NET Power Q3 Earnings Call Highlights

Key Points

• NET Power is pursuing an initial Texas on-site power project for an unnamed leading AI-model developer, separate from Project Permian. The parties are negotiating an energy services agreement but are not obligated to sign one; a cost reimbursement agreement may cover up to about $180 million in approved expenses, subject to conditions.
• The company is prioritizing fast-to-deploy, islanded power for data centers, combining engines, gas turbines and battery storage. Management aims to standardize the systems so projects can be replicated more quickly across sites and sizes.
• NET Power ended the quarter with about $183 million in cash and investments and no debt, but project financing is not yet committed. It has invested substantially in equipment, and management says existing resources should cover obligations for at least 12 months only if it avoids major additional commitments without financing.

NET Power NYSE: NPWR is pursuing an initial on-site power project for a prospective artificial intelligence customer while continuing to develop Project Permian in parallel, executives said on the company’s third-quarter 2026 earnings call.

The initial project would be located at a Texas site that the company has not yet secured and would be separate from Project Permian, President and Chief Operating Officer Marc Horstman said. The prospective customer is a leading developer of frontier AI models, he said, without naming the company.

NET Power is negotiating a definitive energy services agreement with the prospective customer, but neither party is obligated to enter into one, Horstman said. The company also has a cost reimbursement agreement covering approved nonrefundable expense items of up to approximately $180 million, subject to conditions, unless NET Power elects to keep the related equipment.

Focus on On-Site Power

Chief Executive Officer Danny Rice said growing data center demand is driving interest in on-site natural gas power. Large customers connected to the grid can still be cut off when the grid is under stress, he said, while regulatory processes can affect project timing.

“We are prioritizing speed to power,” Rice said. “That means evaluating every powered land opportunity in front of us, both in Texas and in other markets, and deploying our capital where we can get power online fastest.”

Rice described permitting and execution as bottlenecks for firm on-site power projects. He said islanded power does not draw on the grid or require an interconnection queue and is paid for by the customer it serves.

Horstman said NET Power is developing islanded power solutions that combine reciprocating engines, gas turbines and battery storage to serve co-located data centers. The systems are designed to scale with customers and include redundancy to meet reliability requirements, he said.

The company intends to standardize its design rather than treat each installation as a one-off project, Horstman said. Management expects that approach to make projects easier and faster to replicate across different generation technologies and sizes.

Cash and Equipment Spending

Chief Financial Officer Lee Shuman said NET Power ended the quarter with approximately $183 million in cash equivalents and investments and no debt. Property, plant and equipment rose to about $141 million from roughly $33 million at year-end.

Nearly all of that property and equipment balance was construction in progress, Shuman said. It included approximately $118 million for 10 Wärtsilä reciprocating engines and a related engineering, procurement and construction contract, plus about $23 million in deposits on two gas turbine generator packages.

Recovering those costs depends on whether the initial project proceeds, recovery under the cost reimbursement agreement, and the resale or redeployment of the equipment, Shuman said.

NET Power estimates its general and administrative expense run rate at approximately $30 million to $35 million a year. Management believes existing cash and available-for-sale securities will be sufficient to meet obligations for at least the next 12 months, assuming the company does not issue a full notice to proceed under its construction agreement or make additional significant equipment or construction commitments without committed financing or other capital.

Shuman said the projects will require project-level financing, partner capital, additional equity or a combination of those sources. None has been committed, he said, adding that securing the commercial arrangements needed to make the projects financeable remains a priority.

About NET Power (NYSE:NPWR)

NET Power, Inc. develops power-generation technology designed to produce electricity from natural gas while capturing carbon dioxide. Its system, known as the NET Power Cycle, burns natural gas with oxygen in a high-pressure carbon dioxide working fluid, generating electricity and a concentrated stream of carbon dioxide for capture and potential transport, storage or use. The company's activities include developing and commercializing its technology and advancing projects for its deployment. Rather than operating as a conventional utility, NET Power focuses on enabling power plants that use its system.

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