PureCycle (PCT) Q1 2026 Earnings Transcript

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Date

Wednesday, May 6, 2026, at 5 p.m. ET

Call participants

• Chief Executive Officer — Dustin Olson
• Chief Financial Officer — Donald Carpenter
• Director of Investor Relations — Eric DeNatale

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Takeaways

• Revenue -- $4.1 million, representing the fifth consecutive quarter of sequential growth, with branded mix increasing within this total.
• Production volumes -- Ironton produced 8.4 million pounds of Pure V, up 12% sequentially from Q4, while processing approximately 10 million pounds of feedstock input.
• Pipeline opportunities -- 180 active commercial opportunities, compared to over 170 at year-end and approximately 100 a year ago.
• Branded customer conversions -- Eight new customers converted in Q1 across multiple product categories; branded pricing remains above internal targets.
• Commercial shipments -- Initial shipments to Procter & Gamble scheduled for the current quarter; commercial qualifications approved for two applications (Tide caps and Vicks ZzzQuil caps).
• International expansion -- First international sale completed in Q1 with over 300 thousand pounds shipped; ongoing discussions targeting expanded applications.
• Turnaround execution -- Ironton’s planned turnaround finished ahead of schedule and tracked approximately 15% below budget, with over 170 projects executed to improve capacity, reliability, and quality.
• Operational leverage -- Production grew about 95% year over year, while monthly operations spending increased 6%, reflecting emerging cost efficiencies.
• Adjusted EBITDA -- Negative $30.9 million compared to negative $25.5 million in Q1 2025, with approximately $7 million of project development costs expensed.
• Liquidity position -- Total liquidity at quarter-end was $131 million, comprised of $90 million in cash and equivalents, $31 million in marketable securities, and $10 million in restricted cash.
• Project spend -- $14 million in capital project spending for the quarter, below the $19 million to $20 million expected, mainly due to timing.
• Regulatory developments -- Finalization of California’s SB 54 regulations and pending New Jersey recycled content requirement increases are creating demand catalysts and urgency among brands.
• Compounding asset launch -- On-site compounding facility reached mechanical completion and is being commissioned, expected to improve margin profile and provide application-ready product without third parties.
• Co-product pricing -- Disruption in global petrochemical supply chains improved co-product pricing, with HDPE prices having roughly doubled, positively impacting secondary revenue streams.
• Warrant extension and terms -- Public and private warrants extended to March 17, 2027, with a lower redemption trigger price of $14.38 per share; total potential proceeds are approximately $273 million through expiration.
• Expansion projects -- Thailand facility slated for mechanical completion by 2027 and Belgium project aligned with prior schedules, supported by a €40 million European Innovation Fund grant.
• KPI disclosure -- Operational KPIs were introduced to increase investor transparency around production throughput and margin dynamics.
• COSMETO’X grade -- The company’s resin achieved the highest purity grade via COSMETO’X testing, allowing for use in leave-on cosmetics and validated through collaboration with Procter & Gamble.

Summary

PureCycle Technologies (NASDAQ:PCT) delivered sequential revenue growth for the fifth consecutive quarter, supported by higher branded conversions and continued production scaling at the Ironton facility. The company accelerated commercial relationships with Procter & Gamble, with initial shipments and two application qualifications confirmed, and executed its first international sale while expanding its pipeline to 180 active opportunities. Capital discipline and cost efficiency were demonstrated as operational spending grew minimally relative to significant production gains, while major capital projects, including Thailand and Belgium plants, remain on track, aided by external grant funding and strategic financing flexibility. Regulatory changes in key states and global macro disruptions have materially enhanced the company's commercial outlook and have generated urgency among customers, particularly for branded and food-grade applications relying on compliant, domestically sourced recycled content.

• CEO Olson stated, "Revenues came in above budget, branded customer conversions are accelerating, and our confidence in the commercial ramp over the remainder of 2026 has never been higher."
• Branded product pricing came in above internal targets, strengthening revenue per pound and supporting margin improvement initiatives.
• The Ironton turnaround completion ahead of schedule and under budget set operational benchmarks for reliability and capacity expansion in future quarters.
• Procter & Gamble's commercial qualifications for two products, with further application reviews ongoing, represent a significant technical and operational validation for the broader customer base.
• Project development costs contributed to higher adjusted EBITDA loss, but the majority of remaining project spend is discretionary, giving management capital allocation flexibility.
• The company extended public and private warrants, aligning their terms and bolstering potential capital inflow windows through 2027.
• Progress in New Jersey and California regulatory requirements, coupled with international certification achievements (e.g. COSMETO’X), are expanding market access and serve as near-term demand catalysts.
• Pipeline growth, compounding asset commissioning, and ongoing trials with global food and film producers reinforce PureCycle Technologies' position for expanding addressable markets and vertical integration.

Industry glossary

• APR certification: Third-party designation that recycled resin meets Association of Plastic Recyclers’ standards for recycled content, often required for compliance with regulatory mandates.
• COSMETO’X: Industry consortium providing safety evaluations of post-consumer recycled plastic for use in cosmetics and detergent packaging, including purity testing protocols.
• Feedstock-plus contract: Sales contracts that price recycled resin based on input feedstock costs plus a set margin, rather than tracking global virgin polypropylene pricing.
• Brückner six-meter line: High-throughput production lines for film manufacturing, measuring six meters across, representing leading-edge capacity and technical standards in packaging.

Full Conference Call Transcript

Eric DeNatale: Welcome to the PureCycle Technologies, Inc. first quarter 2026 corporate update conference call. I am Eric DeNatale, Director of Investor Relations for PureCycle Technologies, Inc., and joining me on the call today are Dustin Olson, our chief executive officer, and Donald Carpenter, our chief financial officer. This evening, we will be highlighting our corporate developments for 2026. The presentation we will 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, are based on management’s beliefs, 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 first quarter 2026 corporate update press release filed this afternoon, as well as in other reports on file with the SEC that provide further detail 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 and are subject to risks and uncertainties including, among other things, changes in connection with quarter-end and year-end adjustments. Any variation between PureCycle Technologies, Inc.’s actual results and the preliminary financial data set forth herein may be material. You are welcome to follow along with our slide deck, or if joining us by phone, you can access it anytime at purecycle.com. We are excited to share updates from our previous quarter with you. With that, I will turn it over to Dustin Olson, PureCycle Technologies, Inc.’s chief executive officer.

Dustin Olson: Thank you, Eric, and good afternoon, everyone. Business momentum entering 2026 is the strongest it has been. Revenues came in above budget, branded customer conversions are accelerating, and our confidence in the commercial ramp over the remainder of 2026 has never been higher. The commitments we made are becoming results. The P&G ramp is underway, coffee lids are commercial with multiple customers, branded sales are converting across the portfolio, and the branded momentum is real. We continue to make progress toward our mission of transforming the global plastics industry, and the results this quarter reinforce that we are on the right path. Let me walk you through the details.

Ironton produced 8.4 million pounds of Pure V in Q1, up 12% from Q4, and processed approximately 10 million pounds of feedstock input. Both of these numbers demonstrate the continued scaling of our technology. The planned turnaround at Ironton was completed ahead of schedule and is tracking approximately 15% below budget. This is significant. It is the first time we have completed a turnaround ahead of schedule. It speaks to a better understanding of our operations and our core technology, and it is a great example of how the internal improvements we have made are driving external outcomes. This is something that we are increasingly seeing across the business.

It has been two years since we have taken a full shutdown across the facility. During this outage, we executed over 170 projects, which targeted capacity, reliability, and quality. This will pave the way to achieve full capacity within the facility. We also found the plant to be in much better condition than it was two years ago. The vessels that created the most challenge last time required far less intervention this time, which is another testament to our progress. The long-term resiliency of our core technology is also very strong. One of the most impactful projects is the replacement of the critical seal system.

Procurement required some navigation to global supply chain conditions, but we resolved it ahead of the outage. The installation is complete and expected to materially improve reliability going forward. On-site compounding reached mechanical completion in April as well, and we are currently commissioning the asset. This is a strategically important addition to our platform. As customers scale in film and thermoform applications, we will be able to deliver a finished, application-ready product reliably and consistently without relying on third parties. The unit economics for compounded product are more attractive than the base resin, and as volumes build, this asset will be a significant contributor to our overall margin profile.

Our third-party compounding volumes also ramped to approximately 1.7 million pounds in Q1 with significant month-over-month growth throughout the quarter. Let us discuss the macro environment because the shifts we are seeing are very dynamic, but also clearly positive for PureCycle Technologies, Inc. The disruption to global petrochemical supply chains helped us in several specific ways. First, it has improved the co-product pricing. Second, it has reinforced the value of a domestic, stable supply source that is independent of global petrochemical disruption. And third, it has created urgency. Brands and converters all around the world are actively looking for domestic, compliant alternatives to global supply. We are seeing this manifest in two ways.

Companies that are already in our pipeline are moving faster with us, and we have received numerous inbound inquiries from the rest of the world looking to start the process of qualifying our product. Virgin polypropylene prices have risen roughly $0.25 to $0.35 per pound in the U.S. and $0.35 to $0.55 per pound in Asia and Europe. Our feedstock, waste polypropylene from more than 15 U.S. suppliers, is independent of these disruptions. Unlike virgin polypropylene, our product is sourced from domestic waste streams and priced independently of those dynamics. In the current environment, our customers increasingly value the consistency and reliability of our supply as much as the sustainability credentials.

HDPE prices have roughly doubled, which will improve our co-product pricing dynamics as well. As you recall from the last call, in 2025 we faced numerous macro challenges. This has reversed. The current macro environment in 2026 is a tailwind, not a headwind. Regulatory momentum continues to build. In California, regulations for SB 54 were finalized earlier this month. Source reduction deadlines are only seven months away, and we are seeing increased urgency from brands and converters to get qualified to meet this upcoming mandate. New Jersey is stepping up to a higher minimum recycled content rate in 2027, moving from 10% currently to 20%.

Additionally, while New Jersey mandated PCR content for most plastic packaging starting in 2024, it included a temporary exemption for food contact containers. This goes away in January 2027. Let us take a step back and look at this environment holistically. Three forces are converging. One, commodity pricing is extremely dynamic, creating global market uncertainty. Two, regulations across numerous segments are coming from all directions, including Europe, California, and New Jersey, as well as others. And three, consumers still want sustainable solutions. How will the brands react? Brands will lean into solutions that work, and PureCycle Technologies, Inc.’s demonstrated technical successes are a clear solution.

PureCycle Technologies, Inc. offers three positive contributions to the discussion: very high-quality, FDA-grade material with demonstrated performance across a wide variety of segments; a product positively positioned as a regulatory solution; and a localized supply that is insulated from global macro disruptions. Europe-for-Europe and Asia-for-Asia are emerging themes, and we are the solution for plastic. Quality matters, and we provide uncompromised material. With regulations coming from every direction, APR-serving certifications are increasingly accepted by regulatory agencies. This macro environment highlights the need for PureCycle Technologies, Inc. It is helping in the short term, but it is also providing significant tailwinds to our long-term growth plan.

Q1 marked the quarter where branded sales moved from isolated wins to a real and growing base.

Donald Carpenter: We booked $4.1 million of revenue, our fifth consecutive quarter of sequential growth ahead of internal expectations, with branded mix increasing meaningfully within that number. We will be shipping this quarter to Procter & Gamble. We are converting new customers like Plastic Ingenuity, and there is more to come. We converted eight new customers across multiple product categories during Q1. Branded pricing is robust and above internal targets. As we move through Q2 and beyond, we have clear line of sight to a growing mix of branded sales and Q2 ramps.

These are building a stable base of sales as the ramp becomes more meaningful, and the 40 to 50 million pounds of annual demand are starting to ramp in Q2 and Q3, and another 20 to 25 million pounds of application capacity will start to ramp in Q3 and Q4. The New Jersey regulation resolution also represents a meaningful pipeline catalyst, one we will cover in more detail when we get to the regulatory update. Our pipeline now stands at 180 active opportunities, up from over 170 at year-end and roughly 100 a year ago. We continue to be bullish about the commercial opportunities in film as we progress through 2026.

During the quarter, we ran two industrial trials successfully at different film producers. Both were on Brückner’s six-meter line. We also ran two pilot lines successfully at different film producers. In all of these trials, the PCT product properties were excellent and comparable to their virgin counterparts. We continue to progress with two of the top five global food manufacturing brand owners on programs related to snack and confectionery packaging, and we will update the market as we get closer to commercialization. Our relationship with Procter & Gamble is strong, and activity is accelerating. They have among the highest standards for quality and reliability in the consumer products industry.

They have done extensive testing of our product and we have passed. The metrics and processes by which Procter & Gamble evaluates suppliers are the gold standard in the industry, and the fact that we have achieved commercial qualifications with them is a powerful validation of our technology and our operations. The qualification process with Procter & Gamble took longer than anticipated. Their standards are exacting, and there are no shortcuts. But clearing those standards matters. The rigor of their approval process means that the specifications we validated now apply broadly across the brand portfolio, and we expect future application approvals to move considerably faster as a result.

This quarter, we achieved final approval for commercialization of two Procter & Gamble applications. Tide caps for select bottles will begin shipping in Q2, and Vicks ZzzQuil caps will follow in 2026. We are also in the process of qualification with three additional applications, which are going well, and we look for many more beyond that. Additionally, we will be posting on our website and through social media channels that we recently achieved the highest purity grade through COSMETO’X testing. COSMETO’X is a consortium focused on the intersection of cosmetics packaging and toxicology that has formulated a standardized, voluntary safety evaluation guidance for the use of PCR in cosmetic products and detergents packaging.

This milestone was the result of a collaborative effort between Procter & Gamble and PureCycle Technologies, Inc., with both teams jointly preparing and submitting samples for evaluation from the Ironton facility. Through the testing, our dissolution process produced the highest grade material. We are the first recycler to achieve this, and that means our resin is pure enough for leave-on cosmetics. Achieving the highest possible COSMETO’X grade underscores the quality and consistency of our product and reinforces its suitability for demanding cosmetic applications. We are deeply appreciative of their support, their continued partnership, and excited for the ramp ahead of us. All of these qualifications matter. They are proof points for Procter & Gamble, but also for other customers.

When other brands see the product passing the highest quality standards and they see supply disruptions and they see regulations coming, they start calling. We are very excited about our recent announcement with Plastic Ingenuity. To put this in context, the market for hot lids in North America is massive. There are over 50 billion coffee cups consumed annually in the U.S. alone. Plastic Ingenuity services many of these brands, including some of the largest in the world. Part of their decision to move forward with us was the positive reception they received from numerous QSRs and restaurant chains when they showcased the sustainable lids at the SPC Impact Conference in Nashville two weeks ago.

The market response validated the demand. Coffee lids are available with 25% to 100% purified ultra resin, which gives brands options to buy what they need. Beyond hot lids, we have finished trials on additional applications as well, including cold lids, which is a rapidly growing category, as well as food trays and meat trays. We are seeing significant opportunity to commercialize across their product portfolio. QSRs carry significant plastic packaging exposure in California, and with the mandate seven months away, we are seeing real urgency from a number of brands actively looking for compliant supply. We completed our first international sale in Q1.

The initial purchase was over 300 thousand pounds of PureChoice resin for a product line we have sold previously into. Over 3 million items are being produced. Discussions are ongoing around additional applications and a broader relationship. Not only was this a successful project, it was also a much accelerated timeline for qualification and approval. The model here is simple and similar to what we have done successfully before: start with a qualification of a single application, demonstrate the product works, and then broaden into sustained commercial relationships.

We have already seen this play out with Churchill, a very trusted partner, where we started small with shipments to events like the CFP National Championship Game and other one-off sports and entertainment venues. That success has now matured into a broader, more meaningful commercial relationship that continues to grow and mature into materially significant pounds that continue to ramp through the rest of this year. The progression with Churchill has directly led to increased brand recognition. Companies and organizations see the product working at scale in the real world, and it accelerates their decision to move forward. New Jersey remains in review, and we continue to progress positive discussions with all levels of the New Jersey government.

I have personally met with numerous government officials, including the governor, the governor’s office, and the DEP, and I am very encouraged by the new administration’s drive for efficiency, efficacy, and impact. I remain very optimistic about our progress here. When this resolves, it will open a phased ramp of incremental demand as customers progress through the qualification process and prepare for 2027. Regulation changes, and this will make New Jersey a circular state. The broader regulatory landscape continues to advance and timelines are getting very real. California’s signature recycling bill called SB 54 requires 10% source reduction by 2027. That is only seven months away, with increases to 20% in 2030 and 25% in 2032.

Those source reduction targets can be achieved partially through recycled content. With our APR certification, Pure5 resin qualifies as recycled content under SB 54, and we are seeing increased urgency from brands and converters who need to meet this mandate. We have had direct conversations with the governor and his office about PureCycle Technologies, Inc.’s role in meeting the state’s recycling targets and recycled content mandates. In New Jersey, the post-consumer recycle requirement increases to 20% in 2027, and the food contact exemption expires in early 2027. Both states have excluded mass balance from the definitions, which means PureCycle Technologies, Inc. is one of the only compliant suppliers at scale for food-grade recycled polypropylene.

The volume contingent on New Jersey approval has increased and now stands at 25 to 50 million pounds. That number has grown since last quarter, and I believe it will continue to grow. Two large brands have moved as far as they can in the qualification approval process without regulatory clearance in hand, positioning themselves to move quickly once New Jersey resolves. Both are motivated by the same deadline: the food contact exemption sunsets in early 2027. This combination creates a powerful and near-term demand catalyst for PureCycle Technologies, Inc. It drives real demand and real urgency for the customers. A quick update on our global growth projects.

As I mentioned, the Ironton turnaround was completed ahead of schedule and is tracking below budget. The improvement projects incorporated during this outage are targeting higher reliability, production rates, and product quality. Our Thailand facility remains on track for mechanical completion by 2027, operational commissioning in 2028, and production in Q2 2028. Construction is expected to break ground in 2026. The total investment is currently expected to be around $250 million. The Belgium facility also remains on track. Permits are expected near year-end 2026, construction is expected in 2027, and mechanical completion by 2028. Total investment remains in line with prior disclosure of approximately $350 million.

We were also awarded a €40 million grant from the European Innovation Fund for the Belgian facility construction and finalized the documentation in April. On Gen 2, our initial design estimates continue to validate the economics, and we are working through the more advanced design work. At this time, I will turn it over to Donald, our chief financial officer, for the financial update and some commentary on our capital position. Donald?

Donald Carpenter: Thank you, Dustin. This quarter, we are introducing operational KPIs alongside our financial results to give you a clearer view of how the business is performing. We will continue to refine and expand these disclosures as the business scales. For additional context to the KPIs, feedstock processed measures purification-ready material delivered into the purification process. “Other production” captures co-products one and two, and other saleable material recovered from the feedstock stream. This is an incremental revenue source that improves our overall yield per unit economics at Ironton. Together with purified production, these metrics give investors a more complete view of Ironton’s throughput. Year-over-year production grew approximately 95% while monthly operations spending grew only 6%.

That divergence is operating leverage emerging in the business. As we run more pounds through a largely fixed cost base, our cost per pound falls. At the same time, branded sales are lifting revenue per pound. Those two trends are converging, and that convergence is the foundation of the unit economics improvement we expect as the commercial ramp accelerates through 2026. Net loss for Q1 was $33.4 million compared to net income of $8.8 million in Q1 2025. The prior-year period included a $56.7 million favorable change in the fair value of our warrants. Adjusted EBITDA was negative $30.9 million compared to negative $25.5 million in Q1 2025.

The year-over-year change is primarily driven by approximately $3 million of higher project development costs running through the P&L. Included in adjusted EBITDA for the quarter is approximately $7 million of project development costs that were expensed through the P&L. These are primarily professional services, project team labor, and facility costs related to our Thailand, Belgium, Augusta, and prep development activities. As these projects advance toward construction authorization, a greater portion of these costs will shift to the balance sheet as they become capitalized. We have included a reconciliation of adjusted EBITDA in the press release.

We ended Q1 with total liquidity of approximately $131 million, which includes $90 million of cash and cash equivalents, approximately $31 million of excess cash invested in marketable securities, and $10 million in restricted cash. That compares to approximately $182 million of total liquidity at the end of Q4. Total operation spending came in at approximately $8.8 million per month in Q1 and within our $8 million to $9 million per month expectations. Importantly, we held this monthly range for Q1 even as production volumes increased and feedstock and other variable cost growth was absorbed within our ongoing operations.

This metric captures our ongoing operational run rate separately from project-related spending, much of which is largely discretionary and is shown separately. The split isolates ongoing operations from the discretionary capital deployment we are making for Thailand, Belgium, Augusta, and Gen 2 efforts. The Q1 quarterly total of $27.4 million reflects an annual incentive compensation payout of $1.3 million in addition to the ongoing monthly rate. Q2 will include the Ironton turnaround spend, which is tracking below budget and reported separately from the operations spend. Q2 will also include the scheduled SOFA bond debt service payment of approximately $9 million on June 1.

We have flexibility to monetize a portion of our SOFA bond holdings to offset some of this outflow. Project spend totaled approximately $14 million for the quarter, below the $19 million to $20 million quarterly expectations primarily due to timing. Fiscal year 2026 project spend expectations of $39 million to [inaudible] are unchanged, and the majority of remaining project spend is discretionary. In April, we extended our public and private warrants to 03/17/2027 and lowered the redemption trigger price to $14.38 per share, bringing them in line with the Series A warrants. These warrants now share the same expiration date with approximately $273 million in total potential proceeds available through that date. Beyond the warrants, we have meaningful financing optionality.

Our $200 million revolving credit facility remains undrawn and available through September 2027, and we have approximately $75 million in revenue bonds available to monetize. Equipment financing payments will also step down in 2026 as existing leases mature, reducing our ongoing capital costs. On Thailand, conversations with a local Thai bank continue to develop well. We are actively progressing the project financing and are encouraged by the alignment we are seeing as we work on finalizing terms and conditions. We will provide updates as appropriate. With that, operator, please open the line for questions.

Operator: Thank you. We will now open the call for questions. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please standby while we compile the Q&A roster. Our first question comes from the line of Andres Sheppard from Cantor Fitzgerald. Your line is now open. Hey, everyone.

Andres Sheppard: Afternoon. Thanks so much for taking our questions, and congrats on all the recent progress. Dustin, I want to start on the pipeline. You mentioned the pipeline now stands at about 180 active opportunities and that branded sales are starting to convert. If you can help us understand what the commercial funnel looks like over the next three to six months, what types of applications are closest—just a little more visibility into that. Thank you.

Dustin Olson: Yeah. Hey, thanks for the question, Andres. I am really excited about this. We have a lot of irons in the fire. The compounding assets that we put in place are giving us a lot of opportunity to make exactly what the customers are looking for. On the film side, if you have ever opened up a film wrapper and seen that it is white on the inside, it is called cavitated film. We can make that. In order to seal the film around a candy bar wrapper, you have to have sealant film. We have made that. We are trialing with virtually all the film producers in the U.S. at this point, and it is going well.

The interesting thing about film is that brands are driving that discussion. So it is less about us pushing it to a converter to see if it works and more about brands hearing that we can do it, and they are starting to pull it through. That is very exciting. On thermoform cups, we have talked a lot about coffee lids. Those are just easy for us to make. It is hard to get to the point where we are, but that is a good product for us—the white, the brown, the black, and some of the clear cup lids. Those are all very good for us.

You see this a lot in cold cups as well as hot cups, and that is an emerging trend. We have a lot of different customers testing to see if that clear cup can work with our material and if the coffee lid fits right on the container, and it is going well. For our other impact grades—things where you do not want them to break when you drop them, but you also do not want them to crush when you stack them—it is a tricky grade to make, but we are doing it. Things like butter tubs, cream cheese, and yogurt.

What is really exciting about that particular grade is that we are a drop-in replacement for virgin, and customers are really excited about that. They do not have to change their supply chain. They just drop it in and go, and they have a better sustainability story. Other applications include injection grade. We talked about the Tide cap. I could not be more excited about what we are doing with Procter & Gamble. The work that we have done with them to get better at what we do—there has been a delay on the Procter side, but they made us better. We got better at our operations. They got better at the supply chain.

We got better at making the product, and that is going to lead to a lot of success with other grades as well—other detergent manufacturers and other injection molded brands. The funnel, when you look at it and see all the grades that are popping through, is full of stuff that you see in the grocery store. I was walking through the grocery store the other day with my daughter and talking to her about all these different things. I got really excited. I do not think she cared at all, but if you walk through the grocery store and you see what we are able to make, it is really inspiring. Thanks for the question, Andres.

Andres Sheppard: Got it. Thank you for the thorough answer. Maybe as a follow-up, a two-part question. First on Thailand—if you can give us more color on where you are in the financing process and timing. Second, around New Jersey—an update there and when we might expect a decision?

Donald Carpenter: Yeah. This is Donald. I will take the first part of that question. I am really excited about the progress we have made in Thailand so far as it relates to the financing. We put together a very comprehensive data room. We have weekly dialogues with the Thai bank. They have reviewed the data room extensively and provided feedback, and we believe that the indicative conditions are achievable. We are looking forward to finalizing the terms, all while we are continuing to add to our LOIs for feed and offtake.

Dustin Olson: Yeah, I think we have done a really good job here, Andres. Donald has taken a strong position on this and put together a really clean data room. The relationships in Thailand are really strong. We have met with them in person multiple times. The dialogue is strong. It is more of a relationship developing, and we are very proud of that. Getting to your second point on New Jersey, it is going really well. We have had lots of active discussions. We have good relationships. The new administration is doing all the right things. They are actively trying to improve efficiency. They are working hard to make government work for the people again. Our interests are clearly aligned.

The administration just finished the first hundred days. If you think about when this really started going, we worked with the old administration in September and then late October. We had hoped to get it converted before November, but it did not happen. The election happened. There was a bit of a pause period between November and January, and then the new administration has to get started. I think it is going in the right direction. Obviously, we would all like to have that done now, but rest assured, the conversations are going well. We believe that we have clearly aligned interests, and we think it will close soon.

Andres Sheppard: Great to hear. Thanks for all the color, and congrats again on the quarter. I will pass it on.

Operator: Our next question comes from the line of Hassan Ahmed from Alembic Global Advisors. Your line is now open.

Hassan Ahmed: Afternoon, Dustin. First question about the macro volatility we have been seeing since early March. It impacts polypropylene directly. Facilities across the Middle East have been impacted, not to mention oil prices and NGL supply. I am thinking through PDH facilities in China and their feedstock. What that does to cost curves. Polypropylene prices have reacted quite positively. With these macro puts and takes, can you drill it down to PureCycle Technologies, Inc.—what it means on the cost side and demand side? I would imagine more customers would be intrigued by your offering.

Dustin Olson: I think this is a very dynamic period. There are a lot of people waiting on the sidelines and hoping it ends quickly and the impact is not extended. There is a lot of destocking happening right now, particularly in China. You have seen a lot of pricing change globally. The arb between the U.S. and Asia is either closing or closed or has reversed depending on who you talk to. It is very tight now, and there is a lot of destocking. We see that trend continuing. Oil and polyethylene have direct impacts on co-products. Our co-product one has a bit of a marker toward oil. Co-product two has a clear marker to polyethylene.

In the U.S. market, polyethylene has doubled. That makes co-product two quite a bit more valuable, and customers are very excited to start pulling those co-products in as alternatives to increased pricing. For polypropylene, it is a two-sided story. Increased pricing on virgin polypropylene helps. It is an opening discussion with customers. But most of our branded customers and most of the contracts we are developing are really feedstock-plus developed—largely independent of global supply chain items—because feedstock is locally sourced and locally produced. Most customers like that hedge. They have volatility in the normal global supply chain, but with recycled content material, it is more stable.

From our perspective, we are starting to see relationships we have built over the last three to four years globally start to bear fruit. We have a very strong team in both Europe and Asia, and the relationships with those customers are starting to come through. We are having discussions about shipping to both regions. That is exciting. We have the REACH certification in Europe, so the path is cleared for that. With Asia, Thailand is coming. We have started to develop relationships with Asia customers. Asian customers are nervous right now.

They largely get their supply from China, but they are not sure how long that will last or what the price will be, and there is a lot of prepayment activity. They have been reaching out to us and asking if we can help—either to export now from Ironton or to accelerate the approval process for when Thailand comes on. That bodes well for us. It is definitely an exciting and dynamic time. All things are pretty positive for us. One more note about nationalism. Europe-for-Europe and Asia-for-Asia is an emerging trend. People are nervous—it started with tariffs and now it is global supply chain interruptions.

If you can take a product you have consumed and turn it into a replacement for a product you used to buy, nations like that. In Thailand and in Europe, we are going to get a lot more traction over the next couple of years for replacing supply chains that would otherwise be conflicted with things like this. That is a great question, Hassan. Thank you.

Hassan Ahmed: Very helpful, Dustin. As a follow-up, on a micro level, what did you accomplish during the Ironton turnaround? Scope of work, standout projects, and, with this behind you, what should we expect in terms of production rates and top-end capacity coming out of the outage?

Dustin Olson: Ironton was a major activity. We opened nearly every piece of equipment. As mentioned, it was a lot cleaner than we expected, which in petrochemical complexes is a very good sign. The fact that we do not have corrosion or erosion or some of those traditional problems is a good indicator this plant is going to be able to run for long periods without outages and make the outages much more predictable. This was a very predictable outage. A lot of work. Very good execution by the site. We completed over 170 jobs focused on quality, reliability, and capacity. There are a lot of first-plant headaches that we solved.

We cleaned up the plant, added many small improvements that will make the plant more reliable. The operators and the management team at the site are very excited. On capacity, we believe we are going to be increasing rates coming out of the outage. We have mentioned in the past a pump that was undersized—we upgraded that. We mentioned some heat integration that was undersized—we cleaned all of the exchangers on-site, so that is much better. We talked at length about seal problems—we put in place a lot of seal improvements during this outage that we could not do without an outage. The plant is in really good position.

Every time we add something or improve something, we have to test it, see what we can ramp up to, and see if it is stable. We will do all of that. Remember, we did several rate tests over the last two years where we touched 12 thousand pounds an hour—about 75% capacity—and we touched 14 thousand pounds an hour—about 90% to 95% capacity. Those moments gave us nice insight into what to target for this outage. We took those learnings and built them into the plan, and we are excited to see what we can do in May, June, and Q3.

Operator: Our next question comes from the line of Eric Stine from Craig-Hallum Capital Group. Your line is now open, Eric.

Luke Persons: Hey, this is Luke on for Eric. Thanks for taking our questions. First, could you talk about any other states besides New Jersey that have potential regulatory catalysts on the horizon that you expect could unlock meaningful revenue opportunities?

Dustin Olson: There is legislation in place or developing in Washington, Oregon, Massachusetts, Colorado, and New York has a lot of discussions right now as well. A lot of the traditional blue states are coming through with demand-side regulations. New Jersey and California are big players in the room, and they have helped to establish a lot of the fundamental guidelines for where things are going. Most states right now are starting to adopt the APR certification as the marker for recycled content, which we have already achieved. We are very excited about where this goes.

Luke Persons: Got it. That is helpful. As a follow-up, you have opportunities in several verticals that could each drive step-change growth. If you had to force rank which applications you expect to be most meaningful in the near term, say the next 12 to 18 months, what would that list look like?

Dustin Olson: There are two ways to look at that. One is what will create revenue in the near term, and the other is what we will lean into in the long term. They are a little different. In the short term, we will keep leaning into injection molded applications like the Tide caps and the ZzzQuil caps. We have demonstrated we can color, we can make, and we can do that reliably, and we are getting a lot of follow-on requests. There is a lot of demand there. Then there is one that bridges short and long term: coffee lids and cold cups.

There is an enormous amount of volume in that space, and we have proven that we can make it at lots of different levels. Some people want 100%. Some are happy with 25% minimum content, and we can make it all. We are really excited about that. I think that will come on quickly and also stick around for a long time. Two other segments that I think are going to be very big: one is film. We are the only game in town when it comes to PCR content in film, and now we are doing it on six-meter lines. The Brückner six-meter lines are enormous—20 feet across with extremely thin film.

It is really hard to do, and the fact that we are doing it and that film producers are testing it everywhere while brands are pulling it through is a very good sign for the long term. Our Ironton compounding asset will unlock that for us. The last one, which frankly I did not expect to be as valuable coming in but has really popped over the last three to six months, is what we call the impact grade. It is tricky to get a material that can withstand cold, drop, and crush—for butter tubs, yogurt cups, etc.

We have been able to make some of those, but a lot of brands right now are held up by New Jersey in that space. We are not going to see it immediately, but it is going to come, and I think it is going to be very strong. There is another unique test called the retort test—sterilization. They test how well it sterilizes and put food in it to see how well it does over time. We are doing really well there, and I think that is a differentiator for us compared to the market because we have fewer contaminants in our product. The less contaminants you have, the better you do on these tests.

That is going to be one that hits us in the long term as well. Really good question, Luke. Thank you.

Operator: Thank you. Our next caller comes from the line of James Schrum from TD Cowen. Your line is now open.

Analyst: Hey. Thanks. Good afternoon, guys. You have in your forward outlook some timelines for two separate ramps. I just wanted to get a better sense of what the ramp actually looks like. How long does it take to get to the full annual run rate? Is it second quarter, third quarter, fourth quarter—what does the ramp look like?

Dustin Olson: It is very difficult to predict because it is largely dependent on our customers’ desired ramp timelines. What we have said previously, which I stand by now as well, is that Q1 and Q2 look largely the same. Q3 and Q4 start to ramp up in terms of volume and revenue. We have a lot of customers trialing and starting to take. It is really an average of their ramp times that we are interested in. We have enough line of sight to know that Q3 and Q4 still look really strong.

Given the backdrop of regulation that they are pushing against, there is a pretty good indication that Q3 and Q4 are going to be strong quarters for us because they have to be to meet the regulations.

Analyst: Okay. You noted with Procter & Gamble that they are making you better or you are getting better at making the product. What does that actually look like? Why is your product better? And what needs to happen to get some orders across the finish line with Procter or others?

Dustin Olson: We do have orders across the line with Procter & Gamble. We are fully qualified on both the Tide caps and the ZzzQuil caps, so those are coming. ZzzQuil will be next in the second half of the year, but the Tide caps are happening right now. I think we have a PO in hand for a late May or early June delivery. What I mean by getting better is every time you are challenged to do something better—supply chain management, inventory management, lab testing, quality control, providing the right documentation and certifications, regulatory framework—all of these matter to customers. Procter & Gamble is the gold standard. They are thorough. They are tough.

Questions you would not think would be asked, get asked. You have to answer them. Sometimes you have the answer and move on. Sometimes you do not, and you have to get it. When you develop the answer, the paperwork, the procedure, or the process, it makes you better not just for P&G, but for everybody else. When it comes to product quality and running the plant, they are not active there—they are not saying, “turn this valve” or “move that temperature.” It is more about all of the back-end and front-end stuff you have to have equally right in order to make it work. Our team is getting really good.

We have now done it, and we are learning how to do it every quarter. That is something I am really proud of, and I think we will continue to improve over time.

Analyst: Thanks. Lastly, you cited 180 pipeline opportunities. What is the pushback you are getting from customers? What is holding them back from placing an order? You had mentioned the New Jersey issue in the past, but what is holding them back right now?

Dustin Olson: Every customer is different, so it is a bit of an average discussion. Everybody is looking for something different. They have different drivers. Some people want very thorough LCAs and a lot of discussion about how you calculated your LCA. Some want to go through and look at your GreenCircle and APR certifications to get comfortable with where you are getting your feed and how you are turning it into product. It is not about what is going wrong or holding them back; it is more about what their process is. We are not getting pushback. We are moving forward through their processes. There are a lot of steps that just take time.

For food contact applications, sometimes you have to put yogurt into a cup. You make the cup—it looks great, smells great, fits great—and they say, “We love it. We have never seen something like this work as well as it is right now. Now we are going to put yogurt in it and let it sit in the refrigerator for three to six months, and we will let you know how it did.” There is nothing wrong with PureCycle Technologies, Inc. there. It is just the time it takes for some customers.

This is what we have been working on the last year and a half: make the product, show we can do it, and then step it through the customers’ qualification processes. Now we are getting good at this. We know how to qualify product. We have far fewer unknown questions, and we can answer them. We have a very strong lab in Durham that helps us answer questions extremely technically, which is very valuable. We feel really good, but it still takes time for some customers to get across the line. Having said that, they are getting across the line. We are converting to branded applications. We are showing that we can make the product and that they get approved.

Over the rest of the year, you will hear more about other brands getting across the line that we are starting to serve.

Operator: Thank you. Our last question comes from the line of Jeffrey Campbell from Seaport Research Partners. Your line is now open.

Jeffrey Campbell: Hi, Dustin, and congratulations on the continued operating success. At some point, it is projected that the EU recycling regulations are tough on paper, but enforcement confidence is questioned. What is your take on that?

Dustin Olson: That is a good question. I am not going to predict which direction governments will go. Right now, there is extremely strong support for demand-side regulatory efforts. California, New Jersey, Washington, Oregon, and Colorado are all in, and that is something they put in place years ago. We do not see that changing. We see it moving forward and setting a standard for the U.S. There is a lot of bipartisan support for recycling. A bill came through Florida, a traditionally red state, that was unanimous in approval for recycling standards. That is a great example of how both blue and red states like the idea of recycling. Outside the U.S., Europe is moving fast forward toward recycling.

If it was pure sustainability reasons in the past, today it is also nationalism—worry about tariffs and dependence on other countries. The more they can lean into recycling, the less dependence they have, which is good for Europe. In Asia, you see EPR legislation pop up in India, Indonesia, and Thailand—countries where you might not expect strong support for recycling—yet legislation is coming. I do not think this is a blue-versus-red thing or a fad. It is growing momentum on both sides of the aisle and globally, and I think PureCycle Technologies, Inc. is going to see a lot of tailwind from that over the next ten years.

Jeffrey Campbell: Thank you. I want to close by approaching the questions about conversion of customers a little differently. Since you are noting new customers and now we have the Plastic Ingenuity interest in Pure5, is there any chance that revenue guidance could be raised as 2026 progresses?

Dustin Olson: We are not going to give revenue guidance specifically today, but you have heard my comments about how we think it will shape throughout the year. It is difficult to give specific numbers at this point because it is highly variable. New Jersey has an impact. Until we get New Jersey and a little more traction there, we will probably wait. Having said that, the plan we put in place for 2026 internally is very achievable. We are starting to execute on that plan, and I feel good about it. That bodes really well for the second half of the year.

Operator: This concludes our Q&A portion, and I would like to turn it back to Dustin Olson for closing remarks.

Dustin Olson: Yes. Thank you, Myla. Thank you for listening in today and for all of your continued support. Overall, this is a strong quarter for PureCycle Technologies, Inc. across the organization. We exceeded our internal plan and are confident in our 2026 outlook. We know that this year is critical to unlocking the flywheel that allows us to capitalize on the immense opportunity to revolutionize plastic. The operational performance, the commercial conversions, the macro tailwinds, the regulatory momentum, and the capital access all point in the same direction. The hard work is paying off. The branded momentum is real, and we are just getting started. Thanks, everybody.

Operator: Thank you for your participation in today’s conference. This concludes the program. You may now disconnect.

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