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Ameresco, Inc. (AMRC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered double‑digit top-line and EBITDA growth: revenue $352.8M (+18% YoY) and Adjusted EBITDA $40.6M (+32% YoY); Non‑GAAP EPS was ($0.11) and GAAP EPS ($0.10) .
  • Clear beat vs S&P Global consensus: revenue $352.8M vs $310.9M*, EPS ($0.11) vs ($0.26), Adjusted EBITDA $40.6M vs $35.3M; gross margin was 14.7% and within expectations .
  • Backlog and visibility strengthened: contracted project backlog $2.6B (+~80% YoY), total project backlog $4.9B (+22% YoY), total revenue visibility ~$9.6B; operating energy assets reached 742 MWe .
  • FY2025 guidance reaffirmed (revenue $1.85–$1.95B; Adj. EBITDA $225–$245M) and Q2 revenue outlook set at $400–$425M; management cited limited near‑term tariff exposure and federal contract “unpause/rescope” as key positive catalysts .

What Went Well and What Went Wrong

What Went Well

  • Strong execution across Projects and Energy Assets: Projects revenue +23% to $251.5M; Energy Assets revenue +31% to $56.7M; Adjusted EBITDA +32% to $40.6M .
  • Contract conversion accelerated and backlog expanded: $334M of awards converted to contracts; contracted backlog $2.6B (+~80% YoY) driving total project backlog to $4.9B (+22% YoY) .
  • Management visibility/confidence: “We have not encountered any additional cancellations or delays in our Federal contracts… those that we highlighted… have now been ‘unpaused’ or modified and are progressing” (CEO George Sakellaris) and reiterated: “we have limited near‑term [tariff] exposure” .

What Went Wrong

  • Bottom‑line loss and softer gross margin: Net loss attributable to common shareholders ($5.5M); gross margin 14.7% slightly impacted by lower‑margin European EPC mix .
  • Adjusted cash from operations was $1.4M as working capital movements offset ESPC proceeds in the quarter .
  • “Other” revenue fell to $19.8M due to year‑end divestiture of AEG; management reminded this was strategic focus realignment (AEG divested Jan 8) .

Financial Results

Quarter-over-Quarter Performance

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$500.9 $532.7 $352.8
GAAP EPS ($)$0.33 $0.70 ($0.10)
Non-GAAP EPS ($)$0.32 $0.88 ($0.11)
Gross Margin %15.4% 12.5% 14.7%
Adjusted EBITDA ($USD Millions)$62.2 $87.2 $40.6
Adjusted EBITDA Margin %12.4% 16.4% 11.5%

Year-over-Year (Q1)

MetricQ1 2024Q1 2025
Revenue ($USD Millions)$298.4 $352.8
GAAP EPS ($)($0.06) ($0.10)
Non-GAAP EPS ($)($0.10) ($0.11)
Adjusted EBITDA ($USD Millions)$30.8 $40.6
Gross Profit ($USD Millions)$47.0 $51.9

Results vs S&P Global Consensus (Q1 2025)

MetricConsensusActual
Revenue ($USD Millions)$310.9*$352.8
Adjusted EBITDA ($USD Millions)$35.3*$40.6
Non-GAAP EPS ($)($0.26)*($0.11)

Values with an asterisk (*) are retrieved from S&P Global.

Segment Breakdown (Q1)

SegmentRevenue ($M) Q1’24Revenue ($M) Q1’25Net Income ($M) Q1’24Net Income ($M) Q1’25Adj. EBITDA ($M) Q1’24Adj. EBITDA ($M) Q1’25
Projects$204.3 $251.5 ($6.0) $0.4 $3.2 $8.7
Energy Assets$43.2 $56.7 ($0.5) ($5.9) $21.2 $30.1
O&M$25.3 $24.8 $3.7 $0.7 $4.8 $1.7
Other$25.6 $19.8 ($0.1) ($0.7) $1.6 $0.1
Total$298.4 $352.8 ($2.9) ($5.5) $30.8 $40.6

KPIs and Balance Sheet Snapshot

KPIDec 31, 2024Mar 31, 2025
Contracted Project Backlog ($B)$2.544 $2.596
Total Project Backlog ($B)$4.818 $4.904
O&M Revenue Backlog ($B)$1.378 $1.372
Energy Asset Visibility ($B)$3.325 $3.334
Operating Energy Assets (MWe)731 742
Net Assets in Development (MWe)637 618
Corporate Debt ($M)$243.1 $270.0
Energy Asset Debt ($M)$1,390.2 $1,446.8
Energy Debt Advance Rate (%)73% 74%
Adjusted Cash from Operations ($M)$53.8 (Q4) $1.4 (Q1)
Unrestricted Cash ($M)$108.5 $71.6

Guidance Changes

MetricPeriodPrevious Guidance (Feb 27, 2025)Current Guidance (May 5, 2025)Change
Revenue ($B)FY 2025$1.85–$1.95 $1.85–$1.95 Maintained
Gross Margin (%)FY 202515.5–16.0 15.5–16.0 Maintained
Adjusted EBITDA ($M)FY 2025$225–$245 $225–$245 Maintained
D&A ($M)FY 2025$103–$105 $103–$105 Maintained
Interest & Other ($M)FY 2025$85–$90 $85–$90 Maintained
Effective Tax Rate (%)FY 2025(50) – (35) (50) – (35) Maintained
Income Attrib. to NCI ($M)FY 2025(5) – (8) (5) – (8) Maintained
Non‑GAAP EPS ($)FY 2025$0.70–$0.90 $0.70–$0.90 Maintained
Revenue ($M)Q2 2025—$400–$425 New quarterly shaping
Accounting NoteFY 2025Potential sale‑leaseback change could lower interest/other by ~$20M if implemented; excluded from guide Excluded from guide; under assessment Maintained stance

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Federal contracts cadenceHealthy RFPs; backlog growth; SCE costs noted One cancellation; two pauses; anticipate delays; ESPC structure alignment with admin priorities “Unpaused/modified/rescoped” contracts; no new cancellations; federal RFPs increasing; ~30% of backlog federal, <30% of 2025 project revenue Improving clarity; cautious optimism
Tariffs & supply chainSCE cost impacts; lower‑margin project mix Preparing for potential policy/tariff changes; diversified supply chain Limited near‑term exposure; pre‑purchased equipment; change‑in‑law/pass‑through language added; diversify supply/domestic sourcing Risk mitigated; contract protections
RINs & hedging—Less than 30% 2025 RIN exposure merchant; dynamic hedging Remaining 2025 RIN exposure ~20%; hedging strategy active Reduced merchant exposure
IRA credits (ITC/45Z)—~$100M ITCs recognized/sold; ~$200M safe‑harbored; 45Z annual benefit ~$8–$10M expected Safe‑harbored ITC for ~¾ of pipeline; limited short‑term impact if IRA changes Strengthens cash/tax planning
Europe & Canada contributionRecord energy assets placed; backlog expansion $250M FY24 Europe revenue; JV structure reduces EPS via NCI Strong performance in Europe & Canada in Q1; European EPC mix diluted GM Growing, with margin mix effect
Asset deployment cadence209 MWe YTD by Q3 241 MWe placed in 2024; expect 100–120 MWe in 2025 11 MWe brought online in Q1; transformer/pipeline interconnections can affect timing Normalizing, logistic‑sensitive

Management Commentary

  • “The first quarter represented an excellent start to the year… contracted backlog stood at $2.6 billion… total project backlog to $4.9 billion… Revenue visibility… almost $10 billion” — CEO George Sakellaris .
  • “We have not encountered any additional cancellations or delays in our Federal contracts… [previously paused/cancelled] have now been ‘unpaused’ or modified and are progressing” .
  • “Rapidly changing tariff dynamics… we believe that we have limited near‑term exposure… much of the equipment… already purchased and… shielding us from tariff and price increases” .
  • CFO: “Gross margin of 14.7%… reflecting a greater mix of revenue from large European EPC contracts… [but] feel pretty good about the margin range for the rest of the year” .

Q&A Highlights

  • Federal pipeline and delays: Management clarified the previously cancelled contract was rescoped and expected to return; two paused contracts restarted with minor scope haircuts; broader federal activity remains strong with budget‑neutral ESPCs aligned to priorities .
  • Margin shaping: Q1 gross margin below full‑year guide due to European EPC mix; confidence in achieving 15.5–16.0% full‑year gross margin range .
  • Tariff pass‑throughs: Contracts increasingly include change‑in‑law/tariff pass‑through provisions; diversified procurement and pre‑purchases mitigate exposure .
  • RIN hedging and RNG economics: Less than ~20% of 2025 RIN exposure remains unhedged; rigorous investment committee stress‑testing for RNG projects; expectation that EPA certifications proceed without major delays .
  • Asset geography/procurement: Energy asset development pipeline predominantly U.S.; batteries/modules sourced from bankable global suppliers; emphasis on fair customer adjustments under uncertainty .

Estimates Context

  • Q1 2025 results beat consensus: revenue $352.8M vs $310.9M*, Adjusted EBITDA $40.6M vs $35.3M*, Non‑GAAP EPS ($0.11) vs ($0.26)* .
  • Company guided Q2 revenue to $400–$425M, shaping expectations for sequential growth and potentially supporting upward revisions to near‑term revenue forecasts .
  • Street forward baseline shows healthy H2 cadence consistent with company commentary; FY guide reaffirmation suggests limited need for major estimate changes absent macro/regulatory shifts .

Values with an asterisk (*) are retrieved from S&P Global.

Key Takeaways for Investors

  • Backlog conversion is a core earnings driver: contracted backlog ~$2.6B and total project backlog ~$4.9B underpin multi‑quarter revenue and EBITDA visibility .
  • Recurring revenue lines remain critical: 78% of Adjusted EBITDA from recurring businesses; helps smooth project‑mix volatility .
  • Tariff risk is contractually mitigated and operationally buffered; limited near‑term exposure via pre‑purchased equipment, pass‑throughs, and diversified supply .
  • Federal program clarity improving; “unpaused/rescoped” contracts and rising RFP flow support project cadence into 2H25 where ~60% of annual revenue is expected .
  • Cash conversion was soft in Q1; watch working capital dynamics and ESPC proceeds as catalysts for stronger adjusted operating cash flow in subsequent quarters .
  • Margin mix watch: increased European EPC contribution can dilute near‑term GM; management reaffirmed full‑year GM range, implying offset from higher‑margin lines and cost control .
  • Near‑term trading: Strong beat and Q2 guide ($400–$425M) are positive catalysts; medium‑term thesis rests on backlog quality, recurring EBITDA, IRA credits/ITC monetization, and expanding asset base .