Centrus Energy Positioned for Growth as HALEU Demand Accelerates

Centrus Energy LEU operates in a tightening nuclear fuel market as Western utilities seek alternatives to Russian supply. The company’s enrichment capabilities and growing backlog position it as a key participant in the evolving uranium supply chain.

At the same time, Centrus is investing heavily in domestic enrichment capacity and advanced fuel production. These initiatives aim to support the next generation of nuclear reactors and strengthen the United States’ nuclear fuel security.

LEU Business Model Anchors Centrus Energy Revenues

Centrus Energy’s operations are centered on supplying low-enriched uranium, or LEU, the fissile component used to fuel commercial nuclear reactors. The company provides enrichment services and nuclear fuel components primarily to utilities that operate nuclear power plants.

The LEU segment is the company’s largest revenue driver. In fiscal 2025, it generated about $346.2 million in revenues, accounting for roughly 77% of Centrus Energy’s total sales. This segment includes separative work unit enrichment services as well as the sale of uranium hexafluoride and related uranium products used in the nuclear fuel cycle.

Centrus Energy also operates a Technical Solutions segment that provides uranium enrichment, engineering, manufacturing and technical services to the U.S. government and other customers. This segment generated approximately $102.5 million in fiscal 2025 revenues, representing about 23% of total sales.

The company maintains a diversified customer base, with domestic markets contributing roughly 75% of revenues and foreign markets accounting for the remaining 25%.

Centrus Energy Expands U.S. Uranium Enrichment Capacity

Centrus is advancing a multi-billion-dollar expansion of its uranium enrichment facility in Piketon, OH. The project aims to significantly increase both LEU and High Assay Low-Enriched Uranium (HALEU) production capacity, strengthening the domestic nuclear fuel supply chain.

The expansion includes the development of domestic centrifuge manufacturing capabilities to support commercial LEU enrichment activities. In addition, Centrus Energy has begun design work on a 150,000-square-foot training, operations and maintenance facility that will support workforce development and operational readiness at the site.

These investments are part of a broader strategy to rebuild U.S.-owned uranium enrichment infrastructure after decades of limited domestic investment. By expanding its enrichment capacity, Centrus Energy aims to position itself as a critical domestic supplier to utilities and government programs seeking secure fuel sources.

LEU Stock Positioned for Advanced Reactor Fuel Demand

A major long-term growth opportunity for Centrus Energy lies in its leadership in HALEU production. HALEU is expected to fuel a new generation of advanced nuclear reactors designed to deliver carbon-free power with improved efficiency and safety.

Centrus Energy is currently the only licensed producer of HALEU in the Western world. Under a contract with the U.S. Department of Energy, the company is already operating enrichment capacity to support HALEU production.

Industry projections suggest the market opportunity for HALEU could reach roughly $8 billion annually by 2035. As advanced reactors move from development to commercial deployment, demand for this specialized fuel is expected to increase significantly. That outlook gives Centrus Energy an early-mover advantage in a potentially fast-growing segment of the nuclear fuel market.

Centrus Energy Backlog Supports Long-Term Revenue Visibility

Centrus Energy’s backlog provides strong visibility into long-term demand for its services. As of Dec. 31, 2025, the company reported a total backlog of approximately $3.8 billion extending through 2040.

The LEU segment represents the largest share, accounting for about $2.9 billion of the backlog. The Technical Solutions segment contributes roughly $0.9 billion in contracted work related primarily to government programs and technical services.

Within the LEU backlog, approximately $2.3 billion is contingent on future capacity expansion and funding milestones. Much of this backlog is already under definitive agreements with customers. As the company advances its enrichment expansion and secures funding support, these contingent contracts could convert into additional revenue streams over time.

LEU Stock Faces Near-Term Timing and Policy Risks

Despite strong long-term demand drivers, Centrus Energy faces several near-term uncertainties. Quarterly earnings can fluctuate due to shipment timing, logistics and contract mix, which can cause revenue and margin variability from period to period.

Policy factors also play an important role in the nuclear fuel market. Current waivers from the Department of Energy allow imports of Russian LEU for certain committed deliveries in 2026 and 2027. Changes to these policies could affect supply continuity and contract execution for U.S. utilities.

In addition, negotiations surrounding HALEU-related government contracts remain unresolved. The timing and structure of funding and fees tied to these programs could influence the pace at which HALEU revenues scale.

Other uranium-focused companies are also positioning themselves for growing nuclear fuel demand. For example, Cameco Corporation CCJ is one of the world’s largest uranium producers supplying fuel for nuclear power generation, while Uranium Energy Corp UEC is expanding uranium mining operations in North America to support domestic nuclear fuel supply. 

For investors, Centrus Energy currently carries a Zacks Rank #3 (Hold), reflecting a balanced risk-reward outlook as the company continues to invest heavily in enrichment capacity while awaiting the full commercialization of HALEU production. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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