Third Quarter 2024 Financial Highlights:
- Revenues of $500.9 million
- Net income attributable to common shareholders of $17.6 million
- GAAP EPS of $0.33
- Non-GAAP EPS of $0.32
- Adjusted EBITDA of $62.2 million
Ameresco, Inc. (NYSE:AMRC) announced financial results for the fiscal quarter ended September 30, 2024. The Company also furnished supplemental information in conjunction with this press release in a Current Report on Form 8-K. The supplemental information, which includes Non-GAAP financial measures, has been posted to the “Investors” section of the Company’s website at www.ameresco.com. Reconciliations of Non-GAAP measures to the appropriate GAAP measures are included herein. All financial result comparisons made are against the prior year period unless otherwise noted.
CEO George Sakellaris commented, “Our team continued to deliver excellent results with year-on-year quarterly revenue growth of 49% and record Adjusted EBITDA of over $62 million, growing 44% in the third quarter, reflecting strong demand for Ameresco’s unique blend of services across our customer base. Each of our four business lines achieved strong year-on-year growth, led by Projects, Energy Assets and O&M, where revenues increased at substantial double-digit rates. At the same time, we brought over 40MWe of Energy Assets into operation, resulting in a year-to-date total of 209 MWe – a record number for Ameresco and already above our full year guidance of 200MWe. New business activity remained robust with our total Project Backlog growing to $4.5 billion at the end of the quarter, an increase of 22% from last year. Importantly, our continued focus on contract conversion helped drive a 56% increase in contracted backlog to a record $1.9 billion. We also had a very strong quarter with our recurring O&M business adding over $180 million in additional backlog versus last year."
Third Quarter Financial Results
Total revenue increased 49.4% to $500.9 million with significant growth across all four of our business lines. Projects revenue grew 58.8%, as our focus on execution and conversion of our backlog continued to yield positive results. Energy Assets revenue grew an impressive 33.4% driven by growth in operating assets placed in service. O&M revenue increased 24.6% reflecting a solid attachment rate to our growing projects business and strong execution on our contracts. Other revenue increased 9.8%. Gross margin of 15.4% reflects a larger contribution from lower-margin projects, and additional costs associated with the SCE projects as previously discussed during prior periods. SG&A decreased slightly contributing to improved operating leverage.
Net income attributable to common shareholders was $17.6 million compared to $21.3 million during the same period last year impacted by higher interest-related and depreciation expenses. Those interest costs included a $3.7 million non-cash negative adjustment to mark certain interest rate derivatives to market compared to a $3.0 million favorable adjustment last year. Additionally, the results for the third quarter last year included a discrete tax benefit of $7.2 million related to a prior year Section 179D tax deduction. GAAP and Non-GAAP EPS of $0.33 and $0.32, respectively.
Adjusted EBITDA of $62.2 million, representing our single largest quarter, increased 43.6%.
The Company ended the quarter with $113.5 million in cash. Our total corporate debt including our subordinated debt, term loans and drawn amounts on our revolving line of credit was $272.5 million, with our corporate leverage ratio as calculated under our Sr. Secured Credit Facility continued to decline to 2.8X, below our 3.5x covenant level. During the quarter we successfully executed approximately $237.0 million in project financing commitments to fund the continued growth of our Energy Asset business, of which we received net proceeds of $57.0 million. Our Energy Asset Debt was $1.4 billion with an Energy Debt Advance rate of 74% on the Energy Asset Book Value. Our Adjusted Cash from Operations during the quarter was $34.4 million. Our 8-quarter rolling average Adjusted Cash from Operations was $39.0 million.
- Ameresco’s Assets in Development ended the quarter at 595 MWe. After subtracting Ameresco’s partners’ minority interests, Ameresco’s owned capacity of Assets in Development at quarter end was 589 MWe.
- Ameresco brought 42 MWe of Energy Assets into operation, including the 11.7 MWe Keller Canyon RNG plant and 27 MWe battery storage at the remaining 3 United Power sites.
Subsequent Events
Today Ameresco announced the promotion of four key leaders at Ameresco: Michael Bakas, Nicole Bulgarino, Peter Christakis, and Louis Maltezos. Over the past few years, the Company has experienced significant growth, necessitating a management structure that is both visionary and resilient to drive continued profitable growth.
- Michael Bakas has been appointed President - Renewable Fuels. Michael will continue to focus on the expansion of our renewable fuels asset class, which includes one of the most robust pipelines of plants in the country.
- Nicole Bulgarino has been appointed President - Federal and Utility Infrastructure. In this role, Nicole will continue to oversee our expanding Federal business while also driving the development of emerging utility infrastructure opportunities.
- Peter Christakis has been appointed President - East USA, Greece & Project Risk. In this capacity, Peter will manage our East region while also expanding our pipeline of solar projects. Additionally, Peter will lead our centralized procurement and corporate risk initiatives to provide significant corporate support across the organization.
- Louis Maltezos has been appointed President – Central & Western USA, Canada. Louis will continue unifying these regions and concentrating on our core markets. He and his team will also work on expanding our Smart Solutions portfolio by promoting new building controls, efficiency initiatives, and advanced water metering offerings across our customer base.
Summary and Outlook
“With our record project backlog, expanding portfolio of operating Energy Assets and growing base of long-term O&M contracts, Ameresco is very well positioned for future growth. As we look ahead to 2025, we believe the need for our smart solutions that provide energy resiliency, cost savings and infrastructure upgrades will continue to be in very high demand. We have all the elements in place to achieve another year of impressive growth in revenue and faster growth in profitability while continuing to capture growing business opportunities,” Mr. Sakellaris concluded.
Ameresco is reaffirming its full year 2024 guidance which is included in the table below. Our guidance range reflects revenue and Adjusted EBITDA growth of 27% and 35%, respectively, at the midpoints. While we expect higher Interest Expense and Other in the range of $70 million to $75 million, we are also maintaining our Non-GAAP EPS guidance, largely driven by our estimated annual tax benefit rate.
