Q2 2025 HA Sustainable Infrastructure Capital Inc Earnings Call
Greetings and welcome to hasi. Second quarter 2025 earnings conference call and webcast.
At this time, all participants and The Listener mode a brief question and answer session will follow the formal presentation.
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As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Aaron, chew vice president of investor relations.
Thank you, operator and good afternoon to everyone, joining us today for highs second quarter, 2025 conference call earlier this afternoon has the distributed, a press release reporting our second quarter, 2025 results, a copy of which is available on our website. Along with a slide presentation, we will be referring to today. This conference call is being webcast live on the investor relations page of our website where a replay will be available later today.
Some of the comments made in this call are forward-looking statements, which are subject to risks and uncertainties described in the risk factor section of the companies form, 10 K and other filings with the SEC.
Actual results May differ materially from those stated. Today's discussion also, includes some non-gaap Financial measures. A Reconciliation of gaap to non-gaap financial measures is available in our earnings release and presentation.
Joining us on the call today are Jeff Lipson. The company is president and CEO as well as Chuck Melco our Chief Financial Officer and also available for Q&A are Susan, Nikki our chief client officer and Mark Pangburn, our chief revenue and strategy officer
To kick things off. I will first turn it over to our president and CEO. Jeff Lipson, who will open the presentation today on slide 3, Jeff?
Thank you, Aaron. And thanks, everyone, for joining our Q2 2025 call.
We are pleased to report on another strong quarter and remain very confident in our business model and strategy.
Our business model focused on climate positive, Investments with programmatic clients investing in non-cyclical Revenue producing projects is indeed the ideal strategy for today's environment.
In addition our thoughtful approach to leverage capital and liquidity likewise positions us. Well for long-term growth in all policy and macroeconomic environments.
Importantly, we also value diversification investing in several different asset classes and consistently expanding our scope to create additional opportunities for growth.
And avoiding any material impacts of slowdowns and a particular Market.
Our ftn business has grown meaningfully over the past few years. And we continue to explore opportunities beyond our historical Focus, including Investments, that have very limited public policy ramifications.
The impact of this consists in approach to our business has led to a number of accomplishments in the second quarter.
We have increased our pipeline which now exceeds 6 billion dollars.
And our new business year to date has an average yield greater than 10.5%.
On the capital raising side, we issued $1 billion of term debt and used $900 million of the proceeds to pay off maturing convertible notes and near-term senior debt.
We also successfully closed nearly 600 million dollar debt offering on our CC1 joint. Venture.
Expanding its capacity and extending the investment period until late 2026.
Our adjusted EPS for the quarter was 60 cents.
Slightly down from last quarter, simply due to the timing of gain on sale Revenue.
Which is 19% higher year to date as compared to 2024.
I'm also pleased to reaffirm our guidance of 8 to 10%, compound annual adjusted, EPS growth through 2027.
As we remain on track to meet this target over the next 3 years.
Turning to page 4, I'd like to provide context for why certain recent macroeconomic. Legislative and policy items will result in positive outcomes for our business.
First, the United States remains at a current and forecasted level of power, demand that requires and all the of energy strategy.
In fact, even with an all of the above approach, the supply is unlikely to keep Pace leading to higher power prices which in turn will drive additional development including Renewables.
The impact of changes in tax credit policy for Renewables is still a few years away.
And given existing safe harboring more than enough time for the industry to adapt.
Particularly when economic viability without tax, credits has fundamentally already occurred.
Storage ITC will also incrementally improve solar economics well into the next decade.
And RNG remains an attractive asset class bolstered by the extension of the clean fuels PTC.
For our business. These developments have a number of implications.
The value of our existing portfolio increases as power prices increase.
And although we don't Mark to Market our assets, we may see a higher yield on these Investments over time.
Our pipeline Remains unimpeded by any policy changes, which I will discuss more in a moment.
We also maintain a diversified approach to the business and we continue to expand our scope.
This approach coupled with lower risk, asset level investing allows us to be significantly more insulated from policy changes than other business models.
The lack of tax equity in the project Capital stack, a few years from now may create additional opportunities for hasi Capital to fill the void.
And we are also well positioned to continue our long-standing client solution of providing Capital recycling.
Finally, we expect policy envir, we expect the policy environment to result in less competition for project level Investments.
In summary, we have no need to make any material changes to our existing strategy, to thrive in the current operating environment.
Turning to page 5, we emphasize that our investments are funded. After development, risk has been eliminated.
This slide also reinforces that our existing pipeline is insulated from policy changes.
The slide provides an example of the chronology of hassis participation and utility scale Investments.
The underlying projects are already at an advanced stage when we add the investment to our pipeline,
The project is even further advanced by the time we close our commitment.
And typically at or very near Commercial operation, when we fund our investment.
This is a reminder that our investments are at a de-risk stage of development.
And we typically do not incur permitting, or policy risk.
Further. This graphic provides a depiction of the stage of the investments in our pipeline.
And strong evidence that our pipeline is not at risk related to permitting tariffs or subsequent tax policy changes.
Turning to page 6, our pipeline has grown over the past few quarters and now exceeds 6 billion dollars.
Our pie chart reinforces the diversification of our business, with strong representation from each of our markets, and a new slice representing. The next Frontier asset classes discussed on our February earnings call.
The behind the meter pipeline includes a long list of Energy, Efficiency, Community, solar and residential solar and storage projects with several existing and new clients.
The grid connected pipeline is also very active as many developers are in search of capital to execute on their Pipelines.
And our fuels transportation and nature pipeline continues to reflect the significant opportunity. Particularly in renewable natural, gas and transportation.
Which are less impacted by policy changes.
Turning to page 7. I'd like to emphasize the significant Improvement in the efficiency of our balance sheet.
Putting aside our securitization activity, and our retained capital.
Prior to CC1 closing in 2024.
$100 of equity, raising resulted in $300 of Investments.
Following CC1, we have doubled the investment dollars for each dollar of equity.
Now that we have closed a debt facility at CC1 with a vehicle, leveraged Target of 0.5.
The investment dollars, for each dollar of equity has tripled from the original business model.
Equity investment and the funded CC1.
This slide is a powerful reminder of the significant strides we have made in our efforts to grow earnings while limiting additional Equity issuance.
And with that, I will pass the call over to Chuck MCO to discuss our financial results.
Thanks Jeff.
Before I get into our quarterly results, I would like to take a minute to discuss the ways we create value for our shareholders.
First, we generate returns from closing a creative transactions into our portfolio.
Either through our CC1 structure or directly onto our balance sheet and minimizing the cost of capital related to our funding sources.
Second.
Once we have funded the investment, we can further optimize support portfolio and also reinvest cash received and to other high yielding Investments.
and lastly,
we generate recurring and 1-time fees related to our securitization activities and CC1.
These fees typically do not require any Equity Capital, which further enhances our return on equity.
Now to take a look at our transaction activity on site. 8, we have closed approximately 900 million in transactions, in the first half of this year.
Which is 9% higher than last year.
Q2 was lower than Q1 and was not the result of a particular theme.
Rather normal course changes in the closing timeline.
Given the strength of our pipeline. We feel good about the Outlook of closings to remainder of the year. And the total being higher than 2024,
We continue to be successful in, closing transactions with double-digit yields and had a weighted average closing yield of greater than 10 and a half percent.
And continue to execute a cross. All of our asset classes.
On slide 9.
We are meaningfully scaling or platform with managed assets of 14.6 billion in a portfolio, of 7.2 billion up 13 and 16% respectively from the same time last year.
Our CC1 code investment structure is now at 1.1 billion of funded assets.
And with the recent debt transaction at CC1, has 1.5 billion of additional capacity that we expect will be filled before the end of 2026.
As a reminder, the investments in CC1 are comprised of both receivables and Equity Investments,
but due to the structure, show up in equity method Investments on our balance sheet,
Our portfolio yield is 8.3% and we expect it to increase over time as we fund the higher yielding Investments.
That we have closed over the past year.
To sum it up. We have built a base of Diversified transactions, creating a recurring income stream, that is a reliable source of income year after year especially given the high quality performance of the assets.
As is evident by our realized loss, the rate is less than 10 basis points.
On slide 10.
We are making a modification to 1 of our metrics adjusted net. Net investment income.
To include other recurring sources of revenue.
And is now called adjusted recurring, net investment income.
in addition to the income generated from our portfolio,
we also beginning to generate meaningful, recurring fees from our retained interests and
combining these other recurring income sources with our portfolio income.
We'll provide a metric. That is a helpful indicator of the growing. High-quality recurring income. That we are generating.
When comparing our adjusted recurring, net investment income for the half first. Half of 2025 of 164 million to the same period last year. It has grown 19%.
As a reminder, this is not our only source of income.
And we also have income from gain on sale from our securitization activities and upfront fees from our CC1 structure.
Which are more dependent on new transactions.
On slide 11.
The efforts we have put into scaling. A high-quality investment platform. Have resulted in our third investment grade rating.
We already had this rating with Moody's and Fitch and we are recently upgraded to investment grade by S&P.
Having 3 investment grade ratings, assists Us in minimizing, our cost of debt.
This upgrade, from S&P is a notable validation of our business model.
specially given the macroeconomic backdrop that we have seen thus far in 2025
subsequent to receiving our S&P upgrade. We issued 1 billion of bonds with 600 million that matures in 2031.
And 400 million that matures in 2035.
Capabilities and managing our debt structure to minimize risk and cost.
To further illustrate these capabilities, we partially tendered. The 2026 bonds that were issued in 2021 when the 10-year treasury was at 75 basis points.
And that was evident that interest rates could be much higher when we refinanced the bonds.
We managed our business and scale our platform to give us access to the investment grade market. And also executed some Hedges, and were able to refinance at a cost that keeps us. Well, positioned to meet our earnings guidance and hit our Target, Roe.
This is a great example of the resilient balance sheet, we have built in the capabilities of our liability platform.
Related to our capital structure, we ended the quarter with a debt to equity ratio of 1.8 times.
And continue to operate within our target range of 1 and a half to 2 times.
Lastly, we can continue to operate with strong levels of liquidity.
Which was 1.4 billion at the end of the second quarter.
This liquidity will provide us flexibility and funding our business and managing the refinancing of our remaining 2026 Bond maturity.
On slide 12.
We illustrate the trend in our portfolio, yield and our realized cost of debt.
We have been able to maintain our margins even as interest rates have risen.
And it's expect to see our portfolio yield further increase as our higher yielding Investments are funded.
We will see a slight increase in our cost of debt next quarter.
when the recent debt issuance impacts our interest expense,
The effective weighted average cost of this recent issue was 6.28%.
And we expected to impact our total average cost by approximately 20 basis points.
On slide 13.
Our Q2 adjusted EPS was 60 cents.
And we are continuing to deliver an attractive return with our Roe of 11.9% in Q2.
Our newly modified metric adjusted recurring, investment income was 85 million for the quarter.
And increased 25% from the same period in the prior year.
Our gain on sale, origination fee and other income was 9 million.
As highlighted on, on our q1 call.
Our full year, gain on sale activity is expected to be more in line with the level, seen between 2021 and 2023.
And we expect the majority of the total gain on sale. This year to come through in the second, half of the year, due to the expected timing of closings.
Overall, we are executing on the activities that will continue to deliver value through the growth of our adjusted recurring investment income.
And the efficiency created from CC1 on a need for Equity capital.
And we believe we are well on track to deliver on our guidance to grow earnings into 2027.
Before I hand the call back to Jeff in an effort to ensure we are providing information. That is most useful to our investors.
We will be publishing on our website, a summary of our key, historical metrics.
That should assist in building models.
We hope that it is helpful and certainly would like to hear your feedback.
With that, I will pass it back to Jeff for a few topics and closing.
Thanks Chuck.
Turning to page 14, we present our sustainability and impact highlights.
Noting, our cumulative carbon count and water count numbers, reflect the significant impact of our investment strategy over time.
Including on page, 15.
Our business model has produced the powerful combination of robust investment activity, access to deep pools of capital, attractive margins, and results that are non-cyclical and sustainable in all interest rate and policy environments.
The core components of this resilient business model have been in place for several years, validating its true durability.
Successful execution of this business model, relies on a talented team.
And my happy colleagues continue to flawlessly and relentlessly overcome. All obstacles. Reflected in our ongoing ability to achieve our goals.
As always, thank you to this outstanding team.
Operator. Please open the line for questions.
Thank you.
Ladies and gentlemen, you will now be conducting a question and answer session.
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Our first question comes from Chris dendrinos. With RBC Capital markets, please go ahead.
Thank you and good evening. Um, maybe to start here. We noted that um you all were uh an acquirer I think of the service Co from from Nova. So can you maybe chat a little bit about that, that transaction and and what that does for you all going forward, thanks.
Sure. Thanks for the question Chris. So, just to clarify, uh, sundstrom, that's 50% owned by hassie.
And is a serer of residential solar leases.
Sunr has been awarded the servicing by the purchasers of Sova.
Of the zenova portfolio.
And you know, we're certainly pleased by that. We're pleased by the progress of sunr overall, we have a good management team there. The companies, well positioned in the current environment.
And the Soviet transaction will provide scale to the business. So we're certain very pleased with the progress of our of our son, strong team. But that's that's a 50% joint venture, uh, in terms of hassie's ownership.
Got it. Thank you. And then I mean I guess you know any any kind of color you can provide on how that might impact EPS going forward and then I have a, a quick follow-up as well.
Go ahead sir. Yeah. Hey, Chris, this is Chuck. Um, so right now, Sons strong, as Jeff mentioned, is a JV and the JV that will be servicing, um, at this current current time, um, you know, is is not really, um, coming through in our results that you can can see. But as the, um, servicing platform does get some scale. Uh, you know what, the sonova assets coming into it and over time whatever other activities it might get into. Um, you know, we will start to see some of the margins from that business come through, uh, most likely uh, with where you see our other Equity Investments coming in.
Got it. Thanks and and then yeah I guess just uh related note on on resi performance. I think there was an article in the Wall Street Journal a couple weeks back highlighting, some underperformance of of loans out there and I think they mentioned kind of good leap specifically but you know anything to to comment on as far as that portfolio is performing and I think you you know, you've highlighted that you have really low losses. So I assumed it you all weren't weren't being impacted, but any kind of thoughts there. Thanks.
Thanks for the question. And, and you did say, loans in your question and the Wall, Street Journal article, specifically reference loans, more than 95% of the hasse portfolio is leases
and Lease customers have significant incentives to continue to make the payments much more so than loan customers.
And our portfolio continues to perform very, very well. Many of the issues that were brought about in that article were present in residential solar loans, or just not present in Lisa. So that's a little bit of apples and oranges there.
Got it. I'm very helpful. Thank you. Thank you.
Thank you.
Uh, next question comes from Brian Lee. With Goldman Sachs. Please go ahead.
Hey guys, this is Tyler besan on for Brian, thanks for taking our questions.
Um, you've seen steadily increasing adjusted Roe's um, suggesting Roe's on New Deals is meaningfully higher than your legacy deals. Uh, you also called out some incremental Roes of like 19% and up to 28% with the additional CC, uh, H1 leverage. Um, so can you discuss, like, how you expect your adjusted Roe to trend from here? And, you know, could you see a meaningful bump as you work through the CC1 funding?
Thanks for the question. Maybe I will start and Chuck and add on. I just want to make a clarification that the Roe's that are on slide 7 are incremental Roe.
Other thing I want to add is uh you know, in the prepared remarks, we've mentioned some commentary around Capital efficiency and to the extent you know, that we continue on that Trend, to reduce the amount of equity needed to fund our investments. And some of these, um,
Uh activities. We're getting into with Asset Management fees with CC1. Uh, to the extent, we're increasing, uh, our earnings there because they don't need Equity. You we will see a steady uh, increase in re but I wouldn't say that there's going to be any big jump. It will most likely just be a gradual increase.
Due for helpful and then on the CC1 debt. How will this like mechanically flow through your income statements and how do credit rating agencies treat this debt? Like, is this going to be applied to your leverage ratio?
Yeah, so on the first part on how the debt comes through and our financial. So the, the debt so CC1 is, uh, is not, uh, in its entirety on its balance sheet. It is a joint venture. So the, the debt is being put was placed at CC1, uh, it does not show up in our financials and the way that it come will come through in our results is through. Increasing our returns a bit on CC1 as Investments are funded with the proceeds.
Uh, in terms of the rating agencies, um, you know, we have talked to, the rating agencies about this, of course. And in fact, I think, uh, S&P may have actually written this in their report that when they look at these kinds of structures, that as long as you are, um, keeping the debt to equity ratio, under 0.5 to 1. Uh, They Don't Really Factor it in. So it's just kind of non-event and we don't have any uh, intent to go any higher than that, leverage ratio. So, um, I think we're, we're going to be just fine from a rating agency standpoint.
Great, thank you very much.
Thank you.
Thank you.
Uh, next question comes from my panoy with mizuho. Please go ahead.
Hey, uh, good evening. Thanks for the question here. Um, on slide 6, I was looking at the mixer, could you just talk about what is included in next friend? Here, I think it's the first time we saw this broken now. Uh, so nice to see that. But what's in there and secondly just on the uh mix of BTM solar and BTM manager efficiency. Can you talk public historically house that trended uh using more of Energy, Efficiency, now or um have to think about that? Thanks.
Uh, thanks. Mhm. So on the next frontier, uh, just as a reminder, in our February call, we put forth this notion of the next frontier, where we may expand the business. I talked a little bit about that in the prepared remarks. Uh, the relevant slide is on page 17 in the appendix in the afternoon stack. And so the progression from disclosing in February where we may take the business next to disclosing that we have some of these investments in the pipeline is sort of the natural chronology. Uh, we're not going to talk specifically about exactly what's in the pipeline. You know, the third step of that will be to actually close a transaction, and then we'll talk about it.
But I will say, I am very pleased, that in relatively short order. We've identified next Frontier Investments and they're at a stage where they are in the pipeline. So I think we feel good about that and the diversification that it'll bring to the business, um, on the second part of your question. I think the breakout and behind the meter between solar, which is primarily community and resi, solar and storage. And a little bit of cni solar
And the Energy Efficiency is just something we thought would be helpful. I think that uh split is which this quarter is roughly 50/50 is relatively consistent in terms of the what has been the behind the meter slice uh and the relevant sizes of those 2. Uh,
Pieces of business. So hopefully that's helpful. Um, in understanding, what's in the pipeline?
Uh, no, no, that's helpful. And let me just 1 clarification, I think someone on the slide, right? I mean, the slide 4. It's so so you guys talking about uh replacing tax Equity just to clarify. That's for
Post tax credit, uh, timeline or is it something you were looking to invest in even uh, or replacing taxes in the next few years here as well.
Okay, I'm going to ask Mark to answer that 1. Hey, it's Mark.
Tax credits go away.
Uh there is less need for tax equity and that will create more room in the capital stack for uh investors like us who focus on monetizing cash positions. So this is primarily a uh post tax credit opportunity.
Perfect, thank you.
Thank you.
Thank you.
Uh, next question comes from Noah K. with Opana. Please go ahead.
Oh, great. Thanks for taking the question. Uh, you know, last quarter, you talked about kind of, I think a record volume of inbound client requests. Um, and we saw that with the pipeline expanding quarter of a quarter, uh,
I would just like to get a sense of
What you and really your customers are trying to solve for in the current environment, I think you made some comments in your opening remarks around, you know, the the shifting policy environment, um, and your expectations that transactions will, you know, kind of continue to pick up in the back half. Uh, but, you know, we're just sort of love to get an understanding of, you know, how you and your clients are, you know, approaching some of the uh the policy and Regulatory changes here as it relates to developing not only the 12th line. But you know further out opportunities.
Sure, thanks for the question. No, I'm actually going to ask Susan to go ahead and answer that. Yeah, thanks Noah.
And really the fundamentals.
You are so strong. That's what's at the core.
A Tailwind for our clients business and then obviously, we follow on, um, as those projects and their pipelines mature, but with the demand side of the business, not only on the utility scale side but um, behind the meter um, Sun Run and some other clients have reported out. That's really where the fundamentals are. And then, you know, clearly everyone's now navigating through what's passed with the obb but, um, have invested through safe harboring, to be able to continue and plan and build out their pipelines. You know, for not only next year but, um, for the next several years but our pipeline again is, um, that we report out and it's for 12 months.
Yeah, and and to follow up on the previous question. I mean, I believe.
uh,
certainly for grid connected but you know, probably for a decent chunk of the overall portfolio. There's been substantial safe harboring already and so this
Uh future opportunity around uh replacing tax Equity. I imagine that might flow first to behind the meter and later to utility but over a multi-year period is that kind of the right way to think about it.
I I think. That's right. Uh, Noah and again as Mark said that that's still a couple years out. We just wanted to plant the seed that there's now going to be a void in the capital stack and
You know, what an outcome of this tax policy change may be that hassie's able to put more dollars to work per project.
But again, this is not for a couple of years. And I think the way you laid it out is likely the way it will play out.
Great. If I could speak 1 more in, uh, just want to talk about cash generation. Uh, you know, the the continued helpful disclosures around, uh, adjusted cash, flow from opiates and other portfolio collections, um, do notice that, uh, that is, uh, somewhat down on a run rate versus 2024. Can you just talk through any kind of expected timing? And, uh, you know, cash generation for the back half.
Hey Noah, this is Chuck. Um,
You know, looking at well let let me start with what's going into these numbers. You know, when we look at Cash collected from our portfolio, certainly that includes all of the cash distributions that we're receiving related to the operations of the projects, but there can be other activities that occur at the projects such as refinancing of of debt or initial debt. That's being put onto a project that, um, you know, getting favorable terms on that financing. We often times get a distribution, uh, out of it. Um, so, you know, it's tough to really get a trend of that, of course, uh, in 2024, there was a little bit of that, uh, going on, uh, that is causing this to look like, you know, there's a little bit of a downtrend here, but I will say that, um,
Um, you know, I would say that, uh, you know, the trend that you're seeing right now, I mean, the rest of the year, you know, we'll probably continue that same growth rate, and we'll probably mirror the growth in our portfolio.
Excellent, thank you very much.
You're welcome. Thank you.
Thank you.
Our next question comes from, Moses, satin with BNP Paribas, please go ahead.
Thanks taking my question. Um, closed transactions seemed rather low. I think you noted the year to date numbers so it implies around like 190 million if I'm getting that, right. So how, how should we characterize that in the timing element? And then conversely on the adjusted cash from operations plus other portfolio collections, that was back up to, like, 200 million from the, the negative number in the first quarter. I know that's also a lumpy thing based on how you get your collections, should we think of that as returning to like a 300 million plus, a quarter numbers, so just those 2 on transactions and then the adjusted cash from operations.
So, uh, thanks Moses for the question, I'll I'll take the first part. I'll ask Chuck to take the second part of that question. I would encourage you to read. Absolutely nothing into the second quarter volumes and isolation. I think we've consistently talked about
Uh, the lumpiness in the business and the nature of closings, being out of our control and and really driven by our clients. And so sometimes we have, you know, outside quarters and and slower quarters in terms of actual investment volume. It's part of the reason we do guidance over 3 years and certainly on a number such as volume in the business. I'd encourage you to at least look at a 1 year number and not a quarterly number. And as Chuck, uh, mentioned in the prepared remarks, it is our expectation at this point that volumes will exceed last year. So I wouldn't read anything into the second quarter, uh, for the other part of the question, Chuck.
Yeah, hey Moses. Um so I I think the the answer to your question. Really it is tied in to the response to um Noah's question here, when you're looking at the trailing 12-month from last quarter, uh, going to this quarter, it drops off a little bit because the court the last quarter and the trailing 12 months that was in there.
Last period, um, had some of the, the I'll call it 1 time. Cash distributions coming off of some of our projects, so I I wouldn't read into that, uh, decline in the trailing 12 months at all there.
in terms of,
God that's very helpful and if I could squeeze 1 more in, if I recall from maybe it was 2 or 3 years ago when there was confusion in the investor community on the timing of cash collections or or sort of cash flow waterfall in projects where tax Equity got money before you, like just the structure of of the matter. It implied that at certain point in Project Life and aggregate. In a sense when you did a lot of after you did a lot of equity Investments, you would actually earn more than the amount that was open adjusted earnings. So, is there certain point that we might expect. If, well, this is a further out, question on cash flow and cash waterfall where you even though you're continuing to make Equity Investments, press Equity, Investments, JB Investments like that. Where some of the Legacy stuff will be seeing cash come in that, at a pretty significantly higher number as tax Equity reaches their hurdle and is that around 2526. 27 is that a Fair View there and, and could you quantify that? Sorry, for the long question.
Yeah. You know, it's it's kind of tough to pinpoint exactly when that's going to happen. Yes. It it will start to happen and you know as I mentioned a little bit ago, we are starting to get a little bit more cash.
Coming in the door. Um, but because we are continuing to add Investments with that similar profile. Um you know, we can't really put a definitive date where that's going to you start going to start to see that in our portfolio.
But it, but it has started to happen on Old deals.
Okay. Fair enough. Very helpful. Thank you.
Thank you.
Thank you.
A reminder to all participants. If you would like to ask a question, please press star and 1 on your telephone keypad.
Our next question comes from Vikram bukhari with City. Please go ahead.
Hi, thanks for taking the question, it's Ted on for Vic. Um, just 1 question on the model, I think there's a comment on the prior quarter, call that uh gain on sale. Revenue would be more in line with 2021 to 2023 levels.
Um, should we still expect that to be the case this year? And if so, um, what do you expect in terms of cadence for the third and fourth quarters?
Expect uh to see again on sale on the levels that we mentioned uh average of 21 through 23. Um, so Q3 and Q4 um, you know, certainly will be higher than we saw in Q2 here. Um, but um, you know, I would just prorate Q3 Q4 to get to those total average annual levels.
Got it. Thank you.
You're welcome. Thank you.
Thank you.
Our next question comes from Ben KO with Ben, please go ahead.
Hey, good evening, how are you?
Good. Thanks. Ben.
Um just um uh on the ITC, uh, can you talk about what you're seeing in terms of projects being pulled forward from ITC changes? Or is it? Uh, and I guess I'm maybe we could break break it down by, you know, uh, solar and uh, everything else. Um, um and then and utility solar and everything else and then um, but would you look at this, the next Frontier Investments, like geothermal and fuel cells which now have a favorable tax treatment. How do you view this under that? Next Frontier type of investment label. Thank you.
Thanks, Ben, I think on the first part of the question, we're not seeing meaningful pull forward. I I think the nature of many of the Investments that we make and and the projects that our clients develop is such that they're normally moving as fast as they can. Uh, you know, and I think our page 5 is a good indication of how much work they have to do to get a project to commercial operations. So,
you know, we're not, we're not really hearing or seeing from our clients much in the way of acceleration. We are seeing our clients remain active. We're not seeing delays, but but we're really not seeing much in the way of acceleration.
Uh, on your second part of your question, I would just answer it more holistically.
That many of the investment categories in the next Frontier.
Are uh, less.
Susceptible I would say to policy changes and uh, less driven by tax policy. And that's 1 of the uh evolution of our business that over time our business, you know, through the phase out that we're already seeing in some of the Core Business. And through, the next Frontier, they'll be less of a tax policy orientation to our business over time as well.
So I think that that's probably the best way to answer your question there.
Okay. Um if I can speak 1 more and uh and sorry if you covered I'm jumping around but um in the past you talked about maybe moving internationally. Um could you just give us an update there?
Sure. I don't think we really have anything to report. Been, you know, we've talked about it a few times. I think the most likely approach there if we as we've said before, is to work with 1 of our existing long-term clients, many of whom are multinationals on a non us project and use that as a way to expand our business internationally, but we really just don't have
Anything currently to report on that front.
This call.
Okay, great. Thank you very much Joe.
Thanks Ben.
Thank you.
Ladies and gentlemen, at this time, there are no further questions, the conference of hasi has now concluded. Thank you for your participation. You may now disconnect your lines. Thank you.