管理層發言
Good evening. My name is Carrie, and I will be your conference operator today. At this time, I would like to welcome everyone to the PureCycle Technologies Second Quarter 2025 Corporate Update Conference Call. I would now like to turn the call over to Eric DeNatale, Director of Investor Relations. Please go ahead, sir.
Thank you, Carrie. Welcome to PureCycle Technologies Second Quarter 2025 Corporate Update Conference Call. I am Eric DeNatale, Director of Investor Relations for PureCycle and joining me on the call today are Dustin Olson, our Chief Executive Officer; and Jaime Vasquez, our Chief Financial Officer. This evening, we will be highlighting our corporate developments for the second quarter of 2025. The presentation we'll be going through on this call can also be found on the Investor tab on our website at purecycle.com. Many of the statements made today will be forward-looking and 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 2025 corporate update press release filed this afternoon as well as in other reports on file with the SEC to 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 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. We are excited to share updates from the previous quarter with you. With that, I will now turn it over to Dustin Olson, PureCycle's Chief Executive Officer.
All right. Thank you, Eric. Thanks for joining the call today. You may notice my voice is a bit short as I'm still recovering from a little summer cold. So forgive me ahead of time if I've got to go on mute for a moment or two for a cough. The second quarter was a meaningful period for PureCycle as it marked the shift towards growth. We updated the market approximately six weeks ago with the successful capital raise in late June and the announcement of our global growth plans in Asia, Europe and the U.S. This expansion is planned to bring roughly one billion pounds of installed capacity to the market by 2030. The reaction from our customers has been very positive, especially from the larger global brands looking for an opportunity to truly move the needle for their brand's global sustainability goals. This is a transformative moment and we're thrilled to bring our product to the world. I want to thank our team for their hard work on this and in particular, thank our new and existing capital partners that participated in the $300 million capital raise.
We also continue to see progress on the commercial front as our pipeline advanced. The acceptance of our material continues to strengthen across numerous applications; our ability to deliver high volumes of FDA and PCR resin with a wide range of material properties through compounding is differential. We now have numerous applications and post-trial negotiations, and the backlog of trials continues to build. We currently have 17 customer applications that are post-trial discussions with continued plans for second-half revenue ramp as these discussions convert into sales. Also notable is that the commercial discussions focused not only on deliveries in 2025, but also capacity reservation for 2026. This is a fundamentally different dialogue when compared to before our successful capital raise. Many of these applications are with brands and products that I expect all of you are familiar with: coffee lids, yogurt cups, spouts, container lids, pins, snack bags, tapes, storage totes, are only a few of the applications that we're excited to bring to the market.
We also signed our first major commercial agreement with Emerald in this quarter for approximately five million pounds of purified resin, which starts to convert into revenue in Q3. Fiber was one of those first major technical compounding achievements, and we're excited to see those early wins accelerating into increased customer interest. The film market is an enormous opportunity for PureCycle and one that we have been discussing in recent quarters. Remember, there is not a reliable high-quality post-consumer recycled FDA resin that can be used at scale in chip bags, candy bars, and other filled applications. We initially expected trial success in the second half of 2025, but I’m very proud to announce that we achieved our first successful trial in film earlier than expected and have planned to test two additional larger-scale trials in August, one with Bruckner and another with a large global converter, and a third in September.
We believe that this is a very large underserved market for both FDA and non-FDA applications and are hearing indications of demand from film players for 2026 even before the product has been fully tested. Operationally, the story continues to be one of steady progress at Ironton. As we noted on the capital raise update six weeks ago, Q2 was a strong quarter for our team, where we achieved on-stream times approaching 90% in both April and May. We also produced pellets for 65 consecutive days. In early June, we took a small planned outage to prepare for the second half of 2025 commercial ramp to implement a couple of small reliability improvement projects. We also successfully completed an initial test run at upper limits of the facility with a rate test at 14,000 pounds per hour on August 1. We plan to continue testing the plant at these high levels throughout August and September to map out the requirements at these rates and also raise rates to higher and higher levels in Q3 and Q4 to meet the commercial funnel requirements.
Overall, the progress that we're seeing with the trial pipeline, as well as what we're hearing in our post-trial brand discussions is positive and will lead to increased branded sales in the second half of the year. More importantly, the indications of demand that we are hearing from our customers are strong, give us increased belief that sales will continue to ramp up leading to and through 2026. The unit economics on our branded contracts and what we are seeing with our current discussions continue to support the unit economics we previously laid out to the market. When we announced our capital raise about six weeks ago, we provided a lot of detail to the market regarding our global growth plans. I think it's important to take a step back and reiterate why the time for growth is now. First, the operational reliability at Ironton has meaningfully improved over the past year, which was exemplified by on-stream time approaching 90% in both April and May and 65 days of consecutive pellet production.
Secondly, the momentum in our commercial trials has continued, and this gives us increased confidence that demand for recycled polypropylene far exceeds our ability to supply the market. When it comes to growth, I could not be more excited about Thailand. We shifted to Thailand because it allows the fastest speed to market while also minimizing the incremental capital outflow. This project has a high ROIC and gives direct access to Southeast Asia and ensures Procter & Gamble's exclusivity for Asia. The brownfield site that we have access to in Rail has existing infrastructure, including power, steam, roads, warehousing, fire, compounding assets, a deep-water port, and, equally, if not more important, a deep bench of very talented project professionals. This, combined with the low-cost nature of Thailand, should allow us to bring the project to completion for somewhere between $1.50 and $1.75 CapEx per pound.
This is inclusive of roughly $87 million in long lead equipment that we've already purchased, which further reduces the incremental cash outflow. We continue to expect that we should have this facility operational in the second half of 2027. A portion of the capital raise will also be allocated to completing the permitting process in Antwerp, and also finalizing the Gen 2 design for a $300 million-plus pound production unit for future facilities. We continue to expect that permitting for Antwerp will be completed in the second half of 2026, and the overall project should be completed in 2028. Design work for the larger lines should be completed in the first half of 2026, which will then kick off construction of our Gen 2 line, which is expected to complete in 2029. Since the most recent update, we continue to progress our growth plan and have already selected our EPCm partners for Thailand and Antwerp.
We are measuring the staffing needs for both projects carefully as we scale the future designs and integrate Ironton learnings into the process. This should lead to lower operating costs for each new line, and the combination of lower CapEx per pound and lower OpEx per pound should result in very attractive capital returns and positive results from project financing. We continue to make progress with our commercial trials and are now in post-trial discussions for 17 customer applications with numerous brands and converters. These consist of applications for many large global brands. This is consistent with prior guidance where the first half of the year would be about application trials and the second half would be about working to convert those trials into sales, and that's what we're starting to see. While it's difficult to precisely time the trial-to-sales pipeline, we are on track with prior disclosures and are very happy with our trial win percentage.
The brands are excited about our product, and we are moving into the final gating items for many applications. This is good for the 2025 ramp, but it's also very good timing as they plan for 2026 volume commitments. Many of these are with large well-known consumer brands with meaningful volume requests north of five million pounds per year with the intent to grow thereafter. And other major brands are inquiring about reservations starting at volumes greater than that. When we look at our sales funnel, I think it's important to look at a couple of different metrics. First, does the funnel continue to progress and build, and secondly, how do the attrition rates look? On both of these metrics, we see incredible success. Last quarter, we had a meaningful number of active trials convert to post-trial discussions, many pending trials convert to active trials and the backlog of future trials continue to grow as well.
Last quarter, we reported 88 active and pending trials with three that were post-trial. Now we have 96 active and pending trials, and 17 are post-trial. Additionally, we have only had one trial drop out of the funnel. So the attrition rates have been incredibly low. This speaks to our ability to meet the customer requirements as well as how much our customers want a quality recycled product. We're introducing a couple of new terms, but one of them is serviceable addressable market. The serviceable addressable market of our sales funnel is currently 4.8 billion pounds. And while that's an enormous number, that continues to build quarter-over-quarter. It's still only a fraction of the 200 billion pounds global market. Last quarter, we talked a lot about the excitement we have regarding our ability to make sales, which is an underserved market for recycled material. Since the last update, we had our first industrial trial success in film, which positions us well for commercial success going forward.
I was actually at a facility a while ago and got to see the equipment running, and I have to say it was just awesome. These moments fuel our team and give everyone confidence in the products that we're building. I remain very bullish on our potential for non-FDA and FDA BOPP film. We're moving as fast as we can to qualify film across numerous customers by working our product into their highly congested production schedules for industrial trials. We have two large-scale BOPP trials scheduled for August, one with our partner, Bruckner, which we mentioned last quarter, and another with a large global converter and the third, scheduled for September in the U.S. The conversations with brand owners have increased in film, even in front of these trials, and some have even begun to communicate interest in securing volume reservations for 2026 and beyond. The overall backlog of potential trials also has continued to increase since last quarter.
After our successful capital raise, many brand owners are inquiring about capacity commitments from our facilities beyond Ironton. I would like to pause for a moment and highlight this point. Global brands manage massive systems in extremely competitive markets. To do so successfully, they require high levels of efficiency and consistency from everyone that touches their system. And like all of us, they are judicious with where they spend their time. The fact that we can deliver no-compromise drop-in replacement products with FDA and PCR certifications, and that we have significant volume pipeline planned that solves major regulatory, consumer and investor-related demands is remarkable. We provide the value proposition that they need. In July, we announced a partnership with Emerald Carpets, one of the largest installers of trade show carpets in the country. The large-scale commercial supply agreement that we have with them is for approximately five million pounds per year of PureFive Choice resin beginning this quarter.
Emerald consumes roughly 50 million pounds of polypropylene per year. So there's a lot of room for us to grow the partnership. And I can tell you, both parties are interested in doing so. There is also a unique opportunity with Emerald to create true circularity over time. I give them a lot of credit for really chasing this activity in the market. With true circularity, we can take their unused carpets and use them as feedstock to produce recycled resin for their future demand. This is an exciting development and one that we hope to iterate with other commercial partners over time. The success with Emerald is also a good reminder of the regulatory pressures that are beginning to come into play for consumers and polypropylene. California recently mandated 5% recycled content for all carpets sold in the state with a stated goal of increasing that over time. PureCycle is a solution for California and other states that decide to follow suit.
During the second quarter, PureCycle earned Green Circle's Recycled Content Certification for nearly 30 grades of PureCycle resin and co-products one and two. This is an independent certification verifying that over 90% of our feed comes from qualified PCR feedstocks. Customers just want to know that their product is truly coming from post-consumer curbside and they know it's extremely difficult to procure high-quality final product made at scale from PCR feed. We hear this in the market all the time, and we know this is a differential value proposition for PureCycle. The reality is that PureCycle is processing PCR feedstock day in and day out at Ironton, and we're happy to get this certification to add to our docket of successful certifications. Overall, we've made tremendous progress with our commercial pipeline, and we continue to expect a commercial ramp in both Q3 and Q4 with increasing visibility on potential demand from our customers for 2026 and beyond.
We recently received board approval to initiate a project to bring compounding operations to Ironton by the end of the year. This is a great project. This is expected to increase our on-site compounding capacity to approximately 100 million pounds and will be primarily focused on film, thermoforming and injection molding applications. This decision came in large part due to our commercial conversations. First, it's becoming clearer every day that our customers want compounded material across multiple application types and grades. Therefore, our existing third-party capacity would be insufficient to meet their needs. Secondly, as we progress with larger blue-chip companies, their volume indications require higher volumes and therefore require rail, which can be more cost-effectively and reliably managed through compounding at Ironton. This expansion will not only help to improve our logistics and our ability to serve our customer needs, but we believe it will realize cost savings in excess of $4 million per year and improve overall quality management activities.
The expected payback on this project is less than two years. The announcement today on our compounding expansion is a reflection of the commercial progress on specific trials and speaks to the confidence that we see in the demand ramp to come. As previously disclosed, we achieved on-stream times approaching 90% in both April and May before taking a brief outage in June. The Ironton Facility has been back up and is ramping into higher production levels for Q3. We initiated a number of rate tests and successfully ran at levels of 14,000 pounds per hour, nearing nameplate rates on the first of August. Like with all rate tests, we move to a new level and then we evaluate product quality, reliability, and operability at these levels. We then continue this process to optimize, learn and improve along the way until it becomes the new norm for operations. We've been doing this successfully for two years now.
I can't say enough about how proud I am of our operational successes. This is not a game that's won with a single home run. It takes practice, diligence, some occasional strikeouts, and a series of endless singles. These accomplishments position us well for when we ramp our production in conjunction with the commercial ramp. Overall, the second quarter marked an important inflection point for PureCycle. We successfully raised $300 million in capital, which should allow us to begin our growth beyond Ironton and bring our PureFive resin to the global marketplace. We have structured our growth plans in a manner that we believe creates the best balance between speed to market, cost and overall returns. As we laid out in late June, we continue to see a path to roughly one billion pounds of installed capacity by the end of 2029, which should provide roughly $600 million of run rate EBITDA. We have successfully advanced our commercial trials and are ramping revenue at Ironton.
We are excited for the next stage of the journey and I'm incredibly excited about the recent developments, more confident than ever about what the future holds for PureCycle. With that, I’ll turn it over to Jaime for the financial presentation.
Thank you, Dustin. As we mentioned, we had a successful capital raise in June, which significantly bolstered our liquidity position. As you see on Slide 12, we ended the quarter with $298 million of cash on the balance sheet, including $284 million of unrestricted cash. Earlier in the quarter, we also sold $11.9 million face value of our revenue bonds at a price of $88 for net proceeds of $10.5 million, and we still hold about $87 million of revenue bonds that we plan to sell in the future to further support our growth initiatives. Our operations and corporate spend was around $39 million, which was slightly higher than the $37 million spent in the previous quarter. We anticipate that our operational spend will remain at similar levels adjusted for increased spend associated with the ramp-up of commercial sales. Additionally, we expect growth capital spend to slowly increase over the next several quarters. We are working on detailed project plans and will provide more insight once the spend curves associated with those plans are finalized. I would now like to turn the call back to Carrie, who will open the call for questions.
分析師問答
Your first question will come from Andres Sheppard with Cantor Fitzgerald.
Congratulations on the quarter and all the great progress. Dustin, you touched on this a little bit on the call, but I'm wondering, can you give us maybe a bit more detail on the growth plans, how you have progressed them since you last updated the market?
Yes. I mean thanks, Andres. I appreciate the compliment. Look, I mean, we're just really excited to get moving with growth. I mean we've talked about effectively three growth projects: Thailand, Antwerp, and then our Gen 2 facilities. And we're just really well positioned. We've done a lot of work over the last several years to secure good sites that are ready to go. And now we've got Ironton in a place where it's going to support that activity and give us the confidence to move forward with these projects. So if you look at Thailand, in particular, I mean, look, I mean, this is a great facility. It's an integrated polypropylene producer. They've got compounding. It's a relatively low-cost install for this project because they've got much of the infrastructure already available to us so we can drop our purification facility right in and get ready to go. So that leads to a high ROIC, a good cash generation straight out of the gate and then everything else is right.
I mean we've got good infrastructure. We've got good roads. We've got good steam. We've got a deep port access. And look, the deep port access is really important, Andres. If you think about, if you just take a step back and you think about where is plastic pollution, the biggest problem. Typically, people lean toward Asia because the waste handling facilities just aren't as developed as the rest of the world. So if you look at some of these great groups around the world, like the Alliance to End Plastic Waste and other notable organizations, they are putting a lot of effort and a lot of money into fixing that problem. What that means for us is that over the next 10, 20, 30 years, we expect there to be just an enormous amount of new capacity added to collect, sort and process waste, which means that our facilities in Thailand are going to be perfectly positioned to purify endless growth of supply of feed from that region.
I'm super excited about Thailand. I just think it's going to be a flagship big mega facility for us into the future. We're just starting off now, but we're starting off the right way. The other notable point with Thailand is — and I mentioned it in my starting comments, but we have an incredible team and partner with IRPC. Not only do they have the right facility; they have the right people. When it comes to building the project, they've got loads of experience — I mean, decades of experience at each critical position in order to do this successfully. On the operations side, they run a really good facility. I think the coordination between the companies on staffing levels and supporting these projects is going to be really strong. We've already started to do that. This team has already gotten started learning our project and helping us to find ways to deliver it on time and on cost. When it comes to the other two projects, Antwerp is in the heart of the recycling universe.
I mean, it's right in the middle of it. Europe is a leader when it comes to demand for recycling capacity, and we are going to be a strong supplier of good quality product there. We've got to go through the permitting process. It's different in every region, but with Europe, you've really got to nail down the engineering, submit for permit, wait and then start building. That's why it's a bit delayed. However, we're very optimistic about the returns and acceptance in that region. Lastly, it's Gen 2. Look, this is where we really start to nod to the future, Andres. Gen 2 — and we don't know the size of the plant yet. We're doing the engineering to decide if we want to go 300 or bigger annualized capacity, but this facility is going to have an incredible cost structure. Those customers that partner with us early and get started early will have a lot of volume for them at competitive pricing.
I believe that this will lead to not only competitive operating costs but also extremely competitive CapEx facilities. Our goal is to get PureCycle projects to be competitive with virgin polypropylene facilities so that in the future, when polypropylene starts to grow, they will look at a PureCycle facility as opposed to a new virgin facility. Great question. Thank you for that.
No. Thank you, Dustin, for that very elaborate answer. I really appreciate all the color. Maybe one more for me. I think the big question that I think most of us probably have on the call. So I'm wondering if you can maybe give us a bit more granularity on the 17 applications that you disclosed are post-trial. How should we think about the gating items here before commercialization? And maybe how would you characterize the likelihood of success?
Yes. So look, first of all, we've continued to invest in our commercial team. I think we're building a first-class team. We are starting to formalize the process for evaluating the funnel, getting very strategic in how we look at different customer segments, and really starting to distill into which applications are going to make the most sense. I'm really proud of the team for the work they've done there. Look, the way to look at the 17 trials is — it's working. If you take a step back 12 months ago, people were wondering if the product would even work. Now we're talking about post-trial success conversations. That's a substantially different place than we were a year ago. Right out of the gate, the first take should be, oh, okay, the tech works. Customers are using it; customers are approving it from a trial perspective, and now they're in further conversations. That's very positive. The other thing you should take from that table is look at the different lanes.
We can literally play in just about every major lane in the market; getting trial success in each of these lanes will just give us the flexibility to go where it makes the most sense. We'll be doing that, and you'll see that over the coming months. When it comes to conversion to sales, I mean, it's happening. A lot of the 17 successful trials are in late-stage discussions. Many brands are excited to get moving, and they're just working through supply chain, inventory management procedures, bill logistics, and whether to receive it by box, truck or rail. All these things happen. How do I bring PureCycle in and also work out the incumbent? These things take time. The technical success we're having is leading the way to good discussions in all those regions. I feel very good about the ramp-up that we've discussed in the past. Are there going to be movements here and there and some customers in and replacing others? Maybe. Are we going to have some trials that we emphasize more than others? Maybe. But at the end of the day, we are starting to ramp right now, and we still feel good about the ramp we discussed.
Things seem to be progressing along extremely well. My first question is around commercialization, right? A couple of things that you said on the call intrigued me a lot. You talked about the serviceable addressable market being around 12.8 billion pounds. And like you rightly said, for an industry that's, call it, 185 million pounds, 190 billion pounds, that's just scratching the surface. So I guess my question is that as you inked this sort of commercial agreement with Emerald, five million pounds, their needs are 50. I mean, how are you guys thinking about parceling the sort of production out, meaning the pace with which things are going and what you're alluding to? I mean, you’d be able to sign these commercial agreements with a variety of folks, it seems. I mean, the demand is there; they just want to scoop this up, right? So how is your commercial team thinking about picking and choosing the right sort of customers? How are you thinking about what it entails to actually get the best deals, right, and how to sort of maybe even grow in pricing, right? Because I mean, it's a very unique situation to be in commodity chemical land, where the demand so exceeds what you're producing that in theory, I mean the pricing power is with you.
Yes. I mean that's a great question. In a way, it's a little bit about the decommoditization of polypropylene. We are not commodity polypropylene; we are a specialty product. It's in short supply, and there's a lot of demand for it in the market. I think that when you think about the overall segment choices for us, it goes a couple of different ways. First of all, with Ironton, our goal is to show that we can make it in all of these applications. We want to be able to show the automotive sector that we can make a bumper and that our odor is good enough to go on the inside of a car. We want to show the textile market that we can make fiber reliably, both in single strand, nonwoven, staple and it could go into cars and carpets. It can go into these high rigor areas like California for the 5%. We just want to show them it can work. And in so many different ways, we are doing really well there.
Now when it comes to how much we deliver to each segment, I think that there is a high valued customer willing to pay high prices in every single segment. Depending on the segment, it may not be as deep as another; consumer-facing FDA grades, it's a deeper pool than in some of the other segments. However, there are still deep segments, and deep value customers in some segments that we can target. So I think we can manage the overall margin across each segment. We will choose which segment to dive into to maximize the margin at volume. When it comes to Ironton, I want to highlight a really important point, and we’re basically announcing for the first time, and that is the in-house compounding of material. When you recycle material, it's a fundamentally different feedstock, and it needs fundamental work to get it ready for the customer. Sometimes you need to add whitening, sometimes you need to add impact so it doesn't break, and sometimes you need to change the MFI or add a different kind of virgin material.
We have all of these flexibilities. In fact, we're learning from the customers that they like us. They like the brand, they like the circularity, and they like what we're doing. If we can make a product that really meets what they need and they can drop in, then we win. This compounding solution is not replacing the third-party compounding that we've talked about in the past. This is just an increment to be able to do this at scale with rail, with big brands that have big demand; it's awesome. I just think we're in a great place, and we'll figure out how to maximize margins to maximize value to the shareholder. We're doing that by creating an incredible slate of optionality to our funnel. We're going to get better and better quarter-over-quarter at defining the funnel, adding to the funnel, and then choosing which areas we focus on. Great question.
No, that's phenomenal and a unique situation to be in. And sort of question around where you just left off. The compounding opportunities seem very interesting as well. It's almost like on the pricing side, you could get that economics for a bulk chemical, right? So my question is, you've initiated that 100 million pounds sort of project as you called it for compounding. Could you give us a sense of, a, how long this is going to take and b, the capital outlay and part and parcel with that c, I guess, would this be something that you would consider at the other sort of growth projects that you are considering, be it out in Asia or Europe or the like? I mean, is this going to be the model?
Yes. The first question, we expect to have the compounding project done by the end of the year with startup in Q1. We do not expect it to impact our compounding operations with third parties. If we require additional compounded capacity, we have another alternative that we can turn on to pull in additional capacity. It will come at a fee, but we have that as an option developed right now. It should be operational by the end of the year. When it comes to whether this will be part of future discussions, yes, I think so. We've got to evaluate this; we need to see how it plays into all of the projects. The moment we started to turn on compounding about a year ago, we found great traction with our customers, and they started to see us through a different lens of reliability. Providing a product that meets their expectations is critical. We are in a position that's just truly unique. We are seeing successes, and I think you're right that those successes we see in Ironton will translate to potentially the same customers in different regions. We have lots of customers saying, we're a global brand. We make the same thing around the world. We want it to look the same, smell the same, process the same. Our differentiation in product quality sets us apart from the competition.
This is Luke on for Eric. So first, your capacity obviously seems to be in high demand at Ironton right now, which could give you the luxury of being selective. So how are you thinking about customer diversification playing out? Do you expect to be servicing maybe a select few customers and higher volumes at Ironton or do you think it's realistic to plan on converting a greater portion of that trial pipeline into maybe lower volume commercial contracts?
Yes. I think it's a great question. To a certain extent, those customers that move fastest are going to have the first bite at the apple. That's first. We're starting to see a lot of capacity reservation cleanup in 2026. I think there's a bit of a rush to get a piece of the pie. That's good for us. I also think that there will be some segments that are naturally deeper with margin than others; FDA, and consumer-facing brands will clearly be there. But don't lose sight of some of the other big brands. Automotive has a major regulation waterfall coming their way in 2028 and 2030. In order for them to be successful there, they have to start now. I believe each segment will have pieces that hold value and sustainability that will pull and still create good margins across the board. Yes. I mean, it is a fundamentally different place where we are today than where we were when we started building and designing Ironton.
Today, we've seen a commercial scale run. We know how it works, what curves work, and what we can do to optimize Ironton on a day-to-day basis. We're going to implement that into the next two lines in Antwerp and Thailand. Out of the gate, the reliability of those other lines will be improved. We have learned a lot through the commercialization of Ironton, but also through acceleration of learning and research and development at Durham. Durham is an incredibly valuable facility for us. Our R&D team has grown and gotten better year over year because of fundamental research.
Can you just update us on what the 2H ramp actually looks like now? I mean, does Q3 look like Q2 and then Q4 is significantly better? I think in the past, I think you talked about EBITDA breakeven for Ironton in the third quarter? And then at the corporate level, being EBITDA breakeven, I believe, late Q4, early Q1; is that target still on track?
Yes. That's a good clarification. When we talked last quarter, I think we disclosed we expect Q1 and Q2 to be consistent, and largely, they are. Q2 is a small increase over Q1, but effectively the same level. We anticipated that and expected it. When it comes to Q3 and Q4, we see ramp in both quarters. We're already seeing higher revenue numbers in Q3 than what we did in Q2. We expect that to continue. We believe we could exit Q3 at the $4 million per month revenue level, and I think that still makes sense. We've done work to minimize cost, and I mentioned that in terms of the in-line compounding. That's going to help us quite a bit to get to breakeven. Good line of sight being one month into the quarter that we're going to see pretty good rates at the end of September. Whether we get to the $4 million in September or by the end of October, I don’t know, but I know we're on the right trajectory. With respect to Q4 and Q1, what I disclosed last time was that we think we can get to corporate breakeven in Q4 to Q1 time line; I think that's still very much in play.
Okay. Great. Can you just talk about what your goals for orders would be in the third quarter? And what's the pushback you're getting from customers? Is it price? Is it melt flow? Is it quality consistency? What are you getting? What is the pushback from customers?
Yes, that's a good question. We have discussions trying to understand what their incumbent resin looks like and how it performs. There's always a lot of back and forth. Sometimes we get the compounding recipe perfect out of the gate. Other times, it takes a couple of different trials to get there. We certainly experienced that with fiber. With respect to pushback, there are a lot of discussions. I’d boil down most of it to bureaucracy; each company, especially established global brands, has a long-standing fund of success based on doing things consistently and reliably. So they've just got a host of requirements to move through before they can get to the sales point. That's part of it; the bureaucratic nature is very real. We're clicking through a lot of these. Consistency, quality, Green Circle certification, the FDA, and the compounding recipe are all very important. Getting the compounding on-site is also critical.
When they send the material to a third party and handle it multiple times, they’re often concerned about that affecting the quality, causing a loss of reliability. So this discussion takes time; I wouldn’t see it as major pushback anywhere. Instead, there’s a lot of ways behind us in terms of new volume and opportunities. The customers that are coming through the funnel are getting much more comfortable with our products and excited about what this could mean for their operation. So, look, I think that goes back to your first question on kind of what our revenue expectation is. The orders from finished products should be consistent with what we're looking at from a revenue ramp perspective.
And really exciting progress. First, this circular supply that you noted with Emerald is certainly meaningful. Separately, looking at recent feedstock data: we've seen evidence of mechanical recyclers increasing uptake in PP feedstock, which we assume is largely downcycled. Is this a competitive concern for PCT? Or can you obviate this as you move to the increased volumes that you've been talking about?
So let's start with Emerald. Emerald is great. One, it's a new customer with real demand, and they offer a unique value proposition to their market and an opportunity to create true circularity. This is going to be a shining example of that. I’m incredibly optimistic about this, and I think it's going to grow over time. Regarding the feed and mechanical recycling and some of the uptake; first, I'd tell you that a lot of mechanical recyclers globally are having trouble differentiating themselves in an increasingly competitive feedstock environment. You start to see some players fall away. As for the competition in the U.S., there’s going to be movements in the feedstock market every day. I think that at the end of the day, PureCycle makes a highly differential product that can go into a number of markets that mechanical recyclers can't touch. I think that puts us in a unique position where we can have a lot of feedstock power in order to pay for the feedstock and still make great margins on the final product.
I'd like to remind you that especially for some of the longer-term projects in Europe, Thailand, and the U.S., we're leaning into what we call the feedstock plus pricing model, which is effectively feedstock yield adjusted plus a market price. Our customers recognize that feedstock is fundamentally different than oil, and that they need to be sensitive to shifts in feedstock in order to ensure reliable supply. This gives us good pricing and margin protection as well as a competitive position with mechanical. Our product quality is ultimately why customers are willing to consider absorbing feedstock cost shifts. If we had a lower-end down-cycled product, I don't think they'd agree to cover the feedstock cost. Since we can meet FDA standards, consumer-facing products, and BOPP are in demand, I think we have a unique conversation that will benefit PureCycle.
I think that makes a lot of sense, frankly. And just a follow-up on the circularity part. Is it reasonable to think that as circularity develops this could actually be less expensive feedstock to source because it would be presumed to be a better-qualified feedstock rather than digging through giant piles and trying to sort everything out?
Yes. That's a great question. When you have good partners, you can innovate together in smart ways to help build product circularity. There are things we can do with Emerald because we’re communicating. We’re creating value through true circularity and also building a product that is more circular. Regarding feedstock value, yeah, I believe we can find an economic optimum that works for both parties. We can reduce their costs so they don’t send material to landfill while we minimize our costs due to better feedstock pricing. That's a true partnership—a great opportunity.
And let me ask one final quick modeling question. Are you still thinking about $1.36 a pound as sort of an average price? I'm asking that because of the feedstock plus. I’m wondering if that’s changing any of those dynamics.
Yes. I think we still feel comfortable with the $1.36. That number we mentioned previously was tied to EBITDA projections. We’re keenly aware of that and managing it. I would say that as feedstock moves up and down, we see those numbers change a little bit. It gets complicated with compounding because the overall ASP might be a little lower for the compound; however, for PCT, it can be better. Generally, we still hold to the numbers mentioned before, and we see great volume for the branded products we end up making. All the initiatives we're doing to cut costs and ensure feedstock flexibility image well for margins over the long run. Honestly, that's our focus.
I wanted to take a slightly different tack and I understand all the trials, the pipeline and all that. But I think you kind of alluded to it earlier, but at some point, do you even narrow the aperture of some of the markets you're going for after you maybe delineate what the best options are, the best areas, the best returns, because one billion pounds is great in 2030? But at some point, do you actually start narrowing down where you want to sell some of those products to get the best optionality? In other words, maybe a little less is more and can actually speed things up? Have you discussed that at all internally from a strategic perspective?
I think that we're moving through the funnel very efficiently. I think the funnel is growing, progressing step to step. We're moving quite fast. Ultimately, we will find markets to focus on, and it will long-term evaluate margin and earnings capability for PureCycle. For Ironton, it’s a broader strategy to find specific lanes while proving we can walk in multiple. This is vital for price discovery across applications, and as we aim for building to one billion pounds, we need many lures in the water to build that pipeline demand. The work we're doing in Ironton positions us ahead for successful commercialization in Thailand, Antwerp, and Gen 2. Yes, that's right. We've disclosed our relationship with Procter as very strong. We continue to work with them and are very excited about all that. A point in the license agreement, as you build capacity into specific regions, it clicks off exclusivity for the life of the patents in those regions. As we build in Europe, Asia, and North America, we gain more exclusivity in those areas. So that's another key point for this expansion plan as it lays a path for the long term.
That concludes the Q&A portion of today's conference. I will now turn the call back over to CEO Dustin Olson for any closing remarks.
Look, thank you for bearing with me, my voice and my summer cold for this call. It was just six weeks ago that we updated the market on the capital raise and gave updates on operations, commercial and projects. Even today, just six weeks later, we've seen real substantive progress, and we're proud of that. PureCycle is working. Our tech is transformative, and we're distancing ourselves from the competition. Our operations and commercial plans are becoming clear and are ramping. Our growth plan is established and wildly exciting, and we are poised for a great decade. It's now time for employees, investors, and believers in PureCycle to change the world on a grand scale and make history. Thank you all for your attention today. We look forward to talking to you again in a few weeks.
Thank you for your participation. This does conclude today's conference call. You may now disconnect.