Centrus Energy Corp Q1 FY2026 Earnings Call

Good morning, ladies and gentlemen, and welcome to the Centrus Energy Q1 2026 Earnings Call Conference Call. This call is being recorded on Wednesday, May 6, 2026. I would now like to turn the call over to Mr. Neal Nagarajan. Please go ahead.

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 first quarter 2026 ended March 31. Today, we have Amir Vexler, President and Chief Executive Officer; and Todd Tinelli, Senior Vice President, Chief Financial Officer and Treasurer. This conference call follows our earnings news release issued yesterday. We have filed our report for the first quarter on Form 10-Q earlier today. All of our news releases and SEC filings, including our 10-K, 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, May 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?

Thank you, Neal, and thank you to everyone on the call today. The first quarter of 2026 began our historic undertaking to return the United States to domestic commercial uranium enrichment and was marked by numerous wins and great operational progress. Centrus remains the only company with a proven American technology that can meet the growing demand from the commercial LEU and HALEU markets as well as the national security market. Our centrifuge manufacturing program and expansion efforts are enormously significant for the company and the country, a once-in-a-generation opportunity to reclaim American leadership in uranium enrichment with American technology built by American workers. As a reminder, our initial build-out will address our substantial commercial LEU enrichment backlog of more than $2.4 billion and 12 metric tons of HALEU. Furthermore, our base case build-out is expected to be sufficient to reach our nth-of-a-kind cost. Further additions to our build-out will be progressive, tied to securing additional firm customer orders and capital resources. This quarter's highlights include progress across the milestones set forth in our 2026 guidance, new external partnerships that bring best-in-class expertise and allow us to maintain our hyper focus on reducing costs as well as bringing in lead times and progress with the U.S. government, including winning a $900 million HALEU enrichment award from the U.S. Department of Energy. But first, let me turn to the quarter's results. 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 our LEU and CTS business' progress. In the first quarter, we achieved $76.7 million in revenue, a gross profit of $31.5 million, and operating income of $0.8 million. Net income of $10 million, and diluted earnings per share of $0.45, and adjusted net income and adjusted diluted earnings per share were $23.5 million and $1.05 per share, respectively. Since we've begun our HALEU operations contract, we have contractually produced over 1.6 metric tons of HALEU UF6 for the government. Todd will discuss the results and their respective drivers in more depth shortly. Turning to our commercial backlog. We finished the first quarter with $3.9 billion of backlog that extends through 2040. This is comprised of $3.1 billion in our LEU segment and $0.8 billion in our Technical Solutions segment. The LEU segment's backlog is broken down between $700 million of broker-dealer backlog and $2.4 billion in contingent LEU enrichment sales that are all under definitive agreement. As for our U.S. government opportunities, we are limited in what we can say as we are in a procurement cycle. However, as previously noted, in January, we won a $900 million HALEU enrichment award that has the potential to exceed $1 billion and still needs to be finalized through negotiations. The award provides another pool of low-cost capital and helps support the 12 metric tons of HALEU capacity we are building. Regarding national security, recall that we were notified by the National Nuclear Security Administration of its intent to sole source certain enrichment activities from Centrus. While we are in procurement, we can confirm that we have submitted a response to their request, and we stand ready to support our national security mission. In late January, we launched a $560 million investment in our Oak Ridge centrifuge manufacturing plant, an investment aimed at expanding and accelerating our historic centrifuge manufacturing program. And we have thus far signed three important partners to support our build-out. We have repeatedly said that our day one focus is to reduce costs and bring in lead times. Centrus Energy will maintain control over design, engineering and manufacturing know-how of our centrifuges, while partners bring operational excellence and best-in-class capabilities. First, we signed Fluor, a best-in-class EPC with extensive experience in launching and supporting large-scale complex industrial build-outs. Fluor will perform design, engineering, procurement, construction and commissioning for the expansion. We also signed Palantir as a strategic partner. Here, Centrus intends to leverage Palantir's Foundry and artificial intelligence platform to integrate distinct systems across classified and unclassified environments and utilize AI to optimize our build-out. Since late January, we have identified approximately $300 million in potential cost savings and additional improvements expected to reduce manufacturing lead times and accelerate our timetable. This is just the beginning of our continuous improvement efforts. And most recently, we added Geiger Brothers to lead the on-the-ground construction work in Ohio. Geiger Brothers previously served as a key construction partner in the deployment of our existing HALEU cascade as well as our 2013 LEU demonstration cascade. We believe this structure generates efficiencies and may mitigate some project costs. These partnerships underscore our vigilance and commitment to decreasing costs and bringing in lead times while maintaining operational excellence. We also announced that we are exploring a joint venture with Oklo, focused on deconversion services for HALEU, which currently does not exist commercially and will strengthen our position in the HALEU market. This demonstrates our commitment to leading the domestic fuel cycle, and we look forward to updating the market when we have more to share. Operationally, we made strong progress in our workforce additions in both Piketon and Oak Ridge. These jobs span engineers, assembly technicians, maintenance technicians, enrichment operators, lab technicians, project management and project controls. Our Senior Vice President of Field Operations, Patrick Brown and team have also made great progress on our other operational targets. In the first quarter, we finalized contracts with approximately one-third of the partners we deemed critical, while the team entered into the conceptual engineering design phase of the first certified-for-construction package. Therefore, we are reaffirming our 2026 annual guidance for finalizing contracts with 100% of the partners we deem critical; total capital spend in the range of $350 million to $500 million; release of a certified-for-construction package; and at least 100 net new employee hires at our Oak Ridge facility. Simultaneously, given the strength of our first quarter and commercial progress, including conversations around potential new enrichment offtake contracts, we are raising our 2026 annual guidance for revenue to a range of $450 million to $500 million from $425 million to $475 million. And our Piketon workforce additions from over 50 net new employees to over 100 net new employees. This was a very successful quarter for the company across all fronts. I will now turn the call over to Todd and return with some final thoughts and comments. Todd?

Thank you, Amir, and good morning to everyone on today's call. Let me first walk you through our results before providing more details on some of what Amir discussed. 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 spend for our manufacturing program. As noted on last quarter's call, I will be presenting financials on a quarterly and trailing 12-month basis. Furthermore, we are introducing adjusted net income and adjusted earnings per share to our reported financials to better reflect and differentiate the ongoing business results from our cost of expansion. Total revenue for the first quarter was $76.7 million, an increase of $3.6 million or 5% versus the same period last year. TTM revenue was $452.3 million. The LEU segment generated $44.6 million in the first quarter, a 13% decrease versus the previous period last year. SWU revenue in the quarter decreased by $9.7 million due to a 47% decrease in volume of SWU sold, partially offset by a 52% increase in the average price of SWU sold. Centrus also had $3 million of uranium sales in Q1. The Technical Solutions segment delivered revenue of $32.1 million in the first quarter, a $10.3 million or 47% increase over the previous period due primarily to a $9.8 million increase in revenue from the HALEU operations contract. Centrus generated gross profit of $31.5 million and $116.1 million for the first quarter and TTM, respectively, compared to a gross profit of $32.9 million in Q1 2025. The LEU segment's first quarter cost of sales decreased by 17% or $3.4 million due to the 47% decrease in SWU volume, partially offset by a 45% increase in the average cost of SWU sold versus Q1 2025. Technical Solutions cost of sales increased $8.4 million or 42% from Q1 2025, primarily attributable to the HALEU operations contract. The company generated net income of $10 million and $23.5 million of adjusted net income in the first quarter, compared to net income of $27.2 million and adjusted net income of $28.6 million, respectively, in Q1 2025. On a fully diluted basis, this equates to first quarter 2026 earnings per share of $0.45 per unit and an adjusted earnings per share of $1.05, respectively, compared to $1.60 and $1.68, respectively, for Q1 2025. On a TTM basis, Centrus generated net income of $60.6 million and adjusted net income of $87.8 million, respectively. The first quarter net income decrease was primarily attributed to a $15.9 million increase in advanced technology costs in Q1 2026 and a gain from an $11.8 million nonrecurring extinguishment of long-term debt in Q1 2025. This was partially offset by a $9.7 million increase in investment income and $5.5 million decrease in income tax expense for Q1 2026. First quarter adjusted net income excludes $17 million of growth expenses in our advanced technology costs and $400,000 in stock-based compensation costs, which, combined and tax adjusted, equates to $13.5 million. The advanced technology costs are short-term noncapitalizable costs related to the expansion of our operations in Piketon and Oak Ridge that cannot be capitalized as they are associated with manufacturer readiness and security training ahead of the build-out. 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 can expect to have a certain level of these types of expenses flow through our income statement as we prepare for our build-out. Turning to our capitalization and capital spend. Recall, we previously noted that capital spend for this project will include CapEx and non-CapEx spending. The latter is attributable to costs and investments such as prepayments to suppliers or growth costs associated with our manufacturing pre-preparedness. In the first quarter, we had a total of capital spend of $45.2 million with $23.2 million coming from CapEx and $22 million classified as non-CapEx. That $22 million is comprised of the aforementioned $17 million of growth costs and $5 million related to prepayments for the Palantir agreement. Going forward, we can expect the pace of our CapEx and non-CapEx spend to accelerate throughout the year. We finished the first quarter with $1.9 billion in unrestricted cash and did not access our ATM program. 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 commercial and operational progress to date have allowed us to raise our 2026 annual guidance for revenue to $450 million to $500 million from $425 million to $475 million; workforce additions in Piketon, Ohio to 100 plus, up from 50 plus. We are simultaneously reaffirming the rest of our financial and operational guidance for fiscal year 2026. With that, I will turn the call back to Amir. Amir?

Thank you, Todd. We made great progress across our operations and continue to have meaningful conversations with future commercial and government partners for LEU and HALEU offtake. This includes our conversations with the advanced reactor and hyperscaler communities, conversations that have continued to pick up in pace since we announced our build-out that includes 12 metric tons of HALEU. While these first-of-a-kind conversations take time, we are excited by their increased tenor. And we continue to explore other adjacent areas in the nuclear fuel cycle where we can further strengthen our offerings to the market, including our announcement this quarter with Oklo to explore HALEU deconversion. On a macro level, we continue to see strong progress from the United States and the rest of the world, doubling down on nuclear power. Reactor developers and their customers from big tech to the U.S. military are rolling out ambitious plans to deploy reactors on a large scale and at potentially faster rates. Moreover, the U.S. government is reducing regulatory hurdles for new reactor designs. We are also seeing new use cases, including space propulsion. Furthermore, global conflicts and rising tensions continue to highlight the need for governments to diversify away from fossil fuels and strengthen their domestic power sources to drive future sustainable economic growth. Nuclear stands to be a key player in this drive to energy independence. We look forward to sharing more with you on our upcoming calls. With that, I will turn the call over to the operator for questions. Operator?

And your first question comes from Ryan Pfingst from B. Riley. We are also seeing new use cases, including space propulsion. Furthermore, global conflicts and rising tensions continue to highlight the need for governments to diversify away from fossil fuels and strengthen their domestic power sources to drive future sustainable economic growth. Nuclear stands to be a key player in this drive to energy independence. We look forward to sharing more with you on our upcoming calls. With that, I will turn the call over to the operator for questions. Operator?

On guidance, you touched on it a bit in the prepared remarks, but could you give more detail on what's driving the increase in expected revenue for this year?

Thank you, Ryan, for the question. On this quarter, we continue to be active in the market, and we've seen both near-term opportunities and line of sight to long-term offtake. That has allowed us to increase our guidance marginally to what we believe will potentially be the outcome for the year and move us up about $25 million within the range.

And your next question comes from Rob Brown from Lake Street Capital Markets.

Congratulations on all the progress. Could you give us a sense of the pricing and margin trends in the backlog? It seems like things on the SWU side are moving up. What's the sort of average pricing trend in the backlog?

Rob, thank you for the question. Although I can't specifically address contractual pricing, as we stated in the past, the trend is continuing to look like it has in the last few years: constrained supply and increasing demand, both from the existing fleet and from new reactors that are either in demonstration stages or planning to start up soon. Customers are beginning to place their fuel orders, and that puts pressure on the market. So from a macro level, you are seeing demand-side pressure on price. We are seeing favorability in the short, mid and long term in terms of contractual activity, but I cannot comment specifically about prices.

And your next question comes from Joseph Reagor from ROTH Capital Partners.

I guess a follow-on to one of the previous questions. The additional $25 million that you guys have added, was any of that in Q1? Or is it all future-looking? Just so we can understand the cadence of how things come to be.

Joseph, thanks for the question. We would look at it more as, obviously, our business is best viewed on a trailing 12-month basis as shipments and deliveries can move from quarter-to-quarter. It's difficult to comment to say exactly which quarter it took place. We do have comments within our MD&A section. What I would say is we're in line with our expectations for the first quarter. The future quarters, I would say, would be ratable to comparable periods in the past and should be viewed on a TTM basis, which gives us the best 12-month period to look at total revenue, net income and the performance of the company.

And our next question comes from Nick Amicucci from Evercore ISI.

A couple of quick ones for me. I wanted to dig into the Palantir partnership a little bit. You outlined that you identified opportunities to reduce manufacturing lead times. Should we be thinking about that in the realm of the first cascade on the 42-month timeframe or kind of across the board? And then as we think about the cost for the full build-out, you have $1.9 billion of cash on the balance sheet. Could you provide some color on the initial build and at what point you get to proof of concept where you can entertain other financing options like project financing, the cascade, or something of that nature?

Nick, thank you for the question. Let me address the first part, then Todd will weigh in on capital. The partnership with Palantir is transformative for us. The value we're seeing lasts much longer than the first cascade; we view this as business-altering in terms of unit cost and our ability to meet lead times to market and beyond. Layering Palantir's AI platform provides us with real-time data and empowers our team to take a more meaningful role in project management. It allows us to add efficiencies across our work streams, which can lead to additional cost mitigations and will allow us to bring in lead times. For example, these efficiencies can help reduce fuel supply chain risk and could reduce execution time and costs. I'll turn it over to Todd to weigh in on the capital question.

Thanks, Nick. As a reminder, we have $1.9 billion on the balance sheet available to deploy, and we also have the $900 million HALEU award that will come to us ratably based on milestone payments. Essentially, we have about $2.8 billion currently. Our focus is to look at many pools of low-cost capital. This may involve the NNSA, third-party investment, foreign direct investment and we will continue to be opportunistic in the market when we see fit. We don't feel pressured to be actively raising capital in a down market. We did not participate in the ATM program in the first quarter, as we did not feel it provided the right shareholder value, and we believe there are better low-cost capital options available, which we're continuing to explore to fund the full build-out.

And your next question comes from Mark Shooter from William Blair.

Congrats on the progress this quarter. Advanced reactor companies are pushing through the market with DOE and NRC licensing and many are using HALEU and TRISO. Where do you see the most SWU value in LEU or HALEU? Has anything changed how you're looking at that strategically? Also, regarding ongoing conversations with SWU offtakes, can you update us on engagement with hyperscalers or traditional utilities and IPPs? Has one been more aggressive recently than the other? And how has the war in Iran and constrained oil markets factored in? Has that put more urgency into conversations?

Mark, thanks for the great strategic question. We spend a great deal of time on this topic. We are preparing expansion of both LEU and HALEU and are dealing with customers on both sides in addition to national security. The market for advanced reactors is starting to mature. A couple of years ago many advanced reactor developers were focused on licensing, but through executive orders and DOE activities, reactors are now seriously procuring and committing to fuel, which is a significant purchase. We're participating with the vast majority of them. The Department of Energy selecting Centrus for the HALEU award puts us in a credible position, and the fact that we have an operating cascade further cements that position. Regarding where the majority of value is derived, from a physics perspective, when a reactor plants its initial core they think about feed and HALEU. Feed often comes in LEU form, and there is a significant amount of LEU feed required to create HALEU. From a volume perspective, much of the value comes from LEU because LEU drives volume. From a margin and market-advantage perspective, HALEU offers advantages for us. So we're deriving value from both in different ways. The good news is almost all reactors that were in different development stages are moving toward significant committed fuel procurements. On your question about who is more aggressive, operating reactors have seasoned fuel buyers and act strategically; we see a steady flow of pricing requests. Hyperscalers are getting into the market, hiring expertise, and they tend to move faster because fuel represents a significant risk to their projects that they want to de-risk early in funding and capital raising. Regarding global conflict, it highlights the need for governments to diversify away from fossil fuels. Nuclear gives a significant lever in such situations and is a helpful parameter for decisions on new nuclear builds.

And your next question comes from Eric Stine from Craig-Hallum.

You mentioned that the NNSA had notified you of intent to award and you responded. What would the next steps be? How do you expect that to play out? And can you remind us what the potential amount of that funding would be?

Eric, thank you. We are in a procurement cycle and are limited in what we can say. We can confirm that we have submitted our response to the NNSA's request and that we stand ready to support our national security mission in any way required. The requirement and demand are real. We will let the NNSA and the government drive announcements and information released to the public. We have not disclosed specific quantities or funding amounts and will defer to the NNSA and the government to release that information.

And your next question comes from Bill Peterson from JPMorgan.

You mentioned a potential JV with Oklo for deconversion in the prepared remarks and a press release in March. Can you discuss your strategy around deconversion more broadly? Are you looking for additional commercial partnerships or arrangements? What does the market look like for that today for you? And what would give you confidence in Centrus taking a role in deconversion in the coming years?

Bill, thank you. From a market perspective, there is a current hole in the fuel cycle for advanced reactors, particularly HALEU. Deconversion of UF6 to oxide or metal form does not exist commercially today. The Department of Energy is preparing to make an award to help industry stand up that part of the fuel cycle, which is critical to the overall supply chain for advanced reactors. We see a commercial opportunity highlighted by our partnership with Oklo; they are a potential participant and an important offtaker and customer for this fuel form. If you start from a blank sheet and consider where to place a deconversion facility, many factors point to colocating deconversion with enrichment. Efficiency and security are key drivers. We believe this approach can provide great efficiencies to the market, potential vertical integration and further differentiation of our HALEU enrichment offering.

And your next question comes from Lawson Winder from Bank of America Securities.

I would take it positively that you see the ability to hire in 2026 at a higher rate than previously expected. Would you describe the additional hiring more as a need for greater resources than previously anticipated to do the same work? Or is this a need stemming from the required work going faster than expected? And then as a follow-up, looking at 2027, do you foresee hiring needs being similar, lesser or greater than 2026?

Thank you for the question. Hiring in today's world involves several components: can we source employees from the local community or do we need to recruit nationwide; how quickly can we bring them on board; and the security clearance process. At our facilities, individuals must be cleared, which is part of our uncapitalized cost, and because we do one-of-a-kind work, we must train these individuals. The rate at which we could source employees in both Oak Ridge and Piketon in local communities was stronger than we anticipated, which allowed us to accelerate our hiring curve and move quicker than expected. If we have a strong workforce, we avoid delays. Human capital is critical to our build-out, and the sooner we get people cleared, trained and working on our projects, the faster we can move. Going forward, we are sourcing people from unions, local shops and universities to build our workforce, and the rate at which we hire will dictate how quickly we can get those people on board. For 2027, growth will be tied to our base case but could accelerate with additional offtake or customer demand requiring more human capital.

Lawson, I'd like to add that we are doing something historic: building the first American-owned centrifuge manufacturing facility based on American technology. Much of what's driving this project is the demand curve that has been increasing. As we evaluate project spend and pace, it is always driven by the need to meet real demand—some of which is already under contract and some in discussion. This is a developing and fast-moving situation that informs how we proceed.

And your next question comes from Jeff Grampp from Northland Capital Markets.

Circling back on the Palantir partnership, Amir, the $300 million in savings you identified thus far — can you give us a sense for what are the main factors driving those cost savings? Is it particular components or any other commentary to give us a sense for where those are coming from specifically?

Thanks for the question. When you stand up a manufacturing facility like we're doing, there are many challenges: technological aspects, supplier alignment and supply chain complexity. What holds everything together and creates efficiencies is the information system and our ability to make decisions quickly and with high fidelity. Palantir's AI platform provides real-time data, which is critically important for managing hundreds of suppliers and complex workflows. That capability has driven meaningful cost reductions in project management, shortened lead times and reduced cycle times. So far we've identified approximately $300 million in potential cost savings from these improvements, and we expect to continue identifying additional savings as we push our continuous improvement efforts.

And your last question comes from Sameer Joshi from H.C. Wainwright.

Congrats on the progress. In the prepared remarks, I think I heard that the SWU prices were up around 52% and SWU costs up around 45%, which gives you a gross margin boost year-over-year. Should we expect gross margins from SWU increasingly positive going forward? Also, Todd, on the trailing 12-month metrics — should we expect uranium sales in the second quarter? Historically those have tended to concentrate in the second and fourth quarters.

Sameer, the rate at which SWU prices move depends on our contractual mix. We can't comment on actual contracts or specific margin associated with them. Depending on when shipments take place, revenue and cost recognition can vary by quarter. We emphasize viewing performance on a trailing 12-month basis to smooth these quarter-to-quarter variances. We have seen positive movement in SWU prices, which provides additional market options. Our contractual mix allows us some flexibility on supply sourcing, which ties to our increased revenue guidance for 2026 and better line of sight for additional offtake with SWU pricing in the outer years. Regarding uranium sales timing, uranium sales are opportunistic and can occur throughout the year. We cannot provide guidance on when specific sales will take place.

And there are no further questions at this time. I will now turn the call over to Mr. Neal Nagarajan. Please continue.

Thank you, Kelsey. This concludes our investor call for the first quarter of 2026. As an aside, please note that we are introducing a summary slide deck to our earnings materials, which can be found on our Investor Relations website under the Presentations tab. As always, I want to thank you and our listeners and our analysts who called in. We look forward to speaking with you again next quarter.

Ladies and gentlemen, this concludes your conference call for today. We thank you very much for your participation. You may now disconnect your lines. Have a great day.