Montauk Renewables, Inc. Q3 FY2025 earnings call

• EPA issued decisions on 175 million small refinery exemption petitions and proposed supplemental rule options; potential extension of finalization due to government shutdown. - Formed joint venture GreenWave Energy Partners, LLC to address RNG utilization; expect benefits to increase in Q4 2025. - Continues development in North Carolina, expecting production and revenue generation to commence in Q1 2026; awaiting NCUC response on filings. - Other development initiatives for new RNG facilities, CO2 development, and biomethanol development remain active.

Renewable Natural Gas segment

• Produced 1.4 million MMBtu during Q3 2025, an increase of 53,000 MMBtu or 3.8% compared to Q3 2024. Rumpke facility produced 50,000 MMBtu more due to higher inlet feedstock supply; Apex facility produced 25,000 MMBtu more as a result of the June 2025 commissioning of the second Apex RNG facility. Revenues were $39.9 million, a decrease of $21.9 million or 5.1% compared to Q3 2024. Self-marketed 12.4 million RINs, a decrease of 21.2% compared to 15.8 million RINs self-marketed in Q3 2024.

Renewable Electricity segment

• Produced approximately 44,000 megawatt hours in renewable electricity during Q3 2025, an increase of approximately 3,000 megawatt hours or 7.3% compared to Q3 2024. Revenues were $4.2 million, an increase of $0.1 million or 1.9% compared to Q3 2024. The increase was primarily driven by the increase in Bowerman facility production volumes.

• Expect RNG production volumes in 2025 to remain unchanged, ranging between 5.8 million and 6 million MMBTus with corresponding RNG revenues ranging between $150 million and $170 million. - Expect renewable electricity production volumes in 2025 to range between 175,000 and 180,000 megawatt hours with corresponding renewable electricity revenues ranging between $17 million and $18 million.

• Duration of U.S. federal government shutdown may extend finalization of EPA's supplemental rule and RVOs into 2026. - Profitability highly dependent on market price of environmental attributes, including RINs.

Q: You maintained your 2025 RNG production guide, which would imply a step-up quarter-over-quarter in the fourth quarter even at the low end of the guide. Could you talk about the drivers of the step up? Is this just better operations? Or is there any sort being that would push things up. And then thinking about your RNG production for 2026, I think most of your new projects are really more for 2027. So at this stage, would it be appropriate to think of 2026 RNG production is probably pretty similar to 2025?

A: Thanks, Matthew. Thanks for joining our call. Yes, we continue to maintain our production ranges for RNG for the full 2025 year, which implies an expected step-up to hit the low end in the fourth quarter. It's a combination of a variety of factors, improvement in feedstock supply, which is also being beneficial at our Apex facility that we mentioned associated with some improvements in a newer plan. We continue to work with our rum landfill site to work through those wealth field challenges that we've been experiencing. So yes, we do believe we expect a continued uplift in our quarter-over-quarter production as we've been experiencing in 2025. Notably, in 2026, we have a policy not to provide other than current operating year guidance expectations. We'll look to release those expectations at our full year results release that next year in 2026 in March but we expect to continue to expect our normal growth rate in going into 2026 as well.

Q: I know the RIN pricing is out here control EPA and such. I just want to switch gears to something that improved in the quarter that was nice to see it seems like the maintenance CapEx wave might be hopefully done, there was some catch up there in the last 12 months for overhauled engines and things like that. Can you just kind of speak to that a bit? The OpEx looked good, do you expect any more kind of catch-up maintenance spending in the next couple of quarters? Or are you past it?

A: Thanks, Tim. I appreciate the question. I would view the shift in the operating expenses as less of a catch-up and more of some nonlinear expense items that correspond to the life cycle of the equipment. There is a component of it that although it's bundled in your operating expenses, it is directed towards noncapitalizable investment into some of the debottlenecking of feedstock volumes for well field production. And so you're seeing that corresponding lift in your production volumes as you're moving quarter-to-quarter. Kevin's explanation of your expected growth rate. We do not see any meaningful increase as we go into the outlook of operating expenses other than onboarding, obviously, our new Turkey Creek facility in 2026. And so you have to compare that to the revenue and the EBITDA lift that we get from commissioning that project in the first quarter.

Q: My question, I wanted to ask about G&A. I understand you talked about the variance versus a year ago. but curious what the drivers were for the difference versus last quarter? It seems like this quarter was quite a bit lower versus your run rate. So curious if you could just give a bit of color there.

A: Yes. The vast majority with that Betty is associated with timing of various professional fees, items like that. We are noticing a nominal increase in audit fees and auditor fees. As a reminder, this is our final year of EGC status. So there's some additional work as we're prepping for our first year in 2026 of a fully integrated audit. Last year, as we noted, there was the uplift in stock-based compensation associated with an employee termination. And then if you remember, there was another employee termination in the second quarter of 2024. That also was a onetime increase to G&A. So there are some blips in the third quarter of last year, second quarter of this year that we're getting through as we get back into a more normalized G&A run rate.