HA Sustainable Infrastructure Capital (HASI) Q2 2024 earnings summary

Executive summary

• Achieved two major milestones: closed a $2B co-investment vehicle with KKR and secured a second investment-grade rating, affirming strong business momentum and scale.

• Q2 2024 Adjusted EPS was $0.63, up from $0.53 in Q2 2023; GAAP EPS was $0.23, up from $0.14 year-over-year.

• Managed assets reached $13.0B as of June 30, 2024, with portfolio at $6.2B, both up 27% year-over-year.

• Portfolio investments in H1 2024 included 10 GW of solar and wind capacity, generating 20 TWh of renewable energy annually and avoiding 8 million metric tons of CO2 emissions.

• Transitioned from REIT to C Corporation status effective January 1, 2024.

Financial highlights

• Q2 2024 total revenue was $94.5M, up 27% year-over-year; six-month revenue was $200.3M, up 40%.

• Adjusted net investment income for Q2 2024 was $63M, up from $54M in Q2 2023.

• Gain on sale, fees, and securitization income for H1 2024 totaled $41.8M, up 62% year-over-year.

• New asset yields for portfolio investments exceeded 10.5% in H1 2024.

• Interest expense increased to $60M in Q2 2024 due to higher debt balances and rates; cost of debt was 5.6%.

Outlook and guidance

• Affirmed guidance for 8%-10% adjusted EPS growth from 2024-2026, targeting a 2026 midpoint of $2.89 per share.

• Dividend payout ratio expected between 60%-70% of annual adjusted EPS through 2026.

• Pipeline of new equity, debt, and real estate opportunities exceeds $5.5B, well-diversified across asset classes.

• No plans to increase leverage despite improved access to lower-cost, longer-duration debt.

• No GAAP guidance provided due to complexity and variability of HLBV accounting for equity method investments.