Greenlane Renewables (GRN) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 10% year-over-year to CAD 10.5 million, driven by system sales and aftercare services.

• Cash balance at September 30, 2024, was CAD 15.4 million, a 70% increase from Q2 2024, with no debt except normal payables.

• Adjusted EBITDA loss narrowed to CAD 200,000 from a CAD 4.4 million loss in Q3 2023; net loss improved 61% year-over-year to CAD 2 million.

• Operational efficiencies and disciplined cost management were achieved, including a workforce reduction and restructuring charge of CAD 500,000, expected to yield a CAD 5 million annual G&A cost reduction.

• Over 20 biogas upgrading system projects completed in the last two years, with more than 145 in total.

Financial highlights

• System sales contributed CAD 8.5 million; aftercare services grew to CAD 2 million in Q3 2024.

• Gross margin before amortization was 34% (CAD 3.6 million), including a CAD 400,000 benefit from expired warranty provisions; excluding warranty impact, gross margin was 30%, higher than Q3 2023 and Q2 2024.

• Sales order backlog at quarter-end was CAD 14.3 million, with Airdep contributing CAD 5.9 million.

• Impairment charge of CAD 1 million on outstanding notes receivable recorded in Q3 2024.

• Net loss and comprehensive loss of CAD 2 million, a 61% improvement from CAD 5.1 million loss in Q3 2023.

Outlook and guidance

• Goal of achieving positive Adjusted EBITDA for the full year will not be met in 2024 due to delays in new contract signings.

• Service business expanded with new maintenance contracts, leveraging a large installed customer base.

• Company remains optimistic about future opportunities in the RNG market, with IEA forecasting 30% global biogas demand growth by 2030.

• Management maintains focus on operational efficiencies and cost discipline to support future profitability.