OPAL Fuels Q2 2026 Earnings: Adjusted EBITDA Rises 40% Despite a GAAP Loss

OPAL Fuels (Nasdaq: OPAL) reported Q2 2026 revenue of $83.4 million, up 4% from $80.5 million a year earlier, while diluted EPS attributable to Class A shareholders fell to a loss of $0.05 from earnings of $0.03. Adjusted EBITDA rose 40% to $23.1 million, but impairment charges, higher interest expense, weaker equity-method results, and a smaller income tax benefit contributed to a $4.1 million GAAP net loss.

Core Earnings Data

Revenue growth was modest, but the adjusted operating result improved more substantially. Management attributed the adjusted EBITDA increase to Section 45Z production tax credits, Fuel Station Services growth, and G&A cost savings in a flat RIN pricing environment.

The GAAP result moved in the opposite direction. OPAL recorded a $4.1 million impairment charge, while interest expense increased and the income tax benefit declined sharply from the prior-year quarter.

Adjusted EBITDA is a non-GAAP measure. Reported revenue excludes revenue from equity-method investments.

Business and Segment Performance

Fuel Station Services generated the strongest revenue growth, while RNG Fuel revenue declined despite higher production. Renewable Power weakened on both revenue and adjusted EBITDA, creating the clearest segment-level drag.

RNG production increased 4% to 1.3 million MMBtu. Fuel Station Services sold, dispensed, and serviced 39.0 million GGEs, down 4%, while RNG dispensed as transportation fuel increased 1% to 20.9 million GGEs. The combination of higher Fuel Station Services revenue and lower total delivered volume indicates a divergence between revenue and physical throughput, although the release did not provide a detailed pricing or mix bridge.

OPAL’s share of adjusted EBITDA from equity-method investments declined to $5.5 million from $6.1 million. Its share of net results from those investments also shifted to a $0.6 million loss from $2.0 million of income.

Adjusted EBITDA Growth Did Not Translate Into GAAP Profit

Adjusted EBITDA increased by $6.6 million, supported by lower overhead, Fuel Station Services, and 45Z credits. However, several items outside that operating measure weighed on GAAP earnings.

OPAL recognized a $4.1 million impairment charge, primarily related to assets no longer expected to be used following the repurposing of a renewable power facility for RNG operations. Interest and financing expense rose to $8.6 million from $6.6 million, while equity-method results moved against the company by approximately $2.6 million.

The tax comparison was also significant. OPAL’s pretax loss widened to $8.9 million from $6.1 million, but its income tax benefit fell to $4.7 million from $13.7 million. The much larger prior-year tax benefit had converted a pretax loss into quarterly net income, whereas the smaller Q2 2026 benefit was insufficient to offset the current pretax loss.

Profitability, Cash Flow and Balance Sheet

Cash flow figures were provided for the six months ended June 30 rather than Q2 alone. First-half operating cash flow increased to $23.7 million from $21.8 million, even though OPAL reported a $9.7 million six-month net loss. A $23.7 million reduction in accounts receivable was an important contributor to operating cash generation.

First-half purchases of property, plant, and equipment rose to $52.7 million from $33.4 million. Operating cash flow therefore fell approximately $29.0 million short of those capital expenditures, compared with an approximately $11.6 million shortfall a year earlier. OPAL also recorded $10.8 million as its share of capital expenditures at unconsolidated entities.

Liquidity totaled $162.3 million at June 30, consisting of $91.4 million in cash and cash equivalents, $19.3 million of unused revolver capacity, and a $51.6 million undrawn preferred stock facility. Current and long-term loans totaled approximately $431.7 million, up from $352.1 million at December 31, 2025. Net financing cash inflow was $101.7 million during the first half, helping fund investment and increase the cash balance.

OPAL also reported $16.3 million of RNG pending monetization at quarter-end. In April, the company entered into a $100 million master agreement establishing terms for monetizing Section 45Z production tax credits.

Management Commentary

Co-CEO Adam Comora identified 45Z credits, Fuel Station Services growth, and G&A savings as the main contributors to Q2 adjusted EBITDA growth despite flat year-over-year RIN prices.

Co-CEO Jonathan Maurer said OPAL is pursuing production and EBITDA improvements at existing facilities that require limited capital while continuing construction of new RNG facilities. Management views the company’s integrated production and distribution model as a way to benefit from the economic advantage of natural gas relative to diesel.

Investor Risks

• GAAP profitability remains under pressure. Higher interest expense, impairment charges, and weaker equity-method results offset the improvement in adjusted EBITDA during Q2.
• Investment spending exceeds internally generated cash. First-half operating cash flow did not cover property and equipment purchases, while reported loans increased from year-end.
• Environmental-credit timing and pricing can affect results. OPAL ended the quarter with $16.3 million of RNG and credits pending monetization, and management described RIN pricing as flat from a year earlier.
• Renewable Power performance has weakened. Segment revenue fell approximately 22%, adjusted EBITDA declined approximately 88%, and asset repurposing contributed to the quarter’s impairment charge.
• Facility conversion efficiency remains an operating variable. Excluding Sunoma and Biotown, utilization of inlet gas was 76.6%, below the company’s generally expected range of 80% to 90%, although it improved from 75.0% a year earlier.

Summary

OPAL Fuels delivered modest Q2 revenue growth and a 40% increase in adjusted EBITDA as 45Z credits, Fuel Station Services, and lower G&A costs supported the operating result. Those improvements did not reach GAAP earnings because of impairment, financing costs, weaker investment income, and a smaller tax benefit. The next operating priorities are converting higher RNG production into monetized revenue, improving facility efficiency, and balancing construction spending with liquidity and debt.