Origin Materials, Inc.

Thank you for standing by. This is the conference operator. Welcome to the Origin Materials fourth quarter and full year 2024 earnings call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. At this time, for opening remarks and introduction, I would like to turn the call over to Ryan Smith, co-founder and chief product officer. Please go ahead.

Thank you. Good afternoon, and thank you for joining us, everyone. Speaking first today is Origin's CEO and co-founder, John Bissell, followed by CFO and COO, Matt Plavin. Then we will open the call to questions from analysts and discuss questions submitted as part of this quarter's Ask Origin campaign. Ahead of this call, Origin has issued its 2024 fourth quarter and full year press release and presentation. These can be found on the investor relations section of our website at originmaterials.com. Please note that during our discussion today, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views as of today, should not be relied upon as representative about views of any subsequent date. And we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion on the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our annual report on Form 10-K filed today. During today's call, we will discuss non-GAAP financial measures which we believe are useful as supplemental measures of origin materials performance. These non-GAAP measures should be considered in addition to and not as substitutes for or in isolation from GAAP results. You will find additional disclosures regarding the non-GAAP financial measures discussed on today's call in our press release issued this afternoon and our filings with the SEC, which will be posted to our website. The webcast of this call will also be available on the investor relations section of our company website. With that, I'll turn the call over to John.

Thank you, Ryan. Good afternoon. This quarter was both a success and an inflection point for Origin. We stood up our first CAPS manufacturing line, turned on commercial production in February, and are now shipping product to a growing list of customers for qualification as we continue our transformation into a technology-driven manufacturing organization on the path to substantial revenue and healthy margins. We are solving a really big problem. A bottle cap made from PET that fits in the palm of your hand may seem like a small thing, but it's the key to a $65 billion market that has been seeking the solution we offer for decades. For our customers, this solution means better performing products with extended shelf life. It means sustainability. It means product circularity and a recycling that really works. For everyday people, It means starting to fix a broken recycling system by simplifying it, greenlining it, and making recycled products more valuable. The solution has been out of reach. Nobody could solve the technology problem. Nobody could even see the problem in a way that would lead to a solution that works. Until now. In February 2025, we were pleased to announce we'd begun commercial production from the world's first commercial PET cap manufacturing line. CatFarmer Line 1 is up and running. To date, this is arguably our most important milestone, as it is tangible proof of the CatFarmer system's commercial scale production capability. Proof that is critical to our stakeholders, strategic partners, financiers, customers, and investors. We want to acknowledge the perseverance, dedication, and sacrifice made by the Origin team to achieve this historic first. This week, we released a video showing the Capformer system operating in our Reed City, Michigan Manufacturing Center. I encourage everyone to watch that video as it showcases the Capformer in action and illustrates why we believe in this technology and the business it enables. We also announced that three new Capformer lines are nearing completion, and we expect them to finish factory acceptance testing during Q2 of this year. And we confirmed prior guidance that we expect to have eight cap former lines online by the end of 2025. We are now engaged in delivering caps for qualification, and we expect to have the first beverage products with origin caps on shelves in Q3 or perhaps as early as late Q2. From this point forward, continuous improvement is the rule. We have design modifications that we expect to implement both in future cap farmers and that we can use to retrofit existing cap farmers. We expect those modifications to substantially increase cap throughput per line and to enable new cap design features and add new formats to our product catalog. Naturally, increased throughput should equate to even better unit economics per line. To help quantify the extent of these improvements, we anticipate the output for Capformer Line 8 will be roughly double that of Capformer Line 1, with additional upgrades planned for lines thereafter. And although we expect Capformer Line 1 will produce tens of millions of 1881 caps every month, it's important to keep in mind that our PET cap technology is a platform, which means it's a base for growing many different product formats and SKUs for many different applications. We started with the 1881 format because it's a massive market. Last year, we announced a tethered version of it, designed to keep the cap connected to the bottle and comply with cap tethering mandates in the EU. In time, we're looking forward to announcing a variety of cap types, including not only beverage caps, but food container closures and more. We expect to introduce our first larger format cap in 2026, and we expect that larger cap formats will drive better margins because our manufacturing technology is particularly advantaged over the incumbent technology for making large caps. Today, caps are made by injection molding. With injection molding, the bigger the cap, the longer it takes to inject plastic resin into the circular mold. We make caps differently. Part of our technology advantage is that we use thermoforming. Instead of injecting molten plastic, we form it out of a hot sheet, similar to stamping the caps out. So no matter how wide the cap, it doesn't take extra time to fill the diameter of the mold. In this industry, production economics is about speed, and our technology is capable of going faster. But cap economics is also about weight. PET is a more dense material than current cap materials, but it's also stronger. We take advantage of that strength in a way that injection molding cannot, because our cap forming technology excels at making thinner caps. Stronger materials enable thinner caps, and thinner caps use less material. That's a fundamental advantage for Urgent, capturing more and more value the larger the format. Another advantage of our platform is flexibility. Our cap formers can be retrofitted with new molds reasonably quickly. That means we can make different products from the same line and that we can retrofit existing lines with higher throughput technology, enabling us to be nimble both in responding to customer demand moving forward and in deploying new technology across lines that are already operating. Lastly, eight lines is just the beginning. Our intention is to stand up additional Origin Capformer lines in 2026 at a roughly similar pace to our deployment in 2025. accelerating as capital allows. Now, let me turn to demand. Demand is incredibly strong, and we anticipate it will only grow stronger. Multiple customers have signed MOUs to purchase our caps. With our first production line up and running, we are now in the process of delivering caps to a growing list of customers for qualification, with many additional customers in our pipeline. Despite not having publicly named our customers, we continue to accumulate substantial and accelerating demand for our caps. And there are beneficial reasons for our discretion, as we'll discuss later. The reality is that we are increasingly in the enviable position of having indicative demand that significantly exceeds our fulfillment capability for several years to come. Our bigger challenge is to bring supply online as fast as practical to better meet demand and gain market share. We are assembling a melange of customers and partners that we believe balances volume, margin, deployment flexibility, technical expertise, credibility, and ability to grow origin. And all of these different customer types are currently represented in our pipeline. We found the CAPS market to be quite dynamic with a variety of customer types. This market dynamism means CAP pricing is, pleasantly, more variable than we had expected when we began commercializing this technology. As the only commercial producer of PET caps currently in the market, we are naturally aiming to price to the differentiated and unique value of our product. Volumes and expected delivery rates are different for each customer. Some customers are flexible on delivery times, others are not. Some customers require large inventory build, multiple months of production from a single line, before they will switch to a new cap type. while others need smaller shipments and consequently require less inventory. We are slotting customer deliveries in a way that satisfies customers' needs while allowing us to continue to onboard new customers and set realistic expectations around delivery times as well. We, of course, aim for our near-term tactical decisions to enable our long-term strategy. Beyond the production lines we plan to own and either operate or contract for operation, we continue to lay the groundwork for partnerships, such as licensing, in which we can supply technology to further enable the scale-up of overall PET cap supply. Standing up our first production line supports that effort. We now have a proven intellectual property protected technology platform. We have demand from large companies for the technology, and we have the ability to ramp deployment of our catformer lines to meet the massive supply needs of large customers. We're also pleased to share today that we've successfully expanded our catformer manufacturing relationships to ensure redundancy and additional capacity. All of these efforts are strategic for expanding supply generally, including in support of potential partnerships. We look forward to revealing the names of the customers who have already signed MOUs and of those in our pipeline, but our customers generally want to keep the time between an announcement and their product with our caps on shelves as short as possible. With that in mind, we do anticipate announcing some initial customer names in the coming weeks or months. In summary, market interest is strong and increasing, our sales pipeline is growing, and more customers are progressing through the pipeline as time goes on. We continue to believe we can sell every cap we make, and we are just getting started in pursuing the massive opportunity presented by the $65 billion caps and closures market. And now I'll hand it over to Matt for a review of the impact of these commercial dynamics on our expected near-term financial performance.