OKLO

1. Executive Summary

• Oklo advanced from planning to execution in Q3 2025: broke ground and began earthworks at the first commercial powerhouse, Aurora‑INL, while securing key DOE approvals that streamline fuel fabrication and licensing.
• Financially, the company ended Q3 with a robust liquidity position of approximately $1.2B in cash and marketable securities; 2025 full‑year operating cash use guidance remains $65–$80M.
• Near‑term revenue optionality strengthened via Atomic Alchemy (radioisotopes) targeting pilot operations by mid‑2026, while multi‑year growth is anchored by the Aurora‑INL COD target late‑2027 to early‑2028.

Key Takeaways

• Groundbreaking plus DOE authorizations and NRC acceleration de‑risk schedule toward first power in 2027/28.
• Balance sheet strength (≈$1.2B cash/securities) supports multi‑year execution with modest 2025 cash use.
• DOE Reactor Pilot Program and Fuel Line Pilot Projects materially advance domestic advanced‑fuel manufacturing and licensing speed.
• Early revenue vectors (radioisotopes by mid‑2026; defense/data center PPAs) complement long‑dated power sales.

2. Financial Performance

Capital Raises & Proceeds

• Follow‑on equity offering priced June 12, 2025: raised ~$460M gross (per Aug 11, 2025 update; supersedes initial ~$400M pricing announcement). Q3 cash and marketable securities ended at ~$1.2B.
• Q3 net interest income of $7.1M reflects carry on large cash balances.
• Strategic capital signals (non‑cash/commitment): potential up to $2B newcleo‑affiliated investment vehicle (subject to approvals); planned up to $1.68B privately funded Advanced Fuel Center (Tennessee) is capex, not a financing inflow.

Early Revenue Initiatives

• Atomic Alchemy: DOE‑selected (VIPR) pilot facility targeting operational status by mid‑2026; near‑term lab‑scale production and revenue potential.
• Defense: Notice of Intent to Award for Eielson AFB microreactor with a long‑term PPA (terms undisclosed).
• Commercial/AI & Data Centers: Non‑binding 12 GW Master Power Agreement with Switch; collaborations with Vertiv, RPower, and Liberty Energy establish pipeline and integration pathways for future offtake and onsite deployment.

Expense Management & Cash Flow

• Q3 operating loss: $36.3M (incl. $9.1M non‑cash SBC); loss before taxes: $29.2M after interest income.
• YTD cash used in operating activities (adjusted): $48.7M; full‑year guidance maintained at $65–$80M.
• Trend: expenses stepped up with project mobilization and hiring, partly offset by higher interest income and disciplined cash use against guidance.

3. Guidance and Future Outlook

Production Ramp–Up

• Aurora‑INL: Groundbreaking complete; earthworks/excavation underway; Kiewit Nuclear Solutions as constructor. COD target remains late‑2027 to early‑2028.
• Licensing: NRC accepted Principal Design Criteria topical report on an accelerated schedule; draft evaluation expected early‑2026. DOE authorization pathway intended to enable continued construction prior to full NRC operating approvals, reducing idle time.
• Fuel: DOE approval of Nuclear Safety Design Agreement (NSDA) for the Aurora Fuel Fabrication Facility (A3F) at INL; aligned to support first core fabrication.

Expansion Plans

• Fuel Line Pilot Projects: Selected to build and operate three advanced fuel-fabrication facilities, accelerating domestic supply chain.
• Advanced Fuel Center (TN): First phase fuel recycling facility (privately funded up to $1.68B); NRC pre‑application engagement underway; early‑2030s production goal.
• Strategic partnerships: newcleo (potential US fuel infrastructure investment), Blykalla (tech/supply chain), Lightbridge (co‑located fabrication feasibility).

Operational Targets

• Maintain 2025 operating cash use within $65–$80M.
• Atomic Alchemy pilot operational by mid‑2026; initial revenue potential.
• Advance product‑based operator licensing and centralized monitoring to reduce lifecycle O&M and accelerate fleet scalability.

4. Strategic Positioning and Initiatives

Cost Management

• Leverage DOE authorization sequencing to continue construction pre‑operations approval, minimizing idle capex.
• Centralized monitoring and product‑based operator licensing to lower operating overhead per site.
• Vertical integration across fuel recycling, fabrication, and operations to control input costs and margins at scale.

Product Development

• Completed full‑scale fuel‑assembly flow testing at Argonne (validates models/manufacturability).
• Irradiation experiments at Aurora‑INL (with INL/BEA) to accelerate fuel/materials qualification and cost reductions.
• Training/Monitoring room with ABB commissioned to support operator training and licensing.

Market Expansion

• Multichannel go‑to‑market: defense resilience, AI/data centers, radioisotopes, and future utility partnerships (e.g., TVA collaboration on recycling and potential power sales).
• International collaboration enhances supply chain resilience and potential cross‑border component/fuel services.

5. Competitive Positioning and Market Trends

Market Positioning

• One of the few advanced reactor developers with a DOE site‑use permit, DOE fuel award, and now active site construction.
• Selected for 3 DOE Reactor Pilot Program projects and Fuel Line Pilot Projects, positioning Oklo at the center of US fast‑reactor deployment and advanced fuel manufacturing.

Competitive Strengths

• Vertically integrated fuel cycle with recycling capabilities; access to EBR‑II material and DOE partnerships.
• Regulatory momentum: accelerated NRC reviews and DOE authorizations compress time‑to‑market.
• Strong liquidity to fund near‑term milestones; deep commercial pipeline (>14 GW announced customers/partners).

Emerging Industry Trends

• Policy tailwinds: ADVANCE Act, executive orders, NRC fee reductions (~55% from Oct 1, 2025) and modernization efforts.
• Soaring AI/data center load growth and grid constraints increase premium on 24/7, low‑carbon, on‑site generation.
• Strategic push for domestic fuel sovereignty and recycling to reduce dependence on foreign enrichment and supply risks.

6. Technology and Innovation Strategy

Technological Advancements

• Sodium‑cooled fast reactor (up to ~75 MWe) using metal fuel; inherent safety and high capacity factor design objectives.
• Fuel recycling to reduce waste volumes and lower fuel costs; A3F and TN Advanced Fuel Center underpin long‑term fuel assurance.
• Materials and thermal‑hydraulics R&D (DOE vouchers, Argonne/INL programs) to optimize performance and cost.

New Product Developments

• Aurora‑INL as a platform for in‑reactor irradiation experiments and data under commercial conditions.
• Pluto test reactor and VIPR initiatives expand the fast‑reactor data ecosystem and supply chain readiness.
• Radioisotope production facilities through Atomic Alchemy to serve healthcare/defense/research markets.

Alignment with Market Needs

• Designs tailored for high‑reliability baseload at AI/data centers and defense sites; modular siting and centralized ops for fleet economics.
• Recycling addresses fuel availability and cost pressures while supporting national energy security mandates.

7. Risk and Reward Analysis

Growth Catalysts

• Execution at Aurora‑INL (construction ongoing) with COD 2027/28.
• Regulatory milestones: NRC PDC draft evaluation in early‑2026; DOE authorizations enabling schedule continuity.
• Near‑term revenue option via Atomic Alchemy (mid‑2026 pilot operations).
• Large, strategic offtake opportunities: Eielson AFB PPA, Switch 12 GW, and data center partnerships.

Downside Risks

• Licensing/schedule risk: unforeseen NRC/DOE review outcomes, protests, or scope changes.
• FOAK execution risk: cost overruns or delays at first plant and fuel facilities.
• Supply chain/fuel risk: timelines for advanced fuel line scale‑up; reliance on regulatory approvals for recycling.
• Commercial risk: non‑binding agreements may not convert; counterparty timing/pricing uncertainty.
• Policy/market risk: shifts in federal/state priorities or interest rates affecting capital intensity.

Valuation Metrics

• Balance sheet: ~$1.2B cash/securities at Q3; 2025 operating cash use guided to $65–$80M (ex‑capex for large builds), implying multi‑year runway for development milestones.
• Project economics (illustrative, assumption‑based):
• Plant size: 50–75 MWe, CF ~90–95%.
• PPA: $80–$120/MWh; Opex: $10–$20/MWh; capital intensity: $3,000–$6,000/kW (FOAK at high end).
• Implied unlevered IRR sensitivities span mid‑single digits (low PPA/high capex) to mid‑teens (high PPA/learning‑curve capex).
• Sum‑of‑the‑parts approach recommended: add (1) net cash, (2) risk‑adjusted NPV of Aurora‑INL, (3) optionality for subsequent units, (4) fuel/recycling platform value, and (5) Atomic Alchemy radioisotope business.

8. Investment Thesis

Investment Rationale

• Strong policy/regulatory tailwinds with DOE/NRC engagement, plus multiple DOE program selections, materially reduce go‑to‑market friction for advanced fast reactors and fuel lines.
• Capital position and partnerships support execution across power, fuel, and radioisotopes, creating diversified revenue optionality.
• First‑mover advantage at Aurora‑INL, combined with vertical fuel integration and operator model, targets superior long‑term margins and fleet scalability.

Price Target Justification

• Without current market cap/price in the provided materials, a numerical target is not set. Use a framework that sums:
• Net cash (~$1.2B).
• Risk‑adjusted NPV of Aurora‑INL (discounted to 2025; FOAK risk weighting).
• Pipeline option value (defense + data centers) via probability‑weighted unit deployments over 10–15 years.
• Fuel/recycling platform value (A3F + TN facility) using staged capex and throughput ramp scenarios.
• Atomic Alchemy DCF (radioisotope revenues commencing mid‑2026 pilot; scaling thereafter).

Influencing Market Dynamics

• Rising AI/data center loads, grid constraints, and decarbonization mandates support premium PPAs for 24/7 clean baseload.
• Regulatory modernization (ADVANCE Act, NRC fee cuts, accelerated topical reviews) improves timelines and cost of capital.
• Domestic fuel security initiatives and recycling economics can structurally enhance lifecycle margins.

9. Macroeconomic and Industry Trends

Regulatory Changes

• ADVANCE Act implementation and executive orders prioritize advanced nuclear deployment; NRC adopting accelerated topical reviews and reducing fees (~55% from Oct 1, 2025).
• DOE Reactor Pilot Program and Fuel Line Pilot Projects provide clear pathways to expedite siting, fuel fabrication, and demonstration under federal oversight.

Supply Chain Dynamics

• U.S. push to onshore advanced fuels (Oklo’s selection for three fuel‑fabrication facilities) addresses enrichment/HALEU constraints.
• Partnerships with newcleo, Blykalla, Lightbridge, and KHNP diversify supply and manufacturing capabilities; Kiewit anchors EPC execution.
• Recycling initiatives (TN Advanced Fuel Center) target long‑term cost and supply resilience.

Technology Adoption Trends

• Data center power demand accelerates adoption of on‑site, reliable, clean generation; growing interest in integrated power/thermal solutions (Vertiv, RPower, Liberty).
• Defense and critical infrastructure prioritize energy resilience, supporting microreactor pilots and long‑term PPAs.
• Broader acceptance of fast‑reactor technologies and fuel recycling as practical solutions to decarbonization and waste minimization.