PureCycle Technologies — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported Q3 2026 revenue of $2.3 million, down from $4.5 million in Q2 2026 and $2.4 million in Q3 2025.
• Reported net income of $6.9 million for Q3 2026, compared to a net loss of $28.4 million in Q3 2025; the Q3 2026 net income included a $58.6 million non-cash gain on the change in fair value of warrants.
• Operating loss was $37.5 million in Q3 2026, compared to $38.9 million in Q3 2025.
• Adjusted EBITDA was $(28.0) million in Q3 2026, an improvement of $0.6 million year-over-year from $(28.6) million in Q3 2025.
• Total liquidity at quarter-end was $193 million, consisting of $109 million in cash and cash equivalents, $71.4 million in marketable securities, and $12.6 million in restricted cash.
• Total available liquidity including the undrawn $200 million revolving credit facility was $393 million.
• Monthly operations spending averaged $7.8 million in Q3 2026, excluding materials purchases, which was below the guided range of $8.0 to $9.0 million.
• Project spend totaled $13.0 million in Q3 2026, bringing the first nine months of 2026 total to $47.6 million.
• Cash and cash equivalents decreased from $156.7 million at December 31, 2025, to $109.0 million at September 30, 2026.

Guidance and Future Outlook:

• Branded programs shipping, under purchase order, in contract negotiation, or final qualification are expected to reach approximately 45-55 million pounds per year at full ramp, approaching a 40 to 50% utilization range.
• Project and growth spending is expected to be directionally lower in 2027 than in 2026.
• The Company will provide a 2027 project spend range with its fourth-quarter results.
• Fourth-quarter 2026 project spend is expected to be approximately $4 million.
• Full-year 2026 project spend is expected to be approximately $51 million, compared to the previously guided range of $45 to $50 million.
• New cost reduction measures are taking effect in Q4 2026 and Q1 2027, including increased reliance on in-house maintenance, role consolidation, and bringing outside services in-house.
• The Company expects to continue reducing costs into 2027.
• The first coupon on the 4.75% senior convertible notes is payable in January 2027.
• Fourth-quarter 2026 debt service is expected to be approximately $9.4 million.

Business Segments and Product Lines:

• Ironton produced 5.2 million pounds of PureFive® resin in Q3 2026, up 14% sequentially from Q2 2026 and down from 7.3 million pounds in Q3 2025.
• Operational issues in Q3 limited production but were resolved; production is now in line with current commercial demand.
• On-site compounding transitioned to 24/7 availability with more than 20 grades formulated in-house.
• P&G products including Downy and Tide caps are on shelves, with first Tide deliveries in October and Gain caps as a new application.
• Vicks ZzzQuil lids are in commercial production.
• Railcar shipments began in October to a large customer for hot lids, representing a program of approximately 7–8 million pounds of expected annual volume once fully ramped.
• Resin is qualified for shampoo closures at a large global cosmetics company with shipments expected in Q4.
• A large global personal care company has approved a white grade for deodorant sticks, with final trials ongoing.
• Two major quick-service restaurant cold-cup programs are qualified, with launches planned for 2027.
• A long-term feedstock agreement with WM (the largest recycler in North America) was secured for up to 25 million pounds per year of waste polypropylene bales over three years beginning November 2026.

Market and Competitive Landscape:

• New Jersey's extension of its food-contact exemption shifted approximately 15 food-contact programs, representing roughly 50 million pounds of expected annual volume once fully ramped, into 2027 and beyond.
• The Company has shifted primary sales and marketing efforts to non-food applications where the January 2027 compliance date still applies, noting initial positive results in October.
• The Company maintains a license from The Procter & Gamble Company for its patented dissolution recycling technology.

Risks and Challenges:

• Operational issues in Q3 limited production and contributed to lower revenue.
• Regulatory delays regarding New Jersey's food-contact exemption significantly impacted the timing of approximately 50 million pounds of expected annual volume.
• The Company faces risks related to obtaining funding for operations and growth, meeting regulatory requirements for food-grade applications, and completing construction of planned facilities in Thailand, Belgium, and Augusta, Georgia.
• Potential risks include changes in feedstock prices, labor availability, geopolitical instability, and competition in the recycled polypropylene segment.

Management Commentary and Tone:

• CEO Dustin Olson stated the third quarter fell short of the plan due to operational issues and the New Jersey delay but noted that operational issues were resolved.
• Olson expressed confidence in the path ahead, citing the diverse pipeline, product flexibility, and the fact that more success factors are now within the Company's control.
• CFO Donald Carpenter highlighted the $193 million liquidity position, the extension of the $200 million revolver to September 2028, and the implementation of cost efficiencies.
• Management noted that discretionary spending is on hold until commercial progress at Ironton supports further investment in growth projects.

Other Key Points:

• Fernando Musa was appointed Executive Chairman of the Board effective November 3, 2026; Dan Coombs stepped down as Chairman but remains on the Board.
• The construction permit for the Rayong, Thailand site was issued in September; total project cost estimate remains in the $250 million range, with over $85 million invested in equipment and engineering to date.
• Final terms of the Thailand project financing are under negotiation.
• The $200 million revolving credit facility was extended to September 30, 2028.
• Equipment financing payments concluded in September 2026.
• The Company holds approximately $76 million of revenue bonds and has potential future capital sources including $67.3 million in equipment financing on owned PreP equipment and approximately $272 million in proceeds if warrants expiring in March 2027 are exercised.