What X-Energy (XE) Said on Its Q3 Earnings Call

Key Points

• Third-quarter revenue and grant income rose 118% to $66.3 million, but operating expenses climbed 139% to $169.9 million and operating cash use increased to $51.2 million. X-Energy ended September with about $1.8 billion in cash and investments and no debt.
• The NRC issued a construction permit for the proposed Dow project in Texas more than a month ahead of schedule. The permit does not commit Dow to build; the company is expected to consider a preliminary investment decision in 2027.
• X-Energy is expanding its project pipeline, including a proposed 960-megawatt, 12-reactor development with AEP and Amazon, while advancing projects with Energy Northwest and others. Construction of its first commercial-scale fuel facility reached the vertical-construction milestone.

X-Energy NASDAQ: XE reported a 118% increase in third-quarter revenue and grant income as engineering activity expanded, while executives highlighted a construction permit for a proposed advanced nuclear project at Dow’s manufacturing site in Texas.

The permit, issued by the Nuclear Regulatory Commission to Dow subsidiary Long Mott Energy, allows construction of the project at Seadrift but does not represent a decision to build it. CEO Clay Sell said Dow is expected to consider a preliminary investment decision in 2027, with full-scale nuclear construction following a final investment decision.

X-Energy reported $66.3 million in total revenue and grant income for the third quarter of 2026, consisting of $51.5 million in services revenue and $14.8 million in grant income tied to the Dow demonstration reactor. Operating expenses rose 139% from a year earlier to $169.9 million.

Dow project moves through regulatory review

Sell said the NRC issued the construction permit more than a month ahead of schedule. He described it as the first NRC construction permit for a high-temperature gas-cooled reactor in nearly 60 years and the first approval for a pebble bed gas reactor.

Although Long Mott Energy was the permit applicant and recipient, X-Energy led the reactor licensing work on its behalf, Sell said. The company is continuing engineering, procurement and development work while preparing an operating license application.

Sell said Dow’s preliminary decision will depend on its own formal review process, including assessments of engineering, cost targets and operating and maintenance assumptions. X-Energy’s reactor design will not be complete before that preliminary decision, he said, but the company intends to finish it before construction begins.

The CEO said the first project is expected to come online in the early 2030s. X-Energy anticipates an operating license review of about 18 months and may file the application roughly two years before commissioning.

Sell said the company expects to reuse engineering and safety analysis from the Dow project in subsequent applications. The Dow permit took 17 months from docketing to issuance; Sell said unofficial guidance from the NRC indicated an objective of bringing subsequent reviews into a range of six to 12 months. He identified supply-chain readiness, rather than regulatory approval, as a major opportunity to shorten future project schedules.

AEP partnership expands project pipeline

In October, X-Energy announced a joint development agreement with American Electric Power and Amazon for a proposed 12-unit Xe-100 project in Sullivan County, Indiana. The project would provide approximately 960 megawatts of generating capacity and would redevelop a former coal-fueled generation site, using existing infrastructure and its PJM grid connection.

The early work includes site characterization, feasibility studies and preparation for a future construction permit application. Sell said the parties are defining the information needed to make decisions about the project’s next stages.

X-Energy is also advancing the initial phase of front-end engineering for its project with Energy Northwest in Washington state, another deployment opportunity supported by Amazon. Fluor and the Cascade Nuclear Partners consortium are working on elements of the plant design, Sell said.

Across a pipeline of 144 reactors, the company has up to 40 Xe-100 reactors associated with identified project plans and development partnerships involving Dow, Energy Northwest, AEP and Centrica, according to Sell. In the United Kingdom, the Xe-100 design was accepted into the Generic Design Assessment process in September, beginning a regulatory evaluation ahead of any site-specific approvals.

Fuel manufacturing and testing advance

Vertical construction of TX-1, X-Energy’s first commercial-scale fuel facility at its Oak Ridge, Tennessee, campus, was completed on schedule, Sell said. Interior construction and equipment installation are next, alongside work on a graphite matrix powder facility that will support fuel pebble production.

The company is also advancing designs for a second planned fuel facility, TX-2, and a dedicated research and development center. Sell said X-Energy’s TRISO-X business intends to pursue fuel customers beyond the company’s own reactor fleet.

At the X-Energy Technology Advancement Center in Frederick, Maryland, the company is expanding capabilities to test and manufacture reactor components. Sell said initial testing is underway on graphite and other components, while a planned helium test loop will be used to validate mechanical systems over the next couple of years. He said the facility’s work is not a significant input to Dow’s next investment decision.

Expenses and cash use increase

CFO Daniel Gross said third-quarter operating expenses included $93.6 million in direct costs and $76 million in selling, general and administrative expenses. The latter included $22 million in noncash equity-based compensation and costs associated with design and site preparation for TX-2.

Net cash used in operating activities increased to $51.2 million from $30.8 million a year earlier. Capital expenditures totaled $71.8 million, including spending on construction projects such as TX-1; the Department of Energy reimbursed $27.8 million in cash during the quarter, Gross said.

X-Energy ended September with approximately $1.8 billion in cash and investments and no outstanding debt. Gross said the Department of Energy had reimbursed the company $618 million under the Advanced Reactor Demonstration Program as of Sept. 30.

Sell also said TRISO-X President Joel Duling plans to retire from his full-time role but will remain a part-time senior adviser. The company is searching for a successor and expects to provide an update in the coming months.

About X-Energy (NASDAQ:XE)

X-energy is an advanced nuclear technology company developing small modular reactors and nuclear fuel. Its flagship design, the Xe-100, is a high-temperature, gas-cooled reactor intended to provide electricity and industrial process heat. The company's reactor design uses pebble-shaped fuel containing TRISO-X particles, which are engineered to retain radioactive materials at high temperatures. Founded in 2009, X-energy has worked with government and commercial partners to advance its reactor and fuel technologies.

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