0001970622-26-000038
SEC filingRevenue from LCM acquisition drove $5.7M sales, but net loss of $68.1M reflects heavy investment and non-cash fair value losses.
For the three months ended March 31, 2026, USA Rare Earth generated revenue of $5.7 million, entirely from its Less Common Metals (LCM) subsidiary acquired in November 2025. Cost of revenue was $5.6 million, yielding a gross profit of $0.1 million and a gross margin of 1.9%. The low margin reflects under-absorption of fixed indirect manufacturing costs due to lower production volumes. As a result, the company reported a net loss of $68.1 million, compared to net income of $51.7 million in the prior-year period, which was not comparable due to the lack of LCM operations. The loss was driven by total operating expenses of $36.8 million (SG&A $21.2M, R&D $14.2M, amortization $1.4M) and a $43.6 million non-cash loss on the fair value of financial instruments (earnout shares and warrants), partially offset by $12.0 million in interest and dividend income.
The company operates as a single reporting segment, with all revenue derived from LCM's metal and alloy sales. Geographical revenue breakdown: $4.5 million from Europe, $1.0 million from the United States, and $0.2 million from Asia. Outside LCM, the Stillwater Facility (magnet manufacturing) and Round Top Project (mining) have not yet generated revenue. Commissioning of Phase 1A at Stillwater is expected to enable customer orders in Q2 2026, with a run-rate capacity of 600 MTPA by year-end. LCM is expanding to 3,000 MTPA metal/alloy capacity by end of 2026.
Management's outlook focuses on strategic investments and funding. The $1.50 billion PIPE completed in January 2026 provides liquidity of $1.75 billion in cash. The company expects to fund near-term operations for at least 12 months but requires additional capital for long-term initiatives. Key milestones include: the Expected U.S. Government Transaction (up to $1.58 billion in funding) subject to definitive agreements; proposed acquisitions of TMRC ($72.3M), Carester ($46.4M), and Serra Verde ($2.83B) to build an integrated mine-to-magnet platform. The Stillwater facility is expected to reach 1,200 MTPA capacity by Q1 2027. No quantitative revenue or earnings guidance is provided. The company anticipates significant cash outflows for capital expenditures and acquisitions, with a need to raise substantial capital and establish a $250M revolver by end of 2026.
Cash and cash equivalents reached $1.75B at March 31, 2026, up from $0.36B at year-end 2025, driven by the $1.5B PIPE financing completed in January 2026. The company has no outstanding notes payable; the Barclays Trade Loan ($1.85M) was repaid in full on February 13, 2026. Total debt consists solely of finance lease liabilities of $0.8M. Stockholders’ equity stands at $1.88B. Inventory increased to $28.4M (raw materials $22.1M, work-in-process $3.6M, finished goods $2.7M). Contract liabilities (customer deposits and deferred revenue) total $10.4M.
As of March 31, 2026, open equipment purchase orders amount to $0.4M, all expected to be fulfilled beyond one year. No other material purchase commitments are disclosed. The company also has asset retirement obligations of $0.7M related to the Cheshire, UK lease. Lease commitments total $0.9M (finance) and $0.5M (operating) on an undiscounted basis. The company has announced non-binding letters of intent for up to $1.58B in U.S. government funding, but no definitive agreements exist.
The company did not repurchase any shares or pay dividends. Net debt reduction of $1.9M came from repaying the Barclays Trade Loan and finance lease payments. Capital expenditures and equipment deposits totaled $38.6M for the quarter, primarily for construction in progress (buildings and magnet plant). Given the significant cash balance, future capital allocation may focus on acquisitions (e.g., proposed $2.83B SVRE Holdings acquisition) and funding the Round Top project.
The company operates in a single reportable segment: vertically integrated rare earth magnet production. Revenue for Q1 2026 was $5.7M, entirely from casting and strip casting sales. Domestic (U.S.) revenue was $1.0M (17%), international $4.7M (83%). No segment-level profit measures are provided. Major customers: four customers accounted for 49%, 16%, 16%, and 13% of revenue, respectively.