Good afternoon, and welcome to NuScale's First Quarter 2025 Earnings Results Conference Call. Today's call is being recorded. A replay of today's conference call will be available and accessible on NuScale's Investor Relations website. The web replay will be available for 30 days following the earnings call. At this time, for opening remarks, I would like to turn the call over to Rodney McMahan, Senior Director of Investor Relations. Please go ahead.

Thank you, operator. Welcome to NuScale's First Quarter 2025 Earnings Results Conference Call. With us today are John Hopkins, President and Chief Executive Officer; and Ramsey Hamady, Chief Financial Officer. On today's call, we will provide an update on our business and discuss our quarterly financial results. We will then open the phone line for questions. This afternoon, we posted a set of supplemental slides on our Investor Relations website. As reflected in the safe harbor statement on Slide 2, the information set forth in the presentation and discussed during the course of our remarks and the subsequent Q&A session includes forward-looking statements, which reflect our current views of existing trends and are subject to a variety of risks and uncertainties. You can find a discussion of our risk factors, which could potentially contribute to such differences, in our 2024 annual report on Form 10-K and subsequent SEC filings. I'll now turn the call over to John Hopkins, NuScale's President and Chief Executive Officer.

Thank you, Rodney, and welcome to NuScale. Good afternoon, everyone. As 2025 progresses, I'm excited to share that NuScale continues to build momentum and strengthen its leadership position in the SMR space. We remain the only SMR company with U.S. Nuclear Regulatory Commission design approval, and we continue to advance our commercialization efforts. During the first quarter of 2025, we focused on deepening customer engagement and further enhancing our manufacturing and supply chain readiness, ensuring we remain on track to meet our 2030 delivery target. Today, I'll provide further insights into these initiatives and share updates on our business commercialization progress and market opportunities. Ramsey will follow with a financial update. Starting with a business update. RoPower project in Romania, as discussed on Slide 3, continues to move forward with a Fluor-led Phase 2 Front-End Engineering and Design, delivering meaningful revenue and cash flow for NuScale. Notably, we are on schedule to deliver the Class 3 estimate by this fall. Furthermore, discussions are underway to extend the project into the detailed design phase, a critical step that would enable the submission of a final investment decision application to the Romanian government by late Q1 or early Q2 2026. Moving on to Slide 4. Let's shift to our commercialization progress. It's essential to reiterate that NuScale remains well ahead of its competition and continues to lead the market as the only near-term deployable SMR. As we have mentioned before, recently proposed non-light water SMR projects in the U.S. are still in what we call the demonstration phase, which means they still require a minimum of 4 years of operation before securing U.S. Nuclear Regulatory approval for commercial deployment, an important and rigorous regulatory requirement that NuScale has already achieved, which we believe sets us years ahead of the other players. To that end, we are pleased to report that our standard design approval application with the NRC, which aims to increase the power output per module from the previously approved 50-megawatt electric to 77-megawatt electric, continues to progress on schedule. We anticipate final approval by the NRC by July of this year. We are proud to be a first mover in the industry when it comes to manufacturing preparedness, a crucial step towards deployment, and we continue to gather early valuable knowledge about the process that will only make it more streamlined and efficient as well as enhance scalability going forward. Turning to Slide 5. This was a pivotal quarter for our supplier working group, another demonstration of our commitment to meeting our deployment plans. NuScale's team worked from on-site delivery days to identify key near-term supply chain actions that need to be completed to assure a 2030 delivery of our first NuScale power module. For example, during the first quarter, we conducted multiple pre-bid meetings with Doosan on an upper reactor pressure vessel fabrication proposal, continued progress on long-lead material orders, issued a preliminary scheduled delivery date notification to our fuel supplier Framatome for the initial core and initial order of control rod assemblies, and executed a neutron monitoring system supply agreement with Paragon. We also held a productive meeting with our supplier working group in April, where we continued to build and invest in strong relationships with our suppliers in anticipation of a near-term customer order. With more than 30 suppliers attending the meeting, we focused on critical path production items and identifying near-term supply chain investments. A strong supply chain is essential in successful deployment, and NuScale continues to be proud of our robust relationships with our valued suppliers. Now let's talk about market opportunity. Looking at Slide 6, we remain confident that the growing interest in our technology and its critical use cases as well as NuScale's distinct competitive edge in module manufacturing and field readiness will result in a firm customer order during 2025. In collaboration with our exclusive commercialization partner, ENTRA1 Energy, we are in various stages of discussions with potential customers both here in the U.S. and abroad. Domestically, this includes discussions with government officials and industries, including data centers, utilities, coal plant operators transitioning to nuclear, and petrochemical and energy companies; internationally, with stakeholders around the globe in Europe, the Middle East, Africa, and Asia. On the data center front, ENTRA1 continues to lead discussions with major U.S. hyperscalers with a strong focus on powering AI operations. Potential customers continue to be attracted to ENTRA1's commercial model, which is designed to provide financial flexibility while mitigating deployment risks. Of these customer discussions, I would classify upwards of 10 as advanced, many of which have progressed to the point of multiple iterations of term sheet exchanges between parties and customer site visits to Doosan's manufacturing facilities in South Korea, where NuScale power modules are being built. Across the board, we are continuously encouraged that both prospective customers and the broader market are better informed and more aware of the significance and advantages of NuScale's advanced SMR technology, in part due to our extensive outreach efforts. Now I'd like to briefly discuss other applications of NuScale's technology beyond generating electricity, as shown on Slide 7. One of these applications drawing a significant amount of attention is the production of carbon-free hydrogen, and we believe NuScale is uniquely positioned to lead in this space. We are proud to be the first SMR company to integrate hydrogen production systems and controls into a multi-module main control room simulator, enabling efficient carbon-free hydrogen production. Notably, our solution is designed to meet the needs of commercial-scale industrial applications requiring over 200 metric tons of hydrogen per day. Our presentation at the World Petrochemical Conference in March, where we were the only nuclear company to present, introduced an approach to produce a hydrogen carrier from the brine waste generated by desalination, consistent with our mission to provide both clean energy and clean water. We've attracted strong interest from major industrial players, and we look forward to future collaborations to cement our leadership in this space. As we look to the future of SMRs in the nuclear field, I want to take a moment to note the recent opening of three new NuScale energy exploration centers at leading universities. Soon, we'll be opening two additional centers, bringing the total to 11. These innovative learning environments that simulate a NuScale SMR control room as well as NuScale's licensed operator training program are helping to pair the next generation of nuclear talent, and we are proud to partner in this important effort. Lastly, I want to share that NuScale is actively assessing the potential impact of tariffs on our operations in the current market environment. At this time, we do not anticipate any material impact. However, we remain vigilant in monitoring the situation. We're also working closely with our suppliers to ensure operational continuity and are prepared to address any changes proactively to mitigate potential risk. This is an important year for NuScale, and we remain steadfast in our commitment to delivering sustainable carbon-free electricity to end users worldwide. I am proud of where we are today and look forward to updating you all on our progress over the course of 2025. The demand for clean, reliable energy has never been more pronounced, and we have an exciting future ahead. Now over to Ramsey for the financial update.

Thank you, John, and hello, everyone. Our financial results are available in our filings. So my focus will be on explaining major line items, which can be found on Slide 8. NuScale's overall liquidity improved during the period, ending the first quarter of 2025 with cash and cash equivalents of $491.4 million and short-term investments of $30 million. The primary driver of this increase was our successful sale of 4.5 million shares through our ATM program during the quarter, generating $102.4 million in gross proceeds. Our strong balance sheet positions us to continue bolstering our manufacturing and supply chain preparedness as we drive towards commercialization. For the quarter ended March 31, 2025, NuScale reported revenue of $13.4 million. During the same period in the prior year, the company reported revenue of $1.4 million. This increase was driven by fees received from the engineering and licensing work and other services we provide in support of the RoPower project. Operating expenses were $42.3 million for the quarter ended March 31, 2025, compared to $44.6 million during the same period in the prior year. More notably, operating expenses since the beginning of 2024 are well below the $69.9 million per quarter average in 2023. This material reduction underscores NuScale's commitment to streamline costs and improve operational efficiency. Looking ahead, we are excited about the next phase of growth. As John highlighted, this is a pivotal year for NuScale, and the solid start we had in the first quarter positions us well to maintain and build upon the momentum. I will conclude my remarks with a brief view of our capitalization summary on Slide 9. Additional information may be found in our 10-Q and earnings release, both filed with the SEC. With that, I'd like to thank you again for joining today and for your continued support of NuScale. We'll now take questions.

And our first question comes from Marc Bianchi with TD Cowen.

I was pleased to see the outlook for a firm customer order by the end of 2025. Can you discuss what that means in terms of how you define it? Does that refer to the customer reaching a final investment decision, or is there some other intermediate threshold that needs to be crossed to be included in that category? Also, what events need to happen to reach that point?

Marc, this is John Hopkins. I'll begin by mentioning that our current priority is to finalize near-term contracts. We are no longer pursuing or announcing memorandums of understanding. We’re focusing on our existing customers and those we are currently negotiating with. We are in the process of submitting proposals and negotiating term sheets. Some customers are looking to visit Doosan to see our modules in production. In fact, I will be in Korea this June with an executive team from a prospective customer. Interest in our offerings is growing. I spoke with the CEO of Nuclearelectrica today regarding Romania, and we are closely monitoring the situation there, especially with the upcoming presidential elections this Sunday. So far, they are fulfilling their financial obligations, and our team is collaborating effectively, with Fluor still leading the Front-End Engineering Design. I believe this year will be crucial for us. I appreciate the support from this administration, especially the remarks from Secretary Wright and Secretary Burgum regarding the urgent need for advanced new nuclear energy in the energy mix. We are beyond discussions about the levelized cost of electricity with these customers; now it's about establishing long-term power purchase agreements. We are actively working to finalize these agreements, and I am excited about our current position in the industry.

I understand you mentioned the administration's support for nuclear energy. Last week, there was news about draft executive orders from the White House aimed at streamlining the licensing process. Can you discuss what steps could be taken to simplify permitting? My understanding is that the NRC operates independently, so the White House may not be able to direct them. However, I'm curious about what straightforward changes could help expedite the process.

Yes. I'm currently at an SMR conference, meeting with customers and suppliers. This topic is top of mind for everyone, and while it's too early to draw any conclusions, I'm actively engaged in discussions. We've been in ongoing meetings with the Nuclear Regulatory Commission and ACRS, and I’m optimistic that we’re on track to secure approval for our 77-megawatt project this July. We’re adhering to the NRC schedule, and there's a chance we could even exceed it. In terms of reducing processes, I don't foresee compromising on safety standards, but there are definitely opportunities to streamline certain licensing aspects. I’m grateful for our current position as a company, especially after successfully completing the licensing process for 50 megawatts and getting our emergency planning zone and site boundary methodology approved, which took us seven years. For now, I want to keep a low profile and focus on getting the 77-megawatt approval in July so we can really move forward.

And our next question comes from Sherif Elmaghrabi with BTIG.

You have long lead items in progress for several unclaimed modules, depending on how you view it. How quickly can NuScale deliver modules after an order is booked, especially for a U.S. power plant?

I mentioned this before. If you haven't ordered long lead items, we started this process a few years back. Doosan was initially scheduled to handle six modules of the reactor vessel, and we recently placed an order for six more. We are working with our supply chain to ensure we can meet a 2030 commercial operation date. However, as timelines extend, can we still achieve 2030? Yes, if we finalize a deal soon. If not, it may be pushed to 2031. Our suppliers, particularly Doosan, have invested a significant amount of their own capital unrelated to NuScale. They are currently working on our helical coil steam generators and have acquired two bending machines. We're excited to show customers the Doosan manufacturing process, where they are significantly advanced.

Sherif, I can add to your comment. We refer to them as unclaimed modules, but I see them as long lead materials, which we're producing for our first contract. We expect that once we finalize a contract with our business model, we will see cash flow immediately related to the modules. We believe that after securing a deal with a major customer, we will receive payments for the modules. It's important to note that NuScale has various revenue sources, including pre-engineering services, the sale of the modules, and some post-delivery services. Regarding the sale of the modules, we anticipate that around 25% of their cost will be received in the first year, driving NuScale towards a cash flow positive status from that aspect. Therefore, this contract is crucial for us and will be essential in improving our balance sheet and cash flow. This is why we are producing today, as we expect this sale to occur in the near term.

Good point, Ramsey.

Got it. That’s really helpful information. You’ve answered a couple of my questions, but I have a simple one. On Slide 3, when we discuss the extension of Phase 2 for RoPower for the first quarter of next year, what does that involve?

Ramsey?

Sure. I think RoPower has taken a very sensible and measured approach to the development of the project, the SMR project in Doicesti. And currently, the scope of FEED Phase 2 envisages a 2-step FID. And I think what RoPower now is looking at is we went and they scoped the first step and they're pushing forward very deliberately and very steadily on that pathway. And I believe RoPower now is looking to fund the FEED Phase 2 for the second step of FID. So really, it's just greater assurance, I think, on our side and greater assurance to the market that ultimately at the end of FEED Phase 2, RoPower will have completed sufficient engineering studies to get to an FID, which is a final investment decision, and be able to take a view of moving forward with the project. So we see this as a very positive idea. We're thrilled that RoPower is doing that, and we're here to support them in every step of the way.

Yes. Ramsey and I actually met with the CEO of Nuclearelectrica last week in Washington, D.C. So their FID or final investment decision is still looking to be the latter part of '25 or early 2026 as a target.

And our next question comes from the line of George Gianarikas with Canaccord Genuity.

I'm curious in terms of this firm order you expect by the end of the year. You sort of articulated a series of customer conversations that you're having multiple shots on goal. How likely is it that one of these customers could be a large tech company versus some of the other descriptions that you made during the call?

I believe it's quite possible. We have confidentiality agreements with the major players in AI, and companies like Google and Amazon have announced some initiatives. I spoke with one of those major players today at the conference. They have a significant need for energy. It's important to remember that, as far as I know, no other technology has submitted a design certification application to the Nuclear Regulatory Commission yet. Once we receive that 77-megawatt power upgrade, we will be fully licensed under part 52 to both construct and operate. If they really need power immediately, we can be deployed in the near term.

George, I may add that when we look at projects, we talk about who the customer is and the possibility that one of our customers is a hyperscaler Tier 1 data center AI developer. And I think it's important to understand that our projects are complex. And really, the customer, in many cases, will be the developer who's developing the plant and purchasing the SMRs from NuScale. Supporting that idea will be a power purchase agreement and a buyer and a power user, which we anticipate would be a Tier 1 data center or AI developer. But there are many others within that ecosystem of us developing a first deal. And that includes having a site, including a site operator, most likely in the form of utility; our exclusive development partner, ENTRA1; and the capital to support the deal. So I hate to mince words for the sake of precision, but I think it's meaningful. There are a number of entities that will be involved in announcing the first project, and the Tier 1 AI data center, which we hope will be involved in the first project, will really be the power user versus the direct customer to NuScale, who's buying SMRs.

You did a great job this quarter with cash management, as evidenced by the sequential increase in cash. Can you clarify what we should expect for quarterly cash burn moving forward?

Sure. I think we've done a good job. NuScale has shown consistent operating expenses over the last several quarters, maintaining them between approximately $41 million and $44 million. Cash flow from operations does fluctuate a bit; for instance, in the fourth quarter, we received some one-time payments related to a technology license agreement with RoPower, which provided a boost. However, we continue to generate revenue from that project. Looking at our operational cash burn, it remains in the range of $40 million to $45 million per quarter. We may increase it slightly as we invest in our supply chain, which we are currently focused on due to an anticipated near-term project. We aim to manage manufacturing and delivery timelines effectively. Revenue should remain relatively stable throughout this year, more reflective of our first quarter 2025 revenue compared to our fourth quarter 2024 revenue, providing steady income to counterbalance some of the operating expenses. I expect this consistency to continue until we announce a project and anticipate a near-term cash inflow related to the modules. There are no unexpected changes; we are being very deliberate with our management approach while aiming to maintain our cash position. We believe we have a couple of years of operational capacity based on our current cash reserves and spending, which will only change positively once we secure a project.

And our next question comes from Craig Shere with Tuohy Brothers.

Let's discuss the possibility of achieving a trifecta. Do you have the capacity in your supply chain and with ENTRA1 to support a couple of initial projects that might be launched in the very early 2030s, potentially two 12 modules or one 12 and one 6? Could you manage to handle two projects back to back?

Yes, Doosan has the capability to produce approximately 20 modules annually. We are also in talks with several key suppliers, including IHI manufacturing in Japan. We hosted a supplier day in April, attracting 30 U.S. and international suppliers to Charlotte. We are closely monitoring our capacity to ensure we do not overextend ourselves. Our approach has always been to treat these as interchangeable assets that are constructed in a factory and distributed to various locations. We prefer multiple projects rather than a single one-off project. Currently, we are assessing whether we have the capacity to handle two projects simultaneously. Personally, I am eager to secure one solid contract at this moment to demonstrate our capabilities. We are being cautious not to expand too broadly without depth. We are maintaining our focus and making progress.

Got it. So, to the extent that you could manage two relatively concurrent projects, and considering your financial situation, if you are receiving upfront payments, that could be feasible from your viewpoint, possibly with some enhanced customer support for the equipment. Is it realistic to execute two 12 modules within kind of COD within a year?

My answer is yes. Again, Ramsey mentioned that this is a complicated process. What NuScale represents is similar to Intel in a Dell computer. We integrate modules, which are flexible assets, into an owner's power plant. A lot of the complexity depends on the owner and their ability to coordinate with the contractors. However, that is our model, and we aim to develop a robust supply chain. What do suppliers appreciate about NuScale? They recognize a sustainable opportunity. This isn't just about building individual plants one at a time. Our objective is to set up multiple plants simultaneously. I apologize, Ramsey, for interjecting.

No, I was going to mention that we usually take a cautious approach when it comes to scaling up. Currently, it’s expected that our supply chain could handle up to 20 modules a year. To be frank, my financial projections are more conservative. However, the supply chain is dynamic, and money leads to more investment. Our supply chain partners have been excellent collaborators, and we have strengthened our relationship by investing in them and in the final design phase. Once we secure our first contract, I believe we will see increased financial commitments to expand supply chain capacity. We recognize that landing the first contract is challenging, but we anticipate that subsequent contracts will come quickly. It would be great to face the issue of keeping up with demand. Our supply chain partners are likely to invest to meet this capacity, and we are already planning for that. I don't think it's realistic to fulfill multiple orders in the first year as the nuclear supply chain is quite limited and specific, with few suppliers. However, we are the first small modular reactor company to enter production. Over the last seven to eight years, we've been collaborating with our supply chain partners, which puts us in a good position to ramp up capacity and deliver at scale compared to our competitors.

Great. That's helpful. And my second, so I mean you only burned through less than $23 million of operating cash flow in the quarter. And you've got a fair amount of liquidity, and you seem to be indicating that you're anticipating at least one order that will turn you cash flow positive in whatever, the next 2, 3 quarters. So what's the rationale for continuing to hit the ATM? And could we assume that, that may slow or cease in the near future?

I want to clarify that on earnings calls, I don't make forward-looking statements regarding the ATM. However, I can say that we handle our cash in a conservative manner, as we have in the past, and we've successfully raised capital. As shown on Page 8 of our presentation, our cash reserves have increased from less than $200 million in the first three quarters of '24 to $526.5 million. This demonstrates that we've effectively strengthened our liquidity position, and I plan to maintain around two years' worth of cash flow, which I believe is a wise and conservative approach. I expect a project to materialize this year and another one soon, but my financial outlook is based on a conservative scenario rather than expected commercial activities. While I won't comment on our potential use of the ATM, our cash position and revenue in relation to our operating expenses indicate that our cash needs are minimal to maintain that two-year cash reserve. We will stay alert and take advantage of favorable market conditions if they arise, but our balance sheet does not suggest a significant need for a major follow-on event. We have already managed our R&D spending and are currently focused on investing in our supply chain and manufacturing readiness, which are somewhat distinct priorities.

And our next question comes from Ryan Pfingst with B. Riley Securities.

I appreciate all the details so far. Just a quick one. For the 10 customer discussions that you're considering advanced, are those all around U.S. data center-related projects? Or is there anything in there that's not data center related or not U.S.?

No, it's not all data centers. There are three components to what we see in the market right now. First, there's the replacement of coal plants; many of them will be going offline by the end of this decade, and that market is still active. We're in discussions with process companies interested in energy for process heat or ammonia production. Interestingly, these customers do not necessarily want to own a nuclear asset; they are more focused on obtaining clean, reliable energy that is available 24/7. This is where models like BOOT, BOO, and ENTRA1 come into play. The third component, which is the elephant in the room, involves AI and soon quantum computing, both of which require significant amounts of energy. Part of these sales involves collaborating with the state, the utility, an AI company, and our developer to bring everything together. This complexity is what Ramsey was alluding to; it's not solely about AI. Yes. As I mentioned, we are a subcontractor to Fluor, who is the prime on this project. The Class 3 estimate positions RoPower better to understand the completion costs and the steps needed moving forward. We are staying alert, particularly with the upcoming election. I spoke with the CEO of Nuclearelectrica today, and he reported no signs of a slowdown so far. However, we will know more after Sunday with the new President. What I find positive about Romania is their nuclear capabilities and the refurbishment of their candy reactors. They have a strong regulatory framework, and the regulator is actively engaging with the NRC. Romania aims to establish itself as a manufacturing hub for Central and Eastern Europe. From what I gather, momentum is building for that country. We hope that after the elections, we will have a clearer understanding in a couple of weeks about any potential changes. For now, it appears that things will continue moving forward as we've been informed.

And our next question comes from Eric Stine with Craig-Hallum.

Many of my questions have already been addressed in detail during the call. However, I keep wondering about the significance of light water technology in contrast to other advanced reactors that lack the operational history of your technology. How has this been reflected in discussions with customers? It seems that in the past couple of months, your tone has shifted, indicating that some opportunities have picked up pace. I recognize that part of this change is related to your efforts in the supply chain, which is crucial. I'm just interested in how the foundation of light water reactor technology influences everything.

When I think of advanced nuclear, NuScale immediately comes to mind. If you are looking for a truly advanced small modular reactor, it's NuScale. I often ask Dr. Jose Reyes if he has considered other fuel sources. We have the capability to utilize mixed oxide fuel and even burn thorium, having conducted numerous studies to validate this. However, the reality is that global regulators are familiar with light water technology. The NRC has over 70 years of experience in this area. It took us 42 months to navigate the NRC process, largely due to the need to scale up, which led to significant expenditures to demonstrate to the NRC that a gigawatt-sized reactor's components were not all necessary. Our fuel is conventional, with less than 5% enrichment, and we do not require the higher enrichment of high-assay low-enriched uranium, which is not currently available at scale in the U.S. These distinctions are important, and reaching the 77% completion mark is critical, as it will allow us to not only build a plant but also operate it. We are executing this under part 52, which covers both construction and operation through the NRC. While I don't wish to monopolize the market, I do want others to succeed, but I believe we are well-positioned to lead as the first mover.

And that concludes our question-answer session.

Well, thank you, operator. I'm sorry. I just wanted to end up by saying we truly believe NuScale is leading the way in the SMR industry. We believe we're uniquely positioned to commercialize and deliver clean energy at scale. With nuclear technology becoming increasingly vital to meeting global energy demands, we are both excited and proud to be at the forefront, delivering safe, reliable, and scalable carbon-free power. So I'd like to thank all of you. Thank you for your interest in NuScale and for joining our call today.

Thank you. And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.