Altus Power, Inc.

Good morning and welcome to the Altus Power second quarter 2023 conference call. As a reminder, today's call is being recorded and participants are in a listen only mode. A question and answer session will follow the formal presentation. At this time, for opening remarks and introductions, I would like to turn the call over to Chris Selton, head of investor relations.

Good morning and welcome to our second quarter 2023 earnings call. Speaking on today's call are Lars Norell, Co-Chief Executive Officer, and Dustin Weber, Chief Financial Officer. In addition, Co-Chief Executive Officer Greg Felton will be joining us for Q&A. This morning, we issued a press release and a presentation related to matters to be discussed on this call. You can access both the press release and the presentation on our website, www.altuspower.com, in the investor section. This information is also available on the SEC's website. As a reminder, our comments on this call may contain forward-looking statements. These forward-looking statements refer to future events, including Altus Power's future operations and financial performance. When used in this call, the words expect, will, plan, forecast, estimate, outlook, and similar expressions as they relate to Altus Power identify a forward-looking statement. These statements are subject to various risks and uncertainties, which could cause actual results to differ materially from those predicted in the forward-looking statements. Altus Power assumes no obligation to update these statements in the future or if circumstances change. For more information, we encourage you to review the risks, uncertainties, and other factors discussed in our SEC filings that could impact these forward-looking statements, specifically our 10-K filed with the SEC on March 30th, 2023. During this call, we will also refer to adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures. Our management team uses these non-GAAP financial measures to plan, monitor, and evaluate financial performance, and we believe this information may be useful to our investors. These non-GAAP financial measures exclude certain items and should not be considered as a substitute for comparable GAAP financial measures. Altus Power's methods of computing these non-GAAP financial measures may differ from similar non-GAAP financial measures used by other companies. More detailed information about these measures and a reconciliation from GAAP to these non-GAAP financial measures is contained in both the press release and the presentation that we issued today. Please turn to slide four as I turn the call over to Lars Norell, Co-Chief Executive Officer of Altus Power.

Lars Norell Thanks, Chris, and welcome to all our investors and analysts. Since our first quarter call in May, we have continued to develop new customer relationships and increased our cadence of construction and development. Today, we're reporting 46.5 million of operating revenues for the second quarter, an 88% increase compared to the second quarter of 2022. Net income of 3.4 million, as well as adjusted EBITDA of 30.6 million, more than double our adjusted EBITDA for the second quarter of last year. and the most profitable quarter in our company's history in revenue and EBITDA. Our execution during the second quarter positions us to reiterate our 2023 guidance range of 97 to 103 million, with an EBITDA margin in the mid to high 50s. Starting now on slide five, and before we dive into the details behind our financial results, I'm proud to share that Altus Power has grown to be the country's largest owner of commercial solar arrays. This is an important milestone for Altus and validates our strategy of owning and operating each of our assets to deliver clean electric power to our customers in a high-growth market. Our access to long-term funding will allow us to expand our footprint as well as to develop and deliver additional products and services to our customers. We also want to detail the benefits of combining programmatic customer engagement community solar to further fuel or growth the property portfolios of our largest customers in many cases include significant numbers of buildings with rooftops spanning more than a hundred thousand square feet each of which enables us to build an array of at least one megawatt in size High Street for example owns a portfolio of approximately 140 logistics facilities across the US and and we are pleased to have our exclusive agreement in place with them with multiple assets across several states going into development and interconnection applications. Coupled with this programmatic flow of large rooftops, community solar has emerged as another important driver of growth, which adds significantly to our total addressable market. Community solar expands the market opportunity because an asset's size isn't limited by the energy needs of the tenant in the building on top of which the array is constructed. Instead, we can maximize the array to fit the available roof space and sell the excess power to residential subscribers at a discount to their retail rates. Community Solar also plays directly to some of the unique strengths of Altus Power. To mention one, our strategic partners Blackstone and CBRE offer seamless introductions to large enterprises and there are significant numbers of customers and employees, all of whom are potential subscribers to our clean electric power. Another example is the advantage we have from our growing digital platform in the efficient and scalable customer onboarding and servicing it offers. These advantages, coupled with our scale, allow us to further grow our brand and brand recognition in this rapidly growing segment of our market. Moving now to slide six for highlights on our new assets. With the assets added during the second quarter, our portfolio grew to nearly 700 megawatts as of quarter end. We were pleased to complete our first asset in Maine, bringing our current in-service operations to 25 states across the U.S. Adding to this achievement, July marked the opening of our New Jersey Community Solar Program, where we've begun to sign up residents to be Altus Power customers for one of our assets in the final stages of construction. Most of the 40 megawatts of New Jersey arrays we plan to complete in 2023 will serve community solar customers, and we're proud to be investing heavily in the Garden State. Moving now to the scorecard of our construction activity on slide seven. As of today, our team has completed construction of 20 megawatts of newly developed assets in 2023. demonstrating steady progress towards our expectation of 75 megawatts. Our timelines continue to anticipate near-term completions of our New York and Maryland assets, with our in-construction assets in New Jersey forecasted to be completed during the fourth quarter. Our confidence in this timing stems from construction activities progressing through our milestones, with the majority of the equipment on site and in process of being assembled and installed on roofs and in parking lots. The completion of 75 megawatts in 2023 would represent our largest construction output ever in a calendar year, which will be another major achievement for our team. Staying with our pipeline and asset base and operation on slide eight, continuing with development to the right of the slide, we have 23% of that part of our pipeline in construction or pre-construction. a portion of which we expect to complete later this year, with the remainder supporting our growth in 2024. We expect to see the latter phases of our development pipeline benefiting from the increasing pace at which we are now moving programmatic engagements and channel partner flow through the contracting and construction process. This increasing cadence supports our expectation that we will double our 75 megawatts on completions from this year to 150 megawatts in 2024. Our expectation for significant growth in construction output is driven by our increased programmatic engagement with customers, our growing development and construction platform, and our strategy of procuring major system components earlier in the construction process. Our ramping velocity of new assets across all stages of our pipeline provides additional confidence that we can continue to increase our volume in the upcoming years, provided similar market conditions. Moving to the left of the slide, our acquisition pipeline remains an additional engine of growth for our business. Over the past few weeks, we were pleased to announce the closing of approximately 20 megawatts of new solar and storage assets, which introduced new customer relationships with HP Inc. and Keysight Technologies, among others. We are also pleased to have added our largest storage asset to date, and we remain firm in our belief that storage will be an important part of our asset base in the future. Acquisitions have been a staple of Alta's power strategy over the years, and execution on opportunities like these are additive to the development targets I previously discussed. And they also offer a similar impact in terms of new customer relationships and entry into new markets where we can leverage our growing Altus Power brand and continue to deploy our land and expand strategy. With that, let me now hand the call over to our CFO, Dustin Weber, for additional financial highlights. Dustin?