Fervo Energy Co 10-Q

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This quarterly report on Form 10-Q (this “Report”) includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this quarterly report that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and the growth of our business and operations, are forward-looking statements. When used in this Report, the words “may”, “will”, “could”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, “contemplate”, or “target” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. The forward-looking statements in this quarterly report are primarily located in the material set forth under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Risk Factors”, and “Notes to condensed consolidated financial statements”, but are found in other locations as well. These forward-looking statements generally relate to our plans, objectives and expectations for future operations and are based upon management’s current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. You should read this Report completely and with the understanding that actual future results and developments may be materially different from what we expect attributable to a number of risks and uncertainties, many of which are beyond our control. Factors that could cause the outcomes to differ materially include (but are not limited to) the following: risks related to expanding our geothermal operations and accessing new markets; challenges in maintaining compliance with extensive environmental regulations and permitting requirements, including evolving climate change initiatives that may impact operational costs; uncertainties in forecasting future operational results and growth due to economic conditions and market demand; inherent risks in the geothermal industry, including potential operational disruptions and associated liabilities; the influence of consumer preferences, government policies, and competition on the demand for geothermal energy; risks associated with fluctuations in energy prices and material costs; dependence on a complex supply chain and successful maintenance of our geothermal infrastructure; financial performance influenced by fluctuations in interest rates, capital availability, and other market conditions; capacity actually constructed or for which we enter power purchase agreements under non-binding agreements, like the Geothermal Framework Agreement with Google Energy LLC (the “GFA”); exposure to legal proceedings and claims arising from our business operations; protecting our brand reputation and facing potential negative public perception; negative public perception and political opposition impacting our ability to secure regulatory approvals and market acceptance; the successful and timely execution of our growth strategy, with risks of delays or failures; reliance on key personnel and the potential impact of labor costs and workforce challenges; heavy reliance on technology systems and potential cybersecurity threats; global economic and political conditions affecting our operations, supply chain, and customer demand; the risk that our estimates of capacity potential and heat initially in place are inaccurate or that we are unable to produce quantities of electrical energy commensurate with such estimates; and other risks and uncertainties, including those set forth under the section entitled “Risk Factors” in this Report. These forward-looking statements are made only as of the date hereof, and, except as legally required, we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Unless otherwise indicated or the context otherwise requires, references in this section to the “Company,” “we,” “us,” “Fervo,” or “our” refer to the business of Fervo Energy Company. Overview We are a geothermal energy developer that builds, owns, and operates geothermal power facilities using Enhanced Geothermal Systems (“EGS”). We apply proven technologies, such as horizontal drilling, multistage 1 Table of Contents hydraulic fracturing, and enhanced subsurface monitoring, to design and control subsurface flow pathways, enabling predictable heat recovery without reliance on rare natural fracture networks. We completed our initial public offering (“IPO”) on May 14, 2026. We are advancing from demonstration to utility-scale commercialization and expect to begin delivering first power at Cape Station in Milford, Utah, which will support multi‑gigawatt power developments (“GeoCluster”). We expect our first standardized Organic Rankine Cycle (“ORC”) power plants (“GeoBlocks”) to be operational at the end of 2026 and to reach approximately 100 megawatts (“MWs”) of operating capacity by early 2027 and 500 megawatts of cumulative operating capacity by the end of 2028. As of June 30, 2026, we had signed 658 megawatts of binding power purchase agreements and other arrangements for the sale of power and related attributes (“PPAs”) with credit-worthy utility and corporate buyers, representing approximately $7.2 billion in potential revenue backlog. We have also entered into a 3-gigawatt GFA, creating a repeatable commercial model that we believe can accelerate deployment. Recent Developments On May 14, 2026, we completed our IPO of an aggregate of 80,500,000 shares of Class A common stock of Fervo Energy Company, par value of $0.0001 per share (“Class A common stock”), at a price to the public of $27.00 per share, which includes the exercise in full by the underwriters of their option to purchase an additional 10,500,000 shares of Class A common stock. The gross proceeds from the IPO were approximately $2.2 billion, before deducting underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds from the offering for general corporate purposes, including capital expenditures, continued development of our GeoClusters, expansion of our land holdings portfolio, working capital, and operating expenses. On April 10, 2026, we entered into an agreement with Liberty Mutual Insurance Company to sell and transfer tax credits generated at Cape Station Phase I, supporting our capital deployment strategy for our utility-scale geothermal projects. Trends and Other Factors Affecting Our Business We believe that our performance and future success depend on many factors that present significant opportunities for us but also pose risks and challenges, including those discussed in the section entitled “ Risk Factors ” in this Report and in our IPO Prospectus. Construction Progress at Cape Station . We are advancing our Cape Station project in Milford, Utah, where we have 500 megawatts of capacity under construction. We expect to deliver first power from Cape Station by late 2026 and to reach approximately 100 megawatts of operating capacity by early 2027. As of the date of this filing, 79 out of 80 governmental permits and approvals necessary to commence commercial operations at Cape Station Phase I have been received, with the remaining permit in process. Moreover, 82 out of 179 governmental permits and approvals necessary to commence commercial operations at Cape Station Phase II have been received, and the remaining 97 are in process. Power Demand Environment . Our growth is supported by continued strong demand for clean, firm 24/7 power from utilities, corporate energy buyers, and hyperscalers. Demand has been driven by the rapid increase in AI data center development and accelerating electrification, which has contributed to record power consumption and new market opportunities for energy suppliers. However, actual demand is subject to material uncertainty due to factors outside our control, such as technology advances, energy efficiency gains, and cyclical changes in potential customer investment patterns. Incremental Public Company Expenses . Following the completion of our IPO, we have incurred and will continue to incur significant expenses that we did not incur as a private company. Those costs include director and officer liability insurance expenses, as well as costs associated with third-party and internal resources related to accounting, auditing, Sarbanes-Oxley Act compliance, legal, and investor relations activities. These costs are expensed as incurred and included in General and administrative expense in the Condensed Consolidated Statements of Operations. 2 Table of Contents Change in Tax Law . On July 4, 2025, the “One Big Beautiful Bill Act” (“OBBB”) was signed into law, which substantially modified the clean-energy credit regime established under the Inflation Reduction Act of 2022 (the “IRA”) by accelerating the phase-out of investment tax credits (“ITCs”) and production tax credits (“PTCs”) available to certain renewable energy projects. Under both the IRA and the OBBB, we believe our projects have met the qualification requirements for tax credits. We will continue to assess the provisions under the OBBB and IRA to determine the impact on our business. Key Business and Operational Metrics We regularly review the following key business and operational metrics to evaluate our business, measure our performance, identify trends, formulate business plans, and make strategic decisions. We believe these metrics are useful to investors in evaluating our progress toward commercial operations. The following table summarizes our key business and operational metrics as of and for the period indicated: Q2 2026 Key Performance Indicator Summary As of June 30, 2026, unless otherwise noted Construction & Operations Ending active rig count 3 Total capital expenditures during the period (in millions) $ 399.3 Commercial Contracted MW under binding PPAs 658 Contracted revenue backlog (end of period) (in billions) (1) $ 7.2 Capital & Liquidity Unrestricted cash (in millions) $ 2,106.4 Available undrawn corporate credit (in millions) $ 106.4 Available undrawn non-recourse project debt (in millions) $ 191.2 Geothermal Development Portfolio (2) Mature - Operating (MW) 3 Mature - Under Construction (MW) 500 Mature - Ready to Build (MW) 550 Pipeline - Advanced Development (MW) 3,000 Pipeline - Early Development (MW) 48,550 Prospects - Incremental Land Holdings (net acres) 245,000 Total geothermal lease position (net acres, incl. Prospects) 650,000 _________________ (1) Backlog is calculated using expected energy output over the entire term of each PPA and reflects contracted pricing (including any escalators or indexation) and expected annual energy volume. (2) Geothermal Development Portfolio data as of August 12, 2026. Refer to the following definitions of the Geothermal Development Portfolio. Geothermal Development Portfolio Mature: Represents near-term commercial value and includes projects that are operating, under construction, or ready to build • Operating: 3 megawatts are currently online and generating power from our pilot project, Project Red. • Under Construction: 500 megawatts are currently in construction at Cape Station, with commercial contracts in place and physical work underway. • Ready to Build: 550 megawatts across two different GeoClusters were shovel-ready with initial permits secured to begin construction. These megawatts are backed by calibrated subsurface models, validated 3 Table of Contents against well data and geophysical surveys, and have a clear wellfield development strategy in place. Commercially, we have secured or are in advanced negotiation for offtake and have either obtained interconnection or established a clear, achievable path. Pipeline: Represents our mid-term growth engine and includes both projects where (i) a go-to-market strategy is established, and key milestones and origination are progressing, and (ii) resource characterization is complete, and feasibility activities are underway. For all Pipeline projects, site control has been secured • Advanced Development: 3.0 gigawatts were in advanced development. These projects have a go-to-market strategy established, with key development milestones progressing and active origination efforts underway. Typical activities include preliminary permit filings, on-site geological studies work, and submission of interconnection applications. • Early Development: Over 48 gigawatts were in early-stage development across ten GeoClusters where we have commissioned and received independent HIIP studies and are conducting feasibility activities to validate and confirm the path toward commercial development. Prospects: Represents long-term expansion and consists of large-scale, high-quality leased acreage positions where preliminary technical assessments and geospatial analyses have delineated capacity potential, but initial development activities have not yet commenced • Land Holdings: Our remaining portfolio consists of approximately 245,000 acres of leased acreage as of August 12, 2026, with differentiated geothermal resource quality currently maintained in our portfolio. For this category, we have secured leases and identified project areas but have not commenced initial development work. These three categories (Mature, Pipeline and Prospects) represent the expected progression of our megawatts from those in early development stages to revenue-generating operations. 4 Table of Contents Results of Operations Our results of operations, on a consolidated basis, for the fiscal three and six months ended June 30, 2026 and 2025 are set forth and compared below. Comparison of the Three Months Ended June 30, 2026 to the Three Months Ended June 30, 2025 The following table sets forth our results of operations for the three months ended June 30, 2026 and 2025 including dollar and percentage change period-over-period: Three Months Ended June 30, Change (Dollars in thousands, except percentages) 2026 2025 $ % Revenues $ 113 $ — $ 113 NM Costs and expenses: Operation and maintenance 306 158 148 93.7 % Research and development (income) expense, net (712) 395 (1,107) 280.3 % General and administrative expense 27,427 9,484 17,943 189.2 % Operating lease expense 1,490 205 1,285 NM Depreciation and amortization 344 56 288 514.3 % Operating loss (28,742) (10,298) (18,444) 179.1 % Other income (expense): Interest income 10,521 601 9,920 NM Interest expense (2,215) (1,739) (476) 27.4 % Other non-operating expense, net (35,478) — (35,478) NM Loss before income taxes (55,914) (11,436) (44,478) 388.9 % Income tax expense (1) (2) 1 50.0 % Net loss $ (55,915) $ (11,438) $ (44,477) 388.9 % Certain percentage changes are considered not meaningful (“NM”). Revenues Revenues increased by $0.1 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Revenues relate to ancillary fees associated with rights to geothermal production and are not expected to be a significant component of our long-term revenue, as we have not yet commenced large-scale commercial operations. The change was not material to overall results. Operation and Maintenance Operation and maintenance expenses increased approximately $0.1 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily attributable to modest increases in contracted labor, engineering support and site evaluation activities. The change was not material to overall results. Research and Development (Income) Expense, Net Research and development (“R&D”) (income) expense, net improved by approximately $1.1 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, shifting the net R&D expense of $0.4 million in the prior-year period to net R&D income of $0.7 million in the current period. R&D income, net reflects the excess of grant proceeds over qualifying R&D expenditures and is impacted by both the level of the underlying research activity and the timing of grant receivables. The improvement was primarily driven by higher grant proceeds relative to qualifying R&D expenditures in the current period. 5 Table of Contents General and Administrative Expense General and administrative expense increased by $17.9 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily driven by higher employee-related costs and additional administrative and operational support functions required to support our growth. Employee‑related expenses increased by $8.2 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to workforce growth as we expanded our technical, operational, and administrative functions to support project development, execution, and corporate operations. Headcount increased by 103 employees from 158 employees as of June 30, 2025 to 261 employees as of June 30, 2026. Additional increases in general and administrative expense consisted of $4.8 million attributable to professional services and third-party support fees, $1.4 million attributable to insurance and surety bond expenses associated with our expanding asset base and operational footprint and $0.7 million due to higher software, information technology, and data‑related costs, including licensing fees and cloud‑based services. The remaining changes were not individually significant period-over-period. Operating Lease Expense Operating lease expense increased by $1.3 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to additional lease arrangements supporting the expansion of our geothermal portfolio across approximately 630,000 acres. The increase reflects growth in our operating lease portfolio from 205 leases as of June 30, 2025 to 255 leases as of June 30, 2026. These lease arrangements primarily relate to geothermal resource rights, as well as office facilities and equipment rentals. Depreciation and amortization Depreciation and amortization increased by $0.3 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to additional non-geothermal assets placed in service. Interest Income and Expense Interest income increased by $9.9 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to higher average cash balances following our successful IPO in May 2026. Interest expense increased by $0.5 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to higher outstanding debt balances. Total debt increased by $162.5 million as of June 30, 2026 compared to June 30, 2025, reflecting borrowings under the senior secured project financing facility entered into in March 2026 (“Project Granite Facility”) and Mercuria Energy Trading SA (“Mercuria”), which include our credit agreement (the “Mercuria Credit Facility”) and the letter of credit facility (the “Mercuria Letter of Credit Facility”) to support our growth and operations. The increase was partially offset by a gain on interest rate swaps recognized during the period ended June 30, 2026. Other Non-Operating Expense, Net Other non-operating expense, net increased by $35.5 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This increase was driven by a $26.9 million non-cash loss related to the fair value remeasurement of warrants and a $9.0 million loss on extinguishment of debt related to the XRC Facility. These increases were partially offset by a $0.4 million gain from the remeasurement of a bifurcated embedded derivative associated with our project-level subsidiary Cape Phase I Intermediate HoldCo, LLC (“Cape PI Intermediate HoldCo”) with Centaurus Capital LP (“Centaurus”). 6 Table of Contents Comparison of the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025 The following table sets forth our results of operations for the six months ended June 30, 2026 and June 30, 2025 including dollar and percentage change period-over-period: Six Months Ended June 30, Change (Dollars in thousands, except percentages) 2026 2025 $ % Revenues $ 174 $ — $ 174 NM Costs and expenses: Operation and maintenance 788 410 378 92.2 % Research and development (income) expense, net (784) 359 (1,143) 318.4 % General and administrative expense 44,417 17,163 27,254 158.8 % Operating lease expense 4,110 2,194 1,916 87.3 % Depreciation and amortization 437 103 334 324.3 % Operating loss (48,794) (20,229) (28,565) 141.2 % Other income (expense): Interest income 13,336 2,629 10,707 407.3 % Interest expense (4,932) (2,966) (1,966) 66.3 % Other non-operating expense, net (47,354) (16) (47,338) NM Loss before income taxes (87,744) (20,582) (67,162) 326.3 % Income tax expense (1) (2) 1 50.0 % Net loss $ (87,745) $ (20,584) $ (67,161) 326.3 % Certain percentage changes are considered not meaningful (“NM”). Revenues Revenues increased by $0.2 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Revenues relate to ancillary fees associated with rights to geothermal production and are not expected to be a significant component of our long-term revenue, as we have not yet commenced large-scale commercial operations. The change was not material to overall results. Operation and Maintenance Operation and maintenance expenses increased approximately $0.4 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily attributable to modest increases in contracted labor, engineering support and site evaluation activities. Research and Development (Income) Expense, Net Research and development (“R&D”) (income) expense, net improved by approximately $1.2 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, shifting the net R&D expense of $0.4 million in the prior-year period to net R&D income of $0.9 million in the current period. R&D income, net reflects the excess of grant proceeds over qualifying R&D expenditures and is impacted by both the level of the underlying research activity and the timing of grant receivables. The improvement was primarily driven by higher grant proceeds relative to qualifying R&D expenditures in the current period. General and Administrative Expense General and administrative expense increased by $27.3 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by higher employee-related costs and additional administrative and operational support functions required to support our growth. 7 Table of Contents Employee‑related expenses increased by $15.6 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to the cumulative impact of workforce growth to support project development, execution, and corporate operations. The expansion of our employee base resulted in higher compensation-related costs, including salaries, payroll taxes, health and welfare benefits, performance‑based bonuses, stock‑based compensation, and retirement plan contributions. Additional increases in general and administrative expense consisted of $6.4 million in legal and professional services, primarily related to external advisory, compliance and public company readiness activities associated with scaling the business, $2.0 million attributable to higher software, information technology, and data‑related costs, including licensing fees and cloud‑based services, and $2.1 million for insurance and surety bond expenses associated with our expanding asset base and operational footprint. The remaining changes were not individually significant period-over-period. Certain general and administrative expense categories experienced variability period-over-period due to the timing of specific initiatives, professional engagements, and one‑time or non‑recurring costs. While we expect these expenses to remain elevated as we continue to scale our operations and infrastructure, we expect the rate of growth to moderate as we complete key build‑out initiatives and leverage existing administrative and corporate support functions. Operating Lease Expense Operating lease expense increased by $1.9 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily attributable to additional geothermal resource rights and other lease arrangements supporting our expansion of our geothermal portfolio across approximately 630,000 acres. Depreciation and amortization Depreciation and amortization increased $0.3 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to additional non-geothermal assets placed in service. Interest Income and Expense Interest income increased by $10.7 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to higher average cash balances following our successful IPO in May 2026. Interest expense increased by $2.0 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to higher outstanding debt balances associated with borrowings under the Project Granite Facility and Mercuria financing arrangements. The increase was partially offset by a gain on interest rate swaps recognized during the period ended June 30, 2026. Other Non-Operating Expense, Net Other non-operating expense, net increased by $47.3 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This increase was primarily driven by a $40.0 million non-cash loss related to the fair value remeasurement of warrants and a $9.0 million loss on extinguishment of debt related to the XRC Facility. These increases were partially offset by a $1.6 million gain from the remeasurement of a bifurcated embedded derivative associated with Cape PI Intermediate HoldCo’s arrangement with Centaurus. The remaining changes were not individually significant period-over-period. 8 Table of Contents Liquidity and Capital Resources Sources and Uses of Liquidity Sources of Liquidity We maintain a strong focus on liquidity to support our ongoing geothermal development activities. Our primary sources of liquidity have historically consisted of equity financing, including issuances of redeemable convertible preferred stock, debt financing arrangements at the project and corporate level, project-level equity financings, and grant funding from government agencies. We consider our level of cash on hand, borrowing capacity, current ratio, and working capital levels to be our most important measures of short-term liquidity. For long-term liquidity indicators, we believe our ratio of long-term debt to equity and our historical levels of net cash flows from investing activities to be the most important measures. As of June 30, 2026, our liquidity position consisted of $2.1 billion of unrestricted cash and cash equivalents and $11.0 million of restricted cash. Our cash and cash equivalents are primarily maintained in highly liquid money market funds and deposit accounts with large financial institutions. In addition, we had access to the following undrawn borrowing capacity: $70.0 million under our Mercuria Credit Facility, $36.4 million under our Mercuria Letter of Credit Facility, and $157.8 million under our Project Granite Facility. We also entered into a letter of credit facility (the “Project Granite Letter of Credit Facility”) and had $33.4 million of undrawn borrowing capacity available thereunder. On May 14, 2026, we completed our IPO of an aggregate of 80,500,000 shares of Class A common stock at a price of $27.00 per share, which includes 10,500,000 of the Class A common stock issued upon the underwriters’ full exercise of their option to purchase additional shares. The gross proceeds from the IPO were approximately $2.2 billion, before deducting underwriting discounts and commissions and estimated offering expenses payable by us. We believe our existing cash resources, available borrowing capacity and access to capital markets will be sufficient to meet our liquidity requirements for at least the next 12 months. We expect to continue funding our operations and development activities through a combination of cash on hand, project-level financing arrangements and additional capital raises. Our liquidity and capital resource needs are subject to various risks and uncertainties, including those described in the section titled “ Risk Factors ” in this Report. See further discussion of our available liquidity as described in “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Indebtedness” section below, along with Note 3 – Debt and Off-Balance Sheet Arrangements and Note 20 – Subsequent Events in the notes to condensed consolidated financial statements. Catalyst and Centaurus Financing Agreements Our Cape Station Phase I project is financed through agreements with Granite Energy InvestCo, LLC (“Catalyst”) and Centaurus. The financing arrangements are held through Cape PI HoldCo, LLC and Cape PI Intermediate HoldCo, LLC, which are consolidated by the Company and accounted for as variable interest entities ("VIEs"). These arrangements involve project-level preferred equity with priority distribution waterfalls that must be satisfied before any cash is available to the Company. Distributions under both financings are contingent upon the project achieving commercial operations and generating distributable cash flow; accordingly, we do not expect preferred distributions to be required during the 12-month period following June 30, 2026 . Over the long term, these agreements require cumulative distributions totaling approximately $139.0 million to Catalyst (through 2041) and approximately $122.0 million to Centaurus, the latter of which is subject to return hurdles and includes a future royalty interest. Following completion of this second priority distribution period, Centaurus will retain a royalty interest in the proje ct equal to $5.0 per megawatt-hour. V arious contractual provisions—including change of control rights, reserve requirements, and covenant-based limitations—could accelerate or further restrict cash distributions to the holding company level. 9 Table of Contents See Note 12 – Variable Interest Entity and Note 13 – Noncontrolling Interests of the notes to the condensed consolidated financial statements for further discussion. Capital Requirements Our capital requirements for 2026 and beyond are expected to remain substantial as we advance multiple GeoBlocks toward commercial operation, including Cape Station. While we have not yet achieved significant revenue generation, we anticipate our funding needs will include continued capital expenditures for projects under construction, such as Cape Station, exploration and development costs for new geothermal sites across our approximately 630,000 -acre portfolio, personnel costs and general and administrative expense as we scale our organization and technical capabilities, and working capital to support expanded operations. Beginning with this Report, we have transitioned our capital expenditure disclosure from a rolling 12-month basis to a calendar-year basis, which we believe better aligns with how we plan and budget our capital program and improves comparability across reporting periods. As of June 30, 2026, we project total capital expenditures for the remainder of 2026 of approximately $850.0 million to $900.0 million , driven primarily by drilling, well completion, and continued construction activities at our Cape Station Phase I and Phase II facilities, as well as early and advanced development activities across our portfolio, including permitting, engineering, site development, long-lead equipment procurement, and resource characterization. Capital expenditures incurred during the six months ended June 30, 2026 were $399.3 million (see Condensed Consolidated Statements of Cash Flows in the condensed consolidated financial statements) . Accordingly, total capital expenditures for the year ending December 31, 2026 are currently projected to be approximately $1.3 billion . This full-year estimate is consistent with our previously disclosed expectation of approxim ately $2.2 billion of cumulative capital expenditures for Cape Station Phase II through 2028 and does not reflect a change in our underlying development plan. Based on current conditions, we be lieve our capital resources are sufficient to meet our financial obligations and fund our planned development activities. A s a company with significant development activities transitioning toward commercial operations, we continue to rely on external financing to fund our operations and growth initiatives. Indebtedness XRC Facility During 2024 and 2025, Cape Generating Station 3 LLC and Cape Generating Station 5 LLC, two of our wholly owned subsidiaries, issued three promissory notes under the XRC Facility. On April 14, 2026, we repaid all outstanding borrowings under the XRC Facility using proceeds from the Project Granite Facility, and the facility was terminated. See Note 3 – Debt and Off-Balance Sheet Arrangements in the notes to condensed consolidated financial statements for further discussion. Mercuria Credit Facility and Letter of Credit Facility During 2024, Fervo HoldCo LLC, one of our wholly owned subsidiaries, entered into the $40.0 million Mercuria Credit Facility and $80.0 million Mercuria Letter of Credit Facility. In May 2025, the Mercuria Credit Facility was amended to increase the term loan from $40.0 million to $100.0 million. As of June 30, 2026, Fervo HoldCo LLC had drawn $30.0 million under the Mercuria Credit Facility and $43.6 million under the Mercuria Letter of Credit Facility. The Mercuria Credit Facility matures on November 20, 2027, while the Mercuria Letter of Credit Facility matures on the earlier of November 20, 2027 or upon acceleration of its obligations due to an event of default. The Mercuria Credit Facility and Mercuria Letter of Credit Facility include customary financial covenants related to asset coverage, leverage, and exposure levels. In addition, both agreements contain customary restrictive covenants, including limitations on indebtedness, liens, restricted payments, and certain corporate actions. The Mercuria Credit Facility also restricts the ability of the borrower subsidiary to make cash distributions to the parent company. As of June 30, 2026, we were in compliance with all restrictive and financial covenants. 10 Table of Contents Project Granite Facility In March 2026, our subsidiaries, Cape Phase I Borrower LLC and Phase I WellCo LLC (the “Borrowers”) entered into a senior secured credit agreement (“Granite Credit Agreement”) to finance the development of our Cape Station Phase I project. The facility 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 that will refinance the construction loans upon satisfaction of specified conversion conditions. As of June 30, 2026, the Borrowers had $212.3 million outstanding under the construction loan and tax credit transfer bridge loan facility and $17.9 million outstanding under the Project Granite Letter of Credit Facility. The proceeds financed third-party debt issuance costs, agency fees and upfront lender fees incurred upon execution of the Granite Credit Agreement. As of June 30, 2026, we had access to undrawn borrowing capacity of $157.8 million, consisting of the construction loan facility and a tax credit transfer bridge loan facility and $33.4 million under our Project Granite Letter of Credit Facility. The Project Granite Facility contains customary covenants and includes a project-level cash management structure under which project revenues are applied in accordance with a specified priority of payments. Distributions from the project are subject to the satisfaction of specified conditions, and as a result, cash generated at the project level may be restricted from being available to fund corporate-level obligations. For further discussion of our indebtedness, see Note 3 – Debt and Off-Balance Sheet Arrangements of the notes to condensed consolidated financial statements. Net Operating Losses (“NOL”) and Valuation Allowance We have significant NOLs that may provide future offset to taxable income during the applicable carryover periods. As of June 30, 2026, we had approximately $124.0 million of net operating loss carryforwards for federal tax purposes, all of which are indefinitely lived. We continue to assess whether the deferred tax assets are likely to be realized based on future taxable income and the reversal of deferred tax liabilities. Because we have limited historical earnings, we believe it is still more likely than not that these assets will not be utilized, so a valuation allowance remains on the net deferred tax asset balance. Cash Flow Activities The following table summarizes our cash flow activities: Six Months Ended June 30, (Dollars in thousands) 2026 2025 Beginning cash, cash equivalents and restricted cash $ 467,836 $ 199,428 Net cash (used in) provided by: Operating activities (43,773) 6,221 Investing activities (399,278) (213,368) Financing activities 2,092,586 102,465 Net increase (decrease) in cash, cash equivalents and restricted cash 1,649,535 (104,682) Ending cash, cash equivalents and restricted cash $ 2,117,371 $ 94,746 Net Cash Used in Operating Activities Net cash used in operating activities increased by $50.0 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by a higher net loss, partially reduced by higher non-cash items during the period. Net loss, excluding non-cash activities, was $26.0 million for the six months ended June 30, 2026 compared to $17.0 million in the prior year period, which contributed to a $9.0 million increase in cash used in operating 11 Table of Contents activities. Such increase reflects higher underlying cash operating expenses, including employee-related costs and other operating expenditures, as described in the “ Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations” section above. Changes in operating assets and liabilities used $17.8 million of cash in the current period compared to $23.3 million cash provided in the prior year period, representing a $41.1 million decrease. This decrease was primarily driven by lower inflows from deposits of $15.3 million, reflecting fewer releases and increased funding of performance bond deposits, as well as higher cash outflows from prepaid expenses and other of $24.7 million and net changes in grant receivables and other assets and liabilities of $9.6 million, primarily due to timing of vendor payments and operating cost disbursements. This was partially offset by favorable change in accounts payable of $8.5 million, reflecting the timing of payments of operating and administrative expenses between periods. Net Cash Used in Investing Activities Cash used in investing activities during the six months ended June 30, 2026 and the six months ended June 30, 2025 related entirely to capital expenditures, which increased by $185.9 million during the six months ended June 30, 2026 compared to the prior year period. This increase reflects accelerated project development activities as we advanced GeoBlocks toward construction and operation. Capital expenditures during the six months ended June 30, 2026 were driven primarily by construction activities at Cape Station, including the drilling and completion of production and injection wells, development of surface facilities, and construction of related infrastructure necessary to support future commercial power generation. Of our total capital expenditures during the six months ended June 30, 2026, the majority of spending was non‑discretionary, necessary to advance GeoBlocks already under development. They consisted of costs required to complete in‑process GeoBlocks, satisfy regulatory and safety requirements, and meet contractual milestones. Net Cash Provided by Financing Activities Net cash provided by financing activities increased by $2.0 billion during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Net cash provided by financing activities during the six months ended June 30, 2026 was primarily attributable to $2.0 billion of proceeds from our IPO. We also received $212.3 million of proceeds from the Project Granite Facility that were partially offset by $20.9 million of third-party debt issuance costs and $152.1 million repayment of long-term debt. In addition, we received $18.7 million of cash proceeds from the exercise of warrants and $1.2 million of proceeds from the issuance of common stock. For the six months ended June 30, 2025, net cash provided by financing activities primarily reflected proceeds from equity and debt financings completed during the year, including $81.2 million of proceeds from subsidiary stock, net of issuance costs, $23.0 million of net proceeds from the XRC Facility and Mercuria, and $0.2 million of proceeds from the issuance of common stock. These financing inflows were partially offset by $2.0 million of cash used for the repurchase of treasury stock during the period. Contractual Obligations and Commitments Our contractual obligations consist of purchase commitments, long-term debt and related interest payments, and operating lease obligations. We have entered into commitments with suppliers for materials and services to support the development and construction of our geothermal projects. As of June 30, 2026, we had total supplier contractual commitments of $488.3 million, the majority of which relates to our Cape Station Phase I and Cape Station Phase II facilities. See Note 3 – Debt and Off-Balance Sheet Arrangements, Note 8 – Leases and Note 19 – Commitments and Contingencies of the notes to the condensed consolidated financial statements, for further information on our commitments. 12 Table of Contents We also have distribution requirements under the Catalyst and Centaurus Financing Agreements. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Sources and Uses of Liquidity — Catalyst and Centaurus Financing Agreements” for additional information. Off-Balance Sheet Arrangements In addition to the Mercuria Letter of Credit Facility and Granite Letter of Credit Facility described above, we maintain surety bond arrangements to support our contractual obligations under PPAs, land development agreements, and construction contracts. As of June 30, 2026, we had $64.8 million in outstanding surety bonds. We expect our surety bond requirements to increase as we continue to develop our geothermal projects and enter into additional commercial agreements. Critical Accounting Estimates Our financial statements are prepared in conformity with GAAP, which requires us to apply accounting policies and make estimates and assumptions that affect the measurement and carrying values of assets and liabilities as of the date of the financial statements, the revenues recognized and expenses incurred during the presented reporting periods, and financial statement disclosures of commitments, contingencies, and other significant matters. These estimates involve judgments about future events and are subject to inherent uncertainty; accordingly, actual results could differ materially from those estimates. There have been no material changes to our critical accounting estimates from those disclosed in our IPO Prospectus. New Accounting Pronouncements and Disclosure Requirements See Note 2 – Significant Accounting Policies to the audited consolidated financial statements included in the IPO Prospectus filed with the Securities and Exchange Commission on May 14, 2026 and in this Report for information regarding new accounting pronouncements. Emerging Growth Company Status and Smaller Reporting Company Status We are an “emerging growth company,” or “EGC”, as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the JOBS Act, and we have elected to comply with certain reduced public company reporting requirements. We could remain an emerging growth company until the last day of the fiscal year following the fifth anniversary of the completion of our IPO. However, if (a) our total annual gross revenue exceeds $1.235 billion, (b) we are deemed to be a large accelerated filer, which means the market value of common stock that is held by non-affiliates exceeds $700.0 million as of the end of the prior fiscal year's second fiscal quarter, or (c) our non-convertible debt issued within a three-year period exceeds $1.0 billion, we would cease to be an emerging growth company as of the following fiscal year. Additionally, we are a “smaller reporting company,” or “SRC”, as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will be a smaller reporting company until the last day of any fiscal year for so long as either (1) the market value of common stock held by non-affiliates did not exceed $250.0 million as of the prior June 30, or (2) our annual revenues did not exceed $100.0 million during such completed fiscal year and the market value of common stock held by non-affiliates did not exceed $700.0 million as of the prior June 30.