Cleveland-Cliffs Inc. (CLF) - Q3 2025 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended September 30, 2025. Cleveland-Cliffs Inc. is a leading North American steel producer, vertically integrated from iron ore mining to finished steel products, with a primary focus on the automotive industry. The company completed the acquisition of Stelco Holdings Inc. on November 1, 2024, which is now fully consolidated in the 2025 results. The company operates primarily through one reportable segment: Steelmaking.
Key Financial Metrics
| Metric | Q3 2025 (3 Months) | Q3 2024 (3 Months) | YTD 2025 (9 Months) | YTD 2024 (9 Months) |
|---|---|---|---|---|
| Revenues | $4,734 million | $4,569 million | $14,297 million | $14,860 million |
| Net Loss (Attributable to Cliffs) | $(251) million | $(244) million | $(1,235) million | $(313) million |
| Adjusted EBITDA | $143 million | $122 million | $58 million | $854 million |
| Operating Cash Flow | — | — | $(449) million | $577 million |
| Free Cash Flow | — | — | $(870) million | $87 million |
| Long-Term Debt | $8,039 million | — | $8,039 million | $7,065 million |
| Cash & Equivalents | $66 million | — | $66 million | $39 million |
| Liquidity (Cash + ABL Availability) | $3.1 billion | — | $3.1 billion | — |
Note: Q3 2024 Operating Cash Flow and Free Cash Flow data is not explicitly provided for the quarter in the source text, only YTD.
Material Changes vs. Prior Period
- Revenue: Q3 2025 revenue increased 3% year-over-year, driven by the inclusion of Stelco (approx. $400 million), partially offset by lower volumes from inconsistent buying behavior and the idling of underperforming facilities (Riverdale and Steelton). YTD revenue decreased 4% due to lower realized revenue rates and volumes, despite Stelco's contribution.
- Profitability: Net loss widened significantly on a YTD basis ($(1,235) million vs. $(313) million) due to lower gross margins, increased depreciation from the Stelco acquisition and idled facilities, and higher idled facility charges. Q3 Adjusted EBITDA improved slightly to $143 million from $122 million, aided by the absence of a $71 million arbitration decision charge recorded in Q3 2024.
- Cash Flow: Operating cash flow turned negative YTD ($(449) million) compared to positive $577 million in the prior year, primarily due to a $1.0 billion decrease in net loss after non-cash adjustments and a $473 million increase in accounts receivable balances.
- Debt: Long-term debt increased by approximately $974 million YTD to $8.039 billion. This reflects the issuance of $1.7 billion in new senior notes (7.500% 2031 and 7.625% 2034) to refinance maturing debt and fund operations.
Guidance, Outlook, and Risks
- Market Outlook: Management expects domestic steel demand to grow, supported by recently implemented steel and automotive tariffs, declining interest rates, and manufacturing on-shoring. HRC pricing averaged $843/ton in Q3 2025, up 24% from Q3 2024.
- Operational Changes: The company idled or closed six operations in 2025 to optimize its footprint, including the Dearborn Works blast furnace, Steelton, Conshohocken, Riverdale, Minorca mine, and partial idling of Hibbing Taconite mine. These actions resulted in significant restructuring charges and asset impairments.
- Strategic Initiatives: The company is exploring the sale of non-core assets and recently idled facilities to pay down debt. It is also exploring rare earth extraction potential at its mining assets.
- Risks: Key risks include volatility in steel and raw material prices, reliance on the cyclical automotive industry, potential supply chain disruptions, and the financial impact of idling facilities. The company faces litigation risks, though a significant antitrust lawsuit by U.S. Steel/Nippon Steel was dismissed with prejudice in September 2025.
- Subsequent Events: In October 2025, the company redeemed $685 million of 2027 senior notes and issued an additional $275 million of 7.625% 2034 notes.
Investor Verification Checklist
- Debt Refinancing: Verify the impact of the new 7.500% and 7.625% senior notes on future interest expense and the timeline for debt reduction.
- Idled Facility Costs: Confirm the total expected costs associated with the idling of Dearborn, Steelton, Conshohocken, and Riverdale, and the timeline for potential restarts or permanent closures.
- Stelco Integration: Assess the realization of synergies from the Stelco acquisition and the performance of Canadian operations amidst global overcapacity.
- Automotive Demand: Monitor North American light vehicle production rates and the effectiveness of tariffs in driving demand for domestic steel.
- Liquidity Position: Review the utilization of the ABL Facility and the company's ability to generate positive operating cash flow in the coming quarters.