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Greetings. And welcome to Energy Vault's Second Quarter 2026 Earnings Call. Please note this conference is being recorded. I would now like to turn the conference over to Nitin Dahiya, CFO. Please proceed, sir.
Thank you, Operator. Good afternoon, everyone, and welcome to Energy Vault's Second Quarter 2026 Financial Results Call. Our earnings release and investor presentation are available on the Investor Relations section of our website, and we will refer to the presentation throughout today's call. Before we begin, I want to remind everyone that today's discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results may vary materially from those expressed or implied by these statements. Please refer to our most recent SEC filings and the safe harbor language in today's earnings materials for a discussion of the factors that could cause actual results to differ. We undertake no obligation to update these statements except as required by law. We will also discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are included in our earnings materials. On a personal note, this is my first earnings call as Chief Financial Officer of Energy Vault. The combination of our differentiated power infrastructure platform, growing contracted asset base, strong execution, and disciplined approach to capital creates a compelling opportunity to build long-term shareholder value. I'm excited to join the team at this important inflection point in Energy Vault's journey. Joining me today is Robert Piconi, our Chairman and Chief Executive Officer. Robert will take us through the strategic and operational update, and then I will take you through the quarter, liquidity, backlog, and our increased full-year guidance. Robert, over to you.
Great, Nitin. Thank you, and I'd like to welcome everyone to our Q2 earnings call. And also, Nitin, pleasure to have you here. We're all very excited. Nitin just joined us last month and we're excited for the contributions in this very important phase in our company's growth profile. So welcome, Nitin. I also want to remind everyone that we have posted an investor deck to the investor website. It would be helpful for those following along if you'd like to reference that. I will be referring to some of those charts as we go through and before turning it back to Nitin on the results. Hopefully everyone's had a chance to take a brief read of our earnings announcement, and as I think the results reflect, I'd say two main things up front. First, the execution of our strategy. If you have been following us, that execution means delivering for customers, and that shows up in revenue. It shows up in profitable revenue and gross margins, and it shows up in the quality and availability of the power solutions we provide. Second, it also reflects commercial execution and capturing the demand being driven by AI compute infrastructure. This is something we've talked about strategically. If you go back the last 6 to 12 months, we've been positioning our company with our expertise and strong execution capabilities with customers, not just in the U.S. but globally, as we've demonstrated. We're very excited to see that begin to show up in the results this quarter, and as we'll talk about, in our improved outlook for this year and next. The strategy we've been describing is now translating into the results we've just seen. That means stronger growth, higher margins, increasing cash, a substantially larger backlog, and importantly, greater visibility into both near-term revenue and long-term recurring earnings. If you turn to Chart 3 in the deck, three main messages there before I jump into some of the numbers. First, the '26 and '27 outlook has strengthened materially. As you've seen in the backlog, the backlog increased by about $650 million to roughly $2 billion. That's a strong 40% increase quarter-over-quarter, and more than double year-over-year. We expect to convert a significant portion of that backlog into revenue over the next 12 to 18 months, with about 40% expected to convert relatively near term at attractive margins. This gives us substantial visibility into the delivery ramp ahead of us, including a very strong Q4, and into 2027. Second, we're converting AI data center and high-compute platform demand into contracted wins. We discussed the Crusoe win about six months ago as we began to enter the modular data center space. In addition, we recently announced a 1.25 gigawatt agreement, our largest contract in the history of the company, to support an integrated power generation and storage solution for hyperscale data centers. These efforts have given us substantially greater visibility into the delivery ramp. Third, we've strengthened capital formation and project financing capabilities. Nitin's appointment as CFO brings deep capital markets and energy infrastructure expertise, and we've also appointed Cory Magnuson as President of Asset Vault in Q2. These additions enhance our structured finance and project finance capabilities. The next phase of growth is not simply about winning more projects; it's about financing the right projects efficiently, protecting returns, bringing assets online predictably and at the quality levels we've achieved to date, and converting execution into cash flow and long-term shareholder value. If you turn to Chart 4, I'll touch on some numbers while Nitin covers detail in a minute. We discussed the 1.1 gigawatts over the last three months. Those gigawatts are under our control: some operating, some under construction, and some in ready-to-build state. That 1.1 gigawatts is what translates into the roughly $180 million of recurring annualized EBITDA we've communicated. Looking at the backlog composition, which we'll show on the deck, that increased to $2 billion and gives us much more visibility. On revenue, we've doubled revenue year-over-year — a reflection of execution on the backlog in projects in the U.S. and Australia. One of the most impressive performances this quarter was our gross margin. Gross margin is fundamental because those are the dollars and cash generated from revenue to cover operating expense. We've improved adjusted gross profit up to 38.6%, which excludes some non-cash depreciation elements associated with our build, own, and operate portfolio. Even GAAP gross profit grew to 31% this quarter. This shows we are executing well in the field to avoid issues when building large energy projects, and doing it with high quality and safety. Importantly, this has to show up in cash. This is our sixth straight quarter of increasing cash, reflecting focus and discipline to build the cash balance and improve the balance sheet. Cash increased 26% quarter-over-quarter and more than 150% year-over-year. Turning to backlog and Charts 5 and 6, we've provided detail on the composition and how we expect it to evolve through the end of the year. On Slide 6, we've characterized backlog between build-and-transfer and build, own, and operate. This is important because about 40% of the backlog is build-and-transfer supporting near-term revenue conversion and cash generation, while about 60% is build, own, and operate, creating long-term recurring revenue and earnings visibility. Standing at $2 billion today, that's roughly 3x where it stood at the end of 2024. The composition is important: about 60% tied to recurring revenue from owned and operated assets, and 40% supporting near-term project delivery over the next 12 to 18 months. This dynamic is what we intended to see. As we transition to owning and operating assets, we give up some near-term revenue, and we wanted to see good conversion on our build-and-transfer business to continue to build revenue and cash growth — and that's what we're delivering. Together they give a more balanced, predictable, and valuable earnings model. On Chart 6, you can see a breakdown of the build-and-transfer megawatt-hours. The backlog on the revenue side is about $700 million of the $2 billion backlog, with advanced contract negotiations representing another roughly $500 million expected to be executed and closed. The combined revenue for this year and 2027 is about $1.2 billion underway. You can see the gross margins associated with that revenue and why we are lifting gross margin to the upper end of our range. Speed to power matters — executing quickly and predictably helps win contracts and drive profitable growth. The build, own, and operate portion is the other $1.3 billion of backlog. These are long-duration revenue streams, typically 7 to 15 years, with gross margins often in the 70% to 80% range. As we build these projects and they come online, they contribute to the $180 million of annualized EBITDA we've discussed. We'll continue to update this chart to give visibility into near-term revenue and the owned portfolio. On Chart 7, we are increasing and raising the ranges of our guidance. Revenue guidance is increased to $270 million to $310 million from $225 million to $300 million previously. As with last year, we expect a larger ramp in Q4, given the supply chain is secured including batteries and other high-voltage equipment. We're lifting the GAAP gross margin range to 20% to 25% and narrowing cash guidance to $160 million to $200 million year-end. The additions of Nitin and Cory strengthen our capital formation and project financing capabilities to keep a healthy and growing balance sheet. Chart 8 reflects revenue growth over the last three years and backlog growth, which we expect to approach almost $3 billion when considering expected contract signings and advanced negotiations. Jumping to Chart 11, I'd like to spend time on our powered land portfolio. We summarized existing powered land projects: the Calistoga Resiliency Center is a 48-hour backup for the City of Calistoga, Napa, supporting Pacific Gas and Electric under a 10.5-year agreement and operating as planned. Snyder and our AI campus: we recently announced breaking ground with our Crusoe modular data center project, starting at 8 megawatts and heading to 25 megawatts for the initial deployment, with plans to expand the site up to 500 megawatts combining generation, renewables, and storage. That's a wholly owned facility and a showcase with multiple storage technologies operating there today. For Mesa del Sol in New Mexico, we have a powered land opportunity up to the 75 megawatt milestone next, planning to start in Q1 in New Mexico. We acquired rights to up to 225 megawatts of gas generation and reciprocating engines capability to complement with storage and solar over time up to 1 gigawatt in that area. We have multiple discussions with hyperscaler off-takers and expect announcements in the coming months. These larger opportunities create 15-year plus revenue streams. The 1.25 gigawatt announcement that integrates power generation and storage is moving very quickly and advances our expertise. Page 12 shows details of the projects that make up the $180 million of annualized recurring EBITDA: the 1.1 gigawatts of projects are operating within the timeframes outlined. The first two on the left, Calistoga and Cross Trails, are already operating. We're expecting updates on Sosa in the coming months. Crusoe deployment is underway, and projects in Australia and Japan from our recent acquisition — notably a 350-megawatt project — are progressing. Page 13 walks through how we expect megawatts to come online year-by-year; these are annualized numbers. The illustration shows growth to roughly almost 5 gigawatts by 2030 and approaching about $2 billion annualized EBITDA. We'll continue to keep investors updated. Finally, on Page 15, our second-half focus areas: execution remains job one. We expect additional revenue growth and upside on margin in the second half, with upside on some projections we expect to close in the coming months and will provide updates in November. Converting the owned-and-operated pipeline into megawatts under control is a key priority; we have multiple projects to add to the 1.1 gigawatts. The large behind-the-meter modular generation and storage platform we announced is focused on speed to power; we expect large revenue in the second half and in 2027 and hope to expand that platform and relationship across the U.S. We're also optimizing the company's capital structure to reduce cost of capital, strengthening the balance sheet, and building internal financing capabilities. Globally, expect continued footprint expansion in the largest storage markets, including Australia and Japan and continued focus in the U.S. With that, I'm going to turn it back to Nitin to go over some of the financial details.
Thank you, Robert. I will cover the second quarter financial results, liquidity, capital discipline, backlog, and our updated full-year outlook. Revenue for the second quarter was $17.4 million, compared with $8.5 million in the prior year period, an increase of 104%. This increase was driven by progress on our Australian projects. GAAP gross profit was $5.4 million compared to $2.5 million a year ago, an increase of 116%. GAAP gross margin came in at 31%, up 140 basis points. Adjusted gross margin, which excludes depreciation and amortization associated with owned and operated projects, was up almost 900 basis points year-over-year. The gross margin performance is important because it demonstrates that the growth we are seeing is not simply volume-driven. The gross margin was exceptionally strong this quarter and project mix and execution continues to support healthy economics as the business scales. Adjusted operating expenses were $23.7 million compared to $16.2 million a year ago. The increase primarily reflects commercial support, project development, and legal expenses associated with scaling the owned-and-operated and AI infrastructure platforms. We expect to see the benefit of this higher OpEx over the next 12 months in contract activity. As such, we remain focused on managing controllable OpEx while investing in growth where warranted. GAAP net loss for the quarter was $29.7 million versus $34.9 million in the prior year period. GAAP EPS was a loss of $0.17 compared to $0.22 last year. Adjusted net loss was $24.6 million compared to $18.4 million a year ago. Adjusted EBITDA was a loss of $17 million compared to a loss of $13.6 million in the prior year period, with higher operating expenses partly offset by higher gross profit. Turning now to liquidity: total cash and cash equivalents, including restricted cash, were $148 million on June 30th. This was approximately $31 million higher sequentially and $90 million higher year-over-year. We remain focused on ensuring adequate liquidity for the business as it grows. As the company moves toward a larger owned-and-operated portfolio, ensuring adequate parent liquidity and optimizing each project's capital structure are fundamental to creating value for shareholders. We intend to extensively use project-level financings, including tax equity, and use corporate capital only where appropriate with clear return thresholds and disciplined allocations. That discipline is especially important as the opportunity set expands. Backlog as of August 10th was about $2 billion, more than doubling versus a year ago. About 60% is attributable to owned-and-operated projects, and 40% to third-party projects. The increase in third-party backlog materially improves near-term visibility across '26 and '27, while the owned-and-operated component creates a growing base of contracted, longer-duration earnings as those assets reach commercial operations. The additional disclosure on Slide 6 should give you a better sense of how each component is expected to drive future earnings mix. Moving on to guidance: we are increasing our full-year 2026 revenue guidance to $270 million to $310 million from a prior range of $225 million to $300 million. The increase in guidance reflects stronger commercial execution and stronger visibility in contract timelines. Quarterly revenue recognition can be uneven because of project timing and milestone accounting, and I would flag that a majority of second-half revenue is expected to be recognized in the fourth quarter. We are narrowing our full-year GAAP gross margin range to 20% to 25% from 15% to 25%. Year-end cash is currently targeted at $160 million to $200 million compared to $150 million to $200 million previously. Together the raised revenue outlook, revised gross margin, and strong liquidity demonstrate the increasing financial capacity of the platform as we continue to grow the owned asset portfolio. As we look to the second half, our priorities are straightforward: execute the backlog, maintain margin discipline, ensure adequate liquidity, and deploy capital against the highest-return opportunities. With that, I will hand the call back over to Robert for a few closing comments before Q&A.
Great. Thank you very much. Again, I want to thank everyone and, in particular, our employees for their focus and execution as we delivered another solid and very strong quarter. I think it's a great precursor, and as we look at the second half, you can continue to expect a strong focus on our customers and on the most attractive and largest growth opportunities. We referenced a landmark milestone in the signing of our largest contract since inception, a little over $0.5 billion. We like these types of relationships not just for the size, but for the ability to grow that relationship over time. We remain selective with customer sets, focusing on partners with whom we can build trust with initial projects and then expand over time. You can continue to expect that approach as we look at the rest of this year. We're encouraged by what this backlog growth means for 2027. At our next earnings in November, we'll share more about our 2027 expectations. With that, operator, I'll turn it back over to you for the Q&A.
分析師問答
Operator instructions were provided to enable the question-and-answer session. The first question comes from Justin Clare with ROTH Capital Partners. Not just for the size, but for the ability to grow that relationship over time. We remain selective with customer sets, focusing on partners with whom we can build trust with initial projects and then expand over time. You can continue to expect that approach as we look at the rest of this year. We're encouraged by what this backlog growth means for 2027. At our next earnings in November, we'll share more about our 2027 expectations. With that, operator, I'll turn it back over to you for the Q&A.
I wanted to start out on the 1.25 gigawatt hyperscaler agreement and just wonder how we should think about the $500 million to $600 million of revenue in terms of the split between 2026 and 2027, if you can share. And then wondering if the margin profile you anticipate there is consistent with the 20% to 25% range you guided for 2026. Also, you indicated there are projects in advanced discussion — could you comment on the potential margins there?
Sure, Justin. Regarding the split, you can assume a portion of that $500 million to $600 million will be recognized in Q4 2026. This deal had been in the works for several months, so we are able to execute a portion of that delivery in Q4; however, the majority of that revenue will be in 2027. As far as margins, we feel very good about the range, which is why we raised guidance to the higher end of the range of 20% to 25%. You saw the quarter's results that we just delivered with strong adjusted gross margins. We feel strong about maintaining that range and carrying that profile into 2027.
Got it. That's helpful. On the same 1.25 gigawatt agreement, you described this as a repeatable platform. Can you speak to, beyond the initial deployment, how you would characterize the opportunity pipeline? What storage use cases are emerging where you're seeing the most significant demand? And have discussions moved beyond the initial hyperscaler, or are you focused on that one customer at this stage?
A few points. We've developed a modular platform in partnership with a large power generation EPC partner; for confidentiality we haven't named the partner. This platform integrates energy storage, gas generation (we referenced Caterpillar gas generation in the announcement), and is designed for speed to power in behind-the-meter deployments. We plan 250 megawatt modular solutions to scale into the 1.25 gigawatts noted. The market opportunity is significant because grid upgrades and transmission investments can take three to five years; our platform can deploy more quickly to meet immediate demand. Our software and power plant controller are important differentiators — orchestrating load optimization and enabling five nines quality and always-on availability for hyperscalers. We view the solution as expandable with this partner and across the market, and we expect to deploy the solution broadly given the strong market demand.
The next question comes from Julien Dumoulin-Smith with Jefferies. Please proceed.
This is Leonard on for Julien. Congratulations on the great results. The current 1.1 gigawatt portfolio underpins roughly $180 million of annualized EBITDA. As you add new projects and potentially grow backlog from roughly $2 billion toward $3 billion, where do you expect the highest incremental value to come from? Traditional BESS assets, powered land projects, or AI infrastructure deployments? Where do you expect the largest share of EBITDA growth and backlog expansion over the next several years?
No change in our strategy: we believe building, owning, and operating assets over time is the best use of capital to create longer-term recurring revenue streams. The segments we expect to deliver the most profit include powered land solutions and our powered shell or modular data center solutions, which we will own and operate. We also have models where we deliver batteries in an ESaaS model, owning and operating batteries as part of firming generation or grid power for customers. Owning and operating those megawatts over time should create long-term value. The 1.25 gigawatt platform I referenced is a build-and-transfer model and is reflected in near-term backlog growth. The market is seeking integrated solutions that combine different technologies, and our reputation for high-quality delivery and grid knowledge drives demand. We remain selective on projects and customers, focusing on larger customers who align with our culture, quality focus, and long-term sustainability goals.
The next question is from Noel Parks with Tuohy Brothers.
A couple of things. As a reference point, which site in your portfolio is the most active construction or installation site at the moment?
We have several active construction sites. In Australia, Sosa is an active build; Stoney Creek is also active on our build, own, and operate side where we've begun construction activities. On the build-and-transfer side in Australia, we have a major 200 megawatt battery project with ACEN where we're finalizing turnover and the R2 milestone, which is the grid sign-off milestone in Australia. In the U.S., with the ramp we have coming in the second half, several sites are finalizing deliveries and installations — Consumers Energy is one example from prior projects. For the 1.25 gigawatt deal, work has been underway for the last three to five months supporting deliveries into Q4. And at Snyder, Texas, work has started on civil activities and high-voltage upgrades for the Crusoe modular data center project. Those are some of the most active areas right now globally.
Thanks. You mentioned the 1.25 gigawatt project has been active for three to five months. I'm curious whether the customer started with a behind-the-meter plan from the outset or if they pivoted to include energy storage because of grid limitations and interconnect difficulties during development.
The EPC partner we're working with is one of the larger distributors and EPC companies in the U.S. that deploys Caterpillar gas generation and provides balance-of-plant design and integration. Relationships of this size evolve from smaller initial projects where parties learn to work together. That relationship grew, and the partner felt comfortable working with us and their hyperscaler customer on a large solution. Our software and integration capabilities were an important differentiator, enabling orchestration across the gas generation and storage to deliver five nines uptime and always-on availability. This was not an overnight decision; it grew out of multiple engagements and pilot work, and it's structured as a framework agreement we intend to expand with the partner given strong market demand.
The next question comes from Sid Rajeev with Fundamental Research.
Congratulations on the progress. With multiple projects underway, could you discuss the financing status of some of the near-term projects like Sosa and Stoney Creek?
From a financing perspective, the project financings for both Sosa and Stoney Creek are well underway. We've already acquired some equipment to safe-harbor components for Sosa in the U.S., including high-voltage equipment. Financing efforts for both projects are proceeding in line with expectations given the attractive locations. For Stoney Creek, we won the long-term energy service agreement (LTESA) with the New South Wales government, a 14-year agreement providing offtake certainty and supporting project finance. We're in final stages for additional financing there as well.
Thank you. One more question: how are Calistoga and Cross Trails operating? They are smaller projects but give a sense of operational performance.
Both are running well. Both have been above 99% availability. The Calistoga Resiliency Center is a standby system that also provides some ancillary services, and Cross Trails is operating at about 99.4% availability year-to-date.
The next question comes from Brian Lee with Goldman Sachs.
This is Tyler on for Brian. First, can you discuss any implications from the recent data center moratorium in Texas on your business, including potential timing impacts for revenue recognition of the 1.25 gigawatt announcement? Second, on Slide 10, it looks like your powered land opportunity declined to about 1.5 gigawatts compared to 1.8 gigawatts last quarter while the BESS opportunity nearly doubled to about 3 gigawatts from 1.9 gigawatts last quarter. Can you discuss the puts and takes of what changed? And finally, appreciating the higher cash and improved outlook, I believe a lot of the uplift in the quarter was related to working capital and financing. How are you viewing cash burn and other potential cash inflows such as ITCs for the balance of the year? Also, it looks like you've only drawn about $25 million of the preferred equity from OIC that closed almost a year ago; how are you thinking about leveraging that available capital and how should we expect this to trend in coming quarters?
On the Texas data center moratorium, we've taken that into account in our planning and guidance. The solution we announced is a behind-the-meter solution that does not rely on the grid in the same way, and our planning reflects any such regional policy risks. Regarding Slide 10 and mix changes between powered land and powered shell (modular data center/powered shell), the mix shift reflects market dynamics: we're seeing more opportunity at the edge of the grid and for modular data center deployments — smaller points of interconnect, 50 to 100 megawatts — which can allow faster deployments and coexistence with local communities. The increase in our battery opportunities also reflects evolving solutions where we provide owned batteries as part of integrated solutions to firm generation or grid services, including opportunities embedded in neo-cloud market segments. On cash and ITCs: we closed two of the ITCs in the prior quarter and expect the third, roughly $15 million, to close in the next month. The quarter's cash increase also reflects our working capital approach — we drew on an accounts receivable facility and other short-term facilities to fund deposits to suppliers to ensure delivery into Q4. These working capital facilities are standard; we will draw and pay them down in line with project collections. Regarding the OIC preferred equity, we have about $25 million drawn to date from that facility; we will manage draws based on project and corporate needs and focus on optimizing project-level financing and using corporate capital only where it meets our return thresholds. Overall, our working capital management and finance facilities support the revenue ramp and higher guidance for the year.
At this time, I would like to turn the floor back over to Robert Piconi for closing comments.
Thank you. To close, we are in a position we want to be in, executing off a materially larger backlog. Our team is built for the scale and is executing well, delivering results above expectations. We're focused on the second half of the year and on commercial activity, contract negotiations, and execution. We look forward to sharing more on 2027 at our November earnings. We're being selective on regions and focused on the highest-growth markets where activity and demand are strongest. Speed to power remains a key theme; our software and integration across storage and generation enable predictable delivery for customers, which is driving selection of Energy Vault. Finally, thanks to our employees for their focus and execution. We've announced senior hires to build the talent base required for our next phase of growth. With that, operator, we'll end the call.
Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.