Montauk Renewables, Inc.: Fiscal Year 2025 Annual Report Summary

This summary provides retail investors with a clear, comprehensive overview of Montauk Renewables' operations, financial health, strategic direction, and key risks for the fiscal year ended December 31, 2025.

Business Overview Montauk Renewables produces renewable energy through two core segments:

• Renewable Natural Gas (RNG): Montauk converts waste streams, like landfill gas and agricultural waste, into pipeline-quality natural gas. This process captures methane emissions, transforming a potent greenhouse gas into a valuable, clean-burning fuel. In 2025, Montauk operated a portfolio of RNG facilities across the U.S., producing renewable natural gas.
• Renewable Electricity Generation: The company also generates electricity from renewable sources, primarily through landfill gas-to-electricity projects. Its facilities generated renewable electricity in 2025.

Beyond these primary products, Montauk also sells:

• Natural Gas Commodity: This refers to the physical natural gas Montauk produces and sells into pipelines or to end-users.
• Electric Environmental Attributes: These valuable credits, such as Renewable Energy Credits (RECs) and Low Carbon Fuel Standard (LCFS) credits, are generated from Montauk's renewable energy production. The company sells these attributes separately from the physical energy, and they represent a significant revenue stream that incentivizes clean energy production.

Management Discussion and Analysis (MD&A) Highlights Management's discussion highlighted several key factors driving the company's performance and strategic direction:

• Revenue Drivers: Higher RNG production volumes and favorable pricing for environmental attributes primarily drove the increase in total revenue, reflecting strong market demand and operational efficiency.
• Profitability Improvement: Improved operational efficiencies, effective cost management, and favorable commodity pricing contributed to the significant increase in net income.
• Customer Concentration: Montauk's business has a notable customer concentration. In 2025, its top four customers (Customer A, B, C, and D) collectively accounted for a significant portion of total revenue. While these typically involve long-term contracts with established partners, management recognizes this concentration as a factor influencing revenue stability.
• Post-Year-End Financial Move: On March 9, 2026, Montauk Renewables secured a new senior credit facility. This facility replaces their previous credit agreement, providing enhanced financial flexibility. Montauk intends to use the funds primarily for general corporate purposes, including working capital, capital expenditures for ongoing and new projects, and potential strategic acquisitions. This move strengthens the company's balance sheet and supports its ambitious growth plans for the coming years.

Future Outlook Montauk's strategy for future growth centers on:

• Organic Expansion: Optimizing and expanding existing facilities while developing new RNG and renewable electricity projects.
• Strategic Acquisitions: Exploring opportunities to acquire complementary assets or businesses to accelerate growth.
• Diversification: Investigating new waste-to-energy technologies and markets to broaden its revenue base and mitigate risks. Management projects continued growth in RNG production and environmental attribute sales. Favorable regulatory environments and increasing demand for sustainable energy solutions will drive this growth. The company plans to continue investing in capital projects to support this expansion.

Competitive Position The renewable energy sector, especially the RNG market, is highly competitive. Montauk competes with:

• Other RNG producers: This includes established companies and new entrants, some of whom may possess greater financial resources or different technological approaches.
• Traditional energy providers: Renewable energy competes directly with fossil fuels in the broader energy market.
• Waste management companies: These companies may develop their own waste-to-energy projects. Key competitive factors in the industry include access to feedstock (like landfill gas and agricultural waste), project development and operational expertise, the ability to secure long-term off-take agreements, regulatory knowledge, and access to capital. Montauk believes its established infrastructure, operational track record, and strategic relationships give it a strong competitive standing.

Risk Factors Investors should consider several key risks:

• Regulatory and Policy Changes: Government incentives, tax credits, and environmental regulations heavily influence the renewable energy sector. Adverse changes could significantly impact Montauk's profitability and project viability.
• Commodity Price Volatility: Fluctuations in natural gas and electricity prices, along with the market value of environmental attributes (e.g., LCFS, RINs, RECs), can affect revenue and margins.
• Operational Risks: Challenges such as equipment failures, feedstock availability issues, permitting delays, or natural disasters could disrupt production and increase costs.
• Competition: The renewable energy market is competitive, with new entrants and evolving technologies potentially impacting Montauk's market share and pricing.
• Interest Rate Risk: As a capital-intensive business, changes in interest rates can impact borrowing costs for new projects and the servicing of existing debt.
• Customer Concentration: As noted in the MD&A, a limited number of customers generate a significant portion of Montauk's revenue. A material reduction in demand or contract termination from any of these key customers could materially impact Montauk's financial performance.