10-Q: Ameresco Reports Q2 2026 Results: Revenue Up, Net Loss Widens

Ameresco, Inc. announced its second quarter 2026 financial results, showing a 9.1% increase in revenue but a net loss attributable to common shareholders.

Summary

• Ameresco reported revenues of $515.5 million for the three months ended June 30, 2026, an increase of 9.1% compared to $472.3 million in the same period of 2025.
• For the six months ended June 30, 2026, revenues were $916.9 million, up 11.1% from $825.1 million in the prior year.
• Gross profit increased by 24.5% to $91.3 million for the three-month period and by 18.0% to $147.8 million for the six-month period.
• However, net income attributable to common shareholders decreased to $9.7 million for the three months ended June 30, 2026, from $12.9 million in the prior year.
• For the six-month period, the company reported a net loss attributable to common shareholders of $8.6 million, compared to a net income of $7.4 million in the prior year.
• Selling, general, and administrative expenses increased by 4.0% for the three-month period and 11.4% for the six-month period.
• Interest expense increased significantly by 24.0% for the three-month period and 25.2% for the six-month period, primarily due to higher outstanding debt.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive, with revenue growth and improved gross margins offset by a net loss attributable to common shareholders and increased interest expenses.

Positives

• Total revenues increased by 9.1% to $515.5 million for the three months ended June 30, 2026, and by 11.1% to $916.9 million for the six months ended June 30, 2026.
• Gross profit saw a substantial increase of 24.5% to $91.3 million for the three-month period and 18.0% to $147.8 million for the six-month period.
• Gross profit as a percentage of revenues improved to 17.7% from 15.5% for the three-month period and to 16.1% from 15.2% for the six-month period.
• The U.S. Federal segment showed strong revenue growth of 55.3% for the three-month period and 74.2% for the six-month period.
• The Renewable Fuels segment revenue increased by 26.6% for the three-month period and 15.4% for the six-month period.
• The Europe segment revenue increased by 9.7% for the three-month period and 18.6% for the six-month period.
• The company has a strong project backlog of $6.7 billion as of June 30, 2026, up from $5.1 billion in the prior year.

Negatives

• Net income attributable to common shareholders decreased by 24.5% to $9.7 million for the three months ended June 30, 2026.
• The company reported a net loss attributable to common shareholders of $8.6 million for the six months ended June 30, 2026, a significant decline from a net income of $7.4 million in the prior year.
• Interest expense and interest income, net, increased by 24.0% for the three-month period and 25.2% for the six-month period.
• Other expenses (income), net, shifted from a net income of $6.1 million in Q2 2025 to a net expense of $2.3 million in Q2 2026.
• Net income attributable to non-controlling interests and redeemable non-controlling interests increased significantly, impacting net income attributable to common shareholders.
• The North America Regions segment experienced a revenue decrease of 6.7% for the three-month period and 6.8% for the six-month period.
• The All Other segment saw a revenue decrease of 5.6% for the three-month period and 5.8% for the six-month period.

Risks

• Global economic conditions, including tariffs, supply chain challenges, geopolitical instability, and evolving international relations, continue to impact supply and prices for necessary materials.
• The company faces risks related to the potential impact of federal policies and clean energy tax incentives, including new timing requirements and phase-downs for solar and energy storage projects.
• Failure to meet domestic content or Foreign Entity of Concern (FEOC) requirements could impair eligibility for incentives, adversely affecting revenue and margins.
• The company is involved in a dispute with Southern California Edison (SCE) regarding substantial completion of battery energy storage system projects, with potential liquidated damages up to $89 million.
• Powin LLC, a battery energy storage system supplier, filed for Chapter 11 bankruptcy, resulting in a potential loss of up to $26.7 million in deposits paid by Ameresco.
• The company is subject to seasonal fluctuations and construction cycles, particularly in northern climates and during summer months at educational institutions.
• Government customers' fiscal year procurement cycles and potential delays in legislative processes can affect contract performance and revenue recognition.
• The company faces risks associated with climate change, including more frequent and severe weather events that can interfere with project completion.

Future Outlook

The company expects to continue facing supply chain disruptions, inflation, and geopolitical challenges. Demand for energy infrastructure and solutions is expected to increase due to rising electricity demand, utility rates, and grid instability, though this may also increase competition. The company plans to invest approximately $120 million to $170 million in capital expenditures during the remainder of 2026, primarily for new renewable energy plants, funded by project finance debt and tax transfers. Approximately $50 million to $75 million of this is expected for the Neogenyx Fuels joint venture.

Management Comments

• The company believes the increasing demand for electricity, rising oil and utility rates, and growing grid instability are driving demand for its energy infrastructure and other solutions.
• Management continues to monitor macroeconomic conditions to remain flexible and optimize the business to address challenges.
• Management expects a higher effective tax rate benefit in 2026 as compared to 2025, primarily attributable to plans to generate and hold more investment tax credits on energy assets placed into service during 2026.
• Management continues to evaluate market conditions for opportunities to monetize investment tax credits on favorable terms.

Industry Context

StockSavvy.ai notes that Ameresco's performance aligns with broader industry trends favoring renewable energy and energy efficiency solutions, driven by increasing electricity demand and government incentives. However, the company is also exposed to industry-wide challenges like supply chain disruptions and evolving regulatory landscapes.

Comparison to Industry Standards

• The company's revenue growth of 9.1% for the quarter and 11.1% for the six months is solid, but the net loss for the six-month period is a concern. Industry peers in the renewable energy sector often show strong revenue growth, but profitability can be volatile due to project cycles and financing costs.
• The increase in interest expenses is a common challenge for companies with significant debt financing, which is prevalent in the capital-intensive energy infrastructure sector.
• The company's backlog of $6.7 billion indicates a strong pipeline, which is a positive indicator compared to many competitors in the project-based energy services sector.
• The impact of supply chain disruptions and inflation is a widespread issue affecting the entire energy and construction industry, with companies like Ameresco needing to manage these costs effectively to maintain margins.

Legal Proceedings

• Dispute with Southern California Edison (SCE) regarding substantial completion of battery energy storage system projects, with potential liquidated damages up to $89 million.
• The company is involved in other claims and legal proceedings generally incidental to its normal business activities, but does not believe their ultimate resolution will have a material adverse effect on its financial condition or results of operations.

Stakeholder Impact

• Shareholders: The net loss for the six-month period and decreased net income for the quarter may negatively impact shareholder value and sentiment.
• Creditors: Increased interest expenses and debt levels could be a concern for creditors, although the company maintains availability under its revolving credit facility.
• Suppliers: Continued supply chain disruptions and increased costs for materials could impact supplier relationships and project timelines.
• Customers: The company's ability to deliver projects on time and within budget, despite supply chain issues, is crucial for maintaining customer satisfaction and future contracts.

Next Steps

• Continue to monitor global economic conditions and supply chain challenges.
• Evaluate opportunities to monetize investment tax credits.
• Manage capital expenditures and ensure alignment with hurdle rates.
• Continue to fund operations through cash flow, credit facilities, and equity.
• Monitor the Powin LLC bankruptcy proceedings and potential loss of deposits.
• Address the ongoing dispute with SCE regarding liquidated damages.

Key Dates

Recommendation

Ameresco shows revenue growth and improved gross margins, indicating operational strength. However, the shift to a net loss for the six-month period, coupled with increased interest expenses and the ongoing SCE dispute, introduces significant uncertainty. The strong backlog is a positive, but the current profitability concerns and external risks warrant a cautious 'hold' stance until a clearer path to sustained profitability emerges.

Keywords

energy infrastructure, renewable energy, energy efficiency, project revenue, operations and maintenance, energy assets, joint venture, investment tax credits