Li-Cycle Holdings Corp. (LICY)·Q3 2024 Earnings Summary

Executive Summary

• Closed a $475 million U.S. DOE ATVM loan agreement (upsized from prior $375 million conditional commitment), a key step toward restarting the Rochester Hub; first advance must occur by November 7, 2025 subject to equity funding and reserve requirements .
• Q3 revenue rose 79% year over year to $8.4 million, matching the record Q2 level; SG&A fell 50% to $12.9 million as cost actions took hold .
• Reported net profit of $56.5 million, driven primarily by favorable fair value gains on financial instruments; adjusted EBITDA loss improved to $(21.7) million .
• Secured 100% MHP offtake with Glencore; technical review confirmed MHP scope with expected output of ~8,250 tonnes lithium carbonate and up to ~72,000 tonnes MHP annually; Hub total capex unchanged at ~$960 million, cost to complete ~$487 million .
• Near-term catalysts: complete full funding package to satisfy DOE loan first advance requirements; progress on Spoke optimization and black mass throughput; formal FID after financing .

What Went Well and What Went Wrong

What Went Well

• DOE loan closed with attractive long-dated fixed-rate terms and no spread, viewed by management as a strong validation of Li-Cycle’s technology and role in U.S. battery supply chain .
• Revenue momentum and cost discipline: Q3 revenue $8.4M equals Q2 record; SG&A reduced 50% YoY to $12.9M through restructuring and cash preservation initiatives .
• Commercial traction: EV pack feedstock ~40% in Q3; four of top five customers were EV OEMs; expanded European EV OEM recycling arrangements .

Management quotes:

• “This loan…is a strong vote of confidence for our patented recycling technology and underscores the importance of our role as a critical battery material supplier in the U.S. battery supply chain.”
• “We have established a commercial framework that provides a strong market foundation for the project.”

What Went Wrong

• Ongoing operating losses on an adjusted basis: Adjusted EBITDA loss $(21.7)M in Q3 despite revenue improvement .
• Cash burn continued; cash and equivalents declined to $32.2M from $57.0M in Q2, driven by operating and investing activities, partially offset by $1.1M via ATM .
• Hub restart contingent on additional funding: must settle ~$92M in unpaid commitments and fund ~$173M in reserves (up to ~$97M via LCs) to access DOE first advance; full funding package still to be secured .

Financial Results

Segment Revenue Breakdown

KPIs

Notes: Net profit in Q3 benefited from fair value gains on financial instruments ($99.2M) and was not indicative of operating profitability .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “This loan…is a strong vote of confidence for our patented recycling technology and underscores the importance of our role as a critical battery material supplier in the U.S. battery supply chain.” — Ajay Kochhar
• “The loan facility offers attractive terms…The interest rate is fixed…with no spread.” — Ajay Kochhar
• “Our current estimated cost to complete the project is approximately $487 million…The expected nameplate processing capacity remains at 35,000 tonnes of black mass annually.” — Ajay Kochhar
• “Total revenue increased 79% to $8.4 million…SG&A has decreased 50% to $12.9 million…Adjusted EBITDA improved year-over-year.” — Craig Cunningham
• “We have secured an offtake agreement with Glencore covering all of our MHP production…existing offtake rights covering lithium carbonate…are not affected.” — Ajay Kochhar
• “A notable example includes the recently finalized guidance on the U.S. 45X tax credit…a 10% production tax credit on the lithium carbon expected to be produced at the Rochester Hub…available through 2032.” — Ajay Kochhar

Q&A Highlights

• The published Q3 2024 transcript captured prepared remarks and did not include Q&A details beyond indicating readiness for questions; no additional Q&A content was available in the retrieved document .

Estimates Context

• S&P Global/Capital IQ consensus estimates for LICY’s Q3 2024 EPS and revenue were unavailable due to missing CIQ mapping; therefore, comparisons to Street estimates could not be performed. Values retrieved from S&P Global were unavailable for this ticker in our tool.

Key Takeaways for Investors

• Funding progress is real: DOE loan closed and upsized to $475M is a major de-risking step, but first advance depends on equity/reserves; monitor announcements on the full funding package and timing vs the Nov 2025 deadline .
• Operating metrics trending better: sequential production and sales of black mass improved (Q3 produced 1,459t; sold ~2,000t), and service revenue grew; continued Spoke optimization should support unit economics .
• Reported profitability was non-operational: Q3 net profit reflects fair value gains; adjusted EBITDA remains negative; trading should focus on cash trajectory, reserve/equity financing, and Spoke margin improvements .
• Hub economics and offtake framework solidifying: total capex stable, CTC modestly lower, output targets specified, and 100% MHP offtake secured; lithium carbonate PTC (45X) enhances long-term economics .
• Liquidity is tight: cash fell to $32.2M; ATM use continued; near-term news flow on financing/strategic alternatives and reserve funding solutions will be stock-moving .
• Commercial validation continues: EV OEM contracts expanding in EU/NA; EV packs ~40% of feed; narrative of being a preferred recycler remains intact .
• Near-term trade setup: stock likely sensitive to milestones—funding package announcements, Hub FID, Spoke throughput updates, and regulatory tailwinds (45X monetization). Medium term, Hub restart and ramp are central to the thesis.

Sources: Q3 2024 earnings call remarks ; Q3 2024 8-K press release and financial statements ; Q2 2024 earnings materials ; Q1 2024 earnings materials .