Q3 2024 Altus Power Inc Earnings Call
Good afternoon, ladies and gentlemen, and welcome to the Altice Power, Inc. Third quarter 'twenty 'twenty four earnings conference call. At this time all lines are English and only mode. Following the presentation, we will conduct a question and answer session.
At times during this call we require immediate assistance. Please press star zero for the opera Reading. This call is being recorded on Tuesday November 12th of 'twenty 'twenty four I would now like to turn the conference over to Alison Sternberg head up Investor Relations. Please go ahead.
Alison Sternberg: Good afternoon, welcome to our third quarter 2024 earnings call speaking on today's call are Gregg Felton, Chief Executive Officer, and Dustin Weber Chief Financial Officer. This afternoon, we issued a press release and the presentation.
Alison Sternberg: Related to matters to be discussed on this call you can access both the press release and the presentation on our website www Dot I'll just power dot com in the investors section. This information is also available on the Sec's website.
Alison Sternberg: As a reminder, our comments on this call may contain forward looking statements. These forward looking statements refer to future events, including Altice Power's future operations and financial performance when used in this call. The words expect anticipate believe well plan forecast estimate out.
Alison Sternberg: Look and similar expressions as they relate to I'll just powered identify a forward looking statement. These.
Alison Sternberg: These statements are subject to various risks and uncertainties, which could cause actual results to differ materially from those predicted in the forward looking statements.
Alison Sternberg: I'll just power assumes no obligation to update these statements in the future or if circumstances change except as required by law.
Alison Sternberg: For more information, we encourage you to review the risks uncertainties and other factors discussed in our SEC filings that could impact. These forward looking statements specifically, our 10-K filed with the SEC on March 14th 2024.
Alison Sternberg: During this call. We will also refer to adjusted EBITDA, adjusted EBITDA margin and a R R or annual recurring revenue, which are non-GAAP financial measures.
Alison Sternberg: <unk> is an estimate that management uses to determine the expected annual revenue potential of our operating asset base at given points in time.
Alison Sternberg: A R assumes customary whether production expenses and other economic and market conditions as well as seasonality.
Alison Sternberg: Our management team uses all of these non-GAAP financial measures to plan monitor and evaluate our financial performance and we believe this information may be useful to our investors.
Alison Sternberg: These non-GAAP financial measures exclude certain items and should not be considered as a substitute for comparable GAAP financial measures.
Alison Sternberg: Power's methods of computing. These non-GAAP financial measures may differ from similar non-GAAP financial measures used by other companies.
Alison Sternberg: More detailed information about these measures and a reconciliation from GAAP to these non-GAAP financial measures is contained in both the press release and the presentation that we issued today.
Speaker Change: And with that I'm pleased to turn the call over to Gregg Felton, Chief Executive Officer of Altus power.
Gregg Felton: Thanks, Allison and welcome to all our investors and analysts joining our call today.
Gregg Felton: Third quarter was marked by continued momentum across the business and meaningful progress toward our long term growth plan.
Gregg Felton: Before turning to specific highlights from the quarter.
Gregg Felton: Wanted to first take a step back to remind everyone. Why we are incredibly excited about our current market positioning and the opportunity that we see in front of us.
Gregg Felton: As the market leader in the commercial scale solar industry as per wood Mackenzie is total commercial solar ownership rankings as of June six 2024, with a nationwide portfolio of operating assets that has surpassed one gigawatt altice tower is uniquely positioned to thrive in it.
Gregg Felton: Increasingly dynamic landscape.
Gregg Felton: We focus on generating clean power directly where that power is being consumed.
Gregg Felton: Dressing the pressing energy demands of communities and enterprises, and the resulting strain on the grid.
Gregg Felton: Our solutions not only provide much needed additional generation capacity, but importantly helped to alleviate transmission issues given the proximity of our generation two areas of consumption.
Gregg Felton: Turning back to our milestone of reaching one gigawatt of operating assets. It's important to highlight the significant advantages of our incumbency and the benefits we derived from our scale.
Gregg Felton: A robust and growing portfolio of operating assets is generating power and associated revenue daily across the country are.
Gregg Felton: A key aspect of our ownership they may not be fully appreciated is our unique opportunity to continually optimize these assets over time.
Gregg Felton: We view our portfolio not just as an individual projects.
But as a collection of long term infrastructure assets.
<unk> strategically positioned for continued value creation.
Gregg Felton: Our large portfolio, which continues to scale with increasing density in markets, we serve not only enhances our operational.
Gregg Felton: <unk> C, but also solidifies our competitive edge in the commercial scale solar market.
Gregg Felton: Looking ahead, we expect to grow faster than the overall market over the next few years due to several favorable dynamics, notably both federal and state level programs have reshaped our operating environment, expanding our total addressable market by encouraging the re shoring of our domestic supply chain.
Gregg Felton: As well as providing additional incentives intended to expand locations for solar.
Gregg Felton: The declining cost to build solar projects combined with the secular rise in electricity prices create a compelling financial landscape for our continued growth.
Gregg Felton: With more and more states eager to adopt supportive policies, we are poised for significant portfolio expansion possess.
Gregg Felton: Positioning us to capture a growing set of opportunities within the clean energy sector.
Gregg Felton: On our last earnings call I detailed the work we were undertaking to identify areas of strength as well as areas, where we have the opportunity to improve and drive efficiencies that support our growth plans.
Gregg Felton: I am pleased to report that we believe these efforts are already yielding favorable results across our business.
Gregg Felton: One key area of focus has been the renewed go to market strategy associated with our early stage development pipeline.
Gregg Felton: You will recall that back in May I announced my plan to put our development pipeline under review with a focus on execution certainty and increasing the velocity at which these opportunities convert into revenue generating assets.
Gregg Felton: This resulted in a return to the approach that has been a hallmark of our historical success a more targeted market specific approach decline engagement, which reflects the highly localized nature of solar development well.
Gregg Felton: While still early we are already seeing results that show that this approach is working.
Gregg Felton: Including <unk>.
Gregg Felton: Our recently announced solar project in San Bernardino originated in partnership with the Trammell Crow company and other exciting projects to be announced within the coming weeks.
Gregg Felton: With a renewed focus on aligning our resources with the most successful parts of our track record. We are energized about our strategy moving forward, which we believe positions us to expand our footprint with new customers, while also servicing our existing customers and identifying ways to expand our relationships over time.
Gregg Felton: Another key area of focus has been the growth of our community solar portfolio.
Gregg Felton: Within the quarter, we announced new community solar projects in both Colorado and mean, bringing our total number of community solar states benign with approximately 30000 customers representing close to 500% growth in our customer base within the last two years.
Gregg Felton: In support of the rapid growth in this area of our business. We recently appointed a new head of community solar to lead our efforts in delivering innovative solutions that unlock the value of our projects, while expanding access to the benefits of solar.
Gregg Felton: Our community solar offering is a critical component of our unique value proposition.
Gregg Felton: It enables us to site projects in favorite locations for example, a non developer brownfield.
Gregg Felton: And send that power into the local community.
Internally, we have rigorously prioritized activities designed to improve revenues and operating efficiency.
Gregg Felton: In support of this we recently announced the restructuring of the investment in structured finance team to better streamline our investment and financing process in support of our expanding opportunity set while also deepening our bench strength.
Gregg Felton: This team takes charge of originating negotiating and executing due diligence on altice powers project and portfolio opportunities. This team also sources and structures debt and tax equity solutions, helping to ensure that we are well positioned to capitalize on market opportunities.
Gregg Felton: During the quarter Altice power successfully structured a new form of tax equity transaction, which highlights our commitment to maximizing market efficiency and competitiveness in renewable energy project financing.
Gregg Felton: This innovative tax equity partnership model allows for the allocation of investment tax credits from our completed solar projects to partners with significant tax capacity the.
Gregg Felton: The ability to transfer tax credits to third party buyers outside of the traditional partnership model unlocks new opportunities for value creation for both our partners and investors.
Speaker Change: Before turning the call to duston to.
Speaker Change: Walk through quarterly financial performance I'd like to end by offering some perspective on our recently announced strategic review.
Speaker Change: This comprehensive assessment is focused on unlocking shareholder value, while enhancing our access to capital.
Speaker Change: Helping to ensure that we are well positioned for long term success in a growing industry with immense market opportunities.
Speaker Change: As there is no assurance that the review will result in completion of any particular transaction or outcome. We will refrain from additional comments until the board has approved a specific transaction concluded its review process or otherwise found it necessary to share additional information.
Speaker Change: That said I want to emphasize that our team's day to day focus on growth and value creation is stronger than ever.
With that let me now hand, the call over to our CFO Duston Weber for additional financial highlights.
Duston Weber: Thanks, Greg and thanks again to everyone joining this call.
Duston Weber: During the third quarter of 2024, we generated 333 million kilowatt hours of clean electricity from our portfolio.
Duston Weber: This power was sold through our customers at long term contracted rates that resulted in a $58 7 million of revenue compared to $45 1 million in the third quarter of 2023.
Duston Weber: An increase of 30% driven by the growth of our portfolio and increased sales of clean electricity to our customers.
Duston Weber: GAAP net income for the quarter was $8 6 million compared to net income of $6 8 million during the third quarter of 2023.
Duston Weber: The primary drivers for the change relative to last year were an increase in operating revenues.
Duston Weber: Noncash gain from the Remeasurement of our alignment chairs and an income tax benefit for the quarter, which were partially offset by increased operating expenses and interest expense.
Duston Weber: Moving to the non-GAAP measure of adjusted EBITDA, We reported $37 million compared to $29 1 million in the third quarter of 2023 amounting to growth of 27%.
Duston Weber: This increase was driven by the growth of our portfolio, partially offset by increased levels of operating and general and administrative expenses.
We are very pleased with the performance in the quarter and our continued traction towards our long term growth plans.
Duston Weber: It's worth noting that we think of the ongoing investments in our platform in the context of driving attractive returns for every dollar spent.
Duston Weber: Specifically the increases in general and administrative expense represents some targeted investments in our energy optimization team and our data analytics.
Duston Weber: Put it into context, given our current revenue run rate every 1% increase in production corresponds to approximately $2 million in net revenue and cash flow.
Duston Weber: Last quarter, we outlined our progress on the 80 megawatts in construction.
We originally disclosed at the onset of 2024.
Duston Weber: We've announced a lot of activity since then and can confirm that we are on track to complete a majority of these projects by the end of the year with the remainder to be completed in the first half of 2025.
Duston Weber: Accordingly, we are reaffirming our previously stated 2024 guidance range of $196 million to $201 million of revenue and $111 million to $150 million of adjusted EBITDA.
Duston Weber: Since may we've refined our approach to early stage project development, emphasizing market specific engagement to increase speed and execution certainty.
Duston Weber: As Greg referenced at the beginning of the call. This shift is already paying off.
Duston Weber: Focusing on what's worked best we're better positioned to expand our customer base deepen existing relationships and drive sustainable growth.
Duston Weber: The momentum we're seeing across the business gives us confidence in the achievement of our previously stated three year guidance of 20% to 30% CAGR on megawatts.
Turning to our financing plan, we finished third quarter with a cash balance of $111 million versus $92 million at the end of Q2.
Duston Weber: During the quarter, we continued to expand capex to support our growth.
Duston Weber: And we achieved $23 million in cash proceeds from the transfer of investment tax credits that Greg alluded to earlier.
Speaker Change: Looking ahead, we believe we remain well positioned to finance our growth with a combination of cash from operations. Our committed construction facility tax equity partnerships and long term financing access with that I'll turn the call back to Greg for some final remarks.
Speaker Change: Thank you Dustin.
Speaker Change: With more than one gigawatt in operating assets Altus power is strategically positioned to continue our market leadership and commercial scale solar addressing rising energy demands while mitigating the strain on the grid by generating power, where it's needed.
Speaker Change: Our scale and portfolio approach enhances our efficiency and strengthens our competitive edge.
Speaker Change: We have a large market opportunity in front of us and our refined go to market strategy has improved our prospects for development pipeline execution.
Speaker Change: Allowing us to deepen customer relationships and maximize revenue potential.
Speaker Change: We believe all of this power strong market position enables us to continue to seize emerging opportunities, while our recent internal restructuring maximizes operational efficiency and aligns resources for sustainable growth.
Speaker Change: These efforts coupled with a focus on market innovation and customer engagement solidify our leadership in the renewable energy sector.
Speaker Change: The <unk> team remains unwaveringly focused on executing our day to day business and powering the growth that keeps our business driving thank.
Speaker Change: Thank you for your time today, and we look forward to taking your questions.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by one you will hear a policy has.
Speaker Change: <unk>.
Speaker Change: Should you wish to decline from the quality process. Please press star followed by chip and maybe are using a speaker phone. Please Mr handset before pressing any keys.
Speaker Change: Our first question comes from the line of Justin Clare from Roth Capital Partners. Your line is open.
Justin Clare: Hey, guys good afternoon.
Afternoon Joseph.
Justin Clare: Hey.
Justin Clare: I wanted to start out here.
Speaker Change: Dustin you mentioned that you expect to complete the majority of the 80 megawatts that you had talked about that was under construction earlier in the year.
Speaker Change: Do you expect to be completed in 2024, so just trying to do some math here. It looks like maybe you could install an additional 40 megawatts plus in Q4.
Speaker Change: Order to get you there I'm wondering if that's in the right ballpark.
Speaker Change: Should we be anticipating.
Speaker Change: A number of completions.
Speaker Change: Before now and year end.
Yes, Hi, Justin we have a lot of construction activity going on.
Speaker Change: We announced not too long ago, some recent additions as well.
Speaker Change: Maine and so.
Speaker Change: Between now and the end of the year, we do expect to add additional capacity in.
Speaker Change: I referenced on our prior call. The 80 megawatts that we began the year with our in construction and we still do expect to have a majority of those.
Speaker Change: <unk> done for the full year.
Speaker Change: Okay.
Speaker Change: And I think I said it in the earlier remarks, but the.
Speaker Change: The rest of those 80 megawatts are.
Speaker Change: We are also in active construction, but will likely.
Speaker Change: Get finalized in the first half of 2025.
Speaker Change: Okay got it got it.
Speaker Change: And then just on the on the guidance wondering given where we are in the year.
Speaker Change: What what enables you to achieve the high end of the guide versus the low end is it really a matter of just the operational performance of the assets at this point and the weather conditions in Q4 or do you need some of those projects to be completed and contribute to the revenue in Q4.
Speaker Change: In order to kind of get you to the high end of the range.
Speaker Change: Sure Yes.
Speaker Change: Just then.
Speaker Change: The contribution to our megawatt here.
Speaker Change: In mid November is pretty limited.
Speaker Change: As it relates to the current years revenue impact.
Speaker Change: And so I think you hit on it the biggest factors that can influence where we end up within the range will be the in place.
Speaker Change: Portfolio and the operating performance there as well as of course weather plays a factor as well.
Speaker Change: Right right Okay.
Speaker Change: And then.
Speaker Change: One question just on the <unk>.
Speaker Change: A new administration that we're going to have.
Speaker Change: President heading into next year. It does look like it's possible that we could get some changes to the incentives and the IRA.
Speaker Change: So was just wondering if you could comment on how the value proposition for community solar or commercial solar might be impacted if we get an earlier phase down of the ITC.
Speaker Change: Would you anticipate potentially increased state level incentives or.
Speaker Change: How do you see.
Speaker Change: The path going forward here.
Speaker Change: Sure. Thanks for the question. So let me start by saying, we were not particularly surprised by the outcome.
Speaker Change: And we remain very optimistic about the operating environment as well as our ability to execute on our three year plan I think that's the headline.
Speaker Change: We would note that other businesses may have greater sensitivities to some of the provisions of the inflation reduction act, whereas as we've said before we see certain of the provisions that are most in.
Speaker Change: Focus is more sources of upside for the business as opposed to risks.
Speaker Change: And all of that being said we.
We don't anticipate that the new administration would materially alter the provisions of the IRS, which are most relevant to our business.
Speaker Change: Okay got it that's helpful. All right. Thank you.
Speaker Change: Sure.
Speaker Change: Our next question comes from the line of Jeffrey Campbell from Seaport Research Partners. Your line is now open.
Speaker Change: Good afternoon, and congratulations on a solid quarter.
Thank you.
Speaker Change: I wanted to begin by asking you mentioned in the last call that you had a community solar installation in Westchester that was.
Speaker Change: Waiting on a utility connections so the higher level I'm wondering if you're seeing any improvement.
Speaker Change: With the utilities on that end or Conversely are you using there so substantial gating item for new community solar projects to be undertaken.
Speaker Change: Yes.
Speaker Change: So.
Speaker Change: I think that it's fair to say interconnection delays R. R L.
Speaker Change: Element of our business and it's something that we have historically always had had to manage through and we'll continue to do that there's no real material update I would say from our prior call.
Speaker Change: As a general matter as it relates to the Morgan Stanley site.
Speaker Change: Project is still not yet operational.
Speaker Change: And.
Speaker Change: It's extremely frustrating.
Speaker Change: I think I highlighted pretty detailed on the last call that.
Speaker Change: We have an agreed upon schedule with the utility for them to do their work and that work is not yet complete.
Speaker Change: And.
Speaker Change: And so we're continuing to manage through that as best we can.
Speaker Change: We do hope and expect that that project will be placed in service in the near future and let me just sort of provide a little bit of broader commentary as well I think that in general.
Speaker Change: There is while there is a sort of general industry dynamic around interconnection that duston just referenced it is absolutely a utility by utility location by location. So as you've also heard we have a number of sites that are being operationalized and coming online and so.
Speaker Change: Very much the solution to this particular problem is to have a robust pipeline of deals that we are converting on.
Speaker Change: So you should look at the pipeline of opportunity generally speaking is one that we have a lot of enthusiasm in terms of the conversion pipeline.
Speaker Change: Well not there.
Speaker Change: <unk> now it's an island.
Speaker Change: Actually argue that.
Speaker Change: The difficulty on the community solar side is a positive for the commercial solar.
Speaker Change: The commercial solar installations are avoiding utility.
Speaker Change: One one times farmers you have theres opportunity.
Speaker Change: Yes, I think that's what I want to make sure that we.
Speaker Change: Don't create a perception that community solar is writ large a challenge it is not.
Speaker Change: We have a number of community solar sites that are coming online around the country, and Maryland, and mean and elsewhere the <unk>.
Speaker Change: <unk> that Dustin referenced in Maine are all community solar projects.
Speaker Change: We are having success in terms of interconnection there so the point being that the particular.
Speaker Change: Read through as it relates to community solar would probably be more what utility you're dealing with and how responsive that particular utility might be to an interconnection requirement. So.
Speaker Change: Yes.
Speaker Change: Yes, thats good color I appreciate it guys.
Speaker Change: And my last one is just you've highlighted how you're I'm paraphrasing your return to focusing on what you control.
Speaker Change: Working really well I'm wondering how the CBRE side is doing on trying to promote solar.
Speaker Change: Within their ESG.
Speaker Change: Yes.
Speaker Change: Yes, no. It's a great question and CBRE has actually made some public announcements.
Speaker Change: They're leaning into advisory advising clients on ESG and sustainability objectives.
Speaker Change: And certainly all of this will feature prominently in those discussions so CBRE as you know has excellent connectivity with the fortune 500.
Speaker Change: And their ability to be in the room and provide consultative services, which are really needed and offer up the solar solutions that <unk> can provide in the context of those discussions is definitely something that is an opportunity for us.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Tim Morris from <unk>. Your line is now open.
Speaker Change: Thanks, and good execution on your profitability in the quarter that was nice to see.
Speaker Change: Yes, I just wanted to touch up on a threat that was mentioned earlier in the opening remarks about the conversion timing on new projects.
Speaker Change: Do you mind elaborating on the operational improvements or enhancements you might have put in place the last six months to really narrow the lead times.
Speaker Change: Sales cycle timing and increase that velocity.
Speaker Change: There's a lot of it has to do with maybe.
Speaker Change: Less emphasis on appeasing national enterprise customers and if you can talk about anything else.
Speaker Change: Yes, thanks for the question.
Speaker Change: So our specific focus has been on newbuild opportunities that we source from real estate owners, sometimes together with channel partners.
Speaker Change: And our focus was resource allocation and specific to the pipeline, ensuring both execution certainty as well as increasing the velocity at which these opportunities move through the pipeline and therefore can convert into operating assets generating revenue and cash flow and so we are pursuing a much more targeted.
Speaker Change: <unk> approach and a market specific approach with a focus on markets that offer the most attractive economics for solar as well as focusing on decision makers, who are looking to execute so to your point that might not be a national enterprise opportunity. It may instead be a market specific opportunity.
Speaker Change: Albeit perhaps with a national player right. So.
Speaker Change: The nature of the market is.
Speaker Change: You know we're in 25 states there are states that are much more lucrative.
Speaker Change: In focus for us and to some degree we call. It a back to basics model, we are focusing on activities and go to market strategy that has worked well for us historically and as you heard in the prepared remarks. The early results are encouraging and we are seeing significant deal flow and actionable opportunity.
Speaker Change: That's helpful, especially as a concentrate maybe more in the northeast the only other question I had was just if you.
Speaker Change: Just kind of maybe elaborate or rank.
Speaker Change: Your priorities for capital allocation I mean, you do IRR.
Speaker Change: Hurdles I'm, just wondering how community solar stacks up against redevelopment projects Youre seeing in the pipeline versus new projects. Since you kind of talk through that how you go about picking which one now in the near term.
Speaker Change: Sure.
Speaker Change: So.
Speaker Change: It's a multifaceted question to some degree and let me just make sure that I tried to break it down.
Speaker Change: First off as you know we are very focused on driving revenue and driving revenue with attractive return on investment. So everything that we're doing is focused on making sure that we're being very efficient and thoughtful with respect to the returns that are available to us. So if you were to ask had his community solar stack up relative to <unk>.
Speaker Change: Another opportunities the way that we think about our business and the way we describe our business we are.
Speaker Change: The market leader in commercial scale solar that is roughly 1% to 20 megawatt solar sites that is the common denominator as it relates to the sites that we developed and the offtake various the offtake is sometimes the behind the meter solution with a tenant in the building, it's sometimes a remote.
Speaker Change: Offtake, which could be a community solar customer, which of course would naturally make a lot of sense. If you're building on a large industrial rooftop without a lot of in building demand or if you want to build on a brownfield where theres no captive demand right there, but just around the corner in the community. There is demand from our vantage point, we look at those deals and.
Speaker Change: We've been in the community solar market for now 10 years.
Speaker Change: And the key ingredient to a successful community solar program is making sure you understand the customer acquisition dynamics, the how how youre actually going to be.
Speaker Change: Both service those customers the costs associated with servicing et cetera. So the return opportunity away from the <unk> question.
Speaker Change: People have I think disproportionately focused on community solar adders.
Speaker Change: There is an opportunity for low and moderate income upside if you have the right off take but candidly our approach is to underwrite those deals with a base case offtake assumption and look for upside to the extent that that's available in the market.
Speaker Change: So that's really how we think about community solar as compared with any other asset now in terms of your question about optimization of redevelopment that is a whole other category that is worthy of just a couple of minutes of explanation.
Speaker Change: We have an opportunity to optimize or constantly create more value out of our portfolio. Our portfolio represents projects that we own across the country that are strategically located in areas of high power consumption and everybody should know appreciate that increasing demand for power and associated higher power prices.
Speaker Change: Particularly in those areas, where our assets are located that's a huge opportunity our floating rig contracts allow us to participate in a higher power prices and we also think there's an opportunity over time to increase capacity at our site. So that's the redevelopment opportunity that is taking a site that might have been built five years ago or 10 years ago.
Speaker Change: And actually increasing the capacity of that site, creating more power and not only participating in higher power prices, but a greater volume of energy or greater volume of power that you're able to sell big opportunity, obviously, a big opportunity associated with our large operating base and something that we probably should spend some more time elusive.
Speaker Change: <unk>.
Speaker Change: That's terrific. Thanks for those helpful insights, giving those details and that's it for my questions.
Speaker Change: Thank you.
Speaker Change: And then as a reminder, if you wish to ask a question. Please press star followed by one thank you.
Speaker Change: Okay.
Speaker Change: Our next question comes from the line of Andrew <unk> from Morgan Stanley. Your line is open.
Speaker Change: Thanks, Good evening, guys and thanks for taking the question.
Just wanted to come back to the election piece for a second Greg you've mentioned over the past few months and quarters about.
Speaker Change: Theres just a natural friction.
Speaker Change: With some customers depending on their portfolio of projects or the portfolio of real estate and how that fits into the unit economics of solar and I'm just kind of curious I know, we're only week past the election, but I'm sure you've continued to have conversations with prospective customers has.
Speaker Change: Just the added level of uncertainty around the irate.
Speaker Change: Either inhibited those conversations I totally fair point, and we agree with your view around how solar is really not the aim.
Speaker Change: New administration of Athene, but is that creating more friction and just the natural selling process when youre sitting at the table with some of these prospective customers.
Speaker Change: Yes, we're not seeing that at all thanks for the question by the way, we're not seeing that at all at the customer level are in those conversations.
Speaker Change: The noise around this and the uncertainty is predominantly at investor comment or question and understandably people want to take the time to understand what it might mean and which businesses are impacted so I think different businesses have different sensitivities as it relates to the inflation reduction act and potential changes.
Speaker Change: I think our business and the natural position that we find ourselves in which is engaging on new site development or opportunities to essentially expand our portfolio that ultimately really is how much can we pay for a lease if we're going to rent to a piece of land.
Speaker Change: Or rooftop it comes down to ultimately the blocking the basics of our business as it relates to the production Thats available, which is obviously not influenced and then just the foundational points associated with the IRS, which include just codify a 30% ITC.
Speaker Change: A lot of the other adders and elements around domestic content around upside associated with the offtake profile those from our perspective are not foundational to our business.
Speaker Change: So we are really not particularly focused on it nor are we seeing that play a role in the dialogues that we're having with our customers.
Great. Thanks, so much guys I'll take the rest offline I appreciate it.
Speaker Change: Thank you.
There are no further questions at this time please continue.
Speaker Change: Thanks, everyone for the time today, and we look forward to following up with you one on one.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
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