Centrus Energy Corp. Q4 FY2025 earnings call

Key Points

• 2025 was a milestone year with December's announcement to begin commercial centrifuge manufacturing and January's $900 million HALEU enrichment award from the Department of Energy.
• For full year 2025, revenue was $448.7 million, gross profit was $117.5 million, and net income was $77.8 million. The LEU business received waivers from the DOE to continue importing LEU for 2026-2027 deliveries.
• Future commercial enrichment plans include a base case build-out addressing a $2.3 billion backlog and the HALEU enrichment award, aiming to reach nth of a kind cost. Operational efforts in 2025 included supply chain readiness, progress on the HALEU operations contract, adding to the LEU backlog, creating over 300 new jobs at Piketon, initiating design work on a training facility, and cost reduction efforts.
• Financial efforts included uplisting to the New York Stock Exchange, signing an MOU with KHMP and POSCO International, and ending 2025 with a cash balance of approximately $2 billion.

In 2025, Centrus Energy had total revenue of $448.7 million. The LEU segment generated $346.2 million, which is approximately 77.1% of the total revenue, with a gross profit of $111.5 million in 2025. The technical solutions segment contributed $102.5 million, making up around 22.9% of total revenue, and had a gross profit of $6 million in 2025.

Financial Guidance

• For 2026, total company revenue is expected to be between $425 million and $475 million, and total capital spend is projected to be between $350 million and $500 million.

Operational Guidance

• Finalize contracts with critical partners, focusing on those with long lead procurements. Add at least 150 net new employees across facilities. Release the first certified-for-construction work package in Piketon and complete the majority of construction partners' mobilization in Ohio by year-end.

Risks Identified

• Shipping issues: A scheduled fourth-quarter shipment from Russia was delayed, which would have positively impacted gross margin and net income if delivered as expected.
• Contractual uncertainties: Undefinitized portions of the HALEU operations contract led to costs not being subject to a fee, affecting the technical solutions segment's gross profit.
• Market dynamics: Fluctuations in SWU prices and potential supply-demand mismatches in the enrichment market could impact financial results.

Q: Talk about the timeline improvement initiatives to pull forward the forty-two-month forecast.

A: Amir Vexler mentions that continuous improvement, reducing unit cost, and going faster is a priority. They are dedicating resources, working with partners like Fluor, and executing on opportunities to streamline processes and reduce lead times.

Q: On the commercialization side of LEU commercialization, is that capacity ramp similar to the HALEU ramp and when does the backlog turn from contingent to final?

A: Amir Vexler states they are progressing towards fulfilling commitments but does not comment on specific contractual details regarding when the backlog will turn from contingent to final.

Q: Discuss the CapEx guidance for 2026 and its linearity throughout the year.

A: Todd Tinelli explains that 2026 CapEx includes long lead procurement, prepayments, and engineering work, and is not indicative of the linear spend expected in later years (2027-2029) due to the nature of initial investments.

Q: Talk about the HALEU production target and its relation to DOE task orders and market demand.

A: Amir Vexler states the capacity depends on OEM designs, reactor sizes, and specific needs, with the DOE program aiming to stimulate the market and OEMs now engaging in discussions for the available capacity.

Q: Comment on SWU pricing and contract dynamics affecting the 2026 revenue guidance.

A: Todd Tinelli mentions the market continues to improve with high spot prices in SWU, and while guidance is flat, there is upside potential, with comfort in the supply side but noting shipping delays impacted prior year results.

Q: Identify milestones that de-risk the timeline for initial enrichment capacity.

A: Amir Vexler highlights execution, supply chain management, and partner engagements as key milestones, with efforts to optimize cycle times and supplier contracts to reduce lead times.

Q: Explain the HALEU production target in terms of market demand and DOE task orders.

A: Amir Vexler says the capacity depends on OEM designs and demand, with the DOE program intended to stimulate the market and OEMs now lining up for the available capacity.

Q: Discuss what's under Centrus' control versus external factors in pulling forward the timeline and building out broadly.

A: Amir Vexler mentions internal efforts on cycle times, supplier contracts, and process optimization as under Centrus' control, while noting partnerships and supplier lead times are external factors. Todd Tinelli adds a well-capitalized balance sheet helps deploy capital without slowing the timeline.

Q: Talk about LEU feed sourcing for HALEU production and capacity availability.

A: Amir Vexler states the intention is to optimize capacity, contract for both LEU and HALEU, and there are options to source feed externally if needed to meet commitments.