Cameco Q1 2025 earnings outshine uranium market slump with strategic contracts, fuel services surge

How did Cameco deliver profit growth despite falling uranium spot prices?

Cameco Corporation (TSX: CCO; NYSE: CCJ) delivered robust financial and operational performance for the first quarter ended March 31, 2025, despite a 30% year-over-year decline in uranium spot prices. The company’s strategic reliance on long-term contracting enabled it to realize higher prices than the prevailing spot market, highlighting its resilience and foresight in managing price volatility.

Cameco reported consolidated revenue of CAD 789 million in Q1 2025, up 24% from the same period last year. Gross profit rose 44% to CAD 270 million, driven by strong execution across uranium production, fuel services, and equity-accounted Westinghouse operations. Net earnings attributable to equity holders stood at CAD 70 million, reversing a loss of CAD 7 million in Q1 2024. Adjusted net earnings also rose to CAD 70 million, while adjusted EBITDA reached CAD 353 million.

These results reflect Cameco’s strategy of maintaining supply discipline, focusing on tier-one assets, and aligning long-term customer contracts with value-creating price structures. The company’s ability to maintain financial strength in a volatile macroeconomic and geopolitical environment positions it as a core player in the nuclear energy value chain.

What drove Cameco’s performance in uranium and fuel services?

Cameco’s uranium segment posted CAD 619 million in revenue, a 10% increase compared to Q1 2024. While sales volumes declined by 5% to 6.9 million pounds, the average realized uranium price in Canadian dollars surged by 15% to CAD 89.12 per pound. Gross profit in the uranium segment rose 20% to CAD 203 million, although adjusted EBITDA fell 6% to CAD 286 million due to higher input costs.

The production mix shifted slightly in Q1, with higher volumes coming from the Cigar Lake mine, which has marginally higher cash costs than McArthur River and Key Lake. The average cash cost of uranium production rose by 15% year-over-year, reflecting the shift in production sources and an increase in the cost of purchased material. Total uranium produced and purchased in the quarter stood at 7.2 million pounds.

The fuel services segment delivered standout results, recording a revenue increase of 88% to CAD 135 million. The segment benefitted from a 60% increase in sales volumes and a 17% rise in average realized price. Net earnings before tax rose to CAD 68 million, and adjusted EBITDA grew 200% to CAD 75 million. The adjusted EBITDA margin improved from 35% to 56%, highlighting efficient cost control and favorable pricing dynamics.

How did Westinghouse contribute to the results?

Cameco’s 49% ownership stake in Westinghouse Electric Company contributed a net loss of CAD 62 million in Q1 2025. However, this was a significant improvement over the CAD 123 million loss reported in Q1 2024. The year-ago figure was heavily impacted by acquisition-related inventory accounting, which no longer affects comparability.

Westinghouse’s adjusted EBITDA increased to USD 92 million, up from USD 77 million in Q1 2024. Cameco expects full-year adjusted EBITDA from Westinghouse to range between USD 355 million and USD 405 million. Performance in the first half of 2025 is expected to be relatively weaker, with stronger cash flow and earnings anticipated in the fourth quarter.

In a milestone development, Cameco received its first post-acquisition distribution of USD 49 million from Westinghouse in February 2025. This distribution marked a turning point in the monetization of Cameco’s strategic equity investment and underscored the potential for recurring cash flows from the asset.

What was the impact of the temporary shutdown at JV Inkai?

Production at Joint Venture Inkai, a uranium operation co-owned with Kazatomprom, was temporarily suspended on January 1, 2025, but resumed by January 23. The shutdown prompted a downward revision in the 2025 production target to 8.3 million pounds (100% basis), of which Cameco’s allocation is 3.7 million pounds.

Despite the interruption, the company confirmed there was no material impact on its 2025 guidance. No deliveries from JV Inkai are expected in the first half of the year. Cameco also received a cash dividend of USD 87 million in April 2025 from JV Inkai, based on its 2024 financial performance. Dividends relating to 2025 results are expected to be declared and paid in 2026.

The temporary disruption highlights the strategic importance of Cameco’s contracting and sourcing model, which insulates it from operational delays in individual supply lines. By prioritizing unencumbered tier-one inventory and maintaining operational flexibility, the company preserves delivery certainty to its utility customers.

What is the status of Cameco’s long-term contract book?

As of March 31, 2025, Cameco had delivery commitments averaging 28 million pounds per year through 2029. These include deliveries already made in 2025, with higher-than-average volumes scheduled between 2025 and 2027. Contracting activity in early 2025 slowed due to macroeconomic uncertainty and trade policy concerns, but interest remains robust, especially from utilities seeking supply chain diversification.

Cameco’s long-term contracts are structured to provide downside protection and upside exposure, often tied to market-related pricing mechanisms. As nuclear power continues gaining traction amid global decarbonization efforts, Cameco is well-positioned to deepen its role as a preferred supplier to utilities worldwide.

How solid is Cameco’s financial position?

Cameco maintains a strong balance sheet with CAD 361 million in cash and equivalents and CAD 1.0 billion in total debt. Additionally, it has access to an undrawn CAD 1.0 billion credit facility that matures in 2028. The company’s risk-managed capital structure was further strengthened in January 2025 with the final USD 200 million repayment of its Westinghouse acquisition loan.

Cash provided by operations increased 75% year-over-year to CAD 110 million, supported by higher gross margins and disciplined capital expenditure. Management reiterated its expectation for strong cash flow generation through 2025, enabling continued reinvestment and shareholder return potential.

What is the market sentiment and analyst view on Cameco stock?

Investor sentiment surrounding Cameco has turned increasingly bullish following the Q1 earnings report. On the day of the announcement, shares of Cameco (NYSE: CCJ) rose by 3.06%, reaching their highest level in several months. The stock’s resilience in a declining spot uranium environment was a key signal to investors of the company’s pricing power and strategic depth.

Institutional flows also reflect growing confidence. Ark Invest, led by Cathie Wood, recently added over 30,000 shares of Cameco to its clean energy portfolio, reinforcing long-term conviction in nuclear energy’s role in the energy transition. Analysts at National Bank of Canada reiterated their “Outperform” rating, setting a price target of CAD 81.00. The consensus among analysts remains tilted towards “Buy,” supported by Cameco’s long-term contracts, diversified asset base, and earnings visibility.

While FII/DII data for Canadian equities is not as granular as in other markets, broad-based inflows into nuclear ETFs and clean energy index funds continue to raise Cameco’s weighting in institutional portfolios.

Is Cameco stock a buy after Q1 2025?

Cameco appears well-positioned for long-term value creation, with a business model built on stable pricing, tier-one assets, and operational resilience. The company offers exposure to the nuclear power sector at a time when energy security, carbon neutrality, and geopolitical diversification are top global priorities.

Given its strong fundamentals, cash-generating assets, and positive analyst outlook, Cameco stock stands out as a “Buy” for long-term investors. However, risks such as geopolitical uncertainty, supply disruptions, and commodity price swings remain. Investors seeking exposure to uranium markets with defensive characteristics may find Cameco among the most credible plays in the sector.