HA Sustainable Infrastructure Capital, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• GAAP net income attributable to controlling stockholders was $146.5 million in Q3 2026, compared to $83.3 million in Q3 2025.
• GAAP diluted earnings per share (EPS) were $1.04 in Q3 2026, up from $0.61 in Q3 2025.
• Adjusted earnings were $108.1 million in Q3 2026, compared to $102.5 million in Q3 2025.
• Adjusted EPS was $0.82 in Q3 2026, compared to $0.80 in Q3 2025.
• Year-to-date (YTD) through September 30, 2026, GAAP net income was $203.1 million, compared to $238.3 million in the same period in 2025.
• YTD Adjusted EPS was $2.34, compared to $2.04 in 2025.
• GAAP-based net investment income was $0.4 million in Q3 2026, compared to $5.9 million in Q3 2025.
• Adjusted Recurring Net Investment Income was $121.3 million in Q3 2026, up 15% year-over-year from $105.1 million.
• YTD Adjusted Recurring Net Investment Income was $329.5 million, up from $268.7 million in 2025.
• GAAP-based Return on Equity (ROE) was 21.1% in Q3 2026.
• Adjusted ROE was 16.1% in Q3 2026, with a YTD Adjusted ROE of 15.6%.
• Total revenue was $114.5 million in Q3 2026, compared to $103.1 million in Q3 2025.
• Total expenses were $137.8 million in Q3 2026, compared to $108.2 million in Q3 2025.
• Interest expense was $96.4 million in Q3 2026, up from $71.5 million in Q3 2025.
• Income from equity method investments was $213.9 million in Q3 2026, compared to $124.6 million in Q3 2025.
• Weighted-average interest cost was 6.2% in Q3 2026, compared to 5.9% in Q3 2025.

Guidance and Future Outlook:

• Reaffirmed Adjusted EPS guidance for 2026 in a range of $3.55 to $3.65.
• Reaffirmed Adjusted ROE guidance of at least 17.0% for 2028.
• Guidance includes a target to reduce the payout ratio to below 50% by 2028 and less than 40% by 2030.
• Expects minimal share issuances through the ATM program in 2026.
• Pipeline of investments exceeded $6.5 billion as of September 30, 2026.
• Weighted average yields on new portfolio investments were underwritten at more than 11% through the first three quarters of 2026.

Business Segments and Product Lines:

• Managed Assets grew 27% year-over-year to $19.0 billion as of September 30, 2026.
• Fee-generating assets in co-investment vehicles increased 231% year-over-year to $2.0 billion.
• Portfolio assets totaled approximately $9.1 billion as of September 30, 2026.
• Portfolio yield was 9.2% for the nine months ended September 30, 2026, compared to 8.5% in the same period in 2025.
• Equity Method Investments were $5.5 billion as of September 30, 2026, up 33% from $4.1 billion in 2025.
• Receivables, net of allowance, totaled $3.3 billion as of September 30, 2026.
• Closed approximately $2.5 billion in balance sheet and CCH1 transactions year-to-date through Q3 2026.
• Closed new investments in a wastewater treatment facility and a carbon dioxide removal project.
• Announced an expansion of the partnership with Invenergy via an investment in a 2.7 GW portfolio of utility-scale renewable/storage projects.
• Closed new transactions totaling approximately $1.1 billion in Q3 2026.
• Portfolio diversification includes approximately $4.4 billion in Behind-the-Meter assets and $3.0 billion in Grid-Connected assets.

Market and Competitive Landscape:

• The company operates in the sustainable infrastructure sector, investing in utility-scale solar, storage, onshore wind, distributed solar, RNG, and energy efficiency.
• Managed Assets avoid approximately 10.8 million metric tons of carbon emissions annually based on the proprietary CarbonCount score.
• Transactions closed in the quarter are estimated to avoid 384,000 metric tons of carbon emissions annually.
• The company maintains a well-diversified portfolio across established sustainable infrastructure end markets.

Risks and Challenges:

• Recognized a $21.4 million economic loss on consolidated project assets in Q3 2026 due to higher-than-expected remediation costs for assets consolidated in Q2 2026.
• GAAP net income includes a $35 million unrealized gain related to an investment in a solar asset servicing platform, which was partially offset by the economic loss on consolidated assets.
• Two investments previously recognized with a GAAP impairment loss of $70 million in Q2 2026 were moved to Category 3 (substantial doubt regarding recovery) in Q3 2026 due to remediation costs.
• Interest expense increased due to the issuance of junior subordinated notes bearing higher interest rates.
• Forward-looking statements are subject to risks including changes in interest rates, market environment, and project performance assumptions.

Management Commentary and Tone:

• CEO Jeffrey A. Lipson stated the team is executing on the business plan by adding new clients, deepening relationships, diversifying into new asset classes, and optimizing the capital platform.
• CFO Chuck Melko noted the business model is mitigating impacts of the higher interest rate environment, with new asset yields increasing to over 11% and net investment margins maintained.
• Management highlighted "superb financial results" through the first three quarters of 2026, citing a nearly $3 billion increase in Managed Assets, 23% growth in Adjusted Recurring Net Investment Income, and 15% growth in Adjusted EPS year-to-date.

Other Key Points:

• The Board of Directors approved a quarterly cash dividend of $0.425 per share of common stock, payable on January 8, 2027, to stockholders of record as of December 29, 2026.
• Total debt outstanding was $6.5 billion as of September 30, 2026, with a debt-to-equity ratio of 1.8x.
• Unrestricted cash and cash equivalents totaled $102 million, with total liquidity of $2.0 billion including $1.9 billion of unreserved capacity under the revolving credit facility and commercial paper program.
• 87% of debt outstanding was either fixed-rate or hedged base rate debt.
• Junior subordinated notes are treated as 50% equity for leverage ratio calculations based on partial equity credit from rating agencies.
• GAAP net income for Q3 2026 was driven by total revenue of $114 million and income from equity method investments of $214 million, partially offset by total expenses of $138 million and income tax expense of $48 million.
• General and administrative expenses increased by $10 million compared to Q3 2025, largely due to $8 million in additional expenses associated with a project company consolidated in Q2 2026.