8-K: Cleveland-Cliffs Reports Q4, Full-Year 2025 Losses

Cleveland-Cliffs Inc. reported a GAAP net loss of $235 million for Q4 2025 and a full-year net loss of $1.4 billion, despite strategic actions and an improved outlook for 2026.

Summary

• Cleveland-Cliffs reported a fourth-quarter 2025 GAAP net loss of $235 million, or $0.44 per diluted share, with an adjusted net loss of $0.43 per diluted share.
• Fourth-quarter 2025 consolidated revenues were $4.3 billion, consistent with the prior-year fourth quarter.
• The company recorded an Adjusted EBITDA loss of $21 million for the fourth quarter of 2025, an improvement from an $81 million loss in Q4 2024.
• For the full-year 2025, Cleveland-Cliffs reported a GAAP net loss of $1.4 billion, or $2.91 per diluted share, with an adjusted net loss of $2.48 per diluted share.
• Full-year 2025 consolidated revenues were $18.6 billion, a decrease from $19.2 billion in 2024.
• Full-year 2025 Adjusted EBITDA was $37 million, a significant decline from $773 million in 2024.
• The company achieved a record safety year in 2025, with the lowest Total Recordable Incident Rate of 0.8 per 200,000 hours worked since becoming a steel company.
• Due diligence for a strategic partnership with POSCO is ongoing, with a target to sign a definitive agreement in the first half of 2026.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a challenging year for Cleveland-Cliffs, with significant full-year losses and reduced profitability. While Q4 showed some sequential improvement and management is optimistic about 2026, the overall 2025 performance was weak.

Positives

• Fourth-quarter 2025 GAAP net loss improved to $235 million from $434 million in Q4 2024.
• Fourth-quarter 2025 adjusted net loss improved to $0.43 per diluted share from $0.68 per diluted share in Q4 2024.
• Fourth-quarter 2025 Adjusted EBITDA loss improved to $21 million from an $81 million loss in Q4 2024.
• Full-year 2025 steel product sales volume increased to 16.2 million net tons from 15.6 million net tons in 2024.
• Management anticipates dramatically improved results in 2026, citing improvements in the automotive sector, resolution of the expiring slab contract, and a constructive U.S. trade environment.
• Strategic actions taken in 2025 included optimizing the company's footprint, exiting non-core assets, signing multi-year contracts with major automotive customers, reducing unit costs, extending debt maturities, and lowering capital expenditures.
• The company achieved a record safety year, recording the lowest Total Recordable Incident Rate of 0.8 per 200,000 hours worked.
• Due diligence for a strategic partnership with POSCO is actively ongoing, with a definitive agreement targeted for the first half of 2026.

Negatives

• Full-year 2025 GAAP net loss significantly worsened to $1.4 billion ($2.91 per diluted share) from $714 million ($1.58 per diluted share) in 2024.
• Full-year 2025 adjusted net loss worsened to $2.48 per diluted share from $0.74 per diluted share in 2024.
• Full-year 2025 Adjusted EBITDA significantly decreased to $37 million from $773 million in 2024.
• Full-year 2025 consolidated revenues decreased to $18.6 billion from $19.2 billion in 2024.
• Full-year 2025 average net selling price per net ton of steel products decreased to $1,005 from $1,081 in 2024.
• Performance in 2025 was negatively affected by persistently weak production levels from the automotive sector, a value-destructive expiring five-year slab contract, and an adverse dynamic in the Canadian market.

Risks

• Continued volatility of steel, scrap metal, and iron ore market prices, which directly and indirectly impact product selling prices.
• Uncertainties associated with the highly competitive and cyclical steel industry and reliance on demand from the automotive industry.
• Potential weaknesses and uncertainties in global economic conditions, excess global steelmaking capacity and production, prevalence of steel imports, and reduced market demand.
• Severe financial hardship, bankruptcy, temporary or permanent shutdowns, or operational challenges of major customers, key suppliers, or contractors.
• Risks related to U.S. and Canadian government trade actions (e.g., Section 232, USMCA), tariffs, treaties, or policies.
• Impacts of extensive governmental regulation, including actual and potential environmental regulations relating to climate change and carbon emissions, and related costs and liabilities.
• The company's ability to maintain adequate liquidity, its level of indebtedness, and the availability of capital could limit financial flexibility.
• Risks and uncertainties related to the ability to realize anticipated synergies or other expected benefits of any acquisitions, including the acquisition of Stelco, and any potential transaction arising from the Memorandum of Understanding with POSCO.
• Challenges to successfully implementing the business strategy to achieve operating results in line with guidance.
• The outcome of, and costs incurred in connection with, lawsuits, claims, arbitrations, or governmental proceedings.
• Supply chain disruptions or changes in the cost, quality, or availability of energy sources, critical raw materials, and supplies.
• Cybersecurity incidents relating to, disruptions in, or failures of, information technology systems.
• Liabilities and costs arising in connection with business decisions to temporarily or indefinitely idle or permanently close an operating facility or mine.
• Uncertainties associated with the ability to meet customers' and suppliers' decarbonization goals and reduce emissions.
• Uncertain availability or cost of skilled workers to fill critical operational positions and potential labor shortages.

Future Outlook

Cleveland-Cliffs expects steel shipment volumes of approximately 16.5 17.0 million net tons for full-year 2026, with steel unit cost reductions of approximately $10 per net ton compared to 2025. Capital expenditures are projected at $700 million, selling, general and administrative expenses at $575 million, depreciation, depletion and amortization at $1.1 billion, and cash pension and OPEB payments and contributions at $125 million. Management anticipates dramatically improved results in 2026 due to an improved automotive sector, resolution of the slab contract, and a constructive U.S. trade environment.

Management Comments

• "Our performance in 2025 was negatively affected by persistently weak production levels from the automotive sector throughout the entire year, an expiring five-year slab contract becoming value-destructive during its last year, and a newly adverse dynamic in the Canadian market."
• "Fortunately, as we started 2026, these negative situations have all improved. At the same time, the trade environment in the United States continues to move in a very constructive direction, setting the stage for dramatically improved results this year."
• "We took the necessary actions in 2025 to set us up for future success. We optimized our footprint and exited non-core assets with minimal impact to flat-rolled output, signed multi-year contracts with all our major automotive customers, reduced unit costs year-over-year, extended our debt maturities, and lowered capital expenditures, among several other initiatives."
• "We also delivered a record safety year, achieving the lowest Total Recordable Incident Rate since becoming a steel company, at 0.8 per 200,000 hours worked."
• "POSCO continues to conduct due diligence as part of our recently announced strategic partnership. This remains the number one strategic priority for both Cleveland-Cliffs and POSCO, and engagement between the teams is active and ongoing. Both parties are focused on structuring a transaction that is highly accretive and strategically compelling for each company. The duration of these negotiations reflects the seriousness and potential scale of the opportunity. We are targeting signing a definitive agreement in the first half of 2026."

Industry Context

StockSavvy.ai notes that Cleveland-Cliffs' 2025 performance was significantly impacted by the weak automotive sector, a key end-market for its value-added sheet products. The anticipated improvement in 2026, coupled with a constructive U.S. trade environment, suggests a potential rebound for domestic steel producers, especially those with strong ties to automotive and infrastructure, aligning with broader expectations for industrial recovery.

Stakeholder Impact

• Shareholders: Negative impact from significant full-year net losses and reduced Adjusted EBITDA, but potential positive impact from strategic actions, improved 2026 outlook, and the POSCO partnership.
• Employees: Positive impact from a record safety year and optimized footprint, but potential uncertainty from exiting non-core assets.
• Customers (Automotive): Multi-year contracts signed, indicating continued strong relationships, but past weak production levels negatively impacted the company.
• Suppliers: Potential impact from supply chain disruptions and changes in raw material costs, as noted in risk factors.
• Creditors: Debt maturities extended, but high long-term debt of $7.253 billion remains a factor.

Next Steps

• Continue due diligence and negotiations for the strategic partnership with POSCO.
• Target signing a definitive agreement for the POSCO partnership in the first half of 2026.
• Host a conference call on February 9, 2026, at 8:30 a.m. ET to discuss results and outlook.
• Implement strategic initiatives to achieve 2026 expectations, including steel shipment volumes of 16.5 17.0 million net tons and unit cost reductions of $10 per net ton.

Key Dates

Recommendation

While Cleveland-Cliffs reported substantial full-year losses and a significant decline in Adjusted EBITDA for 2025, the fourth quarter showed sequential improvements. Management has outlined clear strategic actions taken in 2025 and provided an optimistic outlook for 2026, citing improved market conditions and cost reductions. The ongoing strategic partnership with POSCO also presents a potential catalyst. Given the mixed performance with strong headwinds in 2025 but a more positive forward-looking narrative and strategic initiatives, a 'hold' recommendation is appropriate as investors await execution on the 2026 guidance and the outcome of the POSCO negotiations.

Keywords

Cleveland-Cliffs, CLF, Steel, Steelmaking, Q4 2025 Earnings, Full-Year 2025 Results, Financial Report, Automotive Industry, Iron Ore, Adjusted EBITDA, Net Loss, Shipments, POSCO Partnership, Corporate Governance, Risk Management