10-Q: NuScale Power Reports Increased Revenue in Q1 2025, Focuses on Commercialization

NuScale Power Corporation reports a significant increase in revenue for Q1 2025, driven by engineering and licensing services, as it transitions towards commercialization.

Summary

• NuScale Power Corporation's Q1 2025 revenue increased to $13.375 million from $1.379 million in Q1 2024.
• The increase in revenue is attributed to engineering and licensing fees and services related to the RoPower project in Romania.
• The company's net loss for Q1 2025 was $30.395 million, compared to a net loss of $48.080 million in Q1 2024.
• Research and development expenses decreased due to cost optimization measures.
• General and administrative expenses increased due to higher strategic business development costs and legal and accounting fees.
• As of March 31, 2025, NuScale had cash and cash equivalents of $491.4 million, short-term investments of $30.0 million, and restricted cash of $5.1 million.
• The company sold 4,548,127 shares of Class A common stock under its ATM program, generating net proceeds of $99.8 million.
• NuScale expects the NRC to complete its review and grant SDA approval for its SMR design by July 2025.
• A material weakness in internal control over financial reporting was identified related to IT general controls and internal controls across key financial reporting processes.
• The company is implementing a plan to remediate the material weakness, including hiring additional personnel and engaging expert SOX consultants.

Sentiment

Score: 7

Explanation: The sentiment is cautiously optimistic. Revenue growth is strong, and losses are decreasing, but the material weakness in internal controls and reliance on external partnerships present risks.

Positives

• Significant increase in revenue driven by progress on the RoPower project.
• Decrease in net loss compared to the same period last year.
• Strong cash position with $491.4 million in cash and cash equivalents.
• Successful execution of ATM program, raising $99.8 million.
• Anticipated SDA approval from the NRC in July 2025.

Negatives

• Material weakness identified in internal control over financial reporting.
• Increased general and administrative expenses due to strategic business development and legal/accounting fees.
• Accumulated deficit of $391.1 million and negative operating cash flows.

Risks

• Reliance on relationships with ENTRA1, Fluor, and other strategic partners.
• Potential impact of changes in US trade policy and tariffs.
• Material weakness in internal control over financial reporting requires remediation.
• The company may require additional funding in the future.
• Dependence on NRC approval for SDA application.

Future Outlook

NuScale expects the NRC to complete its review and grant SDA approval for its SMR design by July 2025, and the company believes it has sufficient funds to cover R&D activities and operating cash needs for the next twelve months and beyond, but may require additional funds.

Management Comments

• 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

NuScale is positioning itself to compete with gigawatt-sized nuclear facilities by offering a scalable, carbon-free energy solution at a reduced cost. The company's partnership with ENTRA1 is aimed at enhancing its ability to compete globally with state-owned enterprises that offer state-backed financing.

Comparison to Industry Standards

• It is difficult to compare NuScale directly to industry standards due to its unique SMR technology and focus on commercializing a new design.
• However, comparable companies in the nuclear energy sector, such as Westinghouse and GE Hitachi Nuclear Energy, are focused on larger-scale reactors and may have different financial profiles.
• NuScale's success will depend on its ability to secure customer commitments and demonstrate the economic viability of its SMR technology compared to other energy sources, including renewables and traditional nuclear power.
• The company's partnership with ENTRA1 is crucial for securing financing and competing with state-owned enterprises in the global market.

Legal Proceedings

• A lawsuit filed in 2022 by purported members and/or option holders of NuScale LLC was resolved on February 13, 2025, and the complaint has been dismissed with prejudice.
• Multiple shareholder class action lawsuits are pending in the U.S. District Court for the District of Oregon.
• A class action lawsuit titled Tucker v. NuScale Power Corporation, et al. was voluntarily dismissed in exchange for the Company submitting revised corporate opportunity waiver language for a stockholder vote.
• The SEC staff concluded its investigation as to the Company and did not intend to recommend an enforcement action against the Company.

Related Party Transactions

• NuScale incurred expenses of $5.697 million related to Fluor for the three months ended March 31, 2025.
• NuScale earned revenue of $7.269 million from Fluor for the three months ended March 31, 2025.
• Fluor accounted for 54% of total revenue for the three months ended March 31, 2025.

Stakeholder Impact

• Shareholders: The increased revenue and decreased losses are positive signs, but the material weakness in internal controls is a concern.
• Employees: The company is hiring additional personnel to address the material weakness in internal controls.
• Customers: The progress on the RoPower project and anticipated SDA approval are positive developments for potential customers.
• Strategic Partners: The amended and restated Strategic Alliance Agreement with ENTRA1 reinforces the importance of the partnership.

Next Steps

• Continue to advance the RoPower project in Romania.
• Secure SDA approval from the NRC by July 2025.
• Remediate the material weakness in internal control over financial reporting.
• Secure additional customer commitments to support long-term operations.

Key Dates

Keywords

NuScale, SMR, RoPower, Revenue, Nuclear, ENTRA1, NRC, ATM Program, Financial Results, Commercialization