PureCycle Technologies, Inc. (NASDAQ:PCT) Q3 2025 Earnings Call Transcript

PureCycle Technologies, Inc. (NASDAQ:PCT) Q3 2025 Earnings Call Transcript November 7, 2025

Operator: Good day, and thank you for standing by. Welcome to the PureCycle Technologies Third Quarter 2025 Corporate Update Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Eric DeNatale, Director of Investor Relations. Please go ahead, sir.

Eric DeNatale: Thank you, Kyle. Welcome to PureCycle Technologies Third Quarter 2025 Corporate Update Conference Call. I am Eric DeNatale, Director of Investor Relations for PureCycle. And joining me on the call today are Dustin Olson, our Chief Executive Officer; and Jaime Vasquez, our Chief Financial Officer. This evening, we will be highlighting our corporate developments for the third quarter of 2025. The presentation we’ll be going through on this call can also be found on the Investor tab at our website at purecycle.com. Many of the statements made today will be forward-looking and are based on management’s beliefs and assumptions and information currently available to management at this time. The statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control, including those set forth in our safe harbor provisions and forward-looking statements that can be found at the end of our third quarter 2025 corporate update press release filed this afternoon as well as in other reports on file with the SEC that provides further details about the risks related to our business.

Additionally, please note that the company’s actual results may differ materially from those anticipated, and except as required by law, we undertake no obligation to update any forward-looking statements. Our remarks today may also include preliminary non-GAAP estimates that are subject to risks and uncertainties, including, among other things, changes in connection with quarter end and year-end adjustments. Any variation between PureCycle’s actual results and the preliminary financial data set forth herein may be material. You’re welcome to follow along with our slide deck or if joining us by phone, you can access at any time at.purecycle.com. We are excited to share updates from the previous quarter with you. With that, I will now turn it over to Dustin Olson, PureCycle’s Chief Executive Officer.

Dustin Olson: Yes. Thanks, Eric. Thank you all for joining today’s call. It’s been another quarter of meaningful progress for PureCycle across all parts of the business. We’re ramping operations, we’re starting to ship to key customers in Q4, and we’re excited about the growth ahead. I’d like to begin with the recent board changes that we announced. I’m very pleased to welcome our newest Board member, Dr. Siri Jirapongphan. Dr. Siri has an impressive resume and I believe he is going to be instrumental in PureCycle’s future success. He’s the former Chairman of the Board for IRPC, this is our partner in Thailand and is currently serving as an independent director of Bangkok Bank, the largest bank in Thailand by assets. Dr. Siri is an incredibly bright individual.

He’s got degrees from both Caltech and MIT and chemical engineering, and he has already made an impact when interacting with the Board and the PureCycle team over the last few weeks. His polymer expertise has deep network in Southeast Asia and passion for PureCycle is bringing good energy and perspective to our decision-making process. He will serve a key role in our debt financing activities as well as support our technical and project teams. I’m excited to have him join the team. I’d also like to personally thank Jeff Feeler for his service on the Board over the last 4 years. He has been an instrumental part of getting PureCycle to where we are today. And from a personal perspective, he has taught me so much about how to think about our business, our activities and how to lead this organization effectively.

His departure coincides with Dan Gibson of Sylebra Capital joining the Board 3 months ago. Operational performance has shown steady improvement. Ramp-up activities underway at both Denver and Ironton further reinforcing our confidence in the business trajectory. Q3 was one of the highest quarter of production in the company’s history. September was the highest month at 3.3 million pounds and was limited by fee. At the end of Q3, we successfully added a second shift in Denver during the quarter and plan to add a third in Q4. This will bring Denver’s capacity to approximately 100 million pounds annually. The compounding expansion at Ironton continues to be on track, and we expect this to significantly reduce complexity of supply chain, improve our product offering, lower our cost and meaningfully widen the market for available sales.

On the commercial front, we continue to make a lot of progress. We scheduled to ship material in Q4 to P&G’s converter for application production that are scheduled to the shelves in early ’26. Additionally, we are working to finalize and ship for other P&G applications in Q1. We continue to add to the P&G funnel. We have made major strides on the operational front, and we believe we have alignment to meaningfully grow their volume in 2026. We have also made standout technical progress on numerous applications and are beginning to narrow the focus to high-value applications. One of the biggest successes have been with white thermoform coffee lids, this led to progress with 3 of the top 5 quick service restaurant companies or QSRs and we expect to be shipping into stores for a top 5 QSR group in the fourth quarter and ramping in 2026.

We’ve made tremendous strides in the commercial and general trajectory is very positive. We’ve also made — we also have a much better sense of what our customer volume expectations and needs are for the next year. While the timing of any ramp is always hard to pinpoint with certainty, we do see initial volume indications between Emerald, Procter & Gamble, QSR coffee lids and other converters in the range of about 40 million to 50 million pounds annually. To put a blunt point on it, we see significant volume converting from just 4 to 5 projects, and we have another 75 to 100 projects churning through the hopper. Given our technical successes and the product line that we’ve developed, we feel confident about the long-term demand for Ironton.

The sales funnel continues to be very strong and successful conversion of only some of these would be large enough to sell out Ironton many times over. The focus has shifted more towards converting these large applications into sales and less towards growing the funnel. Even in a challenging consumer spending and petrochemical environment, we continue to see robust demand and pricing in line with the unit economics we have previously laid out. Our growth plan continued to progress during the third quarter. The personnel in Thailand continues to grow, and I’m excited about the team that is being put in place. The Antwerp permitting process continues on schedule, and it is extremely good news that our proposal to the EU Innovation Fund or EIF, was accepted.

We expect to receive final grant approval of up to EUR 40 million by the end of Q1. We continue to progress our Gen 2 purification design work through Augusta and beyond and expect this to be completed in the first half of 2026. Overall, this has been another quarter of extreme progress. Branded shipments are moving. We’re in the final stage of commercial negotiation with a number of very large potential applications, and we are accelerating. We are doing something that has never been done before. The operation Ironton and Denver continued to show progress during the quarter. Ironton produce 7.2 million pounds in this quarter and 3.3 million pounds in September, both new records. Denver continues to ramp as well, processing 9.4 million pounds of feedstock in Q3 and 4.4 million pounds in October.

This was possible due to strong reliability performance and successfully adding a second shift in Denver. We have plans to add a third shift in the near future, and this will allow Ironton to continue to ramp to higher rates of production in coming quarters. We have developed a really strong relationship with our feedstock providers and are taking product from numerous locations, some of which are among the largest waste companies in the country. These companies value steady and ratable offtakes and thus, it makes sense to deliberately and systemically ramp Denver volumes in conjunction with Ironton production and sales, and speaks to our confidence in the commercial ramp in front of us. The amount of feed coming out of Denver was a constrained Ironton production in the quarter and with the additional shifts this should be relieved going forward.

The 100 million pound compounding expansion at Ironton that we announced last quarter is on track for mechanical completion in December. And in addition to that, we’ve already installed the Co-Product 2 extruder on-site and started the operational commissioning. This compounding capacity that we’re installing will allow for reduced complexity of supply chain, improved product offering, lowers our costs and should widen the market for available sales. The Co-Product 2 compounding expansion is already showing positive results. As you can see in the pictures on Slide 4, we can now take raw Co-Product 2 coming out of Ironton and compounded into a sellable pellet that we have already sold into the market for $0.20 to $0.30 per pound. As we have ramped Denver, we have developed market outlets to sell the non polypropylene co-products.

As we have found markets for approximately 20% to 30% of the bale, that is non-PP, which results in approximately a net 20% reduction in feedstock costs. This is inclusive of the waste disposal costs for 18% of the bale that we are currently not selling. This is a really big deal. And I believe it’s only the early innings of this co-product optimization and that it will be a big driver in our long-term low-cost story. Operations continues to make progress, and I feel increasingly confident about our ability to ramp production in coming quarters. To pace the commercial ramps, we expect to run the facility at 60% to 70% rates for the next 3 to 6 months and then ramp to near nameplate in the second half of the year. Now turning to the commercial update.

Some of the largest brands and companies in the world are becoming interested in our products. This is a tremendous endorsement for the quality of our product and the future of our company. It’s important for our teams to stay focused on developing these high-quality demand applications like this. While there have been some delays with respect to the overall rollout, it’s important to note that none of that was driven by technical capabilities of our product or the market’s underlying demand for it. The delays relate to developing regulatory dynamics in states, which are largely behind us as well as the natural delays that came from 2 mergers among the 4 largest global converters. Both mergers impacted the timing for a few contracts that we had initially expected to close, start moving in Q3.

None of this has impacted the long-term progress or where things are going. Frankly, confidence in the end state of where Ironton is headed has only improved. I continue to see potential demand in the funnel, well exceeding our ability to supply it by multiple times over and a growing list of qualified products to take us there. If you combine the customers that we’re beginning to ship to, with the ones we already have high visibility to ship to in the near term, this represents approximately 40 million to 50 million pounds annually at full ramp. I’ve spoken a lot over the past few quarters about how our resin continues to get qualified in numerous applications, especially those like film and fiber that traditional mechanical recyclers cannot serve.

I’ve also talked about the value of compounding business and how it is a core component of how we can take our purified product and transform it into exactly what the customers require. So with that in mind, I think it’s valuable to present to the market our current product portfolio with which we’re going to market. There’s a lot of technical data in there, but I think it’s important to note a few things. First, all of our products serving food-grade end markets have FDA LNOs. Second, all of the material that we process has both Green Circle and APR certifications for post-consumer recycled content. Third, our general purpose material does not require compounding. However, we use compounding to augment the mechanical properties and to deliver a single pellet solution to customers.

This product portfolio is a function of a lot of incredible work by our technical and R&D teams as well as demand and pricing discovery by our sales team over the last year and is a big part of why I’m so excited about the future of PureCycle. No other recycled PP producer can offer to the market what we can. Last quarter, we told the market that we had 17 applications that had successfully passed industrial trials and that we’re in later stages before commercialization. I want to give as — I want to give a detailed and update as possible on these. The key takeaways here is that we are progressing and converting the funnel. We completed negotiations with an unnamed consumer goods company during the quarter and expect to ship product for a thermoform application in Q4.

2 large applications for yogurt cups had to undergo lengthy odor and taste tests, but that’s now complete. We successfully made industrial adhesive tape for a top 5 manufacturer during the quarter. This is very similar packaging tape consumers use every day when preparing for a remove or when shifting a gift to the postal service during the holiday time. They informed us that they do not — that they do not — that they — sorry, they informed us that they want to do additional testing on a Brückner machine, which was planned for November. This will be our first commercialization of BOPP and believe this can be a double-digit annual volume opportunity for PureCycle. The only real disappointment in the funnel was the long brand adoption cycle we’re seeing with fiber.

We’re fully technically qualified with numerous fiber app — fiber producers, but this is a very fragmented market with literally thousands of small textile producers making decisions for apparel. It is taking longer to build out the new projects with end customers during the challenged market conditions. The only application of the 17 that PCT dropped out of the funnel with small consumer goods application. This is one of the smallest applications in our pipeline and PCT chose not to pursue due to the required internal resources to develop the project. What’s really exciting to me is the number of new opportunities that have entered the later stages of the funnel. Many of them are with Fortune 100 brand owners, specifically across thermoform and BOPP.

As I’ve mentioned, these last few quarters, part of the reason that we have qualified so many applications is to prove out the market depth across different segments and end markets. Not surprisingly, FDA flexible film or BOPP is toward the top of the list. Thermoforming for QSRs, namely for coffee lids and cups as well as for other food container opportunities are also emerging as one of the best places for us to focus. The demand from just 3 of these large QSRs for coffee lids alone could be enough to sell out Ironton. We have had a PO in hand — we have a PO in hand to begin shipping for the first of these top 5 global QSRs in the fourth quarter and are closely working with the top — with 2 top QSRs who have both told us that they want to move forward but are waiting for a couple of internal approvals before doing so.

BOPP film continues to progress on schedule and trialing success with Brückner has unlocked with — has now unlocked trials with brand owners of multiple top 5 snack brands. These are huge volume opportunities and currently cannot be served by mechanically recycled product due to the technical challenges of producing BOPP. We’ve also had virgin resin producers reach out to us for BOPP supply. The success we’ve seen with the first adhesive tape trial has led to interest and scheduled trials for other brands. To be clear, both white thermoform and BOPP film technical developments are very complex, and this is a very undersupplied market. We’ve proven that we can make them grades, we’ve tested it and it’s working. And while they took additional time to complete the development of trials, the interest in this segment is strong and moving quickly — moving more quickly than other applications.

We believe that the single-use nature of many of these applications is driving interest and quicker adoption by QSRs and snack brands. Additionally, due to the lack of true recycled demand for these applications, we believe many of these companies are currently using — currently buying ISCC Plus credits for roughly 70% to 80% per pound over virgin to cover their regulatory requirements. We continue to make progress with Procter & Gamble during the quarter. They are one of the most technically demanding companies due to their intense focus on quality and brand image. And I’m very excited that we expect to be shipping product in the fourth quarter with these caps making it to the shelves in early 2026. The relationship with Procter & Gamble is transitioning to an operational relationship.

We meet weekly. We are well aligned and are both excited about this first application and the pipeline that’s following. The partnership with Churchill continues to ramp with incremental end customers, and I’m very excited that we will be producing cups for the release of a very popular upcoming franchise film release. Additionally, there’s a major sporting event taking place in the United States in 2026, and they have confirmed that they will be using our run-at-back cups during the entirety of that event. These are both nice volume additions, but even more importantly, I believe there will be great opportunities to showcase the PureCycle to a broader audience. It’s also worth noting that one of the big 4 sports leagues has invited us to a Private Stadium Operations Conference where we’ll have an opportunity to present our cups to all the franchise procurement teams at the same time.

There’s also a lot of positive news emerging from the regulatory front. 7 states covering about 20% of the U.S. population, have passed extended producer responsibility regulations or EPR for packaging over the past 4 years. On top of that, states like New Jersey have passed and are implementing laws that mandate recycled content. Further builds are also being introduced in numerous states across the political spectrum, including places like Tennessee and North Carolina. These bills were passed for the last 3 to 4 years and are just now being implemented. I believe this will force many large brands who operate an interstate commerce to ship to almost every state to adopt our material, and we expect will only accelerate as more states implement these policies in ’26, ’27 and beyond.

We’re ramping up our efforts to educate the steps on the positive role that the PureCycle can play in compliance to the new rules. Many new independent publications like the PRE White Paper for Dissolution and the NOVA Institutes Definitive Chart for recycled technologies are helping to place the right designations on plastic to plastic solutions at the regulations demand. PureCycle is very well positioned to be the premier solution for many brand applications. The regulation in Europe regarding PPWR as well as mandated recycled content for automotive continue to be planned for implementation towards the end of the decade and our recent successful application for the EIF grants speaks to the momentum PureCycle — through the momentum for PureCycle in Europe.

We will continue to educate all agencies and regulatory bodies on how PureCycle can support the legislative efforts around the globe. The growth plan we outlined to the market last quarter continues to progress. Since announcing the Thailand project earlier this year, key feedstock LOIs have been signed and the amount of material available appears to be more than required to run the facility at full capacity. In Europe, permitting for the Antwerp facility is progressing as planned, with construction expected to commence thereafter. Our proposal to the EU Innovation Fund has been accepted and we anticipate up to a maximum of 40 — maximum grant of EUR 40 million by the end of Q1. Between the capital efficiency of the Thailand project, the EIF grant for Antwerp and the capital already spent on long-lead equipment, the remaining capital requirements are limited relative to the scope of these projects.

We’re in a good position to progress these 2 projects over the next 3 years according to our original plan. Additionally, we’re on schedule to complete the final engineering for our Gen 2 purification line design work in early 2026. While not finalized yet, we still believe the capacity will likely fall between 300 million and 500 million annually. On the financing front, we have initiated debt financing efforts in Thailand in collaboration with local banks are making good progress to secure the financing and believe that we remain on track for financial close in line with prior communications. With that, I’ll turn it over to Jaime for the financial presentation.

Jaime Vasquez: Thank you, Dustin. As shown on Slide 16, we ended the quarter with just over $234 million of unrestricted cash. In addition to the cash on hand, we still hold about $87 million of revenue bonds that we plan to sell in the future to further support our growth initiatives. Also, as we mentioned in our June growth update, we have almost $25 million warrants outstanding that expire in March of 2026, must exercise at a price of $11.50 per warrant prior to that time. In addition to the potential proceeds from the warrants, our team is pursuing other nondilutive financing arrangements including the successful EUR 40 million grant application for our Belgium project that Dustin just mentioned. Our operations and corporate spend was around $37 million, which was slightly lower than the $39 million spent in the previous quarter.

We anticipate that our operational spend will remain at similar levels adjusted for increased spend associated with the ramp-up of commercial sales. Additionally, we expect growth capital spend to increase beginning in early 2026. We are working on detailed project plans and we’ll provide more insight once the spend curves associated with those plans are finalized. I would now like to turn the call back to Kyle, who will open the call for your questions.

Operator: [Operator Instructions] And for your first question, it comes from the line of Andres Sheppard from Cantor Fitzgerald.

Q&A Session

Andres Sheppard-Slinger: Can you hear me okay?

Dustin Olson: Yes, Andres. We hear you loud and clear.

Andres Sheppard-Slinger: Wonderful. Congrats on the quarter and then all the progress. I think there’s a lot to unpack, but I wanted to maybe start with all the progress with these QSRs. I was wondering if you can maybe give us some details as to where is the interest coming from? Any feedback you’ve received. Why have they been so interested as of late?

Dustin Olson: Yes. I mean, thanks for the question, Andres. What I think is really exciting to me is to see the interest coming from these very recognizable brands around the world. These are not only brands people will recognize, but also brands that we can grow with globally. Sustainability is, quite frankly, really important to these companies and the brand value is core to their success. And ultimately, that’s where the true opportunity lies. I think it’s important to take a step back a little bit and helicopter up on recycling. I think when any individual thinks about recycling, they probably naturally go to their bin at home, okay? What are they throw in the bin? And where does it go? And everybody has this idea that they want to see that material go back in the products, but they don’t see the scale of it.

But that’s what’s interesting with PureCycle and quite frankly, our Denver facility. Our Denver facility is processing so many bales at that location. And when you really watch it for a while to stand on the line and watch the material move through, you see what’s coming through. And there’s just a tremendous amount of QSR material on the belts in Denver. And I think that when you see that and you share that with the QSRs, it really resonates with them. So I see these products, these companies, products running through the process in Ironton, and I see it as a real circularity opportunity. Not only can we give them high-quality product to make the product that they need, we can also take it back to Denver and show them that their material is coming back into their products.

So when you see — so when the companies see their product in the bales at Denver, it resonates. When they see it transform back into things like coffee lids, it moves them. And yes, I mean, as far as big companies are concerned, these QSRs are moving faster. And they’re really excited about how we can work together, and these companies need a lot of material. Once we designed the white thermoform and the film brands, and we got them tested and showed that they could work, the excitement really started to grow. Thanks for the question, Andres.

Operator: And for your next question, it comes from the line of Jeffrey Campbell from Seaport Research Partners.

Jeffrey Campbell: Well, first of all, I wanted to congratulate you on strong progress this quarter. I’d like to ask a couple of questions if could. The first one is, I want to make sure I understood what you said earlier. Regarding the Co-Product 2, is the plan to sell what you separate from the feedstock to the market although you utilize any of it in your compounding operations?

Dustin Olson: That’s a very insightful question, Jeff. Thank you for that. The answer is both. While we see opportunities to take the Co-Product 2 that we separate out in our purification facility and compound that into a pellet form, so it’s easier for customers to use. That’s primarily what we’re doing at Ironton right now with our newly installed compounding operations, which were commercialize or operationalizing right now. But you hit on something that’s very interesting, and it speaks to where we’re going to go with co-products. The concept of compounding is really about recipe management, and about taking lots of things and blending them together to make something better. And given the compounding of the capacity that we have with a third party as well as the compounded capacity we’ve installed in Ironton, coupled with the things that we make, both in Ironton and at Denver, it creates a lot of opportunities for us to find synergy.

And so I think that your question is good, and that we will start taking some material from Denver and also bringing it into the Co-Product sales, which and how much that will be proprietary IP for the company to manage the recipe. But I think at the end of the day, it’s going to lead to higher revenue from Co-Product sales and ultimately lower net feedstock costs to Ironton.

Jeffrey Campbell: Right. Yes, that was kind of what I was thinking as well. I also wanted to ask you, you mentioned that some of your potential customers have to buy credits. Could you expand on that a little bit? And just give us a sense of the value of the PCT is going to provide these people. Hopefully by obviating the need for those credits.

Dustin Olson: Yes, that’s a good point. So this is one of the things that I’m not sure how much people are aware of what’s going on out there. But there are ISCC credits being generated by several facilities across the industry, okay? And some of our customers, we believe, will buy those credits as part of the regulatory requirements for their company. Those credits, the best that we understand are valued at $0.75 to $0.80 per pound in the market, and that’s effectively virgin pricing plus $0.75 to $0.80. So that’s a really good proxy for the value proposition that we offer. And we should, at a minimum, be at those kind of levels in the long run. But quite frankly, we believe we should be over that. And here’s why. ISC credits are not a plastic to plastic solution.

It’s effectively a plastic to fuel solution that is mass balance to plastic. And that’s inferior for the brands. The brands really want to be able to — the consumers, customers buying candy bar, snack bags and things like that. They want to know that the material that they threw into their bin has come back to the products that they’re buying and that’s a plastic to plastic solution that we offer. And so we offer our consumers, let’s say, a real plastic to plastic solution, less regulatory risk and less litigation risk. You can see across the regulatory ecosystem that a lot of rules are coming in that limit the use of recycled material. And that limit the use of the ISCC material, and that’s where we can come in and fill the gap. I think it’s also notable that on many of the brands, the marketing for how they use recycled product becomes very complex, either they don’t put the fact that they’re recycling content on their packaging or they put a lot of legalese around it that complicates the overall message.

And quite frankly, that’s why brands like a simple plastic to plastic solution, and I think that’s where we’re going to start filling the gap.

Jeffrey Campbell: Right. And the last question I wanted to ask is, are you — right now, are you actively selling very much PureFive? Or are you building inventory for the compounding that you’re going to be able to do when you get your equipment installed in the next quarter?

Dustin Olson: Yes. I mean it’s a little bit of both. I mean we sold some PureFive. We’ve sold some compounded products, but we’ve also built more inventory that we’ve sold. So I think that we’ve got an opportunity as these trials convert and the funnel starts to pull and the ramp extends, I think we’ll pull that inventory down to show the revenue from that in the future.

Operator: And for your next question, it comes from the line Hassan Ahmed from Alembic Global Advisors.

Hassan Ahmed: So I wanted to focus both of my questions on the growth project side of things, right? So let me throw the first one out. This EIF grant that you guys were awarded. Would love to hear the process around that, what it entails, what this means for your sort of European growth projects?

Dustin Olson: Yes. Look, I mean, this is a little bit third time’s the charm. First of all, I want to compliment the team in Europe. We’ve got an incredible small but mighty team in Europe that has been building toward this project for 3 years. We’ve submitted 2 times in the past, and we’re not selected, but we’ve continued to improve the quality of the project, economics of the project. And now we are — we were awarded the EIF this year, and we’re extremely excited about it. I think what it does — I mean, look, it shows a lot of confidence in our ability to bring the technology to scale. I think it shows a lot of interest in Europe to — it shows a lot of interest in Europe to continue to lean into sustainability. And I think from an economics perspective, the EIF is just a way to further reduce the overall CapEx for the project, which makes the project look more valuable to our shareholders.

We continue to look at the overall CapEx of projects and work them very, very hard. And this will be another feather in the cap for the overall return when we put it to use for the development of the project. Thank you, Hassan.

Hassan Ahmed: Very helpful. And just sticking to the growth side of things. On the Thailand side, it’s — you guys sort of flagged the sort of securing the feedstock letters. I mean, what does that entail? Can you talk a bit about the cost of it, the availability of it, particularly sort of in line with what you guys are thinking in terms of the capacity out there?

Dustin Olson: Well, I think the punch line is it’s just the tip of the iceberg, okay? One of the reasons that we found Thailand, and we leaned into it is that we believe that’s a location for great growth. It’s no surprise to anybody that Asia is an area of a tremendous population, and b, tremendous need for waste management, trash management, recycling. And so there’s a lot of efforts going into, let’s say, small cap projects to improve the handling of waste in Asia. We’re starting to see the fruit of that. But quite frankly, all handlers of waste are looking for partners like PureCycle that can improve the net value of the product at the end. Look, at the end of the day, if we can’t sell to a higher-margin business, then we can provide better economics to feed to continue pulling feed out of different systems.

That will allow us to support the growth of the feed and also allow us to grow our business. So we’re super excited about it. I mean, look, we’ve talked to — we’ve talked to so many different people in Asia around the willingness to partner with us and there’s a strong willingness to partner. But in many cases, they say things like I’m not limited by how much polypropylene I can find. I’m limited with how much polypropylene I can sell to customers like you. And I think that, that speaks really well to the prospects for our Gen 2 design and where we’re going to place it and how we’re going to grow around the world.

Hassan Ahmed: And you’re comfortable with the cost associated with it as well. Is it like the per pound, unit economics of procuring that feed stock?

Dustin Olson: Yes, I think so. I mean you find it a little bit all over the map. It depends on what stage of preparation has been put into the pellet. But yes, I think the economics look pretty good for us there. We’re still in the process of nailing down all of that to firm up the final economics, but they all look very, very, very positive for Thailand.

Operator: And for your next question, it comes from the line of Jeff Grampp from Northland Capital Markets.

Jeffrey Grampp: Was curious, Dustin, and I think you hit on this in your prepared remarks as well as the deck. A couple of applications are awaiting brand approval. It sounded like you guys have kind of jumped through all the hoops and just waiting for a couple of back office signatures effectively. Like what — do you have any sense of what that timing looks like? Like what is the inflection point? Are we just literally just waiting on a couple of signatures and off we go? And what might that ramp look like for some of these where you guys sound like you’re pretty close?

Dustin Olson: I think we feel really good about it. I mean, if you look at what we’ve actually got kind of coming already, that’s the green lines on our 2 slides. I mean that plus Procter & Gamble is enough demand to get to 40 million to 50 million pounds annually when ramped. And honestly, what’s most exciting about the remaining opportunities and the highlighted is what we described on Slide 9. I mean these are really big and with some of the biggest brands in the world. Many of those are category leaders, Fortune 100 types and converting any of those will materially impact the 40 to 50. I think we’re really encouraged by how the conversations are going and feel good about getting a few of these over the line and get us to a sold-out condition.

These brands are very deliberate. They ramp in stages. It takes time, but their needs are real. Their interest is real. And that makes me feel good about what’s to come. We are really excited not just to convert these guys quickly and get them in, in the short term. We’re really excited to build a long-term relationship with them. So we’re selling to them for decades. And so that takes a little bit more time on the front end, but we’re doing that and we’re successful so far.

Jeffrey Grampp: Great. That’s helpful color. For my follow-up on the Co-Product monetization side of things. Is that something that you guys think is feasible kind of across the spectrum as you guys get into new continents, is this something that has a depth of market, if you will, in future projects as well? Or do you guys have that level of, I guess, conviction or build out at this point?

Dustin Olson: I think if you break it into prep Co-Products and purification Co-Products, for sure, the concept of purification Co-Products is directly applicable. I mean our Co-Product 1 is a very useful waxy-type product, and we’re investigating different opportunities to move that into different applications. And I think the value of those applications will grow year-over-year as we find new opportunities to move that in. And the same thing with Co-Product 2. And both of those Co-Products we made off of every plant that we build in the future. With respect to prep Co-Products, I think it depends a little bit on the region and how sophisticated they are, okay? Generally speaking, I think the answer is yes. I think we’re going to be able to take prep Co-Products also and bring them in, in various stages of our process, whether it be compounding or it’s feedstocks into purification.

We’ve got a lot of ideas and opportunities there and we’ll handle them by a case-by-case basis. But I think the bigger takeaway here is that the ecosystem that we’re building, both on the feed side as well as the compounding side is really transformative, and it’s going to create so much optionality for our company to create full value chain value for the company and options to do different things to reduce overall yield loss from the prep process and overall value creation. We’re really excited about the asset footprint we’re putting down.

Operator: And for your next question, it comes from the line of Eric Stine from Craig-Hallum Capital Group.

Luke Persons: This is Luke on for Eric. So I guess, first. Could you maybe provide a little more color just high level on the financial impact that your shipments in 4Q will have or that you expect to have? And can you outline how quickly you expect to ramp towards full production levels for these contracts?

Dustin Olson: Yes. That’s a good question, Luke. Thanks for dialing in. I think what’s most important is to focus on what we’re shipping and growing with our customers in the fourth quarter and first quarter. It’s always very tricky to know exactly which week or which month these type of shipments will ultimately fall in. But look, they’re happening, okay? And the timing of the ramp is hard to pinpoint. But that doesn’t mean that we’re not — that does not mean that we’re wavering from the prior commentary around the $8 million target per month at the end of Q1 and into Q2. Listen, the bottom line is that the sales funnel continues to get stronger, the largest global brands are now fully engaged and interested. We’re increasing revenue but what’s most important is selling out Ironton with brands that are going to be there for — with our customers for the next decade, as I said before. That’s a good question.

Luke Persons: Right. That’s helpful. And just as a follow-up here, I guess, what’s your thought process on just inventory and cash use going forward? So we thought we might start to see you build a little bit more inventory this past quarter, which is some of these contracts getting closer to the finish line. Should we expect to see that balance really start to build here in 4Q, 1Q?

Dustin Olson: Yes. I think from an inventory perspective, I mean, we’re going to be ramping rates at Ironton and Denver, consistent with what we see on the sales ramp. There might be a little bit of inventory build as we ramp into the customer sales funnel. But again, that’s — it’s tricky to pinpoint exactly which month or which quarter that will happen. Yes. So that’s how I go with that.

Operator: And we have a follow-up question from the line of Andres Sheppard from Cantor Fitzgerald.

Andres Sheppard-Slinger: Sorry, I think I got disconnected before. Dustin, I just wanted to follow up, if maybe you can give us a little more details around the 40 million to 50 million pounds run rate that you mentioned in the call. And also, I was wondering if you could maybe, maybe help us connect some dots with the REACH certification in Europe and then the joint presentation with Volkswagen on the bumper. How should we be interpreting that? And anything you can say to that effect?

Dustin Olson: Yes, that’s great. Yes. So on 40 to 50, I mean, I think we’ve hit that a little bit. But if you look at the, let’s say, the green highlighted lines on the projects and you add Procter & Gamble to that, I think at full ramp, we’re going to get to the 40 to 50. And it’s just super positive, Andres. I mean like we’re really moving forward with some big brands and good names. I mean these are top companies, big global brands that we can grow with, not only in Ironton and in Augusta, but also in Thailand and in Antwerp. I think it’s going to be a really nice foundation for future plants, future sales, and that’s going to be very positive for us. With respect to REACH and VW, look, I mean, we are going to — we are a brand-new company.

We’re just emerging, and we’re doing a lot of great things. And we’re going to continue to click the box on lots of different certifications. We did it with GreenCircle. We did it with APR. We’ve done it multiple times with FDA LNO. I think we have 4 or 5 of those now. I don’t know the exact number, but we’ve got several. And we just recently did with REACH. And so REACH is just a step to get your product into Europe, okay? If you don’t have REACH, you can’t ship appreciable volumes in Europe. And now that we have that, I think that we’re starting to see already some interest in trials and getting things moving. And I think that will be very interesting for us. The European team has not only been working on the EIF submission, but they’ve also got a great outreach with different customers in Europe.

And as we develop our product portfolio sheets with the white thermoform and the flexible packaging and the injection molding grades, things like that. We’re going to start shipping samples over to Europe at scale and getting customers to really start biting off on those for trials. And I think that the REACH has enabled that. With respect to the 8-K that we put out a few weeks ago with VW, look, I mean I couldn’t be more thankful of the partnership with that technical team. They really worked with us to develop the right recipe, the right compound to develop a beautiful bumper. I mean, we’ve got this bumper actually on display in our office in Orlando, and it’s just beautiful, okay? And it’s just — it’s a very difficult project to get post-consumer curbside recycled product into applications that are as sensitive as automotive.

Remember, automotive is one of the most complex supply chains in the world and their precision to quality and just perfection is extreme. And so if you’ve got recycled product that varies in product quality or it has gels in it or it’s got whatever contaminants in it that get to the surface to make it difficult to paint or make the paint crack when it’s in cold weather, and make the paint crack what it’s in hot weather. It’s not going to work. And so the most exciting thing about the presentation that we published in the 8-K was the 1 slide that showed the picture. And then the next slide — right next to that slide, it showed a whole bunch of green dots next to very complicated tests. And that’s basically the 2 teams coming together and saying, not only did we build a bumper, but it passed all the required tests for another company that values quality, just as highly as is — just above everybody else.

I mean it’s a really quality company. And so I think that — I do not think that automotive is going to ramp quickly in the next 1 to 2 years for Ironton. I think we have other opportunities that are going to go faster and quite frankly, probably bring more value. But I fully believe that automotive is going to be a foundational component to our growth plan. It’s going to be a stable volume for Thailand and for Augusta in the future. And I think that, that particular case is a good example for every automotive company in the world to see that our product works really well in an extremely complex application. And when the other automotive companies see that bumper, they say, “Wow, that’s pretty amazing they’re able to pull that off”. Great question, Andres.

Andres Sheppard-Slinger: Congrats again.

Operator: This concludes our Q&A session. I would now like to hand the conference back over to Dustin Olson, PureCycle’s Chief Executive Officer, for closing remarks.

Dustin Olson: Look, thanks, everybody, for joining the call. I mean it’s another good quarter for PureCycle. We’ve built a unique asset footprint on both ends of our process, feedstock processing and product compounding. This is unlocking opportunities to reduce costs and expand our customer base. We continue to deliver technical improvements to the pipeline. We’re seeing strong adoption by major brands in the market, and the shipments are beginning to flow in Q4 of 2025. But most importantly, we’re playing our part to improve our planet. We’re converting post-consumer curbside waste from your waste bin into high-quality products that consumers can use. This is the holy grail for recycling and PureCycle is starting to achieve it. We’re poised to execute on a very strong 2026. Thank you for your interest in PureCycle and your continued support. See you next time, everybody.

Operator: This concludes today’s conference call. You may now disconnect.