Ameresco's Q3 2025: Contradictions Emerge on Battery Procurement, Data Center Projects, European Strategy, and Federal Focus

Date of Call: None provided

Financials Results

• Revenue: Revenue grew 5% year over year (no total dollar amount provided)
• EPS: $0.35 per share (GAAP and non-GAAP)
• Gross Margin: 16%, improved sequentially and compared to prior year

Guidance:

• Reaffirming 2025 guidance ranges.
• Do not expect a prolonged federal shutdown to have a material impact on Q4, though it could shift some revenue timing.
• Remain on track to place 100–120 MW of additional energy assets into operation this year.
• Long-term targets reiterated: ~10% revenue growth and ~20% adjusted EBITDA growth.

Business Commentary:

• Strong Financial Performance Across Key Metrics:
• Ameresco delivered solid results, with revenue growing 5% year over year and adjusted EBITDA increasing 13% from the prior year.

• Growth was supported by strong execution across the project portfolio, sustained momentum in the energy asset segment, and reliable recurring income from O&M business.

• Expansion in Energy Infrastructure and Data Center Markets:

• Energy infrastructure-related projects accounted for nearly half of Ameresco's total project backlog.

• The company saw a surge in large-scale opportunities, particularly in data centers, driven by increasing demand for resilient firm power and electrification.

• Significant Business Development and Backlog Growth:

• Ameresco secured $450 million in new project awards and converted $467 million of awards into signed contracts.

• The total project backlog increased to $5.1 billion, with contracted project backlog up 33% to $2.5 billion.

• Energy Asset Growth and Diversification:

• Ameresco's net energy assets in development grew to 626 megawatts, with 16 megawatts added during the quarter.
• The increase in energy assets is attributed to the growth of Ameresco's operating assets portfolio and expansion into firm generation energy assets.

Sentiment Analysis:

Overall Tone: Positive

• Management: "another quarter of excellent execution... delivered strong financial results with growth across our key metrics." Revenue grew 5% YOY; adjusted EBITDA up 13% to $70.4M; gross margin improved to 16%. Backlogs expanding: total project backlog $5.1B and contracted backlog up 33% to $2.5B.

Q&A:

• Question from Noah Kaye (Oppenheimer & Co.): Can you frame the data center opportunity—are scopes similar to Lemoore where Ameresco provides energy infrastructure, what other scopes exist, and timing/size of Ameresco/partner capital commitments?
  Response: Lemoore can scale up to ~350 MW; Ameresco expects to bring in an equity partner for the large CapEx, details not yet disclosed; supplemental slides note development value conservatively treated (~10% reference) and more details will be provided when ready.

• Question from Eric Stine (Craig-Hallum): Given timing of the announcement, what has the Lemoore project meant for pipeline development and how should we view cadence/guidance into Q4 given federal exposure and recent shutdowns?
  Response: Lemoore serves as an anchor and replicable model; pipeline is building from similar opportunities; federal work is ~20% of business so shutdown timing risk is limited and management is reaffirming realistic Q4 guidance.

• Question from Ben Kallo (Baird): As you do more data-center work, are there engineering/construction differences or greater resource/skill needs vs. prior work, and how are you addressing battery procurement/supply-chain risks as storage becomes a larger backlog component?
  Response: Engineering for data centers is similar to prior mission-critical federal work (main differences are scale and speed); on batteries the company is diversifying supply chains, implementing safe-harboring where possible, and expects falling battery costs to help hedge risks.

• Question from Dushant Eilani (Jefferies): How does the data-center opportunity and storage buildout affect your ability to get back to long-term 10% revenue / 20% EBITDA targets, and are margins expected to differ on these projects?
  Response: Management views data-center demand as a tailwind to restore long-term targets over a 3–5 year cycle; targets are multi-year guidelines; margins are expected to be in line with corporate averages (mix of asset and project revenues).

• Question from Ryan Pfingst (B. Riley): Operationally, are you positioned to support multiple large data-center projects concurrently, and does the new nuclear partnership (TerraPower/AvadaM) represent nearer-term work (2026/2027)?
  Response: Ameresco has organized dedicated units, shifted and added staff (development, construction, procurement, engineering) and leveraged acquisitions to scale; nuclear partnerships are real opportunities but likely multi-year and not expected to produce major work by 2026–2027.

Contradiction Point 1

Battery Procurement and Price Impact

It involves the company's strategy and expectations regarding battery procurement and pricing, which directly impact operational costs and project economics.

Are there differences in engineering or construction for data centers compared to prior projects? Are there differences in battery procurement? - Ben Kallo (Baird)

2025Q3: Battery procurement has been diversified to avoid tariff restrictions, and we expect cost reductions to naturally hedge against potential impacts. - Nicole Bulgarino(CMO)

Can you address the availability and cost of batteries amid supply chain disruptions? - Benjamin Joseph Kallo (Baird)

2025Q2: We are closely monitoring foreign entity concerns and tariffs, adjusting contracts to manage potential price impacts. We expect to secure batteries through existing contracts and strategic planning. - Nicole Allen Bulgarino(CMO)

Contradiction Point 2

Data Center Opportunity and Backlog

It involves the company's assessment of the data center opportunity and the growth trajectory of their backlog, which affects financial forecasts and market expectations.

Can you outline the opportunity set for data center projects beyond federal government to other customers? How should we expect these projects to convert into orders? - Noah Kaye (Oppenheimer & Co.)

2025Q3: Our focus is on energy infrastructure for data centers, providing power solutions similar to what we are doing with federal customers. We have a strong pipeline extending beyond federal government to other customers, with projects of similar scope to Lemoore. - George Sakellaris(CEO), Mark Chiplock(CFO)

How will improved data center permitting affect Ameresco? - George Gianarikas (Canaccord Genuity)

2025Q2: We are well-positioned to provide energy infrastructure solutions for data centers due to expertise gained with federal clients. We have several projects in early stages and are excited about the opportunities this presents. - Nicole Allen Bulgarino(CMO)

Contradiction Point 3

European Revenue and Growth Strategy

It involves the company's strategic focus and growth expectations in Europe, which impacts regional revenue and market penetration.

How do you plan to achieve a high teens to 20% EBITDA CAGR through the data center opportunity? How will your business grow in the coming years? - Julian (Jefferies)

2025Q3: We are focusing on organic growth and have hired an executive to lead European expansion. Our strategy includes hiring key personnel and organic growth, with consideration for strategic acquisitions. Battery storage is an emerging opportunity that we're pursuing. - George P. Sakellaris(CEO)

What is Ameresco's strategy for expanding operations in Europe? - George Gianarikas (Canaccord Genuity)

2025Q2: We are focusing on organic growth and have hired an executive to lead European expansion. Our strategy includes hiring key personnel and organic growth, with consideration for strategic acquisitions. Battery storage is an emerging opportunity that we're pursuing. - George P. Sakellaris(CEO)

Contradiction Point 4

Data Center Opportunity and Project Timing

It involves differing perspectives on the timeline and project flow for data center opportunities, which are crucial for Ameresco's growth strategy and investor expectations.

What is the opportunity for data center projects beyond the federal government to other customers? What is the timeline for these projects to result in orders? - Noah Kaye (Oppenheimer & Co.)

2025Q3: The first project is expected to be finalized soon, with CapEx figures to be disclosed later. The project is large, with potential assets worth 350 MW. - George Sakellaris(CEO)

Can you explain the factors behind the improved federal business visibility and the nature of new RFPs? - Noah Kaye (Oppenheimer)

2025Q1: The company believes we are going to close a number of transactions that were put on hold during the second half of last year. It's also a project that I think is trending towards, we're very positive on the Lemoore type project. We expect to see those type of projects in Hawaii. - George Sakellaris(CEO)

Contradiction Point 5

Federal Government Focus and Project Nature

It highlights a shift in focus and urgency regarding federal government projects, impacting Ameresco's project pipeline and strategic direction.

Can you outline the opportunities for data center projects outside the federal government, including other customers? What's the timeline for these projects to convert into orders? - Noah Kaye (Oppenheimer & Co.)

2025Q3: Our focus is on energy infrastructure for data centers, providing power solutions similar to what we are doing with federal customers. - George Sakellaris(CEO)

What caused the federal business visibility improvements and the nature of new RFPs you're seeing? - Noah Kaye (Oppenheimer)

2025Q1: The federal government is increasingly focusing on resiliency and energy infrastructure projects, with a significant number of RFPs in these areas. - George Sakellaris(CEO)