Q1 2024 Earnings Summary
- Strong government backing potential: Discussions on securing up to $800 million in government-related projects along with an additional $100 million award for manufacturing and supply chain set a promising stage for future revenue increases.
- Accelerating market demand from data centers and AI: Executives noted intense and immediate interest from Tier 1 hyperscalers and data center customers—with commercial operation targets set before the end of the decade—indicating strong demand momentum for SMR technology.
- Improving cost efficiency and manufacturing readiness: The company is realizing annualized savings of $50-60 million and expects a lower ongoing cash burn, while concurrent advancements at manufacturing facilities (e.g., Doosan scaling up module production) enhance its ability to meet said demand.
- Delayed government awards: The SMR preparations programs remain uncertain as the company is still waiting for the request to come out, which might delay securing a critical $100 million government award.
- Project execution delays: The RoPower project’s Phase II FEED work is facing postponements in shareholder voting due to political uncertainty, which may delay commercial execution.
- High current cash burn: Despite planned annualized savings, the company reported a significantly high cash burn (approximately -$33.5 million in Q1), raising concerns about liquidity and near-term operational efficiency.
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Cash Burn
Q: Should Q2 cash use be around low-$20M?
A: Management noted that Q1 had a $33.5M cash use due to one-off charges, but with annualized savings underway, ongoing cash burn is expected to be below $10M per quarter. -
Data Orders
Q: When will data center orders materialize?
A: Management outlined robust and immediate demand from Tier 1 data center and AI customers, suggesting that accelerated ordering could materialize soon thanks to market urgency. -
SMR Prep Programs
Q: Any update on the SMR preparation programs?
A: Management is still waiting on a government request, with discussions around a potential $100M award within broader $800M talks, though outcomes remain uncertain due to political timing. -
Module Capacity
Q: How many modules might be ordered?
A: The focus is on execution capacity; with 6 modules currently offline and the capacity to fabricate 20 modules annually, management will scale cautiously to avoid overextension. -
Sales Agreement
Q: What’s happening with the $20M sales agreement?
A: Management explained that the agreement is designed for development funds and is part of financing discussions to support bankable projects, not an upfront award. -
RoPower FEED
Q: What are the final steps for RoPower FEED Phase II?
A: The process is delayed due to election-year timing, with a shareholders vote now expected in June/July, which will trigger the next 1-year FEED phase with NuScale as a subcontractor.
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