MP Materials : Fourth Quarter 2024 Results Presentation

Published: 2025-02-20 18:43:55 ET MP

Q4 2024 Results

February 20, 2025

Use of Non-GAAP Financial Measures

This presentation references certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income (Loss), Adjusted Diluted EPS, and Free Cash Flow, which have not been prepared in accordance with generally accepted accounting principles in the United States ("GAAP").

MP Materials defines Adjusted EBITDA as GAAP net income or loss before interest expense, net; income tax expense or benefit; and depreciation, depletion and amortization; further adjusted to eliminate the impact of stock-based compensation expense; initial start-up costs; transaction-related and other costs; accretion of asset retirement and environmental obligations; gain or loss on disposals of long-lived assets; gain or loss on early extinguishment of debt; other income or loss; and other items that management does not consider representative of our underlying operations. We define Adjusted EBITDA Margin as our Adjusted EBITDA divided by our total revenue. MP Materials defines Adjusted Net Income (Loss) as GAAP net income or loss excluding the impact of stock-based compensation expense; initial start-up costs; transaction-related and other costs; gain or loss on disposals of long-lived assets; gain or loss on early extinguishment of debt; and other items that management does not consider representative of our underlying operations; adjusted to give effect to the income tax impact of such adjustments. MP Materials defines Adjusted Diluted EPS as GAAP diluted earnings or loss per share excluding the per share impact, using adjusted diluted weighted-average shares outstanding as the denominator, of stock-based compensation expense; initial start-up costs; transaction-related and other costs; gain or loss on disposals of long-lived assets; gain or loss on early extinguishment of debt; and other items that management does not consider representative of our underlying operations; adjusted to give effect to the income tax impact of such adjustments. In addition, when appropriate, we include an adjustment to reverse the impact of applying the if-converted method to our 2026 Notes if necessary to reconcile between GAAP diluted earnings or loss per share and Adjusted Diluted EPS. When applicable, adjusted diluted weighted-average shares outstanding reflect the anti-dilutive impact of our capped call options entered into in connection with the issuance of our 3.00% unsecured senior convertible notes due March 2030. We define Free Cash Flow as net cash provided by or used in operating activities less additions to property, plant and equipment, net of proceeds from government awards used for construction. You can find the reconciliation of these measures to the most directly comparable GAAP measures in the Appendix.

MP Materials' management uses Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income (Loss), and Adjusted Diluted EPS to compare MP Materials' performance to that of prior periods for trend analyses and for budgeting and planning purposes. MP Materials believes Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income (Loss), and Adjusted Diluted EPS provide useful information to management and investors regarding certain financial and business trends relating to MP Materials' financial condition and results of operations. MP Materials' management believes that the use of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income (Loss), and Adjusted Diluted EPS provides an additional tool for investors to use in evaluating projected operating results and trends. We believe Free Cash Flow is useful for comparing our ability to generate cash with that of our peers. Free Cash Flow is not meant to be considered in isolation or as an alternative to cash flows from operating activities and does not necessarily indicate whether cash flows will be sufficient to fund cash needs.

MP Materials' method of determining these non-GAAP measures may be different from other companies' methods and, therefore, may not be comparable to those used by other companies and MP Materials does not recommend the sole use of these non-GAAP measures to assess its financial performance. Management does not consider non-GAAP measures in isolation or as an alternative or to be superior to financial measures determined in accordance with GAAP. The principal limitation of non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in MP Materials' financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures.

2024 and Recent Highlights

Upstream

Midstream

Downstream

Capital Structure

Full-Year Financial and Operational Overview

Full Year Financial Metrics - Consolidated

Revenue primarily impacted by

Adjusted EBITDA primarily impacted by

weaker pricing of rare earth products

weaker pricing and materially higher sales

year-over-year in both 2023 and 2024

of separated products in 2024, which have

temporarily elevated production costs as

volumes ramp towards targeted capacity

Earnings comparisons primarily impacted by the change in Adjusted EBITDA, higher depreciation expense as assets entered service over the last two years, and increased interest expense, offset by a larger tax benefit over the period

Revenues

$527.5

$253.4

$203.9

2022 2023 2024

Comparable Financial Metrics(1)

Adjusted EBITDA(2)

$388.6

$102.5

$(50.2)

2022 2023 2024

Adjusted Diluted EPS(2)

$1.68

$0.39

$(0.44)

2022 2023 2024

Full Year Operating Metrics - Materials Segment

Record concentrate

Concentrate sales

Realized pricing reflects

production volumes in

volumes driven by

impact of slower than

2024 primarily driven by

higher consumption

anticipated growth in

improved efficiencies

into midstream circuits

demand for magnetic

and mineral recoveries

products

NdPr production volumes

Sales volumes driven by

Realized pricing declined

increased with further

increasing production

in-line with lagged market

progress on process

and timing of shipments

pricing

optimization and ramp

Comparable Operational Metrics

REO Production Volumes

REO Sales Volumes

Realized Price

NdPr Production Volumes(1)

NdPr Sales Volumes(1)

NdPr Realized Price(1)

(MT)

42,499 41,557

45,455

(MT)

43,198

36,837

32,703

($/MT REO)

$11,974

$6,854

$4,414

(MT)

1,294

200

N/A

(MT)

1,142

N/A 10

($/Kg)

$70

$51

N/A

2022 2023 2024

1. N/A = Not applicable as there was neither NdPr production nor sales volume in this period.

Full Year Financial Metrics - Segments

Revenue primarily impacted by weaker pricing of rare earth products year-over-year in both 2023 and 2024

Segment Adjusted EBITDA impacted by weaker pricing and materially higher sales of separated products in 2024, which have temporarily elevated production costs as volumes ramp towards targeted capacity

Capex decline due to the completion of spend on the midstream optimization project

Segment Adjusted EBITDA driven by hiring 100+ people over the period to support the Independence facility

Capex spend driven by the construction of the Independence facility which began in April 2022

Comparable Financial Metrics(1)

Materials Segment

Magnetics Segment

Revenues

$527.5

$253.4

$203.9

2022 2023 2024

Segment Adjusted

EBITDA(2)

$407.8

$130.4

$(14.1)

2022 2023 2024

Capital Expenditures(3)

$255.8

$164.3

$106.7

2022 2023 2024

Segment Adjusted

EBITDA(2)

$(2.7) $(6.5) $(12.2)

2022 2023 2024

Capital Expenditures(3)

$69.3 $95.5 $79.7

2022 2023 2024

1. All figures in millions.

3. Capital expenditures related to corporate were $1.5 million, $2.1 million and zero, for the years ended December 31, 2022, 2023 and 2024, respectively.

Fourth Quarter Financial and Operational Overview

Quarterly Financial Metrics - Consolidated

Year-over-year revenue increase driven by

Year-over-year Adjusted EBITDA driven by

ramp of separated product sales volumes

ramp of separated product revenues with

initial subscale production negatively

impacting cost of sales

Year-over-year Adjusted Diluted EPS comparisons primarily impacted by change in Adjusted EBITDA, higher depreciation expense as assets entered service over the last year and increased interest expense from issuance of 2030 convertible notes

Comparable Financial Metrics - Sequential and Year-over-Year(1)

Revenues

$62.9 $61.0

$41.2

Q4 2023

Q3 2024

Q4 2024

Adjusted EBITDA(2)

$1.3

$(11.2)

$(10.7)

Q4 2023

Q3 2024

Q4 2024

2023

2024

Adjusted Diluted EPS(2)

$(0.02)

$(0.12) $(0.12)

Q4 2023

Q3 2024

Q4 2024

10 1. All figures in millions except for per share amounts.

2. See Appendix for reconciliation of Adjusted EBITDAand Adjusted Diluted EPSto the most directly comparable financial measure prepared in accordance with U.S. GAAP.

Disclaimer

MP Materials Corp. published this content on February 20, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on February 20, 2025 at 23:43:55.038.