Centrus Energy Stock

Good morning, ladies and gentlemen, and welcome to the Centrus Energy Q3 2026 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, November 5, 2026.

I would now like to turn the call over to Mr. Neal Nagarajan, Senior Vice President, Investor Relations. 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 third quarter 2026, ended September 30.

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 third 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, November 5, 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 expressed written consent of Centrus is strictly prohibited. Thank you for your participation.

I'll now turn the call over to Amir. Amir?

Thank you, Neal, and thank you all for joining us today. I am happy to report that Centrus is continuing to build its reputation on meeting its commitments, growing its credibility, which is leading us to capturing more market share. We made significant progress during the third quarter across our commercial, operational, and financial objectives, capped off by the recent completion of our first centrifuge in Oak Ridge, Tennessee, ahead of our year-end target.

We now proved that U.S. centrifuge manufacturing is a reality. It is a historic milestone for Centrus and the United States. This landmark occasion was the culmination of a number of other achievements by the team, including the strategic acquisition of one of our key suppliers, Westerman. This marks us officially locking in all of the suppliers we deem critical while also completing our first certified for construction packages to additional 2026 operational targets we have achieved ahead of our year-end target.

Furthermore, we grew our enrichment backlog from $3 billion to $5.4 billion, and successfully raised funds in a prudent manner that keeps us well capitalized. Finally, we are excited to announce that we are now using the existing 16 centrifuge cascade to enrich HALEU for the commercial market, making Centrus the first U.S.-owned commercial enricher for the market since our gases diffusion space.

And against this backdrop, we see continued and growing commercial validation across all three of our addressable markets: commercial LEU for the existing commercial nuclear reactor fleet for baseload electricity; a growing national security imperative that continues to increasingly diversify; and HALEU to support the next-generation reactors that will also require LEU feedstock. It is important to distinguish Centrus' unique opportunity set from those of the broader nuclear market. We are positioned to capitalize on all three of these markets.

First and most importantly, our primary focus is on baseload electricity from contracts with investment-grade utilities. There is a significant existing and growing gap in commercial LEU supply and demand. And remember, much of our long-dated enrichment backlog that runs through 2040 is for LEU to service these existing investment-grade utilities.

The second addressable market is for growing national security needs. A recent U.S. GAO report raised the alarm on the nation's entire domestic nuclear fuel supply chain, in particular, the domestic supply chain suitable to meet national security demand. Notably, the report highlighted the government's $37 billion plan to rebuild the unobligated supply chain by 2052.

As announced last week, we have confirmed that our supply chain is fully unobligated. Centrus' proven derisked technology is additionally the only production-ready option for the national security establishment. In this light, we continue to work with the NNSA on its intent to sole source certain uranium enrichment activities from Centrus and stand ready to support this important mission. And then there is the HALEU and advanced reactor market. This market's demand represents an incremental growth opportunity that continues to mature.

We have positioned ourselves to capitalize on this potential market if and when it matures to provide ourselves with further optionality. This optionality includes our flexibility to use planned HALEU capacity for various assays of LEU and LEU+, if needed. And importantly, we are securing prepayments to fund our expansion from the HALEU offtake agreements we are signing. And yet durable LEU demand for investment-grade reactor operators is what we're primarily focused on.

We continue to observe this gap between supply and demand widen, driven by updates, mothballed facilities coming back online and potential new builds, both in the U.S. and abroad. This widening disparity is demonstrated by the continually increasing spot and long-term contract LEU pricing curves that continue their upward trajectory.

Let me now dive into the progress we made against our three objectives. First, turning to our operations. We could not be more excited about last week's event in Oak Ridge, Tennessee, to celebrate our first centrifuge's completion, marking the beginning of our ramping of scaled centrifuge manufacturing. This important milestone achieved well ahead of our year-end target demonstrates that we have successfully stood up our core manufacturing operations in Oak Ridge, including having qualified our process that are tested and proven. The team is now focusing on decreasing the cycle times and increasing throughput rates, reducing inefficiencies and scaling up our infrastructure alongside our supply chain while hiring and training employees.

Furthermore, we are very excited about our recent acquisition of Westerman, which should drive growth for both organizations through commercial and operational synergies as well as cost savings while derisking our build-out. The acquisition represents a significant milestone for Centrus.

In one strategic move, we have simultaneously derisked our build-out by securing a key supplier and best-in-class manufacturer of centrifuge casing and other critical components; captured cost savings synergies related to Westerman's expansion and tied to our expansion; and derisked our entire business model in the near- and medium-term with an established, high-quality industrial fabricator manufacturer with revenues in nuclear and non-nuclear industries.

Second, turning to commercial backlog. We saw material growth in the third quarter, growing our enrichment backlog to $5.4 billion in contingent LEU and HALEU sales commitments. Our announced agreements with X-energy, Radiant and Antares all included prepayments to support our build-out. Furthermore, our agreement with X-energy includes production of LEU as a feedstock for HALEU, helping us push more volume through our facility. And finally, our offtake agreements with Radiant and Antares further validate and reinforce our first-mover advantage in the microreactor market. They also demonstrate our ability to produce unobligated enriched uranium that can also support U.S. national security applications, including defense and space missions.

And finally, on the third pillar, financial progress, Centrus secured an additional $500 million with the potential addition of $2 billion in the future. To this end, Centrus ended the quarter with roughly $2.2 billion of unrestricted cash on our balance sheet. Todd will discuss this in more detail shortly.

Now moving on to guidance. We are reaffirming our 2026 annual guidance for total company revenue of $450 million to $500 million as well as our annual capital spend of $350 million to $500 million. We are similarly reaffirming our 2026 annual guidance for Piketon workforce additions to over 175 new hires as well as our target of new employees at Oak Ridge to at least 100.

With us now having finalized contracts with 100% of the partners we deem critical, we were able to complete and begin shipping our first centrifuge. Our acquisition of Westerman represents another important step in further strengthening our supply chain. We have simultaneously completed our first certified for construction package for Piketon. We will discuss these in more depth at our upcoming Investor Day this coming December.

With that, I will 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. Ahead of walking through our results, I want to first quickly discuss the impact of our recent capital raise. In the third quarter, we recognized a $46.4 million book gain due to a decrease in the liability associated with the valuation of the warrants from our recent capital raise. This was a noncash impact on our books, but led to a $46.4 million positive impact to the quarter's operating income, net income, and earnings per share that is not part of our due course of business. As such, throughout my comments, the operating income, net income and earnings per share, excluding the $46.4 million gain, will be referred to as normalized as well as those same adjusted figures that account for growth costs.

Our normalized results were in line with our internal projections and reflected the typical quarter-over-quarter shift in contractual mix that can transpire based on customer orders and deliveries. Our strong financial execution continues to support the execution of our multibillion-dollar domestic enrichment expansion. As noted on previous calls, I will be presenting financials on a quarterly and trailing 12-month basis.

Total revenue for the third quarter was $55.5 million, a decrease of $19.4 million or 26% versus the same period last year. TTM revenue was $454.5 million, ahead of fiscal 2025 revenue. The LEU segment generated $31.8 million in revenue in the third quarter, a 29% decrease versus the same period last year. SWU revenue in the quarter increased by $3.4 million due to a 19% increase in volume of SWU sold and a 10% increase in the average price of SWU sold. The Technical Solutions segment revenue was $23.7 million in the third quarter, a $6.4 million or 21% decrease over the same period last year, due primarily to a $10.2 million decrease in revenue generated by the HALEU operations contract as well as a change related to other contracts.

Centrus generated a loss of $10.6 million and a gross profit of $105.8 million for the third quarter and TTM, respectively, compared to a gross loss of $4.3 million in Q3 2025.

The LEU segment's third quarter cost of sales was $38.7 million, a decrease of $13.9 million or 26% over the previous year's period, driven by a decrease in the volume of uranium sold. SWU costs increased as a result of a 28% increase in the average unit cost of SWU sold and a 19% increase in the volume of SWU sold. Technical Solutions cost of sales of $27.4 million increased $0.8 million or 3% from Q3 2025, primarily attributable to an increase in costs related to customer contracts, partially offset by a $1.7 million decrease in costs incurred under the HALEU operation contract.

Normalized operating loss for the third quarter was $25.1 million compared to a loss of $16.6 million in the same period last year. The company generated normalized net loss of $10.2 million and $9.4 million of adjusted net loss in the third quarter compared to normalized net income of $3.9 million and adjusted net income of $5.2 million, respectively, in Q3 2025. The change in third quarter normalized net loss was primarily attributed to a decrease in income tax benefit of $9 million, an increase in gross loss of $6.3 million and an increase in advanced technology costs of $3 million. This change in normalized net loss was partially offset by an increase of $4 million in investment income. On a fully diluted basis, this equates to third quarter 2026 normalized loss per share of $0.49 and adjusted loss per share of $0.46, respectively, compared to $0.19 and $0.25, respectively, in Q3 2025.

On a trailing 12-month basis, Centrus generated normalized net income of $34.4 million and adjusted net income of $77.3 million, respectively. Third quarter adjusted net income excludes $2.4 million of gross expenses and a $1.3 million benefit to our SG&A related to our stock compensation, which combined and tax adjusted equates to $800,000. Please refer to our Financial Results section of our earnings release issued yesterday for a reconciliation of net income, normalized net income and adjusted net income. Going forward, we continue to expect to have certain level of these types of growth expenses to flow through our income statement as we continue to build out.

Centrus' backlog across both segments grew to $7 billion at the end of the third quarter and extends out to 2040. The growth was driven by an approximate $2.4 billion in LEU and HALEU enrichment sales in the LEU segment. Of the approximate $5.4 billion in contingent LEU and HALEU sales commitments, $5.1 billion are under definitive agreements.

Turning to our capital spend, which are CapEx and non-CapEx attributed to costs and investments such as prepayments to suppliers or growth costs. In the third quarter, we had total capital spend of $134 million with $131.6 million coming from CapEx and the remainder coming from non-CapEx growth costs. We finished the third quarter with approximately $2.2 billion in unrestricted cash without using our ATM.

In September, we completed an approximately $500 million underwritten public offering of Class A common stock and prefunded warrants together with accompanying common warrants. This important transaction allowed us to access near-term capital at a premium while setting the company up for significant future capital in four future tranches with progressively higher excess prices only if our share price appreciates and we continue to execute against our milestones. If exercised in full, the warrants could provide approximately $2 billion of additional gross proceeds with exercise prices ranging from approximately $2.27 to $3.63 per share. We believe this structure reflects investor confidence in the long-term value of Centrus while providing additional financial flexibility.

We continue to feel confident in our existing cash balance, and we believe we are sufficiently funded to meet our near-term capital requirements.

Subsequent to quarter-end, we acquired Westerman for approximately $116 million, funded through a combination of cash on hand and equity, including $95 million in cash and $21 million in equity. We expect the acquisition to lower project costs for Centrus and drive greater efficiencies across our supply chain.

Turning to our outlook for the remainder of 2026. As Amir noted, we are reaffirming our annual guidance for revenue of $450 million to $500 million and total capital spend of $350 million to $500 million. The target excludes the Westerman acquisition. We look forward to having a more fulsome conversation about Westerman build-out at our upcoming December Investor Day. We are simultaneously reaffirming our operational guidance for the workforce additions in Piketon and Oak Ridge.

With that, I will turn the call back to Amir. Amir?

Thank you, Todd. I am proud of the progress we made during the third quarter across our commercial, operational, and financials broadly. We have made significant progress in and are continuing to derisk our build-out. We are now beginning to manufacture and ship centrifuges from our Oak Ridge facility. We have locked in 100% of the suppliers we deem critical and have completed our first CFC package. We have significantly grown our commercial enrichment backlog. We are sitting on a healthy cash balance that empowers our buildup. We have furthermore bolstered and derisked our business profile, especially in near-term revenues and profitability with our recent Westerman transaction. And all of our progress is happening as our addressable market continues to grow, a strong backdrop that supports our expansion.

We are also excited to host our upcoming Investor Day on December 7, at our American Centrifuge Plant in Piketon, Ohio. We look forward to sharing more about our strategy and build-out at that event.

With that, I will turn the call over to the operator for questions. Operator?

[Operator Instructions] Your first question comes from Mark Shooter from William Blair.

Amir, I just had a question on the first centrifuge. So the first centrifuge production, that's a big milestone for the company and also national security. But a key point for us on that front was that these new centrifuges are unobligated. And I was hoping you could give us some update on the engagement with the NNSA and speaking to the funding be outlined from the GAO as well.

Yes. Well, good morning Mark, thank you for that good question. I'll remind the listeners and yourself that one of the great values that we bring to the market and the technology that we bring to the market is the capability to have unobligated production that can serve national security needs. Just as a reminder as well in form of background, in November of 2025, the NNSA published a notice-of-intent to issue Centrus, a sole-source contract for the production of certain low enriched uranium that's suitable for use in support of the national security mission. So that is sort of the backdrop to our needs and our drive to have unobligated production.

And specifically to your question, our production will be unobligated. And we have been working to configure the supply chain, working with all our suppliers to make sure that that is going to be implemented.

I hope I answered the question, Mark.

Yes, thank you, Amir. I thought they cut me off for the next question. Thank you.

Your next question comes from Mark Bianchi from TD Cowen.

This is Esteban Albarracin on for Mark Bianchi. My question is really around the current LEU backlog. I know you mentioned excluding the LEU to HALEU contract, is that all tied to the existing reactor fleet? I ask because I'm trying to understand the opportunity for new light water reactors there and there's 10 new large reactors moving through the DOE EDF loan program. So I'm trying to think how should we think about the timing of potential LEU backlog opportunities for Centrus there if enrichment RFPs could follow relatively soon for new reactors or would utilities likely weigh closer to a reactor startup?

Good morning. Let me just talk maybe in general, and then we'll address specifically the question about the new build. We very much are excited and are obviously prioritizing firm and -- firm commitments from customers, and the ones for LEU are typically the ones that are able to make those in large numbers. So a good size -- a large part of our backlog is LEU for operating reactors here in the United States and abroad as well.

Specifically, to the question of how to think about the new reactors that are yet to be built, it really is a question to them as to at what point they would feel they would need to go out and secure fuel supply. I think based on what we're seeing the advanced reactors do, they do prioritize fuel supply, and they put that right at the front to ensure that they derisk their projects. I would expect that the new builds, whether it's going to be AP1000s or whatever other large reactor design is going to be, there's going to be tremendous need for enrichment supply as well.

I would tend to think that in today's markets and some of the availability and some of the long cycles around capacity expansion of enrichment, I would absolutely encourage them to put that at the very front of their planning cycle as they plan to expand. And so we absolutely intend to compete for it, and we intend to make that a big part of our business as well.

Your next question comes from Joseph Osha from Guggenheim Securities.

This is Peyton Durand on for Joe Osha this morning. I guess could you just provide a little bit more color on what enabled the accelerated time line for the first completed centrifuge? And do you see this time line as sort of replicable for future units? And I guess the third part, what learnings are you going to take from this first one to apply to nth of kind?

Okay. Thank you for the question. I think I've been very consistent on all of our calls in trying to explain and emphasize to the investors how critically important it is for us to gain market credibility, to be able to meet and exceed our commitments. We have an incentive to -- from the market, we have an incentive to beat the timelines that we have advertised. And so organizationally, we are creating the same incentives and the same expectations of exceeding, meeting the timelines. But more specifically, what enabled is we do run process improvement teams in parallel. I mean, one example that I gave before, which I'm sure we'll get to talk about at some point from -- I'm sure a question will come up about our partnership with Palantir and some of the work we're doing there.

So we really are attacking this on multiple fronts, and we're doing a lot of progress with our supply chain and all of this with the intent of expediting, lowering cost, derisking. Westerman is another example of derisking and building efficiencies into our supply chain. And I'm sure there will be a question on that as well at some point.

So the lessons learned here is that when you align the goals in the organization, provide the tools, expectations and make a proper investment in rapid improvements, it pays off, and we certainly intend to implement those learnings. And these are coincidentally to your second part of your question. These really are the learnings -- and we certainly are looking forward to providing a more wholesome update details and examples at our Investor Day that I've announced earlier. And hopefully, that answers the question.

Your next question comes from Nate Pendleton from Texas Capital.

Congrats on the continued progress. Amir, I wanted to go back to the strong macro picture that you alluded to in your prepared remarks. With the strong SWU pricing relative to uranium, as we look ahead, how are customers changing tails of say, if at all? And how much Western SWU demand could be met with overfeeding as we look out in the future?

Great question. So you're asking an enrichment person about a question that involves a lot more consideration than just enrichment. Obviously, uranium pricing fits into this very strongly. Each customer and supplier approached this question individually on a contract-by-contract basis. In the past, obviously, when SWU prices were cheap, this goes back a few years ago, we've seen a different behavior around tails assay. We've seen a different behavior around underfeeding versus overfeeding. Obviously, that dynamic has changed now that SWU prices have gone up considerably. And I would expect that this continues to be just an optimization for each contract, case by case, as to how they view their uranium supply pricing versus how they want to optimize it versus enrichment.

I will add as a final thought that I would tend to give the upper hand here to enrichment. By that, I mean, I think ultimately, you would see the seesaw pendulum swing towards sort of erring on the side of favoring enrichment capacity is just because I don't see that there is that much ability to expand capacity as quickly as the market grows. I mean, we're seeing that disparity now, and I think it will take a while before that disparity sort of settles. So I think you will see that reflected in the tails and in the overfeeding versus underfeeding. I hope that answers the question.

Your next question comes from Bill Peterson from JPMorgan.

Nice job on the quarterly execution. I wanted to ask a follow-up on a prior question on the backlog. So I guess we think about your commercial strategy, is there a preferred mix of, I guess, existing utilities, say LEU versus newer companies, SMR? And I guess with the shape of the backlog, you talked about backlog going up to 2040. Is that more front-loaded or back-loaded? I'm just trying to get a sense of what that could mean for implication on CapEx as you, I guess, continue to grow your backlog.

Yes. Thank you for that question. I'll start off by just saying that it would be -- we typically do not break down and separate the amounts. That said, the vast majority of our backlog is LEU-- it's either for LEU customers or its feedstock for future HALEU offtake.

Now you asked a pretty interesting question as to who do we favor and who do we like more. That would be a dangerous answer to give. I'll give you the pros and cons. And obviously, we want both and we pursue both. The established LEU customers provide a lot of certainty. They provide a lot of volume. They provide very, very solid terms to be able to offtake. And that is precisely what we need when we are expanding facilities -- expanding our facilities and investing capital. However, I do not want to, in any way, underestimate the HALEU customers who just in the last 6 months, a year have become a lot more committed to the supply chain, and we're seeing them being able to make sort of take-or-pay type contracts and legally binding contracts.

They provide a huge promise to a company like ours. If there is a large expansion of any of these SMRs or microreactors, if there is a large build-out, that's going to create a substantial need for HALEU and an exponential need for LEU. And so we honestly are trying to keep our finger on both triggers. And I will just remind the investors and listeners as well that the third leg of the stool here is we are pressing really hard on national security. We position ourselves to be able to serve the needs when called upon for national security. And I hope that, that gives you enough detail that I answered the question, Bill.

Your next question comes from Nick Amicucci from Evercore ISI.

Well, you opened the door, so I'll allow you to either walk through it or close it on me. Just wanted to kind of dig into the $300 million of Palantir potential savings. And basically how much represents validated procurement or engineering changes versus the opportunities that are still under evaluation? And should we think of any of those as an accelerant to capacity delivery?

Yes. Good question, Nick. As previously communicated, a day 1 focus for us is to really maximize cost savings while we really are bringing in lead times and deployment times for our expansion. We want to use state-of-the-art technology tools, capability, individuals -- and hence, the reason for the partnership. We did announce amount of savings that we put out there, and then you quoted $300 million. A lot of it has been a strong contributor to our capability to deliver ahead of schedule.

From where I sit, and I'm fairly connected to the project, I think that most of the opportunities and most of the potential savings and value we're going to derive is still ahead of us, so much so that we are in active mode of learning as to what we achieved and how we potentially accelerate and expand that. So stay tuned for more announcements. Stay tuned for more information.

And as one of the answers that I gave earlier, we do intend to have a much more wholesome conversation on this in our Investor Day. This really is the purpose for such conversations. We'd love to address it there, and we're preparing to do that. And I will also add as a last statement that the first centrifuge is really a great example of the value creation-based agreement and partnership that we have with companies like Palantir. And I think the very first milestone that we set out there, we've been able to capitalize on it, and we're looking to do that eventually for all the other milestones that we're facing.

Your next question comes from Jon Windham from UBS.

This is David on for Jon Windham. Just wanted to touch base on -- can you give us an indication or kind of a status update on where you are in negotiations with the DOE and the potential to convert your demonstration cascade to commercial offtake and the potential to bring some of those volumes online a little bit quicker to market.

Yes. So we are in discussions. Again, as I typically answer my questions, I'll give a little bit of backdrop and sort of the context for the answer just for the benefit of all the other listeners.

We've embarked on a demonstration program with the DOE. They've been a great supporter. We worked collaboratively really well to demonstrate our technology now for 3 years. It's been hugely successful, and it provided the impetus and the capability to expand that into commercial operations.

The natural next step for the -- the natural next step for the 16 centrifuge demo cascade is to place that into commercial operations. The cascade is producing. We are in discussions with the Department of Energy about how to amend and how to make a more wholesome agreement where this continues to serve the market and some of the reactors that are getting into the market now and would require some of that material.

Yes. To Amir's point, we -- the centrifuge is currently spinning for commercial use. And as part of the larger agreement, it's our ambitions and the DOE's ambition to keep those centrifuges spinning throughout their life cycle, and we are currently working that in through our long-term arrangement with the DOE. We have -- they have given us rights to use those commercial -- those centrifuges for commercial use currently, and that's what they're using. So currently, we are enriching for HALEU for commercial needs at this moment.

Your next question comes from Eric Stine from Craig-Hallum.

This is Luke on for Eric. So as it relates to your supply chain strategy, should we expect to see vulnerable areas addressed through vertical integration like with Westerman? Or was that more of a sort of a one-off event from a strategic perspective?

The -- I think your question specifically asks about vulnerable. I would say that the Westerman deal was a whole lot about an opportunity to derisk our supply chain, to derisk the build-out and to derisk the business model as well as to be able to capitalize on a lot of efficiencies that we see out there. So all in all, we're very satisfied with it. But I mean, there's other tools in our arsenal over there that we're deploying in setting up a supply chain that is predictable, capable, and produces high-quality product. I mean, these things are done every day by our team, are not necessarily advertised. They're not necessarily how they're communicated to the broader community. But this is the kind of stuff that we do every day that goes unadvertised.

You use the word vulnerability. This is going to be a major project. We have a lot of suppliers. Each supplier has their own strengths and weaknesses. We have built -- we are building and we've built resilience in our supply chain where possible. We're using quality oversight. We're using partnership with different suppliers. So we're not taking anything off the table. I think what you saw with Westerman is an example where you had really a perfect fit of all these factors come together, and there was no coincidence that this deal was made.

Yes. I will just comment. We view Westerman as a world-class operation, especially in the nuclear space, and they reach over into other industries. This allows diversity to Centrus' income stream and revenue. It's immediately accretive in year 1. And it really serves as a platform for us to expand on supply chain integration, take out some of those vulnerabilities if we see. They present themselves through either organic growth, now through Westerman ,or through additional M&A activities. We are extremely excited about this.

I will just comment that on our investor day, we plan on providing a significant more information around the acquisition. And we hope that all of those on the call today are able to dial in or join us, and where we can provide a long-term view of our vision for Westerman and our supply chain. Thank you.

Your next question comes from Rob Brown from Lake Street Capital.

Just wanted to kind of follow-up on the centrifuge manufacturing ramp with the first one now done. How do you -- I know you can't give exact numbers, but how do you sort of see that ramp happening? Is it over the next year? Is it sort of ramp quickly? Or just a sense of how that develops?

Yes. Good morning, Rob. Could you -- just to make sure I answer your question and I understand it. When you say the ramp, you're talking about the cadence of the centrifuges as offline? Or what specifically were you thinking of?

Yes. I think you mentioned focusing on ramping up the level of production of centrifuges -- just for the color on how that happens.

Yes. So just as a general backdrop again, when we announced the first centrifuge, obviously, the big announcement there is not in the centrifuge itself, but the announcement is that now we have a functioning, operating production line that produces centrifuges, and we really are celebrating the first off that come off of this line. So there is a certain cadence, rhythm that we are currently engaged in and we're producing.

At this point, we're probably going to reserve a lot of that detail for our investor day where we have a lot more wholesome conversation on this and presentation, but do expect to see more information announcement come out on that. The point is that we have an operating manufacturing line that is in current production.

Your next question comes from Lawson Winder from Bank of America Securities.

Amir and Todd, I appreciate today's update. And I look forward to the investor day very much. The thing I'd like to kind of better understand is commercial HALEU. So you've disclosed that the existing 16 cascades are now enriching HALEU for the commercial market. Can you just confirm whether that's against the Oklo, X-energy, Radiant or Antares contracts? Or is there another customer? And then when we think about revenue and economics from that, I mean, when do you expect first commercial HALEU revenue to start showing up in the P&L? And then how should we think about the margins versus the DOE HALEU contracts? I mean, are these going to be similar margins? Or could commercial HALEU possibly have significant superior economics?

Yes. So a lot of questions there, and thank you for that, Lawson. Let me try to jot them down. I'll try to answer all of them. The -- your first question around the commercial HALEU and who specifically it goes to. The answer that I'll have for you is it will be supplied to the commercial market that requires HALEU. And -- I mean, everybody read our announcement. There's no more detail further to that, but we're absolutely looking forward to supporting the start-up of the commercial market of HALEU. I mean, these new reactors are becoming real. They require fuel, and we are the first ones out there that are going to be fueling them. And having the only HALEU cascade in the Western world that's able to supply them right now gives us a huge advantage, and we're looking forward to providing that support.

Now to your -- I think the next question you had was comparing contrasting margins on these contracts versus the DOE. Todd will give you the word on that.

Yes. Look, there's two different types of contracts that are present. The DOE, obviously, with the demo project that allowed us to prove our capability while providing enrichment that can potentially be used for the start-ups of many of these SMRs and microreactors.

On the commercial, there's a lot more that goes -- that's involved around the commercial contract terms. Obviously, we don't not get into those types of economics, but there's various different items and every contract is different as to who provides the fee, whether it's LEU or we are providing it. So the overall price there can have some variability. And -- but we are obviously confident in their ability in the HALEU market to provide significant upside to the company and optionality.

So we're rooting for all of the SMRs and advanced reactors. And as Amir said, we're extremely excited to be the only one enriching commercially HALEU fuel right now and are standby to meet all of our customer needs.

Your next question comes from Joseph Reagor from ROTH Capital Partners.

I guess for me, on the Westerman acquisition, can you give us any additional color on what the margins look like there at the gross margin level? And what, if any, seasonality there is to their business?

Yes. Yes, we are really excited, as I said, about the Westerman. I think I will put a pause on one of your comments, but we believe there's significant upside to the Centrus revenue stream.

This industry has very strong margins in the supply chain. It does two things. One is it as one of our larger suppliers, it allows us to derisk our supply chain and have cost savings while diversifying our revenue base. Westerman also is involved in other high-growth industries and also oil and gas. The margins vary in each one of those segments. The high-growth segment is obviously in high demand and the margin's a little bit higher. Nuclear has strong margin profile. And the last is the oil and gas has been a mainstream for the Westerman throughout their operations. And we will provide more information on our investment day, including breakdowns of their margin profile in each segment and their contribution of revenue to Centrus in the current year and over the next future years. I hope that helps.

Joe, I want to add a couple of other things here since we're talking about Westerman. So I made a comment to this earlier that this was really no coincidence. This is -- this was not one of those things, hey, we want to buy somebody. Let's look at a list of 100 people. No, this was not the case. So Westerman, folks in our industry -- know that Westerman is one of the strong fabrication pillars that has a nuclear grade fabrication capability. They're a high-precision fabricators. They're very versatile, as Todd mentioned. This is a great fit. And not only are we looking at, as I said, a lot of the derisking of the supply chain build-out and the business model that we've communicated, but we also have a very strong eye to the future potential and what other things could be done to support our build-out in the business as a whole.

So as Todd said, I'll echo again, we're very excited about the things that are yet to come. And hopefully, we'll have a much broader conversation December 7.

Your next question comes from Jeff Brand from Northland Capital Markets.

I had a question on the capital deployed kind of cadence here. Hoping to get any additional clarity you guys can provide in terms of kind of Q4 spending. Obviously, it could be a wide range of outcomes and still hit the full year guide. So just kind of wondering how we should think about spending into Q4 and any early thoughts on spending trajectory into '27. Thanks.

Thanks for the question, Jeff and good morning. So we have maintained our capital spend guidance. So obviously, you can kind of back into our fourth quarter spend. What I will say is we are now crossing the threshold into deploying capital at a more accelerated rate. We have started our first construction package. As you can see, we have our first centrifuge rolling off the line. We have secured our supply chain and have orders on -- for all of our materials currently placed, and we're moving forward with our build-out.

All of these numbers are ex-Westerman. I just want to make that point. So often in GAAP and other areas, an acquisition will be considered CapEx and growth CapEx. But to maintain status quo and quarter-over-quarter continuity, we've excluded Westerman from that. Now to be said, we will look to provide more guidance in our Investment Day on December 7.

As for 2027, what I said earlier this year and on previous calls, we're going to get to a point where we start to see some real cadence of capital deployed. And we're now in that ramp-up. We only started our Fluor contract midyear as we signed the contract. And so now as that's beginning to come to fruition and we are -- have boots on the ground, our spend increases in addition to the manufacturing side. So stay tuned. We'll provide more guidance as for 2027. Obviously, we will be looking to give a more wholesome number in future discussions.

Your next question comes from Jayad from Stifel.

As we head into the next Congress, do you guys see any change in the outlook for federal support for domestic enrichment? Or is that support largely insulated from the political cycle?

Yes. Good apropos type question. I will tell you with firm belief that this ought to not change the momentum of our industry, this ought not to change the momentum of the investment, the interest and the focus that -- and the support that the U.S. government provides to the fuel cycle and specifically to enrichment. And the reason why I'm saying this is we have now been through this cycle of two administrations at least during my time, and I have not seen a change in support, focus or dedication. I've seen it increase. I mean, some of the conversations around clean energy needing to increase -- I mean, all of these things don't go away. They're still there. The conversations around reindustrialization, providing jobs, it becomes even more important now. So the answer to your question is I absolutely don't see any change. I see a necessity for even stronger support and focus, and we're looking forward to working with the new Congress on this as well.

Your next question comes from Sean Milligan from Needham & Company.

This is Drew Scott on for Sean. With the first centrifuge ahead of schedule and backlog growth tracking well, are you seeing HALEU demand pull forward ahead of expectations at all? Or are you even enough to say you consider pulling forward capacity even further?

I'm sorry, I did not hear the last part of the question. Could you please repeat the question again?

Yes. So are you seeing HALEU demand pulling forward kind of ahead of your expectations? And would that even make you pull capacity forward ahead kind of what you originally planned?

Yes. Thank you for that. I'm not seeing as much of pulling of demand ahead by the reactor developers. What we are seeing, and I mentioned it earlier, is we're seeing a lot stronger commitments and a lot more aggressive focus on actually locking in agreements and derisking the fuel supply part of the equation when it comes to their build-out. So no, there is really no changes in terms of the cadence that we're planning in terms of rolling out our capacity. We obviously, as I'll repeat it again, are looking for every opportunity that we have in shortening lead times and creating efficiencies, and we will execute on that. But from the customer side, we're not seeing that yet.

Your next question comes from Sameer Joshi from H.C. Wainwright.

My quick question is on the 4Q outlook. Basically, if you look at the annual outlook, it looks like 4Q will be $142 million to $192 million revenues. Like are there any takes and puts on this? And then part 2 of that question is the SWU pricing versus SWU cost management, how are you looking at it? Should we expect another sort of negative gross margin quarter -- this quarter?

Thank you for your question and good morning. Yes, as you expected, we maintained our guidance. We are optimistic, and we feel, obviously, that the fourth quarter provides a full year view of our strong results. As we've always noted that we see significant seasonality, including when we actually have sales that come -- that are being delivered, but also receive our shipments. That quarter-over-quarter mix provides some fluctuation in our gross margin profile. That's why we've been discussing this on a TTM basis to provide a more normalized view. The negative gross margin and everything, there's a lot of timing around when we receive product and mismatch of when we deliver product. So as such, we are very confident in our full year view. That's why we have maintained our guidance. We believe that the revenue and guidance that we have provided is also ex any Westerman upside. So I just want to make that note. And we will be providing updated guidance on our December 7 Investor Day.

Your last question comes from Ryan Pfingst from B. Riley Securities.

Maybe just a quick one on the backlog increase here. Was that fully from the 3 recently announced advanced reactor customers? Or were there other undisclosed customers in there?

Yes. That's not something that we disclose, but I can say that this was a mix of both LEU and HALEU. Unfortunately, I can't give the details. We don't provide the breakdown and separate the amount. The vast majority of the backlog is LEU, either for LEU customers or as feedstock for our future HALEU off takers. I hope that answers the question, Ryan.

Thank you. At this time, we have no further questions. I would like to turn the call back over to Mr. Neal Nagarajan, Senior Vice President. Please go ahead.

Thank you, operator, and thank you to everybody who listened on today's call. We're very excited about our upcoming investor day on December 7 at Piketon, Ohio, and we look forward to providing the market with more details at that time. Thank you.

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

Good morning, ladies and gentlemen, and welcome to the Centrus Energy Q2 2026 Earnings Call. [Operator Instructions] 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.

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 30. 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 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 expressed 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. And by signing the DOE's enrichment award, we have unlocked substantial nondilutive, non-debt funding to advance our commercial centrifuge build-out program. The funding helps derisk 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 2 and Gen 3 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 loan program seeks to help finance and accelerate the deployment of new large-scale nuclear reactors across the United States. Meanwhile, power upgrades 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 3 of 4 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 the centrifuge is multifunctional, any funding, whether related to LEU, national security or HALEU advances Centrus through first-of-a-kind costs.

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 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 multibillion-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 2 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 looking -- 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 past quarter 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 derisking and advancing our ongoing multibillion-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 5 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 nondilutive, non-debt funding for our expansion and is 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. 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.

Now moving on to guidance. We are reaffirming our 2026 annual guidance for total company revenue of $450 million to $500 million, total capital spend in the range of $350 million 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?

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 12-month basis.

Total revenue for the second quarter was $176.1 million, an increase of $21.6 million or 14% versus the same period last year. TTM revenue was $473.9 million. The LEU segment generated $153.4 million in the second quarter, a 22% increase versus the previous period last year. SWU revenue in the quarter decreased by $25.7 million due to a 23% decrease in volume of SWU sold, partially offset by a 3% increase in the average price of SWU sold. Centrus also had $53.4 million of uranium sales in Q2.

The Technical Solutions segment delivered revenue of $22.7 million in the second quarter, a $6.1 million or 21% decrease over the previous period due primarily to a $5.9 million decrease in revenue from the HALEU operations contract. Centrus generated gross profit of $49.9 million and $112.1 million for the second quarter in TTM, respectively, compared to a gross profit of $53.9 million in Q2 2025.

The LEU segment's second quarter cost of sales of $101.8 million increased year-over-year by 36% or $26.8 million, driven by an increase in uranium sales in Q2 2026. Uranium costs increased as a result of 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. The Technical Solutions cost of sales of $24.4 million decreased $1.2 million or 5% from Q2 2025, primarily attributed to the HALEU operations contract.

The company generated net income of $16.8 million and $38.7 million of adjusted net income in the second quarter compared to net income of $28.9 million and adjusted net income of $34.5 million, respectively, in Q2 2025. On a fully diluted basis, this equates to second quarter 2026 earnings per share of $0.77 per unit and an adjusted earnings per share of $1.77, respectively, compared to $1.59 and $1.90, respectively, for Q2 2025.

On a trailing 12-month basis, Centrus generated net income of $48.5 million and adjusted net income of $92 million, respectively. The second quarter net income decrease was primarily attributed to a $12.8 million increase in SG&A costs, driven by an increase in stock compensation costs and a $7.5 million increase in advanced technology costs in Q2 2026. This was partially offset by an $8.3 million increase in investment net income for Q2 2026.

Second quarter adjusted net income includes $10.6 million of gross expenses in our advanced technology costs and $17.7 million in stock compensation costs, which combined and tax adjusted equals $21.9 million. The advanced technology costs include short-term noncapitalized 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 continue to expect to have a certain level of these types of expenses flow through our income statement as we continue our pre-preparations. Centrus backlog across both segments grew to $4.5 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. Of the approximate $3 billion in the segment's enrichment backlog, $2.4 billion are under definitive agreements.

Turning to our capitalization and capital spend. As a reminder, non-CapEx is attributed to cost and investments such as prepayments to supplier or our growth costs associated with our manufacturing and pre-preparations. In the second quarter, we had a total capital spend of $82.2 million with $71.6 million coming from CapEx and $10.6 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. We finished the second quarter with $1.9 billion in unrestricted cash using our ATM opportunistically to acquire proceeds of only $53.9 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 have allowed us to raise our 2026 annual guidance for workforce additions in Piketon, Ohio to 175 plus, up from 100 plus. 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 build-out.

With that, I will turn the call back to Amir. Amir?

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 3 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. Long-term LEU pricing continued its steady ascent year-to-date, while spot pricing remains at the high set last year. With market tightness anticipated for at least the near and midterm due to constrained supply, while demand continues to grow, Centrus is well positioned to benefit as a proven enricher. Looking ahead, we will continue to focus on our mission of restoring America's nuclear fuel supply chain and are encouraged by the continued strong trends in the broader macro environment that are supporting global nuclear power development.

Finally, we are excited to host our first Investor Day in December at our American Centrifuge plant in Piketon, Ohio. We look forward to sharing more about our strategy, growth opportunities and long-term outlook at the event.

With that, I will turn the call over to the operator for questions. Operator?

[Operator Instructions] The first question comes from Jon Windham with UBS Financial.

This is David Choe on for Jon Windham. Congrats on the progress this quarter. Just really quickly on the X-energy partnership. Could you just give us a sense of the cadence of any deliveries you expect to make? I know X-energy is planning to bring their first facility on kind of in the first half of '28. And then do you expect any of those volumes to come from the demonstration cascade that you're converting to commercial offtake?

Yes. Great questions. Thank you very much. Let's start with the X-energy question. So as you pointed out, we announced a very exciting agreement this morning. I'd like to just in generally frame it up as another great evidence and another data point to show that Centrus is quickly becoming a trailblazer and the go-to for HALEU. We're proud to be able to support some of the new development as far as the advanced reactors are concerned. And as you know, we have already a strong order book of LEU as well. I would like to remind you that the other exciting thing here is that these HALEU agreements include a prepayment as well, which is significantly helpful to us.

Now to your specific question, unfortunately, I cannot provide too many details around deliveries and other specific terms under the contract. We are unable to provide that. But as I said, all in all, just as a general statement, it's exciting. It's definitive, which is very important, and we're looking forward to filling it.

The next question comes from Bill Peterson with JPMorgan.

I guess given that we're less than 18 months from the Russian import ban going into effect, have you seen any changes in buyer behavior? How should we think about any potential changes in financials, including your inventory or working capital, assuming customers prefer to prebuy. I mean, all this assumes there's no further waivers, but just kind of get a sense for how customers are -- if they're willing to sign at current level, market level for SWU or just of any change of customer behavior that you're seeing?

Bill, thank you for the question. So since you gave me a free hand in answering that question, let me give you general thoughts as to what we're seeing that probably cannot get into a lot of details around discussions we're having with customers. But you may have heard me say this before that we do see sort of tightness on the supply side towards the end of the decade. I do believe we're starting to see some of that. We're seeing strong momentum as far as customer interest generally in buying SWUs and turning specifically to Centrus for that as the newcomer and the new entrant into the market.

So we're seeing very strong order momentum. And as I mentioned on the earnings call, the LEU pricing has had a very strong run-up until this point, which is very helpful to our business and further reinforces the investment that we're preparing to make here. So all in all, I think it's in line with past discussions that we were having as to where we see the market going and with all the added demand side to the equation and not a whole lot added to the supply side of the equation, at least not in the next year or 2, we're seeing that momentum play in favor of the sellers.

The next question comes from Eric Stine with Craig-Hallum Capital.

This is Luke on for Eric. So on the cost savings front, obviously, the partnership with Palantir is already proving to be extremely valuable. But can you just give us an idea of what the picture for further cost savings might look like throughout the life of your expansion project just in terms of comparable magnitude to what you've been able to achieve thus far since you're still just in early stages here, if there's any cost areas in particular that you're focusing on now?

And again, thank you for that question. You're actually pointing out to an area that is right at top of our priority list as we launch the project, as we commence manufacturing, as we start committing to commercial deliveries and to delivery of our centrifuges. It is extremely important, as I mentioned on the last couple of earnings calls, and I'll reiterate it here that we, in parallel, unlock efficiencies, cost savings and cost out efforts.

We talked a little bit about our efforts together with Palantir, with some of our EPC partners. We have a lot of supply chain efforts that are aimed at yielding exactly what we're talking about here. The fact that we're able to lock in larger order books, the fact that we now have more clarity into customer base about the ordering allows us to make more leverage buys and realize savings on the supply side of our build.

The other thing that I'll mention is in addition to utilizing and expecting supplier savings, we're also launching in parallel a lot of efforts internally to ensure that the manufacturing facilities that we're setting up and the processes that we're setting up have things like lean and things that utilize and maximize efficiencies. All of that will result in no doubt in cost savings.

In terms of being able to give you details as to what it is numerically and what we're targeting, that's not something that we've talked about on this phone call, but I'll reiterate again that being able to lock in long-term agreements, large orders due to some of the clarity that I talked about results in significant cost savings.

The next question comes from Mark Shooter with William Blair.

Again on the Oklo and X-energy supply agreements. I understand you guys are limited on what you can disclose, but maybe a comparison may help bring out some context for us. If you look at the 2 HALEU contracts you recently signed with Oklo and X-energy today, can you highlight anything where they may be the same or differ maybe in size, timing, milestone structure? Is one further along, more definitive? Do you either have take-or-pay commitments?

Yes. So as you know, I'm fairly limited in the details that I can provide just because there are nondisclosure agreements, and we just typically not in the habit of revealing details of commercial agreements. However, there are a lot of similarities. And I was mentioning on the last couple of calls that we are starting to see a much greater ability from our customer base to actually commit to legally binding agreements, a definitive agreement, and that's what you saw with the X-energy agreement that we've announced, and that's what we're marching towards with Oklo as well.

I do want to explain a little bit of the LOI dynamic versus a contract. The LOI is a step that precedes a definitive contract. This is an agreement over general terms as we see them. And once we get to that point, we're very close to finalizing contractual terms and conditions. So the similarities that we're seeing is you're seeing now some of these OEMs being able to commit and put fuel as a priority in their purchasing strategy. And we're seeing a maturing of the SMR market.

And probably the most important thing I want to convey on this call is that we now are leading the pack, and we are the HALEU supplier. We now are the go-to for HALEU supplies. And as you know, we kind of view HALEU as a bonus. LEU is the sure business, the sure thing in the market. We've been focusing on that very strongly. HALEU has been really a big bonus for us. And I talked a lot about just generally the economies of scale. So we naturally are trying to not only get the HALEU but also get the LEU feed, which is extremely important to us for economies of scale.

The third similarity that we're seeing is prepayments. We're seeing the willingness, the ability and our sort of strong preference for a prepayment, which adds significantly to the nondilutive capital that we're able to invest.

The next question comes from Vikram Bagri with Citigroup.

It's Ted on for Vik. I just wanted to come back to the guidance. And could you just maybe remind us what's driving the bookings there? The release had mentioned the potential roll-off of funding for the operations contract. So just wanted to understand where that may sit within the revenue guidance range.

Yes. So if you -- just a reminder, we -- on our revenue guidance, we increased it last quarter. One of the things that I just want to remind is our business has variability from quarter-to-quarter. So it's always wise. That's why we are talking about our earnings also in the trailing 12 months. We're not providing quarter-over-quarter guidance. However, we're maintaining our guidance for the year. We feel that along with our strong order book and the market maturing that we are able to maintain our guidance at the current sense for revenue and also CapEx. But additionally, another strong item is that we've increased our headcount around the Piketon facility, which shows our continued momentum and our build-out at Piketon.

I'd like to add to what Todd is saying. Just a very exciting announcement for us that obviously, we're communicating and transmitting here is that the first centrifuge is going to be completed in our Oak Ridge facility sometime in 2026 as we announced. Again, this is in line with the investment that we're making, the project planning that we have, and this is probably one of the most exciting steps towards realization and commencement of enrichment in Piketon.

Got it. And then one further question. Just in terms of the increase to the backlog quarter-over-quarter, are you able to just talk about what led to that increase in terms of the signing of the DOE awards contribute to that? Or are some of the more recent awards within there? And how do you actually define the backlog? Does it include any LOIs?

So unfortunately, I won't be able to get into a lot of details, but I will tell you this does not include the DOE. These are all commercial agreements. The increase in backlog has to do with commercial agreements. I cannot really go into any more detail than that.

The next question comes from Rob Brown with Lake Street Capital Markets.

Congratulations on all the strong progress. Just want to talk a little bit more about the offtake agreements. Maybe just sort of big picture, what's your thinking on the amount of your future capacity that you hope to have in terms of offtake agreements signed up? This, I guess, is a HALEU specific question. But how much of capacity do you hope to have offtake agreements signed for?

Yes. Thank you for the question. I think a few calls back, I was mentioning that really our strategy is depending on what our solid order book looks like, that would sort of determine the proportion of LEU versus HALEU that we're building. At this point, based on what we're locking in, we're not really changing the proportions of what we're building out. We are going to be building both. We have the flexibility to build both.

Depending on the customers that step forward and are making firm commitments, that's what we're going to be building. And obviously, we're going to be looking for solid commitments for as long of a term contract as possible. And we kind of transmitted exactly those points to the market last year. And I'm happy to say that it's been kind of progressing exactly on how we transmitted it last year as well.

The next question comes from Ryan Pfingst with B. Riley Securities.

Maybe a follow-up on your work with Palantir and efficiencies more broadly. You discussed efforts in one of the previous responses on the cost side. But could you give more detail on progress you're looking to make on lead time reduction?

Ryan, thank you for that question. So you are correct. I think lead time is extremely important as an opportunity as well as cost out. The reason is we're backing into commercial agreements. And quite frankly, the commercial agreements are demanding even faster timelines. There is a gap in the market in terms of supply, as I mentioned to one of the earlier questions. So there is really a tangible and real reward to where we can come to market with enrichment capacity as soon as possible.

So part of our work with Palantir, part of the work that we have with our EPC providers and other partners, meaning the large suppliers that I referenced earlier. I mean all of these critical suppliers, we have ongoing efforts and sort of projects that we kicked off, where we look at both lead times and we looked at cost out because lead times really translate into enhanced revenue and being able to realize revenue much earlier, much sooner. So we're focused on that. I hope I was able to answer your question with sufficient detail. I'm not sure that I can go into any more detail than that.

The next question comes from Nick Amicucci with Evercore.

I'm going to kind of focus back on the guidance too. Just as we think about the CapEx ramp through the back half of the year and the completion of the centrifuge. How should we think about kind of the cadence of the balance of the spend through the end of the year? And then as we kind of think about into 2027, where that CapEx number kind of filters out?

Thanks, Nick. Well, first I'll say is this project will continue to ramp up. We're not going to provide guidance just at this point for -- beyond 2026. But you -- as I mentioned, you see that we maintained our guidance for 2026 around the CapEx, you saw the most recent quarter in which we spent through either prepayments, capitalized labor or preorders. This project will continue to move forward. I think one of the items that I'll also point to that shows additional momentum is the increased headcount at Piketon. And what we believe is that accelerated spend and moving forward with our project in addition to increased customer demand and backlog allow us to move at a cadence that will meet our customer demands for their deliveries in the future period.

Nick, this is Amir. I just wanted to add something to what Todd was saying. It may be somewhat tangential to your question around cadence, but I mentioned it earlier and I just want to emphasize it again. So we did announce, and we're very excited about this that the first centrifuge is going to be completed this year. The intent, obviously, is here, we're building a manufacturing facility, which is a first of a kind in the United States to actually manufacture one of the most complex things humans have ever invented, which is the centrifuge.

It is an impressive facility. We have top people, top engineers, top suppliers working on it. And we are excited at the fact that we're doing something that has never been done before. And it's coming together. The first centrifuge is the first concrete sign and proof of it. And obviously, the intention is that there is going to be a cadence of production that is fully synchronized with how we are supposed to deliver the product past the end of the decade. So although I cannot obviously give you guidance, as Todd said, in terms of numbers, but definitely look at it that way.

The next question comes from Jeff Grampp with Northland Capital Markets.

Maybe to build on the last topic. On the hiring front, you guys continue to make obviously positive progress on accelerating the hiring goals at Piketon. Can you touch on like the potential, I guess, derisking or accelerating of timelines to first cascade given the hiring acceleration? Are those correlated at all? Or can you touch on any other benefits to the business or timeline with the accelerated hiring?

Yes. So this kind of goes to the earlier question that I had, maybe 2, 3 questions ago, where I talked about not only cost savings, but improving lead times. And being able to improve lead times is tangible real benefit to the company in terms of our ability to get on the market quicker. So a lot of our efforts are associated with going faster and taking cost out. Some of the acceleration in adding the workforce that you referenced and as we've talked about in our guidance is directly related to that. Overall, I view that as a positive sign. I view that as something that is meant to absolutely ensure that we are delivering on our commercial commitments and potentially do better than that. But obviously, nothing new to announce at this point.

Yes. And I just will make one more point that when you think about the Piketon versus Oak Ridge headcount, as Amir said, we're setting up a kind of a first-of-a-kind facility in the United States to manufacture enrichment, that's where we're manufacturing the centrifuges, which are then shipped to be installed and stood up in Piketon. So all of these items are connected, where the supply chain, the lead times, the quicker that we can stand up the manufacturing and produce those centrifuges, they are be able to be shipped to Piketon.

And currently, there is a lot of work that's being done at Piketon to be prepared for those centrifuges to be received and installed so we can begin enrichment. I hope many of you are able to attend the Investor Day in December in which we will actually be able to see the facility and understand it in a greater detail.

The next question comes from Joseph Reagor with ROTH Capital Partners.

A lot of my questions have already been touched on, but just kind of trying to put a bow on everything you guys just said. Is it still the expectation that commercial production would commence somewhere around late 2029 at Piketon? Or is that timeline potentially moving forward?

I would remove the adjective late and just say in 2029, that is our goal, absolutely. Are we -- to use your words, to put a bow on it, we are exploring opportunities and working hard to ensure that we can potentially compress timelines, but there is nothing to announce and no commitments at this point.

The next question comes from Sameer Joshi with H.C. Wainwright.

Could you talk about the SWU price dynamics here? I think if I heard right, the prices went up 3% during the quarter, whereas the costs went up 30%. What are the drivers for the costs growing up?

This is one of my favorite questions to talk about. Reason is that it really kind of summarizes the market in one number that everybody can look at. And obviously, opinions may differ, but it comes down to really basic economics. SWU prices have been escalating and have -- are still escalating due to the simple fact that you have demand that is outstripping supply. And more importantly, this is 2026, we still have 2, 3 more years or so until there is capacity that's going to start to come online from numerous projects that have been announced.

And so I still think that my personal view is there is going to be -- continue to be constrained. We're going to continue to see some of the dynamics of being a seller's market, so to speak. So the simple answer is there has been no new capacity added. And not a day goes by, we're not hearing of more new reactors, operates, decommission reactors coming back online, new plants for new reactors. All of these require fuel. All of these require more fuel than they required before. Capacity remains the same. That's what you're seeing in the prices. And as I said, in the near term, I don't see that dynamic changing a whole lot.

Amir, can you also comment on what is driving the costs up concurrently? Because I would imagine it's mostly energy costs, but there are some other costs that are also clearly going up.

Well, the costs relate to a mix of our SWU and uranium costs. Obviously, each -- we can't comment on specific cost of each deal, but the inventory cost is a contractual mix and how we account for the inventory on the books. But again, we're seeing strong SWU prices. Our margins are coming in line with our expectations, and we continue to see market demand that will maintain those SWU prices.

The next question comes from Drew Scott with Needham & Co.

Can you guys talk about pricing structures in your offtake agreements that you guys are pursuing? Are you guys using the fixed price structures? Or are you guys indexing to some type of pricing? And if you think the market is tightening, how much offtake are you wanting to sign today?

Yes. I mean, currently, we can't comment on our pricing. I'm assuming you're talking around all offtake arrangements on the pricing. I just want to make sure I understand your question, Drew.

Yes.

Okay. Yes. We can't comment on the specific pricing of our contracts. Unfortunately, we have NDAs. I think one of the most important areas that will -- you see, and I think Amir mentioned this several times during the call is, these are the new contracts, and we also met financial -- our financial contingencies on our backlog is that they're definitive. And obviously, we passed our first-of-a-kind cost in our -- what we would call our initial build-out. And so the more offtake that we sign results in further economies of scale, and we're continuing to meet all of our customer demands. As you see, the HALEU market has matured quite nicely over the last 6 months, and we continue to be there to be the first HALEU provider in the market.

The next question comes from Christopher Souther with Truist.

Congrats on the progress, both in Piketon and Tennessee and with some of these customers. Maybe you can give us an update just on how discussions are going with utilities for LEU on potential long-term contracts now that we've met financial contingencies. How should we think about the cadence for incremental orders between now and 2029? It's great to see some of these SMR developers that are dependent on HALEU being proactive. But curious if you have a sense or target on the visibility we could continue to build between now and 2029. And if you're seeing more urgency for contracting from some of the traditional utility customers as well, given the pricing trends?

Excellent question. Thank you for that. I stated numerous times on our earlier calls that we were greatly appreciative and focused on the LEU market. That provides a strong foundation for our offtake backlog. These are solid commitments that are needed by reactors that are operating every day and will continue operating for decades. So they obviously are at the top of our list. The dynamics there is -- you pointed out correctly. The fact that we now have essentially no required contingency there that we have met across the threshold, that makes us a much lower risk start-up and a much lower risk enricher on the market. And I would expect that, that would give us a lot more play with utility.

We are seeing generally more interest and inward look by utilities towards sort of the few enrichment providers that are in the market now. And I am sensing that there is a lot of focus on the new entrant to make sure that there is a -- so there is competition in the market. And we're getting a lot of advantages by being the new entrant and somebody that makes that investment and now represents a much lower risk than we would have, say, a few years ago. So all in all, the dynamics is unfolding in our favor, and we are in constant engagement with utilities that are looking to fulfill their LEU needs for years to come.

I will add, and I said this before as well, that some of these discussions don't result in the linear sort of numbers that you can track quarter-to-quarter. They're lumpy and how they're being delivered. Some of these discussions take longer. Some of them take less time. But all in all, we continue to make that a priority from a commercial standpoint, the existing reactors and the existing LEU needs here in the United States and abroad.

Okay. So maybe just kind of following up there, like as far as contracts timing, understanding there's stuff that we won't necessarily see kind of in the interim, but is kind of 2028, 2029 kind of big circle dates for contracting from some of those? Or could we see some of that earlier?

Sure. I want to make sure I understand your question. So your question is, is there an opportunity to have delivery in 2028 like earlier than we announced.

No. As far as like longer-term contracts, are they kind of in a bit of a wait and see for some of that for incremental stuff beyond your current backlog? Or is there kind of upside to the backlog between now and 2029 materially?

Right, right. Yes. So I hope I'm answering your question. If I don't, please course correct me on that. The buying patterns of the utilities are very different from utility to utility. The larger utilities and the smaller ones have different strategies as to when they go to market. Some of them have different tolerance for risk or interest in incumbent versus new entrants. And as I said, the fact that we are now delivering centrifuge or we're going to be demonstrating that we're delivering, installing and we also have no financial contingencies. I believe that there is going to be a lot more interest from utilities that are in a wait-and-see mode, and there's quite a few of them there. Fully expect that.

Yes. One thing I'll add is that, obviously, the market anticipated the Russian ban and a lot of the market in the near term, utilities have secured their position. So discussions with the utilities and the RFPs are for the future periods and future periods when we plan to have capacity online. But I would just remind you that we have a strong broker business that has supported Centrus' cash flows over the past few years and continues to support Centrus cash flows, and we stand ready to meet any customer requests that may come in, in the near term.

The next question comes from Joseph Osha with Guggenheim Securities.

This is Peyton on for Joe. I guess just stepping back from the quarter here, as you transition the HALEU cascade from cost reimbursable DOE work to commercial operations, what is the fully ramped earnings power of the combined LEU and HALEU business look like? And if you could say a couple of things about what needs to go right over the next 18 to 24 months to get there, that would be great.

Yes. We don't provide any additional guidance on that. Obviously, the transition of the demo cascades to the commercial is demonstrating our ability to operate these cascades, our ability to produce HALEU that's out in the market. We're excited to be able to continue those cascades and provide commercial HALEU. Obviously, these require LEU feedstock. This will develop over time. But currently, we can't provide any additional guidance on this.

Yes. I'd like to add something to what Todd is saying, although not directly related to your question. And as you said, there's very limited amount that we can provide in terms of guidance here. But when you think about the intent of the demo cascade, it was really to demonstrate our technology and to derisk the technology. And what a great story where we are transitioning these demo cascade equipment right into commercial operations. I mean there's a lot to be read and concluded here as far as the demonstration of our technology, the capability of our technology and the high expectations that we have set for it to operate in the field. So I mean, all in all, we see this as very positive progress and development.

Thank you. There are no further questions at this time. I will now transfer the conference over to Neal Nagarajan, Head of Investor Relations. Please go ahead, sir.

Thank you, operator. This will conclude our investor call for the second quarter of 2026. As always, I want to extend a thank you to our listeners and our analysts online and those who called in. We look forward to speaking with you again next quarter and sharing more information on our upcoming Investor Day.

Thank you. Ladies and gentlemen, this concludes the conference call for today. Thank you for your participation. You may now disconnect.

Good morning, ladies and gentlemen, and welcome to the Centrus Energy Q1 2026 Earnings Call Conference Call. [Operator Instructions] 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 be also 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 time lines 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 3 important partners to support our build-out. We have repeatedly said that our day 1 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 1/3 of the partners we deemed critical, while the team entered into the conceptual engineering design phase of the first CfC 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 third quarter (sic) [ 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?

[Operator Instructions] And your first question comes from Ryan Pfingst from B. Riley.

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 and the remarks on this quarter, we see -- continue to be active in the market, and we've seen both near-term and line of sight to long-term offtake, and that has allowed us to increase our guidance marginally to what we believe will potentially be the outcome of 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, it's -- things are moving up. Just 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 before, I will say to you that the trend is continuing to look like it has in the last few years, where you have constricted supply, you have increasing demand, both from the existing fleet and from the new reactors that are either in demo state or reactors that are planning to be started up soon. I mean, people are starting -- think about fuel and start putting their fuel orders, that puts pressure on the market.

So what you're seeing overall from a macro level, you're seeing pressure on the price through the demand side of it. And so we're seeing a lot of favorability there. So once again, I cannot comment specifically about prices, but we certainly are seeing favorability in the short, midterm and the long run in terms of contractual activity.

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

I guess just kind of 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 kind of the cadence of how things kind of come to be.

Joseph, thanks for the question. We would look at it more as, obviously, our business, and I described this in the call. It's wise to look at our business on a TTM 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. And the future quarters, I would say, would be ratable to comparable periods in the past and to always adjust based on a TTM view, which gives us the best 12-month period to look at total revenue, net income and performance of the company.

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

A couple of quick ones for me. I just wanted to kind of dig into the Palantir partnership a little bit. So you guys have 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 just the cost for the full build-out, right, $1.9 billion worth of cash on the balance sheet, you're in a strong position now. But if you could just kind of provide some color on the initial build and then at what point do you get to, I guess, for lack of a better term, proof of concept where then you can entertain other financing options like maybe project financing, the cascade or something to that nature?

Nick, thank you for the question. So let me address the first part of your question, and then maybe I'll let Todd weigh in on the second part around the capital. So I'm glad you're mentioning this partnership with Palantir because it is transformative for us. Really, the relationship here and the value that we're seeing lasts much, much longer than the first cascade, the first centrifuge. I mean, we're viewing this as sort of a business-altering type structure in terms of our unit cost and our ability to meet our lead times to market and beyond.

So layering Palantir's AI platform really provides us with real-time data and empowers our team, the Centrus team to take more meaningful role in the project management. It allows us to add efficiencies across our work streams, which obviously can lead to additional cost mitigations and will allow us to bring in lead times. So for example, these efficiencies can help us reduce fuel supply chain risk and could, as I mentioned earlier, reduce execution time and costs.

I'll turn it over to Todd to weigh in on the capital question.

Yes. Thanks, Nick. So just as a reminder, you're correct, we have $1.9 billion on the balance sheet that we can deploy. But we also have the $900 million HALEU award that will be ratably -- come into us on based on milestones payments.

So essentially, the way we look at is we have about $2.8 billion currently. Our focus is to always look at many pools of low cost of capital. This may involve the NNSA, third-party investment, foreign direct investment and then also continuing to be opportunistic in the market when we see fit. We don't feel any pressure to be actively out there raising capital in a down market. We did not participate in the ATM program in the first quarter, even though we have one that is open. And that was that we just didn't feel it provided the right shareholder value, and we believe there are better low cost of capital options out there, 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. What we're seeing is advanced reactor companies are pushing through the markets also with the DOE and NRC licensing. And a lot of them are using HALEU and TRISO. So I'm just wondering if you could update us on where you see the most SWU value in LEU or HALEU? And has anything changed how you're looking at that strategically?

Mark, actually, I'm glad you brought this topic up. This is a great strategic question about our general market, and it's something that we spend a great deal of time discussing internally and paying very close attention to as to where the market is going. As you know, we are preparing expansion of both LEU and HALEU. We are dealing with both sides of the house in terms of customers in addition to national security as well.

So we have a pretty broad perspective of the market. So you are correct. The market is actually starting to mature now on the advanced reactor side. If you and I had this conversation a couple of years ago or even, I don't know, 8 months ago, I would have said that a lot of the advanced reactors are not fully thinking or focused on fuel just yet. Their attention is more to the administrative side of the licensing. Through the executive orders, through some of the emergency type activities that have been put by the Department of Energy and quite frankly, by the entire administration into nuclear, I would like to think also fueled by some of the crisis we're seeing in generally energy markets, we're now seeing a lot of the reactors get to a phase where they are starting to seriously procure and commit to fuel.

Now that's a big step. That is a significant purchase for all of them. Obviously, we're in participation with the vast majority of them. The fact that the Department of Energy has selected Centrus for the HALEU award, puts us really in the front position, in the most credible position. The fact that we have a cascade operating, cements that position.

And to your specific question about where would the majority of the value be derived from HALEU or LEU, as I read your question, just from a physics perspective, when a company plants their initial core, they would -- they'll be thinking about feed and they would be thinking about HALEU. Feed in most cases, would come in an LEU form. And just from a physics perspective, there is a significant amount of LEU feed that would be required to create a single unit of HALEU. So from a volume perspective, the value comes from LEU because LEU drives a lot of the volume. I believe from just generally margin and market being ahead of everybody else, HALEU has a lot of the advantages for us.

So we're deriving value from both is really the answer in different ways. But the good news -- and just to end it on the sentiment, the good news is we're seeing almost across the board, all the reactors that were in different states of development are now actually moving towards significant and serious committed fuel procurements.

That's great. I appreciate all the detail, Amir. Talking about your ongoing conversations with SWU offtakes, I'm wondering if you can give us an update on the engagement with hyperscalers or traditional utilities and IPPs. Has one been more aggressive recently than the other? And I'm also wondering if -- how the war in Iran and the constrained oil markets has factored in? Has that put any more urgency into the type of conversations?

Good question. Who is more aggressive from our perspective? Look, I'll tell you this. The reactors that are operating have very seasoned fuel buyers. They have been through many markets. They have been through up markets, down markets. They know how to buy fuel, not to say that others don't. They've been through these cycles before. And you can't always tell as to what's driving their buy. Is it a strategic buy? Is it sort of a desperate need? We don't know, and we don't really get into these types of questions. Every utility has their own strategy and usually, they execute very well on it.

And we're kind of seeing a steady flow of requests for pricing, requests for quotations on that kind of business. And as I mentioned earlier, we're still seeing the prices trend up, whether it's for midterm or long-term SWUs in that market. So I would not classify this as aggressive behavior, but definitely strategic behavior because all of these utilities want to cover their bases, and they will not take any undue risk in procuring fuel. I think price is important to them, but obviously, it is secondary to security of supply.

On the other hand, the hyperscalers are getting into this market now. They're informed. I think they're hiring people or consultants that help them decide on how they want to handle strategically fuel purchases. And I think they do a good job at it. And the earlier comment that I made is, it is true. I mean, we're seeing fuel buying activities and a lot of attention being put to those activities.

I would give the upper hand to hyperscalers when it comes to trying to go faster and stronger just because fuel represents, in my view, a fairly significant question mark and uncertainty about their reactors. They want to cover that risk as early and as thoroughly as possible, especially as they progress through funding and capital raising for their projects. This is not a risk they should have on their books, and they don't want to have it on their books, and we fully understand it and work very closely with them to make sure it is not. So we're seeing them becoming more interested and more importantly, more able to commit.

Your question about the global conflict, I mean, this -- on a macro level, it highlights the need for governments to diversify away from fossil fuel. I mean we know it's still an important source of energy and will continue to be an important source of energy. But just like in history showed us many times before, diversifying to nuclear gives you a huge lever in conflicts like this, whether it's politically or whether it's economically. So we are seeing it being a very helpful parameter for decision-making for new nuclear build.

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

So you mentioned that the -- we know the NNSA had notified you of intent to award and you responded to it. So I'm just curious, I mean, now what would next steps be? I mean, maybe it's something that's very difficult to answer, but expectations on kind of how that plays out? And then can you just remind me what the potential amount of that funding source would be?

Eric, thank you for the question. Starting with just a general statement, we are in a procurement cycle, and therefore, we're very limited by what we can say as I mentioned on the call. We can confirm that we have submitted our response to the NNSA's request. And again, as a general statement, we stand ready to support our national security mission in any way required. I mean we know the requirement, demand is real. And there's not a whole lot more that I can say about that. We're going to let the NNSA and the government drive the announcements and the information released to the public on this.

To your question about quantities and things of that sort, again, this is not something that we have disclosed. I'm going to let the NNSA and the government drive that information to the public.

And your next question comes from Bill Peterson from JPMorgan.

You mentioned in the prepared remarks and there was a press release in March about a JV or potential JV with Oklo for deconversion. Can you discuss your strategy around deconversion more broadly? Are you looking for additional kind of 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?

Yes. Well, Bill, thank you for the question. Let's maybe start from just some of the very basics so that listeners can understand what's driving us to think the way we do. First of all, just from a market perspective, there is a hole in the fuel cycle right now when it comes to advanced reactors and particularly sort of HALEU-type fuels.

Deconversion of uranium hexafluoride or UF6 to whether it's an oxide form or metal form, more predominantly metal form, that process does not exist commercially. And so this is the reason why, obviously, the Department of Energy is getting ready to make an award, and they have all the drivers and all the intention to help industry stand up that part of the fuel cycle, which, again, is critical to standing up the entire fuel chain supply for advanced reactors.

But we also are taking a very proactive role because we see an opportunity. We see a commercial opportunity and the commercial opportunity is really highlighted by this partnership with Oklo. Oklo is not only a potential participant in here, but they also are a large offtaker and customer. I mean this is the fuel form that they will be using. This is the fuel form that they require.

Most importantly in the strategy is if you were to have a blank sheet of paper type design and you were to ask yourself, where and how does it make most sense for me to construct my deconversion facility, you will automatically arrive at a conclusion -- for many parameters and many factors, you will arrive at the conclusion that it makes the most sense to put my deconversion together with enrichment.

Now it's a lengthy conversation why that is, and there's many important factors that feed into it. Efficiency is one of them, security is another one. But we believe that we're driving towards something that will provide great efficiencies to the market. From our perspective, it allows us for potential vertical integration and further differentiation of our enrichment of HALEU.

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 just going faster than expected? And then if I could kind of sneak in a follow-up on that, taking an early look at 2027, do you foresee hiring needs being similar, lesser or greater than 2026?

Thank you for the question. What I would say is, right, hiring in today's world, there's a number of components that we have to look at. One is, can we source employees from the local community and area? Do we have to look nationwide? So how quickly can we bring those employees on board? How quickly can we get them? As a reminder, at our facilities, you have to be a cleared individual, so you have to go through security, which is part of our uncapitalized cost. And then because we do one-of-a-kind work, we have to train these individuals.

The rate at which we were able to source employees in both Oak Ridge and in Piketon in the local communities was actually stronger than we anticipated, which allowed us to accelerate our hiring curve, and that allows us to move quicker than we anticipated. If we have a strong workforce, then we're able to not have any delays. Obviously, human capital is critical to our build-out. So we see this as a very strong positive. And the sooner we get people cleared, trained and working towards our project, it allows us to move swiftly. But obviously, we want to be cautious in our approach. We want to be -- make sure that we have critical execution throughout the project.

And so what I would say going forward is, look, where we are finding people now is unions, local shops, where we're going down to universities, all different areas to build up our workforce and the rate at which we hire will dictate how quickly we can get those people on board. I would say that for 2027, our growth is always going to be tied -- or we have our base case, but we can accelerate based on additional potential offtake that we see, or customer demand will increase our rate that would require additional human capital.

Lawson, this is Amir. I want to add something to Todd's comment. I think this is a really important topic. As you know, we are doing something here that historic, which is not only building the first enrichment facility, but we're also building the first centrifuge manufacturing facility that's American-owned, American technology, which is a great milestone for us as a nation and obviously, for the industry as well.

A lot of what's driving this project, we're actually driven to intersect the demand curve that up until now has been trending to increase in size and is always moving in. And so as we evaluate the project, project spend and how fast we go, it is always driven by the need to meet this demand that we're seeing, that is real. Some of it is already signed into contracts. Some of it is in discussions. But to my earlier comments to some of the analysts' questions, this is a developing and fast-moving changes in how we view the project.

Your next question comes from Jeff Grampp from Northland Capital Markets.

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

Sure. Well, thanks for the question. And I know we talked a little bit about it, but I think that I would like to talk about it a lot more, if I can, because I think it is really a critically important item for us.

So what I mentioned earlier is when you stand up a manufacturing facility like we're doing, there's a lot of challenges in doing that. Obviously, there's the technological aspect of it. You have the suppliers that you need to line up as part of your supply chain. But what really holds everything together and lines up the efficiencies is the informational system and our ability to make decisions quickly and with high fidelity.

What Palantir does and what their AI platform allows us to do is it actually provides us with real-time data, which is critically important for a company like ours that is standing up a manufacturing facility and handles hundreds of suppliers. I mean that is a critically important aspect of it. And we're seeing huge and meaningful reduction in cost in project management. It allows us to shorten our lead times and cycle times.

I mean, so far, we've already declared $300 million in cost savings. And as I said on previous calls, I mean, we're not stopping there. We're continuing to push and expect more, and I believe we will see further developments on this front. So I guess the quick answer without getting into a lot of detail is it allows us to manage information, allows us to make decisions and really introduces efficiencies at that level.

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

Congrats on the progress. And thanks for all the color you're providing. Just a quick one on -- in the prepared remarks, I think I heard that the SWU prices were up around 52%. At the same time, SWU costs were also up around 45%. So that clearly gives you a gross margin boost a little bit year-over-year. Should we expect gross margins from SWU increasingly positive going forward?

Yes. So the rate at which SWU prices move, obviously, it has to do with our contractual mix. And we are -- we can't comment on our actual contracts and the margin associated with that. But depending on when shipments take place as to when we record revenue, when we record -- when we have shipments come in, in the cost. So what I would always point to is look at this on an average basis over several quarters. That's why we continue to emphasize that we want to talk about this on a TTM.

We have seen positive movement in SWU prices. That provides additional options within the market. We have a contractual mix that allows us some flexibility on our supply sourcing. And some of that has to do with our increased revenue guidance that we've -- for 2026. And also, it allows us to have better line of sight for additional offtake with SWU pricing in the outer years.

Understood. And Todd, thanks for doing the 12-month -- trailing 12-month metrics, that helps us understand better the general health of the company. On that line, just a follow-up. Should we expect uranium sales in the second quarter? In the recent history, at least, they have tended to concentrate in the second and fourth quarter. So given that you're providing TTM -- highlighting TTM metrics, should we expect 2Q to have uranium sales?

We can't provide any guidance on specific sales. What I would say is uranium sales are opportunistic in the market. They can be -- happen occasionally throughout the year. But right now, we can't make any comment as to when those sales are going to take place or if they are going to take place in any future periods.

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.

Greetings. Welcome to Centrus Energy Fourth Quarter and Full Year 2025 Earnings Call.

[Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to Neal Nagarajan, Senior Vice President, Investor Relations. Thank you. You may begin.

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 fourth quarter and full year 2025 ended December 31. Today, we have Amir Vexler, President and Chief Executive Officer; and Todd Tinelli, Chief Financial Officer, Senior Vice President and Treasurer.

This conference call follows our earnings news release issued yesterday. We filed our report for the fourth quarter and full year on Form 10-K 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 include on this call today may be considered forward-looking information that involves risk and uncertainty, including assumptions around 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. Finally, the forward-looking information provided today is time-sensitive and accurate only as of today, February 11, 2026, unless otherwise noted.

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.

Thank you, Neal, and thank you to everyone on today's call. 2025 was a milestone year for Centrus, punctuated by December announcement to begin commercial centrifuge manufacturing to address the commercial LEU market and our substantial backlog. Shortly thereafter, in January, the Department of Energy selected Centrus for a $900 million HALEU enrichment award.

Our build-out officially ushers in America's return to domestic commercial uranium enrichment, with a derisked, deployment-ready technology that can service both commercial and national security needs. Our first new cascade of centrifuges is expected to come online in 2029, with subsequent cascades to come thereafter. We are continuing to identify and implement opportunities to reduce both our lead time and the unit cost. This effort is being implemented day 1.

But first, let me turn to our results. There can be a significant amount of quarterly variability in our results due to the nature of our business, and we therefore believe our annual results are more indicative of our progress.

For the full year 2025, we achieved $448.7 million in revenue, a gross profit of $117.5 million and a net income of $77.8 million. The majority of our current revenue is derived from our LEU business, and during the third quarter, Centrus received waivers from the Department of Energy to continue to import LEU for all currently committed deliveries to U.S. customers in 2026 and 2027. This announcement provided greater clarity and helps derisk that side of our business.

Now turning to our future commercial enrichment business and our go-forward roadmap. Our base case build-out will address our substantial commercial LEU enrichment backlog of $2.3 billion and the requirements to the Department of Energy under the HALEU enrichment award. Considering all factors, our base case will include 12 metric tons of HALEU. Further capacity additions will be progressive and depend on both our offtake demand and our capital resources. Importantly, I am pleased to announce that as we continue to pursue additional low-cost capital, our base case build-out is expected to be sufficient to reach our nth-of-a-kind cost.

We initially launched our commercial centrifuge manufacturing to address the growing demand for commercial LEU, where we have time to market advantage. Demand for LEU from existing and growing electrification needs will only continue to increase ahead of any AI data center advanced manufacturing or hyperscaler demand, while LEU supply is rapidly becoming more constrained. Near-term domestic LEU demand alone is set to increase by approximately 6.5 million SWUs, stemming from Russia's exiting the market and the additional demand from restarts, uprates and new pledged reactors. The LEU pricing curve, which has experienced a 24% compound annual growth rate from 2019 to 2025, is an indicator of this increasingly constrained market and pent-up latent demand.

National security is another potentially important market. We are currently the only production-ready option for the national security establishment. And in the fourth quarter, we were notified by the National Nuclear Security Administration of its intent to sole-source certain uranium enrichment activities from Centrus. This could represent another source of low-cost capital.

Speaking of funding, the $900 million HALEU enrichment award has the potential to exceed $1 billion, and still needs to be finalized through negotiations. This potential funding, which comes through a procurement and involves neither debt nor equity, would serve 2 important points. First, it would be another pool of low-cost capital, and we are grateful to our government for recognizing the importance of Centrus to the market. And second, it is supporting the 12 metric tons of HALEU capacity ahead of a commercially-viable advanced reactor market.

We are positioned to capitalize on these opportunities because we have been laying the groundwork over the previous 12-plus months. More specifically, these operational efforts include: First, our November 2024 supply chain readiness program. Second, successfully completing phase two of the HALEU operations contract by contractually delivering 900 kilograms of HALEU UF6 to the Department of Energy and producing well over 1 metric ton of HALEU UF6 for the department as of end of 2025.

Third, adding approximately $300 million to our $2.3 billion contingent LEU backlog and making strong progress towards removing these contingencies. Fourth, announcing that we are creating more than 300 new jobs at our Piketon facility, and then hiring more than 50 of those new hires in Q4. In 2025, we added over 140 employees combined in Piketon and Oak Ridge.

Fifth, initiating design work on our training, operations and maintenance facility in Piketon, which will include the significant renovation and rehabilitation of existing facility. And sixth, continuing to identify and implementing opportunities to reduce our lead time and unit cost, a day 1 activity.

Likewise, from a financial standpoint, these efforts include: First, uplifting to the New York Stock Exchange to attract a more diversified set of institutional investors. Second, validating foreign direct investment is another potential source of low-cost capital by signing an MOU with KHNP and POSCO International. And third, raising capital to support the build-out, ending the year with a cash balance of approximately $2 billion. Todd will discuss this in greater depth shortly.

Moving forward, we will continue to capitalize on our time-to-market advantage in the domestic LEU market and our first mover advantage in the global HALEU market.

Operational excellence is nonnegotiable. Our first cascades time line includes a significant amount of time, effort and investment at both our facilities to build on our operational momentum. And as part of this effort, it is with great pleasure that I'm able to announce that we just recently entered into an agreement with a best-in-class partner, Fluor, who will serve as our primary EPC in Piketon.

In an effort to provide stakeholders with greater clarity, we are prepared to provide the following full year 2026 guidance. From a financial perspective, for the year, we are providing the following guidance. Total company revenue of $425 million to $475 million and total capital spend of $350 million to $500 million.

And from an operational standpoint, we are providing the following guidance. First, finalizing contracts with our most critical partners, with a focus on those who will require long-lead procurements, significant scale items and complex parts. These will be suppliers for either parts or equipment at either facility.

Second, workforce additions across both facilities to total at least 150 net new employees. At least 100 new employees in Oak Ridge or roughly 25% of the announced 400, and at least 50 new employees in Piketon. Jobs across both locations will include engineers, assembly technicians, maintenance technicians, enrichment operators, lab technicians, project management and project controls.

And finally, and this will be a big achievement from a design perspective, we will be releasing our first Certified for Construction work package in Piketon. This is where the design for a key plant system has completed necessary reviews and is formally signed and stemmed for used by construction crews. We additionally expect to have the majority of our construction partners mobilization completed in Ohio by the end of the year.

We expect to be able to provide more details as we continue to make progress, including a time line for the completion of our first centrifuge produced by our commercial scale manufacturing process. This will be another groundbreaking milestone as it represents the supply chain coming together and its ability to produce a centrifuge.

With that, I will turn the call over to Todd, and then come back with some final thoughts. Todd?

Thank you, Amir, and good morning to everyone on today's call. Let me first walk you through our results, before providing more detail on some of what Amir discussed as well as our financial guidance.

2025 was another great year of execution both on the operational and financial fronts as we fortify and prepare the business ahead on this industrial build-out. Total revenue for 2025 was $448.7 million, a $6.7 million or a 1.5% increase over full year 2024.

The LEU segment generated $346.2 million in 2025, relatively flat versus $349.9 million over 2024 levels. Importantly, while uranium revenue decreased 54% year-over-year to $55.6 million, due in part to a large onetime uranium sale in the fourth quarter of 2024, SWU revenue increased 21% year-over-year or $51.9 million, driven by a 23% increase in the volume of SWUs sold.

The Technical Solutions segment delivered $102.5 million in 2025, an increase of $10.4 million or 11% over 2024 levels, driven by a $10.5 million increase in the revenue generated by the HALEU operations contract.

Total gross profit for 2025 was $117.5 million, a $6 million or roughly 5% increase over 2024 gross profit. The LEU segment's full year 2025 cost of sales decreased $21.3 million or 8% to $234.7 million. The 2025 LEU segment gross profit increased $17.6 million or roughly 19% to $111.5 million in 2025, driven primarily by an increase in the volume of SWUs sold and the increase in the margin on SWU sales due to contract and pricing mix, partially offset by a decrease in uranium gross profit.

The Technical Solutions segment's 2025 cost of sales increased $22 million or 30% to $96.5 million, driven primarily to a $22.8 million increase in costs incurred under the HALEU operations contract, partially offset by a decrease in costs related to other contracts. That segment's 2025 gross profit decreased $11.6 million or 66%, to $6 million, due to the aforementioned factors.

Phase two costs incurred subsequent to November 2024 have not been subject to a fee as this portion of the contract remains undefinitized and is subject to final resolution. Importantly, we had a schedule and permitted fourth quarter shipment from Russia that did not leave as expected due to a shipping issue. That shipment, which was pushed out to the first quarter of 2026, would have driven down the average cost per SWU and positively impacted gross margin and net income.

In addition, in the year, we experienced non-reoccurring G&A costs of $3.6 million and $1.1 million related to voluntary tax withholdings and CFO transition costs, respectively. To provide a better picture of our earnings and account for potential variances and future shipments as well as our quarterly earnings fluctuations, next quarter we will begin to present financials in both a quarterly as well as a trailing 12-month format.

Turning to our backlog. As of December 31, 2025, the total company backlog stood at $3.8 billion and extends to 2040. The LEU segment backlog was approximately $2.9 billion. This includes future SWU and uranium deliveries, primarily under medium and long-term contract fixed commitments, as well as the $2.3 billion in contingent LEU sale contracts and commitments with $2.1 billion of the total under definitive agreements and $200 million of the total subject to entering into definitive agreements.

Our Technical Solutions segment backlog is approximately $900 million as of December 31, 2025, which includes funded amounts, unfunded amounts and unexercised options. The options relate to the company's HALEU operations contract.

Turning to our capitalization. In 2025, we raised gross proceeds of $533.6 million through 2 ATM programs. We raised gross proceeds of $390.4 million through our recently announced November 2025 ATM program at an average of $269.21 per share. Combined with our cash generated by our business and oversubscribed August convertible senior note issuance, we ended the year with an unrestricted cash balance of $2 billion.

And as Amir noted, we were recently selected for the $900 million HALEU enrichment award, which could increase to just over $1 billion with $170 million of additional options. We are still in the process of negotiating our final contract with the DOE, which will be based on milestone payments. With our funding and our line of sight to customer demand, as of now, we plan to have HALEU production online before the end of the decade and to produce 12 metric tons of HALEU per year thereafter.

Our war chest provides Centrus with the ability to begin funding our operations to stand up our supply chain while making the necessary investments in our facilities, machinery, partners and workforce as part of the build-out. Going forward, we will continue to prudently shape our balance sheet to support this large first-of-a-kind industrial build-out of one-of-a-kind centrifuge technology that can meet both commercial and national security requirements. We believe we are sufficiently funded to meet our near-term capital requirements, and our current LEU backlog and potential HALEU enrichment award should allow us to meet our milestone of reaching nth-of-a-kind cost.

We are simultaneously pursuing other avenues of low cost of capital to continue to strengthen our capital stack, including national security-related funding, future prepayment or offtake arrangements and potential foreign direct investments. Maintaining a healthy cash balance provides additional flexibility to negotiate with any of these potential partners while also moving us to removing the contingency around our LEU enrichment backlog.

Turning to guidance. As Amir discussed, we are providing both financial and operational guidance. Let me dive deeper into the financial points he discussed.

For 2026, we are providing the following financial guidance. Total company revenue of $425 million to $475 million, with the midpoint of $450 million representing flat year-over-year growth. And total capital deployment of $350 million to $500 million. 2026 capital deployment will also include prepaid expenses that do not appear as CapEx, but impact free cash flow as we invest in our partners as they scale up ahead of our production.

With that, I will turn it back to Amir.

Thanks, Todd. Our strategy to build both LEU and HALEU capacity is a clear signal to potential customers that Centrus has achieved an important inflection point and is prepared to meet future enrichment needs. Absent Centrus, the market must rely on the duopoly of state-backed competitors with a shared signal point of failure centrifuge manufacturing risk. Providing Centrus with orders derisks customers' businesses and provides us with the clarity needed to stand up our operations.

On the LEU side, the technology was already proven, and so too now is our role in the LEU enrichment supply chain. The projected gap between supply and demand for both domestic and foreign utilities continues to widen. In the U.S., we continue to see signs from the administration, through regulators and through utilities, that demand will only increase as they seek to unleash American energy dominance and energy security.

On the HALEU side, we are now going to build out capacity and capitalize on our first mover advantage. We're already in conversation with hyperscalers for future prepayment or offtake-like agreements, another potential source of low-cost capital financing. Here, we demonstrate that we expect to have at least some capacity ready before the end of the decade and ahead of the advanced reactor market maturing. And for our government, we thank you again for the award and look forward to supporting the national security establishment to our fullest ability.

We are embarking on a vital industrial build-out to support the global nuclear industry's growth and America's energy independence. We look forward to updating you with more as we embark on this exciting new step.

With that, I will turn the call over to the operator for questions. Operator?

[Operator Instructions] Our first question is from Ryan Pfingst with B. Riley Securities.

Maybe we could talk about the time line 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. Could 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?

Ryan, 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. And so the -- as I've stated earlier in the remarks, continuous improvement and the ability to reduce unit cost 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 announcement related to that. All this to say that being able to go more efficiently, reducing unit cost and going faster is a priority for us, as I said, day 1, and we're executing on it in parallel. And stay tuned for more updates as we continue with the process.

Our next question is from Rob Brown with Lake Street Capital Markets.

Congratulations on all the progress. On the commercialization side of the -- LEU commercialization, is that capacity ramp sort of similar time line with the HALEU ramp? And when does that kind of reach a point where you have that backlog turn from contingent to sort of final?

Thanks for calling in and for the question. Let me just maybe repeat the question and 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?

Yes, correct.

Yes. 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, we have the intention and the plan and we're progressing towards fulfilling our commitments. This backlog of LEU commitments that we've announced, it's 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.

Our next question is from Eric Stine with Craig-Hallum Capital Group.

So maybe just on the CapEx, I appreciate the CapEx guidance for '26. If you could talk about, if possible, maybe the linearity of that CapEx expected throughout the year. And then also, as we think about the number that you gave, is that kind of a representative number on an annual basis as you work towards that initial 2029 operational date? Or I mean, is this a number that is more representative, it's the first year and you likely -- it either increases from there or is lower going forward?

Yes. What I would say is, looking past 2026, obviously, our CapEx spend manufacturing process gets more linear. Currently, right now, this -- 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 Piketon 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, any time that we see an adjustment, we'll reflect that in the guidance and we'll try to keep you -- that'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 shakes out to be from a plant standpoint at both manufacturing and Piketon, and we'll work towards fine-tuning that guidance. But initial year does include some prepayments and long-lead procurement.

Our next question is from Jed Dorsheimer with William Blair.

Congrats on the progress. I guess for my one question, just the -- achieving the nth-of-a-kind, I'm just wondering if I'm reading into this correctly. I had always assumed that maybe it took the 3.5 million SWU to achieve that. And it sounds like that's not the case, that you can achieve that target with less capacity. 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.

Yes. Jed, thanks for calling in. Good question. The nth-of-a-kind move will be achieved way before the 3 million SWUs, 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 nth-of-a-kind 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 cost. And so I will -- I'll stop there. But I believe I answered your question. And like I said, the fact that we're crossing the nth-of-a-kind cost is a big announcement and a big achievement for us.

You did.

Our next question is from Joseph Reagor with ROTH Capital.

Most of my questions have been answered, but just to kind of touch on 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 given domestically you guys should be first to market, that there isn't really going to be supply in 2028, 2029 domestically?

Yes. 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 HALEU 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. We're not -- 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 the form of intense discussions and discussions around HALEU. As you know, we're bringing HALEU supply ahead of advanced reactors being commercially viable. And so that creates a lot of demand as well. Just as a reminder, HALEU is not only enrichment of HALEU; it requires a significant enrichment of LEU and LEU capacity as well. So you have a force multiplier there that will only kind of 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 would most definitely will have to start from the utilities and the customers themselves pointing it out as a problem.

Our next question is from David Choe with UBS.

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 SWU prices in line with some of the indices.

Yes. 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, we did have 1 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 face 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 a lot of our supply is contracted, both from 2 foreign sources. We feel comfortable with our -- on our supply side. Our goal is to maximize the margin on the revenue side and sales to our customer.

Our next question is from Jeff Grampp with Northland Capital Markets.

My question is regarding the time line that you guys have put out to initial enrichment capacity. I'm curious, are there more important milestones or roadblocks that would more tangibly derisk the time line 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 derisking that time line.

Yes. 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, we do 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 that -- 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 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 HALEU, 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 a huge demand for LEU as well. And so 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.

And 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. So 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. And so 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.

Our next question is from Vikram Bagri with Citigroup.

It's Ted on for Vik. Could you talk about the HALEU production target that you have? On a metric ton basis, it looks like it's roughly enough for an initial load for 1 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?

Yes. 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 [ requires ] or what they may be.

We 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 wisely 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 2 things to you, that, number one, we did say that it is our full intention to have both LEU and HALEU 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 2 fronts as well.

And so there's 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 be -- to get as much offtake as possible and then 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.

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?

Yes. 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 2 foreign sources, and that allows us to get comfort around our guidance and secured that we have everything in place, both waivers and, as I said, normal shipping channels to move forward.

Our next question is from Stephen Gengaro with Stifel.

I was curious what you could tell us on this front. When we think about the CapEx you're 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 an exact number, but like how do we think about SWU for HALEU and LEU? And just in your mind, like how does that dynamic play out?

Yes. Good. Thanks for that question, Stephen. Thanks for calling in today. I think it's an important topic to discuss because we talk a lot about cost, which is a very important part of the project and the elements that we're considering. Likewise, the SWU prices out there and our ability to contract for higher SWU prices or more favorable SWU prices is a major consideration for us. So I think the question of how do you see the SWU prices sort of momentum in the market, I think, is something we discuss and debate and monitor very closely internally.

The SWU prices, in my view, are going to adjust down only if 1 of 2 things happen. Well, if 1 of 2 things happens. 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 SWUs. So there is really nobody out there that is building what I'd call just-in-case or ready-to-serve SWUs 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 SWU prices. And so that obviously strengthens our business case. That strengthens our investments and our case for our shareholders. And that really is how I view the situation.

Now this doesn't even include some of the some of the extra and bonus and opportunities that are out there. So if advanced reactors become a dominant force in the market, somebody comes out and announce a major build of advanced reactors, that is going to apply even further pressure on not only HALEU, and as I mentioned earlier, on LEU SWU capacity as well. I think that that would be a big upside and a big opportunity as well.

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.

Our next question is from Sameer Joshi with H.C. Wainwright.

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 this 10-year contract to be really be 5-year contract and like to get the money up front-loaded?

Thank you for calling, and a 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.

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 SWUs that we're selling is what I call expansion SWUs. These are SWUs that we're investing capital in. And 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.

Our next question is from Bill Peterson with JPMorgan.

Amir and Todd, thanks for all the details, including the guidance primers for the year. I was wondering if you can double-click on what opportunities you have to pull in the 42-month time frame you spoke of, as well as, I'd say, to build out more broadly? I guess what I'm getting at is, 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 earlier, government approvals related to national security?

Yes. 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 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 are 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 time line 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 time line in deploying capital to meet our manufacturing rates.

Our next question is from Lawson Winder with Bank of America.

Amir and Todd, thank you for today's update. I'd like to also say congratulations on the $900 million to support your HALEU 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 HALEU?

And maybe put another way, how much of your LEU production will be captive to your HALEU 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 HALEU feed, what are the options, particularly given that the Russian supply will be going away after 2028?

Good question. I'm going to answer your question very generally, and please let me know if there is 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 HALEU depending on the contract type.

For our HALEU customers, just from general terms, it would be my intention to would want to optimize the SWUs that we provide, which means that I would try to have a contract that includes providing HALEU 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 play, but it is our intention to be able to provide both LEU enrichment and HALEU enrichment to the optimal and maximum capacity that we can.

And to your second part of the question, if, for example, hypothetically speaking, if you have a HALEU contract for which you don't have sufficient LEU feed, I mean, that usually, contractually speaking, is not an issue. There is 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.

We have reached the end of our question-and-answer session. I would like to turn the conference back over to Neal for closing remarks.

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.

Good morning, ladies and gentlemen, and welcome to the Centrus Energy Third Quarter 2025 Earnings Call. [Operator Instructions] Please note that this event is being recorded. I will now hand you over to Neal Nagarajan.

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 of the third quarter 2025 ended September 30. Today, we have Amir Vexler, President and Chief Executive Officer; and Todd Tinelli, Chief Financial Officer.

This conference call follows our earnings news release issued yesterday. We filed a report for the third 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. Finally, the forward-looking information provided today is time-sensitive and accurate only as of today, November 6, 2025, unless otherwise noted.

This call is the property of Centrus Energy. Any transcription, redistribution, retransmission or rebroadcast of the call in any form without the expressed written consent of Centrus is strictly prohibited.

Thank you for your participation. And I'll now turn the call over to Amir.

Thank you, Neal, and thank you to everyone on the call today. We made significant progress this quarter in strengthening Centrus to capitalize on our forthcoming growth opportunities while continuing to successfully operate our broker trader business. This includes hiring Todd Tinelli to succeed our former Chief Financial Officer, Kevin Harrill. I would like to again thank Kevin for his work to help improve and bring Centrus forward. Todd brings a wealth of knowledge and expertise to Centrus, including more than 20 years of experience in the energy industry. He has been part of a number of large industrial expansions and capital raises, precisely and not coincidentally the tasks we're facing now. I welcome Todd to the team.

Our progress to date includes our internally focused operational preparations, the growing momentum and discussion we are having with potential future customers and increasingly strong signals we see from the marketplace. All of these have strengthened our outlook and culminated in, one, our event in Ohio announcing our hiring plans ahead of our planned expansion; and two, today's capital raise announcement.

But first, let me turn to the quarter 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 progress. In the third quarter, we achieved $74.9 million in revenue, a gross loss of $4.3 million, and operating loss of $16.6 million and a net income of $3.9 million. 2025 year-to-date net income was $60 million compared to $19.5 million during the same period last year. Todd will discuss the results and their respective drivers in more depth shortly.

Turning to our broker trader segment. During the quarter, Centrus received waivers from the Department of Energy to continue to import LEU for all currently committed deliveries to U.S. customers in years 2026 and 2027. This announcement provides greater clarity and helps to derisk that side of our business.

Now turning to our future commercial enrichment business. As a reminder to our listeners, our proposed public-private partnership model envisions Centrus potentially securing funding from a number of sources. On the public side, this includes potential task order awards under our LEU enrichment contract or under our HALEU enrichment and deconversion contract, which altogether represent opportunities to obtain a portion of the $3.4 billion appropriated by Congress or potential national security awards.

As we have previously stated, we hope to capitalize on any potential public funding made available by the DOE as it will create the lowest cost of capital structure. As the only U.S.-owned company with a proven technology, we feel we make a strong case. The private capital would then come in multiple forms, including partnerships for our balance sheet. Furthermore, we also have other business models that address a variety of funding scenarios. Ahead of the DOE's LEU and HALEU awards, we continue to pursue our readiness initiative to strengthen our investment case and to prepare ahead of our industrial expansion.

First, in the quarter, we closed an oversubscribed and upsized convertible senior note transaction on favorable terms, increasing our unrestricted cash balance to over $1.6 billion, in line with our strategy to optimize our capital structure and strengthen our position ahead of government announcement.

Second, we continue to execute on our supply chain readiness program announced last November that is laying the groundwork for future large-scale deployment of our technology. Our September Ohio jobs announcement is another concurrent preparation step.

Third, we continue to successfully operate our HALEU cascade under our contract with the DOE and reached a milestone of 2 full years of continuous uranium enrichment this past October. Our technology has been proven with over 3.9 million machine hours. It can meet the full range of America's commercial and national security enrichment requirements, including, but not limited to, LEU, LEU + and HALEU.

Fourth, we are seeing growing momentum in our engagements with key stakeholders, including potential external investors. In August, we signed an agreement with KHNP, the third largest operator of nuclear assets in the world and POSCO International for a potential investment in Centrus' enrichment capacity. The key development is an example of how private sector capital could support our potential expansion.

There is a large and growing opportunity set for these types of partnerships that could come from foreign countries and utilities to SMR developers and hyperscalers, all of which are looking to secure fuel for their respective ambitions. Our strong progress and these developments have led us to our 2 most recent announcements. First, at our September event alongside Governor DeWine, Senator Jon Husted and Congressman Taylor of Ohio, we announced our plan to hire on a large scale ahead of our plant expansion. These are important jobs to an economically depressed area that holds significant talent and is but one example of the value that comes from investing in an American company that is creating American jobs.

Second, this morning, we announced we are launching a $1 billion at-the-market program. Given the market signal and our progress, we believe now it is an appropriate time to raise these funds in this form ahead of our proposed build-out.

With that, I will turn the call over to Todd to walk through the numbers. Todd?

Thank you, Amir, for that welcome, and thank you to everyone on today's call. First, I'd like to thank Amir for that kind welcome. My first 100 days on the job have been exciting and have reinforced my strong belief in Centrus platform and substantial upside potential. I have been impressed with its unique world-class technical capabilities, the operations and its assets already in place, a strong position in the market with high barriers to entry and the talented workforce. Looking ahead, I will be focused on appropriately position our balance sheet and potential partnership network to sufficiently capitalize the company for our future needs and implementing best practices across our operations to support our potentially large expansion.

Let me first walk through our results, which were in line for our internal projections and reflected the typical quarter-over-quarter shift in contractual mix that can transpire based on our customer orders and deliveries. Total revenue for the third quarter was $74.9 million, an increase of $17.2 million or 30% versus the same quarter last year. The LEU segment generated $44.8 million in the third quarter, an increase of 29% or $10 million compared to the same quarter last year, driven by an increase in the volume of uranium sold, partially offset by a decrease in the average price of SWU sold.

The technical solutions segment delivered revenue of $30.1 million in the third quarter, an increase of $7.2 million or 31% over Q3 2024 results, driven by the sale of LEU to the DOE. Centrus generated a third quarter gross loss of $4.3 million compared to a gross profit of $8.9 million in the same period last year. The LEU segment cost of sales increased $23.0 million to $52.6 million in the quarter, primarily driven by an increase of volumes of uranium sold, partially offset by a decrease in the average cost of SWU sold. Cost of sales in the CTS segment grew $7.4 million to $26.6 million in the quarter, primarily attributed to the $8.5 million in cost increases under the HALEU operations contract.

Centrus generated net income of $3.9 million in Q3 compared to a net loss of $5 million in the same period last year. Excluding nonrecurring costs associated with the CFO transaction, Q3 2025 net income was $4.6 million. 2025 year-to-date net income was $60 million compared to $19.5 million during the same period last year. As of September 30, 2025, the total company backlog stood at $3.9 billion and extends to 2040. The LEU segment backlog is approximately $3 billion. This includes future SWU and uranium deliveries primarily under medium- and long-term contracts with fixed commitments as well as the $2.3 billion in contingent LEU sales commitments. With $2.1 billion of the total under definitive agreements and $0.2 billion of the total subject to entering into definitive agreements. Our technical solutions segment backlog is approximately $0.9 billion as of September 30, 2025, which includes funded amounts, unfunded amounts and unexercised options. The options relate to the company HALEU operation contract.

Turning to our capitalization. In the third quarter, we issued $805 million of 0% convertible senior notes for a total net proceeds of $782.4 million. The proceeds from the offering deliver added liquidity to execute our strategic plans and help derisk our business. Furthermore, as announced today, we filed a shelf registration and simultaneously brought down $1 billion to be used in an at-the-market offering. We believe that having a shelf in place is part of good business practices and that using equity to raise capital at this time is a prudent solution given our strong valuation and lower cost of capital associated with it. We will be using the proceeds from the ATM for general corporate purposes. The issuance of the 0% convertible notes as well as today's announced ATM program are in line with our capital plans to appropriately and prudently raise funds ahead of our planned industrial build-out and government funding decisions.

With that, I will turn the call back to Amir.

Thanks, Todd. Before ending the call, I'd like to quickly summarize the points that have led to our growing confidence in our most recent announcements. First, U.S. utilities are set to expand nuclear capacity. The Nuclear Energy Institute recently identified over 8 gigawatts of expected additional generation from the existing fleet, including plant restarts and power upgrades. And recall that Westinghouse recently pledged to build 10 new large reactors in the United States and the federal government recently announced $80 billion investment related to the project. The combination of just these 2 events could equate to a need for an additional roughly 2.5 million SWU per year.

Second, we continue to see an acceleration in new market demand for nuclear power. For example, the projected power requirements for data centers are driving major investment in nuclear by technology giants, including Amazon, Google, Microsoft and Meta as well as non-hyperscaler owned and operated data centers like REITs, and continue to come to market.

Third, the SMR market continues to mature. The Tennessee Valley Authority, for example, recently announced a deal for a 6-gigawatt deployment from one SMR design. The Department of Energy, meanwhile, has launched the reactor pilot program that aims to demonstrate criticality in at least 3 test reactors by July 4, 2026. And just last month, the U.S. Army launched the Janus Program aimed at deploying microreactors in 9 bases over the next few years. All of these will drive the demand for more enriched uranium and have strengthened our outlook. Last month, the published spot price for LEU SWU soared to $220, near historic levels. The demand for U.S.-owned enrichment capacity has never been stronger.

I would like to close by thanking our growing list of investors, analysts and listeners without whom none of this would be possible. We look forward to updating you on our progress on our next earnings call.

With that, we are happy to take questions. Operator?

[Operator Instructions] Our first question comes from Ryan of B. Riley Securities.

Amir, you mentioned the national security opportunity. We saw the BWXT award in September. And then a few weeks later on SAM, the NNSA's notice of intent sole-source contract with ACO for unobligated LEU enrichment. Could you just talk a little bit about Centrus' opportunity there and what that entails?

Sure, and good morning to you, Ryan. So as you pointed out, the NNSA recently published a notice of intent to sole source and award ACO for AC100 deployment for unobligated LEU enrichment. I am not sure that I can add anything beyond what the NNSA announced. It is an intent to a sole-source award. But I will add just color maybe to it from my perspective in that if you recall, we have repeatedly stated that our strategy is to serve 3 market segments that are important and all 3 of them are growing, the LEU existing market, behavior market and obviously, the national security market.

And so we definitely look forward to hear further communication from the NNSA regarding this notice. And as always, we stand ready to support the NNSA and the nation on a critical national security mission. So what I would read into this is that things are moving forward, it looks. It looks like the things that we were aiming for are materializing. But as I said, not much to add beyond what the NNSA had announced.

The next question comes from Rob Brown of Lake Street Capital Markets.

I just wanted to get if you get a little more color on your readiness efforts at Piketon. How do you sort of foresee that playing out? And what are the decision gates you're looking at in the next sort of 12 months?

Okay, thank you for that question. We -- as you pointed out correctly, and as we have announced in previous calls, the readiness efforts for a plant build-out are taking shape, and they're taking shape fast. We have already announced investment, which we're in the middle of spending as part of that preparedness. We are launching things like studies of our production cycle time analysis, first time -- first article manufacturing, things of the sorts that you would need to have lined up for rapid manufacturing deployment, all in anticipation of a planned build-out. So yes, there's a few more things that need to fall into place in terms of the public part of it.

And I will turn your attention to the Ohio's jobs announcement that we made just recently, where we are in the midst of hiring a lot of folks. We are in the midst of building up our strength and skills. And all of this is in anticipation of ensuring that we are able to execute and are able to go as fast as we can when we announce our build-out.

The next question comes from Joseph Reagor of ROTH Capital.

Now that you guys have the waivers for '26 and '27, and there's been these extra announcements about investments in nuclear facilities restarts and new facilities. Has there been any shift in political commentary out of Washington about the Jan 1, 2028 deadline for Russian imports? Any realization that's an unreasonable date? And then if not, what do you guys -- how do you guys think about the late 2020s and early 2030s as far as a the business model until you guys ramp up production?

Actually, this is a really good question from a macro perspective, from a market fundamentals perspective. So the first part of your question, there's nothing really that I know that I can report officially or unofficially that I've heard about reconsidering anything has to do with Russia. If you remember, that was done legislatively, and that was tied to an investment here in the U.S. to establish domestic supply chain, which is exciting news. The reason why I think the question is critical is because what's building excitement for our case is not a day goes by that there's no new announcements of new builds, whether it's the $80 billion announcement from Westinghouse, Cameco and the U.S. government or as I mentioned earlier, some of the microreactor announcements. I mean, heck I even heard we're planning to put a reactor on the moon by NASA.

So all of this is adding to the demand for enrichment. Demand for enrichment in the Western world could be supplied only by a finite number of companies that are currently serving the market. And obviously, Centrus is the new entrant into the market. I call into question as to -- I think this points to the fact also that there has to be ability by these companies to produce centrifuges and to be able to satisfy that market demand. And to me, this is a reinforcement to our business model. This is a reinforcement to where we're marching with some of our investment decisions to be made here soon and the investment decisions that we already made. All of this is reinforcing the -- just the macros that we've been preaching and saying that there will be a significant increase in demand for nuclear enrichment -- nuclear fuel enrichment. And so we're kind of seeing that materialize.

And I think you're asking that question. I cannot -- I'm unable to quantify it. I'm unable to say whether there is any back talk in the government about anything that has to do with Russia. But all I know is that we're laser-focused on ensuring that we are able to maximize enrichment capability and enrichment production as much as we can here in the United States. I mean that's our task. And if the market is growing and the market is looking stronger and stronger day by day, that just further reinforces our case.

Okay. On the second part of the question about if they don't extend the deadline, what do you guys think about the late 2020s, '28, '29 and maybe 2030 as far as the business?

Yes. You're asking me to speculate. I would not be able to answer that. I do think -- I do believe that there is going to be an extremely tight market in the years that you're mentioning for the reasons that I mentioned earlier is that a lot of stuff is coming online. Russia has been really banned out. So these are going to be tight years. We're going to work as hard as we can to make sure there's enough capacity. But these are the years that I've put a question mark on as well.

Our next question comes from Nick Amicucci of Evercore ISI.

Just following on that, Amir. I just wanted to get a sense that we saw kind of a pretty significant uptick in SWU prices during the quarter, up to $220 per SWU. So just could we kind of parse out kind of the dynamics that we're seeing? Because obviously, Russia is kind of, for lack of a better term, rushing to kind of get their fair share of the U.S. market and so supplying SWU on the market. So if we kind of peel back the onion a little bit, is that could we argue that, that's almost even a depressed kind of price at $220 and where that can be going?

Yes. Really good question. And my personal view on things is, as I always mentioned, the only way the price is going to go down is when there is excess capacity in the market. I do not see a line of sight to that based on what we're seeing, we're seeing the demand side of the equation growing so much faster than any new capacity coming online, at least announced new capacity. So you tied it really nicely in your question and sort of reaffirming what I'm saying. This is not just my sentiment. This is the market sentiment. We're seeing SWU prices almost at an all-time highs here.

And do I think they will continue to go up? I mean, my answer to the previous question was there is going to be tightness in a few years. And really all it takes is indication of Western capacity inability to meet that demand. And I think you will see that the prices take a much sharper turn than we've seen before. That -- at least that's how I look at it. Again, the way for them to come down is there has to be active capacity on the market. And we're just not seeing that. We're seeing the complete opposite of that, and that's why we're seeing the prices go up.

Great. And then if I could just try and parse through some of the NNSA sole-source opportunity a little bit. If we think about that and inevitably kind of the government support that we've seen in the -- and yes, the continued government support and administrative support for kind of rectifying the domestic nuclear fuel supply chain. Is there any kind of levers that even from a national or a federal security perspective that could be pulled just to expedite kind of the time to build the first cascade, just trying to truncate that a little bit?

Yes. No, really good question. You're talking about synergies of commercial and sort of potential national security commitments. I mean there's a lot of things that could be done. I'm really hesitant to go deeper into speculating that just because what we've seen at this point is a notice of intent to sole source. If we're fortunate enough to get through sort of the rest of the process with the NNSA, I think it would be a more merited discussion at that point. But absolutely, there is a lot of levers and a lot of things that could be done in the name of synergies in terms of build-outs.

Our next question comes from Jed Dorsheimer of William Blair.

I guess, Amir, if we look at the $3.4 billion grant and we look at the -- we're past the 120 days since the task orders. Is the timing of this distribution being affected by the government shutdown? And then I have a second part of that question.

Officially, I do not know. I honestly have no idea. I suspect maybe the answer is yes, but I don't know anything officially.

Got it. That's helpful. And then if I look at the -- it seems like there's -- this is not a technology risk issue. It's really just one of capital and capital is going to determine what the cost basis looks like. Could you maybe just discuss any nongovernment private sector discussions that you guys might be engaged in? Obviously, not the details, but I'm assuming -- I just find it hard to believe that the trillions of CapEx being deployed, many of which I can think of one data center in particular, that has at least 7 gigawatts of their capacity tied to nuclear that they're not aware of the supply chain gap in terms of fueling. And so where I'm getting -- what I'm getting at is when we look at the utilities, when we look at the private sector that's investing behind the meter, why there wouldn't be -- there's not more around a potential offtake to stand up, which would render maybe some of the government money much smaller in the grand scheme of things?

Yes good question, Jed. So I think you are pointing out correctly to what we've been saying for a while now that we are looking to maximize the public-private partnership from every source we can, obviously, the public part of it. But also the private. The private does not solely depend on Centrus' ability to raise some capital, but it also relies on external investors as well. As we have announced earlier, we have an MOU with KHNP and POSCO, where we are in discussions now, hopefully moving towards a commitment. But that really is kind of symptomatic of what we're seeing in the market.

I think the market, as you said, particularly the companies that would come to rely or would come to rely on nuclear power in general, are starting to realize that, hey, it really is important to turn our attention now to fuel. And so we do have discussions with numerous parties. We've already publicly announced the KHNP and POSCO, but we also have discussions with other interested parties like hyperscalers. We're not at the point of announcing anything or naming anybody, but I will, though, put some energy behind what you said. We are seeing very encouraging signs out there that people now are turning their attention to fuel, and they realize that investment has to be -- it has to be made in the fuel. I mean these are the signals that have led us to make some of the announcements in the Ohio jobs, as I mentioned earlier. And obviously, today's capital raise fits very well into the confidence that we're getting from these discussions and these signals.

Our next question comes from Vikram Bagri of Citi.

Amir, you've highlighted strong fundamentals in your closing remarks and responses to questions so far. Clearly, the landscape is very supportive of domestic enrichment. I was wondering what signals would you look for to announce further expansion beyond the planned 3.5 million SWU capacity, perhaps doubling it? And how much time it will take to get there? And then finally, it seems you have a bullish view on SWU pricing. I was wondering what SWU pricing is required to incentivize more expansions? And what SWU pricing are you underwriting in your own expansion?

Good questions, and thank you for that. So to your first question about expansion, the way I see the natural events unfolding is we have to get to a base case type capacity in our facility, which we're planning towards. Once we start moving towards that, it is my anticipation that we were going to get a lot more than signals from the market. We're going to get enhanced commitments and additional commitments from others that we have not gotten them from. Basically, what I'm saying is there is a large population out there that is perhaps sitting it out for now and waiting to see how things progress and how we will execute, how others will execute, how the market will unfold. So I fully expect that once planned execution is underway, we're going to get more interest and more commitment for further expansion. That really is the signal that we'll be looking for, and it would be more than the signal we'll be looking for commitments.

To your question about SWU pricing and what is an advantageous or hurdle SWU pricing, obviously, I will not be able to name that because that will point to our cost structure and things that we normally would not want anybody to know. It's very proprietary and sensitive information to us. But I will say to you, though, that the SWU pricing that we're seeing right now is not bad. I mean this is the SWU pricing that has people that have technology, that are able to utilize technology, that are able to launch their technology into production. It's not a disadvantageous SWU pricing that we're seeing right now.

The next question comes from Bill Peterson of JPMorgan.

This is Nehima on for Bill. I was curious, are strategic investors looking for you to further derisk the balance sheet yourself before committing to funding? Or are they perhaps waiting for the government or national security type funding to come through before those conversations progress further?

This is Todd, the CFO. I think there's a variety of different areas that the balance sheet can go, obviously, with public and private investment. One of the things that is our objective is to put us in a position that really we're not reliant on one source of capital to come in to fund our proposed or planned expansion. So obviously, when we're looking at private investments that come in, there is offtake arrangements. There's a variety of different scenarios that could take place. But our first objective is to well capitalize the balance sheet and have a capital structure that allows Centrus to be well positioned for the future.

The next question comes from Jeff Grampp of Northland Capital Markets.

Maybe just kind of building off of the last question. I wanted to touch on the recent release regarding the potential Korean investment. And maybe more broadly, like how do you guys think about taking third-party private capital investment to help fund any build-out of the enrichment? What are the kind of trade-offs you guys may consider as you think about taking third-party investment?

That's a good question. I'll try to answer it without revealing things that are nondisclosed in a nondisclosure agreement with any of the parties. Obviously, if an investor invests, they expect something in return. And it's a process of negotiations to ensure that we can find a win-win solution. When you're in an environment where you're hitting record SWU prices and the prospects appear that they will continue to go up and the prospects are that the market will continue to have tightness in supply, that helps make a very strong case for an investor that comes in. So I know I'm not really giving you a lot of details, but all this to say is that we have numerous models that we're working through. And whatever decision we make, we certainly are grounded in delivering shareholder value and maximizing it from our perspective.

The next question comes from Eric Stine of Craig-Hallum Capital Group.

This is Luke on for Eric. So have your views on your targeted enrichment mix between LEU and HALEU in the market changed at all given the progress being made by some of the advanced reactor developers? Do you see more robust HALEU demand in the near term becoming more realistic in your view?

Right. Good question. So the ultimate decision of the planned expansion in terms of how much HALEU, how much LEU would be 100% driven by customer demand and customer commitments. And however they weigh that mix. I will say that during my time in the company, which is almost 2 years now, particularly in the last year, we have seen HALEU going from sort of like an MOU type, let's agree to some point in the future where we can talk about a contract, very noncommittal to we're seeing companies now, hey, we're ready to make a commitment type conversations.

So we're seeing HALEU evolve very quickly and rapidly, especially through some of these expansion plans that you're hearing from microreactors and other small modular reactors. I mean, ultimately, if somebody starts buying these reactors as is happening right now in the market, they would be able to make commitments for fuel. So all this to say that there's a lot of momentum behind HALEU now. We're -- but the ultimate decision is going to be what that commitment breakdown looks like between HALEU and LEU.

The next question comes from Sameer Joshi of H.C. Wright.

And Todd, congrats on the new role. Looking forward to interact with you. I just have one question on the improved SWU pricing environment. Are you able to contract these? Like has the backlog increased from the new SWU prices? And when should we see -- I know these are longer term -- mid- to long-term contracts, so we may not see it in revenues soon. But when if you have signed contracts, when should we see those prices?

I want to reassure our investors and shareholders that locking in commitments and growing that commitment backlog is a big priority for us, both in HALEU and LEU and the 3 segments that we have been discussing. That is a key important focus for us. Obviously, we don't disclose details around our contracts. And I will point out to you, though, that a lot of these conversations and the results of these conversations are very nonlinear. So we could be working on something for a while and release something large and then not hear anything or see anything for a little while. So it's not necessarily a steady stream, but like I said, it could present itself in a nonlinear fashion. But the only thing I can leave you with without violating any, again, nondisclosures that we have is that it is still a major focus area for us and a priority for the company.

Ladies and gentlemen, we have now reached the end of the Q&A session. I will now hand you over to Neal Nagarajan for closing remarks.

Thank you, Judith. This will conclude our investor call for the third quarter of 2025. As always, I want to extend a thank you to our listeners and our analysts who have called in, and we look forward to speaking with you again next quarter.

Thank you. Ladies and gentlemen, that concludes today's event. Thank you for attending, and you may now disconnect your lines.