Opal Fuels Earnings Call: Mixed Sentiment Amid Growth

Opal Fuels Inc. ((OPAL)) has held its Q3 earnings call. Read on for the main highlights of the call.

Opal Fuels Inc. recently held its earnings call, revealing a mixed sentiment among stakeholders. The company showcased impressive operational achievements, particularly in renewable natural gas (RNG) production and the launch of new projects. Despite these advancements, financial performance was impacted by lower Renewable Identification Number (RIN) prices and regulatory uncertainties. However, the company remains optimistic about meeting its full-year guidance.

Significant Increase in RNG Production

Opal Fuels reported a notable 30% increase in RNG production, reaching 1.3 million MMBtus compared to the third quarter of the previous year. This growth underscores the company’s commitment to expanding its renewable energy capabilities.

Successful Launch of Atlantic Project

The Atlantic project, Opal’s first collaboration with South Jersey Industries, was successfully launched. This project adds approximately 0.33 million MMBtu of annual design capacity, marking a significant milestone in the company’s expansion efforts.

Expansion of RNG Facilities

Opal Fuels has significantly expanded its RNG facilities, now operating 12 facilities with a combined annual design capacity of 9.1 million MMBtu. This is a substantial increase from just two facilities in 2022, highlighting the company’s rapid growth in the renewable energy sector.

Investment Tax Credit Success

The company completed its fourth investment tax credit monetization for 2025, generating total gross proceeds of $43 million year-to-date. This financial maneuver demonstrates Opal’s strategic approach to maximizing its investment returns.

Strong Liquidity Position

Opal Fuels ended the quarter with a robust liquidity position, totaling $184 million, which includes $29.9 million in cash and short-term investments. This financial stability provides a solid foundation for future growth and investment.

Confidence in Full Year Guidance

Despite facing challenges, Opal Fuels remains confident in achieving its full-year guidance. The company’s strong operational performance and strategic initiatives support this optimistic outlook.

Decrease in Adjusted EBITDA

The company reported a decrease in adjusted EBITDA, which was $19.5 million compared to $31.1 million in the same period last year. This decline is primarily attributed to lower RIN prices, which have impacted revenue and profitability.

Lower RIN Prices Impacting Financials

Opal Fuels experienced a decline in realized RIN prices, which fell to $2.15 from $3.13 last year. This decrease has negatively affected the company’s revenue and EBITDA, posing a challenge to its financial performance.

Challenges in Fuel Station Services

The year 2025 presented a challenging environment for logistics and transportation firms, slowing down truck purchases and investment decisions. This backdrop has posed difficulties for Opal Fuels’ fuel station services.

Regulatory Uncertainties

Potential delays and uncertainties in regulatory decisions, exacerbated by government shutdowns, have impacted Opal Fuels’ planning and strategy. These uncertainties present a significant challenge to the company’s operations.

Forward-Looking Guidance

Looking ahead, Opal Fuels remains optimistic about its future performance. The company plans to expand its RNG production platform and invest in CNG and RNG infrastructure for heavy-duty trucking. Despite the impact of lower RIN prices on third-quarter adjusted EBITDA, Opal Fuels is confident in its strategic direction and growth prospects.

In conclusion, Opal Fuels’ earnings call highlighted a mixed sentiment, with strong operational achievements countered by financial challenges. The company remains committed to its growth strategy and is optimistic about meeting its full-year guidance. Stakeholders can look forward to continued expansion in RNG production and strategic investments in infrastructure.