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    OPAL
    Earnings call· Jun 2026(Q2 FY26)

    OPAL Fuels Q2 FY26 earnings call OPAL

    Aug 10, 2026 Source

    Executive summary

    OPAL Fuels Q2 FY26 — Solid Financials Driven by Tax Credits and FSS Growth

    OPAL Fuels delivered solid Q2 FY26 financial results, with adjusted EBITDA up 40% driven by 45Z tax credits and Fuel Station Services growth, despite RNG production being modestly below expectations. The company is focused on operational improvements for existing assets and advancing construction of new RNG projects, with 3 million MMBtu of design capacity expected online over the next 24 months, while maintaining full-year guidance. Management highlighted the long-term growth opportunity in heavy-duty transportation fuel switching to natural gas, supported by the 15-liter engine.

    Highlights

    5

    • Adjusted EBITDA increased 40% year-over-year to $23.1 million.

    • RNG production was 1.3 million MMBtu, approximately 8% higher from last year.

    • Fuel Station Services segment EBITDA increased to $12.5 million from $10.9 million last year.

    • G&A expenses were $3.2 million lower versus Q2 FY25.

    • Generated approximately $0.30 per share in discretionary free cash flow for the last 12 months.

    Concerns

    3

    • RNG production was modestly below expectations this quarter.

    • Renewable Power segment adjusted EBITDA decreased to $0.3 million from $2.2 million last year due to lower production and pricing.

    • Recorded a non-cash impairment from a renewable power project decommissioning related to the CMS RNG project.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year Adjusted EBITDA
    $95M-$110M
    high materiality
    High
    Annual design capacity coming online
    Over 2 million MMBtu
    medium materiality
    High
    Annual design capacity coming online
    1 million MMBtu
    medium materiality
    High
    Total annual design capacity coming online
    Approximately 3 million MMBtu
    high materiality
    High
    Upstream segment growth drivers
    Incremental volumes from existing assets and completion of projects in construction
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    RNG Fuel
    Driven by 45Z tax credits and production growth amidst flat realized RIN prices.
    45Z tax credits contributionProduction growth
    		———EBITDA increased to $18.6 million from $13.3 million last year
    Fuel Station Services
    Delivered improved performance.
    		Contributed to consolidated revenue increase of 4% to $83.4 million——EBITDA increased to $12.5 million from $10.9 million last year
    Renewable Power
    Performed lower compared to the prior year period, driven by lower production and pricing. Expected to see lower contributions as assets are converted into RNG plants. Included a non-cash impairment from a project decommissioning.
    		———Adjusted EBITDA was $0.3 million compared to $2.2 million prior year

    Operational metrics

    9
    Adjusted EBITDA
    $23.1 millionincreased 40% from Q2 FY25
    Q2 FY26

    Driven by 45Z production tax credits, Fuel Station Services segment, and G&A cost savings.

    RNG Production
    1.3 millionapproximately 8% higher from last year
    Q2 FY26

    Modestly below expectations this quarter.

    G&A Expenses
    $3.2 million lowerversus Q2 FY25
    Q2 FY26

    Actively managing discretionary spending.

    Total Liquidity
    $162.2 million
    Q2 FY26 end

    Sufficient to fund projects that have entered construction.

    Invested Capital
    More than $52 million
    First six months of FY26

    In RNG projects under construction, OPAL-owned fuel stations, and finance transformation initiatives.

    Refuse sector CNG truck adoption rate
    50%
    Current

    Of CNG trucks ordered versus diesel, for 9- and 12-liter engines.

    US Diesel market size
    44 billion
    Annual

    Largest segment to be addressed by 15-liter natural gas engine.

    Consolidated Revenue
    $83.4 millionincreased 4% to $83.4 million
    Q2 FY26

    Driven primarily by growth in FSS segment compared with Q2 FY25.

    SG&A Expenses
    increasefrom Q2 FY26
    Q3 FY26

    Expected to increase due to certain professional services, organizational investments, and transformation initiatives normalizing. Costs remain fully incorporated within full-year plan.

    Industry KPIs

    7
    MetricValueDetails
    Pipeline throughput storage—
    Realized price differentialFlat
    Sanctioned expansion backlog3 millionMMBtu
    Basin level production volume1.3 millionMMBtu
    Cost of supply unit cash cost—
    FCF shareholder distributions$0.30per share
    Weather event volume earnings impact—

    Deals & partnerships

    1
    GFLDevelopment of Stone's Throw and Grady Road RNG projects

    General contractor released for these projects.

    Risks & headwinds

    3
    RNG production modestly below expectationsQ2 FY26

    1.3 million MMBtu in Q2 FY26, approximately 8% higher from last year, but below expectations

    Mitigation: Focused on meaningful opportunities to grow volumes through existing facilities and drive second half results via plant improvement initiatives (e.g., gas collection, well field tuning).

    Lower contributions from Renewable Power segmentQ2 FY26 and ongoing

    Adjusted EBITDA $0.3 million for Q2 FY26 compared to $2.2 million prior year

    Mitigation: Converting renewable power assets into RNG plants; non-cash impairment from project decommissioning in connection with CMS RNG project.

    Pipeline interconnection risk on new projectsNear-term

    Notably CMS project

    Mitigation: Have backup virtual pipeline interconnections for CMS, which will be temporary and time-constrained, ensuring project timing holds.

    What to watch in Q3 FY26

    5

    RNG production from existing facilities

    H2 FY26
    Current1.3 million MMBtu in Q2 FY26 (modestly below expectations)
    TargetIncreased production and improved utilization

    Why it matters

    Operational improvements are low-capital and high-EBITDA impact, crucial for meeting full-year guidance and future discretionary FCF growth.

    While production performance was modestly below our expectations this quarter, we continue to see meaningful opportunities to grow volumes through our existing facilities and drive our second half results.

    Q&A highlights

    5

    Could you elaborate on the most impactful plant improvement initiatives and quantify their potential upside in production or EBITDA?

    Management detailed initiatives including operational training, improved efficiency and availability, and technology for gas collection and well field tuning. They expect 5-10% improvement on the 9 million MMBtu nameplate capacity, with most of the improvement flowing to EBITDA due to high operating leverage.

    “When it comes to some of the improvements, when you think about the overall capacity that we have of 9 million MMBtu of nameplate, you add, you know, 5% or 10% improvement on those combined with the from the collection of the gas to the improved availability and efficiency, you can understand how that can really have a significant impact on future results.”

    asked by Derrick Whitfield · answered by Jon Maurer

    2 min read6 chapters

    Detailed Narrative

    01

    Operational Improvements & Production Growth

    OPAL Fuels is actively pursuing plant improvement initiatives to enhance production from existing facilities, which have a nameplate capacity of 9 million MMBtu. These efforts, including improved gas collection and well field tuning, are not capital intensive and are expected to drive 5-10% incremental production. Management anticipates these improvements will significantly boost EBITDA due to high operating leverage, with most incremental production and revenues flowing to the bottom line.

    02

    Project Pipeline & Construction Progress

    The company is advancing construction on several RNG projects. Cottonwood, Burlington, and CMS RNG projects are expected to bring over 2 million MMBtu of annual design capacity online within the next 12 months. Additionally, general contractors have been released for the Stone's Throw and Grady Road projects, which are GFL joint ventures slated to add another 1 million MMBtu of annual design capacity by 2028. In total, these projects will contribute approximately 3 million MMBtu of new capacity over the next 24 months.

    03

    Regulatory Environment & RFS

    The Renewable Fuel Standard (RFS) is viewed as a stable regulatory backdrop, similar to the Clean Air Act. OPAL Fuels highlights bipartisan support for programs like the 45Z production tax credits, which accelerate biogas capture. The company is actively engaging with the EPA to advocate for policies that support additional RNG investment and acknowledge the adoption curve for natural gas vehicles, emphasizing RNG's role in energy dominance and inflation control.

    04

    Heavy-Duty Transportation Market Opportunity

    OPAL Fuels is strategically positioned to capitalize on the energy arbitrage opportunity presented by fuel switching in heavy-duty transportation. The refuse sector has already achieved a 50% adoption rate of CNG trucks for 9- and 12-liter engines. The introduction of the 15-liter natural gas engine is expected to address the largest segment of the 44 billion gallon U.S. diesel market, offering compelling economics and sustainability benefits to accelerate adoption of RNG.

    05

    Capital Allocation & Liquidity

    The company maintains a disciplined capital allocation strategy, balancing investments in new RNG project development and fueling infrastructure. OPAL Fuels ended Q2 FY26 with $162.2 million in liquidity, including $91.4 million in cash, $19.3 million in available revolver capacity, and $51.6 million in undrawn preferred capital commitments. Over the first six months of FY26, the company invested more than $52 million in RNG projects, OPAL-owned fuel stations, and finance transformation initiatives.

    06

    Renewable Power Asset Conversions

    OPAL Fuels is exploring the conversion of existing renewable power assets into RNG plants. The company has identified 3-5 additional projects for potential conversion, with the next three top candidates representing over 4 million MMBtu of design capacity. While these conversions do not offer direct capital cost savings compared to greenfield projects, being on-site provides valuable insight into gas collection and potential gas capabilities.

    AI-generated summary of the company’s earnings call. Not investment advice.