Good morning, ladies and gentlemen, and welcome to the Centrus Energy Q3 2026 earnings conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, November 5th, 2026. I will now turn the call over to Mr. Neal Nagarajan, Senior Vice President, Investor Relations. Please go ahead.
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 third quarter 2026, ended September 30th. 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 our report for the third quarter on Form 10-Q earlier today. All of our news releases and SEC filings, including our 10-K, 10-Qs, and eight-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, November 5th, 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 express 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 all for joining us today. I am happy to report that Centrus is continuing to build its reputation on meeting its commitments, growing its credibility, which is leading us to capturing more market share. We made significant progress during the third quarter across our commercial, operational, and financial objectives, capped off by the recent completion of our first centrifuge in Oak Ridge, Tennessee, ahead of our year-end target. We now proved that U.S. centrifuge manufacturing is a reality. It is a historic milestone for Centrus and the United States. This landmark occasion was the culmination of a number of other achievements by the team, including the strategic acquisition of one of our key suppliers, Westerman.
This marks us officially locking in all of the suppliers we deem critical, while also completing our first certified for construction packages, two additional 2026 operational targets we have achieved ahead of our year-end target. Furthermore, we grew our enrichment backlog from $3 billion to $5.4 billion and successfully raised funds in a prudent manner that keeps us well capitalized. Finally, we are excited to announce that we are now using the existing 16-centrifuge cascade to enrich HALEU for the commercial market, making Centrus the first U.S.-owned commercial enricher for the market since our gaseous diffusion days.
Against this backdrop, we see continued and growing commercial validation across all three of our addressable markets: commercial LEU for the existing commercial nuclear reactor fleet for baseload electricity, a growing national security imperative that continues to increasingly diversify, and HALEU to support the next-generation reactors that will also require LEU feedstock. It is important to distinguish Centrus' unique opportunity set from those of the broader nuclear market. We are positioned to capitalize on all three of these markets. First, and most importantly, our primary focus is on baseload electricity from contracts with investment-grade utilities. There is a significant existing and growing gap in commercial LEU supply and demand. Remember, much of our long-dated enrichment backlog that runs through 2040 is for LEU to service these existing investment-grade utilities. The second addressable market is for growing national security needs.
A recent U.S. GAO report raised the alarm on the nation's entire domestic nuclear fuel supply chain, in particular the domestic supply chain suitable to meet national security demand. Notably, the report highlighted the government's $37 billion plan to rebuild the unobligated supply chain by 2052. As announced last week, we have confirmed that our supply chain is fully unobligated. Centrus' proven de-risked technology is additionally the only production-ready option for the national security establishment. In this light, we continue to work with the NNSA on its intent to sole source certain uranium enrichment activities from Centrus and stand ready to support this important mission. Then there is the HALEU and advanced reactor market. This market's demand represents an incremental growth opportunity that continues to mature. We have positioned ourselves to capitalize on this potential market if and when it matures to provide ourselves with further optionality.
This optionality includes our flexibility to use plant HALEU capacity for various assays of LEU and LEU+ if needed. Importantly, we are securing prepayments to fund our expansion from the HALEU offtake agreements we are signing. Yet, durable LEU demand for investment-grade reactor operator is what we primarily focused on. We continue to observe this gap between supply and demand widening, driven by uprates, mothballed facilities coming back online, and potential new builds, both in the U.S. and abroad. This widening disparity is demonstrated by the continually increasing spot and long-term contract LEU pricing curves that continue their upward trajectory. Let me now dive into the progress we made against our three objectives. First, turning to our operations. We could not be more excited about last week's event in Oak Ridge, Tennessee, to celebrate our first centrifuge's completion, marking the beginning of our ramping of scaled centrifuge manufacturing.
This important milestone, achieved well ahead of our year-end target, demonstrates that we have successfully stood up our core manufacturing operations in Oak Ridge, including having qualified our process that are tested and proven. The team is now focusing on decreasing the cycle times and increasing throughput rates, reducing inefficiencies, and scaling up our infrastructure alongside our supply chain while hiring and training employees. Furthermore, we are very excited about our recent acquisition of Westerman, which should drive growth for both organizations through commercial and operational synergies, as well as cost savings while de-risking our build-out. The acquisition represents a significant milestone for Centrus.
In one strategic move, we have simultaneously de-risked our build-out by securing a key supplier and best-in-class manufacturer of centrifuge casings and other critical components, captured cost-saving synergies related to Westerman's expansion and tied to our expansion, and de-risked our entire business model in the near and medium term with an established, high-quality industrial fabricator manufacturer with revenues in nuclear and non-nuclear industries. Second, turning to commercial backlog, we saw material growth in third quarter, growing our enrichment backlog to $5.4 billion in contingent LEU and HALEU sales commitments. Our announced agreements with X-energy, Radiant, and Antares all included prepayments to support our build-out. Furthermore, our agreement with X-energy includes production of LEU as a feedstock for HALEU, helping us push more volume through our facility. Finally, our offtake agreements with Radiant and Antares further validate and reinforce our first-mover advantage in the microreactor market.
They also demonstrate our ability to produce unobligated enriched uranium that can also support U.S. national security applications, including defense and space missions. Finally, on the third pillar, financial progress, Centrus secured an additional $500 million with the potential addition of $2 billion in the future. To this end, Centrus ended the quarter with roughly $2.2 billion of unrestricted cash on our balance sheet. Todd will discuss this in more detail shortly. Now moving on to guidance. We are reaffirming our 2026 annual guidance for total company revenue of $450 million-$500 million, as well as our annual capital spend of $350 million-$500 million. We are similarly reaffirming our 2026 annual guidance for Piketon workforce additions to over 175 new hires, as well as our target of new employees at Oak Ridge to at least 100.
With us now having finalized contracts with 100% of the partners we deem critical, we were able to complete and begin shipping our first centrifuge. Our acquisition of Westerman represents another important step in further strengthening our supply chain. We have simultaneously completed our first certified for construction package for Piketon. We will discuss these in more depth at our upcoming investor day this coming December. With that, I will 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. Ahead of walking through our results, I want to first quickly discuss the impact of our recent capital raise. In the third quarter, we recognized a $46.4 million book gain due to a decrease in the liability associated with the valuation of the warrants from our recent capital raise. This was a non-cash impact on our books, but led to a $46.4 million positive impact to the quarter's operating income, net income, and earnings per share that is not part of our due course of business. As such, throughout my comments, the operating income, net income, and earnings per share, excluding the $46.4 million gain, will be referred to as normalized, as will those same adjusted figures that account for growth costs.
Our normalized results were in line with our internal projections and reflected the typical quarter-over-quarter shift in contractual mix that can transpire based on customer orders and deliveries. Our strong financial execution continues to support the execution of our multi-billion dollar domestic enrichment expansion. As noted on previous calls, I will be presenting financials on a quarterly and trailing 12-month basis. Total revenue for the third quarter was $55.5 million, a decrease of $19.4 million, or 26% versus the same period last year. TTM revenue was $454.5 million, ahead of fiscal 2025 revenue. The LEU segment generated $31.8 million in revenue in the third quarter, a 29% decrease versus the same period last year. SWU revenue in the quarter increased by $3.4 million due to a 19% increase in volume of SWU sold and a 10% increase in the average price of SWU sold.
The Technical Solutions segment revenue was $23.7 million in the third quarter, a $6.4 million or 21% decrease over the same period last year, due primarily to a $10.2 million decrease in revenue generated by the HALEU Operation Contract, as well as a change related to other contracts. Centrus generated a loss of $10.6 million and a gross profit of $105.8 million for the third quarter and TTM, respectively, compared to a gross loss of $4.3 million in Q3 2025. The LEU segment's third quarter cost of sales was $38.7 million, a decrease of $13.9 million or 26% over the previous year's period, driven by a decrease in the volume of uranium sold. SWU costs increased as a result of a 28% increase in the average unit cost of SWU sold and a 19% increase in the volume of SWU sold.
Technical Solutions cost of sales of $27.4 million increased $0.8 million or 3% from Q3 2025, primarily attributable to an increase in costs related to customer contracts, partially offset by a $1.7 million decrease in costs incurred under the HALEU Operation Contract. Normalized operating loss for the third quarter was $25.1 million, compared to a loss of $16.6 million in the same period last year. The company generated normalized net loss of $10.2 million and $9.4 million of adjusted net loss in the third quarter, compared to normalized net income of $3.9 million and adjusted net income of $5.2 million, respectively, in Q3 2025. The change in third quarter normalized net loss was primarily attributed to a decrease in income tax benefit of $9 million, an increase in gross loss of $6.3 million, and an increase in advanced technology costs of $3 million.
This change in normalized net loss was partially offset by an increase of $4 million in investment income. On a fully diluted basis, this equates to third quarter 2026 normalized loss per share of $0.49 and adjusted loss per share of $0.46, respectively, compared to $0.19 and $0.25, respectively, in Q3 2025. On a trailing 12-month basis, Centrus generated normalized net income of $34.4 million and adjusted net income of $77.3 million, respectively. Third quarter adjusted net income excludes $2.4 million of growth expenses and a $1.3 million benefit to our SG&A related to our stock compensation, which combined and tax adjusted equates to $800,000. Please refer to our financial results section of our earnings release issued yesterday for reconciliation of net income, normalized net income, and adjusted net income.
Going forward, we continue to expect to have certain level of these type of growth expenses to flow through our income statement as we continue to build out. Centrus backlog across both segments grew to $7 billion at the end of the third quarter and extends out to 2040. The growth was driven by an approximate $2.4 billion in LEU and HALEU enrichment sales in the LEU segment. Of the approximate $5.4 billion in contingent LEU and HALEU sales commitments, $5.1 billion are under definitive agreements. Turning to our capital spend, which are CapEx and non-CapEx attributed to cost and investments such as prepayment for suppliers or growth costs. In the third quarter, we had total capital spend of $134 million, with $131.6 million coming from CapEx and the remainder coming from non-CapEx growth costs.
We finished the third quarter with approximately $2.2 billion in unrestricted cash without using our ATM. In September, we completed an approximately $500 million underwritten public offering of Class A common stock and pre-funded warrants, together with accompanying common warrants. This important transaction allowed us to access near-term capital at a premium while setting the company up for significant future capital and for future tranches with progressively higher exercise prices only if our share price appreciates and we continue to execute against our milestones. If exercised in full, the warrants could provide approximately $2 billion of additional gross proceeds, with exercise prices ranging from approximately $227 to $363 per share. We believe this structure reflects investor confidence in the long-term value of Centrus while providing additional financial flexibility.
We continue to feel confident in our existing cash balance, and we believe we are sufficiently funded to meet our near-term capital requirements. Subsequent to quarter end, we acquired Westerman for approximately $116 million, funded through a combination of cash on hand and equity, including $95 million in cash and $21 million in equity. We expect the acquisition to lower project costs for Centrus and drive greater efficiencies across our supply chain. Turning to our outlook for the remainder of 2026, as Amir noted, we are reaffirming our annual guidance for revenue of $450 million-$500 million and total capital spend of $350 million-$500 million. The target excludes the Westerman acquisition. We look forward to having a more fulsome conversation about Westerman build-out at our upcoming December investor day. We are simultaneously reaffirming our operational guidance for the workforce additions in Piketon and Oak Ridge.
With that, I will turn the call back to Amir. Amir?
Thank you, Todd. I am proud of the progress we made during the third quarter across our commercial, operational, and financial progress. We have made significant progress in and are continuing to de-risk our build-out. We are now beginning to manufacture and ship centrifuges from our Oak Ridge facility. We have locked in 100% of the suppliers we deem critical and have completed our first CFC package. We have significantly grown our commercial enrichment backlog. We are sitting on a healthy cash balance that empowers our build-out. We have furthermore bolstered and de-risked our business profile, especially in near-term revenues and profitability, with our recent Westerman transaction. All of our progress is happening as our addressable market continues to grow, a strong backdrop that supports our expansion. We are also excited to host our upcoming investor day on December 7th at our American centrifuge plant in Piketon, Ohio.
We look forward to sharing more about our strategy and build-out at that event. With that, I will turn the call over to the operator for questions. Operator?
Thank you. Ladies and gentlemen, we'll now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. As a little reminder, we would like to stick with one question, please. If you do have a follow-up, you may requeue. Your first question comes from Mark Shooter from William Blair. Please go ahead.
Hey, good morning, everybody. Amir, I just had a question on the first centrifuge. The first centrifuge production, that's a big milestone for the company, and also national security. A key point for us on that front was that these new centrifuges are unobligated, and I was hoping you could give us some update on the engagement with the NNSA and speaking to the funding and the outline from the GAO as well.
Yeah. Well, good morning, Mark. Thank you for that good question. I'll remind the listeners and yourself that one of the great values that we bring to the market and the technology that we bring to the market is the capability to have unobligated production that can serve national security needs. Just as a reminder as well, in form of background, in November of 2025, the NNSA published a notice of intent to issue Centrus a sole source contract for the production of certain low enriched uranium that's suitable for use in support of the national security mission. That is sort of the backdrop to our need and our drive to have unobligated production.
As specifically to your question- Our production will be unobligated, and we have been working to configure the supply chain, working with all our suppliers to make sure that that is going to be implemented. Hope I answered the question, Mark.
Yeah.
Yeah. Thank you, Amir. I thought they cut me off for the next question. Thank you.
Your next question comes from Marc Bianchi from TD Cowen. Please go ahead.
Hey, this is Esteban Albarracin on for Marc Bianchi. Thanks for taking my question. The question is really around the current LEU backlog. I know you mentioned excluding the LEU to HEU contract. Is that all tied to the existing reactor fleet? I ask because I'm trying to understand the opportunity for new light water reactors there, and there's 10 new large reactors moving through the DOE LPO loan program. So, I'm trying to think how should we think about the timing of potential LEU backlog opportunities for Centrus there if enrichment RFPs could follow relatively soon for new reactors, or would utilities likely wait closer to a reactor startup?
Good morning. Let me just talk maybe in general, and then we'll address specifically the question about the new build. We very much are excited and are obviously prioritizing firm commitments from customers, and the ones for LEU are typically the ones that are able to make those in large numbers. So, a good size, a large part of our backlog is LEU for operating reactors here in the U.S. and abroad as well. Specifically to the question of how to think about the new reactors that are yet to be built, it really is a question to them as to at what point they would feel they would need to go out and secure fuel supply. I think based on what we're seeing the advanced reactors do, they do prioritize fuel supply, and they put that right at the front to ensure that they de-risk their projects.
I would expect that the new builds, whether it is going to be AP1000s or whatever other large reactor design it is going to be, there is going to be tremendous need for enrichment supply as well. I would tend to think that in today's market and some of the availability and some of the long cycles around capacity expansion of enrichment, I would absolutely encourage them to put that at the very front of their planning cycle as they plan to expand. We absolutely intend to compete for it, and we intend to make that a big part of our business as well.
Thank you. Your next question comes from Joseph Osha from Guggenheim Securities. Please go ahead.
Hey, guys. This is Peyton Duran on for Joseph Osha this morning. Thanks for taking the questions. I guess, could you just provide a little bit more color on what enabled the accelerated timeline for the first completed centrifuge, and do you see this timeline as replicable for future units? I guess the third part, what learnings are you going to take from this first one to apply to subsequent? Thank you.
Okay. Thank you for the question. I think I have been very consistent on all of our calls in trying to explain and emphasize to the investors how critically important it is for us to gain market credibility, be able to meet and exceed our commitments. We have an incentive from the market. We have an incentive to beat the timelines that we have advertised. We are creating the same incentives and the same expectations of exceeding, meeting the timelines. But more specifically, what enabled it is we do run process improvement teams in parallel. I mean, one example that I gave before, which I am sure we will get to talk about at some point, I am sure a question will come up about our partnership with Palantir and some of the work we are doing there.
We really are attacking this on multiple fronts, and we're doing a lot of progress with our supply chain, and all of this with the intent of expediting, lowering cost, de-risking. Westerman is another example of de-risking and building efficiencies into our supply chain, and I'm sure there will be a question on that as well at some point. The lessons learned here is that when you align the goals in the organization, provide the tools, expectations, and make a proper investment in rapid improvements, it pays off, and we certainly intend to implement those learnings. These are coincidentally to your second part of your question. These really are the learnings. We certainly are looking forward to providing a more wholesome update, details, and examples at our investor day that I've announced earlier. Hopefully that answers the question.
Thank you. Your next question comes from Nate Pendleton from Texas Capital. Please go ahead.
Good morning, and congrats on the continued progress. Amir, I wanted to go back to the strong macro picture that you alluded to in your prepared remarks. With the strong SWU pricing relative to uranium, as we look ahead, how are customers changing tails assays, if at all, and how much Western SWU demand could be met with overfeeding as we look out in the future?
Great question. Good morning. You're asking an enrichment person about a question that involves a lot more consideration than just enrichment. Obviously, uranium pricing fits into this very strongly. Each customer and supplier approach this question individually on a contract-by-contract basis. In the past, obviously, when SWU prices were cheap, this goes back a few years ago, we've seen the different behavior around tails assay, we've seen a different behavior around underfeeding versus overfeeding. Obviously, that dynamic has changed now that SWU prices have gone up considerably. I would expect that this continues to be just an optimization for each contract, case by case, as to how they view their uranium supply pricing versus how they want to optimize it versus enrichment. I will add as a final thought that I would tend to give the upper hand here to enrichment.
By that I mean, I think ultimately you would see the seesaw and pendulum swing towards sort of erring on the side of favoring enrichment capacity just because I don't see that there is that much ability to expand capacity as quickly as the market grows. I mean, we're seeing that disparity now, and I think it will take a while before that disparity sort of settles. So, I think you will see that reflected in the tails and in the overfeeding versus underfeeding. I hope that answers the question.
Thank you. Your next question comes from Bill Peterson from J.P. Morgan. Please go ahead.
Yeah. Hi, good morning. Nice job in the quarter, the execution. Thanks for taking the question. I wanted to ask to follow up on a prior question on the backlog. Because I guess we think about your commercial strategy, is there a preferred mix of, I guess, existing utilities, say LEU, versus newer companies, SMR? I guess, with the shape of the backlog, you talked about backlog going up to 2040. Is that more front-loaded or back-loaded? I'm just trying to get a sense of what that could mean from implication on CapEx as you, I guess, continue to grow your backlog.
Yeah. Good morning, Bill. Thank you for that question. I'll start off by just saying that it would be. We typically do not break down and separate the amounts. That said, the vast majority of our backlog is LEU. It's either for LEU customers or it's feedstock for future HALEU offtake. Now, you asked a pretty interesting question as to who do we favor and who do we like more. That would be a dangerous answer to give. I'll give you the pros and cons, and obviously, we want both and we pursue both. The established LEU customers provide a lot of certainty, they provide a lot of volume, they provide very, very solid terms to be able to offtake, and that is precisely what we need when we are expanding our facilities and investing capital.
However, I do not want to in any way underestimate the HALEU customers who just in the last six months, a year, have become a lot more committed to the supply chain. We are seeing them being able to make sort of take-or-pay type contracts and legally binding contracts. They provide a huge promise to a company like ours. If there is a large expansion of any of these SMRs or microreactors, if there is a large build-out, that is going to create a substantial need for HALEU and an exponential need for LEU. We honestly are trying to keep our finger on both triggers. I will just remind the investors and listeners as well that the third leg of the stool here is we are pressing really hard on national security. We position ourselves to be able to serve the needs when called upon for national security.
I hope that that gives you enough detail and that I answered the question, Bill.
Thank you. Your next question comes from Nick Amicucci from Evercore ISI. Please go ahead.
Hey, Amir. You opened the door, so I will allow you to either walk through it or close it on me. I just wanted to kind of dig into the $300 million of Palantir potential savings. Basically, how much represents validated procurement or engineering changes versus the opportunities that are still under evaluation? Should we think of any of those as an accelerant to capacity delivery?
Yeah. Good question, Nick. As previously communicated, a day one focus for us is to really maximize cost savings while we really are bringing in lead times and deployment times for our expansion. We want to use state-of-the-art technology tools, capability, individuals, and hence the reason for the Palantir partnership. We did announce amount of savings that we put out there, and then you quoted it, $300 million. A lot of it has been a strong contributor to our capability to deliver ahead of schedule. From where I sit, and I am fairly connected to the project, I think that most of the opportunities and most of the potential savings and value we're going to derive is still ahead of us. So much so that we are in active mode of learning as to what we achieved and how we potentially accelerate and expand that.
Stay tuned for more announcements, stay tuned for more information, and as one of the answers that I gave earlier, we do intend to have a much more wholesome conversation on this in our investor day. This really is the purpose for such conversations. Would love to address it there, and we're preparing to do that. I will also add as a last statement that the first centrifuge is really a great example of the value creation-based agreement and partnership that we have with companies like Palantir. I think the very first milestone that we set out there, we've been able to capitalize on it, and we're looking to do that habitually for all the other milestones that we're facing.
Thank you. Your next question comes from Jon Windham from UBS. Please go ahead.
Hey, thanks for taking my question. This is David on for Jon Windham. Just wanted to touch base on, can you give us an indication or kind of a status update on where you are in negotiations with the DOE and the potential to convert your demonstration cascade to commercial offtake and the potential to bring some of those volumes online a little bit quicker to market? Thank you.
Yeah. We are in discussions. As I typically answer my questions, I will give a little bit of backdrop and sort of the context for the answer, just for the benefit of all the other listeners. We embarked on a demonstration program with the DOE. They have been a great supporter. We worked collaboratively really well to demonstrate our technology now for three years. It has been hugely successful, and it provided the impetus and the capability to expand that into commercial operations. The natural next step for the 16-centrifuge demo cascade is to place that into commercial operations. The cascade is producing. We are in discussions with the Department of Energy about how to amend and how to make a more wholesome agreement where this continues to serve the market and some of the reactors that are getting into the market now and would require some of that material.
Yeah. To Amir's point, the centrifuge is currently spinning for commercial use. As part of the larger agreement, it is our ambitions and the DOE's ambition to keep those centrifuges spinning throughout their life cycle. We are currently working that in through our long-term arrangement with the DOE. They have given us rights to use those centrifuges for commercial use currently, and that is what they are being used. So, currently, we are enriching for HALEU for commercial needs at this moment.
Thank you. Your next question comes from Eric Stine from Craig-Hallum. Please go ahead.
Hey, good morning. This is Luke on for Eric. Thanks for taking our questions. As it relates to your supply chain strategy, should we expect to see vulnerable areas addressed through vertical integration, like with Westerman, or was that more of a sort of a one-off event from a strategic perspective? Thanks.
I think your question specifically asks about vulnerable. I would say that the Westerman deal was a whole lot about an opportunity to de-risk our supply chain, to de-risk the build-out, and to de-risk the business model, as well as to be able to capitalize on a lot of efficiencies that we see out there. All in all, we are very satisfied with it. I mean, there are other tools in our arsenal over there that we are deploying in setting up a supply chain that is predictable, capable, and produces high-quality product. I mean, these things are done every day by our team, are not necessarily advertised, they are not necessarily out there communicated to the broader community. I mean, this is the kind of stuff that we do every day that goes unadvertised. You use the word vulnerability. This is going to be a major project.
We have a lot of suppliers. Each supplier has their own strengths and weaknesses. We are building and we have built resilience in our supply chain where possible. We are using quality oversight, we are using partnership with different suppliers, so we are not taking anything off the table. I think what you saw with Westerman is an example where you had really a perfect fit of all these factors come together, and it was no coincidence that this deal was made.
Yeah, I will just comment. We view Westerman as a world-class operation, especially in the nuclear space, and they reach over into other industries. This allows diversity to Centrus' income stream and revenue. It is immediately accretive in year one, and it really serves as a platform for us to expand on supply chain integration, take out some of those vulnerabilities if we see they present themselves through either organic growth now through Westerman or through additional M&A activities. We are extremely excited about this. I will just comment that, on our investor day, we plan on providing a significant more information around the acquisition, and we hope that all of those on the call today are able to dial in or join us, and where we can provide a long-term view of our vision for Westerman and our supply chain. Thank you.
Thank you. Your next question comes from Rob Brown from Lake Street Capital. Please go ahead.
Hi, good morning. Just wanted to kind of follow up on the centrifuge manufacturing ramp with your first one now done. I know you can't give exact numbers, but how do you sort of see that ramp happening? Is it over the next year? Is it sort of ramp quickly or just a sense of how that develops? Thank you.
Yeah. Good morning, Rob. Could you, just to make sure I answer your question and I understand it, when you say the ramp, you're talking about the cadence of the centrifuges as offline, or what specifically were you thinking of?
Yeah, I think you mentioned focusing on ramping up the level of production of centrifuges, just further color on how that happened.
Yeah, so just as a general backdrop again, when we announced the first centrifuge, obviously the big announcement there is not in the centrifuge itself, but the announcement is that now we have a functioning operating production line that produces centrifuges, and we really are celebrating the first off to come off of this line. There is a certain cadence rhythm that we are currently engaged in and we're producing. At this point, we probably going to reserve a lot of that detail for our investor day, where we have a lot more wholesome conversation on this and presentation, but do expect to see more information announcement come out on that. The point is that we have an operating manufacturing line that is in current production.
Thank you. Your next question comes from Lawson Winder from Bank of America Securities. Please go ahead.
Thank you very much, operator, and good morning, Amir and Todd. I appreciate today's update, and I look forward to the investor day very much. The thing I'd like to better understand is commercial HALEU. You've disclosed that the existing 16 cascades are now enriching HALEU for the commercial market. Can you just confirm whether that's against the Oklo, X-energy, Radiant, or Antares contracts, or is there another customer? Then when we think about revenue and economics from that, I mean, when do you expect first commercial HALEU revenue to start showing up in the P&L? Then how should we think about the margins versus the DOE HALEU contract? I mean, are these going to be similar margins, or could commercial HALEU possibly have significant superior economics? Thank you.
Yeah, so a lot of questions there, and thank you for that, Lawson. Let me try to jot them down. I'll try to answer all of them. On your first question around the commercial HALEU and who specifically it goes to, the answer that I'll have for you is it will be supplied to the commercial market that requires HALEU. I mean, everybody read our announcement. There's no more detail further to that, but we absolutely are looking forward to supporting the startup of the commercial market of HALEU. I mean, these new reactors are becoming real. They require fuel, and we are the first ones out there that are going to be fueling them. Having the only HALEU cascade in the Western world that's able to supply them right now gives us a huge advantage, and we're looking forward to providing that support.
Now, to your, I think the next question you had was comparing contrasting margins on these contracts versus the DOE. Todd, I'll give you the word on that.
Yeah. Look, there are two different types of contracts that are present. The DOE obviously was a demo cascade, the demo project that allowed us to prove our capability while providing enrichment that can potentially be used for the startups of many of these SMRs and microreactors. On the commercial, there is a lot more that is involved around the commercial contract terms. Obviously, we do not get into those types of economics, but there are various different items, and every contract is different as to who provides the feed, whether it is LEU or we are providing it. The overall price can have some variability, but we are obviously confident in their ability in the HALEU market to provide significant upside to the company and optionality.
We are rooting for all of the SMRs and advanced reactors, and as Amir said, we are extremely excited to be the only one enriching commercially HALEU fuel right now, and are standby to meet all of our customer needs.
Thank you. Your next question comes from Joseph Reagor from Roth Capital Partners. Please go ahead.
Hey, Amir and team. Thanks for taking the questions. I guess for me, on the Westerman acquisition, can you give us any additional color on what the margins look like there at the gross margin level, and what, if any, seasonality there is to their business?
Yeah, thanks. We are really excited, as I said, about the Westerman. I think I will put a pause on one of your comments, but we believe there is significant upside to the Centrus revenue stream. This industry has very strong margins in the supply chain. It does two things. One is, as one of our larger suppliers, it allows us to de-risk our supply chain and have cost savings while diversifying our revenue base. Westerman also is involved in other high-growth industries and also oil and gas. The margins vary in each one of those segments. The high-growth segment is obviously in high demand and the margins are a little bit higher. Nuclear has strong margin profile. The last is the oil and gas, has been a mainstream for the Westerman throughout their operations.
We will provide more information on our investor day, including breakdowns of their margin profile in each segment and their contribution of revenue to Centrus in the current year and over the next few years. I hope that helps.
Hey, Joe, I want to add a couple of other things here, since we are talking about Westerman. I made a comment to this earlier that this was really no coincidence. This was not one of those things, "Hey, we want to buy somebody. Let's look at a list of 100 people." No, this was not the case. Westerman, folks in our industry know that Westerman is one of the strong fabrication pillars that has a nuclear-grade fabrication capability. They are high-precision fabricators. They are very versatile, as Todd mentioned. This is a great fit, and not only are we looking at, as I said, a lot of the de-risking of the supply chain build-out and the business model that we have communicated, but we will also have a very strong eye to the future potential and what other things could be done to support our build-out in the business as a whole.
As Todd said, I will echo again, we are very excited about the things that are yet to come, and hopefully we will have a much broader conversation December 7th.
Thank you. Your next question comes from Jeff Grampp from Northland Capital Markets. Please go ahead.
Morning. I had a question on the capital deployed cadence here. Hoping to get any additional clarity you guys can provide in terms of Q4 spending. Obviously, it could be a wide range of outcomes and still fit the full-year guide. Just wondering how we should think about spending into Q4 and any early thoughts on spending trajectory into 2027. Thanks.
Thanks for the question, Jeff, and good morning. We have maintained our capital spend guidance, so obviously you can kind of back into our fourth quarter spend. What I will say is we are now crossing the threshold into deploying capital at a more accelerated rate. We have started our first construction package. As you can see, we have our first centrifuge rolling off the line. We have secured our supply chain and have orders on for all of our materials currently placed, and we're moving forward with our build-out. All of these numbers are ex-Westerman. I just want to make that point. Often in GAAP and other areas, an acquisition will be considered CapEx and growth CapEx, but to maintain status quo and quarter-over-quarter continuity, we've excluded Westerman from that.
Now, to be said, we will look to provide more guidance in our investor day on December 7. As for 2027, what I said earlier this year in our previous calls, we're going to get to a point where we start to see some real cadence of capital deployed, and we're now in that ramp-up. We only started our Fluor contract mid-year as we signed the contract, and so now as that's beginning to come to fruition and we have boots on the ground, our spend increases in addition to the manufacturing side. So, stay tuned. We'll provide more guidance as for 2027. Obviously, we will be looking to give a more wholesome number in future discussions.
Thank you. Your next question comes from Jared from Stifel. Please go ahead.
Hey, good morning, everybody. Thanks for the question. As we head into the next Congress, do you guys see any change in the outlook for federal support for domestic enrichment, or is that support largely insulated from the political cycle? Thanks.
Yeah, good apropos type question. I will tell you with firm belief that this ought to not change the momentum of our industry. This ought not to change the momentum of the investment, the interest, and the focus and the support that the U.S. government provides to the fuel cycle and specifically to enrichment. The reason why I'm saying this is we have now been through the cycle of two administrations, at least during my time, and I have not seen a change in support, focus, or dedication. I've seen it increase. Some of the conversations around clean energy needing to increase, all of these things don't go away. They're still there. The conversations around re-industrialization, providing jobs, it becomes even more important now. So, the answer to your question is I absolutely don't see any change.
I see a necessity for even stronger support and focus, and we're looking forward to working with the new Congress on this as well.
Thank you. Your next question comes from Sean Milligan from Needham & Company. Please go ahead.
Hi, this is Drew Scott on for Sean. Thanks for taking the question. With the first centrifuge ahead of schedule and backlog growth tracking well, are you seeing HALEU demand pulling forward ahead of expectations at all, or are you even enough to say you'd consider pulling forward capacity even further?
I'm sorry, I did not hear the last part of the question. Could you please repeat the question again?
Yeah. Are you seeing HALEU demand pulling forward kind of ahead of your expectations, and would that even make you pull capacity forward ahead of kind of what you originally planned?
Yeah. Thank you for that. I am not seeing as much of pulling of demand ahead by the reactor developers. What we are seeing, and I mentioned that earlier, is we are seeing a lot stronger commitments and a lot more aggressive focus on actually locking in agreements and de-risking the fuel supply part of the equation when it comes to their build-out. No, there is really no changes in terms of the cadence that we are planning in terms of rolling out our capacity. We obviously, as I will repeat it again, are looking for every opportunity that we have in shortening lead times and creating efficiencies, and we will execute on that. But from the customer side, we are not seeing that yet.
Thank you. Your next question comes from Sameer Joshi from H.C. Wainwright. Please go ahead.
Hey, good morning, guys. Thanks for taking my questions. My quick question is on the Q4 outlook. Basically, if you look at the annual outlook, it looks like Q4 will be $142 million-$192 million revenues. Are there any takes and puts on this? Part two of that question is, the SWU pricing versus SWU cost management, how are you looking at it? Should we expect another sort of negative gross margin quarter this quarter?
Thank you for your question, and good morning. Yes, as you corrected, we maintained our guidance. We are optimistic, and we feel obviously that the fourth quarter provides a full year view of our strong results. As we have always noted that we see significant seasonality, including when we actually have sales that come, that are being delivered, but also receive our shipments. That quarter-over-quarter mix provides some fluctuations in our gross margin profile. That is why we have been discussing this on a TTM basis to provide a more normalized view. The negative gross margin and everything, there is a lot of timing around when we receive product and mismatch of when we deliver product. As such, we are very confident in our full year view. That is why we have maintained our guidance. We believe that the revenue and guidance that we have provided is also ex any Westerman upside.
I just want to make that note. We will be providing updated guidance on our December 7 investor day.
Thank you. Your last question comes from Ryan Pfingst from B. Riley Securities. Please go ahead.
Hey, guys. Thanks for taking the question. Maybe just a quick one on the backlog increase here. Was that fully from the three recently announced advanced reactor customers, or were there other undisclosed customers in there?
Yeah, that's not something that we disclose, but I can say that this was a mix of both LEU and HALEU. Unfortunately, I can't give the details. We don't provide the breakdown and separate the amounts. The vast majority of the backlog is LEU, either for LEU customers or as feedstock for our future HALEU off-takers. I hope that answers the question, Ryan.
Thank you. At this time, we have no further questions. I would like to turn the call back over to Mr. Neal Nagarajan, Senior Vice President. Please go ahead.
Thank you, operator, and thank you to everybody who listened on today's call. We are very excited about our upcoming investor day on December 7th in Piketon, Ohio, and we look forward to providing the market with more details at that time. Thank you.
Ladies and gentlemen, this does conclude your conference call for today. We thank you very much for your participation, and you may now disconnect. Have a great day, everyone.