On Thursday, X-Energy (NASDAQ:XE) discussed second-quarter financial results during its earnings call. The full transcript is provided below.
This content is powered by Benzinga APIs. For comprehensive financial data and transcripts, visit https://www.benzinga.com/apis/.
The full earnings call is available at https://edge.media-server.com/mmc/p/3kfh4ggi/
Summary
X-Energy Inc reported Q2 2026 total revenues and grant income of $54.6 million, a 154% increase from the previous year, driven by engineering work under the Advanced Reactor Demonstration Program (ARDP).
The company received an additional $1 billion in funding from the Department of Energy for its ARDP Cooperative Agreement, bringing the total cost share to $2.115 billion.
X-Energy secured long-term agreements for HALEU enrichment services with Centrus Energy Corp and General Matter, addressing fuel supply for its Xe-100 projects.
Construction of the TX1 fuel fabrication facility is 80% complete, with plans to expand production capacity for nuclear-grade graphite and TRISO-X fuel.
The company is using AI to enhance nuclear development processes and is collaborating on the DOE's Project Prometheus.
X-Energy's liquidity stands at $1.9 billion following its IPO, with no debt and a focus on conservative investment strategies.
Management highlighted ongoing discussions with potential customers and partners, indicating robust interest in its SMR technology.
Full Transcript
OPERATOR
Hello and welcome to the X-Energy second quarter 2026 earnings conference call. All participants are in a listen-only mode. After today's prepared remarks, there will be a question-and-answer session. At that time I will provide instructions for those wishing to ask a question. Please note that this call is being recorded. I'll now turn the call over to Patricia Gill, Director of Investor Relations for X-Energy. You may now begin.
Patricia Gill, Director of Investor Relations
Thank you, and good morning, everyone. Welcome to X-Energy's second quarter 2026 earnings call. This morning we released second quarter 2026 financial results and operational highlights for X-Energy Inc. You can find today's presentation and our earnings press release on the Investor Relations portion of X-Energy's website at investors.x-energy.com. Our remarks today will include forward-looking statements which are based on assumptions as of today and are subject to significant risks and uncertainties.
Actual results may differ materially from those set forth in the forward-looking statements. Our SEC filings, including our Quarterly Report on Form 10-Q, identify certain risk factors and cautionary statements that could cause the company's actual results to differ materially from those projected in our forward-looking statements made this morning. We undertake no obligation to update any forward-looking statement except as required by law. During this call we also present non-GAAP financial measures.
There are reconciliations of these measures included in our investor presentation posted on the Investor Relations portion of our website. Joining me today are Clay Sell, our Chief Executive Officer, and Daniel Gross, our Chief Financial Officer. On today's call, Clay will open with a review of our recent highlights and operational updates, followed by what we believe are our compelling and differentiating business factors. Daniel will then review our financial performance for the second quarter in more detail before turning it back to Clay for closing remarks.
We will then open the call up to Q&A. With that, I'll now turn the call over to Clay.
Clay Sell, Chief Executive Officer
Thank you, Patricia. Welcome all. Good morning. It's great to be with you today. What an extraordinary time to be in the business of bringing new power technologies to the market. Based on third party estimates, global electricity demand is expected to increase more than 75% by 2050. About a third of that growth is predicted to take place in our key markets, the U.S., the UK and Canada. And it's estimated that the market just for SMRs could be 158 gigawatts by 2050. That's a $2.3 trillion revenue potential.
At X-Energy, we have the opportunity to play a significant role in what will likely be the greatest build out of power and electrical generation since the dawn of the electricity age. And we have a transformative next generation technology and a great team of people that will allow us to reinvent and simplify the way nuclear power is built and expand the functions it can serve now and in the future. We're benefiting from a tremendous level of support and help along the way from our early partnership with the U.S. Department of Energy to our first announced customers, Dow, Amazon, Energy Northwest and the UK utility Centrica. Now it will take us several years to fully unlock the scale of this business opportunity, but we want you to come to continue that journey with us today as we hit the news highlights and update you on our ARDP contract, supply chain agreements, developments at our TRISO-X fuel business, how we're using AI inside X-Energy, project milestones, licensing achievements, new customer agreements and our financial performance in the second quarter.
We have a big agenda with a lot of news, so let's get to it. I'll ask you to please turn to slide three. We're already there. I want to start with financing updates on our partnership with Dow and the Department of Energy. Now you may recall that in 2021 X-Energy was competitively awarded and to date has been allocated approximately $1.1 billion under the Advanced Reactor Demonstration Program, a 50:50 public private partnership to deliver our first commercial power plant with Dow in Seadrift, Texas.
This DOE grant award is our largest source of revenue at our current stage of development. Yesterday the Department of Energy formally notified X-Energy that our ARDP Cooperative Agreement will receive up to an additional $1 billion. This funding will be subject to the same 50:50 cost share requirements as the original award and is expected to be obligated to the award as part of the normal contractual process with the Department. So overall that would increase DOE's cost share contribution to the ARDP up to $2.115 billion.
Our project with Dow is important not only because it's our initial deployment, but because the unmatched versatility for nuclear energy that it represents. When completed, our Xe-100s are expected to provide both electricity and high temperature industrial steam for Dow's operations, demonstrating the range of applications our technology can address. And it is of course expected to be the first grid scale advanced nuclear reactor deployed to serve an industrial site in North America.
Okay, let's move to news on the news updates and what we've done to strengthen our supply chain. And again, our supply chain goals are deliver for early projects, de-risk and accelerate our ability to scale the business. The availability of HALEU fuel is a current commercial constraint. We've been executing on a strategy to retire that risk for our customers and our businesses. And for many years the U.S. Department of Energy and the UK government, as a result of our efforts and advocacy, are financially supporting the construction of new HALEU production facilities.
And those incentive contracts have now been awarded and facility expansions are underway. For our first core loads at Dow, we've secured existing material, about 7.6 metric tons from the Department of Energy. Over the last week we have executed long term agreements for HALEU enrichment services with both Centrus Energy Corp. and General Matter. Under the contracts, firm delivery commitments will grow through a phased approach to scale HALEU production in line with our expected commercial pipeline.
So including our HALEU allocation from the Department of Energy, we now have firm agreements to support the fuel needs for the initial and replacement core loads of our announced Xe-100 projects and beyond. Those agreements give us further certainty around the fuel supply required for our pipeline and are a meaningful step toward diversifying supply, increasing our competitive advantage and significantly reducing HALEU supply risk for our commercial pipeline.
Now let me move to another aspect of our supply chain: nuclear grade graphite used inside our reactor core. Through an agreement we recently announced with SGL Carbon, which expand we're working to expand SGL's production capacity for medium grain graphite. We will invest up to $8 million in milestone based payments to support new facilities and equipment upgrades at SGL's facility in Ched, France. Full execution of this agreement would double SGL's manufacturing capacity for medium grain graphite by 2030, enabling the facility to produce graphite billets for up to eight new Xe-100 reactors per year.
All these supply chain agreements are part of our strategy to allocate a portion of our IPO proceeds to secure capacity on behalf of our customers, to incentivize early investments for our supply chain partners, to increase our competitive moat and reduce schedule risk for our early projects. As part of our plan, these contractual obligations are expected to be transferred ultimately to our customers. It's been a lot of good progress for our commercial and supply chain team this quarter.
So let me now turn to slides four and then five. I'd like to move to the latest developments of our TRISO-X fuel business. Our vertically integrated fuel fabrication business gives us greater control of an important piece of the reactor supply chain and will create recurring revenue opportunities for the company. In February of this year we received our Part 70 commercial license from the Nuclear Regulatory Commission for an initial 40 year term.
That was the first new commercial fuel fabrication facilities licensed by the NRC in over 50 years. Our first fabrication plant, which we call TX1 and as you see in this picture, is being constructed with a 50:50 cost share with the U.S. Department of Energy and also received a competitively selected award for up to $148 million in federal tax credits, helping to overall reduce the project risk. In addition, we appreciate the recent $11 million economic development grant from the State of Tennessee which will be utilized to support the continued development of our potential second commercial fuel facility which we call TX2 and will also support the development of our dedicated research and development center which we call TXL. All of these located on our campus in Oak Ridge. Our TX2 facility is also covered under NRC's Part 70 license and is currently in the design phase. This facility is anticipated to produce four times the capacity of TX1 and once completed, this campus is expected to establish one of the world's largest commercial scale advanced nuclear fuel fabrication sites with the capacity to produce enough TRISO-X fuel to support approximately 55 of X-Energy's Xe-100 reactors.
TX1, TXL and the future TX2 will form the core of our fuel fabrication and technology development campus in Tennessee. As part of that growth plan, we acquired 70 acres of adjacent land in July. This purchase brings the site's total footprint to approximately 180 acres, allowing for continued expansion covered under our Part 70 license and it provides additional space for utility corridors, equipment staging, fuel storage and long term expansion.
This week we announced an extension to our Cooperative Research and Development Agreement with the Department of Energy's Oak Ridge National Lab. This agreement expands nearly a decade's worth of joint research, technology transfer and process development that has enabled TRISO-X to get ready to manufacture at commercial scale. We have achieved significant process improvements that we expect will continue to reduce the cost of TRISO fuel. Let me give you an example.
In our pilot plant we have consistently achieved greater than 95% for first pass process yield on our kernel conversion process for TRISO fuel. This speaks to the mature process optimization in place at TRISO-X and we anticipate receiving that level or better at commercial scale. What this means is that more uranium ends up in the pebble and not discarded as waste, which means lower cost fuel. TRISO-X's manufacturing capacity equips it to potentially earn the fuel business of customers beyond our own X-Energy fleet.
We have the manufacturing expertise and the capabilities to produce various types of fuel to address the needs of a broader set of SMRs, micro reactors and nuclear space applications. Now, if we'll return back to slide three, let me switch gears and talk about artificial intelligence. We often talk about AI in hyperscale data centers as a demand pull for nuclear, and certainly we've experienced that in our own partnership with Amazon. But I want to briefly talk about how we are using AI tools to transform the way we do our business on the inside.
At X-Energy, we embrace the use of AI to further accelerate nuclear development. We view every opportunity through the lens of reducing the time and expense required to design, license, manufacture and deploy the fuel and the reactors. We are excited to have recently joined the Department of Energy's Project Prometheus as a founding member, collaborating with organizations including Idaho National Laboratory, Nvidia and Amazon Web Services. As part of our commitment, we're providing $10 million in private capital along with the use of our reactor design and fuel fabrication data.
Our data will serve as a technical basis for a three year research campaign leveraging the DOE's test reactors and supercomputing capabilities to integrate Frontier class AI models into uses from reactor design to semi autonomous operation workflows as well as fuel fabrication. Our participation in this project builds upon the ongoing development of our internal proprietary tool called APEX. This is our multi agentic AI platform that we have currently deployed across our engineering, licensing and operations teams where we are already realizing meaningful time and cost savings.
Now let's turn to slide six and I'd like to briefly touch on the progress of our near term milestones. First, you will note that we added a line recognizing the agreements to significantly reduce our early HALEU supply risk which occurred this month and it's a notable achievement. Moving on down the line, the vertical construction for the shell of our TX1 fuel facility is progressing on schedule and is approximately 80% complete. Today we are on track to meet our third quarter near term milestone for vertical construction completion and the commencement of the next scope of work for the interior build out which includes the construction of a graphite matrix powder building, utility installation and equipment installation in TX1. On the NRC construction permit for Dow, we anticipate that the NRC staff will close all safety questions by the end of August. We continue to expect final review of our construction permit to be completed in late 2026 with the issuance by 1Q27. In Washington state, the Energy Northwest project is expected to be our second project online and the first of five gigawatts of new power projects with Amazon.
This project will benefit from engineering, execution and licensing experience developed on the Dow project. Work with Energy Northwest is progressing as planned, with Energy Northwest moving toward construction permit submission in the first half of 2027. Finally, regarding our plan to announce the next 1 gigawatt project in 2026, we are in the final throes of an agreement with a major investor owned utility for our next 1 gigawatt project. It's coming to a close.
This is extraordinarily exciting news, but given the larger interests of our partners and the local communities involved, a full announcement will be made in the near future. So stay tuned for more exciting details to come. Let me turn to slide 7. On last quarter's earnings conference call, we introduced our long term milestone roadmap found here. We recognize that our projects are long dated and will take some years to come online. This roadmap provides you with the order of our project work streams extending into the early 2030s so you can follow along with us on our progress as we make project development announcements.
Since our last earnings conference call, there have been no changes to the anticipated timeline presented on this slide. I'd like to now turn it over to Daniel Gross, our CFO, to discuss our financial results for the quarter in more detail.
Daniel Gross, Chief Financial Officer
Thank you very much. Clay, please turn to slide 8. One note before I get to the numbers. This is our first quarter reporting as X-Energy Inc. We closed the IPO the last week of April, so Q2 covers several weeks as a private company and then a little over two months as a public company. In Q2 of 2026, total revenues and grant income were $54.6 million. That's $50.1 million of services revenue, which is primarily the XE100 design work under the Advanced Reactor Demonstration Program, plus $4.5 million of grant income, which is primarily tied to the Dow demonstration reactor.
Total revenues and grant income were up 154% compared to Q2 of last year, and the reason is straightforward. We're doing more engineering work and the cost share under the ARDP program reimburses us for roughly half of it. As of June 30, 2026, the end of quarter, the DOE has reimbursed $547 million to us under that program. Total operating expenses in Q2 of 2026 were $164.6 million. This breaks down into direct costs of $86.7 million and SG&A of $77 million.
But when looking at our SG&A for the quarter, it's important to recognize that $33.5 million of that expense was non-cash, equity-based compensation, mostly from options that were granted to employees at the IPO. A little under half of that equity comp expense was a one-time charge recognized at the IPO when previously vested awards converted, and then the remainder of our equity comp awards will amortize over the remaining vesting periods. So with revenue up 154%, total operating expenses were up 156% compared to Q2 of 2025.
And there were three primary drivers: more ARDP work, more people and contractors doing that work, and the equity-based compensation, which as I mentioned was a non-cash expense. Below the operating line, interest income was $11 million on our investment portfolio. But this is offset by $6.3 million in expenses that are categorized as other income or expense, net. But I want to unpack that so you can see where it's coming from. Most of that $6.3 million in expense was a non-cash mark-to-market loss of $5.6 million on a warrant that was granted to an investor in 2022 and exercised in April of this year.
And as the value of our equity went up, the fair value of the warrant also increased. So we had to book an expense, but no cash left the building. And this won't repeat because the warrant has been exercised and the liability is gone. So netting it all out, total other income or expense was a positive $4.7 million. Turning to cash flow, operating activities used $97.3 million in the quarter, which is up from $20 million in Q2 of 2025. That reflects higher ARDP activity, corporate headcount, contractors, and some significant prepayments to vendors on long-lead materials.
Investing activities used $73.6 million in Q2. A lot of this was simply from rolling cash into debt instruments as other debt instruments matured. So we bought $126.6 million of short-term securities and we had $92.8 million mature. We also spent $63.3 million on capital expenditures for construction projects, including TX1, for which ARDP reimbursed us $23.5 million in cash during the quarter. And that last figure raises a question that we get a lot, so let me answer it now.
As Clay mentioned, ARDP is a 50:50 cost share. So why is the reimbursement for CapEx and OpEx never exactly half of what we spent? Two reasons. So first, we spend the money and then we invoice and then we get paid. So the amount we report as cash spent on capital projects and the associated reimbursements are affected by the timing of our cash payments versus cash receipts. Second, not everything we spend is ARDP-eligible. The cost share covers the XE100 design work and TX1.
It doesn't cover TX2 or TXL or subsequent fuel facilities. And as Clay mentioned, we're continuing to progress the design work on TX2. And so internally we track eligible ARDP costs separately from ineligible costs, but in our financials we report them together. So our financial statements are always going to include amounts of CapEx and OpEx that will never be reimbursed under ARDP. If you'll turn to slide 9, I'd like to walk you through our capital structure and balance sheet.
We ended June with $1.9 billion in cash and investments. That's $1.1 billion of cash and cash equivalents, $490 million of short-term investments, and $265 million of long-term investments. This liquidity is roughly double from where we were three months ago, thanks to the $1.1 billion of net IPO proceeds. We've invested this money conservatively. Feel free to call us boring, but our priorities are capital preservation, liquidity, and credit quality.
U.S. Treasuries, high-grade corporates, commercial paper, money market, and a few similar instruments. Nothing exotic and everything matures before we expect to need it. At the end of Q2 we had zero debt outstanding. Please turn to slide 10. Our SEC filings contain a number of non-GAAP measures, several of which are based on share count, and we thought that this additional color could help inform how you think about us. If you've ever pulled up X-Energy's ticker on a smartphone app or used the data from many online financial sites, the market cap you're looking at probably doesn't or, depending on which site, may not reflect what we believe is the implied equity value of X-Energy as a whole. So let me explain why and what I'd suggest you use instead. When we went public in late April, we reorganized the company as an umbrella partnership C-corporation, or an Up-C, which you can see diagrammed in the slide on the right-hand side. And here's the short version. Because our Up-C structure has two classes of stock and different shareholders at the parent and the subsidiary level, your stock app may only be looking at our Class A common shares outstanding when it calculates the market cap.
And these calculations are often excluding the Class B shares, which we think leads to a misleading outcome. So holders of Class B shares hold an equal number of common units in our subsidiary, and those units can be redeemed for Class A shares. And since the Class B shareholders can redeem their common units for Class A shares, we think they should be viewed as having similar economic rights to Class A shareholders. Mind you, if they redeem, their Class B shares will be canceled.
And so given the possibility for this exchange, we think that for purposes of calculating our implied equity value, it's more important to add together 280 million Class A shares plus 119 million Class B shares plus a combined total of 15 million shares of outstanding stock options, RSAs, and RSUs, and that would bring you to a non-GAAP total fully diluted share count of 414 million shares to use for calculating our implied equity value. So that's the share count we would use if we were calculating implied equity value, and that's also the share count that we'd use for earnings per share or, in our current case, loss per share comparisons.
It's a non-GAAP measure and you'll find the full reconciliation, along with other non-GAAP measures which we believe are useful, in the earnings release and the 10-Q. Note that in those documents we've also included an adjusted EBITDA calculation and an adjusted earnings per share calculation, currently loss per share, which consolidates together the A shares and the B shares. With that, I will now turn it back over to Clay.
Clay Sell, Chief Executive Officer
Thank you, Daniel. Let's go to slide 11. Let me provide a few wrap-up comments before we go to questions. X-Energy intends to lead the way in building a technology and business model that will enable us to completely reinvent the way the world thinks about constructing and operating new nuclear at scale and provide the broadest array of functionality with the greatest geographic flexibility globally. We believe we have the right technology backed by decades of development and operational experience.
We believe we have the deepest, experienced executive team. We believe we have the right business model. That's why X-Energy has earned the support and capital commitment of high-quality, blue-chip customers and partners like Dow, Amazon, and Centrica. We continue to enjoy strong support, as evidenced today, from our partner at the Department of Energy. We've been well received in the communities around our projects where we are building or developing.
We have secured significant supply chain commitments and are working to further de-risk our projects and provide line of sight for the deployment of our reactors while continuing to build out commercial manufacturing for our TRISO-X fuel. X-Energy is uniquely positioned for the opportunity of this day. That's how we succeed in our multiple ways to win. X-Energy isn't built around a single project or a single source of revenue. It's built around a sustainable platform intentionally designed to drive the growth of advanced nuclear for decades to come.
And with that, we will now take your questions.
OPERATOR
At this time, we will be conducting a question-and-answer session. To ask a question, please press star-one-one on your telephone and wait for your name to be announced. To withdraw your question, please press one-one again. Please stand by while we poll for questions. Our first question comes from Mark Bianchi with TD Cowen. Your line is open.
Esteban Narvalasin, Analyst at TD Cowen
Hey, this is Esteban Narvalasin on for Mark Bianchi. Thanks for taking my question. I had a question on the ARDP allocation. $2.1 billion allocated is a meaningful amount there. How much more is needed to reach the 50% share for the Dow project? Is that close to the mark, or is the total share amount not finalized yet?
Clay Sell, Chief Executive Officer
Yeah, as you know, Esteban, we've not previously disclosed in our S-1 or other documents what the full cost of the program is going to be. You will recall that this program provides a 50:50 commitment for three big scopes of work: the design of our reference plant, XE100; the design, construction, and licensing of our first fuel plant, TX1; and then, in addition to that, the full project cost, total project cost, of the Dow deployment in Seadrift, Texas.
So that's the full scope of the 50:50 cost share. We have always enjoyed a strong commitment from the Department of Energy to see this through, strong commitment from Capitol Hill to continue to provide the appropriations to fund that. I think this most recent billion-dollar increase is evidence of that. And I'm confident to the extent more dollars will be required, they will be provided by our partners at the Department of Energy and the Congress.
Because fundamentally, I mean, you'll recall the foundation of the ARDP program was created effectively in response to the technology peer competition that is currently underway with China. And the U.S. government made a decision years ago that we had to pick the best of our advanced technologies that could compete in the international market that we could first deploy here at home. And they chose X-Energy and they chose TerraPower to invest heavily.
And so I think the return on investment that we've been able to indicate through our partnerships with Amazon and Centrica and the significant backlog that we have identified makes the investments that the U.S. government are making to get us back into the nuclear game an extraordinary return. So we'll see where the number ends up. But I'm confident that the Department and our advocates in Congress will stay committed to the 50:50 cost share.
Esteban Narvalasin, Analyst at TD Cowen
Got it. Okay, thanks for that. And then my follow-up is on the Janus program. You're a finalist there with Project Pele before with the Zenith reactor, and I think that program is moving along, I think, with possible announcements maybe later this year. Are you actively pursuing that opportunity? I know the DoD seems to be looking at multiple technologies for that, and it seems like you have an advantage.
Clay Sell, Chief Executive Officer
With the high-temperature gas reactor type they're already working on. So could we expect anything later this year? I'll tell you, we have an extraordinary business opportunity in the deployment of XC100s and the manufacture of TRISO-X fuel. And that is what we are focused on. That is what our board has directed us to do. That is where we think the great economic opportunity is. That's where we think the total addressable market is. And we are focused on that $2.3 trillion TAM that we can access with the XC100 and our TRISO fuel business.
Specific announcements around the Janus program haven't been made, but I'll tell you, that's where our focus is on XC100.
OPERATOR
Thank you. Our next question comes from Joseph Osha with Guggenheim. Your line is open.
Joseph Osha, Analyst at Guggenheim
Hello. Thanks for the really interesting update this morning. You guys have talked this morning about the fuel arrangements that you've got with Centrus and General Matter, which is great. I'm wondering if you can clarify what the initial downloads are going to look like, whether that implies you might start with HALEU now, or is the plan still for the initial load to be LEU.
Clay Sell, Chief Executive Officer
Thank you. Thanks, Joe. So in our standard startup configuration for an XC100 plant, you accurately recall that we first load pebbles and then the subsequent core is. The second core is HALEU pebbles and it's HALEU pebbles thereafter. And that's just a matter of how we manage the neutronics and the reactivity in the startup sequence. That's why we start with LEU. But. But let's see, what was the rest of your question? Okay, so no change there. And you clarified.
I thought that the initial. The fact that the initial load was LEU was perhaps more a reflection of the fuel supply situation. No, it's just. It's part of the standard commissioning process, if you will. Absolutely not. The only reason we start with LEU on the Dow project is because that's the way we will start up every XC100 forever, because that's what's required to manage the initial startup neutronics and reactivity. But the HALEU that we need for the Dow project will be available to us when the plant, towards the end of this decade, when we need it to produce the first HALEU core for Dow.
And then, as I emphasize, or I tried to emphasize in my prepared remarks, we have secured through our initial contracts with Centrus and General Matter sufficient HALEU to cover the second and subsequent core loads for our first announced projects and even beyond that. And we'll provide greater color on a go-forward basis as to that. But on those contracts, we have agreed contractually not to disclose specific timing, specific quantities and specific pricing.
So I'm just trying to give you a shape of how we view the opportunity and the risk that we were seeking to reduce on our initial projects at X-Energy.
Joseph Osha, Analyst at Guggenheim
That makes sense. Thank you. And just a follow up, just so that I understand, is there anything at the pebble manufacturing level, materials handling, whatever, that varies between LEU and HALEU, or is it pretty much exactly the same thing?
Clay Sell, Chief Executive Officer
Well, we'll use the same facility, Joe, but there are different considerations based largely on criticality factors between LEU and HALEU. But we will be able to produce both of those cores in our TX1 facility. Okay.
Joseph Osha, Analyst at Guggenheim
All right, thank you. I'll yield back. Thank you for the answers.
OPERATOR
Thank you. Our next question comes from Michael Sullivan with Wolf. Your line is open.
Michael Sullivan, Analyst
Hey, good morning. Exciting news on the potential new customer.
Clay Sell, Chief Executive Officer
Hey, Michael, I need you to speak up. I can barely hear you. Okay.
Michael Sullivan, Analyst
Is this any better? Okay. Sorry about that. Yeah. Just wanted to ask, on the customer announcement that seems imminent here. You mentioned investor-owned utility. Do they have a hyperscaler lined up or is this preparing to just go into their rate base? How should we think about the structure of the order?
Clay Sell, Chief Executive Officer
Michael, I would love to give you additional details, but you're going to have to wait. And we will provide clarity on the when, the where, the who and other details in the near future. You know, real projects with real partners are real things and they require a significant level of appropriate early community engagement. And so, you know, the communities, in my view, the communities deserve to hear first what's coming to their communities even before the investor community does.
And so there is a process by which these agreements and plans get rolled out. And I think that's the right way to do business. And so all questions will be answered in time. But I just wanted to give an indication today that those announcements, the full details were imminent.
Michael Sullivan, Analyst
Okay, great. I can appreciate that. And just at the federal level, you had the ARDP update. I think the DOE recently announced some potential loans for utilities on the AP1000 side. Anything you see coming down the pike on the SMR side for your technology in terms of additional DOE funding outside of the ARDP that you already have,
Clay Sell, Chief Executive Officer
We are, we have ongoing dialogues with the full suite of financing entities inside the U.S. Government. Everything from the Energy Dominance Financing Group at the Department of Energy, the Strategic Capital Office at the Department of War, EXIM Bank, DFC, on and on. And we fully expect to be able to access those debt financing entities, you know, for a project. So those are ongoing discussions. When we have something to announce, of course, of course we will.
But yeah, ongoing discussions. On the AP1000 commitment, you know, I'll just tell you that I think there are places around the country where it may make sense to build AP1000s, but what I'm even more confident in is the opportunities and the customer interest in SMRs. I think just from a functionality, from a safety case, from a geographic siting standpoint, and just the quantum of the financial risk involved in bringing these projects to fruition, there are a lot of things that I think will move potential customers to our XE100 product.
I mean, that's certainly what we're seeing, but if a few AP1000s get built, I think the country's better off for it.
Michael Sullivan, Analyst
Great. Thank you very much.
OPERATOR
Thank you. Our next question comes from Julian Demolin Smith with Jefferies. Your line is open.
Julian Demolin Smith, Analyst at Jefferies
Hey, good morning team. Thank you guys very much. Appreciate the time. Maybe to just pick it up real quickly, can you add a little bit more color on the fuel supply agreements here? Nicely done on that front. You said it's sufficient to meet the announced project needs. Can you quantify whether that's in kilograms or gigawatt terms or what have you of what capacity and what it suffices to meet? And within that, are both of these agreements binding and what are the financial commitments on your side at this point, especially in terms of liquidity in the next few years?
Clay Sell, Chief Executive Officer
Julian, the agreements are binding. These are real agreements. We have contractually agreed with our counterparties not to disclose further details about timing, quantity and price. And so I'm not going to be in a position today to be fully responsive, but I will tell you it has given us great confidence that we have contractually retired the HALEU risk as it relates to the first HALEU core loads on our announced projects and beyond. That's what I'm prepared to say today.
And more details will be provided at the appropriate time. From a contractual obligation standpoint, Julian, let me just kind of go back and tell you the big picture. In our normal application of our business model in a fully up and running market, fuel would be procured by our customers: their uranium, the enrichment services, the deconversion, et cetera. That would be an obligation of our customers. They would buy it, they would hold the inventory.
So that begs the question, why is X-Energy doing that now? And the answer is because we are at the startup of the creation of a full, diverse, functioning and well supplied HALEU market. And we want to be part of creating that. We want to secure capacity that will serve as a competitive moat for our customers. And we fully intend to transfer those obligations to our customers, you know, at the appropriate time in the state of the project. So the benefit of us allocating some of our capital to this effort now and securing these contracts is we secure capacity.
We help accelerate the investment that we require from Centrus, General Matter and others to build out these HALEU cascades. And we can do that in a manner, quite frankly, before our customers are prepared to enter into those contracts, but with the full intention that we will assign those contracts to them and they will take them over on a go-forward basis and have that supply. Does that make sense?
Julian Demolin Smith, Analyst at Jefferies
Thank you for disclosing as much as you can. I appreciate that. In fact, let me actually look, interesting follow up related to this is you guys announced this incremental 70 acres, right, for fuel fab adjacent to heading TX1. Can you talk about what you're contemplating for this TX2 here? Just to kind of keep going on this fuel line of questioning and the timing on that just given the activity there. I mean, obviously talked about scaling of this up.
Clay Sell, Chief Executive Officer
Yeah. So just to scene set, you know, TX1 basically provides enough throughput capacity for 11 XE100s and we have in active development far more than that. And so we estimate at some point in the early 2030s we will need to bring, you know, TX2 online. What we are doing right now is completing the design, completing the cost estimates and beginning the early phases of our financing business plan to bring TX2 to fruition. But that's what we're doing now.
We have no further announcements as it relates to the initiation of construction or the final securing of financing for TX2.
Julian Demolin Smith, Analyst at Jefferies
Awesome, thanks for the details. And just to nitpick a little bit on the last question there as it pertains to the imminent announcement, that is with a utility or just what kind of counterparty, if I can. I know what you said a second ago. I appreciate it. And that's the last one. Thank you guys.
Clay Sell, Chief Executive Officer
I'll just repeat what I said in my prepared remarks. Major investor-owned utility. Julian, who knows, who knows them better than you?
OPERATOR
Thank you. As a reminder to ask a question, please press Star 11 on your telephone. Again, please press Star 11 to ask a question. Our next question comes from David Arcaro with Morgan Stanley. Your line is open.
David Arcaro, Analyst at Morgan Stanley
Hey. Thank you. Good morning. Let's see, great progress on the supply chain efforts this quarter on graphite and HALEU. I was wondering, is there an area that you would be focused on next in terms of de-risking further long-lead materials or equipment in your supply chain?
Clay Sell, Chief Executive Officer
Well, you've seen us, David, thanks for the question. We've been pretty active across a number of fronts and I think what we've communicated in the past is we're focused on the large steel components inside our nuclear steam supply system. Those are primarily produced by Doosan. And you've seen us enter into similar long-term supply agreements with Doosan. We have entered into. Have we announced our agreement on steam generator tubes. We have some other agreements in the works.
We've talked about HALEU, we've talked about graphite. What else? I think there are other types of graphite that we use inside the reactor that we're also focused on, but we have a fairly disciplined approach that is run by our outstanding supply chain team about where we need to invest early and, quite frankly, where we can secure advantage with some early capacity-securing agreements. And as we enter into those, we'll continue to make those announcements to the public.
David Arcaro, Analyst at Morgan Stanley
Yep, got it.
Clay Sell, Chief Executive Officer
Yeah, we have a robust level of discussions across the full range of target customers: IPPs, investor-owned utilities, industrial customers, hyperscalers, foreign utilities, etc. For some of those we are in the, you know, further phases of discussion and site feasibility and review, and so we, I think we have a very, very robust set of conversations. You know, it just takes time, and it takes a lot of work to get a real project to the start line.
And I remain confident that we have a very robust set of opportunities and multiple, multiple shots on goal for the remainder of the year.
OPERATOR
Thank you. I'm showing no further questions at this time. I would now like to turn it back to Clay Sell, Chief Executive Officer, for closing remarks.
Clay Sell, Chief Executive Officer
Well, thank you, everyone. I appreciate you joining us today. I'm a little bit disappointed that the great and eloquent Daniel Gross did not receive any follow-up questions, so we'll shoot for that in the next quarter. We do look forward to sharing additional updates as we continue to execute against our near-term milestones and show you how we are positioning this company, X-Energy, to be the leader in the nuclear industry. Really appreciate your time, and we look forward to seeing you on the road and in our next conference call.
Thank you.
OPERATOR
This concludes today's conference call. Thank you for participating. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
Login to comment