Q4 2024 NuScale Power Corp Earnings Call
Good afternoon, everyone and welcome to new skills fourth quarter and full year 2024 earnings results Conference call. Today's call is being recorded all participants are in a listen only mode. After management's prepared remarks, there will be a question and answer session to ask a question at this time. Please press star one on your <unk>.
Operator: Good afternoon, everyone, and welcome to NuScale's fourth quarter and full year 2024 Earnings Results Conference Call. Today's call is being recorded. All participants are in a listen-only mode.
Operator: After management's prepared remarks, there will be a question and answer session. To ask a question at this time, please press star 1 on your telephone keypad.
Telephone keypad.
Operator: A replay of today's conference call will be available and accessible on NuScale's website at ir.nuscalepower.com. The web replay will be available for 30 days following the earnings call.
A replay of today's conference call will be available and accessible on new skills website at IR Dot new scale power dotcom.
The web replay will be available for 30 days following the earnings call.
Scott Kozak: At this time for opening remarks, I would like to turn the call over to Scott Kozak, Director of Investor Relations. Please go ahead, Mr. Kozak. Thank you, Operator.
Speaker Change: At this time for opening remarks, I would like to turn the call over to Scott Kozak Director of Investor Relations. Please go ahead Mr. Kozak.
Speaker Change: Thank you operator, welcome the new skilled fourth quarter and full year 2020 for earning results conference call.
John Hopkins: Welcome to NuScale's fourth quarter and full year 2024 Earnings Results conference call.
Scott Kozak: With us today are John Hopkins, President and Chief Executive Officer, and Ramsey Hamady, Chief Financial Officer. On today's call, NuScale will provide an update on our business and discuss financial results. We will then open the phone lines for questions.
John Hopkins: With us today are John Hopkins, President and Chief Executive Officer, and Ramsey MD Chief Financial Officer.
John Hopkins: On today's call new skill provide an update on our business and discuss financial results. We will then open the phone lines for questions.
Scott Kozak: This afternoon, we posted a set of supplemental slides on our Investor Relations website. It's reflected in the safe harbor statements on slide two. The information set forth in the presentation and discussed during the course of our remarks in the subsequent Q&A session includes four looking statements which reflect our current views of existing trends and are subject to a variety of risks and uncertainty. You can find a discussion of our risk factors, which could potentially contribute to such differences in our Form 10-K and subsequent SEC filings.
John Hopkins: Afternoon, we posted a set of supplemental slides on our Investor Relations website, that's reflected in the safe Harbor statements on slide two the information set forth in the presentation and discussed during the course of our remarks and the subsequent Q&A session includes forward looking statements, which reflect our current views of existing trends and are subject to a variety of risks and uncertainties.
John Hopkins: You can find a discussion of our risk factors, which could potentially contribute to such differences in our Form 10-K, and subsequent SEC filings.
John Hopkins: I'll now turn the call over to John Hopkins, NuScale's President and Chief Executive Officer. John? Thank you, Scott. And good afternoon, everyone. Reflected on 2024, our journey has been dynamic and rewarding, and I'm delighted by our achievement. We have significantly bolstered our financial standing. advanced the commercialization of our pioneering small modular reactor technology and laid the groundwork for sustainable long-term value creation. Shortly, Ramsey will provide insights into our financial.
John Hopkins: Now I will turn the call over to John Hopkins, New skills, President and Chief Executive Officer John.
John Hopkins: Thank you Scott and good afternoon, everyone.
John Hopkins: Selected on 2024, our journey has been dynamic and rewarding.
John Hopkins: I'm delighted by our achievements.
John Hopkins: Significantly bolstered our financial standing.
John Hopkins: We advanced the commercialization of our pioneering small module reactor technology and laid the groundwork for sustainable long term value creation.
John Hopkins: Shortly Ramsey will provide insights into our financials.
John Hopkins: I'd like to start with Key Businesses. As illustrated on slide three, we are witnessing good progress for Willpower. As you may recall, Willpower plans to develop a six-module SMR power plant with a 462 megawatt of installed capacity on the site of a decommissioned coal-fired power plant in Dorchester. NuScale is committed to supporting Romania's energy security and decarbonization initiatives. We are diligently progressing our responsibilities for row power phase two, front end engineering and design. This floor-led feed, phase two, provides meaningful revenue and cash flow for NuScale.
John Hopkins: I'd like to start with key business upgrades.
Speaker Change: As illustrated on slide three we are witnessing good progress your willpower as you may recall willpower plans to develop a six module as smart power plant with a 462 megawatts of installed capacity on the site of a decommission coal fired power plant and our chest.
Speaker Change: New scale is committed to supporting Romania's energy security and decarbonization initiatives.
Speaker Change: We are diligently progressing our responsibilities to ROE power Phase III front end engineering and design.
Speaker Change: This Florida led feed phase III provides meaningful revenue and cash flow for new scale.
Speaker Change: Moving on to slide four it is essential to emphasize that new scale stands as the sole near term deployable SLR currently available <unk>.
John Hopkins: Moving on to slide four, it's essential to emphasize that NuScale stands as the sole near-term deployable SMR currently available. In contrast, other recently announced SMR projects in the U.S. are focused on demonstration planning. Following construction, these demonstration plants will have to operate for a minimum of four years prior to the U.S. Nuclear Regulatory Commission, NRC, providing regulatory approval, which is required for commercial operations. NuScale has committed over $2 billion to develop and license our unique SMR technology, which has received design certification from the Nuclear Regulatory Commission. No other advanced reactor SMR design has submitted a standard design approval application, or SDA, to the NRC at this point.
Speaker Change: In contrast, other recently announced exit of our projects in the U S are focused on demonstration plants.
Speaker Change: Following construction. These demonstration plants will have to operate for a minimum of four years prior to the U S nuclear regulatory commission NRC, providing regulatory approval.
Speaker Change: Which is required for commercial operation.
Speaker Change: New scale has committed over $2 billion to develop and license our unique <unk> technology, which has received design certification from the nuclear regulatory Commission.
Speaker Change: No. Other advanced reactor is smart design estimated a standard design approval application or SDA to the NRC at this point.
John Hopkins: And these efforts remain years away from approval compared to our established timeline. IntraWine energy plants powered by NuScale technology are primed for immediate commercial development. We're also making headway on a technology review of our operated SDA application with the NRC, aiming to increase power output per module from our previously NRC-licensed 50-megawatt electric to 77-megawatt electric. This review is set to conclude by mid-2025. Our design upgrade is founded on the same rigorous safety principles and technical features already authenticated by the NRC in 2020. We believe that the 77 megawatt electric NuScale power module will cater to a broader spectrum of customers while enhancing economic efficiency.
Speaker Change: These efforts remain years away from approval compared to our established timeline.
Speaker Change: Extra one energy plans powered by <unk> technology are prime for immediate commercial development.
Speaker Change: We're also making headway on a technology review of our operated SDA application with the NRC.
Speaker Change: Aiming to increase power output per module from our previously NRC license 50 megawatt electric $2 77 megawatt electric.
This review is set to conclude by mid 2025.
Speaker Change: Our design up rate is founded on the same rigorous safety principles and technical features already authenticated by the NRC in 2020.
Speaker Change: We believe that the 77 megawatt electric new scale power module will cater to a broader spectrum of customers, while enhancing economic efficiency.
John Hopkins: Now let's turn our attention to manufacturing. NuScale is clearly leading the industry in this critical element of commercialization. Our supply chain partner and strategic investor, Doosan Interability, has continued to make progress advancing the first six NuScale power modules. The only NRC-approved SMRs in production. More recently, this past quarter, in coordination with Doosan and our development partner, IntraOne Energy, advanced discussions with prospective customers seeking 12-module configurations led us to long-lead material items for an additional six modules. NuScale has 12 modules in production, a testament to the confidence we have in our customer pipeline and our commitment to 2030 delivery.
Speaker Change: Now, let's turn our attention to manufacturing.
Speaker Change: New scale is clearly leading the industry and is critical element of commercialization.
Speaker Change: Our supply chain partners strategic Investor <unk> inner ability as continue to make progress advancing our first six new scale power modules.
Speaker Change: Only NRC approved <unk> and production.
Speaker Change: More recently this past quarter in coordination with <unk> and our development partner <unk> energy advanced discussions with prospective customers seeking 12 larger configurations led us to long lead material items for an additional six modules.
Speaker Change: This scale has 12 modules in production a testament to the confidence we have in our customer pipeline and our commitments through 2030 delivery.
Speaker Change: We are advancing certain activities and manufacturing license to get ahead of potential bottlenecks and commercial deployable schedules. For example, global manufacturer of lineup recently received an order to supply a steam generator tubes for new scale small modular reactors.
John Hopkins: We are advancing certain activities in manufacturing licensing to get ahead of potential bottlenecks and commercial deployable schedules. For example, global manufacturer Lima recently received an order to supply steam generator tubes for NuScale small-module reactors. On slide five, there are images associated with our manufacturing progress. This includes the production of large forgings and the maturing of our control rod drive mechanism design. Key lessons from our manufacturing readiness work are incorporated into design to save time during production work and support deployment, shortening delivery schedules significantly. Coupled with our Inter1 development partnership, NuScale's SMR technology is poised to move the exploding demand for clean energy across multiple sectors.
Speaker Change: On slide five.
Speaker Change: <unk> associated with our manufacturing progress.
Speaker Change: This includes the production of large forgings and the maturing of our control Rod drive mechanism design.
Speaker Change: Key lessons from our manufacturing readiness work are incorporated into designed to save time during production work and support deployment shortening delivery schedule significantly.
Speaker Change: Coupled with our <unk> development partnership new scales as the <unk> technology is poised to move VIX load in demand for clean energy across multiple sectors.
John Hopkins: As illustrated on slide 6, near-term energy demand in the U.S. is expected to grow at levels we haven't seen in decades. A recent IHS energy forecast anticipates a six times increase in growth electricity demand in the next 20 years versus the growth of the prior 20 years. This significantly accelerated rate of electricity consumption in the coming decades will fundamentally change the landscape of power production. The projected growth spans various sectors and is driven by the reshoring of manufacturing and electrification of many industries, including oil and gas and chemicals. However, the primary driver is a 24-7 load required by Artificial Intelligence Data Center.
Speaker Change: As illustrated on slide six near term energy demand in the U S is expected to grow at levels, we haven't seen in decades.
Speaker Change: A recent IHS energy forecast anticipates, a six times increase in growth electricity demand in the next 20 years versus the growth of the prior 20 years.
Speaker Change: This significantly accelerated rate of electricity consumption in the coming decades will fundamentally change the landscape of power production.
The projected growth spans various sectors. It is driven by the re shoring of manufacturing and the electrification of many industries, including oil and gas and chemicals.
Speaker Change: However, the primary driver is a $24 seven load required by artificial intelligence data centers.
According to a December 2024 U S Department of Energy report data centers made triple their energy use in the next three years alone.
John Hopkins: According to a December 2024 U.S. Department of Energy report, data centers may triple their energy use in the next three years alone. Under that forecast, data centers could account for as much as 12 percent of the nation's electricity consumption by 2028. The world's largest technology companies are driving this need. Microsoft recently announced that it would spend approximately $80 billion in its 2025 fiscal year to build data centers for its booming artificial intelligence business. In addition, in December, Meta announced that it is seeking up to four gigawatts of new nuclear power to help meet the company's AI and sustainability objectives.
Speaker Change: Under that forecast data centers could account for as much as 12% of the nation's electricity consumption by 2028.
Speaker Change: The world's largest technology companies are driving this need Microsoft recently announced that it would spend approximately $80 billion in its 2025% fiscal year to build data centers for its booming artificial intelligence business.
Speaker Change: In addition in December <unk> announced that it is seeking up to four gigawatts of new nuclear power to help meet the company's AI and sustainability objectives.
Speaker Change: And it's worth emphasizing that this is not about peaking demand data centers in both high capacity demand and high energy demand. So the challenges is multifaceted.
John Hopkins: And it's worth emphasizing that this is not about peaking demand. Data centers have both high capacity demand and high energy demand. So the challenge is multifaceted. Significant new energy sources are needed, both to produce enough power when usage is at its highest and to support sustained heavy levels of energy consumption over long durations.
Speaker Change: Significant new introduced resources are needed both to produce enough power when usage is at its highest and to support sustained heavy levels of energy consumption over a long duration.
John Hopkins: Yet, as seen in slide 7, the megawatts currently coming online in the U.S. are mainly intermittent sources in short-duration battery storage. Looking more closely at 2025, planned capacity additions for three major U.S. grid operators include very limited dispatchable generation. Coupled with the reality of additional fossil fuel retirements, it is clear where nuclear, and S-Mars in particular, can be a major game changer. We see massive opportunity to provide baseload clean energy. You cannot run a full-time grid on part-time power. And it's important to bear in mind that existing utilities are challenged to divert needless load from existing customers.
Speaker Change: Yes as seen in slide seven the megawatts currently coming online in the U S are mainly intermittent sources and short duration battery storage.
Speaker Change: Looking more closely at 2025 planned capacity additions for three major U S. Grid operators include very limited dispatch of older generation.
Speaker Change: Coupled with the reality of additional fossil fuel retirements. It is cleared where nuclear and <unk> in particular can be a major game changer.
Speaker Change: We've seen massive opportunity to provide base load clean energy you cannot run a full time grid on part time power.
Speaker Change: It is important to bear in mind that existing utilities are challenged to divert nuclear flowed from existing customers.
John Hopkins: In an era where more energy is necessary to fortify the U.S. electricity grid, power economic growth, and bolster America's global competitiveness, the need for new nuclear is a reality. and entities throughout our economy are taken note of.
Speaker Change: In an era, where more energy as necessary to four to five U S electricity grid power economic growth and bolster America's global competitiveness the need for new nuclear is a reality.
Speaker Change: And entities throughout our economy are taken notice.
John Hopkins: As we've discussed in the past few slides, the demand for nuclear has never been more pronounced. As viewed on slide 8, NuScale is seeing increased interest across the board from a variety of potential offtakers for different use cases. On the data center side, our commercialization partner, Inter1, is leading discussions with America's leading hyperscalers at the most senior level. and conversations are focused on powering AI. These executives understand how attractive our site boundary emergency planning zone is enabling us to locate close to the end-user. They also appreciate our off-grid capability. Critically, given the speed for which they need power, prospective customers recognize that NuScale is years ahead of other proposed SMR technologies.
Speaker Change: As we've discussed in the past few slides the demand for nuclear has never been more pronounced.
Speaker Change: As viewed on slide eight new scale is seeing increased interest across the board from a variety of potential off takers for different use cases.
Speaker Change: On the data center side, our commercialization partner enter one with leading discussions with America's leading hyperscale at the most senior levels.
Speaker Change: And conversations are focused on powering AI. These.
Speaker Change: These executives understand how attractive our site boundary emergency planning zone is enabling us to locate close to the end user.
Speaker Change: They also appreciate our off grid capabilities.
Speaker Change: Critically, giving us speed, which they need power prospective customers recognize that new scale is years ahead of other proposed SLR technologies.
John Hopkins: And they are attracted to Inter1 Energy's commercial model, which is structured to provide financial flexibility and mitigate deployment. Notably, conversations with hyperscalers also drive an increased engagement from the utilities that currently power Importantly, EnterOne provides utilities to commercial consumers with a solution to get SMR-generated energy offtake without the need to capitalize, own, or operate a nuclear energy power plant.
Speaker Change: And they are attracted to ensure one energy's commercial model, which is structured to provide financial flexibility and mitigate deployment risk.
Speaker Change: Notably conversations with Hydro <unk> are also driving increased engagement from the utilities that currently power them.
Speaker Change: Importantly, <unk> provides utilities with commercial consumers with a solution to get <unk> generated energy offtake without the need to capitalize all of our operate a nuclear energy power plant.
Speaker Change: Switching gears for a minute even as we drive our commercial initiatives new scale has not stopped innovating.
John Hopkins: Switching gears for a minute, even as we drive a commercial initiative. NuScale has not stopped innovating. As an example, our Chief Technology Officer and Co-Founder, Dr. Jose Reyes, recently published a white paper illustrating why NuScale is well-positioned to benefit from the January 2025 Department of Treasury final regulations meant to boost domestic production of clean hydrogen fuel through tax credit. As noted on slide 9, this credit is worth up to $3 per kilogram of hydrogen production for those that can qualify, for example, by using NuScale. For over a decade, we have been exploring new hydrogen technologies with industrial partners in national labs that integrate a NuScale plant with high-temperature and high-pressure steam electrolytes.
Speaker Change: As an example, our chief Technology Officer, and co founder Dr. Jose Reyes recently published a whitepaper illustrating why new scale and is well positioned to benefit from the January 2025 Department of Treasury final regulations met to boost domestic production of clean hydrogen fuel through tax.
Speaker Change: <unk>.
Speaker Change: As noted on slide nine this credit is worth up to $3 per kilogram of hydrogen production for those that can qualify for example by using new scale.
Speaker Change: For over a decade, we have been exploring new hydrogen technologies with industrial partners and National labs that integrate a new scale plant with high temperature high pressure steam electrolyze.
John Hopkins: with the end goal of decarbonizing this important sector.
Speaker Change: With the end goal of Decarbonize in this important sector.
John Hopkins: Before I turn the call over to Ramsey, I want to touch on a few factors that we view as positive for NuScale. First, while Advanced NICU has long enjoyed bipartisan support, we are pleased by the new administration's enthusiasm and sense of urgency for new NUCs. Recently, Confirmed Energy Secretary Chris Wright has a deep understanding of the needs of sectors. committing that he wants to make it easier to research, invest, and build small modular reactors. In addition, a few weeks ago, President Trump established the National Energy Dominance Council, led by Secretary of Interior Borlaug. and Energy Secretary Wright.
Speaker Change: Before I turn the call over to Ramzi I want to touch on a few factors that we view as positive for new scale.
Speaker Change: First while advanced Nico has long enjoyed bipartisan support we are pleased by the new administration, the Buzzi ads and in sense of urgency for new nuclear.
Speaker Change: Recently confirmed energy Secretary, Chris Wright as a deep understanding of the nuclear sector.
Speaker Change: Net he wants to make it easier to research invest and build small modular reactors.
Speaker Change: In addition, a few weeks ago, President Trump established a national energy dominance Council led by Secretary of Interior Bourbon.
Speaker Change: And energy Secretary right.
John Hopkins: Within a 100-day timeframe, the Council advised on how best to improve processes for permitting, production, generation, transportation, and export of all forms of American energy. This will also include actions that each agency can take to increase energy production. Importantly, the executive order specifically prioritizes bringing small-mod reactors online. This effort is a strong step towards securing our energy future and ensuring the U.S. has the resources to meet demands that AI will place on our grid. Second, as we've discussed at length, our competitive strength. Whether it's industrial electrification, process heat, or the rapidly escalating demand for the data economy, the reliable clean energy produced by NuScale's SMR technology plays a critical part in the energy solution of the future.
Speaker Change: Within our 100 day timeframe the council advice on how best to improve processes for reading production generation transportation and export all forms of American energy.
Speaker Change: This will also include actions that each agency can take to increase energy production.
Importantly, the executive order specific prioritizes bring in small and large reactors online.
Speaker Change: This effort is a strong step towards securing our energy future and share in the U S has the resources to meet demands.
Speaker Change: Replace on our grid.
Second as we've discussed at length, our competitive strengths.
Speaker Change: Whether it's industrial electrification process heat.
Speaker Change: For the rapidly escalating demand for the data economy.
Speaker Change: We have reliable clean energy produced by new skills <unk> technology plays a critical part in the energy solution of the future.
John Hopkins: Moreover, we are not burdened by the additional hurdles faced by non-light water reactor SMR technology. so-called Generation 4 SMR technologies require I-assay, low and rich uranium fuel, or HALU. Today, there is no supply chain for HALU. This fuel is not commercially available, and production efforts are impeded by national security concerns. Given global diplomatic efforts to prevent proliferation in the absence of substantive recent investment, many experts believe HALU technologies could be a decade, if not more, away from commercialization. Lastly, I cannot end without emphasizing the incredible interest and demand for the technological and safety benefits of NuScale's SMR. Potential customers understand and appreciate what sets NuScale apart, including our partnership with Inter1 Energy.
Speaker Change: Moreover, we are not burdened by the additional hurdles faced by non Lightwater reactor <unk> technologies. So call generation four <unk> technologies require high assay low enriched uranium fuel or hey, Lou.
Speaker Change: Today, there is no supply chain for Halo. This fuel is not commercially available and production efforts are impeded by national security concerns.
Speaker Change: Given global diplomatic efforts to convert proliferation in the absence of substantive recent investment many experts believe halo technologies could be a decade, if not more away from commercialization.
Speaker Change: Lastly, I cannot and without emphasizing the incredible interest in demand for the technological and safety benefits of <unk>.
Speaker Change: Potential customers understand and appreciate what sets new scale apart, including our partnership with <unk> energy.
John Hopkins: I'm proud of where we are, and I'm looking forward to updating you on our progress over the course of 2025.
Speaker Change: I'm proud of where we are and I'm looking forward to updating you on our progress over the course of 2025 now.
Ramsey Hamady: Now over to Ramsey for the financial. Thank you, John, and hello, everyone. Our financial results are available in our file.
Ramzi: Now over to Ramzi for the financial update.
Ramzi: Thank you John and Hello, everyone.
Ramzi: Our financial results are available in our filings. So my focus will be on display major line items.
Ramsey Hamady: So my focus will be on explaining major line As seen on slide 10, I'll start by discussing our financial... All figures fallen are for Q4 2024 unless I stayed up. NuScale's cash position grew substantially during the period, ending the fourth quarter with cash, cash equivalents, and short-term investments. $446.7 million compared to $125.4 million at the end of 2023. NuScale's significantly improved liquidity position provides a strong foundation for continued development and our push towards commercialization of our industry-leading, NRC-approved technology. and Q4 2024 NuScale issue a mandatory redemption warrant. Trigium conversions among warrant holders, which generate proceeds of $205.3 million in the quarter, or total cash proceeds of $227.7 million in tissue income.
Ramzi: As seen on slide 10, I will start by discussing our financial results.
I'll take this fall on our Q4 2020 core unless I state otherwise.
Ramzi: <unk> cash position grew substantially during the period.
Ramzi: And in the fourth quarter with cash cash equivalents and short term investments of $446 7 million.
Ramzi: <unk> to $125 4 million at the end of 2023.
Ramzi: <unk> significantly improved liquidity position provides a strong foundation for continued development and our push towards commercialization of our industry, leading NRC approved technology.
Ramzi: In Q4 2020 for these skill issue of mandatory redemption of warrants.
Ramzi: Tricking conversions, among warrant holders, which generate proceeds of $205 3 million in the quarter or total cash proceeds of $227 7 million since issuance and.
Ramsey Hamady: in addition to buttressing our bounds. The elimination of warrants greatly reduces earnings volatility by eliminating the non-cash impact of those derivative liabilities on our income. NuScale's cash position at the year-end 2024 provides the company with significant resources and time to achieve our goals. We will utilize these resources to support commercialization activities such as further development of our supply chain and bolstering manufacturing preparedness, including ordering laundry materials related to the production of our first 12 modules. We will also continue to nurture and mature our research development efforts to support the next generation of NuScale innovation.
Ramzi: In addition to buttressing, our balance sheet, the elimination of warrants greatly reduces earnings volatility by eliminating the noncash impact of those derivative liabilities on our income statement.
Ramzi: <unk> cash position at the year end 2024 provides the company with significant resources and time to achieve our goals.
We will utilize these resources support commercialization activities such as further development of our supply chain and bolstering manufacturing preparedness, including ore in laundry materials related to the production of our first 12 modules.
Ramzi: We will also continue to nurture and mature our research and development efforts to support next generation of hospitalization.
Ramsey Hamady: for the fourth quarter ended December 31st, 2024. NuScale reported revenue of $34.2 million and a net loss of $180.3 million. Revenue in the quarter is driven by payments for activities in support of Rural Power's development of their power. And the loss includes a non-cash expense of $170 million related to the increase in fair value. During the same period of the priority era, the company reported a revenue of $4.6 million and net loss of $56.4 million, which included a non-cash income of $6.5 million related to our warrants. For the full year 2024, NuScale's revenue was $37 million and net loss was $348.4 million.
For the fourth quarter ended December 31, 2024, new scale reported revenue of $34 2 million and net loss of $108 3 million.
Ramzi: Revenue in the quarter is driven by payments for activities in support of ROE Paris development of their power.
Ramzi: The loss includes a noncash expense of $170 million related to the increase in fair value importance.
Ramzi: During the same period the prior year the company reported revenue of four 6 million and net loss of $56.
Ramzi: 4 million, which included noncash income of $6 5 million related to our warrants.
Ramzi: For the full year 2024, new sales revenue was $37 million and.
Ramzi: Net loss was $348 $4 million.
Ramsey Hamady: with $223 million of that loss relating to cancer treatment, once again, within the fair value. Q4 2024 operating expenses were $43 million, compared to $71.8 million in the year-earlier period. The year-over-year reduction in quarterly operating expenses of $28.8 million reflects management efforts to reduce costs and operate more efficiently as we transition from an R&D-focused organization to one focused on commercialization. Furthermore, unhappily, quarterly operating expenses decreased from $69.9 million in 2023 to $42.7 million in 2024. generating an annualized savings of more than $108.6 million. That decrease in burn rate is significant. It has a meaningful impact on cash flow.
Ramzi: With $223 million of that loss relating to accounting treatment once again within the fair value of the warrants Q.
Ramzi: Q4, 2024 operating expenses were $43 million.
Ramzi: <unk> to $71 8 million in the year earlier period.
The year over year reduction in quarterly operating expenses of $28 8 million reflects management efforts to reduce costs and operate more efficiently as we transition from an R&D focused organization to one focused on commercialization.
Ramzi: Furthermore on average.
Ramzi: Quarterly operating expenses decreased from $69 9 million in 2023 to $42 7 million in 2024.
Ramzi: Generating an annualized savings of more than $108 6 million.
Ramzi: That decrease in burn rate significant it has a meaningful impact on cash management.
Ramsey Hamady: During the fourth quarter of 2024, we also reduced our operating loss to $11.9 million, compared to an operating loss of $71.1 million in the fourth quarter of 2024.
Ramzi: During the fourth quarter of 2024, we also reduced our operating loss to $11 9 million compared to an operating loss of $71 1 million in the fourth quarter of 2023.
Ramzi: Looking ahead, <unk> is well positioned to accelerate growth in 2025 module production and commercialization with entwine events.
Ramsey Hamady: Looking ahead, NuScale is well-positioned to accelerate growth in 2025 with module production and commercialization with Enter1 Advanced. We have built a strong foundation for growth based on world-class technology, a powerful global economy. and strong competitive positions.
Ramzi: We have built a strong foundation for growth based on World class technology, our powerful global supply chain and strong competitive position.
Ramsey Hamady: I will conclude my remarks with a brief overview of our capitalization table, see you on Slide 11.
Ramzi: I will conclude my remarks, the brief overview of our capitalization table.
Ramzi: On by 11.
Ramzi: With that I'd like to thank you again for joining today.
Ramsey Hamady: With that, I'd like to thank you again for joining today and for the continued support of NuScale.
Continued supportive and scale.
Operator: will now take questions. Operator? Thank you. And once again, that is star one.
Speaker Change: We will now take questions operator.
Thank you and once again that is star one if you have a question. We will go first to George John <unk> Canaccord Genuity.
George Gianarikas: If you have a question, we'll go first to George Gianarikas, Canaccord Genuity. Hi, everyone. Thank you for taking my question.
Speaker Change: Sure.
Speaker Change: Hi, everyone. Thank you for taking my questions.
Speaker Change: Maybe if you could just go into a little bit of detail around any potential bottlenecks you are seeing in <unk>.
John Hopkins: Maybe if you could just go into a little bit of detail around any potential bottlenecks you're seeing. putting pen to paper and signing an agreement with a large data center company in the U.S. Thank you.
Speaker Change: <unk> pen to paper and signing an agreement with a large data center company in the U S. Thank you.
John Hopkins: Yeah, this is John. I don't know necessarily, I'd say bottlenecks, as it is just the complexity of putting these projects together. As we stated, NuScale is the provider of power modules. Enter One will be the owner. We're in discussions with operators. We're in discussions with other contractors who are willing to build, and we continue to build out our supply chain. And we're also in discussions, obviously, with those funding mechanisms who want to participate in this. So it's not necessarily bottleneck, as I said, George. It is just the complexity of putting the deals together. But I will say, as I commented, we've just ordered an additional six modules, so we're very confident that we're getting closer to landing or closing some of these deals.
Speaker Change: Yes. This is John I don't know necessarily I'd say bottlenecks as it is just.
<unk> city of putting these projects together.
Speaker Change: As we stated new scale as the provider of power modules enter one will be the owner we are in discussions with operators. We are in discussions with other contractors, who are willing to build and we continue to build out our supply chain. So and we're also in discussions obviously with those funding mechanisms who want it.
Speaker Change: Participated in there so.
Speaker Change: It's not necessarily bottleneck as we've said George it is just the complexity of put into deals together.
Speaker Change: I will say as I commented, we've just ordered an additional six modules. So we're very confident that we are getting closer to landing and or closing some of these deals.
George Gianarikas: Clearly, thank you.
Speaker Change: Clearly, thank you and maybe just as one follow up.
Ramsey Hamady: And maybe just as one follow-up, Ramsey, can you give us a little bit more detail around the parameters or conditions met that allowed you to recognize the revenue in the fourth quarter? Sure, George. I think there's two components of the contract. One was delivery of services and the other was our work in advancing towards delivery of a service or delivery of an item. So we encountered revenue recognition in the form of two contracts. They faced along both those lines. One was in relation to licensing some technology and one was in relation to doing some self-contract around the EPC work.
Speaker Change: Ramsay can you give us a little bit more detail around the parameters are conditions met that allowed you to recognize the revenue in the fourth quarter. Thank you.
George: Sure George I think there is two components of the contract.
One was delivery of services.
George: Yes, there was.
Our work in advancing towards delivery of service started delivery of an item.
George: So we can kind of revenue recognition in the form of two contracts.
To date based along those lines one was in relation to licensing some technology.
George: And one was in relation to doing some subcontract around the EPC work.
Operator: And again, that is star one if you have a question.
George: And again that is star one if you have a question next step is Marc Bianchi TD Cowen.
Esteban Abaracino: Next up is Mark Bianchi, T.D. Cowan. Hey guys, this is Esteban Abaracino for Mark here. So you guys mentioned, yeah, the Doosan forging of the 12 reactors. I imagine, you know, six of those are intended for the Romania plant. And these additional six, those aren't yet booked by another unannounced customers, right? I think. If I'm kind of getting this correctly, you're trying to really use that to front load more of the long lead, um, sort of items to try and compress the, uh, the operation timeline of a plant for a potential customer. Is that right?
George: Hey, guys. This is Stefan I would've seen on for Mark here.
Speaker Change: So you guys mentioned, yes, the <unk> of the 12 reactors I imagine six of those are intended for the Romania plant.
George: And these additional six.
George: Those arent yet booked by another unannounced customers right.
George: I think.
Speaker Change: If I'm kind of getting this correctly, you're trying to really use that to front load more of the long lead.
Speaker Change: Sort of items to try and compress the.
Speaker Change: The operation timeline of a plant for a potential customer.
Speaker Change: Is that right.
John Hopkins: Yeah, you know, what we're doing is we feel that in discussions we're having with respective customers currently, and you're right, these long lead items, if you're not in order or placed orders by now, it's years away because they take that long for them to manufacture. So we're feeling very confident that in placing these additional six, and by the way, for those first six, it's really a first mover. We're progressing very well with row power, as we've commented before. We're in the front-end engineering and design. Things are progressing well. They go for their final investment decision fourth quarter of 2025.
Speaker Change: Yes, what we're doing is we feel.
Speaker Change: Discussions, we're having with prospective customers currently and Youre right. These long lead items, if youre not in <unk>.
Speaker Change: Order placed orders by now it's years away because they take a long for them to.
Speaker Change: To manufacturers, so we're feeling very confident.
Speaker Change: Net in place these additional six and by the way for those first six it's really a first mover.
Speaker Change: We're progressing very well with with ROE power as we've commented before.
Speaker Change: We're in the front end engineering and design things are progressing well. They go further further final investment decision fourth quarter of 2025.
John Hopkins: And as I stated before, but we're also in discussion with other customers that are looking also to be near-term deployable.
Speaker Change: As I stated before but we're also in discussion with other customers that are looking to also to be near term deployable.
John Hopkins: Esteban, if I could clarify one item that you mentioned. So NuScale is not manufacturing reactors. We are manufacturing long-lead materials in relation to 12 NuScale power modules. just to make the distinction that these are the longlead materials which we're manufacturing. And you're right. They are for 12 modules today. And to clarify, they're not for a particular customer. They're for the first customer that says, we want to buy these modules. We believe it in our best interest and our customer's best interest to engage on the forgings for an additional six, in addition to the six that we already had in production, and just push forward with these 12 longlead materials or longlead materials in relation to the 12 modules.
Tobias: As Tobias if I could find one.
Speaker Change: That you mentioned.
Speaker Change: New scale is not manufacturing reactors.
Speaker Change: Factoring long lead materials and relation to 12, new scale power modules just to make the distinction that these are the long lead materials, which were manufacturing and youre right. They are for 12 modules today.
Speaker Change: And to clarify they are not.
Speaker Change: For a particular customer or therefore, the first customer that says we want to buy these modules. We believe it in our best interest and our customers' best interest to engage on the forgings for an additional six in addition to the six that we already had in production and just push forward with these 12 long lead materials.
Speaker Change: Let me be chosen relation of 12 to 12 modules.
Speaker Change: Got it got it thank you for that.
Esteban Abaracino: Got it, got it, thank you for that.
Ramsey Hamady: Then my other one is, so the revenue from the Rural Power Feed Study, is that expected to stay around this level until the study is complete, you know, later in the year, or should we expect a deferring cadence throughout the year? I think there's some front-loading to the revenue, Esteban, but we'll continue to see revenue in relation to some of the subcontract work on EPC throughout this year. I'm fairly careful.
Speaker Change: My other one is so the revenue from the raw power feed study is that expected to stay around this level until the study is complete later in the year or should we expect different cadence throughout the year.
Speaker Change: I think there was some frontloading to the revenue.
Speaker Change: Esteban.
Esteban: We will continue to see revenue in relation to the subcontract work on EPC throughout this year.
Speaker Change: Fairly carefully.
Esteban Abaracino: I'm not providing guidance on future revenues. We tend not to do that yet. Perfect.
Speaker Change: Not providing guidance on future revenues, we tend not to do that yet.
Speaker Change: Perfect and if I can just squeeze one more.
Esteban Abaracino: And if I can just squeeze one more, so on the U.S., the $800 million grant that's out there for Gen 3 reactors, is there any update you guys can give us there?
Speaker Change: So on the U S. The $800 million grant that's out there for Gen three reactors.
Speaker Change: Is there any update you guys can give us there.
John Hopkins: You know, you guys had a competitor that announced a few weeks ago a task force to try and push for the award. Is NuScale, you know, working for something similar, you know, to get that grant or any other developments that you guys can touch upon?
Speaker Change: You guys had a competitor that announced a few weeks ago, a task force to try and push for the award.
Speaker Change: As new scale.
Speaker Change: Working for something similar.
Speaker Change: To get that ground or any other developments that you guys can can touch upon.
John Hopkins: Yeah, this is John. We're trying to get... trying to ascertain, in fact, I've got meetings this week with the Department of Energy to get more clarity around that particular award.
Speaker Change: Yes. This is John we're trying to get.
Speaker Change: Trying to ascertain in fact I've got meetings. This week with the department of energy to give more clarity around that particular award.
Clayton Scott: So as it looks right now, we're not real sure if we wanna participate at this point or not. I'll ask Clayton, Clayton's been close to this. He's our commercial officer. Clayton, do you have anything to add on that particular award? No, we're, as you said, we're evaluating it. I think we're cautious. We're not quite sure where that's going to land and how it's going to be distributed, but we're looking at it and we're in discussions with, you know, ENTRA1 and some of our offtake partners to determine whether we want to pursue that specifically.
Speaker Change: As it looks right now we're not we're not real sure. If we want to participate at this point or not I'll ask weight and Clayton has been close to this these are commercial officer Clayton do you have anything to add on that particular award.
Speaker Change: No.
Speaker Change: You said, we're evaluating it I think we're cautious we're not quite sure.
Speaker Change: Whether that's going to land and how it's going to be distributed but we're looking at it and we're in discussions with.
Speaker Change: And so one in some of our <unk>.
Speaker Change: Offtake partners can.
Speaker Change: To determine whether we want to pursue that specifically.
Speaker Change: Perfect. Thank you guys so much.
Esteban Abaracino: Perfect. Thank you guys so much.
Speaker Change: You bet.
Ryan Pfingst: The next question is Ryan Pfingst, B. Reilly. Hey guys, thanks for taking my questions.
Speaker Change: The next question is Ryan Zink B Riley.
Ryan Zink: Hey, guys. Thanks for taking my questions.
John Hopkins: As a follow-up to one of the first questions, just for your conversations with Data Center or other customers, could you just walk us through some of the items that you and Entra1 need to work through with prospective customers before being in a position to announce a project? Yeah, it's predominantly around the negotiation and finalization of long-term power purchase agreements. You know, the Inter1 model, and the reason these customers appreciate this model is because, as they stated during the call, that Inter1, they will look to build-own, transfer, or build-own, operate. We probably will not operate or sell, we'll utilize a company like AEP or someone else, but the power purchase agreements are what we're in discussions about right now.
Speaker Change: Yes.
Speaker Change: As a follow up to one of the first questions just for your conversations with data center or other customers could you just walk us through some of the items that you announced your one need to work through with prospective customers before being in a position to announce a project.
Speaker Change: Yes, it's predominantly around the the negotiation and Finalization of long term power purchase agreements.
Speaker Change: Enter one model and the reason as customers. Appreciate this model is because as I stated during the call that enter one.
Speaker Change: They will look to build own transfer our build own operate we probably will not operator, so we'll utilize a company like <unk>.
Speaker Change: P R or someone else but.
Speaker Change: The good power purchase agreements or <unk>.
Speaker Change: In discussions about right now.
John Hopkins: Got it thanks, John and then.
Ryan Pfingst: Got it. Thanks, John. And then...
John Hopkins: Can you just remind us what the next steps are for the Road Power Project and what milestones we should be looking for in 2025? Yeah, it's... As I said, we are a subcontractor to Fluor Corporation. I'm in discussions.
Speaker Change: Can you just remind us what the next steps are for the <unk> power project and what milestones we should be looking for in 2025.
Yes.
John Hopkins: <unk>.
Speaker Change: As I said, we are a subcontractor to Fluor Corporation.
Speaker Change: I'm in discussions in fact are meeting with the CEO of nuclear electric.
John Hopkins: In fact, I'm meeting with the CEO of Nuclear Electrica in two weeks at CIRA, at the Energy Conference in Houston. So right now, we take the lead from Fluor and we continue to support them in this project in the Romanian government moving this thing forward. So for what we know right now, all indications are that, you know, as what we see, it's progressing well. We'll wait after this fourth quarter, 2025, the government will determine, or nuclear electrical will determine if they're going to go forward with the final phase, which is the major production of the plant itself.
Speaker Change: In two weeks.
Speaker Change: Zero to energy conference in Houston, So right now we take our lead from Florida, and we continue to.
Speaker Change: Support them in this project and the Romanian government.
Speaker Change: Moving to sing forward so for what we know right now all indications are that as well.
Speaker Change: You see it's progressing well.
Speaker Change: After this fourth quarter 2025.
Speaker Change: The government will determine our nuclear electrical will determine if theyre going to go forward with the final phase, which is the major production of the plant itself.
Ryan Pfingst: Understood. Thanks for that.
Speaker Change: Understood Thanks for that.
Eric Stine: And next up is Eric Stine, Craig Hallam. and John A. Ramsey. Hey, so maybe just on the uprate, I mean, obviously it sounds like quite confident and you've stuck with that mid-2025 date for some time. Just wondering, can you detail kind of the steps that are left or is it just getting through the process? And then I'm just wondering, you mentioned the pipeline and clearly a strong testament in your confidence there with the six more modules along lead time materials, I mean, are customers waiting for this? Is this something that with that in hand that potentially speeds up the process of securing that first customer?
Speaker Change: The next step is Eric Stine Craig Hallum.
Hi, John Hi, Ramzi.
Speaker Change: Okay.
Speaker Change: Hey.
Speaker Change: So maybe.
Speaker Change: Just on the upgrade I mean, obviously it sounds like quite confident and you've stuck with that mid 2025 date for some time just wondering I mean can you detail kind of the steps that are left or is it just getting through the process and then I'm. Just wondering you mentioned the pipeline and clearly is a strong testament and your confidence there with the <unk>.
Speaker Change: More module is a long lead time.
Speaker Change: Materials are.
Speaker Change: Customers waiting for this is this something that with that in hand that potentially speeds up the process of securing that first customer how should we think about that.
John Hopkins: How should we think about that? Yeah, actually, the power operate to 77 is progressing well, we're pretty much have completed all the technical requirements for the NRC. Now it's a matter of just going through the process administratively. I am myself and a few others were meeting with the NRC this week, including the mostly with the commissioners, but also with David Wright, who's also the chairman of the NRC, and You know, we're this close. I mean, I'm hopeful that we're ahead of schedule, we're on schedule. And once we get finalization of that 77 megawatt, we're off to the races.
Speaker Change: Yes, actually the power up rate to 77 is progressing well, we're pretty much have completed all of our technical requirements for the NRC now it's a matter of just going through the process administratively.
Speaker Change: Myself and a few others, we're meeting with the NRC this week, including.
Speaker Change: Sure.
Speaker Change: Mostly with the commissioners, but also with David.
Speaker Change: David Wright, who is also.
Speaker Change: The chairman of the NRC and.
Speaker Change: We're this close.
Speaker Change: I'm hopeful that we are ahead of schedule and we are on schedule and once we get.
The finalization of that 77 megawatt.
Speaker Change: We're off to the races like right now were dear term deploy it but we could be building currently that's why we've ordered these long lead items in anticipation of what's going to come.
Clayton Scott: And like right now, we're near term deployable. We could be building currently. That's why we've ordered these long lead items in anticipation of what's gonna come.
Speaker Change: And the pipeline claim you have anything to add.
Clayton Scott: fundapipeline, Clayton, you have anything to add? I think the key issue is that having these LLMs in order certainly helps us expedite the first project and getting into the pipe. So we're trying to focus on early deployment and expedition of the project, so this will certainly help us in that first 12-module plan. Got it. Very helpful.
Speaker Change: No I think the key issue is that having these.
Speaker Change: <unk> and order certainly helps us expedite the first project and getting into the pipe.
Speaker Change: We're trying to focus on early deployment in expedition of the projects. So this will certainly help us in that first our first 12 months of plant.
Got it very helpful. And then maybe last one just you mentioned, obviously this huge demand for nuclear power.
Ryan Pfingst: And then maybe last one, just you mentioned, obviously, this this huge demand for nuclear power. But there's also balancing that with taking that power from existing off takers.
Speaker Change: But theres also balancing that with taking that power from existing.
Speaker Change: Off takers.
John Hopkins: So are you seeing any change to the view of traditional nuclear and restart plants that are out there? I mean, we all know the handful of names that are out there. But whether it's additional plants that maybe have been mothballed for longer or expansions, I mean, is there anything out there that would indicate that that has the potential to help this? Or do you really view that this is SMRs and SMRs alone that can really add? Yeah, I don't know how many plants that could actually restart, you know, we've heard of the ones, you know, Three Mile Island, etc.
Speaker Change: Are you seeing any change to the view of traditional nuclear and restart.
Speaker Change: Plants that are out there I mean, we all know the handful of names that are out there, but whether it's additional plants that may be have been mothballed for longer or expansions. I mean is there anything out there that would indicate.
Speaker Change: That has the potential to help this or do you really view that this is <unk> and <unk> alone that can really add to this.
Speaker Change: Yes, I don't know how many plants that could actually restart we've heard over the lives of three mile Island et cetera.
Speaker Change: I do believe it's.
John Hopkins: I really do believe it's, it's the small modular reactor play going forward. You know, it's because I just don't know of many that could actually do a typical large gigawatt size restart. All right, thank you.
Speaker Change: Small module reactor play going forward.
It's.
Speaker Change: Yes.
Speaker Change: Because I just don't know of many that could actually do it typical large gigawatt size restart.
Speaker Change: Alright. Thank you you have another view of that I mean, you are close to it.
Clayton Scott: Clayton, do you have another view of that? I mean, you're close to it. I think you're correct. I mean, there really is not many. There's not that many more plants that can come out of the restart program. And clearly, you know, they're looking at extensions of some of the units, but that's still taking time. But yes, I mean, we're at a point now where additional plants are going to have to be put on the grid. And, you know, based on when we look at the technologies, clearly the SMRs, I think, are going to be a strong component of that mix.
Speaker Change: No I think Youre correct I mean, there really is not any theres not that many more plants that can come out of the restart program.
Speaker Change: And clearly they're looking at extensions of some of the units, but that's still taking time, but yes. I mean, we're at a point now where additional plants are going to have to be put on the grid.
Speaker Change: And based on when we look at the technology is clearly the <unk> I think are going to be.
Speaker Change: One component of that mix and we're ready to do that and support it and we look forward to being first out of the gate to get there.
John Hopkins: And we're ready to do that and support it. And I look forward to being first out of the gate to get there. You know, and we comment about Doosan frequently. In fact, we just had meetings with them this week, but we're also in discussions with other suppliers, strategic suppliers that we've noted earlier, IHI out of Japan.
Speaker Change: And we comment about do sign frequently in fact, we just had meetings with them. This week, but we're also in discussions with other suppliers strategic suppliers that we've we've noted earlier.
Out of Japan.
John Hopkins: Thank you. Doosan, GS Energy, and we continue to build out that. We announced with Almeda that we're in other areas other than just forging. So these things are complex, and that supply chain and those strategic partners are critical for our success, and we continue to build upon that.
<unk>.
Speaker Change: <unk> energy and we continue to build out that we announced.
Speaker Change: <unk> media that were in other.
Speaker Change: He has other than just forging so these.
Speaker Change: These things are complex and that supply chain and those strategic partners are critical for our success and we continue to build upon that.
Speaker Change: Okay. Thank you.
Ryan Pfingst: Okay, thank you.
Operator: And that does conclude our question and answer session.
Speaker Change: And that does conclude our question and answer session I would like to hand, the call back to new skills CEO, John Hopkins for any additional or closing remarks.
John Hopkins: I would like to hand the call back to NuScale's CEO, John Hopkins, for any additional or closing remarks.
John Hopkins: Yeah, thank you, Operator. We truly are a first mover in this space. We're poised to commercialize and deliver clean energy of scale. We believe NuScale technology is essential in meeting world's energy needs. And again, as I stated before, we are the leader poised to deliver safe-scaled and reliable carbon-free power.
Speaker Change: Yes. Thank you operator, we truly are a first mover in this space, we're poised to commercialize and deliver clean energy of scale.
Speaker Change: We believe new scale technology is essential in meeting world's energy needs and again as I stated before we are.
Speaker Change: <unk> poised to deliver safe scalable reliable carbon free power.
Operator: And we want to thank you for your interest in NuScale and looking forward to future calls. Thank you, Operator. Thank you, sir.
Speaker Change: We want to thank you for your interest in new scale and looking forward to future calls. Thank you operator.
Speaker Change: Thank you Sir once again that does conclude today's conference. Thank you all for your participation you may now disconnect.
Operator: Once again, that does conclude today's conference. Thank you all for your participation. You may now disconnect.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].