Origin Materials, Inc. Reports First Quarter 2025 Financial and Operational Results, Highlights Strategic Progress and Future Growth Plans
Origin Materials, Inc. (Nasdaq: ORGN, ORGNW), a carbon-negative materials innovation company on a mission to help the world transition to sustainable materials, has released its financial and operational results for the first quarter ending March 31, 2025. The company continues to navigate a complex global environment while making substantial progress in commercializing its PET cap technology and enhancing its manufacturing capabilities.
Strong Customer Interest and Strategic Partnerships
CEO and Co-Founder John Bissell emphasized the strength of demand for Origin’s PET (polyethylene terephthalate) cap technology. Over 20 companies are currently qualifying or preparing to qualify the company’s PET caps, including six Fortune 500 corporations. These firms represent some of the world’s most influential consumer brands.
Among the highlights, Origin signed a major strategic customer agreement with a multibillion-dollar packaging company to co-develop large format PET closures targeted at the ready-to-drink beverage, wine, and spirits markets. While further details are expected in future communications, the partnership represents a significant milestone for commercial scaling.
Challenges in Qualification and Tariff Impact
Despite robust customer interest, Origin encountered two key challenges during the quarter. First, product qualification timelines are extending beyond initial expectations. This has resulted in a delay in commercial-scale revenue generation from the PET caps by one to three quarters. However, the company maintains that its long-term revenue trajectory remains intact. Origin now projects revenues of $50 million to $70 million in 2026 and $150 million to $210 million in 2027.
The second challenge involves global supply chain uncertainty due to tariffs, especially a projected 10% tariff on equipment sourced from Europe. This has impacted CapFormer deployment timelines and has necessitated adjustments in the company’s strategy.
Optimism Amid Macroeconomic Pressures
Despite these headwinds, Origin remains focused on factors within its control. Bissell noted that customer engagement is strong, with over 65 new inquiries in just the past six weeks. The company’s clients are actively participating in the cap qualification process. Origin’s mission to accelerate the global transition to sustainable materials remains unchanged, and the company is confident in the market potential of its technology.
Business Highlights and Strategic Developments
Origin’s first quarter revenue totaled $5.4 million, primarily generated through its supply chain activation program. Based on evolving business conditions, the company shared the following strategic and operational updates:
- Major Strategic Agreement: The recently signed agreement with a leading packaging company is focused on developing PET closures for beverages and alcohol. Joint communications will be finalized in upcoming months.
- Revenue and Profitability Guidance: While the timing of revenue realization has shifted slightly, the company reiterates its expectation of being run-rate Adjusted EBITDA positive by the end of 2026. The financial outlook remains robust with anticipated revenues of up to $210 million by 2027.
- CapFormer Deployment Schedule:
- CapFormer lines 2 through 4 are currently in fabrication.
- Subsystem components are already secured.
- Factory Acceptance Testing (FAT) for these lines is set for Q2 and Q3 2025.
- Lines 5 through 8 are projected to complete FAT by Q4 2025 and Q1 2026.
- Production for each line is expected to begin about three months after FAT.
- Pilot Launch on Schedule: The company confirms that its first pilot launch with PET closures is on track for Q3 2025. The closures have completed qualification for a new beverage brand and are pending bottling.
- Supply Chain Preparedness: Origin is investing in inventory strategies, proactive procurement of long lead-time materials, and multi-sourcing solutions to minimize disruptions in CapFormer production and deployment.
- Manufacturing Diversification: To mitigate tariff risks, Origin is adapting its deployment strategy to emphasize geographic diversity. This ensures flexibility and responsiveness to market demands across different regions.
- Technology Upgrades and Margin Improvement:
- The company has ordered its first two PET extruder units to improve in-house sheet production.
- These owned extruders are expected to enhance CapFormer line margins.
- CapFormer lines 2 and 3 are anticipated to double the throughput of line 1.
- Lines 4 and beyond may achieve triple the output of the first line.
- Unit Economics Remain Attractive: Even under existing tariff conditions, Origin’s business model remains viable. The average payback period for CapFormer lines is estimated at under 18 months, excluding optional margin-enhancing extruders.
- Future Financing Initiatives: To support manufacturing growth and maintain cash reserves, Origin is pursuing equipment financing for CapFormer lines 1 through 8 and is exploring corporate debt options in the second half of 2025.
Financial Overview for Q1 2025
- Cash Position: The company had $83.0 million in cash, cash equivalents, and marketable securities as of March 31, 2025.
- Revenue: Quarterly revenue was $5.4 million, down from $6.8 million in Q1 2024 due to a planned reduction in supply chain activation activities.
- Operating Expenses: Total operating expenses reached $32.7 million, a significant increase from $18.1 million in the previous year. This increase was mainly due to a $16.6 million non-cash impairment charge tied to a biomass conversion technology agreement. It was partially offset by a $2.5 million reduction in R&D spending.
- Net Loss: The net loss for the quarter stood at $26.4 million, compared to $13.9 million in Q1 2024. The increase reflects higher operating costs offset by a $2.1 million gain from changes in the fair value of warrant liabilities.
- Adjusted EBITDA: The company reported an Adjusted EBITDA loss of $11.0 million, slightly improved from a $12.9 million loss in the same quarter the prior year.
- Shares Outstanding: As of March 31, 2025, Origin had 149.5 million shares outstanding, including 3.0 million shares subject to forfeiture based on performance milestones.
For a detailed reconciliation of GAAP to non-GAAP results, including Adjusted EBITDA, refer to the financial tables at the end of the company’s official press release. Due to the complexity and variability of certain reconciling items such as stock-based compensation, Origin has not provided a forward-looking GAAP-to-non-GAAP reconciliation for Adjusted EBITDA guidance.
