Zefiro Methane Corp. (Cboe Canada: ZEFI) reported first quarter fiscal 2027 financial results for the period ended September 30, 2026, posting revenue of $12.1 million — a sequential increase of 30.7% from the fourth quarter of fiscal 2026. The environmental services company also returned adjusted EBITDA to positive territory at $0.1 million, a $0.7 million sequential improvement. Investors may be watching whether momentum from the Viking Well Service fleet integration and a growing government backlog can sustain margin expansion through the remainder of fiscal 2027.

Key Points

  • Zefiro Methane Corp. (Cboe Canada: ZEFI; OTCQB: ZEFIF; FSE: Y6B)
  • Q1 fiscal 2027 revenue reached $12.1 million, up 30.7% sequentially, with adjusted EBITDA turning positive at $0.1 million
  • Government well plugging backlog grew to approximately $40 million extending through June 2026; a separate $11.5 million state-funded contract was awarded with work through June 2029; a C$5.0 million private placement closed in October 2026
  • Investors may monitor rig utilisation rates and gross margin progression as the Viking fleet scales further

Viking Fleet Integration Lifts Sequential Revenue at Zefiro Methane

The primary driver of Zefiro's sequential revenue growth was the ramp-up of equipment acquired from Viking Well Service, which contributed approximately $1.5 million of revenue in August and September 2026 alone. The Viking fleet also enabled the company to expand operations into Indiana and Michigan for the first time, the release states. Gross profit rose 43.1% sequentially to $2.5 million, with gross margin improving to 20.4% from 18.6% in the prior quarter, as revenue growth outpaced the increase in direct operating costs tied to the larger fleet and field workforce.

Net Loss Narrows Sequentially Despite Higher Operating Costs

Zefiro recorded a net loss of $2.4 million, or $(0.02) per basic and diluted share, for Q1 fiscal 2027, compared with a net loss of $2.8 million in the fourth quarter of fiscal 2026 and net income of $0.6 million in the same year-ago quarter. Operating expenses totalled $4.2 million in the quarter, up from $2.8 million a year earlier. Approximately $0.9 million of that increase reflected non-cash items, including share-based compensation of $0.8 million and amortisation of $1.1 million tied to recent equipment additions including the Viking fleet.

$40 Million Government Backlog and New Contract Award Provide Revenue Visibility

Zefiro disclosed that its government well plugging backlog grew to approximately $40 million, with projects extending through June 2029. The company was also awarded an $11.5 million state-funded well plugging contract during the quarter. Seven new Master Service Agreements with corporate clients — made possible by the Viking acquisition — were also referenced in the release. Additionally, Zefiro completed a non-brokered private placement in October 2026 for gross proceeds of approximately C$5.0 million, which the company described as adding working capital as it scales operations.

Carbon Credit Protocol Development Continues Alongside Core Well Services Growth

The release states that Zefiro supported development of Isometric's new Orphaned Well Plugging Protocol, which, once finalised, is expected to allow the company to resume originating carbon credits from orphaned well plugging. Year-over-year revenue was essentially flat at $12.1 million, though the prior-year period included $0.3 million in carbon credit sales not present in the current quarter. Excluding that figure, the company reported a 2.8% year-over-year revenue increase, led by a 6.2% rise in service rig revenue to $7.8 million.