Financial Data and Key Metrics Changes - The adjusted EPS for the quarter was $0.60, slightly down from the previous quarter due to the timing of gain on sale revenue [6][23] - Adjusted recurring net investment income increased by 19% year to date compared to 2024, reflecting the recurring revenue nature of the business [6][19] - The company reaffirmed guidance of 8% to 10% compound annual adjusted EPS growth through 2027 [6][25] Business Line Data and Key Metrics Changes - The FTN business has grown significantly, with a pipeline now exceeding $6 billion and new business year to date yielding an average of over 10.5% [5][18] - Approximately $900 million in transactions were closed in the first half of the year, a 9% increase from the previous year [16] - The portfolio yield is currently at 8.3%, expected to increase as higher yielding investments are funded [18][23] Market Data and Key Metrics Changes - The company maintains a diversified approach, with strong representation across various markets, including energy efficiency, community solar, and renewable natural gas [12][27] - The company’s managed assets reached $14.6 billion, with a portfolio of $7.2 billion, reflecting a 1316% increase from the same time last year [18] Company Strategy and Development Direction - The company focuses on climate-positive investments and diversification across asset classes to mitigate risks from market slowdowns [4][9] - The strategy includes capital recycling and filling the void left by the lack of tax equity in the project capital stack in the future [9][10] - The company is well-positioned to thrive in the current operating environment without needing to make material changes to its existing strategy [10][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model and strategy, emphasizing the importance of an all-of-the-above energy strategy in the U.S. [6][7] - The company anticipates that rising power prices will drive additional development, particularly in renewables [8][9] - Management noted that the existing portfolio's value increases as power prices rise, and the pipeline remains insulated from policy changes [9][10] Other Important Information - The company ended the quarter with a debt-to-equity ratio of 1.8x, operating within the target range of 1.5x to 2x [22] - The company has strong liquidity levels of $1.4 billion, providing flexibility in funding and managing refinancing [22] Q&A Session Summary Question: Can you discuss the ServiceCo acquisition from Nova? - The acquisition involves a joint venture, SunStrong, which services residential solar leases and is expected to provide scale to the business [30][32] Question: How might this impact EPS going forward? - Currently, the joint venture's impact on EPS is not visible, but as it scales, margins from this business will likely contribute to EPS [34][35] Question: How is the residential solar loan portfolio performing? - The company noted that over 95% of its portfolio consists of leases, which have better performance metrics compared to loans [37] Question: What is the outlook for adjusted ROE? - Adjusted ROE is expected to trend upward gradually as capital efficiency improves, but no significant jumps are anticipated [42][44] Question: How will CCH1 debt flow through the income statement? - CCH1 debt does not appear on the balance sheet but will increase returns as investments are funded with the proceeds [46][48] Question: Can you clarify the next frontier investments? - The next frontier includes investments that are less susceptible to policy changes, with a focus on diversifying the business [52][90] Question: What is the status of international expansion? - Currently, there are no updates on international expansion, but the company may work with existing clients on non-U.S. projects in the future [91]

Financial Performance Highlights - GAAP EPS was $0.74[7], while Adjusted EPS reached $0.60[7] - Adjusted Recurring Net Investment Income YTD amounted to $164 million[7] - The company reaffirmed guidance for Adjusted EPS CAGR of 8-10% into 2027[8] Portfolio and Asset Management - The company's pipeline grew to over $6 billion[7, 17] - New asset yield YTD exceeded 10.5%[7, 22, 47] - Managed Assets increased by 13% Y/Y to $14.6 billion[25] Capital Structure and Funding - $900 million in debt was refinanced[7, 31] - The company increased CCH1 capacity by approximately $600 million[7] - The company issued $1 billion of new term debt in Q2 2025[33] Sustainability and Impact - The company's investments avoided 8.4 million metric tons of CO2 emissions annually[42]

Executive Summary & Key Highlights [Key Highlights](index=1&type=section&id=Key%20Highlights) HASI reported strong Q2 2025 progress, with H1 2025 closed transactions up **9% year-over-year**, double-digit yields on new investments, and reaffirmed **8-10% Adjusted EPS growth guidance** - HASI President and CEO Jeffrey A. Lipson stated, "Our business continues to make strong progress, with closed transactions growing **9% year-over-year** in the first half of 2025 and **double-digit yields** on new Portfolio investments supporting strong margins." He also noted an increased pipeline of more than **$6 billion**, supporting the **8-10% Adjusted EPS growth guidance** into 2027[4](index=4&type=chunk) Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Year-over-Year Change | | :----------------------------------- | :------ | :------ | :-------------------- | | GAAP EPS | $0.74 | $0.23 | +221.7% | | Adjusted EPS | $0.60 | $0.63 | -4.8% | | Adjusted Recurring Net Investment Income (in millions) | $85 | $68 | +25% | | Managed Assets (as of June 30, 2025, in billions) | $14.6 | $12.9 | +13% | | Closed Transactions Year-to-Date (in millions) | ~$894 | N/A | N/A | | New Asset Yields on Portfolio Investments | >10.5% | N/A | N/A | | Pipeline (in billions) | >$6 | N/A | N/A | | Quarterly Dividend per Share | $0.42 | N/A | N/A | - HASI received its **third investment grade rating** with an upgrade by S&P, issued **$1 billion of senior unsecured notes** at a blended effective yield of **6.3%**, and repurchased **$700 million of bonds** due in 2026 and 2027, while repaying **$200 million convertible notes** due in 2025[5](index=5&type=chunk) Financial Performance Analysis [GAAP Net Income and Adjusted Earnings](index=2&type=section&id=GAAP%20Net%20Income%20and%20Adjusted%20Earnings) HASI reported significantly increased Q2 2025 GAAP net income and EPS, driven by equity method investments, while Adjusted EPS decreased due to higher shares outstanding GAAP and Adjusted Earnings Summary | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | 6M 2025 (in thousands) | 6M 2024 (in thousands) | | :----------------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | GAAP Net Income | $98,445 | $26,540 | $155,057 | $149,566 | | GAAP Diluted EPS | $0.74 | $0.23 | $1.18 | $1.22 | | Adjusted Earnings | $74,988 | $73,683 | $153,056 | $152,589 | | Adjusted EPS | $0.60 | $0.63 | $1.23 | $1.31 | - HASI CFO Chuck Melko highlighted the generation of over **$160 million in high-quality recurring investment income** through the first half of the year, further validated by S&P's recent upgrade and the refinancing of **$900 million of debt**[8](index=8&type=chunk) [GAAP Earnings and EPS](index=2&type=section&id=GAAP%20Earnings%20and%20EPS) GAAP net income to controlling stockholders significantly increased to $98 million in Q2 2025, driving diluted EPS to $0.74, primarily due to equity method investments GAAP Earnings and EPS (Quarterly) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | | :----------------------------------- | :-------------------- | :-------------------- | | GAAP Net Income to Controlling Stockholders | $98 | $27 | | GAAP Diluted EPS | $0.74 | $0.23 | | Total Revenue | $86 | N/A | | Total Expenses | $105 | N/A | | Income from Equity Method Investments | $158 | N/A | | Income Tax Expense | $38 | N/A | - The increase in GAAP net income was primarily driven by larger income from equity method investments, resulting from higher allocations of income related to tax credits to tax equity investors in solar projects[9](index=9&type=chunk) [Adjusted Earnings and EPS](index=2&type=section&id=Adjusted%20Earnings%20and%20EPS) Adjusted earnings increased slightly to $75 million in Q2 2025, but Adjusted EPS decreased to $0.60 due to higher shares outstanding, despite growth in recurring net investment income Adjusted Earnings and EPS (Quarterly) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Year-over-Year Change | | :----------------------------------- | :-------------------- | :-------------------- | :-------------------- | | Adjusted Earnings | $75 | $74 | +$1M | | Adjusted Recurring Net Investment Income | $85 | N/A | N/A | | Gain on Sale of Assets | $8 | N/A | N/A | | Origination Fee and Other Income | $1 | N/A | N/A | | Compensation, Benefits & G&A (excluding Equity-Based Compensation) | ~$19 | N/A | N/A | | Adjusted EPS | $0.60 | $0.63 | -4.8% | - Adjusted earnings increased by **$1 million** year-over-year due to an **$18 million increase** in Adjusted Recurring Net Investment Income, offset by an **$18 million decrease** in Gain on Sale of Assets due to transaction timing[11](index=11&type=chunk) - Adjusted EPS decreased to **$0.60** in Q2 2025 from **$0.63** in Q2 2024, primarily due to higher shares outstanding[11](index=11&type=chunk) [Adjusted Recurring Net Investment Income](index=3&type=section&id=Adjusted%20Recurring%20Net%20Investment%20Income) Adjusted Recurring Net Investment Income, a key indicator of investment economics, grew **25% year-over-year** to **$85 million** in Q2 2025, driven by Portfolio growth, equity method investments, and management fees - Adjusted Recurring Net Investment Income measures recurring income from HASI's Portfolio (debt and equity investments), management fee income from securitization trusts and co-investment structures, and income from retained interests in securitized assets, net of interest expense[13](index=13&type=chunk)[15](index=15&type=chunk) Adjusted Recurring Net Investment Income Summary | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Year-over-Year Change | | :----------------------------------- | :--------------------- | :--------------------- | :--------- | | Adjusted Recurring Net Investment Income | $85,324 | $67,733 | +25.9% | | GAAP-based Net Investment Income (Loss) | $(3,317) | $8,550 | -138.8% | - GAAP-based net investment loss was **$(3) million** in Q2 2025, including an **$11 million loss** on debt extinguishment, and does not include income from equity method investments[14](index=14&type=chunk) [Interest and Rental Income Revenue](index=4&type=section&id=Interest%20and%20Rental%20Income%20Revenue) Interest and Rental Income Revenue increased to $67 million in Q2 2025, driven by higher yields and additional investment fundings, with receivables growing 9% year-over-year Interest and Rental Income Revenue Metrics | Metric | June 30, 2025 (in billions) | June 30, 2024 (in billions) | Year-over-Year Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Receivables, Net of Allowance, and Receivables Held-for-Sale | $3.1 | $2.8 | +9% | | Interest and Rental Income Revenue (Q2, in millions) | $67 | $63 | +6.3% | - The increase in Interest and Rental Income Revenue was driven by higher yields on investments and additional investment fundings[20](index=20&type=chunk) [Adjusted Income from Equity Method Investments](index=5&type=section&id=Adjusted%20Income%20from%20Equity%20Method%20Investments) Adjusted Income from Equity Method Investments grew 33% year-over-year to $79 million in Q2 2025, fueled by increased investments and higher yields, including significant growth in co-investment vehicle CCH1 Adjusted Income from Equity Method Investments Metrics | Metric | June 30, 2025 (in billions) | June 30, 2024 (in billions) | Year-over-Year Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Equity Method Investments | $4.1 | $3.4 | +21% | | Adjusted Income from Equity Method Investments (Q2, in millions) | $79 | $59 | +33% | - Growth in Adjusted Income from Equity Method Investments was driven by both an increase in Equity Method Investments and their higher yields[22](index=22&type=chunk) - Equity Method Investments include HASI's proportionate share of co-investment vehicle CCH1, which grew from **$66 million** to **$559 million** year-over-year[21](index=21&type=chunk) [Management Fees and Retained Interest Income](index=5&type=section&id=Management%20Fees%20and%20Retained%20Interest%20Income) Management Fees and Retained Interest Income Revenue increased 80% year-over-year to $9 million in Q2 2025, driven by growth in management fees from CCH1 and income from securitized assets Management Fees and Retained Interest Income Metrics | Metric | June 30, 2025 (in millions) | June 30, 2024 (in millions) | Year-over-Year Change

Company Overview - HA Sustainable Infrastructure Capital, Inc. (NYSE: HASI) declared a quarterly cash dividend of $0.42 per share, unchanged from the previous distribution, resulting in an annualized dividend of $1.68 per share, which equates to a 6.16% dividend yield [1] Market Insights - The equity market serves as a powerful mechanism for wealth creation or destruction over the long term, with daily price fluctuations contributing to significant financial outcomes [1] - Pacifica Yield focuses on long-term wealth creation by targeting undervalued high-growth companies, high-dividend stocks, REITs, and firms in the green energy sector [1]

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - The service offers a free two-week trial for potential investors to explore exclusive income-focused portfolios [1] Group 2 - The article discusses the relationship between high yield and growth, noting that a stock's price decline can lead to a high yield due to market pessimism about future growth [2] - The author emphasizes a defensive investment strategy with a medium- to long-term horizon [2]

Company Overview - HASI's equity market capitalization is greater than $3 billion[7] - The company's dividend yield is approximately 6%[7] - Total shareholder return since the 2013 IPO is 13%[7] - Adjusted EPS has grown at a CAGR of 10% since 2014[7, 9] - Adjusted ROE for 2024 was 12.5%[7, 8] Financial Performance and Targets - Managed Assets have grown by over 90% since 2020, reaching $14.5 billion as of Q1 2025[8, 90] - Adjusted Net Investment Income has grown at a CAGR of over 30% since 2020, reaching $264 million in 2024[7, 140] - New portfolio asset yields have risen to over 10.5%[93, 94] - The company targets an Adjusted EPS CAGR of 10% and a dividend payout ratio of approximately 50%[11] - The company anticipates a long-term business model with an 8-10% CAGR and a 55-60% dividend payout ratio[148] Investment Strategy and Market Opportunity - The energy transition infrastructure is forecast to require over $10 trillion of investment through 2050[11, 30] - The company's pipeline is diversified across three primary target markets, with a total value of over $5.5 billion[76, 77] - The company has invested approximately $3 billion in over 8 GW of utility-scale solar, wind, and storage assets[62]

Group 1 - The investment environment is currently highly volatile, presenting opportunities to recycle capital from past successful investments into new ideas [2] - The leader of the investing group High Yield Landlord shares a real-money REIT portfolio and transactions in real-time, providing features such as buy/sell alerts and direct access to analysts [2] - Leonberg Capital, led by Jussi Askola, is a value-oriented investment boutique that consults on REIT investing and has established relationships with top REIT executives [2] Group 2 - The company invests significant resources, including thousands of hours and over $100,000 annually, into researching profitable investment opportunities [1] - The approach has garnered over 500 five-star reviews from satisfied members who are experiencing benefits [1]

Financial Data and Key Metrics Changes - The preliminary vote report indicates that all three proposals have been approved, reflecting shareholder support for the company's governance and financial practices [6][7]. Business Line Data and Key Metrics Changes - No specific data on business lines or key metrics changes were provided in the meeting [8]. Market Data and Key Metrics Changes - No specific market data or key metrics changes were discussed during the meeting [8]. Company Strategy and Development Direction and Industry Competition - The company continues to focus on sustainable infrastructure, as indicated by the proposals presented at the meeting, including the election of directors and the appointment of an independent accounting firm [5][6]. Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during the meeting, as there were no questions raised [8]. Other Important Information - The meeting was conducted via webcast, and shareholders were encouraged to participate in the voting process [2][4]. Summary of Q&A Session - No questions were raised during the Q&A session, and the meeting concluded without any discussion on recent results of operations [8].

Asset Management - The company managed assets totaling approximately $14.5 billion as of March 31, 2025, with a portfolio valued at approximately $7.1 billion[179]. - The portfolio consisted of approximately $3.4 billion in Behind-the-Meter (BTM) assets, $2.7 billion in Grid-Connected (GC) assets, and $1.0 billion in Fuels, Transport, and Nature (FTN) assets[188]. - The company's pipeline of potential new opportunities as of March 31, 2025, was valued at more than $5.5 billion, with approximately 49% related to BTM assets and 30% related to GC assets[183]. - Approximately 54% of the portfolio consisted of unconsolidated equity investments in renewable energy-related projects[188]. - Equity method investments increased to $3.993 billion as of March 31, 2025, from $3.612 billion at the end of 2024, reflecting a growth of 10.6%[210]. Financial Performance - Total revenue for the three months ended March 31, 2025, was $96.941 million, a decrease of $8.875 million or 8% compared to $105.816 million in the same period of 2024[194]. - Net income for the three months ended March 31, 2025, was $58.185 million, a decrease of $66.363 million or 53% compared to $124.548 million in 2024[194]. - Adjusted earnings for the three months ended March 31, 2025, were $78.067 million, slightly down from $78.906 million in 2024[204]. - Income from equity method investments decreased by $70.561 million or 45% to $87.989 million, primarily due to lower mark-to-market income[194]. - GAAP-based net investment income for Q1 2025 was $1.800 million, significantly lower than $8.666 million in Q1 2024, marking an 79.2% decrease[208]. Income and Expenses - Interest income from receivables for the three months ended March 31, 2025, was $66 million, with an average interest rate of 8.7%[191]. - Interest income decreased by $2.298 million or 3% to $66.394 million, while rental income dropped significantly by $1.763 million or 96% to $83 thousand[194]. - Total expenses increased by $9.224 million or 10% to $102.847 million, driven by a $4 million increase in compensation and benefits expenses[194]. - The company recorded a provision for loss on receivables and securitization assets of $3.812 million, an increase of $1.790 million or 89% compared to $2.022 million in 2024[194]. Cash Flow and Liquidity - Cash available for reinvestment was $106.122 million for the TTM ended March 31, 2025, a decrease from $717.806 million for the TTM ended March 31, 2024[214]. - Total cash collected from the portfolio for the year ended December 31, 2024, was $891.250 million, compared to $442.322 million for the year ended December 31, 2023[216]. - Principal collections from receivables for Q1 2025 were $40.455 million, a decrease from $141.594 million in Q1 2024[213]. - Adjusted cash from operations plus other portfolio collections for Q1 2025 was $265.908 million, down from $910.075 million in Q1 2024[216]. - Total liquidity as of March 31, 2025, is $1.302 billion, consisting of $67 million in unrestricted cash and $1.235 billion in unused credit capacity[224]. Debt and Financing - The company has $4.5 billion of debt with fixed rates or hedged floating rate debt, and $218 million of debt with variable interest rates as of March 31, 2025[259]. - The debt to equity ratio was approximately 1.9 to 1 as of March 31, 2025, below the board-approved leverage limit of 2.5 to 1[235]. - Cash provided by financing activities for the three months ended March 31, 2025, was $294 million, significantly higher than $51 million in the same period of 2024[246]. - The company plans to continue issuing debt and equity to finance its business, utilizing both on-balance sheet and off-balance sheet securitizations[232]. - The company increased the available capacity under its unsecured revolving credit facility to $1.55 billion during the three months ended March 31, 2025[225]. Risk Management - The company employs a risk rating system to evaluate projects, estimating the probability of default and recovery rates based on obligors' credit ratings[255]. - The company is exposed to credit risk from various projects, including those not backed by government guarantees, such as financing for universities and hospitals[254]. - Interest rate risk is influenced by factors such as governmental policies and economic conditions, impacting the company's ability to secure financing[256]. - The company actively manages interest rate risks through fixed rate financing structures and financial instruments like interest rate swaps[257]. - Environmental risks are integral to the company's investment parameters, with ongoing monitoring of these risks post-transaction[265].

Core Insights - HA Sustainable Infrastructure Capital (HASI) reported a revenue of $28.45 million for the quarter ended March 2025, reflecting a decline of 32.1% year-over-year and a surprise of -13.78% compared to the Zacks Consensus Estimate of $33 million [1] - The company's earnings per share (EPS) was $0.64, consistent with the consensus estimate but down from $0.68 in the same quarter last year [1] Revenue Breakdown - Gain on sale of assets was reported at $18.67 million, exceeding the average estimate of $13.56 million by four analysts, but showing a year-over-year decline of 34.8% [4] - Rental income was $0.08 million, surpassing the average estimate of -$0.09 million from three analysts, representing a significant year-over-year decrease of 95.5% [4] - Interest income was $66.39 million, slightly below the estimated $67.66 million by three analysts, with a year-over-year decline of 3.4% [4] - Other income was reported at $4.80 million, exceeding the average estimate of $4.24 million from two analysts [4] - Securitization asset income was $7 million, surpassing the average estimate of $5.19 million from two analysts, indicating a year-over-year increase of 42.9% [4] Stock Performance - Over the past month, shares of HA Sustainable Infrastructure Capital have returned +6.5%, compared to a +10.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]