Ameresco (AMRC) Q4 2025 Earnings Call Transcript

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DATE

Mar. 2, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chairman and Chief Executive Officer — George P. Sakellaris
• Chief Financial Officer — Mark A. Chiplock
• Chief Marketing Officer — Leila Dillon
• Chief Investment Officer — Joshua Riggi Baribeau

TAKEAWAYS

• Revenue -- $581 million, representing a 9% increase year over year, driven by growth in all core business lines.
• Projects Revenue Growth -- 11% increase, supported by strong backlog conversion and continued performance from the Sunel joint venture in Europe.
• Total Project Backlog -- Remained above $5 billion following significant conversions, indicating sustained customer demand for infrastructure solutions.
• Energy Asset Revenue -- Increased by 5%, attributed to expansion of the operating asset portfolio and including 87 megawatts placed in service.
• O&M Revenue -- Recurring operations and maintenance revenue rose by 11%, with long-term O&M backlog reaching approximately $1.5 billion.
• Total Awarded Backlog -- Surpassed $2.5 billion, up 13% reflecting project scope increases in federal backlog and European market gains.
• Gross Margin -- 16.2%, up both sequentially and year over year, reflecting improved project mix and higher quality backlog.
• Operating Expenses -- $50.9 million compared to $47.8 million in the prior-year period, with increased investment in personnel and project support.
• Operating Leverage -- Operating expenses are growing materially slower than gross profit, preserving operating leverage as scale increases.
• Net Income Attributable to Common Shareholders -- $18.4 million, with GAAP EPS of $0.34 and non-GAAP EPS of $0.39.
• Adjusted EBITDA -- $70 million with a 12% margin; prior-year period included a $38 million gain on the sale of AEG.
• Cash and Liquidity -- Ended the quarter with approximately $72 million in cash and $300 million in corporate debt; leverage at 2.7x, below the 3.5x covenant.
• New Project Financing -- Secured approximately $175 million in new commitments for the quarter.
• Adjusted Cash Flow from Operations -- Approximately $36 million, including proceeds from ITC sales; eight-quarter rolling average was about $54 million.
• 2026 Guidance -- Midpoint targets: revenue of $2.1 billion (up 9%), adjusted EBITDA of $283 million (up 19%), and 100-120 megawatts of energy assets expected to be placed in service, including two RNG plants.
• Revenue Seasonality -- Approximately 60% of 2026 revenues expected in the second half, in line with historical seasonality.
• Q1 Outlook -- Revenue and adjusted EBITDA are expected to be generally consistent with Q1 of last year, impacted by severe weather delaying project execution.
• Noncontrolling Interest Impact -- Joint ventures are consolidated, but Ameresco only reports its ownership share of adjusted EBITDA and EPS after reflecting noncontrolling interests.
• European Expansion -- Growth in Europe accelerated by acquisitions and the 51%-owned Sunel joint venture, with recent wins in Romania and a focus on Southern and Eastern markets.
• RNG Asset Pipeline -- At least 10 RNG facilities in backlog, with capacity for further disciplined development as capital allows.

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RISKS

• Chief Financial Officer Mark A. Chiplock stated, "Q1 EPS is expected to be lower year over year primarily reflecting higher interest and depreciation expenses from our growing energy asset portfolio as well as continued investment as we scale the business."
• Chief Executive Officer George P. Sakellaris said, "we had the freeze up on three of our assets, you know, the renewable gas assets, and that hurts, and that is not really recoverable. That is gone."
• Supply chain and pricing remain "not 100% there," with Chief Executive Officer George P. Sakellaris adding, "We have challenges. We manage through, but it has been a little bit better. And I think some of the things that trip us up besides the tariffs, like, for example, what is happening with the lithium prices and so on."
• Chief Investment Officer Joshua Riggi Baribeau stated, "We are not, I would say, overexposed or underexposed than our peers to these sort of global things," and noted that contracts now include pricing contingencies, but tariff instability remains a risk.

SUMMARY

Management highlighted Ameresco (NYSE:AMRC)'s strategy of pairing organic growth with opportunistic European acquisitions, particularly through joint ventures like Sunel, to diversify revenue and bypass U.S. policy exposure. Executives indicated that project backlog remains above $5 billion, supporting long-term revenue visibility and sustained operational scaling. Discipline in project selection, enhanced contract structures, and selective risk management are justified as drivers for margin improvement and backlog quality. Cash flow trends suggest that working capital should normalize as large projects progress past milestone billings, with a stated objective of maintaining or increasing free cash generation through execution. Management underscored expanding opportunities in data center resiliency, behind-the-meter energy solutions, and battery storage, noting an increase in both awarded backlog and prospective deal flow from industrial and hyperscale clients.

• Chief Executive Officer George P. Sakellaris stated, "Energy efficiency is often the most economical solution for existing buildings," identifying this as a competitive strength representing nearly half of the current project backlog.
• Chief Financial Officer Mark A. Chiplock emphasized, "As we see some of these larger, more complex infrastructure projects come in, I think the margin profile will be somewhat higher," pointing toward incremental margin expansion associated with project mix.
• The company reported that "recurring revenue contributions from our energy asset and O&M businesses were key drivers to our success," tying financial durability to multi-year contracted income streams.
• Chief Executive Officer George P. Sakellaris commented on hyperscale market demand: "we are getting more requests than we can handle once we announce really more data center. And, of course, we have, I will say, a little bit strategic advantage of the other competitors."
• Management stated that new contract terms and contingency planning for tariffs are being implemented to help mitigate risk from supply chain disruptions and commodity volatility.

INDUSTRY GLOSSARY

• RNG: Renewable Natural Gas, a biomethane product created from organic waste, upgraded for pipeline injection or use as a transportation fuel.
• Behind-the-Meter: On-site energy generation and storage systems located on the customer side of the utility meter, commonly used for resiliency and optimization.
• BESS: Battery Energy Storage System, enabling time-shifting of energy supply and provision of backup power or ancillary services.
• EPC: Engineering, Procurement, and Construction; a contracting arrangement delivering a project from design through completion under a single contract.
• Hyperscaler: A company, typically in the technology sector, operating massive-scale data centers and requiring large, resilient, and rapid-deployment energy solutions.

Full Conference Call Transcript

Operator: Good afternoon, ladies and gentlemen, and thank you for standing by. My name is Kelvin, and I will be your conference operator today. At this time, I would like to welcome everyone to Ameresco, Inc. Q4 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to withdraw your question, please press 1 again. Thank you. I would now like to turn the call over to Leila Dillon, Chief Marketing Officer. Please go ahead.

Leila Dillon: Thank you, Kelvin, and good afternoon, everyone. We appreciate you joining us for today's call. Our speakers on the call today will be George P. Sakellaris, Ameresco, Inc.'s Chairman and Chief Executive Officer and Mark A. Chiplock, Chief Financial Officer. In addition, Joshua Riggi Baribeau, our Chief Investment Officer, will be available during Q&A to help answer questions. Before I turn the call over to George, I would like to make a brief statement regarding forward-looking remarks. Today's earnings materials contain forward-looking statements, including statements regarding our expectations. All forward-looking statements are subject to risks and uncertainties.

Please refer to today's earnings materials, the safe harbor language on Slide 2 of our supplemental information, and our SEC filings for a discussion of the major risk factors that could cause our actual results to differ from those in our forward-looking statements. In addition, we use several non-GAAP measures when presenting our financial results. We have included the reconciliations of these measures and additional information in our supplemental slides that were posted to our website. Please note that all comparisons that we will be discussing today are on a year-over-year basis unless otherwise noted. I will now turn the call over to George.

George P. Sakellaris: Thank you, Leila, and good afternoon, everyone. I am pleased to report that our fourth quarter results represented a great finish to a year of strong performance, with annual results reaching the mid to high end of our revenue and profit guidance. Excellent execution by the Ameresco, Inc. team together with recurring revenue contributions from our energy asset and O&M businesses were key drivers to our success. And this success was achieved even amid concerns surrounding potential Department of Government efficiency actions early in the year, and the six-week federal government shutdown in the fourth quarter.

Importantly, our results were broad-based, with growth across all three of our core business lines, including strong growth from our European operations, and while our team continues to be laser focused on contract execution, converting a record $1,500,000,000 of project backlog into revenue this year, we also saw excellent new business activity including meaningful project scope increases in our federal backlog. This helped to drive our total awarded backlog to over $2,500,000,000, up 13% from last year. Also, Europe was a strong contributor this year and represents a real success story. We first entered Europe over 10 years ago with a small acquisition of a UK-based energy consulting firm.

But more recently, we have focused on expanding our business in Continental Europe. As doing business in Europe requires a localized presence, our European growth strategy has been driven by opportunistic acquisitions, such as Italy-based Enercos, and partnerships in various target countries. We focus on smaller opportunities and then use the power of Ameresco, Inc., our technology, and process know-how and financial resources to accelerate and drive growth. Geographically, we have focused on Southern and Eastern Europe, areas which are experiencing higher rates of growth with fewer large domestic entrenched competitors. Our 51% owned joint venture with a Greece-based Sunel Group is an excellent example of this approach.

The joint venture was created in April 2023 to pursue utility-scale PV and battery energy storage opportunities. After great success in Greece, the joint venture has since expanded this business including a few recent large wins in Romania. We expect to continue to grow in Europe organically and through opportunistic acquisitions and partnerships. Europe not only represents an excellent growth market, but it also provides important diversification, as demand drivers in Europe are not subject to the same U.S. political and policy variables. We look forward to provide an additional update on this important aspect of our company's future growth.

Before I hand the call over to Mark to cover our results and outlook, I would like to briefly highlight a number of key industry growth drivers and how we believe Ameresco, Inc. can benefit from them for years to come. The first key driver is a rapidly growing demand for electricity. This has been driven by the electrification of buildings and transportation, the power needs for many high technology industries, and the growth in industrial manufacturing. Overall, electricity demand is expected to increase by 78% by 2050, meaning 80 gigawatts of capacity added every year for the next 20 years.

Meeting this demand will be a significant challenge to our aging system of centralized generation and the associated transmission infrastructure. As a result, many of our customers are choosing to install on-site behind-the-meter generation and storage solutions. Ameresco, Inc. has been providing a portfolio of these solutions since the founding of the company, including not only solar, but also battery energy storage systems, natural gas engines, gas turbines, fuel cells, and microgrids. We are also exploring the next generation of energy infrastructure technologies like micro and small modular nuclear reactors. These power and storage solutions will be a key element to supporting ongoing global energy demand needs.

Second, increasing energy costs is another key industry driver for which Ameresco, Inc. is well positioned to benefit from, particularly through our building efficiency solutions. As electricity prices rise, energy efficiency investments made by our customers deliver faster payback and stronger returns. Energy efficiency is often the most economical solution for existing buildings. According to Frost & Sullivan, Ameresco, Inc. is the nation's largest provider of energy efficiency services, which represent nearly half of our current project backlog. Third, the increased stress on the country's aging energy infrastructure from high demand and the critical need for resilient power is quickly driving a growing demand for resilient energy solutions.

High noise power is not only a must-have for critical high technology industries such as data centers, but also for industrial customers, where even limited downtime can have significant cost of production consequences. Advancements in lithium battery technologies as well as rapidly declining cost have driven tremendous growth in the use of battery energy storage solutions over the last five years. Ameresco, Inc. has a very long track record of providing resilient solutions at military bases across the country, keeping their mission critical functions running in case of grid power interruptions, and thus making us a go-to provider across all end markets.

As you can see, we believe Ameresco, Inc. is very well positioned to benefit from these long-term trends that should help drive profitable growth for many more years to come. I will now turn the call over to Mark to provide financial commentary on this quarter's excellent results as well as provide our outlook for 2026. Mark?

Mark A. Chiplock: Thank you, George. This was another strong quarter for Ameresco, Inc. in a year defined by consistent execution. Despite the Q4 government shutdown, we delivered record quarterly revenue of $581,000,000, up 9% year over year, with growth across all of our core business lines. These results underscore the durability of our diversified business model and the disciplined execution of our team. Projects revenue grew 11%, driven by strong backlog conversion and continued solid performance from our European joint venture with Sunel. We converted a significant amount of backlog in the quarter, and we still maintained our total project backlog above $5,000,000,000, reflecting sustained demand for our comprehensive energy infrastructure solutions.

Energy asset revenue increased 5%, driven by the growth of our operating asset portfolio. We placed 87 megawatts into operation during the quarter, including our ninth RNG facility, a large military solar plus storage installation, and the Nucor BESS system. For the year, we exceeded our guidance, placing 121 megawatts of energy assets into operations, bringing our total operating assets to 838 megawatts. We also added 30 megawatts to our energy assets in development, continuing to balance backfilling our energy asset pipeline with our disciplined financial approach to new asset opportunities. Our recurring O&M revenue increased 11%, reflecting continued attachment of long-term service agreements to our completed project work. Our long-term O&M revenue backlog now stands at approximately $1,500,000,000.

When you combine our project backlog, and the future revenue streams from our recurring O&M business, and portfolio of operating energy assets, we have over $10,000,000,000 in long-term revenue visibility. We believe that level of visibility is a real strength in this challenging environment. And finally, our other line of business, excluding the sale of our AEG business in 2024, delivered solid year-over-year results. Gross margin was 16.2%, up both sequentially and year over year. This reflects continued improvement in project mix, higher quality backlog, and disciplined cost management. Operating expenses in the fourth quarter were $50,900,000 compared to $47,800,000 last year.

The increase reflects targeted investments in people, project development, and execution support as we manage revenue growth, more complex infrastructure projects, and continue replenishing backlog. Importantly, operating expenses are growing materially slower than gross profit, so we are still preserving operating leverage in the business. As we move into 2026, we expect to continue investing prudently to support demand and drive growth, which is reflected in our guidance. Net income attributable to common shareholders was $18,400,000, with GAAP EPS of $0.34 and non-GAAP EPS of $0.39. Adjusted EBITDA was $70,000,000, resulting in a margin of 12%. As a reminder, last year's fourth quarter adjusted EBITDA results included the $38,000,000 gain on the sale of AEG.

Turning to our balance sheet, we ended the quarter with approximately $72,000,000 in cash and corporate debt of approximately $300,000,000. Leverage under our senior secured facility was 2.7x, comfortably below the covenant level of 3.5x. During the quarter, we secured approximately $175,000,000 in new project financing commitments. Adjusted cash flow from operations was approximately $36,000,000 including proceeds from ITC sales. On a longer-term basis, our eight-quarter rolling average adjusted cash from operations was approximately $54,000,000. Now let me move on to our 2026 guidance. We entered the year with strong business momentum and visibility supported by continued strength across our end markets.

Increased industry demand, combined with the recurring revenue from our growing energy asset and O&M businesses, provides clear visibility into another year of strong growth. As detailed in our press release, for 2026, we are guiding to approximately $2,100,000,000 of revenue and $283,000,000 of adjusted EBITDA at the midpoint of our ranges, representing growth of 9% and 19% respectively. We expect to place approximately 100 to 120 megawatts of energy assets into service, including two RNG plants. For some quarterly shaping, the cadence of the year should follow our historical seasonal pattern, with the heavier weighting towards the second half. We expect revenues in the second half of the year to represent approximately 60% of our total revenue for 2026.

This is consistent with our performance from the past couple of years. As we look to the first quarter, which is seasonally our lowest revenue quarter, we expect revenue and adjusted EBITDA to be generally consistent with Q1 of last year. The quarter reflects normal project timing and the recent severe weather that has impacted execution across several regions. As noted in the earnings release, Q1 EPS is expected to be lower year over year primarily reflecting higher interest and depreciation expenses from our growing energy asset portfolio as well as continued investment as we scale the business. Before closing on guidance, I want to briefly clarify how certain structural items impact both adjusted EBITDA and EPS.

As George mentioned, we operate certain parts of our business through joint venture structures, including our Sunel JV in Europe. Where we have control, we consolidate 100% of revenue and expenses. However, a portion of both adjusted EBITDA and net income is attributable to our JV partners and reflected as noncontrolling interest. As a result, the adjusted EBITDA and EPS we report reflect only Ameresco, Inc.'s ownership share of those consolidated entities. Given these factors have a significant impact on our results, we have provided estimated ranges for income attributable to noncontrolling interest in our 2026 guidance as detailed in our press release. In summary, 2025 demonstrated the durability of our model.

We delivered consistent growth, expanded backlog, improved margins, and maintained financial discipline. 2026 is shaping up to be another year of sustained profitable growth for the company, as we believe we can continue to benefit from the many positive secular trends driving demand for our energy solutions. Now I would like to turn the call back to George for closing comments.

George P. Sakellaris: Thank you, Mark. As Mark mentioned, during 2026, we will be building on our momentum from 2025 to deliver another year of strong profitable growth. Our highly differentiated portfolio of energy infrastructure and building efficiency solutions are well aligned with customer demand. Over our 26-year history, Ameresco, Inc. has proven to be one of the most consistent providers of these solutions. We are making targeted investments this year as we focus on technical innovation and drive long-term growth. As we have here today, we are very excited about our growth prospects for 2026 and beyond. We look forward to seeing many of you at upcoming meetings and conferences.

In closing, I would like to once again thank our employees, customers, and stockholders for our great success in 2025 and for their continued support in 2026. Operator, we would like to open the call to questions.

Operator: Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from the line of Noah Duke Kaye of Oppenheimer. Please go ahead.

Noah Duke Kaye: There was a lot of anticipation there. Thanks for taking the questions. I guess, I know you do not formally guide to the segments in the outlook, but maybe just some shaping on energy assets as contemplated in the guide. You know, the 121 megawatts placed in service did exceed. So kind of how do we think about the revenue trajectory there and kind of the margin profile, seems like it should be a nice step up. And then I think you mentioned in the prepared remarks, Mark, around kind of the first quarter shaping. You mentioned weather had an impact. Obviously, we all experienced firsthand, at least most of us, that weather.

So not a huge surprise, but can you maybe comment on what that meant for just some of the project work, and how you think about the sort of sequencing of getting rid of some of the associated labor inefficiencies and the like, so that flows a little bit better in 2Q in the back half?

Mark A. Chiplock: Hey, Noah. So I think, as in previous years, the majority of the assets placed in service will kind of be towards the middle to the back half of the year. That is just kind of how things work with interconnection queues and development cycle, heavy construction in the summer months, etcetera. And so that weighted, I think, 80 plus megawatts placed in service. So it may not generally look like this year. This year was very heavily Q4. It may not look quite like that, but certainly more back-half and middle-loaded than linear. In terms of the margin contributions, really no reason to believe that the margins are any different per segment—battery, gas, or solar—as they are historically.

And the mix is about the same. We have kind of given you the rough mix of what we expect to place this year. So, and as you know, most of the assets we placed in service in any given year do not meaningfully contribute that year. It takes a little while to ramp up to get commissioned and then the real contribution is the following year. So this year has a lot of the impacts of the assets we placed in service in 2025, especially because it was back-half loaded, much like the 2026 assets placed in service will have more of a meaningful impact on our 2027 numbers, which we have not provided yet.

On the weather, I mean, the weather as you can imagine impacted our ability to access certain sites. It impacted our assets. So it is really just impacting the timing, the cadence of conversion. We expect to see certainly on the project side that revenue to come in Q2 as we get kind of on the other side of it. But it was unusual just given how severe the weather was. Again, we feel pretty good that is just timing, and we will see that revenue come back in as we get outside of Q1 and later into the year.

George P. Sakellaris: If I may add a little bit there, Noah, we had the freeze up on three of our assets, you know, the renewable gas assets, and that hurts, and that is not really recoverable. That is gone. But we have taken all that into account for our horizons for the year and the numbers for the first quarter.

Noah Duke Kaye: Super helpful. George and Mark, I will turn it over. Thank you.

Operator: Your next question comes from the line of George Gianarikas of Canaccord Genuity. Please go ahead.

George Gianarikas: Hi, everyone. Thank you for taking my questions. I would like to focus a little bit on Europe and the momentum you are seeing now. In order to scale further, do you expect to do it organically, or are you looking at maybe adding acquisitions to bolster your scale? Thank you. And maybe as a follow-up just to ask a little bit about recent momentum in data centers. You specifically mentioned momentum in behind the meter. Any update on what you are seeing in the data center market? Thank you.

George P. Sakellaris: Like I said in my commentary, we are looking for accretive acquisitions strategically located and we would be very opportunistic in that regard, and partnerships and expanding the partnership that we have with Sunel. And as pointed out, we have great success up in Romania, and we are looking at a couple other countries working with them. And there are some RFPs that come out, and we are planning to go ahead and go after that particular business with that entity.

But as I said, the growth in Europe, especially on solar, and the next wave that is coming, the battery storage, because the countries have so much solar and wind installations, and we are well positioned to take good advantage of that. So we are looking at very good growth opportunities in Europe. And, of course, we do not have to put up with the U.S. political things that are going on over here. It is a great diversification for us. Look, we are getting more requests than we can handle once we announce really more data center. And, of course, we have, I will say, a little bit strategic advantage of the other competitors.

We could put the package together and provide high noise power within data centers. Otherwise, they might have gas turbines, or might need battery storage. And the microgrid, we are the company, we have been doing that for a long time, and we have a great pipeline. That is all I can say. But as you know, we are a little bit conservative when we announce a particular project. We think it is going to be a great contributor for us a little bit this year and much more the next couple of years.

Mark A. Chiplock: Maybe what I will just add to that, when we think about the timing of when those opportunities can start to come into backlog, we are going to really maintain some strong discipline in risk management as we look at those projects. There are a number of gating items that we need to make sure are de-risked, like engineering, permitting, equipment sourcing, financing, commercial structuring. So a lot goes into making sure that those opportunities are real, and I think that is the approach we have been taking in bringing these projects into the backlog. So as George said, pipeline is strong, but conversion timing is going to reflect how well we can de-risk some of these gating items.

Operator: Your next question comes from the line of Benjamin Joseph Kallo of Baird. Please go ahead.

Benjamin Joseph Kallo: Hey, good evening, guys. Congrats on the results. Just maybe following on that you put in a very high, if not record number of assets into service in Q4. Just on timing of adding new products to backlog, following on George's last question with data center, what should we expect to get some of this stuff in the backlog? And then my second question is just around any kind of tightness in labor, equipment, or other that you would like to call out that are impacting kind of your speed to market here? Thank you, guys.

Mark A. Chiplock: I think, as George mentioned, the pipeline is really strong for these behind-the-meter data center load opportunities. We are really trying to maintain some strong discipline in how we manage these projects from a risk management perspective. There are a lot of gating items that you need to go through from engineering, permitting, how we source the equipment. We obviously need to work out commercial terms. So it is going to take time, and we want to make sure that these opportunities are grounded in something real before we start to bring them into the backlog.

As we work through de-risking those gating items, you will start to see more of those opportunities come out of the pipeline and into our reported backlog.

George P. Sakellaris: And as far as the supply, we still have some challenges. But it has gotten better than what it used to be during COVID. But we are not 100% there where we should be. We have challenges. We manage through, but it has been a little bit better. And I think some of the things that trip us up besides the tariffs, like, for example, what is happening with the lithium prices and so on. So far, we have learned to live with them, and we have incorporated into our forecast and our guides as much as possible. Thank you.

Benjamin Joseph Kallo: Okay. Thank you.

George P. Sakellaris: Thanks, Ben.

Operator: Your next question comes from the line of Stephen David Gengaro of Stifel. Please go ahead.

Stephen David Gengaro: Thanks. Good afternoon, everybody. So two things for me. The first, would you—just based on your guide—you have kind of a bit of upward momentum on the margin side. Could you just talk about what is driving that? Is it a specific segment? Is it just execution on certain areas? What is the big driver we should be thinking about for margins in 2026? And as a follow-up to that, when you look at your total project backlog that you show in the presentation, are there any subsegments of that pie chart that tend to have higher margins, or are the project sizes all fairly similar?

Mark A. Chiplock: I think it is discipline and it is execution. We have been talking about this for the last couple of years, but we have really tightened our discipline in terms of how we select projects, how we price them, how we manage the cost. We are starting to see that coming through in some of the margin improvements. As we continue to take that approach to bringing new projects through the backlog and converting them, as well as bringing more assets online and just growing out those recurring streams, that is where we are starting to get confidence in more of the quality of earnings and what we are seeing in this gradual movement in margins.

As we see some of these larger, more complex infrastructure projects come in, I think the margin profile will be somewhat higher. I do not think it would be a spike in margins, but with those mix of projects coming more into the backlog, they do bring a bit higher of a margin profile.

Operator: Next question comes from the line of Manish Somaiya of Cantor Fitzgerald. Please go ahead. Manish, your line might be on mute. Your next question comes from the line of Ryan James Pfingst of B. Riley Securities. Please go ahead.

Ryan James Pfingst: Hey, guys. Thanks for taking my questions. Just curious if you can give a broader update on the RNG market in terms of new project opportunities going forward? And if you are considering any larger M&A as part of the strategy there? And for my second one, firm generation ticked higher in terms of energy assets in development. Curious if that is going to continue to be the case just based on the type of demand that you guys are seeing, going forward. Thanks.

George P. Sakellaris: I would say yes to both of them. Our backlog, I think, Mark, we have at least 10 RNG facilities that are in the backlog right now that we will build over the next few years. In addition to that, there is no shortage of new projects out there. But it takes a considerable amount of money in order to develop those projects, and we try to be disciplined as to how many we take on at any given time. As far as mergers and acquisitions, we are open to it, and we are looking at some stuff. But nothing that is mature enough to talk about it. Look, we have done 26 acquisitions for this company.

We grew it that way as well as organically. And we always look for good opportunities as long as they are accretive and they add value at the end of the day to the company.

Mark A. Chiplock: I would just say, we are still very excited about the opportunities that we are seeing. I think the demand from the compliance market is still pretty durable, but the voluntary markets are starting to see some growth as well. So the opportunities are there, and we are going to continue to be disciplined in how we bring more of those RNG assets into development and into operations to meet the demand that we are seeing. On firm generation, I think we are going to see the firm generation that comes to some of these behind-the-meter opportunities will absolutely be there.

From where we will either decide to bring these into our assets in development or turn them into EPC opportunities, that is still a decision that we need to have. The larger these projects are, it is more likely that we will want to go an EPC path. But I think that behind-the-meter firm generation will be a large driver of those opportunities and projects coming through our backlog.

Ryan James Pfingst: Appreciate it, guys.

Operator: Your next question comes from the line of Julien Dumoulin-Smith of Jefferies. Please go ahead.

Hannibal Velasquez: Hey. Good afternoon. This is Hannibal Velasquez on for Julien. Thank you for the update, and congrats on the strong quarter. I just wanted to ask around tariff landscape. We have seen some fluctuations in tariff policy following the Supreme Court order, and then some commentary from the White House suggesting that there could be different levers to pull across different statutes, Section 301, Section 332, etcetera. Can you just go ahead and maybe outline the general risk in that area, maybe how you are managing that if it is reflected in PPAs you are negotiating today? To the extent you see that as risk. Thank you.

Joshua Riggi Baribeau: I think, and George and probably Mark's prepared remarks, we all talked about the challenging environment of 2025, largely driven by tariffs and things like that. We are not, I would say, overexposed or underexposed than our peers to these sort of global things. And, obviously, whatever the President may or may not do and what the Supreme Court may or may not do in response to that is not really where we are prepared to comment. But we have said previously that some of our newer contracts have protections for tariffs. We are building that into the contract where if there are tariffs, there are potential price adjustment mechanisms. Other than that, we are building contingency into our deals.

We are doing some pricing, like I said, some price adjustment potential in contracts. We are sort of crossing our fingers and just hoping things stabilize. But we are managing through it just as our peers are.

George P. Sakellaris: If I might add one thing about the State of the Union message from the President, he said that the hyperscalers should be doing their own power plants in order to provide their capacity. We thought that was a good opening and it will help us in the long term. Because, as many of you know, I have been writing some articles saying that if the hyperscalers wait for the utilities in order to interconnect their power plants, we will lose the AI race. The only way that it can happen is they develop their own power plants at the end of the day.

And, of course, they will get better reliability, and, ultimately, it will be less expensive than doing it the other way. Because to get transmission lines, even though you have a large central power plant, it is going to cost you as much to bring that power to the load as it does to build the generation. Ultimately, everybody is going to be better off. So I think it is a great sales pitch for our business.

Hannibal Velasquez: Okay. That makes sense. And as a follow-up, going off that point, on the hyperscaler front, can you give us a sense of what the general—if there is a generic—mix between resources that some of the conversations you are having with hyperscalers looks like? Is it more so biased towards firm power? Are you seeing any surprises, perhaps more of a weighting towards renewables, solar plus storage? Generally, what does the resource mix look like that they are interested in?

George P. Sakellaris: We see it across the board. The energy infrastructure is across the board. Right now, everybody is concerned—many of the industrial sectors that we are talking about—about resiliency. And the other thing that they are concerned a lot about is speed to power. If they wait for the utilities and the central power plants to happen and get the right of way to transmission lines, which might take five to 10 years, you will lose the AI race. So speed to power might be critical. Many of them not only want gas turbines, but they want some renewable. So you will see that they have gas turbines, some solar, some battery storage.

At the end of the day, fine lines power supply. And that is where Ameresco, Inc. comes into the picture because we have been doing this for military bases—take the San Antonio, Portsmouth Naval Shipyard, and I keep going on and on, Parris Island, all over them—and some of it started in the previous Trump administration because they wanted to have resiliency in every critical military base, whether it is a naval or army base.

Operator: Your next question comes from the line of Manish Somaiya of Cantor Fitzgerald. Please go ahead.

Manish Somaiya: Hi there. Can you hear me?

George P. Sakellaris: We can. Hey, please.

Manish Somaiya: Okay. Fantastic. Thank you. I do not know what happened earlier. Two questions. One is if you can just help us understand on the operating cash flow. Just give us a sense as to how we should think about working capital in particular as we think about 2026. And then on the guidance, what gets you to the top end of the guidance? What are some of the milestones that we should be looking for? And then maybe last one for George, high level, obviously look at the backlog, it is pretty impressive. A lot of opportunities ahead. You talked about growth in Europe.

So as I think about the business the next couple of years out, how does Ameresco, Inc. evolve?

Mark A. Chiplock: Sure. If you look at Q4 cash flow—and I have said this a lot—quarterly cash flow can be lumpy. Q4 cash flow really reflected kind of normal project timing and working capital movements. Obviously, that was a very heavy construction period. The right way to evaluate our cash generation is on a rolling multi-quarter basis, and that is why we like to provide that metric. It is a more realistic reflection of our implementation cycle. Quarterly cash can move around due to construction timing and milestone billings. On working capital, we have been a bit tighter because we have some larger projects that are coming through on unbilled that are tied to milestones.

As we continue to progress those projects and achieve those milestones, we will start to see unbilled convert through AR and cash, and you will start to see that come through our cash from operations. So timing can vary quarter to quarter, but we would expect our working capital to normalize across the year, and we expect to see the normal, if not growing, level of cash generation. On what gets us to the top end of guidance, that is really going to come down to execution. The backlog is there, the opportunities are there. When we put our guidance together, we take a prudent look at how we think things can progress through the backlog and into the P&L.

If we can execute on these projects and we do not have other delays like some of the weather stuff we are seeing early in the year, it always comes down to our ability to execute and stay disciplined on how we manage costs. That should represent an opportunity. We feel really good about the midpoints based on how anchored it is to our visibility coming out of backlog and assets we are bringing on.

George P. Sakellaris: I think you will see us doing more and more infrastructure projects and a good chunk of business in Europe. The potential is there, and that is why we made the investment the last couple of quarters and then this quarter. We added a considerable amount of people with the engineering, development people, as well as financial and execution, construction managers, especially senior-level management construction management people to execute on the larger projects. I think you will see us doing more data centers, more storage or resiliency plans for the commercial and industrial customers, especially. The industrial sector for a long time tried to move efficient energy efficiency projects that were very difficult.

But now because they are concerned about resiliency and the higher cost of electricity, we are getting some good traction. I think you will be able to see us doing less or some of that—much—we are not, the business is there. We will be doing much work, but the company will become much larger and driven by these larger opportunities in the energy infrastructure sector.

Operator: Again, ladies and gentlemen, if you have a question, please press 1. There are no further questions at this time. And with that, ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect your lines.

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