Ameresco, Inc. Q1 FY2025 earnings call

• Celebrated 25th anniversary, with first quarter revenue up 18% and adjusted EBITDA up 32%. Total project backlog stood at $4.9 billion, and contracted project backlog was $2.6 billion. - Approximately 30% of total project backlog is related to federal government work, with one canceled project rescoped and two paused contracts unpaused. New federal RFPs in resiliency and energy infrastructure were noted. - Most equipment for ongoing projects and assets in development already purchased, shielding from near-term tariff impacts; long-term, working to mitigate price increases in contract negotiations. - Net income was a loss of $5.5 million ($0.10 per share), adjusted EBITDA was $40.6 million (up 32%). Cash position was solid with $72 million in cash, and total corporate debt was $270 million.

Projects Business: Revenue grew 23%, contributing to overall growth. Total project backlog increased 22% to $4.9 billion, with contracted project backlog up 80% to $2.6 billion. Energy Asset Business: Revenue grew 31% due to growth in assets in operation (now 740 megawatts). Other Business: Revenue decline attributed to divestiture of the AEG business at the end of 2024.

• Reaffirmed 2025 revenue midpoint at $1.9 billion and adjusted EBITDA midpoint at $235 million. - Anticipates Q2 revenue to be in the range of $400 million to $425 million. - Expects the second half of 2025 to account for approximately 60% of total revenue.

• Potential delays or cancellations in federal contracts due to administrative challenges or workforce issues. - Tariff impacts on future projects, though current projects are shielded, future projects may face pass-through or cost absorption issues. - Uncertainties in RIN prices affecting energy asset profitability, though thorough vetting processes are in place.

Q: Noah Kaye inquired about federal contracts, specifically the status of canceled and paused contracts.

A: Mark and George stated the canceled project was rescoped, and the two paused contracts were unpaused, with a positive outlook on future federal work due to new RFPs.

Q: George Gianarikas asked about projects sensitive to Inflation Reduction Act changes.

A: Mark mentioned safe harboring of ITC for projects, with little short-term impact from IRA changes.

Q: Kashy Harrison questioned tariffs and federal workforce impacts.

A: George and Mark discussed tariff pass-throughs in contracts and no significant impact from reduced federal workforce so far.

Q: Craig Irwin asked about RINs and operating expenses.

A: Josh Baribeau discussed thorough vetting processes for RIN projects and cost controls on operating expenses.

Q: Joseph Osha inquired about storage procurement and tariff pass-throughs.

A: Josh Baribeau talked about traditional lithium ion sourcing and contract structures to handle tariff uncertainties.