MP Materials Corp.
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ITEM 1. BUSINESS
Overview
MP Materials Corp., including its subsidiaries (the “Company,” “MP Materials,” “we,” “our,” and “us”), is the largest producer of rare earth materials in the Western Hemisphere. Headquartered in Las Vegas, Nevada, the Company owns and operates the Mountain Pass Rare Earth Mine and Processing Facility (“Mountain Pass”) located near Mountain Pass, San Bernardino County, California, the only rare earth mining and processing site of scale in North America. Additionally, the Company owns and operates a rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas (“Independence” or the “Independence Facility”), where the Company produces and sells magnetic precursor products and commenced the manufacturing of neodymium-iron-boron (“NdFeB”) permanent magnets in December 2025. The Company’s operations are organized into two reportable segments: Materials and Magnetics.
The Materials segment represents the upstream and midstream operations of the Company, which primarily consist of Mountain Pass, a fully integrated mining and refining facility producing refined rare earth oxides and related products. The Materials segment generates revenue primarily from sales of neodymium-praseodymium (“NdPr”) oxide and metal, primarily sold to customers in Japan, South Korea, and broader Asia. The Materials segment historically generated the majority of its revenue from sales of rare earth concentrate primarily to a distributor that, in turn, typically sold that product to refiners in China.
The Magnetics segment represents the downstream magnet manufacturing and related operations of the Company, which currently consist of the Independence Facility, a fully integrated metal, alloy, and magnet manufacturing plant. The Magnetics segment began generating revenue from sales of magnetic precursor products to General Motors Company (NYSE: GM) (“GM”) in the U.S. in the first quarter of 2025.
On July 9, 2025, the Company entered into definitive agreements with the United States Department of War (the “DoW”), formerly known as the Department of Defense, (collectively, the “DoW Transaction Agreements”) establishing a transformational public-private partnership with the DoW to accelerate the build-out of an end-to-end U.S. rare earth magnet supply chain and reduce foreign dependency (the “DoW Transactions”). This partnership is further described in Note 3, “Public-Private Partnership with U.S. Department of War,” in the notes to the Consolidated Financial Statements, which includes certain defined terms related to the DoW Transaction Agreements.
In connection with the DoW Transactions, the Company will expand its Independence Facility, construct a second domestic magnet manufacturing facility (the “10X Facility”) and extend its heavy rare earth elements (“HREE”) refining capability at Mountain Pass. Additionally, as outlined in the DoW Offtake Agreement, the DoW has guaranteed that the 10X Facility will generate at least $140 million of EBITDA (as defined in the DoW Offtake Agreement, and subject to annual escalation) and has the right to purchase all of the magnets produced at the 10X Facility (which may instead be commercially syndicated). Separately, the Company entered into an NdPr price floor protection agreement with the DoW (the “Price Protection Agreement” or “PPA”) for the Company’s NdPr products produced at Mountain Pass that are sold or produced and stockpiled starting in the fourth quarter of 2025.
Certain rare earth elements (“REE”) serve as critical inputs for the rare earth magnets inside the electric motors, generators, and other components essential to automotive technologies, including those used in hybrid and electric vehicles (referred to collectively as “xEVs”), as well as advanced electronics, aerospace and defense systems, energy products, robotics and many other high-growth, advanced technologies. Our integrated operations at Mountain Pass combine low production costs with high environmental standards, thereby restoring American leadership to a critical industry with a strong commitment to sustainability. The Company believes businesses are increasingly prioritizing diversification and security of their global supply chains to reduce reliance on a single producer or region for critical materials. As the only scaled and vertically integrated source in North America for critical rare earths and magnet materials, with a processing footprint designed to operate with best-in-class sustainability and an industry-leading cost structure, the Company believes it is well-positioned to thrive as global manufacturers and the United States prioritize domestic manufacturing and secure supply chains.
The Company’s mission is to maximize stockholder returns over the long-term by executing a disciplined business strategy to restore the full rare earth magnetics supply chain to the United States of America. The Company believes it will generate positive outcomes for U.S. national security and industry, the U.S. workforce, and the environment.
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Rare Earth Industry Overview
REE are crucial enablers of modern technologies spanning transportation, electronics, physical artificial intelligence (“AI”) and robotics that have permeated modern society. REE are used in supporting, but often critical, amounts in hundreds of different technologies, materials, and chemicals worldwide for commercial, industrial, social, medical, and environmental applications. In the last several decades, REE have become deeply integrated into the foundation of modern technology and industry and have proven to be difficult to duplicate or replace.
By economic value, neodymium-praseodymium (previously defined as “NdPr,” also referred to as “PrNd” or “didymium”) is the largest segment of the REE market. NdPr is primarily used in NdFeB permanent magnets for electric machines such as EV traction motors, wind power generators, drones, robotics, electronics and a growing list of other applications. The rapid growth of these and other end-use markets is expected to drive substantial demand growth for NdPr and NdFeB magnets in the years ahead.
The REE group includes 17 elements, primarily the 15 lanthanide elements. Lanthanum, cerium, praseodymium, neodymium and promethium are considered “light” REE (“LREE”); samarium, europium and gadolinium are often referred to as “medium” REE; while terbium, dysprosium, holmium, erbium, thulium, ytterbium and lutetium are considered “heavy” REE (“HREE”). Two additional elements, yttrium and scandium, are often classified as HREE although they are not lanthanides. Depending upon the rare earth-bearing mineral, the relative abundance of light, medium and heavy REE will differ. The REE in the Mountain Pass ore body are contained primarily within bastnaesite and related minerals in which LREE are predominant.
The aggregate global market for rare earth oxides (“REO”) totaled approximately 252,000 metric tons (“MTs”) in 2025 and is expected to grow at a compound annual growth rate (“CAGR”) of approximately 6.0% through 2040, according to research by Adamas Intelligence Inc. (“Adamas”). Further, Adamas estimates that the NdPr segment of the REO market, which makes up a significant majority of the market value, is expected to grow at an 8.4% CAGR through 2040, well in excess of the overall REO market. This expected growth will be driven by secular growth in demand for NdPr magnets.
Rare earth materials are used in a diverse array of end markets, including:
•Electric Mobility: traction motors in passenger xEVs, commercial xEVs, special purpose vehicles, two-wheelers, and other applications;
•Industrial, Consumer and Professional Service Robotics: motors, actuators, brakes and sensors used in industrial robots and welders, as well as consumer, service and humanoid robots, and other physical AI applications;
•Renewable Power Generation: wind power generators, for on- and offshore applications;
•Energy-Efficient Motors, Pumps and Compressors: heating, ventilation and air conditioning (“HVAC”) systems, elevators, escalators, consumer appliances and other industrial applications;
•Consumer and Medical Applications: smart phones, tablets, laptops, hard disk drives, audio speakers, microphones, cameras, printers, cordless power tools as well as fiber optics, laser crystals, x-ray equipment, prostheses, dental crowns and more;
•Critical Defense Systems: guidance and control systems, communications, avionics, global positioning systems, radar and sonar, drones, thermal barrier coatings and firearms; and
•Catalysts and Phosphors: catalysts for vehicle emissions reduction and fuel refining, as well as phosphors for energy-efficient lighting, backlighting and counterfeit currency detection.
Process
The Company has established a three-stage business plan to enable and scale the full rare earth supply chain. Processing of rare earth materials at Mountain Pass includes five primary process steps: (i) mining and crushing; (ii) milling and flotation; (iii) roasting, leaching and impurity removal; (iv) separation and extraction; and (v) product finishing. Manufacturing of magnets at the Independence Facility includes the following process steps: (i) electrowinning; (ii) strip casting; (iii) powder processing, (iv) pressing; (v) sintering; (vi) machining; and (vii) finishing.
Through its upstream operations, which comprise the first two of the process steps at Mountain Pass, the Company produces rare earth concentrate that was historically marketed to refiners primarily through a distribution arrangement. In 2023, the Company commenced midstream operations, consisting of the latter three primary process steps, to produce separated rare earth products that are marketed directly to end users and indirectly through distributors, with revenue generated primarily from the magnet supply chain. Through its midstream operations, the Company produces NdPr oxide and other separated rare earth products, including cerium and lanthanum products, as well as SEG+, a mixed heavy rare earth product.
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The Company has also established downstream capabilities at its Independence Facility to convert a portion of the REO produced at Mountain Pass into rare earth magnets and its precursor products to be marketed directly to end users. The Company’s Materials segment includes both upstream and midstream operations, while downstream operations constitute the Magnetics segment.
Upstream Operations
Following the acquisition of Mountain Pass in July 2017, the Company implemented an upstream operations optimization plan that established stable and scaled production of rare earth concentrate by leveraging the site’s existing processing facilities. As a result, the Company believes it has achieved world-class production cost levels for rare earth concentrate. The upstream operations include the mining of primarily bastnaesite ore followed by comminution, which involves crushing and grinding the ore into a milled slurry. The slurry is then processed by froth flotation, whereby the bastnaesite is carried to the surface while the gangue, or non-desired, elements are suppressed and disposed as tailings.
The Company continues to optimize its upstream operations to improve mineral recovery and concentrate grade. In November 2023, the Company announced its “Upstream 60K” strategy whereby the Company intends to grow its annual REO Production Volume to approximately 60,000 MTs via investments in further beneficiation capability and through better usage of lower-grade ore and other underutilized parts of the Mountain Pass ore body.
Midstream Operations
In 2023, the Company completed an optimization and recommissioning project and commenced midstream operations, which consist of the production of separated REE from the rare earth concentrate produced in the Company’s upstream operations, as well as from the separation of third-party feedstock, including recycled materials. The optimization project incorporated upgrades and enhancements to the prior facility process flow to produce separated REE at a lower cost while minimizing the impact on the environment. More specifically, the Company reintroduced an oxidizing roasting circuit, reoriented portions of the plant process flow, increased product finishing capacity, improved wastewater management, and made other improvements to materials handling and storage.
The roasting step that oxidizes the rare earth concentrate in a rotary kiln is crucial to ensuring cost-competitiveness. One of the unique attributes of bastnaesite ore is the ability to convert the cerium in the mixed rare earth concentrate to tetravalent cerium that has a low propensity to dissolve, enabling cerium to be removed expediently along with other insoluble gangue elements without selective extraction. Removal of the lower-value cerium early in the Company’s separations process allows for a significant reduction in the mass of material to be separated and finished, thus reducing the energy, reagents, and wastewater required to produce the higher-value NdPr. Additionally, roasting facilitates a lower temperature leach that reduces maintenance costs and downtime.
In February 2022, the Company was selected by the DoW Office of Industrial Base Analysis and Sustainment to design and build a facility for the processing and separation of HREE, which will be built at Mountain Pass and will be integrated into the rest of the Company’s facilities (the “HREE Facility”). The HREE Facility will establish, for the first time in many years, commercial-scale HREE processing in the U.S. in support of commercial and defense applications. The Company is currently advancing the construction of the HREE Facility, with commissioning expected in 2026. Initially, the HREE Facility is expected to primarily produce terbium and dysprosium products principally for use in the Magnetics segment. In addition, as part of its partnership with the DoW, the Company committed to further extend its HREE refining capability at Mountain Pass to include the production of samarium oxide.
Additionally, as part of its definitive, long-term supply agreement with Apple Inc. (NASDAQ: AAPL) (“Apple”), the Company is incorporating magnet scrap recycling capabilities at Mountain Pass. This includes the construction of a commercial-scale, dedicated recycling line that will enable the production of rare earth magnets using recycled rare earth feedstock, processed at Mountain Pass and sourced from post-industrial and end-of-life magnets.
Downstream Operations and Future Capabilities
In February 2022, the Company commenced construction of the Independence Facility, the first fully-integrated rare earth metal, alloy and magnet manufacturing facility in the United States. Located in Fort Worth, Texas, the Independence Facility, which also serves as the business and engineering headquarters for the Company’s Magnetics segment, converts NdPr oxide produced at Mountain Pass into permanent magnets and its precursor products, with integrated capabilities to support magnet recycling. As part of its partnership with the DoW, the Company committed to expand capacity of the Independence Facility to a projected 3,000 MTs of magnets annually.
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Production begins with the reduction of NdPr oxide through electrowinning, producing NdPr metal for downstream alloying. The metal is combined with iron, boron, and other alloying metals and processed through strip casting, forming NdFeB alloy flake that serves as the precursor for powder metallurgy operations. The alloy flake is then converted into powder through hydrogen decrepitation and jet milling, producing a highly refined NdFeB powder engineered for magnet performance. This powder is compacted into “green” magnet bodies through pressing and subsequently sintered at high temperatures to form dense NdFeB magnet blocks. Following sintering, magnets undergo precision machining to achieve final dimensions and may receive additional processing such as grain boundary diffusion and surface finishing to enhance product durability and magnetic performance.
In 2024, the Company commissioned electrowinning capabilities at the Independence Facility to produce NdPr metal from NdPr oxide, and in 2025, the Company added strip casting capabilities to produce NdFeB alloy flake, a key precursor product that is utilized as the material feedstock for magnet manufacturing. At the end of 2025, the Company began commissioning the remaining commercial scale equipment for magnet manufacturing and commenced the manufacturing of its NdFeB permanent magnets.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of financial condition, results of operations, liquidity and capital resources should be read in conjunction with, and is qualified in its entirety by, the unaudited Condensed Consolidated Financial Statements and the notes thereto included in this Quarterly Report on Form 10-Q (“Form 10-Q”), and the Consolidated Financial Statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Annual Report on Form 10-K for the year ended December 31, 2025 (“Form 10-K”). This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “Part II. Item 1A. Risk Factors” and elsewhere in this Form 10-Q and “Part I. Item 1A. Risk Factors” and elsewhere in our Form 10-K. See also “Cautionary Note Regarding Forward-Looking Statements.”
Business Overview
MP Materials Corp., including its subsidiaries (“we,” “our,” “us” and the “Company”), is the largest producer of rare earth materials in the Western Hemisphere. We own and operate the Mountain Pass Rare Earth Mine and Processing Facility (“Mountain Pass”) located near Mountain Pass, San Bernardino County, California, the only rare earth mining and processing site of scale in North America. Rare earth products are critical inputs in hundreds of existing and emerging applications including electric vehicles, consumer electronics, robotics, drones, wind turbines, and defense applications. Additionally, we own and operate a rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas (“Independence” or the “Independence Facility”).
Our reportable segments, which are primarily based on our internal organizational structure and types of products, are our two operating segments—Materials and Magnetics.
The Materials segment represents our upstream and midstream operations, which primarily consist of Mountain Pass, a fully integrated mining and refining facility producing refined rare earth oxides (“REO”) and related products. The Materials segment generates revenue primarily from sales of neodymium-praseodymium (“NdPr”) oxide and metal, primarily sold to customers in the United States, Japan, South Korea, and broader Asia. The Materials segment historically generated the majority of its revenue from sales of rare earth concentrate into the Chinese market.
The Magnetics segment represents our downstream magnet manufacturing and related operations, which currently consist of the Independence Facility, a fully integrated metal, alloy, and magnet manufacturing plant. The Magnetics segment began generating revenue from sales of magnetic precursor products to a single customer in the U.S., in the first quarter of 2025, and commenced the manufacturing of neodymium-iron-boron (“NdFeB”) permanent magnets in December 2025.
Certain rare earth elements (“REE”) serve as critical inputs for the rare earth magnets inside the electric motors and generators powering carbon-reducing technologies such as hybrid and electric vehicles (referred to collectively as “xEVs”), advanced electronics, aerospace and defense systems, energy products, robotics and many other high-growth, advanced technologies. Our integrated operations combine low production costs with high environmental standards, thereby restoring American leadership to a critical industry with a strong commitment to sustainability.
Recent Developments
10X Facility
In February 2026, we announced the selection of a 120‑acre site in Northlake, Texas, for our second domestic magnet manufacturing facility (the “10X Facility”), as discussed further below. We closed on the purchase of this land in April 2026 at a cost of approximately $80 million.
NdPr Offtake Agreement
In February 2026, we entered into an NdPr offtake agreement with a leading U.S. technology and industrial company for the purchase of a significant volume of NdPr products.
Factors Affecting Our Performance
We believe we are uniquely positioned to capitalize on the trends of electrification and supply chain security, particularly as domestic industrial supply chain initiatives advance. Our continued success depends to a significant extent on our ability to take advantage of the following opportunities and meet the challenges associated with them.
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Demand for REE
The drivers for REE demand are a diverse array of growing end markets, including electric mobility; physical AI; industrial, consumer and professional service robotics; renewable power generation; energy-efficient motors, pumps, and compressors; consumer and medical applications; critical defense systems; and catalysts and phosphors.
Throughout 2025, China imposed and expanded export controls and restrictions on certain rare earths and related materials, requiring companies to secure special export licenses and obtain Chinese government approval for exports of products containing even small amounts of Chinese-origin rare earths, among other restrictions. While in November 2025 the U.S. reached a trade and economic deal in which China agreed to suspend implementation of the expanded export controls and to suspend retaliatory tariffs and non-tariff measures imposed since March 2025, these developments have led and continue to lead to several market trends, which may or may not be permanent, including volatility and disruptions in global supply chains, shortages of rare earth elements, potential price volatility, and an increased demand for alternative supply chains outside of China, all of which, if sustained, may have a material impact on the demand for our products.
These developments further catalyzed action by a number of governments and rare earth users to accelerate geographic supply chain diversification for REE products. In particular, the U.S. government has implemented a number of initiatives to restore domestic supply of critical minerals. We believe we are uniquely positioned to benefit from this trend.
Maximizing Upstream and Midstream Production Efficiency
After an initial ramp and optimization period, we have produced at least 40,000 MTs of REO in concentrate each year since 2021, culminating in record production levels exceeding 50,000 MTs. These results were achieved by optimizing the reagent scheme, adjusting process temperatures, improving tailings facility management, and committing to operational excellence. Our initiative to optimize upstream operations has enabled us to attain what we believe to be world-class production cost levels for rare earth concentrate.
In November 2023, we announced our “Upstream 60K” strategy whereby we intend to grow our annual REO Production Volume to approximately 60,000 MTs via investments in further beneficiation capacity and through better usage of lower-grade ore and other underutilized parts of the Mountain Pass ore body.
Midstream operations produce separated REE from our rare earth concentrate. The optimization of our refining capabilities incorporated upgrades and enhancements to the prior facility process flow to produce separated REE at a lower cost while minimizing our impact on the environment. More specifically, we have reintroduced an oxidizing roasting circuit, reoriented portions of the plant process flow, increased product finishing capacity, improved wastewater management, and made other improvements to materials handling and storage. The reintroduction of the oxidizing roasting circuit allows subsequent stages of the production process to occur at lower temperatures, and with lower volumes of materials and reagents, which supports lower operating and maintenance costs and higher uptime than would otherwise be achievable.
The success of our business reflects our ability to continue to manage our costs and drive scale. Our upstream production achievements have provided economies of scale to lower production costs per MT of REO produced in concentrate. Furthermore, our midstream process flow was designed to capitalize on the inherent advantages of the bastnaesite ore at Mountain Pass, which is well-suited to low-cost refining by selectively eliminating the need to carry cerium, a lower-value element, through the separations process. Additionally, our location and integration offer cost and transportation advantages that create efficiencies in production, security of incoming supplies and shipping of our final products.
During the second half of 2023, we began producing separated rare earth products, including NdPr oxide, which represents a majority of the value contained in our concentrate. We continue to expect that it may take many quarters to achieve our designed throughput of NdPr oxide. However, as we increase production over time, we expect to reduce our per-unit production costs. Until such time that we achieve our designed throughputs of separated products, including heavy rare earth elements (“HREE”), we may experience unstable operations and elevated costs of our initial production of such products.
In 2026, we expect to begin refining HREE with initial production of terbium and dysprosium. As part of our partnership with the United States Department of War (the “DoW”), we have committed to further extend our HREE refining capabilities to include the separation of samarium oxide and to recommission the chlor-alkali facilities at Mountain Pass. Additionally, as part of our agreement with Apple Inc. (NASDAQ: AAPL) (“Apple”), we will develop and install scaled magnet recycling capabilities at Mountain Pass with dedicated capacity for both NdPr and heavy rare earth separation.
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We currently generate our revenue primarily from our Materials segment, which operates a single site in a single location, and any stoppage in activity, including for reasons outside of our control, could adversely impact our production, results of operations and cash flows.
Development of Our Downstream Manufacturing Capabilities
We are in the final stages of commissioning magnet manufacturing equipment at Independence and continue to develop engineering and manufacturing technology to process NdPr oxide and metal into NdFeB magnets. Our operations also incorporate magnet recycling capabilities. These initiatives are central to our long-term strategy to become a leading, integrated global supplier of rare earth magnets. We believe this vertical integration is a core competitive advantage in the production of a critical industrial output. Furthermore, we expect our downstream manufacturing operations to benefit from geopolitical developments, including initiatives to repatriate critical materials supply chains, including those supported by our agreements with General Motors Company (NYSE: GM) (“GM”), the DoW and Apple.
Our Independence Facility converts NdPr oxide produced at Mountain Pass into permanent magnets and its precursor products, with integrated capabilities to support magnet recycling. Our operations are expected to progress in phases, with magnet production volumes increasing over time as additional capabilities are commissioned and scaled. As part of our partnership with the DoW, we committed to expand capacity of the Independence Facility to a projected 3,000 MTs of magnets annually. Output from the Independence Facility is expected to support a range of end markets, including electric vehicles, robotics, semiconductor manufacturing, clean energy, electronics and defense technologies.
In late 2024, we commissioned electrowinning capabilities at the Independence Facility to produce NdPr metal from NdPr oxide. Additionally, in 2025, we added strip casting capabilities to produce NdFeB alloy flake, a key precursor product that is utilized as the material feedstock for magnet manufacturing. We also began trial production of automotive-grade, sintered NdFeB magnets at our new product introduction (“NPI”) facility within the Independence Facility and recently commenced manufacturing NdFeB magnets on the industrial scale equipment.
In the first quarter of 2025, we commenced sales of magnetic precursor products, primarily NdPr metal. We expect to continue selling magnetic precursor products ahead of fully commissioning our magnet manufacturing capabilities, which commissioning began in late 2025. After the Independence Facility is commissioned and scaled, we expect to primarily sell finished magnets.
In July 2025, we entered into definitive agreements with the the DoW establishing a transformational public-private partnership with the DoW to accelerate the build-out of an end-to-end U.S. rare earth magnet supply chain. In connection with these agreements, the Company committed to construct the 10X Facility. We expect to invest more than $1.25 billion in this project, which is supported by approximately $200 million of state and local incentive packages, as well as a 10‑year magnet offtake agreement with the DoW. The 10X Facility is expected to begin commissioning in 2028, and once completed and scaled, it will produce an estimated 7,000 metric tons (“MTs”) of magnets per year. When combined with the Independence Facility’s 3,000 MTs per year of magnets, our overall U.S. rare earth magnet production capacity will expand to an estimated 10,000 MTs per year.
While we have grown increasingly confident about our future outlook with the progress made to-date, there are inherent risks in finalizing construction and developing the process technology for magnet manufacturing. For instance, unforeseen delays in construction or the installation of specific equipment may occur, or our products may fail to satisfy customer expectations, which could adversely affect both the amount and timing of our revenue from permanent magnets and precursor products.
Our Mineral Reserves
Our ore body has proven over more than 70 years of operations to be one of the world’s largest and highest-grade rare earth resources. As of December 31, 2025, SRK Consulting (U.S.), Inc., an independent consulting firm that we retained to assess our reserves, estimated total proven and probable reserves of 1.96 million short tons of REO contained in 28.96 million short tons of ore at Mountain Pass, with an average ore grade of 5.89%. These estimates use an estimated economical cut-off grade of 2.50% total rare earth oxide. Based on these estimated reserves and our expected annual production rate of REO upon production ramp-up of our midstream operations, our expected mine life was approximately 28 years as of December 31, 2025. Over time, we expect to be able to continue to grow our expected mine life through additional exploratory drilling and improved processing capabilities, which may result in changes to various assumptions underlying our mineral reserve estimate.
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Mining activities in the U.S. are heavily regulated, particularly in California. Regulatory changes may make it more challenging for us to access our reserves. In addition, new mineral deposits may be discovered elsewhere, which could make our operations less competitive.
Key Performance Indicators
In evaluating the performance of our Materials segment, we use the key performance indicators (“KPIs”) outlined below. Our calculations of the KPIs presented may differ from similar measures published by other companies in our industry or in other industries. See the “Materials Segment” section below for further discussion of year-over-year changes in KPIs. Since the Magnetics segment only recently commenced production, we have not established any KPIs for its operations.
NdPr Production Volume
We measure our NdPr Production Volume for a given period in MTs, our principal unit of sale for our NdPr separated products. NdPr Production Volume refers to the volume of finished and packaged NdPr oxide produced at Mountain Pass for a given period. NdPr Production Volume is a key indicator of the separating and finishing capacity and efficiency of our midstream operations.
NdPr Sales Volume
Our NdPr Sales Volume for a given period is calculated in MTs and on an NdPr oxide-equivalent basis (as further discussed below). NdPr Sales Volume is a key measure of our ability to convert our production of separated NdPr products into revenue. A unit, or MT, is considered sold once the Materials segment recognizes revenue on its sale, whether sold as NdPr oxide or NdPr metal, as determined in accordance with GAAP. For these NdPr metal sales, the MTs sold and included in NdPr Sales Volume are calculated based on the volume of NdPr oxide used to produce such NdPr metal. In the first quarter of 2026, to better reflect current contractual production yields, we began to utilize an assumed material conversion ratio of 1.25, such that a sale of 100 MTs of NdPr metal would be included in this KPI as 125 MTs of NdPr oxide-equivalent. Prior to this update, we utilized an assumed material conversion ratio of 1.20. The prior period amounts have not been recast. Beginning with the fourth quarter of 2025, NdPr Sales Volume for the Materials segment includes intercompany sales made to the Magnetics segment.
For the Materials segment, we have a mix of contracts with customers where we sell NdPr as oxide or metal. Among other factors, differences between quarterly NdPr Production Volume and NdPr Sales Volume may be caused by the time required for the conversion of NdPr oxide to NdPr metal, including time in-transit, as well as differences in actual versus assumed yields of oxide to metal in the calculation of NdPr Sales Volume.
REO Production Volume
We measure our REO-equivalent production volume for a given period in MTs, our principal unit of sale for our concentrate product historically. This measure refers to the REO content contained in the rare earth concentrate we produce and includes volumes fed into downstream circuits for producing separated rare earth products, a portion of which is also included in our KPI, NdPr Production Volume. REO Production Volume is a key indicator of the mining and processing capacity and efficiency of our upstream operations.
The rare earth concentrate is a processed, concentrated form of our mined rare earth-bearing ores. While our unit of production and sale is a MT of contained REO, the actual weight of our rare earth concentrate is significantly greater, as the concentrate also contains non-REO minerals, loss-on-ignition, and residual moisture from the production process. We target REO content of greater than 60% per dry MT of concentrate (referred to as “REO grade”). The elemental distribution of REO in our concentrate is relatively consistent over time and production lot. We consider this the natural distribution, as it reflects the distribution of elements contained, on average, in our ore.
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Results of Operations
Comparison of the Three Months Ended March 31, 2026 and 2025
Consolidated Results
| For the three months ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||
(in thousands, except per share data and percentages) | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
| Total revenue | $ | 90,649 | $ | 60,810 | $ | 29,839 | 49 | % | |||||||||||||||||||||||||||||||
| Net loss | $ | (7,968) | $ | (22,648) | $ | 14,680 | 65 | % | |||||||||||||||||||||||||||||||
| Basic loss per common share | $ | (0.04) | $ | (0.14) | $ | 0.10 | 71 | % | |||||||||||||||||||||||||||||||
| Diluted loss per common share | $ | (0.04) | $ | (0.14) | $ | 0.10 | 71 | % | |||||||||||||||||||||||||||||||
Adjusted EBITDA(1) | $ | 36,610 | $ | (2,696) | $ | 39,306 | N/M | ||||||||||||||||||||||||||||||||
Adjusted Net Income (Loss)(1) | $ | 6,652 | $ | (19,898) | $ | 26,550 | N/M | ||||||||||||||||||||||||||||||||
Adjusted Diluted EPS(1) | $ | 0.03 | $ | (0.12) | $ | 0.15 | N/M | ||||||||||||||||||||||||||||||||
N/M = Not meaningful. | |||||||||||||||||||||||||||||||||||||||
(1) Non-GAAP financial measures are defined and reconciled to the most directly comparable GAAP financial measures in the “Non-GAAP Financial Measures” section below. | |||||||||||||||||||||||||||||||||||||||
Revenue
NdPr oxide and metal revenue consists of sales of NdPr oxide and metal produced at Mountain Pass under our distribution agreement with Sumitomo Corporation of Americas, under an offtake agreement with a leading U.S. technology and industrial company entered into during the first quarter of 2026, as well as other sales under individual sales agreements.
Rare earth concentrate revenue consisted of sales of traditional and roasted rare earth concentrate. For the majority of our sales of rare earth concentrate, the sales price was based on a preliminary market price (net of taxes, tariffs, and certain other agreed charges) per MT, with an adjustment for the ultimate market price of the product realized upon final sale, including the impact of changes in exchange rates.
Magnetic precursor products revenue consists of sales of magnetic precursor products, including NdPr metal, produced at the Independence Facility and sold in the U.S. Sales of these products commenced in the first quarter of 2025 pursuant to a long-term supply agreement with GM.
| For the three months ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
| NdPr oxide and metal | $ | 71,136 | $ | 24,321 | $ | 46,815 | 192 | % | |||||||||||||||||||||||||||||||
| Rare earth concentrate | — | 30,115 | (30,115) | N/M | |||||||||||||||||||||||||||||||||||
| Magnetic precursor products | 21,078 | 5,191 | 15,887 | 306 | % | ||||||||||||||||||||||||||||||||||
| Other revenue | 1,041 | 1,183 | (142) | (12) | % | ||||||||||||||||||||||||||||||||||
Intersegment eliminations(1) | (2,606) | — | (2,606) | N/M | |||||||||||||||||||||||||||||||||||
Total revenue | $ | 90,649 | $ | 60,810 | $ | 29,839 | 49 | % | |||||||||||||||||||||||||||||||
N/M = Not meaningful. | |||||||||||||||||||||||||||||||||||||||
| (1) Represents the elimination of intersegment revenues associated with NdPr oxide sales made by the Materials segment to the Magnetics segment. | |||||||||||||||||||||||||||||||||||||||
Total revenue increased for the three months ended March 31, 2026, as compared to the prior year period, driven by higher sales volumes of NdPr oxide and metal, reflecting the continued ramping of production of separated products, as well as higher market prices. Revenue from magnetic precursor products also increased year over year. These increases were partially offset by the cessation of our concentrate sales beginning in July 2025.
We expect our rare earth concentrate revenues, if any, to be materially lower in future periods as we no longer sell this product into the Chinese market. This will allow us to prioritize further processing the concentrate into separated rare earth products or stockpiling it for future use. See the “Segment Results” section below for further discussion of year-over-year changes in revenue.
32
Price protection agreement income
Our Price Protection Agreement with the DoW (“PPA”) for our NdPr products (e.g., concentrate, oxide and metal) (collectively, “NdPr Products”) commenced on October 1, 2025; given market prices for NdPr Products in the first quarter of 2026, we recognized price protection agreement income (“PPA Income”) based on the right to receive cash from the DoW for the difference between $110 per kilogram equivalent of NdPr included in the NdPr Products and the Benchmark Quarterly Average Volume Weighted Price (as defined in the PPA) for the NdPr Products produced at Mountain Pass that were sold or produced and stockpiled during the first quarter of 2026. A substantial majority of the PPA Income recognized during the first quarter of 2026 pertained to sales to third parties.
| For the three months ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||
(in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
| Price protection agreement income | $ | 42,273 | $ | — | $ | 42,273 | N/M | ||||||||||||||||||||||||||||||||
| N/M = Not meaningful. | |||||||||||||||||||||||||||||||||||||||
Cost of sales (excluding depreciation, depletion and amortization)
Cost of sales (excluding depreciation, depletion and amortization) (“COS”) consists of mining, processing, separations, and metal making-related labor costs (including wages and salaries, benefits, bonuses, and stock-based compensation); mining, processing, separations, and metal making-related supplies and reagents; parts and labor for the maintenance of our mining fleet and processing and separating facilities; other facilities-related costs (such as property taxes and utilities); packaging materials; and shipping and freight costs.
| For the three months ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||
Cost of sales (excluding depreciation, depletion and amortization) | $ | 74,245 | $ | 48,831 | $ | 25,414 | 52 | % | ||||||||||||||||||||||||||||||
The increase in COS for the three months ended March 31, 2026, was driven by higher sales of both NdPr oxide and metal and magnetic precursor products in the current year period, as discussed above. Notwithstanding, per-unit production costs of separated products are necessarily higher than those of rare earth concentrate due to the additional processing required. Such costs pertain primarily to chemical reagents, employee labor, maintenance expenses, and consumables. COS for the three months ended March 31, 2026, also benefited from a higher Section 45X Advanced Manufacturing Production Credit (the “45X Credit”), which resulted in lower COS of $4.3 million for the three months ended March 31, 2026.
As we produce and sell more separated products at Mountain Pass, we expect that COS may continue to increase throughout 2026 even as certain per-unit production efficiencies and economies of scale are expected to be achieved. Accordingly, in future periods, any further increase in sales of NdPr oxide and metal may result in higher year-over-year COS. Additionally, should we further ramp the production of magnetic precursor products as well as magnets at Independence, COS may also increase.
Selling, general and administrative
Selling, general and administrative (“SG&A”) expenses consist primarily of personnel costs (including salaries, benefits, bonuses, and stock-based compensation) of our administrative functions such as executives, accounting and finance, legal, and information technology; professional services (including legal, regulatory, audit and others); software-related costs; certain engineering expenses; insurance, license and permit costs; corporate office lease cost; office supplies; and certain environmental, health and safety expenses.
| For the three months ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||
| Selling, general and administrative | $ | 33,640 | $ | 24,166 | $ | 9,474 | 39 | % | ||||||||||||||||||||||||||||||
The increase in SG&A expenses for the three months ended March 31, 2026, as compared to the prior year period, was driven primarily by higher personnel costs, which increased by $7.2 million, primarily due to the continued growth in our employee headcount to support our downstream expansion.
33
Depreciation, depletion and amortization
Depreciation, depletion and amortization (“DD&A”) primarily consists of depreciation of property, plant and equipment, depletion of mineral rights and beginning with the fourth quarter of 2025, amortization of the right to the price floor protection granted by the DoW under the PPA.
| For the three months ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | $ | 32,137 | $ | 21,384 | $ | 10,753 | 50 | % | ||||||||||||||||||||||||||||||
The year-over-year increase in DD&A for the three months ended March 31, 2026, primarily reflects $11.2 million of amortization related to the price protection agreement upfront asset, with no comparable expense in the prior year period.
Start-up costs
Start-up costs relate to costs associated with restarting an existing facility or commissioning a new facility, circuit or process of our production, manufacturing, or separations facilities prior to the achievement of commercial production, that do not qualify for capitalization. Such costs, which are expensed as incurred, include certain salaries and wages, outside services, parts, training, and utilities, among other items, used or consumed directly in these start-up activities.
| For the three months ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||
| Start-up costs | $ | 5,889 | $ | 976 | $ | 4,913 | 503 | % | ||||||||||||||||||||||||||||||
The year-over-year increase in start-up costs for the three months ended March 31, 2026, was attributable primarily to the ramp-up of start-up activities related to magnet production and chlor-alkali facilities. As we continue to ramp up start-up activities related to these and other initiatives, we expect that start-up costs may increase in future periods.
Advanced projects and development
Advanced projects and development consists principally of costs incurred to support growth initiatives, including business and corporate development, as well as costs incurred in connection with research and development of new processes or to significantly enhance our existing processes.
| For the three months ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||
| Advanced projects and development | $ | 1,905 | $ | 474 | $ | 1,431 | 302 | % | ||||||||||||||||||||||||||||||
The year-over-year increase in advanced projects and development for the three months ended March 31, 2026, was primarily due to higher costs incurred for legal, consulting, and advisory services to support growth initiatives, such as potential acquisitions, mergers, or other investments.
Other operating costs and expenses (income), net
Other operating costs and expenses (income), net consists primarily of accretion of asset retirement and environmental obligations, legal settlements, gains or losses on disposals of long-lived assets, including demolition costs, and other operating expenses.
| For the three months ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||
(in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
| Other operating costs and expenses (income), net | $ | 9,228 | $ | (243) | $ | 9,471 | N/M | ||||||||||||||||||||||||||||||||
| N/M = Not meaningful. | |||||||||||||||||||||||||||||||||||||||
34
The year-over-year increase was primarily attributable to an $8.8 million settlement of a construction-related litigation matter. See Note 11, “Commitments and Contingencies,” in the notes to the unaudited Condensed Consolidated Financial Statements for additional details.
Interest expense, net
Interest expense, net principally consists of the expense associated with the 3.00% per annum coupon interest rates and amortization of the debt issuance costs on our 2030 Notes (as defined below), as well as interest expense associated with the Samarium Project Loan, offset by interest capitalized to property, plant and equipment.
| For the three months ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||
| Interest expense, net | $ | 9,846 | $ | 7,615 | $ | 2,231 | 29 | % | ||||||||||||||||||||||||||||||
Interest expense, net for the three months ended March 31, 2026, increased year over year primarily due to the interest expense associated with the issuance of the Samarium Project Loan in August 2025, partially offset by higher capitalized interest in the current year period as we continue to construct our Independence Facility, as well as various projects at Mountain Pass.
Other income, net
Other income, net consists of interest and investment income and non-operating gains or losses. Interest and investment income is principally generated from accretion of the discount on such investments.
| For the three months ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||
| Other income, net | $ | 20,326 | $ | 15,218 | $ | 5,108 | 34 | % | ||||||||||||||||||||||||||||||
Other income, net for the three months ended March 31, 2026, increased year over year primarily as a result of $7.4 million of higher interest and investment income earned on our short-term investments and interest-bearing demand deposit accounts, driven by the increase in our short-term investments balance as a result of the funds received as part of our partnership with the DoW (the “DoW Transactions”) as well as an offering of shares of our common stock in 2025. Additionally, Other income, net was impacted by the changes in the fair value of the derivative instrument related to the redemption feature included in the portion of the 2030 Notes issued in December 2024, which decreased by $2.9 million for the three months ended March 31, 2026 as compared to the prior year period.
Income tax benefit
Income tax expense or benefit consists of an estimate of U.S. federal and state income taxes in the jurisdictions in which we conduct business, adjusted for federal, state and local allowable income tax benefits, the effect of permanent differences and any valuation allowance against deferred tax assets.
| For the three months ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||
| Loss before income taxes | $ | (13,642) | $ | (27,175) | $ | 13,533 | 50 | % | ||||||||||||||||||||||||||||||
| Income tax benefit | $ | 5,674 | $ | 4,527 | $ | 1,147 | 25 | % | ||||||||||||||||||||||||||||||
| Effective tax rate | 41.6 | % | 16.7 | % | ||||||||||||||||||||||||||||||||||
The effective tax rate for the three months ended March 31, 2026, differed from the statutory tax rate of 21% primarily due to the 45X Credit, percentage depletion, and excess tax benefits associated with stock-based compensation, offset by a deduction limitation on officers’ compensation. The effective tax rate for the three months ended March 31, 2025, differed from the statutory tax rate of 21% primarily due to the 45X Credit, percentage depletion, and state income tax benefit, offset by a deduction limitation on officers’ compensation and a valuation allowance on California Competes Tax Credits. For additional information on the 45X Credit, see Note 15, “Government Grants,” in the notes to the unaudited Condensed Consolidated Financial Statements.
35
Segment Results
Materials Segment
The Materials segment operates Mountain Pass, which produces refined REO and related products as well as, historically, rare earth concentrate products. The Materials segment operating results include intercompany sales made by the Materials segment to the Magnetics segment.
KPIs
| For the three months ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||
(in whole units, except percentages) | 2026 | 2025 | Unit | % | |||||||||||||||||||||||||||||||||||
Separated NdPr products(1) | |||||||||||||||||||||||||||||||||||||||
| NdPr Production Volume (MTs) | 917 | 563 | 354 | 63 | % | ||||||||||||||||||||||||||||||||||
| NdPr Sales Volume (MTs) | 1,006 | 464 | 542 | 117 | % | ||||||||||||||||||||||||||||||||||
Rare earth concentrate(1) | |||||||||||||||||||||||||||||||||||||||
REO Production Volume (MTs) | 12,983 | 12,213 | 770 | 6 | % | ||||||||||||||||||||||||||||||||||
(1) See the “Key Performance Indicators” section above for further discussion of the definitions of our KPIs. | |||||||||||||||||||||||||||||||||||||||
Revenue, PPA Income, and Segment Adjusted EBITDA
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-06-09 | Rosenthal Michael Stuart indirect | Chief Operating Officer | Buy | +10,000 | $54.30 | $543,000 |
| 2026-06-03 | Litinsky James H. indirect | Chairman and CEO | Sell | -185,167 ×3 | $69.14 | -$12,801,855 |
| 2026-05-29 | Litinsky James H. indirect | Chairman and CEO | Sell | -50,000 ×2 | $64.58 | -$3,229,112 |
| 2026-05-28 | Litinsky James H. indirect | Chairman and CEO | Sell | -234,651 ×5 | $65.87 | -$15,455,481 |
| 2026-05-27 | Litinsky James H. indirect | Chairman and CEO | Sell | -115,349 ×2 | $65.37 | -$7,540,632 |
| 2026-05-20 | Rosenthal Michael Stuart | Chief Operating Officer | Buy | +17,000 | $56.62 | $962,540 |
| 2026-05-13 | Litinsky James H. indirect | Chairman and CEO | Sell | -177,188 ×2 | $65.13 | -$11,540,521 |
| 2026-05-12 | Litinsky James H. indirect | Chairman and CEO | Sell | -122,812 ×2 | $65.90 | -$8,093,838 |
| 2026-05-08 | Hoops Elliot Dean | General Counsel and Secretary | Sell | -6,958 | $75.00 | -$521,850 |
| 2026-05-08 | Corbett Ryan | Chief Financial Officer | Sell | -20,000 | $75.00 | -$1,500,000 |
| 2026-04-20 | Litinsky James H. indirect | Chairman and CEO | Sell | -259,179 | $64.03 | -$16,595,231 |
| 2026-04-17 | Litinsky James H. indirect | Chairman and CEO | Sell | -40,821 | $64.05 | -$2,614,585 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-08-07 10-Q expected by 2026-08-11 (in 44 days)
- ~2026-11-06 10-Q expected by 2026-11-10 (in 135 days)
- ~2027-02-26 10-K expected by 2027-02-27 (in 247 days)
- ~2027-05-07 10-Q expected by 2027-05-11 (in 317 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-05-08 10-Q Quarterly Report
- 2026-05-07 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-24 DEF 14A Proxy Statement
- 2026-02-26 10-K Annual Report
- 2026-02-26 8-K Earnings Release; Financial Statements and Exhibits
- 2025-11-19 8-K Other Events; Financial Statements and Exhibits
- 2025-11-07 10-Q Quarterly Report
- 2025-11-06 8-K Earnings Release; Financial Statements and Exhibits
- 2025-10-17 8-K Officer/Director Change
- 2025-08-25 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2025-08-15 8-K Other Events; Financial Statements and Exhibits
- 2025-08-08 10-Q Quarterly Report
- 2025-08-07 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-18 8-K Other Events; Financial Statements and Exhibits
- 2025-07-15 8-K Regulation FD Disclosure; Other Events; Financial Statements and Exhibits