Energy Vault Q3 2026 Earnings Call - Backlog Swells to $2.3B, 2027 Revenue to Double

Operator: As a reminder, this conference is being recorded. It is now my pleasure to introduce Energy Vault CFO, Nitin Dahiya. Thank you. You may begin.

Nitin Dahiya, Chief Financial Officer, Energy Vault: Thank you, operator, and good afternoon to everyone joining us today. Welcome to Energy Vault’s Q3 2026 financial results conference call. Our earnings release and investor presentation are available on the investor relations section of our website. Before we begin, I want to remind everyone that today’s discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results may vary materially from those expressed or implied by these statements. Please refer to our most recent SEC filings, together with the safe harbor language in today’s earnings release and the presentation, for a discussion of the factors that could cause actual results to differ. We undertake no obligation to update these statements except as required by law. That out of the way, actually, we also will discuss certain non-GAAP financial measures. Reconciliation to the most directly comparable GAAP measures are included in our earnings materials.

I also want to remind everyone again that we have posted an investor presentation onto the website. We will be referring to specific slides as we go through the deck, so it may be helpful for you to download it. Joining me today is Robert Piconi, our Chairman and Chief Executive Officer. Robert will begin with the strategic and operational updates, and I will then take you through the quarter, our balance sheet, and updated outlook. Rob, over to you.

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Great. Thank you, Nitin, and I’d like to welcome everyone to our Q3 earnings broadcast. We are going to follow the presentation, as Nitin just outlined, as we did before. I’m going to start by highlighting three critical areas as an executive summary, and then we’ll go through a few specifics before turning it back to Nitin. I want to start with some highlights around our execution this year and how that’s driving our profitability and cash flow, talk about how we’ve expanded our portfolio, as well as our new build and transfer AI compute infrastructure solutions, and then focus a bit on the balance sheet strength to start. If you’ve seen and reviewed our third quarter performance, a quarter in line with expectations, and I’d say a quarter much like the two before it.

We had double-digit contract backlog growth on a sequential basis and multiples year-over-year, double-digit revenue, strong gross margins, and strong cash generation. In particular, our seventh straight quarter of increasing cash, 60% sequentially, roughly, and almost 3x year-over-year. A lot of that is being driven by our integrated business model, which is a real unique strength of our operating model as a company. Our build and transfer supports our near-term revenue and cash generation with accretive gross margins, while we’re investing in our build, own, and operate infrastructure to build recurring revenue and earnings as our assets come online.

Delivering gross margins like these, for those of you that follow the space, in the EPC world at 2x-3x the market is something that’s not only helping us with accretive cash as we’re building and transferring over solutions, but we’re leveraging that strength and that experience operationally to be very capital efficient with how we’re building the projects that we’re going to own and operate over time. We saw, again, increases in our backlog of about 15% sequentially. That gives us strong visibility into revenue for the remainder of 2026 and also into 2027, which we’re excited to share with you for the first time at this stage what that revenue range is going to look like, while supporting our long-term profitable growth.

Turning to our recent revenue guidance, we revised our guidance up to the $290 million-$310 million range, which is the top half of the previous range we had set. This is being driven by the expected timing of our contracted deliveries and milestones. As we sit here in the quarter with seven weeks left, we feel very good about that narrowing to the top end of the range. This will also be our largest quarter ever in our history as a company at around $250 million. With that visibility that comes on the back of this strong growth in the backlog, we’re also introducing 2027 guidance with revenue expected to more than double year-over-year to $600 million-$700 million, and EBITDA of $40 million-$50 million, our first full year of positive EBITDA, another milestone.

It is the next step in translating our growing backlog and execution capabilities into profitable growth. Clearly, the focus is right in front of us on this quarter and this large ramp we have, maintaining those healthy margins and converting these deliveries into cash. We’re also moving our own portfolio forward with multiple projects and stages of financial close and financing. Stoney Creek is an example also in Australia, just recently secured formal grid interconnection approval and is progressing toward the final investment decision. That’s a very large project, our largest project in Australia at 1 GWh. We also completed the Goshe acquisition that was announced just last quarter, which added a portfolio of 2.3 GW of U.S. battery storage development projects, including 350 MW that are ready to build, which also followed our Japanese portfolio acquisition earlier this year.

This is critical as scale, as we know in energy, is such an important factor for profitability, for cash, to have credibility in some of the largest customers in the world, and we are building and aggressively building that scale now, both organically and inorganically. I will also mention that our AI infrastructure solutions have developed in a tremendous way following the 1.25 GW announcement of the hybrid generation and storage solutions that we are leading with our software. Our opportunity is to solve this problem and this power constraint through these integrated generation, storage, and our software solutions that are playing a very important role in load balancing and giving a single pane of glass visibility to our customers.

We continue to see strong growth and momentum here and customer engagement, and is also important, especially given the macro backdrop, that these solutions are behind-the-meter, meaning they do not touch the grid. We do not have a lot of the issues with deploying these solutions that otherwise would impact current grid demand and current power availability. We are leveraging that capability. We are doing this in a way that also seeks to minimize some of the generation or gas generation emissions in favor of some of the battery storage, and are also exploring some new solutions to address the water consumption in this space. We are focused on maintaining the strong balance sheet to support our growth, and while this is the last summary point, it is obviously fundamental and really foundational to how we are executing and maintaining strong capital discipline.

First, we ended the quarter with $236 million of total cash. That is about 60% growth on a quarter-over-quarter basis, 3x year-over-year. As I said before, our seventh straight quarter of increasing cash, and in this environment, in this market volatility, obviously a very strong sign in building our balance sheet. We also reduced our corporate level recourse debt by $12 million in the quarter. We believe that our focus on disciplined execution, operating cash, and the financing pools will allow us to progress toward profitability with very limited equity funding needs. We will remain selective about which projects we advance, how they are financed, and the returns that they create for shareholders. I will now move through some of the supporting pages, finishing there, and highlight just a few items before turning it back to Nitin.

Moving to page four, you can see some of the milestones that are behind some of the progress I just went through, from some of the portfolio expansions and generation equipment financing, fundamental today as we are bringing power solutions to the market. As well, we have advanced other projects across the world, which have included the announcement related to the Italian project and its designation in Sardinia as a preeminent project of national importance. In addition, as I have mentioned, the Stoney Creek approvals that have just recently been achieved, those things will now accelerate our move to construction in what remains a very important region of the world in Australia. Each of these advance the development and delivery work that supports our long-term business evolution.

Turning to page five, I’d say the quarter overall that Nitin will cover was in line with our expectations, again, much like the first two quarters before it, and really setting us up for the strong execution now in the remaining seven weeks of this quarter and delivering one of our largest quarters here to date. Nitin will be covering these details in just a little bit. On page six, you can see that we maintain a healthy mix of build and transfer and build, own, and operate backlog, and shows the evolution of that backlog over time. I think fundamental to this is this shift into also large bookings related to the next 12 to 15 months. That obviously provides a lot of accretive cash to the business, given our strong gross margins that we’ve just discussed.

And also, if you look at this quarter and then moving into the end of the year, we continue to expect to build that contract backlog. Approximately 35%-40% of that $2.3 billion backlog is expected to convert, as I mentioned, in the next 12 to 15 months, and we estimate that that backlog could approach almost $3 billion as we look at exiting the year and the next time that we’ll be getting together at our Q4 earnings. Obviously, strong progress here. I think it’s a great indication for investors in looking at that growth and even having the backlog growth outpace what is, albeit very large, revenue growth. That gives a good indication of strong, sustainable future cash flows for the company.

Turning to page seven, a few items here in our build and transfer backlog stands at about $825 million, with the majority of that, as I said, to convert over the next 12 to 15 months. That provides us tremendous visibility. I’d say as a company, we’re in the best position we’ve ever been at this point in the year and looking at next year with the coverage that the backlog’s going to have on the revenue range that I mentioned here at the top. We’d also say that a good chunk of the backlog is growing related to some of the near-term solutions around Prime Power Solutions and the behind-the-meter solutions that I mentioned a little bit earlier, and that we continue to explore other opportunities to grow those solutions. These solutions are modular, averaging about 250 MW.

They include gas and batteries together, but very importantly, our software platform playing a critical role managing both of the assets to optimize those assets and to load balance those assets into the demand needs that are volatile. Turning to page eight, just to highlight a bit on our build, own, and operate backlog here, it’s approximately $1.5 billion now. Across the broader controlled portfolio, we estimate a potential annual run rate EBITDA of over $200 million as we look to exit 2028, as projects progress to commercial operation. And I’ll note that that’s in addition to the build and transfer in our Prime Power Solutions EBITDA that we generate through our standard course business as well.

Obviously, having that build, own, and operate revenue and that backlog that is going to be 10 to 15 years in duration plus gives us a lot of confidence in the future, gives us a lot of visibility. That visibility into cash flow will help us optimize our capital structure and how we look to invest and grow and scale the company, both organically and inorganically. Turning to page nine, we expect a sizable operating portfolio over the next year and a half. Calistoga and Cross Trails, of course, continue to proceed. However, we have many other projects in the U.S. that are within the project financing timelines now. We have other projects in Australia that I mentioned, Stoney Creek, that has cleared a lot of the regulatory approvals now and is moving into the financing phase.

Snyder AI is targeting the first half of 2027, Stoney Creek, the second half of 2028, and coming online with financing and process for both. Also, through our acquisitions that I noted, we have other projects that we will be beginning and/or in process of doing project financing on, and just very excited to get these projects to market over the next 12, 24, and 36 months as we continue to serve the growing and very near-term demand in the AI compute infrastructure sector. Turning to page 10, we have an additional 1 GW of controlled megawatts that are within our purview right now to develop and bring through the development cycle and through the various project financing phases. This is Energy Storage as a Service solutions, our powered land, and our powered shell solutions. We will advance these projects based on offtake quality, financing availability, and balance sheet efficiency.

The breadth of the portfolio gives us choices about where we deploy capital, and we believe we are going to be hitting over $200 million, as I mentioned before, of run rate EBITDA as we are exiting 2028, based on the current business opportunities that we are executing, while maintaining, of course, the adequate liquidity and limiting the need for equity. Again, that is in addition to what we will be accreting from our build and transfer business and serving some of the AI compute demand. Turning to page 11. Page 11 here really highlights the different types of projects and different drivers and the considerations for each.

Just to note that we are building our best execution and financing experience as well here along the way, and pursuing the behind-the-meter storage opportunities with the data center customers that have this immediate power demand where they have to wait on longer-term grid solutions, while continuing to work on our projects under development, for example, in New Mexico that we have mentioned, and other projects in the powered land and powered shell area. On page 12, we expect 2026 revenue, as we said before, in the $290 million-$310 million range. The GAAP gross margins we are expecting for 2026, now we are narrowing in the 20%-22% after the raise from the last quarter that we got together.

The revenue range is in the top half of our previous guidance, as I stated here at the beginning, with the guidance underpinned by all the deliveries that we are in process of executing now. We obviously have tremendous visibility now, being seven weeks from the quarter, and have very high confidence in hitting this top end of the range. From a cash perspective, we are expecting to end the year somewhere in the $170 million-$200 million range, dependent on opportunities and other projects that we might close or contracts we might close, or deposits will come in. I think importantly, we expect a further reduction in our corporate level recourse debt versus the third quarter. Turning to page 13, as I said, for the first time, we are introducing our 2027 guidance based on our contract visibility and that tremendous growth in the backlog.

We are currently projecting a range of $600 million-$700 million at this point, with positive EBITDA of $40 million-$50 million. The priority here is to convert and continue to convert that backlog and continue to grow that backlog as we increase in scale with the disciplined execution that you are coming to expect from us and disciplined capital deployment. I think page 14 sums up a lot of the areas of focus we have had here over the last three years, and then looking at 2027. Really, if you had to stand at any point in time and look back three years, that is not a bad trend to stand back and take a look at. Tremendous growth, I think, here across the board, whether you look at our revenue. I think very good to see the backlog growing at a multiple of that revenue growth.

I think that bodes well as we look at both the long-term build, own, and operate. As you saw in how we have segmented the backlog, there is a good chunk of that backlog that is going to be converting here in the next nine, 12, and 15 months to give that confidence, and gave us the confidence to do the projection that we gave for 2027. You also continue to see strong gross margins here. Obviously, those gross margins are a function of a lot of our supply chain management that is done, how we execute, how we deliver on time to customers, and at the budgets or below the budgets that we set. I am going to jump and skip over page 14, which you can read about some of the momentum on the commercial pipeline and as that has gone.

Jumping now to page 16 on our final strategic execution and focus, just to wrap before turning it over to Nitin. Our priorities, I think, as you have heard both in how we have executed this year, as we are looking at Q4, we are going to execute on that revenue ramp, strong visibility from where we sit today to do that. That is number one. We are going to turn this time-to-power demand into bankable contracts, and that is going to be both for our build and transfer solutions, as the hybrid integrated energy generation and energy storage contracts will do, but that is also for our build, own, and operate projects in the powered land and powered shell area.

Third, we’re going to advance the project milestones and the financings associated with them, as we’ve done this year already in three other prior projects and have many of them underway in the U.S. and Australia, and just beginning project financing discussions in Japan. Fourth, and fundamentally, I think, especially in a market where it is our assumption we will continue to see volatility, we’ll continue to see, I think, a macro and a geopolitical environment that will remain uncertain. We remain very disciplined in how we look at the balance sheet and how we’ve looked at raising financing. As the largest shareholder, I think I have the liberty to say that minimizing or eliminating any type of dilutive transaction is top of mind. I know that’s top of mind for all of you as investors on the call.

Fundamentally, we have a very strong now set of capital pools in place to support our growth, and importantly, a very strong and accretive gross margin business on our EPC business that’s going to be converting here over the next 12, 15 months and beyond as we continue to build that order book. Fundamentally, from a solution perspective, as I said earlier, I’ve never felt better about how we’re positioned as a company, the generation, the storage, our software platform, and its differentiation that it’s enabling, and owning and operating assets over time. Fundamentally, I’ll leave you with this thought that at the end of the day, and having worked across many industries in my career and many companies, number one, never been more excited, I think, for what the future’s going to hold for us here.

Number two, we have one of the best teams in the industry to pull off what not only we’ve been doing, but to continue to scale and grow this company. We don’t limit our thinking in that sense. Our people are very focused on delivery and execution for our customers. We’re very focused on protecting our cash, on building our balance sheet flexibility, and focused on scale. Hopefully, you’ve got a sense of that in the first three quarters of this year, and we’ll continue to see that now in delivering our largest quarter to date as a company in our history. With that, Nitin, I’ll turn it back over to you.

Nitin Dahiya, Chief Financial Officer, Energy Vault: Thanks, Rob. I will now cover the third quarter results and financial position briefly before turning it back to Rob. Let’s turn to page 18. Backlog reached $2.3 billion as of November 10th, up about 147% year-over-year. The strong and growing backlog is a key driver of the financial outlook that Rob described. Our revenue for the quarter was $13.1 million, down 61% year-over-year, but this reflected the previously expected timing of shipments and project milestones. As we mentioned last quarter, majority of our back half revenue is going to come in the fourth quarter. Adjusted gross margin, which adds back non-cash D&A, and we think is a better comparable metric, improved 50 points year-over-year to 81%.

This quarter, we got $4.3 million benefit from tariffs, and excluding the tariff impact, adjusted gross profit, sorry, was still a very healthy 48%, about 17 points higher year-over-year. We ended the quarter with $236 million of total cash, which includes restricted cash of $55 million, an increase of $88 million sequentially and $174 million year-over-year. Let’s turn to page 19 for some more income statement details. As I mentioned, 3Q revenue came in at $13.1 million, in line with expectations. Year-to-date revenue was up 4% year-over-year to $52 million. Third quarter GAAP gross profit was $9.3 million, representing a gross profit margin of 71%. Adjusted gross profit was $10.6 million, and an adjusted gross margin of 81%. Both measures include the $4.3 million tariff refund we mentioned. Excluding that, GAAP gross margin would have been 37.9% and adjusted gross margin of 48%.

The refund had a significant impact on the quarter’s reported percentages, and given the small revenue number, our full year GAAP gross margin guidance remains in the 20%-22% range. Adjusted operating expenses this quarter were $25.2 million, an increase of $9 million from the prior year. As we scale revenue, maintaining operating expense discipline is an important part of delivering the adjusted EBITDA that we expect to deliver in 2027. That said, operating expenses did increase this quarter, and that is primarily driven by project development expenses and legal expenses associated with scaling the owned and operated platforms, as well as higher bonus accruals. We expect to see the benefit of this higher operating expenses over the next 12 months in contracted activity. As such, we are fairly focused on managing controllable OPEX while investing in the business where warranted.

We expect the pace of increase in operating expenses to slow next year because we’ve seen a lot of that increase this year in front of the revenue increase. Adjusted EBITDA for the quarter was a loss of $14.7 million compared to a $6 million loss a year ago. Again, that reflects lower revenue and higher OPEX offset by higher gross profit. GAAP net loss was $28.2 million or $0.17 per share. Adjusted net loss was $0.14 per share. Turning to slide 20, I’ll quickly touch on our capital stack. This is a new slide that we added this time, just given our capital structure is fairly complicated and it combines project-level non-recourse debt and preferred capital and corporate-level recourse debt.

Looking at just our total debt can sometimes give an incorrect impression of our balance sheet obligations, and therefore, we have laid it out in the presentation to make it easier to follow. Corporate-level recourse debt declined by $12 million sequentially to $221 million. Non-recourse debt increased primarily reflecting the engine financing that we did backing our purchase of reciprocating engines and the Dev Vault financing associated with the Goshe assets. We are using financing at the asset level as much as possible to support the growth of our own portfolio, and we expect this to grow as we execute more projects. With this, I’ll hand it back to Rob for a few closing remarks before we take questions. Rob, over to you.

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Okay, thank you, Nitin. Just to wrap here, I feel, as I said, I think very good about the quarter, how it set us up now for Q4 for the ramp that we’re delivering. I think the backlog growth on the commercial side and the teams and the opportunities we see in critical markets continue to be quite positive. I think we’ve also built our balance sheet, as you see from the cash growth, and also continuing to build a lot of our financing partners in a way to ensure we’re going to have the capital required to continue to build this business. I think the visibility for the first time having on 2027 at now projecting our revenue growth at over 2x what we’re finishing this year, obviously a lot of confidence there in that.

Strong gross margins will continue based on how we’ve managed both the supply chain and how we’re managing the commercial activity. But in addition, our first full year of positive EBITDA, which is another important milestone, and I know one the investors and we’re all very focused on as a company. With that, what I’ll say is, as we look forward now, we do expect, as I mentioned earlier, that we’re going to continue to have volatile markets, both on the macro side, as I mentioned, on the geopolitical side. A lot of things that we are prepared, we have the balance sheet to deal with that volatility while continuing to grow and most importantly, execute for our customers.

All of our customers that we’re building relationships with and have built over time are all seeking us out as we look at the solutions that can be deployed with a lot of credibility, with a lot of predictability, given our past performance. But in addition, having the balance sheet continue to strengthen as we look at larger and more accretive opportunities as a business. With that, operator, we’ll go ahead and conclude here and turn it over to you for questions.

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the Q. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. The first question is from Justin Clare from Roth Capital Partners. Please go ahead.

Justin Clare, Analyst, Roth Capital Partners: Hey, good afternoon. Thanks for taking our question here. Wanted to start out on the outlook into 2027 here. You provided the guidance $600 million-$700 million. Just wondering if you could help us understand the revenue mix between build and transfer projects versus Asset Vault. Then just curious within the build and transfer, how much of the expected revenue is associated with that 1.25 GW integrated power agreement that you had signed previously?

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Great, Justin. Thanks. Look, to the first question, as we look at next year, in the mix of the business that we’re going to have, a lot of that mix, and you asked specifically about the BOO and B&T. In 2027, we’re still going to have the two projects operating that we have this year, Calistoga and Cross Trails. Then we will be getting into Q4, potentially bringing online one more U.S. project. But primarily, a lot of the projects that we’re building here will be coming online in 2028. That’s why we have so much strong visibility into 2027 right now, because a lot of that revenue will be the build and transfer revenue that we’ve already contracted, it’s already booked. We have a lot of confidence in that number. The supply chain discussions have happened, and we’ve lined things up.

That’s in terms of the mix of the project. That one contract that we announced, you asked about the size and how important that’s going to be next year. It will be an important part of the revenue. It’s not going to be something that would go over half of our revenue, but it will be an important part of our revenue. What’s very interesting about it is we’re also expecting this next year to be the first year where we should have quarters that should be a little smoother in terms of shape. At those revenue levels, obviously managing that, managing cash, and as we look at delivery, I think will be quite welcomed. In any event, I think that’s how we’re looking for next year.

Justin Clare, Analyst, Roth Capital Partners: Got it. Okay, that’s really helpful detail. On one of the slides here, you had mentioned growing the backlog potentially to $3 billion by the end of the year here, so pretty meaningful increase potentially. Just wondering what level of visibility you have. Is that coming from line of sight to build and transfer projects, or is that from growing the Asset Vault portfolio? Then just curious if that $3 billion would be net of the meaningful revenue that you’re anticipating recognizing in Q4 here.

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Yeah. To the first question, it is a pretty balanced mix in terms of driving that backlog growth and that bookings growth. The opportunities, I think there is, we mentioned various project financings in Australia and the U.S. on projects. We are going to see a lot of strength there that will drive that backlog. Remember, those will be 10 to 15-year type of backlog streams. We also see a lot of demand and opportunity continuing on our energy storage solutions on the build and transfer side. A lot of that is driven off of near-term demand in and around solutions that can basically operate off-grid, microgrids, behind-the-meter solutions to support some of the near-term power needs. It is actually a mix of both and a lot of strength across both segments.

Justin Clare, Analyst, Roth Capital Partners: Got it. Okay. Just one more. Curious, since you signed the large 1.25 GW strategic agreement, how is the pipeline for other opportunities for integrated power solutions evolving since that point in time?

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: It is growing and it is active. I would say it is a very interesting segment, Justin, because it has a lot of advantages in speed because it is not relying on grid power, which obviously is in high demand, and especially with the focus on, which has, I think, been in the market for six to eight months. I think even with the recent governmental changes that have just happened, I think the need not to really touch grid power relative to that demand and keep pricing where it is, looking at the solutions that are behind-the-meter, that are off-grid, that have other benefits to the communities, we are seeing a lot of interest in that. In particular, what is interesting is the role our software is playing in that.

Our software not only manages our batteries, but it manages the coexistence of generation tech, whether that be fossil or renewable, and our batteries together. In doing so, we can optimize how that power is delivered to try to increase the sustainable aspects, meaning to reduce emissions from, for example, some of the gas generation side. As well, it gives that visibility in dealing with some of the load if we are powering AI compute infrastructure. Between the training and the inference models, there is a lot of different volatility that has to be managed, and we are required to deliver five nines quality in that case and uptime. It is something our software is playing a very important role managing any type of hardware, and the customers in particular really appreciate that.

Justin Clare, Analyst, Roth Capital Partners: Okay. Great. Thank you. I will pass it on.

Operator: The next question is from Derek Soderberg from Cantor Fitzgerald. Please go ahead.

Derek Soderberg, Analyst, Cantor Fitzgerald: Yeah. Hey, guys. Thanks for taking the questions. Just wanted to get your thoughts on growth in 2027. You guys continue to execute on projects, both live projects and growing the backlog. What do you think the market is missing here? You guys, again, it seems to me continue to execute. Just maybe get your high-level thoughts on what maybe the market might be missing with you guys in the story here.

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Sure. Yeah, I will take a first shot at that, and then I will invite Nitin, who has just joined. He has been here a quarter now, so he comes from the outside, comes from BlackRock, so I am sure he will have some perspectives here in a minute too. But I think one thing that is clear, Derek, in this market is, it is a show-me market. I think as we have executed, I think, the last six to eight quarters, growing cash every quarter, strengthening the balance sheet, doing what we say, I think the operational gross margins that we are delivering, especially on the EPC side, they are 2x to 3x what the market is doing. If you look at some of the people in the storage integration space, they are struggling.

I think while all of that is good and I think well-received, and I think that is supported by some of the customer contract wins, I will note our largest contract ever, between $500 million and $600 million that we had noticed. But at the end of the day, I think from an investor perspective, especially as we get into a year where we have 75% of the year we are delivering in one quarter. I think investors want to see that happen. I will remind investors that we did it last year the same, so we are very good at execution and at focus and at minimizing the noise, let us say, and focusing on delivery.

I think we have demonstrated that, but obviously on the eve here of delivering our largest quarter and about 75%-80% of our year in one quarter, I think that is just influencing a little bit, what otherwise investors might be just lining up. If you look at what we have just guided and reiterated here, not only for this year, I mean, we are seven weeks away, but also guiding at a 2x plus revenue next year, a strong visibility, as we mentioned on that. I mean, that is going to be primarily build and transfer, that stuff that we have already booked, right? I would say from my perspective, it is a market, given the volatility and things at a macro level, that we continue to see, I would say week to week. I think it is just that people do want to see that execution.

I think with what investors are hearing today, I hope they see, and not only from where we have come out of the quarter from a balance sheet perspective, so with that, just growing that cash balance, what we have put on the board, also in terms of bookings growth, continual, and continuing to build that, and now sitting here with just less than two months to the end of the quarter and guiding to that upper half of the range, I think hopefully that is going to build confidence and we will continue to bring investors into the story. But I will turn over to Nitin. Nitin, we may have a perspective here as well.

Nitin Dahiya, Chief Financial Officer, Energy Vault: Oh, thank you, Rob. I think you have covered it quite well. We are under-owned from a shareholder perspective, right? So that is something that is a function of where our market cap is, and again, as Rob mentioned, right, some of the seasonality or the lumpiness of our business. But as a business, we are at an inflection point, and both from a scale perspective and from a profitability perspective, and I think, I would like to think that that will actually entice a lot more interest. We are also trying to provide more clarity to make us easier to follow. We have two businesses, which again, the amount of disclosure we have on them hopefully makes it easier to follow and also gives people comfort on our visibility that we have and our confidence we have on the numbers.

But ultimately, I think we want to execute to the best of our ability, and there are certain controllables that we have, and I think we can do well in those. The markets can be somewhat irrational, but we can’t control them.

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Derek, I’ll add one more thing.

Derek Soderberg, Analyst, Cantor Fitzgerald: Sure

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: I think it’s important. I speak to a lot of our investors, not only our top five to seven groups that make up over half of our total shareholder base, but I speak to a lot of the groups that have come in in the last year to the story from time to time. What’s interesting is, and hopefully we’ve been pretty clear about that on this call, I think with the growth we’ve had, with the size of the projects that we’re talking about doing and that are in process, investors are wondering, "How are you going to do this without some massive dilutive equity offering?" Right?

I think that’s. As we continue to post the numbers and build cash and acquire portfolios, I think after the Goshe acquisition, I talked to investors and people not having visibility, it’s disclosed now, it’s in the Q, but we closed that acquisition in cash and in Q3. So it was, that $237 million is after we acquired that company. I think investors, with the growth we have, the increase in the backlog, may be a little worried, and I think that they expressed this, that is there some large. As I think we’ve been very clear here, we’ve got not only the project financings that we continue to do, we’ve got increasing cash there, as you see on the balance sheet. We’d already announced a $300 million pref fund. We’ve only used only about $35 million-$40 million of that.

So we have, if you think about that pref fund, that enables a multiple of three to four in terms of getting the debt and the ITC in terms of CapEx. Think about that as $1 billion-$1.2 billion of CapEx that enables. I think really, that is really the last item I would say that potentially maybe having people wait on the sidelines, but I cannot be any more clear than what I have just said. Again, I am the largest shareholder in the company, so I think I should have a little leeway here to opine on this a bit. I think we continue to be, I think, extremely undervalued as a company, despite the transparency that we are providing and despite how we are executing.

Derek Soderberg, Analyst, Cantor Fitzgerald: Got it. Well, really, really appreciate the detail there. As my follow-up, I have actually been hopping around calls here tonight, so apologies if this has been asked. Just trying to get a better understanding of how you are getting to the adjusted EBITDA numbers for next year. Obviously, a lot of growth. Curious if you can talk about OpEx, how that is going to grow with revenue, and maybe if you could just talk a bit about gross margin as well and how that kind of gets you to the EBITDA guidance for 2027. Thanks.

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Yeah. Nitin, do you want to go ahead and take that?

Nitin Dahiya, Chief Financial Officer, Energy Vault: Yes. As I mentioned, OPEX numbers this year were somewhat higher, but we expect the pace of that to slow. Our EBITDA guidance, when you think about from a gross margin perspective, we have shared that our backlog should have adjusted gross margins in the 20% plus range, and I think that still holds because a lot of that revenue is coming next year. You take out OPEX going slightly, and I think you get to that range. Again, I think the one key element of the numbers there is we do not want to starve the business and then just pull back on OPEX, but to the extent we see good opportunities to actually invest in the business, we would. Clearly, we are focused on being profitable and creating returns for shareholders. That is one.

The other bit I would just, and I know that’s not your specific question, but just over time, as our build-own-operate assets come online, our EBITDA margins will naturally grow. The next year’s EBITDA being positive, this is going to be the first full year of positive EBITDA. Again, there is operating leverage in there meaningfully, this is just given a range. But over time, we actually expect that margin to grow meaningfully.

Derek Soderberg, Analyst, Cantor Fitzgerald: Super helpful. Thanks, guys.

Nitin Dahiya, Chief Financial Officer, Energy Vault: Yeah.

Operator: The next question is from Noel Parks from Tuohy Brothers. Please go ahead.

Noel Parks, Analyst, Tuohy Brothers: Hi, good afternoon. One thing I would like to hear about is on the EMS software side of the platform. I’ve been hearing more discussion lately about EMS’s role, particularly in projects that are using CCGT alternatives like reciprocating engines, for example. I’ve just been hearing what sounds to me like greater awareness of the role of storage, especially in these sort of data center, possibly islanded power supply projects. If you had any thoughts on that’d be great.

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Yeah. Thank you, Noel. I mentioned this a little bit and talked about how important software is playing. What you are hearing, I think, in the market is absolutely correct, and that software capability for a few reasons is what really helped enable us to win the size of the contract that we won, the 1.25 GW. The few things on the software side, it is not only providing a single pane of glass and operating, sort of tying into the operating systems, for example, from what we announced, the Caterpillar engines. Tying into that operating system and tying that into our battery management system as well.

We tie in operationally to manage, but the real value is not only managing that, but also being able to distribute that in an optimized way and balancing load, and looking at optimizing the charging and discharge if it is the batteries, looking at optimizing the timing of how the reciprocating engines, the RICE is an example that you used, would come online. Doing that with software, we can also minimize emissions when you are looking at the integration combination and mix of battery energy storage and also the generation engines. That is also, I think, something that is very important, very important for the communities that we are going to operate in. But fundamentally then at the end, fundamentally, we are taking on and ensuring that we are going to be delivering five nines of quality and uptime as we look at our customers.

To do that in an environment where you have got AI loads and training and inference that are very volatile, in particular, how you manage and balance that and work that back into both the generation and storage is fundamental. This is, I think, something in particular over the last six months that is, I think, becoming more and more prominent as a decision factor. It was definitely, the software was absolutely a decision factor, I think, in how we were selected to support one of the largest deployments of 250 MW modular Prime Power Solutions across multiple sites.

What I am real excited about, and if our software team were here to comment, what they are excited about is what we are going to learn in terms of the behavior of these models, and depending on the geography and the demographic of where they are deployed, there is going to be different modular sizes as well in those deployments. It is really interesting how these not only projects are going to be deployed, what we are going to learn, and they are going to be some of the first ones that are operating in this mode, meaning behind-the-meter, off the grid. Very excited to share as we bring these first systems up. Deliveries have started this quarter already, that is a contract that we are just beginning those deliveries on this quarter that we just announced last quarter. We are excited about that.

Operator: The next question is from Sid Rajeev from Fundamental Research Corp. Please go ahead.

Sid Rajeev, Analyst, Fundamental Research Corp: Hi. Congratulations on the progress and the robust pipeline. Two questions, if I may. Do you mind sharing what the ideal timeline for the Stoney Creek is, start of construction, and when really operational?

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Sure. Yeah. We’re planning Stoney Creek, which we’ve just announced, just to reiterate what we’ve just said to some milestones in the last three months. We’ve received development approval already, which is a critical milestone, but even perhaps more critical, what’s called the 5.3.4A, which is the grid interconnection approval. That actually we just received two weeks ago. That just really paves the way now for us to get right into construction. We had already announced in June that we acquired the land on that project versus a lease structure, so it gives us very good flexibility. All of that means basically we’re in project financing mode as we speak. Actually, Cory Magnuson, our President of Asset Vault, is actually in Sydney right now and working on some of those things.

To answer your question, that is a project that will be coming online in 2028. I think as we started already some of the works around the site there, and now we’re going to be doing some of the detailed planning for that, we’ll be able to probably next quarter give you maybe a tighter frame within 2028. But for sure, it’s a project that will be coming online in 2028.

Sid Rajeev, Analyst, Fundamental Research Corp: Okay. The second one is on capital raising requirements, Q4 and 2027. Any ballpark or any guidance on how much you need, how much you plan to raise, net capital raise?

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Sure. Nitin, do you want to comment on that?

Nitin Dahiya, Chief Financial Officer, Energy Vault: Yeah. We have given a cash guidance for end of the year, $170 million-$200 million. That does not assume any incremental raise at the parent. In fact, the parent level, the corporate level recourse that we expect actually to pay some of that down. There are obviously a number of moving pieces in terms of getting to that number, in terms of managing the working capital for different projects, et cetera. But again, we are trying to be very judicious with the use of our cash and of our balance sheet. Then also when we look at projects, I think capital efficiency is a very important aspect of that. Our guidance does not assume that we will issue any, raise any additional capital at the parent.

At the project level, of course, it is a different matter, but that is non-recourse to the parent, and it does not accrete to the cash.

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Yeah. Sid, we’re going to be taking advantage of the, on all the U.S. projects in particular, all the ITC and the tax equity side of the equation, obviously, that there, that’s a great form of the financing and the standard project level debt. So, really, current course and speed on that, as I mentioned, we’ve got the pref fund as well that allows us to invest, and we still have quite a bit of that at our disposal.

Operator: The next question is from Brian Lee from Goldman Sachs. Please go ahead.

Tyler Bisset, Analyst, Goldman Sachs: Hey, guys. This is Tyler Bisset on for Brian. Thanks for taking our questions. I guess first, how much of your 2027 revenue guidance is covered by your backlog currently? I guess if I back out your Q4 expected revenue from the $800 million of build and transfer backlog, looks like it’s probably about 85% or so covered at the midpoint. Is that directionally accurate? Then just looking at the breakdown of your backlog, does look like some of your under construction and contracted megawatt hours within your build and transfer business went down since last quarter, but you also meaningfully shifted the revenue to under construction from contracted. So, can you talk about some of the drivers there? Then did some of the business shift from contracted to advanced negotiations?

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Yeah. Nitin, do you want to take those? I’m happy to take the first one, or how do you want to go ahead?

Nitin Dahiya, Chief Financial Officer, Energy Vault: Well, let me take the first one. Tyler, thanks for the question. I mean, I think when you think about our revenue, I think as Rob mentioned, the majority of our revenue is going to come from the build and transfer side, but not all of it. There is also some revenue on the other side. Obviously, we’ve given a range in terms of our guidance. Clearly, I mean, I think you can do the math, and we feel fairly confident about that range.

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Yeah. Yeah. I think, to your point, I think you’re roughly right there. We’re at a time in the quarter where this year’s still not up, and I tell people all the time, we haven’t fired the sales team. We have a lot of commercial activity. Obviously, as you said, we have a very, very high percentage of what we’ve just guided. They are covered and are out working to continue to build that. At our Q4 earnings, which is where we typically give the guidance on the year, comes in March, typically. We’re obviously given the visibility we have and the confidence we have, we’re giving some of this initial guidance. But suffice to say, we have quite a lot of next year covered here already.

I think on the You made a comment, Tyler, too, about the change or somehow a reduction in the build, own, and operate. We have a lot of things underway right now in that space on projects, and we’ve mentioned a few times some project financings and things. That’s why, as you know, as we get those things closed and booked, you’re going to see increases in our backlog at $200 million to $300 million increments with each one. We have no real reduction at all in our build, own, operate, except that we are also building the backlog in the build and transfer associated with some of these hybrid generation build and transfer contracts.

It’s a- As I said, if I had to go back a year and say, "Gosh, what would I ideally like to see?" As we’re building projects that we can’t recognize revenue obviously until they’re fully built out and they come online and then it’s 10 to 15-year revenue streams, I would have said, "Wow, it would be great to have build and transfer projects that are going to accrete cash to us while we’re getting these larger projects built out." That is exactly what’s happening, and in a much, I’d say, a much larger way even than as things have evolved here than we were thinking a year ago. It’s really all good.

Operator: This concludes the question and answer session. I would like to turn the floor back over to Robert Piconi for closing comments.

Robert Piconi, Chairman and Chief Executive Officer, Energy Vault: Thank you, operator. Again, I wanted to thank everybody for joining the call and listening in here. As I mentioned a few times, hopefully you can hear it in how I have articulated things. We are very excited about our position now, about what we are going to deliver this quarter, what we are looking at next year. Again, I will finish with a lot of this confidence just comes from the confidence of the team that we have here at Energy Vault, their focus on the customer, on delivery. I think with all the volatility that we have had to deal with, in particular the last 12, 18 months, I think the focus to continue to deliver and build that balance sheet, seventh quarter in a row of cash increases, and we are going to continue with that focus.

You have seen some of the additional hirings that we have done, some senior hiring, I think, in the company focused on the financial, both project finance and a lot of the broader financial areas as we look to scale the business. I think not lost on you as well that we are doing that not only organically, but inorganically as well. In any event, I want to thank everybody again and our employees and the teams, and turn it back to you, operator. Thank you very much.

Operator: Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.