amrc-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________.

Commission File Number: 001-34811

Ameresco, Inc.

(Exact name of registrant as specified in its charter)


Delaware						04-3512838
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)
111 Speen Street, Suite 410 Framingham, Massachusetts						01701
(Address of Principal Executive Offices)						(Zip Code)

(508) 661-2200

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of exchange on which registered
Class A Common Stock, par value $0.0001 per share	AMRC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer ☑	Accelerated Filer o	Non-accelerated filer o	Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class			Shares outstanding as of July 28, 2023
Class A Common Stock, $0.0001 par value per share			34,200,760
Class B Common Stock, $0.0001 par value per share			18,000,000

TABLE OF CONTENTS


						Page
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets at June 30 , 2023 (Unaudited) and December 31, 2022						1
Condensed Consolidated Statements of Income for the three and six months ended June 30 , 2023 and 2022 (Unaudited)						3
Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30 , 2023 and 2022 (Unaudited)						4
Condensed Consolidated Statements of Changes in Redeemable Non-Controlling Interests and Stockholders’ Equity for the three and six months ended June 30 , 2023 and 2022 (Unaudited)						5
Condensed Consolidated Statements of Cash Flows for the six months ended June 30 , 2023 and 2022 (Unaudited)						7
Notes to Condensed Consolidated Financial Statements (Unaudited)						9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						28
Item 3. Quantitative and Qualitative Disclosures About Market Risk						37
Item 4. Controls and Procedures						38

PART II - OTHER INFORMATION
Item 1. Legal Proceedings						38
Item 1A. Risk Factors						38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						38
Item 5. Other Information						38
Item 6. Exhibits						40
Signatures						41

Table of Contents

Part I - Financial Information

Item 1. Condensed Consolidated Financial Statements

AMERESCO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)


	June 30, 2023		December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents (1)	$	48,999	$	115,534
Restricted cash (1)	39,137		20,782
Accounts receivable, net of allowance of $903 and $911, respectively (1)	123,361		174,009
Accounts receivable retainage, net	37,803		38,057
Costs and estimated earnings in excess of billings (1)	575,113		576,363
Inventory, net	14,127		14,218
Prepaid expenses and other current assets (1)	58,874		38,617
Income tax receivable	7,497		7,746
Project development costs, net	16,956		16,025
Total current assets (1)	921,867		1,001,351
Federal ESPC receivable	499,250		509,507
Property and equipment, net (1)	16,888		15,707
Energy assets, net (1)	1,417,690		1,181,525
Deferred income tax assets, net	3,594		3,045
Goodwill, net	77,846		70,633
Intangible assets, net	8,142		4,693
Operating lease assets (1)	38,833		38,224
Restricted cash, non-current portion (1)	13,677		13,572
Other assets (1)	43,223		38,564
Total assets (1)	$	3,041,010	$	2,876,821
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portions of long-term debt and financing lease liabilities (1)	$	332,999	$	331,479
Accounts payable (1)	290,284		349,126
Accrued expenses and other current liabilities (1)	81,008		89,166
Current portions of operating lease liabilities (1)	5,935		5,829
Billings in excess of cost and estimated earnings	40,459		34,796
Income taxes payable	1,564		1,672
Total current liabilities (1)	752,249		812,068
Long-term debt and financing lease liabilities, net of current portion, unamortized discount and debt issuance costs (1)	784,266		568,635
Federal ESPC liabilities	464,566		478,497
Deferred income tax liabilities, net	7,971		9,181
Deferred grant income	7,319		7,590
Long-term operating lease liabilities, net of current portion (1)	32,487		31,703
Other liabilities (1)	70,175		49,493
Commitments and contingencies (Note 10)
Redeemable non-controlling interests, net	47,994		46,623

(1) Includes restricted assets of consolidated variable interest entities (“VIEs”) at June 30, 2023 and December 31, 2022 of $275,589 and $213,913, respectively. Includes non-recourse liabilities of consolidated VIEs at June 30, 2023 and December 31, 2022 of $153,715 and $50,729, respectively. See Note 13.

Table of Contents

AMERESCO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts) (Continued)


	June 30, 2023		December 31, 2022
	(Unaudited)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at June 30, 2023 and December 31, 2022	$	—	$	—
Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 36,302,405 shares issued and 34,200,610 shares outstanding at June 30, 2023, 36,050,157 shares issued and 33,948,362 shares outstanding at December 31, 2022	3		3
Class B common stock, $0.0001 par value, 144,000,000 shares authorized, 18,000,000 shares issued and outstanding at June 30, 2023 and December 31, 2022	2		2
Additional paid-in capital	317,228		306,314
Retained earnings	540,964		533,549
Accumulated other comprehensive loss, net	(2,884)		(4,051)
Treasury stock, at cost, 2,101,795 shares at June 30, 2023 and December 31, 2022	(11,788)		(11,788)
Stockholders’ equity before non-controlling interest	843,525		824,029
Non-controlling interests	30,458		49,002
Total stockholders’ equity	873,983		873,031
Total liabilities, redeemable non-controlling interests and stockholders’ equity	$	3,041,010	$	2,876,821

See notes to condensed consolidated financial statements.

Table of Contents

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share amounts) (Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues	$	327,074	$	577,397	$	598,116	$	1,051,399
Cost of revenues	268,425		496,094		489,519		901,718
Gross profit	58,649		81,303		108,597		149,681
Earnings from unconsolidated entities	380		352		830		989
Selling, general and administrative expenses	41,413		38,601		82,714		78,930
Operating income	17,616		43,054		26,713		71,740
Other expenses, net	9,198		5,249		17,241		12,330
Income before income taxes	8,418		37,805		9,472		59,410
Income tax provision (benefit)	5		4,932		(498)		7,239
Net income	8,413		32,873		9,970		52,171
Net income attributable to non-controlling interests and redeemable non-controlling interests	(2,045)		(657)		(2,500)		(2,571)
Net income attributable to common shareholders	$	6,368	$	32,216	$	7,470	$	49,600

Net income per share attributable to common shareholders:
Basic	$	0.12	$	0.62	$	0.14	$	0.96
Diluted	$	0.12	$	0.61	$	0.14	$	0.93
Weighted average common shares outstanding:
Basic	52,127		51,818		52,045		51,781
Diluted	53,211		53,173		53,232		53,407

See notes to condensed consolidated financial statements.

Table of Contents

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands) (Unaudited)


	Three Months Ended June 30,
	2023		2022
Net income	$	8,413	$	32,873
Other comprehensive income (loss):
Unrealized gain from interest rate hedges, net of tax	820		1,565
Foreign currency translation adjustments	943		(2,030)
Total other comprehensive income (loss)	1,763		(465)
Comprehensive income	10,176		32,408
Comprehensive income attributable to non-controlling interests and redeemable non-controlling interests:
Net income	(2,045)		(657)
Foreign currency translation adjustments	(2)		—
Comprehensive income attributable to non-controlling interests and redeemable non-controlling interests	(2,047)		(657)
Comprehensive income attributable to common shareholders	$	8,129	$	31,751

	Six Months Ended June 30,
	2023		2022
Net income	9,970		52,171
Other comprehensive income:
Unrealized (loss) gain from interest rate hedges, net of tax	(48)		4,276
Foreign currency translation adjustments	1,226		(1,963)
Total other comprehensive income	1,178		2,313
Comprehensive income	11,148		54,484
Comprehensive income attributable to non-controlling interests and redeemable non-controlling interests:
Net income	(2,500)		(2,571)
Foreign currency translation adjustments	(10)		—
Comprehensive income attributable to non-controlling interests and redeemable non-controlling interests	(2,510)		(2,571)
Comprehensive income attributable to common shareholders	$	8,638	$	51,913

See notes to condensed consolidated financial statements.

Table of Contents

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY

For the Three Months Ended June 30, 2023 and 2022

(In thousands, except share amounts) (Unaudited)


	Redeemable Non-controlling Interests		Class A Common Stock			Class B Common Stock			Additional Paid-in Capital				Accumulated Other Comprehensive Loss		Treasury Stock			Non-controlling Interests		Total Stockholders’ Equity
			Shares	Amount		Shares	Amount				Retained Earnings				Shares	Amount
Balance, March 31, 2022	$	47,438	33,808,964	$	3	18,000,000	$	2	$	289,459	$	456,089	$	(3,889)	2,101,795	$	(11,788)	$	6,335	$	736,211


Exercise of stock options	—		7,933	—		—	—		158		—		—		—	—		—		158
Stock-based compensation expense	—		—	—		—	—		3,675		—		—		—	—		—		3,675
Employee stock purchase plan	—		16,996	—		—	—		948		—		—		—	—		—		948

Unrealized gain from interest rate hedges, net	—		—	—		—	—		—		—		1,565		—	—		—		1,565
Foreign currency translation adjustment	—		—	—		—	—		—		—		(2,030)		—	—		—		(2,030)

Distributions to redeemable non-controlling interests	(204)		—	—		—	—		—		—		—		—	—		—		—

Accretion of tax equity financing fees	27		—	—		—	—		—		(27)		—		—	—		—		(27)

Contributions from non-controlling interest	—		—	—		—	—		—		—		—		—	—		8,851		8,851
Net income	657		—	—		—	—		—		32,216		—		—	—		—		32,216
Balance, June 30, 2022	$	47,918	33,833,893	$	3	18,000,000	$	2	$	294,240	$	488,278	$	(4,354)	2,101,795	$	(11,788)	$	15,186	$	781,567

Balance, March 31, 2023	$	46,700	34,030,362	$	3	18,000,000	$	2	$	310,726	$	534,624	$	(4,645)	2,101,795	$	(11,788)	$	65,850	$	894,772

Exercise of stock options	—		134,600	—		—	—		1,523		—		—		—	—		—		1,523
Stock-based compensation expense	—		—	—		—	—		3,962		—		—		—	—		—		3,962
Employee stock purchase plan	—		24,833	—		—	—		1,017		—		—		—	—		—		1,017
Restricted stock units released	—		10,815	—		—	—		—		—		—		—	—		—		—
Unrealized gain from interest rate hedges, net	—		—	—		—	—		—		—		820		—	—		—		820
Foreign currency translation adjustment	—		—	—		—	—		—		—		941		—	—		2		943

Distributions to redeemable non-controlling interests	(157)		—	—		—	—		—		—		—		—	—		—		—
Accretion of tax equity financing fees	28		—	—		—	—		—		(28)		—		—	—		—		(28)

Contributions from non-controlling interests	—		—	—		—	—		—		—		—		—	—		812		812
Distributions to non-controlling interest	—		—	—		—	—		—		—		—		—	—		(36,828)		(36,828)
Net income	1,423		—	—		—	—		—		6,368		—		—	—		622		6,990
Balance, June 30, 2023	$	47,994	34,200,610	$	3	18,000,000	$	2	$	317,228	$	540,964	$	(2,884)	2,101,795	$	(11,788)	$	30,458	$	873,983

See notes to condensed consolidated financial statements.

Table of Contents

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY

For the Six Months Ended June 30, 2023 and 2022

(In thousands, except share amounts) (Unaudited)


	Redeemable Non-controlling Interests		Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock			Non-controlling Interests		Total Stockholders’ Equity
			Shares	Amount		Shares	Amount								Shares	Amount
Balance, December 31, 2021	$	46,182	33,716,309	$	3	18,000,000	$	2	$	283,982	$	438,732	$	(6,667)	2,101,795	$	(11,788)	$	—	$	704,264



Exercise of stock options	—		100,588	—		—	—		1,866		—		—		—	—		—		1,866
Stock-based compensation expense	—		—	—		—	—		7,206		—		—		—	—		—		7,206
Employee stock purchase plan	—		16,996	—		—	—		948		—		—		—	—		—		948

Unrealized gain from interest rate hedges, net	—		—	—		—	—		—		—		4,276		—	—		—		4,276
Foreign currency translation adjustment	—		—	—		—	—		—		—		(1,963)		—	—		—		(1,963)

Distributions to redeemable non-controlling interests	(651)		—	—		—	—		—				—		—	—		—		—

Accretion of tax equity financing fees	54		—	—		—	—				(54)		—		—	—		—		(54)
Investment fund call option exercise	(238)								238		—							—		238
Contributions from non-controlling interest	—								—		—							15,186		15,186
Net income	2,571		—	—		—	—		—		49,600		—		—	—		—		49,600
Balance, June 30, 2022	$	47,918	33,833,893	$	3	18,000,000	$	2	$	294,240	$	488,278	$	(4,354)	2,101,795	$	(11,788)	$	15,186	$	781,567

Balance, December 31, 2022	$	46,623	33,948,362	$	3	18,000,000	$	2	$	306,314	$	533,549	$	(4,051)	2,101,795	$	(11,788)	$	49,002	$	873,031

Exercise of stock options	—		216,600	—		—	—		2,093		—		—		—	—		—		2,093
Stock-based compensation expense	—		—	—		—	—		7,999		—		—		—	—		—		7,999
Employee stock purchase plan	—		24,833	—		—	—		1,017		—		—		—	—		—		1,017
Restricted stock units released	—		10,815	—		—	—		—		—		—		—	—		—		—
Unrealized loss from interest rate hedges, net	—		—	—		—	—		—		—		(48)		—	—		—		(48)
Foreign currency translation adjustment	—		—	—		—	—		—		—		1,215		—	—		11		1,226

Distributions to redeemable non-controlling interests	(335)		—	—		—	—		—		—		—		—	—		—		—
Accretion of tax equity financing fees	55		—	—		—	—		—		(55)		—		—	—		—		(55)
Investment fund call option exercise	195		—	—		—	—		(195)		—		—		—	—		—		(195)
Contributions from non-controlling interests	—		—	—		—	—		—		—		—		—	—		922		922
Distributions to non-controlling interest	—		—	—		—	—		—		—		—		—	—		(20,521)		(20,521)
Net income	1,456		—	—		—	—		—		7,470		—		—	—		1,044		8,514
Balance, June 30, 2023	$	47,994	34,200,610	$	3	18,000,000	$	2	$	317,228	$	540,964	$	(2,884)	2,101,795	$	(11,788)	$	30,458	$	873,983

See notes to condensed consolidated financial statements.

Table of Contents

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income	$	9,970	$	52,171
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation of energy assets, net	27,725		23,978
Depreciation of property and equipment	1,607		1,404
Increase (decrease) in contingent consideration	155		(320)
Accretion of ARO liabilities	130		72
Amortization of debt discount and debt issuance costs	2,364		2,036
Amortization of intangible assets	991		1,020
Provision for bad debts	579		244
Loss on write-off of long-lived assets	18		—
Earnings from unconsolidated entities	(830)		(989)
Net (gain) loss from derivatives	(261)		555

Stock-based compensation expense	7,999		7,206
Deferred income taxes, net	(3,177)		3,606

Unrealized foreign exchange loss	38		467
Changes in operating assets and liabilities:
Accounts receivable	60,028		(44,334)
Accounts receivable retainage	354		(458)
Federal ESPC receivable	(88,072)		(113,478)
Inventory, net	91		(2,080)
Costs and estimated earnings in excess of billings	15,664		(358,603)
Prepaid expenses and other current assets	1,312		(1,629)
Project development costs	(2,825)		(1,332)
Other assets	(1,867)		(10,020)
Accounts payable, accrued expenses and other current liabilities	(80,555)		126,783
Billings in excess of cost and estimated earnings	13,462		4,073
Other liabilities	1,240		18
Income taxes receivable, net	11		1,767
Cash flows from operating activities	(33,849)		(307,843)
Cash flows from investing activities:
Purchases of property and equipment	(2,662)		(2,525)
Capital investment in energy assets	(261,547)		(124,924)
Capital investment in major maintenance of energy assets	(5,810)		(4,838)

Acquisitions, net of cash received	(9,184)		—
Loans to joint venture investments	(39)		—
Cash flows from investing activities	(279,242)		(132,287)


See notes to condensed consolidated financial statements.

Table of Contents


AMERESCO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited) (Continued)

	Six Months Ended June 30,
	2023		2022
Cash flows from financing activities:

Payments of debt discount and debt issuance costs	$	(5,074)	$	(2,756)
Proceeds from exercises of options and ESPP	3,110		2,814

(Payments on) proceeds from senior secured revolving credit facility, net	(80,000)		120,000
Proceeds from long-term debt financings	343,923		307,911
Proceeds from Federal ESPC projects	76,699		121,731
Net proceeds from energy asset receivable financing arrangements	8,114		4,651

Contributions from non-controlling interests	499		12,919
Distributions to non-controlling interest	(20,521)		—
Distributions to redeemable non-controlling interests, net	(338)		(561)
Payments on long-term debt and financing leases	(61,335)		(101,035)
Cash flows from financing activities	265,077		465,674
Effect of exchange rate changes on cash	(61)		(1,291)
Net (decrease) increase in cash, cash equivalents, and restricted cash	(48,075)		24,253
Cash, cash equivalents, and restricted cash, beginning of period	149,888		87,054
Cash, cash equivalents, and restricted cash, end of period	$	101,813	$	111,307

Supplemental disclosures of cash flow information:
Cash paid for interest	$	31,778	$	13,672
Cash paid for income taxes	$	2,500	$	2,829
Non-cash Federal ESPC settlement	$	91,379	$	—
Accrued purchases of energy assets	$	80,519	$	37,683
Non-cash contributions from non-controlling interest	$	422	$	2,039

See notes to condensed consolidated financial statements.

Table of Contents

AMERESCO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands) (Unaudited)

1. BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements of Ameresco, Inc. (including its subsidiaries, the “Company,” “Ameresco,” “we,” “our,” or “us”) are unaudited, according to certain rules and regulations of the Securities and Exchange Commission, and include, in our opinion, normal recurring adjustments necessary for a fair presentation in conformity with accounting principles generally accepted in the United States (“GAAP”) of the results for the periods indicated.

The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of results which may be expected for the full year. The December 31, 2022 consolidated balance sheet data was derived from audited financial statements, but certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. The interim condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2022, included in our annual report on Form 10-K (“2022 Form 10-K”) filed with the Securities and Exchange Commission on February 28, 2023.

Reclassification

Certain prior period amounts were reclassified to conform to the presentation in the current period.

Significant Risks and Uncertainties

Global factors have continued to result in global supply chain disruptions, certain governmental travel and other restrictions, and inflationary pressures.

We have considered the impact of general global economic conditions on the assumptions and estimates used, which may change in response to this evolving situation. Results of future operations and liquidity could be adversely impacted by a number of factors including supply chain disruptions, varying levels of inflation, payments of outstanding receivable amounts beyond normal payment terms, workforce disruptions, and uncertain demand. As of the date of issuance of these condensed consolidated financial statements, we cannot reasonably estimate the extent to which macroeconomic conditions may impact our financial condition, liquidity, or results of operations in the foreseeable future. The ultimate impact of the pandemic and general global economic conditions on our business is highly uncertain and will depend on future developments, and such impacts could exist for an extended period of time, even after the pandemic subsides.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our accounting policies are set forth in Note 2 to the consolidated financial statements contained in our 2022 Form 10-K. We have included certain updates to those policies below.

Accounts Receivable and Allowance for Credit Losses

Changes in the allowance for credit losses are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Allowance for credit losses, beginning of period	$	971	$	2,265	$	911	$	2,263
Provision for bad debts	486		7		579		244
Account write-offs and other	(554)		(10)		(587)		(245)
Allowance for credit losses, end of period	$	903	$	2,262	$	903	$	2,262

Accounts Receivable Factoring

Ameresco’s wholly-owned subsidiary in Italy entered into factoring agreements to sell certain receivables to unrelated third-party financial institutions on a non-recourse basis. These transactions are accounted for in accordance with ASC Topic 860, Transfers and Servicing and result in a reduction in accounts receivable because the agreements transfer effective control over the receivables, and related risk, to the buyers. Our Italian subsidiary does not retain any interest in the underlying accounts receivable once sold. Trade accounts receivables balances sold are removed from the condensed consolidated balance sheets, and

Table of Contents

AMERESCO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands) (Unaudited) (Continued)

cash received is reflected in operating activities in the condensed consolidated statements of cash flows. Factoring fees during the three months ended June 30, 2023 were $1,252 and are included in other expense, net in the condensed consolidated statements of income. See Note 18. Other Expenses, Net.

Recent Accounting Pronouncements

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04, as amended by ASU 2021-01 in January 2021, directly addressing the effects of reference rate reform on financial reporting as a results of the cessation of the publication of certain London interbank offered rate (“LIBOR”) rates beginning December 31, 2021, with complete elimination of the publication of the LIBOR rates by June 30, 2023. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform by virtue of referencing LIBOR or another reference rate expected to be discontinued. This guidance became effective on March 12, 2020, and then amended by ASU 2022-06 in December 2022, extending the adoption date to no later than December 31, 2024, with early adoption permitted. We adopted this guidance beginning January 1, 2023 upon entering amendments to credit agreements which introduced the secured overnight financing rate as administrated by the Federal Reserve Bank of New York to replace LIBOR as the benchmark. The adoption of this guidance did not have a material impact on our condensed consolidated financial statements.

Derivatives and Hedging

In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method, which expands the current single-layer method to allow multiple hedged layers of a single closed portfolio to be hedged under the method. ASU 2022-01 is effective for our fiscal year ending beginning after December 15, 2022. We adopted this accounting standard as of January 1, 2023 and the adoption did not have an impact on our condensed consolidated financial statements.

Fair Value Measurement

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies the measurement criteria for equity securities and refines the disclosure requirements for equity securities subject to contractual sale restrictions. ASU 2022-03 is effective for our fiscal year ending beginning after December 15, 2023. We are currently evaluating the impact that adopting this new accounting standard would have on our condensed consolidated financial statements.

Investments - Equity Method and Joint Ventures

In March 2023, the FASB issued ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which defines consistent accounting for equity investments for the purpose of receiving income tax credits and other income tax benefits. ASU 2023-02 is effective for our fiscal year ending beginning after December 15, 2023. We are currently evaluating the impact that adopting this new accounting standard would have on our condensed consolidated financial statements.

3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

Our reportable segments for the three and six months ended June 30, 2023 and 2022 were U.S. Regions, U.S. Federal, Canada, Alternative Fuels and All Other.

Table of Contents

AMERESCO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands) (Unaudited) (Continued)

The following table presents our revenue disaggregated by line of business and reportable segment for the three months ended June 30, 2023:


	U.S. Regions		U.S. Federal		Canada		Alternative Fuels		All Other		Total
Project revenue	$	113,502	$	63,904	$	11,082	$	—	$	40,399	$	228,887
O&M revenue	6,309		13,901		53		2,295		460		23,018
Energy assets	18,057		2,164		1,334		28,021		430		50,006
Integrated-PV	—		—		—		—		11,486		11,486
Other	1,117		50		2,726		—		9,784		13,677
Total revenues	$	138,985	$	80,019	$	15,195	$	30,316	$	62,559	$	327,074

The following table presents our revenue disaggregated by line of business and reportable segment for the three months ended June 30, 2022:


	U.S. Regions		U.S. Federal		Canada		Alternative Fuels		All Other		Total
Project revenue	$	378,646	$	85,850	$	10,160	$	—	$	14,464	$	489,120
O&M revenue	5,457		13,365		11		2,122		95		21,050
Energy assets	12,253		2,074		1,487		27,070		39		42,923
Integrated-PV	—		—		—		—		12,267		12,267
Other	1,029		139		2,803		—		8,066		12,037
Total revenues	$	397,385	$	101,428	$	14,461	$	29,192	$	34,931	$	577,397

The following table presents our revenue disaggregated by line of business and reportable segment for the six months ended June 30, 2023:


	U.S. Regions		U.S. Federal		Canada		Alternative Fuels		All Other		Total
Project revenue	$	217,822	$	109,453	$	25,993	$	—	$	58,849	$	412,117
O&M revenue	11,838		26,601		63		5,981		793		45,276
Energy assets	31,708		3,240		2,096		52,674		1,060		90,778
Integrated-PV	—		—		—		—		23,430		23,430
Other	1,986		281		5,454		—		18,794		26,515
Total revenues	$	263,354	$	139,575	$	33,606	$	58,655	$	102,926	$	598,116

The following table presents our revenue disaggregated by line of business and reportable segment for the six months ended June 30, 2022:


	U.S. Regions		U.S. Federal		Canada		Alternative Fuels		All Other		Total
Project revenue	$	677,278	$	148,067	$	24,111	$	—	$	33,068	$	882,524
O&M revenue	10,537		25,662		22		4,896		186		41,303
Energy assets	22,271		3,164		2,248		53,557		111		81,351
Integrated-PV	—		—		—		—		23,623		23,623
Other	1,819		181		5,252		—		15,346		22,598
Total revenues	$	711,905	$	177,074	$	31,633	$	58,453	$	72,334	$	1,051,399

The following table presents information related to our revenue recognized over time:


	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Percentage of revenue recognized over time	95%