Executive Summary / Key Takeaways

• NuScale Power ($SMR) stands as the sole U.S. Nuclear Regulatory Commission (NRC) approved small modular reactor (SMR) technology provider, positioning it years ahead of competitors for commercial deployment.
• The company's strategic partnership with ENTRA1 Energy, highlighted by a landmark agreement with the Tennessee Valley Authority (TVA) for up to 6 gigawatts of new nuclear capacity, signals a significant acceleration in commercialization efforts.
• NuScale's proprietary 77-megawatt electric (MWe) NuScale Power Module (NPM) technology offers tangible benefits including enhanced safety, scalability, and the use of conventional fuel, addressing the surging demand for reliable, carbon-free power from data centers and industrial applications.
• Despite significant operating losses and strategic cash outlays for partnership milestones, NuScale maintains a robust liquidity position of $753.8 million as of September 30, 2025, supported by disciplined cash management and capital market access.
• The company anticipates securing "hard contracts" with U.S.-based customers by the end of 2025 and aims for the first ENTRA1 energy plant to deliver power to TVA as early as 2030, with a long-term outlook for increased operating expenses to bolster supply chain readiness.

The Dawn of a New Nuclear Era: NuScale's Foundational Strengths

NuScale Power Corporation is at the vanguard of a transformative shift in global energy, pioneering modular, scalable electric Light Water Reactor nuclear power plant technology. Founded in 2007, NuScale embarked on a mission to deliver an energy source that is smarter, cleaner, safer, and cost-competitive, aiming to improve the quality of life worldwide. This ambition is particularly pertinent today, as the world grapples with escalating electricity demand, driven by the proliferation of artificial intelligence (AI) data centers, advanced manufacturing, and the broader push for electrification. These sectors require an unwavering, 24/7 power supply that intermittent renewable sources alone cannot guarantee.

The company's overarching strategy centers on its unique position as the first and only SMR technology provider to obtain design approval from the U.S. Nuclear Regulatory Commission (NRC). This regulatory leadership, achieved through a decade-long, multi-billion-dollar investment in de-risking plant licensing and operations, is NuScale's most significant competitive moat. It enables the company to offer near-term deployable SMR solutions, a critical advantage in a market hungry for immediate, reliable, carbon-free energy. NuScale's business model is that of a technology provider, selling its NuScale Power Modules (NPMs) to its exclusive global strategic partner, ENTRA1 Energy, which then develops, finances, and operates the power plants, selling the energy to end-users. This asset-light approach for NuScale mitigates project development risks and allows for focused technological advancement.

Technological Edge: The NuScale Power Module

At the heart of NuScale's investment thesis is its proprietary NuScale Power Module (NPM). This Light Water Reactor technology is not merely an incremental improvement but a fundamental re-imagining of nuclear power generation. The NPM is designed to generate 77 megawatts of electricity (MWe) per module, a significant upgrade from its previously approved 50 MWe design, with final NRC approval for the 77 MWe expected by mid-2025. This up-rated design is anticipated to cater to a broader spectrum of customers while enhancing economic efficiency.

The tangible benefits of NuScale's technology are manifold and directly address critical market needs. The NPM's modular architecture allows for factory-built units, significantly reducing on-site construction risks and timelines compared to traditional gigawatt-sized nuclear facilities. This modularity also enables scalability, with plants configurable from 4 to 12 modules, offering up to 924 MWe of power. A key differentiator is the NPM's advanced passive safety systems, which operate independently of human intervention, setting a new standard for safety. Furthermore, NuScale's reactors utilize conventional, low-enriched uranium fuel (less than 5% enriched), eliminating the need for high-assay low-enriched uranium (HALEU) fuel, which currently lacks a commercial supply chain and is years away from widespread availability for other advanced reactor designs. The company has also achieved a legitimate emergency planning zone (EPZ) licensed by the NRC at the site boundary, enabling closer proximity to end-users and off-grid capabilities. For a 12-module plant, any refueling cycle is a mere 10-day process, ensuring continuous, high-capacity power availability.

NuScale is also actively innovating beyond electricity generation. The company is exploring the production of carbon-free hydrogen, integrating hydrogen production systems and controls into its multimodule main control room simulator. This solution is designed to meet commercial-scale industrial applications requiring over 200 metric tons of hydrogen per day, positioning NuScale to benefit from clean hydrogen tax credits potentially worth up to $3 per kilogram. These technological advancements, coupled with the company's commitment to developing future nuclear talent through 11 Energy Exploration (E2) centers globally, solidify NuScale's competitive moat and long-term growth strategy.

Competitive Landscape: A First-Mover's Advantage

In the nascent but rapidly expanding SMR market, NuScale Power holds a distinct first-mover advantage. The company is the only SMR technology with NRC design approval, a critical regulatory hurdle that competitors like BWX Technologies , General Electric , and Rolls-Royce Holdings are still years away from achieving for their advanced reactor designs. This regulatory lead means NuScale's technology is ready for commercial deployment, while other projects are largely in the demonstration phase, requiring years of operation before commercial approval.

NuScale's light water reactor technology, which uses conventional fuel, is well-understood by regulators globally, contrasting sharply with Generation IV SMR technologies that rely on HALEU fuel, a supply chain for which does not yet exist. This fundamental difference in fuel type and regulatory maturity provides NuScale with a significant edge in deployability and market acceptance. While BWX Technologies (BWXT) boasts deep expertise in nuclear engineering and government contracts, and General Electric (GE) leverages its global scale and integrated energy solutions, NuScale's specialized focus on modular, factory-built SMRs offers greater efficiency in deployment and adaptability for diverse applications. Rolls-Royce Holdings (RYCEY)'s SMR designs also compete in compact power generation, but NuScale's established U.S. regulatory pathway provides a more straightforward implementation route.

Operationally, NuScale's progress with its supply chain, particularly with Doosan Enerbility , further differentiates it. Doosan Enerbility (DNNGY) has the stated capacity to produce up to 20 NuScale Power Modules per year, and NuScale has already ordered long-lead materials for 12 modules, demonstrating a proactive approach to manufacturing readiness that no other SMR company has matched. This supply chain engagement, cultivated over seven years, positions NuScale to meet anticipated orders and accelerate delivery schedules, a crucial factor in a market demanding rapid deployment.

Financial Performance and Strategic Investments

NuScale's financial trajectory reflects its transition from an R&D-intensive phase to commercialization. For the nine months ended September 30, 2025, the company reported revenue of $29.67 million, a substantial increase from $2.82 million in the prior-year period. This growth was primarily driven by engineering and licensing fees and services related to the RoPower project in Romania. However, the company also reported a net loss attributable to Class A Common Stockholders of $304.97 million for the nine months ended September 30, 2025, compared to $61.65 million in the prior year. This significant loss was largely influenced by a one-time expense of $495.02 million recognized in General and administrative (G&A) expenses during the third quarter of 2025. This expense stemmed from Milestone Contribution 1 of the Partnership Milestones Agreement (PMA) with ENTRA1, triggered by ENTRA1's non-binding agreement with TVA for 72 NPMs.

Despite these substantial strategic cash outlays, NuScale has maintained a robust liquidity position. As of September 30, 2025, the company's overall liquidity, including cash and cash equivalents and short-term investments, stood at $753.8 million. This was significantly bolstered by the sale of 13.2 million Class A shares through an aftermarket program, generating $475.2 million in gross proceeds during the third quarter of 2025. The company's disciplined cash management is evident in its reduced average quarterly operating expenses, which decreased from $69.9 million in 2023 to $42.7 million in 2024, representing annualized savings of over $108.6 million. Management believes it has sufficient liquidity to cover its cash requirements for the next 12 months and beyond, aiming to maintain approximately two years of operating runway.

Outlook and Growth Catalysts

NuScale's outlook is characterized by a strong conviction in its commercialization pathway. The company is actively forecasting "hard contracts" with U.S.-based customers by the end of 2025. A pivotal development is the agreement between ENTRA1 and TVA to deploy up to 6 gigawatts of new nuclear capacity using NuScale's SMR technology, representing approximately 72 NPMs. NuScale anticipates the first ENTRA1 energy plant to deliver power to TVA as early as 2030, with additional plants phased in as demand grows. The RoPower project in Romania continues to progress, with a Class 3 estimate expected by fall 2025, and a final investment decision (FID) now anticipated in late 2026 or early 2027.

Management expects operating expenses to increase in the second half of 2025, a strategic investment to further enhance manufacturing and supply chain readiness by purchasing additional long-lead materials. This proactive approach is designed to get ahead of potential bottlenecks and ensure timely delivery for anticipated commercial orders. The Partnership Milestones Agreement (PMA) with ENTRA1 is viewed as a critical catalyst for commercialization, with NuScale's milestone payments designed to accelerate project development and unlock financing for ENTRA1. The company expects the third milestone payment under the PMA, related to Original Equipment Manufacturing (OEM) agreements, to be net cash positive for NuScale, as it will coincide with revenue from module production.

Risks and Challenges

Despite the compelling growth narrative, NuScale faces several key risks. The commercialization strategy's heavy reliance on relationships with ENTRA1, Fluor (FLR), and other strategic partners introduces dependency risk, as diverging interests or termination of these relationships could materially impact the business. The Partnership Milestones Agreement (PMA) with ENTRA1, while strategic, involves significant cash outlays in the near term without guaranteeing immediate revenue-generating activities. Should binding purchase power agreements not materialize, NuScale would incur these milestone contributions without a direct revenue return, adversely affecting its financial condition.

Furthermore, changes in U.S. trade policy, including the imposition of new or increased tariffs, could raise costs and delay the delivery of long-lead time components manufactured overseas, potentially impacting margins or requiring price increases. The company's activities are also subject to the inherent uncertainties of securing funding to sustain operations until full commercialization and customer acquisition. While NuScale has a strong liquidity position, the ongoing need for capital to fund growth and strategic initiatives remains a factor for investors to monitor.

Conclusion

NuScale Power stands at a pivotal juncture, poised to capitalize on its unparalleled regulatory leadership and technological innovation in the burgeoning SMR market. The company's NRC-approved 77 MWe NPM, coupled with a robust supply chain and strategic partnership with ENTRA1 Energy, provides a compelling investment thesis for those seeking exposure to the future of clean, reliable energy. The landmark TVA agreement and the increasing demand from AI data centers underscore the immense market opportunity that NuScale is uniquely positioned to address.

While significant strategic investments and the inherent complexities of large-scale energy projects present risks, NuScale's disciplined financial management and clear commercialization roadmap offer a balanced outlook. The anticipated "hard contracts" by year-end 2025 and the long-term vision for phased SMR deployment signal a transformative period for the company. NuScale's commitment to technological leadership and its ability to execute on its commercial strategy will be critical determinants of its success in igniting the SMR revolution and delivering sustainable value to shareholders.