Q3 2025 NuScale Power Corp Earnings Call

Speaker #3: Good afternoon and welcome to Nuscale's third quarter 2020 five Earnings Results conference call . Today's call is being recorded . A replay of today's conference call will be available and accessible on Nuscale's .

Speaker #3: Investor Relations website. The web replay will be available for 30 days following the earnings call. At this time, for opening remarks, I would like to turn the call over to Rodney McMahan, Senior Director of Investor Relations.

Speaker #3: Please go ahead .

Speaker #4: Thank you . Operator . Welcome to New Scales , Third Quarter 2020 Earnings Results . Conference Call . With us today are John Hopkins , President and Chief Executive .

Speaker #4: And Ramsey Hamady chief Financial Officer . On today's call , we will provide an update on our business and discuss our quarterly financial results .

Speaker #4: We will then open the phone lines for questions . This afternoon we posted a set of supplemental slides on our Investor Relations website , as reflected in the Safe Harbor statement on slide two .

Speaker #4: The information set forth in this 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 our subject to a variety of risks and uncertainties .

Speaker #4: You can find a discussion of our risk factors , which could contribute to differences in our expectations in our annual Report on Form 10-K for the year ended December 31st , 2024 , and our Quarterly Reports on Form 10-q and our subsequent SEC filings .

Speaker #4: I'll now turn the call over to John Hopkins , President and Chief Executive Officer .

Speaker #5: Thank you , Rodney , and good afternoon , everyone . Nuscale continues to be ahead of the competition as we remain the first and only small modular reactor technology provider to obtain design approval from the US Nuclear Regulatory Commission , or NRC , making our technology ready for commercial deployment .

Speaker #5: The pipeline of potential offtakers for power generated by new skills . Technology is stronger than ever , and we believe we are nearing a realization of a commitment to deliver nuscale power modules at scale .

Speaker #5: Now turning to slide three . We list Nuscale's third quarter highlights , which we'll discuss in more detail in a moment . They include the recent Tennessee Valley Authority or TVA , and intra one energy announcement on the deployment of up to six gigawatts of new nuclear capacity using Nuscale technology .

Speaker #5: The continued work on phase two front end engineering design for fee to study for the low power Dorchester Power plant and the critical strengthening of our cash position as we enter this vital stage of commercialization .

Speaker #5: We are excited about the significant momentum we have continued to build this quarter . Turning to slide four . In September , our global strategic partner enter won announced the landmark agreement with TVA to deploy new nuclear generation capacity powered by new skills .

Speaker #5: SMR Additionally , just last week , the white House announced it will mobilize up to $550 billion in public and private sector investment to expand critical energy infrastructure and strengthening supply chains under the newly signed US Japan framework Agreement .

Speaker #5: technology . This project marks the largest SMR deployment program in the US . History . It contemplates capacity of six gigawatts , which represents a total deployment of approximately 72 Nuscale power modules and up to six intra one energy plants , and the TVA territory , which covers all of Tennessee portions of Alabama , Mississippi , Kentucky , Georgia , North Carolina , and Virginia .

Speaker #5: As part of this initiative , intra one is positioned to receive up to $25 billion in investment capital to develop a fleet of power plants utilizing baseload energy sources .

Speaker #5: The only developer that was included in this framework , the program will serve fast growing energy demand for AI data centers , advanced manufacturing , and national defense .

Speaker #5: While creating thousands of high quality American jobs in reinforcing US energy independence . We anticipate the first intra one energy plant to deliver power to TVA as early as 2030 , with additional plants phased in as demand grows .

Speaker #5: Before moving on , I want to take a moment to further highlight our relationship with intra one . For over three years , we have been working with intra one on the deployment of our SMR technology , and with this historic TVA announcement , as well as the US , framework agreement , our commercialization strategy is starting to resonate .

Speaker #5: This is a pivotal time for the nuclear sector , driven by favorable regulatory policy and increasing power demand . As that demand for reliable , always on and carbon free power grows , we believe our partnership with intra one enables off takers to benefit from nuclear power without taking on plant ownership or operational risk .

Speaker #5: We believe that benefit , combined with our supply chain readiness and being the only company within our approved SMR designs in modules currently in production , uniquely positions nuscale to meet this important moment in conjunction with the TVA and internal announcement , we entered into a partnership milestone agreement , or PMA with intra one to accelerate the commercialization of our SMR technology .

Speaker #5: As outlined in slide five . Under this agreement , new scale will provide milestone based payments to enter won as projects advance through key stages as outlined here .

Speaker #5: As it relates to the PMA milestone , one was met on September 2nd , 2025 , when the agreement was announced . Ramsay will discuss this milestone later in the call , but I want to take a moment to explain a little bit more about the milestone payment structure .

Speaker #5: These payments reflect project costs that scale would typically occur later in the process , such as development , project management , and other services .

Speaker #5: By accelerating these payments , we are helping intra one reach key milestones more quickly , unlocking financing and speeding up construction . We believe this upfront commitment secures new skills .

Speaker #5: Technology as a foundation for the largest planned SMR program in history, with a marquee energy off-taker in the form of TVA.

Speaker #5: As we lay out slide six , establishing a PMA with a strategic decision to catalyze commercialization , motivate our supply chain to invest , facilitate multiple projects , and accelerate the deployment of new skills , technology .

Speaker #5: Looking ahead , this model is designed to be repeatable and scalable . We'll discuss specifics in a moment , but it's important to note that our PMA with intra one is a template for additional projects , both in the US and globally .

Speaker #5: And since the TVA and intra one announcement , we collectively have seen a strong uptick in interest from other potential off takers who want to deploy SMR solutions , as well as from our supply chain partners eager to support the commercialization of our technology .

Speaker #5: Turning to slide seven . With the 77 megawatt Uprate now successfully approved by the NRC , our regulatory license affair team has shifted its focus to the combined operating license application , or Cola management process , to ensure the effective commercial development in deployment of new skills .

Speaker #5: SMR technology at multiple into one power plants . For background , the Cola builds on the NRC approval Nuscale already has , but is submitted by the customer .

Speaker #5: Includes site specific information . It is an integral step in bringing full scale commercial nuclear power plants that will provide safe , scalable , reliable and carbon free power to market .

Speaker #5: We believe no company is more familiar with the licensing process for SMR . The new scale . Not only do we have an in-depth technical knowledge of SMR plants , but we have over ten years experience successfully navigating regulatory licensing processes and proven pre-application NRC engagement strategies .

Speaker #5: We believe this expertise makes Nuscale uniquely qualified to lead Cola development , and we are eager to take this next step towards deployment .

Speaker #5: Moving to slide eight , Nuscale continues to work with floor to support Role Power's goal of developing and deploying the first SMR power plant in Romania at Dorchester , the site of a decommissioned coal fired power plant .

Speaker #5: While the coal plant itself is now entirely removed , supporting infrastructure such as roads , switchyard and grid connection remain intact for repurposing as raw power works towards deploying nuclear capacity .

Speaker #5: The project continues to generate revenue and positive cash flow for scale in connection with the floor led to study as this critical work on the power project continues .

Speaker #5: We're also working with floor to obtain their input for final investment decision , expected in late 2026 or early 2027 . Before I hand it over to Ramsey , I want to take a minute to comment on the market tailwinds we see for new scale .

Speaker #5: We all know the challenges and the opportunities facing the US and global energy system . Demand for reliable , always on electricity is increasing and the key sectors of the US economy is driving it .

Speaker #5: Industries like data centers , AI , advanced manufacturing and critical infrastructure , along with the broader electrification trend . These sectors are expanding at a pace we have not seen before , and they require power that simply cannot go offline .

Speaker #5: In scale . Is uniquely positioned to provide the power these injuries seek by being the only technology approved to provide behind the meter power .

Speaker #5: At the same time , the US is focused on strengthening its energy independence , ensuring grid stability and supporting economic growth in regions that are attracting new investment and high value jobs .

Speaker #5: Utilities and industry leaders are looking for solutions that deliver on reliability, scale, and long-term value. We believe new scale SMRs can deliver on these needs.

Speaker #5: The project involving Nuscale , Enter one and TVA demonstrates this , and that is why it is so significant , not just for our company , but for the entire nuclear community .

Speaker #5: A new scale as the leader in this space could not be better positioned to meet other off takers needs , both in the US and around the world .

Speaker #5: Now over to Ramsey for the financial update .

Speaker #6: Thank you John , and hello everyone . Our financial results are available in our filings . So my focus will be on explaining major line items , which can be found on slide nine .

Speaker #6: New scales , overall liquidity has increased to 753.8 million at September 30th , 2025 versus 489.9 million at June 30th , 2025 . This increase was driven by the sale of 13.2 million new scale class A shares .

Speaker #6: Through an aftermarket program during the third quarter , which generates 475.2 million in gross proceeds , partially offsetting this increase was 148.5 million payment in relation to the PMA milestone triggered by the recent landmark agreement announced by TVA and enter one use coal reported revenue of 8.2 million for the quarter ended September 30th , 2025 , compared to a half million during the same period in the prior year .

Speaker #6: This increase was primarily driven by fees received for services we provide during the quarter. In support of the report, our project.

Speaker #6: I will conclude my remarks with a brief overview of our capitalization summary , as shown by an overview of the recent agreement between Fluor and Nuscale , which allows a structured , orally modernization of its investment in scale .

Speaker #6: The open market transactions and subject to certain agreed upon restrictions . Under the terms of the agreement , Fluor may convert all its new scale class B units into class A common stock through a controlled program intended to preserve the fair value of equity during the process .

Speaker #6: In exchange , Fluor has agreed to support new skills planned increase that's authorized share count significantly reduced economic rights under the tax receivables agreement , and waive certain claims asserted under its commercial agreements with Nuscale .

Speaker #6: With that , I'd like to thank you again for joining today and for your continued support of Nuscale . We'll now take questions .

Speaker #6: Operator .

Speaker #3: Thank you . We will now begin the question and answer session . If you would like to ask a question , please press star .

Speaker #3: Then the number one on your telephone keypad to raise your hand and enter the queue . If you'd like to withdraw your question at any time , simply press star one .

Speaker #3: Again , thank you . Your first question comes from Derek Soderberg with Cantor Fitzgerald . Your line is open .

Speaker #7: Hi , this is Drew Norquist calling for Derek . Thank you guys for taking questions . I have I have two questions . First is regarding your supply chain .

Speaker #7: I saw that Doosan signed an agreement to deliver fore Westinghouse AP and hundred for a different company . I'm just wondering how that's going to impact your ability to secure supply .

Speaker #5: No , we've our relationship with Doosan is we communicate almost every other day . The Doosan has come out and publicly stated they have the current capacity of producing 20 nuclear power modules per year .

Speaker #5: And looking to expand that as needed . So they have a huge facility . So it's not just limited to nuscale , but we have a the focus that they have on a new scale .

Speaker #5: Modules is dedicated to Nuscale .

Speaker #7: All right . Thank you . And then you briefly mentioned the US and Japan Agreement . Can you just go in a little bit further detail on that and how it affects you guys ?

Speaker #6: Sure . Look , I think what we can what we can surmise from that , which is absolutely incredible achievement with with one is that we were named we're the sole Seoul group that was named Antoine energy was the Seoul group named under development for AI .

Speaker #6: And so , you know , this is really a historic time . The agreement between Japan and the US is extraordinary . It's a show of support from a long standing strategic partner of scale .

Speaker #6: So recall we have we have great support from Jbic , Chubu Jgc and II . And to be named specifically and solely in this one area really shows that .

Speaker #6: I think it's really a testament to the connectivity and the importance of our technology , both to Japan as a manufacturing partner as well as potentially customer , and to America in our stakes for clean power to drive AI .

Speaker #6: So this this was this was a tremendous accomplishment , really . I think from if I can say to one group and look at the other names that were named here , SoftBank , GE , Kiewit , Bechtel , Westinghouse , you know , name it like Hitachi .

Speaker #6: These are Mitsubishi . Even these are the biggest names in in technology . These are big names in power . And for us in one to be named inclusive in that group .

Speaker #6: It's really extraordinary achievement . I'm glad you brought that up .

Speaker #5: Yeah I'd like to add reiterate , I'd like to add and reiterate what was stated . I mean , inter one was the only developer mentioned and intra one they're looking to develop a fleet of power plants utilizing baseload energy sources .

Speaker #5: And so the program will serve for fast growing demand for AI data centers as Ramsey alluded to , but also national defense and manufacturing .

Speaker #5: So we were quite excited about being mentioned in that group of of companies .

Speaker #8: Yeah .

Speaker #7: Future .

Speaker #6: I would further add one other point . I think as people , you know , a lot , a lot , a lot of people would ask early on who's enter one where the capacities , what is their connectivity .

Speaker #6: And I think this past quarter , both with this agreement with Japan as well as the announcement in relation to TVA that I'm sure we'll be asked about , we'll speak about later in this call .

Speaker #6: I think we've shown the markets , we've shown everyone just how far this combination of scale can take us . And so so this is again , like I think the details are still emerging of this .

Speaker #6: But really to accomplishment , we're super proud and we're grateful to be included in this .

Speaker #7: Well thank you guys .

Speaker #3: Your next question comes from the line of Eric Stein with Craig-hallum . Your line is open .

Speaker #9: Hi , everyone . Thanks for taking the questions . Can we just start ? Hey , can we just start with the the TVA setup ?

Speaker #9: You've got ? I mean , just to be clear , because I , you know , I've taken some questions and it's clear that some people are a bit confused by it , but we should view this as this is a very critical step towards getting to your goal , which is a firm agreement .

Speaker #9: By the end of 2025 . This isn't necessarily that step , but it is a great indicator that you've kind of got all of the pieces in place , and now it's about getting that PPA signed .

Speaker #9: Is that right ?

Speaker #5: Yeah . That's correct . I mean , I'm sorry . Go ahead .

Speaker #6: No . Go ahead please .

Speaker #5: No , no , I mean , this just didn't happen overnight . It was a long term , almost a year between TVA and one coming to terms in terms , the term sheet .

Speaker #5: And to your point , what we're excited about for new scale , you know , this represents 72 potential modules on multiple sites with intra one .

Speaker #5: So we are excited about it . And TVA also being a government entity , although they're you know , they operate like a public or privately or public company .

Speaker #5: Having the government stature behind it . I think it's going to be a good thing . So enter one is already in the process right now of hopefully finalizing these PPAs and then this thing , it becomes very real .

Speaker #5: I don't know if Clayton's on the phone . Clayton is our chief commercial officer . He's been intimate in working through this process .

Speaker #5: Are you on Clayton ? Yeah .

Speaker #10: John , I'm on . Thanks . And yeah , this is something that , as John stated , we've been working for quite some time , and it's it's an exciting opportunity .

Speaker #10: And like a enter one is getting ready to move this forward . And we'll be prepared to support the path and , and bring this to fruition .

Speaker #9: Got it . Very exciting . No doubt . So we'll stay tuned on that . And then maybe just on the agreement that you announced today with Fluor , just on the monetization .

Speaker #9: In there , you talk about that , you know , waiving certain I'm trying to look waiving certain claims related to commitments . Can you just talk I mean does that change at all , you know , or signal something on floors .

Speaker #9: Commitment . Is it unchanged or is that , you know , maybe opening it up that you can work with Fluor and you can work with others ?

Speaker #6: Eric , I'm going to I'm going to take your question and use it as kind of a stepladder to , to talk more broadly about the agreement , because I think it just came out and I think it requires some clarity here .

Speaker #6: You know , like , think , think of two ideas . The first is there's a natural maturation of scale , right ? Essentially where a technology company , we don't develop projects .

Speaker #6: Enter one is a project developer . There are exclusive commercial partner . Our strategic partner . And Fluor is an EPC company . I think strategically , you know , for an EPC company to have such a heavy investment in a pure tech company , you know , it may not align , may not align fully with with an EPC company , shareholders .

Speaker #6: And this is a natural maturation for fluor's investment . They've been invested for a very long time . New scale has grown significantly at some point .

Speaker #6: I think we're north of 80 or 90% of their market cap . I believe . And look , we're all market savvy here .

Speaker #6: Like , you know , we understand that different investors have different objectives and you scale . Investors have seen , you know , like a 15 x return since our lows over the past two years .

Speaker #6: Amazing . An EPC investor doesn't necessarily look for that sort of risk return profile . So I think it's natural for Fluor just to to see a maturity of their investments that will also support .

Speaker #6: It's not breaking the relationship . We've made contact with Fluor . You know , there's still we still provide engineering work to Fluor , still sits on the board .

Speaker #6: Entr1 still has had decades of experience with Fluor . So we just you know , we designed a framework where pleural exchange and monetized in like a very deliberate , very orderly manner .

Speaker #6: We're working together . The program is structured to have minimal impact , even as a shareholders . So we expect Fluor has decided as well as we have to have minimal impact on the market .

Speaker #6: And then the idea of like the reduction of economic rights is value delivered to our shareholders because there are economic rights under the B units .

Speaker #6: And Fluor has agreed to give some of those up . So that's a win for us . And certain rights related to commercial agreements with new Scale , I think it just , you know , it is a release of certain obligations , of new scale in relation to some EPC work , but again , as we've evolved , we're not really developing projects .

Speaker #6: So it's just it's just a logical outcome of this .

Speaker #9: No . That's great . I mean , that's kind of how it read . But just wanted to confirm . So I appreciate it .

Speaker #9: Thank you .

Speaker #6: Yeah . Thank you .

Speaker #3: Your next question comes from Leanne Hayden with Canaccord Genuity . Your line is open .

Speaker #11: Good afternoon everyone . Thanks so much for taking my questions . Just want to follow up on the intro one TVA agreement discussed prior .

Speaker #11: What do you view as the gating factors to enter one site evaluation or construction permit ? NRC application .

Speaker #10: Well , I think I think one of the yeah , John , I think I think one of the benefits of working with intro one and TVA is , you know , they clearly have a number of sites that have gone through previous preparation approvals , early site permits .

Speaker #10: So that falls in well with the strategy of focusing on tier one sites to move forward . So I think the evaluations that I've seen in participated with intro one and TVA that we have a clear view on which sites make sense to progress .

Speaker #10: And the benefit is , is that TVA is well suited to to support that .

Speaker #11: Okay . Thank you . And to the extent that there are any limitations on your ability to raise incremental equity , given the monetization agreement with Fluor , how do you anticipate needing enter one milestone payments ?

Speaker #6: Yeah . Hi , this is Ramsey . How are you ?

Speaker #11: I'm good . Randy , how are you ?

Speaker #6: Good , good . Look , I think as we've demonstrated , you know , even during the quarter , we were able to raise a fair amount of cash from the markets .

Speaker #6: Sensible amount of cash . I should say . You know , any of the quarter , over $150 million worth of cash , the restrictions that we've put in terms of our our ability to raise funds are in line with our budgeting , and they're in line with our objectives to support shareholders and ensure that there's not selling pressure in the market .

Speaker #6: That is is excessive or that starts to distort market pricing . So we've taken a very careful consideration of what the milestone payments are when we anticipate to receive them or to pay them .

Speaker #6: Pardon me . And there funding liquidity needs . There's there's been a lot of work that goes in behind that .

Speaker #11: Understood . Thanks everyone .

Speaker #6: Thank you .

Speaker #3: Your next question comes from Joseph OSHA with Guggenheim Partners . Your line is open .

Speaker #12: Hi there guys . Thank you for taking my my question . I was wondering if we could return to N2 one a little bit .

Speaker #12: Obviously , Wadi Haboush and Robert Hamady are very well connected guys and done some digging there , but I'm trying to understand has anyone ever built or owned or operated anything ?

Speaker #12: And if they haven't , I guess where where are the boots on the ground going to come from ? Because it looks all respect due to these guys .

Speaker #12: They're very well connected . There are pictures of them with Trump and so forth . But I'm trying to understand where the actual operational capabilities and history of intro one are .

Speaker #12: Thank you .

Speaker #5: Yeah , I can start , you know , they're an independent global energy company and they have a , you know , to your point , over 45 years as a bush group , years of experience delivering large scale energy and infrastructure projects worldwide , in fact , at .

Speaker #5: Part of the due diligence we went into the program was looking at their extensive knowledge of building coal fired plants , combined cycle plants .

Speaker #5: So they've had a lot of it's not a it's a family name , but it's not well known in industry . But they've had significant experience in building these plants globally .

Speaker #5: And you know , you've been working pretty closely with them . Clayton . And part of your part of that due diligence process .

Speaker #5: Do you have anything else to add ?

Speaker #10: No , I mean , they you know , they've built a lot of plants . They've they've also done a lot of large scale infrastructure projects globally .

Speaker #10: They have the ability to ramp up and bring in significant partners . They're relationships are are far and wide , not just from a political perspective nor on the financial side .

Speaker #10: They're certainly tied in the infrastructure companies and , you know , they they they had at one time prior to them divesting it .

Speaker #10: So they they have a lot of experience in my opinion , as far as building infrastructure and ramping . So , you know , they've done a lot of diligence on the technical side and on the construction side .

Speaker #10: And we're quite confident that they will they will be ready to promote these plants and move them forward . .

Speaker #5: Yeah . You made a good point , though .

Speaker #12: Can I can I can I follow up here . It sounds to me like you're talking about Habbush group , which is fine .

Speaker #12: There's no information about any projects on intro . One . That intro one is done at all . And if it's Habbush group , that's fine .

Speaker #12: That's that's a big company . And , you know , they've done a lot and that's great . Are you telling me that intro one has built and operated projects ?

Speaker #12: And I guess if so , what ? Because there's no information about any of them on their website .

Speaker #6: Guys , let me let me , if I may . Yes we are , we are talking about the principles of venture , one that that have developed projects .

Speaker #6: Right . That's really set up . It was set up for that purpose . Intra energy transition . That was the focus of the company .

Speaker #6: And so I would shy away from the idea that anyone hasn't developed , for example , a small project because nobody has . I shy away from the idea that one , you know , may not be able to build power plants because everyone doesn't pour concrete and , you know they're not operating yellow trucks .

Speaker #6: Right ? Internal is hiring the biggest TPC companies and construction companies with experience in energy and infrastructure to do this work . Their developer , it's not like they're not out there building the power plants .

Speaker #6: So I think we just we need to pause for a second separate what what the value of entropic and their ability to to coordinate projects to bring in partners to get deals and , and the partners that they bring in that can execute and have executed on power plants in the US and elsewhere .

Speaker #6: And that's really what we're talking about . Guys .

Speaker #12: All right . We'll take this up further . Thank you . I appreciate the additional color .

Speaker #6: Yeah . No worries .

Speaker #3: Your next question comes from the line of Soundarya Iyer with B Riley Securities . Your line is open .

Speaker #11: Hi , team .

Speaker #13: Thank you for taking the taking my questions . I'm asking on behalf of Ryan Pfingst . So my first part would be like , what ?

Speaker #13: What ? What's your confidence level that we see a binding agreement with TVA in the near term and what has to be done for that to happen in the near term ?

Speaker #13: And secondly , is TVA agreement is the main one . What we are looking for as a firm order , or is there a possibility that we could see some another agreement jumping in line ?

Speaker #6: On this .

Speaker #8: One .

Speaker #10: I think I you know , I think there's there's limited information we can provide on the details of where they are contractually . But we're we're very confident that things will move forward in a timely manner .

Speaker #10: And we're excited about it . And also , in addition to what they've announced with TVA , you know , there pipeline is is fairly robust .

Speaker #10: And we anticipate to see some other things coming in the near term future . And some of that is probably aligned with some of the reasons mentioned earlier around , you know , the Japan deal .

Speaker #10: So so we're confident that intro one will be moving forward with some other announcements . But regarding TVA , all we can really say is that they're they're trying to finalize their documents and agreements at this point .

Speaker #5: There was a a few weeks ago , we had a it was at the combined nuclear Energy Institute , American Nuclear Society . There was about , I know , 1600 people there , and we were on stage with the CEO of TVA , Don Maul , myself and the CEO of intro one .

Speaker #5: And , you know , we kind of walked through the process of TVA and and the CEO of TVA was very bullish on wanting to get cleared .

Speaker #5: And they're working with other companies , as you know as well . But bottom line , we're still the nearest term , the nearest the company .

Speaker #5: That's near term deployable . And we can , in fact , we are the only company can do behind the meter . And we've gone through the NRC process .

Speaker #5: So if you want to expedite and if this administration wants to move quickly , it's with new skill .

Speaker #13: Got it . No thank you . Thank you for the color . Just to follow up on the financing question , asked earlier .

Speaker #13: So once you hit the milestone two , could you give some color on your avenues to finance these payments , especially as they become greater in size ?

Speaker #13: I think it's 35% .

Speaker #6: Yeah . Look , we have we have a number of avenues to finance the payments . We have cash on hand . We have capital markets activities and and you know , it is our expectation that soon we will have revenue producing activity .

Speaker #6: And so I don't think we're we're very concerned about the ability to finance this . I think for us it's more the idea , look over idea isn't how we finance the partnership agreement that that that I think we can see a way to and people who , you know , who follow us , who understand our movements in the market , who see our capacity to raise funds , understand that I think the important part of the partnership milestone agreement is that this is a catalyst , the money that we're investing here is a catalyst to commercialization .

Speaker #6: This is pushing projects forward . And so how do we fund the PMA payments ? Well , it depends how many . How many Smrs are in PMA .

Speaker #6: If it's 12 or it's 24 , the maximum within that bucket before it moves to OEM is 24 . Can we fund the 24 ?

Speaker #6: Yeah , we can absolutely fund we can fund it off our balance sheet today if we want to .

Speaker #13: Now yeah , that makes sense . Thank you guys . And wish you luck I'll turn it over .

Speaker #8: Thank you . Thank you .

Speaker #3: Your next question comes from Dimple Garci with Bank of America . Your line is open .

Speaker #14: Thank you . Good evening . Team , could you please help provide some clarity on how many of those six gigawatts under TVA are likely to reach a binding milestone under your partnership agreement ?

Speaker #14: And what are the expected timing and economics for for Nuscale ? And then the second part to that is , have any payments been made today to recognized ?

Speaker #14: And how do you envision recognizing revenue and cash from intra one milestones across 2026 to 2028 ? Thank you .

Speaker #6: Clay , you want to take the first part of that ? I'll take the second .

Speaker #10: I didn't understand , I didn't catch the very first part . So .

Speaker #6: How many how many of the six , six projects do we do ? We hope to achieve with TVA ? And what what time frame ?

Speaker #6: I think the answer would be all six .

Speaker #10: Yeah . Correct .

Speaker #6: Time .

Speaker #8: Frame .

Speaker #6: Maybe you can provide some insight into what you think of the development timeline .

Speaker #10: I think I think as we mentioned earlier in the call , that , you know , we're looking at timeline as soon as 2030 for Cod on the first plant and then , you know , a follow up thereafter .

Speaker #10: But yes , the intention is to is to fulfill the full six gigawatts .

Speaker #5: Yeah . And don't forget , we've already got 12 modules under production for the first plant , which is , you know , hopeful by the end of the decade , will be cod .

Speaker #5: As Clayton said , that , you know , each of these plants are 12 module plants , which , you know , ultimately represents 72 modules .

Speaker #5: You know , to further suppliers and us to bring to these sites . So right now where our focus is to get the first one in the ground and running .

Speaker #10: And then for ones working on what that model layout is , and that's , you know , they'll , they'll , they'll reveal that to us at the appropriate time .

Speaker #6: Yeah . In terms of our accounting treatment , I think precise explanation of how we have accounted for the first set of payments .

Speaker #6: So stage one of the pay and they agreement that's included in our 10-q under our accounting policy . And there's more details about the PMA .

Speaker #6: And I think that's better for you to refer there . But I will say that it's been expense as it shows up as an expense in our in our income statement , PMA payment two TBD .

Speaker #6: I think our preference obviously , is the capitalized rather than expense , but but that's but that's TBD and we'll figure it out when we get to the when we get to the PPA and we'll determine what looks like , we'll determine what the appropriate accounting treatment is .

Speaker #6: I think on the third stage of the milestone payments , the OEM agreement , I think we're fairly certain there of our ability to capitalize those expenses , which will then be deducted from future revenues .

Speaker #6: But again , I would refer you to the Q to just take a look at our accounting policies and how we analyze the first , first payment .

Speaker #14: Terrific . Thank you .

Speaker #3: Your next question comes from the line of Bryan Lee with Goldman Sachs . Your line is open .

Speaker #15: Hey guys . Good afternoon . Thanks for taking the questions , Brian . Hey , how's it going ? I know a lot of questions around this .

Speaker #15: You know , TVA . So apologies in advance because I have a few more . So the the agreement here is targeting , you know , six gigawatts and it looks like based on the first milestone payment , you made this quarter , you know , you're you're targeting the full six gigawatts , as you mentioned .

Speaker #15: As you know , during part of the call , TVA is looking at other options across the nuclear technology spectrum . You know , I won't name the names , but it's been in the press .

Speaker #15: And so if TVA decided rather than doing six gigawatts , they they want to do just throw a number out there , 1.5GW , one gigawatt with with nuscale Npm's .

Speaker #15: Do you get that money back from Entr1 or does it roll over to another development like you're paying basically for six gigawatts on a non , you know , binding basis ?

Speaker #15: But what happens if the they never take that to fruition and get to , you know , get to PPA on the full six gigawatts .

Speaker #6: Yeah Brian that it's a great question . And so the payments would roll into the next project that those term sheets not materialize into a PPA agreement .

Speaker #6: So so it's not like it's money out the door , it's money gone . That that kind of stays in the system . And I think another important concept here is that once we start the machine and once you have continued movement from term sheet to PPA to OEM , as we expect , as we commercialize , as we scale up , you'll start , you'll start to see those payments kind of rolling through and they'll become they'll almost become self-funding through projects because that's really what it is .

Speaker #6: Brian . This is you know , it's like we develop a technology . We manufacture , you know , an SMR . H1 is a wholesale distribution partner .

Speaker #6: And and they place those smarts into projects . And so these PMA payments , these are all just baked into the business plan .

Speaker #6: It's baked into the economics . Really . This is a question of timing for us rather than a question of like absolute , you know , financial impact .

Speaker #6: So by forwarding the timing of some of those payments , by forwarding that into one , it allows them to commercialize faster , allows us to catalyze like this , you know , this kind of this progress , this great momentum that we have .

Speaker #6: And ultimately and , you know , we we say this firmly , we think this is in the best interest of shareholders to to push this forward .

Speaker #15: Yep . Understood . That makes sense . Your second question I had was just , you know , Ramsey and Clayton , I think you guys have spent a lot of time on this call sort of talking about Interorgan and articulating why that's the right partner , the right approach to go to market .

Speaker #15: And then also on the financial terms, there’s lots of commentary around how the payments work and having the funding in place to be able to satisfy the milestone payments all the way through the PPA.

Speaker #15: I guess the the big question that we all have on our mind is when does new scale get paid from Entr1 ? And I would presume it's at PPA , but if you get to PPA on the six gigawatts based on , again , you said it's in the queue , there's over $3 billion of payments .

Speaker #15: You will have paid to enter one over the course of all these milestone payments to get to PPA . So my simple question would be when you get to PPA and you get into a , you know , an equipment agreement with them , do they do you anticipate you'll get $3 billion in on day one to , to pay that money back , or is that a ratable .

Speaker #15: Sort of revenue rec over multiple years where you you still don't accrue $3 billion plus that you've spent with Entr1 until year ? Pick your number T plus , I don't know , but just can you give us a sense I understand the milestone payments .

Speaker #15: That's that's specified in very clear detail . How how are you guys going to monetize this and what's the timeline for at least recapturing the 3 billion plus ?

Speaker #15: You would have paid to , to enter one by that point in time ?

Speaker #6: Yeah . Brian , I will give you a partial answer and maybe Clayton can hop in as well . I think the the example of getting six gigawatts worth of SMR orders immediately or within a very short period of time , you know , aspirational and probably not a likely outcome , even just given supply chain and capacity constraints , to deliver a smrs .

Speaker #6: It's not to say that we don't expect to get every single one of those , but we hope to . But it's not going to happen all at once .

Speaker #6: When we talk about the PMA payments , I think that we we can discern between some of the our ability stage PMA payments , like the , you know , the term sheet and OEM .

Speaker #6: Excuse me term sheet and PPA versus the OEM payment . And I think on the OEM payment , that will be a net cash positive for Nuscale because as money is owed in relation to OEM contract that we receive , the final stage of that PMA in relation to an SMR , we also receive money for production .

Speaker #6: And so I would I would kind of cut in half what the anticipate the actual cash out because we can really net . We anticipate netting the third milestone payment .

Speaker #6: So so so just to say , yeah , like when you look at an overall scale , like do we pay out $3 billion if we can meet an order for 72 .

Speaker #6: Probably not , because we do think that there's an effect on the third payment . And we think that , you the orders will come in stages .

Speaker #6: Brian , as I said once , that engine starts running , once we start moving projects through the pipeline , similar to the pipeline , those payments will become self-funding .

Speaker #15: Okay . Understood .

Speaker #6: We'll follow up . Was was that clear for you ?

Speaker #15: Yeah . No , I mean , we're we're all searching for more details , but we'll take some of this offline . Thank you .

Speaker #15: Ramsey .

Speaker #6: Sure .

Speaker #8: Of course .

Speaker #3: Your next question comes from the line of Marc Bianchi with TD Cowen . Your line is open .

Speaker #16: Hey , thanks . I guess , and you kind of talked about this earlier . And then mentioned it in the conversation just now with Brian that the first .

Speaker #16: Projects that move towards this next milestone of a PPA wouldn't be the full 72 , but maybe it's 12 or 24 modules and I mean , first part is maybe just correct me if I'm understanding that incorrectly and then the real question is , you know , how do you or how does Entr1 anticipate entering into a firm PPA agreement with TVA if the cost might be a bit of a moving target , how do they that that's a kind of a classic challenge with all of these .

Speaker #16: First of a kind projects . So I'm just kind of curious how how that's being addressed .

Speaker #6: Okay . I'll let you take that one .

Speaker #10: Well , I , I have to be I think we have to be cautious . I mean , I can say that I think the discussions around the PPA and the cost structure are the pricing structure .

Speaker #10: I think is somewhat established . And , you know , I don't think they're going to get into a firm PPA unless that is resonates to allow them to move the project forward positively .

Speaker #10: So I don't think we can really go into details , but I'm that that that's really not a that's really not a part that that would be of concern to me .

Speaker #16: But Clayton , does that mean that there needs to be , you know , a long series of front end engineering work to kind of clearly identify that cost to give certainty and comfort to , to TVA as an off taker and to enter one who would be presumably taking the risk if if there is a cost overrun .

Speaker #10: I think all of that is kind of factored into , you know , the final net number , you know , on the on .

Speaker #10: The cents per kilowatt . But I think , I think , yes , they're all contributory , but I think they've all been kind of identified from what I can understand .

Speaker #16: Gotcha . Okay . And then the other one I have was just on , on road power . So , you know , still looking for end of 26 , early 27 for for an FID .

Speaker #16: Are there going to be any interim updates on that project as the Feed study progresses ? Is there any anything that we can look out for on the horizon that would , you know , be an intermediate update ?

Speaker #5: Yeah , we we talked to real power Mark almost once a week . In fact , we were I was just talking with the CEO of Nuclear Electric , who Royal power comes under .

Speaker #5: So as you remember , we're we're a subcontractor to Florinus . We're doing a feed phase two right now . They're paying us .

Speaker #5: We got our licensing payment . They're looking at FTP . Final notice to proceed towards end of 2026 2027 . So we'll definitely keep you updated as this project goes along quarter by quarter .

Speaker #17: Right ? Right .

Speaker #16: Okay .

Speaker #5: The right now to your point , I mean we we've not , as I stated before , you know , we're getting paid .

Speaker #5: And it's been a good project . It's Romania is very aggressively trying to establish their own central Eastern European manufacturing hub as summer .

Speaker #5: So we're hopeful there successful . They have you know , they have their own regulator . They they're into the nuclear with Cernavoda with Candu reactors .

Speaker #5: So it's not that they're unfamiliar . It's hopefully we're hoping they can get the funding necessary to carry it on to , you know , the final phases of projects .

Speaker #16: Yep , yep . Okay . Thanks for that , John . Just one more real quick to go back to the the intro , one arrangement and TVA .

Speaker #16: So the the 500 million or 495 . That that's going for this first milestone . You guys talked a little bit about it in the prepared remarks .

Speaker #16: I think about sort of giving supply chain certainty and stuff , but that's a that's a lot of dollars . Could you maybe go through a little bit more about , you know , what one's going to use that money for ?

Speaker #16: And , you know , kind of how it , how it helps move the project forward .

Speaker #6: So I can answer that . I think the short answer is that everyone pushes that money into project development . You know , like , so I don't have a source that uses to share , but we know that Antoine has pushed forward with this term sheet .

Speaker #6: There's there's six projects to develop . There's sites that have been named , there's early work to be done . So a lot of that just goes into catalyzing the the commercialization of our technology .

Speaker #6: I mean , it's not , you know , we're we're not we're not we're not sitting there and , you know , we're not saying there and kind of taking taking like a take , you know , taking like a fine tooth comb to , to , to to spend .

Speaker #6: Except that the spend is towards projects . It's towards development of our projects . And I think this is the most critical thing for any scale is , is to forward these .

Speaker #6: Right . We know that one has done a lot of work here . They put a lot of effort into these projects . They continue to put a lot of effort first dollars in are very , very difficult and very challenging to get .

Speaker #6: And this is supportive of the commercialization. I think that's, and you know, you've developed more nuclear plants than I have.

Speaker #6: So you probably can articulate what the early development looks like better than I can on this one.

Speaker #10: I think you I think you stated it . Well , I mean , there's , there's , there's six projects , but up to six projects and there's a lot of , there's a lot of front end work that needs to be done .

Speaker #10: So , you know , it's all to it's all to catalyze and move this forward .

Speaker #17: Yep , yep .

Speaker #16: Okay, guys, thanks so much. I'll turn it back.

Speaker #6: Great .

Speaker #8: Thank you .

Speaker #3: Your next question comes from Vikram Bagri with City. Your line is open.

Speaker #18: Good evening everyone . I wanted to follow up on a few questions asked previously . Obviously aware of the principles that intro one and they're standing in the industry , but the entity itself is new and appears that the entity does not have much in terms of assets as of yet .

Speaker #18: And as you're aware , nuclear deals are complex . So if for any reason this deal doesn't go forward or , you know , so to say this , this plays devil's advocate , this marriage , corporate marriage ends up in divorce .

Speaker #18: How do you protect your interests? The payment you're making is quite substantial: $500 million. Are there any safeguards in place to protect your interests?

Speaker #18: If things don't go as planned ? Is there anything in place to to sort of safeguard or protect that that payment ?

Speaker #6: Yeah . Look , I'll tell you . Yes . Are there safeguards ? Absolutely . The money that we put out now for the term sheets in relation to TVA will roll out other term sheets for other projects .

Speaker #6: So TVA somehow disappear , right . But I don't like I still struggle . And I guess the market continues to struggle with this idea of who one is and what they've done right .

Speaker #6: I there was so much questioning about the intro . One team about the principles of one , the backing of one , and now they come out and they signed a term sheet for six , six gigawatts , 5.5GW of power TVA , with the US government .

Speaker #6: And we're still getting these same questions . And then they go and they secure with the Japanese , they secure a place . And this tremendous this landmark Japanese investment into the US .

Speaker #6: We were the sole group TVA sorry , enter one and you scale . We're the sole group that was named under this , right ?

Speaker #6: There's there's there's with there's one like number two if you if you look , if you look at this joint , joint fact sheet number two , power development for AI , new scale energy at what ?

Speaker #6: At what point ? I'm asking our analysts group collectively , at what point do you stop doubting this partner when TVA six gigawatts a term sheet signed a place with with the with the Japanese government named for investment .

Speaker #6: Let's let's come back to reality , guys . We you know , we picked a partner . We picked an amazing partner . The partner has delivered and is delivering .

Speaker #6: And yet we're still questioning what if what if . we're committed to the partner . The partner has done a great job . I think we need to recognize that .

Speaker #18: Sure . Obviously . I mean , I'm asking because it's just good corporate practice to protect your interests and put safeguards in place .

Speaker #18: But I get the point . The second second question I have is I was wondering , like you had a you were targeting a deal by year end .

Speaker #18: Does this deal with TPA, TVA meet that commitment to, you know, sort of like deliver a deal by, or should we look out for something else?

Speaker #18: Thank you .

Speaker #6: John I'll let you guys answer .

Speaker #8: That .

Speaker #10: I didn't I didn't hear the the part of the question . It was it was , it was muffled .

Speaker #18: I was asking you you were targeting a deal by year end . If the deal announcement with TPA , TVA , meet that commitment , or should we look out for another deal by year end ?

Speaker #18: Thank you .

Speaker #8: Okay .

Speaker #10: So . So I think we're we're we're still looking at the construct of the deal when it gets signed and how that contributes to our classification of the deal .

Speaker #10: A deal by the end of the year . And we're kind of working through that right now . So .

Speaker #3: Your last question comes from the line of Moses Sutton with BNP Paribas. Your line is open.

Speaker #19: This is Joe Nussbaum on for Moses . Thanks for taking my question within the PMI agreement , we see a 5% annual escalator on new milestone payments .

Speaker #19: And in our math , that increases the all in payment per project from 600 kilowatt to up to 1200 kilowatt by 2040 . And while it may be premature to think that far out , can you confirm this escalator point and how do you weigh it against pricing your modules ?

Speaker #19: Will you keep pricing stable near term to maybe incentivize module orders ? Or should we assume you increase ASPs in tandem with milestone payments ?

Speaker #19: Thank you .

Speaker #6: I'll I'll I'll I'll weigh in and you can as well . Yeah I think projecting out to 2040 is probably a bit of a long projection in relation to where we're selling modules for .

Speaker #6: Yeah , I think the escalation is the escalation is like it's , it's it's an inflationary plus is the escalation . Where do we see the , the , the cost of production are modules ?

Speaker #6: I think I think would be the right would be the right question because as we're looking at margins for us , we we believe that the cost of production is going to go down as we go from first of a kind to producing .

Speaker #6: You know , in the case of TVA , potentially up to 72 modules . But really much more . So we view this as kind of a very positive idea where we bring down our costs while we have an escalator to our pricing .

Speaker #6: And , you know , we're always going to keep pricing in line what is necessary to be commercially competitive in the market . But this is a great deal for Nuscale , right ?

Speaker #6: You know, we all know that when we go from the first of a kind to the end of the kind, we bring down production costs and manufacturing gets better; it becomes more efficient.

Speaker #6: We optimize the supply chain with think that was that was a big win for us .

Speaker #19: Great . Thank you . Very helpful .

Speaker #8: Thank you .

Speaker #3: Thank you . And with no further questions in queue , I would like to turn the conference back over to John Hopkins for closing remarks .

Speaker #5: Yeah. Thank you, and I apologize; I'm losing my voice here. But a lot of good questions today— a lot of speculation about how this is going to get done.

Speaker #5: I think Ramsey made a good point . It just was an arbitrary that that TVA picked intra one new skill in the six gigawatt potential that wasn't just hit or miss that , you know , in the Japanese framework .

Speaker #5: $25 billion is allocated for a developer that we're working with in our exclusive partner , Inter one , you know , and again , we're excited about this , not only for us , we're excited about the whole industry in general in terms of , you know , you see the market signals and what's happening .

Speaker #5: Demand pull . Is there . So we're excited about it . This next quarter . Hopefully we'll have a lot more to report .

Speaker #5: You know , I'm a proof's in the pudding guy . And I can tell you there's a lot of effort and work that's gone in to where we are today .

Speaker #5: So you know we're excited about the future . We believe we have the right partners , the right model and collective expertise in my team .

Speaker #5: And I certainly believe that we're ready to deliver and continue to lead in this market . So I really would like to thank you all for participating today and and until next time , I'm thank you very much .