Ameresco's Net Income Jumps 31.7% Amidst Supply Chain Headwinds

TL;DR

**AMRC is growing revenue and net income, but watch that negative operating cash flow and the Powin LLC bankruptcy — it's a red flag for liquidity and supply chain risk.**

AI Summary

Ameresco, Inc. reported a robust financial performance for the nine months ended September 30, 2025, with revenues increasing to $1,351.1 million, up 9.2% from $1,237.3 million in the prior year. Net income attributable to common shareholders also saw a significant rise, reaching $25.9 million, a 31.7% increase from $19.7 million in the same period of 2024. This growth was primarily driven by increased project activity and energy asset development. Operating income for the nine months ended September 30, 2025, grew to $83.8 million from $64.1 million in 2024, reflecting improved operational efficiency. However, the company experienced a negative cash flow from operating activities of $(37.5) million, a substantial decrease from $99.2 million in 2024, largely due to changes in working capital, including a $(61.8) million increase in unbilled revenue and a $(59.7) million decrease in Federal ESPC receivable. Capital investments in energy assets remained high at $(283.4) million, indicating continued strategic expansion. A notable risk emerged with a $26.7 million deposit paid to Powin LLC, a battery energy storage system supplier, which filed for Chapter 11 bankruptcy on June 10, 2025, potentially impacting future projects and financial stability.

Why It Matters

Ameresco's strong revenue and net income growth signal healthy demand for energy efficiency and renewable solutions, which is positive for investors seeking exposure to the green energy sector. However, the significant negative shift in cash flow from operations, coupled with the $26.7 million exposure to a bankrupt supplier, Powin LLC, raises concerns about liquidity management and supply chain resilience. This could impact Ameresco's ability to fund future projects and maintain its competitive edge against rivals like Johnson Controls or Siemens, who may have more diversified supply chains. Employees might see continued job security in a growing sector, but the supplier issue could introduce project delays, affecting customer satisfaction and market perception.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant negative cash flow from operating activities, which shifted from a positive $99.2 million in the nine months ended September 30, 2024, to a negative $(37.5) million in the same period of 2025. This is exacerbated by a $26.7 million deposit to Powin LLC, a key battery energy storage system supplier that filed for Chapter 11 bankruptcy on June 10, 2025, indicating potential supply chain disruptions and financial loss.

Analyst Insight

Investors should closely monitor Ameresco's upcoming earnings calls for updates on cash flow management strategies and the resolution of the Powin LLC bankruptcy. Consider holding existing positions but deferring new investments until there's clearer guidance on how the company plans to mitigate the impact of negative operating cash flow and supply chain risks.

Financial Highlights

revenue

$1,351.1M

total Assets

$4,426.4M

total Debt

$1,883.8M

net Income

$25.9M

eps

$0.49

cash Position

$94.6M

revenue Growth

+9.2%

Key Numbers

• $1.35B — Revenues (Increased 9.2% for the nine months ended September 30, 2025, compared to $1.24B in 2024.)
• $25.9M — Net Income Attributable to Common Shareholders (Increased 31.7% for the nine months ended September 30, 2025, from $19.7M in 2024.)
• $(37.5)M — Cash Flows from Operating Activities (Significant decrease from $99.2M in 2024, indicating liquidity challenges.)
• $26.7M — Deposit to Bankrupt Supplier (Exposure to Powin LLC, a battery energy storage system supplier that filed for Chapter 11 bankruptcy.)
• $283.4M — Capital Investments in Energy Assets (Continued high investment in strategic expansion for the nine months ended September 30, 2025.)
• $0.49 — Diluted EPS (Increased from $0.37 in 2024 for the nine months ended September 30, 2025.)
• $83.8M — Operating Income (Increased from $64.1M in 2024 for the nine months ended September 30, 2025.)

Key Players & Entities

• Ameresco, Inc. (company) — registrant
• Powin LLC (company) — battery energy storage system supplier that filed for Chapter 11 bankruptcy
• $1,351.1 million (dollar_amount) — total revenues for the nine months ended September 30, 2025
• $1,237.3 million (dollar_amount) — total revenues for the nine months ended September 30, 2024
• $25.9 million (dollar_amount) — net income attributable to common shareholders for the nine months ended September 30, 2025
• $19.7 million (dollar_amount) — net income attributable to common shareholders for the nine months ended September 30, 2024
• $(37.5) million (dollar_amount) — cash flows from operating activities for the nine months ended September 30, 2025
• $99.2 million (dollar_amount) — cash flows from operating activities for the nine months ended September 30, 2024
• $26.7 million (dollar_amount) — deposit paid to Powin LLC
• September 30, 2025 (date) — end of the reporting period

FAQ

Risk Factors

• Supplier Bankruptcy Risk [high — financial]: Ameresco paid a $26.7 million deposit to Powin LLC, a battery energy storage system supplier, which filed for Chapter 11 bankruptcy on June 10, 2025. This deposit is at risk, potentially impacting future projects and the company's financial stability.
• Working Capital Management [high — operational]: The company experienced a significant negative cash flow from operating activities of $(37.5) million for the nine months ended September 30, 2025, a sharp decline from $99.2 million in the prior year. This was largely driven by a $(61.8) million increase in unbilled revenue and a $(59.7) million decrease in Federal ESPC receivable, indicating potential challenges in managing working capital and project cash cycles.
• Increased Debt Levels [medium — financial]: Long-term debt and financing lease liabilities increased substantially from $1,483.9 million at December 31, 2024, to $1,716.7 million at September 30, 2025. This increase, coupled with negative operating cash flows, raises concerns about the company's leverage and ability to service its debt.

Industry Context

Ameresco operates in the energy efficiency and renewable energy solutions sector, which is characterized by increasing demand driven by sustainability goals and regulatory mandates. The industry involves complex project development, long sales cycles, and reliance on government incentives and financing. Competition comes from a mix of specialized energy service companies (ESCOs), engineering firms, and larger diversified industrial companies.

Regulatory Implications

Ameresco's operations are subject to various regulations related to energy efficiency standards, environmental compliance, and government contracting. Changes in energy policy, tax incentives, or government procurement rules can significantly impact project viability and financial performance. The bankruptcy of a key supplier like Powin LLC also highlights supply chain risks within the evolving regulatory landscape for energy storage.

What Investors Should Do

1. Monitor working capital trends closely.
2. Assess the impact of the Powin LLC bankruptcy.
3. Analyze the growth in long-term debt.
4. Evaluate the growth in energy assets.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Period of reported revenue growth and net income increase, but also negative operating cash flow and significant capital investments.
• 2025-06-10: Powin LLC files for Chapter 11 bankruptcy — Introduced a significant financial risk for Ameresco due to a $26.7 million deposit paid to the supplier.
• 2024-09-30: Nine months ended September 30, 2024 — Prior year period for comparison, showing positive operating cash flow of $99.2 million.
• 2024-12-31: Year-end balance sheet date — Baseline for comparison of assets and liabilities at the start of the current reporting period.

Glossary

Federal ESPC receivable

Receivables related to Energy Savings Performance Contracts with federal government entities. These contracts often involve long payment cycles and specific government funding mechanisms. (A significant component of Ameresco's receivables, a decrease in which contributed to negative operating cash flow.)

Unbilled revenue

Revenue that has been earned by the company but has not yet been invoiced to the customer. This often occurs in long-term projects where revenue is recognized over time. (An increase in unbilled revenue significantly impacted Ameresco's cash flow from operations, indicating a potential mismatch between revenue recognition and cash collection.)

VIEs

Variable Interest Entities are legal entities whose ownership interests lack sufficient equity at risk for the entity to finance its activities without support from other parties. Companies consolidate VIEs if they have the power to direct the activities that most significantly impact the entity's economic performance. (Ameresco consolidates VIEs, and their restricted assets and liabilities are included in the consolidated balance sheet, impacting overall financial figures.)

Energy assets, net

Represents the net book value of assets developed or acquired by Ameresco that generate energy or provide energy-related services, often through long-term contracts. (This is a core asset class for Ameresco, showing significant investment and growth, indicating strategic focus on asset development.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Ameresco has demonstrated strong top-line growth with revenues increasing by 9.2% to $1,351.1 million and net income rising by 31.7% to $25.9 million. However, a critical divergence is observed in cash flow from operations, which plummeted from a positive $99.2 million to a negative $(37.5) million, primarily due to adverse working capital movements. While operating income improved, the negative cash flow and the emergence of a significant supplier bankruptcy risk present a mixed financial picture compared to the previous reporting period.

Key Financial Figures

• $0.0001 — stered Class A Common Stock, par value $0.0001 per share AMRC New York Stock Exchange

Filing Documents

• amrc-20250930.htm (10-Q) — 2133KB
• amrc_20250930x10-qxexx311.htm (EX-31.1) — 12KB
• amrc_20250930x10-qxexx312.htm (EX-31.2) — 14KB
• amrc_20250930x10-qxexx321.htm (EX-32.1) — 8KB
• 0001628280-25-048545.txt ( ) — 12072KB
• amrc-20250930.xsd (EX-101.SCH) — 72KB
• amrc-20250930_cal.xml (EX-101.CAL) — 107KB
• amrc-20250930_def.xml (EX-101.DEF) — 362KB
• amrc-20250930_lab.xml (EX-101.LAB) — 870KB
• amrc-20250930_pre.xml (EX-101.PRE) — 618KB
• amrc-20250930_htm.xml (XML) — 2328KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Condensed Consolidated Financial Statements

Item 1. Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets at September 30, 2025 (Unaudited) and December 31, 2024 1 Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2025 and 2024 (Unaudited) 3 Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September, 30 2025 and 2024 (Unaudited) 4 Condensed Consolidated Statements of Changes in Redeemable Non-Controlling Interests and Stockholders' Equity for the three and nine months ended September 30, 2025 and 2024 (Unaudited) 5 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (Unaudited) 7 Notes to Condensed Consolidated Financial Statements (Unaudited) 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 31

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 41

Controls and Procedures

Item 4. Controls and Procedures 41

- OTHER INFORMATION

PART II - OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 43

Risk Factors

Item 1A. Risk Factors 43

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 43

Other Information

Item 5. Other Information 43

Exhibits

Item 6. Exhibits 45

Signatures

Signatures 46 Table of Contents

- Financial Information

Part I - Financial Information

Condensed Consolidated Financial Statements

Item 1. Condensed Consolidated Financial Statements AMERESCO, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) September 30, 2025 December 31, 2024 (Unaudited) ASSETS Current assets: Cash and cash equivalents (1) $ 94,551 $ 108,516 Restricted cash (1) 98,504 69,706 Accounts receivable, net of allowance of $ 1,022 and $ 845 , respectively (1) 253,793 256,961 Accounts receivable retainage, net 48,846 39,843 Unbilled revenue (1) 691,316 644,105 Inventory, net 12,785 11,556 Prepaid expenses and other current assets (1) 189,747 145,906 Income taxes receivable 3,603 1,685 Project development costs, net 27,351 22,856 Total current assets (1) 1,420,496 1,301,134 Federal ESPC receivable 516,326 609,128 Property and equipment, net (1) 9,848 11,040 Energy assets, net (1) 2,117,460 1,915,311 Deferred income tax assets, net 76,348 56,523 Goodwill, net 69,245 66,305 Intangible assets, net 8,109 8,814 Right-of-use assets, net (1) 76,371 80,149 Restricted cash, non-current portion (1) 22,541 20,156 Other assets (1) 109,666 89,948 Total assets (1) $ 4,426,410 $ 4,158,508 LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, AND STOCKHOLDERS' EQUITY Current liabilities: Current portions of long-term debt and financing lease liabilities, net (1) $ 167,083 $ 149,363 Accounts payable (1) 569,600 529,338 Accrued expenses and other current liabilities (1) 105,829 107,293 Current portions of operating lease liabilities (1) 8,062 10,536 Deferred revenue 87,297 91,734 Income taxes payable 1,428 744 Total current liabilities (1) 939,299 889,008 Long-term debt and financing lease liabilities, net of current portion, unamortized discount and debt issuance costs (1) 1,716,689 1,483,900 Federal ESPC liabilities 499,074 555,396 Deferred income tax liabilities, net 2,771 2,223 Deferred grant income 5,479 6,436 Long-term operating lease liabilities, net of current portion (1) 56,032 59,479 Other

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