NuScale Power Corporation Class A

Good afternoon, and welcome to NuScale's third quarter 2025 earning results conference call. Today's call is being recorded. A replay of today's conference call will be available and accessible on NuScale's investor relations website. 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 Rodney McMahon, Senior Director of Investor Relations. Please go ahead.

Thank you, operator. Welcome to NuScale's third quarter 2025 earnings results conference call. With us today are John Hopkins, President and Chief Executive, and Ramzi Hamidi, Chief Financial Officer. On today's call, we will provide an update on our business and discuss our quarterly 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 this presentation and discussed during the course of our remarks in 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 contribute to differences in our expectations in our annual report on Form 10-K for the year ended December 31st, 2024, and our quarterly reports on Form 10-Q and our subsequent SEC filings. I'll now turn the call over to John Hopkins, NuScale's president and chief executive officer.

Thank you, Rodney, and good afternoon, everyone. NuScale continues to be ahead of the competition as we remain the first and only small-module reactor technology provider to obtain design approval from the U.S. Nuclear Regulatory Commission, or NRC, making our technology ready for commercial deployment. The pipeline of potential off-takers for power generated by NuScale's technology is stronger than ever, and we believe we are nearing the realization of a commitment to deliver NuScale power modules at scale. Now, turning to slide three, we list NuScale's third quarter highlights, which we'll discuss in more detail in a moment. They include the recent Tennessee Valley Authority, or TVA, and InfraOne energy announcement on the deployment of up to six gigawatts OF NEW NUCLEAR CAPACITY USING NEW SCALE TECHNOLOGY, TO CONTINUE WORK ON FLORIDA'S PHASE TWO FRONT END ENGINEERING DESIGN, OR PHE TWO STUDY FOR THE RODE POWERED DORCHESTE POWER PLANT, AND THE CRITICAL STRENGTHENING OF OUR CASH POSITION AS WE ENTER THIS VITAL STAGE OF COMMERCIALIZATION. WE ARE EXCITED ABOUT THE SIGNIFICANT MOMENTUM WE HAVE CONTINUED TO BUILD THIS QUARTER. TURNING TO SLIDE FOUR, IN SEPTEMBER Our global strategic partner, InterOne, announced the landmark agreement with TVA to deploy new nuclear generation capacity powered by NuScale's SMR technology. This project marks the largest SMR deployment program in the U.S. history. It contemplates capacity of six gigawatts, which represents a total deployment of approximately 72 NuScale power modules and up to six InterOne energy plants in the TVA territory, which covers all of Tennessee, portions of Alabama, Mississippi, Kentucky, Georgia, North Carolina, and Virginia. To put it in perspective, that is enough electricity to power the equivalent of the entire Dallas-Fort Worth metropolitan area. NuScale is excited to support the development of nuclear generation capacity in the U.S. in partnership with InterOne and TVA. Additionally, just last week, the White House announced it will mobilize up to $550 billion in public and private sector investment to expand critical energy infrastructure and strengthen supply chains under the newly signed U.S.-Japan Framework Agreement. As part of this initiative, InterOne is positioned to receive up to $25 billion in investment capital to develop a fleet of power plants utilized in baseload energy sources. the only developer that was included in this framework. The program will serve fast-growing energy demand for AI data centers, advanced manufacturing, and national defense, while creating thousands of high-quality American jobs and reinforcing U.S. energy independence. We anticipate the first ENTER1 energy plant to deliver power to TVA as early as 2030, with additional plants phased in as demand grows. Before moving on, I want to take a moment to further highlight our relationship with InterOne. For over three years, we have been working with InterOne on the deployment of our SMR technology. And with this historic TVA announcement, as well as the U.S.-Japan Framework Agreement, our commercialization strategy is starting to resonate. This is a pivotal time for the nuclear sector, driven by favorable regulatory policy and increasing power demand. As that demand for reliable, always-on, and carbon-free power grows, we believe our partnership with InterOne enables off-takers to benefit from nuclear power without taking on plant ownership or operational risk. We believe that benefit, combined with our supply chain readiness and being the only company with NRC-approved SMR designs in modules currently in production, uniquely positions NuScale to meet this important moment. In conjunction with the TVA and InterOne announcement, we entered into a Partnership Milestone Agreement, or PMA, with InterOne to accelerate the commercialization of our SMR technology as outlined in slide five. Under this agreement, NuScale will provide milestone-based payments to InterOne as projects advance through key stages as outlined here. As it relates to the PMA, milestone one was met on September 2, 2025, when the agreement was announced. Ramsey will discuss this milestone later in the call, but I want to take a moment to explain a little bit more about the milestone payment structure. These payments reflect project costs that NuScale would typically incur later in the process, such as development, project management, and other services. By accelerating these payments, we are helping InterOne reach key milestones more quickly, unlocking financing and speeding up construction. We believe this upfront commitment secures new skills technology as the foundation for the largest planned SMR program in U.S. history with a marquee energy offtaker in the form of TVA. As we lay out slide six, Establishing a PMA was a strategic decision to catalyze commercialization, motivate our supply chain to invest, facilitate multiple projects, and accelerate the deployment of NuScale's technology. Looking ahead, this model is designed to be repeatable and scalable. We'll discuss specifics in a moment, but it's important to note that our PMA with InterOne is a template for additional projects. both in the U.S. and globally. And since the TVA and InterOne announcement, we collectively have seen a strong uptick in interest from other potential off-takers who want to deploy SMR solutions, as well as from our supply chain partners eager to support the commercialization of our technology. Turning to slide seven, with the 77 megawatt upgrade now successfully approved by the NRC, our regulatory license affair team has shifted its focus to the Combined Operating License Application, or COLA, management process to ensure the effective commercial development and deployment of NuScale's SMR technology at multiple Inter1 power plants. For background, the COLA builds on the NRC approval NuScale already has, but is submitted by the customer and includes site-specific information, It is an integral step in bringing full-scale commercial nuclear power plants that will provide safe, scalable, reliable, and carbon-free power to market. We believe no company is more familiar with the licensing process for SMR technology than NuScale. Not only do we have an in-depth technical knowledge of SMR plants, but we have over 10 years' experience successfully navigating regulatory licensing processes and proven pre-application NRC engagement strategies. We believe this expertise makes NuScale uniquely qualified to lead COLA development, and we are eager to take this next step towards deployment. Moving to slide eight, NuScale continues to work with FLOR to support Row Power's goal of developing and employing the first SMR power plant in Romania at Dorces, the site of a decommissioned coal-fired power plant. While the coal plant itself is now entirely removed, supporting infrastructure such as roads, switch yards, and grid connection remain intact for repurposing as Rural Power works towards deploying nuclear capacity. The project continues to generate revenue and positive cash flow for NuScale in connection with the floor-lead fee-to-study. As this critical work on the Rural Power project continues, We're also working with FLOR to obtain their input for final investment decision expecting in late 2026 or early 2027. Before I hand it over to Ramsey, I want to take a minute to comment on the market tailwinds we see for NuScale. We all know the challenges and the opportunities facing the U.S. and global energy system. Demand for reliable, always-on electricity is increasing, and the key sectors of the U.S. economy is driving it. Industries like data centers, AI, advanced manufacturing, and critical infrastructure, along with the broader electrification trend. These sectors are expanding at a pace we have not seen before, and they require power that simply cannot go offline. A new scale is uniquely positioned to provide the power these industries seek by being the only technology approved to provide behind-the-meter power. At the same time, the U.S. is focused on strengthening its energy independence, ensuring grid stability and supporting economic growth in regions that are attracting new investment and high-value jobs. Utilities and industry leaders are looking for solutions that deliver on right reliability, scale, and long-term value. We believe NuScale's SMRs can deliver on these needs. The project involving NuScale, InterOne, and TVA demonstrates this. And that is why it is so significant, not just for our company, but for the entire nuclear community. And this scale, as the leader in this space, could not be better positioned to meet other offtakers' needs, both in the U.S. and around the world. Now over to Ramsey for the financial update.

Thank you, John. And hello, everyone. Our financial results are available in our files. So my focus will be on explaining major line items, which can be found on slide nine. U-scale's overall liquidity has increased to $753.8 million at September 30, 2025, versus $489.9 million at June 30, 2025. This increase was driven by the sale of 13.2 million U-scale Class A shares through an at-the-market program during the third quarter, which generated $475.2 million and gross proceeds. Partially offsetting this increase was a $148.5 million payment in relation to the PMA milestone triggered by the recent landmark agreement announced by TVA and EnterOne. USCO reported revenue of $18.2 million for the quarter ended September 30, 2025, compared to the half million during the same period in the prior year. This increase is primarily driven by fees received for services we have provided FLIR during the quarter in support of the Ropar project. I will conclude my remarks with a brief overview of our capitalization summary, as shown on slide 10, and an overview of the recent agreement between FLIR and NuScale, which allows a structured, orderly monetization of FLIR's investment in NuScale via open market transactions and subject to certain equity upon restriction. Under the terms of the agreement, LER may convert all its Newskill Class B units into Class A common stock through a controlled program intended to preserve the fair value of Newskill's equity during the process. In exchange, LER has agreed to support Newskill's plan to increase its authorized share count significantly reduce Florida's economic rights under the Tax Receivables Agreement, and waive certain claims it has served under its commercial agreements with NuScale. With that, I'd like to thank you again for joining today and for your continued support of NuScale. We'll now take questions. Operator?

Thank you. We will now begin the question and answer session. If you'd like to ask a question, please press star, then the number one on your telephone keypad, raise your hand, and enter the queue. If you'd like to withdraw your question at any time, simply press star one again. Thank you. Your first question comes from Derek Soderberg with Cantor Fitzgerald. Your line is open.

Hi, this is Drew Yorkquist calling for Derek. Thank you guys for taking questions. I have two questions. First, is regarding your supply chain. I saw that Doosan signed an agreement to deliver four Westinghouse APU-100s for a different company. I'm just wondering how that's going to impact your ability to secure supplies.

No, our relationship with Doosan is we communicate almost every other day. Doosan has come out and publicly stated that They have the current capacity of producing 20 NuScale power modules per year and looking to expand that as needed. So they have a huge facility. So it's not just limited to NuScale, but the focus that they have on the NuScale modules is dedicated to NuScale.

Thank you. And then you briefly mentioned the U.S. and Japan agreement. Can you just go into a little bit further detail on that and how it affects you guys?

Sure. I think what we can survive from that, which is an absolutely incredible achievement with EnterOne, is that we were named. We're the sole group that was named. was the sole group named under Power Development for AI. And so, you know, this is really a historic time. The agreement between Japan and the U.S. is extraordinary. Extraordinary show of support from a longstanding strategic partner of U.S. scale. As you'll recall, we have great support from JVIC, Chubu, JGC, and IHI. And to be named specifically and solely in this one area, really shows that I think it's really a testament to the connectivity and importance of our technology, both to Japan as a manufacturing partner, as well as potentially customer, and to America and our stakes for putting power to drive AI. So this was an interesting accomplishment, really. I think it's an interesting accomplishment from, if I could say to the end of one group, And look at the other names that were named here. Softank, CE, EWIT, Bechtel, Westinghouse, you know, name it. Toshiba, Hitachi. These are Mitsubishi even. These are the biggest names in technology. These are the biggest names in pallets. And for us and for one to be named inclusive in that group, it's really an extraordinary achievement. I'm glad you brought that up.

Yeah, I'd like to add and reiterate what was stated. I mean, InterOne was the only developer mentioned. And InterOne, they're looking to develop a fleet of power plants utilizing baseload energy sources. And so the program will serve for fast-growing demand for AI data centers, as Ramsey alluded to, but also national defense and manufacturing programs. So we were quite excited about being mentioned in that group of companies.

I'm going to further add one other point. I think as people, you know, a lot of people would ask early on, who's in Taiwan, where are the capacities, what is their connectivity? And I think this past quarter, both with disagreements with Japan, as well as the announcement in relation to TVA that I'm sure we'll be after that, we'll speak about later in this call. I think we've shown the markets, we've shown everyone, just how far this combination of entry-level energy scale can take us. And so this is, again, I think the details are still emerging of this, but really it's a terrible accomplishment. We're super proud and we're grateful to be included in this.

Thank you, guys.

Your next question comes from the line of Eric Stein with Craig Halem. Your line is open.

Hi, everyone. Thanks for taking the questions. Can we just start with the TVA setup you've got? I mean, just to be clear, because I... You know, I've taken some questions, and it's clear that some people are a bit confused by it, but we should view this as this is a very critical step towards getting to your goal, which is a firm agreement by the end of 2025. This isn't necessarily that step, but it is a great indicator that you've kind of got all of the pieces in place, and now it's about getting that PPA signed. Is that right?

Yeah, that's correct. I mean, I'm sorry. Go ahead, Ramsey. No, no. I mean, this just didn't happen overnight. It was a long-term, almost a year between TVA and Inter1 coming to terms and term sheet. And to your point, what we're excited about for New Scale is, You know, this represents 72 potential modules on multiple sites within one. So we are excited about it. And TVA also being a government entity, although they operate like a public company, um, having the government stature behind it, I think it's going to be a good thing. So everyone's already in the process right now of hopefully finalizing these PPAs. And then this thing, it becomes very real. I don't know if Clayton's on the phone. Clayton is our chief commercial officer who's been intimate and working through this process. Are you on Clayton?

Yeah, I'm on. Thanks. And, uh, Yeah, this is something that, as John stated, we've been working for quite some time, and it's an exciting opportunity, and like I said, EntraOne is getting ready to move this forward, and we'll be prepared to support the path and bring this to fruition.

Got it very exciting, no doubt. So we'll stay tuned on that. And then maybe just on the agreement that you announced today with the floor, just on the monetization. In there, you talk about waving certain claims related to commitments. Can you just talk, I mean, does that change at all you know, or signal something on FLUR's commitment? Is it unchanged or is that, you know, maybe opening it up that you can work with FLUR and you can work with others?

Eric, I'm going to take your question and use it as kind of a stepfather to talk more broadly about the agreement. I think, you know, it just came out and I think the floor has decided, as well as we have, to have minimal impact to the market. And then the idea of, like, the reduction of economic rights is delivered to our shareholders because there are economic rights under the B units. Employers agreed to give some of those up, so that's a win for us. And it certainly explains commercial agreements with New Scale. I think it just, you know, it is at least a certain obligation of the U.S. Council in relation to some APC work. But, again, as we've evolved, we're not really developing projects. So it's just a logical outcome of this.

No, that's great. I mean, that's kind of how it read, but just wanted to confirm. So I appreciate it. Thank you. Yeah, thank you.

Your next question comes from Leanne Hayden with Canaccord Genuity. Your line is open.

Good afternoon, everyone. Thanks so much for taking my question. Just want to follow up on the ENTER1 TVA agreement we discussed prior. What do you view as the gating factors to ENTER1 site evaluation or construction permit NRC application?

Well, I think one of the, yeah, John, is, you know, they clearly have a number of sites that have gone through previous preparation approvals and early site permits. So that falls in well with the strategy of focusing on Tier 1 sites to move forward. So I think the evaluations that I've seen and participated with Intra1 and TVA that

that there are any limitations on your ability to raise incremental equity given the monetization agreement with Floor. How do you anticipate meeting entry one milestone payments?

Hi, this is Ramsey. How are you?

I'm good, Ramsey. How are you?

Good, good. I think as we've demonstrated, you know, even during the quarter, We were able to raise a fair amount of cash from the markets, a sensible amount of cash, I should say. Any of the quarters over $750 million worth of cash. The restrictions that we put in terms of our ability to raise funds are in line with our budgeting, and they're in line with our objectives to support shareholders and ensure that there's not selling pressure in the market that is excessive or that... starts in the market pricing. So we've taken a very careful consideration of what the milestone payments are, what we anticipate to receive them or to pay them. And there are funding and liquidity needs. There's been a lot of work that goes in behind that.

Understood. Thanks, everyone.

Thank you. Your next question comes from Joseph Osha with Google.

And, you know, Robert Fardy are, you know, very well-connected guys and done some digging there. But I'm trying to understand this. Has EntraOne ever built or owned or operated anything? And if they haven't, I guess, where are the boots on the ground going to come from? Because it looks... I'll respect you to these guys. They're very well connected. There are pictures of them with Trump and so forth. But I'm trying to understand where the actual operational capabilities and history of InfraOne are. Thank you.

Yeah, I can start. You know, they're an independent global energy company, and they have – years of experience delivering large-scale energy and infrastructure projects worldwide. In fact, part of the due diligence when we went into the program was looking at their extensive knowledge of building coal-fired plants, combined cycle plants. So they've had a lot of, it's not a, it's a family name, but it's not well-known in an industry, but they've had significant experience in building these plants globally. And, you know, you've been working pretty closely with Clayton, and you're part of that due diligence process. Do you have anything else to add?

I mean, they, you know, they've built a lot of plants. They're certainly tied in the infrastructure companies, and, you know,

They had cogentrics one time prior to them divesting it. So they have a lot of experience, in my opinion, as far as building infrastructure and ramping. So they've done a lot of diligence on the technical side and on the construction side. and we're quite confident that they will be ready to promote these plants and move them forward.

Yeah, you made a good point.

Can I follow up here? It sounds to me like you're talking about Habush Group, which is fine. There's no information about any projects on EntraOne that EntraOne has done at all. And if it's Habush Group, that's fine. That's a big company, and they've done a lot, and that's great. Are you telling me that EntraOne has built and operated projects? And I guess it's still a what, because there's no information about any of them on their website.

Let me, if I may. Yes, it's all projects. EntraOne is really set up. Androla set up for the purpose Entra, energy transition. That was the focus of the company. And so, you know, I would shy away from the idea that Entra hasn't developed, for example, an SMR project because nobody has. I'd shy away from the idea that Entra may not be able to build power plants because Entra doesn't pour concrete and they're not operating yellow trucks. Interland is hiring the biggest CPT companies and construction companies with experience in energy and infrastructure to do this work. They're a developer. It's not like they're out there building and separating what's the value of Interland and their ability to coordinate projects, to bring in partners, to get deals, and the partners they bring in that can execute and have executed power plants in the U.S. and elsewhere. And that's really what we're talking about. Yeah, no worries.

Your next question comes from the line of Sondarya Iyer with the Riley Securities. Your line is open.

Hi, Tim. Thank you for taking my questions. I'm asking on behalf of Ryan Fink. So, my first thought would be, like, what's your confidence level that we see a binding agreement with TVA in the near term, and what has to be done for that to happen in the near term? And secondly, if the agreement is the main one, what we are looking for as a full model, or is there a possibility that we could see some another agreement jumping in?

I think there's limited information we can provide on the details of where they are contractually. But we're very confident that things will move forward in a timely manner. What they've announced with TVA, their pipeline is fairly robust, and we anticipate to see some other things coming in the near-term future, and some of that is probably aligned with some of the reasons mentioned earlier around the Japan deal. So we're confident that ENTRO-1 will be moving forward with some other advances at this point.

A few weeks ago, we had a... It was at the Combined Nuclear Energy Institute, American Nuclear Society. There was about 1,600 people there. We were on stage with the CEO of TVA, Don Maul, myself, and the CEO of IntraOne, and, you know, we kind of walked through the process of TVA, and the CEO of TVA was very bullish on wanting to get Eclure. They're working with other companies, as you know, as well. But bottom line, we're still the nearest term, the nearest company that's near-term deployable. And we can, in fact, we are the only company that can do behind the meter. We've gone through the NRC process, so... If you want to expedite and if this administration wants to move quickly, it's with NuScale.

Got it. No. Thank you. Thank you. Could you give some color on your revenues to finance these payments, especially as they become greater in size? I think it's 35%.

Yeah. We have We have a number of avenues to finance the payments. We have cash on hand. We have capital markets activities. And it is our expectation that soon we'll have revenue-free sanctions. And so I don't think we're very concerned about the ability to finance this. I think for us, it's more the idea. Looked over at ideas in telefinance. the partnership milestone agreement. That needs to raise funds. I understand that. I think the important part of the partnership milestone agreement is that this is a catalyst. The money that we're investing here is a catalyst to commercialization. This is pushing projects forward. And so how we fund the PMA payments, well, it depends how many SMRs are in the PMA. If it's 12 or it's 24. And that's within that bucket before it moves to OEM is 24. Can we fund the 24? Yeah, we can absolutely fund it. We can fund it off our balance sheet today if we want to.

Yeah, that makes sense. Thank you, guys, and wish you luck. I'll turn it over.

Thank you.

Thank you. Your next question comes from Dimple Besai with Bank of America. Your line is open.

Thank you. Good evening, team. Could you please help provide some clarity on how many of those six gigawatts under TVA are likely to reach a binding milestone under your partnership agreement? And what are the expected timing and economics for new scale? And then the second part to that is, have you been recognizing revenue and cash from intro one milestones across 2026 to 2028? Thank you.

Clay, do you want to take the first part of that? I'll take the second.

I didn't understand. I didn't catch the very first. That would be all six. Yeah, correct.

I think we can provide some insight into what you think of the developer timeline.

I think, as we mentioned earlier in the call, that We're looking at a timeline of as soon as 2030 for COD on the first plant and then a follow-up thereafter. But yes, the intention is to fulfill the full six gigawatts.

Don't forget, we've already got 12 modules under production for the first plant, which is hopeful by the end of the decade will be COD, as Clayton said. that each of these plants are 12-module plants, which ultimately represents 72 modules for our suppliers and us to bring to these sites. So right now, our focus is to get the first one in the ground and running.

And then for ones working on what that model layout is, they'll reveal that to us at the appropriate time.

Yeah, in terms of our accounting treatment. I think a precise explanation of how we have account for the first set of payments. So stage one of the PA and they agreement is included in our 10 Q under our accounting policy. In our income statement, PMA payment to TBD. I think our preference obviously is to capitalize rather than expense, but. But that's TVE. We'll figure it out when we get to the PPA. We'll determine what it looks like. We'll determine what the appropriate accounting treatment is. I think on the third stage of the milestone payments, I think we're fairly certain there of our ability to capitalize those expenses, which will then be deducted from future revenues. But again, I would refer you to the Q to just take a look at our accounting policies. How we've analyzed.

Terrific. Thank you.

Your next question comes from the line of Brian Lee with Goldman Sachs. Your line is open.

Hey, guys. Good afternoon. Thanks for taking the questions. Hey, Brian. Hey, how's it going? I know a lot of questions around this, you know, Entra1 TVA, so apologies in advance because I have a few more. So the The agreement here is targeting six gigawatts, and it looks like based on the first milestone payment you made this quarter, you're targeting the full six gigawatts. As you mentioned during part of the call, TVA is looking at other options across the nuclear technology spectrum.

I won't name the names, but it's been in the press.

Back from Entra 1, or does it roll over to another development? You're paying basically for 6 gigawatts. on a non-binding basis, but what happens if they never take that to fruition and get to BPA on the full 6 gigawatts?

Yeah, Brian, that's a great question. So the payments would roll into the next project that those term sheets not materialize into a BPA region. So it's not like it's money out the door, it's money gone. That bank has stayed in the system. And I think another important concept here is that once we start the machine, and once you have continued movement from Term C to PPA to OEM, as we expect, as we commercialize, as we scale up, you'll start to see those payments kind of rolling through and they'll almost become self-funding group projects because that's really what it is, Brian. It's like we develop a technology. We manufacture a wholesale distribution partner, and they place those out to market for the projects. And so these P&A payments, these are all just paid into the business plans, paid into the economics. Really, this is a question of timing for us rather than a question of absolute financial impact. So by forwarding the timing of some of those payments, by forwarding that central line, it allows us to commercialize faster, allows us to catalyze this progress, this great momentum that we have. And ultimately, and we say this firmly, we think this is in the best interest of shareholders to push this forward.

Yep, understood. That makes sense.

approach to go to market and then also on the financial terms, lots of commentary around how the payments work and having the funding in place to be able to satisfy the milestone payments all the way through PPA. I guess the big question that we all have on our mind is when does NuScale get paid from EntraOne? And I would presume it's at PPA. But if you get to PPA on the six gigawatts based on, again, you said it's in the queue, there's over $3 billion of payments you will have paid to EntraOne over the course of all these milestone payments to get to PPA. So my simple question would be, when you get to PPA and you get into an equipment agreement with them, do you... anticipate you'll get $3 billion on day one to pay that money back? Or is that a rateable sort of revenue wreck over multiple years where you still don't accrue $3 billion plus that you spent with EntraOne until year, pick your number, T plus? I don't know, but just can you give us a sense I understand the milestone payments, that's specified in very clear detail. How are you guys going to monetize this and what's the timeline for at least recapturing the $3 billion plus you would have paid to enter one?

I'll give you a partial answer that maybe Clayton can hop in as well. I think that the example of getting six gigawatts worth of SMR orders immediately or within a very short period of time. You know, aspirational, incredible, probably not a likely outcome, even just given supply chain and our ability to deliver SMRs. It does say that we don't expect to get every single one of those, but we hope to, but it's not going to happen all at once. When we talk about the P&A payments, I think that we can discern between some of the early stage PMA payments, like the terms and OEM, excuse me, terms and contract that we receive, the final stage of that PMA in relation to an SMR. We also receive money for production. And so I would kind of cut in half what they anticipate the actual cash out, because we can really net, we anticipate netting a third milestone payment. So just to say, yeah, when you look at an overall scale, do we pay out $3 billion if we're going to need an order for Semi 2? Probably not, because we do think that there's going to be an effect on the third payment, and we think that the orders will come in stages, Brian. As I said, once that engine starts running, once we start moving projects through the pipeline, SLRs through the pipeline, those PMA payments will become self-funded.

Okay, understood.

Was that there for you?

Yeah, no, I mean, we're all searching for more details, but we'll take some of this offline. Thank you, Ramsey.

Sure, of course. Your next question comes from the line of Mark Bianchi with T.C. Kellan. Your line is open.

Okay. in the conversation just now with Brian, that like the first projects that move towards this next milestone of a PPA wouldn't be the full 72, but maybe it's 12 or 24 modules. And I mean, first part is maybe just correct me if I'm understanding that incorrectly. And then the real question is, you know, How do you or how does EntraOne anticipate entering into a firm PPA agreement with TVA if the cost might be a bit of a moving target? That's kind of a classic challenge with all of these first-of-a-kind projects, so I'm Kind of curious how that's being addressed.

I'll let you or John take that one.

Well, I think the discussions around the PPA and the cost structure or the pricing structure, I think, is somewhat established. And I don't think they're going to get into a firm PPA unless it resonates to allow them to move the project forward positively.

There needs to be, you know, a long series of front-end engineering work to kind of clearly identify that cost to give certainty and comfort to TVA as an off-taker. And to enter one who, you know, would be presumably taking the risk if there is a cost overrun?

I think all of that is kind of factored into the final net number on the cents per kilowatt. But I think, yes, they're all contributory, but I think they've all been kind of identified from what I can understand.

Gotcha. Okay. And then still looking for end of 26, early 27 for an FID. Are there going to be any interim updates on that project as the FEED study progresses? Is there anything that we can look out for on the horizon that would, you know, be an intermediate update?

Yeah, we talk to RealPower, Mark, almost once a week. In fact, I was just talking with the the CEO of NucleoElectrica, who Rowe Power comes under. So as you remember, we're a subcontractor to Florida. We're doing a feed phase two right now.

They're paying us. We got our licensing payments. Right, right. Okay.

Right now, to your point, I mean, we're not, as I stated before, you know, we're getting paid, and it's been a good project. Romania is very aggressively trying to establish their own Central Eastern European Manufacturing Hub project, So we're hopeful they're successful. They have their own regulator. They're into the nuclear with Chernivota, with CANDU reactors. So it's not that they're unfamiliar. It's hopefully we're hoping they get the funding necessary to carry it on to the final phase of the projects.

Yep. Yep. Okay. Thanks for that, John. Just one more real quick to go back. So the $500 million or $495 that's going for this first milestone, you guys talked a little bit about it in the prepared remarks, I think, about sort of giving supply chain certainty and stuff. But that's a lot of dollars. Could you maybe go through a little bit more about, you know, what EntraOne's going to use that money for and, you know, kind of, how it helps move the project forward?

I can answer that. I think the short answer is that everyone pushes that money into project development. I don't have a source that uses this share, but we know that everyone has pushed forward with this term sheet. We're not saying they're taking like a fine-tooth comb to the spend, except that the spend is towards projects. It's towards development of our projects. And I think this is the most critical thing for NuScale is to forward these. We know that Entra1 has done a lot of work here. They put a lot of effort into these projects. to concede to the law of effort, first dollars in are very, very difficult and very challenging to get. And this is supporting up the commercialization. I think that's... Clay, you've developed more nuclear plants than I have, so you probably can articulate what the early development looks like better than I can on this one.

I think you stated it well. I mean, there's six projects, up to six projects, and there's a lot of front-end work that needs to be done. So, you know, it's all to catalyze and move this forward.

Yep. Yep. Okay, guys. Thanks so much. I'll turn it back.

Great. Thank you.

Your next question comes from Vikram Bagri with Citi. Your line is open. Good evening, everyone.

I wanted to follow up on a few questions asked previously. Obviously, aware of the principles that enter one and their standing in the industry, but the entity itself is complex. So if for any reason this deal doesn't go forward or, you know, so to say this takes Devon's ad Okay, this marriage, corporate marriage ends up in divorce. How do you protect your interest? The payment you're making is quite substantial, $500 million. Are there any safeguards in place to protect your interest if things don't go as planned? Is there anything in place to sort of like safeguard or protect that payment? Yeah, I'll tell you. Yes, are there safeguards? Absolutely. Absolutely. The money that we put out now for the term sheets in relation to TVA were rolled to other term sheets for other projects, so TVA somehow disappeared. But I still struggle, and I guess the market continues to struggle, with this idea of who InterOne is and what they've done. There was so much questioning about the InterOne team, about the principles of InterOne, the backing of InterOne. And now they come out and they signed a term sheet for six gigawatts, five and a half gigawatts of power with TVA, with the U.S. government. And we're still getting these same questions. And then they go and they secure with the Japanese, they secure a place in this tremendous, this landmark Japanese investment into the U.S. We were the sole group TVA, sorry, there's one, like number two, if you look at this joint fact sheet, number two, power development for AI, new skill into an energy. At what point, and I'm asking our analyst group collectively, at what point do you stop doubting this partner? Why, what name for investment? Let's come back to reality, guys. We picked a partner. We picked an amazing partner. The partner has delivered and is delivering, and yet we're still questioning what if, what if. We're committed to the partner. The partner has done a great job. I think we need to recognize that. I mean, I'm asking because just good corporate practice to protect your interests and put safeguards in place, but I get the point. The second question I have is I was wondering, like, you had a – you were targeting a deal by your end. Does this deal with TPA meet that commitment to sort of, like, John, I'll let you guys answer that.

I didn't hear the part of the question. It was muffled.

I was asking, you were targeting a deal by year-end. Is the deal or announcement with TVA meet that commitment, or should we look out for another deal by year-end? Thank you. Okay.

So I think we're still looking at the construct of the deal when it gets signed and how that contributes to our classification of a deal by the end of the year. And we're kind of working through that right now.

Your last question comes from the line of Moses Sutton with P&P Paribus. Your line is open.

This is Joe Nussbaum. I'm for Moses. Thanks for taking my question. Within the PMA agreement, we see a 5% annual escalator on new milestone payments and an arm of math that increases the all-in payment per project from 600 a kilowatt to up to 1,200 a kilowatt by 2040. And while it may be premature to think that far out, can you confirm this escalator point and how do you weigh it against module orders, or should we assume you increase ASPs in tandem with milestone payments?

Thank you.

I'll weigh in as well.

I think the escalation is The escalation is, like, it's an inflationary fuss, is the escalation. Where we see the cost of production of our modules, I think would be the right question because it has relocated margins. For us, we believe that the cost of production is going to go down as we go from personal time to producing, you know, in the case of TVA, potentially up to 72 modules. But really, much more. So, you know, this is kind of a very positive idea where we bring down our costs while we have an escalator to our pricing. And, you know, we're always going to keep pricing in line with what is necessary to be commercially competitive in the market. But this is a great deal for New Scale, right? You know, we all know from first-of-a-kind to end-of-a-kind, we bring down production costs. When manufacturing gets better, it gets more efficient. We optimize the supply chain. So I think that was, you know, that was a big win for us.

Great. Thank you. Very helpful.

And with no further questions in queue, I would like to turn the conference back over to John Hopkins for closing remarks.

Thank you. I apologize. I'm losing my voice here. But a lot of good questions today, a lot of speculation of how this is going to get done. I think Ramsey made a good point. It just wasn't just hit or miss that, you know, in the Japanese framework, $25 billion is allocated to for a developer that we're working with and our exclusive partner, InterOne. And again, we're excited about this, not only for us, we're excited about the whole industry in general, in terms of, you see the market signals and what's happened, demand was there. So we're excited about it. This next quarter, hopefully we'll have a lot more to report. I'm a proofs and a pudding guy. And I can tell you that there's a lot of effort and work that's gone into where we are today. So, you know, we're excited about the future. We believe we have the right partners, the right model, and the collective expertise. And my team and I certainly believe that we're ready to deliver and continue to lead this market. I really would like to thank you all for participating today. And until next time,