Montauk Renewables (MNTK -10.10%), a leading renewable natural gas (RNG) and renewable electricity producer, reported its financial results for the second quarter of fiscal 2025 on August 6, 2025. The company delivered modest top-line growth, with revenue of $45.1 million (GAAP), surpassing analyst expectations of $44.4 million. However, profitability lagged: earnings per share (EPS, GAAP) were $(0.04), well below the $0.015681 estimate, as higher operating expenses and weaker prices for Renewable Identification Numbers (RINs) pressured margins. Compared to Q2 2024, revenue (GAAP) increased 4.1%, but adjusted EBITDA declined 27.7%. Overall, the quarter highlighted stable operational performance, but underscored ongoing challenges from regulatory delays, market pricing, and rising costs.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.04) | $0.02 | $(0.01) | 300.0 % |
| Revenue (GAAP) | $45.1 million | $44.4 million | $43.3 million | 4.1 % |
| Adjusted EBITDA | $5.0 million | N/A | N/A | |
| RNG Production (MMBtu) | 1.4 million | 1.4 million | 0.0 % | |
| RINs Sold (million) | 11.1 | 10.0 | 11.0 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company Overview and Strategic Focus Areas
Montauk Renewables is a U.S.-based company specializing in the capture and conversion of biogas from landfill and agricultural waste into renewable natural gas and electricity. It operates one of the largest networks of RNG projects in the United States, generating revenue primarily through the sale of environmental credits and energy products.
The company's business model centers on securing long-term supply agreements for organic waste, deploying advanced processing technologies, and monetizing government-issued credits such as RINs and Low Carbon Fuel Standard (LCFS) credits. Recent focus areas include diversifying feedstock sources, especially into agricultural waste like dairy and swine manure, and expanding capacity through new facility developments. Regulatory incentives, strategic partnerships, and operational efficiency remain core success factors for Montauk.
Quarter Highlights: Financial and Operational Performance
Revenue (GAAP) rose to $45.1 million, edged above analyst expectations on a GAAP basis and up 4.1% from the prior year. This increase was driven in part by the timing of revenue under a short-term fixed price contract and a higher volume of RINs sold, which measure renewable fuel credits generated by using RNG as transportation fuel. Montauk sold 11.1 million RINs, a jump of 10.5% over last year. However, the key RIN market price fell sharply, with the company realizing an average of $2.42 per RIN compared to $3.12 in Q2 2024--a 22.4% drop in average realized RIN price compared to Q2 2024 that directly pressured margins.
RNG production remained flat at 1.4 million MMBtu, showing production stability but no growth over the prior year period. Operating and maintenance costs for RNG facilities rose 22.0%, reaching $17.0 million. The company attributed this jump mainly to scheduled maintenance and operational improvements at facilities including its Apex, McCarty, Rumpke, and Atascocita sites.
Total operating expenses (GAAP) rose 11.8%, leading to an operating loss of $(2.4) million. Net loss (GAAP) expanded to $(5.5) million versus a $(0.7) million loss in Q2 2024. Adjusted EBITDA (a non-GAAP measure) came in at $5.0 million, down from $7.0 million in Q2 2024.
The quarter also saw revenue recognition delays due to regulatory changes. The Environmental Protection Agency's new Biogas Regulatory Reform Rule, which altered the process for separating and selling RINs, meant that around 3.0 million RINs generated were not available for sale at quarter end. This timing impacted revenue. Meanwhile, The Renewable Electricity Generation segment produced 42,000 megawatt hours, down from 45,000 in Q2 2024. Operating and maintenance costs in this segment were nearly flat year over year, up 2.0%.
On the project front, Montauk completed construction of a second RNG processing facility at its Apex (Amsterdam, Ohio) site, increasing future capacity. The company also signed a 10-year power purchase agreement (PPA) in July 2025 for its North Carolina agricultural RNG project, locking in an average price of $48 per megawatt hour for electricity from this new facility, with the PPA term beginning upon commissioning. In addition, a new joint venture, GreenWave Energy Partners, LLC, was formed to help facilitate future transportation and utilization of RNG volumes. These developments are part of ongoing efforts to diversify revenues and mitigate exposure to landfill-focused operations.
Looking Ahead: Guidance and Key Watch Areas
Montauk management reaffirmed its full-year 2025 guidance, expecting RNG revenue between $150 million and $170 million, RNG production between 5.8 million and 6.0 million MMBtu, renewable electricity revenue between $17 million and $18 million, and renewable electricity generation between 178,000 and 186,000 megawatt hours.
With higher costs and cash flow timing affected by regulatory changes, investors should monitor progress on new facility ramp-ups, the pace of RIN separation and sales, and evolving policy trends, especially potential amendments to the Renewable Fuel Standard.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
