Clean Energy Fuels Corp. Q1 FY2026 Earnings Call

Please standby. Your meeting is about to begin. Hello, and welcome, everyone, joining today's Clean Energy Fuels Corp. First Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. Note this call is being recorded. We are standing by should you need any assistance. It is now my pleasure to turn the meeting over to Tom Driscoll, Vice President, Strategic Development and Sustainability. Please go ahead.

Thank you, Dana. Earlier this afternoon, Clean Energy Fuels Corp. released financial results for the first quarter ending 03/31/2026. 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 would 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 Fuels Corp.'s Form 10-Q filed today. These forward-looking statements speak only as of 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 the company's 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, Clay Corbus.

Alright. Thank you, Tom. I want to start by saying that I am honored to be named CEO of Clean Energy Fuels Corp. I have been part of this company for 19 years and have been involved in every major chapter of our evolution, from our days building out the fueling network to our initial investments in RNG in 2008, to the integrated platform we operate today. I have a huge amount of confidence in our team and the foundation we have built, and I am very excited about the opportunity ahead of us. Now as CEO, I plan to focus on growth, strengthen execution and operating discipline, and fully leverage the assets, infrastructure, and people we have in place. We have a strong balance sheet, recurring cash flow, and a very capable team. I also see opportunity to be more technology-forward, using data and software to improve efficiency across operations, corporate functions, RNG, and how we identify new customers and serve existing customers. All of this supports the same objective: deliver value for our customers and stakeholders. At its core, I believe deeply in this business and our product. RNG is domestically produced, lowers fuel costs, reduces greenhouse gas emissions, and uses existing infrastructure. Those fundamentals have always mattered, but they are especially relevant today. Beginning in early March, the conflict with Iran caused a sharp rise in crude oil prices, which quickly flowed through to diesel across the U.S. Diesel prices increased by roughly $1.50 to $2 per gallon or more, a 50% increase almost overnight. Fuel is a meaningful component of cost per mile, and this level of volatility strains fleets, carriers, and shippers, and ultimately leads to higher costs for consumers. This environment reinforces why Clean Energy Fuels Corp. exists. Compared to diesel, natural gas is cheaper, cleaner, domestic, and less exposed to geopolitical events abroad. As you have heard many times before, nearly 100% of the fuel delivered to our stations today is renewable natural gas, which captures all the benefits I just mentioned and helps our customers advance their sustainability goals. Now turning to the quarter, we delivered 67 million gallons of RNG, we generated $16.6 million of Adjusted EBITDA, and we ended the quarter with $126 million of cash on the balance sheet. In our downstream business, performance across core markets remained steady. Our transit and refuse sectors continue to be consistent contributors, supported by long-standing customer relationships and the reliability of RNG. We also see underappreciated growth potential in these segments. Over the past five years, battery-electric and hydrogen solutions have proven costly and challenging to deploy in many locations. As those realities become clearer for transit and refuse fleets, RNG offers a practical, cleaner, and lower-cost alternative to diesel, and many of these fleets already have firsthand experience with RNG. In trucking, the recent diesel price hikes and volatility have brought total cost of ownership back into focus. Heavy-duty trucking remains our largest growth opportunity. Class 8 trucks with the Cummins X15N engine allow fleets to capture RNG's economic and environmental benefits without sacrificing range or performance. The technology works, the infrastructure is in place, the fuel is available today, and it is cheap and less volatile. The case for switching from diesel to RNG has never been stronger. At the same time, adoption of the X15N has been slower than we originally expected. Diesel is the incumbent fuel for the vast majority of fleets. In the last two years, the sector has faced challenging freight fundamentals, federal and state regulatory uncertainty, particularly in California, and frankly, ESG whiplash as companies balance long-term sustainability goals with fluid policies and near-term stakeholder expectations. Even though RNG delivers a lower total cost of ownership, natural gas tractors still carry a higher upfront cost than diesel. In that environment, many fleets have chosen to delay change and stick with the status quo. Our strategy is to be targeted, focusing on applications and fleets where RNG delivers the clearest economic and low-carbon advantages. In our upstream RNG production business, we now have eight projects operating and three under construction. The first quarter reflected continued ramp-up at our South Fork project in Texas and our East Valley project in Ohio. The first quarter also had extreme winter weather, which impacted production, particularly in the Upper Midwest. We were able to get our projects back on track and anticipate production and financial results to improve as the year progresses. I would also like to highlight a positive regulatory milestone. In March, CARB approved the pathway for our Del Rio Dairy project in Texas with a carbon intensity of approximately negative 300. We also continue to await an upgraded GREET model from the Department of Energy for determining 45Z credit values, which is expected to better reflect the negative carbon intensity of dairy RNG. As we scale our RNG production business, projects have taken longer to develop and ramp up than initially expected, and some have faced operational challenges. We have responded by taking a more hands-on approach to operations, strengthening internal oversight, and replacing vendors where performance fell short. These improvements and transitions take time, but we are making progress. We remain focused on improving performance at our operating sites and executing projects under construction. It remains true that Clean Energy Fuels Corp. is an advantaged owner of dairy RNG production. Customer demand for low-CI RNG remains strong, particularly in California, where we have the largest RNG station network. Now, in concluding, I want to take a moment to recognize Andrew J. Littlefair. Andrew J. Littlefair founded this company, led it for three decades, and built Clean Energy Fuels Corp. into the platform that it is today. I have had the privilege of working alongside Andrew J. Littlefair and learning from him. We are fortunate that he remains actively involved by continuing his work on policy matters in Washington and serving on our board. On behalf of the entire company, I want to thank him for his contributions and continued commitment to Clean Energy Fuels Corp. With that, I will hand the call to our CFO, Robert Vreeland, to walk through the financials.

Thank you, Clay, and good afternoon to everyone. Overall, our financial performance was in line with our expectations with normal variations within our integrated businesses. For example, while extreme cold weather impacted upstream RNG production, we were able to monetize a larger-than-expected amount of RIN and LCFS credits from our East Valley dairy in Idaho, which was placed into service in March. Increased RNG volumes delivered by our fuel distribution business drove higher RIN revenues, and we were able to optimize our gas costs in this volatile commodities market. To a lesser degree in the quarter, but still ongoing today, we enjoy the dynamics of higher retail fuel prices while our natural gas commodity costs did not increase proportionally at the same level as oil and diesel prices. In fact, despite increases in our natural gas costs and retail prices, we maintained a large discount on our fuel price compared to diesel. Consequently, one of the effects we see of elevated commodity and retail prices is higher revenue. Coupled with higher fuel volumes, which drive both base fuel sales revenue as well as RIN and LCFS revenues, we reported $117.6 million in revenue for 2026 compared to $103.8 million last year. RNG volumes delivered in 2026 were strong. In addition to our normal recurring volumes, we saw higher demand from customers outside our network of stations needing RNG for transportation. We have seen this before, and it is nice to have the supply to accommodate those deliveries. We believe we will come off the first-quarter RNG volumes by a few million gallons or so as we look forward, but remain confident in achieving our annual guidance of delivering 250 million gallons or more given the first quarter of RNG for the year. GAAP net loss was $12 million for 2026. Certainly, there was a return in 2026 to more normal operations versus a year ago in the first quarter, where we reported a GAAP net loss of $135 million, which included a couple of large non-cash charges totaling $115 million. Adjusted EBITDA of $16.6 million in 2026 compares to $17.1 million of Adjusted EBITDA a year ago. In addition to the normal variations I mentioned for 2026, we also saw lower, albeit still very adequate, base fuel margins, which we anticipated in our outlook for 2026. And, as well and also anticipated in our 2026 outlook, we lowered SG&A expenses in 2026. One reporting comment I will make is a change in where the non-cash Amazon warrant charge is recorded in our financial statements. You will notice in 2026, a portion of the warrant charge is included as a charge against our O&M service revenue, whereas previously, 100% of the charge was in our products revenue. There is more detail on the Amazon warrant charge—it is just a different place in the income statement that you are seeing it this year. There is more disclosed in our 10-Q. In addition to the $126 million in cash and investments on our balance sheet, there is another $46 million in cash off balance sheet at our dairy RNG joint ventures. And during the first quarter, we contributed $12 million to our MAS Energy Works JV, with another $12 million that was contributed in April. MAS Energy Works continues to make good progress toward completing the three dairy projects under construction. And with that, operator, please open the call to questions.

Thank you. To leave the queue at any time, press 2. Once again, that is 1 to ask a question, and we will pause for just one moment to allow everyone a chance to join the queue. Our first question comes from Eric Stine with Craig Hallum. Please go ahead. Your line is now open.

Hi, Clay. Hi, Bob. Clay, you touched on it a little bit with the X15N. I know that now there are two OEMs in the market and prior to Freightliner's entry, pricing was an issue, so incremental cost has come down some. We have all read the glowing feedback of fleets that have been testing this. But the market conditions, as you said, make it a more difficult environment, yet they highlight the price benefit. Do you view this as more likely to make it an adoption story for large fleets rather than small one-off adopters? Or how do you view that? Is this the kind of thing that, if it persists, could actually jumpstart the market? Cummins' view of the overall opportunity hasn't changed, but adoption is well behind schedule.

Eric, it is what we spend a lot of time thinking about and focused on. I do not think anybody really thinks that diesel is going to stay at these prices forever. This run-up in diesel has heightened awareness of volatility. We were at the ACT conference the last few days, and what a lot of people are talking about is, if you take the last five years and do a regression analysis on diesel prices versus natural gas, diesel is higher overall. When fleets plan going forward their fuel costs and total cost of ownership, they factor that into their decisions. So it helps us because it improves the total cost of ownership and the payback period for the incremental cost of RNG vehicles. I do not know that it changes the types of fleets we are looking at, whether large or small. Even large fleets are not going to change 2,000 trucks overnight. What we are seeing is fleets starting with a few trucks—five or ten—get mechanics and drivers familiar with the technology and routes, and then expand. That, combined with the advantages in total cost of ownership, should result in incremental adoption over time. But it is a long sales cycle. It takes time to get trucks ordered and put on the road. People cannot order a truck tomorrow and have it running next week. It is a longer decision process, but the fundamentals are reopening many discussions that we are excited to participate in.

Got it. That is very helpful. And then maybe just my second one for Bob. You mentioned lower base fuel margins and that it was anticipated. Was that commentary referring to Q1 or to the outlook for the year? Especially in trucking, with high diesel prices you can still offer a healthy discount and have a strong margin environment, so could you clarify how you are thinking about that for the remainder of the year?

Eric, that comment is looking at the full year. When we gave guidance in February, we discussed dynamics that could impact our 2026 outlook, and the possibility of lower margins from various reasons was included. It is really a year-long consideration. That said, we have numerous levers. While margins can be impacted in one area, the fact that we are enjoying higher retail prices while costs have remained relatively stable helps offset some of that. It is a go-forward view and part of our plan.

Okay. Thanks a lot.

Great. Thanks, Eric.

Thank you. We will now go to Rob Brown with Lake Street Capital Markets. Please go ahead. Your line is open.

Hi, Clay and Bob. Thanks for taking my call. On the RNG volume you talked about in the quarter from third parties, could you clarify how that works and maybe provide some visibility on that?

It was a strong growth quarter, particularly compared to last year. We want to be careful because part of that growth was that the first quarter of last year saw our volumes trend down. We had the biogas reform that pushed a lot of our volume into 2024, so 2025 was lower. We also experienced widespread bad weather in the first quarter last year, which reduced RNG from third parties as well as our own production. While we are pleased with Q1, a lot of the comparison was against an easy comp in 2025. Regarding flowing RNG to other stations, there are other operators with CNG fueling stations and, based on supply availability, we will flow our RNG into those stations. It is a supply-demand dynamic. They need supply and we are able to move fuel to them. We have done this before; it is not routine, but it is an advantage of the distribution model. On how the CARB pathway certification flows into credits, it effectively nearly doubles the number of LCFS credits we can generate. When you move from roughly negative 150 to negative 300 CI, you can generate more credits off the same fuel.

Okay. Thank you. I will turn it over.

Thank you. We will now go to Matthew Blair with TPH. Please go ahead. Your line is open.

Thanks, and good afternoon, Clay and Bob. Could you talk more about the comment where you mentioned higher demand from customers outside of your network? Could you unpack that a little bit? Do you think you were taking share from some competitors, or was it that those customers were utilizing their existing CNG trucks more and simply needed more fuel given rising diesel prices? Could you also talk about which end markets showed increased demand? And on the fuel distribution guide for 2026, it stayed at roughly 67 to 70 million despite the good result in Q1 of 19 million. You mentioned you would expect volumes to roll off in Q2. Are you already seeing softer conditions in Q2, or is that just a general expectation?

There are other operators with CNG fueling stations, and in some instances based on supply availability we will flow RNG into those stations. It is a supply-demand dynamic; I cannot necessarily speak to their internal demand, but they need supply and we can move it. That is what the comment refers to. Regarding the fuel distribution guide, I will not comment on intra-quarter trends. The second-quarter comment was not that conditions are softer or stronger specifically, but rather that the level of strength in Q1 may not repeat. We had unique opportunities in Q1 to sell RNG to some customers that likely will not recur. While it was a good result against an easy comp versus last year, you should not assume you can multiply Q1 by four for the full year because some of those opportunities were one-time.

Sounds good. Thanks for your comments.

Thank you, Matthew.

We will go next to Betty Zhang with Scotiabank. Please go ahead.

Thank you for taking my questions. I wanted to ask about Amazon and that relationship. Earlier, Amazon announced its logistics services. Do you think there would be an opportunity to leverage that existing relationship and maybe increase some RNG volumes to them? And then for my follow-up, also related to Amazon, on those warrant charges, you mentioned it is now shared between the fuel and services. Is this a change in the contract with Amazon, or how would you describe that change? Thank you.

Betty, I will take the first comment. We do not comment specifically on Amazon. Across our customers, every customer with existing trucks—whether they are 12-liter, 9-liter, or otherwise—we work with them to try to increase penetration of the X15N in their fleets. I will not speak specifically to Amazon, but it is good business practice to work with existing customers to continue growth with them. I will let Bob address the warrant charge accounting.

Betty, I cannot say much, but the change was not arbitrary. Any change like that is typically driven contractually. We are applying the appropriate accounting based on the contract we have, which is why you see a portion of the Amazon warrant charge recorded against O&M service revenue this year rather than entirely in products revenue as before.

Thank you.

At this time, there are no further questions in the queue. I will now turn the meeting back over to Clay Corbus.

Alright, Dana. Thanks very much. And thank everybody else for joining us. We look forward to speaking with you next quarter.

Thank you.

This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.