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    MP
    Earnings call· Mar 2026(Q1 FY26)

    MP Materials Corp. / DE Q1 FY26 earnings call MP

    May 7, 2026 Source

    Executive summary

    MP Materials Q1 FY26 — Record NDPR Oxide Sales and Strong Operational Progress

    MP Materials delivered a strong Q1 FY26, marked by record NDPR oxide production and sales, alongside significant progress in its Magnetics division. The company is advancing key growth projects, including the heavy rare earth separation circuit and the 10x magnetics facility, leveraging learnings from prior ramp-ups. Management emphasized the critical role of NDPR oxide as a binding constraint for non-China magnet production, positioning MP Materials favorably with its vertically integrated strategy and contracted customer base.

    Highlights

    5

    • Record NDPR oxide production of 917 metric tons, up 63% year-over-year and 28% sequentially.

    • Total NDPR oxide sales of 1,006 metric tons, more than double prior year levels and 79% higher than Q4.

    • Materials segment revenue and PPA income doubled year-over-year to $114.5 million.

    • Consolidated adjusted diluted EPS of $0.03 per share, compared to a loss of $0.12 per share in Q1 FY25.

    • Ended the quarter with a strong balance sheet, holding $1.7 billion in cash and short-term investments.

    Concerns

    3

    • Adjusted EBITDA declined modestly sequentially to $36.6 million, primarily reflecting the composition of PPA income in the prior quarter.

    • Second quarter NDPR oxide production is expected to see a single-digit quarter-over-quarter decline due to semiannual maintenance outage and project installations.

    • Magnetics segment revenue will be impacted by the eventual roll-off of $62 million in prepaid precursor product deliveries over the next 4 quarters.

    Guidance & targets

    10
    CategoryTargetConfidence
    Heavy Rare Earth Separation Circuit Commissioning
    Begin commissioning in Q2 FY26
    medium materiality
    High
    Terbium and Dysprosium Production
    Produce later this year
    medium materiality
    High
    Q2 Realized Pricing (NDPR)
    Low to mid-90s per kilogram
    medium materiality
    High
    PPA Income from Stockpiled Concentrate
    Not expect to generate a material amount
    medium materiality
    High
    Initial Magnet Revenue
    In the second half of 2026
    medium materiality
    High
    Full Year CapEx
    $500 million to $600 million
    high materiality
    High
    Q2 NDPR Oxide Production
    Single-digit quarter-over-quarter decline
    medium materiality
    High
    Q3 NDPR Oxide Production
    Significant sequential growth
    medium materiality
    High
    NDPR Oxide Production Run Rate
    500 tonne per month run rate
    medium materiality
    High
    Independence Production for Apple
    Towards the middle of next year
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Materials
    Strong sales volumes, improved market pricing, and PPA agreement contributed to doubled revenue and PPA income. Record NDPR oxide production and sales, highest first quarter REO output to date.
    NPR oxide production: 917 metric tonsNPR oxide production YoY growth: 63%NPR oxide production QoQ growth: 28%NDPR oxide sales: 1,006 metric tonsNDPR oxide sales YoY growth: >100%NDPR oxide sales QoQ growth: 79%REO concentrate production: ~13,000 metric tonsREO concentrate production YoY growth: 6%
    		$114.5M100%—$36.7M Adjusted EBITDA
    Magnetics
    Revenue driven by magnetic precursor production and Independence. Magnetic performance is meeting customer specifications, with focus on ramping core processes and customer validation.
    		$21.1M——$9.6M Adjusted EBITDA

    Operational metrics

    10
    Consolidated Revenue and PPA Income
    $132.9M28% sequential increase
    Q1 FY26

    Driven by record NDPR oxide sales volumes, higher market prices, and PPA income.

    Consolidated Adjusted EBITDA
    $36.6MModestly declined sequentially
    Q1 FY26

    Primarily reflecting the composition of PPA income in the prior quarter.

    Adjusted Diluted EPS
    $0.03Compared to a loss of $0.12 per share in Q1 FY25
    Q1 FY26

    Positive EPS compared to a loss in the prior year.

    NDPR Oxide and Metal on Hand
    815
    As of March 31, 2026

    Includes material in transit, at toll processors, or waiting for shipment.

    Apple Prepayment (Q1 FY26)
    $32M
    Q1 FY26

    Received in February, bringing total Apple prepayments to $72 million.

    Remaining Prepaid Revenue (Magnetic Precursors)
    $62M
    Over next 4 quarters

    To be earned for magnetic precursor products on a modestly declining basis quarter-to-quarter. After this, production capacity will be dedicated to finished magnets.

    Capital expenditure
    $77.4M
    Q1 FY26

    60% of CapEx attributable to the Magnetics segment.

    Cash and Short-Term Investments
    $1.7B
    As of March 31, 2026

    Fully funds long-term capital plan and preserves balance sheet.

    Western Magnet Capacity (announced)
    More than 60,000 tons
    Over the coming years (next 18-24 months)

    Adamis research projects this capacity, growing to something like north of 100,000 tons over the next 5 years. This implies approximately 30,000 tons of NDPR demand.

    Magnet Output to NDPR Oxide Feedstock Ratio
    2:1
    General industry rule

    A useful rule of thumb in the industry.

    Industry KPIs

    4
    MetricValueDetails
    Unit cash cost—
    Growth project CAPEX first production—
    Ore grade recovery drilling by deposit—
    Production sales volume by metal and by mine917 metric tons (NDPR oxide production); 1,006 metric tons (NDPR oxide sales); ~13,000 metric tons (REO concentrate production)metric tons

    Deals & partnerships

    4
    AppleAgreement for magnet recycling line and magnet production$72M (total prepayments)

    Prepayments for magnetic precursor products, with approximately $62M of prepaid revenue to be earned over the next 4 quarters. Magnet recycling line developed in support of this agreement.

    General Motors (GM)Partnership for magnet production

    Foundation customer for the Independence facility, undergoing rigorous product qualification (PPAP) process.

    Department of WarPartnership for magnet production and high-purity samarium oxide

    Provides support for the 10x facility and includes a commitment to producing high-purity samarium oxide, with plans for gadolinium oxide production.

    Newest U.S. customerInitial shipments of NDPR oxide

    Began initial shipments to this customer, referenced last quarter.

    Capital programs

    5
    Heavy Rare Earth Separation Circuiton schedule

    Benefit: Produce terbium and dysprosium

    Expected to begin commissioning in Q2 FY26. Will also generate intermediate feedstreams (mixed samarium europium gadolinium and holmium tyletesium plus yttrium concentrate) for future separation or sale.

    Magnet Recycling Line (Apple Agreement)advancing engineering and procurement
    Spent to date: Conceptual design completed

    Benefit: Incremental source of third-party feedstocks (light and heavy rare earths)

    Developed in support of the Apple agreement, closing the loop on end-to-end capabilities.

    10x Magnetics Facilityunderway
    Start: Q1 FY26 (groundbreaking)

    Recently broke ground, construction activities expected to accelerate throughout the year with Department of War support. Leveraging lessons from Independence for faster execution.

    Independence Expansionadvancing
    Spent to date: Design nearing completion; all major equipment in order

    Benefit: 3,000 metric tons of annual magnet capacity

    Expansion efforts towards 3,000 metric tons of annual magnet capacity, also in support of the Apple agreement. On track for targeted start of production dates.

    Chlor-alkali capabilityrecommissioning in short order

    Benefit: Reduce external dependencies, lower environmental footprint, reduce costs for hydrochloric acid and sodium hydroxide

    First phase of capability expected to be recommissioned in short order, providing resiliency and efficiency.

    Risks & headwinds

    3
    Sequential decline in NDPR oxide productionQ2 FY26

    Single-digit quarter-over-quarter decline

    Mitigation: Semiannual maintenance outage concluded in April, followed by expected significant sequential growth in Q3 as benefits are fully realized.

    Lumpiness in Magnetics segment financialsNext several quarters

    Impacted by roll-off of prepaid precursor deliveries and timing of magnet production ramp

    Mitigation: Working to pick up the delta with increasing magnet volumes once through the PPAP process and bringing in new customers. Magnetic characteristics of parts are performing well.

    Cost challenges from general inflationOngoing

    Not immune from general inflation, e.g., gasoline and diesel costs

    Mitigation: Shipping and logistics costs are minimal for the Materials segment. The company's process does not rely on sulfuric acid, avoiding specific cost challenges. Contracts in Magnetics are structured to protect against raw material price increases.

    What to watch in Q2 FY26

    5

    Heavy Rare Earth Separation Circuit Commissioning

    Q2 FY26
    CurrentOn schedule to begin commissioning in Q2 FY26
    TargetSuccessful commissioning and progress towards production of terbium and dysprosium

    Why it matters

    This project is key to diversifying MP Materials' product portfolio and supporting broader supply chain development for heavy rare earths.

    Our heavy earth separation circuit remains on schedule to begin commissioning in Q2 and to produce terbium and dysprosium later this year.

    Q&A highlights

    6

    How would MP Materials characterize its knowledge and operational moat in magnet production, and what are the primary barriers for greenfield competitors?

    MP Materials benefits from its existing refinery and the long, expensive, and difficult process of bringing new projects online. The company is skeptical that competitors can quickly ramp projects and achieve expected pricing. The binding constraint of NDPR oxide, with limited non-China supply, further strengthens MP's position. The company's contracted business with GM, Apple, and the Department of War provides financial protection.

    “I look around and I say, your investment is our opportunity, sort of the Litinsky corollary to that statement for MP, which is just we want to see a lot out there. We're a little skeptical that people will be able to bring online projects as quickly and get pricing that they think and all of those things that go into when sort of the fantasy story becomes a reality.”

    asked by George Gianarikas · answered by James Litinsky

    2 min read6 chapters

    Detailed Narrative

    01

    NDPR Oxide as a Binding Constraint

    Management reiterated that NDPR oxide will remain the binding constraint for economically viable rare earth magnet production outside of China for at least the next 5 years. With over 60,000 tons of announced Western magnet capacity (requiring ~30,000 tons of NDPR oxide) expected in the next 18-24 months, and Lynas' output secured by Japan, MP Materials sees a significant supply gap. The company believes its vertically integrated strategy and control over feedstock positions it uniquely to capitalize on this demand.

    02

    Magnetics Division Progress and Strategy

    The Magnetics division is making steady progress commissioning commercial production equipment, with magnetic performance meeting customer specifications. The company is focused on ramping core processes and advancing through customer validation. Learnings from the Independence facility are being applied to the 10x project, which recently broke ground, aiming for faster and more efficient execution. The long-term strategy involves building out the customer base for 10x methodically, recognizing the high demand and strategic importance of the supply chain.

    03

    Operational Optimizations and Cost Reduction

    MP Materials continues to experiment with new processes and ore body components at Mountain Pass, yielding valuable insights for operational optimizations. Process enhancements contributed to strong NDPR production, and meaningful opportunities for improvement exist across roasting, leaching, and product finishing circuits. These initiatives are expected to increase production volumes and reduce costs over time⏳, with a clear path to achieving targeted throughput and cost structures, including a prior target of $40/kg.

    04

    Impact of Geopolitical Events and Physical AI

    Recent geopolitical events, particularly in the Middle East, have accelerated the recognition of drones and robotics as the future of warfare, magnifying demand for rare earth magnetics. Management sees physical AI, including humanoid robotics, as a critical demand accelerant. The company is focused on developing heavy-free magnets for these emerging applications, positioning itself for potential 'parabolic' demand increases as technology breakthroughs occur.

    05

    Capital Allocation and Contractual Protection

    The company maintains a disciplined capital allocation strategy, ensuring that its magnetics business operates at market-equivalent pricing for materials, maximizing returns across its integrated platform. Contracts, including those with GM, Apple, and the Department of War, provide durable long-term growth and cash flow. Management emphasized thoughtful protection against raw material price increases in its magnetics contracts, ensuring financial stability.

    06

    Project Execution and IP Advancement

    MP Materials has learned significantly from building its Magnetics business from scratch, including developing a non-China equipment sourcing strategy and navigating the IP landscape. The company aims to leap ahead technologically, with a goal for 10x to make MP Materials the best magnet maker in the world from an IP standpoint. This focus on internal capabilities and continuous learning is expected to make future projects, like 10x, significantly smoother in terms of startup and ramp-up.

    AI-generated summary of the company’s earnings call. Not investment advice.