Revenue: $104 million for Q1 2025. Adjusted EBITDA: $17.1 million for Q1 2025, up from $12.8 million in Q1 2024. Cash Balance: $227 million at the end of Q1 2025, a $9 million increase since the start of the year. RNG Sales Volume: 51 million gallons sold in Q1 2025. GAAP Net Loss: $135 million for Q1 2025, including $115 million from non-cash items. Capital Expenditures: Operating cash flows exceeded capital expenditures in Q1 2025. Alternative Fuel Tax Credit: $5.4 million included in Q1 2024 revenue, not present in Q1 2025.

Warning! GuruFocus has detected 3 Warning Signs with CLNE.

Release Date: May 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Clean Energy Fuels Corp (NASDAQ:CLNE) reported a solid first quarter with $104 million in revenue and $17 million in adjusted EBITDA. The company increased its cash balance by $9 million, ending the quarter with $227 million in cash. Despite lower RNG sales volumes, demand from fueling customers remained steady, particularly in the refuse, transit, and trucking sectors. The company is maintaining its full-year financial outlook and CapEx guidance, indicating confidence in its business stability and growth potential. Clean Energy Fuels Corp (NASDAQ:CLNE) resumed its share repurchase program, signaling management's belief that the company's shares are undervalued.

Negative Points

RNG sales volumes were lower compared to the first quarter of 2024 due to supply issues from third-party producers affected by weather and operational events. The company recorded a GAAP loss of $135 million, largely due to non-cash items like accelerated depreciation and a goodwill write-off. The expiration of the Alternative Fuel Tax Credit negatively impacted revenue compared to the previous year. Potential indirect impacts from tariffs could create uncertainty for customers in the heavy-duty trucking sector, potentially affecting business planning and vehicle purchases. The timeline for RNG production projects remains lengthy, with some projects not expected to come online until 2026, impacting near-term growth.

Q & A Highlights

Q: Could you talk about what would take you to the lower end and then what could take you to the upside of your 2025 guidance? A: Andrew Littlefair, CEO: The impact of tariffs on truck purchases and the 45Z tax credit are key factors. If tariffs are resolved and the 45Z credit is favorable, it could lead to upside. The demand for RNG in heavy-duty trucking remains strong, and any delay in truck purchases is expected to be temporary.

Story Continues

Q: How do you see pricing trends for the remainder of the year, given the strong pricing in Q1? A: Robert Vreeland, CFO: We expect pricing to remain steady, assuming no radical changes in natural gas prices. The spread between oil and natural gas is supportive, and we anticipate continued strong fleet volumes and maintenance deals.

Q: What are your thoughts on the incremental cost of the X15N engine and its impact on adoption? A: Andrew Littlefair, CEO: Initial incremental costs were high, but efforts with Cummins and others have reduced it. A price point around $75,000 to $80,000 is more acceptable, offering a 2- to 2.5-year payback for fleets, which should encourage adoption.

Q: Can you update us on the timeline for RNG facilities to become operational and contribute to EBITDA? A: Andrew Littlefair, CEO: One facility is already operational and improving production. Five others are in production but not at full capacity yet. Two more are expected online by year-end, with additional projects in development.

Q: How are you approaching capital expenditure plans for this year in the current environment? A: Andrew Littlefair, CEO: We are cautious with RNG projects, focusing on completing current developments. Station CapEx might be lighter due to permitting timelines, but we are prepared to invest as demand for X15N trucks grows.

Q: What is the status of your partnerships with Total, BP, and Chevron? A: Andrew Littlefair, CEO: Total remains a major shareholder, and we have a strong co-marketing relationship with BP. Chevron's interest in RNG is renewed as electric and hydrogen truck realities set in, supporting our California RNG program.

Q: How are you determining funds for stock buybacks, and what is your comfort level with cash balance? A: Robert Vreeland, CFO: We reinstated a $26 million buyback program, using it prudently. We believe our stock is undervalued and are using available cash flow and balance sheet funds within approved limits.

Q: Can you explain the RNG Incentive Act you are supporting in D.C.? A: Andrew Littlefair, CEO: The RNG Incentive Act, introduced in both houses, proposes a $1 per gallon incentive for RNG at the nozzle tip. It aims to support economic development in rural areas and aligns with bipartisan interests.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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