Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) reported its financial results for the third quarter and nine months ended September 30, 2024, highlighting significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the three months ended September 30, 2024, total revenue decreased to $81.965 million, down 9% from $89.851 million in the same period of 2023. This decline was attributed to a significant drop in gains on asset sales, which fell by 66% to $7.678 million. However, interest income increased by 18% to $64.068 million, reflecting a larger average outstanding debt balance and higher interest rates. Total expenses for the quarter rose by 12% to $84.848 million, leading to a net loss of $(19.176) million, a stark contrast to the net income of $21.647 million reported in Q3 2023.

In contrast, for the nine months ended September 30, 2024, total revenue increased by 21% to $282.298 million, compared to $233.286 million in the prior year. Net income for this period was $132.316 million, a substantial increase from $59.767 million in 2023. The growth in net income was bolstered by a significant rise in income from equity method investments, which increased by $135 million due to tax credits from a solar project.

The company’s total assets as of September 30, 2024, stood at $6.673 billion, up from $6.552 billion at the end of 2023. Total stockholders’ equity also increased to $2.323 billion from $2.142 billion. The company’s debt levels decreased slightly to $4.131 billion from $4.247 billion, resulting in a debt-to-equity ratio of approximately 1.8 to 1, below the board-approved limit of 2.5 to 1.

Strategically, HASI revoked its Real Estate Investment Trust (REIT) status effective January 1, 2024, transitioning to a taxable C Corporation. This change will subject the company to federal and state income taxes on its net taxable income, impacting its dividend distribution strategy. The company also entered a strategic partnership with KKR, committing to invest $1 billion in climate solutions projects over the next 18 months.

Overall, while HASI faced challenges in the third quarter, particularly in revenue generation from asset sales, its long-term performance indicators, including net income and total revenue for the nine-month period, showed significant improvement, supported by strategic investments and partnerships.