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 email address at ir@greenlanerenewables.com. 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 CAD 19 million in cash on hand after averaging just over CAD 16 million at quarter-end over the past three 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 that contract values are an 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 CAD 11.6 million from CAD 10.5 million in Q3 last year. We generated CAD 0.5 million of adjusted EBITDA and CAD 0.1 million of net income and comprehensive income. This marks a significant turnaround from last year's net loss and comprehensive loss of CAD 2 million and adjusted EBITDA loss of CAD 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 CAD 33.5 million, up sharply from CAD 14.3 million a year ago. Sequentially, it grew by 27% from Q2 and 58% from Q1 of this year. Our CAD 19.3 million in cash increased from CAD 16.2 million on December 31, 2024, of which CAD 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 Renewables 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 apprised 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. 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 a CAD 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. We've already said we've been focusing on the profitable areas of our business, having financial discipline. That is a main contributing factor. 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. How should investors think about its success or any purchase order reactions from customers?
Yeah, let me take that one. 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. That's really what this new technology associated with our new Cascade LF product line is around. 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 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?
Yeah, so if you think about the sources of RNG, the feedstock sources in particular, landfill gas in the Americas, it represents about 70% of RNG is derived from landfill gas. Europe's a bit of a different case. Europe is more mainly dominated with anaerobic digestion. That means our core focus area is the Americas. We launched the market 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, 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.
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 recently tabled their budget for a vote in the House of Commons. Have you seen anything in that budget that might benefit Greenlane?
Yeah, there's a couple of things. 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. 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. The industry had put forward to say, look, as of before this budget was tabled, the ITCs had not considered RNG or biogas more generally. 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. That's really exciting. We'll see how they actually turn that into the official language. 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. The only way you can get green hydrogen from methane is through biomethane or renewable natural gas. 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.
Thanks, Brad, and thank you for watching today's financial report. We look forward to seeing you the next quarter.