USA Rare Earth sells first Stillwater magnets as Q3 loss widens to $126M

USA Rare Earth booked $3.0 million in third-quarter revenue against $22.9 million in cost of revenue, and its adjusted net loss widened to $125.6 million from $25.6 million a year earlier — the quarter it sold its first sintered neodymium-iron-boron magnets from Stillwater, Oklahoma.

The Stillwater plant, rated at 600 tonnes of magnets a year, shipped its first sintered block magnets to a high-performance materials maker in September. Revenue still fell from $5.8 million in the second quarter. A second 600-tonne line is due in Q2 2027, which would double capacity to 1,200 tonnes a year.

"Our magnet facility in Stillwater, Oklahoma, achieved a major milestone with its first commercial magnet sales," said Thras Moraitis, who succeeded Barbara Humpton as chief executive on Oct. 1.

What do the numbers show?

The cost of the ramp is stark. Cost of revenue of $22.9 million against $3.0 million of sales left a gross loss of $19.9 million. Operating loss ballooned to $141.4 million from $15.9 million a year earlier, driven partly by selling, general and administrative costs of $103.7 million in the quarter the company closed its combination with Brazilian miner Serra Verde. Operations consumed $143.7 million of cash.

A $136.6 million gain on the fair value of financial instruments flipped the GAAP result to net income of $11.7 million. Strip it out, and the adjusted loss was $125.6 million, or $0.44 a share.

The balance sheet tells the other half of the story. Cash, equivalents and restricted cash stood at $1.16 billion on Sept. 30, up from $359.9 million at the end of 2025, after a $1.5 billion private placement. The Serra Verde acquisition took $191.2 million in cash net of cash acquired and added $305.6 million of long-term notes plus $3.46 billion of mineral interests.

	Q3 2026	Q2 2026	Q3 2025
Revenue	$3.0M	$5.8M	$0
Gross profit	($19.9M)	($1.6M)	n/a
Operating loss	($141.4M)	($46.3M)	($15.9M)
Net income	$11.7M	($10.3M)	($156.7M)
Diluted EPS	($0.02)	($0.05)	($1.64)

Where does Serra Verde fit?

Serra Verde finished Stage 1 of its expansion in Goiás, Brazil in September, began commercial shipments of mixed rare earth carbonate in October and recorded sales in November.

Its output flows to US SIIE, a special purpose vehicle that buys 100% of Phase 1 production under a 15-year take-or-pay contract. That vehicle raised $1.55 billion in August, including $750 million from the U.S. Department of War. Pricing is set off non-China benchmarks — and the company said recent non-China dysprosium oxide prices ran 14 to 16 times China prices, a spread that underpins the economics of ex-China supply.

What comes next?

For the fourth quarter, USA Rare Earth expects at least 325 tonnes of total rare earth oxide sales from Serra Verde, at a basket value of about $43 a kilogram at floor prices or about $97 at market prices, after separation costs. It gave no revenue guidance.

Its targets stack up quickly:

• Finished magnet prototype sales to multiple customers by year-end
• A second Stillwater line in Q2 2027, doubling capacity to 1,200 tonnes a year
• A 6,400-tonne Serra Verde run rate by the end of 2027
• Work started in September on a $1.2 billion metals and magnets plant in Blacksburg, South Carolina, sized for 6,400 tonnes of magnets a year

One risk sits outside the company's control. The release lists China's export-control designation of USA Rare Earth as a risk to sourcing raw materials and equipment; Beijing has extended its pause on broader rare earth export controls to Jan. 10. With $1.16 billion in cash and two plants under construction, the company's next test is whether Stillwater's second line and Serra Verde's oxide volumes can shrink a $19.9 million quarterly gross loss before the money runs thin.