Fervo Energy: Heat on demand - Q1 earnings update

Research evidence excerpt

Fervo Energy: Heat on demand - Q1 earnings update

NVIDIA’s AI infrastructure (employing PNNL’s computing

resources). Management explained that it would allow FRVO to better understand subsurface risks and tighten feedback loops

on newer projects, thereby lower costs.

Liquidity tightened during the quarter as construction accelerated, with cash and cash equivalents of $280.8mn at March

31, 2026 versus $461.8mn at year-end. That said, the more relevant financing takeaway from the call was post-quarter:

management highlighted repayment of the XRC facility using proceeds from the approximately $421.4mn Project Granite

facility, leaving the company better positioned to fund continued buildout at Cape Station.

Capex remained the clearest signal of where the company is in its lifecycle. Fervo estimated 1Q26 capital expenditures of ~

$180.0-200.0mn, versus $93.9mn in 1Q25, with spending primarily directed toward Cape Station, where approximately 500

MW is under construction. In our view, that remains the right lens for the stock: not near-term revenue, but whether capital is

translating into timely and repeatable project progress.

Commercially, the update was steady. Binding PPAs remained unchanged at 658 MW with approximately 15 years of remaining

term, while the 3 GW framework agreement with Google broadens the longer-dated opportunity set tied to data-center-related

power demand. While the Google agreement is non-binding, it is directionally supportive of the thesis that clean, firm, well-

located power remains scarce and increasingly valuable.

Net-net, we do not think the quarter changes the story. The key variables remain Cape Station execution, continued contracting

momentum, and evidence that Fervo can move down the cost curve as it scales.