Earnings call transcript: Westwater Resources Q2 2025 sees stock rise despite EPS miss

Westwater Resources Inc. (WWR) reported its Q2 2025 earnings on August 14, revealing an earnings per share (EPS) loss of $0.05. Despite missing expectations, the company’s stock rose by 5.49% during trading. According to InvestingPro data, WWR’s shares are currently trading near $0.77, showing a strong 44.7% return over the past year. The company’s strategic advances in graphite production and financing efforts appear to have bolstered market confidence, though InvestingPro analysis indicates the company’s overall financial health score remains weak at 1.34 out of 5.

Key Takeaways

• Westwater Resources reported an EPS loss of $0.05 for Q2 2025.
• Stock rose by 5.49%, reflecting investor confidence in strategic initiatives.
• Construction of the Callatin graphite plant is over 50% complete.
• The company is pursuing €150 million in debt financing.
• Strong market demand for domestic battery-grade graphite supports growth prospects.

Company Performance

Westwater Resources is making significant strides in the graphite sector, positioning itself as a leading U.S. supplier of battery-grade natural graphite. The company is advancing the construction of its Callatin graphite plant, with over half of the project completed. This progress aligns with strong market demand and U.S. policy priorities for domestic battery material production, providing a positive outlook despite the EPS miss. InvestingPro analysis reveals the stock is trading at an attractive Price/Book ratio of 0.44, suggesting potential value for investors interested in the growing battery materials sector. Get access to 10+ additional exclusive ProTips and comprehensive financial metrics with InvestingPro.

Financial Highlights

• Revenue: Not specified in the call summary.
• Earnings per share: -$0.05 for Q2 2025.
• Cash position: €12 million, including recent convertible note transactions.
• Construction expenditure: $124 million, 50.2% of the total $245 million project cost.

Earnings vs. Forecast

Westwater Resources reported an EPS of -$0.05, which did not meet market expectations. This miss comes amid ongoing construction and strategic investments, which are likely impacting short-term profitability.

Market Reaction

Despite the earnings miss, Westwater’s stock surged by 5.49% to $0.73, indicating investor optimism about the company’s strategic direction and future prospects. This movement contrasts with the stock’s 52-week range, which has seen a low of $0.45 and a high of $1.319.

Outlook & Guidance

Looking forward, Westwater is pursuing substantial financing to complete its graphite plant and further its strategy of vertical integration through the Coosa deposit. The company has submitted a loan application to the Export-Import Bank of the United States, aiming to secure €150 million in debt financing. This funding is expected to cover over 50% of the required financing at attractive capital costs. InvestingPro data shows WWR maintains a manageable debt-to-equity ratio of 0.04, though its current ratio of 0.51 indicates potential liquidity challenges. For detailed insights into WWR’s financial position and growth prospects, access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Executive Commentary

CEO Frank Walker emphasized the company’s focus on execution and long-term value creation, stating, "With strong policy tailwinds, clear market demand and real progress on both construction and financing, we believe Westwater is in the right place at the right time." CFO Steve Cates highlighted the flexibility and stability in the company’s capital strategy, which he believes will support project completion and growth.

Risks and Challenges

• Capital market volatility could affect financing efforts.
• Trade policy shifts may impact supply chain stability.
• The substantial cost of plant construction poses financial risks.
• Execution risks in transitioning to full commercial production.
• Potential delays in securing necessary financing.

Q&A

During the earnings call, analysts inquired about the potential impacts of interest rate changes on financing and the follow-on potential of convertible notes. Additionally, questions were raised about the resolution of a past project settlement in Turkey, with the company confirming a $3 million recovery from arbitration.

Full transcript - Westwater Resources Inc (WWR) Q2 2025:

Conference Operator: Thank you for standing by. This is the conference operator. Welcome to the Westwater Resources Inc. Second Quarter twenty twenty five Business Update Conference Call. As a reminder, all participants are in listen only mode and the conference is being recorded.

After the presentation, there will be an opportunity to ask questions. I would like to turn the conference over to Frank Walker, President and CEO. Please go ahead, sir.

Frank Walker, President and CEO, Westwater Resources: Thank you, moderator, and good morning to everyone joining us for today’s business update call. I’m joined by Terence Kryan, our Executive Chairman and Steve Cates, our Chief Financial Officer. We appreciate your time and interest in Westwater Resources. Before we begin, I would like to remind everyone that today’s discussion will include forward looking statements. These statements reflect management’s current expectations regarding a variety of factors, project demand and pricing for natural graphite, anticipated timelines and costs associated with the Callatin graphite plant and Coosa deposit as well as upcoming capital raising activities.

As always, these statements are subject to certain risks and uncertainties, which are detailed in our annual report on Form 10 ks for the year ended 12/31/2024 and in other filings with the Securities and Exchange Commission. Please also refer to the cautionary statement included in our August 14 press release. Actual results may differ materially from those expressed or implied in today’s remarks. Today, I’m pleased to provide an update on Westwater Resources progress during the first half and second quarter of twenty twenty five. At our Callenton graphite plant, we continued construction at a measured pace.

As of June 30, we’ve incurred about $124,000,000 of the total expected $245,000,000 cost for Phase one construction. During the first half and second quarter, we advanced several key work streams, including our transition to grid power, as well as installation of all our commercial scale micronizing and shaping mills of which we commissioned two units during the quarter. Also during the quarter and throughout the first half of the year, we continue to operate the qualification line at the Callentan graphite plant. This has been an important step in both advancing customer engagement and preparing our team for commercial operations. Using our qualification line, we have produced CSPG samples in excess of one metric ton for customer preproduction sales trials and testing.

In quarter two, we took that a step further, implementing enhancements to improve cycle times and graphite flow rates, which is allowing us to optimize the line performance. The product coming from this line is representative of what we will produce at mass scale, meaning we can now provide customers with bulk batches ranging from one metric tons for their qualification activities even while Phase one construction is still underway. Just as important, the qualification line serves as hands on training for our operations team. This experience is setting us up to move quickly and efficiently when it’s time to commissioning and startup of the plant ensuring we hit the ground running when we reach full commercial production. That said, we remain laser focused on securing the capital needed to complete the build.

During the quarter, the syndication process on €150,000,000 debt financing continued and I’m pleased to report that shortly after the quarter’s end, we formally submitted our loan application to the Export Import Bank of the United States, which represents a potential complementary funding source alongside our debt syndicate. Of course, like many companies operating in today’s environment, we have felt the impact of broader capital, market volatility and trade policy shifts, but we are encouraged by the level of engagement from our financing partners and we believe the Callatin project remains strongly aligned with both U. S. Policy priorities and growing market demand for domestic battery grade graphite. From a balance sheet perspective, we ended the quarter with €6,700,000 in cash, which includes proceeds from our €5,000,000 convertible note issuance in June.

Following the quarter, we completed a follow on transaction with the same institutional investor for an additional €5,000,000 As a result, we currently have just over €12,000,000 in cash on hand. We have remained disciplined in our spending so far this year, taking a measured approach on construction at Callington that ensures we maintain forward momentum while remaining disciplined with the cash on hand. Looking ahead, we are staying focused on execution with strong tailwinds, secured customer interest and a clear path to production, we are proud to be leading the development of one of The U. S. First domestic sources of battery grade natural graphite.

Now I will turn it over to our Chief Financial Officer, Steve Cates for a deeper dive into our financing efforts. Steve?

Steve Cates, Chief Financial Officer, Westwater Resources: Thanks Frank. As Frank mentioned, financing Phase and we’ve continued to make progress on multiple fronts. On the debt syndication side, we’re advancing $150,000,000 secured facility with a group of lenders led by a global financial institution. We’ve completed an update to our third party technical due diligence, hosted site visits and advanced loan diligence and documentation. I’m encouraged by where we are today and have active engagement with lenders in the syndication.

In parallel, just after the end of the quarter, we submitted our formal loan application to the Export and Import Bank of the United States. This kicks off their due diligence process. The application requests funding that could cover more than 50% of the $150,000,000 we’re raising and at an attractive cost of capital. The XM track is entirely separate from the debt syndication, but we view it as complementary. Together, these two paths gives us optionality, flexibility and stability in our capital stack, positioning us to complete Phase one financing in a way that supports both project completion and long term growth.

Another piece of the financing picture is feedstock security. As many of you know, there were temporary disruptions at our supplier earlier this year, which did slow things down. And while those issues were resolved in the second quarter, we accelerated efforts to lock in a non Chinese backup supplier. Over the relatively near term, we expect to be finalizing the backup supply of feedstock. Long term, our strategy is to vertically integrate through our Coosa deposit.

But right now, the priority is staying flexible and doing what it takes to keep Kellington moving forward. With strong demand signals from the market, support from federal policy and multiple active funding paths, we’re confident in our ability to get this project financed and into production. And while financing is critical, it’s just one piece of the bigger picture. We’re continuing to make steady progress on construction, procurement and advancing the next phase of our domestic graphite strategy. Frank, back over to you.

Frank Walker, President and CEO, Westwater Resources: Thanks, Steve. We are generally excited about where things are headed. There is real momentum behind our projects and it’s clear that domestic graphite production isn’t just important, it’s essential. With strong policy tailwinds, clear market demand and real progress on both construction and financing, we believe Westwater is in the right place at the right time. We are staying focused on what matters most, execution, transparency and long term value creation for our shareholders.

The opportunity ahead is big and we are ready to meet it. Thanks for your continued support. We look forward to sharing more progress with you next quarter. Operator, over to you.

Conference Operator: Thank you. We will now begin the question and answer session. Our first question comes from Heiko Ihle with H. C. Wainwright.

Please go ahead.

Heiko Ihle, Analyst, H.C. Wainwright: Hey, Frank. Hello, Steve. Thanks for taking my questions. Hello? Can you hear me?

Yes. Perfect. Okay. Out of curiosity, this week the big talk on Wall Street is interest rate cuts. Cut in September is now almost fully priced in.

How much of this do you think will show up in your financing package once it gets announced? I assume the lower rate should translate at least reasonably well assuming the financing is signed after the cuts are official, right?

Steve Cates, Chief Financial Officer, Westwater Resources: Hi, Heiko. This is Steve. Yes, thanks for the question. No, I think as a project finance lowering rates is always beneficial and will always be welcome as we think about the lower cost of capital. So I would anticipate the lower cuts to be helpful in our long term growth and the final financing that we put in place.

Heiko Ihle, Analyst, H.C. Wainwright: Fair enough. And then just to clarify, there’s been two of these $5,000,000 packages that the recent convertible notes. Do they have an option or a willingness to do another one? Or is that just one and then the Stars Align did it one more, but there is no plan for anything else?

Steve Cates, Chief Financial Officer, Westwater Resources: I would say, I think the convertible notes was a good thing for investors. We were able to raise money without impacting our stock price. I think it shows our ability to raise money in the capital markets, helps risk the loan project, as far as from a lender perspective and the sponsor’s ability to add capital to the balance sheet. And so we’ll remain to be opportunistic and keep evaluating if there is potential for follow ons.

Heiko Ihle, Analyst, H.C. Wainwright: Awesome. Thank you so much. I’ll get back in queue.

Steve Cates, Chief Financial Officer, Westwater Resources: Great.

Conference Operator: Our next question comes from Ray Kelly, a Private Investor. Please go ahead.

Ray Kelly, Private Investor: Yes. Steve, I’d like to know what our position is now with Turkey and the project that was in the past, but was settled, I thought in Turkey and the amount of money, I think of $300,000,000 was settled. Is there any settlement from that in our direction?

Steve Cates, Chief Financial Officer, Westwater Resources: No, that was settled, I believe several years ago now. So we’re 100% focused on graphite, 100% focused on our Phase one financing. So we don’t have a presence in Turkey anymore.

Ray Kelly, Private Investor: So we don’t have any claim on the factory that was built in Turkey and the agreements with Turkey were nullified by Turkey and then settled by arbitration. I don’t understand you don’t there’s no money from that?

Steve Cates, Chief Financial Officer, Westwater Resources: No, we received some money back that we disclosed when that arbitration was settled several years ago. But again, we’re 100% focused on And so there’s no there’s nothing

Ray Kelly, Private Investor: you tell me what that amount was?

Steve Cates, Chief Financial Officer, Westwater Resources: I believe it was around $3,000,000 if I remember correctly.

Ray Kelly, Private Investor: As long as there’s a follow-up on it. Wasn’t aware of it. Thank

Steve Cates, Chief Financial Officer, Westwater Resources: Thank you.

Conference Operator: Thank you. As we have no further questions at this time, we will now conclude the question and answer session. This brings to a close today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant

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