TradingKey - MP Materials released its earnings for the second quarter of the fiscal 2025 on August 7th after the bell.

The smaller loss and the better revenue were surely welcomed by investors, and the stock is up 8.50% in the post-bell session.

MP Materials produces both Rare Earth Oxides (REO) and Neodymium-Praseodymium (NdPr), materials extensively used in the supply chain of Electric Vehicles (EV) and AI-related hardware.

REO refers to a broad group of compounds containing rare earth elements (e.g., neodymium, praseodymium, cerium, lanthanum, etc.) in oxide form. This is more like a raw material that is shipped for further processing and then used for making processors. Recently the REO sales dropped more than 50% due to halted shipments to China. However, this is not an issue for MP as this is generally a low-margin business that the company wants to move away from.

Neodymium-Praseodymium (NdPr) is a refined product that comes from REO. NdPr is higher within the value chain, with a better margin. The production of neodymium-praseodymium (NdPr) was strong and was able to partially offset the broader rare earth oxides weakness.

The magnetic division, which is an even higher margin business, performed even more impressively, by doubling quarter over quarter from $10 million to $20 million.

Overall, MP has good reasons to celebrate, as the company gets substantial support from the government and Apple (AAPL), and at the same time moving away from the low-margin commodity business and going up the value chain with more refined products.

Management did not provide extensive guidance for the future bit it expects continued growth in NdPr production and sales volumes, the halt of REO shipments to China may still pose some near-term issues, but the company is confident they can find alternative markets in other countries like Japan and Korea.

MP Materials 2Q25 Earnings Preview: The New Stock Darling?

TradingKey - MP Materials will release its earnings for the second quarter of the fiscal 2025 on August 7th after the bell.

- 2Q25 Loss per share: $0.19 estimate vs. 2Q24 actual of $0.17 (-11% y/y)

- 2Q25 Revenue: $47.65m estimate vs. 2Q24 actual of $31.26m (+52% y/y)

But what shall we expect from the coming earnings?

Recent Investments:

MP Materials’ share price has tripled since the beginning of June, attracting significant investor attention. This happened primarily due to the recent investments from both the Department of Defense and Apple of $400 million and $500 million respectively. The DoD deal is particularly interesting because it enforces a price floor for neodymium-praseodymium (NdPr) of $110 per kilogram, nearly twice the current market price quoted by China. The price floor will give incentives for MP materials to maintain high levels of production so it can meet the growing demand for rare earths. Investors will seek more details with regard to these two deals.  

Production Achievements: 

In Q1 2025, the company achieved record NdPr oxide production of 563 metric tons (36% sequential increase) and its second-highest quarterly rare earth oxide (REO) production at 12,213 metric tons (10% y-o-y increase). Investors will likely look for updates on production levels, especially given potential maintenance outages noted in2024 that could impact Q2 2025 output.

Magnetic Division:

The Magnetics represents 10% of the total revenue and achieved positive Adjusted EBITDA in Q1 2025, due to the partnership with General Motors. Updates on further progress in magnet will still be of an interest.  

Conclusion

As the company is getting closer and closer towards profitability, supported by the strong backing of DoD and the demand for rare earth, the future looks bright.

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