Ameresco, Inc. Q3 FY2025 earnings call

• Ameresco delivered strong financial results with growth across key metrics and significant business development achievements. - Industry demand driven by electrification, data center needs, rising utility rates, and grid instability. - New end markets like electric co-ops, industrials, and data centers present opportunities. - Business model flexibility in project, O&M, and energy asset offerings. - Total project backlog with energy infrastructure-related projects at nearly half, Firm Generation Energy Assets in construction/development, and batteries 41% of assets in development. - Recent wins include a 40-MW firm power plant for Hawaiian Electric, a 50-MW battery energy storage system for Nucor, and finalizing the Lemoore data center initiative with CyrusOne. - Proactively managed federal government shutdown with minimal expected impact on Q4 results.

Projects revenue grew 6%, with total project backlog reaching $5.1 billion and contracted project backlog up 33% to $2.5 billion. Energy asset revenue grew 6%, with total operating assets at 765 megawatts and net energy assets in development at 626 megawatts. Recurring O&M revenue increased 8%, with long-term O&M backlog at approximately $1.5 billion. Other revenue was lower year-over-year due to the divestiture of the AEG business. Gross margin improved to 16%.

• Reaffirming 2025 guidance ranges despite potential delays from federal shutdown not expected to materially affect Q4 results. - Target of placing 100 to 120 megawatts of additional energy assets into operation. - Long-term revenue visibility over $10 billion from project backlog, recurring O&M, and operating energy asset portfolios.

• Prolonged federal government shutdown could delay project award conversions and shift revenue timing. - Dependence on non-GAAP measures and potential differences from GAAP. - Supply chain issues, including potential tariffs or restrictions affecting battery procurement.

Q: About data center opportunity scope and timing.

A: Similar to Lemoore, large project, details being finalized, equity partner likely.

Q: About first data center project.

A: Similar to federal work, scale and quicker need, leveraging future opportunities.

Q: Differences in engineering for data centers.

A: Similar to federal mission-critical work, scale and speed differences.

Q: Battery procurement and tariffs.

A: Diversifying supply chain, safe harboring projects, cost of batteries coming down.

Q: Positioning for multiple projects like CyrusOne.

A: Increased staff, shifted resources from federal and Bright Canyon acquisition.

Q: Nuclear partner opportunity.

A: Microreactor technology, real opportunity but not immediate, related to recent Army and DOE announcements.