MP Materials Q2 2026 earnings: NdPr growth turns adjusted EBITDA positive

MP Materials (NYSE: MP) reported Q2 2026 revenue of $108.5 million, up 89% year over year from $57.4 million, while diluted loss narrowed to $0.11 per share from $0.19. Adjusted EBITDA turned positive as NdPr sales volumes and market pricing increased and the company recognized price protection agreement income. NdPr sales volume rose 127%, although Magnetics revenue declined 17% and start-up expenses remained elevated as the Independence facility progressed toward commercial magnet production.

Core earnings data

Revenue growth was driven by higher sales of NdPr oxide and metal and stronger market pricing. These gains more than offset the cessation of rare earth concentrate sales beginning in July 2025 and slightly lower magnetic precursor product revenue associated with the production start-up at Independence.

MP Materials also recognized $17.6 million of price protection agreement income, or PPA income, separately from revenue. Together, reported revenue and PPA income totaled $126.1 million for the quarter.

Business and segment performance

Materials accounted for most of the improvement, supported by higher NdPr production, sales volumes, and pricing. Magnetics remained profitable on an adjusted EBITDA basis, but its revenue and segment earnings declined from the prior-year quarter.

Materials Segment NdPr oxide and metal revenue increased 277% to $94.4 million. NdPr production rose 41% to 840 metric tons, while sales volume increased 127% to 1,006 metric tons. These sales figures include intercompany transactions with the Magnetics Segment.

Rare earth concentrate revenue fell to zero from $11.9 million following the cessation of concentrate sales, while rare earth oxide production declined 16% to 11,072 metric tons. Magnetics revenue decreased to $16.5 million from $19.9 million because of lower magnetic precursor product revenue associated with the Independence production start-up.

Segment results do not directly equal consolidated totals. MP Materials eliminated $3.7 million of intercompany revenue and $0.6 million of intercompany adjusted EBITDA, while corporate and other costs reduced consolidated adjusted EBITDA by $11.0 million.

PPA support and NdPr scale lifted adjusted EBITDA, but ramp costs kept GAAP earnings negative

Higher NdPr revenue and PPA income moved adjusted EBITDA from a $12.5 million loss to a $28.5 million profit. Cost of sales still increased to $72.3 million from $50.4 million, primarily because of the substantial increase in NdPr sales volume. SG&A rose to $35.2 million from $27.4 million as the company added headcount to support its downstream expansion.

The gap between positive adjusted EBITDA and the GAAP loss also reflected costs associated with expanding magnet production. Depreciation, depletion, and amortization increased to $35.4 million from $20.8 million, while reported start-up costs reached $14.4 million compared with $0.8 million a year earlier. Stock-based compensation increased to $11.3 million from $5.4 million.

MP Materials’ adjusted EBITDA calculation excluded $35.4 million of depreciation, depletion, and amortization, $13.6 million of initial start-up costs, $11.3 million of stock-based compensation, and certain other items. Consequently, the company remained at a $32.0 million GAAP operating loss and a $20.3 million net loss despite the positive adjusted result.

Cash flow and balance sheet

Cash flow disclosures cover the six months ended June 30 rather than Q2 alone. Operating activities generated $4.9 million during the first half of 2026, compared with a $66.9 million cash outflow in the corresponding 2025 period. Working-capital movements included a $58.7 million cash benefit from lower other receivables, partly offset by increases in trade receivables and inventories and a decline in deferred revenue.

Capital spending increased substantially as MP Materials expanded its production infrastructure. Additions to property, plant, and equipment reached $307.7 million during the first six months, compared with $59.5 million a year earlier.

Cash, cash equivalents, and short-term investments totaled $1.45 billion at June 30, 2026, down approximately $377.6 million from $1.83 billion at the end of 2025. The company also made $67.5 million of payments to retire long-term debt during the first half.

Management perspective

Management said magnet qualification at Independence advanced through additional customer deliveries and regulatory testing, while construction of the 10X facility accelerated. These activities remain part of the company’s effort to increase domestic magnet manufacturing capacity and deepen vertical integration.

MP Materials also signed a long-term agreement to supply separated gadolinium to a new U.S. aerospace and defense customer. Management described the agreement as economically attractive and as an expansion of both its customer base and heavy rare earth product portfolio, but it did not quantify the expected financial contribution.

The company also launched Project Swarm, an initiative intended to aggregate demand and standardize specifications for the drone industry. Subscription agreements were signed with multiple U.S. and allied customers, though revenue or shipment amounts were not disclosed.

Risks investors should monitor

• Reliance on NdPr pricing, volume, and PPA income: The quarter’s earnings improvement depended on higher NdPr sales, stronger market pricing, and $17.6 million of PPA income. Changes in those factors could materially affect adjusted EBITDA.
• Magnet production ramp costs: Start-up costs rose to $14.4 million, and customer qualification and regulatory testing remained underway. The timing and cost of reaching commercial production will influence GAAP profitability.
• Capital intensity: First-half additions to property, plant, and equipment reached $307.7 million, while cash and short-term investments declined from year-end. Continued facility expansion could require substantial additional capital deployment.
• Uneven segment performance: Materials produced the quarter’s growth, while Magnetics revenue declined 17%. Investors will need to watch whether Magnetics revenue improves as Independence moves through qualification and into commercial production.

Summary

MP Materials’ Q2 2026 results reflected a substantial increase in NdPr output and sales, stronger pricing, and PPA income, allowing adjusted EBITDA to turn positive. GAAP results remained negative because of higher depreciation, start-up expenses, stock-based compensation, and downstream expansion costs. The next operating milestones are the commercial ramp at Independence, progress at the 10X facility, and the conversion of new heavy rare earth and drone-industry agreements into measurable revenue and cash flow.