HA Sustainable Infrastructure Capital (NYSE:HASI) executives used the company’s fourth-quarter and full-year 2025 earnings call to highlight what CEO Jeff Lipson described as the strongest year in the firm’s history, driven by record transaction volume, higher returns on new investments, and improved capital efficiency.
Record 2025 transaction volume and expanding pipeline
Lipson said HASI closed $4.3 billion in new transactions during 2025, an 87% increase versus 2024. He added that fourth-quarter activity was especially strong, with more transactions closed in the quarter than in any prior full year. Excluding the company’s $1.2 billion investment in the SunZia project announced on the prior quarterly call, management said it still closed more than $3 billion of new investments during the year.
Returns, margins, and profitability metrics
Management emphasized improving investment returns and funding spreads. Lipson said that for the second year in a row, yield on new investments exceeded 10.5%, while bond spreads continued to narrow. He noted that the company’s senior unsecured term bonds were trading with a yield below 6.25% at the time of the call.
CFO Chuck Melko reported adjusted EPS of $2.70 for 2025, representing 10% growth, and said adjusted recurring net investment income rose to $362 million, up 25% year-over-year. He also said fees and income from managing assets in CCH1 and securitization trusts increased to $49 million (up 32%), and gain on sale from securitizations contributed $65 million to adjusted earnings.
Adjusted ROE increased to 13.4% in 2025, up 70 basis points from 2024, according to Melko. Lipson added that ROE for 2025 was above 13% and that “incremental ROE” exceeded 19%, a metric the company defined as the change in adjusted earnings divided by the change in shareholders’ equity.
Melko cautioned that GAAP results were affected by volatility tied to HLBV accounting and noted that GAAP net investment income does not include earnings from equity method investments, which he said are a growing portion of the portfolio.
Capital efficiency improvements and funding strategy
Executives repeatedly returned to capital efficiency as a key theme. Lipson said the company’s inaugural issuance of junior subordinated hybrid notes in 2025, along with its investment-grade ratings and the CCH1 co-investment vehicle with KKR, has made the company “significantly more profitable with each new share” and reduced the need for equity issuance. He also noted that CCH1’s equity commitments were upsized in the fourth quarter.
Melko said HASI completed a $500 million junior subordinated note offering. He explained that rating agencies provide 50% or more equity credit for the instrument in leverage calculations, which management believes helps reduce equity issuance needs while staying within leverage targets tied to investment-grade ratings. He added that, starting this quarter, the company’s debt-to-equity ratio will include an adjustment consistent with rating-agency treatment.
On liquidity, Melko reported total liquidity of $1.8 billion and said the company expanded bank facilities, obtained its third investment-grade rating, increased commitments in CCH1, and issued its first junior subordinated notes during 2025.
Notable fourth-quarter transactions and market commentary
Among transactions highlighted for the fourth quarter, Lipson cited a $500 million joint venture with longtime partner Sunrun. He said the structure enables investment tax credit (ITC) transferability “in a programmatic and efficient way,” supporting Sunrun’s ability to scale while targeting an “attractive risk-adjusted return” for HASI.
Management also revisited the SunZia investment with Pattern, which Lipson called the company’s largest investment ever and the largest onshore wind project in North America. He said the project remained on schedule to fund in the second quarter of the current year.
When asked about deal size and future volume, executives said larger opportunities appear periodically, but they did not point to another SunZia-sized transaction currently in the pipeline. Marc Pangburn, chief revenue and strategy officer, said project sizes are increasing, driven by larger grid-connected complexes and rising storage attachment rates in both grid-connected and behind-the-meter markets.
On residential solar, Pangburn said the company had not recently seen transactions using a “prepaid lease” structure but would evaluate them, while emphasizing the company’s focus on traditional lease and third-party ownership products.
Executives also discussed tax equity market dynamics and policy-related uncertainty. Lipson said transferability structures are being used more frequently, potentially due to the market seeking clarity on items such as Foreign Entity of Concern (FEOC) guidance, and cited the Sunrun and Pattern transactions as examples that use transferability. On FEOC specifically, Chief Client Officer Susan Nickey said clients had generally “safe harbored” under prior guidance through December of the prior year, limiting impact on the current pipeline, with newer guidance more relevant to future projects.
Asked about older projects with PPAs up for renegotiation, Lipson said HASI had seen “a fair amount” of renegotiations recently and characterized them as positive given current PPA pricing, with impacts reflected in portfolio yield metrics. He added that the company’s 2028 guidance incorporates its best current forecasts, with potential upside if PPAs renew at higher levels than assumed.
Updated multi-year guidance, dividend approach, and other updates
HASI extended its guidance through 2028, projecting adjusted EPS of $3.50 to $3.60 and an adjusted ROE exceeding 17% by that year. Lipson said the company is shifting from an EPS growth-rate framework to a nominal EPS range to allow more precise updates over time.
Management did not provide specific 2026 EPS guidance. Lipson said shorter-term forecasting is complicated by the “lumpiness” of gain on sale, while Melko added that management would not expect a repeat of 2025’s $4.3 billion transaction level given the size of SunZia, though he said closings should be higher than historical levels.
On dividends and payout ratio, Lipson reiterated the company’s longer-term plan to slow dividend growth relative to earnings growth, increasing retained earnings and capital recycling. He said the company is ahead of schedule in reducing its payout ratio and now expects it to be below 50% by 2028 and below 40% by 2030, while still increasing the dividend annually.
In sustainability highlights, Lipson said avoided annual CO₂ emissions estimated from new investments exceeded 1 million metric tons for the first time in 2025, reaching a record 1.7 million metric tons, and bringing total annual CO₂ emissions avoided from all investments to date to 10 million.
Finally, Lipson noted investments in talent and technology to support scaling beyond $16.1 billion of managed assets at year-end 2025, and he recognized Chief Legal Officer Steve Chuslo, who will transition to a strategic advisor role in April after an 18-year tenure.
About HA Sustainable Infrastructure Capital (NYSE:HASI)
Hannon Armstrong Sustainable Infrastructure Capital, Inc (NYSE: HASI) is a publicly traded real estate investment trust specializing in financing and investing in climate change solutions. Founded in 1988 and headquartered in Annapolis, Maryland, the company provides debt and equity capital to sustainable infrastructure projects across North America. Its mission is to support energy efficiency, renewable energy generation and resilient infrastructure, helping public and private sector clients reduce carbon emissions and achieve long-term environmental goals.
Hannon Armstrong’s core business activities include originating and structuring loans, acquiring debt and equity interests, and managing a diversified portfolio of projects in sectors such as solar energy, wind power, energy storage, green buildings, and sustainable agriculture.
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