USA Rare Earth Q3 Results: Milestones, Losses

USA Rare Earth reported its first commercial neodymium-iron-boron (NdFeB) magnet revenue and began shipments of mixed rare earth carbonate (MREC) from Serra Verde, while management said shortages of dysprosium oxide and samarium metal constrained output and disclosed wide adjusted losses in a Nov. 9, 2026 release.

Quarter Results and Cash

For the quarter ended Sept. 30, 2026, USA Rare Earth recorded revenue of $3 million and $14.5 million for the first nine months. The company held approximately $1.2 billion in cash, cash equivalents, and restricted cash at quarter-end.

Net income attributable to USA Rare Earth was $12 million, driven by a $137 million noncash fair-value gain related to warrant and earnout liabilities. Adjusted net loss was $126 million, or $0.44 per diluted share. Operating expenses totaled about $121 million, with selling, general, and administrative (SG&A) costs rising roughly $60 million sequentially due to merger-and-acquisition and legal expenses. Research and development spending increased with Round Top drilling and Serra Verde activities.

Management reported cash uses during the period included approximately $190 million net paid for Serra Verde, $148 million in operating cash used, and $106 million in capital expenditures and equipment deposits.

Magnet Production and Outlook

The quarter’s revenue included USA Rare Earth’s first sales of NdFeB permanent magnets from its Stillwater, Oklahoma, facility. Serra Verde began commercial-scale MREC production, with initial shipments in October and first sales in November.

Management attributed the quarter-over-quarter revenue decline to shortages of dysprosium oxide and samarium metal, which limited output at the company’s LCM and Stillwater operations. Higher raw-material costs and the early stages of Serra Verde and Stillwater production weighed on gross margins. Improvement is expected only as utilization rises and legacy contracts are repriced in the first half of 2027.

Stillwater’s initial production line has an annual capacity of 600 tonnes. A second line is targeted for commissioning in the second quarter of 2027, which would raise stated annual capacity to 1,200 tonnes if completed as planned. Management said customer qualification timelines range from six to nine months at the short end and up to two years for more demanding products. The company expected finished magnet prototype sales to multiple customers before year-end 2026. Chief Financial Officer William Steele projected fourth-quarter Serra Verde sales of at least 325 tons of total rare earth oxides (TREO).