NET Power Inc. (NPWR)·Q2 2025 Earnings Summary

Executive Summary

• NET Power unveiled an integrated product configuration pairing simple-cycle gas turbines (50–200 MW) with the NET Power Cycle, cutting Project Permian LCOE from >$150/MWh to < $100/MWh and accelerating “speed-to-power” for customers .
• SN1 total installed cost (TIC) range reduced to $1.6–$1.9B (excl. gas turbines), with an added $300–$400M for the 200 MW turbine fleet; value engineering shows pipe, ASU equipment/installation reductions and plan footprint shrinkage .
• Cash and investments ended Q2 at ~$475M; management guided FY25 year-end cash around ~$340M with G&A ~$40M/year and continued La Porte testing into 2026–2027 .
• Reported EPS and EBITDA materially missed sparse consensus; higher opex tied to La Porte repairs/upgrades and accelerated validation cadence, plus ongoing SN1 development, drove losses; consensus data coverage remains limited for NPWR (see Estimates Context). Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

• Integrated product strategy: Gas turbines serving auxiliary load and heat integration double exportable clean power (from ~200 MW to ~415 MW) and lower emissions, enabling earlier co-location with hyperscalers and behind-the-meter reliability. “This configuration allows us to deliver power sooner and at a lower cost per unit of power…” .
• Project Permian economics: LCOE improved by >33% to sub-$100/MWh, driven by integration, cost-down efforts, and OBBA tax changes (bonus depreciation and 45Q parity for utilization) .
• La Porte progress: Site repairs completed; >150 hours of July testing; Phase 1 expected to complete in 2025; Phase 2 to commence later 2025 and conclude early 2026; Phases 3–4 in 2026–2027. “Testing cadence has accelerated significantly” .

What Went Wrong

• Cost and schedule: First-of-a-kind SN1 still capital-intensive; interconnect timing mid-2028, earliest NET Power plant online 2029/2030; FID for net power core targeted mid-2026 and may slip; turbine OEMs’ large units sold out to 2030/2031, pushing reliance on multiple smaller/derivative units .
• Financial performance vs consensus: EPS and EBITDA significantly below limited consensus; opex driven by continued La Porte program and SN1 development; sparse sell-side coverage reduces estimate precision. Values retrieved from S&P Global.*
• Legal overhang: Shareholder litigation PRs alleged misrepresentation around Project Permian costs/timing, adding noise to investor narrative .

Financial Results

Notes: Values retrieved from S&P Global.*

Q2 2025 vs Wall Street consensus (S&P Global):

Notes: Values retrieved from S&P Global.*

KPIs and balance sheet indicators:

Margins:

Note: Margins not meaningful given minimal/absent revenue; values retrieved from S&P Global.*

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “This configuration allows us to deliver power sooner and at a lower cost per unit of power… installing gas turbines first and then integrating that equipment directly with the NET Power Cycle.” — Danny Rice, CEO .
• “Integrating the waste heat from just 50 megawatts of gas turbines… will boost our core cycle efficiency by roughly 15 megawatts… essentially results in a higher efficiency combined cycle without adding steam systems.” — Marc Horstman, COO .
• “OBBA… bonus depreciation… and 45Q parity… equates to a nearly $10 per megawatt hour lower power price.” — Danny Rice .
• “We’ve increased our startup speed… multiple overnight fired runs… expect to complete Phase 1 this year and Phase 2 early 2026.” — Marc Horstman .

Q&A Highlights

• Timeline and FID: ERCOT interconnect sized for 300 MW targeted mid-2028; gas turbine FID could occur in 60–120 days; NET Power core cycle FID aimed at mid-2026; earliest plant online 2029/2030 .
• Co-location strategy: Multi-turbine fleets to achieve 3–5 nines reliability, enabling serial number one co-location; gas turbines lead, NET Power decarbonizes later .
• Cost trade-offs: SN1 TIC excludes turbines; 200 MW turbines add $0.30–$0.40B; ongoing value engineering to tighten TIC window .
• Turbine market/partners: Large-frame turbines sold out; focus on smaller/derivative units; board alignment (Oxy representation) supportive of integrated approach .
• Cash burn and prudence: G&A ~$40M/year; maintain ~$(340)M cash by YE25; spend prudently tied to offtake/financing indications and validation program continuity .

Estimates Context

• Q2 2025 EPS: -$0.36 vs -$0.1181 consensus → miss; Q2 2025 EBITDA: -$85.80M vs -$30.19M → miss; revenue consensus $0.00 with actual not disclosed. Sparse analyst coverage (two EPS estimates) increases volatility in reported “surprises.” Values retrieved from S&P Global.*
• Potential revisions: Elevated opex from La Porte testing cadence and SN1 development may push 2H loss expectations higher; integrated product and OBBA tax benefits improve project economics but do not immediately affect near-term EPS/EBITDA.

Key Takeaways for Investors

• Near-term trading: Expect volatility around continued losses and litigation headlines; integrated product news and FID milestones for turbines could be positive catalysts .
• Medium-term thesis: Integration-first pathway de-risks commercialization, materially lowers LCOE at Permian, and broadens customer appeal (grid and hyperscalers) .
• Cost trajectory: SN1 TIC trending down; modularization/coastal multi-unit deployments remain central to long-term cost leadership .
• Policy tailwinds: OBBA and 45Q parity enhance economics; Texas Energy Fund may support turbine financing .
• Execution checkpoints: Gas turbine FID (next 60–120 days), offtake indications, La Porte Phase 1 completion in 2025, Phase 2 early 2026 .
• Supply chain realism: Smaller/derivative turbine strategy acknowledges large-frame scarcity; integration offsets auxiliary load and improves efficiency .
• Financing mix: Project-level, TopCo, government support, and commercial partnerships targeted to close funding gap as costs decline .

Notes: Values retrieved from S&P Global.*