Industry Overview - Centrus Energy (LEU) and Energy Fuels Inc. (UUUU) are key players in the U.S. uranium industry, poised to benefit from the global shift towards nuclear energy as a clean power source [1] - Uranium prices have recently recovered to approximately $73.50 per pound, driven by increased optimism in nuclear power investments from major countries [2] - India aims to expand its nuclear capacity by 13 times by 2024, while the U.S. plans to increase its nuclear energy capacity from about 100 GW in 2024 to 400 GW by 2050 [2] Centrus Energy (LEU) - Centrus Energy supplies components of nuclear fuel, particularly Low-Enriched Uranium (LEU), to commercial customers [4] - In Q2 2025, Centrus reported total revenues of $155 million, an 18% decline year-over-year, with LEU segment revenues down 26% to $125.7 million [6] - The company has a $3.6 billion revenue backlog from long-term contracts with major utilities through 2040 [7] - Centrus is the only U.S. company licensed for High-Assay Low-Enriched Uranium (HALEU) production, with a contract extension from the DOE allowing production through June 30, 2026 [8] - The HALEU market is projected to grow from $0.26 billion in 2025 to $6.2 billion by 2035, prompting Centrus to expand production capacity [11] Energy Fuels Inc. (UUUU) - Energy Fuels has been a leader in U.S. uranium production, accounting for about two-thirds of the output since 2017 [12] - The company reported Q2 revenues of approximately $4.2 million, a 52% year-over-year decline, primarily due to lower uranium sales [15] - Energy Fuels aims to mine between 875,000 and 1,435,000 pounds of uranium in 2025, with plans to process up to 1 million pounds this year [18] - The company expects to lower its cost of goods sold to approximately $23–$30 per pound of uranium, positioning itself among the lowest-cost producers globally [19][20] - Energy Fuels is also diversifying into rare earth elements (REEs) and has achieved significant milestones in producing dysprosium oxide [13] Financial Estimates and Performance - The Zacks Consensus Estimate for Centrus Energy's 2025 revenues is $451.4 million, indicating a 2.1% growth, while UUUU's 2025 revenues are estimated at $40.8 million, reflecting a 48% drop [22][23] - Centrus Energy's stock has surged 166.2% year-to-date, while Energy Fuels has gained 83.3% [26] - Centrus is trading at a forward price-to-sales multiple of 6.66X, while Energy Fuels is significantly higher at 22.49X [27] - Centrus Energy's earnings estimates have moved higher for both 2025 and 2026, contrasting with downward revisions for Energy Fuels [24][29]

Core Insights - Mr. Mavroudis is a professional portfolio manager with a focus on risk management and in-depth financial market analysis [1] - He has successfully navigated major crises, including the COVID-19 pandemic and the PSI [1] - Mr. Mavroudis is the CEO of FAST FINANCE Investment Services, a registered Greek company [1] Professional Background - Mr. Mavroudis holds multiple degrees, including an MSc in Financial and Banking Management, an LLM in Law, and a BSc in Economics, graduating as valedictorian [1] - He is a certified portfolio manager and holds various certifications related to financial instruments, derivatives, and securities [1] - He is also a licensed Class A accountant-tax consultant and a member of the Economic Chamber of Greece [1] Contributions and Engagement - Mr. Mavroudis writes daily articles for reputable financial media and appears as a guest commentator on television and online programs [1] - He has published three books on investments and teaches in educational seminars [1] - By writing on Seeking Alpha, he aims to engage with a community of investors and market enthusiasts, fostering mutual growth and knowledge sharing [1]

Core Insights - Centrus Energy (LEU) experienced a challenging second quarter in 2025, with a significant decline in its Low-Enriched Uranium (LEU) segment due to the absence of uranium sales, leading to an overall revenue drop of 18% [1][2][10] Group 1: Financial Performance - The LEU segment saw a 26% decrease in revenues and a 27% decline in sales volumes of Separative Work Units (SWU), despite a 24% increase in SWU prices, which was not enough to compensate for the volume shortfall [1][2] - In contrast, the first quarter of 2025 had shown strong performance for Centrus Energy, with LEU revenues increasing by 117% to $51.3 million, driven by a 46% rise in SWU prices and a 49% increase in sales volumes [3] - For the full year of 2024, Centrus Energy reported a total revenue increase of 30% to $349.9 million, with uranium revenues rising by 70% and SWU revenues by 19% [3] Group 2: Order Backlog and Future Prospects - As of June 30, 2025, Centrus Energy reported a backlog of $3.6 billion extending through 2040, with approximately $2.7 billion related to the LEU segment, indicating strong future revenue potential from medium and long-term contracts [4][10] - The backlog includes about $2.1 billion in contingent LEU sales commitments, reflecting a solid order pipeline despite current challenges [4] Group 3: Market Comparison - Peer company Cameco Corporation (CCJ) performed better in the second quarter, with total revenues increasing by 47% year over year to $634 million, and uranium revenues also rising by 47% to $510 million [5][6] - Cameco sold 8.7 million pounds of uranium, a 40% increase compared to the same quarter in 2024, despite a 17% decline in the average U.S. dollar spot price for uranium [6] Group 4: Stock Performance and Valuation - Centrus Energy's stock has surged by 167.6% in 2025, significantly outperforming the industry growth of 3.2%, the Basic Materials sector's rise of 14.7%, and the S&P 500's gain of 9.6% [9][10] - The company is currently trading at a forward 12-month price/sales multiple of 6.90X, which is a substantial premium compared to the industry's 2.74X [11] Group 5: Earnings Estimates - The Zacks Consensus Estimate for Centrus Energy's 2025 earnings is $4.24 per share, reflecting a year-over-year decline of 5.15%, with a further decline projected for 2026 to $3.36 per share, indicating a 20.8% decrease [12]

Core Viewpoint - Centrus Energy Corp. has announced the pricing of $700 million in 0% Convertible Senior Notes due 2032, increasing the offering size from a previously announced $650 million, with an option for initial purchasers to buy an additional $105 million [1][7]. Group 1: Offering Details - The Notes will not bear regular interest, and special interest will accrue under specific circumstances as described in the offering memorandum [2]. - The Notes will mature on August 15, 2032, unless repurchased, redeemed, or converted earlier [2]. - The conversion rate for the Notes is initially set at 4.3551 shares of Class A common stock per $1,000 principal amount, equating to a conversion price of approximately $229.62 per share, representing a 22.5% premium to the last reported sale price on August 13, 2025 [3]. Group 2: Redemption and Repurchase Rights - Centrus cannot redeem the Notes before August 20, 2029, but may do so thereafter if certain stock price conditions are met [4]. - Holders of the Notes have the right to require Centrus to repurchase their Notes upon the occurrence of a fundamental change at a price equal to 100% of the principal amount plus any accrued special interest [5]. Group 3: Financial Implications - The estimated net proceeds from the Offering are approximately $680 million, or $782.1 million if the option for additional Notes is fully exercised, intended for general corporate purposes [7]. - The Notes will rank senior in right of payment to any subordinated unsecured indebtedness and equal to other unsecured indebtedness, while being junior to secured indebtedness [6]. Group 4: Company Overview - Centrus Energy Corp. is a supplier of nuclear fuel and services for the nuclear power industry, having provided over 1,850 reactor years of fuel since 1998, equivalent to more than 7 billion tons of coal [10]. - The company is focused on restoring America's uranium enrichment capabilities and producing High-Assay, Low-Enriched Uranium to meet clean energy and national security needs [11].

Core Viewpoint - Centrus Energy is raising $650 million through convertible senior notes despite having sufficient cash flow and a healthy balance sheet, raising questions about the rationale behind this decision [1][5]. Group 1: Financial Details - Centrus Energy plans to issue $650 million worth of convertible senior notes due in 2032 to fund the development of high-assay, low-enriched uranium (HALEU) for advanced reactors [2]. - If there is enough interest from banks, the offering could be increased by $100 million, totaling $750 million [3]. - The interest rate for the notes has not been disclosed, but such notes typically pay below market rates, which could benefit the company [4]. Group 2: Company Performance - Centrus Energy has generated significant free cash flow of $107 million over the last 12 months, indicating no immediate cash need [5]. - The company currently holds more cash than debt, suggesting a strong financial position [5]. Group 3: Market Reaction - Following the announcement, Centrus Energy's shares fell by 9.9%, indicating investor skepticism regarding the need for the cash raise [1]. - Despite the market reaction, there is speculation that the company may have strategic plans for its HALEU business, which could justify the capital raise [6].

Core Viewpoint - Centrus Energy Corp. plans to offer $650 million in Convertible Senior Notes due 2032, with an option for an additional $100 million, aimed at qualified institutional buyers, to support its corporate purposes [1][4]. Group 1: Offering Details - The offering consists of $650 million aggregate principal amount of Convertible Senior Notes, with an option for initial purchasers to buy an additional $100 million [1]. - The Notes will bear interest semiannually starting February 15, 2026, and will mature on August 15, 2032 [2]. - The Notes will be senior, unsecured obligations of Centrus, convertible under specific conditions before May 15, 2032, and freely convertible thereafter [3]. Group 2: Use of Proceeds - Centrus intends to use the net proceeds from the offering for general corporate purposes [4]. Group 3: Company Background - Centrus Energy is a supplier of nuclear fuel and services, having provided over 1,850 reactor years of fuel, equivalent to more than 7 billion tons of coal since 1998 [7]. - The company is focused on restoring uranium enrichment capabilities and producing High-Assay, Low-Enriched Uranium to meet clean energy needs [8].

Core Insights - Centrus Energy (LEU) reported a 12% increase in stock price following its Q2 2025 results, which exceeded market expectations despite a year-over-year decline in revenues and earnings [1][7] - The company's progress on the High-Assay, Low-Enriched Uranium (HALEU) Operation Contract with the U.S. Department of Energy (DOE) is a significant growth driver [1][19] Financial Performance - Centrus Energy's Q2 2025 total revenues were $155 million, surpassing the Zacks Consensus Estimate of $136 million, but reflecting an 18% decline from $189 million in the previous year [12] - The LEU segment's revenues fell 26% year-over-year to $125.7 million, attributed to no uranium sales and a 27% drop in sales volumes of Separative Work Units (SWU), partially offset by a 24% increase in SWU prices [12][14] - Technical Solutions revenues increased by 48% to $28.8 million, driven by a $9.1 million contribution from the HALEU Operation Contract [14] - Earnings per share (EPS) were $1.59, exceeding the consensus estimate of $0.78, but down 16% from the previous year due to increased selling, general, and administrative expenses [15][24] Market Performance - Centrus Energy's stock has surged 251.5% year-to-date, significantly outperforming the non-ferrous mining industry, which saw a 0.9% decline, and the S&P 500's 7.7% increase [2][7] - The company has outperformed peers such as Energy Fuels and Cameco, which gained 89.7% and 48.7% respectively [5][7] Growth Prospects - Centrus Energy has a $3.6 billion revenue backlog, including long-term sales contracts with major utilities through 2040 [15] - The HALEU market is projected to grow from $0.26 billion in 2025 to $6.2 billion by 2035, with Centrus planning to expand production capacity to meet domestic demand [20][19] Debt and Valuation - As of June 30, 2025, Centrus Energy's total debt-to-total capital ratio was 0.55, higher than Cameco's 0.13 and Energy Fuels' debt-free status [21] - The stock is trading at a forward price/sales multiple of 8.57X, significantly above the industry average of 2.63X and its three-year median of 2.24X, indicating a stretched valuation [30][32] Strategic Position - Centrus Energy is the only company licensed for HALEU enrichment by the Nuclear Regulatory Commission, providing a first-mover advantage in a market expected to see increased demand for carbon-free electricity [32]

Core Viewpoint - Enthusiasm for nuclear energy stocks, particularly Centrus Energy, remains high following a strong financial report and positive analyst coverage [1][4]. Company Performance - Centrus Energy's stock rebounded with a 12.8% increase from the end of last Friday's session to Thursday's close, reversing a previous decline of 13.6% [2]. - The company reported Q2 2025 revenue that exceeded analysts' expectations, delivering the contracted amount of high-assay low-enriched uranium (HALEU) to the Department of Energy and showcasing a strong backlog with an extended HALEU contract through June 2026 [4]. Analyst Opinions - Northland analyst Jeff Grampp raised the price target for Centrus from $205 to $275, maintaining an outperform rating, which suggests an upside of 18.3% based on the stock's closing price of $232.39 [5]. - However, there are mixed opinions among analysts, with UBS setting a price target of $215 and Roth Capital at $108, indicating a lack of consensus on the stock's future performance [6]. Industry Context - Centrus Energy is highlighted as one of the few producers of HALEU, making it an interesting option for investors seeking exposure to the nuclear energy sector [7].

Group 1 - Centrus Energy Corp. appointed Todd Tinelli as Chief Financial Officer, effective August 11, 2025, replacing Kevin Harrill who is resigning after a successful four-year tenure [1][2] - Todd Tinelli brings over 20 years of experience in the energy industry, focusing on financial operations, enterprise optimization, and capital allocation to support long-term growth objectives [2][4] - The company aims to restore America's uranium enrichment capabilities at scale, which is crucial for meeting clean energy and national security needs [3][7] Group 2 - Centrus has provided over 1,850 reactor years of fuel since 1998, equivalent to more than 7 billion tons of coal, highlighting its role in the nuclear power industry [6] - The company is pioneering the production of High-Assay, Low-Enriched Uranium, which is essential for advanced reactors and energy security [7] - Todd Tinelli's previous role as CFO at Sprague Resources LP involved managing capital structures for a $4 billion trading and marketing company, showcasing his relevant experience [4][5]

[PART I – FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section provides the unaudited consolidated financial statements and management's discussion and analysis for Centrus Energy Corp [Item 1. Financial Statements](index=10&type=section&id=Item%201.%20Financial%20Statements) This section presents Centrus Energy Corp.'s unaudited consolidated financial statements for Q2 2025 and 2024, including balance sheets, income statements, cash flows, and equity statements [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$1.31 billion** by June 30, 2025, driven by cash and inventories, while equity more than doubled to **$359.1 million** Consolidated Balance Sheet Highlights (in millions) | Financial Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $833.0 | $671.4 | | Inventories | $320.5 | $161.6 | | Total current assets | $1,250.6 | $1,015.2 | | Total assets | $1,314.8 | $1,093.4 | | **Liabilities & Equity** | | | | Total current liabilities | $482.2 | $346.8 | | Long-term debt | $390.0 | $472.5 | | Total liabilities | $955.7 | $932.0 | | Total stockholders' equity | $359.1 | $161.4 | [Consolidated Statements of Operations and Comprehensive Income](index=11&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Net income significantly increased to **$56.1 million** for the six months ended June 30, 2025, despite a slight revenue decrease, due to higher gross profit Statement of Operations Summary (in millions, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $154.5 | $189.0 | $227.6 | $232.7 | | Gross profit | $53.9 | $36.5 | $86.8 | $40.8 | | Operating income | $33.5 | $21.1 | $54.0 | $10.5 | | Net income | $28.9 | $30.6 | $56.1 | $24.5 | | Diluted EPS | $1.59 | $1.89 | $3.22 | $1.52 | [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow significantly improved to **$89.3 million** for the first six months of 2025, contributing to a **$143.0 million** increase in cash and equivalents Cash Flow Summary for Six Months Ended June 30 (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Cash provided by operating activities | $89.3 | $12.3 | | Cash used in investing activities | ($5.7) | ($2.4) | | Cash provided by financing activities | $59.6 | $16.0 | | **Increase in cash, cash equivalents and restricted cash** | **$143.0** | **$25.8** | [Notes to Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes cover accounting policies, revenue recognition, debt, commitments, and segment performance, including HALEU contract updates and TENEX supply risks - The HALEU Operation Contract with the DOE was amended to extend Phase 2 performance to June 30, 2025, and the DOE exercised the first one-year option (Option 1a) for Phase 3, extending the performance period to June 30, 2026, with a funded value of **$108.0 million**[47](index=47&type=chunk) - Total remaining performance obligations were **$0.7 billion** as of June 30, 2025, down from **$0.8 billion** at year-end 2024, with the LEU segment accounting for approximately **$0.6 billion** of this backlog, extending to 2030[51](index=51&type=chunk)[52](index=52&type=chunk) - In March 2025, the company redeemed all of its outstanding 8.25% Notes (**$74.3 million** principal) and recorded a gain of **$11.8 million** on the extinguishment of this debt[63](index=63&type=chunk) - The company is exposed to significant supply risk with its TENEX contract due to the war in Ukraine, the U.S. Import Ban Act, and a Russian Decree that could restrict exports, as TENEX is a major supplier of SWU to the company[97](index=97&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, market conditions, and strategic initiatives, highlighting improved gross profit, HALEU contract progress, and strengthened liquidity [Overview](index=34&type=section&id=Overview) Centrus's LEU and Technical Solutions segments are focused on domestic uranium enrichment, with HALEU contract progress and recent financing activities strengthening its position - On June 25, 2025, Centrus announced it had produced and delivered the **900 kilograms** of HALEU required under Phase 2 of its DOE contract, and the DOE subsequently exercised the first one-year option (Option 1a) for Phase 3, extending the contract to June 30, 2026, with a funded value of **$108.0 million**[129](index=129&type=chunk) - Centrus was selected as an awardee for all three of the DOE's recent RFPs for HALEU production, HALEU deconversion, and LEU production under an IDIQ structure, positioning it to compete for future task orders to expand domestic nuclear fuel supply[131](index=131&type=chunk)[132](index=132&type=chunk) - The company is investing approximately **$60 million** over 18 months to expand its centrifuge manufacturing capacity in Oak Ridge, Tennessee, to support potential large-scale enrichment expansion in Piketon, Ohio[136](index=136&type=chunk) [Market Conditions and Outlook](index=38&type=section&id=Market%20Conditions%20and%20Outlook) The nuclear market faces uncertainty from the U.S. Import Ban Act and a Russian Decree, creating significant supply chain risks for Centrus's TENEX contract - The "Prohibiting Russian Uranium Imports Act" (Import Ban Act), enacted in May 2024, bans Russian LEU imports into the U.S. starting August 11, 2024; the company received a waiver for committed deliveries in **2024 and 2025**, but the status for **2026 and 2027** remains uncertain[151](index=151&type=chunk) - A Russian Decree passed in November 2024 requires TENEX to obtain a specific export license for each LEU shipment to the U.S. through **2025**, creating uncertainty about the timeliness and certainty of future supply[152](index=152&type=chunk) - A U.S. Department of Commerce investigation under Section 232 was initiated in April 2025 to assess if uranium imports threaten national security, which could result in new tariffs or trade restrictions that would increase costs[154](index=154&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Despite a slight revenue decrease, total gross profit surged **113%** to **$86.8 million** for H1 2025, driven by the LEU segment, leading to a **129%** increase in net income Segment Performance for Six Months Ended June 30 (in millions) | Segment | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | | **LEU** | Revenue | $177.0 | $193.2 | (8)% | | | Gross Profit | $81.9 | $33.5 | 144% | | **Technical Solutions** | Revenue | $50.6 | $39.5 | 28% | | | Gross Profit | $4.9 | $7.3 | (33)% | | **Total** | Revenue | $227.6 | $232.7 | (2)% | | | Gross Profit | $86.8 | $40.8 | 113% | - The LEU segment's revenue decrease in H1 2025 was driven by no uranium sales (**$29.9 million** in H1 2024) and a **12% decrease in SWU volume**, partially offset by a **24% increase in the average SWU price**[188](index=188&type=chunk) - The increase in total net income for H1 2025 to **$56.1 million** (from **$24.5 million** in H1 2024) was primarily driven by a **$46.0 million increase in gross profit** and an **$11.8 million gain on debt extinguishment**[210](index=210&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and cash equivalents reached **$833.0 million** by June 30, 2025, bolstered by strong operating cash flow and financing activities, ensuring adequate liquidity - As of June 30, 2025, the company had a cash and cash equivalents balance of **$833.0 million**, with adequate liquidity anticipated for at least the next 12 months[211](index=211&type=chunk) - In H1 2025, the company generated **$89.3 million** in cash from operations, compared to **$12.3 million** in H1 2024[227](index=227&type=chunk)[228](index=228&type=chunk) - The company completed its At The Market (ATM) stock offering, raising total net proceeds of **$140.1 million** in the first six months of 2025[239](index=239&type=chunk) - The company was granted a **$62.4 million** tax credit allocation under the Qualifying Advanced Energy Project Credit (§48C) program for its Oak Ridge manufacturing facility expansion, which it expects to monetize via transfer[221](index=221&type=chunk)[222](index=222&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to the company's market risks have occurred since the last annual report - There have been no material changes to the company's market risks since the 2024 Annual Report on Form 10-K[250](index=250&type=chunk) [Item 4. Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were **effective**[252](index=252&type=chunk) - No changes occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[253](index=253&type=chunk) [PART II – OTHER INFORMATION](index=62&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, other information, and a list of exhibits filed with the Form 10-Q [Item 1. Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) Information on legal proceedings, including lawsuits related to the Portsmouth Gaseous Diffusion Plant, is detailed in Note 11 of the financial statements - Information on legal proceedings is detailed in Note 11, Commitments and Contingencies, within the financial statements[256](index=256&type=chunk) [Item 1A. Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have been reported since the 2024 Annual Report on Form 10-K - There have been no material changes to the Risk Factors described in the company's 2024 Annual Report on Form 10-K[257](index=257&type=chunk) [Item 5. Other Information](index=62&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No directors or executive officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the reported quarter[258](index=258&type=chunk) [Item 6. Exhibits](index=63&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including DOE agreement modifications, TENEX letter agreements, and CEO/CFO certifications - Exhibits filed include several modifications to the agreement with the U.S. Department of Energy, letter agreements with TENEX, and required CEO/CFO certifications[261](index=261&type=chunk)