AMPS - Earnings call transcript Q1 2024

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Operator

Good afternoon, and welcome to the Altus Power First Quarter 2024 Conference Call.

As a reminder, today's call is being recorded. [Operator Instructions].At this time, for opening remarks and introductions, I would like to turn the call over to Chris Shelton, Head of Investor Relations.

Chris Shelton

Good afternoon, and welcome to our first quarter 2024 earnings call.

Speaking on today's call are Gregg Felton, Chief Executive Officer; Dustin Weber, Chief Financial Officer; and our incoming Head of IR, Alison Sternberg. a be and discussed issued to presentation we to matters on afternoon, press a release related This this call.

both www.altus.com section. access on website. available can the and SEC's release You the on our the website, information in This Investors the is also press presentation

Altus believe, These Altus used reminder, a anticipate, Power's expressions outlook words and statements performance. When statements. future actual the this estimate, no update on refer call, to expect, these risks results may change, various or forward-looking by statements. contain this to predicted operations plan, Power cause As materially obligation and statements to call future on and law. the circumstances differ they comments as forward-looking forward-looking identify our assumes forecast, forward-looking those will, events, from statements. including are financial subject future similar relate except Power in to could statements as in These uncertainties, required which the to Altus

you statements, For forward-looking other XX, filings these more impact on information, we the filed that could SEC our to review discussed on in factors March risks, our SEC XX-K and specifically XXXX. uncertainties the encourage

other an production, to revenue, and ARR During also asset call, given will points EBITDA at expenses base in seasonality. annual market the estimate determine operating well that assumes EBITDA potential annual expected an which is or customary ARR refer our to conditions as weather, we of adjusted revenue and time. as economic margin, are this non-GAAP measures. ARR recurring adjusted financial management uses

for we to release and investors. should measures the GAAP And More in of other measures certain financial to non-GAAP non-GAAP is Gregg evaluate these Altus information monitor methods computing financial non-GAAP over Power. these may These non-GAAP Officer substitute with Chief these measures non-GAAP considered financial we be our measures. measures comparable and Altus that useful to Our Executive presentation plan, our management measures team measures these financial information of items be turn of financial a and detailed used issued may performance, this uses pleased as about Power's and financial not reconciliation exclude that believe all similar financial the from to call by the from contained press companies. I'm GAAP differ Felton, that, both to today.

Gregg Felton

of Thanks, our joining welcome investors call analysts all our Chris, to today. and and

me under to of Before our company. I entrusting energized, to acknowledge appreciation our Board all begin, the our as believe I honored work my to and within the commercial broader communities to I is engaging position including to I'm with to positioned gain stakeholders, our which this committed excited highly want scale operate. remain the am And CEO. continue to we to uniquely get market and extend and share leadership Power customers, market. I within lead for Altus solar I investors remit and my

by core operate forward. to business our drive will We principles several

is on building relationships to understood the growth Altus to an prudently on second, building emphasis with brand value; integrity long-term our customer continuing First, Power long-term plan reliability. where and represent shareholder execute

these propel which and through term, to ever-growing to long portfolio strive the investors. of rest demand with customers transparently business now with fourth, designed the power the as around of an communicating trends market manufacturing domestic position headline exciting and grids financial seminal markets Artificial engage renaissance to our the Each are seen with use not as strategically of consistent become to of higher for time, have these assets, decades. rise. with provide a retail of now the Third, turn continuing us copious electricity. rate us demand to electric variable and Altus daily to same Altus' growth acquire our as At for that allows cryptocurrency X revenues We Slide news. We're planning our Power's expand hydrogen share U.S. prices to entering on-site vehicles, model acceleration business. clearly solar customers broad returns electricity the our needs electricity meet and secular contracts intelligence, in consumes I arrays. our generate we mining, positioning expect amounts their over Please moment

we to substantial, to retail commercial historically now the underway about to is So demand positive Countless scale asking price modest movement our investment in of the be the Greater our is are required prices. would context the enormous in anticipated how borne U.S., we growth of power prices all of believe solar of costs these electricity Power is earnings selling without utility customers investment. upside the will providing largest variable to investors this by each with likely Altus critical of be exposure to anticipated Over in portfolio power portfolio particularly publications increase demand? half have additional our higher of long-term the our rates. dramatically. can associated the power We the than form rate and our consumers possibly of month. in electrify generation retail ultimately believe to increases represent meet power rising owns meet question economy. contracts, There of in-place the assets demand rising

to current projects. our retail are portfolio, demand accelerate financial scale rates to likely also benefit commercial the for Beyond solar higher

Slide you the Investor topics Blackstone our adding We to portfolio week on performance We relative share to CBRE and now Day. of look team headlines returns further forward and focused our cost further first I'd of quarter first X. like exploring with next have some our partnerships our to capital. to on place on attractive these at with at in all

revenue in During growth. QX, we to the of million predominantly year. customers rates when our power resulted $XX.X in contracted at kilowatt generated from EBITDA, we XXX million from and was electricity hours of of place clean This adjusted strong portfolio, megawatts representing million the XXX that year-over-year $XX.X long-term our entered sold

line detail during further in expectations, remain adjusted confident his our XXXX. were and section. we and quarter annual results in with First for our guidance our Dustin revenue EBITDA in results will

our Slide X. see March You portfolio can as XX of on

portfolio the our January, our approaching XX from in is closed acquisition in another in In New York we XX and and portfolio gigawatt now Vitol, Our our including New and remains assets megawatts grow megawatts segment size. in Maine. of largest to additional Jersey X

XX year-ending help you gauge hours be these estimated million of growth sharing to of recurring operating revenue a hours X.XX portfolio this annual and assets ARR These to the $XX of expect year are expected kilowatt and approximately irrespective statistics the We're billion additive during projects with million of million kilowatt amounts our average added We $XXX recently portfolio. or to add built revenue year. generate to ARR sunlight. to annualized the when during recurring by our produced our generation, are

the XX,XXX subscribed utility customers, customers solar We an on benefits X,XXX their of during receive are also solar now serve of now than quarter, to bills. our local discounts community increase residential first who more facilities and the

progress and expect On turn for stream to to of working closely our drive employees a solar the power and an together partners Please new the Slide community delay around development, much build sourced as solar their engage community as our update anticipating implementation is We overall of X some these ago. projects programs said, estate are with opportunities slower pace solar make enterprises well on adoption, pipeline. large at programs corporate with advancing CBRE which the on continue our stakeholders. other Drivers to to contracting we we channel country. measured and negotiation the That we of partners and for owners. pace and include were year than real this delayed with are

activities, new the and are builds this we we are and that on that of to of into effort see Day. returns this certainty. assets with to progress on focus projects team now for California in operation back I another will Within members the initial currently and project of construction of the projects Included has pipeline. and to and am our our guidance, both with my but the moved U.S. Colorado continue I'm continue of slower-than-anticipated provided ensuring execution role expand In cadence of that on project already progress we development will our of evaluation. operating XXXX, in reaffirming as the development in being to many come. target are We the economics X role, from projects In the and newly in our like early-stage I between process built our during that am have spite quarters the at We our play X-megawatt committed newly similarly in new partners of broadening update a context to megawatts development preconstruction the Unico. by under and additional assets advance led pipeline with other you on will well. we our important the reiterate relationships Investor assets expanded the by We to origination footprint mix review to attractive in in Western believe a levels, number CBRE in evaluation. horsepower putting Unico reporting team former a context would an many depend pleased under driven

posting to investment in Maryland community stage. customers the These completion. in in For serve buildings also projects X,XXX of are XX or Maryland approximately CBRE generation construction expected approximately are management new megawatts preconstruction example, solar solar upon

to Moving Illinois.

relationships with in in Investment And either our projects Management market. XXXX opportunities with We pipeline. are both XXXX. or and source that are on owners development opportunities estate late We're currently to pursuing large additional working closely Maryland many throughout these severity real programmatic and Illinois other energize in expecting CBRE we

become a steady that assets certainty In provide that velocity and a pipeline as have addition, is can Altus' operation transactional available. in strong of reputation owner execution sophisticated driving

is highlights. in participants we market an capital enviable our struggling we're compelling of execute. having to With that, the assets transaction believe a to let larger for new to available to partner are call and additional swiftly me a from seeing relationship are expertise who partners We We a our Weber, we This bringing pipeline. segment, forward to Dustin utility negotiated larger to are great scale environment. financial focus CFO, way growing assets macro looking we the and hand The domain procure add XXXX, how scale are this now to Vitol and with in acquisition portfolio. seeing continue example our their to and financing away smaller over to with opportunities shift commercial developers directly kick was our other position the Vitol pool of and the recent of off to accretive

Dustin Weber

thanks quarter to joining Slide everyone the X and first Thanks, I results. as again to Please financial cover Gregg, call. our turn

and portfolio first during of XX%, clean compared the our in $X.X the increase to driven the quarter, million our revenues income increased million to $XX.X quarter GAAP the net electricity of of quarter quarter net the compared $XX.X sales income of first customers. $X.X first million to an XXXX. our growth of million During for by grew to XXXX, of was

Moving and $XX.X our on growth $XX the by across impact operating to adjusted of EBITDA. the offset the and a expected. in We couple weather increase was growth This increased million general touch quarter operational our administrative partially for quickly million with in To in our of quarter as portfolio previous years of driven to first projections of levels during XXXX, expenses line notes, of portfolio, year. XX%. the amounting by was to reported compared

in portfolio, quickly Vitol New position into addition, from assets our to our we integrated recently our York. adding acquired further depth In

largest noted for our XXXX of our start strong And New earlier, $XXX to Overall, team million. we Slide assets, $XXX to with revenue scale are us of State. to York adjusted results allowing the as of EBITDA provide $XXX represent of our guidance we a the to the reiterating XXX our quarter million year. million and million of Empire first in continues market leverage Gregg operating X, megawatts on $XXX range believe to and

in-place In addition, of we and portfolio from are the include ARR quarter. for updating to additions estimates generation our first our asset

regardless portfolio, are positive these new feedback annual from represent when have investors added on which capability the analysts of generation our heard revenue of metrics, year. in-place projects the during and We

at the the over look seasonality let's quarterly of our on Slide Next, year X. remainder

Referencing and first typically second, quarter. year. EBITDA quarters prior a to mentioned, the we guide, the have first expect higher I lowest As provides and revenue revenues years fourth production quarter adjusted in third as and our contribution for

attributed the fourth historically quarter has XX% XX% XX% XX% to is and Second of Incorporated quarter revenue of in from and and between well of revenues, throughout these both quarter third year. to onboarded assets ranges for seasonality revenues. year our XX% accounted operating between as as new XX% portfolio generation full

adjusted and Lastly, in margins The move the G&A quarter full to and to as we second to should as of and our far means fourth that as in highest expect we grow year top guidance by quarters lower our be the XX% margin implied each first third asset annual sequentially line operating in seasonality our to well. quarters base, XX% expenses in higher expenses EBITDA our bring ranges.

Turning to a financing balance plan finished on We cash our first X. million. $XXX with quarter Slide of

generate And fixed Blackstone relative acquisition from rate providing during our continue from new Vitol. financing returns executed long-term costs. investments $XXX facility attractive on to we draw an additional a We at for the to X.XX%, of fixed-rate million quarter, our borrowing our successfully

our our the years. to cadence continue half Looking online ahead, year, asset remain is with come prior from in which our during our of combination my to second line a That growth financials. remaining the we facilities, finance committed We financing expect the additions with our operations, construction partnerships access. to positioned review long-term concludes of tax from equity cash well of and

and I'd Sternberg as years Relations. welcome to transition. Alison Investor effectively positioned closing, Chris to a recognize communicate of with Investor also Shelton with willingness Before Power for our well to public in smooth ensure Altus efforts successfully and like group to his his company Head Alison investors to experience is us and the IR like analysts. launching Alison Altus' work new joins to story I'd Relations of

Alison Sternberg

and with some our company the Day Thank to remarks. I'll its communicating its am closing community ahead differentiated look engaging on pass join Gregg to plan I Altus for investment forward to thrilled and as I story. of you, growth the Dustin. the call proposition. our delivery of inaugural back execute to value Investor now continues exciting the

Gregg Felton

Alison. Thanks,

this Altus We our next many bringing about of inaugural Day our the week, our vision more boasts to hear Power are aligned our Altus looking macro where with power are directly forward call. team, is a to trends depth how for of how as company we you'll touched of members on greeting on growth Power's from learn you'll Investor earlier then a you position at management and in senior they vision experience, life.

Blackstone to valued and including and of from as addition, of In some important will our is Altus overall representatives sustainability business part their partners, CBRE how share an details efforts.

the following follow to on If the live, post replay presentation you in market slides days of will a open website can't plan and event. our it event our before make we with the the

company and Before a in gratitude the the a to beginning, trajectory embraced growth. and as lead on power team solar setting as we're the we forward the I this Q&A, With open proud company built and for States. call customers to we of and Norell tenacity spent scale us commercial clean powered up personal largest in note, build have like the to a Lars our shared helping this his I'd that Lars ready I'm take delivering to take our nationwide. dedication to working Altus of From vision to moment questions. to your vision United sustainable Lars, that, mentality the pursue alongside incredibly to to last for underdog the On fortunate years decade was company express we

Operator

Instructions]. [Operator

Your first the of question from comes Percoco from Stanley. Morgan Andrew line

Andrew Percoco

out savings I to as start customer comments seeing? to well a Just easy stable for finish of you a go an it that contexts Can deals to get here, you're terms sale offering pushed bit potentially bill and taking of somewhat some your little be getting to some these if you're customer. somewhat just back out to the Gregg, the the programmatic provide about wanted to line. bit, of expect I more are what visibility longer key little the I guess in would there hurdles of across

been just to So can the of what's provide context as more you main some you customers? of go pain in terms points maybe those some of

Gregg Felton

execution are play. value but level, anticipated. sort Day, than week So we high might has And we're and pipeline review we have number in and on acquisitions with longer of I closely detail engagement going further development strong the the on of a client giving sales and to texture, being transactions. to to have question factors priority say focused of is you the proven operating there. partnerships. track that proposition of execution this And And different into the during mentioned, with a providing And we're which activity. same acquisition know, and is next hopefully velocity we'll on more we be during the both next that direct the on I'll bring What more in at course, CBRE Tuesday. and record to opportunities we're evaluate more on a deeply the partners that the in you there's channel our the discussing would increased And I with as with execution. that diving be The get very enjoyed again, channel into of that we've cycle to much committed order the improving of focus, Investor you working have we going at a standard clarity

Andrew Percoco

near-term in that of competition these sounds what just it it acquisitions landscape? little discuss buyer's look operating Is bit be and pricing market? you're like that seeing With of portfolio Can could What's like? mind, the in still a opportunity. you a more a some

Gregg Felton

that of are are we've market opportunity. that growing quite we'll again available that the Day healthy. of Investor is and further space. absolutely would There in a into this actually mentioned opportunity I There's happening mentioning things a returns something are So that in on before the of that. segment that the that of the in pipeline dive It's is the couple remains arguably pipeline a worth fact There robust. say is that context consolidation robust

and for that, will do there believe for coming this And see opportunity present that growth so we certainly year. opportunity

Operator

Your from comes Justin line MKM. next question of ROTH from Clare the

Justin Clare

if guide? just we the the what's How say, valuation this First, a what's point? new embedded from low guidance get in could closer you the about on given the undergoing Or about up at end the of end talk to, acquisitions to to wondering build guidance, the I at was you point maybe perspective. And midpoint from this required do the that could guide? let's this of you're see here, think we then

Gregg Felton

is course. review that So pipeline of factor, I would say the a

strong a operating completed just earnings. we full a have However, and contribute portion of year significant that an will do portfolio QX, we

As recurring ARR that Dustin $XXX the $XX the we from outlined have as Vitol year-end assets the you $XXX acquisition. million ARR know, of which or of is of existed were annualized place, revenue million plus million, in on that that

So existing think positioned we of our we're as well portfolio operating the we through in year. terms move

Justin Clare

understand I process. right on just starting a under wondering And if you're valuation just you But could at construction comment what's now.

quarter. of Or last was the portfolio in point? there think wondering seen those this what have I point? XX from at assets was this your I you are megawatts cancellations status at any

Gregg Felton

timetables. one our as improving mentioned would review of it an activity is earlier, the the this as things, development that there's dive of with context and the velocity stage. there is what But I question there, into on that the be significant of one you'll our activity. and issue of I in of of week. client transactions we evaluating be I CBRE will say And to things that engagement a think are amount we're relates also is I development well, know So to client level as Justin, going next

and a an committed detail, providing So that into an as we more of and as update we'll you we're function when get update have to review.

Operator

Instructions]. [Operator

the line B. Your from of next Souther from comes Chris question Riley.

Christopher Souther

as online? that into you sense could oversubscription? Is fill and the to there, we Is assets addition I where frame a Like community community solar markets that are within availability solar there as you're continued the as just come you on QX? you get working have as the far these the for you add XX,XXX can like want subscribers overall just far that put have as of side, before that of pipeline we was Maybe are kind onboarding X,XXX you to through available queue? it that filling the are queue assets something today? to where

Gregg Felton

as Westchester we customers make is is will customers. The fact a previewing power we've example Morgan systems that, virtue anchor states opportunity Investor to community site. we that build for produces, solar campus. for our by that site of the a we the but available will community to looking the site opportunity be is which power Grid the solar that which the expanding also also in that Day procure good are solar is make community sales of be build so to available this is site commercial that go host Stanley, the using A constructed, site, the that Chris, And many and recent that the Morgan facility is Stanley's anchor customers, Edison the and zone. Con find that will and

a bill. So money Edison bill customer power this their who's Con on a on with Edison Con to is eligible anyone call utility save

So valuable understood the is it's pretty cool community not But is market. well the a that is compelling solar proposition. a pretty It in truth and opportunity.

into densely is lot may populated a some that less see so there a in simply of is energy pretty areas customers. dense to the have markets, little comes there pool, value discount compelling is facility with but acquire be which those in harder happening, could the a opt And a a just deep of the proposition, ability utility in education bill particularly country we parts clean a a to discount, again But sale. the of form

So that that we to the identify to those I continue that good opportunity customer would aligned build about we scale say base are to as customers. facilities feel

Christopher Souther

as the on you've that portfolio? as in an typically you baked far like distribution? guys of slide attic have revenue the appreciate the business. Or I this illustrative seasonality Is the just maybe then And at

Dustin Weber

is this Dustin. Chris,

past. revenue. where out put This we yes, the meant things ranges range quarter of have So for a to by the historic in out is fallen reflect

put it, assets any new of a they're from, year, in from which, course, are that of full well you more to those course, as as we are of the as static given are both that that in as contribute So earlier assets assets to added, to revenue. add going year, year incorporates the revenue throughout pool seasonality going

I we full ranges the out what should are historical, that like. a put be think as think can we encompassing they year so also of look And thought but

Operator

Your next question Sullivan from of comes the line Group. Tate from Maxim

Tate Sullivan

mentioned Are progress opportunities pipeline the to on your opportunities most it, of portfolio update do about identify you on with properties. but the their them working with with You the and also access is CBRE with comments understand some reviewing you partner the Or any companies? with Blackstone of work financing. on

Gregg Felton

partner, in opportunities, we of pace frankly, eager have the the find I'd pace. CBRE focus, be the of with of assets portfolio, base So has has we'll CBRE increase built an to historically opportunity to been working industrial on increased that focus on continue mentioned, the with to for as customer and I expansion Blackstone an across And are oriented activity them rooftops. active those to say really we the to the as avenues review country and our working velocity programmatic we engage development in to and but for particularly terms closely look been development. closely

Tate Sullivan

depend community And new on existing look of do solar opportunity review, as the growth portfolio as mostly set the your your following related at projects? to then community well? on Or will opportunity you up pipeline the solar part

Gregg Felton

that And rate of chunk rising customers again, the So good those a today. we retail from benefit solar predominance, the existing community of asset prices. our variable serves contracts which base profile, power have are

it's the are opportunity. of community megawatts solar number I and XXX that use we prime The a on Slide out captured sites isn't megawatts we pipeline demand are big think X, the also there XX,XXX serving XXX on site. But our customers. that show where we example also

capped not there can excellent necessary building, might another that landfill of could on be a way of a by an think consistent the that on at that be it's what or be generation use cap rooftop industrial inside landfill. But solar demand case an demand landfill. example to with could support rooftop obviously, without building where You build may the

So applications. you're thinking solar about community

a of those of at analysis. we're it's looking So course, all state-by-state opportunities. And of types

Operator

speakers, gentlemen, conference on for And and that, we have today's call. participation. concludes Thank now. the you this don't With ladies your any line questions

You may now disconnect.

Altus Power (AMPS) 9 May 242024 Q1 Earnings call transcript