Ameresco, Inc. Class A Stock

Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 2026 Amoresco Incorporated Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and your session. To ask a question, press star 1 on your telephone keypad. To withdraw your question, press star 1 again. Please limit questions to one and one follow-up.

And we do ask that you limit questions to one-on-one follow-up and then rejoin the queue. It is now my pleasure to turn the call over to Leila Dillon, Chief Marketing Officer. Please go ahead.

Thank you, Tina, and good afternoon, everyone. We appreciate you joining us for today's call. Our speakers on the call today will be George Sakolaris, Amoresco's Chairman and Chief Executive Officer, Nicole Bulgarino, and Mark Chiplock, Chief Financial Officer. In addition, Josh Barabo, 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.

Please refer to today's earnings materials, the safe harbor language, on your basis unless otherwise noted. now turn the call over to George. George? Thank you, Leila, and good afternoon, everyone.

Q2 was a transformational quarter for Amoresco, highlighted by exceptional execution and strong financial performance. First, we had a record of $1.8 billion of new awards. driven by $1.2 billion for data centers and $600 million for our other key markets. Second, we closed our new Janix joint venture with HACI, providing us with significant external capital to accelerate growth in all of our business lines. And we announced our first successful delivery of RNG into the European compliance system. markets. Third, positioned MRSQ into two core pillars and we are releasing a new rebranded corporate identity to reflect the updated position. And finally, we successfully brought online the 250 megabits NAPONI battery energy storage system. one of the largest energy storage projects in Canada. And we energize the 560 megawatt solar project in Greece, one of the largest projects in Europe.

Many of you have been anticipating updates on our involvement in the data center market. There is a growing demand for reliable power infrastructure and increasingly favorable policy for on-site power infrastructure, encouraging hyperscale customers to secure dedicated on-site power solutions. Combined with MRSCO's integrated capabilities, we are well positioned to deliver solutions that provide speed, reliability, and the energy independence that these customers need. During the Quora, several opportunities advanced to the point where they met our criteria for inclusion in our awarded backlog. Importantly, the projects we added to our backlog represent only a portion of our broader pipeline. As we continue to advance additional data center opportunities, we will remain highly selective in our partnerships and disciplined in our approach. We expect the amount of backlog added from these opportunities to increase as development progresses, project scopes are finalized, and they convert to contracted backlog.

As you will see in our updated corporate presentation, the company is well positioned to flourish in the current market environment. With our recent promotions of Nicole Polgarino and Lou Maltesos to co-presidents, we have positioned the company to address two core market pillars. power infrastructure, and building and public infrastructure. This strategic positioning reinforces MRS's standing as one of the world's leading energy infrastructure companies, focused on delivering integrated solutions to provide reliable power and modernize infrastructure. With a powerful combination of market catalysts and a robust pipeline of opportunities, we are confident in our ability to drive exceptional long-term profitable growth. With that, I would like to turn the call over to Nicole to provide some additional details about the exciting data center activities as well as other notable project wins and business opportunities. Nicole?.

Thank you, George, and good afternoon, everyone. As George highlighted, Amoresco made significant progress with our power infrastructure business during the quarter. The backlog additions we announced today are the result of months of working to secure, develop, and advance opportunities with leading partners across the data center ecosystem. system. Our strategy remains highly focused and selective, partnering with experienced developers, operators, hyperscalers, and capital providers, while concentrating exclusively on on-site power data solutions. This landscape is dynamic and often requires persistence and flexibility with solutions due to permitting, gas supply, and specific tenant needs. This is where Amoresco's decades of experience developing, delivering, owning, and operating critical energy infrastructure provides us with a clear, advantage. During this quarter, we added three new data center projects to our awarded backlog, bringing our total to five data center projects in addition to the Lelore data center in our energy assets portfolio.

These projects further expand our presence in the nation's most active data center markets, adding both Texas and Arizona to our existing footprint of data center projects. Collectively, they will represent more than one gigawatt of power generation and showcase the breadth of Amoresco's capabilities. The solutions we are providing include a combination of reciprocating engines, gas turbines, fuel cells, battery energy storage systems, and integrated microgrids designed to deliver deliver the reliability required by today's most demanding data center customers. These awarded projects also only represent a portion of the opportunities we are actively developing. We continue to see exceptional demand for on-site power solutions and are encouraged by both the scale and the quality of our growing pipeline. We are engaged with many of the industry's leading data center partners, and we believe our differentiated capabilities position us extremely well to capitalize on the significant opportunities ahead. We look forward to sharing additional developments as we continue to convert this momentum into backlog and long-term profitable growth.

While the data center activity was certainly a highlight of the quarter, it is also important to note that our momentum extends well beyond this market. We also secured a significant amount of new project awards across a broad range of geographies, customers, and in-market, underscoring the strength and diversity of our business. These wins reflect continued demand for Amoresco's comprehensive energy infrastructure solution and demonstrate our ability to capitalize on the opportunities across multiple verticals while maintaining a balanced and resilient growth profile. I'll now turn the call over to Mark to cover our strong Q2 final.

financial performance. Mark. Thank you, Nicole, and good afternoon, everyone. Q2 was a strong quarter across the board. We delivered revenue of $515 million and made meaningful progress on the priorities that matter most, executing well, expanding our growth visibility through record awards, and strengthening our capital position to support the opportunities ahead. Q2 demonstrated the strength of our current operating model and the increasing visibility we are building as we work to execute the next phase of our growth strategy. Our total revenues grew by 9%, while project revenue increased 6% to $381 million. This reflects solid execution across our core project business with strength in Federal and North America and continued strong performance from our European JV. This was not just a strong quarter financially.

It was also an outstanding business development quarter. As always, the timing and extent of conversion of our backlog will depend on commercial, permitting, procurement, financing, and execution milestones. backlog provides tremendous long-term visibility as we expect to convert over the next three to four years. Q2 energy asset revenue was a clear highlight, increasing 21% to $76 million as we continue to expand the operating portfolio. During the quarter, we placed an additional 32 megawatts into operation. Our operating energy asset base now stands at 822 megawatts, with another 513 megawatts in development or construction. These figures reflect Amoresco's 70% ownership interest in the Neogenix JV. O&M also had a very strong quarter with revenue up 29%.

This remains an important part of the model for us because it builds naturally from successful project execution and creates long-term recurring revenue. continue to see solid growth in our third-party O&M business, which expands the opportunity set beyond just Amoresco-executed projects. We now provide service for over 2.5 gigawatts of third-party solar and battery storage. With long-term O&M backlog now exceeding $1.5 billion, this business continues to provide strong visibility, recurring revenue, and durability across cycles. Gross margin was 17.7%, a meaningful improvement both sequentially and year-over-year, reflecting a favorable business mix and strong execution. Net income attributable to common shareholders was $9.7 million or 18 cents per diluted share, while non-GAAP EPS was 20 cents. Adjusted EBITDA increased 12% to $62.8 million, outpacing revenue growth and reflecting strong operating execution, improved business mix, and the continued expansion of our higher margin recurring businesses. EPS reflected higher depreciation and interest expense associated with the continued growth in our energy asset portfolio, along with a lower tax benefit and the non-controlling interest impact from the neogenics transaction.

Turning to our balance sheet, unrestricted cash increased to $138 million, with corporate debt of $385 million. Our corporate leverage was 3.2 times, comfortably below our 3.5 times covenant. We also strengthened our capital position in Q2, securing $471 million of new financing commitments, including the $400 million related to the Neogenix transaction. That capital gives us added flexibility to fund growth, support our working capital needs, and continue scaling the energy assets portfolio in a disciplined way. Adjustment of operations was impacted in Q2 by the timing of project execution, billings, and collections. a strong revenue quarter included significant work performed ahead of contractual billing milestones, resulting in more cash being temporarily absorbed in working capital. Cash conversion remains a key priority for the second half. Given our strong first half performance, the visibility provided by our backlog, and the financing progress achieved in Q2, we remain confident in our 2026 outlook.

As a result, we are reaffirming our full-year guidance across all metrics and increasing our non-GAAP EPS guidance. increasing our non-GAAP EPS guidance range to be $1.15 to $1.35 as we now expect a tax benefit rate in the range of 25% to 40%. The additional expected tax benefit is supported by our planned transition to a new accounting policy for transferable tax credits in the second half of the year. This methodology better aligns earnings recognition with the period in which the investment tax credits are generated rather than assets. entire period results will be recast to enhance comparability once we make this change. Looking ahead, we expect the second half to follow our normal seasonal cadence with activity weighted somewhat more towards Q4, supported by continued project execution, backlog conversion, and disciplined cost management. Now I'd like to turn the call back to George for closing comments. Thank you, Mark.

This is a transformative time for Amoresco as we continue to execute our growth strategy. in some of the fastest growing and most attractive energy infrastructure markets. Our twin market pillars of power infrastructure and built-in and public infrastructure not only continue to drive our growth, but also provide greater diversification of the company's customers and solutions. and our decades of experience delivering reliable on-site power solutions uniquely positioned us to capitalize on the significant opportunities ahead.

We look forward to questions. Our first question is from the line of George Generegas with Canaccord Genuity. Please go ahead.

Hi everyone, thank you for taking my questions and congratulations on the data center wins. Thank you. But regarding those wins, how are project delivery commitments structured from a risk-sharing perspective? Specifically, what's the financial exposure or liquidated, excuse me, does the Amoresco bear of completion timeline slip due to equipment supply chain bottlenecks, surrogate clinician cues, or local permit? As you can imagine, it's very complex.

sensitive to our customers and to the agreements that we're in. But be assured, as Amoresco and all of our projects would be very mindful and diligent about what commitments we're being signed up to or that we're signing up to.

Thank you. And maybe a question for Mike, any update on what's happening with Neogenics, a project.

project updates, etc. Thank you. My my my key is not here, but you know, since we did. but maybe some project acquisitions that they are coming to us. So the relationship is very, very good. It gives a lot of flexibility, great capital contribution into the company, and of course, we can use the capital to grow not only that unit, but as well as the other lines of our.

I appreciate it. Thank you. Thanks, Dr. Your next question comes from the line of Steven Gingaro with Stifo. Please go ahead. Thanks. Good afternoon, everybody. Hi, Steve. Hi.

Maybe following up on George's question, does this with awards of this size, is it any different than kind of what we've become accustomed to? Yes, yes.

No, it's a great question. It's not different than the other projects that we have in the backlog, especially the federal government projects. It will say that, A, by putting these projects into the award, we have done a great, great diligence to make sure they meet the criteria that we put a particular project into the award category. They've been some kind of customers RFP. So there's some kind of exclusivity agreement between us and that base, and they have achieved certain milestones in their development process. So that's, and then if you look at it, that's how we move from the award to the, the contracts in the data centers would probably see awards will move to contracted. And then of course, once they move to contracted, you're talking 12 to three years, well actually implement the implementation schedule. But, The awards are solid and sooner or later, the time scheduled, they will move into the contracted category then of course in implementation.

Great. Thank you. And just as a quick follow-up to that is, if I assume the margin profile is similar to the legacy, activity, is that a fair place to start?.

Excellent questions. And the margin of this particular project is basically what we get for the EPC project for the federal government, which is really in the high teens.

Okay, great. Thank you. Your next question is from Eric Stein with Craig Hallam. Please go ahead.

Everyone thanks for taking the questions yes, hey, so hey so obviously a big highlight on on the awards the 1.2 billion But it sounds like pretty optimistic in terms of the pipeline so you know wondering if you know maybe not specifics But just talk in more detail of the size of that pipeline versus versus the awards that you have now pulled in, that 1.2, and if there's a way to think about where those are in their various life cycle in terms of getting to the point where you could think about pulling those into awarded background.

And Nicole basically said that what we put on the award category right now is part of what the ultimate size of this particular award will be. So we'll see that it will probably increase. I wouldn't be surprised that we will get up to $2 billion associated with this particular award that we have right now.

If you want to add any more. Sure. And we're continuing. I mean, we're in this business hourly, daily, and continuing to vet opportunities every day and being very strategic and diligent about how we are partnering with new opportunities. So we looked at hopefully adding additional projects.

as we continue to develop in this market. And to live with more clarity, as Nicole pointed out in her script, there are five opportunities in exploring the LIMORB, which is an asset base. And we're looking at at least that many more.

Got it. And then maybe for my follow up just obviously Neogenics a very successful up and structure there and maybe not exact but you know if you think about these data center opportunities and that they are very sizable is there some structure you know.

know kind of more along those lines that could help maybe speed up or you know just increase the amount that you can handle.

from a financing perspective? You're right on track. We were very successful with Neogenics and we learned a lot too in the process of doing them. The data center opportunity is very, very large and it will require a substantial amount of capital. We will be looking into the opportunity, and if the multiples are right, the right part comes along, and so on, we will do it. It is not specific to announce at this point in time, but it could be a great, great opportunity for us. between another vehicle like Neogenics. Okay, thank you.

Thank you. Your next question is from the line of Noah Kay with Oppenheimer & Company. Please go ahead.

Hi folks, good afternoon. George, now this transformational and I just need to take a step back for a bit and recognize that I believe this quarterly award is almost double any of your previous quarters in your history. It's remarkable. So congratulations. Congratulations. And I want to kind of ask a high level question, which is obviously behind the meter, you know, in time, the power becoming a key consideration for a lot of developers. I can see that's really the solution that you're architecting here. But can you just take us through how you won these awards? who the customers are. Obviously, we're not expecting you to name them, but are they hypers? Are they neos? Are they government? You know, and with the understanding that as you build these critical relationships, there's opportunity for a lot of future. Nicole worked very hard in order to get them, so I will let Nicole. No, no.

I mean, thanks. And as we shared in the previous earnings calls, I mean, our reputation with the federal government has been served as well as a great entry point into this market because we've been basically serving as the utility and the federal government's base for decades now and now getting in there. And we're working with, you know, not only data center operators, but also hyperscalers, neoclouds, and also just getting in through commercial real estate developers that had played in this market before, just now having the added power side to this, which was different than what maybe they had done before. So we like what our delivery model is and that we are bringing integrated energy solutions to it. So we're integrating different types of assets together and being able to have the ability to microgrid these. And that's been a unique offering for us. So that's a little bit more into what we're doing. And I just think that the opportunity with our experience and our flexibility and what we're offering has served us well.

the difference. Thanks, Nicole. And so just to confirm that I heard you correctly, so the customers for these data center projects, they now include hypers and neoclouds, is that correct? They are part of the deals, yes. All right. And just last follow up, you know, I guess maybe help us understand where you're at in the process of securing supply for some of those long lead items. And have you already placed orders for the receipts and some of the key equipment?.

We have not been placing orders yet for these projects because they're still in our awarded pipeline. And that's not been the model that we've chosen to do for this market. But we are working in finalizing the equipment selection with our partners, and that's just where we are. So they're at different phases in that development, but far enough along that we move them into the awarded pipeline, and then we'll continue to develop these to convert them into the contracts and then placing equipment.

That timing makes a lot of sense. Thank you. Thank you.

Thanks, Noah. Your next question is from Ryan.

Thanks with Bay Riley Securities. Please go ahead. Hey, guys. Thanks for taking my questions and congratulations on progress here. Hey, George. George, you touched on it a little earlier, but did you talk more about the potential revenue cadence for Amoresco for a project that comes online in 20, 28, 29 or 2030?.

Yes, let's say a difficult project, even a federal government project. Once we get the award, some selection by the federal government, then we do the detail engineering. It really just depends on which project it is and what we're doing. And on the data centers, I did say they indicated six months to 24 months to move the award because we We know what the development is on some of them and the milestones that they have achieved. And the hyperscalers and the developers, they move a little bit faster than the federal government. Plus, they need this stuff. You know, there is a self-emergency that they get this power up as soon as possible.

Got it. Appreciate that. And then somewhat related, can you just remind us where the CIRES I project fits in with regards to awarded or contracted backlog for you guys? And is there anything to share on how that's progressing at the Naval Air Station?.

Sure. L'amour is still in our work, moving along in that development right now. Great. I appreciate it, guys. I'll turn it back.

Okay, and once again, as a reminder, press star 1 to ask a question. Again, that is star 1. Your next question comes from Joseph Oshie.

with Guggenheim Partners. Please go ahead. Thank you, and congratulations, everyone, on such a strong result. I have two related questions. First, and these came up once already, but how should we think about this six-project pipeline, and is most of this ultimately just going to show up as gain on success? sale or could some of this end up being at least partially capitalized to your own balance sheet? And then the second question, Nicole, this is kind of a geeky one for you, are you seeing on the storage side, are most of the deployments you're seeing kind of short duration power quality types of deployments or are you seeing you seeing longer kind of multi-hour deployments focused on more resilience. Thank you.

This is Josh. I'll answer your first question. The data center opportunities are expected to be our normal EPC revenue recognition, percent complete in accordance with our spend. It's not an asset sale or there's no different balance sheet treatment than any of our other project business. Nicole on the duration what not this will be this will be straight EPC revenue, right?.

Yes, and that's a great question. Not too geeky on the other one because it's an important one. And the battery storage in these space for these will probably, I mean, it really depends on the site, but for both. One is for the resilient. Can you just with that in mind as a follow up, what's the typical duration that you're seeing?.

being on storage? Is it an hour, two hours, four hours? hours two hours all right got it got it thank you very much nicole.

And your next question comes from the line of Craig Shearer with Toohey Brothers. Please go ahead. Good afternoon. So congratulations on the expanding awarded pipeline.

In response to Eric's question, the comment was made, George, that you would had maybe another five potential counterparties projects on top of the five that are already in the awarded backlog. Are all of these roughly about the same size in terms of revenue and size of the projects? I or are you seeing them increase over time? How would you look at the pipeline outside of the awarded projects so far?.

I think they're all similar. I mean, some are, depending on which ones we're looking at, but some are like smaller phases. Others are phased out campuses, and we're maybe playing a part of one of the phases, or we may be playing all of the phases. So, it really depends on project. But I'd say that there are all these similar technologies that we mentioned before, combination of reciprocating engines, fuel cells for some of the earlier deployment ones just for speed to power, and then some of the longer out there phases using combined cycle gas turbines and just simple gas cycle turbines.

disturbance. One other thing that I want to add, so it gives you a little bit better perspective, guys, the opportunity with these data centers. These five ones that we are talking about does not include the federal government basis that they are going out and we have the enhanced list uses. And we have five of them. Including on that five, though, it's Lee Moore, which announced before, and the other one is Pearl Harbor. There's considerable potential. And the fact is, because people are beginning to realize that in order for them to be successful and win the AI race, they have to develop their own power plants, on-site generation. And that's why we came into the picture. And our track record with the federal government building these resiliency power plants with microgreens and so on, it's helping us a lot and we're getting great traction in the marketplace.

Got you. And last clarification, I believe both Stephen and Ryan asked about the timeline of awards. I think, George, you mentioned the time, you know, maybe to lock into, whether it's six, 24-plus months to firm contracts. And then you said it could take three years for bulky projects to be completed thereafter. When you think...

Up to three years, let's say we have to build 500 megawatts or 1 gigawatt day the power plant on the particular data center that might have three or four phases. And that's what's happening. Some of them, and that's why we said, we think that the ones that we have, they will become larger because they have several phases. So phase one might take six months to a year, phase two another year or so and so on. That's why I gave the perspective up to three years. And the other one, I think, Porter, gives you a little bit more color, guys. We said six months to 24 months. So most likely we will not see a big impact coming from the data centers till 28 and beyond.

Between 28 to 30, you might see a small impact next year, but the major impact will be 28 to 30. And why we're so excited though? about it because the awarded projects give you the early indication where we're going to be two to three years down the road.

Yes, got you. And when we're in the 2028 and beyond and you've got these mega projects that are lasting two to three years in several phases, is it reasonable to think that they're kind of evenly distributed in terms of revenue and margin across the years that they're live?.

Yes, it's probably a little too soon, especially, I mean, the shape of any construction project tends to be a little bit front end loaded as we're placing equipment orders and doing some of the heavy mobilization. Right. But since we now have six of these projects going on, there could be you sort of get maybe a potential smoothing. But it's a little early for that to give you an exact rule of thumb of what the revenue would look like.

All right, fair enough. Thank you very much. Yes, I was just going to ask, we're also excited that after the construction with all of these, there's a significant operation and maintenance stream associated with it. So as Mark pointed out in our earnings script, we have, you know, that's one place that we've always been focused on building that recurring revenue, which is in our next slide.

Next question comes from Swetha with Cantor Fitzgerald. Please go ahead.

Hi, Shweta here on behalf of my niche. Congrats to you, Nicole, and the entire team on the new auto win. A couple of more follow-ups on BP wins. I guess you'll be getting a few of those. First, are there three new wins affiliated to the two that were already booked? Nicole, I know you also walked us through the process of winning these bids earlier, but to the extent possible, can you help us qualify if these underlying customers are hyperscalers, co-location operators or non-hyperscalers? and take care of users. And I think one more question on DC. which is kind of very topical and it will also really help us understand is how you're thinking about risk when it comes to projects delays, especially when you think about local data center bans, zoning restrictions, or like any, what are you guys thinking about that? I think that'd be really helpful for us.

Sure, and those are good questions. And as I mentioned before, the customer types, I mean, with all of these projects, there are multiple customers in there. I mean, there's the landowner, there's the data center operator, and certainly the NDs tenants, but hyperscalers, the neocloud tenants as well. So we're working with a large set of those that are all playing in this market. As far as the risk, I would say, I mean, we've been working for federal government and for utilities for quite so many years. So similar risk for any time when you're taking on building and developing these large infrastructure projects. it's a similar risk type of profile. And what we're trying to do to mitigate some of the risk in development is making sure that we've been strategic about who we're partnering with upfront and the work that they've done already, picking partners that have local strong relations in that community, customers that have been in this market before and certainly our strategy by working on federal government lands where it has a lot less of that outside community risk as well.

So those are all things that we've been doing and why we've been working on this for the past months on this to make sure that we're having qualified these.

Thank you. That's certainly very helpful. And second, if I may, given the robust pipeline, how should we think about guidance? As in, what would it take for us to now raise the guidance from here?.

Yes, so for 2026, you know, what we have visibility to from the data centers, we've already baked in and obviously we've reaffirmed that. So we're feeling pretty good about that. We don't expect it to have too significant an impact, but what we do feel comfortable with, we've already baked into guidance for 2026.

Thank you guys, that's awesome. And with no further questions in queue, this does conclude today's conference call. Thank you very much for joining us today. You may now disconnect.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Thank you for standing by. My name is Jordan, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Q1 2026 Ameresco, Inc. Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Leila Dillon, Chief Marketing Officer.

Thank you, and good afternoon, everyone. We appreciate you joining us for today's call. Our speakers on the call today will be George Sakellaris, Ameresco's Chairman and Chief Executive Officer; Mike Bakas, who will become the CEO of Neogenyx Fuels. Nicole Bulgarino and Lou Maltezos, newly appointed Co-Presidents of Ameresco; and Mark Chiplock, Chief Financial Officer. In addition, Josh Baribeau, 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 Neogenyx Fuels transaction. 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?

Thank you, Leila, and good afternoon, everyone. I am pleased to report that we had a solid start to the year with the Ameresco team delivering 14% revenue growth despite experiencing adverse weather conditions impacting 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 Neogenyx Fuels.

Ameresco 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 Neogenyx Fuels to drive business growth and $100 million will be direct compensation to Ameresco for the existing business, which will be used for strategic opportunities, working capital and deleveraging throughout the year.

I would like to turn the call over to Mike Bakas, a member of my management team for nearly 30 years and who will become Chief Executive Officer of Neogenyx Fuels, to comment on this exciting transaction. 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'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 Neogenyx Fuels, which will be 70% owned by Ameresco and 30% by HASI.

As part of the transaction, Ameresco 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's seasoned team of biogas veterans. Both Ameresco 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'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 Neogenyx 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 a timely close of the transaction.

George, I'll turn the call back to you.

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 to better drive long-term profitable growth. 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, and Peter Christakis to Chief Operating Officer. Lou and Nicole both came to Ameresco 22 years ago with our successful Exelon Solutions acquisition.

As Co-Presidents, Nicole and Lou will work closely with me on Ameresco'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 areas. Nicole?

Thank you, George, and good afternoon, everyone. Ameresco's Federal business continues to be a core strength of the company. We see strong demand across our traditional Federal programs, including energy efficiency, infrastructure modernization with long-term ESPC and design build work. Ameresco'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's long-standing 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's behind-the-meter capabilities can provide clear value. While still disciplined in that and 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. It's 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's 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.

As electricity prices rise, energy efficiency investments drive much faster returns, allowing our customers to tackle more and more improvements. This enables Ameresco to execute larger, more comprehensive projects. As one of the largest energy services companies in North America, Ameresco should be a main beneficiary of increasing energy costs for years to come.

I'll now turn the call back over to George for a few brief comments before Mark covers our financials.

Thank you, Lou. 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 Neogenyx 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 Neogenyx Fuels and elevating Nicole and Lou as Co-Presidents to sharpen execution across our energy infrastructure and building efficiency business. Together, we see these actions as strengthening our operating model, enhancing our ability to deploy capital and talent where returns are most attractive and keeping Ameresco 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 quarter's financial results and guidance reflecting the Neogenyx Fuels transaction. Mark?

Thank you, George. We had a solid start to the year with total revenue of $401 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 $0.5 billion 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're 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 Neogenyx Fuels to drive business growth and $100 million will be direct compensation to Ameresco 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 capabilities 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 by increasing our term loan by $45 million. Our corporate leverage was 3.2x, which remains below our 3.5x covenant. Our cash generation remained solid this quarter with adjusted cash flows from operations of approximately $62 million. On a longer term basis, our 8-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 Neogenyx 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 Neogenyx Fuels, and therefore, our revenue guidance remains unchanged. 30% of adjusted EBITDA and net income from the biofuels business will be attributable to HASI and reflected as non-controlling interest. Consistent with this, our operating assets and assets and development metrics will reflect our 70% ownership in the JV.

On the balance sheet, we plan to consolidate 100% of Neogenyx Fuels assets and liabilities, including all related project level debt. HASI's 30% ownership will be reflected as a non-controlling 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 2 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 Neogenyx 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'd like to turn the call back to George for closing comments.

Thank you, Mark. As you have heard today, we are not only off to a solid start in 2026, but we are also taking the 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.

[Operator Instructions] Your first question comes from the line of Craig Irwin from ROTH Capital Partners.

George, congratulations on another really foundational move for the company with the investment in Neogenyx here. We've advocated for this for years, and it's really just a fantastic thing that I think will generate a lot of value for your company. So congratulations.

Thank you. Thank you, Craig.

So as we look at the value of Neogenyx, 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're 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?

Well, we went out and we spent over a year in evaluating the company and looking -- getting various proposals and so on. And we think we got a very fair valuation for the company. And the fact that we're only selling only 30% is because with the additional investment that we will make in the company, the $300 million coming into it, we will accelerate the 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 a lot of the analysis, and I think you might want to add some color to that.

Sure, yes. So one of the reasons we did this transaction and, of course, got a Board approval, and we had a lot of brainpower behind the advisers we used is because this actually -- we believe this is in line, if not above, market multiples. We're at over 20x post-money valuation on the $1.8 billion. So again, I think that's -- we believe that's significantly greater than Ameresco 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 3, 4 years in the space have been. So we're very comfortable that we created a lot of value here and unlocked a lot of value.

No, congratulations on that. The next question is also not really about the quarter. For the last many years, how long it's been, I guess, 10, 15 years, investors have had a hard time separating out the debt related with your ESPC receivables financing. There's been constant debate about do we take it out? Do we leave it in? We've been squarely in the camp that you take it out because it's non-recourse debt. It's debt where the Federal government is the agency of recourse there, and you've never had a project not accepted by the Federal government.

You handled one of the biggest issues today with Neogenyx that I think will drive value for the company over the long run. This is another key thing that I know that you've been bringing some creative ideas to over the last many years. Is it possible that we see this other point of sort of structural confusion in the market? Is it possible that we see similar changes that might allow a cleaner valuation on Ameresco versus its peers so people can see how clearly your company is undervalued?

Go back and convince the SEC to change the way we were doing it before. You got a good point, Craig. No question about it. It's non-recourse debt, and it shouldn't be shown up as people combine it and they indicate that the company will be over leveraged where indeed it's not. So Mark you might want to add some color to that.

Yes. We won't geek out on any accounting or GAAP accounting, but I mean 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 yes, I think we're 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 flow. So -- but yes, we don't consider this to be debt. And so we don't include it in our reported debt in our metrics. But I don't know, I guess you'll be able to tell us if we see that changing of the contract structure.

I can't see any.

It might not be a bad idea to start, think about it and see maybe we can do something.

Excellent, excellent. If I could squeeze...

We have become large enough. I'm sorry, go ahead.

Yes. Sorry, George. If I could squeeze in one last question. So your EBITDA, $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 close-outs 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?

It was a strong start for the year, and probably, I would say, $20 million to $30 million of next quarter revenue that were pulled into this quarter. But the weather though, did have a major impact. We had the freeze up on 3 of our RNG plants, and that was for at least a couple of weeks, Mike?

More.

More. So we would have an excellent quarter if that hadn't happen. And then, of course, the snow cover, we had more snow in this season than we did the last couple of seasons, and that didn't help some of the solar farms that we had. Even on the construction side, some of the solar farms, we couldn't gear in. We had to demobilize, remobilize. But anyway, not one-time pickup.

Right. I think it was purely mix that in a way helped to offset some of the winter impacts, but nothing unusual or one-time from a close-out perspective.

The next question comes from the line of George Gianarikas from Canaccord Genuity.

Again, maybe to focus on Neogenyx, 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?

Yes. We always look at opportunities to maximize value. And then if Craig is right, we grow it, get it to a large enough size and then we will look at the opportunity, no question about it. And as far the money that we will invest, the $300 million, no question about it, we will accelerate the growth. Right now, we're building in a couple of plants a year. I think it will take us probably a couple of years at least to get to about 4 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're not going to see anything until late '28 and beyond. But the plan is to accelerate the growth, double it 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.

Yes. And George, nice to hear from you again. Look, there's a tremendous amount of opportunity, I think, in our space to see some consolidation. And so there's a fair bit of, I think, platform small that might through M&A help us grow the business in addition to our organic growth. As you know, to date, our portfolio has been 100% greenfield. We haven't acquired anything yet. I also think that the market is really starting 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.

And maybe as a follow-up on the cash. So you're expecting $100 million of cash from the transaction internally at Ameresco. And if I may bring this up, at some point, you're 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 under-levered. What is -- what are your plans for that about $200 million of cash infusion?

I can start. Look, we want our business plans to have sufficient cash in order to be able to accelerate the growth of this company. We've been growing in the high-single-digits and we want to add a few percentage points to that to get over the threshold that we have established as a goal internally. And then as we know, we've added a substantial amount of resources in expanding our, what I call, the large energy infrastructure project like data centers and so on and so forth. And that's why the OpEx, it picked up in the first quarter. And because many of these people, they charge into OpEx now rather than capitalizing the cost.

And then, of course, we have Europe. We have quite a few opportunities that we can expand our market and our reach. And then, of course, if there are some strategic acquisitions, we will always be looking at that. 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, Mike, you...

Yes, I won't add too much. Like George said, I think we'll take a balanced approach, George, as we look at this. I mean this is going to be -- this is a great place for us to be when we start talking about that cash and the flexibility that it will give us. So certainly, we'll focus on supporting working capital, but we'll selectively delever throughout the year. We're going to want to give ourselves plenty of dry powder to stay flexible for opportunities. So yes, this is going to be a good place for us to be. We're looking forward to all of this coming in.

Your next question comes from the line of Dushyant Ailani from Jefferies.

Maybe just a follow-up on the prior comment there. Maybe could you share the time line that would -- it would take for you guys to kind of cross over that 10% hurdle threshold that you've set for top line? And then maybe specifically, I know you touched on some of the key drivers, but what would be more imminent if you had to kind of discuss that?

Yes. So maybe just some clarity on the question. So you're talking about the top line 10% growth?

Yes.

Yes.

Yes. I mean I think that's just going to come down to execution. I mean we feel really comfortable in the plan we've put in place for the year and the visibility we have coming out of our backlog, especially with the projects business. So yes, I mean, I think that's why we said in our remarks, we would have reaffirmed guidance, and revenue doesn't change in any of this with the transaction. So I think our plan this year probably puts us right around that 10% growth year-over-year. So we feel pretty confident about that.

Got it. And then maybe just another question on -- I know you guys talked about tax equity earlier in your comments. Have you guys seen any slowdown in tax equity in terms of -- have there been any FEOC concerns around tax equity that have been impacting your all projects? I know that we have heard some comments around FEOC for tax equity, but I don't know if that's been maybe impacting you guys or not.

The compliance around FEOC -- this is Josh. The compliance around FEOC has been more of the concern more so than a pullback in availability. We're probably not large enough to source those mega tax equity funds or syndications that some of the sort of Tier 1 utility scale developers are -- that we've also been hearing or been pulling back. I think you know we use a mix of transferability, which we're tapping into bank markets as well as corporate. And we use kind of smaller regional banks as well as large lifecos. 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 isn't huge, we have not seen any meaningful pullback because of that.

Your next question comes from the line of Ben Kallo from Baird.

So a couple of quick ones for me. Congrats on the JV. Just first, if pricing is impacted, could you just maybe talk to it just from the amount of natural gas, I think that's being demanded to power data centers? Maybe it's a completely different market, but maybe talk to that, and then I have a follow-up.

Peter?

Ben, this is Josh. Let me see if I can reiterate the question. You're wondering if the price of natural gas impacts the end market for renewable natural gas based on either data center demand or other...

Or if data center will demand any RNG or if that changes the market at all?

Yes. I mean I will say if you're tracking some of the stats, I think there's a whole host of projects, I think almost 200 data center projects that have been in jeopardy because of community groups. And so the -- 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's a baseload security supply, the RNG, it's all local. So that adds a lot of interest versus intermittent resources.

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're doing with military bases as well and data centers related to the U.S. government?

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

The next question comes from the line of Eric Stine from Craig-Hallum.

So I know it would be in a different form, but any thoughts about something like the joint venture that you're forming for RNG and doing that in the data center space. I know that your first award, I believe you're counting 10% or so of the megawatts in your backlog with the expectation that you would have a partner in some way. 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?

Yes. Definitely, Eric. We are looking into it and we are talking to several people, but we don't have anything concrete to announce yet. When we are ready, we will do it. But the data centers, as you know, they require a substantial amount of capital even in 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. And the larger infrastructure projects that we are developing and we are building, like we're doing the hydro plant up in Alaska, wind farm up there and so on. But the infrastructure business, we're getting very good traction into it in addition to the data centers. But it's a good question and we are looking into it.

Okay. I'll definitely stay tuned. I guess, maybe my follow-up. Just curious, you touched on this a little bit last quarter, but after your -- the award that you made back in, I believe it was September, I come and get the question, when is the next order? And 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 kind of the typical project you're going after and why maybe that time line is a little longer than other parts of your business?

Yes. Nicole?

Yes. I mean I think you've already kind of highlighted it very well. I mean these are complex projects. And it's not just the power side, but it's also the data center side itself and getting the right spec for the tenants that they're serving and then matching that with the power, the power that we can put there, matching that with the permitting, their permitting that's required, the gas supply, the future interconnection, there's a lot of complexities there. So our pipeline consists of a lot of projects that are in various stages, some very far in development that we've been brought into for the power specifically, others that we're developing together on the land side to bring solution there. So again, when you're talking with a large amount of capital required that George mentioned, I mean, these are complex projects and just require a lot more -- I mean, it's like our normal assets require a lot of development in there. But again, having a diverse pipeline will help us hedge against when they start coming online.

Next question comes from the line of Manish Somaiya from Cantor.

Mark, you mentioned 60% of the earnings in the second half. Maybe if you can just talk about the biggest execution milestones embedded in the second half outlook?

I don't know, I mean that I point to the biggest -- we have great visibility coming out of contracted backlog, which just becomes our ability to execute the conversion of that. And then there's a portion of that coming out of our awarded backlog that, again, will require us to convert that to sales, get to a contract and then start executing on that revenue. So again, 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's coming out of the backlog, but our ability to execute.

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

Nicole?

I think certainly a lot of it. Just on the Federal side, we have -- there's an uptick in activity for infrastructure modernization with GSA, with VA, even with the Department of War. So we're seeing new activity that modifications in the Federal government. We also, again, the power infrastructure side of this, providing new projects for electrical distribution for other generation type projects as well.

Yes. I think in the rest of -- this is Lou. In the rest of the projects business, we're 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's creating a real motivation for them to get to the table and look at projects that might have been borderline in the past.

[Operator Instructions] Next question comes from the line of Ryan Pfingst from B. Riley Securities.

Michael, it would be great to hear your view on the recently finalized RVO and any expectations you might have for D3 pricing?

Yes. I mean it's -- I think, again, the EPA was focused on trying to get an RVO set that kind of meets market conditions. And that's why I think we've seen the rates have been pretty steady between $240 and currently I think today it was around $251. And I think what you're going to see, if you think about with the market expansion and what's going on in the industry, we're starting to see more gas go to Canada. The California is going to start seeing more gas go through their program, which is a non-RFS, SB1440. You're going to start seeing more go to Europe. So you're going to have this, if you would, 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.

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?

I mean I think we're continuing to develop that and work with the timing of when the data center can be built and constructed because that needs to match up with the energy build as well. So we're continuing to refine those dates and when they can become online together. But in the meantime, we're continuing to work with Cyrus on other opportunities as well.

Your final question comes from the line of Noah Kaye from Oppenheimer.

And 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 on -- or 2 questions on the JV. I just want to make sure I got this right. I guess your comments imply something like $90 million EBITDA profile for the platform. That's where it's running for '26. 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 3 years? Because that pipeline is usually what you expect to bring online in the next 3 years.

Noah, this is Josh. I'll start with the valuation. If you just look at what we have to back out for non-controlling interest at 30%, so $22.5 million at the midpoint divided by $0.3 million, it's more of like a $75 million type of number at the midpoint for this year, Mike, in terms of growth in pipeline?

Yes. I mean you're pretty spot on. It typically represents -- we have typically visibility on 3 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're working on some new awards right now that we would expect to build into that 2030 time frame and beyond.

Okay. And then I guess the follow-up is, as the platform kind of continues to grow in size, I mean 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.

This is Josh. I'll start again. So I think what's important to note is that Ameresco does not have to put another dollar into this business until HASI's $300 million commitment is exhausted. And we think that will last us a few years unless something kind of really material and exciting comes along from an acquisition standpoint. But pure CapEx. This is multiple years' worth of cash that Ameresco does not have to put in. And just to be absolutely clear, those dollars will not dilute us further. We're at 70-30 for this $400 million commitment.

But the natural, I guess, the -- 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 just the rest of what we're doing at a corporate level, including potential acquisitions if they're accretive. So I want to just make sure that's clear for everyone listening as well as yourself.

I think that's our key message. After that $300 million is exhausted, then the partnership, if there's further capital calls, it could be pro rata or depending on how the partners choose to fund, that's kind of when you'll get maybe a change in ownership. But as of right now, we are -- we don't have to put a dollar into this business for the foreseeable future.

So you marry up the pipeline visibility with now kind of the funding visibility. Just great to hear. Congratulations to all.

And actually, sorry, I'll add a comment just to be also clear. This doesn't change any of the strategy around non-recourse debt or tax equity. And that's how we're able to stretch these dollars so far. We'll still be levering the assets probably somewhere between 60% to 70% if we can get it on a loan-to-value on a non-recourse basis and monetize the majority of the tax credits themselves through partnerships or tax transfer. So that's why we're able to stretch this $300 million very far and really pull in the build in potential acquisitions.

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

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.'s Q4 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Leila Dillon, Chief Marketing Officer. Please go ahead.

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 Sakellaris, Ameresco's Chairman and Chief Executive Officer; and Mark Chiplock, Chief Financial Officer. In addition, Josh Barbo, 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?

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 team together with the recurring revenue contributions from our energy assets and O&M businesses were key drivers to our success.

And this success was achieved even amid concerns surrounding potential of department of government efficiency actions early in the year and the 6-week federal government shutdown in the fourth quarter. Importantly, our results were broad-based with growth across all 3 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 $1.5 billion of project backlog into revenue this year we also saw excellent new business activity, including meaningful project scope increases in our federal backlog is helped to drive our total awarded backlog to over $2.5 billion, 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 U.K.-based energy consulting firm. But more recently, we can focus on expanding our business in Continental Europe. In doing business in Europe requires a localized presence, our European growth strategy has been driven by opportunistic acquisitions such as Italy-based Energos and partnerships in various target countries. We focus on smaller opportunities and then use the power of Marsco, our technology and process know-how and financial resources to accelerate and drive growth.

Geographically, we have focused on Southern and Eastern Europe in areas which are experiencing higher rates of growth with fewer large domestic entrenched competitors. -- our 51% owned joint venture with the Greek base from Negro is an excellent example of this approach. The joint venture was created in April of 2023 to pursue utility-scale PV and battery energy storage opportunities. After great success in Greece, a 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 providing additional updates 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 Morsco get benefit for them for years to come.

The first key driver is the rapidly growing demand for electricity. This has been driven by the electrification of built-ins 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, needing 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 transition infrastructure. As a result, many of our customers are choosing to install on-site canine mirror generation and storage solutions.

Marco has been providing the portfolio of the 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 micro grids. We are also exploring the next generation of energy infrastructure technologies like micro and small modular nuclear reactors. This power and storage solutions will be a key element to supporting ongoing global energy demand needs. Second, increasing energy cost is another key industry driver for which an Marasco is well positioned to benefit from, particularly through our built-in efficiency solutions as electricity prices rise, energy efficiency investments made by our customers to deliver faster payback and stronger returns.

Energy efficiency is often the most economical solution for existing buildings. According to Frost & Saleel, Ameresco is the nation's largest provider of energy efficiency services, which represent nearly half of our care product backlog. Third, the increasing stress on the country's aging energy infrastructure from high demand and the critical natural oil and interruptible power is quickly driving a growing demand for silent energy solutions high line 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 and have significant cost or production consequences.

Advancements in lithium battery technologies as well as rapidly declining costs, which have driven tremendous growth in the use of battery energy storage solutions over the last 5 years. Masco has a very long track record of providing resilient solutions at military bases across the country, keeping the 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 is very well positioned to benefit from these long-term trends that should help drive profitable growth for many more years to come.

Now I would like to turn the call over to Mark to provide financial commentary when this corners excellent results as well as provide our outlook for 2026. Mark?

Thank you, George. This was another strong quarter for Ameresco in a year defined by consistent execution. Despite the Q4 government shutdown, we delivered record quarterly revenue of $581 million, 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% and driven by strong backlog conversion and continued solid performance from our European joint venture with Canal. While we converted a significant amount of backlog in the quarter, we still maintain our total project backlog above $5 billion, reflecting sustained demand for our comprehensive energy infrastructure solutions. Energy asset revenue increased 5% and 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 Best 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 $1.5 billion. 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 billion 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 at the end of 2024 delivered solid year-over-year results. Gross margin was 16.2%, and 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 $50.9 million, compared to $47.8 million 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're 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 $18.4 million, with GAAP EPS of $0.34 and non-GAAP EPS at $0.39. Adjusted EBITDA was $70 million, resulting in a margin of 12%. As a reminder, last year's fourth quarter adjusted EBITDA results included the $38 million gain on the sale of AEG. Turning to our balance sheet. We ended the quarter with approximately $72 million in cash and corporate debt of approximately $300 million. Leverage under our senior secured facility was 2.7x, comfortably below the covenant level of 3.5x. During the quarter, we secured approximately $175 million in new project financing commitments. Adjusted cash flow from operations was approximately $36 million, including proceeds from ITC sales.

On a longer-term basis, our 8-quarter rolling average adjusted cash from operations was approximately $54 million. 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 assets 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 $2.1 billion of revenue and $283 million 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 2 RNG plans. For some quarterly shaping, the cadence of the year should follow our historical seasonal pattern, with a 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 Senal 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's ownership share of those consolidated entities. Given these factors have a significant impact on our results, we've 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'd like to turn the call back to George for closing comments.

Thank you, Mark. As Mark mentioned, during 2026, we will be building on our excellent momentum from 2025 and 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 has proven to be 1 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 you have heard 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 Instructions] Your first question comes from the line of Norh of Open Harman.

There was a lot of anticipation there. I guess I know you don't formally guide to the segments in the outlook. But maybe just some sort of shaping on energy assets as contemplated in the guide. 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? It seems like it should be a nice step up. .

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's just kind of how things work with interconnection queues in the development cycle, heavy construction in the summer months, et cetera. And so that will generally look like this year. This year was very heavily weighted, I think, 80-plus megawatts placed in service. So it may not look quite like that, but certainly more back half in 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've 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 don't meaningfully contribute that year, it takes sort of a little while to ramp up to get commissioned and then 2. 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 2017 numbers, which we haven't provided yet.

Yes. Very clear. 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, that flows a little bit better in 2Q in the back half.

Yes. I mean the weather, again, as you can imagine, impacted our ability to access certain sites, it impacted our assets but so it's 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 yes, I mean, it was we always try to look at Q1 with the best visibility we have coming out of this was unusual just given how severe the weather was. But again, we feel pretty good that is just timing, and we'll see that revenue come back in as we get outside of Q1 later into the year.

If I may add a little bit there we had the freeze up on 3 of our assets, the renewable gas assets, and that's curing that's not really recoverable. That's going. But we have taken all that into account for our guidance for the year and the numbers for the first block.

Your next question comes from the line of George Generics of Canaccord Genuity. .

I'd like to focus a little bit on Europe and the momentum you're 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?

Like I said in my commentary, we are looking for accretive acquisitions strategically located, and we'll be very opportunistic in that regard and partnerships and expanding the partnership that we have with Zone and as pointed out, we had great, great success up in Romania, and we are looking at a couple of other countries working with them and that the some RFPs that come out, and we're planning to go ahead and go after that particular business with that entity.

But as I said, though, the growth in Europe, especially on solar and the next 1 wave that's coming, the battery storage because those countries, they have so much solar and wind installations that and we are well positioned to take good advantage of that. So we're looking at very good growth opportunities in Europe. And of course, we do have to put up with a U.S. political things that are going on over here. It's a great diversity for us. Diversification. .

And maybe as a follow-up, just to ask a little bit about recent momentum in data centers. You specifically mentioned momentum and behind the meter. Any update on what you're seeing in the data center market?

Look, we're getting more requested we handle once we announce rely more data set. And of course, we have, I would say, a little bit of strategic advantage of the other competitors. A, put the package together and provide high line power within data centers. Otherwise, they might have guests that are buying or it might be better in storage. And the micro agreed that we are a company, we have been doing that for a long time. And we have a great, great pipeline. That's all I can say. But as you know, we're a little bit conservative when we announce a particular project. But we think it's going to be a great, great contributor for us down a little bit this year and much more than the next couple of years.

Yes. Maybe what I'll just add to that, when we think about the timing of when those opportunities can start to come into backlog we're going to really maintain some strong discipline in risk management as at those projects. There's a number of gating items that we need to make sure are derisked like engineering, permitting, equipment sourcing, financing, commercial structuring. So a lot goes into making sure that those opportunities are real. And I think that's the approach we've been taking in bringing these assets or bringing these projects into the backlog. So as George said, pipeline is strong. but conversion timing is going to reflect how well we can derisk some of these gating items. .

Your next question comes from the line of Ben Kallo of Baird.

Congrats on results just maybe following on I know that you had you put in a very high, if not record number of assets in the service just on timing of adding new projects to backlog that you're following on George's last question with data center, when should we expect to kind of get some of that stuff into 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.

Yes, will take the first answer point. .Yes. 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 how we manage this project from a risk management perspective. There's a lot of gating items that you need to go through from engineering or permitting how we source the equipment we obviously need to work out commercial terms. So it's going to take time, and we want to make sure that these opportunities are ground isn't something real before we start to bring them into the backlog. So as we work through derisking those gating items, you'll start to see more of those opportunities come out of the pipeline and into our reported backlog.

And as far as the supply, we still have some challenges, but it has gotten better than where it used to be. you recovered. But we are not 100% there where we should be. We have challenges. We manage the group, but it has a little bit better. And I think some of the things that the trips up besides the tariffs like, for example, what's happening with the lithium prices and so on. And but so far, we learned to live with them, and we have incorporated into our forecast and our guidance.as possible. .

Your next question comes from the line of Stephen Gengaro of Stifel.

For. even so 2 things for me. The first, just based on your guide, you have kind of a bit of upward momentum on the margin side. Could you just talk about what's driving that? Is it a specific segment? Is it is it just execution on certain areas? What's the big driver we should be thinking about for margins in '26.

Yes, I think it's a great question. I think it's discipline in its execution. We've been talking about this for the last couple of years, but we've really tightened our discipline in terms of how we select projects, how we price them, how we manage the cost. And so we're starting to see that coming through in some of the margin improvements. I think 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. I think that's where we're starting to get confidence in more of the quality of earnings and what we're seeing in this gradual movement in margins. .

Great. And the follow-up to that is and I'd have to go back and look historically to get the snapshot exactly. But 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 on the project side is at all fairly similar.

Yes. I mean I think as we see some of these larger, more complex infrastructure projects come in, I think the margin profile will be somewhat higher, not I don't think it would be a spike in margins. But I think that with those mix of projects coming more into the backlog, they do bring a bit higher of a margin profile. .

Your next question comes from the line of Manish Somaiya of Cancer Foton. Your next question comes from the line of Ryan Pfingst of B. Riley Securities.

Just curious if you can give a broader update on the RNG market in terms of new project opportunities going forward? And if you're considering any larger M&A as part of the strategy there.

I would say yes to both of them. Our backlog, I think Mark mentioned it, we have at least facilities that they are in the backlog right now that will be built over the next few years. And 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 Yes. But look, we have done '26 acquisitions for this company. We got that way as well as organically. And we always look for good opportunities as long as they're accretive and they add value at the end of the day to the company.

Yes. I would just say, I mean, we're still very excited about the opportunities that we're seeing. I think the compliance 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 I think we're 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're seeing. .

I appreciate that. And then for my second one, firm generation ticked higher in terms of energy assets in development. Curious if that's going to continue to be the case just based on the type of demand that you guys are seeing going forward?

Yes. I think we're going to see the firm generation that comes to some of these behind-the-meter opportunities we'll absolutely be there. I think from where we will either decide to bring these into our assets in development, or turn them into EPC opportunities. I mean that's still a decision that we need to have. The larger of these projects are, it's more likely that we'll want to go an EPC path. But yes, I think that I think that, that behind that firm generation will be a large driver of those opportunities and projects coming through our backlog. .

Your next question comes from the line of Julien Dumoulin-Smith of Jefferies.

This is Hanel, I'll ask us on for Julian. Thank you for the update and congrats on the strong quarter. I just wanted to ask around the tariff landscape. We've seen some fluctuations in tariff policy following this Supreme Court order and then some commentary from the White House suggesting that there could be different levers to pull across different statutes like Section 301, Section 232, et cetera. Can you just go ahead and maybe outline the general risk in that area, maybe how you are managing that, if it's reflected in PPAs you're negotiating today yes, to the extent you see that as a risk?

Yes. I think and George, in probably Mark's prepared remarks, we both we all talked about the challenging environment of 2025, largely driven by policy and things like that. So we're 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 Supreme Court may or may not do. In response to that, data is not really where we're prepared to comment. But we have said previously that some of our newer contracts have protections for tariffs. .

We're building that into the contract where if there are tariffs, there are potential price adjustment mechanisms. And other than that, we're sort of -- we're just playing it by year. We're building contingency into our deals. -- we're doing some pricing, like I said, some price adjustment potential in contracts, and we're sort of crossing our fingers and just hoping things stabilize, but we're managing through it just as our peers are.

Well, if I might add here 1 thing about the strength of the union message for the President that he said that the hyperscalers, they should be doing their own power plants in order to provide their capacity. We thought that was a good a good opening and it will help us in the long term because as many of you know, I've been writing some Marico saying that if we wait or the hyperscalers, they wait for the utilities in order to interconnect the power plants, we will lose the AI raise.

The only way that it can happen is they develop their own power plants at the end of the day. And of course, it will get better reliability. And ultimately, it will be less expensive than doing the other one. because to get admission lines, even though you have a large central power plant, it's going to cost you as much to bring that power to the load as it does to build the generation. So ultimately, everybody is going to be off. So I think it's a great, great sales piece for our business. .

Okay, makes sense. And there's 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're 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. But generally, what does the resource mix look like that they're interested in?

We across the board, the energy infrastructure it's across the board. And right now, everybody is concerned, many of the industrial and commercials that we're talking about, resiliency and the other thing they concerned a lot, speed to power. And that's why I say, if they go and they wait for the utilities, in the central power plants to happen and we get the right way of transmission lines, which might take 5 to 10 years, you will use the AI raise.

So speed to power, it might be, and many of them not only they won't cast their bins, but they want some renewable. So you can see that they have gas their buys to we have some solar, some battery storage at the end of the day, 9 power supply. And that's what we commit into MRS comes into the picture because we've been doing it for military bases. Take the San Antonio, Postmashipyard and I keep going on and on Parisian all of them and some of that started. It's in the previous Trump administration because they wanted to have resiliency in every what I would say, critical based military base, whether it's we label or are all the marine in Pepsi and so on.

Your next question comes from the line of Manish Somaiya of Cantor Fitzgerald.

Okay. Fantastic. I don't know what happened earlier. Two questions. One is, if you could just help us understand on the operating cash flow. Just give us a sense as to, I guess, how we should think about working capital, in particular, as we think about '26.

Sure. Yes. I mean, look, if you look at kind of Q4, right, from a cash flow, and I've said this a lot, quarterly cash flow can be lumpy, right? In Q4 cash flow, that really reflected kind of normal project timing and working capital movements Obviously, that was a very heavy construction period. I think the right way to look at it, the right way to evaluate our cash generation is on a rolling multiquarter basis.

And I think that's why we'd like to provide that metric. It's a more realistic reflection of our implementation cycle. Like I said, quarterly cash can kind of move around due to construction timing and milestone billings. I think working capital we've been a bit tighter on working capital because we've got some larger projects. They're coming through on build that are tied to milestones.

And as we continue to progress those projects and achieve those milestones, we'll start to see unbilled, convert through AR and cash and you'll start to see that come through our cash from operations. So timing can vary kind of quarter-to-quarter, but we would expect our working capital to normalize across the year. and we expect to see kind of the normal not growing level of cash generation.

Okay. That's super helpful. And then on the guidance, what gets you to the top end of the guidance? What are or the milestones that we should be kind of looking for?

Yes. I mean I think that's going to really come down to just execution, right? I think that the backlog is there. The opportunities are there. When we try to put our guidance together, we need to take a bit of a prudent look at how we think things can progress through the backlog and into the P&L. So I think if we can execute on these projects, we don't have other delays like some of the weather stuff we're seeing early in the year, Yes.

I think it always just comes down to our ability to execute and kind of stay disciplined on how we manage costs, and I think that could represent an opportunity. But we feel really good about the midpoint just based on how anchored it is to our visibility coming out of backlog assets we're bringing on, et cetera.

And then maybe last 1 for George. High level, obviously, if you look at the backlog, it's 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, I mean, how does MRS Co evolve Go ahead. Sorry, George.

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's why we made the investment in the last couple of quarters. And this quarter, we added a considerable amount of people with the engineering, development people as well as financial and execution of construction managers, especially senior level management, construction management people to execute on these larger projects. because I think that you will see us doing more data centers, more storage or resiliency plans for the commercial industrial customers, especially because the industrial sector for a long time, tried to move energy efficiency projects that were very difficult.

But now because they are concerned about resiliency and the higher cost of electricity, we're getting some good traction. So I think you will see us doing less on some of that much the business is there. We'll be doing much work, but the company will become much larger and driven by these larger opportunities, I would say, in the energy infrastructure sector.

[Operator Instructions]

There are no appearing questions at this time. And with that, ladies and gentlemen, concludes today's conference call. We thank you for participating. You may now disconnect your lines.

Thank you for standing by. At this time, I would like to welcome everyone to Ameresco, Inc. Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Thank you. I would now like to turn your conference over to Leila Dillon, Chief Marketing Officer. Please go ahead.

Thank you, Demi, and good afternoon to everyone. We appreciate you joining us for today's call. Our speakers on the call today will be George Sakellaris, Ameresco's Chairman and Chief Executive Officer; Mark Chiplock, Chief Financial Officer; and Nicole Balgarino, President of Federal and Utility Infrastructure. In addition, Josh Baribeau, our Chief Investment Officer, will be available during the Q&A to help answer any 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?

Thank you, Leila, and good afternoon, everyone. We are very pleased to report that this was another quarter of excellent execution foe Ameresco. We delivered strong financial results with growth across our key metrics. We also further strengthened our tremendous visibility with significant business development achievements in all our business lines. This is a very exciting time for our industry. A combination of factors, including increasing demand for electricity due to the move to electrification and data center demand, rising utility rates and growing grid instability are driving robust demand for our energy infrastructure solutions.

And this demand is not only coming from our traditional federal municipal, utility, school and hospital customers. We are also seeing considerable opportunities in new end markets, with demand coming from [ electric coops ], industrials such as steel manufacturing and cutting-edge industries such as data centers, all of which are looking for quick deploy large to quickly deploy large amounts of highly resilient megawatts. [ Well ], the customized solutions we are providing have evolved over time. We see Ameresco's domain knowledge and ability to deliver these large and complex solutions as a core capability. We also believe our business model gives us the ability to tailor financial solutions to the needs of our customers and is a meaningful differentiator for setting us apart from engineering and construction and [ ESCO ] companies.

Our mix of project, O&M and energy asset business enables us to design and build a project also operate and maintain it or we can use our balance sheet and all the solution as an Ameresco energy asset, providing our customer with a long-term offtake agreement. This flexibility we offer to our customers is core to Ameresco's DNA, and we believe it provides us with another important long-term competitive advantage.

While we are in the early innings of growth in many of these areas. The impact on our business is already apparent. If you look at our breakdown of total project backlog on our slides, you can see that energy infrastructure-related projects are almost half of our total project backlog. We are also seeing the impact with the energy asset side of our business. You will note the recently aired category of assets called firm generation energy assets in construction and development side. Firm generation assets such as natural gas generators already account for 22% of our total assets in development.

Also note that batteries now account for 41% of our assets in development compared to only 22% of battery operating assets, showing how we are able to pivot to a large and profitable opportunities present themselves. Now I would like to turn the call over to Nicole to provide additional commentary on a few of our recent energy infrastructure wins and give an update to our business with the federal government. Nicole?

Thank you, George, and good afternoon, everyone. Ameresco has delivered energy infrastructure solutions since its founding, but recent industry dynamics, like those that George mentioned, are driving a surge in large-scale opportunities. While data center wins often make headlines, the demand for resilient firm power spans a wide range of customers, including utilities, government agencies, industrial firms and tech companies, Among these markets, data center customers also present a compelling growth area for Ameresco and our opportunities in this space extend well beyond federal sided projects, but the common driver across our customer segments is clear. We are seeing a critical need for an increasing supply of resilient firm power.

An example of this need is the 40-megawatt firm power plant we are building for Hawaiian Electric on Maui. This project, which includes multiple dual fuel engines is designed to bring resilient firm energy, enhance power grid reliability and provide a highly flexible capacity resource. In addition, it will enable the island to reduce its dependence on foreign sources of fuel. Another great example is the recently announced 50-megawatt battery energy storage system with [ Nucor ], North America's largest steel producer. As Nucor continues to expand production at its [ Arzana ] facility, driving increased electricity demand a behind-the-meter battery energy storage solution was a natural choice for the company and its utility. The project was completed in just under 1 year and will supply rapidly deployable on-demand power as well as provide significant resilience to that facility.

We will also be adding solar to the facility, providing additional on-site generation as the plant continues to scale its production. As I have just highlighted, we are seeing tremendous interest from a variety of customer segments, including industrial, looking for rapidly deployable and highly resilient solutions. And with the recent push to scale onshore onshore industry in the U.S., these opportunities are expected to grow. And of course, I'm excited to share more about our [ La more ] data center initiative with [ CyrusOne ] for which we are finalizing the agreement. This solution will be designed to deliver cutting-edge energy infrastructure tailored for AI-driven, high-density computing environment serving hyperscalers. [ Cyrus Fund ] will build and operate the data center while Ameresco will provide the energy infrastructure through a long [ off-ter ] agreement to meet its 24/7 power demands. Our solution will combine firm energy via fuel cells, solar and battery storage that will complement local utility power.

As the facility scales, we would install up to 350 megawatts, making this 1 of our largest deployments to date. We expect to own a portion of the asset and the balance will be [ ended ] by a financial partner. And this is just the beginning. We have a strong pipeline of future opportunities with data center developers, gas providers, real estate partners and direct tenants. Notably, these projects are not just cited on better land but also on customer and properties.

Before I turn the call over to Mark, I want to briefly address the current federal government shutdowns. Since this was anticipated, we were able to proactively coordinate with our agency partners to implement contingency plans, which has enabled us to maintain operations with minimal disruption. Ameresco has successfully navigated previous shutdowns in the past, and our team is well prepared. Although a prolonged shutdown could delay some project award conversions and shift some revenue timing, we do not anticipate a material impact on our Q4 results.

Now I will turn over the call to Mark to provide financial commentary on this quarter's results and our outlook for the remainder of the year. Mark?

Thank you, Nicole. I'd first like to reiterate that this was another quarter of strong execution with growth achieved across all of our key metrics. Ameresco delivered solid results in a challenging operating environment. demonstrating the strength and flexibility of our diversified business model. Revenue grew 5% year-over-year, reflecting robust execution across our project portfolio, sustained momentum in our Energy assets segment and reliable recurring income from our O&M business.

Adjusted EBITDA increased 13% from the prior year, driven by higher project margins expanding contributions from Europe and our energy asset portfolio as well as disciplined operating cost management. Projects revenue grew 6%, supported by strong results from our European joint venture with Sunel. This partnership continues to be a key part of our strategy to diversify revenue streams and expand our international footprint.

And as Nicole mentioned, we have not experienced a notable slowdown in our work even with the current federal government shutdown. The projects team continued its focus on converting awards into contracts and contracts into revenue. We saw strong demand for our comprehensive energy infrastructure solutions that combine efficiency, generation and resiliency, which drove substantial growth in our total project backlog to $5.1 billion. Importantly, we secured another $450 million in new project awards this quarter and converted $467 million of awards into signed contracts driving our contracted project backlog up 33% to $2.5 billion.

Energy asset revenue also grew 6%, driven largely by the growth of our operating assets portfolio. We placed an additional 16 megawatts into operation during the quarter, including the [indiscernible] facility, bringing our total operating assets to 765 megawatts. We also added 32 megawatts during the quarter, bringing our net energy assets in development to 626 megawatts.

We remain on track to reach our annual target of placing 100 to 120 megawatts of additional assets into operation. Our recurring O&M revenue increased by 8% this quarter as we continue to win more long-term O&M business associated with our completed project work. These wins helped to add over $158 million to our long-term O&M backlog, which now stands at approximately $1.5 billion. Combined, our project backlog and together with our recurring O&M and operating energy asset portfolios gives us long-term revenue visibility of over $10 billion.

And finally, while revenues from the remaining businesses within our other revenue segment continue to experience growth, our other line of business was lower year-over-year due to the divestiture of our AEG business at the end of 2024. Gross margin improved to 16%, up both sequentially and compared to last year, highlighting our continued focus on higher-margin projects and assets and disciplined cost management. Net income attributable to common shareholders was $18.5 million, with both GAAP and non-GAAP EPS at $0.35. And as I mentioned, adjusted EBITDA grew 13% to $70.4 million resulting in an adjusted EBITDA margin of 13.4%. Turning to our balance sheet and cash flows. We closed the quarter with approximately $95 million in cash and $340 million in total corporate debt. Our debt-to-EBITDA leverage ratio under our senior secured facility was 3.2x and remains below the covenant level of 3.5x. We continue to fund our growth primarily through nonrecourse project debt and partner capital at the energy asset level, preserving capacity at the corporate level for working capital and strategic investments.

During the quarter, the company secured approximately $180 million in new project financing commitments. Our cash generation remained solid this quarter with adjusted cash flows from operations of approximately $64 million an improvement both sequentially and year-over-year. The performance reflects our disciplined approach to working capital management, ensuring that vendor payments are more closely aligned with project milestones and progress.

While some of this increase is attributable to timing, it highlights our ongoing commitment to rigorous liquidity management in a dynamic operating environment. On a longer-term basis, our 8-quarter rolling average adjusted cash from operations was approximately $52 million, underscoring the consistency of our cash generation and the effectiveness of our financial controls.

Now let me spend a minute on our 2025 guidance. Q3 once again highlighted Ameresco's ability to execute in a complex environment while expanding our strategic positioning. Our strong year-to-date performance, robust demand, expanding presence in data center and resiliency infrastructure and growing energy asset portfolio, provide us with solid momentum and clear visibility as we approach year-end.

While a prolonged government shutdown could delay the conversion of some project awards, shifting the timing of some revenue, we do not expect this to materially affect our Q4 results. Accordingly, we are reaffirming our guidance ranges for 2025. Now I'd like to turn the call back over to George for closing comments.

Thank you, Mark. As the Ameresco team continues to deliver excellent results, we are also building our strong foundation for future growth by expanding our backlogs and build in our energy asset business. Our strong visibility, along with what we expect to be very favorable industry dynamics for our energy infrastructure solutions supports our confidence in delivering our long-term target growth targets of 10% and 20% revenue and adjusted EBITDA, respectively.

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.

[Operator Instructions] And your first question comes from the line of Noah Kaye with Oppenheimer & Company.

Maybe if we can start with data center. Nicole, you talked a little bit in the prepared remarks about a strong pipeline kind of extending beyond federal government to other customers. And I wondered if you could maybe frame out for us the opportunity set a little bit. Should we think of the scope of these projects being similar to a little more where you're providing the energy [ Ara ] energy infrastructure -- are there additional possibilities in scope? And how should we think about maybe kind of the timing on seeing some of those start to materialize in the orders?

Yes, you're correct. They're similar to what we're doing. Our focus is on the energy infrastructure for the data centers. So -- and on the commercial side, we're looking to do similar things, providing power solutions to the data center customers and speed to power for them.

Okay. And I think you mentioned it as well, and Mark can also touch on this, but just -- it sounds like you're finalizing the details for the first project, but thinking about kind of combination of Amresco and [ Partner ] Capital, again, can you sort of broadly help us think about the size of the commitment there and when you might expect to have some of those details finalized for the market.

Noah, it's Josh. I might jump in here. So we -- in the supplemental slides, we have the updated assets and development at the footnote that it's in there at about 10% of its value, a little bit for conservatism a little bit because, as George and Mark mentioned that we're probably going to bring an equity partner for this 1 just because it is so large, so the increase was about 35 megawatts.

So the total opportunity could be as large as 350 just for a [ La More ] and we're not quite ready to disclose CapEx figures, but it's in line with what we've talked about between battery and solar cost per megawatt. So it's a pretty large project.

All right. We're looking forward to the details and congratulations on the broader awards momentum.

Next question comes from the line of Eric Stine with Craig-Hallum.

So maybe for Nicole and just sticking with the data center with that theme. Can you just talk about this first project? I mean it seems to me that given the timing of the announcement, this would have been underway for quite some time even though it does fit pretty much perfectly with the executive orders and what the government is looking to do on leased land, so maybe just talk about that and once you've announced this, what that's kind of meant in terms of pipeline as you see it?

Yes. I mean the announcement has been a great opportunity for us to provide a good anchor project of what we're trying to do and accomplish being able to provide behind meter energy solutions for data center customers. We have been working on it with the permitting and the other things that go into these large projects in the development side of it. So it's been good, and I think we expect to be able to kind of build and leverage future opportunities using a very similar model.

Yes. I mean it's almost as if you kind of patterned to this after exactly what the government was looking to do. So I guess any of this will stay tuned on that, but a great development.

Yes. I mean using federal land. I mean like we've been providing energy solutions for federal customers for years. And so being able to apply this model and similar like we did in Hawaii for a large project that we did solar battery using federal land to be able to have a third-party offtake kind of set the -- we initiated this model and there's opportunities with excess land that are that align nicely for data center customers.

And as you know, we have several bases that we actually have done work in addition to that when they go out with the RFPs for what we call -- what they call the enhanced use list or they have a plant like whether it was [ pro harbor ] or this particular one, the [ Limor ], it's waste at land they want to develop a great value. And we announced both of this particular size when we were far along.

We on both of them. We've been working for at least a couple of years. And we have several other ones that we are working on when we are ready we are far along, then we will announce more. But the important point of this data centers and what we wanted to point out, but the need for resilient power resilient power in some of the industrial customers like what we did for Nucor is we see great, great need out there because of the great demand for electricity, many of these people are concerned, they don't have the backup.

And that's why we put the 50 megawatts on Nucor. That's where last year, we put 100 megawatts on United Power, the battery storage there is, and we are working with several other ones. -- that large deal customers that are concerned about resiliency. And you will see substantial amount of battery storage in the future. And then on like Nucor once they put in the battery storage, they realize they need more capacity, and now we -- we'll be building a 25-megawatt [ solar far ] for them. So it's another business line that it wasn't there a year ago.

Yes. Yes. No, that's great color. Maybe last 1 for me. Just on the guide, can you just talk about -- a little bit about the puts and takes? I know that coming into this year, there were a lot of questions about the federal business. And I know that, that kind of ended up being much to do about nothing. But government shutdown and even though you think that, that has a minimal impact to fourth quarter, if I do the math, fourth quarter, it would imply a down sequential quarter in the last couple of years, you've been up sequentially from an EBITDA perspective. So maybe just kind of talk about that dynamic or the assumptions going into that?

The thing that you have to remember that we have been able to diversify our business so much in the federal government right now, it only represents 20%, and even though it might be some contracts going from the award to be executed. It might be some slippage on the revenue, but it's not that much, that has a material impact. And that's why we were able to say that even the cadence for next year, the 10% on top line growth and 20% EBITDA growth, we feel pretty good about it.

Yes. I think -- and we've been talking a lot about this throughout the year with respect to 2025 and how we've been managing the guidance, right? I mean we really had to maintain some discipline throughout the year, and that's no different really for Q4, even though visibility remains pretty strong, it's still a heavy execution quarter for us, a lot of project milestones that we need to achieve. So right now, we feel like the guidance that we're maintaining is realistic.

Next question comes from the line of Ben Kallo with Baird.

Congrats on everything in the opportunities. Two quick ones. Just as you do more of this work with data centers, could you explain that if there's any differences that we should think about just from an engineering construction point of view, of doing what you've done separately, but now tied to a data center like if there's more risk or there's more know-how and people that you need as you work on this new end market.

And then my second question is because storage is coming up with such a big portion of your energy backlog, could you just talk about procuring batteries and how that's changed and how we should think about that as you look into next year and the following year, just as either tariffs or [indiscernible] concerned language, anything like that?

On the first answer, I mean I'd say this is very similar to the work that we've been doing for the federal government with the requirements and the 24/7 reliability resiliency requirements that we have for mission-critical operations on military basis. So similar there. I mean, maybe the difference is just the scale. There are larger opportunities, a little bit quicker need for -- to go faster. So that can be a positive, but not anything necessarily different than what we would be doing in developing the projects than our other.

Yes, than our other customers that we've been doing it for utilities and customers. I mean utility and federal customers. And then on the second 1 on battery go ahead.

Just to remind my first was so long.

I mean I think maybe the answer on the second 1 with respect to batteries and what we're trying to do there from a supply standpoint is like everybody, I think we're trying to see how we can diversify the supply chain. I think we've done quite a bit, at least on the safe harboring side. to try our best to avoid some of the [ CP ] restrictions that are still a little unclear, but that are upcoming. So we've done some decent work to try and safe harbor some projects from a physical construction aspect as best we can. And I think as we move forward, I think we're hoping we'll be a natural hedge even with some of the impact of potential tariffs or the ITC impact that the cost of batteries are coming down. So that might create just a natural hedge for us as we move forward to these projects.

Next question comes from the line of Dushyant Ailani with Jefferies.

It's Julian here. Can you guys hear me okay?

Yes.

Excellent. Nicely done. Look, a couple of things. First, I just wanted to come back to guidance at a high level. Obviously, you guys were commenting about '25 here, but given the meaningful contribution from the data center and the kicking up in '27 here, how do you think about sort of getting back on track with kind of a high teens or 20% EBITDA CAGR, right? I mean you guys have historically lived by that.

Obviously, a very late, a little bit more muted, but clearly seems like there's a little bit more lumpy profile in the business, whether it's tied to this or, frankly, the battery opportunity, which seems to be tied to supply chain that wants to be used in the near -- relatively near term as well.

It's Josh. So you're absolutely right. The data center opportunity will definitely help us maintain that 10 and 20 type of number. We have -- we've been a little bit light on that in the last year -- but we've never said that was going to be guaranteed annual guidance. That's sort of a guideline over the 3- to 5-year business cycle. So all of those tailwinds that I think all 4 of our speakers talked about so far today will certainly give us -- as well as the visibility we have just from work we've already contracted and awards we've already received, give us plenty of confidence we'll be able to hit those targets again in the long term.

If there is ever a potential for upside or something else that we'll need to present to investors, we'll certainly do that when we update our formal guidance. which we're not prepared to do right now. But for sure, it helps us keep that target.

Nicely done, Josh and team, I got to say. Can you guys talk a little bit more about the ability to replicate this model here? I know someone asked you kind of a similar question earlier. But as it pertains to taking the data center model, and running with it time to power is front and center. I mean, what's the ability to take this? And what kind of pipeline or sense do you have from other potential customers who want to leverage this this model approach here, if you will. How would you set expectations on another lumpy announcements like us?

Yes, this is Nicole. So I think the important thing is with the AI market and the growth that we're seeing, it's also just transitioning energy supply. And with the amount of capacity that keeps increasing, there's limited utility power. So this sets the opportunity for us to be able to do these bridge solutions and behind meter power solutions very much like the [ Lamar ] project. So this is what's pushing and driving the pipeline even more because the hyperscalers are in need for this immediate power solution and that's going to be accomplished behind meter versus their utility theaters, the traditional way that they were getting power in the past.

All right, guys. Any sense on margin on that 1 on the data center front?

Julian, there's no reason to believe it's going to be any different than our regular corporate margins. So it's a little bit of a mix between asset and project as we talked about, but no reason to believe it's not within the corporate average.

Right. And with the long-term operation maintenance with these.

Next question comes from the line of Brian Fins with B. Riley.

I'll just follow up on the last question on the [ CyrusOne ] deal and kind of the subsequent ones that are potentially coming. Just curious how well positioned Ameresco is right now operationally to support multiple projects like that, just given the size.

Yes. And what we have done in -- we started this process actually last year when we established the unit utility-scale projects, Nicole, has taken it over and we have organized this particular unit that's additional stuff that we've been adding and so on. And we're increasing the stuff from the federal side as well as this particular side. Nicole can add some more color to it. But -- we realize that it's a great opportunity for us, and we have the expertise. And Nicole, of course, is 1 of the top candidates since you took over the particular task, and which have made great progress on it to go both on the human resource as well as on development, a good pipeline.

Yes. And I would just add that we -- like George said, I mean we've shifted resources ever that we're already working our federal team to be able to focus strictly on this as well as some of the resources that we acquired in the [ Bright Canyon ] acquisition a couple of years ago. So we were able to have immediate support in the power side of this and continue to grow that. And expand our construction team, procurement teams, engineers and other front-end partners like the nuclear experts that we brought on earlier this year as well as the power solutions continue to evolve.

Got it. Appreciate that detail. And then my second question, you guys announced a second nuclear partner a few weeks ago with [ Terra and Evan ] that they're really excited about. Is that starting to feel like more of a real opportunity on the nuclear side that could turn into orders or real work for Ameresco here and maybe '26 or '27 or still feels further away?

It certainly seems more real. I wouldn't say '26 or '27 though, that's a little early even for a traditional power plant. But we're really excited about this other partnership because it's a different type of nuclear technology than the 1 that we did is [ terrestrial ] and that is my reactor instead of a small modular reactor. So different types of technology. And as we've always been neutral on technology, different [ often ] technology solutions, we want to have different partners to be able to address our -- especially on the federal side.

So we're excited, and I think that opportunity is very real, especially with the Army announcement that just came out a couple of weeks ago. and more from the Department of Energy that we believe that it's certainly in the future, but probably a few more years than 2027.

[Operator Instructions] Next question comes from the line of George Gianarikas with Canaccord Genuity.

Yes, operator, let's reprompt. Folks, I see a lot of you coming in and out. Right now, the queue is not showing anybody. [Operator Instructions]

[Operator Instructions] Seeing no further questions at this time. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.