ASP Isotopes Inc. (ASPI) Earnings Call Transcript & Summary

Good day, and welcome to the ASP Isotopes business update call. Please note this event is being recorded. I would now like to turn the conference over to Shveta Dighe, Head of Investor Relations. Shveta, your line is open. Please go ahead.

Good morning, and thank you for joining ASP Isotopes business update call. I'm Shveta Dighe, Head of Investor Relations at ASP Isotopes. Joining me today are Paul Mann, Executive Chairman and Chief Executive Officer; Heather Kiessling, Chief Financial Officer; and Dr. Ryno Pretorius, Chief Executive Officer of our Nuclear Energy subsidiary, Quantum Leap Energy. Our remarks today include forward-looking statements, which are subject to risks and uncertainties that can cause actual results to differ materially from those discussed today. We encourage you to view the forward-looking statements disclosures included on Slide 2. Additional information on relevant risk factors is described in our filings with the SEC. We undertake no obligation to update forward-looking statements, except as required by law. With that, I'll turn the call over to Paul.

Thank you. Good morning, everyone, and thanks for joining us today. Here is how we will structure today's call. I'll begin with a corporate overview and our key themes for 2026. I will then walk through each of our product and business segments. Heather will cover our financial performance and capital position. We'll close out with our upcoming milestones and EBITDA outlook before opening the line for questions. We are transitioning from a company that has built infrastructure to one that will be delivering commercial products across multiple high-value end markets. Over the past 4 years, we've built 3 enrichment facilities in South Africa using our proprietary aerodynamic separation process and quantum enrichment technologies. These technologies span nuclear medicine, electronics and nuclear energy. Let me walk you through our 2026 plan. First, we expect first commercial shipments of Silicon-28, Ytterbium-176 and Carbon-14 this year. Each of these products serves a different critical end market, electronics, nuclear medicine, nuclear fuels and each is a limited global supply. Second, on radiopharmaceuticals, our business continues to grow, and we're expanding operations beyond South Africa into the United States and other jurisdictions to meet increasing demand for radiotherapeutics. Third, our helium and LNG operations at the Virginia Gas project are progressing towards nameplate capacity with drilling now complete approximately 4 months ahead of schedule. This positions us as a meaningful contributor to global helium supply at a time when approximately 25% to 30% of the world supply is offline. And fourth, Quantum Leap Energy continues its path towards becoming an independent public company with the contents S-1 submitted. The key takeaway here is that we are no longer a development stage company with our critical materials platform with revenue potential across all business lines. We have built one integrated critical materials platform serving 3 multibillion-dollar end markets. In each one, supply chains are constrained, geographically concentrated or strategically vulnerable. And each one, no credible Western alternative exists at commercial scale today. That is a position we have built is what makes this platform differentiated. In nuclear medicine, we are at an intersection of 2 powerful trends, the global shift towards targeted cancer therapies and a critical shortage of isotopes that make those therapies possible. Ytterbium-176 is the feedstock for Lutetium-177, a medical isotope used in targeted therapy for neuroendocrine tumors and prostate cancer. That supply runs predominantly through Russia. We are building a Western alternative. Carbon-14 is a separate but equally critical market, a regulatory requirement in pharmaceutical drug development globally with an acute supply shortage. And through radiopharmaceuticals, we closed the loop producing isotopes and delivering finished doses direct to patients across South Africa and the United States. On electronics, we're building a next-generation electronic gases company. Supplying a semiconductor fabrication facility means delivering a full suite of high-purity materials, Silicon-28, helium and fluorinated gases. The semiconductor industry has exhausted what traditional silicon deliver. The next generation of chips requires isotopic materials for superior thermal conductivity and quantum computing requires them for qubit stability. There is no commercial supplier of Silicon-28 at scale anywhere in the world today. We are at with 3 signed purchase orders. And every semiconductor fab on earth needs helium to operate. We own the most concentrated helium resource in the world. Nuclear fuels through Quantum Leap Energy, nuclear power is back on the global agenda, but the fuel supply chain is not ready. HALEU, LEU+, Lithium-7, the materials next-generation reactors depend on have no secure Western supply chain. QLE exists to fix that. Let me take you through our near-term milestones for each segment. Let me start with our nuclear medicine update, beginning with our first quantum enrichment plant. This plant uses our proprietary laser-based quantum enrichment technology and is currently producing Ytterbium-176. Ytterbium-176 is the feedstock for Lutetium-177, the active ingredient in Novartis' Pluvicto, one of the most important radiopharmaceutical therapies for metastatic prostate cancer. Demand is growing rapidly. Supply today runs predominantly through Russia. We are building the credible Western alternative at commercial scale. We shipped our first Ytterbium-176 sample in September 2025. In October 2025, we experienced a brief operational pause, which has been fully resolved. The plant is back in operation and enriching product. We believe our plant is capable of reaching approximately 1 kilogram per year with approximately 2 kilograms of indicated customer demand. We're entering this market with demand ahead of our initial capacity. We expect first commercial shipments around midyear or third quarter 2026. Our carbon plant has been enriching Carbon-12 and building operational confidence throughout its time in service. Science is not in question. Carbon-14 is our near-term commercial priority for this plant. Carbon-14 is used to trace how drugs metabolize in the body. It is not operational. It's a regulatory requirement in drug development. Global supply is acutely constrained. We've signed a take-or-pay contract with a North American customer, minimum $2.5 million per year, potential upside to $5 million or more, contracted recurring revenue. The feedstock has now shipped out of Canada and is being processed in the United States. We expect delivery to South Africa by the end of this month. The concentration of Carbon-14 in that feedstock will determine our revenue timing. At 0.5% concentration, we expect to book revenue in Q3. At 1% or higher, we book in Q2, and we'll know once we receive it. To be direct, this is a timing issue, not a science issue. The plant works, the contract is signed. PET Labs is our radiopharmaceutical platform and a business that is scaling fast. Revenue grew from $3.9 million in 2024 to $5.7 million in 2025, driven by capacity expansion and favorable pricing. Our first electronics at peak utilization, and our second came online in July 2025. South Africa is no longer a proof of concept. It is a fully operational radiopharmacy delivering record doses. And the playbook we built there is exactly what we are replicating in the United States. On U.S. expansion, we acquired East Coast Nuclear in Florida, our first U.S. entry, a spec focused initially with PET capability planned for 2027. The company acquired a second site in North Carolina, now delivering spec services for PET expansion planned 2028. We have an active pipeline of additional radiopharmacy acquisition targets in due diligence. 2026 revenue target is $10 million or more, roughly double that of 2025. Now let me turn to Silicon-28 and where we stand on commercial delivery. Isotopic Silicon-28 is a key material in the development of solid-state quantum computing and advanced semiconductor architectures. By removing the nuclear spin noise present in natural silicon, enriched Silicon-28 provides a pristine environment for qubits, dramatically improving coherence times and overall device performance. This unique material advantage is crucial for building scalable, fault-tolerant quantum processes that can operate reliably at industrial scale. We have signed 3 purchase orders, one with a major U.S. semiconductor company, one with a large global industrial gas company and one with a large U.S. buyer. We shipped first enriched samples in August 2025. Emissions is tracking exactly in line with our original calculations. Technology is working precisely as designed. Two customers visited the plant in October and November, and those visits were constructive and collaborative. We jointly agreed to make modifications to the plant for safety, operational efficiency and long-term plant robustness. We intent with them because we want this plant to run reliably for years, not just for the first batch. We expect to ship the first Silicon-28 product during the second quarter of 2026. We completed the Renergen acquisition on January 6, 2026. Let me explain why helium is central to our strategy and why the timing of this acquisition matters. We own the most concentrated helium resource in the world. Qatar averages 0.05% helium concentration. Russia is 0.06% and the U.S. averages 0.35%. Our 3 state wells average over 3%, and we have seen concentrations as high as 12%. Now Phase 1 status, well drilling is complete, 4 months ahead of schedule with flow rates up to 16x those of earlier wells. We're ramping to nameplate capacity expected in the third quarter of 2026. At nameplate, Phase 1 produces approximately 2,500 gigajoules per day of LNG, 1 gigajoule is approximately 1 MMBtu and 58 Mcf per day of helium. 60% of Phase 1 LNG is already contracted, and we expect positive operational cash flow before year-end 2026. Phase 2 is the transformational step, 34,000 gigajoules of LNG per day and approximately 895 Mcf per day of helium, representing roughly 7% of projected global supply. Phase 2 financing benefits from $750 million of committed debt, $0.5 billion from the U.S. DFC and $250 million from Standard Bank, unlocked by a $170 million capital commitment. The U.S. government has designated this facility as critical to national infrastructure. Quantum Leap Energy is our nuclear fuel subsidiary. I want to note upfront, we are limited in some of what we can say today because QLE is in the S-1 registration process with the SEC. Our comments will be consistent with publicly disclosed information. The comp S-1 was submitted in November 2025. The QLE spinout is a 2026 event. I'll ask you to watch for update as we work through the SEC process. With that, I'll turn the call over to Heather.

Thank you, Paul. Good morning, everyone. I'll walk you through our key financial metrics for the year ended December 31, 2025. At this stage, we consider our key metrics to be revenue, cash and our capital position. Total 2025 revenue was $23.8 million compared to $4.1 million in 2024, an increase of 480%. This reflects our full year of radiopharmacy operations in 2025 and the investment in Skyline, which is comprised of $5.7 million from specialized isotopes and services and $18.1 million from construction services, which is from Skyline. Looking at just product revenue, 2025 was $5.7 million from our radiopharmacies, an increase of 46% compared to the $3.9 million in 2024, reflecting our growth in radiopharmacy operations and expansion into the United States. As of December 31, 2025, ASP Isotopes had cash, cash equivalents and marketable securities of $333 million. During 2025, the company significantly strengthened its balance sheet, raising over $345 million in total capital through the issuance of common stock and convertible notes. This included $199.7 million in net proceeds from a stock issuance in October 2025 and $42.2 million from a private placement of Quantum Leap Energy convertible notes in November 2025. We are well positioned for executing our plans. With that, I will hand it back to Paul.

Thank you, Heather. Let me walk through our 2026 milestones. The company expects the first enriched Silicon-28 product to ship in the second quarter of 2026. The company anticipates initial Carbon-14 commercial shipments around midyear, contingent on the timing receipt of feedstock from our Canadian supplier. And the company expects initial commercial shipments for Ytterbium-176 around midyear or the third quarter of 2026. The company expects to obtain helium Phase 1 nameplate capacity during the third quarter of 2026. And for radiopharmaceuticals, we expect continued growth of the radiopharmacy operations, and we expect to advance 4 pipeline assets into Phase 1 human clinical trials. Today, we are sharing a segment level range of how we get to a greater than $300 million EBITDA target in 2031. Starting with electronic gases, we're targeting between $150 million and $300 million. This is driven by Silicon-28, helium and a broader enriched electronic gases portfolio that is building behind them. Demand here is structural, not cyclical. It grows as chips get smaller, data centers scale and quantum computing moves towards commercialization. There's no credible or western supplier of Silicon-28 at commercial scale today, and we are building that. Natural gas contributes between $100 million and $200 million. This is the LNG that comes up alongside the helium in the Virginia Gas project. Our wellhead costs of $0.35 per MMBtu, the economics are compelling. This is not our core business, but at this cost structure, the returns are exceptional. On medical isotopes, this should contribute between $40 million and $100 million, Ytterbium-176 and Carbon-14. Both products address acute supply shortages in their respective markets. Ytterbium-176 supply today runs predominantly through Russia, and Carbon-14 supply is equally constrained. We are building the Western alternative for both. In Radiopharmaceuticals contributes between $40 million and $100 million. PET Labs, a business that's already generating revenues is growing and expanding internationally. It delivered greater than 40% revenue growth in 2025, it's targeting $10 million in 2026. Taken together, these 4 segments get us to greater than $300 million in EBITDA in 2031. Let me close with a few brief remarks. When we listed on NASDAQ, we made a set of commitments, build the technology and prove that it works. We have done that. Our science works, our customers are engaged and our milestones ahead of us are defined and achievable. The world needs what we are building, but the platform, the capital and the team to deliver, I'm confident in what this year holds. Thank you all for your continued interest and support. Operator, we're ready to open the line for questions.

[Operator Instructions] We will now take our first question, which comes from the line of George Gianarikas from Canaccord Genuity.

Maybe first set of questions just to focus on quantifying something. So for 2026, you talked about operationalizing several of your assets. So can you help us at least understand a range of revenue that we should expect for the firm for the full year, particularly as you're bringing to life, as we said, helium, natural gas and a few of the isotopes? And also as an add-on to that, the $300 million in EBITDA that you discussed, just to be clear, does not include anything regarding QLE.

Thanks, George. So I'll take, first of all, the range of revenues for the firm for full year 2026 and then regarding the $300 million guidance and QLE. So it's quite challenging to give you an exact guidance for 2026, given we don't know exactly which month or which quarter that the plants will start up and start shipping in. So let me kind of give you an idea of what the annualized number may look like. So for Silicon-28, it's going to be -- my guess is low single-digit millions of dollars. But again, it depends on when it starts up and demand. As I said, we've signed 3 contracts with customers. There's lots more customers potentially interested. We haven't signed those contracts yet. So a number of uncertainties for Silicon-28. As I said earlier, we'd expect over $10 million for PET Labs this year. For Carbon-14, we said annualized, the contract is about $2.5 million a year. And perhaps they might want as much as $5 million a year. So depending on exactly what month we start up in, you can even pro rata that number for the year. And for Ytterbium-176, we've kind of said that we think that plant can do about a kilogram a year at about $20,000 a gram. So that would be $20 million of annualized revenues. I don't know if we think that plant is starting up around midyear, that kind of time frame, Q3. So again, you can pro forma that for the year. And importantly, as we start the plants up and we ship our first commercial production, we can tell you that date and then you can pro forma those numbers. For LNG and helium, we said LNG is about 2,500 gigajoules per day. And I would assume a price of $13 to $14 per gigajoule. So annualized, that would be about slightly over $12 million a year. And then liquid helium, we said 58 Mcf per day. Now the price there is clearly right now, we're seeing extreme tightness in that market. So if you had asked me 3 months ago, I would have said assume maybe an average price will be a mixture of spot and contract, call it, $400 per Mcf, and that gives you kind of $8 million in revenue. But right now, if we're signing contracts, we could be signing well over $1,000 per Mcf, and that's more like $25,000 or $20,000 -- $20 million a year. So -- and obviously, our costs are fixed on that business as well. So $1 of incremental helium revenue drops straight to the bottom line. So there's a lot of operating leverage there. And then yes, just to confirm, the $300 million EBITDA target for 2031 excludes any contribution from QLE, which we expect to spin out this year.

And maybe as a follow-up, I want to ask about your helium business. Any thoughts on -- I know you just acquired it, but any thoughts on potentially monetizing that or highlighting the value to the market in the future?