10-K: Centrus Energy Fuels Growth with HALEU Expansion, Strong Backlog

Centrus Energy Corp. reports strong financial performance in 2025, driven by HALEU production and significant expansion plans for domestic uranium enrichment, despite geopolitical supply chain risks.

Summary

• Centrus operates two business segments: LEU (Low-Enriched Uranium) supply to commercial customers and Technical Solutions, which provides advanced uranium enrichment (HALEU production) and technical services to government and private sector customers.
• The company began HALEU enrichment operations on October 11, 2023, and made its first delivery to the DOE on November 7, 2023, successfully completing Phase 1 of its HALEU Operation Contract.
• Centrus transitioned to Phase 2 of the HALEU Operation Contract in November 2023, producing 900 kilograms of HALEU UF6, with the contract value increasing to $170.1 million and extended to January 31, 2026.
• The DOE exercised Option 1a of the HALEU Operation Contract, extending performance to June 30, 2026, with a target cost of approximately $99.3 million and a fee of $8.7 million.
• On January 5, 2026, Centrus's subsidiary, ACO, was selected for a $900.0 million task order from the DOE to expand its uranium enrichment facility in Piketon, Ohio, for commercial-scale HALEU production, with options for up to an additional $170.0 million for HALEU delivery.
• Centrus announced plans on September 25, 2025, for a major expansion of its uranium enrichment capacity in Piketon, Ohio, for both LEU and HALEU, and initiated design work for a 150,000 square foot training, operations, and maintenance facility in December 2025.
• The company resumed centrifuge manufacturing activities and expanded capacity at its Oak Ridge, Tennessee facility on November 20, 2024, with plans to invest over $560.0 million to transition it to a high-rate manufacturing plant by 2029.
• Total backlog across both segments was $3.8 billion as of December 31, 2025, extending to 2040, including $2.3 billion in contingent LEU sales contracts.
• Centrus received a $62.4 million clean energy manufacturing tax credit allocation from the IRS on January 10, 2025, for its Oak Ridge facility, based on a $208.0 million qualified investment.
• The company issued $805.0 million in 0% Convertible Notes due 2032 in August 2025 and $402.5 million in 2.25% Convertible Notes due 2030 in November 2024.
• All outstanding 8.25% Notes, with an aggregate principal amount of $74.3 million, were redeemed on March 26, 2025, resulting in an $11.8 million gain.
• Net income increased to $77.8 million in 2025 from $73.2 million in 2024, a 6% increase.
• Cash and cash equivalents reached $1,957.2 million as of December 31, 2025, up from $671.4 million in 2024.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong report, highlighting significant progress in HALEU production, substantial government contract awards, and robust financial performance, despite acknowledging ongoing geopolitical and supply chain risks. The strategic expansion plans and strong liquidity position are key positives.

Positives

• Successfully demonstrated HALEU production and made the first contractual delivery to the DOE, completing Phase 1 of the HALEU Operation Contract.
• The DOE exercised Option 1a for HALEU production, extending the contract period to June 30, 2026, and providing $108.2 million in funding.
• Awarded a significant $900.0 million task order from the DOE for commercial-scale HALEU production expansion, with additional options for up to $170.0 million.
• Announced major expansion plans for uranium enrichment capacity in Piketon, Ohio, for both LEU and HALEU, and initiated domestic centrifuge manufacturing.
• Received a $62.4 million clean energy manufacturing tax credit allocation from the IRS for the Oak Ridge facility, based on a $208.0 million qualified investment.
• Reported a strong total backlog of $3.8 billion as of December 31, 2025, extending to 2040, including $2.3 billion in contingent LEU sales contracts.
• SWU spot prices reached a new historic high of $200 per SWU by December 31, 2025, representing a 488% increase since the 2018 historic low, driven by market uncertainty and demand for carbon-free energy.
• Net income increased by 6% to $77.8 million in 2025 from $73.2 million in 2024.
• Cash and cash equivalents significantly increased to $1,957.2 million as of December 31, 2025, providing robust liquidity.
• Recorded an $11.8 million gain from the extinguishment of the 8.25% long-term debt.
• Investment income surged by $31.8 million (247%) to $44.7 million due to a higher cash balance.
• Successfully de-risked pension plans through group annuity contracts in 2023 and 2024, transferring significant obligations.
• Extended the collective bargaining agreement with United Steelworkers Local 689-5 union to October 2026 and entered into a new agreement with the International Union, Security, Police, and Fire Professionals of America until 2030, providing labor stability.

Negatives

• Heavy reliance on Russian supplier TENEX for LEU, with over half of expected deliveries through 2027 sourced from them, posing significant geopolitical risk.
• Ongoing geopolitical risks from the war in Ukraine, including the U.S. Import Ban Act and the Russian Decree, which restrict LEU imports/exports and create supply chain uncertainty.
• Uncertainty regarding the granting of future waivers for Russian LEU imports and TENEX's ability to obtain specific export licenses from Russian authorities.
• The DOE acknowledged that the estimated cost for Option 1b of the HALEU Operation Contract is insufficient due to known cost increases, requiring a revised proposal and negotiation.
• Experienced delays in HALEU production due to supply chain challenges in securing 5B Cylinders from the DOE.
• Another bidder, not Centrus, was awarded a $900.0 million task order under the LEU Production Contract, indicating competitive pressures.
• Potential for increased costs if new or increased tariffs are imposed on processed critical minerals, including uranium, from international suppliers.
• The global market for uranium enrichment is oversupplied when Russian supply is included, but undersupplied without it, creating price volatility and uncertainty.
• Significant long-term liabilities from $805.0 million in 0% Convertible Notes and $402.5 million in 2.25% Convertible Notes.
• Conditional conversion features of the convertible notes could adversely affect liquidity or dilute existing shareholder ownership.
• The company has material unfunded postretirement health and life benefit obligations.
• Revenues and operating results may fluctuate significantly from quarter to quarter and year to year due to various market and operational factors.
• Potential for impairment loss related to intangible assets (sales backlog and customer relationships).
• Dependence on intercompany support from Enrichment Corp. for funding general corporate expenses.
• A small number of holders of Class A Common Stock (three largest collectively owned approximately 18%) may exert significant influence over company direction.
• Limitations on the ability to fully utilize Net Operating Loss (NOL) carryforwards to offset future taxable income.
• Risk of liability from the use, transportation, and disposal of toxic, hazardous, and/or radioactive materials, with potential for damages not fully covered by indemnification.
• Ongoing legal proceedings related to alleged off-site contamination at former GDP sites, which could result in significant costs.
• Uncertainty regarding the impact of Executive Order 14154 on IRS tax credit determinations and federal funding for programs.

Risks

• The current war in Ukraine and related international or U.S. sanctions, tariffs, and restrictions on trade, and the Russian response thereto, could have a material adverse impact on business, results of operations, and financial condition.
• Market and supply chain complications arising from the Import Ban Act, which bans imports of LEU from Russia into the U.S., and the Russian Decree, which rescinded TENEX's general license to export LEU to the U.S.
• Financial losses incurred in connection with government sanctions and tariffs imposed in response to the invasion of Ukraine and/or disputes with contractual counterparties.
• Reliance on third-party suppliers to provide essential products and services, including TENEX as the largest SWU supplier, with risks of significant delays or stoppages.
• Restrictions on imports and exports, including those imposed under the Russian Suspension Agreement (RSA) and related international trade legislation, limiting the ability to sell Russian LEU.
• Government contracts are subject to risks related to government shutdowns, changes to appropriated funding levels for HALEU, and the government's inability to satisfy its obligations.
• Uncertainty regarding the receipt of additional task orders under the HALEU Production Contract, LEU Production Contract, and HALEU Deconversion Contract, and the nature, timing, and amount thereof.
• Inability to obtain new contracts or funding to be able to continue operations, particularly for the HALEU demonstration cascade after Option 1a completion.
• Uncertainty whether or when government demand for HALEU or LEU for government or commercial uses will materialize and at what level.
• The impact and potential extended duration of a supply/demand imbalance in the market for LEU, which is oversupplied with Russian material but undersupplied without it.
• Significant competition from major LEU producers, including foreign competitors (Rosatom, Urenco, CNEIC, Orano) who may be less cost-sensitive or influenced by political considerations.
• Limitations on the ability to compete in foreign markets due to legal, political, economic, or other reasons, including lack of comprehensive nuclear liability laws.
• Price volatility and demand in the uranium and enrichment markets, especially in light of potential limited supply and dependence on others for LEU deliveries.
• Inability to successfully implement planned expansion projects in Piketon, Ohio, and Oak Ridge, Tennessee, which are complex, costly, and subject to uncertainties like funding, permitting, supply chain, and labor availability.
• Natural and other disasters, pandemics, and other health crises could disrupt supply chains and operations.
• Revenue is largely dependent on a small number of largest customers and the sales backlog, making the company vulnerable to changes in their operations or financial condition.
• Significant long-term liabilities, including the 0% Convertible Notes and 2.25% Convertible Notes, which could make it difficult to satisfy obligations or obtain additional financing.
• Material postretirement health and life benefit obligations that may require significant cash contributions in the future.
• Failures or security, including cybersecurity, breaches of information technology systems could result in significant liability or adverse effects.
• The impact of, or changes to, government regulation and policies or interpretation of laws or regulations, including by the SEC, DOE, DOC, and the NRC, and uncertainty from reliance on executive orders.
• Liability related to the use, transportation, and disposal of toxic, hazardous, and/or radioactive materials, potentially without regard to fault or negligence, and risks of uncovered damages.
• The certificate of incorporation gives rights to redeem or exchange common stock held by foreign persons if foreign ownership levels are exceeded, potentially at a lower price.
• The inability to attract and retain key personnel with unique skills and security clearances could adversely impact business and project execution.
• Potential for the DOE to seek to terminate or exercise remedies under the 2002 DOE-USEC Agreement and other agreements, or to require adverse modifications.
• Government reviews or audits can lead to withholding or delay of payments, non-receipt of award fees, legal actions, fines, penalties, and liabilities.
• U.S. government contracts and subcontracts are dependent on continued U.S. government funding and appropriations, which may not be made on a timely basis or at all, potentially impacted by executive orders.
• Changes to, or termination of, any agreements with the U.S. government, or deterioration in the relationship with the U.S. government.
• The ability to adapt to a rapidly changing competitive environment in the nuclear industry, including adjusting cost structure, operations, and pursuing strategic transactions.

Future Outlook

Centrus anticipates continued growth in the global nuclear energy industry, driven by advanced reactor development and commitments to carbon-free energy. The company plans to leverage its HALEU production capabilities and expand into large-scale LEU and HALEU enrichment in Piketon, Ohio, and high-rate centrifuge manufacturing in Oak Ridge, Tennessee. This expansion is contingent on securing public and private funding and off-take commitments. The company expects to monetize its $62.4 million clean energy tax credit allocation. Geopolitical events, particularly the war in Ukraine and related trade restrictions, continue to create uncertainty in the uranium and enrichment markets, potentially leading to undersupply without Russian material. Centrus is actively evaluating strategic partnerships and transactions to grow its business.

Management Comments

• Our current uranium enrichment involves HALEU production and other capabilities necessary for production of advanced nuclear fuel to power existing and next-generation reactors around the world.
• Our Technical Solutions segment is committed to the restoration of America's domestic uranium enrichment capabilities for LEU and HALEU, in order to play a critical role in meeting U.S. national security and energy security requirements and advancing America's clean energy, energy security, and national security objectives.
• Centrus is pioneering U.S. production of HALEU, enabling the deployment of a new generation of HALEU-fueled reactors to meet the world's growing need for carbon-free power.
• As the only company with a license from the NRC actively enriching up to 20% U-235 assay HALEU and that is operating a small scaled HALEU production facility, Centrus is uniquely positioned to fill a critical gap in the supply chain and facilitate the deployment of these promising next-generation reactors.
• Centrus plans to leverage its multi-billion-dollar uranium enrichment expansion to meet its growing backlog of $2.3 billion in contingent LEU sales to U.S. and international customer contracts, and targets future commercial-scale production of HALEU, as well.
• We believe our investment in advanced U.S. uranium enrichment technology will position the Company to meet the needs of our customers as they deploy advanced reactors and next generation fuels.
• We believe our investments in advanced enrichment technology and our progress in demonstrating HALEU production will position the Company to meet the needs of government and commercial customers in the future as they deploy advanced reactors and next generation fuels and also offers potential cost synergies for a return to LEU production.
• We anticipate having adequate liquidity to support our business operations for at least the next 12 months from the date of this Annual Report.

Industry Context

StockSavvy.ai notes that Centrus Energy Corp.'s strategic focus on High-Assay Low-Enriched Uranium (HALEU) production and the expansion of domestic enrichment capabilities aligns directly with global trends towards nuclear energy as a carbon-free power source and increasing national energy security concerns. The significant increase in SWU spot prices, reaching $200 per SWU by December 31, 2025, reflects the broader market's response to geopolitical instability, particularly the war in Ukraine, and the resulting push to reduce reliance on Russian uranium supply. The U.S. government's substantial appropriations ($3.4 billion) to jumpstart domestic nuclear fuel production underscores a national imperative to rebuild a secure supply chain, positioning Centrus favorably as a key domestic player. The company's efforts to address the 'major obstacle' of HALEU supply for advanced reactors, as highlighted by industry surveys, places it at the forefront of a critical emerging market segment.

Comparison to Industry Standards

• Centrus's global market share of enrichment for the LEU market is less than 5%, significantly smaller than major competitors like Rosatom (approximately 27 million SWU/year), Urenco (approximately 17 million SWU/year), CNEIC (approximately 11 million SWU/year), and Orano (approximately 8 million SWU/year).
• Centrus is uniquely positioned as the only company with an NRC license actively enriching up to 20% U-235 assay HALEU and operating a small-scale HALEU production facility, giving it a first-mover advantage in this critical emerging market segment compared to other global enrichment providers.
• The company's planned investment of over $560.0 million in Oak Ridge for high-rate centrifuge manufacturing and a $900.0 million DOE task order for Piketon expansion are substantial commitments aimed at closing the domestic enrichment capacity gap, which has existed since the Paducah GDP shut down in 2013, contrasting with historical reliance on foreign enrichment capabilities.
• The SWU spot price reaching $200 per SWU by December 31, 2025, surpasses the previous historic high of $163 per SWU in April 2009, indicating a strong market recovery and demand, potentially outperforming general industry expectations for price stability in a volatile geopolitical climate.

Management Changes

Corporate Governance

Legal Proceedings

• The DOE informally informed Enrichment Corp. on August 4, 2021, that DOE asserts Enrichment Corp. is responsible for approximately $9.6 million of Decontamination and Decommissioning (D&D) costs for the Joppa Power Plant. The company is assessing the assertion and has not formed an opinion or accrued liability.
• A class action complaint (McGlone Plaintiffs) was filed on May 26, 2019, alleging off-site contamination from the Portsmouth GDP site, seeking damages. Some claims were dismissed, but others, including Price-Anderson Act and state law claims, are proceeding to discovery. The company believes its operations were compliant and liability should be indemnified.
• The Lykins Complaint was filed on June 8, 2022, alleging radiation release caused Brayden Lykins' death from leukemia and seeking monetary damages. The company believes its operations were compliant and liability should be indemnified.
• The Rose Complaint was filed on March 8, 2023, alleging radiation release caused Christian Rose's cancer and seeking monetary damages. The company believes its operations were compliant and liability should be indemnified.
• The Shaw Complaint was filed on November 27, 2023, alleging radiation release caused Joshua Shaw's Acute Myeloid Leukemia (AML) and seeking monetary damages. A motion to dismiss for being time-barred was not granted on March 31, 2025. The company believes its operations were compliant and liability should be indemnified.
• The Dunham Complaint was filed on November 24, 2025, alleging radiation release caused Cheyenne Dunham's death due to complications from a bone marrow transplant and seeking monetary damages. The company believes its operations were compliant and liability should be indemnified.

Related Party Transactions

• The company has an At-The-Market (ATM) Sales Agreement with B. Riley Securities, Inc. and Lake Street Capital Markets, LLC. Mr. Williams, Chairman of the Centrus Board, also served on the board of B. Riley Financial, Inc. and recused himself from the selection and negotiation of the Sales Agreement.

Stakeholder Impact

• Shareholders: Potential for dilution from convertible notes conversion; increased value from HALEU expansion and strong backlog; risks from geopolitical events and foreign ownership restrictions.
• Employees: Increased employment opportunities with planned expansions in Piketon and Oak Ridge (at least 150 additional employees in 2026); extended collective bargaining agreements provide stability; risk of layoffs if Piketon facility operations are terminated.
• Customers (Utilities): Enhanced supply reliability and diversity from domestic LEU/HALEU production; potential for higher prices due to market tightening and reduced Russian supply; risks of supply chain disruptions.
• U.S. Government: Fulfillment of national security and energy security requirements through domestic HALEU/LEU production; significant investment in U.S. nuclear fuel infrastructure; risks related to funding appropriations and executive orders.
• Suppliers: Continued reliance on third-party suppliers, especially TENEX (Russian), with risks of disruption due to sanctions; opportunities for domestic suppliers with manufacturing expansion.
• Creditors: Increased debt from convertible notes; improved liquidity from cash balance and capital raises; risks of default if cash flow is insufficient to service debt.
• Communities (Piketon, Oak Ridge): Creation of clean energy jobs; economic development from facility expansions and investments.

Next Steps

• Negotiate a definitive agreement for the $900.0 million DOE task order for commercial-scale HALEU production expansion.
• Submit a revised cost proposal for review and negotiation prior to DOE's consideration of Option 1b of the HALEU Operation Contract.
• Continue to compete for additional task orders under the HALEU Deconversion Contract, HALEU Production Contract, and LEU Production Contract.
• Begin construction activities in early 2026 for the 150,000 square foot training, operations, and maintenance facility in Piketon, Ohio.
• Invest over $560.0 million over the next several years to transition the Oak Ridge facility to a high-rate centrifuge manufacturing plant, with first new centrifuges expected online in Ohio in 2029.
• Provide evidence to the IRS within two years from January 10, 2025, to certify the $62.4 million clean energy manufacturing tax credit allocation.
• Notify the DOE within two years of credit allocation certification that the qualified investment in eligible property is placed in service to receive the credit.
• Monetize all credit allocations received from 48C by transferring them to unrelated taxpayers for cash.
• Monitor the evolving situation regarding the war in Ukraine and assess the potential impact of new sanctions or restrictions on the TENEX Supply Contract.
• Seek additional licenses, waivers, or approvals from governments to continue fulfilling purchase and sales obligations using Russian LEU.
• Continue to diversify the supply base for LEU and take advantage of opportunities for additional short and long-term supplies.
• Continue to evaluate opportunities to grow the business organically or through acquisitions and other strategic transactions.
• Work with contractual counterparties to mitigate impacts of material shortages.
• Address the DOE's assertion regarding a $9.6 million liability for Joppa Power Plant D&D costs.
• Continue discovery stage litigation in the McGlone class action lawsuit.
• Defend against the Lykins, Rose, and Shaw complaints regarding alleged radiation releases.
• Continue to evaluate positive and negative evidence for changes to federal and state valuation allowances for deferred tax assets.
• Repay inventory loans in 2026.

Key Dates

Recommendation

Centrus Energy Corp. is strategically positioned to capitalize on the growing demand for domestic nuclear fuel, particularly HALEU, driven by global energy security concerns and the push for carbon-free power. The company's significant government contract awards, including the $900.0 million DOE task order for HALEU expansion, and substantial investments in manufacturing capacity in Ohio and Tennessee, de-risk its growth trajectory. While geopolitical risks and reliance on Russian supply are notable, the company's proactive measures to diversify supply and secure waivers, coupled with a strong financial position (nearly $2.0 billion in cash) and increasing SWU market prices, indicate robust future potential. The current valuation, considering the long-term growth prospects and critical role in national energy infrastructure, presents a compelling 'strong buy' opportunity for investors with a long-term horizon.

Keywords

Uranium Enrichment, HALEU Production, Nuclear Fuel, Centrifuge Technology, SEC Filing, 10-K Report, Centrus Energy Corp, LEU Supply, DOE Contracts, Piketon Ohio, Oak Ridge Tennessee, Convertible Notes, Supply Chain Risk, Geopolitical Risk, Clean Energy Tax Credit, Nuclear Power Industry, SWU Market, Advanced Reactors, Domestic Enrichment