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DATE

Thursday, Aug. 6, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

  • Chief Legal Officer and Secretary - John Ciroli
  • President and Chief Executive Officer - Sean McClain
  • Chief Financial Officer - Kevin Van Asdalan

TAKEAWAYS

  • Revenue -- $54.0 million, an increase of 19.7% driven primarily by $8.4 million in environmental attribute revenue from the GreenWave joint venture and pathway dispensing.
  • Adjusted EBITDA -- $12.3 million, an increase of 144.5% reflecting the impact of RIN distributions from joint venture partnerships.
  • Net Income -- $0.2 million, an improvement of $5.7 million compared to a net loss of $5.5 million in the second quarter of 2025.
  • Renewable Natural Gas (RNG) Production -- 1.5 million MMBtu, an increase of 3% resulting from wellfield enhancements at the McCarty and Apex facilities.
  • Renewable Electricity Production -- 44,000 megawatt hours, an increase of 4.8% due to higher gas flows at the Bowerman facility.
  • RNG Segment Revenue -- $40.9 million, an increase of 0.3% as higher RIN sales volumes offset a 15.7% decline in average commodity natural gas pricing.
  • Electricity Segment Revenue -- $4.5 million, an increase of 4.8% primarily driven by higher production volumes.
  • General and Administrative Expenses -- $7.7 million, a decrease of 15.2% due to a prior-year onetime charge of $1.6 million for accelerated share vesting.
  • Capital Expenditures -- $61.3 million for the first six months of 2026, with $49.8 million dedicated to the development of Montauk Ag Renewables.
  • Turkey Phase 1 Investment -- $200 million, representing the unchanged total capital investment expectation for the first phase of the North Carolina project.
  • Hog Space Capacity -- Over 350,000 spaces, representing progress toward a target of 400,000 to 450,000 spaces through agreements with over 50 farming locations.
  • Self-Marketed RINs -- 14.3 million, an increase of 29.1% as the company transitioned to self-marketing environmental attributes.
  • Average Realized RIN Price -- $2.45, an increase of 1.2% compared to $2.42 in the second quarter of 2025.
  • GreenWave Revenue -- $4.8 million, generated from the sale of approximately 1.9 million RINs distributed from the joint venture.
  • Q3 RIN Commitments -- Average price of $2.66, covering the majority of expected production for the third quarter of 2026.
  • Debt Outstanding -- $155 million, representing the balance under the senior credit facility with HASI as of June 30, 2026.
  • Full Year 2026 RNG Volume Guidance -- 5.8 million to 6.0 million MMBtus, reaffirmed by management.
  • Full Year 2026 RNG Revenue Guidance -- $175 million to $190 million, reaffirmed by management.
  • Full Year 2026 Electricity Volume Guidance -- 185,000 to 195,000 megawatt hours, reaffirmed by management.
  • Full Year 2026 Electricity Revenue Guidance -- $23 million to $26 million, reaffirmed by management.
  • Fixed-Price RNG Contract Volume -- Decreased 80%, resulting from the expiration of lower-price historical contracts.
  • Unseparated RIN Generation -- Decreased 95.4% due to the transition to the biogas regulatory reform rule in 2025.
  • Asset Impairments -- $0.7 million, related to identified nonoperable assets.
  • Cash and Cash Equivalents -- $15.8 million, net of restricted cash as of June 30, 2026.

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RISKS

  • CFO Van Asdalan stated, "Our profitability is highly dependent on the market price of environmental attributes, including the market price for RINs," noting that internal decisions to delay RIN transfers can negatively impact period revenue.
  • President McClain noted the company identified technical issues at the Turkey facility, stating the need for "programming modifications" to provide "enhanced protection for our processing equipment and electrical transformers."
  • CFO Van Asdalan reported $0.7 million in impairments related to "identified, discrete or non-operable assets" during the second quarter of 2026.

SUMMARY

Management of **Montauk Renewables, Inc. (MNTK +2.76%)** reported the commencement of power generation at the Turkey, North Carolina facility in July 2026, marking a milestone for the company’s swine waste-to-energy operations. The company is transitioning away from historical fixed-price renewable natural gas contracts, which significantly reduced commodity-linked revenue while increasing exposure to the environmental attribute market. Financial performance in the second quarter of 2026 was bolstered by the GreenWave joint venture, which provides transportation pathways for third-party volumes and contributed approximately $4.8 million in revenue. The company maintained its full-year 2026 production and revenue guidance across both primary segments while managing technical modifications at its newest production site.

  • On the call, management stated it expected to complete all programming modifications at the Turkey facility by mid-August to protect processing hardware and increase production volumes.
  • President McClain noted an increase in obligated parties entering the market earlier in the compliance year, stating, "I do see an increase in the predominance of those obligated parties stepping into the marketplace and buy more regularly earlier on in the compliance year than we've seen in previous years."
  • CFO Van Asdalan confirmed compliance with all financial covenants under the $155 million HASI senior credit facility as of June 30, 2026.
  • The company reported that its current feedstock collection infrastructure is capable of serving more than 250,000 hog spaces, with additional equipment installations planned for the second half of 2026.
  • CFO Van Asdalan addressed the company's liquidity and accounts receivable, stating, "We do not believe we have any collectibility issues within our receivables balances."
  • Management indicated that production of power at the Turkey facility is expected to qualify for both swine Renewable Energy Certificates (RECs) and enhanced RECs in upcoming months.

INDUSTRY GLOSSARY

  • D3 RIN: A cellulosic biofuel credit under the Renewable Fuel Standard, representing the environmental value of one gallon of renewable fuel.
  • MMBtu: One million British Thermal Units, a standard unit of measurement for natural gas energy content.
  • REC (Renewable Energy Certificate): A market-based instrument that represents the property rights to the environmental attributes of renewable electricity generation.
  • RIN (Renewable Identification Number): A serial number assigned to a batch of biofuel for the purpose of tracking its production, use, and trading as required by the EPA.
  • RNG (Renewable Natural Gas): Biogas captured from organic waste sources that has been processed to meet pipeline-quality standards.
  • RVO (Renewable Volume Obligation): The annual volume of renewable fuels that an obligated party, such as a refiner, must ensure is blended into gasoline or diesel.
  • Syngas: A fuel gas mixture consisting primarily of hydrogen and carbon monoxide produced through the gasification of organic feedstock.

Full Conference Call Transcript

Operator: Good day, everyone, and thank you for participating in the Montauk Renewables Second Quarter 2026 Conference Call today. I'd like to turn the call over to Mr. John Ciroli, Chief Legal Officer and Secretary as he provides some important cautions regarding forward-looking statements and non-GAAP financial measures contained in the earnings materials made on this call. John, please go ahead.

John Ciroli: Thank you, and good day, everyone. Welcome to Montauk Renewables earnings conference call to review the second quarter 2026 financial and operating results and developments. I'm John Ciroli, Chief Legal Officer and Secretary of Montauk. Joining me today are Sean McClain, Montauk's President and Chief Executive Officer, to discuss business developments and Kevin Van Asdalan, Chief Financial Officer, to discuss our second quarter 2026 financial and operating results. At this time, I would like to direct your attention to our forward-looking disclosure statement.

During this call, certain comments we make constitute forward-looking statements and as such, involve a number of assumptions, risks and uncertainties that could cause the company's actual results or performance to differ materially from those expressed in or implied by such forward-looking statements. These risk factors and uncertainties are detailed in Montauk Renewables SEC filings. Our remarks today may also include non-GAAP financial measures. We present EBITDA and adjusted EBITDA metrics because we believe the measures assist investors in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles.

Additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures can be found in our slide presentation and our second quarter 2026 earnings press release and Form 10-Q issued and filed on August 5, 2026, and which is available on our website at ir.montaukrenewables.com. After our remarks, we will open the call to analyst questions. We ask that you please keep to 1 question to accommodate as many questions as possible. And with that, I will turn the call over to Sean.

Sean McClain: Thank you, John. Good day, everyone, and thank you for joining our call. In July 2026, we began generating power for sale from our Turkey, North Carolina facility. This production of power is expected to be eligible to generate both swine RECs and enhanced RECs in subsequent months. As we work to increase the volumes of power and RECs that are able to be generated from our volume of produced syngas. We have identified specific programming modifications to our installed electrical switch gear. The installation of these modifications will provide for both the increase in production volumes as well as enhanced protection for our processing equipment and electrical transformers.

We expect to have all programming completed by mid-August and consistently generate power in RECs from all available collected feedstock volumes. We continue to progress negotiations with entities that are required to purchase RECs under the North Carolina Clean Energy and Portfolio Standard in addition to our existing REC contract with Duke. We also continue to progress our installation of feedstock collection in our contracted farming locations. As of the end of July, we have entered into long-term agreements with over 50 separate farming locations, providing us access to over 350,000 of the 400,000 to 450,000 hog spaces we are targeting to fully supply our first phase of development.

We are currently able to collect for more than 250,000 hog spaces and will continue farms -- collection equipment installations during the second half of 2026. Our capital investment expectation for the first phase of this project remains unchanged at $200 million, and we continue to expect a ramp-up in production volumes throughout 2026 directly related to additional feedstock collection. Our joint venture, GreenWave, continues to address the limited capacity of RNG utilization for transportation offering by third-party RNG volumes access to unique and proprietary transportation pathways. GreenWave matches is available dispensing capacity with available third-party volumes and separates and distribute RINs to the partners of GreenWave.

As a result, we received approximately 1.5 million in separated RINs distributed from GreenWave in the second quarter of 2026. While our recent development focus has been prioritized on achieving and increasing production and revenue at our Turkey, North Carolina facility, we continue thoughtful and measured progress with our other announced development opportunities and expect to share those progress updates throughout the second half of 2026. And with that, I will turn the call over to Kevin.

Kevin Van Asdalan: Thank you, Sean. I will be discussing our second quarter 2026 financial and operating results. Please refer to our earnings press release, Form 10-Q and the supplemental slides that have been posted to our website for additional information. Our profitability is highly dependent on the market price of environmental attributes, including the market price for RINs. As we self-market a significant portion of our RINs, a decision not to commit to transfer available RINs during a period will impact our revenue and operating profit. We have entered into commitments to transfer the majority of RINs generated and available for sale from our expected 2026 3rd quarter RNG production at an average RIN of $2.66.

This compares to the average D3 index price for the month of July 2026 of $2.64. Total revenues in the second quarter of 2026 were $54.0 million, an increase of $8.9 million or 19.7% compared to $45.1 million in the second quarter of 2025. The increase is primarily related to environmental attribute revenues of approximately $8.4 million from RINs sold related to the distribution of RINs from our GreenWave joint venture and RINs related to pathway dispensing. We had no RINs distributed and sold from GreenWave in the second quarter of 2025.

Our second quarter of 2026 RNG volumes sold under fixed lower-price contracts decreased approximately 80% as compared to our second quarter of 2025 as a result of the expiration of these contracts. Our RNG commodity revenue decreased approximately 63.7%. These decreases were offset by an increase in RINs sold of 29.1%. Our RINs generated and unseparated decreased approximately 95.4% as a result of the transition to the biogas regulatory reform rule in 2025. Total general and administrative expenses were $7.7 million for the second quarter of 2026.

A decrease of $1.3 million or 15.2% compared to $9.0 million in the second quarter of 2025, driven primarily by a onetime accelerated vesting of approximately $1.6 million from certain restricted share awards in 2025 due to the termination of an employee. Turning to our segment, operating metrics. I'll begin by reviewing our Renewable Natural Gas segment. We produced 1.5 million MMBtu of RNG during the second quarter of 2026, an increase of 43,000 or 3% compared to 1.4 million MMBtu during the second quarter of 2025. Our McCarty facility produced 53,000 MMBtu more in the second quarter of 2026 compared to the second quarter of 2025 as a result of landfill host wellfield operational and collection system enhancements.

Our Apex facility produced 39,000 MMBtu more in the second quarter of 2026 as compared to the second quarter of 2025 as a result of increased feedstock gas from our improvements related to the landfill collection system. Our Galveston facility produced 26,000 MMBtu fewer in the second quarter of 2026 compared to the second quarter of 2025 and as a result of landfill host -- as a result of the landfill host assuming responsibility of wellfield operations and maintenance beginning in 2026.

Our Atascocita facility produced 37,000 MMBtu in the second quarter of 2026 compared to the second quarter of 2025 as a result of landfill host wellfield operational and collection system enhancement project timing as well as planned facility maintenance. Revenues from the Renewable Natural Gas segment during the second quarter of 2026 were $40.9 million, an increase of $0.1 million or 0.3% compared to $40.8 million during the second quarter of 2025. Average commodity pricing for natural gas for the second quarter of 2026 was 15.7% lower than the second quarter of 2025.

In the second quarter of 2026, we self marketed 14.3 million RINs, representing a $3.2 million increase or 29.1% compared to 11.1 million RINs self marketed during the second quarter of 2025. Average pricing realized on RIN sales during the second quarter of 2026 was $2.45 as compared to $2.42 during the second quarter of 2025, an increase of 1.2%. This compares to the average D3 RIN index price for the second quarter of 2026 of $2.54 being approximately 7.6% higher than the average D3 index price for the second quarter of 2025 of $2.36.

At June 30, 2026, we had approximately 0.4 million MMBtu available for RIN generation, 0.1 million RINs generated but unseparated and no RINs separated and unsold. At June 30, 2025, we had approximately 0.3 million MMBtu available for RIN generation, 3.0 million RINs generated but unseparated, and 0.1 million RINs separated and unsold. Our operating and maintenance expenses for our RNG facilities during the second quarter of 2026 were $15.6 million, a decrease of $1.4 million or 8.2% compared to $17.0 million during the second quarter of 2025. Our McCarty facility operating and maintenance expenses decreased approximately $0.9 million, primarily related to the timing of maintenance related to gas processing equipment.

Our Apex facility operating and maintenance expenses decreased approximately $0.5 million primarily related to timing of the gas processing preventative maintenance. We produced approximately 44,000 megawatt hours in renewable electricity during the second quarter of 2026, an increase of approximately 2,000 megawatt hours or 4.8% compared to 42,000 megawatt hours during the second quarter of 2025. Our Bowerman facility produced approximately 3,000 megawatt hours more in the second quarter of 2026 compared to the second quarter of 2025. The increase is primarily related to increased gas flows due to landfill host wellfield improvements.

Revenues from renewable electricity facilities during the second quarter of 2026 were $4.5 million, an increase of $0.2 million or 4.8% compared to $4.3 million in the second quarter of 2025. The increase was primarily driven by the increase in production volumes. Our renewable electricity generation operating and maintenance expenses during the second quarter of 2026 were $5.1 million, an increase of $0.3 million or 5.3% compared to $4.8 million during the second quarter of 2025. The increase was driven by an increase in non-capitalizable costs of approximately $1.2 million at our Montauk Ag Renewables project in Turkey, North Carolina.

Our Bowerman facility operating and maintenance expenses decreased approximately $0.7 million, primarily related to decreased wellfield operational costs and timing of gas processing preventative maintenance. We recorded within operating and maintenance expenses, approximately $8.3 million in the second quarter of 2026 related to the cost of RINs distributed from GreenWave when sold and the cost related to pathway dispensing associated with the dispensing of RNG. There were no such expenses incurred during the second quarter of 2025. During the second quarter of 2026, we recorded impairments of $0.7 million, an increase of $0.3 million compared to $0.4 million in the second quarter of 2025. The increase relates specifically to identified, discrete or non-operable assets.

We did not record any impairments during the second quarter of 2026 related to our estimate of future cash flows. Operating loss for the second quarter of 2026 was $75,000, a decrease of $2.3 million or 96.8% compared to an operating loss of $2.4 million for the second quarter of 2025. RNG operating income for the second quarter of 2026 was $9.6 million, an increase of $0.4 million or 4.5% compared to operating income of $9.2 million for the second quarter of 2025. Renewable Electricity generation operating loss for the second quarter of 2026 was $2.1 million, a decrease of $0.2 million or 9.2% compared to an operating loss of $2.3 million for the second quarter of 2025.

Other income in the second quarter of 2026 was $2.3 million, an increase of $3.6 million compared to other expenses of $1.3 million in the second quarter of 2025. In the second quarter of 2026, we recorded approximately $3.8 million in income related to our joint venture investment in GreenWave. There was no such income reported during the second quarter of 2025. We received approximately 1.5 million in RIN distributed from GreenWave in the second quarter of 2026. We sold approximately 1.9 million RIN and recorded revenues from those RINs sold of approximately $4.8 million. Additional information on GreenWave can be found in the supplemental slides that have been posted to our website. Turning to the balance sheet.

June 30, 2026, $155 million was outstanding under our new senior credit facility with HASI. Our financial debt covenant commenced June 30, 2026, and as of June 30, 2026, we are in compliance with all applicable financial covenants under this facility. For the first 6 months of 2026, our capital expenditures were $61.3 million, of which $49.8 million and $3.6 million were related to our ongoing development of Montauk Ag Renewables and our Bowerman RNG facility, respectively. We had approximately $17.3 million in capital expenditures included within our accounts payable or accrued liabilities at June 30, 2026. As of June 30, 2026, we had cash and cash equivalents net of restricted cash of approximately $15.8 million.

Our new senior credit facility with HASI requires us to meet quarterly liquidity balances as defined in the underlying agreement. We had accounts and other receivables of approximately $5.6 million as of June 30, 2026. We do not believe we have any collectibility issues within our receivables balances. As of June 30, 2026, we held no RINs distributed from GreenWave inventory on our balance sheet. Adjusted EBITDA for the second quarter of 2026 was $12.3 million, an increase of $7.3 million or 144.5% compared to adjusted EBITDA of $5.0 million for the second quarter of 2025.

EBITDA for the second quarter of 2026 was $11.7 million, an increase of $7.1 million or 151.4% compared to EBITDA of $4.6 million for the second quarter of 2025. Net income for the second quarter of 2026 was $0.2 million, an increase of $5.7 million as compared to a net loss of $5.5 million for the second quarter of 2025. I'll now turn the call back over to Sean.

Sean McClain: Thank you, Kevin. In closing, and although we don't provide guidance as to our internal expectation on the market price of environmental attributes, including the market price of D3 RINs, we would like to provide our full year 2026 outlook. We are reaffirming our RNG production volumes to range between 5.8 million and 6 million MMBtus with corresponding RNG revenues to range between $175 million and $190 million. We expect our renewable electricity production volumes to range between 185,000 and 195,000 megawatt hours with corresponding revenue -- electricity revenues to range between $23 million and $26 million, which is reflective of our current expectations of production at our Montauk Ag Renewables facility in Turkey, North Carolina.

And with that, we will pause for any questions.

Operator: [Operator Instructions] Our first question comes from Tim Moore from Clear Street.

Timothy Michael Moore: Congratulations on the progress. RINs pricing seems to have stabilized in the past 6 or 7 months. It was nice to hear your commentary on the sequential increase in the third quarter. Can you just -- just from your own visibility and what you're seeing, is there just improved transparency in the marketplace for that compared to last year? I know the EPA website stopped posting in January last year, but just kind of what are you seeing and kind of the behaviors around RIN purchases?

Kevin Van Asdalan: Yes, Tim, I'll handle the first section, and then maybe Sean can offer some guidance -- or not guidance, some clarity in regards to our obligated party process. But while we have seen some RINs stability here in the first, call it, 5 or 6 months, we think some of that stability was coming through -- there was an extended year settlement for 2025 that completed itself in the second quarter.

And I believe getting on the other side of sort of completing the 2025 vintage period and moving into 2026 with a, I guess, a settled RVO and obligated parties getting into their 2026 obligated purchases, we believe that's contributed to the historical path of RIN lack of volatility here in 2026.

Sean McClain: And Tim, what I can offer is obviously reaffirming our strategy when we self-market these RINs rather than marketing them to anyone that is willing to purchase in the short term, we do emphasize and focus on obligated parties to ensure that as many of our generated RIN volumes are purchased by those that have the intention to retire for compliance purposes. I do see an increase in the predominance of those obligated parties stepping into the marketplace and buy more regularly earlier on in the compliance year than we've seen in previous years. So that does tie well into some of the comments that Kevin made.

Timothy Michael Moore: That's great. Nice to see the -- a little bit more buying regular behavior. I have one more question, and I'll save the rest for offline for a catch-up later today. So the revenue guidance for RNG for $175 million to $190 million reiterated, does that include the GreenWave related revenues, such as you receive distributed RINs sold. I'm just kind of curious because that was a contribution, I guess, in the quarter.

Kevin Van Asdalan: Yes. The contribution, we include GreenWave in our forecasts for what we expect to receive from the third-party volumes that we're distributing through that pathway. But yes, so there would be expectations of inclusion of RIN revenues from GreenWave. And we do expect some wellfield enhancement and investments large in the second half of the year to support the production guidance that we have for our RNG segment.

Timothy Michael Moore: No, that's a great clarification, Kevin. I'm including that in my model now.

Operator: This concludes the question-and-answer session. I would now like to turn it back to Sean McClain, CEO, for closing remarks.

Sean McClain: Thank you for taking the time to join us on the conference call today. We look forward to speaking with you when we present our third quarter 2026 results.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.