NET Power Inc. (NPWR) | The Buildout — AI Infrastructure
The Verdict
NET Power is an energy technology and project development company that intends to design, build, own and operate natural gas power plants and sell firm electricity to large loads. Its filed model pairs gas turbines with post-combustion carbon capture; as of August 2026 it sequences unabated gas generation first and keeps capture as a later-phase option. For the AI buildout it sits in the power layer beneath the technology stack: behind-the-meter, off-grid generation meant to be colocated with data-center load and to avoid interconnection queues. No offtake has been signed and no customer is named.
| Market Cap | — |
| Revenue (TTM) | $0M |
| Net Cash | $305M |
| Earnings Beats | 2 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Balance sheet: $117.9M of cash plus $190.4M of short-term investments at June 30, 2026, against $3.3M of total debt, with G&A burn management put at roughly $8M-$9M a quarter.
- Equipment secured: about $77M of Siemens RPS gas turbine packages contracted in May 2026, plus a 123 MW EMPower acquisition closed on 2026-09-03 that took potential first-phase capacity to nearly 200 MW.
- Site scale: Project Permian sits on leased Oxy acreage near Midland, Texas, with site capacity framed at roughly 1-1.5 GW across phases in August, up from 800 MW in May.
- Demand signal: management says ERCOT interconnection queues are getting backed up into the 2030s and buyers want behind-the-meter, off-grid power on the 2028 timeline the market is asking for.
- Options retained: the Oxy CO2 pathway for enhanced oil recovery remains intact as a future pathway, and Entropy's post-combustion capture is recut into a later-phase framework rather than removed.
What We’re Watching
- No signed offtake and no FID date. Management said on the August 14, 2026 call that it hopes to share more 'in the next couple of months'; the offtake agreement is the stated gating condition for project financing.
- Construction funding gap. The CFO said funding through construction to commercial operations 'will require project level financing, partner capital, additional equity or some combination of those sources.'
- Equipment cost inflation: 'the cost of equipment just continues to rise because the market is still tight,' which pressures the power price the project would need.
- Dropped guideposts. The TIC range ($475M-$575M), NET Power equity range ($125M-$175M), PPA target ($100/MWh), FID window, gas supply MOU and air permit were not reaffirmed or went silent in August.
The thesis is unresolved rather than broken. The record supports both readings: the pivot moves the company toward the larger, faster-moving market and removes the oil-and-gas acceptance friction from the first phase, while it also drops several economic guideposts, defers the differentiated carbon-capture product, and leaves the offtake gate unopened. Management delivered on equipment - the Siemens turbine packages and the 123 MW acquisition - but not on commercial commitments. The open question is whether the pivot created value by selling what buyers will pay for now, or revealed that the differentiated clean product had not found commercial traction.
Earnings
NET Power reported no revenue for the quarter ended June 30, 2026 - it remains pre-revenue - and the transcript read of the period is a 'pre-revenue quarter dominated by strategy recalibration, not financial print.' Cash, cash equivalents and investments were about $310M, down from about $319M the prior quarter. The operational headline was equipment: management said it was working to secure an additional 120 MW 'in concert with a potential customer,' which became the 123 MW EMPower acquisition closed on 2026-09-03.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $0M | $0M | $0M | — |
| Gross margin | — | — | — | — |
| EBITDA | −$206M | −$31M | −$69M | +199.7% |
| EPS | $-0.91 | $-0.12 | $-0.36 | +151.2% |
| Potential power generation capacity, Phase 1 | Nearly 200 MW | 80 MW net (May design) | n/a | — |
we're redirecting near-term capital and execution focus towards the development of unabated natural gas power generation capacity with carbon capture retained as an option.— Management (NET Power), 2026-08-14
Management tone: In May 2026 management was optimistic about the clean firm power product and expected meaningful updates in coming months, closing that call with 'The Entropy JDA is closed.' On the August 14, 2026 call it defended a pivot executed inside one quarter, framing it as 'a change in sequencing, not a change in confidence' and asking for patience. In Q&A it was direct on competitive positioning - not claiming a near-term technology moat - and direct on first-project sizing and equipment mix, while reframing questions about potential customers' project maturity toward grid reliability and giving no timing for offtake or financing.
Management Guidance
On the May 12, 2026 call management reaffirmed a TIC of $475M-$575M for Project Permian Phase 1, a NET Power equity investment of $125M-$175M, FID in the second half of 2026, commercial operations in early 2029, a PPA price target of $100/MWh or better, and quarterly G&A burn of roughly $8M-$9M. The August 14, 2026 call did not reaffirm the TIC range, the equity range, the PPA target, the FID window, the gas supply MOU or the air permit, and gave no replacement figures. It said construction funding will require project-level financing, partner capital, additional equity or some combination, and that cost depends on the final project profile with equipment costs continuing to rise. The 10-Q contains no guidance section.
Trajectory
The audited trailing record shows de minimis revenue - $0.6M in Q4 FY2021 falling to $0.0M by Q3 FY2024 - and negative EBITDA in every listed quarter, including -$27.0M in Q3 FY2024, so revenue and margin trajectory are not yet meaningful. What has moved is the cost base: the Q1 2026 operating loss of $34.2M was $19.7M of research and development plus $8.9M of G&A, and the year-over-year narrowing of the loss came from the absence of a $415.9M prior-year impairment rather than from operations. Cash moved from about $319M at the end of Q1 2026 to about $310M at the end of Q2 2026.
The Model
The model projects no revenue in either FY+1 or FY+2, with EBITDA of -$56M in FY+1 and -$64M in FY+2, both a 0% margin. The near-term anchor is a development-stage cost base and no project in service, and with no revenue line in either year the wider FY+2 loss reflects continued development spending in the model rather than any revenue ramp. Nothing is contracted yet: no signed offtake, no FID date and no construction financing.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $0M | $0M | $0M |
| YoY Growth | — | — | — |
| EBITDA | −$633M | −$56M | −$64M |
| EBITDA Margin | — | 0.0% | 0.0% |
Projections are the median of 5 independent model runs.
On the May 12, 2026 call management reaffirmed a TIC of $475M-$575M for Project Permian Phase 1, a NET Power equity investment of $125M-$175M, FID in the second half of 2026, commercial operations in early 2029, a PPA price target of $100/MWh or better, and quarterly G&A burn of roughly $8M-$9M. The August 14, 2026 call did not reaffirm the TIC range, the equity range, the PPA target, the FID window, the gas supply MOU or the air permit, and gave no replacement figures. It said construction funding will require project-level financing, partner capital, additional equity or some combination, and that cost depends on the final project profile with equipment costs continuing to rise. The 10-Q contains no guidance section.
What Could Go Right — and Wrong
- A signed power offtake or PPA with a named, creditworthy buyer - management calls the offtake agreement the gating condition for project financing.
- A restated TIC, NET Power equity check, FID date and commercial operations date for the unabated design, restoring the guideposts dropped in August.
- Air permit issuance, targeted for the second half of 2026 on the May call, plus a definitive gas supply agreement to follow the MOU that went quiet.
- Placing the nearly 200 MW of secured first-phase equipment with a customer on acceptable terms, turning equipment into a contracted project.
- Confirmation that Entropy remains a Phase 1 technology and equity partner, or a clear statement that it is a future-phase option, which would resolve the largest ambiguity in the current framework.
- No offtake counterparty through the 'next couple of months' window management set itself.
- A funding structure requiring materially more equity than the previously guided $125M-$175M, changing the shareholder economics.
- Rising equipment cost - 'the cost of equipment just continues to rise because the market is still tight' - pushing the power price the project needs for a commensurate return.
- The capture option failing economically, leaving a generic gas developer after the company ceded near-term differentiation.
- Execution risk across the redesign, a new customer set and a new technology-agnostic equipment strategy on a project not yet built.
Looking Ahead
Over the next twelve months the testable items are commercial rather than financial. Management pointed to an offtake or customer update within a couple of months of the August 14, 2026 call, to an air permit targeted for the second half of 2026 on the May call, and to Oxy land rights as a near-term priority. The May-call FID target of the second half of 2026 was not reaffirmed in August, and the deployment framing moved to the 2028 timeline the market is asking for. Entropy's capture deployment stays in later phases, 'as and when supported by customer demand, economics and financing.'
- Near termOxy land rights — Executed land-rights deals underpinning West Texas power development.
- Next couple of monthsOfftake or customer update — A signed PPA would be the gating condition for project financing.
- H2 2026Air permit — May-call target; not mentioned on the August 2026 call.
- Second half of 2026Project Permian FID — May-call target; not reaffirmed on the August 2026 call.
- 2028 timelineFirst phase in service — Behind-the-meter gas capacity colocated with customer load.
- Later phasesEntropy capture framework — 'As and when supported by customer demand, economics and financing.'
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $0M | $0M | $0M | -100.0% |
| Gross Margin | -93.0% | — | — | — |
| EBITDA | −$116M | −$633M | −$349M | -443.4% |
| EBITDA Margin | -58250.0% | — | — | — |
| Net Income | −$49M | −$578M | −$521M | -1075.6% |
| Free Cash Flow | −$102M | −$154M | −$166M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
The Company
NET Power is an energy technology and project development company focused on low-carbon gas power. Its 10-K, filed 2026-03-09, describes the go-forward business as designing, developing, building, owning and operating clean gas power plants that pair natural gas turbines with post-combustion carbon capture, and says the company broadened its scope from the Oxy-Combustion Cycle to include capture technology licensed from Entropy Inc. It is pre-revenue, and it operates a 50 MWth demonstration facility in La Porte, Texas, where construction began in 2016 and testing in 2018.
How it operates has shifted. On the August 14, 2026 call management said it was redirecting near-term capital to unabated natural gas generation, colocated behind the meter with customer load, with capture held as a later-phase option. That moves the product from a grid-connected clean-gas plant toward off-grid firm power assembled from gas turbines, reciprocating engines and battery storage and aimed at 99.9% uptime. Project Permian sits on leased acreage from Oxy near Midland, Texas; the intended buyers are hyperscalers, data center developers and general industrial companies, and no offtake is signed.
Business Segments
Competitive Landscape
The 10-K frames competition at the technology level, listing 'traditional baseload generation, advanced nuclear, geothermal, renewables, and other lower-carbon generation and decarbonization solutions.' On the August 14, 2026 call management did not claim a near-term technology moat, saying value creation 'doesn't necessarily have to come from differentiation' and resting the case on execution capability and the land and gas position in West Texas. A generated, spider-sourced list also names Constellation, Calpine, GE Vernova, NRG, Talen and Vistra, which the source material flags as low-confidence.
- Traditional baseload generationNamed in the 10-K as a competing power generation technology; not discussed further.
- Advanced nuclearNamed in the 10-K among competing generation technologies; not discussed further.
- Geothermal and renewablesNamed in the 10-K among lower-carbon generation and decarbonization solutions.
- Constellation (CEG)Appears on a generated competitor list; no documented discussion in the source material.
- GE Vernova (GEV)Appears on a generated competitor list; no documented discussion in the source material.
Supply Chain
NET Power sits in the power layer beneath AI data centers: it buys turbines, engines, batteries and land services, and intends to sell firm electricity to hyperscalers and data-center developers. No company in the source material's neighbor set names NET Power.
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