Greenlane Renewables (GRN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached CAD 14.6 million, with adjusted EBITDA loss of CAD 0.8 million and net loss of CAD 0.4 million, reflecting ongoing cost management and a focus on achieving adjusted EBITDA positivity.

• Robust sales from Airdep division and service business, with the first Cascade H2S unit delivered in North America.

• Four new service contracts were secured for large U.S.-based RNG facilities, expanding recurring revenue streams.

• Workforce was reduced by 18% post-quarter, expected to lower costs by CAD 1 million for the remainder of 2024.

• 25 new biogas upgrading system projects recently completed or nearly completed, driving pursuit of additional service contracts.

Financial highlights

• Q2 2024 revenue was CAD 14.6 million, up from CAD 13.8 million in Q2 2023.

• Gross margin before amortization was CAD 4.1 million (28% of revenue), benefiting from CAD 800,000 in warranty provision adjustments; excluding this, margin was 22%.

• Adjusted EBITDA loss of CAD 0.8 million, improved from a loss of CAD 1.6 million in Q2 2023.

• Net loss of CAD 0.4 million, compared to CAD 4.3 million net loss in Q2 2023.

• Sales order backlog at CAD 14.3 million as of June 30, 2024.

Outlook and guidance

• Several late-stage project opportunities are delayed due to customers' final investment decisions, mainly related to financing and interest rates.

• Anticipates converting these opportunities into purchase orders soon, with additional royalty opportunities in Brazil expected to close in the second half of the year.

• Achieving positive adjusted EBITDA in 2024 depends on replenishing the biogas upgrading system sales order backlog.

• Regulatory developments in Canada, such as new methane emission rules and RNG mandates, are expected to support market growth.

• Goal to acquire multiple new service contracts by year-end, leveraging expertise in large facility operations.