Q1 2026 Solv Energy Inc Earnings Call

May 12, 2026

Speaker #1: Good morning and welcome to SOLV Energy's first quarter earnings results conference call. Today's call is being recorded. And we have allocated one hour for prepared remarks and Q&A.

Operator: Good morning, welcome to SOLV Energy's Q1 earnings results conference call. Today's call is being recorded and we have allocated 1 hour for prepared remarks and Q&A. At this time, I would like to turn the conference over to Anthony Rozmus, Investor Relations of SOLV Energy. Thank you may begin.

Operator: Good morning, welcome to SOLV Energy's Q1 earnings results conference call. Today's call is being recorded and we have allocated one hour for prepared remarks and Q&A. At this time, I would like to turn the conference over to Anthony Rozmus, Investor Relations of SOLV Energy. Thank you may begin.

Speaker #1: At this time, I would like to turn the conference over to Anthony Rosmus, Investor Relations of SOLV Energy. Thank you, and you may begin.

Speaker #2: Good morning, everyone, and thank you for joining us for SOLV Energy's first quarter 2026 earnings conference call. Before we begin, we would like to remind you that this conference call may include forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Anthony Rozmus: Good morning, everyone, and thank you for joining us for SOLV Energy's Q1 2026 earnings conference call. Before we begin, we would like to remind you that this conference call may include forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements, which are subject to various risks, uncertainties, and assumptions could cause our actual results to differ materially from these statements. These risks, uncertainties, and assumptions are detailed in this morning's press release, as well as our filings with the SEC, which can be found on our website at investors.solvenergy.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During our call today, we will also reference certain non-GAAP financial information.

Speaker #2: These statements, which are subject to various risks, uncertainties, and assumptions, could cause our actual results to differ materially from these statements. These risks, uncertainties, and assumptions are detailed in this morning's press release as well as our filings with the SEC, which can be found on our website at investors.solvenergy.com.

Anthony Rozmus: this morning's press release, as well as our filings with the SEC, which can be found on our website at investors.solvenergy.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During our call today, we will also reference certain non-GAAP financial information.

Speaker #2: We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During our call today, we will also reference certain non-GAAP financial information.

Speaker #2: The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

Anthony Rozmus: The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Reconciliations of GAAP to non-GAAP measures can be found in this morning's press release and in our SEC filings. Joining me on the call today is SOLV Energy's CEO, George Hershman, and CFO, Chad Plotkin. Following our prepared remarks, we'll open the call for your questions. As a reminder, there will be a replay of this call posted on the IR website. With that, I'll turn it over to George.

Speaker #2: Reconciliations of GAAP to non-GAAP measures can be found in this morning's press release and in our SEC filings. Joining me on the call today are SOLV Energy's CEO, George Hirschman, and CFO, Chad Plotkin.

Speaker #2: Following our prepared remarks, we'll open the call for your questions. As a reminder, there will be a replay of this call posted on the IR website.

Anthony Rozmus: on the IR website. With that, I'll turn it over to George.

Speaker #2: With that, I'll turn it over to George.

Speaker #3: Thank you, Anthony. Good morning, everyone. We're excited to be here today to give an update on our first quarter performance. Before we begin, I'd like to officially welcome Mike Adams as Vice President of Investor Relations to the SOLV Energy team.

George Hershman: Thank you, Anthony. Good morning, everyone. We're excited to be here today to give an update on our Q1 performance. Before we begin, I'd like to officially welcome Mike Adams as Vice President of Investor Relations to the SOLV Energy team. Mike brings over 20 years experience with a broad background spanning investor relations, capital markets, and corporate finance. Mike is here with us this morning, and we are thrilled to have him on board. With that, let me begin with a few key highlights from the quarter. First, safety remains top of mind across the organization. We continue to perform well against industry benchmarks, and our last 12 months results through the Q1 reflect a strong and consistent safety culture across our field operations.

Speaker #3: Mike brings over 20 years' experience with a broad background spanning investor relations, capital markets, and corporate finance. Mike is here with us this morning, and we are thrilled to have him on board.

Speaker #3: With that, let me begin with a few key highlights from the quarter. First, safety remains top of mind across the organization. We continue to perform well against industry benchmarks.

George Hershman: mind across the organization. We continue to perform well against industry benchmarks, and our last 12 months results through the Q1 reflect a strong and consistent safety culture across our field operations.

Speaker #3: And our last 12 months' results through the first quarter reflect a strong and consistent safety culture across our field operations. Our focus on safety remains steadfast, and we will continue to work across the entire organization for continued improvement in this critical area.

George Hershman: Our focus on safety remains steadfast, and we will continue to work across the entire organization for continued improvement in this critical area. Turning to performance, in which Chad will provide more color, our first quarter results reflect strong execution across the business, with profitability coming in above expectations. From a market standpoint, conditions remain as constructive as we've outlined previously. We continue to see no change in the underlying outlook. Demand for power is accelerating. The need for new supply is clear, and solar and battery storage remain among the most competitive solutions to meet that demand. Against that backdrop, we are executing on our growth strategy. We expanded the number of megawatts under O&M contracts during the quarter, further extending our long-term reoccurring revenue base.

Speaker #3: Turning to performance, in which Chad will provide more color, our first quarter results reflect strong execution across the business, with profitability, coming in above expectations.

Speaker #3: From a market standpoint, conditions remain as constructive as we've outlined previously. We continue to see no change in the underlying outlook. Demand for power is accelerating.

Speaker #3: The need for new supply is clear, and solar batteries and battery storage remain among the most competitive solutions to meet that demand. Against that backdrop, we are executing on our growth strategy.

George Hershman: supply is clear, and solar and battery storage remain among the most competitive solutions to meet that demand. Against that backdrop, we are executing on our growth strategy. We expanded the number of megawatts under O&M contracts during the quarter, further extending our long-term reoccurring revenue base.

Speaker #3: We expanded the number of megawatts under O&M contracts during the quarter. Further extending our long-term reoccurring revenue base. We also announced the exciting acquisition of Roberson Weight Electric, which strengthens our capabilities in utility infrastructure and supports our continued expansion into the regulated market.

George Hershman: We also announced the exciting acquisition of Roberson Waite Electric, which strengthens our capabilities in utility infrastructure and supports our continued expansion into the regulated market. That execution, combined with our differentiated value proposition, continues to drive backlog momentum. We ended the quarter with approximately $8.2 billion of backlog, providing strong visibility into future revenue. Finally, given the strength of our first quarter results, the evolving business mix, and additional projects reaching full notice to proceed, we are increasing our full year guidance for both adjusted gross profit and adjusted EBITDA. Overall, we believe the quarter underscores both the durability of the market and our continued ability to execute and capture that opportunity. As we turn to slide 5, we will give a quick reminder of who we are.

Speaker #3: That execution, combined with our differentiated value proposition, continues to drive backlog momentum. We ended the quarter with approximately $8.2 billion of backlog, providing strong visibility into future revenue.

Speaker #3: And finally, given the strength of our first quarter results, the evolving business mix, and additional projects reaching full notice to proceed, we are increasing our full-year guidance for both adjusted gross profit and adjusted EBITDA.

George Hershman: EBITDA. Overall, we believe the quarter underscores both the durability of the market and our continued ability to execute and capture that opportunity. As we turn to slide five, we will give a quick reminder of who we are.

Speaker #3: Overall, we believe the quarter underscores both the durability of the market and our continued ability to execute and capture that opportunity. As we turn to slide five, we will give a quick reminder of who we are.

Speaker #3: SOLV Energy is a leading provider of life-cycle infrastructure services to the U.S. power sector. With a strong position across utility-scale solar, storage, O&M, and high-voltage infrastructure.

George Hershman: SOLV Energy is a leading provider of life cycle infrastructure services to the US power sector, with a strong position across utility-scale solar, storage, O&M, and high voltage infrastructure. What differentiates us is our life cycle model. We support assets from initial design and build through long-term operations and future repowering opportunities, looking out over a 35-year horizon. That integrated approach drives deeper customer relationships and more durable revenue streams. We build and operate at scale, with over 21 GW constructed to date and nearly 22 GW under management. This is supported by a national footprint of a large, experienced workforce. That scale gives us strong visibility into both market demand and customer needs. Importantly, our model combines EPC execution with long-duration O&M contracts, allowing us to extend each project into a recurring long-term revenue opportunity.

Speaker #3: What differentiates us is our life-cycle model. We support assets from initial design and build through long-term operations and future repowering opportunities. Looking out over a 35-year horizon, that integrated approach drives deeper customer relationships, and more durable revenue streams.

Speaker #3: We build and operate at scale. With over 21 gigawatts constructed to date and nearly 22 gigawatts under management. This is supported by a national footprint of a large experienced workforce.

George Hershman: and nearly 22 GW under management. This is supported by a national footprint of a large, experienced workforce. That scale gives us strong visibility into both market demand and customer needs. Importantly, our model combines EPC execution with long-duration O&M contracts, allowing us to extend each project into a recurring long-term revenue opportunity.

Speaker #3: That scale gives us strong visibility into both market demand and customer needs. Importantly, our model combines EPC execution with long-duration O&M contracts. Allowing us to extend each project into a reoccurring long-term revenue opportunity.

Speaker #3: Overall, our breadth of capabilities, execution track record, and life-cycle approach position us well to capture continued growth, as investment in power infrastructure and grid reliability remains a national priority.

George Hershman: Overall, our breadth of capabilities, execution track record, and life cycle approach positions us well to capture continued growth as investment in power infrastructure and grid reliability remains a national priority. Moving to slide 6. The demand backdrop for our business remains compelling and continues to strengthen. We're seeing a step change in the US power demand, with load expected to grow approximately 28% over the next decade, well above the roughly 5% growth seen over the prior decade. That acceleration is being driven by structural trends including AI infrastructure build-out and the reshoring of industrial manufacturing capacity. At the same time, the expectations are for over $500 billion of investment in solar and battery storage over the same period, translating to roughly 430 GW of new capacity, about three times the level of the prior decade.

Speaker #3: Moving to slide six, the demand backdrop for our business remains compelling and continues to strengthen. We're seeing a step change in the U.S. power demand.

Speaker #3: With load expected to grow approximately 28% over the next decade, well above the roughly 5% growth seen over the prior decade, that acceleration is being driven by structural trends, including AI infrastructure build-out and the reshoring of industrial manufacturing capacity.

George Hershman: structural trends including AI infrastructure build-out and the reshoring of industrial manufacturing capacity. At the same time, the expectations are for over $500 billion of investment in solar and battery storage over the same period, translating to roughly 430 GW of new capacity, about three times the level of the prior decade.

Speaker #3: At the same time, the expectations are for over 500 billion of investment in solar and battery storage over the same period. Translating to roughly 430 gigawatts of new capacity.

Speaker #3: About three times the level of the prior decade. Battery storage, in particular, continues to scale rapidly, with growth in the mid-20% range annually. Importantly, that build-out creates a long-duration opportunity for our life-cycle model.

George Hershman: Battery storage, in particular, continues to scale rapidly, with growth in the mid 20% range annually. Importantly, that build-out creates a long-duration opportunity for our life cycle model. Each gigawatt deployed represents decades of ongoing operations, maintenance, upgrades, and repowering activity. Taken together, these dynamics reinforce our confidence in the long-term growth trajectory of the market and position SOL to participate across both the upfront build cycle and reoccurring life cycle opportunity that follows. Let's move to slide 7 for a reminder of our growth strategy. Against the market demand backdrop, we have a clear and disciplined growth strategy. First, we continue focusing on the fastest-growing segment of the US PV and storage market, projects above 200 MW, where our scale matters most and is resulting in ongoing growth in our backlog.

Speaker #3: We expect operating solar capacity to more than triple over the next decade, and each gigawatt deployed represents decades of ongoing operations, maintenance, upgrades, and repowering activity.

Speaker #3: Taken together, these dynamics reinforce our confidence in a long-term growth trajectory of the market and position SOLV to participate across both the upfront build cycle and the recurring life-cycle opportunity that follows.

Speaker #3: Let's move to slide seven for a reminder of our growth strategy. Against the market demand backdrop, we have a clear and disciplined growth strategy.

George Hershman: 7 for a reminder of our growth strategy. Against the market demand backdrop, we have a clear and disciplined growth strategy. First, we continue focusing on the fastest-growing segment of the US PV and storage market, projects above 200 MW, where our scale matters most and is resulting in ongoing growth in our backlog.

Speaker #3: First, we continue focusing on the fastest-growing segment of the U.S. PV and storage market. Projects above 200 megawatts, where our scale matters most. And as a resulting in ongoing growth in our backlog.

Speaker #3: Second, we are expanding our O&M business to deepen our reoccurring revenue base with nearly 22 gigawatts. Under contract. Third, we are leveraging our capabilities to move into adjacent markets where we can add immediate value.

George Hershman: Second, we are expanding our O&M business to deepen our recurring revenue base with nearly 22 GW under contract. Third, we are leveraging our capabilities to move into adjacent markets where we can add immediate value. Fourth, we are investing in innovation, digital tools, construction methods, and predictive maintenance to accelerate growth and expand margins. Finally, strategic acquisitions that strengthen our capabilities and extend our reach will be important to our growth strategy. In fact, as we turn to the next page, we can see that following the end of Q1, we announced the strategic acquisition of Roberson Waite Electric, which further advances our long-term positioning in the utility infrastructure. Roberson Waite Electric is a California-based high voltage and utility substation contractor founded in 1975 with deep, long-standing relationships across the major California utilities.

Speaker #3: Fourth, we are investing in innovation digital tools construction methods and predictive maintenance to accelerate growth and expand margins. And finally, strategic acquisitions that strengthen our capabilities and extend our reach will be important to our growth strategy.

Speaker #3: In fact, as we turn to the next page, we can see that following the end of the first quarter, we announced a strategic acquisition of Roberson Weight Electric.

George Hershman: following the end of Q1, we announced the strategic acquisition of Roberson Waite Electric, which further advances our long-term positioning in the utility infrastructure. Roberson Waite Electric is a California-based high voltage and utility substation contractor founded in 1975 with deep, long-standing relationships across the major California utilities.

Speaker #3: Which further advances our long-term positioning in the utility infrastructure. Roberson Weight Electric is a California-based high-voltage and utility substation contractor, founded in 1975, with deep, long-standing relationships across the major California utilities.

Speaker #3: The business brings an experienced workforce of approximately 100 employees and specialized capabilities in turnkey substation construction, as well as battery energy storage system deployments.

George Hershman: The business brings an experienced workforce of approximately 100 employees and specialized capabilities in turnkey substation construction, as well as battery energy storage system deployments. From a strategic standpoint, this transaction expands our utility infrastructure platform and accelerates our entry into the regulated utility market, an area where we see sustained investment driven by grid modernization and resilience, a resiliency priority. Importantly, RWE adds differentiated substation capabilities across construction, testing, and commissioning. This enhances our ability to offer a more complete life cycle-oriented solution alongside our existing solar, storage, and high voltage infrastructure services. We also see a strong cultural and operational fit. Their experienced team and established utility relationships are highly complementary to our platform and should provide incremental operating leverage as we scale these capabilities across the business.

Speaker #3: From a strategic standpoint, this transaction expands our utility infrastructure platform and accelerates our entry into the regulated utility market, an area where we see sustained investment driven by grid modernization and resilience priorities.

Speaker #3: Importantly, RWE adds differentiated substation capabilities across construction, testing, and commission. This enhances our ability to offer a more complete, life-cycle-oriented solution alongside our existing solar, storage, and high-voltage infrastructure services.

George Hershman: testing, and commissioning. This enhances our ability to offer a more complete life cycle-oriented solution alongside our existing solar, storage, and high voltage infrastructure services. We also see a strong cultural and operational fit. Their experienced team and established utility relationships are highly complementary to our platform and should provide incremental operating leverage as we scale these capabilities across the business.

Speaker #3: We also see a strong cultural and operational fit. Their experienced team and established utility relationships are highly complementary to our platform and should provide incremental operating leverage as we scale these capabilities across the business.

Speaker #3: From a transaction perspective, total consideration is approximately $45 million, subject to customary closing adjustments, and will be funded with cash on hand. We currently expect the transaction to close in the third quarter of 2026.

George Hershman: From a transaction perspective, total consideration is approximately $45 million, subject to customary closing adjustments and will be funded with cash on hand. We currently expect the transaction to close in Q3 2026. Thank you. Now I'll turn the call over to Chad to provide a summary of our Q1 results and updated guidance.

Speaker #3: Thank you. And now I'll turn the call over to Chad to provide a summary of our first quarter results and updated guidance.

Speaker #2: Thank you, George, and good morning, everyone. Let's start on slide 10. I'm pleased to report that our first quarter results reflect strong momentum across the business and demonstrate the continued execution capability of the SOLV team.

Chad Plotkin: Thank you, George. Good morning, everyone. Let's start on slide 10. I'm pleased to report that our Q1 results reflect strong momentum across the business and demonstrate the continued execution capability of the SOLV team. Q1 revenue was $677 million, an increase of 66% year over year. This growth was primarily driven by significant new construction revenue as our strong and growing backlog continues to convert into results. On gross profit, please note that on a go-forward basis, due to the treatment of the allocation of non-cash compensation and cost of revenue, including that which relates to legacy awards, we will be presenting an adjusted gross profit and margin figure to appropriately communicate our profitability.

Chad Plotkin: Thank you, George. Good morning, everyone. Let's start on slide 10. I'm pleased to report that our Q1 results reflect strong momentum across the business and demonstrate the continued execution capability of the SOLV team. Q1 revenue was $677 million, an increase of 66% year-over-year. This growth was primarily driven by significant new construction revenue as our strong and growing backlog continues to convert into results. On gross profit, please note that on a go-forward basis, due to the treatment of the allocation of non-cash compensation

Speaker #2: First quarter revenue was $677 million, an increase of 66% year over year. This growth was primarily driven by significant new construction revenue, as our strong and growing backlog continues to convert into results.

Speaker #2: On gross profit, please note that on a go-forward basis, due to the treatment of the allocation, a non-cash compensation in cost of revenue, including that which relates to legacy awards, we will be presenting an to appropriately communicate our profitability.

Chad Plotkin: and cost of revenue, including that which relates to legacy awards, we will be presenting an adjusted gross profit and margin figure to appropriately communicate our profitability.

Speaker #2: On that point, adjusted gross profit for the quarter was $124 million, reflecting adjusted gross margin of 18.4%. This performance was driven by productivity gains from continued strong project execution, seasonally favorable weather conditions across several key regions, and the recovery of reserves related to favorable settlements of outstanding change orders.

Chad Plotkin: On that point, adjusted gross profit for the quarter was $124 million, reflecting adjusted gross margin of 18.4%. This performance was driven by productivity gains from continued strong project execution, seasonally favorable weather conditions across several key regions, and the recovery of reserves related to favorable settlements of outstanding change orders. Adjusted EBITDA for Q1 was $93 million, representing an increase of 174% year-over-year. Adjusted EBITDA benefited from the favorable gross margin and reflects the increasing operating leverage in our business as we scale our revenue base. I do want to address the net loss of $27 million that you will see in our reported results. This was primarily due to a one-time non-cash expense of $52 million from the modification of legacy equity awards associated with the reorganization in connection with our IPO.

Speaker #2: Adjusted EBITDA for the first quarter was $93 million, representing an increase of 174% year over year. Adjusted EBITDA benefited from the favorable gross margin and reflects the increasing operating leverage in our business as we scale our revenue base.

Chad Plotkin: operating leverage in our business as we scale our revenue base. I do want to address the net loss of $27 million that you will see in our reported results. This was primarily due to a one-time non-cash expense of $52 million from the modification of legacy equity awards associated with the reorganization in connection with our IPO.

Speaker #2: I do want to address the net loss of $27 million that you will see in our reported results. This was primarily due to a one-time, non-cash expense of $52 million from the modification of legacy equity awards associated with the reorganization in connection with our IPO.

Speaker #2: This is non-recurring, non-cash item, and is not reflective of the underlying performance of the business. We have provided additional information around the composition of our GAAP SG&A in the appendix section of the presentation.

Chad Plotkin: This is non-recurring, non-cash item and is not reflective of the underlying performance of the business. We have provided additional information around the composition of our GAAP SG&A in the appendix section of the presentation. Before we move on, I just want to thank the entire SOLV team. These results are a direct reflection of your hard work, discipline, and commitment in the field and across the organization. Turn to the next slide to discuss our backlog. At the end of the Q1, backlog stood at approximately $8.2 billion. This represents 82% growth over the last 12 months and a continuation of the sequential net growth in each quarter since year-end 2024. This ongoing momentum underscores our commitment to excellence, the strength of our customer relationships, and the compelling value proposition we offer as a full lifecycle service provider.

Speaker #2: Before we move on, I just want to thank the entire SOLV team. These results are a direct reflection of your hard work, discipline, and commitment in the field and across the organization.

Speaker #2: Turn to the next slide to discuss our backlog. At the end of the first quarter, backlog stood at approximately $8.2 billion. This represents 82% growth over the last 12 months and a continuation of the sequential net growth in each quarter since year-end '24.

Chad Plotkin: 82% growth over the last 12 months and a continuation of the sequential net growth in each quarter since year-end 2024. This ongoing momentum underscores our commitment to excellence, the strength of our customer relationships, and the compelling value proposition we offer as a full lifecycle service provider.

Speaker #2: This ongoing momentum underscores our commitment to excellence, the strength of our customer relationships, and the compelling value proposition we offer as a full-life cycle service provider.

Speaker #2: On our backlog, there are a couple of important points for consideration we'd like to remind you of. First, quarterly bookings and net backlog changes will not be linear.

Chad Plotkin: On our backlog, there are a couple of important points for consideration we'd like to remind you of. First, quarterly bookings and net backlog changes will not be linear and may be lumpy due to the nature of our sales cycle and the timelines involved in moving from LNTP to FNTP. Additionally, our reported backlog does not include verbal awards or other business development activity that has not yet been contracted or reached the LNTP stage. On this point, the pipeline outlook for activity beyond what is reported remains robust. With that, let's turn to slide 12 for an update on our financial outlook. Today, I'm pleased to share that based on our strong first quarter performance, continued confidence in our outlook, and execution capabilities of our teams, we are updating our full year 2026 financial guidance.

Speaker #2: And may be lumpy due to the nature of our sales cycle and the timelines involved in moving from LNTP to FNTP. Additionally, our reported backlog does not include verbal awards or other business development activity that has not yet been contracted or reached the LNTP stage.

Speaker #2: And on this point, the pipeline outlook for activity beyond what is reported remains robust. So with that, let's turn to slide 12 for an update on our financial outlook.

Chad Plotkin: turn to slide 12 for an update on our financial outlook. Today, I'm pleased to share that based on our strong first quarter performance, continued confidence in our outlook, and execution capabilities of our teams, we are updating our full year 2026 financial guidance.

Speaker #2: Today, I'm pleased to share that based on our strong first quarter performance, continued confidence in our outlook, and execution capabilities of our teams, we are updating our full year 2026 financial guidance.

Speaker #2: Revenue guidance remains unchanged at $3.72 to $3.82 billion. We are updating our adjusted gross profit guidance to a range of $610 to $650 million, which accounts for the adjustment related to the allocation of non-cash comp expense.

Chad Plotkin: Revenue guidance remains unchanged at $3.72 to $3.82 billion. We are updating our adjusted gross profit guidance to a range of $610 to $650 million, which accounts for the adjustment related to the allocation of non-cash comp expense. This reflects an updated gross margin expectation with a range of 16.4% to 17%. We are also increasing our adjusted EBITDA guidance to a range of $435 to $455 million, up from our prior range of $400 to $420 million. Lastly, we are making progress on our key financial goals and objectives. First, we expect to deliver on our financial targets, and our Q1 results were an incredible start.

Speaker #2: This reflects an updated gross margin expectation, with a range of 16.4% to 17%. We are also increasing our adjusted EBITDA guidance to a range of $435 million to $455 million, up from our prior range of $400 million to $420 million.

Speaker #2: Lastly, we are making progress on our key financial goals and objectives. First, we expect to deliver on our financial targets and our first quarter results were an incredible start.

Chad Plotkin: we expect to deliver on our financial targets, and our Q1 results were an incredible start.

Speaker #2: Second, we are executing on creative growth opportunities to expand our service offerings, as evidenced by the Roberson Weight Electric acquisition. And third, we remain focused on driving ongoing professionalization as a public company, with continued progress towards Sarbanes-Oxley compliance.

Chad Plotkin: Second, we are executing on accretive growth opportunities to expand our service offerings, as evidenced by the Roberson Waite Electric acquisition. Third, we remain focused on driving ongoing professionalization as a public company with continued progress towards Sarbanes-Oxley compliance. With that, I'll turn it back to George for closing remarks.

Speaker #2: And with that, I'll turn it back to George for closing remarks.

Speaker #1: Thank you, Chad. And thank you all for joining us for our first quarter earnings call. For SOLV Energy, this reflects our continued progress as we build momentum and convert our strong foundations into results.

George Hershman: Thank you, Chad, and thank you all for joining us for our Q1 earnings call. For SOLV Energy, this reflects our continued progress as we build momentum and convert our strong foundations into results. We are pleased with our performance to date and energized by the opportunities ahead, including our continued focus on discipline and strategic M&A to enhance our capability and support long-term growth. I will end today with where it all begins, our incredibly passionate and dedicated people. I'm humbled by their passion, expertise, and consistent execution. They are committed to delivering value for all of our customers and stakeholders each and every day. With that, we are pleased to take your questions, I will hand it back over to the operator. Thank you.

Speaker #1: We are pleased with our performance to date and energized by the opportunities ahead. Including our continued focus on disciplined and strategic M&A to enhance our capability and support long-term growth.

Speaker #1: I will end today with where it all begins, our incredibly passionate and dedicated people. I'm humbled by their passion, expertise, and consistent execution. They are committed to delivering value for all of our customers, and stakeholders each and every day.

George Hershman: begins, our incredibly passionate and dedicated people. I'm humbled by their passion, expertise, and consistent execution. They are committed to delivering value for all of our customers and stakeholders each and every day. With that, we are pleased to take your questions, I will hand it back over to the operator. Thank you.

Speaker #1: With that, we are pleased to take your questions and I will hand it back over to the operator. Thank you.

Speaker #3: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad.

Operator: The first question comes from the line of Mark Strouse with JPMorgan. Please go ahead.

Speaker #3: A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your questions from the queue.

Speaker #3: For participants choosing speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull questions.

Speaker #3: The first question comes from the line of Mark Strauss with JP Morgan. Please go ahead.

Operator: The first question comes from the line of Mark Strouse with JPMorgan. Please go ahead.

Speaker #4: Hey, this is Michael Fairbanks on from Mark. Wondering if you guys could talk about the acquisition and just how it complements or adds to the existing capabilities from Spartan T&D, and then also would just be curious to hear how the acquisition factors into the new guidance.

Michael Fairbanks: Hey, this is Michael Fairbanks on for Mark. Wondering if you guys could talk about the acquisition and just how it complements or adds to the existing capabilities from Spartan T&D. Also would just be curious to hear how the acquisition factors into the new guidance. Thank you.

Speaker #4: Thank you.

George Hershman: I'll take that first. You know, from a strategic point of view, RWE brings a lot of expertise in high voltage and substation work, so it's complementary to our Spartan acquisition, and that really focuses on transmission and distribution. Yeah, RWE's expertise is in this substation and high voltage work itself, and really brings a, you know, complementary expertise to our existing high voltage services. Then Michael, on your other question, just given the timing of the transaction, and when we would expect to close, and obviously just the relative size of the acquisition, I'd say that it certainly informed how we looked at it. The dollar amounts are implicitly in the range, more than anything else.

Speaker #1: So I'll take that first. From a strategic point of view, RWE brings a lot of expertise in high-voltage and substation work. So it's complementary to our Spartan acquisition in that really focuses on transmission and distribution.

Speaker #1: And RWE's expertise is in this substation and high-voltage work itself. And really brings a complementary expertise to our existing high-voltage services.

Speaker #4: And then Michael, on your other question, just given the timing of the transaction, and when we would expect to close, and obviously just the relative size of the acquisition, I'd say that it certainly informed how we looked at it.

George Hershman: transaction, and when we would expect to close, and obviously just the relative size of the acquisition, I'd say that it certainly informed how we looked at it. The dollar amounts are implicitly in the range, more than anything else.

Speaker #4: But the dollar amounts are implicitly in the range. More than anything else, so.

Speaker #3: Great. And then maybe this is a follow-up. Backlog's grown for at least five consecutive quarters now. As you look at the pipeline, Chad, I think you mentioned continued strength.

Michael Fairbanks: Great. Maybe just as a follow-up, backlog's grown for at least 5 consecutive quarters now. As you look at the pipeline, Chad, I think you mentioned continued strength. Anything you can say about visibility into continued growth in the backlog or anything you see here in the pipeline? Thank you.

Speaker #3: But anything you can say about visibility into continued growth in the backlog or anything you see here in the pipeline? Thank you.

George Hershman: We are seeing, you know, continued growth in the pipeline and more opportunities that are converting throughout, you know, this quarter. I would expect to see continued growth in our backlog.

Speaker #1: We are seeing continued growth in the pipeline and more opportunities that are converting throughout this quarter. And so I would see I would expect to see continued growth in our backlog.

Speaker #3: Thank you.

Michael Fairbanks: Thank you.

Speaker #5: Thank you. Next question comes from the line of Julian Dumoulin-Smith with Jefferies. Please, go ahead.

Operator: Thank you. Next question comes from the line of Julien Dumoulin-Smith with Jefferies. Please go ahead.

Speaker #6: Hey, guys. Luke Finker on for Julian. Really nicely done on the quarter. Margins clearly were the standout. I saw you noted change orders and favorable weather as drivers there.

Luke Fenker: Hey, guys. Luke Fenker on for Julian. Really nicely done on the quarter. You know, margins clearly were the standout. I saw you noted change orders and favorable weather as drivers there, but can you help just parse out how much of the margin upside was in those items versus maybe structural bid margins on your contracts flowing through? Separately, you know, with the guide raise, should we think of this as like a new baseline for margins or more of a reflection of timing on those existing projects? Thanks.

Speaker #6: But can you help just parse out how much of the margin upside was in those items versus maybe structural bid margins on your contracts flowing through?

Speaker #6: And then separately, with the guide rate, should we think of this as a new baseline for margins or more of a reflection of timing on those existing projects?

Speaker #6: Thanks.

Speaker #4: Yeah. It's a good question. So maybe on a couple of them. On the change order one, I would look at that impact. It's the way to think about it is these were prior reserves that ultimately for settlement reasons and stuff.

George Hershman: Yeah, it's a good question. Maybe on a couple of them. On the change order one, I would look at that impact. It's, you know, the way to think about it is these were prior reserves that ultimately, for settlement reasons and stuff, I would look at that number sort of inside of the $10 million mark. I think on the rest of it's sort of a mixture of just project execution. I mean, if the way I would think about it is, we all are aware of sort of the conditions across the country through the winter and the end of winter. There's areas where, such as like the Southwest part of the country, where it was incredibly dry, which allows our teams to be more productive.

Speaker #4: I would look at that number sort of inside of the $10 million mark. I think on the rest of it, it's sort of a mixture of just project execution and on weather.

Speaker #4: I mean, the way I would think about it is, we all are aware of the conditions across the country through the winter and the end of winter.

George Hershman: through the winter and the end of winter. There's areas where, such as like the Southwest part of the country, where it was incredibly dry, which allows our teams to be more productive.

Speaker #4: And there's areas where such as the southwest part of the country, where it was incredibly dry. Which allows our teams to be more productive.

George Hershman: It helps reduce costs on sites 'cause you've got less in things like general condition costs that are needed. I mean, not to get in the weeds, but a simple example is you don't have to bring on as much salt to help in, you know, icier conditions and stuff like that. That certainly was really helpful overall. I think on your point on margins, you know, look, we're gonna report on overperformance. We don't forecast overperformance. You know, we see the opportunity, as we've talked about in the past, to do really well on our projects. Obviously, as we continue to expand the service business, that contribution is very accretive as we've talked in the past.

Speaker #4: It helps reduce cost on sites because you've got less in things like general condition costs that are needed. I mean, not to get in the weeds, but a simple example is you don't have to bring on as much salt to help in icier conditions and stuff like that.

Speaker #4: So that's certainly was really helpful overall. I think on your point on margins, look, we're going to report on overperformance. We don't forecast overperformance.

Speaker #4: We see the opportunity as we've talked about in the past to do really well on our projects. And then obviously, as we continue to expand the service business, that contribution is very accretive as we talked in the past.

George Hershman: expand the service business, that contribution is very accretive as we've talked in the past.

Speaker #4: And we're optimistic about other parts of the business that we've acquired recently where we'll see improved margin contribution as well coming out of those investments.

George Hershman: We're optimistic about other parts of the business that we've acquired recently, where we'll see improved margin contribution as well coming out of those investments.

Speaker #3: Awesome. Yeah. And separately, we've seen some mixed project updates from maybe some of your solar E&C peers. Just curious on whether you're seeing anything similar across your portfolio whether that's scheduling delays, cost pressure, maybe even tax equity issues at the counterparty level on any of your projects.

Luke Fenker: Awesome. Yeah, separately, you know, we've seen some mixed project updates from maybe some of your solar E&C peers. Just curious on whether you're seeing anything similar across your portfolio, whether that's scheduling delays, cost pressure, or maybe even tax equity issues at the counterparty level on any of your projects. Thanks.

Speaker #3: Thanks.

George Hershman: We aren't seeing any, you know, specific issues that you addressed. You know, obviously across the entire business, we have, you know, we have pressures on pricing and schedule. I will just, you know, say that, you know, our teams continue to execute and we are seeing the outperformance in a number of areas reflecting in our results. You know, we obviously understand there's, you know, that is part of our business and we have to build a robust infrastructure to be able to manage and mitigate those risks.

Speaker #4: We aren't seeing any specific issues that you addressed. Obviously, across the entire business, we have pressures on pricing and schedule. I will just say that our teams continue to execute and we are seeing the outperformance in a number of areas reflecting in our results.

Speaker #4: But we obviously understand there's that is part of our business. And we have to build a robust infrastructure to be able to manage and mitigate those risks.

Speaker #3: I'll leave it there. Hey, guys. Thank you so much. All the best.

Luke Fenker: I'll leave it there. Hey guys, thank you so much. All the best.

Speaker #4: Thanks, Michael.

George Hershman: Thanks, Luke.

Speaker #5: Thank you. Next question comes from the line of John Windham with UPS. Please go ahead.

Operator: Thank you. Next question comes from the line of John Wyndham with UBS. Please go ahead.

Speaker #3: Perfect. Congratulations on the result, and thanks for taking the questions. I just had sort of a big-picture question. I'm just wondering, if you're one of the larger APC companies working on storage in the United States—there have been a number of announcements from the auto OEMs, namely General Motors, Ford, SK, and Honda.

John Wyndham: Perfect. Congratulations on the result, and thanks for taking the questions. I just had sort of a big picture question. I'm just wondering, you know, you're one of the larger EPC companies working on storage in the United States. There have been a number of announcements from the auto OEMs, namely General Motors, Ford, SK, Honda, and LG with their legacy Stellantis JV, converting battery factories in the United States from EV technologies to LFP for stationary storage. I'm just wondering if you've already started having conversations and how you would think about having the benefits of having more available batteries in the United States. Thanks.

Speaker #3: And LG with their legacy Stellantis. JV converting battery factories in the United States from EV technologies to LFP for stationary storage. I'm just wondering, if you've already started having conversations and how you would think about having the benefits of having more available batteries in the United States?

John Wyndham: you would think about having the benefits of having more available batteries in the United States. Thanks.

Speaker #3: Thanks.

George Hershman: Yeah, thanks for the question. We think it's wonderful. It's a great tailwind for our business. Honestly, what the US grid and infrastructure needs is a robust supply of batteries and energy storage. It only furthers the opportunities to place storage in, you know, urban grid locations, areas where it's hard to get transmission, and continues to drive opportunities within our PV and storage business. A robust supply chain is really a strong tailwind for our business.

Speaker #1: Yeah. Thanks for the question. We think it's wonderful. It's a great tailwind for our business. And honestly, what the US grid and infrastructure needs is a robust supply of batteries and energy storage.

Speaker #1: It only furthers the opportunities to place storage in urban grid locations—areas where it's hard to get transmission—and continues to drive opportunities within our PV and storage business.

Speaker #1: So a robust supply chain is really a strong tailwind for our business.

Speaker #3: Maybe just as a quick follow-up, just to be very specific, are those players I mentioned, namely the large auto OEMs, already in the market having conversations with SOLV?

John Wyndham: Maybe just as a quick follow-up, just to be very specific. Are those players I mentioned, namely the large auto OEMs, already in the market having conversations with SOLV?

Speaker #1: So, the majority of our projects, the IPPs bring the energy storage technology, but I know that those conversations are being had by our customers.

George Hershman: The majority of our projects, the IPPs bring the energy storage technology. I know that those conversations are being had by our customers and, with our engineering teams, we are working with our customers to ensure that we can, you know, project with OEM technology from automakers.

Speaker #1: And with our engineering teams, we are working with our customers to ensure that we can deliver project with OEM technology from automakers.

Speaker #3: Perfect. George, Chad, thanks so much for doing the call.

John Wyndham: Perfect. George Chad, thanks so much for joining the call.

Speaker #4: You bet.

George Hershman: You bet.

Speaker #5: Thank you. Next question comes on the line of Philip Shen with the Roth Capital Partners. Please go ahead.

Operator: Thank you. Next question comes from the line of Philip Shen with the Roth Capital Partners. Please go ahead.

Speaker #6: Hey, guys. Congrats on the great quarter. Wanted to check in with you guys on the permitting freeze. We wrote in mid-November last year that we could see some reprieve and we got a bunch of projects unblocked.

Philip Shen: Hey, guys. Congrats on the great quarter. Wanted to check in with you guys on the permitting freeze. You know, we wrote in mid-November last year that we could see some reprieve, and we got a bunch of projects unblocked and moving forward. Since then, my sense is, things are slowing down. I was wondering how that plays out. I know George, you talked about how you expect a backlog to continue to grow. What are your thoughts on the outlook on this topic? Thanks.

Speaker #6: And moving forward. But since then, my sense is things are slowing down. And so I was wondering how that plays out. I know, George, you talked about how you expect a backlog to continue to grow.

Speaker #6: What are your thoughts on the outlook on this topic? Thanks.

Speaker #1: Thanks, Phil. Appreciate the question. Yes. As we've spoke about in the past, we had some significant projects that had nexus to federal government permits.

George Hershman: Thanks, Phil. Appreciate the question. Yes, as we've spoke about in the past, we had some significant projects that had nexus to federal government permits. At the end of the year, those projects got approved and released, one on BLM land and one with a federal interconnect requirement. Both of those are proceeding. Both of those are near gigawatt scale. That was exciting. You know, our current backlog has limited to no exposure to federal permitting. You know, we feel very strong on the projects currently in backlog and the pipeline. It is something that we're watching, obviously working closely with our industry partners and associations, to work through, you know, any government freeze around permitting.

Speaker #1: At the end of the year, those projects got approved and released one on BLM land and one with a federal interconnect requirement. Both of those are proceeding.

Speaker #1: Both of them are near gigawatt scale. So that was exciting and our current backlog has limited to no exposure to federal permitting. And so we feel very strong on the projects currently in backlog and the pipeline.

Speaker #1: But it is something that we're watching obviously working closely with our industry partners and associations to work through any government freeze around permitting. It's a huge impediment to seeing these reaching the energy goals that we need to.

George Hershman: It's a, you know, it's a huge impediment to seeing these, you know, reaching the energy goals that we need to. We're working together on it, but we watch it very, very closely, right? So that we limit or minimize at all costs our exposure to federal permitting on solar and storage projects.

Speaker #1: And so we're working together on it. But we watch it very, very closely, right, so that we limit or minimize at all costs our exposure to federal permitting on solar and storage projects.

Speaker #6: Got it. Okay. Thank you. And then shifting over to one of your points in your growth strategy, number four was harness innovation to grow faster and increase margins.

Philip Shen: Got it. Okay. Thank you. Shifting over to one of your points in your growth strategy. Number 4 was harness innovation to grow faster and increase margins. Was wondering if you could elaborate a little bit more on that, specifically as it relates to robots. What's your sense in terms of, you know, when you could start to deploy robots more in the field to make your labor even more efficient? You know, maybe it's more of a 2027 timeframe, but could we start to see GW of installations in that timeframe? What is the impact on margins?

Speaker #6: I was wondering if you could elaborate a little bit more on that, specifically as it relates to robots. And so what's your sense in terms of when you could start to deploy robots more in the field to make your labor even more efficient?

Speaker #6: And maybe it's more of a 27 time frame, but could we start to see gigawatts of installations in that time frame? And then what is the impact on margins?

Speaker #6: I mean, given the testing that you've done, if you've done any thus far, could we see hundreds of basis points of improvement from these robots that might be a kind of one-time upfront capex with, again, providing a lot of leverage for the existing highly trained labor force that you guys currently have?

Philip Shen: I mean, given the testing that you've done, if you've done any thus far, could we see, you know, hundreds of basis points of improvement from these robots that might be a kind of one-time upfront CapEx with, you know, again, providing a lot of leverage for the existing highly trained labor force that you guys currently have? Thanks.

Speaker #6: Thanks.

Speaker #1: Yes. We are using robotics today on a number of projects. So we're working with a number of the manufacturers of anything from factories out on site where they will build pre-built rows.

George Hershman: Yes, you know, we are using robotics today on a number of projects. We're working with, you know, a number of the manufacturers of, you know, anything from, you know, factories out on site, where they will build pre-built rows and move them into locations. As well as, you know, the module install robots that are in the market and, you know, autonomous pile driving. We're doing it all, working very closely with different manufacturers to see what best, you know, optimizes our workforce, drives speed of installation. I would say that, you know, we're gonna continue to do that.

Speaker #1: And move them into locations as well as the module install robots that are in the market and pile drop autonomous pile driving. We're doing it all.

Speaker #1: Working very closely with different manufacturers to see what best optimizes our workforce drives speed of installation. And so I would say that we're going to continue to do that.

Speaker #1: We have a large and robust innovation team. And invest in that area. To ensure that we can continue to deliver at the scale and demand that's necessary.

George Hershman: We have a large and, you know, robust innovation team and invest in that area to ensure that we can continue to deliver at the scale and demand that's necessary because we're being asked to build faster every day. To do that, we need to use robotics, optimize our workforce, optimize how we handle logistics. All those things are in process and, quite frankly, part of our execution strategy today and, you know, are driving strong results in a number of areas.

Speaker #1: Because we're being asked to build faster every day and to do that, we need to use robotics optimize our workforce optimize how we handle logistics all those things are in process.

Speaker #1: And quite frankly, part of our execution strategy today and our driving strong results in a number of areas.

Speaker #6: Great. Thanks, George. I'll pass it on.

Philip Shen: Great. Thanks, George. I'll pass it on.

Speaker #1: Thanks, Phil.

George Hershman: Thanks, Phil.

Speaker #5: Thank you. Next question comes on the line of Ben Callow with Baird. Please go ahead.

Operator: Thank you. Next question comes from the line of Ben Kallo with Baird. Please go ahead.

Speaker #7: Hey, thanks for taking my question. Congrats. And welcome, Mike. Can you guys give us any kind of shaping of backlog and just as we look into next year, how much of that of 27 is underpinned by current backlog?

Ben Kallo: Hey, thanks for taking my question. Congrats, and welcome, Mike. Can you guys give us any kind of shaping of backlog and just, you know, as we look into next year, you know, how much of, you know, that of 2027 is underpinned by current backlog? Then I have a follow-up.

Speaker #7: And then I have a follow-up.

Speaker #1: Yeah. I think to answer your question, I mean, look, I think if you we've talked in the past. We have a slide in the appendix that gives a little bit of a characterization of just sort of the makeup of backlog.

George Hershman: Yeah, I think to answer your question, I mean, look, I think we've talked in the past, we have a slide in the appendix that gives a little bit of a characterization of just sort of the makeup of backlog. Obviously because implicitly we've got an increase in backlog, it means you have a lot more that have gone into LNTP. We've talked about backlog as sort of a 12 to 30-month window. Some projects move faster depending on where they are and what region. Some might lag a little bit.

Speaker #1: And obviously, because implicitly, we've got an increase in backlog, it means you have a lot more that have gone into LNTP. We've talked about backlog as sort of a 12 to 30-month window.

Speaker #1: Some projects move faster depending on where they are in what regions. Some might lag a little bit. So obviously, Ben, I mean, if you look at financial guidance and revenue on where we are with what we have signed and what we expect to convert, through the end of the year, and you look at the balance of that, I mean, that should hopefully give you a sense of kind of where we are in current origination.

George Hershman: Obviously, Ben, I mean, if you look at financial guidance and revenue on where we are with what we have signed and what we expect to convert through the end of the year, and you look at the balance of that, I mean, that should hopefully give you a sense of kind of where we are in current origination without me getting in front of, like, providing, you know, a 2027 expectation. Look, we're excited about where we are as a business. Backlog is robust. We're seeing a lot of momentum, as George said. You know, we're obviously gonna continue to allocate capital prudently across the business and drive growth in the business.

Speaker #1: Without me getting in front of providing a '27 expectation. But look, we're excited about where we are at the business. Backlog is robust. We're seeing a lot of momentum, as George said.

Speaker #1: We're obviously going to continue to allocate capital prudently across the business. And drive growth in the business.

Speaker #7: Okay. Great. Just on the energy storage market, could you just talk about your interest in doing standalone storage? And you guys talked about how strong that market is.

Ben Kallo: Okay, great. Just on the energy storage market, could you just talk about your interest in doing standalone storage? You guys talked about how strong that market is and just how we should think about that just on a go-forward basis, in addition to solar plus storage. Thank you, guys.

Speaker #7: And just how we should think about that just on a go-forward basis in addition to Solar Plus storage. Thank you, guys.

Speaker #1: Yes. We are very excited about the growth in standalone storage. And the amount of standalone storage that we're currently doing. And we see in the pipeline.

George Hershman: Yes, you know, we're very excited about the growth in standalone storage and the amount of standalone storage that we're currently doing and we see in the pipeline. One of the, you know, acquisition thesis around RWE was that they bring a lot of expertise in battery storage, in high density, you know, population where energy standalone storage is best served. Honestly, is in areas where there is load demand and difficulty with bringing in transmission. If you think about, you know, urban centers and how do you get more energy where it's needed is battery storage at, you know, existing substations in urban areas.

Speaker #1: One of the acquisition thesis around RWE was that they bring a lot of expertise in battery storage in high-density population where energy standalone storage is best served.

Speaker #1: Honestly, it's in areas where there is load demand and difficulty with bringing in transmission. If you think about urban centers and how do you get more energy where it's needed is battery storage at existing substations in urban areas.

Speaker #1: RWE has expertise in those areas. And so adding that to our overall platform of understanding how to deliver energy storage at scale and their expertise of doing it in high-density areas drives just a bigger opportunity for us in standalone storage.

George Hershman: RWE has expertise in those areas, you know, adding that to our overall platform of understanding how to deliver energy storage at scale and their expertise of doing it in high-density areas, drives just a bigger opportunity for us in standalone storage. We're excited about it. Back to the earlier question about the, you know, supply chain growing and, you know, robust manufacturing in the US further drives that market.

Speaker #1: So we're excited about it. Back to the earlier question about the supply chain growing and robust manufacturing in the US. Just further drives that market.

Speaker #5: Ms. Callow, are you done with the questions?

Operator: Mr. Kallo, are you done with the questions?

Speaker #7: Oh, yes. Thank you, guys.

Speaker #6: Thanks, Ben.

Ben Kallo: Oh, yes. Thank you, guys.

Speaker #1: Great. Thanks, Ben.

Speaker #5: Thank you. Next question comes on the line of Nick Amikuti with Evercore ISI. Please go ahead.

George Hershman: Thanks, Ben.

George Hershman: Great. Thanks, Ben.

Chad Plotkin: Great. Thanks, Ben.

Operator: Thank you. Next question comes from the line of Nicholas Amicucci with Evercore ISI. Please go ahead.

Speaker #8: Hey, George. Hey, Chad. How are you guys? Just I want to kind of prod a little bit on the backlog again. Just as we kind of think about the margin profile and sorry if I missed this.

Nicholas Amicucci: Hey, George. Hey, Chad. How are you guys? Just I wanted to kind of prod a little bit on the backlog again. Just as we kind of think about the margin profile, and sorry if I missed this, the margin profile within the backlog and kind of pricing associated with that, just how is that trending or is it similar? Like, should we be kind of thinking about that still like the long-term adjusted gross margin right around that 14, 15% level over time or are we seeing kind of upward trends in that?

Speaker #8: The margin profile within the backlog and the kind of pricing associated with that—just how is that trending? Or is it similar? Should we be thinking about that as still the long-term adjusted gross margin, right around that 14 to 15 percent level over time?

Speaker #8: Or is that kind of are we seeing kind of upward trends in that?

Speaker #1: Yeah. So I think, Nick, maybe to follow up the point, I think, one, when we think about our collective business, I think we've been very consistent that plus 15% given all the contribution of other businesses how we think about budgeted margins.

George Hershman: Yeah. I think, Nick, maybe to follow up the point, you know, I think, 1, when we think about our collective business, I think we've been very consistent that +15%, given all the contribution of other businesses, how we think about budgeted margins. I wanna emphasize the fact on what I've said earlier, which is, you know, we report on overperformance. We don't forecast that. That's an important distinction. You know, we continue to drive in our origination to optimize, you know, profit delivery across our projects. You know, I think we're certainly demonstrating in the performance of our projects on where we can drive more efficiency than, say, something that we might have underwritten.

Speaker #1: I want to emphasize the fact on what I said earlier, which is we report on overperformance. We don't forecast that. And that's an important distinction.

Speaker #1: So we continue to drive in our origination to optimize profit delivery across our projects. And I think we're certainly demonstrating in the performance of our projects on where we can drive more efficiency than, say, something that we might have underwritten.

Speaker #1: And that, candidly, is a benefit across the board, because when we're delivering projects that are more profitable, we're generally bringing projects online faster for our customers.

George Hershman: That candidly is a benefit across the board because when we're delivering projects, better, more profitably, we're generally bringing projects online faster for our customers, which is a huge advantage for them as well. We're just optimistic about the ongoing performance of what we're seeing and the overall mix of the contribution from various parts of the business.

Speaker #1: Which is a huge advantage for them as well. So we're just optimistic about the ongoing performance of what we're seeing and the overall mix of the contribution from various parts of business.

Speaker #8: Perfect. And then kind of dovetailing with that too, just if we could just kind of look at the repowering opportunity. And just given you guys outlined 21 gigawatts built since 2008.

Nicholas Amicucci: Perfect. Kind of dovetailing with that too, just if we could, just kind of look at the repowering opportunity. Given, you know, you guys outlined 21 GW built since 2008, what portion of the installed fleet is now or kind of approaching that repowering range, if you're able to provide it? How we should think about the margin profile of that, of those repowering projects relative to just a greenfield EPC?

Speaker #8: What portion of the install fleet is now or kind of approaching that repowering range if you're able to provide it? And just how we should think about the margin profile of that of those repowering projects relative to just the greenfield BPC.

Speaker #1: Well, Nick, we're really getting into that stage. In the industry, if you think about our early stage utility-scale projects, they're just hitting their kind of half-life.

George Hershman: Well, Nick, we're really getting into that stage in the industry. If you think about our early-stage utility-scale projects, they're, you know, they're just hitting their kind of half-life. We're starting to see those repowering opportunities because of, you know, technology failures or, you know, weather damage and other things that are causing significant rework within the fleet. I think that we are really in the early days of, you know, true repowering as we see that, you know, power density is becoming so much higher than it has just in the recent past and being able to, you know, get more megawatt hours out of a, you know, acre of land is gonna become more and more valuable as you think about, you know, the interconnection value.

Chad Plotkin: Well, Nick, we're really getting into that stage in the industry. If you think about our early-stage utility-scale projects, they're, you know, they're just hitting their kind of half-life. We're starting to see those repowering opportunities because of, you know, technology failures or, you know, weather damage and other things that are causing significant rework within the fleet. I think that we are really in the early days of, you know, true repowering as we see that, you know, power density is becoming so much higher than it has just in the recent past and being able to, you know, get more megawatt hours out of a, you know, acre of land is gonna become more and more valuable as you think about, you know, the interconnection value.

Speaker #1: And so we're starting to see those repowering opportunities because of technology failures or weather damage and other things that are causing significant rework within the fleet.

Speaker #1: But I think that we are really in the early days of true repowering. As we see that power density is becoming so much higher than it has just in the recent past and being able to get more megawatt hours out of a acre of land is going to become more and more valuable as you think about the interconnection value.

Speaker #1: I think when you think about immediate repowering in quotes of repowering is probably battery augmentation to existing solar plants. We're starting to see that in many areas where solar has been built over the last decade without energy storage.

George Hershman: I think when you think about immediate repowering, you know, in, you know, in quotes of repowering, is probably battery augmentation to existing solar plants. We're starting to see that in many areas where solar has been built over the last decade without energy storage, and there's a good opportunity to add energy storage to, you know, to the optimization of a, of a power plant. I think that's where we're gonna see it initially, outside of just, you know, large scale technology upgrades that are necessary to drive plant performance.

Chad Plotkin: I think when you think about immediate repowering, you know, in, you know, in quotes of repowering, is probably battery augmentation to existing solar plants. We're starting to see that in many areas where solar has been built over the last decade without energy storage, and there's a good opportunity to add energy storage to, you know, to the optimization of a, of a power plant. I think that's where we're gonna see it initially, outside of just, you know, large scale technology upgrades that are necessary to drive plant performance.

Speaker #1: And there's a good opportunity to add energy storage to the optimization of a power plant. So I think that's where we're going to see it initially.

Speaker #1: Outside of just large-scale technology upgrades that are necessary to drive plant performance.

Speaker #8: Makes sense. Thanks, George. Thanks, Chad. You good?

Nicholas Amicucci: Makes sense. Thanks, George. Thanks, Chad.

Speaker #5: Thank you. Next question comes on the line of Mark Jarvey with CIBC Capital Markets. Please go ahead.

George Hershman: You bet.

Operator: Thank you. Next question comes from the line of Mark Jarvi with CIBC Capital Markets. Please go ahead.

Speaker #9: Yeah. Thanks for the great update today. Just maybe you guys could comment on the sort of mix on the backlog additions or maybe expand to the projects at the verbal or stage just in terms of solar versus battery split and markets.

Mark Jarvi: Yeah, thanks for the great update today. Just maybe you guys could comment on the sort of mix on the backlog additions or maybe expand to the projects at the verbal awards stage, just in terms of solar versus battery split and markets, just where you guys are on the T&D side of things as well.

Speaker #9: Just where you guys are on the T&D side of things as well.

Speaker #1: Yeah. So on the backlog side, I think as of the we're in and around like 1.9 billion of the backlog associated to hybrid or batteries battery projects standalone.

George Hershman: Yeah. On the backlog side, I think as of the we're in and around like $1.9 billion of the backlog, associated to hybrid or battery projects standalone. We're seeing, you know, ongoing momentum there. It just has to do with timing and stuff when we originate deals, which is great. I think we've got the mix in the appendix, as you've seen before. I think on the T&D side, I mean, look, that is an area that we're certainly expecting to see grow over time. It's not what I would call a materially significant part of backlog at this juncture. We've got our investment in Spartan. You know, we haven't closed the RWE deal yet, but that's definitely an area.

Speaker #1: We're seeing ongoing momentum there. It just has to do with timing and stuff when we originate deals. Which is great. I think we've got the mix in the appendix as you've seen before.

Speaker #1: I think on the T&D side, I mean, look, that is an area that we're certainly expecting to see grow over time. It's not what I would call a materially significant part of backlog at this juncture.

Speaker #1: We've got our investment in Spartan we haven't closed the RWE deal yet. But that's definitely an area. But I mean, look, the bulk of the backlog, as you can see, is the core business.

George Hershman: I mean, look, the bulk of the backlog, as you can see, is the core business, just given what the ongoing scale and momentum that we have.

Speaker #1: Just given what the ongoing scale and momentum that we have.

Speaker #9: Good to hear. And then just on acquisitions, I know RWE itself is not a big transaction. But you look ahead and maybe do more of these deals.

Mark Jarvi: Good to hear. Just on acquisitions, I know RWE itself is not a big transaction, as you look ahead and maybe do more of these deals, how do you see the integration in terms of impact to margins during the first year? Can they be neutral? Can they actually be slightly positive given operating leverage you can bring to bear? When you think about how this impacts sort of growth rates post-integration, are you looking for businesses that enhance the organic growth rate, or is it more about breadth and resiliency of the growth across the platform?

Speaker #9: How do you see the integration in terms of impact to margins within the first year? Can they be neutral? Can they actually be slightly positive given operating leverage you can bring to bear?

Speaker #9: And then when you think about how this impacts sort of growth rates post-integration, are you looking for businesses that enhance the organic growth rate?

Speaker #9: Or is it more about breadth and resiliency of the growth across the platform?

Speaker #1: I think it's sort of a combination of both. I think we talked about the M&A strategy previously. There's a combination of using M&A as a vehicle to expand the breadth of services we can provide or continue to expand our ability to do more self-perform work.

George Hershman: I think it's sort of a combination of both. I think we talked about the M&A strategy previously. There's a combination of using M&A as a vehicle to expand the breadth of services we can provide or continue to expand our ability to do more self-perform work. We are definitely looking to acquire businesses that have a growth vector to them, if they're, I don't know if that answered your question. There was the first part of your question, forgive me.

Speaker #1: But we are definitely looking to acquire businesses that have a growth vector to them. It's there. I don't know if that answered your question.

Speaker #1: And there was the first part of your question, forgive me.

Speaker #9: Yeah. It was just on integration of sort of medium-sized transactions. If they'd be sort of margin neutral or can you actually drive efficiencies in the first year?

Mark Jarvi: Yeah, it was just on integration of sort of medium-sized transactions, if they'd be sort of margin neutral or can you actually drive efficiencies in the first year? Yeah.

Speaker #9: Yeah.

Speaker #1: Well, look, I think obviously doing things accretive is pretty important for underwriting. I think the integration strategy is it's always evolving. And I think every transaction will have sort of unique characteristics to it.

George Hershman: Well, look, I think obviously doing things accretive is pretty important for underwriting. I think the integration strategy is, you know, it's always evolving, and I think every transaction will have sort of unique characteristics to it. We certainly want to drive ways to bring sort of operating leverage to the platform, we also wanna be cognizant of doing that in a means that doesn't in any way compromise the type of businesses that we're acquiring and making sure that they can continue to perform to our underwrite. We definitely put consideration into ways that we can leverage things like shared service across. There's no reason to, like, acquire businesses and have redundancy in sort of certain back office functions. There's a lot of things that we can do, and we look at that relative to our underwriting criteria.

Speaker #1: We certainly want to drive ways to bring sort of operating leverage to the platform. But we also want to be cognitive doing that in a means that doesn't in any way compromise the type of businesses that we're acquiring and making sure that they can continue to perform to our underwrite.

Speaker #1: But we definitely put consideration into ways that we can leverage things like shared service across. There's no reason to acquire businesses and have redundancy and sort of certain back-office functions.

Speaker #1: So there's a lot of things that we can do. And we look at that relative to our underwriting criteria. And our—

Speaker #9: Sounds good.

Speaker #1: Our M&A strategy is to ensure that we have that we're working with companies that will enhance our overall service offering. So ensuring that RWE can provide services to our existing customer base and services that we need to deliver on our life cycle approach of being able to provide services across the entire life cycle of a project.

Mark Jarvi: Sounds good.

Mark Jarvi: You know, our M&A strategy is to ensure that we're working with companies that will enhance our overall service offering. Ensuring that, you know, RWE can provide services to our existing customer base and services that we need to deliver on our, you know, on our life cycle approach of being able to provide services across the entire life cycle of a project. That from an operational integration standpoint is always a key factor. Spartan is, you know, building transmission for projects where we are building the solar and PV. I expect that RWE will be doing substation and substation services for projects where we're doing storage or PV. From an operational integration standpoint, it is absolutely part of our strategy.

Chad Plotkin: You know, our M&A strategy is to ensure that we're working with companies that will enhance our overall service offering. Ensuring that, you know, RWE can provide services to our existing customer base and services that we need to deliver on our, you know, on our life cycle approach of being able to provide services across the entire life cycle of a project. That from an operational integration standpoint is always a key factor. Spartan is, you know, building transmission for projects where we are building the solar and PV. I expect that RWE will be doing substation and substation services for projects where we're doing storage or PV. From an operational integration standpoint, it is absolutely part of our strategy.

Speaker #1: So that, from an operational integration standpoint, is always a key factor. Spartan is building transmission for projects. We are building the solar and PV.

Speaker #1: I expect that RWE will be doing substation and substation services for projects where we're doing storage or people are PV. From an operational integration standpoint, it is absolutely part of our strategy.

Speaker #9: Just on that last comment, George, have you done a lot of projects in parallel with RWE before?

Mark Jarvi: Just on that last comment, George, have you done a lot of projects in parallel with RWE before?

Speaker #1: Not directly with RWE. But adjacent to RWE, we've known of them and the company for quite a while. And so we're looking forward to them supporting some of our projects in California where they have significant expertise.

George Hershman: Not directly with RWE, but adjacent to RWE. We've known of them and the company for quite a while, and so we're looking forward to them supporting some of our projects in California where they have significant expertise.

Chad Plotkin: Not directly with RWE, but adjacent to RWE. We've known of them and the company for quite a while, and so we're looking forward to them supporting some of our projects in California where they have significant expertise.

Speaker #9: Sounds good. Thanks for your time today.

Speaker #1: Good.

Mark Jarvi: Sounds good. Thanks for your time today.

Speaker #5: Thank you. Next question comes on the line of Joseph Osher with Guggenheim Securities. Please go ahead.

George Hershman: Sure.

Operator: Thank you. Next question comes from the line of Joseph Osha with Guggenheim Securities. Please go ahead.

Speaker #8: Thank you. Good morning, folks. Two questions for you. First, I'm wondering if you can just let us know roughly what the current storage attach rate is on projects.

Joseph Osha: Thank you. Good morning, folks. 2 questions for you. First, I'm wondering if you can just let us know roughly what the current storage attach rate is on projects. I know we've talked about that before. Secondly, thinking about freestanding storage, obviously you're doing lots of front-of-the-meter stuff. I'm curious whether you've looked at the behind-the-meter opportunity. There's lots and lots of discussion around storage for data centers, whether that might be something you're beginning to look at. Thank you.

Speaker #8: I know we've talked about that before. And then secondly, thinking about freestanding storage, obviously, you're doing lots of front-of-the-meter stuff. I'm curious whether you've looked at the behind-the-meter opportunity.

Speaker #8: There's lots and lots of discussion around storage for data centers—whether that might be something you're beginning to look at. Thank you.

Speaker #1: I don't know that we have an attach rate here. With energy storage to PV, because usually those projects are engineered together and kind of get awarded together.

George Hershman: I don't know that we have an attach rate, with, you know, energy storage to PV because, you know, usually those projects are engineered together and kind of get awarded together.

Speaker #1: So, I don't know that we have a distinct attach rate, because we never really see PV being awarded to one EPC and then energy storage on the same project being awarded to someone else.

Joseph Osha: Yeah.

George Hershman: I don't know that we have a distinct attach rate because we never really see, you know, PV being awarded to one EPC and then energy storage on the same project being awarded to someone else. That just isn't an efficient way of doing it. It'd be hard to have a, you know, really follow an attach rate other than when we're building PV and storage, we're building PV and storage. And doing both.

Speaker #1: That just isn't an efficient way of doing it. So it would be hard to have a really follow an attach rate other than when it's when we're building PV and storage, we're building PV and storage.

Speaker #8: Well, let me perhaps let me try asking it a different way. If I look at your portfolio of business, how much of it is solar-only versus solar plus storage?

Joseph Osha: Well, let me perhaps try asking it a different way. If I look at your portfolio of business, how much of it is solar only versus solar plus storage?

Speaker #1: Yeah. So I think we talked about it. I think for the. Coming out of the first quarter, I just like to look at it relative to backlog.

George Hershman: Yeah. I think we talked about it. I think, you know, coming out of the first quarter, I just like to look at it relative to backlog. Within backlog, we have like $1.95 billion of our backlog is attributed. I think I said $1.9 earlier. Forgive me, I'm looking at my notes. It's roughly $1.95 billion of backlog associated to standalone or hybrid projects against our, you know, the number we just reported. That. It's almost aligned with what we had previously. You know, we're seeing sort of a consistent, at least out of the gate, a more or less, I hate to use the word book-to-bill, but that's a good way to think about it on what we saw, you know, since last year.

Speaker #1: So within backlog, we have like 1.95 billion of our backlog is attributed to I think I said 1.9 earlier. Forgive me. I'm looking at my notes.

Speaker #1: It's roughly 1.95 billion of backlog associated to standalone or hybrid projects. Against our the number we just recorded. That compares it's almost aligned with what we had previously.

Speaker #1: So we're seeing sort of a consistent at least out of the gate, a more or less I hate to use the word book to bill, but that's a good way to think about it on what we saw since last year.

Speaker #1: So we're seeing good attach in the sense that projects that are coming our way are with customers are these kind of hybrid projects. And we're going to expect that to continue, especially as the type of power needs and many of the markets that our customers are building are looking for broader firming kind of solutions.

George Hershman: We're seeing good attach in the sense that projects that are coming our way are with customers are, you know, are these kind of hybrid projects. We're gonna expect that to continue, especially as, you know, the type of power needs in many of the markets that our customers are building are looking for broader firming kind of solutions.

Speaker #8: Okay. Thank you. Yeah. And the other question was behind the meter is that something you guys have taken a look at at all? I know it's a little far afield, but I'm curious.

Joseph Osha: Okay. Thank you. Yeah, the other question was behind the meter. Is that something you guys have taken a look at at all? I know it's a little far afield, but I'm curious.

Speaker #1: I don't think it's far afield. I think we are starting to see our customers are in discussions with many of the hyperscalers around opportunities that are behind the meter both in storage and in PV.

George Hershman: I don't think it's far field. I think we are starting to see, our customers are, you know, in discussions with many of the hyperscalers around opportunities that are behind the meter, both in storage and in PV. You know, currently everything we're doing is in front, but I think that, you know, as these larger data center complexes and, you know, kind of bring your own power solutions happen, we will absolutely be doing large scale behind the meter, both PV and energy storage.

Speaker #1: Currently, everything we're doing is in front. But I think that as these larger data center complexes and kind of bring your own power solutions happen, we will absolutely be doing large-scale behind-the-meter both PV and energy storage.

Speaker #8: Okay. Thank you very much.

Joseph Osha: Okay. Thank you very much.

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