Good day, and thank you for standing by. Welcome to the Enlight Second Quarter 2025 Earnings Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Yonah Weisz, Director, IR. Please go ahead.

Thank you, Operator. Good morning, everyone, and thank you for joining the Second Quarter 2025 Earnings Conference Call for Enlight Renewable Energy. Before beginning this call, I would like to draw participants' attention to the following. Certain statements made on the call today, including, but not limited to, statements regarding business strategy and plans, our project portfolio, market opportunity, utility demand and potential growth, discussions with commercial counterparties and financing sources, pricing trends for materials, progress of company projects, including anticipated timing of related approvals and project completion and anticipated production delays, expected impact from various regulatory developments, completion of development, the potential impact of the current conflict in Israel on our operations and financial conditions and company actions designed to mitigate such impact and the company's future financial and operational results and guidance, including revenue and adjusted EBITDA are forward-looking statements within the meaning of U.S. federal securities laws, which reflect management's best judgment based on currently available information. We reference certain metrics in this earnings call and additional information about such metrics can be found in our earnings release. These statements involve risks and uncertainties that may cause actual results to differ from our expectations. Please refer to our 2024 annual report filed with the SEC on March 28, 2025, and other filings for more information on the specific factors that could cause actual results to differ materially from our forward-looking statements. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Additionally, non-IFRS financial measures may be discussed on the call. These non-IFRS measures should be considered in addition to and not as a substitute for or in isolation from our results prepared in accordance with IFRS. Reconciliations to the most directly comparable IFRS financial measures are available in the earnings release and the earnings presentation for today's call, which are posted on our Investor Relations web page. With me this morning are Gilad Yavetz, CEO and Co-Founder of Enlight; Nir Yehuda, CFO of Enlight; Adam Pishl, CEO and Co-Founder of Clenera; and Jared McKee, incoming CEO of Clenera. Gilad will provide some opening remarks and then turn the call over to Adam and Jared for a review of our U.S. activity and then to Nir for a review of our second quarter results. Our executive team will then be available to answer your questions.

Thank you for joining us today for Enlight's Second Quarter 2025 Earnings Call. We are pleased to report another strong quarter of results. Revenue and income grew by 53% compared to the same quarter last year, reaching $135 million. Adjusted EBITDA also increased by 57% to $96 million. Net income amounted to $6 million compared to $9 million in the same quarter last year, but mainly due to the accounting classification of a foreign currency shareholder loan impacted by exchange rate values. Given this momentum, we are raising our full year 2025 guidance ranges. Using the midpoint of these new ranges, revenues rise to $528 million from $500 million previously and adjusted EBITDA rises to $393 million from $370 million previously. This represents a 5% to 6% increase at the midpoint for both metrics, respectively, and underscores confidence in our business outlook. The company is advancing with the road map, which we first presented in May, targeting an annual revenue run rate of roughly $2 billion by the end of 2028, roughly 4x the 2025 revenues. Nir will provide a detailed financial review later in the call. We've also recently announced an expansion of Enlight executive leadership team. Adi Leviatan will take on the role of CEO of the company at the start of October, and I will transition to become the Executive Chairman of the Board in full-time capacity. Yair Seroussi, who has served as Chairman of the Board for the past 7 years, will assume the role of Vice Chairman. Following two decades of leadership roles with global corporations such as 3M and McKinsey & Co. in Israel, China and the U.S., Adi brings a wealth of experience to Enlight. Her addition to the executive team reinforces our core values of excellence and integrity and will contribute valuable…

Thank you, Gilad. Our U.S. business continues to experience incredible growth with achievements in construction, financing and the development of our deep project pipeline. We are demonstrating our ability to build profitable projects and continue to deliver power to meet America's increasing energy demand. I'm happy to report our Snowflake A project near Arizona. Arizona has mobilized and entered into full construction. Through early construction activity this summer, we have safe harbored the project for optimal tax credits. Snowflake A includes 600 megawatts of solar power and 1.9 gigawatt hours of battery storage and is the first of two length projects that will fill 1 gigawatt interconnection on the site. Snowflake A is currently scheduled to COD in 2027. We continue to make progress at our three other projects under construction this year. Let's move on to a project located east of Tucson, Arizona. Roadrunner solar and storage includes 290 megawatts of PV and 940-megawatt hours of battery storage. Just last month, we successfully completed the initial energization of the substation, a major milestone. The racking and tracking systems are complete, and we are more than halfway through installation of the solar modules. We are using Tesla Megapacks as our battery storage solution. Those are installed, and we are making good progress on the wiring and power management system. The project remains on schedule for a COD towards the end of 2025. Moving on to our second project outside Albuquerque, New Mexico. Quail Ranch solar and storage includes 128 megawatts of PV and 400-megawatt hours of battery storage. Files, racking and tracking equipment are complete, and we are over halfway complete with the module installation. Currently, the batteries are being delivered and installed. Our final project under construction is Country Acres, a 403-megawatt PV and 688-megawatt hour battery storage project…

I would. Thank you, Adam. It has been an honor to learn from you and the Enlight leaders as we build a world-class renewable energy company. My time leading the development team involved a focus on implementing process and operational improvements to expedite the conversion of projects from ideas to reality and to continually grow our early greenfield development efforts. I look forward to advancing our company to the greatest period of growth yet. I'm excited to step into this leadership role with a special focus on execution and delivery of projects that will take us through not just the near term, but for many years to come. I will be sharing more of our growth story during future earnings calls. Thank you, and let me turn the call over to Nir.

Thank you, Jared. In the second quarter of '25, the company's total revenues and income increased to $135 million, up from $88 million last year, a growth rate of 53% year-over-year. This was composed of revenues from the sale of electricity, which rose 37% to $116 million compared to $85 million in the same period of '24 as well as a recognition of $19 million in income from tax benefit compared to $3 million in second quarter of '24. Revenues from the sale of electricity grew due to the contribution of newly operational projects. Since the second quarter of '24, three of the Solar and Storage Cluster units in Israel, Atrisco in the U.S., Pupin in Serbia and Tapolca in Hungary all began selling electricity. The most important increases originated at Atrisco, which added $13 million, followed by the Israel Solar and Storage cluster, which added $12 million. In total, new projects contributed $30 million to revenues from the sale of electricity. Revenues and income were distributed between MENA, Europe and the U.S. with 40% of revenues in the second quarter of '25 from Israel, 35% from Europe and 25% from the U.S. Second quarter net income amounted to $6 million compared to $9 million last year, a decrease of 41% year-over-year. The change was driven mainly by new projects, which contributed $15 million of net income, offset by $12 million noncash charge linked to the revaluation of shareholder loan to a subsidiary and an $8 million increase in other financial expenses, all after tax. Adjusting from the effects of foreign currency revaluation, net income amounted to $16 million compared to $7 million last year, an increase of 110% year-over-year. The company adjusted EBITDA grew by 57% to $96 million compared to $61 million for the same period in '24.…

[Operator Instructions] We will now take the first question from the line of Mark Strouse from JPMorgan.

So my first question, kind of thinking about safe harbor and the July 7 executive order from President Trump, kind of the industry just waiting to see what the new guidelines potentially might be. With regards to Enlight, I'm curious, you've got some projects that are scheduled to be complete by the end of '27 or potentially first half of '28. CO Bar and Snowflake. Kind of curious to the extent -- you've safe harbored those already, but if the safe harbor rules change, can you talk about your ability to accelerate those projects to ensure that they are complete by the end of '27, and therefore, we don't have to worry about potential safe harbor guidelines.

Mark, it's Gilad. How are you? So I will start with the answer, then Jared, if you want, you can complement me. So to start, I would say that currently, we already have 6 gigawatts that are fully safe harbored, and they account for the majority of our plan towards the end of '27, which is for 6.5 to 8 gigawatts to be connected to the network. In addition, we believe that with the, I would say, the fact that we are a large developer with good access to capital and cost of capital and a lot of, I would say, very good liquidity. Relatively, we are in a very good position if we need to accelerate cash investment in order to meet potential different criteria. So we believe that we are positioned in a very good situation. First, we are reaffirming our road map that we announced on the 27th of May to reach $1.4 billion of total revenues and income as ARR by the end of '27 and $2 billion of ARR by the end of '28. So we are reaffirming that after the reconciliation bill. But we believe we are also positioned very well in order to, I'd say, adjust to any different criteria if such is introduced. Jared, would you like to complement?

In respect to CO Bar and Snowflake, we are starting construction. We have ability to meet the needs of both already starting construction in respect to safe harboring. And as Gilad has mentioned, we have the ability to meet the demand if there are some in the future to accelerate construction. CO Bar and Snowflake are already expected to be online before the end of 2027. And so they already sit within the schedule of the executive order.

Perfect. Okay. And then just a follow-up with India being in the news and one of your major panel suppliers located in India. Curious to the extent that India tariff rates coming into the U.S. increase or the new AD/CVD case that's out there, including India, can you talk about your supply if you're locked into that supply and your ability to pass that on in your PPAs if you are, in fact, locked into that supply?

Yes, Jared, you can start with our supply chain strategy, and I will complement afterwards.

Yes. So projects currently in delivery will not be impacted by the new AD/CVD case against Laos, Indonesia and India. Our next wave of projects will be contracted such that AD/CVD will not apply.

Yes. And I will just add that I think we are now benefiting from a very diversified supply chain strategy. So we have many sources of production for the panels also coming from many countries. So it seems that since the tariff regulation was introduced, we see that we have very good resilience against different orders in this regard. So we are very confident that we will meet that.

Mark, if I just may add one more thing. In terms of the interaction with Waaree, we're not locked into anything. It's an option to purchase, and we have no liability. We have no requirement to buy from them.

We will now take the next question from the line of Justin Clare from ROTH Capital Partners.

I first just wanted to follow up on Mark's question. So you had mentioned the 6 gigawatts you fully safe harbored at this point in time. I was just wondering because you had previously spoken about a 6.5 to 8 gigawatt potential. So I know there's some uncertainty related to the executive order, but maybe you could speak to your plans and how you're executing at this point in terms of adding additional safe harbor projects and then it does seem like the projects that were safe harbored in 2024 may be not subject to the executive order. So any way to quantify how much of the 6 gigawatts was safe harbored prior to 2025?

Yes. So first, important to mention that according to the reconciliation bill, we have until 4th of July 2026 in order to make projects eligible for the safe harbor. So at this point of time, having 6 gigawatts out of the 6.5 to 8 gigawatts plan, it's a very, very good position. And I would say that since the 27th of May, where we first introduced our plan, we had back then 4.9 gigawatts and then we qualified additional 1.5 gigawatt, 1.1 sorry, gigawatts coming from the Snowflake project. So we are now already have 6 gigawatts. So the pace is very high and I believe that by the end of June '26, we'll have eligible much more than what we anticipated.

Got it. Okay. That's helpful. And then wondering if you could just speak to also the trend in PPAs you're seeing for U.S. projects, maybe specifically for COD dates out in the 2028 or 2029 time frame. It might be a little bit early at this point, but would you anticipate a decrease in the supply of projects in those later years given the potential reduction in the tax credits available there? And would you expect an upward pressure on PPAs?

Yes, Jared, why don't you start? And again, I will complement afterwards.

Yes, not a problem. As we look to 2027, '28, '29, 2030, it will largely depend on what are the components of the executive order and also the adjustments, if any, on the start of construction requirements. It is too early to know where and how the supply will adjust without the guidance coming in. As you can be sure that we are tracking and monitoring the guidance. And as it comes out, we will adjust. One of the things that we are doing is we are advancing our start of construction strategy to ensure that we have the most projects possible that are ready to deliver in '28, '29 and 2030.

Yes. Thanks, Jared. I will add just that we think that the decisive here factor is the demand for electricity. There is a very strong demand for electricity, as you know, in the U.S. coming mainly from the data center industry and AI and so forth. Now if you refer to the standard economy of solar energy and storage in Europe and in all the developed world, so our LCOE is already economical and does not require the tax equity. The fact that the reconciliation deal allowed gradual time for the U.S. market to adapt to that is very favorable, and we believe it's the right policy. But we believe that by the end of 2030 or '28, '29, 2030, the U.S. market will be already, I would say, will adapt already the world economy where the cost of 1 megawatt is 600,000 rather than 1.2 million. And therefore, we are very optimistic about continuing the growth in the U.S. based on a non-tax equity economy starting from 2030. And also I referred to the fact that energy storage has even more gradual time line. So we believe that the U.S. economy or I would say the administration did the right thing by allowing the U.S. market to adapt to that with demand for electricity being the, I would say, the most important factor here.

We will now take the next question from the line of Corinne Blanchard from Deutsche Bank.

This is actually Mike Mcnulty on for Corinne. Congrats on the guidance raise. So my first question concerning that FX has been a pretty meaningful tailwind for you guys year-to-date. Can you parse out the contribution of FX to the increased guidance? And then talk about what assumptions you have baked into the guidance for FX?

Yes. Thanks for the question. So first, yes, we also benefited from the FX. But I think that we raised the guidance also due to very strong performance that we had with our plans and the fact that we execute on time and we forecast to continue to execute on time. So we believe that the combination of this period positive FX, but with very strong fundamentals on the operation and execution allows us to be confident on the future, and we believe that this trend will continue.

Okay. That's really helpful. The second question I have is around component costs. Given -- during your prepared remarks, you mentioned that falling component cost is a key driver. Can you talk about just the differences between the U.S. and the rest of the world and how you see U.S. component costs for batteries and modules playing out?

Yes. So naturally, first, as most of the components are generic, such as solar panels and inverters and of course, battery cells and so forth. So first, yes, it can be comparable. But of course, under a regulation, I'd say, environment such as tariffs, domestic content and so forth. So clearly, in the U.S., the same modules or the same equipment cost more mainly due to tariffs. But also, we believe that the tax equity environment is also contributing, which -- and this is a factor that increases a little bit, let's say, the overall, let's say, pool of the cost of the project, part of it goes to the lenders or to the tax equity providers, part of it to the contractors. So we see also higher BOP cost in the U.S. per kilowatt than, let's say, in the other developed countries. So we believe that this will adapt itself, I would say, gradually. But with tariffs, of course, according to the administration policy. And we believe that the electricity prices in the market will reflect the change. So to the extent that there will be tariffs, they will be reflected in electricity prices and PPAs. Because of the demand for electricity, of course.

[Operator Instructions] We will now take the next question from the line of Maheep Mandloi from Mizuho.

Congratulations on the nice quarter here. One question just on the safe harbor expectations here on August 18. Just want to understand one thing based on your checks with lawyers, is it possible that they might change the rules for projects that were safe harbor before July 4 or that's something which [indiscernible] lawyers is not possible here?

Yes. Maheep, so first, I guess that we are following the analysis of the law firms like yourself. And it looks like the broad, I would say, consensus is that there will be no or cannot be a retroactive legislation, and therefore, it will not be affected. But of course, we will follow it like everyone else. And we are also following opinions of other large developers. And we see quite a broad, I would say, projection that there will be a positive situation with regard to start of construction.

Got it. No, that's fair. We're hearing something similar from others as well. But secondly, just on one housekeeping on the ITC sales, it looks like $70 million to $80 million for this year. Was there a reduction from a previous estimate? Or how do you think about that ITC sales revenue contribution next year?

Maheep, it's Yonah. Previously looking for -- if I understand correctly your question correctly, we were previously looking for tax benefit contribution of between $60 million to $80 million, and this has now turned to $70 million to $80 million. So the range has slimmed down just a bit.

Yes. And Maheep, just to complement the other -- in my previous answer, it's important here just refer me to the fact that 4 of 5 major projects that are supposed to become operational on our portfolio will do so or plan to do so before the end of '27, meaning that even if start of construction criteria is moving or something, we still have the protection of the end of '27. So we are in a very good situation.

We will now take the next question from the line of David Paz from Wolfe.

Just CO Bar, I want to make sure I heard you correctly. That has started construction, and I believe that implies or maybe you said that you received all the necessary studies and interconnection in the queue and all the other required approvals. Is that correct?

Jared, would you like to take it?

Yes. Is this relation to a specific project or in general?

CO Bar in Arizona.

On CO Bar, we are working through still the -- what I would call pre and during construction. We have officially safe harbored the project through various mechanisms through start of construction, roads and also transformers. We are in the final stages of the interconnection process, and we expect to start full mobilization of construction later this year and quarter.

Okay. Any sense of when you get that final interconnection?

That is...Yes, that's expected for this year.

This year. Okay. All right. And then secondly, just switching subjects. What is your plan for your -- I believe you still have PJM assets, particularly the Blackwater project, which I think is about 720 megawatts and 1.2 gigawatt hours, and it's pretty advanced. Are you -- do you have any plans for that project or the overall portfolio in PJM?

Yes. So I will start. And of course, Jared, if you want, please complement me. So of course, we are still developing the portfolio in PJM. Of course, until project is fully permitted, so we are still under the development phase. We believe that we have a good portfolio there, and we are quite optimistic that it will create value for us. Jared?

We have a world-class team in PJM. They are a part of the community, and we're working through the permitting processes there at Blackwater as well as the rest of the portfolio in PJM. So we are going to continue their development there, work towards a permit and continue to have the expansion of what we see across the rest of the country in PJM as well.

Great. If I could sneak one more in. Just you gave us the run rate revenue and income will be very helpful. I appreciate that. Any other costs or expenses that we should be mindful of as we project out where on an annual basis, development costs or other things that you could give us a run rate for those?

Yes. So we believe that the road map and the details we provide are very comprehensive. So the idea is that it will allow you to construct your models and analysis. Of course, if some assistance is required, we can be in touch with the team. But there is no any material data that is different from what you see.

If you refer to any other component in the P&L, so we expect that to be increased in a lower increased proportion to the revenues and other and the EBITDA.

Thank you very much, everyone, for joining, and we'll speak with you next quarter. Take care.

This concludes today's conference call. Thank you for participating. You may now disconnect.