Montauk Renewables, Inc. Revenue Disclosure
NOTE 4—REVENUES FROM CONTRACTS WITH CUSTOMERS
The Company’s revenues are comprised of renewable energy and related Environmental Attribute sales provided under short, medium and long term contracts with its customers. All revenue is recognized when (or as) the Company satisfies its performance obligation(s) under the contract (either implicit or explicit) by transferring the promised product or service to its customer either when (or as) its customer obtains control of the product or service. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation. The Company allocates the contract’s transaction price to each performance obligation using the product’s observable market standalone selling price for each distinct product in the contract. The Company's typical invoicing terms are payment due within 30 days.
Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring its products or services. As such, revenue is recorded net of allowances and customer discounts as well as net of transportation and gathering costs incurred by the customer following the transfer of control of the commodities sold. To the extent applicable, sales, value add and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenues) basis.
The Company’s performance obligations related to the sale of renewable energy (i.e. RNG and Renewable Electricity) are generally satisfied over time. Revenue related to the sale of renewable energy is generally recognized over time using an output based upon the product quantity delivered to the customer. This measure is used to best depict the Company’s performance to date under the
terms of the contract. Revenue from products transferred to customers over time accounted for approximately 26%, 24% and 29% of revenue for the years ended December 31, 2024, 2023 and 2022, respectively.
The nature of the Company’s long-term contracts may give rise to several types of variable consideration, such as periodic price increases. This variable consideration is outside of the Company’s influence as the variable consideration is dictated by the market. Therefore, the variable consideration associated with the long-term contracts is considered fully constrained.
The Company’s performance obligations related to the sale of Environmental Attributes are generally satisfied at a point in time and were approximately 74%, 76% and 71% of revenue for the years ended December 31, 2024, 2023 and 2022, respectively. The Company recognizes Environmental Attribute revenue at the point in time in which the customer obtains control of the Environmental Attributes, which is generally when the title of the Environmental Attribute passes to the customer upon delivery. In limited cases, title does not transfer to the customer and revenue is not recognized until the customer has accepted the Environmental Attributes. The Company’s performance obligations under its counterparty sharing agreements are generally satisfied at a point in time when the earnings process is completed by the counterparty. Counterparty sharing arrangement revenues were approximately 0.4%, 0.0% and 0.6% of revenue for the years ended December 31, 2024, 2023 and 2022, respectively.
The following tables display the Company’s disaggregated revenue by major source, excluding realized and unrealized gains or losses under the Company’s gas hedge program, based on product type and timing of transfer of goods and services for the years ended December 31, 2024, 2023 and 2022:
|
|
Year Ended December 31, 2024 |
|
|||||||||
|
|
Goods transferred at a point in time |
|
|
Goods transferred over time |
|
|
Total |
|
|||
Major goods/Service line: |
|
|
|
|
|
|
|
|
|
|||
Natural gas commodity |
|
$ |
770 |
|
|
$ |
34,269 |
|
|
$ |
35,039 |
|
Natural gas environmental attributes |
|
|
122,463 |
|
|
|
— |
|
|
|
122,463 |
|
Electric commodity |
|
|
— |
|
|
|
10,648 |
|
|
|
10,648 |
|
Electric environmental attributes |
|
|
7,586 |
|
|
|
— |
|
|
|
7,586 |
|
|
|
$ |
130,819 |
|
|
$ |
44,917 |
|
|
$ |
175,736 |
|
Operating segment: |
|
|
|
|
|
|
|
|
|
|||
RNG |
|
$ |
123,233 |
|
|
$ |
34,269 |
|
|
$ |
157,502 |
|
REG |
|
|
7,586 |
|
|
|
10,648 |
|
|
|
18,234 |
|
|
|
$ |
130,819 |
|
|
$ |
44,917 |
|
|
$ |
175,736 |
|
|
|
Year Ended December 31, 2023 |
|
|||||||||
|
|
Goods transferred at a point in time |
|
|
Goods transferred over time |
|
|
Total |
|
|||
Major goods/Service line: |
|
|
|
|
|
|
|
|
|
|||
Natural gas commodity |
|
$ |
— |
|
|
$ |
30,207 |
|
|
$ |
30,207 |
|
Natural gas environmental attributes |
|
|
125,874 |
|
|
|
— |
|
|
|
125,874 |
|
Electric commodity |
|
|
— |
|
|
|
11,301 |
|
|
|
11,301 |
|
Electric environmental attributes |
|
|
7,522 |
|
|
|
— |
|
|
|
7,522 |
|
|
|
$ |
133,396 |
|
|
$ |
41,508 |
|
|
$ |
174,904 |
|
Operating segment: |
|
|
|
|
|
|
|
|
|
|||
RNG |
|
$ |
125,874 |
|
|
$ |
30,207 |
|
|
$ |
156,081 |
|
REG |
|
|
7,522 |
|
|
|
11,301 |
|
|
|
18,823 |
|
|
|
$ |
133,396 |
|
|
$ |
41,508 |
|
|
$ |
174,904 |
|
|
|
Year Ended December 31, 2022 |
|
|||||||||
|
|
Goods transferred at a point in time |
|
|
Goods transferred over time |
|
|
Total |
|
|||
Major goods/Service line: |
|
|
|
|
|
|
|
|
|
|||
Natural gas commodity |
|
$ |
1,246 |
|
|
$ |
51,652 |
|
|
$ |
52,898 |
|
Natural gas environmental attributes |
|
|
143,025 |
|
|
|
— |
|
|
|
143,025 |
|
Electric commodity |
|
|
— |
|
|
|
10,449 |
|
|
|
10,449 |
|
Electric environmental attributes |
|
|
7,016 |
|
|
|
— |
|
|
|
7,016 |
|
|
|
$ |
151,287 |
|
|
$ |
62,101 |
|
|
$ |
213,388 |
|
Operating segment: |
|
|
|
|
|
|
|
|
|
|||
RNG |
|
$ |
144,271 |
|
|
$ |
51,652 |
|
|
$ |
195,923 |
|
REG |
|
|
7,016 |
|
|
|
10,449 |
|
|
|
17,465 |
|
|
|
$ |
151,287 |
|
|
$ |
62,101 |
|
|
$ |
213,388 |
|
Practical expedients and remaining performance obligations
The Company recognizes the sale of natural gas and electric commodities using the right to invoice practical expedient. The Company determined that the revenues recognized as of period end correspond directly with the value transferred to customers and the Company's satisfaction of the performance obligations to date. Furthermore, with the application of the right to invoice practical expedient and in consideration that contracts related to future environmental attributes sales do not exceed one year, there are no remaining unsatisfied or partially satisfied performance obligations as of December 31, 2024.About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.