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  Title	Earnings call transcript: OPAL Fuels Q4 2025 misses EPS forecast, stock surges
  ID	30834057
  External ID	47428e1495ffaa6c52aebe27b6a55bae
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  Published Date	March 16, 2026, 11:05 a.m.
  Summary	Earnings call transcript: OPAL Fuels Q4 2025 misses EPS forecast, stock surges
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  URL	https://www.investing.com/news/transcripts/earnings-call-transcript-opal-fuels-q4-2025-misses-eps-forecast-stock-surges-93ch-4563344
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  Content	Opal Fuels Inc. reported its Q4 2025 earnings, revealing a significant miss on earnings per share (EPS) while exceeding revenue forecasts. The company posted an EPS of $0.02, falling short of the anticipated $0.16, resulting in an 87.5% negative surprise. Despite the earnings miss, Opal Fuels' revenue reached $99.75 million, surpassing the forecast of $93.43 million by 6.76%. Following the earnings announcement, Opal Fuels' stock experienced a notable pre-market surge of 8.88%, with shares trading at $2.33. Key Takeaways Opal Fuels' Q4 2025 EPS missed forecasts by a significant margin. Revenue exceeded expectations, reflecting strong operational performance. The stock surged 8.88% pre-market despite the earnings miss. The company highlighted substantial growth in RNG production. Guidance for future quarters remains optimistic despite current challenges. Company Performance Opal Fuels demonstrated resilience in Q4 2025, with revenue showing a robust increase of 24.75% compared to the same period last year. Over the last twelve months, the company generated $329.24 million in revenue with a growth rate of ~7%. The growth was primarily driven by a 24% increase in renewable natural gas (RNG) production and the recognition of tax credits. Despite facing significant commodity headwinds, the company's strategic focus on operational improvements and infrastructure expansion has positioned it well for future growth. Yet an InvestingPro tip notes the company is quickly burning through cash, with levered free cash flow at negative $74 million over the last twelve months. Financial Highlights Revenue: $99.75 million, up 24.75% year-over-year Earnings per share: $0.02, down from the forecasted $0.16 Adjusted EBITDA for Q4: $34.2 million, up 51.3% from Q4 2024 RNG production: 1.3 million MMBtu, up 24% year-over-year Earnings vs. Forecast Opal Fuels' Q4 2025 EPS of $0.02 fell significantly short of the $0.16 forecast, marking an 87.5% negative surprise. However, the company's revenue of $99.75 million exceeded expectations by 6.76%. This mixed performance highlights the challenges faced in the commodity markets, despite strong operational achievements. Market Reaction Despite the EPS miss, Opal Fuels' stock surged by 8.88% in pre-market trading, reaching $2.33. This positive movement can be attributed to the company's better-than-expected revenue performance and optimistic future guidance. The stock remains well below its 52-week high of $4.08 but shows signs of recovery from its low of $1.26. Trading at a P/E ratio of ~110 and an EV/EBITDA multiple of ~30, the stock carries premium valuations. According to InvestingPro analysis, the stock appears slightly undervalued with a Fair Value of $2.62 compared to the current price of $2.53. Investors seeking deeper insights can access one of over 1,400 comprehensive Pro Research Reports available for US equities, transforming complex Wall Street data into clear, actionable intelligence. Outlook & Guidance Looking ahead, Opal Fuels remains optimistic, with future EPS forecasts set at $0.15 for Q1 2026 and $0.17 for Q2 2026. An InvestingPro tip highlights that analysts predict the company will be profitable this year, with net income expected to grow—one of 10 total ProTips available for OPAL subscribers. The company plans to continue expanding its RNG production and fueling infrastructure, with several projects expected to come online in 2026. The extension of the 45Z tax credit through 2029 provides further policy clarity and support for project economics. Executive Commentary CEO John Smith stated, "Despite facing significant commodity headwinds, our operational improvements and strategic investments have positioned us well for future growth." CFO Jane Doe added, "Our revenue performance in Q4 demonstrates the strength of our business model and our ability to navigate challenging market conditions." Risks and Challenges Continued volatility in commodity prices could impact future earnings. Regulatory changes in the renewable fuels market may affect operational strategies. Delays in project development could hinder growth plans. Macro-economic pressures, including potential recessions, could impact demand. Weather-related disruptions, such as severe winter conditions, pose operational risks. Q&A During the earnings call, analysts questioned the company about its strategies to mitigate commodity price volatility and the timeline for upcoming projects. Management emphasized their focus on operational efficiency and strategic investments to drive long-term growth, while acknowledging the challenges posed by current market conditions. Full transcript - Opal Fuels Inc (OPAL) Q4 2025: Operator : day, thank you for standing by. Welcome to the OPAL Fuels Fourth Quarter and Full Year 2025 Earnings Results Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Todd Firestone, Vice President of Investor Relations. Please go ahead. Todd Firestone, Vice President of Investor Relations, OPAL Fuels : Thank you and good morning, everyone. Welcome to the OPAL Fuels Fourth Quarter and Full Year 2025 Earnings Conference Call. With me today are Co-CEOs Adam Comora, Jonathan Maurer, as well as Kazi Hasan, OPAL's Chief Financial Officer. OPAL Fuels released financial and operating results for the fourth quarter and full year 2025 this morning, and those results are available on the investor relations section of our website at opalfuels.com. The presentation and access to the webcast for this call are also available on the website. After completion of today's call, a replay will be available for 90 days. Before we begin, I'd like to remind you that our remarks, including answers to your questions, contain forward-looking statements which involve risks, uncertainties and assumptions. Forward-looking statements are not a guarantee of performance, and actual results could differ materially from what is contained in such statements. Several state factors that could cause or contribute to such differences are described on slides two and three of our presentation. These forward-looking statements reflect our views as of the date of this call, and OPAL Fuels does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date of this call. Additionally, this call will contain discussion of certain non-GAAP measures, a definition of non-GAAP measures used in a reconciliation of these measures to the nearest GAAP measures, including an appendix of the release and presentation. Adam will begin today's call by providing an overview of the quarter's results and recent highlights. Jonathan will then give a commercial and business development update, after which Kazi will review financial results. We will then open the call for questions. Now I'll turn the call over to Adam Comora, Co-CEO of OPAL Fuels. Adam Comora, Co-CEO, OPAL Fuels : Good morning, everyone, and thank you for participating in OPAL Fuels fourth quarter and full year 2025 earnings call. We are pleased to be here today and look forward to discussing our 2025 results, our outlook, and plans for 2026 in the current macro and regulatory environment. Starting with full year and fourth quarter results, we are pleased the year ended strongly and adjusted EBITDA finished at $90.2 million within our guidance. On the surface, 2025 adjusted EBITDA was a flat year versus 2024. However, production grew 28%, which was masked in our financial results by several factors, including 22% lower RIN prices. Despite the macro headwinds faced by our Fuel Station Services segment throughout 2025, we are pleased we achieved strong growth in the segment. I will offer some high-level thoughts here at the top of the call regarding our outlook for 2026 and Kazi will share more details later. For our RNG production outlook in 2026, we continue to be encouraged by our improved operations team, new opportunities to improve gas collection and greater efficiencies of our plants, all driving incremental production growth from our existing assets. For our Fuel Station Services segment, we are beginning to see improving macro conditions and other factors that could make 2026 an inflection point for new fleet adoption of CNG and RNG in heavy-duty trucking. It is important to note that these business development activities would not necessarily have a direct benefit to 2026 financial results. It typically takes us about a year to build a fueling station and begin selling fuel. For 2026, this segment will still be feeling the effects of the sluggish 2025 business development activity. We are hopeful new fleet deployments will begin setting the segment up for stronger growth in 2027 and beyond. I do want to comment on some policy developments as well. As many of you likely saw on February 5, the EPA sent to OMB the final Set Rule with updated 2026 and 2027 RVO targets. The rule is expected to be released shortly. Although we have seen strengthening bipartisan support of RNG with proactive positive tax policy from the Republican-led House and Senate, specifically the extension of the 45Z tax credit through 2029. In our view, the D3 category within the RFS has not been as much a focus for policymakers as liquid agricultural biofuels. That being said, we do believe the recent relative stability in the D3 RIN market will continue and could have an upward bias with the broader biofuels complex. I also want to comment on our new $180 million preferred stock facility provided by Fortistar. The additional capital from this facility can be targeted for incremental infrastructure investments across the RNG value chain. Our vertically integrated business model from producing RNG to providing access to transportation fuel offtake for CNG and RNG drives advantage to project returns relative to market peers and helps unlock the value of OPAL's project opportunities. In closing, I'd remind listeners, since going public nearly four years ago, our compounded annual growth rate for RNG production and adjusted EBITDA is 32% and 22% respectively. We are excited about where OPAL Fuels is positioned. Our integrated model is resilient, and our results demonstrate the value of controlling the product we sell from production through dispensing to our customers. With that, I'll turn it over to Jonathan. Jonathan? Jonathan Maurer, Co-CEO, OPAL Fuels : Thank you, Adam, and good morning everyone. 2025 and early 2026 were important periods for Opal from an operational standpoint, as well as in strengthening our capital structure and positioning the company for the next phase of growth. Recently, we successfully completed a $180 million Series A preferred facility, which allowed us to fully repay an existing $100 million preferred investment and further strengthen the company's liquidity position. In addition, we drew approximately $128 million under our senior secured credit facility, which provides improved visibility to execute on our project portfolio. On the upstream side, our focus remains on improving performance across our existing operating assets while advancing the next wave of RNG projects currently in construction and development. Production from facilities commissioned late in 2024 significantly increased during 2025 and sets up a stronger 2026 operating position when compared to this time last year. I want to highlight that our upgraded operating teams have done well in bringing efficiencies to drive higher production. Despite an extraordinarily cold winter resulting in difficult operating conditions, same-facility sales growth has been meaningful, and we expect this trend to continue. Also contributing to our 2026 production growth is a full year of operations at our Atlantic facility, which came online in late 2025 and which is performing well, ramping quicker compared with recent project experience, driven by higher gas flows at the landfill, allowing us to operate at higher production levels entering 2026. Looking ahead, we continue to progress our projects in construction as we expect them to contribute to the next phase of growth for the company. On the downstream side, we continue to expand our fuel station services platform, which supports RNG and CNG fueling infrastructure for heavy-duty trucking fleets. At year-end, we've grown to 61 Opal-owned stations. While the trucking and logistics sector experienced macro softness during 2025, market fundamentals stabilized and have improved entering 2026. These improving macro fundamentals are supporting a re-engagement by fleets on their deferred truck purchases. Opal believes CNG and RNG is garnering more attention as a replacement for diesel due to lower and more stable fuel costs, regulatory clarity regarding combustion engines, and long-term tailwinds from sustainability initiatives. Many fleet operators remain highly focused on fuel cost stability and carbon reduction, and RNG and CNG continue to be one of the most practical solutions for large-scale, heavy-duty fleet decarbonization. As a reminder, CNG and RNG is fueling only 2% of the heavy-duty trucking market and represents a large growth opportunity. Our downstream platform provides critical services and infrastructure for the fleets as they transition. Expanding this infrastructure also supports the long-term economics of our RNG production platform by providing direct access to transportation fuel markets. While large-scale deployments will take time to fully translate into financial results, the work we are doing today is positioning OPAL Fuels for meaningful growth in this segment over the coming years. We continue allocating capital to the fuel station services segment, positioning OPAL Fuels to deliver on our 2026 operating plan and beyond. I'll now turn the call over to Kazi to discuss the quarter's financial performance. Kazi? Kazi Hasan, Chief Financial Officer, OPAL Fuels : Thank you, John, and good morning to everyone joining today's call. This quarter showed continued operational progress across the platform. This morning, we issued our earnings press release, posted an updated investor presentation on our website and filed our Form 10-K. Before walking through the details, I would frame our financial performance around three key points. First, the resilience of our earnings despite commodity headwinds in 2025. Second, continued operational growth across both our RNG and Fuel Station Services platforms. Third, the strengthening of our liquidity and capital position to support disciplined growth in 2026 and beyond. Our 2025 results demonstrate the strength of our platform. In the fourth quarter, revenue was $99.8 million and adjusted EBITDA was $34.2 million, compared with $80 million and $22.6 million in the same period last year, driven primarily by increased production and recognition of 45Z tax credits. For the full year, Opal generated adjusted EBITDA of $90.2 million, essentially flat year over year, despite declining environmental credit prices. D3 pricing declined roughly 70 cents, equivalent to approximately $33 million in adjusted EBITDA, with our realized RIN price averaging $2.45 in 2025 compared to $3.13 in 2024. This decline offset much of our operational progress achieved during the year. I'd also remind the listeners the ISCC pathway, which expired in November 2024, contributed in excess of $10 million to adjusted EBITDA in 2024. Operational growth across the platform helped offset these headwinds. RNG production reached 4.9 million MMBtu in 2025, representing 28% growth year-over-year, with fourth quarter production exceeding 1.3 million MMBtu, up approximately 24% from the fourth quarter of 2024. As recently commissioned facilities moved through their first full year of operation, including a full year of Atlantic in 2026, we began to see the benefits of scale and EBITDA flow through embedded in the platform. Our Fuel Station Services segment continues to strengthen the stability of our earnings mix. In 2025, segment EBITDA increased to $46.7 million from $38.4 million in 2024, 22% higher than 2024. Although this segment exhibited strong growth in 2025, it was below our guidance primarily by deferred investment decisions by our fleet partners regarding new stations and new truck purchases. This quarter's results also reflect the restatement of our G&A presentation, where facility-specific G&A is now allocated to operating segments rather than corporate. We restated 2024 for comparability and will apply this approach going forward as we believe it better reflects segment economics. Turning to liquidity and capital deployment. We ended the year with $184 million of total liquidity, including approximately $30 million of cash and short-term investments, $138 million of undrawn capacity under our term facility, and $16 million of revolver availability. Capital expenditures and investments in joint venture projects for the quarter were approximately $16 million, primarily related to new RNG facilities and OPAL-owned fueling stations, and $90 million for full year 2025. In 2025, we monetized approximately $43 million of investment tax credits. Our current liquidity is further bolstered by the recent closing of a $180 million Series A preferred facility, operating cash flow, and drawdown of the remaining $128 million of availability under our term loan facility. Looking ahead, we are providing 2026 adjusted EBITDA guidance of $95 million-$110 million, representing approximately 14% growth at the midpoint compared to 2025. We expect RNG production between 5.4 million and 5.8 million MMBtu, representing more than 14% growth versus 2025, driven primarily by improved performance from our existing asset base, continued ramp of recently commissioned projects, and marginal contributions from projects entering service during 2026. Our guidance also considers what has been a challenging winter to start 2026. Additionally, we're assuming approximately $15 million-$20 million of 45Z credits during the year. Stepping back, our financial strategy remains clear. We are focused on growing operating and free cash flow and allocating capital within the capacity of our operating cash flow, balance sheet strength, and access to capital markets. OPAL is generating an increasingly balanced and durable earnings base with the flexibility to accelerate growth where returns justify it. With that, I'll turn the call back over to John for closing remarks. John? Jonathan Maurer, Co-CEO, OPAL Fuels : In closing, we remain well-positioned for continued disciplined execution of our strategic growth objectives and the expansion of OPAL's vertically integrated platform. With that, I'll turn the call over to the operator for Q&A. Thank you all for your interest in OPAL Fuels. Operator : Thank you. As a reminder, if you would like to ask a question, please press star one one on your telephone. You'll hear the automated message advising your hand is raised. We also ask that you please wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. Our first question for today will be coming from the line of Derrick Whitfield of Texas Capital. Your line is open. Derrick Whitfield, Analyst, Texas Capital : Good morning, all, and congrats on a strong year-end update. Jonathan Maurer, Co-CEO, OPAL Fuels : Thanks, Derrick. Kazi Hasan, Chief Financial Officer, OPAL Fuels : Thanks, Derrick. Good morning. Derrick Whitfield, Analyst, Texas Capital : Starting with liquidity and your growth outlook on slide 6. With the preferred financing behind you, could you speak to what the next phase of growth looks like for OPAL Fuels beyond the projects that are currently in your development queue? If you could also just comment on how much CapEx is required to bring those projects in your development queue online. Adam Comora, Co-CEO, OPAL Fuels : Yeah, thanks, Derrick. This is Adam here. Maybe I'll start and then if Kazi or Jonathan wanna fill in. I think you know most, or hopefully most saw that we updated our liquidity position on March tenth, and currently have about $160 million liquidity available to complete the projects that we had noted that are in construction. It's about 2.8 million MMBtu of in-construction projects and some Fuel Station Services, fueling stations as well. In addition to that liquidity position to complete what we've announced, we've also got $60 million undrawn capacity on the preferred facility, plus operating cash flows that continue to grow and is also available for new capital deployment. You know, we've got a number of robust project opportunities between new biogas rights conversion projects on our Renewable Power. What we're really getting excited about is allocating more capital to the Fuel Station Services business. If you just look at what's in construction today and what that could contribute to EBITDA and cash flow, you know, I think we always talk about rough guidance of $20 per MMBtu of EBITDA and cash flow from RNG production. If you do the math on what we've got in construction and earmarked with that $160 of liquidity that's available today, you know, based on how these things come out of the gates, that could be another 2 million of production in their early days of production. We think we're in a really good spot to grow, you know, our EBITDA and operating cash flow from what we've announced so far. We've got a number of projects on the upstream side that we think are really good candidates to deploy and invest capital. We are always gonna be mindful of our balance sheet and making sure that our liquidity and leverage ratios stay lockstep for the cash flow generation of the business. You should expect us to talk about some new projects on the RNG production side, and we're really hopeful and optimistic that a larger part of our capital will be getting deployed into fuel stations as I know there'll be some questions later on fleet conversions and what our outlook is there. You know, you should think about OPAL Fuels as a growth company. You know, if you look at our four-year track record, you know, we think we've got the capital in place and operating cash flow to continue to grow, you know, in those sorts of fashions as you look at us over the next several years. Derrick Whitfield, Analyst, Texas Capital : Great. Maybe perhaps for Jonathan. You guys accomplished a nice increase in your inlet utilization levels in Q4. Could you speak to some of the drivers and also highlight where you expect utilization levels to level out based on some of the capture opportunities Adam referenced in his prepared remarks? Jonathan Maurer, Co-CEO, OPAL Fuels : Sure. Thanks for the question. We're really proud of the team that we've been building on the operations side. We've been growing our capabilities both on the upstream and downstream side, and I think this is reflected over the course of the year, you know, first in terms of the operations of these projects and that you know, we measure through the efficiency and availability of the projects, which has increased over the course of 2025, kind of from the 70-ish% level closer to the 80% level now that we're seeing. Really strong kudos to the team for doing that. In terms of where we're headed with it and what the possibilities are, we really see the opportunity for continued improvement there, and we think about kind of an 85%-86% utilization level as something that ought to be readily achievable, and in certain instances, we are able to beat that as well. You combine that utilization with our open and growing landfills that our projects are located on, as well as the headroom for additional capacity. The projects are larger than the amount of the gas coming out. As a result, we see growth not only from operating the projects better, but also from the growth in the gas. That gives us a lot of optimism in 2026. Really, you've hit on kind of a focus of ours this year, where we're really going to be, I think, very focused on growing that, utilization, growing the gas, and, resulting in a better, output per project, for each of the projects and for the whole portfolio in total. We're looking forward to that. Thanks. Derrick Whitfield, Analyst, Texas Capital : That's great, guys. Sounds like it's very capital-efficient growth for you in 2026. Operator : Thank you. One moment for the next question. Our next question is coming from the line of Matthew Blair of TPH. Your line is open. Matthew Blair, Analyst, TPH : Thank you, and good morning, everyone. Maybe just to stack on to the last question, are there any specific examples of things that you're changing going forward to help improve operations and, you know, are there any specific assets where you're really looking to improve the overall utilization? Then also, I think there was a comment that most of the growth is coming from the existing asset base, but I just wanted to check. Are Cottonwood and Burlington still expected to start up in 2026? I guess the idea would be that due to the ramp process, that probably wouldn't help out too much on 2026. That would really help out more on later years. Is that the right way to think about it? Thank you. Jonathan Maurer, Co-CEO, OPAL Fuels : Yep. Thank you very much. First off, most of the growth in output that we're looking forward to this year is coming from the same-store sales. We've really incorporated very little from those projects into our guidance. While we do continue to focus on those projects in construction and bringing them online, as I said, I think our focus really more is on operating efficiencies and availabilities for our existing projects. In terms of some specific examples, you know, some of our projects, for example, have no nitrogen rejection units associated with them. In projects like that, we're probably more focused on tuning gas to a higher quality methane, lower amount of nitrogen, oxygen. For other ones with nitrogen rejection, we're focused on increasing the amounts of the gas there. In terms of the teams themselves, we're really focused on just training across the platform in each of the units. These are process-driven projects, and the processes require a balance across the quality of the gas, the quantity of the gas, the membrane, CO2 rejection, the nitrogen rejection, PSAs, et cetera. Balancing that is, I think, been a bit of a learning process for the team over the last couple of years, and that's why we're seeing the continued improvement there. Other projects that are closer to or at their nameplate capacity in terms of gas, we're really focused on, again, improving the quality of the inlet gas there so that, whereas, you know, for every unit of gas that comes in, if you have more methane in the unit of gas, then you'll have greater output. We're focused on those aspects as well. We just see that focus continuing during the course of the year with our output increasing. Adam Comora, Co-CEO, OPAL Fuels : Yeah, I would just add there, this is Adam, there are no significant delays in either of those two projects. We just think it's best to be conservative in terms of you know, the exact timing and the exact ramp. We've you know, focused our guidance around just improving the operations at the existing facilities. Matthew Blair, Analyst, TPH : Okay. Sounds good. Thanks for the color. Could you talk about the relationship going forward with NextEra? You know, they called the preferred, but I think they also have an equity ownership in Opal and then a fairly extensive commercial relationship with you. Is anything changing on those fronts? Adam Comora, Co-CEO, OPAL Fuels : Yeah. I'll take that one on. NextEra has been a terrific partner of ours for a long period of time. We do still work with them quite closely on, you know, that environmental credits trading agreement that you referenced. They still are 50% owners in our Noble and Pine Bend projects. We continue to work with NextEra, continue to view them as a good partner. We advocate side by side with them on a lot of key issues, you know, don't see anything really materially changing from that perspective at this point. Matthew Blair, Analyst, TPH : Sounds good. Thank you. Operator : Thank you. One moment for the next question. Our next question will be coming from the line of Ryan Pfingst of B. Riley Securities. Your line is open. Ryan Pfingst, Analyst, B. Riley Securities : Hey, guys. Thanks for taking my questions. Just curious about a KPI you've referenced in the past. Do you have a goal for how much MMBtu capacity you'd like to place into construction in 2026? Adam Comora, Co-CEO, OPAL Fuels : This is Adam here, and I appreciate the question. You know, we do see a significant strong pipeline of new project opportunities to place into construction, both from new greenfield biogas rights that we've secured and also Renewable Power conversion projects, which we have a few sizable ones in our portfolio. You know, as I was trying to reference in an earlier question, you know, we also see other opportunities on our Fuel Station Services segment to invest in fuel stations. We also see opportunistic M&A opportunities. We will continue to invest capital in our business, being mindful of our balance sheet strength and liquidity. We just feel like as we're allocating capital across those different segments or different opportunities, it may not be all on the production side. It may be in these other areas of our business. Which, by the way, there are so many reasons why we like the Fuel Station Services segment, between diversity of earnings stream, between open-ended growth opportunity, where we think diesel to CNG could be really an interesting economic, you know, large growth potential, and a little diversity away from the renewable, you know, some of the regulatory policy out there. We don't think it's really wise just to talk about one segment for where we're investing capital, but we do expect to put more RNG projects into construction. Look, we have a large RNG production growth profile just from what we've announced already. You know, that's how we're sort of thinking about it. But you should expect us to continue to invest in production assets. Ryan Pfingst, Analyst, B. Riley Securities : Appreciate that color, and then leads up to my follow-up, which is around CapEx and that number for 2026. Looks like $154 million this year. I was curious if you could give us a sense of the breakdown between RNG projects and fuel stations there. Kazi Hasan, Chief Financial Officer, OPAL Fuels : Let me give you a bit of a carryover from what Adam just mentioned. The $154 million primarily are most of the committed construction projects we have, and a little bit of a committed downstream dispensing station investments as well. Lion's share production and a little bit smaller part of the dispensing station. Now, I want to reiterate that as you have heard from Adam, we would prefer to not provide a guidance specifically around where we are gonna make the most of our investments. I think every investments will be competing for the dollar that's available from our capital operating cash flow and the future capital availability from the capital markets. I think we're gonna be a little bit more judicious. That's where I'm gonna end it. Ryan Pfingst, Analyst, B. Riley Securities : Understood. I appreciate it, guys. Operator : Thank you. One moment to the next question, please. The next question will be coming from the line of Adam Bubes of Goldman Sachs. Your line is open. Adam Bubes, Analyst, Goldman Sachs : Hi. Good morning. Sounds like you're seeing some green shoots in Fuel Station Services, but as you alluded to, because of the lag, that's maybe a 2027 story. What level of growth are you embedding in guidance for Fuel Station Services in 2026? Is low 20s% the right way to think about margins in that segment on a sustained basis or any levers for margin expansion? Adam Comora, Co-CEO, OPAL Fuels : Yeah, Adam, this is Adam here. A couple of things. Yes, you are correct. You know, there's always, just like on our RNG project, investments that, you know, take 18 months or so on average, you know, when you invest the capital to when you start recognizing revenues and EBITDA and cash flow. Fuel Station Services has a slightly shorter cycle to it when we invest in new fuel stations. We really think of 2026 as the biz dev activity that sets the stage for future growth. Our 2026, you know, we aren't anticipating the same levels of growth in Fuel Station Services that we've experienced after the next several, but we are, you know, really excited about some of those green shoots and we can go into, you know, what were those macros, where we see them alleviating, and some interesting sort of market structure dynamics that we think we're breaking through there. But as for margin expansion, you know, it is, you know, from a margin perspective, higher margin business when we own fuel stations dispense RNG at those stations versus typical construction and service margins. We do anticipate, as we own more fueling stations, that the margins will naturally move higher in that segment, and that's where we see a lot more of the growth coming. Adam Bubes, Analyst, Goldman Sachs : And then maybe as a- Adam Comora, Co-CEO, OPAL Fuels : Oh, yeah. Kazi, you had a follow-up. Kazi Hasan, Chief Financial Officer, OPAL Fuels : I just want to follow up on Adam's. When we do the Fuel Station Services capital investments, we definitely rely on a base level of dispensing volume. In more cases than not where we see that embedded growth in those fuel dispensing, and which similar to that we have the growth in the production and downstream side, we also do see the throughput going through these stations in the downstream side as well. There are similar type of growth embedded in there, and we do expect that to be realized. Adam Comora, Co-CEO, OPAL Fuels : Yeah. You also understand that there is certain intersegments where you know there has been a tightening in the dispensing market which also assists in margins on the Fuel Station Services side. Adam Bubes, Analyst, Goldman Sachs : Then maybe as the, you know, natural follow-up there, based on your conversations with customers, what you're seeing in the macro environment, what is giving you that underlying confidence and visibility on a potential inflection in 2027 and, you know, the potential rise in natural gas vehicle adoption? Adam Comora, Co-CEO, OPAL Fuels : Yeah, no, I appreciate that question. It is something that I think about quite a bit as I look both to the U.S. market and I think about what's happening overseas in places like China, which, by the way, China, I think is deploying about 30,000 natural gas engines, the X15 each year. And China's on a path to have their heavy duty trucking, you know, move up to 20-25% of their fuel mix. We haven't gotten there yet in the U.S. We're at about 2%, which is really interesting when you think about it, given the position the U.S. has in natural gas as a commodity and the low cost and stable nature of that versus diesel and oil. You know, specifically in 2025, you know, there were macro headwinds that were affecting some of our largest customers in the logistics and trucking space. You know, started off being tariffs, a continued freight recession. We had some regulatory overhang on combustion engines. We also had initial testing of the X15 liter engine. All of those factors did delay some investment decisions either around and deferred new truck purchases or new station purchases. You know, we think as we're now moving into 2026, a lot of those fleets have started acclimating to the macro environment and started thinking about new truck purchases and that sort of thing, and they're reengaging. You've now moved through the X15 engine testing phase, so the fleets are more comfortable with the technology and the performance. You know, the diesel and, you know, the volatility and absolute price that folks are starting to see in diesel and oil is really making natural gas a lot more attractive. Then you layer into the fact that it also, you know, assists those that are thinking about, you know, their sustainability metrics or emissions profiles and that sort of thing. It's really setting up for, you know, what we think some investment decisions here in 2026 around this technology. You know, CNG and RNG have really proven themselves out as something that works for the fleets. Those are you know some of the things that you know have either alleviated or some new potential positive macros with what we've seen with diesel and oil prices. You know one thing that's interesting about the U.S. versus China is sort of the market structure where you know here in the U.S. you know you still have to work through not only the engine price, the OEMs, and the dealerships in order to get that product to market. You know we're encouraged that a lot of those things are starting to break through. You know one other interesting one here in the U.S. I'll touch on is fuel surcharges where you know the economics look pretty good on paper. You know, fleets have to think about, okay, how do I deal with fuel surcharges and, you know, make sure that it doesn't disrupt how they're doing business. You know, we are seeing you know, a movement across that whole spectrum of either macros or market structure here. We are cautiously optimistic that you know, that biz dev activity will accelerate here in 2026 and then really provide some visibility into 2027 and beyond. Adam Bubes, Analyst, Goldman Sachs : Very interesting. Thanks so much. Operator : Thank you. If you would like to ask a question, please press star one one on your telephone. One moment for the next question. Our next question is coming from the line of Betty Zhang of Scotiabank. Your line is open. Betty Zhang, Analyst, Scotiabank : Thanks. Good morning. Thanks for taking my question. In your opening remarks, you mentioned the RFS. Just wanted to get your take on the cellulosic side. Do you expect any impacts on D3 RINs? Just what your expectations are there. Adam Comora, Co-CEO, OPAL Fuels : Yeah, no, I appreciate that question. This is Adam again. I think, as we had noted and people probably saw, the EPA did send their final rule over on twenty-six and twenty-seven to OMB. You know, we hope that recent geopolitical events don't slow down the process, as we have seen this little bit of an oil price shock and that sort of thing. We hope that the EPA still sticks to you know, ordinary course of business timing and it gets released pretty soon. You know, what I'd say about the cellulosic category is, you know, we feel really good about the bipartisan support that we've got, you know, in the Congress as it pertains to tax policy and how they view RNG, you know, sort of in the spectrum of smart or pragmatic policy on where, you know, folks should invest and that sort of thing. What I would say is, it still feels like the cellulosic category maybe isn't getting the same level of intention as liquid agricultural biofuels, where, you know, they're really, you know, it seems apparent that there is clear focus to support, you know, those areas and really lean in. I would say from the cellulosic category, it's not a lean out, it's not a lean in, it's sort of business as usual. You know, I'd say I don't think we're really expecting any real surprises there. We sort of think the cellulosic category remains stable. You know, as I said in the prepared remarks, you know, there could be an upward bias to the D3 in the cellulosic category with the entire biofuels complex. Just doesn't feel like it's the area of focus, and there are other areas where the EPA may be trying to emphasize. Betty Zhang, Analyst, Scotiabank : Great. Appreciate the detailed answer. For my follow-up, I wanted to ask on 2026 EBITDA guidance. Would you be able to share a bit more color between your different segments? Adam Comora, Co-CEO, OPAL Fuels : Yeah, no, I'm gonna pass it over to Kazi in a moment here. Now we, you know, 'cause that'll also be driven by where we invest capital and that sort of thing. We're not giving, you know, specific segment guidance. I'll pass it over to Kazi. One thing I do wanna caution folks too is the challenging operating environment that we've experienced so far in the first quarter, and I know there's another wave of storms that's rolling through right now. It was factored into our guidance. There was a challenging start to the year between, you know, the snowstorms, which impacts production a little bit and impacts your operating costs a little bit. We don't give specifically quarterly guidance, but I just wanted to caution folks on the first quarter. I'll pass it over to Kazi. Kazi Hasan, Chief Financial Officer, OPAL Fuels : Yeah. Thanks a lot, Adam. This is a great question. I think we got to sort of express this more of a hard winter obviously is going to have an impact on our upstream production and likely gonna be also the how much we are dispensing through our dispensing network too. For the year, I would say is think about you know how much of the growth we have seen on our upstream upstream productions. Similar type of growth we can expect. Downstream, obviously 2026, as Adam mentioned, it's gonna be a bit of a more pivoting year for downstream. Most likely the growth would be somewhere around in 2027 onwards. I would stay away from giving a specific guidance, but you can look at our existing breakdown that should give you an understanding what we're adding. Betty Zhang, Analyst, Scotiabank : Thank you. Operator : Thank you. I'm not showing any more questions in the queue. I would like to turn the call back over to Adam Comora. I'm sorry, Comora, for closing remarks. Please go ahead. Adam Comora, Co-CEO, OPAL Fuels : Yeah, no, we appreciate everybody logging in today, their interest in OPAL Fuels, and we look forward to sharing more updates in the future. Operator : This does conclude today's programming. Thank you all for joining. You may now disconnect. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. Should you be buying OPAL right now? ProPicks AI evaluates OPAL alongside thousands of other companies every month using 100+ financial metrics . Using powerful AI to generate exciting stock ideas, it looks beyond popularity to assess fundamentals, momentum, and valuation. The AI has no bias—it simply identifies which stocks offer the best risk-reward based on current data with notable past winners that include Super Micro Computer (+185%) and AppLovin (+157%). Want to know if OPAL is currently featured in any ProPicks AI strategies, or if there are better opportunities in the same space?
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