Ameresco, Inc.

Thank you for standing by. My name is Dustin, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Amorexco Inc. First Quarter 2025 earnings conference call. If you'd like to ask a question, please press star and number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the conference over to Leela Dillon, Senior Vice President of Marketing and Communications. Please, go ahead.

Thank you, Dustin, and good afternoon, everyone. We appreciate you joining us for today's call. Our speakers on the call today will be George Sackalaris, Amorexco's Chairman and Chief Executive Officer, and Mark Czaplak, Chief Financial Officer. In addition, our Chief Investment Officer, Josh Barabow, will be available during Q&A to help answer questions. Before I turn the call over to George, I would like to make a brief statement regarding forward-looking remarks. Today's earnings materials contain forward-looking statements, including statements regarding our expectations. All forward-looking statements are subject to risks and uncertainties. Please refer to today's earnings materials, the Safe Harbor language on slide two of our supplemental information, and our SEC filings for a discussion of the major risk factors that could cause our actual results to differ from those in our forward-looking statements. In addition, we use several non-GAAP measures when presenting our financial results. We have included the reconciliations to these measures and additional information in our supplemental slides that were posted to our website. Please note that all comparisons that will be discussed today are on a -over-year basis, unless otherwise noted. I will now turn the call over to George.

George? Thank you, Lilla, and good afternoon, everyone. First, I would like to thank the entire MRS Co-Team as we celebrate the company's 25th year anniversary. It's been an amazing journey, establishing MRS Co as a leader in our industry and delivering over $16 billion in customer solutions dedicated to reducing energy consumption, enhancing energy infrastructure and resiliency, and developing proven pathways to decarbonization. While the current environment remains challenging, the drivers of our business remain strong. Global power demand grows, electricity costs continue to rise, and grid reliability is deteriorating, as we saw in Europe a few days ago. All of this will increase the demand for distributed, diversified, resilient energy solutions. The team's outstanding execution led to a strong start to the year, with results exceeding our expectations. First quarter revenue and adjusted EBITDA grew 18 and 32% respectively. These results also highlighted the strength of our diversified business model as we experienced material growth in both our projects and energy asset business, including strong performance in Europe and Canada. We also increased our total project backlog to almost $5 billion. Bringing our total revenue visibility across our businesses to almost $10 billion. This was another quarter of significant contract execution conversion success, resulting in a contracted project backlog of $2.6 billion, representing a growth rate of almost 80% year over year. And this positive business trends have continued into the second quarter. I also wanted to comment on some of the well-known challenges facing our industry, and provide some insights into how the MRS Co-Team is working to overcome them. First, let me cover our work with the federal government. This business accounts for approximately 30% of our current total project backlog, with military-related customers accounting for approximately 2 thirds, and GSA, or civilian, agency-related project work of approximately 1 third. We have provided a breakdown of our backlog by end market in our supplemental slides. Because these federal contracts have multi-year execution cycles, they are expected to account for less than 20% of our 2025 project revenue. We noted in our last on-press call that we had encountered one cancellation on a project contracted earlier in January, and a pause on two other contracts. We are pleased to report that the project that had been canceled has now been re-scoped, and the other two contracts have now been un-posed. Also, we have not encountered any additional cancellations or delays in our federal contracts. So, while it is too early to say that there will be no additional future disruptions, we are cautiously optimistic. And as the current administration's priorities come into focus, we believe our broad and deep technical expertise in our agnostic and budget-neutral approach will help us promote our offerings. Interestingly, we are now seeing a significant number of recently issued federal RFPs focused on our core competencies of resiliency and increasing the power supply through new energy infrastructure. The government's recent release of a request for information about the possible use of DOE land to support growing demand for data centers. Following that, the DOE has identified 16 potential sites uniquely positioned for rapid data center construction, including in-place energy infrastructure with the ability to fast-track permitting for new energy generation. For example, we are seeing more opportunities to leverage federal lands for critical energy infrastructure projects. The Kōpono 44-megawatt solar and 44-megawatt battery project is a perfect example of how this can work. We leveraged an enhanced use list with the Navy at Pearl Harbor to build this critical energy infrastructure that supports not only the base, but also the Hawaiian electric grid. We are also developing a 99-megawatt firm power plant, an advanced microgrid project on the same base. We are utilizing similar structures, including enhanced use lists to develop data center energy infrastructure projects with the Department of Defense. As we captured on another new slide on our supplemental deck, detailing our project backlog by technology, MRSCO is very well diversified in our expertise with efficiency, resiliency, and power production solutions. Approximately 50% of our total project backlog includes energy infrastructure projects using generation technologies such as gas turbines, engines, solar, hydroelectric, and resiliency technologies, such as large-scale battery storage and microgrids. We believe our solutions are a good match for the evolving energy landscape, which is demanding every increasing amount of electricity and higher levels of resiliency. We are very excited about the opportunities that we have for our work with not only the federal government, but with all of our customers across our core markets, including utilities, data centers, co-ops, and large CNI. I also wanted to discuss the dynamics, tariff landscape, that we, like every other company in our industry, are facing. First, I would like to point out that much of the equipment for current ongoing projects and energy assets in development has already been purchased and is in the country or already on the work sites, which we believe shields us from near-term price increases. Longer term, we will work to mitigate price increases during contract negotiations and reprice where possible. It's important to note that the majority of our solar and battery projects are international, and they are therefore not subject to US tariffs. As many of our shareholders know, this is not the first time a market has faced tariffs or inflation, and we have experienced overcoming similar difficult pricing dynamics. We have strong relationships with domestic and global vendors and a healthy backlog of projects, giving us a position of strength for our various partners. I will now turn the call over to Mark to comment on our financial performance and 2025 outlook. Thank

you, George, and good afternoon, everyone. We delivered strong first-quarter results, with total revenue growing 18% and adjusted EBITDA growing 32%. Our project's business revenue grew 23%, reflecting outstanding execution and our laser focus on the conversion of our backlog. Also, as George mentioned, we did not encounter any additional delays or cancellations with the federal government and those contracts that we highlighted during our fourth quarter call, which have now been unpaused or re-scoped. Beyond our federal project work, we also had a strong quarter in Europe, Canada, and several US regions. This performance speaks to the diversity of our customers, geographies, and types of solutions that is a hallmark of the Amoresco business model. Energy asset revenue grew 31%, driven largely by the growth of assets in operation compared to last year, with our base of operating assets now standing at 742 megawatts. We have also taken steps to mitigate lower RIN prices for the year through our dynamic hedging strategy, with our remaining 2025 anticipated RIN exposure at only 20%. The revenue decline in our other line of business is attributed directly to the divestiture of our AEG business at the end of 2024. Gross margin of .7% was largely in line with our expectations, reflecting a greater mix of revenue from large European EPC contracts. As a reminder, while these design-build projects have a lower gross margin profile, they help to diversify our business as well as create strong operating leverage, as they require very little incremental operating expense for the gross profit dollars they contribute. Net income attributable to common shareholders was a loss of $5.5 million, or 10 cents per share. Adjusted EBITDA of 40.6 million increased 32%, reflecting our strong revenue growth, tight cost controls, and the power of our lean, scalable business model. We continue to see substantial growth in our total project backlog, which grew 22% to $4.9 billion. Importantly, we converted $330 million of awards to contracts during the quarter, driving our contracted project backlog up 80% to $2.6 billion. Our project teams continue to deliver on contract conversion and execution to increase revenue and cash flow generation. We also added $367 million of new project awards to our awarded backlog during the quarter. Turning to our balance sheet and cash flows, we ended the quarter in a solid cash position with approximately $72 million in cash and total corporate debt of $270 million. During the first quarter, we successfully executed approximately $334 million in financing commitments, which included extending and upsizing our senior secured credit facility to help fund our growth. With our strong first quarter results and forward visibility, we are pleased to reaffirm our guidance ranges for 2025 revenue and adjusted EBITDA of $1.9 billion and $235 million at the midpoints. Our team's outstanding execution drove faster implementation during the first quarter of approximately $30 million of project revenue. To assist with shaping for the remainder of the year, we are maintaining our expectation for the cadence of revenue in the second half of 2025 to represent approximately 60% of our total revenue. Accounting for our strong Q1 results, we anticipate Q2 revenue will be in the range of approximately $400 million to $425 million. Now I'd like to turn the call back to George for closing comments. Thank you, Mark.

As you have heard, we got a very solid start to the year, and we have seen this momentum continue into the second quarter. For over 25 years, we have built an organization with unmanaged expertise in developing, structuring, and delivering energy projects. Our business model is resilient, with a majority of our adjusted EBITDA coming from our long-term recurring revenue businesses, as well as from the strong multi-year visibility inherent in our project backlog. Furthermore, we believe our project business will continue to grow as we expect to capture more of the emerging infrastructure and resiliency built out. We are also a global business, diversified by our customer, technology and geography, which would allow us to continually support change in policy in any geography will maximize our growth and earnings. In closing, I would like to once again thank our employees, customers, and stockholders for their continued support. Operator, we would like to open the call

to questions.

Thank you. Before we open the floor for questions, as a quick reminder, if you'd like to ask a question, please press star and the number one on your telephone T-pad. You would also like to ask you to kindly limit yourself to one question and one follow-up. Thank you. And with our first question, this comes from the line of Noah K. from Oppenheimer. The line's open.

Thanks for taking the questions. So clearly from 4Q to now, a nice turn of events around the federal business. I wonder if you could take us a little bit into some of the transpiring that went on during the quarter to maybe kind of get the visibility in some of the contract situations into a better place. I think we start from the premise that these are energy-saving and net-positive for any assets that the projects are going into, but maybe talk a little bit about how it played out and maybe the nature of some of these new RFPs you're seeing.

Yeah, so Noah, hey, it's Mark. Maybe I'll just talk to the first part of that with respect to those federal contracts. I mean, again, I think we were fortunate that, again, the one contract that was canceled that has now been re-scoped, we think will come back under a future mod. And so that will ultimately remain pretty neutral to where it started, which we think is a great outcome. And then on the other two that were paused, that are now unpaused, again, those will ultimately be re-scoped. We feel that the re-scoping probably will result in a small haircut on those, but again, certainly not the worst case, which could have been with those being canceled. So I think generally speaking, it was a good outcome for the three contracts that we talked about in the beginning.

And the bottom line is the fact that these contracts, they are primarily energy-efficient, they are budget-neutral, and all administrations, they like this particular project. And I think the fact that they were signed in January probably had something to do with it. And that's why people took another look at it and once they realized it's good for the government, they plan to move ahead. And because with the GSA, when the contract that was canceled, couple of the buildings, they would be sold. So they took that amount of work and they put it in other buildings. So that's why we feel very good where we are with this administration. And I think we can work with them, that they like the budget-neutral approach and they like to do resiliency and more power generation in federal facilities in order to have the resiliency required and help the other things. And that's why I tried to cover on my notes, how do they maximize the use and get more return from some of the land that's in the federal bases, it's unused. That's what happened in Pearl Harbor and so on.

You know, Mark, I think last quarter, you gave us some direction on how to think about the shape, not only of revenue, but maybe even around sort of margins. Obviously, no things can move around a fair bit with project timing, but any color on sort of the shaping of margins, either for 2Q or the balance of the year?

I mean, we feel really good about our full year guide, especially on the gross margin range, which was 15.5 to 16%. Again, I think Q1 was a little bit lower than our expectations, but as I mentioned, we did see a heavier mix of European EPC contracts that do have a little bit lower margin profile. But I feel pretty good about the margin range for the rest of the year.

Okay, maybe last one to sneak in. It's always hard to resist the temptation to ask about recent events. And I think in this case, it's quite appropriate. The blackouts in Southern Europe, I guess we're still figuring out what caused them. But it does go to the question around building infrastructure reliability on the grid. And I'm curious to think about how you see on MRSCO's opportunities that when you look at events like that and kind of the type of project flow and opportunity you're seeing in Europe broadly.

Yeah, and it happened not only in Spain and a few days before that, it just happened partially in Greece. The fact that all these countries, they're getting so much solar renewable power and it's intermittent, and you're gonna see that happening more and more. In the United States, what happened in Texas some time ago with the freeze. And now as we put more and more renewables on the system, unless we get battery storage or what I call 24 to seven days, 24 hours, seven days a week power, I watch from renewable power, it's gonna happen. And what I think, I think the distributed generation is gonna take much bigger piece of reaction than the large scale power plants and transmission lines because I do not think that being able to build the transmission lines necessarily to improve the grid resiliency. Because I remember when I went with the utility for one large transmission line from Massachusetts to Rhode Island, it took us 10 years to get the right way. So it's very difficult. And the other thing that happened, once you build those transmission lines, once you have an average, and sometimes you lose two of them, you don't have the spinning reserve to back up what might happen. And that's how you have these averages. Back in the utility days when I used to do the long range planning, we used to have five to 10% spinning reserve. You don't have it anymore.

Thank you very much. Thank you. Our next question comes from the line of George Genarikis

from Kenakorgenuity. The line's open.

Hey everyone. Thank you for taking my questions. I was wondering if you could give us an update on any projects whose economics are sensitive to changes in the Inflation Reduction Act. What does the world look like there? And what are those projects still moving forward? Have you seen maybe a little bit of a delay to see the dust settle? I'm just curious if you can share any commentary there. Thank you.

I mean, I think for the projects that are coming online this year, especially on the RNG, we've safe harbored the ITC related to those projects. We feel pretty good about that. Even beyond that, for about three quarters of the projects in our asset development pipeline, we've safe harbored the ITC on that as well. I think we mentioned that last quarter, around 200 million of additional ITC. So the teams have done a great job to take the necessary steps to try and safe harbor that. I think for assets outside of the RNG, again, I think we've done a pretty good job of safe harboring most of that. So I don't expect any short-term impact if

there were something to happen with the IRA. Maybe as a follow-up,

the changing dynamics in the landscape impacted your decision tree around projects versus willingness to own assets. How's your philosophy changed there over the last, you can call it three to six months?

Yeah, the interest environment, it's a little bit higher than what we would like it to be. And I think it goes without saying, and that's why you're seeing the growth in the project business a little bit more. We put a little bit more emphasis on the project, but of course they generate pretty good cashflow, and we have a pretty good niche in the marketplace there. And now as the evolution happens with more resiliency and more power generation, we wanna take a good piece of that action, and it's right up to our expertise. And, but on the other hand, I mean, we have over 600 megawatts of assets in development, which it can take care of for us for the next two, three years. So we are not taking our foot off the gas line there, but on the over the pedal, but we like the project business a lot, and we execute those very well. So we are focusing on that

a little bit more. Thank you. Thank you. Our next question comes from the line of Cassie Harrison from Piper

Sandler. The line's open.

Good afternoon. Thanks for taking the questions, and congrats on 25 years. So, nice to hear that the projects that have paused have now resumed. I was just wondering, have you seen any negative impacts from the reduced federal workforce on your business, or is the approval process and just the -to-day work for the federal government ongoing without any interruptions from less workers?

Yeah, no, it's a good question. To be honest, we haven't seen anything yet, but we certainly could see a situation where the things that are happening, the personnel could have an impact on the timing of how awards can convert to contracts, or just administrative challenges that could impact the timing of the progression of our projects. I think we've tried to build in some amount of conservatism into our guide, into the numbers for the year, but kind of near term, we haven't seen anything as of yet. Well,

on the long term though,

because

of the budget mutual associated with our projects, and if you recall the previous Trump administration, we executed more performance contracts under them than we did under the Biden administration, because they like this concept. So even though we might see, let's say, the movement from awards to contracted backlog delayed a little bit, but the number of contracts and proposals most likely will go up.

That's a helpful additional color. Maybe just two more quick ones for me. George, I think you discussed that you're in a good spot on storage, and the exposure is not even that great, or is not that high anyways to the US, it's more international. And then you said demand, it sounds like demand hasn't really been impacted by tariffs, but I'm just curious, are there any other, excuse me, are there any other implications to your business from tariffs that we need to be thinking about in any of the individual segments that maybe weren't covered in the prepared remarks?

I mean, on the batteries, the projects we are doing this year and next year, this year, they were all pre-purchased before any impact on the tariffs. On next year, I think half of them have been repurchased. The other half, what we've been able to do with some of our customers, dollar for dollar, there's a clause in the contracts that the purchase power agreements that to whatever the tariff is, it will be a pass through. We'll recalculate the rate, it will be a pass through. So that's. And the same thing.

Appreciate it, both are good.

Yeah, and the same thing is applied with some of the panels, but what is the other thing that we have been trying to do by as much domestic as possible, but still, if you get tariffs, so the domestic prices go up as well. But so far, we have managed very, very well where we

are.

So, appreciate the color. And then maybe just one final one for me. I was just curious whether you've observed any dislocations in valuations between private transactions or what your pieces of your portfolio may be able to get in the private market versus what you're seeing in the public markets and whether there's any appetite to show the public markets the value of your assets via transactions. Thank you.

I think that's up to Joseph Alley. Thanks, George. Hey, Kashi. So I think the answer is yes. We do believe that there are still robust private valuations for the types of projects and assets that we are implementing. Nothing we can really share now, but I think that the public valuations in our whole sector have definitely been, we'll call it disproportionately impacted on maybe rational and irrational fears about changes in the government, news cycle, et cetera. But fundamentals of our energy efficiency offerings, our R&G assets, our pipeline, our portfolio, and our platform remain incredibly strong. And people that have the ability to look at these things, from a project financing perspective or some of our development cell, those equity investors, those private equity investors, they like what they see. And we're still able to monetize

the value that we're creating. Thank you. Our next question comes from the line of Eric Stein

from Craig Howell. The line's open.

Hi, everyone. Maybe just sticking, hi, maybe just sticking with the tariffs. And I guess I'm, you know, great news on how things are set up for 25 and for part of next year. But just thinking about this, if this period of uncertainty were to last for longer than that, you know, just wanna dig in a little bit on kind of the structure of the contracts. Is it pretty common to have that pass through language? I guess what I'm getting at is, I mean, is this kind of a painstaking contract by contract renegotiation? Or is this something that's pretty standard, it's in the contracts, and it's pretty much accepted by your customers?

Well, pretty much. I have told our people that new contracts, we have the language that we are protected against tariffs. And sometimes if we too much equipment is coming from abroad foreign exchange fluctuations as well, that has become right now the mark. But it goes from customer to customer. And for example, this particular customer, it's a large contract, it's a battery storage project. And they get a certain deadline that they want to help the project up and running. And we get to put money down for the transformer, in order to save property IPC, and so on. And we said, that's fine. But if the tariffs come and the prices goes up, you have to be on the hook for it as well for the transformer and so on. And they stepped up to the plate. And we see more and more some of the largest industrial customers looking for resiliency, battery storage and so on. So I think at the end of the day, they're willing to do what it's necessary to protect their operations.

Yeah, no, I think beyond even the contracts, we continue to diversify the supply chain. I think we're taking quite a few learnings that we came out of COVID. And so we've been focused on bringing materials in faster on our projects, diversifying the supply chain, looking at domestic sources. So I think the combination of building those protections into the contracts, as well as kind of maintaining that diversification is gonna help us to mitigate most of the exposure to tariffs moving forward.

Got it, all right, that's helpful. And then maybe just back on the federal government work. And this is just a question that was just asked, but just wanted to clarify. In terms of the reduced workforce, I mean, it sounds like you are viewing this more as a delay, potential delays rather than just cancellations. And I know what you've seen to this point is you had the one which will be re-scoped, you've got the two that have kind of come back. But I mean, so is it more from an approval process and a timing just to get through everything that's necessary to move forward rather than seeing a bigger risk that fewer buildings, housing, that smaller workforce and changing the overall scope.

I mean, I wouldn't say that we have potential delays. I mean, it would be immaterial because that's what I tried to point out because of the power of the value proposition of our offerings is so strong, the administration wants it so bad. Or you need this kind of work because at the end of the day, they get the infrastructure upgrade and they don't have to use their budget in order to do it. They don't need to acquire any capital so there will be more push to save money. So even if they have fewer people at the end of the day, I would expect that we will see more contracts signed with this case.

Yeah, but I think generally speaking, if there is risk, we look at it being more administrative and just potentially slowing down the process around award conversions or contracting. So, and yet we haven't seen anything yet.

Okay, I'll just keep it to two, thanks. Thanks, Aaron. Thank you.

Thank

you.

Again, if you'd like to ask a question, please press star and the number one on your telephone keypad. Again, that is star and the number one on your telephone keypad. And our next question comes from the line of Craig Erwin from Ralph Capital Partners. The line's open.

Good evening and thanks for taking my questions. So George, Mark, everyone, thank you for the data point on your RIN hedging position. I'm sure you're well aware of some of the controversial forecasts that have been out there from different analysts about RINs possibly being cut in half. Not something that you would expect one of the big oil desks to say. But can you just remind us what the processes you go through to evaluate the potential profitability on your assets before you go and deploy capital, how you structure these agreements as far as sharing with the RINs and other incentives and how you sort of stress test these projects before you ever spend any money, breaking ground to build to ensure profitability across the cycle.

I think Josh, you do the final work. We have some minutes.

Hey, Craig. So we have a pretty thorough process of vetting the RNG projects throughout their development, including multiple steps with our investment committee. And we of course have some pretty well-entranced financing partners as well. And we run a lot of the projects through them early on to make sure that their expectations for the RIN curve match ours or match something that's reasonable in the market. And we layer in the financing assumptions in terms of the amount of debt, the cost of debt, the tenor, et cetera, in conjunction with what our models are showing us and what the development team is producing. And in a base case scenario and in a stress case scenario, if they meet our hurdle rates, which you've talked about as sort of a levered teens IRR on a risk adjusted basis, then we proceed throughout those next steps and connect those gates throughout development. So there's a lot in there, but we definitely aren't taking kind of historical RIN rates or even current RIN rates. It really is kind of a downward sloping curve based on forecasts that we have from all sorts of market parties as well as our own proprietary analysis of supply and demand in the RVO, et cetera.

Understood. Thank you for that. So my next question is about the operating expenses. She had more than $50 million in revenue growth, but you were down over the last couple of years for the first quarter for your operating expenses. Are you allocating personnel maybe to project execution from development activities? Is there anything sort of going on as far as one-time expenses or re-budgeting on the operating expense line? And if there was maybe the move of personnel to execution, could you maybe quantify for us what that might have been on a margin basis?

Yeah, I mean, I think that from an allocation, we are seeing probably slightly better utilization, I think, as you look at OPEX, the trend. Remember also, last year we had the additional OPEX from our AEG business, which was divested. So we're seeing a direct reduction from those costs no longer being in the P&L. But I think, generally speaking, the cost controls, around OPEX, are really what is helping to keep OPEX steady or even down as we're managing the timing of when we're bringing in new employees and only adding as we need to. We still have pretty strong operating leverage with a lot of the larger projects that we're being brought on.

So... Well, well, congrats on a strong start to the year. Thank you. Thanks, Greg. Thanks. Thank you. Our next question comes from the line of Joseph

Oja from Buchenheim. The line's open.

Hi there, guys. Thanks for all of the detail. Two questions. First, I mean, George, you alluded to non-US exposure in your particular solar and energy storage backlog. I'm just wondering if you can maybe put some rough numbers around that. You obviously have got 63% of your energy asset backlog in those two sectors. It's harder to tell what the number is for the project backlog, but help us understand how that might roughly break into US and non-US business. And then I have one other question.

Most of the European and Canada workers in our solar is probably 1.5 gigawatts, but primarily, though, EPC. I think it's only a very small portion that we will hold, and that's up in Canada. In Europe, all the projects that we have, with the exception of a small one, maybe 10 megawatts, it's EPC concept.

All right, I guess I'm not understanding. You've got 618 megawatts of energy assets in construction, 63% of which are solar or battery. I'm trying to understand what portion of those is US versus non-US.

Josh, do

you have the exact number?

It's almost all exclusively US. Sorry, Joe, we were answering a question on the project backlog. No, I didn't realize you were answering on the assets. That's quite helpful.

So the project backlog is more geographically diverse, but the energy asset backlog is more US.

That's correct. Okay,

great, thanks. And next question, I heard some comments about diversifying procurement, which is great, and you've got a few options on the solar module side. Man, there's not a lot of LFP production in the United States right now, and most of it is spoken for. When you look at your storage business, are there options for buying in the US? Are you gonna buy nickel-based cells, or have you found a factory nobody knows about? I'm curious what your procurement strategy is for cells,

and I assume you're using mostly LFP. Hello? Joe, it's Josh, yeah, sorry.

We're volleying back and forth over who gets this one. The short answer is it is mostly a traditional lithium ion, and unfortunately, we don't have any brand new factories that nobody knows about to announce on the call tonight. We are sourcing from the same kind of major global players that a lot of people are, especially as it pertains to bankability and performance, because as I think you know, and we've tried different solutions, it hasn't been quite as successful. That being said, I think the key here is that the stuff we have at Aston Development for this year, as George mentioned, have been safe harbored, and or already delivered on site for the most part. We have one big project that'll be kind of mid-year COD, which makes up the bulk of the assets and operations that we guided to last time. And then new projects, so less about procurement and more about contract structure. The new projects, we're inserting change in law provisions, as George mentioned, kind of a dollar for dollar adjustment to tariff or IRA type of changes. So it's less about procurement and more about working with our customers to get a fair deal in this uncertain environment.

Okay, and just as a last follow on to that, other people in this business have alluded to those pass-throughs, but also indicated that there are brackets around that limiting exposure. So let us suppose that we are paying 130% LFP tariffs a year from now. Is it your intention and your belief that you can pass all of that along to customers, or would you bear some of it?

We'll try to

pass it all to our customers.

Yeah, sorry to say it. Unless the project margin is such that we could absorb some, then we would. We look at economics very, very hard before we take on that kind of risk or cost.

Yeah. At the end of the day, the economics are the price you'll pay.

It

is what it is. Yes, thank you for your answers. Yep, thanks Joe. Thank you. There are no further questions. This now concludes the question and answer session.

This also concludes the conference call. Thank you all for joining. You may now disconnect.