Ameresco, Inc. Q2 FY2025 earnings call

• Ameresco delivered strong financial and operational performance with 8% revenue growth and 24% adjusted EBITDA growth. Focus on profitable execution with higher profit margin growth than top line.
• Captured emerging opportunities in energy infrastructure solutions for U.S. and European sectors driven by increasing electricity demand, utility rate hikes, and grid instability.
• Diversification in customer base (broad public/private), technology portfolio (energy efficiency, storage, generation), and geographic reach (U.S., Canada, U.K., Europe).
• Policy and regulatory changes in D.C. show improved business environment, with federal contracts and new data center opportunities, though one big beautiful bill has no near-term material impact.
• Mark Chiplock discussed revenue growth, adjusted EBITDA, backlog growth, balance sheet strength, and cash flows, including $170 million in new project financing and positive cash generation.

Second quarter revenue grew 8% year-over-year, with projects revenue up 8%, energy asset revenue up 18%, and recurring O&M revenue steady. Adjusted EBITDA grew 24%. Total project backlog increased 16% to a record $5.1 billion, with contracted project backlog up 46% to $2.4 billion. Revenue contribution is diversified across projects, energy assets, and O&M, with Europe accounting for a significant portion of project backlog.

• Reaffirmed 2025 guidance, with total project backlog at $5.1 billion, contracted backlog at $2.4 billion, and total revenue visibility near $10 billion.
• Energy asset deployment guidance of 100-120 megawatts for the year, with a battery asset under construction and an RNG facility coming online.
• Confidence in continued demand for diverse energy solutions and strong backlog conversion.

• Policy and regulatory changes could impact business, though current environment is improved.
• Supply chain issues with equipment (transformers, turbines) and batteries, including Powin's bankruptcy affecting claims.
• Foreign entity of concern impacts on battery supply and tariffs.

Q: About cash generation and net leverage for the year?

A: Josh Baribeau says they're comfortable with leverage, EBITDA growth and project financing will help lower leverage but flexibility exists.

Q: Contracted backlog acceleration and margin profile?

A: George Sakellaris and Mark Chiplock explain contracted backlog growth due to market demand and disciplined project screening leading to improving margins.

Q: Data center permitting impact on Ameresco?

A: Nicole Bulgarino states Ameresco is well-positioned in data center energy supply with ongoing early-stage projects.

Q: Equipment supply impact on growth?

A: George Sakellaris notes tightness in some equipment but manageable, with strategies for smaller projects and existing orders.

Q: Europe strategy and acquisitions?

A: George Sakellaris mentions organic growth in Europe with a seasoned executive hired, and openness to acquisitions.

Q: Energy asset deployment guidance?

A: Josh Baribeau confirms 100-120 MW guidance, with late-stage projects and recent RNG facility COD supporting the number.

Q: Europe margin evolution?

A: George Sakellaris and Mark Chiplock state margins in Europe are improving as reputation and guidelines are established.

Q: Battery supply and tariffs?

A: Nicole Bulgarino discusses monitoring tariffs, strategic supplier planning, and contract adjustments to protect from impacts.

Q: Federal business outlook?

A: Nicole Bulgarino says federal business is in a better place with continued value in projects despite rescoping, as the administration becomes more familiar with the value proposition.

Q: SMR partnership and role?

A: Nicole Bulgarino explains Ameresco's role in collaborating with Terrestrial Energy for next-generation firm clean energy solutions, early in the process.