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Ramaco Resources, Inc. (METC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue rose 14% sequentially to $153.0M, while Class A diluted EPS was $(0.29) and net loss was $(14.0)M; Adjusted EBITDA was $9.0M as pricing headwinds offset production records .
  • Versus Wall Street, revenue materially beat consensus, EPS missed, and EBITDA came in below expectations; estimates likely need to reflect weaker export netbacks and higher SG&A tied to rare earth acceleration (see Estimates Context) *.
  • Guidance was trimmed to the low end for FY production/sales (ranges unchanged) and SG&A was raised to $39–$43M; Q3 2025 tons sold guided to 900–950K as some July exports were pulled into June .
  • Strategic catalysts: Brook Mine rare earths timeline pulled forward to 2027; DOE lab engagement intensified; five‑year permit renewal secured; liquidity improved to ~$105M post-quarter with new 2030 notes at 8.25% .

What Went Well and What Went Wrong

What Went Well

  • Second consecutive production record: 999K tons (+1% QoQ, +11% YoY); Elk Creek hit 688K (+35% YoY), underpinning first‑quartile cost position .
  • Per‑ton economics resilient: realized non‑GAAP revenue/ton up 1% QoQ to $123; Elk Creek costs in low $90s/ton; broader cost discipline maintained despite market softness .
  • Rare earths milestones: timeline accelerated to 2027 commercial oxide production, five‑year mining permit renewal, DOE multi‑lab support; CEO: “an inflection point in the transition of Ramaco becoming a dual platform company” .

What Went Wrong

  • Pricing headwinds: U.S. met coal indices down ~20% YoY reduced revenue/ton to $123 (−14% YoY), compressing cash margin/ton to $20 (from $35 YoY) .
  • Profitability: operating loss $(13.8)M and net loss $(14.0)M widened QoQ; Class A diluted EPS fell to $(0.29) (vs $(0.19) in Q1) as higher costs and SG&A weighed on results .
  • Selective idling & guidance trim: Rockhouse Eagle mine idled; FY production/sales targeted to low end to avoid loss‑making spot exports, reflecting continued export price pressure .

Financial Results

Headline financials vs prior periods

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$155.315 $134.656 $152.959
Operating Income ($USD Millions)$5.415 $(12.022) $(13.844)
Net Income ($USD Millions)$5.541 $(9.457) $(13.974)
Diluted EPS – Class A ($USD)$0.08 $(0.19) $(0.29)
Adjusted EBITDA ($USD Millions)$28.799 $9.788 $9.005

Key KPIs (tons sold and per‑ton economics)

KPIQ2 2024Q1 2025Q2 2025
Tons Sold (000s)915 946 1,079
Avg Revenue per Ton ($/ton, non‑GAAP FOB)$143 $122 $123
Avg Cash Cost per Ton ($/ton, non‑GAAP FOB)$108 $98 $103
Avg Cash Margin per Ton ($/ton, non‑GAAP FOB)$35 $24 $20
Capital Expenditures ($USD Thousands)$21,405 $20,312 $15,149

Segment production breakdown

SegmentQ2 2024 (tons)Q1 2025 (tons)Q2 2025 (tons)
Elk Creek Complex508,000 687,000 688,000
Berwind/Knox Creek/Maben393,000 302,000 311,000
Total Company Production901,000 989,000 999,000

Estimates vs actuals (Wall Street consensus, S&P Global)

MetricQ2 2025 ConsensusQ2 2025 Actual
Primary EPS Consensus Mean ($)$(0.197)*$(0.29)
Revenue Consensus Mean ($)$131.546M*$152.959M
EBITDA Consensus Mean ($)$11.864M*$3.596M*

Values retrieved from S&P Global.
Note: Company-reported EBITDA was $3.852M and Adjusted EBITDA was $9.005M; S&P may reflect standard EBITDA definitions rather than company’s non‑GAAP adjustments .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company Production (tons)FY 20253.9–4.3M 3.9–4.3M (low end targeted) Maintained range; bias to low end
Sales (tons)FY 20254.1–4.5M 4.1–4.5M (low end targeted) Maintained range; bias to low end
Cash Costs per Ton (non‑GAAP)FY 2025$96–$102 $96–$102 Maintained
SG&A (cash) ($)FY 2025$36–$40M $39–$43M Raised
DD&A ($)FY 2025$71–$76M $71–$76M Maintained
Interest Expense ($)FY 2025$8–$9M $8–$9M Maintained
Effective Tax Rate (%)FY 202525–30% 25–30% Maintained
Idle Mine & Other ($)FY 2025$1–$2M $1–$2M Maintained
Tons SoldQ3 2025N/A900K–950K New
Dividend – Class AQ3 2025Paid in Class B shares (Q2) Suspended by Board (July) Lowered

Rationale: shift to low‑end targets due to weak export spot pricing, selective production reductions (e.g., Eagle mine idled), and SG&A uplift to accelerate Brook Mine commercialization .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Rare earths development timeline & permittingPlan: pilot build in late summer; commercial oxides by 2028 . Q1: commence large‑scale mining in June; pilot in Fall; commercial oxides H2 2028 .Timeline pulled forward to 2027; DOE multi‑lab engagement; five‑year permit renewal; ribbon cutting with federal/state officials .Accelerating, de‑risking via government support
Met coal market/pricing outlookIndices down; margins resilient; expect supply cuts to tighten market . Q1: further declines; reduce guidance to avoid loss‑making spot .Chinese coking coal prices rebounded ~38% in July; cautious optimism; still trimming guidance to avoid negative margins .Tentative stabilization, still disciplined
Cost discipline & operationsQ4: cash cost $96/ton; trend down . Q1: $98/ton; first quartile .$103/ton; Elk Creek low $90s; Eagle mine idled to improve 2H cost profile .Stable low costs; selective idling
Sales mix (domestic vs export)2025 book 3.5M tons; 1.6M domestic fixed at $152 . Q1: 3.7M; 1.6M domestic fixed $152; 0.6M seaborne fixed $111 .3.9M committed; 1.6M domestic fixed $152; 1.3M seaborne fixed $109; 1.0M index .More fixed export; slight domestic share uptick
Financing & liquidityRecord YE liquidity $137.8M . Q1: liquidity $118.4M .Liquidity $87.3M at 6/30 and ~$105M on 7/31 post 2030 notes; redemption of 2026 notes .Proactive balance sheet actions
Policy & regulatoryExpected tariff impacts; industry supply rationalization . Q1: SG&A higher from Chubb litigation .45X tax credit (2.5%) for met coal in 2026; DOE/NEDC engagement; potential strategic reserve concept discussed .Positive policy tailwinds; SG&A up near term

Management Commentary

  • CEO on dual‑platform strategy: “This marked a historic milestone… an inflection point in the transition of Ramaco becoming a dual platform company… rare earth and critical minerals oxides, as well as being a leading metallurgical coal producer” .
  • Market discipline: “We… refuse to sell tons at a loss into a saturated market” .
  • Macro signs: “Chinese domestic coking coal prices have rebounded approximately 38% in July… taken together, these factors point to a gradually rebalancing market… cautiously optimistic” .
  • Rare earths opportunity: PEA indicates NPV8 $1.197B, IRR 38%, initial capex $473M; timeline accelerated to 2027 .
  • CFO on liquidity and leverage: “Liquidity… more than $87M on June 30… as of July 31st… $105M… net debt to adjusted EBITDA a little over one times” .

Q&A Highlights

  • Sales mix: “We’re roughly 2/3 seaborne, 1/3 domestic… maybe closer to 35% [domestic]” .
  • 45X tax credit benefit: “In that kind of $15 million a year range on EBITDA… best estimate” .
  • Asia spot netbacks: “Pricing today… sub $100 back to the mines… we’re not really in the spot market right now” .
  • Government support mechanism: “Template like MP Materials… need a level playing field… throughput agreements and price supports… potential national critical mineral strategic reserve” .
  • Scandium demand: “Boeing and Airbus alone could use up to 100–150 tons/year… Western source would boost adoption” .

Estimates Context

  • Q2 2025 comparison: Revenue beat ($153.0M actual vs ~$131.5M consensus); EPS missed (−$0.29 actual vs −$0.20 consensus); EBITDA under consensus ($3.6M vs ~$11.9M) *.
  • Drivers vs consensus: stronger volumes and domestic mix lifted revenue/ton; EPS/EBITDA pressured by higher cash costs ($103/ton) and SG&A uplift for rare earth acceleration .
  • Implications: Street models likely need lower 2H export netbacks, incorporate SG&A raise ($39–$43M), and reflect selective production cuts to protect margins .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Actionable setup: Revenue momentum with disciplined volume management; the company will forgo low‑margin spot exports and bias FY output to the low end to protect cash margins .
  • Near‑term trading: Expect lighter Q3 volumes (900–950K tons) after shipments pulled into June; monitor Chinese met coal prices and domestic fixed‑price negotiations for pricing support .
  • Margin trajectory: Idling the Eagle mine and cost control at Elk Creek (low $90s/ton) should aid 2H per‑ton margins if export indices stabilize .
  • Balance sheet: Post‑quarter 2030 notes increase liquidity to ~$105M and retire higher‑cost 2026 notes, improving flexibility ahead of rare earth capex needs .
  • Structural catalyst: Rare earths timeline acceleration (commercial oxides in 2027), DOE engagement, and five‑year permit underpin re‑rating potential as dual‑platform critical minerals franchise scales .
  • Policy tailwinds: 45X tax credit (2.5%) starting 2026 provides EBITDA uplift; monitor further federal support (e.g., strategic reserve/offtake constructs) .
  • Estimate risk: Street likely revises EBITDA and SG&A down/up respectively; revenue beats may persist if domestic mix remains favorable *.
* S&P Global consensus and actual data used where noted; company financials cited from press release/8‑K and earnings call.