Breaking Down Loop Industries, Inc. (LOOP) Financial Health: Key Insights for Investors

You're looking at Loop Industries, Inc. (LOOP) because the promise of depolymerization-turning old plastic into virgin-quality material-is compelling, but honestly, the financials show this is still a high-wire commercialization play, not a proven business model yet. The direct takeaway is this: the company's financial health is entirely dependent on its ability to execute on its licensing and joint venture strategy, as evidenced by the fiscal year 2025 (FY2025) results which reported a net loss of over $15.1 million, despite a significant revenue spike to $10.89 million, which was almost entirely driven by a single $10.4 million licensing fee from Reed Société Générale Group. That cash infusion is crucial, but as of February 28, 2025, the company had only $13 million in cash on the balance sheet, which is a tight number for a business with major capital expenditure plans like the India joint venture with Ester Industries Ltd, a project expected to cost around $176 million. The near-term risk is clear: the burn rate is high, and while analysts see a path to breakeven by 2028, you defintely have to track the progress of their Infinite Loop facility construction milestones and the associated engineering revenue to see if this technology play can turn into a sustainable profit engine.

Revenue Analysis

You need a clear picture of where Loop Industries, Inc. (LOOP) is actually making money, because the fiscal year 2025 (FY 2025) results show a fundamental shift in their business model. The direct takeaway is that the company's revenue exploded by over 7,000%, but this massive growth is nearly all from one-time licensing fees, not product sales.

For the fiscal year ended February 28, 2025, Loop Industries, Inc. reported total annual revenue of $10.89 million. This figure is a dramatic jump from the prior year's revenue of just $153 thousand. Honestly, that's a year-over-year revenue growth rate of 7,016.99%. That kind of number is defintely a flag that something big changed, not just that sales improved incrementally.

The core of this change is a pivot from a pure-play product sales model to a technology licensing model. In FY 2024, the revenue was almost entirely from sales of Loop™ PET resin. In FY 2025, the picture is completely different. Here's the quick math on the breakdown:

• Licensing Revenue: $10.395 million (95.4% of total revenue).
• Engineering Fees: $368 thousand (3.4% of total revenue).
• PET Resin Sales: $126 thousand (1.2% of total revenue).

The single most significant change is the $10.395 million in licensing revenue. This came from an up-front royalty payment received from Reed Societe Generale Group for the right to build one Infinite Loop™ facility in Europe. This is a crucial distinction: it's not recurring revenue from a fully operational facility, but a one-time payment for the technology license itself. This is a very different revenue quality than steady product sales.

The $368 thousand in engineering fees is also a new, albeit smaller, revenue stream. These fees relate to the engineering services agreement with the India joint venture, Ester Loop Infinite Technologies (ELITe). This segment contribution indicates that the company is starting to monetize its expertise and technology deployment through its global partnerships. What this estimate hides, though, is that the future of this revenue stream is tied to the successful groundbreaking and construction of these new facilities.

For a detailed look at the financial health beyond just the top line, you should check out the full post: Breaking Down Loop Industries, Inc. (LOOP) Financial Health: Key Insights for Investors.

To summarize the major revenue streams for FY 2025:

The action here is clear: don't confuse a massive one-time licensing fee with sustainable, recurring sales growth. Your next step should be to project how many new licenses Loop Industries, Inc. would need to sell in FY 2026 just to maintain this revenue level, plus what the actual, recurring product sales from their facilities are expected to be.

Profitability Metrics

You're looking for a clear picture of Loop Industries, Inc.'s (LOOP) financial health, and the profitability metrics for the 2025 fiscal year (FY2025, ended February 28, 2025) tell a story of a company in a capital-intensive, pre-commercial scale-up phase. The headline numbers are dramatically skewed by a single, non-recurring event, so we need to look past the surface.

The company's statutory profitability metrics for FY2025 show a significant loss, but the primary driver of revenue was a one-time technology licensing fee, not core product sales. Total revenue for FY2025 was $10.889 million [cite: 13 (from step 1)], which is a massive jump from the prior year, but $10.395 million of that came from the up-front royalty for a European technology license to Reed Societe Generale Group [cite: 13 (from step 1)].

Here's the quick math on the statutory margins, which include this licensing revenue:

• Gross Profit Margin: Approximately 100.00%.
• Operating Profit Margin: Approximately -13.35%.
• Net Profit Margin: Approximately -138.28%.

A 100% Gross Profit Margin is defintely not sustainable for a manufacturing business. What this estimate hides is that the revenue is mostly high-margin licensing, which has minimal Cost of Goods Sold (COGS), making the Gross Profit nearly equal to the revenue from that transaction. The core operational revenue from Loop™ PET resin sales for the full year was only $126 thousand [cite: 13 (from step 1)].

Operational Efficiency and Cost Management

The core challenge for Loop Industries, Inc. remains its high operational burn rate as it develops its technology and builds out its first commercial facilities. The negative operating margin of -13.35% (Trailing Twelve Months, or TTM, as of August 31, 2025) shows that even with the benefit of the large licensing fee, the company's operating expenses still outstrip its total revenue.

The Net Loss for the full FY2025 was $15.057 million [cite: 10 (from step 1)]. This loss is a clear reflection of the heavy investment phase, particularly in Research and Development (R&D) and General and Administrative (G&A) expenses. For example, the net loss for Q3 FY2025 spiked to $11.912 million [cite: 11 (from step 1)] due to a significant, non-cash $8.460 million equipment impairment charge following the termination of a joint venture in South Korea [cite: 12 (from step 1)]. This is a one-time hit, but it shows the risks of early-stage commercialization efforts.

Management is working to control cash burn. They project a prospective run rate for cash expenses of approximately $1.0 million per month for the balance of fiscal 2025, excluding project costs [cite: 4 (from step 1)]. That's a clear action item, but it still means a substantial annual cash outflow.

Profitability Trends and Industry Comparison

The trend in profitability is volatile, moving from a net loss in Q3 FY2025 of $11.912 million to a net income of $6.882 million in Q4 FY2025 [cite: 13 (from step 1)], solely because the Q4 result included the $10.4 million licensing payment. This is not organic, recurring profitability.

Compared to the broader industry, Loop Industries, Inc. is an outlier in terms of profitability, but that's typical for a technology company focused on scaling up its patented depolymerization (chemical recycling) process.

• The US chemical recycling market is a high-growth area, projected to reach $2,978.9 million by 2030, growing at a 9.3% Compound Annual Growth Rate (CAGR) from 2025.
• Most companies in this advanced recycling space are still pre-scale, meaning they have high capital costs and fixed costs, which naturally leads to negative operating and net margins.
• For context, an established peer in the waste management and recycling sector, Felix Industries, reported a Profit After Tax (PAT) margin of 25.00% in FY2025, but this is a different business model (waste-water and e-waste recycling) and scale.

The opportunity for Loop Industries, Inc. is to translate its high-margin licensing revenue and its technology into a solid gross margin once the Infinite Loop™ facilities in India and Europe are operational. Until then, investors must focus on the cash runway and the milestones for the India project, which is targeting ground-breaking in H1 CY2025 [cite: 1 (from step 1)]. You can read more about the long-term vision in the Mission Statement, Vision, & Core Values of Loop Industries, Inc. (LOOP).

Debt vs. Equity Structure

Loop Industries, Inc. (LOOP) presents a unique, albeit high-risk, financing profile for a growth-stage technology company: its absolute debt level is remarkably low, but its equity base is currently in a deficit. This structure shows a deliberate choice to avoid traditional, high-principal debt in favor of equity and strategic partnership funding to finance its capital-intensive technology deployment.

You might look at the balance sheet and see a low debt load, which is true. As of the fiscal year ending February 28, 2025, Loop Industries' Total Debt stood at approximately $3.08 million USD. This is a very small figure for a company planning a $176 million manufacturing facility in India. The debt is primarily composed of long-term obligations, with the Long-Term Debt at about $2.77 million.

But here's the quick math on the risk: the company currently operates with a Shareholders' Deficit, meaning its total liabilities exceed its total assets. This situation is reflected in a reported Debt-to-Equity (D/E) ratio of approximately -57.2%. A negative D/E ratio is a major red flag, indicating that the company has negative shareholder equity (a deficit) and is essentially funding its operations and assets entirely through liabilities, although most of those liabilities are not interest-bearing debt.

To be fair, this profile is not uncommon for pre-revenue or early-commercialization clean technology firms that burn cash in the development phase. Still, the contrast is stark:

• Loop Industries' D/E (implied high/negative)
• Specialty Chemicals Industry Average D/E: ~0.65

The industry average suggests that for every dollar of equity, peers use about 65 cents of debt. Loop Industries is far removed from this norm, relying on equity and non-debt liabilities to bridge its funding gap.

The company's balancing act between debt and equity is heavily skewed toward equity funding and strategic partnerships. The most significant financing event in fiscal year 2025 was the December 2024 closing of a $20.8 million (€20 million) financing and technology licensing deal with Reed Societe Generale Group. This funding was structured as: Exploring Loop Industries, Inc. (LOOP) Investor Profile: Who's Buying and Why?

• $10.4 million (€10 million) from the issuance of Series B Convertible Preferred Stock.
• $10.4 million (€10 million) as an upfront payment for a technology license sale.

This issuance of preferred stock, which carries a 13% PIK (Payment-In-Kind) dividend and is convertible to common stock at $4.75 per share, is the primary method of capital infusion. It's a hybrid instrument, acting like equity to shore up the balance sheet but with debt-like fixed return expectations. The company is defintely prioritizing non-dilutive licensing revenue and preferred equity over traditional bank debt to fund its ambitious Infinite Loop™ facility rollouts.

Liquidity and Solvency

You need to know if Loop Industries, Inc. (LOOP) can cover its short-term bills, and honestly, the picture is one of strong ratios but a high cash burn rate-a classic growth-stage tension. The company's liquidity position at the end of fiscal year 2025 (February 28, 2025) looks solid on paper, but you have to dig into the cash flow to see the real story.

Current and Quick Ratios: A Strong Buffer

Loop Industries, Inc. (LOOP) maintains a healthy short-term liquidity buffer. The Current Ratio, which measures current assets against current liabilities, stood at a strong 3.50x for fiscal year 2025. This means the company had $3.50 in current assets for every dollar of current liabilities. The Quick Ratio (or acid-test ratio), which is even stricter as it excludes inventory, was almost as high at 3.44x.

A ratio above 1.0x is generally good, so these numbers suggest Loop Industries, Inc. (LOOP) can defintely meet its near-term obligations. Here's the quick math:

• Current Ratio (FY 2025): 3.50x
• Quick Ratio (FY 2025): 3.44x
• Action: These ratios are a clear strength, giving the company flexibility.

Working Capital and Cash Flow Trends

While the ratios are high, the working capital trends show the company is using cash to fund its operations and growth. The Current Ratio has actually tightened from a peak of 10.16x in fiscal year 2023, but the latest figure of 3.50x is still excellent. Working capital (current assets minus current liabilities) is being deployed, which is expected for a company in the commercialization phase.

For example, in the first quarter of fiscal year 2025 (Q1 FY 2025), the company reported working capital outflows of approximately $800,000. This reflects the timing of payments as the company ramps up its global projects. The available liquidity at the end of Q1 FY 2025 was $12.3 million.

Cash Flow Statements Overview: Financing is Key

The cash flow statement tells a story of a pre-profit company being sustained by strategic financing. Operating Cash Flow is still negative, with $3.1 million in cash used for operating activities in Q1 FY 2025. The good news is that management has been aggressively cutting the cash burn, with cash operating expenses down 46% year-over-year in Q1 FY 2025 to $2.6 million. They project a monthly run rate of around $800,000 to $900,000 for the rest of fiscal 2025.

The major cash flow event was in financing, which is crucial for a capital-intensive business. In December 2024 (Q4 FY 2025), Loop Industries, Inc. (LOOP) closed a deal with Reed Societe Generale Group, bringing in total cash proceeds of $20.8 million. This included $10.4 million from a technology license sale and $10.4 million from the issuance of Series B Convertible Preferred Stock. This inflow is the lifeblood right now.

Investing Cash Flow is about to turn into a major outflow. The new capital is earmarked for the Infinite Loop™ India project, a joint venture with Ester Industries Ltd. The total project cost is estimated at $176 million, with Loop's CapEx spend expected to start in the second quarter of 2025.

Near-Term Liquidity Concerns and Strengths

The primary liquidity strength is the high current and quick ratios, plus the recent $20.8 million cash injection. This capital is intended to cover the equity contribution for the India JV and operational cash needs. The main concern is the significant cash burn and the funding gap for the India facility, which was noted to be around $15 million as of Q1 FY 2025. The company is actively working to close this gap through government funding and engineering revenues. The tight balance sheet conditions, as noted by one analyst, mean that while they have cash, they need to be very careful with their spending to bridge the time until the new facilities are operational. This is a high-stakes, high-potential Breaking Down Loop Industries, Inc. (LOOP) Financial Health: Key Insights for Investors situation.

Valuation Analysis

You're looking at Loop Industries, Inc. (LOOP) and wondering if the market has it right, especially with its stock price sitting around the $1.02 mark as of late November 2025. The short answer is that traditional valuation metrics suggest the company is currently a speculative growth play, not a value stock. The market is pricing in significant future growth, which is why the stock is considered 'undervalued' by analysts, but its current financial ratios scream 'early stage' and 'high risk.'

Here's the quick math: Loop Industries, Inc. is a pre-profit company, meaning we can't use the standard Price-to-Earnings (P/E) ratio effectively. The company's trailing twelve-month (TTM) Earnings Per Share (EPS) is a loss of -$0.25, making the P/E ratio negative and not useful for comparison. Similarly, the Price-to-Book (P/B) ratio is often not provided for companies with this profile.

The more telling metric is the Enterprise Value-to-EBITDA (EV/EBITDA), which factors in debt and cash to give a clearer picture of the operational business value. As of the LTM fiscal data ending February 2025, Loop Industries, Inc.'s EV/EBITDA stands at a negative -3.4x. A negative multiple is a huge red flag; it simply means the company has negative EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which is a common trait for high-growth, pre-commercialization technology companies. What this estimate hides is the high burn rate needed to scale their depolymerization technology.

The stock price trend over the last 12 months reflects this risk-reward tension. The stock has underperformed the broader market, with a 52-week price change of -18.53%. The 52-week price range, from a low of $0.85 to a high of $2.29, shows intense volatility. Still, the current price is near the low end of that range, which is where the opportunity-and the risk-lies.

Since Loop Industries, Inc. is focused on scaling its technology and joint ventures, it does not pay a dividend. The dividend yield is 0%, and the payout ratio is 0.0%. All capital is being reinvested into the business, which is exactly what you want to see for a company in this growth stage. For a deeper dive into who is betting on this growth, check out Exploring Loop Industries, Inc. (LOOP) Investor Profile: Who's Buying and Why?

Despite the current operational losses, Wall Street analysts are surprisingly bullish. This is a classic case of valuing the future potential of a patented technology over today's balance sheet. Here's the consensus breakdown:

• Analyst Consensus: Moderate Buy
• Total Analysts: 2 Buy, 0 Hold, 0 Sell
• Average 12-Month Price Target: $4.55

The analyst price target range runs from a low of $3.00 to a high of $6.10. Based on the recent stock price of $1.02, the average target implies an upside potential of over 346%. This is a massive gap, suggesting analysts believe the company is defintely undervalued based on their discounted cash flow (DCF) models, which project significant revenue from their joint ventures in the coming years.

Action: Look past the negative P/E and EV/EBITDA for now. The key is to track their execution on the joint ventures, like the one with Reed or Ester Industries, as those are the milestones driving the $4.55 price target. If they hit those, the stock will move.

Risk Factors

You need to be clear-eyed about the risks with a technology-driven, pre-commercial revenue company like Loop Industries, Inc. (LOOP). The core takeaway is that the company is transitioning from a research and development (R&D) phase to an unproven industrial scale, creating significant execution and financial risk in the near term. The biggest challenge is converting technology validation into consistent commercial operation and revenue.

Operational and Execution Hurdles

The primary risk is execution, specifically the successful build-out and scaling of the Infinite Loop™ technology. The flagship project is the joint venture facility in Gujarat, India, with Ester Industries Ltd. This facility is planned for an annual production capacity of 70,000 tons of Loop branded PET resin and polyester fiber. While the technology works in small production runs, its operational consistency at this industrial volume is still unproven. Any delays in construction, which was expected to break ground in the second quarter of fiscal year 2025, could push back the anticipated 2027 start of commercial operations, impacting future revenue projections.

To be fair, Loop Industries, Inc. is mitigating this by using a joint venture and licensing model, which helps distribute the execution risk and reduces their direct capital exposure.

Financial Liquidity and Profitability Path

The financial risk is straightforward: Loop Industries, Inc. is a loss-making company that needs significant capital to complete its commercialization projects. For the full fiscal year 2025, analysts expected an Adjusted EBITDA loss of approximately $12.8 million on revenue of around $10.9 million, which included a key $10.4 million licensing payment from the European deal. This highlights the reliance on non-operating revenue. The net loss for Q3 fiscal year 2025 was $11.9 million, a significant widening from the $4.2 million loss in Q3 2023, partly due to a one-time $8.46 million equipment impairment charge from the terminated SK Geo Centric joint venture.

Here's the quick math on capital: as of February 28, 2025, the company had $13 million in cash and $15.4 million in total liquidity. However, they still face a $15 million funding gap for the India facility, which they plan to fill with future engineering and modularization revenues. Analysts don't expect the company to turn a profit until 2028, after a final projected loss in 2027. That's a long runway to finance.

• Funding gap for India facility: $15 million.
• Q3 FY2025 net loss: $11.9 million.
• Breakeven predicted: 2028.

External and Market Competition

The external risks are competitive and market-driven. While the recent multi-year offtake agreement with Nike validates the technology and signals strong market demand for textile-to-textile (T2T) recycling, the competition is real. Established players like Eastman offer immediate exposure through operational facilities, creating a competitive pressure point on Loop Industries, Inc., which is still pre-industrial scale. Furthermore, the company is dependent on sustained strong demand from the apparel and consumer packaging sectors, which can be volatile. Finally, like any international operation, navigating regulatory and operational challenges in markets like India, plus the general macroeconomic uncertainty, inflation, and foreign exchange fluctuations, adds a layer of risk. If you want to dive deeper into who is betting on this model, you should check out Exploring Loop Industries, Inc. (LOOP) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking at Loop Industries, Inc. (LOOP) and wondering if the recent strategic moves translate into a clear path to profitability. The short answer is that the company is executing a capital-light, geographically diversified strategy that maps near-term risks to significant long-term upside, mostly driven by its patented textile-to-textile (T2T) recycling technology.

For the fiscal year ending February 28, 2025, Loop Industries reported annual revenue of $10.89 million, a massive jump of 7,016.99% year-over-year, though this revenue base is still small as they commercialize. Here's the quick math: while the company is still losing money-analysts forecast a consensus EPS of -$0.28 for the fiscal year ending February 2026-the focus is on building out the high-margin licensing and joint venture (JV) model.

Strategic Initiatives and Market Expansion

Loop Industries is not building a single, massive plant; they are focused on a 'design one, build many' model, which allows for rapid, lower-cost deployment. This is a smart move to manage capital and execution risk. The key growth drivers are centered on Asia and Europe, where regulatory tailwinds and textile-industry demand are strongest.

• Infinite Loop™ India JV: The joint venture with Ester Industries Ltd. is the linchpin. Located in the Gujarat province, this facility is planned for a 70,000 tons per year capacity, with commercial operations anticipated to start in 2027.
• Cost Advantage: The India plant's projected capital expenditure (capex) of about $176 million is an estimated 45-50% lower than building a comparable facility in North America or Europe. Low-cost manufacturing in India will defintely make them competitive on pricing.
• European Licensing: A licensing deal with Reed Societe Generale Group, which included a €10 million upfront payment, accelerates deployment in Europe without Loop Industries carrying the full capital load.

The company projects a prospective run rate for cash expenses of approximately $1.0 million per month for the remainder of fiscal 2025, excluding project costs, which gives you a clear sense of their burn rate before the big facilities come online.

Product Innovations and Anchor Partnerships

The company's proprietary chemical recycling (depolymerization) technology is the core product innovation, but the market-facing product is the new brand, Twist™. Launched in July 2025, Twist™ is a circular polyester resin made entirely from textile waste, specifically engineered for the apparel industry.

The real validation for this T2T solution came in November 2025 with a multi-year offtake agreement with Nike, which will serve as the anchor customer for the 70,000-tonne India facility. This commitment, alongside a strategic alliance with Shinkong Synthetic Fibers and a partnership with Hyosung TNC to integrate the resin into their manufacturing lines, significantly de-risks the India project's initial sales.

What this estimate hides is the operational risk; the India facility is the first test of this technology at a full industrial scale. Still, the market signal from a major brand like Nike is clear: the demand for true circular polyester is firm.

For a deeper dive into the valuation and risk profile, you should check out the full post: Breaking Down Loop Industries, Inc. (LOOP) Financial Health: Key Insights for Investors.