Cleveland-Cliffs is a leading North America-based steel producer with focus on value-added steel products, and the question for the next twelve months is whether the company can convert the $286 million Q2 2026 Adjusted EBITDA that tripled from Q1, the $230 million Q2 2026 operating cash flow, the return to positive free cash flow, the $3.1 billion liquidity, the $575 million Q3 2026 Adjusted EBITDA guidance, and the under-2.5x debt-to-EBITDA leverage target by this time next year into the kind of continuous earnings improvement the company has been telegraphing. The Q2 2026 print was the cleanest test of that thesis, and the cleanest signal is that CEO Lourenco Goncalves said "the second quarter marked another step in returning to the earnings power this company is capable of and has demonstrated in the past. Even with extended maintenance outages in April and May, our second quarter adjusted EBITDA tripled from the Q1 level and Q3 adjusted EBITDA is expected to more than double Q2. As previously foreshadowed, we returned to positive free cash flow during Q2 and have begun reducing our debt." The strategic tension is the GAAP net loss of $134 million against the tripled Q2 2026 Adjusted EBITDA, and the forward question is whether the average selling prices, volumes, and costs moving in the right direction can compound into the strongest second-half earnings performance since 2021.
The tripled Q2 2026 Adjusted EBITDA is the cleanest read on the operating momentum, and the return to positive free cash flow is the proof. The Q2 2026 consolidated revenues of $5.2 billion were a $300 million increase from the prior quarter, the Q2 2026 operating cash flow of $230 million was the cleanest single read on the operating cash flow, the Q2 2026 GAAP net loss of $134 million or $0.25 per diluted share was a meaningful improvement from the Q1 2026 GAAP net loss of $229 million or $0.42 per diluted share, and the Q2 2026 adjusted net loss of $115 million or $0.20 per diluted share was a meaningful improvement from the Q1 2026 adjusted net loss of $0.40 per diluted share.
The $3.1 billion Q2 2026 liquidity, the $575 million Q3 2026 Adjusted EBITDA guidance, the maintained FY 2026 steel shipment volumes guidance of approximately 16.5-17.0 million net tons, the maintained FY 2026 capital expenditures guidance of approximately $700 million, the maintained FY 2026 SG&A expenses guidance of approximately $575 million, the maintained FY 2026 D&A guidance of approximately $1.1 billion, and the maintained FY 2026 cash pension and OPEB payments and contributions guidance of approximately $125 million anchor the print. The forward question is whether the average selling prices, volumes, and costs moving in the right direction can compound into the strongest second-half earnings performance since 2021.