NRGV

Greetings and welcome to Energy Vaults First Quarter 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. Question and answer will follow formal presentation session. If anyone will require operator assistance during the call, please press star zero. As a reminder, this conference id being recorded. It is now my pleasure to introduce your host, Mr. Michael Beer, Chief Financial Officer. Thank you, Mr. Beer. You may begin.

Hello, welcome to Energy Vault's first quarter 2026 financial results conference call. As a reminder, Energy Vault's earnings press release and presentation are available now on our investor website, and we will be referring to the presentation during this call. A replay of this call will be available later today on the investor relations portion of our website. This call is now being recorded. If you object in any way, please disconnect now. Please note that Energy Vault's earnings release and this call contain forward-looking statements that are subject to risk and uncertainties. These forward-looking statements are only estimates and may differ materially from the actual future events or results due to a variety of factors. Please refer to our most recent 10-K or 10-Q filing for a list of factors that cause our results to differ from those anticipated in any forward-looking statement.

We undertake no obligation to publicly update or revise any forward-looking statements except as required by law. In addition, please note that we will be presenting and discussing certain non-GAAP financial information. Please refer to the safe harbor disclaimer and non-GAAP financial measures presented in our earnings release for more details, including a reconciliation to comparable GAAP measures. Joining me on this call today is Robert Piconi, our Chairman and Chief Executive Officer. At this time, I'd like to hand the call over to Robert.

Michael, thank you. I'd like to welcome everybody. Good afternoon, evening, and morning. I want to call out up front as well, the investor presentation that hopefully all of you by standard course download. It is on the website and would be great if you are listening in here to download that. I will be referring to some of the charts in that deck, in particular pages four through nine. Very interestingly, hopefully if you've noticed, we are providing even more transparency with some of the data, in particular as we have made this transition now to an integrated storage IPP. We'll be providing some more details in and around backlog, for example, and even looking at our comparable companies in what we're considering as a new peer set as we've made this transition.

If you've seen the results by now, hopefully you'll agree that this is a very strong validation of our shift into an energy infrastructure platform provider, more than doubling our megawatt capacity under management from last quarter to over 1 GW. The new project acquisitions that make that up as designed will ensure long-term, high margin, and recurring revenue streams, as reflected in the strong contract backlog growth that, as you see, is over $1.3 billion, made up primarily of our own and operate projects now, projects that are pre-funded through our existing Asset Vault platform. We also see strong near-term demand growth for our AI compute infrastructure solutions, integrating storage, generation, and under our unified software control.

That strong historical execution capability, and I know I've talked about that a few times here, in particular in the last year, as we've delivered revenue, and in particular in Q4, delivering over $150 million, we have earned this right with our customers. That's enabling interim revenue upside potential while our larger scale own and operate projects are being constructed and coming online in the coming 12 months, 24 months, and 36 months. With the move squarely now into the IPP and digital infrastructure company peer groups, as reflected by our current contracted backlog, and you can refer to page nine, as we look at this, we do believe a re-rating here is gonna help the valuation and the related upside to our current trading. Over the past 12 months, we have transitioned from a project-based provider into a fully integrated power and AI infrastructure platform.

As we can see by the results in the execution and scaling of our own and operate model, the quarter demonstrates that acceleration. This is no longer a forward-looking transition. It is now visible across our backlog, our asset base, and our financial performance. In particular, it will, as it did last year as we get into the latter half of the year, as revenue again scales. We're providing an integrated energy and power infrastructure platform that's bringing together, as a reminder, not only energy storage, but also now generation components and, as always, our intelligent software platform that from design, from the inception, was designed to handle any generation tech, whether that be gas or renewable, as well as any and all storage technologies to solve one of the most pressing challenges in the global economy today, and that's delivering reliable power quickly and at scale.

We integrate these capabilities and capital structures to build, own, and operate, and in particular, as a vertically integrated IPP. What that means is we can be faster, we can be more cost-effective, as our growth margins are showing and demonstrating at about 2x the market, and that comes from less friction, and less friction in terms of cost and time, and at the end delivers higher quality. We're achieving over 99% uptime across every one of our storage projects that are operating today. We do this now and are solving what is the primary constraint across global markets, and that is access to power. The most important takeaway for us this quarter is we're accelerating that execution now of our own and operate model. You can see that in three areas, as well as many other details that we're gonna be providing on the call.

Our portfolio now exceeds 1 GW of assets under control that's contracted, under construction or already operating. Our backlog has grown to over $1.35 billion, over 80% of that, as you'll see, is tied to owned assets now, which is a shift if we go back just a short four to five quarters. We now have visibility to over $180 million in our recurring EBITDA run rate, which is ahead of our plan, also reflecting the inclusion now of powered land and powered shell opportunities where we are owning assets and providing power. This has obviously reflected a shift from a more episodic project revenue to predictable long-term infrastructure cash flows.

Importantly, we are executing ahead of that plan, as I've just mentioned, and a lot of that's due to some of the dynamics we're seeing now in the AI infrastructure compute space. If you look at page four, which we provided, which looks back from our Q4 2024 actual, looks at our revenue and our backlog and shows what that looked like at the end of 2025. Growing that backlog from about $400 million to $1.3 billion today. As well, it looks at our gross margin, which has improved from 13.5%, just six quarters ago, to almost 24% at the end of 2025, and projecting close to 25% for this year.

I would say that if you look at the backward-looking view, we have executed now the strategy and are now, if you look at our backlog, at 80% own and operate, we're there. At the same time, as highlighted therefore in the press release, we've got some, and if you turn to slide five, we delivered broad-based triple-digit growth across most all key metrics. Revenue up over 150% year-over-year. Backlog more than doubled, 108%. Adjusted gross profit up 25%. Cash up 148%, reaching $117 million, and our megawatts, very importantly, under our control, up almost 5x year-over-year and already more than doubled to 140% sequentially.

Every core metric, all of these capacity backlog revenue and our liquidity is fulfilling what we've outlined and what we demonstrated with our strategic shift from two years ago. If you look at slide six, we've added this look at our backlog to take a look at where we've transitioned in just the last six quarters. What you see is a shift from what has historically been our energy storage EPC revenue, looking at our current backlog at $1.35 billion, towards primarily the long-term own and operate revenue streams. Importantly, the gross margins associated with that backlogs will be fundamentally shifting as we build these projects and bring them online over the next 12 months, 24 months, and 36 months. Those margins shifting from the 20%-25% range up to the 60%-80% range for IPP level margins.

A lot of the growth that we're seeing, both in terms of the initial megawatts we've been adding, but as well as what we will be adding more in the future, is related to the AI data center space as well. That's powering a lot of the infrastructure investments, in particular in the U.S. Power availability is now the gating factor for expansion. We've added 100 MW of powered land and powered shell just this quarter. That alone is gonna be expected to generate $65 million in recurring EBITDA in the next 12 months-18 months as that comes online. Beyond the primary power capacity, we're addressing resilience needs through energy storage systems that we deliver and operate. If you go to page seven, just a reminder of that unit economics growth that I just described from that backlog.

You can see how that works relative to our core standalone storage there at the bottom of the metric, and then moving up to our powered land and powered shell, as well as the geographic expansion. The addition of the powered land and powered shell for AI is what's helping drive our acceleration. Very importantly, I think as you move to page eight as well, you can see that we're expanding where we're gonna be going, not only as we look at this quarter, you see expanded from 440 MW to over 1 GW, as I mentioned previously.

Looking out over the years, we're also increasing where we're going and what we're gonna have under management by 2030, reaching almost 4 GW as we look at today and what we see in our funnels and our development pipeline and what we're executing that's underneath our control already. You can see the EBITDA numbers there in those outer years get very large, and a lot of that work to achieve that is underway now as we're building and constructing these systems that are gonna come online over the next two to three years. I want to finish here, if you look at slide nine, it highlights how the market is beginning to reframe Energy Vault, not as a traditional storage company, but as a broader power infrastructure platform.

This evolution is critical as we expand into owning and operating integrated energy assets, particularly in support of the AI data center and digital infrastructure. I mentioned this before, but not all megawatts are valued the same, and hence our move into the AI digital infrastructure space is accelerating what we're gonna be delivering in our initial targets. We're moving into a category that commands structurally higher valuation multiples. The infrastructure platforms with predictable long duration cash flows and low revenue volatility are valued differently from project-based businesses, and this shift is increasingly reflected in how investors benchmark this sector. Importantly, this repositioning supports a meaningful re-rating opportunity. As we execute and continue to execute against our megawatt pipeline and bring assets under ownership control, we unlock the full value of the long-term contracted EBITDA streams. Successful execution of megawatts under control is the bridge to this value realization.

I mention again that strong historical execution capabilities have earned us this right with our existing customers who want to work with us on new projects, but also enabling this interim revenue upside while our larger scale projects are being constructed and coming online. With this transition, we're firmly into the IPP and digital infrastructure peer groups, reflected in our contracted backlog now at about 80%. We believe this evolution is going to support the re-rating and some meaningful upside to our current trading levels. If you look at that chart, you'll see how we've historically looked at our comp companies in there and looked at the performance, both the year to date this year, as well as the trailing 12 months.

You can see we've had a very, very strong appreciation of the stock price, if you go back one year ago, but also this year now into our current trading. I think most importantly, if you look at some of the new trading comps in the mid part of the page there and look at the valuation multiples there on the right, you'll see the opportunity that, of course, we've seen and why we made the strategic shift back two years ago. To close, before I turn it over to Michael, who's going to get into some of the details of our results for the quarter. We're accelerating the execution of our own and operate strategy. I think this big increase in the uptick in the megawatts under our management is a strong reflection of that.

We're also scaling a globally diversified infrastructure platform, now over 1 GW. I think that's important because things regionally can change. We saw that with the tariff environment, just one year ago. There was a lot of uncertainty. Having the exposure to markets like Australia, for example, and our recent acquisition of a large portfolio, 850 MW in Japan, with 350 MW of near-term projects there, reflect the fact that we are expanding in the most attractive markets and will give us that global diversity despite the fact that we see tremendous and large opportunity, and probably the largest opportunity right here at home in the U.S. Energy Vault today isn't just participating in this transition, we are building the infrastructure backbone that enables it across the energy and power side, AI, and the industrial markets.

I also want to mention and thank the Energy Vault team for their dedication, their passion, their commitment to executing our strategy here every day. I think the results here are a reflection of this, our reiteration of where we're going to be this year and the guidance we just set six weeks ago. We feel very, very good about executing and a lot of upside we believe that exists within that guidance range. With that, I'll turn it over to Michael Beer.

Thanks, Rob. As you can see in the financial summary on slide 18, we delivered Q1 revenue of $21.9 million, representing a 156% increase year-over-year, driven by higher energy storage project deliveries and initial contributions from assets within our Asset Vault portfolio. Adjusted gross profit for the quarter was $6.1 million, up 25% year-over-year, with an adjusted gross margin of 27.9%. Adjusted gross profit reflects the removal of Asset Vault operating project-related depreciation and amortization as those projects commenced operations in mid-2025. The prior year gross margin of 57.1% was highly skewed by IP-related revenue.

Adjusted EBITDA was $-13.6 million in the period, compared to $-11.3 million in the prior year period, reflecting continued investments in our own and operate strategy, including development expense and organizational scaling to support long-term growth. Excluding one-time impacts from the extinguishment of debt and stock-based comp, Q1 2026 adjusted net income of $-20 million compared to $-11.8 million in the prior year period, due to higher D&A and personnel from the new O&O Asset Vault projects and associated project-related financing expense and interest. From a cash position and financing perspective, we ended the quarter with $117.1 million in total cash and cash equivalents, reflecting continued investment in our Asset Vault portfolio alongside strengthening financing activities.

As Rob mentioned, during the quarter, we significantly enhanced our balance sheet through the successful completion of a $150 million convertible senior notes offering, which was upsized from $125 million. A portion of the proceeds was used to repay $45 million in higher cost debt while also implementing a capped call structure within an implied conversion price of $8.12 per share. In addition, we began monetizing investment tax credits, completing approximately $12 million of net ITC transfers with approximately $40 million in total ITC proceeds expected across all projects placed in service thus far. These actions collectively strengthen our liquidity position and provide the financing flexibility to accelerate execution of our global asset ownership strategy.

At the project level, management is in the market for the SOSA and Stoney Creek project financings, which we expect to complete this quarter and in the second half of 2026, respectively. We're also evaluating a number of other financing opportunities, including those in support of our ramp in Japan and surrounding the powered land space. Turning to our latest backlog and development pipeline on slide 17. We exited the quarter with a record backlog of $1.35 billion, representing 108% year-over-year growth, with over 80% associated with our own and operate portfolio across the U.S. and Australia. This backlog provides strong multiyear revenue visibility and reflects continued traction in converting our developed pipeline into contracted projects. From a commercial activity standpoint, we made meaningful progress expanding our global footprint and asset base.

One, we advanced our U.S. portfolio with the acquisition of the 175 MW/350 MWh McMurtre BESS project in Texas. Two, we announced entry into the Japan market, including the 850 MW development portfolio with 350 MW in advanced stage projects expected to close this quarter. Three, we have added a number of smaller projects in Switzerland and made headway with the opportunity in the Balkans. Four, we continue scaling our AI power infrastructure platform, including progress on the 75 MW powered land opportunity, where a number of agreements have now been secured. Across our platform, total megawatts under control in construction or in operation now exceed 1 GW, supporting a growing base of long-term recurring revenue opportunities.

From a developed pipeline perspective, which we now view on a megawatt basis versus megawatt hour, we are now actively progressing opportunities valued at $3.5 billion, associated with over 3.5 GW. Taken together, our advanced developed pipeline and contracted backlog provide strong visibility into the next phase of growth for the company. As we continue executing our strategy, we are seeing clear validation of our transition towards a vertically integrated build, own and operate model. Our global asset portfolio now exceeds 1 GW and is expected to generate over $180 million in annual recurring EBITDA run rate ahead of prior expectations. This positions us to deliver increasing levels of predictable, high quality earnings as assets move into operation.

Turning to our business outlook for 2026, we are reaffirming our full year 2026 guidance, including revenue in the range of $225 million-$300 million, with approximately $75 million-$100 million in internal Asset Vault project builds. Gross margin of 15%-25% and year-end cash in the range of $150 million-$200 million. This outlook reflects continued execution across our backlog, scaling contributions from owned and operated assets and disciplined capital deployment. With that, I'll hand it back over to you, Rob.

Great, Michael. Thank you. I think with that, we'll turn over to the operator for any questions.

The first question comes from the line of Justin Clare with Roth Capital Partners, please go ahead.

Hi. Thanks for taking our question and, congrats on the growth in the backlog here.

Hey, thanks, Justin.

Wanted to just start out on the AI infrastructure here and the 100 MW of powered shell and powered land that you plan to complete over the next 12-18 months. Wondering if you can just share more on the status of those projects. For example, you know, how much of the 100 MW is contracted and has offtake versus how much is in negotiation? What's the interconnection status? Where are you in terms of permitting those projects as well?

Okay, thanks. We have announced 100 MW there in powered land and powered shell, as you know. I think at our last earnings, we mentioned publicly the Southwest utility for the 75 MW of powered land, that also is under a load study for application for 925 additional megawatts for a total of 1 GW. That's in the phase right now of the first 75 MW is already in construction and committed, and it's gonna be coming online in January. Okay? As far as the powered land goes, from the powered shell perspective, we have our already announced agreement with Crusoe that's under now that development, and we have the, all the sites and all the load ready for that, and that's gonna be constructed.

As we said before, that'll start to come online in Q4 this year. That's where we are as far as the powered land and the powered shell, I think most of those, as we look at the opportunities that we're developing, is where you're gonna expect to see some significant growth. If you looked at the, on, I think it's page eight of the deck, you'll see, in fact, that mix shift. You'll see the mix of powered land and powered shell versus our standalone storage. You see it increasing significantly there between where we are today in March 2026 up through 2030. You can see that that's gonna move from roughly about 10% of that megawatt funnel to a little over half of it over the next few years.

I would expect that you'll be seeing, and you can expect to be seeing more announcements in that space.

Great. Okay, appreciate the detail there. On the $180 million of recurring EBITDA that is anticipated when you build out the backlog here, wondering what the timing of that is and how that ramps over the next, you know, two to three years or so. Wondering on the $180 million, if you could also break down how much of that may be related to BESS projects versus how much is powered land and powered shell.

Sure, happy to comment. We previously gave guidance in November of last year around the overall size of the Asset Vault portfolio. We had initially talked about that being sort of a target of $150 million of recurring EBITDA. We've since announced our entry into Japan. We believe Japan is a 350 MW sort of attractive late-stage portfolio. That would be in addition to that initial guidance. Now we've given more fidelity around what we believe the contribution would be from powered land and powered shell on the order of about $65 million in recurring EBITDA. If you were to take the $150 million, remove the $65 million from powered land and powered shell, obviously the increase beyond that is associated with the Japan portfolio.

This is sort of envisioned to be in that sort of, let's call it, circa 2028, early 2029 type timeframe.

Yeah.

Yeah, Justin, I'd also.

Okay. Very helpful.

Yep. Just to add to that too, there's some good charts we've included in the deck that reference that, the one on the unit economics. The reason we're seeing this acceleration is, as we met almost a year ago, we looked at a lot of the storage, the standalone storage IPP. As we've evolved the last 12 months and looked at the AI compute infrastructure space, those deals and those megawatts that we're contracting and owning are delivering anywhere from 5x to 10x the EBITDA contribution per megawatt per year. That's why we're providing some of the breakdown around what that mix shift of these megawatts is gonna look like.

As we add more of those, you obviously can expect, you know, continual acceleration in terms of hitting and just growing that annualized recurring EBITDA number with it. If you look at the chart on page eight, you'll see where we expect that to go as we've increased that just from the last quarter.

Okay. Got it. Thank you. I'll pass it on.

Thank you. Next question comes from the line of Derek Soderberg with Cantor Fitzgerald, please go ahead.

Hey, guys. Thanks for taking the questions. First one on gross margins here. Guidance looks like 15%-25% for the year. Just kind of thinking about that range, what are some of the variables, maybe it's battery cell pricing, maybe some project mix, what sort of variables are gonna determine where you guys sort of land in that range? Maybe as of today, where do you think you're sort of tracking towards that range? Maybe the lower end, the higher end. Maybe talk about that. Thanks.

You can see quarter-to-quarter there can be some different, you know, mix components. Even, you know, a year ago we had some significant IP-related contributions, so we had a 57% gross margin. This quarter, on an adjusted basis it's about 28%. On a GAAP basis it's about 22%. You know, obviously we're tracking to be better than the midpoint of guidance. You will have a very back-end loaded sort of revenue year associated with project deliveries, right? We still are in the EPC business, the fourth quarter will be heavily influenced with some of those deliveries. Those deliveries can generally, you know, obviously balance out the overall shape of the year and the total gross margin profile. Still feel very confident around the overall range.

Obviously, we endeavor to do better than the midpoint, just as we had done last year.

Derek, the other thing just to add to that is our new gross margins now and revenue that's going to include the storage IPP is also just from a GAAP perspective, is going to include the non-cash portions of depreciation. That's why we're referring, and this will make the comparisons good from last year to this year, our adjusted gross margin, which is really getting at that cash gross margin only without the IPP revenue, so you can really compare apples to apples as you look at the EPC revenue. If you do it that way, for example, we're closer to, I think it's 27.8%, 27.9% this quarter. We intend to focus on execution, on managing our supply chain.

As we've done the last quarter, we obviously continue to be setting ranges that we know and feel comfortable we can hit, and we'll push execution to remain on that upside.

Got it. That's helpful. As my follow-up sort of related to the first set of questions. The first 75 MW on the powered land piece coming online in January of 2027 and then the 25 MW coming online in Q4 of this year, I was wondering if you could sort of maybe provide some detail on how that revenue's gonna scale, how that EBITDA is gonna scale, anything around that. Also just on that opportunity to potentially go up to 1 GW on, you know, that sort of higher EBITDA, you know, per megawatt opportunity. Can you talk about what sort of milestones you need to hit before that larger opportunity starts to materialize? Thanks.

Sure. I'll hit both of those, Michael can chime in as well. To the first question on, you know, both the 75 MW and the 25 MW. The 75 MW is committed to be online in January, as I mentioned. That full 75 MW will be online. Essentially, the switch is getting put in place. There's some transmission that's being built out. That is already underway. We already have made payments toward that to happen and committed. What you would see on that is an offtake agreement of that 75 MW. Once that turns on in January, you can expect that to be fully monetized, meaning we will be in a contract and monetizing that. We should get almost a full year of EBITDA there, of that 75 MW.

It's, you know, estimated at somewhere in and around $35 million. That's the 75 MW. On the 25 MW, just to be clear, we're gonna be starting those deliveries, meaning we're gonna start to receive and have those systems come on within Q4. Not all 25 MW will be in Q4, will, as we've said, will come in the next 12 months to 18 months. Meaning we'll be beginning to receive and activate the powered shells and be installing those in the forward quarters from there. That's helpful. The good news about that is we expect in the next 12 months to 18 months to have that roughly $65 million, you know, up and going on an annualized run rate basis.

The second part of your question on the 75 MW going to a gigawatt. There is a study that's already underway that we're engaged with the Southwest Utility. That study is looking at the addition of 920 MW to that 75 MW, so that would be up to a full gigawatt. Those are large numbers. You know, you can do the math on just what that 75 MW is, as I said, and scale that. We do expect somewhere in and around half a million or so per MEGAWATT on that. That's a study that's going to happen, that's happening now. There will be some decisions, I think made then this year.

We expect in the next three months to six months on also some sizing of what the capacity upgrade will be. That's essentially gonna be all the transmission and high voltage equipment that will be required to bring that 925 MW here to market. That will be coming in place over the next, you know, 24 months, 36 months, 48 months. We are expecting, just to be clear on that, we are expecting to look at doing an interim-step with some other generation equipment that we would couple with our storage, for example, to try to bring online something on an interim basis of another 225 MW to potentially add to that 75 MW. This is within this core powered land segment.

That would be an interim step to get a solution in place. Obviously, as we've said before, with a hyper-scaler, that's in a very attractive location that we'll be sharing more of as we do some formal announcements, namely utility, et cetera, and other things this year. From a timeline perspective, just to summarize, the 75 MW in January. Following that, within the next 18 months-24 months, we're looking at another 225 MW to bring online on an interim basis until that other 925 MW of grid power would come online in the next 36 months plus.

Appreciate the detail on that. Thanks, guys. Yeah.

Thank you, Derek.

Thank you. Next question comes from the line of Brian Lee with Goldman Sachs, please go ahead.

Hey, guys. This is Tyler Besson for Brian. Thanks for taking our questions. Just first wanted to touch on the margins in terms of the backlog. What is the timeline to reach these 60%-80% IPP margins as you execute on the backlog? Just to confirm, this would be on an adjusted basis.

Yeah. This is overtime, there's obviously two distinct margin profiles for each of the different businesses. You know, the 20%-25% is akin to the legacy, let's call it EPC-related business. The transition to the IPP business model, those 60%-80% IPP margins, you can see that all laid out on, I believe it's slide six. Obviously, there's going to be a mix effect that will take place over time, right? As these projects come online. We're not exiting the EPC business. We'll continue to do that, not only for third-party customers, but we self-perform these projects for ourselves, and there's actually a positive working capital function that serves. We'll continue to be in that business. It'll be a blending over time. It won't just be a flip of a switch.

Helpful. Can you provide an update on just, you know, your revenue trajectory for the balance of the year? Noticed accounts receivable stepped down a quarter. Could you see 2Q revenues decreasing quarter-over-quarter? You know, how are you thinking about the balance of the year from a revenue standpoint?

Yeah. We generally don't give sort of quarterly guidance in that respect, but as mentioned, it will be a back-end loaded year. I would use a profile akin to what you had seen last year.

As you saw there, just to add to that, we have very strong year-over-year compares just given we are projecting over 30% growth at the midpoint here. You know, if you look at the trajectory, as Michael said, and look at that framework, we are expecting something similar there and generally, I think if you look at the year-over-year compares, we're still gonna be pretty favorable, I think as we ramp and scale.

Understood. Just one more from me. Can you just provide some more details on the progress on the developed pipeline and backlog? Looks like developed pipeline increased to 3.2 GW from 1.8 GW last quarter, but the value went up to $3.5 billion from $3 billion. On the backlog, it looks like it remained flat at 3 GWh, but the value went up slightly. Can you just discuss some of the moving pieces here?

Yeah. There's always a bunch of ins and outs, FX. There's a host of things that can sort of move these things at the margin. I think within developed pipeline, interestingly, we're starting to see some real benefits of this integrated model and the fact that sort of one hand washes the other. While we are in both the EPC business and the IPP business, we're now starting to see some opportunities emerge that sort of split the difference or are emerging from both camps. So the fact that we do have a team focused on both sides of the business is being, you know, very additive in that respect. So we're seeing new projects being added all the time.

We also cull our developed pipeline to make sure that if things are stale or if projects have moved on or, you know, for whatever reason. We try to keep this very current and not make sure it's stale. I think this does represent the current slate of investments that we have here in the U.S. across multiple, sort of industry sub-segments, and geographically, we're seeing some other things emerge internationally.

The other perspective I'd share with you here, and this is an important one, it's something that we looked at as we made the decision two years ago to focus on owning and operating. That means we're acquiring megawatts. We're gonna be building them, the revenue doesn't come during that build, right? It doesn't come until we actually go COD or we go online with the project. You would have normally expected, if we're really making that shift, you might have expected our revenue, our rev rec, actually going down over a period, right? 12 months-24 months as you make the transition.

What we challenged the team with here and what we targeted to do was, despite the shift we've made from owning and operating assets where we are not recognizing revenue, even though the activity is much more than even our projected revenue is showing because we have activity that we don't recognize. We are building projects. Energy Vault is building projects for Asset Vault that is not showing up in recognized revenue. We have more activity than we've ever had. The challenge was: how do we keep revenue growth, meaning recognized revenue, going until these new projects come online?

What I feel very good about with the team and the execution, is that we were able to still have a year, this year in 2026, with strong double-digit revenue growth, despite the fact that as you see in the megawatts that are growing to now over 1 GW that we have under our control and management and building out, that we are not recognizing revenue on that. Despite that, we're still seeing that revenue growth.

That's a lot of that's driven, I think, in the U.S. market in particular with what's happening with the AI infrastructure and, in particular, these power packages that are getting put together where we're looking at and we are doing and integrating our energy storage with generation, with gas generation, for example, but also with UPS backups that are a part of those and coupled with that gas generation. Then we're integrating that solution across a single pane of glass, meaning a single software platform to bring that all together for a customer. Those are solutions that we actually do sell and turn over. That is allows us to do the revenue recognition in parallel.

This, the whole AI compute infrastructure and the, you know, the billions and, you know, arguably it takes trillions over time that's going to be spent for that is enabling us to maintain this revenue growth with that focus on these solutions. A lot of that has come from customers that know us, that trust us, where we've executed for. They have their systems up and running, you know, at 99%+ availability. We feel not only good about that in the revenue projections we've done this year for growth, but we do see a lot of upside to the current revenue projections for that growth as well.

All right. Thank you very much. I'll turn it over.

Thank you. Next question comes from the line of Siddharth Rengachari with Fundamental Research Corp, please go ahead.

Hi. Congratulations on the strong results. How are Calistoga and Cross Trails operations performing, given it's been almost 12 months since both started operating? Are revenue and margins there in line with your expectations?

Yeah. The Cross Trails project continues to perform well. There hasn't been a change and, you know, we're expecting, you know, on the order of, circa $10 million in EBITDA on a full year basis.

Yeah. I'd add to that-

Across CRC and then Cross Trails. Yeah.

I'd add to that too, as we all know, I think in the IPP market, ERCOT obviously is undergoing and has been really the last 12 months, 18 months, really almost the last two years, you know, weakness at least on a cyclical basis versus the prior years. I think we're seeing that. You know, the good news about our system there in ERCOT is it's been running at a 99% availability despite that. Obviously we'll take advantage of opportunities when they come. It is that sort of softness in the ERCOT market has made it a buyer's market when we're looking at acquiring megawatts. Therein lies some opportunity.

We've been very, very careful with selecting the best points of interconnect, and doing a lot of diligence there to have the, you know, the points of interconnect, as is the case with McMurtre that we announced, that's just north of Dallas there in Texas. At points where we do believe we can leverage good economics.

Great. Thank you for that. With the ownership structure of the Japanese initiative, will that be similar to your other assets, given you're partnering with the local developer there?

Yes. We were expecting, and I think we mentioned this in the when we made the announcement. The Japanese market is fascinating because if you go back and look at where ERCOT was four to five years ago, we see the Japanese market just evolving now in that same type of economic environment and opportunity therefore to initially deploy and take advantage of a lot of the frequency and some of the other ancillary services and even the arbitrage opportunity there in Japan. In terms of structurally, that initial team that we're acquiring, that it was from an existing large company there. That team is gonna be the one that's gonna be continuing developing those near-term projects.

Of the 850 MW that are within that portfolio, there's 350 MW of near-term projects that, as we said in our announcement, we expect this quarter to close on that 350 MW and then get those constructed and get those up and operating. I think from a, from an overall structure, in terms of how we look at debt and equity and financing these, I would say it's, it would be unlike as we're looking at projects in the U.S. and Australia.

I think one of the differences there, Michael can comment on this too, is you have a very favorable interest rate environment, I think in Japan, that is gonna be helpful relative to the financing and their very known project financing models as well.

Yeah. It's an existing team that we're technically acquiring with a very robust portfolio. You know, as we mentioned in the some of the prepared remarks, we are gonna be going to market from a financing perspective in support of host of those projects. You know, the fact of the matter is we entered the Australia market just a few short years ago and look at the amount of traction that we've been able to sort of generate there. You know, we're looking to replicate that in the Japanese market.

Any comments on the offtake pricing you can get there? Is the ROI, would you say it's comparable to the U.S. or higher?

I don't believe we've given real specifics there. It is an attractive market, but obviously we feel as if we're early to that market and, you know, obviously we're putting our money where our mouth is. But we haven't given any of those specifics.

We're expecting.

Thank you so much.

I think. Yeah. I was just gonna add I wouldn't think that it's gonna be far off from what our expectations are on achieving IRRs, sort of low double-digit type of IRRs, as we get started there and an opportunity for optimization on that. Hence our investment there. It is what we believe that is today and will continue to be in the coming years an attractive market.

Appreciate the color. Thank you.

Thank you. Next question comes from the line of Noel Parks with Tuohy Brothers, please go ahead.

Hi, good afternoon? You know, one thing you were mentioning gas generation a moment ago, and sort of in the landscape of potential business out there for your pipeline, I guess I'm wondering maybe what's the main pain point for potential customers. I guess I'm thinking about whether there's any difference between those where they're looking, say, for new AI-related generation, where gas generation is probably gonna be at the core of it, versus situations more where it's, you know, a case of playing catch up with wind and solar for grid integration. I guess is one of those a much bigger driver than the other, would you say?

Yeah. I'll Noel, it's a good question. The reason you're hearing more and more about gas is just two things. Obviously, the power demand largely outstrips the supply or the ability to deliver it. That's one. Any and all solutions, you know, solar, wind, combined with other types of generation and leveraging. We have, you know, obviously abundant natural gas in the U.S. I think gas is gonna play an important component in particular over the next three years to five years plus. In addition, remember what's driving this are data centers, and the requirements are at five-nines reliability. Which is, you know, if you're thinking about that and thinking what that requires.

You know, it's gonna be different regionally, but look at if you go back to an event, for example, in Texas, we all remember in the cold and the frost and the freeze, and that shut down things for a matter of days. With the requirements and SLAs at five-nines reliability in AI compute infrastructure, you know, these are things that therefore require not only redundancy, but in some case there's multiple redundancies. You can think about having a grid connection. Okay, everybody likes that. You can add energy storage to that, which will be good, you know, for if there's an outage, you know, you can name it for some hours. Let's say, and even up to the day.

If you get into a multi-day outage, that's where looking at having some type of reciprocating engines or gas, diesel gen, et cetera. You can actually have a solution that when you put together, for example, grid power, plus energy storage, plus some gas power backup, you've got something where you can deliver on five-nines. It's, you know Hence, that's the numbers you're seeing, and that was that tremendous amount of CapEx in the data center build-outs. A lot of that's, you know, a lot of that CapEx is also essentially guaranteeing that power availability and delivery. Does that make sense?

Yes, absolutely. You did touch a bit on it already, sort of the comparison of Japan to where ERCOT was a few years ago. I remember when you announced the Japan acquisition, you sort of stressed the importance of grid stability and load balancing in Japan, that they're at that stage now. I just wonder if you could maybe just dig into that a little bit deeper and whether there are similar, you know, analogous regions that might be needing to deal with this sooner rather than later.

Yeah, I'd say that the perspectives we've shared from the announcement and what you've just articulated is what we see. As I mentioned, you know, we're gonna see some of the fast frequency response, that load balancing, and I think opportunities to capture different types of pricings at different times of day. I think generally, that dynamic is gonna be positive, we believe, for the market, and I think others that have entered there recently are seeing the same thing. As far as other markets that have those same dynamics, there's an important aspect to look at this, and I think Asia PAC's a great example, where there are other markets that may have those same types of, you know, environmental factors.

The other thing we look at is scale and priority. In terms of the markets we choose and not spreading ourselves too thin. There would be, you know, there are, I think, other markets that have those same characteristics and even in some newer European growth markets, for example, that we're seeing. We're very focused right now, I think, on some of the largest opportunities and focusing our capital investment, our human resource investment in the areas where we see the biggest upside. A lot of that, by the way, is right here at home in the U.S.

Right. Great. If I could just sort of run one more by you. I was thinking about the process of project financing over the last two years. You've seen this real transition from being able to get it, you know, much earlier in a project's life cycle. I'm just wondering, as you're going through your process of, you know, negotiating and arranging it for your upcoming projects. I'm just wondering, is there considerably less of an education burden that you have to address in terms of, you know, your counterparties and their due diligence? Is it essentially still just everyone needs to go through a pretty similar tire-kicking process?

Yeah. The market is evolving so quickly. You know, whereas nobody would have even looked at sort of merchant years ago, you know, now that's being sort of incorporated into models, and people are getting very creative in how they structure, you know, bridges or construction financing sort of in and around sort of some of the IPCs. You know, the market is evolving very, very quickly. Certainly here in the U.S., we're also seeing that bleed over into some of the other markets where we're constructing assets such as Australia and what I suspect is likely Japan. We need to go through that process.

The fact of the matter is we've now done this a few times and we now know what we're looking for as we're evaluating project attractiveness and what can possibly go wrong. Just mitigating risk where possible, bringing partners into the fold earlier in the conversation, you know, and trying to build a good, let's call it feedback loop of existing partners so that we can sort of rinse and repeat across the entire portfolio and just remove friction where possible.

Terrific. Good to hear. Thanks.

Thank you. Ladies and gentlemen, we have reached the end of question and answer session. I would now like to turn the floor over to Robert Piconi for closing comments.

Great, Alfred. Thank you. Just in closing here, and hopefully as you've gone through the numbers and go through the charts, I again encourage everyone to download those. We are sharing more and more detail and some transparency on things that tie to the future profitability and growth of this business. I think a lot of the key metrics we share, the growth in the megawatts under management that have more than doubled since just going back, you know, since we last spoke, which wasn't that long ago, 6 weeks, 7 weeks ago. Getting over that gigawatt, you know, that first gigawatt that's within our control now to go execute, those are not small markers.

I think on top of that, you look at the backlog, which is a different cut, looking at what we've actually contracted. Just to highlight, you know, 80% now of that backlog that stands today at the $1.3 billion is contracted at much, much higher IPP type of gross margins.

Again, that's something that should give investors a lot of comfort relative to the future profitability as we bring those online. Also just operationally, and this, I think is as investors look at teams and companies to invest in, the execution that we've had, if you look at just the last 6 months, 8 months, last year, one of the most challenging years starting off with the tariffs and uncertainty really through the first half of the year into the mid-part of the year. Yet the team at Energy Vault executed and delivered. The only energy storage company to deliver on their, in their original guidance that we set for the year, and in a strong way in the quarter, delivering a positive adjusted EBITDA even in that last quarter as we delivered.

We're expecting to do the same this year, and, you know, with strong execution, you know, expect to have some continual positive and upside surprises in what we're doing just with the nature of our market penetration, and in particular, what's happening here in the U.S. market. We have a lot underway. As I mentioned in answer to one of the questions here on other regions, other markets, we are staying very, very focused on these three core segments and just the very attractive core markets. That's, you know, the Asia Pac, as far as Australia and Japan go. That's in Europe we're developing, I think some of the interesting own-and-operate opportunities there, as we've mentioned before.

In particular, right here at home in the U.S., and it's required us to have a very nimble and diverse and dynamic supply chain, given the changes in the rules and FEOC, and a lot of the focus on domestic solutions. That is something our supply chain has been able to be very nimble and deliver, as we demonstrated in Q4. Really, as far as where we are at this point with what we have both under contract now and under development that's within our control, as well as those opportunities, as referenced by one of the questions, our develop pipeline has more than doubled just from the last time we spoke, which was six weeks ago. These are really important markers to look at.

We've had a very good hit rate in terms of and conversion rate, I'll call it, in terms of taking that developed pipeline and converting that, in particular, those megawatts into things that are within our control, meaning acquiring attractive points of interconnect. These are really the markers that I think investors should be looking at relative to the future with a very proven team that's been able to execute and deliver here for customers at extremely high availability, which is at the end of the day now, how we're really being judged by our customers, is being able to achieve that 99%+ availability that they, you know, not only require contractually, but really demand. It is a market requirement now as we look at power solutions.

Finally, just to, again, as I always do, none of this happens by itself or under standard processes and procedures. We have a very nimble and agile and hardworking and do-whatever-it-takes team at Energy Vault. A lot of hours worked to deliver what we deliver day in and day out. I wanna thank all the employees that make these results happen, that are passionate about delivering for customers, are passionate about maintaining our focus on sustainability. As, you know, we announced also this past quarter, two years in a row now being ranked the number one energy storage company, number one energy company in our industry from a sustainability score judged by S&P Global.

True to our mission, and the vision we wanna achieve as a company, I could not be prouder that the team here at Energy Vault and where we are today. Personally, I have never felt better about where this company is gonna go, what we're gonna be able to achieve. We do not limit our thinking, in terms of where we go, how big the hill is to climb, and what it takes to get there. As all of you know listening in on this call, there's no shortage of capital to put behind strong management teams in a very attractive space, with a proven track record of delivery. I think we hit on all those fronts. With that, operator, I'm completed the call here. I'll turn it back to you.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Please note this conference is being recorded. I will now turn the conference over to your host, Michael Beer, Chief Financial Officer. Please go ahead, sir.

Thank you. Hello, and welcome to Energy Vault's fourth quarter and full year 2025 financial results conference call. As a reminder, Energy Vault's earnings press release and presentation are available now on our investor website, and we'll be referring to the presentation during this call. A replay of this call will be available later today on the investor relations portion of our website. This call is now being recorded. If you object in any way, please disconnect now. Please note that Energy Vault's earnings release and this call contain forward-looking statements that are subject to risks and uncertainties. These forward-looking statements are only estimates and may differ materially from actual future events or results due to a variety of factors.

Please refer to our most recent 10-K or 10-Q filing for a list of those factors that cause our results to differ from those anticipated in any forward-looking statement. We undertake no obligation to publicly update or revise any forward-looking statements except as required by law. In addition, please note that we will be presenting and discussing certain non-GAAP information. Please refer to the Safe Harbor Disclaimer and non-GAAP financial measures presented in our earnings release for more details, including a reconciliation to comparable GAAP measures. Joining me on the call today is Robert Piconi, our Chairman and Chief Executive Officer. At this time, I'd like to hand the call over to Robert.

Thank you, Michael, and thank you to everybody for joining the call today. We're very excited to again be talking to you about our results from not only last quarter, but for the full year 2025. I'd also like to call out here upfront that we've included a slightly more robust investor presentation for this earnings call. I encourage everyone on the call, if you can, to go ahead and download that and view that. We will be referring to pages of the presentation during these remarks for the earnings. We will refer to those. Please, if you can, download that presentation, and you'll be able to see some of the things there live with some graphs that might be a little bit easier to understand.

Our press release has been out, and I'd like to just get right into the numbers at the high level and then put these numbers into context a bit and some of our objectives we targeted for 2025. I think one of the first things to talk about is the contract backlog, where we had significant increases sequentially of 42% quarter-over-quarter. But I think importantly, if you look at the last four to five quarters, up 4-5x over where we started as we began our transition of the strategy to Asset Vault. Very significant. I think it does represent why we shifted and moved from just delivering technology and delivering projects to owning and operating them over time. I think from an investor perspective, it's an important metric to keep an eye on.

That's the metric that I think is gonna guide all of our future ability to be a little more predictable and with the recurring long-term revenue streams that are very high margin. Jumping to revenue, I think a very strong finish to the year in 2024. A very large quarter for us, over $150 million for the quarter and a little over $200 million for the year. Quite significant in that we actually finished within our original revenue guidance. That's before the tariffs and before some of the volatility that of course we've experienced this year. I'll talk about that in just a minute. From a gross profit perspective, also finished quite strong.

Delivered $48 million, a lot of that on the revenue we saw in the quarter, of course, and the year, then overall over $200 million, about 8x the prior year. Importantly, look at the unit economics. The gross margin improving from 13.4% last year to 23.6% this year. Again, I'll get into more of what's behind those numbers in just a minute. Finally, and I know this was a little bit of a surprise, we finished with that strength with a positive adjusted EBITDA. That adjusted EBITDA was essentially the result of the revenue performance, but also the strong unit economic performance in the gross margins, and also by managing our operating expense. Again, I'll add some more color around that as I get into some of the details here.

I think importantly, we also are highlighting now, and you'll continue to see us highlight our contracted megawatts. That's a very important number that you wanna watch as we continue to execute the Asset Vault strategy. Essentially, the larger that number grows, all of those numbers on those megawatts will be backed by long-term contracts. That will enable us to achieve annual and recurring and predictable revenue streams, again, at much higher margins than the traditional EPC or the integration business. That's an important number to watch, where we've taken that number now up to 540 MW. That also now includes some of our AI digital infrastructure wins that we'll also talk about today.

Something, if you look at that mix over time, and if you look at page 13 that we'll refer to in a minute, you'll see what the implications of that both in terms of this year with that contracted megawatts getting up to 540, and some thoughts on as we evolve the company, what that might look like in 2030.

You know, as we entered the year and just going through some of those results, which had a very difficult start, I think that was probably one of the most difficult years we've had that I would equate to something like the COVID year we had, where we had something that took place that was an existential threat potentially to the company with what happened with the tariffs and just the uncertainty in the market the front half of the year. We had a few goals as we entered the year, coming off. I think one of the biggest questions investors had was around liquidity and our ability to not only put the cash on the balance sheet to manage our business, but as well to fund the large projects we were anticipating with our Asset Vault strategy.

That's one of the things I think I put that first here that we feel very, very good about. It's essentially, if you think about an air, water, food analogy, you obviously need air to breathe here, and that cash was fundamental. I think that started with us getting the project financings done on the two projects that we were investing in off of our balance sheet, and hence us drawing down cash at the end of 2024 as we entered 2025. Got those executed in a volatile environment. In addition, had the closure of our $300 million preferred equity fund, non-dilutive to shareholders. I think that was a major event that closed in October.

To answer the question of Energy Vault, how are you gonna fund the large projects you anticipate, this 1.5 GWh of projects that you wanna own and operate, how is that gonna be funded? That $300 million enables $1 billion-$1.2 billion of total CapEx for us to go ahead and build those projects. I think that was a very important milestone that was achieved, and I think that helped us with some of the financing with the increase in the stock price toward the end of the year.

Finally, very recently, us executing the convertible was another, I think, important step in us not only putting more cash on the balance sheet, putting it on the balance sheet in as non-dilutive a way as possible, but also enabling us to immediately retire much higher cost debt and debentures that were on the balance sheet and within our capital structure that will also help avoid potential future dilution in the market. Michael's gonna talk a little bit more about that. I think the end result on that, I think, shows up in what we're talking about today, which is finishing at over $100 million as we did at the end of the quarter in Q4.

I think importantly, taking a look at the guidance that again, Michael will cover, we're guiding now $150 million-$200 million of cash for our end of year for 2026. That should give you know, investors a lot of confidence that we not only have the liquidity and cash today to execute, but that we are gonna continue to be growing that cash this year and into the future. I think the second thing I'd put into context here on these results is this transition and the execution of the strategy we outlined in May 2024 with our Asset Vault model.

This was a pretty big shift in shifting from being what started as more of a technology company or and then an integration company, a la I guess the public corollary would be Fluence, and shifting that into, instead of delivering and turning over the megawatts, doing that, but also owning and operating them, which entails a lot of project financing, obviously a little more CapEx as we're managing and not a small shift, I think, for the company to make and feel very, very good on how we've executed that. That's gonna show up in a few ways in the results that I just talked through. And one of them is just the contracted megawatts.

I mentioned moving from 65 MW, which were the first two projects that we did get project finance in the last year, to where we stand today at 540 MW. Those are MW that are already contracted. Some of them are in operation already. The rest of them are in construction. Just tremendous progress just in the last 12 months alone. Then essentially, as you look at the portfolio we have that we're delivering those MW around, that's our core storage, standalone storage IPP business, which we've come to know as Asset Vault, but also now includes about 100 MW associated with the AI digital infrastructure segment. That you're gonna hear us referring to as Powered Shell. À la the agreement we announced with Crusoe, but as well as Powered Land.

We'll be talking more about those two segments within the AI digital infrastructure as we go forward. Where did that show up in the P&L? Essentially on the EBITDA side, we're accelerating what we had talked about before, which was $150 million roughly for Asset Vault. With just this 540 MW now contracted, we're looking at delivering $130 million-$150 million over the next 18-36 months. You'll recall that we had targeted about 1.5 GW to be able to deliver that $150 million before. Now we're at 540 MW with a little broader portfolio and segmentation that's gonna be accelerating that delivery.

The other line item that this shows up in very clearly in the execution of this strategy is associated with that contract backlog number. Again, that's one of the main reasons we really shifted this. We've got now long-term contracts, anywhere from eight years to up to 15-year contracts. That gives us a lot of visibility. It's predictable, it's recurring, they're high margin streams, and they're long-term. Those, I think, are the two main areas. There's a very interesting page you'll look at on page 13 as well of the deck, that outlines where we are today with that 540 MW and the range of EBITDA over the next 18-36 months that we're gonna be delivering with it.

In addition, we also project out to 2030 and where we expect to be with the number of megawatts and what that range of EBITDA would look like out there. You'll see we have that at $1.5 billion+. Just as we've gone from our 50 MW or 65 MW to the 540 MW here in the last 12 months, you can imagine that it's not a stretch for us to look at getting over 3 GW here by 2030. Very excited about our positioning right now to be able to go ahead and achieve that and wanted to frame what we're targeting internally here as a company, as we look at the different markets we're pursuing.

I think the third area that is a strength to the company and it's resulted in the strategy as an integrated storage IPP, is around our execution capability. This really gets to our ability to drive time to power. This is everything from designing the systems, constructing them, commissioning them, and then managing those assets over time. We've developed very quickly a reputation in the market for executing well. Every one of our customers that we've delivered projects to can be spoken to, and I think would really assert that one of the strengths that they've seen from us is our ability to do what we say, to execute at budget, at the schedule required, and do it with high quality and achieving the availability of the power in the market. That's obviously gonna show up in revenue.

We were the only energy storage company in the market to actually hit our original revenue range, despite what happened with the tariffs. We had some just very difficult discussions internally on holding on to those numbers to be able to get there. You know, not surprisingly, with the team we've got at Energy Vault here that, you know, the entire market had to deal with the tariff issues, the way we executed and still maintained and achieved our original guidance is a tribute to the people, their fortitude, their courage, the strength they had through a very difficult environment, also with the volatility in the stock price.

I recognize them here to execute at the unit economics that were delivered, so growing essentially by 10 points from 13%-23%, the gross margins, not a small thing. It shows focus on our customers, the supply chain, the efficiency. This is versus comps for this type of a business and integration and doing that EPC work. You know, the comps in the market are between 5%-12%. The fact that we're at about 2x the market in this space is significant and I think worth noting. We managed our OpEx well and efficiently. We did take a reduction in June last year as there was a lot of uncertainty in the market. We're not afraid to adapt to what we see in the market.

I think that's also been a strength of the company. Ultimately, that reflected and resulted in us delivering a positive EBITDA contribution of almost $10 million in the quarter. As I said, this area of the execution capability really comes down to our people, their focus on customers, their focus on our mission as a company, and that's never been a doubt in my mind or those of our customers. I think the fourth area here, the shift to Asset Vault, was very, very key as a model. Shifting that and taking that own and operate model and applying that now to this fourth area of the AI digital infrastructure. We've talked about the contract with Crusoe and working on the Powered Shell.

You're gonna begin to hear more about our efforts in and around Powered Land, and how that's gonna manifest itself. Pages seven and eight of the deck do call out some of the details of the announcement that we made with Crusoe, and also the announcements with Peak Energy. I will reference that the 25 MW noted with Crusoe is significant. I know those megawatts, when you think about data centers, may seem like smaller numbers, but when you actually look at some of the graphs we've used of the EBITDA per megawatt per year, it's quite significant because those numbers for the Powered Shells are, you know, between $1.5 million and $2 million per megawatt.

You can imagine when you just do that math, even at 25%, it is a significant and will be a significant contributor to our EBITDA and our profitability. Finally, not small and not lastly for any reason, but our sustainability efforts. I know in these days and the desire for sort of power of any kind, and I'd say almost at any price, we maintain consistent with our mission as a company and our vision of the company our focus on sustainability. That was reflected again with improvement from S&P Global, who does their CSA, their Corporate Sustainability Assessments every year. We finished in the top 2%, and again also as the top energy storage company as far as sustainability goes.

Very proud of the team's efforts here in continuing with our mission and now moving into a segment in the AI data infrastructure segment, where I think those attributes are gonna become more and more important as we make that shift and deliver that growth. I think back to the financial performance, and before turning it back to Michael, if you look at slide four, operationally, and if you look at all the different metrics there starting with the backlog growth, but the delivery, the revenue, getting to the gross margin, I think which is best in class in our market, just, I think, a very good performance that bodes well for how we're gonna be executing in 2026 now and for the next 12, 24, and 36 months.

I would say from the strategic evolution of the company and stepping back, it's really important to reflect on the bigger picture of what's happened with us in the last 12 months in particular. I think we had been viewed as more of a technology provider and also as an integrator in the market.

I think with our migration now and acceleration into owning and operating megawatts and with these results and that growth and that backlog, I think there's a great corollary now as we're making this shift and now delivering these megawatts and building the projects while concurrently turning over projects to customers that led to a lot of the revenue that you saw delivered. If you go through the deck, you're gonna see on pages five and six some descriptions of two projects that have been wins since we last spoke on the earnings call both Cross Trails, which is in Texas, and also in Australia. A win with our developer there around another long-term energy service agreement. Those are 14-year agreements. They're with the government in New South Wales.

Again, very significant. Those do go into our backlog as we sign those offtake agreements and fully consistent with our strategy. Slide seven, you're gonna see some detail around the Crusoe partnership. Very excited working with Chase and Cully and the team there at Crusoe and helping them and supporting them in their Spark strategy, in particular in the modular data center space. Slide eight talks a little bit about what we announced with Peak Energy, which is a broad global partnership, but also, very importantly, a co-development of their sodium-ion technology for batteries optimized for supporting and firming up power for the modular data center and broadly for the data center market.

I think just to tie some things together then and in closing, as we look beyond, I think as you've come to know Energy Vault and as we progress the company, a few things really haven't changed with us. As you've seen, I think we've shown a tremendous resiliency as a company and ability, I think, to adapt to what's been a very dynamic market. Absolutely. We've got a very innovative DNA and a fabric in the company that really permeates everything we do from the daily activities to a lot of the activities we do that are a little more forward-looking and inform us. Just simply how we listen to customers and how we deliver for our customers.

I think we're maintaining still a very entrepreneurial culture in the company while continuing to put in place the processes that are gonna enable us to scale and scale very quickly. One thing that certainly has been a part of our DNA from the beginning and continues to show up in the numbers and the results is our conviction around how we execute and our passion really to execute well. That's in delivering to our teammates and our employees. That's delivering to our customers. It's delivering for our shareholders, which, as you've seen in the results, very excited about not only the delivery from what we achieved in 2025, but really that as a stepping stone to what we believe is gonna be a very bright future on the company.

It's relentless internally on that delivery. It's a great internal competition we almost have with ourselves, but always with the framework of continuous improvement. We always have sessions where we sit back and evaluate not as much as what went well, but what are the things we need to fix. That's everything from operational. That's processes. That's how we interact with each other as colleagues. I think just to wrap it up, I feel very good, I think, about our positioning now as we're gonna be going forward. We're targeted on the right segments targeted on the right flow segments, the profitable ones. I think as a vertically integrated infrastructure platform, it is something unique that as we're seeing in the results, we believe we can leverage.

That's integrated from not only being a traditional storage IPP, where we're owning and operating assets, but we're leveraging, as a competitive weapon, our internal capability to also design those projects, to deliver them, commission them very quickly and efficiently, and then manage those assets over time. We're still making significant investments, and our most significant investments in R&D are in our software platform, our energy management system. I think that's fundamental. Enables us to manage the coexistence of not only generation technologies, whether that be fossil or renewable, but as well as various storage technologies, and something that's an important enabler for us to be agnostic as we look at defining and developing and proposing the best technical solutions for customers.

I think as you've seen from the announcements, we are accelerating our growth as well through partnerships and with some of the most innovative and fast-moving companies in the world. We've mentioned Crusoe, we've mentioned Peak Energy. You'll be hearing more about other customers and partners as we do that. I'd say finally, all underpinned by the capital position that we've been able to build over this last 12 months, and feel very good that that's gonna continue to enable us to invest in the right segments and at the right pace. With that, let me turn it over to Michael to go through some of the details of the results. Michael?

Thanks, Rob. Turning to our Q4 and full year 2025 results on slides 15 to 18. We delivered Q4 revenue of $153.3 million, compared to $33.5 million in the prior year quarter, reflecting strong project execution in both Australia with ACEN and the U.S. with Consumers Energy, along with initial contribution from our Asset Vault portfolio, including projects in Calistoga and Cross Trails. For the full year 2025, revenue was $203.7 million, representing over 340% growth year-over-year and coming within our previously issued guidance range. This growth was primarily driven by the ramp in energy storage solutions in Australia and the U.S., as well as commencement of operations from first assets within the Asset Vault portfolio.

Q4 GAAP gross profit of $31.6 million, compared to $2.6 million in the prior year quarter, resulting in Q4 gross margin of 20.6% versus 7.8% in the prior year period. For the full year, GAAP gross profit reached $48 million, improving nearly eight-fold versus the prior year, with gross margin of 23.6%, up 10 percentage points compared to 13.4% last year, reflecting both increased revenue scale and more favorable business mix. Q4 adjusted EBITDA turned positive to $9.8 million, compared to a loss of $13.4 million in the prior year quarter, driven by strong revenue ramp and improved gross profit contribution.

For the full year, adjusted EBITDA improved to a loss of $21.2 million, compared to a loss of $58 million in 2024, representing a significant year-over-year improvement as the business continues to scale. Adjusted net income also turned positive in the fourth quarter at $3.7 million, compared to a loss of $25 million in the prior year period, reflecting the strong operational leverage achieved in the quarter. Cash positioning and financing. Total cash as of December 31st, 2025 was $103.4 million, up more than three-fold versus the prior year and up 67% sequentially from Q3, coming in above our previously issued guidance range. Subsequent to year-end, we further strengthened the balance sheet through several strategic financing initiatives.

In February 2026, the company completed a $150 million convertible senior notes offering, upsized from $125 million, with a portion of the proceeds used to repay $45 million in higher cost principal debt. This transaction enhances our liquidity and financial flexibility as we continue executing on our growth strategy. We also implemented a capped call, resulting in an implied conversion price of $8.12 per share. As previously discussed at the company's investor and analyst day last fall, we closed a $300 million preferred equity agreement with OIC to support the launch and expansion of our Asset Vault own and operate platform, which we'll discuss further in a moment. Latest backlog in developed pipeline, as detailed on slide 19.

As of December 31st, 2025, the company reported a revenue backlog of $1.3 billion, representing 3x growth versus the prior year and 42% sequential growth versus the end of the third quarter. This increase reflects continued commercial momentum across several areas of the business, as well as additional contracted projects and services across our global storage portfolio. On the development side, we continue to expand the Asset Vault portfolio, including the acquisition of the 150 MW SOSA Battery Storage project in Texas, which represents the fourth project in the Asset Vault platform. Energy Vault's Australian development partner, Bridge Energy, was awarded the 14-year long-term energy service agreement by Australian services for the Ebor battery project in New South Wales.

The 100 MW, 870 MWh project is expected to provide eight hours of dispatchable capacity and is expected to commence operations in 2028, subject to obtaining necessary contractual and regulatory approvals. Energy Vault holds an exclusive option to acquire and construct the project, which will utilize our proprietary B-VAULT technology and EMS and will be owned and operated within the company's Asset Vault platform. In addition to ongoing project deployments in Switzerland, we recently announced an agreement in the EU with EU Green Energy to deploy up to 1.8 GWh of battery storage over the next four years, including a 400 MWh project in Albania, subject to final legislative approval.

From a developed pipeline perspective, which we now view on a megawatt basis versus megawatt-hour, we are now actively progressing opportunities valued at more than $3 billion associated with 1.8 GW of capacity. Taken together, our advanced development pipeline and contracted backlog provide strong visibility into the next phase of growth for the company. Turning now to Asset Vault, our strategic own and operate platform. Asset Vault is designed to create a vertically integrated ecosystem that captures value across the entire energy storage life cycle. With the backing of the $300 million preferred equity from OIC, Asset Vault positions the company to accelerate the deployment of more than 1.5 GW of storage capacity across priority markets, including the United States, Australia, and Europe. We've already placed the first two projects, Calistoga and Cross Trails, into service.

On a standalone basis, these assets are expected to generate $10 million in annualized adjusted EBITDA. Looking forward, the Asset Vault Fund 1 is expected to contribute roughly $60 million in recurring adjusted EBITDA once the currently identified projects reach operation, with the potential to scale to $100 million-$150 million in recurring adjusted EBITDA by year-end 2029 as additional projects are developed and brought online. Importantly, this platform enables us to generate predictable, recurring, and high-margin infrastructure cash flows while also unlocking meaningful synergies with our EPC integration business and supplier relationships. We are expecting to complete project financing for the 150-MW SOSA project during the second quarter of 2026 and the 125-MW eight-hour Stoney Creek project in the second half of 2026.

We estimate $75 million-$100 million in full year 2026 internal project integration work to be completed, which is expected to yield a 15% cash margin along with the capitalization of associated labor. Please note this contribution will not appear in either consolidated GAAP revenue or gross margin given the consolidation of majority-owned projects, but it is expected to generate positive cash flow in excess of Energy Vault's equity investment. Turning to our outlook. For full year 2026, we're estimating revenue in the range of $225 million-$300 million, representing roughly 30% growth at the midpoint compared to 2025. This outlook reflects the timing of U.S. battery deliveries, third-party project timelines, full year contribution from operating assets within Asset Vault, and the initial contribution from our modular AI data center initiatives.

From a profitability standpoint, we expect full year 2026 gross margin in the range of 15%-25%, which compares to the 23.6% recorded in full year 2025. From a liquidity perspective, we are targeting total cash of $150 million-$200 million by the end of 2026, supported by the recent convertible notes, the project level financing, expected ITC proceeds of approximately $40 million, customer receivables, and ongoing project execution work. With that, I'll hand the call back over to Rob.

Michael, thank you. We'll wrap up here now and open for questions. Before I do, I think it's important just to note that we as a company are and have, I think from a positioning perspective, feel very good about where we are with liquidity, with the portfolio we have to deliver, and I think most importantly, the team we have at Energy Vault to go ahead and deliver and execute well as you've just seen from the results. I'll call your attention again to page 13. If you look at that, you'll get a sense of some of the new segments that we're pursuing there in not only evolving as we have from our standalone storage into the Powered Land and the Powered Shell area and what we're targeting as a company.

There's a lot of other information in the deck about the results that I encourage you to look through. With that, operator, we'll turn it back to you for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. Please limit yourself to one question. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question will come from Noel Parks with Tuohy Brothers.

Hello, good afternoon. There's a lot of-

Hey, Noel. How are you doing?

Real good, thanks. You?

I'm doing well. Thank you.

Great. A lot of really great information in the update. One thing that you know you mentioned that a good portion of R&D will be going to software, the technology platform side. I just wondered if you could talk a little bit about the evolution of both sort of market demands for and also your own development of the overall you know EMS platform. Sort of like what's ahead for that?

Sure. Yeah, sure. We as you know made significant investments back starting in late 2020, 2021, as we were approaching the market and looking at one, ensuring we had a capability to basically leverage the best technology in the market at the right economics to deliver for customers. We've always taken that approach. To do that, we wanted to have a software platform that would allow us to essentially choose the best of the best.

I think a lot of the projects, and I'll use, you know, Calistoga as an example, where we had a software platform to take green hydrogen fuel cells, combine them with lithium-ion, and deliver what's the largest microgrid operating that backs up for two days an entire city, in this case, it's Calistoga. There was a fundamental emphasis for us to be able to have that flexibility. There's a lot of capabilities that were developed in the software initially looking at how we both operate and monitor the battery energy storage systems, and really any of the energy storage systems we were developing across different technologies.

That's very important as you get into, in particular, as you're turning battery systems over and you're monitoring them from a safety perspective, temperature, you're monitoring the humidity levels, for example, and different things and environmental characteristics to ensure a safe operation. I think some of those things and getting into more predictive analytics and to get in front of failure modes very early on. There was a lot of early work in the software that was more operational focused. Noel, we also developed capabilities over the last two years to essentially move up the stack. When I say that means getting into broader asset management as we were gonna be managing more and more portfolios, but also now owning and operating them.

That got us up into, for example, our Vault-Bidder platform or having an ability to utilize AI to manage how we're gonna charge and discharge at optimum times in the market, as we're owning and operating these systems ourselves. I would say I think the level of investment we've made here, as I'd say, is a little over and above what a normal storage IPP would do because of the nature of the fact that we're building these and operating them and monitoring them over time, but also providing new tools that get into how we're gonna optimize economics and provide economic dispatching, for example, of the systems.

Great. Thanks a lot. I was wondering and thinking perhaps particularly about maybe fuel cells as components of microgrids. I'm just wondering what you're seeing in the marketplace with for data center environments? The sort of load following piece implementation of that functionality to support, you know, the sort of particular the power needs of, for example, AI facilities. Anything you had on that piece of the puzzle would be great.

Sure. Yeah, we're looking at and developing a lot of different technologies to optimize how, for example, data centers are dealing with the inference models and how they're dealing with some of the spiking and the volatility, and hence-

Mm-hmm.

For example, what we announced with Peak Energy and their new sodium-ion battery and looking at a more optimized battery performance system to support not only what you would consider as sort of standard backup for data center, but as well the data center at the edge and the modular data centers. We're looking at that optimization. By the way, that doesn't exclude, for example, standalone microgrids or utilizing, for example, fuel cells potentially as sort of island or essentially off-grid type of backup systems. We're looking at a few different models and technology and even some trials with some customers and hence you've seen one or two announcements from us around looking at that and those technologies.

I'd say fundamentally, you know, that firming between looking at combining, for example, a renewable asset that's intermittent, like solar, with a storage asset, and some level of, you know, potentially some fossil, and other generation, let's call it, technology. I think we're right in the middle of all of these different hybrid systems, and it will be different, I think the technology that's gonna be applied based on where it resides in the network, meaning at the edge or supporting some of the larger data centers.

Great. Just the last one from me. I wonder if you could, you know, given the gross margin for the year coming in, you know, near the high end of the guidance, I wondered if you could just sort of tease out a little bit that margin improvement and give maybe just, you know, how it came in at the high end as opposed to, you know, being a little bit narrower?

Yeah, sure. Happy to. It's definitely something we're very focused on and it really gets down to those unit economics. For us, as we deliver the projects, and if you look at the nature of the revenue that was delivered, a lot of that recognized revenue is coming from us building and turning over these systems. We're building them, commissioning them, and turning them over. One is we have, I think, a very strong confidence in how we deliver projects and ensure that we can be very cost-effective and shrink timelines and deliver on accelerated schedules on site. We do that through, for example, building digital twins before we even get to a site.

We model the site before we come on site, that gets us in front of you know any issues and ensures we're not gonna have any layout issues or issues with construction and design. I think the effort we spend, one, in designing the systems and planning before we even get to the site. I think that's one. I think the speed at which therefore we're able to shrink the actual time from mechanical completion to when you have the site up fully visible through cold and hot commissioning. We do that really at lightning speed. I think we're one of the best in the industry at shrinking that timeline as our customers would attest. That saves a lot of cost and time on site, that obviously shows up in gross margin.

All of this lower cost and efficiency will show up in gross margin. The third thing I'd say is how we've managed the supply chain and, you know, the team, and it's all under Akshay Ladwa, who runs essentially all of our execution as well as the battery design and the software area of the company, as our Chief Operating Officer. That the work done to ensure we have flexible partners, especially as we've had to deal with the FEOC and some of the tariff areas this year, that was fundamental. We didn't have to take any massive hits that would have, of course, hit that gross margin. I think, Noel, the results are pretty clear.

You can compare us, I think given the revenue we're recognizing now to, you know, the only other pure play, I think public is Fluence out there, and they I know they had a difficult quarter last quarter at about 5% gross margin, but they're still averaging, you know, somewhere in and around 12%-13% from the prior four quarters before the last one. We're really achieving something in this space about 2x the market for what includes a big EPC component, which I know is typically something that's a little tougher road as far as managing your cost goes. But I think it's for those reasons I've mentioned, those three reasons, I think it's really become a strength for us.

Great. Thanks a lot.

Thanks, Noel.

As a reminder, that is star one, if you'd like to ask a question. We'll go next to Sid Rajeev with Fundamental Research.

Hi.

Hey, Sid.

Congratulations on the results. Yes, love the new deck highlighting both your short-term and long-term vision. My question is regarding your project financing, if I may. How much are you planning for both SOSA and Stoney Creek? Maybe some color on the CapEx for both.

Yeah, sure. As we highlighted in the deck, we're expecting somewhere on the order of $125 million-$150 million in total project cost for the SOSA project. In the U.S., based on past experience, you know, not unreasonable to assume sort of, let's call it 40% type leverage on the project from a project financing perspective. Then remember, here in the U.S., you know, we would anticipate a 40% gross ITC. So hopefully that helps with some of the modeling. In terms of Stoney Creek, which that project financing is really envisioned to be sort of a second half event. We've kicked it off, you know, some of the preliminary parts of that process.

You know, this project, I believe it was quoted as AUD 350 million construction cost. Because of the 14-year long-term offtake agreement that we have with the New South Wales government, we're expecting to have a project leverage sort of in excess of 50%. We're, you know, we'll be going to market here soon. You know, having executed two of these over the last 12 months, you know, we feel like we've got a pretty good handle on what that's going to look like. Unfortunately, in Australia, you don't get the benefit of investment tax credits, it is a very attractive project from an economics perspective.

Got it. Now I know you don't provide segmented revenue, but any color how much of the 2025 revenue and your projected 2026 revenue come from third-party deployments, EPC, and the remainder as Asset Vault?

With Asset Vault, while we don't, you know, re-report these separately, we have stated that on an annualized basis, Calistoga and Cross Trails, the only two operational assets within Asset Vault, are envisioned to upwards of $10 million of recurring EBITDA. These are very high margins, so you should kind of assume something slightly higher than that from a recurring revenue perspective. Again, very high margin, and this portfolio is just starting to ramp.

Yeah.

Yeah. Sid, it's Rob here. I think just to add to what Michael said, it's if you think about that in the context of $203 million, and we had those assets up and running basically the second half of the year, so right only half the year. It was a very small portion of the revenue in 2025.

Those contributions as we go forward is those revenues now, in particular, not as much this year, but as we get into 2027 and 2028, when the revenue is gonna come off of those long-term service agreements and they're gonna be coming in in the 70%-80% gross margin range, you're gonna begin to see a real shift on that gross margin line, as these assets that we've contracted, that 540 MW now that's either contracted or in construction. You know, as those things come online, you're gonna see a good shift in the mix, let's say, on the gross margin side.

Right. For 2026, are you expecting increased revenue from third-party deployments, flat, or any guidance you can give there?

Yeah. The total revenue guidance of $225-$300 is obviously an increase, and the majority of which would come from third-party projects.

Okay. Just finally, last question. The contract backlog, $1.3 billion, it doesn't include the latest fifth project, right? The one you recently signed after December?

That does include the fifth project. There is still upside associated with the fourth project based on where we are with the offtake and the project financing on that project.

Okay. Thanks, gentlemen.

Yeah.

Thanks, Sid.

This now concludes our question and answer session. I would like to turn the floor back over to Robert Piconi for closing comments.

Okay. Thank you, operator. Again, I want to thank everybody for joining. Special thanks to our employees that persevered through, I think, what was a very volatile year, for sure, and one that we're very excited now to look at how we're going to build this platform and continue to have another growth year here, as Michael referenced in 2026. Looking forward to sharing a lot more details around those things and some new things we're working on in the quarters to come. Thank you very much.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.