Ameresco, Inc. (AMRC)

CIK: 0001488139. SIC: 1700 Construction - Special Trade Contractors. Latest 10-K as of: 2026-03-03.

SIC breadcrumb: Construction > SIC Major Group 17 > SIC 1700 Construction - Special Trade Contractors

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1488139. Latest filing source: 0001628280-26-013574.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-02-28. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001488139.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001488139.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001628280-26-030169.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-05-05. Report date: 2026-03-31.

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

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the notes related thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2025 included in our Annual Report on Form 10-K (“2025 Form 10-K”) for the year ended December 31, 2025 filed on March 3, 2026 with the U.S. Securities and Exchange Commission (“SEC”). This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward looking statements include statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, objectives of management, expected market growth; guidance related to the proposed Neogenyx Fuels transaction, the governance, operating and financial terms of the Neogenyx Fuels transaction, and the anticipated closing date thereof, if at all, statements regarding potential future growth prospects of the joint venture, and our intended use of the proceeds from the contribution of assets to the joint venture; the impact of policies and regulatory changes, supply chain disruptions, shortage and cost of materials and labor, other macroeconomic and geopolitical challenges; our expectations related to our agreement with SCE including the impact of delays and any requirement to pay liquidated damages. All statements, other than statements of historical fact, including statements that refer to our expectations as to the future growth of our business and associated expenses; our expectations as to revenue generation; the future availability of borrowings under our revolving credit facility; the expected future growth of the market for energy efficiency and renewable energy solutions; our backlog, awarded projects and recurring revenue and the timing of such matters; our expectations as to financing and acquisition activity; the impact of any restructuring; the uses of future earnings; the expected energy and cost savings of our projects; the expected energy production capacity of our renewable energy plants; the impact of supply chain disruptions, shortage and cost of materials and labor, the impact of macroeconomic and geopolitical challenges; our expectations related to our agreement with SCE and associated liquidated damages; the imposition of tariffs, and other characterizations of future events or circumstances are forward-looking statements. Forward looking statements are often, but not exclusively, identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” “target,” “project,” “predict” or “continue,” and similar expressions or variations. These forward-looking statements are based on current expectations and assumptions that are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially and adversely from future results expressed or implied by such forward-looking statements. Risks, uncertainties, and factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors,” set forth in Part I, Item 1A of our 2025 Form 10-K. Subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so and undertake no obligation to do so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

Overview

Ameresco is a leading energy infrastructure solutions provider dedicated to helping customers navigate the energy transition. Our comprehensive portfolio includes implementing smart energy efficiency solutions, upgrading aging infrastructure, and developing, constructing, and operating distributed energy resources.

Drawing from decades of experience, Ameresco reduces energy use and delivers diversified generation solutions to Federal, state and local governments, utilities, educational and healthcare institutions, housing authorities, and commercial and industrial customers.

We provide solutions primarily throughout North America and Europe, and our revenues are derived principally from energy efficiency projects, which entail the design, engineering, and installation of equipment and other measures that incorporate a range of innovative technology and techniques to improve the efficiency and control the operation of a facility’s energy infrastructure; this can include designing and constructing a central plant or cogeneration system for a customer providing power, heat and/or cooling to a building, or other small-scale plant that produces electricity, gas, heat or cooling from renewable sources of energy. We also derive revenue from long-term O&M contracts, energy supply contracts for renewable energy operating assets that we own, integrated-PV, and consulting and enterprise energy management services.

In addition to organic growth, strategic acquisitions of complementary businesses and assets, and joint venture arrangements have been an important part of our growth enabling us to broaden our service offerings and expand our geographical reach.

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Key Factors and Trends

Regulatory Environment and Federal Policies

Federal policies play an important role in our business and we benefit from regulatory measures and various clean energy tax incentives, including those implemented under the Inflation Reduction Act (the “IRA”). These credits were modified by the One Big Beautiful Bill Act (the “OBBB”), which was enacted on July 4, 2025.

Among other provisions, the OBBB introduces new timing requirements for solar-only projects seeking eligibility for Investment Tax Credits (the “ITC”) under Section 48 of the Internal Revenue Code (the “Code”). To qualify, such projects must commence construction by July 4, 2026, and be placed in service by December 31, 2027. The OBBB also phases down ITCs for energy storage projects beginning in 2034, with a complete phase-out by 2036. Additionally, it increases the requirements for the domestic content bonus credit and introduces new compliance obligations under the Foreign Entity of Concern (“FEOC”) provisions for solar and energy storage projects beginning construction in 2026.

These legislative and regulatory developments may adversely impact our eligibility for certain tax credits, the attractiveness of our solar and energy storage system offerings, and overall demand for our products. If we are unable to meet the revised domestic content or FEOC requirements, our ability to qualify for these incentives could be impaired, which may adversely affect our revenue, gross margins, business operations and competitive position.

See “Our business depends in part on federal, state, provincial and local government support or the imposition of additional taxes, tariffs, duties, or other assessments on renewable energy or the equipment necessary to generate or deliver it, for energy efficiency and renewable energy, and a decline in such support could harm our business” and “Compliance with environmental laws could adversely affect our operating results” in Item 1A, Risk Factors in our 2025 Form 10-K.

Neogenyx Fuels LLC Joint Venture Transaction

On May 4, 2026, Ameresco entered into a contribution and equity purchase agreement with an affiliate of HA Sustainable Infrastructure Capital to combine Ameresco’s biogas business into a new joint venture, Neogenyx Fuels LLC. At closing, Ameresco will contribute its existing biogas operations and related assets and liabilities in exchange for a 70% equity interest, while the JV investor will acquire a 30% interest through a $400 million investment. Of this amount, $100 million will be paid to Ameresco at closing, approximately $58 million will be used to reduce existing project-level debt, and the remainder will be contributed to fund the joint venture’s operations and growth.

The transaction is expected to close in the second quarter of 2026, subject to customary closing conditions. Ameresco is evaluating the accounting and financial impact of the transaction and currently expects to consolidate the joint venture on a prospective basis following the closing.

Supply Chain Disruptions and Other Global Factors

We continue to monitor the impact of global economic conditions on our operations, financial results, and liquidity, such as the impact of tariffs, supply chain challenges, geopolitical instability and conflicts in Ukraine and the Middle East, evolving relations between the U.S. and China, and other geopolitical tensions. These conflicts together with import duties, tariffs and other import restrictions, including the Uyghur Forced Labor Protection Act, have restricted the global supply of, and raised prices for, supplies needed for our business. In addition, tariffs and trade restrictions that have been introduced and may be introduced as part of the 'America First' trade policy may further increase the cost of components needed for our offerings and may strain trade relations, create inflationary pressures and cause additional supply chain disruptions. The impact to our future operations and results of operations as a result of these global trends remains uncertain and the challenges we face, including increases in costs for logistics and supply chains, intermittent supplier delays, and shortages of certain components needed for our business, such as electrical equipment, steel and aluminum as well as BESS equipment or components required for our projects and clean energy solutions may continue or become more pronounced.

During the three months ended March 31, 2026, we continued to face supply chain disruptions and varying levels of inflation driven by macroeconomic conditions. This caused some delays in the timely delivery of material to customer sites and in the timely completion of certain projects and increased shipping, transportation, component and labor costs, negatively impacting our results of operations during the three months ended March 31, 2026. We expect these challenges will persist and they may intensify. We continue to monitor macroeconomic conditions to remain flexible and to optimize and evolve our business as appropriate to address the challenges presented from these conditions.

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We believe the increasing demand for electricity, rising oil and utility rates, and growing grid instability, are driving demand for our energy infrastructure and other solutions. However, this increased demand may increase the competition we face and we may also face an increased risk in completing larger more complex projects.

Climate Change and Effects of Seasonality

Global emphasis on climate change and reducing carbon emissions has created opportunities for our industry. Sustainability has been at the forefront of our business since its inception, and we are committed to staying at the leading edge of innovation taking place in the energy sector. We believe the next decade will be marked by dramatic changes in the power infrastructure with resources shifting to more distributed assets, storage, and microgrids to increase overall reliability and resiliency.

Climate change also brings risks, as the impacts have caused us to experience more frequent and severe weather interferences,

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2026-03-03. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes and other financial information included in Item 8 of this Report. Some of the information contained in this discussion and analysis are set forth elsewhere in this Report, including information with respect to our plans and strategy for our business and related financing, and includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” included in Item 1A of this Report for a discussion of important

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factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

Ameresco is a leading energy infrastructure solutions provider dedicated to helping customers navigate the energy transition. Our comprehensive portfolio includes implementing smart energy efficiency solutions, upgrading aging infrastructure, and developing, constructing, and operating distributed energy resources.

Drawing from decades of experience, Ameresco reduces energy use and delivers diversified generation solutions to Federal, state and local governments, utilities, educational and healthcare institutions, housing authorities, and commercial and industrial customers.

We provide solutions primarily throughout North America and Europe, and our revenues are derived principally from energy efficiency projects, which entail the design, engineering, and installation of equipment and other measures that incorporate a range of innovative technology and techniques to improve the efficiency and control the operation of a facility’s energy infrastructure; this can include designing and constructing a central plant or cogeneration system for a customer providing power, heat and/or cooling to a building, or other small-scale plant that produces electricity, gas, heat or cooling from renewable sources of energy. We also derive revenue from long-term O&M contracts, energy supply contracts for renewable energy operating assets that we own, integrated-PV, and consulting and enterprise energy management services.

In addition to organic growth, strategic acquisitions of complementary businesses and assets, and joint venture arrangements have been an important part of our growth enabling us to broaden our service offerings and expand our geographical reach.

Key Factors and Trends

Regulatory Environment and Federal Policies

Federal policies play an important role in our business and we benefit from regulatory measures and various clean energy tax incentives, including those implemented under the Inflation Reduction Act (the “IRA”). These credits were modified by the OBBB.

Among other provisions, the OBBB introduces new timing requirements for solar-only projects seeking eligibility for Investment Tax Credits (the “ITC”) under Section 48 of the Internal Revenue Code (the “Code”). To qualify, such projects must commence construction by July 4, 2026, and be placed in service by December 31, 2027. The OBBB also phases down ITCs for energy storage projects beginning in 2034, with a complete phase-out by 2036. Additionally, it increases the requirements for the domestic content bonus credit and introduces new compliance obligations under the Foreign Entity of Concern (“FEOC”) provisions for solar and energy storage projects beginning construction in 2026.

These legislative and regulatory developments may adversely impact our eligibility for certain tax credits, the attractiveness of our solar and energy storage system offerings, and overall demand for our products. If we are unable to meet the revised domestic content or FEOC requirements, our ability to qualify for these incentives could be impaired, which may adversely affect our revenue, gross margins, business operations and competitive position.

From October 1, 2025 to November 12, 2025, the U.S. government was shut down due to the failure of the U.S. Congress to take action to maintain funding at existing levels, for the U.S. government’s fiscal year. While we did not experience a notable slowdown in our government work even with the shutdown, any future government shutdown could delay our ability to convert project awards into contracts and as such could have an adverse impact on our financial results. The government shutdown has also delayed the government providing guidance regarding the “beginning of construction” criteria applicable to clean energy projects and final FEOC restrictions under the OBBB Act.

See “Our business depends in part on federal, state, provincial and local government support or the imposition of additional taxes, tariffs, duties, or other assessments on renewable energy or the equipment necessary to generate or deliver it, for energy efficiency and renewable energy, and a decline in such support could harm our business” and “Compliance with environmental laws could adversely affect our operating results” in Item 1A, Risk Factors.

Supply Chain Disruptions and Other Global Factors

We continue to monitor the impact of global economic conditions on our operations, financial results, and liquidity, such as the impact of tariffs, supply chain challenges, the wars in Ukraine and the Middle East, evolving relations between the U.S. and China, and other geopolitical tensions. Import duties, tariffs and other import restrictions, including the Uyghur Forced Labor Protection Act, restrict the global supply of, and raise prices for, supplies needed for our business. In addition, tariffs and trade

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restrictions that have been introduced any may be introduced as part of the 'America First' trade policy may further increase the cost of components needed for our offerings and may strain trade relations, create inflationary pressures and cause additional supply chain disruptions. The impact to our future operations and results of operations as a result of these global trends remains uncertain and the challenges we face, including increases in costs for logistics and supply chains, intermittent supplier delays, and shortages of certain components needed for our business, such as electrical equipment, steel and aluminum as well as BESS equipment or components required for our projects and clean energy solutions may continue or become more pronounced.

These tariffs, restrictions, and strained trade relations may affect our ability to source materials and products, potentially leading to increased costs and operational challenges and decreased demand for or offerings. We are closely monitoring the regulatory environment and actions of the current administrations that could impact our business.

During the year ended December 31, 2025, we were impacted by supply chain disruptions and varying levels of inflation, as a result macroeconomic conditions. This caused some delays in the timely delivery of material to customer sites and in the timely completion of certain projects and increased shipping, transportation, component and labor costs, negatively impacting our results of operations during the year ended December 31, 2025. We expect these challenges will persist and they may intensify. We continue to monitor macroeconomic conditions to remain flexible and to optimize and evolve our business as appropriate to address the challenges presented from these conditions.

We believe the increasing demand for electricity, rising utility rates, and growing grid instability, are driving demand for our energy infrastructure and other solutions. However, this increased demand may increase the competition we face and we may also face an increased risk in completing larger more complex projects.

Climate Change and Effects of Seasonality

Global emphasis on climate change and reducing carbon emissions has created opportunities for our industry. Sustainability has been at the forefront of our business since its inception, and we are committed to staying at the leading edge of innovation taking place in the energy sector. We believe the next decade will be marked by dramatic changes in the power infrastructure with resources shifting to more distributed assets, storage, and microgrids to increase overall reliability and resiliency.

Climate change also brings risks, as the impacts have caused us to experience more frequent and severe weather interferences, and this trend is expected to continue. We are subject to seasonal fluctuations and construction cycles, particularly in climates that experience colder weather during the winter months, such as the northern United States and Canada, and climates that experience extreme weather events, such as wildfires, storms or flooding, hurricanes, or at educational institutions, where large projects are typically carried out during summer months when their facilities are unoccupied. In addition, government customers, many of which have fiscal years that do not coincide with ours, typically follow annual procurement cycles and appropriate funds on a fiscal-year basis even though contract performance may take more than one year. Further, government contracting cycles can be affected by the timing of, and delays in, the legislative process related to government programs and incentives that help drive demand for energy efficiency and renewable energy projects. As a result, our revenues and operating income in the third and fourth quarter are typically higher, and our revenues and operating income in the first quarter are typically lower, than in other quarters of the year, however, this may become harder to predict with the potential effects of climate change. As a result of such fluctuations, we may occasionally experience declines in revenues or earnings as compared to the immediately preceding quarter, and comparisons of our operating results on a period-to-period basis may not be meaningful.

Our annual and quarterly financial results are also subject to significant fluctuations as a result of other factors, many of which are outside our control. See “Our business is affected by seasonal trends and construction cycles, and these trends and cycles could have an adverse effect on our operating results” and “Extreme weather events and other natural disasters, particularly those exacerbated by climate change, could materially affect our ability to complete our projects and develop our assets” in Item 1A, Risk Factors.

The Southern California Edison (“SCE”) Agreement

In October 2021, we entered into a contract with SCE to design and build three grid scale BESS at three sites near existing substation parcels throughout SCE’s service territory in California with an aggregate capacity of 537.5 MW (“the SCE Agreement”). The engineering, procurement and construction price is approximately $892.0 million, in the aggregate, including two years of O&M revenues, subject to customary potential adjustments for changes in the work. As previously disclosed, due to supply chain delays, weather and other events, we were unable to complete the projects by August 1, 2022 (the “Guaranteed Completion Date”). On August 30 2024, we reached an agreement with SCE on the substantial completion of two out of three battery energy storage system projects. We received approximately $110 million on September 5, 2024 as milestone payments, reflecting both an offset of liquidated damages which are still in dispute and $3 million that SCE withheld for additional work SCE required. Upon final acceptance of these two projects, we will invoice SCE for the remaining final acceptance milestone

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payments for these projects. We have provided SCE notice for substantial completion of the third project and are in discussions with SCE to reach agreement on the achievement of this milestone. We expect all three projects to be finalized this year.

The August 2024 agreement with SCE confirmed that the final resolution related to our obligation to pay the liquidated damages withheld and the applicability and scope of any force majeure relief as well as any cost recovery we may be entitled to remain subject to dispute. We are continuing discussions with SCE on these matters, and our view continues to be that liquidated damages should not be applied. If we fail to come to an agreement with SCE about the applicability and scope of force majeure relief and liquidated damages, we may be required to pay liquidated damages up to an aggregate maximum of $89 million and may not be able to recover costs associated with the force majeure events.

A majority of our revenues under this contract were recognized in 2022 based upon costs incurred in 2022 relative to total expected costs on this project.

Stock-based Compensation

We recorded stock-based compensation expense, including expenses related to the estimated achievement of the performance metrics of performance-based stock options (“PSOs”) granted during the year ended December 31, 2025, and our employee stock purchase plan. During the year ended December 31, 2025, we granted 1,451,000 stock options to certain employees and 136,770 restricted stock units (“RSUs”) to our employees and non-employee directors under our 2020 Stock Incentive Plan. Our stock-based compensation expense increased slightly from $14.1 million for the year ended December 31, 2024 to $14.4 million for the year ended December 31, 2025. Stock-based compensation increased in 2025, primarily due to the increase in options and RSUs granted including PSO’s, partially offset by a decrease in the weighted average fair value of stock options and RSUs granted.

In addition, our unrecognized stock-based compensation expense decreased from $28.0 million at December 31, 2024 to $24.8 million at December 31, 2025, and is expected to be recognized over a weighted-average period of two years. This includes $3.5 million of unrecognized compensation expense related to options that vest based on performance criteria and our current assessment of probability. There is an additional $7.6 million of unrecognized compensation expense if the PSOs were to achieve 100% probability. See Note 14 “Stock-based Compensation and Other Employee Benefits” for additional information.

Backlog and Awarded Projects

Backlog is an important metric for us because we believe strong order backlogs indicate growing demand and a healthy business over the medium to long term, conversely, a declining backlog could imply lower demand.

The following table presents our backlog:

As of December 31,

(In Thousands)

2025

2024

Project Backlog (1)

Fully-contracted backlog

$

2,470,333 

$

2,544,304 

Awarded, not yet signed customer contracts

2,569,028 

2,274,012 

Total project backlog

$

5,039,361 

$

4,818,316 

12-month project backlog

$

1,065,126 

$

1,145,729 

(1) Project backlog net of non-controlling interests

O&M Backlog

Fully-contracted backlog

$

1,474,745 

$

1,378,087 

12-month O&M backlog

$

112,297 

$

98,734 

Total project backlog represents energy efficiency projects that are active within our sales cycle, either full-contracted or awarded. Our sales cycle begins with the initial contact with the customer and ends, when successful, with a signed contract, also referred to as fully-contracted backlog. Our sales cycle recently has been averaging 18 to 42 months. Awarded backlog is created when a potential customer awards a project to Ameresco following a request for proposal. Once a project is awarded but not yet contracted, we typically conduct a detailed energy audit to determine the scope of the project as well as identify the savings that may be expected to be generated from upgrading the customer’s energy infrastructure. At this point, we also determine the subcontractor, what equipment will be used, and assist in arranging for third party financing, as applicable. Recently, awarded projects have been taking an average of 12 to 42 months to result in a signed contract and convert to fully-contracted backlog. It

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may take longer, as it depends on the size and complexity of the project. Historically, approximately 90% of our awarded backlog projects have resulted in a signed contract. After the customer and Ameresco agree to the terms of the contract and the contract becomes executed, the project moves to fully-contracted backlog. The contracts reflected in our fully-contracted backlog typically have a construction period of 12 to 36 months and we typically expect to recognize revenue for such contracts over the same period.

Our O&M backlog represents expected future revenues under signed, multi-year customer contracts for the delivery of O&M services, primarily for energy efficiency and renewable energy construction projects completed by us for our customers.

We define our 12-month backlog as the estimated amount of revenues that we expect to recognize in the next twelve months from our fully-contracted backlog. See Note 2 “Summary of Significant Accounting Policies” for our revenue recognition policies. See “We may not recognize all revenues from our backlog or receive all payments anticipated under awarded projects and customer contracts” and “In order to secure contracts for new projects, we typically face a long and variable selling cycle that requires significant resource commitments and requires a long lead time before we realize revenues” in Item 1A, Risk Factors.

Assets in Development

Assets in development, which represents the potential design/build project value of small-scale renewable energy plants that have been awarded or for which we have secured development rights, were estimated at $2.7 billion as of December 31, 2025 and $2.3 billion as of December 31, 2024. These are also important metrics because they help us gauge our future capacity to generate electricity or deliver renewable gas fuel which contributes to our recurring revenue stream.

Results of Operations

The following table sets forth certain financial data from the consolidated statements of income for the periods indicated (1):

Year Ended December 31,

2025

2024

Year-Over-Year Change

(In Thousands)

Dollar Amount

% of Revenues

Dollar Amount

% of Revenues

Dollar Change

% Change

Revenues

$

1,932,126 

100.0 

%

$

1,769,928 

100.0 

%

$

162,198 

9.2 

%

Cost of revenues

1,628,113 

84.3 

%

1,513,837 

85.5 

%

114,276 

7.5 

%

Gross profit

304,013 

15.7 

%

256,091 

14.5 

%

47,922 

18.7 

%

Earnings from unconsolidated entities

1,449 

0.1 

%

792 

— 

%

657 

83.0 

%

Gain on sale of business, net

— 

— 

%

38,007 

2.1 

%

(38,007)

(100.0)

%

Selling, general and administrative expenses

178,536 

9.2 

%

173,761 

9.8 

%

4,775 

2.7 

%

Asset impairments

3,748 

0.2 

%

12,384 

0.7 

%

(8,636)

(69.7)

%

Operating income

123,178 

6.4 

%

108,745 

6.1 

%

14,433 

13.3 

%

Interest expense and interest income, net

87,936 

4.6 

%

70,182 

4.0 

%

17,754 

25.3 

%

Other (income) expenses, net

(9,733)

(0.5)

%

4,623 

0.3 

%

(14,356)

(310.5)

%

Income before income taxes

44,975 

2.3 

%

33,940 

1.9 

%

11,035 

32.5 

%

Income tax benefit

(11,700)

(0.6)

%

(20,000)

(1.1)

%

(8,300)

(41.5)

%

Net income

$

56,675 

2.9 

%

$

53,940 

3.0 

%

$

2,735 

5.1 

%

Net (income) loss attributable to non-controlling interest and redeemable non-controlling interest

$

(12,391)

(0.6)

%

$

2,817 

0.2 

%

$

15,208 

539.9 

%

Net income attributable to common shareholders

$

44,284 

2.3 

%

$

56,757 

3.2 

%

$

(12,473)

(22.0)

%

(1) A comparison of our 2024 and 2023 results can be found in Item 7 of our 2024 Form 10-K filed with the SEC.

Our results of operations for the year-ended December 31, 2025 reflect a year-over-year increase in terms of revenues, operating income, and net income attributable to common shareholders. All financial result comparisons are against the prior year period.

•Revenue: total revenues increased primarily due to a $146.7 million, or 11%, increase in our project revenue attributed primarily to continued growth and expansion in our project business in Europe.

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•Cost of Revenues and Gross Profit: the increase in cost of revenues is primarily due to the increased project revenues described above and higher depreciation expenses from the continued growth in our operating assets portfolio. Gross profit as a percent of revenues increased primarily due to a more favorable mix of higher-margin projects.

•Gain on Sale of Business, Net: in 2024, we divested an energy technology and advisory services company and recognized a gain of $38.0 million, net of transaction expenses.

•Selling, General and Administrative Expenses: the increase is primarily due to higher professional fees of $4.5 million and higher net salaries and benefits of $2.5 million, partially offset by lower miscellaneous corporate expenses.

•Asset Impairments: long-lived asset impairment charges of $3.7 million recorded in 2025 primarily related to equipment failures. Last year included long-lived asset impairment charges of $12.4 million primarily related to one of our landfill gas to energy assets and solar panels purchased under the IRS safe harbor provisions for renewable energy projects.

•Interest Expense and Interest Income, Net: increased primarily due to increases in the amount of energy asset financings and corporate debt outstanding.

•Other (Income) Expenses, Net: includes gains and losses from derivatives transactions, foreign currency transactions, interest expense, interest income, amortization of financing costs, certain government incentives, and bank discount fees. The decrease in other expenses, net is due to foreign currency transaction gains of $7.1 million versus losses of $3.8 million last year.

•Income Tax Benefit: the benefit for income taxes is based on various rates set by federal, state, provincial, and local authorities and is affected by generated tax credits and differences between financial accounting and tax reporting requirements. The tax benefit was lower in 2025 as compared to 2024 because we elected to sell more generated investment tax credits rather than retain them and tax expense related to an increase in our future effective state tax rate, offset by the effect of higher earnings in lower tax rate jurisdictions, noncontrolling interest, and provision to return adjustments.

•Net Income and Earnings Per Share: Net income increased due to the reasons described above. Net income attributable to common shareholders decreased due to higher income attributable to non-controlling interests. Basic earnings per share for 2025 was $0.84, a decrease of $0.24 per share compared to 2024. Diluted earnings per share for 2025 was $0.83, a decrease of $0.24 per share, compared to 2024.

Business Segment Analysis

Our reportable segments for the year ended December 31, 2025 were North America Regions, U.S. Federal, Europe, and Renewable Fuels (formerly Alternative Fuels). On January 1, 2024, we changed the structure of our internal organization, and our U.S. Regions and Canada are now included in North America Regions. Additionally on January 1, 2024, our Asset Sustainability Group was formerly included in Canada, but is now included in “All Other”. As a result, previously reported amounts have been reclassified for comparative purposes. See Note 20 “Business Segment Information” for additional information about our segments.

Revenues

Year Ended December 31,

Year-Over-Year Change

(In Thousands)

2025

2024

Dollar Change

% Change

North America Regions

$

884,800 

$

878,828 

$

5,972 

0.7 

%

U.S. Federal

292,673 

372,536 

(79,863)

(21.4)

Renewable Fuels

158,483 

173,342 

(14,859)

(8.6)

Europe

528,956 

250,574 

278,382 

111.1 

All Other

67,214 

94,648 

(27,434)

(29.0)

Total revenues

$

1,932,126 

$

1,769,928 

$

162,198 

9.2 

%

•North America Regions: the increase is primarily due to a $14.0 million, or 19%, increase in energy asset and $6.3 million, or 18%, increase in O&M revenue attributable to new renewable energy assets placed in service offset in part by a decrease of $19.1 million in project revenue attributable to the timing of revenue recognized based upon costs incurred to date relative to total expected costs on active projects.

•U.S. Federal: the decrease is primarily due to a $89.3 million, or 30%, decrease in project revenue attributable to the timing of revenue recognized as a result of the phase of active projects compared to the prior year and the reversal of previously recognized revenue as it was determined that the closing of a sale of a solar photovoltaic energy project was no longer probable, partially offset by an increase of $8.3 million in energy asset revenue.

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•Renewable Fuels: the decrease is primarily due to lower project revenues of $20.0 million attributable to the timing of revenue recognized as a result of the phase of an active project, offset by a $5.6 million increase in energy asset revenues resulting from the continued growth of our operating portfolio and increased production levels generated from our renewable natural gas facilities.

•Europe: revenues increased primarily due to higher project revenue of $272.8 million, or 114%, resulting from the continued growth and expansion in our project business in Europe.

•All Other: All other revenues were lower primarily due to the divestiture of an energy technology and advisory services company last year.

Income (Loss) before Income Taxes and Unallocated Corporate Activity

Year Ended December 31,

Year-Over-Year Change

(In Thousands)

2025

2024

Dollar Change

% Change

North America Regions

$

72,741 

$

40,903 

$

31,838 

77.8 

%

U.S. Federal

34,236 

41,964 

(7,728)

(18.4)

Renewable Fuels

(1,255)

(1,395)

140 

10.0 

Europe

25,382 

776 

24,606 

3,170.9 

All Other

7,437 

47,083 

(39,646)

(84.2)

Unallocated corporate activity

(93,566)

(95,391)

1,825 

1.9 

Income before income taxes

$

44,975 

$

33,940 

$

11,035 

32.5 

%

•North America Regions: the increase is primarily due to the higher revenues described above and higher gross profit as a percent of revenues primarily due to better execution in our project line of business and a gain on derivatives this year versus a loss last year.

•U.S. Federal: the decrease is due primarily to the decreased revenues described above, offset by higher gross profit attributable to better execution primarily in our project line of business.

•Renewable Fuels: the decrease in loss is primarily due to lower asset impairment charges of $8.6 million on landfill gas to energy assets offset by higher interest expense of $6.5 million this year.

•Europe: the increase is primarily due to the continued growth and expansion in our project business, resulting in higher revenue as described above, offset partially by increased salaries and benefits, net, and project development costs and other professional fees.

•All Other: the decrease is primarily due to the lower revenue as described above and a gain of $38.0 million recognized last year on the sale of business.

•Unallocated corporate activity includes all corporate level selling, general and administrative expenses and other expenses not allocated to the reportable segments. We do not allocate any indirect expenses to the segments. Corporate expenses decreased primarily due to foreign currency transaction gains of $3.8 million versus losses of $2.5 million last year and $2.6 million in asset impairment charges last year, partially offset by higher interest expense, net of $7.6 million.

Liquidity and Capital Resources

Overview

Since inception, we have funded operations primarily through cash flow from operations, advances from Federal ESPC projects, our senior secured credit facility, second lien term loan, and various forms of other debt (see “Energy Asset Financing” below) and equity.

Working capital requirements can be susceptible to fluctuations during the year due to timing differences between costs incurred, the timing of milestone-based customer invoices and actual cash collections. Working capital may also be affected by seasonality, growth rate of revenue, long lead-time equipment purchase patterns, advances from Federal ESPC projects, and payment terms for payables relative to customer receivables.

We expect to incur additional expenditures in connection with the following activities:

•equity investments, project asset acquisitions, and business acquisitions that we may fund from time to time

•capital investment in current and future energy assets

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•material, equipment, and other expenditures for large projects

We regularly monitor and assess our ability to meet funding requirements. We believe that cash and cash equivalents, working capital and availability under our revolving senior secured credit facility, combined with our right (subject to lender consent) to increase our revolving credit facility by $100.0 million, plus develop and sell asset transactions, sales of tax attributes, and our general access to credit and equity markets, will be sufficient to fund our operations through at least March 2027.

We continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate and that we can meet our capital and debt service requirements. This may include limiting discretionary spending across the organization and re-prioritizing our capital projects amid times of political unrest, the duration of supply challenges, and the rate and duration of the inflationary pressures, and other events affecting our liquidity. For example, recent increases in inflation and interest rates have impacted overall market returns on assets. We have therefore been particularly prudent in our capital commitments over the past few quarters, ensuring that our assets in development continue to align with our hurdle rates.

Divestiture of a Business

On December 31, 2024, we completed the sale of a business. As a result of this transaction, we received net proceeds of $54.2 million, and recorded a gain of $38.0 million, net of transaction costs of $2.2 million, from this disposition. At closing we prepaid $57.0 million towards our senior secured term loan.

August 2023 Purchase and Sale Agreement

On August 4, 2023, we entered into a purchase and sale agreement to acquire an energy asset project and rights to acquire 100% of the stock of Bright Canyon Energy Corporation (“BCE”) in a two-phased transaction exclusive of each other. Phase 1, the purchase of the energy asset project, closed on August 4, 2023 and did not constitute a business in accordance with ASC 805-50, Business Combinations.

Phase 2 closed on January 12, 2024, and we acquired BCE, including its interest in a consolidated joint venture and its interests in project subsidiaries developing or with rights to develop solar, battery, and microgrid assets for an adjusted purchase price of $48.0 million, of which $9.8 million was paid in cash and $32.5 million was financed through a seller’s note. The remaining cash balance due of $5.7 million and the seller’s note in the amount of $32.5 million was paid during the year ended December 31, 2024. We also assumed four land leases for the energy asset projects. Phase 2, the purchase of the energy asset projects did not constitute a business in accordance with ASC 805-50, Business Combinations.

Senior Secured Corporate Credit Facility

On January 23, 2025, we refinanced our term loan and revolving credit facility by entering into a sixth amended and restated senior secured credit agreement (“Restated Credit Agreement”) with the group of lenders thereto. The interest rate for borrowings is based on, at our option, either the Base Rate plus a margin of 0.75% to 1.75%, depending on our core leverage ratio; or the Term SOFR plus a margin of 1.75% to 2.75%, depending on our core leverage ratio. A commitment fee of between 0.25% and 0.375%, depending on our core leverage ratio, is payable quarterly on the undrawn portion of the revolver. At closing we paid $2.3 million in lenders fees and debt issuance costs. Proceeds from this agreement in the amount of $180.0 million and $13.0 million were used to pay the balance of our revolving credit facility and the outstanding portion of the senior secured term loan, respectively, at closing.

The restated credit amendment replaces and extends Ameresco's existing credit agreement dated March 4, 2022, and subsequently amended (the “Original Credit Agreement”). The Restated Credit Agreement refinanced the credit facilities under the Original Credit Agreement and replaced it with the following facilities:

•a $225.0 million revolving credit facility, maturing on December 28, 2028, and

•a $100.0 million term loan A, maturing on December 28, 2028.

The revolver may be increased by up to an additional $100.0 million at Ameresco's option if lenders are willing to provide such increased commitments, subject to certain conditions.

Additional terms of the Restated Credit Agreement are as follows:

•the term loan requires quarterly principal payments of $1.3 million starting March 31, 2025, with the balance due at maturity

•the revolving credit facility requires payment at maturity

•a debt service coverage ratio (as defined in the agreement) of at least 1.5 to 1.0

•a total funded debt to EBITDA of less than 3.5 to 1.0

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Second Lien Term Loan

On June 28, 2024, we entered into a second lien credit agreement which provided a term loan in a principal amount of $100.0 million with a maturity date of June 28, 2029. The term loan bears an interest rate of Secured Overnight Financing Rate (“SOFR”) (4.011% at December 31, 2025), plus an applicable margin of 5.875% per annum. Interest is payable quarterly and unpaid interest and principal is due in the aggregate on June 28, 2029.

Energy Asset Financing

Energy Asset Construction and Operating Facilities, Financing Facilities, and Term Loans

We have entered into a number of construction and term loan agreements for the purpose of constructing and owning certain renewable energy plants. The physical assets and the operating agreements related to the renewable energy plants are generally owned by wholly owned, single member “special purpose” subsidiaries of Ameresco. These construction and term loans are structured as project financings made directly to a subsidiary, and upon commercial operation and achieving certain milestones in the credit agreement, the related construction loan converts into a term loan. While we are required under generally accepted accounting principles (“GAAP”) to reflect these loans as liabilities on our consolidated balance sheets, they are generally non-recourse and not direct obligations of Ameresco, Inc., except to the extent of completion guarantees and EPC contracts and certain equity contribution obligations under our August 2023 Construction Credit Facility as described in more detail below.

Our project financing facilities contain various financial and other covenant requirements which include debt service coverage ratios and total funded debt to EBITDA, as defined. Any failure to comply with the financial or other covenants of our project financings would result in inability to distribute funds from the wholly-owned subsidiary to Ameresco, Inc. or constitute an event of default in which the lenders may have the ability to accelerate the amounts outstanding, including all accrued interest and unpaid fees.

Other than what is included above, significant financings during the year ended December 31, 2025 were as follows:

•August 2023, Construction Credit Facility, 7.79%, due December 2027 - During the year ended December 31, 2025, we drew down $234.9 million and made payments of $240.0 million under this facility. As of December 31, 2025, $307.2 million was outstanding, net of unamortized debt discount and issuance costs of $6.4 million. The obligations under the loan are guaranteed by all the subsidiaries that are part of the loan portfolio and are secured by the subsidiaries’ assets as well as Ameresco Inc.'s equity interest in the subsidiary which is the borrower entity. In the case of default under the facility, a default under our Senior Secured Credit Facility or a change in control of Ameresco, Inc., we are required to make capital contributions to the borrower entity who then would be required to use the proceeds from the capital contributions to repay the August 2023 Construction Credit Facility.

•October 2022 Financing Facility, 8.75%, due September 2040 - On September 26, 2025 we entered into an amendment to modify the May 27, 2025 omnibus amendment. This amendment included advances of $25.5 million related to an expansion project and $15.7 million related to a true-up payment in connection to the removal of an IRR residual income requirement. The interest rate is now fixed at 8.75% and the maturity date changed from August 31, 2039 to September 26, 2040. On February 3, 2026, a joinder agreement was executed with reference to the construction and development loan agreement, dated August 18, 2023, and two projects were moved under this October 2022 Financing Facility. At closing, we used proceeds of $97.8 million from the joinder to pay off the projects under the construction loan.

•April 2025 Senior Secured Notes, 6.72%, due September 30, 2045, December 2025 Senior Secured Notes, Series B, 6.55%, due September 30, 2045 and Series C, 6.38%, due December 31, 2046, and Term Shelf Note - We entered into a note purchase agreement and private shelf agreement which includes committed proceeds under series A notes of $78.0 million to finance a battery energy storage asset in development, with a maturity date of September 30, 2045, and a fixed interest rate of 6.72% per annum. Gross proceeds from the initial issuance on April 30, 2025 were $67.7 million with the remaining $10.3 million issued on June 27, 2025. The agreement also includes a 20-year term $300.0 million private shelf facility, as well as the ability to issue series B notes with a maturity date of September 30, 2045 on or before December 31, 2025. As part of this transaction, we signed a tax credit transfer agreement for the investment tax credits associated with the BESS asset. Upon the asset achieving commercial operations during the year ended December 31, 2025, we received proceeds from the ITC transfer of $38.4 million and made a $30.0 million prepayment on the note purchase agreement.

On December 18, 2025, joinder agreements were executed with reference to the note purchase and private shelf agreement, dated April 30, 2025, and two new notes (Series B and C) were issued with proceeds of $21.3 million and $38.8 million, with maturity dates of September 30, 2045 and December 31, 2046, respectively. The notes bear interest at fixed rates of 6.55% and 6.38%, respectively, per annum and the interest is payable quarterly and commenced

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December 18, 2025. At closing, we received proceeds from an ITC transfer of $23.2 million, and we used $62.1 million of the total proceeds to pay towards the April 2023 Construction Credit Facility.

•October 2025 Senior Secured First Lien Term Notes, 5.71%, due December 31, 2043, Second Lien Term Notes, 7.40%, due September 30, 2040 and Term Shelf Note - On October 31, 2025 we entered into a note purchase agreement and private shelf agreement which includes committed proceeds under series A notes and second lien notes of $34.4 million and $15.1 million, with maturity dates of December 31, 2043 and September 30, 2040, and fixed interest rates of 5.71% and 7.40% per annum, respectively. We used $46.1 million to pay towards the April 2023 Construction Credit Facility. The agreement also includes a P20Y-year term $80.0 million private shelf facility.

As of December 31, 2025, our total energy asset construction and operating facilities outstanding was $1.2 billion. See Note 9 “Debt and Financing Lease Liabilities” for additional information about the above and additional loans.

Other Financing Facilities and Financing Leases

We have entered into sale-leaseback arrangements for solar PV energy assets with multiple investors and in accordance with Topic 842, Leases, all sale-leaseback transactions that occurred after December 31, 2018, were accounted for as failed sales and the proceeds received from the transactions were recorded as long-term financing facilities

August 2018 Master Sale-leaseback - We sold and leased back nine energy assets for $31.3 million in cash proceeds under this facility during the year ended December 31, 2025. The agreements have interest rates ranging from 0% to 1.86%, as a result of tax credits which were transferred to the counterparty. During the year ended December 31, 2025, we discovered a defect in a Battery Energy Storage System (“BESS”) that we installed for a customer under a long-term power purchase agreement for a project financed under the August 2018 master sale-leaseback agreement. As a result, the BESS had to be removed. Our financing partner has agreed to temporarily waive any events of default and refrain from pursuing remedies available under the master sale-leaseback associated with the BESS failure until March 31, 2026 to allow remediation of the issue (subject to certain conditions). We have fully funded lease payments due under the master lease agreement through March 31, 2026 into a reserve account from which lease payments will be made.

August 2024 Master Sale-leaseback - On April 18, 2023 we entered into lease agreements with two investors and on August 14, 2024 we sold and leased back an energy asset for $234.8 million, of which 50% was allocated to each investor under these agreements. One lease has an expiration date of August 14, 2034 with an option to extend to August 14, 2044 while the other has an expiration date of August 14, 2044. At closing, we used $140.8 million of the proceeds to pay off the April 2023 construction credit facility and made rent prepayments of $60.1 million.

As of December 31, 2025, our total sale-leasebacks classified as long-term financing facilities outstanding was $393.4 million.

As of December 31, 2025, our total financing leases outstanding was $12.1 million. These are our sale-leaseback arrangements entered into as of December 31, 2018 which remain under the previous guidance.

See Notes 8 “Leases” and 9 “Debt and Financing Lease Liabilities” for additional information on these financing facilities.

While we are required under GAAP to reflect these lease payments as liabilities on our consolidated balance sheets, they are generally non-recourse and not direct obligations of Ameresco Inc., except that we have guaranteed certain obligations relating to taxes and project warranties, operation, and maintenance.

Federal ESPC Liabilities

We have arrangements with certain third-parties to provide advances to us during the construction or installation of projects for certain customers, typically federal governmental entities, in exchange for our assignment to the lenders of our rights to the long-term receivables arising from the ESPCs related to such projects. These financings totaled $479.0 million in principal amounts as of December 31, 2025 and $555.4 million as of December 31, 2024. Under the terms of these financing arrangements, we are required to complete the construction or installation of the project in accordance with the contract with our customer, and the liability remains on our consolidated balance sheets until the completed project is accepted by the customer.

We are the primary obligor for financing received, but only until final acceptance of the work by the customer. At this point recourse to us ceases and the ESPC receivables are transferred to the investor. The transfers of receivables under these agreements do not qualify for sales accounting until final customer acceptance of the work, so the advances from the investors are not classified as operating cash flows. Cash draws that we received under these ESPC agreements were $99.7 million during the year ended December 31, 2025 and are recorded as financing cash inflows. The use of the cash received under these arrangements is to pay project costs classified as operating cash flows and totaled $84.2 million during the year ended December 31, 2025. Due to the manner in which the ESPC contracts with the third-party investors are structured, our reported operating cash flows are

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materially impacted by the fact that operating cash flows only reflect the ESPC contract expenditure outflows and do not reflect any inflows from the corresponding contract revenues. Upon acceptance of the project by the federal customer the ESPC receivable and corresponding ESPC liability are removed from our consolidated balance sheets as a non-cash settlement. See Note 2, “Summary of Significant Accounting Policies”, to our consolidated financial statements in this Report.

Other

We issue letters of credit and performance bonds, from time to time, with our third-party lenders, to provide collateral.

Selected Measures of Liquidity and Capital Resources

December 31,

(In Thousands)

2025

2024

Cash and cash equivalents

$

71,785 

$

108,516 

Working capital

$

523,621 

$

412,126 

Availability under revolving credit facility

$

45,064 

$

21,099 

Cash Flows

The following table summarizes our changes in cash, cash equivalents, and restricted cash:

Year Ended December 31,

(In Thousands)

2025

2024

Cash flows from operating activities

$

(80,360)

$

117,598 

Cash flows from investing activities

(256,040)

(386,637)

Cash flows from financing activities

323,102 

313,944 

Effect of exchange rate changes on cash

1,435 

(203)

Net (decrease) increase in cash, cash equivalents, and restricted cash

$

(11,863)

$

44,702 

Our service offering also includes the development, construction, and operation of small-scale renewable energy plants. Small-scale renewable energy projects, or energy assets, can either be developed for the portfolio of assets that we own and operate or designed and built for customers. Expenditures related to projects that we own are recorded as cash outflows from investing activities. Expenditures related to projects that we build for customers are recorded as cash outflows from operating activities as cost of revenues.

Cash Flows from Operating Activities

Our cash flow from operating activities in 2025 decreased over 2024 primarily due to increases in cash outflows of $245.9 million from unbilled revenue, $93.2 million from prepaid expenses and other current assets, and $57.2 million from deferred revenue. These were partially offset by increased cash inflows of $112.4 million from accounts receivable and Federal ESPC receivables of $74.7 million.

Cash Flows from Investing Activities

During 2025, we made capital investments of $326.0 million in new energy assets and $29.0 million in major maintenance of energy assets, compared to $417.0 million and $17.1 million, respectively, in 2024. During 2025, we also received $132.4 million in proceeds the sale of tax credits. As noted above, we sold a business in December 2024 and received net proceeds of $54.2 million.

We currently plan to invest approximately $300.0 million to $350.0 million in capital investments in 2026, principally for the construction or acquisition of new renewable energy plants.

Cash Flows from Financing Activities

Our primary sources of financing during 2025 were proceeds of $552.6 million from energy asset debt financings, proceeds from long-term corporate debt financings of $100.0 million, and $99.0 million from advances on Federal ESPC projects and energy assets, partially offset by repayments of energy asset debt and financing leases totaling $417.5 million.

During 2024, we received net proceeds of $643.5 million from long-term energy asset debt financings, $170.8 million from advances on Federal ESPC projects and energy assets, and proceeds from long-term corporate debt financings of $100.0 million,

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partially offset by repayments of long-term corporate debt of $127.0 million, repayments of energy asset debt totaling $424.4 million, and net payments on our senior secured revolving credit facility of $4.9 million.

We currently plan additional financings of $250.0 million to $300.0 million in 2026 to fund the construction or acquisition of new renewable energy plants as discussed above.

We may also, from time to time, finance our operations through issuance of equity or debt securities.

Critical Accounting Policies and Estimates

Preparing our consolidated financial statements in accordance with GAAP involves us making estimates and assumptions that affect reported amounts of assets and liabilities, net sales, and expenses, and related disclosures in the accompanying notes at the date of our financial statements. We base our estimates on historical experience, industry and market trends, and on various other assumptions that we believe to be reasonable under the circumstances. However, by their nature, estimates are subject to various assumptions and uncertainties, and changes in circumstances could cause actual results to differ from these estimates, sometimes materially.

We believe that our policies and estimates that require our most significant judgments are considered our critical accounting policies and are discussed below. In addition, refer to Note 2 “Summary of Significant Accounting Policies” for further details.

Revenue Recognition

As described in Note 2, we recognize revenue from the installation or construction of projects over time using the cost-based input method. We use the total costs incurred on the project relative to the total expected costs to satisfy the performance obligation. When the estimate on a contract indicates a loss or claims against costs incurred reduce the likelihood of recoverability of such costs, we record the entire estimated loss in the period the loss becomes known. In addition, some contracts contain an element of variable consideration, including liquidated damages and/or penalties, which requires payment to the customer in the event that construction timelines or milestones are not met. We estimate the total consideration payable by the customer when the contracts contain variable consideration provisions, based on the most likely amount anticipated to be recognized for transferring the promised goods or services. As a result, we may constrain revenue to the extent that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

To the extent a contract is deemed to have multiple performance obligations, we allocate the transaction price of the contract to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract.

Significant judgment is required to estimate the total expected costs and variable consideration for projects that typically have a construction period of 12 to 36 months. Any increase or decrease in estimated costs to complete a performance obligation without a corresponding change to the contract price could impact the calculation of cumulative revenue to date and gross profit on the project. Similarly, if we recognize revenue based upon our current estimate of variable consideration, and our estimate is later adjusted, we may be required to increase or decrease cumulative revenue to date and gross profit on the project. Factors that may result in a change to our estimates include unforeseen engineering problems, construction delays, the performance of contractors and major material suppliers, and unusual weather conditions, among others.

We have a long history of working with multiple types of projects and preparing cost estimates, and we rely on the expertise of key personnel to prepare what we believe are reasonable best estimates given available facts and circumstances. Due to the nature of the work involved, however, judgment is involved to estimate the costs to complete and the amounts estimated could have a material impact on the revenue we recognize in each accounting period. We cannot estimate unforeseen events and circumstances which may result in actual results being materially different from previous estimates.

Impairment Assessments

We evaluate our long-lived assets, including goodwill and intangible assets, for impairment as events or changes in circumstances indicate the carrying value of these assets may not be fully recoverable, and at least annually (fourth quarter) for goodwill and intangible assets that have indefinite lives. In 2023, we changed the assessment date from December 31st to October 31st. Examples of such triggering events applicable to our assets include a significant decrease in the market price of a long-lived asset or asset group, a current-period operating or cash flow loss combined with a history of operating or cash flow losses, a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group, or adverse industry or economic trends.

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We evaluate recoverability of long-lived assets and definite-lived intangible assets by estimating the undiscounted future cash flows associated with the expected uses and eventual disposition of those assets. When these comparisons indicate that the carrying value of those assets is greater than the undiscounted cash flows, we recognize an impairment loss for the amount that the carrying value exceeds the fair value.

The process of evaluating the potential impairment of long-lived assets, goodwill and intangible assets requires significant judgment. For goodwill, we estimate the reporting unit’s fair value and compare it with the carrying value of the reporting unit, including goodwill. If the fair value is greater than the carrying value of its reporting unit, no impairment is recorded. Fair value is determined using both an income approach and a market approach. The estimates and assumptions used in our calculation include revenue growth rates, expense growth rates, tax rates, net working capital requirements, expected capital expenditures and estimated discount rates to determine projected cash flows. Of these estimates, the determination of the estimated discount rate and net working capital requirements are significant to our analysis. Our discount rate assumptions are based on an assessment of our risk-adjusted discount rate, applicable for each reporting unit. These estimates are based on historical experience, our projections of future operating activities, and our weighted-average cost of capital. Unforeseen events and changes in circumstances or market conditions could adversely affect these estimates, which could result in an impairment charge.

We had no goodwill impairment for the years ended December 31, 2025 and 2024 and reporting units with goodwill had estimated fair values that exceeded their carrying values by at least 63% and 49%. respectively. During the year ended December 31, 2023, one reporting unit had a fair value that was 2% less than the carrying value and we recorded a $1,644 goodwill impairment, which was $2,222 net of tax and was primarily driven by a decline in projected cash flows, including revenues and profitability. One reporting unit with goodwill had an estimated fair value that exceeded its carrying value by 16%. All other reporting units with goodwill had estimated fair values that exceeded their carrying values by at least 65% as of December 31, 2023.

Derivative Financial Instruments

We account for our interest rate swaps and our make-whole provisions as derivative financial instruments which are carried on our consolidated balance sheets at fair value.

The fair value of our interest rate swaps are determined based on observable market data in combination with expected cash flows for each instrument. Among the key drivers of value are interest rates, since the future floating rates are unknown. The value of our interest rate swaps will change in subsequent periods as counterparty credit risk and forward expectations of the floating rate change. Therefore, depending on how the yield curve changes in subsequent measuring periods, a swap can become an asset or a liability for us. In addition, model inputs used in swap analyses can also substantially affect the fair value of the swaps.

Our make-whole provisions fulfill the requirements of embedded derivative instruments that were required to be bifurcated from the host agreement. The fair value of these make-whole provisions are determined based on available market data and a with and without model. There are several assumptions and estimates used in the calculation of the fair value of derivatives, such as discount rate and risk premium.

Any changes in the fair value of our derivatives designated as hedging instruments are recorded as adjustments to other comprehensive (loss) income and any changes in fair value of our derivatives not designated hedging instruments are recorded in other (income) expenses, net in our consolidated statements of income. See Note 19 “Derivative Instruments and Hedging Activities” for more information.

Income Taxes

We are subject to income taxes in the U.S. and six foreign jurisdictions. Significant judgment is required in determining income tax expense, deferred tax assets and liabilities and uncertain tax positions. The underlying assumptions are also highly susceptible to change from period to period. We took advantage of the Safe Harbor commence-construction provisions contained in IRS Notice 2018-59 by pre-purchasing solar equipment in 2019 thereby preserving the ability to take 30% ITC for projects placed in service before 2024. However, the IRA signed by the President on August 16, 2022 increased the ITC rate back to 30% for projects placed in service after January 1, 2022 and before January 1, 2033. If these or other deductions and credits expire without being extended, or otherwise are reduced or eliminated, our effective tax rate would increase, which could increase our income tax expense and reduce our net income. In addition, our tax rate has historically been significantly impacted by the IRC Section 179D deduction. This deduction is related to energy-efficient improvements we provide under government contracts. The Consolidated Appropriations Act, 2021 made permanent the Section 179D Energy Efficient Commercial Building Deduction. That Act made changes to the way the deduction is calculated. If those changes result in lower levels of energy efficiency improvements, it could impact the deduction available and the tax rate. On December 12, 2024, the U.S. Department of the Treasury and IRS issued final regulations regarding ITCs for Section 48 of the Internal Revenue Code, including the ITCs for

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energy generation, energy storage technology, qualified biogas property, and interconnection property. We are taking additional ITCs on our renewable gas projects consistent with the regulation language permitting separate ownership.

The jurisdictional mix of our profit before tax has changed substantially from 17% in foreign locations in 2024 to 68% in foreign locations in 2025, primarily due to experiencing growth in Romania and Greece, offset by losses in the United Kingdom. This movement in the jurisdictional mix does not result in a material change to the overall tax rate due to foreign tax rate differences from the U.S. statutory.

The OBBB includes several changes for corporations that may affect income tax provisions, including items related to income taxes on the face of the financial statements and in the disclosures, for periods that include the enactment date. The OBBB makes modifications to energy credits, including extending the clean fuel production credit, gradually phasing out other investment tax credits and placing restrictions on certain foreign entities constructing and owning clean energy facilities. The Company is primarily affected by phasing out of the clean electricity investment credit for solar and battery projects for which construction begins more than 12 months after the date of enactment or for which the projects are placed in service after December 31, 2027. If we are not able to utilize the ITC as expected, this could have an adverse effect on our financial results.

Our tax rate has historically benefited from the IRC Section 179D deduction. This deduction is related to energy efficient improvements we provide under government contracts. The Consolidated Appropriations Act, 2021 made permanent the Section 179D Energy Efficient Commercial Building Deduction. However, the OBBB has ended the Section 179D deduction for construction projects that begin after June 30, 2026.

We accrue for the estimated additional tax and interest that may result from tax authorities disputing uncertain tax positions. We believe we have made adequate provisions for income taxes for all years that are subject to audit based upon the latest information available. We operate within multiple taxing jurisdictions and are subject to tax audits in these jurisdictions. These audits can involve complex issues and may require an extended period of time to resolve. We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Although we believe that we have adequately reserved for our uncertain tax positions, we can provide no assurance that the final tax outcome of these matters will not be materially different. We adjust these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences may affect the provision for income taxes in the period in which such determination is made and could have an impact on our results of operations.

On a quarterly basis, we assess our current and projected earnings by jurisdiction to determine whether or not our earnings during the periods when the temporary differences become deductible will be sufficient to realize the related future tax benefits. Should we determine that we would not be able to realize all or part of our net deferred tax asset in a particular jurisdiction in the future, a valuation allowance to the deferred tax asset would be charged to income in the period such determination was made. This valuation allowance is maintained for deferred tax assets that we estimate are more likely than not to be unrealizable based on available evidence at the time the estimate is made. The determination of whether a valuation allowance for deferred tax assets is appropriate is subject to considerable judgment and requires an evaluation of all positive and negative evidence, including our historical financial results, the source and consistency of those results, whether they should be adjusted for certain one-time or nonrecurring items, whether losses cumulatively exceed income over a reasonable period of time, the availability of tax planning strategies, availability of carryback and carryforward periods, and other factors, including our expectations of future taxable income. Adjustments to income tax expense to the extent we establish a valuation allowance or adjust this allowance in a period could have a material impact on our financial condition and results of operations.

Recent Accounting Pronouncements

See Note 2 of the “Notes to Consolidated Financial Statements” for a discussion of recent accounting standards.