MP Materials Corp. (MP) Earnings & Analysis

Latest quarter

MP Materials reported Q2 FY2026 revenue of $108.5 million, above the consensus estimate of $99.2 million and up from $57.4 million a year earlier. The company reported a diluted loss per share of −$0.11, compared with a loss of −$0.19 a year earlier.

The filing attributed the revenue increase to higher Materials segment revenue, as production and sales of separated products ramped and market prices rose. It said the cessation of concentrate sales partly offset those gains. The filing also said magnetic precursor product revenue declined year over year as the start of magnet production changed how costs were allocated under the products’ pricing mechanism.

MP Materials reported a gross margin of 49.6%, compared with 12.1% a year earlier, and an operating margin of −29.5%, compared with −76.5%. Free cash flow was −$223.5 million, compared with −$30.3 million a year earlier. The filing said spending on property, plant and equipment increased in the first half, including construction and initial purchases for the 10X facility.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO James Litinsky said customer demand continued to outpace production growth for neodymium and praseodymium, or NdPr. He said MP Materials met its production objectives despite an extended planned shutdown at Mountain Pass and expected volume growth in the next quarter.

CFO Ryan Corbett said he expected Materials segment sales volumes to be roughly flat sequentially in the third quarter, depending on shipment timing, metallization lead times and the sales mix. He said realized NdPr oxide pricing would leave price protection agreement income per kilogram, while he expected little income from the agreement on stockpiled NdPr in concentrate. He also expected overall price protection income to decline slightly from the prior quarter.

Litinsky said MP Materials had delivered magnets to GM for vehicle qualification testing. Asked about the process, Corbett said it involved staging capacity for motor plants, integrating quality and traceability systems, and observing how the parts perform in vehicles. He said initial commercial deliveries were expected in the fourth quarter.

Corbett said Magnetics revenue declined sequentially because more costs were allocated to the start of magnet production rather than precursor products, affecting precursor pricing. He said prepaid precursor revenue would be recognized over coming quarters and that metal production would then be dedicated to finished magnets rather than external precursor sales.

Litinsky said the company was commissioning its dysprosium and terbium separation circuit and had signed a long-term gadolinium oxide supply agreement. Asked about the contract, Corbett said its economics were locked in and that additional volumes could offer returns because most capital would be deployed upfront.

On investment, Litinsky said foundation work at 10X was underway and production equipment had been ordered. Asked about costs, Corbett said consistent production at target levels, process improvements and the chlor-alkali facility could help lower costs. In the discussion of supply competition, Litinsky said NdPr remained a constraint and described disruption in aerospace supply chains from scarcity-driven allocations.

Guidance

On the previous call, MP Materials expected initial magnet revenue in FY2026, beginning with modest deliveries. On the latest call, CFO Ryan Corbett said initial commercial magnet deliveries were expected in the fourth quarter, with capacity ramping over the following quarters.