Transcript: Clean Energy Fuels Q2 2026 Earnings Conference Call

Clean Energy Fuels (NASDAQ: CLNE ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

The full earnings call is available at Summary Clean Energy Fuels reported second-quarter 2026 revenue of $106 million, with RNG volumes contributing significantly and adjusted EBITDA reaching $16 million. The company is maintaining its annual financial outlook, supported by a strong balance sheet with $138 million in cash and investments. Strategic progress includes improvement in RNG production at key projects and continued construction of three new projects with Moss Energy Works. The company anticipates positive impact from the Section 45Z clean fuel production credit pending Treasury's finalization expected in Q4.

RNG fuel volumes from heavy-duty trucking remained stable, with increased marketing efforts generating new customer interest. Operational highlights include completion of two additional fueling stations in Canada, enhancing their natural gas network. Clean Energy Fuels has been awarded contracts for hydrogen fueling stations, reinforcing its leadership in alternative fuel infrastructure. The company sees emerging opportunities in power generation solutions, leveraging its nationwide compression capabilities.

New COO, Bart Frabotta, is expected to enhance operational performance and technology integration within the company. Full Transcript OPERATOR Hello and welcome everyone joining today's Clean Energy Fuels second quarter 2026 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.

To register to ask a question at any time, please press star 1 on your telephone keypad. Please note this call is being recorded. We are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to Tom Driscoll.

Please go ahead. Tom Driscoll, Investor Relations Thank you, operator. Earlier this afternoon, Clean Energy released financial results for the second quarter ending June 30, 2026. If you did not receive the release, it is available on the Investor Relations section of the Company's website where the 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 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. 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 of 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. The Company's non-GAAP EPS and adjusted EBITDA will be reviewed on the call and exclude certain expenses that the Company's management does not believe are indicative of the Company's core business operating results. 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.

The directly comparable GAAP information, reasons why management uses non-GAAP information, the 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 SEC on Form 8-K today. With that, I will turn the call over to our President and Chief Executive Officer, Clay Corbus. Clay Corbus, President and CEO Thank you, Tom. Good afternoon everyone.

Today we reported solid results for the second quarter. 106 million of revenue, 63 million of RNG sold and 16 million of adjusted EBITDA. These results are in line with our expectations and keep us on track for our annual financial outlook which we are maintaining. We kept our balance sheet strong and finished the quarter with 138 million in cash and short term investments.

Our upstream RNG production business saw improvement in the second quarter, helped by better weather compared to the first quarter, and continued ramp up at our 2 largest projects, South Fork in Texas and East Valley in Idaho. There is still more work to be done as we ramp production and improve operations across our portfolio and we expect continued improvement in the second half of the year. In addition to our 8 operating RNG projects, we have 3 projects under construction through our joint venture with Moss Energy Works. We continue to make good progress and expect two projects to come online later this year, with the final project finishing up next year.

The Section 45Z clean fuel production credit is an important value driver for our RNG projects. We continue to await Treasury's finalization of the 45Z rules and credit values which is now expected in the fourth quarter. We believe the finalized rule and updated GREET model once released will positively impact our upstream results in 2026 and the years ahead. Our RNG fuel volume from heavy duty trucking held steady during the quarter.

We are seeing a handful of fleets add small numbers of trucks equipped with the X15N, but with the uncertainty surrounding the final 2027 emission standards recently released by the EPA, there has been a large pre-buy of legacy diesel trucks. At the same time, we and others remain deeply engaged with many fleets that continue to show strong interest in RNG, particularly with higher diesel prices. Over the past four to five months, we increased our advertising to target the trucking industry, emphasizing RNG's low stable price compared to diesel. That effort has generated measurable interest and leads with potential new customers.

I also hope you saw the press release we distributed earlier this week about the growing natural gas heavy duty truck market in Canada. We recently completed two additional stations, including a critical node in British Columbia just outside Vancouver that completes a Western Canadian natural gas fueling network. Canada has extremely high taxes on diesel and high truck mileage, which makes the cost comparison with natural gas all that much more attractive. And with the Cummins X15N arriving in the Canadian market, fleets that use a lot of fuel are responding very positively.

As I mentioned on our last call, our legacy markets in transit and refuse continue to provide a solid foundation for us. Twenty-five years after the first CNG buses rolled into cities, the transit market continues to be strong with new opportunities and new wins. In fact, just last week the Federal Transit Administration announced that their funding will prioritize low emission solutions like CNG over zero emission buses. Our fueling expertise also creates opportunities beyond RNG.

Clean Energy has been awarded more contracts than any other company to build hydrogen fueling stations for transit agencies that are expanding with fuel cell buses, reinforcing our leadership in alternative fuel infrastructure. Last week we announced the latest and largest hydrogen project to date, a $27 million contract with Orange County Transportation Authority to design and build a new private station. This station will support OCTA's existing fleet of 10 fuel cell buses plus the 40 buses the agency plans to add, demonstrating both the strength of our customer relationships and scalability and flexibility of our platform.

With nearly 30 years operating in the natural gas sector, our in-house capabilities also extend beyond vehicle fueling and RNG production. As we all know, the country is experiencing a rapidly evolving energy market and power grids are overtaxed. Because of this, we see emerging opportunities for Clean Energy and our ability to serve Independent Power Solutions. Today, no one has nationwide compression capabilities that we do and that CNG doesn't have to go into a vehicle tank.

Large volumes can be put into tube trailers and transported to facilities that need power, but may have issues hooking up with a local grid or are not proximate to a natural gas pipeline. We can solve that problem. We currently serve customers across a range of natural gas solutions and as demand for reliable, cleaner energy grows, customers are increasingly looking to us for these solutions. So let me share a few examples.

As many of you know, we deliver LNG marine bunker fuel to Pasha at the Port of Long Beach and have been doing this for the past three years. We produce the LNG at our plant in Boron, California, transport it to the port using our fleet of LNG cryogenic tanker trucks, and provide fueling services that enable Pasha's container ships to continually operate on cleaner-burning LNG. Our LNG team has experience that includes designing and building LNG systems for gas-to-power applications.

As an example, we were recently awarded contracts for two projects in Puerto Rico that will provide energy security and resiliency for a pharmaceutical manufacturing facility owned by a global healthcare provider and another one for a 6 megawatt power plant for customers that would rather operate facilities with cleaner, less expensive natural gas versus fuel oil or cannot get enough electric power. We deliver compressed natural gas for a fleet of CNG tube trailers to commercial and industrial customers that do not have pipeline access. We have long-standing relationships with large volume customers, but we are also discovering new customers and new markets.

Just recently we signed a contract to supply CNG to a large fulfillment center in California that needs a bridge fuel solution for its power generation while it indefinitely awaits a utility connection. Clean Energy is uniquely positioned to provide natural gas solutions to customers across multiple fuel types, multiple applications, and multiple regions in the United States and Canada. We have room to grow here and we are excited about it. Finally, I want to recognize Bart Frabotta, who we recently appointed as our Chief Operating Officer.

Improving execution and operational performance and driving technology throughout the company is a top priority for us. Bart is the right leader for that work. Over his 15 years at Clean Energy, he has been central to building and running our company. I look forward to what his leadership will help us accomplish.

And with that, it's Bob's turn. Robert Vreeland, CFO Okay, thank you, Clay. Good afternoon to everyone. Overall, our second quarter performance was in line with our expectations from both the financial performance and fuel volume standpoint.

Maintaining our full year guidance assumes improved financial performance in the second half of 2026, which is consistent with our original expectations. Thus far in 2026, fuel pricing, including RIN and LCFS credit values, has been favorable, operating expenses remain on plan and fuel volumes are meeting expectations. Our outlook for 2026 also assumes that final guidance on the GREET model for the 45Z production tax credit will be issued before year end and that could provide up to $5 million of incremental adjusted EBITDA.

Now, if the guidance is delayed or provides minimal benefit over the current production tax credit values, adjusted EBITDA would come in below our $70 to $75 million range. 8 million gallons. Approximately two thirds of the growth came from conventional natural gas, driven by additional fueling locations for large fleet customers, for which we also provide maintenance services. 2 million gallons, reflecting normal variations across customer sectors.

As noted on our first quarter earnings call, RNG volumes declined sequentially because the first quarter included incremental deliveries to customers outside our station network. Through June, RNG volumes remained ahead of our plan. 1 million gallons for the second quarter of 2026, well above the prior year period as our RNG upstream portfolio continues to ramp. Consequently, we saw notable improvement in the operating results of our RNG upstream business in the second quarter compared to the first quarter.

This improvement was contemplated in our plan and guidance. 6 million in the prior-year period. Higher station construction revenue and increased rent and LCFS credit values more than offset lower commodity prices and customer pricing. As expected, revenue declined sequentially from the first quarter, primarily due to lower natural gas prices and reduced gas trading volatility.

Consistent with normal seasonal patterns, fuel margins, including RIN and LCFS credits, were largely in line with our plan for the second quarter of 2026. Fuel and customer mix variations modestly reduced margins during the quarter, which is normal and factored into our outlook for 2026. Our cash and investments of $138 million at the end of June were up from 126 million at the end of March. And through June, we contributed $24 million to our Moss Energy Works dairy joint venture, followed by an additional 12 million in July.

Less than $5 million remains to be contributed before the projects are placed in service. And with that, operator, please open the call to questions. OPERATOR Thank you. If you would like to ask a question, please press Star 1 on your keypad.

To leave the queue at any time, press Star 2. Once again, that is Star 1 to ask a question. And we'll take our first question from Eric Stein with Craig-Hallum. Please go ahead.

Your line is open. Eric Stein, Analyst at Craig-Hallum Hi, Clay. Hi, Bob. Hey, Eric here.

Hey, so maybe if we could just start with the X15N. I mean, I know that we all know that it has been slower on the uptake, certainly slower than Cummins, people in the industry, etc. But could you maybe talk about what you're seeing in terms of the incremental cost? Because for some time that was one of the areas of pushback and I know you mentioned that it's heavy diesel pre-buy.

I know it's also a tough environment for fleets given what has happened to diesel prices. But just curious if at least the incremental cost piece you're hearing that that has normalized to an extent.

Clay Corbus, President and CEO Well, you know, I think as we think about the incremental cost, one thing that has, you know, once again, you know, I think confused the market is that the delay on the certification for the 2027 engines and what that's meant for the diesel boys because to a certain extent, you know, they had already, you know, Cummins and all the other OEMs had already invested all the money into the technology which was going to increase the price of the diesel engine, which would decrease the incremental cost. And with that sort of in disarray, it's sort of unclear then what's going to happen there.

I think, you know, what we hear from what I think is public that we got from the Cummins earnings call is that they're just going to sort of roll it out during the rest of 2027 so that, you know, they're still going to roll it out, but it's not all going to happen in January. It's going to happen over the, you know, over the year. But ultimately you still are going to have that incremental cost or that the incremental cost decreased because diesels are getting more expensive.

I think when you subtract that away, we still work with our other partners in the industry, whether it's with the fuel tank providers, whether it's with the dealers, whether it's with the OEMs or the OEM manufacturers as well, to see what we can do to try to get that price down. I don't think we've seen real movement in the actual price. It's just movement around, you know, how each one of the different participants can chip in a little bit to help bring that price down so that the incremental payback period can get down to a reasonable level.

I would say, though, that what's important about that is it's not just the incremental price, it's how much they're saving on fuel. And that's where, you know, the high price of diesel and I think the, you know, everything you read is that the price of diesel is going to stay high for a while. And even if it doesn't stay high, that volatility does help us. And that's why, you know, we poured a lot more money into advertising to highlight that in the trades this past quarter, which impacted our results.

But we think it was an absolutely good investment in the long term because it has resulted in a lot more appointments, a lot more discussions. It's the type of investment that we want to make in order to drive future growth. Eric Stein, Analyst at Craig-Hallum Got it. That's helpful commentary.

And then maybe one just for Bob. You mentioned that your EBITDA guide, you talked about, you know, $5 million incremental there, depending on the outcome of the 45Z guidance. But to me, incremental would mean that it's above and beyond where your guidance is. But then at the end you talk about that if it were not to come to bear, that that would mean downside to your guidance.

So maybe just talk through some of the puts and takes as we think about that and we see if that occurs.