PureCycle Technologies — Second Quarter 2026 Earnings Summary

Financial Performance

• Revenue for Q2 2026 was $4.5 million, representing a 173% increase year-over-year compared to $1.7 million in Q2 2025, marking the sixth consecutive quarter of sequential growth.
• Net loss for Q2 2026 was $142.2 million, compared to a net loss of $144.2 million in Q2 2025.
• Operating loss improved to $41.3 million in Q2 2026 from $45.6 million in Q2 2025.
• Adjusted EBITDA for Q2 2026 was $(31.7) million, compared to $(27.8) million in Q2 2025; the year-over-year difference reflects $7.8 million of lower non-cash add-backs (equity-based compensation and prior-year equipment write-downs) rather than an operating deterioration.
• Core monthly operations spending declined approximately 8% year-over-year to $8.3 million in Q2 2026 from $9.0 million in Q2 2025.
• Total liquidity at quarter-end was $236.9 million, up from $131 million at the end of Q1 2026, driven by a June concurrent offering.
• Cash and cash equivalents were $165.2 million, with $59.6 million in marketable/debt securities and $12.1 million in restricted cash.
• Second quarter cash outflows included a non-recurring legal settlement of $20.4 million.
• Project spend in Q2 2026 totaled $20.9 million, bringing first-half 2026 project spend to approximately $35 million.
• Fiscal year 2026 project spend expectations were raised to $45 to $50 million from a prior range of $39 to $45 million.
• Accounts receivable increased to $5.8 million from $2.0 million at the end of 2025.
• Inventory increased to $18.3 million from $13.8 million at the end of 2025.
• Long-term debt increased to $342.8 million from $263.4 million at the end of 2025.
• Deferred revenue remained flat at $5.0 million.

Guidance and Future Outlook

• The Company expects branded sales volumes to build through the second half of 2026 as compounding scales and regulation-driven demand converts to customer adoption.
• Ironton breakeven remains the goal for the second half of 2026.
• Thailand project financing is targeted to close by year-end 2026.
• Second-half 2026 project spend of $10 to $12 million remains contingent on project gating decisions and the timing of project financing.
• Equipment financing payments are expected to step down during the second half of 2026 as existing lease agreements mature.
• Q3 2026 debt service is expected to be approximately $2.4 million.

Business Segments and Product Lines

• First commercial resin deliveries from P&G began in Q2, with select Downy detergent caps now in commercial production.
• Select Tide detergent caps are scheduled for retail production in Q3 2026, and Vicks ZzzQuil PURE Zzzs child-resistant lids are targeted for Q4 2026.
• Seven new customer conversions occurred during the quarter.
• Six new commercial partnerships were announced: Reliable Caps, Motherson, Innovia Films, RM Tochello, IPL Schoeller / Cleveland Kitchen, and Amcor.
• On-site compounding is now operating, with Ironton compounded volume of approximately 2.0 million pounds and 28 sample lots produced; operations are running 24/5 shifts with plans to expand to 24/7 in Q4.
• PureFive® production in Q2 was 4.5 million pounds, down from prior periods due to a planned turnaround, though production grew approximately 32% year-over-year despite the outage.
• The turnaround was completed ahead of schedule and below budget, with over 170 reliability and rate projects executed.
• Initial shipments of PureFive® resin were made in Q3 to all three major converters for QSR cold cup trials.
• The New Jersey Department of Environmental Protection approved PureFive® resin as post-consumer recycled content.
• PureCycle achieved ISO 9001:2015 certification in May.
• Feedstock supply is secured, with Denver running at levels needed for Ironton production.
• Thailand Facility is expected to be operational in 2028, with groundbreaking expected in the second half of 2026.
• Thailand project cost estimate remains in the $250 million range.
• Thailand Board of Investment approval was received, including selection for the "Fast Pass" program.
• Seven signed LOIs with Thai suppliers cover more than the plant's annual feedstock requirement (1.5-2.4x coverage).
• 14 signed sales offtake LOIs cover 0.8-1.4x the plant's annual requirement.
• Belgium Facility permits are expected by the first half of 2027.

Market and Competitive Landscape

• State regulations are a demand tailwind; New Jersey's food-contact exemption expires in January 2027 with a recycled-content requirement rising to 20%.
• California SB54 is now in effect, and PureFive® qualifies as recycled content via APR certification.
• Demand is broader than any single regulation.
• The Company aims to bring a total of one billion pounds of installed polypropylene recycling capability online by 2030.
• Potential competitors in the recycled polypropylene segment could impact demand.

Risks and Challenges

• Risks include the ability to obtain funding, meet capital requirements, and continue as a going concern.
• Regulatory compliance risks regarding PureFive® resin certification, particularly for food-grade applications.
• Operational risks at the Ironton Facility and planned facilities (Thailand, Belgium, Augusta) regarding construction delays, cost overruns, or failure to reach nameplate capacity.
• Risks related to feedstock procurement, pricing volatility, and supply chain conditions (including inflation and tariffs).
• Geopolitical risks, including conflicts in the Middle East and Russia/Ukraine, affecting material prices and availability.
• Risks associated with maintaining the P&G license exclusivity.
• Potential for legal or regulatory proceedings.

Management Commentary and Tone

• CEO Dustin Olson stated that customers are moving faster due to imminent compliance with new regulations and that in-house compounding allows delivery of unique grades required by US and global markets.
• Olson noted that the turnaround improvements provide fundamental solutions customers are demanding and support a growing pipeline.
• CFO Donald Carpenter stated the June capital raise positioned the balance sheet to fund the planned commercial ramp and near-term growth spending.
• Management expressed confidence that the Ironton turnaround was completed below budget and that the facility is more reliable.

Other Key Points

• In June 2026, the Company closed concurrent public offerings of $287.5 million in 4.75% convertible senior notes due 2032 and 19,854,000 shares of common stock.
• Net proceeds from the June offerings were approximately $432.0 million.
• The Company used a portion of the proceeds to repurchase $216.0 million in aggregate principal amount of its 7.25% green convertible notes due 2030 for $241.1 million plus $5.2 million of accrued interest.
• Available capital resources include approximately $273 million in potential warrant proceeds through March 2027, approximately $76 million in available revenue bonds, and an undrawn $200 million revolving credit facility.
• The initial conversion price for the new convertible senior notes is approximately $11.08 per share.
• The Company incurred a loss on extinguishment of debt of $34.5 million in Q2 2026.
• Change in fair value of warrants contributed $52.5 million to income in Q2 2026.