enCore Energy Corp. (EU)·Q1 2025 Earnings Summary

Executive Summary

• Revenue beat versus S&P Global consensus, but EPS missed due to higher operating costs and a $9.9M unrealized loss on marketable securities; GAAP revenue was $18.24M vs $11.94M consensus, while GAAP diluted EPS was -$0.13 vs -$0.02 consensus (S&P Global “Primary EPS” basis differs from GAAP) . Values retrieved from S&P Global.*
• Operationally, Q1 featured improved extraction efficiency: 130,015 lbs U3O8 extracted at $36.11/lb, deliveries of 290,000 lbs at $62.89/lb, and inventory of 153,058 lbs at $40.39/lb .
• Strategic execution accelerated: second IX circuit at Alta Mesa doubled flow capacity to 5,000 GPM; management expects meeting 2025 deliveries without additional market purchases at current extraction rates .
• Risks rose around internal controls and litigation: material weaknesses in ICFR persist and a federal securities class action and CEO employment arbitration were disclosed .
• Near-term catalysts: continued wellfield buildout and licensing (Upper Spring Creek RML inclusion) could lift capture rates and reduce unit costs; loan repayment schedule and realized pricing are swing factors for cash flow .

What Went Well and What Went Wrong

• What Went Well

  • Extraction efficiency and capacity: “our extraction process is faster than anticipated, which is expected to be positive for revenue and return on investment” (Executive Chairman, re: Alta Mesa second IX circuit) .
  • Delivery execution and contract coverage: 290,000 lbs delivered at $62.89/lb; remaining 2025 deliveries of 365,000 lbs are contracted, and at current rates the company expects no further market purchases to meet 2025 commitments .
  • Cost progress in extracted pounds: 130,015 lbs extracted and processed at $36.11/lb; extracted pounds in COGS at $45.62/lb (cash $31.26, non-cash $14.36) .

• What Went Wrong

  • Profitability: GAAP diluted EPS -$0.13 (vs -$0.04 y/y) driven by higher operating expenses related to wellfield installations and a $9.876M unrealized loss on marketable securities; gross margin was -30.5% .
  • Cash flow headwind: operating cash flow was -$7.7M, impacted by a $12.2M cash repayment on the uranium loan during Q1 .
  • Controls and legal overhang: management determined disclosure controls were not yet effective due to material weaknesses in ICFR; a federal securities class action and CEO arbitration add uncertainty and potential costs .

Financial Results

• Notes: Q4 2024 values marked with * and the margin rows are Values retrieved from S&P Global.*

Operational KPIs

Estimate vs. Actual (S&P Global vs Company)

• Notes: Values retrieved from S&P Global.* Company-reported GAAP diluted EPS was -$0.13 .

Guidance Changes

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript was available in our document set.

Management Commentary

• “At the Alta Mesa CPP, we have learned that our extraction process is faster than anticipated, which is expected to be positive for revenue and return on investment.” — Executive Chairman, on second IX circuit and wellfield expansion .
• “The improvements at the Alta Mesa CPP are the result of a true team effort… we look forward to steady advancement of our uranium capture rates.” — Executive Chairman, April operational update .
• “Wellfield development continues to show positive results… the current rate of under two days per installed well is the best in the Company’s history at the Alta Mesa Project.” — Operational optimization update .

Q&A Highlights

• No earnings call transcript was found for Q1 2025; therefore, there are no Q&A highlights available from management in our document set.

Estimates Context

• Results vs. S&P Global consensus: Revenue beat ($18.24M vs $11.94M) on stronger deliveries and realized pricing, while EPS missed (S&P “Primary EPS” actual -$0.075 vs -$0.020 consensus) due to higher operating expenses and a $9.876M unrealized loss on marketable securities . Values retrieved from S&P Global.*
• Basis note: Company GAAP diluted EPS was -$0.13, which differs from S&P’s “Primary EPS” methodology; investors should align future estimate tracking with the preferred EPS basis to avoid apples-to-oranges comparisons .
• Estimate revisions: Given improved extraction and capacity, revenue estimates may drift higher; however, margin and EPS trajectories will depend on delivered mix (purchased vs extracted), non-cash depletion, OpEx from wellfield installations, and marketable securities volatility .

Key Takeaways for Investors

• Revenue outperformed consensus; the top-line outlook benefits from ramping extraction and expanded IX capacity, but EPS leverage remains constrained by unit costs, OpEx, and non-cash items .
• Unit cost trajectory is improving on extracted pounds ($36.11/lb), but delivered costs still reflect purchased inventory; increasing the fraction of extracted deliveries should narrow the gap over 2025 .
• Cash flow watch items: uranium loan repayment schedule (through 6/27/25), realized prices vs contract mix, and wellfield capex/installation pace; Q1 operating cash flow was negative due to loan repayment .
• Execution catalysts: continued wellfield expansion, faster capture rates, and Upper Spring Creek RML inclusion enabling new satellite IX capacity tied to Rosita .
• Risk balance: material weaknesses in ICFR and ongoing litigation elevate governance and legal risk premiums; progress on remediation and case outcomes will influence multiples .
• Contracted base supports visibility: 8.315M lbs in commitments and 365k lbs remaining in 2025 deliveries underpin volumes; management expects no market purchases to meet 2025 at current extraction rates .
• Stock drivers: proof of sustained extraction rates without purchasing, cost reductions from mix shift, and clean ICFR audit opinions are likely to be inflection points for sentiment and valuation .

Supporting Detail: Non-GAAP Cost Tables (Company)

• Total costs of U3O8 sold in Q1-2025: 290,000 lbs at $62.97/lb; purchased 216,289 lbs at $68.89/lb; extracted cost $45.62/lb (cash $31.26; non-cash $14.36) .
• Inventory at Q1 close: 153,058 lbs at $40.39/lb (purchased 28,711 lbs at $59.80/lb; extracted 124,347 lbs at $35.91/lb; extracted cash cost $22.99; non-cash $12.91) .

Additional Context

• Sales mix and pricing: Q1 volumes 290,000 lbs vs 320,000 lbs y/y; realized price $62.89/lb vs $94.98/lb y/y (commodity-driven decline) .
• Management changes/oversight: acting CEO appointment; special committee of the Board to oversee operations and performance .

Citations:

• Q1 2025 8-K and PR:
• Q1 2025 10-Q and MD&A:
• FY 2024 PR (context):
• Operational PRs (IX circuit, extraction ramp, wellfield expansion): –
• Upper Spring Creek RML inclusion PR:

(*) Values retrieved from S&P Global.