Centrus Energy Corp. (LEU) Q3 2026 Earnings Call Transcript

Operator: Good morning, ladies and gentlemen, and welcome to the Centrus Energy Q3 26 Earnings Conference Call. At this time, all lines are in listen-only mode. And following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press 0 for the operator. This call is being recorded on Thursday, November 5, 2026. I would now like to turn the call over to Mr. Neal Nagarajan, Senior Vice President, Investor Relations. Please go ahead.

Neal Nagarajan: Good morning. Welcome, and thank you to all of our callers as well as those listening to our webcast. This call will cover the results for the third quarter 26 ended September 30. With me, we have Amir Vexler, President and Chief Executive Officer and Todd Tinelli, Senior Vice President chief financial officer, and treasurer. This conference call follows our earnings news release issued yesterday. We have filed our report for the third quarter on Form 10-Q earlier today. All of our news releases and SEC filings including our 10-Qs and 8-Ks are available on our website. A replay of this call will also be available later this morning on the Centrus website. I would like to remind everyone that certain information we may discuss on this call today may be considered forward looking information that involves risks and uncertainty including assumptions about the future performance of Centrus. Our actual results may differ materially from those in our forward looking statements. Additional information concerning factors that could cause actual results to materially differ from those in our forward looking statements is contained in our filings with the SEC. Including our annual report on Form 10-K and quarterly reports on Form 10-Q. The forward looking information provided today is time sensitive and accurate only as of today, November 5, 2026, unless otherwise noted. Please note that we report results using non GAAP financial measures. Which we believe provide investors with additional understanding of the company's financial performance as well as its strategic financial planning, analysis and period-to-period comparability. A reconciliation to the most directly comparable GAAP measurements is included in the financial results section of our earnings release. This call is the property of Centrus Energy. Any transcription, redistribution, retransmission or rebroadcast of the call in any form without the expressed written consent of Centrus is strictly prohibited. Thank you for your participation. And I will now turn the call over to Amir.

Amir Vexler: Thank you, Neal. And thank you all for joining us today. I am happy to report that Centrus is continuing to build its reputation on meeting its commitments growing its credibility, which is leading us to capturing more market share. We made significant progress during the third quarter across our commercial, operational and financial objectives capped off by the recent completion of our first centrifuge in Oak Ridge, Tennessee ahead of our year end target. We now proved that US centrifuge manufacturing is a reality. It is a historic milestone for Centrus and The United States. This landmark occasion was the culmination of a number of other achievements by the team including the strategic acquisition of 1 of our key suppliers Westermann. This marked us officially locking in all of the suppliers within critical while also completing our first certified-for-construction packages. 2 additional 2026 operational targets we have achieved ahead of our year end target. Furthermore, we grew our enrichment backlog from $3 billion to $5.4 billion. And successfully raised funds in a prudent manner that keeps us well capitalized. Finally, we are excited to announce that we are now using the existing 16 centrifuge cascade to enrich HALEU for the commercial market. Making Centrus the first US owned commercial enricher for the market since our gaseous diffusion days. And against this backdrop, we see continued and growing commercial validation across all 3 of our addressable markets. Commercial LU for the existing commercial nuclear reactor fleet for baseload electricity, a growing national security imperative that continues to increasingly diversify and HALEU to support the next generation reactors that will also require LEU feedstock. It is important to distinguish Centrus's unique opportunity set from those of the broader nuclear market. We are positioned to capitalize on all 3 of these markets. First, and most importantly, our primary focus is on baseload electricity from contracts with investment grade utilities. There is a significant existing and growing gap in commercial LEU supply and demand. And remember, much of our long dated enrichment backlog that runs through 2040 is for LEU to service these existing investment grade utilities. The second addressable market is for growing national security needs. A recent US GAO report raised the alarm on the nation's entire domestic nuclear fuel supply chain in particular, the domestic supply chain suitable to meet national security demand. Notably, the report highlighted the government's $37 billion plan to rebuild the unobligated supply chain by 2052. As announced last week, we have confirmed that our supply chain is fully unobligated. Centrus has proven, derisked technology is additionally the only production ready option for the national security establishment. In this slide, we continue to work with the NNSA on its intent to sole source certain uranium enrichment activities from Centrus and stand ready to support this important mission. And then there is the HALEU and advanced reactor market. This market's demand represents an incremental growth opportunity that continues to mature. We have positioned ourselves to capitalize on this potential market, if and when it matures to provide ourselves with further optionality. This optionality includes our flexibility to use planned HALEU capacity for various assays of LEU and LEU plus if needed. And importantly, we are securing prepayments to fund our extension from the HALEU offtake agreements we are signing. And yet, durable LEU demand for investment grade reactor operator is what we primarily focus on. We continue to observe this gap between supply and demand widen. Driven by up rates, mothballed facilities coming back online, and potential new builds. Both in The US and abroad. This widening disparity is demonstrated by the continually increasing spot and long term contract LEU price curves that continue their upward trajectory. Let me now dive into the progress we made against our 3 objectives. First, turning to our operations. We could not be more excited about last week's event in Oak Ridge, Tennessee, to celebrate our first centrifuge's completion marking the beginning of our ramping of scaled centrifuge manufacturing. This important milestone achieved well ahead of our year end target demonstrates that we have successfully stood up our core manufacturing operations in Oak Ridge, including having qualified our processes that are tested and proven. The team is now focusing on decreasing the cycle times and increasing throughput rates reducing inefficiencies, and scaling up our infrastructure alongside our supply chain while hiring and training employees. Furthermore, we are very excited about our recent acquisition of Westermann, which should drive growth for both organizations through commercial and operational synergies as well as cost savings while derisking our build out. The acquisition represents a significant milestone for Centrus. In 1 strategic move, we have simultaneously derisked our build out by securing a key supplier and a best-in-class manufacturer of centrifuge casing and other critical components. Captured cost-saving synergies related to Westermann's expansion, and tied to our expansion, and derisk our entire business model in the near and medium term with an established high quality, industrial fabricator-manufacturer with revenues in nuclear and non nuclear industries. Second, turning to commercial backlog, we saw material growth in third quarter growing our enrichment backlog to $5.4 billion in contingent LEU and HALEU sales commitments. Our announced agreements with X-energy, Radiant and Antares all included prepayments to support our build out. Furthermore, our agreement with Xenergy includes production of LEU as a feedstock for HALEU, helping us push more volume through our facility. And finally, our offtake agreements with Radiant and Antares further validate and reinforce our first mover advantage in the microreactor market. They also demonstrate our ability to produce unobligated enriched uranium, that can also support US national security applications, including defense and space missions. And finally, on the third pillar, financial progress Centrus secured an additional $500 million with the potential addition of $2 billion in the future. To this end, Centrus ended the quarter with roughly $2.2 billion of unrestricted cash on our balance sheet. Todd will discuss this in more detail shortly. Now moving on to guidance. We are reaffirming our 2026 annual guidance for total company revenue of $450 million to $500 million as well as our annual capital spend of $350 million to $500 million. We are similarly reaffirming our 2026 annual guidance for Python workforce additions to over 175 new hires. As well as our target of new employees at Oak Ridge, to at least 100. With us now having finalized contracts with 100% of the partners within critical, we were able to complete and begin shipping our first centrifuge. Our acquisition of Westermann represents another important step in further strengthening our supply chain. We have simultaneously completed our first certified-for-construction package for Piketon. We will discuss these in more depth at our upcoming Investor Day this coming December. With that, I will turn the call over to Todd, who will return with some final thoughts and comments. Todd?

Todd Tinelli: Thank you, Amir, and good morning to everyone on today's call. Ahead of walking through our results, I want to first quickly discuss the impact of our recent capital raise. In the third quarter, we recognized a $46.4 million book gain due to a decrease in the liability associated with the valuation of the warrants from our recent capital raise. This was a noncash impact on our books but led to a $46.4 million positive impact to the quarter's operating income. Net income and earnings per share that is not part of our due course of business. As such, throughout my comments, the operating income net income and earnings per share, excluding the $46.4 million gain, will be referred to as normalized. As well as those same adjusted figures that account for growth costs. Our normalized results were in line with our internal projections and reflected the typical quarter-over-quarter shift in contractual mix that can transpire based on customer orders and deliveries. Our strong financial execution continues to support the execution of our multibillion dollar domestic enrichment expansion. As noted on previous calls, I will be presenting financials on a quarterly and trailing 12-month basis. Total revenue for the third quarter was $55.5 million a decrease of $19.4 million, or 26%, versus the same period last year. TTM revenue was $454.5 million ahead of fiscal 25 revenue. The LU segment generated $31.8 million in revenue in the third quarter. A 29% decrease versus the same period last year. SWU revenue in the quarter increased by $3.4 million due to a 19% increase in volume of SWU sold and a 10% increase in the average price of SWU sold. The Technical Solutions segment revenue was $23.7 million in the third quarter. A $6.4 million or 21% decrease over the same period last year. Due primarily to a $10.2 million decrease in revenue generated by the HALEU operations contract as well as a change related to other contracts. Centrus generated a loss of $10.6 million and a gross profit of $105.8 million for the third quarter in TTM. Respectively. Compared to a gross loss of $4.3 million in Q3 2025. The LEU segment's third quarter cost of sales was $38.7 million a decrease of $13.9 million, or 26%, over the previous year's period. Driven by a decrease in the volume of uranium sold. SWU costs increased as a result of a 28% increase in the average unit cost of SWUs sold and a 19% increase in the volume of SWU sold. Technical solutions cost of sales of $27.4 million increased $0.8 million, or 3%, from Q3 2025. Primarily attributable to an increase in costs related to customer contracts partially offset by a $1.7 million decrease in cost incurred under the HALEU operation contract. Normalized operating loss for the third quarter was $25.1 million compared to a loss of $16.6 million in the same period last year. The company generated normalized net loss of $10.2 million and $9.4 million of adjusted net loss in the third quarter. Compared to normalized net income of $3.9 million and adjusted net income of $5.2 million respectively in Q3 2025. The change in third quarter normalized net loss was primarily attributed to a decrease in income tax benefit of $9 million an increase in gross loss of $6.3 million, and an increase in advanced technology cost of $3 million. This change in normalized net loss was partially offset by an increase of $4 million in investment income. On a fully diluted basis, this equates to third quarter 26 normalized loss per share of $0.49 and adjusted loss per share of $0.46. Respectively. Compared to $0.19 and $0.25, respectively, in Q3 2025. A trailing 12-month basis, Centrus generated normalized net income of $34.4 million and adjusted net income of $77.3 million respectively. Third quarter adjusted net income excludes $2.4 million of gross expenses and a $1.3 million benefit to our SG&A related to our stock compensation. Which combined in tax adjusted equates to $800 thousand. Please refer to our financial results section of our earnings release issued yesterday for reconciliation of net income normalized net income, and adjusted net income. Going forward, we continue to expect to have certain level of these type of growth expenses to flow through our income statement as we continue to build out. Centrus's backlog across both segments grew to $7 billion at the end of the third quarter and extends out to 2040. The growth was driven by an approximate $2.4 billion in LEU and HALEU enrichment sales in the LEU segment. Of the approximate $5.4 billion in contingent LEU, in HALEU sales commitments, $5.1 billion are under definitive agreements. Turning to our capital spend. Which are CapEx and non-CapEx attributed to cost and investments such as prepayment to suppliers or growth costs. In the third quarter, we had total capital spend of $134 million with $131.6 million coming from CapEx and the remainder coming from non-CapEx growth costs. We finished the third quarter with approximately $2.2 billion in unrestricted cash without using our ATM. In September, we completed an approximately $500 million underwritten public offering of class a common stock and prefunded warrants. Together with accompanying common warrants. This important transaction allowed us to access near term capital at a premium while setting the company up for significant future capital and 4 future tranches with progressively higher excess prices only for share price appreciates, and we continue to execute against our milestones. If exercised in full, the warrants could provide approximately $2 billion of additional gross proceeds with exercise prices ranging from approximately $2.27 to $3.63 per share. We believe this structure reflects investor confidence in the long term value of Centrus while providing additional flexibility. We continue to feel confident in our existing cash balance. and we believe we are sufficiently funded to meet our near term capital requirements. Subsequent to quarter end, we acquired Westermann for approximately $116 million funded through a combination of cash on hand and equity. Including $95 million in cash and $21 million in equity. We expect the acquisition to lower project costs for Centrus and drive greater efficiencies across our supply chain. Turning to our outlook for the remainder of 2026, as Amir noted, we are reaffirming our annual guidance for revenue of $450 million to 500 million and total capital spend of $350 million to $500 million The target excludes the Westermann acquisition. We look forward to having a more fulsome conversation about Westermann build-out at our upcoming December Investor Day. We are simultaneously reaffirming our operational guidance for the workforce additions in Piketon and Oak Ridge. With that, I will turn the call back to Amir.

Amir Vexler: Thank you, Todd. I am proud of the progress we made during the third quarter across our commercial, operational and financial prerogatives. We have made significant progress in and are continuing to derisk our build out. We are now beginning to manufacture and ship centrifuges from our Oak Ridge facility. We have locked in 100% of the suppliers within critical and have completed our first CFC package. We have significantly grown our commercial enrichment backlog. We are sitting on a healthy cash balance that empowers our build out. We have furthermore bolstered and derisked our business profile especially in near term revenues and profitability with our recent Westermann transaction. And all of our progress is happening as our addressable market continues to grow. A strong backdrop that supports our expansion. We are also excited to host our upcoming Investor Day on December 7th at our American centrifuge plant in Piketon, Ohio. We look forward to sharing more about our strategy and build out at that event. With that, I will turn the call over to the operator for questions.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the * followed by the 2. If you are using a speakerphone, please lift the handset before pressing any keys. As a little reminder, we would like to stick with 1 question, please. If you do have a follow-up, you may re queue. Your first question comes from Mark Shooter from William Blair. Please go ahead.

Mark Shooter: Hey. Good morning, everybody. Amir, just had a question on the first centrifuge. So first centrifuge production, that is a big milestone for the company and also national security. But a key point for us on that front was these new centrifuges are unobligated. And I was hoping you could give us some update on the engagement with the NNSA. And speaking to the funding and the outline from the GAO as well.

Amir Vexler: Yeah. Well, good morning, Mark. Thank you for that good question. I will remind the listeners and yourself that, you 1 of the great values that we bring to the market and the technology that we bring to the market is the capability, to have unobligated production that can serve national security need. Just as a reminder as well and formal background, in November 2025, the published a notice of intent to issue Centrus a sole source contract for the production of certain low enriched uranium that is suitable for use in support of the national security mission. So that is sort of the backdrop to our need and our drive to have unobligated production and as. Specifically to your question, our production will be unobligated. And we have been working to configure the supply chain, working with all of our suppliers to make sure that is going to be implemented. Hope I answered the question, Mark.

Mark Shooter: Yeah. Yep. Yep. Thank you, Amir. I thought they cut me off for the next question. Thank you.

Operator: Your next question comes from Mark Shooter from TD Cowen. Please go ahead.

Mark Bianchi: Hi, this is David Choe on for Mark Shooter. My question is really around the current LEU backlog. I know you mentioned, excluding the LU to HALEU contract. Is that all tied to the existing reactor fleet? I asked because I am trying to understand the opportunity for new light water reactors there. And you know, there are 10 new large reactors moving through the DOE EDF loan program. So trying to think how should we think about the timing of potential LEU backlog opportunities for Centrus there. If enrichment RFPs could follow relatively soon, for new reactors, or would utilities likely wait closer to a reactor start up?

Amir Vexler: Good morning. Let me just talk maybe specific in general, and then we will address specifically the question about the new build. We very much are excited and are obviously prioritizing firm and firm commitments from customers And the ones for LEU are typically the ones that are able to make those in large numbers. So a good size a large part of our backlog is LEU for operating reactors here in the United States and abroad as well. Specifically to the question of how to think about the new reactors that are yet to be built. It really is a question to them as to at what point they would feel they would need to go out and secure fuel supply. I think based on what we are seeing the advanced reactors do, they do prioritize fuel and they put that right at the front to ensure that they derisk their projects I would expect that the new builds, whether it is going to be AP1 thousands or whatever other large reactor design is going to be, there is going to be a tremendous need for enrichment supply as well. I would tend to think that in today's market, and some of the availability and some of the long cycles around capacity expansion of enrichment I would absolutely encourage them to put that at the very front of their planning cycle as they plan to expand. And so we absolutely intend to compete for it, and we intend to make that a big part of our business as well. Thank you.

Operator: And your next question comes from Joseph Reagor from Guggenheim Securities. Please go ahead.

Joseph Reagor: Hey, guys. This is Peyton on for Joseph Reagor this morning. Thanks for taking the questions. I guess, could you just provide a little bit more color on what enabled the accelerated timeline for the first completed centrifuge? And do you see this timeline as sort of replicable for future units? And I guess the third part what learnings are you going to take from this first 1 and apply to end of a kind?? Thank you.

Amir Vexler: Okay. Thank you for the question. I think I have been very consistent on all of our calls in trying to explain and emphasize to the investors how critically important it is for us to gain market credibility, be able to meet and exceed our commitments, We have an incentive to from the market, we have an incentive to beat the timelines that we have advertised. And so, organizationally, we are creating the same incentives and the same expectations of exceeding and meeting the timeline, But more specifically, what enabled is we do run process improvement team in parallel. I mean, 1 example that I gave before, which I am sure we will get to talk about at some point from--I am sure a question will come up about our partnership. With Palantir. And some of the work we are doing there. So we really are attacking this on multiple fronts. And we are doing a lot of progress with our supply chain. And all of this with the intent of expediting, lowering cost, derisking. Westermann is another example. Of derisking and building efficiencies into our supply chain. I am sure there will be a question on that as well at some point. So the lessons learned here is that when you align the goals in the organization, provide the tools, expectations, and make a proper investment, in rapid improvements. It pays off. And we certainly intend to implement those learnings. And these are coincidentally to your second part of your questions. These really are the learnings. And you know, we certainly are looking forward to providing a more wholesome update with details, examples at our Investor Day that I have announced earlier. And, hopefully, that answers the question. Thank you.

Operator: And your next question comes from Jed Dorsheimer from Texas Capital. Please go ahead.

Nate Pendleton: Congrats on the continued progress. Amir, I wanted to go back to the strong macro picture that you alluded to in your prepared remarks. With the strong SWU pricing relative to uranium, as we look ahead, how are customers changing tails assay, if at all, and how much Western SWU demand could be met with overfeeding as we look out in the future?

Amir Vexler: Great question. Good morning. So you are asking an enrichment person about a question that involves a lot more consideration than just enrichment. Obviously, uranium pricing, fits into this. Very strongly. Each customer and supplier approach this question individually on a contract by contract basis. In the past, obviously, when prices were cheap, This goes back a few years ago. We have seen the different behavior around Tails assay. We have seen different behavior around underfeeding versus overfeeding. Obviously, that dynamic has changed now that SWU prices have gone up considerably. And I would expect that this continues to be just an optimization for each contract case by case as to how they view their uranium supply pricing versus how they wanna optimize it versus enrichment. I will add as a final thought that I would tend to give the upper hand here to enrichment, By that, I mean, I think, ultimately, you would see the seesaw and pendulum swing towards sort of erring on the side, of favoring enrichment capacity is just because I do not see that there is that much ability to expand capacity as quickly as the market grows. I mean, we are we are seeing that disparity now, and I think it will it will take a while before that disparity sort of settles. So I think you will see that reflected in the tails and in the overfeeding versus underfeeding. I hope that answers the question. Thank you.

Operator: And your next question comes from Bill Peterson from JPMorgan. Please go ahead.

William Peterson: Yes. Hi. Good morning. Nice job on the quarterly execution. Thanks for taking the question. I wanted to ask a follow-up on a prior question on the backlog. I guess we think about your commercial strategy. Is there a preferred mix of I guess, utilities, say, LEU versus newer companies, SMR, and, I guess, with the shape of the backlog, you talked about backlog going up to 2040. Is that more front loaded or back loaded? I am just trying to get a sense of what that can mean for the implication on CapEx as you, I guess, continue to grow your backlog.

Amir Vexler: Yes. Thank you for that question. I will start off by just saying that it would be we typically do not break down and separate the amounts That said, the vast majority of our backlog is LEU. it is either for LEU customers or as feedstock for future halo offtake. Now you asked a pretty interesting question as to who do we favor and who do we like more. That would be a dangerous answer to give. I will give you the pros and cons. And obviously, we want both, and we pursue both. The established LEU customers provide a lot of certainty. They provide a lot of volume. They provide very, very solid terms to be able to offtake that is precisely what we need when we are expanding our facilities and investing capital. However, I do not want to, in any way, underestimate the HALEU customers who, just in the last 6 months to a year, have become a lot more committed to the supply chain and we are seeing them being able to make sort of take-or-pay-type contract and legally binding contracts. They provide a huge promise to a company like ours You know, if there is a large expansion of any of these SMRs, or microreactors, if there is a large build out, that is gonna create a substantial need for HALEU and an exponential need for LEU. And so we honestly are trying to keep our finger on both triggers And I will just remind the investors and listeners as well that, you know, the third leg of the stool here is we are pressing really hard on national security. We have positioned ourselves to be able to serve the need, when called upon for national security. And I hope that gives you enough detail and that I answered the question, Bill. Thank you.

Operator: And your next question comes from Nicholas Amicucci from Evercore. ISI. Please go ahead.

Nicholas Amicucci: Hey, Amir. Well, you opened the door, so I will allow you to either walk through it or close it on me. Just wanted to kind of dig into the $300 million of Palantir potential savings. And, basically, how much is represents validated procurement or engineering changes versus the opportunities that are still under evaluation? And should we think of any of those as an accelerant to capacity delivery?

Amir Vexler: Yeah. Good question, Nick. As previously communicated, a day 1 focus for us is to really max maximize cost savings while we are really bringing in lead times and deployment times for expansion. We wanna use state of the art technology tools, capability, individuals, and hence, the reason for the partnership. We did announce an amount of savings that we put out there, and then you quoted $300 million, a lot of it has been a strong contributor to our capability to deliver ahead of schedule. From where I sit, and I am fairly connected to the project, I think that most of the opportunities and most of the potential savings and value we are going to derive is still ahead of us. So much so that we are in active mode of learning as to what we achieved, how we potentially accelerate and expand that. So I stay tuned for more announcements. Stay tuned for more information, and as with 1 of the answers that I gave earlier, we do intend to have a much more wholesome conversation on this in our Investor Day. This really is the purpose for such conversations. We would love to address it there, and we are preparing to do that. And I will also add as a last statement that the first centrifuge is really a great example of the value creation based agreement and partnership that we have with companies like Palantir. And, I think the very first milestone that we set out there, we have been able capitalize on it, and we are looking to do that habitually for all the other milestones that we are facing. Thank you.

Operator: And your next question comes from Jon Windham from UBS. Please go ahead.

John Wyndham: Hey. Thanks for taking my questions. This is David on for John Wyndham. Just wanted to touch base on can you give us an indication or kind of a status update on where you are in negotiations with the DOE and the potential to convert your demonstration cascade into commercial off take and the potential to bring some of those volumes online a little bit quicker to market. Thank you.

Amir Vexler: Yeah. So we are in discussions Again, as I typically answer my questions, I will I will give a little bit of backdrop and sort of the context for the answer just for the benefit of all the other listeners. We have embarked on a demonstration program with the DOE that has been a great supporter We worked collaboratively really well to demonstrate our technology now for 3 years. it is been hugely successful, and it provided the impetus and the capability to expand that into commercial operation. The natural next step for the natural next step for the 16-centrifuge demo cascade is to place that into commercial operations. The cascade is producing. We are in discussions with the Department of Energy about how to amend and how to make a more wholesome agreement where this continues to serve the market. And some of the you know, reactors that are getting into the market now and would require some of that material. Yeah.

Todd Tinelli: To Amir's point, we. The center feature is currently spinning for commercial use And as part of the larger agreement, you know, it is our. it is our ambitions and the DOE's ambition to keep those centrifuges spinning throughout the their life cycle, and we are currently working that in through our long term arrangement with the DOE. We have they have given us rights to use those commercial. Those centrifuges for commercial use currently. And that is what they are being. So, currently, we are enriching for HALEU for commercial needs at this moment. Thank you.

Operator: And your next question comes from Eric Stine from Craig Hallum. Please go ahead.

Eric Stine: This is Luke on for Eric. Thanks for taking our questions. So as it relates to your supply chain strategy, should we expect to see vulnerable areas addressed through vertical integration like with Westermann, or was that more of a sort of a 1-off event from a strategic perspective? Thanks.

Amir Vexler: The. I think your question specifically asked about vulnerable. I would say that the Westermann deal was a whole lot about an opportunity to derisk our supply chain, to derisk the build out, and to derisk the business model as well as to be able to capitalize on you know, a lot of efficiencies that we see out there. So all in all, we are we are very satisfied with it. But, I mean, there is other tools in our, you know, arsenal over there that we are deploying and setting up a supply chain that is predictable, capable, and produces high quality product. I mean, these things are done every day by our team. Are not necessarily advertised. They are not necessarily out there communicated. To the broader community But I mean, this is the kind of stuff that we do every day that goes unadvertised You use the word vulnerability and this is going to be a major project. We have a lot of suppliers Each supplier has their own strengths and weaknesses. We have built we are building, and we have built resilience in our supply chain where possible. We are using quality oversight. We are using partnership with different suppliers. So we are not taking anything off the table I think what you saw with Westermann is an example where you had a really perfect fit of all these factors come together. And it was no coincidence that this deal was made. Yeah.

Todd Tinelli: And I will just comment. We view Westermann as a world class operation, especially in the nuclear space and they reach over into other industries. This allows diversity to Centrus income stream and revenue. it is immediately accretive in year 1. And it really serves as platform for us to expand on supply chain integration to take out some of those vulnerabilities if we see them present themselves through either organic growth now through Westermann or through additional M&A activities. We are extremely excited about this. I will just comment that you know, on our Investor Day, we plan on providing a significant more information around the acquisition. And we hope that all of those on the call today are able to dial in or join us and where we can provide a long term view of our vision for Westermann and our supply chain. Thank you.

Operator: Thank you. Next question comes from Rob Brown from Lake Street Capital. Please go ahead.

Rob Brown: Good morning. Just wanted to kind of follow-up on the centrifuge manufacturing ramp with your first 1 now done. How do you I know you cannot give exact numbers, but how do you sort of see that ramp happening? Is it over the next year? Is it is it of ramped quickly? Or just a sense of how that develops. Thank you.

Amir Vexler: Yeah. Good morning, Rob. Could you, just to make sure I answer your question and I understand it, When you say the ramp, you are talking about the cadence of the centrifuges coming offline, or what specifically were you thinking of? Yeah. I think you I think you mentioned focusing on ramping up the level of production of centrifuges, just further color on how that happens. Yeah. So just as a general backdrop again, you know, when we announced the first centrifuge, obviously, the big announcement there is not in the centrifuge itself, but the announcement is that now we have a functioning operating production line that produces centrifuges. And we really are celebrating the first off to come off this line. So there is a certain cadence and rhythm that we are currently engaged in, and we are producing, I. At this point, we probably going to reserve a lot of that detail for our investor day where we have a lot more wholesome conversation on this and presentation. But do expect to see more information and announcements to come out on that The point is that we have an operating manufacturing line that is in current production. Thank you.

Operator: And your next question comes from Lawson Winder from Bank of America Securities. Please go ahead.

Lawson Winder: Thank you very much, operator, and good morning, Amir and Todd. I appreciate today's update. And I look forward to the Investor Day very much. The thing I would like to kind of better understand is commercial HALEU. So you have disclosed that the existing 16 cascades are now enriching HALEU for the commercial market. Can you just confirm whether that is against the Oclo, X-energy, Radiant, or Antares contracts, or is there another customer And then when we think about revenue and economics from that, I mean, when do you expect first commercial HALEU revenue to start showing up in the P&L And then how should we think about the margins versus the DOE HALEU contract? I mean, are these gonna be similar margins? Or could, you know, commercial HALEU possibly have significant superior economics? Thank you.

Amir Vexler: Yeah. So a lot of questions there, and thank you for that, Lawson. Let me--I will try to jot them down. I will try to answer all of them. The on your first question around the commercial HALEU and who specifically it goes for, is--the answer that I will have for you is it will be supplied to the commercial market. That requires HALEU and I mean, everybody has read our announcements. there is no more detail further to that, but absolutely are looking forward to supporting the start up of the commercial market. I mean, these new reactors are becoming real. They require fuel. And we are the first ones out there that are going to be fueling them. And, having the only HALEU cascade in the Western world that is able to supply them right now gives us a huge advantage and we are looking forward to providing that support. Now to your I think the next question you had was comparing and contrasting margins on these contracts versus the DOE.

Todd Tinelli: Todd can give you a word on that. But this is-- there is 2 different types of contracts that are present. The DOE, obviously, was a demo cascade, a demo project that allowed us to prove our capability while providing enrichment that can potentially be used for the startups of many of these SMRs and microreactors. On the commercial there is a lot more that goes in. that is involved around the commercial contract terms. Obviously, we do not get into those types of economics. But there is various different items in every contract. there is different as to who provides the feed, whether it is LU or we are providing it. So the overall price, therefore, can have some variability. And. But we are obviously confident in their ability in the HALEU market to provide significant upside to the company and optionality. So we are we are rooting for all of the SMRs and advanced reactors. And as Amir said, we are extremely excited to be the only 1 enriching commercial HALEU fuel right now. and are on standby to meet all of our customer needs. Thank you.

Operator: And your next question comes from Joseph Rieger from ROTH Capital Partners. Please go ahead.

Joseph Reagor: Hey, Amir and team. Thanks for taking the questions. I guess for me, on the Westermann acquisition, can you give us any additional color on what the margins look like there at the gross margin level? And what, if any,, seasonality there is to their business. Yeah. Thanks.

Todd Tinelli: Yeah. We are really excited, as I said, about the Westermann--I think I will put a pause on 1 of your comments, but we believe there is significant upside to the Centrus revenue stream. This industry has very strong margins in the supply chain. It does 2 things. 1 is, as 1 of our larger suppliers, it allows us to derisk our supply chain and have cost savings while diversifying our revenue base. It also is involved in other high growth industries and also oil and gas. The margins vary. in each 1 of those segments. The high growth segment is obviously in high demand and is. and the margins are a little bit higher. Nuclear has strong margin profile. And the last is the oil and gas you know, has been the mainstream for Westermann throughout their you know, operations. And we will provide more information on our investment day, including breakdowns of their margin profile in each segment. And their contribution of revenue to Centrus in the current year and over the next future years. Hope that helps. Hey, Joe.

Amir Vexler: I wanna add a couple of other things here. Since we are talking about Westermann. So I made a comment to this earlier that this was really no coincidence. This is 1. This was not 1 of those things, hey, we want to buy somebody. Let's look at a list of 100 people. No. This was not the case. Westermann--folks in our industry know that Westermann is 1 of the strong fabrication pillars that has a nuclear grade fabrication capability. They are a high precision fabricators. They are very versatile, as Todd mentioned. This is a great fit. And not only are we looking at because I said a lot of the derisking of the supply chain build out and the business model that we have communicated but we will also have a very strong eye to the future potential and what other things could be done to support our build out in the business. As a whole. So as Todd said, I will echo again, we are we are very excited about things that are yet to come. And, hopefully, we will have a much broader conversation December 7th. Thank you.

Operator: And your next question comes from Jeffrey Bramp from Northland Capital Mark. Please go ahead.

Jeffrey Grampp: Good morning. I have a question on the, capital deployed kind of cadence here. Hoping to get any additional clarity you guys can provide in terms of kind of Q4 spending Obviously, it could be a wide range of outcomes and still fit the, the full year guide. So just kind of wondering how we should think about spending into Q4 and any early thoughts on spending trajectory into 2027? Thanks.

Todd Tinelli: Thanks for the question, Justin. Good morning. So we have maintained our capital spend guidance. So, obviously, you can kind of back into our fourth quarter spend What I will say is we are now crossing the threshold into deploying capital at a more accelerated rate. We have started our first construction package As you can see, we have our first centrifuge rolling off the line. We have secured our supply chain and have orders in for all of our materials currently placed. And, we are moving forward with our build out. All of these numbers are ex Westermann. I just wanna make that point. So you know, the. Often in GAAP and other areas, you know, an acquisition will not be considered, you know, CapEx and growth CapEx. But to maintain, you know, status quo and quarter over quarter, continuity, we have excluded Westermann from that. Now to be said, we will look to provide more guidance in our investment day on December 7th. As for 2027, you know, what I said earlier this year in our previous calls, we are gonna get to a point where we start to see some real cadence of capital deployed. And we are now in that ramp up. You know, we only started our floor contract midyear as we signed the contract. And so now as that is beginning to come to fruition and we have boots on the ground, our spend increases. In addition to the manufacturing side. So stay tuned. We will provide more guidance as for 2027 Obviously, we will be looking to give a more wholesome number in future discussions. Thank you.

Operator: And your next question comes from Jed Dorsheimer from Stifel. Please go ahead.

Jaed: Hey, good morning, everybody. Thanks for the question. As we head into the next congress, do you guys see any change in the outlook for federal support for domestic enrichment, or is that support largely insulated from the political cycle? Thanks.

Amir Vexler: Yeah, good question. I propose that I will tell you with firm belief that this ought to not change the momentum of our industry. This ought not to change the momentum of the investment, the interest, and the focus that and the support that the US government provides to the fuel cycle and specifically to enrichment. And the reason why I am saying this is we have now been through this cycle of 2 administrations, at least, during my time and I have not seen a change in support focus or dedication, I have seen it increase. I mean, some of the conversations around clean energy needing to increase. I mean, all of these things do not go away. They are still there. The conversations around the industrialization, providing jobs, it becomes even more important now. So the answer to your question is I absolutely do not see any change. I see a necessity for even stronger support and focus, and we are looking forward to working with the new congress on this as well. Thank you.

Operator: And your next question comes from Sean Milligan from Needham and Company. Please go ahead.

Drew Scott: Hi, this is Drew Scott on for Sean. Thanks for taking the question. Over the first centrifuge ahead of schedule and backlog growth tracking well, are you seeing HALEU demand going forward ahead of expectations at all? Or are you even enough to say you would consider pulling forward capacity even further? I am sorry. I did not hear the last part of the question. Could you please repeat the question again? Yeah. So are you seeing HALEU demand pulling forward kind of ahead of your expectations And would that even make you pull capacity forward? As kind of what you originally planned?

Amir Vexler: Yeah. Thank you for that. I am not seeing as much of pulling of demand ahead by the reactor developers What we are seeing, and I mentioned it earlier, is we are seeing a lot stronger commitment and a lot more aggressive focus on actually locking in agreement and derisking the fuel supply part of the equation when it comes to their build out. So, no, there is really no changes in terms of the cadence that we are planning in terms of rolling out our capacity We obviously, as--I will repeat it again--are looking for every opportunity that we have in shortening lead times and creating efficiencies, and we will execute on that. But from the side, we are not seeing we are not seeing that yet. Thank you.

Operator: And your next question comes from Sameer Joshi from H. C. Wainwright. Please go ahead.

Sameer Joshi: Hey. Good morning, guys. Thanks for taking my questions. My quick question is on the 4Q outlook Basically, you look at the annual outlook, it looks like Q4 will be $142 million to $192 million revenues. Like, are there any takes and puts on this? and then part 2 of that question is, the SWU pricing versus SWU cost management. How are you looking at it? Should we expect another sort of negative gross margin quarter this quarter?

Operator: Thank you for your question and good morning.

Todd Tinelli: Yes. As you correct, we have maintained our guidance. We are optimistic and we feel obviously that the fourth quarter provides a full year view of our strong results. As we have always noted that we see significant seasonality, including when we actually have sales that come that are being delivered, but also receive our shipments. That quarter over quarter mix provides some flexibility in our gross margin profile. that is why we have been discussing this on the TTM basis to provide a more normalized view. You know, the negative gross margin and everything, there is a lot of timing around when we receive product and mismatch of when we deliver product. So as such, we are very confident in our full year view. that is why we have maintained our guidance. We believe that the revenue and guidance that we have provided is also ex any Westermann upside I just wanna make that note, and we will provide an updated guidance on our December 7th Investor Day. Thank you.

Operator: And your last question comes from Ryan Pfingst from B. Riley Securities. Please go ahead.

Ryan Pfingst: Hey, guys. Thanks for Maybe just a quick 1 on the backlog. Increase here. Was that fully from the 3 recently announced advanced reactor customers or were there other, undisclosed customers in there?

Amir Vexler: Yeah. that is not something that we disclosed, but, I can say that this was a mix of both LEU and HALEU. Fortunately, I cannot give the details. We do not provide the breakdown and separate the amounts. Vast majority of the backlog is LEU, either for LEU customers or a feedstock for our future HALEU offtakers. I hope I hope that answers the question, Ryan. Thank you.

Operator: At this time, we have no further questions. I would like to turn the call back over to Mr. Neal Nagarajan, Senior vice president. Please go ahead.

Neal Nagarajan: Thank you, operator, and thank you to everybody who listened on today's call. We are very excited about our upcoming Investor Day on December 7th at Piketon, Ohio. And we look forward to providing the market with more details at that time. Thank you.

Operator: Ladies and gentlemen, this does conclude your conference call for today. We thank you very much for your participation and you may now disconnect. Have a great day, everyone.