Loop Industries (LOOP) Q2 2027 earnings review
Loop shrinks its India plant, but startup moves to 2029
Loop Industries shrank its planned India plant to need less money, and the plant's start moved out again. Cash costs fell by a third from a year ago, to $1.6 million. But total available liquidity was $1.9 million at the end of August, little more than the quarter's costs. Chief executive Daniel Solomita said the smaller plant keeps "regional feedstock availability and a lower-cost operating environment".
| Cash operating expenses | $1.6M $2.4M a year ago |
|---|---|
| Total available liquidity | $1.9M $3.6M three months ago |
| Net loss | $3.0M $3.2M a year ago |
| India plant outlook | Cut to 45,000 tonnes; startup 2029 70,000 tonnes, operational 2028 |
⚖️ Verdict: 🔴 Bearish
The story got worse, because the only project that can earn Loop money now starts a year later, and the company has not found its share of the money to build it. The good news: a smaller plant needs less capital, and cash costs keep falling. One caution: the lower cost is an intention until Toyo Engineering India delivers its estimate.
The question now is whether Loop can raise its share of the plant's equity before its own cash runs out. Either the Special Committee finds money on terms that keep the company's stake, or Loop cedes part of the venture to whoever funds it. The January results will show whether Toyo's estimate and a financing have arrived.
🐂 Bull Case
Cash Costs Fell by a Third Again
Loop measures its own running costs as cash operating expenses: research, development and administration, minus share-based pay. The Québec recycler has cut this figure from a year earlier for five quarters in a row, and in the quarter to August it fell to $1.6 million from $2.4 million.
- Insurance: $111,000, down from $423,000
- Research staff pay: $247,000, down from $597,000
- Professional fees: $416,000, down from $612,000
The cuts matter because the company has almost no revenue, so every dollar saved extends the time it has to raise money. But the quarterly saving is now smaller than one quarter's loss, so cost control alone cannot close the gap.
What to watch: cash operating expenses in the quarter to November, reported in January. A rise would mean the Special Committee's advisers are adding fees faster than Loop can cut elsewhere.
Positives this quarter didn't test
Three parts of the bull case got no new evidence in the results release, so each stands exactly where it stood three months ago.
- Europe: the plan three months ago had engineering revenue from the Schwarzheide project this fiscal year; all of this quarter's revenue came from the India venture, and Solomita mentioned Europe once, as "our advancing partnership in Europe".
- Gujarat site: no update on the land title or the state government memorandum; the release names only the engineering review.
- Non-dilutive funding: the Canadian NRC IRAP programme allows up to C$2.92 million through October 2027; the release does not say how much Loop has drawn.
🐻 Bear Case
Startup Moves to 2029 Despite Smaller Plant
Loop's only route to real revenue is the Infinite Loop India plant, a joint venture with Ester Industries that will turn waste polyester into new resin. The company says the smaller design brings "a more efficient capital-raising process and faster construction".
The dates say otherwise. Three months ago the plan had the plant operating in calendar 2028, and the October investor presentation still showed it "targeted for completion in late 2028". The release sets a later bar. It targets "construction completion by the end of 2028, with startup and commissioning scheduled for 2029", so by our math the first resin moved out by about a year.
This matters because the schedule has moved before. Construction was first due to start in 2025. Operations were due in 2027 before management moved them to 2028, and each time it called the schedule unchanged. A smaller plant can cost less, but it cannot start later and arrive faster at the same time.
What to watch: Toyo Engineering India's updated cost estimate and a construction start date, on the October 16 call or in the quarterly filing. A start date inside 2027 would be the first evidence that the 2028 completion can hold.
Cash Covers About One Quarter of Costs
Loop ended August with $836,000 of cash and $1.9 million of total available liquidity, which adds an undrawn credit line. By our math that covers about 1.2 quarters of cash operating expenses, and the half-year cash flow shows where the money went.
- Investment in the India venture: $737,000, all of it in the quarter by our math
- Credit facility draws: $1.4 million in the half
- Share sales at market: $452,000 net in the half
- Total liabilities: $20.5 million against $6.4 million of assets
Those sums are small next to Loop's share of the equity for the plant, which the release does not quantify. Lenders still have "term sheets under review from several financial institutions", and the Nike and Taro Plast contracts are "subject to the India facility becoming operational". The June letter of intent for up to 15,000 tonnes a year would cover a third of the smaller plant by our math.
A Special Committee formed in September is weighing "equity, debt, and non-dilutive options" to fund that stake. The release adds that "there can be no assurance that these sources will be sufficient to fund operations through commercial start-up"; three months earlier management expected them to be.
What to watch: the Special Committee's first announcement, and whether it arrives before the January results. A financing sized to Loop's share of the plant's equity, rather than to the next quarter's costs, is the reading that would move this case.
Risks this quarter didn't answer
Three standing concerns got nothing new in the release beyond what the balance sheet shows, so each stays on the list until the filing or the call adds detail.
- Series B preferred stock: $12.8 million, up $375,000 in the quarter as its dividend accrues in kind; the balance sheet carries it as a liability and its terms have not changed.
- Partner dependence: the release does not say whether Ester Industries agreed the rescale, or how the two partners will split the equity for the smaller plant.
- Finance leadership: no chief financial officer appears in the release for a third quarter; Spencer Hart was appointed to the role from January 2026.
Reported Loss Fell Far Less Than Cash Costs
Loop's headline cost measure excludes share-based pay, and this quarter shows why that matters. Cash operating expenses dropped by about a third from a year ago, but the net loss narrowed only 7%. Three items filled the gap.
- Share-based pay: $429,000, up from $280,000 a year ago
- Loop's share of the India venture's loss: $431,000, up from $43,000
- Interest and other financial expenses: $460,000, up from $419,000, including the dividend accruing on the preferred stock
This matters because the venture's loss and the preferred dividend both grow as the project advances and the preferred balance compounds, so the reported loss will not follow cash costs down. Share awards also add to the share count ahead of any equity raise.
What to watch: share-based pay in the quarter to November. A figure above this quarter's, while the company raises equity, would mean awards dilute existing holders on top of the raise.
👓 Other Themes
India Plant Rescaled to 45,000 Tonnes
Loop cut the planned first India plant to 45 kilotonnes of resin a year, from 70. That is a 36% reduction by our math, after an engineering review meant to "reduce the project's estimated capital requirement". Toyo Engineering India is finalising the new cost; the previous estimate was $165–170 million. A second, larger plant follows "the successful start-up of the initial facility".
New Chairman and a Special Committee
The board separated the chairman and chief executive roles on September 8, appointing Jeff Geygan, executive chairman of Global Value Investment Corporation, a shareholder "scaling its ownership toward at least 10%". The same month the board formed a Special Committee to secure Loop's equity for the India venture. Solomita, who owns about 45% of the shares, remains chief executive and a director.
Recycled-Content Rules Tighten in India and Europe
Loop's October presentation leans on three rules. India requires 40% recycled content in rigid PET packaging such as bottles from April 2026. The EU's producer-responsibility rules follow in 2028. California targets 50% recycled content by 2030. None of them is new this quarter, and none produces revenue for Loop until a plant runs.
💲 Other KPIs
Fell to $117,000 from $179,000 last quarter; a year ago the quarter had no revenue. All of it is engineering work for the India venture, which Loop half-owns. The work is billed at cost, so cost of services was $113,000 and the activity adds almost nothing to profit; it is the only revenue the company has.
Rose to $386,000 from $323,000 three months ago, the third rise in a row, but each rise is smaller than the last. Unearned revenue is cash the India venture has paid Loop for engineering work not yet delivered, so it is the nearest thing to a backlog. Growth from the previous quarter slowed to 19% from 38%.
Up 1.4% from a year ago, the same pace as last quarter, as Loop sells small amounts of stock at market and settles share awards. Shares outstanding reached 48.8 million at the end of August. Any raise large enough to fund the India equity would change this count far more than the drift so far.
🔮 Guidance
Cut. The first India plant will make 45,000 tonnes of resin a year instead of 70,000. That is a 36% reduction by our math. Loop says the smaller design lowers both the debt and the equity it must raise. It is the first change to the plant's size in the six quarterly statements since the venture was announced.
Later. Construction is now due to finish by the end of 2028, with startup in 2029. Three months ago the plan had the plant operating during 2028. Loop presents the smaller design as allowing "faster construction", but the start date moved later, not earlier. The second India plant follows the first one's start-up, so its date depends on this one.
Lower, amount not yet stated. Loop says the smaller plant "will directly lower the overall facility cost", and Toyo Engineering India is finishing the new estimate. By our math, if cost fell in step with capacity, the figure would be about $108 million from the middle of the old range. Plants rarely scale that way, so the real figure likely sits above that. This number sets Loop's equity need.
Weakened. Three months ago Loop expected capital raising and engineering revenue from India and Europe to fund it until the plant runs. The release now says the timing and amount of any financing and revenue are uncertain, and that there can be no assurance these sources will suffice. The Special Committee formed in September is the mechanism meant to close the gap.
Unchanged in sequence, vaguer in size. The second plant still follows the first, and Loop still calls it larger. Earlier statements sized the expansion at 100,000 tonnes, and the October presentation dates it to 2031. Because the first plant now starts in 2029, the second plant's 2031 date depends on a quick start-up of the first.
❓ Key Questions
What will the 45,000-tonne plant cost, and Loop's share?
Toyo Engineering India has not finished the estimate, and Loop has not said what share of the equity it must fund. The number decides how large a raise the Special Committee needs and how much dilution shareholders face.
How much of the smaller plant's output is under contract?
Nike's volume and the status of the June letter of intent for up to 15,000 tonnes a year are undisclosed. Lenders are still reviewing term sheets, and the share of output already sold is central to that review.
When will the Special Committee announce a financing?
Liquidity covers little more than one quarter of costs by our math, so the committee's timetable matters as much as its result. Any raise, bridge or non-dilutive award before the January results would show the process is moving.
Will Europe engineering revenue arrive this fiscal year?
Three months ago Loop expected engineering services revenue from the Schwarzheide project within the fiscal year ending February 2027. This quarter's revenue came only from India, and the release mentions Europe once, as "our advancing partnership in Europe".
Who is Loop's chief financial officer today?
Spencer Hart was appointed finance chief from January 2026, but no finance executive appears in the release or on the call notice for a third quarter. A company raising capital under going-concern doubt needs a named owner of its numbers.