HA Sustainable Infrastructure Capital (HASI) Q2 2024 earnings summary

Executive summary

• Achieved two major milestones: closed a $2B co-investment vehicle with KKR and secured a second investment-grade rating, affirming strong business momentum and scale.

• Q2 2024 Adjusted EPS was $0.63, up from $0.53 in Q2 2023; GAAP EPS was $0.23, up from $0.14 year-over-year.

• Managed assets reached $13.0 billion as of June 30, 2024, with portfolio at $6.2 billion, both up 27% year-over-year.

• Net income for Q2 2024 was $26.9 million, up 99% year-over-year, driven by higher interest income and equity method investment gains.

• Transitioned from REIT to C Corporation status effective January 1, 2024.

Financial highlights

• Q2 2024 total revenue was $94.5 million, up 27% year-over-year; six-month revenue was $200.3 million, up 40%.

• Adjusted earnings for Q2 were $73.7 million ($0.63/share), up from $53.1 million ($0.53/share) in Q2 2023.

• Adjusted Net Investment Income for 1H24 was $126.9 million, up 25% year-over-year.

• Gain on sale, fees, and securitization income for 1H24 totaled $41.8 million, up 62% year-over-year.

• Interest expense increased 49% to $59.5 million in Q2 due to higher debt balances and rates.

Outlook and guidance

• Affirmed guidance for 8%-10% adjusted EPS growth from 2024-2026, with a 60%-70% dividend payout ratio.

• Long-term goal remains 10% annual EPS growth and a 50% payout ratio by 2030.

• Pipeline of new equity, debt, and real estate opportunities exceeds $5.5 billion, well-diversified across asset classes.

• Pipeline yields expected to remain consistent with recent closings at or above 10.5%.

• No plans to increase leverage despite lower cost of debt; focus remains on maintaining investment-grade status.