Comstock Inc. (LODE)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 marked an inflection in Metals: invoiced billings reached $1.34M (with $0.60M deferred), driven by the new RWE Clean Energy MSA and 4M+ lbs of intake; management raised 2025 Metals billable revenue guidance to over $3M, up from ~$2.5M prior .
• Fuels advanced strategic financing and commercialization: Marathon contributed $13M of payment‑in‑kind assets (Madison facility) plus $1M cash commitment tied to the Series A, with the Series A targeted at ≥$50M and a $700M valuation cap for Fuels; Oklahoma allocated $152M project activity bonds .
• Q1 GAAP results reflect scale-up spend: revenues rose to $0.79M (+85% YoY), but net loss widened to $9.09M on R&D and demo under‑absorption; Metals P&L recognized $0.75M revenue with $0.76M deferred, given installation work and three-shift ramp .
• Certification and quality signals: Comstock Metals became the first solar panel recycler in North America certified to R2v3/RIOS Appendix G (zero‑landfill, 100% materials reuse), strengthening customer adoption and pricing power .
• Near‑term catalysts: storage permit (Q2), state permit for industry-scale facility (Q4), additional MSAs, Fuels Series A closing and offtake agreement with Marathon; potential Fuels spin‑out to unlock value .

What Went Well and What Went Wrong

What Went Well

• Metals commercialization: invoiced $1.34M vs “just over $350k” in Q4; recognized ~$0.75M in Q1 P&L with ~$0.75M deferred, evidencing robust demand and billing momentum .
• Strategic partnerships: RWE Clean Energy MSA designates Comstock Metals a preferred partner; 4M+ lbs of materials received; intake and decommissioning revenues rising .
• Quality moat: first‑ever R2v3/RIOS Appendix G certification validates zero‑landfill, 100% commodity‑ready outputs (glass, aluminum, fines), enhancing compliance and customer trust—“100% zero landfill solution” .

What Went Wrong

• Loss widened: net loss of $9.09M (vs $6.92M prior year) on higher R&D ($3.30M, including $1.49M non‑cash stock consideration to AST) and demo facility under‑utilization during air‑quality system installs .
• Gross margin negative: COGS exceeded revenue as the demo facility is too small to absorb scale‑up investment; management expects robust cash margins at industry scale .
• Financing overhang: reliance on the Kips Bay convertible note (remaining principal $4.35M after April‑May conversions), though management aims to transition away from convertibles post Series A .

Financial Results

Segment revenue breakdown:

KPIs and operating metrics:

Notes: Q1 recognized revenue reflects the installation of scrubbing/air-quality systems that shifted activity mix toward receiving/storage; management highlighted cash billings irrespective of P&L deferrals .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We are the only company in North America that is R2 certified… producing 100% commodity‑ready products wherein all parts of the panel… are fully recycled. 100% zero landfill, 100% materials sold, 100% materials reused.” — Corrado De Gasperis .
• “We closed on the strategic Series A investment with Marathon likely valuing [Fuels] at $700 million… we can now… produce up to 2 barrels of fuel per week [in Wisconsin].” — Corrado De Gasperis .
• “Solar panel recycling is a win‑win‑win… We congratulate Comstock Metals… one of our Preferred Recycling Partners.” — SEIA’s Evelyn Butler .
• “We expect permits… for the industry‑scale expansion to be approved by Q4 2025; commission by end of Q1 with first industry‑scale revenues in Q2.” — Corrado De Gasperis .
• “We will likely see the last of those convertible notes exit during the second quarter… good riddance.” — Corrado De Gasperis .

Q&A Highlights

• Metals timeline: Q2 county storage permit; Q3 financing and equipment orders; Q4 state permit; Q2 next year targeted for first industry-scale revenues .
• Fuels milestones: 2025 Series A ≥$50M, OK site selection, offtakes (incl. Marathon), international licenses; 2026 project capital placement; 2027 first facility completion targeted .
• Funding approach: Transitioning from convertibles to subsidiary/project-level equity and bonds; management target ~33M shares outstanding at spin‑off and favors long‑term equity partners .
• Team/alignment: Performance‑based subsidiary equity incentives being finalized to align operators and shareholders for the spin‑out and growth plans .
• Mining monetization: Increased inquiries amid higher gold/silver; options include sale, JV, or production—without distracting Metals/Fuels execution .

Estimates Context

• We queried S&P Global for Wall Street consensus (EPS, revenue, EBITDA) for Q3 2024, Q4 2024, and Q1 2025; consensus was unavailable for LODE, so comparisons to estimates cannot be provided at this time [Values retrieved from S&P Global].

Key Takeaways for Investors

• Metals demand is real and scaling: certified zero‑landfill capability and RWE MSA underpin pricing and volume; billed revenues are outpacing P&L recognition as intake ramps with permits pending (near‑term revenue conversion) .
• Guidance raised: 2025 Metals billable revenue now “over $3M” (vs ~$2.5M prior) with industry‑scale capex ($6M plus storage) and state permit targeted for Q4—positioning for margin uplift in 2026 .
• Fuels valuation and financing: Marathon’s tranche (with $700M cap) and targeted Series A ≥$50M, plus $152M bonds, de‑risk commercialization steps; the spin‑out aims to unlock value and relieve dilution pressure at the parent .
• Near‑term catalysts: Q2 storage permit; Series A first tranche; OK site selection and offtakes; additional MSAs; state permit Q4—each event enhances visibility on revenue conversion and asset value .
• Risk monitor: R&D and scale‑up costs will keep GAAP losses elevated near‑term; watch execution on permits, MSAs, Series A close, and conversion of deferred revenue to recognized revenue .
• Trading lens: Event‑driven setup—permit approvals, Series A pricing, and spin‑out terms are likely stock catalysts; Metals MSA additions and deferred revenue recognition may support momentum .