Ameresco (AMRC) 5 Aug 242024 Q2 Earnings call transcript

Good afternoon, everyone. We appreciate you joining us for today's call.

Joining me here are, George Sakellaris, Ameresco's Chairman, President and Chief Executive Officer; Doran Hole, Executive Vice President and Chief Financial Officer; Nicole Bulgarino, Executive Vice President and General Manager Federal and Utility Solutions; Mike Bakas, Excretive Vice President, Renewable Natural Gas; and Mark Chiplock, Senior Vice President and Chief Accounting Officer.

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. major earnings our same SEC to supplemental a of today's Slide language filings differ to could discussion of that our X information the from refer those materials, actual forward-looking harbor the on for cause in Please our factors statements. results risk and our

we use when In non-GAAP addition, presenting our measures several financial results.

the reconciliations our supplemental now turn We in information. I George? George. measures have call to included to these the over will

good and afternoon, everyone. Leila, you, Thank

and the QX the greatly on to Doran endeavors. I best would as with this serve our could Before release. last address Chiplock Officer. Mark promoted started to XX, I August role Financial opportunities. continue for I step has appreciate will Officer results, like roles until seasoned to leader. over am the Ameresco as the time in Chief X to over served has statement earnings his We get Chief at contributions pursue have other Financial Chief into in years Ameresco future captured thrilled Mark which Doran's him years resigned and Doran Mark with Hole increasing as wish to has Financial been in responsibility. the a multiple be Officer XX

Josh results. President will will skillfully the this as of In navigate deep to role addition, of Vice Baribeau executives seasoned assume now, Finance. Senior our a expanded an bench I believe transition. And on

excellent year-over-year revenue. by increasing our a same revenue impressive lines, the visibility, we an second At backlog across led billion. continues into the project to of total XX% on to team build time, growth delivers Our record as business in the XX% $X.X our continue growth momentum long-term Ameresco again all X quarter strong by

cost energy operation, still and are We of renewables, continues of the both very into allows reliability. Ameresco's platform our that XXX XXX see. of assets energy bringing at technology transition. of have technology-agnostic engineering in customers energy and to we strong, as savings be Clean and forefront efficiency, and depth the solutions resiliency megawatts a yield record assets stay megawatts offerings development. Demand our expertise to of increased us also

environment Bulgarino to of is is the key thrived was administrations. market has asked years but in of customers, around to The ago, infrastructure strong, have of business. upcoming including cost that join lot government, established a and manner. I our continues our not we a our helping the be only members to achieve there X savings uncertainty almost understand variety improve elections. Ameresco do under discuss us Bakas, While their XX and very foundation capital-efficient and Mike a team, Nicole their of business executive energy grown Nicole?

afternoon, Thank everyone. you, George, and good

mentioned, businesses, expect just our demand energy resilient are we we for clean projects the of for George as and outlook both excited As utility years federal for many continued to come.

X administration have we our last from and while the have seen policy the decades, Over for drivers to shift another, business consistent. key remained messaging one

their mission-critical focused military bases, secure power housing communities. ports, that deliver resilient and government Our support continue office agency and military be to on customers and facilities, buildings, to projects

uniquely have by other positioned administrations, the and are deploying upgrades distributed for reducing of solutions. Across We solutions energy latest these agencies. comprehensive objectives and efficiency customers multiple load through successful, our energy Department we by large, the to government generation help highly achieve delivered Defense

domestically of third-party very assets, additional solutions projects integrating sourced financing. a have pipeline strong and We using

to electricity utility business, on clean For also cost-effective, providing transitioning focused while our are energy. customers our reliable

increased amount resiliency to energy have demand during stability, solutions allowing and peak an been to grid utilizing storage to load intermittent need power they utility for addition, and electrification by driven increase address of development. growth renewable More recently, the In the and providing center periods battery grid capacity data critical energy. better handle customers

already made with week meaningful example announcements customers recently last the the system battery of our online just and increase a growth is of large is are as Power serving June, last same team the few significant solution the great of in rapid the storage utility perfect We the United time. Colorado number by we storage our work, KÅ«pono are a and example integrated our in this celebrated systems seen in of an which as in brought Solar federal years. we business, utility both experiencing The battery at

the markets. the As both us strong see, execution a for reputation opportunities and to expertise our can places expanding on utility technology and you position capitalize federal in in prime

clean, Our in projects great is Washington. I high in efficiency, and creating turn changes over the of demand call supporting Mike? national now local and money, jobs will enhance This Mike. while proposition to regardless value provide save resilient, power reliable policies.

now founding, Thank you, Ameresco honestly developing as am projects can been I and Nicole. biofuel about since prospects. excited its I has have I never our been as that say

such used the seeing has supply their primary part of involves RINs. profitable number for market the is that side Ameresco is is by only bodies it announce to chosen very as thermal to side. been also final but infrastructure. by picked no the up the of the Public gas end, represent the these reduce the utility contract one footprint RNG only many to to drop-in help fixed RFS locally approval turn this profitable have sector, by perfect global help price to as only this large utility themselves, But a industries Commission, driven impact. In carbon goals. In on to the renewable market seek off-take RNG's utilities. agreements RIN gas would this by with we is large biofuels natural to available transportation with focus portfolio business consumption potential to customers. In many is a balance of green with carbon natural requiring parties natural the Ameresco's our is capitalize positioned RNG For not via portion sell non-transportation RNG sector. And California the meet country stream. XXXx meet the California-based potential, RNG the so, This as our to as over market we primarily has attention regulatory a longer-term for the longer-term, the contract supply noticeably, opportunities would years, existing granted Gas gas state-mandated off-take a utility in their volatility, the long-term to natural sustainability, meaningful contracts been Ameresco, reduction to of of carbon are very immediately of volumes also reducing of volume. In to X-year RNG a overall excited this while reduce huge demand a doing in to on to are And benefiting electric to program. this, industries, our it programs agreements expansion This exposure exposure its addressable content. If and utilities summary, transportation while the represents substitute for states have their uniquely markets light RFPs opportunity, from utility's gas, of changes entrance across our as revenue leveraging continued equation, sourced Utility

provide investment to reliance this on come. I IRA-related years outlook. to class without over significant, meet financial profitable Importantly, will our call our asset now believe return continues to on also for RNG credits. stable, hurdles We tax the continue turn performance any to assets growth our and Doran to will comment

Thanks, and Mike, afternoon, everyone. good

congratulate put I've just experience for I to here team been this had start, what's them. amazing real past years. is confident working words huge I and into to on the George I've in I the feel very, management both successful here a have entire of Ameresco, Josh Ameresco Before with and much new and say been this Board. I want roles. want It in say hands. X excellent learned an to It's company impossible their futures team pleasure how to Mark to I thanks and is at the a their very from over

now numbers. jump the with into let's So that,

the were growth. revenues our closed the grew the our financial For $XXX information, market please and experiencing that revenue Total today. business release additional to XX% supplemental to of each in with refer website lines posted slides million after X to press quarter

RIN conversion and grew reflecting target X.X%, year. Our as operating quarter improved higher way meeting into due assets our production, record greater Projects to number as largely We last are the XX%, well business execution brought second backlog. Energy the prices. of grew anticipated XXX of revenue our our asset and of well our XXX-megawatt on megawatts for in focus the a to year, assets revenue compared on operation to

which growing XXX energy should and now large assets company. operating base revenue provide at to Our stands megawatts, decades of profitable of the

a long-term more of other XX% as business growing with from additional strong related of very for a had approximately strong as well to the cost revenue expected million. continued leverage, as ranges. In our our of match well our adjusted to our business revenue quarter consulting O&M as X.X% plus approximately as business, we XX.X%, the in growth, drove projects, other incurred line revenue margins, win XX% savings million continued and margin costs historic some we businesses. Gross mix to to with $X.X our our projects. while SCE of gross lower-margin grew operating as performance dipped Our That underlying O&M of second growth backlog, said, margins EBITDA our $XX.X quarter,

healthy on led both during and year-on-year XX% growth asset quarter. the X% contracted The sequentially. project our was This company's sequentially. was noted, and activity billion $X.X year-on-year As and backlog the billion, which by grew George our approximately and backlog, side very reached XX% business total project growing XX% $X.X development was

cash debt $XXX approximately Turning quarter ended in $XXX corporate of and to cash the our million million. balance approximately sheet We with flows. and

X.Xx secured the Our below declined of credit X.Xx. our and facility under leverage ratio to debt-to-EBITDA remains covenant level senior

debt XX%. advance at remained asset energy rate a conservative Our

options we project is financing $XXX asset as many approximately to Importantly, million new demonstrated in our commitments us in access quarter. secured the excellent, available, having believe financing energy with capital by

our energy our in end believe have on parties Ameresco, were assets side, $XXX to corporate quarter, interested Infrastructure successfully also capabilities. And the many highly with teaming financing at Energy attractive proven debt Credit. million the we pleased the from subordinated raised given We remain in Nuveen of to

flow continued to million cash the adjusted Our approximately positive operations $XXX with of cash during quarter. flow be strong, from

we have best and average, cash both projects. slides, almost flow Our implementation the cycle, as to especially seen million. rolling and in we increased cash the highlight to $XX.X which bill momentum rolling battery our expect our continue we In collect the on supplemental metrics X-quarter Ed improve, flows, SoCal we reached represents

Speaking of for X SoCal the projects. X the been and checklist for Ed, of our performance on we together final approved, are working testing substantial has completion

by was of September The in more project, completion substantial reach rainfall, the which this to significantly impacted expected XXXX third year. is

spend XXXX guidance. me let Now on a new our minutes few

for the remainder year performance half We year. are increasing visibility strong financial of our based for on the first of the revenue our range the solid the and

gross Our of new on full-year approximately margin budget million. $XX range SCE the expected cost the projects impact reflects of the revisions

Our adjusted new and at range revenue the growth and EBITDA of would XX%, guidance respectively, yield midpoints. XX%

release. find more in details guidance can You the our revised on XXXX press

comments. to Now over back to turn George call for I'd like the closing

Thank for these regardless solutions seek you, environment resiliency. cost believe Doran. Ameresco environment that thrives result in political and solutions We clean will energy and continue, greater the customers demand this in environment Washington. of an in savings where the

would flow on employees, well continued call thank I We and to stockholders future in laser again like to our would and now. we focused cash backlog their closing, $X.X are customers, our for questions positioned billion tremendous to support. Operator, executing and we open revenue with the extremely over once are like visibility, generation. In

first Instructions] Noah from Kaye come And question of is going Co. the with line our to & Oppenheimer [Operator

maybe here, is cash headwinds you generation take line talk in improvement the trend what projects. but specific seem to is first was just The drive generation on broadly. and business the of more continuing in cash levers, in Edison, one the around have there improving really you're potentially us additional a especially little some The last bit But the you some to SoCal around could hoping to deeper conversion quarters, into in past, that I your visibility into necessarily cash not few encouraging. the were Obviously, related generation.

get will go but Mark Yes, let I into ahead, Mark. this,

Yes.

seeing in So think I I you QX, of timing so the encouraging continue things it's if that to improved the milestones, in that lot of cash now think lot in. loading is the some a contracts, to seeing, those of but billing to be help our quarter, front-end look found what some will in we're I a we're we're so come that flow of us show

it receivable, also You on our see line. Federal the see ESPC you you deferred it revenue on when net liability the and and

from conversion well. proceeds the of of the We in the -- transfer also ITC as saw or the quarter

of are positives I think, that So the I that the, some trend. helping think are those

we're roll is to the mind, new front-end and making loaded be quarterly by things projects this is throughout. of Noah, some keeping seeing we cash keep which metric. contractual why we're yes, lumpy, a always the billing milestones stuff the side those are bit in right, on encouraged I we're the flow think, the out to started going that But more positive to changes keep that little

because add Yes. And if and so on Noah, that weren't particular as the it lot X, lot. the results. focusing the on, should weren't was out a receivable, bills high, a fact that I issue, bit the been the we've back sending time, you months, substantial, By XX last, and in paying up might little following generates just And I pretty collection, on paying. get a when we there, the would way, helped attention much say the a probably they rates, it be and now focusing then we accounts as then good interest

down continue improvement focus to in have generated think on We that still that. all and come there and those room seen cash we area. is going And the for up. will I metrics

the Second did California that of of RNG, contract these utility the business. predictability and think you question of and is talking a on job gas visibility out RNG Mike, good on a supply called Mike helpful. kind to with points I natural why large

the to to sort the appetite a Is So of exposure? I portion of fixed understand, would increase the of these continue is and to as like company RNG the contracts what to there just of portfolio? development on be a favorable that would about any more we assets? the then how kind target contribute financing the think of this should optimal for And potentially opportunity does

might will question. the Very, into I Go ask long-term address I come get will end and to back what ahead, Mike Mike. at then very we good contracts. it, percentage

fix terms financing think this, and help that I of the that I market. Obviously, voluntary XX% leaving think, that non-transportation the to going with continues I the sector new a think, past generally, projects. the utility, vehicle and a more going to to great on is the our transportation more try going without of of on to these as unique to of we've start said market the we sector doubt, a credit we're gas to the and our Street will, volume seeing This in projects. contract it's and pricing And our expand. the

Doran, financing, the want you And do to add something?

banks no, X fixed, and cash not the rates. you price the future. when those Yes, get years, we're be those projects, more it's I of we'll advance definitely this surprisingly, the cash mean, as get that better get in we more these one characteristics. we'll first tighter the would pushing flows of obviously, And spreads fixed might for expect those now though striking and even of contracts, that one be actually flows stability like fact But

to And line from Stephen of Stifel. come our next the question Gengaro is with going

about have on something you mine. question asked to thought last before I add might the I been George,

No.

Okay.

Okay.

Sorry.

me, So, how with, you start I think to and things X one look sure when much and into at your assets get you want for I'm energy But this. I'll not into backlog a and think positives and high as XXXX? off, at projects level, we as you go we about at should negatives and what look SCE backlog big the your rolling

if thing actual wanted mean, And know I the other the and big big to execution that have the a great, I the that and -- point on backlog that positive don't is I we I positive great focusing good fact negatives. going screening backlog. quarter in margin since push get, to analysis has kind been our trying the what earlier up. we'll out, up of projects that started backlog, and profit the on we -- gross margins every the we're doing

are I wanted business, on more, under be excellent negative, the that's here to Mike plants a Nicole the states done utilities renewable of plants it's backlog utilities up, explain renewable elections And part why the today it's other the on gas great it's but are coming this. The great be to impact, positive. And the have of hand, or might natural and on it have It's very part an whether has the federal that as now that percentage and the they to will the and that customers. requiring to gas, great, more they getting be that's -- administration. -- great, that the assets, So, the that the solar only the more gas and battery are good. have the a provide their that storage assets, renewable or we that any

the lower California potential much and much Southern the I are going rolling that think, with off, be the are of risks, the risks goods the So, and higher. negatives to

just strong improvement mentioned bit, And a as to fair backlog, embedded Great. but X projects maybe portfolio, over execution to years. assessment? at projects margin you you when the in look Is a the this the you a the follow-on little next have should that, that X assuming margins, of

fair it company become especially Yes, X I last some years, lot with can grows, out, the and as difficulties. situation, that's a why statement. focus. what And COVID we they're have That's and bringing grown have the found the -- a then a

think have don't projects the that margins. I took and they they team best here there, some the

the bearing organization, all have is that didn't margins, risks key, they associated and should those But far. so the they So mitigators and risk have. fruit it's refocusing margins with minimize

a for of positive So, lot next year.

quick one. one just other And

think Any we of color there kind -- how about the for in this half and the consider bit guided XXXX? a should unfolds anything in -- how Just what on third we that in fourth done back You the quarters? about that? past. should of think little the seasonality Is year? You've the we as

follow-up, because numbers. dreaming let been about the Yes, good all Mark and question, we've I will

briefly, just the unlike as think we to seasonality, to I it maybe similar. last QX normal expect but a QX bump be more QX small in would to comes and QX they -- when QX should simple, think year. to I bit a last related shaping, little fairly and opposed be be Yes, year, Maybe should

And our from next question George going Genuity. come with Gianarikas is to of line Canaccord the

a revenue the guidance clear. like to just and sure all we're to EBITDA bit make I'd revised about understand just little

reduction SCE. So, increased on costs $X at million the from a midpoint there's based

is guidance $X million? you -- just raised Just to would pulling didn't to? costs it costs, XXXX? Is for down you be EBITDA that's the clear, you SCE the those if there anything have Are else by have alluded there that

impact Yes, the basically, have. they to we had Southern some projects adversely impacted. projects other we reflect even tried that And the that California other though, minor,

a we However, bit explain done we had project the was thought little after quarter. But and basically, that that let Mark last impact, the more. because I'll the had been

yes, So, right?

We're the -- really bit little a it's was on modifications think I certainly strong SCE. cost But, for were performance. on, focused margin seen the lower it you've having obviously, the least EBITDA were assumed at revenue profile.

into that good changes. we feel made visibility half took But and what we first And pretty those I the about we have, account. it. performance think on So, based we

Yes.

what's Where then maybe a question you a us to to just can growth? more opportunities? whether to significant growth Okay. as I'm detail And see as the you in related little going And on on curious bit center anything is there? the do backlog. data backlog, big give

little her We talk a she's Nicole and I projects But it's is will growth since let bit. And board. the see across here the the board. Yes. across actually, queen,

Sure.

the minutes related think a a energy battery coming our few just that drivers described earlier of market percentage from large growth is to we in the really storage. ago, I backlog

a business, markets. So of in project our our we're those utility seeing on federal lot

a in a to largest the the certainly but for too that we're work then centers now, pipeline energy. that there captured early the batteries little for doing pipeline. of on awarded that. probably in And is lot right portion and that's right it's capitalize the to So, data of not be And now

Kashy come Piper with Sandler. the to question Harrison line of And our next from going is

And Doran, the best luck endeavors. of with future

for question first Mike. is yes, so, So,

number with Sorry missed you're megawatt project California did the utilities? be if great. A the you I this would size working but quantify on this, of EBITDA or RNG

think portfolio. scale relative the Just this of trying the to of to project

Yes. Go ahead, Mike.

projects. X There's Yes.

projects and between utility close our come could XXXX, of And portfolio. so, X actually, of this other was it's about until one portion material the the online effective those The our around to XX, quarter probably XXXX. supply. megawatts online coming in XX doesn't XX% be begin a One X. it today, agreement comes with XXXX. XX%, it It's would in If And if -- January it our will actually early were supply. the XX% up, X, represent of forecasting online, we're

appreciate added on follow-up question is That's the to helpful. a revisions the And color. my Ed. SoCal I then, next budget just

the of separate of the help think flagged think $XX million liquidated to be delayed what if Or damages? would the in you is For budget example, further color I to just Can quarter, project risk forecast? And are total from EBITDA. revisions? another Any then, do the revisions does potential on you through us overruns that appreciated. that that these damages? liquidated these tied are

Doran. ahead, Go

Yes, start guys let Kashy, in. chime and other I'll

So, the the is $XX the across year entire expectation. million

So, we premiums you've know of continue of a from mention that going in in primarily to million QX. number as about delayed. I risk projects up see huge adjustments don't already talked there. get insurance $X.X the QX, related that We to some seen

I of those anything we to to substantial separate face think we related completion. estimate completely conservative what from pretty it's we've been is as might -- bring That a LDs.

Capital the And of Eric our line question Craig-Hallum Group. next from with Stine comes

rolling you about you the the and on margin. and But George, past maybe had curious, also that in in margin through in quarter, that you just So, came talked impacted projects why that some that it some where project were that this were business, projects mentioned priced larger the that's was.

mean, the margin contracts, you that mean, those more what of this sustain? this older quarter? Or projects, in I the just hey, of is to to a about, I is impacted curious, had trend in larger something the that expect that is that's plus Just quarter you mix some

count the portion the And large for on some consult of there. the have that contracts signed of some line, the over of any project we good, quarter very book then had we what projects, what EPC and margin, European it normally. But and then coming the actual impacts you and that the only that's overall, going margin. we and revenue, it's margin, quarter, have though, on executed we top makes But the given you the mixture than feel up. when impacted from might your the -- half because the more backlog, it's me change, adversely Primarily, the

add to You that? want to anything

I think it's just mixed.

Okay. of No, sign you that's great. it's know And just structuring then lot curious, maybe you're I'm that be more you lessons second one SoCal the how level. of there, these learned, But your a Edison? high as energy contracts for here that happened storage SCE, more cetera. out weather-related, me, of I is just control, contracts for the based might the changing what's of awards, Anything on differently. some et

on protections right past every We able that to all different, But backlog, us. been we have the sign the a that achieve have have, now learned can industry. And we see great, become and execution We we that Cal. has of lot. the professors Southern contract the for you the worries

and difficulties to For recently and and battery X, are within contract as it's the the associated the as solar it. the that And to X commissioned example, have getting we storage. up year, of again, labor go already with there, risks an it, U.K., with the of XX and fully well down the running we And now. Then the record and other the projects, the X megawatts Power, finished excellent from minimized X was just being KÅ«pono it's running, broke in the signing Hawaii, all we they and up contracted, they are actually about yes... out projects announced United project, right excellent, you even one just

by really on milestones. Yes. contracts where I'll one U.K., And we're on the add of the a only frontloading more it's focusing good the improving example in of the thing those

on And flow our so QX. line in that part you a through deferred saw -- revenue was of cash come big the that

making we're changes and cash So, improve liquidity. to those flow

our Sir, question Osha going next is our next Irwin Craig line right, And to on with MKM. be ROTH is our Joseph come your from may to question the going Guggenheim. line the move All with moved. And from question. line of we'll come to of next

into maybe energy in if revenue wanted there's backlog storage Or the energy metrics business you So, us if organic could contracted around ask legacy or Projects George, business. have with share I before the to of from The could help with contracted year-over-year the revenue storage storage, some growth what backlog you in with visibility? maybe contribution company moving can you started either contribution storage if is growth the a us to that help your to you quarter? away

government, million, almost battery it I the of that's why federal traditional growth board. business, give the now, on about represent And to the XX% right The billion. are up. will on across our the the high $XXX the projects level. margins the see slowly it's It's storage you others, it's they core battery $X.X Actually, they the of between and million storage. $XXX picking

federal why usually looking sector, if clarify comes federal I Like, because even you haven't. the from the backlog government, X/X we that the the made that's So, is point government and a at we're do X/X little right project. a federal bit, now arithmetic, though about and revenues, of the to the

front-load behind that EPC -- you projects on the executing, So, the and especially execution come any especially if at start them fast, the so material and and you then from the in some but the way, RFP, given then on. of they time, by it's

the So, on profitable leverage contributing margin line. a margin, the they they are the -- great they hit the for impact might gross that particular but quarter, profit

progress. strong That's Excellent.

us is ask question you in there other you to public positive So, that from slated portfolios little just be get allows outperforming or be private your periods? to year-over-year EBITDA. Even in them philosophy about taking a difficult not you'd that and having are in how a apparently Can say, sector, about second talk to issues, companies let's identified. both Many portfolios? seem to customers wanted that interested the maybe of the right? my the you away these projects projects assets talk returns nice couple to in partners large I were maybe you of the So, whether the politely. can structure growth generate about some they'd about the of built, bit And are you business, these very

returns beginning. It's in -- have at, and the and to developing would it across that ones the of and Yes. we lots the that for very basically good people we're said about look keep, think projects. and try derisk from that have are higher past. a we it, we we than country, looking and the are Because why we some starts very, assets them, that's gets The team, just basically that development we other

paying paying great going they're to So our will them, we're on capital, very for be that on keep, that was but it that's we higher looking the them, bit we derisk project. cost partners interest, of higher all even of confident will raising them, RIN though returns we another especially invest good what but that we cost higher their ones the interest, do for ones it's for a it keep, considerably we'll not the new at in company feel addition and And we're this little exceed can to in are a we that we returns only than why capital.

the of we and in is projects Josh's sheet, and committee lot, out then ifs before happened, business because our pretty liquid market this and the sell and then the our develop time, put if we profit, help been so will the say will it's say, project, keep Doran's does have, why we of developed end we what So a due I or that day, sale, and these in risk all we that's diligence why for is of good doing them and okay, this balance do portfolio, happened, with do a there. what not, we that kinds playing we I games, for will assets at at long think the and up that we help, a it that and a if our bid, and part that this we risk, lined project we upfront, that's our what I've them that all would job on investment

that that's any some return development that I'll we're are market ours that reason out we're that might more of development mentioned you just probably as George battery metric keep that's, the hurdles is or, street, also and, going a it's ones that and have taking don't market is that best there to into the to megawatts after into that group see the sell pool our and the advantage development cost the others capital, sheet, the Craig, the develop on kind our solar folks into that team balance we got not at to market we're asset so to and sell as portfolios assets the Yes, want we've why diversified out so of the for buyer, arguably for, there of we've a because competition not are liberty exactly bringing are solid than of of got add for the types, RNG on assets many of choose the asset other best one strong, developing, side. a the the quality in lower fall that of of kind going that's and

hope and, together work to you're where should going congratulations Mark, forward, Doran, we I say, continue going And promotion. somewhere the on I

line is question to of from William next Blair. Our going Mulrooney Tim with come the

think which to you to there start, outlook? ask the tell million now Can original impact. I pieces XX% know the adjust led you that your guide the at previously, the I wanted XX% range. $XX about just low to was in SoCal and it's gaps or us margin midpoint about gross was more the your I

think I what the that probably that XX%, doing XX% only other my accounts pieces moving I'm to math are? curious just right, so for if

just hits we QX, a also, unexpected. the also we took, legacy gross Remembering and a of some were to things that handful little margin projects for bit some

combined, able kind offset by revenue think driving margins and that is overall to yes, But, were of really the we what's down. QX side. the I the on I think, QX think, performance I

I which operating up. to leverage, actually seeing and talked we're refocus impact, think important really about think on that come SoCal I in is the what but it's back we

grow Tim, faster I So were even well. gross leverage. as so we're hits in also we're think, some on though there seeing gross than on all certain to in down, continuing seeing we're But, our that's seeing is, took really in operating bridge yes, we're still we margins op-ed, the improvement QX margins that projects

Okay. That's helpful understood. and well

is your backlog business lot up projects, Secondly, a year-over-year. on

this buckets like assets how new wins. We're number of to of side development but I'm something driving project completely if Like, much you have I think much is versus those that's not over increase? in or curious handy. that from, switching maybe each how sure the that, is XX%

Nicole, So new it's add something? It's want all wins. to wins. all you new

federal business no, the government Yes, U.K. our utilities lines from Group. to to multiple across significant wins

So with converting assets to last quarters. it's few several, do the nothing in

George. ahead, Go

that you in Well, date, are have convert backlog basically no development on they up we now. them reported. project's we what -- we will they in to see the don't in to the assets right quarter. I If want they particular are that sales, But backlog, development, to say, that impact them

this solar of seeing talk time Got Okay. don't that call can versus take more you the in energy plus having forward of easier you that about moving are mind, Is storage? on you're I'll just solar And have any sneak difference projects types Nicole, in your projects, moving today. environment? it. standalone Nicole any projects if on forward noticeable projects in, differences advantage solar there having in which between an specifically one

all maximized battery to savings. really the storage, most Well, related in solar you're I seeing -- demand, of peak that's think PPA and in getting with of them price all or almost them,

using these it's these resiliency. federal you're So, mean, and for, government's a like requirement. using our just for I

going with too. energy energy but not the It's the it's meet So coupled it's with clean energy, they are requirement well. them, need just resilient systems to to not only, battery to able be as system that PV

And Doran, here, you around we'll man. miss

the with of UBS. Grippin question come William from is going next our line And to

wondering just if question, think projects first of how a if equivalent. how X.X megawatt potential second utility would the And previously of contribution My those the commission you in RNG impact you year million of RNG you're I all? deal Could on per could rule to you at the half and update are expecting us this progressing? on provided about that revenue talk figure, thumb

Yes, Mike, projects. the go ahead on

Yes.

that's go gas So final about to we have megawatts a XX.X the that's project It's product into yet going pipe. testing, being commissioned through right now. approved

expect then XX.X go that's So And September should October year. another project that this that sometime early fully commercial this be commercial. megawatts in we I of will would sometime have month,

top $XXX $X.X And we plans, then million contribution for they to that as on per side, revenue with what $X million EBITDA the the said are to far as before, on And then where now, the prices RIN metrics, megawatt. line. million RNG about have the $X.X see million you

We seen the than asked current of agreements. the the offtake trading we've RINs, Those now terms haven't updated the are XXX reflective prices The the in materially long-term than utility numbers program, about less what better RFS which agreements are in space. it in right market spot for utility the of you -- agreements. around is in RFS but

prior far revenue was for you refresh Got assumption RINs as prices sort to as our it. memory That's what of the helpful. the as sensitivity? Could underlying

speaking, good. but Will. broadly that think the RINs, those we've still for that about don't And will takes et are ranges this and think are before, the way provided hedging I obviously I there still think I change puts that cetera,

it. for Got one Yes. one And me. just last

about It quarter this business. last hit think delays point the the to track some assuming in had XXX at you on you're megawatt appears target. assets talked guidance I well continued

guidance, kind about assuming light of falling, I Envision you the the should results fully timelines? we the on get in XXX revised think mean, of So where megawatts online

just Guidance Yes. reflects that.

that XXX Yes. We before. feel pretty given good about we've the

have have few shortly. very coming we XXX, we and far then a So

the feel XXX. we about good So

come And our question with of Molchanov Pavel the from Raymond next will line James.

some in the the commentary U.S. election. about earlier offered call upcoming You

course, you month for of election you're talked about projects, Of an barely some Britain the there. a doing that had example, ago. And battery

update in maybe opportunity, including can get on So an what's U.K. Bristol? we going your on

why take some course, to be to with of going mean, time to take there, projects, over going But we going their but new progress. see to for overall, market hiring I with very, new to time, allocate pace. I project made think in made great to the you European faster make planning good a a then particular to the though, And they're there, very, in project. And the We you And It's Bristol City, clean the Europe a on And us especially for money very over run some at organizational government changes side. growth they it's good. is evolve. on person that's going Yes. help helpful. moving us. very, it's And the forward, changes lot. continue that that see that to very a going some will it's environment in long-term,

because team of a there's targeted to little I George go the to time. management that think, solar, of to processes battery, take where of labor lot multitude through, over in great the here a it government in new energy looks I and backdrop a and business U.K., over mean, having there, all. the technologies, we, talked efficiency, of going States, going But said, bit kind looks there, a touching It's a as lot are it's a changes United across the company, what the like litany especially momentum. we're of lot chargers, it the for our EV like there's

strength. that. And so very to come are going these some bring about feel incentives confident I

Okay.

Let me of RNG? numbers about including do Section the the one biofuels, Washington. not ask any the quick XXZ you a Why has unveiled Treasury think still for

want tackle one? you that to Mike,

speak. mean, differently. all it EPA answer I'll had seeing through we've time, and our little an is movement. we a a We on submitted reviewing lot calls. our and we're applications for we had spin of the as notified going that, phone I actually mean, I I got application If

received seeing fall but the the credits. I anything. on are ruled sometime a something hasn't we we already be not number why on is administrative that just tax we can't at guidance, some progress, Treasury haven't of we other that side. least So XXZ, you out it told get What keep being would should but in tell this

Baird. the from of come Ben to line going Kallo is question next Our with

about that us some the how that's big business. about I or year? year, year, the frame, some a a we what this average Could it's of on My to to time kind for should better had some expect number should megawatts. for we you pull-ins compared In of over question think give XXX maybe a just could look is us. X-year that if the on at megawatts Is asset color give comes you next you color think number

year to year, interconnection no. not from were delayed at didn't and that in projects because them this so year not bring last No, of pulling on next some on. We're we of Actually, all. these

have per the to target between and as year, we megawatts year business XXX anything pretty that, megawatts, well. we to the year, but We like is want able else, looks to XX next This said lumpy. bring good XXX were

any last a from assets year to So, It's the couple to of from year. pulling not delayed year. basically were it's this assets this year before that

Understood.

towards your getting domestic business. is about approach? that that distance? how on up, overall Chinese market you tariffs storage cells the up You're think a higher suppliers, lined you we when and just impacts Now, starting that Have what think do mix

Doran he's the talking because been take think time. that can tariffs I all

Yes.

think I that here our back necessarily. don't -- on foot we're know I

keep doing think in I large mind purchases, the imports. our difficulties that, installations. of We're not multi-gigawatt

cost per-watt Nicole, are the DG, is an so you? if tariff don't pretty of impact, know. and The doing you're components the less I impact, high. individual when So,

have add as wanting IRA quite think domestic well. chain solutions well, utilities been we've I lot certainly I support supply that just time. as will for trend of here, a as business projects to see been continue domestic for for where our some Yes. federal government the as And we'll the well to for using

eliminates domestic use as that prices well we're the go pricing, what up domestically talk then doing some and about we pricing, primarily other soon tariffs, as and that, has our balance happened, the when But as of So, particularly. though, as ones. domestic they

Our come line Dumoulin-Smith next going from the is Julien question Jeffries. of to with

a I all best, sir. you pleasure. it's Doran, been the real wish

to if can So, RNG here. talking guys I that, the the just, were about on maybe you call come back with numbers

in just forma that want XXXX, through this from I volumes XX% it scaling in quick I supply today, about think I you only I understand volumes. the right, of this a think right. if talked megawatt make heard and at representing that's implied I today the that pretty I the about to you the XX% got of up mean, how you of pro arrangement what if for big I the follow-up. supply but step a to up or terms overall 'XX heard have sure representing outset, XX%

gas to the we're of and it about which XXXX. in Julien, our then, And, online the the was what means volume those I growing number said XXXX, we today, will represent total in plants XX% utility They're XXXX. start in come of brought have a of they that, supply online, would forecasted not supplying online were business. if We'll since plants represent XX% online our they today. When

kind get it today, It's 'XX XX you online? sort affirmation a yes. yes, think ballpark kind this a and subtle of of trajectory, overall I kind at. of you implies, the call you've like to what doesn't Yes, if a suggest trying right, that stuff you've kind It's tripling. year-end was of -- That's megawatts of XXX about for, if forma pro get that got got when what of that

or human a deny confirm being calculator, won't you I said. what Now,

primarily aren't portfolio are years. dairy now These the think few couple to are development I our of what and projects that to construction right? many are and that over sizable, I'm you gas, next lot projects or is our I going landfill the would of add in a They're tell sizable, projects.

Right. I novel Again, landfill per latest -- done $X roughly as mean, what contributor. implicitly you've seems you've at but reason to like before significant per megawatt, this nothing well, XXX contract. you that today a scale million the that But look, gas, reaffirmed no pretty there's here megawatts adding se, with continue look,

I not you asked. just what I'm sure understood

those the a why what -- that plants add year, and good add plants happens, the that's that and they're couple of plant, we bit we mean, little a Julien, size, X I in, a to is X a numbers get

have just here? universe you political take potentially million strategy some this, term $XXX just clarify think up the is saying I contracts of RNG? same the medium-term market It's all your on EBITDA change sizable, a that. the risk RNG the you obviously in that to in thoughts we're contract versus about more, do you've like Excellent. And mean, the Indeed. obviously, on call How think you there's here. for I tenure it any to decision contract, basis start got the very something thing. to because RNG, or there

and We've continue value, a longer evolving. than sense. on at when doing actually We've think market first picked lot do discount's already our that we've term it, had and term years, opportunities our this based first that. we'll term these choose looked time, and doing We've optimal evolve. I seen evaluated to And doing started But doesn't much remember, we make too were X, X-year we market's but of RNG, X, steep. the deals. It

to X. up got it then Then X, and

that continue grow to think addressable time product. over market I for and will the the expands continues evolve as to demand

Finks And ] is question [ to going B with line come Reilly. Ryan our of last from the

pass? Michael. any have is ask Maybe How high-level that do come at you affecting more I'll thoughts for And eRIN the on strategy on all? RNG pathway much when if your here, potential if to and just might one

we pathway. a pivot operate go of sizable aware, portfolio you're depth that to that electric We any time, incredible fairly brush allows benefit that as us RNG. bench choose from maintain Well, to we probably continue to would we electric that have an if to

see we as very well. Look, have with this because, to golly open eRIN's. group would as have that others motion. pathway administration, moves up. greatly power be this Republican with get with We'll benefit candidly, dynamic in for side, along. It's going plants the If how he Musk's We the push interesting a But optimistic. you develops you know, event a ball's current see to

on never it. It's budget any of our in So, It's don't been upside. it. we don't for count forecasts. We

day. Thank gentlemen, call. may great disconnect. you for you. will session. That Everyone does Thank today's have you question-and-answer and now conclude Ladies also conclude a today's participating, conference and this