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

Financial Performance

• GAAP diluted earnings per share (EPS) were $1.04 in Q3 2026, up from $0.61 in Q3 2025; year-to-date (YTD) GAAP diluted EPS was $1.47 compared to $1.79 in the prior year period.
• Adjusted EPS was $0.82 in Q3 2026, up from $0.80 in Q3 2025; YTD Adjusted EPS was $2.34 compared to $2.04 in the prior year period.
• GAAP net income attributable to controlling stockholders was $146.5 million in Q3 2026 versus $83.3 million in Q3 2025; YTD GAAP net income was $203.1 million versus $238.3 million.
• Adjusted Earnings were $108.1 million in Q3 2026 versus $102.5 million in Q3 2025; YTD Adjusted Earnings were $308.6 million versus $255.6 million.
• Adjusted Recurring Net Investment Income totaled $121.3 million in Q3 2026, a 15% increase from $105.1 million in Q3 2025; YTD Adjusted Recurring Net Investment Income was $329.5 million versus $268.7 million.
• GAAP-based Net Investment Income was $0.4 million in Q3 2026 compared to $5.9 million in Q3 2025.
• GAAP-based Return on Equity (ROE) was 21.1% in Q3 2026; Adjusted ROE was 16.1% in Q3 2026 and 15.6% YTD.
• Total revenue was $114.5 million in Q3 2026 compared to $103.1 million in Q3 2025; YTD revenue was $359.5 million versus $285.7 million.
• Total expenses were $137.8 million in Q3 2026 compared to $108.2 million in Q3 2025; YTD expenses were $398.2 million versus $316.5 million.
• Interest expense was $96.4 million in Q3 2026 versus $71.5 million in Q3 2025; YTD interest expense was $283.1 million versus $215.9 million.
• Weighted-average interest cost was 6.2% in Q3 2026 compared to 5.9% in Q3 2025.
• Total debt outstanding was $6.5 billion as of September 30, 2026, up from $5.2 billion as of September 30, 2025.
• Debt-to-equity ratio was 1.8x as of September 30, 2026, within the target range of 1.5x to 2.0x.
• Unrestricted cash and cash equivalents totaled $102 million as of September 30, 2026; total liquidity was $2.0 billion.

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% by 2028.
• Guidance includes a reduction in 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 new investments exceeded $6.5 billion as of September 30, 2026.
• New asset yields on Portfolio investments were underwritten at more than 11% through the first three quarters of 2026.
• Portfolio yield was 9.2% for the nine months ended September 30, 2026, compared to 8.5% in the prior year period.

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.
• The Portfolio totaled approximately $9.1 billion, consisting of $4.4 billion in Behind-the-Meter assets, $3.0 billion in Grid-Connected assets, and the remainder in Fuels, Transportation, and Nature and Other Sustainable Infrastructure.
• Equity Method Investments were $5.5 billion as of September 30, 2026, up 33% from $4.1 billion in the prior year period.
• Receivables, net of allowance, and Receivables Held-for-Sale totaled $3.4 billion as of September 30, 2026, up 1% from the prior year period.
• Closed approximately $2.5 billion in balance sheet and CCH1 transactions year-to-date through Q3 2026.
• Closed new transactions totaling approximately $1.1 billion in Q3 2026.
• 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 investments in a wastewater treatment facility and a carbon dioxide removal project.
• Retained Interests in Securitization Trusts were $296 million as of September 30, 2026, up 7% from the prior year period.

Market and Competitive Landscape

• The company operates in established sustainable infrastructure end markets including utility-scale solar, storage, onshore wind, distributed solar, RNG, and energy efficiency.
• Managed Assets are avoiding approximately 10.8 million metric tons of carbon emissions annually.
• Transactions closed in Q3 2026 are estimated to avoid 384,000 metric tons of carbon emissions annually.
• The company reports strong credit performance and low losses across its Portfolio.
• 98% of the Portfolio's receivables are rated Commercial 1 (low risk of not receiving invested capital).
• 1% of the Portfolio is rated Commercial 2 (moderate risk), and 1% is rated Commercial 3 (substantial doubt regarding recovery).

Risks and Challenges

• Recognized a $21.4 million economic loss on consolidated project assets in Q3 2026 due to higher-than-expected remediation costs; this loss is an estimate of a potential outcome from the asset sale process and is not realized.
• Assets related to the consolidated project company were moved to Category 3 (substantial doubt) in Q3 2026.
• GAAP net income includes a $70 million impairment loss recognized in Q2 2026 for two investments, though the projects continue to operate.
• 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 environments, and the timing of partnership transactions affecting HLBV earnings.

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.
• Management described financial results through the first three quarters of 2026 as "superb," citing a nearly $3 billion increase in Managed Assets, 23% growth in Adjusted Recurring Net Investment Income, and 15% growth in Adjusted EPS.
• CFO Chuck Melko noted the business model demonstrates benefits in mitigating the impacts of a higher interest rate environment, with new asset yields increasing to over 11% and net investment margins maintained.
• Management highlighted that profitability is increasingly resilient to changes in the interest rate environment due to growing management fees and higher yields.

Other Key Points

• The Board of Directors approved a quarterly cash dividend of $0.425 per share, payable on January 8, 2027, to stockholders of record as of December 29, 2026.
• 87% of debt outstanding was fixed-rate or hedged base rate debt as of September 30, 2026.
• Junior subordinated notes are included in the leverage ratio with 50% equity credit based on rating agency treatment.
• The company has not provided GAAP guidance due to the complexity of applying the hypothetical liquidation at book value (HLBV) method for forecasting.
• Adjusted Earnings exclude equity-based expenses, provisions for loss on receivables, amortization of intangibles, and non-cash tax charges, while including earnings attributable to non-controlling interest.
• Adjusted Recurring Net Investment Income includes a $35 million unrealized gain related to an investment in a solar asset servicing platform.
• The company closed $2.5 billion in balance sheet/CCH1 transactions YTD with new asset yields on Portfolio investments exceeding 11%.