NuScale Power Corporation Class A

Good afternoon and welcome to NuScale third quarter 2024 earnings results conference call. Today's call is being recorded. All participants are in a listen-only mode. After the management remarks, there will be a question and answer session, and to ask a question at that time is star one on your telephone keypad. A replay of today's conference call will be available and accessible on NuScale's website at ir.nuscalepower.com. The web replay will be available for 30 days following the earnings call. At this time, for opening remarks, I would like to turn the call over to Scott Kozak, Director of Investor Relations. Please go ahead, Mr. Kozak.

Thank you, operator. Welcome to NuScale's third quarter 2024 earnings results conference call. With us today are John Hopkins, President and Chief Executive Officer, and Ramsey Hamady, Chief Financial Officer. On today's call, NuScale will provide an update on our business and discuss financial results. We will then open the phone lines for questions. This afternoon, we posted a set of supplemental slides on our investor relations website. As reflected in the safe harbor statements on slide two, the information set forth in the presentation 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 subject to a variety of risks and uncertainties. you can find a discussion of our risk factors, which could potentially contribute to such differences in our Form 10-K and subsequent SEC filings. I'll now turn the call over to John Hopkins, NuScale's President and Chief Executive Officer. John?

Thank you, Scott, and good afternoon, everyone. For nearly two decades, energy demand in the United States has remained largely flat. However, in the past year, the growth trajectory has inflected. with power demand forecasting to accelerate aggressively. While this demand outlook is supported by onshoring trends, boosting domestic manufacturing, electrically powered transportation, and heavy industry, the most important driver is data centers. Technology companies are racing to secure massive amounts of uninterrupted energy to operate complex data centers and power increasingly sophisticated artificial intelligence. The demand for carbon-free energy is accelerating. This urgent need is at the heart of what new-scale technology can bring to this market. I'd like to take this time to reinforce our view that powering the technology industry is an integral part of our future. As depicted on slide three, data centers are seeking more computing power, faster and more powerful processing, and enriched artificial intelligence. all requiring far more energy, which they need 24-7 with five nines. That's 99.999% reliability. According to a recent McKinsey analysis, the portion of domestic power output consumed by U.S. data centers is expected to increase from 3 to 4% in 2023 to 11 to 12% in 2030. In other words, U.S. data center power consumption will rise from 25 gigawatts in 2024 to over 80 gigawatts by 2030, requiring an investment exceeding $500 billion. What's more, hyperscalers have made commitments to customers and shareholders for meeting their accelerating power demands with carbon-free energy. Enter nuclear. and in particular, small-module reactors, or SMRs. An energy source that is compact, clean, and constant. Nuclear is the superior choice. Coal and natural gas power generators have obvious carbon emission challenges, and renewables like wind and solar are still intermittent. While renewables are undoubtedly important in our clean energy future, nuclear, and specifically SMRs, are uniquely positioned to take the lead in powering these massive data centers. The world's major tech companies are discovering the value of nuclear. As seen on slide four, driven by the need for sustainability along with an AI revolution, we have seen numerous recent announcements from tech companies scouring the country for carbon-free electricity and zeroing in on nuclear energy. In March, Amazon acquired Talent Energy's data center campus connected to the Saskatchewan nuclear station. In September, BlackRock, Microsoft, and others announced plans to mobilize up to $100 billion for building data centers and a supporting grid energy infrastructure to power them. Also in September, Constellation Energy announced plans to restart an 835-megawatt reactor at the Three Mile Island nuclear plant and sell 100% of that power it generates to Microsoft. As Google pursues its goal of becoming carbon neutral by 2030, its CEO, Sundar Pichai, said SMRs could be used to generate more than one gigawatt of power for a planned large-scale data center. Similarly, on Oracle's most recent earnings call, Chairman Larry Ellison discussed designing data centers powered by SMRs that require more than one gigawatt of energy. This change is happening now, today, and just as tech companies are choosing nuclear power, they're also seeking small-module reactor technology, a safer, cheaper, and more consistent means of delivering carbon-free electrons. As the only U.S. NRC-approved technology with reactors already in production, NuScale leads the industry in near-term deployability. With our commercialization partner, InterOne Energy, we are moving closer to supply in their InterOne Energy plants as they continue to finalize commercial agreements. I am in dialogue with senior executives from prospective customers almost daily, and I can confirm there is fundamentally more interest in understanding nuclear technologies, regulations, supply chains, and business models than ever before. This is not rhetoric for them. These hyperscalers need this power now in an ever-increasing amount over the long term. And they're responding positively to the IntraOne Energy Plants commercial model that are structured to mitigate a significant number of SMR-related risks, including first-of-a-kind development risk and execution construction risk. Hyperscalers also benefit from NuScale's SMR scalability, availability, reliability, and equally important, near-term deployability. Two additional points on this topic. First, we expect InterOne energy plants with new-scale SMR technology to be competitive with the recent Microsoft Constellation and Google Talent agreements. Second, there are very few restart opportunities in large-scale nuclear with favorable economics similar to Three Mile Island. Hyperscaler companies will have to secure SMR new bills to meet their reliability objectives and sustainability targets. These prospective new-scale power plants are generating significant interest from infrastructure capital as well as large commercial banks. For context, in September, a group of 14 global financial institutions, including Citigroup, Barclays, and Morgan Stanley, announced their support to triple nuclear energy capacity and reach net zero by 2050. While data centers are extremely important, we're seeing increased interest across the board from a variety of potential off-takers, as you can see on slide five. NuScale was the only nuclear company to present at the recent GasTech event in Houston, with 50,000 people in attendance. We continued our dialogue with interested prospects, including senior executives of major oil and gas companies seeking not only power, but also high-pressure, high-temperature steam for hydrogen and ammonia production. These executives understand how attractive our site boundary emergency planning zone is, as well as our capacity to be off-grid, and appreciate that new-scale technology is multiple years ahead of other proposed SMR technologies. Now let's discuss international opportunities. Our technology is widely acknowledged across the globe as important for both climate disruption and energy security. This has led to an advanced interest in East and Southeast Asia, Eastern Europe, the Middle East, and Africa. As outlined on slide six, I'll provide an update on recent developments with the Road Power Project. In the third quarter, S&N and Row Power were authorized to proceed with Phase II front-end engineering design or feed work. Shortly after a third quarter ended, FLOR, the prime for Phase II feed, finalized a sub-agreement with NuScale Feed Phase II, which will include tasks related to the development of Class III plant construction estimates, as well as support to Row Power with its regulatory and stakeholder engagements. Separately, in August, the U.S. Department of State announced that Regnum Technology signed an MOU with the government of Ghana to pursue development of an SMR plant and had chosen NuScale technology to power it. We also plan to open an energy exploration or E2 center at the Ghana Atomic Energy Commission site on the campus of the University of Ghana. This will be our sixth E2 center globally with other facilities operating in universities in Romania, Korea, and the United States. Interest and potential demand for the technological benefits that NuScale SMAs offer have never been higher. Potential customers see and appreciate what sets NuScale apart, including our partnership with InterOne Energy with its proprietary business models that have been positively received by all market counterparties as the vital solution that provides off-takers the ability to meet their strategic risk parameters and financial objectives without the need to capitalize, own, or operate their own plant. Negotiating agreements is a complex process that, by nature, takes time. But we continue to make significant headway and remain confident that we can achieve our near-term sales goals. As conveyed on slide seven, the U.S. must remain at the forefront of the green energy transition. The production of nuclear energy as a baseload power is imperative to maintaining carbon-free reliability in the U.S. electricity grid and is rightly viewed as a national security imperative. U-scale SMR technology has a unique ability to provide the availability and reliability needed to secure our data for national security. Strong leadership in a green economy is good for the environment. It's good for America and our allies. It supports our geopolitical interests by reducing reliance on non-domestic energy sources. In addition, it powers U.S. economic growth and enables global competitiveness. Additional nuclear energy supply will also support on-shoring trends and America's strong growth in domestic manufacturing. Domestic policy initiatives, including the CHIPS and Science Act and the Inflation Reduction Act, cannot be fully realized without access to abundant carbon-free power. Further, given the recent election outcome and the long-held priorities of the incoming administration, we expect development of nuclear energy to further accelerate. NuScale and EntraOne Energy are optimally positioned to support this ongoing transition. As seen on slide eight, NuScale is at the forefront of next-generation nuclear energy producers with regards to design safety and innovation. We have systems, features, and capabilities that are unmatched amongst other competing nuclear technologies, SMR or otherwise. For example, NuScale power modules have the ability to safety shut down and self-cool indefinitely without the need for AC or DC power, operator interaction, or any additional water. This enables what is termed an unlimited coping period, a first for light water reactor technology, and an extraordinary differentiator in relations to safety. In addition, the NRC approved our methodology in determining the emergency planning zone, or EPZ, for new-scale powered energy plants. As opposed to traditional nuclear power plants, which are required to have an EPC of 10 miles in the U.S., we can achieve an epc limited to the site boundary a smaller epz significantly reduces plant operating cost and further enables the siting of new skills technology where it is needed most such as retired coal power plant locations in close enough to manufacturing facilities to provide high temperature high pressure steam for industrial applications further NuScale's SMRs do not require grid power or connection for safety, which is another first for a nuclear power plant. Moving on to slide nine, an important reason why we're the only near-term deployable SMR is that we are the only technology with design certification from the U.S. Nuclear Regulatory Commission, or NRC. Others in the SMR marketplace remain at the early stages of multi-year processes in working towards approval. Our second standard design approval application for a power upgrade to 77 megawatt electric is scheduled to conclude by mid-2025. The design upgrade is based on our same fundamental safety case and features approved by the NRC in 2020. And we believe the 77 megawatt new scale power module supports a wider range of customers. Now let's turn to manufacturing, where we're also leading the pack. Doosan and Earnability continues making progress in producing the first new scale power modules, the only NRC approved SMRs in production. On slide 10, you will see the images from Doosan in support of manufacturing and supply chain readiness activities. This continued work provides advantages to our next project deployment, shortening delivery significantly. When it comes to manufacturing our modules, NuScale's relationships with our long-term supply chain partners, many of which are also strategic investors, are one of the most significant sources of our strength. Doosan and other members of our supply chain have made substantial investments retooling their facilities in preparation for supporting NuScale's commercialization. Our robust supply chain has positioned NuScale as a clear leader in manufacturing readiness in the SMR space and is why we are ready to produce customer orders right now. Before I turn the call over to Ramsey, I want to echo a recent comment from Constellation Energy CEO Joe Dominguez. The most important energy commodity in the world today is a reliable and clean electric megawatt. NuScale has the ability to produce clean, reliable energy, reach end users, and help them achieve their sustainability goals. Whether it's an industrial electrification, process heat, or the rapidly escalating demand of the data economy, NuScale's SMR technology is part of the energy solution for the future. Recently, Idaho National Lab performed a landmark study which validates that a NuScale integrated energy system is both technically viable and economically competitive with a high temperature gas cooled reactor, or Gen 4, for process steam applications. NuScale has the advantage, and that is the only SMR with a design certification with modules in production. We maintain competitive advantages in technology, safety, manufacturing readiness, siting, and regulatory success, and are prepared to produce and deliver. I am looking forward to continuing to update you on our progress in the months ahead. Now, Ramsey will provide our financial update. Ramsey?