Clean Energy Fuels Corp. Q1 FY2025 Earnings Call

Please standby, your program is about to begin. Good day everyone and welcome to today's Clean Energy Fuels First Quarter 2025 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. Please note that this call may be recorded and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Robert Vreeland, Chief Financial Officer. Please go ahead.

Thank you, operator. Earlier this afternoon, Clean Energy released financial results for the first quarter ending March 31, 2025. 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 at 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 this call and exclude certain expenses that 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, a 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, Andrew Littlefair.

Thank you, Bob and I hope the sound is okay. I'm in Washington, D.C. and I've been up here working to spread the word on RNG. Bob, thanks. I'm pleased to report we had very solid results for the first quarter of the year. In the quarter, we sold 51 million gallons of renewable natural gas, generated $104 million in revenue and $17 million of adjusted EBITDA. We finished the quarter with $227 million in cash on our balance sheet, a $9 million increase since the start of the year. Our RNG sales volumes were lower compared to the first quarter of 2024. This is driven by lower supply volumes from our third-party RNG producers. Some of our producer partners were impacted by weather and other operational events. These issues are seasonal in nature and we expect to rebound over the remainder of the year. Importantly, we did not see any material decline in demand from our fueling customers despite the market uncertainty regarding the economic impact of tariffs. Our fuel volume is underpinned by steady demand from our fleet customers in the refuse, transit and trucking sectors. In recent months, there has been a lot of attention on tariffs and renewable energy policy. I believe that our business and product, renewable natural gas, are both well positioned. First, tariffs have minimal direct impact on our business. Our network of fueling stations are located in the U.S. and Canada and all of our RNG production facilities are located in the U.S. The vast majority of equipment and materials for our construction projects have already been procured. In fact, earlier this year, we moved compressor equipment from inventory in Canada to our facility in Wyoming as a precaution. Unlike other renewable energy supply chains, our RNG is produced, transported and delivered to customers here in the U.S. We are maintaining our full year financial outlook and CapEx guidance provided on our last call, which Bob will describe in more detail. However, we could feel some indirect impact of tariffs in that it creates uncertainty for our customers in the heavy-duty trucking sector. Potential impacts from tariffs on trucking supply chains, inflation and economic activity may affect our customers' business planning, including purchases of new trucks that would include their emission reduction initiatives, like replacing diesel trucks with trucks equipped with the Cummins X15N and running on RNG. Current market dynamics may slow decision timelines for natural gas vehicle purchases, but we strongly believe any delay will be temporary. The merits of RNG for heavy-duty trucking remain very compelling. In fact, at last week's Advanced Clean Transportation Expo, we heard many speakers comment repeatedly that RNG is a low-carbon fuel with proven technology and infrastructure at a lower cost per mile than diesel. A parade of executives from a variety of fleets extolled the economic and environmental benefits of operating with RNG. An Amazon executive spoke about the total cost of operating their 3,000 heavy-duty trucks on RNG as well as being the only alternative available to help them achieve their climate pledge. Shippers like Unilever and carriers like Paper Transport agreed. The theme was so predominant that Erik Neandross, the coordinator of the expo attended by 11,000 people, claimed that natural gas fueling was having a renaissance as the alternative that is truly viable in the heavy-duty vehicle market. As we said on our last call, we expect early adoption of the X15N this year with a lot of singles versus home runs. Our station network and full suite of customer services are ideally suited to support fleets' initial purchases of trucks with the X15N and the expansion over time. In addition to the opportunities in the heavy-duty trucking sector, our other businesses continue to expand. We proudly serve over 69 transit agencies at 120 different sites and 175 refuse customers at 325 different sites across the U.S. and Canada. RNG has been a dependable, clean, low-cost fueling solution for those fleets for years. As an example, we completed a new RNG station for our long-time customer, Burrtec, a large waste company in Victorville, California, during the first quarter to accommodate an additional 60 trucks. Burrtec also contracted with us to add 50 trucks to fuel with RNG at another station we maintain for them. We're also expanding our relationship with USA Hauling, signing a contract to build another private station in South Windsor, Connecticut, to fuel an additional 40 CNG trucks. I told you about our success in converting existing customers from CNG to RNG. This allows our customers to dramatically and affordably reduce their carbon emissions while providing us with better margins on the fuel. Transit agencies around the country have taken advantage of this opportunity. Recently, we did this for the station we operate at the Nashville Airport. These are just a few examples of developments that occurred in the first quarter but they highlight the nature of our overall business and deep customer relationships. On the federal policy front, we continue to await various outcomes. While the alternative fuel tax credit expired at the end of last year, the Renewable Natural Gas Incentive Act was introduced in the House in March, which, if included in the larger tax bill, could be retroactive to the beginning of the year. We are working closely with members of both houses to keep the RNG tax credit top of mind. The 45Z production tax credit is in the process of being finalized. We included a minimal amount from these credits in our Q1 results and our 2025 financial outlook based on initial guidance. However, once the 45Z credit is finalized, it could contribute more meaningfully to our results. RNG is a commercial transportation option. As a domestically produced biofuel that converts waste into a low-cost, low-emission transportation fuel, we believe RNG fits well with this administration's priorities. In California, the Low Carbon Fuel Standard program updates remain in process. We expect more clarity in the coming weeks. As a reminder, these updates are expected to support higher credit prices over time, which is necessary to support growth in low carbon fuels needed to hit California's targets. Now, briefly turning to our upstream dairy RNG production projects. The six projects that have been operating are doing well and we are always working to improve production. We have two others in advanced construction, expected to be in service by the end of the year, and have additional projects in construction through our development arrangement with Maas Energy, with three projects likely to come online in 2026. In summary, our business is performing well. We are advancing our growth initiatives and have a strong balance sheet. We are confident in the stability and growth potential of our business and see multiple avenues for upside as some of these policy outcomes are resolved. That is why we resumed our share repurchase program in late March. We believe our shares are undervalued and this enables us to make repurchases while still maintaining ample cash to fund our growth. And with that, I will hand the call back to Bob, who will give more details about our strong quarter.

Thank you, Andrew and good afternoon to everyone. And I agree, we did have a strong quarter, first quarter of 2025 with revenue of $104 million. And at face value, the $104 million is basically level with last year. And I know we have a number of variables within our revenues but the one for sure to keep in mind this year is that we do not have the Alternative Fuel Tax Credit in our revenue number because it expired. Last year, there was $5.4 million of Alternative Fuel Tax Credit in the revenue number for 2024. In the quarter, we generated good, positive operating cash flows which actually exceeded our capital expenditures. So net-net, as Andrew mentioned, our cash and investments balances grew from the end of last year. I'll start here on our GAAP earnings and I want to address a couple of items on the GAAP earnings. The first item is the planned removal of the LNG station equipment from various Pilot Flying J sites in 2025. We discussed this on our last earnings call and included the accelerated depreciation in our 2025 outlook. I'm just reporting here that we are proceeding as planned with that project and most of the accelerated depreciation expense was recorded in the first quarter of 2025. The remaining accelerated depreciation will be recorded over time through the end of our lease, which is in August of this year. The second item is the write-off of our longstanding goodwill intangible balance. This non-cash write-off was purely based on our share price at the end of the quarter. Now I've included that charge into the GAAP outlook for 2025 since it's in the books, if you will. These two non-cash items combined amounted to $115 million of our GAAP loss of $135 million in total for the first quarter of 2025. As a side note, the values of our remaining assets are well supported by our positive cash flows and are not directly tied to our share price. From a non-GAAP standpoint, our adjusted EBITDA for the first quarter of 2025 was $17.1 million compared to $12.8 million a year ago. These positive results were driven by continued strength in our fuel distribution business, including an increase in delivery of RNG to fleets at our stations and to customers where we're also performing maintenance and services. Andrew went through the overall decline in RNG, which was very much supply related. There was also about 5 million gallons that were in the first quarter of 2024 that did not repeat in 2025. We've talked about these gallons that we deliver sometimes outside our network just because we're so prevalent in the RNG market. Importantly, because we have such a large footprint between our suppliers and our stations and our maintenance customers, we are able to optimize the flow of the available RNG such that our stations, our customers that we're maintaining and delivering RNG are our priorities. That demand went up. We're actually up year-over-year in those areas, contributing to our positive results for the first quarter. The dairies that we have, our joint ventures there were also impacted by the cold weather but they do remain on plan with their financial results. As Andrew noted, we are making good progress in the ramp-up of these dairies. All in all, a good quarter for us in operations and generating cash and we have a strong but continued cautious optimism about achieving our plan for 2025. And with that, operator, we'll open the call to questions.

Our first question will come from Dushyant Ailani with Jefferies.

I think you just talked about cautious optimism in hitting your 2025 guide. Could you talk about what would take you to the lower end and then what could take you to the upside?

Well, Dushyant, let me start. And Bob, feel free to jump in. Let's see how this tariff shakes out relative to putting some pressure on the future outlook for people buying equipment and trucks. We've noticed and if you look at the numbers coming in, there has been a lowered purchasing of heavy-duty trucks in the first quarter. I guess I'm an optimist, Dushyant, and believe that we're going to have more clarity on tariffs and that I think the market will settle down. You'll see trucking companies begin to increase their purchases as the underlying tariffs begin to be worked out over the course of the year. That's number one. And that will impact our future outlook in terms of volume growth being contributed by the X15N, albeit most of that will end up in the latter part of the year and in early 2026, as we've said. The other is 45Z, depending on how that shakes out, that could end up being a more meaningful number. On this legislation, it's too early to tell but we'll know more here in the next few months if there are some supportive incentives like the RNG Incentive Act. All of these would be significant contributors to us. We still have a very nice underlying relationship between oil and natural gas. That's been very constructive and helps our underlying fuel business. That's contributing. I think, for the most part, these things can resolve themselves in an optimistic way, Dushyant, making us feel comfortable. In the very macro market sense of what's happening with sustainability, what's happening with the effort to continue to be green from our customers, we saw and heard this loud and clear from the ACT conference. Our customers still want to be green but it has to make economic sense. With the framework in the Biden Administration of mandates and California mandates, many of which are pushing for battery electric or hydrogen, many of those have been in the process of being unwound. We believe that RNG is taking its rightful place as a common-sense economic alternative fuel and will end up being the main competitive low carbon fuel versus renewable diesel and diesel fuel. That gives us great optimism. We're in the shakeout phase of that but our customers know it. Those people that attended the ACT conference know it.

That's helpful. And then just one more. I guess, Bob, I know you guys talked about where revenue was largely in line versus last year, despite the loss of AFTC and also volumes coming in a little lower. I think you touched on it briefly on pricing. How do we kind of think about that? I think that was basically what supported Q1 as well. Could you talk about how that shakes out for the remainder of the year?

Bob, go ahead and take that one.

Yes. Okay. I think, Dushyant, it would shake out somewhat similarly in the remaining quarters, assuming there's not some radical change in the underlying commodity of natural gas which can impact our revenues. But I think we see somewhat steady cases going forward on that. So we won't have the AFTC but we still enjoy a good spread between oil and natural gas, so that's supportive. We are seeing good fleet volumes and our maintenance deals as we did in Q1. That should mean that the revenue number will be kind of in line with where we were in Q1.

Our next question comes from Eric Stine with Craig-Hallum.

So you mentioned ACT and I was out there, obviously. One thing I heard kind of loud and clear, obviously a lot of interest, excitement in the X15N but arguably, it is behind schedule versus what Cummins was expecting and others. I was just hearing a lot about incremental cost. I know that to this point, you've got PACCAR in the market and Freightliner just opened their order book. Curious your thoughts on maybe the impact that that has, where incremental costs for the X15N or trucks with the X15N have been and what that trend looks like going forward.

Eric, I want to be careful to air all the dirty laundry of my friends on truck pricing but I think I've said it before, which is that as those early trucks, the X15N were launched into the market in the latter part of last year, it's no secret that the incremental price was just a bit too high. By the time you move that from the engine cost and I think, frankly, in-line fuel system costs, and then you put the OEM markup on it and the dealer markup, I think people got a tad bit carried away. At one point, a very powerful dealer said, well, it's still half the price of the incremental cost of an electric truck. I said, wait a minute, we don't compete with an electric truck. We compete with a diesel truck. So we worked very hard with Cummins. We have a program with Cummins that was joined by the fuel system folks, and frankly, with our friends at PACCAR to reduce that from as much as a $110,000 incremental price to something on the way toward $80,000 incremental price or so. What we found, Eric, is that an incremental price at around $75,000 to $80,000 with an aggressive but doable fuel price, certainly for us with our network and ability to supply RNG, you can get the total cost of ownership for the fleet where it needs to be. That is, you can get a fleet somewhere around the 2- to 2.5-year payback. That's enough to start the discussion about ordering. Good news here is that the Freightliner, as you mentioned, a product that's come to market has a lower price point overall and I think competition is a good thing. We've seen some initial orders go in for the Freightliner. That price is lower. So I think we're on our way toward where we want to be. I think over time, it's clear that if we can get to something closer to 6,000 units a year, you can drive somewhere between 15% to 20% out of the fuel system cost too. We're at early stages. Incremental has been a little high at the initial launch. It is coming down. I feel like it's headed in the right direction to get to where we need to be.

Got it. That's a good point. You were discussing the overall environment in relation to batteries, and it seems fuel cells are not as prominent, which customers are clearly expressing. From a policy perspective, particularly in California, it’s evident that there is a preference for battery electric fuel cells over renewable natural gas in the current landscape. Do you think there’s a possibility of achieving parity, if not an advantage, with these technologies?

Well, Eric, look, it's tricky right now to go through all the details. The California ACF, those fleet rules that they've put in place, those are gone. The manufacturer side, which required manufacturers to sell 10% battery, that requirement is also in the process of being cleared out. Now the Senate hasn't taken up that action yet. There's a question of whether or not they will, but I feel like they might. There’s some uncertainty there. We are working with CARB, as their program now is not functioning well. When people cannot buy an electric vehicle or won't buy one and there is no requirement to do so, they are reverting to purchasing older diesel vehicles. CARB understands this is not good. We’re working with CARB, and I believe RNG should once again be recognized as a compliant fuel. It's not finalized yet, and those discussions are underway. In contrast, electric doesn't have the viability needed for heavy-duty trucking. The electricity infrastructure, cost, and customer experience are not sufficient for heavy-duty applications. We have some feedback from the ACT conference that shows RNG is starting to gain a more substantial foothold. We're seeing that now, and those are the discussions that we are having with policymakers at both the federal and state levels.

Our next question comes from Rob Brown with Lake Street Capital Markets.

Just wanted to dive in a little bit to the RNG facilities, sort of where you're at in terms of getting those open and running and generating EBITDA. Could you just update us on the timeline there?

Well, one of them has been open a while, Rob, and it's producing pretty well and we're steadily increasing the production. So we know there's hope, right? We know that through good operations, you can increase them and get them closer to nameplate. That's our Del Rio facility. The other five we have are a little bit behind that trajectory. We had one bad weather problem with one of them. But they are all now in production, albeit not quite to the levels that we want yet. By the end of the year, we'd like to think that they're going to be 80% of where we thought they would be. We're making nice headway. We're making some adjustments with our operators there, and we like the direction it’s going. Two more should be in production toward the end of this year. We're making good progress, though I don't know if it will be completed by the end of this year, but our big Idaho facility and our South Fork Dairy in the Texas Panhandle are on track as well. The relationship with Maas, as I mentioned in my remarks, these projects will come online a little later, but they are underway. These projects still take longer than all of us would like. The pathway process is cumbersome and slow. We've been in conversations with the chairwoman of CARB, and she indicated that help is on the way, that more staff are being brought in to deal with the backlog of pathways. We hope that will facilitate more project completions.

Okay, great. And then as you think about the current environment and how, if at all, does that change your CapEx plans for this year? Are you potentially slowing that at all? Or are you just maintaining the plan as before?

No, we're being cautious on the RNG side. We've said we've looked at a lot of projects. We've looked at some opportunities to perhaps purchase some RNG projects that are nearly complete. We're being careful in looking at that. So we have the projects that we're currently developing on RNG funded. We don't see any increases to that right now. We want to get the ones done that we have. We're in a nice position because we have 90 or so on the way toward 100 with new contracts that we aren't taking supply from yet. We have 100 different suppliers of RNG. So our relationship with BP is solid and we have plenty of supply available. We like our position on the six projects that we've got and the new ones coming on. On the station side, we may be a little bit lighter on CapEx just because of permitting and timelines. I hope as we start to see some big fleets begin to look at taking more X15Ns and making requests, we will need some CapEx to build out stations, which would be a very good thing. For the year, Rob, it should come in about what we've projected and maybe be a bit lighter, not because we are worried about the future but due to the way current projects are taking longer than anticipated.

Our next question comes from Derrick Whitfield with Texas Capital.

Andrew, I wanted to follow up on your CARB commentary, just to make sure I'm clear on your understanding of how it's progressing. I mean clearly, this has been far from a straight line. But as you think about where CARB is today, do you think they're going to have final policy in place by June? And do you know if they intend to retroactively apply that policy across the first half of 2025?

You're right. It's not really a straight line. I've kind of been wrong on timing a little bit because it's hard to predict. I'm told and we believe that it should be done by June 1, and that it should be retroactive. If it doesn't make the June 1 deadline, then there's a question of whether or not they can still make it retroactive. In conversations with senior members of CARB, we've been told that they believe they should make the deadline. It looks like through the comment period that I think already came and went on the OPL issue, I think we can expect that it's headed in the right direction.

All right. So fingers crossed there. Maybe staying with you on the policy front, I'd love to get a feel for the support you're hearing from your discussions in D.C., maybe beginning with the RINs. We've heard throughout earnings, there's been a constructive dialogue between ag and the refining sector on the future of biofuels policy. And while I've heard this could lead to a 5.25 billion gallon RVO for bio-based diesels in 2026, we haven't heard that much in the cellulosic category. But setting aside the exemption commentary from last November, do you guys have a view on where the EPA may land on the RVO for the cellulosic category?

The quick answer is no, we don't. It wouldn't be right to say that we're having in-depth engagement. We are engaging as an industry. We have participated in some discussions on that. I feel like the administration understands the balance necessary to have a vibrant RFS program, yet they're pulled in several directions. One thing I think is constructive is the recognition that we are a biofuel, that RNG is cellulosic from the farm. It is a biofuel and there are many factors weighing on this. We feel like they will be constructive, but that's about as far as we can go. We haven't heard numbers on that.

Our next question comes from Matthew Blair with TPH.

I was hoping to dig in a little bit more on the strong results in the first quarter. Your RNG volumes came in lower than our modeling and your RIN revenue was also lower. Maybe those two things are connected. What would you attribute the strong results to? Seasonally, Q1 can also be a little soft and I know tough weather affected parts of the country. Was this just better core fueling margins due to a healthy oil to gas spread or what really pushed things up? And was there anything that was pulled forward into Q1 that should have been part of Q2?

I'll give it a go on that one, Matthew.

Go ahead, Bob.

I think you kind of hit it there, just the core fueling. The core fueling and effectively just what our effective pricing from our stations is what was driving that. The lower RIN was connected to the supply and the lower volumes there. We actually had a strong showing of low carbon fuel going into California, so the LCFS did better than expected there because that pricing remained below where we had expected it to be for the year. It's the underlying base business fueling. We're seeing a gradual incremental increase, incremental flow of volume as fleets bring on trucks during the year. It’s additive, and that should continue. Pricing remained good, the spread was good, and we're opportunistic with sourcing. We're good at sourcing cheap natural gas which is feedstock into this too. So all of that combined, we're a big player, and we have leverage on all that front.

One other thing I would add is that trucking is good, right? The Amazon stations are open and running well, and trucking volume is looking pretty good. That all contributed, but the underlying fuel business was strong.

Do you think part of it is due to a tightening dispensing market? We're hearing from upstream RNG players that it's increasingly tough to place their volumes in the transportation market. Is that playing a role as well?

Starting to.

Yes, starting. We're seeing that.

Our next question comes from Saumya Jain with UBS.

Do you guys see any volumes from the transportation sector maybe going towards power generation? Or any update on the data center front? How are you guys looking at that going forward?

Let me start. I think my number is right. 80% of the RNG goes into transportation and it's the best market. That's what Matthew was getting at is that it's tight. Supply wants to find its way to transportation. It's why we're in an enviable position at the nozzle tip. Of course, some RNG will make its way into power generation. We have not heard of anything significant that I'm aware of, though I thought it would be a beautiful and effective way to decarbonize power generation. When I started hearing that we're going to open up Three Mile Island and build nuclear power plants, I thought, we need a better solution than that. I don't want to say it will never go into those markets, because I believe it should. Still, it's about 80%. We hear different things. The regulatory push to force utilities to use renewable sources will take a break. I think it will make transportation that much more significant.

Got it. And then could you give some updates on your partnerships with Total, BP, Chevron? How are they progressing? What's the outlook on those types of oil companies?

Total is still our largest shareholder. They're our partner in our first RNG project. We have a very robust and ongoing relationship with BP. We call it a co-marketing agreement where we work together on RNG hand in glove. If those Archaea volumes were to go to transportation, we'd be involved with them on that. We continue to work with BP on those development projects in Idaho and South Fork and one in Texas. We have a deep relationship with them. Chevron, in light of the electric and hydrogen truck push, is starting to show renewed interest in our California RNG program that has fielded upwards of 350 trucks to fuel with RNG. We've always liked that program with Chevron and continue to work with them, so that’s the status of those three partnerships.

Our next question comes from Craig Shere with Tuohy Brothers.

So I'm sorry, did you specify anywhere exactly how much 45Z was in the quarter?

No, we didn't. It was really not material, if you will, so we didn't specify it.

Okay. So, after that is finalized, could you see that competing with the current LCFS run rates you've been experiencing in terms of quarterly contributions?

I mean, Craig, it's kind of in the detail there, right? You remember the heady days of saying that with an active correct GREET model, it could be worth much more. Those discussions are underway. Just what how will that be measured? If Congress chooses to keep 45Z in, will they use a GREET model? Will they specify different CI scores for different various types of manure? Just where does that come down? Does it end up being where it is today or does it go way up the scale? It kind of depends on where that comes out.

Got you. And on Rob's question for the upstream, do you have a timeline to get to systemically positive upstream numbers, EBITDA there?

I don't know that it would flip quickly but certainly the projects we have are in the path to contribute to EBITDA. One is already doing so. The other five will likely do so next year but two larger projects coming online will go through operational expenses, and we have to wait to see how it all pencils out. But there absolutely will be positive dairies contributing EBITDA.

So, definitely second half next year, we should certainly be there.

Yes, on certain farms, certain dairies will be EBITDA positive. We’ll have to see overall if their contributions balance out.

All right. And last kind of big picture one for me. The current administration wants to streamline as much LNG exports as possible. So in terms of spreads, if we have $4, $4.50 Henry Hub and we have $50 Brent, how does that affect fleet customers and their future purchases?

No, we're not hearing that. My view on that, I've been right on this. I completely agree with you on oil, and I think you're going to have downward pressure on world oil price. Our producers have been through this before, and so they'll be careful. You may see a lower oil price, but the natural gas price has been too high. The LNG is moving slowly, but I think you're going to have spreads that are still constructive for us, allowing us to price our fuel at a margin below diesel. Today, we can price our fuel and make a nice margin, undershooting West Coast diesel by $2 a gallon. It might get challenging, but we can stay at $1.25 to $1.50 cheaper than diesel fuel in most cases.

Our next question comes from Betty Zhang with Scotiabank.

My first one is on M&A. Just curious how you're thinking about M&A these days, whether there are any opportunities or if you are more so looking to build out organically?

No, I think we're being very careful with our capital. We like our current position. We believe we are getting opportunities to look at projects where private equity or others are tired of them or nearly complete. We're interested in those kinds of projects rather than investing in new ones at this moment. We've looked at those new projects, but there may need to be a bit more market adjustment before they make sense. We're in a position to consider a lot of projects and have a capable team assessing them. We continue to explore if there are projects that could be completed that would make sense to add, but we haven't found the right ones yet.

That's helpful. I wanted to ask about the first quarter; volumes were lower than we anticipated, as you mentioned. For the full year 2025, is the $246 million target still achievable? What are your thoughts on that?

Betty, the way I look at that is we'll be close to that. Financially, even if we're a bit shy of the $246 million, we'll close on that number. We may not get there exactly, but we'll be in the range. Financially, I believe we'll be better than hitting the $246 million because we're liking how that's shaping up. So the next part of the year, we'll close on that number.

Our next question comes from Jason Gabelman with TD Cowen.

I know you said you started repurchasing stock again. How are you determining funds to go towards the buyback? Is it more organic cash flow? Is it using cash from the balance sheet? How comfortable are you with the cash balance to support the buyback?

Yes. I’ll let Bob go into detail. We believe our stock is really undervalued, and we wanted to put some capital to use to support the stock. That's why we've done it and probably will continue at these levels. We are being prudent about it. Bob, do you want to provide more detail?

Yes. I mean, Jason, we basically reinstated a program that we already had in place. It's not just unlimited and subjective. We had about $26 million available from the prior approval and we just put that back in place. We'll see how far we go within that. There is a cap before we would need to get other approvals.

Got it. And my other question is, I think you mentioned you're in D.C. supporting another bill that supports RNG. Can you just remind us what that bill exactly entails?

Yes. That bill is called the RNG Incentive Act, which was introduced in both houses of the Senate. This is a modern-day re-up of the AFTC and it is $1 a gallon at the nozzle tip for RNG. There is bipartisan support, which is a positive aspect, and we are seeing some interest in it. Let's leave it there.

It appears we have no further questions at this time. I would now like to turn the program back over to Andrew Littlefair for any additional or closing remarks.

Good. Well, thank you operator and thank you everyone for joining the call today. We look forward to filling you in next quarter on how we're doing. Thank you. Good day.

Thank you ladies and gentlemen. This does conclude today's event. You may now disconnect.