Ramaco Q2 Revenue Beats by 16%

Key Points

• GAAP revenue surpassed expectations at $152.96 million in Q2 2025, beating estimates by 16.3%, but profitability missed, with GAAP EPS coming in at ($0.29) versus an expected GAAP EPS of ($0.18).

• Adjusted EBITDA (non-GAAP) dropped 69% year over year to $9.0 million, mainly due to declining metallurgical coal prices and record production.

• The company accelerated its rare earth element project, now targeting initial commercial production in 2027 as disclosed in the July 2025 Preliminary Economic Assessment, and securing a $6.1 million Wyoming grant.

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Ramaco Resources (NASDAQ:METC), a U.S. mining company known for its metallurgical coal operations and growing focus on rare earth elements, reported earnings for Q2 2025 on July 31, 2025. The primary headline: GAAP revenue for Q2 2025 came in at $152.96 million, beating analyst expectations by more than $21 million. Still, the company posted a net loss, with diluted GAAP EPS at ($0.29), a wider loss than the GAAP loss of ($0.18) analysts expected. Production reached an all-time record, but lower coal prices, compressed margins, and higher project expenses weighed heavily on profits. The overall takeaway is of a company delivering on volume and operational control, but still feeling the effects of a tough pricing environment—while making a rapid and capital-intensive push into rare earth element mining.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Strategic Focus

Ramaco operates a portfolio of mining complexes in the United States, producing high-quality metallurgical coal. This type of coal is essential for producing steel, making Ramaco’s business directly tied to trends in construction, vehicle manufacturing, and heavy industry. The company’s Elk Creek Complex is a core asset, supported by additional mines in the Appalachian region and a strategic property, the Brook Mine, in Wyoming.

The company is also expanding into rare earth elements (REE), which are critical to electronics, defense systems, and energy transition technologies. In recent quarters, Ramaco has shifted resources to develop its Brook Mine REE project, with the goal of becoming a dual-platform energy and minerals supplier. Cost management, quality reserves, regulatory compliance, and geographic positioning are key to its strategy. Success depends on its ability to control production costs, meet stringent regulations, and diversify revenue away from traditional coal markets.

Second Quarter Highlights: Volumes Up, Margins Down, REE Acceleration

Production and sales volumes reached new highs. Company-wide, Ramaco produced 999,000 tons of coal, up 11% from Q2 2024, and sold 1,079,000 tons, an 18% increase versus Q2 2024. The Elk Creek Complex led growth, hitting a record 688,000 tons, marking a 35% year-over-year improvement. However, output from the Berwind, Knox Creek, and Maben mines fell 21% compared to Q2 2024, as Ramaco idled the higher-cost Big Creek Jawbone unit. These moves reflect the company’s focus on high-margin tons and minimizing exposure to weak spot market prices.

Even with stronger sales volumes boosting top-line revenue, weak global prices for metallurgical coal limited profitability. The realized price per ton dropped 14% from the prior year to $123, while the primary industry price indices declined by about $40 per ton compared to Q2 2024. A larger share of fixed-price contracts and domestic shipments helped soften the blow. Still, most export tons continued to track volatile market indices, contributing to margin pressure.

Operational cost control remained a strength. Non-GAAP cash cost per ton sold was $103, down 5% year over year. However, non-GAAP cash margin per ton shrank by 43% to $20. This highlights how low non-GAAP cash costs could not fully offset external pricing declines. The company pointed out that "cash costs continue to remain firmly in the first quartile of the U.S. cost curve.*" signaling it is among the least expensive producers in the country. Management responded by reducing guidance for 2025: production expectations now range from 3.9 to 4.3 million tons and sales from 4.1 to 4.5 million tons. The focus is on avoiding shipments that would generate a loss.

The most significant development outside the coal segment was the acceleration of Ramaco’s rare earth initiative. Mining began at the Brook Mine in June 2025, with plans to begin construction of a pilot processing facility by fall 2025. Initial commercial production of rare earth oxides is now targeted for 2027, according to the July 2025 Preliminary Economic Assessment (Summary PEA) by Fluor Corporation, a year earlier than previously planned and at the request of the U.S. government. This project received a $6.1 million matching grant from the State of Wyoming in March 2025. The Brook Mine’s latest technical reports estimate a resource of approximately 1.7 million tons of total rare earth oxides, as disclosed in the Weir International Technical Report Summary (TRS) prepared in accordance with SEC Regulation S-K 1300, including critical minerals like scandium, gallium, and germanium. Ramaco believes it will hold the world’s only primary mine for these currently import-restricted elements.

Financial and Operational Performance Drivers

From a financial perspective, the quarter was notable for its GAAP revenue beat and GAAP profit shortfall. The reported GAAP loss of ($0.29) per share was substantially worse than the expected GAAP loss of ($0.18) per share. Adjusted EBITDA, representing operating earnings before interest, tax, depreciation, and amortization, tumbled 69% year over year to $9.0 million (non-GAAP). Capital expenditures were $15.1 million, lower than both Q1 2025 and Q2 2024, as Ramaco curtailed growth projects in response to 2025 market conditions.

Liquidity improved, reaching $87.3 million at quarter end and rising to about $105 million as of July 31, 2025, following new debt issuance. Workforce expansion continued, with close to 1,000 employees now supporting its coal and rare earth businesses across four states. The company raised its full-year 2025 selling, general, and administrative (SG&A) cost guidance to $39–$43 million, mainly due to ramp-up spending on the rare earth project.

Segment metrics showed the continued benefit and limitation of Ramaco’s business mix. Domestic, fixed-price sales—which comprised over 40% of 2025 sales commitments as of June 30, 2025—were committed to North American customers at an average realized fixed price of $152 per ton. In contrast, exports were sold at fixed and index rates that trailed domestic prices, exposing Ramaco to the ongoing softness in seaborne demand. Management reiterated that it will not sell "tons at a loss into a saturated market" opting for capacity flexibility and strategic inventory builds until market conditions improve.

On the regulatory front, the designation of metallurgical coal as a critical mineral adds long-term value, especially as new manufacturing tax credits for critical minerals come online in 2026. Environmental stewardship and regulatory compliance remain integrated into operations and are noted as ongoing cost factors.

Looking Ahead: Guidance, Projects, and Dividend

Management adjusted its expectations for 2025, guiding to the low end of previously set production (3.9–4.3 million tons) and sales (4.1–4.5 million tons) ranges. The rare earth business is now on a faster path, with pilot-scale output expected in 2026 and full-scale commercial production targeted for 2027, as disclosed by management in July 2025. Operating and capital plans remain dependent on broader market conditions for metallurgical coal. Guidance for cash costs per ton was lowered slightly to $96–$102; annual capital spending is now expected to finish between $55 million and $65 million, reduced from earlier projections.

Ramaco pays a regular dividend. The company declared a dividend of $0.1811 per share on Class B common stock, payable June 13, 2025. For Class A shares, the quarterly dividend of $0.06875 per share will be paid in Class B stock. No significant change in the dividend trend was noted this quarter. Looking forward, investors are watching the rare earth project’s capital needs, execution risk, and planned output, all of which could impact cash flow and strategic direction. Market observers will also monitor cash margin stabilization, further cost improvements, and the timeline for potential payoffs from U.S. mineral policy incentives and tax credits.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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