Ameresco's Q1 2025: Key Contradictions on Federal Projects, IRA Impact, and Deployment Timing

Federal project pace and contracting, impact of IRA, and asset and project deployment timing are the key contradictions discussed in Ameresco's latest 2025Q1 earnings call.



Strong Financial Performance and Project Backlog Expansion:
- Ameresco reported 18% growth in revenue and 32% growth in adjusted EBITDA for Q1 2025.
- The company's project backlog increased to nearly $5 billion, with a contracted project backlog of $2.6 billion, representing a almost 80% year-over-year growth.
- This performance was driven by robust growth in both its projects and energy asset business, including strong performance in Europe and Canada.

Resilience and Diversification in Project Backlog:
- Approximately 50% of Ameresco's total project backlog includes energy infrastructure projects using various generation technologies, such as solar, hydroelectric, and battery storage.
- This diversification is in response to evolving energy landscapes that demand ever-increasing amounts of electricity and higher levels of resiliency.
- The company sees significant opportunities for growth in areas such as federal government contracts and data center energy infrastructure projects.

Federal Contract Stability and New Opportunities:
- Ameresco's federal contracts, which account for roughly 30% of their current project backlog, have experienced one cancellation and two contract pauses, but these were later rescoped or unpaused.
- The company is optimistic about future federal contracts, as their budget-neutral approach aligns with the current administration's priorities.
- Recently issued federal RFPs focusing on core competencies like resiliency and power supply infrastructure present new opportunities for Ameresco.

Tariff Challenges and Hedging Strategy:
- Ameresco faces tariff challenges, but current projects are shielded from near-term price increases as equipment for ongoing projects has already been purchased.
- The company has mitigated potential RIN price declines through dynamic hedging strategies, reducing RIN exposure to 20% for the remainder of the year.
- Long-term strategies involve mitigating price increases during contract negotiations and repricing where possible.