Fermi Inc. (FRMI) Earnings Call Transcript & Summary

Hello, everyone, and welcome to the Fermi America First Quarter 2026 Earnings Conference Call. Joining me on this call are our Chairman of the Board, Marius Haas; the Co-Presidents of the newly formed Office of the CEO, Jacobo Ortiz Blanes and Anna Bofa; and Rob Masson, our Interim Chief Financial Officer. During today's call, we will make forward-looking statements as defined under the federal securities laws. Those statements represent management's present expectations and carry risks and uncertainties that may lead to actual results differing materially from what is anticipated. To hear a detailed discussion of the risk — please see our latest annual report on Form 10-K along with our recent reports on Form 8-K. Any non-GAAP measures we discuss today are meant to offer supplemental perspectives regarding the company's ongoing operations. At this point, I'll hand the call over to Marius.

Thanks, Rodrigo. Morning, everyone — good to have you join us. Fermi America is at a genuine inflection point right now. With Fermi 2.0, we're moving past the early-stage model that launched this business and building the institutional framework required to grow it to scale. The founding premise of this company was delivering reliable private grid power, at scale, to the hyperscale compute infrastructure underpinning the AI economy. That central premise hasn't changed. And the market keeps confirming both our approach and the value we offer — projections for power demand tied to AI have grown, though the central tendency has shifted notably higher across the last year. Looking at the near term, what we see is a situation where the largest bottleneck appears to be power availability — not capital, and not demand. It's evident that delays are being disclosed for announced projects around the world; and what's causing those delays is lengthy interconnection schedules along with the availability of equipment. What matters for you to understand is that our strategy is aimed squarely at closing that particular gap. And that is the reason we think our project holds an advantage. What we need to focus on at this moment is executing with the kind of governance, commercial partnerships, and operational rigor that the people who have invested in us are entitled to and should anticipate. There are a number of important topics we'll be addressing on this call. To begin, I'll address the shifts in leadership along with the actions we've implemented to bolster governance, commercial performance, and financial discipline. After that, Anna will walk through commercial developments, which will include tenant involvement, regulatory matters, and nuclear. Then Jacobo will provide an operational briefing on Project Matador, covering the latest site advancements in both procurement and construction; and last, Rob will take us through the first quarter's results as well as liquidity. Before anything else, I'd like to briefly address the recent leadership transitions directly. During the previous month, the Board ousted Toby Neugebauer from his roles as President, Chief Executive Officer, and Director. His dismissal was for cause. This choice by the Board was intentional. It was unanimous among the participating directors, and it stemmed from a thorough, meticulous procedure that involved advice from independent counsel. Crucially, the Board strongly holds that this action served the long-term interests of both the company and its shareholders. Although Toby was instrumental in constructing something truly bold, the Board came to see that Fermi must function in a different manner throughout the coming 18 months. We have to carry out contracts worth billions with counterparties of investment-grade quality, all while maturing as a publicly traded entity that is moving toward commercial operations. Fermi 2.0 is entirely centered on this kind of transformation, and pulling it off means there will need to be leadership-level adjustments. Three key moves are involved. To start, our governance has been made stronger. Taking on the Chairman of the Board position is now my responsibility, and I bring with me background from Dell Technologies along with the enterprise technology industry. Going from 5 directors to 7, we brought in Myles Everson, Larry Kellermann and Jeffrey Steve. Having previously served as our CFO, Myles has a deep understanding of every part of this company. In his current capacity as our Head of Power, Larry brings over 40 years of experience assembling power generation asset portfolios worth multiple billions of dollars. Jeffrey brings extensive experience as a Chief Executive and Chairman, having grown industrial businesses to the scale of publicly traded organizations. We've brought in Heidrick & Struggles, a well-regarded executive search firm, to head up the hunt for our next CEO. That effort is already moving forward, and we've got a preliminary slate of very strong candidates in hand; our focus is on finding the right individual — a proven leader who has run large, complex companies, has relationships with hyperscalers, and is fluent in project financing, so they can guide firming through commercial operations and beyond. On top of that, Rob Masson has come aboard as our interim Chief Financial Officer. Rob brings over 20 years of financial leadership at public companies. His record of generating growth and enterprise value across a range of industries is precisely what this company needs as we scale Project Matador and build institutional relationships. Second, we've formalized our operational footprint; we've set up a new corporate headquarters in Dallas, alongside our permanent on-site presence in Amarillo. Dallas puts us near key stakeholders and deep talent, while Amarillo keeps our team embedded in Project Matador's build out; and third, we've actively rebuilt and broadened our commercial relationships. Since the leadership changes in April, our commercial momentum has gotten stronger. We've seen talks with tenants that had gone quiet start back up, and additional potential renters are now looking through what's in our data room. The way the market has reacted to the structural adjustments we implemented has been positive, and our confidence keeps growing that this transformation puts Fermi in a stronger spot to speed up finalizing our initial binding tenant contracts. I'll share additional details shortly. Right now, I'd like to briefly address a handful of items that are front of mind. First up is liquidity. Rob will get into the specifics of that in a bit, but the key point is this: there are several options available for us to use, and we're running this business so that choices about capital come from our strategy rather than from being forced by circumstances. Moving on, the push from our previous chief executive for a quick company sale was a poor judgment call. After thorough review, the Board turned that idea down completely. Selling right now would not serve those holding shares for the long haul, particularly given that talks with our anchor tenant are moving forward and our financing setup remains solid. Like any public company acting responsibly, we remain receptive to chances that build value, yet we won't let anyone rush us into a choice that lacks foresight. Finally, let me speak candidly about the things that remain the same. Nothing about our company's assets or underlying worth is different. We hold a campus moving toward seventeen gigawatts of private power, we already possess a six-gigawatt clean air permit, and we've submitted applications for another five gigawatts. Either located at our site or secured through a binding agreement, we have over two gigawatts of long lead time gas generation. Our partners are excellent, and that includes Texas Tech University, whose backing has been reconfirmed. Nor has our mission shifted at all. At this moment, our country is engaged in a contest unlike any seen in a generation regarding AI compute, and the availability of power is the bottleneck. As I noted before, gigawatt-scale private power that sits behind the meter, is redundant, and arrives within the required schedule isn't merely desirable when you're dealing with hyperscalers and frontier model developers — it represents the binding limitation. Fermi was designed from day one to remove that limitation. If anything, the macro thesis that underpinned our enormously successful IPO has become even more compelling now than it was back then. And maybe most crucially, the outstanding team carrying out our vision remains intact. The engineers and project managers who pour the foundations, coordinate supply chain logistics, oversee EPC contractors, and handle permitting are still here, still dedicated, and still pushing ahead. At this point I'll hand the call over to Anna for an update on commercial and regulatory matters.

Appreciate that, Marius. Three topics are on my list today: where we stand commercially, how regulation is moving, and the ongoing work to reduce risk across our nuclear operations. Let me begin with the commercial picture. The headline I want to leave you with is this: this asset has not been abandoned by the market. In fact, the conversations we've had lately have only underscored how strong Project Matador is and how pressing the customer problem is that we're solving. The fundamental demand from customers is unchanged. If anything, that constraint has only become more pronounced across hyperscalers, neo cloud providers and enterprise compute operators, and the identical choke point keeps coming up: obtaining large-scale, dependable power on a schedule that keeps pace with AI demand. For us at Fermi, that represents the commercial opportunity. Fermi 2.0 is focused on making this company simpler to engage with, establishing a more efficient commercial front door for customers and partners eager to move fast and with confidence. That translates into quicker decisions, closer commercial alignment and a straighter route from diligence through to binding agreements. During the last 2 weeks, we've brought several prospective tenants and strategic partners to our site. The response has been extremely useful. Project Matador keeps coming up with customers and partners as one of the most sophisticated, ready-for-customers large-scale power campuses they've looked at. That's significant. Customers aren't after theoretical capacity. What they want is believable power in the near term, actual infrastructure, equipment that's been secured, momentum on permits, control of land, and a team capable of delivering. Our discussions are getting more and more detailed. Together with customers, we're addressing capacity planning, the order in which things get delivered, how much power is available, reliability, how operations are structured, and the commercial frameworks needed to shift from interest into execution. Notably, all of this is happening while the office of the CEO structure remains in place. Customers aren't holding off on engaging until a permanent CEO is named. They need this right away, and right now they're collaborating with us to align on how much capacity is required and which delivery routes might work. Beyond that, we're looking into strategic alliances with data center operators and infrastructure partners that are well-established and highly regarded. Such alliances strike us as possible catalysts — a means of broadening our ability to execute, boosting customer trust, and catering to a wider range of tenants, all while keeping commercial discipline intact. So the business message is simple. Demand is still robust. The market itself is confirming the asset's value, and Fermi 2.0 provides the framework to turn that demand into binding agreements with the appropriate counterparties, at the appropriate economics, and on schedule — and we believe we can get it done. Once binding agreements are actually signed and disclosure makes sense, we'll make them public. The momentum we're seeing is encouraging, and we feel the adjustments we've implemented have made our capacity to complete transactions both stronger and faster. Turning to regulation, February brought the quarter's biggest achievement: we received our clean air permit covering 6 gigawatts. Among permits of this type in the U.S., only one is larger. This goes beyond a regulatory win — it's a commercial one as well. That approval is essential to unlocking our commercial initiative; for prospective tenants, it provides the regulatory certainty they need before committing capital to long-term agreements on this scale. During the final days of March, we turned in an application for another 5 gigawatt gas permit, and that gives us added room to maneuver as we pursue the bigger campus vision. In the same way, we've submitted paperwork seeking foreign trade zone subzone status for the generation assets that we bring in from abroad. Once that status is granted, it will unlock meaningful tariff savings plus deferrals of duties, producing a benefit on our balance sheet that we can put a number on. Finally, turning to nuclear, the purpose of this push is to shore up the long-term commercial worth of Project Matador; we currently have a front-end engineering and design agreement in place with Hyundai Engineering and construction that covers both site layout and civil cost estimating. At Doosan Enerbility, work has now started on getting forging dies ready for the reactor pressure vessels we need. Worth noting here: ours is the first private-sector firm accepted into the NRC's expedited National Environmental Policy Act pilot, and when you pair that with the DOE financing track, it meaningfully de-risks the later-stage pieces of the campus buildout while underscoring how this project ties into national strategic priorities. With that, I'll pass things to Jacobo for the operations update.

Thanks, Anna, and good morning to all of you. Work on Project Matador kept moving forward over the quarter. Consistent strategic execution remains our team's priority. We've kept adding to our workforce and have made our systems and processes stronger. To date, we've put in place over 11 miles of perimeter fencing, close to 5 miles of high-pressure gas pipeline, and 7 miles of water distribution lines, delivering 2.5 million gallons per day. A 2 million-gallon water storage tank has been constructed, and we've locked in extra water rights for the site; we've also delivered 86 megawatts of power from Xcel to the location. Turning to our power generation assets, 3 GE 6B Frame turbines are right now being refurbished in Houston, and we anticipate their completion by the middle of next month. The foundation for these turbines has already been poured. Our Siemens SGT-800 generator sets have reached Houston and passed through customs. At the site, the foundation for these gensets has been prepped and is nearly ready to be boarded. Finally, the F-Class turbines, which represent 1.1 gigawatts of combined cycle capacity, are set to be delivered in the third quarter of this year. Along with an extra 6 Siemens SGT-800 turbines, which are secured and slated for delivery in 2028, our natural gas generation equipment totals approximately 2.2 gigawatts. Given this major milestone and the wrapping up of Phase 0, we'll hold off on further site development, exactly as had always been the plan, until a tenant signs. Going forward, capital deployment will stay disciplined and tied to commercial progress. Thanks to our $1.4 billion investment in balance sheet assets, we've created a speed to power advantage that, in our view, is unmatched and extremely compelling for customers dealing with quickly rising compute demand. The bottom line is that we're positioned well to mobilize right away once a lease is executed. Our supply chain is locked in, our EPC contractor relationships remain solid and are stronger than ever, and we have strong confidence in the labor available in the region. Lastly, Fermi 2.0 is centered on stabilizing and scaling what will be a generational opportunity, achieved through disciplined execution, operational clarity, transparent leadership, and long-term shareholder value. I'll now hand the call to Rob for the financial review.

Thanks, Jacobo. During this quarter, we recorded a net loss amounting to $189 million. Roughly 70% of that figure came from noncash items. The main driver was share-based compensation tied to our wide-reaching employee equity program. On top of that, we took a $25 million loss when we retired the Macquarie term loan. Operating activities consumed about $7 million in cash over the quarter. That figure gained from a $29 million increase in accounts payable and accrued liabilities, though $7 million of cash spent on prepaid expenses and other assets partly offset it. All told, this produced a $22 million net working capital benefit. Absent that benefit, our cash use came to roughly $29 million. As we put money into making Project Matador a reality, we remain dedicated to keeping corporate overhead in check. Property, plant and equipment absorbed $441 million of investment this quarter. That lifts our total invested in Project Matador past $1.4 billion. Most of it went toward natural gas power generation, which includes buying turbines for our Siemens and GE fleets. The rest covered site infrastructure, substation equipment, electrical interconnection and early nuclear predevelopment. On the liquidity front, we closed the quarter holding $243 million in total cash. Of note, during this quarter we paid off the Macquarie term loan in full. Through that move, we swapped out roughly $150 million of expensive debt for better equipment financing terms; we hold $785 million in new equipment financing facilities, with $500 million from MUFG serving as the anchor — MUFG being among the top infrastructure lenders globally; this debt carries a nonrecourse structure to the parent company and is secured by the generation equipment behind it; in late March, we additionally locked in over $156 million of financing through Yorkville, which will back general corporate expenditures. This arrangement gives us added flexibility at the parent level, while facilities at the equipment level fund our long lead time power generation assets. So far, we have not drawn on this facility. Altogether, we have now locked in close to $1 billion in financing commitments as Project Matador scales up. Importantly, going forward, we will stay disciplined about deploying capital by aligning cash outlays more tightly with capital inflows generated by tenant agreements and the shift to project level finance. Considering all of this, we believe our capital sources, paired with disciplined deployment, give us funding for near-term development activities. Beyond what we already have, we anticipate funding Project Matador's next phase via a mix of tenant prepayments, extra nonrecourse equipment financing at the project level, nonrecourse debt and tapping government programs, among them the DOE Office of Energy Dominance financing. I'll hand the call back to Marius now for closing remarks.

Two elements come together to define Fermi 2.0: the physical asset foundation already built, and the organizational capacity we're putting to work right now to unlock everything it's worth. Through investor capital, we've turned that funding into infrastructure worth over $1.4 billion at a location that hardly any rival could match within a similar timeframe. Across the last few weeks, we've encountered tremendous openness toward our approach and roadmap from all sides of the ecosystem around us. The tenants we're courting, the suppliers and partners already working with us, elected and appointed officials, and above all, the people who work here have all been thoroughly involved, and that only deepens our confidence in where we're headed. Both the Fermi 2.0 strategy and the plans to carry it out are fully underway now. On the management side, we're keeping our attention clear and rigorous: drawing in top-tier tenants who see how special our platform is, constructing the finest private power grid anywhere in the world alongside our suppliers and partners, making sure we have enough capital for liquidity requirements, speeding up strategic alliances across both power and data centers, and putting money into our workforce and talent pipeline, which includes bringing in important new leaders. When it comes to the Board, our job is making certain this company grows into a genuinely enterprise class operation, which means doing these things: setting out unambiguous strategic and operational priorities meant to produce steady, flawless execution; running a rigorous and careful search to bring aboard a world-class CEO capable of steering this next stage of expansion; and tackling outside meddling head-on so leadership stays concentrated on operating and expanding the business. Most importantly, we stand united behind one single overarching goal — getting the most long-term value back to shareholders; we can't wait to share news of our ongoing progress as the Fermi 2.0 vision gets executed. Operator, we're ready for questions now.

I just want some clarity here. In that release, you outlined a plan spanning 90 days containing 5 areas of focus. Could you spell out for investors what we ought to anticipate once those 90 days wrap up? And more precisely, please make clear whether that 90-day goal involves a lease offtake that binds, one that doesn't bind, or perhaps both. Also, does that tenant agreement serve as the item that gates the remaining 4?

Nick, thanks for asking that. I genuinely appreciate it. Let me be certain the team completely grasps that our attention is entirely on carrying out the plan we've just presented to all of you. Regarding the coming 90 days, our expectation is that you hold us accountable for achieving these 5 key points: a tenant agreement that is secured and binding, maintaining capital discipline in support of liquidity, bringing in our next CEO, delivering power at the site of our project, and looking into strategic partnerships aimed at speeding up data center and power deployment at our site. Those 5 commitments and deliverables are what we're concentrating on across the next 90 days, free of distractions. That's the standard by which you should judge us.

Okay, that makes sense. Let me turn quickly to the cash situation. Operations consumed cash, but the figure was held down in part by a working capital benefit tied to accounts payables and accrued liabilities. As things stand, you're holding $243 million across cash and restricted cash, along with $421 million of debt. CapEx incurred during the first quarter came to $441 million. And then there's your $150 million fill commitment. So ahead of a binding agreement, how should we frame the normalized cash burn for 2Q and 3Q? Also, should we expect any meaningful reversal of the 1Q payables or accrued liabilities?

Okay, now turning to liquidity. At quarter end, cash plus restricted cash came to $243 million. One thing worth highlighting: we've got solid equipment financing lined up that handles the bulk of what we still owe on turbines and electrical power equipment. Those are secured on nonrecourse debt through MUFG and Keystone Equipment. With Deal Bank, there's $160 million of capacity available for six Siemens turbines, which are scheduled to be built and delivered by 2028. So on the equipment finance front, we're feeling confident. As for the Yorkville facility, its main role is serving as a backstop for general corporate purposes. At the parent level, this provides us with optionality; we haven't made any withdrawals from that facility so far. Looking ahead, as I mentioned, the power assets that get ordered will be covered by the equipment financing; beyond that, when it comes to where capital comes from and how carefully we put it to work, our forward-looking approach is genuinely shifting. That's the discipline Marius described — examining what we owe and aligning those obligations with fresh tenant agreements, among other things. So going forward, you'd see us handle capital in a disciplined manner.

Max Taylor from Ocean Wall here, filling in for Nick. Could we get some additional detail on that 5 gigawatt Air Permit you submitted back in March? What sort of approval timeline should we expect? Any early indications from the regulators, any initial discussions? Then, as a second piece, what did you take away from the 6-gigawatt permit approval that makes you confident about the schedule for this fresh application?

Thanks for that question. Jacobo Ortiz speaking. Let me take the second part first. That 6 gigawatt Air Permit has been secured, the EPA backs it, and we're proceeding with it. As previously communicated, it stands as the second largest Air Permit ever issued in the U.S. Drawing on that response and every study we performed, we have room to add another 5 gigawatts, which was submitted not long ago as has been reported, and we fully anticipate it will be finished successfully by Q4 of this year. So our confidence in this strategy holds. What we discovered is that through transparency and clarity regarding our studies and our actions, we secured the first one, and we anticipate the second will be approved too.

Max, let me build on that point. The feedback that came back to us regarding the initial 6 gigawatts, I believe, amounted to people asking why we hadn't requested a larger amount. That's what pushed us to move forward with seeking the additional 5 gigawatts within that same process.

Perhaps to start, you mentioned — as part of that 90-day plan, securing a tenant agreement. My first question is, why attach a shot clock of a specific 90 days? Is there something regarding the discussions, or the kinds of tenants, or your progress that makes that precise timeline warranted, given how the past year has gone? So could you give us a little more color on what makes you confident enough to single out the coming 90 days as the window in which you can lock in a tenant agreement?

Yes, glad to address that. I believe the source of our confidence is that we've managed to pinpoint what was preventing customers from working with us. It really came down to their need to feel they could rely on us and develop a lasting partnership with us. These agreements, as you're aware, run 15 to 20 years; therefore the other party wants certainty that whoever they team up with will be capable of backing them across that long horizon. That's why, on our end, we implemented the changes we did, to make sure we operated as a relationship company and could come in and stand behind these people over that long horizon. So that's one element of our confidence. Another element concerns the condition of our site. As we said before, many partners have visited the site, and people have genuinely told us it's the most customer ready they've encountered anywhere in the country. The third element is simply demand. Demand hasn't disappeared. Everybody needs capacity, and we're among the few projects holding capacity for the coming couple of years at the scale we possess. So those factors give us confidence. It's the relationship building and trust we've managed across the past several weeks, and it's also anchored in how ready the site is; and the final point I'd add is that a great many of these customers have likewise been concentrating on how to work with us from a transaction perspective. So we've genuinely worked to make our commercial activities far more streamlined. That way it's far clearer how our process functions for both parties, letting them engage with us confidently.

One last thing I want to mention: during the past 3 weeks, the opportunities in our pipeline have grown at an exponential rate, far beyond anything we had anticipated.

All right, that's encouraging to know. Then for my follow-up, it breaks into 2 pieces. Regarding this prospective tenant deal, could you share a bit of high-level detail, in line with what we'd modeled before, about likely revenue and, even more importantly, the CapEx needed to construct this initial lease — regardless of the size, we'd previously suggested the first gig would land somewhere near $4 billion to $5 billion, and that first gig would throw off a particular level of NOI. So is there any big-picture color you can provide on what building this out would run? And tied to that, are you also in short talks with Texas Tech? Maybe just bring us up to date on whether a requirement still exists that a lease be signed before a specific date?

Yes. What we're examining at present is perhaps what you'd call an evolution, since we believe there are now several structures we could choose that would produce the identical economic value opportunity for these projects. We've therefore spoken a bit about how we're pursuing possible partnerships involving data center partners, power partners, infrastructure partners. We keep dealing straight with hyperscalers, and — yet we've come to see that more than one route exists for reaching our financial targets through these projects; and so, though we can't discuss specifics, naturally, about the figures tied to the deals we're presently negotiating, we can say we're quite confident that the transactions in front of us offer the very same economic opportunity we've consistently aimed to capture.

Let me just add a brief note there, Vikram. Among the strategic priorities we set out for the coming 90 days is looking into partnerships as a way to speed up what we can do on data centers and power deployment. That opens up some very interesting possibilities involving extra capital coming into the business through those partnerships. So that's a big help. Then, turning to your question about Texas Tech, I want to assure you our relationship with Texas Tech is very, very strong. We've sat down with the Chair of the Board of Regents; we've also sat down with the Special Committee of the Board of Regents that oversees the Fermi relationship. I myself have met with the Chance for two times over the past 3 weeks. Both sides are extremely driven to make sure Fermi succeeds over the long term, since it's a project with high visibility for each of us.

I realize it could be quite soon for this, but I was hoping you might say more about what exploring strategic partnerships for power and data centers actually involves. What would that look like in practice? Would it involve bringing on a partner with deeper experience to run the power generation sets and similar assets? Second, I wanted to follow up on the power plan included in the slides. Is the possibility of XL supplying additional power, as much as 200 megawatts, still something you're considering? And why has that not been included in the power plan for 2026 and 2027? Also, regarding that same plan, does it assume the turbines operate in single cycle? At some point, presumably, they would need to shift to combined cycle, so I'm curious when and how you would make that transition, and whether it falls under the air quality permit conditions.

Sure, I'll take the data center question first, then hand things over to the others for the remainder of what you asked. Regarding the pursuit of partnerships, especially where data centers are concerned, this really stems directly from our discussions with hyperscalers; what we keep seeing is that their demand is so large that they must work with partners on pads to secure more capacity. We therefore recognized that by going after those data center partnerships as well, there's a way to essentially reach them at their level. The landscape has shifted enormously over the past 6 months. So, as we said earlier, we recognized there are several structures through which these customers can be served. We therefore want to make sure we're reaching them at their level while also going after what they want so we remain current on their requirements. That is what we're doing. Exploring power partnerships is likewise driven by this same need. One area we're examining is how to consider added capacity so more customers can be served. As Marius pointed out, demand across the past couple of weeks has been so robust that we now find ourselves asking how to deliver more capacity to our site faster, which would let us serve more customers. Those are the 2 reasons we've gone after these partnership opportunities; now I'll hand it to Jacobo and Marius for your questions.