NuScale Signs Deal worth up to 6 GW of Capacity with ENTRA1

NuScale has operated for nearly two decades as the company was founded in 2007. That’s key as the company is ahead of competitors as the only small modular reactor (SMR) technology to receive two approvals from the Nuclear Regulatory Commission (NRC). The company also has an established manufacturing supply chain and has invested $2 billion over the years for plant licensing and operations. In other words, NuScale has a significant head start.

We’ve covered the company in the past in the analysis, “NuScale Power: Recent NRC Approval Paves Path to Commercialization” at the time stating the company had a path to doubling its modules in production to 12. In the earnings call, management discussed Doosan, their supply chain partner, having the capability to produce 20 modules. However, an important caveat is that it could take until 2030 until the modules are in the ground: “Anybody says they can get to 2030 COD without these long lead items, I don't see it as a possibility. We're still focused on getting modules in the ground by 2030 time frame.” The reference to COD means “commercial operation date.”

We also pointed out in that analysis the partnership with ENTRA1, where NuScale acts as more of an OEM by supplying ENTRA1, which in turn, supplies the power directly to customers. Most recently, ENTRA1 signed a deal with Tennessee Valley Authority for up to 6 GW of nuclear power in “the largest U.S. small modular reactor deployment program to date.”

There are significant risks with this stock as its most recent quarter reported $8.1 million in revenue despite a $12 billion market cap. That puts its sales valuation at a whopping 127 forward PS. The risks peak when the company enters the second half of next year as there will be an increase in opex at the same time as an increase in capex. However, per the rough math, a 6GW deal could be worth as much as $36 billion, thus, it’s reasonable to see the market starting to move into stocks that can supply power by the gigawatt.

Below, we discuss the post-earnings update on NuScale’s prospects as well as the updated financials and a few key points to consider on this high risk stock. Notably, technicals are in the driver’s seat as the fundamentals do not offer a quality profile, rather it’s a potential momentum play on the AI data center energy theme. We plan to adhere to technical stops to protect the downside, as it could be considerable if the stock market cools off on AI.

NuScale Signs Milestone Agreement with ENTRA1, Supporting 6GW Capacity

In late August, NuScale signed a 20-year partnership milestone agreement (PMA) with key commercialization partner ENTRA1, to support ENTRA1’s recent landmark agreement with the Tennessee Valley Authority (TVA) for new nuclear generation capacity of up to 6GW across the TVA’s footprint in six new plants. This is the largest SMR program to date in the US, though TVA offered no firm timelines on when it expects to break ground on the plants or when it expects operations to commence.

The PMA, lasting through 2045, will see NuScale provide 72 of its 77MWe modules for ENTRA1’s future projects along with a $35-55 million contribution per module, paid out as certain milestones occur:

15% of the $35-55 million contribution is due when ENTRA1 signs a non-binding agreement, memorandum of understanding, letter of intent, or framework agreement related to the development of a power project. This 15% contribution applies to 72 modules. (Milestone 1)
35% will be due upon the signing of a binding power purchase agreement, energy off-take agreement or the deployment/delivery of one or more SMRs into a power project. The 35% contribution applies to a max of 48 modules at a given time. (Milestone 2)
50% will be due upon signing of an OEM manufacturing agreement or other documentation related to the purchase or deployment of SMRs. (Milestone 3)

The deal provides NuScale with reduced risk related to module deployment, as payments scale based on progress with the largest sums (85%) due upon and after binding deals are secured. The payment structure also incentivizes ENTRA1 to secure deals and progress towards deployment of NuScale’s SMRs across different power projects. Based on the structure of the milestone payments (with ENTRA1 not submitting any Milestone 2 invoices this year with a cap on invoice amounts in 2027), this suggests the two are eyeing the first binding agreements sometime in 2026 to 2027.

There are a few other contingencies and notable terms within the deal. While pricing per module has been redacted for confidentiality, the agreement will see payments adjust annually, by the greater of either 5% or the CPI Index. Module pricing can be adjusted annually as well, but milestone payments will then be renegotiated. While this accounts for increases in costs, it also could present a larger risk to NuScale as milestone payments could rise substantially over the course of the deal. Additionally, the agreement can be terminated by either party in writing if the other party can no longer pay its debts or enters bankruptcy proceedings.

As we discussed in our prior Discovery analysis, working with ENTRA1 frees NuScale up from capital-intensive plant development, but also limits its involvement post-deployment. This is expected to offer more flexibility for customers, where they can either assume full transfer of ownership of the plants from ENTRA1, serve as an operator, or simply buy the power under long-term power purchase agreements.

Analysts have recently raised concerns about the structure of NuScale’s and ENTRA1 partnership, with RBC Capital saying that shifting the financial and development risk to ENTRA “only transfers uncertainty, as ENTRA1 still needs to line up funding and buyers” for NuScale’s modules.

Rough Math on 6GW

In the past, we had outlined that 1.85GW in the Standard Power deal would be worth roughly $6B per GW. If we assume the ENTRA1 deal has a similar rate, the deal could be worth around $36B in full.

“NuScale has not been upfront about module pricing, though its original 2018 estimate with UAMPS for a 600 MWe, 12-module plant was ~$4.2 billion, or ~$350 million per 50 MWe module, before rising to $6.2 billion for an uprated 720 MWe plant in 2023, or ~$515 million per module. This suggests that a ~1 GW VOYGR-12 plant could be worth more than $6 billion, though these estimates are based off older figures which included surging raw material costs post-pandemic.”

The 6 GW PMA does include milestone payments, which, at these estimated module costs, could represent 10-15% of the module price; therefore, the overall revenue opportunity in the long run could be ~85% to 90% of the deal value.

The Path to Funding Capex May be Alleviated by 6GW Deal with ENTRA1

In the most recent earnings call, a primary focus was how the company plans to handle higher opex intersecting with higher capex. For timing, H2 2026 was specifically called out as a customer will need to absorb “over a couple of hundred million dollars of CapEx.” The analyst went so far as to call it “carpe diem time.”

“So is it fair to say that this is carpe diem time that the second half of this year is a critical time to get signed, sealed and delivered customer commitment or 2 that can start shouldering some of this so you don't have to do it all on balance sheet.”

Management stated the way they plan to manage the costs is to wait until they secure a deal before they start to build inventory. Notably, this conversation occurred before the 6GW deal was announced, yet applies in terms of how management plans to walk a tight rope between building inventory and delivering inventory – which could take a few years if we take at face value the comment that they won’t be putting modules in the ground until 2030.

Here was the discussion on the incoming higher opex in anticipation of new commercial orders:

“Yes, Marc, I appreciate you asking that because we didn't want to indicate to our analysts and to the markets that we do plan an increase in OpEx for Q3 and additional increase for Q4. […] that is in line with our efforts to continue to develop 12 modules and develop our supply chain and invest in the commercialization of NuScale. So it's not — there is an intent to build more than 12 modules right now […] So we've maintained discipline over — I think it's been 6 quarters where we've held OpEx to plus or minus 5% or so. And now we're engaging a very focused and very methodical increase in OpEx in order to engage the supply chain and just get ready for the commercial contracts, which we're anticipating.”

All things considered, chances are favorable that a hyperscaler or other deep-pocketed AI company shows up by H2 2026 to fund the capex via ENTRA1. We’ve certainly seen a string of deals between hyperscalers and energy companies, a few examples from the long list include Microsoft/Brookfield, Microsoft/Constellation, Google/Brookfield, Google/Intersect, Amazon/Talen, Amazon/Dominion, etc. We’ve seen demand ramp for alternative forms of power as well, such as Bitcoin miner and hydrogen fuel cells. Therefore, I would not be surprised if there is an update to this regard on how the economics of the 6GW benefits NuScale in the upcoming earnings call.

As noted in the paragraph above, NuScale has more favorable terms than other SMRs as they supply ENTRA1 who deals with the more complex side of selling modules direct and powering the modules in the field. Therefore, NuScale has one customer, and ENTRA1 takes care of the hyperscaler relationships as well as the more costly aspects of a Power Purchase Agreement. This could help the stock reach quicker profitability compared to peers.

Here is how management explained this: “We're not out here trying to develop technology, develop power plants, against PPAs. That's a huge pull. We're a tech company. We develop technology. Technology is for a NuScale power module. NuScale power module is built. We're kind of an OEM reseller — sorry, we're an OEM seller of a piece of equipment. We outsource that equipment. We outsourced the production. We deliver it to an ENTRA1 power plant. ENTRA1 puts the power front and then sell the power.”

Double-Clicking on NRC Approvals and Manufacturing Experience

In addition to having two NRC approvals, NuScale is also differentiated by its manufacturing experience and deep supply chain partnerships. To some extent, the manufacturing experience may provide a more important head start than NRC approval.

Here is what management stated: “And so there's a 2-part dance here, regulatory licensing, but also you got to get the darn things built. And that takes a herculean effort, and we've been engaged in that for years now.”

According to previous earnings calls, management stated it takes a minimum of 4 years of operation to secure NRC approval, however recent legislation may have lowered these requirements. There is a lot of red tape involved with energy sector legislation, but the current information shows NRC approval can happen in a little as 18 months as the United States seeks to accelerate nuclear deployment.

“This Order directs the NRC to complete rulemakings within 18 months to comprehensively revise its regulations and guidance documents, with a focus on balancing safety concerns with the benefits of nuclear energy for our economy and national security. The revisions will include: Establishing fixed deadlines for evaluation and approval of licenses, including an 18-month deadline for construction and operation of new reactors and a 12-month deadline for continued operation of an existing reactor.” You can read more here.

We covered the NRC deal in our previous write-up stating NuScale recently received NRC approval for its 77 MWe US460 design, which was based in part off its 2023 NRC certified US600 50MWe design. The approval means that the 77 MWe design meets rigorous safety standards and is now approved for use in the US without further review, valid for 15 years. The design can also be referenced by developers and other companies in COLA or construction permits.

Revenue Inflects Off a Low Base

NuScale reported Q2 revenue of $8.01 million, a sequential decline from $13.38 million in Q1 but a sharp acceleration from just $0.97 million in the prior-year-quarter. Management noted that the sequential pullback in revenue and gross margin reflects project timing. The YoY ramp underscores that NuScale is moving past the “de minimis revenue” phase into more consistent contract recognition.

In terms of revenue quality, customer concentration is significant, as related-party Flour drove 92% of Q2 revenue and 69% year to date. As of quarter end, Fluor was also owed ~$2.7 million. This level of customer concentration will be a key risk to monitor as revenues continue to build. From a segment perspective, majority of revenues are driven by Power plant/NPM related services and are broken out as follows:

Power Plant/NPM related services: $7.435M
Energy Exploration Centers: $0.551M
Other: $0.068M

Looking ahead, consensus calls for $11.3 million in Q3 and $12.1 million in Q4, which would bring FY25 revenue to $47.1 million, representing 27% YoY growth. Analysts model a step-function in FY26 to $152.2 million (+223% YoY) and then $320.6 million in FY27 (+110% YoY) as early deployments scale and VOYGR platforms moves closer to commercial reality.

Key Revenue Metrics:

Q2’25: $8.01M, down 41% QoQ from $13.38M, up 725% YoY from $0.97M.
Q3’25 (est.): $11.28M
Q4’25 (est.): $12.11M
FY25 (est.): $47.11M
FY26 (est.): $152.52M
FY27 (est.): $320.61M

While the near-term revenue base remains small, the Street is clearly modeling a steep growth curve beginning in FY26.

Volatile Margins Reflect Scaling Pains

Margins remain volatile, heavily distorted by stock-based compensation, which at $5.23 million equaled 64% of revenue in Q2. Gross profit came in at $1.78 million, a 22.1% margin, down from $7.0 million and 52.4% in Q1 but ahead of just $0.12 million (12.1%) a year ago. The sequential pullback highlights lumpiness tied to project timing, though the YoY improvement signals early operating leverage.

At the operating line, losses widened to $43.1 million versus $35.3 million in Q1 and $41.0 million in the prior year quarter. Operating margin of (534%) deteriorated sequentially from (264%) but remains far improved against last year’s extreme (4,330%).

Net Loss of ($37.6) million compared to ($30.4) million in Q1 and ($74.4) million last year. On margin, this equated to (467%), highlighting the scale of losses relative to revenue. Importantly, NuScale’s reported results continue to be weighed by high R&D and G&A spend as the company invests to bring SMRs to market.

Key Margin Metrics:

Gross profit $1.78M, down from $7.00M in Q1’25, up from $.12M in Q2’24.
Gross margin 22.10%, down from 52.35% in Q1’25, up from 12.10% in Q2’24.
Operating loss of $43.08M, down from ($35.33M) in Q1’25, roughly in line with ($41.02M) loss in Q2’24.
Operating margin of (534%), down from (264.10%) in Q1’25, up from (4330.0%) in Q2’25.
Net loss of ($37.61M), down from ($30.40M) in Q1’25 but up from ($74.44M) loss in Q2’24.
Net Margin of (466.97%), down from (224.70%) in Q1’25 but up from (7700%) in Q2’25.

EPS

GAAP EPS came in at ($0.13), missing consensus of ($0.11) by ~ 2 cents (a 16% miss). Analysts do not expect NuScale to turn GAAP profitable within the next several years, but modeled losses are narrowing: FY25 ($0.49), FY26 ($0.42), and FY27 ($0.32) on an adjusted basis. The trajectory implies that as revenue scales post-2026, operating leverage should begin to chip away at persistent deficits.

Key EPS Metrics:

GAAP EPS of ($0.13) actual, behind estimates of ($0.11), miss of 16.07%.

Cash Burn Accelerates Amidst Buildout but Runway Remains

Cash burn accelerated this quarter, with operating cash outflow of ($33.3 million), more than Q1’s ($22.8 million) but lower than ($36.0 million) in the Q2’24. As you can see below, this cash burn reduced NuScale’s estimates cash runway from ~21 quarters in Q1 to ~18 in Q2. Operating cash flow margin of (415%) versus (170%) in Q1 reiterates how early NuScale is in monetization relative to ongoing expense, as the company is pouring resources into financing future growth.

NuScale ended the quarter with $420.5 million in cash, down from $521.4 million in Q1 but up significantly $130.9 million a year ago. The year over year increase in cash is driven equity funding; on August 11, NuScale entered into an at-the-market share sales agreement with multiple investment banks, allowing the company to raise up to $500 million. NuScale says that it plans to use any capital raised for general corporate purposes, including building out SMR projects or R&D. The current ATM program could represent up to ~4% dilution if fully executed.

Importantly, NuScale carries no debt, preserving balance sheet flexibility even as cash burn accelerates. Deferred revenue of $0.34 million was down sequentially but remains above prior-year levels, reflecting the early stage of backlog conversion.

A notable datapoint: institutional ownership climbed meaningfully, from 54.5% in June to 66.1% by late September, with shares held increasing from 72.7 million to 88.5 million. That kind of step-up in institutional participation is often a vote of confidence in the longer-term story despite near-term losses.

Balance Sheet Metrics:

Operating Cash Burn of $33.3M, up from $22.79M in Q1’25 and up from $36.03M in Q2’24.
Operating Cash Flow Margin of (415.73%), down from (170.3%) in Q1’25 but up from (3730.0%) in Q2’24.
Cash $420.47M, down from $521.4M in Q1’25 but up from $130.9M in Q2’24.
Debt burden remains at zero.
Deferred revenue of $0.34M, down from $0.92M in Q1’25, up from $0.08M in Q2’24.

Bulls vs Bears

NuScale’s Q2 print reinforces both sides of the investment debate. On the bull side, the company is finally demonstrating tangible revenue traction, with >700% YoY growth, a healthy cash balance of $420 million, and a rapidly expanding base of institutional support. Street estimates call for a steep step-function in revenue beginning in FY26, implying that NuScale’s VOYGR platform could scale into a meaningful clean energy contributor just as global demand for carbon-free baseload power accelerates.

On the bear side, the near-term financial picture remains challenged. Q2 saw cash burn swell to $56 million, SBC distorted margins with expense equal to nearly two-thirds of revenue, and GAAP EPS missed expectations by a wide margin. Profitability is not in sight through FY27, and execution risk around deployment timelines remains high.

Taken together, NuScale is a name straddling promise and pain: the long-term narrative is underpinned by regulatory approvals, strong partnerships, and institutional sponsorship, while the short-term is marked by heavy losses and cash outflows. For investors, the debate boils down to conviction in the SMR deployment curve. If NuScale executes, the modeled revenue inflection in FY26 – FY27 could mark the beginning of real operating leverage: if not, dilution and on-going burn may dominate the story. That divergence is the essence of the NuScale investment case.

Conclusion

NuScale’s key commercialization partner ENTRA1 has signed the largest SMR deployment deal to date at 6GW across six plants in TVA’s footprint. While the deal could be worth up to $36 billion based off prior estimates per GW, NuScale remains inherently high-risk as operations may not commence until 2030. Additionally, the company trades at an elevated 127 forward revenue multiple, while opex and capex will increase in the second half of next year, raising pressure on funding. As stated in the intro, NuScale is a potential momentum play on the AI data center energy theme, and we plan to adhere to technical stops to protect the downside, as it could be considerable if the stock market cools off on AI.

Damien Robbins, Equity Analyst at I/O Fund contributed to this analysis.

Every Thursday at 4:30 pm Eastern, the I/O Fund team holds a webinar for premium members to discuss how to navigate the broad market, as well as various stock and crypto entries and exits. Beth Kindig offers weekly deep dives including lesser-known cryptocurrencies and AI stocks, plus the team offers trade alerts. The I/O Fund team is one of the only audited portfolios available to individual investors. If you’d like to subscribe to the Advanced Market Signals plan, email us at premium@io-fund.com4:30 pm Eastern, the I/O Fund team holds a webinar for premium members to discuss how to navigate the broad market, as well as various stock and crypto entries and exits. Beth Kindig offers weekly deep dives including lesser-known cryptocurrencies and AI stocks, plus the team offers trade alerts. The I/O Fund team is one of the only audited portfolios available to individual investors. If you’d like to subscribe to the Advanced Market Signals plan, email us at premium@io-fund.compremium@io-fund.com.

Please note: The I/O Fund conducts research and draws conclusions for the Fund’s positions. We then share that information with our readers. This is not a guarantee of a stock’s performance. Please consult your personal financial advisor before buying any stock in the companies mentioned in this analysis.

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