OKLO

1. Executive Summary

• Oklo accelerated regulatory, commercial, and project-execution milestones in Q2–Q3 2025, strengthening its path to first power between late 2027 and early 2028.
• Liquidity materially increased following a sizable follow-on equity raise; management reiterated full‑year cash use guidance despite potential CapEx acceleration to pull schedule left.
• Strategic partnerships deepened across the stack (construction, controls/automation, fuels, cooling/power for data centers), and U.S. federal tailwinds expanded (executive orders, DOE/NRC initiatives, fee reductions).

Key Takeaways

• Liquidity upgrade: Q2 follow‑on equity raised ~$460M gross, ending Q2 with ~$683M cash and marketable securities; FY25 cash used in operating activities guidance maintained at $65–$80M.
• Licensing momentum: NRC completed Phase One pre‑application readiness with no significant gaps; NRC accepted Oklo’s Licensed Operator Topical Report for review; Phase One COLA filing targeted early Q4 2025.
• Project execution: Lead constructor selected; preconstruction slated with groundbreaking targeted for late Q3 2025 at INL; Air Force named Oklo intended awardee for Eielson AFB microreactor PPA.
• Ecosystem build‑out: New ABB MOU and digital monitoring room commissioned for operator training and centralized fleet operations; deepening collaborations with Vertiv, Lightbridge, Liberty Energy, and KHNP.

2. Financial Performance

Capital Raises & Proceeds

• Jun 12, 2025: Completed follow‑on equity offering raising ~$460M gross (supersedes the earlier ~$400M price announcement). Use of proceeds: general corporate purposes, working capital, CapEx, and potential investments. Ending Q2 cash and marketable securities: ~$683M.
• Prior capital items supporting liquidity and commercialization:
• $25M prepayment from Equinix (2024) within a 500 MW strategic partnership.
• $10M strategic investment from Liberty Energy (2023).

Investor sentiment: Successful upsizing/exercise indicates constructive demand for Oklo’s equity in the wake of growing federal support and commercial pipeline visibility.

Early Revenue Initiatives

• Radioisotopes (Atomic Alchemy): Acquisition closed Mar 2025 for $25M all‑stock; expected to begin initial revenues prior to completion of first production reactors; site characterization underway (Jun 2025).
• Defense PPA: Intended award for Eielson Air Force Base (Jun 2025) under a long‑term PPA; establishes recurring revenue framework once operational.
• Data centers and industrials: Non‑binding 12 GW MPA with Switch (Dec 2024); 500 MW strategic partnership with Equinix (2024, includes prepay); 750 MW in LOIs (2024). FY25 partnerships broadened with Vertiv (power/cooling reference designs) and Liberty Energy (integrated managed power solutions), plus RPower phased power for near‑term deployments.

Expense Management & Cash Flow

• Q2 2025 operating loss: $28.0M (includes $11.4M SBC).
• Q1 2025 operating loss: $17.9M; cash used in operating activities $12.2M.
• FY25 cash used in operating activities guidance: $65–$80M reiterated, despite opportunities to accelerate modest CapEx from 2026 into 2025.
• Interpretation: Current liquidity provides multi‑year runway at present burn rate; project CapEx will likely be addressed via partnerships, non‑recourse/project finance, and government programs to protect corporate cash.

3. Guidance and Future Outlook

Production Ramp–Up

• INL Aurora powerhouse:
• Groundbreaking targeted late Q3 2025; preconstruction activities scheduled.
• Phase One COLA filing planned early Q4 2025 after NRC feedback incorporation.
• Commercial operations target: late 2027–early 2028.
• Operator readiness: NRC accepted Oklo’s product‑based operator licensing framework for review; digital monitoring room (with ABB tech) commissioned to train operators and support simulators.

Expansion Plans

• Defense: Intended award at Eielson AFB; ongoing DoD engagement and advanced microreactor pilot.
• Federal acceleration: Selection for three DOE Reactor Pilot Program projects aiming to demonstrate criticality in at least three test reactors by Jul 4, 2026, potentially compressing learning curves.
• Fuels and supply chain: MOU with Lightbridge to explore co‑located fuel fabrication and recycling R&D; collaboration with KHNP for design development, manufacturability, and supply chain build‑out.

Operational Targets

• Centralized operations model to monitor multiple plants, lowering staffing costs and accelerating fleet scalability.
• Regulatory cost efficiency: NRC licensing fee reduction (~55%) slated for Oct 1, 2025, under the ADVANCE Act, improving economics for advanced reactor licensing.

4. Strategic Positioning and Initiatives

Cost Management

• Maintained FY25 operating cash use guidance despite schedule acceleration opportunities.
• Pursuing standard design, repeatable licensing artifacts (e.g., operator topical report), and centralized operations to structurally reduce lifecycle OpEx.
• Anticipating lower NRC fees to support a more capital‑efficient licensing cadence.

Product Development

• Aurora fast reactor platform with BOO model; enhanced by ABB digitalization/automation and Vertiv thermal/power solutions for high‑density compute loads.
• Fuel cycle strategy: Advancing fuel recycling and exploring co‑located fabrication with Lightbridge to derisk core supply and enable product flexibility.
• Materials validation: DOE Voucher Program engagement for advanced structural materials testing.

Market Expansion

• Targeting AI/hyperscale data centers, defense/military bases, and industrial loads, with a bridge via Liberty Energy and RPower natural gas for immediate power and phased transition to nuclear.
• Radioisotopes provide diversified, nearer‑term addressable markets (healthcare, research, defense).

5. Competitive Positioning and Market Trends

Market Positioning

• Early mover with a DOE site use permit at INL, fuel award, and advanced NRC engagement; >14 GW pipeline across commercial and federal customers.
• BOO model positions Oklo as an energy platform provider, not an EPC vendor, aligning incentives with long‑term offtake.

Competitive Strengths

• Regulatory momentum (readiness assessment completion, operator topical acceptance).
• Liquidity to advance schedule and absorb pre‑revenue development.
• Ecosystem partnerships spanning construction, controls, fuel, cooling, and industrial power integration.
• Fleet operations model that may reduce per‑unit operating overhead and speed replication.

Emerging Industry Trends

• AI-driven load growth elevates baseload needs and behind‑the‑meter solutions.
• Federal policy tailwinds: executive orders, DOE/NRC alignment, accelerated NEPA, strengthened loan programs, and tax incentives.
• Domestic fuel and supply chain re-onshoring; increasing urgency for energy resilience at defense and critical infrastructure sites.

6. Technology and Innovation Strategy

Technological Advancements

• Sodium fast reactor architecture; emphasis on inherent safety characteristics and efficient operation.
• Digital monitoring/training center enables scalable operator training and simulation fidelity.

New Product Developments

• Data center reference designs (with Vertiv) for integrated power and thermal management.
• Integrated power offerings (with Liberty Energy and RPower) to accelerate deployments and de-risk customer transitions.
• Fuel fabrication co-location feasibility (with Lightbridge) and radioisotope production build‑out (Atomic Alchemy).

Alignment with Market Needs

• Solutions tailored to high‑density compute and mission‑critical uptime requirements.
• Centralized operations and standardization aligned to speed-to-market and cost targets for multi‑site fleets.
• Radioisotope supply addresses acute medical and industrial shortages.

7. Risk and Reward Analysis

Growth Catalysts

• Groundbreaking at INL and Phase One COLA submission (Q3–Q4 2025).
• Formalization of Eielson AFB PPA and progression to construction.
• DOE Reactor Pilot test reactor milestones by mid‑2026.
• Advancements in fuel fabrication/recycling partnerships and initial radioisotope revenues.

Downside Risks

• Licensing delays or evolving regulatory requirements.
• Fuel supply and fabrication scaling risk despite initial fuel award and Lightbridge collaboration.
• Supply chain constraints and inflation impacting long‑lead components.
• Capital intensity and dependence on project finance; interest rate sensitivity.
• Technology execution and first‑of‑a-kind schedule risks; public perception and siting.

Valuation Metrics

• Traditional P/E/EV/EBITDA not meaningful pre‑revenue; focus on:
• Liquidity runway: ~$683M cash vs. $65–$80M FY25 operating cash use guidance supports multi‑year corporate runway pre‑revenue (ex‑project CapEx).
• Milestone‑based de‑risking: Regulatory/groundbreaking/PPA finalization events likely to narrow discount rates applied to out‑year cash flows.
• Project finance leverage: Higher certainty of offtake and policy support could expand access to non‑recourse financing, lowering WACC for project‑level DCFs.
• Valuation framework: Scenario DCF on first waves of units (e.g., INL + early commercial deployments), layered with a pipeline option value; sensitivity to PPA price, capacity factor, capex per MW, and cost of capital.

8. Investment Thesis

Investment Rationale

• Improving regulatory visibility, strong federal tailwinds, and a fortified balance sheet reduce execution risk into 2026.
• Commercial traction across defense and data centers with structured offtake pathways (MPA, LOIs, intended awards, prepayments).
• Ecosystem build‑out (ABB, Vertiv, Lightbridge, KHNP, Liberty, RPower) enhances delivery confidence and cost/operational efficiency.
• Diversification via radioisotopes offers nearer‑term revenue optionality and incremental technology credibility.

Price Target Justification

• Directional bias: Positive revision warranted versus pre‑raise assessments given:
• Higher liquidity, reduced financing risk.
• Accelerating regulatory and project milestones (COLA Phase One filing, groundbreaking).
• Additional DOE Reactor Pilot selection, improving learning curves and probability of timely deployment.
• Numeric target not provided due to lack of share count/market data in documents; we would anchor a range using milestone‑weighted probability DCF for first deployments and a pipeline option value, sensitized to WACC and PPA assumptions.

Influencing Market Dynamics

• AI/data center load growth, interest rates (project finance costs), policy incentives/loan programs, and NRC fee reductions will drive valuation dispersion.
• Progress on fuel assurance and supply chain localization can compress risk premia.

9. Macroeconomic and Industry Trends

Regulatory Changes

• Executive orders and multi‑part legislation bolster nuclear with preserved credits, accelerated NEPA, stronger loan programs, and bonus depreciation.
• NRC modernization and ~55% fee reduction (effective Oct 1, 2025) under the ADVANCE Act lower licensing friction for advanced reactors.
• DOE Reactor Pilot Program selection adds federal support for near‑term demonstration.

Supply Chain Dynamics

• Strategic collaborations with KHNP, Lightbridge, DOE labs, and vendors (ABB/Vertiv) target manufacturability, materials validation, and domestic fuel/fabrication resiliency.
• Inflation and component lead times remain watch items; early engagement and standardization mitigate risk.

Technology Adoption Trends

• Rapid growth in AI/HPC power density accelerates demand for behind‑the‑meter baseload and integrated thermal solutions.
• Defense resilience and critical infrastructure hardening are prioritizing microreactors/SMRs.
• Rising acceptance of nuclear’s role in decarbonization, particularly for 24/7 zero‑carbon load.