• Adjusted EBITDA: $21.3 million for Q3 2024, up from $14.2 million in Q3 2023.
• Revenue: $105 million for Q3 2024, compared to $96 million in Q3 2023.
• Cash and Investments: Ended Q3 2024 with $243.5 million.
• RNG Sales Volume: 60 million gallons in Q3 2024.
• Cash Flow from Operations: $21.4 million for Q3 2024, up from $7.7 million in Q3 2023.
• RIN Credit Prices: Average of $3.35 in Q3 2024, compared to $3.01 in Q3 2023.
• LCFS Credit Prices: Average of $55.67 in Q3 2024, compared to $74.20 in Q3 2023.
• RNG Production Volume Estimate for 2025: 4 million to 6 million gallons.

• Warning! GuruFocus has detected 2 Warning Sign with CLNE.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Clean Energy Fuels Corp (NASDAQ:CLNE) reported a significant increase in adjusted EBITDA, reaching $21.3 million for Q3 2024 compared to $14.2 million in the same quarter last year.
• The company sold 60 million gallons of renewable natural gas (RNG) during the quarter, contributing to a revenue increase to $105 million from $96 million in Q3 2023.
• CLNE expanded its fueling network by almost 15% over the past year, with strategic station openings, including a new station for Amazon in New Jersey.
• The introduction of the Cummins X15 N engine is expected to drive additional fuel volumes at CLNE stations, with positive feedback from major fleets like JB Hunt and UPS.
• CLNE's partnership with Tourmaline in Canada is expanding, with new stations opening and plans for a natural gas fueling corridor, indicating strong growth potential in the Canadian market.

Negative Points

• The expiration of the Alternative Fuel Tax Credit at the end of 2024 creates uncertainty for CLNE's 2025 financial outlook, potentially impacting revenue by $22 million.
• Lower credit prices for the Low Carbon Fuel Standard (LCFS) in 2024 compared to 2023 have negatively affected revenues.
• The company's RNG production projects are still ramping up, with some projects not expected to produce until late 2025, impacting short-term profitability.
• CLNE faces regulatory uncertainties, particularly concerning the future of the LCFS program and federal tax credits, which could affect long-term strategic planning.
• Operational costs during the construction phase of the Idaho RNG project are higher than usual, impacting current financial performance.

Q & A Highlights

Q: Can you elaborate on the opportunities and timeline for the Moss partnership projects? A: Andrew Littlefair, CEO: Darryl Moss has a history of bringing projects online, and we anticipate the first four of six projects to be commissioned by late 2025 or early 2026. These projects take over a year to complete, and we're working to get as many under construction this year to qualify for the ITC.

Q: How do you foresee the rollout of the X15 engine into fleets? A: Andrew Littlefair, CEO: We are optimistic about the X15 engine, which is a significant part of the over-the-road engine market. Large fleets like UPS have shown interest, and we expect a mix of smaller and larger deployments. The focus is on broadening the fleet base to achieve significant market penetration.

Q: What is the status of the R&G production guidance for 2025, and will you receive California LCFS credits? A: Robert Vreeland, CFO: We expect 4 to 6 million gallons of R&G production in 2025. We are in the process of applying for LCFS credits and anticipate receiving them by the second half of 2025.

Q: Can you discuss the payback period for customers using the X15 engine? A: Andrew Littlefair, CEO: The payback period is approximately 2 to 2.5 years, assuming a $40,000 to $50,000 premium for the engine and a $1 spread between diesel and natural gas. The incremental cost could be higher, but customers might save more per gallon, potentially shortening the payback period.

Q: How does the profitability of Canadian operations compare to the U.S., and what are your plans for station expansion in Canada? A: Andrew Littlefair, CEO: The economics in Canada are strong due to cheap natural gas, offering significant savings over diesel. We plan to build a network starting with seven stations in Western Canada, potentially expanding to 20. The business model is similar to the U.S., focusing on growing the market alongside station development.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.