Ameresco (NYSE:AMRC) Exceeds Q1 CY2026 Expectations But Stock Drops

Energy and renewable energy projects company Ameresco (NYSE:AMRC) reported Q1 CY2026 results beating Wall Street’s revenue expectations, with sales up 13.8% year on year to $401.5 million. The company expects the full year’s revenue to be around $2.1 billion, close to analysts’ estimates. Its non-GAAP loss of $0.33 per share was 13.6% below analysts’ consensus estimates.

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CEO George Sakellaris commented, “The first quarter represented a solid start to the year, with revenue growth of 14% despite adverse weather conditions. During the quarter we secured over half a billion dollars in new project awards, driving 20% growth in our Awarded Backlog which now stands at almost $2.8 billion.

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 sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, Ameresco’s 13.1% annualized revenue growth over the last five years was excellent. Its growth beat the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Ameresco’s annualized revenue growth of 18.9% 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 13.8%, and its $401.5 million of revenue exceeded Wall Street’s estimates by 9.4%.

Looking ahead, sell-side analysts expect revenue to grow 7.6% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is above the sector average and indicates the market is forecasting some success for its newer products and services.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Ameresco was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.5% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Looking at the trend in its profitability, Ameresco’s operating margin decreased by 1.3 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.

In Q1, Ameresco generated an operating margin profit margin of 2.6%, down 1.3 percentage points year on year. Since Ameresco’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for Ameresco, its EPS declined by 12% annually over the last five years while its revenue grew by 13.1%. This tells us the company became less profitable on a per-share basis as it expanded.

We can take a deeper look into Ameresco’s earnings to better understand the drivers of its performance. As we mentioned earlier, Ameresco’s operating margin declined by 1.3 percentage points over the last five years. Its share count also grew by 5%, 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 more recent period because it can provide insight into an emerging theme or development for the business.

For Ameresco, its two-year annual EPS declines of 22.7% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q1, Ameresco reported adjusted EPS of negative $0.33, down from negative $0.11 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Ameresco’s full-year EPS of $0.68 to grow 82.9%.

Key Takeaways from Ameresco’s Q1 Results

We were impressed by how significantly Ameresco blew past analysts’ adjusted operating income expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. On the other hand, its full-year EBITDA guidance missed and its EPS fell short of Wall Street’s estimates. Zooming out, we think this was a mixed quarter. Investors were likely hoping for more, and shares traded down 5.2% to $29.85 immediately after reporting.

Is Ameresco an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).