Loop Industries (LOOP) Q1 2026 Earnings Call July 16, 2025 08:45 AM ET Speaker0Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Loop Industries first quarter fiscal twenty twenty six corporate update call. My name is Emily, and I'll be coordinating your call today. After the presentation, you'll have the opportunity to ask any questions, which you can do so by pressing star followed by the number one on your telephone keypad.This conference is being recorded today, Wednesday, 07/16/ ...

Loop Industries (LOOP) Q1 2026 Earnings Call July 16, 2025 08:45 AM ET Company ParticipantsKevin O'Dowd - VP - Communications & IRDaniel Solomita - Founder, Chairman of the Board of Directors & CEONicolas Lafond - Interim CFOVaryk Kutnick - General Partner & Portfolio ManagerConference Call ParticipantsGerard Sweeney - MD & Senior Research AnalystNone - AnalystMarvin Wolff - Senior AnalystOperatorGood morning, ladies and gentlemen. Thank you for standing by. Welcome to Loop Industries first quarter fiscal t ...

United States Securities and Exchange Commission Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to __________ Commission File No. 001-38301 Loop Industries, Inc. (Exact name of Registrant as specified in its charter) Nevada 27-2094706 (I.R.S. Employer Ide ...

Company Overview - Loop Industries has developed a patented technology to produce virgin-quality polyester from 100% recycled content[10] - The technology depolymerizes waste PET into DMT and MEG monomers, which are then purified and recombined[11] - Loop's technology reduces GHG emissions by up to 81% compared to traditional polyester production[12] - The company has been operating a production facility in Canada for 5 years[28] Commercialization Strategy - Loop will deploy its technology through direct investment and licensing[28] - The company sold its first technology license to Reed Societe Generale Group in December 2024[28] - Loop generates revenue through royalties, engineering services, and sales of plant modules[66, 69] - Loop has a 50/50 joint venture with Ester Industries to build a 70kta commercial facility in India, expected to be operational in 2027[72, 73] Market Opportunity - Humankind has produced 83 billion tonnes of plastics since the 1950s[6] - 49 billion tonnes of plastic (60%) have been disposed of in landfills or the environment[6] - Approximately 25 million tonnes of plastic textiles are landfilled or incinerated annually[6] - Estimated Global Demand for PET Tire cord is 518 KTA[115]

Group 1 - Healthcare Services (HCSG) is currently outperforming the Business Services sector with a year-to-date return of approximately 22.7%, while the sector has returned an average of -0.3% [4] - The Zacks Consensus Estimate for HCSG's full-year earnings has increased by 13.5% over the past quarter, indicating improved analyst sentiment and a stronger earnings outlook [4] - HCSG holds a Zacks Rank of 1 (Strong Buy), suggesting it has characteristics that may lead to outperformance in the market over the next one to three months [3] Group 2 - The Business Services sector includes 271 individual stocks and currently holds a Zacks Sector Rank of 3 among 16 different sector groups [2] - The Business - Services industry, which includes HCSG, consists of 26 companies and is ranked 32 in the Zacks Industry Rank, with an average year-to-date gain of 18.3% [6] - Loop Industries, Inc. (LOOP) is another stock in the Business Services sector that has performed well, returning 30.8% year-to-date and also holding a Zacks Rank of 1 (Strong Buy) [5]

Core Viewpoint - Loop Industries, Inc. (LOOP) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook driven by rising earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, making it a valuable tool for investors [2][3]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to significant price movements based on their buying or selling actions [3]. Company Performance and Outlook - The upgrade for Loop Industries reflects an improvement in its underlying business, suggesting that investor sentiment may drive the stock price higher [4]. - Over the past three months, the Zacks Consensus Estimate for Loop Industries has increased by 2.2%, indicating a positive trend in earnings estimates [7]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - Loop Industries' upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting strong potential for near-term price appreciation [9].

Financial Data and Key Metrics Changes - The company reported $10,800,000 in revenue for Q4, marking the first quarter of material income, primarily from a technology license sale to Reed Societe Generale Group for CAD10.4 million [5][15] - Operating expenses were reduced to $2,600,000, a decrease of $2,100,000 or 44% year-over-year [16] - The company enhanced its liquidity position with initial proceeds of $20,800,000 from the transaction with Reed Societe Generale Group [16] Business Line Data and Key Metrics Changes - The Infinite Loop India facility is expected to produce both virgin quality polyester fiber grade PET and virgin quality bottle grade PET resin, diversifying customer segments [9] - The CapEx for the India project is estimated at $176,000,000, which includes all installation costs and financing [46] Market Data and Key Metrics Changes - The company is in advanced discussions with several brand companies to secure off-take supply agreements for the Indian facility, which are crucial for project financing [10] - The company is focusing on modular construction for its European facility, which will reduce overall CapEx and shorten construction timelines [12] Company Strategy and Development Direction - The company is pursuing a low-cost manufacturing strategy, with a focus on building facilities in low-cost countries to reduce CapEx and OpEx [7][12] - Modular construction is a key focus moving forward, allowing for quicker project execution and better overall performance [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the future, highlighting that the India project fits the financial metrics for success and will deliver top-quality materials at competitive prices [18] - The company expects to have sufficient liquidity for the next five to six quarters, with no immediate liquidity concerns [25] Other Important Information - The company has executed an engineering services agreement with its India joint venture for $600,000 to support the FEED engineering study [6] - The company anticipates generating an additional $750,000 in engineering revenue by the end of the year [6] Q&A Session Summary Question: What is the latest timeline for the India JV execution? - The facility is expected to break ground in the second half of this year, with customer contracts being the gating item for project financing [22] Question: What is the cash burn and liquidity outlook? - The company has five to six quarters of liquidity on hand and is discussing with strategic partners to fill a financing gap [25][26] Question: Can you comment on the land selection process for the India facility? - The land selection in Gujarat has been finalized, and negotiations with the local government are ongoing [30][32] Question: What is the CapEx for the India plant? - The total CapEx for the India project is $176,000,000, which includes all costs associated with the project [46] Question: What are the expected margins from the joint venture? - The company expects robust margins from day one, with a 5% licensing fee covering back office expenses [68]

Financial Data and Key Metrics Changes - The company reported $10.8 million in revenue for Q4 2025, marking its first quarter of material income, primarily from a technology license sale to Reed Societe Generale Group for CAD 10.4 million [5][15] - Operating expenses were reduced to $2.6 million, a decrease of $2.1 million or 44% year-over-year, contributing to improved cash burn [16] - The company ended the quarter with a cash balance of approximately CAD 13 million and an undrawn line of credit of CAD 2.4 million [17] Business Line Data and Key Metrics Changes - The Infinite Loop India facility is expected to produce both virgin quality polyester fiber grade PET and bottle grade PET resin, diversifying customer segments [8] - The CapEx for the India project is estimated at $176 million, which includes all installation costs and financing [44] Market Data and Key Metrics Changes - The company is in advanced discussions with several brand companies to secure off-take supply agreements for the Indian facility, which are crucial for project financing [10] - The European project timeline has advanced, with site selection expected to be completed by late Q3 or early Q4 2025 [36] Company Strategy and Development Direction - The company is focusing on low-cost manufacturing and modular construction to reduce CapEx and construction timelines, enhancing overall project performance [12][14] - The strategy includes securing binding customer contracts to facilitate debt syndication for project financing [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting the 2027 target for commercial operations, emphasizing that securing customer contracts is the key gating item [23] - The company anticipates robust profitability from the joint venture and expects to reinvest cash flow into future facilities [66] Other Important Information - The company has executed a $600,000 engineering services agreement and expects an additional $750,000 in engineering revenue by year-end [6] - The modular construction approach is expected to significantly enhance project delivery and cost-effectiveness [12][14] Q&A Session Summary Question: What is the latest timeline for the India JV? - The facility is expected to break ground in the second half of this year, with customer contracts being the gating item for project financing [22] Question: What is the cash burn and liquidity outlook? - The company has approximately five to six quarters of liquidity on hand and is discussing with strategic partners to close a financing gap [24][25] Question: Can you comment on the land selection process? - The land selection in Gujarat has been finalized, and negotiations with the local government are ongoing [30][32] Question: What is the CapEx for the India plant? - The total CapEx for the India project is $176 million, which includes all costs associated with the project [44] Question: What are the expected margins from the joint venture? - The company expects robust margins from day one, with a 5% licensing fee covering back office expenses [65][66]

Financial Performance - Loop generated $10.8 million in total revenue for Q4 FY2025, a significant increase from $45 in Q4 FY2024, primarily driven by $10.4 million in licensing revenue[3][20] - The net income for Q4 FY2025 was $6.9 million, a turnaround from a net loss of $5.1 million in Q4 FY2024, attributed to increased revenues and reduced expenses[24] - Revenues increased to $10,889 for the year ended February 28, 2025, compared to $153 for the same period in 2024[37] - Net loss decreased by $6,030 to $15,057 for the year ended February 28, 2025, compared to $21,087 for the same period in 2024, primarily due to a $10,736 increase in revenues[32] Expenses - Research and development expenses decreased by $1.7 million to $1.3 million in Q4 FY2025, compared to $3.0 million in Q4 FY2024, mainly due to reduced plant and laboratory operating expenses[21] - General and administrative expenses also decreased by $647,000 to $1.6 million in Q4 FY2025, down from $2.2 million in Q4 FY2024[22] - Research and development expenses decreased by $4,515 to $6,864 for the year ended February 28, 2025, compared to $11,379 for the same period in 2024[28] - General and administrative expenses decreased by $760 to $9,228 for the year ended February 28, 2025, compared to $9,988 for the same period in 2024[29] - Impairment of equipment expense increased by $8,460 for the year ended February 28, 2025, due to the termination of a joint venture agreement[30] Cash and Assets - Cash and cash equivalents increased to $12,973 as of February 28, 2025, compared to $6,958 as of February 29, 2024[34] - Total assets decreased to $18,578 as of February 28, 2025, from $20,553 as of February 29, 2024[35] - Total liabilities increased to $18,211 as of February 28, 2025, compared to $6,411 as of February 29, 2024[35] Facility Development - Loop's Infinite Loop™ India facility is projected to have an annual production capacity of 70,000 metric tons of polyester fiber and PET resin, with a total estimated investment of $176 million[8][6] - Groundbreaking for the Infinite Loop™ India facility is expected in the second half of 2025, with commercial operations anticipated to start in 2027[9] - Loop is actively negotiating off-take supply agreements with apparel and textile companies for the anticipated output from the India facility[8] - The company is exploring potential locations for its first Infinite Loop™ facility in Europe, focusing on site selection and engineering studies[12] - Loop plans to adopt a modular approach for its European facilities to reduce capital expenditures and construction timelines significantly[13] Strategic Focus - The company plans to focus on the development of large-scale commercial manufacturing facilities following the successful scaling of its technology[28] - The company aims to contribute to a circular economy by reducing plastic waste and recovering waste plastic for sustainable future[40]

Technology and Production - Loop Industries has successfully operated its Terrebonne, Québec depolymerization production facility for the past five years, demonstrating the effectiveness of its technology and supplying Loop PET resin and polyester fiber to customers [220]. - The planned production capacity of the Infinite Loop™ manufacturing facility in India is 70,000 tons per year of Loop branded PET resin and polyester fiber [221]. - The Infinite Loop™ Technology is positioned to respond to the global transition towards a circular economy, allowing for the recycling of waste polyester that would otherwise be disposed of [224]. - The modular construction strategy aims to reduce overall capital expenditures and operating expenses while improving project timelines [234]. - The Company plans to continue the commercialization of its Infinite Loop™ Technology and execute partnerships and commercial agreements with customers [295]. Financial Performance - Revenues for the three-month period ended February 28, 2025 increased to $10,809 from $45 for the same period in 2024, primarily driven by $10,395 in licensing revenue [258]. - For the fiscal year ended February 28, 2025, revenues increased to $10,889 from $153 in 2024, with significant contributions from licensing revenue and engineering fees [267]. - Net income for the three-month period ended February 28, 2025 was $6,882, an increase of $11,973 compared to a net loss of $5,091 for the same period in 2024 [263]. - The net loss for the fiscal year ended February 28, 2025 decreased to $15,057 from $21,087 in 2024, driven by increased revenues and decreased expenses [272]. - The company reported a net loss of $15,057,000 for the year ended February 28, 2025, compared to a net loss of $21,087,000 for the previous year [349]. Expenses and Cost Management - Research and development expenses decreased to $1,306 for the three-month period ended February 28, 2025, down from $3,018 in the same period in 2024, mainly due to a reduction in plant and laboratory operating expenses [259]. - General and administrative expenses for the three-month period ended February 28, 2025 decreased to $1,574 from $2,221 for the same period in 2024, attributed to lower employee compensation and insurance expenses [261]. - Research and development expenses for the fiscal year ended February 28, 2025 decreased significantly to $6,864 from $11,379 in 2024, reflecting a shift towards large-scale commercial manufacturing [268]. - General and administrative expenses for the fiscal year ended February 28, 2025 decreased to $9,228 from $9,988 in 2024, primarily due to reduced insurance and employee compensation expenses [269]. - The Company incurred total expenses of $25.076 million for the year ended February 28, 2025, compared to $21.902 million in the prior year [339]. Cash Flow and Liquidity - The company had cash and cash equivalents of $12,973 as of February 28, 2025, indicating a liquidity position subject to risks and uncertainties [273]. - Net cash used in operating activities decreased to $2,121 for the year ended February 28, 2025, compared to $18,046 for the previous year, attributed to increased revenues and decreased operating expenses [291]. - The Company requires capital to fund its equity contributions to the India JV for the construction of the planned Infinite Loop™ facility in India [359]. - The Company has incurred net losses and negative cash flow from operating and investing activities since its inception, expecting additional net losses as it advances its commercialization efforts [298]. - The Company has determined that current available liquidity will be sufficient to meet its obligations for at least twelve months from the issuance date of the financial statements [358]. Investments and Joint Ventures - Loop received an initial down payment of €10 million for its first technology license sold to Reed Societe Generale Group, with additional milestone payments expected as the project advances [221]. - The total funding required for the India JV is expected to be financed by a combination of debt and equity capital, with Loop and Ester each contributing 50% of the equity capital [248]. - The Company invested $1,954 in its joint venture in India during the year ended February 28, 2025, with total net cash used in investing activities amounting to $2,036 [292]. - The company has a 50% interest in two joint ventures, Indorama Loop Technologies, LLC and Ester Loop Infinite Technologies Private Limited, accounted for under the equity method [353]. Assets and Liabilities - Total current assets increased to $13.852 million as of February 28, 2025, up from $7.988 million as of February 29, 2024 [337]. - The total liabilities as of February 28, 2025, were $18.211 million, a significant increase from $6.411 million the previous year [337]. - Cash and cash equivalents increased to $12,973 million as of February 28, 2025, compared to $6,958 million as of February 29, 2024 [337]. - The accumulated deficit as of February 28, 2025, amounted to $192.027 million, an increase from $176.970 million the previous year [337]. Research and Development - Research and development expenses are primarily related to process development, customer trials, and machinery expenditures, and are charged to expense as incurred [377]. - The Company is eligible for reimbursable Provincial research and development tax credits, which are recorded as a reduction of research and development expenses [381]. - The company recorded research and development tax credits of $85 million for the year ended February 28, 2025, down from $263 million in 2024 [407]. Intellectual Property - The company is focused on protecting its intellectual property and limiting expenses to optimize its liquidity position [303]. - As of February 28, 2025, the net value of patents increased to $1.708 billion from $1.548 billion in 2024, reflecting a growth of approximately 10.3% [415]. - The total cost of patents at the end of 2025 was $2.446 billion, up from $1.996 billion at the end of 2024, indicating an increase of 22.5% [415]. - The company continued to develop the Infinite Loop™ technology and filed various patents globally during the fiscal year ending February 28, 2025 [415].