Oklo Inc

Good day, everyone, and welcome to today's OKLO Q3 24 Financial Results and Webcast. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing star 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star 2. Today's call is being recorded. I will now like to turn the call over to Sam Doan. Please go ahead.

Thank you, operator. Good day, everyone, and welcome to Oklo's 2024 third quarter company update and earnings call. Joining us today are Jake DeWitt, Oklo's co-founder and chief executive officer, and Craig Velmer, chief financial officer. Oklo's Q3 earnings were announced after market closed today. You can find the shareholder letter and supplemental slides on the investor relations page of our website. The information discussed during the course of our remarks and the subsequent Q&A session includes forward-looking statements, which reflect our current views of existing trends and are not subject to a variety of risks, assumptions, estimates, uncertainties, and other factors that could cause actual results to differ materially from such statements. You are urged to carefully read the forward-looking statements language in our shareholder letter and supplemental slides. You can find a discussion of our risk factors, which could potentially contribute to such differences in our most recent filings with the SEC. Okla assumes no obligation to update these statements, whether as a result of new information, future events or otherwise, except as required by law. I'll now turn the time over to Jake DeWitt, Okla's co-founder and chief executive officer. Jake.

Thanks, Sam. And thank you all for joining us today. We're excited to share our quarterly update and provide some insights into the progress Okla has made over the last quarter. Oklo was born largely out of the view that there is a significant opportunity for advanced nuclear technology. What we observed was an industry that had radically stagnated, and there was a massive need to rethink about how a company could approach taking new nuclear technologies to market. Oklo has started to take advantage of this opportunity and deliver our mission to provide clean, reliable, and affordable energy on a global scale. Jumping up to the next slide on slide four, the last quarter has seen big tech make substantial and comprehensive commitments to nuclear as their technology of choice. to reliably and affordably power their AI ambitions. The deals with existing nuclear facilities between Amazon and Talon and Microsoft and Constellation demonstrate the desire to have access to reliable power. These deals have played an important role in establishing a price for base load, low carbon electricity, but some expected to be at or above $100 per megawatt hour, which supports our discussions with our current and future customers. The small reactor deals announced by Google and Kairos and Amazon and X Energy also demonstrate that big tech is willing to take long-term bets on new nuclear technologies to power their future operations. Oklo signed a similar strategic partnership agreement with Equinix earlier this year for 500 megawatts of power. Equinix also made a $25 million prepayment to the company for power. We believe that the Equinix deal and other small reactor deals serve as a useful roadmap for how Oklo intends to partner with data center customers in the future. Going to slide five. Oklo is differentiated from many of its conventional and advanced nuclear competitors because our business model is to build, own, and operate our powerhouses and provide customers with what they want, reliable, low-carbon electrons. This graphic from the Department of Energy's Advanced Nuclear Liftoff Report demonstrates the challenges of bringing large nuclear projects to market. Large projects with multibillion-dollar price tags require risk and cost-sharing across multiple stakeholders and customers who don't want to necessarily take those risks. Reactor technology companies sell their partially complete reactor designs and require others to complete the design for them, as well as fund and construct those assets. Okla's technology is small and scalable, allowing us to build, own, and operate the plants in a sequence manner that is expected to reduce risk to all stakeholders. This value proposition resonates strongly with current and prospective customers. It's important to note that this graphic doesn't mean that Okla will be doing everything itself. The company is building relationships with key strategic partners across our value chain so that we can bring our product to market. Our deal with Siemens Energy is a good example of what our value chain partnerships can look like. Going to slide six, the nuclear sector continues to receive strong support from all levels of government. This third quarter saw the nuclear fuel sector receive significant funding to construct the infrastructure required to supply high assay low and risk uranium, or HALU, and an increased pledge at COP29 with 31 countries setting targets to triple nuclear energy capacity by 2050. On slide seven, we highlight our strategic approach. Our strategy is centered on three key pillars that we believe position us to change the way nuclear power is delivered to customers. We take a different approach across the business model, the size of the plant, and technology, because we see these are key ways to unlock a huge amount of the potential nuclear has to offer. On the business model front, Our model is designed to make it easy for customers to buy clean power at scale. We couple that with a small reactor size that allows us to achieve greater capital efficiency as a company and to match customer demand incrementally while offering resilient and redundant power solutions to our customers. And that's all coupled with our technology, which leverages centuries of combined experience for technology with economic and operational advantages thanks to the features of liquid sodium coolants. On slide eight, We show what we presented last quarter as we laid our framework for how we plan to keep the market up to date on our progress, largely in six major areas. These span reactor licensing progress, project execution, fuel fabrication and recycling, customer pipeline development, strategic partnerships for corporate and business development, and financial updates. So moving on to slide nine, we'll show where we made significant progress in the third quarter. We continued our NRC engagement for reactor licensing and secured key DOE agreements for project execution at the Idaho National Lab, including environmental compliance permits from the Department of Energy. Our fuel fabrication efforts were bolstered by DOE's approval of the conceptual safety design report for our Aurora fuel fabrication facility. On the customer side, we signed letters of intent with two major data centers for up to 750 megawatts of power. We also signed a letter of intent to acquire Atomic Alchemy for radioisotope production. And financially, we carefully managed cash burn and operating expenses to support sustainable growth. Going to slide 10, regarding our regulatory and permitting progress, we are targeting to submit our combined license application for the Idaho project next year with several follow-on applications within a year's timeframe. To streamline the licensing process, we are front-loading NRC review through extensive pre-application work. aiming for a review timeline of about 24 months once submitted. The ADVANCE Act presents significant cost and time advantages for permitting, and we are actively engaged with the NRC to optimize our timeline and maximize benefits as the Act takes effect. This includes refining our initial application to facilitate maximum carryover from our 15-megawatt to 50-megawatt designs. Importantly, the ADVANCE Act accelerates deployment when multiple assets are co-located at one site, which aligns well with our strategy to support customers at a single site. As mentioned, we anticipate a 24-month review timeline with the NRC to get approval for our first site. During the application review period, we will also advance site preparation and likely initiate some construction activities in parallel. We expect to bring our first reactor online in late 2027. On slide 11, we show the benefits from a regulatory perspective of our integrated build-own-operate business model. We believe that our business model and licensing strategy leverage a streamlined regulatory approach to achieve a combined license. allowing us to secure all necessary approvals to build and operate a commercial plant in one step. Unlike some others in the space and our peers out there who pursue separate construction and operating permits or design certifications and later combined license applications, we go directly to a combined license. This approach aligns with our ownership model, where we build, own, and operate our powerhouses rather than selling partially complete designs or licenses. Additionally, the first combined license becomes a reference license, or our COLA, allowing us to submit subsequent licenses, or S-COLAs, with a focus only on changes from the original. By keeping these differences minimal, we gain significant efficiency, enabling faster licensing for each additional plant. This strategy not only simplifies the process, but accelerates our ability to deploy plants quickly and effectively. And moving to slide 12, we show our regulatory paths and our permitting progress. To recap, a custom combined license, like we're pursuing, offers distinct advantages when your business model is to build, own, and operate the power plant. With this approach, all regulatory reviews, including siting, design, financial, environmental, operational, and security requirements, as well as state and local considerations are expected to be completed in a single 24-month comprehensive application. Once approved, you're fully licensed to build and operate. In contrast, other regulatory pathways and business models require multiple steps and more time to reach operational status. For instance, a design certification only validates aspects of the design itself and still requires additional multi-step, multi-year reviews to achieve an operating license, which includes significant remaining regulatory work that needs to be done to obtain a license. The design certification also limits flexibility, a challenge often cited in reviews of lessons learned from the Vogel experiences. This can lead to needing additional regulatory review in the form of standard design approvals or similar approaches. While a design certification can be useful if customers are willing to take that backend risk, it is entirely optional and serves primarily as a risk management step. It's important to emphasize that there's a significant difference then between obtaining a design certification and securing an operating license. We continue to make significant progress towards receiving a combined license and the advantage of this approach are increasingly being demonstrated by our customer pipeline development. Next, on slide 13, we'll talk about our siting advancement for our Idaho powerhouse deployment. This slide highlights the multi-step regulatory process required for siting approval with the Department of Energy at the Idaho National Laboratory for our plant there. As you can see, DOE permitting involves several distinct stages, including environmental analysis, site preparation, and various agreements for access and services. I'm pleased to report that we made substantial progress this quarter with two key milestones. First, we finalized a memorandum of agreement with the Department of Energy, which grants us access to conduct site investigations. This is essential for carrying out assessments, environmental surveys, and geotechnical studies, paving the way for smooth site preparation. Second, we secured an environmental compliance permit, confirming that there are no significant environmental impacts, allowing us to move forward with the characterization phase. These achievements mark critical steps in our journey toward full siting approval and bring us closer to construction readiness for Oklahoma's first powerhouse at INL. And moving to slide 14, I'm also excited to share that the Department of Energy has approved Oklo's conceptual safety design report for the Aurora fuel fabrication facility. This approval is a key regulatory step in deploying our fuel fabrication facility and advancing our goal to use recovered nuclear material to fuel the first commercial Aurora powerhouse. With this milestone, we're one step closer to realizing our fuel fabrication capabilities. With that, I will pass it to Craig to share customer development updates.