NuScale Power

Phase A — Understand the business

Company Overview

NuScale designs and is trying to commercialize a small modular nuclear reactor (SMR) — the NuScale Power Module (NPM), a 77 MWe (gross) integral light-water reactor that is factory-built, ships as a single vessel, and scales in 4 / 6 / 12-module plants (308 / 462 / 924 MWe). The pitch: passive safety (no operator action, AC/DC power, or added water needed to keep it safe indefinitely), a small site-boundary emergency-planning zone, and — crucially — regulatory certainty. NuScale's design is the only SMR ever to receive a Standard Design Approval (SDA) from the U.S. NRC: a 50 MWe / 12-module design certified in 2020, and a 6-unit, 77 MWe design approved May 2025.

The catch is that there is no product revenue yet. The company "operates in one reportable segment," and "all significant revenue generated to date arises from engineering and licensing fees and services provided to potential customers, with the end goal of selling NPMs". FY2025 revenue was $31.5M, almost entirely engineering/licensing — i.e. NuScale is a pre-commercial company selling design work, not power plants. The first NPM is targeted for commercial operation ~2030.

Customers / channel — the load-bearing fact. As of 2025, NuScale routes essentially its entire commercial future through ENTRA1 Energy LLC, its "exclusive global strategic partner for the commercialization and development of power plants utilizing NPMs," which is also its prospective customer (NuScale is "key supplier" to ENTRA1 projects). ENTRA1 holds global exclusive rights to commercialize, distribute, deploy, finance, own and operate NuScale plants. The two also run a 50/50 JV, ENTRA1 NuScale LLC. The only named direct international customer is RoPower (Romania). Domestically, the marquee is the TVA / ENTRA1 6-GW agreement (Sept 2025) and Standard Power (2 GW, Ohio + PA, data centers).

Suppliers: Doosan Enerbility (Korea) fabricates NPM sub-assemblies and is an investor; long-lead material (heavy forgings, steam-generator tubes, weld material) is manufactured in South Korea. Fluor (NYSE: FLR) was the historical majority owner, EPC partner, and — through 2025 — the dominant revenue counterparty.

Contract structure: fixed-price engineering/licensing contracts recognized as performance obligations complete; heavily concentrated and lumpy. The NPM "sales" are not yet binding — they are non-binding agreements and milestone term sheets routed through ENTRA1 (see Lens 3 / Lens 10).

Supply Chain

Upstream inputs → NuScale → end customer, with named stakeholders:

• Fuel: conventional low-enriched uranium (LEU) — same fuel cycle as the legacy LWR fleet; NuScale does not require HALEU (a structural advantage over Oklo / X-energy, whose fuel supply is a bottleneck).
• Heavy forgings / reactor vessel / steam generators: long-lead material melted, heat-treated and machined; manufactured in South Korea. LLM work-in-process on the balance sheet was $63.8M at 2025-12-31.
• Module fabrication: Doosan Enerbility (Changwon, South Korea) — sub-assembly manufacturing, also an equity investor.
• EPC / engineering: historically Fluor Enterprises (related party) — Doicesti FEED Phase 2 ran through Fluor with NuScale as subcontractor.
• Commercialization / project developer / owner-operator: ENTRA1 Energy — develops, finances, owns and operates the plants.
• End buyers (paper, not contracts): TVA (6 GW), Standard Power → data-center load (Ohio/PA), RoPower/Nuclearelectrica (Romania, Doicesti coal-site conversion).

Chokepoints / single-source dependencies: (1) NRC licensing — every plant still needs a construction permit + operating/combined license per project even with the SDA done; (2) Korean heavy-forging supply for the pressure vessel — a single geographic concentration; (3) and most acutely, ENTRA1 as a single channel — NuScale has contractually handed exclusive global commercialization to one counterparty. This lens is not generic: the chain is real and named, but the demand end of it is a single, thinly-staffed intermediary (Lens 10).

Competitive Advantages (moats)

Real moat #1 — regulatory. NuScale is the only SMR with NRC SDA (twice: 50 MWe in 2020, 77 MWe in May 2025). The first SDA took 41 months — the fastest NRC reactor approval ever — and cost ~$500M in testing/engineering plus ~$130M responding to NRC RAIs over 250,000 review hours. No other SMR/advanced-reactor developer has even applied for an SDA. This is a genuine, expensive, time-based barrier — a customer can reference the approved design and skip years of design-certification risk. It is the single best thing about the equity.

Real moat #2 — IP + light-water lineage. 513 patents issued + 268 pending (781 total); 428 employees, 22 PhDs. The reactor is built on 60+-year-old proven LWR physics and conventional LEU fuel — lower technology risk than fourth-gen competitors.

Where the moat is thinner than bulls claim: (a) The SDA is for the design; it is not an order book and not a deployed plant. No NuScale reactor is under construction anywhere as of mid-2026. (b) Bargaining power is inverted. NuScale needs ENTRA1 (its only channel) far more than ENTRA1 needs NuScale — ENTRA1 "retains sole and full discretion to select, contract with, or purchase from NuScale", yet NuScale must pay ENTRA1 milestone "consideration" regardless. (c) Competitors are closing the regulatory gap fast: GE Vernova Hitachi BWRX-300 is physically under construction at OPG Darlington (Canada) since May 2025, targeting 2029-30 — likely the first Western SMR to actually operate — and TVA's BWRX-300 at Clinch River is in NRC review; Holtec SMR-300 had its construction-permit application accepted by the NRC (Feb 2026); X-energy Xe-100 has Amazon backing and a Dow Seadrift project. NuScale's lead is in paper approval; rivals may win the race to concrete.

Segments

One reportable segment — SMR commercialization. Revenue disaggregation by service (FY, $000s):

Geography: predominantly U.S. operations; LLM manufacturing in South Korea; the only international customer revenue is Romania (RoPower) via the Fluor subcontract.

Customer concentration is extreme. Revenue from Fluor (related party) was 76.0% of total in FY2025 (11.4% FY24, 74.1% FY23). The trend is decelerating and now collapsing: FY25 revenue fell 15% YoY, and Q1 2026 revenue was $0.565M vs $13.4M in Q1 2025 — down 95.8%, with $0 from Fluor as the Doicesti FEED Phase 2 contract finished. The "segment" is, in effect, a project-services shop that just ran out of project. There is no recurring revenue base — only the promise of future NPM sales.

---

Phase B — Measure performance

Earnings Result (Q1 2026, the latest print)

• Revenue: $0.565M vs ~$5.0M consensus — an ~88.6% negative surprise; −95.8% YoY.
• Net loss: $46.7M (vs $30.4M Q1 2025). EPS −$0.14 vs −$0.13 expected.
• Balance sheet: cash $341.1M (down from $836.4M at YE25), ST investments $549.0M, long-term investments $118.6M → total liquidity ~$1.01B, no debt. The cash drop is largely the $259.9M ENTRA1 Milestone 1 payment settled in Q1 2026 (the second tranche of a $507.4M obligation), plus rotation of cash into investments.
• Accumulated deficit: $776.9M at 2026-03-31 (from $732.9M at YE25).
• Guidance/tone: management frames a "fortress balance sheet," reiterates first power ~2030, and targets operating-cash-flow positive by end-2026 — contingent on signing definitive PPAs and equipment contracts. That contingency is doing enormous work; on a $0.6M revenue quarter, OCF-positive by year-end is a heroic ask.
• Market reaction: shares fell ~8.7% after the print — the latest leg of an 82% drawdown from the Oct-2025 ATH.

Flag vs own history: the FY2025 net loss of $664.5M is dominated by a one-time $507.4M ENTRA1 Milestone 1 expense booked in G&A (which is why FY25 G&A ballooned to $609.8M from $75.9M). Strip that out and the underlying operating loss is ~$155-180M — still large relative to ~$31M revenue, but the headline loss is a milestone-accounting event, not a cash incinerator in the normal sense. The cash side, however, is real: that $507.4M is being paid ($247.5M in 2025 + $259.9M in Q1 2026) to ENTRA1.

Earnings Calls (sentiment trend)

No transcripts on the shelf (transcripts/ empty); sentiment from web.

• Q4-25 / FY25 call (Feb 2026): triumphant — second SDA approved, TVA "largest SMR program in U.S. history," $25B ENTRA1 agreement, Standard Power. The narrative is order momentum.
• Q1-26 call (May 2026): defensive — "revenue miss overshadows strategic wins". Management pivots to liquidity ("fortress balance sheet," "$1.2B"), supply-chain expansion, and TVA progress, and leans on the future (OCF-positive by end-2026) to deflect a 95% revenue collapse.
• Tone shift: from "we have the approvals and the demand" (2025) to "we have the balance sheet to survive to commercialization" (2026). The thing they've stopped emphasizing: near-term revenue. The thing they've started emphasizing: liquidity and runwayRunwayHow long the cash lasts at the current rate of spending. It shortens the moment spending rises, which is why a figure taken from a quiet quarter flatters.. That is the language of a company that has realized the market re-rated it from a growth story to a survival story.

Comps

Pre-revenue SMR developers do not support P/E or EV/EBIT — they have no E. The honest peer frame is valuation vs (near-)zero sales and regulatory/deployment stage. Multiples or n/a.

Stock-Price Catalysts (moves >5%, last ~year)

• May 2025 — NRC approves 77 MWe SDA: the legitimizing catalyst; began the run.
• Sept 2025 — TVA/ENTRA1 6-GW agreement ("largest in U.S. history") + the $25B ENTRA1 infrastructure agreement: stock ran toward the $53.43 ATH (Oct 15, 2025).
• Nov 6-10, 2025 — Guggenheim report on ENTRA1 + disclosure of $495M milestone payment: stock −12.4% over two days ($32.46 → $28.43). This is the inflection — the moment the market re-priced ENTRA1 risk.
• Q1 2026 print (May 7, 2026): −~8.7% on the 95% revenue miss.
• Early June 2026 — analyst target cuts: Citi reiterated Sell, $9→$7; Goldman Neutral, $10→$9; UBS $20→$13; Northland $19.

Pattern: this name trades on (1) NRC milestones and (2) headline "order" announcements via ENTRA1, and it falls hardest on anything that questions ENTRA1's substance or the cash cost of those orders. The market reacts to narrative legitimacy, not to financials — there are no financials to react to. Net: from $53.43 (Oct 2025) to ~$9.88 (Jun 2026), an ~82% drawdown.

---

Phase C — Judge people & books

Management

• CEO John Hopkins — in the chair since Dec 2012 (~13.5 yrs). Track record: he steered NuScale through both NRC approvals and the 2022 SPAC listing (via Spring Valley) — a genuine regulatory achievement. But the signature commercial event on his watch, the 2023 cancellation of the UAMPS/Carbon Free Power Project (the flagship 6-module Idaho plant, killed on cost escalation), is the original sin: it forced the pivot from a real first customer to the ENTRA1 channel. The wind-down still echoes (the $5.1M restricted-cash letter of credit and the LLM settlement).
• Comp / skin in game: Hopkins total comp ~$4.08M, 84.5% bonus/equity-weighted, base ≥$600K. CODMs are CEO/CCO/CFO managing to "Net loss".
• Capital allocation: the defining decision is the ENTRA1 PMA — paying a counterparty up to ~$3.4B in milestone "consideration" (Lens 10) to commercialize, while funding it with relentless ATM dilution: 57.1M Class A shares sold in FY2025 for $1.30B net, management explicitly "took advantage of a rising stock price". Weighted Class A shares went 73.4M (2023) → 93.2M (2024) → 163.7M (2025); shares outstanding reached 318.5M by Q1 2026 against 662M authorized (raised from 332M in Dec 2025). They have ~$962M of ATM headroom left — i.e. capacity to issue ~97M more shares at current prices.
• Board: added Stuart A. Harshaw and Dale E. Klein (a former NRC chairman) May 2026 — credible nuclear governance signal.
• Archetype: professional manager / regulatory operator, not a founder-owner. Strong at navigating the NRC; the open question is whether he negotiated a good deal with ENTRA1 or handed away the commercial upside to survive after CFPP died.

Forensic Red Flags

Accounting: The books are clean in the GAAP sense (no SEC LR/AAER — see below), but two structures demand scrutiny:

1. The ENTRA1 "consideration paid to a customer" accounting. Under ASC 606, NuScale treats milestone payments to ENTRA1 as consideration paid to a prospective customer. Milestone 1 (15% of the total) was triggered by ENTRA1 entering a non-binding agreement for 72 NPMs, producing a $507.4M expense ($247.5M paid 2025, $259.9M paid Q1 2026). NuScale determined M1 does not meet ASC 606 capitalization criteria → expensed, not an asset. Translation: NuScale paid out half a billion dollars in cash for a non-binding term sheet, and its own auditors agree it created no asset. Milestone 2 (35%, on a binding PPA/off-take) and Milestone 3 (50%, on a binding OEM agreement) remain — implying a total milestone obligation of ~$3.38B, with ~$2.87B still to come. That remaining exposure is ~3x current total liquidity and would have to be funded by issuing stock.
2. Revenue recognition on lumpy fixed-price contracts with variable consideration constrained under GAAP — judgmental, but the amounts are now trivial ($0.6M/qtr).

Cash vs earnings: the FY25 headline loss overstates cash burnCash burnHow much more cash goes out than comes in, per period. The clock on a company with no profits. (the $507.4M M1 is partly non-cash timing), but the structural operating loss (~$155-180M ) and the milestone cash outflows are real. Minimal capexCapital expenditureMoney spent on long-lived things — buildings, machines, servers — rather than on running costs. — this is a labor + IP business (labor $77.2M FY25).

Regulatory findings (required):

• SEC: "No LR or AAER found for NuScale Power" across 2021-06-30 to 2026-06-30 (EDGAR EFTS, LR + AAER).
• Securities-fraud class action — LIVE and material. Truedson v. NuScale Power Corporation et al., No. 3:26-cv-00328 (D. Oregon), asserting §10(b)/§20(a) claims. The core allegation: NuScale misrepresented ENTRA1's qualifications and failed to disclose the scale of its milestone-payment exposure (the $495M Q3-25 payment + >$3B potential). The catalyst was a Guggenheim Securities report (Nov 2025) calling ENTRA1 "a 3-year-old company that has never built, financed or operated anything," with "3 employees and 1 investor," better described as "an entity supporting the activities of a single individual, Mr. Habboush". Lead-plaintiff deadline was April 20, 2026. This is the single most important risk in the file — it goes to whether the entire commercial channel is real.
• 10-K Item 3 (Legal Proceedings): the 10-KForm 10-KA company’s audited annual report to the US regulator. The most complete thing it publishes. (filed before the suit consolidated) treats legal matters as ordinary-course; the class action post-dates much of it — a refresh should track the docket.
• Related-party density: Fluor (76% of FY25 revenue, TRA, exclusivity unwind, share exchanges) and ENTRA1 (the 50/50 JV + the PMA) mean a large share of both revenue and the biggest expense flow through affiliated/strategic parties.

(Carried) — nothing further; Lens 10 is the crux of the bear case.

---

Phase D — Project & stress-test

Forward Projection (EPS, FY2026-FY2028)

A bottom-up EPS model here is close to meaningless — NuScale has no revenue base to grow and its loss is dominated by milestone timing it cannot precisely forecast. So the honest projection is a scenario on cash and dilution, not a point EPS:

• Base (most likely): FY26 revenue ~$30-75M; structural operating loss ~$150-200M/yr ex-milestones; no Milestone 2/3 triggered in FY26 (no binding PPA signed yet) → net loss ~$160-200M, EPS ~−$0.50 to −$0.65 on ~320M+ shares. Runway: ~$1B liquidity ÷ ~$200M structural burn ≈ ~4-5 years if no further milestone payments. First NPM power ~2030 → first NPM-sale revenue is ~4 years away.
• Bull: a binding PPA (TVA or Standard Power) is signed → triggers Milestone 2 (35% ≈ $1.18B), which paradoxically spikes the loss and the cash outflow but validates the channel and re-rates the equity on order conviction. Revenue ramps toward equipment/long-lead deliveries 2027-29.
• Bear: no binding PPA materializes; TVA/Standard Power stay non-binding; ENTRA1's substance is impugned by the litigation; the stock stays sub-$10, the ATM becomes dilutive-at-the-lows (issuing ~97M+ shares near $9.88 to fund opex), and NuScale becomes a perpetually-diluting pre-revenue shell with a great approval and no deployed plant.

I am not logging a Brier forecast (our model create skipped per --watchlist rules — no genuine committed base case on an EPS line for a pre-revenue name). The scoreable binary, if/when promoted to a thesis, is: "NuScale signs a binding PPA or OEM agreement (Milestone 2 trigger) by 2027-12-31" — that is the event that converts the whole story from paper to product.

Bull vs Bear

Bull case. NuScale owns the one thing nobody else has: a completed, twice-approved NRC design. In a world where AI data centers, reshoring and electrification are driving the largest power-demand surge in decades, a certified SMR is a call option on the cleanest, most-grid-friendly form of always-on baseload. The TVA 6-GW program (72 NPMs) and Standard Power (2 GW) and the $25B ENTRA1 agreement are exactly the kind of demand that, if any single one converts to a binding PPA, re-rates the equity violently. The balance sheet (~$1B, no debt) buys ~4-5 years of runway to get there. With the stock down 82% and Dale Klein (ex-NRC chair) on the board, the risk/reward improves the closer it gets to a binding order.

Bear case (the 2-3 things that can permanently impair it).

1. The channel may be hollow. NuScale's entire commercial future is intermediated by ENTRA1 — and a credible sell-side shop (Guggenheim) says ENTRA1 is a 3-person, 1-investor vehicle for a single individual with no track record of building/financing/operating anything. If that is right, the "$25B order book" is term sheets with an entity that cannot execute them, and NuScale has paid ~$500M cash for the privilege.
2. The milestone structure is a wealth transfer. NuScale owes ENTRA1 up to ~$3.4B in "consideration," ~$2.87B still ahead, vs ~$1B liquidity — funded by issuing stock at depressed prices. Even in the bull case (a binding PPA), the immediate consequence is a ~$1.18B Milestone-2 cash outflow.
3. Revenue has gone to zero and the moat is being caught. Q1-26 revenue $0.6M; GE Vernova's BWRX-300 is pouring concrete while NuScale's first plant is ~4 years out and not yet financed.

Pre-mortem (18 months on, thesis broke): No binding PPA was signed; the Truedson securities case survived a motion to dismiss and forced restated disclosure on ENTRA1; the stock drifted to $5; NuScale kept the lights on via dilutive ATM issuance, doubling the share count again; the "order book" was quietly reframed as "framework agreements." The certified design is now a licensing asset others build around, not a product NuScale sells.

Are multiples too high? Yes — unambiguously, on any near-term basis. ~86x EV/Sales on shrinking revenue is a 2030+ optionality price, not a fundamentals price. The only justification is the embedded call option on certification + the demand wave.

Contrarian view (what the market may be refusing to see, both ways): Bears assume ENTRA1 is fatal; but the structure (an external developer that finances/owns/operates the plants) is arguably the right capital-light model for a company that cannot itself fund $20B of plants — it offloads the balance sheet that killed CFPP. The market may be conflating "ENTRA1 looks flimsy today" with "the channel model is wrong." If ENTRA1 (or a designated affiliate / strategic) lands one binding utility PPA, the same structure the bears hate becomes the bull thesis. The honest read: this is binary and event-driven, and you do not have to own it before the binding-order event.

Devil's Advocate (short-seller)

Dismantling the bull case:

• Revenue concentration → zero. 76% of FY25 revenue was one related party (Fluor); when that contract finished, revenue fell 95.8% to $0.6M. There is no business here today — only a design and a balance sheet.
• The moat is regulatory, but the race is physical. "Only NRC-approved" is true and irrelevant to who powers a data center first — GE Vernova is under construction (Darlington); NuScale has no plant under construction anywhere.
• Most dangerous competitor bulls underrate: GE Vernova/Hitachi (BWRX-300) — a profitable industrial parent, an actual construction project, and TVA's own BWRX-300 application at Clinch River. TVA is hedged across NuScale/ENTRA1 and GE Vernova and Holtec — TVA's 6-GW "agreement" is a portfolio of options, not a NuScale lock-in.
• Worst capital-allocation move: paying ~$507M cash to ENTRA1 for a non-binding 72-NPM term sheet, with ~$2.87B more owed, while the company has never sold a reactor — and funding it by dumping 57M shares into a stock spike. Add the related-party web (Fluor TRA, ENTRA1 JV) and the incentive alignment is murky.
• What must hold for today's ~$3.7B price: (a) ENTRA1 is real and can finance/build multi-GW plants; (b) at least one binding PPA converts; (c) NRC project-level licensing proceeds on schedule; (d) the ATM doesn't crush the equity first. If FY revenue disappoints 20-30% vs the ~138% consensus, there is essentially no valuation support — you cannot compress an 86x multiple on a sub-$75M revenue base without a much lower price.
• Single scenario that permanently impairs: the litigation forces disclosure that ENTRA1 cannot execute the agreements, the "$25B order book" evaporates, and NuScale is revealed as a certified design with no deployment path and a depleting cash pile. Plausibility: moderate, not negligible — that is precisely why a court is hearing it.

Management Questions (ordered by information value)

1. ENTRA1 has reportedly ~3 employees and one investor — concretely, how will it finance and build multi-GW plants, and what binding financial commitments back the TVA and Standard Power agreements today?
2. Of the $3.38B total milestone obligation to ENTRA1, how much remains, and how will you fund Milestone 2/3 (~$2.87B) without massive dilution at current prices?
3. What are the specific conditions that convert the TVA 6-GW and Standard Power 2-GW non-binding agreements into binding PPAs, and what is your honest probability/timeline for the first one?
4. You target operating-cash-flow positive by end-2026 — on a $0.6M-revenue quarter, exactly what revenue and contract events get you there, and what happens to that target if no PPA is signed?
5. Why was Milestone 1 ($507M) structured to trigger on a non-binding agreement, and why is it appropriate to pay cash for consideration your own auditors say is not an asset?
6. What is your realistic runway, and at what share price / cash level do you stop using the ATM?
7. How do you assess the risk that GE Vernova's BWRX-300 deploys before your first NPM, given they are already under construction and you are not?
8. TVA signed with you/ENTRA1 and GE Vernova and Holtec — what makes you confident TVA builds NuScale modules rather than treating you as one option in a portfolio?
9. Doosan/Korea is your heavy-forging single source — what is the second-source plan and the cost/schedule exposure?
10. What does the Truedson securities litigation mean for your disclosure practices, and have you changed how you characterize ENTRA1's capabilities?
11. RoPower/Doicesti FID is now mid-to-late 2026 / early 2027 with an 18-24 month pre-works stage and 69-78 month build — when does Romania actually generate NPM-sale (not engineering) revenue for you?
12. With Fluor's exclusivity unwound and TRA halved, what is Fluor's go-forward role, and does its reduced commitment signal anything about confidence in the model?
13. The 77 MWe SDA is approved — what is the realistic construction-permit + operating-license timeline for the first U.S. plant, and who is the first U.S. site?
14. How should investors value a company at ~86x EV/sales on shrinking revenue — what is the milestone path that justifies the current market capMarket capitalisationThe share price multiplied by the number of shares. What the market says the equity is worth.?
15. If the next two years bring no binding order, what is Plan B — license the design to others, sell the company, or keep diluting?

---