Executive Summary

Q4 2023 revenue was $10.9M, down 28.8% YoY (vs. $15.3M) as PLA demand collapsed due to Ukraine-related disruptions; PHA revenue grew 11% YoY, and management guided to ~60% YoY PHA growth in Q1 2024 .
Adjusted EBITDA loss was $10.7M (vs. $8.6M in Q4’22), with gross loss of $6.4M driven by lower PLA volumes and higher depreciation; FY23 adjusted EBITDA loss was $39.0M, in line with guidance .
2024 outlook: adjusted EBITDA loss of $22M–$32M, CapEx $8M–$10M, and YE cash $20M–$25M; canola feedstock costs expected to fall to ~$0.70/lb by mid-year and mid-$0.60s by YE, supporting margin trajectory .
Strategic catalysts: 20M-lb QSR cutlery award ramping to full run-rate by Q2 2025; DOE loan process nearing conditional commitment targeted for Q3 2024; completed $15M gross equity raise to bolster liquidity (net ~$13.5M) .
Consensus estimates from S&P Global were unavailable; comparisons to Street estimates cannot be provided (consensus data not retrievable via S&P Global mapping).

What Went Well and What Went Wrong

What Went Well
- PHA momentum: “We continued our trend of year-over-year PHA revenue growth in the fourth quarter,” and expect ~60% YoY PHA growth in Q1 2024 .
- Strategic wins: 20M-lb cutlery award for a large global QSR progressing toward full run-rate in Q2 2025; expansion potential into Asia and adjacent categories (straws, wrappers) .
- Liquidity actions and cost control: ~$13.5M net equity proceeds to extend runway; OpEx cut ~+$14.4M in 2023 vs. 2022 and another ~$4M targeted reduction in 2024 .
What Went Wrong
- PLA exposure: PLA sales fell ~74% YoY in Q4 given Ukraine-related disruptions; net product revenue decline of ~$4M (PLA -$4.9M, partly offset by PHA +$0.9M) .
- Profitability: Q4 gross loss ($6.4M) and adjusted EBITDA loss ($10.7M) worsened vs. prior year, reflecting lower PLA volumes and higher depreciation as Kentucky scaled .
- Dependency on capacity/utilization: Company-level adjusted EBITDA positive only when Kentucky reaches 70–80% utilization, pushing breakeven to early 2025 and emphasizing execution risk on volume ramp and DOE financing .

Financial Results

Summary quarterly progression (oldest → newest)

Metric	Q2 2023	Q3 2023	Q4 2023
Revenue ($M)	$12.9	$10.9	$10.9
Gross Profit (Loss) ($M)	$(6.6)	$(7.7)	$(6.4)
Gross Margin %	(51.2%)	(70.6%)	(58.7%)
Adjusted EBITDA ($M)	$(10.2)	$(9.3)	$(10.7)

Notes: Gross margin % calculated from disclosed revenue and gross loss figures (citations reference those disclosures) .

Q4 2023 vs. Prior Year and Prior Quarter

Metric	Q4 2022	Q3 2023	Q4 2023	YoY Δ	QoQ Δ
Revenue ($M)	$15.3	$10.9	$10.9	(28.8%)	0.0%
Adjusted EBITDA ($M)	$(8.6)	$(9.3)	$(10.7)	(24.4%)	(15.1%)

Segment/KPI snapshot for Q4 2023

Item	Q4 2023
PHA revenue YoY %	+11%
PLA revenue YoY %	(74%)
PHA YoY $ change	+$0.9M
PLA YoY $ change	$(4.9)M
Cash & Equivalents (12/31/23)	$59.2M
Restricted Cash	$14.3M
Total Debt	$382.8M
Capex – Q4 / FY23	$2.0M / $27.7M

KPIs and operating drivers

KPI	Detail
Customer pipeline	85 customers in material selection cycle
Kentucky EBITDA thresholds	KY plant adj. EBITDA positive just over 30% utilization; company adj. EBITDA positive at KY 70–80% near start of 2025
Canola feedstock	~$0.86/lb avg in Q4; ~flat in Q1; targeting ~$0.70 mid-year, mid-$0.60s by YE 2024

Non-GAAP: Adjusted EBITDA excludes stock-based comp, D&A, interest, taxes, and specified non-recurring items per company reconciliation and definitions .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA ($M)	FY 2024	N/A	$(22) to $(32)	New
Capital Expenditures ($M)	FY 2024	N/A	$8 to $10	New
Ending Unrestricted Cash ($M)	FY 2024	N/A	$20 to $25	New
PHA Sales Growth	Q1 2024	N/A	~+60% YoY	New
OpEx (R&D+SG&A ex D&A/SBC/NR)	FY 2024	N/A	Reduce by ~$4M vs. 2023	New
EBITDA Positive (KY)	Run-rate threshold	N/A	>30% utilization (KY-only)	New
EBITDA Positive (Company)	Timing/threshold	N/A	KY 70–80% utilization near start of 2025	New

Earnings Call Themes & Trends

Topic	Q2 2023 (Q-2)	Q3 2023 (Q-1)	Q4 2023 (Current)	Trend
QSR programs (cutlery/straws)	Expect large cutlery (~15M lbs) and straw rollouts; building end-to-end QSR solutions (cups/lids/coatings)	20M-lb cutlery award won; first shipments 2H24; full run-rate mid-2025; delays from qualification	Scale-up underway; full run-rate Q2 2025; potential expansion to Asia/adjacent SKUs	Strengthening pipeline and visibility
DOE loan (greenfield)	Accepted into Part II due diligence; earliest close Q1 2024	Process ongoing; funding timing pushed toward early Q3 2024	Nearing due diligence completion; aiming for conditional commitment in Q3 2024	Advancing; timing clearer
Input costs (canola)	~$0.87–$0.88/lb; downtrend expected in 2024	—	~$0.86 in Q4; path to ~$0.70 mid-2024 and mid-$0.60s by YE	Improving margin tailwind
PLA demand / Ukraine	COVID/Ukraine headwinds; PLA down sequentially	Continued PLA weakness tied to Ukraine	PLA -74% YoY Q4; key headwind to revenue/gross profit	Ongoing headwind
R&D / Catalytic PHA (Rinnovo)	Building cup/coating solutions; DOE diligence; catalytic PHA as future lever	R&D progress across films, cups, coffee pods; Chevron Phillips collaboration; catalytic barrier advantages	Rinnovo pilot complete; 3-year earliest commercialization; exploring co-location to lower capex	Progressing; capital-light orientation

Management Commentary

“We expect this growth to accelerate in 2024… we further expect our first quarter 2024 PHA sales to exceed our first quarter 2023 PHA sales by approximately 60%.” (CEO) .
“We expect… the Company as a whole will become Adjusted EBITDA positive when our Kentucky facility reaches 70 to 80 percent capacity utilization near the start of 2025.” (CEO) .
“Fourth quarter total revenue was $10.9 million… PHA-based resin sales grew by 11%… PLA-based resin sales fell 74%… primarily due to the ongoing issues associated with the Ukraine conflict.” (CFO) .
“We believe our adjusted EBITDA will be in the range of minus $22 million to minus $32 million [for 2024]… CapEx… $8 million to $10 million… end 2024 with an unrestricted cash balance in the range of $20 million to $25 million.” (CFO) .

Q&A Highlights

Cutlery ramp and visibility: Full run-rate by Q2 2025; converter tooling underway (one ordered ~$9M of equipment); award alone “will more than double our PHA sales,” with added plastic wrap volumes .
DOE loan timing: Nearing due diligence completion; aiming for conditional commitment in Q3 2024; potential Q4 availability depending on terms and any required equity .
Feedstock costs: Canola ~$0.86/lb in Q4 and Q1; projected ~$0.70 mid-year and mid-$0.60s by YE 2024; starting to lock in .
OpEx discipline: Expect ~$4M lower operating costs in 2024 vs. 2023 after $14.4M YoY reduction in 2023; reductions across headcount, outside services, insurance .
Near-term volumes: Q1 PHA sales expected to exceed prior-year by ~60% .

Estimates Context

S&P Global consensus estimates for Q4 2023 were not available via the S&P Global feed for DNMR at time of analysis. As a result, we cannot provide actual vs. consensus comparisons for revenue or EPS. If you want, we can revisit once S&P mapping is restored.

Key Takeaways for Investors

Execution pivot to PHA: PLA weakness (Ukraine) is structural near term; the story hinges on PHA scale-up, particularly the 20M-lb QSR cutlery award and adjacent SKUs .
Path to breakeven is utilization-driven: KY >30% utilization for facility-level EBITDA positive, and 70–80% for company-level positive—management targets early 2025, with PHA ramp and cutlery timing critical .
Margin tailwind from inputs: Canola relief into mid/late 2024 supports gross margin improvement as volumes rise; monitoring for hedging/locks .
Liquidity and financing: YE cash $59.2M plus ~$13.5M net raise; total debt $382.8M. DOE loan conditional commitment (target Q3 2024) is a pivotal catalyst for greenfield and longer-term capacity .
2024 guide de-risks cash: Adj. EBITDA $(22)–$(32)M, CapEx $8–$10M, YE cash $20–$25M suggests runway through ramp milestones if working capital improves as planned .
Near-term trading setup: Q1 PHA growth (~+60% YoY) and cutlery scale-up updates are key checkpoints; DOE loan progress headlines likely to move the stock narrative .

All figures and statements are sourced from company filings and transcripts: Preliminary Q4/FY23 press release 8-K (Item 2.02) ; Q4 2023 earnings call transcript –; prior quarter call transcripts for Q3 2023 – and Q2 2023 –; 2023 10-K for FY context –; and March 25, 2024 financing 8-K –.

Danimer Scientific, Inc. (DNMR)·Q4 2023 Earnings Summary