Montauk Renewables 2025 Q3 Earnings Beats Estimates, Net Income Dips 69.5%

Montauk Renewables (MNTK) reported Q3 2025 earnings on Nov 6, 2025, with GAAP EPS of $0.04, exceeding estimates by $0.03, and revenue of $45.3 million, surpassing expectations by $0.06 million. The company maintained full-year RNG production and revenue guidance despite a 31.3% year-over-year revenue decline and 69.5% net income drop.

Revenue

Revenue fell 31.3% to $45.26 million in Q3 2025, driven by a 31.4% decline in RIN prices and reduced self-marketing of RINs. Renewable Natural Gas (RNG) revenue totaled $39.88 million, with Renewable Electricity Generation (REG) contributing $4.25 million and corporate activities $1.13 million. The RNG segment accounted for 88% of total revenue, reflecting the company’s core operational focus.

Earnings/Net Income

Net income plummeted to $5.21 million, a 69.5% decline from $17.05 million in Q3 2024, while EPS fell 66.7% to $0.04. Despite beating revenue and EPS estimates, the sharp drop in profitability underscores margin pressures from lower RIN prices and higher operating expenses.

Post-Earnings Price Action Review

The strategy of buying MNTK shares on revenue raise announcements and holding for 30 days has underperformed, with a cumulative -26.5% return over three years. This poor performance, coupled with a 24.42% month-to-date stock price decline, highlights investor skepticism despite operational RNG growth. The market’s negative reaction stems from a 69.5% net income drop and 80.4% operating income decline, signaling concerns over cost management and profitability. However, the company’s full-year RNG revenue guidance of $150–$170 million and production of 5.8–6.0 million MMBtu suggest cautious optimism, though immediate-term challenges persist.

CEO Commentary

CEO Sean McClain emphasized the EPA’s SRE decisions boosting RIN availability but noted delays due to the government shutdown. The GreenWave joint venture is expected to enhance RNG transportation pathways, with benefits anticipated in Q4 2025. Strategic priorities include advancing North Carolina’s RNG project (Q1 2026 start) and negotiating swine REC agreements amid a limited market. McClain expressed cautious optimism about swine REC pricing aligning with solar REC indices ($200–$450 per REC) and addressed regulatory compliance challenges through NCUC filings.

Guidance

Montauk Renewables reaffirmed full-year 2025 RNG production of 5.8–6.0 million MMBtu and RNG revenue of $150–$170 million. Renewable Electricity Generation is expected to produce 175,000–180,000 MWh with revenues of $17–$18 million. No formal 2026 guidance was provided, though leadership highlighted new projects as growth drivers beyond 2025.

Additional News

Montauk Renewables announced regulatory updates, including the EPA’s SRE decisions increasing RIN availability and potential delays in 2026 due to the government shutdown. The GreenWave joint venture is expanding RNG transportation pathways, with benefits expected to grow in Q4 2025. The company also emphasized progress on North Carolina’s RNG project, slated to begin production in Q1 2026. Management highlighted strategic swine REC negotiations, targeting prices aligned with solar REC indices ($200–$450 per REC), and addressed compliance challenges through NCUC filings.