Ameresco (AMRC) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01If demand for our energy efficiency and renewable energy solutions does not develop as we expect, our revenues will suffer, and our business will be harmed
2. 02In order to secure contracts for new projects, we typically face a long and variable selling cycle that requires significant resource commitments and requires a long lead time before we realize revenues
3. 03We may not recognize all revenues from our backlog or receive all payments anticipated under awarded projects and customer contracts
4. 04If we are not able to complete, perform or operate our projects on a profitable basis or as we have committed to our customers, we could become subject to liquidated damages, and our reputation and our results of operations could be adversely impacted
5. 05A significant decline in the fiscal health of federal, state, provincial, and local governments could reduce demand for our energy efficiency and renewable energy projects and a significant reduction of the federal workforce could delay federal contracting and adversely impact our federal business
6. 06Provisions in our government contracts may harm our business, financial condition and operating results
7. 07The projects we undertake for our customers generally require significant capital, which our customers or we may finance through third parties, and such financing may not be available to our customers or to us on favorable terms, if at all
8. 08Project development or construction activities may require us to make significant investments without first obtaining project financing or having final customer contracts, which could increase our costs and impair our ability to recover our investments
9. 09We are exposed to the credit risk of some of our customers
10. 10Our business is affected by seasonal trends and construction cycles, and these trends and cycles could have an adverse effect on our operating results
11. 11We may have liability to our customers under our ESPCs if our projects fail to deliver the energy use reductions to which we are committed under the contract66% rewritten
12. 12may be required only once, upon installation, based on an analysis of one or more sample installations, or may be required to be repeated at agreed upon intervals generally over periods of up to 25 yearsNew
13. 13We may assume responsibility under customer contracts for factors outside our control, including, in connection with some customer projects, the risk that fuel and component prices will increase
14. 14Our business depends on experienced and skilled personnel and substantial specialty subcontractor resources, and if we lose key personnel or if we are unable to attract and integrate additional skilled personnel, it will be more difficult for us to manage our business and complete projects
15. 15We have been and may continue to be impacted by macroeconomic conditions such as supply chain challenges, a shortfall of certain products needed for our business, and inflationary pressures56% rewritten
16. 16Extreme weather events and other natural disasters, particularly those exacerbated by climate change, could materially affect our ability to complete our projects and develop our assets
17. 17A failure of our information technology (“IT”) and data security infrastructure or cyber or other security incidents, vulnerabilities or other deficiencies, could adversely impact our business, reputation or results of operation or could cause us to default under our contractual obligations23% rewritten
18. 18If we cannot obtain surety bonds and letters of credit, our ability to operate may be restricted
19. 19We operate in a highly competitive industry, and our current or future competitors may be able to compete more effectively than we do, which could have a material adverse effect on our business, revenues, growth rates, and market share
20. 20Our small-scale renewable energy plants may not generate expected levels of output
21. 21We have not entered into long-term offtake agreements for a portion of the output from our small-scale renewable energy plants and a portion of the related renewable identification numbers (“RINs”) are not subject to long term contracts
22. 22Operation of energy assets involves significant risks and hazards customary to the energy industry and may be further impacted by the effects of climate change. We may not have adequate insurance to cover these risks and hazards, or other risks beyond our control
23. 23We plan to expand our business in part through future acquisitions and joint ventures, but we may not be able to identify or complete suitable acquisitions
24. 24We may be required to write-off or impair capitalized costs or intangible assets in the future, or we may incur restructuring costs or other charges, each of which could harm our earnings
25. 25Any future acquisitions that we may make could disrupt our business, cause dilution to our stockholders and harm our business, financial condition or operating results, and our joint ventures could expose us to additional risks and liabilities
26. 26International expansion is one of our growth strategies, and international operations will expose us to additional risks that we do not face in the United States, which could have an adverse effect on our operating results

Risks related to Regulations or Governmental Actions

1. 27A substantial portion of our earnings are derived from the sale of renewable energy certificates (“RECs”) and other environmental attributes, and our failure to be able to sell such attributes could materially adversely affect our business, financial condition and results of operation85% rewritten
2. 28or may become subject to penalties if we fail to meet requirements for these credits and incentives. This may have an adverse effect on our business and operating resultsNew
3. 29Changes in the laws and regulations governing the public procurement of ESPCs could have a material impact on our business
4. 30We need governmental approvals and permits, and we typically must meet specified qualifications, in order to undertake our energy efficiency projects and construct, own and operate our small-scale renewable energy projects, and any failure to do so would harm our business
5. 31Many of our small-scale renewable energy projects are, and other future projects may be, subject to or affected by U.S. federal energy regulation or other regulations that govern the operation, ownership, and sale of the facility, or the sale of electricity from the facility
6. 32Changes in utility regulation and tariffs could adversely affect our business
7. 33Compliance with environmental laws could adversely affect our operating results
8. 34Our activities and operations are subject to numerous health and safety laws and regulations, and if we violate such regulations, we could face penalties and fines
9. 35We are subject to various privacy and consumer protection laws

Risks Related to our Indebtedness

1. 36Our senior credit facility, second lien term loan, energy asset financing term loans and construction loans contain financial and operating restrictions that may limit our business activities and our access to credit, and they may not be sufficient to fund our capital needs and growth
2. 37If our subsidiaries default on their obligations under their debt instruments, we may need to make payments to lenders or to prevent foreclosure on the collateral securing the debt

Risks Related to Ownership of Our Class A Common Stock

1. 38The trading price of our Class A common stock is volatile
2. 39Holders of our Class A common stock are entitled to one vote per share, and holders of our Class B common stock are entitled to five votes per share. The lower voting power of our Class A common stock may negatively affect the attractiveness of our Class A common stock to investors and, as a result, its market value
3. 40For the foreseeable future, Mr. Sakellaris or his affiliates will be able to control the selection of all members of our board of directors, as well as virtually every other matter that requires stockholder approval, which will severely limit the ability of other stockholders to influence corporate matters34% rewritten