Executive Summary

Record quarter: Adjusted EPS of $0.80 (+54% y/y) on Total Revenue of $103.1M; GAAP EPS $0.61 vs $(0.17) y/y. Beat S&P Global consensus EPS of $0.689 by ~16% on stronger recurring income and asset optimization; 2025 adjusted EPS growth guided to ~10% and 2027 CAGR 8–10% reaffirmed . EPS consensus from S&P Global: 0.6891*.
Engine of upside: 42% y/y growth in Adjusted Recurring Net Investment Income to $105.1M, aided by portfolio growth, higher yields (>10.5% on new investments), and a $24M SunStrong gain from an ABS refinancing distribution called out in Q&A .
Scaling opportunity: closed ~$649M in Q3 transactions, $1.5B YTD, and executed a new $1.2B preferred structured equity commitment in October for 2.6 GW of wind (SunZia), with initial ~50% held via CCH1 to manage balance sheet intensity; pipeline remains >$6B post-deal .
Balance sheet/liquidity: liquidity $1.1B; debt-to-equity 1.9x (within 1.5–2.0x target); 88% of debt fixed/hedged; weighted-average interest cost 5.9% in Q3; added $250M delayed-draw term loan post quarter to bolster 2026 refinancing plan .
Potential stock catalysts: record EPS and reaffirmed multi‑year growth; visibility on funding/hedging; marquee SunZia commitment validating origination scale; recurring income mix improving (less dependent on gain-on-sale) .

What Went Well and What Went Wrong

What Went Well
- Record profitability: Adjusted EPS $0.80 (+$0.28 y/y); Adjusted Recurring NII $105.1M (+42% y/y). “We just completed the most profitable quarter in our history” — CEO Jeff Lipson .
- Origination returns and scale: New investments underwritten >10.5% yield for sixth straight quarter; ~$649M closed in Q3; >$3B expected transactions for 2025; new $1.2B SunZia preferred equity deal (2.6 GW) in October .
- ROE momentum: Adjusted ROE 13.4% YTD; management highlights higher incremental ROE (19.6% YTD on newer business) driven by CCH1 equity efficiency and funding strategy .
What Went Wrong
- GAAP NII softness vs non‑GAAP: GAAP-based net investment income was $5.9M as GAAP excludes equity method income; underscores reliance on non-GAAP to reflect economics .
- Operating expense uptick: Compensation & G&A (ex-EB comp) ~ $28M in Q3, up ~$8M y/y due to incentive timing, partially diluting adjusted profit leverage .
- Interest expense higher: $71.5M in Q3 (+$12M y/y) with higher average debt and cost; weighted-average interest cost rose to 5.9% (from 5.6%) despite hedging and refinancing programs .

Financial Results

Headline Results vs Prior Year, Prior Quarter, and Estimates

Metric	Q3 2024	Q2 2025	Q3 2025
GAAP Diluted EPS ($)	(0.17)	0.74	0.61
Adjusted EPS ($)	0.52	0.60	0.80
Total Revenue ($M, GAAP)	82.0	85.7	103.1
GAAP Net Income to Controlling ($M)	(19.6)	98.4	83.3
Income from Equity Method Investments, GAAP ($M)	(23.4)	157.7	124.6
Adjusted Recurring Net Investment Income ($M)	74.1	85.3	105.1
EPS Consensus (S&P Global) ($)	—	0.62739*	0.6891*
EPS Surprise ($)	—	(0.0274)*	+0.1109*

Note: S&P Global consensus values have asterisks and S&P disclaimer below.

Revenue Components (GAAP)

Component ($M)	Q3 2024	Q2 2025	Q3 2025
Interest & Rental Income	64.2	67.4	69.0
Gain on Sale of Assets	7.7	7.8	24.9
Mgmt Fees & Retained Interest Income	9.1	9.0	8.4
Origination Fee & Other Income	1.1	1.4	0.8
Total Revenue	82.0	85.7	103.1

KPIs and Balance Sheet

KPI	Q1 2025	Q2 2025	Q3 2025
Managed Assets ($B)	14.50	14.62	15.05
GAAP-Based Portfolio ($B)	7.06	7.17	7.54
Portfolio Yield (%)	—	8.3	8.6
New Transactions Closed ($M)	~706	~189	~649
Pipeline ($B)	>5.5	>6.0	>6.0
Liquidity ($B)	—	1.4	1.1
Total Debt ($B)	4.7	4.7	5.2
Debt-to-Equity (x)	1.9	1.8	1.9
Fixed/Hedged Debt (%)	95	97	88
Weighted-Avg Interest Cost (%)	5.7	5.7 (H1)	5.9

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EPS Growth	FY 2025	Not specified numerically in Q2	~10% y/y increase	New specificity (raised clarity)
Adjusted EPS CAGR	2024–2027 vs 2023 baseline	8–10% CAGR to 2027	8–10% CAGR to 2027 (midpoint ~$3.15 on $2.23 baseline)	Maintained
Dividend Payout Ratio	By 2027	55–60% of adjusted EPS	55–60% of adjusted EPS	Maintained
Quarterly Dividend	Q3 2025 → Paid Oct 17, 2025	$0.42 declared	—	—
Quarterly Dividend	Q4 2025 → Pay Jan 9, 2026	—	$0.42 declared	New declaration

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Origination yields/volume	Yields >10.5%; ~$706M Q1; ~$894M YTD by Q2; pipeline >$6B	Q3 closed ~$649M; >10.5% yields sixth straight quarter; on pace >$3B in 2025	Strengthening scale with stable high yields
CCH1 co‑investment vehicle	Key funding lever; assets ~$1.0–1.2B by Q2	SunZia initially ~50% via CCH1; reduces balance sheet intensity	Larger role enabling bigger deals
Cost of capital/hedging	S&P upgrade; $1B senior notes; 97% fixed/hedged; 5.7% cost H1	Cost 5.9%; added $250M SOFR hedges; $250M delayed‑draw TL post‑Q3	Well-managed despite rate backdrop
Data center power demand	Implicit driver of grid‑connected growth	Explicit tailwind; “largest clean energy project” (SunZia) tied to scaling needs	Narrative intensifying
Optimization/asset rotation	2024 gains from targeted rotation	SunStrong ABS refi drove $24M gain in Q3; mgmt clarified one‑time nature	Repeatable optimization, episodic timing
Policy/tax credits	Transfer structures; ITC/PTC drive equity method dynamics	Safe-harboring continues; no cap‑stack step‑change yet; traditional TE/transfer persists	Stable policy tailwind

Management Commentary

“We just completed the most profitable quarter in our history and closed the largest investment in our history… investment volumes to exceed last year’s by more than 30%.” — CEO Jeff Lipson .
“Adjusted recurring net investment income… grew year‑over‑year by 42% in the quarter and 27% year‑to‑date.” — CFO Chuck Melko .
On SunZia: “It is the SunZia project… a preferred equity investment… returns consistent with recent grid‑connected transactions.” — CEO Jeff Lipson .
On SunStrong refi: “Total proceeds… around $240M; ~$200M to pay off mezzanine loans… the remaining ~$40M related to equity… roughly ~$24M was gain… the impact to the quarter was $24M.” — CFO Chuck Melko .

Q&A Highlights

SunZia specifics: Confirmed project identity; preferred equity structure; initial ~50% via CCH1 with potential leverage to lower ultimate hold; majority funding expected H1 2026 .
Pipeline durability: >$6B pipeline even excluding SunZia; management not seeing pull‑forward — “ordinary course” activity; enough to underpin 2026 goals .
SunStrong clarification: Two entities — assetco (securitized leases) and managementco (servicer at FV). Q3 distribution came from assetco refi; one‑time nature clarified .
Principal collections: Elevated in Q3 largely due to SunStrong mezzanine paydown (~$200M) from refi; otherwise amortization aligns with ~10‑year WAL .
Guidance cadence: Any 2026/2027 update deferred to February planning cycle; near‑term 2025 ~10% adjusted EPS growth reiterated .

Estimates Context

EPS: Q3 2025 Adjusted EPS of $0.80 beat S&P Global consensus of $0.6891 by ~$0.11; Q2 2025 was slightly below consensus ($0.60 vs $0.6274). Forward (Q4 2025) consensus $0.6687 suggests modest sequential step‑down post optimization‑heavy Q3*.
Revenue: S&P Global “Revenue” estimate/actual series for HASI may reflect a narrower definition than GAAP Total Revenue (e.g., excludes interest streams), creating non‑comparability to company‑reported Total Revenue; we anchor estimate comparison to EPS and flag the definitional mismatch for revenue*.
Implication: Consensus likely to drift higher on stronger recurring earnings trajectory (portfolio yield 8.6%, larger Managed Assets) and validation of scaled origination (SunZia), while modeling should normalize one‑time SunStrong benefit and Q3 gain on sale cadence .

Values retrieved from S&P Global.*

Key Takeaways for Investors

Core earnings power inflecting: 42% y/y growth in Adjusted Recurring NII and 8.6% portfolio yield underpin sustainability of EPS beyond episodic gains .
Scaling origination without equity dilution: CCH1 structure enables larger commitments (SunZia) with managed balance sheet exposure and higher incremental ROE (19.6% YTD on new business) .
Funding risk contained: 88% fixed/hedged debt; $1.1B liquidity; added delayed‑draw term loan and incremental SOFR hedges to de‑risk 2026 maturities and issuance timing .
One‑time optimization tailwind in Q3 (SunStrong $24M) should be modeled as non‑recurring; base case EPS growth (~10% in 2025) remains driven by recurring income and high‑yield originations .
Marquee project pipeline (data center‑driven grid demand) supports multi‑year growth narrative; reaffirmed 8–10% 2027 EPS CAGR and payout ratio convergence to 55–60% by 2027 .
Watch items: operating expense timing/incentives; interest expense trajectory (5.9% in Q3) vs hedging efficacy; revenue mix between recurring and gains .
Near‑term setup: Positive on EPS revisions and sentiment from record quarter and SunZia visibility; February guidance update is the next key checkpoint for 2026 trajectory .

S&P Global EPS/Revenue consensus values used above are marked with an asterisk and sourced from S&P Global.

HA Sustainable Infrastructure Capital, Inc. (HASI)·Q3 2025 Earnings Summary