Q1 2025 Clean Energy Fuels Corp Earnings Call

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Operator: Please stand by. Your program is about to begin. If you need assistance during the conference today, please press star zero.

Speaker Change: Please standby your program is about to begin if you need assistance during the conference today. Please press star zero.

Operator: Good day, everyone, and welcome to today's Clean Energy Fuels first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star 2.

Speaker Change: Good day, everyone and welcome to today's clean energy fuels first quarter 2025 earnings conference call. At this time all participants are in a listen only mode. Later, you will have the opportunity to ask questions. During the question and answer session. You May Register to ask a question at any time by pressing star one on your telephone keypad.

Speaker Change: You may withdraw yourself from the queue by pressing star to you. Please.

Operator: Please note this call may be recorded and I will be standing by should you need any assistance.

Speaker Change: Please note this call may be recorded and I'll be standing by should you need any assistance. It is.

Robert Vreeland: It is now my pleasure to turn the conference over to Robert Vreeland, Chief Financial Officer. Please go ahead. Thank you, Operator.

Speaker Change: It's now my pleasure to turn the conference over to Robert Vreeland, Chief Financial Officer. Please go ahead.

Robert Vreeland: Thank you operator earlier this afternoon clean energy released financially <unk> for the first quarter ending March 31st 2025.

Robert Vreeland: Earlier this afternoon, Clean Energy released financial results for the first quarter ending March 31st, 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.

Robert Vreeland: If you did not receive the released it is available on the Investor Relations section of the company's website at Www Dot clean energy fuels dot com, whereas that 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.

Robert Vreeland: 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 risk, 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 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.

Robert Vreeland: 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.

Robert Vreeland: Several factors that could cause or contribute to such differences are described in detail in the risk factors section of.

Robert Vreeland: Clean Energy's Form 10-Q filed today.

Robert Vreeland: These forward looking statements speak only as 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.

Robert Vreeland: 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-GAP financial measures should be considered in addition to results prepared in accordance with GAP and should not be considered as a substitute for or superior to GAP results. The directly comparable gap information, reasons why management uses non-gap information, a definition of non-gap EPS and adjusted EBITDA, and a reconciliation between these non-gap and gap figures is provided in the company's press release, which has been furnished to the SEC on Form 8K today.

Robert Vreeland: 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.

Robert Vreeland: 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.

Robert Vreeland: 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 S. E C on form 8-K today.

Andrew Littlefair: With that, I will turn the call over to our President and Chief Executive Officer, Andrew Littlefair. Thank you, Bob. And I hope the sound is okay. I'm in Washington, D.C. and I've been up here working to spread the word on R&G. Bob, thanks.

Speaker Change: With that I will turn the call over to our President and Chief Executive Officer, Andrew Little Fair.

Speaker Change: Thank you Bob.

Speaker Change: The sound is okay, I'm in Washington D C.

Speaker Change: I've been up here working to spread the word on R&D.

Andrew Littlefair: I'm pleased to report we had very solid results for the first quarter of the year. In the quarter, we sold 51 million gallons of renewable natural gas, generated $104 million in revenue and $17 million of adjusted EBITDA. We finished the quarter with $227 million in cash on our balance sheet. a $9 million increase since the start of the year. Our R&G sales volumes were lower compared to the first quarter of 2024. This is driven by lower supply volumes from our third party R&G producer. Some of our producer partners were impacted by weather and other operational events.

Speaker Change: I'm pleased to report we had a very solid results for the first quarter of the year in the quarter. We sold 51 million gallons of renewable natural gas generated 140 <unk> hundred four.

Speaker Change: $4 million in revenue and $17 million of adjusted EBITDA, We finished the quarter with $227 million in cash on our balance sheet.

Speaker Change: A 9 million dollar increase since the start of the year.

Speaker Change: Our R&D sales volumes were lower compared to the first quarter of 2024. This is driven by lower supply volumes from our third party R&D producers.

Speaker Change: Some of our producer partners were impacted by weather and other operational events.

Andrew Littlefair: These issues are seasonal in nature, and we expect a rebound over the remainder of the year. Importantly, we did not see any material decline in demand from our fueling customers despite the market uncertainty regarding the economic impact of tariffs. Our fuel volume is underpinned by steady demand from our fleet customers in the refuse, transit, and trucking sectors.

These issues are seasonal in nature, and we expect to rebound over the remainder of the year.

Speaker Change: Importantly, we did not see any material decline in demand for my feeling customers. Despite the market uncertainty regarding the economic impact of tariffs.

Speaker Change: Fuel volume is underpinned by steady demand from our fleet customers in the refuse transit trucking sectors.

Andrew Littlefair: In recent months, there's been a lot of attention on tariffs and renewable energy policy. I believe that our business and product, renewable natural gas, are both well positioned. First, tariffs have minimal direct impact on our business. Our network of fueling stations are located in the U.S. and Canada, and all of our R&D production facilities are located in the U.S. The vast majority of equipment and materials for our construction projects has already been procured. In fact, earlier this year, we moved compressors equipment from inventory in Canada to our facility in Wyoming as a precaution. Unlike other renewable energy supply chains, our R&D is produced, transported, and delivered to customers here in the U.S.

Speaker Change: Recent months Theres been a lot of attention on tariffs and renewable energy policy I believe that our business and product renewable natural gas are both well positioned.

Speaker Change: First tariffs have minimal direct impact on our business our network of fueling stations are located in the U S and Canada.

Speaker Change: All of our LNG production facilities are located in the U S.

Speaker Change: Vast majority of the equipment and materials for construction projects.

Speaker Change: Already been procured in fact earlier this year, we moved compressors equipment from inventory in Canada to our facility in Wyoming as a precaution.

Speaker Change: Unlike other renewable energy supply chains, our R&D has produced transported and delivered to customers here in the U S.

Andrew Littlefair: We are maintaining our full year financial outlook and CapEx guidance provided on our last call, which Bob will describe in more detail. However, we could feel some indirect impact of tariffs in that it creates uncertainty for our customers in the heavy-duty trucking sector. Potential impacts from tariffs on trucking supply chains, inflation, and economic activity may affect our customers' business planning, including purchases of all of all trucks that would include their emission reduction initiatives like replacing diesel trucks with trucks equipped with the Cummins X-15N and running on R&G. Current market dynamics may slow decision time lines for natural gas vehicle purchases, but we strongly believe any delay will be temporary.

Speaker Change: We are maintaining our full year financial outlook and Capex guidance provided on our last call, which Bob will describe in more detail.

Speaker Change: However, we could feel some indirect impact of tariffs tariffs.

Speaker Change: That it creates uncertainty for our customers in the heavy duty trucking sector.

Speaker Change: Potential impact from tariffs on trucking supply chains inflation and economic activity may have cut their customers' business planning.

Speaker Change: Including purchases at all.

Speaker Change: Of all trucks that would include the emission reduction initiatives like replacing diesel trucks with trucks equipped with a Cummins X 15 N and running on R&D current market dynamics may slow decision timelines for natural gas vehicle purchases, but we strongly believe any delay will be temporary and the mill.

Andrew Littlefair: And the merits of R&G for heavy duty trucking remain very compelling. In fact, at last week's Advanced Clean Transportation Expo, we heard many speakers comment over and over that R&G is a low carbon fuel with proven technology and infrastructure at a lower cost per mile than diesel. A parade of executives from a variety of fleets extolled the economic and environmental benefits of operating with R&G. An Amazon executive spoke about the total cost of operating their 3,000 heavy-duty trucks in R&G as well as being the only alternative available to help them achieve their climate pledge. Shippers like Unilever and carriers like Paper Transport agree.

Speaker Change: That's a R. G for heavy duty trucking remain very compelling.

Speaker Change: But at last weeks advance clean transportation Expo weird, many speakers comment over and over that R&D as a low carbon fuel with proven technology and infrastructure at a lower cost per mile than diesel.

Speaker Change: Executives from a variety of fleets extolled, the economic and environmental benefits of.

Speaker Change: Operating with R&D and Amazon Executive spoke about the total cost of operating there are 3000 heavy duty trucks in R&D as well as being the only alternative available available to help them achieve their climate pledge.

Speaker Change: Shippers like Unilever and carriers like paper transport agreed.

Andrew Littlefair: The theme was so predominant that Eric Neandros, the coordinator of the expo attended by 11,000 people, claimed that natural gas fueling was having a renaissance as the alternative that is truly viable in the heavy duty vehicle market.

Speaker Change: The theme of so predominantly there Dan Rose court with the coordinator of the Expo attended by 11000 people.

Speaker Change: Claim that natural gas fueling was that was having a renaissance as the alternative that is true viable in the heavy duty vehicle market.

Andrew Littlefair: As we said on our last call, we expect early adoption of the X-15N this year with a lot of singles versus home runs. Our station network and full suite of customer services are ideally suited to support fleets' initial purchases of trucks with the X-15N and the expansion over time.

Speaker Change: As we said on our last call. We expect early adoption of the X 15 ended this year with a lot of singles versus home runs our station network and full suite of customer services are ideally suited to support fleets initial purchases of trucks with the X 15 N and the expansion over time.

Andrew Littlefair: In addition to the opportunities in the heavy-duty trucking, our other businesses continue to We proudly serve over 69 transit agencies at 120 different sites and 175 rep-use customers at 325 different sites across the U.S. and Canada. R&G has been dependable, clean, low-cost fueling solution for those fleets for years. As an example, we completed a new R&G station for our longtime customer Burtec, a large waste company in Victoria, Victorville, pardon me, California during the first quarter to accommodate an additional 60 trucks. PROTECT also contracted with us to add 50 trucks to fuel with R&G at another station we maintain for them.

Speaker Change: In addition to the opportunities in the heavy duty trucking.

Speaker Change: Our other businesses continue to expand we proudly serve over 69 transit agencies at 120 different sites and 175 refuse customers at 325 different sites across the U S and Canada.

Speaker Change: R&D has been dependable clean low cost the only solution for those fleets fleets for years.

Speaker Change: As an example, we completed a new Orange <unk> station for a long time customer bird Tech.

Speaker Change: Large waste company in Victoria.

Pardon me, California during the first quarter to accommodate additional 60 trucks.

Speaker Change: Protect also contracted with us to add 50 trucks to fuel with R&D at another station, we maintained for them well.

Andrew Littlefair: We're also expanding our relationship with USA Hauling, signing a contract to build another private station in South Windsor, Connecticut to fuel an additional 40 CNG trucks. I told you about our success in converting existing customers from C&G to R&G. This allows the customer to dramatically and affordably reduce their carbon emissions while providing us with better margins on the fuel. Transit agencies around the country have taken the advantage of this opportunity, and recently we did this for the station we operate at, the Nashville Airport.

Speaker Change: We're also expanding our relationship with USA hauling signing a contract to build another private station in South Windsor, Connecticut to fuel an additional foreign G.

Speaker Change: 40 <unk> trucks.

Speaker Change: I told you about our success in converting existing customers from C. N G to R&D. This allows the customer to dramatically and affordably reduce their carbon emissions, while providing us.

Speaker Change: With better margins on the fuel transit agencies around the country have taken the advantage of this opportunity in a recently we did this for this station we operated the Nashville Airport.

Andrew Littlefair: These are just a few examples of developments which occurred in the first quarter, but highlighted the nature of overall business and deep customer relationships.

Speaker Change: We are just at the.

Speaker Change: These are just a few examples of developments, which occurred in the first quarter, but highlighted the nature of overall business and deep customer relationships.

Andrew Littlefair: On the federal policy front, we continue to await various outcomes.

Speaker Change: On the federal policy front, we continue to await various outcomes.

Andrew Littlefair: While the alternative fuel tax credit expired at the end of last year, the Renewable Natural Gas Incentive Act was introduced in the House in March. which, if included in the larger tax bill, could be retroactive to the beginning of the year. We are working closely with members of both houses to keep the R&G tax credit top of mind. The 45Z production tax credit is in the process of being finalized. We included a minimal amount from these credits in our Q1 results. and our 2025 financial outlook based on the initial guidance. But once the 45Z credit is finalized, it could contribute more meaningful to our results.

Speaker Change: The alternative fuel tax credit expired at the end of last year. The renewable natural gas incentive Act was introduced in the house in March.

Speaker Change: Which if included in larger tax bill could be retroactive to the beginning of the year. We are working closely with members of both houses to keep the R&D tax credit top of mind.

Speaker Change: The 45 Z production tax credit is in the process of being finalized.

Speaker Change: We continue we included a minimal amount from these credits in our Q1 result.

Speaker Change: In our 2025 financial outlook based on the initial guidance.

Speaker Change: The 45 Z credit is finalized it could contribute more meaningful to our results.

Andrew Littlefair: R&G is a common... commercial transportation. As a domestically produced biofuel that converts waste into a low-cost, low-emission transportation fuel, we believe R&G fits well with this administration's priorities. In California, the Low Carbon Fuel Standard Program updates remain in process. We expect more clarity in the coming weeks. As a reminder, these updates are expected to support higher credit prices over time, which is necessary to support growth and the low carbon fuels needed to hit California's target. Now briefly turning to our upstream dairy R&G production projects, the six projects that have been operating are doing well. And we are always working to improve production.

Speaker Change: Orange is economy.

Speaker Change: Commercial transportation.

Speaker Change: Domestically produced biofuel that converts waste into a low cost low emission transportation fuel, we believe RMG fits well with this administration's priorities.

Speaker Change: In California, the low carbon fuel standard program updates remain in process.

Speaker Change: We expect more clarity in the coming weeks.

Speaker Change: As a reminder, these updates are expected to support higher credit prices over time, which is necessary to support growth in the low carbon fuels needed to hit California's targets.

Speaker Change: Now briefly turning to our upstream dairy LNG production projects. The six projects that had been operating are doing well and we are always working to improve production. We have two others in advanced construction expected to be in service by the end of the year and evident additional projects in construction through our.

Andrew Littlefair: We have two others in advanced construction. We are expected to be in service by the end of the year and have additional projects in construction through our development arrangement with MOS Energy. with three projects likely to come online in 2026.

Speaker Change: Development arrangement with <unk> energy.

Speaker Change: With three projects likely to come online in 2026.

Andrew Littlefair: In summary, our business is performing well. We are advancing our growth initiatives and we have strong balance. We are confident in the stability and growth potential of our business and see multiple avenues for upside as some of these policy outcomes are resolved. That is why we resumed our share repurchase program in late March. We believe our shares are undervalued and this enables us to make repurchases while still maintaining ample cash to fund our growth.

Speaker Change: In summary, our business is performing well we are advancing our growth our growth initiatives and we have strong balance sheet. We are confident in the stability and growth potential of our business and see multiple avenues for upside as some of these policy outcomes are resolved.

Speaker Change: That is why we resumed our share repurchase program in late March we believe our shares are undervalued and this enables us to make repurchases while.

It's still maintaining ample cash to fund our growth.

Robert Vreeland: And with that, I will hand the call back to Bob who will give more details about our strong quarter.

Speaker Change: With that I'll hand, the call back to Bob who will give more details about our strong quarter.

Robert Brown: Thank you, Andrew. And good afternoon to everyone. And I agree, we did have a strong quarter, first quarter of 2025, with revenue of 104 million. And at face value, the 104 million is basically level with last year. And I know we have a number of variables within our revenues, but the one for sure to keep in mind this year is that we do not have the Alternative Fuel Tax Credit in our revenue number because it expired. So last year, there was $5.4 million of Alternative Fuel Tax Credit in the revenue number for 24. But in the in the quarter, we we generated good, positive operating cash flows in in the first quarter of twenty five, which actually exceeded our capital expenditures.

Speaker Change: Thank you Andrew and good afternoon to everyone and I agreed we did have a strong quarter first quarter of 2025.

Speaker Change: With revenue of 100.

Speaker Change: $4 million and that's a face value of 104 million is basically level with last year and I know, we have a number of variables within our revenues, but the one for sure to keep in mind. This year is that we are we do not have the alternative fuel tax credit.

Speaker Change: In our revenue number because it expired so last year, there was $5 $4 million of the alternative fuel tax credit in the revenue number for 'twenty four.

Speaker Change: But in the.

Speaker Change: In the quarter, we we generated good positive operating cash flows and are in the first quarter twenty-five which actually exceeded our capital expenditures. So net net as Andrew mentioned, our cash and investments balances grew from the end of last year.

Robert Brown: So net net, as Andrew mentioned, our cash and investments balances grew from the end of last year.

Robert Brown: I'll start here on our GAP earnings, and I want to address a couple items on the GAP earnings. The first item is the planned removal of the LNG station equipment from various pilot flying J-sites in 2025. We discussed this on our last earnings call and included the accelerated depreciation in our 2025 outlook. I'm just reporting here that we are proceeding as planned with that project, and most of the accelerated depreciation expense was recorded in the first quarter of 2025. The remaining accelerated depreciation will be recorded over time through the end of our lease, which is in August of this year.

Speaker Change: I'll start here on our GAAP earnings and I want to address a couple of items on the GAAP earnings. The first item is the planned removal of the LNG station equipment from various pilot flying J sites in 2025, we discussed this on our last earnings call and included the Ax.

Speaker Change: Celebrated depreciation in our 2025 outlook.

Speaker Change: Just reporting here that we are proceeding as planned with that project and most of the accelerated depreciation expense was recorded in the first quarter of.

Speaker Change: 2025, the remaining accelerated depreciation will be recorded over time through the end of our lease.

Speaker Change: Which is in August of this year.

Robert Brown: The second item is the write-off of our long-standing goodwill and tangible balance. This non-cash write-off was purely based on our share price at the end of the quarter. I've included that charge, I've added that into the GAP Outlook for 2025 since it's in the books, if you will. These two non-cash items combined amounted to $115 million of our GAAP loss of $135 million in total for the first quarter of 2025. As a side note, the values of our remaining assets are well supported by our positive cash flows and are not directly tied to our share price.

Speaker Change: Second item is the write off of our long standing goodwill intangible balance. This noncash write off was purely based on our share price at the end of the quarter.

Speaker Change: I've included that.

Speaker Change: Charge of added that into that the GAAP outlook for 2025 since it's.

Speaker Change: And the books, if you will.

Speaker Change: These two noncash items combined amounted to $115 million of our GAAP loss of $135 million in total for the first quarter of 2025.

Speaker Change: As a side note the values of our remaining assets are well supported by our positive cash flows and are not directly tied to our share price.

Robert Brown: From a non-GAP standpoint, our adjusted EBITDA for the first quarter of 2025 was $17.1 million, compared to $12.8 million a year ago. These positive results were driven by continued strength in our fuel distribution business, including an increase in delivery of R&G to fleets at our stations and to our customers, where we're also performing maintenance and services. Andrew went through the overall decline in R&G, which was very much supply-related. There was also maybe about 5 million gallons that were in the first quarter of 24 that did not repeat in 25. We've talked about these gallons that we deliver sometimes outside our network just because we're so prevalent in the R&G market.

Speaker Change: From a non-GAAP standpoint.

Speaker Change: Our adjusted EBITDA for the first quarter of 2025 was $17 1 million compared to $12 8 million a year ago. These positive results were driven by continued strength in our fuel distribution business, including an increase in delivery of RMG to fleets at our stay.

Speaker Change: <unk> and to our customers, where we're also performing maintenance and services.

Speaker Change: And Andrew went through the overall decline in R&D, which was very much supply.

Speaker Change: Related.

Speaker Change: There was also maybe about 5 million gallons that were in the first quarter of 'twenty four that did not repeat in in 'twenty five we've talked about these gallons that we deliver.

Speaker Change: Deliver sometimes outside our network just because we're so prevalent in the R&D market.

Robert Brown: I guess importantly on this, so that we're really dialed in on what's going on with the R&G is because we have such a large footprint between our suppliers and our stations and our maintenance customers, we are able to optimize the flow of the available R&G such that our stations, our customers that we're maintaining and delivering R&G are priorities. That demand, as I said, went up. We're actually up year over year in those areas, which is why, which actually did contribute as well to our positive results for the first quarter. theories that we have, our joint ventures there, they were also impacted by the cold weather, but they do remain on plan with their financial results.

Speaker Change: Importantly on this or that so that we're really dialed in on on what's going on with the R&D is because we have such a large footprint between our suppliers and our stations and our maintenance customers.

Speaker Change: We are able to optimize the flow of the available R&D.

Speaker Change: Such that our stations our customers that we're maintaining and delivering R&D.

Speaker Change: Our priorities that demand as I said went up we're actually up year over year in those areas.

Speaker Change: Which is why.

Speaker Change: Which actually did contribute as well to our positive results for the first quarter.

Speaker Change: Theories that we have our joint ventures. There. They were also impacted by the cold weather.

Speaker Change: But they do remain on plan with their financial results.

Robert Brown: And as Andrew noted, we are making good progress in the ramp up of these dairies. All in all, a good quarter for us in operations and generating cash. And we have a strong but continued caution optimism about achieving our plan for 2025.

Speaker Change: And as Andrew noted, we are making good progress in the ramp up of these dairies.

Speaker Change: All in all a good quarter for us in operations and generating cash and we have a strong but continued caution optimism about achieving our plan for 2025.

Operator: And with that, operator will open the call to questions. Thank you. At this time, if you would like to ask a question, please press Star 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing Star 2. Once again, that is Star 1 to ask a question. We will pause for just a moment to allow questions to queue. Thank you.

Speaker Change: And with that operator, we'll open the call to questions.

Speaker Change: Thank you at this time, if you would like to ask a question. Please press star one on your telephone keypad, you may remove yourself from the queue at any time by pressing star Q. Once again that is star one to ask a question, we'll pause for just a moment to allow questions to queue.

Dushyant Ailani: Our first question will come from Dushyant Ailani with Jefferies. Your line is open. Hey guys, thanks for taking my question. I think you just talked about cautioned optimism in heading a 2025 guide. Could you talk about what would take you...

Speaker Change: Thank you. Our first question will come from Vishal <unk> with Jefferies. Your line is open.

Vishal: Hey, guys. Thanks for taking my question I think you could just talk about cautioned optimism and hitting enter Anthony if I've got it could you talk quite a lot.

Vishal: Could take you to the lower end and then what could take you to the upside.

Andrew Littlefair: Well, Dushyant, let me start and Bob, feel free to, you know, let's see how this tariff shakes out relative to putting some pressure on, you know, the future outlook for people buying equipment and buying trucks. You know, we've noticed, and if you look at, you know, the numbers coming in, I mean, there has been a lowered purchasing of heavy-duty trucks in the first quarter. You know, I guess I'm an optimist, Dushyant, and believe that we're going to have more clarity on tariffs and that I think that the market will settle down and you'll see trucking companies begin to increase their purchases as sort of the underlying tariffs begin to get worked out over the course of the year.

Vishal: Well let.

Let me start and Bob.

Vishal: Feel free to two.

Vishal:

Vishal: Let's see.

Vishal: This tariff Shay.

Vishal: Shakes out relative to putting some pressure on.

Vishal: You know.

Vishal: What's your outlook for people buying equipment and buying trucks.

Vishal: We noticed.

Vishal: You look at.

Vishal: The numbers coming in I mean, there has been a lowered.

Vishal: Purchasing of heavy duty trucks in the first quarter.

Speaker Change: I'm, an optimist, Sean and believe that we're going to have more clarity on tariffs and that I think the market will settle down and you'll see you.

Vishal: Youll see trucking companies begin to incur.

Vishal: Increase their purchases as as sort of the underlying tariffs begin to get worked out over the course here. So that's number one and that will impact.

Andrew Littlefair: So that's number one, and that will impact, you know, our future outlook in terms of volume growth being contributed by the X15N, albeit most of that will end up in, you know, the very latter part of the year and in early, and in 26, as we've said. The other is 45Z, depending how that shakes out, you know, that could end up being a more meaningful number. And then, you know, on this legislation, you know, it's too early to tell, but we'll know more here in the next few months on if there's some supportive incentives like the R&G Incentive Act.

Vishal: You know our future outlook in terms of volume growth being contributed by the ex 15 in albeit most of that will end up in that.

Vishal: At the very latter part of the year and in early ended in 26 as we've said.

Vishal: It is.

Vishal: 45, Z, depending how that shakes out that could end up being a more meaningful number and then you know on this legislation.

Vishal: Uh huh.

Vishal: It's too early to tell but we'll know more here in the next few months on.

Vishal: If if there is some of supportive incentives like the <unk> incentive act all of those would be significant contributors to us.

Andrew Littlefair: All of those would be significant contributors to us. You know, we still have a very nice underlying relationship between oil and natural gas. That's been very constructive. That helps our underlying fuel business. That's contributing. But we have our eye on that oil price as well. And so I think for the most part, these things can resolve themselves in an optimistic way, Dushyant, that makes us feel comfortable.

Vishal: We still have a very nice underlying.

Vishal: Relationship between oil and natural gas thats been very constructive that helps our underlying fuel business that's contributing.

Vishal: But we have our eye on that oil price as well and so I think for the most part. These these things can resolve themselves in an optimistic way to shot dead that makes us feel comfortable now.

Andrew Littlefair: Now, you know, in the very macro market sense of what's happening with sustainability, what's happening with the effort to continue to be green for our customers, we saw this and heard this loud and clear from the ACT Conference. Our customers still want to be green, but it has to make economic sense. And, and frankly, with the framework in the Biden administration of mandates and California mandates, many of which were pushing for battery electric or hydrogen, a lot of those things have, have been frankly, are in the process of being unwound. And we believe that R&G is taking its rightful place as a common-sense economic alternative fuel.

Vishal: Macro market sense of what's happening with sustainability, what's happening with the effort to continue to be green from our customers. We saw that and heard this loud and clear from the conference our customers still want to be green, but it has to make economic sense.

And frankly with the framework.

Vishal: And the by the administration of mandates and California mandates.

Vishal: Many of which were pushing for battery electric or hydrogen a lot of those things have have been frankly are in the process of being unwound.

Vishal: And we believe that RMG is taking its rightful place as a common sense economic alternative fuel and will end up being the main competitive fuel alternative fuel low carbon fuel.

Dushyant Ailani: And we'll end up being the main competitive fuel, alternative fuel, low-carbon fuel. versus renewable diesel and diesel. And so that, that gives us great optimism. You know, we're in the shakeout phase of that, but our customers know it. Those people that went to the at conference. So that's kind of just showing how we see the remainder of the year working out. That's helpful, thank you. And then just one more, I guess...

Vishal: Versus renewable diesel and diesel fuel.

Vishal: And so that that gives us great optimism.

Speaker Change: Michel Khalaf phase of that but our customers know it those people they went to the <unk> conference note.

Speaker Change: So that's kind of just trying how is how we see the remainder of the year working out.

Speaker Change: That's helpful. Thank you and then just one more I guess.

Bob Brown: Bob and Andrew, you guys talked about it, where revenue was largely in line, you know, versus last year, despite the loss. So, you know, volume. and a little lower. So I think you touched on it briefly on price. How do we kind of think about that? I think that that was basically what supported 1Q as well.

Speaker Change: Bob and I know you guys talked about it where revenue was largely in line versus last year. Despite the loss of F. D. C. And also volume she is coming into lower so I think you touched on it briefly on pricing.

Speaker Change: How do we kind of think about that.

Speaker Change: I think that that was basically what supported <unk> as well you had some strong pricing there could you talk about how that.

Speaker Change: Shakes out for the remainder of the year.

Bob Brown: Bob, go ahead and take that one. assuming there's not a some radical change in the underlying commodity of natural gas which you know can impact our our revenues but I think we see somewhat. SteadyCase going forward on that, you know, so we won't have the AFTC, but. But we still enjoy kind of a nice spread between oil and natural gas, so that's supportive. And we are seeing, you know, we should continue to see good fleet volumes and our, you know, maintenance deals as we did in Q1. So I think that should. mean that the revenue number will be kind of in line.

Bob: Bob go ahead and take that one.

Bob: Okay I think.

Sean: Sean I think.

Bob: It would.

Bob: At least the way we see it as it would say it would shake out kind of similarly, the remaining quarters as we are.

Bob: I'm, assuming there's not.

Bob: Some radical change in the underlying commodity of natural gas, which can.

Bob: Can impact our.

Bob: Revenues, but.

Bob: I think we see somewhat.

Bob: Steady case going forward.

Bob: Matt.

Bob: So we won't have the FTC, but.

Bob: But we have we still enjoy kind of a nice spread between.

Bob: Oil natural gas, so that supportive and and we are and we are seeing we should continue to see good.

Bob: Sweet volumes and our.

Bob: Maintenance deals as we did in Q1, so I think.

Bob: That should.

I mean, that's a revenue number will be kind of in line.

Bob Brown: with where we were in Q1.

Bob: But with where we were in Q1.

Bob: Got it thank you.

Operator: Thank you.

Speaker Change: Thank you. Our next question comes from Eric Stine with Craig Hallum. Your line is open.

Eric Stine: Our next question comes from Eric Stine with Craig Hallam. Your line is open. Hi, Andrew. Hi, Bob. Hey, Eric. Hey. So, you mentioned ACT, and I was out there, obviously. One thing I heard kind of loud and clear, obviously a lot of interest, excitement in the X15N, but arguably it is behind schedule versus what Cummins was expecting and others. And I was just hearing a lot about incremental cost. And I know that, to this point, you've got PACCAR in the market, and Freightliner just opened their order book. You know, curious, your thoughts on maybe the impact that that has, where incremental costs for the X15N, or trucks with the X15N, have been, and what that trend looks like going forward.

Eric Stine: Hi, Andrew Hey, Bob.

Eric Stine: Hey, So you mentioned act and I was out there obviously.

Eric Stine: One thing I heard kind of loud and clear obviously a lot of intra.

Eric Stine: Interest excitement in the next 15 in but arguably it is behind schedule versus what Cummins was expecting and others.

Eric Stine: And I was just hearing a lot about incremental costs and I know that to this point, you've got packer and the market and Freightliner just opened their order book.

Eric Stine: Curious your thoughts on maybe the impact that that has were incremental costs for the X 15, NR trucks with the F 15, and have been and what that trend looks like going forward.

Andrew Littlefair: Eric, you know, I want to be careful to air all the dirty laundry with my friends on truck pricing, but I think I've said it before, which is that as those early trucks, the X-15N were launched into the market, latter part of last year, you know, we just, it's no secret, the incremental price was just a bit too high. And by the time you move that from the engine cost and the, you know, and I think, frankly, in line fuel system costs, and then you, you know, you put the OEM markup on it and the dealer markup on it, I think people got a tad bit carried away.

Eric Stine: Yes.

Eric Stine: Be careful the era of the.

Eric Stine: The dirty laundry room my friends.

Eric Stine: On the <unk>.

Eric Stine: Truck pricing, but I think I've said, it before which is that as those.

Eric Stine: Early trucks the F 15, and were launched into the market.

Eric Stine: Latter part of last year.

Eric Stine: It's no secret the incremental price was just a bit too high and by the time you move that from the engine cost and the.

Eric Stine: And I think frankly in wine.

Eric Stine: Your system costs, and then you put the OEM mark up on it and the dealer Mark up on it I think people got a tad bit carried away.

Andrew Littlefair: You know, at one point, a very powerful dealer said, Well, it's still half the price of the incremental cost of an electric truck. And I said, Well, you know, wait a minute, we don't compete with electric truck, we compete with a diesel truck. So we work very hard with Cummins, we have a program with Cummins that was joined in by the fuel system folks. and frankly, and with our friends at PACCAR to reduce that from as much as $110,000 incremental price to something that's, you know, on the way toward $80,000 incremental price or so. You know, what we found, Eric, that an incremental price at around $75,000 to $80,000 With an aggressive but doable fuel price, certainly for us with, you know, with our network, and our ability to supply R&G, you can get the total cost of ownership for the fleet where it needs to be.

Eric Stine: Yeah.

Eric Stine: You know at one point, a very powerful dealer said well, it's still at the price of the incremental cost of an electric truck and I said well wait a minute we don't compete with electric truck, we compete with a diesel truck.

Eric Stine: So we worked very hard with Cummins, we have a program with comments that was joined in by the fuel system folks.

Eric Stine: And frankly and with our friends at Pac are.

Eric Stine: To reduce that as much as $110000 of incremental price to something thats.

Eric Stine: On the way toward $80000 incremental price or so.

Eric Stine: What we found Eric that incremental price at around $75 to $80.

Eric Stine: With an aggressive but doable fuel price certainly for us with.

Eric Stine: With our network and our ability to supply LNG.

Eric Stine: You can get the total cost of ownership for the fleet.

Andrew Littlefair: That is, you can get a fleet somewhere around the two to two and a half year payback. And that's enough to start the discussion of get them to then put in for ordering.

Eric Stine: Where it needs to be that is you can get a fleet somewhere around the two to two and a half year payback and that's enough to start the discussion I would get them to then put in for ordering now there is some good news here. The Freightliner as you mentioned our product has come to market.

Andrew Littlefair: Now, there's some good news here. The the freight liner, as you mentioned, a product has come to market, they have a little bit lower price point overall. And I think competition is a good thing. So that we have seen some initial orders go in for the freight liner, that price is lower. So I think, you know, we're on our way toward where we want to be. I think over time, it's it's it's clear that if we can get to something closer to 6000 units a year, you can drive somewhere between 15 to 20% out of the fuel system cost, too.

Eric Stine: Little bit lower price point overall, and I think competition is a good thing so.

Eric Stine: We have seen some initial orders go in further freightliner that price is lower so I think we're all.

Eric Stine: On our way toward where we wanted to be I think over time it's.

Eric Stine: It's clear that if we can get to something closer to 6000 units a year you can drive.

Eric Stine: Somewhere between 15% to 20% out of the fuel system costs too so.

Eric Stine: So, you know, we're at early stages, incremental has been a little high at the initial launch, it is coming down. And so I feel like it's headed in the right direction. To get to where we need Got it. Good color there.

Eric Stine: Early stages incremental has been a little high at the initial.

Eric Stine: Launch.

Eric Stine: It is coming down and so I feel like I said it in the right direction.

Eric Stine: To get to where we need to be.

Eric Stine: Got it good color there and.

Eric Stine: And maybe, you know, you just were talking about kind of the overall environment versus battery and, I guess, fuel cells way out in the realization. And obviously, the customers are saying that pretty loud and clear. But just curious, I mean, from a policy standpoint, I know in California, always enamored with battery electric fuel cells, et cetera, and not really RNG in this current environment. Do you see a situation where, I mean, you could, I guess you don't necessarily need to have a benefit versus those, but at least on equal footing. Well, you know, Eric, look, it's kind of tricky right now to go through all the, bore everybody to tears.

Eric Stine: And maybe.

Eric Stine: You just were talking about.

Eric Stine: Kind of the overall environment versus battery.

Eric Stine: And I guess fuel cell's way out.

Eric Stine: The realization and obviously the customers are saying that pretty loud and clear, but just curious I mean from a policy standpoint, I know in California always enamored with battery electric fuel cells et cetera, and not really RMG. In this current environment do you see a situation where I mean, you could I guess.

Eric Stine: You don't necessarily need to have a benefit versus those but at least on equal footing.

Eric Stine: Well, yeah, well I guess.

Eric Stine: Yes, it's kind of tricky right now to go through all the bore everybody to tiers, but you know that the California.

Andrew Littlefair: But, you know, the California ACF, that is the fleet rules that they put in place, that is... They're gone. and the manufacturer side, which required manufacturers to sell 10% batteries, that thing, as you probably well know, the Congress voted to clear those out. Those policies and the omnibus rule. Now the Senate hasn't taken up that CRA action yet. There's question whether or not they will, but I have a feeling that they might. There's some question of whether or not the parliamentarian would think that's appropriate. But there's no doubt, we are working with CARB, that their program is a mess.

Eric Stine: ACS that is the fleet rules that they put in place that is.

Eric Stine: Those are gone.

Eric Stine: And the D.

Eric Stine: The manufacturer side, which required manufacturers too.

Eric Stine: Oh man.

Eric Stine: Fell 10% battery that thing.

Eric Stine: As you probably well know.

Eric Stine: Congress voted to to call those out.

Eric Stine: Those policies and the omnibus rule now the Senate hasn't taken up the CRA action yet there is question of whether or not they will but I have a feeling that they might.

Eric Stine: Some question of whether or not the parliamentarian.

Eric Stine: That's appropriate.

Eric Stine: But there's no doubt we're working with carb.

Eric Stine: Our program is is.

Eric Stine: Yes.

Andrew Littlefair: And what's happening right now, when people can't buy an electric or won't buy an electric, and there is no requirement anymore, they're buying diesel, they're buying older diesel vehicles. So CARB understands that this is not good. We are working with CARB and feel like it makes great sense that R&G should, once again, or should be a compliant fuel. And so it's not done yet. There are discussions that are underway. It's different from where, you know, in their crystal ball, in their, you know, in their, you know, in their, you know, sort of theology where they wanted to be.

Eric Stine: And.

Speaker Change: What's happening right now when people can't buy an electric or electric.

Speaker Change: Electric and there is no requirement anymore, they're buying diesel they're buying older diesel vehicles.

Speaker Change: So cause I understand this is that that is not good.

Speaker Change: We're working with carb.

Speaker Change: Feel like it makes great sense that.

Speaker Change: R&D should once again or should be a compliant fuel and so it's not done yet.

Speaker Change: The discussions that are underway.

Speaker Change: It's different.

Speaker Change: And their crystal ball in the end.

Speaker Change: Sure.

Speaker Change: Sort of theology, where they wanted to be but with the electric doesn't get it made on light duty. It doesn't on the heavy duty there isn't the electricity cost as to why the experience is not right and the customers werent they weren't going to do it and that's.

Andrew Littlefair: But look, the electric doesn't get it. It might on light duty, it doesn't on the heavy duty. There isn't the electricity, the cost is too high, the experience is not right, and the customers weren't gonna do it. And that's, and so it's been a fiasco, frankly. About 11 of the states that adopted the carb policies have all backed water on it. So I think that if you want clean air, 90% less NOx, and you want lower carbon, R&G will rise to the surface. And we're seeing that now. Those are the discussions that we're having with the policymakers, frankly, at the federal level as well as at the state level.

Speaker Change: So it's been a fiasco frankly.

Speaker Change: About 11 of the states that have adopted the carb policies are bought back water on it.

Speaker Change: So I think that.

Speaker Change: But if you want clean air 90% less Nox and you want lower carbon orange will rise.

Speaker Change: To the to the surface and we're seeing that now those are the discussions or wherever with the policymakers frankly at the federal level as well as at the state level.

Operator: Okay, thanks. Thank you.

Speaker Change: Okay. Thanks.

Speaker Change: Yep.

Rob Brown: Our next question comes from Rob Brown with Lake Street Capital Markets. Your line is open. Good afternoon. I just wanted to dive in a little bit to the R&G facilities, sort of where you're at in terms of getting those open and running in general. Well, you know, one of them has been open a while, Rob, and it's producing pretty well, and we're steadily increasing the production. So we, we know there's, we know there's hope, right? We know that through good operations, you can increase them, get them close, closer, not quite there yet to nameplate. That's our Del Rio facility.

Speaker Change: Thank you. Our next question comes from Rob Brown with Lake Street Capital markets. Your line is open.

Rob Brown: Good afternoon.

Rob Brown: Just wanted to dive in a little bit to the LNG facilities are sort of where you're at in terms of getting those open and running and generating cash.

Rob Brown: EBITDA.

Rob Brown: Based on the on the timeline there.

Rob Brown: Well you know what it's.

Rob Brown: It's been open a while robin, it's producing pretty well and we're steadily increasing the production. So we know there's we know theres all right we know that.

Rob Brown: Through good operations, you can increase them get them close closer than are quite there yet to nameplate. That's our del real facility. The other five we have are a little bit behind that trajectory. We had one bad weather problem with one of them, but they're all now.

Andrew Littlefair: The other five we have are a little bit behind that trajectory. We have one bad weather problem with one of them, but they're all now, you know, in production. Albeit, you know, not quite to the levels that we want yet, but by the end of the year, we like to think that they're going to be, you know, 80% of where we thought they should, you know, kind of in that range. So they're making nice headway. We're making, you know, we're making some tinkering with our operators there, and we like the way that's going. Two more should be, you know, sort of on production toward the end of this year, late.

Rob Brown: In production.

Rob Brown: Albeit not quite to the levels that we want yet but by the end of the year, we like to think that they're going to be.

Rob Brown: 80% of where we thought they should.

Rob Brown: Kind of.

Rob Brown: It's in that range, so theyre, making nice headway, we're making.

Rob Brown: We're making some tinkering with our operators there and we like the way that's going to more or should be.

Rob Brown: On.

Rob Brown:

Rob Brown: Production towards the end of this year late.

Andrew Littlefair: And we're making very nice headway at our South Fork Dairy that's in the Texas Panhandle. And we're making good progress, though I don't know it'll be late in the year, but our big Idaho facility as well. And then our relationship with Moss, as I mentioned in my remarks, those come on a little later. But there, Daryl Moss is a great operator, a great developer, and those projects are underway. So these projects still take a little longer than all of us would like. Certainly the pathway process is cumbersome and slow, though in a conversation with the chairwoman of CARB the other day, she said help is on the way, that more staff are being brought in to deal with the backlog of pathways.

Rob Brown: And we're making very nice headway at our South Fork.

Rob Brown: Dairy that's in the Texas Panhandle, and we're making good progress, though I don't know it'll be it'll be late in the year, but our our big Idaho facility as well and then.

Rob Brown: Our relationship with Mas.

Rob Brown: in my remarks, those come on a little later, but Derrick Moss is a great operator and great developer, and those projects are underway. So,

Rob Brown: These projects still take a little longer than all of us would like, certainly in the pathway.

Um, process is cumbersome and slow, though on in a conversation

Rob Brown: with the chairwoman of CARB the other day. She said help is on the way, that more staff are being brought in to deal with the backlog of pathways. So, you know, we like to think that that'll help us, because some of these have just taken too long.

Andrew Littlefair: So we like to think that that'll help us, because some of these have just taken too long to certify the pathway. But it looks like some help's on the way.

Andrew Littlefair: By the way, Rob, if I can use this to answer your question, one of the other things from our first question on Dushyant, we think you're going to be through the. final stages of cleaning up the administrative problems that CARB had with the, you know, moving forward on their new program, and I think that should get done here by late May, and so that would mean that you'll begin to move forward. And that should work off, over time, work off the credit oversupply that we see in California, and that should lead, you know, later this year and early next year to a strengthening of the low-carbon fuel credit prices.

Rob Brown: You know, moving forward on their new program and think that should get done here by late May and so that that would mean that that you'll begin to move forward. And that should work off over time, work off.

Andrew Littlefair: Okay, great. Thank you for all the color there. And then, and then as you think about the current environment, and how, if at all, does that change your CapEx plans for, for this year? Are you, you know, potentially slowing that at all? Or are you, are you just maintaining the plan? No, we're being cautious on the R&D side. We've said we've looked at a lot of projects. We've looked at some some opportunities to to perhaps purchase some R&D projects that we're you know, that are being very are very close. We're being very careful with looking at that.

Speaker Change: Okay, great. Thank you for all the color there. And then, and then as you think about the current environment and how if it all does that change your CapEx plans for for this year, are you, you know, potentially slowing that at all or are you, are you just maintaining the plan as before?

Speaker Change: No, they're being cautious on the R&G, so we've said we've looked at a lot of projects, we've looked at some some opportunities to perhaps purchase some R&G projects that well you know they're being very are very close

Andrew Littlefair: And so, you know, I think it's, we kind of have, we have the projects that we're currently developing on RNG funded. We don't see any increases to that right now. We want to get the ones done that we, that we have, you know, we're, we're in a nice position in that we have 90 or so on the way toward 100 with new contracts that aren't, we're not taking supply yet. We have 100 different suppliers of RNG. So we're in a unique position to have a lot of supply. We have a very nice relationship, joint marketing relationship with BP.

Speaker Change: And so, you know, I think it's we kind of have, we have the projects that we're currently developing on R&G funded.

Andrew Littlefair: So we have a lot of supply that's available. We like our position on the six projects, you know, that we, we've got, and the, and the new ones that'll come on. On the, on the station side, I could see that we might, Not because we've put the brakes on, that we might be a little bit lighter on CapEx, just on some of the projects that tend to get permitted and this and that. It's my hope, though, that as you start seeing some of these really big fleets begin to look at taking more X-15s and beginning to, if you will, do what Amazon did and start asking us to, later this year, early next year, you're going to need some CapEx to build out Of course, that's a very nice thing and a very good thing.

Speaker Change: We have a very nice relationship, joint marketing relationship with BP so we have a lot of supply that's available. We like our position on the six projects that we've got and the new ones that will come on.

On the on the station side, I could see that we might

Speaker Change: Not because we've put the brakes on, that we might be a little bit lighter on CapEx, just on some of projects tend to get permitting this now.

Speaker Change: You know, if you will, do what Amazon did and start asking us to, you know...

Operator: We're very happy. We'll be very happy if we need to do that, but I would say for the year, Rob, it should come in about what we've said and maybe a bit lighter, a bit lighter, but not because we're worried about the future, just because of the way the things are. We're wanting to be careful and be prudent, but just because the way you know, these things sometimes take a little longer to come online than you might think. Great, thank you. I'll turn it over. Thank you.

Robert, it should come in about what we've said. And...

Speaker Change: You know, maybe a bit lighter, a bit lighter, but not because we're worried about the future just because it's kind of the way the things are, we're wanting to be careful and be prudent but just because the way we, you know, we, these things sometimes take a little longer to come online than you might think.

Great, thank you. I'll turn it over.

Derrick Whitfield: Our next question comes from Derrick Whitfield with Texas Capital. Your line is open. Good afternoon, all, and thanks for your time. Hi, Derrick.

Speaker Change: Thank you. Our next question comes from Derrick Whitfield with Texas Capital. Your line is open.

Good afternoon, all, and thanks for your time.

Andrew Littlefair: Andrew, I wanted to follow up, Andrew, on your CARB commentary, just to make sure I'm clear on your understanding of how it's progressing. I mean, clearly this has been far from a straight line, but as you think about where CARB is today, do you think they're gonna have final policy in place by June and do you know if they intend to retroactively apply that policy across the first half of 2025? You know, you're right. It's not really a straight line. And I've kind of been wrong on timing a little bit, you know, because it's hard to predict what's going on.

Speaker Change: Hi, Derrick. Andrew, I wanted to follow up Andrew on your car commentary just to make sure I'm clear on your understanding of how it's progressing.

Speaker Change: I mean, clearly this has been far from a straight line, but if you think about what Parviz today, do you think they're going to have final policy in place by June ? And do you know if they intend to retroactively apply that policy across the first half of 2025? Yes, I do.

You know, uh...

Speaker Change: You're right, it's not really a straight line and I've kind of been...

Andrew Littlefair: I'm told and we think and CARB staff believes that it should be that it should be done by June, June 1st, and that therefore it'll be retroactive. Now, you know, if it doesn't make the June 1st, then there's a question whether or not that they can. So, but in conversations with senior members of CARB, we've been told that they think that it should. And it looks like through the comment period that I think already came and went on the OPL issue, I think, you know, fingers crossed, looks like that's kind of headed in the right direction.

Speaker Change: and Carbstaff believes that it should be done by June 1st, and therefore it will be retroactive.

Speaker Change: that it should. And it looks like through the comment period that I think already came and went on the OPL issue. I think, you know, fingers crossed, looks like that's kind of ahead in the right direction.

Derrick Whitfield: All right, so fingers crossed there.

Derrick Whitfield: Maybe staying with you on the policy front, I'd love to get a feel for the support you're hearing from your discussions in D.C., maybe beginning with the RENs. We've heard throughout earnings there's been a constructive dialogue between ag and the refining sector on the future of biofuels policy. And while I've heard this could lead to a 5.25 billion gallon RDO for biobased diesels in 2026, we haven't heard that much in the cellulosic category. So, setting aside the exemption commentary from last November, do you guys have a view on where the EPA may land on the RVO for the cellulosic category?

Speaker Change: Alright, so fingers crossed there. Maybe staying with you on the policy front. I'd love to get...

Speaker Change: A bill for the support you're you're hearing from your discussions in BC.

Speaker Change: And while I've heard this could lead to a 5.25 billion gallon arduous for bio-based devils in 2026, we haven't heard that much in the cellulosa category.

Speaker Change: So, setting aside the exemption commentary from last November , do you guys have a view on where the GPA may land on the RVO for the cellulosis category?

Andrew Littlefair: A quick answer is no, we don't. And it wouldn't be right to say that we're having in-depth engagement. We are engaging as an industry. We have participated in some meetings on that. I feel like the administration understands the balance here, understands what's necessary to have a vibrant RFS program, but yet they're pulled in several directions. But you know, one of the things I think is constructive is that the Trump administration seems to understand that we are a biofuel, that R&G cellulosic is from the farm, and it is... not to be overly political, but it is a red state fuel and it is a biofuel.

Speaker Change: The quick answer is no, how we don't. And it wouldn't be right to say that we are having, you know, in-depth engagement. We are engaging as an industry. We have had participated in some meetings on that.

Speaker Change: What's necessary to have a vibrant RFS program, but yet they're pulled in several directions but you know...

Speaker Change: Not to be overly political but it is a red state fuel and it is a bio fuel so you know there's a lot of things we're weighing here but we feel like they'll be constructive

Derrick Whitfield: So, you know, there's a lot of things we're weighing here, but we feel like they'll be constructive. But, you know, that's about as far as we can go. We haven't heard any numbers on that. I haven't, anyway.

Speaker Change: But, you know, that's about as far as we can go. We haven't earned any numbers on that. I haven't, anyway.

Operator: Terrific, I'll leave it there. Thanks for your time. Thank you.

Terrific, I'll leave it there. Thanks for your time.

Matthew Blair: Our next question comes from Matthew Blair with TPH. Your line is open. Great, thank you and good afternoon. I was hoping to dig in a little bit more on the strong results in the first quarter.

Good luck.

Speaker Change: Thank you. Our next question comes from Matthew Blair with TPH. Your line is open.

Matthew Blair: Great, thank you and good afternoon. I was hoping to dig in a little bit more on the strong results in the first quarter. Your R&G volumes came in lower than our modeling, and your written revenue was also lower, and maybe those two things are connected. Thank you very much.

Bob Brown: Your RNG volumes came in lower than our modeling and your RIN revenue was also lower, and maybe those two things are connected, but what would you attribute the strong results to? Seasonally Q1 can also be a little soft and there's tough weather in certain parts of the country. So was this just better core fueling margins due to a healthy oil-to-gas spread, or what really pushed things up? And was there anything that was pulled forward into Q1 that really should have been part of Q2? Thank you. Yeah. Yeah, I know. I think you kind of hit it there.

Matthew Blair: What would you attribute the strong results to, you know, seasonally key one can also be a little soft and, you know, there's tough weather in certain parts of the country. So was this just better core?

Thank you.

Matthew Blair: Yeah, I think you kind of hit it there just the kind of the core fueling.

Bob Brown: Just the kind of the core fueling. The core fueling and, you know, effectively just what our effective pricing and from that, from our stations is what was driving that. The RIN, the lower RIN was connected to the supply and the lower volumes there, but. You know, we had actually a pretty strong showing of low carbon fuel going into California. So the LCFS actually did, you know, probably better than expected there because that pricing remained under where we had pegged it, you know, ultimately to pan out for the year. So it is the, your kind of underlying base business fueling and.

Matthew Blair: The lower rim was connected to the supply and the lower volume is there but

Matthew Blair: You know, we had actually a pretty strong showing low carbon fuel going into California, so the LCFS actually did, you know, probably better than expected there because

Matthew Blair: That pricing remained under where we had paid it, you know, ultimately to to pan out for the year. So it is the you're kind of underlying based business feeling and

Bob Brown: you know, we're seeing. It's kind of the effect that we've talked about before, too, with this, is that You know, we get a gradual incremental increase, incremental flow of volume, just because as fleets bring on trucks during the year, then it's all additive. And so that's just kind of progressing through. Pricing remained good. The spread was good. you know, were opportunistic with. with, you know, are basically how we source, you know, we're good at sourcing cheap, you know, natural gas, which is feedstock into this too. So all that combined, you know, we're big players, but we've got some leverage there on all that front.

You know, we're seeing...

Matthew Blair: It's kind of the effect that we've talked about before, too, with this is that

Matthew Blair: As fleets bring on trucks during the year then it's all additive and so that's just kind of progressing through price and remained good the spread was good and

You know, we're opportunistic with

with the...

Matthew Blair: You know, are basically how we source, you know, we're good at sourcing cheap, you know, natural gas, which is feed stock into this too. So all that combined, you know, we're big players, but we've got some leverage there on all that front.

Bob Brown: You know, one other thing, Bob, that I would add is, you know, trucking is good, right? The Amazon stations are open and running well, and trucking volumes looking pretty good. So that all contributed with the underlying fuel business was strong. Do you think, is part of it due to a tightening dispensing market? You know, we're hearing from upstream R&G players that it's increasingly tough to place their volumes in the transportation market. The dispensing side is getting tighter and tighter, and the rates are going up. Is that playing a role as well? Starting to. Yep, starting.

Matthew Blair: You know, one other thing that I would add is, you know, trucking was good, right? The Amazon stations are open and running well and trucking volumes looking pretty good, so that our contributed with the underlying fuel business was strong.

Matthew Blair: Do you think it is part of it due to a tightening, dispensing market, you know we're hearing from

Matthew Blair: from upstream R&G players that it's increasingly tough to place their volumes in the transportation market, the dispensing side is getting tighter and tighter and that the rates are going up. Is that plan a role as well?

Bob Brown: We're seeing that. Go ahead, Bill. Yeah, no, I was just going to say it. Yeah, we are seeing that. I'm not going to say a wholesale that. But yeah, we're certainly in a good... kind of negotiating position there is that the nozzle tips are valuable. Great, thanks for your comments. Thank you.

Starting to...

Yep, starting. We're seeing that.

Go ahead, Bob.

Matthew Blair: Yeah, we are seeing that. I'm not going to say a wholesale that, um. [inaudible]

Matthew Blair: But yeah, we're certainly in a good kind of negotiating position there, so the nozzle tips are valuable.

Great, thanks for your comments.

Uh-huh.

Sonia Yan: Our next question comes from Sonia Yan with UBS. Your line is open. Hi, do you guys see any volumes from the transportation sector, you know, maybe going towards power generation or any update on the data center front? How are you guys looking at that going forward?

Speaker Change: Thank you. Our next question comes from Sanya Jan with UBS. Your line is open.

Sonya Yan: Hi, do you guys see any volumes from the transportation sector? You know, maybe going towards power generation or any update on the data center front? How are you by looking at that going?

Andrew Littlefair: You know, let me start. You know, I think my number is right. 80% of the R&G goes into transportation, and it's the best market. That's what Matthew was getting at, is that it's tight, supply wants to find its way to transportation while we're in an enviable position at the nozzle tip. You know, of course, some R&G will make its way into power gen. We have not heard of any significant that I'm aware of, though I thought it would be eventually. I imagined that R&G would be such a beautiful and relatively effective and easy way to decarbonize AI power generation, right?

You know let me start

Sonya Yan: You know, I think my number is right, 80% of the RNG goes into transportation, and it's the best market.

Sonya Yan: That's what Matthew was getting at. It's tight. Supply wants to find its way to transportation is why we're in an enviable position at the nozzle tip.

Sonya Yan: You know, of course some R&G will make its way in the power jane [inaudible]

Speaker Change: Relatively effective and easy way to decarbonize AI power generation, right? When I started hearing that we're going to open up three mile island and build nuclear power plants, I thought to myself, my God, we got to have a better solution than that.

Andrew Littlefair: When I started hearing that we're going to open up Three Mile Island and build nuclear power plants, I thought to myself, my God, we got to have a better solution than that. So I don't want to say it'll never go into those markets, because I'm a believer in that it ought to go and should go into the market where it's the hard decarbonized market, which is the heavy-duty trucking sector, which is, you know, remember, 40 billion gallons of fuel is used in that sector. And this is where R&G should go. And so still, it's about 80%.

Speaker Change: So, I don't want to say it'll never go into those markets.

Speaker Change: because I'm a believer in that it ought to go and should go into the market was the hard to carbonize market which is the heavy duty trucking sector which is, you know, remember 40 billion gallons of fuels used in that sector.

and this is where R&G should go.

Andrew Littlefair: We hear of different things. I think some of the regulatory some of the Washington and regulatory push to force utilities to use renewable sources and some of what we saw over the last couple of years, my guess is some of that will take a breather.

Speaker Change: And so still, it's about 80 percent. We hear of different things. I think some of the regulatory

Speaker Change: Washington and regulatory push to force utilities to use renewable sources and some of what we saw over the last couple years. My guess is some of that will take a breather.

Sonia Yan: And I think it will make vegetation that much more important. Got it, thanks.

Speaker Change: and I think it will make vegetation that much more important.

Andrew Littlefair: And then, could you give some updates on your partnerships with... B.P. Sheffron, how are they progressing, what's the outlook on those types of oil companies? You know, Total is still our largest shareholder. They're our partner in the our first R&G project. We have a very robust and ongoing and deep relationship with BP. took what we call a co-marketing agreement where we worked together on R&G. When those Archaea volumes were, if they were to go to transportation, we'd be involved with them on that. So we're very excited about the future of that. So we continue to work with BP's R&G partner on those development projects, the other five, and the other two that I talked about at length, there's one in Idaho and South Fork and one in Texas.

Speaker Change: Got it, thanks. And then could you give some updates on your partnerships with T'Chall, B.P. Chef on how are they progressing or is the outlook on those types of oil companies?

Speaker Change: There are a partner in our first R&G project. We have a very robust and ongoing and deep relationship with the B.P. We call it a co-marketing agreement where we work together on R&G.

Speaker Change: When those archaea volumes were, if they were to go to transportation, we'd be involved with them on this. We're very excited about the future of that.

Speaker Change: so we continue to work with DPs, our R&G partner.

on those development projects.

Speaker Change: The other five, and the other two that I talked about in the length of the 1-0 and 1-0.

Andrew Littlefair: So we're very, have a deep relationship with them.

Speaker Change: South Korea, one in Texas, so we're very, have a deeper relationship with them. Shere Brown.

Craig Shere: Chevron. Because the electric truck push, hydrogen truck push, reality is sinking in, we're starting to see a renewed interest in our California R&G Chevron program that has fielded upwards of 350 trucks and put on the road, funded and put on the road to fuel with R&G. So we've always liked that program on Chevron and we continue to work with them. So that's kind of the status of those three relationships, partnerships. Got it, thank you. Thank you.

Speaker Change: Because the electric truck push, hydrogen truck push, we're all really sinking in, we're starting to see a renewed interest in our California RNG Chevron program.

Speaker Change: and put on the road, funded, and put on the road to fuel with R&G. So we've always liked that program on Sherevan and we continue to work with them. So that's kind of the status of those three relationships, partnerships.

All right, thank you.

Robert Brown: Our next question comes from Craig Shere with TUI Brothers. Your line is open. Good afternoon. Thanks for taking the questions. So, I'm sorry, did you specify anywhere exactly how much 45Z was in the corridor? It was a... No, we didn't. It was not. It was really not material, if you will. We didn't specify. Okay, um... So, I mean, as far as what that could be, if after that gets finalized, I mean... Could you see that competing with, you know, say current LCFS run rates that you've been seeing? as far as quarterly contributions. I mean, you know, Craig, it's all it's kind of it's all in the detail there, right?

Speaker Change: Thank you. Our next question comes from Craig Shere with Toei Brothers. Your line is open.

Good afternoon. Thanks for taking the questions. Thank you.

Speaker Change: So I'm sorry, did you specify anywhere? Exactly how much 45Z was in the quarter?

Speaker Change: It was a, no, we didn't. It was, it was not.

It was really not material, if you will, so.

We didn't specify it.

Okay.

Speaker Change: So, I mean, as far as what that could be, after that gets finalized, I mean...

Speaker Change: Could you see that competing with, you know, state current LCF run rates that you've been saying?

As far as quarterly contributions [inaudible]

Speaker Change: I mean, Craig, it's all in the detail there, right? I mean...

Robert Brown: I mean, you remember the heady days of saying that on a group with a with an active, correct GREET model with a minus three hundred and thirty five. You remember our friend said that it could be worth seven dollars a gallon. And, you know, you run all that out. Sure. It would be a very strong contributor. Those discussions are underway. Just what how will that be measured? What if the Congress chooses to keep 45Z in, will they use a GREET model? Will they specify different CI scores for different various types of manure? And just where does that come down?

You remember the headache days of saying that on a…

Speaker Change: With an active, correct, Greek model, with a minus 335, you remember our friend said that it could be worth $7 a gallon, and you know, you run all that out, sure, it would be a very strong contributor.

Speaker Change: What, if the Congress chooses to keep 45z in, will they use a group model, will they specify different CI scores for different various types of manure, and just where does that come down? Is there an end of being where it is today?

Robert Brown: Does it end up being where it is today? $0.90 or $1 less the energy, do you get some credit for having a low-carbon R&G, in which case it would be more meaningful, you know, at $2 or $3 or $4? or does it go way up the scale? So, it kind of depends on where that comes out. And look, you've got sort of parallel tracks working, right? You have a final rule that a new Treasury Department's working on. I talked on this very subject matter about a Greek model and how it was corrupted by the Biden administration.

Speaker Change: Does it, does it, do you get some credit for having a low carbon RNG in which case it would, it would be more meaningful, you know, two or three four bucks?

Speaker Change: Or does it go way up the scale? So it kind of depends on where that comes out and what you've got...

Speaker Change: You've got sort of parallel tracks working, right? You have a final rule that a new Treasury Department's working on. I talked on this very subject matter about a Greek model and how it was corrupted by the Biden administration.

Robert Brown: It's really a shame that you take science and you made it political, and you put a bogus Greek model in that final temporary rule five days before the inauguration. And that's what we're trying to, the industry's trying to deal with. And just what does Congress want to do? And what does it cost? So, those are all, you know, it's sort of wild on how that's all going to shake out. I think there's a body of the Congress that understands. 45Z, and wants it in. They're trying to wrestle with just how they fix it, and should they fix it, and what does that mean to the ethanol guys and the biofuel guys, and what does it mean to the RNG methane guys like us?

Speaker Change: five days before the inauguration and that's what we're trying to doubt the industry is trying to deal with and just let this Congress want to do it and what is it cost? So those are all, you know, it's sort of wild on how that's all going to shake up.

45Z, and wants it in.

Robert Brown: So, that's what's being dealt with, but if anybody were to tell you today, you know, that they know exactly how that's gonna pan out, it's not quite right. Though I feel like... If I was a betting person, I'm thinking that there probably will be a 45Z. and that it is probably. likely to be better than where it sits right at this moment. Gotcha.

Speaker Change: If I was a betting person, I'm thinking that there probably will be a 45Z.

Speaker Change: likely to be better than words it's right at this moment.

Andrew Littlefair: And on Rob's question for the upstream, do you have a timeline to get to systemically positive upstream numbers, Ibada, there? I know you had one facility, a large facility that you were expensing the development of. So when that comes on, it should flip pretty quick, right? Oh, I don't know if it would flip pretty quick, but the. But certainly the projects that, you know, we have one that's been operating for a while that, you know, that'll, that'll contribute even It is the other five will next year, but then you've got two big, you have two big projects coming online, you know, kind of right at the beginning of the year that are going to go through kind of that OPEC.

Katja, Ann Bums,

Speaker Change: So when that comes on, it should flip pretty quick, right?

Speaker Change: Well, I don't know, it would flip pretty quick, but the...

Speaker Change: That's certainly the projects that, you know, we have one that's

Speaker Change: It is, the other five will next year but then you've got two big projects coming online you know, kind of right at the beginning of the year that are going to go through kind of that up back. So

Andrew Littlefair: You know, individually, these These dairies are going to contribute to EBITDA, and many of them will in 26, absolutely, whether that's going to... net to an overall positive as we do our guidance and we kind of have our upstream and our distribution. That, that we'll have to see how that, you know, how that pencils out once we have them all operating just because we have some, you know, we have a 37,000 cow dairy that's going to come online as you know and. So, but they'll get to, I mean, at least what we're seeing is there would be appropriate yield on the manure and the CI, you know, the methane content.

You know, individually.

Speaker Change: These Derries are going to contribute to Evidon, and many of them will in 26, absolutely. Whether that's going to...

Speaker Change: Netto and overall positive as we do our guidance and we kind of have our upstream and our distribution, that that will have to see how that you know how that pencils out once we have them all.

Speaker Change: Operating just because we have some, we have a 37,000-pound dairy that's going to come on the line, as you know, and

Speaker Change: So, but they'll get to, I mean, at least what we're seeing is there with the appropriate yield on the manure and the CI, you know, the methane content.

Andrew Littlefair: They get there. So, I mean, just to be on the safe side, given what you said, it sounds like, you know, second half next year, we should certainly be there. Well, you know, yes on certain farms, on certain dairies. And then, you know, whether that can overtake. And, you know, what I'm looking at is, do you get a net positive number from the upstream, you know, EBITDA when we give our guidance? And that one, we're going to need time to sort that out. But within that number, there absolutely will be positive dairies contributing EBITDA. Thank you.

They get there.

Speaker Change: So I'm going to be on the safe side, given what you said. It sounds like, you know, second half next year we should certainly be there.

Robert Littlefair, Robert Vreeland

Speaker Change: Yes, on certain farms, on certain dairies.

and then...

Speaker Change: You know whether whether that can overtake and you know what I'm looking at is do you get a net positive number from the upstream, you know, EBITDA when we give our guidance and that one. We're going to need time to sort that out but within that number there absolutely will be positive carries contributing EBITDA.

Andrew Littlefair: But as we bring on other, you know, we got the Daryl Moss one, so there's a little bit of, you know, certain dairies are going to go even positive for sure, that one of them already is and Yeah, but the other ones are going to come on and whether they're going to kind of you know, overtake the positive side, we don't know.

Speaker Change: But as we bring on other, you know, we have the Darryl Moss one, so there's a little bit of, you know, certain derries are going to go even out positive for sure, the one of them already is and. Thank you.

Speaker Change: Yeah, but the other ones are going to come on and whether they're going to cut up.

You know, overtake the positive side. We don't know.

Craig Shere: All right, and last kind of big picture one for me. The Trump administration wants to kind of streamline as much LNG exports as possible. Obviously that's a real easy way to right-size trade deficits. And at the same time, it seems it wants to flood the world with as much oil as possible from U.S. producers and some of our friends around the world. So, obviously, in terms of spreads, in terms of the fuel advantage, if that holds true, so if we have four 450 Henry Hub and we have $50 Brent, I'm not saying that's going to happen for sure, but if those are the concerns and we're not sure, are you hearing any...

Speaker Change: The Trump administration wants to kind of streamline as much LNG exports as possible. Obviously that's a real easy way to right size trade deficits.

Speaker Change: And at the same time, it seems it wants to flood the world with as much

Speaker Change: If that holds true, so if we have $4, $4.50 hog and we have $50 Brent, I'm not saying it's going to happen for sure, but if those are the concerns and we're not sure, are you hearing

Andrew Littlefair: fleet customers express concern. Well, we just don't know what the end of the decade looks like on the fuel advantage and these trends, and maybe we just wait a bit longer. No, we're not hearing that. And, you know, and my view on that, and I've been right on this, and I don't have to be, you know, looking, it's hard to tell. I completely agree with you on oil. I mean, I think you're going to have, you will have, I mean, look, the President's going to Saudi Arabia, and we've seen this act before, and they're increasing production, OPEC is, and so, you know, it's going to put downward pressure on world oil price, and yet our producers have been through this before, and so don't count on them to drill baby drill in the face of...

Speaker Change: Fleet Customers, Express, Concern, well, we just don't know what the end of the decade looks like on the fuel advantage and these trends and maybe we just wait a bit longer.

Speaker Change: Now, we were not here in that, and Craig, you know, and my view on that, and I've been right on this, and I have to be, you know, looking sorry to tell, I completely agree with you on a well.

Andrew Littlefair: $53 oil or $49 on the way to $48 oil, right? So they get it. They got burned once before on that. So they're gonna be careful. So I think. you know, could you see a moment when you have a lower oil price? I think so. On the other hand, I've long believed that there's just been too, this natural gas price has been too high. You know, the world, the United States is just knee deep in in natural gas. And and you know this because you follow it closely. The LNG is not moving as quickly, it will, they do want to push a lot out.

Speaker Change: $53.00 oil or $49.00 on the way to $48.00 oil, right? So they get it, they got burned once before on that. So they're going to be careful. So I think...

Speaker Change: You know, could you see a moment when you have a lower air price, I think so. On the other hand, I've long believed that there's just been two, this natural gas price has been too high.

Speaker Change: The United States is just knee deep in natural gas and you know this because you follow closely. The LNG is not moving as quickly, you will, they do want to push a lot out, but you know, 450 gas was too high.

Andrew Littlefair: But you know, 450 gas was too high. And sure enough, you saw it come down to $3.50 and $3.00. And so I think you're gonna have a spread that won't be on the highest end that we've seen, but will still be constructive for us and still able to allow us to price our fuel. You know, today, Craig, we can price our fuel and make a nice margin and undershoot. West Coast Diesel by $2 a gallon. Now, that will get challenging, but you'll still have an opportunity to be in the $1.25 to $1.50 range, cheaper than diesel fuel, almost no matter where you operate, where you're buying diesel in the United States.

So, I think you're going to have a spread...

West Coast diesel by $2.00 a.m. [inaudible]

Speaker Change: Almost no matter where you operate in the, you know, where you're buying diesel in the United States. So you know, we've long and I've been given that speech for 20 years. That's what's different about our fuel versus some of the others is that we have an inherent advantage.

Andrew Littlefair: So, you know, we've long, and I've been giving this speech for 20 years, that's what's different about our fuel versus some of the others is that we have an inherent advantage. on the commodity pricing relative to oil on our fuel. And I still feel like that's going to be good for us. Though I don't disagree with you that you might see a, you know, you may get the market may overplay the oil on the downside here in a minute, but I don't believe that the gas is going to be You're not going to have $4.50 gas and $40 oil.

Speaker Change: You know, you may get the market may overplay the oil on the downside here in Meta but I don't believe that the gas is going to be, you're not going to have $4.50 gas and $40 oil. I don't think that's in the cards.

Andrew Littlefair: I don't think that's in the card. If you did, it would be more of a spike situation, not a longer term. Understood, thank you. Okay. Thank you.

Speaker Change: All right, thank you very much. If you did, it would be more of a spike situation, not a longer term.

Understood. Thank you. Okay.

Betty Zhang: Our next question comes from Betty Zhang with Dosha Bank. Your line is open. Thanks. Good afternoon. Thanks for taking my questions. My first one is on M&A.

Speaker Change: Thank you. Our next question comes from Betty Zhang with Doshy Bank. Your line is open.

Thanks, good afternoon. Thanks for taking my questions.

Andrew Littlefair: I'm just curious how you're thinking about M&A these days, whether there are any opportunities, or if you are more so looking to build organically. I think, Betty, we're looking, we're being very careful. and I think for good reason, right? We're trying to be careful with our capital. We like our current position. We are getting a chance to look at projects where maybe private equity or some others have tired of projects that are nearly complete or about to be complete. I think, given that these projects take a little longer than one would like on the greenfield nature of them, that that is what adds us.

Betty Zhang: My first one is on M&A. Just curious how you're thinking about M&A these days, whether there are any opportunities or if you are more so looking to build them organically.

Betty Zhang: Now I think that we're looking, we're being very careful and I think for good reason, right? We're trying to be careful with our capital we like our current position

Betty Zhang: We believe we are getting a chance to look at projects where maybe private equity or some others have tired of projects that are nearly complete or about to be complete.

Betty Zhang: I think given that these projects take a little longer than one would like on the Greenfield nature of them, that that is what adds us. Well, we're more interested in those kind of projects then.

Andrew Littlefair: We're more interested in those kind of projects than putting our precious capital right at this moment, given what we know right today, in the greenfield projects.

Betty Zhang: Putting our precious capital right at this moment, given what we know right today, you know, in the Greenfield projects. Now, having said that, we've ripped out of them.

Andrew Littlefair: Now, having said that, we've looked at them, and perhaps there still needs to be a little bit more market therapy before some of those make sense, but we're in a nice position in that we get to look at a lot of projects, and we have a team that's smarter looking at them, and so we continue to look at whether or not there are some projects that would be finished that we could add in, but we haven't really found those that make sense yet. That's helpful, thank you.

Betty Zhang: and perhaps there still needs to be a little bit more market therapy before some of those make sense, but we're in a nice position in that we get to look at a lot of projects and we have a team smart to look at them and so...

Betty Zhang: You know we continue to look at whether or not there are some projects that would be you know finished that we could add in but we haven't we haven't really found those that makes sense yet. Thank you very much.

Andrew Littlefair: And I wanted to ask, so for the first quarter, obviously, volumes were a bit lower than we expected. And you guys have talked about that. But I'm curious for the full year 2025, the 246 million target, is that still achievable? How are you thinking about that? You know, Betty, the way I look at that is we'll be close to that, right? I mean, the financially... Even if we're a bit shy of the 246, we'll close on that number. We may not get there, but we'll be in the range. But financially, I think we'll end up probably being even better than hitting the 246, because we're liking the way that's shaping up.

That's helpful, thank you. And I wanted to ask...

Speaker Change: So, for the first quarter obviously volumes were a bit lower than we expected, and you guys, I talked about that, but I'm curious for the full year 2025s, the 246 million

Speaker Change: Even if we're a bit shy of the 246, we'll close on that number. If we may not get there, but we'll be in the range, but financially we'll be, I think we'll end up probably...

Speaker Change: being even better than hitting the 246 because we're like in the way that's shaping up.

Andrew Littlefair: So the next part of the year, we'll, we'll, we'll close. You know, whether or not we get exactly there, hard to tell at this moment, but we'll get within very close range of it. Great, thanks very much. Thank you.

Speaker Change: So, the next part of the year, we'll close, you know, whether or not we get exactly there, hard to tell at this moment, but we'll get within very close range of it.

Jason Gabelman: Our next question comes from Jason Gabelman with TD Cowen. Your line is open. Yeah, hey, good afternoon. Thanks for taking my questions. I know you said you started repurchasing stock again, and I'm just wondering as you think about capital allocation, how you're determining funds to go towards the buyback. Is it more organic cash flow? Is it using cash from the balance sheet? And how comfortable are you with, or I should say, where are you comfortable taking the cash balance to support the buyback?

Speaker Change: Thank you. Our next question comes from Jason Gabelman with TD Cowan. Your line is open.

Jason Gabelman: Yeah, good afternoon. Thanks for taking my questions. I know you said you

I started repurchasing stock again, and I'm just-

Jason Gabelman: Wondering as you think about capital allocation, how you're determining funds to go towards the buy-back, is it?

Jason Gabelman: More organic cash flow, is it using cash from the balance sheet and how comfortable are you with or I should say where are you comfortable taking the cash balance to support the buyback?

Andrew Littlefair: Yeah, I'll let Bob kind of get into the maybe the detail. He has some thoughts on this. I mean, look, we believe our stock is really undervalued. And we wanted to put some capital to use to support the stock and believe it's a good buy. And so that's why we've done it and probably will continue to do it at these levels. But we're being prudent about it.

Speaker Change: really undervalued. And we wanted to put some capital to use to support the stock and believe it's a good buy. And so that's why we've done it, and probably will continue to do it at these levels. But, you know, we're being prudent about it. Bob, do you want to give a little more color on?

Robert Brown: Bob, do you want to give a little more color on it? Yeah, I mean, Jason, we're, I mean, we're basically just kind of, we reinstated a program that we already had. So in place, so it's not, it's not a, it's not just an unlimited and real subjective of how far do you go? I mean, we had We had about $26 million available from a prior. approval that we got from the board and everyone, and we just put that back in place. And, you know, so we'll see how far we go within that perimeter, if you will.

Bob: Yeah, I mean, Jason, we're, I mean, we're basically just kind of, um,

Bob: We reinstated a program that we already had so in place so it's not it's not a it's not it's an unlimited and you know real subjective of how far do you go. I mean we had. And um.

We had about $26 million available from a prior-

Robert Brown: So there is a little bit of maybe a cap that you would say before we would have to get some other approvals. So it's a bit, you know, programmatically done, okay, you know, in terms of, you know, how we get in when we get in and and yeah and how that's done you have you know blackout periods all that stuff you got to kind of orchestrate around well Got it.

Bob: So there is a little bit of maybe a cap that you would say before we would have to, you know, get some other approvals.

Bob: So it's that programatically done on terms of how we get in when we get in and

Bob: And, yeah, and how that's done, you have, you know, blackout periods, all that stuff, you've got to kind of orchestrate around them.

Andrew Littlefair: And my other question is, I think you mentioned you're in DC, kind of supporting another bill that supports RNG. Can you just remind us what that bill exactly entails? Yeah, that bill is called the RNG Incentive Act, was introduced in both houses of the Senate. It was the one that we started a couple years ago. You got, you know, every time you have a new Congress, you have to reintroduce a bill from the previous Congress. So that's the Incentive Act. It was introduced by Brian Fitzpatrick and Sanchez and Tom Tillis in the Senate and Senator Mark Warner.

Speaker Change: Got it, and my other question is, I think you mentioned you're in DC kind of supporting another bill that supports R&G. Cuters remind us what that bill exactly entails.

Speaker Change: and started a couple years ago. Every time you have a new Congress, you have to reintroduce a bill from the previous Congress, so that's the incentive act introduced by Brian Fitzpatrick in Sanchez.

Speaker Change: and Tom Tillerson, the Senate and Senator Mark Warner. That's a dollar a gallon.

Andrew Littlefair: That's a dollar a gallon. at the nozzle tip, R&G. Got it.

Athanasal Tip, RNG

Andrew Littlefair: I sort of see it as a modern day. re-op of the AFTC. And, you know, let's be honest. You know, they're looking to take stuff out right now, and they're adding a lot of stuff in, and there will be incentives put in this bill, but, you know, this is a pretty wild time up here, and so it's a pretty wild time up here.

Got it. Thank you. I sort of see it as a modern day.

Re-up of the AFTC.

Okay.

And, you know, let's be honest.

Speaker Change: You know, they're looking to take stuff out right now and they're adding a lot of stuff in and there will be incentives put in this bill.

Andrew Littlefair: You know, it's nothing easy about this, but I like the fact that we have a bipartisan bill that I think can be cost-effective. And, you know, one of the strengths of it is it really is a economic, it's economic development. It helps in rural Americas. It helps the farmer. because it's R&G, so we're seeing some interest.

Speaker Change: You know, it's nothing easy about this, but I like the fact that we have a bipartisan bill. I think it can be...

Speaker Change: Cross Effective, and you know, one of the strengths of it is, is it really is an economic development, it helps in rural America, it helps the farmer.

Speaker Change: because it's R&G, so we're seeing some interest. Let's put it, let's leave it there.

Operator: Let's put it, let's leave it there. Understood, thanks. Thank you. It appears we have no further questions at this time.

Understood. Thanks.

Andrew Littlefair: I would now like to turn the program back over to Andrew Littlefair for any additional or closing remarks. Good. Well, thank you, operator. And thank you, everyone, for joining the call today. We look forward to filling you in next quarter on how we're doing. Thank you. Good day.

Speaker Change: Thank you. It appears we have no further questions at this time. I would now like to turn the program back over to Andrew Littlefair for any additional or closing remarks.

Andrew Littlefair: Good, well thank you operator and thank you everyone from joining the call today. We look forward to filling you in next quarter on how we're doing.

Operator: Thank you, ladies and gentlemen. This does conclude today's event. You may now disconnect.

Thank you. Good day.

Speaker Change: Thank you, ladies and gentlemen. This does conclude today's event. You may now disconnect.

Speaker Change: [music].