Ameresco, Inc. Q3 FY2024 earnings call

• Promotions of four key executives to President roles: Mike Bakas (Renewable Fuels), Nicole Bulgarino (Federal and Utility Infrastructure), Lou Maltezos (Central and Western USA and Canada), Peter Christakis (East USA, Greece, and Project Risk).
• Strong revenue and adjusted EBITDA growth: Revenue up 49%, adjusted EBITDA up 44% to $62.2 million. Added 42 megawatts of energy assets, total now 2,000 megawatts. Project backlog grew 22% to $4.5 billion, contracted backlog up 56% to $1.9 billion.
• Focus on energy efficiency, distributed generation, and cost savings projects in core markets like state/local governments, colleges, K-12 schools, and healthcare. Examples include a project for Columbia County, Oregon, addressing infrastructure upgrades.
• Emphasis on resiliency: Projects like 50-megawatt battery storage for Silicon Valley Power, 10-megawatt solar and 50-megawatt hour battery at Naval Weapons Station Seal Beach, and geothermal projects at Fort Johnson in Louisiana.

Ameresco's total revenue grew 49% to over $0.5 billion with each of the four business-lines experiencing double-digit growth. Projects business revenue grew nearly 60%, driven by strong execution and backlog conversion. Energy asset revenue increased 33% due to more operating assets, with 42 megawatts added this quarter, bringing total operating energy assets to 715 megawatts. O&M business revenue grew 25% with O&M backlog over $1.4 billion, up 15% from the prior year. Total backlog grew 22% to $4.5 billion, and contracted backlog increased 56% to a record $1.9 billion.

• Reaffirming full-year guidance with revenue and adjusted EBITDA growth of 27% and 35% respectively.
• Q4 expected to have strong revenue, better gross margin profile, and EBITDA margin improvement. EPS tied to tax benefits.
• Project margin expected to be consistent, with normalization for SCE and mix of European projects influencing margin slightly.

• Changes in administration potentially affecting incentives and federal contract volumes.
• Supply chain issues, such as bottlenecks in obtaining transformers for energy projects.
• Interconnection delays for energy assets with utilities impacting the timing of asset deployments.

Q: Federal contract delays due to administration change.

A: Nicole Bulgarino stated push to finish projects in Q4 of current administration, with active pipeline and no expected slowdown into next administration for ongoing projects.

Q: Supply chain and labor constraints impact on projects.

A: George Sakellaris mentioned stabilized but still present bottlenecks in labor and transformers for energy projects.

Q: Energy asset deployments and IRA uncertainty impact.

A: George Sakellaris and Mike Bakas noted no major issues with federal project incentives, bipartisan support for battery ITC, and IRA unlikely to have material negative impact, with some possible modifications.