Cleveland-Cliffs (CLF) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $4.63 billion, with an adjusted EBITDA loss of $174 million and a net loss of $495 million, driven by weaker steel prices, underperforming non-core assets, and lower automotive demand.

• Major operational restructuring included idling six facilities to optimize the footprint and cut annual costs by over $300 million.

• The Stelco acquisition expanded Canadian operations and spot market exposure, with all Stelco sales shifted to Canada due to tariffs.

• Strategic actions include optimizing the operating footprint, exiting unprofitable markets, and addressing a disadvantageous slab supply contract set to expire December 2025.

• The company is positioned to benefit from U.S. policy shifts and automotive production reshoring, with meaningful improvements expected in H2 2025 and a full reset in 2026.

Financial highlights

• Q1 2025 adjusted EBITDA loss was $174 million, with a net loss of $495 million and revenue of $4.63 billion.

• Total shipments in Q1 were 4.14 million tons, with an average selling price of $980 per ton.

• Gross margin for Q1 2025 was negative 9%, and operating loss was $538 million.

• Cash and cash equivalents at quarter-end were $57 million, with total liquidity of $3.0 billion and $3.3 billion in secured capacity.

• Interest expense increased to $140 million, and free cash flow was negative $503 million.

Outlook and guidance

• Full impact of $300 million in annualized cost savings from asset idling expected in H2 2025.

• ASP expected to rise by $40 per ton from Q1 to Q2, with cost per ton up $5 sequentially; unit cost reductions guided to ~$50/ton for 2025.

• 2025 capital expenditures guidance lowered to $625 million, with further reductions anticipated.

• SG&A expenses for 2025 guided at $600 million, down from $625 million.

• EBITDA expected to improve meaningfully in H2 2025 and reset higher in 2026 as strategic actions take full effect.