AMRC Q1 Earnings Call: Project Backlog Growth and Federal Contract Resumption Drive Outlook

Energy and renewable energy projects company Ameresco (NYSE: AMRC) reported Q1 CY2025 results exceeding the market’s revenue expectations, with sales up 18.2% year on year to $352.8 million. The company’s full-year revenue guidance of $1.9 billion at the midpoint came in 0.9% above analysts’ estimates. Its non-GAAP loss of $0.11 per share was 57.7% above analysts’ consensus estimates.

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StockStory’s Take

Ameresco’s first quarter results were shaped by notable growth in both its projects and energy asset businesses, with management emphasizing the successful conversion of awards into contracts and strong performance across Europe, Canada, and several U.S. regions. CEO George Sakellaris credited the company’s diversified business model and ability to navigate industry-wide challenges, such as tariff uncertainty and a dynamic federal contract environment, as central to exceeding expectations for the quarter.

Looking forward, management reaffirmed its full-year guidance, attributing confidence to a record project backlog, stable federal opportunities, and the company’s approach to contract structuring that shields against tariff and inflationary risks. CFO Mark Chiplock highlighted Ameresco’s focus on margin stability and backlog execution, while noting that the cadence of revenue will remain weighted toward the second half of the year. Management acknowledged ongoing industry headwinds but remains optimistic about continued demand for resilient energy infrastructure.

Key Insights from Management’s Remarks

Ameresco’s leadership pointed to several business and market developments that influenced the quarter’s outcome and set the tone for the rest of the year.

• Federal contract recovery: Management described the rescoping and unpausing of previously delayed or canceled federal contracts as a key positive development, with CEO George Sakellaris stating that no additional cancellations or delays have occurred. Federal projects now account for about 30% of the project backlog, though they are expected to make up a smaller share of 2025 revenue due to multiyear execution cycles.
• Diversification by geography and customer: The company reported significant growth in Europe and Canada, alongside steady performance in the U.S. Mark Chiplock, CFO, noted that this geographic and customer diversity underpins the business model’s resilience, helping offset risks tied to any single market or segment.
• Backlog expansion: Ameresco’s contracted project backlog increased 80% year over year to $2.6 billion, while total project backlog reached nearly $5 billion. Management highlighted this as a source of multi-year revenue visibility and a differentiator versus peers.
• Tariff and supply chain management: The company addressed concerns about U.S. tariffs on energy equipment, stating that most ongoing projects have already sourced materials or are structured to pass through any cost increases. Management also discussed efforts to diversify suppliers and secure domestic options where feasible.
• Asset divestiture and cost discipline: The divestiture of the AEG business at the end of 2024 was cited as a driver of reduced operating expenses, and project execution teams have been reallocated to maximize efficiency. Management stressed ongoing cost control measures and the benefits of operating leverage from large-scale projects.

Drivers of Future Performance

Management’s outlook for the remainder of the year centers on converting a historically high backlog, managing tariff and regulatory uncertainty, and maintaining margin stability through disciplined execution.

• Resilient federal and utility demand: Ameresco expects continued demand from federal, military, and utility customers, particularly for projects focused on energy resiliency and infrastructure upgrades, despite the potential for administrative delays in federal approvals.
• Contract structuring and supply chain: The company is mitigating risk from tariffs and inflation by embedding cost pass-through provisions in new contracts and sourcing equipment in advance, which management believes will support margin preservation even if external costs rise.
• Asset-light project focus: While Ameresco continues to own and develop energy assets, management indicated a greater emphasis on the projects business, which generates strong cash flow and leverages the company's expertise in distributed energy solutions. This shift is partly in response to higher interest rates affecting asset returns.

Top Analyst Questions

• Noah Kaye (Oppenheimer): Asked for detail on the steps taken to resolve federal contract delays and the outlook for new federal RFPs. Management explained that rescoping and negotiation resulted in resumed or reallocated contracts, with increasing opportunities tied to energy resiliency.
• Noah Kaye (Oppenheimer): Inquired about margin shaping for upcoming quarters. CFO Mark Chiplock said margins should improve as the mix shifts away from lower-margin European EPC contracts, reaffirming confidence in full-year margin guidance.
• George Gianarikas (Canaccord Genuity): Questioned the impact of the Inflation Reduction Act on project economics. Management said most relevant projects are “safe harbored” for tax credits, reducing short-term exposure if legislative changes occur.
• Eric Stine (Craig Hallum): Asked how Ameresco manages tariff risk in new contract structures. CEO George Sakellaris described contractual pass-through clauses for tariffs and price changes, as well as supply chain diversification strategies.
• Craig Irwin (Roth Capital Partners): Asked about RIN price volatility and project vetting. Chief Investment Officer Josh Baribeau outlined rigorous financial modeling and stress-testing to ensure projects meet profitability hurdles even under conservative market scenarios.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will closely monitor (1) the pace of project backlog conversion into revenue, especially federal contracts, (2) Ameresco’s ability to manage supply chain and tariff pressures through proactive contract terms and supplier diversification, and (3) the impact of energy asset divestitures and cost controls on margin trends. Execution against these milestones will provide insight into Ameresco’s ability to sustain multi-year growth.

Ameresco currently trades at a forward P/E ratio of 14.3×. Should you load up, cash out, or stay put? See for yourself in our free research report.

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