Centrus Energy Corp. 2026 Q2 Earnings Call

Welcome. 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 Tinelli, 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-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, August 6th, 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.

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. 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 to first-of-a-kind costs 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 II and Gen III reactor designs. In the U.S., 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 Loans program seeks to help finance and accelerate the deployment of new large-scale nuclear reactors across the United States. Meanwhile, power operates 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.

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. 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 reach criticality ahead of DOE's 4th of July deadline are fueled by HALEU.

We also believe that potential Department of War 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 a centrifuge is multifunctional, any funding, whether related to LEU, national security, or HALEU, advances Centrus through first-of-a-kind costs. 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 CTS businesses. In the second quarter, we achieved $176.1 million in revenue, a gross profit of $49.9 million, operating income of $10.4 million, net income of $16.8 million, and diluted earnings per share of $0.77.

Adjusted net income and adjusted diluted earnings per share were $38.7 million and $1.77 per share, respectively. Turning to our commercial backlog, we are starting to see strong order momentum from the demand signals I referenced earlier, coupled with our build-out progress. We grew our backlog to $4.5 billion that extends through 2040. This is comprised of $3.7 billion in our LEU segment and $0.8 billion in our Technical Solutions segment. The LEU segment backlog is broken down between $0.7 billion of broker-dealer backlog and $3 billion in contingent LEU and HALEU enrichment sales. Todd will discuss our results in more detail. Operationally, we have made meaningful progress throughout the quarter as we remain focused on restoring America's ability to enrich uranium at scale, including the signing of our U.S. Department of Energy $900 million task order that we received earlier this year.

The award will support deployment of large-scale production capacity as 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 are proud to have completed all HALEU production requirements under our existing demonstration contract with the DOE two weeks ahead of schedule. Since we have begun our HALEU Operations contract, we have contractually produced nearly two 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 are 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 off-takers, and more recently, we announced an off-take 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 off-take 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 is a structure we intend to utilize in future HALEU off-take 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.

Finally, I'm also proud that in July, Centrus was invited to join the S&P SmallCap 600 Index, reflecting our role in advancing U.S. energy security and strengthening America's nuclear fuel supply chain. Moving on to guidance. We are reaffirming our 2026 annual guidance for total company revenue of $450 million-$500 million. Total capital spend in the range of $350 million-$500 million. Finalizing contracts with 100% of the partners we deem critical. A release of a certified for construction package. 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.