Loop Industries Q3 Earnings Call Highlights

Key Points

• India facility on track: Loop's Infinite Loop India plant is "on budget and on schedule" for completion by end-2027 and is anchored by a multi-year, take-or-pay supply agreement with Nike, with management targeting roughly five to six customers to fill capacity.
• Financing progress but limited liquidity: Debt syndication is progressing with term sheets from multilateral development banks, sovereign wealth funds and commercial banks—Loop said the India project debt package is about $130 million (≈70% of project financing) with Loop equity of roughly $28 million—while corporate liquidity was $7.7 million and cash operating expenses fell this quarter.
• Europe strategy and modular build: Site selection for a licensed 70,000-ton European plant is nearing completion (lead German site), and a modular construction approach—adapting India designs—could reduce capital costs by roughly 50%, with engineering and milestone payments expected to provide near-term revenue.

Loop Industries NASDAQ: LOOP detailed progress on its India and Europe growth plans during its third quarter fiscal 2026 corporate update call, highlighting project development milestones, a new multi-year supply agreement with Nike, and continued efforts to arrange project financing.

India facility: moving toward construction, anchored by Nike offtake

Founder and CEO Daniel Solomita said the company’s Infinite Loop India manufacturing facility is “on budget and on schedule” as it moves toward the construction phase. He noted the plant is scheduled to complete construction at the end of 2027, positioning the project to align with evolving European recycled-content regulations that begin in 2026 and are expected to be enforced in 2028.

During the quarter, Loop executed a supply contract with Nike to serve as an anchor customer for the India facility. Solomita described the agreement as providing a fixed annual volume of “Twist,” Loop’s textile-to-textile polyester resin, at a fixed price for multiple years. He added that the contract includes a “take-or-pay” element, meaning Nike would still pay a percentage of the sales price if it does not take delivery of the material.

On the call, management said it expects the India plant to have roughly five to six customers in total. Solomita said Loop currently has Tyrell Plus and Nike under contract and is in discussions with additional consumer packaged goods (CPG) and apparel companies to secure offtake commitments to fully contract the facility’s capacity.

Textile-to-textile demand cited as a key growth driver

Solomita emphasized growing demand for textile-to-textile recycling, pointing to regulatory changes in Europe that are intended to increase recycled content in clothing and push brands to address end-of-life textile waste. He said Loop’s technology is well suited for post-consumer textile waste because garments often combine materials (such as polyester with cotton or nylon) and include other components like buttons and zippers.

According to Solomita, Loop’s approach relies on low-temperature depolymerization to break polyester down into DMT and MEG while leaving other materials intact so they can be filtered out afterward. He contrasted this with conventional recycling methods that rely on high pressure, high temperature processes or melting, which he said do not work well for mixed textile waste streams.

He also highlighted the India project’s location near a free trade zone, which he said could enable importing waste clothing from Europe or other regions for processing. Solomita added that global polyester textiles represent a significant portion of PET and polyester production, which he said totals about 85 million tons per year, and framed the size of that market as a major opportunity for Loop.

Engineering progress: Toyo engaged; modular approach discussed for Europe

Loop said it hired Toyo, a Japanese engineering and construction company, to complete detailed engineering for the India facility. Solomita said detailed engineering began on November 1 and will run through the construction phase, adding that Toyo has a large presence in India and that Loop’s engineering team is “fully deployed” on the project.

For Europe, Solomita discussed a modular build approach aimed at lowering capital costs. He said Loop’s design work in India is being adapted so modules can be built in a lower-cost country, shipped to Europe, and assembled on site. During the Q&A, he said the company has seen capital expenditure reductions “probably close to 50%” from modular construction compared with stick-built approaches.

When asked whether capital costs in Europe would match India, Solomita said the European plant would likely be somewhat more expensive due to transportation and reassembly costs, but he said those costs could be offset if the selected site already has significant utilities in place. He described utilities as a major cost driver in chemical plants and said the lead German site under negotiation is a large chemical plant location with existing utility infrastructure.

Europe licensing project: site selection nearing completion

Loop also provided an update on its partnership with Reed Management and Société Générale Group, which holds a license to build one Loop plant in Europe. Solomita said the partner had evaluated roughly 20 sites and narrowed the list to three, with one lead site in Germany currently under negotiation. He said Loop expects the site decision to be finalized “very shortly,” likely by the end of January or early February.

Once site selection is finalized, Solomita said Loop anticipates generating “meaningful revenue and profits” from providing engineering services for the project. He described engineering and milestone payments as occurring over the next three years and said the company believes those payments could cover Loop’s back-office expenses for several years.

In response to a question, Solomita said the European plant is planned at the same scale as the India facility, with 70,000 tons of capacity. He said the European project is expected to be primarily packaging-focused, given textile supply chains are concentrated in Asia, though he noted that textiles could also be processed in Europe depending on customer needs.

Financing and liquidity: debt syndication progressing; corporate expenses reduced

Management said project financing efforts are continuing. Solomita stated that debt syndication for the India project is “moving well,” with several term sheets received from multilateral development banks, sovereign wealth funds, and commercial banks. He said terms were in line with expectations and that the company anticipates closing debt financing “in the coming months” in line with the project schedule.

During the Q&A, Solomita said the India project’s debt package is $130 million, representing 70% of the project financing structure, and that Loop’s equity contribution is expected to be approximately $28 million.

On the financial side, Solomita reported cash operating expenses of $2.2 million for the quarter, down $1.1 million year over year. Loop ended the quarter with total liquidity available of $7.7 million, and management said that figure is expected to decline in coming quarters.

Solomita said Loop’s focus is raising the remaining financing needed for its equity contribution and operating expenses until the India facility starts up. He added that Loop is engaged with multiple parties regarding financing and expects anticipated engineering revenues from India and Europe to help fund ongoing operations until the first facility becomes operational.

Loop also introduced Spencer Hart as its new chief financial officer. Hart said he brings more than 30 years of investment banking experience and intends to focus on supporting capital raising efforts. He also echoed management’s commentary on expense reductions, saying the company had managed expenses well in the quarter and identified opportunities to reduce spending further.

About Loop Industries NASDAQ: LOOP

Loop Industries NASDAQ: LOOP is a technology innovator in the sustainable plastics sector. The company has developed a proprietary depolymerization process that breaks down end-of-life polyethylene terephthalate (PET) plastic and polyester fiber into their base molecules. These purified monomers are then repolymerized into virgin-quality PET resin suitable for new packaging applications, creating a closed-loop recycling solution that addresses global plastic waste challenges.

With its headquarters in Terrebonne, Quebec, Loop Industries operates pilot and demonstration facilities to validate and refine its technology.

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