OPAL Fuels Inc.

Good morning and welcome to the Opal Fuels 4th Quarter 2024 Earnings Call-In Webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. As a reminder, this event is being recorded. I'll now turn the call over to Todd Firestone, Vice President of Investor Relations, to begin. Please go ahead.

Thank you, and good morning, everyone. Welcome to the Opal Fuels fourth quarter and full year 2024 earnings conference call. With me today are co-CEOs Adam Kimora and Jonathan Moore, and Qazi Hassan, Opal's Chief Financial Officer. Opal Fuels released financial and operating results for the fourth quarter and full year 2024 yesterday afternoon. Those results are available on the investor relations section of our website at opalfools.com. The presentation and access to the webcast for this call are also available on our website. After completion of today's call, a replay will be available for 90 days. Before we begin, I'd like to remind you that our remarks, including answers to your questions, contain forward-looking statements, which involve risks, uncertainties, and assumptions. Forward-looking statements are not a guarantee of performance, and actual results could differ materially from what is contained in such statements. Several factors that could cause or contribute to such differences are described on slides two and three of our presentation. These forward-looking statements reflect our views as of the date of this call, and Opal Fuels does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date of this call. Additionally, this call will contain certain discussion of non-GAAP measures A definition of non-GAAP measures used in the reconciliation of these measures to the nearest GAAP measure is included in the appendix of the release and presentation. Adam will begin today's call by providing an overview of the quarter's results, recent highlights, and an update on our strategic and operational priorities. John will then give a commercial and business development update, after which Kazi will review financial results. We'll then open the call for questions. And now I'll turn the call over to Adam Forum, co-CEO of Opal Fuels.

Thank you, Todd, and good morning, everyone, and thank you for participating in Opal Fuel's fourth quarter and full year 2024 earnings call. 2024 was a strong year for Opal Fuels that showcased our disciplined execution across our business segments and the strength of our vertically integrated platform, both key drivers of our market share gains across our segments. Results from the fourth quarter and full year were solid with 2024 adjusted EBITDA of $90 million, in line with our guidance. Our 2024 fuel station service segment EBITDA was $40.2 million, 76% higher versus 2023, and within the guidance we set out for the segment last March. R&G fuel production for 2024 was 3.8 million MMBTUs, up 41% versus 2023, but slightly behind guidance of 4.0 million MMBTUs. The shortfall was mainly due to longer ramp-up timelines at our newly commissioned RNG facilities. John will go into greater detail in a few minutes of what we expect in 2025 from a production and operation standpoint. We brought online three large landfill RNG projects in 2024, totaling 3.8 million MMVTUs of annual design capacity. We commenced commercial operations at Prince William in the spring, then at Sapphire in the third quarter, and finally at Polk in the fourth quarter. Since going public in 2022, we've gone from two operating landfill RNG facilities to 11 now. Over that period, we've more than tripled our annual design capacity and operation and more than doubled our production and adjusted EBITDA. Separately, we continue to execute our growth objectives by putting projects into construction. In 2024, we put nearly 2 million MMBTUs of annual design capacity into construction with the announced projects at Cottonwood, Burlington, and Kirby, all three of which showcase our ability to grow organically through new development opportunities. OPWL's growth continues to be driven by our execution in building and operating successful RNG projects and our vertical integration, which provides the most value for OPWL and our feedstock partners. Of our 17 RNG projects that are in operation and construction, 12 have been the result of securing new gas rights over the past three years, and five were a combination of acquisition and conversion of existing landfill gas to electric projects. We see growth of our RNG production base driven by a continuation of such project opportunities. Our fuel station service segment also had a solid year of execution, meeting our growth objectives for the year. We talk a lot about the strategic value of our downstream segment, but it is worth highlighting the attractiveness of the segment on a standalone basis. The fuel station service segment provides diversification, predictable cash flows, attractive returns on capital, and a large and sustainable growth opportunity. Natural gas, a cheaper, cleaner alternative to diesel fuel for class eight heavy duty fleets, is only fueling around 2% of that market in the U.S., an enormous opportunity to cost-effectively decarbonize that sector as other technologies continue to struggle to meet the operational needs of those fleets. With the introduction of the 15-liter engine, we're optimistic fuel station services will be an increasingly important part of our capital allocation strategy. I'd like to mention some additions to our leadership team since our last call. We're excited that Qazi Hassan has joined as chief financial officer of Opal Fuels. Qazi is an experienced leader who's already adding tremendous value to our team. I'd also like to thank Scott Contino, who served as our interim chief financial officer for over a year. Scott is the consummate professional, and I know Fortistar will enjoy having his full attention now that Qazi has joined Opal. We also hired Darrell Burke as EVP of biogas operations in December. Daryl brings a wealth of operational experience from a long career at Koch Industries. We're fortunate to be able to fill these important leadership positions with a caliber of professionals like Kazi and Daryl, and their impacts are already being felt throughout the organization. We expect 2025 will be another year of growth. Adjusted EBITDA is expected to range from $90 to $110 million in and is based on the 2025 RNG production guidance of 5.0 to 5.4 million MMBTU, 30 to 40% higher versus 2024 at a RIN price assumption of 260 per RIN. This 2025 RIN price is approximately 50 cents per gallon below 2024's realized price. At last year's RIN price, our guidance would be approximately 30 million higher. Every $0.10 shift in D3 RIN price equates to an approximate $5 to $6 million impact on 2025 adjusted EBITDA. The 2025 adjusted EBITDA range includes fuel station services adjusted EBITDA growth of 30% to 50% in 2025 versus 2024. However, our guidance excludes approximately $50 million of expected ITC sales in 2025 compared to the approximately $9 million in 2024, which will contribute meaningfully to operating cash flow growth and earnings per share. In addition, our renewable power, Justity Bata, is experiencing about a $10 million decline in 2025 versus 2024 due to Europe no longer certifying U.S. biogas for its regulatory programs. I also want to comment on the current regulatory environment and why we remain bullish on RNG as an American biofuel. RNG and renewable power from biogas are attractive sources of renewable energy because they are sourced from a stable and growing feedstock or drop-in fuels that use proven and cost-effective technology. RNG is here today in heavy-duty trucking and increasingly in marine fuel. RNG is an American biofuel that aligns quite well with other American liquid biofuels from the agricultural sector within the RFS and other potential public policies. With that, I'll turn it over to John. John?