Net Power Inc (NYSE:NPWR) Plunges 12% on Strategic Pivot Despite EPS Beat

Financial Results Analysis

Net Power Inc (NYSE:NPWR) reported third-quarter 2025 results that presented a complex picture for investors, leading to a significant negative reaction in after-hours trading. The company posted a non-GAAP earnings per share (EPS) of $5.84, a figure that dramatically surpassed the analyst consensus estimate of -$0.1586. However, this substantial beat appears to be largely driven by non-operational, accounting-related items rather than core business performance. Revenue for the quarter was reported at $0.0, which was in line with analyst expectations of $0.0, reflecting the pre-revenue nature of the company as it continues to develop its technology and project pipeline.

The market's immediate reaction was decisively negative, with the stock falling approximately 11.9% in after-hours trading following the announcement. This suggests that investors looked past the headline EPS number and focused on the underlying operational updates and strategic shifts detailed in the press release. The absence of revenue and the nature of the earnings beat were insufficient to offset concerns stemming from the company's business update.

Strategic Pivot and Business Update

The earnings release was accompanied by a significant business update that outlines a substantial strategic pivot for the company. Net Power announced it is expanding its business strategy to prioritize the development of clean power projects utilizing readily available gas turbines paired with post-combustion carbon capture (PCC) technology. This represents a notable shift from its primary focus on its proprietary, next-generation oxy-combustion technology.

Key operational highlights from this new direction include:

• A signed letter of intent with Entropy Inc. to exclusively deploy Entropy's PCC technology for power generation in the United States.
• Progress on its first clean firm power hub in the Permian Basin, with Phase I targeting a Final Investment Decision (FID) in the first half of 2026 and commercial operations by 2028.
• Advancement of a second power hub in the northern MISO region, targeting an FID in 2027.

Concurrently, the company reported a non-cash impairment of its oxy-combustion technology intangible assets. This impairment was attributed to a market analysis that identified "slower than anticipated acceptance and deployment" and indicated the technology is not yet economically competitive in the current market. While the company continues to test and develop the oxy-combustion technology, it now characterizes it as a "viable, long-term solution," signaling a de-prioritization of its near-term deployment.

Financial Position and Outlook

Net Power ended the quarter with a strong cash position of approximately $424 million in cash, cash equivalents, and investments. This robust balance sheet provides the necessary capital to execute its revised strategy and fund the development of its initial PCC projects. The press release did not provide a specific financial outlook for the coming quarters that can be directly compared to existing analyst estimates.

Analyst estimates for the company’s future performance remain indicative of a pre-revenue developmental company:

• Estimated Revenue for Q4 2025: $0.0
• Estimated EPS for Q4 2025: -$0.1479
• Estimated Revenue for Full Year 2025: $0.0
• Estimated EPS for Full Year 2025: -$0.867

The lack of a quantitative financial outlook in the release, combined with the strategic shift and asset impairment, appears to be the primary driver behind the negative market sentiment, overshadowing the accounting-driven EPS beat.

For a detailed look at historical earnings and future analyst estimates, you can review the data here.

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Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. The information presented is based on publicly available sources and should not be the sole basis for any investment decisions.