NuScale Power Corporation (SMR) is a trailblazer in the nuclear energy industry, revolutionizing the way the world generates clean, reliable, and cost-effective power. Founded in 2007, the company has steadily risen to the forefront of the small modular reactor (SMR) market, positioning itself as a vital player in the global energy transition.
Company Background and Technology
NuScale's journey began with a dream to design a smaller, safer, and more economical alternative to conventional nuclear power plants. The company's proprietary NuScale Power Module (NPM) technology has been the driving force behind its remarkable progress. In 2017, NuScale submitted its Design Certification Application (DCA) to the U.S. Nuclear Regulatory Commission (NRC), marking a crucial milestone in its path to commercialization. After a rigorous review process, the NRC issued its Final Safety Evaluation Report in August 2020, representing the completion of the technical review and approval of the NuScale design.
With this significant regulatory hurdle cleared, NuScale has continued to push the boundaries of innovation. In January 2023, the company submitted a Standard Design Approval (SDA) application to the NRC for its 6-unit, 77 MWe NPM design. The NRC accepted this application for formal review in July 2023, with an expected completion date of July 31, 2025. Once approved, this will enable customers in the United States to reference the certified design and SDA for expedited construction and operating licensing of NuScale's SMRs.
Manufacturing and Partnerships
NuScale's manufacturing readiness has also been a key focus, as the company works closely with its long-term supply chain partners, many of which are strategic investors. The company's relationship with its manufacturer, Doosan Enerbility, has been instrumental in advancing the production of the first NuScale Power Modules, providing a significant advantage for future project deployments.
Financials and Liquidity
Financially, NuScale has maintained a strong cash position, ending the second quarter of 2024 with $136 million in cash and equivalents, including $5.1 million in restricted cash, and no debt. This liquidity has enabled the company to navigate the challenges of the past year, which included the termination of its Development Cost Reimbursement Agreement (DCRA) and Long Lead Material Reimbursement Agreement (LLM Agreement) with its first customer, CFPP LLC.
The company's financial performance reflects its transition from a research and development-based company to a commercial enterprise. For the fiscal year 2023, NuScale reported revenue of $22.81 million, with a net loss of $58.36 million. Operating cash flow stood at -$183.25 million, while free cash flow was -$184.98 million.
In the most recent quarter (Q2 2024), NuScale reported revenue of $967,000, a decrease from $5.79 million in Q2 2023, primarily due to the loss of the contract with CFPP LLC. The net loss for the quarter was $27.62 million, an improvement from $29.73 million in Q2 2023, primarily due to a $36.73 million increase in the fair value of warrant liabilities. Operating cash flow and free cash flow for Q2 2024 were both -$36.03 million, an improvement from -$82.37 million in Q2 2023.
As of June 30, 2024, NuScale's debt-to-equity ratio stood at -0.0006, with a current ratio and quick ratio both at 2.66. The company has no debt and no available credit line, relying on its cash reserves and equity offerings to fund operations. To bolster its financial position, NuScale has utilized an at-the-market (ATM) equity offering program, generating $72.6 million in net proceeds during the first half of 2024.
Market Opportunities and Partnerships
Despite the setback with CFPP LLC, NuScale has remained focused on cultivating new opportunities, particularly in the rapidly growing data center and artificial intelligence (AI) sectors. The company's partnership with ENTRA1 Energy has been instrumental in developing a flexible and bespoke business model that provides utilities and commercial consumers with a solution to obtain SMR-generated energy offtake without the need to own or operate a nuclear power plant.
Moreover, NuScale has benefited from the strong bipartisan support for advanced nuclear technology in the United States. The recent passage of the Bipartisan Advance Act, which aims to streamline the nuclear energy regulatory process, is expected to have a significant impact on the company's future collaborations with international customers and partners.
Industry Impact and Future Outlook
As the world grapples with the urgent need to address climate change and meet growing energy demands, NuScale's SMR technology has emerged as a crucial part of the solution. The company's ability to provide clean, reliable, and scalable power has garnered the attention of tech giants, such as Google and Amazon, who are increasingly turning to nuclear energy to power their data centers and support their ambitious sustainability goals.
The nuclear energy industry is experiencing a surge in electricity demand while companies and governments seek to mitigate the production of emissions contributing to climate change. The U.S. Department of Energy aims to triple nuclear capacity, adding 200 gigawatts to meet net zero emission goals by 2050. Global data center power demand is expected to grow at a 15% CAGR through 2030, creating a significant need for reliable, 24/7 decarbonized energy solutions to power the growing data center and AI infrastructures.
Looking ahead, NuScale remains steadfast in its mission to revolutionize the nuclear industry. With its regulatory approvals, manufacturing readiness, and growing partnerships, the company is well-positioned to capitalize on the global demand for advanced nuclear technology. As the energy transition accelerates, NuScale's innovative solutions are poised to play a pivotal role in shaping a more sustainable energy future.
Company History and Resilience
Throughout its history, NuScale has demonstrated remarkable resilience in overcoming challenges. The company has successfully navigated the complex regulatory landscape and secured necessary funding to support its research and development efforts. In 2021, NuScale underwent a significant transformation when it merged with Spring Valley Acquisition Corp. to become a publicly traded entity, further solidifying its position in the market.
Innovation and Collaborations
NuScale's commitment to innovation extends beyond its core technology. The company has forged important partnerships and collaborations with various entities, including the U.S. Department of Energy, U.S. Department of State, and U.S. Trade and Development Agency. These strategic alliances have played a crucial role in NuScale's development and have helped to accelerate the commercialization of its groundbreaking SMR design.
Global Impact and Vision
As part of its mission, NuScale aims to improve the quality of life for people around the world by providing scalable advanced nuclear technology that can produce not only electricity but also heat and clean water. This broader vision underscores the company's commitment to addressing global energy and environmental challenges through its innovative nuclear solutions.
Legal Proceedings
In the regular course of business, NuScale is involved in various legal proceedings and claims. On September 19, 2022, thirteen purported members of NuScale LLC filed suit in the U.S. District Court for the District of Oregon against NuScale LLC, Fluor Enterprises, Japan NuScale Innovation, Inc., and Sargent Lundy Holdings, LLC. The plaintiffs purport to represent a class of individuals who held common units or options to purchase common units in NuScale LLC and seek declaratory relief and damages based on breach of contract and other common law claims. There are also two other shareholder class action lawsuits filed against the company. While no assurance can be given as to the ultimate outcome, the company does not believe it is probable that a loss will be incurred and has not recorded any liability as a result of these actions.
Recent Developments and Future Prospects
NuScale has recently executed a revenue-generating agreement related to the advancement of the Doicesti Project in Romania. The company anticipates additional revenue from Fluor Corporation over the next 12 months for their continued contributions to that project. This new contract, along with the cost-cutting measures implemented and the utilization of the ATM program, has strengthened NuScale's financial position. The company believes it has sufficient funds to cover required R&D activities and operating cash needs for the next twelve months.
As NuScale continues its transition from a research and development-focused company to a commercial enterprise, it remains committed to securing additional customer commitments and commercial contracts to support its long-term operations. With its unique position as the only SMR technology with design certification from the U.S. Nuclear Regulatory Commission, NuScale is well-positioned to capitalize on the growing demand for clean, reliable, and scalable nuclear energy solutions in the years to come.