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SEC filingCleveland-Cliffs' Q3 2025 revenue rose 3% YoY, but net loss widened to $234M amid volatile steel markets and operational restructuring.
For the three months ended September 30, 2025, Cleveland-Cliffs reported consolidated revenues of $4.56 billion, a 3% increase compared to $4.42 billion in the same period of 2024. The increase was primarily driven by incremental tons from the Stelco acquisition (approximately $400 million), partially offset by lower volumes from idled operations (Riverdale and Steelton, approximately $150 million) and inconsistent buying behavior from service centers (approximately $150 million). Gross margin improved by $60 million year-over-year, reflecting higher steel margins from product mix and lower maintenance spend, along with the absence of a $71 million unfavorable arbitration decision that impacted the prior-year period. However, depreciation, depletion, and amortization increased by approximately $30 million. Net loss remained relatively flat at $234 million versus $232 million in Q3 2024, as higher interest expense ($51 million increase) offset the gross margin improvement. Adjusted EBITDA for the Steelmaking segment increased to $129 million from $111 million in the prior-year quarter, while consolidated Adjusted EBITDA rose to $143 million from $122 million.
The Steelmaking segment, which represents the vast majority of the company's operations, saw total steel shipments increase 5% to 4,029 thousand net tons in Q3 2025, driven by the addition of Stelco. However, average selling price per ton declined to $1,032 from $1,045 in Q3 2024. Revenue by market showed mixed results: direct automotive revenue grew 2% to $1.36 billion, infrastructure and manufacturing revenue rose 14% to $1.33 billion, while distributors and converters revenue fell 2% to $1.29 billion. The segment's gross margin remained negative at (1)% but improved from (3)% in the prior-year period. Management highlighted that the conclusion of a five-year slab supply contract in December 2025 (representing ~10% of sales volume) presents an opportunity to shift product mix toward higher-margin business. The company also noted that its fixed-price contracts (covering 30-35% of volumes) help mitigate pricing volatility.
Management's outlook is cautiously optimistic, citing higher HRC pricing (average $843/ton in Q3 2025, up 24% YoY) and lower import levels as supportive factors. The company expects to benefit from recently implemented steel and automotive tariffs, declining interest rates, and government legislation supporting domestic manufacturing. Key strategic priorities include: (1) maximizing commercial strengths through product mix optimization, (2) supporting domestically produced automotive sales, (3) optimizing the fully-integrated footprint (including the idling/closure of six operations), (4) capturing synergies from the Stelco acquisition, (5) exploring strategic opportunities (including potential asset sales and a Memorandum of Understanding with a major global steel producer), and (6) maintaining financial flexibility. The company anticipates total capital expenditures of approximately $700 million over the next 12 months, primarily for sustaining capital. Management expects to generate healthy free cash flow in the coming years and intends to use it to deleverage the balance sheet, noting approximately $3.2 billion of secured debt capacity and a long maturity runway with nearest senior notes maturing in 2029.
As of September 30, 2025, Cleveland-Cliffs held $66 million in cash and equivalents, with total debt of $8.039 billion (including $847 million drawn on the ABL facility). Shareholders' equity stood at $5.466 billion, down from $6.634 billion at year-end 2024 due to cumulative net losses. Inventory decreased to $4.683 billion from $5.094 billion, reflecting working capital management. The company's net debt position is significant, but liquidity is supported by $3.062 billion available under the ABL facility.
Note 18 outlines various purchase commitments for raw materials, energy, and transportation under annual and multi-year agreements, but no aggregate dollar amount is provided. The company also has $270 million in surety bonds and letters of credit outstanding, plus $63 million in letters of credit under the ABL facility. Environmental and asset retirement obligations are recorded at $112 million and $535 million, respectively. No material litigation contingencies were identified.
No share repurchases occurred during the nine months ended September 30, 2025, leaving $1.4 billion remaining under the $1.5 billion program authorized in Q2 2024. No dividends were paid. Debt activity included $1.7 billion in new senior note issuances (7.625% 2034 and 7.500% 2031) and net repayments of $713 million on the ABL facility. Capital expenditures were $488 million on an accrual basis (3.4% of sales), primarily in the Steelmaking segment. Subsequent to quarter end, the company redeemed $685 million of 2027 notes and issued an additional $275 million of 7.625% 2034 notes.
The company operates through one reportable segment, Steelmaking, which generated $4.585 billion in Q3 2025 revenues (up 3.3% YoY) and $129 million in Adjusted EBITDA. Other Businesses (Tubular, Tooling and Stamping, European Operations) contributed $173 million in revenues and $12 million in Adjusted EBITDA. Intersegment eliminations were $24 million. Steelmaking assets totaled $19.663 billion. The segment's revenue is diversified across automotive ($1.356B), infrastructure and manufacturing ($1.326B), distributors/converters ($1.288B), and other markets ($591M). No geographic mix is disclosed.