• Annual Revenue Growth: 29%
• Annual Adjusted EBITDA Growth: 38%
• Fourth-Quarter Revenue Growth: 21% to $533 million
• Fourth-Quarter Adjusted EBITDA Growth: 59% to $87.2 million
• Project Backlog Growth: 24% year over year to $4.8 billion
• Contracted Backlog Increase: 92% year over year
• Energy Assets Added in 2024: 241 megawatts
• Total Operating Energy Assets: 731 megawatts
• Gross Margin for the Quarter: 12.5%
• Operating Income: $44.7 million, an increase of 31%
• Net Income Attributable to Common Shareholders: $37.1 million, a 15% increase
• Cash Position at Quarter End: $109 million
• Total Corporate Debt: Reduced to $243 million
• Adjusted Cash from Operations for the Year: $282 million
• 2025 Revenue Guidance: $1.9 billion
• 2025 Adjusted EBITDA Guidance: $235 million
• Expected 2025 Energy Assets in Service: 100 to 120 megawatts
• Expected 2025 CapEx: $350 million to $400 million

• Warning! GuruFocus has detected 7 Warning Signs with AMRC.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ameresco Inc (NYSE:AMRC) reported a strong end to 2024 with annual revenue and adjusted EBITDA growth of 29% and 38%, respectively.
• The company achieved a record project backlog, with a 92% year-over-year increase in contracted backlog, reaching $4.8 billion.
• Ameresco Inc (NYSE:AMRC) successfully placed a record 241 megawatts of energy assets into operation in 2024, with a total of 731 megawatts now operational.
• The sale of the non-core AEG business contributed positively to the fourth-quarter results, enhancing revenue and adjusted EBITDA growth.
• The company has a diversified and resilient business model, with long-term contracts in its Energy Asset and O&M businesses providing stable revenue streams.

Negative Points

• Ameresco Inc (NYSE:AMRC) faced challenges from two large legacy projects, resulting in significant cost overruns and impacting gross profit by approximately $38 million for the full year.
• The gross margin for the fourth quarter was significantly lower than expected at 12.5%, due to unanticipated cost overruns.
• The company experienced a cancellation and pauses on federal projects, potentially leading to additional delays due to changes in the federal workforce.
• D3 RIN prices weakened at the end of 2024, affecting the company's RNG business, with potential impacts from the EPA's proposed rule changes.
• The guidance for 2025 reflects a cautious approach due to the unpredictable political and regulatory environment, with potential impacts from federal policy changes and project delays.

Q & A Highlights

Q: Can you discuss the impact of the current administration on your federal projects and customer conversations since January? A: George Sakellaris, CEO, noted that federal sector activity remains strong, with recent RFPs being issued. Nicole Bulgarino, EVP, added that while there is some slowness on the civilian side, particularly with GSA, the Department of Defense remains active, and utility business RFPs are ongoing due to energy needs.

Q: Are there any expected challenges in deploying energy assets throughout 2025? A: George Sakellaris, CEO, mentioned potential supply chain issues, such as transformer availability and utility interconnections, but overall, the development backlog is strong. Financial markets remain favorable, although there may be minor disruptions due to the new administration.

Q: What is causing the pause in ESPC projects, and how might this affect future business? A: Nicole Bulgarino, EVP, explained that the pause is mainly due to GSA evaluating which buildings to sell. This is expected to be specific to GSA, and the administration still values ESPCs. George Sakellaris, CEO, added that projects might need rescoping, but opportunities remain.

Q: How does the 2025 guidance reflect potential federal revenue and project execution? A: Mark Chiplock, CFO, clarified that the guidance includes federal revenue, with $1.1 billion of 12-month contracted backlog providing visibility. The implementation period for projects can extend over 12 to 36 months, especially for federal projects, affecting immediate revenue recognition.

Q: What are the assumptions for RNG plant contributions in 2025, considering potential regulatory delays? A: Michael Bakas, EVP, stated that despite changes in EPA certification rules, they have been able to sell environmental attributes at healthy rates while awaiting certification. Certification has been timely, and the administration appears supportive of biofuels, minimizing expected delays.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.