Q2 2026 Montauk Renewables Inc Earnings Call
Operator: Good day everyone, thank you for participating in the Montauk Renewables Q2 2026 conference call today. I'd like to turn the call over to Mr. John Ciroli, Chief Legal Officer and Secretary, as he provides some important cautions regarding forward-looking statements and non-GAAP financial measures contained in the earnings materials made on this call. John, please go ahead.
Operator: Good day everyone, thank you for participating in the Montauk Renewables Q2 2026 conference call today. I'd like to turn the call over to Mr. John Ciroli, Chief Legal Officer and Secretary, as he provides some important cautions regarding forward-looking statements and non-GAAP financial measures contained in the earnings materials made on this call. John, please go ahead.
Speaker #1: John, please go ahead.
Speaker #2: Thank you. And good day, everyone. Welcome to Montauk Renewables earnings conference call to review the second quarter 2026 financial and operating results and developments.
John Ciroli: Thank you, good day, everyone. Welcome to Montauk Renewables' earnings conference call to review the Q2 2026 financial and operating results and developments. I'm John Ciroli, Chief Legal Officer and Secretary at Montauk. Joining me today are Sean McClain, Montauk's President and Chief Executive Officer, to discuss business developments, and Kevin van Asdalan, Chief Financial Officer, to discuss our Q2 2026 financial and operating results. At this time, I would like to direct your attention to our forward-looking disclosure statement. During this call, certain comments we make constitute forward-looking statements and, as such, involve a number of assumptions, risks, and uncertainties that could cause the company's actual results or performance to differ materially from those expressed in or implied by such forward-looking statements. These risk factors and uncertainties are detailed in Montauk Renewables' SEC filings. Our remarks today may also include non-GAAP financial measures.
John Ciroli: Thank you, good day, everyone. Welcome to Montauk Renewables' earnings conference call to review the Q2 2026 financial and operating results and developments. I'm John Ciroli, Chief Legal Officer and Secretary at Montauk. Joining me today are Sean McClain, Montauk's President and Chief Executive Officer, to discuss business developments, and Kevin van Asdalan, Chief Financial Officer, to discuss our Q2 2026 financial and operating results. At this time, I would like to direct your attention to our forward-looking disclosure statement. During this call, certain comments we make constitute forward-looking statements and, as such, involve a number of assumptions, risks, and uncertainties that could cause the company's actual results or performance to differ materially from those expressed in or implied by such forward-looking statements. These risk factors and uncertainties are detailed in Montauk Renewables' SEC filings. Our remarks today may also include non-GAAP financial measures.
Speaker #2: I'm John Ciroli, Chief Legal Officer and Secretary at Montauk. Joining me today are Sean McClain, Montauk's president and chief executive officer, to discuss business developments, and Kevin Asdalan, Chief Financial Officer, to discuss our second quarter 2026 financial and operating results.
Speaker #2: At this time, I would like to direct your attention to our forward-looking disclosure statement. During this call, certain comments we make constitute forward-looking statements and, as such, involve a number of assumptions, risks, and uncertainties that could cause the company's actual results or performance to differ materially from those expressed in or implied by such forward-looking statements.
Speaker #2: These risk factors and uncertainties are detailed in Montauk Renewables SEC filings. Our remarks today may also include non-GAAP financial measures. We present EBITDA and adjusted EBITDA metrics because we believe the measures assist investors in analyzing our performance, across reporting periods on a consistent basis, by excluding items that we do not believe are indicative of our core operating performance.
John Ciroli: We present EBITDA and adjusted EBITDA metrics because we believe the measures assist investors in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. Additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, can be found in our slide presentation in our Q2 2026 earnings press release and Form 10-Q issued and filed on 5 August 2026, which is available on our website at ir.montaukrenewables.com. After our remarks, we will open the call to analyst questions. We ask that you please keep to one question to accommodate as many questions as possible. With that, I will turn the call over to Sean.
John Ciroli: We present EBITDA and adjusted EBITDA metrics because we believe the measures assist investors in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. Additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, can be found in our slide presentation in our Q2 2026 earnings press release and Form 10-Q issued and filed on 5 August 2026, which is available on our website at ir.montaukrenewables.com. After our remarks, we will open the call to analyst questions. We ask that you please keep to one question to accommodate as many questions as possible. With that, I will turn the call over to Sean.
Speaker #2: These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. Additional details regarding these non-GAAP financial measures—including reconciliations to the most directly comparable GAAP financial measures—can be found in our slide presentation and in our second quarter 2026 earnings press release in Form 10-Q, issued and filed on August 5, 2026, which is available on our website at ir dot montaukrenewals dot com.
Speaker #2: After our remarks, we will open the call to analyst questions. We ask that you please keep to one question to accommodate as many questions as possible.
Speaker #2: And with that, I will turn the call over to Sean.
Speaker #3: Thank you, John. Good day, everyone, and thank you for joining our call. In July 2026, we began generating power for sale from our Turkey, North Carolina facility.
Sean McClain: Thank you, John. Good day, everyone, and thank you for joining our call. In July 2026, we began generating power for sale from our Turkey, North Carolina facility. This production of power is expected to be eligible to generate both SWINE RECs and enhanced RECs in subsequent months. As we work to increase the volumes of power and RECs that are able to be generated from our volume of produced syngas, we have identified specific programming modifications to our installed electrical switchgear. The installation of these modifications will provide for both the increase in production volumes as well as enhanced protection for our processing equipment and electrical transformers. We expect to have all programming completed by mid-August and consistently generate power and RECs from all available collected feedstock volumes.
Sean McClain: Thank you, John. Good day, everyone, and thank you for joining our call. In July 2026, we began generating power for sale from our Turkey, North Carolina facility. This production of power is expected to be eligible to generate both SWINE RECs and enhanced RECs in subsequent months. As we work to increase the volumes of power and RECs that are able to be generated from our volume of produced syngas, we have identified specific programming modifications to our installed electrical switchgear. The installation of these modifications will provide for both the increase in production volumes as well as enhanced protection for our processing equipment and electrical transformers. We expect to have all programming completed by mid-August and consistently generate power and RECs from all available collected feedstock volumes.
Speaker #3: This production of power is expected to be eligible to generate both Swine Rex and Enhanced Rex in subsequent months. As we work to increase the volumes of power in Rex that are able to be generated from our volume of produced syngas, we have identified specific programming modifications to our installed electrical switchgear.
Speaker #3: The installation of these modifications will provide for both the increase in production volumes as well as enhanced protection for our processing equipment and electrical transformers.
Speaker #3: We expect to have all programming completed by mid-August and consistently generate power in Rex from all available collected feedstock volumes. We continue to progress negotiations with entities that are required to purchase Rex under the North Carolina Clean Energy and Portfolio Standard in addition to our existing Rex contract with Duke.
Sean McClain: We continue to progress negotiations with entities that are required to purchase RECs under the North Carolina Clean Energy and Energy Efficiency Portfolio Standard in addition to our existing REC contract with Duke. We also continue to progress our installation of feedstock collection at our contracted farming locations. As of the end of July, we have entered into long-term agreements with over 50 separate farming locations, providing us access to over 350,000 of the 400 to 450,000 hog spaces we are targeting to fully supply our first phase of development. We are currently able to collect from more than 250,000 hog spaces and will continue farm site collection equipment installations during H2 2026. Our capital investment expectation for the first phase of this project remains unchanged at $200 million, and we continue to expect a ramp-up in production volumes throughout 2026, directly related to additional feedstock collection.
Sean McClain: We continue to progress negotiations with entities that are required to purchase RECs under the North Carolina Clean Energy and Energy Efficiency Portfolio Standard in addition to our existing REC contract with Duke. We also continue to progress our installation of feedstock collection at our contracted farming locations. As of the end of July, we have entered into long-term agreements with over 50 separate farming locations, providing us access to over 350,000 of the 400 to 450,000 hog spaces we are targeting to fully supply our first phase of development. We are currently able to collect from more than 250,000 hog spaces and will continue farm site collection equipment installations during H2 2026. Our capital investment expectation for the first phase of this project remains unchanged at $200 million, and we continue to expect a ramp-up in production volumes throughout 2026, directly related to additional feedstock collection.
Speaker #3: We also continue to progress our installation of feedstock collection at our contracted farming locations. As of the end of July, we have entered into long-term agreements with over 50 separate farming locations providing us access to over 350,000 of the 400 to 450,000 hog spaces we are targeting to fully supply our first phase of development.
Speaker #3: We are currently able to collect from more than 250,000 hog spaces and will continue farm-site collection equipment installations during the second half of 2026.
Speaker #3: Our capital investment expectation for the first phase of this project remains unchanged at $200 million, and we continue to expect to ramp up in production volumes throughout 2026 directly related to additional feedstock collection.
Speaker #3: Our joint venture, GreenWave, continues to address the limited capacity of R&D utilization for transportation by offering third-party R&D volumes access to unique and proprietary transportation pathways.
Sean McClain: Our joint venture, Green Wave, continues to address the limited capacity of RNG utilization for transportation by offering third-party RNG volumes access to unique and proprietary transportation pathways. Green Wave matches available dispensing capacity with available third-party volumes and separates and distributes RINs to the partners of Green Wave. As a result, we have received approximately $1.5 million in separated RINs distributed from Green Wave in Q2 2026. While our recent development focus has been prioritized on achieving and increasing production and revenue at our Turkey, North Carolina facility, we continue thoughtful and measured progress with our other announced development opportunities and expect to share those progress updates throughout H2 2026. With that, I will turn the call over to Kevin.
Sean McClain: Our joint venture, Green Wave, continues to address the limited capacity of RNG utilization for transportation by offering third-party RNG volumes access to unique and proprietary transportation pathways. Green Wave matches available dispensing capacity with available third-party volumes and separates and distributes RINs to the partners of Green Wave. As a result, we have received approximately $1.5 million in separated RINs distributed from Green Wave in Q2 2026. While our recent development focus has been prioritized on achieving and increasing production and revenue at our Turkey, North Carolina facility, we continue thoughtful and measured progress with our other announced development opportunities and expect to share those progress updates throughout H2 2026. With that, I will turn the call over to Kevin.
Speaker #3: GreenWave matches available dispensing capacity with available third-party volumes and separates and distributes RINs to the partners of GreenWave. As a result, we have received approximately $1.5 million in separated RINs distributed from GreenWave in the second quarter of 2026.
Speaker #3: While our recent development focus has been prioritized on achieving and increasing production and revenue at our Turkey, North Carolina facility, we continue thoughtful and measured progress with our other announced development opportunities and expect to share those progress updates throughout the second half of 2026.
Speaker #3: And with that, I will turn the call over to Kevin.
Speaker #2: Thank you, Sean. I will be discussing our second quarter 2026 financial and operating results. Please refer to our earnings press release Form 10-Q in the supplemental slides that have been posted to our website for additional information.
John Ciroli: Thank you, Sean. I will be discussing our Q2 2026 financial and operating results. Please refer to our earnings press release, Form 10-Q, and the supplemental slides that have been posted to our website for additional information.
John Ciroli: Thank you, Sean. I will be discussing our Q2 2026 financial and operating results. Please refer to our earnings press release, Form 10-Q, and the supplemental slides that have been posted to our website for additional information.
Speaker #2: Our profitability is highly dependent on the market price of environmental attributes, including the market price for RINs. As we self-market a significant portion of our RINs, a decision not to commit to transfer available RINs during a period will impact our revenue and operating profit.
Kevin van Asdalan: Our profitability is highly dependent on the market price of environmental attributes, including the market price for RINs. As we self-market a significant portion of our RINs, a decision not to commit to transfer available RINs during a period will impact our revenue and operating profit. We have entered into commitments to transfer the majority of RINs generated and available for sale from our expected 2026 Q3 RNG production at an average RIN price of $2.66. This compares to the average D3 index price for the month of July 2026 of $2.64. Total revenues in the Q2 2026 were $54.0 million, an increase of $8.9 million or 19.7% compared to $45.1 million in the Q2 2025.
Kevin van Asdalan: Our profitability is highly dependent on the market price of environmental attributes, including the market price for RINs. As we self-market a significant portion of our RINs, a decision not to commit to transfer available RINs during a period will impact our revenue and operating profit. We have entered into commitments to transfer the majority of RINs generated and available for sale from our expected 2026 Q3 RNG production at an average RIN price of $2.66. This compares to the average D3 index price for the month of July 2026 of $2.64. Total revenues in the Q2 2026 were $54.0 million, an increase of $8.9 million or 19.7% compared to $45.1 million in the Q2 2025.
Speaker #2: We have entered into commitments to transfer the majority of RINs generated and available for sale from our expected Q3 2026 R&D production at an average RIN price of $2.66.
Speaker #2: This compares to the average D3 index price for the month of July 2026 of $2.64. Total revenues in the second quarter of 2026 were $54.0 million, an increase of 8.9 million or 19.7 percent compared to $45.1 million in the second quarter of 2025.
Speaker #2: The increase is primarily related to environmental attribute revenues of approximately $8.4 million from RINs sold related to the distribution of RINs from our GreenWave joint venture and RINs related to pathway dispensing.
Kevin van Asdalan: The increase is primarily related to environmental attribute revenues of approximately $8.4 million from RINs sold related to the distribution of RINs from our GreenWave joint venture and RINs related to pathway dispensing. We had no RINs distributed and sold from GreenWave in the Q2 2025. Our Q2 2026 RNG volume sold under fixed lower price contracts decreased approximately 80% as compared to our Q2 2025 as a result of the expiration of these contracts. Our RNG commodity revenue decreased approximately 63.7%. These decreases were offset by an increase in RINs sold of 29.1%. Our RINs generated and unseparated decreased approximately 95.4% as a result of the transition to the Biogas Regulatory Reform Rule in 2025. Total general and administrative expenses were $7.7 million for the Q2 2026.
Kevin van Asdalan: The increase is primarily related to environmental attribute revenues of approximately $8.4 million from RINs sold related to the distribution of RINs from our GreenWave joint venture and RINs related to pathway dispensing. We had no RINs distributed and sold from GreenWave in the Q2 2025. Our Q2 2026 RNG volume sold under fixed lower price contracts decreased approximately 80% as compared to our Q2 2025 as a result of the expiration of these contracts. Our RNG commodity revenue decreased approximately 63.7%. These decreases were offset by an increase in RINs sold of 29.1%. Our RINs generated and unseparated decreased approximately 95.4% as a result of the transition to the Biogas Regulatory Reform Rule in 2025. Total general and administrative expenses were $7.7 million for the Q2 2026.
Speaker #2: We had no RINs distributed and sold from GreenWave in the second quarter of 2025. Our second quarter of 2026 R&D volumes sold under fixed floor price contracts decreased approximately 80 percent compared to our second quarter of 2025, as a result of the expiration of these contracts.
Speaker #2: Our R&D commodity revenue decreased approximately 63.7 percent. These decreases were offset by an increase in RINs sold of 29.1 percent. Our RINs generated and unseparated decreased approximately 95.4 percent as a result of the transition to the biogas regulatory reform rule in 2025.
Speaker #2: Total general and administrative expenses were $7.7 million for the second quarter of 2026. A decrease of 1.3 million or 15.2 percent compared to $9.0 million in the second quarter of 2025 driven primarily by a one-time accelerated vesting of approximately $1.6 million from certain restricted share awards in 2025 due to the termination of an employee.
Kevin van Asdalan: A decrease of $1.3 million or 15.2% compared to $9.0 million in the Q2 2025, driven primarily by a one-time accelerated vesting of approximately $1.6 million from certain restricted share awards in 2025 due to the termination of an employee. Turning to our segment operating metrics, I'll begin by reviewing our Renewable Natural Gas segment. We produced 1.5 million MMBtu of RNG during the Q2 2026, an increase of 43,000 or 3% compared to 1.4 million MMBtu during the Q2 2025. Our McCarty facility produced 53,000 MMBtu more in the Q2 2026 compared to the Q2 2025 as a result of landfill host wellfield operational and collection system enhancements.
Kevin van Asdalan: A decrease of $1.3 million or 15.2% compared to $9.0 million in the Q2 2025, driven primarily by a one-time accelerated vesting of approximately $1.6 million from certain restricted share awards in 2025 due to the termination of an employee. Turning to our segment operating metrics, I'll begin by reviewing our Renewable Natural Gas segment. We produced 1.5 million MMBtu of RNG during the Q2 2026, an increase of 43,000 or 3% compared to 1.4 million MMBtu during the Q2 2025. Our McCarty facility produced 53,000 MMBtu more in the Q2 2026 compared to the Q2 2025 as a result of landfill host wellfield operational and collection system enhancements.
Speaker #2: Turning to our segment operating metrics, I'll begin by reviewing our renewable natural gas segment. We produced 1.5 million MMBtu of RNG during the second quarter of 2026, an increase of 43,000, or 3 percent, compared to 1.4 million MMBtu during the second quarter of 2025.
Speaker #2: Our McCarty facility produced 53,000 MMBTU more in the second quarter of 2026 compared to the second quarter of 2025 as a result of landfill host well-filled operational and collection system enhancements.
Speaker #2: Our Apex facility produced 39,000 MMBTU more in the second quarter of 2026 as compared to the second quarter of 2025 as a result of increased feedstock gas from our improvements related to the landfill collection system.
Kevin van Asdalan: Our Apex facility produced 39,000 MMBtu more in the Q2 2026 as compared to the Q2 2025 as a result of increased feedstock gas from our improvements related to the landfill collection system. Our Galveston facility produced 26,000 MMBtu fewer in the Q2 2026 compared to the Q2 2025 as a result of the landfill host assuming responsibility of wellfield operations and maintenance beginning in 2026. Our Atascocita facility produced 37,000 fewer MMBtu in the Q2 2026 compared to the Q2 2025 as a result of landfill host wellfield operational and collection system enhancement project timing as well as planned facility maintenance. Revenues from the Renewable Natural Gas segment during the Q2 2026 were $40.9 million, an increase of $0.1 million or 0.3% compared to $40.8 million during the Q2 2025.
Kevin van Asdalan: Our Apex facility produced 39,000 MMBtu more in the Q2 2026 as compared to the Q2 2025 as a result of increased feedstock gas from our improvements related to the landfill collection system. Our Galveston facility produced 26,000 MMBtu fewer in the Q2 2026 compared to the Q2 2025 as a result of the landfill host assuming responsibility of wellfield operations and maintenance beginning in 2026. Our Atascocita facility produced 37,000 fewer MMBtu in the Q2 2026 compared to the Q2 2025 as a result of landfill host wellfield operational and collection system enhancement project timing as well as planned facility maintenance. Revenues from the Renewable Natural Gas segment during the Q2 2026 were $40.9 million, an increase of $0.1 million or 0.3% compared to $40.8 million during the Q2 2025.
Speaker #2: Our Galveston facility produced 26,000 MMBTU fewer in the second quarter of 2026 compared to the second quarter of 2025 as a result of landfill host as a result of the landfill host assuming responsibility of well-filled operations and maintenance beginning in 2026.
Speaker #2: Our Etasca Cedar facility produced 37,000 fewer MMBTU in the second quarter of 2026 compared to the second quarter of 2025 as a result of landfill host well-filled operational and collection system enhancement project timing as well as planned facility maintenance.
Speaker #2: Revenues from the renewable natural gas segment during the second quarter of 2026 were $40.9 million, an increase of 0.1 million or 0.3 percent compared to $40.8 million during the second quarter of 2025.
Speaker #2: Average commodity pricing for natural gas for the second quarter of 2026 was $15.7 percent lower than the second quarter of 2025. In the second quarter of 2026, we self-marketed 14.3 million RINs, representing a 3.2 million increase or 29.1 percent compared to 11.1 million RINs self-marketed during the second quarter of 2025.
Kevin van Asdalan: Average commodity pricing for natural gas for Q2 2026 was 15.7% lower than Q2 2025. In Q2 2026, we self-marketed 14.3 million RINs, representing a 3.2 million increase or 29.1% compared to 11.1 million RINs self-marketed during Q2 2025. Average pricing realized on RIN sales during Q2 2026 was $2.45 as compared to $2.42 during Q2 2025, an increase of 1.2%. This compares to the average D3 RIN index price for Q2 2026 of $2.54, being approximately 7.6% higher than the average D3 index price for Q2 2025 of $2.36. At 30 June 2026, we had approximately 0.4 million MMBtu available for RIN generation, 0.1 million RINs generated but unseparated, and no RINs separated and unsold.
Kevin van Asdalan: Average commodity pricing for natural gas for Q2 2026 was 15.7% lower than Q2 2025. In Q2 2026, we self-marketed 14.3 million RINs, representing a 3.2 million increase or 29.1% compared to 11.1 million RINs self-marketed during Q2 2025. Average pricing realized on RIN sales during Q2 2026 was $2.45 as compared to $2.42 during Q2 2025, an increase of 1.2%. This compares to the average D3 RIN index price for Q2 2026 of $2.54, being approximately 7.6% higher than the average D3 index price for Q2 2025 of $2.36. At 30 June 2026, we had approximately 0.4 million MMBtu available for RIN generation, 0.1 million RINs generated but unseparated, and no RINs separated and unsold.
Speaker #2: Average pricing realized on RIN sales during the second quarter of 2026 was $2.45 as compared to $2.42 during the second quarter of 2025, an increase of 1.2 percent.
Speaker #2: This compares to the average D3 RIN index price for the second quarter of 2026 of $2.54, which is approximately 7.6 percent higher than the average D3 index price for the second quarter of 2025 of $2.36.
Speaker #2: At June 30, 2026, we had approximately 0.4 million MMBTU available for RIN generation, 0.1 million RINs generated but unseparated, and no RINs separated and unsold.
Speaker #2: At June 30, 2025, we had approximately 0.3 million MMBTU available for RIN generation, 3.0 million RINs generated but unseparated, and 0.1 million RINs separated and unsold.
Kevin van Asdalan: At 30 June 2025, we had approximately 0.3 million MMBtu available for RIN generation, 3.0 million RINs generated but unseparated, and 0.1 million RINs separated and unsold. Our operating and maintenance expenses for our RNG facilities during Q2 2026 were $15.6 million, a decrease of $1.4 million or 8.2% compared to $17.0 million during Q2 2025. Our McCarty facility operating and maintenance expenses decreased approximately $0.9 million primarily related to the timing of maintenance related to gas processing equipment. Our Apex facility operating and maintenance expenses decreased approximately $0.5 million, primarily related to timing of gas processing preventative maintenance. We produced approximately 44,000 megawatt hours in renewable electricity during Q2 2026, an increase of approximately 2,000 megawatt hours or 4.8% compared to 42,000 megawatt hours during Q2 2025.
Kevin van Asdalan: At 30 June 2025, we had approximately 0.3 million MMBtu available for RIN generation, 3.0 million RINs generated but unseparated, and 0.1 million RINs separated and unsold. Our operating and maintenance expenses for our RNG facilities during Q2 2026 were $15.6 million, a decrease of $1.4 million or 8.2% compared to $17.0 million during Q2 2025. Our McCarty facility operating and maintenance expenses decreased approximately $0.9 million primarily related to the timing of maintenance related to gas processing equipment. Our Apex facility operating and maintenance expenses decreased approximately $0.5 million, primarily related to timing of gas processing preventative maintenance. We produced approximately 44,000MWh in renewable electricity during Q2 2026, an increase of approximately 2,000MWh or 4.8% compared to 42,000MWh during Q2 2025.
Speaker #2: Our operating and maintenance expenses for our R&D facilities during the second quarter of 2026 were $15.6 million, a decrease of 1.4 million or 8.2 percent compared to $17.0 million during the second quarter of 2025.
Speaker #2: Our McCarty facility operating and maintenance expenses decreased approximately 0.9 million primarily related to the timing of maintenance-related to gas processing equipment. Our Apex facility operating and maintenance expenses decreased approximately 0.5 million primarily related to timing of gas processing preventative maintenance.
Speaker #2: We produced approximately 44,000 megawatt-hours in renewable electricity during the second quarter of 2026, an increase of approximately 2,000 megawatt-hours or 4.8 percent compared to 42,000 megawatt-hours during the second quarter of 2025.
Speaker #2: Our Bowerman facility produced approximately 3,000 megawatt-hours more in the second quarter of 2026 compared to the second quarter of 2025. The increase is primarily related to increased gas flows due to landfill host well-filled improvements.
Kevin van Asdalan: Our Bowerman facility produced approximately 3,000 megawatt hours more in Q2 2026 compared to Q2 2025. The increase is primarily related to increased gas flows due to landfill host wellfield improvements. Revenues from renewable electricity facilities during Q2 2026 were $4.5 million, an increase of $0.2 million or 4.8% compared to $4.3 million in Q2 2025. The increase was primarily driven by the increase in production volumes. Our renewable electricity generation operating and maintenance expenses during Q2 2026 were $5.1 million, an increase of $0.3 million or 5.3% compared to $4.8 million during Q2 2025. The increase is driven by an increase in non-capitalizable costs of approximately $1.2 million at our Montauk Ag Renewables project in Turkey, North Carolina.
Kevin van Asdalan: Our Bowerman facility produced approximately 3,000MWh more in Q2 2026 compared to Q2 2025. The increase is primarily related to increased gas flows due to landfill host wellfield improvements. Revenues from renewable electricity facilities during Q2 2026 were $4.5 million, an increase of $0.2 million or 4.8% compared to $4.3 million in Q2 2025. The increase was primarily driven by the increase in production volumes. Our renewable electricity generation operating and maintenance expenses during Q2 2026 were $5.1 million, an increase of $0.3 million or 5.3% compared to $4.8 million during Q2 2025. The increase is driven by an increase in non-capitalizable costs of approximately $1.2 million at our Montauk Ag Renewables project in Turkey, North Carolina.
Speaker #2: Revenues from renewable electricity facilities during the second quarter of 2026 were $4.5 million, an increase of 0.2 million or 4.8 percent compared to 4.3 million in the second quarter of 2025.
Speaker #2: The increase was primarily driven by the increase in production volumes. Our renewable electricity generation operating and maintenance expenses during the second quarter of 2026 were $5.1 million, an increase of 0.3 million or 5.3 percent compared to 4.8 million during the second quarter of 2025.
Speaker #2: The increase is driven by an increase in non-capitalizable costs of approximately $1.2 million at our Montauk Ag Renewables Project in Turkey, North Carolina. Our Bowerman facility operating and maintenance expenses decreased approximately 0.7 million primarily related to decreased well-filled operational costs and timing of gas processing preventative maintenance.
Kevin van Asdalan: Our Bowerman facility operating and maintenance expenses decreased approximately $0.7 million, primarily related to decreased wellfield operational costs and timing of gas processing preventative maintenance. We recorded within operating and maintenance expenses approximately $8.3 million in Q2 2026 related to the cost of RINs distributed from GreenWave when sold and the cost related to pathway dispensing associated with the dispensing of RNG. There were no such expenses incurred during Q2 2025. During Q2 2026, we recorded impairments of $0.7 million, an increase of $0.3 million compared to $0.4 million in Q2 2025. The increase relates specifically to identified discrete or non-recoverable assets. We did not record any impairments during Q2 2026 related to our estimate of future cash flows.
Kevin van Asdalan: Our Bowerman facility operating and maintenance expenses decreased approximately $0.7 million, primarily related to decreased wellfield operational costs and timing of gas processing preventative maintenance. We recorded within operating and maintenance expenses approximately $8.3 million in Q2 2026 related to the cost of RINs distributed from GreenWave when sold and the cost related to pathway dispensing associated with the dispensing of RNG. There were no such expenses incurred during Q2 2025. During Q2 2026, we recorded impairments of $0.7 million, an increase of $0.3 million compared to $0.4 million in Q2 2025. The increase relates specifically to identified discrete or non-recoverable assets. We did not record any impairments during Q2 2026 related to our estimate of future cash flows.
Speaker #2: We recorded within operating and maintenance expenses approximately $8.3 million in the second quarter of 2026 related to the cost of RINs distributed from GreenWave when sold and the cost related to Pathway dispensing associated with the dispensing of R&D.
Speaker #2: There were no such expenses incurred during the second quarter of 2025. During the second quarter of 2026, we recorded impairments of 0.7 million, an increase of 0.3 million compared to 0.4 million in the second quarter of 2025.
Speaker #2: The increase relates specifically to identified discrete or non-operable assets. We did not record any impairments during the second quarter of 2026 related to our estimate of future cash flows.
Speaker #2: Operating loss for the second quarter of 2026 was $75,000, a decrease of $2.3 million, or 96.8 percent, compared to an operating loss of $2.4 million for the second quarter of 2025.
Kevin van Asdalan: Operating loss for Q2 2026 was $75,000, a decrease of $2.3 million or 96.8% compared to an operating loss of $2.4 million for Q2 2025. RNG operating income for Q2 2026 was $9.6 million, an increase of $0.4 million or 4.5% compared to operating income of $9.2 million for Q2 2025. Renewable Electricity generation operating loss for Q2 2026 was $2.1 million, a decrease of $0.2 million or 9.2% compared to an operating loss of $2.3 million for Q2 2025. Other income in Q2 2026 was $2.3 million, an increase of $3.6 million compared to other expenses of $1.3 million in Q2 2025. In Q2 2026, we recorded approximately $3.8 million in income related to our joint venture investment in GreenWave.
Kevin van Asdalan: Operating loss for Q2 2026 was $75,000, a decrease of $2.3 million or 96.8% compared to an operating loss of $2.4 million for Q2 2025. RNG operating income for Q2 2026 was $9.6 million, an increase of $0.4 million or 4.5% compared to operating income of $9.2 million for Q2 2025. Renewable Electricity generation operating loss for Q2 2026 was $2.1 million, a decrease of $0.2 million or 9.2% compared to an operating loss of $2.3 million for Q2 2025. Other income in Q2 2026 was $2.3 million, an increase of $3.6 million compared to other expenses of $1.3 million in Q2 2025. In Q2 2026, we recorded approximately $3.8 million in income related to our joint venture investment in GreenWave.
Speaker #2: R&D operating income for the second quarter of 2026 was $9.6 million, an increase of $0.4 million or 4.5 percent compared to operating income of $9.2 million for the second quarter of 2025.
Speaker #2: Renewable electricity generation operating loss for the second quarter of 2026 was $2.1 million, a decrease of 0.2 million or 9.2 percent compared to an operating loss of $2.3 million for the second quarter of 2025.
Speaker #2: Other income in the second quarter of 2026 was $2.3 million, an increase of 3.6 million compared to other expenses of $1.3 million in the second quarter of 2025.
Speaker #2: In the second quarter of 2026, we recorded approximately $3.8 million in income related to our joint venture investment in GreenWave. There was no such income reported during the second quarter of 2025.
Kevin van Asdalan: There was no such income reported during Q2 2025. We received approximately $1.5 million in RINs distributed from GreenWave in Q2 2026. We sold approximately $1.9 million in RINs and recorded revenues from those RINs sold of approximately $4.8 million. Additional information on GreenWave can be found in the supplemental slides that have been posted to our website. Turning to the balance sheet, as of 30 June 2026, $155 million was outstanding under our new senior credit facility with HASI. Our financial debt covenants commenced 30 June 2026, and as of 30 June 2026, we are in compliance with all applicable financial covenants under this facility. For H1 2026, our capital expenditures were $61.3 million, of which $49.8 million and $3.6 million were related to our ongoing development of Montauk Ag Renewables and our Bowerman RNG facility, respectively.
Kevin van Asdalan: There was no such income reported during Q2 2025. We received approximately $1.5 million in RINs distributed from GreenWave in Q2 2026. We sold approximately $1.9 million in RINs and recorded revenues from those RINs sold of approximately $4.8 million. Additional information on GreenWave can be found in the supplemental slides that have been posted to our website. Turning to the balance sheet, as of 30 June 2026, $155 million was outstanding under our new senior credit facility with HASI. Our financial debt covenants commenced 30 June 2026, and as of 30 June 2026, we are in compliance with all applicable financial covenants under this facility. For H1 2026, our capital expenditures were $61.3 million, of which $49.8 million and $3.6 million were related to our ongoing development of Montauk Ag Renewables and our Bowerman RNG facility, respectively.
Speaker #2: We received approximately $1.5 million in RINs distributed from GreenWave in the second quarter of 2026. We sold approximately $1.9 million RINs and recorded revenues from those RINs sold of approximately $4.8 million.
Speaker #2: Additional information on GreenWave can be found in the supplemental slides that have been posted to our website. Turning to the balance sheet, at June 30, 2026, $155 million was outstanding under our new senior credit facility with Hazzy.
Speaker #2: Our financial debt covenants commenced June 30, 2026, and as of June 30, 2026, we are in compliance with all applicable financial covenants under this facility.
Speaker #2: For the first six months of 2026, our capital expenditures were $61.3 million, of which $49.8 million and $3.6 million were related to our ongoing development of Montauk Ag Renewables and our Bowerman R&D facility, respectively.
Speaker #2: We had approximately $17.3 million in capital expenditures included within our accounts payable or accrued liabilities at June 30, 2026. As of June 30, 2026, we had cash and cash equivalents, net of restricted cash, of approximately $15.8 million.
Kevin van Asdalan: We had approximately $17.3 million in capital expenditures included within our accounts payable or accrued liabilities at 30 June 2026. As of 30 June 2026, we had cash and cash equivalents net of restricted cash of approximately $15.8 million. Our new senior credit facility with HASI requires us to meet quarterly liquidity balances as defined in the underlying agreement. We had accounts and other receivables of approximately $5.6 million as of 30 June 2026. We do not believe we have any collectibility issues within our receivables balances. As of 30 June 2026, we held no RINs distributed from GreenWave in inventory on our balance sheet. Adjusted EBITDA for Q2 2026 was $12.3 million, an increase of $7.3 million or 144.5% compared to adjusted EBITDA of $5.0 million for Q2 2025.
Kevin van Asdalan: We had approximately $17.3 million in capital expenditures included within our accounts payable or accrued liabilities at 30 June 2026. As of 30 June 2026, we had cash and cash equivalents net of restricted cash of approximately $15.8 million. Our new senior credit facility with HASI requires us to meet quarterly liquidity balances as defined in the underlying agreement. We had accounts and other receivables of approximately $5.6 million as of 30 June 2026. We do not believe we have any collectibility issues within our receivables balances. As of 30 June 2026, we held no RINs distributed from GreenWave in inventory on our balance sheet. Adjusted EBITDA for Q2 2026 was $12.3 million, an increase of $7.3 million or 144.5% compared to adjusted EBITDA of $5.0 million for Q2 2025.
Speaker #2: Our new senior credit facility with Hazzy requires us to meet quarterly liquidity balances as defined in the underlying agreement. We had accounts and other receivables of approximately $5.6 million as of June 30, 2026.
Speaker #2: We do not believe we have any collectibility issues within our receivables balances. As of June 30, 2026, we held no RINs distributed from GreenWave in inventory on our balance sheet.
Speaker #2: Adjusted EBITDA for the second quarter of 2026 was $12.3 million, an increase of 7.3 million or 144.5 percent compared to adjusted EBITDA of $5.0 million for the second quarter of 2025.
Speaker #2: EBITDA for the second quarter of 2026 was $11.7 million, an increase of $7.1 million, or 151.4 percent, compared to EBITDA of $4.6 million for the second quarter of 2025.
Kevin van Asdalan: EBITDA for Q2 2026 was $11.7 million, an increase of $7.1 million or 151.4% compared to EBITDA of $4.6 million for Q2 2025. Net income for Q2 2026 was $0.2 million, an increase of $5.7 million as compared to a net loss of $5.5 million for Q2 2025. I'll now turn the call back over to Sean.
Kevin van Asdalan: EBITDA for Q2 2026 was $11.7 million, an increase of $7.1 million or 151.4% compared to EBITDA of $4.6 million for Q2 2025. Net income for Q2 2026 was $0.2 million, an increase of $5.7 million as compared to a net loss of $5.5 million for Q2 2025. I'll now turn the call back over to Sean.
Speaker #2: Net income for the second quarter of 2026 was $0.2 million, an increase of 5.7 million as compared to a net loss of $5.5 million for the second quarter of 2025.
Speaker #2: And I'll turn the call back over to Sean.
Speaker #1: Thank you, Kevin. In closing, and although we don't provide guidances to our internal expectations on the market price of environmental attributes, including the market price of D3 RINs, we would like to provide our full year 2026 outlook.
Sean McClain: Thank you, Kevin. Although we don't provide guidance as to our internal expectations on the market price of environmental attributes, including the market price of D3 RINs, we would like to provide our full year 2026 outlook. We are reaffirming our RNG production volumes to range between 5.8 and 6 million MMBtus, with corresponding RNG revenues to range between $175 and 190 million. We expect our Renewable Electricity production volumes to range between 185 and 195 thousand megawatt hours, with corresponding revenue, electricity revenues to range between $23 and 26 million, which is reflective of our current expectations of production at our Montauk Ag Renewables facility in Turkey, North Carolina. With that, we will pause for any questions.
Sean McClain: Thank you, Kevin. Although we don't provide guidance as to our internal expectations on the market price of environmental attributes, including the market price of D3 RINs, we would like to provide our full year 2026 outlook. We are reaffirming our RNG production volumes to range between 5.8 and 6 million MMBtus, with corresponding RNG revenues to range between $175 and 190 million. We expect our Renewable Electricity production volumes to range between 185 and 195000, with corresponding revenue, electricity revenues to range between $23 and 26 million, which is reflective of our current expectations of production at our Montauk Ag Renewables facility in Turkey, North Carolina. With that, we will pause for any questions.
Speaker #1: We are reaffirming our R&D production volumes to range between $5.8 and $6 million MMBTUs, with corresponding R&D revenues to range between $175 and $190 million.
Speaker #1: We expect our renewable electricity production volumes to range between $185 and $195,000 megawatt-hours, with corresponding revenue electricity revenues to range between $23 and $26 million, which is reflective of our current expectations of production at our Montauk Ag Renewables facility in Turkey, North Carolina.
Speaker #1: And with that, we will pause for any questions.
Speaker #3: Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.
Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Please stand by while we compile the Q&A roster.
Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Please stand by while we compile the Q&A roster.
Speaker #3: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Tim Moore from Clear Street.
Operator: Our first question comes from Tim Moore from Clear Street. Your line is now open.
Operator: Our first question comes from Tim Moore from Clear Street. Your line is now open.
Speaker #3: Your line is now open.
Speaker #4: Thanks. Congratulations on the progress. You know, RIN pricing seems to have stabilized, you know, in the past six or seven months. It was nice to hear your commentary on the sequential increase in the third quarter.
Tim Moore: Thanks. Congratulations on the progress. RIN pricing seems to have stabilized in the past six or seven months. It was nice to hear your commentary on the sequential increase in Q3. Just from your own visibility and what you're seeing, is there just improved transparency in the marketplace for that compared to last year? I know the EPA website stopped posting it January last year. What are you seeing and the behaviors around RIN purchases?
Tim Moore: Thanks. Congratulations on the progress. RIN pricing seems to have stabilized in the past six or seven months. It was nice to hear your commentary on the sequential increase in Q3. Just from your own visibility and what you're seeing, is there just improved transparency in the marketplace for that compared to last year? I know the EPA website stopped posting it January last year. What are you seeing and the behaviors around RIN purchases?
Speaker #4: Can you just, you know, just from your own visibility and what you're seeing, is there just improved transparency in the marketplace for that compared to last year?
Speaker #4: You know, I know EEPA website stopped posting it January last year, but just, just kind of what are you seeing and kind of the behaviors around RIN purchases?
Speaker #2: Yeah, Tim, I'll handle the first section. And then maybe Sean can offer some guidance or not guidance, but some clarity in regards to, you know, our obligated party process.
Kevin van Asdalan: Yeah, Tim, I will handle the first section, then maybe Sean can offer some clarity in regards to our obligated party process. Yeah, while we have seen some RIN stability here in the first call it five or six months, we think some of that stability was coming through the, there was an extended year settlement for 2025 that completed itself in Q2. Now, I believe getting on the other side of completing the 2025 vintage period and moving into 2026 with, I guess, a settled RVO and obligated parties getting into their 2026 obligated purchases. We believe that has contributed to the historical path of RIN lack of volatility here in 2026.
Kevin van Asdalan: Yeah, Tim, I will handle the first section, then maybe Sean can offer some clarity in regards to our obligated party process. Yeah, while we have seen some RIN stability here in the first call it five or six months, we think some of that stability was coming through the, there was an extended year settlement for 2025 that completed itself in Q2. Now, I believe getting on the other side of completing the 2025 vintage period and moving into 2026 with, I guess, a settled RVO and obligated parties getting into their 2026 obligated purchases. We believe that has contributed to the historical path of RIN lack of volatility here in 2026.
Speaker #2: But yeah, while we have seen some RINs stability here, in the first, you know, call it five or six months, we think some of that stability was coming through the there was an extended year settlement for 2025 that, you know, completed itself in the second quarter.
Speaker #2: And I believe getting on the other side of sort of, you know, completing the 2025 vintage period and moving into 2026 with a, I guess, a settled RVO and obligated parties, you know, getting into their 2026 obligated purchases, we believe that's contributed to the historical path of RIN lack of volatility here in 2026.
Speaker #1: Yeah. And Tim, what I can offer is obviously reaffirming our strategy when we self-market these RINs. Rather than marketing them to anyone that is willing to purchase in the short term, we do emphasize and focus on obligated parties to ensure that as many of our generated RIN volumes are purchased by those that have the intention to retire for compliance purposes.
Sean McClain: Yeah. Tim, what I can offer is, obviously reaffirming our strategy when we self-market these RINs. Rather than marketing them to anyone that is willing to purchase in the short term, we do emphasize and focus on obligated parties to ensure that as many of our generated RIN volumes are purchased by those that have the intention to retire it for compliance purposes. I do see an increase in the predominance of those obligated parties stepping into the marketplace and buying more regularly earlier on in the compliance year than we have seen in previous years. That does tie well into some of the comments that Kevin made.
Sean McClain: Yeah. Tim, what I can offer is, obviously reaffirming our strategy when we self-market these RINs. Rather than marketing them to anyone that is willing to purchase in the short term, we do emphasize and focus on obligated parties to ensure that as many of our generated RIN volumes are purchased by those that have the intention to retire it for compliance purposes. I do see an increase in the predominance of those obligated parties stepping into the marketplace and buying more regularly earlier on in the compliance year than we have seen in previous years. That does tie well into some of the comments that Kevin made.
Speaker #1: I do see an increase in the predominance of those obligated parties stepping into the marketplace and buying more regularly earlier on in the compliance year than we've seen in previous years.
Speaker #1: So that does tie well into some of the comments that Kevin made.
Speaker #4: No, that's great. It's nice to see the a little bit more buying regularly behavior. I have one more question, and I'll save the rest for offline for a catch-up later today.
Tim Moore: No, that is great. It is nice to see a little bit more buying regularly behavior. I have one more question, I will save the rest for offline for a catch-up later today. The revenue guidance for RNG for $175 to $190 million reiterated. Does that include the GreenWave related revenue, such as you receive distributed RIN sold? I am just kind of curious because that was a contribution, I guess, in the quarter.
Tim Moore: No, that is great. It is nice to see a little bit more buying regularly behavior. I have one more question, I will save the rest for offline for a catch-up later today. The revenue guidance for RNG for $175 to $190 million reiterated. Does that include the GreenWave related revenue, such as you receive distributed RIN sold? I am just kind of curious because that was a contribution, I guess, in the quarter.
Speaker #4: So the revenue guidance for R&D for, you know, 175 to 190 million, reiterated, does that include the GreenWave-related revenue, such as you receive distributed RINs sold?
Speaker #4: I'm just kind of curious because that was a contribution, I guess, in the quarter.
Speaker #2: Yeah, it's a contribution we include GreenWave in our forecasts for what we expect to receive from the third-party volumes that we're distributing through that pathway.
Kevin van Asdalan: Yeah. It is a contribution. We include GreenWave in our forecasts for what we expect to receive from the third party volumes that we are distributing through that pathway. Yeah, there would be expectations of inclusion of RIN revenues from GreenWave. We do expect some wellfield enhancement and investments large in H2 to support the production guidance that we have for our RNG segment.
Kevin van Asdalan: Yeah. It is a contribution. We include GreenWave in our forecasts for what we expect to receive from the third party volumes that we are distributing through that pathway. Yeah, there would be expectations of inclusion of RIN revenues from GreenWave. We do expect some wellfield enhancement and investments large in H2 to support the production guidance that we have for our RNG segment.
Speaker #2: But yeah, so there would be expectations of inclusion of RIN revenues from GreenWave. And we do expect some well-filled enhancement in investments large in the second half of the year to support the production guidance that we have for our R&D segment.
Speaker #4: No, that's great clarification, Kevin. I'm including that in my model now, so thank you. That's it for my questions.
Tim Moore: No, that's great clarification, Kevin. I'm including that in my model now. Thank you. That's it for my questions.
Tim Moore: No, that's great clarification, Kevin. I'm including that in my model now. Thank you. That's it for my questions.
Operator: This concludes the question and answer session. I would now like to turn it back to Sean McClain, CEO, for closing remarks.
Operator: This concludes the question and answer session. I would now like to turn it back to Sean McClain, CEO, for closing remarks.
Speaker #3: This concludes the question-and-answer session. I would now like to turn it back to Sean McClain, CEO, for closing remarks.
Speaker #1: Thank you for taking the time to join us on the conference call today. We look forward to speaking with you when we present our third quarter 2026 results.
Sean McClain: Thank you for taking the time to join us on the conference call today. We look forward to speaking with you when we present our Q3 2026 results.
Sean McClain: Thank you for taking the time to join us on the conference call today. We look forward to speaking with you when we present our Q3 2026 results.
Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
