管理層發言
Good morning, ladies and gentlemen, and welcome to the Centrus Energy Q2 2026 Earnings Call. This call is being recorded on Thursday, August 6, 2026. I would now like to turn the conference over to Neal Nagarajan, Head of Investor Relations. Please go ahead, sir.
Good morning. Welcome, and thank you to all of our callers as well as those listening to our webcast. Today's call will cover the results for the second quarter 2026 ended June 30. Today, we have Amir Vexler, President and Chief Executive Officer; and Todd Tinelli, Senior Vice President, Chief Financial Officer and Treasurer. This conference call follows our earnings news release issued yesterday. We have filed a report for the second quarter on Form 10-Q earlier today. All of our news releases and SEC filings, including our 10-K, 10-Qs and 8-Ks, are available on our website. A replay of this call will also be available later this morning on the Centrus website. I would like to remind everyone that certain information we may discuss on this call today may be considered forward-looking information that involves risks and uncertainty, including assumptions about the future performance of Centrus. Our actual results may differ materially from those in our forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in our forward-looking statements is contained in our filings with the SEC, including our annual report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking information provided today is time-sensitive and accurate only as of today, August 6, 2026, unless otherwise noted. Please note that we report results using non-GAAP financial measures, which we believe provide investors with additional understanding of the company's financial performance as well as its strategic financial planning analysis and period-to-period comparability. A reconciliation to the most directly comparable GAAP measurements is included in the Financial Results section of our earnings release. This call is the property of Centrus Energy. Any transcription, redistribution, retransmission or rebroadcast of the call in any form without the expressed written consent of Centrus is strictly prohibited. Thank you for your participation, and I'll now turn the call over to Amir. Amir?
Thank you, Neal, and thank you to everyone on the call today. We reported strong financial and operational results for the second quarter of 2026 that were boosted by tailwind growth across all of our major addressable markets, existing and growing commercial LEU, national security and HALEU. These developments continue to underscore the growing imbalance in uranium enrichment supply and demand and are reflected in the continued growth in published LEU pricing. By signing the DOE's enrichment award, we have unlocked substantial nondilutive, non-debt funding to advance our commercial centrifuge build-out program. The funding helps de-risk our build-out and advances our progress to first-of-a-kind costs while creating meaningful jobs across this nation. Let me first walk through the demand side of that equation. We are witnessing strong demand tailwinds in our primary market, global commercial LEU to support baseline electricity growth for existing and proven Gen 2 and Gen 3 reactor designs. In the U.S., the NRC recently proposed multiple regulatory changes and amendments that have the potential to further stimulate the industry's growth. If finalized, these changes could expedite new nuclear capacity coming online while lowering development costs for operators. Furthermore, the newly released American nuclear supply chain loan program seeks to help finance and accelerate the deployment of new large-scale nuclear reactors across the United States. Meanwhile, power upgrades and restarts of existing nuclear facilities continue to drive more nuclear energy coming online and subsequent LEU demand. International LEU demand is concurrently set to increase across a number of regions. In Europe, Sweden and the Netherlands are focused on making new nuclear developments possible, while Belgium is looking at ways to restart shuttered reactors. In Asia, we see multiple areas of growth. In April, for example, TEPCO brought back online the 1,300-megawatt Kashiwazaki reactor. Turning to the government market, we continue to see growing demand signals for enriched uranium across various departments as agencies explore avenues to add nuclear power to their energy generation plans. In the national security market, we continue to work with the NNSA on its intent to sole source certain enrichment activities from Centrus. Recall that Centrus is the only viable production-ready technology that can meet national security needs. Combined, these are strong signs of potential growth in the size and duration of the government market. We are simultaneously seeing signs of growth in the HALEU market, where three of four reactor designs that reach criticality ahead of DOE's 4th of July deadline are fueled by HALEU. We also believe that potential Department of War funding could help further reduce their timelines. As a reminder, HALEU represents an incremental growth opportunity for Centrus and is a source of potential near-term capital from prepayments. Because the centrifuge is multifunctional, any funding, whether related to LEU, national security or HALEU advances Centrus through first-of-a-kind costs. Now let's shift to our financial results for the quarter. As many of you know, there can be a significant amount of variability quarter-to-quarter due to the nature of our business. As such, we believe our annual results are more indicative of progress made in our LEU and CTS businesses. In the second quarter, we achieved $176.1 million in revenue, a gross profit of $49.9 million, operating income of $10.4 million, net income of $16.8 million and diluted earnings per share of $0.77. Adjusted net income and adjusted diluted earnings per share were $38.7 million and $1.77 per share, respectively. Turning to our commercial backlog, we are starting to see strong order momentum from the demand signals I referenced earlier, coupled with our build-out progress. We grew our backlog to $4.5 billion that extends through 2040. This is comprised of $3.7 billion in our LEU segment and $0.8 billion in our Technical Solutions segment. The LEU segment backlog is broken down between $0.7 billion of broker-dealer backlog and $3 billion in contingent LEU and HALEU enrichment sales. Todd will discuss our results in more detail. Operationally, we have made meaningful progress throughout the quarter as we remain focused on restoring America's ability to enrich uranium at scale, including the signing of our U.S. Department of Energy $900 million task order that we received earlier this year. The award will support deployment of large-scale production capacity as part of our multibillion-dollar LEU and HALEU capacity expansion. This marks another significant milestone in our expansion as we pivot from a technology demonstration contract to a new larger contract that supports commercial scale production. We're proud to have completed all HALEU production requirements under our existing demonstration contract with the DOE two weeks ahead of schedule. Since we've begun our HALEU operations contract, we have contractually produced nearly two metric tons of HALEU UF6 for the government. While the first new capacity from this transition is expected to come online by 2029, in the interim, we're working with the DOE on agreements to enable the company to privately operate the existing 16-centrifuge HALEU cascade on a commercial basis. With the past quarter funds as well as cash generated from our existing broker business and strong cash balance, we have now met the financing contingency for our more than $3 billion of customer contracts for the purchase of LEU and HALEU. Another key milestone in de-risking and advancing our ongoing multibillion-dollar expansion. Another meaningful achievement for Centrus this quarter was the signing of a letter of intent with Oklo for Centrus to supply HALEU to power up to five Aurora powerhouses for multiple years starting in 2029. We are now signing and locking in HALEU fuel commitments from offtakers. More recently, we announced an offtake contract for HALEU with X-energy. This marks an important step towards ensuring reliable HALEU supply for next-generation reactors and validates our first-mover advantage in the HALEU market. Our HALEU offtake commitments generally include prepayment to Centrus, which will be further negotiated in a future definitive agreement. These prepayments are another source of nondilutive, non-debt funding for our expansion and is a structure we intend to utilize in future HALEU offtake contracts. We also continue to make progress with our supply chain partners, including locking in large commitments to help insulate us from price fluctuations and stabilize costs. We have finalized contracts with approximately 75% of the suppliers we have identified as critical. We also continue to evaluate M&A opportunities in our supply chain that align with our long-term growth strategy and create value for our shareholders. In the second quarter, we made meaningful progress in our workforce additions in both Piketon and Oak Ridge. Finally, I'm also proud that in July, Centrus was invited to join the S&P SmallCap 600 Index, reflecting our role in advancing U.S. energy security and strengthening America's nuclear fuel supply chain. Now moving on to guidance. We are reaffirming our 2026 annual guidance for total company revenue of $450 million to $500 million, total capital spend in the range of $350 million to $500 million, finalizing contracts with 100% of the partners we deem critical, a release of a certified for construction package and at least 100 net new employees hired at our Oak Ridge facility. Simultaneously, given the quarter's progress, we are raising our 2026 annual guidance for Piketon workforce additions from over 100 net new employees to over 175 net new employees. And finally, we are excited to announce that we plan to have our first centrifuge completed at our Oak Ridge facility sometime in 2026, an important accomplishment and milestone that demonstrates that our supply chain has come together. I will now turn the call over to Todd and return with some final thoughts and comments. Todd?
Thank you, Amir, and good morning to everyone on today's call. Let me walk you through our results. Our results were in line with our internal projections and reflected not only the typical quarter-over-quarter shift in contractual mix, but also the beginning of the spend for our manufacturing program. As noted, I will be presenting financials on a quarterly and trailing 12-month basis. Total revenue for the second quarter was $176.1 million, an increase of $21.6 million or 14% versus the same period last year. TTM revenue was $473.9 million. The LEU segment generated $153.4 million in the second quarter, a 22% increase versus the previous period last year. SWU revenue in the quarter decreased by $25.7 million due to a 23% decrease in volume of SWU sold, partially offset by a 3% increase in the average price of SWU sold. Centrus also had $53.4 million of uranium sales in Q2. The Technical Solutions segment delivered revenue of $22.7 million in the second quarter, a $6.1 million or 21% decrease over the previous period due primarily to a $5.9 million decrease in revenue from the HALEU operations contract. Centrus generated gross profit of $49.9 million and $112.1 million for the second quarter and TTM, respectively, compared to a gross profit of $53.9 million in Q2 2025. The LEU segment's second quarter cost of sales of $101.8 million increased year-over-year by 36% or $26.8 million, driven by an increase in uranium sales in Q2 2026. Uranium costs increased as a result of increase in the volume of uranium sales. SWU costs decreased 23% as a result of lower SWU volumes, partially offset by a 13% increase in the average cost of SWU sold versus Q2 2025. The Technical Solutions cost of sales of $24.4 million decreased $1.2 million or 5% from Q2 2025, primarily attributed to the HALEU operations contract. The company generated net income of $16.8 million and $38.7 million of adjusted net income in the second quarter compared to net income of $28.9 million and adjusted net income of $34.5 million, respectively, in Q2 2025. On a fully diluted basis, this equates to second quarter 2026 earnings per share of $0.77 per unit and an adjusted earnings per share of $1.77, respectively, compared to $1.59 and $1.90, respectively, for Q2 2025. On a trailing 12-month basis, Centrus generated net income of $48.5 million and adjusted net income of $92 million, respectively. The second quarter net income decrease was primarily attributed to a $12.8 million increase in SG&A costs, driven by an increase in stock compensation costs and a $7.5 million increase in advanced technology costs in Q2 2026. This was partially offset by an $8.3 million increase in investment net income for Q2 2026. Second quarter adjusted net income includes $10.6 million of gross expenses in our advanced technology costs and $17.7 million in stock compensation costs, which combined and tax adjusted equals $21.9 million. The advanced technology costs include short-term noncapitalized costs related to the expansion of our operations in Piketon and Oak Ridge that cannot be capitalized as they are associated with manufacturer readiness and security training ahead of the build-out. Please refer to the financial results section of our earnings release issued yesterday for a reconciliation of net income and adjusted net income. Going forward, we continue to expect to have a certain level of these types of expenses flow through our income statement as we continue our preparations. Centrus backlog across both segments grew to $4.5 billion at the end of the second quarter and extends out to 2040. The growth was driven by an approximate $600 million increase in LEU and HALEU enrichment sales in the LEU segment. Of the approximate $3 billion in the segment's enrichment backlog, $2.4 billion are under definitive agreements. Turning to our capitalization and capital spend. As a reminder, non-CapEx is attributed to cost and investments such as prepayments to suppliers or our growth costs associated with our manufacturing and preparations. In the second quarter, we had a total capital spend of $82.2 million with $71.6 million coming from CapEx and $10.6 million classified as non-CapEx and comprised of the aforementioned advanced technology cost. Going forward, we continue to expect the pace of our CapEx and non-CapEx spend to accelerate throughout the year. We finished the second quarter with $1.9 billion in unrestricted cash using our ATM opportunistically to acquire proceeds of only $53.9 million. Importantly, all financial contingencies in our contingent LEU enrichment backlog have now been removed. We continue to feel confident in our existing cash balance, and we believe we are sufficiently funded to meet our near-term capital requirements. As Amir noted, our progress to date have allowed us to raise our 2026 annual guidance for workforce additions in Piketon, Ohio to 175 plus, up from 100 plus. We are simultaneously reaffirming the rest of our financial and operational guidance for fiscal year 2026. And finally, we are excited to share that we expect our first centrifuge to be completed in Oak Ridge in 2026, an important milestone in our build-out. With that, I will turn the call back to Amir. Amir?
Thank you, Todd. I am proud of the great progress we made during the second quarter across our operations and strategic partners. So in summary, we are seeing strong demand signals across all three of our addressable markets: commercial LEU, national security and HALEU. This increased demand, coupled with the progress we have made in our centrifuge manufacturing program has led to increased momentum in our order book backlog. Importantly, the strong demand signals in commercial LEU have led to a very constructive pricing environment. Long-term LEU pricing continued its steady ascent year-to-date, while spot pricing remains at the high set last year. With market tightness anticipated for at least the near and midterm due to constrained supply, while demand continues to grow, Centrus is well positioned to benefit as a proven enricher. Looking ahead, we will continue to focus on our mission of restoring America's nuclear fuel supply chain and are encouraged by the continued strong trends in the broader macro environment that are supporting global nuclear power development. Finally, we are excited to host our first Investor Day in December at our American Centrifuge plant in Piketon, Ohio. We look forward to sharing more about our strategy, growth opportunities and long-term outlook at the event. With that, I will turn the call over to the operator for questions.
分析師問答
The first question comes from Jon Windham with UBS Financial. We focus on our mission of restoring America's nuclear fuel supply chain and are encouraged by the continued strong trends in the broader macro environment that are supporting global nuclear power development. Finally, we are excited to host our first Investor Day in December at our American Centrifuge plant in Piketon, Ohio. We look forward to sharing more about our strategy, growth opportunities and long-term outlook at the event. With that, I will turn the call over to the operator for questions.
This is David Choe on for Jon Windham. Congrats on the progress this quarter. Just really quickly on the X-energy partnership. Could you just give us a sense of the cadence of any deliveries you expect to make? I know X-energy is planning to bring their first facility online in the first half of '28. And then do you expect any of those volumes to come from the demonstration cascade that you're converting to commercial offtake?
Yes. Great questions. Thank you very much. Let's start with the X-energy question. As you pointed out, we announced a very exciting agreement this morning. I'd like to generally frame it up as another data point that shows Centrus is quickly becoming a trailblazer and the go-to for HALEU. We're proud to be able to support some of the new development in advanced reactors. As you know, we already have a strong order book of LEU as well. I would like to remind you that these HALEU agreements include a prepayment as well, which is significantly helpful to us. Now to your specific question, unfortunately, I cannot provide too many details around deliveries and other specific terms under the contract. We are unable to provide that. But as I said, all in all, it's exciting. It's definitive, which is very important, and we're looking forward to filling it.
The next question comes from Bill Peterson with JPMorgan.
I guess given that we're less than 18 months from the Russian import ban going into effect, have you seen any changes in buyer behavior? How should we think about any potential changes in financials, including your inventory or working capital, assuming customers prefer to prebuy? I mean, all this assumes there's no further waivers, but just kind of get a sense for how customers are — if they're willing to sign at current market levels for SWU or any change in customer behavior that you're seeing?
Bill, thank you for the question. Since you gave me a free hand in answering that question, let me give you general thoughts as to what we're seeing that we cannot get into a lot of details around discussions we're having with customers. We do see tightness on the supply side towards the end of the decade. I do believe we're starting to see some of that. We're seeing strong momentum as far as customer interest generally in buying SWUs and turning specifically to Centrus for that as the newcomer and the new entrant into the market. So we're seeing very strong order momentum. As I mentioned on the earnings call, LEU pricing has had a very strong run-up until this point, which is very helpful to our business and further reinforces the investment that we're preparing to make here. So all in all, I think it's in line with past discussions that we were having as to where we see the market going and with all the added demand side to the equation and not a whole lot added to the supply side in the next year or two, we're seeing that momentum play in favor of the sellers.
The next question comes from Eric Stine with Craig-Hallum Capital.
This is Luke on for Eric. So on the cost savings front, obviously, the partnership with Palantir is already proving to be extremely valuable. But can you just give us an idea of what the picture for further cost savings might look like throughout the life of your expansion project, in terms of comparable magnitude to what you've been able to achieve thus far since you're still in early stages here? Are there any cost areas in particular that you're focusing on now?
Thank you for that question. You're pointing to an area that is at the top of our priority list as we launch the project, commence manufacturing, and start committing to commercial deliveries and to delivery of our centrifuges. It is extremely important that we unlock efficiencies, cost savings and cost-out efforts in parallel. We talked about our efforts together with Palantir and some of our EPC partners. We have many supply chain efforts that are aimed at yielding exactly what we're talking about here. Being able to lock in larger order books and having more clarity into the customer base about ordering allows us to make leverage buys and realize savings on the supply side of our build. In addition to utilizing supplier savings, we're also launching many internal efforts to ensure that the manufacturing facilities and processes incorporate lean principles and maximize efficiencies. All of that will result in cost savings. In terms of being able to give you details numerically and what we're targeting, that's not something we've talked about on this call, but I'll reiterate that being able to lock in long-term agreements and large orders results in significant cost savings.
The next question comes from Mark Shooter with William Blair.
Again on the Oklo and X-energy supply agreements. I understand you guys are limited on what you can disclose, but maybe a comparison may help bring out some context for us. If you look at the two HALEU contracts you recently signed with Oklo and X-energy today, can you highlight anything where they may be the same or differ maybe in size, timing, milestone structure? Is one further along, more definitive? Do you either have take-or-pay commitments?
Yes. I'm fairly limited in the details that I can provide because of nondisclosure agreements, and we typically do not reveal specifics of commercial agreements. However, there are a lot of similarities. We are starting to see a much greater ability from our customer base to commit to legally binding agreements, definitive agreements, and that's what you saw with the X-energy agreement we announced, and that's what we're marching towards with Oklo as well. I want to explain a little about the LOI dynamic versus a contract. The LOI is a step that precedes a definitive contract. It is an agreement over general terms. Once we get to that point, we're very close to finalizing contractual terms and conditions. The similarities we're seeing include customers prioritizing fuel in their purchasing strategy, and we're seeing a maturing of the SMR market. Probably the most important point is that we are starting to lead the pack as the HALEU supplier. HALEU has been a bonus for us; LEU remains the sure business. We naturally are trying to secure HALEU and the LEU feed, which is extremely important for economies of scale. The third similarity we are seeing is prepayments. We're seeing the willingness and ability of customers to provide prepayments, which adds significantly to the nondilutive capital we can invest.
The next question comes from Vikram Bagri with Citigroup.
It's Ted on for Vik. I just wanted to come back to the guidance. Could you remind us what's driving the bookings there? The release mentioned the potential roll-off of funding for the operations contract. So just wanted to understand where that may sit within the revenue guidance range.
If you recall, we increased our guidance last quarter. One thing to remember is our business has variability from quarter-to-quarter, which is why we talk about earnings in the trailing 12 months. We're not providing quarter-over-quarter guidance. However, we're maintaining our guidance for the year. We feel that along with our strong order book and the market maturing, we are able to maintain our guidance for revenue and CapEx. Another strong item is that we've increased our headcount around the Piketon facility, which shows continued momentum and our build-out at Piketon.
I'd like to add to what Todd is saying. A very exciting announcement for us is that the first centrifuge is going to be completed in our Oak Ridge facility sometime in 2026 as we announced. This is in line with our project planning and is one of the most exciting steps towards realization and commencement of enrichment in Piketon.
Got it. And then one further question. On the increase to the backlog quarter-over-quarter, are you able to talk about what led to that increase in terms of the signing of the DOE awards contributing to that? Or are some of the more recent awards within there? And how do you actually define the backlog? Does it include any LOIs?
I won't be able to get into many details, but I will tell you this does not include the DOE. These are all commercial agreements. The increase in backlog has to do with commercial agreements. I cannot really go into any more detail than that.
The next question comes from Rob Brown with Lake Street Capital Markets.
Congratulations on all the strong progress. Just want to talk a little more about the offtake agreements. Maybe just big picture, what's your thinking on the amount of your future capacity that you hope to have in terms of offtake agreements signed up? This, I guess, is a HALEU-specific question. How much capacity do you hope to have offtake agreements signed for?
Thank you for the question. Our strategy depends on what our solid order book looks like; that determines the proportion of LEU versus HALEU that we're building. At this point, based on what we're locking in, we're not changing the proportions of what we're building out. We will build both and have the flexibility to do so. Depending on the customers that step forward and make firm commitments, that's what we'll build. We will look for solid commitments for as long term as possible, and we've communicated those points to the market last year. I'm happy to say it's progressing as we anticipated.
The next question comes from Ryan Pfingst with B. Riley Securities.
Maybe a follow-up on your work with Palantir and efficiencies more broadly. You discussed efforts on the cost side earlier. Could you give more detail on progress you're looking to make on lead time reduction?
Ryan, thank you. Lead time reduction is extremely important as an opportunity as well as cost out. We're backing into commercial agreements that demand faster timelines. There is a gap in the market in terms of supply, and there is a tangible reward to bringing enrichment capacity online faster. Part of our work with Palantir, our EPC providers and other partners—large suppliers we've identified—are projects that look at both lead times and cost out. Lead times translate into enhanced revenue and earlier realization of revenue. We're focused on that, and we continue to pursue those initiatives.
The next question comes from Nick Amicucci with Evercore.
I'm going to focus back on the guidance. Just as we think about the CapEx ramp through the back half of the year and the completion of the centrifuge, how should we think about the cadence of the balance of the spend through the end of the year? And then into 2027, where that CapEx number might filter out?
Thanks, Nick. This project will continue to ramp up. We're not providing guidance beyond 2026 at this point, but we maintained our guidance for 2026 around CapEx. In the most recent quarter we spent through prepayments, capitalized labor or preorders. The project will continue to move forward. Increased headcount at Piketon is another sign of momentum. We believe that accelerated spend and moving forward with our project in addition to increased customer demand and backlog allow us to move at a cadence that will meet our customer demands for future deliveries.
Nick, I want to add that the first centrifuge completion this year is important. We're building a manufacturing facility, a first-of-a-kind in the United States to manufacture one of the most complex items—the centrifuge. We have top people, top engineers and top suppliers working on it, and it's coming together. The first centrifuge is tangible proof. The intention is to have a cadence of production synchronized with customer deliveries past the end of the decade. I can't give specific numbers beyond what Todd said, but view it that way.
The next question comes from Jeff Grampp with Northland Capital Markets.
On the hiring front, you continue to make positive progress on accelerating the hiring goals at Piketon. Can you touch on potential de-risking or accelerating of timelines to first cascade given the hiring acceleration? Are those correlated at all? Any other benefits to the business or timeline with the accelerated hiring?
This ties to improving lead times and taking cost out. Improving lead times is a tangible benefit to getting on the market quicker. The acceleration in adding workforce relates directly to that. Overall, it's a positive sign intended to ensure we deliver on commercial commitments and potentially exceed them. Nothing new to announce at this point, but it's a constructive development.
When you think about Piketon versus Oak Ridge headcount, Oak Ridge is where we'll manufacture centrifuges, which are then shipped to be installed and stood up in Piketon. All these items are connected: supply chain, lead times, manufacturing and installation preparations at Piketon so we can begin enrichment. We hope many of you will attend the Investor Day in December to see the facility and understand it in greater detail.
The next question comes from Joseph Reagor with ROTH Capital Partners.
A lot of my questions have already been touched on, but trying to put a bow on everything you said. Is it still the expectation that commercial production would commence around 2029 at Piketon? Or is that timeline potentially moving forward?
I would remove the adjective 'late' and just say 2029—that is our goal. We are exploring opportunities and working hard to potentially compress timelines, but there is nothing to announce and no commitments at this point.
The next question comes from Sameer Joshi with H.C. Wainwright.
Could you talk about the SWU price dynamics here? I think if I heard right, the prices went up 3% during the quarter, whereas the costs went up 30%. What are the drivers for the costs growing up?
This question summarizes the market in one number. SWU prices have been escalating due to demand outstripping supply. We still have two to three more years until capacity announced by others begins to come online, so I expect continued constraint. We're not seeing new capacity added yet. Meanwhile, more reactors are being planned, restarted or upgraded, all requiring fuel. That dynamic is driving prices and, in the near term, I don't see that changing significantly.
Amir, can you also comment on what is driving the costs up concurrently? I would imagine it's mostly energy costs, but there are other costs that are also clearly rising.
Costs relate to a mix of our SWU and uranium costs. We can't comment on the specific cost of each deal, but inventory cost reflects contractual mix and accounting for inventory on the books. We're seeing strong SWU prices, margins are in line with our expectations, and market demand supports those SWU prices.
The next question comes from Drew Scott with Needham & Co.
Can you talk about pricing structures in your offtake agreements that you are pursuing? Are you using fixed price structures or indexing to some type of pricing? And if you think the market is tightening, how much offtake are you wanting to sign today?
We can't comment on specific pricing of our contracts due to NDAs. One of the most important things is that these new contracts are definitive and we met financial contingencies in our backlog. The more offtake we sign, the more economies of scale we achieve, and we continue to meet customer demands. The HALEU market has matured over the last six months, and we continue to be the first HALEU provider in the market.
The next question comes from Christopher Souther with Truist.
Congrats on the progress. Maybe you can give us an update on how discussions are going with utilities for LEU on potential long-term contracts now that you've met financial contingencies. How should we think about the cadence for incremental orders between now and 2029? It's great to see SMR developers being proactive on HALEU, but curious if you have a sense or target on the visibility we could continue to build between now and 2029. Are you seeing more urgency from traditional utility customers given pricing trends?
Thank you. We've focused strongly on the LEU market, which provides a solid foundation for our offtake backlog. These are solid commitments needed by reactors operating every day for decades. The fact that we've met required contingencies makes us a much lower risk start-up and a lower risk enricher in the market. I expect that will give us more traction with utilities. We're seeing more interest and focus from utilities toward the new entrant to ensure competition in the market. We're engaging constantly with utilities that are looking to fulfill LEU needs for years to come. Some discussions are lumpy and take different amounts of time, but it's a priority for us.
So as far as contract timing, are 2028 and 2029 big circle dates for contracting from some of those utilities? Or could we see some of that earlier?
Buying patterns differ by utility. Larger and smaller utilities have different strategies and different tolerances for risk. The fact that we are demonstrating centrifuge delivery and have no financial contingencies should attract utilities that were in a wait-and-see mode. Fully expect more engagement. Also note that the market anticipated the Russian ban and many utilities have secured positions in the near term. Discussions and RFPs are often for future periods when we plan to have capacity online. We also have a strong broker business that has supported cash flows and stands ready to meet near-term customer requests.
The next question comes from Joseph Osha with Guggenheim Securities.
This is Peyton on for Joe. As you transition the HALEU cascade from cost reimbursable DOE work to commercial operations, what does the fully ramped earnings power of the combined LEU and HALEU business look like? And what needs to go right over the next 18 to 24 months to get there?
We don't provide additional guidance on fully ramped earnings power. The transition of the demo cascades to commercial demonstrates our ability to operate cascades and produce HALEU for the market. We're excited to continue offering commercial HALEU. These operations require LEU feedstock and will develop over time, but we can't provide further guidance at this time.
When you think about the demo cascade, its intent was to demonstrate our technology and de-risk it. It's a great story to transition demo cascade equipment into commercial operations. There's a lot to read into that regarding demonstration of our technology, capability and high expectations for field operation. We see this as very positive progress and development.
Thank you. There are no further questions at this time. I will now transfer the conference over to Neal Nagarajan, Head of Investor Relations. Please go ahead, sir.
Thank you, operator. This will conclude our investor call for the second quarter of 2026. As always, I want to extend a thank you to our listeners and our analysts online and those who called in. We look forward to speaking with you again next quarter and sharing more information on our upcoming Investor Day.
Thank you. Ladies and gentlemen, this concludes the conference call for today. Thank you for your participation. You may now disconnect.