Rolls-Royce has halted development of a compact nuclear reactor intended for the moon, ending a three-year program funded with £9 million in taxpayer money. The decision comes as the aerospace and power systems group continues to execute a separate £200 million share repurchase initiative. The company’s full-year 2025 financial results are scheduled for release on February 26.
Share Buyback Program Proceeds
Amid the strategic shift away from lunar ambitions, Rolls-Royce is moving forward with its planned equity repurchase. The £200 million program commenced on January 2, 2026, and is set for completion by February 24. This date falls just two days before the annual earnings announcement.
UBS is managing the buyback, with all repurchased shares to be cancelled. This follows the completion of a larger £1 billion share repurchase program in November 2025. The board intends to disclose the total number of shares bought back in 2026 alongside the annual figures on February 26.
Lunar Ambitions Grounded
The terminated project aimed to develop a micro-reactor capable of generating up to 100 kilowatts of power—sufficient for dozens of households on Earth. It was initially launched three years ago by the UK Space Agency with the goal of establishing a “foundation for a sustained human presence on the moon.”
The initiative stalled after government contracts expired in the summer of 2025 and no viable launch partners emerged. The timing presents a significant strategic setback as international competition intensifies.
The United States is aggressively advancing its own lunar power plans. NASA and the U.S. Department of Energy aim to deploy a nuclear fission surface power unit on the moon by the end of the decade, with a budget of up to $3 billion. The tender for this project is expected to be restricted to American companies. Competitors like Lockheed Martin and X-energy, which is backed by Amazon, have already conducted pilot studies for NASA.
Consequently, Rolls-Royce is largely excluded from these core U.S. efforts. However, its U.S. subsidiary, LibertyWorks, maintains a collaboration with NASA on a power converter designed to transform nuclear energy into electricity for a future lunar base.
Core Terrestrial Business Unaffected
The end of the moon reactor program does not impact Rolls-Royce’s core nuclear strategy on Earth. The British government has selected the company as the preferred bidder to construct small modular reactors (SMRs) within the UK. Simultaneously, the group’s SMR technology is undergoing the licensing process in the United States.
Financially, the company reported adjusted revenue of £17.8 billion and an adjusted operating profit of £2.46 billion for the 2024 fiscal year. The complete financial statements for 2025 will be published in three weeks.
