Greenlane Renewables: Pioneering the RNG Revolution with Recurring Revenue and Diversified Expertise

The renewable natural gas (RNG) sector is undergoing a seismic shift, driven by global decarbonization mandates, corporate net-zero commitments, and the urgent need to repurpose organic waste streams. At the forefront of this transition is Greenlane Renewables, a company that has redefined its business model to capitalize on the growing demand for RNG. With $1.3 million in new service agreements secured in 2025, Greenlane is not just adapting to market trends—it is shaping them. For investors seeking exposure to the energy transition, the company's strategic pivot to recurring revenue and diversified feedstock expertise positions it as a high-conviction long-term play.

The Power of Recurring Revenue: A Stable Foundation for Growth

Greenlane's recent $1.3 million in service agreements—spanning five RNG project sites—underscores a critical shift in its business model. These contracts, which include both recurring and new customers, are structured around tiered service packages (Bronze, Silver, Gold) tailored to minimize downtime, optimize RNG output, and extend system lifespans. The agreements reflect a deliberate move away from one-time equipment sales toward long-term partnerships, a strategy that generates predictable cash flows and enhances gross margins.

In Q2 2025, Greenlane reported a 49% gross margin before amortization and $3.4 million in Adjusted EBITDA, a 40% year-over-year improvement. This financial discipline is bolstered by a $16.6 million cash reserve and no debt, creating a robust foundation for scaling operations. The recurring revenue model not only insulates the company from market volatility but also aligns its incentives with those of its clients, fostering loyalty in a sector where operational reliability is paramount.

Diversified Feedstock Expertise: A Competitive Edge

Greenlane's ability to operate across a broad spectrum of feedstock sources—from dairy manure and food waste to municipal wastewater sludge—sets it apart in the RNG industry. This diversification mitigates supply chain risks and allows the company to tap into multiple high-growth sectors. For instance, its work with municipal wastewater treatment plants aligns with global efforts to decarbonize water infrastructure, while dairy manure projects support agricultural sustainability.

The company's technical versatility is further evidenced by its compatibility with diverse biogas upgrading technologies, including waterwash, pressure swing adsorption, and membrane separation. This adaptability ensures Greenlane can service a wide array of RNG facilities, from small-scale agricultural operations to large industrial complexes. As the RNG market expands—projected to reach $26.57 billion by 2032—Greenlane's feedstock agnosticism will be a key driver of scalability.

Strategic Expansion and Market Positioning

Greenlane's 2025 strategic initiatives are anchored in three pillars: financial discipline, customer success, and scalable growth. The company has extended its standby letter of credit facility to 2026 and is expanding its presence in North and South America, where RNG demand is surging due to supportive policies like the U.S. Renewable Natural Gas Incentive Act of 2023.

The recent agreements with a major international energy company—across multiple RNG facilities—highlight the growing trust in Greenlane's technology and service model. CEO Brad Douville emphasized that recurring business from such a client is a “strong vote of confidence,” underscoring the company's role as a trusted partner in the RNG value chain.

Investment Thesis: A Long-Term Play in a High-Growth Sector

For investors, Greenlane's strategic expansion in RNG services offers a compelling case. The company's recurring revenue model, diversified feedstock expertise, and strong financials create a resilient business capable of outperforming in a decarbonizing energy landscape. Key metrics to monitor include:
- Gross margin expansion: As service contracts scale, Greenlane's 49% margin in Q2 2025 suggests room for further improvement.
- Customer retention rates: The mix of recurring and new customers indicates strong client satisfaction.
- Geographic diversification: Expansion into South America and emerging RNG markets could unlock new revenue streams.

Greenlane's stock, currently trading at a valuation that reflects its growth potential, is poised to benefit from the sector's tailwinds. With a healthy cash position, no debt, and a clear path to profitability, the company is well-positioned to capitalize on the $26.57 billion RNG market by 2032.

Conclusion: A High-Conviction Bet on the Energy Transition

Greenlane Renewables is not merely a participant in the RNG revolution—it is a catalyst. By leveraging recurring service contracts, technical versatility, and a diversified feedstock strategy, the company is building a moat around its market position. For investors seeking exposure to the renewable gas transition, Greenlane represents a rare combination of strategic foresight, operational excellence, and financial prudence. As the world pivots toward cleaner energy, Greenlane's role in turning waste into value will only grow in significance.