OPAL Fuels NASDAQ: OPAL said it remains on track to meet its full-year 2026 guidance despite lower first-quarter revenue and adjusted EBITDA, as management pointed to improving renewable natural gas production, stronger environmental credit pricing and growing interest from heavy-duty trucking fleets in compressed natural gas and renewable natural gas.
Speaking on the company’s first-quarter earnings call, Co-Chief Executive Officer Adam Comora described the quarter as seasonally soft and marked by a challenging operating environment, but said production trends and credit markets were improving in line with expectations.
“Production is improving in line with our expectations, and we are encouraged by the firming of environmental credit pricing,” Comora said. He added that OPAL is seeing increased business development activity tied to new CNG and RNG fleet deployments in heavy-duty trucking.
First-quarter results decline on lower RIN prices
Chief Financial Officer Kazi Hasan said first-quarter revenue was $73.3 million, down from $85.4 million in the prior-year period. Adjusted EBITDA was $16.7 million, compared with $20.1 million in the first quarter of 2025.
Hasan attributed the $3.4 million adjusted EBITDA decline primarily to lower RIN prices. He said realized D3 prices declined by $0.30 to $2.41 in the first quarter of 2026 versus the year-earlier period, creating an approximately $4 million EBITDA impact.
Operationally, Hasan said the business performed as expected. RNG production totaled 1.2 million MMBtu, up 9% year over year, reflecting improved execution by the operating team.
In the Fuel Station Services segment, first-quarter EBITDA was $9.2 million, compared with $10.9 million in the year-earlier period. Hasan said the decline reflected lower construction revenue, lower RIN prices and the timing of maintenance expenses.
Management said the company’s earnings profile is broadening as it grows OPAL-owned stations. Hasan said associated tolling activity is contracted and volume-based, with relatively lower exposure to RIN pricing, and that variable costs including gas, power and taxes are passed through to customers.
Management sees fleet adoption gaining momentum
Comora said several factors are beginning to break what he called a “logjam” for CNG and RNG fleet deployments, including high and volatile diesel prices, regulatory clarity regarding combustion engines and successful testing of the Cummins X15N natural gas engine.
He said CNG offers fleets a compelling economic proposition with limited operational disruption, while RNG adds sustainability benefits that fleets can use for ESG goals, brand value and competitive positioning.
Comora noted that CNG and RNG currently supply about 1 billion gallons of the 45 billion-gallon diesel market, representing roughly 2% market share. He said the company believes heavy-duty trucking could follow other industrial sectors that have shifted toward natural gas because of cost advantages.
However, Comora cautioned that current business development activity is not expected to materially affect 2026 financial results, because OPAL typically needs about 12 months to build a station after signing a customer, and initial deployments are likely to begin as smaller portions of very large fleets.
In response to an analyst question, Comora said the company expects “some contributions in 2027” from new fleet deployments, but characterized the opportunity as a multiyear, long-term conversion for the sector.
Weather weighed on operations, but production still grew
Co-Chief Executive Officer Jonathan Maurer said OPAL’s upstream facilities performed well despite an “extraordinarily cold winter” in the first quarter, producing more RNG than in the comparable period of 2025.
Maurer said cold weather affected the business in three ways: freezing in landfill gas collection systems, freezing at RNG projects and external issues such as power outages. He said the company responded by adding measures such as heat tracing and insulation to improve resiliency.
Comora added that the severe cold also increased operating expenses, creating “almost a double whammy” in the quarter. While OPAL does not provide quarterly production or earnings guidance, he said the company expects accelerating production growth beginning in the second quarter and continuing through the year.
Project pipeline and capital allocation remain priorities
Maurer said OPAL continues to advance its construction portfolio and expects to bring online more than 2 million MMBtu of annual design capacity over the next year or so. He identified the Cottonwood, Burlington and CMS projects as progressing toward completion, with Cottonwood and Burlington in field construction and CMS remaining on track.
He also said the company has 16 OPAL-owned stations under construction and continues to advance upstream development opportunities. Management expects to announce capital allocation in 2026 for new RNG projects as well as fueling station growth.
Hasan said OPAL completed financing transactions totaling $288 million during the quarter, including a $180 million preferred stock facility and the remaining draw on its term loan facility, with net proceeds of $109 million. The company ended the quarter with approximately $233 million of liquidity, including about $133 million of cash and short-term investments, $60 million of undrawn preferred stock facility commitments and approximately $39 million of revolver availability.
Hasan also said OPAL sold $11.5 million of investment tax credits from Atlantic during the quarter and completed a $100 million multiyear agreement to monetize Section 45Z production tax credits.
Asked about capital returns to shareholders, Comora said OPAL continues to see strong opportunities to reinvest in upstream projects and downstream fuel stations. He said the company would consider other ways to enhance shareholder value, including a potential dividend policy, if those opportunities were no longer available.
RIN pricing and 2026 outlook
Maurer said the RIN market has strengthened since OPAL’s March call, following the Environmental Protection Agency’s final Set Rule with updated 2026 and 2027 renewable volume obligation targets. He said D4, D5 and D6 prices had risen to more than $2, while D3 RIN pricing was above $2.50 per RIN.
Management reiterated OPAL’s full-year 2026 guidance. Comora said year-over-year comparisons should become easier after the first quarter, particularly as the company moves past difficult comparisons for RIN pricing and a higher LCFS credit sale in the first quarter of 2025. He also noted construction revenue and maintenance costs can create lumpiness in the Fuel Station Services segment.
Hasan said OPAL’s financial strategy is to grow operating and free cash flow, broaden its earnings base to reduce commodity exposure and allocate capital to the highest-return opportunities in its pipeline.
About OPAL Fuels NASDAQ: OPAL
OPAL Fuels NASDAQ: OPAL is a publicly traded company headquartered in San Diego, California, specializing in the production, distribution and dispensing of renewable natural gas (RNG) for heavy-duty transportation. The company operates a network of RNG fueling stations across California, offering fleets of trucks, transit buses and logistics providers a low-carbon alternative to conventional diesel without requiring significant changes to existing vehicle technology or fueling infrastructure.
OPAL Fuels sources organic byproducts from dairy farms, landfills and food-processing facilities, converting methane-rich biogas into pipeline-quality RNG through a series of anaerobic digestion and gas-upgrading processes.
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