Innio: Firing on All 20 Cylinders: Initiating at Overweight

Research evidence excerpt

Innio: Firing on All 20 Cylinders: Initiating at Overweight

funded capacity alec.mcguire@jpmorgan.com

J.P. Morgan Securities LLC

expansion across Austria, the U.S., and Canada, targeting a near tripling of

capacity to 10 GW by 2030, supporting sustained revenue growth, margin

expansion, and service visibility over time. Quarterly Forecasts (FYE Dec)

• Recurring, High-Margin Services Model Drives Visibility into the 2030s. Adj. EPS ($) 2025A 2026E 2027E

INIO’s installed base of ~44 GW underpins a resilient, high-margin service Q1 (0.01)A 0.15

business, with a service contract attach rate above 80% and contract durations Q2 0.05 0.18

of 10+ years. Service intensity is structurally increasing as data center demand Q3 0.11 0.18

for prime power grows, driving service revenue growth above installed base Q4 0.17 0.23

FY 0.19 0.33 0.74

growth over time. The long-dated, recurring nature of these contracts provides

revenue and margin visibility well into the next decade, with the Services

flywheel expected to become an increasingly dominant contributor to the

business as the installed base matures in the 2030s.

• Resilient Cash Flow and Deleveraging. INIO’s business model delivers

strong cash conversion (70% in 2025), with working capital discipline and

customer prepayments funding growth. We believe the company is on track to

delever from ~3.6x to <2x net debt/TTM EBITDA by 2027, supporting capital

allocation flexibility.

• Initiating at Overweight. INIO trades at 21.5x our FY28 EV/EBITDA, a

discount to peers which we believe is unjustified given INIO’s visibility into

near-term revenue growth and long-term services cash flow. We view GEV,

CAT, and VRT as primary comps. Our YE27 price target is $44, based on 26x

our FY28E EV/EBITDA, approximately aligned with CAT and a modest