Earnings call transcript: Anaergia’s Q1 2025 Revenue Declines Amidst Strong Backlog Growth

Anaergia Inc. (ANRG) reported its financial results for the first quarter of 2025, revealing a slight decline in revenue but significant improvements in net loss and adjusted EBITDA. The company’s stock saw a minor dip of 0.88% following the announcement, trading at $1.13. The stock has shown remarkable strength with a 284.75% return over the past year, though InvestingPro data indicates significant price volatility. Despite the revenue decrease, Anaergia’s future outlook remains strong with a record backlog and continued expansion in key markets.

Key Takeaways

• Q1 2025 revenue decreased by 0.4% to $24.9 million compared to Q1 2024.
• Net loss improved by 48.6% year-over-year.
• Anaergia signed significant agreements in Italy and expanded its global footprint.
• The company reported a record backlog of $200 million, a 94% increase.

Company Performance

Anaergia’s performance in Q1 2025 showed resilience despite a slight dip in revenue. The company’s strategic initiatives in Europe, particularly in Italy, and its focus on renewable natural gas projects are driving growth. Anaergia continues to leverage its technological capabilities and vertically integrated model to expand its presence in North America, Europe, and Asia. The company’s efforts to reduce SG&A expenses and improve project economics are also noteworthy.

Financial Highlights

• Revenue: $24.9 million, a 0.4% decrease from Q1 2024.
• Gross Profit: $5.4 million, a 16.6% decrease from the previous year.
• Gross Margin: 21.7%, down 4.3 percentage points.
• Net Loss: $5.9 million, a 48.6% improvement.
• Adjusted EBITDA Loss: $3.9 million, a 34.5% improvement.

Outlook & Guidance

Anaergia’s forward guidance remains optimistic, with a focus on sustainable growth and project execution. The company expects continued booking momentum, supported by a record backlog of $200 million. Based on InvestingPro analysis, analysts project 21% revenue growth for FY2025, though the company is not expected to achieve profitability this year. Anaergia is targeting strategic growth in renewable natural gas markets, leveraging opportunities in Europe and beyond.

Executive Commentary

CEO Asaf Bahn emphasized the company’s focus on execution, stating, "NGR two point o, no talk, execution." He highlighted the booming market conditions and Anaergia’s strategic positioning, saying, "The market is booming, and we are right on the correct path." CFO Greg Wolff added, "Our goal is to continue to build backlog, continue to actually start execution on projects."

Risks and Challenges

• Supply Chain Issues: Potential disruptions could impact project timelines and costs.
• Market Saturation: Increasing competition in the renewable energy sector may pressure margins.
• Macroeconomic Pressures: Economic downturns could affect funding and project viability.
• Regulatory Changes: Shifts in environmental policies could impact project approvals and incentives.

Anaergia’s Q1 2025 earnings call highlighted the company’s strategic focus and operational improvements. While revenue faced slight declines, the overall financial health and future growth prospects appear robust, driven by strong market demand and a growing project backlog.

Full transcript - Anaergia Inc (ANRG) Q1 2025:

Operator: Hello, everyone, and thank you for joining us for today’s Anagia Q1 twenty twenty five Conference Call and Webcast. My name is Drew, and I’ll be the operator today. During today’s call, after the prepared remarks, there will be a Q and A session. It’s now my pleasure to hand over to Darlene Webb to begin. Please go ahead when you’re ready.

Darlene Webb, Investor Relations, Energia: Thank you very much, operator, and good morning, everyone. On today’s call, we’ll be discussing Energia’s earnings for the first quarter of twenty twenty five, which ended 03/31/2025. If you’re following along with our slides, my comments are directed to Slides one through three. On Slide two, you’ll see that on our call today, I am joined by Mr. Asaf Bahn, Energia’s Chief Executive Officer Mr.

Greg Wolff, Energia’s Chief Financial Officer and Doctor. Yaniv Shearson, Energia’s Chief Operating Officer. Before beginning our formal remarks, we would to refer you to Slide three of the presentation, which contains the caution on forward looking information and a note on the use of non IFRS measures. Listeners are reminded that today’s discussion may contain forward looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in these forward looking statements.

Energia does not undertake to update any forward looking statements except as may be required by applicable laws. Listeners are urged to review the full discussion of risk factors in the company’s prospectus, which is filed with Canadian securities regulators. And with that, I’ll turn the call over to Assaf.

Asaf Bahn, Chief Executive Officer, Energia: Thank you, Darlene, and good morning, everyone. We are now on Slide four. When I step into this role, we said that AGI would do three things: simplify the business, focus on execution and restore financial discipline. Nine months later, guess what? We’re doing exactly that through discipline, expansion and our strategic growth.

We said we will move towards a capital light model we have. We said we would grow our capital sales business, we are we said we would control cost and stabilize operation, we are doing exactly that. Moving to Slide five. This quarter results showed progress we expected to make. In several key areas, we are ahead of where we plan to be.

Our capital sales performance is above target. Our backlog has more than doubled compared to the same time last year, and that momentum continues to grow. This is not a onetime event. It reflects a steady commercial activity, the strength of our technology and the ability to deliver. We are now on Slide six.

In Q1, we took deliberate steps to strengthen our capital market presence with Energia now trading on the OTCQX under the ticker ANRGF. This listing enhances visibility, improves accessibility for our U. S. Investors and aligns with our focus of building long term value through disciplined execution. We are now on Slide seven.

The message is clear. We are executing, we are growing and we are entering this year with strong momentum. We could not have reached this point without the people who make it happen every day. Nigeria Two Point Zero is more than a strategy. It is a shift in mindset.

One, it is now fully embedded across the company. Our teams are aligned, our priorities are very clear and across every part of the business, the focus is the same, execution, accountability and results. The progress we are seeing is not the result of one or two decisions. It is a process it is a product of consistent follow through every day. We are not eating off.

We are moving with purpose and maintaining the discipline that has carried us this far. We are proud of what we have accomplished to date. The signals are strong, and we believe we are well positioned to continue building a stronger and more resilient Energia. To take you through the numbers and execution, I will now turn the call over to Greg, followed by Yaniv. Take it over, Greg.

Greg Wolff, Chief Financial Officer, Energia: Thank you, Asaf, and good morning, everyone. Let me take you through the financial results for the three months ended 03/31/2025, On Slide eight and nine, revenue for the first quarter was $24,900,000 a modest decrease of 0.4% or $93,000 compared to the same period in 2024. This minor decline was primarily due to a a slightly lower capital sales and food revenue, partially offset by an increase in o and m services. Regionally, we saw a decrease in revenue in APAC and Italy, while North America grew, supported by new capital sales projects and increased service activity. Gross profit for the quarter was $5,400,000 down 16.6% or $1,100,000 compared to $6,500,000 in Q1 twenty twenty four.

Overall gross margin for the quarter was 21.7%, down 4.3 percentage points compared to 26% in the same period last year. The overall decrease was driven mostly by lower profitability in the food segment that was partially offset by a larger increase in the capital sales gross profit. Capital sales gross profit margin more than doubled to 26.8% in Q1 twenty twenty five compared to 12.1% in Q1 twenty twenty four. This is our core business in our new capital light model. I’ll take you over to SG and A.

SG and A expenses for Q1 twenty twenty five were $17,200,000 an increase of 3.4% or 569,000 from 16,600,000.0 in Q1 twenty twenty four. The increase is primarily due to specific 2,950,000.00 reserve against accounts receivable balance. Excluding that item, SG and A would have declined 14.3% to $14,200,000 reflecting continued progress on ongoing cost reduction efforts. Net loss for the quarter was 5,900,000.0 a $48,600,000 a 48.6% or 5,700,000 improvement compared to a net loss of $11,500,000 in q one twenty twenty four. This was primarily driven by increased government grant income recognized during the quarter along with continued reductions in SG and A expenses, excluding the specific accounts receivable reserve.

Adjusted EBITDA for the quarter was a loss of $3,900,000 reflecting an improvement of 34.5%, down $2,100,000 from $6,000,000 loss in the same period last year. This improvement was primarily driven by the decrease in net loss as well as add backs of RIBF income tax credit transaction costs in the first quarter of fiscal year twenty twenty four that did not reoccur in the current quarter. Slide 10. As of 03/31/2025, our total revenue backlog increased 94% to a record of $200,000,000 from $103,100,000 at year end twenty twenty four. This increase reflects strong execution of new contracts in Q1, specifically in Italy and North America.

Of our current backlog, 182,400,000.0 is attributable to capital sales and $17,600,000 to long term O and M services. This backlog is measured under our refined definition, which includes only signed capital sales contracts and three years of modeled revenue for multiyear O and M agreements. We are highly encouraged by our growth in backlog and the project execution that will begin to follow. In addition to this backlog growth in Q1 twenty twenty five, we continue to be awarded other new significant contract wins, which we have publicly announced since the end of the first quarter. It reinforces the momentum we are seeing in key markets and supports our expectations for continued growth.

We are now on Slide 11. In Q1, we also successfully added a financial arrangement that has been a valuable support tool for our growth. On 02/05/2025, we entered into a new 13,900,000 line of credit with the Royal Bank of Canada guaranteed by Export Development Canada. The facility is valid through 01/31/2027 and is intended to serve as collateral for letters of credit required on certain capital sales contracts. In summary, our Q1 performance reflects operational discipline and continued progress on our energy of two point zero.

We delivered a meaningful improvement in net loss and adjusted EBITDA, lowered SG and A costs excluding the specific accounts receivable reserve and now have a record backlog that has nearly doubled since year end. Our trajectory is clear. We have reshaped the business with focus and intent to become capital light, leaning into capital sales strategy and a return to our core of technology, engineering and execution through the strength of our people. With that, I’d now like to turn the call over to Yaniv for an update on operations and project execution. Yaniv?

Yaniv Shearson, Chief Operating Officer, Energia: Thank you, Greg. We’re now on Slide 12. Our focus this quarter remained on disciplined execution through delivering projects on time and on budget and deepening relationships with key partners in strategic markets. We are seeing the success reflected by our growing backlog and new opportunities coming to us, particularly from top tier customers with multi project orders. Let me walk you through several of the highlights.

In Italy, we continue to build momentum. In January, we signed a binding agreement with TechBow to construct five new biomethane facilities across Southern Italy. Valued at more than 27,000,000 this agreement sees Energia supplying our proprietary anaerobic digestion technologies and core equipment while TechBal leads construction. These plants are expected to be connected to the gas grid by mid-twenty twenty six. In March, we received formal notice to proceed from the city of Fredamo, Italy for a new municipal waste treatment facility.

Valued at approximately $9,000,000 the facility will include anaerobic digestion to process more than 35,000 tons of source separate organics annually. It’s expected to generate approximately 31,400 megawatt hours of biomethane per year, which will be converted into renewable compressed natural gas for vehicle fueling. The project further expands our municipal footprint in the region. Commissioning is targeted for mid-twenty twenty six. And just days later, our Italian division signed contracts with entities owned by QGM to deliver two additional biomethane projects in Northern Italy located in Compago and Deroberde.

Each facility is expected to process more than 50,000 tons of agricultural waste annually. Together, these projects represent a combined contract value of more than $46,000,000 Energy is serving as the engineering, procurement and construction contractor and technology provider for both sites, which are expected to be operational by mid-twenty twenty six. Together, these initiatives significantly strengthen our position in Italy and demonstrate growing demand for Energia solutions across both municipal and agriculture applications. They also reflect the growing momentum behind the Repower EU incentives aimed at accelerating renewable natural gas adoption across the European Union. Now over to Japan, our Singapore based subsidiary signed a letter of intent with JGC Holdings, one of the country’s leading engineering firms, to deliver a facility that will convert 61,000 tonnes of organic waste annually into 1,700,000 cubic meters of renewable natural gas.

With Japan’s clean gas certificate system and 2,030 carbon neutral, gas targets now in place, we are well positioned to support one of Asia’s most ambitious clean energy transitions. In Singapore, we continued delivery of the integrated waste management facility, a multi phase capital project located at the Tawazu Basin. The project is approximately halfway complete and once operational will serve as the largest outlets for food waste recycling in Singapore. This initiative is part of Singapore’s long term strategy to integrate waste and wastewater infrastructure. And in North America, we are advancing upgrades at the Renewable Energy Anaerobic Digester Digester or REED facility at the University of California Davis.

Supported by a grant from CalRecycle, this more than $7,000,000 project will increase throughput and system reliability. These improvements help California meet SB1383 three targets for methane reduction and organic waste diversion while strengthening our long term partnerships with UC Davis. Across all active and planned sites, our customers are leveraging our deep know how and vertically integrated capabilities across engineering, technology supply, construction and operations to ensure project success. We are also continuing to advance our build on operate platform. We’re now on slide 13.

Our Southern California facility, SoCal BioMethane, continues to operate profitably and serves as California’s first co digestion plant injection gas to the grid. In q one, we completed upgrades that expand food waste co digestion capabilities.

: At the

Yaniv Shearson, Chief Operating Officer, Energia: Rhode Island Bioenergy facility, the plant is running stable with continued ramp up and delivering renewable natural gas to Irving Oil in Canada with participation in Canada’s clean fuel regulation. It remains the largest anaerobic digester plant in New England. In our Boost segment, revenue was $4,000,000 down modestly from 4,100,000 in Q1 twenty twenty four. The slight decline reflects the planned idling of our Charlotte facility in February, a decision made to reduce operating losses and improve project economics as we prepare the site for future conversion to RNG. Both Charlotte and Riverside remain in development.

Charlotte continues in a temporary idled state as we complete permitting and advanced construction planning. Riverside is progressing through preconstruction with development work underway under an existing capital sale contract with the city. These sites remain important to our long term build and operate strategy, and we are taking a disciplined approach to ensure their success. Together, these updates illustrate not only the progress we’re making project by project, but also the consistency of execution that now reflects Energia two point zero. Moving to slide 14.

None of this progress would be possible without the people who represent Energia every day, on-site, in meetings, and on the front lines of delivery. They are the face of our company to our customers and partners. The pride they bring to their work is reflected in the trust we’re earning and in the momentum we are building around the world. Their focus on execution, accountability, and results is what drives Energia two point four two point zero forward, project by project, milestone by milestone. We’re seeing the strength of that execution reflected in our backlog, which as you have heard now stands at $200,000,000 That momentum is being driven by the consistent delivery of projects, strong partner relationships and the confidence we are building in key markets.

Our focus remains on converting that backlog into results efficiently, reliably and at scale. And with that, I turn the call back to Asaf for closing remarks. Asaf?

Asaf Bahn, Chief Executive Officer, Energia: Thank you, Aniv. Today results speak to more than a strong quarter. They reflect a company that is aligned, disciplined, and moving in the right direction. We are building momentum, not with noise, not with promises, but with results. And Jira two point o is not is not a pivot.

It’s a commitment to performance, to accountability, to delivering what we said we would do. NGR two point o, no talk, execution. With that, Darlene, I’ll turn back the call to you.

Darlene Webb, Investor Relations, Energia: Thank you, Wissar. Operator, we can now open the call to questions.

Operator: Thank you. We will now start today’s Q and A session. Our first question today comes from Craig Irwin from ROTH Capital Partners. Your line is now open. Please proceed.

Craig Irwin, Analyst, ROTH Capital Partners: Good morning and thank you for taking my questions. So first, I should start by saying congratulations on the impressive growth in backlog. You know, a big achievement. Now if if we dig down into into the bookings there, you you gave us three projects that are are pretty pretty substantial. TechVal, Thermo, and then Northern Italy, and I’m gonna mispronounce the the partners’ names there.

So, you know, the $46,000,000 booking. If we actually take those out, I mean, you doubled sequentially. Right? But if we take those out, it looks like you still have a mid teens growth rate sequentially in the backlog. You know, can you maybe talk to us a little bit about the diversity of projects that you’re booking equipment for?

You know, are these projects smaller in nature or larger? And, you know, is this kind of positive momentum something that you think is sustained over over the next few quarters?

Asaf Bahn, Chief Executive Officer, Energia: The the the projects we are we have is actually a mix and match. Okay? We have some projects that are smaller. We have quite very large projects that that we have already signed. And the bottom line is that the market is booming, and we are right on the correct path of in making sure that Energia is known to everyone.

So as far as we are concerned, this is a pivot here. You know, this is a year that we can show our growth. Yaniv, maybe you can help me here.

Yaniv Shearson, Chief Operating Officer, Energia: Yeah. Of course. Greg, thanks for the question. So a couple a couple of points to highlight. The backlog reflects, in the trailing bookings that we’re still executing, predominantly from North America and, Europe, from ’24 carrying it to ’25.

And the projects that you see now, being booked are, we do believe that they are gonna be sustained for multi quarters. And the reason being is that we’re seeing a trend of multi project orders from single customers, particularly, in in the case of Europe and, also in in The US and our municipal segments. An example of, some of the announcements that we’ve made are major players, utilities or IPCCs in Europe that have committed to, ordering multiple projects, two, three, nine type numbers. And we’re seeing this tailwind continue in Europe, particularly backed by the Repower EU incentives and and increasing demand, particularly in in the Iberia region that is very much untapped, and we’re very strategic positions, Iberia and Italy, for the sustainability certificate of sustainability. So as far as project size, you know, we we don’t expect any change in in follow on feature bookings of projects that are both in the, you know, sub 10,000,000 and in the above 20 as we move forward.

Both both, as I said, in in the private agricultural sector as well as the municipal sector.

Craig Irwin, Analyst, ROTH Capital Partners: Understood. Understood. So then you used the word Yaniv untapped, which I kinda like. Can you maybe frame out for us how busy you are, addressing potential customer projects, you know, north of $25,000,000 in in in potential commitment?

Yaniv Shearson, Chief Operating Officer, Energia: Yeah. Of course. You know, can’t can’t give specifics for projects we haven’t, announced since, of course. But, certainly, there is large regions in in the places in Europe, particularly where we are, building now that I say untapped because there are, feedstocks. These these regions are fairly underdeveloped as far as just count of digesters, Portugal, Spain, Italy in particular, and are are are backed now in the case of Italy by a continued government support for a government backed incentive scheme that has continued, for for a number of years now and that we are taking advantage and leveraging for our customers, as well as our our presence there with, references that are that are successful and, being known as a dominant player with industry leading experience.

So the driver in Italy is really a government backed incentive scheme that the government has continued to support. And in Berea, Portugal and Spain, there’s really an untapped market, and we are very strategic with positions, much fewer digesters in this area. They haven’t traditionally been backed by government, programs, but they but there is strong incentive from Repower EU directive, and demand for that, renewable natural gas or biomethane, as we call it in Europe, is booming. And so it’s leading major players, like major utilities to get into the space who are are partnering with us because of our experience. And so to say to state the obvious, we are extremely busy, particularly in Europe.

And, our our our main focus is, sustainable growth, ensuring that we are getting the resources in place so we can execute successfully because it’s it’s an unprecedented wave, that we’re seeing in these markets. Again, places that, historically have had few few project counts.

Craig Irwin, Analyst, ROTH Capital Partners: Under understood. Understood. So then, a financials question. Right? I know you’ve worked hard this last year to bring down, your operating expenses and to make sure that, where you are spending money, it’s directly facing the opportunities that, you know, can deliver a credible return.

You know, the seventeen two in s g and a in the quarter, is that really sort of a fair base level of spending for us to expect, you know, maybe an increase over the next couple quarters, you know, as, 2025 unfolds? Or was there anything maybe one time in nature, where we could see, SG and A spending trend down?

Greg Wolff, Chief Financial Officer, Energia: Greg? Yeah. Correct. For the yeah. For the quarter, we had we did we do we did a reserve for for specific accounts receivable about close to 3,000,000.

So if you take that out, you know, our run rate’s in the 14 range for the quarter. I would say our run range going forward is somewhere probably a little bit a little bit north of that, but it’s probably, call it, 15 ish or so, you know, if you wanted to level set it, maybe slightly under. But that’s where we would see it in general. We don’t really give guidance. But you know?

And if you take this quarter and you take that one time out, then you’re you see where we’re at for the quarter, and we don’t expect increases in SG and A. We expect to continue to to work on reductions there, and just right size the business as we move forward. In addition to to the other comment, you know, we have, we have increased spending in areas such as, sales, and that’s why, geographically, we continue to spread out our our footprint. When we talk about project work, we have large projects, as you noted. We also have a lot of smaller projects, a lot of EP type work.

So, you know, from from our standpoint, the EP work will do anywhere in the world because we could do it from any of our locations from The US, from Italy, from Singapore, and use our our engineering, services from from most places. Our equipment sales then can be shipped in for that for the for the, you know, the product side of it. And so we really enjoy the EP side of the work, and that could be five to ten million dollar type projects. That’s a really good comfort zone for us. It’s it’s good work, and we like that, especially within areas we we don’t have.

You know, we can do EPC, and we’ll do that in The US and some in Europe. That’s only because we have we know the contractors that could do the larger projects with us. Outside of that, the EP work that we we received throughout the world with the seed money we planted in different regions is is very instrumental for us. Now we have a much further reach, and we can now leverage all of the offices that we have in the engineering side. And and our procurement can happen, and then we send some people over for the commissioning part of it.

That’s really, the the global strategy, and we will take on the bigger projects, like I said, in The US and Europe.

Craig Irwin, Analyst, ROTH Capital Partners: Excellent. Excellent. Then last question, if I may. I know your first quarter, is often impacted by either mix or, the early shipments into new projects, that are, going to be a more material contribution over the year. Can can you maybe talk us through the sequential or year over year margin progress?

You know, was there anything specific in there that that, you know, from a project basis, from a from a from a mixed basis, that was a delta versus these other comparable quarters? And, you know, how do you feel about the margin trajectory over the course of the year?

Greg Wolff, Chief Financial Officer, Energia: We’re very positive on the margins over the rest of the year. This quarter, overall margins were down a little bit as it has noted. Our capital sales margins remain in the you know, obviously, we’re at 26.8% in this quarter if you look in the MD and A, which was up last night. But that really where we where we suffered a bit this quarter was just some of our boo assets or as we continue to ramp up on a few of those. So that has been a little bit of a drag on our overall margins.

But our core business of, cap sales is is very strong. We’re very, very comfortable with where we’re at on the margin side of that business. And as you see in our backlog, that’s the majority of our of our forward work. So, the boo the boo assets will continue to ramp up and and become more of a contributor to our overall margin, but, that’s what that’s a little bit of a drag that we had in the first quarter on our overall gross margins. But, again, our cap sales margin, which is really what we’re we’re moving towards, is is very strong.

Craig Irwin, Analyst, ROTH Capital Partners: Understood. And, actually, if I can squeeze one last one in. I have not yet seen this in MD and A. I need to review it more carefully. But did you share a twelve month backlog number for the $200,000,000 print that you gave us?

I mean, is there is there anything you maybe can share if it’s not in the in the MD and A discussion?

Greg Wolff, Chief Financial Officer, Energia: We we don’t share a forward looking backlog number, obviously, but because it’s probably we don’t know where we’re gonna end up at, but we’ll well, we know internally. But, you know, we don’t share that piece. But, however, those projects that we have on there, the duration of those can be, anywhere from I mean, some of the smaller EP work could be probably, like, eight eight months, twelve months, maybe somewhere in that range. And the other bigger projects could be, you know, eighteen months to to twenty four months. So there’s a there’s a runoff.

And as as you know, construction, there’s that that kind of a bell bell curve. You know, as you start cramping up, it’s a little bit slow at first, and then you get heavily into it. And then at the end, there’s always a, you know, slower tail. But that’s that’s where we see it. So this is our goal is to continue to build backlog, continue to actually start execution on projects that we just were awarded as well as our core business.

And then and then, you know, that pipeline of backlog growth will will add the consistency to our numbers and our growth over time. And that’s really the strategy here. And I think as Yaniv had mentioned, the market is very, very, young in this in this area, and there’s the opportunities are everywhere. And with our geographical footprint now, it’s it’s getting better and better for us to see what’s available in markets that we were not in before. Again, with a low risk EP type project work that we can come in with, it’s, it’s it’s a really it’s a really good formula.

Craig Irwin, Analyst, ROTH Capital Partners: Great. Well, congratulations on the, the strong, business capture. I look forward to seeing you guys, generate some profits. I think that’s not too far out. So thank you.

Greg Wolff, Chief Financial Officer, Energia: Thanks, Craig.

Operator: Thank you. Our next question today comes from Adam Forsyth from Longsburg Capital. Your line is now open. Please go ahead.

: Thanks very much, and thanks, everybody, for the call so far. First question, just going back to that margin point. I did wonder, it does feel a lot like mix and really very much a quarter story. But looking forward, I wonder, are there any particular supply chain issues that are either areas of concern for you or even areas which we might see things improving in either side of the business? And then my second question, just a little more general one.

The Italian projects you have using agricultural feedstock, are any of these under the biogas done right program, the one using cover crops as part of crop cover cycling, or are they just really all just pure agricultural waste? Thanks.

Greg Wolff, Chief Financial Officer, Energia: Yeah. Projects are agricultural waste.

Yaniv Shearson, Chief Operating Officer, Energia: Yeah. Yeah. The projects are are agricultural waste predominantly. And, you know, the supply chain issues certainly happen at a a the that we’ve mitigated quite extensively. You know, we energy’s advantage is global presence and procurement options.

We we have you know, we always keep the Rolodex of multiple vendors to pivot to should should in the event of a a delay or supply chain issue with any particular piece of equipment. As you know, we also vertically integrated and and manufacture ourselves, key components, which gives us much more control on on schedule and and and quality of delivery, and and helps us navigate to competing priorities. And thirdly and lastly, that, you know, the one of the biggest powers we have here is is the buying power with multiple projects. And so, the scale, is a is a is a tool to our benefits of, improving margins on our projects with, you know, multiple simultaneous orders, with with discounts as an example and, giving us a a greater advantage, than we’ve had in the past, to control supply chain, mitigate risks with supply chain and and costs.

: That that that makes a lot of sense. That that’s great. And nothing on I mean, one area we’ve seen in the past from some other people is compressor costs to the extent that that’s an issue for you. Has that been a problem in the past? And are you seeing this coming down there?

Yaniv Shearson, Chief Operating Officer, Energia: The answer is yes. Prices demand is going up. Know, as I said, particularly in in Europe. So, yes, we are dealing with, you know, cost variability. We we, you know, we have strategies with, you know, multiple vendors, multiple geographies that we can procure manufacture.

: Yeah.

Yaniv Shearson, Chief Operating Officer, Energia: And, ultimately, we’ve also done a pretty good job of of preordering to lock in our our our orders and our inventory, yeah, in advance to mitigate those risk as we have high confidence, as evidenced by the releases in q one of large orders coming down the pipeline.

: Sure. Sure. That’s great. That’s really helpful. Thanks.

Operator: Thank you. We have no further questions in the queue at this time. So I’ll hand back over to Darlene Webb for some closing comments.

Darlene Webb, Investor Relations, Energia: Thank you again, operator, and thank you, everyone. As always, for additional information or should you have any questions, please contact the IR team at ir@anergia.com or visit us online at anergia.com. Thank you all again for your time today. Operator, you may now end the call.

Operator: Thank you. That concludes today’s call. You may now disconnect your line.

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