USA Rare Earth Q1 Earnings Call Highlights

Key Points

• USA Rare Earth is aggressively reshaping itself into a mine-to-magnet platform through the planned acquisition of Serra Verde, a strategic investment in Carester and full economic control of the Round Top project. Management says the moves are intended to build a vertically integrated rare earth supply chain outside China.
• The company reported early operating progress but continued losses, with about $6 million in Q1 revenue from Less Common Metals and a net loss of $67 million. USA Rare Earth ended the quarter with roughly $1.75 billion in cash after its January PIPE financing.
• Magnet production and U.S. government funding are nearing key milestones, as the Stillwater plant began phase 1A commissioning and the company expects customer-ready magnet production in Q2. Management also said it is close to finalizing a $1.6 billion funding agreement with the U.S. Department of Commerce.

USA Rare Earth NASDAQ: USAR said its first quarter was marked by a series of strategic transactions intended to turn the company into a fully integrated rare earths platform spanning mining, processing, metals and magnet production.

On the company’s first-quarter 2026 earnings call, Chief Executive Officer Barbara Humpton said the company is pursuing what it describes as a “global mine-to-magnet value chain” through the announced acquisition of Serra Verde Group, a planned strategic investment in Carester and the consolidation of 100% economic ownership of the Round Top project.

“USA Rare Earth is at a defining moment,” Humpton said, adding that the company aims to become “the global champion in rare earths” and a supplier of materials tied to Western national security and technological innovation.

Serra Verde, Carester and Round Top Drive Strategic Shift

Humpton described the agreement to acquire 100% of Serra Verde Group as a “watershed moment” for the Western rare earth industry. She said Serra Verde’s Pela Ema mine in Brazil is currently the only scaled producer of all four magnetic rare earths outside Asia.

Humpton also highlighted Serra Verde’s 15-year offtake agreement with a U.S. government-financed special purpose vehicle, saying it includes price floors not only for neodymium-praseodymium, or NdPr, but also for dysprosium and terbium. She said the structure should provide price signals that have previously been lacking in the market and is expected to accelerate USA Rare Earth’s path toward positive cash flow.

In response to a question from Cantor Fitzgerald analyst Derek Soderberg, Chief Financial Officer Rob Steele said the Serra Verde transaction is structured as $300 million in cash and “just under 127 million shares of common stock.”

The company also discussed its planned strategic investment in Carester, which Humpton said would expand USA Rare Earth’s role in heavy rare earth processing, including materials sourced from recycling. Steele said the Carester facility is expected to begin ramping near the end of 2026 and scale during 2027, sourcing and servicing material in Europe, with some material ultimately flowing back to USA Rare Earth and to Japan.

Separately, Humpton said consolidating full economic ownership of the Round Top project would simplify operations, governance and decision-making around what she called one of North America’s most unique heavy rare earth deposits.

Quarterly Results Show Early Revenue From LCM

Steele said first-quarter revenue was approximately $6 million, generated by the company’s metal-making business at Less Common Metals, or LCM. Gross profit was slightly positive, and he said the company expects LCM revenue and margins to improve as utilization at the U.K. facility rises throughout 2026.

Operating expenses were approximately $37 million. Excluding M&A-related expenses and stock-based compensation, Steele said ongoing operating expenses were about $25 million.

The company reported a net loss attributable to common stockholders of $67 million, or $0.34 per share. Steele said that figure included a $43.6 million non-cash fair value adjustment tied to warrant and earn-out liabilities. Excluding that adjustment, adjusted net loss was $24.1 million, or $0.12 per share.

USA Rare Earth ended the quarter with approximately $1.75 billion in cash, including proceeds from a $1.5 billion private investment in public equity that closed in January. Capital expenditures were approximately $40 million, largely tied to the build-out of magnet manufacturing capacity and the ramp-up at LCM U.K.

Commerce Department Funding Nears Definitive Agreement

Humpton and Steele said the company remains in the final stages of completing definitive documentation for a previously announced letter of intent with the U.S. Department of Commerce for $1.6 billion in funding. Humpton said the company expects the process to be finalized this month.

Asked about the timing by Soderberg, Humpton said developments since the January letter of intent, including the Serra Verde acquisition plan, required the Department of Commerce to revisit and validate earlier decisions.

“Every move we’ve made has actually strengthened our deal,” Humpton said, adding that the company is in the final stages of the process and expects to provide updates after completion.

Magnet Production and Customer Demand in Focus

USA Rare Earth said it commissioned phase 1A at its Stillwater magnet manufacturing plant in March. Humpton said that milestone allows the company to begin customer-ready production of sintered NdFeB magnets in the second quarter, with sales to customers expected in the second half of 2026.

Steele said the company is ramping Stillwater magnet capacity toward a 600 metric ton per year run rate by year-end. He said the facility has started producing commercial magnets for customer qualification, and finishing equipment is already on site and expected to be operating at the beginning of the third quarter.

Humpton said potential customers are showing strong interest in non-China NdFeB magnets, particularly for safety stock. She said USA Rare Earth is seeing engagement from blue-chip original equipment manufacturers, tier 1 defense contractors and companies in data centers, aerospace and “physical AI infrastructure.”

During the Q&A session, ROTH Capital analyst Suji Desilva asked about customer demand for safety stock. Humpton said the company is seeking to serve a broad group of customers rather than dedicating production lines to a small number of offtakers. She said some automotive OEMs are directing suppliers to maintain up to one year of supply of permanent magnets or metals, and aerospace and defense customers face a Jan. 1, 2027, deadline for sourcing materials from outside China.

“I am very bullish on the demand signal being strong, and the only question we have to our team is: How fast can we move?” Humpton said.

Operational Milestones Ahead

Steele said the company’s Wheat Ridge R&D headquarters is commissioning solvent extraction circuits for three demonstrations: the Round Top flow sheet, third-party mixed rare earth carbonate separation and magnet swarf recycling. He said all three demonstrations are expected to be operating within the next several weeks.

At Round Top, Steele said the company is moving forward with a definitive feasibility study expected to be completed by year-end and published in the first quarter of 2027. He said USA Rare Earth has begun vat leaching, initiated drilling on its water lease and plans to start a three-rig drilling campaign for more than 15,000 feet of core.

For LCM, Steele said the company expects to reach 3,000 metric tons per year of metal making and strip cast capacity by the fourth quarter. Humpton also said the company recently completed its first commercial yttrium metal pour, describing yttrium as important for high-temperature aerospace components such as turbine blades.

USA Rare Earth did not provide financial guidance. Steele said the company plans to hold its first Investor Day in the third quarter of 2026 after the expected closing of the Serra Verde transaction.

About USA Rare Earth NASDAQ: USAR

USA Rare Earth NASDAQ: USAR is a development-stage critical minerals company focused on advancing a fully integrated rare earth element (REE) and lithium project in the United States. Its flagship asset is the Round Top deposit in West Texas, a large, polymetallic concentration of light and heavy rare earth elements, lithium and other co-products. The company seeks to move this asset through resource delineation, pilot-scale processing and eventual commercial production to address growing domestic demand for secure REE supply chains.

In addition to exploration, USA Rare Earth is engineering an on-site separation facility that will utilize dry magnetic separation and hydrometallurgical flowsheets to produce mixed rare earth carbonates.

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