Clean Energy Fuels Corp. Aktie

Hello, and welcome, everyone, joining today's Clean Energy Fuels First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this call is being recorded. It is now my pleasure to turn the meeting over to Tom Driscoll, Vice President, Strategic Development and Sustainability. Please go ahead.

Thank you, Dana. Earlier this afternoon, Clean Energy released financial results for the first quarter ending March 31, 2026. If you did not receive the release, it is available on the Investor Relations section of the company's website, where the call is also being webcast. There will be a replay available on the website for 30 days. Before we begin, we'd like to remind you that some of the information contained in the news release and on this conference call contains forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict.

Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in the Risk Factors section of Clean Energy's Form 10-Q filed today. These forward-looking statements speak only as of the date of this release.

The company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding circumstances after the date of this release. The company's non-GAAP EPS and adjusted EBITDA will be reviewed on this call and excludes certain expenses that the company's management does not believe are indicative of the company's core business operating results. Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for or superior to GAAP results.

The directly comparable GAAP information, reasons why management uses non-GAAP information, a definition of non-GAAP EPS and adjusted EBITDA and a reconciliation between these non-GAAP and GAAP figures is provided in the company's press release, which has been furnished to the SEC on Form 8-K today. With that, I will turn the call over to our President and Chief Executive Officer, Clay Corbus.

All right. Thank you, Tom. I want to start by saying that I'm honored to be named CEO of Clean Energy. I've been part of this company for 19 years and have been involved in every major strategic chapter of our evolution from our days building out the fueling network to our initial investments in RNG in 2008 to the integrated platform we operate today. I have a huge amount of confidence in our team and the foundation we've built, and I'm very excited about the opportunity ahead of us. Now as CEO, I plan to focus on growth, strengthen execution and operating discipline and fully leverage the assets, infrastructure and people we have in place. We have a strong balance sheet, recurring cash flow and a very capable team. I also see opportunity to be more technology forward using data and software to improve efficiency across operations, corporate functions, RNG and how we identify new customers and serve existing customers. All of this supports the same objective: deliver value for our customers and stakeholders.

At its core, I believe deeply in this business and our products. RNG is domestically produced, lowers fuel costs, reduces greenhouse gas emissions and uses existing infrastructure. Those fundamentals have always mattered, but they are especially relevant today.

Beginning in early March, the conflict with Iran caused a sharp rise in crude oil prices, which quickly flowed through to diesel across the U.S. Diesel prices increased by roughly $1.50 to $2 per gallon or more, a 50% increase almost overnight. Fuel is a meaningful component of cost per mile, and this level of volatility strains fleets, carriers and shippers and ultimately leads to higher costs for consumers. This environment reinforces why Clean Energy exists.

Compared to diesel, natural gas is cheaper, cleaner, domestic and less exposed to geopolitical events abroad. As you've heard many times before, nearly 100% of the fuel delivered through our stations today is renewable natural gas, which captures all the benefits I just mentioned and helps our customers advance their sustainability goals. Now turning to the quarter. We delivered 67 million gallons of RNG. We generated $16.6 million of adjusted EBITDA, and we ended the quarter with $126 million of cash on the balance sheet.

In our downstream business, performance across core markets remained steady. Our transit and refuse sectors continue to be consistent contributors, supported by long-standing customer relationships and the reliability of RNG. We also see underappreciated growth potential in these segments.

Over the past 5 years, battery electric and hydrogen solutions have proven costly and challenging to deploy in many locations. As those realities become clear for transit and refuse fleets, RNG offers a practical, cleaner and lower cost alternative to diesel. And many of these fleets already have firsthand experience with RNG. In trucking, the recent diesel price hikes and volatility have brought total cost of ownership back into focus.

Heavy-duty trucking remains our largest growth opportunity. Class 8 trucks with the Cummins X15N engine allow fleets to capture RNG's economic and environmental benefits without sacrificing range or performance. The technology works, the infrastructure is in place, the fuel is available today, and it is cheap and less volatile. Quite simply, the case for switching from diesel to RNG has never been stronger. At the same time, to be honest, adoption of the X15N has been slower than we originally expected.

Diesel is the incumbent fuel for the vast majority of fleets. In the last 2 years, the sector has faced challenging freight fundamentals, federal and state regulatory uncertainty, particularly in California and frankly, ESG whiplash as companies balance long-term sustainability goals with fluid policies and near-term stakeholder expectations. Even though RNG delivers a lower total cost of ownership, natural gas tractors still carry a higher upfront cost than diesel. In that environment, many fleets have chosen to delay change and stick with the status quo.

Our strategy is to be targeted, focusing on applications and fleets where RNG delivers the clearest economic and low carbon advantages. In our upstream RNG production business, we now have eight projects operating and three under construction. The first quarter reflected continued ramp-up at our South Fork project in Texas and our East Valley project in Ohio. The first quarter also had extreme winter weather, which impacted production, particularly in the Upper Midwest.

We were able to get our projects back on track and anticipate production and financial results to improve as the year progresses. I'd also like to highlight a positive regulatory milestone. In March, CARB approved the pathway for our Del Rio Dairy project in Texas with a carbon intensity of approximately negative 300. We also continue to await an upgraded GREET model from the Department of Energy for determining 45Z credit values, which is expected to be better -- I'm sorry, which is expected to better reflect the negative carbon intensity of dairy RNG.

As we scale the RNG production business, projects have taken longer to develop and ramp up than initially expected and some have faced operational challenges. We responded by taking a more hands-on approach to operations, strengthening internal oversight and replacing vendors where performance fell short. These improvements and transitions take time, but we are making progress.

We remain focused on improving performance at our operating sites and executing projects that are under construction. It remains true that Clean Energy is an advantaged owner of dairy RNG production. Customer demand for low-CI RNG remains strong, particularly in California, where we have the largest RNG station network.

Now before concluding, I do want to take a moment to recognize Andrew Littlefair. Andrew founded this company. He led it for three decades and built Clean Energy into the platform that it is today. I've had the privilege of working alongside Andrew and learning from him. We are fortunate that he remains actively involved by continuing his work on policy matters in Washington and serving on our Board. On behalf of the entire company, I want to thank him for his contributions and continued commitment to Clean Energy. And with that, I'll hand the call to our CFO, Bob Vreeland, to walk through the financials.

Thank you, Clay, and good afternoon to everyone. Overall, our financial performance was in line with our expectations with normal variations within our integrated businesses. For example, while extreme cold weather impacted upstream RNG production, we were able to monetize a larger-than-expected amount of RIN and LCFS credits from our East Valley dairy in Idaho, which was placed into service in March.

Increased RNG volumes delivered by our fuel distribution business drove higher RIN revenues, and we were able to optimize our gas costs in this volatile commodities market. To a lesser degree in the quarter, but still ongoing today, we enjoyed the dynamics of higher retail fuel prices, while our natural gas commodity costs did not increase proportionately at the same level of oil and diesel prices. In fact, despite increases in our natural gas costs and retail prices, we maintained a large discount on our fuel price compared to diesel.

Consequently, one of the effects we see of elevated commodity and retail prices is higher revenue. Coupled with higher fuel volumes, which drive both base fuel sales revenue as well as RIN and LCFS revenues, we reported $117.6 million in revenue for the first quarter of 2026 compared to $103.8 million last year.

RNG volumes delivered in the first quarter of 2026 were strong. In addition to our normal recurring volumes, we saw higher demand from customers outside our network of stations needing RNG for transportation. We've seen this before, and it's nice to have the supply to accommodate those deliveries. We believe we'll come off the first quarter RNG volumes by a few million gallons or so as we look forward, but remain confident in achieving our annual guidance of delivering 250 million gallons or more given the first quarter of RNG for the year. GAAP net loss was $12 million for the first quarter of 2026.

Certainly, there was a return in 2026 to more normal operations versus a year ago in the first quarter where we reported a GAAP net loss of $135 million, which included a couple of large noncash charges totaling $115 million. Adjusted EBITDA of $16.6 million in the first quarter of 2026 compares to $17.1 million of adjusted EBITDA a year ago. In addition to the normal variations I mentioned previously for the first quarter of 2026, we also saw lower, albeit still very adequate base fuel margins, which we anticipated in our outlook for 2026 and as well and also anticipated in our 2026 outlook, we lowered SG&A expenses in the first quarter of 2026.

One reporting comment I'll make is a change in where the noncash Amazon warrant charge is recorded in our financial statements. You'll notice in 2026, a portion of the warrant charge is included as a charge against our O&M service revenue, whereas previously 100% of the charge was in our products revenue. And there's more detail on the Amazon warrant charge. It's just a different place in the income statement that you're seeing this year. There's more disclosed in our 10-Q.

In addition to the $126 million in cash and investments on our balance sheet, there is another $46 million in cash off balance sheet at our dairy RNG joint ventures. And during the first quarter, we contributed $12 million to our Maas Energy Works JV with another $12 million that was contributed in April. Maas Energy Works continues to make good progress toward completing the three dairy projects under construction. And with that, operator, please open the call to questions.

[Operator Instructions] Our first question comes from Eric Stine with Craig-Hallum.

Clay, you touched on it a little bit just for the X15N. I mean I know that now there are two OEMs in the market and prior to Freightliner entry, pricing was an issue. So incremental cost has come down some. And obviously, we've all read the glowing feedback of fleets that have been testing this. But I mean, the market conditions, as you've said, you've got a more difficult environment, but obviously highlights the price benefit. I mean is this something where -- I know you're taking a targeted approach. I mean, do you kind of view this as this is just going to make it all the more likely that it's going to be the large fleets rather than the small kind of one-off adoption stories? Or how do you view that? I mean, is this the kind of thing that if it persists, it could be what actually jump starts this market? Because as you've said, it's -- although Cummins view of it hasn't changed in terms of the overall opportunity, it is well behind schedule?

Yes. Well, Eric, it's what we spend a lot of time thinking about and focused on. I don't think anybody really thinks that diesel is going to stay at these prices forever. But I do think that the -- this run-up in diesel has really heightened the awareness of the volatility. And we were at the ACT conference the last few days, and what a lot of people are talking about is, hey, if you just do a -- just take the last 5 years and do a regression analysis on what the price of diesel has been and then you compare that to the price of natural gas, it is just higher overall.

And when fleets are trying to plan going forward what their fuel costs are going to be and their total cost of ownership, they're factoring that into those decisions. So it certainly helps us because it helps us with the total cost of ownership and the payback period for that incremental cost. I would also say that I don't know that it changes the types of fleets we're looking at, whether they're large fleets or small fleets because even with the large fleets, they're not looking -- to be honest, they're not going to change 2,000 trucks overnight. But I think what we are seeing is that as -- and as we heard from some of the fleets that are transitioning, hey, start out with five trucks, start out with 10 trucks.

Let's sort of dip our toe in the water, get our mechanics used to it, get our drivers used to it, get our routes used to it. And then from there, go ahead and expand it into larger numbers within the fleet. And I think that, that combined with that sort of -- let's dip our toe in first, combined with the price advantages that we're seeing now in the total cost of ownership will result in incremental adoption as we go forward. But it's not -- it's a long sales cycle. It takes a long time to get the trucks ordered. It takes a long time to get them on the road. So it's not something that we -- people can see high diesel prices today and they're going to order a truck tomorrow. It's a longer decision process than that. But certainly, the fundamentals behind it, I think, are reopening a lot of discussions that we're excited to stay part in.

Got it. That's very helpful. And then maybe just my second one for Bob. So you mentioned lower base fuel margins and something that was kind of the expectation. And I just want to clarify, I mean, was that commentary for Q1 or early in the year? Because if I think about -- especially in trucking, when you've got high diesel margins, you can still offer a pretty healthy discount, and it's a pretty good margin environment for you. So just maybe clarify that statement and maybe how you're thinking about that for the remainder of the year?

Yes. Eric, that comment there is kind of looking at the full year. I mean when we gave our guidance, back in February, we talked about some of the dynamics that could impact what our guidance for 2026 and the possibility of lower margins from a variety of reasons within the mix, and it's really kind of throughout the year. But I will say to the point you're making is we have numerous levers. And so while maybe that -- while the margin gets impact from one area, the fact that we're enjoying this kind of the higher prices with our costs remaining pretty stable helps offset some of that. But it's kind of a go-forward look, but certainly in our plan.

We'll now go to Rob Brown with Lake Street Capital Markets.

On kind of the RNG volume you talked about in the quarter from kind of third parties, could you just kind of clarify how that works and maybe sort of visibility on that?

Yes. I think it was a strong growth quarter, particularly when you compare it against last year. But I think we want to be careful on that because part of that growth was that last -- the first quarter of last year, we did see our volumes trend down. If you remember, we have the biogas reform that sort of pushed a lot of our volume into Q4 of 2024. So Q1 of 2025 was lower.

And then, of course, we always have bad weather in the first quarter, but last year, it was really spread throughout the country. And so we had more -- we had fewer -- we had less -- I should say, we had less RNG from our third parties in addition to our own production that was down. So I think we're really -- while this -- we're very pleased with the first quarter, a lot of it really was that we were comparing against a very easy comp in Q1 of 2025.

Okay. And then just to clarify getting the CARB pathway certification Fred, it sounds like that's great. How does that sort of flow through into the ability to get credit?

Well, it basically just -- it almost doubles the value of the LCF or doubles the number of LCF credits we can generate. When we're at 150 versus the 300, you are just able to generate more credits off the same fuel that's coming through.

We'll now go to Matthew Blair with TPH.

Could you talk a little bit more about the -- the comment where you talked about higher demand from customers outside of your network, could you unpack that a little bit? Do you think you are taking share from some of your competitors? Or was it just a situation that these customers were utilizing their existing CNG trucks a little bit more and just need more fuel given rising diesel prices? And could you also talk about what end markets you saw increased demand from?

Yes. So Matthew, that it is -- there's other folks out there with CNG fueling stations. And there are instances where based on supply availability and that sort of thing, where we will flow our RNG into those stations. And it's really kind of supply/demand. And I couldn't necessarily tell you what's going on with their demand, but I just -- but I know that they do need the supply. And so we're able to move the supply. We've done it before. It's not necessarily routine, but that's what that looks like is we have the RNG and then we can flow it to other places. It's kind of the beauty of the distribution model.

Sounds good. And then could you talk about the fuel distribution guide for 2026? It looks like you did not change it, still $67 million to approximately $70 million despite the good result in the first quarter, $19 million. I think you mentioned that you would expect things to roll off a little bit in Q2. I guess just to clarify, are you already seeing softer conditions so far in the second quarter? Or is that just your general expectation?

Well, I won't comment on necessarily what I'm seeing in the second quarter is not really softer or consistent. I think it's more of a comment relative to the volatility and the strength that we saw in the first quarter and that we may not see that level of strength as we go forward.

We had some unique opportunities to sell some RNG to some of our customers that is probably not going to be repeated. So while it was a good result. I think like we said, it was an easy comp against last year. And then I think as you try to do a -- don't just multiply it by four for the full year because there were some unique opportunities in Q1 that we took advantage of.

We'll go next to Betty Zhang with Scotiabank.

I wanted to ask about kind of Amazon and that relationship. So earlier, Amazon announced its logistics services. Do you think there'll be an opportunity to leverage that existing relationship and maybe increase some RNG volumes to them? And then for my follow-up, also related to Amazon, on those warrant charges, -- you mentioned it's now kind of shared between the fuel and services. Is this a change in the contract with Amazon? Or how would you describe that change?

So Betty, I'll take the first comment. We do not comment specifically on Amazon. We want to be very careful that, that is not -- we just can't and don't and won't do that. I think that -- across our customers, though, every single customer, we do look at those that have existing trucks, whether they're 12-liter, 9-liter, wherever they are, we work with all of our customers to try to increase the penetration into their fleet with the X15N.

So like I said, I'm not going to speak specific to Amazon, but it's just good business sense to try to do that, work with customers that you have already and see if you can continue your growth with them. As far as the Amazon warrant charge, I'll let Bob take that one.

Yes. And Betty, I'll just say because I really can't say that much. But it was not an arbitrary change. I mean any kind of change like that is typically going to be kind of contractually the reason is contractually on that front. So we are just basically doing the appropriate accounting based on the contract that we have.

Thank you. At this time, there are no further questions in the queue. I will now turn the meeting back over to Clay Corbus.

All right, Dana, thanks very much, and thank you, everybody else for joining us. We look forward to speaking with you next quarter. Thank you.

This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Hello and welcome everyone joining today's Clean Energy Fuels Fourth Quarter 2025 Earnings Conference Call.

[Operator Instructions]

Please note this call is being recorded. It is now my pleasure to turn the meeting over to Chief Financial Officer, Robert Vreeland. Please go ahead.

Thank you, operator. Earlier this afternoon, Clean Energy released financial results for the fourth quarter and year ending December 31, 2025. If you did not receive the release, it is available on the Investor Relations section of the company's website, where the call is also being webcast.

There will be a replay available on the website for 30 days. Before we begin, we'd like to remind you that some of the information contained in the news release and on this conference call contains forward-looking statements that involves risks, uncertainties and assumptions that are difficult to predict.

Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in the Risk Factors section of Clean Energy's Form 10-K being filed today.

These forward-looking statements speak only as of the date of this release. The company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this release.

The company's non-GAAP EPS and adjusted EBITDA will be reviewed on this call and exclude certain expenses that the company's management does not believe are indicative of the company's core business operating results. Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for or superior to GAAP results. The directly comparable GAAP information, reasons why management uses non-GAAP information, a definition of non-GAAP EPS and adjusted EBITDA and a reconciliation between these non-GAAP and GAAP figures is provided in the company's press release, which has been furnished to the SEC on Form 8-K today.

With that, I will turn the call over to our President and Chief Executive Officer, Andrew Littlefair.

Thank you, Bob. I'm pleased to report that we closed the fourth quarter and the year with strong results. Q4 marked another period of solid execution across our business with continued strength in our fueling operations and exciting progress in our upstream RNG production platform.

For the full year 2025, our performance exceeded the high end of our guidance range, reflecting the resilience of our business model and the value of our diversified customer base. During the fourth quarter, we also took an important balance sheet action by repaying $65 million of debt.

This reduction in leverage lowers our future interest expense while maintaining ample cash to fund our growth initiatives. Speaking of growth initiatives, our upstream RNG business achieved 2 very significant milestones in the last few months.

As many of you know, our South Fork Dairy project in Texas has been a long journey for our team and for our dairy partner, Frank Brand. As you may recall, 3 years ago, the facility suffered a fire that set back the farmer's operation and our project schedule.

But the resilience of our team and the commitment from the dairy kept this project moving forward. In the fourth quarter, we completed construction and brought South Fork online. When it entered service, it became the largest operating RNG project in our portfolio and one of the largest RNG dairy digesters in the country.

And I'm pleased to report that even since the project's completion, Frank has added to its head count, and we are considering expanding our production facilities. Another reason this is such a great milestone is that this is a 100% Clean Energy constructed project, and we control all RNG operations.

So the financial results are fully consolidated in our financial statements and not part of our JVs. We were able to leverage our many years of experience in engineering and construction and oversee a project that was completed on time and on budget.

So hats off to our talented Clean Energy team. But South Fork isn't our only major recent accomplishment. I'm so excited to announce we have begun injecting gas at our East Valley Dairy project in Idaho, the largest RNG project in our portfolio.

This project is part of our JV with BP and processes manure from over 37,000 milking cows. Final project completion is on track for this spring. In the span of just 3 months, we brought online 2 of the largest dairy RNG projects in the country.

And these additions bring our total number of operating projects to 8 with an additional 3 projects in construction through our partnership with Maas Energy Works. I will remind you that all of this low carbon fuel from these projects will find its way into Clean Energy's fueling infrastructure. Our work is far from done. It takes time for new sites to ramp up and optimize production as is typical in the industry.

But this is a major milestone for Clean Energy as we continue to execute against our dairy RNG production plan. We now have scale and clear line of sight to growing volumes in 2026 and beyond. It's never a dull moment in the RNG policy world, but 2026 has begun with encouraging signals across the major regulatory programs that affect our business.

RNG is a domestically produced waste-based biofuel with compelling environmental and economic benefits for our feedstock partners, whether at landfills, dairy farms or other sources, many of which are located in rural communities.

And for commercial vehicle fleets, RNG provides a practical, low-cost, low emissions alternative to diesel that is commercially available today. RNG offers this win-win solution while utilizing the existing network of natural gas pipeline infrastructure here in the U.S. This positive economic and environmental impact that RNG has on such diverse geographic and industry markets makes it easier to advocate for policies recognize the full value of RNG and support sustainable industry growth.

And we feel good about the current policy backdrop. A few weeks ago, the California Air Resources Board released Q3 2025 LCFS data, which showed the first net deficit since 2021, driven by CARB's program changes to accelerate emission reductions.

This is a constructive development for LCFS fundamentals going forward. Regarding D3 RINs, we expect EPA to continue acknowledging the strong growth trajectory of RNG production and its critical role in meeting federal renewable fuel targets.

The 45Z clean fuel production credit rulemaking is progressing. And like the rest of the industry, we are awaiting the updated 45Z-GREET model. We remain optimistic that Treasury and the Department of Energy will recognize the avoided methane emissions and deeply negative life cycle emissions of dairy RNG as directed by Congress and reinforced throughout recent rule-making documents. And my last comment regarding policy issues is regarding the announcement of EPA a few weeks ago that the administration is receiving the endangerment finding under the Clean Air Act.

We believe this is good because this action removes any lingering potential that there is or will be a mandate for fleets to buy one and only one technology. We hear repeatedly from operators that they continue to have a desire for a cleaner alternative than diesel for their fleets and RNG provides that affordably and conveniently today.

Collectively, these dynamics support the economic value of RNG and reinforce the importance of our integrated RNG strategy. Turning to our downstream operations, our fuel distribution business delivered another solid quarter. Volumes across our transit, refuse and trucking customers grew, reflecting long-standing relationships and the essential nature of the services they provide.

The strength and success of RNG as the premier clean transportation fuel was demonstrated by agreements that we've signed over the last several months with the likes of waste giant, WM, which extended our partnership to provide services for 85 of their stations to keep their fleet of 8,000 refuse trucks fueled with RNG.

And the cities of Scottsdale, Phoenix, Washington, D.C., Nashville, Arlington, Virginia and even Fort Smith, Arkansas awarded Clean Energy the opportunity to flip their CNG to RNG, build stations, maintain stations or provide their airport shuttle operations with RNG.

Heavy-duty truck adoption of the Cummins X15N engine was a little slower in 2025 than we anticipated, but the fundamentals are improving. Challenging freight market dynamics forced many fleets to delay not only alternative fuel decisions, but overall truck purchases of any type.

Some of those headwinds have begun to ease. And in its full year on the road, the X15N demonstrated excellent performance with similar power, torque and drivability to diesel for those first customers to test the drive demo truck and purchased the beginnings of a fleet of trucks equipped with the new engine.

As we talk to fleets, the message continues to resonate. RNG is the best available solution today for fleets looking to lower emissions while using a reliable fuel while reducing operating costs and achieving a lower total cost of ownership than diesel.

The engine technology works. The infrastructure is built and the fuel is widely available at a lower cost than diesel. We are currently working with a number of third-party carrier customers, which are actively using their RNG-operated X15N trucks as a sales tool to attract those hundreds of shipper clients that are looking to address their Scope 3 emissions goals.

We see good momentum for heavy-duty adoption and believe that will continue throughout 2026. Before turning the call over to Bob, I want to provide a few high-level comments on our 2026 outlook. We expect continued growth in RNG volumes, both the third-party supplied RNG we deliver through our stations and the RNG we produce at our dairy RNG facilities.

Our overall results are expected to improve over 2025 with a range of adjusted EBITDA of $70 million to $75 million. Bob will share more of the details, but our plan reflects moderate growth -- volume growth in line with gradual adoption of trucks utilizing the X15N, some extensions of multiyear major customer fueling contracts, a constructive view of environmental credit prices, significant progress in financial improvements at our dairy RNG production facilities and a concerted effort at driving down operating costs.

We are pursuing growth across our fully integrated RNG model while evaluating opportunities to optimize costs and streamline our operations. We are scaling our own production of negative emissions dairy RNG while supporting customer adoption of low emissions, low-cost RNG fuel across the U.S. and Canada. Clean Energy is well positioned for 2026 and beyond. And with that, I'll hand the call over to Bob.

Thank you, Andrew, and good afternoon, everyone. We finished 2025 mostly in line with our expectations. Our GAAP loss for the year of $222 million was slightly higher than expected, principally from noncash interest charges in the fourth quarter associated with our paydown of debt and the expiration of our delayed draw loan.

Adjusted EBITDA for 2025 was $67.6 million, which exceeded the top end of our guidance of $65 million. And again, as I've mentioned on our previous calls this year, please remember that the alternative fuel tax credit expired at the end of 2024, so the results of 2025 do not include any meaningful alternative fuel tax credit revenue or income.

In 2024, for example, our adjusted EBITDA of $76.6 million included $24 million in alternative fuel tax credit income. So on an apples-to-apples basis, a nice increase in 2025 for adjusted EBITDA. For the fourth quarter, the alternative fuel tax credit amount in 2024 was $6 million to consider when comparing results to '25.

RNG delivered in 2025 was 237.4 million gallons, about 97% of our target. The slight shortfall really goes back to the first quarter where extreme weather hampered RNG supply. We were able to make up a lot, but not all of the Q1 shortfall during the rest of 2025.

In the fourth quarter of 2025, we delivered 64.1 million gallons of RNG, which was approximately 5% increase over the third quarter of 2025 and approximately 3% higher than a year ago in the fourth quarter.

Also in the fourth quarter, we saw improved financial performance by our RNG upstream business, and we expect that trend to continue going into 2026. The results of our fuel distribution business, particularly at the gross margin level, were on par with what we've seen during the first 3 quarters, with the exception being our SG&A expenses in the fourth quarter were approximately $4 million above our normal run rate due to one-off personnel and station exit costs.

For 2026, our SG&A expenses will trend significantly lower. We ended 2025 with $156.1 million in cash and investments after having paid down $65 million in debt in the fourth quarter.

At present, we do not have plans for additional pay downs of our debt in 2026. Now looking further at 2026, we're expecting to deliver 250 million gallons of RNG with total fuel volumes of around 324 million gallons.

Our RNG upstream business is expected to produce 7 million to 9 million gallons from 8 operating dairies. Revenues for 2026 are expected to range from $420 million to $440 million with a GAAP net loss of $71 million to $66 million and adjusted EBITDA of $70 million to $75 million.

We have a further breakdown of our guidance for GAAP and non-GAAP in our press release between our fuel distribution and RNG upstream businesses. For 2026, we expect to see significant improvements in our RNG upstream business, which is expected to have lower GAAP losses and positive adjusted EBITDA for 2026.

Our fuel distribution business will see significant improvement in its GAAP net loss with adjusted EBITDA coming off from a robust '25 performance due to anticipated lower, but still very adequate fuel margins, adjusting for normal pricing and market conditions, including impacts of some significant contract renewals and the amount of environmental credit value retained by us.

We are maintaining a cautious view on the spread of natural gas to oil for 2026, but certainly short of a negative view. Having said that, we are constructive on RIN and LCFS credit prices for 2026 with an expectation that the RIN and California LCFS credit prices will continue at prices like we've seen to begin 2026. We also include 45Z credit values in our results for 2026 pertaining to the RNG production volumes in our JVs as well as the South Fork Dairy, which we fully consolidate.

As I mentioned, we're expecting our SG&A expenses to come down by about 10% or over $10 million in 2026. That may be a run rate of about $25 million a quarter, and that includes the stock comp in there.

Our capital expenditures should remain steady at approximately $25 million for our fuel distribution business, which includes maintenance CapEx as well as additional station build-outs. Keeping in mind here that in 2023 and 2024, combined, we spent $153 million in CapEx for our fuel distribution business, primarily for the build-out of our 19 Amazon purpose-built stations.

So we've now come down to a more normalized rate of $25 million, which was similar to 2025. Investments into our RNG upstream business for 2026 are expected to be around $40 million, solely related to our continued construction and eventual completion of our 3 Maas Energy Works dairy projects.

We are using cash that we have on our balance sheet and cash generated from operations to fund the fuel distribution CapEx and our RNG upstream investments for 2026. We do not have any borrowings contemplated for 2026. We are expecting to generate around $50 million in operating cash flow in 2026.

For comparison purposes, recall that in 2025, we paid interest of $15 million, which benefited our operating cash flows in 2025. In 2026, we do not intend to pick any interest, although our interest payments will be reduced by approximately $6 million for the year since we paid down $65 million of debt in December. And with that, operator, we can open the call to questions.

[Operator Instructions]

And we'll take our first question from Rob Brown with Lake Street Capital Markets.

Good to see the upstream business starting to get to EBITDA positive. That's great news. Just a sense of the ramp trajectory of the 8 facilities you have kind of now open and operating and generating fuel. I think you gave some metrics on the gallon volume, but how do you sort of see the ramp trajectory to full capacity there kind of playing out?

Well, there will be a bit of a ramp. It's not a dramatic ramp, but certainly, the -- I'll say mostly the second half of the year is a little better. So you have maybe you're not right out of the gate in Q1, but certainly much better than what it's been in Q1, and then it kind of ramps up each quarter. I mean, look, we -- it's a significant improvement. So the ramp, we've got a range of $3 million to $5 million of adjusted EBITDA. So you're going to ramp that kind of over 4 quarters.

Great. Great. And then maybe to the 15-liter engine and sort of the truck market. I know it's a tough year. You said some signs of maybe stability there. How do you -- what are you hearing from customers in terms of the interest in buying trucks and sort of interest in the 15-liter over the next, I guess, this year?

I think, Rob, you're seeing the -- some of the macro issues that have plagued the trucking industry or some of those are clearing up. So I think that is a more healthy backdrop. We're engaged with a lot of the largest fleets. I've said this before, we continue to be. I guess I'm -- one of my takeaways is that I'm encouraged that customers, even with all the rolling back of various mandates and different policies, we're still seeing a great deal of interest in fleets wanting to be clean, environmental, have lower carbon sustainable trucks.

We're seeing and hearing from their customers, right, the shippers that that's still of interest. So we're really working hard to come up with a total cost of ownership, which we're fortunate that we can do in our business because we can price very aggressively to give them a good economic return on that natural gas investment and then they have dramatic savings going forward.

So I'm kind of -- I'm sort of optimistic. We're -- we have demo trucks, not just Clean Energy, others in the business, the industry have really stepped forward. We have literally the largest fleets in America are either demoing trucks or we're beginning to see some orders, still small, but very instructive orders coming.

And so the final thing, Rob, is, gosh, the engine seems to be working really well. And as I mentioned in my remarks, the torque and horsepower, drivability and even the mileage has really improved from what we've seen before in the 12-liter. So we have to work it hard. And there's a lot of sort of policy turmoil out there that people are beginning to understand, but I feel better in '26 than I did in '25.

We'll go next to Derrick Whitfield with Texas Capital.

Let me -- I mean, clearly, first, thank you guys for offering both upstream and downstream guidance for your business.

Maybe just on the upstream side. I know you touched on your prepared remarks about 45Z. Could you just advise how you're accounting for it in your guidance, both on volumes and average CI?

Yes. Well, we are accounting for it, we're accruing for it as we produce volume. We anticipate that where that would get recorded will be a reduction in cost of sales. And we -- in our plan, we are, I'll say, more optimistic than what's currently kind of in the legislation to -- for us to reflect CIs with dairy manure. And I don't want to get into the specifics of exactly what scores because that varies at every dairy and frankly, the legislation is still kind of forthcoming on that.

But I will say that we're generally a bit more optimistic than what's currently in legislation. And we'll record that as we go along in the year according to what's out there in legislation, but we anticipate that it will improve, when the final rules come out.

And maybe just to put a button on that, if legislation were in the negative 50 territory, that's kind of where you guys would be today, even though you believe that negative 200 might be the ultimate reading on average. Am I seeing that correctly?

Well, I don't know that we told you that it would be minus 200, but we agree with you that we think that when this finally shakes out and when a 45Z -- when a GREET model finally gets adopted and when we look at the legislation and from the engagement that we've had, we think that it should improve from that minus 50.

Yes.

Agree. Just want to make sure I was thinking about that. Fantastic. And then maybe just leaning further on the upstream side. While I realize LCFS credits aren't back to the levels where most of these projects were underwritten, we are seeing progress, as you guys highlighted, both in LCFS and also potential through 45Z to further enhance economics.

Outside of what you're doing with Maas at present, are the prices in 45Z getting back to a level where it might make sense to revisit some of the growth opportunities in your backlog?

Not yet, Derrick. Like you mentioned, we are optimistic and sort of constructive on where we see and our partners as well where we see the LCFS trending over time. And just to kind of remind the audience, I mean, we underwrote some of these projects when it was 150 or 180 million.

So we have some room to grow there. And I don't think you'll see us underwriting any projects right now. I mean we're very focused on bringing these on, having them contributed.

So we're pleased with that. We got to watch out some of the markets break here before we invest more. We've got 3 more projects we're very excited about.

We'll end the year with 10 kind of breaking over early '27 for our 11 projects. And we feel pretty good about there. Now we have dry powder in case we see one that we have to have. But I think right now, consider that we're going to take a breather and make sure that what we have under construction and that we increase the operation of the ones that we have.

And we'll go next to Matthew Blair with TPH.

And congrats on beating the top end of your 2025 guidance range. For 2026, in fuel distribution, you mentioned the impacts of some significant contract renewals. I think you also mentioned that it sounds like you're retaining fewer of the credits in these renewals.

Could you talk about the drivers here? Is this just a function of more competition in the market? Or what's really causing this?

Well, it's twofold. I mean, absolutely, there's competition in the RNG world. And we're -- that is what it is. We're in a good place for that, but you can't deny that there's a lot of folks wanting to put RNG places, and we have a lot of those places to put RNG, but so we got to maintain our market share in that sense, but it comes at a price.

And then on the -- well, and then on the contract renewal, that's something that's a reality, but it's a very positive aspect of -- I mean, it's what's the beauty of our model is the recurring revenue model.

So -- and we have a lot of renewals. But we've had some major ones come up where we're reflecting -- where we're at with current market conditions, prices, other competitors as well as what we've spent on CapEx in prior years versus where we're headed going forward. So that will reflect. But as I said, this is very -- it's very positive because we're talking about renewals in my view.

And the resulting margins, if you will, are still very adequate for us. I mean they're very good. I mean we're coming off a robust '25, I will say. And you, I think, commented about that. So we're not necessarily repeating that, but we're accommodating these renewals, and that's part of it.

Sounds good. And then you touched on the weather issues from a year ago, Q1 '25. Are there any weather challenges so far this quarter that we should be thinking about?

A little bit. Not to the extent that we saw last year. I mean, we had some -- but there's been some freezes, but I think that we're going to go mostly normal course on that. So I don't -- I'm not anticipating coming out with -- I mean, some of our facilities saw minus 40 degrees.

So you have some operating challenges during that, but nothing like last year. So we kind of dodged that in terms of just kind of a perfect storm of production that came offline from our third parties.

We didn't see that this year. So that's good. But it is anticipated somewhat in our plan anyway. I mean, right, because it's like, okay, it is going to get...

Whatever happens, we're going to get darn cold and maybe colder than we even think.

And we'll take our next question from Betty Zhang with Scotiabank.

Could you give us an update on your JVs with BP and TotalEnergies? Is there appetite for growth from your partners? And if I heard correctly, it seems your upstream investments this year are solely related to the Maas Energy Works projects. So just wondering how those JVs are looking?

That's right. The CapEx on the RNG is for those Maas is the completion of the 2 -- the 3. And we've got that money, as you know, and that will get spent throughout the remainder of this year.

And those projects, 2 of them will be finished one in the spring, one a little later than that and then the third project in the beginning of '27. That's all we've got anticipated with our partners right now, Betty.

Our partners, BP has got a lot of landfill gas they bring on with their other investments. I think all of us are very interested in bringing these at least the East Valley, which is really a significant investment, a very large dairy on and have it operate correctly.

So we've got our hands full, and I think all of us feel good about where we are. We're always looking at opportunities, as I said on the last -- for the last question. But right now, we don't have any hard plans or any other investments that we're ready to pull the trigger on. And that would be the case with all of our partners.

Great. Makes sense. And then for my follow-up, would you be able to give us some color on 2026 RNG volumes as well as your own upstream production volumes?

Yes. Our RNG volumes are anticipated to be 250 million gallons and the RNG production volumes from our RNG upstream JVs and South Fork is 7 million to 9 million gallons. And I'll add a little side note on that right for everyone's information. So that's 7 million to 9 million gallons that will be produced at those dairies.

All of that gas comes to us. So that does actually also flow through our fuel distribution business. The economics on that can change. What's in everything except South Fork is kind of a 50-50 type share in the economics. So when you're looking at that at the production volume, we get about 50% of the economics on 7 of those and then the South Fork is fully consolidated, so we get all the economics there.

And we'll go next to Craig Shere with Tuohy Brothers.

So I understand you're more optimistic heading into '26 on the new advanced CNG truck sales flow. But given the narrowing spreads between diesel and CNG, is it reasonable to think that the payback period for the fuel savings for the fleet customer is kind of getting a little elongated here. I mean I understand that they're trying to cut costs or the additional upfront cost of the CNG trucks over time. But are we at risk of an elongated payback period and that creating a headwind to this growth outlook?

Well, right now, Craig, and I appreciate your question. I mean, of course, if the spreads narrowed significantly, you would see that payback period getting elongated. We don't see that yet. As Bob mentioned in his remarks, we're -- I don't want to say we're optimistic about that spread widening, but we are kind of constructive that we believe we may not quite see the spreads we saw in 2025.

But we'll have good -- like as I look today, you've got pretty good spread, right, on natural gas versus oil price. Obviously, there's geopolitics at work here. But I don't know that that's an issue, Craig, that's really come up that where we're seeing alarm. We can discount our fuel significantly and allow for about a 2-year payback.

We have to always work with our channel partners and with Cummins and with the dealers and with the OEMs to make sure that we're putting the best price of that package forward, and there's probably always work to be done on that.

And the more of those we sell, the better that will get, and we're working on that hard with all of those people. But I feel like not much has changed on that front right now. We've seen a little bit of tightening of the spread in the Central, South Eastern United States.

But in the last -- since January 1, that's come back up out a little bit, widened a little bit. So we're okay right now, Craig. But it's something that, obviously, we keep our eye on constantly.

Great. And correct me if I'm wrong, is the fourth quarter of '25 an all-time record RNG volume through the downstream? And how do you anticipate -- I understand what your upstream is doing, but how do you anticipate opportunities to source third-party RNG to continue to grow that over the next 2, 3 years?

Go ahead Rob, [indiscernible] we have a record...

Yes. Thank you for that. We would mark it down as a record quarter. It's probably gold metal worthy. So -- and I got so enamored with that thought that I didn't hear the rest of your question, frankly.

You know what, I'll try, Craig, on the last part of your question. Everybody wants into the transportation sector. And there's a lot of RNG available. And we have very good relations with all of those in the industry. We source from 90 suppliers today. There's plenty of RNG. I mean what all of us need in the business is for more transportation volume.

And of course, we're sort of on the tip of the spear there, working hard every day to create it. So there's a lot of RNG available. All of us use a little bit more adoption and more volume in transportation because frankly, the alternative markets are tough right now.

And so everybody wants in transportation, and we happen to be in a very enviable place there because we have all those [indiscernible] and clips. But there's no shortage of RNG at present. And frankly, not for the next couple, 3 years, I would imagine. I hope there will be soon.

And we'll go next to Eric Stine with Craig-Hallum.

Just sneaking a few in here at the end. Hopefully, no repeat can jump in between calls. But following up on that last question, I know some time ago, you had set the goal that you would -- that it would be all RNG through your Clean Energy on stations.

And I know that 100% of the volume in California is RNG, but just curious where we stand towards that goal. I know you talked about that in 2026, you expect about 250 million gallons of RNG or maybe...

Eric we're at -- I think through our infrastructure, we're at 93%.

So I mean, to get to 100%, as you said, you have really no limitations in sort of third party supply..

Wait a minute. I'm being corrected -- I'm being corrected, it's 89. And some of that is because we've seen some conventional gas, fossil natural gas go up. So we sort of work against ourselves once in a while on that.

But I mean, obviously, we've done a good job moving -- almost all of the fuel is now dairy in California. So you remember a few years ago, we talked about someday we'd like to see that go from 10% to 30%.

Well, it's way -- it's almost at 100%, I think maybe in '26, it will be. So we're doing well on that goal. And it will continue to be high like this, I would think, from here on in.

Got it. And then, I mean, in terms of stations where you do O&M, I mean, there are cases where you're involved in the supply of the RNG as well. Is that correct?

And of course, that's -- Eric, that's something that we -- again, we see that as a little bit of an advantage, right? We have these long-term relationships where we have maybe built that station. There could be a time in the past where a transit property got their natural gas from the local utility.

And because we know them and because we're experts in RNG, we've been able -- that's kind of what I was talking about in my remarks that you may have missed, where we flipped, right? We flipped transit properties from maybe them buying CNG from a utility to where now we're supplying the RNG.

So we have a big list right now of candidates in '26, where we hope to work that relationship and move them from a competitor supplier from CNG from utility and move them over to RNG.

So we have a work for us. We have a team of people, but that's what they do. And so we hope to add that some of what we have in our plan and wish us well on that.

Yes. And so it sounds like, I mean, that would probably be the bigger objective than getting through your stations sort of 89%, getting that up to 95%, 100% -- is that fair?

Yes, that will help, right? If we land the 4 million gallons, 5 million gallons and adder where we were doing the maintenance, but we weren't doing the gas and we can flip that to RNG that we're supplying, yes, that's one of the ways that number comes up.

Last one for me. I know you talked a little bit about the 45Z and obviously waiting on the guidance to be dialed in some, but just curious what the conversations you're having in terms of, at some point, monetizing those credits with a third party?

Yes. I mean our expectation is to get into a routine monetization. We've already been in the market with the ITC and monetizing that. And so our team is well connected with third parties there as well, but that is the plan. I mean, we also work with our partners on all that. So we're in a good spot there, we feel, and there's definitely an appetite out there for the 45Z credits.

At this time, there are no further questions in queue. I will now turn the meeting back to Andrew Littlefair.

Good. Thank you, operator, and thank you, everyone, for joining us, and we look forward to speaking with you next time on our first quarter results. Have a good day.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Good day, everyone, and welcome to today's Clean Energy Fuels Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this call is being recorded. [Operator Instructions] It is now my pleasure to turn the conference over to Robert Vreeland, Chief Financial Officer. Please go ahead.

Thank you, operator. Earlier this afternoon, Clean Energy released financial results for the third quarter ending September 30, 2025. If you did not receive the release, it is available on the Investor Relations section of the company's website, where the call is also being webcast. There will be a replay available on the website for 30 days.

Before we begin, we'd like to remind you that some of the information contained in the news release and on this conference call contains forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those contained in such statements.

Several factors that could cause or contribute to such differences are described in detail in the Risk Factors section of Clean Energy's Form 10-Q filed today. These forward-looking statements speak only as of the date of this release. The company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this release.

The company's non-GAAP EPS and adjusted EBITDA will be reviewed on this call and exclude certain expenses that the company's management does not believe are indicative of the company's core business operating results. Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for or superior to GAAP results.

The directly comparable GAAP information, reasons why management uses non-GAAP information, a definition of non-GAAP EPS and adjusted EBITDA and a reconciliation between these non-GAAP and GAAP figures is provided in the company's press release, which has been furnished to the SEC on Form 8-K today.

With that, I will turn the call over to our President and Chief Executive Officer, Andrew Littlefair.

Thank you, Bob. I'm pleased to report that our business delivered another strong quarter. For the third quarter, we posted $106 million in revenue, sold 61 million gallons of renewable natural gas and generated $17 million of adjusted EBITDA. We ended the quarter meeting our expectations in line with the raised guidance for 2025 that we announced in August with $232 million in cash and short-term investments and maintaining a strong balance sheet with ample financial flexibility and capacity to fund growth.

Today, I will provide updates on our downstream fueling business, RNG's opportunity in the heavy-duty truck sector and progress in our upstream RNG production business. I'll let Bob provide more detail on our financials and our reaffirmed full year outlook. Our downstream fueling business continues to perform well. Transit and refuse remain steady contributors, reflecting long-standing customer relationships and our ability to deliver clean, affordable fuel day in and day out.

For over two decades, natural gas trucks and buses have delivered cleaner air and lower emissions to these fleets in the cities they serve. On the refuse side, we currently have 140 different companies ranging from national leaders like WM and Republic Services, many regional companies around the country, 309 fueling sites, and we fuel the buses of transit agencies from New York City to L.A. and many in between.

We are well-positioned to support additional fleets in their adoption of ultra-clean RNG. Clean Energy also continues to support transit agencies that are following California State incentives to explore hydrogen alongside RNG. In late September, we announced we were awarded the contract to design, build and maintain a second hydrogen fueling station for Foothill Transit. This extends our 20-plus year partnership with the agency and complements the RNG fuel fleet Foothill already operates.

The new site will support an initial 19 hydrogen fuel cell buses. We also won awards to build hydrogen stations for the cities of Riverside and Ventura transit agencies. The largest opportunity for our downstream fueling business continues to be heavy-duty trucking. Approximately 250,000 new Class 8 heavy-duty trucks are sold each year in the U.S. and Canada. The heavy-duty sector is tasked with providing critical goods movement services across our economy.

Meanwhile, the sector has been facing challenging freight rates, uncertain policy regulations and continued demand from shippers to lower emissions in this hard to decarbonize segment of the value chain. As you know, overall sales of heavy-duty trucks has been significantly lower over the last year or two compared to most years. Battery electric and hydrogen face significant challenges for heavy-duty trucking.

RNG, on the other hand, is low NOx and has low to negative greenhouse gas emissions. It does this at a lower cost of ownership than even diesel. The engine technology, infrastructure and reliable supply of clean fuel are here today. And at Clean Energy, we are pursuing this opportunity on multiple fronts. In September, Pioneer Clean Fleet Solutions launched as the first leasing company focused on low-carbon heavy-duty vehicles with next-generation CNG trucks as the focus.

Clean Energy, alongside Cummins and Hexagon Agility partnered with Pioneer to support another pathway that lowers barriers for fleets to adopt RNG-powered equipment. Just last week, we expanded our Class A demo truck program with a 2026 Freightliner Cascadia Gen 5 day cab equipped with the Cummins X15N. Our truck was unveiled at the American Trucking Association's Conference to high praise from the Senior Editor of Transport Topics, a leading trucking publication who did a test drive.

Demo truck will rotate among carriers so they can experience the X15N's performance across real routes in our fueling network. This builds on the success of our first Peterbilt X15N demo launch last year, and that continues to be in rotation around the country. Since Freightliner has the largest overall market share in the heavy-duty space, the demand to get in the queue for this new demo truck has been very high. Turning to our upstream RNG production business.

While RIN pricing has stabilized, LCFS credit prices continue to face some headwinds impacting segment profitability. We expect CARB's program changes, which are already in effect to tighten the market -- to tighten the market and support gradual price improvement in 2026 and beyond. The 45Z Clean Fuel Production Credit is an important value driver for dairy RNG that recognizes the fuels negative emissions benefit.

We continue to await Treasury's finalization of the 45Z rules and credit values, which we expect in the next few months. We plan to begin to monetize our 2025 45Z credits once those rules are finalized. Meanwhile, we are controlling what we can control, project execution and production improvement. I'm pleased to report that our two largest dairy projects, one in Texas and one in Idaho have recently begun initial operations. We will be announcing more specifics soon about these exciting developments.

This brings our total projects in operation to 8. We continue to be focused on optimizing production across our portfolio to increase our own supply of negative carbon RNG for our network. 100% of the fuel that we sell in California's RNG and the average carbon intensity score of that fuel is a minus 194. So that's impressive. In addition, we broke ground on three new dairy RNG projects under our development agreement with Maas Energy Works.

These projects span 6 dairies across South Dakota, Georgia, Florida and New Mexico and are expected to produce 3 million gallons of RNG annually once fully operational. In summary, our business fundamentals remain solid. The downstream fueling business is steady and well-positioned for growth.

And on the upstream side, we're executing and scaling. Clean Energy is uniquely positioned with the largest RNG fueling network, a substantial supply of RNG from our own operations and from third parties and a team that knows how to deliver for our customers. We believe our formula of practical decarbonization at a lower cost per mile than diesel will continue to resonate with fleets and shippers that need solutions they can deploy today.

And with that, I'll hand the call back to Bob.

Thank you, Andrew, and good afternoon to everyone. The third quarter of 2025 was another good quarter on $106.1 million in revenue versus $104.9 million a year ago. Last year's revenue included $6.4 million in alternative fuel tax credit revenues and the alternative fuel tax credit is not in place for 2025 as it was not extended past 2024.

But putting the alternative fuel tax credit aside, the increase in revenues over last year's third quarter was 8%, primarily driven by increases in fuel sales, along with a rise in station construction sales. On a GAAP basis, our net loss for the third quarter of 2025 was $23.8 million versus $18.2 million in 2024 with the 2024 net loss benefiting from the $6.4 million in alternative fuel tax credits not applicable to '25.

And as well, our 2025 GAAP net loss included $3 million in net incremental costs for a couple of onetime items, one of those being $5 million in incremental accelerated depreciation expense that was tied to our pilot stations, bringing that total depreciation charge in line with our initial estimates. And the second onetime item was a $2 million nonoperating gain from the liquidation of a noncore investment. These two items did not impact adjusted EBITDA.

Speaking of which, our adjusted EBITDA for the third quarter of 2025 was $17.3 million and reflects similar and steady trends from our recent second quarter of 2025 with good fuel and service margins plus an improvement in our upstream dairy negative adjusted EBITDA. Last year, adjusted EBITDA of $21.3 million, of course, includes the $6.4 million of alternative fuel tax credits.

When excluding the alternative fuel tax credits from '24, the improvements in 2025 over '24 continue to come from greater fuel volumes, including both conventional natural gas and RNG, particularly a higher concentration of low CI dairy RNG, along with lower operating expenses from a year ago third quarter. These improvements helped to offset the effects of lower RIN pricing from a year ago, where you can see the RIN revenue was down $2.8 million versus last year.

We generated cash flow from operations again in the third quarter, and our cash and investment balance of $232 million that Andrew mentioned is our balance after making a $12 million contribution of capital into our dairy RNG joint venture with Maas Energy Works in the third quarter. And lastly, you'll note that we maintained our 2025 outlook, which we had raised back in August, and we feel good -- we feel that we're in good shape in maintaining that outlook.

And with that, operator, we can open the call to questions.

[Operator Instructions] We'll take our first question from Eric Stine with Craig-Hallum.

So maybe just starting with the RNG upstream business. So it sounds like you've got 8 operating right now. Can you just give us kind of the thought or target, maybe run rate of volumes that you expect to exit '25?

And as you think about this longer term, I know that market has changed a bit. You've got a lot of supply from third-party sources. So just kind of curious how you think about that when you look out multiple years. At one time, you had a pretty high target for what you might ultimately produce upstream. Curious where that stands now.

So you're bringing up the production rates of the 5 that came online, we call them the [ Renuco ] projects. But you'll exit the year somewhere between 5 million and 6 million gallons. And next year, you'll double it, close to doubling it. And eventually, you'll be closer to 20 million gallons once all those projects come on and now I'm going out. That's once those Maas projects are on.

And so now I'm going out to 2027. Eric, you're referring to what we came out with almost 5 years ago, 4.5 years ago, the 100 million gallons, which by the way would have taken another $1.2 billion or $4 billion. And we pulled that back long ago when we looked at the credit pricing and some of the current situation. But what I will say is we like where we are. We like having that amount of fuel that we control.

But we're very big in the business, as you well know. And we have 80 to 90 different suppliers. So we remain -- we're moving still about half of all the RNG into transportation in the industry. We continue to be at the focal point of that. Everyone that needs RNG to transportation often has to come to us. So we like our position. We feel like we've made prudent investments at this point. We have to get those up and running correctly.

We're starting to see an improved production rates, which will continue to get better and better, and we're starting to feel much better about those early projects. We take great part in looking at the production that's going on at our first project, Del Rio that's been up and running a while, and that thing is hitting nameplate and it's doing very well.

We're very proud of that. And we're seeing -- we're beginning to start seeing some significant increases in production at the others. As I mentioned in my prepared remarks, Eric, our two biggest projects, one of which we own 100% of, they're just now beginning to inject.

So those are big -- one of those produces somewhere around 5 million gallons and the other around 3.6 million, and they're just now coming on. So we like where we are, and we'll see how that kind of all plays out as these -- as they develop here in '26 and in '27.

Yes. And you mentioned, I know last quarter or earlier in the year, you kind of set it as an objective to improve the performance at the plants and you have made progress. You did mention that you've got a few more steps to go. I mean, any clarity there?

I would assume or should we assume that those are pretty much -- you just kind of have to go through steps. It takes time rather than being something that's a significant investment.

That's right. That's right. It's fine-tuning. It's working with the farmer. It is all those things. There aren't big CapEx requirements to get them right. It's really just kind of bringing it along, getting the team working exactly right. So going through the first winter and figuring out where certain other items need to be winterized is kind of mundane things, but they're important.

And what's interesting, Eric, is you really do tune them up from -- I know when they first come on, they're more like producing about half of what you thought. And next thing you know, they're at 70, 75, but they will begin to pull on up to nameplate.

Got it. Last one for me. Just -- I know it's early days still, but the Pioneer Clean Fuel Solutions. Just any thoughts on initial interest, what you think that might do to spur X15N adoption, just kind of initial impressions.

Well, I'm told -- look, I love having another interested party out working with our customers and with potential customers. I think that's really powerful. We know this crowd. I like the fact that we're engaged in standing that company up alongside Cummins and Hexagon Agility. I think that's good alignment for us.

I'm told they have their first deal in the works. I'm not going to say any more than that, but they have maybe the first paper out circulating and that they've already made -- had meetings with 20 different fleets. I think they did some -- showed the flag pretty well down there in San Diego at the ATA.

So I like the fact that you have a very focused group working just on RNG, just on natural gas trucks, understands the nuance there on the leasing. And so we're working hard hand in glove with them, our sales team as is Hexagon and Cummins. So we'll see how they do.

Our next question comes from Rob Brown with Lake Street Capital Markets.

Sticking with the 15-liter kind of ramp rates and how that's developing in the market. Good to see the Pioneer project. But what's sort of the other sort of timeline and development of the 15-liter ramp? How do you see it at this point with sort of the market environment?

Well, I think there's been -- as I mentioned in my prepared remarks, I mean, the market has not been exactly favorable, right? The freight rate thing is real. That's a real overhang in the trucking business that it has affected purchases of new trucks. So that's just something you wish can get worked off. I think you're going to have softer rates that will begin to firm. But as I read the material, it looks like that could take a good part of 2026.

So that's just some headwinds there that I'd rather not have. It's hard to get people to make a move toward not only buying new equipment but buying new technology when they're worried about tariffs and import duties and supply chain and their freight rates. Now having said that, think that most in the industry have seen that there's kind of a shaking out. I mean, as you take stock of what occurred down there at the ATA Conference in San Diego, I mean, it's clear that there's been a sorting out of the technology.

I mean, look, I'm not wishing ill on anything, but I think that the electric and the hydrogen technologies really have gotten knocked down a peg because of their reliance on certain of the regulations and such, certainly at the federal level. And so now it's very clear that if you're a trucker, you have diesel, renewable diesel or you have RNG. And what's coming through is, Rob, that the fleets and the shippers still want sustainability, still want to be green, still want to decarbonize, but it has to make economic sense.

That's what's different now is that this has to stand on its own bottom. Now the good news for us is we have a technology and we have an engine that's here today and can be delivered today that can give returns. I mean, with our fuel pricing and with the economics associated with the incremental cost, we can get these fleets a 2-year payback, 2.5-year payback on the equipment, and then they really have significant savings as they keep that truck up to the typical 5 years.

So we like our positioning from that point of view. Now we've had fleets such as Walmart, Amazon, UPS, FedEx, Saia, Knight-Swift, Food Express. I mean they've all purchased the new X15N. So I like the breadth. Now we need more to acquire, and we need those fleets to really engage fully. But we're seeing some breadth of people beginning to take that in, get comfortable with it.

And then we hope there'll be -- those kinds of fleets buy a lot of trucks. We hope that as they like what they've got and they're operating well, that we'll see increased adoption in the coming years. But we're working hard with making sure that we're getting good exposure to the X15N with the largest fleets in America. And so far, most of them have taken some.

Okay, great. And then on the Maas Energy Development Agreement, how much is the CapEx requirement on your side for the three facilities? And then I guess, what's sort of the pipeline on the Maas side that you could see additional facilities on?

We had -- it's about $35 million. We've spent $12 million over in the third quarter.

Okay, good. And then just in terms of the additional potential projects with Maas, is there still a pipeline there or do you feel like this is sort of it from what you see right now?

Well, Daryl is a busy guy. So we've got those projects that I mentioned, the three projects. We constantly work with Daryl to see -- there's a couple of others that we had looked at very closely. But just with the given credit situation, they didn't seem quite like we'd like and Daryl understood that. So we'll continue to look at those. We like the fact that he's a very good operator and brings these projects on quickly and efficiently. So we'll see.

Yeah. And we'll have about -- well, for this -- what we have in front of us, so $35 million was in the cards for this year, but we'll have about $85 million in total for the plan that's in front of us with him.

Our next question comes from Derrick Whitfield with Texas Capital.

Congrats on a solid update, guys. Maybe starting with the downstream. You guys announced a flurry of supply agreements last week. Could you speak to what led to that step change in activity and when those volumes will directionally start to flow through?

Well that -- in many ways, we have hundreds and hundreds of customers, right? So at any given time, while we don't always announce all of them because sometimes they're just -- they're not as glamorous, let's say. Every year, we have a couple of hundred different customers that grow their fleet and renew contracts with us.

And so you're getting a little bit of that mix in there. Now there were some wins. But I want to say that when you have the size of the network and the fact that we have about 800 or 900 customers under contract, there's a lot of activity kind of constantly. We had some extra transit properties in that release.

We have quite a few new refuse customers and additions coming up right now. So I don't know if there's some sea change that just happened. It's just kind of the way our cycle tends to ebb and flow. But I do like the fact that we have a lot of activity, and that makes us feel optimistic about these fleets as they continue with the program.

Great. Understood. And then regarding the two larger projects that you guys have just brought on, could you offer maybe some directional thoughts on the timing of certification of environmental attributes, including rents, LCFS and 45Z credits I know that the LCFS backlog was quite extensive at one point, but just where is that? Where does that sit?

These -- let me handle it this way. And if I get too far out, someone will jump in here and save me. But these things take a while to really get up. So there's kind of a process for them to be -- to get into revenue production. I mean we're just now kind of taking care of the commissioning. I mean the Texas property is a few weeks ahead of the Idaho property. after about a month of operations.

And so the EPA has been pretty -- is pretty fast after two to three weeks' time often that we're able to begin to certify to be able to get the RINs. Now the LCFS, there's a provisional and another kind of certification where at some point after time, we begin to participate and I guess, collect at about a minus 150, right? And then eventually, over time, we get the final processing from California, the LCFS.

But that has taken on our Del Rio project, the better part of almost two years. Now we think that, that backlog has gotten corrected some. But I would say by the time you're really hitting your stride and all buttoned up with the certification process. I mean, it's a better part of 2026 for these projects before you're really done with that. Now you'll be receiving credits and being able to monetize credits, but not at their full potential.

Our next question comes from Matthew Blair with TPH.

Congrats on the strong results in the third quarter. You mentioned that you kept your 2025 EBITDA guide intact, which if I'm doing the math right, implies, I think it's $8 million to $13 million for the fourth quarter, even though the fourth quarter tends to be pretty strong for Clean.

So I guess how should we think about this? I think in the past you've been reluctant to change your guide to late in the year and effectively provide single quarter guidance. But I guess, is it fair to think that there might be some upside to the 2025 targets or how should we think about that here?

Probably, I mean as you look at it, it looks like that we -- we're doing well. I don't think it's -- I don't think we're in a position to really now tick it up that at this point. But I think as you're looking at, you're saying, these guys are going to be certainly on the top end of the guidance or maybe a little bit beyond that. I mean that's reasonable if you thought that way. And we'll see how it performs. There's a lot of things at work here, but that's how I feel too.

And we kind of agree that at that point, maybe you're micromanaging a quarter. And I think we feel good with that range that we put out there and where we sit right now to be comfortable with that and -- but we're not going to micromanage it.

Sounds good. And then just looking at your RNG volume growth this year, it's been a little variable. I think in the first quarter, it was down 13% year-over-year, second quarter up 8% this quarter, up 3%. I guess could you help us understand like why has it been so variable? Is that due to the supply that's coming to Clean that there's some variability in those volumes or?

Well, there was -- there certainly was in the first quarter, right, where there was cold spells throughout the country and all the RNG producers, the dairy producers were having execution difficulties because of that cold weather. So that you saw a bit of a drop. And then there was a bit of a rebound in the second quarter.

We also have the biogas reform where gas was held at year-end. So then that kind of floods in. It came in -- well, in the second quarter, we had an uptick primarily from the cold weather in the first quarter. And so that was a little bit distorted in terms of its growth. And then I think the third quarter -- our third quarter here was maybe a little bit more normalized, if you will. So you've got -- yeah, so there's some variations in there.

Our next question comes from Betty Zhang with Scotiabank.

I first wanted to ask about maybe if you could give us a preliminary look at expectations for 2026. And in particular, if you could speak to volumes. Should we expect a pretty big step up given the -- your production of RNG that's ramping up? And as well, should we be accounting for the X15 gallons or is it still too early for that?

Betty, we're not going to -- history is the guide. We're not going to share today set our guidance for 2026. I mean I think if you go back and listen to what I said earlier on this call, I gave about as much guidance as we're going to give on the RNG from our end, right? And so in the scheme of things, it's a nice growth from our -- from where we've been to where we're going next year. But it's not a step change type thing.

But go back and listen to that. I mean, basically, I said we're exiting the year around 4% to 5% to 6%, and that it will get close to doubling, right? That's from our RNG production. So that kind of gives you a thought for that. The adoption is hard to tell, Betty. And I don't have a crystal ball here. And I don't -- over the years, we've always -- we've liked -- we've worked hard to be in the high single digits.

But it's just -- I think it's too hard to tell exactly how the adoption rate for the X15 is going to be for -- as I sit here today for next year. Over the course of the last several years with the 9-liter at Cummins, I mean we have seen dramatic adoption rates over time, but it takes time. And you're kind of in the early phase of that with the X15N, and there's a lot of uncertainty with regulations in California and the federal government.

And so a lot of work yet we feel optimistic that you're getting the right fleets experiencing with it to get to increased rates of adoption. But I guess I'm crawfishing around Betty, no, I'm not going to give you an exact growth number, but it will be -- we should see increased rates of adoption in 2026. Let's put it that way. But of course, you're coming off of low levels of adoption right now with the X15N.

Okay. Fair enough. For my follow-up, I wanted to ask about the fuel margin. Looking forward to the next several periods, our view is that the WTI to Henry Hub spread should narrow or may narrow. So I just wanted to get a sense of how Clean Energy is able to kind of manage the fuel margin, what levers you guys could pull on that end?

Well, we -- Bob and I watch that as well very closely. And as you know that there's been a nice fuel margin throughout most of 2025. That's narrowed. Not only is it going to narrow, it has narrowed some from kind of historical differentials of the oil and gas spread to where you are today, right? You have $4.25 gas and $60, a little more oil. So you've come down to $15.1.

Now we tend to think, Betty, that, that will be -- that mid-teens to [ 15, 16, 17:1 ] is probably a good spread. And with that, we're in -- that's good for us. That's very good for us. And we can maintain the kinds of fuel margins that we've seen this year in that. Now what's difficult is if you have $40 oil and you have $4 natural gas or $4.50 natural gas and $35 crude. And I guess our view is, as we look out that we see the relationship between oil and natural gas kind of staying in this 15:1 spread where you are right today.

I think that's pretty much where you're going to be. I mean frankly, Betty, I think you may see oil come down some. I mean that seems to be -- that could be -- but I don't think you're -- right now, you're seeing sort of winter pricing on the gas curve. So that gas cost should come down. And so I think you'll -- as I said, I think the 15:1 is probably 15, 16:1 is probably a pretty good spread.

Along with the other drivers that we have within our margin of RIN and LCFS pricing around that. So we don't have everything all concentrated in one of the [ beauties ].

No, we have a lot of the West Coast, the West Coast, the refined products and diesel. I mean diesel today in California is $5.25. That has to get factored in, too.

Next question comes from Dushyant Ailani with Jefferies.

I just have one quick one. I know that as you guys kind of ramp your RNG upstream next year, 2026. I know there are a bunch of puts and takes, 45Z, LCFS, D3. Just trying to figure out what are some of the sensitivities to think about for that segment to get to EBITDA positive. Any kind of thoughts, color that you can share? Is that a 2026 story, 2027 or do we need to see D3 or LCFS or 45Z to kind of get to those levels?

Well, you got a lot of things. Let me start and then Bob, where I mess up, you could chime in. We do think that the LCFS program, as outlined by CARB is going to lead over time over next year to a strengthened LCFS price. Now it's anybody's guess exactly where it is, but our partners and us, we think that '26 is going to be better than '25 and '27 is going to be better than '26. And so that should be strengthening.

I mean, CARB believes that the LCFS by the time you get to '28, '29 could be back to where we were at $120 to $135 to $150. So that's good. Maybe we've seen the bottom, and that should be strengthening. So that's good for our business. We -- as I said on our call, we have to work on what we control is we have to get the capacity and the production levels up at the plants. And we feel confident now that we've really taken firmer control of the operations.

We'll get there. But that's important to us for these things to perform correctly as about -- almost as important as what's happening on the environmental pricing side. So we've got to get these things -- feel very good about these two large projects that we just brought on now because they've commissioned well.

And I think we learned from some of our earlier projects. We've got to get them all -- all these projects performing better. And then you really -- then you can really see them perform like they should. And you'll have strengthening LCFS prices over time. I think RIN's, I would say maybe the cautious view there is we've seen those stabilize.

And I'm not smart enough to figure out the small refinery exemptions factored in into the maybe a potential change in the RVO. Some have said that it could lead to RIN strengthening some. I don't know. But we sort of like where the RIN is now because it's stabilized at $2.30 or so, and that works fine for us. So productivity enhancements on our plants, and we do see a strengthening of the LCFS credit in the future.

And if there's -- and then the production tax credit as well, 45Z, if that changes in our favor, the guidance comes out from the treasury, if they -- yeah, depending on where that comes out, that could be some upside. But I think that, as you said, Andrew, I mean, these projects at least are getting through that ramp-up phase, and that's really -- it's kind of about that kind of timing to get through the period, which going into '26, a lot of them are and the volume production then should show improvements there for sure.

It appears we have no further questions at this time. I will now turn the program back over to Andrew Littlefair for any additional or closing remarks.

Thank you, operator. Thank you, everyone, for joining us today, and we look forward to filling you in on the next quarter next year. Thank you.

This does conclude today's program. Thank you for your participation. You may disconnect at any time.

Good day, everyone, and welcome to today's Clean Energy Fuels Second Quarter 2025 Earnings Conference Call.

[Operator Instructions] Please note this call is being recorded, and I will be standing by. It is now my pleasure to turn today's program over to Robert Vreeland, CFO.

Thank you, operator. Earlier this afternoon, Clean Energy released financial results for the second quarter ending June 30, 2025. If you did not receive the release, it is available on the Investor Relations section of the company's website at www.cleanenergyfuels.com, where the call is also being webcast. There will be a replay available on the website for 30 days.

Before we begin, we'd like to remind you that some of the information contained in the news release and on this conference call, contains forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those contained in such statements.

Several factors that could cause or contribute to such differences are described in detail in the Risk Factors section of Clean Energy's Form 10-Q filed today. These forward-looking statements speak only as of the date of this release. The company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this release.

The company's non-GAAP EPS and adjusted EBITDA will be reviewed on this call and exclude certain expenses that the company's management does not believe are indicative of the company's core business operating results. Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for or superior to GAAP results.

The directly comparable GAAP information reasons why management uses non-GAAP information, a definition of non-GAAP EPS and adjusted EBITDA and a reconciliation between these non-GAAP and GAAP figures is provided in the company's press release, which has been furnished to the SEC on Form 8-K today.

With that, I will turn the call over to our President and Chief Executive Officer, Andrew Littlefair.

Thank you, Bob. I'm pleased to say that the second quarter of this year again demonstrated the underlying strength of our overall business. Despite the continued shifting regulatory atmosphere, uncertainty around tariffs and other external distractions in the market, we posted a very solid performance with $102 million of revenue, over 61 million gallons of renewable natural gas sold, $17.5 million of adjusted EBITDA for the quarter.

And with $241 million in cash and other investments, we remain on solid financial footing. I will keep my remarks on the short side today and let the results speak for themselves. But I do want to give a little color to emphasize my previous point about the strength of our fundamental business, which is allowing us to update our projections for our 2025 financials. Bob will be giving you the details, but suffice to say, we believe we will be exceeding even the high end of our original guidance.

We distributed a press release last week that highlighted a number of deals that we have made over the last several months with transit agencies across the country. We signed our first transit agreement over 25 years ago. And since that time, we have continued to steadily grow this business. Today, we fuel over 9,000 transit buses every day at 115 locations.

This is due to several factors. Buses equipped with natural gas engines are not only reliable in tough conditions, but they are clean and quiet. Operators very much appreciate their dependability. Cities like that the buses dramatically reduce harmful NOx pollutants and passengers appreciate they don't smell diesel fumes as they ride along.

Also, more and more transit agencies are seeing the double benefit of carbon emissions reductions, plus cost savings by converting their fleets from traditional CNG to RNG. With almost 100 different RNG supply contracts, no other company can ensure a steady flow of this clean fuel like clean energy, which is why we are winning so many contracts.

Like the transit market, our business with waste companies is consistent and growing. As the recognized leader in the alternative fuel space, we can expand existing relationships with refuse companies and win new deals, once more by the assurance of a steady supply of RNG as these companies expand their natural gas fleets.

We continue to be bullish on the heavy-duty truck market's adoption of RNG. While we as well as Cummins acknowledge that the sales of trucks equipped with their new X15N engine aren't where we had hoped they would be at this point, there are signs that continue to point in the right direction. Between the change in administrations in Washington and the evolving regulatory atmosphere in California, all truck sales have been hit hard while operators wait for more clarity.

Fortunately, that clarity is beginning to emerge. There is an acknowledgment during our discussions with both carriers and shippers that they want to continue to look at ways to reduce harmful Scope 1 and Scope 3 emissions.

One of the most promising recent policy changes is that these fleets no longer are forced to consider only one technology, and one that is too costly and still unproven. That, along with other developments like market leader Freightliner recently offering the X15N option is why we remain bullish.

Trucking companies continue to engage with us as they evaluate the RNG solution. Price still wins the day in the highly competitive logistics business. Fortunately, it is easy to get the fleet's attention when they are presented with up to a $2 a gallon savings on fuel.

I'll end my remarks with a quick report about the progress we have made in our RNG development business. In the relatively short time since launching our dairy RNG production business, we now have 6 dairy projects operating with another large project in Texas in commissioning and our largest project in Idaho completing an important pipeline extension and nearing mechanical completion.

Both the Texas and Idaho projects are on schedule to begin producing RNG by the end of the year. Additionally, the dairy RNG projects that we are developing with Moss Energy have begun construction. Using our own RNG allows us to capture a greater percentage of the overall value of the fuel, not only at the pump with environmental credits, but also through the monetization of the investment tax credit.

We recently announced $29 million ITC sale in connection with 4 projects owned by our RNG joint venture with BP. Dairy RNG emission rates for the 45Z production tax credit are in the process of being finalized. We are pleased with the recognition of negative emission manure feedstock RNG in the One Big Beautiful Bill Act. This legislation allows the U.S. Treasury to recognize the full benefit of dairy RNG, which involves capturing carbon emissions from dairy cow manure and converting them into productive use as a negative emissions highway transportation fuel.

Let me close with saying that we continue to feel very good about the way our businesses are performing, both the upstream and downstream to put it in the old energy business vernacular. Fleets like transit agencies and waste companies that have been operating natural gas buses and trucks for decades are seeing a revitalization with the added environmental and financial benefits of migrating from CNG to RNG.

And the relatively new market of heavy-duty trucking is slowly but surely starting to see the light. Clean Energy is well positioned to continue to lead the exciting RNG space with a growing portfolio of production facilities, the largest supply of RNG, the most expansive fueling network and a talented group of people.

And with that, I will hand the call back to Bob.

Thank you, Andrew, and good afternoon to everyone.

The second quarter of 2025 was another good quarter. We saw increases in revenues and RNG volumes compared to last year's second quarter. Also, keep in mind, the revenues last year included $6 million of alternative fuel tax credit revenue, which expired for 2025.

Our second quarter RNG volumes grew 21% compared to our first quarter of 2025. Now this bounce back was anticipated after the first quarter RNG production challenges due to unusually cold weather.

Our operating cash generation in the second quarter of 2025 increased over last year and over our first quarter of 2025. As Andrew noted, we ended June with $241 million in cash and investments, which is up from $217 million that we had at the beginning of the year. It puts us in a very good place relative to our anticipated CapEx and other spend on our dairy projects.

Looking at our net results. Our GAAP net loss for the second quarter of 2025 was $20.2 million compared to $16.3 million a year ago. But the results of the 2024 benefited from the $6 million alternative fuel tax credit revenue as well, the second quarter last year, if you recall, had 2 quarters of LCFS revenues, which was an extra $2.2 million that was in last year's second quarter.

Adjusted EBITDA a year ago, second quarter was $18.9 million versus $17.5 million in 2025. But if you consider 2024, of course, had this $8.2 million of noncomparable income, you can see that 2025 has significantly improved over 2024. The improvement is principally the result of higher fuel volumes from both RNG and conventional natural gas, together with favorable pricing and cost mix in 2025 versus a year ago.

In fact, the higher RNG volumes in 2025 compared to last year helped to mitigate much of the lower RIN pricing in 2025 versus a year ago. Now looking at our trend from the first quarter of 2025, where adjusted EBITDA was $17.1 million versus our $17.5 million in the second quarter, we did see very good benefits of the higher RNG volumes in the second quarter with a 77% increase in RIN revenue.

Our LCFS revenue, though, was lower in the second quarter, mainly due to a 20% drop in LCFS prices since the first quarter, and we saw a drop in our base fuel margins on normal fluctuating fuel pricing mix and commodity cost mix. The net of all that basically resulted in a relatively flat volume-related product margin between Q1 and Q2 of 2025.

We did see improvements in our construction and service margins in the second quarter of 2025, which helped bring our second quarter results slightly above those of the first quarter. On the RNG dairy front, the losses from our upstream Dairy RNG projects were about the same in the second quarter compared to the first quarter. The losses at this stage reflect the fact that 5 of our 6 operating dairy projects are in ramp-up mode, plus we have operating expenses in Idaho that we've talked about before.

Our dairy project in Del Rio, Texas is producing positive EBITDA and steadily increasing its RNG production. We were anticipating producing more RNG revenue at this stage from the 5 projects in ramp-up mode, and we are taking corrective action to address those 5 projects as they ramp up, and we feel confident about being able to increase our RNG production volumes at those locations similar to what we did in Texas with Del Rio, although we have tempered our 2025 outlook on the dairy projects based on where we are through June.

Lastly, considering our results through June of 2025, we are raising our guidance for the full year 2025 for both our GAAP earnings and non-GAAP adjusted EBITDA, you can find details in our press release, but at a high level, our GAAP guidance for 2025 is now for a net loss ranging from $217 million to $212 million, and our outlook for adjusted EBITDA for 2025 is now $60 million to $65 million. Our new guidance reflects the trends we've seen in our results thus far with anticipation that these trends will largely continue.But with caution, recognizing there are ongoing uncertainties still in play, particularly for us around the timing of adoption of the X15N RIN and LCFS pricing and the ongoing ramp-up in our dairy projects. That is my report.

With that, operator, we can open the call to questions.

[Operator Instructions] And our first question will come from Eric Stine with Craig-Hallum.

So, I guess I'll start maybe with the 45Z. Obviously, great that it was included in the bill. And I know waiting on treasury, just curious kind of what your updated thoughts are on what that potentially could mean for you, I guess, in the near term, if you apply it, well, I mean, per gallon, but if you apply it to where your upstream is at now and maybe where you think it is 2 to 3 years from now?

Eric, I'm not going to get into kind of a guessing on how many dollars per gallon and all that kind of thing. But look, I think the bill was very strong, right? As you well know, it not only got included, it got strengthened and it got extended and specifically is enabled to recognize the negative carbon and instructs the Treasury Secretary to take into account the negative carbon.

So, I mean, I feel very bullish about how that should impact. And I think you should get a very good carbon intensity score, which should end up being on the higher end of the way people have looked at this. So, I think it should be meaningful for us going forward. But there's still a lot to work through, but I feel like we're well positioned because the legislation itself enables it and recognizes it.

Right. Well, I guess I'm going to ask you to potentially guess again. But the, I mean, timing, I know that when you're looking at treasury guidance, it can be very tricky to call that. But I mean, is it something that you have any insight into or anything you're hearing?

Well, Eric, it doesn't really kick into effect January. So, we're kind of back in that where there's a lot of things at treasure on treasury's plate. I know they're working on this now, and I know other agencies and other departments that have input are engaged. So that's good. But I don't know that they're under a dead rush to get this done. They know that it doesn't really get put into play until January. So, I'm guessing sometime in the fall, you'll see it in, it would just be a guess, October, November, something like that, is probably get sorted out.

Right. Right. No, I appreciate that. All right. Maybe just turning to the X15N. Obviously, as you said, I mean, it's certainly not to where I think it had been envisioned a couple of years ago or when things started for Cummins. But the one thing I've heard is just incremental cost as being a big deterrent for what PACCAR has had in the market for a year plus. Any thoughts or what you're hearing? I know it's early for Freightliner, but incremental cost, having another OEM in the market, what type of impact? Again, I know it's early, but just curious what you're hearing.

No, it's good. And we continue, our sales team continues to work with, of what I've said on a couple of calls is that for 2025, we wanted to see an increase in the breadth of the X15 and orders across the heavy-duty space. And I believe we're seeing that. What we've said, Eric, I think you and I have talked about is Cummins felt strongly. It's not about just some one big order with one fleet that you needed in order to build a market, really needed to have acceptance across. And I believe we're seeing that. And they're smaller numbers, but it's more breadth.

The orders are taking place, quotes for pricing are underway. The Freightliner coming into the market has been very helpful. The incremental cost think has been a little bit of a stumbling block in the early introduction, certainly at the end of last year and the first part of this year. But we've seen some of our channel partners and the industry really pull together, OEMs, Cummins, ourselves and others have worked hard to bring the incremental price down.

And that has happened. And so once upon a time when you'd see incremental pricing in the $100,000 or even greater range, you've now seen that come substantially down, something closer to around $75,000.

That's important, Eric, because it gets you to where with our advantageous fuel pricing, it can get you into that very important 2-year type payback for the incremental cost. And that is, that begins then to really sing for fleets. So, the engines have performed beautifully. The, really, the test and the early adopters, I mean, that has gone well. And now that we're able to get this incremental pricing down, I'm feeling much better about the way the introduction will go.

Our next question will come from Rob Brown with Lake Street Capital Markets.

Hi Rob! I want to dig in a little more on the ramp on the dairy projects that are ramping and the things you're doing. Could you give us some more color on kind of what you're doing and how long you think that can kind of take to ramp things up?

I would say, if you have some. I mean I would say it's kind of normal, after commissioning and placing these things into service, we are kind of taking care of kind of normal, I would say, normal type punch list items that are I mean they're extensive, but we know what's going on. And I mean, they're very operational. So, you're looking at manure flow and all the different equipment that's out there.

I think what the encouraging part for us is that there's nothing there that we're seeing that indicates that there's a showstopper of any kind. I mean we were able to get the Del Rio, Texas dairy up, but it takes some time. So, you never know. Sometimes it's a quick fix and there you go and or it can take a little time. But, so I think we'll be at it kind of going through this year on this ramp-up and correcting them and, but it shouldn't go much beyond. I mean we should start hitting the ground running a bit more going into next year for sure.

Eric, it's kind of hard to all these different Rob, I'm sorry, Rob. It's kind of hard all these different phases on these things. But I would sort of say when we, often the business or at least in our business, we used to think about commissioning as something that was very defined, right? It was like 2 weeks to, when we commission a fueling station, that's kind of how long it takes. And I would say here, the commissioning is it's a little bit more varied.

And it's more in the scheme of 6 months, realistically by the time you bring them on and you start, you really debug and improve and enhance these dairies. And it's more on that order. So, I think Bob is exactly right. Toward the end of this year, you'll be getting much improved run rates that's something much closer to nameplate whereas right now, you're,

Just to be clear, we are producing RNG volume and monetizing what we can. So, these are operating and you just have to kind of deal with some of the nuances of, I mean, it's biology. So, we know what we're up against there, but we have a good team and good experience. And so, it will get there. It's just a little, maybe a little slower than we anticipated.

Okay. Great. And then on the market demand, I think you talked a little bit about some regulatory clarity starting in the market. But can you just kind of update where that's at and maybe the point at which customers get more kind of clarity and comfort that they can make a decision?

Yes. In my remarks, I don't want it to, there are some macro issues here. It's not all about the introduction of cleaner trucks. The trucking industry sales of new trucks in America is off significantly. And with tariffs and supply chain and inflation and concerns at the ports. I mean, we've really seen the trucking market has had a very tough year. And the acquisition of new equipment has been something, I don't know, it's been off 50%.

Then you lay on top of it what's happened in California because of the regulations, which were requiring an electric truck in order to buy other trucks. That will all but shut down the acquisition of new trucks in California. I mean, I think the new truck sales in California are off something on the order of 75%. And now as you know, as I speak of, you're beginning to see more clarity.

In California, the Trump administration got rid of the waivers or didn't approve the waivers on the ACT and the ACF fleet rule. And that still, we haven't seen total clarity yet on how that's all going to come to rest and what may be happened in California, but that's beginning to take care of itself.

CARPs had a couple of hearings, and it's expected that there's going to be some new recommendations to the governor of just how to sort out the clean truck fuels program in California. And so, I think here over the next couple of months, we should get a little bit more clarity there. And hopefully, truck sales will begin to.

And we also hope that low NOx trucks will get a nod in that program as well, which will be very important for RNG going forward. But through all of this, what is heartening is that a lot of our trucking customers and shippers are still wanting, are still interested, still believe that they need to field sustainable equipment.

And so that's good. And yet, I would say, common sense and economics are prevailing right now. And so, it's got to make economic sense. And again, this is a little bit of good news for us, Rob, because we can price our fuel and get them savings on every mile traveled. So been a little slower on the adoption, but I think it has as much to do with sort of macro issues in the industry as it does specifically with the X15N.

Our next question will come from Derrick Whitfield with Texas Capital.

I wanted to start on guidance first. Could you perhaps add some color around what's driving this rerate and growth and success you're seeing in dispensing in your view? And then separately, to what degree has that been communicated in public comment in a public comment period for the STEP 2 rule because that clearly has demand implications, and we know generation was quite strong in May and June. So again, would love your thoughts on those topics.

Yes. Derrick, I'll start on the, what we're seeing there. I mean, I think we're definitely seeing continued strong volume. That's, it's been a little choppy because Q1 was a little off, but then we kind of came back and rebounded there in Q2. I think in general; we've also seen just a good mix of more vehicles within the kind of the, our pool of customers and whatnot, just more vehicles at our stations and fueling volumes at our stations will drive economics. So, you're getting kind of a better margin per gallon, if you will, which is we work we were cautious on that.

There's a lot that can go into it between RINs and LCFS as well as even the spread on oil to nat gas. And so far, all of that put together, it hasn't all fired on all cylinders all the way. For example, this past quarter, LCFS was down, but we had tremendous RIN volume, and so that helped. But all of that has been collectively going in our favor. And while we still remain somewhat cautious, basically, we do see that some underlying trend on that will continue.

We don't see that kind of dropping off just between kind of oil and natural gas, even within the RIN LCFS, we've already baked in. We kind of know that we see the trend there. So that's part of why we see this back half could be, you could have a little headwind because the environmental credits are down. So I know you were going on the second part of the question was, Well, this kind of better than expected and the demand and then yet on the EPA, and I think you're going down the RVO is that, how is that not factored in to RVO because there's been comment out there that they didn't consider the…

Well, look, we, there's a comment period right now in the RVO. I think it's generally a little, the RVO is a little light. But let's not overemphasize this in our business. I mean it's an important piece, but it's not the entire piece. And while I think they got it a bit light, I've been at this a long time, we all have here. The EPA struggled to come up with the right methodology on RVOs or discussion. So we're going to give them some of our insight on demand growth, X15 and growth and the kinds of customers that we see that are interested and some, who knows how that will go. But I feel like the RVO, it's somewhat constructive, and it should keep the pricing in about this range, which is fine for our business.

Yes, makes complete sense. And then maybe just focusing in on downstream. I wanted to ask for your thoughts on some of the recent dispensing transactions that have been announced with Trillium and Apollo, which are seemingly rerating the value of downstream and also highlighting at the same time, the growing disconnect between your stock and the markets.

Well, I don't know. You're going to have to help me there on what you're seeing on that because I don't know that I have conclusions on that on the pricing of that. What are you seeing there?

Sure. We're seeing since COVID potential 2x increase in the value of downstream, which could put those assets on a near 10x multiple basis based on our math. When we look at kind of what's implied in your business today, very little value for, or not that level of value recognition for the downstream. So that was kind of the comment and thought process behind that.

Yes. Well, that would imply that we were undervalued. Yes. I mean, I think general, we're, we like to see those kinds of transactions in the space that basically supports the valuation and a higher valuation for us. Why it doesn't translate to us is, look, I still think actions speak louder than words, and you still want to see significant X15N adoption and growth, and you see that in our numbers. So we're kind of set up for prime time on that. We're also a bit larger.

Yes. I mean, I guess it sort of validate, I've long believed and in fact, we've talked to some significant players in the business. I mean, in order to replicate our debt downstream, it would be $2 billion, $2.5 billion to do it today. and a decade. So we are well positioned with a network that would be, and I happen to be, I'm an optimist, but I happen to believe that over time, the experience, one of the reasons we're doing well right now is we have, our Amazon stations are doing well, right?

We proved out that large deployments of trucks, it can work and that RNG can work well. And so we have a lot of unutilized capacity at our downstream that's super well positioned. We have these truck stops up and down every interstate system in the nation. And so as this demand begins to develop, we're going to get, we get a disproportionate amount of downstream. Today, we're, in most markets, we're about 50% or 60% of the market share. So that's why we work so hard on the demand side of this equation. And now that we have the right product, the X15N, we've got the right kinds of fleets. All the largest fleets in America are testing or buying some of these X15s. Now we need them to do it in greater numbers, of course. But I like where we're headed.

Our next question will come from Manav Gupta with UBS

Guys. Excellent result and a raise of the guide. I just wondered your outlook on the LCFS price. You did mention RVO was a little light. I agree it's a little light for your, on the B3 side. But the LCFS developments are positive. And I'm just trying to understand how are you thinking about the LCFS prices exiting 2025?

Manav, I think it's good because we haven't talked about that enough. I think that the new rules for the LCFS and the new, finally that those got into place, that should be constructive over time. We'll begin to work off of the, we'll begin to work over the oversupply in the bank. And it doesn't happen overnight, as you know. But it will be the case that it will be, it's beginning already. And you'll have a firming price throughout the remainder of this year and into next year, and it will continue to go up. So I like where the LCFS is headed.

Perfect. That's what I was hoping for. And then the investment tax credits are a big benefit. You can monetize them. Given your CapEx spend and other things, how should we think about the benefit of this into next year? Like what could be a good number? I know it's a little bit of a guess, but what could be a good number for investment tax credits that you could monetize if you're thinking about next year or even the second half of this year?

Well, let's see, Manav, okay. So, we've monetized the investment tax credit on all of our projects that have been placed into operations. And really, that money is being utilized in the JV, right? So, it's, so we've seen that. So, what we have really are a couple of projects under construction. There's a big one in Idaho, one in Southwest Texas, and then we have our Mas Energy deals. And all those, it's, I don't want to speculate on what that would be. I mean we're, those are, the dollars involved are pretty large, particularly in Idaho and others.

But I guess, generally, how we're viewing that is that it provides us a nice inflow of capital to take down our kind of net capital outlay on those. And, so it helps the return, if you will, we kind of use it.

That's very clear. As long as you're basically clarifying that there are large investments, particularly associated with the Idaho project, Eventually, we'll be able to get it back in the cash stream. Thank you for the response.

I guess the other thing is on one of those, we own 100% of, right? So that…

The one in Texas, we own 100%.

So we are splitting the ITC with a partner on that one. We get all of that.

Our next question will come from Matthew Blair with TPH.

Are you seeing signs of incremental tightness in the downstream CNG refueling market? And if so, are there any examples you can share? So for example, when you recontract an existing fleet, is that coming in at a higher rate due to incremental tightness? And I guess the reason I ask is because your baseline fueling margin, excluding the RIN and LCFS credit revenue really seems to have taken a step up here. And so we're just trying to get a better understanding of why that is.

I don't know that we're seeing a tightening there. I think you're seeing, well, I mean, you're seeing, there's, I mean, you're just seeing kind of more fueling, what impacts that base margin is the volume at our stations. And as we grow our customers that are just kind of pure trucking, fueling at our stations, I mean, as an example, our Amazon stations are purpose-built. They haven't been fully there for this year, of course, and most, maybe most of last year.

But as we continue to, our fleets continue to grow, our customer fleets continue to grow. And so the shift is really toward kind of fuel volumes and fueling at our stations. And so you're starting that is what drives that base margin. And as well, just the spread kind of oil to nat gas has been good. And we make money at this with volume. You do make some money. Certainly, there's margin there with that spread. I mean, the spread, I think I looked again today was 21 kind of [WTI to NYMEX.] So that's kind of it. Matthew, there's not any complicated deal. It's just mix of fuel volume at our stations.

Sounds good. And then congrats on raising the guide. I think even at the top end of the guide; it would imply that the back half of the year would be a little bit softer than the first half. Could you help us understand the moving parts there? Is that just a function of trying to be a little cautious given lower RIN prices? Or is there some seasonality at play? What would determine that?

Just general caution, like I said in my comments, vehicle adoption, what's going out there in the vehicles in terms of what's being purchased, all of that. LCFS, there's volatility there. We've got, we're ramping up those. So, our base underlying, as we were just talking about kind of the base underlying and fueling and that those are the trends that we kind of largely said you would see those continue. But there's other just caution there, yes.

Our next question will come from Betty Zhang with Scotiabank.

I wanted to ask, so in the updated guidance, I noticed that the expected Amazon warrant charges for the year is higher. Does this reflect more fueling demand from Amazon? And are you seeing similarly more interest in demand from other trucking customers?

Betty, it does, from what was in the previous guidance, that's correct. Now are we seeing other yes, Expand. Yes, we are, but not the silver bullet. I mean, look, we're, the X15N is still a bit of a question.

So, But I think, Betty, you've got it right. You figured out what you're looking at there on the Amazon. So that volume is up. And the guidance also expects that there will be increased volume from trucking. I'd like a lot more, and we hope that will be the case. But I think that's kind of we're being a little cautious. But yes, you're seeing the increase.

Got it. Makes sense. And then I was wondering if you could just provide an update on your RNG projects under construction.

Well, as we said kind of went over pretty fast, but 6 projects are completed, right? And they're in kind of the debugging stage as we talked about. And Betty, I don't know if you were on that part of the call, but they're in the ramp-up phase and that commissioning, I'd sort of say that feels like that could take 6 months rather than it's not all done in 2 weeks, okay?

So those are in play. We have expectation that they'll be sort of on a similar track to what we saw with Del Rio, which has done very well. The next 2 big projects that we have under construction, we're really feeling good about South Fork, Texas dairy, that's 100% owned by us. And that's really gone, I think, very well to this point, right? It's kind of been on time and on budget. We're in the commissioning save. We've actually loaded manure into those tanks.

There's a lot more to be done there, but that one is coming along nicely. And then our final -- our large project, a really big project in Idaho, we've had some substantial milestone completions there. We completed the 11-mile pipeline. We're testing and filling up and some of the big digesters. It's a very impressive project there. And so that will soon go into more formal commissioning. And we expect both those projects to be kind of on the beginning of production the latter part of this year. So, we feel good about that. And then we have 3 MAS projects at 6 dairies, let's call it that 6 dairies that have really 3 projects. Those are all under construction. And just beginning, but those are all underway. So that's kind of where we stand right now.

And at this time, we have no further questions in the queue. So I'd like to turn the call back over to Andrew Littlefair for any additional or closing remarks. Thank you.

Thank you, operator, and thank you, everyone, for joining us today, and we look forward to filling you in next quarter. Have a good day.

Thank you, ladies and gentlemen. This concludes today's presentation, and we appreciate your participation. You may disconnect at any time.