Greenlane Renewables (TSE:GRN) reported third-quarter revenue of CAD 12.3 million, up 7% from a year earlier, as growth in its higher-margin parts and service business helped lift adjusted EBITDA to CAD 2.0 million.
The adjusted EBITDA result, compared with CAD 0.5 million in the third quarter of 2025, was the company’s second-highest quarterly figure, Chief Executive Officer Brad Douville said. Greenlane also continued preparing its Cascade LF and Cascade MS biogas upgrading products for commercial production, with Brazil as the initial market.
Higher-margin businesses drive results
Parts and service revenue rose 55% to CAD 5.0 million, partly because of the timing of a significant order from an existing renewable natural gas project developer in the United States, Chief Financial Officer Stephanie Mason said.
Gross margin before amortization improved to 46% from 39% a year earlier. Mason attributed the increase to a favorable project mix, including higher parts and service and biogas desulfurization system sales.
Biogas upgrading system sales decreased as three contracts were completed, releasing approximately CAD 0.7 million in project contingency. Operating expenses also reflected the capitalization of CAD 0.7 million in development expenditures after the company reached milestones on its Cascade products.
Asked about the sustainability of profitability, Mason noted that the quarter benefited from the timing of the large parts sale, project completions, the release of contingency and capitalized development costs. She also pointed to growth in parts and service and biogas desulfurization, businesses that she said have historically generated margins of about 40% to 50%, as lower-margin legacy upgrading sales wind down.
Greenlane ended the quarter with CAD 12.2 million in cash, no debt and a CAD 20 million standby letter of credit facility. Mason said the company believes it has the cash resources needed to execute its strategic plan.
Brazil production preparations advance
Greenlane is targeting production readiness in Brazil by the end of 2026 for its new products, subject to Panasonic receiving permits, Douville said. Under a technology licensing agreement, Panasonic will manufacture the Cascade products in Brazil, while Greenlane will retain responsibility for design, supply chain management, marketing, sales, commissioning and service.
Upgrades to a Panasonic facility in Brazil are nearly complete, and Panasonic has issued purchase orders for manufacturing equipment and long-lead-time materials for the first production units, Douville said. Mason added that Panasonic is responsible for the facility upgrades, equipment and production parts.
Greenlane is also working on a separate manufacturing plan for North America, where it expects to complete production readiness in 2027. Mason said the company must decide between a more capital-intensive approach and a capital-light plan with a partner.
Douville said several sales opportunities are in advanced stages, primarily in Brazil, although opportunities in North America are also progressing. Sales cycles typically last one to two years, he said. Greenlane began quoting the products about a year ago.
Cascade LF, designed for landfill gas upgrading, is the core focus in Brazil, where Douville said landfills account for 80% of the country’s biomethane production. He said the company had received positive customer feedback on the product’s cost and performance.
Market opportunity and policy support
Greenlane estimates an annual CAD 1.3 billion addressable market for Cascade LF and Cascade MS across Brazil, the United States and Canada. Douville said the estimate is based on company assumptions using International Energy Agency data and equates to 113 systems a year at an average selling price of CAD 11.5 million.
The company plans to earn royalty revenue under its Panasonic agreement. Douville said an earlier license for one of Greenlane’s water wash products in Brazil had generated an 80% gross margin over the past three years.
Discussing demand, Douville pointed to Brazil’s Fuel of the Future law, which he said requires natural gas suppliers and distributors to reduce greenhouse gas emissions by adding biomethane to their mix. He also cited U.S. guidance on Section 45Z credits, Canada’s Clean Fuel Regulations and an extension of Italy’s biomethane support scheme as examples of policy support for the industry.
About Greenlane Renewables (TSE:GRN)
Greenlane is driving change: accelerating the energy transition. We are cleaning up two of the largest and most difficult to decarbonize sectors of the global energy system: the natural gas grid and commercial transportation. As a pioneer and leading global specialist in biogas desulfurization and upgrading, we have been actively contributing to the decarbonization of our planet for over 35 years with more than 355 systems supplied into 28 countries. We transform biogas generated from organic waste into high-value grid-ready renewable natural gas (‘RNG’) from a wide range of sources such as landfills, sugar mills, dairy farms, wastewater, and food waste.
