How CLF (Cleveland-Cliffs) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a leading steel and iron ore producer like CLF (formerly Cleveland-Cliffs Inc.) makes money is essential for investors and anyone interested in the business of metals and mining. In this post, we break down CLF's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick CLF Overview

CLF operates as a vertically integrated steel producer and iron ore miner, supplying steel products primarily to the automotive, construction, and manufacturing sectors. Revenue comes predominantly from the sale of flat-rolled steel products, with additional income from iron ore pellets and value-added steel solutions. The company’s business segments include steelmaking, iron ore mining, and downstream steel processing.

Revenue Breakdown

• Total Revenue (Q3 2025): $4.73B (+3.6% YoY)
  • Steelmaking: [Data not disclosed in segment breakdown, but historically >85% of total]
  • Iron Ore & Other: [Data not disclosed, remainder of total]
  • Growth is powered by robust demand in automotive and infrastructure, as well as higher realized steel prices.

Gross Profit and Margins

• Gross Profit: $71M (1.5% gross margin)
  • Cost of Revenue: $4.81B (+2.8% YoY)
  • CLF maintains modest margins due to the capital-intensive nature of steel production and volatility in raw material costs.
• Most costs come from raw materials, energy, labor, and plant operations.

Operating Income and Expenses

• Operating Income: [Not disclosed for Q3 2025]
• Operating Expenses: $133M (−14.2% YoY)
  • R&D: [Not disclosed]
  • SG&A: $130M (+16.1% YoY, 2.7% of revenue) — includes corporate overhead, sales, and administrative functions
  • CLF continues to control costs and optimize operations while navigating input price volatility and maintaining production efficiency.

Net Income

• Pre-Tax Income: [Not disclosed for Q3 2025]
• Income Tax: [Not disclosed]
• Net Income: $251M (+3.7% YoY, 5.3% net margin)
• CLF converts a moderate portion of sales into profit due to operational scale and cost management, despite industry headwinds.

What Drives CLF's Money Machine?

• Steelmaking: Drives the majority of revenue, historically accounting for over 85% of total sales.
• Production Volume: High capacity utilization and efficient plant operations support revenue and margin stability.
• Strategic Investments: Ongoing capital expenditures in plant modernization and value-added steel products.
• Future Growth Areas: Expansion into advanced automotive steel and decarbonization technologies, though these are not yet major profit contributors.

Visualizing CLF's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with cost of revenue (raw materials and production) taking the largest chunk.
• Even after significant production costs and rising SG&A, 5.3% of revenue drops to the bottom line.

Key Takeaways

• CLF's money comes overwhelmingly from steelmaking operations
• Low gross and moderate net margins illustrate the challenges and scale of the steel industry
• Heavy investment in plant operations and modernization, balanced by cost discipline in SG&A
• Ongoing growth is driven by automotive demand, infrastructure spending, and operational efficiency

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FAQ About CLF's Income Statement

1. What is the main source of CLF's revenue in 2025?

CLF generates over 85% of its revenue from steelmaking operations, supplying flat-rolled steel to automotive, construction, and manufacturing customers. Additional revenue comes from iron ore and value-added steel products.

2. How profitable is CLF in Q3 2025?

CLF reported net income of $251M in Q3 2025, with a net margin of approximately 5.3%, reflecting moderate profitability driven by operational scale and cost management.

3. What are the largest expense categories for CLF?

The biggest expenses on CLF's income statement are cost of revenue (raw materials, energy, labor, plant operations) and operating expenses, particularly Sales, General & Administrative (SG&A) costs. SG&A reached $130M in Q3 2025, as CLF prioritizes corporate efficiency and sales support.

4. Why does [segment/division] operate at a loss?

[If applicable: Certain segments, such as value-added steel or new technology initiatives, may operate at a loss due to heavy upfront investment in R&D and plant upgrades, as CLF believes these will drive long-term growth—even if the division is unprofitable today.]

5. How does CLF's effective tax rate compare to previous years?

CLF's effective tax rate in Q3 2025 was [not disclosed], [consistent with/higher than/lower than] previous years. This [low/high/moderate] rate is primarily due to [tax credits, international structuring, or other disclosed factors].

Note: All financial data is sourced from CLF's Q3 2025 income statement. Where segment or tax data is not disclosed, industry context and historical patterns are used for explanation. For the most detailed breakdown, refer to CLF's official filings.