Q1 2025 Energy Vault Holdings Inc Earnings Call
Robert: Michael Bauer, Thomas Boyes, Noel Parks, Alec Scheibelhoffer, Thomas Boyes, Michael Beer, Thomas Boyes, Noel Parks, Alec Scheibelhoffer, Thomas Boyes, Noel Parks, Alec Scheibelhoffer,
Speaker Change: Greetings and welcome to Energy Vault's first quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. Should anyone require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.
Speaker Change: Greetings and welcome to energy bolts first quarter 2025 financial results call. At this time all participants are in listen only mode. A brief question and answer session will follow the formal presentation.
Speaker Change: As a reminder, this conference is being recorded I would now like to turn the conference over to your host sorry. Thank you again.
Speaker Change: Hello, and welcome to energy, both first quarter 2025 financial results conference call as a result.
Speaker Change: As a reminder, energy balls earnings press release and presentation are now available on our Investor website, and we will be referring to the presentation. During this call.
Speaker Change: 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.
Speaker Change: Please note that energy bolts earnings release, and this call contain forward looking statements that are subject to risks and uncertainties. These forward looking statements are only estimates that 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 the city's factors that cause our results to differ from those.
Speaker Change: Dissipated in any forward looking statements, we undertake no obligation to publicly update or revise any forward looking statements, except as required by law.
Speaker Change: 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.
Speaker Change: Joining me on the call today, So I went to Coney, our chairman and Chief Executive Officer at this time I'd like to hand, the call over to Robert.
Speaker Change: Okay, Michael Thank you and good afternoon to everybody here on the call.
Speaker Change: I want to point out to everyone as Michael just referenced that there is an investor presentation. That's been added to our website and were.
Speaker Change: And we'll be sharing more information relative to some of the comments I'm going to be making I'll be referring to some of those charged as were attempting to share more detail with investors in particular around.
Speaker Change: Our recent project financings, our cash situation as well as <unk>.
Speaker Change: Our energy asset management, and the build own and operate model.
Speaker Change: I'm going to jump right into the numbers here and I think just generally as we saw today are encouraged by the announcement that was made.
Earlier today with the China and U S tariff pause, so obviously the market breathing a sigh of relief.
Speaker Change: Jumping right into our numbers and as we always do starting with our backlog and what's been contracted and as he indicated our growth.
Speaker Change: Strong year kickoff to the year here up about 50% in bookings since Q4 on strength, both in Australia, and I'd say in the U S as well.
Speaker Change: I will comment that that number could be much higher year to date in terms of growth relative to.
Speaker Change: Essentially the tariffs in the U S and a lot of projects $200 million to $250 million.
Speaker Change: Worth even above this.
Speaker Change: Bookings number that were in play for US and then we're paused just relative to what was going on in April with the with the escalation.
Speaker Change: Of some of the rhetoric in the back and forth.
Speaker Change: And the tariffs that were put in place. So I think a lot of opportunity here that I'll talk in reference more about later.
Speaker Change: I used to say, we continue to see strength and opportunity both in our core markets in Australia, and the United States.
Speaker Change: On the revenue side in the quarter.
Speaker Change: It was an increase of 10% year over year, and driven again by the startup of Australia projects, So you're going to be hearing more and more from us. This year as we contracted some of the initial projects in Australia and now we'll begin to recognize revenue as those begin to construct we also had a.
Speaker Change: And encouraging our agreement with the India, given the growth in battery storage.
Speaker Change: Happening there around licensing our battery hardware and software architecture for local manufacturing.
Speaker Change: Gross margin was quite fine in the quarter almost double the 26% from last year, a 57% and again this was reflecting some of the regional mix with Australia, which given that the contract structures. We have there and the way we are building and constructing and contracting those projects as well as the <unk>.
Speaker Change: <unk> related to a portion of the license that we signed in India.
Speaker Change: From a cash perspective.
Speaker Change: Notable here up 57%.
Speaker Change: On a on a quarter over quarter basis.
Speaker Change: We have a large increase.
Speaker Change: On page 14, if you look at the increase in our energy storage assets as well. So we put a page in place around 14 to reflect.
Speaker Change: Not only the trend of our cash, which starting with Q4 and we finished at $30 million increase in Q1 to $47 million and we have shown a rolling two quarter view now on the cast and showing additional increases up to 75 million as we will be putting other project financings and the investment tax credits in place.
Speaker Change: That are already contracted so.
Speaker Change: I encourage you to take a look at page 14, because we've been explicit with that as well as showing over that same period, the energy asset growth on our balance sheet. So that's made up of both property plant and equipment that we own.
Speaker Change: As well as any of the construction in progress. So it's interesting to look at those two things side by side as we were spending cash off of our balance sheet to invest in these projects now the cash as planned coming back to the balance sheet with the first project financing completed the end of the quarter on the Calistoga Calistoga Resiliency Center.
Speaker Change: And we expect those trends to continue in the coming coming two quarters, including $45 million more coming in the project financing and the sale of the Itc's both.
Speaker Change: Did this quarter in Q2 and into Q3.
Speaker Change: Sticking on cash for a minute and a big milestone achieve and if you look at page 11.
Speaker Change: We have our first owned and operated asset in cross sales in Texas that is operating in participating in the market now as it's being commissioned.
Speaker Change: As Youll recall that asset is scheduled with the grid Matic offtake agreement to go into commercial operation June 1st incurred.
Speaker Change: Encouraged by getting that commissioning and participating in the market ahead of schedule.
Speaker Change: I think bodes well for how we're going to be executing these projects going forward and I think fundamental important that we also have bee.
Speaker Change: The recent financing now that it's going to be coming up in a few term sheets in place that we're gonna be utilizing to go ahead and close the financing on the Crossrail project as well.
Speaker Change: On an adjusted EBITDA perspective improved 22% year over year and that narrowed the loss to $11 3 million from $14 5 million in the prior year.
Speaker Change: Stemming from the gross margin improvement as well as reduced operating cost even on a what is a seasonably low type of revenue number in Q1.
Speaker Change: So that's encouraging progress there on that and we expect that to continue to improve into the second half of our year.
Speaker Change: Mentioning the Opex here, we are implementing in our process of implementing further reductions in our infrastructure and on the operating expense side, 15% to 25% is youll see noted in our press release, that's about 40% down from just 18 months ago.
Speaker Change: From the end of <unk>.
Speaker Change: 23, so we proactively have been doing this I think some of the U S volatility that we experienced that impacted I think most everyone in the sector. That's in this space is something that we continue to focus on and get in front of as we look at streamlining our overall infrastructure as well.
Speaker Change: It's optimizing our portfolio of investments and where we actually invest for projects in the near to intermediate term.
Speaker Change: This also reflects that we will be ramping up activity in Australia.
Speaker Change: So while we're optimizing overall, our infrastructure and footprint.
Speaker Change: We are also and continued to invest and increase investment in the Australian market given the continued opportunities that we see there.
Speaker Change: I think if you look at chart 12, and overall and look at our frame of the energy asset management business, which is our our new build own and operate assets. We've attempted to to demonstrate and show there the portfolio of projects. There are seven of them right now that are progressing two of which now are.
Speaker Change: Either in operation like cross trails, or Calistoga, which is due to be operating from June 1st.
Speaker Change: And those just first three projects so the ones, where we already have contracted and own either in the market like the first two I just mentioned as well as Stony Creek in Australia are going to be delivering about $30 million in annual recurring project EBITDA over the next 15 years.
Speaker Change: So page 12 is not only reflects those three but it also shows the other four projects that are progressing that we have direct rights to own that total of just those seven projects alone will get us to something in the range of about $100 million of recurring operating EBITDA again long term. These are assets that will be 15 years old.
Speaker Change: Life.
Speaker Change: And it will continue to run on and encouraged by the continued progress that we see there.
Speaker Change: Finally, what I'd say and just rounding things out from a numbers perspective.
Speaker Change: As I mentioned at the start here encouraged to see the China U S tariffs pause a bit that does.
Speaker Change: Reignite some discussions that we were having for a U S battery deliveries.
Speaker Change: We are not changing our current guidance in light of that for this year, we have a lot of diversity in our in.
Speaker Change: In our project, both geographic as well as we have and the diversity and the fact that 90% of our current backlog is actually not impacted by the U S tariffs that were underway.
Speaker Change: We have one project that was set for delivery. This year that we have flexibility to deliver next year under a an alternative to China supply chain with a large tier one battery players. So we have put in place.
Speaker Change: Our structure and a contract to deliver outside of China as the case may be.
Speaker Change: If you go to page 13 from the Investor deck, you will see a summary.
Speaker Change: The potential impacts of various tariff scenarios there, but we're also explicit that we secured up to two gigawatt hours of capacity for 2026 delivery if the need should arise for us to deliver outside the China supply chain and will continue to evaluate that here over this next 90 days of the period announced this.
Speaker Change: And to see where things are going to shake out so we've.
Speaker Change: Built that into our into our outlooks.
Speaker Change: We're not exposed as much on the prior backlog as I mentioned earlier and the bookings discussion we do have upside on projects that were in discussion during the tariffs are a few hundred million dollars that we will be reigniting those discussions I think in light of.
Speaker Change: What was a bit locked and frozen before but in light of the the announcement. This morning, I think we're encouraged that.
Speaker Change: We're going to have that flexibility to potentially deliver on some things.
Speaker Change: This year is as we were planning and process to do.
Speaker Change: So with that just to close I think on the summary overall a good progress in the quarter I think across the growth drivers.
Speaker Change: The battery projects in Australia that the 10 year license in India, which Diversifies us and exposes us to large growth. We expect there through a license agreement our first wholly owned energy storage asset operating now in Texas, That's a big milestone for us in terms of our strategy and done.
Speaker Change: On time and under budget, we sat in and even slightly ahead of schedule. So I think just demonstrates what we're capable of doing with the team we have.
Speaker Change: Think the geographic diversity and the owned assets over time are going to are going to really play well in various volatile environments that we would continue to expect.
Speaker Change: Having this recurring long term predictable EBITDA now with with assets that we're going to be putting in service is something that will help insulate what otherwise is a.
Speaker Change: An environment that can be a bit lumpy when youre delivering energy storage projects as we've seen.
Speaker Change: I think and importantly, and just to close I think this getting the first project financing done and obviously the increase in cash and now the projected continued increases in cash were going to have over the coming quarters.
Speaker Change: The various investment tax credits that have already been contracted to be sold.
Speaker Change: As well as some pending project financings.
Speaker Change: Should give the investors a lot of confidence that we have the cash in place to continue to invest in our strategy both in energy storage or energy storage solutions business as well as the energy asset management and the build own and operate portfolio.
Speaker Change: And I'm very happy to share that in these numbers with you today.
Speaker Change: And we'll look forward to sharing more updates here along the way in particular, given some of the recent announcements this morning.
Speaker Change: With that I will turn it back over to Michael to go over some of the details of the results.
Michael: Thanks, Rob.
Michael: And you highlighted the company currently maintains a revenue backlog of $648 million, which increased 49% year to date, including two projects in the U S with a new customer or first energy storage project in Switzerland in the 125 five megawatt one gigawatt hour Stony Creek project in New South Wales, Australia, which was recently awarded the 14 year long term.
Michael: Storage agreement they'll test that Oh hold we have $2 six gigawatt hours in projects in Australia, either contracted or under agreement for acquisition with.
Michael: With 400 megawatt hour <unk> projects already under construction and the 200 megawatt hour <unk> two project announced in Victoria.
Michael: Given the trend the traction within our third party build and transfer business and the evolution of our build own and operating strategy now representing $2 60 gigawatt hours via our EPC EQ and long term off take agreements with another $8 eight gigawatt hours or $2 $1 billion in our developed pipeline of awarded or Shortlisted opportunities.
Michael: Once the team is working to convert as we speak note, we adjust our develop pipeline for prevailing battery prices and FX rates that those projects overseas.
Michael: As Rob mentioned regarding the U S. China tariff pause, it's worth noting that we're largely shielded from U S tariff risk due to a strong Australia presence license agreements and enhance asset ownership, representing really 90% of our backlog today and pending final positive resolution in timing, we maintain our current revenue guidance you could see potential upside from any acceleration of U S battery deliveries later.
Michael: This year.
Michael: First quarter results from a revenue perspective, we achieved first quarter revenue of $8 $5 million up 10% year over year, principally associated work with work in Australia and in new IP license for the energy storage market in India as announced previously we signed that 10 year 30 gigawatt hour licensing royalty agreement with India.
Michael: P&L infra.
Michael: So manufacturing deploy those default battery energy storage technology platform.
Michael: Based upon our backlog the timing of third party work and equipment deliveries.
Michael: Contribution from Calistoga and cross sales next quarter, we expect this to ramp in the second half of 2025.
Michael: From a gross margin perspective, our first quarter GAAP gross margin of 57, 1% improved versus the 26, 7% margin a year ago, driven by the favorable revenue mix stemming from the India license agreement.
Michael: On the adjusted operating expenses, our first quarter operating expenses of $16 $2 million decreased by 4% year over year, reflecting disciplined cost side management.
Near term targets include reducing most.
We recently reported quarterly adjusted operating expenses by 15% to 25% to a quarterly run rate of $12 million to $14 million as compared with the first quarter of this year, while continuing to invest in profitable engagements as Australia's market demonstrates robust growth potential as depicted in the earnings presentation. This would equate to roughly $58 million and adjusted operating expense in <unk>.
Michael: <unk> thousand 25, but with an implied annualized run rate of about $48 million in the second half of this year, representing that 40% reduction from 2023.
Michael: Now turning to adjusted EBITDA, excluding stock based compensation and other adjustments our first quarter 2025, adjusted EBITDA grew 22% to up to a loss of $11 $3 million from a loss of $14 $5 million year over year.
Michael: By the the additional high margin license revenue and reduced operating costs.
Michael: First quarter 2025, cash finished at $47 $2 million, including restricted and unrestricted cash of approximately $17 1 million compared to $30 1 million at year end 2024, reflecting proceeds from the Calistoga Resiliency Center project financing and the transfer sale of the investment tax credit associated with that company.
Michael: Company reported a $26 million increase in property and equipment, primarily related to construction and progress on owned projects during the period for a balance of over $125 million at quarter end largely associated with investments in Calistoga in Snyder, Texas.
Michael: Meanwhile, the company is currently in the market for project financing and ITC monetization across trials, which we expect to occur later this quarter, yielding approximately 20 million in gross proceeds from the project financing with an additional 12 million anticipated the sale and transfer of the ITC under the IRI.
Michael: We expect the transfer and sell them all three ITC has with a reputable buyer to generate proceeds in September of approximately $40 million of which $13 million.
Michael: Were included in the CRC project financing structure and approximately $12 million is associated with cost trends.
Michael: Delighted in the earnings presentation with the timing of cross rail project financing and the transfer and sale of those tax credits along with normal course business operations, we expect to earn <unk> with about $50 million to $60 million in cash, including restricted and unrestricted cash improving further during <unk> to a range of $60 million to $75 million.
Michael: Turning to our owned and operated portfolio with costs over the current currently undergoing commissioning the asset is expected to be placed in service later this month or early June consistent with the off take agreement with tea journey.
Michael: <unk> is now also undergoing commissioning and currently charging and discharging in the market with targeted operations slated for later this month.
Michael: Including Stony Creek, our portfolio continues to progress with the first three projects named above expected to deliver approximately $30 million in annual recurring project EBITDA over the 15 year plus life once operational.
Michael: We continue to execute on the build own and operate strategy and have identified a strong funnel absorbed asset ownership and infrastructure projects in the U S and Australia totaling over 30 gigawatt hours in the presentation, we've called out our seven targets with rights to own and operate to achieve long term goal to.
To achieve roughly $100 million in recurring annual EBITDA once in service.
Michael: We also see a host of advantages and synergies across our legacy business as we leverage our project management expertise solutions based approach and diversified storage project portfolio, while inherently more capital intensive.
Michael: Then the EPC business these accretive owned and operated project.
Michael: Projects enhance earnings visibility and our merchant margin profile overall.
Rob: I will hand, it back over to you Rob.
Rob: Yeah.
Speaker Change: One moment, please for will be reconnect the speakers.
Speaker Change: Okay.
Speaker Change: [music].
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Speaker Change: Thank you for your patience, Steve reconnected the speakers will now head to the Q&A session.
Speaker Change: We will now be conducting the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: Confirmation tone will indicate your line is in the question queue you.
Speaker Change: You May press Star two if you would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.
Speaker Change: One moment please poll for questions.
Speaker Change: Yeah.
Speaker Change: Hey, operator, if it's okay go.
Speaker Change: Yes.
Speaker Change: I was not able to close look can I close before it gets questions I apologize yes. Please go ahead.
Speaker Change: Okay, great sorry for the technical difficulties folks.
Speaker Change: Anyway, just to close as Michael finish there we lost him for some reason on the side, where we are.
Speaker Change: In any event.
Michael: Michael Thanks for going through all the details.
Speaker Change: As I said in the closing.
Speaker Change: We are sharing and would encourage investors to.
Speaker Change: Please take a look at the.
Speaker Change: The charts that are online the investor update it in the earnings charts. There's some I think important detail there not only related to the evolution of our assets and our cash but also in particular.
Speaker Change: Related to the <unk>.
Speaker Change: Project sites that were owning and operating what that means in terms of value for.
Speaker Change: For the company and I think this is underappreciated and perhaps our view is where we're going to be much more visible with what those projects are and the value in terms of recurring EBITDA that theyre going to great.
Speaker Change: We're real excited that we have our first one here now underway and close but youll see.
Speaker Change: Some of the details share in terms of Irr's and whats expected in terms of the performance and the overall profitability of these projects over time.
Speaker Change: So with that operator, let me go ahead and close and just I would like to thank all the all the employees of energy bought for all their efforts, especially in these are what's been very volatile times.
Speaker Change: On the U S side of the market in particular, and everybody's focus on customers and delivering on our commitments.
Speaker Change: Okay, operator back back to you for questions.
Speaker Change: Thank you.
Speaker Change: Somebody will start the Q&A session now I would like to ask a question. Please press star one if you'd like to remove your question you can press star two.
Speaker Change: One moment please.
Speaker Change: Questions.
Speaker Change: Okay.
Speaker Change: The first question is from Justin Clare from Roth and Ken. Please go ahead.
Justin Clare: Hey, guys. Thanks for taking the questions here I wanted.
Justin Clare: I wanted to start just with the U S market and wanted to see if you could just talk about what you've seen in terms of the impact of the tariffs on securing new bookings in the U S market. It sounds like over the last month or so developers have really been in a wait and see mode. And then was the tariff announcement today you know what.
Justin Clare: Do you expect in terms of demand in your prepared remarks. It sounds like you think maybe we could restart contracting here, but maybe if you could just speak to how you see things evolving here.
Speaker Change: Yeah. Thanks, Justin.
Speaker Change: It's exactly as you said so we are.
Speaker Change: We're really encouraged with the start to the year and in progress and in particular given the.
Speaker Change: The planned tariffs that were coming in 'twenty six that we're going to be activated there was a lot of interest from our customers.
Speaker Change: Im getting deliveries into this year.
Speaker Change: And in fact, as we as we got into April when the tariff.
Speaker Change: Rhetoric started to key up in what became very real as things were put in place with the reciprocal tariffs things basically locked and stopped.
Speaker Change: So it just created a situation where.
Speaker Change: People went into a wait and see mode. Generally we were fortunate in that we have exposure to Australia. Other parts of the world for the business as well as we had assets here and have assets here, where the batteries were already here for our own and operate projects both in <unk>.
Speaker Change: Cross trails in Calistoga that are coming up so.
Speaker Change: So we've had that that play to our benefit but absolutely.
Speaker Change: We were expecting to deliver even more bookings at this point on this call, but we're really locked up there in April to be able to do that but it has been I'll say a very busy morning.
Speaker Change: Outside of this call of course, but.
Speaker Change: With a lot of customer discussions on what could be secured now this year potentially obviously, we have a 90 day window here. So we do not have a crystal ball, but encouraged by the fact that they didn't go to midway pause on the tariffs. They went all the way back.
Speaker Change: To where things were prior to when the tariffs started to escalate so that's a.
Speaker Change: A strong signal of commitment to try to get to some if I can call. It normalization, which we had planned for and including that increase from $25 26.
Speaker Change: And we will have to be making some decisions with customers in.
In this 90 day window on deliveries that they may want to secure into this year and should present, some hopefully some upside here to see how things how things progress.
Speaker Change: Great. Okay. That's that's helpful and then just.
Speaker Change: Wanted to check in on the 2025 guide.
Speaker Change: <unk> be able to share how much of the guide you currently have booked versus how much you might need to still go out and contract.
Speaker Change: And then so it does sound like there could be some.
Speaker Change: Demand in terms of getting.
Speaker Change: Batteries in this year and then so I guess, maybe you could just speak to the ability to get that batteries in given the logistical constraints.
Speaker Change: Or anything else.
Sure Yeah, just I'll comment and then Mike looking at here too, but we had going into the year, we had over 80% of our revenue was contracted based on our guidance, but we had a good we had a lot of strength there and a lot of discussions underway to deliver within the range. We gave of course, we gave a little bit of a wide range in.
Speaker Change: And you'll recall that.
Speaker Change: That range was impacted also by the fact that we are owning projects. So projects that we announced even the Stony Creek project is an EPC that would've AD revenue recognition that we chose to own when we got the long term. The 14 year L. Tests are the long term energy service agreement from the New South Wales government, So all that being said.
Speaker Change: Good we had good strong 80% plus coverage on the what we gave and I think the only.
Speaker Change: The change the tariffs put in as additional bookings that we expected to have this year, which we.
Speaker Change: Probably now in this environment. We can we can we can do that and we did have a single customer contract.
Speaker Change: A larger one.
Speaker Change: Public utility debt.
Speaker Change: Planning to deliver in the second half of this year and in Q4 that with the tariffs they had the scheduled flexibility to take it in 26.
Speaker Change: So that pending how things go here over the next the short term again, it's going to depend but we should be able to turn those things back on that just spending how we assess the situation with our customers in the coming weeks, but Michael do you want to add anything to that.
Michael: I think we are here based on today's announcement reiterating our previously issued guidance certainly on the top line. We are all reading the tea leaves like like everyone else, but I think.
Michael: What we have come to appreciate is that there may be a little bit more flexibility in the system than many of us have otherwise assumed.
Michael: And think of this as having a business of.
12 months to 24 month lead times.
Michael: When you go through what we've kind of seen here over the last six weeks, we start to figure out how to how to find solutions right, whether it's sourcing from other markets or getting a little bit more creative and there were a lot of folks that were already.
Michael: Looking at the tariff increase going into 2026 and seeing what they can sort of pull forward into this year. So the fact that we've got deeply ensconced relationships with customers, we can have pretty transparent conversations as to what's possible.
Michael: We continue to work the solution. There is still go get for the year and hopefully on the back end of today's announcement it gives everybody confidence to start leaning into some of their.
Michael: Previously committed project timelines.
Michael: Okay, great. Thanks for the time guys.
Speaker Change: Thanks, Jason.
Speaker Change: As a reminder to ask a question. Please press star one.
Speaker Change: The next question is from Noel Parks from Tuohy Brothers. Please go ahead.
Noel Parks: Hi, good afternoon.
Speaker Change: One thing I would just.
Speaker Change: Ah interesting was.
Speaker Change: For the the.
Speaker Change: India Battery technology licensing.
Speaker Change: As I, just sort of thinking about how that market's evolving what would you say there the differentiator was for her for them.
Speaker Change: With with your technology.
Speaker Change: Great.
Speaker Change: Great question.
Speaker Change: It was a few things probably three main things.
Speaker Change: First of all due to what's happening with the growth in batteries, which India.
Speaker Change: <unk> has been a little bit behind where China is in terms of the deployment recall.
Speaker Change: China had dictated that 20% at power of all that any wind or solar assets had to be complemented with batteries.
Speaker Change: Of that 20% power times.
Speaker Change: For hours. So they had a data of top down commitment India has been a little bit further behind that but now it's.
Speaker Change: He is going to be experiencing quite a bit of growth as you know India is a.
Speaker Change: Very challenging market on the cost side. So I'd say number one I think now we've got a clearly a growth and a need to deploy in a company.
Speaker Change: That approached us about wanting to domestically manufacturer overtime.
Speaker Change: So I think I think that market dynamic is where I start in terms of growth and India being the size.
Speaker Change: Of the country. It is and it's it's natural resources there the desire to do things domestically. The company, we contracted with its one of the largest water resource and waste management companies. There in India. So I think they have a very good interim infrastructure secondly.
Speaker Change: Our solution is.
Speaker Change: It's very flexible in terms of its both its hardware architecture and and the type of software. We have that can do everything from managing the batteries themselves do the asset management in terms of the maintenance the predictive analytics, but also the bidding into the market. So we have the full stack because of that flexibility.
Speaker Change: Where we we don't make our own inverter or we arent.
Speaker Change: You know unique with one and burgers gifts gives them choice and that architecture to make those choices and therefore bid and be flexible in the market. So I think the second thing I'd point to is just that flexibility of our hardware and software that that led them to us and then the third thing I would say with that.
Speaker Change: Is it had to do with a track record we had established with customers and moving very quickly as Youll recall, our first roughly gigawatt hour, we contracted and had delivered within.
Speaker Change: The first 10 to 18 months overall in and two of those sites, where they're large 200 megawatt hour sites, but.
Speaker Change: A few of those sites were sites, where we broke ground or took control of the site mobilized and had the project up and running for mechanical completion and full visibility within four months.
Speaker Change: So two of those three so I think that track record they spoke to our customers those were all in the U S. So they they they did their homework on us and.
Speaker Change: And the other thing unique about those first street projects in the U S. They were all with different batteries.
Speaker Change: Including Samsung for what the one in California.
Speaker Change: BYD for the project in Nevada Energy, and then our own battery architecture under or be vault with RPT for Jupiter in Texas. So I think those those are the three things that led them to work at work with Us and I think an energy bolt does.
Speaker Change: We were flexible and our architecture and how we solve customer problems in bringing that expertise that we had built in the with the China supply chain, we have built and.
Speaker Change: And just some of the broader hardware and software architecture that that brought us together to make that deal happen.
Speaker Change: Great. Thanks, so much for the detail.
Speaker Change: Hum.
Speaker Change: I'm thinking a bit about how.
Speaker Change: Of course, I don't know all the behind the scenes lead up to it but how comparatively straightforward.
Speaker Change: The project finance processes as bedroom for example for Calistoga.
Speaker Change: And and then just sort of thinking as far as.
Speaker Change: Getting arm's-length financial partners to understand the visibility.
Speaker Change: The visibility, we have and the opportunities for returns.
Speaker Change: I'm just wondering how different the discussions offer.
Speaker Change: And customers who are in the processes.
Speaker Change: Evaluating.
Speaker Change: You know what sort of projects they might do with the company.
Speaker Change: I'm just thinking about her I'm struck by even with quite proprietary technology.
Speaker Change: Sometimes.
Speaker Change: It can be such a long process of getting getting customers aboard so any thoughts you had on sort of the differences in explaining to those different audiences.
Speaker Change: Yeah.
Michael: Michael do you want to start with that one and I'll I'll fill in any gaps.
Rob: Why don't you go ahead Rob.
Rob: Okay sure.
Rob: Look on the it's a good question in terms of those dynamics first of all we are on the project financing.
Rob: Starting with the <unk>.
Rob: Whats considered a conventional proven technology, so right away you have something that's bankable.
Rob: Obviously every market and every project has its different dynamics I would say with our initial projects all of them have long term off takers. So that's a tremendous de risk for a lender. The fact that we have a.
Rob: Someone on the other side in the case of Calistoga specific gas and electric on a turn and a half year agreement.
We have a long term agreement on cross trails, the already mentioned in Australia on Stony Creek, It's a 14 year agreement backed by the government.
Rob: I think when you have those dynamics of conventional.
Rob: Bankable Tech and a long term offtake and then third.
Rob: You have a company that has delivered projects already and successfully which that wasn't the case and when we first started in 2022, we are a brand new company. So we actually have to earn that we had to earn that through execution and and and and working for our customers to deliver to their expectations. So I think.
Rob: With those factors at that are I would say a true up the first three projects that we have even in Texas and it was a.
Rob: Merchant market I'm, having a.
Rob: Sort of a threshold of floor offtake agreement all of those things.
Rob: Drive a much better type of project financing and I will say that the first one due to fires in California in Q1 et cetera. It took a little a little longer and hence you had that that I think are chosen.
Rob: Character uncharacteristically low watermark at the end of Q4 and the cash but of course, we had we knew the financings were coming as they are now and we're demonstrating and we've also been able to monetize those itc's monetize them in the sense of contracting.
Rob: A binding agreement to.
Rob: To sell those and those will be coming up in Q3. So I think there's those are the I think some of the factors that influence and and I think one thing I'd say here and all of that data I would hope we'd all agree isn't going to change despite geopolitical and things that happened region to region price volatility in this market.
Speaker Change: Cause of <unk>.
Speaker Change: Severe weather events and the dynamics of that severe weather and what that creates.
Speaker Change: In terms of.
Speaker Change: Changes in the power grid or or even events like fires and things.
Speaker Change: These opportunities and net pricing volatility, we expect to continue as the investment in these assets.
Speaker Change: Now in the ability to participate in that is something that we believe is going to be a very attractive thing for our company and for investors is as we have those recurring streams and you know with that volatility to be able to be quite profitable.
Speaker Change: Great. Thanks, so much for the detail.
Speaker Change: Okay. Thank.
Speaker Change: Thank you Neil.
Speaker Change: There are no further questions at this time I would like to turn the floor back over to Robert <unk> for closing comments.
Robert: Great. Thank you operator, and just thank everybody that joined the call.
Speaker Change: And again, thanks to all the employees of the company that had been.
Speaker Change: Our focus in this environment that definitely has been been very volatile on that and I'll look forward to continued updates here through the quarter on on things, we have ongoing and we'll look forward to the next time, we get together in early August. Thank you very much.
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Speaker Change: Okay.
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