Energy and renewable energy projects company Ameresco (NYSE: AMRC) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 7.8% year on year to $472.3 million. The company’s full-year revenue guidance of $1.9 billion at the midpoint came in 0.6% above analysts’ estimates. Its non-GAAP profit of $0.27 per share was significantly above analysts’ consensus estimates.

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CEO George Sakellaris commented, “This was another strong quarter for Ameresco as the team continued its excellent execution across our broad operating footprint. Revenue growth of 8% exceeded our expectations, particularly considering the strong first quarter results during which we executed on projects worth approximately $30 million faster than anticipated. Second quarter revenue performance reflected strength across our business lines and was driven by continued growth in Europe and our Energy Asset business. Adjusted EBITDA increased 24%, demonstrating the significant operating leverage we believe is inherent in our Company’s unique business model, while Non-GAAP EPS was $0.17 higher from a year ago. In the second quarter, we also continued to further strengthen our foundation for future profitable growth with successful business development activities. The Company added over $550.0 million of new project awards during the quarter. Total Project Backlog stands at a record of $5.1 billion, with Energy Infrastructure and resiliency projects accounting for almost half.

Company Overview

Having played a role in upgrading the energy solutions of Alcatraz Island, Ameresco (NYSE: AMRC) provides energy and renewable energy solutions for various sectors.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, Ameresco’s sales grew at an exceptional 14.3% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Ameresco’s annualized revenue growth of 16.4% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Ameresco reported year-on-year revenue growth of 7.8%, and its $472.3 million of revenue exceeded Wall Street’s estimates by 13%.

Looking ahead, sell-side analysts expect revenue to grow 5.5% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will face some demand challenges.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Ameresco was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.7% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Analyzing the trend in its profitability, Ameresco’s operating margin decreased by 1.4 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Ameresco’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

This quarter, Ameresco generated an operating margin profit margin of 5.9%, up 1.1 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Ameresco’s EPS grew at an unimpressive 6.8% compounded annual growth rate over the last five years, lower than its 14.3% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Diving into the nuances of Ameresco’s earnings can give us a better understanding of its performance. As we mentioned earlier, Ameresco’s operating margin expanded this quarter but declined by 1.4 percentage points over the last five years. Its share count also grew by 8.9%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Ameresco, its two-year annual EPS growth of 12.7% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q2, Ameresco reported adjusted EPS at $0.27, up from $0.10 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Ameresco’s full-year EPS of $1.36 to shrink by 18.9%.

Key Takeaways from Ameresco’s Q2 Results

We were impressed by how significantly Ameresco blew past analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. That the company largely reaffirmed previously-provided full-year guidance shows that Ameresco is squarely on track and that the guidance could even be conservative. Zooming out, we think this quarter featured some important positives. The stock traded up 16.3% to $19.45 immediately after reporting.

Ameresco put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.