Centrus Energy Corp. (LEU) Earnings

Management highlights

Amir Vexler noted the first quarter marked historic undertaking to return US to domestic commercial uranium enrichment with numerous wins and operational progress. Centrus is the only company with proven American technology. Achieved $76.7 million in revenue, $31.5 million gross profit, $0.8 million operating income, $10 million net income, $0.45 diluted earnings per share, $23.5 million adjusted net income, $1.05 adjusted diluted earnings per share. Finished first quarter with $3.9 billion backlog. In January, won $900 million HALEU enrichment award. Launched $560 million investment in Oak Ridge centrifuge manufacturing plant, signed Fluor, Palantir, Geiger Brothers as partners. Identified approx $300 million in potential cost savings. Exploring joint venture with Oklo for HALEU deconversion. Made strong progress in workforce additions. Reaffirming 2026 annual guidance for finalizing contracts with 100% critical partners, capital spend $350 million to $500 million, release of certified for construction package, at least 100 net new employee hires at Oak Ridge. Raising 2026 annual guidance for revenue to $450 million to $500 million from $425 million to $475 million, Piketon workforce additions to over 100 net new employees. Todd Tinelli walked through results, discussed financials on quarterly and trailing 12-month basis, introduced adjusted net income and adjusted earnings per share, talked about capitalization and capital spend, mentioned $1.9 billion unrestricted cash, confident in funding near-term capital requirements.

Guidance

Reaffirming 2026 annual guidance for finalizing contracts with 100% of critical partners, total capital spend $350 million to $500 million, release of certified for construction package and at least 100 net new employee hires at Oak Ridge facility. Raising 2026 annual guidance for revenue to $450 million to $500 million from $425 million to $475 million, Piketon workforce additions from over 50 net new employees to over 100 net new employees. Todd noted revenue guidance increase due to active market, near-term and line of sight to long-term offtake.

Segment performance

In the first quarter, revenue was $76.7 million. The LEU segment generated $44.6 million, a 13% decrease vs prior period last year due to 47% decrease in SWU volume partially offset by 52% increase in average price. SWU revenue decreased $9.7 million due to 47% decrease in volume sold, partially offset by 52% increase in average price. Uranium sales in Q1 were $3 million. The Technical Solutions segment delivered $32.1 million in revenue, a $10.3 million or 47% increase over prior period primarily due to $9.8 million increase in revenue from HALEU operations contract. Backlog finished first quarter at $3.9 billion, with $3.1 billion in LEU segment and $0.8 billion in Technical Solutions segment. LEU segment backlog broken down into $700 million broker-dealer backlog and $2.4 billion contingent LEU enrichment sales under definitive agreement.

Analyst Q&A

• Q: On guidance, could you give more detail on what's driving the increase in expected revenue for this year?

  A: Todd said continue to be active in the market, seen near-term and line of sight to long-term offtake, allowed to increase guidance marginally.

• Q: Could you give us a sense of the pricing and margin trends in the backlog?

  A: Amir said can't specifically address contractual pricing, but trend is continuing with constricted supply, increasing demand from existing fleet and new reactors, pressure on price through demand side.

• Q: The additional $25 million that you guys have added, was any of that in Q1? Or is it all future-looking?

  A: Todd said look at business on TTM basis as shipments and deliveries can move quarter-to-quarter, difficult to say exactly which quarter, in line with expectations for first quarter, future quarters ratable to comparable periods in past and adjusted based on TTM view.

• Q: Dig into the Palantir partnership a little bit. 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 about capital?

  A: Amir said partnership with Palantir is transformative, provides real-time data, empowers team, allows efficiencies, lasting much longer than first cascade. Todd said have $1.9 billion on balance sheet, $900 million HALEU award, focus on many pools of low cost of capital, not participating in ATM program in first quarter as didn't feel it provided right shareholder value.

• Q: Update on where you see the most SWU value in LEU or HALEU? And has anything changed how you're looking at that strategically?

  A: Amir said market is maturing, advanced reactors now starting to seriously procure and commit to fuel, from physics perspective LEU drives volume, HALEU has advantages, seeing almost all reactors moving towards significant committed fuel procurements.

• Q: Update on engagement with hyperscalers or traditional utilities and IPPs. Has one been more aggressive recently than the other? And how the war in Iran and constrained oil markets has factored in?

  A: Amir said reactors operating have seasoned fuel buyers, seeing steady flow of requests for pricing, prices trending up, not aggressive behavior but strategic, war in Iran and constrained oil markets highlight need for governments to diversify away from fossil fuel, aiding nuclear build decision-making.

• Q: Now what would next steps be for NNSA notification? And potential amount of funding source?

  A: Amir said in procurement cycle, limited to say, confirmed submitted response to NNSA's request, stand ready to support national security mission, not disclosing quantities or details as NNSA and government drive announcements.

• Q: Discuss strategy around deconversion more broadly. Are you looking for additional commercial partnerships or arrangements? What does the market look like for that today for you? And what would give you confidence in Centrus taking a role in deconversion in the coming years?

  A: Amir said market has hole in fuel cycle for advanced reactors and HALEU-type fuels, deconversion process doesn't exist commercially, partnership with Oklo is proactive, see commercial opportunity, believe putting deconversion with enrichment makes sense for efficiencies, security, potential vertical integration and differentiation.

• Q: 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 taking an early look at 2027, do you foresee hiring needs being similar, lesser or greater than 2026?

  A: Todd said hiring has components like sourcing from local community, need to be cleared individuals, rate of sourcing employees stronger than anticipated, allowing acceleration of hiring curve, human capital critical, for 2027 growth tied to additional offtake or customer demand. Amir added it's historic project, driven by intersecting demand curve, project spend and speed driven by need to meet real demand.

• Q: Circling back on the Palantir partnership. Can you give us a sense for what are the main factors driving those cost savings?

  A: Amir said Palantir's AI platform provides real-time data, allows quick and high-fidelity decisions, helps with project management, shortens lead times and cycle times, already declared $300 million in cost savings, continuing to push for more.

• Q: Should we expect gross margins from SWU increasingly positive going forward? And should we expect uranium sales in the second quarter?

  A: Todd said rate of SWU prices move with contractual mix, can't comment on actual contracts and margins, look at TTM for better understanding, uranium sales are opportunistic, can't provide guidance on specific sales or if they'll occur in second quarter