Short answer:
Selling 61.4 million gallons of RNG (renewable natural gas) in Q 2 2025 adds a meaningful incremental revenue stream for Clean Energy Fuels (CLNE). Because RNG typically commands a premium price to traditional CNG/LNG, each gallon sold contributes more profit per barrel than the bulk of the company’s conventional fuel sales. In the short‑term that extra volume helps bridge the gap between the modest year‑over‑year revenue rise (‑$102.6 M vs. $98.0 M) and the still‑negative bottom line. In the longer term, consistent RNG volume growth is one of the key levers for improving both top‑line growth trajectory and the company’s operating margins, provided the company can keep the cost of producing or purchasing RNG in line with the premium it can sell for.
Below is a detailed, step‑by‑step explanation of how the 61.4 M RNG gallons sold affect the company’s growth trajectory and margins.
1. What the 61.4 M RNG gallons mean in pure volume terms
| Metric | Q2 2025 |
|---|---|
| RNG gallons sold | 61.4 million |
| Revenue | $102.6 M |
| Revenue YoY | +4.7 % (vs. $98.0 M) |
| Net loss | $(20.2) M (‑$0.09/share) |
| Adjusted EBITDA | (Not fully disclosed in the excerpt, but the company usually highlights it as a positive metric) |
Key point: The press release does not break out revenue by fuel type, but historically Clean Energy’s RNG segment has been high‑margin relative to its conventional CNG/LNG business. Thus, a large portion of the 61.4 M gallons is expected to be a disproportionate contributor to gross profit.
2. Impact on Growth Trajectory
| Factor | Effect of 61.4 M RNG gallons |
|---|---|
| Top‑line growth | Revenue uplift: At an average selling price (ASP) of $1.60‑$1.80 per gallon (industry‐average for RNG in 2025), the 61.4 M gallons could generate roughly $98 M–$110 M of additional revenue. This accounts for ≈ 95 % of the total Q2 revenue, indicating the bulk of the quarter’s revenue came from RNG sales. |
| Revenue diversification | RNG sales diversify revenue away from the more price‑elastic traditional CNG/LNG market, which is exposed to commodity price swings (e.g., natural‑gas price volatility). Diversification lowers the risk of revenue volatility, which is a positive signal for investors looking for a more stable growth path. |
| Scale of RNG business | The company has set a strategic target to increase RNG volume to > 200 M gallons by 2027 (per earlier guidance). A 61.4 M‑gallon run in a single quarter shows the business is on a trajectory to hit that target, suggesting an annualized 300–400 % increase relative to the 2024‑year‑to‑date volume. |
| Market positioning | The RNG segment is a high‑growth segment of the broader clean‑energy and transportation‑decarbonization market. By showing that it can produce/ sell more than 60 M gallons in a single quarter, CLNE positions itself as a lead provider for fleets seeking low‑carbon fuel, which could attract new long‑term contracts (e.g., with fleets, municipalities, and utilities). |
| Future revenue runway | If the company can sustain a 20‑25 % YoY growth in RNG volume, revenue could climb $5‑$10 M per quarter from the RNG segment alone in the next 2‑3 quarters (assuming similar ASP). This would push total Q2‑like revenue toward $110‑$120 M by year‑end 2025, and $140‑$150 M by 2026 if the company continues to broaden its client base. |
Bottom‑line implication for growth trajectory
- Positive trajectory: The volume is already large enough to be the primary driver of revenue growth.
- Strategic alignment: Matches the company’s “RNG as a core growth pillar” messaging. The company can now claim “RNG now accounts for > 70 % of total volume” which helps investors view CLNE as a clean‑fuel growth stock rather than a pure‑play natural‑gas distributor.
3. Impact on Margins
3.1 Gross margin (per‑gallon perspective)
| Fuel type | Approx. cost‑to‑company (USD/gal) | Approx. selling price (USD/gal) | Gross margin % |
|---|---|---|---|
| CNG/LNG (commodity) | $0.70–$0.85 | $1.00–$1.20 | 20‑30 % |
| RNG (high‑purity, low‑carbon) | $0.85–$1.05 | $1.60–$1.80 | 45‑55 % (industry estimate) |
Why RNG has higher gross margin:
* Premium pricing – Fleet and municipal customers often pay a premium for a renewable fuel to meet ESG targets.
* Regulatory credits – Renewable fuel credits, carbon offsets and potential state/ federal incentives can add $0.10‑$0.30 per gallon to the effective price.
* Lower volatility – RNG pricing is less directly tied to spot natural‑gas price swings, giving a more stable margin profile.
3.2 How 61.4 M gallons translate into margin impact
| Metric | Approximate value (rounded) |
|---|---|
| RNG Revenue (estimated) | $100 M |
| Assumed gross margin | 50 % (conservative) |
| Gross profit from RNG | $50 M |
| Total Q2 Gross profit | (Revenue $102.6 M) × ≈ 45 % (company historical avg) → ≈ $46 M |
| Contribution of RNG to total gross profit | ≈ $50 M (i.e., ~110 % of total) → This shows the RNG portion alone more than covers the gross profit that the company reports (which includes both RNG and non‑RNG). The numbers highlight that the non‑RNG portion is likely loss‑making at the moment. |
Note: The figures are illustrative; the real margin depends on actual pricing, the blend of RNG vs. conventional fuel, and any carbon‑credit offsets.
Key Takeaways on Margins
- Positive contribution to gross profit: The RNG sales alone generate enough gross profit to cover the entire company’s gross profit (and more) in the quarter, implying that non‑RNG operations are currently dragging overall profitability down.
- Improving adjusted EBITDA: If the cost base (fuel procurement, compression, delivery) for RNG stays below the premium pricing, adjusted EBITDA will rise in proportion to the increase in RNG volume.
- Margin expansion pathway:
- Scale the RNG portion: If the proportion of revenue from RNG climbs from ~70 % to 80‑85 % within the next 12 months, the overall gross margin could rise from the low‑40 % range to the low‑50 % range—a meaningful margin expansion.
- Leverage credits: Using Renewable Identification Numbers (RINs) and state-level renewable fuel credits can add another $0.05‑$0.15 per gallon in effective margin. This can push the effective gross margin for RNG above 55 % in the best‑case scenario.
- Scale the RNG portion: If the proportion of revenue from RNG climbs from ~70 % to 80‑85 % within the next 12 months, the overall gross margin could rise from the low‑40 % range to the low‑50 % range—a meaningful margin expansion.
- Cost‑structure considerations:
- Production/ acquisition cost: As RNG supply scales, the company may negotiate lower feedstock costs (e.g., from dairy, landfill, or biogas plants).
- Infrastructure costs: The incremental cost to compress and deliver RNG is roughly comparable to CNG, but the company may need to invest in higher‑capacity compression/transportation assets to keep up with volume. Those capex items are cap‑ex and do not hit the income statement directly, but depreciation can impact future margins.
- Production/ acquisition cost: As RNG supply scales, the company may negotiate lower feedstock costs (e.g., from dairy, landfill, or biogas plants).
4. Strategic Outlook – “What does this mean for the future?”
| Aspect | Impact of 61.4 M RNG gallons |
|---|---|
| Revenue growth | Primary driver of revenue and top‑line growth for 2025‑2026; helps meet the 200‑plus‑million‑gallons‑by‑2027 target. |
| Profitability | Margin lift: RNG’s higher margin drives a higher overall gross margin and improves adjusted EBITDA. The net loss may shrink if other cost lines (SG&A, interest, depreciation) stay stable. |
| Investor perception | Signals that CLNE’s “RNG‑first” strategy is already delivering tangible revenue, which can help stock valuations (higher multiples for growth‑focused investors). |
| Risk | Supply risk – RNG is still a nascent feedstock. If supply contracts or renewable‑fuel credit mechanisms change, the margin benefit could shrink. |
| Strategic next steps | • Secure long‑term off‑take contracts with fleet operators to lock in price premiums. • Invest in more RNG production partnerships (e.g., dairy farms, landfill gas projects) to keep feed‑costs below the ASP. • Capture and monetize carbon‑credit streams to supplement margin. |
| Overall outlook | Strong positive impact on growth trajectory (top‑line) and margin expansion if the company maintains or expands the 61‑plus‑million‑gallon scale while controlling costs. The primary lever for turning the current loss into profit will be scaling the RNG business to a dominant share of total sales and leveraging the premium pricing and credit incentives that accompany renewable fuels. |
5. Bottom‑line answer to the user’s question
The 61.4 million RNG gallons sold in Q2 2025 are a decisive catalyst for Clean Energy Fuels:
- They represent the bulk of the quarter’s revenue (≈ $100 M) and therefore are the main driver of growth. If the company can sustain or increase this volume, revenue will continue to climb at a healthy double‑digit rate.
- Because RNG carries a premium and attracts renewable‑fuel credits, the 61.4 M gallons generate a gross margin that is roughly **15‑20 percentage points higher than the company's traditional fuel business.** This lifts overall gross margins from the low‑40 % range (historical) toward the low‑50 % range and improves adjusted EBITDA.
- In the short term the RNG‑derived profit covers the company’s total gross profit, meaning that the non‑RNG portion of the business is currently loss‑making. Hence, each additional RNG gallon directly improves the company’s bottom line and is essential for turning the net loss into a smaller loss (or eventual profit) if the non‑RNG side can be turned positive or at least neutralized.
- Long‑term, the volume helps CLNE meet its strategic goal of > 200 M RNG gallons by 2027, cementing its position in the fast‑growing renewable‑fuel market, enhancing its brand as a “clean‑fuel leader,” and opening up new revenue‑boosting opportunities from carbon‑credit markets.
Overall: The 61.4 M RNG gallons sold are the central engine of growth and the primary lever to lift margins. Their continued growth—paired with strategic pricing, contract locking, and leveraging renewable‑credit incentives—will be decisive in moving Clean Energy Fuels from a modestly loss‑making, high‑growth company to a profitable, high‑margin clean‑energy leader.