OPAL Fuels (OPAL) - 2025 Q2 - Quarterly Results

OPAL Fuels Second Quarter 2025 Results OPAL Fuels' Q2 and H1 2025 results show strong financial and operational growth, supported by strategic investments and reaffirmed guidance Management Commentary Management expressed satisfaction with Q2 2025 results, citing increased RNG production, policy support, and strategic platform investments - RNG production in Q2 2025 increased by 33% compared to Q2 2024, with the company expecting continued improvement throughout the year in line with guidance[2] - Management highlighted strengthening bipartisan support for biofuels, specifically mentioning the passage of the 'One Big Beautiful Bill Act' which extends the 45Z production tax credit through 2029[2] - The company is investing in its sustainable operating platform and technologies to scale with growth, capitalizing on strengthening market fundamentals for RNG as a transportation fuel[2] Financial & Operational Highlights The company reported strong Q2 and H1 2025 financial and operational growth, including increased RNG production and project pipeline progress Financial Highlights OPAL Fuels demonstrated strong Q2 2025 financial growth, with revenue up 13% to $80.5 million and net income surging to $7.6 million Q2 & H1 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $80.5M | $71.0M (approx) | +13% | $165.9M | $135.9M | +22% | | Net Income | $7.6M | $1.9M | +300% | $8.8M | $2.6M | +238% | | Adjusted EBITDA | $16.5M | $21.1M | -22% | $36.6M | $36.3M | +0.8% | | Basic & Diluted EPS (Class A) | $0.03 | $(0.01) | N/A | $0.02 | $(0.02) | N/A | - The company completed the sale of $16.7 million of IRA Investment Tax Credits during the period[7] - At the end of Q2 2025, RNG Pending Monetization totaled $12.0 million[7] Operational Highlights & Construction Update Q2 operational performance was strong, with RNG production up 33% YoY to 1.2 million MMBtu, and project pipeline advancing despite some delays Q2 & H1 2025 Key Operational Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | RNG Produced (MMBtu) | 1.2M | 0.9M | +33% | 2.3M | 1.7M | +35% | | Total Fuel Dispensed (GGEs) | 40.8M | 36.6M | +11% | 81.4M | 71.6M | +14% | | RNG Dispensed (GGEs) | 20.6M | 18.7M | +10% | 40.1M | 35.1M | +14% | - Project Pipeline Updates: - Atlantic RNG: On schedule for Q3 2025 commercial operations - Burlington & Cottonwood RNG: Expected to commence operations in 2026 - Kirby RNG: Expected to commence operations in 2027 - Hilltop & Vander Schaaf (California): Construction completion is delayed due to a contractor dispute[7][8] - As of June 30, 2025, the company had 46 fueling stations under construction, with 20 being owned by OPAL[8] Guidance OPAL Fuels has reaffirmed its previously issued financial and operational guidance for the full year 2025 - The company maintains its full-year 2025 guidance[8] Detailed Financial Performance Detailed financial performance includes segment results, equity method investments, and operational metrics for the reporting period Results of Operations Q2 2025 total revenue increased to $80.5 million YoY, driven by RNG Fuel and Fuel Station Services, with consolidated Adjusted EBITDA at $16.5 million Revenue by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | RNG Fuel | $25,130 | $19,445 | $52,729 | $37,172 | | Fuel Station Services | $47,026 | $39,257 | $97,704 | $76,399 | | Renewable Power | $8,300 | $12,248 | $15,430 | $22,331 | | Total Revenue | $80,456 | $70,950 | $165,863 | $135,902 | Adjusted EBITDA by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | RNG Fuel | $16,867 | $17,946 | $36,581 | $33,787 | | Fuel Station Services | $11,203 | $8,626 | $22,422 | $15,644 | | Renewable Power | $3,311 | $6,368 | $5,931 | $10,240 | | Corporate | $(14,872) | $(11,859) | $(28,362) | $(23,367) | | Consolidated Adjusted EBITDA | $16,509 | $21,081 | $36,572 | $36,304 | Equity Method Investments OPAL's Q2 2025 share of net income from equity method investments decreased to $2.0 million, with a corresponding decline in Adjusted EBITDA OPAL's Share of Equity Method Investments (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $13,178 | $11,228 | $23,466 | $21,989 | | Gross Profit | $4,435 | $5,089 | $6,765 | $10,275 | | Net Income | $1,962 | $3,800 | $1,240 | $8,006 | | Adjusted EBITDA | $6,082 | $6,693 | $9,497 | $13,167 | Operational Metrics Net design capacity for landfill RNG facilities increased to 2.2 million MMBtus in Q2 2025, with inlet design capacity utilization at 76% Landfill RNG Facility Capacity and Utilization | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Design Capacity (Million MMBtus) | 2.2 | 1.5 | 4.4 | 2.8 | | Inlet Design Capacity Utilization (%) | 76% | 74% | 73% | 77% | | Utilization of Inlet Gas (%) | 75% | 82% | 76% | 81% | - As of June 30, 2025, the total value of RNG Pending Monetization and environmental credits (RINs, LCFSs, RECs) was approximately $12.0 million[13] Liquidity and Capital Expenditures As of June 30, 2025, the company maintained strong liquidity of $203.2 million, with capital expenditures for H1 2025 totaling $33.4 million - Total liquidity as of June 30, 2025, was $203.2 million, consisting of $138.4 million in unused senior secured credit facility, $35.5 million in unused revolver capacity, and $29.3 million in cash and cash equivalents[14] - Capital expenditures for the first six months of 2025 totaled $33.4 million, compared to $49.7 million in the prior-year period, with an additional $12.7 million invested in equity method investments[15] Consolidated Financial Statements Unaudited condensed consolidated balance sheets, statements of operations, and cash flows for periods ended June 30, 2025, are presented Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $905.5 million, liabilities to $432.3 million, and cash equivalents were $29.3 million Selected Balance Sheet Data (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $29,269 | $24,310 | | Total current assets | $123,486 | $117,188 | | Total assets | $905,537 | $881,077 | | Total current liabilities | $98,233 | $103,596 | | Total liabilities | $432,291 | $416,045 | | Total Stockholders' deficit | $(22,302) | $(147,831) | Condensed Consolidated Statements of Operations Q2 2025 total revenues were $80.5 million, with net income of $7.6 million, significantly improved by a $13.7 million income tax benefit Statement of Operations Highlights (in thousands) | Account | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $80,456 | $70,950 | $165,863 | $135,902 | | Operating (loss) income | $(827) | $5,689 | $(2,769) | $9,259 | | Income tax benefit | $13,686 | $— | $21,723 | $— | | Net income | $7,559 | $1,908 | $8,843 | $2,585 | | Net income (loss) attributable to Class A common stockholders | $800 | $(153) | $565 | $(469) | Condensed Consolidated Statements of Cash Flows H1 2025 net cash from operating activities increased to $21.8 million, while investing activities decreased, resulting in a net increase in cash Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $21,805 | $14,251 | | Net cash used in investing activities | $(36,026) | $(54,080) | | Net cash provided by financing activities | $18,498 | $15,036 | | Net increase (decrease) in cash | $4,277 | $(24,793) | Non-GAAP Financial Measures This section provides a detailed reconciliation of GAAP Net Income to the non-GAAP measure of Adjusted EBITDA, highlighting key adjustments - The company uses Adjusted EBITDA as a non-GAAP measure to supplement its GAAP financial statements, believing it provides a more complete understanding of its core operating performance[35][37][38] Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $7,559 | $1,908 | $8,843 | $2,585 | | Adjustments | $8,950 | $19,173 | $27,729 | $33,719 | | Adjusted EBITDA | $16,509 | $21,081 | $36,572 | $36,304 |