HA Sustainable Infrastructure Capital, Inc. (HASI) - 10-Q Summary
Business Context and Reporting Period
Company: HA Sustainable Infrastructure Capital, Inc.
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: June 30, 2026
Business Overview: HASI invests in sustainable infrastructure assets advancing the energy transition, including behind-the-meter (BTM), grid-connected (GC), and fuels/transport/nature (FTN) projects. The company manages approximately $17.6 billion in assets, with a portfolio of $8.2 billion on its balance sheet.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Total Revenue | $120.8 million | $85.7 million | $245.0 million | $182.6 million |
| Net Income (GAAP) | $131.8 million | $99.8 million | $58.0 million | $158.0 million |
| Net Income Attributable to Controlling Stockholders | $128.6 million | $98.4 million | $56.7 million | $155.1 million |
| Diluted EPS | $0.92 | $0.74 | $0.43 | $1.18 |
| Adjusted Earnings (Non-GAAP) | $98.7 million | $75.0 million | $200.5 million | $153.1 million |
| Adjusted EPS (Non-GAAP) | $0.75 | $0.60 | $1.52 | $1.23 |
| Cash and Cash Equivalents | $249.9 million | $110.2 million (Dec 31, 2025) | $249.9 million | $110.2 million (Dec 31, 2025) |
| Total Debt (Recourse) | $5.9 billion | $5.1 billion (Dec 31, 2025) | $5.9 billion | $5.1 billion (Dec 31, 2025) |
| Debt-to-Equity Ratio | 1.7 to 1 | 1.7 to 1 (Dec 31, 2025) | 1.7 to 1 | 1.7 to 1 (Dec 31, 2025) |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 41% year-over-year for Q2 2026, driven by a 25% increase in interest and rental income, a 102% increase in gains on sale of assets, and a 435% increase in origination fees.
- Net Income Volatility: While Q2 2026 net income rose 32% compared to Q2 2025, YTD 2026 net income decreased 63% compared to YTD 2025. This decline is primarily due to a $146 million decrease in income from equity method investments, largely attributed to a $70 million impairment charge and the non-recurrence of tax credit allocations from the prior year.
- Impairment Charge: The company recorded a $70 million other-than-temporary impairment loss on two equity method investments in Q2 2026 due to changes in assumptions regarding market discount rates and project underperformance.
- Debt Refinancing: The company issued $600 million in Junior Subordinated Notes and $400 million in Senior Notes in the first half of 2026. Proceeds were used to redeem $450 million of 2027 Senior Notes and $600 million of 2026 Senior Notes. In July 2026, the company replaced its prior credit facilities with a new $2.25 billion unsecured revolving credit facility and a $400 million term loan facility.
- Consolidation: In Q2 2026, HASI exercised protective rights to consolidate a project company, eliminating $126 million in receivables and adding $165 million in in-construction fixed assets to the balance sheet.
Guidance, Outlook, and Risks
- Outlook: Management maintains a target leverage ratio of 1.5 to 2.0 times and a fixed-rate debt percentage of 75% to 100%. As of June 30, 2026, fixed-rate debt (including hedges) was 95% of total debt.
- Liquidity: Total liquidity stood at $2.2 billion, comprising $250 million in unrestricted cash and $1.8 billion in unused capacity under the unsecured revolving credit facility.
- Dividends: The board declared a quarterly dividend of $0.425 per share for the second quarter of 2026, consistent with the first quarter.
- Risks:
- Interest Rate Risk: The company has $278 million in unhedged variable-rate debt. A 0.5% increase in benchmark rates would increase quarterly interest expense by approximately $0.35 million.
- Credit Risk: Exposure to obligors in commercial and government projects, though mitigated by structural protections and insurance.
- Equity Method Volatility: GAAP income from equity method investments can fluctuate significantly due to tax credit allocations and hypothetical liquidation at book value (HLBV) accounting, which may not reflect economic cash returns.
Key Facts for Investor Verification
- Impairment Details: Verify the specific projects subject to the $70 million impairment and the current operational status of these assets.
- Equity Method Adjustments: Review the reconciliation between GAAP net income and Adjusted Earnings to understand the impact of tax credit allocations and HLBV accounting on reported profitability.
- Debt Maturities: Confirm the maturity schedule of the new Senior Notes (2031, 2033, 2034, 2035, 2036) and Junior Subordinated Notes (2056) and the terms of the new credit facilities entered in July 2026.
- Co-Investment Vehicle: Monitor the funding status and performance of the CarbonCount Holdings 1 LLC (CCH1) joint venture with KKR, where HASI has committed $1.5 billion.
- Portfolio Yield: The average yield on receivables and debt securities was 9.5% for the six months ended June 30, 2026, compared to 8.5% in the prior year period.