PureCycle Technologies Q2 Earnings Call Highlights

PureCycle Technologies NASDAQ: PCT said its second-quarter operations were affected by a planned turnaround at its Ironton, Ohio facility, but management said the work was completed ahead of schedule and below budget and positioned the company for a second-half commercial ramp.

Chief Executive Officer Dustin Olson said the company completed more than 170 projects during the outage aimed at improving plant reliability, production rates and product quality. Following the restart, Ironton established a new daily throughput record in June and demonstrated production at 12,000 pounds per hour, though Olson clarified during the question-and-answer session that this was a rate the plant had reached during testing rather than its routine daily operating rate.

Operations, compounding and production

Ironton produced about 4.5 million pounds of PureFive recycled polypropylene during the second quarter, compared with roughly 5 million pounds of feedstock processed. Olson said the difference represented co-products that the company has increasingly marketed for other uses. Production was lower than the prior quarter because of the planned outage and equipment testing, he said.

During the turnaround, PureCycle addressed its CP2 system and mechanical equipment that had been major sources of unplanned downtime in the prior year. Olson said inspections of major equipment, including the settler where co-product separates from the product stream, found it to be clean. The company also ran Ironton under process conditions intended to resemble the designs planned for its Thailand and Antwerp facilities, with what Olson described as successful results.

The company has also started operating its on-site compounding asset, which is currently running 24 hours a day, five days per week. PureCycle expects to move the operation to a 24/7 schedule in the fourth quarter. Management said bringing compounding in-house reduces reliance on third parties, supports direct rail-car shipments and allows the company to tailor recycled-content percentages and material properties to customer requirements.

Olson said compounded product volumes can exceed purified resin volumes because compounded products may include additives and virgin polypropylene in addition to PureFive material.

Commercial progress and regulatory catalyst

Revenue totaled approximately $4.5 million in the second quarter, marking the sixth consecutive quarter of revenue growth, according to the company. PureCycle said it added seven customer conversions during the period, including its first building-and-construction application.

Management highlighted commercial developments with Procter & Gamble. Downy detergent caps have entered commercial production, Tide caps are scheduled for retail production in the third quarter, and Vicks ZzzQuil PURE Zzzs child-resistant lids are targeted for the fourth quarter. Olson said Procter & Gamble has an offtake arrangement for up to 15% of Ironton’s capacity.

PureCycle also said Cleveland Kitchen deli containers made with 25% PureFive recycled polypropylene reached store shelves at a major big-box retailer in June. The material was produced through converter partner IPL Schoeller.

New Jersey’s approval of PureFive as recycled content in May was a central focus of the call. The approval is conditional for one year and includes a defined path to permanent status, according to Olson. He said the conditions primarily concern documentation on feedstock, end uses and compliance information.

Management said New Jersey’s food-contact exemption expires in January 2027, while the state’s recycled-content requirements rise to 20% that year. Olson said the approval accelerated qualification activity among quick-service restaurant operators and converters serving the cold-cup market. The company estimated that recycled-content demand from quick-service restaurant applications in New Jersey alone could total about 20 million pounds annually.

PureCycle said it had shipped to all three major converters serving the clear quick-service-restaurant cold-cup market in the third quarter to date, and that programs are underway at two major restaurant chains. Its pipeline included 42 brands, 15 converters, 28 applications and 37 programs that advanced at least one qualification stage from the second quarter through the third quarter to date.

Olson said the company still targets Ironton site-level monthly cash breakeven in the second half of 2026, based on utilization of roughly 40% to 50% and branded sales. He said production would follow commercial demand as customer qualifications advance.

International projects and liquidity

In Thailand, PureCycle said detailed design has been confirmed, key long-lead equipment has been ordered and the project received Board of Investment approval, including FastPass treatment. The company expects to break ground in the second half of 2026 and said the facility is expected to begin operating in 2028. Total investment remains estimated at approximately $250 million.

Chief Financial Officer Donald Carpenter said the company is negotiating binding terms for Thailand project financing and is targeting financial close by year-end. In Belgium, permitting for the Antwerp project remains on schedule, according to management.

For the second quarter, PureCycle reported an operating loss of $41.3 million, compared with an operating loss of $45.6 million a year earlier. Net loss was $142.2 million, compared with $144.2 million in the prior-year period. Adjusted EBITDA was negative $31.7 million, versus negative $27.8 million a year earlier.

Carpenter said the adjusted EBITDA comparison reflected $7.8 million in lower non-cash add-backs, including equity-based compensation and prior-year equipment write-downs. He also said production rose approximately 32% year over year despite the longer planned outage, while core monthly operating spending declined about 8%.

• Core operations and corporate cash spending averaged $8.3 million per month during the quarter.
• Material purchases, including feedstock, virgin polypropylene and additives, averaged about $2.1 million per month.
• Total liquidity at quarter-end was $236.9 million, including $165.2 million in cash and cash equivalents.
• Full-year project spending is now expected to be $45 million to $50 million, up from a prior forecast of $39 million to $45 million.

In June, PureCycle completed concurrent offerings of 4.75% convertible senior notes due 2032 and common stock that generated $432 million in net proceeds after underwriting and offering costs. The company used part of the proceeds to repurchase $216 million principal amount of its 7.25% convertible notes, moving the put date on most of its convertible debt from 2027 to 2030 and reducing ongoing interest costs, Carpenter said.

About PureCycle Technologies (NASDAQ:PCT)

PureCycle Technologies, Inc operates as a recycling technology company focused on restoring waste polypropylene to a “virgin-like” state through a proprietary purification process licensed from Procter & Gamble. The company develops, owns and operates recycling facilities that convert used polypropylene feedstock—such as packaging and industrial plastics—into ultra‐pure recycled resin. This resin, known as Qualified Recycled Polymer (QRP), is designed to meet stringent quality specifications for applications in packaging, consumer goods and industrial products.

Headquartered in Orlando, Florida, PureCycle was established with technology development efforts dating back to licensing agreements in the mid-2010s and later spun off as a publicly traded entity in 2021.

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