NuScale Power Corporation (SMR) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary indicates a mix of positive and neutral aspects. Financial performance and shareholder return plans are neutral to positive, with improved cash position and reduced capital expenditure guidance. However, the Q&A reveals uncertainties, like no specific guidance on expenses and delayed project timelines, impacting the overall sentiment. The market cap suggests moderate volatility, leading to a neutral stock price prediction.
Key Financial Performance
Liquidity and Capital Resources $489.9 million as of June 30, 2025, a $31.5 million decline from the prior quarter but an increase of $359 million from the same quarter in the prior year. The increase year-over-year was driven by improved financial management and operational efficiencies.
Revenue $8.1 million for the quarter ended June 30, 2025, compared to $1 million during the same period in the prior year. This increase was primarily driven by fees received from engineering and licensing work, as well as other pre-commercial operational date services provided in support of the RoPower project.
Operating Expenses $44.9 million for the quarter ended June 30, 2025, compared to $42 million during the same period in the prior year. The slight increase was attributed to consistent quarterly spending and management's disciplined approach to cash management.
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Operating Highlights
Second NRC approval for 77-megawatt electric design: NuScale received a second approval for its 77-megawatt electric design in Q2 2025, advancing its commercialization efforts.
Applications of SMR technology: NuScale's SMR technology is being applied to carbon-free baseload power for advanced data centers, AI systems, water desalination, hydrogen production, and industrial process heat.
Global commercialization partnership with ENTRA1: NuScale sells its power modules to ENTRA1, which develops, finances, and operates energy plants using NuScale's SMR technology.
International expansion in Romania: NuScale is supporting RoPower in developing the first SMR power plant in Romania at a decommissioned coal-fired plant site.
Revenue growth: Revenue increased to $8.1 million in Q2 2025 from $1 million in the same period last year, driven by engineering and licensing fees from the RoPower project.
Operating expenses: Operating expenses rose slightly to $44.9 million in Q2 2025 from $42 million in the prior year, with expectations of further increases in H2 2025 due to material purchases.
Regulatory tailwinds: NuScale benefits from U.S. government support for advanced nuclear technologies, including executive orders and funding under the Inflation Reduction Act.
Nuclear talent development: NuScale opened two new E2 centers in South Carolina State University and George Mason University, bringing the total to 11 globally, to train the next generation of nuclear professionals.
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Risk or Challenges
Regulatory Challenges: While NuScale has progressed beyond R&D to commercialization, not all regulatory actions will directly benefit the company. The company must navigate complex regulatory environments, and there is a need for streamlined NRC approvals for faster deployment.
Supply Chain Readiness: NuScale anticipates increased operating expenses in the second half of 2025 due to purchases of long-lead materials to enhance manufacturing and supply chain readiness, indicating potential challenges in maintaining cost efficiency.
Financial Sustainability: Despite a robust liquidity position, NuScale reported a $31.5 million decline in liquidity from the prior quarter, which could pose challenges if revenue growth does not keep pace with expenses.
Market Competition: Although NuScale is ahead in SMR technology, other SMR technologies are in development, which could increase competitive pressures in the future.
International Project Risks: The RoPower project in Romania, while generating revenue, is still in the engineering and licensing phase, and its success depends on a final investment decision and further progress, posing risks to international expansion.
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Guidance & Outlook
Revenue Expectations: NuScale expects operating expenses to increase during the second half of 2025 as purchases of long-lead materials increase to enhance manufacturing and supply chain readiness.
Market Trends: Strengthening regulatory tailwinds are supporting the nuclear power industry, driven by executive orders to deploy advanced nuclear reactor technologies and bipartisan support for carbon-free advanced nuclear projects. NuScale expects to benefit from shortened regulatory timelines for new deployments and a bolstered domestic nuclear supply chain.
Business Segment Performance: NuScale anticipates an order in 2025 for its NuScale power modules, driven by growing interest in its technology and its critical use cases.
Strategic Plans: NuScale continues to support the development of the first SMR power plant in Romania, which is expected to generate revenue and positive cash flow from engineering and licensing fees, as well as pre-commercial operation date services. The company is also working towards a final investment decision with Fluor for this project.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you quantify the operating expense increase in the second half and clarify if it relates to the earlier plan to increase long-lead item procurement?
A:Management did not provide specific guidance on numbers but indicated the increase aligns with efforts to develop 12 modules, supply chain, and commercialization of NuScale. They emphasized disciplined OpEx management over the past 6 quarters and a methodical increase to prepare for commercial contracts.
Q:Does Fluor's potential change in equity stake affect NuScale's business outlook or go-to-market strategy?
A:Management clarified that Fluor owns Class B units exchangeable to Class A shares and that Fluor's actions regarding their shares are independent decisions. NuScale's go-to-market strategy remains unchanged, consistent, and unaffected by Fluor's ownership decisions.
Q:How many modules can Doosan produce annually, and what would it take to order long-lead items for another 6 modules this year?
A:Doosan can produce up to 20 modules per year. Management highlighted the importance of maintaining discipline and noted that visiting Doosan's advanced production facilities has been a significant marketing tool.
Q:Has the Q2 uprate approval led to increased customer engagement or elevated discussions?
A:Yes, the uprate approval has prompted additional conversations with potential customers who were previously in a holding mode. Management emphasized that NuScale is the only company with two NRC approvals for small modular reactors, differentiating them from competitors.
Q:What are management's thoughts on the regulatory environment and its impact on competitors?
A:Management highlighted their use of conventional fuel and readiness for near-term deployment as key differentiators. They expressed hope for streamlined regulatory processes to benefit the industry but noted that NuScale is already well-positioned due to their advanced licensing and supply chain progress.
Q:What mandates or directions in recent executive orders are most beneficial for NuScale?
A:Management noted that site-specific licensing benefits NuScale the most due to their advanced licensing status and near-term deployability. They also highlighted bipartisan support for advanced nuclear energy as a positive factor.
Q:What is the expected structure of the first project in terms of partners or power users?
A:The first project is being developed by ENTRA1, NuScale's strategic partner. ENTRA1 is in discussions with hyperscalers, utilities, and process-oriented companies. Many entities prefer not to own nuclear assets but seek 24/7 clean energy.
Q:What is the status of active customer negotiations and their focus areas?
A:NuScale is in discussions with the U.S. government, utilities, hyperscalers, and process-oriented companies. Management emphasized that ENTRA1 is their primary customer, responsible for developing power plants and selling power to end users.
Q:Can you quantify the progress on the Phase II FEED study for RoPower and its next steps?
A:Management stated that Fluor is the prime contractor for RoPower, with NuScale as a subcontractor. The final notice to proceed is expected in mid-to-late 2026 or early 2027, and NuScale continues to support Fluor with engineering requirements.
Q:Does NuScale have the capacity to handle multiple module orders simultaneously?
A:Yes, NuScale's model is designed for manufacturing modules in a factory setting, allowing for multiple projects simultaneously. However, management emphasized the importance of not exceeding execution capacity and focusing on securing a hard contract.
Q:Is the second half of the year critical for securing customer commitments to avoid financial strain?
A:Management acknowledged the importance of securing customer commitments but emphasized a measured approach to investing in long-lead materials and supply chain activation without overextending shareholder funds.
Q:Are there any industry trends in project financing or third-party ecosystems?
A:Management noted significant interest from large-scale U.S. and international capital sources in financing projects using NuScale technology. They emphasized the importance of scale infrastructure investment for reinvigorating nuclear energy in America.
Q:Are there similar trends internationally in terms of customer interest?
A:Yes, there is significant international interest, particularly in Finland, Sweden, and Germany. However, NuScale is currently focused on U.S.-based customers and the Romania project.
Q:What is the latest update on the RoPower project timeline and milestones?
A:The final investment decision for RoPower is now expected in late 2026, with ongoing support from NuScale as a subcontractor to Fluor. The timeline has been slightly pushed out, but the project remains on track.
Q:What is the status of U.S.-based customer discussions and executive order impacts?
A:NuScale is focused on securing hard contracts with U.S.-based customers by the end of 2025. Executive orders are expected to streamline construction and operation licensing, benefiting NuScale's advanced licensing status.
Q:Review of Unclear Management Responses
A:Management avoided providing specific numerical guidance on the operating expense increase in the second half, citing a lack of specific guidance policy. Additionally, they did not provide detailed updates on the progress of the Phase II FEED study for RoPower, only stating general timelines and ongoing support.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Act
Chief
Conference
Craig
Design
Doicesti
ENTRA
Group
Inc
Investor Relations
LLC Research
NRC approval
Officer
President
Research Division
SMR technology
University
afternoon
approval manufacturing
capability
carbon
center
commercialization
deployment
design
energy application
facility power
leader
need
order
power module
reactor technology
standard
technology Slide
SMR Transcript
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Positive5-7
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Positive2-27
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Positive11-7
The earnings call summary and Q&A indicate strong financial health, strategic partnerships, and optimistic guidance. The announced TVA agreement and partnership with ENTRA1 are positive catalysts, suggesting future revenue growth. Despite some vague responses on cost uncertainties and operational history, management's confidence in strategic plans and financial stability supports a positive outlook. Given the company's small-cap status, these developments are likely to result in a positive stock price movement in the next two weeks.
NuScale Power Corporation (SMR) Q2 2025 Earnings Call Transcript
Unknown8-7
The earnings call summary indicates a mix of positive and neutral aspects. Financial performance and shareholder return plans are neutral to positive, with improved cash position and reduced capital expenditure guidance. However, the Q&A reveals uncertainties, like no specific guidance on expenses and delayed project timelines, impacting the overall sentiment. The market cap suggests moderate volatility, leading to a neutral stock price prediction.
SMR Slides
NuScale Q1 2026 slides: revenue miss overshadows strategic wins2026-05-07
NuScale Q4 2025 slides: liquidity surges as project revenue declines2026-02-26
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SMR Report
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