Greenlane Renewables Stock

Good afternoon, ladies and gentlemen. Welcome to the Greenlane Renewables Second Quarter 2026 Video Conference. My name is Darren Seed, President of Incite Capital Markets, responsible for Investor Relations at Greenlane. I'm joined today by Brad Douville, Greenlane's Chief Executive Officer; and Stephanie Mason, Greenlane's Chief Financial Officer. We'll begin with prepared remarks followed by a Q&A, which I will moderate.

Before beginning our formal remarks, we'd like to remind listeners that today's discussion may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. Greenlane Renewables does not undertake to update any forward-looking statements, except as may be required by applicable laws.

Listeners are urged to review the full discussion of risk factors in the company's annual information form, which has been filed with Canadian securities regulators. Please feel free to submit any questions you may have through our investor e-mail address at [email protected]. Now over to Brad.

Thanks, Darren. Good afternoon, and thank you, everyone, for joining us today. This quarter marked another important step in Greenlane's evolution as we continue to execute on our strategic initiatives that we believe will define our next phase of growth.

During the quarter, we significantly advanced the commercialization of our future growth engine, our next-generation Cascade LF landfill gas upgrading technology by achieving two important milestones. First, we solidified our manufacturing strategy in Brazil by signing the definitive agreements with global manufacturing and technology leader, Panasonic.

Under the agreements, Greenlane and Panasonic have entered into -- have partnered to establish volume production of Greenlane's Cascade LF and Cascade MS proprietary product lines in Brazil, which is key to enhancing project economics for our customers in the region. The partnership with Panasonic not only brings their manufacturing expertise, but also the strength of their balance sheet to support sales growth.

Panasonic is investing in facility modifications, tooling and production equipment for its existing plant in S o Jos dos Campos in the Brazilian state of S o Paulo to produce the Greenlane branded product modules and will provide the necessary working capital and advanced payment assurances to meet customer requirements.

Panasonic's initial investments are expected to be in the range of BRL 8 million to BRL 10 million, which is CAD 2 million to CAD 3 million. Greenlane retains responsibility for product design, management of the supply chain, including supplier selection and supplier quality assurance, marketing and sales and commissioning and servicing of the products. Second, we successfully completed testing of our proprietary linear NRU, nitrogen rejection unit technology that it sits at the heart of the Cascade LF.

We demonstrated breakthrough methane recovery performance with a low-cost architecture. Methane recovery is the primary performance parameter for any upgrading system because every 1% improvement translates into a 1% increase in project revenue, which drops directly to the bottom line.

Achieving high methane recovery is difficult in landfill gas applications because of the unique challenge of separating nitrogen from methane. Results from the testing exceeded our expectations. At a time when global energy markets are increasingly focused on supply security and reliable fuel sources, technologies like Cascade LF are well positioned to support the growing role of RNG as a resilient, scalable and low-carbon energy solution.

Despite making substantial investments in the final development and start of production readiness for Cascade LF, we were able to generate a positive EBITDA result in the quarter. We've noted that our strategy includes continued sales growth in our most profitable business areas. Our parts and service and biogas desulfurization are those business areas that have continued robust performance, providing strong gross margin contribution as a result of durable uptake of these products and services in the market.

We also continue to make positive progress in closing out legacy biogas upgrading system supply contracts. Our strategy builds on the strength of this solid foundation, adding step change profitable growth potential with Cascade LF and Cascade MS with an estimated total addressable market of $600 million annually. We are still aiming for production readiness by the end of 2026.

Taking a moment to reflect on industry happenings, there are some recently released data and reports that I believe are worth sharing that provide helpful context for our business and a view of where the market might be heading. According to new data released by the American Biogas Council, landfill remains the largest source of RNG production in the U.S., producing 64% of the nation's total from just under 600 landfill gas capture systems.

Developers brought 20 new landfill projects online in 2025, all of which capture additional biogas and convert it into RNG that displaces conventional natural gas. Together, these facilities added 40 billion cubic feet of new biogas capture capacity, about 75% of all U.S. biogas capture capacity added last year across all biogas sectors.

Landfill gas facilities typically capture far larger volumes of biogas than systems in agriculture, wastewater or food waste sectors, resulting in a disproportionate share of the total biogas capture.

Based on the U.S. EPA Landfill Methane Outreach Program classifications, approximately 700 additional landfills remain suitable for landfill gas development. Meanwhile, in Europe, installed biomethane production capacity reached 8.2 billion cubic meters per year by the end of Q2 2026. That's up 17% compared to 2025 according to the European biomethane map developed in cooperation with the Gas Infrastructure Europe, GIE.

Investor appetite also remains strong with investment commitments reaching EUR 36 billion, a significant increase from last year's reported investments of EUR 28 billion. According to the biomethane investment outlook, this growing investor confidence underscores the sector's significant acceleration potential provided the right regulatory conditions are in place.

If fully realized, these investments are expected to deliver 9 billion cubic meters per year of additional biomethane production capacity by 2030, strengthening Europe's domestic energy supply and contributing to the EU's decarbonization objectives.

According to a 2026 Guidehouse study, the EU27's potential stands at 31 billion to 32 billion cubic meters for 2030 and is projected to reach 163 billion to 184 billion cubic meters by 2050. I appreciate your continued support, and I look forward to keeping you informed of our progress. Also, I want to thank the Greenlane employees for their continued hard work, passion and drive for results. With that, I'll now turn the call over to Stephanie.

Thanks, Brad, and good afternoon, everyone. As a reminder, all figures are in Canadian dollars unless otherwise stated. Our financial performance reflects the progress we are making in executing our strategic plan.

Revenue and adjusted EBITDA in Q2 2026 are lower than the same period last year due to the recognition of royalty revenue and a large parts order that occurred in Q2 2025. Excluding these two items, financial results improved over the same period last year, driven by a $0.9 million improvement in system sales revenue, largely from biogas desulfurization sales.

Q2 2026 marked a return to positive adjusted EBITDA, and we maintained a strong gross margin before amortization of 41%, reflecting the continued benefits of our focus on the most profitable business areas, disciplined project execution and operational efficiency. At the same time, as Brad noted, we continued investing in our next-generation Cascade LF landfill gas upgrading technology that will support Greenlane's long-term growth.

Research and development expenses doubled over the same period last year to $0.8 million. Investing in R&D at this level while returning to a positive adjusted EBITDA demonstrates that we can continue advancing innovation while improving the underlying financial performance of the business through our parts and service and biogas desulfurization business areas.

We ended the quarter with $12.1 million in cash and cash equivalents, no debt and a sales order backlog of $25.6 million, providing financial flexibility to execute our strategic priorities while maintaining a disciplined approach to cost management and supporting our global customer base. We look forward to keeping you apprised of our progress. And with that, let's go over to you, Darren, for the Q&A.

So let's touch base on the Cascade LF commercialization. You've highlighted significant progress with Cascade LF, including successful linear NRU testing and your manufacturing partnership with Panasonic. Can you provide an update Brad, on next steps in any customer engagement?

Yes, for sure. So firstly, there has been tremendous activity and results with -- starting with the linear NRU testing results. It was better than we expected, as I mentioned. But that's an important marker for our technology development and our technology readiness for launch coming later this year.

The partnership with Panasonic for local manufacturing, obviously, that's key, solidifies our footprint in Brazil to be able to produce and serve the market. The other thing that just happened, so this year -- sorry, this week was the F rum do Biog s. It's one of the largest conferences in the country, an excellent opportunity to connect and reconnect with all our customers and stakeholders to continue driving awareness of the product, continue having those discussions and dialogue around the product from a quoting perspective, to be able to serve our customers as they continue to develop new projects. And we remain completely focused on the production readiness by the end of this year.

So let's look at the sales pipeline and backlog. While backlog declined sequentially during the quarter, Stephanie, how should investors expect backlog to build?

Thanks, Darren. As we've talked about before, the real potential step change in the business is Cascade LF. That's where we can see a sizable market. As Brad mentioned, we have a total addressable market of around $600 million. And we're working really heavily towards marketing our product. We're approaching customers.

We're working through proposals and really working towards that production readiness date at the end of this year. And then also, just as a reminder, the backlog doesn't include any service business. Our service and spare parts is not included in the backlog. So any increases that you're seeing there, you're not going to see come through in the sales order backlog.

And Stephanie, gross margin before amortization remains strong at 41% this quarter. As Cascade LF enters the market and the product mix evolves, how should investors think about the sustainability of margins going forward?

Yes, that's a really good question. So with the announcement of the agreements with Panasonic, a part -- one of the part of those agreements is a technology licensing agreement, which is going to be royalty-based revenue. And if you look, we have kind of, a baseline for historical royalty-based margins that are significantly higher than I would say our historical systems business has allowed.

This quarter marked a return to positive adjusted EBITDA, Stephanie, while maintaining investment in research and development. What are the key operational milestones investors should watch over the next 12 to 18 months as Greenlane works toward consistently profitable growth?

Thanks, Darren. I'd like to say that we had R&D investments of around $800,000, which is consistent with what we saw in Q1. And in Q2, we were able to achieve a positive adjusted EBITDA result. As we're working towards production readiness at the end of 2026, kind of, Cascade LF results will come sometime thereafter.

Okay. Thanks, Stephanie. And Brad, today, you stated that the total addressable market size for Cascade LF and Cascade MS is $600 million. I believe this is the first time you've mentioned this number. What can you say about where this number comes from and how investors should think about Greenlane's growth prospects?

Yes, it's a big number. It's the first time we've talked about it. Stephanie has mentioned it. I've mentioned it now today. So before I talk about where it comes from, what is it, is the first thing to talk about. So what it is, is it's the addressable market with two products.

So remember, we've got multiple product lines, but the two new products. So the Cascade LF that together comes with that, the Cascade MS. So between those two products, but also specific geographies. So that is the specific geographies of Brazil, U.S. and Canada. So that's two products, three geographies is the scope of that number. It's a big number. And where it comes from is we typically -- I think investors have seen from us, we typically rely on IEA data.

So that's the International Energy Agency's data. They tend to be one of the more credible data sources in the industry. We show that in our investor information that's on our website. So we rely on that. It has a projection through 2035.

Using some of our internal management estimates together with the IEA data, we put together what we believe can be the number of upgraders that are necessary to satisfy the incremental year-by-year biomethane growth in those three geographies in the sectors in which those two new products address.

So $600 million, just to put that into context, it's roughly 14x our last year's revenue as incremental opportunity that we're targeted to go after. So when we talk about adding step change profitable growth with Cascade LF and Cascade MS, this is what we're talking about.

Perfect. Well, thanks, Brad. Thank you, Stephanie. And we look forward to seeing everyone on the next quarter's review. With that, I say good afternoon.

Good afternoon, ladies and gentlemen. Welcome to the Greenlane Renewables First Quarter 2026 Video Conference. My name is Darren Seed, President of Insight Capital Markets, responsible for Investor Relations at Greenlane. I'm joined today by Brad Douville, Greenlane's Chief Executive Officer; and Stephanie Mason, Greenlane's Chief Financial Officer. We'll begin with prepared remarks followed by a Q&A, which I will moderate. Before beginning our formal remarks, we'd like to remind listeners that today's discussion may contain forward-looking statements that reflect current views with respect to future events.

Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. Greenlane Renewables does not undertake to update any forward-looking statements, except as may be required by applicable laws. Listeners are urged to review the full discussion of risk factors in the company's annual information form, which has been filed with Canadian securities regulators. Please feel free to submit any questions you may have through our investor e-mail address at [email protected]. Now over to Brad.

Thank you, Darren. Hello, everyone. Thanks for joining today. So on the next slide, what I'll do is I will -- Stephanie is going to get into the numbers in just a moment, but let me set the stage to begin with. And you've heard me say this many times. We have 3 strategic initiatives for the company. They're underpinned by financial discipline and adjusted EBITDA growth. Our first strategic initiative is continuing sales growth in our most profitable areas of our business. In Q1, we saw strong gross margin contribution, particularly from parts and service and biogas desulfurization. So that's going well according to plan. Our second strategic initiative is to reconfigure our upgrading systems business area. So obviously, we're using the gross margin contribution from that while we work through the reconfiguration of our core upgrading business.

So what does that mean? So that means we ramp down or we complete the ramp down of our legacy low-margin contracts and then we ramp back up centered on proprietary standard products and royalty revenue. We'll also undertake our new contracts that will be structured for lower risk, higher margin and lower revenue per system with lower overall cost for customers. Let me pause for a minute. There's a lot there. Let me unpack that for you. So we are doing a couple of things. So one is royalty revenue. I'll come back to that in a bit.

But as it relates to third-party components, at the top, the upper image, that is the Greenlane proprietary products before system integration. Greenlane is responsible for system integration. The lower image shows what it looks like after system integration. So there's a number of third-party components in here. So what we do going forward to create the situation of lower risk, it does result in some lower revenue per system, but it's higher margin and it's an overall lower cost for the customer. We do that by eliminating the low-margin revenue associated with the modules for which Greenlane is not design responsible. So those third-party components, we establish a relationship between the customer and the third party so that direct invoicing can occur. Let me explain now the third strategic initiative. So that's one and two. Number three, then we add step change profitable growth potential with Cascade LF. That goes across all the business areas.

So we complete the plan as of now, complete final development, commence manufacturing in Brazil by the end of 2026 this year. And then also this year, we'll be establishing our manufacturing plan to serve the North American market. Next. I've also talked about our key strategic success criteria. We always think about -- we come back to these 4 criteria often. Today, I want to focus in on the fourth one, partnerships. So why is that important? Well, we believe that collaborating with leading industry partners who bring complementary expertise, focus and value helps us deliver complete solutions, extend market reach and allows us to better serve our customers.

The partnership with Panasonic that we announced earlier this week is to establish volume production of Greenlane's Cascade LF and MS proprietary standard product lines in Brazil, and it brings not only Panasonic's manufacturing expertise, but also the strength of Panasonic's balance sheet to support sales growth. Next slide. So let me just -- we press released this earlier this week, but let me just say a few words, the summary version of what we announced. So firstly, the facility location, it's an existing production facility that Panasonic has in Brazil. It's in San Jose Campos. It's in the Brazilian state of Sao Paulo. And under the agreements, Panasonic has been granted a technology license for fabricating the products in Brazil with a number of responsibilities.

So those responsibilities include the cost and activities related to the facility modifications necessary to produce the Greenlane products for procuring and installing the tooling. And then very importantly, providing the necessary working capital and advanced payment assurances to meet customer requirements. So Panasonic's initial investment is in the range of CAD 2 million to CAD 3 million or BRL 8 million to BRL 10 million. Under the arrangement, Greenlane retains responsibility for product design, management of the supply chain, including supplier selection, supplier quality assurance, also sales and marketing and commissioning and servicing of the products.

Next slide. So why Brazil? So we've talked about Brazil being our launch market for Cascade OF. With Cascade F comes along Cascade MS for the larger-sized digester projects. In Brazil, they have a vast agricultural sector, but also a large landfill sector that produce a lot of biogas. And it's been long developed for biogas to power. It's quickly switching from biogas to biomethane. Today, in Brazil, most of the biomethane is produced from landfill gas, probably about 80% -- and there's helpful government support as well with initiatives. So the first one is the government aims to replace all dumps with landfills equipped with biogas production. So that's one government initiative.

The other one is the country's new fuel of the future law. That requires that natural gas importers and suppliers in Brazil have to reduce their greenhouse gas emissions with biomethane starting at 1% this year, and that's prorated because it's coming into effect midyear, and it climbs to 10% by 2034. So if we back up and look at the projections, that's roughly a 7x increase to 2035, and that's approximately 21% annual compound annual growth rate in the market in the demand side of biomethane. So hopefully, that sets the stage. I'll let Steph take you through the numbers.

Thanks, Brad, and good afternoon, everyone. As a reminder, all figures are in Canadian dollars unless otherwise stated. We delivered solid financial results for our first quarter this year with $9.5 million in revenue and a gross margin, excluding amortization of 43% compared with $7 million and 40% in the same period last year. The 36% increase in year-over-year revenue at higher gross margins helped improve our adjusted EBITDA loss to $0.8 million from $1.1 million adjusted EBITDA loss in Q1 of 2025.

As Brad noted, we are also investing in the final development and production start readiness of our new CASCADE LF product line and our operating expenses in Q1 2026 reflected these investments accordingly. Raine's research and development expense increased to $0.8 million in Q1 2026 compared with $0.3 million in Q1 2025. general and administrative expenses of $3.9 million in Q1 2026 in comparison to $3.5 million in Q1 2025, mainly represent an increase in operational staffing in preparation for the sale and production of Cascade LF later this year. We've maintained a solid balance sheet, ending the quarter with a cash balance of $13.5 million, no debt and a sales order backlog of $31.5 million.

The movement in the cash balance from December 31, 2025, primarily reflects the movement in noncash working capital and the final payment of the contingent earn-out. As we flip to the next slide, Greenlane does not present biogas desulfurization results separately from upgrading systems. They're both included and combined in system sales. But if we look back on a pro forma basis, you can see that biogas desulfurization, which is primarily our regenerative H2S removal, saw a 3-year growth CAGR of revenue of 27%, and it has an average gross margin over those 3 years of roughly 50%.

If you look at parts and service, its CAGR for revenue is 34% over that same period and has a gross margin of around 40%. Now if you look at our royalty, it has a smaller dollar value of revenue contribution, but an outsized contribution on margin as its gross margin is sitting around 86%. And then if you look at our upgrading systems, it's been seeing a decline in revenue over those 3 years, and it has an average gross margin of around 20%. So as Brad noted above, Greenlane has been deliberately ramping down its legacy low-margin upgrading system contracts to ramp back up centered on proprietary standard products and royalty revenues. We look forward to keeping you appraised of our progress. And with that, let's go over to you, Darren, for the Q&A.

So looking at today's negative adjusted EBITDA of approximately $800,000, where can we see R&D expenses increase significantly year-over-year? How should investors think about R&D leading up to CASCADE LF's commercialization?

Yes. So if you looked at our last year's results, R&D started increasing in the second half of last year. We ended with Q4 of around $700,000. And then you can see in Q1 of this year, we're at around $800,000. So we're continuing to make investments throughout the year. We'll probably be roughly at the same rate as what you've seen in the last couple of quarters. But another thing that I want to highlight is that if you're looking at our adjusted EBITDA results, if you're to exclude R&D from our adjusted EBITDA, we're EBITDA neutral, which means that without any contribution from Cascade LF, we're sitting in an EBIT neutral position. So as Brad was noting, as we get Cascade LF in production, which is a target for later this year, you have the potential to see that growth in our bottom line kind of as soon as that product gets online.

Do you anticipate needing additional capital to support the Brazil ramp of global expansion?

No, not at this time. So as you probably have seen, we announced our partnership with Panasonic earlier this week. And with that, they're investing in the facility modification costs. They're investing in tooling, production equipment and things needed for -- to set up the manufacturing facility. You also will note if you looked at our last year's results, we did receive some grants. That's still an avenue that we're pursuing. So we'll see kind of if that amounts to anything this year.

Great. Now what can you say about the Cascade LF launch activities and your plans this year to secure customer orders?

Yes. Let me take that one, Darren. So the -- we're in the sales pipeline process right now with the products, mainly focused on Cascade LF, educating our customers on the new technology and what we're bringing to market. We're active at industry conferences. We just participated in one last month, a big one in Brazil. We have a large one next week in Detroit. It's in various locations in the U.S. this year, it's in Detroit. So we're -- we've got a number of opportunities at various stages in our sales pipeline process. And going forward, we'll be announcing those because they'll be significant as they come in the door.

Great. Thanks, Brad. And how should investors think about the economics of the Panasonic licensing agreement? What does Greenlane capture in terms of margin, royalties or what are capital requirements?

Yes. I guess I'll start off by saying, firstly, we're very proud of this partnership that we put together with Panasonic. As you can imagine, working with large multinational companies who have requirements for diligence and internal procedures to navigate through that is it's not easy. It's been a real pleasure working with the team at Panasonic to be able to put this together. And we've been at it, as you can imagine, for quite some time to be able to reach this milestone for us. Now all that said, going forward, in terms of the question that you've asked, how does it reflect in our financials?

I mentioned that there's the royalty component of this -- sorry, the technology license, which results in a royalty. Steph just showed what royalty has looked like in our business in the past. So that can be an indicator of what it might look like going forward. So that's why we've structured a significant portion of this related to royalty revenue because we see what that looks like for us. So in other words, we should expect to see per unit lower revenue, but with greater gross margin contribution. So that's indicative of the royalty model. And then additionally, we'll be making -- there'll be revenue opportunity for Greenlane on other aspects of the field site activities, so commissioning, field service as well as the system integration component of it that I mentioned earlier that Greenlane continues to take responsibility for.

So there'll be a number of ways to see revenue contribution from any given Cascade LF or Cascade MS system sale related to our relationship and partnership with Panasonic.

Great. Thanks, Brad. And thanks, Stephanie. And again, please feel free to submit any questions you may have through our investor e-mail address at [email protected]. Thanks very much, everyone.

Welcome to the Greenlane Renewables Fourth Quarter and Year Ended December 31, 2025 Video Conference. My name is Darren Seed, President of Incite Capital Markets, responsible for Investor Relations at Greenlane.

I'm joined today by Brad Douville, Greenlane's Chief Executive Officer; and Stephanie Mason, Greenlane's Chief Financial Officer. We will begin with remarks followed by Q&A, which I will moderate. Before beginning our remarks, we'd like to remind listeners that today's discussion may contain forward-looking statements that reflect current views with respect to future events.

Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. Greenlane Renewables does not undertake to update any forward-looking statements, except as may be required by applicable laws.

Listeners are urged to review the full discussion of risk factors in the company's annual information form, which has been filed with Canadian Securities Regulators. Please feel free to submit any questions you may have through our investor e-mail address at [email protected]. Now over to Brad.

Thanks for joining today. So firstly, let's take a look back. Let's look at our strategic initiatives that we had at the start of fiscal year 2025. We had a relentless focus on improving adjusted EBITDA results and maintaining healthy cash reserves.

And we would do that with 3 key strategic initiatives. The first one being continued sales growth in our most profitable business areas, which are proprietary standard products and parts and service. #2 is our -- improve the profitability of our system integration and delivery business area. We would do that by executing our projects on time, on budget, delighting customers and selling standard products versus one-off engineered solutions.

Thirdly, develop Cascade LF, our compelling next-generation landfill gas upgrading product line, capturing additional IP and planning manufacturing. So how do we do? While we overachieved our 2025 objectives, we generated $2.3 million in adjusted EBITDA versus a loss in 2024, and we increased, not just maintained, but we increased our cash balance over the same period last year.

Let's also take a look back. And just as a reminder and maybe a recharacterization, our 3 business areas: proprietary standard products, system integration delivery, parts and service. So what are those? Let's start with proprietary standard products. So our product lines beginning on the right of this chart, CASCADE H2S. So this is our biogas desulfurization system.

Below that, CASCADE Water. This is our long-standing water wash product line. It's the foundational technology upon which Greenlane was founded more than 35 years ago. And then our new product line that's built on all the previous products that we had delivered to date. So that's Cascade LF, which is our next-generation landfill gas upgrading, higher performance, lower cost. And then Cascade MS, which is our membrane separation. It's upgrading of anaerobic digester gas for larger flows and has low-cost synergy with Cascade LF.

So in 2025, the development of our Cascade LF, including our new proprietary linear NRU marks significant advancement in our technology portfolio. The new product line, which is engineered to improve methane recovery, methane recovery being the #1 performance indicator of an upgrading system, reduced system complexity, lower operating and capital cost, and that's spawned 4 new patent application filings since December of 2024. That, of course, further enhances our intellectual property portfolio.

Our system integration and delivery business area. So this is where we take our proprietary standard products shown on the right -- on the upper right. So that is the proprietary portion of our Cascade LF that's before integration. And then the image below that is after integration. So that's after -- for those customers that require it. So it's turnkey project delivery, where we integrate our proprietary standard products with third-party equipment and deliver to customers complete biogas upgrading systems.

So the scope of that is system engineering, third-party equipment specification, procurement, quality control, project management, installation at site, interconnecting piping, wiring and then, of course, system integration, performance testing and ultimately, operator training and handover. So in other words, full turnkey.

Our third business area, parts and service. So this is an attractive growing recurring revenue part of the business. We're adding value with an increased customer base. That increased customer base is from more than 500 systems sold into 32 countries. That gives us a large and growing pool of customers. So the kinds of things that we deliver is services here, remote monitoring, 24/7 technical support, proprietary software upgrades, scheduled and scheduled maintenance, priority spare parts, priority spare parts supply and performance optimization.

Let's look at the financial performance of all 3 business areas, and it's easiest to do this in a bit of a build here. So let's start with parts and services, the financial foundation. Our parts and service over the last 3 years has provided strong positive adjusted EBITDA growth.

And in 2025, approximately 15% adjusted EBITDA was generated on $14 million in revenue. If we layer on top of that, the proprietary standard products, so you can see that takes the combined adjusted EBITDA growth up to 28% on $39 million in revenue in 2025. Very strong adjusted EBITDA growth from these 2 parts of the business. And then we layer in our third business area, the system integration and delivery. You can see in the revenue chart, we're ramping down, we're deliberately ramping down. We're completing legacy low-margin contracts to ramp back up centered on Cascade LF with lower risk, higher margin. So that on a consolidated basis is 5%.

So in other words, the system integration and delivery brought down our results from the 28% to the 5%. Looking forward, our 2026 strategic initiatives are aligned with what we had last year, but of course, updated because we've made substantial progress. They continue to be underpinned by financial discipline that's foundational to our objectives for 2026.

Strategic initiative #1 remains unchanged from last year. It's working. So let's keep doing that, which is continued sales growth in our most profitable business areas, proprietary standard products and parts and service. Reconfigure -- the second one, reconfigure our system integration delivery business area. So complete the ramp down of legacy low-margin contracts and ramp back up centered on Cascade LF. We'll enter into new contracts that are structured for lower risk, higher margin and lower overall cost for customers.

And then thirdly, add step change profitable growth potential with Cascade LF. So complete the final development, commence manufacturing in Brazil with the aim of being ready to ship of the first unit by the end of this year and also this year, establish our manufacturing plan to serve the North American market.

And now over to Steph for the financial results.

Thanks, Brad. I'm going to talk through our highlights of 2025. As a reminder, all amounts are in Canadian dollars, unless otherwise stated. 2025 saw Greenlane back to a positive adjusted EBITDA, ending the year at $2.3 million, which was an improvement of $4 million, up from a loss of $1.7 million in 2024.

A big contributor to this adjusted EBITDA is the $2.9 million gross margin contribution, which was received under the technology licensing agreement with a local partner in Brazil. The agreement triggered a onetime minimum volume commitment. Now if we look down to revenue, revenue was $10.8 million, which was up by $2.3 million from Q4 2024. This increase consists mainly of $1.7 million in higher system sales and $0.6 million increase in parts and service revenue.

Looking to the full year of 2025, revenue was $44.4 million. This is a decline of $7.4 million. This consists of a $16.2 million reduction in system sales, which was partially offset by a $6.3 million increase in parts and service revenue and a $2.5 million increase in royalty revenue. Now if we go to look at gross margin before amortization, Q4 of 2025 was $4.4 million or 41% of revenue compared to $3.8 million or 45% of revenue in Q4 2024.

Now for the full year of 2025, we achieved gross margin before amortization of $19.1 million or 43% of revenue compared to $16.3 million or 32% of revenue for 2024. The change in margin contribution reflects mainly the product mix as we have products -- projects at varying margins at different stages of completion, and we're also seeing a growing contribution from our higher-margin parts and service business and royalty revenue streams.

I also want to highlight Q4 2025 net loss and comprehensive loss of $1.2 million versus net income and comprehensive income of $1.9 million in Q4 2024. In Q4 2025, we did see an increase in R&D expenses as we advance our Cascade LF product line. And in the prior quarter, we saw a gain in the change in fair value of note receivable, which was fully paid in January of 2025.

There was also movements in foreign exchange as we had a gain in Q4 2024 versus a loss in Q4 of 2025. We ended the year in a strong position with a sales order backlog of $33.6 million and a cash position of $17.7 million compared to $16.2 million in 2024, which was an increase of $1.5 million. This shows that Greenlane has a stable financial platform to support our backlog execution and our product development.

And with that, I'll send it back to Darren.

Thank you, Stephanie. Brad, you spoke today about the Cascade LF system. And how excited are you about its opportunities? And how should investors think about timing on revenue for this product?

I'm very excited, Darren. So I think that's clear. It's going to be a great product. So in terms of timing, provided we get through the steps to complete the activities to deliver or be ready to ship for the first unit by the end of this year. As you've heard from us before, that we do our revenue on a percent for the completion basis.

So as we sign contracts, we get those build slots filled up. Remember, the first build slot with completion or being ready to ship by the end of this year and then thereafter, we'll start to see revenue recognition from those contracts.

Got it. And so looking at R&D, is this still an important factor and a related expense when considering Greenlane?

So yes, R&D will continue to be a focus into 2026. As we've talked about with our Cascade LF product line, we're localizing manufacturing in Brazil and aiming to have the first unit ready to ship in 2026. So it could be a similar effort in 2026 that we saw last year.

Got it. Thanks, Stephanie. And as we've all seen in the news, there's an international situation in the Middle East that may have an impact on energy security. Does there appear to be any impact on Greenlane or perhaps the RNG space that we're aware of? Brad, I'll put that over to you.

Yes. Well, I think, obviously, the events happening in the Middle East are fresh, they're new, but they do bring us back to a clear focus on energy security. That's a thing. It highlights the overconcentration of energy sources, in this case, mainly oil, but not just oil, passing through a small Strait of Hormuz in the Middle East.

And that reminds us of the importance of local production, energy sources. And RNG is one of those. So anything that does not have to flow through that strait, we have to think about it again in terms of global energy security and sources of supply. So RNG provides that. RNG is local. It's low carbon and it's lucrative. So that's -- those are the things that we need to keep in mind with the RNG opportunity.

Well, thanks, Brett. Now let's pull this back to the financials released today. What should investors expect from Greenlane this year in 2026?

Yes. So 2025 was a good year. We ended with a positive EBITDA number. We have $33.6 million in our backlog, $17.7 million in cash. So we're starting the year with a really strong foundation. Our objective for 2026 is to still strive towards positive adjusted EBITDA results, but I will say we do see fluctuations quarter-on-quarter.

And then as Brad has talked about and I've talked about, Cascade LF is a new exciting product for us. We're striving towards a ready to ship date by the end of the year, and we're excited to see the impact this new product could have for Greenlane.

Thanks, Stephanie. Well, thank you for watching today's financial report, everyone, and we look forward to seeing you next quarter.

Good afternoon, ladies and gentlemen. Welcome to the Greenlane Renewables Third Quarter 2025 Video Conference. My name is Darren Seed, President of Insight Capital Markets, responsible for Investor Relations at Greenlane. I'm joined today by Brad Douville, Greenlane's Chief Executive Officer; and Stephanie Mason, Greenlane's Chief Financial Officer. We'll begin with prepared remarks followed by Q&A, which I will moderate.

Before beginning our formal remarks, we'd like to remind listeners that today's discussion may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. Greenlane Renewables does not undertake to update any forward-looking statements, except as may be required by applicable laws.

Listeners are urged to review the full discussion of risk factors in the company's annual information form, which has been filed with the Canadian securities regulators. Please feel free to submit any questions you may have through our investor e-mail address at [email protected]. Now over to Brad.

Good afternoon, and thank you, everyone, for joining us today on the update of the quarter. It's been a very busy quarter to say the least as we have accomplished many of the deliverables we set out for ourselves at the beginning of the year in our strategic plan.

Our third quarter was highlighted by positive adjusted EBITDA and earnings, an increase in our sales order backlog and the market launch of our next-generation landfill gas upgrading technology. Let me get into each of these.

At the start of the year, I said that we would have a relentless focus on profitability and maintaining healthy cash reserves. We've done that by delivering another strong quarter with positive adjusted EBITDA and our net -- and positive net income, marking back-to-back quarters of profitability.

Our persistence has strengthened our balance sheet with more than $19 million in cash on hand after averaging just over $16 million at quarter end over the past 3 quarters. Importantly, we've achieved these results while continuing to invest in our future, advancing our next-generation Cascade LF upgrading technology.

2025 represents a reset year for our core upgrading business, which historically has generated the bulk of our revenue, considering the contract values are in order of magnitude larger than our other current revenue streams.

Looking ahead, we've developed the Cascade LF upgrading system as our growth platform, building on the strong foundation of our biogas desulfurization, parts and service and royalty revenue streams. Quoting customers and working through the sales cycle to secure Cascade LF orders is underway following the product reveal events we held in September in Brazil and the U.S.

Revenue from new orders is likely to begin in 2026. We believe that the launch of this product line will help make RNG projects more accessible and scalable by enabling project owners to enhance revenue-generating RNG output from their landfill gas assets while minimizing upfront investment.

Greenlane's consistent financial and operational progress this year underscores the momentum we're building across the organization. We are creating a more resilient, focused company that is well positioned to drive long-term value for our shareholders and customers as we continue progressing towards achieving the 2025 strategic and financial goals outlined earlier this year.

With that, I will now turn the call over to Stephanie to take you through the numbers.

Thanks, Brad, and good afternoon, everyone. As a reminder, all figures are in Canadian dollars unless otherwise stated, and all comparisons are for the third quarter of 2025 against the third quarter of 2024. Greenlane continues to demonstrate discipline and improvement across key financial metrics.

Our revenue increased 10% to $11.6 million from $10.5 million in Q3 last year. We generated $0.5 million of adjusted EBITDA and $0.1 million of net income and comprehensive income. This marks a significant turnaround from last year's net loss and comprehensive loss of $2 million and adjusted EBITDA loss of $0.2 million and continues our achievements in Q2 of this year.

Our gross margin before amortization increased to 39% from 34% last year, driven by stronger sales, product mix and enhanced operational efficiency. At the same time, general and administrative expenses declined by 5% over the same quarter last year, enhancing our ability to convert top line growth into bottom line profitability.

Our sales order backlog has grown to $33.5 million, up sharply from $14.3 million a year ago. Sequentially, it grew by 27% from Q2 and 58% from Q1 of this year. Our $19.3 million in cash increased from $16.2 million in December 31, 2024, of which $1.2 million was from the release of restricted cash.

This strong cash balance and no debt provides us additional flexibility to invest strategically in growth initiatives such as the new Cascade LF product line. The combination of higher margins, a growing backlog and a strong balance sheet positions Greenlane to drive long-term value creation.

We remain focused on operational efficiency, financial discipline and the commercialization of our next-generation Cascade LF product line, as we continue to execute on our strategic plan. We look forward to keeping you appraised of our progress.

And with that, let's go over to Darren for the Q&A.

Thank you, Stephanie. Some great results today and a healthy increase in our cash balance. So how should investors think about the company's cash balance moving forward?

Thanks, Darren. That's a good question. I want to start by reminding everyone that we do not provide guidance. But what I will say is that we did see $1.2 million increase in our cash balance from the release of restricted cash. But even above and beyond that, we've been able to maintain a strong cash position. So we've already said we've been focusing on the profitable areas of our business, having financial discipline. So that is a main contributing factor.

And with that strong cash balance, we're going to invest in our business. We're investing in the Cascade LF product line. We're working on setting up manufacturing in the business, but we also want to keep optionality open and really be able to focus on strategic growth for our business.

Thank you, Stephanie. Now looking at the new Cascade LF system. We've revealed it. We're marketing it to new and existing customers. So how should investors think about its success or any purchase order reactions from customers?

Yes. Let me take that one. So firstly, we set our sights on solving the most difficult problems in the industry, and we're doing that with Cascade LF, specifically the persistent challenge of nitrogen removal, oxygen removal from methane in landfill gas applications. So that's really what this new technology associated with our new Cascade LF product line is around.

So our ambition was to come down the cost curve, go up the performance curve, and that's something that we've been listening to our customers, obviously, for quite some time. We knew it's something that they need to be able to do more projects, smaller projects, but also the kind of projects that they need considering the amounts of nitrogen and oxygen in their various landfill assets.

So, so far, so good. We've had some really positive feedback. We've had the reaction that we were hoping to get in terms of this product being compelling. And we're just in the early throes of that with early days on the sales pipeline. We just launched it from a marketing perspective in September. And so far, so good, really great feedback from customers so far.

Thanks, Brad. You've noted that in the Cascade LF product reveal events were held in Brazil and in the U.S. Are there other geographies of focus? And can you say more about the Cascade LF being the growth platform going forward after a reset year in 2025 for Greenlane's core upgrading business?

Yes. So the -- if you think about the sources of RNG, the feedstock sources, in particular, so landfill gas in the Americas, it represents about 70% of -- 70% of RNG is derived from landfill gas. Europe is a bit of a different case. Europe is more mainly dominated with anaerobic digestion.

So that means our core focus area is the Americas. So we've launched -- did the marketing launch in Brazil, in the U.S., but key focus is other parts of Latin America and also Canada. When we talk about Cascade LF being the growth platform, it's really important to note that relative to the other revenue streams in the business today.

So if you look at our biogas desulfurization product line, for example, contract values associated with the upgrading system, Cascade LF, it's an order of magnitude greater. So achieving the same kind of growth levels that we've had in the base business with a much higher revenue. That's what we mean when we say Cascade LF is really our growth engine going forward.

Thanks, Brad. Now I see that the Canadian government has tabled -- has recently tabled their budget for a vote in the House of Congress. Have you seen anything in that budget that might benefit Greenlight?

Yes, there's a couple of things. So the feedback from industry groups to the Canadian government has been, firstly, on the CFR, the clean fuel regulation. And the feedback was pretty simple, keep it and enhance it, make it work a little bit more efficiently and effectively. So that seems to be preserved in the budget that was tabled.

The next most important thing that would help the industry in Canada move forward is ITCs, investment tax credits. So the industry had put forward to say, well, look, as of -- before this budget was tabled, the ITCs had not considered RNG or biogas more generally. And it appears that perhaps they've been listening.

We'll see when the full regulations come out, but there is note in the budget that now renewables derived from biomass that go to heat or electricity, which, of course, RNG goes towards both of those things, would be qualifying for the investment tax credits for building out new projects in Canada. So that's really exciting. We'll see. We'll see how they actually turn that into the official language.

Now the other piece that's also in there is around hydrogen. There's an existing ITC for hydrogen projects in Canada, built out in Canada. And that's now been expanded to include hydrogen, in this case, particularly the green hydrogen generated from methane. So the only way you can get green hydrogen from methane is through biomethane or renewable natural gas.

So again, both of those have to be turned into the regulatory language. We'll see what happens. But by, at least, my read of it over the weekend, it appears that there could be some positive signals going to our industry in Canada coming up.

Well, thanks, Brad, and thank you for watching today's financial report. We look forward to seeing you in the next quarter.