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Origin Materials, Inc. (ORGN)·Q2 2025 Earnings Summary

Executive Summary

  • Origin’s Q2 2025 printed low revenue as expected from the wind-down of its legacy supply chain program, but delivered tangible commercialization milestones: first PET bottlecaps on store shelves (Power Hydration), and the first publicly named customer (Berlin Packaging) .
  • Management launched a strategic review with RBC to accelerate manufacturing access, distribution, and strategic capital; however, guidance was materially reduced: 2026 revenue cut to $20–$30M (from $50–$70M) and 2027 to $100–$200M (from $150–$210M), and run-rate Adjusted EBITDA breakeven moved from 2026 to 2027, citing OEM delays and tariff headwinds—an adverse surprise likely to drive estimate resets and near-term stock pressure .
  • Manufacturing ramp remains the gating factor: CapFormers 3–6 FAT expected on a rolling basis through Q4’25; CapFormers 7–8 slipped to 2H’26 (from Q1’26) amid capital constraints and tariff exposure—prolonging the supply-demand gap and deferring revenue capture .
  • Liquidity stands at $69.4M in cash and marketable securities with additional expected cash from $17.9M in receivables (legacy program) and $9M land sale; financing strategy prioritizes non-dilutive options but tariffs could raise cash outlays and complicate equipment debt .
  • Near-term catalysts: strategic review outcomes, additional customer announcements, CSD qualification progress, and FAT completions for lines 3–6; risk factors include tariff trajectory, qualification timing, financing terms, and NASDAQ listing compliance pathway (grace periods and potential reverse split if needed) .

What Went Well and What Went Wrong

  • What Went Well

    • First Origin PET bottlecaps reached retail shelves (Power Hydration), validating product function through qualification and commercial bottling; management emphasized performance advantages and recyclability benefits .
    • Berlin Packaging named as strategic customer, expanding distribution reach across global brands and enhancing go-to-market leverage for 1881 closures .
    • Manufacturing and supply chain adaptability: secured EU partner Royal Hordijk to diversify production, mitigate U.S. tariff exposure, and drive CapFormer cost efficiency via PET extrusion capability .

  • What Went Wrong

    • Guidance cut: 2026 revenue lowered to $20–$30M (from $50–$70M) and 2027 to $100–$200M (from $150–$210M), with run-rate Adjusted EBITDA breakeven pushed to 2027 due to OEM manufacturing delays and tariff impacts on FAT timing—a material setback versus prior trajectory .
    • Ramp delays: CapFormers 7–8 FAT slipped to 2H’26 (from Q1’26), extending the supply-demand imbalance and delaying revenue scale-up .
    • Tariffs increased (EU 15%, Switzerland 39%), raising cash requirements for equipment and potentially impairing financeability, pressuring the non-dilutive financing path and capital plan .

Financial Results

Sequential and YoY comparisons (USD):

MetricQ4 2024Q1 2025Q2 2025
Revenue ($MM)$9.222 $5.430 $5.813
Net Loss ($MM)$(13.522) $(26.441) $(12.747)
EPS (Basic)$(0.09) $(0.18) $(0.09)
Operating Expenses ($MM)$16.216 $32.736 $15.148
Adjusted EBITDA ($MM)$(11.055) $(11.010) $(9.904)
Cash + Marketable Securities ($MM)$102.9 $83.0 $69.4

Year-over-Year (Q2 2025 vs Q2 2024):

MetricQ2 2024Q2 2025
Revenue ($MM)$7.033 $5.813
Net Loss ($MM)$(19.499) $(12.747)
EPS (Basic)$(0.14) $(0.09)
Operating Expenses ($MM)$18.464 $15.148
Adjusted EBITDA ($MM)$(12.908) $(9.904)

KPIs and Balance Sheet Items:

KPIQ1 2025Q2 2025
Accounts Receivable, net ($MM)$19.1 $17.9 (legacy program; expected collection)
Land Held for Sale ($MM)$11.3 $9.1 (Geismar; expected sale proceeds)
Shares Outstanding (MM)149.5 (incl. 3.0 Sponsor Vesting) 150.2 (incl. 3.0 subject to forfeiture; 1.5 forfeited July 1)
CapFormer StatusLines 2–4 FAT Q2–Q3’25; 5–8 FAT Q4’25–Q1’26 Lines 3–6 FAT through Q4’25; 7–8 in 2H’26

Estimates vs Actuals (S&P Global):

MetricQ2 2025 ConsensusQ2 2025 Actual
RevenueN/A (consensus unavailable)*$5.813MM
EPSN/A (consensus unavailable)*$(0.09)

*Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2026$50M–$70M $20M–$30M Lowered
RevenueFY 2027$150M–$210M $100M–$200M Lowered
Run-rate Adjusted EBITDA BreakevenTimingBy end of 2026 2027 Pushed out
CapFormer FAT TimingLines 7–8FAT in Q4’25–Q1’26 (5–8) FAT in 2H’26 (7–8) Delayed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
Manufacturing ramp / CapFormer timelineQ4’24: Eight lines targeted in 2025; commercial production commenced on Line 1; revenue ramp expected with next lines in Q3–Q4’25 . Q1’25: Lines 2–4 FAT Q2–Q3’25; 5–8 FAT Q4’25–Q1’26 .Lines 3–6 FAT through Q4’25; 7–8 delayed to 2H’26 .Slipping due to OEM delays/capital constraints .
Tariffs / macroQ1’25 plan assumed 10% EU tariffs; revising deployment strategy and multi-sourcing to mitigate .Tariffs raised: EU 15%, Switzerland 39%; increases cash outlay, complicates financing .Deteriorating macro (tariffs), higher friction .
Strategic reviewNot present in Q4’24/Q1’25 releases.Launched with RBC to accelerate capacity, distribution, and strategic capital .New initiative; potential catalyst .
Customer tractionQ4’24: millions of caps shipped for qualification; product on shelves expected Q3’25 . Q1’25: 20+ companies qualifying; first pilot targeted Q3’25 .First caps on shelves (Power Hydration); Berlin Packaging named .Advancing commercialization .
Financing strategyQ4’24: arranging debt financing; no equity anticipated . Q1’25: pursuing equipment and corporate debt in 2H’25 .Tariffs increase cash needs; still aiming for non-dilutive, plus cash from A/R and land sale .More complex; liquidity actions outlined .
Listing complianceNot discussed prior.In grace period; potential second grace with reverse split if needed .New risk disclosure .

Management Commentary

  • “The first Origin PET bottlecaps are now on store shelves… We are officially in market with our 1881 cap for non-carbonated water, a $7 billion segment of the caps market.” — CEO John Bissell .
  • “We’ve launched a strategic review with our financial advisor, RBC… to enhance access to manufacturing capacity, marketing and distribution capabilities, and strategic capital.” .
  • “We estimate an aggregate reduction in manufacturing output of approximately 50% and 15% for 2026 and 2027… updating revenue guidance… to $20–$30 million and $100–$200 million.” — CFO/COO Matt Plavan .
  • “Two additional CapFormers… arrived in the United States… We continue to expect CapFormers three through six to complete FAT on a rolling basis through Q4 of 2025… CapFormers seven and eight in the second half of 2026.” .
  • “Tariff costs can significantly raise the cash outlay required for financed equipment… making debt financing… more expensive and potentially suboptimal.” — CFO/COO .

Q&A Highlights

  • Retail availability: Product on shelves with Power Hydration in California; additional brand announcements expected .
  • Competitive moat: Thermoforming PET sheet vs. injection/compression molding enables improved material properties, lighter weight, optical clarity, and recycled content—management believes this underpins commercially viable PET caps and superior unit economics, especially at larger formats .
  • Hordijk partnership: Seen as key EU manufacturing partner with PET extrusion capability to support scaling and mitigate protectionist trade dynamics; more partners likely as geographies expand .
  • NASDAQ compliance: 129 days into first 180-day grace period; potential second grace period contingent on plan, with reverse split as a backstop if organic recovery fails .

Estimates Context

  • S&P Global consensus for Q2 2025 appeared unavailable for EPS and revenue; as such, no beat/miss can be determined for the quarter. Model updates will need to reflect the company’s revised outlook (2026 revenue $20–$30M; 2027 revenue $100–$200M; run-rate Adjusted EBITDA breakeven in 2027) and the delayed FAT timeline .
  • Without consensus anchors, the stock narrative hinges on guidance reset magnitude, tariff headwinds, and the credibility/timing of the strategic review to unlock capacity and capital .
  • Values retrieved from S&P Global.

Key Takeaways for Investors

  • Commercial validation has begun: first caps on shelves and Berlin Packaging relationship de-risk initial adoption and broaden distribution reach .
  • The negative inflection is the guidance reset and delayed ramp: output shortfalls, 7–8 FAT pushed to 2H’26, and EBITDA timing shifted to 2027, which will likely drive downward estimate revisions and weigh on near-term sentiment .
  • Tariffs are now a central swing factor for capital intensity and financing; EU (15%) and Switzerland (39%) import tariffs elevate cash needs and complicate equipment debt—watch for further trade policy developments and geographic manufacturing shifts (e.g., Hordijk) .
  • Liquidity levers exist (A/R collection, land sale), and management continues to target non-dilutive financing, but tighter capital markets and higher cash requirements increase execution risk .
  • Strategic review could be a positive catalyst if it secures manufacturing access or strategic capital on attractive terms; additional customer disclosures and CSD qualification progress are near-term proof points .
  • For trading: focus on news around strategic partner announcements, FAT completions for lines 3–6, and tariff mitigation moves; for medium-term thesis, scaling manufacturing and achieving larger-format caps (potentially higher margins) are key .

Appendix: Additional Context From Prior Two Quarters

  • Q1 2025: $5.4M revenue; Adjusted EBITDA $(11.0)M; reiterated run-rate Adjusted EBITDA positive by end of 2026 and 2026 revenue $50–$70M (both later reset in Q2); 20+ companies in qualification; pilot shelves in Q3’25 .
  • Q4 2024: $9.2M revenue; Adjusted EBITDA $(11.1)M; line 1 commercial production commenced; eight CapFormers targeted by end of 2025; 2026 revenue previously $110–$140M (superseded by Q1/Q2 updates) .