Li-Cycle (LICY) Q3 2024 earnings summary

Executive summary

• Closed an upsized $475 million loan agreement with the U.S. Department of Energy to support the Rochester Hub project, marking a significant milestone and vote of confidence in the company's technology and role in the U.S. battery supply chain.

• Achieved 79% year-over-year revenue growth to $8.4 million in Q3 2024, with net profit of $56.5 million compared to a loss of $30.7 million in Q3 2023.

• Prioritized optimizing the Spoke network, focusing on Generation 3 Spokes in Arizona, Alabama, and Germany, while curtailing or closing less efficient operations in New York and Ontario.

• Secured 100% off-take agreement with Glencore for MHP production from the Rochester Hub and expanded commercial agreements with major EV OEMs.

• Implemented cash preservation initiatives, including workforce reduction and pausing or slowing operations at several Spokes and the Rochester Hub.

Financial highlights

• Q3 2024 revenue increased 79% year-over-year to $8.4 million, with nine-month revenue reaching $21.0 million.

• Net income for Q3 2024 was $56.5 million, compared to a net loss of $30.7 million in Q3 2023, driven by a $99.2 million fair value gain and cost reductions.

• SG&A expenses decreased 50% year-over-year to $12.9 million, reflecting restructuring and cost controls.

• Adjusted EBITDA loss improved to $21.7 million from $41.4 million in Q3 2023.

• Cash and cash equivalents stood at $32.2 million as of September 2024, down from $70.6 million at December 31, 2023.

Outlook and guidance

• Restart of Rochester Hub construction is contingent on securing a full funding package and meeting DOE loan conditions.

• Comprehensive review of the Hub project is nearing completion, with a formal updated final investment decision pending full financing.

• The company expects to continue reduced capital expenditures and paused or slowed Spoke operations until further financing is secured.

• Long-term fundamentals for battery recycling remain strong, supported by rising EV sales and government incentives like the U.S. 45X tax credit.

• Exploring additional financing and strategic alternatives for general corporate purposes.