ANNAPOLIS, Md.--(BUSINESS WIRE)--May 07, 2026--
HA Sustainable Infrastructure Capital, Inc. ("HASI," "we," "our" or the "Company") $(HASI)$, a leading investor in sustainable infrastructure assets, today reported results for the first quarter of 2026.
Key Highlights
-- GAAP EPS of $(0.57), compared with $0.44 in Q1 2025, and Adjusted EPS
of $0.77, compared to $0.64 in Q1 2025.
-- GAAP-based Net Investment Income (Loss) was $(6.9) million in Q1, and
Adjusted Recurring Net Investment Income totaled $101 million in Q1, up
29% year-over-year.
-- GAAP-based ROE was (11.4)% in Q1 2026, and Adjusted ROE increased to
15.7% in Q1.
-- Managed Assets grew 13% year-over-year to $16.4 billion as of March 31,
2026.
-- Closed more than $600 million in transactions through the first quarter
of 2026 with new asset yields on Portfolio investments >10.5%.
-- Issued $1 billion in unsecured notes with a weighted average coupon of
6.68%, and redeemed our 8.00% senior unsecured notes due 2027.
-- Affirming guidance for Adjusted EPS in the range of $3.50 to $3.60 and
Adjusted ROE of at least 17% in 2028, and a reduction in our payout ratio
to below 50% in 2028 and below 40% in 2030.
"Demonstrating the resilience of our business to recent geopolitical events, we have started 2026 with strong momentum, affirming guidance and reporting solid Q1 results and record Adjusted ROE of more than 15%, " said HASI President and Chief Executive Officer Jeffrey A. Lipson. "Importantly, our ability to maintain double-digit new asset yields while lowering our cost of capital has also translated into ongoing, attractive margins."
A summary of our financial results is detailed in the table below:
For the Three Months Ended March 31,
-------------------------------------------------
2026 2025
--- ------------------ --- ---------------
(in thousands, except for per share data)
GAAP Net Income (Loss) $ (71,965) $ 56,612
GAAP Diluted earnings
(loss) per share (0.57) 0.44
Adjusted earnings 101,747 78,067
Adjusted earnings per
share 0.77 0.64
GAAP-based net investment
income (loss) (6,855) 8,799
Adjusted recurring net
investment income 101,182 78,235
GAAP Net Income and Adjusted Earnings
"In Q1, we continued to make significant strides at strengthening our balance sheet by redeeming our 8% notes due 2027, further laddering and extending the average maturity of our debt, while also materially improving the spreads on our new debt issuances," said HASI Chief Financial Officer, Chuck Melko. "Our recent initiatives to enhance our capital efficiency have contributed to our higher Adjusted ROE, as we issued no new shares through our ATM in Q1 to fund our business, setting the stage for further improvement in our ROE in the near future."
GAAP Earnings and EPS
GAAP net income (loss) to controlling stockholders was $(72) million in Q1 2026, compared to $57 million in Q1 2025. GAAP diluted earnings (loss) per share was $(0.57) in Q1 2026, compared to $0.44 in Q1 2025. GAAP net loss in the current period was driven by a loss from equity method investments of $79 million, which was caused by a timing difference between an investee's execution of an investment tax credit sale agreement and their distribution of cash for the credit sale to the tax equity investors. The execution of the sale agreement increased the tax equity investors' capital accounts, which increased their allocation of GAAP equity relative to ours under the HLBV method. The tax equity investors' capital accounts are expected to normalize in a subsequent period when the cash is distributed to the tax equity investors, which will increase our allocation of GAAP equity and thus our income from equity method investments. The timing of the tax capital account impacts does not affect our economics from the investment.
Adjusted Earnings and EPS
Adjusted earnings were $102 million in Q1 2026, driven by Adjusted Recurring Net Investment Income of $101 million, Gain on Sale of Assets of $23 million, and Origination Fee and Other Income of $9 million, while Compensation and Benefits and General & Administrative expenses (excluding Equity-Based Compensation) were approximately $28 million.
Adjusted Earnings in Q1 2026 increased $24 million compared to Q1 2025, due to a $23 million increase in Adjusted Recurring Net Investment Income, driven by a larger Portfolio and higher Portfolio Yield, and a $4 million increase in Gain on Sale of Assets. These items were partially offset by a $6 million increase in Compensation and Benefits and General & Administrative expenses (excluding Equity-Based Compensation) primarily due to growth in the size of the Company.
Adjusted EPS was $0.77 in Q1 2026, compared to $0.64 in Q1 2025, due to the increase in Adjusted Earnings described above.
An explanation and reconciliation of GAAP Earnings and EPS to Adjusted Earnings and EPS can be found at the end of this release.
Adjusted Recurring Net Investment Income
HASI's Managed Assets consists of three major components: our Portfolio, our co-investment structures, and our securitized assets. HASI generates recurring income from each of these components: (1) income generated from our Portfolio, including both our debt investments ("Receivables" and "Real Estate and Debt Securities"), and our equity investments ("Equity Method Investments"), (2) management fee income from our securitization trusts and our partner's share of our co-investment structures, and (3) income from our retained interests in our securitized assets. Adjusted Recurring Net Investment Income measures the recurring income we generate from these three sources, net of interest expense.
GAAP-based net investment income captures Interest and Rental Income revenue as well as Management Fees and Retained Interest Income, less Interest Expense. However, it does not include the income generated from our Equity Method Investments (as defined below) and thus fails to capture all of the economic returns earned by our Portfolio. GAAP-based net investment income (loss) was $(7) million in Q1 2026.
Adjusted Recurring Net Investment Income captures not only our management fee income and income from our retained interests in our securitized assets, but also our income from our entire Portfolio, including both our equity and debt investments, net of interest expense. As a result, management views Adjusted Recurring Net Investment Income as a helpful indicator of the full underlying economics of our investments, enabling a useful comparison of financial results between periods. Adjusted Recurring Net Investment Income was $101 million in Q1 2026, an increase of 29% from $78 million in Q1 2025.
A reconciliation of GAAP-based Net Investment Income to Adjusted Recurring Net Investment Income is shown below, and further explanation can be found at the end of this release.
Three Months Ended March 31,
--------------------------------------
2026 2025
----------- ----------
(in thousands)
Interest and rental income $ 82,689 $ 66,477
Management fees and retained
interest income 9,731 6,999
Interest expense (99,275) (64,677)
----------- ----------
GAAP-based net investment income
(loss) (1) (6,855) 8,799
Adjusted income from equity
method investments (2) 91,103 69,863
Loss (gain) on debt modification
or extinguishment (3) 18,818 321
Amortization of real estate
intangibles 3 2
Elimination of proportionate
share of ongoing asset
management fees earned from
co-investment structures (4) (1,887) (750)
----------- ----------
Adjusted recurring net investment
income $ 101,182 $ 78,235
=========== ==========
(1) GAAP-based net investment income (loss) as reported in previous periods
was not defined to include Management fees and retained interest income.
It has been included here in comparative periods to reflect the new
definition.
(2) This is a non-GAAP adjustment to reflect the return on capital of our
equity method investments.
(3) Included in Interest expense within our statements of operations.
(4) GAAP net income includes an elimination of the intercompany portion of
ongoing asset management fees received from co-investment structures in
the Equity method income line item. Since GAAP Equity method income is
not a component of this metric, we include the elimination of the
management fee through this adjustment.
(MORE TO FOLLOW) Dow Jones Newswires
May 07, 2026 16:05 ET (20:05 GMT)