Energy Vault Holdings, Inc. (NRGV) Earnings Call Transcript & Summary

Hello, and welcome to Energy Vault's 2025 Virtual Investor and Analyst Day Webcast. We appreciate you joining us today as we provide an in-depth look at our strategy, business performance and growth trajectories. Our focus today is on the continuing evolution of Energy Vault as an integrated energy storage IPP and the introduction of Asset Vault, our new investment platform designed to accelerate deployment and value creation in the energy transition. As a reminder, Energy Vault's presentation is available now on our investor website, and we will be referring to the presentation during this call. A replay of this webcast 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 presentation 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 future events or results due to a variety of factors. Please refer to our most recent 10-K or 10-Q filing or Slide 2 in our deck for a list of factors that cause our results to differ from those anticipated in any forward-looking statements. 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 for more details, including a reconciliation to comparable GAAP measures. If you'd like to submit questions, please do so using the webcast portal or e-mail us at [email protected]. We'll be happy to address questions throughout this whole session. Please let me quickly guide you through today's agenda before I hand you over to our speakers. Firstly, we'll begin the opening remarks and an introduction of Asset Vault and Energy Vault's position as an integrated storage IPP presented by Robert Piconi, our Chairman and CEO. This will be followed by a brief Q&A session. Next, we'll move to the Asset Vault investment overview led by Matthew Brezina, our Vice President and General Manager of Asset Vault, along with Chris Leary, Investment Partner Head of Infrastructure Equity at OIC. After the session, we'll gain -- give you another opportunity for Q&A. Following that, Michael Beer, our Chief Financial Officer, will provide a detailed financial outlook covering financial metrics, performance drivers and capital allocation priorities. We'll have another Q&A session immediately after Michael's remarks. Finally, Robert Piconi will return to deliver closing remarks, summarizing Q&A's takeaways and our outlook for the year ahead, followed by one last opportunity for any final Q&A. Once again, thank you for being here and for your continued interest and support of Energy Vault. With that, let's begin, and I'll now hand over to Robert Piconi, our Chairman and CEO.

Great. Laurence, thank you very much. A very warm welcome to all of you from this very early morning here in Australia, just after 4:00 a.m. I'm also here with Marco Terruzzin, our Chief Revenue Officer; and also Lucas Sadler, our Head of our Commercial business here in Australia. A little over 15 months ago, at our first Investor and Analyst Day, we outlined a bold and ambitious strategy to leverage our strength in designing and delivering energy storage technologies to become an integrated energy storage IPP that owns and operates energy storage infrastructure. Today, after a culmination of a very intense year of development and progress is with great excitement about our future of our company, our people, our partners and perhaps most importantly, for our shareholders who have continued to invest in our future, we officially launched Asset Vault as the financial platform to enable the role we are playing in operating critical energy storage infrastructure that powers our future. We're sitting here at the dawn of the AI infrastructure age. We believe the greatest value we can provide as a company lies in the ownership and operation of these critical energy storage assets. These are the assets that are powering the world's most essential infrastructure today. The assets generate stable, recurring and high-margin cash flow streams, driving superior and predictable value creation for our shareholders. All of the know-how and IP we've developed over the past six to seven years have now converged into our integrated independent power storage model. As I look at these last even 12 months, we brought online the first 65 megawatt of projects into operation as committed in California and in Texas and contracted an additional 275 megawatts, including the 125-megawatt 8-hour Stoney Creek project right here in Australia and the recently announced 150-megawatt 2-hour SOSA Energy system in Texas. Moving with speed and the velocity that you will hear as a theme today and becoming a market imperative for this industry to meet critical energy infrastructure needs that are being redefined and accelerated daily by the transformation into the AI data center build-out that's rapidly underway. These first four projects alone totaling 340 megawatts will generate approximately $40 million in annual recurring EBITDA in the next 24 months alone and more to come. Our announced $300 million funding of nondilutive preferred equity will enable up to 1.5 gigawatts of new deployments, equating to over $1 billion in new capital expenditures, positioning Energy Vault to accelerate our profitability ramp to $100 million to $150 million in annual recurring EBITDA from Asset Vault alone as these assets come online in the next three to four years, which is additive to the various cash and gross profit streams coming from the rest of Energy Vault's energy storage solutions business. With Asset Vault in place and with its first fund as our vehicle to secure and deploy capital for the development, ownership and operation of these critical energy assets, we also sit here today with a contract backlog that has more than quadrupled this year to almost $1 billion as we continue to add very visible and long-term contracted revenue streams. Critical to our mission and resilient and sustainable energy, Asset Vault not only will help us deliver on the global shift toward low-carbon power, but it also uniquely positions us to leverage our deep energy storage and grid expertise of our people to support the explosive build-out of AI infrastructure, where clean, reliable energy and grid resilience are mission-critical. Very excited to be sharing for the first time publicly our collaboration with the team at Crusoe, hey are the AI factory company. Chase, Cully, the co-founders there and the whole team with their focus on energy-first are innovating and redefining what it means to move with the speed and velocity I just referenced and vertically integrating to deliver the largest AI data centers in the world in time frames previously thought impossible as the initial Stargate project in Abilene shows alone. Think an example here for all of us for what is now becoming a requirement to be successful in this industry. And not only in large singular scale for data centers, but our collaboration is focused on the modular data center build-out at optimal grid interconnection points, and we'll be touching a little bit more on this later and specifically some of the work that we're doing. The takeaway is simple here as we share over these next 100 minutes or so, and we will be talking about things in minutes. Through proven execution of the team, the deep expertise we have, the innovation, the strategic ownership of critical energy infrastructure assets, we have positioned Energy Vault to capture the opportunities in front of us and create long-term sustainable shareholder value. I know a chart like this, and you've seen many of them that look at the sector of energy storage and in particular, in power. But as you see here through 2030, we've got double-digit growth here in just the electricity output alone. But in particular, for energy storage, energy storage growing at about 3x to 4x that of the electricity demand. Very interesting here, and a lot of you that follow the sector know this as well. If you look at the period from about 2016, '18 through 2021, we had basically flat energy demand in the sector in terms of overall electricity demand. But you see with storage here, we've got a big multiplier on that and very excited with our position now and roughly the 28% CAGR that we're going to be having and participating in here over the next period in the next four to five years. Just to graphically represent here the company now. And if you look on the left-hand side, you've got Energy Vault there. And as we've mentioned, Asset Vault there to the right and introducing it today as a wholly owned subsidiary. It is, of course, a complement to our existing core businesses, but we'll be more and more defining a lot of those priorities in terms of our investments in critical energy infrastructure. Asset Vault is a very efficient platform as designed in terms of governance to secure capital. It is nondilutive to shareholders. It is a scalable platform and really focuses on enhancing the speed of our capital deployment. First and foremost to this is also the self-integration and the grid expertise that Energy Vault brings as a part of this, which will help us reduce the project CapEx, reduce the operating expense of these assets from our software systems and how they optimize the operation and therefore, increase the IRRs. Now a little bit more detail around with Asset Vault and us becoming a fully integrated IPP now. You see on the left-hand side there, a lot of the activities that Energy Vault is going to be bringing to the table in support of the Asset Vault platform. We have a stronger earlier-stage focus now on good asset identification and the development. We're going to be leveraging that self-integration expertise as a company that we built and moving very quickly in the last two years to bring on multiple gigawatts of power and energy storage. We're going to leverage our management on the EPC side as we look at managing the build-out of that infrastructure, our software platform, which is fundamental and critical. It allows us to actually deploy not only our core technologies that we develop, but also to deploy any technology that's fit for purpose for the application we're going to serve and as well as our long-term service agreements in managing and monitoring and ensuring safety and reliability of these assets. If you move to the right, therefore, how does this process work? I just talked through a lot of our core expertise, how that increases the IRRs. Asset Vault is the vehicle to finance this energy infrastructure. The way the fundamental works, it is preferred equity, addresses also and helps support our project financing activities that follows right on the heels of the equity investment. It enables us to achieve step-ups as well as take advantage of any tax credits regionally. And there are other cash returns to Energy Vault. There's a post-pref-equity cash distributions, of course, that go back to the company. There's all the integration margin and services that flow back into Energy Vault. And as I mentioned, the long-term service agreements and any other fees that come back to the company. And finally, I think the most important aspect here is the financial return on this first 1.5 gigawatt, this $300 million will enable is a range $100 million to $150 million of EBITDA, supported by the initial what we're calling Fund 1. Just to bring it home a bit here now for investors on the investment thesis, and I've already talked through some of these things, but just to emphasize here, we are in a very attractive market that's going through a tremendous transformation. I think the decision that we made and was actually taken almost two years ago that became visible and we shared it 15 months ago at our first Analyst and Investor Day was fundamental to position us not only for the reason we made the transition to own energy storage assets, predictable recurring revenue streams, high margin that become, therefore, quite predictable for us, but also it's now positioned us for what's happening with the AI data center transformation and playing a much more critical role in the management of that energy infrastructure. The CAGRs are there to support the energy storage. We've built a technology-agnostic software platform to be able to bring all the right technologies to bear and that will play a very important role as we look at different applications. But I think another thing for investors is fundamental is our proven execution. While we're a newer company of about seven to eight years old now, our team has a tremendous deep expertise, which is why if you look at the first few years of our energy storage deployments, we moved very quickly, faster than any energy storage company in its first years to not only win new contracts, but have in 12 to 18 months, those contracts fully deployed, commissioned and up and running and at availability that's over 99% today. The other pieces of the execution, of course, stem from what we've done just in the last year, as I referenced, in getting now 340 megawatts either in operation with the first two projects, but as well as the last two projects that have been announced, the one here in Australia and the one just recently announced in Texas for another 275 megawatts. and that's going to be generating by the end of the next two years on an annual basis, over $40 million in EBITDA. And just not to forget to reference that we put on the board about $550 million of revenue in our first few years here as a public company and our first few years generating revenue. And finally, I think here with Asset Vault and really one of the reasons that we're here and talking to you today, it really accelerates our push now into profitability as a company, the growth and to build the shareholder value. We have a strengthened balance sheet and liquidity. Michael Beer is going to be covering some more details of what we've done recently, not only with the preferred equity, but also to get in place some strong working capital lines as we support our growth. We have a large and developed pipeline of about 4x what that contract backlog was just one year ago to almost $1 billion. the $100 million to $150 million of EBITDA that's going to come just solely from this preferred equity investment alone. And the last point and a very important one is the aligned incentives with you all, our investors, with management that owns about 20% of the company. You've seen a lot of the recent buying, I think, just in the last 60 days between the buying that I did, some of the management team and even our Board of Directors. That is a show of our faith in our future, and it's a show and I think for the investors, the dedication of this team to the future. Just graphically to represent this, and this goes without saying, and I think we've referenced this on our prior earnings calls as to why do we believe as a company that owning infrastructure is important. You can get a sense of how the economics change from how we have been and will continue to develop and deploy energy storage systems. In owning and operating those assets over time with optimal project financing, you can see the returns and the unit economics grow significantly and hence, the EBITDA creation that I've referenced. We have dealt with as a company, the industry of all the changes we've seen, whether that be from some of the tariffs this last year, I think one of the most volatile years that we've seen here in the industry and just some of the changes that happen and as happens with our customer sets as we look at project-specific work. I think now with the energy infrastructure ownership, we're going to have much more visibility, and we'll be obviously sharing all that visibility now as we go forward. These things do not happen overnight, of course, as we bring these assets online, there's investments. These projects take anywhere from 12 to 24 months from the time that we begin building them. But that visibility now we're going to have will be fundamental, I think, to the value proposition and the investment thesis here of our investors. And if you look there to the right and what's happening on the recurring revenue, we mentioned our traditional grid services, the microgrids, of course, and what's happening in the AI data center. And that's very interesting for us. I think as we look at that transformation and that spending, it is unprecedented. I think it will be, at least in our lifetime, the biggest transformation that we've seen and something that we are excited to begin to participate in. I referenced this in my opening remarks and very excited to share the collaboration and that we're doing here with Crusoe here for the first time. And really with the thesis here that not all megawatts are created equal. As you saw on the prior chart, there's a lot more value as we look at -- we're managing, providing energy storage, owning and operating those over time is already a shift that you see in the bottom left-hand quadrant in terms of that profitability or the EBITDA, the dollar EBITDA per megawatt. But you see as you move up the curve and up to the right and as we look at data center infrastructure, GPU as a service and enabling that and the role storage is going to play, you can see it's not just a multiple of 5x to 10x, but there are just important economics, synergies and opportunities for energy storage to play a role in a segment that's creating a ton of value. We're excited to do that. We're collaborating with Crusoe to advance that development and ownership of their modular AI factory projects. Our energy storage hardware, our software, our grid expertise will all be critical enablers for the rapid deployment and the scalable operation of the Crusoe cloud. This is a new and very high-value asset and infrastructure class. And as you see there, significantly increases our ability to generate EBITDA as a company. And it's just at the beginning. And wrapping it up here for my upfront portion, this all, I think, comes back to how we're maximizing the shareholder value of this company now. Just to map it in the cycle here, you can get a sense of our developed pipeline is large, $4 billion to $5 billion that we're focusing on globally. Contracted, I've mentioned this $1 billion contract backlog we have there at the top. You can go down to the left or the right of that, starting on the left with Asset Vault. We are building assets with a very long technical life. We are signing long term and have signed long-term offtake agreements with every project we brought to the market so far and the ones that we're currently bringing to the market that are under contract and starting construction. There are synergies we will leverage and uniquely leverage as a company from our energy storage expertise, from our expertise in deploying these assets from commissioning them, having a flawless safety record as we monitor and manage them and at very significant EBITDA margins. Over to the right, our Energy Storage Solutions side, we will be benefiting from cash flows that are going to be coming from Asset Vault there in terms of the internal contracting and building back using Energy Vault and our core operational teams to build those assets out. the long-term service agreements, of course, that Energy Vault will do to monitor and manage these assets and then various license and royalty streams from the significant IP and technology that we've built up here over time. In the end, we're going to be a function of both levered free cash flows you see there on the left and the EBITDA that we've already discussed and talked about as well as project free cash flows that are going to be coming from the contributions from the energy storage that we're going to deploy and ultimately, therefore, resulting as we get into anything more predictable, stable, recurring long term, I think if you look at the comparable companies that are doing that, whether that's other IPPs or yieldcos that are public, the multiples are going to change, and we're going to be looking at a much different value proposition and valuation, I think, of our company. With that, I want to introduce Matt Brezina now for the next section here. Matt Brezina is our new Vice President and General Manager of Asset Vault. We're very excited. Matt's been with the company here about six years now. He's been in the industry now all his career, so in the power industry. He's played a very critical role in the project financing side of the power sector in renewables, a deep expertise in financing at one of the largest international players in renewability in E.ON and RWE. So, with that, I'll turn it over to Matt Brezina.

Thank you, Rob. Hi, everyone, and thanks, Rob, for the great intro. I want to start off briefly by going over the Asset Vault structure. And how it's capitalized and the use of funds and cash flow distributions from the vehicle. So as we've announced in our 8-K previously, Asset Vault will be fully capitalized through two different methods. 100% of the common stock will be issued to Energy Vault holdco. And subsequently, 100% of the preferred equity will be issued to Orion Infrastructure Capital or OIC. Those preferred shares will have a perpetual nonvoting rights, which are non-dilutive, as Rob mentioned earlier, and are milestone based. We have the ability to participate in Energy Vault's equity, assuming we achieve various milestones through the deployment of the different tranches up to the $300 million of commitment that they've provided to the Asset Vault entity. Based on the structuring with the strategic, we will be able -- Energy Vault holdco will be able to fully consolidate Asset Vault, and this will allow us to retain and report all the revenue and EBITDA generated from the project to Energy Vault Holdings. Now the capital structure in Asset Vault will be a 4:1 ratio. So for every $4 that Orion will contribute into the subsidiary, Energy Vault will be responsible for contributing $1, so an 80-20 split. So in this example, with OIC's commitment up to $300 million of capital, that will trigger if we draw on all $300 million of capital, that will trigger Energy Vault to contribute $75 million to achieve a total amount of $375 million of capital to deploy to accelerate all the growth ambitions that we have in the Asset Vault portfolio. So that's the equity side of the equation. As Rob alluded to earlier, we're going to continue to raise nonrecourse project level debt and monetize the tax credits generated by projects in the U.S. Over the next six months, we expect to draw roughly $200 million of capital from Asset Vault, which will facilitate the funding and construction, not only for the SOSA project that we just acquired in Texas last week, but also the Stoney Creek project that is in New South Wales, Australia. And in addition, of that $200 million, there will be enough capital left over to continue to acquire Tier 1 projects and portfolios to expand the robust pipeline that we've already created. Under the Asset Vault structure, the preferred equity owners will receive a quarterly distribution, and it will be the higher of a 12% IRR or 1.65x MOIC over the capital deployed over the life of the vehicle. Now during the first three years, we'll only -- the first three years, we will only include PIK only. And at the discretion of EV, we can choose to pay that down in cash as well from distributions from the projects. After year three, Asset Vault will then provide 8% quarterly cash distributions to OIC with the ability to PIK the remaining 4%. At the end of the redemption period, which is six years, we'll or at EV's discretion, we can call and redeem that capital prior to that six years. But at six years, there will be a redemption period that we will need to make whole OIC for their investment on their or their 12% interest. So that gives us a three-year runway of being able to collect cash from the projects that we bring to market with the ability to pick at least a portion or all of that interest until the redemption period at the end of the year sits. I'd now like to introduce Chris Leary, who is the Investment Partner and Head of and for Capital at OIC to give a little background on their execution strategy and the partnership relationship that we're building with them through the asset bought vehicle. So, Chris, I'll hand it over to you now.

Fantastic. Thanks, Matt, for the intro, and thanks to the entire Energy Vault team for inviting me here to present today. Of course, also appreciate all the investors and analysts that are joining us on the phone. I'm definitely delighted to be here and even more delighted to kick off the capital partnership with Energy Vault. So maybe what we can do is flip the slide, and I can give a quick introduction on OIC. We are a multi-strategy capital solutions platform, and we are exclusively focused on infrastructure in North America. Our product is primarily structured debt and structured equity investments, and we've been doing it for over a decade. We've managed now about $5 billion of assets, and we've closed about 45 transactions over that 10-year period, all across the variety of infrastructure verticals with a specific expertise and focus on sustainable power and also storage and related assets. In fact, our investment in Asset Vault here is #45 in our most recent and exciting. Our focus at OIC is actually working with operating companies to help them achieve two goals, specifically minimize dilution, which Rob highlighted upfront and also minimizing loss of control by utilizing accretive capital structure. The companies that we typically work with are innovative companies and businesses that have a strong sustainability profile, exemplified really well by Energy Vault vis-a-vis our investment into Asset Vault. We use structuring as our calling card. Obviously, the outline of our investment that Matt just highlighted does have some complexity to it, but that's something that we don't shy away from. We actually lean into that because often the companies that we're working with are going through an inflection point of growth, where it's incredibly expensive to issue equity relative to the eventual value proposition that they will grow into. So, in short, OIC is a creative capital solutions provider, and we are an entrepreneurial group here at the firm. So we believe that our capital solutions or our entrepreneurs and structured by entrepreneurs here and are excited to partner with Energy Vault. If we turn the page, we can spend a moment looking at our focus and portfolio. So this is the entirety of the investments that we've made across North America. Obviously, you can see the different infrastructure sectors that we have and continue to invest into. But we've actually made a number of investments into sectors that are very similar and complementary to what the folks at Energy Vault are doing here in Asset Vault. Specifically, we've actually created in the past life, a solar IPP called K Road Power as the principals here. So we know what the value proposition entails to be an asset owner. Secondarily, we've made an investment into a listed company called Gevo in a subsidiary of the listed business in a similar format to what we've done here in Asset Vault. We've also invested in the fuel cell business, which is incredibly relevant to our underwriting of the Calistoga Resiliency Center in California. And we've also backed an EPC business called Radiance. So obviously, a lot of similarities across the value proposition at Energy Vault here. So flipping to the next slide, if we could do. I'm not going to cover it in the same level of detail that the Energy Vault team has and will continue to discuss. But I believe fundamentally, the transaction combines the best attributes from both parties, specifically project development and operational know-how from the robust Energy Vault team. Combined with the capital and investment experience in the sustainable power space from OIC, I believe that we're ready to execute and have a long runway of development projects to continue to partner on vis-a-vis the Asset Vault structure. I strongly believe and OIC strongly believes it's a great opportunity to get long energy storage assets in light of the increasing power demand across the country, partially driven by the AI phenomenon that we're going through right now. We think it's a great story for increasing power demand and increasing price volatility that we all experience together vis-a-vis our investment into Asset Vault. So I'll turn it back to Matt to see if there's any other questions from the group, but we can move on.

This is Laurence. I'm just going to take a few questions off the floor that have already come in and then before we move on to Matt's section. So, Rob, we've had a couple of questions from your section. The first question is from a shareholder. How committed are you to your core energy storage solution businesses? You seem to be very focused on asset bolt. Will you slow down your commercial and technical investments in these businesses?

Okay. Thanks, Laurence. It's a great question. And from our perspective, this is a symbiotic relationship between that expertise that we built and demonstrated, I think, over the last four to five years, in particular, as we began to scale and deliver energy storage platforms. That is a value add and a synergy and a differentiator for why we believe and we know because we've been building them projects at lower CapEx at lower operating expense. And therefore, for Asset Vault now as a platform and as we're investing and shifting to invest more and more in energy infrastructure, that's going to play very strongly for us to be a very strong and larger player here in the coming years in energy infrastructure. So I will say that our priorities and investment is going to follow the dollars, obviously. So while we will continue to leverage that expertise and continue to make investments in R&D and core technologies, our focus as a company is going to be on identifying, owning and operating these assets. I think that creativity and expertise, just as an example, our Calistoga project up in Northern California for PG&E, what did we focus on there, solving a customer problem. What that meant was bringing the best of the best, latest technology to the table to solve that problem not only cost effectively, but sustainably. So we brought together hydrogen fuel cells. We brought together some lithium-ion for specific capability there for grid forming and black start and our software that orchestrated all of those technologies to deliver what's the longest duration and the largest green hydrogen storage project in the world, a two-day duration, 48 hours. So I use as an example is that core expertise and creativity and solving customer problems, think about unleashing that on some of the challenges that we're seeing in the grid with the data center and the AI build-out. So that's going to be a weapon that we're going to use, and that will go into the way we're going to differentiate and being a very cost-efficient company and a very efficient use of our capital and how we cost effectively deploy the asset infrastructure for energy.

Thanks, Rob. We've got lots of questions, but I'll separate them between the groups. There's quite a lot that are coming in for Michael, for example. I do have one more for you, though, and this is from one of our early investors and shareholders. Rob, very excited to hear about your collaboration with Crusoe. Can you tell us any more on that impact, timing, et cetera?

Sure. Yes, happy to. I have Marco Terruzzin here in the room with me. So I'll -- let me turn the screen and he can comment on that as well here. Marco?

Thank you, Rob. Definitely, it is an exciting time now in the power industry. At the same time, we are also experiencing new challenges. The grid is undergoing a massive transformation with large load that are coming online. And I think it's extremely exciting to collaborate with Crusoe Energy because we have the convergence of two technological platforms. It's very interesting to -- that we found not only a technological fit, but also a cultural fit with the understanding of the importance of velocity to bring solution to the market. And now in particular, focusing on modular data center and expertise of Crusoe Energy and our technological platforms both from a hardware and software perspective, we will be able to solve a problem that otherwise will be challenging for the grid to overcome. So, exciting time, and I've never been more positive that we can overcome some of this challenge now.

Actually, Marco, just I've got one more question that's just come in for you, if that's okay, before we move on. I'll just read it out from the screen. This is from Adam Forsyth of Longspur Capital. What is your view on structuring of project offtakes? Are you looking at tolling agreements? Would you leave some merchant exposure open?

Everything in the end goes to the underlying problem that this large load that they are causing to the grid. So the opportunity and the challenge is there. I think that the industry is undergoing new situation. And with the velocity and creativity, we can create a commercial structure that ultimately generate value for the utilities, for the balancing authority and also for the provider of equipment and going from the GPUs and also the infrastructure that will be deployed. So, for sure, the return on investment will be attractive, and this is what makes this initiative even more exciting.

And Laurence, if I to add there just as a comment to that. But absolutely to the question, signing the long-term agreements to minimize and derisk the project is fundamental. We've done that with all of our projects. Very interestingly, there's other type of instruments that can be used to even get above those long-term contract floors. The merchant side is also interesting for us to participate in what will continue to be a very volatile price environment for power, right? That's why we're in this business, quite frankly, we're one of the reasons. So, I think, more and more, we're seeing a lot of more sophisticated instruments come out to help us deal with some of that merchant risk. But absolutely, as you've heard and seen for our first projects, I think getting those contracted for the long term is fundamental for us.

Thank you very much.

So, with that, we're going to hand back to Matthew Brezina.

Thank you, guys. I kind of want to jump into the Asset Vault portfolio, the project portfolio, kind of how we evaluate our assets that come across our desk, what our due diligence and screening process looks like and then how do we make the determination to include those assets into our portfolio. So we take a -- it's simplified, but we take it into four larger buckets: developer reputation, project economics, project risk and project geography. On the developer reputation, we've, in the last 18 months, have developed strong relationships with Tier 1 developers, both on the IPP side. So think of the RWE, Orsted, EDF, NextEra as well as the development flip shops. So the smaller undercapitalized developers who bring projects to NTP and then sell to the Tier 1 IPs like RWE, EDF, et cetera. So over the last 18 months, building those relationships, getting to know each other, how we work and operate has led to an influx of portfolios, both on the individual asset level as well as the portfolio level to bring them across our desk and be able to work with those developers, whether it's a project that's at NTP, where we can acquire and that's where our expertise really aligns and we can bring the project from NTP to COD or if it is a project that is a little slightly earlier in the development process we are working with those earlier developers to enter into a development service agreement to make sure that we can get the project from the development status that it's at up until NTP. So we're working with a handful of developers, both on the own and operate side as well as just the development side to make sure that we have a robust -- we're at the nexus of kind of where all developers sit, leveraging our third-party energy services, energy storage as a service as well to really facilitate those relationships and make sure that we get the best projects that are out there for acquisition to take a look at and do a proper due diligence on. The next bucket I'd like to speak to is the project economics. So in addition to developing relationships with the actual developers and IPPs themselves, we've developed a really deep relationship with the leading market consultants and experts in the storage space, such as Ascend Analytics, Orennia, Aurora, a lot of the independent engineers, et cetera, to ensure that we have a very well-rounded view of not only the market dynamics, revenue potential as an asset can generate based on where the project is located, the node location, the market conditions, timing of commercial operations and an ability really to attract an investment-grade offtake. We've used consultants views and insights as well as performing various sensitivities, not only on the revenue side, but also surrounding the macro environment that we're continually faced with on a daily basis and the change in administrative policies to make sure that we have a well-rounded view of our supply chain, where the costs lie on our base case and potentially where they could fluctuate based on changes in administration policies. So, with all that in mind, Asset Vault will only pursue and add projects to the pipeline that really exceed our own internal hurdle rate to ensure that we cannot only just achieve the returns that we need on these projects, but maximize and exceed those hurdle rates so that we can continue to bring and maximize shareholder value. The next bucket I want to speak to is on project risk, and this kind of ties into developer reputation. So we're working with the Tier 1 developers. And to do that, we've created our own internal scoring matrix or criteria to objectively score these projects. And we have over 70 inputs surrounding project development status, economic viability, the list goes on to really make sure that, hey, the projects that we're bringing in that we want to do diligence on, we have an objective view of the risks and the opportunities that these projects bring along with them. And so only certain projects that obtain a certain scoring threshold, which we can get into at a later slide, we'll move on to the next stage of our due diligence. And most of the projects that do enter the Asset Vault pipeline are mostly later-stage development assets that are near COD or near NTP or very derisked from a development perspective. And so the assets that are further out that I spoke about earlier, 2028, 2029 CODs, we work with those developers to make sure that we can enter into those development service agreements to ensure that we have aligned interest to use their skill set to make sure that we can bring these projects to NTP and successfully reach the project to be placed in service once the development aspect has been fully derisked. Once we get to that NTP phase, that's really where Energy Vault shines. We have that in-house expertise on the energy storage solutions side of the business to ensure that we can execute projects on time and on budget to reach the targeted COD. The final bucket is the project geography. So to date, we have projects in California, Texas and Australia that we either own, operate or will begin construction in the next year. We want to continue to expand on that geographical diversification, not only in the U.S., also in the Australian market by entering into other government offtake tenders, but especially in the U.S., getting outside ERCOT, CAISO, getting into the PJM markets, the WECC, CERC, SPP, you name it, the developers that I spoke about in that first bucket have a very robust development pipeline that expand to pretty much any TSO that operate inside the U.S. So we're not taking just, hey, how fast can we deploy megawatts in ERCOT, but where is the load growth going to be? Where are the data centers going to be growing and taking a hard look at those project portfolios to make sure that we can position ourselves to take advantage of the load growth that will be coming out with investment-grade offtakes to continue to expand and leverage the portfolio as we've laid out in the presentation so far. So, as I previously mentioned, we've built our own internal scoring criteria to try and have an objective view of a project and where it stands today and what needs to be done to get it to NTP and ultimately COD. So the matrix we created can be broken down into 6 main buckets, and they're all risk-weighted to provide a well-rounded objective view on how a project can line up against another project. So project A versus project B, how does it score, where its strengths, where it's weaknesses, and that helps us really focus and prioritize which projects we want to enter in the diligence phase at a more comprehensive level. These six buckets are broken down into market, where market -- where is it located, how can we optimize the revenue stack, the economics of the project? Is it located in a good node location? Can we enter into capacity schemes, the interconnection status, does it have a signed SGIA, the engineering and construction, how far developed are the engineering and construction design drawings. The project schedule is the project schedule laid out by the developer or the seller achievable based off our in-house expertise. And then finally, land and permitting. Do they own the land? Do they have the permits needed to construct? So all of those taken into consideration really allow us to fit into really four different buckets. AAA is a 90-plus score, which is at the top tier, call it Tier 1, AA between 80 to 90, single A, 70 to 80 and BBB would be 60 to 70. The projects that we will bring into Asset Vault have to at least clear that A scoring, 70 to 80. And just for reference for the projects that we have acquired, they've all entered into that AA category range. So, Calistoga with the investment-grade offtake the PG&E, Gridmatic with the Cross Trails project, SOSA with investment-grade offtake and then Stoney Creek with a sovereign or government-backed investment or offtake have all scored into the 80 to 90s, more so on the mid-80s to upper 90s scale. So now moving into the targeted. And we touched on this briefly prior, but the targeted contracted versus merchant exposure. And the way that we see the market, it's a balancing act. We want to have, call it, 75% of the potential revenue from the asset contracted from an investment-grade offtake, but leaving some merchant exposure to capture that upside. And to date, all four projects that we own, operate or are in the middle of constructing have that fit that mix. And on average, across all four of them, we have a 75% investment-grade offtake ranging between 8 to 14 years and then a 25% merchant upside across that portfolio. As you can see, obviously, the more that you have that fully fixed toll, it weighs on the project economics, allows you to lever the project a little bit higher, as you can see by the bottom green bucket. On the other end of the spectrum, you can have a fully merchant project, and that can allow you to achieve levered returns in excess of 20%, but a loan-to-value ratio of maybe 15% to 20% as far as leverage is concerned. And so we're finding the sweet spot is let's get to that 40% to 50% loan-to-value of project finance, bring in the ITC to lever the project up more, and that leaves 10% to 20% of the equity of the capital stack for Asset Vault to contribute into. So this not only allows us to maximize the capital stack through project finance debt, but also allows us to maintain and capture the upside through our minority merchant exposure, not only during the life of the offtake, but then once the project is fully derisked from a debt perspective, then we have 100% of the merchant upside from there on out to capture at the Energy Vault developed level. So moving on to the portfolio mix that we touched on again briefly earlier. You can see that we're more heavily weighted in the U.S., and that is by design. The investment tax credit allows that dollar to go a little bit further than it does in Australia or Italy. We are developing assets in Australia, like the Stoney Creek project that we have in LTESA with the government offtake. There's a few other projects there that we're developing and hoping to bring to market within the next coming years. But the large focus is in the U.S. with really vibrant market. The investment tax credit allows us to lever the project up to 80-plus percent of leverage, really making that Asset Vault dollar go just a little bit further. To date, we've been heavily focused in CAISO and ERCOT. Some of the developers that we've been working very closely with have a portfolio of stand-alone energy storage assets, not only in ERCOT and CAISO, but also in PJM, which is a very target market for us. SPP, MISO, WECC, CERC, et cetera. There's a wide range and the TSOs are really starting to adapt the idea of stand-alone energy storage and the benefits it can add to their local grid. So we're expanding into doing a lot of due diligence in those other markets to further diversify the footprint that we have in the U.S., but also in Australia and Italy. And Michael will touch on this next slide here and a little bit later, but just to kind of highlight how the dollar can be stretched in the various markets that we operate with. You can see from the slide that and what we've alluded to in the previous slides, we're heavily concentrated in the U.S. for all the reasons I mentioned on the previous slide. There's just a lower amount of equity that's required to bring project to operations and the market sophistication is growing exponentially. So based on market trends and cost improvements by deploying all $375 million of capital raised under Asset Vault, we envision reaching upwards of 3.3 to 1.75 gigawatts of deployed projects over the next four years on all the target geographies that we've touched on today. I want to take just a couple of minutes to go into the two projects that I recently spoke about, the SOSA project and the Stoney Creek project. So the SOSA project was the first acquisition that we had under the Asset Vault platform. We previously had originally contributed Cross Trails and Calistoga. Last week, we finalized the acquisition of SOSA Energy Center, which is 150-megawatt, 300-megawatt hour stand-alone best project located in ERCOT North near College Station, so just north of Houston proper and has a targeted COD date of Q1 of 2027. Asset Vault advanced negotiations with an investment-grade offtake who will provide a revenue floor for the project while allowing the asset to main some level of the upside above the floor. We recently kicked off the project financing efforts for this asset and are aiming to achieve construction finance rolled into term project finance collateralized by the investment-grade offtake over an eight-year period. This will bring Asset Vault's total installed capacity to 215 megawatts, roughly 700 megawatt hours of assets under operation by the beginning of Q2 of 2027. And then finally, the Stoney Creek project, which we acquired in Q1 of 2025 is located in New South Wales, Australia. It's been awarded a 14-year LTESA, which is a long-term energy services agreement backed by the New South Wales government. The offtake provides a revenue floor with the ability to participate in upside above the floor, similar to every other contract that we've entered into under the Asset Vault platform. It will be one of the largest, best deployments to date, reaching 1 gigawatt hour threshold and one of the largest eight-hour lithium projects deployed globally. The anticipated COD will be in Q4 of 2027, at which point our operational portfolio will exceed 340 megawatts and over 1.7 gigawatt hours of energy. Asset Vault has also begun raising project finance efforts locally with the desired construction start date at the end of Q1 of 2026. The final piece I want to touch on is a strategy we call Flex IPP, and that is a way for us to participate in our energy storage solutions part of the business by leveraging our capital, our in-house expertise and showing our customers that we have skin in the game. We want this project to succeed. And the way the Flex IPP works is we enter into what we call a preferred equity structure partnership or a minority ownership where we will help contribute to the project achieving a step-up to increase the ITC and maximize leverage on the project. That is a way for us to not only showcase to our customers that, hey, we believe so much in our product and the way that we can operate, which we'll get to our operational efficiencies at a later point in time, but we're putting our money where our mouth is. We enter as a preferred equity partner, and we help more efficiently optimize the capital stack, really being a win-win for both sides. It's a win for Asset Vault by deploying capital with collateralized return profile, similar to what we've done with Orion as well as allowing us to deploy our EPC side of the business and LTESA side of the business. So it's really a win-win for the customer as well because they get to maximize leverage, create a higher ITC value and deploy less of their own equity so that they can stretch their dollar further to increase their footprint in their own portfolio. So, with that, I think the next...

I have some questions. Matt, I have some questions for you.

Sure.

Just coming to a couple of questions for you, Matt. One firstly is from an investor. What is your primary constraint today? Capital, internal resource, attractive opportunities? And if there were no constraints, could you accelerate this rollout?

Yes. I would say it's the latter. It's a buyers' market. There are plenty of opportunities that come unsolicited that come across our desk of individual projects, co-located projects, portfolio projects to look at across all ISOs in the U.S. So it's really a matter of having the capital to deploy effectively. There are plenty of attractive projects out there with the uncertainty of the administration and tariff regime, that brings a lot of uncertainty to developers that may or may not want to build, divest or put projects on hold, which is an opportunity for us to really expand and grow our platform as quickly as possible. So it's not a lack of resourcing or in-house capabilities, more so a fact of getting the capital in place, which we alluded to earlier, this is Fund I. We want Fund II, we want Fund III. And by raising Fund II, III, IV, et cetera, we can really move as fast as possible as the market allows.

Thank you. Two more, and then we'll move on to Michael. How are you managing the complexity of the business and leveraging the supply chain in this environment as you are now adding asset ownership to the mix?

Yes. We really -- and under Akshay Ladwa's leadership, we've really expanded and grown our supply chain, not only to avoid fiat concerns or tariff concerns, but really the whole mix. And so we have a robust supply chain without getting into too much detail of being able to source from several different countries, many of which are not as highly exposed to the tariff implications that we've seen over the last, call it, six months. So we -- and we're still continuing to develop that supply chain, both domestically and internationally.

Thanks, Matt. And internationally comment is appropriate because the same question from the same investor. You're already in multiple geographies with multiple customers. What key trends are you targeting or risks you are focused on mitigating?

Yes. I'd say in the U.S. is the main focus just with the administration, you have to try and manage and mitigate if there's going to be a new trade deal that's announced today, right now, potentially or in 6 months. And so having that robust supply chain, specifically for the U.S. in Australia and in Italy, we're not seeing the same headwinds that we're seeing in the U.S. And so with the supply chain that we have, not only out of China, but several other surrounding countries and areas that have not been affected by the administrative tariff implications or fiat concerns, we have a plan A, a plan B, a plan C to really whatever curveball thrill next, we have a plan in place to mitigate that risk. And so that's mainly focused on the U.S. because that is where we're seeing the most uncertainty on that side of the equation, but also in other regions as well in case that we face those same headwinds.

Thank you.

And with that, I'll hand it over to Michael Beer, our Chief Financial Officer.

Thanks, Laurence. Thanks, Matt. Well, as Rob had articulated, we've made a lot of headway since our May 2024 Analyst Day, in which we outlined the strategy of owning assets. We've been taken it one step further to really execute. And year-to-date, we have made in which we've now placed in service the Calistoga asset, the Cross Trails asset. We completed the project financing around both of those, raising upwards of $35 million and bringing that capital back to our balance sheet, creating a mechanism to monetize around $40 million in ITCs, investment tax credits. And of course, the most recently announced $300 million facility with OIC. Obviously, that sets the stage for the next five years and effectively allowing us to build about a 1.5 gigawatt portfolio of very attractive and diversified assets. You would have also seen recently, we had raised a $75 million convertible debenture. And so that allows us to continue to co-invest in projects and manage accordingly. But it's not just about balance sheet, it's not just about sort of the dollars and cents. It's also about having a very robust network of partnerships with other financial counterparties, insurance counterparties managing working capital, working with our suppliers for very attractive payment terms. All of this helps ensure a very, let's call it, bankable platform. And it's with that bankable platform that allows us to really accelerate and to leverage what we think is a very differentiated footprint, having the asset ownership arm in concert with the energy storage solutions. Kind of digging into that symbiotic business mix. Longer term, there will be substantial levered cash flows that will come from those owned assets, long-lived assets, technical life upwards of 20 years. And in the near term, we'll be able to generate significant cash flow associated with self-performing the project integration, the EPC work, software and long-term service agreements. And so there are a number of benefits and synergies really across this platform, and it's highly differentiated. And as a result, going from 2024, 2025, which was more or less the window that we had looked at during our last Analyst Day to what are we projecting now at the end of the decade in 2030, going from relatively infinitesimal exposure to the asset ownership segment here going to being over 70% of our gross profit by the end of the decade. I think it showcases how the company is going to become far more levered to the repeatable portion of the business rather than to the more lumpy episodic EPC side of the business, but there are significant synergies again, between both of those operations. The one thing -- there are two things that don't necessarily come through here. On one occasion, these are consolidated financials. And we are consolidating the financial performance of Asset Vault. And as a result, we won't be consolidating the self-performed EPC work that we will be performing on behalf of Asset Vault. But there is significant cash flow accretion associated with that, and we'll talk a little bit more about that in a moment. The other thing that this doesn't necessarily capture is the benefits associated with the Flex IPP platform. Flex IPP is our co-investment platform that allows us to take minority investments for third-party projects. That obviously drives additional third-party work, but there's also going to be added contribution, return on investment that would be included below the gross profit line, below the EBITDA line in other income. The other thing I would highlight, and we've not talked about this, the company does have tax loss carryforwards and accelerated depreciation that will shield, we think, a lot of the tax liability going forward and allow us to create a bit of a yield vehicle and distribute a far greater proportion of those cash flows than we would otherwise do if we were paying full boat on statutory taxes. Matt had alluded to this slide, and I think it's important to highlight our geographic presence. So looking at the $375 million in equity capital between both the common equity and the preferred equity within Asset Vault, it allows us to really lever up and build about $1.1 billion to $1.3 billion worth of operating assets. We expect most of those, 2/3 of those, 3/4 of those to be in the United States, where we can, again, stretch those dollars a bit further using those investment tax credit proceeds. And then energy capacity and power capacity, this multiple is really going to be a function of the duration and not all megawatts or gigawatts are created equally. Obviously, we, as a company, have focused on longer duration opportunities. We'll continue to do so. And case in point is the Stoney Creek project. Stoney Creek is an 8-hour system, 125 megawatt, 1 gigawatt hour of energy storage. And it just goes to show you that over the last couple of years, how battery prices have sort of fallen such that you can now build an eight-hour battery system in a country like Australia with no tax credits and the economics actually do pencil. And so I think our high-level thesis years ago has played out in our favor. But this, again, goes to show you how we're intending on deploying the first $375 million associated with Fund I to build this very substantial portfolio of diversified assets. And digging into that a little bit, we wanted to provide a bit more fidelity. How is this going to occur over the course of the next three or four years. And we sort of viewed this in really two steps. One, we've already executed on Calistoga and Cross Trails. Those assets are placed in service today. We've recently announced the acquisition of both Stoney Creek and the SOSA assets. Those are out being project financed as we speak. And having a clear line of sight to those four operating assets will drive an exit rate EBITDA of about $40 million in 2027. Then we look at how we're going to be scaling this portfolio beyond SOSA and Stoney Creek, which are the assets that we've talked in depth about earlier. And we can look at a number of other projects that we're evaluating today. In some cases, we have exclusivity or in negotiations for exclusivity, and we'll look at the timing of deploying these assets, again, largely biased towards the United States, but there are opportunities overseas in Australia and in EMEA. And over time, before 2029, we expect to have upwards of $100 million to $150 million of recurring EBITDA. Obviously, these are levered cash flows, and we'll talk more about that in a moment, but having $100 million to $150 million of target EBITDA exiting 2029, four years from now. This encompasses what we call Fund I. There are going to be future fundings. There are going to be additional opportunities to deploy capital. What we've really built here is the platform, and this platform can scale. Now looking at an individual project, and this is meant to be generic. This is meant to be for analysts to just understand what does the capital stack look like, how do we think about debt? How do we think about leverage? How do we think about ITCs and how do we think about the equity contribution from both OIC and Energy Vault. And you can see we basically showcased a generic $100 million type project in which obviously, there's going to be project DevEx at the beginning. There's construction CapEx and EPC and integration margin, which our sister company, Energy Vault, as the entity that will be self-performing this CapEx would be the beneficiary of. And when you look at the actual capital stack itself, the sources of that capital, project financing typically comprises around 40% to 50% of the project CapEx. So let's call that $40 million to $50 million. ITCs are anywhere between 30% to 40%. However, we're also going to be getting the benefit of the fair market value step-up, right? Obviously, assets are worth far more than simply the construction cost. And then lastly, the residual amount would obviously have to be borne by the equity partner, both ourselves and OIC. And so Asset Vault would be contributing anywhere between $10 million and $20 million in that particular example of equity, and it's divided obviously, four parts to OIC, one part to Energy Vault. And these are all to yield a 15% type levered IRR. When we say levered IRR, we're obviously leveraging the ITC benefits. We're leveraging the project financing benefits and leveraging the equity capital by our preferred equity partner, OIC. Interestingly, there are a number of other sort of intercompany cash flows. And these are worth noting because as you're modeling the business and thinking about this, obviously, Asset Vault is going to be developing assets, going to be contracting with our sister company, the Energy Storage Solutions business for that EPC and integration service. And so that 15% type margin that I had articulated in the prior slide would flow back to Energy Vault. There's also software and long-term service agreements and support services that will be offered by Energy Vault to the Asset Vault portfolio, keeping it relatively asset-light in terms of personnel. There's also going to be benefits associated with tax loss carryforwards, accelerated depreciation, allowing for this to be a bit of a yield vehicle and allowing for more of that cash flow to be used to both for debt service as well as distributions to our preferred equity partner. And net-net, at the end of 2029, running with an annualized EBITDA of about $100 million to $150 million. We wanted to look at a pro forma balance sheet, what do we think the debt balance and preferred equity balance would be in that same sort of type time frame. So at year-end 2029, building over $1 billion of operating assets, we would expect to have project debt on the order of $450 million to $550 million, and that's obviously net of any sort of amortization payments and paydown that has occurred over the next five years. The preferred equity, this is assuming all $300 million of OIC's preferred equity is deployed, but just highlighting that there's a 1.65x MOIC or a 12% IRR, whichever is greater. So it gives you a sense. But again, remember, these project EBITDA figures are levered cash flows. And so one also needs to take into consideration the other capital that played a role in us constructing that very attractive portfolio. And then we wanted to look at as the business is evolving, we believe this platform merits a re-rating, right? Looking at comparable companies and comps in the industry, whether it's a clean energy index, IBP type index, a yieldco type index, these are companies that generally trade on a one-year forward EV to EBITDA of between 15x and 18x. And so obviously, thinking about our company as a platform that can yield $100 million to $150 million of recurring EBITDA exiting 2029. Many of you analysts, obviously, will do the math that you're going to do. But this is how we're viewing the company and why we believe this makes such an attractive investment from our perspective and bringing in our ecosystem partners. And lastly, I just wanted to highlight, we've not talked about much of the rest of the business this year. Obviously, the contribution from Cross Trails and Calistoga has just started with those assets now placed in service, but wanted to give line of sight around our 2025 objectives. Revenue, again, reiterating guidance at the low end of the revenue range between $200 million and $250 million. Our gross margin expecting to be in that average level of about 14% to 16%, in line with where we've been effectively since we've been a public company. And we expect to end the year with total cash balance of $75 million to $100 million. Obviously, that's going to be dependent upon how we deploy capital and the timing of certain project financings and so forth. So that's the end of my prepared remarks. Laurence, did we want to perhaps address some Q&A?

Yes. I've got some questions for you, Michael, if that's okay.

Sure.

So first one from Justin Clare of ROTH Capital Partners. What could drive EBITDA to higher end versus the lower end of the anticipated $100 million to $150 million range?

Yes. Terrific question, Justin. So I wanted to dig in a bit more on this slide that I pulled back up here, Slide 35. And you can see, obviously, we have a clear line of sight of how those first four projects are going to be -- the capital going to be deployed in those projects coming online and the timing therein. Obviously, these projects we've talked quite a bit about. There's a lot of detail in the deck. So it should give you a lot of confidence around the certainty of that. In terms of future projects, we sit at the nexus of some really terrific deal flow. And over the last year, 1.5 years, we've really built out the capability. And as Matt talked about, our ability to screen for those projects and identify those that, frankly, we want to pursue and those where we believe we can leverage our internal capability, whether it's supply chain, whether it's technical capability to extract some additional value. and drive further upside. Also, as we continue to build out our relationship with all of our offtake partners, having that offtake in place and the ability to go to market and have a really optimized capital stack, it all plays into the equation, and this is really very, very important. But as we've talked about, our ability to lever up that $375 million of asset vault equity, $300 million of which comes from OIC, we believe we'll be able to construct that very attractive, very diversified portfolio. And this is a buyer's market. We have -- we're a glut of riches in terms of opportunities that we tend to deploy capital. And again, this is only the first of multiple funds and future funding rounds associated with this platform. And so here, we're calling it Fund I, Fund II, Fund III, but obviously, it's part of a broader long-term vision of really continuing to build out this portfolio over time.

Thank you, Michael. I have two questions from Tyler Bisset from Goldman Sachs. Oh, sorry, Rob.

Laurence, just to mention just on top of what Michael said to the question of how do we get to the upper end of that. We have not reflected the impact of what's happening in AI infrastructure here, okay? So these are -- we've been talking about the $100 million. You notice we're talking about it as $100 million to $150 million. If you do the math on the 340 megawatts that we've contracted, right? And we've said that's $40 million of EBITDA. If you can do the math on that, that's above $100,000 of EBITDA per megawatt. So we're already above and you think about 1.5 gigawatt that we've mentioned this is going to enable. So that already gets us close to that $150 million on just the projects we're developing. This is not reflecting what we've announced today, for example, in the collaboration with Crusoe as well as just generally what's going to be happening on the AI side. Go ahead.

Rob. So again, two questions from Tyler Bisset from Goldman Sachs. First one is, so how are you recognizing EBITDA from projects funded by OIC, but the cash is going to OIC, and they get the 12% IRR on top of those cash flows. Won't it be dilutive to repay the OIC funding if you aren't already receiving any cash flow from the projects. Please help me understand the mechanics of these cash flows.

Yes. Great question, Tyler. So, as we've highlighted, these are levered cash flows, right? We are levering our $375 million in equity and adding both project debt and ITCs to build what is the 1.5 gigawatt portfolio of assets. That portfolio of assets is generating $100 million to $150 million of EBITDA. And as we're showcasing here, obviously, there's going to be -- when you do an EV to EBITDA calculation, one would need to remove the net debt and also take into consideration anything else that allow you to generate those levered returns, right? And so that would be inclusive of the paydown of the preferred equity. It's at our election, how we want to pay down those distributions in the near term, whether it's PIK payment in kind or whether we want to make cash distributions to effectively work down that from a redemption perspective over the next five to six years. So it's really at our election. And obviously, these assets can always be refinanced and so forth going forward. Now I think what's important here, everything we're talking about is over the next five, six years, these are 20-year useful life assets. And so once the debt is paid down, once these are constructed, once we've satisfied our preferred equity obligation, you then have seemingly 13 to 15 years in which you're going to be benefiting from those recurring earnings streams. So, hopefully, that's helped address the question.

And the second question, Michael, from Goldman Sachs. Is your drawing $200 million all from OIC in the next six months and NLGV has to commit $50 million? Or will you be drawing $160 million from OIC and you're committing $40 million?

Yes, terrific question. So as we mentioned when we closed the transaction, $200 million has effectively already been sort of earmarked. Some of that is associated with the recapitalization of Calistoga and Cross Trails, right? We effectively self-funded that off of our balance sheet before Asset Vault existed. And so now these assets have been injected into the vehicle and in order to preserve the 4:1 ratio around equity dollars, there's a bit of a recap. Around SOSA and Stoney Creek, just given the CapEx numbers associated with those particular projects and also the consideration where we will be self-performing the EPC work that's what that $200 million capture. So that $200 million is what would be drawn from the OIC funding. Our portion of the contribution is a combination of both cash and services that we're contributing around the construction of those vis-a-vis the EPC and integration capabilities.

Thank you, Michael. One more question. This is from Sid Rajeev of Fundamental Research. What is your gross margin for Asset Vault businesses? Will it be higher than typical IPPs?

Yes. We talked about this a little bit to kind of give you a flavor for the overall mix. The traditional EPC and integration business, we've talked about quite a bit, has an average margin of about 15%, right, anywhere between 15% and 20% sort of historically. In terms of Asset Vault and owned and operated assets, the gross margin on that business is 75% to 85%. So it's substantially different. Obviously, there's different asset intensities associated with that, but that probably gives you a good sense. And those numbers are really similar to what we disclosed in the past, actually at our prior Analyst Day.

Thank you, Michael.

And with that, I'd like to hand it back now to Robert Piconi.

Okay. Great. Laurence, thank you very much. Just to wrap it up here, one thing to mention. There were quite a few questions coming in on the Q&A. So just to let everyone know, our earnings will be announced in about 1.5 weeks. We will dedicate, I think, some time on that to go through, I think, some of the other questions that have come in and make sure we're providing that visibility. Of course, post earnings, Michael will be available to the analyst community, and we're happy to set up other sessions when we get into the non-blackout period post our earnings. I think just to wrap it up here now a few things, and I say five things just to mention here. You heard a lot about Asset Vault. That's why we scheduled this to, I think, provide a little bit of a deep dive. I think you got hopefully a sense today of both the structure, how it operates, how cash will flow the fact that we are leveraging these synergies between the expertise we bring to the table, why we believe that's going to result in higher IRRs in terms of as we look at these capital investments and how we're managing that. Infinitely scalable as a platform. Not all the funds we do will be, I think, structured in the same way. I think as we look at different markets, there may be different types of structures that can apply, for example, to different segments and as we think about asset ownership over time. I think as all of you are aware in the investment community, there is plenty of capital out there. But I think very importantly, we have to be very prudent and judicious, especially with looking at some of the things available in the market. You heard Matt Brezina mention that it is a buyer's market. We get daily unsolicited opportunities but we are very careful also with our process to ensure that we are investing at the right points of interconnect. So hopefully, you've got, I think, from a point one on Asset Vault, a better understanding of some details and how that's going to work and why we're excited about having that vehicle as a platform. Secondly, this works and we're differentiated because of the nature of the expertise of our team. We're applying 30- to 40-year individuals of experience with the grid, with energy storage, with different technologies with applying software to various technologies and how we ensure safe, reliable, resilient, high availability. I want to emphasize that we have over 99% availability uptime on all the assets we've deployed, whether something we've turned over to customers in our first few years and we're doing a long-term service agreement to monitor or the initial projects that have just come online that we're owning and operating. So I think that's fundamental and should give investors, I think, that confidence. I'd say third, this is an attractive market, and it's growing. Energy storage is growing 3x to 4x what the growth in that energy demand we're seeing and just generally. I think we're sold out on power in the U.S., for example, at least through 2030 here. So I think being creative of what technology we deploy at what points of interconnect in the grid and working with very innovative groups that are transforming how these assets and infrastructure is getting deployed for AI like Crusoe, for example, I think our knowledge and combining knowledge with other partners and leveraging each other's strengths is going to accelerate how we think about that. And that gets to the fourth theme that I hope has come out a few times here around speed and velocity. That doesn't mean we're not being prudent with how we deploy capital or jumping to quick decisions. I think we've made those points. But the market is moving. I think those that can get things online reliably and manage assets faster in a fashion that will meet market needs, but give a lot of credibility for how you perform and deliver. I think those companies that have those characteristics are going to be the ones that are successful. So that is definitely -- has been our theme. The last 12 months and for those that follow us closely in terms of how we've invested in the first two projects off of our balance sheet, so using our own cash to invest in these projects and then the confidence to actually get them project financed and then execute and get it done in a very dynamic and volatile market. Just to highlight, we've had a lot of things going on in the tariff regime here and a lot of the trade discussions that had a big impact on us in the first half of the year in terms of some of the uncertainty of our supply chain. I think Akshay Ladwa, who was mentioned by Matt Brezina here, who's listening in on this call. He's in India this week, has done a great job in managing the supply chain and giving us options regardless of the outcome. But we've had a lot to manage through and I think deal with, but focusing on our customers and executing on our commitments has been fundamental to that. It is a culture we have as a company. Those that have been investing with us from the beginning, you see how the markets have changed, you see how the dynamics in the market, what's happened with lithium-ion pricing and how that's sort of reset benchmarks for how we think about storage and duration and which technology can apply. We've had to adapt to that. And I think we've done a pretty good job of ensuring that we're always going to be robust here in the market and meeting market needs. And then finally, and that's what this is all about, this should all show up in the end in profitability and cash flows that drive our share price. And I think what we've presented today and if you look at the nature of what we've executed already, the growth in that backlog, there's a reason that's growing. That is a contracted backlog of about $1 billion right now. It will continue to grow. Despite us getting projects and deployed, we have a large ramp coming this quarter, this Q4 now. We're excited to talk about our Q3 results, which we will be doing, as I mentioned, in 1.5 weeks. But we are -- have quite a lot we're going to be delivering here this quarter. And while that will then come out of backlog, you can imagine with also having Asset Vault in the platform now and how quickly we went to the very first project there with the 150-megawatt project in Texas we announced just 1.5 weeks ago. You can imagine that a lot of those things as we contract them, and they are going to go into our long-term contract backlog. So that all should be reflected in the confidence then in the future of those cash flows as that backlog grows, this becomes a game of execution. I think we've proven we've been pretty good at that here the last years if we built out energy storage projects and now owning and operating them efficiently in the market. So, with that, I want to thank everyone for your time and joining. We're, and being efficient with our time, we're going to give people back 30 minutes. We had scheduled this for two hours. And I didn't know if there were any other questions. Laurence, was there anything else that needed to be asked or we're okay?

No, I think you've covered those, Rob. And then we'll compile any others we can, as you said, cover in our earnings call.

Okay. Great. Well, thank you, everybody. Also just a final thanks and call out to all the employees at Energy Vault and the work you're doing every day, the collaboration with our partners, a lot of our investors here and shareholders that have been continuing to invest in the company as we've seen, in particular, the last few months and look forward to sharing more here in the coming weeks. Thanks, everyone.