5N Plus Shares Drop 15% as Rising Costs Erode Margin Gains

The company reported second-quarter revenue of 122.4 million dollars, a 28% increase that surpassed analyst expectations of 114.1 million dollars. However, this top-line growth failed to shield the bottom line from rising expenses. Adjusted gross margin contracted to 30.3% from 34.6% a year earlier, as higher prices for metals and chemicals weighed heavily on production. CEO Richard Perron attributed the pressure to these cost headwinds alongside temporary inefficiencies stemming from ongoing capacity expansion initiatives.

Despite the immediate market reaction, the broader outlook for the firm remains tethered to a push for domestic supply chain security. 5N Plus provides high-purity materials critical to space satellite solar cells, renewable energy, and defense technology—sectors currently bolstered by government efforts to decouple from Chinese export controls. While the company holds a 420 million dollar backlog, that figure represents 313 days of annualized revenue, a decrease of 23 days from the previous quarter. Management has reaffirmed its full-year guidance, maintaining a target for adjusted EBITDA between 100 million and 105 million dollars.