MP Materials Corp. / DE

Segment Results

Materials Segment

The Materials segment operates Mountain Pass, which produces refined rare earth oxides and related products as well as rare earth concentrate products.

KPIs

Revenue and Segment Adjusted EBITDA

The year-over-year decrease in rare earth concentrate revenue was primarily driven by the decrease in REO Sales Volumedue to the ramp-up in midstream operations, where a significantly higher portion of REO produced was refined and sold as NdPr oxide and metal during the current year period. This was partially offset by a higher Realized Price per REO MT. As noted above in the“Factors Affecting our Performance” section, market prices for rare earth products may be volatile due to actual or perceived changes in supply or demand.

Until we commenced our midstream operations, our REO Sales Volume generally tracked our REO Production Volume over time with slight period-to-period differences caused by the timing of shipments. However, as we continue to ramp up production of separated rare earth materials, we expect that significant volumes of REO produced from upstream operations will continue to be consumed for separation and not sold as concentrate. In addition, a significant portion of the contained cerium in the REO produced will be intentionally rejected and may not result in finished product. Accordingly, we continue to expect that REO Sales Volume will be significantly lower than REO Production Volume in the future as we produce and sell more separated products. Furthermore, as a result of the item discussed in the“Recent Developments” section above, we expect our rare earth concentrate revenues to be materially lower through at least the second quarter of 2025 as we prioritize further processing the concentrate into separated rare earth products or stockpiling for future use, which will also impact REO Sales Volume.

The increase in NdPr oxide and metal revenuefor thethree months ended March 31, 2025, as compared to the prior year period, was primarily driven by higher NdPr Production Volume as a result of ramping production of separated products throughout 2024, partially offset by lower NdPr Realized Price per KG. We currently expect to begin intersegment sales of NdPr oxide to the Magnetics segment starting in the second half of 2025.

Other revenuefor thethree months ended March 31, 2025, increased, as compared to the prior year period, primarily due to higher sales of other refined products, including lanthanum and cerium.

The decrease in Materials Segment Adjusted EBITDAfor thethree months ended March 31, 2025, when compared to the prior year period, was primarily due to higher cost of sales (excluding depreciation, depletion and amortization and stock-based compensation expense) (“Segment COS”).

The increase in Segment COSfor thethree months ended March 31, 2025, was driven primarily by production costs associated with separated rare earth products sold in the current year period, which are currently elevated as we continue to ramp and optimize production of separated products toward normalized capacity. Segment COS for the three months ended March 31, 2025, benefited from (i) a lower reserve on certain of our work in process and finished goods inventories, which decreased by $2.8 million when compared to the prior year period, and (ii) the 45X Credit, which was $2.8 million higher in the current year period.

Magnetics Segment

The Magnetics segment operates the Independence Facility, where we produce and sell magnetic precursor products and anticipate the manufacturing of NdFeB permanent magnets by the end of 2025. Pursuant to the long-term supply agreement with GM, we received prepayments of $50.0 million in April 2025 and $100.0 million during the year ended December 31, 2024, for magnetic precursor products.

Revenue and Segment Adjusted EBITDA

We began generating revenue from sales of magnetic precursor products during the three months ended March 31, 2025, with no comparable sales during the three months ended March 31, 2024 (see Note 14, “Revenue Recognition,” in the notes to the unaudited Condensed Consolidated Financial Statements for additional information), which also drove the year-over-year increase in Magnetics Segment Adjusted EBITDA. We continue to expect that the historical trend of Magnetics Segment Adjusted EBITDA will be significantly impacted by the production ramp of magnetic precursor products.

Corporate Expenses and Other

Corporate expenses and other is primarily comprised of the operating results of other business activities that excludes our Materials and Magnetics segments and includes costs incurred at the corporate level that are not allocated to the operating segments, specifically relating to executive compensation, investor relations, other corporate costs, and unallocated shared service functions such as legal, information technology, human resources, finance and accounting and supply chain. Corporate expenses and other excludes stock-based compensation expense.

The increase in corporate expenses and otherfor thethree months ended March 31, 2025, as compared to the prior year period, was primarily due to higher personnel costs (other than stock-based compensation expense) related to executives and administrative personnel.

Quarterly Performance Trend

While our business is not highly seasonal in nature, we sometimes experience a timing lag between production and sales, which may result in volatility in our results of operations between periods. The timing lag may be the result of, or influenced by, factors such as the timing and duration of shipments or the time required to convert materials. In addition, quarterly production of concentrate and separated products is impacted by the timing of scheduled outages of our production facilities for maintenance, which typically occur in the second and fourth quarters. Finally, since we began production of separated rare earth materials in the second half of 2023, certain volumes of REO produced are further processed or rejected rather than sold as concentrate.

The following table presents our KPIs, which pertain to the Materials segment, for the quarterly periods indicated: