OPAL Fuels targets 2.0M MMBtu in 2025 project construction as downstream focus rises

Earnings Call Insights: OPAL Fuels Inc. (OPAL) Q3 2025

MANAGEMENT VIEW

* Adam Comora, Co-CEO, reported "RNG production was 1.3 million MMBtus, representing both sequential growth and an increase of approximately 30% compared to the third quarter of last year." He highlighted that October production achieved "the highest rate in OPAL's history following a record performance in September." Comora emphasized that these production rates are in line with the low end of full-year guidance.
* Comora stated, "We brought the Atlantic project online, and we are very pleased with its initial ramp. This is our first project with our partner, South Jersey Industries." He noted this brings the company to "12 operating RNG facilities with a combined 9.1 million MMBtu of annual design capacity."
* Comora reported that construction has begun at the CMS RNG project in North Carolina, representing "1.0 million MMBtu of annual design capacity net to OPL." He shared confidence in meeting the target of "2.0 million MMBtu of annual design capacity into construction in 2025."
* On the financial side, Comora said, "We completed our fourth investment tax credit monetization to date and third for this year, bringing our total gross proceeds to $43 million year-to-date."
* Kazi Hasan, CFO, stated, "Revenue for the quarter was $83 million and adjusted EBITDA was $19.5 million compared to $84 million and $31.1 million for the same period last year due to lower realized RIN pricing and the expiration of ISCC pathway, partially offset by higher RNG production."
* Hasan noted, "We ended the quarter with $184 million of total liquidity, which includes $29.9 million of cash and short-term investments, $138.4 million of undrawn capacity under our term facility and $15.5 million of revolver availability."
* Jonathan Maurer, Co-CEO, added, "We currently have 47 operating fueling stations and 41 stations under construction, 16 of which are OPL-owned, bringing total OPL-owned fueling stations in operation and construction to 63."

OUTLOOK

* Management reiterated confidence in delivering full year 2025 guidance, supported by "increasing production performance, the growth of Fuel Station Services segment and beginning to recognize 45Z production tax credits in the fourth quarter."
* Hasan indicated, "For the fourth quarter, higher RIN pricing compared to last quarter, sequential production growth, expected fuel station services performance and contribution from 45Z tax credits support our adjusted EBITDA expectation, although likely towards the lower end of the range."
* Comora outlined, "We remain encouraged our growth will continue in 2026 and beyond. We have a robust opportunity set to continue to build our RNG production platform and see an increasing need for energy infrastructure assets to support CNG and RNG adoption for heavy-duty trucking."

FINANCIAL RESULTS

* Third quarter revenue was reported at $83 million, with adjusted EBITDA of $19.5 million, as stated by Hasan, compared to $84 million and $31.1 million for the same period last year.
* Realized RIN price for the quarter was $2.15, down from $3.13 last year.
* Capital expenditure for the quarter was $16.4 million, relating to new RNG facilities and new OPL-owned fueling stations.
* Hasan shared, "In the quarter, we monetized approximately $17 million of investment tax credits this quarter, and we remain on track to achieve approximately $50 million in gross ITC monetization for the full year."

Q&A

* Derrick Whitfield, Texas Capital: Asked about the RNG production growth trajectory and projections into 2026. Maurer responded, "We've seen good sequential growth in all of these metrics, and that's resulted in same-store sales growth from the projects that we're operating. So yes, I think we'll continue to see that trajectory move forward during the course of the rest of this year and into next year is our expectation."
* Whitfield, Texas Capital: Inquired about regulatory timing and D3 RVO appetite. Comora replied, "We believe what RNG does receive bipartisan support. We've seen it in the tax policy. And we have been speaking with a number of folks on the Republican side of things as it pertains to D3 volumes."
* Matthew Blair, TPH: Asked about balancing growth spending with free cash flow demonstration. Comora explained, "The maintenance CapEx that we have on our facilities is included in our operations and our operating cash flow. So when you look at the CapEx on our balance sheet, that is solely on new RNG projects, facilities and also new OPIL-owned fueling stations."
* Blair, TPH: Requested clarity on 45Z credits. Comora replied, "We're pleased that we've now registered all of our facilities starting in the fourth quarter for 45Z generation."
* Adam Bubes, Goldman Sachs: Questioned Q4 guidance components and 45Z contribution. Comora answered, "In the fourth quarter, I think most people are aware that the price has risen to around $2.40 for the D3 RINs... We're also going to see an improved performance in fuel station services. And there will be some component to 45Z."
* Y. Zhang, Scotiabank: Asked about the downstream segment strategy. Hasan responded, "The downstream segment... allows us to create a business segment that potentially will provide a lot more balanced earnings profile going forward, including cash flow profile."

SENTIMENT ANALYSIS

* Analysts focused on production growth, regulatory clarity, and capital allocation, with a neutral to slightly positive tone, probing for details on growth pacing and new revenue streams but not expressing strong skepticism.
* Management maintained a confident tone in both prepared remarks and Q&A, frequently highlighting operational progress and strategic clarity, as with "We remain confident in delivering operating and financial results in line with our full year guidance."
* Compared to the previous quarter, management’s tone was stable, and analysts’ tone remained neutral, with ongoing interest in growth execution and regulatory impacts.

QUARTER-OVER-QUARTER COMPARISON

* Guidance remains unchanged, with continued emphasis on discipline in capital allocation and a robust project pipeline.
* Production for Q3 increased sequentially to 1.3 million MMBtu, up from 1.2 million MMBtu in Q2; realized RIN pricing declined further.
* Downstream Fuel Station Services segment has become a greater focal point, with expansion in the number of stations under construction and operation.
* Management’s tone was consistent, emphasizing operational progress, while analysts maintained a practical, results-focused approach.
* The shift towards highlighting downstream infrastructure and balanced earnings mix was more pronounced this quarter.

RISKS AND CONCERNS

* Management noted that a "lower RIN price environment" and the expiration of ISCC pathway impacted results.
* Regulatory and policy uncertainty, including delays from the government shutdown, was cited as affecting timing on RVO rules and 45Z models.
* Competitive development in RNG projects is viewed as limited by capital and offtake access; Hasan commented, "Access to capital and limited access to dispensing has really put a little bit of a limit on what competitors are able to do in the market."
* Analysts raised questions about M&A, capital discipline, and market competition, but management reiterated focus on disciplined investment and capital deployment.

FINAL TAKEAWAY

OPAL Fuels management highlighted operational consistency, disciplined capital allocation, and a robust project pipeline with the commissioning of new RNG facilities and construction starts on track for 2.0 million MMBtu in 2025. The company remains confident in meeting its full-year guidance, supported by increased production, a growing downstream fuel station footprint, and new tax credit monetization, while maintaining a balanced approach to navigating regulatory and competitive challenges.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/opal/earnings/transcripts]

MORE ON OPAL FUELS

* OPAL Fuels Inc. (OPAL) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4840701-opal-fuels-inc-opal-q3-2025-earnings-call-transcript]
* Seeking Alpha’s Quant Rating on OPAL Fuels [https://seekingalpha.com/symbol/OPAL/ratings/quant-ratings]
* Historical earnings data for OPAL Fuels [https://seekingalpha.com/symbol/OPAL/earnings]
* Financial information for OPAL Fuels [https://seekingalpha.com/symbol/OPAL/income-statement]