USA Rare Earth to Build $1.2 Billion Magnet Plant in South Carolina
Revenue quintupled to $5.7 million in the first full quarter of metal sales from its LCM acquisition, as the company laid out plans for a massive domestic manufacturing expansion.
USA Rare Earth (USAR) reported first-quarter revenue of $5.7 million, a sharp increase from $1.6 million in the fourth quarter of 2025, as the rare-earth materials developer began consolidating sales from its recently acquired LCM metal and alloy operations. The results, disclosed alongside a sweeping expansion of the company's domestic manufacturing ambitions, showed a business in the early stages of scaling but still far from profitability.
The quarter marked the first full period of LCM metal and alloy sales following the November 2025 acquisition, providing the primary lift to the top line. Yet the revenue ramp came at a steep cost: gross margin compressed to 1.9% from 11.9% in the prior quarter, as cost of product revenue of $5.6 million nearly consumed the entire $5.7 million in sales. The margin pressure underscored the nascent state of the company's commercial operations.
Losses widened alongside the revenue growth. Operating loss expanded to $36.7 million from $26.1 million in the fourth quarter, driven by a jump in research and development spending to $14.2 million from $7.2 million and higher selling, general and administrative expenses of $21.2 million. Capital expenditures also accelerated, climbing to $38.6 million from $24.0 million, reflecting the accelerated build-out of the company's Stillwater, Oklahoma, facility and other sites.
Stillwater Phase 1a was commissioned in March, enabling the company to begin fulfilling customer orders for NdFeB magnets in the second quarter. The milestone was eclipsed, however, by the announcement of a far larger project: USA Rare Earth selected Cherokee County, South Carolina, for a new rare-earth metal and magnet manufacturing facility representing an investment of approximately $1.2 billion and expected to create roughly 490 jobs. The Blacksburg, South Carolina, site targets production capacity of 6,400 tonnes per annum of NdFeB magnets and 5,000 tpa of strip-cast, metal and alloy, expanding the company's planned total domestic capacity to 10,000 tpa of magnets and 10,000 tpa of metals — a dramatic increase from the Stillwater-only plan of 1,200 MTPA outlined just one quarter earlier.
The company also disclosed a definitive agreement to acquire Serra Verde Group for approximately $2.8 billion, comprising $300 million in cash and 126.85 million shares. USA Rare Earth said the deal is expected to deliver $550 million to $650 million of annualized run-rate EBITDA by the end of 2027 and combined company EBITDA of approximately $1.8 billion by 2030. The acquisition would represent a transformational step for a company that generated less than $6 million in quarterly revenue.
A $1.5 billion PIPE financing closed in January swelled the cash balance to $1.75 billion at March 31, up from $360 million at the end of 2025, providing the capital base for the expansion push. The company's timeline for signing a Definitive Funding Agreement with the U.S. Government under the CHIPS Program slipped by one month, to May 2026 from the April target cited in the prior quarter's outlook, for $1.6 billion in expected funding. Separately, the Round Top definitive feasibility study schedule was pulled forward, with completion now targeted for the fourth quarter of 2026 and publication in the first quarter of 2027.
Other operational milestones included the first commercial yttrium metal production at LCM in April, at 2N–2N5 purity, placing the company among a limited number of commercial-grade yttrium metal producers outside China. The company also received a $14.2 million grant from the Texas Semiconductor Innovation Fund to accelerate the Round Top project, supporting approximately 260 new jobs and more than $1.4 billion in capital investment. LCM metal and alloy capacity expansion remained on track for 3,000 MTPA by year-end 2026.
Net cash used in operating activities was $18.6 million, an improvement from $27.9 million in the fourth quarter but still elevated compared with $10.3 million a year earlier. With a commissioning magnet plant, a $2.8 billion acquisition in the pipeline, and a $1.2 billion greenfield facility on the drawing board, USA Rare Earth is attempting to compress years of supply-chain buildout into a matter of quarters.