Cleveland-Cliffs Inc. 2025 Q2 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 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, expanding its presence in Canada. The company operates primarily through one reportable segment: Steelmaking.
Key Financial Metrics
| Metric | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) |
|---|---|---|---|---|
| Revenues | $4,934 million | $5,092 million | $9,563 million | $10,291 million |
| Net Loss (Attributable to Cliffs) | $(483) million | $2 million | $(978) million | $(65) million |
| Adjusted EBITDA | $97 million | $323 million | $(77) million | $737 million |
| Diluted EPS | $(0.97) | $0.00 | $(1.97) | $(0.13) |
| Operating Cash Flow | — | — | $(306) million | $661 million |
| Free Cash Flow | — | — | $(570) million | $322 million |
| Long-Term Debt | $7,727 million | — | — | — |
| Cash & Equivalents | $61 million | — | — | — |
| ABL Availability | $2,618 million | — | — | — |
Note: Q2 2024 Operating Cash Flow and Free Cash Flow data is not explicitly provided for the quarter in the text, only YTD.
Material Changes vs. Prior Period
- Revenue Decline: Revenues decreased 3% in Q2 2025 and 7% YTD 2025 compared to the prior year. This was primarily driven by a 14% drop in direct automotive revenues due to lower demand, partially offset by incremental volumes from the Stelco acquisition.
- Profitability Deterioration: The company reported a net loss of $483 million in Q2 2025, a significant shift from a net income of $2 million in Q2 2024. Adjusted EBITDA fell to $97 million in Q2 2025 from $323 million in the prior year.
- Cost Drivers: Gross margin decreased due to lower average selling prices (impacted by product mix and index prices) and increased depreciation expenses ($120 million impact) resulting from the indefinite idling of the Conshohocken and Riverdale facilities.
- Restructuring & Impairment: The company recorded $86 million in restructuring charges and $39 million in asset impairments in Q2 2025, associated with the indefinite idling of the Steelton rail production facility and other operational adjustments.
- Debt Issuance: In February 2025, the company issued $850 million of 7.500% Senior Notes due 2031, increasing total long-term debt to $7.727 billion as of June 30, 2025.
Guidance, Outlook, and Risks
- Market Outlook: Management expects domestic steel demand to grow, supported by recently implemented steel and automotive tariffs, improved end-user demand, and government legislation promoting manufacturing on-shoring. Domestic HRC prices averaged $910/ton in Q2 2025, up 16% from Q2 2024.
- Operational Strategy: The company idled six operations in 2025 (including Dearborn Works blast furnace, Conshohocken, Riverdale, Steelton, Minorca mine, and partial idling of Hibbing Taconite) to optimize its footprint and consume excess inventory. A new $150 million vertical stainless bright anneal line was commissioned at Coshocton Works.
- Liquidity: Total liquidity (cash plus ABL availability) stood at approximately $2.7 billion as of June 30, 2025. The company maintains a long maturity runway with no debt maturities until 2027.
- Risks: Key risks include volatility in steel and raw material prices, reliance on the cyclical automotive industry, potential trade policy changes, environmental remediation costs, and the ability to realize synergies from the Stelco acquisition.
Investor Verification Checklist
- Idled Facility Costs: Verify the total run-rate impact of the $204 million in idled facilities charges recorded in Q2 2025 and the timeline for potential restarts.
- Automotive Demand: Monitor North American light vehicle production trends and the effectiveness of new tariffs in shifting demand to domestic steel producers.
- Debt Service: Assess the impact of the new $850 million 7.5% note issuance on future interest expense and cash flow coverage ratios.
- Stelco Integration: Track the realization of identified synergies from the Stelco acquisition, particularly in procurement and SG&A reductions.
- Raw Material Costs: Watch for price fluctuations in busheling scrap and energy (natural gas/electricity) and the company's ability to pass these costs through to customers.