OPAL Fuels (NASDAQ:OPAL) reported a 32% increase in third-quarter adjusted EBITDA as stronger fuel station earnings, clean fuel tax credits and cost savings helped offset lower revenue. The renewable natural gas producer said it expects full-year adjusted EBITDA at the low end of its guidance range, while production is likely to fall modestly below its prior forecast.
Adjusted EBITDA rose to $26.7 million from $20.2 million a year earlier, while revenue declined to $79.5 million from $83.4 million. For the first nine months of 2026, adjusted EBITDA increased 16% to $66.5 million, and revenue fell approximately 5% to $236.3 million.
Co-CEO Adam Comora said the company had incorporated current renewable identification number, or RIN, prices into its outlook. He expects fourth-quarter adjusted EBITDA to be similar to or slightly higher than the third-quarter result, supported by higher production and strong Fuel Station Services margins, although selling, general and administrative expenses could rise.
Production Improvements and New Projects
Renewable natural gas, or RNG, production increased 5% from the prior-year quarter to a reported 1.3 million MMBtu, and rose 7% sequentially. Nine-month production increased 8.5% to 3.8 million MMBtu.
Co-CEO Jon Maurer said improvements to gas collection and plant efficiency took longer than expected to deliver gains, but fourth-quarter production rates were reflecting their benefits. He said work included collection system upgrades, compressor and media bed improvements, and membrane replacements.
Maurer said the company had also added backup equipment and heat tracing to prepare for winter after cold weather and equipment issues affected operations earlier in the year. He cautioned that seasonal declines in landfill gas production and temporary weather-related outages remained possible.
Three projects—Cottonwood, Burlington and CMS—are expected to come online sequentially during 2027, with a combined 2 million MMBtu of annual design capacity. Maurer said the projects were on track with the company’s expectations. The Grady Road and Stones Throw projects are under construction and scheduled to start operating in 2028.
Comora declined to provide a 2027 production target, saying the company would offer more detail as it gained visibility into ramp rates and contributions from the new facilities.
Fuel Station Growth and Capital Allocation
Fuel Station Services adjusted EBITDA rose approximately 18% to $13 million in the third quarter, driven primarily by higher volumes and improved margins, CFO Kazi Hasan said. Total fuel delivered increased 3% to 40 million gasoline gallon equivalents, while RNG volumes dispensed rose 7%.
Hasan said company-owned stations were contributing more higher-margin, contracted volume-based tolling revenue. Under those arrangements, costs such as gas, power and taxes are generally passed through to customers.
Comora said higher diesel prices had drawn fleet decision-makers’ attention to natural gas vehicles, although he maintained that switching can be economical at lower diesel prices as well. Asked about the X15N rollout, he said testing had received a positive response and that existing natural gas users and sectors such as refuse could move more quickly than new entrants.
The company expects Fuel Station Services to receive a greater share of capital allocation. Hasan said that shift would help balance cash generation across upstream and downstream operations, but would not eliminate investment in RNG production facilities.
RIN Prices, Liquidity and Leadership
Comora said D3 RIN prices have traded close to D4 RIN prices following the Environmental Protection Agency’s Set 2 Rule, as the market views D3 supply as potentially exceeding obligations. He said D4 price weakness had also pressured D3 prices, and he expects those trading dynamics to continue for the balance of 2026.
Hasan identified production volumes and RIN prices as the two largest variables that could affect where the company lands within its adjusted EBITDA range. He also noted that the company had adopted government grant accounting principles for the 45Z tax credit, treating it as an offset to cost of sales rather than recording it in the tax line. The change does not affect adjusted EBITDA, he said.
OPAL ended September with approximately $122 million in liquidity, including $86 million in cash and short-term investments, $25.2 million in undrawn preferred stock commitments and approximately $10.8 million in revolver availability.
Maurer plans to retire as co-CEO effective March 31, 2027, and will remain involved as a senior advisor. Comora said the transition was planned and that Maurer would help with the handoff.
About OPAL Fuels (NASDAQ:OPAL)
OPAL Fuels Inc is a renewable energy company that develops and operates infrastructure for producing and using renewable natural gas (RNG). The company captures methane from landfills and other waste sources and processes it into pipeline-quality RNG, helping convert waste emissions into a usable energy resource.
Its activities include the development, construction, ownership and operation of landfill gas and RNG facilities, as well as the generation of renewable electricity. OPAL Fuels also supplies RNG for use as a transportation fuel and provides fueling infrastructure and related services for fleets, including heavy-duty vehicles.
The company serves customers primarily in the United States through a portfolio of waste-to-energy and renewable fuels projects.
