Fervo Energy Co 10-Q

ITEM 1. FINANCIAL STATEMENTS Fervo Energy Company and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) (Dollars and shares in thousands) As of March 31, As of December 31, 2026 2025 ASSETS Current assets: Cash and cash equivalents $ 280,776 $ 461,836 Grant receivables 16,755 10,580 Prepaid expenses and other 10,338 9,714 Total current assets 307,869 482,130 Deposits 15,242 15,234 Construction-in-process 972,040 789,571 Operating leases right of use assets 91,112 58,713 Restricted cash 6,000 6,000 Other long-term assets 35,244 13,520 Total assets $ 1,427,507 $ 1,365,168 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 8,043 $ 10,789 Accrued capital expenditures 147,610 119,303 Operating lease liabilities 25,335 4,822 Other current liabilities 20,932 16,997 Total current liabilities 201,920 151,911 Long-term debt, net of issuance costs 186,636 172,837 Operating lease liabilities 86,349 72,639 Other long-term liabilities 24,673 11,407 Total liabilities 499,578 408,794 Commitments and Contingencies (Note 16) Redeemable convertible preferred stock Redeemable convertible preferred stock, par value $ 0.0001 per share; 283,546 and 283,546 authorized; 279,995 and 279,995 issued and outstanding as of March 31, 2026 and December 31, 2025, respectively 1,022,886 1,022,942 Redeemable noncontrolling interest Cape Phase I HoldCo - Redeemable noncontrolling interest 103,843 102,586 Cape Phase I Intermediate HoldCo - Redeemable noncontrolling interest 79,521 77,344 Stockholders’ deficit: Common stock, par value $ 0.0001 per share; 358,279 and 358,279 authorized; 9,873 and 9,457 issued as of March 31, 2026 and December 31, 2025, respectively (1) 1 1 Additional paid-in capital — — Treasury stock, at cost; 270 and 270 shares as of March 31, 2026 and December 31, 2025, respectively (1) ( 1,960 ) ( 1,960 ) Accumulated deficit ( 276,362 ) ( 244,539 ) Total stockholders’ deficit ( 278,321 ) ( 246,498 ) Total liabilities, redeemable convertible preferred stock, redeemable noncontrolling interests and stockholders’ deficit $ 1,427,507 $ 1,365,168 (1) Shares for periods presented have been retroactively adjusted to reflect the 0.7194 -for-1 reverse stock split effected on May 14, 2026 in connection with the Company’s initial public offering (“IPO”). See Note 2 – Significant Accounting Policies and Note 17 – Subsequent Events for details. The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited). F-1 Table of Contents Fervo Energy Company and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) The following table presents the assets and liabilities of consolidated variable interest entities (“VIEs”), which are included in the Condensed Consolidated Balance Sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. The liabilities in the table below include liabilities for which creditors do not have recourse to the general credit of the Company. Additionally, the assets and liabilities in the table below exclude intercompany balances that eliminate upon consolidation. (Dollars in thousands) As of March 31, As of December 31, 2026 2025 Assets of consolidated VIEs, included in total assets above: Cash and cash equivalents $ 11 $ 13,882 Prepaid expenses and other 872 545 Total current assets 883 14,427 Deposits 7,158 7,158 Construction-in-process 386,020 361,213 Other long-term assets 13,643 — Total assets of consolidated VIEs 407,704 382,798 Liabilities of consolidated VIEs, included in total liabilities above: Accrued capital expenditures 21,776 17,061 Other current liabilities 1,855 2,970 Total current liabilities 23,631 20,031 Long-term debt, net of issuance costs 156,728 142,837 Other long-term liabilities 1,560 1,468 Total liabilities of consolidated VIEs 181,919 164,336 Total net assets of consolidated VIEs $ 225,785 $ 218,462 The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited). F-2 Table of Contents Fervo Energy Company and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) (Dollars and shares in thousands except per share amounts) Three months ended March 31, 2026 2025 Revenues $ 61 $ — Costs and expenses: Operation and maintenance 482 252 Research and development income, net ( 72 ) ( 36 ) General and administrative expense 16,990 7,679 Operating lease expense 2,620 1,989 Depreciation and amortization 93 47 Operating loss ( 20,052 ) ( 9,931 ) Other income (expense): Interest income 2,815 2,028 Interest expense ( 2,717 ) ( 1,227 ) Other non-operating expense, net ( 11,876 ) ( 16 ) Loss before income taxes ( 31,830 ) ( 9,146 ) Net loss $ ( 31,830 ) $ ( 9,146 ) Net loss per share information: Net loss $ ( 31,830 ) $ ( 9,146 ) Less: Remeasurement of redeemable noncontrolling interest ( 3,434 ) — Net loss attributable to common shares, basic and diluted ( 35,264 ) ( 9,146 ) Weighted average shares, basic and diluted (1) 9,467 8,961 Net loss per share attributable to common stockholders, basic and diluted (1) $ ( 3.72 ) $ ( 1.02 ) (1) Shares for periods presented have been retroactively adjusted to reflect the 0.7194 -for-1 reverse stock split effected on May 14, 2026 in connection with the Company’s IPO. See Note 2 – Significant Accounting Policies and Note 17 – Subsequent Events for details. The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited). F-3 Table of Contents Fervo Energy Company and Subsidiaries Condensed Consolidated Statements of Redeemable Preferred Stock, Redeemable Noncontrolling Interest and Stockholders’ Deficit (Unaudited) (Dollars and shares in thousands) Redeemable convertible preferred stock Redeemable noncontrolling interest Common stock (1) Treasury stock (1) Additional paid-in capital Accumulated deficit Total stockholders’ deficit Shares Amount Shares Amount Shares Amount Shares Amount Balance at January 1, 2026 279,995 $ 1,022,942 12 $ 179,930 9,457 $ 1 270 $ ( 1,960 ) $ — $ ( 244,539 ) $ ( 246,498 ) Remeasurement of noncontrolling interests — — — 3,434 — — — — ( 3,441 ) 7 ( 3,434 ) Other — ( 56 ) — — — — — — — — — Stock-based compensation — — — — — — — — 2,615 — 2,615 Exercise of stock-based awards by employees and directors — — — — 416 — — — 826 — 826 Net loss — — — — — — — — — ( 31,830 ) ( 31,830 ) Balance at March 31, 2026 279,995 $ 1,022,886 12 $ 183,364 9,873 $ 1 270 $ ( 1,960 ) $ — $ ( 276,362 ) $ ( 278,321 ) (1) Shares for periods presented have been retroactively adjusted to reflect the 0.7194 -for-1 reverse stock split effected on May 14, 2026 in connection with the Company’s IPO. See Note 2 – Significant Accounting Policies and Note 17 – Subsequent Events for details. The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited). F-4 Table of Contents Fervo Energy Company and Subsidiaries Condensed Consolidated Statements of Redeemable Preferred Stock, Redeemable Noncontrolling Interest and Stockholders’ Deficit (Unaudited) (Dollars and shares in thousands) Redeemable convertible preferred stock Common stock (1) Treasury stock (1) Additional paid-in capital Accumulated deficit Total stockholders’ deficit Shares Amount Shares Amount Shares Amount Balance at January 1, 2025 223,458 $ 561,500 8,971 $ 1 $ — $ — $ 2,582 $ ( 179,778 ) $ ( 177,195 ) Stock-based compensation — — — — — — 489 — 489 Repurchase of shares — — — — 265 ( 1,945 ) — ( 1,945 ) Exercise of stock-based awards by employees and directors — — 105 — — 89 89 Net loss — — — — — — — ( 9,146 ) ( 9,146 ) Balance at March 31, 2025 223,458 $ 561,500 9,076 $ 1 265 $ ( 1,945 ) $ 3,160 $ ( 188,924 ) $ ( 187,708 ) (1) Shares for periods presented have been retroactively adjusted to reflect the 0.7194 -for-1 reverse stock split effected on May 14, 2026 in connection with the Company’s IPO. See Note 2 – Significant Accounting Policies and Note 17 – Subsequent Events for details. The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited). F-5 Table of Contents Fervo Energy Company and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands) Three months ended March 31, 2026 2025 Cash flows from operating activities: Net loss $ ( 31,830 ) $ ( 9,146 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 93 47 Amortization of debt issuance costs 463 141 Stock-based compensation 2,615 489 Non-cash expense related to long-term operating leases 5,993 607 Non-cash expense related to warrant valuation 13,146 — Non-cash income related to derivative valuation ( 1,270 ) — Changes in operating assets and liabilities: Grant receivable — 702 Prepaid expenses and other ( 624 ) 3,583 Deposits ( 8 ) 18,733 Accounts payable 1,232 ( 3,644 ) Net changes in other assets and liabilities 1,153 5,562 Net cash (used in) provided by operating activities ( 9,037 ) 17,074 Cash flows from investing activities: Capital expenditures ( 172,793 ) ( 105,443 ) Net cash used in investing activities ( 172,793 ) ( 105,443 ) Cash flows from financing activities: Proceeds from long-term debt 14,152 8,031 Proceeds from issuance of common stock 826 89 Payment of debt issuance costs ( 14,152 ) — Treasury stock purchased — ( 1,945 ) Other ( 56 ) — Net cash provided by financing activities 770 6,175 Net change in cash and cash equivalents and restricted cash ( 181,060 ) ( 82,194 ) Cash and cash equivalents and restricted cash at beginning of period 467,836 199,428 Cash and cash equivalents and restricted cash at end of period $ 286,776 $ 117,234 Supplemental disclosure of cash flow information: Accrued capital expenditures (at end of period) $ 153,443 $ 44,384 Adjustment of redeemable noncontrolling interest 3,434 — Cash paid for interest, net of amounts capitalized 2,953 925 The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited). F-6 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) NOTE 1 – NATURE OF BUSINESS Fervo Energy Company (the “Company” or “Fervo”) is a Delaware corporation formed on May 27, 2017, to commercialize technology to build, own, and operate geothermal assets. Fervo’s innovations include technologies such as advanced computational models, horizontal drilling, and distributed fiber optic sensing that were developed with various partners to increase the productivity and lifetime of geothermal wells. The Company’s geographical area of operation is in the western region of the United States. The U.S. federal government encourages production of electricity from thermal energy derived from the Earth’s natural heat (“geothermal resources”). The Company requested and received grants for research and development and project development from the Department of Energy (“DOE”). As of March 31, 2026, the Company has not yet commenced large-scale commercial operations. The Company’s activities to date have been primarily focused on technological development, capital raising, and the establishment of geothermal production capabilities. On May 14, 2026, the Company completed an IPO of Class A common stock of Fervo Energy Company, par value of $ 0.0001 per share (“Class A common stock”), at a price of $ 27.00 per share. The Company’s common stock trades on the Nasdaq under the symbol “FRVO”. See Note 17 – Subsequent Events for additional information on other transactions completed in connection with the IPO. NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These condensed consolidated financial statements include the accounts of the Company and of all majority-owned subsidiaries in which the Company exercises control over operating and financial policies and are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) for interim financial information. Accordingly, they do not include all information and notes required by U.S. GAAP for annual financial statements. The accompanying condensed consolidated financial statements reflect all adjustments, including normal recurring adjustments, necessary for a fair presentation of the Company’s Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025, and the Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Redeemable Preferred Stock, Redeemable Noncontrolling Interest and Stockholders’ Deficit, and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025. The financial data and other information disclosed in the notes to the condensed consolidated financial statements related to these periods are unaudited. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included elsewhere in the Company’s final prospectus filed with the Securities and Exchange Commission (the “SEC”) on May 14, 2026, pursuant to Rule 424(b)(4) (the “IPO Prospectus”) as of and for the years ended December 31, 2025 and 2024. The Condensed Consolidated Balance Sheet data as of December 31, 2025 was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by U.S. GAAP for annual financial statements. Intercompany accounts and transactions have been eliminated in consolidation. Apart from the following updates resulting from transactions that occurred during the three months ended March 31, 2026 and the issuance of one recent accounting pronouncement, there have been no further material changes to the Company’s significant accounting policies or recent accounting pronouncements during the interim period from those described in Note 2 – Significant Accounting Policies to the audited consolidated financial statements included in the Company’s IPO Prospectus as of and for the years ended December 31, 2025 and 2024. F-7 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) Reverse Stock Split On May 14, 2026, in connection with the Company’s IPO, the Company effected a 0.7194 -for-1 reverse stock split of its common stock (the “Reverse Stock Split”). Shares and earnings per share for periods presented have been retroactively adjusted to reflect the Reverse Stock Split in the condensed consolidated financial statements for the three months ended March 31, 2026. See Note 17 – Subsequent Events for additional information on other transactions completed in connection with the IPO. Stock-based Compensation Stock-based compensation expense related to stock-based awards is recognized based on the fair value of the awards granted. For stock option awards without a market condition, the fair value of each stock option award is estimated on the grant date utilizing a standard Black-Scholes option-pricing model (i.e., a standard European call option model). For stock option awards with market conditions, the fair value of each stock option award is estimated on the grant date utilizing a more complex Black-Scholes option-pricing model, which captures the additional market condition threshold. The stock option awards are classified as equity. For stock option awards that follow a graded vesting schedule with a service-only vesting condition, the related stock-based compensation expense is recognized over the requisite service period of the awards. For stock option awards which follow a graded vesting schedule that have a performance-based vesting condition, such awards are recognized on a tranche-by-tranche basis, resulting in each vesting tranche being treated as a separate award. On a tranche-by-tranche basis, stock-based compensation cost for each tranche is recognized over the respective vesting period when it is probable that the performance condition will be achieved. Each reporting period, the Company reassesses the probability of achieving the respective performance condition. If the condition is not expected to be met, no compensation cost is recognized and any previously recognized amount recorded is reversed. If the award contains market-based vesting conditions, the stock-based compensation cost is based on the grant date fair value and expected achievement of market condition and is not subsequently reversed if it is later determined that the condition is not likely to be met, as long as the related service and performance conditions are achieved. Forfeitures are accounted for as they occur. Prior to the three months ended March 31, 2026, the Company only had stock-based awards with a service-only vesting condition. The Black-Scholes option-pricing model requires the input of significant assumptions. Such assumptions may be highly subjective and include the fair value of the underlying common stock, the expected term of the stock option, the expected volatility of the price of the Company’s common stock, risk-free interest rates, and the expected dividend yield of common stock. The assumptions used to determine the fair value of the option awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. Recent Accounting Pronouncement Accounting Standards to be Implemented In May 2026, the FASB issued Accounting Standards Update (“ASU”) 2026-02, “Environmental Credits and Environmental Credit Obligations (Topic 818)”, which establishes recognition, measurement, presentation, and disclosure requirements for environmental credits and related environmental credit obligations. The guidance is effective for public business entities for annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. The requirements will be applied retrospectively. Early adoption is permitted. The Company is evaluating the impact of this guidance on the condensed consolidated financial statements and related disclosures. F-8 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) NOTE 3 – DEBT AND OFF-BALANCE SHEET ARRANGEMENTS Long-term debt, net of issuance costs, consisted of the following: (Dollars in thousands) As of March 31, As of December 31, 2026 2025 Long-term debt XRC Facility $ 145,600 $ 145,600 Mercuria Credit Facility 30,000 30,000 Project Granite Facility 14,152 — Total principal due for long-term debt 189,752 175,600 Less: Unamortized debt issuance cost ( 3,116 ) ( 2,763 ) Total long-term debt, net of issuance costs $ 186,636 $ 172,837 XRC Facility In 2024 and 2025, Cape Generating Station 3 LLC and Cape Generating Station 5 LLC entered into loan agreements with XRL ALC, LLC (“XRC Facility”), issuing three promissory notes across three tranches. As of March 31, 2026 and December 31, 2025, outstanding borrowings totaled $ 145.6 million and $ 145.6 million, respectively. These amounts are offset by the unamortized debt issuance costs of $ 2.6 million and $ 2.8 million, respectively. The estimated fair value of the note was $ 143.7 million and $ 140.7 million as of March 31, 2026 and December 31, 2025, respectively, based on a discounted cash flow model based on current market interest rates for similar instruments. The fair value is classified as Level 2 in the fair value hierarchy. The Company was in compliance with all applicable covenants as of March 31, 2026 and December 31, 2025. In April 2026, the Company repaid in full the outstanding borrowings under the XRC Facility. The repayment of the XRC Facility resulted in a loss on extinguishment of debt, including prepayment premiums and the write-off of unamortized debt issuance costs. See Note 17 – Subsequent Events for additional information. Mercuria Credit Facility and Letter of Credit Facility In 2024 and 2025, Fervo HoldCo LLC, a wholly owned subsidiary of the Company, entered into and amended a credit agreement with Mercuria Energy Trading SA (“Mercuria”) to provide liquidity and corporate-level access to capital (“Mercuria Credit Facility”). The Company also entered into a letter of credit facility agreement with Mercuria in 2024 to provide credit support for its contractual and operational obligations (“Mercuria Letter of Credit Facility”). As of March 31, 2026 and December 31, 2025, the Company had $ 30.0 million outstanding under the Mercuria Credit Facility. In connection with the Mercuria Credit Facility, the Company incurred debt issuance costs of $ 3.5 million, which are recorded in other long-term assets on the Condensed Consolidated Balance Sheets and are amortized over the term of the agreement. The estimated fair value of the Mercuria Credit Facility was $ 30.0 million as of March 31, 2026 and December 31, 2025 based on a discounted cash flow model based on current market interest rates for similar instruments. The fair value is classified as Level 2 in the fair value hierarchy. The Company also had $ 35.5 million outstanding under the Mercuria Letter of Credit Facility as of March 31, 2026 and December 31, 2025, which supports project-level contractual and operational obligations and constitutes an off-balance sheet arrangement. The Company was in compliance with all covenants under the Mercuria Credit Facility and Mercuria Letter of Credit Facility as of March 31, 2026 and December 31, 2025. F-9 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) Project Granite Facility In March 2026, Cape Phase I Borrower LLC and Phase I WellCo LLC (the “Borrowers”), subsidiaries of the Company, entered into a senior secured credit agreement (the “Granite Credit Agreement”) with a syndicate of lenders led by MUFG Bank, Ltd., as administrative agent, and HSBC Bank USA, National Association, as collateral agent, to finance the construction of the Company’s Cape Station (“Cape Station”) Phase I geothermal facility. In connection with the financing, the Borrowers executed customary project finance agreements, including related closing deliverables. The Granite Credit Agreement provides for aggregate commitments of approximately $ 421.4 million, consisting of (i) a construction loan facility, (ii) a tax credit transfer bridge loan facility, (iii) multiple letter of credit facilities, and (iv) a term loan facility into which construction loans are expected to convert upon satisfaction of specified conversion conditions (collectively, the “Project Granite Facility”). Borrowings under the Project Granite Facility are available during the construction period, subject to satisfaction of customary conditions precedent. Borrowings under the construction loan facility are expected to convert into term loans upon satisfaction of specified conversion conditions, including achievement of substantial completion and delivery of certain project‑level documentation. Borrowings under the construction loan facility bear interest at either (i) the secured overnight financing rate (“SOFR”) or (ii) a base rate, at the Borrowers’ election, in each case plus an applicable margin. The construction loan borrowing outstanding as of March 31, 2026 was a SOFR‑based loan bearing interest at SOFR plus a margin of 3.0 %. All SOFR borrowings are subject to a floor of 0.0 %. Interest is payable quarterly. Commitment fees accrue on the unutilized portions of the construction loan facility, the tax credit transfer bridge loan facility, and certain letter of credit facilities at a rate equal to 30.0 % of the applicable margin and are payable quarterly in arrears. Following conversion, the term loans will amortize on a quarterly basis beginning in 2027, with the remaining outstanding principal due at maturity. The stated maturity date of the term loans is March 31, 2031. Borrowings under the term loan facility bear interest at either SOFR or the base rate, at the Borrowers’ election, plus an applicable margin, with the SOFR margin equal to 3.0 % and subject to annual 0.1 % increases beginning in March 2029. Base rate borrowings are subject to a margin that is 1.0 % lower than the SOFR margin and are subject to the same annual increases. The Granite Credit Agreement includes customary optional and mandatory prepayment provisions. Mandatory prepayments may be required, among other circumstances, upon receipt of certain extraordinary cash proceeds, including proceeds from the transfer of investment tax credits, failure to monetize production tax credits at or above specified thresholds, excess borrowings relative to term loan sizing criteria upon conversion, or upon the occurrence of an event of default, in which case the lenders may also cease making further loan advances and/or declare all outstanding obligations immediately due and payable. As of March 31, 2026, the Company was in compliance with all covenants. Under the terms of the Granite Credit Agreement, the obligations are secured on a first‑priority basis by substantially all assets of the Borrowers, including project‑level assets associated with the Cape Station Phase I geothermal facility, subject to customary permitted liens. On March 6, 2026, the Borrowers issued a construction loan with a stated principal amount of approximately $ 14.2 million, which was used to finance third-party debt issuance costs, agency fees and upfront lender fees. The financing costs associated with undrawn term loan commitments were recorded as deferred financing costs within other long-term assets on the Condensed Consolidated Balance Sheets. The net carrying amount of the construction loan at issuance was approximately $ 13.7 million. The difference of approximately $ 0.5 million between the stated principal amount and the net carrying amount reflects debt issuance costs allocated to the drawn construction loan, which are presented as a direct reduction of the carrying value of long-term debt on the Condensed Consolidated Balance Sheets and are included in unamortized debt issuance costs in the table above. The estimated fair value of the Project Granite Facility was $ 14.2 million as of F-10 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) March 31, 2026, based on a discounted cash flow model based on current market interest rates for similar instruments. The fair value is classified as Level 2 in the fair value hierarchy. See Note 17 – Subsequent Events for additional information regarding borrowings under the Granite Credit Agreement and related transaction occurring after March 31, 2026. Surety Bond Arrangements As of March 31, 2026 and December 31, 2025, the Company had outstanding surety bonds totaling $ 59.8 million and $ 57.5 million, respectively, which constitute off-balance sheet arrangements. NOTE 4 – ASSET RETIREMENT OBLIGATIONS The following table summarizes the changes in the Company’s Asset Retirement Obligations (“ARO”), which are included in Other long-term liabilities on the Condensed Consolidated Balance Sheets, for the periods indicated: (Dollars in thousands) As of March 31, As of December 31, 2026 2025 Beginning balance $ 1,193 $ 299 Liabilities incurred during the period 89 843 Accretion expense 32 51 Ending balance $ 1,314 $ 1,193 NOTE 5 – OTHER CURRENT LIABILITIES The schedule below details the Company’s other current liabilities presented on the Condensed Consolidated Balance Sheets for the periods indicated: (Dollars in thousands) As of March 31, As of December 31, 2026 2025 Accrued expenses $ 10,880 $ 9,035 Bonus accrual 8,500 4,830 Deferred grant income 769 888 Derivative (1) 410 1,680 Payroll liabilities 373 564 Total other current liabilities $ 20,932 $ 16,997 _________________ (1) See Note 10 – Noncontrolling Interests for further discussion on the derivative. NOTE 6 – LEASES The Company has domestic leases on federal, state, and private land in California, Colorado, Idaho, Nevada, New Mexico, Utah, and Washington, along with leases for drilling rigs and related geothermal development equipment, office space, and field vehicles. Bureau of Land Management (“BLM”) geothermal leases provide the geothermal lessee the right and privilege to drill for, extract, produce, remove, utilize, sell, and dispose of geothermal resources on certain lands, together with the right to build and maintain necessary improvements thereon. The actual ownership of the geothermal resources and other minerals beneath the land is retained in the federal mineral estate. The geothermal lease does not grant the geothermal lessee the exclusive right to develop the lands, although the geothermal lessee does hold the exclusive right to develop geothermal resources within the lands. Since BLM leases do not grant to the geothermal lessee the exclusive right to use the surface of the land or extract minerals, BLM may grant rights to others for activities that do not unreasonably interfere with the geothermal lessee’s uses of the same land. F-11 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) The Company recognized $ 2.6 million and $ 2.0 million, respectively, in total lease expense as reflected in Operating lease expense in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025. Total cash payments related to leases were $ 6.6 million and $ 0.6 million, respectively, for the three months ended March 31, 2026 and 2025. Non-cash lease activity consisted of right-of-use (“ROU”) assets obtained in exchange for lease liabilities of $ 38.0 million for the three months ended March 31, 2026, compared to $ 0.1 million for the three months ended March 31, 2025. The following tables present information regarding operating leases recorded on the Condensed Consolidated Balance Sheets where the Company is the lessee for the periods indicated. (Dollars in thousands) As of March 31, 2026 As of December 31, 2025 Carrying values by asset category ROU Asset: Geothermal land leases $ 48,071 $ 45,609 Equipment 36,612 6,188 Office space 6,180 6,635 Vehicles 249 281 Total $ 91,112 $ 58,713 Lease Liability (1) : Geothermal land leases $ 67,053 $ 62,744 Equipment 36,140 6,300 Office space 8,249 8,144 Vehicles 242 273 Total $ 111,684 $ 77,461 By asset category As of March 31, 2026 As of December 31, 2025 Weighted average remaining term Geothermal land leases 14 years 14 years Equipment 4 years 9 years Office space 3 years 3 years Vehicles 2 years 2 years Weighted average discount rate (2) : Geothermal land leases 11.4 % 11.4 % Equipment 8.3 % 12.0 % Office space 8.1 % 8.7 % Vehicles 9.6 % 9.6 % _________________ (1) The short-term and long-term lease liability totals $ 25.3 million and $ 86.3 million as of March 31, 2026, respectively, and $ 4.8 million and $ 72.6 million as of December 31, 2025. (2) The discount rate for each category of assets represents the Company’s incremental borrowing rate (“IBR”) for leases. The IBR is a significant estimate related to the Company’s operating lease liabilities. It was calculated by determining a credit rating based on credit metrics of comparable publicly traded companies, developing a yield curve for publicly traded debt matching the credit rating, and then developing a weighted average IBR based on those yield curves. F-12 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) The following is a schedule showing the Company’s future minimum lease payments associated with the operating leases together with the present value of the net minimum lease payments for the periods indicated. (Dollars in thousands) As of March 31, 2026 2026 $ 23,897 2027 17,827 2028 7,132 2029 13,419 2030 12,921 Thereafter 139,632 Total minimum lease payments $ 214,828 Less: Amount representing interest 103,144 Total lease obligation $ 111,684 Less: Current lease obligation 25,335 Long-term lease obligation $ 86,349 NOTE 7 – STOCK-BASED COMPENSATION The number of shares authorized and to be issued, as they are disclosed below, have been restated to reflect the Reverse Stock Split effectuated on May 14, 2026. During the three months ended March 31, 2026, the Company granted stock options to employees and directors under the stock incentive plan (the “2019 Stock Incentive Plan” or the “Plan”), which was amended on March 6, 2026 to authorize an additional 34,151,952 shares of common stock to be available under the plan. On January 26, 2026, the Company granted stock options with a service condition, covering 4,184,750 shares with a total grant-date fair value of $ 16.9 million. On March 6, 2026, the Company granted stock options covering 9,959,797 shares. Of the total March 6, 2026 grant, stock options covering 233,805 shares have a service condition and a total grant-date fair value of $ 1.9 million and stock options covering 2,431,498 shares include both a service condition and performance-based vesting condition tied to an operational milestone and have a total grant-date fair value of $ 19.6 million. As of March 31, 2026, the performance condition related to this award was probable of being achieved, and therefore, related stock-based compensation expense was recognized during the three months ended March 31, 2026. The remaining stock options covering 7,294,494 shares, comprised of three tranches split evenly, vest upon the occurrence of a) the completion of an IPO within a specific timeframe, b) a performance-based vesting condition tied to operational milestones, c) the achievement of either a market-based condition or another performance-based condition tied to operations and d) a service condition. The total grant-date fair value was $ 11.3 million, $ 16.7 million, and $ 13.6 million for each of the respective tranches. The stock options contain a performance condition which was not considered probable of being achieved as of March 31, 2026, as all three tranches are tied to the IPO performance condition and an IPO is not considered probable until consummated. Accordingly, no stock-based compensation expense has been recognized related to these awards during the three months ended March 31, 2026. The Company will continue to reassess the probability of achieving these conditions at each reporting period and will recognize stock-based compensation expense when such conditions are deemed probable. The grant-date fair value of the stock options with a market condition was estimated using the following Black-Scholes option-pricing model assumptions: F-13 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) Fair value of common stock $ 8.49 Expected volatility 75.0 % Expected term (in years) 5 - 10 Risk-free interest rate 3.7 % - 4.1 % Expected dividend yield 0.0 % Stock-based Compensation Expense During the three months ended March 31, 2026 and 2025, the Company recorded $ 2.6 million and $ 0.5 million, respectively, as stock-based compensation in General and administrative expense in the Condensed Consolidated Statements of Operations. NOTE 8 – WARRANTS As of March 31, 2026, the Company had 3,550,329 warrants outstanding, which were exercisable into 3,550,329 shares of Series E-2 redeemable convertible preferred stock. The warrants were issued in October 2025 in connection with the issuance of Intermediate Class A Units (see Note 10 – Noncontrolling Interests for additional information). The warrants are classified as liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and are measured at fair value, with changes in fair value recognized in earnings each reporting period. No warrants have been exercised as of March 31, 2026. After giving effect to the Reverse Stock Split effectuated on May 14, 2026, the 3,550,329 shares of Series E-2 redeemable convertible preferred stock are convertible into 2,554,107 shares of Class A common stock. See Note 17 – Subsequent Events for additional information regarding the exercise of warrants occurring after March 31, 2026. During the three months ended March 31, 2026, the Company recognized a $ 13.1 million loss related to the remeasurement of the warrants, which is reflected within Other non-operating expense in the Condensed Consolidated Statements of Operations. As of March 31, 2026 and December 31, 2025, the fair value of the warrants was approximately $ 23.4 million and $ 10.2 million, respectively, and is recorded within Other long-term liabilities in the Condensed Consolidated Balance Sheets. Fair Value Measurement and Settlement Amounts As of March 31, 2026, the warrants were measured at fair value using a Black-Scholes option pricing model, weighted between a going concern scenario and IPO scenario. The Company estimated the fair value of the warrants using the following assumptions: As of March 31, 2026 Going concern scenario IPO scenario Series A-1 Redeemable Convertible Preferred Stock price $ 8.73 $ — Series E-1 Redeemable Convertible Preferred Stock price 8.17 — Estimated IPO price — 14.00 Expected volatility 75.0 % 75.0 % Expected term (in years) 3.00 0.12 Risk-free interest rate 3.8 % 3.7 % Expected dividend yield 0.0 % 0.0 % Due to the use of significant unobservable inputs of stock price, volatility and expected term in the valuation, the warrants are classified within Level 3 of the fair value hierarchy. Accordingly, significant judgment is required in selecting these assumptions. Actual assumptions may differ from the Company’s current estimates and such differences could materially impact the fair value of the warrants. F-14 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) Changes in the fair value of the Company’s equity directly affect the fair value of the warrants. NOTE 9 – VARIABLE INTEREST ENTITY The Company evaluated its interests in certain legal entities and determined that Cape Phase I HoldCo, LLC (“Cape PI HoldCo”) and Cape PI Intermediate HoldCo, LLC (“Cape PI Intermediate HoldCo”) are VIEs under ASC 810, Consolidation (“ASC 810”) as of March 31, 2026. The Company concluded that it is the primary beneficiary of these VIEs because it has (i) the power to direct the activities that most significantly impact these VIEs’ economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to these VIEs. The Company holds its interest in Cape PI Intermediate HoldCo through other consolidated subsidiaries. Cape PI HoldCo is consolidated into Cape PI Intermediate HoldCo as the direct owner of its equity interests. Accordingly, the Company has consolidated Cape PI HoldCo and Cape PI Intermediate HoldCo in the accompanying condensed consolidated financial statements and recognized noncontrolling interests related to these VIEs. Refer to Note 10 – Noncontrolling Interests. The assets of Cape PI HoldCo and Cape PI Intermediate HoldCo may only be used to settle the obligations of the respective VIEs, and creditors of these entities do not have recourse to the general credit of the Company. The Company’s maximum exposure to loss as a result of its involvement with these VIEs is limited to its investment in the entities and any contractual arrangements that require the Company to provide financial support. As of March 31, 2026, such ongoing financial support includes capital commitments and construction-related funding obligations consistent with those disclosed in the Company’s audited consolidated financial statements for the years ended December 31, 2025 and 2024. Management reassesses its involvement with Cape PI HoldCo and Cape PI Intermediate HoldCo on an ongoing basis to determine whether the Company continues to be the primary beneficiary, including upon the occurrence of a reconsideration event. There have been no material changes in the Company’s VIE conclusions, consolidation determinations or maximum exposure to loss during the three months ended March 31, 2026 from those disclosed as of and for the year ended December 31, 2025. NOTE 10 – NONCONTROLLING INTERESTS As discussed in Note 9 – Variable Interest Entity, the Company has consolidated Cape PI HoldCo and Cape PI Intermediate HoldCo, which were determined to be VIEs for which the Company is the primary beneficiary. Both entities issued Class A Units to third-party investors that represent equity interests in the respective consolidated subsidiaries. Because the Company does not own 100.0% of the outstanding equity in these entities, the Class A Units are accounted for as noncontrolling interests in the consolidated financial statements. The Class A Units issued by Cape PI HoldCo (“CPI HoldCo Class A Units”) and Intermediate Class A Units issued by Cape PI Intermediate HoldCo (“Intermediate Class A Units”) contain redemption features that are outside the control of the respective issuers but are contingent upon the availability of distributable cash. Accordingly, these Class A Units are classified as redeemable noncontrolling interest and are presented as mezzanine equity on the Condensed Consolidated Balance Sheets. CPI HoldCo Class A Units are initially recorded at fair value at the time of issuance, less the direct and incremental issuance costs, and are subsequently measured at the current redemption value to the extent such current redemption value exceeds the attribution of income (loss) to the CPI HoldCo Class A Units. Intermediate Class A Units are initially recorded at proceeds received less the fair value of the warrants issued along with the Intermediate Class A Units and allocated issuance cost. Intermediate Class A Units are subsequently remeasured at their maximum redemption value, to the extent such amounts exceed the allocation of income or loss attributable to the noncontrolling interest. Additionally, two derivatives were identified as being embedded in the Intermediate Class A Units. As of March 31, 2026, conditions relevant to the embedded derivatives were evaluated and one feature was determined to have a fair value of $ 0.4 million. This amount is included in Other current liabilities (see Note 5 – Other Current Liabilities). F-15 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) There were no material changes to the terms, classification or measurement of the Company’s redeemable noncontrolling interests during the three months ended March 31, 2026. The following table is a summary of the changes in redeemable noncontrolling interest for CPI HoldCo Class A Units for the three months ended March 31, 2026: (Dollars in thousands) Balance at December 31, 2025 $ 102,586 Remeasurement of redeemable noncontrolling interest 1,257 Balance at March 31, 2026 $ 103,843 The following table is a summary of the changes in redeemable noncontrolling interest for Intermediate Class A Units for the three months ended March 31, 2026: (Dollars in thousands) Balance at December 31, 2025 $ 77,344 Remeasurement of redeemable noncontrolling interest 2,177 Balance at March 31, 2026 $ 79,521 NOTE 11 – SEGMENT INFORMATION The Company operates in a single operating and reportable segment, which is consistent with the reporting structure of the Company’s internal organization. The Company’s Chief Executive Officer, who is the Chief Operating Decision Maker (“CODM”), uses the Company’s condensed consolidated financial information to allocate resources and assess performance. The primary measure of segment profit or loss used by the CODM is net loss, as presented in the Condensed Consolidated Statements of Operations. All segment financial information is presented on a consolidated basis in the accompanying condensed consolidated financial statements. There were no changes in the Company’s operating segment structure or the measures used by the CODM to assess performance during the three months ended March 31, 2026. NOTE 12 – EARNINGS PER SHARE The number of shares have been restated to reflect the Reverse Stock Split effectuated on May 14, 2026. All historical share and per share amounts reflected in the condensed consolidated financial statements for the three months ended March 31, 2026 have been retrospectively restated to reflect the change in capital structure for the periods prior to the completion of the Reverse Stock Split, as applicable. See Note 2 – Significant Accounting Policies for details. Basic and diluted net loss per share is calculated as follows: (Dollars and shares in thousands, except per share amounts) Three months ended March 31, 2026 2025 Numerator: Net loss attributable to common shares $ ( 35,264 ) $ ( 9,146 ) Denominator: Weighted-average common shares 9,467 8,961 Net loss per share – basic and diluted $ ( 3.72 ) $ ( 1.02 ) F-16 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) The following potentially dilutive instruments, based on amounts outstanding and restated to reflect the Reverse Stock Split, that could result in dilution, were excluded from the diluted earnings per share computation because including them would have had an anti-dilutive effect: (Shares in thousands) Three months ended March 31, 2026 2025 Preferred shares 201,429 160,756 Option-based awards 32,384 12,395 Warrants 2,554 — Total 236,367 173,151 NOTE 13 – GRANT INCOME Grant income of $ 0.1 million and $ 0.2 million attributable to research and development is netted against eligible expenses in research and development, net in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025, respectively. Grant income totaling $ 20.3 million and $ 14.1 million attributable to project development is netted against construction-in-process on the Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025, respectively. In 2024, the Company was awarded a reimbursement-type grant from the DOE in the amount of $ 22.1 million. The effective date of the grant was July 1, 2024 and the contract expires July 1, 2026. Funding under the grant is recognized as qualifying expenditures are incurred in accordance with the terms of the grant agreement. In 2025 and during the three months ended March 31, 2026, the Company has been awarded several smaller grants, totaling $ 0.7 million, which are accounted for consistent with the Company’s grant income policy. NOTE 14 – INCOME TAXES The Company’s effective tax rate was 0.0 % for both the three months ended March 31, 2026 and 2025. The effective rate differs from the federal statutory rate of 21.0% primarily due to the valuation allowance. State and local income tax impacts primarily relate to minimal filing obligations in Utah, California, and the District of Columbia, which collectively comprise the majority of the Company’s state and local income tax exposure. Such obligations did not result in a material current state or local tax expense or benefit and had no material impact on the Company’s effective tax rate for the three months ended March 31, 2026 and 2025. NOTE 15 – RELATED PARTY TRANSACTIONS The Company evaluates its relationships and transactions with related parties in accordance with ASC 850, Related Party Disclosures . Related parties include affiliates, principal owners, management, members of the Board of Directors, and their immediate family members, as well as entities under common control or significant influence. For both the three months ended March 31, 2026 and 2025, the Company incurred $ 0.1 million of costs related to technical services provided by a supplier that is a major investor in the Company and an observer to the Company’s Board of Directors. These costs were recorded in general and administrative expense in the Condensed Consolidated Statements of Operations. NOTE 16 – COMMITMENTS AND CONTINGENCIES Contractual Commitments As of March 31, 2026, the Company had outstanding contractual commitments of approximately $ 496.3 million, primarily related to its Cape Station Phase I and Cape Station Phase II facilities. This amount represents the Company’s contractual obligations under binding supplier contracts, including fixed and variable components. F-17 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) Litigation and Other Legal Proceedings The Company records liabilities related to litigation and other legal proceedings when they are either known or considered probable and can be reasonably estimated. Legal proceedings are inherently unpredictable and subject to significant uncertainties, and significant judgment is required to determine both probability and the estimated amount. As a result of these uncertainties, any liabilities recorded are based on the best information available at the time. As any new information becomes available, the Company reassesses the potential liability related to pending litigation. Management is not aware of any legal, environmental or other commitments or contingencies that would have a material effect on the Company’s financial condition, results of operations or cash flows for the periods presented. Environmental permits U.S. environmental permitting regimes with respect to geothermal projects center upon several general areas of focus. The first involves land use approvals. These may take the form of Special Use Permits or Conditional Use Permits from local planning authorities or a series of development and utilization plan approvals and right-of-way approvals where the geothermal facility is entirely or partly on BLM lands. Certain federal approvals require a review of environmental impacts in conformance with the federal National Environmental Policy Act. These federal and local land use approvals typically impose conditions and restrictions on the construction, scope and operation of geothermal projects. The second category of permitting focuses on the installation and use of the geothermal wells themselves. Geothermal projects typically have three types of wells: (i) exploration wells designed to define and verify the geothermal resource, (ii) production wells to extract the hot geothermal liquids (also known as brine), and (iii) injection wells to inject the brine back into the subsurface resource. For geothermal wells, including exploration, production and injection wells, the Company obtains applicable drilling, construction, operating and/or injection permits from the relevant federal, state or local agencies in the jurisdictions in which the wells are located. A third category of permits involves the regulation of potential air emissions associated with the construction and operation of wells. Generally, each well requires a preconstruction air permit and storm water discharge permit before earthwork can commence. Certain jurisdictions may also require ministerial or administrative permits such as building permits, hazardous materials storage and management permits, and pressure vessel operating permits. In some cases, projects may also require permits, issued by the applicable federal agencies or authorized state agencies, regarding threatened or endangered species, permits to impact wetlands or other waters and notices of construction of structures which may have an impact on airspace. Environmental laws and regulations may change in the future that may modify the time to receive such permits and associated costs of compliance. All of the material environmental permits and approvals currently required have been obtained. The Company sometimes experiences regulatory delays in obtaining various permits and approvals required for projects in development and construction. These delays may lead to increases in the time and cost to complete these projects. The Company’s operations are designed and conducted to comply with applicable environmental permits and approval requirements. Environmental laws and regulations The Company’s facilities and operations are subject to several federal, state, local and foreign environmental laws and regulations relating to development, construction and operation. In the U.S., these may include the Clean Air Act, the Clean Water Act, the Emergency Planning and Community Right-to-Know Act, the Endangered Species Act, the National Environmental Policy Act, the Resource Conservation and Recovery Act, and related state laws and regulations. F-18 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) NOTE 17 – SUBSEQUENT EVENTS Management has evaluated subsequent events that occurred after the date of the Condensed Consolidated Balance Sheets through June 23, 2026, the date the financial statements were issued. • In April 2026, the Borrowers completed a second draw under the Granite Credit Agreement of approximately $ 172.3 million. On May 22, 2026, the Company made an additional draw of $ 25.9 million under the Project Granite Facility. As a result, total borrowings under the Project Granite Facility subsequent to March 31, 2026 were approximately $ 198.2 million. In connection with the April 2026 draw, the Company repaid in full the outstanding borrowings under the XRC Facility, using approximately $ 145.6 million of the proceeds. The remaining proceeds were used to fund transaction costs and for project-related purposes, including construction expenditures and required reserves. The repayment of the XRC Facility resulted in a loss on extinguishment of debt, including prepayment premiums and the write-off of unamortized debt issuance costs. The prepayment premium was approximately $ 6.5 million. In connection with the Project Granite financing, the Company entered into agreements to monetize certain production and/or investment tax credits associated with the project, which are expected to generate proceeds to support the overall project financing structure, including repayment of the tax credit transfer bridge loan facility. As part of the current and anticipated borrowings under the construction loan, the Company entered into a series of interest rate swaps to mitigate exposure to adverse movements in interest rates. The interest rate swaps have an aggregate initial notional value of $ 262.4 million on the forward start date of January 1, 2027 and amortize over the term of the swaps to $ 0.8 million at maturity on December 31, 2041. Under the swaps, the Company pays a fixed interest rate of 3.9 % and receives a floating interest rate based on SOFR, as compounded daily over the interest period in accordance with overnight indexed swap conventions, with net settlements made periodically. The Company has not designated these interest rate swaps as hedging instruments for accounting purposes. Accordingly, the swaps will be recorded at fair value, with changes in fair value recognized in earnings. See Note 3 – Debt and Off-Balance Sheet Arrangements for additional information on the debt facilities. • On April 28, 2026, Centaurus Capital LP delivered a notice to exercise the warrant in full. In accordance with its terms, the warrant was exercised into 3,550,329 shares of Series E-2 redeemable convertible preferred stock, which are convertible into 2,554,107 shares of Class A common stock after taking into consideration the Reverse Stock Split. Centaurus Capital LP paid an aggregate exercise price of $ 18.7 million in cash and surrendered the original warrant upon full exercise. As a result of this transaction, the warrant is no longer outstanding, and no further shares are issuable thereunder. • On May 14, 2026, the Company completed its IPO of Class A common stock of Fervo Energy Company, par value of $ 0.0001 per share, at a price of $ 27.00 per share. The Company’s common stock trades on the Nasdaq under the symbol “FRVO”. In connection with the IPO, the Company sold an aggregate of 80,500,000 shares of Class A common stock, which includes 10,500,000 shares of the Class A common stock issued upon the underwriters’ full exercise of their option to purchase additional shares from the Company. The gross proceeds to the Company from the IPO were approximately $ 2.2 billion, before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. In connection with the IPO, the following transactions were completed: • Effectuation of a 0.7194 -for-1 Reverse Stock Split of the Company’s common stock. Shares for periods presented have been retroactively adjusted to reflect the Reverse Stock Split for all periods prior to May 14, 2026, in the condensed consolidated financial statements for the three months ended March 31, 2026. See Note 2 – Significant Accounting Policies for additional information. • Automatic conversion of all outstanding redeemable convertible preferred stock into Class A common stock of Fervo with a par value of $ 0.0001 per share, taking into consideration the Reverse Stock Split F-19 Table of Contents Fervo Energy Company and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) • Reclassification of the Company’s capital structure, including the establishment of Class A and Class B common stock. • Founder share exchange, resulting in the issuance of Class B common stock of Fervo with a par value of $ 0.0001 per share (“Class B common stock”) to certain existing holders. • Filing and effectiveness of the Company’s amended and restated certificate of incorporation and bylaws. Other than the matters described above, the Company identified no subsequent events that require adjustment to or disclosure in the condensed consolidated financial statements. 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