Fermi Inc. Common Stock (FRMI) Earnings

Management highlights

- Leadership & Governance Restructuring (Fermi 2.0 Initiative) * Former CEO Toby Nagabar was terminated for cause by a unanimous board decision, as the company requires institutional execution capabilities for large contract delivery that the prior leadership structure did not support * The board expanded from 5 to 7 directors with three new experienced industry members; an executive search is underway for a permanent CEO, with a qualified candidate slate already assembled * Rob Masson was appointed interim CFO, bringing over 20 years of public company financial leadership experience * A new corporate headquarters was established in Dallas (alongside the permanent Amarillo site office) to improve access to talent and key stakeholders * The board formally rejected the former CEO's call for an immediate forced sale of the company, stating this would not serve long-term shareholder interests; the company remains open to value-creating opportunities but will not pursue short-sighted actions - Commercial Progress * Customer demand for large-scale, reliable near-term power for AI infrastructure has intensified, and Fermi's restructuring has reactivated stalled tenant discussions while attracting new prospective tenants * Multiple site visits with prospective tenants and partners have occurred over the past two weeks, with feedback confirming Project Matador is one of the most customer-ready large-scale power campuses in the U.S. * The company is evaluating strategic partnerships with established data center operators and infrastructure providers to accelerate execution, expand capacity, and increase customer confidence - Regulatory & Nuclear Development * A six-gigawatt clean air permit (the second largest of its kind in the U.S.) was received in February 2026, a critical milestone for commercial execution that provides regulatory certainty for prospective tenants * An application for an additional five-gigawatt gas permit was filed in March 2026, and a foreign trade zone sub-zone designation application has been submitted to deliver tariff relief and duty deferrals * Long-term nuclear development is progressing: Fermi is the first private company accepted into the NRC's accelerated NEPA pilot program, has an FEED agreement with Hyundai Engineering & Construction, and Doosan Enerbility has started preparing reactor pressure vessel forging dies - Project Matador Construction Progress * Completed site works include over 11 miles of perimeter fencing, nearly 5 miles of high-pressure gas pipeline, 7 miles of water distribution lines, a 2 million gallon water storage tank, additional secured water rights, and 86 megawatts of grid power brought to the site from Xcel * Equipment progress: Three GE6B turbines are undergoing refurbishment in Houston (expected completion mid-next month) with foundations already poured; Siemens SGT800 generators have cleared customs in Houston and site foundations are almost ready for pouring; 1.1 gigawatts of S-class combined cycle turbines are scheduled for Q3 2026 delivery; an additional six Siemens SGT800 turbines are secured for 2028 delivery, bringing total secured natural gas generation capacity to ~2.2 gigawatts * Phase Zero site development is complete, and further capital deployment will be disciplined and paused until a tenant agreement is signed; the company can mobilize immediately once a lease is executed, with secured supply chains and intact EPC contractor relationships - Liquidity Update * End-of-quarter total cash was $243 million; the Macquarie term loan was fully repaid, replacing $150 million of high-cost debt with more favorable equipment financing * The company has secured $785 million of non-recourse equipment financing anchored by a $500 million facility from MUFG, secured by underlying generation equipment, and $156 million of general corporate financing from Yorkville (which has not been drawn to date) * Total secured financing commitments now stand at nearly $1 billion; future capital deployment will be aligned to cash inflows from tenant agreements and a transition to project-level finance

Guidance

- Management has laid out a public 90-day plan with five clear deliverables to be completed by the end of the 90-day period: (1) secure a binding tenant agreement, (2) maintain capital discipline to support liquidity, (3) hire a new permanent CEO, (4) advance on-site power delivery progress, (5) execute exploratory work for strategic partnerships to accelerate data center and power deployment * The approval of the five-gigawatt incremental air permit is expected to be completed successfully by Q4 2026 * The company expects 1.5 gigawatts of installed power capacity can be delivered by the end of 2027 if a tenant agreement and project financing are secured, with the remaining capacity delivered on a sequenced timeline aligned to tenant demand * Future capital spending will remain strictly disciplined, with cash outlays aligned to capital inflows from signed tenant agreements before proceeding with further development; the company's existing secured financing is sufficient to fund near-term development activities

Segment performance

Fermi America is a single-core business focused on the development of the Project Matador private power campus, so it does not report segmented financial performance by product segment. For the overall company in Q1 2026, the firm reported a net loss of $189 million, 70% of which was non-cash and driven primarily by share-based compensation. A $25 million loss was recorded on the retirement of the Macquarie term loan. Cash used in operating activities totaled approximately $7 million, supported by a $22 million net working capital benefit from growth in accounts payable and accrued liabilities; adjusted for this benefit, cash used in operations was approximately $29 million. Capital expenditure for property, plant and equipment in the quarter was $441 million, bringing cumulative total investment in Project Matador to more than $1.4 billion, with the majority of this spending allocated to natural gas turbine procurement, and the remainder going to site infrastructure, substation equipment, electrical interconnection, and early nuclear pre-development.

Risks & headwinds

- Power availability (not demand or capital) is the primary near-term constraint for AI power projects, with widespread project delays globally driven by grid interconnection timelines and equipment availability, which could impact Fermi's ability to meet customer timelines if execution slips * The company relies on timely regulatory approval for its incremental 5 gigawatt permit, nuclear development, and foreign trade zone designation; approval delays could impact commercial progress and expected cost benefits * Former CEO Toby Nagabar holds a 40% shareholding block, which could create potential shareholder disruption; the board amended bylaws to require a 70% shareholder vote for board composition changes to mitigate this risk * Achieving all 90-day plan deliverables, particularly securing a binding tenant agreement, is a critical gating item for further development and liquidity; failure to meet this milestone could impact the company's growth trajectory * Project execution is dependent on EPC contractor and supply chain timelines, which are subject to industry-wide delays that could impact commercial operation dates

Analyst Q&A

• Q: What are the specific 90-day plan deliverables, and is a binding tenant agreement an explicit target? How should investors think about cash burn in Q2 and Q3 before a tenant agreement is signed? /

  A: The five explicit 90-day deliverables are securing a binding tenant agreement, maintaining capital discipline for liquidity, hiring a permanent CEO, advancing on-site power delivery, and exploring strategic partnerships to accelerate deployment. Existing equipment financing covers remaining expenditures on ordered turbines and power equipment, and the Yorkville facility is an undrawn backstop for general corporate purposes. Capital deployment going forward will be strictly disciplined, with cash outlays matched to progress on new tenant agreements.

• Q: What is the expected timeline for approval of the new 5 gigawatt air permit, and what gives management confidence it will be approved? /

  A: Regulators actually asked why Fermi did not request more capacity during the six gigawatt permitting process, which prompted the incremental five gigawatt application. Based on the successful transparent approach that delivered the six gigawatt permit (the second largest ever approved in the U.S. with EPA support), management fully expects the five gigawatt permit to be approved by Q4 2026.

• Q: What gives management confidence to commit to a 90-day target for securing a tenant agreement, and what is the status of the company's relationship with Texas Tech? /

  A: Confidence comes from three factors: the leadership changes have addressed customer concerns about long-term counterparty reliability, the site is the most customer-ready large-scale power project in the country, and unmet AI power demand is extremely strong with the company's deal pipeline growing exponentially in recent weeks. The relationship with Texas Tech remains very strong, with multiple recent high-level meetings, and both parties are fully aligned on delivering long-term project success.

• Q: What is the scope of the proposed strategic partnerships with data center and power players, and what is the status of EPC contractor timelines? /

  A: Partnerships are being explored to meet strong unmet customer demand, add execution capacity, and bring additional capital and pre-committed tenant demand from established providers, who are actively approaching Fermi to access scarce power capacity. All existing strategic EPC partners remain fully aligned and flexible to adjust timelines based on when a tenant agreement is signed, and relationships remain strong.

• Q: What sizes of tenant deals is Fermi currently pursuing, and what value would data center partnerships add? /

  A: The company is evaluating deals across a range of sizes, from hundreds of megawatts to one gigawatt or larger, and can accommodate multiple structures. Data center partners bring existing pre-signed tenant demand, industry expertise, and potential capital infusions, allowing Fermi to meet customer demand on accelerated timelines.