Q2 2024 Earnings Summary
- Innovative Business Model & Regulatory Advantage: NuScale’s SMR technology stands out with its design certification from the NRC and a flexible BOT/BOO business model that attracts Tier-1 banks and utility customers, allowing them to access clean, 24/7 energy without owning nuclear assets.
- Robust Demand from High-Growth Sectors: The rapid expansion in data center and AI demand underscores the need for uninterrupted, decarbonized power—fueling significant market potential for NuScale’s reliable SMR solutions.
- Strategic Partnerships & Expanding Project Pipeline: Key alliances such as those with ENTRA1 Energy and Fluor Corporation—evidenced by projects like the RoPower FEED in Romania—demonstrate an active pipeline and near-term revenue generation opportunities.
- Low Revenue and Significant Losses: In Q2 2024, the company reported only $1 million in revenue against a net loss of $74.4 million, highlighting the firm's continued reliance on pre-commercial projects and its limited ability to generate operating income.
- Delayed Revenue Recognition: The ongoing Phase 2 FEED process, estimated to take approximately 12 months, could push back the start of substantive revenue contributions, prolonging the period of uncertainty and financial losses.
- Uncertainty in Forward Guidance: Management’s reluctance to provide clear revenue or earnings guidance, as noted in several analyst questions, raises concerns about the execution of its business model and the timing of future revenue streams.
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RoPower Revenue
Q: Expect revenue start in 3Q?
A: Management confirmed signing a revenue-generating contract, suggesting that revenue should begin to contribute in 3Q, though final GAAP recognition awaits final booking. -
Cash Generation
Q: What was cash from operations this quarter?
A: While no explicit cash from operations figure was provided, management highlighted significant cost savings with operating expenses dropping from around $55M to averaging $43M recently, implying improved cash efficiency. -
FEED Timeline
Q: Phase 2 FEED timeline details?
A: The Phase 2 FEED process for the Romanian project is set to kick off next week and is expected to require approximately 12 months to complete. -
Revenue Opportunity
Q: How large is the Phase 2 FEED revenue opportunity?
A: Management noted that the revenue opportunity is driven by services and pre-COD technologies, with further guidance pending additional project clarity. -
Competitive Edge
Q: How strong is the competitive landscape?
A: The company distinguishes itself with a unique BOT/BOO model and is the only U.S.-based technology with completed design certification, setting it apart from peers. -
Global Momentum
Q: Any momentum outside U.K. markets?
A: There is notable interest in Central Eastern Europe and other regions, with projects like the one in Romania underscoring the global energy security and clean energy demand.
Research analysts covering NUSCALE POWER.