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 decreases in rare earth concentrate revenue for thethree and six months ended June 30, 2025, were primarily driven by the decreases in REO Sales Volume impacted by the strategic decision to cease shipments of rare earth concentrate to China as well as 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 andwe expect our rare earth concentrate revenues to be materially lowerin future periods aswe prioritize further processing the concentrate into separated rare earth products or stockpiling for future use.

The increases in NdPr oxide and metal revenuefor thethree and six months ended June 30, 2025, as compared to the respective prior year periods, was primarily driven by higher NdPr Production Volume as a result of ramping production of separated products throughout 2024. NdPr oxide and metal revenue for the three months ended June 30, 2025, also benefited from higher NdPr Realized Price per KG as compared to the prior year period. We currently expect to begin intersegment sales of NdPr oxide to the Magnetics segment starting in the second half of 2025.

The improvement in Materials Segment Adjusted EBITDAfor thethree and six months ended June 30, 2025, when compared to the respective prior year periods, were primarily due to the net increases in revenue, as discussed above, with the six months ended June 30, 2025, comparable period being partially offset byhigher cost of sales (excluding depreciation, depletion and amortization and stock-based compensation expense) (“Segment COS”).

While the year-over-year Segment COS remained relatively flat for the comparable three months ended June 30, 2025, the increase in Segment COSfor thesix months ended June 30, 2025, was driven primarily by higher 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 and six months ended June 30, 2025, benefited from (i) lower reserves on certain of our work in process and finished goods inventories, which decreased by $8.3 million and $11.1 million, respectively, when compared to the respective prior year periods; (ii) $1.9 million and $4.7 million, respectively, of higher 45X Credit impacts in the respective current year periods; and (iii) $1.9 million in lower repairs and maintenance expenses, attributable to thickener equipment damage in the second quarter of 2024.

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 first quarter 2025, with no comparable sales during the prior year periods (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 increases in corporate expenses and otherfor thethree and six months ended June 30, 2025, as compared to the respective prior year periods, 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: