Earnings call transcript: Centrus Energy Q1 2025 beats EPS forecast, stock surges

Centrus Energy reported strong financial results for the first quarter of 2025, significantly surpassing earnings expectations. The company posted an earnings per share (EPS) of $1.60, far exceeding the forecast of -$0.02. Revenue reached $73.1 million, beating projections of $70.65 million. Following the announcement, Centrus Energy’s stock surged 16.84%, closing at $84.71, reflecting investor optimism. According to InvestingPro data, analysts maintain a bullish consensus on the stock, though current valuations suggest the company may be trading above its Fair Value.

Key Takeaways

• Centrus Energy’s Q1 2025 EPS of $1.60 beat the forecast of -$0.02.
• Revenue rose to $73.1 million, surpassing expectations.
• Stock price increased by 16.84% post-earnings announcement.
• Net income turned positive, reaching $27.2 million from a previous net loss.
• Significant investments in HALEU production and supply chain expansion.

Company Performance

Centrus Energy demonstrated a robust performance in Q1 2025, with notable improvements across key financial metrics. The company reported a net income of $27.2 million, a significant turnaround from a net loss of $6.1 million in Q1 2024. This improvement was driven by increased demand for its uranium enrichment services and strategic investments in technology and infrastructure. InvestingPro analysis shows the company maintains strong financial health with a 25.2% gross profit margin and impressive revenue growth of 38% over the last twelve months. The platform offers 12 additional key insights about Centrus Energy’s financial position.

Financial Highlights

• Revenue: $73.1 million, up $29.4 million year-over-year.
• Earnings per share: $1.60, compared to a loss in the previous year.
• Gross profit: $32.9 million, up from $4.3 million in Q1 2024.
• Cash balance: $685.7 million, including $32.7 million in restricted cash.

Earnings vs. Forecast

Centrus Energy’s actual EPS of $1.60 significantly outperformed the forecasted -$0.02, marking a remarkable earnings surprise. The revenue of $73.1 million also exceeded the anticipated $70.65 million, indicating strong operational execution and market demand.

Market Reaction

The company’s stock rose by 16.84% in after-hours trading, closing at $84.71. This increase reflects investor confidence in Centrus Energy’s strategic initiatives and financial health. The stock is now trading closer to its 52-week high of $122.95, showcasing a positive market sentiment. InvestingPro data reveals analyst price targets ranging from $61 to $300, with the stock delivering a remarkable 72% return over the past year. Discover comprehensive valuation metrics and detailed analyst forecasts with InvestingPro’s exclusive research report.

Outlook & Guidance

Centrus Energy is positioning itself for future growth, with a focus on expanding its HALEU production capabilities. The company is awaiting a $3.4 billion allocation from the Department of Energy for nuclear fuel production. Additionally, Centrus Energy is targeting the deployment of its first full-scale HALEU cascade within 42 months of securing funding. With an overall financial health score rated as "GOOD" by InvestingPro, and a current ratio of 2.93x indicating strong liquidity, the company appears well-positioned to execute its growth strategy. Access the complete Pro Research Report for in-depth analysis of Centrus Energy’s growth prospects and financial stability.

Executive Commentary

CEO Amir Vexler emphasized the company’s unique position in the market: "We are the only company currently enriching uranium with US-owned, US-origin enrichment technology." He also highlighted the reliability of their technology: "Our technology is de-risked, works as designed, and delivers HALEU on time and on budget."

Risks and Challenges

• Potential delays in securing DOE funding could impact growth plans.
• Market volatility and geopolitical tensions may affect uranium demand.
• Supply chain disruptions could hinder production and delivery timelines.

Q&A

During the earnings call, analysts inquired about the impact of tariffs and the continuation of Russian uranium shipments. Management confirmed that tariffs have not significantly affected operations and that Russian shipments are ongoing. Discussions also touched on potential opportunities with the National Nuclear Security Administration and the structure of DOE funding.

Full transcript - Centrus Energy (LEU) Q1 2025:

Conference Call Operator: Good morning, ladies and gentlemen, and welcome to the Centrus Energy Q1 twenty twenty five Earnings Conference Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Thursday, 05/08/2025. I would now like to turn the conference over to Neil Nagorajan, Head of Investor Relations.

Please go ahead.

Neil Nagorajan, Head of Investor Relations, Centrus Energy: Good morning. Thank you all for joining us. Today’s call will cover the results for the first quarter of twenty twenty five ended March 31. Today, we have Amir Vexler, President and Chief Executive Officer and Kevin Harrell, Chief Financial Officer. Before turning the call over to Amir Veksler, I’d like to welcome all of our callers as well as those listening to our webcast.

This conference call follows our earnings news release issued yesterday. We expect to file our report for the first quarter on Form 10 Q later today. All of our news releases and SEC filings, including our 10 ks, 10 Qs and eight Ks are available on our website. A replay of this call will also be available later this morning on the Centrus website. I would like to remind everyone that certain information we may discuss on this call today may be considered forward looking information that involves risks and uncertainty, including assumptions about the future performance of Sentrus.

Our actual results may differ materially from those in our forward looking statements. Additional information concerning factors that could cause actual results to materially differ from those in our forward looking statements is contained in our filings with the SEC, including our annual report on Form 10 ks and quarterly reports on Form 10 Q. Finally, the forward looking information provided today is time sensitive and accurate only as of today, 05/08/2025, unless otherwise noted. This call is a property of Centrus Energy. Any transcription, redistribution, retransmission, or rebroadcast of the call in any form without the expressed written consent of Centrus is strictly prohibited.

Thank you for your participation. And I’ll now turn the call over to Amir Pexler.

Amir Vexler, President and Chief Executive Officer, Centrus Energy: Thank you, Neil. And thank you to everyone on the call today, both longtime listeners and the growing number of those joining us for the first time. This past year, and particularly these recent months, have seen Centrus make remarkable progress, putting us in a strong position moving forward. We are the only company currently enriching uranium with US owned, US origin enrichment technology backed by an American supply chain and powered by American workers. And we are proud to lead the effort to provide domestic and global customers with another market participant by standing up and restoring America’s ability to enrich uranium.

Before turning to the quarter’s performance, let me quickly address the current market dynamic. While there is ongoing uncertainty in the global trade environment, we continue to receive shipments of enriched uranium from our suppliers, and our operations have not been impacted by tariffs. Furthermore, our centrifuge manufacturing supply chain relies on a growing number of suppliers across The United States. Turning to our quarterly numbers, and as previously discussed, it is important to note that there can be significant amount of variability in our quarterly results due to the nature of our business. The majority of our revenue comes from the LEU segment, where our customers generally have multiyear contracts to take delivery of a given quantity at a given price each year.

But customers choose which quarter to take the annual delivery, and don’t always choose the same quarter every year. Revenues and margins fluctuate depending on how many deliveries happen to fall into a particular quarter, and whether those deliveries come from a higher priced or lower priced contracts. And as such, we believe our annual results are moving are more indicative of our progress. We achieved robust financial results in the first quarter twenty twenty five, including $73,100,000 in revenue, a gross profit of $32,900,000 and an operating income of $20,500,000 These results were stronger than the first quarter of twenty twenty four results, and while variation is normal for us, the large variation against the previous year’s results was due in large part to two things. First, as noted on our last earnings call, we had a brief interruption in our supply from 10x stemming from the Russian Federation’s November Twenty Twenty Four decree that has since been resolved for our pending orders.

This caused a fourth quarter shipment to be pushed into the first quarter of twenty twenty five, and second, the impact from a non recurring lower margin contract on the first quarter of twenty twenty four results. We ended the first quarter with a strong cash balance of $653,000,000 putting us in a stronger position to both weather temporary market turmoil, as well as invest in the company’s long term growth. The Trump administration is in the process of reviewing the funding activities of all federal agencies to align with the president’s priorities. We believe that the $3,400,000,000 that has been appropriated by congress to jump start US nuclear fuel production is consistent with the president’s energy dominance agenda. We are awaiting the DOE’s decision on how they plan to allocate these funds, to structure the program, and to determine the number of awardees.

We are confident in our compelling investment case as the only publicly traded, proven enricher that can meet commercial and national security needs while maximizing the government’s return on its investment. Our goal is to secure sufficient public and private capital to build our enrichment capacity. And as we await the government’s decision, we are pursuing four parallel readiness initiatives to bolster our investment case. First, we continue to strengthen our balance sheet to better position us to make the strategic investments to expand our capacity as part of the Envision public private partnership. Recall, we improved our capital position in the fourth quarter by issuing $402,500,000 of convertible senior notes.

In the first quarter of twenty twenty five, we used a part of those proceeds to redeem all of our higher yield 8.5% notes for their aggregate principal amount, to further strengthen our balance sheet and prepare centres ahead of the government’s funding decision. Kevin discuss this in more depth a little later. Second, in late November of twenty twenty four, we launched a $60,000,000 investment with several goals in mind. To restart centrifuge manufacturing readiness and expand the capacity of our centrifuge manufacturing facility in Oak Ridge, Tennessee to rebuild our supply chain and to complete engineering work. This lays the groundwork for the future large scale deployment of our technology.

The investment serves to de risk Centrus’ domestic supply chain, while reinforcing our first mover advantage in domestic centrifuge production by kick starting the process ahead of a government funding decision. Third, we continue to successfully operate our HALEU cascade at our Pikeston, Ohio facility under the operations contract to deliver HALEU that the DOE urgently needs. As a reminder, we began enrichment operations at the American centrifuge plant in Piketon in 2023, making it the first new US owned, US technology enrichment plant to begin production in nearly seventy years. Through March 31, we have achieved cumulative deliveries to the Department of Energy of approximately six seventy kilograms of HALO, in spite of the supply chain bottleneck to the 5B cylinders. A very important goal of our demo program is to demonstrate continuous, successful, and safe centrifuge operations.

And we have done so over the past nineteen months. The successful operation of the HALO cascade builds upon more than 3,500,000 machine hours of successful operations compiled during previous centrifuge testing and technology demonstration, or LEU enrichment. Our technology is de risked, works as designed, and delivers HALO on time and on budget. Furthermore, the centrifuge design can be used to produce LEU, LEU plus, HALEU, and is uniquely able to meet a range of national security needs. Our successful deployment, along with our track record of achieving milestones on or ahead of schedule and under budget, demonstrates that we provide our government with a solid investment case for the available US taxpayer funds.

And the fourth initiative is that we continue to work with both local and federal government officials to advocate for centrist and the case for keeping American taxpayer dollars in The United States to support American jobs. This includes, first, chairman Chuck Fleishman, who represents the district where our manufacturing facility in Oak Ridge, Tennessee is located and chairs the house, energy, and water development appropriations subcommittee, was instrumental in securing a large portion of the $3,400,000,000 in funding. The chairman’s congressional district is a hub for nuclear innovation, and he is a strong advocate to ensure companies in this industry are successful. And more recently, a bipartisan group of elected leaders from Ohio sent a pair of letters to energy secretary Chris Wright urging him to prioritize Centrus’s American owned, American made centrifuge technology while awarding the funds. The first letter came from 11 Ohio congressional members.

The second letter came from governor Mike DeWine, lieutenant governor Jim Tressel, senator Bernie Moreno, and senator John Huston. Both letters demonstrated the growing groundswell of public support as elected leaders forcefully speak about the importance of investing in an all American supply chain. As the House letter noted, funding our major competitors would amount to handing US taxpayer dollars to foreign state owned enterprises. Our efforts to restore America’s nuclear fuel supply chain have gained added urgency recently. We have already discussed the large and growing existing market for commercial LEU, both domestically and abroad.

It is important to note that our business case is based on current commercial market demand, and does not incorporate growth accelerators such as data centers, hyperscalers, or AI. And we know that there is a need for enriched uranium for national security purposes. We also understand the heightened need for energy security and the independence in this global trade environment. Furthermore, we know there is a potentially large future market for HALO stemming from the forthcoming advanced reactor markets. The DOE recently released supply from its HALO availability program to five advanced reactor developers.

At Centrus, we’re proud to offer the free market with an American source of enriched uranium for these domestic and international needs. We envision many paths to success, producing LEU to transition America’s existing reactors away from import, meeting America’s critical national security requirements, and fueling the next generation of reactors with HALE. With that, I will turn the call over to Kevin to walk through the numbers. Kevin?

Kevin Harrell, Chief Financial Officer, Centrus Energy: Thank you, Amir. Good morning, everyone. Centrus reported strong financial results in the first quarter, including generating $73,100,000 in revenue, an increase of $29,400,000 compared to the same quarter last year and $27,200,000 in net income compared to a net loss of $6,100,000 in the same quarter last year. In addition,

Unnamed Executive, Senior Executive, Centrus Energy: we reported a positive gross profit of $32,900,000 compared to $4,300,000 in the same quarter last year. We also utilized a portion of the $402,500,000

Kevin Harrell, Chief Financial Officer, Centrus Energy: convertible debt to extinguish our 8.5% notes and raise net proceeds of 25,400,000 under our ATM program. Our LEU business generated $51,300,000 in SWU revenue, which was an increase of $27,700,000 compared to the same quarter last year. The increase in SWU revenue was as a result of an increase in both the volume sold and the average price per SWU sold. The LEU cost of sales for SWU decreased from $23,100,000 in the first quarter of twenty twenty four to $20,100,000 in the current quarter. This was primarily due to a decrease in SWU costs, which was the result of a 48% decrease in the average unit cost of SWU sold, partially offset by an increase in the volume of SWU sold.

We ended the quarter with a gross profit of $31,200,000 in our LEU segment compared to $500,000 in the first quarter of twenty twenty four. LEU customers generally have multiyear contracts that carry annual purchase commitments, not quarterly commitments. The revenue and gross profit in our LEU business varies based upon the market conditions at the time the customer contract was signed and cost of inventory at the time of delivery. Technical Solutions generated $21,800,000 in revenue, an increase of $1,700,000 compared to the first quarter of twenty twenty four and reported $20,100,000 in cost of sales, which was an increase of $3,800,000 compared to the prior year. Our Technical Solutions segment generated $1,700,000 in gross profit, which was a slight decrease of $2,100,000 versus the first quarter of twenty twenty four.

The lower margins in the Technical Solutions segment was driven by a delay in obtaining sufficient storage cylinders to complete Phase two of the HAYU operation contract. In November 2024, the DOE extended the Phase two period of performance through 06/30/2025. Our total company backlog was $3,800,000,000 as of 03/31/2025 and extends to 02/1940. Our LEU segment backlog was approximately 2,800,000,000.0 and includes $700,000,000 of future SWU and uranium deliveries, primarily under medium and long term contracts with fixed commitments and $2,100,000,000 in contingent LEU sales commitments in support of the potential construction of LEU production capacity at the Piketon, Ohio facility. With the first quarter execution of the $800,000 agreement with KHMP, we have now entered into definitized agreements for $1,700,000,000 of the total $2,100,000,000 in contingent LEU sales commitments.

The contingent LEU sales commitments continue to depend on our ability to secure substantial public and private investment. Our Technical Solutions segment backlog was approximately 900,000,000 and includes funded amounts, unfunded amounts and unexercised options. The unexercised options relate to the company’s HALEU operation contract. In addition, the company has continued to undertake initiatives to improve its capital structure. In the first quarter of twenty twenty five, we redeemed 100% of the $74,300,000 principal of our 8.5% notes originally due in 2027, which resulted in a gain on extinguishment of 11,800,000.0 Post redemption, the company’s long term debt on its consolidated balance sheet only includes the 2.25 convertible notes.

As noted earlier, in the first quarter of twenty twenty five, our ATM program generated an additional $25,400,000 in net proceeds. These proceeds and the gross margin contributed to an ending cash balance as of 03/31/2025 of $685,700,000 which includes $32,700,000 of restricted cash. Maintaining a strong cash position continues to facilitate execution of our near term contractual obligations as well as strategic investments in our long term future. These achievements continue the progress made in 2024 by further strengthening our balance sheet to allow Yousse to pursue the investment in our manufacturing capabilities and the leveraging of investment tax credit opportunities to partially fund these efforts. The first quarter’s accomplishments and initiatives continue to better position Centrus to execute on its long term strategy to pursue adequate public and private funding with the goal of deploying its technology on a larger scale in order to restore America’s uranium enrichment capability.

Amir Vexler, President and Chief Executive Officer, Centrus Energy: With that, let me turn things back over to Amir. Thanks, Kevin. I’d like to close by reminding our investors and listeners of the imperative need to both reduce our dependency on foreign nations and to inject more competition into the market to provide customers with more alternatives. Nuclear energy enjoys resounding bipartisan support, and this administration appears to be especially bullish on its on its prospects. We are the only company with an American technology and an American workforce using an American supply chain that enriches uranium today.

All of the other commercial enrichers today are foreign government owned enterprises and cannot meet our national security needs. It is important to note that in this tariff environment, where global supply chains are being decoupled, we are also the only Enricher that actually manufactures our centrifuges in The United States using an ever growing number of suppliers across multiple states. We are one of two Enrichers to hold an NRC license to produce LEU, and the only NRC licensee for HALE production. Our technology is tested and proven. Our centrifuges have continued to safely and successfully operate over the last nineteen months and have enriched the expected output.

And finally, there is a clear demand from the market for another proven commercial enricher to provide more competition on top of our two European competitors. Approximately $2,100,000,000 of our backlog is in customer contingent LEU sales, commitments to support the deployment of our new production facility in Piketon. And we are seeing growing momentum. We definitized $800,000,000 of that $2,100,000,000 in the first quarter. In short, we meet the markets, the nation’s, and our taxpayers’ needs with a proven technology and a domestic supply chain.

I would like to close by thanking our growing list of investors, analysts, and listeners, without whom none of this would be possible. We look forward to updating you on our progress on our next earning call. With that, we are happy to take questions. Operator?

Conference Call Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys.

Your first question comes from Rob Brown from Lake Street Capital. Please go ahead.

Speaker 5: Just wanted to kinda get an update on the Department of Energy activity. I know I know you can’t sort of predict their their steps, but, you know, may maybe a sense of how the the the environment is shaping up. I know you got some political support you you mentioned, but, what what sort of the next steps you’re looking for out of the DOE at this point?

Unnamed Executive, Senior Executive, Centrus Energy: Hi. Good morning, Rob. So since the question really deals with the environment, there’s been a lot of activity. Just recently, the secretary had testified on the house as as you probably or may have heard yesterday. He was questioned exactly about that as to how fast can we spend, how fast can we go with with some of the fuel awards.

And the secretary’s answer was that they they are moving quickly and they are planning to award the $2,700,000,000. So we feel good about the fact that a lot of these funds have not really been affected by any of sort of the Doge activities out there, and the secretary has seemed to confirm that to the subcommittee. So just from our view, we are seeing a lot of activity as well. Feel there is a lot of momentum moving forward in awarding the funds.

Speaker 5: Okay. Great. And then it seems like the Russian shipment activity is continuing. Where is that at in terms of, the process? Do they still need to get, kind of order by order agreements, or or is that sort of open now to to shipments under a normal course?

Unnamed Executive, Senior Executive, Centrus Energy: As far as I know, nothing has changed since the last time we spoke about this. They require specific shipment authorizations from the Russian authorities. Really, so far they have been able to conduct their normal course of business and get the authorization. Obviously, we cannot speak or speculate on behalf of what the authorities are gonna do, but I can report that so far, their process has not impeded, any of the commitments they have to us.

Speaker 5: Okay. Thank you. I’ll turn it over.

Conference Call Operator: Thank you, Rob. Thank you. Your next question comes from Ryan Pfingst from B. Riley. Please go ahead.

Speaker 6: Hey, guys. Thanks for taking my questions. Amir, you you mentioned that you’re the only licensee for HALEU production. I’m curious if another entity wanted to pursue that license. How long would that take them, and what potential roadblocks would they face from a national security or, you know, other standpoint?

Unnamed Executive, Senior Executive, Centrus Energy: Good morning. Good morning, Brian. That that that actually is a good question, particularly now in the environment that there’s, a lot of new companies and a lot of entities, I guess, saying they have a technology or they have ways to enrich, but they do not have any footprint to license the facility or any brick and mortar. That is, in my view, a major obstacle. That is a process that takes years and it is a process that requires tens of millions of dollars to actually get an NRC license.

Now, if you are applying for a LEU license, that would be a category three facility, a higher enrichment like HALEU would be, like the category two facility, which is what we have, and is quite a bit more strict and stringent around security aspects of it. And so, the short and simple is for somebody that does not have a facility and will have to greenfield it, assuming they have a technology, because that opens up an entirely different conversation. Assuming they have a technology but no facility, no license, my estimate, we’re talking about years and tens of millions of dollars at the minimum.

Speaker 6: Appreciate that. It’s a good segue into my second question. In the past, you you’ve stated that the first full scale HALEU cascade could be brought online within forty two months of securing funding. Wondering if you have an update to that time frame as we likely get closer to the kickoff there.

Unnamed Executive, Senior Executive, Centrus Energy: Good question, Ryan. The update is I would not change any of the estimates we provided before in the estimate that you just quoted. As you know, and as we’ve reported previously, we have announced a $60,000,000 supply chain investment. And I can report to you that ACO, that’s our facility, is actively expanding the supply chain, making building improvements, qualifying parts production, and finalizing the engineering design basis as we prepare for future construction and operation of the enrichment facility. So I will not change the estimate, but I will say that we are doing quite a bit of work to to make sure that that is a solid number and that we we stay true to it.

Speaker 7: Thanks.

Speaker 6: Appreciate the detail. I’ll turn it back.

Amir Vexler, President and Chief Executive Officer, Centrus Energy: Thank you.

Conference Call Operator: Thank you. Your next question comes from Joseph Rieger from Roth Capital. Please go ahead.

Speaker 5: Hey, guys. Congrats on a strong start to

Speaker 8: the year, and thanks for taking my questions.

Unnamed Executive, Senior Executive, Centrus Energy: Good morning. So

Speaker 5: I guess two things. First, just kind

Conference Call Operator: of following up on some of

Speaker 8: the prior questions. So I guess on the Q4 announcement, you guys specifically said that you’d received at that time three, I think it was, licenses for exports from 10x. And with this update, you just kind of said that you’ve been able to continue business as normal. Should we expect that, like, going forward from here, there won’t be, like, additional number based updates of how many shipments, you know, got licenses for export. Instead, it will just be you’re able to do business unless we’re told otherwise?

Unnamed Executive, Senior Executive, Centrus Energy: Yeah. I I think we would stick to to the general terms of communication as opposed to updating shipment specific information. And, obviously, provide a little bit more detail just to give color to it, but, from from a communication, we will keep it general.

Conference Call Operator: Okay. No. That’s fine.

Speaker 9: You’re fine.

Speaker 8: And then the second item is it’s probably for Kevin. So I noticed on the balance sheet that inventory and owed inventory both jumped significantly from Q4 to Q1. And I know that there tends to be some increase in Q1, but it was a bit more than normal. Was there anything in particular driving that?

Neil Nagorajan, Head of Investor Relations, Centrus Energy0: The only thing that I would say that was the the primary drivers of that is, you know, as we’ve talked about before, we we do ship and transport inventory and end product from Saint Petersburg, Russia into The States. And when those are in route and in transit, those have quite a significant value to them, which includes both the SWU and the UF6. So that can drive up the overall total value that is reflected. And you’ll typically see and it’s reflected in the press release, an offset in the liability section. And so that’s reflected as inventories owed to customers and suppliers.

And so that would be one of the primary drivers that we have seen now.

Speaker 8: Okay. Is it something where is this indicative of near term potential deliveries for you guys? Or is it when you get it, you get it, and you make your deliveries on some unrelated schedule.

Neil Nagorajan, Head of Investor Relations, Centrus Energy0: Yeah. That’s that’s a great question. I I think it is, indicative of of a near term delivery. That’s not always going to be the case or always gonna be true, but is, a signal that that that we do have deliveries that are that are coming up as we’ve talked about in the past. Russian deliveries are typically for the most part just in time type shipments.

Speaker 5: Okay. Thanks. That’s helpful. I’ll turn it over.

Unnamed Executive, Senior Executive, Centrus Energy: Thanks, Joe. Thank

Conference Call Operator: you. Thank you. Your next question comes from Vikram Bagri from Citi. Please go ahead.

Speaker 9: Hi. Good morning. It’s Ted on for Vic. Thanks for taking the questions. I wanted to ask about tariffs.

Could you give us any insight into how that may be playing into your discussions with customers about their future orders? Has that impacted any timing of when they choose to contract? And then, on the supply chain, could you just remind us how much of the domestic centrifuge manufacturing is exposed to imports? Or just any color there would be super helpful.

Unnamed Executive, Senior Executive, Centrus Energy: Okay. Great question, Vik. So to date, we have not really seen any impacts from the current tariffs and that have been enacted. We have seen no disruption in our supply chain, again, due to tariffs. Just to serve you as a reminder, and I think it answers your second question, European competitors’ supply chain are 100% foreign based, our supply chain is made up of a growing number of our suppliers across numerous US states, so it’s fully domesticated.

So naturally, we have less of an exposure to the impact of tariffs on our supply chain than our European competitors who manufacture their machines in Europe. So I hope I answered your question. I think that the the first part of your question, you you weave customers into it. I hope I answered that as well. Yes.

Speaker 9: That was that was helpful. Thank you. And I have a follow-up question. In terms of the task orders that will be issued, could you just remind us what are the various permutations that those could take in terms of cost sharing or various other formats that the DOE might look to? And are you operating under assumption for any one of those particular to to come out?

Unnamed Executive, Senior Executive, Centrus Energy: That is a complex question that I am not sure that I can really answer because well, the way I understood your question is is would would the task orders rely on cost sharing or any other type of contracting mechanism? The answer is it would be impossible for us to predict at this point. I’d rather really not speculate at this point. So we stand ready to see what the DOE is gonna come out with. We and we will be prepared to answer in the best possible way.

Speaker 9: Got it. Thank you.

Amir Vexler, President and Chief Executive Officer, Centrus Energy: Thank you.

Conference Call Operator: Thank you. Your next question comes from Eric Stine from Craig Hallum. Please go ahead.

Neil Nagorajan, Head of Investor Relations, Centrus Energy1: Hi, everyone. Great to chat this morning.

Kevin Harrell, Chief Financial Officer, Centrus Energy: Good morning, Eric.

Neil Nagorajan, Head of Investor Relations, Centrus Energy1: Good morning. So kind of following up on an earlier question, and I completely realize this may be impossible to answer, but I’ll give it a shot. Kevin, I know you talked about the Russian deliveries, those are or the shipments, those are more just in time. But as we think about 2025, I mean, is there is there anything that we should think about in terms of timing of SWU and uranium sales? You know, it it certainly doesn’t look like in the past there’s really any rhyme or reason or seasonality to it.

So maybe just any any details just to get us all kinda thinking about things if there is a a way that that can be described.

Neil Nagorajan, Head of Investor Relations, Centrus Energy0: No. Thanks for the question. I mean, as you are aware, we don’t provide financial guidance, so there’s nothing significant or material at this time that we feel would be appropriate to bring up. I think the only thing that I might note is that, you know, our customers are utilities reactors that, you know, what ultimately they’re looking for is reloads for their locations, which are typically between eighteen and twenty four months. And so that really is the driver from a timing perspective as to how the revenues and the SWU revenues materialize from a future perspective.

So that I think to a certain extent gives you a sense of how our business works and when we would expect to see the revenue materializing, but we couldn’t get into any more details, just for the fact that we don’t provide any future earnings guidance.

Neil Nagorajan, Head of Investor Relations, Centrus Energy1: Yep. No. Understood. Just just thought part of the way through the year, but I totally get it. It’s very difficult to to call, especially not giving any guidance.

So alright. Well, obviously, you’ve got the three contracts. You’re waiting on the IDIQs. You’ve talked about that whole process. But correct me if I’m wrong, but you’ve also got an opportunity, n s NNSA opportunity that is separate.

So maybe just talk about that, you know, the opportunity from a national security perspective, confidence, next steps, etcetera?

Unnamed Executive, Senior Executive, Centrus Energy: I don’t know that I can add anything to what’s been publicly available out there from the NNSA. Just from a big picture perspective, our technology is unobligated that is able to serve national security purposes. It’s deployment ready. It really is the only technology that is operating right now that is able to meet our national security needs. I will not venture into predicting what, how, and when the NNSA may do what.

I’ll be very careful not to comment on it, but I’ll only say that we stand by and we take note of developments and we stand ready to serve.

Neil Nagorajan, Head of Investor Relations, Centrus Energy1: Got it. Thank you.

Speaker 8: Thank you.

Conference Call Operator: Thank you. Your next question comes from Samir Joshi from H. C. Wainwright. Please go ahead.

Speaker 7: Hey. Good morning, Amir, Kevin. Thanks for taking my questions. Good morning. This may be a slightly nuanced question, but can you explain the dynamics of the 48% decrease in SWU costs that resulted in nice margins for you this quarter?

Neil Nagorajan, Head of Investor Relations, Centrus Energy0: I’m sorry, Samira. Didn’t catch that question.

Kevin Harrell, Chief Financial Officer, Centrus Energy: Would you mind repeating that one more time?

Speaker 7: Yeah. Yeah. So the SUSU costs were lower cost of SUSU was lower by around 48%. Just wanted to understand, was it volume related or was it some other dynamics playing into that?

Neil Nagorajan, Head of Investor Relations, Centrus Energy0: Yeah. So I appreciate that question. And so, know, juxtaposing the revenue versus the cost, might answer this in two different ways. We did have fourth quarter deliveries that were delayed due to the Russian Federation permitting and license process that pushed increased volume into the first quarter, which significantly impacted our margin realization for the quarter. I think where you’re going with it is as it relates to cost.

For those transactions, we used average costing based upon our accounting practices. So it’s really based upon our purchases and sales and how that manifests through our system from an average costing perspective that creates, you know, what the ultimate cost is that we take to the bottom line. I think what I would say in addition to that is when you look at it year over year, should say quarter over quarter on the annual basis, we did see better gross profits and this was primarily due to the fact that last year as we noted in our remarks earlier that we had a low margin shipments from the prior year that impacted both our net income last year as well as our margin realization and that was not replicated in the current year. And the shipments that were deferred and delayed from December into Q1 had a more positive margin realization taking into account everything of that I just noted before. What was, did that answer your question?

Speaker 7: Yes. No. That was good color. Just wanted to make sure that we we understood that. Thanks for that.

Absolutely. Second question is on this, the five b cylinders. What is the status? I know they were delayed, but is there an update on that?

Unnamed Executive, Senior Executive, Centrus Energy: I think the last time we reported that we have a steady flow and fulfillment of our 5B requirements, and that statement is is still correct that there is no impact to our production from five b cylinder, sourcing.

Speaker 7: Got it. And then just one last one. Can can you speak I think a previous caller asked about this, about the speed at which a a competitive HALEU, enricher might emerge. But can can you give us the lay of the land as what areas or which companies you see as emerging competitors? I think the DOE is also in the process of doing some, more contracts for these.

Unnamed Executive, Senior Executive, Centrus Energy: So let me repeat the question. Your question is is what is the competitive landscape when it comes to HALO production in The United States. Yes. Yes. So as you know, part of the DOE’s award scope is for HALEU enrichment here in The United States.

From a competitive view, we really are the only facility that has a CAT II license, which allows you to enrich up to 19.75% to enrich HALO. LES has a facility in New Mexico. I’ve not checked lately what their license status is, I know that they’re not producing HALEU, and I don’t think they’re licensed to produce HALEU either. And so I would not venture to guess if they want to get into that business, what will it take for them to amend licenses or make modifications to their system, I do not know. I will only point to public statement that they have announced that they’re working on HALEU in The United Kingdom, not in The United States.

So, if anybody else wants to get into this game, so for example, think Orano had made some announcements, maybe not specific to HAYLOO, just generally they made announcements about, site selection. I will reference you back to the comment that I made about a greenfield licensing in general. That is something that takes years and tens of millions of dollars, and where we have a significant first mover advantage on. Other than those two competitors, I’m assuming there would be others in the competitive landscape. So, you know, LaserEnrichment, GLE, I think, made recent announcements.

We typically don’t comment on competition, but you’re more than welcome to read the general announcements. Think that we are enriching, we are a facility that has equipment and license, I believe that we have a definite advantage. Just as a reminder as well that centrifuge technology is the only proven and viable technology to address the growing demand for enriched uranium at least in the short term and the midterm as as we see it and as as the market has been responding to. Yeah. I hope that was I hope that was a comprehensive answer to your question.

Speaker 7: Absolutely. Because one of the nuance I wanted to bring out is that you have the the only licensee of the centrifuge technology in The US, and I was wondering if any other Haylou producer might, require to license that technology from you, or, will they be using, some totally different technology? I do understand centrifuge is the best and the most available right now.

Unnamed Executive, Senior Executive, Centrus Energy: Yeah. Correct. I I would not venture to speculate on competition beyond some of the established competitors that I mentioned.

Speaker 7: Understood. Fair. Thanks a lot for taking my questions.

Amir Vexler, President and Chief Executive Officer, Centrus Energy: Thanks, Sameer.

Conference Call Operator: Thank you. There are no further questions at this time. I will now turn the call over to Neil Nagarajan. Please go ahead.

Speaker 8: Thank you, operator. This will conclude our investor call for the first quarter of twenty twenty five. As always, I want to extend a thank you to our listeners online and our analysts who got called in. We look forward to speaking with you again next quarter.

Conference Call Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.

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