Executive Summary

Q3 2025 was pre-revenue and marked by accelerated strategic execution: commissioning of the Stillwater magnet plant remains on track for Q1 2026; the LCM metals/alloys acquisition is expected to close by year-end, expanding ex‑China feedstock security and downstream capabilities .
Balance sheet strength is a key catalyst: quarter-end cash was $257.6M with no significant debt; post-quarter cash exceeded $400M, aided by warrant exercises and a redemption notice, positioning USAR to fund manufacturing upgrades and working capital for ramp .
Reported GAAP losses were driven primarily by non-cash fair value remeasurements of warrant and earnout liabilities; adjusted results better reflect core operating performance, but still missed consensus on EPS and EBITDA amid higher opex ahead of commissioning .
Guidance narrative shifted to faster spend: Q4 2025 adjusted opex now expected at $13–$15M vs prior ~$8–$9M per quarter, reflecting accelerated investment in line 1 and Round Top PFS/pilot programs; formal 2026 guidance will be provided with Q4 results .
Near-term stock reaction catalysts: warrant redemption intake, LCM close/expansion plan to 2,000 mt strip cast capacity, Q1 2026 commissioning milestones, and potential government support for domestic rare earth supply chain .

What Went Well and What Went Wrong

What Went Well

Strategy execution milestones: identified Round Top flow sheet validated through bench/pilot testing; moving into PFS with completion targeted in H2 2026; swarf recycling flow sheet advancing to pilot in Q1 2026 .
Downstream integration and customer traction: Stillwater magnet plant commissioning on track for Q1 2026; strong multi-industry demand pipeline, prioritized defense, automotive, agriculture, drones, and data centers; LCM acquisition adds ex‑China metals/alloys capabilities and 1,500→2,000 mt strip cast capacity heading into 2026 .
Liquidity bolstered: $125M equity raise in Q3, subsequent >$400M cash and additional ~~$123M possible from warrant redemption, funding accelerated manufacturing upgrades (~~$100M) and human capital build .
Quote: “We are closing the loop within the rare earth magnet supply chain… from mine all the way through magnet manufacturing” — Barbara Humpton, CEO .

What Went Wrong

Elevated non-cash losses: GAAP net loss of $156.7M for Q3 (EPS -$1.64) driven by $142.4M fair value loss on warrants/earnouts; adjusted net loss -$25.6M (adjusted EPS -$0.25), reflecting core operations but still negative .
Opex step-up and estimate miss: adjusted ongoing opex rose as USAR accelerated commissioning and Round Top investment, contributing to misses vs consensus EPS and EBITDA; Q4 adjusted opex raised to $13–$15M vs prior ~$8–$9M per quarter .
Going-concern disclosure and execution risks: forward-looking risk factors include substantial doubt about going concern in latest 10-Q period, regulatory closing risk for LCM, and supply chain/heavies sourcing execution as capacity expands ex‑China .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Total Operating Expenses ($000)	$1,959	$8,804	$15,861
Loss from Operations ($000)	$(1,959)	$(8,804)	$(15,861)
Net Loss (USAR Inc.) ($000)	$(1,869)	$(142,506)	$(156,680)
Diluted EPS (GAAP) ($)	$(0.03)	$(1.54)	$(1.64)
Adjusted Net Loss ($000)	$(2,004)	$(7,844)	$(25,595)
Adjusted Diluted EPS ($)	$(0.03)	$(0.08)	$(0.25)
Net Cash Used in Operating Activities ($000)	$(1,210)	$(7,909)	$(2,849)
Cash and Cash Equivalents ($000)	$22,988	$121,791	$257,609

Notes:

Q3 2025 net loss includes $(142.4)M non-cash fair value loss on financial instruments; adjusted figures exclude these items per company definitions .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted ongoing operating expenses ($M)	Q4 2025	~$8–$9M/quarter through year-end (heavier in Q4)	$13–$15M	Raised
Manufacturing enhancements capex (line 1, finishing, site upgrades)	Late 2025–early 2026	Not specified	~$100M	New program
Commissioning timeline (Stillwater line 1)	Q1 2026	Early 2026 on track	Q1 2026 remains on track; metal runs in coming weeks	Maintained
Production planning (magnet tons)	CY 2026	Plan 200–500 mt in 2026 (no formal revenue guidance)	Formal 2026 guidance to be provided with Q4 results	Deferred formal guidance

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025, Q2 2025)	Current Period (Q3 2025)	Trend
AI/data centers & drones demand	Pipeline includes data centers, drones; initial 200–500 mt 2026; MOUs expanding	Multi-year demand; data centers/drones projected to double/triple; emphasis on micromagnets and advanced surfacing	Strengthening
Supply chain & feedstock sourcing (ex‑China)	Comfortable near-term feedstock for lights; heavies constrained; diversify sources; consider rebuilding metal-making in U.S.	Securing metal inventory for 2026+; LCM adds ex‑China metals/strip cast; planning U.S/UK/EU expansion (France)	Improving resilience
Tariffs/macro/government support	Tariffs could pressure 2025 capex; pursuing non-dilutive government funding	Continued engagement; strategic alignment with national priorities; defense prioritization in customer mix	Support building
Magnet plant commissioning & capacity	Backbone equipment commissioning; finishing in Q1 2026; target 600→1,200 mt ramp	Metal runs imminent; commissioning Q1 2026; considering line 2 to reach 2,400 mt in 2026/27 timeframe	On track; accelerated planning
Regulatory/legal and risk	Q2 accrual for litigation (resolved after quarter-end)	Going concern risk disclosed; LCM closing subject to UK approvals; warrant redemption process underway	Mixed; mitigants via cash intake
R&D execution & Round Top	Ion-exchange progress; scaling leach solution; pilot planning; stages to PFS/DFS	Flow sheet validated; PFS entered with target H2 2026; hafnium extraction discovery; swarf recycling pilot Q1 2026	Advancing

Management Commentary

Strategic integration: “With the downstream capabilities of our magnet manufacturing plant in Stillwater… now complimented by the metal making and strip casting capabilities of LCM, we are closing the loop within the rare earth magnet supply chain.” — Barbara Humpton, CEO .
Financial positioning: “Cash position… over $400 million as of November 3, 2025… exercise of remaining investor warrants would add approximately $123 million.” — Rob Steele, CFO .
Capacity roadmap: “Accelerating… line 1B to ramp line 1 to 1,200 metric tons… making additional customer-facing improvements… should complete for approximately $100 million.” — Rob Steele, CFO .
Round Top focus: “We’re moving to the pre-feasibility study phase… targeting completion around the third quarter of 2026… our flow sheet is focused on heavies and critical metals.” — Barbara Humpton & Rob Steele .

Q&A Highlights

Commissioning steps: Two execution pillars — complete equipment installation/commission and build/training of human capital; pre-manufacturing installation by end of Q1/Q2 2026 timeframe .
LCM sourcing confidence: Diligence confirmed ability to source requisite oxides/metals from Europe for USAR and third-party customers over next 12–18 months .
End-markets prioritization: Defense prioritized (aerospace), plus automotive and agriculture; broader exposure to semiconductors/data centers demand curves extending to 2033 .
Capacity constraints: Capital equipment lead times up to ~1 year; human capital training critical; planning for line 2 to reach ~2,400 mt in 2026/27 .
Round Top economics: TMRC PEA not applicable to USAR’s flow sheet; USAR will present PFS economics focused on heavies; PFS target Q3 2026 .
Pricing/model: Cost-plus structure; initial pricing tracking ex-China peers (Japan/Europe); customers comfortable with levels; bespoke equipment may invite customer capital in future .

Estimates Context

Metric	Q3 2025 Consensus	Q3 2025 Actual	Beat/Miss
Primary EPS (USD)	-0.07*	-0.25*	Miss
Revenue (USD)	0.0*	0.0*	In-line
EBITDA (USD)	-4.509M*	-15.82M*	Miss

Metric	Q4 2025 Consensus
Primary EPS (USD)	-0.06333*
Revenue (USD)	0.0*
EBITDA (USD)	-6.604M*

Notes: Values retrieved from S&P Global.*
Context: The adjusted EPS (-$0.25) and EBITDA (-$15.82M) were weaker than consensus amid higher adjusted opex ahead of commissioning and accelerated investment; GAAP EPS (-$1.64) includes non-cash fair value losses on warrants/earnouts .

Key Takeaways for Investors

Liquidity and funding optionality are strong; post-quarter cash >$400M plus warrant redemption inflows reduce near-term financing risk and enable faster capex and hiring ahead of commissioning .
Execution focus in Q4/Q1: watch for Stillwater metal runs, qualification runs, and commissioning milestones in Q1 2026; line 1B spend (~$100M) should enhance finishing capacity and customer-spec flexibility .
LCM close is a pivotal catalyst: accelerates ex‑China metal/strip cast capabilities, supports feedstock security, and provides a platform for EU expansion (France) targeting light/heavy metals and alloys .
Round Top de-risking continues: entry into PFS with pilot validations (including hafnium) and defined heavies-centric flow sheet; PFS completion targeted Q3 2026 .
Near-term earnings remain investment-heavy: adjusted opex rising to $13–$15M in Q4 as USAR builds capabilities, implying continued losses until revenue begins in 2026 .
Customer mix prioritizes defense and strategic industries; pricing aligned with ex‑China benchmarks; diversified small/mid-size customers reduce concentration risk and support early ramp .
Watch policy tailwinds: potential government programs and price support mechanisms for critical minerals could improve economics; USAR is actively engaged with agencies .

Appendix: Additional Data and Disclosures

Balance Sheet Snapshot (Q3 2025 vs FY 2024): Total assets $323.3M vs $69.1M; warrant liabilities $177.8M and earnout liabilities $166.1M reflect instruments driving non-cash P&L volatility .
Warrant Redemption (Oct 30): Redeeming all outstanding USARW at $0.01; closing price prior to notice USARW $8.75, USAR $20.10; unexercised warrants void after Dec 1, 2025; potential ~$123M cash if all exercised .
Risk Factors Highlight: going concern uncertainty disclosed; LCM closing subject to UK regulatory approvals; competition and sourcing risks noted .

USA Rare Earth, Inc. (USAR)·Q3 2025 Earnings Summary