NuScale Power’s Earnings Call: Growth Amid Challenges

Nuscale Power Corporation ((SMR)) has held its Q1 earnings call. Read on for the main highlights of the call.

NuScale Power Corporation’s recent earnings call painted a picture of optimism tempered by challenges. The company showcased strong revenue growth and a robust cash position, bolstered by significant regulatory progress and advanced customer discussions. However, high operating expenses and a reliance on securing future orders remain hurdles. The company’s future hinges on executing its commercialization strategy amidst uncertain market conditions, particularly in Romania.

Significant Revenue Growth

NuScale reported a remarkable revenue increase for the first quarter of 2025, reaching $13.4 million compared to $1.4 million in the same period last year. This surge was primarily driven by engineering and licensing fees from the RoPower project, highlighting the company’s successful expansion efforts.

Cash Position and Liquidity

The company ended the quarter with a strong cash position, boasting $491.4 million in cash and cash equivalents, alongside $30 million in short-term investments. This financial strength was further enhanced by the sale of 4.5 million shares through an ATM program, generating $102.4 million in gross proceeds.

Progress in Regulatory Approvals

NuScale remains a leader in the SMR sector, being the only company with U.S. Nuclear Regulatory Commission design approval. The company anticipates further regulatory success with expected NRC approval to increase power output per module by July 2025, reinforcing its competitive edge.

Strong Supply Chain Developments

NuScale demonstrated robust supply chain readiness, conducting multiple prebid meetings and advancing long-lead material orders. These efforts underline the company’s commitment to delivering its first power module by 2030.

Advanced Customer Discussions

The company is engaged in advanced discussions with over ten potential customers, with some progressing to multiple iterations of term sheets and site visits. This indicates a promising pipeline of future business opportunities.

Operating Expenses Remain High

Despite a reduction from the previous year, operating expenses remained substantial at $42.3 million for the quarter. This highlights the ongoing challenge of managing costs while pursuing growth.

Uncertain Market Conditions in Romania

The RoPower project in Romania is advancing, but upcoming presidential elections could affect project timelines and decisions, introducing an element of uncertainty.

Dependency on Future Orders

NuScale’s future revenue and cash flow are heavily reliant on securing a firm customer order by the end of 2025. This dependency underscores the importance of converting advanced discussions into concrete agreements.

Forward-Looking Guidance

NuScale’s guidance for the first quarter of 2025 reflects strong commercialization efforts and supply chain readiness, aiming for a 2030 SMR deployment. The company is optimistic about finalizing NRC approval for its 77-megawatt electric module by July 2025 and securing a firm customer order by the year’s end. Financial metrics show significant revenue growth and improved cost efficiency, with a focus on expanding discussions with potential customers across various sectors.

In conclusion, NuScale Power Corporation’s earnings call reveals a company making significant strides in revenue growth and regulatory achievements, supported by a solid cash position. However, challenges such as high operating expenses and dependency on future orders remain. The company’s success will depend on its ability to navigate market uncertainties and execute its commercialization strategy effectively.