Sign in
MM

MP Materials Corp. / DE (MP)·Q2 2025 Earnings Summary

Executive Summary

  • Revenue increased 84% year over year to $57.4M, while diluted loss per share improved to $(0.19); sequential revenue declined versus Q1 as MP halted concentrate sales and shifted mix toward separated NdPr products .
  • Magnetics segment ramp accelerated: $19.9M revenue and $8.1M segment Adjusted EBITDA, establishing profitable precursor metal production and positioning for commercial magnets by year-end .
  • NdPr oxide production hit a quarterly record at 597 MT (+119% YoY), with realized NdPr pricing up ~19% YoY; upstream REO production was the second-highest in company history at 13,145 MT .
  • Strategic catalysts: 10-year DoD NdPr price floor at $110/kg begins benefiting MP in Q4 with first cash likely in Q1, and a $500M long-term Apple partnership with $200M milestone prepayments and 2027 shipments of magnets from recycled feedstock .
  • Balance sheet and execution runway: management cited nearly $2B of cash post DoD preferred investment, heavy REE loan and recent equity raise; CapEx guidance for 2025 remains $150–$175M .

What Went Well and What Went Wrong

  • What Went Well

    • “Record NdPr oxide production and second-highest REO output in MP’s history,” reflecting successful midstream ramp and upstream optimization (Upstream 60K) .
    • Magnetics segment “began profitably ramping metal production” with $19.9M revenue and $8.1M Adjusted EBITDA; independence factory producing magnets on spec for EV traction motors ahead of year-end commercial launch .
    • Strategic agreements: DoD partnership with $110/kg NdPr price floor and minimum $140M EBITDA for 10X, plus Apple $500M recycled magnets contract and $200M prepayments—cornerstone deals to secure domestic supply chain .

  • What Went Wrong

    • Consolidated Adjusted EBITDA remained negative at $(12.5)M; net loss was $(30.9)M as utilization is still sub-scale and per-unit separated product costs are elevated during the ramp .
    • Concentrate revenue fell by $12.5M YoY on a 54% drop in REO sales volume due to ceasing shipments to China and redirecting REO to oxide/metal production, creating a temporary sequential revenue headwind .
    • SG&A increased from legal and headcount to support downstream expansion; depreciation up on capital assets placed into service; corporate costs widened, reflecting growth investments .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$60.986 $60.810 $57.393
Net Income ($USD Millions)$(22.342) $(22.648) $(30.872)
Diluted EPS ($USD)$(0.14) $(0.14) $(0.19)
Adjusted EBITDA ($USD Millions)$(10.707) $(2.696) $(12.535)
Adjusted Diluted EPS ($USD)$(0.12) $(0.12) $(0.13)
MarginsQ4 2024Q1 2025Q2 2025
Net Income Margin %(36.6%) (37.3%) (53.8%)
Adjusted EBITDA Margin %(17.6%) (4.4%) (21.8%)
Segment BreakdownQ4 2024Q1 2025Q2 2025
Materials Revenue ($USD Millions)$60.986 $55.619 $37.532
Magnetics Revenue ($USD Millions)$0.000 $5.191 $19.861
Materials Segment Adj. EBITDA ($USD Millions)$(1.319) $3.758 $(12.678)
Magnetics Segment Adj. EBITDA ($USD Millions)$(3.061) $0.493 $8.089
KPIsQ4 2024Q1 2025Q2 2025
REO Production Volume (MTs)11,478 12,213 13,145
REO Sales Volume (MTs)7,803 6,264 2,658
Realized Price per REO MT ($USD)$4,717 $4,808 $4,468
NdPr Production Volume (MTs)413 563 597
NdPr Sales Volume (MTs)468 464 443
NdPr Realized Price per KG ($USD)$51 $52 $57

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
2025 CapExFY 2025$150–$175M$150–$175MMaintained
NdPr Oxide Production (Sequential)Q3 2025Not provided+10% to +20% QoQ expectedRaised
NdPr Price Floor (DoD)10 years (starting Q4 2025)None$110/kg price floor; first cash likely Q1New structural support
Concentrate Sales StrategyOngoingSold to third parties (incl. China)Halt third-party sales; stockpile excess; no China salesLowered external REO sales
10X Magnet Facility EBITDA10 years post commissioningNoneMinimum $140M EBITDA guarantee (cost-plus; upside sharing)New guarantee

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/technology initiativesEmphasis on physical AI enabling demand; trial magnet production started “Platform for sustained growth in the emerging era of physical AI” Strengthening narrative
Supply chain reshoringIntensifying engagement from industry/government DoD and Apple partnerships fundamentally transform MP’s role in U.S. supply chain Accelerating
Tariffs/macroPricing softness in 2024; REO realized price declines 10% tariff impacted final Chinese sales in Q2; ceased China shipments Policy-driven shift
Product performanceNdPr oxide run-rate ramp; upstream optimization (Upstream 60K) Record NdPr oxide output; second-best REO; high recoveries; higher concentrate grade Improving
Regional sales & tollingSales pipeline across Asia; tolling in Southeast Asia Strong orders in Japan/Korea/SE Asia; 1-quarter sales lag due to tolling Stable with lag
Regulatory/legal45X credits benefiting costs; 48C tax credit Accounting mechanics for DoD top-up payments being finalized In progress
R&D/commissioningTrial automotive-grade magnets; first NdPr metal deliveries On-spec EV traction motor magnets; commissioning progressing toward commercial later this year Advancing
Heavy REE separationPlanning underway Equipment on-site; installation expected by Q4; aligns with magnet ramp Near-term execution

Management Commentary

  • CEO: “We… announced transformational partnerships with the Department of Defense and Apple—cornerstone agreements… position MP as a platform for sustained growth in the emerging era of physical AI.”
  • CFO: “Beginning in Q4, we will begin benefiting from the DoD price floor agreement with first cash payments likely… in Q1.”
  • COO: “We are now consistently producing magnets that meet our customers’ demanding specifications for EV traction motors… commissioning… is accelerating… progress toward commercial magnet production later this year.”

Q&A Highlights

  • Magnetics margins and 10X economics: Near-term Magnetics earnings at current levels until magnets ramp; significant potential upside at 10X above minimum EBITDA guarantee .
  • Sales to China/oxides: Under DoD agreements MP will not sell products into China; price protection is a payment stream to materials business independent of internal vs external sales .
  • HCL/chlor-alkali facility: Internal HCl production adds redundancy and potential cost benefits; maintains flexibility to source externally .
  • Upstream 60K and grade vs volume: Optimization increases concentrate grade without sacrificing recovery; supports midstream throughput/cost .
  • Recycling scale and Apple: Dedicated recycling circuit at Mountain Pass; modular approach to scale with market and recover feedstocks; Apple collaboration over five years .

Estimates Context

  • S&P Global consensus estimates for Q2 2025 revenue and EPS were unavailable at the time of analysis; therefore, we cannot assess a beat/miss versus Street. Values retrieved from S&P Global.
    | Metric | Consensus (S&P Global) | Actual Q2 2025 | Surprise | |---|---|---|---| | Revenue ($USD Millions) | N/A | $57.393 | N/A | | Diluted EPS ($USD) | N/A | $(0.19) | N/A |

Key Takeaways for Investors

  • Structural earnings support: The $110/kg NdPr price floor (starting Q4) and $140M minimum EBITDA for the 10X facility reduce commodity cyclicality and enhance visibility .
  • Magnetics commercialization is the next catalyst: On-spec EV traction magnets produced; commercial magnet shipments targeted by year-end; Apple ramp slated for 2027 with recycled feedstock .
  • Mix shift drives long-term margin potential: Transition away from concentrate (no China) toward oxide, metal, and magnets should expand margin over time despite near-term negative EBITDA during ramp .
  • Production trajectory: Q3 NdPr oxide expected +10–20% QoQ; upstream recoveries and concentrate grade improvements support midstream throughput gains .
  • Execution and financing runway: Nearly $2B cash cited by management post transactions and raise; 2025 CapEx $150–$175M maintained, largely covered for Independence expansion and recycling via Apple prepayments .
  • Watch accounting and cash timing: Clarifications forthcoming on recognition of DoD top-up payments for stockpiled products; first cash expected Q1 following Q4 start .
  • Trading implication: Near-term stock sensitivity to magnet commercialization milestones and DoD/Apple implementation updates; sequential NdPr growth and policy moves (tariffs, China exposure removal) are narrative drivers .