Ameresco(AMRC) - 2025 Q2 - Quarterly Results

Executive Summary Q2 2025 Financial Highlights Ameresco reported strong Q2 2025 results, with 8% revenue growth, 24% Adjusted EBITDA increase, and a record $5.1 billion project backlog Q2 2025 Key Financial Metrics | Metric | Q2 2025 Value | | :-------------------------------- | :------------ | | Revenues | $472.3 million | | Net income attributable to common shareholders | $12.9 million | | GAAP EPS | $0.24 | | Non-GAAP EPS | $0.27 | | Adjusted EBITDA | $56.1 million | - Total Revenue and Adjusted EBITDA grew by 8% and 24% respectively, exceeding expectations[2][4] - Total Project Backlog reached a record $5.1 billion, with Energy Infrastructure and resiliency projects accounting for almost half[2][6] CEO Commentary CEO George Sakellaris emphasized strong execution, revenue growth, operating leverage, and increasing demand for Energy Infrastructure solutions - Revenue growth of 8% exceeded expectations, reflecting strength across business lines, particularly in Europe and the Energy Asset business[4] - Adjusted EBITDA increased 24%, demonstrating significant operating leverage[4] - The company added over $550.0 million in new project awards during the quarter, strengthening its foundation for future profitable growth[4][6] - Rapidly increasing demand for electricity, rising utility rates, and growing grid instability are driving demand for Ameresco's diverse Energy Infrastructure solutions, including a new Nuclear Partner Program[7] Second Quarter 2025 Financial Results Consolidated Financial Performance Ameresco's Q2 2025 total revenue grew 8% to $472.3 million, with net income at $12.9 million and Adjusted EBITDA up 24% Consolidated Financial Performance Summary | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :-------- | :-------- | :----------- | | Total Revenue | $472.3M | $438.0M | +8% | | Net Income Attributable to Common Shareholders | $12.9M | $5.0M | +158% | | GAAP EPS | $0.24 | $0.10 | +140% | | Non-GAAP EPS | $0.27 | $0.10 | +170% | | Adjusted EBITDA | $56.1M | $45.1M | +24% | | Gross Margin | 15.5% | N/A | In line with expectations | - Q2 net income and EPS were positively impacted by $4.3 million in non-cash, mark-to-market gains on certain unhedged derivatives, and $3.0 million of fx translation gains[8] Segment Performance Projects revenue grew 8%, Energy Asset revenue increased 18%, O&M revenue rose 7%, and Other revenue decreased due to AEG sale Segment Performance Summary | Segment | Q2 2025 Revenue | Q2 2024 Revenue | YoY Change (Revenue) | Q2 2025 Adj. EBITDA | Q2 2024 Adj. EBITDA | YoY Change (Adj. EBITDA) | | :-------- | :-------------- | :-------------- | :------------------- | :------------------ | :------------------ | :----------------------- | | Projects | $358.1M | $330.8M | +8% | $16.3M | $7.1M | +129.6% | | Energy Assets | $62.9M | $53.4M | +18% | $33.8M | $31.2M | +8.3% | | O&M | $28.0M | $26.2M | +7% | $3.4M | $3.9M | -12.8% | | Other | $23.3M | $27.6M | -15.6% | $2.6M | $2.9M | -10.3% | - Projects revenue growth was driven by continued growth in Europe and focus on project execution[8] - Energy Asset revenue benefited from the cumulative impact of long-term contracts associated with the growing portfolio of operating Energy Assets[8] - Other revenue was lower due to the sale of AEG at the end of 2024[8] Project and Asset Highlights Ameresco achieved a record $5.1 billion total project backlog, with strong future revenue visibility and 7 MWe of new energy assets in operation Project and Asset Backlog and Visibility | Metric | Value | | :-------------------------------- | :-------- | | Awarded Project Backlog | $2,689M | | Contracted Project Backlog | $2,415M | | Total Project Backlog | $5,104M | | 12-month Contracted Backlog | $1,219M | | O&M Revenue Backlog | $1,346M | | 12-month O&M Backlog | $101M | | Energy Asset Visibility | $3,317M | | Total Revenue Visibility | $9,767M | | Operating Energy Assets | 749 MWe | | Ameresco's Net Assets in Development | 615 MWe | - Ameresco brought 7 MWe of Energy Assets into operation during the quarter[9] Balance Sheet and Cash Flow Metrics Q2 2025 ended with $81.6 million cash, corporate debt at $294.1 million, Energy Asset Debt at $1.5 billion, and Adjusted Cash from Operations at $49.6 million Balance Sheet and Cash Flow Summary | Metric | Value (June 30, 2025) | | :-------------------------------- | :-------------------- | | Total Corporate Debt | $294.1M | | Corporate Debt Leverage Ratio | 3.4X | | Total Energy Asset Debt | $1,502.6M | | Non-Core Debt, International JVs | $25.8M | | Energy Asset Book Value | $2,041.3M | | Energy Debt Advance Rate | 74% | | Cash Flows from Operating Activities (Q2) | $(26.9)M | | Adjusted Cash from Operations (Q2) | $49.6M | | 8-quarter rolling average Adjusted Cash from Operations | $46.9M | - Corporate debt increased to support working capital needs due to continued business growth[10] - During the quarter, the Company successfully executed approximately $175.0 million in project financing commitments and sold over $70.0 million in RNG-related tax credits[10] Outlook and Guidance FY 2025 Guidance Ameresco reiterated its FY 2025 guidance, projecting revenue of $1.85-$1.95 billion and Adjusted EBITDA of $225-$245 million FY 2025 Financial Guidance | Metric | FY 2025 Guidance Range | | :-------------------------------- | :--------------------- | | Revenue | $1.85 billion - $1.95 billion | | Gross Margin | 15.5% - 16.0% | | Adjusted EBITDA | $225 million - $245 million | | Depreciation & Amortization | $103 million - $105 million | | Interest Expense & Other | $85 million - $90 million | | Effective Tax Rate | (50)% - (35)% | | Income Attributable to Non-Controlling Interest | $(5) million - $(8) million | | Non-GAAP EPS | $0.70 - $0.90 | - The company's business with the Federal Government is returning to a more normalized cadence, with no material short-term impact expected from the OBBB Act[11] - The 2025 guidance excludes the potential impact of a change in accounting principle related to sale-leaseback arrangements, which is still being assessed[12] Company Information Conference Call/Webcast Information Ameresco hosted a conference call on August 4, 2025, to discuss Q2 2025 results and outlook, with webcast access available - A live, listen-only webcast of the conference call was available through the 'Investors' section of the Company's website at www.ameresco.com, with an archived webcast available for one year[14] About Ameresco, Inc. Ameresco, Inc., founded in 2000, is a leading energy solutions provider focused on cost reduction, resilience, and net-zero decarbonization - Ameresco's mission is to help customers navigate the global energy transition by reducing costs, enhancing resilience, and decarbonizing to net zero[16] - The company's portfolio includes smart energy efficiency solutions, upgrading aging infrastructure, and developing, constructing, and operating distributed energy resources[16] - Ameresco serves Federal, state and local governments, utilities, educational and healthcare institutions, housing authorities, and commercial and industrial customers[16] - Headquartered in Framingham, MA, Ameresco has over 1,500 employees providing local expertise in North America and Europe[16][17] Contact Information Contact details for Media Relations and Investor Relations were provided for inquiries - Media Relations contact: Leila Dillon, 508.661.2264, news@ameresco.com[18] - Investor Relations contacts: Eric Prouty and Lynn Morgen from AdvisIRy Partners, 212.750.5800[18] Legal and Non-GAAP Disclosures Safe Harbor Statement The Safe Harbor Statement indicates forward-looking statements are subject to risks that could cause actual results to differ materially - Forward-looking statements are subject to risks such as demand for solutions, timing of contracts, ability to perform, government fiscal health, supply chain disruptions, and regulatory changes[19] - The company disclaims any obligation to update these forward-looking statements, which represent views as of the press release date[20] Use of Non-GAAP Financial Measures Ameresco uses Non-GAAP measures like Adjusted EBITDA and Non-GAAP EPS to provide supplemental investor information, excluding discrete items - Non-GAAP measures are used to provide useful supplemental information and evaluate operating performance without regard to items that can vary substantially[15][36][38] - Adjusted EBITDA excludes items such as income tax, other expenses net, depreciation, amortization, stock-based compensation, and contingent consideration[38] - Non-GAAP net income and EPS exclude discrete items like asset impairment, contingent consideration, and restructuring charges, which are not part of core operations[40][41] - Adjusted Cash from Operations includes proceeds from ITC sales and Federal ESPC projects, which are considered benefits generated by underlying assets and projects[42] Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets As of June 30, 2025, total assets reached $4.295 billion, with increased energy assets and long-term debt reflecting investments and financing Condensed Consolidated Balance Sheets Summary | Asset/Liability | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | ASSETS: | | | | Cash and cash equivalents | $81,633 | $108,516 | | Total current assets | $1,280,430 | $1,301,134 | | Energy assets, net | $2,041,247 | $1,915,311 | | Total assets | $4,295,280 | $4,158,508 | | LIABILITIES & EQUITY: | | | | Total current liabilities | $822,075 | $889,008 | | Long-term debt and financing lease liabilities, net | $1,661,839 | $1,483,900 | | Total stockholders' equity | $1,070,871 | $1,045,149 | | Total liabilities, redeemable non-controlling interests and stockholders' equity | $4,295,280 | $4,158,508 | - Energy assets, net, increased by over $125 million from December 31, 2024, reflecting continued investments[22] - Long-term debt and financing lease liabilities, net, increased by approximately $178 million, indicating increased financing activities[23] Condensed Consolidated Statements of Income (Loss) Q2 2025 net income attributable to common shareholders rose to $12.9 million, driven by 8% revenue growth and improved operating income Condensed Consolidated Statements of Income (Loss) Summary | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenues | $472,284 | $437,982 | | Cost of revenues | $398,926 | $372,813 | | Gross profit | $73,358 | $65,169 | | Operating income | $27,774 | $20,953 | | Income (loss) before income taxes | $12,618 | $5,194 | | Net income (loss) | $15,518 | $5,194 | | Net income attributable to common shareholders | $12,864 | $5,010 | | Basic EPS | $0.24 | $0.10 | | Diluted EPS | $0.24 | $0.09 | - Operating income increased by 32.5% year-over-year for the quarter, from $20.95 million to $27.77 million[26] - For the six months ended June 30, 2025, net income attributable to common shareholders was $7.38 million, a substantial improvement from $2.07 million in the prior year period[26] Condensed Consolidated Statements of Cash Flows For H1 2025, operating cash flow was a $(55.18) million outflow, investing activities a $(176.03) million outflow, and financing activities a $221.94 million inflow Condensed Consolidated Statements of Cash Flows Summary | Cash Flow Category | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cash flows from operating activities | $(55,177) | $74,131 | | Cash flows from investing activities | $(176,033) | $(233,212) | | Cash flows from financing activities | $221,935 | $238,435 | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(6,361) | $79,424 | | Cash, cash equivalents, and restricted cash, end of period | $192,017 | $233,100 | - Capital investments in energy assets remained substantial at $(208.13) million for the six-month period[28] - Proceeds from sales of ITC contributed $70.79 million to investing activities in 2025, compared to none in 2024[28] - Proceeds from long-term energy asset debt financings were $290.16 million for the six months ended June 30, 2025[28] Non-GAAP Reconciliations and Other Financial Measures Adjusted EBITDA Reconciliation Q2 2025 Adjusted EBITDA increased to $56.1 million, primarily from Energy Assets, with YTD consolidated Adjusted EBITDA reaching $96.78 million Adjusted EBITDA by Segment (Quarterly) | Segment | Q2 2025 Adj. EBITDA (in thousands) | Q2 2024 Adj. EBITDA (in thousands) | YoY Change | | :-------- | :--------------------------------- | :--------------------------------- | :--------- | | Projects | $16,295 | $6,967 | +133.9% | | Energy Assets | $33,787 | $31,233 | +8.2% | | O&M | $3,447 | $3,968 | -13.2% | | Other | $2,618 | $2,963 | -11.6% | | Consolidated | $56,147 | $45,131 | +24.4% | Adjusted EBITDA by Segment (Year-to-Date) | Segment | YTD Q2 2025 Adj. EBITDA (in thousands) | YTD Q2 2024 Adj. EBITDA (in thousands) | YoY Change | | :-------- | :----------------------------------- | :----------------------------------- | :--------- | | Projects | $25,031 | $10,205 | +145.3% | | Energy Assets | $63,893 | $52,428 | +21.9% | | O&M | $5,109 | $8,757 | -41.6% | | Other | $2,749 | $4,572 | -39.9% | | Consolidated | $96,782 | $75,962 | +27.4% | - Adjusted EBITDA margin for Q2 2025 was 11.9%, up from 10.3% in Q2 2024[30] Non-GAAP Net Income, EPS, and Adjusted Cash from Operations Q2 2025 Non-GAAP net income was $14.26 million, Non-GAAP EPS $0.27, and Adjusted cash from operations $49.60 million, bolstered by ITC sales Non-GAAP Financial Measures Summary | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YTD Q2 2025 (in thousands) | YTD Q2 2024 (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | :------------------------- | :------------------------- | | Non-GAAP net income (loss) | $14,258 | $5,212 | $8,783 | $(172) | | Non-GAAP EPS | $0.27 | $0.10 | $0.16 | $0.00 | | Adjusted cash from operations | $49,598 | $153,861 | $51,026 | $194,259 | - Adjusted cash from operations for Q2 2025 included $70.79 million from sales of ITC and $5.68 million from Federal ESPC projects[32] New Contracts and Awards Ameresco secured $177.13 million in new contracts and $558.10 million in new awards during Q2 2025, strengthening future revenue New Contracts and Awards Summary | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YTD Q2 2025 (in thousands) | YTD Q2 2024 (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | :------------------------- | :------------------------- | | New contracts | $177,132 | $513,583 | $510,866 | $848,116 | | New awards | $558,102 | $715,601 | $925,390 | $1,055,399 | - New awards represent estimated future revenues from projects that have been awarded but contracts not yet signed[33] Non-GAAP Financial Guidance Reconciliation The company provided a reconciliation for its FY 2025 Adjusted EBITDA guidance, starting from operating income and adjusting for non-cash and other charges FY 2025 Adjusted EBITDA Guidance Reconciliation | Metric | FY 2025 Guidance Range (in millions) | | :-------------------------------- | :----------------------------------- | | Operating income | $113 - $132 | | Depreciation and amortization | $103 - $105 | | Stock-based compensation | $14 - $16 | | Restructuring and other charges | $(5) - $(8) | | Adjusted EBITDA | $225 - $245 | - Operating income is used as the most directly comparable GAAP measure for Adjusted EBITDA reconciliation in guidance, as forward-looking net income cannot be calculated without unreasonable efforts[34]