MP Materials Corp.

Q1 2026 Earnings Call — May 7, 2026

take our first question from George Giannourakis with Canaccord Genuity. Please unmute your line and ask a question. Hi, everyone. Can you hear me? Yes. Hey, George. Hey, thank you for taking my questions. Jim, you just sort of addressed this, and I'm sure you've noticed, but there's now a lot of momentum outside of MP to build a Western magnetic set of champions. And you've been on the journey for some time. And as you move towards your 10,000 ton target, how would you characterize the knowledge or operational moat you've built through stages one and three? And specifically, if you're a greenfield competitor today, what are the primary set of barriers to catching up? Sure. Well, thanks, George. And yeah, I mean, as you said, there's a lot out there. I think capital formation is generally helpful. You know, we want to see more in this supply chain. So it's good to see a lot of projects out there. Obviously, with respect to heavies, for example, it's great to see capital formation on that because, you know, from a from a heavy standpoint. We are focused on a pretty diversified feedstock supply chain. We're not necessarily as interested in upstream project ownership.

So we want to see a lot of capital formation out there. We think that having our existing refineries is really a significant advantage, at least for the foreseeable future, five plus years, because any of the projects that we see around the world, you know, ultimately, if it's non-Chinese supply chain, it's ultimately going to come into or very likely come into, you know, our refinery. And so we don't necessarily need to be involved in those projects to grow our business, but we can certainly benefit from them. And what I would say, I mean, I think what... I guess, you know, these projects are really hard having done this for a decade now. I think that there's a tendency out there to look at projects and say, you know, P times Q equals this. And so that's the cash flow of the project. And, you know, the reality is, is that these typically take... a long time to bring online. They're very often more expensive than you think. It takes several years to ramp. You know, you don't just build a facility and turn it on.

And, you know, often when you look at sort of the potential of a deposit versus what the reality is, once you get through the processing challenges, even if it's all the way upstream, just to get recoveries, you know, what you typically find is sort of what you're your sort of theoretical opportunity is, is not necessarily what the resulting opportunity is. And so I think that's a it's a long winded way of saying that you know, we really, we take a careful view about where we're going to commit capital. Because, you know, I joking, you may have heard me say this before, George, but, you know, there's that famous Bezos expression, your margin is my opportunity. You know, we view it as, I look around and I say, your investment is our opportunity, sort of the Latinsky corollary to that statement for MP, which is just, you know, we want to see a lot out there. We're a little skeptical that, People will be able to bring online, you know, projects as quickly and get pricing that they think. And, you know, all of those things that go into when sort of the the fantasy story becomes a reality. But but we do think that ultimately. It is good for the supply chain.

It's great to see governments around the world excited. It's great to see capital formation. And I think ultimately it's going to be really beneficial to us because we have the great position of We control our fate here from the standpoint of we continue to execute. Our cash flows are contracted. If you look at GM, Apple, the Department of War, and the growth of our business through 10X, having all of that business contracted, knowing that we have, from a financial standpoint, we're completely protected. And then lastly, and sorry for the long-winded answer, but it's such an excellent question, just given everything we see out there. But I do want to reiterate, George, that the comments i made on the on the uh you know in the prepared remarks about ndpr oxide being the binding constraint um i really would you know not not to pitch a competitor but if but i would recommend people look at the atomous intelligence research and if you look at the next call it 18 months to two years we see call it roughly 60 000 tons of magnet capacity in the non China, you know, sort of the non-China world growing to something like north of 100,000 tons.

And if you look at the only real, you know, scaled material out there is MP and Linus. And Linus is spoken for with Japan. Obviously, we're going to be able to feed our magnet facility. And so, you know, I see all of these magnet businesses out there growing. And I'm just wondering where the feedstock is going to come from. And so, again, I think it positions us really well. You know, I want to be realistic. I don't want to discourage a lot of investment around the space. But I do think it's going to set up some amazing opportunities for us. It's okay to pitch out. It's still great. And just one quick follow-up. How are you adjusting, if at all, your metallization strategy as you ramp production in magnets? Thank you. Oh, sure. Michael, do you want to cover metallization? Sure. Thanks, George. Our view is to have a hybrid approach where we continue to operate and expand our capability at independence. We will have capability at 10x and And we're talking to domestic and international partners on further metallization. We currently utilize certain total processors, and we expect to continue to use that while we look at other low-cost metallization options around the world. Thanks.

Thanks. Next question.

Our next question comes from Brian Lee with Goldman Sachs. Please go ahead and ask your question. Hey guys, how's it going? Thanks for taking my questions. I guess the first question I had was just around the materials segment. EBITDA margins, they were pretty healthy here, maybe ahead of expectations. One, would you say that's fair and You know, is that related to better price or are you seeing anything on the cost side as well? Maybe if you can walk us through some of the puts and takes and then also how to think about, you know, EBITDA margins off these levels going forward as, you know, as volumes ramp. Yeah. Hey, Brian, it's Ryan. Thanks for the question. I think as we look at the performance in the material segment, certainly we were pleased with Michael and his team's ability to continue to ramp production ahead of expectations there. So I think that's great. We also had a very successful sales quarter yesterday. As we've talked about in the past, there are always quarterly puts and takes on shipment timing as it relates to sales recognized ultimately in that three-month period.

But certainly with the exciting new partner we announced last quarter, we were able to start deliveries into that contract as well. And so that drove some incremental strength in sales volumes. I think that we continue to see a clear path to us pulling costs out of that business and You know, we see no material change to the trajectory that we've laid out as we get ultimately to run rate volumes or stably operating at run rate volumes. And so, you know, we still continue to march towards towards that. You know, we have work to do there, but I think that the path is quite clear there. So I don't expect that there's really anything in this quarter that, you know, caught us materially by surprise. I think we're really just heads down in execution mode, continuing to move towards our ultimate targeted throughput and targeted cost structure. Okay, great. Helpful. Appreciate that. And then maybe just bigger picture. a lot of good operational milestones here and discussion. But on the customer development side, I know last quarter you had announced a new customer.

I know it's not reasonable to assume a new customer every quarter, but can you speak to kind of where the engagement activity levels are and then kind of how you're looking to secure more off takes and maybe what types of customers you're most engaged with here. Thank you. Sure, Brian. I mean, the engagement is it's very high and it remains, you know, it's, it's it, it has been pretty extraordinary and it remains as such. I think we're having a lot of great conversations. Certainly what we see around the world with the change in, in warfare, I think there's a particular and increasing recognition of, that the world has changed. And then obviously, given all of the excitement that we see in physical AI and what that means, I think already NDPR is a binding constraint in the magnetics business. And I think as we see that growth, I think that people, particularly in some of these growth verticals, are recognizing that as well. So it positions us really well. What I would say, and just remind you, and I know you've heard me say this, but Our business is contracted. We're in a good position with respect to, obviously, independence is going to be essentially for GM and Apple.

And then when we look at 10X, we will take our time to kind of thoughtfully plan um, you know, thoughtfully sort of build out the customer base of that facility. Um, but it certainly is not for lack of interest or demand. We will, uh, approach that methodically. And, and I would say there'll be some, there'll be some customers that are, you know, extraordinarily sensitive where you, you, you know, you certainly won't hear a name or an announcement. Um, and, uh, and then there'll be some that, you know, that want, want to announce, but, but what I would say is that, you know, that discussion continues. We're gonna, uh, it's gonna, I think it's gonna be, uh, really attractive for us and uh you know we'll we'll just keep you know stay tuned obviously for for things we announce in time all right makes sense i'll pass it on thanks guys

our next question comes from corinne blanchett with joint bank research please go ahead with your question Hey, good afternoon, guys. Thank you for taking my question. Can you maybe talk about the cadence of production that you're expecting for the rest of the year? And then my second question would be maybe like a general view on, you know, the Middle East conflict, any change in customer approach or demand. Thank you. Michael, why don't you go ahead and take the first part and then I'll do the second part. Okay, great. Thanks. As I mentioned in my prepared remarks, we expect production of NDPR in the second quarter to be down slightly quarter over quarter. We do expect the third quarter to show a material improvement again. And then I expect continued progress towards reaching our 500 ton per month target. run rate by the end of this year. So no real change to what we previously discussed. And then, Corinne, on your second part on the Middle East, sort of just expanding on that, touching on it again, it started over the past few years as we saw what happened in Ukraine and the developments around essentially physical AI, the use of drone and robotic warfare.

And then I would say that the events in the Middle East have certainly just sort of accelerated and magnified, I guess, pun intended, the perspective around, you know, drones and robotics being the future of warfare. So what I would say is, you know, I think that the the importance of this supply chain was sort of already widely known. So, you know, it's sort of like, is infinity times two still infinity kind of thing? Like, I don't think we necessarily needed those events to remind people of, you know, the status quo and sort of the rare earth magnetics for now, you know, as a national security industry needed to change. But there's no question that It is just a further recognition and maybe even pulling that timetable and the scale of that demand forward. I think that it's very likely that the The future of warfare will be around millions, if eventually not billions, of robots and drones working in cohesion. And obviously, that is just a huge demand accelerant for rare earth magnetics. Thank you.

As a reminder, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen.

We'll

take our next question from Lawson Winder with Bank of America Securities. Please go ahead with your question. Lawson, please go ahead with your question. Okay, thank you very much, operator. Good evening, gentlemen. Nice quarter. Great update. With independence, the ramp up appears to be going extremely well. At this point, I expect you to be somewhat close to knowing a sensible timeline to reaching nameplate capacity of 1,000 tons on the first phase. Is that something you could start to guide us to now? And then, yeah, then I have a follow-up on that one. Yeah. Hey, Lawson, you know, I'd say we're obviously incredibly pleased with the performance of the team there. You know, there is plenty ahead of us, though. You know, we are now at the point where all of the commercial equipment is commissioned. And we're in the stage right now where we're in the product qualification process with our foundational customer, with GM. As we've probably talked about before, that is a fairly rigorous and demanding process that's not really just about, you know, can you make the part? It's about defining a very detailed quality management plan, you know, testing run-at-rate scenarios.

And frankly, a lot of this has to do as well with taking validation parts that have to be made on the commercial equipment, not the NPI equipment, putting those parts into motors, doing regulatory testing, things of that scale. And so there are a lot of puts and takes as to how that will look over the next couple of quarters. And so, you know, we're pleased with where the team is, but certainly, you know, we expect that to take a bit of time and then, you know, deliveries will be modest and then grow over time. You know, we've we've guided to the fact that we expect to be in production for our second marquee customer there towards the middle of next year for Apple. And so when you start to layer those volumes on, you know, certainly the momentum starts to build. So, you know, from that perspective, I think we're pleased with our progress. And. follow up on that would just be thinking about 10X and really the second part of independence with Apple.

I mean, how would you frame the timing of the next phase and then 10X given the first of kind learnings that you've already had at independence? Yeah, look, I think certainly we have learned a lot of lessons from building this business from scratch, right? I mean, our first Magnetics employee was in 2021. It's pretty amazing to see the progress that we've made, but there are a tremendous set of learnings, including right now as we move through the process. I think Michael explained it well in his prepared remarks that will give us, and frankly, circling back to George's question, the moat that we've built from this operational know-how in building this business out is tremendously valuable. And so, you know, each incremental customer hopefully is probably easier than the one before it. You know, we've given rough guidance on where we think 10X will be from a timeline perspective. We are moving with extreme urgency to bring that facility online, you know, in line with our partners of the Department of War. And so, you know, it's really just all hands on deck from an execution perspective, getting those ramped up as quickly as we can. Thank you very much.

Our next question comes from Bill Peterson with JP Morgan. Please unmute your line and ask your question. Yeah, hi. Good afternoon. Thanks for taking the question and nice job on the quarterly execution. I want to ask a few questions as sort of follow-ups, but maybe with some more precision on some previously asked questions. Taking the cost side, so a year ago you had a cost bridge outlining a target to drive costs from over $60 per kilogram down to $40 on higher utilization, fixed cost absorption, as well as benefits from the chloralkali. You discussed the chloralkali earlier, but as a snapshot, I wanted to check on where you are on that journey, notwithstanding the second quarter impact from downtime, as well as your path to get to that prior target. Yeah, sure, Bill. It's Ryan. Thanks for the question. I think as I laid out before, with all of the inputs we sort of put into that guidance, we don't see any meaningful deviation from our ultimate plan. I think if you think about taking a snapshot in time in any given quarter, making, let's call it roughly 1,000 tons last quarter. There are a lot of different ways to make 1,000 tons. Some are lower costs, some are higher costs.

And I think certainly as we move towards stably producing at our run rate target, that is going to unlock that operating leverage that we've talked about. Within any Single quarter, there are a lot of moving pieces on investing in this de-bottlenecking as we speak. And then certainly, I think one of the impacts that you're seeing right now where you don't have perfect visibility into the standalone NDPR operation is the fact that we're investing quite heavily that shows up in the P&L in ramping staffing for the heavyware separation facility, as well as getting ahead of ramping for team and tools for that chloralkali plant ahead of it being online. And so when you fast forward over the next several quarters, you combine getting to our targeted throughput and you bring these operations online is when you'll really start to see the leverage flow through. Yeah, thanks for that context. And then maybe following up on Austin's question. So I'd like to clarify the magnet revenue trajectory for the balance of the year into next year, taking into consideration the declining precursor sales ahead of the finished magnet ramp for your customer.

So I guess in essence, should we assume overall revenues in the magnet segment would decline at some point in the back half of the year early next year before ramping as a finished magnets ramp? Just trying to get a sense for how we should model that business from a revenue side. Yeah, look, I think what we see right now is obviously getting through the PPAP process is going to unlock moving into revenue on the magnet side. You know, the reality is we are producing behind the scenes, but we need to get into a saleable PPAP status to start recognizing revenue there. And so certainly, you know, I think we gave you the moving pieces of the remaining deferred revenue that will roll off and sort of start to – start to decline sequentially. And then we are working as quickly as we can to pick up the delta there on the magnet side. But we'll keep you updated as we get through these next couple of quarters. I think the reality for us is Zooming out for a second, certainly heads down executing, there's going to be lumpiness in the next several quarters.

But if you look at how Jim explained where we are in this business, the operation that we see right now, magnetic characteristics of our parts are performing extremely well. And so, you know, we've proven out at this point that we can take what we've done, you know, on smaller scale and scale it up. And so it's just a matter of time. And so, you know, we're looking forward, obviously, to layering and increasing volumes once we're through the PPAP process, bringing in our next set of customers. And so, you know, over the next several quarters, that financial model will certainly start to play out. Yeah, thanks, Ryan. And thanks to the team for all the insights.

Our next question comes from David Sunderland with Bard. Please go ahead with your question. Hey, good evening, guys. Thank you for the time. I appreciate you taking my questions. I actually want to start by going back to one of the parts of Lawson's question as well, just on 10x. Ryan, appreciate you talking about the learnings and wondering if you guys could just expand maybe on how the learnings from independents might make 10x more efficient on a dollars per capacity basis or timeline or Any other metrics on how version 2.0 might be better than the first, if you will? Sure, Michael, why don't you go ahead and take that one? Sure. Well, certainly we've learned a huge amount over the last couple of years in designing, building, and then ramping new facilities. So there's a lot of engineering that can be, to some extent, copy and paste. We don't need to reestablish certain vendor relationships. We've leveraged the existing knowledge. So the design process will be a lot faster and less complicated. That's prone to mistake, change order, rework, et cetera. So we're certainly the pace of engineering design construction will be a lot faster than expected.

We also think the ramp of independence over starting last year and through 2021. this year and beyond will give us tremendous insight into our process, producing great magnets, driving costs down. So that will be applied from day one into operation of 10X. And the fact that our teams will be able to travel between the two different sites will enable us to leverage that knowledge without having to rebuild it all. So we certainly expect 10X to be significantly smoother in terms of startup than we will look back on for independence. But of course, the scale that we're doing, additional product complexity, there'll be no doubt its share of challenges as well. And just, hey, Davis, this is Jim. Just adding on to what Michael said, there's one point he hit that I think is really important when he mentioned about equipment vendors and how we think about our Magnet business. If you go back to when we went public about five years ago and we started the Magnet business from scratch, there were really a handful of things that I was focused on in building that business. Obviously, number one is hire a great team. Right.

We hired we hired a great leader and then we started building out a great team there. Number two on that list was was developing a non China equipment sourcing strategy. You know, at the time, even though the world was in a very different state, you know, we thought it would be sort of very odd and hard to argue that it made sense for non China supply chain companies. for rare earth magnetics, but then be wholly reliant on Chinese equipment, right? And so we started, and this probably was, you know, certainly expensive and painful to us, you know, over the years, but we really built that facility from day one with the thought in mind that we needed to truly restore this supply chain all the way through the equipment. And then, you know, the last thing that I think we're compounding on is that the last piece of that, you know, sort of great team adding to that team equipment, but is sort of mapping and understanding the IP landscape and specifically within their grain boundary diffusion strategy. You know, certainly the Chinese magnetics makers are outstanding at pushing the boundary diffusion.

I guess, again, another pun intended, but sort of Chinese and Japanese industry are very effective about advancing the IP and making the best magnets for the buck, so to speak. And so we were very focused on that from the beginning. And I think we've now... taking the MP team to the cutting edge. And as you may have heard me say, I believe over the next few years, we will ultimately leap ahead from an IP standpoint. One of the goals that I've set for the team with 10X is that I believe that when that facility comes online, MP will be from an IP standpoint, we will leap ahead and be the best magnet maker in the world. Obviously, we're going to learn a lot of painful lessons as we ramp that facility and as we grow our business. But we're already thinking about all of those things to make sure that we're leaping ahead technologically. It's not just about sort of building a giant box and putting equipment in it. Super helpful. Thank you both.

And maybe just one more, maybe a boring housekeeping question, but probably for you, Ryan, I just wonder if you could talk at all about contract adjusters or any other inflation protection mechanisms you guys might have to, I guess, mitigate the impact of increased shipping and logistics costs, or maybe this will manifest in a longer than typical sales leg or any other considerations there. And thank you guys very much. Sure. As it relates to the material segment, at least, you know, the the shipping and logistics component, at least from sort of, you know, cost of fulfillment perspective is extremely minimal relative to the cost of the product. And so, you know, even with sort of inflation out there, you know, in logistics costs, I don't expect that to be a material driver of the business. As it relates to the cost structure and materials, certainly we've heard other producers, particularly those that are relying on sulfuric for their process, talk about challenges and cost challenges there. I think we're fortunate that, as Michael mentioned, those are not the materials that we use in our process. And so, of course, we're not immune from sort of general inflation.

Gasoline and diesel certainly are used in our mining fleet, but that is a very small proportion of the cost structure. And so, overall there, we feel pretty good. And then magnetics is sort of a bit of a different beast in terms of the way we've set up the contracting. I would say that without getting into details of individual contracts, we have always been thoughtful about protecting ourselves from raw material price increases wherever they come from, any type of raw materials. And so we feel quite good about how we've contracted around that.

Our next question comes from Max with BMO. Please unmute your line and ask a question. We'll take

the next question from Sam Brandes with Redbush Securities. Please unmute your line and ask a question. Hi, can you guys hear me okay? Yes. Hey, Sam. Hey, so Jim, with your kind of framing as NDPR oxide as the binding constraint for non-China magnet production over the next five plus years, it's definitely compelling with 6,000 tons an ounce scaling towards 100,000 plus limited feedstock. With independence essentially spoken for between GM and Apple, as you guys mentioned, and 10X building out, how are you thinking about the right balance between locking in additional long-dated offtake agreements and also preserving optionality to capture pricing and margin as the supply and demand balance changes? Yeah. And by the way, Sam, it's it's 60,000 over sort of the next call it 18 months, six zero, which, by the way, OK, fly approximately 30,000 tons of NDPR demand, which so it's it's sort of a you already it's it's It's sort of blindingly obvious that NDPR is the binding constraint just over the next year or two. And then, you know, that number 60 is supposed to go to over 100 over the next five years. Obviously, all of those won't get built.

But, you know, I do scratch my head if you are building a magnet business today. Um, without a, a certain and dedicated feedstock, you know, at scale, uh, and that's demonstrable. I, I just don't see how you can produce a magnet. Um, uh, to answer your question, it's an excellent question. And I think this actually goes down to, um, The sort of the foundation of the company when we started building this business, you know, we were very we've been we've said this many, many times, which is, you know, we view these businesses as distinct the midstream and the downstream, although the strategy to be vertically integrated is critical. we want to make sure that we maximize returns and that we're thoughtful, i.e. we don't rob Peter to pay Paul. So that when we look at our magnetics business, we don't want to subsidize by taking bad pricing, let's say, in the midstream business and think, oh, gee, we invested this money in a magnet business and we gave some kind of price protection and we ended up losing money on that investment.

No, it's for the most part, we want to make sure that our magnet business is getting material at the equivalent of market, right? Now, obviously there's some puts and takes on contract structure, but for the most part, the magnet business is getting material at market and then is sort of expecting a very attractive return from there. So that's a long-winded way of saying that we will benefit from that exposure. But I actually think there's a compounding effect, which is, Yes, the price will go up, in my opinion, for NDPR. I don't think so much so for the heavies. I think actually that if you look – I know that there's some talk out there of sort of heavies. And I think, again, nobody knows with commodities prices, but I think versus market expectation, I wouldn't be surprised to see the – the heaviest prices, you know, specifically the magnetics heavies, DYTB declined, not the others, just the magnetics ones, DYTB declined quite substantially from here because they sort of are secondary now to this binding constraint of NDPR. But we do expect to benefit from the price of NDPR as well as then the fact that we have this business together. Customers are going to want to come to us.

I mean, if you were out there and you wanted to buy a Magnet, why would you risk supply chain? Even if you're willing to pay more and all the things to onshore, why would you go out and take an unstable supply chain situation? It's kind of the reason you're there. And so I think we can sit in front of customers and we have, I mean, we're seeing this real time where because we have the feedstock, we're able to contract long-term attractive business at incremental attractive margins in the Magnet business on top of getting the benefit of the price of the commodity. Great. No, that was very helpful. And to kind of follow up, so you have framed physical AI, drones, robotics, autonomous d

Q4 2025 Earnings Call — February 26, 2026

Analyst Lawson Winder (Bank of America): Thank you very much, Operator. And hello, Jim and Ryan and Michael. Thank you for today's update. This has been super helpful. And congratulations on a first quarter realizing much higher pricing from your PPA agreement. If I could, I just ask one in a follow-up. So on the OEM, can you tell us whether or not it's a U.S.-based OEM or is it a foreign OEM?

Executive Ryan: I think Jim mentioned in his prepared remarks, you know, well, we're not going to get into specific details. This is one of America's leading technology companies. I think what this agreement speaks to broadly is what we've been talking about for a long while, which is accelerating demand for NDPR and the value of the platform that we provide, being able to be a solutions provider for these types of companies that are looking to transition their supply chain away from China, being able to address the various points in the supply chain from raw materials all the way through to magnets, I think is super important.

Analyst Lawson Winder (Bank of America): Okay. No, that's fair. I understand the desire not to give too much detail. And then just on the timeline with 10X, I mean, things seem to be moving quite quickly here. And we originally thought of 2029 as being kind of a target year. I mean, is there a possibility to move that forward? Could 10X potentially develop slightly more quickly than what you guys had originally envisioned?

Executive Ryan: Well, 10X procurement and long lead equipment focus and a lot of design and engineering. I mean, that all really started Lawson last July. Once we signed the agreement, we got to work building the new team there, coordinating that new team with our existing team, and then thinking about all of the equipment and pieces of the process that we could do while we then ran Lawson, you know, our process for site selection. What I would say is I've directed the team to think of this project like, you know, you've probably heard the term zero-based budgeting. This is a zero-based days project. We are focused on getting this online as quickly as possible. You know, we've said we'll be commissioning that in 2028. We've made a lot of progress. We think it's on track and we'll just, we'll keep trying to make up as much time as we can as aggressively as we possibly can. And it's going really well.

Analyst George Janarikas (Canaccord Genuity): Hi everyone. Thank you for taking my questions.

Executive Ryan: Hey, George.

Analyst George Janarikas (Canaccord Genuity): I wanted to ask about this OEM agreement again, in terms of just how you think about the P&L and the economics behind selling oxide directly or selling magnets. How do you think about just the trade-off between the two? Thank you.

Executive Ryan: You know, I think importantly, the way we're approaching this is, you know, effectively independence at this point is sold out. And I think we've been clear about our strategy around 10X, you know, given the offtake that's in place there, we have the luxury of continuing to be extremely methodical in how we deliver commercial syndication from that facility. I think importantly, as I mentioned earlier, we are really the only solutions provider to all of these various OEMs that are really accelerating the look at their supply chain and attempting to transition away from China as quickly as possible. And so the fact that we can play a major role there in providing raw materials into their supply chain immediately and capture that value today while opening up some pretty significant opportunities I would expect in the downstream, I think is hugely value accretive to us. And so, as I mentioned in my prepared remarks, having an oxide agreement of this scale certainly does accrue to the benefit of the material segment in the near term.

Analyst George Janarikas (Canaccord Genuity): And as a follow-up, I'd love to hear Jim opine on what he thinks is happening to NDPR prices in China. Thank you.

Executive Jim: Well, commodities prices, George, as you know, are always tough. I do think that, you know, there's a few things. One, the reaction post our deal. I think the Chinese no longer, you know, are going to be as mercantilist because there's no point. And then lastly, I would say I would I would also then say that, you know, NDPR is seeing demand from what we're seeing around physical AI and, you know, kind of what I said in the prepared remarks around a lot of excitement around everything that's happening with respect to motion in the economy. And so I think there's when you think about critical minerals, you know, there's there's kind of the scarcity. There's two kinds. There's sort of the heavies and some of the other niche metals where they're just scarce. And we need to get more here because the only option is China. But in general, the demand function for those is somewhat consistent or static.

Whereas with NDPR, especially because of the restrictions around heavies, what we're seeing, and we're seeing this live, I think we can probably give you a couple live anecdotes where we've actually seen a major consumer of rare earth magnets completely change their spec overnight to essentially eliminate heavies and focus on shifting towards more NDPR. So what we're seeing is we're seeing the traction motor, you know, the EV and hybrid makers focus on trying to maximize NDPR, shift away from heavies and actually we're seeing again real-time action on that front that is material to that as well as then all of the other use cases around. I think that NDPR will be obviously the key material of physical AI and so that's, you know, the big growth function there. So when you add it all up, I think one it's the, you know, the market reaction to getting a little bit more of a normalized price in NDPR because we're getting closer to market economics. We're still not there. And then it's a function of some of the existing use cases where we're seeing real-time substitution towards more NDPR. And then it's a lot of the sort of growth excitement that we're seeing around the board.

And I would say, I mentioned this, I kind of referenced this in the prepared remarks, but there's sort of a bifurcation happening. I think NDPR is really the growth commodity. And I think we... Again, commodities prices can always do crazy things, but I think we are going to see continued acceleration in NDPR prices.

Analyst Brian Lee (Goldman Sachs): Hey everyone, thanks for taking the questions. I guess maybe just to follow up to George's question, there's in the marketplace lots of focus and I guess policy driven as well, you know, focus on pricing floors and the like. But, you know, Jim, your prepared remarks, it sounded like there's, you know, NDPR upside that needs to be better appreciated and more of a focus here. So and we have seen some strength here recently. Is there maybe a way to think about what that NDPR pricing level or entitlement is? Could be you talked about kind of a normalized price, like what could that be or what could that range be over time? And is there a trigger or sort of time frame where you think that that could ultimately materialize?

Executive Jim: I mean, that's such a hard thing. You know, I guess the famous expression predictions tell you more about the prognosticator than the future. But I do think with respect to NDPR, I think I've consistently conveyed the view that I think that if we were actually in sort of a real free market, so to speak, in NDPR, you would see prices materially higher, way higher than today, for sure, into the hundreds of dollars just because of the what is sort of the adequate return on capital required to bring online projects, right? If there wasn't a non-market geopolitical actor in setting prices and it was just sort of what would incentivize capital, I think prices would be materially higher. But the realities of the market are the realities of the market. We've made a lot of progress, obviously, given what we've done with DOW and given some of the market developments. We're not fully there obviously and then I think on the next piece it actually comes down to sort of the pace of how quickly physical AI matures.

Analyst Brian Lee (Goldman Sachs): And just to follow up on some of the policy stuff that's still circling around the space, Project Vault and Section 232, among others. Are there any implications for you? Is it impacting your business discussions with non-DOW offtake parties or maybe even DOW discussions? And would you expect any impact on pricing? I know it's early and uncertain, but maybe any thoughts around how you might stand to benefit there?

Executive Jim: Yeah, no, it's a good thought. I think, you know, first and foremost, obviously, our deal last year kicked off a big change in our industry and it opened up the capital markets and it obviously created a bigger window here for us in the West to work on this problem. And it's exciting. But I think what you're seeing is it's not just the DOW, but there are all aspects of the administration, you know, the main verticals, whether it's state or commerce or treasury or interior or energy. Everybody is focused on this issue. It's a key directive from the president. And so I think when you look, there are a number of these things you mentioned, Volt and there's Forge and there's a few others, I would say. They're in various stages of development, each of them. Some require allied nations to kind of come to a view and have a plan. Some are things that are coordination between the private and public sector. What I would say is most of those things are, I would say, somewhat earlier, at least not done. We would expect to be a big part of how things might form in some of those categories that you mentioned. And so my guess is that any of those things will be very good for us, but there's nothing really tangible yet that I could guide you to specifically.

Analyst Corinne Blanchard (Deutsche Bank): Hey, good afternoon, gentlemen. Thank you for taking my question. Could you just talk maybe about the CapEx cabinets we can expect for the year? I believe about 500 to 600 million, mostly related to the 10X, but just wondering how that maybe breaks for the quarter. And a similar question for the EBITDA cabinets as well.

Executive Ryan: Yeah, sure, Corinne. As we think about the cadence, there'll be quite a bit of lumpiness throughout the year within that range, given the fact that we'll have some initial capital spend probably early in the year, particularly on the land that we've just acquired that was announced this morning for our site in North Lake, Texas. Throughout the course of the year, obviously the portion of that CapEx targeted at 10X will start to scale as we begin construction. And then some of the other parts of the business and growth initiatives that we're working on, namely our engagement with Apple, you know, there's capital spend really throughout the year with probably a slight bend towards the tail end of the year as we get that equipment installed and prepared for 2027, you know, commencement of that agreement. As relates to the EBITDA cadence obviously, you know, back to Jim's comment on predicting NDPR prices I think that's probably going to be the biggest driver here.

Analyst Corinne Blanchard (Deutsche Bank): And if I can, for a second question, do you share, how do you view maybe the best way to access the heavy needs beyond what you already have? Are you thinking about more recycling? Are you thinking about mine expansion, and you're looking at all the P, M&A, just trying to figure out.

Executive Michael: Yeah, we are certainly looking at recycling as an option. And I think, as I've said in the past, we think the integrated nature of our site allows us to avail ourselves of a diverse range of feedstocks. With our agreement with the Department of War, we have their support to source feedstocks from around the world. So I think there'll be a mix of perhaps traditional recycling and non-traditional feedstocks. But as Jim mentioned, our progress in reducing our heavy need makes us less overall concerned. But we think we will be the largest producer of heavy earths in the Western Hemisphere from now for as long as you can imagine.

Analyst Carlos de Alba (Morgan Stanley): Yeah, thank you very much. Congrats on the progress on the different projects. Just on 10X, the user clarification on the CapEx in the announcement had 1.25 billion plus. I mean, can you provide maybe a little bit of color on that plus? Maybe dimension that for us, quantify that for us, just on the modeling side.

Executive Carlos: Yeah, sure, Carlos. I'll start with your last question. We do intend to meet all heavy and light feedstock for both facilities from the Mountain Pass processing facility. As Michael just talked through, we have various initiatives in place in partnership with the Department of War, in partnership with Apple, from our own sourcing strategies to bring in incremental heavy worth feedstock. I think the thing that's really important to understand there as well is when you think about a business model that is centering on third-party feedstocks as part of a supplement to its ability to produce products, you really have to produce both lights and heavies in order to compete in that market. There is no way you can compete economically without being able to extract the value from all of those. And so we are extremely confident in our ability to continue to source third-party feedstock as we are, frankly, as we speak.

Analyst Lawrence Alexander (Jefferies): Just two quick ones. First, can you give an update on the progress on the Saudi JV and your bandwidth for a similar fraught JV potentially in either Europe or South America? And secondly, can you give an update on your approach to hiring formulation engineers and your strategy towards how many SKUs are you offering the customers? Are you encouraging them to focus on a narrow number of SKUs?

Executive: Sure. Well, on Modin, there's really two tracks. As you know, we signed a binding term sheet late last year. We have to finalize formal documents with our partner in that transaction, the Department of War. And then with modern to kind of do the aggregate JV obviously all of the a lot of the final details need to be associated with our final estimation on the cost of the build the process flow of the facility there's a number of pieces that we have to work on to get towards completion on that front and of course that means that the second work stream is from an operating standpoint Michael and his team are working on the process flow, all aspects of how that facility will work. And so there's sort of two main streams there. What I would tell you is, obviously, that is going to be a big, exciting project, but it's going to take some time. I mean, we're going to make sure that that is built right, and we're going to you know do that cautiously and thoughtfully so um you know we'll do that methodically i guess is the best way to say it and we're continuing to work on that.

Analyst Lawrence Alexander (Jefferies): And I think you asked also about recruiting and engineers, and we've certainly built a pretty extraordinary team in our magnetics business. That team is growing. Getting that project done is no small task. I'm obviously very focused on that. We have a whole team that we've built since we signed that deal last July, and that's underway and going really well. And so we're focused on executing that.

Executive: I think the only thing on that, Lawrence, is in your question about focusing on SKUs, I think what's interesting is from a magnet formulation perspective, I think Jim made the point earlier, we've seen a really big push from customers to really narrow their focus on heavy-earth, free, or extremely reduced magnet formulations. I think Jim also spoke about the progress that we've made there, even versus our initial formula for EV traction motors, as an example, being 60% lower than where we started out, which was already on the low end of market norms.

Analyst Bill Peterson (JP Morgan): Yeah, thanks for sneaking me in. Congrats on the results and all the great information here. Question on, I guess, offtake and further offtake agreements. Do you have, I guess you have the desire or the bandwidth or the capacity to support additional offtake agreements? Or would this be limited by expansion such as upstream 60K or having a 10X facility up and running?

Executive Ryan: Yeah, I think, Bill, you know, we continue to remain opportunistic. I think certainly if you think about the scale of demand from automakers, it's almost 30 percent of magnet content today goes in the automotive supply chain. And nearly 100 percent of that today is coming out of China. And so just the slice of the pie there that is available as those customers look to diversify their supply chains in today's market is pretty exceptional.

Analyst Bill Peterson (JP Morgan): And then I guess the second question is, can you just provide us an update on the magnet qualification that your lead auto customer, as well as the comments, Michael, you made about, you know, the troubleshoot ramp, like the double click on that. Is there anything to call out there in terms of focus on yield or throughputs, or I think the technical performance is fine, but just as anything else you can kind of speak to on that, on the magnet ramp.

Executive: I'll start with the latter part. I'll let Brian handle the PPAP. I'm, you know, the magnet ramp, I think stepping back, thinking about where we were several years ago, I couldn't be more proud. And I also couldn't be more optimistic that our team will be able to tackle this challenge. And we know that starting a new facility is challenging. But, you know, the challenges we've achieved overcome so far relative to what we have to do now, I think it's just a focus on execution.

Executive: And on PPAP Bill, as I said earlier, kind of zooming out, one of the reasons we wanted to start with an automotive customer was our desire to produce magnets at the outset that could withstand some of the highest quality standards that are required for things like EV motors. PPAP is obviously a fairly extensive process you know it audits not only the product quality but also the manufacturing processes themselves you have to demonstrate different run at rate scenarios etc. And so frankly going through that process will continue as we, you know, launch a facility we'll hone our processes and capabilities and it's going to put us in a position to accelerate and bring, you know, customers like Avalon even more quickly.

Executive: And so we are just beginning that process, but given our significant engagement from day one in building this plant in partnership with GM, we believe it'll be a relatively accelerated process compared to sort of a typical, you know, auto supplier qualification. And so that's what informs our guidance and view of back half of the year for saleable magnets.

Executive: Thank you, everyone. It was a pretty outstanding quarter to a transformational, incredible year of 2025 and 26 is off to a great start. So we will get back to work and see you all soon.