Energy Vault Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 7, 2025

Key Takeaways

  • Positive Sentiment: The company secured a $300 million preferred equity investment to fund over $1 billion in CapEx for its 1.5 GW initial project portfolio, with non-dilutive terms and milestone-based equity participation.
  • Positive Sentiment: Energy Vault’s new Asset Vault arm is expected to generate over $100 million of annual recurring EBITDA from projects placed in service over the next two to three years.
  • Positive Sentiment: Backlog rose 47 percent quarter-over-quarter to $954 million and year-to-date is up 120 percent, while Q2 revenue more than doubled year-over-year to $8.5 million.
  • Positive Sentiment: Adjusted EBITDA loss narrowed to $13.7 million from $15.4 million a year ago, and cash balances improved 23 percent sequentially to $58.1 million.
  • Negative Sentiment: Forward-looking statements depend on regulatory approvals, anticipated ITC proceeds and customary closing conditions, exposing the execution timeline to potential risks.
AI Generated. May Contain Errors.
Earnings Conference Call
Energy Vault Q2 2025
00:00 / 00:00

There are 5 speakers on the call.

Speaker 4

Thank you. Hello and welcome to Energy Vault's 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 in results due to a variety of factors.

Speaker 4

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 Piconi, our Chairman and Chief Executive Officer. At this time, I'd like to hand the call over to Robert.

Speaker 1

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 off-take 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.

Speaker 1

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 operation of our storage IPP own and operate projects, which we call Asset Vault. I want to go over a little bit about what this means as highlighted from the announcement.

Speaker 1

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 3 gigawatt development pipeline of projects in the U.S., Australia, and Europe. In addition to the first two projects recently placed in service in the U.S. 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.

Speaker 1

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 to 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.

Speaker 1

in 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 are 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 to deliver. We will 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.

Speaker 1

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. Given project timing, we initially used our balance sheet to get the first two projects underway here in the U.S. 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.

Speaker 1

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 have contracted with in Australia the last year, and even public utilities who are not in the business of taking any risk. Generally here, bankability is fundamental.

Speaker 1

As part of their due diligence, all of these groups I just mentioned have talked to our prior customers or partners where we have executed projects. I think the results now and how we are 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.

Speaker 1

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 Cross-Trails 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 2024, aided by the improved gross margins just mentioned and some of the reduced operating costs. Again, we took some additional steps this past quarter for an additional $6.5 million in cost savings initiatives. That's an annualized number while continuing to invest, for example, in Australia to support some of the long-term growth and initial project starts there.

Speaker 1

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 Cross-Trails 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.

Speaker 1

Finally, 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, 1-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. I want to call out our local Energy Vault leaders, Lucas Sadler and Raymond Gillfetter and their teams, a legal team from Hamilton Lock locally, our development partner, Ross Warvey, 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.

Speaker 1

With that, I'll turn it over to Michael to go over the details of the financial results. Thanks, Rob. Turning to our latest backlog and developed pipeline, as you highlighted, the company currently maintains a revenue backlog of $954 million, up 47% versus this time last quarter and 120% year to date, driven by new third-party projects and service agreements, as well as long-term off-take agreements in both the U.S. and Australia. Notably, this includes our contracts with Consumers Energy, a new long-term service agreement with an existing customer, and our largest project in Australia to date, as you mentioned, the recently acquired 125-megawatt Stony Creek project in New South Wales, which is supported by a 14-year off-take agreement discussed previously. These figures compare to the $550 million plus in recognized revenue or 1.1 gigawatt-hours in executed projects to date, as depicted on slide five in the earnings presentation.

Speaker 1

Meanwhile, our total developed pipeline for our advanced projects, either third-party and/or those that we would look to own and operate, is around $2.4 billion or roughly 6 gigawatt-hours, which we expect to be strengthened by the launch of Asset Vault, Energy Vault's build, own, and operate arm, detailed in today's announcement and outlined in the last slide of our earnings presentation, which I'll discuss further later on. Turning to Q2 results, on the revenue side, we delivered Q2 revenue of $8.5 million, up 126% year over year, and that's driven by activity across our Australian project portfolio and the first month of commercial operations at Cross-Trails in Texas. GAAP gross margin of 29.6% was up from 27.8% a year ago, reflecting a stronger regional and business revenue mix.

Speaker 1

On adjusted operating expense, we're $16.2 million, improved 2% year over year despite the increased revenue and gross margin, demonstrating continued cost discipline. We implemented an additional $6.5 million in annualized savings during June and July as the company continues to refine its long-term strategy, offset by strategic investments in Australia to support that growth. On the adjusted EBITDA front, excluding stock-based compensation and other one-time items outlined on slide eight of the earnings presentation, adjusted EBITDA improved 11% year over year to a loss of $13.7 million compared to a loss of $15.4 million in Q2 2024, driven by increased revenue and gross margin, as well as a slight decline in operating expenses. From a cash and project financing perspective, we ended Q2 with $58.1 million in cash, up 23% sequentially and at the upper end of our guidance range.

Speaker 1

Now turning to our business outlook, reflecting the timing of U.S. battery deliveries associated with the Consumers Energy projects and other project timelines in Australia, we're estimating full-year 2025 revenue of between $200 and $250 million within the prior guidance range. From a cash and project financing perspective, we are estimating between $60 and $75 million in total cash at the end of the third quarter, unchanged versus prior guidance, and including the Cross-Trails project financing of $18 million, which was completed in July, with another $27 million in total net ITC proceeds anticipated in September, offset by quarterly operating expenses, working capital, and other capex. Introducing Asset Vault. Earlier today, Energy Vault announced that it had entered into an exclusive agreement for a $300 million preferred equity investment subject to customary regulatory and closing conditions estimated in the next 30 to 60 days.

Speaker 1

By partnering with a leading multi-billion dollar infrastructure fund, we expect to enable over $1 billion in capex spending for about 1.5 gigawatts of projects under development in the U.S., Australia, and Europe. The project portfolio is prioritized with a clear monetization strategy supported by long-term off-take agreements with bankable partners and/or in attractive merchant markets. Further, by leveraging Energy Vault's existing EPC capabilities, as well as a host of other services we provide today to our third-party customers, we can unlock notable synergies across the business, including larger volume commitments with suppliers, etc., adding incremental cash flows and liquidity to the parent company. As part of this strategy, as outlined in our May 2024 Analyst and Investor Day, we've officially placed both the Calistoga Resiliency Center in California and the Cross-Trails project in Texas into service and have also completed their respective project financings.

Speaker 1

These two assets are expected to generate nearly $10 million in recurring annual EBITDA going forward. Further, the recently announced Stony Creek project serves as a major milestone, resulting in nearly 1.4 gigawatt-hours of total capacity under management once that project is complete in 2027, with construction expected to commence in Q1 2026. Once operational, that project is expected to generate roughly $20 million in annual recurring EBITDA, further accelerating our path to $100 million in recurring EBITDA goal over the next three to four years. In conjunction with the close of the $300 million preferred equity investment, again subject to customary regulatory and closing conditions, Energy Vault intends to host a virtual Investor Day to provide a comprehensive overview of the Asset Vault portfolio, its project pipeline, financial projections, and accounting treatments surrounding the consolidated subsidiary, as well as the long-term strategic vision.

Speaker 1

Additional details will be provided upon closing. With that, I'll hand the call back over to Rob. Michael, thank you. Before I open up for questions, I again want to thank all the employees of Energy Vault that have been working diligently across the globe, progressing a lot of the things we've discussed today. I think not a small milestone for us in progressing now toward a commitment related to $300 million to take our project portfolio now forward. I really want to highlight and emphasize, I think from an investor perspective, a very strong focus of the company now on executing those projects, which I think we've done a very good job of across the world. With that, operator, we'll turn it back to you for any questions.

Speaker 2

Certainly. At this time, if you would like to ask a question, please press the star then one on your telephone keypad. You may withdraw your question at any time by pressing star then two. Again, it is star then one to register for a question. We can take our first question from Justin Clare with ROTH Capital Partners LLC. Your line is open.

Operator

Hi guys, thanks for taking the questions here and congratulations on the preferred equity transaction. I guess I first wanted to start on the preferred and just wanted to see if you'd be able to share any more details at this point on the return structure, what the preferred dividend yield might look like, or any milestones that are tied to the equity participation in Energy Vault Holdings Inc., or do we need to wait until the conference call coming up for that?

Speaker 1

Yeah, thanks Justin. We purposefully are scheduling this virtual call with investors just post the close of that, where we're going to be stepping through and walking through all that. For regulatory and compliance purposes, we aren't going to get into that detail right now, but we're looking forward to walking people through all of those things at the investor call that we're going to be hosting just after the close.

Operator

I think one way to sort of think about it, and there's a slide in the deck, slide 14, that sort of talks about the broader portfolio. Obviously, these projects and their sort of intended levered IRRs would adequately support any project financing and/or distributions associated with the preferred equity.

Speaker 1

Yeah, Justin, there's some good content in there where you'll be able to make some assumptions based on the levered IRRs that are included and assumptions in and around the financing.

Operator

Okay, got it. I guess maybe at this point, not specifically on the preferred equity, but you had talked about, you know, a billion dollars of CapEx. Maybe you could speak to, you know, more broadly what the financing strategy there is in terms of project level debt versus tax equity versus the potential equity contribution from Energy Vault.

Speaker 1

Yeah, no, certainly. We would expect that much of the portfolio will be in the U.S. We haven't necessarily articulated what the split will be, but it'll be U.S.-centric. As a result, there will be pretty notable ITC-related benefits. We obviously now have some comfort around recent guidance that was given around those sort of storage ITCs. The way I would think about it, on a, let's call it, $100 million project, one could assume virtually half of that would be covered through normal course project financing. You should assume anywhere between $30 to $40 million, 30% to 40% of that would be covered vis-à-vis the ITC mechanism. Obviously, there are sort of costs in transferring those ITCs, but you could use a 30% type figure. Of that remaining 20% related to the equity contribution required, there would be some split between common equity and the preferred element.

Speaker 1

Hopefully, directionally, that gives you a sense. Quite frankly, this is the same sort of split that we had for, say, the Cross-Trails project and even that with Calistoga. Having just gone through this process, constructing financing, making sure that we have a really optimized capital stack post-COD, it's a playbook that we know well now.

Operator

Got it. Okay, that's helpful.

Speaker 1

One thing just to add in terms of also use for the fund, and this was mentioned in the announcement, the other purpose of the fund is to invest in DevEx or some of the earlier development phases you go through when you're getting projects through different phases from the permitting phases, design approvals, and things. That's the other use of the fund. We also have flexibility to take minority interests in projects, for example, where we're providing storage solutions and to work a little more closely with our customers in that regard as partners. It really gives us a lot of flexibility, I think, in how we look to grow all pieces of the business.

Operator

Okay, got it. That's helpful. Maybe if I could just sneak one more in here. I'm just looking at slide 14 where you have kind of the COD dates for projects in the pipeline here. It looks like, you know, close to a gigawatt of projects potentially in 2027 are planned for completion. Just wondering if you could share a little bit more detail on where those are in the development process. Have you secured permits? Has interconnection been secured? Are the contracts already, or are the projects already contracted? Any of these additional details there would be helpful.

Speaker 1

Yeah, sure. I think just for some visibility, we had, in the past, also provided a chart online that showed actually some of the projects and where they were in their development phases. You should have had that online. Stony Creek, of course, is one of the larger ones that we announced, and the timelines I think are included in that announcement there in 2027. You can assume there's a few projects more in Australia that are progressing through, let's say, mid-development and some of them to later development stages here shortly this year. Also, a few in the U.S. are in, I'd say, mid-development stages. There's one to two in Europe as well that we're progressing.

Speaker 1

Primarily, I'd say a lot of these projects are going to be four, and in some cases, some of them are eight-hour durations, which is, I think, getting a little more common in Australia, for example. I think the U.S. and Europe are closer to more the average of the four hours. As I said, I think they're all set from their development. As we look at funding and moving them through, we're looking at having a lot of them come online in 2027.

Operator

Okay, great. Thank you. I'll pass it on.

Speaker 2

We can move next to Noel Parks with Tuohy Brothers Investment Research Inc. Your line is open.

Speaker 3

Hi. Congratulations on the deal. I totally understand that you want to be sort of judicious in what you disclose at this point. I was wondering if you could just talk in the broadest terms about maybe what is and isn't implied in the exclusivity of the arrangement with the new preferred financing. I mean, you mentioned, for example, actually, that's a sort of a separate topic. I'm just curious about that.

Speaker 1

Yeah, I'd say we have an agreement that's been executed. It also includes exclusivity at this stage, hence the reason we were comfortable and also the partner was comfortable making the announcement that we did. As we said, you know, subject to the customary types of, you know, procedural and closing conditions here at this point. There's really not, the exclusivity is just that in and around this specific Asset Vault and the preferred equity toward funding these projects. That's the, let's say, the scope of the exclusivity.

Speaker 3

Great, thanks. This is kind of exactly what I was wondering about, whether it implied a similar relationship to other projects or, you know, parent company operations. I was pretty excited to hear that the transaction was accomplished with an infrastructure fund. I feel like one question I've certainly been asking over the quarters is what were the nature of the types of parties you've been talking to for additional funding. I had been sort of wondering how well or slowly those discussions have been going on. I just wonder if you could, again, talk just very generally about what was involved in sort of landing the plane, getting to this deal, and just a rough idea of how long you've been in talks or in the works with this particular party.

Speaker 3

I'm thinking of that as kind of a bit of a, to give a bit of a flavor for what subsequent types of deals might, you know, how they might transpire.

Speaker 1

Yeah. I think I'll point to some things publicly we announced and said too. Late last year, we actually made an announcement because we had retained Jefferies to support us a bit in looking at this, the own and operate segment in the energy ecosystem here around energy storage and really started to think about, I think, earlier this year on, you know, starting to look at going to market and looking at the types of infrastructure players and partners that would fit what we're doing. We've obviously been in the middle of also delivering two projects. I think that's something, Noel, that folks were looking at as we were looking to close on projects that we had committed, like Cross-Trails in Texas, which actually we delivered a bit early and was up running, you know, 100% availability, for example, in July.

Speaker 1

It came up, you know, as planned end of May and into June. Everything performing well. I think as funds looked at us and knowing that we're, you know, getting in now to owning and operating, I think them seeing progress on how we're executing those projects, that probably influenced some of the timing, although I think it sort of coincided from when we started to really seriously start to get into the market earlier this year and start to target certain infrastructure funds that we thought would be interested in this and would be good partners with us. I think some of that timing a bit coincided. In fact, also we just had the Calistoga ribbon cutting, of course, last week up in Northern California, and that's for the Pacific Gas & Electric system. I think those, our ability to execute those, and by the way, progress project financing.

Speaker 1

The diligence you get into asset by asset when you get into those. I think, you know, folks seeing that we progress those, got them financed, closed on investment tax credit agreements as well, as Michael referenced about some of that cash that's coming in. I think all of those factors, while in parallel, us, you know, having the systems we had turned over on our traditional business, all operating well, seeing the expansion in Australia on the two construction projects that are now underway. I think all of those factors went into some of the timing here and the readiness, and I think the interest we had from multiple parties to look at working with us. I'll highlight the last thing I'll say is, you know, what I said in my discussion in and around the deal announcement and what's behind it.

Speaker 1

As a part of all that diligence, people did, they will automatically want to speak to the customers that we've delivered or executed projects for. You know, how did we do through the process? How did we manage supply chain? You know, no project goes perfectly or even close. In some projects, there's problems you have to manage. We've had all the above, but how you manage those things in front of the customer, how you deliver, you know, how the systems are operating now, all of that, all those factors, I think were net positives as people jumped in and did the type of diligence that I mentioned in some of my opening remarks. Hopefully that's helpful to you.

Speaker 3

It is indeed. Thanks a lot.

Speaker 1

Okay, thank you.

Speaker 2

We can move to our next questioner, who is Michael Renoff with Skogan Capital. Your line is open.

Speaker 3

Hey Rob, congrats on the OIC announcement today. Could you explain how the Asset Vault business relates to the current business and how the $100 million of EBITDA on the Asset Vault pull-out fits in? You mentioned additional cash flow streams accruing to the holding company. Can you just walk through that for us? The market cap is still well below $300 million. You're talking about $100 million of EBITDA. Is this, you guys are talking about additional revenue and margins for you guys?

Speaker 1

Sure. You were breaking up a little, but I think I got the gist of it. By the way, it's a great question. In the announcement, we did spend, I think, a few dollars on it, but I'm glad you asked it because I'll spend a little bit of time on it. The $100 million of EBITDA we mentioned is specific to the projects that are in development now that this $300 million is targeted at delivering. That's specific to Asset Vault and our own and operate portfolio. The first point is, as you sort of asked or insinuated in your question, that is a piece of Energy Vault's business.

Speaker 1

That is, and would be, complementary to our energy storage solutions business, which are some of the projects we're executing today in Australia, the one for Consumers Energy, for example, that we announced that's starting deliveries in Q4, where we're delivering systems and doing the commissioning and then doing long-term service agreements. The Asset Vault, that $100 million on this first set of projects that are getting funded, is in addition to what would continue to be our synergistic energy storage solutions business. That's number one. I think the other question you asked, as I understood it, if I heard you right, is how does that relate back into Energy Vault? How does the Asset Vault business relate back in? There are incremental cash and margin streams that do go back into the parent. That's related to the fact that Asset Vault is going to contract to Energy Vault.

Speaker 1

Energy Vault will be building these projects. While there's a revenue elimination there because it becomes intercompany on the revenue side, there are obviously margins associated with the building of the project. Let's say the EPC agreement to go and build the project, there are margins associated with the long-term service agreements that have to be done and put in place to be able to monitor these. Those are nice agreements too, 30% to 40% type of margins on those. Then there's a piece that's just related to the management fee and expenses in and around the management of that portfolio that Energy Vault is doing. Those would be additional streams that, in addition to that, let's call it the Asset Vault EBITDA, would flow back into and essentially bring additional cash flows into Energy Vault.

Speaker 1

There are a few different pieces there that, as you get a sense of, are all enhancing the cash flow and the liquidity and streams at the parent co-level. Does that answer your questions?

Speaker 3

Yeah, no, that's super helpful. Just on Stony Creek, I saw the announcement on completing there. I know it was expected, but it's just a bit formalized. That project's bigger than the others. Can you just talk about the timeline to get that built and in operation, and then what other things you have going on in Australia?

Speaker 1

Sure. Yeah, Stony Creek, as mentioned, is going to be our largest one in the portfolio now going in. What we have going forward is the next step and real large milestone, which is called the DA or the design approval. That essentially is focused on the final land permitting process. There have already been the environmental studies and reports, so all of the major items clearing out, I think any risks around the site that we've chosen, environmental aspects, any aspects related to some of the other indigenous requirements there and other management things, are going to be essentially done into this DA approval, this final design approval. We expect that sometime by the end of the year or into Q1. It's going to be right in that range. From there, concurrently while we're doing that, we'll be getting project financing.

Speaker 1

In this next, let's call it the next four to five months, while we're getting the DA approval, we're going to start a project financing process. Just to remind you and everybody, we have what's called an LTSA, a long-term energy service agreement there issued through AMO in the New South Wales government, so we have that off-taker there already. That should give, I think, very good confidence to all of us around the ability to get that asset financed. Figuring in some case, all of that comes together in Q1 next year, and then it achieves what's called ready to build or RTB status. We will have done the EPC contract back into Energy Vault with Asset Vault also in parallel this next four to five months.

Speaker 1

Then we're really ready to hit construction, order all key long lead items, and start building it through the year, essentially of 2026 into what's expected to be an early 2027, essentially COD or operations of the project.

Speaker 3

Got it. Appreciate it. Thank you.

Speaker 1

Okay, thank you.

Speaker 2

This does conclude the Q&A session of today's program. I'd now like to turn the program back over to Robert Piconi for any closing remarks.

Speaker 1

Okay. Robert, thank you. I want to thank again everybody who joined the call here. We encourage everybody to go to the announcement, but also we included a deck presentation as usual that's on the website under the investor section that includes some of the details and to some of the questions here that hopefully will be useful to everyone. In closing, as you get the sense of, we're really excited, I think now as a company to essentially have access now as we're going to get this, you know, what's just been announced this morning on the preferred equity to get that closed and then be putting that capital to work toward our development portfolio and really continuing to focus on executing on that now without being involved in capital raise processes, et cetera. That's a very good position to be in, I think, as a company.

Speaker 1

I think from an investor perspective, you know, reduces tremendously a lot of the risk that people may have had in their minds. We're expecting to see a lot of the benefits come forward now as we start putting the capital to work.

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