Michael Fairbanks

Michael Fairbanks asked for an update on SmartCover's potential and growth algorithm post-integration, noting its 25% annualized growth and profitability in Q4. He also inquired how AMI deployments could expand the reach of other offerings within the Blue Edge portfolio.

Answer

Ken Bockhorst, Chairman, President, and CEO, highlighted SmartCover's historical 20% CAGR and its early adoption stage, expecting continued higher-than-average growth for sewer line monitoring. Bob Wrocklage, EVP, North America Municipal Utility, explained that AMI adoption often serves as a catalyst for extending other "beyond the meter" technologies in the Blue Edge portfolio, providing data and insights that lead to broader smart water management solutions, citing Galveston as a successful example.

Michael Fairbanks requested an update on SmartCover's potential and growth algorithm after 12 months of integration, noting its 25% annualized growth and Q4 profitability. He also asked how AMI deployments, such as PRASA, could expand the reach of other offerings within the Blue Edge portfolio.

Answer

Ken Bockhorst, Chairman, President and CEO, confirmed SmartCover's 25% growth and profitability, highlighting its pre-acquisition 20% CAGR and the early adoption stage of sewer line monitoring, expecting continued higher-than-average growth. Bob Wrocklage, Executive Vice President, North America Municipal Utility, explained that AMI adoption often serves as a catalyst for extending other beyond-the-meter technologies (like pressure management and water quality) by providing valuable data and analytics, citing Galveston as a successful example.

Michael Fairbanks inquired about the return to growth in the flow instrumentation segment, seeking more color on the drivers, particularly water-related end markets, and the general outlook for that segment.

Answer

Ken Bockhorst, Chairman, President and CEO, stated that flow instrumentation is a smaller part of the portfolio, generally expected to grow in line with GDP, with some quarterly fluctuations.

Michael Fairbanks asked about the higher ultrasonic meter volumes as a driver of growth, inquiring if there are any real changes in demand for that offering.

Answer

CEO Ken Bockhorst noted it was a particularly strong quarter for ultrasonic meters due to customer mix. He expects more ultrasonic meters to be sold each year due to adoption, but mechanical meters will still be sold for many years. Michael Fairbanks also inquired about the flow instrumentation segment's return to growth, its drivers, and the general outlook for the segment. CEO Ken Bockhorst stated it's a smaller part of the portfolio, growing in line with GDP, with some quarterly fluctuations.

Michael Fairbanks asked about Argan's expectation to operate at its 10-12 team capacity level in fiscal 2027, how many teams could potentially work on a CCGT project simultaneously, and the difficulty of expanding the team count further. He also inquired about the types of projects and customers Argan is seeking and any notable shifts in contract structure, terms, or risk conversations.

Answer

President and CEO David Watson indicated that Argan is currently managing around seven gas/biofuel and a couple of renewable projects, with the Trumbull job nearing completion, which will free up some capacity. He confirmed the intent to expand to the 10-12 team capacity over the next 12+ months, emphasizing creative talent deployment and continuous growth of assistant project managers and engineers for future expansion. Mr. Watson stated that Argan remains a flexible partner, and contract terms are negotiable, with the focus on ensuring payment for the risk taken. He added that Argan works with both repeat customers (which can reduce risk) and new customers, including IPPs and utilities, and is not closed to any customer type.

Michael Fairbanks inquired about Argan's labor and team capacity, specifically if the company expects to maintain 10 to 12 teams in fiscal 2027, how many teams can work on a CCGT project simultaneously, and the challenges of expanding team count. He also asked about Argan's selectivity criteria for new projects, including preferred types of projects and customers, and any shifts in contract structure, terms, or risk-taking.

Answer

David Watson, President and CEO of Argan, Inc., explained that with approximately seven gas/biofuel and a couple of renewable projects currently underway, there is some additional capacity within the 10-12 team range, especially as the Trumbull project nears completion. He confirmed the intent to add to this capacity over the next 12+ months, highlighting creative talent deployment and a focus on growing assistant project managers and engineers for future expansion. Regarding project selectivity, Mr. Watson stated Argan remains a flexible partner, ensuring contract terms adequately compensate for risk. He noted that while repeat customers offer reduced risk, Argan is open to new customers, working with both IPPs and utilities, and does not have a closed-door policy for any customer type.

Michael Fairbanks from JPMorgan Chase & Co. asked how the large $1.2 billion transaction and the projected $3 billion in total volumes for the year might influence HASI's EPS growth algorithm for 2026 and beyond, specifically if a step-up in growth should be anticipated.

Answer

Jeff Lipson, President and CEO, stated that HASI's consistent practice is to provide guidance in February, and the company is currently working on its business plan with the board, indicating more details for 2026 and 2027 would be shared then.

Michael Fairbanks of JPMorgan Chase & Co. asked for the timeline and cost of the planned production capacity expansion to two gigawatts.

Answer

KR Sridhar, Founder, Chairman & CEO, explained that while specific timelines were not disclosed, the expansion would proceed at "AI speed," with capacity additions possible within six months. He estimated the cost at approximately $100 million, spread over several quarters, for which the company is already well-funded.

Michael Fairbanks, on behalf of Mark Strouse, asked about any policy or regulatory developments that could accelerate greenfield geothermal projects in the U.S. and requested an updated outlook on full-year gross margins for the storage and electricity segments.

Answer

Executive Doron Blachar highlighted a recent executive order concerning permitting on BLM land that could dramatically shorten project timelines from years to weeks, which Ormat is actively pursuing. He also updated margin guidance, noting the Storage segment is trending toward the high end of 20%, the Product segment is raised to 19-21%, and the Electricity segment is expected to be a few points lower than last year.

Michael Fairbanks of J.P. Morgan Chase & Co. inquired about shifts in the competitive landscape due to tariff uncertainty and requested more details on recent wins in the Battery Energy Storage Solutions (BESS) product line.

Answer

CEO Brandon Moss responded that while customer inquiries have increased, conversations are primarily centered on Shoals' quality, service, and new product capabilities rather than just tariffs. Regarding BESS, he highlighted the large market opportunity and noted the company is securing wins across its three primary channels: traditional solar EPCs, partnerships with prefabricated storage providers, and direct sales to industrial clients like data centers.