PureCycle Technologies, Inc. Q1 FY2026 earnings call

• Business momentum entering 2026 is strong, revenues above budget, branded customer conversions accelerating.
• Ironton produced 8.4 million pounds of Pure 5 in Q1, up 12% from Q4, processed ~10 million pounds of feedstock input. Turnaround completed ahead of schedule and below budget, over 170 projects executed targeting capacity, reliability, and quality.
• On-site compounding reached mechanical completion in April, currently commissioning. Third-party compounding volumes ramped to ~1.7 million pounds in Q1 with month-over-month growth.
• Macro environment is tailwind: disruption to global petrochemical supply chains improved co-product pricing, reinforced domestic stable supply source, created urgency for domestic compliant alternative. Virgin polypropylene prices rose, HDPE prices doubled, improving co-product pricing dynamics.
• Regulatory momentum builds: California SB 54 regulations finalized, New Jersey stepping up minimum recycled content rates, food contact container exemption in New Jersey to end in 2027.
• Q1 branded sales $4.1 million, fifth consecutive quarter of sequential growth. Converted eight new customers across multiple product categories. Progress with Procter & Gamble, achieved final approval for commercialization of two applications, in process of qualifying three additional applications. Achieved highest purity grade through Cospitox testing. Recent announcement with Plastic Ingenuity, coffee lids commercial with multiple customers. Completed first international sale in Q1.
• Global growth projects: Ironton turnaround completed ahead of schedule and below budget. Thailand facility on track for mechanical completion by end of 2027, operational commissioning in Q1 2028, production in Q2-Q4 2028, construction to break ground in second half of 2026, total investment ~$250 million. Belgian facility on track, permits expected near year-end 2026, construction in Q1 2027, mechanical completion by end of 2028, total investment ~$350 million, awarded 40 million Euro grant from European Innovation Fund. Gen 2 initial design estimates validate economics, working on advanced design work.

Ironton produced 8.4 million pounds of Pure 5 in Q1, up 12% from Q4, processed ~10 million pounds of feedstock input. On-site compounding reached mechanical completion in April and is being commissioned. Third-party compounding volumes ramped to ~1.7 million pounds in Q1 with significant month-over-month growth. Q1 branded sales booked $4.1 million, fifth consecutive quarter of sequential growth ahead of internal expectations, with branded mix increasing meaningfully. Branded pricing is robust and above internal targets. Ironton turnaround completed ahead of schedule and below budget, tracking 15% below budget.

• Branded applications with 40 to 50 million pounds of annual demand ramp starting to ramp in Q2 and Q3, another 20 to 25 million pounds of application capacity starting to ramp in Q3 and Q4.
• Not giving specific revenue guidance currently, but internal plan for 2026 is achievable and feels good for second half of the year.

Q: Andres Shepherd from Cantor Fitzgerald asked about the conversional funnel over next 3-6 months, Thailand financing process, and New Jersey update.

A: Dustin Olson and Donald Carpenter answered, talking about film, thermoform cups, impact grades, Thailand financing progress, and New Jersey discussions going well.

Q: Hassan Ahmed from Alembic Global Advisors asked about macro volatility impact, Arrington turnaround scope and future production.

A: Dustin Olson answered, discussing macro volatility effects on coproducts, polypropylene, and Asia relationships, and Arrington turnaround details and future production expectations.

Q: Eric Stein from Craig Halem Capital Group asked about other states with regulatory catalysts and most meaningful applications near term.

A: Dustin Olson answered, mentioning other states like Washington, Oregon, Massachusetts, Colorado, New York, and ranking injection molded applications, coffee lids and cold cups, film, impact grade as most meaningful near term.

Q: James Shroom from TD Colwyn asked about ramp timeline and what makes product better with Procter & Gamble, and pushback from customers.

A: Dustin Olson answered, talking about ramp timeline being dependent on customer desire, product improvement with Procter & Gamble in supply chain, inventory, lab testing, etc., and customers' process taking time for qualification.

Q: Jeffrey Campbell from Seaport Research Partners asked about EU recycling regulations and revenue guidance raise.

A: Dustin Olson answered, discussing EU recycling regulations momentum and no specific revenue guidance given currently but internal plan is achievable.