Fermi (NASDAQ:FRMI) held its first-quarter earnings conference call on Thursday. Below is the complete transcript from the call.
This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.
View the webcast at https://www.webcaster5.com/Webcast/Page/3144/53899
Summary
Fermi reported a net loss of $189 million for the first quarter, with about 70% being non-cash, primarily due to share-based compensation.
The company is in the process of transitioning to ‘Fermi 2.0’, focusing on governance, commercial execution, and financial discipline to support large-scale operations and multi-billion dollar contracts.
Strategic changes include leadership restructuring, with Marius Haas as Chairman and the engagement of a recruiting firm for a new CEO.
Fermi has secured $1 billion in financing commitments, including equipment financing from MUFG and a facility from Yorkville, to support Project Matador.
The company is focused on executing a 90-day plan that includes securing a binding tenant agreement, maintaining capital discipline, and exploring strategic partnerships.
Commercial progress includes strong tenant interest and validation of Project Matador, emphasizing large-scale reliable power for hyperscale compute needs.
Operationally, Fermi has made significant progress on Project Matador, with infrastructure developments and equipment procurement for power generation.
Regulatory achievements include receiving a clean air permit for 6 gigawatts and filing for an additional 5 gigawatts.
Fermi is exploring partnerships with data center operators to enhance its execution capacity and meet increasing customer demand.
Full Transcript
OPERATOR
Good morning ladies and gentlemen. Thank you for standing by and welcome to Fermi America’s first quarter 2026 earnings call. this time, all participants are on a listen only mode. A question and answer session will follow the prepared remarks. Please note that today’s event is being recorded. I’d now like to turn the call over to Rodrigo Acuna, Fermi Director of Investor Relations. Rodrigo, the floor is yours. Good morning and thank you for joining Fermi America’s first quarter 2026 earnings conference call. With me today are our Chairman of the Board, Marius Haas, Co President of the newly established Office of the CEO and Ana BofA, and our Interim Chief Financial Officer Rob Mason. Today’s call contains forward looking statements within the meaning of the federal securities laws. These statements reflect management’s current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. For a detailed discussion of the risks, please refer to our most recent annual report on Form 10-K and our recent reports on Form 8-K. Any non GAAP measures discussed today are intended to provide supplemental perspectives on the company’s ongoing operations. I will now turn the call over to Marius. Thank you Rodrigo. Good morning everyone and thanks for joining us today. We’re at a meaningful inflection point in Fermi America’s development with Fermi 2.0. We’re moving forward from the entrepreneurial foundation to that built this company to the institutional framework required to scale it. Fermi was built on delivering reliable private grid power at scale to the hyperscale compute infrastructure that the AI economy requires. That hasn’t changed and market conditions continue to validate our approach and value proposition. Forecasts for AI driven power demand vary, but the central tendency has moved meaningfully upward over the past year. In the near term, the picture is one in which power availability, not capital and not demand, appears to be the biggest constraint. It’s clear that delays are being reported across announced projects globally and those delays are being driven by grid interconnection timelines and equipment availability. What’s important for you to know is that our strategy is oriented towards addressing that specific gap and it’s why we believe our project is advantaged. Our mandate today is to execute with the governance, commercial relationships and operational discipline that our investors rightly demand and expect. On today’s call, we’ll cover several important topics. First, I’ll address the leadership changes and the steps we’ve taken to strengthen governance, commercial execution and financial discipline. Second, Anna will cover commercial progress, including tenant engagement, regulatory and nuclear. Third, Jacobo will provide an operational update on Project Matador, including recent site progress across procurement and construction. And finally, Rob will review first quarter results and liquidity. To begin, I want to take a moment to directly address the recent changes in leadership. Last month the board removed Toby Nogabauer from the positions of President, Chief Executive Officer and Director. He was terminated for cause. The Board’s decision was deliberate. It was unanimous among the directors involved and it was the result of a careful and comprehensive process that included guidance of an independent counsel. Importantly, the Board firmly believes the move was in the long term interest of this company and its shareholders. While Toby played a critical role in building something genuinely ambitious, the Board recognized that over the next 18 months, Fermi needs to operate differently. We need to execute multi billion dollar contracts with investment grade counterparties while continuing to evolve as a public company advancing towards commercial operations. This evolution is what Fermi 2.0 is all about and executing it will require changes at the top. These include three significant actions. First, we have strengthened our governance structure. I have assumed the role of Chairman of the Board bringing experience from Dell Technologies and the enterprise technology sector. We expanded the board from five to seven directors adding Miles Everson, Larry Kellerman and Jeffrey Steed. As our former cfo. Miles knows the company inside and out. Larry currently serves as our Head of Power and has more than 40 years of experience building multibillion dollar power generation asset portfolios. Jeffrey is a seasoned Chief Executive and Chairman with deep experience scaling industrial enterprises into public company caliber organizations. We have engaged Hydrating Struggles, a respected executive recruiting firm to lead the search for our next CEO. That process is underway and we have a preliminary slate of highly qualified candidates already in hand. We’re focused on identifying the right person. A season leader with experience leading large complex companies, relationships with hyperscalers and fluency in project financing to take Fermi to commercial operation and beyond. Additionally, we have hired Rob Mason as our Interim Chief Financial Officer. Rob has more than 20 years of public company financial leadership. His track record of driving growth and enterprise value across multiple industries is exactly what this company requires as we scale Project Matador and and cultivate institutional relationships. Second, we have formalized our operational presence. We’ve established a new corporate headquarters in Dallas in addition to our permanent on site presence in Amarillo. Dallas positions us close to key stakeholders and deep talent while Almarillo keeps our team embedded in Project Matador’s build out. And third, we have actively rebuilt and expanded our commercial relationships. Since the leadership changes in April, our commercial momentum has strengthened Tenant conversations that had previously stalled have been reinitiated and new prospective tenants have entered our data room. The market’s response to the structural changes we’ve made have been constructive, and we’re increasingly confident that this evolution positions Fermi to accelerate the execution of our first binding tenant agreements. Anna will provide more color in a moment. At this point I want to quickly touch on a few topics that are top of mind. I’ll start with liquidity. Rob will discuss this in more detail shortly, but here’s the main takeaway. We have multiple levers we can pull and we’re managing this company so that capital decisions are driven by strategy and not by pressure. Next, our former CEOs ill advised call for an immediate sale of the company. The board has carefully considered that view and rejected it outright. Our forced sale at this moment is not in the best interest of of the long term shareholders, especially with anchor tenant negotiations advancing and our financing structure intact. As any responsible public company should be. We’re always open to value creating opportunities, but we’re not going to be stampeded into a short sighted decision. Lastly, I’d like to talk plainly about what has not changed. The assets and fundamental value of our business have not changed. We have a campus on the path to 17 gigawatts of private power with a 6 gigawatt clean air permit in hand and an additional 5 gigawatt application filed. We have more than 2 gigawatts of long lead time gas generation either on site or under a firm contract. We have great partners including Texas Tech University which has reaffirmed its support. Our mission has also not changed. The country is in a generational race for AI compute and that race is bottlenecked by power. As I mentioned earlier behind the meter gigawatt scale, redundant private power that is delivered on the necessary timeline is not nice to have for the hyperscalers and frontier model developers. It is the constraint. Fermi was purpose built to relieve that constraint. If anything, the macro thesis that served as the basis for a highly successful IPO is sharper today than it was then. And perhaps most importantly, the fantastic team executing on our vision has not changed. The engineers and project managers who pour the foundations, handle supply chain logistics, manage EPC contractors and run permitting are here, remain focused and are moving forward. I will now turn the call over to Anna for a commercial and regulatory update.
Anna BofA
Thanks Marius. I’ll cover three areas today, commercial progress, regulatory advancement and the continued de risking of our nuclear program. I’ll start on the commercial side. The most important message is that the market has not walked away from this asset. If anything, recent engagement has reinforced the strength of Project Matador and the urgency of the customer need we are addressing. The underlying customer need has not changed. If anything, it has intensified. Across hyperscalers, neo cloud providers and enterprise compute operators, the same constraint keeps coming up access to large scale reliable power on a timeline that matches AI demand. That is the commercial opening for us at Fermi. Fermi 2.0 is about making the company easier to work with, creating a more streamlined commercial interface for customers and partners who want to move quickly and confidently. That means faster decision making, tighter commercial coordination and a more direct path from diligence to binding agreements. Over the past two weeks we’ve hosted multiple prospective tenants and strategic partners at our site. The feedback has been highly constructive. Customers and partners continue to view Project Matador as one of the most advanced and customer ready large scale power campuses they have evaluated. That matters because customers are not looking for a conceptual capacity. They are looking for credible near term power, real infrastructure, secured equipment, permitting, progress, land control and a team that can execute. The conversations we’re having are increasingly specific. Customers are working with us on capacity planning, delivery sequencing, power availability, reliability, operating structure and the commercial frameworks required to move from interest to execution. Importantly, these conversations are continuing under the Office of the CEO structure. Customers are not waiting for a permanent CEO appointment to engage. Their need is immediate and they are working with us now to match capacity requirements and potential delivery paths. We are also evaluating strategic partnerships with established and respected data center operators and infrastructure partners. We view those partnerships as potential accelerators, a way to expand our execution capacity, increase customer confidence and serve a broader set of tenants while maintaining commercial discipline. So the commercial message is straightforward, demand remains strong, the asset is being validated directly by the market, and Fermi 2.0 is giving the structure to convert that demand into binding agreements with the right counterparties, at the right economics and on timelines we believe we can execute. We will announce binding agreements when they are signed and when disclosure is appropriate. We are encouraged by the progress and we believe the changes we’ve made have strengthened and accelerated our ability to transact. On the regulatory front, the most significant milestone of the quarter happened in February with the receipt of our clean air permit for 6 gigawatts. This represents the second largest permit of its kind in the US. This is not just a regulatory milestone, it is a commercial milestone. The approval is a key enabler of our commercial program. It provides prospective tenants with the regulatory certainty they need to commit capital to long term agreements at this scale. In late March we filed for an incremental 5 gigawatt gas permit, giving us additional flexibility as we build toward the broader campus vision. We have also filed for Foreign Trade Zone subzone designation for our imported generation assets. Once that’s received, it will deliver meaningful tariff relief and duty deferrals, which has a quantifiable benefit to our balance sheet. Finally, on nuclear, this work is about strengthening the long term commercial value of Project Matador. We have a front end engineering and design agreement with Hyundai Engineering and Construction that covers site layout and civil cost estimating. Doosan Enervability has also commenced preparation of forging dies for our reactor pressure vessels. It’s worth noting that we’re the first private company to be admitted to the NRC’s Accelerated National Environmental Policy act pilot program. This work in combination with the DOE financing track significantly de risks the long dated portions of the campus build out and underscores the national strategic priority assigned to this project. I will now turn the call over to Jacobo for an operational update.
Jacobo
Thank you Anna and good morning everyone. Construction at Project Matador continued to advance during the quarter. Our team is focused on consistent strategic execution. We have continued to build our team and strengthen our systems and processes. We have now installed more than 11 miles of perimeter fencing, nearly 5 miles of high pressure gas pipeline, 7 miles of water distribution lines providing 2.5 million gallons a day and we have built a 2 million gallon water storage tank and secured additional water rights for the site. We have also brought 86 megawatts of power from Xcel to the site. Looking at our power generation assets, three GE6B frame turbines are currently undergoing refurbishment in Houston and and we expect them to be completed by the middle of next month. The foundation for these turbines have already been poured. Our Siemens SGT 800 generator sets have arrived in Houston and cleared customs. The foundations for these gensets have been prepped at the site and are almost ready to be poured. Lastly, the F-Class turbines representing 1.1 gigawatts of combined cycle capacity are scheduled for delivery in the third quarter of this year with an additional six Siemens GT800 turbines which are secured and scheduled for delivery in 2028. Our total natural gas generation equipment is roughly 2.2 gigawatts. With this significant milestone and the conclusion of phase zero, we begin additional site development. And as it was always planned, until a tenant is signed, future capital deployment will remain disciplined and aligned with commercial Progress. Through our 1.4 billion investment in balance sheet assets, we have established A speed to power advantage that we believe is unmatched and highly compelling for customers facing rapidly growing compute demand. Bottom line, we’re in a great position to mobilize immediately upon …
This post was originally published here
