Ameresco(US:AMRC)2025-08-05 12:51PART I - FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements This section presents Ameresco's unaudited condensed consolidated financial statements for the periods ended June 30, 2025, along with detailed notes on accounting policies Condensed Consolidated Balance Sheets The balance sheet as of June 30, 2025, shows total assets increased to $4.30 billion, total liabilities to $3.22 billion, and total stockholders' equity grew to $1.07 billion Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 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 | | Total current liabilities | $822,075 | $889,008 | | Long-term debt and financing lease liabilities, net | $1,661,839 | $1,483,900 | | Total liabilities | $3,224,409 | $3,113,359 | | Total stockholders' equity | $1,070,871 | $1,045,149 | Condensed Consolidated Statements of Income (Loss) Ameresco reported significant increases in Q2 2025 net income to $15.5 million and six-month net income to $9.9 million, with diluted EPS at $0.24 Financial Performance Summary (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $472,284 | $437,982 | $825,113 | $736,388 | | Gross Profit | $73,358 | $65,169 | $125,277 | $112,162 | | Operating Income | $27,774 | $20,953 | $41,466 | $28,946 | | Net Income (Loss) | $15,518 | $5,194 | $9,912 | $(984) | | Diluted EPS | $0.24 | $0.09 | $0.14 | $0.04 | Condensed Consolidated Statements of Cash Flows For H1 2025, net cash used in operating activities was $55.2 million, with a net decrease in cash, cash equivalents, and restricted cash of $6.4 million Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $(55,177) | $74,131 | | Net cash from investing activities | $(176,033) | $(233,212) | | Net cash from financing activities | $221,935 | $238,435 | | Net (decrease) increase in cash | $(6,361) | $79,424 | - Capital investments in energy assets were a primary use of cash in investing activities, totaling $208.1 million for the first six months of 202529 Notes to Condensed Consolidated Financial Statements The notes provide detailed disclosures on accounting policies, revenue recognition, acquisitions, debt, leases, contingencies, and segment information - Total contracted backlog stood at $3.76 billion as of June 30, 2025, with approximately 35% expected to be recognized as revenue in the next twelve months61 - On January 24, 2025, the company acquired ASA Controls, Inc., an energy services company, for $3.97 million in cash66 - The company is exposed to a potential loss related to a $26.7 million deposit paid to Powin LLC, a battery supplier that filed for Chapter 11 bankruptcy10644 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 and H1 2025 financial results, highlighting revenue growth, key business trends, regulatory impacts, supply chain challenges, segment performance, backlog, and liquidity Key Factors and Trends Company performance is influenced by federal policies, ongoing supply chain disruptions, inflation, and the unresolved dispute with Southern California Edison (SCE) over potential liquidated damages - The newly enacted One Big Beautiful Bill Act (OBBB) on July 4, 2025, introduces new timing requirements for solar ITC eligibility and phases down ITCs for energy storage, potentially impacting project economics150151 - The company continues to face supply chain disruptions, inflation, and component shortages, which negatively impacted results during the first six months of 2025154155 - A dispute with SCE over potential liquidated damages up to a maximum of $89 million remains unresolved, although two of the three projects have reached substantial completion102161162 Backlog and Awarded Projects The company's total project backlog increased to $5.1 billion as of June 30, 2025, with the 12-month project backlog growing to $1.2 billion Backlog Summary (in thousands) | Backlog Category | As of June 30, 2025 | As of June 30, 2024 | | :--- | :--- | :--- | | Total project backlog | $5,103,906 | $4,413,043 | | Fully-contracted backlog | $2,415,369 | $1,650,562 | | Awarded, not yet signed | $2,688,537 | $2,762,481 | | 12-month project backlog | $1,219,471 | $817,369 | | O&M Backlog (fully-contracted) | $1,346,352 | $1,185,890 | Results of Operations Q2 2025 revenues increased 7.8% to $472.3 million, with operating income up 32.6%, while H1 2025 revenues grew 12.0% to $825.1 million, and operating income rose 43.3% Q2 Year-Over-Year Financial Results (in thousands) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $472,284 | $437,982 | 7.8% | | Gross Profit | $73,358 | $65,169 | 12.6% | | Operating Income | $27,774 | $20,953 | 32.6% | | Net Income | $15,518 | $5,194 | 198.8% | Six Months Year-Over-Year Financial Results (in thousands) | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $825,113 | $736,388 | 12.0% | | Gross Profit | $125,277 | $112,162 | 11.7% | | Operating Income | $41,466 | $28,946 | 43.3% | | Net Income (Loss) | $9,912 | $(984) | 1,107.3% | Business Segment Analysis In H1 2025, Europe segment revenue more than doubled, North America Regions grew 12.4%, while U.S. Federal revenue declined 42.5%, and Renewable Fuels reported a loss before taxes Revenues by Segment - Six Months Ended June 30 (in thousands) | Segment | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | North America Regions | $389,445 | $346,416 | 12.4% | | U.S. Federal | $84,891 | $147,627 | (42.5)% | | Renewable Fuels | $80,994 | $78,711 | 2.9% | | Europe | $238,541 | $117,181 | 103.6% | | All Other | $31,242 | $46,453 | (32.7)% | Income (Loss) Before Taxes by Segment - Six Months Ended June 30 (in thousands) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | North America Regions | $29,245 | $14,436 | | U.S. Federal | $8,579 | $16,741 | | Renewable Fuels | $(2,837) | $6,022 | | Europe | $10,417 | $1,241 | | All Other | $3,537 | $5,351 | Liquidity and Capital Resources The company maintains liquidity through cash flow and debt facilities, refinancing its credit facility in January 2025, and plans significant capital expenditures for new renewable energy plants - On January 23, 2025, the company refinanced its corporate credit facility, resulting in a new $225 million revolver and a $100 million term loan, both maturing in December 2028184188 - The company plans to invest an additional $150 million to $200 million in capital expenditures during the remainder of 2025, mainly for constructing new renewable energy plants204 - Cash used in operations was $55.2 million for H1 2025, a significant shift from $74.1 million in cash provided by operations in H1 2024, primarily due to changes in working capital accounts like accounts payable and deferred revenue201202 Item 3. Quantitative and Qualitative Disclosures About Market Risk As of June 30, 2025, the company reports no significant changes in market risk exposures compared to its 2024 Annual Report on Form 10-K - There were no significant changes in market risk exposures from those described in the 2024 Form 10-K211 Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of the end of the quarter212 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls213 PART II - OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various legal proceedings but does not expect any pending cases to have a material adverse effect on its business or financial condition - The company states that it does not expect any currently pending legal proceedings to have a material adverse effect on its business or financial condition214 Item 1A. Risk Factors This section refers to the detailed risk factors in the 2024 Form 10-K, indicating no material changes or additions to those previously disclosed risks - The report directs investors to the risk factors previously disclosed in the 2024 Form 10-K for a comprehensive understanding of the risks the business faces216217 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Ameresco did not repurchase common stock in Q2 2025, with approximately $5.7 million remaining available under its authorized stock repurchase program - No shares were repurchased in Q2 2025. Approximately $5.7 million remains authorized for purchase under the existing stock repurchase program218 Item 5. Other Information This section discloses that CFO Mark A. Chiplock adopted a Rule 10b5-1 trading plan on June 5, 2025, for the potential sale of up to 58,998 shares of Class A common stock - On June 5, 2025, CFO Mark A. Chiplock adopted a Rule 10b5-1 trading plan for the sale of up to 58,998 shares, effective until May 1, 2026, or earlier completion220 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including Sarbanes-Oxley certifications and financial statements formatted in Inline XBRL - The exhibits filed with the report include Sarbanes-Oxley certifications (302 and 906) and financial data in Inline XBRL format221