Quarterly report pursuant to Section 13 or 15(d)

REVENUE FROM CONTRACTS WITH CUSTOMERS

v3.24.3
REVENUE FROM CONTRACTS WITH CUSTOMERS
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
REVENUE FROM CONTRACTS WITH CUSTOMERS REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue
Our reportable segments for the three and nine months ended September 30, 2024 were North America Regions, U.S. Federal, Europe, Alternative Fuels and All Other. 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, 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.
The following table presents our revenue disaggregated by line of business and reportable segment for the three months ended September 30, 2024:
North America Regions U.S. Federal Europe Alternative Fuels All Other Total
Project revenue $ 258,977  $ 66,162  $ 49,943  $ 10,295  $ —  $ 385,377 
O&M revenue 10,284  15,817  480  1,844  —  28,425 
Energy assets 20,444  7,096  197  31,393  —  59,130 
Other 1,906  38  1,993  5  23,999  27,941 
Total revenues $ 291,611  $ 89,113  $ 52,613  $ 43,537  $ 23,999  $ 500,873 
The following table presents our revenue disaggregated by line of business and reportable segment for the three months ended September 30, 2023:
North America Regions U.S. Federal Europe Alternative Fuels All Other Total
Project revenue $ 133,169  $ 71,779  $ 37,736  $ —  $ —  $ 242,684 
O&M revenue 6,369  13,838  492  2,073  —  22,772 
Energy assets 17,185  1,495  326  25,227  26  44,259 
Other 977  229  1,946  19  22,263  25,434 
Total revenues $ 157,700  $ 87,341  $ 40,500  $ 27,319  $ 22,289  $ 335,149 
The following table presents our revenue disaggregated by line of business and reportable segment for the nine months ended September 30, 2024:
North America Regions U.S. Federal Europe Alternative Fuels All Other Total
Project revenue $ 553,930  $ 177,721  $ 161,431  $ 27,342  $ —  $ 920,424 
O&M revenue 25,728  45,723  2,122  6,357  —  79,930 
Energy assets 53,944  12,749  557  88,421  29  155,700 
Other 4,425  547  5,684  128  70,423  81,207 
Total revenues $ 638,027  $ 236,740  $ 169,794  $ 122,248  $ 70,452  $ 1,237,261 
The following table presents our revenue disaggregated by line of business and reportable segment for the nine months ended September 30, 2023:
North America Regions U.S. Federal Europe Alternative Fuels All Other Total
Project revenue $ 376,984  $ 181,232  $ 95,335  $ —  $ 1,250  $ 654,801 
O&M revenue 18,270  40,439  1,285  8,054  —  68,048 
Energy assets 50,983  4,735  1,297  77,901  121  135,037 
Other 3,776  510  5,204  19  65,870  75,379 
Total revenues $ 450,013  $ 226,916  $ 103,121  $ 85,974  $ 67,241  $ 933,265 

The following table presents information related to our revenue recognized over time:
Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
Percentage of revenue recognized over time 97% 95% 96% 94%
The remainder of our revenue is for products and services transferred at a point in time, at which point revenue is recognized.
We attribute revenues to customers based on the location of the customer. The following table presents information related to our revenues by geographic area:
Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
United States $ 431,918  $ 279,651  $ 1,020,517  $ 783,692 
Canada 16,337  15,535  46,933  46,335 
Europe 52,618  39,963  169,811  103,238 
Total revenues $ 500,873  $ 335,149  $ 1,237,261  $ 933,265 
Contract Balances
The following tables provide information about receivables, contract assets and contract liabilities from contracts with customers:
  September 30, 2024 December 31, 2023
Accounts receivable, net $ 230,298  $ 153,362 
Accounts receivable retainage, net 43,466  33,826 
Contract Assets:
Costs and estimated earnings in excess of billings $ 572,804  $ 636,163 
Contract Liabilities:
Billings in excess of cost and estimated earnings $ 108,020  $ 52,903 
Billings in excess of cost and estimated earnings, non-current (1)
20,808  18,393 
Total contract liabilities $ 128,828  $ 71,296 
September 30, 2023 December 31, 2022
Accounts receivable, net $ 133,070  $ 174,009 
Accounts receivable retainage, net 33,459  38,057 
Contract Assets:
Costs and estimated earnings in excess of billings $ 591,378  $ 576,363 
Contract Liabilities:
Billings in excess of cost and estimated earnings $ 36,880  $ 34,796 
Billings in excess of cost and estimated earnings, non-current (1)
15,622  7,617 
Total contract liabilities $ 52,502  $ 42,413 
(1) Performance obligations that are expected to be completed beyond the next twelve months and are included in other liabilities in the condensed consolidated balance sheets.
The decrease in contract assets for the nine months ended September 30, 2024 was primarily due to billings of $921,597, offset by revenue recognized of $807,913. Contract assets also decreased due to reclassifications, primarily from contract liabilities as a result of timing of customer payments. The increase in contract liabilities was primarily driven by the receipt of advance payments from customers, and related billings, as well as reclassifications from contract assets as a result of timing of customer payments. The advance payments and reclassifications exceeded the recognition of revenue as performance obligations were satisfied. For the nine months ended September 30, 2024, we recognized revenue of $284,842 and billed $271,173 to customers that had balances which were included in contract liabilities at December 31, 2023.
The increase in contract assets for the nine months ended September 30, 2023 was primarily due to billings of $634,340 offset by revenue recognized of $631,136. Contract assets are also affected by reclassifications, primarily from contract liabilities as a result of timing of customer payments. The increase in contract liabilities was primarily driven by the receipt of advance payments from customers, and related billings, as well as reclassifications from contract assets as a result of timing of customer payments. The advance payments and reclassifications exceeded the recognition of revenue as performance obligations were satisfied. For the nine months ended September 30, 2023, we recognized revenue of $130,262 and billed $135,158 to customers that had balances which were included in the beginning balance of contract liabilities.
Performance Obligations
Our remaining performance obligations (“backlog”) represent the unrecognized revenue value of our contract commitments. At September 30, 2024, we had contracted backlog of $3,273,978 of which approximately 33% is anticipated to be recognized as revenue in the next twelve months. The remaining performance obligations primarily relate to the energy efficiency and renewable energy construction projects, including long-term operations and maintenance (“O&M”) services related to these projects. The long-term services have varying initial contract terms, up to 25 years.
Deferred Project Costs
Deferred project costs include costs incurred on active projects which will be reclassified either to contract assets or energy assets, as applicable, once a change order or other project resolution is finalized.
Project Development Costs
Project development costs of $4,546 and $3,059 were recognized in our condensed consolidated statements of income on projects that converted to customer contracts during the three months ended September 30, 2024 and 2023, respectively. Project development costs of $10,830 and $9,276 were recognized in the condensed consolidated statements of income on projects that converted to customer contracts during the nine months ended September 30, 2024 and 2023, respectively.
No impairment charges in connection with our project development costs were recorded during the three or nine months ended September 30, 2024 and 2023.