This article first appeared on GuruFocus .
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Revenue:$63.9 million in Q2 2026, up 98.1% year-over-year from $32.3 million.
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Gross Profit:$14.5 million in Q2 2026, up 38.2% from $10.5 million in Q2 2025.
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Gross Margin:22.7% in Q2 2026; 22.8% year-to-date, impacted by the Rhode Island bioenergy facility's $1.8 million gross margin loss.
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SG&A Expense:$15.2 million in Q2 2026, compared to $14.3 million in Q2 2025.
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Net Loss:$2.1 million in Q2 2026, an improvement of 78% from a net loss of $9.5 million in Q2 2025.
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Adjusted EBITDA:Positive $1.9 million in Q2 2026, compared to a loss of $2.2 million in Q2 2025; fourth consecutive quarter of positive adjusted EBITDA.
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Revenue Backlog:$274.9 million at June 30, 2026, up 7.2% from $256 million at year-end 2025.
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New Contract Awards:$66 million in Q2 2026, including a $58 million contract with Neogenix Fuels and an $8 million contract with Vanguard Renewables.
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Italy Revenue:$29.8 million in Q2 2026, a 370% increase year-over-year.
Release Date: August 11, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue surged 98% year-over-year to $63.9 million in Q2 2026, driven by strong capital sales project execution in Italy and North America.
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Adjusted EBITDA turned positive for the fourth consecutive quarter, reaching $1.9 million in Q2 2026, a 187% improvement year-over-year.
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Revenue backlog expanded to $274.9 million, up 7.2% from year-end 2025, supported by new contracts including a $58 million deal with Neogenix Fuels and an $8 million repeat contract with Vanguard Renewables.
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SoCal Biomethane became the first project to deliver renewable natural gas under California's SB 1440 program, a major milestone that opens a large, financeable market for future projects.
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Secured a $20 million revolving credit facility with National Bank of Canada, with an accordion feature to increase to $30 million, enhancing liquidity and financial flexibility.
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Net loss improved significantly, narrowing by 78% year-over-year to $2.1 million in Q2 2026, reflecting disciplined cost control and revenue growth.
Negative Points
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Gross margin in Q2 2026 was 22.7%, below expectations, primarily due to a $1.8 million gross margin loss at the Rhode Island bioenergy facility, which continues to underperform.
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The Rhode Island bioenergy facility remains a drag on profitability, with no clear timeline for breakeven, and management is exploring strategic alternatives for the asset.
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The Charlotte facility remains idled, with no update on its future path, adding uncertainty to the asset portfolio.
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SG&A expenses increased to $15.2 million in Q2 2026, up from $14.3 million in Q2 2025, driven by higher legal and tax service fees.
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O&M revenue declined year-over-year in Q2 2026, reflecting timing issues and variability in the capital-light strategy, though management expects growth to resume.
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Management declined to provide specific guidance on the timeline for Rhode Island breakeven, citing ongoing technical issues and underperformance.
Q & A Highlights
Q: Can you provide an update on the Rhode Island Bioenergy Facility (RIBF), which continues to be a drag on margins? Is the pathway to breakeven by year-end still a good guide? A: Yaniv Scherson (COO): We continue to deal with technical issues at the site, although performance is improving year over year. However, at this point, we are unable to provide any predictions or guidance as to a timeline for breakeven. As mentioned, we are exploring options that are best suited for the asset given its continued underperformance.
Q: How might the California SB 1440 mandate drive future demand and opportunities for similar projects? A: Yaniv Scherson (COO): SB 1440 is the largest and only statewide biomethane program in the US, requiring utilities to procure RNG under long-term, fixed-price offtakes that provide financeable revenue certainty. We see opportunities for many more projects, leveraging over 150 wastewater treatment plants in California with existing digesters that can be retrofitted. The program's 2030 goal is equivalent to over 50 facilities the size of SoCal Biomethane, making it a repeatable, financeable program for follow-on projects.
Q: With capital sales now carrying most of the growth, what is the constraint on execution as backlog conversion accelerates? At what revenue run rate does the model start to strain? A: Gregory Wolf (Interim CFO): We don't see many constraints to doubling revenues. Our manufacturing is running at one shift and can go to three. We continue to add engineering capacity as needed, and the new credit facility supports our growth plans. We see a clear path to double or triple from current levels, using third-party contractors for civil work to maintain flexibility in booking and executing projects of all sizes.
Q: Can you provide an update on the recent Australia announcement and the competitive dynamics in that new geography? How big could this market become? A: Assaf Onn (CEO): We entered Australia because we understand the market is very big, comparing it to where Europe was 15 years ago. It took us less than a year to sign our first contract, and we are currently pursuing a vast majority of opportunities in the region.
Q: Regarding the recent M&A activity in the biomethane and biogas space, are there opportunities to add assets at favorable costs and IRRs? A: Assaf Onn (CEO): We are always scanning the market and looking at everything available in our markets. Many interesting things are happening across the regions as a global company, but at the moment, there is nothing more to say at this point.
Q: Can you provide an update on the revenue cadence for the second half of the year and any large projects being completed? A: Assaf Onn (CEO): All of our projects are on schedule, and some are exceeding our expectations. I believe the second half will be similar to last year, if not better, in terms of trajectory and sequential improvements.
Q: The O&M side showed a year-over-year decline. Is this a function of project timing, and when can we expect O&M revenues to return to growth? A: Yaniv Scherson (COO): It is a timing issue. Part of our capital-light strategy involves de-risking exposure through more cost-plus style contracts. While we benefit from a lower risk profile and recurring revenue, we see variability on a quarterly basis. Overall, the growth trajectory remains as the capital sales business grows, so will O&M and service, which are indexed to it.
Q: Regarding the $10 million investment in two Italian assets, should we expect further investments into those projects? A: Gregory Wolf (Interim CFO): That situation was an opportunity where we technically used some of the margin on projects to make the investment. We see upside in the exit strategy the owners have. We are not looking for further investment into those specific assets.
Q: Is the 30% uptick in offtake gas prices under the Canadian Clean Fuel Regulation still a good approximation given the CI score? A: Yaniv Scherson (COO): Yes, that is the correct order of magnitude. Notably, carbon prices are variable, so the gas price will shift based on the credit price at any given time.
Q: Were there any specific projects in North America that drove the strong sequential and year-over-year revenue uptick? A: Yaniv Scherson (COO): We performed well across the board. All of our large projects and major customers hit their targets and delivered financially. As Greg noted, had it not been for the Rhode Island offset, we would have exceeded our margin targets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
