X-Energy Q2 2026 Earnings Call Transcript

Quartr
Provided by Quartr
August 13, 2026

Key Takeaways

  • Positive Sentiment: DOE funding for the ARDP program could increase by up to $1 billion, bringing the potential federal cost-share contribution to $2.115 billion for the Dow project and related development work.
  • Positive Sentiment: X-Energy signed binding, long-term HALEU enrichment agreements with Centrus Energy and General Atomics, which management says cover the initial and replacement cores for its announced Xe-100 projects and reduce fuel-supply risk.
  • Positive Sentiment: Project execution remains on schedule, with TX-1 fuel-facility construction approximately 80% complete, the Dow construction permit targeted for issuance in the first quarter of 2027, and Energy Northwest moving toward a construction-permit submission in the first half of 2027.
  • Positive Sentiment: The TRISO-X fuel business received its 40-year NRC commercial license earlier this year, while a planned TX-2 facility could provide four times TX-1’s capacity and support fuel production for approximately 55 Xe-100 reactors across the expanded Tennessee campus.
  • Negative Sentiment: Despite a 154% year-over-year increase in revenue and grant income to $54.6 million, operating expenses reached $164.6 million and operating cash usage rose to $97.3 million; the company also spent $63.3 million on capital projects, although it ended the quarter with $1.9 billion in cash and investments and no debt.
AI Generated. May Contain Errors.
Earnings Conference Call
X-Energy Q2 2026
00:00 / 00:00

There are 9 speakers on the call.

Operator

Hello, and welcome to the X-energy second quarter 2026 earnings conference call. All participants are in a listen-only mode. After today's prepared remarks, there will be a question and answer session. At that time, I will provide instructions for those wishing to ask a question. Please note that this call is being recorded. I will now turn the call over to Patricia Gil, Director of Investor Relations for X-Energy. You may now begin.

Speaker 1

Thank you, and good morning, everyone. Welcome to X-Energy's second quarter 2026 earnings call. This morning, we released second quarter 2026 financial results and operational highlights for X-Energy, Inc. You can find today's presentation and our earnings press release available on the investor relations portion of X-Energy's website at investors.x-energy.com. Our remarks today will include forward-looking statements which are based on assumptions as of today and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. Our SEC filings, including our quarterly report on Form 10-Q, identify certain risk factors and cautionary statements that could cause the company's actual results to differ materially from those projected in our forward-looking statements made this morning. We undertake no obligation to update any forward-looking statement, except as required by law. During this call, we also present non-GAAP financial measures.

Speaker 1

There are reconciliations of these measures included in our investor presentation, posted on the investor relations portion of our website. Joining me today are Clay Sell, our Chief Executive Officer, and Daniel Gross, our Chief Financial Officer. On today's call, Clay will open with a review of our recent highlights and operational updates, followed by what we believe are our compelling and differentiating business factors. Daniel will then review our financial performance for the second quarter in more detail before turning it back to Clay for closing remarks. We will then open the call up to Q&A. With that, I will now turn the call over to Clay.

Speaker 2

Thank you, Patricia. Welcome, all. Good morning. It is great to be with you today. What an extraordinary time to be in the business of bringing new power technologies to the market. Based on third-party estimates, global electricity demand is expected to increase more than 75% by 2050. About a third of that growth is predicted to take place in our key markets, the U.S., the U.K., and Canada. It is estimated that the market just for SMRs could be 158 gigawatts by 2050. That is a $2.3 trillion revenue potential. At X-Energy, we have the opportunity to play a significant role in what will likely be the greatest build-out of power and electrical generation since the dawn of the electricity age.

Speaker 2

We have a transformative, next-generation technology and a great team of people that will allow us to reinvent and simplify the way nuclear power is built and expand the functions it can serve now and in the future. We are benefiting from a tremendous level of support and help along the way, from our early partnership with the U.S. Department of Energy to our first announced customers in Dow, Amazon, Energy Northwest, and the U.K. utility, Centrica. It will take us several years to fully unlock the scale of this business opportunity, but we want you to continue that journey with us today as we hit the news highlights and update you on our ARDP contract, supply chain agreements, developments at our TRISO-X fuel business, how we are using AI inside X-energy, project milestones, licensing achievements, new customer agreements, and our financial performance in the second quarter.

Speaker 2

We have a big agenda with a lot of news, so let's get to it. I will ask you to please turn to slide 3. Oh, we are already there. I want to start with financing updates on our partnership with Dow and the Department of Energy. You may recall that in 2021, X-energy was competitively awarded, and to date has been allocated approximately $1.1 billion under the Advanced Reactor Demonstration Program, a 50/50 public-private partnership to deliver our first commercial power plant with Dow in Seadrift, Texas. This DOE grant award is our largest source of revenue at our current stage of development. Yesterday, the Department of Energy formally notified X-energy that our ARDP cooperative agreement will receive up to an additional $1 billion.

Speaker 2

This funding will be subject to the same 50/50 cost share requirements as the original award and is expected to be obligated to the award as part of the normal contractual process with the department. So overall, that would increase DOE's cost share contribution to the ARDP up to $2.115 billion. Our project with Dow is important, not only because it is our initial deployment, but because of the unmatched versatility for nuclear energy that it represents. When completed, our Xe-100s are expected to provide both electricity and high-temperature industrial steam for Dow's operation, demonstrating the range of applications our technology can address. It is, of course, expected to be the first grid-scale advanced nuclear reactor deployed to serve an industrial site in North America. Okay, let's move to news updates on what we have done to strengthen our supply chain.

Speaker 2

Again, our supply chain goals are delivered for early projects, de-risk and accelerate our ability to scale the business. The availability of HALEU fuel is a current commercial constraint. We have been executing on a strategy to retire that risk for our customers and our businesses for many years. The U.S. Department of Energy and the U.K. government, as a result of our efforts and advocacy, are financially supporting the construction of new HALEU production facilities, and those incentive contracts have now been awarded and facility expansions are underway. For our first core loads at Dow, we have secured existing material, about 7.6 metric tons, from the Department of Energy. Over the last week, we have executed long-term agreements for HALEU enrichment services with both Centrus Energy Corp and General Atomics.

Speaker 2

Under the contracts, firm delivery commitments will grow through a phased approach to scale HALEU production in line with our expected commercial pipeline. Including our HALEU allocation from the Department of Energy, we now have firm agreements to support the fuel needs for the initial and replacement core loads of our announced Xe-100 projects and beyond. Those agreements give us further certainty around the fuel supply required for our pipeline and are a meaningful step toward diversifying supply, increasing our competitive advantage, and significantly reducing HALEU supply risk for our commercial pipeline. Now, let me move to another aspect of our supply chain, nuclear-grade graphite used inside our reactor core. Through an agreement we recently announced with SGL Carbon, we are working to expand SGL's production capacity for medium grain graphite.

Speaker 2

We will invest up to $8 million in milestone-based payments to support new facilities and equipment upgrades at SGL's facility in Chedde, France. Full execution of this agreement would double SGL's manufacturing capacity for medium grain graphite by 2030, enabling the facility to produce graphite billets for up to eight new Xe-100 reactors per year. All these supply chain agreements are part of our strategy to allocate a portion of our IPO proceeds to secure capacity on behalf of our customers, to incentivize early investments for our supply chain partners, to increase our competitive moat, and reduce schedule risk for our early projects. As part of our plan, these contractual obligations are expected to be transferred ultimately to our customers. It has been a lot of good progress for our commercial and supply chain team this quarter. Let me now turn to slides 4 and then 5.

Speaker 2

I would like to move to the latest developments of our TRISO-X fuel business. Our vertically integrated fuel fabrication business gives us greater control of an important piece of the reactor supply chain and will create recurring revenue opportunities for the company. in February of this year, we received our Part 70 commercial license from the Nuclear Regulatory Commission for an initial 40-year term. That was the first new commercial fuel fabrication facilities licensed by the NRC in over 50 years. Our first fabrication plant, which we call TX-1, and as you see in this picture, is being constructed with a 50/50 cost share with the U.S. Department of Energy and also received a competitively selected award for up to $148 million in federal tax credits, helping to overall reduce the project risk.

Speaker 2

In addition, we appreciate the recent $11 million economic development grant from the state of Tennessee, which will be utilized to support the continued development of our potential second commercial fuel facility, which we call TX-2, and will also support the development of our dedicated research and development center, which we call TXL. All of these located on our campus in Oak Ridge. Our TX-2 facility is also covered under NRC's Part 70 license and is currently in the design phase. This facility is anticipated to produce four times the capacity of TX-1, and once completed, this campus is expected to establish one of the world's largest commercial-scale advanced nuclear fuel fabrication sites with the capacity to produce enough TRISO-X fuel to support approximately 55 of X-Energy's Xe-100 reactors. TX-1, TXL, and the future TX-2 will form the core of our fuel fabrication and technology development campus in Tennessee.

Speaker 2

As part of that growth plan, we acquired 70 acres of adjacent land in July. This purchase brings the site's total footprint to approximately 180 acres, allowing for continued expansion covered under our Part 70 license, and it provides additional space for utility corridors, equipment staging, fuel storage, and long-term expansion. This week, we announced an extension to our cooperative research and development agreement with the Department of Energy's Oak Ridge National Laboratory. This agreement expands nearly a decade's worth of joint research, technology transfer, and process development that has enabled TRISO-X to get ready to manufacture at commercial scale. We have achieved significant process improvements that we expect will continue to reduce the cost of TRISO fuel. Let me give you an example. In our pilot plant, we have consistently achieved greater than 95% for first prep pass process yield on our kernel conversion process for TRISO fuel.

Speaker 2

This speaks to the mature process optimization in place at TRISO-X, and we anticipate receiving that level or better at commercial scale. What this means is more uranium ends up in the pebble and not discarded as waste, which means lower cost of fuel. TRISO-X's manufacturing capacity equips it to potentially earn the fuel business of customers beyond our own X-energy fleet. We have the manufacturing expertise and the capabilities to produce various types of fuel to address the needs of a broader set of SMRs, micro reactors, and nuclear space applications. Now, if we'll return back to slide 3, let me switch gears and talk about artificial intelligence. We often talk about AI in hyperscale data centers as a demand pull for nuclear, and certainly, we've experienced that in our own partnership with Amazon.

Speaker 2

But I want to briefly talk about how we are using AI tools to transform the way we do our business on the inside. At X-energy, we embrace the use of AI to further accelerate nuclear development. We view every opportunity through the lens of reducing the time and expense required to design, license, manufacture, and deploy the fuel and the reactors. We are excited to have recently joined the Department of Energy's Project Prometheus as a founding member, collaborating with organizations including Idaho National Laboratory, NVIDIA, and Amazon Web Services. As part of our commitment, we're providing $10 million in private capital, along with the use of our reactor design and fuel fabrication data.

Speaker 2

Our data will serve as a technical basis for a 3-year research campaign, leveraging the DOE's test reactors and supercomputing capabilities to integrate frontier-class AI models into uses from reactor design to semi-autonomous operation workflows, as well as fuel fabrication. Our participation in this project builds upon the ongoing development of our internal proprietary tool called APEX. This is our multi-agentic AI platform that we have currently deployed across our engineering, licensing, and operations teams, where we are already realizing meaningful time and cost savings. Now, let's turn to slide 6, and I'd like to briefly touch on the progress of our near-term milestones. First, you will note that we added a line recognizing the agreements to significantly reduce our early HALEU supply risk, which occurred this month, and it's a notable achievement.

Speaker 2

Moving on down the line, the vertical construction for the shell of our TX-1 fuel facility is progressing on schedule and is approximately 80% complete today. We are on track to meet our third-quarter near-term milestone for vertical construction completion and the commencement of the next scope of work for the interior build-out, which includes the construction of a graphite matrix powder building, utility installation, and equipment installation in TX-1. On the NRC construction permit for Dow, we anticipate that the NRC staff will close all safety questions by the end of August. We continue to expect final review of our construction permit to be completed in late 2026, with the issuance by the first quarter of 2027. In Washington State, the Energy Northwest project is expected to be our second project online and the first of 5 gigawatts of new power projects with Amazon.

Speaker 2

This project will benefit from engineering, execution, and licensing experience developed on the Dow project. Work with Energy Northwest is progressing as planned, with Energy Northwest moving toward construction permit submission in the first half of 2027. Finally, regarding our plan to announce the next 1-gigawatt project in 2026, we are in the final throes of an agreement with a major investor-owned utility for our next 1-gigawatt project. It's coming to a close. This is extraordinarily exciting news, but given the larger interests of our partners in the local communities involved, a full announcement will be made in the near future. So stay tuned for more exciting details to come. Let me turn to slide 7. On last quarter's earnings conference call, we introduced our long-term milestone roadmap found here. We recognize that our projects are long-dated and will take some years to come online.

Speaker 2

This roadmap provides you with the order of our project work streams extending into the early 2030s, so you can follow along with us on our progress as we make project development announcements. Since our last earnings conference call, there have been no changes to the anticipated timeline presented on this slide. I'd like to now turn it over to Daniel Gross, our CFO, to discuss our financial results for the quarter in more detail.

Speaker 3

Thank you very much, Clay. Please turn to slide 8. One note before I get to the numbers. This is our first quarter reporting as X-Energy, Inc. We closed the IPO the last week of April, so Q2 covers several weeks as a private company, and then a little over 2 months as a public company. In Q2 of 2026, total revenues and grant income were $54.6 million. That's $50.1 million of services revenue, which is primarily the Xe-100 design work under the Advanced Reactor Demonstration Program. Plus $4.5 million of grant income, which is primarily tied to the DAHL demonstration reactor. Total revenues and grant income were up 154% compared to Q2 of last year. The reason is straightforward. We're doing more engineering work, and the cost share under the ARDP program reimburses us for roughly half of it.

Speaker 3

As of June 30, 2026, the end of the quarter, the DOE has reimbursed $547 million to us under that program. Total operating expenses in Q2 of 2026 were $164.6 million. This breaks down into direct costs of $86.7 million and SG&A of $77.7 million. When looking at our SG&A for the quarter, it is important to recognize that $33.5 million of that expense was non-cash, equity-based compensation, mostly from options that were granted to employees at the IPO. A little under half of that equity comp expense was a one-time charge recognized at the IPO, when previously vested awards converted, and the remainder of our equity comp awards will amortize over the remaining vesting periods. With revenue up 154%, total operating expenses were up 156% compared to Q2 of 2025.

Speaker 3

There were three primary drivers, more ARDP work, more people and contractors doing that work, and the equity-based compensation, which as I mentioned, was a non-cash expense. Below the operating line, interest income was $11 million on our investment portfolio, but this is offset by $6.3 million in expenses that are categorized as other income or expense net. I want to unpack that so you can see where it is coming from. Most of that $6.3 million in expense was a non-cash mark-to-market loss of $5.6 million on a warrant that was granted to an investor in 2022 and exercised in April of this year. As the value of our equity went up, the fair value of the warrant also increased, so we had to book an expense.

Speaker 3

No cash left the building, and this won't repeat because the warrant has been exercised and the liability is gone. Netting it all out, total other income or expense was a positive $4.7 million. Turning to cash flow, operating activities used $97.3 million in the quarter, which is up from $20 million in Q2 of 2025. That reflects higher ARDP activity, corporate headcount and contractors, and some significant prepayments to vendors on long lead materials. Investing activities used $73.6 million in Q2. A lot of this was simply from rolling cash into debt instruments as other debt instruments matured. We bought $126.6 million of short-term securities, and we had $92.8 million mature. We also spent $63.3 million on capital expenditures for construction projects, including TX-1, for which ARDP reimbursed us $23.5 million in cash during the quarter.

Speaker 3

That last figure raises a question that we get a lot. Let me answer it now. As Clay mentioned, ARDP is a 50/50 cost share. Why is the reimbursement for CapEx and OpEx never exactly half of what we spent? Two reasons. First, we spend the money, and then we invoice, and then we get paid. The amount we report is cash spent on capital projects, and the associated reimbursements are affected by the timing of our cash payments versus cash receipts. Second, not everything we spend is ARDP eligible. The cost share covers the Xe-100 design work and TX-1. It doesn't cover TX-2 or TXL or subsequent fuel facilities. As Clay mentioned, we are continuing to progress the design work on TX-2. Internally, we track eligible ARDP costs separately from ineligible costs. In our financials, we report them together.

Speaker 3

Our financial statements are always going to include amounts of CapEx and OpEx that will never be reimbursed under ARDP. If you will turn to slide 9, I would like to walk you through our capital structure and balance sheet. We ended June with $1.9 billion in cash and investments. That is $1.1 billion of cash and cash equivalents, $490 million of short-term investments, and $265 million of long-term investments. This liquidity is roughly double from where we were three months ago, thanks to the $1.1 billion of net IPO proceeds. We have invested this money conservatively. Feel free to call us boring, but our priorities are capital preservation, liquidity, and credit quality. U.S. Treasury securities, high-grade corporates, commercial paper, money market, and a few similar instruments. Nothing exotic and everything matures before we expect to need it. at the end of Q2, we had zero debt outstanding. Please turn to slide 10.

Speaker 3

Our SEC filings contain a number of non-GAAP measures, several of which are based on share count. We thought that this additional color could help inform how you think about us. If you have ever pulled up X-energy's ticker on a smartphone app or used the data from many online financial sites, the market cap you are looking at probably does not, or depending on which site, may not reflect what we believe is the implied equity value of X-energy as a whole. Let me explain why and what I would suggest you use instead. When we went public in late April, we reorganized the company as an Umbrella Partnership C Corporation, or an Up-C, which you can see diagrammed in the slide on the right-hand side. Here is the short version.

Speaker 3

Because our Up-C structure has two classes of stock and different shareholders at the parent and the subsidiary level, your stock app may only be looking at our Class A common shares outstanding when it calculates the market cap. These calculations are often excluding the Class B shares, which we think leads to a misleading outcome. Holders of Class B shares hold an equal number of common units in our subsidiary, and those units can be redeemed for Class A shares. Since the Class B shareholders can redeem their common units for Class A shares, we think they should be viewed as having similar economic rights to Class A shareholders. Mind you, if they redeem, their Class B shares will be canceled.

Speaker 3

Given the possibility for this exchange, we think that for purposes of calculating our implied equity value, it is more important to add together 280 million Class A shares plus 119 million Class B shares, plus a combined total of 15 million shares of outstanding stock options, RSAs, and RSUs. That would bring you to a non-GAAP total fully diluted share count of 414 million shares to use for calculating our implied equity value. That is the share count we would use if we were calculating implied equity value, and that is also the share count that we would use for earnings per share, or in our current case, loss per share comparisons. It is a non-GAAP measure, and you will find the full reconciliation along with other non-GAAP measures, which we believe are useful in the earnings release and the 10-Q.

Speaker 3

Note that in those documents, we have also included an adjusted EBITDA calculation and an adjusted earnings per share calculation, currently loss per share, which consolidates together the A shares and the B shares. With that, I will now turn it back over to Clay.

Speaker 2

Thank you, Daniel. Let's go to slide 11. Let me provide a few wrap-up comments before we go to questions. X-energy intends to lead the way in building the technology and business model that will enable us to completely reinvent the way the world thinks about constructing and operating new nuclear at scale and provide the broadest array of functionality with the greatest geographic flexibility globally. We believe we have the right technology backed by decades of development and operational experience. We believe we have the deepest, experienced executive team. We believe we have the right business model. That is why X-energy has earned the support and capital commitment of high-quality Blue Chip customers and partners like Dow, Amazon, and Centrica. We continue to enjoy strong support, as evidenced today from our partner at the Department of Energy.

Speaker 2

We have been well-received in the communities around our projects where we are building or developing. We have secured significant supply chain commitments and are working to further de-risk our projects and provide line of sight for the deployment of our reactors while continuing to build out commercial manufacturing for our TRISO-X fuel. X-energy is uniquely positioned for the opportunity of this day. That is how we succeed in our multiple ways to win. X-energy is not built around a single project or a single source of revenue. It is built around a sustainable platform intentionally designed to drive the growth of advanced nuclear for decades to come. With that, we will now take your questions.

Operator

At this time, we will be conducting a question and answer session. To ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we poll for questions. Our first question comes from Marc Bianchi with TD Cowen. Your line is open.

Speaker 4

Hey, this is Esteban Albaladejo on for Marc Bianchi. Thanks for taking my question. I had a question on the ARDP allocation. $2.1 billion allocated is a meaningful amount there. How much more is needed to reach the 50% share for the Dow project? Is that close to the mark, or is the total share amount not finalized yet?

Speaker 2

Yeah. As you know, Esteban, we have not previously disclosed in our S-1 or other documents what the full cost of the program is going to be. You will recall that this program provides a 50/50 commitment for three big scopes of work. The design of our reference plant, Xe-100, the design, construction, and licensing of our first fuel plant, TX-1. And then in addition to that, the full total project cost of the Dow deployment in Seadrift, Texas. So that's the full scope of the 50/50 cost share. We have always enjoyed a strong commitment from the Department of Energy to see this through, strong commitment from Capitol Hill to continue to provide the appropriations to fund that.

Speaker 2

I think this most recent billion-dollar increase is evidence of that, and I'm confident to the extent more dollars will be required, they will be provided by our partners at the Department of Energy and the Congress. Because fundamentally, you'll recall the foundation of the ARDP program was created effectively in response to the technology peer competition that is currently underway with China. And the U.S. government made a decision years ago that we had to pick the best of our advanced technologies that could compete in the international market, that we could first deploy here at home, and they chose X-energy, and they chose TerraPower to invest heavily.

Speaker 2

And so I think the return on investment that we've been able to indicate through our partnerships with Amazon and Centrica and the significant backlog that we have identified makes the investments that the U.S. government are making to get us back into the nuclear game an extraordinary return. So we'll see where the number ends up, but I'm confident that the department and our advocates in Congress will stay committed to the 50/50 cost share.

Speaker 4

Got it. Okay. Thanks for that, Clay. My follow-up is on the Janus program. You are a finalist there with Project Pele before with the XENITH reactor. I think that program is moving along, I think with possible announcements maybe later this year. Are you actively pursuing that opportunity? I know the Department of Defense seems to be looking at multiple technologies for that, and seems like you have an advantage with the high-temperature gas reactor type they are already working on. Could we expect anything later this year?

Speaker 2

I will tell you, we have an extraordinary business opportunity in the deployment of Xe-100s and the manufacture of TRISO-X fuel. That is what we are focused on. That is what our board has directed us to do. That is where we think the great economic opportunity is. That is where we think the total addressable market is. We are focused on that $2.3 trillion TAM that we can access with the Xe-100 and our TRISO fuel business. Specific announcements around the Janus program haven't been made, but I will tell you, that is where our focus is on Xe-100.

Speaker 4

Got it. Okay. Thank you. I will turn it back.

Operator

Thank you. Our next question comes from Joseph Osha with Guggenheim. Your line is open.

Speaker 5

Hello. Thanks for the really interesting update this morning. You guys have talked this morning about the fuel arrangements that you have with Centrus and General Atomics, which is great. I am wondering if you can clarify what the initial DAHL loads are going to look like, whether that implies you might start with HALEU now, or is the plan still for the initial load to be LEU? Thank you.

Speaker 2

Thanks, Joe. In our standard startup configuration for an Xe-100 plant, you accurately recall that we first load LEU pebbles, and then the subsequent core is, the second core is HALEU pebbles, and it is HALEU pebbles thereafter. That is just a matter of how we manage the neutronics and the reactivity in the startup sequence. That is why we start with LEU. What was the rest of your question?

Speaker 5

Okay, so no change there, and you clarified. I thought that the fact that the initial load was LEU was perhaps more a reflection of the fuel supply situation, and what you are saying is no, it is just part of the standard commissioning process, if you will.

Speaker 2

Absolutely not. The only reason we start with LEU on the Dow project is because that is the way we will start up every Xe-100 forever, because that is what is required to manage the initial startup, neutronics and reactivity. The HALEU that we need for the Dow project will be available to us towards the end of this decade when we need it to produce the first HALEU core for Dow. As I emphasized or tried to emphasize in my prepared remarks, we have secured, through our initial contracts with Centrus and General Atomics, sufficient HALEU to cover the second and subsequent core loads for our first announced projects, and even beyond that. We will provide greater color on a go-forward basis as to that, but on those contracts, we have agreed contractually not to disclose specific timing, specific quantities, and specific pricing.

Speaker 2

I am just trying to give you a shape of how we view the opportunity and the risks that we were seeking to reduce on our initial projects at X-Energy.

Speaker 5

That makes sense. Thank you. And just a follow-up, just so that I understand, is there anything at the pebble manufacturing level, materials handling, whatever, that varies between LEU and HALEU? Or is it pretty much exactly the same thing?

Speaker 2

Well, we will use the same facility, Joe, but there are different considerations based largely on criticality factors between LEU and HALEU, but we will be able to produce both of those cores in our TX-1 facility.

Speaker 5

Okay. All right. Thank you. I will yield back. Thank you for the answers.

Operator

Thank you. Our next question comes from Michael Sullivan with Wolfe. Your line is open.

Speaker 6

Hey, good morning. Exciting news on the potential new customer.

Speaker 2

Hey, Michael, I need you to speak up. I can barely hear you.

Speaker 6

Okay. Is this any better?

Speaker 2

Yes.

Speaker 6

Okay. Sorry about that. Yeah, just wanted to ask on the customer announcement that seems imminent here, you mentioned investor-owned utility. Do they have a hyperscaler lined up, or is this preparing to just go into their rate base? How should we think about the structure of the order?

Speaker 2

Michael, I would love to give you additional details, but you're going to have to wait. We will provide clarity on the when, the where, the who, and other details in the near future. Real projects with real partners are real things, and they require a significant level of appropriate early community engagement. The communities, in my view, the communities deserve to hear first what's coming to their communities even before the investor community does. There is a process by which these agreements and plans get rolled out, and I think that's the right way to do business. All questions will be answered in time, but I just wanted to give an indication today that those announcements, the full details were imminent.

Speaker 6

Okay, great. No, I can appreciate that. Just at the federal level, you had the ARDP update. I think the DOE recently announced some potential loans for utilities on the AP1000 side. Anything you see coming down the pike on the SMR side for your technology in terms of additional DOE funding outside of the ARDP that you already have?

Speaker 2

We have ongoing dialogues with the full suite of financing entities inside the U.S. government, everything from the Energy Dominance Financing group at the Department of Energy, the Office of Strategic Capital at the Department of Defense, EXIM Bank, DFC, on and on. We fully expect to be able to access those debt financing entities for our projects. Those are ongoing discussions. When we have something to announce, of course we will, but yeah, ongoing discussions. On the AP1000 commitment, I'll just tell you that I think there are places around the country where it may make sense to build AP1000s. What I'm even more confident in is the opportunities and the customer interest in SMRs. I think just from a functionality, from a safety case, from a geographic siting standpoint, and just the quantum of the financial risk involved in bringing these projects to fruition.

Speaker 2

There are a lot of things that I think will move potential customers to our Xe-100 product. That's certainly what we're seeing. But if a few AP1000s get built, I think the country's better off for it.

Speaker 6

Great. Thank you very much.

Operator

Thank you. Our next question comes from Julien Dumoulin-Smith with Jefferies. Your line is open.

Speaker 7

Hey, good morning, team. Thank you guys very much. Appreciate the time. Maybe to just pick it up real quickly, can you add a little bit more color on the fuel supply agreements here? Nice you've done on that front. You said it's sufficient to meet the announced project needs. Can you quantify whether that's in kilograms or gigawatt terms or what have you, of what capacity and what it suffices to meet? And within that, are both of these agreements binding and what are the financial commitments on your side at this point, especially in terms of liquidity in the next few years?

Speaker 2

Julian, the agreements are binding. These are real agreements. We have contractually agreed with our counterparties not to disclose further details about timing, quantity, and price. I am not going to be in a position today to be fully responsive. I will tell you, it has given us great confidence that we have contractually retired the HALEU risk as it relates to the first HALEU core loads on our announced projects and beyond. That is what I am prepared to say today, and more details will be provided at the appropriate time. From a contractual obligation standpoint, Julian, let me just kind of go back and tell you the big picture. In our normal application of our business model, in a fully up and running market, fuel would be procured by our customers. The uranium, the enrichment services, the deconversion, et cetera. That would be an obligation of our customers.

Speaker 2

They would buy it, they would hold the inventory. That begs the question, why is X-energy doing that now? The answer is because we are at the startup of the creation of a full, diverse, functioning, and well-supplied HALEU market. We want to be part of creating that. We want to secure capacity that will serve as a competitive moat for our customers. We fully intend to transfer those obligations to our customers at the appropriate time in the state of the project. The benefit of us allocating some of our capital to this effort now and securing these contracts is we secure capacity, we help accelerate the investment that we require from Centrus, General Atomics, and others to build out these HALEU cascades.

Speaker 2

We can do that in a manner, quite frankly, before our customers are prepared to enter into those contracts, but with the full intention that we will assign those contracts to them, and they will take them over on a go-forward basis, and have that fuel supply. Does that make sense?

Speaker 7

Yeah, no, thank you for disclosing as much as you can. I appreciate that. In fact, let me actually. Look, an interesting follow-up related to this is, you guys announced this incremental 70 acres. Right? For fuel fab adjacent to, I think, TX-1. Can you talk about what you are contemplating for this TX-2 here, just to kind of keep going on this fuel line of questioning? The timing on that, just given the activity there? Obviously, you have talked about scaling this up.

Speaker 2

Yeah. Just to scene set, TX-1 basically provides enough throughput capacity for 11 Xe-100s. We have in active development far more than that. We estimate at some point in the early 2030s, we will need to bring TX-2 online. What we are doing right now is completing the design, completing the cost estimates, and beginning the early phases of our financing business plan to bring TX-2 to fruition. That's what we're doing now. We have no further announcements as it relates to the initiation of construction or the final securing of financing for TX-2.

Speaker 7

Awesome. Thanks for the details. Just to nitpick a little bit on the last question there, as it pertains to the imminent announcement, that is with a utility? Or just what kind of counterparty? If I can. I know what you said a second ago. I appreciate it. That's the last one. Thank you, guys.

Speaker 2

I'll just repeat what I said in my prepared remarks. Major investor-owned utility.

Speaker 7

Thank you.

Speaker 2

Julian, who knows them better than you?

Operator

Thank you. As a reminder, to ask a question, please press star one one on your telephone. Again, please press star one one to ask a question. Our next question comes from David Arcaro with Morgan Stanley. Your line is open.

Speaker 8

Hey, thank you. Good morning. Let's see. Great progress on the supply chain efforts this quarter on graphite and HALEU. I was wondering, is there an area that you would be focused on next in terms of de-risking further long lead materials or equipment in your supply chain?

Speaker 2

Well, you've seen us. David, thanks for the question. We've been pretty active across a number of fronts, and I think what we've communicated in the past is we're focused on the large steel components inside our nuclear steam supply system. Those are primarily produced by Doosan Corporation, and you've seen us enter into similar long-term supply agreements with Doosan Corporation. We have entered into. Have we announced our agreement on steam generator tubes? We have some other agreements in the works. We've talked about HALEU, we've talked about graphite. What else? I think there are other types of graphite that we use inside the reactor that we're also focused on. But we have a fairly disciplined approach that is run by our outstanding supply chain team about where we need to invest early, and quite frankly, where we can secure advantage with some early capacity-securing agreements.

Speaker 2

As we enter into those, we will continue to make those announcements to the public.

Speaker 8

Yep, got it. Understood. I understand we will have to wait a little bit longer for that one gigawatt, the details around the gigawatt announcement here. But could you give just any color around conversations with other customers, other projects, and just advancing other conversations or other opportunities in the pipeline. How are they going, and what is the level of interest and activity?

Speaker 2

Yeah. We have a robust level of discussions across the full range of target customers, IPPs, investor-owned utilities, industrial customers, hyperscalers, foreign utilities, et cetera. For some of those, we are in the further phases of discussion and site feasibility and review. I think we have a very robust set of conversations. It takes time, and it takes a lot of work to get a real project to the start line. I remain confident that we have a very robust set of opportunities and multiple shots on goal for the remainder of the year.

Speaker 8

Okay, great. Thanks so much.

Operator

Thank you. I am showing no further questions at this time. I would now like to turn it back to Clay Sell, Chief Executive Officer, for closing remarks.

Speaker 2

Well, thank you everyone. I appreciate you joining us today. I am a little bit disappointed that the great and eloquent Daniel Gross did not receive any follow-up questions, so we will shoot for that in the next quarter. We do look forward to sharing additional updates as we continue to execute against our near-term milestones and show you how we are positioning this company, X-Energy, to be the leader in the nuclear industry. Really appreciate your time, and we look forward to seeing you on the road and in our next conference call. Thank you.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

Powered by Quartr