Ameresco, Inc. (AMRC) Balance Sheet

The sequential increase in total assets from $4.6B to $4.8B in 2026Q2 was accompanied by a rise in total debt to $2.0B, while equity expanded to $1.4B, reflecting retained earnings and possibly equity issuance. The D/E ratio improved from 1.84 to 1.38 quarter-over-quarter, but this appears driven by a larger equity base rather than debt reduction, as absolute debt remained flat. This suggests the balance sheet is growing to support the asset build-out, but the reliance on debt financing warrants monitoring given the thin net margin of 2.3%.

The absolute debt level has remained around $2.0B for two consecutive quarters, while equity increased from $1.1B to $1.4B, likely due to retained earnings and possibly equity raises. The D/E ratio of 1.38 is still high compared to peers like MYR Group (0.16) and Tetra Tech (0.55), suggesting a more leveraged capital structure. Given the company's thin net margin and negative free cash flow, the debt service burden could strain liquidity if interest rates remain elevated or project cash flows disappoint.

The increase in net PP&E from $2.0B in 2025Q2 to $2.3B in 2026Q2 reflects significant capital expenditure on energy assets, consistent with the cash flow statement's capex surge. Goodwill remained stable at $68.9M, indicating no major acquisitions, so the asset growth is organic. This asset-heavy model may improve long-term margin potential but increases capital intensity and financial risk, especially given the negative free cash flow.

Retained earnings increased from $659.9M in 2025Q2 to $688.1M in 2026Q2, despite a net loss in 2026Q1, suggesting that the equity growth is partly from other comprehensive income or equity issuance. The company has not repurchased shares or paid dividends, so all capital is being reinvested. The equity expansion improves the debt-to-equity ratio, but the reliance on retained earnings is modest given the thin margins, and future equity growth may depend on profitability improvements.

The current ratio of 1.67 indicates adequate short-term asset coverage, but cash and equivalents of $138.3M are only 6.9% of total debt, leaving little room for unexpected cash needs. Given the negative operating cash flow of -$71.8M in 2026Q2, the company may need to rely on external financing or draw down credit lines to fund operations. The liquidity position appears strained, especially with capital expenditures running at 44.7% of revenue.