10-Q: Ameresco Reports Q1 2026 Results, Forms Biogas JV

Ameresco, Inc. announced its first-quarter 2026 financial results, reporting increased revenues but a wider net loss, alongside the formation of a new biogas joint venture.

Summary

• Ameresco reported total revenues of $401.5 million for the three months ended March 31, 2026, an increase of 13.8% compared to $352.8 million in the same period of 2025.
• The company experienced a net loss of $14.4 million for the quarter, compared to a net loss of $5.6 million in the prior year's first quarter.
• Net loss attributable to common shareholders was $18.3 million, or $(0.35) per share, a decrease from a net loss of $5.5 million, or $(0.10) per share, in Q1 2025.
• Gross profit increased by 8.8% to $56.5 million, but gross profit as a percentage of revenues decreased due to energy asset production delays.
• Selling, General, and Administrative (SG&A) expenses increased by 20.3% to $46.3 million.
• Interest expense increased by 26.5% to $25.2 million, driven by higher outstanding debt.
• The company announced the formation of a new joint venture, Neogenyx Fuels LLC, with an affiliate of HA Sustainable Infrastructure Capital, Inc., to combine Ameresco's biogas business.
• Ameresco will contribute its biogas operations for a 70% equity interest, while the JV investor will contribute $400 million for a 30% interest.
• The JV transaction is expected to close in the second quarter of 2026, with $100 million of the investment paid to Ameresco as consideration for the business.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative sentiment due to the significant increase in net loss and wider loss per share, despite revenue growth and a strategic joint venture announcement. Persistent operational challenges and rising costs outweigh the positive aspects.

Positives

• Total revenues increased by 13.8% to $401.5 million in Q1 2026 compared to $352.8 million in Q1 2025.
• Project revenues increased by $39.0 million (16%), driven by growth in Europe and project timing.
• Operations and maintenance revenue increased by $5.4 million (22%).
• Energy asset revenue increased by $4.0 million (7%).
• Gross profit increased by 8.8% to $56.5 million.
• The formation of the Neogenyx Fuels LLC joint venture is expected to bring in $400 million in investment, with $100 million paid directly to Ameresco.
• Backlog increased to $5.27 billion as of March 31, 2026, from $4.90 billion in the prior year.
• 12-month project backlog stands at $1.09 billion.
• O&M backlog increased to $1.54 billion from $1.37 billion.

Negatives

• Net loss widened to $14.4 million in Q1 2026 from $5.6 million in Q1 2025.
• Net loss per share attributable to common shareholders was $(0.35) in Q1 2026, down from $(0.10) in Q1 2025.
• Gross profit as a percentage of revenues decreased due to energy asset production delays, primarily from weather effects.
• Selling, General, and Administrative (SG&A) expenses increased by 20.3% to $46.3 million.
• Interest expense increased by 26.5% to $25.2 million due to higher debt levels.
• Other expenses increased significantly due to foreign currency transaction losses.
• The company reported a loss before income taxes of $17.6 million, compared to a loss of $4.4 million in the prior year.

Risks

• Supply chain disruptions, geopolitical instability, tariffs, and trade restrictions continue to impact the global supply of, and raise prices for, necessary supplies, potentially increasing costs and causing further disruptions.
• The One Big Beautiful Bill Act (OBBB) introduces new timing requirements and phases down Investment Tax Credits (ITCs) for energy storage projects, potentially impacting eligibility for incentives and demand for solar and energy storage systems.
• Failure to meet revised domestic content or Foreign Entity of Concern (FEOC) requirements could impair the ability to qualify for tax incentives.
• The company is involved in a dispute with SCE regarding liquidated damages for battery energy storage system projects, with a potential maximum liability of $89 million.
• Powin LLC, a BESS supplier, filed for Chapter 11 bankruptcy, with Ameresco having $26.7 million in deposits at risk.
• The company experienced energy asset production delays due to weather effects.
• Seasonal fluctuations and construction cycles, particularly in colder climates and during summer months for educational institutions, can impact revenues and operating income.
• Government procurement cycles can be affected by legislative processes and funding appropriations.
• The company was in default of certain lien provisions of its August 2018 Master Sale-leaseback agreement, though a waiver was received until June 30, 2026.

Future Outlook

The company expects to fund operations through at least May 2027 with existing cash, working capital, revolving credit facility availability, potential increases to the facility, develop-and-sell asset transactions, sales of tax attributes, and access to credit and equity markets. They plan to invest approximately $200 million to $250 million in capital expenditures for the remainder of 2026, primarily for new renewable energy plants, largely funded by project finance debt. Additional project financings of approximately $150 million to $200 million are planned for the remainder of 2026.

Management Comments

• The company is committed to staying at the leading edge of innovation in the energy sector and believes the next decade will see dramatic changes in power infrastructure with a shift towards distributed assets, storage, and microgrids.
• Ameresco is evaluating the accounting and financial statement impact of the Neogenyx Fuels LLC joint venture transaction and currently expects to consolidate the joint venture on a prospective basis.
• The company continues to monitor macroeconomic conditions to remain flexible and optimize its business to address challenges presented by inflation, supply chain issues, and geopolitical events.
• Ameresco believes increasing demand for electricity, rising oil and utility rates, and growing grid instability are driving demand for its solutions, but this may also increase competition.

Industry Context

StockSavvy.ai notes that Ameresco's Q1 2026 results reflect the ongoing energy transition, with increased revenues driven by project growth in Europe and renewable energy assets. However, the wider net loss highlights persistent challenges like supply chain disruptions, weather-related delays, and rising interest expenses, which are common themes across the energy infrastructure sector. The formation of the biogas joint venture with HA Sustainable Infrastructure Capital signals a strategic move to monetize and grow specific business segments, a trend seen among companies seeking to optimize capital allocation and focus on core competencies.

Comparison to Industry Standards

• Ameresco's revenue growth of 13.8% in Q1 2026 is solid, but the widening net loss and decreased gross profit margin suggest operational pressures that may be more pronounced than some peers in the renewable energy project development sector.
• Competitors like NextEra Energy (NEE) and Brookfield Renewable Partners (BEP) often report more stable margins due to scale and diversified project pipelines, though they also face supply chain and interest rate headwinds.
• The company's backlog growth to $5.27 billion is a positive indicator, aligning with industry trends of increasing demand for energy efficiency and renewable solutions, but the conversion rate and profitability of this backlog remain key performance indicators to watch.
• The formation of a joint venture for biogas aligns with industry strategies to leverage specialized assets and attract strategic capital, similar to how other renewable energy companies partner for specific technologies or regions.

Legal Proceedings

• Discussions with SCE are ongoing regarding the obligation to pay liquidated damages (up to $89 million) and the applicability of force majeure relief for battery energy storage system projects.
• Ameresco is involved in various other claims and legal proceedings generally incidental to its normal business activities, but does not believe the ultimate resolution will have a material adverse effect on its financial condition or results of operations.

Stakeholder Impact

• Shareholders: The wider net loss and decreased earnings per share may negatively impact shareholder value in the short term, while the JV formation could offer long-term growth potential.
• Creditors: Increased debt levels and interest expenses could impact debt service coverage ratios, though the company believes it has sufficient liquidity.
• Suppliers: Continued supply chain disruptions and increased costs for materials and components may affect supplier relationships and project timelines.
• Customers: Project delays due to weather and supply chain issues could impact customer satisfaction and project completion timelines.

Next Steps

• Close the Neogenyx Fuels LLC joint venture transaction, expected in the second quarter of 2026.
• Continue discussions with SCE regarding the final resolution of liquidated damages and force majeure relief for the battery energy storage system projects.
• Continue to monitor macroeconomic conditions and adjust business strategies as necessary.
• Invest approximately $200 million to $250 million in capital expenditures during the remainder of 2026.
• Secure additional project financings of approximately $150 million to $200 million during the remainder of 2026.

Key Dates

Recommendation

While revenue growth and a strategic joint venture are positive, the significant increase in net loss, wider loss per share, and persistent operational challenges (production delays, rising costs) warrant caution. The company's ability to manage these issues and execute on its substantial backlog will be critical. The JV provides a path for growth and capital infusion, but the immediate financial performance is concerning. A 'hold' recommendation allows investors to await further clarity on operational improvements and the successful integration and performance of the new JV.

Keywords

Ameresco, 10-Q, Quarterly Report, Energy Infrastructure, Energy Efficiency, Renewable Energy, Biogas, Joint Venture, Neogenyx Fuels, Financial Results, Revenue, Net Loss, Backlog, SEC Filing