Enlight Renewable Energy Ltd. Ordinary Shares 2026 Q2 Earnings Call

Please go ahead. Thank you, operator.

Good morning, everyone, thank you for joining Enlight Renewable Energy's second quarter 2026 earnings conference call. 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 impacts from various regulatory developments, completion of developments, the potential impact of the current conflicts in the Middle East on our operations and financial conditions, company action designed to mitigate such impacts, 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 project metrics in this earnings call, 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 the 2025 annual report filed with the SEC on March 30th, 2026, 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, 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 webpage.

With me this morning are Adi Leviatan, Chief Executive Officer of Enlight, Nir Yehuda, Chief Financial Officer of Enlight, and Jared McKee, Chief Executive Officer of Clenera. Adi will begin with an overview of our performance and key milestones achieved during the quarter, followed by Nir, who will review our financial results for the second quarter. Jared will provide an update on our U.S. operations and business activities. Our prepared remarks will be accompanied by a presentation. To follow along, please access the webcast or visit enlightenergy.com/data/financial-reports. Following the prepared remarks, we will open the call for a question and answer session. I will now turn the call over to Adi Leviatan, CEO of Enlight.

Adi, to you. Good morning and good afternoon, everyone.

Thank you for joining us today to discuss Enlight's second quarter 2026 results. The second quarter marks another period of strong execution for Enlight, underscoring the resilience of our global platform, the quality of our portfolio, and our consistent ability to deliver our business plan. That execution translated into record financial performance. Revenues and income increased by 55%. Adjusted EBITDA grew by 67%. Net profit reached $31 million, and operating cash flow rose by 34% year-over-year to $84 million. These results demonstrate our ability to convert our project development portfolio into operating assets, growing earnings and driving cash generation. The market environment around us continues to evolve rapidly. Electricity demand is accelerating, driven by the rise of artificial intelligence, unprecedented digital infrastructure build-out, alongside additional electrification in industry and transportation.

We believe this is a long-term infrastructure growth story, and the need for reliable, scalable, and cost-effective clean power has never been greater. Against this backdrop, Enlight's diversified platform, disciplined execution, and capital allocation provide resilience and position us to meet the growing demand. Based on the strength of our results year-to-date and our updated outlook for the remainder of the year, we are raising our 2026 annual guidance. We are raising both revenues and income and adjusted EBITDA guidance by 4.5% and 3.6% at the midpoint to $805 million and $575 million, respectively. The increase in guidance reflects the strong first half results, as well as elevated merchant prices in Europe and growth in our electricity trade activity in Israel. Our CFO, Nir, will review the results, guidance, and our financial position in more detail shortly. On the execution side, Q2 was equally strong.

Let me highlight the key milestones. The mature component of our project portfolio grew by 6%, while our total portfolio grew by 4.6% to a total of 43.1 factored GW. We completed the financial close for the CO Bar Complex, our largest single financing to date, at $2.6 billion, structured with a consortium of seven leading global financial institutions. CO Bar is a five-phase complex comprising 1.2 GW of solar generation and 4 GWh of storage in Arizona, a flagship demonstration of our execution capability at scale. We signed a power purchase agreement with Google for our Solstice project in Oklahoma, our first commercial off-take agreement in the U.S. and our first PPA in the Southwest Power Pool. We exceeded the upper range of our safe harbor targets, reaching 17.9 factored GW of safe harbor capacity, positioning us to continue to drive highly profitable growth in the U.S.

In addition, we're well-positioned to capture the next wave of tax benefits in energy storage, which is in place until the end of 2033. We expanded our European storage footprint into two new and attractive markets, Finland and Romania, acquiring several mature projects with high expected returns. Some projects have already started construction during the quarter, with commercial operation dates starting from 2028. Overall, our assets operated reliably, our projects advanced according to plan, and our financial results speak for themselves. Now, I will hand over the floor to Nir, our CFO, to review our quarterly results and guidance in more detail.

Thank you, Adi. The second quarter of 2026 was another strong quarter for Enlight, with impressive growth in all our major financial parameters. The company's total revenues and income increased to $210 million, up 55% from $135 million last year. The growth is attributed to new projects, which contributed $21 million from electricity sales and $19 million from tax benefit. Existing projects contributed an additional $12 million, including $6 million from an increase in generation and higher electricity price, and $6 million of additional tax benefit from domestic content at the Atrisco project, which qualified for this benefit in Q3 2025. Favorable exchange rate contributed $30 million and electricity trading activity contributed $9 million. The company-adjusted EBITDA grew by 67% to $160 million, compared to $96 million for the same period in 2025.

The increase of $75 million in revenues and income was offset by an additional $70 million in cost of sales, linked mainly to new projects and to the growth in electricity trading activity in Israel. G&A and project development expenses, excluding share-based compensation, increased by $6 million, and other income decreased by $4 million, mainly as a result of compensation for lost revenues recorded in Q2 2025. Q2 2026 adjusted EBITDA includes a contribution of $17 million from a follow-on sale of an additional 15% interest in the Sunlight Cluster. Second quarter net income amounted to $31 million, compared to $6 million in Q2 2025. The $47 million increase in adjusted EBITDA, excluding the contribution from the follow-on sell-down, was partially offset by $10 million increase in depreciation and amortization, mainly due to newly operational projects.

A $4 million increase in share-based compensation expenses and an $18 million increase in financial expenses also largely related to newly operational projects. This impact was partially offset by $7 million increase in financial income and by the absence of $12 million in foreign exchange expenses recorded in Q2 2025. Tax expenses increased by $9 million. The ongoing improvement in cash flow from operation continued during the second quarter, reinforcing the quality of earnings and in indicating that the improvement in result is supported by strong cash generation from core operations. Excluding working capital fluctuation, our operating cash flow generation reached a run rate of approximately $100 million per quarter. This strong and recurring cash generation provides an important sources of internally funded capital, reinforcing our ability to execute on our growth strategy.