Clean Energy Fuels Corp. Q2 FY2025 earnings call

• The second quarter demonstrated underlying strength of the business with solid performance despite regulatory and market uncertainties. - Signed multiple transit agreements over the years, fueling over 9,000 transit buses daily. - Waste companies' business is consistent and growing with RNG adoption. - Heavy-duty trucking market shows signs of adoption with improved incremental cost for X15N engines. - Dairy RNG projects in ramp-up, with recent ITC sales and recognition of dairy RNG in legislation. - Recognized $29 million ITC sale in connection with 4 projects owned by RNG joint venture with BP.

In the second quarter of 2025, Clean Energy Fuels reported $102 million in revenue, over 61 million gallons of renewable natural gas sold, and $17.5 million of adjusted EBITDA. RNG volumes grew 21% compared to the first quarter. The transit segment fuels over 9,000 transit buses daily at 115 locations. The waste segment is consistent and growing. Dairy RNG projects have 6 operating with others in commissioning, with some projects in ramp-up mode. Revenue contribution from RNG and related segments is significant, with RNG volumes and adjusted EBITDA being key metrics.

• Raised full-year 2025 guidance for GAAP net loss to range from $217 million to $212 million. - Outlook for adjusted EBITDA for 2025 is $60 million to $65 million. - Anticipates trends will largely continue but with caution due to uncertainties like timing of X15N RIN adoption, LCFS pricing, and dairy project ramp-up.

• Uncertainties around the timing of adoption of the X15N RIN. - Fluctuations in LCFS pricing. - Ongoing ramp-up challenges in dairy projects.

Q: Could you provide updated thoughts on the 45Z legislation and its potential impact?

A: Andrew Littlefair stated the bill is strong, enabling recognition of negative carbon from dairy RNG and expects it to have a meaningful impact though much work remains.

Q: Can you give more color on the ramp of dairy projects and how long it might take to ramp up?

A: Robert Vreeland said it's normal to have punch list items post-commissioning, with projects in operational phase, and Andrew Littlefair added commissioning can take 6 months vs. earlier defined timelines.

Q: What's driving the rerate and growth in dispensing, and its relation to STEP 2 rule?

A: Robert Vreeland mentioned continued strong volume with choppy Q1-Q2, better margin per gallon from mix of vehicles and fuel volumes at stations. Andrew Littlefair noted RVO is a factor but not the entire piece, and LCFS is headed upward.

Q: Thoughts on LCFS prices exiting 2025 and monetization of investment tax credits?

A: Andrew Littlefair said LCFS prices are firming and will continue to go up. Robert Vreeland discussed monetization of ITC on completed projects and ongoing projects but didn't speculate on exact numbers.

Q: Signs of incremental tightness in downstream CNG refueling market and moving parts in guidance?

A: Andrew Littlefair said no tightness seen, driven by fuel volume at stations and oil to nat gas spread. Incremental caution due to vehicle adoption, LCFS volatility, and dairy ramp-up.