PureCycle Technologies, Inc. (PCT) Q2 2026 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the PureCycle Technologies Second Quarter 2026 Corporate Update 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.

Thank you, Kelly. I'm Eric DeNatale, Director of Investor Relations for PureCycle. 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 the second quarter of 2026. The presentation we'll be going through on this call can also be found at the Investor tab on 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 second quarter 2026 corporate update press release filed this evening, as well as in other reports on file with the SEC that provides 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 statement. 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'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 it at any time at purecycle.com. With that, I will now turn it over to Dustin Olson, PureCycle's Chief Executive Officer.

Thank you, Eric, and good evening, everyone. This is a quarter of real progress on all fronts and sets up the second half for further progress. Operationally, we completed the turnaround ahead of schedule and below budget, executed more than 170 site projects and came out of it with a plant that set a new daily throughput record in June. We brought compounding in-house and it is running today, producing what customers specify. Commercially, revenue grew for the sixth consecutive quarter, and our first Procter & Gamble application entered commercial production. On the regulatory front, New Jersey approved PureFive as recycled content, the last approval our customers are waiting on, and it's already accelerating qualification at some of the largest foodservice companies in the country. We also spent the quarter preparing for future developments. In May, we ran Ironton under process conditions that closely match the plant designs we will build in Thailand and Antwerp, and those tests were successful. Thailand received Board of Investment approval in the quarter, and we expect to break ground in the second half of this year. Every one of those threads points in the same direction: a second half ramp and Ironton breakeven, which remains our second half target. We are further along the path than we were 90 days ago. Let me walk you through the details. Here is the frame that we are using internally. All year, we have said that commercial ramp will be second half-weighted, and it was for two specific reasons. The first was regulatory clock. Requirements that begin in January '27 set the pace for when brands must move. The second was supply chain readiness. It is one thing to technically qualify the product. It is another thing to make it consistently and reliably at specification every time. Brands buy at the SKU level one application at a time, and they do not start until they're confident the material in the tenth truck will be identical to the material of the first. Both factors are now proving out. Since the New Jersey approval, brands are accelerating their qualification process for the first time. You see it in QSR cold cups and in large snack and confectionery programs that tells you that the regulations really matter for driving demand and that the demand is coming. And with our compounding assets integrated and running, we now have the reliable supply chain that those brands require. You can see it working. A customer with standards as exacting as Procter & Gamble is accelerating their own commercial ramp with us. The other thing to understand is fragmentation. Outside of a handful of categories, this market converts SKU by SKU, thousands of separate qualifications rather than a few large contracts. That is not an issue unique to PureCycle. It is the structure of the market and is the same for everyone in it. Quick service restaurants follow the same pattern, but with higher volume SKUs. A large chain carries fewer packaging SKUs, and each one is enormous. A single qualification there can be worth what dozens are worth elsewhere, and they are working against a deadline that's not set by us. New Jersey's food contact exemption expires in January of '27. So the expected future pace from here is largely set by a date in statute. Customers are driving to have product on the shelves to meet requirements that start in January of '27. This all drives toward an Ironton breakeven, which remains our second half target. We have referred to breakeven as roughly 40% to 50% utilization, and that number has not changed. It is built on branded sales at those utilization rates, and branded sales are ramping. Branded pricing remains robust, and applications carrying the highest confidence for the second half maintain strong pricing. The net of this is our confidence in the second half ramp and the path through Ironton breakeven has increased because the things that made the second half weighted are being proved out. Ironton produced approximately 4.5 million pounds of PureFive in the second quarter, down from the prior quarter and consistent with the message we communicated in advance of the planned turnaround. We processed approximately 5 million pounds of feedstock. This was not a quarter for rate. It was a quarter for making improvements to the plant, testing equipment, and the test worked. The turnaround was completed ahead of schedule and below budget, and we executed more than 170 projects during the outage, targeting reliability rate and quality. Two reliability items are worth naming because together, they were our two largest sources of unplanned downtime last year. The first was the CP2 system, which has been a persistent problem and is now substantially improved. The second was improving the reliability of numerous mechanical systems, and this outage substantially expanded the capacity of the plant bottleneck and improved the worst performing seal in the plant. Both are structural fixes. When we opened the equipment during the outage, the large equipment where we had prior problems was very clean, including the settler, where co-product separates from the product stream. That bodes well for future reliability, so waste plastic is not [ fouling ] the system, and is a good long-term indicator for the technology, not just for this facility. May was, by design, a low-volume month. We commissioned the newly installed equipment, and we changed process conditions at Ironton to mimic the designs we intend to build in Antwerp and Thailand. Those tests were successful. Being able to run those conditions on an operating commercial asset before we build is an advantage most companies in our position do not have. In June, we set a new daily throughput record, and we demonstrated production at 12,000 pounds per hour. On feedstock supply, our feedstock supply is very steady. Purchases are routine, Denver is running well and inventory is balanced. Delivered costs are declining, and we now source from over 15 different domestic suppliers. On-site compounding is running. We announced mechanical completion on our May call. The asset today is running 24 hours a day for 5 days a week, and we intend to move to 24/7 in the fourth quarter. That is consistent with the cadence we described in February and again in May and is a large part of why our ramp has been second half-weighted all year. We previously relied on third-party compounders, and third-party operations carry their own reliability risks. Bringing it in-house saves us money and lets us ship by railcar. Most importantly, it derisks our supply chain, strengthens our quality control and gives us the flexibility to deliver on what each customer specifies. Now that it's running, here is what it changes. We control the formulation. We can hit a customer specification with precise recycled content percentage with precise properties and hold it consistently. And the mandates do not currently require 100% recycled material, they require a percentage. Compounding is how we deliver that percentage in a form that the application needs. It also opens thermoformed cups at scale, in clear and in white. Both sit directly in the scope of regulations, and with compounding, we can make both. Also importantly, we can now deliver compounded product in railcars directly from Ironton. This was a capability that we don't have with a third-party compound part. We have generated and shipped numerous samples since startup. The product looks excellent, and you see the examples of it in the deck. And because compounding is running in Ironton, we can now control the product samples going into the hands of prospective customers in Thailand and Europe, and we are doing exactly that. One comment on how to read the numbers. Compounded volumes includes additives and virgin polypropylene alongside our PureFive content, so compounded products will run ahead of the PureFive resin pounds. This is the product that the market is asking for. Finally, in May, we achieved ISO 9001 certification, independent validation of the quality systems that sit behind all of this. It's one of those quiet milestones, but it's kind of the thing that branded customers ask about before they commit. Revenue was approximately $4.5 million, up substantially from a year ago, with 7 new customer conversions, including our first building and construction application. On top of the $40 million to $50 million of non-New Jersey and $25 million to $50 million of New Jersey ramp, the most significant new commercial development is in quick-serve restaurants, and it happened after quarter close. In the third quarter to date, we shipped to all 3 major converters that served the QSR cold cup market for clear cups. That is the channel, not the single customer. Cold cup programs are underway at 2 major QSRs through those converters. New Jersey is what accelerated this. Following the approval, we were fast tracked into two very large qualification programs for cold cup lids. For QSR applications in New Jersey alone, we estimate the annual demand to meet the recycled content requirement to be roughly 20 million pounds. One piece of context on timing. The approval landed in mid-May, which means the entire market is qualifying on a compressed calendar ahead of January 2027. Compression creates urgency, and urgency favors a supplier that is ready. The brands are moving as fast as we are. This is the acceleration. This is what the acceleration actually looks like. In February, we laid out 5 application categories that we chose to concentrate on. Let me come back to that list because I think it provides the clearest way to show you what our progress really looks like. The largest of the five was QSR cold beverages, which we size at roughly 330 million pounds in North America, growing at 7% to 10% per year. This is where we have moved furthest, as I just described it. Value household goods at roughly 150 million pounds across multiple brand owners. This is where P&G sits, and I'll come back to them in a moment. We also added two closure partnerships during the quarter with Reliable Caps and StackTeck. Premium pet food and jerky and meat sticks are both BOPP film categories. In June, working with Innovia Films, we successfully produced white cavitated BOPP film using PureFive Choice. So the capability is now demonstrated with the named converter. We also continue to progress with two of the top five global food manufacturers on snack and confectionery packaging. One of those food manufacturers has accelerated its work with us and is pushing to move as quickly as it can, one of the first instances we've seen of a large company pulling a time line forward rather than pushing one out. It is a 2027 program, and the direction of travel is the point. The current regulatory deadline is a hard catalyst, and our supply chain and commercial infrastructure are materially better than they were a year ago. [ Dermacosmetics ] is the earliest of the 5, but it moved to this quarter, achieving the highest CosPaTox purity grade, the first recycler to do so and is what made the category accessible to us. And we are nearing commercial shipments to a large global cosmetics and personal care company. They are all in different stages. 4 of the 5 moved this quarter, and the largest QSR is moving the fastest. One thing about this business builds, accounts are sticky. Once you are qualified into an application, you tend to stay there for a long time. For calibration, a partnership we announced in July with Mitsui and RM TOHCELLO in Japan took roughly 3 years from first engagement to announcement. This is a measure of the business we are in, and it is the same reason these relationships are durable once they are established. Following the New Jersey approval and the Cleveland Kitchen launch, inbound interest increased meaningfully. Today, the pipeline spans at 42 brands, 15 converters, 28 applications and 37 programs, advanced at least 1 stage during the second quarter to the third quarter to date. Our relationship with Procter & Gamble continues to broaden. Downy detergent caps are now in commercial production, Tide caps are scheduled for retail production in the third quarter and the Vicks ZzzQuil PURE Zzzs child-resistant lids are targeted for the fourth quarter. Procter & Gamble continues to execute the pipeline by adding brands. This is important because Procter & Gamble has among the most demanding qualification standards in consumer products. Having cleared them once, additional applications move faster, and other brands notice. When one of the toughest qualifiers in the industry buys again, that is a third-party verdict on quality that we could not deliver ourselves. A few things worth remembering about Procter & Gamble. They hold an offtake arrangement for up to 15% of Ironton's capacity. Their portfolio is highly fragmented across SKUs and applications, which means each approval opens the door to the next rather than closing the opportunity. They have also been clear in their support of our growth plan, and they remain committed to increasing recycled content across their portfolio. One more point on Procter & Gamble because it applies to every large brand we serve. You start small, you prove it, and then you expand. You walk before you run. The applications we have commercialized so far are walking, and we believe the larger volume opportunities are starting to filter into the pipeline behind them. This is a natural progression of a relationship like this one, and it is what we expected to see. In June, Cleveland Kitchen deli containers were made with 25% PureFive recycled polypropylene produced by our converter partner, IPL Schoeller. Reached store shelves at a major big box retailer. I want to be very precise about what this is. It is a commercial retail conversion, not a trial. It is on shelves. Consumers are buying it, and additional brands have since approached IPL Schoeller about using our resin. Connect that to what other converter announcements we made during the quarter: Reliable Caps, StackTeck, Innovia, Amcor, alongside our continuing work with Plastic Ingenuity. Converter relationships and our marketing effort opened the long tail of demand, smaller brands and private label, which, in aggregate, is very real, just as affected by regulation, and they may be far less aware that a solution actually exists. That is how demand broadens beyond the largest CPGs. The Cleveland Kitchen B2B marketing campaign was our first fully integrated marketing campaign, and it worked. 8 industry outlets picked up the story, and it generated 7 new account engagements with large retailers, food CPG companies and converters. That is pipeline, not impressions, and it came from a deliberately small test budget. We will run this playbook behind more brand launches and incremental spend is modest against the pipeline that opens. The regulatory picture is one of the most reliable part of our demand outlook because it sets the date in which regulations will come if set by them and not set by us. ESG has been a headwind for several years globally and in the United States. The regulations matter. However, the regulations that matter kept advancing anyway. New Jersey approved, California is in effect. Japan opened food contact, and Europe keeps moving forward. Rules that advance to the toughest part of the cycle are durable, and our demand is built on those rules. Our posture toward regulation has changed as well. We used to react to legislative developments. Today, we are proactive. We have stepped up our lobbying and government relations work, we are in regular dialogue with policymakers, and we are increasingly the thought leader in the room when recycled content rules are written. We are well ahead of those same efforts in Europe and Asia. Two key points. First, our largest customers are accelerating in circular solutions because of regulations. The QSR programs and the food manufacturer I mentioned earlier both moved faster after the New Jersey approval. This is the clearest evidence that we have brands are treating these deadlines as real rather than aspirational. Second, we believe New Jersey and California are the tip of the iceberg. This is going global, and the regulations are set to affect the entire foundation we continue to build. One element of the global regulatory process may be underappreciated. While Ironton is the focus on domestic demand, our REACH certification allows us to serve Europe and other geographies from it. And we're seeing increased interest in doing so. That has also helped us convert letters of intent in Thailand, which brings me to growth. In New Jersey, the recycled content requirements rise to 20% in 2027. The food contact exemption expires in January of '27. In California, SB 54 effect is in effect, with 10% source reduction by '27, 20% by 2030 and 25% by 2032. PureFive qualifies as recycled content through our APR certification. One point on New Jersey I want to highlight because I believe it matters how you understand the demand. The approval we received in May is a 1-year conditional approval with a defined path to permanent status. We do not regard this as a meaningful hurdle. The conditions are largely documentation, feedstock sources, the types of feedstock process, PureFive end-use application and compliance information as the New Jersey Department -- the New Jersey DEP requested. We are already providing a number of these items. One related point, most recycled content claims in our industry rely on mass balance, an accounting approach where a producer buys credits and allocates recycled content to output that may not physically contain any. New Jersey and California both exclude it. Our product physically contains the recycled material, so it qualifies where credit-based claims do not. That makes PureCycle one of the very few compliant suppliers at scale for food-grade recycled polypropylene. Outside the United States, the same shift is underway. In July, together with Mitsui, we announced a strategic partnership with RM TOHCELLO to bring recycled polypropylene into flexible packaging in Japan, following Japan's approval of physically recycled polypropylene for food contact. Europe continues to advance to the Packaging and Packaging Waste Regulation. On Thailand, the detailed design is confirmed. We have ordered key long lead equipment, and we have a team on the ground progressing the project. We received the Board of Investment approval in the quarter, including admission to Thailand's FastPass investment acceleration program. The facility is expected to be operational in 2028, and we expect to break ground in the second half of this year. Total investment remains approximately $250 million. On the commercial side of Thailand, we have signed 7 letters of intent with Thai feedstock suppliers and 14 letters of intent on feedstock. Those letters more than cover the plant requires. On the sales side, they span similar categories and are targeting the U.S. customers with heavy export business into the U.S., Europe and Japan. In Belgium, permitting continues on schedule. We signed a EUR 40 million European innovation grant fund earlier this year. I'll now turn it over to Donald for the financial update and some commentary on our capital position.

Thank you, Dustin. Operating loss improved by $4.3 million year-over-year to $41.3 million from $45.6 million. Net loss for the second quarter was $142.2 million compared to $144.2 million a year ago. Adjusted EBITDA was negative $31.7 million compared to negative $27.8 million. That comparison reflects $7.8 million of lower noncash add-backs, which primarily consists of equity-based compensation and prior year equipment write-downs rather than a deterioration in operating performance. Both quarters included a planned outage, and this year's was substantially longer. Production still grew approximately 32% year-over-year, while core monthly operations spending declined approximately 8%. Operation spending was $8.3 million per month in the quarter, within the $8 million to $9 million per month range we have described previously. That figure reflects core operations and corporate cash spend presented on a consistent basis for all periods. It excludes materials purchases, meaning feedstock, virgin polypropylene and additives, which averaged approximately $2.1 million per month, up from approximately $0.7 million per month in the first quarter. This was aligned with the restart of production and the new compounding operation. On the same basis, spending was $8.5 million per month in the first quarter and $9 million per month in the second quarter of last year. Core spending is trending down year-over-year. The Ironton turnaround, which came in below budget, was tracked separately from the ongoing operations spending rate. We ended the quarter with total liquidity of $236.9 million, which includes $165.2 million in cash and cash equivalents, $59.6 million invested in marketable securities and $12.1 million in restricted cash. That compares to $131 million of total liquidity at the end of the first quarter. Second quarter project spend was $20.9 million. For the full year, we now expect project spend of $45 million to $50 million, up from our prior range of $39 million to $45 million, driven primarily by incremental engineering, permitting and long lead equipment spending for the Antwerp and Thailand projects. Second half project spend of $10 million to $12 million remains contingent on project gating decisions and the timing of the Thailand project financing. In June, we closed concurrent public offerings of our 4.75% convertible senior notes due 2032 and common stock. The offerings priced at aggregate gross proceeds of $395 million. With the over-allotment options exercised, gross proceeds were $450.5 million. Net proceeds were $432 million after $18.5 million of underwriting and offering costs. We used a portion of the proceeds to repurchase $216 million aggregate principal amount of our 7.25% convertible notes for $241.1 million plus $5.2 million of accrued interest, leaving approximately $186 million of net cash on the balance sheet. The transaction moved the put date on the substantial majority of our convertible debt from 2027 to 2030, reduced our ongoing interest costs and funds our commercial ramp and near-term growth plans. Beyond that, our $200 million revolving credit facility remains undrawn and available. We have approximately $76 million in revenue bonds available to monetize and approximately $273 million of potential warrant proceeds. Equipment financing payments step down in the second half of the year as existing leases mature. Debt service in the third quarter is expected to be approximately $2.4 million, primarily the August coupon on the $34 million of remaining 7.25% notes, plus the final equipment lease payments. The new notes carry no coupon until January. On Thailand project financing, we are actively negotiating binding terms and targeting financial close by year-end. With the liquidity added in June, our capital is sufficient for the commercial ramp and for our planned growth spending, and most of that spending remains discretionary until project financing is in place. With that, operator, please open the line for questions.

This is Anand on for Andres. Congrats on the quarter. And congrats on the BOI approval and FastPass. I was wondering, touching on Thailand, if you could give us a more full picture of where that sits today, first on the ground in terms of engineering, long lead equipment? And what happens now between now and groundbreaking? And then on the financing side, where that process stands and what are the remaining steps to financial close?

Yes. Thanks a lot, Anand. That's a good question. We're really excited about Thailand. Thailand is doing exactly what we need it to do. The detailed design is confirmed. The key long lead equipment is ordered, and we've got a really good team on the ground. We've received BOI approval in the quarter, including a FastPass treatment, which is a significant accelerant to permitting and licensing. We expect to break ground in the second half of this year, and the facility is expected to be operational in '28. The one new capability worth noting is that with the compounding running in Ironton, we're actually now putting real samples in the hands of prospective customers in Thailand. So I think this whole project is really starting to wrap together nicely, and we're very excited about it. Donald, do you want to give a little bit more information on the financing?

Yes, sure. Thank you, Dustin. We're really pleased with the progress of the discussions thus far. We're discussing binding terms, and we believe that we can meet the requirements negotiated thus far. After the binding terms are finalized, we'll begin working on the definitive agreements and then satisfying the conditions to close. The process is tracking to a close by year-end.

Got you. I appreciate all the color, Dustin and Donald. And maybe as a follow-up, touching on P&G. That relationship looks like it keeps broadening, Downy commercial, Tide and ZzzQuil. Maybe, can you talk about what's driving that cadence? And are you seeing similar behavior from other large brands that maybe aren't ready to put their names out yet? I'm just trying to get a sense of how much of the second half ramp is already in motion underneath all of the announcements.

Yes, that's also a good question. A lot of the ramp is already in motion. You just see it publicly as the last step. When a product hits the shelves, like Procter & Gamble shows you the full pattern. I mean, we have Downy caps and Tide caps and ZzzQuil and just one by one by one, added to the list. The cadence is trust and compounding and trust in our ability to deliver good product. P&G has among the most demanding qualification standards in consumer products. But once you clear them, the next application moves faster. And yes, we see the same behavior from large customers, other large companies, they're not ready to put their names out there. One of the largest global food manufacturers pulled its time line forward in the quarter. For the first time, we've seen that. The cold cup work with other major QSRs moved from conversation to shipments in weeks. In total of the 37 programs advancing at least one qualification stage. Look, a lot of times, these announcements lag the activity. The activity is the ramp. And with Procter & Gamble, again, like we've been working with them for so long, have such a good relationship with them, and we have a large pipeline behind what you see on the paper right now. This effort continues every single week where we look for new trials and new developments with other applications. I'm very excited where this is going to go with Procter & Gamble.

Dustin, a high-level question, both on near-term production as well as demand. Obviously, I know production was negatively impacted by your planned turnaround in Q2. And you guys produced, call it, 4.5 million pounds. But you also talked about post-turnaround production levels of 12,000 pounds per hour. So I'm just trying to get a better sense of what Q3 production levels will look like? So that's on the production side of it. And then in your previous quarter's update, you guys had talked about the demand ramp-up, right? I mean, Q2 to Q3 -- Q2, Q3, 40 million to 50 million pounds, Q3 to Q4, 20 million to 25 million pounds. Where do we stand on those forecasts?

Yes. So look, I can make this pretty simple. All year long, we've said that the ramp would be in the second half weighted for basically two reasons: the regulatory clock with requirements starting in January '27 and then supply chain readiness. It's one thing to qualify products and another thing to deliver it consistently with every truck. Both are now proving out. And so since the New Jersey approval, brands are accelerating their qualification work for the first time. And with compounding running, we have the reliable supply chain that they require. You can see it in the Procter & Gamble applications that are accelerating. And so our confidence has increased because the things we said that the ramp dependent upon are actually happening. And that's what converts the Ironton into breakeven, the site-level monthly cash breakeven at an exit rate built on the branded sales that we talked about with 40% to 50% utilization we've discussed. So with respect to the ramps, the $40 million to $50 million and the 20 to 25 -- $25 million to $50 million for New Jersey, like those ramps are underway, okay? Part of those ramps is in the $40 million to $50 million is described by Procter & Gamble. You see progress there. And part of the ramp is described by a little bit of the revenue growth. But quite frankly, there's a lot of unnamed companies that are in that ramp that have started to pull product on the branded basis. So that's working really well. We've always talked about the second half ramp. The second half ramp is in play, and it's largely driven by regulatory hurdles that are on the back end of the year. I mean, people don't want to start the year by trying to meet the regulation. People want to have the regulation met by the beginning of the year. And so that naturally means that they're going to start pulling in Q3 and Q4 in order to meet those regulations. And we see that in spades. With respect to production, yes, for sure, the production came down in Q2, and we, quite frankly, planned on that. We knew that the outage was going to take a chunk out of the production. But we also planned on a substantial amount of testing of the new equipment and testing of the design premise for Antwerp and Thailand in May. And we followed that and did a good job of gathering that data. Production will always follow the commercial. So I think that what you'll see is as the commercial begins to ramp in Q3 and Q4, you're going to see the production follow suit with that.

Very helpful. And as a follow-up, I think part of the answer you already gave me, but just wanted to get a bit more granular around the demand side of things. If I heard correctly, you talked about the nearer-term New Jersey opportunity being around 25 million to 50 million pounds, right? And so that's one side of it, whether that is the case or not. And then the other side is obviously a lot of encouraging stuff on the P&G side between Downy and Tide and Vicks. And I know you've talked about sort of walking before running over there. But I mean, could these individually be multimillion pound opportunities, I guess, in the near term over the next couple of quarters?

Yes, I see it that way. I mean, New Jersey was a real qualification for us. I would say that in the past, when you're working through the demand ramp and forecasting where you're going to go, you have a sense for what is holding up some of the qualifications. But I think that when New Jersey passed, we had such an influx of requests. And we had some brands that were calling converters and saying, get PureCycle's product in the trial now where they weren't there originally because we didn't have New Jersey. I mean, a lot of these things really started to happen. And I mean, we fast tracked into 2 large qualification programs for cold cups. We have 17 active trials that were tied to New Jersey compliance. Brands were, quite frankly, paused because of the uncertainty. And what hasn't changed is just the qualification process. Those cycles can run quarters, which is why that converts into volume late this year and into '27 is exactly what we described. And so I think the 25 million to 50 million pound term in the near frame still holds. I think QSR cups alone is a 20 million per year kind of bucket, but that's only a couple of QSRs, and there's a bunch of them out there. And so I see New Jersey as being a real accelerant to what we're doing. And I think you're going to see that in the next coming quarters.

This is Luke on for Eric. So I guess first here, when thinking about the international expansion plan, so how should we think about these time lines versus your plans to ramp at Ironton? Are these -- are the new project time lines at all contingent on hitting certain commercial and operational milestones at Ironton? Or should we just consider them to be completely independent of each other?

Yes. To a certain extent, they're tied. I mean, there's a few qualifications that we're going to need to make on the commercial side to keep moving forward with Thailand, but these are pretty low hurdles that we don't expect to impact our overall ramp timing. I think it's a pretty safe assumption to say that this project stays on track. With respect to the time line of Thailand relative to Ironton, look, we're already pulling samples from Ironton into Asia and into Europe, okay? There's a pretty healthy demand building for sampling of the Ironton product, which will accelerate the adoption process in those regions. It will probably create incremental demand in Ironton in the short term, which then will be replaced by Thailand supply and Antwerp supply when those plants are up and running. So I feel really good about that time line. The reality is that in order to have a good project, you've got to have a good project team and you've got to have a good strategy for how you're going to implement this. And with the team we have on site in Thailand as well as the support we have at the Board level, we've got a very good project that's developing here. I think it's going to be the right size in terms of capital, and I think it's going to be the right team to execute. And I'm very excited about where this is going to go in the next couple of years.

That's helpful. So I guess for a follow-up here, just on the compounded product, how is pricing trending relative to just the PureCycle product when you're having conversations with some of these customers? I mean, are you finding that you're still able to demand a significant premium to virgin resin?

Yes. I mean, we kind of break this up into a couple of different ways. I mean, when we sell a compounded product, there's a component of that sale that is PCT material. And when you look at the pricing range that we see for that product, it's still consistent with the guidance that we've given in the past. And then on top of that, you're giving additional service, okay? We're giving them a one pellet solution. So the operational headaches are reduced, the supply chain headaches are reduced. And they're willing to pay a premium for that as well. And so the virgin component, the mixture, the other additives that we're putting into that overall compound is really a value proposition for the customer. They like it because it makes their life easier, and it gives them exactly what they want. I mean, there are some customers that want to have a higher percentage of PCR content because they want to do more with that application for their overall book. And there are other customers that want to meet it exactly. And so with the compounding asset at Ironton, it allows us to really tailor fit for their unique specifications. It's really a differential asset that we've built in Ironton. I'm really excited to have it in service.

Listen, you put out some stats earlier. I think you said converted 5 million pounds of product to -- 5 million pounds of material to 4.5 million pounds of product. That's about a 90% yield, which I think gives very good, if not in the realm where you want to be. And I think you also said you were running Ironton around 12,000 pounds an hour, which is sort of 85% utilization. Is that accurate, my math assessment on where those numbers came out?

Yes. That math is right. A couple of clarifications. One, on the 5 million down to 4.5 million, the delta there represents co-product 1 and co-product 2 applications. And we've had increasing success marketing that and getting that into the market. So we're -- the 0.5 gap there is a good product for us. And the 12,000 is a production rate that we have touched, but I did not say that we're running there routinely right now. That's a rate that we've confidently run since the outage to test different rate limitations, and we're going to continue to do that in Q3, okay? It shows what's capable, not what we're doing on a day-to-day basis.

[indiscernible].

Yes. So you're probably going to ask what's the day-to-day. The day-to-day is going to -- similar to how I responded to it earlier, it's really the production is going to chase the commercial. And as we see the qualifications with the branded sales, we'll continue to raise rates to compensate for that.

So in other words, you have a high degree of confidence this system -- the plant is operating as you want and can handle the volume of orders as they accelerate?

More and more every day. Look, Gerry, I mean, you've been in the story for a long time. And so you've seen, let's say, all the twists and turns with bringing this technology to the market. I mean, it's hard, okay? Bringing a technology to the market is a very hard thing to do. There's a lot of unexpected things that jump in your way that you've got to figure out how to work around. And I've said many, many times that the testament of this company is that we've got the team that has the capability to push through all of those constraints and keep moving forward. That said, I mean, our technology is really, really good, okay? We've demonstrated that in terms of all the different applications that we've qualified. We've demonstrated that in terms of the, call it, SOI reduction, which is substance of interest. A lot of the big brands really care about that, and we're, quite frankly, really good there. We've demonstrated that in some of these high-colorable applications. I mean, we're making good products. We have a really good technology that does things with speed that other people, quite frankly, can't touch. And so from a technology perspective, like, look, are we done learning? No. Is there more we're going to figure out? Yes. But the core technology is right there, and we're just getting better and better every single day.

I mean, my next comment, to be quite honest with you, is going to be, over the last several quarters, you have consistently shown incremental improvements at Ironton. And that should be the plan forward, expectation-wise, which I think is what you just said.

Yes. I mean, like on all levels, okay, there's the understanding the tech, there's the running the plant, there's the uptime, there's the reliability, there's the rate, there's the quality performance. I mean, you can imagine, Gerry, when you get into these discussions with some of the big brands, I mean, we're talking of major players in the market, right? And they don't just accept an FDA LNO and say, "Okay, good enough for us." They want to peel behind the curtain. As they start looking and really peeling back the technology and asking a lot of questions, like we have to answer very hard questions, and we have to have the data to back it up. And with our R&D team, with our group in Durham, with our team in Ironton, like we've gotten really good at answering a lot of hard questions, which is why we're starting to get traction with a lot of these big brands. And so yes, I mean, on every level in this company, every single day, we get better. There's just no doubt about that. And I expect that to be a core part of our DNA that continues to move forward every single day.

Got it. All right. I'll jump back in queue, I appreciate it. For what it's worth, very happy to see things continuing to move forward.

Yes. Look, thanks, everybody, for joining us today. Let me close with some facts about the quarter. We completed a major turnaround ahead of schedule and below budget. And within weeks of that restart, we set a new daily throughput record. We brought compounding online. It's running well, we're delivering what customers specify. Revenue grew for a sixth consecutive quarter. Our first Procter & Gamble application went into commercial production, and our product is in the hands of converters who serve the largest cold cup programs in the country. And New Jersey approved PureFive's recycled content with a mandate taking hold in January of '27. Every one of those facts point in the same way. The plant is ready, the product is qualified and being qualified into more applications every quarter. The regulation arrives on a statutory clock, and Ironton breakeven remains our second half target, closer now than it was 90 days ago, with the remaining work squarely within our control. Thank you for everybody for following us, investing in us and supporting us each quarter. See you next time.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.