MP Materials (MP 5.29%), operator of the only scaled rare earth mining and processing facility in North America, reported earnings for Q2 2025 on August 7, 2025. The most important news was an 84% jump in GAAP revenue to $57.4 million, driven by record neodymium-praseodymium (NdPr) production and initial Magnetics segment sales. Results easily surpassed analyst estimates: Non-GAAP EPS stood at $(0.13), a $0.07 beat against the expected $(0.20), and GAAP revenue exceeded projections by more than $11 million. Overall, the quarter marked a significant inflection point as the company transitions from a raw materials supplier toward building a domestic supply chain for rare earth magnets.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $(0.13) | $(0.20) | $(0.17) | N/A |
| Revenue | $57.4 million | $46.14 million | N/A | N/A |
| Revenue – Materials Segment | $37.5 million | $31.3 million | 20 % | |
| Revenue – Magnetics Segment | $19.9 million | $0 | N/M |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Recent Focus
MP Materials operates the Mountain Pass facility in California, supplying rare earth elements (REE) vital for manufacturing permanent magnets used in electric vehicles, wind turbines, and electronics. It is the primary source for magnet-grade REEs in North America and underpins U.S. industrial and defense supply chains.
The company’s core strategy is vertical integration. It aims to control the full value chain: from mining and processing of rare earth oxides, through refining into NdPr products, to producing magnetic precursor materials and, eventually, finished magnets at its Independence Facility. Key success factors include the ability to scale production, secure strategic partnerships with leading companies, and align with U.S. government efforts to reduce dependency on foreign sources for critical materials. Sustainability and efficient downstream operations also remain central to its long-term strategy.
Key Developments During the Quarter
During the period, record production and a breakthrough in downstream sales marked a new phase for the business. NdPr oxide output reached 597 metric tons, up 119% year over year. Total rare earth oxide (REO) production climbed 45% year over year, and NdPr sales volumes more than tripled to 443 metric tons. This surge, along with a shift toward separated NdPr products, sharply increased the segment’s sales value. At the same time, per-unit costs for these products remained elevated, as refining facilities continued their ramp-up and ran below optimal efficiency.
Expansion was fueled by new customer deliveries of magnetic precursor products.
Strategic shifts were also notable. The company completely stopped shipping rare earth concentrate to China, While this action decreased REO sales volumes by 54% and reduced concentrate sales by $12.5 million compared to the prior year, it shifted the business further toward separated higher-value products and U.S. and allied customers. Partnerships announced in July with the U.S. Department of Defense and Apple signaled growing recognition of MP Materials as a critical domestic platform for advanced manufacturing.
Inventories rose to $173.3 million as of June 30, 2025, from $127.0 million as of December 31, 2024. Operating cash flow (GAAP) remained negative, with a six-month outflow of $(66.9) million for the first half of 2025. The ongoing ramp of production, investment in working capital, and new facility construction—such as the heavy rare earth separation plant and a chloralkali chemical facility—are major cash uses. The company’s liquidity, measured by cash and short-term investments, stood at $753.7 million as of June 30, 2025.
Segment and Product Details
The Materials segment, which covers mining and chemical upgrading of REOs and the refining of NdPr, generated $37.5 million in GAAP revenue. The jump came mainly from separated NdPr products, where sales grew by 226% in volume and 283% in revenue, offsetting a large drop in lower-value concentrate sales. Average realized prices for NdPr rose 19% year over year, supporting overall performance. However, the division posted an adjusted EBITDA loss of $(12.7) million, reflecting persistent margin pressure until higher-scale operation normalizes costs.
The Magnetics segment, responsible for producing magnetic precursor products and preparing for full magnet manufacturing, advanced sharply. Magnetics revenue reached $19.9 million, with Magnetics segment adjusted EBITDA of $8.1 million. This progress was made possible by the commissioning of new production lines at the Independence Facility. Magnetics ramped industrial-scale deliveries to customers, including the auto industry, and is positioned to produce finished magnets at scale by year end. This step supports the company’s goal of restoring the full rare earth magnet supply chain domestically.
Outlook and What to Watch Next
Management did not provide formal financial guidance for the rest of fiscal 2025. However, it noted expectations for continued growth in Magnetics segment revenue, projecting it could stabilize at roughly $20 million per quarter in the near future. Leadership highlighted the importance of recently announced agreements with the Department of Defense and Apple, which may drive sustained growth but did not disclose numeric targets. No further earnings or revenue guidance was given in the release.
Looking ahead, investors should track the company’s progress in bringing major new facilities online, improving unit costs in separated products, and further pivoting toward finished magnet sales. Inventory and working capital trends will matter as REO concentrate sales to China remain halted. MP does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
