MP Materials Corp. / DE (MP)

Results of Operations

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Consolidated Results

Revenue

NdPr oxide and metal revenue consists of sales of NdPr oxide and metal produced at Mountain Pass under our distribution agreement with Sumitomo Corporation of Americas, under an offtake agreement with a leading U.S. technology and industrial company entered into during the first quarter of 2026, as well as other sales under individual sales agreements.

Rare earth concentrate revenue consisted of sales of traditional and roasted rare earth concentrate. For the majority of our sales of rare earth concentrate, the sales price was based on a preliminary market price (net of taxes, tariffs, and certain other agreed charges) per MT, with an adjustment for the ultimate market price of the product realized upon final sale, including the impact of changes in exchange rates.

Magnetic precursor products revenue consists of sales of magnetic precursor products, including NdPr metal, produced at the Independence Facility and sold in the U.S. Sales of these products commenced in the first quarter of 2025 pursuant to a long-term supply agreement with GM.

Consolidated total revenue increased for the three and six months ended June 30, 2026, as compared to the respective prior year periods, driven by higher revenue in the Materials Segment, due to the continued ramping of production and sales of separated products, as well as higher market prices, partially offset by the cessation of our concentrate sales in July 2025. Additionally, consolidated total revenue for the six months ended June 30, 2026, benefited from an increase in revenue from magnetic precursor products associated with the ramp in production year over year in our Magnetics Segment. See the “Segment Results” section below for further discussion of changes in revenue.

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Price protection agreement income

Our Price Protection Agreement with the DoW (“PPA”) for our NdPr products (e.g., concentrate, oxide and metal) (collectively, “NdPr Products”) commenced on October 1, 2025. Given market prices for NdPr Products during the periods presented below, we recognized price protection agreement income (“PPA Income”) based on the right to receive cash from the DoW for the difference between $110 per kilogram equivalent of NdPr included in the NdPr Products and the Benchmark Quarterly Average Volume Weighted Price (as defined in the PPA) for the NdPr Products produced at Mountain Pass that were sold or produced and stockpiled during the three and six months ended June 30, 2026. A substantial majority of the PPA Income recognized during the three and six months ended June 30, 2026, pertained to sales to third parties.

Cost of sales (excluding depreciation, depletion and amortization)

Cost of sales (excluding depreciation, depletion and amortization) (“COS”) consists of mining, processing, separations, and metal making-related labor costs (including wages and salaries, benefits, bonuses, and stock-based compensation); mining, processing, separations, and metal making-related supplies and reagents; parts and labor for the maintenance of our mining fleet and processing and separating facilities; other facilities-related costs (such as property taxes and utilities); packaging materials; and shipping and freight costs.

The increases in COS for the three and six months ended June 30, 2026, were driven by higher sales of NdPr oxide and metal during the current year periods as NdPr Sales Volumes for these periods increased by 127% and 122%, respectively, over the prior year’s respective periods. Furthermore, NdPr oxide and metal per-unit production costs are necessarily higher than those of rare earth concentrate due to the additional processing required. Such costs pertain primarily to chemical reagents, employee labor, maintenance expenses, and consumables. COS for the three and six months ended June 30, 2026, also benefited from a higher Section 45X Advanced Manufacturing Production Credit (the “45X Credit”), which resulted in lower COS year over year of $3.5 million and $7.9 million, respectively, for the three and six months ended June 30, 2026.

As we produce and sell more separated products at Mountain Pass, we expect that COS may continue to increase throughout 2026 even as certain per-unit production efficiencies and economies of scale are expected to be achieved. Accordingly, in future periods, increases in sales of NdPr oxide, metal, and/or heavy rare earths may result in higher year-over-year COS. Additionally, should we further ramp the production of magnetic precursor products as well as magnets at Independence, COS may also increase.

Selling, general and administrative

Selling, general and administrative (“SG&A”) expenses consist primarily of personnel costs (including salaries, benefits, bonuses, and stock-based compensation) of our administrative functions such as executives, accounting and finance, legal, and information technology; professional services (including legal, regulatory, audit and others); software-related costs; certain engineering expenses; insurance, license and permit costs; corporate office lease cost; office supplies; and certain environmental, health and safety expenses.

The increases in SG&A expenses for the three and six months ended June 30, 2026, as compared to the respective prior year periods, were driven primarily by higher personnel costs, which increased by $7.1 million and $14.3 million, respectively,

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primarily due to the continued growth in our employee headcount to support our downstream expansion, as well as higher stock-based compensation expense, which was impacted by the increased headcount and performance-based stock awards recently granted.

Depreciation, depletion and amortization

Depreciation, depletion and amortization (“DD&A”) primarily consists of depreciation of property, plant and equipment, depletion of mineral rights and beginning with the fourth quarter of 2025, amortization of the right to the price floor protection granted by the DoW under the PPA.

The year-over-year increases in DD&A for the three and six months ended June 30, 2026, primarily reflect $10.9 million and $22.1 million, respectively, of amortization related to the price protection agreement upfront asset, with no comparable expense in the respective prior year periods.

Start-up costs

Start-up costs relate to costs associated with restarting an existing facility or commissioning a new facility, circuit or process of our production, manufacturing, or separations facilities prior to the achievement of commercial production, that do not qualify for capitalization. Such costs, which are expensed as incurred, include certain salaries and wages, outside services, parts, raw materials, training, and utilities, among other items, used or consumed directly in these start-up activities.

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ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our Consolidated Financial Statements and related notes appearing elsewhere in this annual report on Form 10-K for the year ended December 31, 2025 (this “Annual Report”). A discussion of changes in our consolidated and segment results of operations and/or cash flows between years ended December 31, 2024 and 2023, has been omitted from this Annual Report, but may be found in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Comparison of the Years Ended December 31, 2024, 2023, and 2022,” of our annual report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission on February 28, 2025. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “Item 1A. Risk Factors” and elsewhere in this Annual Report. See also “Cautionary Note Regarding Forward-Looking Statements.”

Executive Overview

MP Materials Corp., including its subsidiaries (“we,” “our,” “us” and the “Company”), is the largest producer of rare earth materials in the Western Hemisphere. We own and operate the Mountain Pass Rare Earth Mine and Processing Facility (“Mountain Pass”) located near Mountain Pass, San Bernardino County, California, the only rare earth mining and processing site of scale in North America. Rare earth products are critical inputs in hundreds of existing and emerging clean-tech applications including electric vehicles and wind turbines as well as robotics, drones, and defense applications. Additionally, we own and operate a rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas (“Independence” or the “Independence Facility”).

Our reportable segments, which are primarily based on our internal organizational structure and types of products, are our two operating segments—Materials and Magnetics.

The Materials segment represents our upstream and midstream operations, which primarily consist of Mountain Pass, a fully integrated mining and refining facility producing refined rare earth oxides (“REO”) and related products. The Materials segment generates revenue primarily from sales of neodymium-praseodymium (“NdPr”) oxide and metal, primarily sold to customers in Japan, South Korea, and broader Asia. The Materials segment historically generated the majority of its revenue from sales of rare earth concentrate primarily to a distributor that, in turn, typically sold that product to refiners in China.

The Magnetics segment represents our downstream magnet manufacturing and related operations, which currently consist of the Independence Facility, a fully integrated metal, alloy, and magnet manufacturing plant. The Magnetics segment began generating revenue from sales of magnetic precursor products to a single customer in the U.S. in the first quarter of 2025 and commenced the manufacturing of neodymium-iron-boron (“NdFeB”) permanent magnets in December 2025.

Certain rare earth elements (“REE”) serve as critical inputs for the rare earth magnets inside the electric motors and generators powering carbon-reducing technologies such as hybrid and electric vehicles (referred to collectively as “xEVs”), advanced electronics, aerospace and defense systems, energy products, robotics and many other high-growth, advanced technologies. Our integrated operations combine low production costs with high environmental standards, thereby restoring American leadership to a critical industry with a strong commitment to sustainability.

Highlights from the year ended December 31, 2025, include:

•Achieved record production volumes of both REO in concentrate and NdPr oxide at Mountain Pass;

•Commenced sales of magnetic precursor products and manufacturing of magnets at Independence;

•Entered into a transformational public-private partnership with the U.S. Department of War (“DoW”) to accelerate the build-out of an end-to-end U.S. rare earth magnet supply chain and reduce foreign dependency, which consisted of a comprehensive, long-term package of commitments from the DoW, including pricing support and a long-term offtake agreement;

•Completed a public offering of 13.6 million shares at $53.35 per share and received net proceeds of $724.2 million;

•Entered into a long-term supply agreement with Apple Inc. (NASDAQ: AAPL) (“Apple”), for magnet production at Independence and the development and installation of scaled recycling capabilities at Mountain Pass, whereby Apple agreed to make prepayments in the aggregate amount of $200.0 million for the purchase of magnets;

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•Received the final $50.0 million prepayment for magnetic precursor products pursuant to the long-term supply agreement with General Motors Company (NYSE: GM) (“GM”); and

•Continued to maintain a strong balance sheet with cash, cash equivalents and short-term investments totaling $1.8 billion as of December 31, 2025, after incurring capital expenditures to advance the completion of the Independence Facility, as well as various projects at Mountain Pass, including the HREE Facility (as defined in Note 17, “Government Grants,” in the notes to the Consolidated Financial Statements), recycling facilities, and the chlor-alkali facilities.

Our Materials segment delivered strong operational performance in 2025, with our upstream concentrate operations continuing to deliver record production levels and making significant progress toward our Upstream 60K target. Although throughput of separated products remained below design capacity, we saw substantial improvements throughout the year, producing a record 2,599 metric tons (“MTs”) of NdPr oxide, an increase of 101% when compared to prior year.

To align with the DoW Transaction Agreements and our strategic domestic supply chain objectives, we ceased all products sales to China in July 2025. While this strategic decision resulted in a 21% year-over-year revenue decline for the Materials segment, the reduction was tempered by higher NdPr oxide and metal revenues, driven by higher volumes and realized prices, as well as income we recognized from the price protection agreement with the DoW during the fourth quarter of 2025. As a result, the Materials segment achieved positive Segment Adjusted EBITDA.

Our Magnetics segment entered a new phase of growth in 2025, generating $66.9 million in revenue, marking its first year of substantial operating and financial results. Commissioning at Independence advanced rapidly, and our partnership with Apple, along with the start of NdFeB permanent magnet manufacturing in late 2025, accelerated the development of our U.S. magnetics platform.

Recent Developments

Public-Private Partnership with U.S. Department of War

On July 9, 2025, we entered into definitive agreements with the DoW, formerly known as the Department of Defense, (collectively, the “DoW Transaction Agreements”) establishing a transformational public-private partnership with the DoW to accelerate the build-out of an end-to-end U.S. rare earth magnet supply chain and reduce foreign dependency (the “DoW Transactions”).

As part of the DoW Transactions, we agreed to use reasonable best efforts to (i) construct a second domestic magnet manufacturing facility (the “10X Facility”), which will produce sintered NdFeB permanent magnets, (ii) extend heavy rare earth elements (“HREE”) refining capability at Mountain Pass to include the separation of samarium oxide, (iii) recommission the chlor-alkali facilities at Mountain Pass and (iv) expand capacity at the Independence Facility to a projected 3,000 MTs of magnets annually. We also agreed to use up to $600 million of our existing cash to fund these projects.

Additionally, the DoW Transactions consist of a comprehensive, long-term package of commitments from the DoW, including pricing support, a long-term offtake agreement and certain financing arrangements. Key terms include the following:

Pricing & Supply Commitments

Price Protection Agreement

The NdPr price floor protection agreement with the DoW (the “Price Protection Agreement” or “PPA”) establishes a price floor for our NdPr products (e.g., concentrate, oxide and metal) (collectively, “NdPr Products”), commencing on October 1, 2025, and continuing for approximately ten years through December 31, 2035. Throughout the PPA’s term, we will have the right to receive cash from, or the obligation to deliver cash to, the DoW based on (i) our designation of NdPr Products produced and/or sold (the “NdPr Designation”) and (ii) the Benchmark Quarterly Average Volume Weighted Price (as defined in the PPA).

At the conclusion of each quarter, we may elect, at our option, any of the following NdPr Designations (without duplication):

•“Stockpile” represents produced, but not yet sold NdPr Product,

•“Affiliate sales” represents internally sold NdPr Product, such as sales from the Materials segment to the Magnetics segment, or

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•“Third party sales” represents externally sold NdPr Product.

On a quarterly basis, the DoW will pay us an amount per kilogram (“kg”) equivalent of NdPr Products equal to the shortfall between $110 and the Benchmark Quarterly Average Volume Weighted Price. Once the 10X Facility reaches full production capacity (the “Production Milestone Date”), and the Benchmark Quarterly Average Volume Weighted Price exceeds $110, we will pay the DoW 30% of the amount by which the Benchmark Quarterly Average Volume Weighted Price exceeds $110.

DoW Offtake Agreement

We entered into a magnet offtake agreement with the DoW (the “DoW Offtake Agreement”), pursuant to which we will sell to the DoW the entire amount of magnets produced at the 10X Facility; provided, however, that at the DoW’s request, or at our request and with the DoW’s consent, we may sell up to 100% of magnet production to other third party customers. The DoW will acquire the magnets at a price equal to their production costs (as defined in the DoW Offtake Agreement), plus the guaranteed EBITDA discussed below. The DoW Offtake Agreement’s term will continue through 10 years from the date at which the 10X Facility begins operations and is capable of producing any quantity of magnets (the “Commercial Operation Date”).

In accordance with the DoW Offtake Agreement, the DoW guaranteed that the 10X Facility will generate at least $140 million of EBITDA (as defined in the DoW Offtake Agreement) on an annual basis after the Production Milestone Date, adjusted annually in each calendar year following 2025 for inflation at a rate equal to 2% (the “Threshold EBITDA Amount”). Between the Commercial Operation Date and the Production Milestone Date, we are entitled to a proportion of the Threshold EBITDA Amount based on demonstrated capacity levels. The DoW will make quarterly payments to us in an amount equal to 25% of the Threshold EBITDA Amount, subject to annual true-up.

Commencing on the Production Milestone Date, if we sell magnets to third-party customers, the DoW will be entitled to receive for each calendar year (i) the first $30 million of EBITDA attributable to the 10X Facility that exceeds the Threshold EBITDA Amount (the “Initial Excess Amount”) and thereafter (ii) 50% of the EBITDA attributable to the 10X Facility that exceeds the Initial Excess Amount.

Under the DoW Offtake Agreement, before the Commercial Operation Date, we are entitled to receive reimbursement from the DoW for certain incremental costs incurred by us in connection with engineering, development and start-up of the 10X Facility and for designing magnets to t

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