Transcript: Centrus Energy Q2 2026 Earnings Conference Call

Centrus Energy (AMEX: LEU ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. This content is powered APIs. 8 million.

S. Department of Energy to support large-scale production capacity, boosting its LEU and HALEU capacity expansion. 5 billion, with significant contributions from LEU and HALEU segments, and the company maintains a positive outlook with a 2026 revenue guidance of $450 to $500 million. Operational highlights include the signing of HALEU supply agreements with Oklo and X-energy, and the successful completion of all HALEU production requirements under its demonstration contract ahead of schedule.

S. nuclear fuel supply chain. Full Transcript OPERATOR (Operator) Good morning, ladies and gentlemen, and welcome to the Centrus Energy Q2 2026 earnings call. At this time, all lines are in listen-only mode.

Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 6, 2026. I would now like to turn the conference over to Neal Nagarajan, Head of Investor Relations.

Please go ahead, sir. Neal Nagarajan, Senior Vice President and Head of Investor Relations Good morning. Welcome, and thank you to all of our callers as well as those listening to our webcast. Today's call will cover the results for the second quarter 2026 ended June 30th.

Today we have Amir Vexler, President and Chief Executive Officer, and Todd Tonelli, Senior Vice President, Chief Financial Officer and Treasurer. This conference call follows our earnings news release issued yesterday. We have filed a report for the second quarter on Form 10-Q earlier today. All of our news releases and SEC filings, including our 10-Ks, 10-Qs, and 8-Ks, are available on our website.

A replay of this call will also be available later this morning on the Centrus website. I would like to remind everyone that certain information we may discuss on this call today may be considered forward-looking information that involves risks and uncertainty, including assumptions about the future performance of Centrus. Our actual results may differ materially from those in our forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in our forward-looking statements is contained in our filings with the SEC, including our annual report on Form 10-K and quarterly reports on Form 10-Q.

The forward-looking information provided today is time-sensitive and accurate only as of today, August 6, 2026, unless otherwise noted. Please note that we report results using non-GAAP financial measures, which we believe provide investors with additional understanding of the company's financial performance as well as its strategic financial planning, analysis, and period-to-period comparability. A reconciliation to the most directly comparable GAAP measurements is included in the financial results section of our earnings release. This call is the property of Centrus Energy.

Any transcription, redistribution, retransmission, or rebroadcast of the call in any form without the express written consent of Centrus is strictly prohibited. Thank you for your participation, and I'll now turn the call over to Amir. Amir Vexler, President and Chief Executive Officer Thank you, Neil, and thank you to everyone on the call. Today we reported strong financial and operational results for the second quarter of 2026 that were boosted by tailwind growth across all of our major addressable markets: existing and growing commercial LEU, national security, and HALEU.

These developments continue to underscore the growing imbalance in uranium enrichment supply and demand and are reflected in the continued growth in published LEU pricing. And by signing the DOE's enrichment award, we have unlocked substantial non-dilutive, non-debt funding to advance our commercial centrifuge build-out program. The funding helps de-risk our build-out and advances our progress through first-of-a-kind cost while creating meaningful jobs across this nation. Let me first walk through the demand side of that equation.

We are witnessing strong demand tailwinds in our primary market, global commercial LEU, to support baseline electricity growth for existing and proven Gen 2 and Gen 3 reactor designs. , the NRC recently proposed multiple regulatory changes and amendments that have the potential to further stimulate the industry's growth. If finalized, these changes could expedite new nuclear capacity coming online while lowering development costs for operators. Furthermore, the newly released American Nuclear Supply Chain Loan Program seeks to help finance and accelerate the deployment of new large-scale nuclear reactors across the United States.

Meanwhile, power uprates and restarts of existing nuclear facilities continue to drive more nuclear energy coming online and subsequent LEU demand. International LEU demand is concurrently set to increase across a number of regions. In Europe, Sweden and the Netherlands are focused on making new nuclear developments possible, while Belgium is looking at ways to restart shuttered reactors. And in Asia, we see multiple areas of growth.

In April, for example, TEPCO brought back online the 1,300 megawatt Kashiwazaki reactor. Turning to the government market, we continue to see growing demand signals for enriched uranium across various departments as agencies explore avenues to add nuclear power to their energy generation plans. And in the national security market, we continue to work with the NNSA on its intent to sole source certain enrichment activities from Centrus. Recall that Centrus is the only viable production-ready technology that can meet national security needs.

Combined, these are strong signs of potential growth in the size and duration of the government market. We are simultaneously seeing signs of growth in the HALEU market, where three of four reactor designs that reached criticality ahead of DOE's July deadline are fueled by HALEU. We also believe that potential Department of Defense funding could help further reduce their timelines. As a reminder, HALEU represents an incremental growth opportunity for Centrus and is a source of potential near-term capital from prepayments.

Because the centrifuge is multifunctional, any funding, whether related to LEU, national security, or HALEU, advances Centrus through first-of-a-kind cost. Now let's shift to our financial results for the quarter. As many of you know, there can be a significant amount of variability quarter to quarter due to the nature of our business, and as such, we believe our annual results are more indicative of progress made in our LEU and Technical Solutions businesses. 77.

77 per share, respectively. Turning to our commercial backlog, we are starting to see strong order momentum from the demand signals I referenced earlier. 5 billion that extends through 2040. 8 billion in our Technical Solutions segment.

7 billion of broker backlog and $3 billion in contingent LEU and HALEU enrichment sales. Todd will discuss our results in more detail. S. Department of Energy $900 million task order that we received earlier this year.

The award will support deployment of large-scale production capacity and is part of our multi-billion-dollar LEU and HALEU capacity expansion. This marks another significant milestone in our expansion as we pivot from a technology demonstration contract to a new, larger contract that supports commercial-scale production. We're proud to have completed all HALEU production requirements under our existing demonstration contract with the DOE two weeks ahead of schedule. Since we've begun our HALEU operations contract, we have contractually produced nearly 2 metric tons of HALEU UF6 for the government.

While the first new capacity from this transition is expected to come online by 2029, in the interim we're working with the DOE on agreements to enable the company to privately operate the existing 16-centrifuge HALEU cascade on a commercial basis. With the task order funds, as well as cash generated from our existing broker business and strong cash balance, we have now met the financing contingency for our more than $3 billion of customer contracts for the purchase of LEU and HALEU—another key milestone in de-risking and advancing our ongoing multi-billion-dollar expansion.

Another meaningful achievement for Centrus this quarter was the signing of a letter of intent with Oklo for Centrus to supply HALEU to power up to five Aurora powerhouses for multiple years starting in 2029. We are now signing and locking in HALEU fuel commitments from offtakers, and more recently we announced an offtake contract for HALEU with X-energy. This marks an important step towards ensuring reliable HALEU supply for next-generation reactors and validates our first-mover advantage in the HALEU market. Our HALEU offtake commitments generally include prepayment to Centrus, which will be further negotiated in a future definitive agreement.

These prepayments are another source of non-dilutive, non-debt funding for our expansion and are a structure we intend to utilize in future HALEU offtake contracts. We also continue to make progress with our supply chain partners, including locking in large commitments to help insulate us from price fluctuations and stabilize costs. We have finalized contracts with approximately 75% of the suppliers we have identified as critical. We also continue to evaluate M&A opportunities in our supply chain that align with our long-term growth strategy and create value for our shareholders.

In the second quarter, we made meaningful progress in our workforce additions in both Piketon and Oak Ridge. S. energy security and strengthening America's nuclear fuel supply chain. Now moving on to guidance, we are reaffirming our 2026 annual guidance for total company revenue of $450 to $500 million, total capital spend in the range of $350 to $500 million, finalizing contracts with 100% of the partners we deem critical, a release of a certified-for-construction package, and at least 100 net new employees hired at our Oak Ridge facility.

Simultaneously, given the quarter's progress, we are raising our 2026 annual guidance for Piketon workforce additions from over 100 net new employees to over 175 net new employees. And finally, we are excited to announce that we plan to have our first centrifuge completed at our Oak Ridge facility sometime in 2026—an important accomplishment and milestone that demonstrates that our supply chain has come together. I will now turn the call over to Todd and return with some final thoughts and comments. Todd Tonelli, Chief Financial Officer Thank you, Amir, and good morning to everyone on today's call.

Let me walk you through our results. Our results were in line with our internal projections and reflected not only the typical quarter-over-quarter shift in contractual mix, but also the beginning of the spend for our manufacturing program. As noted, I will be presenting financials on a quarterly and trailing twelve-month basis. 6 million, or 14%, versus the same period last year.

9 million. 4 million in the second quarter, a 22% increase versus the previous period. 7 million due to a 23% decrease in volume of SWU sold, partially offset by a 3% increase in the average price of SWU sold. 4 million of uranium sales in Q2.

9 million decrease in revenue from the HALEU operations contract. 9 million in Q2 2025. 8 million, driven by an increase in uranium sales in Q2 2026. Uranium costs increased as a result of an increase in the volume of uranium sales.

SWU costs decreased 23% as a result of lower SWU volumes, partially offset by a 13% increase in the average cost of SWU sold versus Q2 2025. 2 million, or 5%, from Q2 2025, primarily attributed to the HALEU operations contract. 5 million, respectively, in Q2 2025. 90, respectively, for Q2 2025.

5 million and adjusted net income of 92 million, respectively. 5 million increase in advanced technology costs in Q2 2026. 3 million increase in investment net income for Q2 2026. 9 million.

The advanced technology costs include short-term non-capitalized costs related to the expansion of our operations in Piketon and Oak Ridge that cannot be capitalized as they are associated with manufacturing readiness and security training ahead of the buildout. Please refer to the financial results section of our earnings release issued yesterday for a reconciliation of net income and adjusted net income. Going forward, we continue to expect to have a certain level of these types of expenses flow through our income statement as we continue our pre-preparations. 5 billion at the end of the second quarter and extends out to 2040.

The growth was driven by an approximate 600 million increase in LEU and HALEU enrichment sales in the LEU segment. 4 billion are under definitive agreements. Turning to our capitalization and capital spend, as a reminder, non-CAPEX is attributable to costs and investments such as prepayments to suppliers or our growth costs associated with our manufacturing pre-permit areas. 6 million classified as non-CAPEX and comprised of the aforementioned advanced technology cost.

Going forward, we continue to expect the pace of our CAPEX and non-CAPEX spend to accelerate throughout the year. 9 million. Importantly, all financial contingencies in our contingent LEU enrichment backlog have now been removed. We continue to feel confident in our existing cash balance, and we believe we are sufficiently funded to meet our near-term capital requirements.

As Amir noted, our progress to date has allowed us to raise our 2026 annual guidance for workforce additions in Piketon, Ohio, to 175, up from 100+. We are simultaneously reaffirming the rest of our financial and operational guidance for fiscal year 2026. And finally, we are excited to share that we expect our first centrifuge to be completed in Oak Ridge in 2026, an important milestone in our buildout. With that, I will turn the call back to Amir.

Amir Vexler, President and Chief Executive Officer Thank you, Todd. I am proud of the great progress we made during the second quarter across our operations and strategic partners. So in summary, we are seeing strong demand signals across all three of our addressable markets: commercial LEU, national security, and HALEU. This increased demand, coupled with the progress we have made in our centrifuge manufacturing program, has led to increased momentum in our order book backlog.

Importantly, the strong demand signals in commercial LEU have led to a very constructive pricing environment.