Clean Energy(US:CLNE)2025-02-25 02:42Financial Data and Key Metrics Changes - In Q4 2024, the company reported a GAAP net loss of $29.8 million on revenues of $109.3 million, while adjusted non-GAAP net income was $3.6 million [35] - For the full year 2024, the GAAP net loss was $83.1 million, which was at the low end of the guidance range, and adjusted EBITDA was $76.6 million, exceeding the top-end of the guidance range [35][36] - The adjusted EBITDA outlook for 2025 is projected to be between $50 million and $55 million, a decrease from $77 million in 2024, primarily due to the absence of alternative-fuel tax credit (AFTC) revenue and lower Renewable Identification Number (RIN) prices [32][34] Business Line Data and Key Metrics Changes - The company sold 62 million gallons of renewable natural gas (RNG) in Q4 2024, a 9% increase year-over-year, and 237 million gallons for the full year, a nearly 5% increase from 2023 [8][9] - The downstream RNG fueling business generated almost $89 million of EBITDA in 2024 [11] - The upstream dairy RNG production projects are expected to produce 4 million to 6 million gallons of RNG in 2025, with six projects currently operating [27][46] Market Data and Key Metrics Changes - The company noted a 20% decline in average RIN prices for 2025, resulting in an approximate $10 million reduction in RIN revenue compared to 2024 [41] - California's Low Carbon Fuel Standard (LCFS) prices are expected to average in the low $70s for 2025, compared to around $61 in 2024, potentially providing a $2 million upside in LCFS revenue [43] Company Strategy and Development Direction - The company is focusing on the adoption of RNG in the heavy-duty trucking sector, particularly with the new Cummins X15 engine, which is seen as a significant growth opportunity [16][24] - The company plans to exit 55 Pilot Flying J locations, which primarily housed LNG fueling equipment, as the market for LNG trucks has diminished [30][31] - The company is optimistic about federal and state policies supporting a technology-neutral approach to lower transportation sector emissions [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong balance sheet and recurring revenue business model, positioning it well for growth opportunities in fuel distribution and RNG production [34] - The management highlighted the importance of customer relationships and the ongoing transition of transit agencies to lower emissions fuels [14][24] - Management remains cautious about the regulatory environment, particularly regarding the AFTC and Section 45Z Clean Fuel Production credit, but is optimistic about potential resolutions [26][132] Other Important Information - The company has not included any AFTC revenue in its 2025 outlook, which contributed nearly $24 million to its results in 2024 [32][40] - The company is actively educating the new administration about the benefits of domestically produced RNG [29] Q&A Session Summary Question: How is the company looking at the clarifications under 45Z? - Management believes the technical issues will be resolved soon, potentially reinstating the rules by April [56][108] Question: Do you see any volumes in the transportation sector going towards power generation for data centers? - Management indicated that transportation still accounts for 75%-80% of RNG usage, but some volumes may eventually be directed towards power generation [66] Question: Can you discuss volume growth in key sectors for Q4 and 2025? - Management noted growth in fueling operations, particularly in fleet categories, with modest growth expected in 2025 [76][77] Question: How will the 15-liter engine rollout utilize the existing station footprint? - Management expects the existing network to accommodate the new engine's rollout, with significant volume growth anticipated [95][96] Question: What is the outlook for project development beyond Maas? - Management is focused on optimizing current projects and is cautious about new greenfield projects due to regulatory uncertainties [124][126] Question: What is the likelihood of a positive revision for 45Z guidance? - Management is optimistic about the potential for a positive revision, citing congressional support and industry advocacy [132]