10-K: NuScale Power Reports FY24 Results, Navigates Path to Commercialization

NuScale Power's 10-K filing highlights ongoing efforts to commercialize its SMR technology amid financial losses and regulatory milestones.

Summary

• NuScale Power Corporation reported its financial results for the fiscal year ended December 31, 2024, outlining its progress in developing and commercializing its small modular reactor (SMR) technology.
• The company has not yet entered into a binding contract with a customer to deliver NPMs.
• Since 2007, over $1.8 billion has been invested in the development of NuScale's technology.
• The company has secured 478 patents globally, with 194 patent applications pending.
• In September 2020, NuScale's 12-module design became the first and only SMR to receive an SDA from the NRC.
• In January 2023, the Company submitted a second SDA Application to the NRC for NuScale's 6-module, 77 MWe NPM plant design, with approval expected by mid-year 2025.
• The company is working on a project with Fluor in Romania, with potential deployment expected by 2030.
• NuScale has aligned with ENTRA1 as its commercialization / developer partner for NuScale SMRs.
• The company is focused on replacing carbon-intensive coal-fired power plants and as an alternative to new-build gas-fired generation.
• As of December 31, 2024, NuScale had 330 full-time employees.
• On January 8, 2024, NuScale announced a plan to reduce the Company's workforce by 154 full time employees, or 28%.
• The company identified a material weakness in its internal control over financial reporting.
• The company is subject to stringent United States export and import control laws and regulations.
• The company is named in a number of purported class action lawsuits.
• The company received a voluntary request from the SEC's Denver Regional Office for information relating to its employment, severance, and confidentiality agreements.
• The company had cash and cash equivalents of $401.6 million and restricted cash of $5.1 million with no debt as of December 31, 2024.
• The company used $108.7 million of cash in operations during 2024.
• The company believes that based on its current level of operating expenses and currently available cash resources, it will have sufficient funds available to cover R&D activities and operating cash needs for the next twelve months.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While there are positive developments such as regulatory approvals and partnerships, the company is still incurring significant losses and has identified a material weakness in its internal control over financial reporting. The future outlook is uncertain, and the company may require additional funding.

Positives

• NuScale's 12-module design received SDA from the NRC in September 2020, and a second SDA application for a 6-module, 77 MWe NPM plant design is under review, with approval expected by mid-year 2025.
• NuScale is collaborating with Fluor on a project in Romania, targeting potential deployment by 2030, and has partnered with ENTRA1 for SMR commercialization.
• The company believes it has sufficient funds to cover R&D and operating cash needs for the next twelve months.

Negatives

• NuScale Power Corporation reported its financial results for the fiscal year ended December 31, 2024, outlining its progress in developing and commercializing its small modular reactor (SMR) technology.
• The company has not yet entered into a binding contract with a customer to deliver NPMs.
• A workforce reduction of 28% was implemented to align resources with core priorities.
• A material weakness in internal control over financial reporting has been identified, and the company is taking steps to remediate it.
• The company is named in a number of purported class action lawsuits.
• The company received a voluntary request from the SEC's Denver Regional Office for information relating to its employment, severance, and confidentiality agreements.
• The company used $108.7 million of cash in operations during 2024.

Risks

• NuScale has not yet entered into a binding contract with a customer to deliver NPMs, and there is no guarantee that it will be able to do so.
• Competitors in China and Russia currently operate commercial SMRs and may have advantages in marketing their SMRs to potential customers.
• Any delays in the development and manufacture of NPMs and related technology may adversely affect our business and financial condition.
• The cost of electricity generated from nuclear sources or our NPMs may not be cost competitive with other electricity generation sources in some markets, which could materially and adversely affect our business.
• The market for SMRs generating nuclear power is not yet established and may not achieve the growth potential we expect or may grow more slowly than expected.
• We and our customers operate in a politically sensitive environment, and the public perception of nuclear energy can affect our customers and us.
• We are highly dependent on our senior management team and other highly skilled personnel, and if we are not successful in attracting or retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
• We expect we will require additional future funding.
• Our SDA applications may not be approved, and approval could be delayed due to recent or future governmental staffing cuts, and any rework necessary to address NRC concerns could significantly delay the commercialization of our products.
• Our design is only approved in the United States and we must obtain approvals on a countryby-country basis before we can complete the sale of our products abroad, which approvals may be delayed or denied or which may require modification to our design.
• We are subject to cybersecurity risk.
• The price of shares of Class A common stock may be volatile.
• We have identified a material weakness in our internal control over financial reporting. Failure to remediate the material weakness or any other material weaknesses that we identify in the future could result in material misstatements in our financial statements and could cause a loss of investor confidence and/or a decline in the market price of our stock.

Future Outlook

The company expects the NRC will complete its review and SDA approval will be received by mid-year 2025. The company believes that based on its current level of operating expenses and currently available cash resources, it will have sufficient funds available to cover R&D activities and operating cash needs for the next twelve months.

Management Comments

• The company is transitioning from an R&D-based company to a commercial company.
• Management plans to prudently manage its expenses and cash reserves into the future, recognizing the need to secure additional customer commitments to support long-term operations.

Industry Context

The document highlights the growing global electricity demand and the role of nuclear energy in the energy transition, particularly SMRs, due to their near-term viability, competitive costs, carbon-free emissions, and reliability.

Comparison to Industry Standards

• The document mentions competitors in China and Russia currently operate commercial SMRs, but their designs have not been approved by the NRC or in any jurisdiction outside of their native countries.
• The document states that NuScale's SMR technology is currently the only NRC-approved SMR technology capable of meeting the growing demand for carbon-free baseload generation.
• The document compares the capacity factors of solar, wind, and hydro to nuclear, highlighting the higher reliability of nuclear energy.

Corporate Governance

Legal Proceedings

• Multiple shareholder class action lawsuits were filed in the U.S. District Court for the District of Oregon against the Company and certain of its current or former officers, namely John Hopkins, Chris Colbert, Robert Hamady and Clayton Scott.
• On December 10, 2024, a purported class action lawsuit titled Tucker v. NuScale Power Corporation, et al. , Case No. 2024-1272-NAC (Del. Ch. Ct.) was filed in the Court of Chancery of the State of Delaware.
• In December 2023, the Company received a voluntary request from the SECs Denver Regional Office for information relating to its employment, severance, and confidentiality agreements.

Related Party Transactions

• For the years ended December 31, 2024, 2023 and 2022 , NuScale incurred expenses for services by Fluor of $4,074, $32,875 and $31,289, respectively.
• For the years ended December 31, 2024, 2023 and 2022 , NuScale earned revenue from Fluor of $4,225, $16,897 and $8,550, respectively.

Stakeholder Impact

• The workforce reduction of 28% will impact employees.
• The company's ability to secure additional customer commitments will impact long-term operations.
• The outcome of legal proceedings and the SEC investigation could impact the company's reputation and financial condition.

Next Steps

• The company expects the NRC will complete its review and SDA approval will be received by mid-year 2025.
• The company is focusing on revenue producing commercial contracts.
• The company is focusing on revenue producing commercial contracts.

Key Dates