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Greetings and welcome to Energy Vault's Fourth Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] It is now my pleasure to introduce Michael Beer, CFO of Energy Vault. Please go ahead.

Thank you. Hello and welcome to Energy Vault's 2024 financial results conference call. As a reminder, Energy Vault's earnings press release and presentation are available now on our investor website and we'll be referring to the presentation during this call. A replay of this call will be available later today on the Investor Relations portion of our website. This call is now being recorded. If you object in any way, please disconnect now. Please note that Energy Vault's earnings release and this call contain forward-looking statements that are subject to risks and uncertainties. These forward-looking statements are only estimates and may differ materially from the actual future events or results due to a variety of factors. Please refer to our most recent 10-K filing for a list of those factors that cause our results to differ from those anticipated in any forward-looking statement. We undertake no obligation to publicly update or revise any forward-looking statements, except as required by law. In addition, please note that we will be presenting and discussing certain non-GAAP information. Please refer to the Safe Harbor disclaimer and non-GAAP financial measures presented in our earnings release for more details, including a reconciliation to comparable GAAP measures. Joining me on the call today is Robert Piconi, our Chairman and Chief Executive Officer. At this time, I'd like to hand the call over to Robert Piconi.

Great, Michael. Thank you and welcome everybody to our earnings call. 2024 represented a very important foundational year for us and the company in our evolution and growth. We continue to focus on that growth and focus on what customers are requiring, focus on solving their problems and executing delivering energy storage systems, while setting the initial framework for increasing our exposure to the ownership of energy infrastructure assets that we develop, build and deliver. And beginning now to operate, enabling us to capture more reliable and predictable revenue streams at higher margins in the markets where we continue to expect power price volatility and variability where our software management and bidding platform can enable superior financial returns. On that point here right up front on the call, we made an important announcement today regarding the Stoney Creek BESS or Battery Energy Shortage System. And I was asked many, many questions from some investors that I received some emails on to expand a bit on what the nature of the contract is and what it means for Energy Vault. So I thought I would do that upfront since we just announced that this morning. We're very excited about the partnership that we've had with Enervest from the beginning. As most all of you saw back in October, we did an announcement that started as an award of an energy storage system for one gigawatt hour. We did not state the duration of that system because we were in parallel applying for the LTESA or the Long-Term Energy Service Agreement with Enervest for the contract with New South Wales. So we specifically did not specify, for example, if it was a two hour, four hour, eight hour system. We were successful and awarded that contract in February of this year. As originally announced, it would have been a contract of about AUD350 million as we announced, so roughly about US$220 million. Now with the LTESA award, that converts essentially into a longer term contract. So that contract, as announced in October initially, would have resulted in somewhere around $125 million of potential RevRec into this year in 2025. Once we won the Long-Term Energy Service Agreement that in partnership with Enervest, we did a consortium bid on it. We began to work on the agreements with Enervest about intending to sign an agreement to actually acquire the entire project in line with our build, own and operate strategy. From a financial perspective and this is all public information and we try any announcements in the one that we made on the LTESA award, there's links in that announcements that go right to the public, documentation on the AEMO services website, which works with the New South Wales government on the development of the plans and the resource plans for their grid evolution. However, we will share a little bit and I will share a little bit now about what that LTESA and the implications around revenue, for example, are for the company. The agreement works essentially as a contract over 14 years. There's various things that can happen over the life of that contract. The contract guarantees a minimum of $20 million and I'm just going to use US dollars to make it easier for everyone over that fourteen year period. We're allowed to participate in the market under merchant revenue through the life of the contract, but the $20 million is a guaranteed minimum with other characteristics and things through the life of the contract through the 14 years. We can operate the system longer than 14 years. And also, if we have merchant revenue above the $20 million we're allowed to take 100% of that revenue up to $36 million per year. Above $36 million there is a sharing essentially with the government of 50-50 on that revenue. So those are annual numbers of the contract. And you get a sense just by those numbers and all of you are very good at math here on this call. It has the potential for significant revenues. Obviously, the year-to-year there'll be differences. The merchant revenue might be very high in some years and maybe lower in others, but obviously, having a government backed offtaker and having that predictable revenue streams with that type of a very high credit worthy offtaker is something that's behind a lot of what we're doing in the build, own and operate strategy. I also got some questions on how we would look at financing something like that and there's standard mechanisms there in Australia with a lot of extremely large funds. There's global funds from across the US and Europe that work in Australia, understanding project financing structures. Obviously with a government offtake agreement like that, so having an LTESA, again stands for a Long-Term Energy Services Agreement. They're very standard mechanisms and with an offtaker like that, you get essentially very attractive project financing structures to develop the project. So I wanted to share some of that information on a from a financial perspective. I received some questions also around what is the profitability look on projects like that. And this is out was out in our investor presentation and I think in a similar type of profitability structure in the US, but in our presentation from the main Investor Day as well, just referring to it, if you go back to that presentation, the EBITDA ranges on projects like that are anywhere between 75% to 85%. So I thought I would share that upfront with you since I received some questions on that. We're really excited about the partnership to continue to work towards the final close of that contract with Enervest and then the further development of that. Ross Warby and the team have been really good partners. They're working in other projects in Australia and look forward to focusing and continuing to develop this project. A few perspectives from 2024 and then we'll jump right to 2025 and turn it back to Michael then for more detailed financial review. But I do want to highlight and just jump right into the numbers of what we announced today. Our contract bookings increased significantly quarter-over-quarter by 90%. It's one of our larger increases on a quarter-over-quarter basis, but grew that backlog importantly to $660 million from $350 million the last time we were on the call here. That's about a 3x growth from our Investor Day that we had back in May 2024 and about a 4x growth or quadrupling that number one year ago. So I think that as you look at the projections and you look at the trajectory of the company, the bookings number is a very good indicator around how our future revenue is secured. And very important, I think that we continue to see and build momentum there. It continues to be an important leading indicator for our future growth and obviously the revenue expectation behind that. The main regional drivers there were squarely in Australia and the United States, and that's with utilities and IPPs generally. The recognized revenue on 2024 finished just over $46 million which was reflecting some of the Q4 battery hardware deliveries. This is slightly below the lower end of the guidance given our transitional year for project starts, but it also represents some conscious choices that we made to own some of the energy infrastructure assets this year that we're developing and delivering. Overall, that impacted us by about $100 million in the year, but we believed and continue to believe that this will be in the longer term interest of our shareholders and our company to build more longer term recurring predictable revenue streams at high margins and we are playing into a market that we continue to expect to have significant price volatility and variability and therefore with our software platform an ability to manage that and do economic dispatching and bidding into the market. Our gross margins improved year-over-year from about 5% in the last year to 13.5%, again slightly below where we should have finished in the 15% to 20% range, obviously a large increase from last year. We were impacted on a specific customer project where we had a supplier that fell out from a bankruptcy and had to step in and essentially execute their work for the customer. These things happen in projects for anyone that in our industry that is building out energy infrastructure, those things happen. Interestingly, the same customer because of the nature of how we solve that problem and despite the supplier issue and we minimize the impact to them, we were awarded a second project that was already delivered 100% at least for the battery infrastructure into Q4. So there's always issues that crop up in projects and I think how you solve that and how you focus on ensuring you minimize the impact of the customer goes a long way in future relationship and business. We progressed the project financing on our first own and operate project, the Calistoga Resiliency Center, the offtaker Pacific Gas and Electric, which is under commissioning now. Interestingly, we held in January an investor and analyst event there, really not to give any broader customer or company guidance, I should say, but really just to showcase what's the largest and will be the first green hydrogen hybrid system in the world of its size and one that we're very excited now to be in the commissioning stage and been a great partnership with PG&E and the local community there. We also from a financing perspective there received earlier in the month a price bond and a financing commitment. That commitment and that partner was not in our announcement, but it's Eagle Point and really appreciate the partnership with Jennifer Powers and the team there for that and we're expecting that to close in the month of April. That will add about $28 million back to the balance sheet as we close. We're continuing to manage our cash without equity dilution and now having the project financing model now well in place and now beginning to execute those financings and expecting to begin to put some cash back on the balance sheet as we go through the year. And also I should mention in protecting our cash on top of the operating expense reductions that we executed last year in 2024, we are continuing to look at our infrastructure and our resource allocation to, I'd say first, adapt that resource allocation to the most promising secure near-term accretive projects while taking actions to, in some cases, eliminate or optimize or reduce areas that are non-core. These are not easy decisions to make at times, but if anything, as all of you know in this market, if you look at the last three years, it's amazing to me the amount of change we've seen just between things like the lithium ion pricing and how that's evolved, how markets have evolved with data centers and AI and what's that striving in terms of power demand and just fundamentally, generally the need for more and more cost effective, sustainable and safe energy storage. These are things that also number two here as we approach this year, we've done it with a milestone approach to our budget and build up and unlocking investment when projects become pretty much certain. So given the market conditions that do require some tough choices at times and for our organization as we have to adapt, we will continue to look at ways to reduce both fixed and variable cost while investing in the most promising areas. As I mentioned, one thing we know and will continue to see every year, the one constant is you should adapt or you'll be eliminated. And as we've demonstrated, I think for those of you that know us over the last three, four, five years as we evolved with technology, as we evolved with software, as we evolved with solutions and what we've announced and are now delivering in the markets. I think that's one of the things we've been able to do and it's a tribute to the organization we have and the people and the talent and their abilities to understand the need for that and be able to adapt and operate at a high level in that environment. Before getting to 2025, one note on the energy infrastructure strategy we have been executing. We have focused on creating a small number, but large and megawatt project portfolio of assets within our decision control to build, own and operate what we expect will be an important part of consistent revenue, cash and profit generation in the future. These things take some time to build obviously and eventually begin to become a double-digit percentage of our revenue over time. That portfolio as an update now consists of six projects, a few of which and the first one Calistoga, we're expecting here online in the next quarter with the financing that we've just mentioned that project is built mechanically complete. The entire portfolio as an update represents now a total of 840 megawatt. That 840 megawatt has a potential of generating well over $2 billion to $2.5 billion in revenue streams over a 10 to 15 year period. There's obviously variability in that depending on, for example, having contract offtake agreements, which on the first three projects we've actually announced those contract agreements. Some of those projects still have to get through the financing structure, but our first one now is completed here or set to complete, let's say, and close in April on the financing in Calistoga. These offtakers on the first projects include public utilities and government backed financial institutions. Those are the type of offtakers that help ensure getting the best type of terms relative to the project financing that you get. But in every case, you want to minimize with these offtakes the merchant risk. Obviously, there's upside there on merchant revenue with all the ability to capitalize on market participation for those upsides during times of more volatility in the power supply demand and thus in the associated pricing. I want to shift to 2025 now. We've provided some additional charts in the Investor Deck that will help simplify and bridge some of the numbers, which I invite you to review. We're going to be bridging, I think, back to some of the things we've talked about as we had our first Analyst Investor Day where we set some guidance between what was 2024, which we knew was going to be a bit of a GAAP revenue year and then as we looked at 2025. Coming off this last year as we held some projects on our balance sheet and had some projects that moved to a little bit later in the year, we are expecting a large uptick in recognized revenue on the projects under execution as well as pending opportunities to achieve upside given desire to have deliveries secured prior to the end of 2025 here in the US given tariff increases in 2026. We're working hard on all the near-term opportunities and deliveries this year, with the benefit of a large contracted backlog, obviously, which is a strong position to be in as we enter and are now almost to the end of the first quarter here in 2025. To bridge some numbers for everyone and during our Investor Day in May a year ago, we provided an outlook and the 2025 portion of that was resulting in about $450 million of revenue. I mentioned some of the bridges in the Investor Deck on our website. Our outlook that we're giving for revenue for the year is $200 million to $300 million so a midpoint of $250 million that fits squarely in line with this guidance with two main impacts to that recognized revenue. One, we've just talked about today that started in October 2024 of the Enervest project that we were awarded that initially started as a standard build and transfer project with our Energy Storage Solutions. That was converted, as we mentioned here earlier on the call, to a Long-Term Energy Service Agreement that will have multiples of that, what would have been EPC revenue and at higher profitability over time. So we're very excited about fulfilling that, albeit it is an impact to the initially anticipated revenue this year in terms of revenue recognition. We expect that asset to be a minimum of the 14, 15 years, but be able to operate even well beyond that. The other impact that was significant and no secret as we've talked about on prior calls, we've seen a tremendous price erosion and degradation in the pricing associated with lithium ion and LFP technologies. While that can be a good thing for project economics and as you saw we moved from a 5% just over 5% gross margin in 2024 to a 13.5% or so gross margin I'm sorry from 2023 to 2024 to 13.5%. But that impact and that steep of a decline obviously is going to reduce the overall sizing of projects and total revenue. So with that reduction was the other impact on our overall revenue for the year, but feel very good about having the backlog and achieving that range of revenue. A lot of things the teams are working hard on to try to deliver that revenue and try to deliver on the upsides that they target every year. But the tradeoffs of the long-term, a higher revenue and profit over the long-term versus the short-term at much lower margin, we believe is the right one for the long-term growth and profitability of the company and our shareholders. As noted above on cash and protecting the balance sheet and here in 2025, we are only entering into projects that we would own that have already contracted offtakers with attractive IRR returns and that's the ability to have a high likelihood of financing and we'll make decisions as we progress here. We're very focused and selective on which projects we may go into. We have a process and a governance for how we look at those things. We obviously got started here with utilizing our own balance sheet cash on the first two projects as they were slightly smaller in nature and are now going to be backfilling some of that cash with the project financings. With that upfront on those comments, I'd like to turn it over to Michael Beer.

Thanks, Rob. As you highlighted, the company currently maintains a revenue backlog of $660 million which increased 90% from the figure reported during our 3Q earnings results and 3x that reported from our May 2024 Investor Analyst Day. This reflects a number of new projects in Australia, US, and Switzerland, including the 100 megawatt, 200 megawatt hour Horsham project in Victoria, Australia, the 125 megawatt, 1 gigawatt hour Stoney Creek project in New South Wales and which you already went into great detail on the 14 year Long-Term Energy Service Agreement the LTESA. All told, we have 2.6 gigawatt hours in projects in Australia either contracted in agreement for acquisition or awarded with the 400 megawatt hour ACEN project already under construction. We're encouraged by the traction within our third-party build and transfer business and the evolution of our build, own and operate strategy now representing 2.4 gigawatt hours via our EPC, EEQ and Long-Term Offtake Agreements with another 9.4 gigawatt hours or $2.1 billion in our developed pipeline of awarded or shortlisted opportunities, which the team is working to convert. Note, we adjust our developed pipeline for prevailing battery prices and FX rates for those projects overseas, which reflects the approximate 40% decline in battery prices and associated implications around changes in the tariff regime. As discussed during our investor and analyst tour at the Calistoga Resiliency Center in California earlier this quarter, the company continues to work with our financial partners around the optimal capital structure for those projects under the own and operate umbrella, leveraging our Long-Term Energy Storage Agreements. We're in the process of finalizing a project financing transaction on the CRC project and in the market to secure project financing and ITC monetization for the Cross Trails project prior to completing that spend. As previously announced with the LTESA award associated with the AUD350 million Stoney Creek project, we believe that project will have attractive returns with an appropriate level of project finance yet to be secured. As mentioned in our press release this afternoon, we're filing an extension for our annual report on Form 10-K to allow additional time to complete financial statement preparation and analysis due to a pending transaction, which could affect subsequent events with note. Okay. Looking back at 2024 results. We achieved Q4 2024 revenue of $33.5 million principally associated with the Jupiter St Gall 2 equipment delivery. Full year 2024 revenue of $46.2 million was slightly below the low end of the guidance range due to rapidly declining battery prices and the timing of gravity related license revenue recognition. As discussed previously, as part of the shift to retain ownership of accretive energy storage assets, management believes that the year-over-year decline in FY'24 was in part attributable to the $100 million in projects retained on the company's balance sheet versus recognizing revenue through our build and transfer business. Over the course of the year, the company invested $59 million into these assets, but are yet to complete the associated project financing or monetization of the associated tax credits as of 12/31/24 currently underway. On gross margin, our Q4 2024 GAAP gross margin of 7.7% improved versus the 3.4% margin a year ago, but was impacted by unfavorable revenue mix on equipment deliveries for the project in Texas. 2024 full year GAAP gross margins of 13.4% improved notably versus the 5.1% recorded a year ago due to higher margin O&M services and SaaS license revenue, but fell slightly below the low end of the guidance range due to a one-time warranty impact in which Energy Vault stepped in for a bankrupt supplier and the slippage and timing of recognition of gravity license revenue. Adjusted operating expenses, excluding the impact of stock-based compensation and other one-time items, our Q4 2024 adjusted operating expense of $16.1 million improved 15% year-over-year, reflecting call side actions taken earlier in the year. Full year 2024 adjusted operating expenses of $64.5 million improved 19% year-over-year. During the company's Investor Analyst Day, management discussed the company's focus on core markets and activities to drive shareholder value and has continued to tailor its approach on the cost side to right size and resource appropriately. We remain focused on portfolio optimization toward near-term and secure growth opportunities and expect cost optimization initiatives will continue in 2025, focused on accretive and cash generative projects as well as resource allocation to critical and near-term milestone based initiatives. Now turning to adjusted EBITDA. Again, excluding stock-based comp, provision for credit losses, a write-down of an investment and reorganization related expenses, our full year 2024 adjusted EBITDA improved modestly year-over-year to a loss of $57.9 million within the guidance range of a loss between $45 million and $60 million. And that's despite weaker revenue and total gross margin contribution due to our cost side initiatives implemented during the year. The company ended the year with total cash and cash equivalents of just over $30 million and no debt on the balance sheet as of 12/31/2024. Restricted cash also declined notably to less than $3 million at year end. Total cash was below the guidance range as certain customer payments slipped into the New Year and the Calistoga project financing was signed later than anticipated. The company reported $59 million of cash used in investing activities, primarily related to construction of projects on owned and operated projects during the year and the company ended the year with a total balance of property and equipment of roughly $100 million largely again associated with Calistoga and Snyder, Texas. The company has now received a funding commitment from an investor inclusive of tax credit and expected closure in April 2025, returning $28 million to the balance sheet. Calistoga achieved mechanical completion and is now under commissioning of the system with full operation expected in Q2 in time for the critical fire season. Meanwhile, the company is currently in the market for project financing and ITC monetization at Cross Trails, but we've yet to complete that transaction and will manage the spend accordingly. The company also continues to maintain significant bonding capacity in excess of $1 billion to facilitate additional growth projects in both the US and Australia. We continue to execute on the build, own and operate strategy and have identified a strong funnel for storage asset ownership and infrastructure projects in the US and Australia totaling over 30 gigawatt hours. We also see a host of advantages and synergies across our legacy business, our traditional business, as we leverage our project management expertise, solutions based approach and diversified storage product portfolio. While inherently more capital intensive than the EPC business, these accretive owned and operated projects enhance earnings visibility and our margin profile. Despite multi-quarter progress around this strategy and our traction to-date in identifying, securing a slate of attractive projects, we will manage and improve investment depending on the nature of the offtake agreement, available tax credits and the use of project demand. With that, I'll hand the call back over to Rob.

Thank you. Just to close here before we open up for questions, I want to thank all of our employees at Energy Vault and the teams that are out executing globally on our projects, supporting our customers, helping our communities. There's been a lot of, I think, events in particular here in The United States that impacted many of our employees, in some cases, severely. And just a special thank you for those here in California that worked through the fires here in Southern California and others that were impacted by the other tragedies that took place. With that, operator, I'll turn it back to you.

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question is from Thomas Boyes with Cowen. Please proceed with your question.

Thank you very much for taking the questions. Maybe the first one is just what are the gating factors to hitting kind of your operational target for Calistoga? And is that linked to having the $28 million actually coming in? Or is there something else at play there?

Thanks, Thomas. On the operational targets that we have in terms of where we are with the project, it's in commissioning now. So the project's mechanically complete and we're essentially going through now the activities to have the software now get the systems tested sort of section by section and then ramped up. We are then filling the green hydrogen tank and then we'll be energizing the system here over the next 30 or 60 days as we go through that commissioning process. So in terms of operationally, you asked about for successful, it's getting to the, I think, energization and the timeframes we expect. We don't expect to have issues here. We have fundamental technologies that each on their own have performed for many, many years between the hydrogen fuel cells, the tank from chart and then we have a lithium-ion system there as you know that essentially handles the grid forming and some of the black start capabilities and hosts our software that orchestrates the entire system. So I'd say we have a sort of a straight line here because we are mechanically complete and in commissioning to have the system ramp up. To your second question on the project financing, that project financing is committed and so we go through our process and the funding is normal that would be in the April timeframe. But as far as that financing and then as the project gets to what's called either COD or operation and energization. There's obviously things with that financing that then get unlocked, let's say, as we move that system to full operation as well as things like monetizing tax credits, which was included the tax credit monetization was including in the financing.

Yes. And I think importantly all of the capital to build that has already sort of gone out the door. And so as a result, that cash would return to us. So it wouldn't be allocated to completing the construction in other words.

Of course. No, I appreciate the clarity there. And maybe as my follow-up, just on the tariff impact. I mean I was just wondering kind of mitigating steps that you guys are taking. I've seen some reports where just on kind of where we are in the current tariff landscape that Battery Energy Storage System cost could be up anywhere between like 6% to 15%. And obviously there's some step changes that occurred to be in 2026. So just want to get your view there and maybe an update on the core investment that you guys have made previously and maybe how that interplays into your positioning going forward.

Okay. Well, great question. There's obviously a lot of focus on the tariffs as well here in the US market. But we I think as far as this year goes, while it delayed initially, I would say, even in the last year, some project decisions or let's say things took a little longer as we the negotiations were longer of who absorbs the tariff. I think generally part of that decline in what we're seeing in lithium-ion, I think, some of that is reflecting some ability of the suppliers to try to offset those tariffs. We look at as far as the US goes, there's a push here this year on getting deliveries done prior to the end of the year where we have the larger tariffs that kick in up to 25%. So I think the good news about that is, we have a lot of customers that would like to get deliveries into this year and into Q4, which that's nice for revenue recognition as things go. So I think we're seeing that dynamic. As we get into next year and the following years on that, I think there's going to be various initiatives. There's obviously things that are happening here in the US with domestic players. The other thing with Energy Vault is we have a large set of forward revenue that's going to be coming in Australia. So we don't have those tariffs, for example, in Australia for the businesses we're supporting and we've announced many projects recently and have projects totaling there over 2.5 gigawatt hours. So I think having that global diversification is definitely helpful. You asked about core power. So I'll mention this that core had some difficulties in after getting the conditional approval in securing some of the equity associated with that. So they're associated with that conditional approval on the loan, not unlike I think some of the companies that had similar issues there. And so they're working through that and looking at alternatives for how they want to go forward to try to monetize. I think a piece of the business is, they're more mobile and more C&I related type of business, so that continues. But as far as building out their factory, they have had a bit of a revamp in their strategy there. There are other domestic content options in other companies and ones that are part of our supply chain and we'll look to those as well as in some cases buying from outside of China. There's a lot of groups that are looking at building factories both outside of China, outside the US and some here in the US. So I expect this issue to get a little better over time. But in the meantime, we're satisfied with what we've got this year and into next year and the other global markets we have where we don't have to deal with the tariff issues.

Excellent. Appreciate the color. I'll hop back in queue.

Thank you.

Thank you. Our next question is from Chris Ellinghaus with Siebert Williams Shank. Please proceed with your question.

Hey, guys. Good afternoon.

Hey, Chris.

Rob, can you give us any update on Snyder?

Sure. You mean our commercial demonstration unit there or?

Yes.

Sure. We have completed there the and finalized what are some of the gravity, the first, let's say, two gravity demonstrations systems that are built at an MVP or minimum viable product. So that's EVy, which is a slow gravity technology, and as well now just commissioning the EVx portion of that. So those are we use those to host customers. We also have our battery system there that hosts our software as well as a PV, a solar array. So we have a full, let's say, orchestration between renewable generation and storage and how the software is orchestrating across those technologies. So that's, we're completing some of those works just now and utilizing that site for hosting customers. We had customers, for example, about Eskom made a visit there late last year given some of the transitions that the largest and really is the power utility in South Africa that's going through their energy transition from coal right now. So we have a larger global customers that continue to visit it and we're sharing, of course, everything we're doing there with Enel Green Power, which was the reason we were building out some of those assets in Texas as they're looking at technologies to evolve their global infrastructure.

Is CapEx remaining for 2025 material?

Not for Snyder. So we don't really have any although all the hardware is there and acquired, we really don't have any near-term plans on any additional CapEx at all.

Okay.

Yes. And I would just highlight that we're of the belief that based on the IRA tax credits that there is an associated, let's call it, $13 million to $15 million tax credit for that particular microgrid. And so that obviously would need to get monetized.

Okay. Michael, the Q4 credit provision, can you give us some color there?

Sure. So we had a credit asset associated with a gravity license from a customer in 2022. And given the delay in receipt of some payments, we took a conservative view in taking a reserve around that particular contract asset. We're still in communication and working with that particular customer for payment. But at this stage, we've gone ahead and taken a reserve and we'll continue to work with them to collect on that outstanding balance.

Okay. You mentioned Cross Trails project financing. Is there any color you can give us in terms of your expectation for timing or any roundabout magnitude there?

Yes. What I would say is, we're actively in the market, having conversations today. And obviously, this is -- this would be viewed as a very attractive project with a -- with an offtake agreement in place. So we're, you know, we're out there having those conversations today and would be, you know, pretty encouraged that we'll be able to swiftly move to a close, but have not identified that counterparty. And the goal would be obviously here over the next couple of months to secure that and complete the associated project.

Okay. And lastly, in the revenue guidance for the year, can you give us any color of licensing royalties included in that number?

Today, we've not included anything material in that $250 million or $200 million to $300 million associated with gravity. But gravity is even historically has been a fairly de minimis amount of revenue. It is however high margin. So it contributes quite nicely to the gross margin, but it's fairly de minimis in the overall mix from that perspective. We do obviously have contracts in place. We've talked about publicly with GESSOL in South Africa, continuing to work with those folks and a host of others. But in terms of incremental, it's not a meaningful part of that $200 million to $300 million.

Okay, that's helpful. And lastly, Rob, you sort of sorry about that alluded to this, I think, but with the decline in lithium-ion prices so significant, would it be fair to say that, with that portion of the denominator being somewhat smaller, would it be fair to say that margin is likely to be higher for 2025?

By the way, it's a great question. Our expectations are given our supply chain and the way we've as we've won projects, Chris, and then going to secure based on a bucket of projects, for example, that are in within a 90 day window of award. We try to go secure pricing and there's obviously a lot of interest from the supply side to aggressively price. So we are expecting margin expansion as we look at the year and something that I think we've managed well even in the Australian market as we begin to execute there. So we believe this will be a good thing for projects and also even the IRRs on Michael mentioned Cross Trails you asked about and we are in the market there on the financing, but those projects are get interesting and we're managing I think with the suppliers in a way that allow us to do incrementally better. And I think we've shown that if you look at 2023 at the 5% growing that to 13.5% and we're expecting some expansion again this year, especially the higher revenues. And last year we only had 46 -- just over $46 million in revenue. And so as we grow that, now the revenue base start to go off that backlog a bit here and we feel good about that.

Right. That makes sense. One more thing, you talked about maybe some of the lithium-ion cost reduction is sort of front running tariffs. Given a lot of purchasing for Australia that won't be affected by those tariffs. Is there a pricing differential between a US purchase right now in Australia?

The answer is yes. I'd say, generally, we're taking advantage of the fact that the pricing, I think, one, is out of China has come down broadly, again, focused on the US. So we're taking advantage of that in Australia. And I think also even the providers are targeting Australia I think is a market to try to achieve a little better than what they're achieving potentially on the US side. But I'd say generally, we're trying to take advantage of that in terms of just the arbitrage there.

Okay. Thanks. I appreciate the color.

Yes. And just one comment on that. As a company, we've been sort of duration agnostic, but obviously have a very unique foothold in long duration or ultra long duration opportunities. And quite frankly, at prevailing battery prices today, these longer duration projects can pencil whereas maybe a couple of years they hadn't. So I think that is an interesting sort of driver and you're starting to see creep in a project with slightly longer durations.

Okay. That's helpful, Michael. Appreciate it.

Thank you. There are no further questions at this time. I'd like to hand the floor back over to Robert Piconi for any closing comments.

Okay. All right. Just to thank everyone for their time and joining the call and we'll look forward to get together once again here in a quarter. Thank you all very much.