Terrestrial Energy Inc. Q1 FY2026 earnings call

Market Context and Competitive Differentiation

• Secular long-term growth in electricity demand driven by AI infrastructure, reshoring of manufacturing, and broad electrification, paired with renewed policy focus on energy security across advanced economies, creates a favorable market for new nuclear capacity.
• The IMSR plant is differentiated from conventional nuclear reactors and competing Generation IV designs: it is 1/6 the size of a conventional nuclear plant, with higher steam turbine efficiency, inherent safety at low operating pressure, and improved affordability/financeability.
• Unlike other Generation IV advanced reactors that require high-assay low-enriched uranium (HALU, 15-20% U-235 enrichment), Terrestrial Energy selected standard low-enriched uranium (<5% U-235) for IMSR fuel over a decade ago. This removes significant current HALU supply constraints, costs, and regulatory complexity, creating a major competitive advantage in today’s constrained enrichment market.

Three-Pillar Operational Progress

• Engineering and Regulatory: Completed an OTA contract with the U.S. Department of Energy (DOE) to advance Project Tetra (test reactor assembly) and Project TEFLA (fuel line assembly), which support commercialization and fuel supply infrastructure development. Graphite irradiation testing and qualification work is ongoing at the NRG Patton test reactor. Subsequent to quarter-end, the U.S. Nuclear Regulatory Commission (NRC) approved the company’s Postulated Initiating Events (PIE) topical report with a safety evaluation report, establishing a foundational, reusable safety methodology for the IMSR licensing basis that reduces future regulatory review scope and improves licensing predictability for multiple plant deployments. This follows the NRC’s 2025 approval of the IMSR’s principal design criteria, completing two core foundational licensing elements.
• Supply Chain: Expanded the internal supply group to support execution of Project Tetra and Project TEFLA, with active ongoing collaboration with established nuclear industry suppliers for component fabrication and fuel supply infrastructure development.
• Commercial Pipeline: Executed a memorandum of understanding (MOU) with RIOT Platforms post-quarter to co-locate IMSR plants with hyperscale data centers for AI and high-performance computing applications across the U.S., with natural gas planned as a bridge fuel to accelerate power delivery and improve resilience. This establishes a dedicated high-value commercial channel for IMSR plants. The total commercial pipeline holds approximately 10 projects representing 7.8 GW of indicative power capacity.

Financial Overview

• Total cash and cash investments at quarter-end were $289.9 million, down from $297.8 million at year-end 2025. Quarterly cash burn was $7.9 million, a $1.8 million increase from the prior quarter after adjusting for one-time 2025 merger transaction costs. The increase was driven by $600,000 in 2025 discretionary bonus payments, a $1 million pay-down of vendor extended credit payables, and $200,000 in higher R&D costs.
• Sequentially, research and development expenses rose $1 million driven by fuel development and graphite testing. General and administrative expenses increased $4.6 million, primarily from headcount growth and stock-based compensation for the expanded public company team, plus the absence of a $2.7 million merger-related capitalized legal/accounting expense credit recorded in Q4 2025.
• Issued and outstanding shares increased only modestly (~100,000 shares) from stock option exercises during the quarter, leaving share count effectively unchanged from year-end 2025. The company maintains a strong, clean balance sheet with no debt to support planned milestone execution.

Terrestrial Energy is a pre-commercial advanced nuclear reactor developer with no operating product segments generating revenue. All current activity is focused on pre-deployment engineering, licensing, and business development. The company’s balance sheet is heavily weighted to cash and short-term investments, with no debt and only modest current liabilities and lease obligations.

• Management reaffirms prior guidance from March 2026 to announce 1 to 3 additional new project or partner agreements in 2026, and remains on track to meet this target following the recent RIOT Platforms MOU.
• Cash burn is expected to increase throughout 2026 as the company scales its organization and resources to support expanded material testing and qualification, supplier selection, and project-related work, continuing the ramp that began in Q4 2025 following completion of the 2025 merger.

Management notes that all forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from expectations, and directs investors to review complete risk factor disclosures in the company’s SEC filings. No additional specific operational or market risks were discussed in detail during the call.

Q: Derek Soderberg (Cantor Fitzgerald) asked for the Project TEFLA pilot plant timeline for commercial-scale fuel production, and whether fuel fabrication is the binding constraint for first IMSR plant deployment, noting that standard LEU supply is already secured. / A: Management explained that after LEU enrichment, the next supply chain step is deconversion to uranium tetrafluoride, a well-established chemistry within the existing global nuclear supply chain. The final IMSR fuel is a liquid fluoride salt, rather than a traditional solid fuel bundle, so manufacturing only requires a scalable chemical production process to meet purity specifications. Project TEFLA will develop and industrialize this final fuel production step at the pilot level, with Terrestrial Energy leading the effort to capture IP value. The company’s longstanding decision to avoid HALU removes the first and most critical supply chain constraint that impacts competing designs.

Q: Soderberg followed up to ask what key regulatory milestones come next after the NRC approved the PIE topical report, ahead of formal site licensing and construction. / A: Management clarified that nuclear development has two parallel regulatory tracks: construction permits (which allow site work but do not address nuclear system safety) and operating licenses (which are required for commercial operation and depend on completed safety analysis). Approved topical reports with NRC safety evaluation reports resolve core elements of safety analysis in advance, which reduces uncertainty and prepares the company to submit a complete operating license, the ultimate regulatory end goal. The company will continue advancing additional topical report submissions to build out the full licensing basis.

Q: George Janarikas (Canaccord Genuity) asked if the company has explored using LEU Plus fuel, and if the IMSR design is flexible enough to accommodate alternative fuels. / A: Management confirmed the 10-year-old decision to focus on standard LEU for its commercial simplicity and affordability. While LEU Plus could have minor marginal benefits if it becomes widely available, it is not a current priority. The IMSR’s liquid fuel design is extremely flexible, and can easily accommodate standard LEU, spent nuclear fuel, plutonium, thorium, and other alternative fuels without lengthy and expensive new fuel form qualification. The company remains focused on standard LEU to deliver the lowest cost and most capital-efficient plant for near-term commercial deployment.

Q: Soderberg (Cantor Fitzgerald) asked if the DOE OTA contract for Project Tetra and TEFLA will help cover capital expenditures for the programs over the next year. / A: Management stated that the contract indirectly supports capital raising by providing clear regulatory clarity for the projects, which makes it easier to secure capital to achieve program milestones.

Q: Soderberg asked if management still expects to announce 1 to 3 new projects in 2026, following the RIOT MOU. / A: Management reaffirmed the prior guidance of 1 to 3 new project announcements in 2026, and confirmed the company remains on track to hit this target.