Executive Summary

Q2 2024 operating revenues were $52.5M (+13% y/y) with adjusted EBITDA of $31.2M and margin of 59%; GAAP net income was $33.1M, driven largely by a non-cash gain from remeasurement of alignment shares and a one-time tax benefit .
Guidance was lowered: FY24 revenue to $196–$201M (from $200–$222M) and adjusted EBITDA to $111–$115M (from $115–$135M); the 3-year CAGR targets (MW: 20–30%, revenue/Adj. EBITDA: 20–25%) were reaffirmed .
Management cited slower-than-expected new build interconnections at utilities and deferred recognition of community solar credits (~$4M) into 2H as drivers of cadence and revenue timing; H2 recognition expected as subscriptions ramp and seasonality normalizes .
Portfolio scaled to ~990 MW across 25 states, generation reached 364,000 MWh, and variable-rate PPAs comprise 54% of contracts—providing tailwinds as retail utility rates rise .

What Went Well and What Went Wrong

What Went Well

Continued scale: portfolio reached ~990 MW and Q2 generation increased to 364,000 MWh (vs. 262,000 MWh y/y), supporting revenue growth and long-term asset base expansion .
Pricing tailwinds: 54% of PPAs are variable-rate, positioning Altus to benefit as prevailing utility rates increase; management emphasized this as a structural tailwind .
Strategic focus and asset optimization: CEO highlighted reprioritization of resources (technology/analytics) and “redevelopment” opportunities on acquired assets (e.g., 8.5 MW Hamilton, NJ), enhancing long-term returns .

What Went Wrong

Slower ramp in new builds: utility interconnection delays pushed projects to the right, contributing to reduced FY24 guidance ranges (revenue and adjusted EBITDA) .
Deferred revenue timing: community solar credits exceeded current subscription levels, deferring ~$4M of recognized revenue from Q2 into 2H 2024 .
Margin compression vs. prior-year quarter: adjusted EBITDA margin fell to 59% from 66% in Q2 2023 on higher operating and G&A expenses required to support growth .

Financial Results

Key Financials vs Prior Periods and Estimates

Metric	Q2 2023	Q1 2024	Q2 2024
Revenue ($USD Millions)	$46.513	$40.659	$52.460
Adjusted EBITDA ($USD Millions)	$30.641	$19.717	$31.151
Adjusted EBITDA Margin (%)	66%	48%	59%
Net Income ($USD Millions)	$3.370	$4.055	$33.149
Diluted EPS ($USD)	$0.04	$0.05	$0.23
Generation (MWh)	262,000	210,000	364,000

Note: Wall Street consensus (S&P Global) for Q2 2024 was unavailable, so beat/miss vs estimates cannot be assessed.

KPIs and Operating Metrics

KPI	Q4 2023 (FY end)	Q1 2024	Q2 2024
Portfolio MW (end of period)	896	981	990
Community Solar Subscribers	~—	>24,000	>25,000
Contract Mix (% of MWs)	Variable 53% / Fixed 30% / Fixed+Esc. 17%	—	Variable 54% / Fixed 28% / Fixed+Esc. 18%
Cash and Equivalents ($M)	$160.817	$173.266	$78.379
Cash, Equivalents & Restricted ($M)	$218.927	$203.513	$92.278

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY 2024	$200–$222	$196–$201	Lowered
Adjusted EBITDA ($USD Millions)	FY 2024	$115–$135	$111–$115	Lowered
MW CAGR	3-Year (2024–2026)	20–30%	20–30%	Maintained
Revenue & Adjusted EBITDA CAGR	3-Year (2024–2026)	20–25%	20–25%	Maintained

Drivers of changes: utility interconnection delays and slightly slower cadence of incremental MW additions; deferral of community solar revenue recognition into 2H .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2023 and Q1 2024)	Current Period (Q2 2024)	Trend
AI/Tech-driven power demand	Management framed AI/EV/crypto/hydrogen as secular demand drivers and highlighted positive exposure via variable-rate PPAs .	Reiterated long-term demand tailwinds strengthening the case for commercial-scale solar .	Consistent positive tailwind.
Utility interconnection delays	Not emphasized in Q4 materials; cadence discussed broadly in Q1 with pipeline review .	Explicitly cited as key reason projects moved right, impacting FY24 cadence and guidance .	Worsened near term (timing headwind).
Community solar execution	Q1: rapid growth (+4,000 customers to >24k) and pipeline in MD/IL .	Credits exceeded subscriptions; ~$4M revenue deferred to Q3–Q4 as onboarding scales .	Growing, with timing mismatch resolving in 2H.
Enterprise engagement (CBRE)	Q1: Programmatic deals; slower negotiation with large enterprises; pipeline under review .	Shift from top-down to targeted market-specific approach; CBRE partnership repositioned; Brett Phillips to lead early-stage client engagement .	Strategic pivot to increase velocity.
Asset redevelopment opportunity	Q4/Q1: Focus on portfolio scale and ARR .	Highlighted example (8.5 MW Hamilton, NJ) and broader plan to optimize incumbent interconnections .	Increasing focus on “self-help” value.
Financing capacity	Q4: $200M construction facility; robust term funding and cash .	Q2: $92.3M cash & restricted at period end; capacity on facilities; revolver repaid for efficiency .	Adequate to fund growth.

Management Commentary

“We continued to prudently scale our portfolio and capitalize on long-term growth opportunities…increase our revenues and adjusted EBITDA four-fold, while building the largest nationwide portfolio in the commercial solar market.” — CEO Gregg Felton .
“We are revising our previously stated 2024 guidance…to $196–$201M of revenue and $111–$115M of adjusted EBITDA…while…reaffirm[ing]…three-year guidance of 20–30% CAGR on megawatts and 20–25% CAGR on revenue and adjusted EBITDA.” — CFO Dustin Weber .
“Our current portfolio has 54% of our PPAs at a floating rate. So, as the prevailing utility increases those rates, we stand to benefit.” — CFO Dustin Weber .
“Given the localized nature of our projects, the…top-down strategy…was not the most efficient…Going forward…we will refine our focus to target the intersection of CBRE’s clients with Altus’ strength in several U.S. markets.” — CEO Gregg Felton .
“We purchased [Hamilton, NJ]…with the specific intention of repositioning the site…as we believe there’s additional value…Imagine similar opportunities across our portfolio of nearly 500 operating assets.” — CEO Gregg Felton .

Q&A Highlights

Guidance and cadence: Projects are pushed “to the right” mainly due to utility interconnection delays; management expects slightly slower H2 ramp than prior assumptions and lowered FY24 guidance accordingly .
Community solar accounting: ~$4M in credits generated in Q2 expected to be monetized/recognized in Q3–Q4 as subscriptions catch up and production seasonality normalizes .
Mix of growth: Historically ~75% acquisitions of operating assets and ~25% new builds; acquisition pipeline robust amid market consolidation and financing challenges for smaller developers .
One-time tax item: ~$21M tax benefit in Q2 tied to non-cash alignment share remeasurement; not related to NOLs .
Redevelopment “self-help”: Acquiring and optimizing existing assets mitigates interconnection risks versus new builds; seen as a captive opportunity within the portfolio .

Estimates Context

S&P Global consensus estimates for Q2 2024 (EPS, revenue, EBITDA) were unavailable for AMPS at the time of this analysis; as a result, we cannot assess beats/misses vs Street for the quarter (S&P Global data unavailable).
Given the guidance revision and timing headwinds (interconnection delays, community solar credit deferral), Street models may need to lower FY24 top-line and adjusted EBITDA assumptions while shifting revenue recognition to H2 and modestly trimming margins due to higher operating/G&A expenses .

Key Takeaways for Investors

Guidance reset reflects timing headwinds, not demand or asset quality; management reaffirmed multi-year CAGRs and highlighted robust acquisition pipeline, supporting the medium-term growth thesis .
Variable-rate exposure (54% of PPAs) is a structural asset that can drive revenue upside as retail utility rates rise, creating embedded operating leverage without incremental capex .
Near-term catalysts: monetization of deferred community solar credits (~$4M) in Q3–Q4 and onboarding of targeted market-specific projects as the new go-to-market approach takes hold .
Asset redevelopment strategy (e.g., Hamilton, NJ) and incumbency at interconnected sites offer self-help levers to enhance returns while bypassing some interconnection bottlenecks .
Financing runway remains adequate: $92.3M cash & restricted at Q2-end, plus construction facility and revolver capacity; no equity financing indicated in prior materials, supporting disciplined growth funding .
Watch execution velocity and utility timelines: Interconnection delays are the key operational swing factor; expect quarterly lumpiness despite confident 3-year growth trajectory .
Non-GAAP vs GAAP: Q2 GAAP net income benefitted from alignment shares remeasurement and a one-time tax benefit; adjusted EBITDA is the better metric for underlying performance and margin trends .

Altus Power, Inc. (AMPS)·Q2 2024 Earnings Summary