Origin Materials, Inc. Q4 FY2024 earnings call

• John Bissell highlighted that Origin stood up its first caps manufacturing line, with commercial production starting in February 2025, and three new Catformer lines nearing completion, expecting eight lines by the end of 2025. Demand for caps is strong, with multiple customers signing MOUs. - Matt Plavan discussed cap margins in the mid-double digits, financing strategy using debt to fund capital equipment and working capital, revenue timing with meaningful revenue generation expected in Q4 2024 and a strong 2025 revenue exit run rate, and 2026 revenue guidance of $110 million to $140 million, with updated EBITDA positive timing to end of 2026 from prior first half of 2026 guidance.

The key segment is the cap manufacturing business. Origin stood up its first caps manufacturing line, Catformer line one, which began commercial production in February 2025 and is shipping product to customers for qualification. In 2024, annual revenue was $31.3 million, with fourth-quarter revenue at $9.2 million. The cap business is expected to have mid-double-digit gross margins, with average capital cost per line in the mid-single-digit millions and payback period for the average line (including extrusion) less than eighteen months.

• 2024 revenue of $31.3 million was within the guidance range of $25 million to $35 million. - 2026 revenue guidance is $110 million to $140 million. - EBITDA positive run rate is now expected to be achieved by the end of 2026, revised from prior first half of 2026 guidance.

• Delay in line one due to customer feedback requiring the addition of knurling features. - Uncertainty in forecasting EBITDA positive timing due to high variability in the qualification process for customers and market dynamics affecting deployment of lines.

Q: Frank Mitsch asked about the qualification process timeline and the MOU with a $100 million plus customer, and the delay in its initiation.

A: John Bissell responded that the start date of the MOU was pushed due to the slower ramp of line one, but it's still a two-year term extending into 2027. Matt Plavan clarified the MOU is an initial two-year term with the relationship expected to persist.

Q: Salvatore Tiano asked about issues with line one and the delay in EBITDA breakeven timing.

A: John Bissell explained line one had a delay due to customer feedback requiring the addition of knurling features, and there's high uncertainty in forecasting EBITDA positive timing far out, leading to the revised end of 2026 guidance.

Q: Ryan Smith addressed Ask Origin questions including market conditions, sales pipeline, customer prioritization, tinting/embossing and recycling, manufacturing bottlenecks, financing, and future excitement.

A: John Bissell and Matt Plavan responded to each, covering topics like customer interest phases, customer prioritization factors, tinting/embossing not impacting recycling, manufacturing bottlenecks related to capital deployment, financing via debt and existing capital, and future excitement around strong demand, capacity build, and upcoming customer name announcements.