Centrus Energy (NYSE:LEU) Q3 2026 Earnings Call

0:00 Good morning, ladies and gentlemen, and welcome to the Centris Energy Q3 2026 earnings conference call. At this time, all lines are in listening mode, and following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press R0 for the operator. This call is being recorded on Thursday, November 5th, 2026. I would now like to turn the call over to Mr. Neal Nagarajan, Senior Vice President, Investor Relations. Please go ahead.

0:33 Good morning. Welcome and thank you to all of our callers as well as those listening to our webcast. Today's call will cover the results for the third quarter of 2026, ended September 30th. Today we have Amir Vexler, President and Chief Executive Officer, and Todd Tinelli, Senior Vice President, Chief Financial Officer and Treasurer. This conference call follows our earnings news release issued yesterday. We have filed our report for the third quarter on Form 10Q earlier today. All of our news releases and SEC filings, including our 10K, 10Qs, and 8Ks, are available on our website. A replay of this call will also be available later this morning on the Centris website. I would like to remind everyone that certain information we may discuss on this call today may be considered forward looking information that involves risks and uncertainty, including assumptions about the future performance of Centris.

1:31 Our actual results may differ materially from those in our forward looking statements. Additional information concerning factors that could cause actual results to materially differ from those in our forward-looking statements is contained in our filings with the SEC, including our annual report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking information provided today is time-sensitive and accurate only as of today, November 5th, 2026, unless otherwise noted. Please note that we report results using non-GAAP financial measures. Thank you for joining us today. Any transcription, redistribution, retransmission, or rebroadcast of the call in any form without the express written consent of Centris is strictly prohibited.

2:37 Thank you for your participation. I will now turn the call over to Amir.

2:42 Amir? Thank you, Neal, and thank you all for joining us today. I am happy to report that Centris is continuing to build its reputation on meeting its commitments, growing its credibility, which is leading us to capturing more market share. We made significant progress during the third quarter across our commercial, operational, and financial objectives capped off by the recent completion of our first centrifuge in Oak Ridge, Tennessee, ahead of our year-end target. We now proved that U.S. centrifuge manufacturing is a reality. It is a historic milestone for Centris and the United States. This landmark occasion was the culmination of a number of other achievements by the team, including the strategic acquisition of one of our key suppliers, Westerman.

3:34 This marks us officially locking in all of the suppliers we deem critical while also completing our first certified for construction packages. Two additional 2026 operational targets we have achieved ahead of our year-end target. Furthermore, We grew our enrichment backlog from $3 billion to $5.4 billion and successfully raised funds in a prudent manner that keeps us well capitalized. Finally, we are excited to announce that we are now using the existing 16th Centrifuge Cascade to enrich HALU for the commercial market, making Centris the first U.S.-owned commercial enricher for the market since our gaseous diffusion days.

4:21 And against this backdrop, we see continued and growing commercial validation across all three of our addressable markets. Commercial LEU for the existing commercial nuclear reactor fleet for baseload electricity, a growing national security imperative that continues to increasingly diversify, and HALU to support the next generation reactors that will also require LEU feedstock. It is important to distinguish Centris' unique opportunity set from those of the broader nuclear market. We are positioned to capitalize on all three of these markets. First and most importantly, our primary focus is on baseload electricity from contracts with investment-grade utilities.

5:11 There is a significant existing and growing gap in commercial LEU supply and demand, and remember, Much of our long-dated enrichment backlog that runs through 2040 is for LEU to service these existing investment-grade utilities. The second addressable market is for growing national security needs. A recent U.S. GAO report raised the alarm on the nation's entire domestic nuclear fuel supply chain, in particular the domestic supply chain suitable to meet national security demand. Notably, the report highlighted the government's $37 billion plan to rebuild the unobligated supply chain by 2052.

5:58 As announced last week, we have confirmed that our supply chain is fully unobligated. Centris' proven de-risk technology is additionally the only production-ready option for the national security establishment. In this light, we continue to work with the NNSA on its intent to sole source certain uranium enrichment activities from Stanford and stand ready to support this important mission. And then there is the HALU and advanced reactor market. This market's demand represents an incremental growth opportunity that continues to mature. We have positioned ourselves to capitalize on this potential market if and when it matures to provide ourselves with further optionality.

6:48 This optionality includes our flexibility to use planned HALO capacity for various assays of LEU and LEU Plus if needed. And importantly, we are securing free payments to fund our extension from the HALO offtake agreements we are signing. And yet, durable LEU demand for investment-grade reactor operators is what we primarily focused on. We continue to observe this gap between supply and demand widen, driven by up rates, mock vault facilities coming back online, and potential new builds, both in the U.S. and abroad. This widening disparity is demonstrated by the continually increasing spot in long-term contract LEU pricing curves that continue their upward trajectory.

7:37 Let me now dive into the progress we made against our three objectives. First, turning to our operations. We could not be more excited about last week's event in Oak Ridge, Tennessee to celebrate our first centrifuge's completion, marking the beginning of our ramping of scaled centrifuge manufacturing. This important milestone, achieved well ahead of our year-end target, demonstrates that we have successfully stood up our core manufacturing operations in Oak Ridge, including having qualified our process are tested and proven. The team is now focusing on decreasing the cycle times and increasing throughput rates, reducing inefficiencies, and scaling up our infrastructure alongside our supply chain while hiring and training employees.

8:28 Furthermore, we are very excited about our recent acquisition of Westerman, which should drive growth for both organizations through commercial and operational synergies as well as cost savings while de-risking our build-out. The acquisition represents a significant milestone for Centris. In one strategic move, we have simultaneously de-risked our build-out by securing a key supplier and best-in-class manufacturer of centrifuge casing and other critical components. Captured cost-saving synergies related to Westerman's expansion and tied to our expansion, and de-risk our entire business model in the near and medium term with an established high-quality industrial fabricator manufacturer with revenues in nuclear and non-nuclear industries.

9:21 Second, turning to commercial backlog, we saw material growth in third quarter growing our enrichment backlog to $5.4 billion in contingent LEU and HALE sales commitments. Our announced agreements with X Energy, Radiant, and Antares all included prepayments to support our build-out. Furthermore, our agreement with X Energy includes production of LEU as a feedstock for HALU, helping us push more volume through our facility. And finally, our off-stake agreements with Radiant and Antares further validate and reinforce our first mover advantage in the microreactor market.

10:07 They also demonstrate our ability to produce unobligated enriched uranium that can also support U.S. national security applications, including defense and space missions. And finally, on the third pillar, financial progress, Centris secured an additional $500 million with the potential addition of $2 billion in the future. To this end, Centris ended the quarter with roughly $2.2 billion of unrestricted cash on our balance sheet. Todd will discuss this in more details shortly. Now moving on to guidance. We are reaffirming our 2026 annual guidance for total company revenue of $450 to $500 million, as well as our annual capital spend of $350 to $500 million.

11:01 We are similarly reaffirming our 2026 Annual Guidance for Python Workforce Additions to over 175 new hires, as well as our target of new employees at Oak Ridge to at least 100. With us now having finalized contracts with 100% of the partners within Critical, we were able to complete and begin shipping our first centrifuge. Our acquisition of Westerman represents another important step in further strengthening our supply chain. We have simultaneously completed our first certified for construction package for Python. We will discuss these in more depth at our upcoming investor day this coming December.

11:47 With that, I will turn the call over to Todd and return with some final thoughts and comments. Todd?

11:55 Thank you, Amir, and good morning to everyone on today's call. Ahead of walking through our results, I want to first quickly discuss the impact of our recent capital raise. In the third quarter, we recognized a $46.4 million book gain due to a decrease in the liability associated with the valuation of the warrants from our recent capital raise. This was a non-cash impact. on our books, but led to a $46.4 million positive impact to the quarter's operating income, net income, and earnings per share that is not part of our due course of business. As such, throughout my comments, the operating income, net income, and earnings per share, excluding the $46.4 million gain, will be referred to as normalized.

12:47 as well as those same adjusted figures that account for growth costs. Our normalized results were in line with our internal projections and reflected the typical quarter over quarter shift in contractual mix that can transpire based on customer orders and deliveries. Our strong financial execution continues to support the execution of our multi-billion dollar domestic enrichment expansion. As noted on previous calls, I will be presenting financials on a quarterly and trailing 12-month basis. Total revenue for the third quarter was $55.5 million, a decrease of $19.4 million, or 26% versus the same period last year.

13:35 PTM revenue was $454.5 million, ahead of fiscal 2025 revenue. The LEU segment generated $31.8 million in revenue in the third quarter, a 29% decrease versus the same period last year. True revenue in the quarter increased by $3.4 million due to a 19% increase in volume of sewage sold and a 10% increase in the average price of sewage sold. The technical solution segment revenue was $23.7 million in the third quarter, a $6.4 million or 21% decrease over the same period last year due primarily to a $10.2 million decrease in revenue generated by the Hale operations contract as well as a change related to other contracts.

14:29 Centrist generated a loss of $10.6 million and a gross profit of $105.8 million for the third quarter in TTM, respectively, compared to a gross loss of $4.3 million in Q3 2025. The LEU segment's third quarter cost of sales was $38.7 million, a decrease of $13.9 million, or 26%, over the previous year's period. driven by a decrease in the volume of uranium sold. Sewer costs increased as a result of a 28% increase in the average unit cost of sewage sold and a 19% increase in the volume of sewage sold. Technical solution cost of sales of $27.4 million increased 0.8 million or 3% from Q3 2025.

15:25 primarily attributable to an increase in costs related to customer contracts partially offset by a $1.7 million decrease in costs incurred under the HALO operation contract. Normalized operating costs for the third quarter were $25.1 million compared to a loss of $16.6 million in the same period last year. The company generated normalized net loss of $10.2 million and 9.4 million of adjusted net loss in the third quarter compared to normalized net income of 3.9 million and adjusted net income of 5.2 million respectively in Q3 2025.

16:11 The change in third quarter normalized net loss was primarily attributed to a decrease in income tax benefit of 9 million, an increase in gross loss of 6.3 million and an increase in advanced technology costs of $3 million. This change in normalized net loss was partially offset by an increase of $4 million in investment income. On a fully diluted basis, this equates to third quarter 2026 normalized loss per share of 49 cents and adjusted loss per share of 46 cents respectively. compared to 19 cents and 25 cents respectively in Q3 2025. On a 12-month basis, Centrix generated normalized net income of $34.4 million and adjusted net income of $77.3 million respectively.

17:12 Third quarter adjusted net income excludes $2.4 million of growth expenses and a $1.3 million benefit to our SG&A related to our stock compensation, which combined and tax adjusted equates to $800,000. Please refer to our financial results section of our earnings release issued yesterday for reconciliation of net income, normalized net income, and adjusted net income. Going forward, we continue to expect to have certain level of these type of growth expenses to flow through our income statement as we continue to build out. Central's backlog across both segments grew to $7 billion.

17:57 at the end of the third quarter and extends out to 2040. The growth was driven by an approximate $2.4 billion in LEU and HALU enrichment sales in the LEU segment. Of the approximate $5.4 billion in contingent LEU and HALU sales commitments, $5.1 billion are under definitive agreements. Turning to our capital spend, which are CapEx and non-CapEx attributed to cost and investments such as prepayments to suppliers or growth costs. In the third quarter, we had total capital spend of $134 million with $131.6 million coming from CapEx and the remainder coming from non-CapEx growth costs.

18:45 We finished the third quarter with approximately $2.2 billion in unrestricted cash without using our AGM. In September, we completed an approximately $500 million underwritten public offering of Class A common stock and pre-funded warrants, together with accompanying common warrants. This important transaction allowed us to access near-term capital at a premium while setting the company up for significant future capital and for future tranches with progressively higher excess prices only if our share price appreciate and we continue to execute against our milestones. If exercised in full, the wards could provide approximately $2 billion of additional gross proceeds with exercise prices ranging from approximately $227 to $363 per share. We believe this structure reflects investor confidence in the long-term value of Centris while providing additional financial flexibility.

19:51 We continue to feel confident in our existing cash balance, and we believe we are sufficiently funded to meet our near-term capital requirements. Subsequent to quarter end, we acquired Western End for approximately $116 million, funded through a combination of cash on hand and equity, including $95 million in cash and $21 million in equity. We expect the acquisition to lower project costs for centers and drive greater efficiencies across our supply chain. According to our outlook for the remainder of 2026, as Amir noted, we are reaffirming our annual guidance for revenue of $450 million to $500 million and total capital spend of $350 million to $500 million.

20:39 The target excludes the Westerman acquisition. We look forward to having a more fulsome conversation about Wesselman build-out at our upcoming December investor day. We are simultaneously reaffirming our operational guidance for the workforce additions in Pipeton and Oak Ridge. With that, I will turn the call back to Amir. Amir?

21:02 Thank you, Todd. I am proud of the progress we made during the third quarter across our commercial, operational, and financial progress. We have made significant progress in and are continuing to de-risk our build-out. We are now beginning to manufacture and ship centrifuges from our Oak Ridge facility. We have locked in 100% of the suppliers we deem critical and have completed our first CFC package. We have significantly grown our commercial enrichment backlog. We are sitting on a healthy cash balance that empowers our build-out. We have furthermore bolstered and de-risked our business profile, especially in near-term revenues and profitability with our recent Westerman transaction.

21:52 And all of our progress is happening as our addressable market continues to grow, a strong backdrop that supports our expansion. We are also excited to host our upcoming Investor Day on December 7th at our American Centerfuge plant in Pipeton, Ohio. We look forward to sharing more about our strategy and build out at that event. With that, I will turn the call over to the operator for questions. Operator? Thank you. Ladies and gentlemen, we'll now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. As a little reminder, we would like to stick with one question, please.

22:48 If you do have a follow-up, you may recue. Your first question comes from Mark Shooter from William Blair. Please go ahead.

22:59 Hey, good morning, everybody. Amir, I just had a question on the first centrifuge. So the first centrifuge production, that's a big milestone for the company and also in national security. But a key point for us on that front was that these new centrifuges are unobligated. And I was hoping you could give us some update on the engagement with the NNSA and speaking to the funding, the outline from the GAO as well.

23:29 Good morning, Mark. Thank you for that good question. I'll remind the listeners and yourself that one of the great values that we bring to the market and the technology that we bring to the market is the capability to have unobligated production that can serve national security needs. Just as a reminder as well, in formal background, in November of 2025, the NSA published a notice of intent to issue Centris a sole source contract for the production of certain low-enriched uranium that's suitable for use in support of the national security mission. So that is sort of the backdrop to our need and our drive to have unobligated production.

24:15 And as specifically to your question,

24:18 Our production will be unobligated. And we have been working to configure the supply chain, working with all our suppliers to make sure that that is going to be implemented.

24:46 I'll answer the question mark. Thank you, Amir. I thought they cut me off for the next question. Thank you. The next question comes from Mark Bianchi from TD Cowen.

25:01 Please go ahead. Hey, this is . I'm for Mark Bianchi. Thanks for taking my question. The question is really around the current LEU backlog. I know you mentioned excluding the LEU to HALU contract.

25:19 Is that all tied to the existing reactor fleet?

25:22 I ask because I'm trying to understand the opportunity for new light water reactors there and there's 10 new large reactors moving through the DOE EDF loan program. So I'm trying to think how should we think about the timing of potential LEU backlog opportunities for centers there if enrichment RFPs could follow relatively soon for new reactors or utilities likely way closer to a reactor startup. Good morning.

25:54 Let me just talk maybe in general and then we'll address specifically the question about the new build. We very much are excited and are obviously prioritizing firm and form commitments from customers and the ones for LEU are typically the ones that are able to make those in large numbers. So a good size, a large part of our backlog is LEU for operating reactors here in the United States and abroad as well. Specifically to the question of how to think about the new reactors that are yet to be built, it really is a question I would expect that The new builds, whether it's going to be AP1000s or whatever other large reactive design is going to be, there's going to be tremendous need for enrichment supply as well. I would tend to think that in today's markets and some of the availability and some of the long cycles around capacity expansion of enrichment,

27:26 I would absolutely encourage them to put that at the very front of their planning cycle as they plan to expand. and so we absolutely intend to compete for it and we intend to make that a big part of our business as well. Thank you. And your next question comes from Joseph Asha from Dugganheim Securities. Please go ahead. Hey, guys. This is Peyton Duran. I'm for Joe this morning. Thanks for taking the questions. I guess just to add a little bit more color on will enable the accelerated timeline for the first completed centrifuge. And do you see this timeline as sort of replicable for future units? And I guess the third part, what learnings are you going to take from this first one to apply to end of the time? Thank you.

28:16 Okay. Thank you for the question. I think I've been very consistent on all of our calls in trying to explain and We have an incentive to beat the timelines that we have advertised. And so organizationally, we are creating the same incentives and the same expectations. of exceeding, meeting the timeline. But more specifically, what enabled it is we do run process improvement theme and parallel.

29:06 I mean, one example that I gave before, which I'm sure we'll get to talk about at some point from, I'm sure a question will come up about our partnership with Palantir and some of the work we're doing there. So we really are attacking this on multiple fronts. And we're doing a lot of progress with our supply chain. and all of this with the intent of expediting, lowering costs, de-risking. Westerman is another example of de-risking and building efficiencies into our supply chain and I'm sure there will be a question on that as well at some point. So the lessons learned here is that when you align the goals in the organization, provide the tools, expectations and make a proper investment in rapid improvements, It pays off and we certainly intend to implement those learnings.

29:59 And these are coincidentally to your second part of your question. These really are the learnings. And, you know, we certainly are looking forward to providing a more wholesome update, details and examples at our investor day that I've announced earlier. And hopefully that answers the question. Thank you. and your next question comes from Nate Pendleton from Texas Capital. Please go ahead.

30:28 Good morning and congrats on the continued progress. Amir, I wanted to go back to the strong macro picture that you alluded to in your prepared remarks. With the strong SWU pricing relative to uranium, as we look ahead, how are customers changing tails this day, if at all, and how much Western SWU demand could be met with overfeeding as we look out in the future?

30:55 Great question. Good morning. So, you're asking an enrichment person about a question that involves a lot more consideration than just enrichment. Obviously, uranium pricing fits into this very strongly. Each customer and supplier approach this question individually on a contract by contract basis. In the past, Obviously, when school prices were cheap, this goes back a few years ago, we've seen the different behavior around LDAP, we've seen a different behavior around underfeeding versus overfeeding.

31:40 Obviously, that dynamic has changed now that school prices have gone up considerably. And I would expect that this and many more. Thank you. sort of erring on the side of favoring enrichment capacity is just because I don't see that there is that much ability to expand capacity as quickly as the market grows.

32:36 I mean, we're seeing that disparity now, and I think it will take a while before that disparity sort of settles. So I think you will see that reflected in the tails and in the overfeeding versus underfeeding. I hope that answers the question. Thank you. And your next question comes from Bill Peterson from J.P. Morgan. Please go ahead.

33:03 Yeah, hi, good morning. Nice job on the quarterly execution. Thanks for taking the question. I wanted to ask a follow-up on a prior question on the backlog. I guess we think about a commercial strategy. Is there a preferred mix of, I guess, existing utilities, say, LEU versus newer companies, SMR, and I guess, you know, with the shape of the backlog, you talked about backlog going up to 2040. Is that more front-loaded or back-loaded? I'm just trying to get a sense of what that could mean for implication on CapEx as you, I guess, continue to grow your backlog.

33:34 Yeah, good morning, Bill. Thank you for that question. I'll start off by just saying that it would be we typically do not break down and separate the amounts. That said, the vast majority of our backlog is LEU. It's either for LEU customers or as feedstock for future HALU off-stake. Now you asked a pretty interesting question as to who do we favor and who do we like more. That would be a dangerous answer to give. I'll give you the pros and cons and obviously we want both and we pursue both. The established LEU customers provide a lot of certainty. They provide a lot of volume. They've Thank you very much.

34:43 A lot more committed to the supply chain, and we're seeing them being able to make sort of take-or-pay type contracts and legally binding contracts. They provide a huge promise to a company like ours. If there is a large expansion of any of these SMRs or micro-reactors, if there is a large build-out, that's going to create a substantial need for HALU and an exponential need for LEU. and so we honestly are trying to keep our finger on both triggers and I will just remind the investors and listeners as well that the third leg of the stool here is we are pressing really hard on national security.

35:28 We position ourselves to be able to serve the needs when called upon for national security and I hope that that gives you enough Thank you. And your next question comes from Nick Amacuzzi from Evercore ISI. Please go ahead.

35:53 Hey, Amir. Well, you opened the door, so I'll allow you to either walk through it or close it on me. Just wanted to kind of dig into the $300 million of Palantir potential savings and basically how much it represents Validated Procurement or Engineering changes versus the opportunities that are still under evaluation. And should we think of any of those as an accelerant to capacity delivery?

36:24 Yeah. Good question, Nick. As previously communicated, a day one focus for us is to really maximize cost savings while we really are bringing in lead times and deployment times for our expansion. We want to use state-of-the-art technology, tools, capability, individuals, and enhance the reason for the partnership. We did announce amount of savings that we put out there, and you quoted it, $300 million. A lot of it has been a strong contributor to our capability to deliver ahead of schedule. From where I sit, and I am fairly connected to the project, I I think that most of the opportunities and most of the potential savings and value we're going to derive is still ahead of us, so much so that we are in an active mode of learning as to what we achieved and how we potentially accelerate and expand that.

37:26 So stay tuned for more announcements. Stay tuned for more information. And as one of the answers that I gave earlier, We do intend to have a much more wholesome conversation on this in our investor day. This really is the purpose for such conversations. We'd love to address it there when we're preparing to do that. And I will also add as a last statement that the first centrifuge is really a great example of the value creation-based agreement and partnership that we have with companies like Bounteer. And I think The very first milestone that we set out there, we've been able to capitalize on it and we're looking to do that eventually for all the other milestones that we're facing.

38:16 Thank you. And your next question comes from John Windham from UBS. Please go ahead. Hey, thanks for taking my question. This is David on for John Windham. Just wanted to touch base on Can you give us an indication or kind of a status update on where you are in negotiations with the DOE and the potential to convert your demonstration cascade to commercial offtake and the potential to bring some of those volumes online a little bit quicker to market? Thank you.

38:54 Yeah, so we are in discussions. Again, as I typically answer my questions, I'll give a little bit of backdrop and sort of the context for the answer just for the benefit of all the other listeners. We embarked on a demonstration program with the DOE that has been a great supporter. We worked collaboratively really well to demonstrate our technology now for three years. It's been hugely successful and it provided The natural next step for the 16 centrifuge demo cascade is to place that into commercial operations that the cascade is producing. We are in discussions with the Department of Energy about how to amend and how to make a more wholesome agreement where where this continues to serve the market and some of the reactors that are getting into the market now and would require some of that material.

40:07 Yeah, to Amir's point, the centrifuge is currently spinning for commercial use and as part of the larger agreement, it's our ambitions and the DOE's ambition to keep those centrifuges spinning throughout their life cycle, and we're currently working that in through our long-term arrangement with the DOE. They have given us rights to use those centrifuges for commercial use currently, and that's what they're doing. So currently we are enriching Halo for commercial needs at this moment. Thank you. and your next question comes from Eric Stein from Craig Hallam.

40:56 Please go ahead. Hey, good morning. This is Luke on for Eric. Thanks for taking our questions. So as it relates to your supply chain strategy, should we expect to see vulnerable areas addressed through vertical integration like with Westerman or was that more of a sort of a one-off event from a strategic perspective? Thanks.

41:19 I think your question specifically asks of us vulnerable. I would say that the Westerman deal was a whole lot about an opportunity to de-risk our supply chain, to de-risk the build-out, and to de-risk the business model, as well as to be able to capitalize on a lot of efficiency that we see out there. So all in all, we're very satisfied with it, but I mean, there's other tools in our arsenal over there that we're deploying in setting up a supply chain that is predictable, capable, and produces high-quality product. I mean, these things are done every day by our team, are not necessarily advertised, they're not necessarily out there communicated to the broader community, but, I mean, this is the kind of stuff that we do every day that goes unadvertised use the word vulnerability.

42:21 This is going to be a major project. We have a lot of suppliers. Each supplier has their own strengths and weaknesses. We are building and we build resilience in our supply chain where possible. We're using quality oversight. We're using partnership with different suppliers. So we're not taking anything off the table. I think what you saw with Westerman is an example where you had really a perfect fit all these factors come together and it was no coincidence that this deal was made.

42:53 Yeah, I will just comment. We view Westerman as a world-class operation especially in the nuclear space and they reach over into other industries. This allows diversity to centrist income stream and revenue. It's immediately accretive in year one and it really serves as a platform for us to expand on supply chain integration, take out some of those vulnerabilities if we see they present themselves through either organic growth now through Westman or through additional M&A activities. We are extremely excited about this. I will just comment that On our investor day, we plan on providing a significant more information around the acquisition, and we hope that all of those on the call today are able to dial in or join us and where we can provide a long-term view of our vision for Westerman and our supply chain. Thank you.

44:10 Thank you. and your next question comes from Rob Brown from Lake Street Capital. Please go ahead. Good morning. Just wanted to kind of follow up on the centrifuge manufacturing ramp with the first one now done. How do you, I know you can't give exact numbers, but how do you sort of see that ramp happening? Is it over the next year? Is it sort of very quickly or just a sense of how that develops? Thank you.

44:38 Yeah. Good morning, Rob. Could you, just to make sure I answer your question and understand it, when you say the ramp, you're talking about the cadence of the centrifuges as offline, or what specifically were you thinking of? Yeah, I think you mentioned focusing on ramping up the level of production of centrifuges, just for the color and how that happens.

45:04 Just as a general backdrop again, when we announced the first centrifuge, obviously the big announcement there is not in the centrifuge itself, but the announcement is that now we have a functioning operating production line that produces centrifuges, and we really are celebrating the first off to come off this line. So there is a certain cadence, rhythm that we are currently engaged in and we're producing. At this point, we... Probably going to reserve a lot of that detail for our investor day where we have a lot more wholesome conversation on this and presentation. But do expect to see more information announcement come out on that. The point is that we have an operating manufacturing line that is in current production.

45:57 Thank you. And your next question comes from Lawson Winder from Bank of America Securities. Please go ahead. Thank you very much, Operator, and good morning, Amir and Todd. I appreciate today's update, and I look forward to the Investor Day very much. The thing I'd like to kind of better understand is commercial HALU. So you've disclosed that the existing 16 cascades are now enriching HALU for the commercial market. Can you just confirm whether that's against – TheOplo, X Energy, Radiant, or in Terry's contracts, or is there another customer? And then when we think about revenue and economics from that, when do you expect first commercial HALU revenue to start showing up?

46:48 in the P&L. And then how should we think about the margins versus the DOE HALU contract? I mean, are these going to be similar margins or could, you know, commercial HALU possibly have significant superior economics? Thank you.

47:05 Yeah, so a lot of questions there and thank you for that, Lawson. Let me try to jot them down. I'll try to answer all of them. Your first question around the commercial HALU and who specifically it goes to, the answer that I'll have for you is it will be supplied to the commercial market that requires HALU. I mean, everybody read our announcements. There's no more detail further to that, but we're absolutely looking forward to supporting the startup of the commercial market of HALU. I mean, it's These new reactors are becoming real. They require fuel. And we are the first ones out there that are going to be fueling them. And having the only HALU cascade in the Western world that's able to supply them right now gives us a huge advantage, and we're looking forward to providing that support.

48:04 Now, to your – I think the next question you had was – comparing contracting margins on these contracts versus the DOE. Todd, I'll give you the word on that.

48:16 Yeah. Look, there's two different types of contracts that are present. The DOE, obviously, with the demo project that allowed us to prove our capability while providing and a number of other people. The overall price variant can have some variability, but we are obviously confident in their ability in the HALU market to provide significant upside to the company and optionality.

49:20 So we're rooting for all of the SMRs and advanced reactors, and as Amir said, we're extremely excited to be the and, you know, the only one enriching commercially HALU fuel right now and are standby to meet all of our customer needs. Thank you. And your next question comes from Joseph Rieger from Ross Coupland Partners. Please go ahead. Hey, Amir and team. Thanks for taking the questions. For me, on the Westerman acquisition, can you give us any additional color on what the margins look like there at the gross margin level and what, if any, seasonality there is to their business?

50:10 Yeah, thanks. Yeah, we are really excited, as I said, about the Westerman. I think I will... Put a pause on one of your comments, but we believe there's significant upside to the centrist revenue stream. This industry has very strong margins in the supply chain. It does two things. One is, as one of our larger suppliers, it allows us to de-risk our supply chain and have cost savings while diversifying our revenue base. Westerman also is involved in other high growth industries and also oil and gas. The margins vary in each one of those segments.

50:59 The high growth segment is obviously in high demand and the margins are a little bit higher. Nuclear has strong margin profile. And the last is the oil and gas, you know, has been a mainstream for the Westerman sector. throughout their operations. And we will provide more information on our investment day, including breakdowns of their margin profile in each segment and their contribution of revenue to Centris in the current year and over the next few years.

51:41 I think that helps. Joe, I want to add a couple of other things here. I made a comment to this earlier that this was really no coincidence. This was not one of those things, hey, we want to buy somebody, let's look at a list of 100 people. No, this was not the case. Westerman, folks in our industry know that Westerman is one of the strong fabrication pillars that have a nuclear power. Great fabrication capability. They're high-precision fabricators. They're very versatile, as Todd mentioned. This is a great fit, and not only are we looking at, as I said, a lot of the de-risking of the supply chain build-out and the business model that we've communicated, but we'll also have a very strong eye to the future potential and what other things could be done to support our build-out in the business as a whole.

52:40 So as Todd said, I'll echo again, we're very excited about the things that are yet to come, and hopefully we'll have a much broader conversation December 7th. Thank you. And your next question comes from Jeff Brant from Northland Capital Market. Please go ahead.

53:01 Morning. I have a question on the capital deployed kind of cadence here. Hoping to get any additional clarity you guys can provide in terms of kind of Q4 spending. Obviously, it could be a wide range of outcomes and still fit the full year guide. So, you know, just kind of wondering how we should think about spending into Q4 and any early thoughts on spending trajectory into 27. Thanks. Thanks for the question, Justin. Good morning.

53:31 So we have maintained our capital spend guidance. So obviously, you can kind of back into our fourth quarter spend. What I will say is we are now crossing the threshold into deploying capital at a more accelerated rate. We have started our first construction package. As you can see, we have our first centrifuge rolling off the line. We have secured our supply chain and have orders on for all of our materials currently placed. And we're moving forward with our build out. All of these numbers are ex-Westerman. I just want to make that point. So, you know, often GAAP and other areas, you know, an acquisition will be considered, you know, CapEx and gross CapEx.

54:25 to maintain, you know, status quo and quarter over quarter continuity. We've excluded Westerman from that. Now, to be said, we will look to provide more guidance in our investment day on December 7th. As for 2027, you know, what I said earlier this year and on previous calls, we're going to get to a point where we start to see some real cadence of capital deployed. and we're now in that ramp up. You know, we only started our floor contract mid-year as we signed the contract and so now as that's beginning to come to fruition and we have boots on the ground, our spend increases in addition to the manufacturing side.

55:15 So stay tuned. We'll provide more guidance as for 2027. Obviously, we will be looking to give a more wholesome number in future discussions. Thank you. And your next question comes from Jai from Stifel. Please go ahead.

55:36 Hey, good morning, everybody. Thanks for the question. As we head into the next Congress, do you guys see any change in the outlook for federal support for domestic enrichment, or is that support largely insulated from the political cycle? Thanks.

55:53 Yeah, good apropos that question. I will tell you with firm belief that this ought to not change the momentum of of our industry. This ought not to change the momentum of the investment, the interest, and the focus and the support that the U.S. government provides to the fuel cycle and specifically to enrichment. And the reason why I'm saying this is we have now been through the cycle of two administrations at least during my time, and I have not seen a change in support, focus, or dedication. I've seen it increase. I mean, some of the conversations around clean energy needing to increase, I mean, all of these things don't go away. They're still there.

56:44 The conversations around the re-industrialization, providing jobs, it becomes even more important now. So the answer to your question is I absolutely don't see any change. I see a necessity for even stronger support and focus, and we're looking forward to working with the new Congress on this as well. Thank you. And your next question comes from Sean Milligan from YouTube and Company. Please go ahead.

57:13 Hi. This is Drew Scott. I'm for Sean. Thanks for taking the question. With the first set of fees ahead of schedule and backlog growth tracking well, are you seeing HALO demand point forward ahead of expectations at all, or are you even enough to say you consider point forward capacity even further?

57:28 I'm sorry. I did not hear the last part of the question. Could you please repeat the question again?

57:37 Yeah, so are you seeing Haley demand pulling forward kind of ahead of your expectations? And would that even make you pull capacity forward as kind of what you originally planned?

57:51 Yeah, thank you for that. I am not seeing as much of pulling of demand ahead by the reactor developers. What we are seeing, and I mentioned it earlier, is we're seeing a lot stronger commitment and a lot more aggressive focus on actually locking in agreement and de-risking the fuel supply part of the equation when it comes to their build-out. So, no, there is really no changes in terms of the cadence that we're planning in terms of rolling out our capacity. We obviously, as I'll repeat it again, are looking for every opportunity that we have shortening lead times and creating efficiencies, and we will execute on that.

58:40 But from the customer side, we're not seeing that yet. Thank you. And your next question comes from Samir Ajoghi from HC Wainwright. Please go ahead.

58:57 Hey, good morning, guys. Thanks for taking my questions. My quick question is on the 4Q outlook. Basically, if you look at the annual outlook, it looks like for Q will be 142 to 192 million revenues. Like are there any takes and puts on this? And then part two of that question is the SWOO pricing versus SWOO cost management. How are you looking at it? Should we expect another sort of negative gross margin quarter this quarter?

59:32 Thank you for your question and good morning.

59:36 yes as you effectively maintained our guidance um we are optimistic and we feel obviously that the fourth quarter um provides a full year a view of our strong results as we've always noted that we see significant seasonality um including when we actually have sales that come um that are being delivered but also receive our shipments That quarter-over-quarter mix provides some sexuality in our gross margin profile. That's why we've been discussing this on the TTM basis to provide a more normalized view. You know, the negative gross margin and everything, there's a lot of timing around when we receive product and mismatch of when we deliver product.

1:00:28 So as such, we are very confident in our full year view. That's why we have maintained our guidance. We believe that the revenue and guidance that we have provided is also at any Western and upside. So I just want to make that note. And we will be providing updated guidance on our December 7th investor day. Thank you. And your last question comes from Ryan Finks from B. Riley Securities. Please go ahead. Hey, guys. Thanks for taking the question. Maybe just a quick one on the backlog increase here. Was that fully from the three recently announced Advanced Reactor customers, or were there other undisclosed customers in there?

1:01:24 Yeah, that's not something that we disclosed, but I can say that this was a mix of both LEU and HALU. Fortunately, I can't give the details. We don't provide the breakdown and separate the amounts. The vast majority of the backlog is LEU, either for LEU customers or as feedstock for our future HALU offtakers. I hope that answers the question, Ryan. Thank you. At this time, we have no further questions. I would like to turn the call back over to Mr. Neal Nagarajan, Senior Vice President. Please go ahead.

1:02:03 Thank you, Operator, and thank you to everybody who listened on today's call. We're very excited about our upcoming Investor Day on December 7th at Tyson, Ohio, and we look forward to providing the market with more details at that time.

1:02:18 Thank you. Ladies and gentlemen this does conclude your conference call for today. We thank you very much for your participation and you may now disconnect. Have a great day everyone.