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Presentation

Ameresco, Inc. misses on earnings expectations. Reported EPS is $-0.33 EPS, expectations were $-0.27.

Operator: Thank you for standing by. My name is Jordan, and I will be the conference operator today. At this time, I would like to welcome everyone to the Q1 2026 Ameresco, Inc. 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 ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Leila Dillon, Chief Marketing Officer. Please go ahead. Thank you, and good afternoon, everyone.

Leila Dillon: 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; Mike Backus, who will become the CEO of Neogenix Fuel; Nicole Bulgarino and Lou Maltezos, newly appointed co-presidents of Ameresco, Inc.; and Mark A. Chiplock, Chief Financial Officer. In addition, Josh Barabow, our Chief Investment Officer, will also 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.

In particular, some of the commentary is predicated on the expected closing of the Neogenix Fuels transaction. Please refer to today’s earnings materials, the safe harbor language on Slide two 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 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? Thank you, Leila.

George P. Sakellaris: And good afternoon, everyone. I am pleased to report that we had a solid start to the year, with the Ameresco, Inc. team delivering 14% revenue growth, despite experiencing adverse weather conditions affecting several of our RNG facilities. New business also remained quite strong, with 20% growth in awarded backlog, against a backdrop of significant activity, especially with the federal government. We also announced several important corporate actions which we have taken to better position ourselves for substantial future growth opportunities while also maximizing shareholder value. Today, after the market closed, we announced the signing of a transformational agreement with HASI for a $400 million strategic investment in our biofuels business.

This agreement will create a newly formed joint venture named Neogenix Fuels. Ameresco, Inc. has been a leader in the biofuels industry for the last 25 years. When completed, this transaction will enable us to monetize a portion of the $1.8 billion enterprise value that we have created in our biogas business. Of the $400 million commitment from HASI, $300 million will be directly invested in Neogenix Fuels to drive business growth, and $100 million will be direct compensation to Ameresco, Inc. for the existing business, which would be used for strategic opportunities, working capital, and deleveraging throughout the year. I would like to turn the call over to Mike Backus, a member of my management team for nearly 30 years and who will become Chief Executive Officer of Neogenix Fuels, to comment on this exciting introduction.

Mike? Thank you, George. Good afternoon, everyone. First and foremost, I very much appreciate the confidence and trust that George and HASI leadership have bestowed on me to take the helm of what we see as a transformative business. As many of you are aware, I have been leading Ameresco, Inc.’s biogas business since the founding of the company, helping to create one of the country’s largest greenfield developers of biogas projects. We are thrilled to be taking the next step in this evolution along with our long-term partner, HASI, with the creation of Neogenix Fuels, which will be 70% owned by Ameresco, Inc., and 30% by HASI. As part of the transaction, Ameresco, Inc. will contribute its operating biogas assets along with one of the most robust development pipelines in the industry.

The organization will be staffed by Ameresco, Inc.’s seasoned team of biogas veterans. Both Ameresco, Inc. and HASI recognize the tremendous opportunities to deliver resilient energy and biofuel solutions while building the foundation for renewable molecules and next-generation drop-in fuels of the future. This transaction represents a combination of Ameresco, Inc.’s proven history and expertise in successful biogas development with HASI’s deep sector financial knowledge and scalable capital platform. We see this partnership as positioning Neogenix to become a global industry leader in the next generation of fuels as our addressable market continues to expand. As noted, we have a signed agreement and expect the timely close to the transaction.

George, I will turn the call back to you.

George P. Sakellaris: Thank you, Mike. We are very excited about this transaction, which I believe not only recognizes the tremendous tangible value of our energy assets, but also positions Ameresco, Inc. to better drive long-term profitable growth. And also during the quarter, we strengthened our corporate structure to position us to fully execute on our great growth opportunities. We recently promoted proven leaders, Nicole Bulgarino and Lou Maltezos, to co-presidents of Ameresco, Inc., and Peter Grisakas to Chief Operating Officer. Lou and Nicole both came to Ameresco, Inc. 22 years ago with our successful Duke Solutions acquisition. As co-presidents, Nicole and Lou will work closely with me on Ameresco, Inc.’s continued growth strategy while at the same time maintaining clear and distinct areas of operational focus.

The easiest way to understand the operational alignment is to look at our current project business, which is split evenly between energy infrastructure and building efficiency. Nicole is responsible for the energy infrastructure half of the business while continuing to guide the company’s federal solutions business. Lou focuses on the building efficiency side, overseeing the core non-federal projects. Now I will ask each of them to comment on some of the market dynamics in their respective area. Nicole?

Nicole Allen Bulgarino: Thank you, George, and good afternoon, everyone. Ameresco, Inc.’s federal business continues to be a core strength of the company. We see strong demand across our traditional federal programs, including energy efficiency and infrastructure modernization with long-term ESPC and design-build work. Ameresco, Inc.’s military and civilian federal government customers remain focused on upgrading buildings, improving reliability, reducing life-cycle costs, and hardening critical facilities, and I am pleased to note a nice uptick in federal government proposal activity over the last year. Ameresco, Inc.’s longstanding relationships, technical expertise, and proven execution track record position us well to continue delivering strong results in this important market.

In parallel, we are seeing great demand for our energy infrastructure solutions. We have built a strong pipeline of large and complex projects, including transformational data center opportunities. This activity is being driven by growing demand for on-site reliable power solutions where access to utility power is constrained or delayed. We are approaching this market with discipline, focusing on larger, experienced developers and projects where Ameresco, Inc.’s behind-the-meter capabilities can provide clear value. While still disciplined in what we advance, we are encouraged by the quality and the scope of opportunities we are pursuing and how they are progressing. I will now turn the call over to Lou. Thank you, Nicole.

Lou Maltezos: It has been a very exciting time for our project business, with our long history and expertise in providing building efficiency solutions. For many of our customers, energy represents one of their single largest operating expenditures. More and more, our customers are experiencing spiking electricity prices, leading to heightened interest in energy efficiency solutions. In addition to these challenges, many customers have older, often outdated buildings with limited capital budgets to pursue new construction. So upgrading their existing facility is not only the best economic option, but it is often their only option. The cost savings generated from our energy efficiency upgrades can then be reinvested in a laundry list of facility improvements, all done by Ameresco, Inc.

As electricity prices rise, energy efficiency investments drive much faster returns, allowing our customers to tackle more and more improvement. This enables Ameresco, Inc. to execute larger, more comprehensive projects. As one of the largest energy services companies in North America, Ameresco, Inc. should be a main beneficiary of increasing energy costs for years to come. I will now turn the call back over to George for a few brief comments before Mark covers our financials. Thank you, Lou.

George P. Sakellaris: Before we turn to the financials, I want to step back and connect the themes you have heard over the last few minutes. We see the creation of Neogenix Fuels with HASI as a clear validation of the scale and value we have created in our biofuels platform, while also bringing in a strong long-term partner and incremental capital to accelerate the next phase of growth. At the same time, the leadership updates we announced reflect the depth of our bench and our focus on continuity and execution as we scale, positioning Mike to lead Neogenix Fuels and elevating Nicole and Lou as co-presidents to sharpen execution across our energy infrastructure and building efficiencies business. Together, we see these actions strengthening our operating model, enhancing our ability to deploy capital and talent where returns are most attractive, and keeping Ameresco, Inc.

firmly on the same strategic path: delivering durable growth while creating long-term shareholder value. With that, I will turn it over to Mark to walk through the core financial results and guidance reflective of the Neogenix Fuels transaction. Mark?

Mark A. Chiplock: Thank you, George. We had a solid start to the year, with total revenue of $[inaudible] million, up 14% year-over-year, reflecting broad-based growth across our core businesses, and led by continued strength in Projects and O&M. Project revenue increased 16% to $291 million, driven by solid execution across federal and key geographies as well as continued demand for both building efficiency and energy infrastructure solutions. Importantly, business development activity remained very strong. Awarded project backlog grew 20% to $2.8 billion, with over $500 million of new awards during the quarter, bringing our total project backlog to $5.3 billion. We continue to see a healthy pipeline of opportunities and strong proposal activity, particularly in the federal market.

Energy Asset revenue grew 7% to $61 million, supported by the continued expansion of our operating portfolio. We did see some weather-related impacts at certain RNG facilities during the quarter, but the underlying performance of the portfolio remains strong. Our operating energy asset base now stands at 838 megawatts, with 568 megawatts in development and construction, positioning us well for continued long-term growth. As we continue to scale this platform, we are increasingly focused on both the operational performance and the capital efficiency of our asset strategy. In line with that strategy, and as George highlighted, we entered into an agreement to sell a 30% equity interest in our biofuels business. Of the $400 million commitment from HASI, $300 million will be directly invested in Neogenix Fuels to drive business growth, and $100 million will be direct compensation to Ameresco, Inc.

for the existing business, which will be used for strategic opportunities, working capital, and deleveraging throughout the year. This transaction implies a post-money enterprise value of approximately $1.8 billion and recognizes the tremendous value embedded within our energy asset portfolio. In addition, it will allow us to retain control of the platform and bring in a trusted partner to help fund future growth, which will allow us to continue scaling the business in a capital-efficient manner. Turning back to the financials, O&M had another strong quarter, with revenue up 22%, driven by the continued additions of new long-term contracts. Our long-term O&M backlog now exceeds $1.5 billion, reinforcing the visibility and durability of this revenue stream.

Gross margin of 14.1% reflects project mix along with the impact from adverse weather conditions at certain RNG sites. We continue to make targeted investments in people, project development, and execution to support future growth. These investments drove operating expenses to $46 million during the quarter. Net interest and other expenses were slightly higher than expected, driven primarily by $1.8 million of non-cash mark-to-market impact and approximately $1 million in foreign exchange losses. Net loss attributable to common shareholders was $18.3 million, with a GAAP EPS loss of $0.35 per diluted share and non-GAAP loss per share of $0.33. Adjusted EBITDA of $40.5 million was in line with the company’s expectations. Turning to our balance sheet, we ended the quarter with $104 million of unrestricted cash.

Total corporate debt was $417 million, reflecting our investment in working capital to support continued growth across both our project and energy asset businesses. In the quarter, our senior secured lenders reaffirmed their confidence and commitment to Ameresco, Inc. by increasing our term loan by $45 million. Our corporate leverage was 3.2 times, which remains below our 3.5x covenant. Our cash generation remains solid this quarter, with adjusted cash flows from operations of approximately $62 million. On a longer-term basis, our eight-quarter rolling average adjusted cash from operations was approximately $57 million. Now turning to guidance. Given our solid start to the year and strong visibility, we would have been reaffirming our 2026 guidance, but in anticipation of the closing of the Neogenix Fuels transaction, we are updating our full-year guidance to reflect the expected impact on our reported results.

Given the structure of the transaction, we plan to consolidate Neogenix Fuels, and therefore our revenue guidance remains unchanged. Thirty percent of adjusted EBITDA and net income from the biofuels business will be attributable to HASI and reflected as noncontrolling interest. Consistent with this, our operating assets and assets-in-development metrics will reflect our 70% ownership, and the 100% of Neogenix Fuels’ assets and liabilities including all related project-level debt. HASI’s 30% ownership will be reflected as a noncontrolling interest within shareholders’ equity, representing their share of the JV’s net assets. We continue to anticipate placing approximately 100 to 120 megawatts of total energy assets in service, including two RNG plants.

Expected CapEx is $300 million to $350 million, the majority of which is expected to be funded with a combination of energy asset debt, HASI’s investment, tax equity, and tax credit sales. The revenue cadence for the remainder of the year is expected to follow our historical seasonal pattern, with results weighted towards the second half. We expect the second half to contribute approximately 60% of total 2026 revenue, consistent with recent year performance. And finally, for the second quarter, with the expectation that the Neogenix Fuels transaction will close in the quarter, we expect adjusted EBITDA of $58 million to $62 million and non-GAAP EPS of $0.18 to $0.23. Now I would like to turn the call back to George for closing comments.

George P. Sakellaris: We are not only off to a solid start in 2026, but we are also taking decisive steps to position the company to thrive long term and build shareholder value. 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 their continued support. Operator, we would like to open the call to questions now.

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Operator: We will now open the call for questions. In order to ask a question, press star followed by one on your telephone keypad. Please limit yourself to one question and one follow-up question. Your first question comes from the line of Craig Aaron from ROTH Capital Partners. Your line is live.

Analyst: Good evening, George. Congratulations on another really foundational move for the company with the investment in Neogenix here. We have advocated for this for years, and it is really just a fantastic thing that I think will generate a lot of value for your company. So congratulations.

George P. Sakellaris: Thank you. Thank you, Craig.

Analyst: As we look at the value of Neogenix, you know, a lot of people know that Mike has been incredibly loyal to your company, having built your asset portfolio from his early days, I guess, at Duke Solutions. Right? And it seems that the multiple that you are using for the enterprise value might be kind of at the low end of the range versus what some of the other public competitors are trading at. If you were to use a public mark for the valuation of this business, what are the features of this business that you would point people to that would have you compare this to some of your peers that seem to trade at a better than 15x multiple?

George P. Sakellaris: Well, we went out and we spent over a year evaluating the company and looking at various proposals and so on, and we think we got a very fair valuation for the company. And the fact that we are only selling 30% is because with the additional investment that we will make in the company, the $300 million coming into it, we will accelerate development. We have almost 10 projects under development right now, and it will help us accelerate the development. At the end of the day, we will substantially increase the value and become much more significant. And Josh did lots of the analysis. I think you might want to add some color to that.

Joshua Riggi Baribeau: Sure. Yeah. So one of the reasons we did this transaction and, of course, got board approval and we had a lot of brainpower behind the advisers we used is because we actually believe this is in line, if not above, market multiples. We are at over 20 times post-money valuation on the $1.8 billion. So again, we believe that is significantly greater than Ameresco, Inc. was trading prior to this, as well as what a lot of the prior transactions in the market—either public comps or transaction multiples in the past three, four years in the space—have been. So we are very comfortable that we created a lot of value here and unlocked a lot of value.

Analyst: Congratulations on that. The next question is also not really about the quarter. For the last many years—how long it has been, I guess, 10, 15 years—investors have had a hard time separating out the debt related to your ESPC receivables financing. There has been constant debate about do we take it out, do we leave it in. We have been squarely in the camp that you take it out because it is nonrecourse debt. It is debt where the federal government is the agency recourse there. You have never had a project not accepted by the federal government. You handled one of the biggest issues today with Neogenix that I think will drive value for the company over the long run. This is another key thing that I know that you have been bringing some creative ideas to over the last many years.

Is it possible that we see this other point of structural confusion in the market—similar changes that might allow a cleaner valuation on Ameresco, Inc. versus its peers so people can see how clearly your company is undervalued?

George P. Sakellaris: Yeah. We will go back and convince the SEC to change the way we were doing it before. You know? And you have a good point, Craig. No question about it. It is nonrecourse debt, and it should not show up as people combine it, and they indicate that the company will be over-leveraged when indeed it is not. So Mark, I might want to ask you to add color. We will not geek out on the accounting with our GAAP account,

Mark A. Chiplock: But the federal ESPC—I mean, the contract structure, I think, that the federal government likes to use—certainly, Nicole can speak more to that. So yeah, I think we are constrained a little bit, and I think some of the complexity is just really how we need to report this, not only on the balance sheet but coming through the cash flows. But we do not consider this to be debt, and so we do not include it in our reported debt in our metrics. But I do not know, at this point—I guess you will be able to tell us—you know, we see that changing of the contract structure. I do not see any. You know, it might not be a bad idea to start

George P. Sakellaris: Think about it and see if maybe we can do something. Yeah.

Analyst: Excellent. Excellent. If I could squeeze in one last question. Your EBITDA dollars are $1 million ahead of consensus, $2 million ahead of us in this quarter. You mentioned some weather headwinds that impacted things a little bit in the first quarter. Clearly, the federal business is not facing some of the potential issues from the shutdown. Everything is tracking in line. Were there any particular closeouts or big wins or big pieces of book-and-burn business that maybe contributed to the strength in the quarter, or is this just indicative of a strong start to the year?

George P. Sakellaris: It was a strong start for the year, and probably, I would say, $20 million to $30 million of next quarter revenue that we pulled into this quarter. But the weather, though, did have a major impact. We had the freeze-up on three of our RNG plants, and that was for at least a couple of weeks, Mike, or more. So we would have had an excellent quarter if that had not happened. And then, of course, the snow cover—we had more snow this season than we did the last couple of seasons. And that did not help some of the solar farms that we had. Even on the construction side, some of the solar farms, we could not get in. We had to demobilize, remobilize. But anyway, not a one-time pickup.

Mark A. Chiplock: I think it was purely mix that in a way helped to some of the impacts, but nothing unusual or one-time from a closeout perspective. Yep.

Analyst: Great. Well, thanks for taking my questions and congratulations on these big changes.

Operator: Next question comes from the line of George Gianarikas from Canaccord Genuity. Your line is live.

George Gianarikas: Hi, everyone. Good afternoon, and thank you for taking my questions. Again, maybe to focus on Neogenix. What are the plans that you have in place to accelerate growth? And are there any additional plans to maybe go public with this asset as well? Thank you.

George P. Sakellaris: You know, we always look at opportunities to maximize value. And if Craig is right, we grow it, get it to a large enough size, and then we will look at opportunities, no question about it. And as far as the money that we will invest, the $300 million, no question about it, we will accelerate the growth. Right now, we are building a couple of plants a year. I think it will take us probably a couple of years at least to get to about four plants a year, and maybe we could do a little bit better than that as we go down the road. But as you know, to permit some of these plants, it takes a couple of years. So you are not going to see anything till late 2028 and beyond. But the plan is to accelerate the growth, double up. And then Mike might want to add some more color—some other opportunities that we are looking at—that will help us accelerate the growth.

Mike Backus: Yeah. And, George, just from me again. Look. There is a tremendous amount of opportunity, I think, in our space to see some consolidation. And so there is a fair bit of, I think, platform—small—that might do M&A and help us grow the business in addition to our organic growth. As you know, to date, our portfolio has been 100% greenfield. We have not acquired anything yet. I also think that the market has really started to transition to more of a global opportunity, and I think the capital will allow us to expand our resources to potentially export some of our product that we produce today.

George Gianarikas: Thank you. And maybe as a follow-up on the cash. So you are expecting $100 million of cash from the transaction internally to Ameresco, Inc. And if I may bring this up, at some point, you are going to get, if our math is correct, about another $100 million from the SEC deal. So you will be, I would argue, at a corporate level at least, relatively underlevered. What are your plans for that about $200 million of cash infusion?

George P. Sakellaris: I can start. Look. One of our business plans is to have sufficient cash in order to be able to accelerate the growth of this company. We have been growing in the high single digits, and we want to add a few percentage points to that to get over the 10% threshold that we have established as a goal internally. And then we know—we added a substantial amount of resources in expanding our, what I call, the large energy infrastructure projects, like data centers and so on and so forth. And that is why the OpEx picked up for the first quarter, because so many of these people charge into OpEx now rather than capitalizing the cost. And then, of course, we have Europe. We have quite a few opportunities where we can expand our market and our reach.

And then, of course, if there are some strategic acquisitions, we will always be looking at them, and that, of course—rather than hiring one person at a time—when you buy a particular company, especially if they have the human resources that we will need, it will help us accelerate the business. And then to point out—

Mark A. Chiplock: I will not add too much, except what George said. I think we will take a balanced approach, George, if you look at this. I mean, this is going to be a great place for us to be when we start talking about that cash and the flexibility it will give us. So, certainly, we will focus on supporting working capital, but we will selectively delever throughout the year. We are going to want to give ourselves plenty of dry powder to stay flexible for opportunities. So yeah, this is going to be a good place for us to be. We are looking forward to all of this coming in.

George P. Sakellaris: Thanks.

Operator: Your next question comes from the line of Dhrushant Alani from Jefferies. Your line is live.

Analyst: Hi, team. Thanks for taking my question. Maybe just to follow up on the prior comment there. Maybe could you share the timeline that would take for you guys to cross over that 10% hurdle or threshold that you have set for top line, and then maybe specifically—you touched on some of the key drivers—but what would be more imminent if you had to discuss that?

Mark A. Chiplock: Yeah. So maybe just some clarity on the question. You are talking about the top line 10% growth?

Analyst: Yep.

Mark A. Chiplock: Yeah. I mean, I think that is just going to come down to execution. We feel really comfortable in the plan we put in place for the year and the visibility we have coming out of our backlog, especially with the Projects business. So yeah. I mean, that is why we said in our remarks we would have reaffirmed guidance, and revenue does not change in any of this with the transaction. So I think our plan this year probably puts us right around that 10% growth year, and we feel pretty confident about that.

Analyst: Got it. And then maybe just another question on—I know you guys talked about tax equity earlier in your comments. Have you seen any slowdown in tax equity in terms of if there have been any FIAC concerns on tax equity that have been impacting your projects? I know that we have heard some comments around FIAC for tax equity, but I do not know if that has been impacting you or not.

Joshua Riggi Baribeau: The compliance around FIAC—this is Josh—the compliance around FIAC has been more of the concern, more so than a pullback in availability. We are probably not large enough to source those mega tax equity funds or syndications that some of those sort of tier-one utility-scale developers are, or that we have also been hearing have been pulling back. We use a mix of transferability, which we are tapping into bank markets as well as corporate, and we use smaller regional banks as well as large life co’s. So we have a pretty diversified pool of tax investors or tax equity, and so far, given the strength of our pipeline, our reputation, and probably even the fact that our appetite is not huge, we have not seen any meaningful pullback because of that.

Analyst: Got it. Thank you.

Operator: Your next question comes from the line of Ben Kallo from Baird. Your line is live. Ben, your line is live.

Benjamin Joseph Kallo: Hi. Sorry about that, guys. So a couple quick ones for me. Congrats on the JV. First, if pricing is impacted, could you just maybe talk to it—just from the amount of natural gas that is being demanded to power data centers. Maybe it is a completely different market. Maybe talk to that, and then I have a follow-up.

Analyst: Second question, Peter. Peter?

Joshua Riggi Baribeau: Well, Ben, this is Josh. Let me see if I can reiterate the question. You are wondering if the price of natural gas impacts the end market for renewable natural gas, based on either data center demand or other—

Analyst: You know, will demand any RNG, or if that changes the market at all. Well, or if the data center—

Mike Backus: Yeah. I mean, I will say if you are tracking some of the stats, I think there was a whole host of projects—I think almost 200 data center projects—that have been in jeopardy because of community groups. And so a lot of data centers are looking to green their power supply to get through the concerns of some of the local community groups. So we have seen an uptick in interest in fuel, and I think part of it is it is a baseload security supply. The RNG, it is all local. So that has a lot of interest versus intermittent resources.

Analyst: Okay. A follow-on just on data centers. You guys talked about being targeted and selective. Maybe could you just talk more about where you would play in data centers, and then also if you could just mention any kind of more work you are doing with military bases as well and data centers related to the U.S. government. Thank you.

Nicole Allen Bulgarino: Yeah. So this is Nicole. To answer your second question first, we are continuing our strategy of working on military land because we feel like it is a great position for data centers to be located on. It has fewer land permitting requirements than commercial properties do. It is also usually away from communities and on secure military bases, which is another plus in the field. And certainly the ultimate tenant there serves nicely for the government IT. So that is top of our strategy, but also we are working with a lot of commercial developers who need to bring power and land solutions to the market. And we are seeing that across lots of states right now because of the constraints from the grid. And that is our specialty—doing these behind-the-meter microgrid, eventually-to-connect-to-the-grid future solutions as well.

Operator: Great. Thank you, guys.

Analyst: Uh-huh. Thanks, Ben.

Operator: Next question comes from the line of Eric Stine from Craig-Hallum. Your line is live.

Eric Stine: Hi, everyone. This is—so, obviously, I know it would be in a different form, but any thoughts about something like the joint venture that you are forming for RNG and doing that in the data center space? I know that your first award, I believe, you are counting 10% or so of the megawatts in your backlog with the expectation that you would have a partner in some ways. So just curious. I mean, is there a path to having—rather than each project maybe a separate—do you have a defined partnership where you can accelerate that?

George P. Sakellaris: Yeah. Definitely, Eric. We are looking into it. We are talking to several people, but we do not have anything concrete to announce yet. When we are ready, we will do it. But the data centers, as you know, require a rather substantial amount of capital, and even on the development stage. And so it will be good to have somebody with deep pockets that will help us accelerate the development of those data centers. Yep.

Eric Stine: Okay. And the larger infrastructure projects that you are developing and building, like we are doing the hydro plant up in Alaska, the wind farm up there, and so on—that is the infrastructure business. We are getting pretty good traction into it, in addition to the data centers. It is a good question, and we are looking into it. I will definitely stay tuned. I guess maybe my follow-up—just curious. You touched on this a little bit last quarter. But after the award that you made back in—I believe it was September—you know, I come and get the question, you know, when is the next order? So I know these projects take time. I know often that these are greenfield situations where you need to wait for the data center to even be built out before you start your work. So could you maybe just touch on the typical project you are going after and why maybe that timeline is a little longer than other parts of your business?

Nicole Allen Bulgarino: Yeah. I mean, I think you have already kind of highlighted it very well. These are complex projects, and it is not just the power side, but it is also the data center side itself and getting the right specs for the tenants that they are serving, and then matching that with the power that we can put there, matching that with the permitting, the air permitting that is required, the gas supply, the future interconnection. There is a lot of complexity there. So our pipeline consists of a lot of projects that are in various stages—some very far in development that we have been brought into for the power specifically, others we are developing together on the land side to bring solution there. When you are talking with a large amount of capital required that George mentioned, these are complex projects and just require a lot more—I mean, our normal assets require a lot of development in there, but again, having a diverse pipeline will help us hedge against when these start coming online.

Eric Stine: Got it. That is very helpful. Thank you.

George P. Sakellaris: Thank you.

Operator: Next question comes from the line of Manish Somaiya from Cantor. Your line is live.

Manish Somaiya: Thank you. Thank you for taking my question. Mark, you mentioned 60% of the earnings are in the second half. Maybe if you can just talk about the biggest execution milestones embedded in the second half outlook?

Mark A. Chiplock: I mean, we have great visibility coming out of contracted backlog, which just becomes our ability to execute conversion of that. And then there is a portion of that coming out of our awarded backlog that will require us to convert that to sales, get to a contract, and then start executing on that revenue. We drive that forward-looking view based on the best visibility we have coming out of the backlog. We feel pretty confident not only based on the mix of what is coming out of the backlog but with our ability to execute.

Manish Somaiya: Okay. And then the $522 million of new awards that you had in the quarter, maybe you can just talk about where you see the biggest opportunities going forward?

Nicole Allen Bulgarino: Certainly a lot of it is on the federal side. We have seen an uptick in activity for infrastructure modernization with GSA, with VA, even with the Department of War. So we are seeing new activity and modifications in the federal government. We also, again, on the power infrastructure side of this, are providing new projects for electrical distribution and for other generation-type projects as well.

Lou Maltezos: Yeah. Alright. I think in the rest of the projects business, we are also seeing a lot of increased demand. I mentioned in the comments that electricity prices are increasing pretty dramatically for some of our customers. That is creating a real motivation for them to get to the table and look at projects that might have been borderline in the past.

Manish Somaiya: Super helpful. Thank you so much. Congrats again on the JV.

George P. Sakellaris: Thank you, Manish.

Operator: As a reminder, if you would like to ask a question, press 1 on your telephone to ask a question or rejoin the queue. Next question comes from the line of Ryan Pfingst from B. Riley Securities. Your line is live.

Ryan James Pfingst: Hey, guys. Thanks for taking my questions.

Mark A. Chiplock: Hey, Ryan.

Ryan James Pfingst: Hey there. Mike, it would be great to hear your view on the recently finalized RVO and any expectations you might have for D3 pricing.

Mike Backus: Yeah. I think the EPA was focused on trying to get an RVO set that meets market conditions, and that is why I think we have seen the rates have been pretty steady—between $2.40 and currently, I think today was around $2.51. And I think what you are going to see if you think about where the market expansion and what is going on in the industry—we are starting to see more gas go to Canada. California is going to start seeing more gas go through their program, which is a non-RFS, SB 1440. You are going to start seeing more go to Europe. So you have some of the gas leaving the RFS program, which will just create more demand to fulfill the RVO. So I think we were happy with where it ended up on the volume.

Ryan James Pfingst: Appreciate that. And then turning to the data center opportunity, are there any updates or milestones that we should look for around the CyrusOne project as that one moves forward?

Nicole Allen Bulgarino: I mean, we are continuing to develop that, work with the timing of when the data center can be built and constructed as well, because that needs to match up with the energy build as well. We are continuing to refine those dates and when they can come online together. But in the meantime, we are continuing to work with Cyrus on other opportunities as well.

Ryan James Pfingst: Great. Thanks, Nicole. I will turn it back.

Operator: Your final question comes from the line of Noah Kaye from Oppenheimer. Your line is live.

Noah Duke Kaye: Alright. Great. Thanks for taking the questions. I want to start by congratulating Nicole and Lou and Mike on your new roles and responsibilities. Just great to see how you all and how the company has kind of continued to grow over the years. So I wish you all a lot of success. Let me ask a question, or two questions, on the JV. I just want to make sure I got this right. I guess the comments imply something like a $90 million EBITDA profile for the platform—that is where it is running for 2026. First of all, is that right? And then I guess with 74 megawatt-equivalent in the development pipeline, where does that kind of grow to, do you think, over the next three years? Because that pipeline is usually what you expect to bring online in the next three years.

Joshua Riggi Baribeau: This is Josh. I will start with the valuation. If you just look at what we have to back out for noncontrolling interest at 30%—so $22.5 million at midpoint divided by 0.3—it is more like a $75 million type of number at the midpoint for this year. Mike, in terms of growth and pipeline?

Mike Backus: Yeah. I mean, you are pretty spot on. Typically, we have visibility three years out on our pipeline, which is what we have now with the 11 projects in development, and we continue to add to that pipeline. So right now, we have good visibility through 2029, and we are working on some new awards right now that we would expect to build into that 2030 time frame and beyond.

Noah Duke Kaye: Okay. Thanks. And then I guess the follow-up is as the platform continues to grow in size, just how should we think about the ability to further recycle capital or monetize? Is this going to stay a 70/30 split? Is there any kind of an option to adjust ownership percentages going forward? Just curious about the mechanics.

Joshua Riggi Baribeau: This is Josh. I will start again. What is important to note is that Ameresco, Inc. does not have to put another dollar into this business until HASI’s $300 million commitment is exhausted. We think that will last us a few years, unless something really material and exciting comes along from an acquisition standpoint. But pure CapEx, this is multiple years’ worth of cash that Ameresco, Inc. does not have to put in. And just to be absolutely clear, those dollars will not dilute us further at 70/30 for this $400 million commitment. The natural other side of that is that all the dollars we would have normally had to put into that business ourselves are now back at Ameresco, Inc., where we can invest in Lou’s business, Nicole’s business, and the rest of what we are doing at a corporate level, including potential acquisitions if they are accretive.

I want to make sure that is clear for everyone listening, as well as yourself. I think that is our key message. After that $300 million is exhausted, then the partnership—if there are further capital calls—could be pro rata, or depending on how the partners choose to fund, that is kind of when you will get maybe a change in ownership. But as of right now, we do not have to put a dollar into this business for the foreseeable future.

Noah Duke Kaye: Yeah. I mean, you marry up the pipeline visibility with now the funding visibility. Just great to hear. Congratulations to all.

Joshua Riggi Baribeau: Thanks. And actually, I will add a comment just to be also clear. This does not change any of the strategy around nonrecourse debt and tax equity, and that is how we are able to stretch these dollars so far. We will still be levering the assets probably somewhere between 60% to 70% if we can get it on a loan-to-value on a nonrecourse basis, and monetize a majority of the tax credits themselves through partnerships or tax transfer. That is why we are able to stretch this $300 million very far and really pull in the build and potential acquisitions.

Operator: There are no further questions in the question-and-answer session. That concludes today’s meeting. You may now disconnect.

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