MP Materials (NYSE:MP) reported second-quarter 2026 revenue and PPA income of $126.1 million, more than double the prior-year period, as sales volumes of neodymium-praseodymium, or NdPr, increased 127% year over year. Consolidated adjusted EBITDA was $28.5 million, improving by $41 million from a year earlier, while adjusted diluted earnings per share improved $0.12 to a loss of $0.01 per share.
Chief Executive Officer James Litinsky said the company continued to expand both its rare-earth materials and magnetics businesses during the quarter, including higher NdPr output, progress on heavy rare-earth separation, customer qualification work at its Independence magnet facility, and construction of its planned 10X magnet manufacturing facility.
Materials production and sales increase
The Materials segment generated $113.2 million in revenue plus PPA income and $32.5 million in adjusted EBITDA, representing a $45 million year-over-year improvement.
Chief Operating Officer Michael Rosenthal said the company expects third-quarter NdPr production to exceed 1,000 metric tons as plant reliability, throughput and operational consistency improve. The company is working through reliability issues affecting a limited number of circuits and expects the benefits of higher throughput, process efficiency, lower maintenance intensity and the restart of its chlor-alkali facility to build progressively through 2027.
For the third quarter, Chief Financial Officer Ryan Corbett said MP Materials expects NdPr oxide realized prices in the high-$90s per kilogram, with PPA income of roughly $10 per kilogram. Materials sales volume is expected to be “flattish” sequentially, depending on shipment timing, sales mix and metallization lead times. As of June 30, the company had approximately 650 metric tons of NdPr oxide and metal on hand, in transit, at toll processors or awaiting shipment.
Heavy rare-earth projects and gadolinium agreement
MP Materials said it achieved mechanical completion of its first heavy rare-earth separation circuit in May and is preparing to introduce feed into the facility. The company remains on track to begin producing terbium and dysprosium later this year, though Rosenthal said the exact pace of the ramp will depend on commissioning activities and the company’s focus on product quality.
The company also announced a long-term agreement to supply gadolinium oxide to a U.S. aerospace and defense manufacturer. Litinsky described the agreement as a sizable nine-figure deal over multiple years. Corbett said the contract includes locked-in economics and could offer opportunities for greater volumes over time.
MP Materials is advancing a samarium program with first production planned for 2028. Following an extended pilot campaign, the company is also moving forward with engineering and procurement for a gadolinium separation project on a similar timeline. Rosenthal said the company plans to break ground during August on an expanded Mountain Pass area intended to house magnet recycling and additional heavy rare-earth separation and finishing capacity.
Management said the company is evaluating opportunities across other rare earths contained in its ore body, including yttrium. The company also said its heavy rare-earth separation circuit was designed to process third-party feedstocks.
Magnetics business prepares for commercial shipments
At MP Materials’ Independence facility in Texas, the company delivered magnets to General Motors for in-vehicle qualification testing during the quarter. The company continues to expect initial commercial magnet shipments to begin in the fourth quarter, followed by a gradual production ramp.
Rosenthal said the facility is demonstrating the capability and consistency needed to support customer volume ramp requirements, though qualification also involves capacity staging, batch traceability, quality systems integration and vehicle-level testing. Corbett said early magnet production will create variable quarterly financial results as precursor product sales decline and commercial magnet volumes begin to scale.
The Magnetics segment’s revenue declined slightly from the first quarter, reflecting a greater proportion of costs tied to magnet-production startup rather than precursor production. However, precursor production generated adjusted EBITDA margins above 40% during the quarter.
The company has approximately $46 million of prepaid revenue from magnetic precursor products remaining to be recognized over the next three to four quarters, declining modestly each quarter. Once that prepayment is fully recognized, MP Materials expects to dedicate metal production capacity to its own finished magnet manufacturing rather than external precursor sales.
10X construction and capital spending
MP Materials spent $230.3 million on capital expenditures during the second quarter, with more than 60% directed toward the Magnetics segment. The company acquired the 10X site for approximately $80 million during the quarter, bringing year-to-date capital spending to $308 million as of June 30. It maintained full-year capital expenditure guidance of $500 million to $600 million.
Construction at 10X is advancing, with foundation work underway and long-lead equipment ordered. Litinsky said during closing remarks that the company had received confirmation it was “officially vertical” at the site.
MP Materials ended the quarter with $1.45 billion in cash and short-term investments. Corbett said the balance sheet, together with anticipated improvement in operating cash flow from increasing oxide and magnet sales, fully funds the company’s long-term capital plan.
Litinsky also discussed Project Swarm, an initiative intended to aggregate and standardize future magnet demand among U.S. and allied drone manufacturers. The company said it has signed subscription agreements with several participants and views the program as a way to provide emerging autonomous-system companies access to future manufacturing capacity while retaining flexibility in product development.
About MP Materials (NYSE:MP)
MP Materials Corporation operates as a vertically integrated producer of rare earth materials in North America. The company owns and manages the Mountain Pass Rare Earth Mine and Processing Facility in California, the only commercially viable rare earth mining and processing site in the United States. MP Materials extracts, separates and refines critical rare earth elements—such as neodymium, praseodymium, and cerium—which are essential inputs for permanent magnets used in electric vehicles, wind turbines, and various defense applications.
The Mountain Pass mine first began commercial rare earth production in the 1950s and was later operated by Molycorp until its bankruptcy in 2015.
