q3 2025 was $6,898, up from $5,027 in Q3 2024, reflecting an increase of approximately 35.3%[44]

Core Viewpoint - OPAL Fuels reported financial and operational results for Q3 and the first nine months of 2025, indicating that results met expectations and highlighting significant growth in RNG production [1] Financial Performance - The company announced its financial results for the three and nine months ended September 30, 2025 [1] - Third quarter results were described as being in line with expectations [1] Operational Highlights - RNG production increased by 8% sequentially and by 30% compared to Q3 2024 [1] - The company expressed satisfaction with the operational progress made during the third quarter [1]

Core Insights - OPAL Fuels will release its earnings results for Q3 2025 on November 6, 2025, with a conference call scheduled for November 7, 2025 [1][2] - The company is a leader in the production, marketing, and distribution of renewable natural gas (RNG) and compressed natural gas (CNG) for heavy-duty trucking [1][3] Company Overview - OPAL Fuels specializes in capturing and converting biogas into low carbon intensity RNG and renewable electricity [3] - The company focuses on marketing and distributing RNG to heavy-duty trucking and other hard-to-decarbonize industrial sectors [3] - OPAL Fuels aims to reduce harmful methane emissions and contribute to decarbonizing the economy [3] Recent Developments - OPAL Fuels, in collaboration with South Jersey Industries and Atlantic County Utilities Authority, announced the commercial operation of an RNG facility in Egg Harbor Township, New Jersey [7] - The company appointed Lance Moll to its Board of Directors, effective October 1, 2025 [8] - OPAL Fuels completed the sale of $17.3 million of Inflation Reduction Act investment tax credits generated by the Polk RNG facility in Florida [11]

Financial Data and Key Metrics Changes - Second quarter adjusted EBITDA was $16.5 million, which is $4.6 million lower compared to the same period last year, impacted by a lower RIN price environment and non-recurring expenses [7][19] - Revenue for the quarter was $80.5 million, up from $71 million in the same period last year, reflecting growth in RNG production and fuel station services [18] - Net income increased to $7.6 million from $1.9 million in Q2 2024 [18] Business Line Data and Key Metrics Changes - RNG fuel segment production reached 1,200,000 MMBtu, a 33% increase year-over-year [8][14] - Fuel Station Services segment EBITDA was approximately $11.2 million, a 30% increase compared to the previous year [8][17] - The company completed the sale of $16.7 million in investment tax credits, contributing to cash flow and earnings [8] Market Data and Key Metrics Changes - The company was added to the Russell 2000, Russell 2000 Value, and Russell 2000 Growth Indices, indicating strong market performance [8] - The policy environment has improved with bipartisan support for RNG, including the extension of the 45Z production tax credit through 2029 [10][11] Company Strategy and Development Direction - The company is focusing on expanding its RNG production assets and fueling station network, maintaining guidance for the year despite lower RIN prices [7][13] - Capital is being allocated to grow the Fuel Station Services segment, which provides predictable cash flow [13][17] - The company is exploring M&A opportunities in a fragmented industry to maximize shareholder value [40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in operational improvements and achieving production results within the lower end of guidance [14][15] - The company is optimistic about the construction of new projects and expects to meet its target of placing 2,000,000 MMBtu into construction in 2025 [16][32] - Management noted that while there are macro headwinds, the overall outlook for RNG adoption is improving [17][27] Other Important Information - The company is investing in strengthening its operational and financial foundation, including compliance with SOX criteria by 2026 [20][21] - Total liquidity as of June 30 was $203.2 million, which includes cash and undrawn credit facilities [21] Q&A Session Summary Question: Changes in competitive landscape for downstream business - Management noted a market shift with major national fleets increasingly engaging in CNG and RNG due to recent policy changes and equipment availability [25][26] Question: Guidance maintenance despite weaker RIN prices - Management highlighted several drivers for maintaining guidance, including RIN purchases, production trends, and expected normalization of non-recurring expenses [36][38] Question: M&A landscape and acquisition opportunities - Management indicated that the industry remains fragmented, presenting opportunities for consolidation, and they are evaluating potential acquisitions to maximize shareholder value [40][41] Question: Timing of returning capital to shareholders - Management emphasized a disciplined approach to maximizing shareholder value and indicated that discussions on returning capital would occur during the upcoming Investor Day [44][45] Question: Growth outlook for Fuel Station Services - Management expressed confidence in the growth of the Fuel Station Services segment, anticipating a pickup in activity in the second half of the year [48][49] Question: Update on landfill gas project with RSG - Management confirmed that development is ongoing and they are finalizing plans for the project, which is expected to contribute to their construction targets [51][52] Question: Balancing investment between upstream and downstream - Management is evaluating opportunities in both upstream and downstream sectors based on risk-adjusted returns and their potential to enhance overall portfolio stability [59][60]

Financial Performance - Second Quarter 2025 Adjusted EBITDA was $16.5 million, a 22% decrease compared to $21.1 million in 2Q24, driven by lower RIN prices, loss of ISCC carbon credits, and non-recurring G&A expense[14, 16, 18] - RNG production for 2Q25 reached 1.2 million MMBtu, a 33% increase compared to 2Q24[14, 16] - Fuel Station Services segment experienced EBITDA growth of 30% compared to 2Q24[16] Liquidity and Capital Allocation - As of June 30, 2025, the company had approximately $203 million in liquidity, including $138 million of unused capacity under the $450 million credit facility, $36 million of unused capacity under the associated revolver, and $29 million in cash, cash equivalents, and short-term investments[21] - Net debt as of June 30, 2025, was approximately $302 million[21] - The company anticipates putting into construction approximately 2.0 million annual MMBtu of RNG annual design capacity in 2025[58] Guidance and Projections - The company maintains full-year 2025 Adjusted EBITDA guidance, projecting between $90 million and $110 million, assuming a $2.60/gallon D3 RIN price[16, 58] - The Adjusted EBITDA projection is based on an RNG production range of 5.0 to 5.4 million MMBtu[58] - Adjusted EBITDA from the Fuel Station Services segment is projected to grow by 30% - 50% compared to 2024[58] Operational Highlights - The company operates 11 RNG facilities with a total RNG annual design capacity of 8.8 million MMBtu[40] - Total volumes sold, dispensed, and serviced in the Fueling Station Services segment reached 145.0 million GGE in 2024 and are projected to reach 202.1 million GGE in 2025[35]