Centrus Energy Boosts $3.6B Backlog as HALEU Production Gears Up Amid DOE Funding Wait

Key Highlights from Centrus Energy Corp.'s Q2 2025 Earnings Call

Centrus Energy Corp. (LEU) delivered a strong performance in the second quarter of 2025, showcasing its growing position in the nuclear energy sector. The company's leadership emphasized continued industry growth and strategic initiatives that support long-term objectives.

Leadership Perspectives

Amir V. Vexler, President and CEO, highlighted the ongoing expansion of the nuclear industry, driven by both government and private investments. He noted that Centrus is uniquely positioned to meet the increasing demand for low-enriched uranium (LEU) and high-assay low-enriched uranium (HALEU), especially for military reactors. Vexler also mentioned that the company has not faced significant disruptions due to macroeconomic or geopolitical factors, with operations continuing smoothly.

The CEO pointed out that Centrus ended the quarter with a robust cash balance of $833 million, reflecting strong financial health. This cash reserve supports ongoing investments, including a $60 million supply chain initiative aimed at preparing for potential large-scale deployment following a Department of Energy (DOE) award decision.

Vexler also shared a production milestone, stating that Centrus achieved the 900-kilogram HALEU production target for Phase 2 and has produced nearly a metric ton of HALEU for the DOE. Additionally, the company confirmed an extension of its contract with the DOE through June 2026.

Kevin J. Harrill, CFO, provided insights into the financial results, noting that total revenue for the quarter was $154.5 million, a decrease compared to the same period last year. However, gross margin improved significantly to 35%, up from 19% in the prior year’s quarter. This improvement reflects operational efficiency and a favorable shift in contractual mix. The gross profit for the quarter was $53.9 million, with net income reaching $28.9 million. The company also generated $114.7 million in net proceeds from its ATM program.

Outlook and Strategic Focus

Management expressed optimism about the DOE’s pending allocation of $3.4 billion to jumpstart domestic nuclear fuel production. Vexler stated that the administration’s focus on energy dominance suggests a decision could be made soon. However, the company is not providing specific forward guidance, though Harrill noted that margin levels are expected to remain within historical ranges.

The company is actively preparing for future growth, with a focus on expanding private market participation and readiness for DOE funding. Management emphasized progress in HALEU production and contract extensions, while also highlighting the importance of customer commitments and backlog growth.

Financial Performance Overview

In Q2 2025, Centrus reported revenue of $154.5 million, with a gross profit of $53.9 million and net income of $28.9 million. The LEU segment contributed $125.7 million in revenue, while Technical Solutions generated $28.8 million. The company ended the quarter with $833 million in cash and cash equivalents, along with $8 million in investment income.

As of June 30, 2025, the company’s total backlog stood at approximately $3.6 billion, with $2.7 billion in the LEU segment and $0.9 billion in Technical Solutions.

Q&A Session Insights

During the Q&A session, analysts raised questions about federal programs, capacity expansion, and the impact of the $60 million investment. Vexler confirmed that the project is progressing well, with supply chain and workforce preparations underway. Harrill noted that the investment is being accounted for in the company’s financials through capital expenditures and advanced technology costs.

Other questions focused on new LEU contingent backlog commitments, HALEU Phase 3 production rates, and the potential for a smaller LEU facility build-out. Vexler emphasized that these options are regularly evaluated, while Harrill outlined the company’s strategy to balance public and private funds.

Analysts also probed into uranium sales timing and HALEU contract expansion, with management expressing confidence in internal projections. Vexler reiterated that Centrus is the only Western producer of virgin HALEU, underscoring the company’s competitive advantage.

Sentiment and Risk Analysis

Analysts maintained a neutral to slightly positive tone during the call, focusing on government funding timelines, backlog growth, and capacity expansion. Management’s confident and disciplined approach reinforced its commitment to operational readiness and financial strength.

Risks include variability in quarterly revenues due to customer delivery timing and market pricing, as well as uncertainty around the DOE’s $3.4 billion funding decision. Additionally, the fee for the Phase 2 HALEU contract extension remains under negotiation.

Final Takeaway

Centrus Energy’s Q2 2025 earnings call reaffirmed its strong market position, supported by a $3.6 billion backlog and advancements in HALEU production. The company continues to focus on readiness initiatives, private funding opportunities, and awaiting a significant funding decision from the DOE. With a strong balance sheet and strategic positioning, Centrus is well-positioned to capitalize on the growing demand for nuclear fuel in both the U.S. and internationally.