Centrus Energy Q2 2026 Earnings Call Transcript

Quartr
Provided by Quartr
August 6, 2026

Key Takeaways

  • Positive Sentiment: Q2 revenue rose 14% year over year to $176.1 million, with net income of $16.8 million and adjusted net income of $38.7 million. Management reaffirmed 2026 revenue guidance of $450 million–$500 million.
  • Positive Sentiment: Commercial backlog increased to $4.5 billion through 2040, including $3.7 billion in LEU and $0.8 billion in Technical Solutions; all financial contingencies in the contingent LEU enrichment backlog have been removed.
  • Positive Sentiment: Centrus signed the DOE’s $900 million enrichment task order, completed its HALEU demonstration production requirements ahead of schedule, and expects to complete its first centrifuge at Oak Ridge in 2026. The company also raised its 2026 Piketon hiring target to more than 175 net new employees.
  • Positive Sentiment: Management cited strong demand across commercial LEU, national security, and HALEU markets, supported by nuclear reactor restarts, new reactor development, and constrained enrichment supply. It also highlighted recent HALEU agreements or planned agreements with X-energy and Oklo, which may include customer prepayments.
  • Negative Sentiment: Expansion spending is ramping, with Q2 capital and non-capital spending of $82.2 million and full-year capital spending guidance of $350 million–$500 million. Higher SG&A, stock compensation, and advanced-technology preparation costs contributed to lower GAAP net income and diluted EPS versus Q2 2025.
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Earnings Conference Call
Centrus Energy Q2 2026
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Operator

Good morning, ladies and gentlemen. Welcome to the Centrus Energy Q2 2026 earnings call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 6th, 2026. I would now like to turn the conference over to Neal Nagarajan, Head of Investor Relations. Please go ahead, sir.

Neal Nagarajan
Neal Nagarajan
SVP and Head of Investor Relations at Centrus Energy

Good morning. Welcome. Thank you to all of our callers, as well as those listening to our webcast. Today's call will cover the results for the second quarter 2026 ended June 30th. Today we have Amir Vexler, President and Chief Executive Officer, and Todd Tinelli, Senior Vice President, Chief Financial Officer, and Treasurer. This conference call follows our earnings news release issued yesterday. We have filed a report for the second quarter on Form 10-Q earlier today. All of our news releases and SEC filings, including our 10-K, 10-Qs, and 8-Ks, are available on our website. A replay of this call will also be available later this morning on the Centrus website. I would like to remind everyone that certain information we may discuss on this call today may be considered forward-looking information that involves risks and uncertainty, including assumptions about the future performance of Centrus.

Neal Nagarajan
Neal Nagarajan
SVP and Head of Investor Relations at Centrus Energy

Our actual results may differ materially from those in our forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in our forward-looking statements is contained in our filings with the SEC, including our annual report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking information provided today is time sensitive and accurate only as of today, August 6th, 2026, unless otherwise noted. Please note that we report results using non-GAAP financial measures, which we believe provide investors with additional understanding of the company's financial performance, as well as its strategic financial planning, analysis, and period-to-period comparability. A reconciliation to the most directly comparable GAAP measurements is included in the financial results section of our earnings release. This call is the property of Centrus Energy.

Neal Nagarajan
Neal Nagarajan
SVP and Head of Investor Relations at Centrus Energy

Any transcription, redistribution, retransmission, or rebroadcast of the call in any form without the express written consent of Centrus is strictly prohibited. Thank you for your participation, and I'll now turn the call over to Amir. Amir?

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Thank you, Neal, and thank you to everyone on the call today. We reported strong financial and operational results for the second quarter of 2026 that were boosted by tailwind growth across all of our major addressable markets, existing and growing commercial LEU, national security, and HALEU. These developments continue to underscore the growing imbalance in uranium enrichment supply and demand and are reflected in the continued growth in published LEU pricing. By signing the DOE's enrichment award, we have unlocked substantial non-dilutive, non-debt funding to advance our commercial centrifuge build-out program. The funding helps de-risk our build-out and advances our progress to first-of-a-kind costs while creating meaningful jobs across this nation. Let me first walk through the demand side of that equation. We are witnessing strong demand tailwinds in our primary market.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Global commercial LEU to support baseline electricity growth for existing and proven Gen II and Gen III reactor designs. In the U.S., the NRC recently proposed multiple regulatory changes and amendments that have the potential to further stimulate the industry's growth. If finalized, these changes could expedite new nuclear capacity coming online while lowering development costs for operators. Furthermore, the newly released American Nuclear Supply Chain Loans program seeks to help finance and accelerate the deployment of new large-scale nuclear reactors across the United States. Meanwhile, power operates and restarts of existing nuclear facilities continue to drive more nuclear energy coming online and subsequent LEU demand. International LEU demand is concurrently set to increase across a number of regions. In Europe, Sweden, and the Netherlands are focused on making new nuclear developments possible while Belgium is looking at ways to restart shuttered reactors.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

In Asia, we see multiple areas of growth. In April, for example, TEPCO brought back online the 1,300-megawatt Kashiwazaki reactor. Turning to the government market, we continue to see growing demand signals for enriched uranium across various departments as agencies explore avenues to add nuclear power to their energy generation plans. In the national security market, we continue to work with the NNSA on its intent to sole source certain enrichment activities from Centrus. Recall that Centrus is the only viable production-ready technology that can meet national security needs. Combined, these are strong signs of potential growth in the size and duration of the government market. We are simultaneously seeing signs of growth in the HALEU market, where three of four reactor designs that reach criticality ahead of DOE's 4th of July deadline are fueled by HALEU.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

We also believe that potential Department of War funding could help further reduce their timelines. As a reminder, HALEU represents an incremental growth opportunity for Centrus and is a source of potential near-term capital from prepayments. Because a centrifuge is multifunctional, any funding, whether related to LEU, national security, or HALEU, advances Centrus through first-of-a-kind costs. Let's shift to our financial results for the quarter. As many of you know, there can be a significant amount of variability quarter to quarter due to the nature of our business, and as such, we believe our annual results are more indicative of progress made in our LEU and CTS businesses. In the second quarter, we achieved $176.1 million in revenue, a gross profit of $49.9 million, operating income of $10.4 million, net income of $16.8 million, and diluted earnings per share of $0.77.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Adjusted net income and adjusted diluted earnings per share were $38.7 million and $1.77 per share, respectively. Turning to our commercial backlog, we are starting to see strong order momentum from the demand signals I referenced earlier, coupled with our build-out progress. We grew our backlog to $4.5 billion that extends through 2040. This is comprised of $3.7 billion in our LEU segment and $0.8 billion in our Technical Solutions segment. The LEU segment backlog is broken down between $0.7 billion of broker-dealer backlog and $3 billion in contingent LEU and HALEU enrichment sales. Todd will discuss our results in more detail. Operationally, we have made meaningful progress throughout the quarter as we remain focused on restoring America's ability to enrich uranium at scale, including the signing of our U.S. Department of Energy $900 million task order that we received earlier this year.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

The award will support deployment of large-scale production capacity as part of our multi-billion dollar LEU and HALEU capacity expansion. This marks another significant milestone in our expansion as we pivot from a technology demonstration contract to a new larger contract that supports commercial-scale production. We are proud to have completed all HALEU production requirements under our existing demonstration contract with the DOE two weeks ahead of schedule. Since we have begun our HALEU Operations contract, we have contractually produced nearly two metric tons of HALEU UF6 for the government. While the first new capacity from this transition is expected to come online by 2029, in the interim, we are working with the DOE on agreements to enable the company to privately operate the existing 16 centrifuge HALEU cascade on a commercial basis.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

With the task order funds, as well as cash generated from our existing broker business and strong cash balance, we have now met the financing contingency for our more than $3 billion of customer contracts for the purchase of LEU and HALEU, another key milestone in de-risking and advancing our ongoing multi-billion dollar expansion. Another meaningful achievement for Centrus this quarter was the signing of a letter of intent with Oklo for Centrus to supply HALEU to power up to five Aurora powerhouses for multiple years starting in 2029. We are now signing and locking in HALEU fuel commitments from off-takers, and more recently, we announced an off-take contract for HALEU with X-energy. This marks an important step towards ensuring reliable HALEU supply for next-generation reactors and validates our first-mover advantage in the HALEU market.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Our HALEU off-take commitments generally include prepayment to Centrus, which will be further negotiated in a future definitive agreement. These prepayments are another source of non-dilutive, non-debt funding for our expansion and is a structure we intend to utilize in future HALEU off-take contracts. We also continue to make progress with our supply chain partners, including locking in large commitments to help insulate us from price fluctuations and stabilize costs. We have finalized contracts with approximately 75% of the suppliers we have identified as critical. We also continue to evaluate M&A opportunities in our supply chain that align with our long-term growth strategy and create value for our shareholders. In the second quarter, we made meaningful progress in our workforce additions in both Piketon and Oak Ridge.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Finally, I'm also proud that in July, Centrus was invited to join the S&P SmallCap 600 Index, reflecting our role in advancing U.S. energy security and strengthening America's nuclear fuel supply chain. Moving on to guidance. We are reaffirming our 2026 annual guidance for total company revenue of $450 million-$500 million. Total capital spend in the range of $350 million-$500 million. Finalizing contracts with 100% of the partners we deem critical. A release of a certified for construction package. At least 100 net new employees hired at our Oak Ridge facility. Simultaneously, given the quarter's progress, we are raising our 2026 annual guidance for Piketon workforce additions from over 100 net new employees to over 175 net new employees.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Finally, we are excited to announce that we plan to have our first centrifuge completed at our Oak Ridge facility sometime in 2026, an important accomplishment and milestone that demonstrates that our supply chain has come together. I will now turn the call over to Todd and return with some final thoughts and comments. Todd?

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

Thank you, Amir, and good morning to everyone on today's call. Let me walk you through our results. Our results were in line with our internal projections and reflected not only the typical quarter-over-quarter shift in contractual mix, but also the beginning of the spend for our manufacturing program. As noted, I will be presenting financials on a quarterly and trailing 12-month basis. Total revenue for the second quarter was $176.1 million, an increase of $21.6 million or 14% versus the same period last year. TTM revenue was $473.9 million. The LEU Segment generated $153.4 million in the second quarter, a 22% increase versus the previous period last year. SWU revenue in the quarter decreased by $25.7 million due to a 23% decrease in volume of SWU sold, partially offset by a 3% increase in the average price of SWU sold.

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

Centrus also had $53.4 million of uranium sales in Q2. The Technical Solutions Segment delivered revenue of $22.7 million in the second quarter, a $6.1 million or 21% decrease over the previous period, due primarily to a $5.9 million decrease in revenue from the HALEU Operation Contract. Centrus generated gross profit of $49.9 million and $112.1 million for the second quarter and TTM, respectively, compared to a gross profit of $53.9 million in Q2 2025. The LEU Segment second quarter cost of sales of $101.8 million increased year-over-year by 36% or $26.8 million, driven by an increase in uranium sales in Q2 2026. Uranium costs increased as a result of increase in the volume of uranium sales. SWU costs decreased 23% as a result of lower SWU volumes, partially offset by a 13% increase in the average cost of SWU sold versus Q2 2025.

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

The Technical Solutions cost of sales of $24.4 million decreased $1.2 million or 5% from Q2 2025, primarily attributed to the HALEU Operations contract. The company generated net income of $16.8 million and $38.7 million of adjusted net income in the second quarter, compared to net income of $28.9 million and adjusted net income of $34.5 million, respectively, in Q2 2025. On a fully diluted basis, this equates to second quarter 2026 earnings per share of $0.77 per unit and an adjusted earnings per share of $1.77, respectively, compared to $1.59 and $1.90, respectively, for Q2 2025. On a trailing 12-month basis, Centrus generated net income of $48.5 million and adjusted net income of $92 million, respectively.

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

The second quarter net income decrease was primarily attributed to a $12.8 million increase in SG&A costs, driven by an increase in stock compensation cost and a $7.5 million increase in advanced technology costs in Q2 2026. This was partially offset by an $8.3 million increase in investment net income for Q2 2026. Second quarter adjusted net income includes $10.6 million of growth expenses in our advanced technology cost and $17.7 million in stock compensation costs, which combined and tax adjusted equals $21.9 million. The advanced technology cost includes short-term non-capitalized costs related to the expansion of our operations in Piketon and Oak Ridge that cannot be capitalized as they are associated with manufacture readiness and security training ahead of the build-out. Please refer to the financial results section of our earnings release issued yesterday for a reconciliation of net income and adjusted net income.

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

Going forward, we continue to expect to have a certain level of these types of expenses flow through our income statement as we continued our pre-preparations. Centrus backlog across both segments grew to $4.5 billion at the end of the second quarter and extends out to 2040. The growth was driven by an approximate $600 million increase in LEU and HALEU enrichment sales in the LEU segment. Of the approximate $3 billion in the segment's enrichment backlog, $2.4 billion are under definitive agreements. Turning to our capitalization and capital spend, as a reminder, non-CapEx is attributed to cost and investments such as prepayments to supplier or our growth costs associated with our manufacture and pre-preparations. In the second quarter, we had a total capital spend of $82.2 million, with $71.6 million coming from CapEx and $10.6 million classified as non-CapEx and comprised of the aforementioned advanced technology cost.

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

Going forward, we continue to expect the pace of our CapEx and non-CapEx spend to accelerate throughout the year. We finished the second quarter with $1.9 billion in unrestricted cash, using our ATM opportunistically to acquire proceeds of only $53.9 million. Importantly, all financial contingencies in our contingent LEU enrichment backlog have now been removed. We continue to feel confident in our existing cash balance, and we believe we are sufficiently funded to meet our near-term capital requirements.

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

As Amir noted, our progress to date have allowed us to raise our 2026 annual guidance for workforce additions in Piketon, Ohio, to 175+, up from 100+. We are simultaneously reaffirming the rest of our financial and operational guidance for FY 2026. Finally, we are excited to share that we expect our first centrifuge to be completed in Oak Ridge in 2026, an important milestone in our build-out. With that, I will turn the call back to Amir. Amir?

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Thank you, Todd. I am proud of the great progress we made during the 2Q across our operations and strategic partners. In summary, we are seeing strong demand signals across all three of our addressable markets: commercial LEU, national security, and HALEU. This increased demand, coupled with the progress we have made in our centrifuge manufacturing program, has led to increased momentum in our order book backlog. Importantly, the strong demand signals in commercial LEU have led to a very constructive pricing environment. Long-term LEU pricing continued its steady ascent year-to-date, while spot pricing remains at the high set last year. With market tightness anticipated for at least the near and mid-term due to constrained supply while demand continues to grow, Centrus is well positioned to benefit as a proven enricher.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Looking ahead, we will continue to focus on our mission of restoring America's nuclear fuel supply chain and are encouraged by the continued strong trends in the broader macro environment that are supporting global nuclear power development. Finally, we are excited to host our first Investor Day in December at our American Centrifuge plant in Piketon, Ohio. We look forward to sharing more about our strategy, growth opportunities, and long-term outlook at the event. With that, I will turn the call over to the operator for questions. Operator?

Operator

Thank you. Ladies and gentlemen, we will now conduct a question-and-answer session. If you have a question, please press the star key followed by 1 on your touchtone phone. You will hear a one-time prompt acknowledging your request. Your questions will be polled in the order they are received. If you would like to decline from the polling process, please press the pound key. Please ensure you leave the handset if you are using a speakerphone before pressing any keys. Please make sure to have 1 question and go back to the queue. 1 moment please for your first question. The first question comes from Jon Windham with UBS Financial. Please go ahead.

David Choe
Analyst at UBS Financial

Hey, this is David Choe on for Jon Windham. Congrats on all the progress this quarter. Thank you for taking my question. Just really quickly on the X-energy partnership, could you just give us a sense of the cadence of any deliveries you expect to make? I know X-energy is planning to bring their first facility on kind of in the first half of 2028. Do you expect any of those volumes to come from the demonstration cascade that you're converting to commercial offtake? Thank you.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Yes. Hi. Good morning. Great questions. Thank you very much. Let's start with the X-energy question. As you pointed out, we announced a very exciting agreement this morning. I'd like to just in generally frame it up as another great evidence and another data point to show that Centrus is quickly becoming a trailblazer and the go-to for HALEU. We're proud to be able to support some of the new development as far as the advanced reactors are concerned. As you know, we have already a strong order book of LEU as well. I would like to remind you that the other exciting thing here is that these HALEU agreements include a prepayment as well, which is significantly helpful to us. Now, to your specific question, unfortunately, I cannot provide too many details around deliveries and other specific terms under the contract. We are unable to provide that.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

As I said, all in all, just as a general statement, it's exciting, it's definitive, which is very important. We're looking forward to fulfilling it.

David Choe
Analyst at UBS Financial

Thank you. I'll pass it on.

Operator

Thank you. The next question comes from Bill Peterson with JPMorgan. Please go ahead.

Bill Peterson
Bill Peterson
Analyst at JPMorgan

Good morning, Amir and team, and thanks for all the details so far. I guess, given that we're less than 18 months from the Russian import ban going into effect, have you seen any changes in buyer behavior? I guess how should we think about any potential changes in financials, including your inventory or working capital, assuming customers prefer any pre-buy? Again, all this assumes there's no further waivers, but just kind of get a sense for if they're willing to sign a current level market level for SWU or just if any change of customer behavior that you're seeing.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Hey, good morning, Bill. Thank you for the question. Since you gave me a free hand in answering that question, now let me give you general thoughts as to what we're seeing, but probably cannot get into a lot of details around discussions we're having with customers. You may have heard me say this before, that we do see sort of tightness on the supply side towards the end of the decade. I do believe we're starting to see some of that. We're seeing strong momentum as far as customer interest

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Generally in buying SWUs and turning specifically to Centrus for that as the newcomer and the new entrant into the market. We're seeing very strong order momentum, and as I mentioned on the earnings call, the LEU pricing has had a very strong run-up until this point, which is very helpful to our business and further reinforces the investment that we're preparing to make here. All in all, I think it's in line with past discussions that we were having as to where we see the market going. With all the added demand side to the equation and not a whole lot added to the supply side of the equation, at least not in the next year or two, we're seeing that momentum play in favor of the sellers.

Bill Peterson
Bill Peterson
Analyst at JPMorgan

Thanks, sir.

Operator

Thank you. The next question comes from Eric Stine with Craig-Hallum Capital. Please go ahead.

Analyst at Craig-Hallum Capital

Hey, good morning. This is Luke on for Eric. Thanks for taking our question. On the cost savings front, obviously the partnership with Palantir is already proving to be extremely valuable. But can you just give us an idea of what the picture for further cost savings might look like throughout the life of your expansion project, just in terms of comparable magnitude to what you've been able to achieve thus far, since you're still just in early stages here, and if there's any cost areas in particular that you're focusing on now? Thank you.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Good morning, and again, thank you for that question. You're actually pointing out to an area that is right at the top of our priority list as we launch the project, as we commence manufacturing, as we start committing to commercial deliveries and to delivery of our centrifuges. It is extremely important, as I mentioned on the last couple of earnings calls, and I'll reiterate it here, that we, in parallel, unlock efficiencies, cost savings, and cost out efforts. We talked a little bit about our efforts together with Palantir, with some of our EPC partners. We have a lot of supply chain efforts that are aimed at yielding exactly what we're talking about here.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

The fact that we're able to lock in larger order books, the fact that we now have more clarity into customer base about the ordering, allows us to make more leveraged buys and realize savings on the supply side of our build. The other thing that I'll mention is, in addition to utilizing and expecting supplier savings, we're also launching in parallel a lot of efforts internally to ensure that the manufacturing facilities that we're setting up and the processes that we're setting up have things like lean and things that utilize to maximize efficiencies. All of that will result, no doubt, in cost savings. In terms of being able to give you details as to what it is numerically and what we're targeting, that's not something that I would talk about on this phone call.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

I'll reiterate again that being able to lock in long-term agreements and large orders due to some of the clarity that I talked about results in significant cost savings for us.

Analyst at Craig-Hallum Capital

Understood. Thank you.

Operator

Thank you. The next question comes from Mark Schroeder with William Blair. Please go ahead.

Mark Schroeder
Mark Schroeder
Analyst at William Blair

Hey, team. Congrats again on the Oklo and X-energy supply agreements.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Great. Thank you.

Mark Schroeder
Mark Schroeder
Analyst at William Blair

I understand you guys are limited on what you can disclose, but maybe a comparison may help bring out some context for us. If you look at the two HALEU contracts you recently signed with Oklo and X-energy today, can you highlight anything where they may be the same or differ? Maybe in size, timing, milestone structure? Is one further along, more definitive? Do either have take or pay commitments?

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Yep. As you know, I'm fairly limited in the details that I can provide, just because there are non-disclosure agreements, and we just typically not in the habit of revealing details of commercial agreements. However, there are a lot of similarities. I was mentioning on the last couple of calls that we are starting to see a much greater ability from our customer base to actually commit to legally binding agreements, a definitive agreement, and that's what you saw with the X-energy agreement that we've announced, and that's what we're marching towards with Oklo as well. I do want to explain a little bit of the LOI dynamic versus a contract. The LOI is a step that precedes a definitive contract. This is an agreement over general terms as we see them, and once we get to that point, we're very close to finalizing contractual terms and conditions.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

The similarities that we're seeing is you're seeing now some of these OEMs being able to commit and put fuel as a priority in their purchasing strategy. We're seeing a maturing of the SMR market. Probably the most important thing I want to convey on this call is that we now are leading the pack. We are the HALEU supplier. We now are the go-to for HALEU supplies. As you know, we kind of view HALEU as a bonus. LEU is the sure business, the sure thing in the market. We've been focusing on that very strongly. HALEU has been really a big bonus for us. I talked a lot about just generally the economies of scale. We naturally are trying to not only get the HALEU, but also get the LEU feed, which is extremely important to us for economies of scale.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

The third similarity that we're seeing is prepayments. We're seeing the willingness, the ability, and our sort of strong preference for a prepayment, which adds significantly to the non-dilutive capital that we're able to invest.

Mark Schroeder
Mark Schroeder
Analyst at William Blair

Thanks, Amir. Appreciate the call.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Thank you.

Operator

Thank you. The next question comes from Vikram Bagri with Citigroup. Please go ahead.

Analyst at Citigroup

Hi, it's Ted on for Vik. Thanks for taking our questions. I just wanted to come back to the guidance. Could you just maybe remind us what's driving the bookends there? The release had mentioned the potential roll-off of funding for the operations contract. Just wanted to understand where that may fit within the revenue guidance range.

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

Yes. Just a reminder, on our revenue guidance, we increased it last quarter. One of the things that I just want you to mind is our business has variability from quarter to quarter, it's always wise. That's why we are talking about our earnings also in the trailing 12 month. We're not providing quarter-over-quarter guidance, however, we're maintaining our guidance for the year. We feel that along with our strong order book and the market maturing, that we are able to maintain our guidance at the current sense for revenue and also CapEx. Additionally, another strong item is that we've increased our headcount around the Piketon facility, which shows our continued momentum and our build-out at Piketon.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

I'd like to add to what Todd is saying. Just a very exciting announcement for us that obviously we're communicating and transmitting here, is that the first centrifuge is going to be completed in an Oak Ridge facility sometime in 2026, as we announced. Again, this is in line with the investment that we're making, the project planning that we have, This is probably one of the most exciting steps towards realization and commencement of enrichment in Piketon.

Analyst at Citigroup

Got it. Thank you. One further question, just in terms of the increase to the backlog quarter-over-quarter, are you able to just talk about what led to that increase in terms of did the signing of the DOE awards contribute to that, or are some of the more recent awards within there? How do you actually define the backlog? Does it include any LOIs?

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Unfortunately, I won't be able to get into a lot of details, but I will tell you this does not include the DOE. These are all commercial agreements. The increase in backlog has to do with commercial agreements. I cannot really go into any more detail than that.

Analyst at Citigroup

Thank you.

Operator

Thank you. The next question comes from Rob Brown with Lake Street Capital Markets. Please go ahead.

Rob Brown
Analyst at Lake Street Capital Markets

Good morning. Congratulations on all the strong progress. Just want to talk a little bit more about the offtake agreements, maybe just sort of big picture. What's your thinking on the amount of your future capacity that you hope to have in terms of offtake agreements signed up? This, I guess, is a HALEU specific question, but how much of capacity do you hope to have offtake agreements signed for?

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Yes. Good morning. Thank you for the question. I think a few calls back, I was mentioning that really our strategy is depending on what our solid order book looks like, that would sort of determine the proportion of LEU versus HALEU that we're building. At this point, based on what we're locking in, we're not really changing the proportions of what we're building out. We are going to be building both. We have the flexibility to build both. Depending on the customers that step forward and are making firm commitments, that's what we're going to be building. Obviously, we're going to be looking for solid commitments for as long of a term contract as possible.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

We kind of transmitted exactly those points to the market last year, and I'm happy to say that it's been kind of progressing exactly in how we transmitted it last year as well.

Rob Brown
Analyst at Lake Street Capital Markets

Good. Thank you. I'll turn it over.

Operator

Thank you. As a reminder, please limit your question to one question only and go back to queue. Thank you. The next question comes from Ryan Pfingst with B. Riley Securities. Please go ahead.

Ryan Pfingst
Ryan Pfingst
Analyst at B. Riley Securities

Hey, guys. Thanks for taking the question. Maybe a follow-up on your work with Palantir and efficiencies more broadly. You discussed efforts in one of the previous responses on the cost side, could you give more detail on progress you're looking to make on lead time reduction?

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Hey, good morning, Ryan. Thank you for that question. You are correct. I think lead time is extremely important as an opportunity as well as cost out. The reason is we're backing into commercial agreements, quite frankly, the commercial agreements are demanding even faster timelines. There is a gap in the market in terms of supply, as I mentioned to one of the earlier questions. There is really a tangible and real reward to whoever can come to market with enrichment capacity as soon as possible.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Part of our work with Palantir, part of the work that we have with our EPC providers and other partners, meaning the large suppliers that I referenced earlier, all of these critical suppliers, we have ongoing efforts and sort of projects that we kicked off where we look at both lead times and we looked at cost out because lead times really translate into enhanced revenue and being able to realize revenue much earlier, much sooner. We're focused on that. I hope I was able to answer your question with sufficient detail. I'm not sure that I can go into any more detail than that.

Ryan Pfingst
Ryan Pfingst
Analyst at B. Riley Securities

No, that's great. I appreciate it, Amir.

Operator

Thank you. The next question comes from Nicholas Amicucci with Evercore. Please go ahead.

Nicholas Amicucci
Nicholas Amicucci
Analyst at Evercore

Hey, good morning, Amir and Todd. I'm going to kind of focus back on the guidance, too. Just as we think about the CapEx ramp through the back half of the year, and the completion of the centrifuge, how should we think about kind of the cadence of the balance of the spend through the end of the year? Then as we kind of think about into 2027, where that CapEx number kind of filters out?

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

Thanks, Nick. Well, first I'll say is this project will continue to ramp up. We're not going to provide guidance just at this point for beyond 2026. As I mentioned, you see that we maintained our guidance for 2026 around the CapEx. You saw the most recent quarter in which we spent through either prepayments, capitalized labor, or pre-orders. This project will continue to move forward. I think one of the items that I will also point to that shows additional momentum is the increased headcount at Piketon. What we believe is that the accelerated spend and moving forward with our project, in addition to increased customer demand and backlog, allow us to move at a cadence that will meet our customer demands for their deliveries in the future period.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Nick, this is Amir. I just wanted to add something to what Todd was saying. It may be somewhat tangential to your question around cadence, but I mentioned it earlier and just want to emphasize it again. We did announce, and we're very excited about this, that the first centrifuge is going to be completed this year. The intent obviously is here, we're building a manufacturing facility, which is a first of a kind in the U.S. to actually manufacture one of the most complex things humans have ever invented, which is the centrifuge. It is an impressive facility. We have top people, top engineers, top suppliers working on it, and we are excited at the fact that we're doing something that has never been done before. It's coming together. The first centrifuge is the first concrete sign and proof of it.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Obviously the intention is that there is going to be a cadence of production that is fully synchronized with how we are supposed to deliver the product past the end of the decade. Although I cannot obviously give you guidance, as Todd said, in terms of numbers, but definitely look at it that way.

Nicholas Amicucci
Nicholas Amicucci
Analyst at Evercore

Great. That's helpful. Look forward to seeing it in December. Thank you.

Operator

Thank you. The next question comes from Jeff Grant with Northland Capital Markets. Please go ahead.

Jeff Grant
Jeff Grant
Analyst at Northland Capital Markets

Hey, good morning, guys. Maybe to build on the last topic, on the hiring front, you guys continue to make obviously positive progress on accelerating the hiring goals at Piketon. Can you touch on the potential, I guess, de-risking or accelerating of timelines to first cascade given the hiring acceleration? Are those correlated at all, or can you touch on any other benefits to the business or timeline with the accelerated hiring? Thanks.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Yeah. This kind of goes to the earlier question that I had maybe two, three questions ago, where I talked about not only cost savings but improving lead times. Being able to improve lead times has tangible, real benefit to the company in terms of our ability to get on the market quicker. A lot of our efforts are associated with going faster and taking costs out. Some of the acceleration in adding the workforce that you referenced, and as we've talked about in our guidance, is directly related to that. Overall, I view that as a positive sign. I view that as something that is meant to absolutely ensure that we are delivering on our commercial commitments and potentially do better than that. Obviously nothing new to announce at this point.

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

Yeah. I just will make one more point that when you think about the Piketon versus Oak Ridge headcount, as Amir said, we're setting up a kind of a first-of-a-kind facility in the United States to manufacture enrichment. That's where we're manufacturing the centrifuges, which are then shipped to be installed and stood up in Piketon. All of these items are connected, where the supply chain, the lead times, the quicker that we can stand up the manufacturing and produce those centrifuges, they are able to be shipped to Piketon. Currently, there is a lot of work that's being done at Piketon to be prepared for those centrifuges to be received and installed so we can begin enrichment.

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

I hope many of you are able to attend the investor day in December, in which you will actually be able to see the facility and understand it in a greater detail.

Jeff Grant
Jeff Grant
Analyst at Northland Capital Markets

I appreciate the details and look forward to it. Thank you, guys.

Operator

Thank you. The next question comes from Joseph Reagor with ROTH Capital Partners. Please go ahead.

Joseph Reagor
Joseph Reagor
Analyst at ROTH Capital Partners

Hey, Amir and team. Thanks for taking the questions from everybody. A lot of my questions have already been touched on, but just kind of trying to put a bow on everything you guys just said. Is it still the expectation that commercial production would commence somewhere around late 2029 at Piketon? Or is that timeline potentially moving forward?

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

I would remove the adjective "late" and just say in 2029. That is our goal, absolutely. To use your words, to put a bow on it, we are exploring opportunities and working hard to ensure that we can potentially compress timelines. There is nothing to announce and no commitments at this point.

Joseph Reagor
Joseph Reagor
Analyst at ROTH Capital Partners

Okay. That's helpful, just to sum it up. Thanks. I'll turn it over.

Operator

Thank you. The next question comes from Sameer Joshi with H.C. Wainwright. Please go ahead.

Sameer Joshi
Sameer Joshi
Analyst at H.C. Wainwright

Hey, Amir. Thanks for taking my questions. Could you talk about the SWU price dynamics here? I think if I heard right, the prices went up 3% during the quarter, whereas the costs went up 30%. What are the drivers for the costs going up?

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Hey, good morning, Sameer. This is one of my favorite questions to talk about. Reason is it really kind of summarizes the market in one number that everybody can look at. Obviously, opinions may differ, but it comes down to really basic economics. SWU prices have been escalating and are still escalating due to the simple fact that you have demand that is outstripping supply. More importantly, this is 2026, we still have two, three more years or so until there is capacity that's going to start to come online from numerous projects that have been announced. I still think that my personal view is there is going to be continued to be constraint. We're going to continue to see some of these dynamics of being a seller's market, so to speak. The simple answer is there has been no new capacity added.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Not a day goes by where we're not hearing of more new reactors, operates, decommissioned reactors coming back online, new plans for new reactors. All of these require fuel. All of these require more fuel than they required before. Capacity remains the same. That's what you're seeing in the prices. As I said, in the near term, I don't see that dynamic changing a whole lot.

Sameer Joshi
Sameer Joshi
Analyst at H.C. Wainwright

Amir, can you also comment on what is driving the costs up concurrently? I would imagine it's mostly energy costs, but there are some other costs that are also clearly going up.

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

Well, the costs relate to a mix of our SWU and uranium costs. Obviously, we can't comment on specific cost of each deal, the inventory cost is a contractual mix in how we account for the inventory on the books. Again, we're seeing strong SWU prices. Our margins are coming in line with our expectations, we continue to see market demand that will maintain those SWU prices.

Sameer Joshi
Sameer Joshi
Analyst at H.C. Wainwright

Understood. Thanks for that. I'll step back.

Operator

Thank you. The next question comes from Drew Scott with Needham & Company. Please go ahead.

Drew Scott
Drew Scott
Analyst at Needham & Company

Hi, good morning. Thank you for taking my question. Can you guys talk about pricing structures in your offtake agreements that you guys are pursuing? Are you guys using the fixed price structures, or are you guys indexing to some type of pricing? If you think the market is tightening, how much offtake are you wanting to sign today?

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

Yeah. Currently, we can't comment on our pricing. I'm assuming you're talking around all offtake arrangements on the pricing of that. I just want to make sure I understand your question, Drew.

Drew Scott
Drew Scott
Analyst at Needham & Company

Yeah.

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

Okay. Yeah. We can't comment on the specific pricing of our contracts, unfortunately. We have NDAs. I think one of the most important areas that you see, and I think Amir mentioned this several times during the call, is these are the new contracts, and we also met our financial contingencies on our backlog, is that they're definitive. Obviously, we've passed our first-of-a-kind cost in what we would call our initial build-out. So the more offtake that we sign results in further economies of scale, and we're continuing to meet all of our customer demands. As you see, the HALEU market has matured quite nicely over the last six months, and we continue to be there to be the first HALEU provider in the market.

Drew Scott
Drew Scott
Analyst at Needham & Company

Okay, great. Thank you.

Operator

Thank you. The next question comes from Christopher Souther with Truist. Please go ahead.

Christopher Souther
Christopher Souther
Analyst at Truist

Hey, guys. Thanks for all the color here, congrats on the progress, both in Piketon and Tennessee and with some of these customers. Maybe you can give us an update just on how discussions are going with utilities for LEU on potential long-term contracts now that we've met financial contingencies. How should we think about the cadence for incremental orders between now and 2029? It's great to see some of these SMR developers that are dependent on HALEU being proactive, but curious if you have a sense or target on the visibility we could continue to build between now and 2029. If you're seeing more urgency for contracting from some of the traditional utility customers as well, given the pricing trends.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Excellent question. Thank you for that. I stated numerous times on our earlier calls that we were greatly appreciative and focused on the LEU market. That provides a strong foundation for our offtake backlog. These are solid commitments that are needed by reactors that are operating every day and will continue operating for decades. They obviously are at the top of our list. The dynamics there is, you pointed out correctly, the fact that we now have essentially no required contingency there, that we have met across the threshold. That makes us a much lower risk startup and a much lower risk enricher on the market. I would expect that that would give us a lot more play with utilities. We are seeing, generally, more interest and inward look by utilities towards the few enrichment providers that are in the market now.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

I am sensing that there is a lot of focus on the new entrant to make sure that there is competition in the market. We're getting a lot of advantages by being the new entrant and somebody that makes that investment, and now represents a much lower risk than we would have, say, a few years ago. All in all, the dynamics is unfolding in our favor, and we are in constant engagement with utilities that are looking to fulfill their LEU needs for years to come. I will add, and I said this before as well, that some of these discussions don't result in the linear numbers that you can track quarter to quarter. They're lumpy in how they're being delivered. Some of these discussions take longer, some of them take less time.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

All in all, we continue to make that a priority from a commercial standpoint, the existing reactors and the existing LEU needs here in the U.S. and abroad.

Christopher Souther
Christopher Souther
Analyst at Truist

Okay. Maybe just kind of following up there, as far as contracts timing, understanding there's stuff that we won't necessarily see in the interim, but is 2028, 2029 kind of big circle dates for contracting from some of those? Could we see some of that earlier?

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Sure. I want to make sure I understand your question. Your question is there an opportunity to have delivery in 2028, like earlier than we announced?

Christopher Souther
Christopher Souther
Analyst at Truist

No. As far as longer-term contracts, are they in a bit of a wait and see for some of that for incremental stuff beyond your current backlog? Is there kind of upside to the backlog between now and 2029 materially?

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Right. Yeah. I hope I'm answering your question. If I don't, please course correct me on that. The buying patterns of the utilities are very different from utility to utility. The larger utilities and the smaller ones have different strategies as to when they go to market. Some of them have different tolerance for risk or interest in incumbents versus new entrants. As I said, the fact that we are now delivering centrifuges or we're going to be demonstrating that we're delivering, installing, and we also have no financial contingencies, I believe that there is going to be a lot more interest from utilities that are in a wait and see mode, and there's quite a few of them there. Fully expect that.

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

Yeah. One thing I'll add is that obviously the market anticipated the Russian ban and a lot of the market in the near term, utilities have secured their position. Discussions with the utilities and the RFPs are for the future periods, and future periods when we plan to have capacity online. I would just remind you that we have a strong broker business that has supported Centrus' cash flows over the past years and continues to support Centrus cash flows, and we stand ready to meet any customer requests that may come in in the near term.

Christopher Souther
Christopher Souther
Analyst at Truist

Got it. No, that's really helpful. Thank you.

Operator

Thank you. The next question comes from Joseph Osha with Guggenheim Securities. Please go ahead.

Analyst at Guggenheim Securities

Hey, guys. This is Peyton on for Joe. Thanks for taking our questions. I guess just stepping back from the quarter here. As you transition the HALEU cascade from cost reimbursable DOE work to commercial operations, what is the fully ramped earnings power of the combined LEU and HALEU business look like? And if you could say a couple things about what needs to go right over the next 18-24 months to get there, that'd be great. Thanks.

Todd Tinelli
SVP, CFO, and Treasurer at Centrus Energy

Yeah. We don't provide any additional guidance on that. Obviously, the transition of the demo cascades to commercial is demonstrating our ability to operate these cascades, our ability to produce HALEU that's out in the market. We're excited to be able to continue those cascades and provide commercial HALEU. Obviously, these require a LEU feedstock. This will develop over time. Currently we can't provide any additional guidance on this.

Amir Vexler
Amir Vexler
President and CEO at Centrus Energy

Yeah. I would like to add something to what Todd is saying, although not directly related to your question. As he said, there's very limited amount that we can provide in terms of guidance here. When you think about the intent of the demo cascade, it was really to demonstrate our technology and to de-risk the technology. What a great story where we are transitioning these demo cascade equipment right into commercial operations. There's a lot to be read and concluded here as far as the demonstration of our technology, the capability of our technology, and the high expectation that we have set for it to operate in the field. All in all, we see this as very positive progress and development.

Analyst at Guggenheim Securities

Great. Thanks, guys.

Operator

Thank you. There are no further questions at this time. I will now transfer the conference over to Neal Nagarajan, Head of Investor Relations. Please go ahead, sir.

Neal Nagarajan
Neal Nagarajan
SVP and Head of Investor Relations at Centrus Energy

Thank you, operator. This will conclude our investor call for the second quarter of 2026. As always, I want to extend a thank you to our listeners and our analysts online and those who called in. We look forward to speaking with you again next quarter and sharing more information on our upcoming investor day.

Operator

Thank you. Ladies and gentlemen, this concludes the conference call for today. Thank you for your participation. You may now disconnect.

Executives
    • Neal Nagarajan
      Neal Nagarajan
      SVP and Head of Investor Relations
    • Amir Vexler
      Amir Vexler
      President and CEO
Analysts
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