Oklo Inc. Q3 FY2024 earnings call

Oklo's business model centers on building, owning, and operating powerhouses to provide reliable, low-carbon electrons. The nuclear sector receives strong government support, with funding for HALEU infrastructure and COP29 targets to triple nuclear capacity by 2050. The company's strategy has 3 key pillars: business model, plant size, and technology. Regulatory progress includes NRC engagement, DOE agreements, approval of Oklo’s Conceptual Safety Design Report for the Aurora Fuel Fabrication Facility, and siting advancement in Idaho. Customer pipeline has grown with new LOIs from data centers and other sectors. Oklo acquired Atomic Alchemy for radioisotope production, with synergies and market demand for radioisotopes. Financially, year-to-date cash used in operations is $24.9M, cash and marketable securities at end of Q3 are $288.5M, and full-year 2024 operating loss is expected to be $40M to $50M.

No distinct product segments with financial performance details provided

Target to submit combined license application for Idaho project next year. Expect first reactor online in late 2027. Full-year 2024 operating loss expected to be in line with prior guidance of $40M to $50M. Subsequent licenses after the first could have shorter review times, with NRC projecting review times for subsequent licenses down to 7 months.

Regulatory uncertainties in the licensing process. Market competition and potential confusion among customers due to many new entrants. Political landscape changes affecting nuclear support and opportunities.

Q: Hey, guys. Thanks for taking my questions. I guess for my first one, have the announcements from the tech giants recently led to an increased customer interest in Oklo and is it may be accelerating certain customer discussions? And when might we see the first contract conversion from an LOI to PPAs?

A: Yes. I think it has accelerated. We've seen a steady pace of acceleration. We are intentionally building best partnerships rather than rushing to PPAs. Clear signals for $100 or more megawatt hour for nuclear power are emerging.

Q: Could you give your high-level thoughts on how the changing political landscape might affect nuclear and Oklo’s opportunities specifically?

A: Nuclear enjoys bipartisan support. We see continued bipartisan support, focus on regulatory modernization, and potential evolution of support mechanisms like the Inflation Reduction Act. There are opportunities in the gas to nuclear combo for data centers.

Q: Could you give your high-level thoughts on how the changing political landscape might affect nuclear and Oklo’s opportunities specifically?

A: Nuclear enjoys bipartisan support. We see continued bipartisan support, focus on regulatory modernization, and potential evolution of support mechanisms like the Inflation Reduction Act. There are opportunities in the gas to nuclear combo for data centers.

Q: Could you give your high-level thoughts on how the changing political landscape might affect nuclear and Oklo’s opportunities specifically?

A: Nuclear enjoys bipartisan support. We see continued bipartisan support, focus on regulatory modernization, and potential evolution of support mechanisms like the Inflation Reduction Act. There are opportunities in the gas to nuclear combo for data centers.

Q: Got your high-level thoughts on how the changing political landscape might affect nuclear and Oklo’s opportunities specifically?

A: Nuclear enjoys bipartisan support. We see continued bipartisan support, focus on regulatory modernization, and potential evolution of support mechanisms like the Inflation Reduction Act. There are opportunities in the gas to nuclear combo for data centers.

Q: Hi, good afternoon, team. Thanks for the thorough review of developments at the company. I have two questions, one on Atomic and one on Oklo. Can you talk about the response from hyperscalers regarding the size of reactors and you have plans to increase the size to 100 megawatts and higher. Where are we in that process?

A: Our sizing is well suited for data center campuses. We see a sweet spot north of 100 megawatts. Our business model differentiation is important. We have a road map for larger sizes but see cost thresholds above which costs become marginally higher.

Q: Thank you. Very helpful. And then moving on to Atomic. I was wondering like how big this business could be? And I realize I’m jumping the gun here, but is there a per reactor formula linked to fuel recycling that we should think about longer term based on how Atomic grows with number of installations you have?

A: Atomic Alchemy has near-term and long-term stand-alone capabilities. There are opportunities for radioisotope sales before full-scale recycling facilities operate. We see significant geopolitical and economic implications in the radioisotope space, and Oklo can participate in near-term market development with Atomic Alchemy.

Q: Hi, Jake, a very good. Really enjoying it. I’ll ask an AA question as well. I was wondering if Oklo’s ability to recycle nuclear waste at pennies on the dollar, will provide any margin uplift or advantage for AA and its various radioisotope applications?

A: Recycling provides additional revenue streams from co-products like radioisotopes, which can help reduce costs of recycling facilities. It's a co-product that can be monetized, contributing to margin upside.

Q: Okay. Great. No, that was very helpful. Jake, you added excellent color on the COLA license process. To clarify, do you view each subsequent Aurora application taking the same 24 months as the first? Or could it be quicker?

A: We could have multiple applications in review simultaneously. Subsequent licenses can have shorter review times, with NRC projecting review times for subsequent licenses down to 7 months.

Q: Hey, guys. Many of my questions have already been asked. But I guess on the construction side of things, two there. What’s the time line for, I guess, groundbreak on Idaho?

A: We anticipate breaking ground as soon as 2026 for the Idaho plant. Sites are well characterized at the Idaho National Laboratory, and progress is being made through regulatory steps.

Q: Thanks for taking the questions and congratulations on the very positive announcements. My first question, if I understand it correctly, ultimately, looking into the late part of this decade, early 2030s, fuel recycling is going to ultimately need some potentially sizable external capital raise to fund that effort. Do you see the Atomic acquisition commingling helping to increase prospective low-risk project finance for such an undertaking?

A: Recycling has value in reduced fuel cost, potential rent from spin fuel, and co-products. The Atomic acquisition helps prove radioisotope sales channels, supporting project finance.

Q: Great. And then my second question, it’s kind of tied to a three-parter. So, across data centers, oil and gas, industry, and military, how do you think about the mix of your first 5 to 10 powerhouses?

A: Diversification is valuable. There are macro trends like energy transition and reindustrialization. We see a mix of powerhouses, with 50-megawatt solutions suited for data centers and 15-megawatt for other sectors.

Q: Thank you for taking my question and congratulations on the great progress and the acquisition announcement today. So, focusing on the opportunity for getting into other industries and maybe is there opportunities for like co-R&D development partnerships?

A: There are opportunities for co-R&D, especially in radiopharmaceuticals and semiconductor doping. Atomic Alchemy's capabilities and Oklo's fuel recycling can enable partnerships.

Q: Thanks for taking the question. Let me go back to one of the earlier points about the SMR competitive landscape. Given the sheer number of new entrants in the space, do you find that prospective customers are getting confused or bewildered just by the scope of offerings that are out there and trying to differentiate between them?

A: Customers are getting savvy, but there is some confusion. Oklo's business model, size, technology, and regulatory progress provide differentiation. We are an early mover with a customer-oriented approach.