Terrestrial Energy Inc.

Greetings and welcome to the Terrestrial Energy's second quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Tyler Gronbach, VP Investor Relations and Public Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Terrestrial Energy's second quarter 2026 earnings conference call. I'm Tyler Gronbach, Vice President of Investor Relations and Public Relations. Joining me today are Simon Irish, Chief Executive Officer, and Brian Thrasher, Chief Financial Officer. will begin with a review of our strategic and operational progress during the quarter, and Brian will follow with a discussion of our financial results. We will then open the call for questions. Before we begin, I'd like to remind you that we have posted the quarterly results press release and summary slides to the investor relations section of our website at terrestrialenergy.com. I'd also like to remind you that today's discussion will include forward-looking statements about our business operations and financial outlook. These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. We encourage you to review the risk factors described in our SEC filings for a more complete discussion of those risks. With that, I'll turn the call over to Simon.

Thank you, Tyler, and good morning, everyone. When we last spoke in May, I reported progress against the three-pillar framework of business plan execution that we set out in March guidance. Today, I will do the same for the second quarter and then spend the greater part of my time on our business model and our recent update to unit economics. Brian then will follow with our financial results. Over the past several months, we've been in front of investors more than to any point in the company's history, and that was deliberate. The nuclear tech sector is in a period of secular development. It is still a young and expanding sector for portfolio allocation as the market recognizes the structural long-term bull case for SMRs and nuclear energy supply. In this context, We're hearing a strong desire to understand the factors that differentiate nuclear plant designs, nuclear technology, regulatory and supply chain strategies, and business models. We understand the importance of this to investors' analysis for nuclear tech stocks. And during this call, we'll be discussing some of the unique factors that strongly position terrestrial energy. I will summarize the five nuclear plant design factors differentiate the IMSR plant, talk further on our business model, and then our differentiated fuel supply strategy. All this differentiation is in pursuit of one aim, the mission set by the company at its founding in 2013, to use nuclear innovation to solve the only problem worth solving with private capital, the affordability and capital efficiency of nuclear plants. and by extension, the cost of nuclear power and solve that problem quickly and at scale. We are differentiated as everything we do, every decision we have made points back to that founding problem statement in a clear and logically compelling way. This goal is the first point of differentiation. First, let me now talk through second quarter progress across the three pillars of business plan execution, referring to slides four and five of this quarter's investor update. And I will start with our engineering and regulation programs. Project Tetra and Project Tesla are test reactor and fuel line pilot projects, both in partnership with DOE, advanced in the quarter. will support the data collection required for the NRC operating license application for the IMSR plant. Project TEFLA will develop the fuel production processes for IMSR fuel salt commercial supply. On the regulatory side, on May 12, the NRC issued its safety evaluation report, approving our top of the report on postulated initiation events methodology. This follows the previously issued safety evaluation report on IMSR principal design criteria and early development and a point of differentiation. As I described during our first quarter earnings call, these approved NRC analyses form foundational elements of the IMSR plant's licensing basis and can be referenced in future applications without re-evaluation. Our graphite irradiation testing continued at NRG Patton, one of the world's most powerful test reactors. This work is essential for terrestrial energy's reactor materials qualification, licensing readiness, as well as supplier down selection. Over the quarter, we adjusted our NRG testing program, adding further irradiation cycles, which is also evidence in quarter-on-quarter variances with RMD Expenditures. Turning to the second pillar, supply chain developments. Procurement of fuel components and services continues for both the Tetra and Tefla projects. This quarter, we announced an engineering service agreement with Zachary Nuclear, which supports the development of projects at the Texas A&M Reli site, and importantly, the site characterization and data collection work to assemble an NRC construction permit application for the planned commercial IMSR plant on that site. Turning to the third pillar, our commercial pipeline of IMSR plant projects. In June, we signed a ground lease and research agreements with Texas A&M for exclusive use of a 77-acre site at the RELLIS campus. This development provides the path to complete site capitalization work and environmental evaluations for the IMSR plant and other facilities on the Texas A&M site in advance of construction. In May, we announced the relationship with Riot Platforms to supply electric power for data center operation. The party's intention is to develop a best-in-class pairing of a small and modular reactor plant with a large data center. taking advantage of the competitive operating characteristics of the IMSR plant, notably its capacity to use natural gas as a bridge fuel, initially to deliver fast commercial operation and power supply, and then longer term as a backup after nuclear systems are in operation. This arrangement would take advantage of a differentiating feature of the IMSR plant design. namely the ability for its non-nuclear thermal and electric facility to be customized. This is not possible with the balance of plant systems tied to light water reactors. Our next step with RIOT will be to down select to a first site as part of the program targeting four gigawatts of IMSR plant generation in support of RIOT data center operations. With the right platform development, the indicative generating capacity of our pipeline of commercial projects grows to 7.8 gigawatts. Given these and other characteristics of the IMSR plant design, our commercial opportunities cover three large market verticals, data centers, industrial process heat, and the replacement of retiring coal plant capacity. I would like now to turn to our updates on unit economics and start with a brief recap of our business model, referring to slide six of this quarter's investor update. Bristol Energy does not plan to build, own, or operate IMSR plants. We will leave these activities to others with long-established and recognized industry capabilities in construction and operations. In this respect, our business model is relatively conventional for a React developer. From this position, we can operate a capital-like business model, allocating capital efficiently to build high-margin businesses where we have a competitive and defendable advantage and typically based on proprietary IP concentration and production capabilities. With additional engineering work over the last 12 months and directed at projects such as Tetler, We have updated and re-estimated our IMSR plant unit economics and by extension our serviceable addressable market. Our business is to manufacture and supply to operating plants IMSR core units, a major reacting component and designed to be replaced every seven years over the plant's 56 year design life. This implies the supply of 16 IMSR core units are all accumulative revenues of approximately $1.6 billion. The IMSR core unit contains the foundational IP of our company, an innovation that unleashes the extraordinary industrial potential of molten salt reactor technology. Our IMSR fuel salt supply business will capture proprietary expertise enabled now by TEFLA and other innovations. both qualify as principal businesses because each combines concentrated proprietary IP with proprietary production capabilities. On slide six, you will note that estimated cumulative lifetime revenues per unit are now 2.7 billion up from 2.1 billion with a blended gross profit margin of 33% up from 22% in our prior model. of those revenues, 79% occur following the construction of the plant and will be secured through long-dated supply contracts for the periodic replacement of the core units and regular fuel salt supply. The dominant activity at 58% of total revenues is core unit supply with fuel salt supply being 21%. These businesses will drive most of the value creation in our future business. Our review of unit economics included a re-estimation of gross profit margins for the core unit and fuel supply businesses to 33% and 40% respectively, higher than the margins for pre-construction and construction services, and this further points to the dominance of these two principal businesses. We expect announced developments in the coming quarters as we move forward with our programs to build these two important supply businesses with their production facilities. Referring to slide seven. The updated unit revenue estimates have increased our service of addressable market to 2.3 trillion by 2050, up from 1.9 trillion, a $400 billion increase. This reflects the market that our plant design and supply businesses are built to serve at scale. I want to spend a few moments on our fuel strategy and development of IMSR fuel salt supply. As in our view, this is one of the most differentiated and underappreciated parts of the IMSR plant story. Referring to slide eight, conventional nuclear fuel production can be represented as a three-step process. First, the production of the isotopic form of the fuel, whether LEU, HALU, or even plutonium. Second, the production of the chemical form of the fuel, whether oxide, fluoride, or metallic forms. And third, the production of the physical form of the fuel, whether complex fuel in reactor assemblies or complex triso fuel elements. Each of these three steps requires a physical and discrete plant. It has to be built, licensed, and operated. For many novel fuel forms today, this requires the construction and operation of three new plants, one for each step. In contrast to virtually all other SMRs in the nuclear tech sector today, whether those using generation three or four technologies IMSR fuel salt production stops at step two. This is an important point of differentiation. As the IMSR is a molten salt reactor, a liquid-fueled reactor, rather than a solid-fueled reactor, its fuel does not have a physical form factor, so no step three. The reactive fuel feed to IMSR plants is in the form of powdered output from the chemical production process. from step two, which in our case involves the fluorinated form of uranium and the addition of fluoride carrier salts under a tightly confined production process to create the IMSR fuel salt, a powder. This approach therefore avoids the very considerable risk, cost, and complexity of step three, and further points to a strong, scalable and relatively capital light, inexpensive fuel supply chain to support IMSR plant operation at feed scale. I would like to draw attention again to the first step, the isotopic step, where we chose many years ago to use the long established isotopic standard for civilian reactor fuel, LEU, enriched to less than 5%. This avoids the costs, uncertainties, and complexity of HALU chosen by other Generation 4 reactor developers and the more complex and costly regulatory requirements that cascade sequentially into steps two and three of the fuel production process. While we rely on the industry's common isotopic form for our fuel, we've been working with Westinghouse on supply of the required chemical form enriched uranium tetrafluoride. With this arrangement, Terrestrial Energy has one plant to build, a plant to complete step two. With the production process now catalyzed by TEFLA, our fuel pilot project in partnership with the DOE and supported by Westinghouse Supply. We are heavily differentiated with this fuel supply strategy. In addition to our fuel Supply Differentiator, unmatched in the nuclear tech sector of advanced reactors. We have five foundational nuclear plant and reactor technology differentiators, referring now to slide 10. First, our plant is small and right-sized at 390 megawatt electric with a market opportunity for financeable and near and co-located power generation. The IMSR plant is one sixth the size of conventional nuclear plant. Next, the IMSR plant's nuclear systems operate with a high energy density, enabling the design to capture the benefits of modular construction that are not possible with other generation four reactor technologies. This facilitates the powerful efficiencies of factory production of modular components for swift onsite assembly. However, our differentiation does not stop here. Referring now to slide 11, the heart of our plant is a nuclear technology that offers a triple operating advantage, critical for economic performance and capital efficiency that we seek to deliver. Our plant supplies thermal energy at a best-in-class temperature of 585 degrees Celsius. Its nuclear systems operate at low pressure, and with a high level of inherent safety that can only be delivered using molten salt reactor technology. These are powerful economic virtues that must not be ignored. This triple operating advantage differentiates our reactor technology and nuclear tech sector. Together these five factors are what allow us to achieve our mission and bring to the market the most capital efficient plant in the SMR sector. and with our fuel supply strategy to do it quickly and at scale, as shown on slide 12. To close, in March, we set guidance for the year and across the three pillars of business plan execution. We're pleased with our progress this quarter against that benchmark. We have observed high sector and factor volatility in equity markets over recent months. However, our experiences are that the structural bull market for nuclear power with SMR innovations is solid, secular, and is growing. Against this demand, we'll be deploying the most capital efficient plant in the SMR sector today. We recognize that the road ahead is one of program execution and traveled through the development of competitive skills and capabilities. Referring now to slide 14. During the quarter, we continue to expand our organization. On the 29th of July, we announced the addition of Pam Cohen as Executive Vice President of Engineering. Pam joined us with more than 35 years experience in the commercial nuclear sector, including senior leadership positions at Westinghouse and Holtec. Concurrently, Cathy McCarthy joined our Board of Directors. Cathy has a career in major projects in nuclear technology development at Idaho National Lab, Oak Ridge National Lab, and other world-leading national labs. Most recently, she was associate lab director of fusion and fission energy at Oak Ridge. And currently, she is responsible for the overall management of the United States participation in ITER. the 27-nation international and benchmark fusion reactor project in France. We're pleased to be reporting this progress over the quarter and to be providing these updates. With that, I will turn the call over to Brian Thrasher, our Chief Financial Officer, to review our financial results.