Q4 2025 Earnings Call — February 11, 2026
Analyst Ryan Fite (B. Reilly Securities): Good morning, guys. Thanks for taking my question. Maybe we could talk about the timeline a little bit more. It sounds like you're looking to improve on the 42-month forecast that you've talked about in the past. Can you talk about some of the potential initiatives that might help pull that forward, whether it's more funding, other federal programs, or anything else we should be aware of?
Executive Amir: Good morning, Brian. Appreciate your question. Thank you for calling today. You're pointing to an area that is increasingly important to us, obviously, as we now embark on actual manufacturing of centrifuges and fulfilling some of our commitments. Execution is becoming and has become a priority for us. As I've stated earlier in the remarks, continuous improvement and the ability to reduce unit costs and go faster is paramount as we build out our capacity. We have to do it in parallel. And I will tell you that we have quite a few folks dedicated to this, and we're dedicating resources to this. And it is evident to me that we already have a good list of opportunities that we're executing on. We have a good list of partners that we've announced. For example, Fluor, which we're very proud of that partnership. They're best in class. And others that we're working with that we have not announced and in the future we'll make announcements related to that. All this to say that being able to go more efficiently, reducing unit costs, and going faster is a priority for us, as I said, day one, and we're executing on it in parallel. And stay tuned for more updates as we continue with the process.
Analyst Rob Brown (Lake Street Capital Markets): Good morning, and congratulations on all the progress. On the commercialization side of the LEU commercialization, is that capacity ramp sort of a similar timeline to the HALU ramp? And, you know, when does that kind of reach a point where you have that backlog turn from contingent to sort of final?
Executive Muriel: Well, good morning. Thanks for calling in and for the question. Let me just maybe repeat the question, make sure that I'm answering the right one. Your question, first of all, is around the contingency associated with our sales and when does that turn into a firm commitment. Did I get it right?
Analyst: Yeah, correct. Thank you.
Executive Muriel: Yeah, so this is not something that at this point we will get into a lot of contractual details. Needless to say that we, as I stated before, have the intention and the plan and we're progressing towards fulfilling our commitments. This backlog of LEU commitments that we've announced is extremely important to us. And again, I will not comment specifically on the details of the contractual arrangements. But this is exactly what we're executing towards, and we have every intention to meet our commitments.
Analyst: Okay. Thanks, Muriel. Turn it over.
Analyst Eric Stein (Craig Hallam Capital Group): Good morning, everyone. Hey, good morning. So maybe just on the CapEx, appreciate the CapEx guidance for 26. You know, if you could talk about, if possible, maybe the linearity of that CapEx expected throughout the year. And then also, you know, as we think about the number that you gave, is that kind of a representative number, you know, on an annual basis as you work towards that initial, you or, I mean, is this a number that is more representative? It's the first year, and you likely, you know, it either increases from there or is lower going forward.
Executive: Yeah. Thanks for calling in. What I would say is looking past 2026, obviously our CapEx spend and the manufacturing process gets more linear. Currently, right now, you know, the number that we have provided for guidance is capital spend. So that does include some long lead procurement, potential prepayments on supplier agreements, and also engineering work at our Python facility. So the first year is not indicative of the linear spend that I anticipate seeing in 27 through 29 period due to those factors. What I will say is as we move through the year, anytime that we see an adjustment, we'll reflect that in the guidance and we'll try to keep you, it's why we want to inform the investors the best way we can on where we're going to be over the next 12 months, but also on what demand shapes out to be from a plant standpoint at both manufacturing and piped in, and we'll work towards fine-tuning that guidance, but initial year does include some prepayments and long-lead procurement.
Analyst Jed Deutschmeyer (William Blair): Hi, guys. Thanks for taking my question. Congrats on the progress. I guess, you know, for my one question, just the achieving the nth of a kind, you know, I'm just wondering if I'm reading into this correctly. I'd always assume that, you know, maybe it took the 3.5 million SWOO to achieve that, and it sounds like that's not the case, that you can achieve that target with less capacity than. And so I'm just curious if you might be able to give a little bit more framework on the relative capacity to achieving the nth-of-a-kind target. Thanks.
Executive: Yes. Good morning, Jeff. Thanks for calling in. Good question. The nth-of-a-kind will be achieved way before the 3 million sous, as you mentioned. I would have to say that, in my view, that this is an important announcement to make to the analysts here, to shareholders and investors. As you know, one of the greatest obstacles for any new entrant into the market is the end of a client cost. And the fact that we are commencing, we're building towards a certain volume and capacity, and the fact that we are able to get through the first of a kind in this short period of time, I think is remarkably important. As always, I'm very careful. We're not disclosing full costs. And so I'll stop there. But I believe I answered your question. And like I said, the fact that we're crossing the answer of a kind cost is a big announcement, a big achievement for us.
Analyst: You did. Thanks.
Analyst Joseph Rieger (Roth Capital): Hey, Amira and team. Thanks for taking the questions. I guess most of my questions have been answered, but just to kind of touch on, you know, looking forward a couple of years, has the government started to come around on this Jan 1, 2028 cutoff for Russian imports? Has there been any willingness to discuss that? that given domestically you guys should be first to market, that there isn't really going to be supply in 2028, 2029 domestically?
Executive: Yeah, well, another good question, and thank you for calling in as well. I can give you my perspective from interfacing with customers, potential customers, be they on the LEU side or on the HALU side, in other words, the existing commercial fleet or the advanced reactors that are being built, it seems like there's a lot of demand that is being stacked up in around those years towards the end of the decade. We are seeing a lot of demand there. On the government side, I really can't report anything because there's nothing really to report. There's nothing out there in the public domain that expresses any concerns. But as you know, the real concerns and the real push will come from the customers, the industry, the utilities themselves, if and when the problem presents itself. Some of the leading indicators, as I mentioned earlier, we are already experiencing in form of intense discussions and discussions around HALU. As you know, we're bringing HALU supply ahead of advanced reactors being commercially viable. And so that creates a lot of demand as well. Just
as a reminder, HALU is not only enrichment of HALU, it requires a significant enrichment of LEU and LEU capacity as well.
So you have a force multiplier there that will only reveal itself in the next few years. But back to your original question, nothing to report from the government side. And if the government will take note of it, it most definitely will have to start from the utilities and the customers themselves pointing it out as a problem.
Analyst: OK. Thanks for turning it over.
Analyst David Chloe (UBS): Hey, everyone. Good morning. Thanks for taking my question. I guess really quick, the 26 guide is flat year over year for revenue. Just wondering if you could kind of remind us of some of the contract dynamics for your long-term supply arrangements, and then also if and when we should expect to see any kind of step up in line with some of the changes we've seen in long-term SWO prices in line with some of the indices. Thank you.
Executive: Yeah, so our guidance is flat. We picked the midpoint, and obviously there's a number of factors, obviously, around that guidance. As we mentioned on the call, you know, we did have one shipment that obviously impacted our year-end results for gross profit all the way down to net income and earnings per share. And these are some of the challenges that we faced just with normal shipping delays. I would say this was not due to any permitting or any waivers that had to go along with any Russian material. But we see upside to our potential guidance. The market continues to improve itself. We've seen some record high spot prices in SWU. We hope those dynamics continue. And, you know, a lot of our supply is contracted, both from, you know, two foreign sources. We feel comfortable on our supply side. Our goal is to maximize the margin on the revenue side and sales to our customer.
Analyst Jeff Gramp (Northland Capital Markets): Good morning. My question is regarding the timeline that you guys have put out to initial enrichment capacity. I'm curious, are there more important milestones or roadblocks that would more tangibly de-risk the timeline that you guys have put out that you could communicate along the way? And what might those be? Just kind of wondering how you guys are able to communicate publicly progress towards de-risking that timeline. Thank you.
Executive: Yeah, well, thanks for calling in. Another great question on execution here. So if you think about lead times to production, a lot of it has to do with our own cycle times, our supplier cycle times, the lead times that we can get our suppliers to commit to, how we configure our supply chain. All of these are being worked on, as I said, as we speak right now and in parallel with our actual initial build of the centrifuges. We do, as I said earlier, look at different partners, different ways that we can be more efficient and faster. I foresee that when those mature and there's something to report, we certainly will be very transparent in how we announce them. We will uncover efficiencies as we go through the process, and I'm sure that there will be more announcements that will be made. I believe I answered the question. I think it's important to note that we do see demand peaking around the time of when we are bringing our capacity. And to the earlier question by the earlier analyst around issues around misalignment of supply and demand, we're predicting that would be the case.
We predict that there would be issues around supply and the ability to meet the demand. And so we're doing everything in our power to be able to expedite that to the market. And again, the example that I used there, if we start seeing real committing demand for HALU, which we're already in discussions with several OEMs, and we're starting to see that happen, especially after we got the announcement out on the award for the $900 million from the DOE, we're seeing great engagement from a lot of the OEMs. Once those start becoming reality, and I predict they will very soon, then that creates huge demand for LEU as well. I think all of that is going to become a lot clearer as we step through the major milestones this year and in the next few years. I just will add that the importance of our supply chain is critical. We're working very diligently on making sure our supply chain meets national security needs. Those steps in order to meet that supply chain requirements, we have to be careful with. We have to be prudent and make sure that we cover all of our bases. Once we achieve those supply chain requirements for national security, it allows us to move a little quicker.
We'll continue to provide updates throughout the year and in future quarters on how those milestones can be tracked, and we'll hold ourselves accountable.
Analyst: Great, I appreciate those thoughts. Thank you, guys.
Analyst Vikram Bagri (Citi Group): Hi, it's Ted on for Vik. Thanks for taking the question. Could you talk about the halo production target that you have? On a metric ton basis, it looks like it's roughly enough for an initial load for one of the advanced reactors. So could you just confirm whether that quantity includes both an assumption of market demand as well as the demand that you see from the DOE task orders?
Executive: Yes. Yeah, good morning. Thank you for that question. The way I read
your question is around the capacity and what that capacity actually means for the industry in terms of the ability to satisfy some of the initial cores or what they may be. We've got to remember the intent of the DOE program was to stimulate the market. So here we had a market where there was not necessarily demand that anybody could commit to. And the Department of Energy had widely said, well, what we're going to do is we're going to invest, we're going to create the capacity, and then we're going to allow the OEMs to contract for that capacity. And exactly as they planned, we're starting to see that. We're seeing the OEMs now lining up and having discussions and conversations for the capacity that's going to become available. More specifically to what does that number represent, it depends on the design. It depends on the specific OEM, the size of the reactor. It depends on how they're going to configure their supply chain and what enrichment they would require. I will point out two things to you.
Number one, we did say that it is our full intention to have both LEU and HALU capacity, and we're progressing on those fronts, and it is our intention to serve the commercial and national security needs, and we're progressing on those two fronts as well. And so there is really no specific answer to that other than the fact that we will continue expanding our plans if need be, and we're pushing as hard as we can to get as much offtake as possible and in demand as possible. And if need be, our plans would be expanded accordingly. This is a good kickoff and starting point for us in terms of our capacity assumptions.
Analyst: Got it. Very helpful. I have one follow-up. Just in terms of the guidance, could you just remind us how pricing is set in the contracts? Are you able to talk about what portion of the planned deliveries for 2026 already have the cost of supply fixed?
Executive: Yeah, so in our guidance, we don't comment on the contractual makeup of our contracts. What we have said is we do have secure supply from two foreign sources, and that allows us to get comfort around our guidance and secured that we have everything in place, both waivers and, you know, as I said, normal shipping channels to move forward.
Analyst Stephen Gennaro (Stifel): Thanks. Good morning, everybody. I was curious what you could tell us on this front. When we think about, you know, the cap extra spending to build out capacity over the next decade. How do you think about the evolution of SWU prices to sort of support the economics behind it? And I know you're not going to give me the exact number, but, like, how do we think about SWU for HALU and LU? And just in your mind, like, how does that dynamic play out?
Executive: Yeah, good. Thanks for that question, Stephen. Thanks for calling in today. I think it's an important question topic to discuss because, you know, we talk a lot about cost, which is a very important part of the project and the elements that we're considering. Likewise, the school prices out there and our ability to contract for higher school prices or more favorable school prices is a major consideration for us. So I think the question of how do you see the school prices sort of momentum in the I think is something we discuss and debate and monitor very closely internally. The SWO prices, in my view, are going to adjust down only if one of two things happen. Well, if one of two things happen. Either demand goes down, in other words, we're going to start shutting down reactors, or basically the supply side is going to outpace the demand. I sure hope that the former does not happen. There's no indications of that. And for the latter, most of the announced expansions, either it's us or our competitors, is based on contracted SWOs.
So there is really nobody out there that is building but I call just in case already to serve SWOOs that they will be eager to get off and sell on the market. All this to say that my view is that as supply becomes tighter towards the end of the decade and as utilities start going out for bids, I think that would continue to apply upward pressure on SWOO prices. And so that obviously strengthens our business case. That strengthened our investment and our case for shareholders. And that really is how I view the situation. Now, this doesn't even include some of the extra and the bonus and opportunities that are out there. So, you know, if advanced reactors become a dominant force in the market, you know, somebody comes out and announces major build of advanced reactors, that is going to apply even further pressure on not only HALU, and as I mentioned earlier, on LEU swill capacity as well. I think that would be a big upside and a big opportunity as well. You know, we went through a major geopolitical event where the largest producer of enrichment in the world has really been not going to be trading in the Western market.
And I think the ramifications and the ripples of that are not going to be settled for a long time, in my view.
Analyst: Great. That's great color. Thank you.
Analyst Sameer Joshi (HC Wainwright): Thanks for taking my questions and congrats on the good progress.
The question is about the 900 million from the task order, DOE task order. Given that advanced reactors are likely to come online towards the end of the decade, should we expect these 10-year contracts to really be 5-year contracts and get the money up front loaded?
Executive: Well, good morning. Thank you for calling and really, really good topic to talk about. So we, as I mentioned earlier, we now are in discussions with numerous folks about their needs, what we can supply and some commercial discussions are taking place as well. The way I view it is we will be looking to maximize the commitments from suppliers. Obviously, longer-term commitments are more favorable to us. That would be reflected in the pricing as well. I mean, when you look at contract pricing, it takes all of that into account. You know, your question was about front-loading some of these contracts from a cash perspective. I mean, obviously, these are all the things that we constantly try to optimize, and we will continue to try to optimize in the best interest of our shareholders, particularly that most of the schools that we're selling is what I call expansion schools. These are schools that we're investing capital in. So, absolutely, we will be looking to optimize all of these things. Beyond that, comments about any specific contracts or terms and conditions, I'll refrain from discussing here.
Analyst Bill Peterson (J.P. Morgan): Yeah, hi. Good morning, Amir and Todd. Thanks for all the details, including the guidance parameters for the year. I was wondering if you can double-click on what opportunities you have to pull in, you know, the 42-month timeframe you spoke of, as well as, I'd say, to build out more broadly. I guess what I'm getting at is, you know, what's under your control versus suppliers or other third parties? How much is contingent on additional financing, negotiations with suppliers and partners, or I think you alluded to already, or government approvals related to national security?
Executive: Yeah. Well, good morning, Bill. Thanks for that question. I think that what you're double-clicking on is exactly the areas of the most important conversations we're having internally right now. As I said, execution is paramount. Meeting our commitments is paramount. In parallel with that, we've got to be able to generate opportunities and do better than what we committed to. If you look at what are those opportunities, and I'm just going to use general terms and general themes, we're very unique in that we're building our own centrifuges. We have the capability, obviously, to build our centrifuges. We have partners that are suppliers. And so a lot of what we do is really within our control, and we have a pretty wide range of motion in being able to generate the opportunities. So, for example, things like cycle time around some of the components that we manufacture, working, incentivizing and structuring contracts and relationship with suppliers to incentivize them for shorter lead times, and ensuring that we structure our oversight, ensuring that we structure our own processes to yield best quality, first-time, best yield that we can.
To me, this is fundamental elementary manufacturing excellence, and we are partnering, bringing people that specialize in it, utilizing every piece of knowledge and experience that are out there to come and help us. And so far, we have been pleased with the progress. And as I said earlier, we are really looking forward to making more announcements around how we're doing, who we're partnering with, and what value that brings to the project and the shareholder. I don't know that I will be able to go more specific than that, but in general, these are the themes that we're attacking. And as I said, numerous times, I think this is one of the most important topics that we're applying energy into at the present time. And I'll just add, one of the important factors on deploying capital is having a well-capitalized balance sheet. Our line of sight to our spend, not only over the next 12 months, but 24 months, allows us to make sure that we can deploy capital without slowing down that timeline. Regardless of market conditions. We do not want to be forced in any downward market conditions to be raising expensive capital and negatively impacting our shareholders.
So we'll be optimistic and opportunistic with our balance sheet to make sure we're capitalized to cover ourselves, that we do not slow down that timeline in deploying capital to meet our manufacturing rates.
Analyst: Appreciate the call, Amir and Todd. Thank you.
Analyst Lawson Winder (Bank of America): Thank you very much, Operator. And hello, Amir and Todd. Thank you for today's update. I'd like to also say congratulations on the $900 million to support your HALU build-out. In that vein, I'd like to just dig down on something that might be a really obvious question, but I'm just not totally clear on it. And that is, longer term, what is your sourcing strategy for the LEU feed for the HALU? Maybe put another way, how much of your LEU production will be captive to your HALU production and how much of that 3.5 million SWU then will be available to satisfy LEU primary demand? And then further, if the LEU capacity isn't available to meet the HALU feed, what are the options, particularly given that the Russian supply will be going away after 2028?
Executive: All right, good morning. Good question. I'm going to answer your question very generally, and please let me know if there's more specific details that I can provide. From a general perspective, it is our intention, our plan, our goal, our strategy to maximize the capacity of the facility that we're building. As I said, we kicked off with a certain base case from which we're going to build progressively, and that would depend on customer commitments, which we are actively soliciting and getting great engagement as of the announcement of the $900 million. Those commitments would be able to drive our continued volume expansion of LEU and or HALU, depending on the contract type. For our HALU customers, just from general terms, it would be my intention to want to optimize the SOOs that we provide, which means that I would try to have a contract that includes providing HALU and providing the LEU, and obviously to be able to enrich both.
So I'm not really commenting on any specific contract or any specific discussion or negotiation that we have in place, but it is our intention to be able to provide both LEU enrichment and HALU enrichment to the optimal and maximal capacity that we can. And to your second part of the question, for example, hypothetically speaking, if you have a HALU contract for which you don't have sufficient LEU feed, I mean, that usually contractually speaking is not an issue. You know, there are contracting mechanisms either by ourselves or the customers that are able to utilize other suppliers for that. Now, I earlier said that I foresee that there's going to be tightness towards the end of the decade. So, notwithstanding that comment, we have the ability or the customers have the ability to contract feed should that be needed. But to my overall theme, we're going to try to optimize and maximize both because economies of scale for the facility are important.
Analyst: Okay, thank you very much. That's a fantastic call.
Executive Neil: Thank you, operator. This will conclude our investor call for the fourth quarter and full year 2025. As always, I want to thank our listeners online and our analysts who called in. We look forward to speaking with you again next quarter. Thank you. This will conclude today's conference. You may disconnect
at this time, and thank you for your participation.