Q2 2026 Opal Fuels Inc Earnings Call Transcript
Key Points
- Adjusted EBITDA increased 40% year-over-year to $23.1 million, driven by 45Z production tax credits, Fuel Station Services growth, and G&A cost savings.
- RNG production grew 8% year-over-year to 1.3 million MMBtus, with plans for further improvements through low-capital initiatives like gas collection technology.
- Strong project pipeline with over 2 million MMBtu of annual design capacity expected online in the next 12 months (Cottonwood, Burlington, CMS) and additional projects for 2028.
- Significant discretionary free cash flow generation of approximately $0.30 per share over the last 12 months, providing flexibility for reinvestment.
- Fuel Station Services segment EBITDA increased to $12.5 million from $10.9 million, reflecting growth in downstream operations.
- Maintained full-year guidance with confidence, supported by expected production ramp and stronger RIN pricing in the second half.
- Liquidity remains strong at $162.2 million, including cash, revolver capacity, and undrawn preferred capital commitments.
- RNG production was modestly below expectations in Q2, with utilization at high 50% of nameplate capacity, indicating room for improvement.
- Renewable Power segment EBITDA declined to $0.3 million from $2.2 million, impacted by lower production and pricing, with further declines expected as assets convert.
- Non-cash impairment recorded in Q2 due to decommissioning of a renewable power project for the CMS RNG project.
- SG&A is expected to increase in Q3 due to professional services and organizational investments, though within full-year plan.
- RIN pricing remained flat year-over-year, and forward contracting for 2027 is limited, with market activity expected to pick up only in Q4.
- Execution risks remain on pipeline interconnections for projects like CMS, though backup virtual pipeline is in place.
- Production growth initiatives may take time to implement and coordinate with landfill owners, delaying potential benefits.
Thank you. Ladies and gentlemen, thank you for standing by. Welcome to OPAL Fuels second-quarter 2026 earnings results conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would like now to turn the conference over to Todd Firestone, Vice President of Investor Relations. Please go ahead.
Thank you, and good morning, everyone. Welcome to the OPAL Fuels second-quarter 2026 earnings conference call. Joining me today are Co-CEOs Adam Comora and Jon Maurer, as well as Kazi Hasan, OPAL's Chief Financial Officer.
OPAL Fuels released financial and operating results for the second quarter 2026 this morning. And those results are available on the Investor Relations section of our website at opalfuels.com. The presentation access to the webcast for this call are also available on our website. After completion of today's call, a replay will be available for 90 days.
Before we begin, I'd like to
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