MP Materials (MP) Q2 2024 earnings summary

Executive summary

• Q2 2024 was marked by a 51% year-over-year revenue decline to $31.3 million, driven by lower REO sales volumes and prices, major unplanned downtime, and higher costs, partially offset by new separated NdPr sales and initial metal product sales.

• Net loss for Q2 2024 was $34.1 million, compared to net income of $7.4 million in Q2 2023, reflecting operational challenges, higher costs, and increased depreciation.

• NdPr production more than doubled sequentially to 272 metric tons, with expectations for at least 50% further sequential growth in Q3 and material unit cost improvements as production ramps.

• Signed significant multi-year NdPr supply agreements with a global automaker and the Department of Defense, securing future demand.

• Commissioned a prototype magnet production line in Fort Worth, with commercial metal production on track for later in 2024 and a $50 million customer prepayment received.

Financial highlights

• Q2 2024 revenue was $31.3 million, down from $64.0 million in Q2 2023 and $48.7 million in Q1 2024; net loss was $34.1 million.

• Adjusted EBITDA for Q2 2024 was $(27.1) million; adjusted diluted EPS was $(0.17); free cash flow for the first half of 2024 was $(108.5) million.

• REO production was 9,084 MT, down 16% year-over-year; REO sales volume was 5,839 MT, down 43% year-over-year.

• Realized REO pricing was $4,183/MT; NdPr realized pricing was $48/kg in Q2 2024.

• Inventory reserve of $11.8 million was taken due to elevated production costs and market price pressure.

Outlook and guidance

• Q3 is expected to see record upstream production and at least 50% sequential growth in NdPr oxide production, with further cost reductions by year-end.

• Concentrate production volumes in Q3 are projected to be above typical non-shutdown levels; realized pricing for REO and NdPr is expected to decline low single digits sequentially.

• Commercial metal production in Fort Worth remains on track to begin in 2024.

• Additional $190 million in customer prepayments and tax credits anticipated by end of 2025.

• 2024 CapEx guidance is $200–$250 million, focused on Fort Worth, HREE Facility, and growth projects.