• Adjusted EBITDA (2024): $90 million, in line with guidance.
• Fuel Station Service Segment EBITDA (2024): $40.2 million, 76% higher than 2023.
• RNG Fuel Production (2024): 3.8 million MMBtus, up 41% from 2023.
• Revenue (Q4 2024): $80 million, compared to $87 million in Q4 2023.
• Net Loss (Q4 2024): $5.4 million, compared to net income of $20.1 million in Q4 2023.
• Revenue (Full Year 2024): $299.9 million, up from $256.1 million in 2023.
• Net Income (Full Year 2024): $14.3 million, compared to $127 million in 2023.
• Capital Expenditures (2024): $162.3 million.
• Liquidity (End of 2024): $223.6 million.
• 2025 Adjusted EBITDA Guidance: $90 million to $110 million.
• 2025 RNG Production Guidance: 5.0 million to 5.4 million MMBtus.

• Warning! GuruFocus has detected 8 Warning Signs with OPAL.

Release Date: March 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• OPAL Fuels Inc (NASDAQ:OPAL) reported a strong year in 2024 with adjusted EBITDA of $90 million, aligning with their guidance.
• The company's fuel station service segment saw a significant EBITDA increase of 76% compared to 2023.
• RNG fuel production increased by 41% in 2024, despite being slightly below guidance.
• OPAL Fuels successfully brought online three large landfill RNG projects in 2024, expanding their operational capacity.
• The company has a robust development pipeline, with plans to place 2 million MMBtu in construction in 2025.

Negative Points

• RNG production for 2024 was slightly below guidance due to longer ramp-up timelines at new facilities.
• The company experienced a net loss of $5.4 million in Q4 2024, compared to a net income of $20.1 million in Q4 2023.
• Revenue and adjusted EBITDA in Q4 2024 were lower than the same period in 2023, primarily due to timing and pricing of environmental credit sales.
• The renewable power segment is expected to see a $10 million decline in adjusted EBITDA in 2025 due to regulatory changes in Europe.
• The company's guidance for 2025 assumes a lower RIN price, which could impact adjusted EBITDA by $30 million if prices do not improve.

Q & A Highlights

Q: Can you elaborate on the production guidance for 2025 and the expected contributions from projects in construction? A: Adam Comora, Co-CEO, explained that they expect increasing utilization from facilities as they build in capacity for growing landfill gas volumes. Jonathan Maurer, Co-CEO, added that they anticipate continued growth from same-store sales as landfills produce more gas, with ramp rates varying by project. They are optimistic about the projects reaching full capacity, particularly as gas resources are higher than forecasted.

Q: How is Opal Fuels approaching the competitive landscape and potential growth opportunities amid market changes? A: Jonathan Maurer, Co-CEO, noted that while their primary focus is on executing existing opportunities, they are open to evaluating new market opportunities. They have good access to capital for potential acquisitions and believe they are well-positioned to compete for new biogas rights projects due to their successful track record and vertical integration.

Q: Is there any 45Z number included in your 2025 guidance, and what would it take to receive 45Z credits this year? A: Kazi Hasan, CFO, stated that the low end of their guidance includes a material amount of 45Z credits, with a smaller expected value at the top end. Adam Comora, Co-CEO, added that they are cautiously optimistic about the 45Z process, with a proposed rule seeking final comments by April 10, and they hope for resolution shortly after.

Q: Could you elaborate on the tightness in the dispensing market and its drivers? A: Adam Comora, Co-CEO, explained that the tightness is due to RNG supply growing faster than the dispensing market, influenced by the transition from 12-liter to 15-liter engines and regulatory uncertainties. They expect potential acceleration in 15-liter adoption with product availability and regulatory clarity.

Q: How is Opal Fuels balancing growth and capital preservation, and when might it make sense to focus on free cash flow generation? A: Adam Comora, Co-CEO, emphasized their disciplined capital allocation approach, highlighting their ability to toggle between growth and free cash flow generation. They have built a free cash flow machine with low maintenance CapEx, providing flexibility to create discretionary free cash flow when appropriate.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.