Energy Vault Holdings, Inc.

Good day and welcome to the Energy Vault second quarter 2025 earnings call. Currently all phone lines are in a listen-only mode. Later there'll be an opportunity to ask questions during a question and answer session. You may register to ask a question at any time by pressing the star then one on your telephone keypad. Please be advised today's program is being recorded. It is now my pleasure to turn the program over to Michael Beer, Chief Financial Officer for Energy Vault.

Thank you. Hello and welcome to Energy Vault second quarter 2025 financial results conference call. As a reminder, Energy Vault's earnings press release and presentation are now available on our investor website, and we'll be referring to these presentations during the call. I believe there was a slight delay on business wire, so please access those on our website if you were unable to get that email. A replay of this call will be available later today on the investor relations portion of our website. This call is now being recorded. If you object in any way, please disconnect now. Please note that Energy Vault's earnings release and this call contain forward-looking statements that are subject to risks and uncertainties. These forward-looking statements are only estimates and may differ materially from the actual figures or events and results due to a variety of factors. Please refer to our most recent 10-K or 10-Q filing for a list of factors that cause our results to differ from those anticipated in any forward-looking statement. We undertake no obligation to publicly update or revise any forward-looking statements. except as required by law. In addition, please note that we will be presenting and discussing certain non-GAAP information. Please refer to the Safe Harbor disclaimer and non-GAAP financial measures presented in our earnings release for more details, including a reconciliation to comparable GAAP measures. Joining me on the call today is Robert Picconi, our Chairman and Chief Executive Officer. At this time, I'd like to hand the call over to Robert.

Michael, and thanks to all of you joining the call. Before jumping into the Q2 financial results as normal here, I thought I would kick off highlighting one of the significant announcements made this morning before the market opened. As all of you know, a little over a year ago at our May 2024 Investor Day, we outlined a bold strategy to leverage our significant technology and operational expertise in designing, building, and monitoring storage systems to also developing, owning, and operating energy storage systems. given the significant benefits of having less lumpy and more predictable revenue streams that are highly profitable, recurring, and supported by long-term offtake agreements. This strategy was focused on getting more portfolio exposure to a much higher profit pool segment within the energy ecosystem and really fundamentally creating more long-term value for our shareholders. We proceeded to execute on getting our first two owned projects in Texas and California placed in service as expected this year and recently announced. and also completed the project financings for both of them, as recently announced, and have been putting cash, therefore, back on the balance sheet. While the first two projects were funded from our balance sheet, the announcement this morning now answers what's been on investors' minds about how Energy Vault will fund the execution of our growing project development portfolio. With a $300 million preferred equity investment to fund the development, construction, and of our storage IPP own and operate projects, which we call asset vaults. I want to go over a little bit about what this means as highlighted from the announcement. The $300 million equity will enable over $1 billion in capex and project financing toward constructing and operating the new storage IPP projects. While the funds are targeted at an initial 1.5 gigawatt of projects already progressing in mid to later stage development, It also funds earlier stage development, or DevEx, of our total three gigawatt development pipeline of projects in the US, Australia, and Europe. In addition to the first two projects recently placed in service in the US and now a part of Asset Vault, the next projects coming online in the next two to three years will create annual EBITDA cash streams of over 100 million, predictable and recurring. Just as critical in funding the projects is that this investment of the $300 million preferred equity is non-dilutive to common shareholders, and we've built mechanisms for milestone-based equity participation that aligns us as partners along the way. This is critical given many of the convertible-type financings done have been highly dilutive to existing shareholders from other deals. That is not the case here. Important to also note that EBITDA streams from Asset Vault are in addition and complement Energy Vault's synergistic energy storage solutions business, the third party, global utilities, IPPs, and other high-demand energy users. On top of that, as was the case with the first two energy assets already in service in the U.S. and Texas and California, the Asset Vault subsidiary will contract to Energy Vault all of the product design, construction, commissioning, and long-term service agreements, thereby providing additional cash flow streams and liquidity back to the parent company. We're going to be having a virtual investor day post-close of the transaction that we'll schedule to go over more details of the transaction and also some of the language around this part of the business. You're going to hear us talking more and using megawatts, for example, instead of megawatt hours, as that's what we're being contracted And we'll be going over some KPIs related to multiples of those megawatts to come up with the relevant financial statistics. Just a few thoughts here before jumping back to the results. I'm sure it's not lost on everyone how important the timing is of this investment and the transformation that an investment like this will enable in our forward financials. As a company, we have been good in the position and structure something like this as we've remained without debt at the corporate level since becoming a public company. And given project timing, initially used our balance sheet to get the first two projects underway here in the US. But what really excites me about this, and I want to highlight to investors as a final point here, is this now becomes about execution. Having run a few public and private companies in my career, focus is so important to successful execution. And one of the things that Energy Vault has quickly built a strong reputation on in the market and demonstrated in spades with our customers and our partners is that we are excellent at execution. We deliver. That's managing supply chains, building, commissioning, and reliably and safely executing projects and monitoring and operating assets. You can imagine the diligence a company like ours undergoes, especially these days, and in these markets as a newer growth company, whether that be the banks that did the two project financings that we recently completed, infrastructure funds like we just announced this morning, government-owned entities like we've contracted with in Australia the last year, and even public utilities who are not in the business of taking any risk. And generally here, bankability is fundamental. As part of their DD, all of these groups I just mentioned have talked to our prior customers or partners where we have executed projects. And I think the results now and how we're expanding the business and these agreements speak for itself. With that, I'm going to turn to the Q2 financial results and have seven main points to highlight. Fundamentally, we start always with contract revenue here in the backlog. A tremendous signal to investors, increasing again quarter over quarter, 47%, to almost a billion dollars now, 954 million versus Q1, and up 120% year-to-date. This is driven by new third-party project and service agreements, as well as long-term off-take agreements in the U.S. and Australia. The revenue also increased on a year-over-year basis, $8.5 million compared to the prior year period, driven by Australia project deliveries and also the commencement this quarter of our CrossTrails battery energy storage system in Texas. The GAAP gross profit increased 140% versus prior year to $2.5 million as favorable geographic and revenue mix resulted in a gross margin of 29.6%. The adjusted EBITDA also improved 11% versus prior year, narrowing the loss to $13.7 million from a loss of $15.4 million in Q2-24, aided by the improved gross margins just mentioned and some of the reduced operating costs That again, we took some additional steps this past quarter for an additional 6.5 million in cost savings initiatives. That's an annualized number. We'll continue to invest, for example, in Australia to support some of the long-term growth and initial project starts there. I think importantly, cash improved 23% versus just last quarter to 58.1 million at June 30th, finishing at the high end of the previous guidance range. Since then, and looking a bit forward, we completed the CrossTrails project financing just last month of $17.8 million in July, and we're expecting another $27 million in net investment tax credit proceeds that are anticipated in September. We continue to expect to be within the prior revenue recognition and cash ranges, with much of the larger battery deliveries expected now the latter half of the year in Q4, given some of the market shocks and pause from the tariff dispute with China that we absorbed in the first half of the year. Finally, and before turning it over to Michael, one special thank you to go out to our Australia teams and partners from the other announcement, also quite important. We made this morning achieving final close of the acquisition of the 125 megawatt, one gigawatt hour Stony Creek battery energy storage system, now the largest in our new own and asset portfolio. Of course, this was largely expected. getting through final FERB government and share transfer approvals are never guaranteed. And I want to call out our local Energy Vault leaders, Lucas Sadler and Raymond Gilfeder, and their teams, the legal team from Hamilton Lock locally, our development partner, Ross Warby, and his team from Enervest, and all of those here in the U.S. that worked across time zones to complete this. We look forward to pushing this through to final DA approvals and into RTB or ready to build construction in the coming months. With that, I'll turn it over to Michael to go over the details of the financial results.