Opal Fuels (OPAL) Q2 2024 earnings summary

Executive summary

• Q2 2024 results were solid, with revenue up 29% year-over-year to $71 million, driven by strong RNG production, robust RIN pricing, and growth in Fuel Station Services, while Renewable Power revenues declined.

• Adjusted EBITDA for Q2 2024 was $18.9 million, up $13.8 million year-over-year and sequentially higher than Q1, reflecting improvements across business segments.

• Net income for Q2 2024 was $1.9 million, compared to $114.1 million in Q2 2023, which included a large one-time gain from project deconsolidation.

• Major projects, including Sapphire and Polk RNG, remain on schedule, with construction started on the Burlington County RNG project.

• As of June 30, 2024, the company owned and operated 24 projects (9 RNG, 15 Renewable Power) and had a robust pipeline in construction and development.

Financial highlights

• Q2 2024 revenue was $71 million, up from $55 million in Q2 2023, mainly due to environmental credit sales and increased RNG production.

• RNG production reached 0.9 million MMBtu, a 50% year-over-year increase; RNG sold as transportation fuel was 18.7 million GGEs, up 70%.

• Fuel Station Services revenue grew to $39.3 million, up 31% year-over-year, with strong RIN/LCFS minting and third-party sales.

• Renewable Power revenue declined to $12.2 million, mainly due to facility conversions and lower electricity pricing.

• Operating income improved to $5.7 million in Q2 2024 from a loss of $7.4 million in Q2 2023.

Outlook and guidance

• 2024 Adjusted EBITDA guidance remains at $90–$100 million.

• RNG production guidance revised to 4.0–4.4 million MMBtu (from 4.4–4.8 million) due to ramp-up timing at new facilities.

• At least 2 million MMBtu of new RNG production capacity is expected to be placed into construction in 2024.

• Fuel Station Services Adjusted EBITDA is expected to grow 75%–90% in 2024 versus 2023.

• 2024 capex maintained at $230 million; management expects available cash, operating cash flows, and credit facilities to be sufficient for at least the next 12 months.