Third Quarter Financial Highlights
- Third quarter 2024 revenues of $58.7 million, a 30% increase as
compared to third quarter 2023
- GAAP net income of $8.6 million for third quarter 2024, as
compared to $6.8 million for third quarter 2023
- Adjusted EBITDA* of $37.0 million for third quarter 2024, a 27%
increase as compared with third quarter 2023
Recent Business Highlights
- Nationwide portfolio that surpassed 1 GW in operating assets as
of September 30, 2024
- Expanded Community Solar subscriber base to approximately
30,000 households across nine states
- Generated 333 million kilowatt hours of clean electric power in
third quarter 2024, the equivalent of approximately 232,000 metric
tons of carbon dioxide avoided
Altus Power, Inc. (NYSE: AMPS) (“Altus Power,” “we,” “us,” “our”
or the “Company”), the largest commercial scale provider of clean,
electric power, today announced its financial results for the third
quarter of 2024.
“Our third quarter performance reflects our market-leading
position in the rapidly growing commercial scale solar sector as we
surpassed 1 GW in operating assets nationwide,” said Gregg Felton,
CEO of Altus Power. “Our focus is on generating clean power
directly where it’s needed, addressing energy demands and
alleviating transmission strain by providing solutions close to
where the power is being consumed.”
Third Quarter Financial Results
Operating revenues during the third quarter of 2024 totaled
$58.7 million, compared to $45.1 million during the same period of
2023, an increase of 30%. The increase is primarily due to the
greater number of solar energy facilities placed in service and
onboarded during the past twelve months and resulting increased
sales of power to our customers.
Third quarter 2024 GAAP net income totaled $8.6 million,
compared to $6.8 million for the same period of 2023. The increase
was primarily driven by the non-cash gain from remeasurement of
alignment shares.
Adjusted EBITDA* during the third quarter of 2024 was $37.0
million, compared to $29.1 million for the third quarter of 2023, a
27% increase. The year-over-year growth in adjusted EBITDA* was
primarily the result of increased revenue from additional solar
energy facilities, partially offset by an increase in our operating
expenses as well as general and administrative expenses
attributable to increased personnel to support our ongoing growth
initiatives.
2024 Guidance
The Company reaffirmed its previously stated guidance range of
$196-201 million of revenue and $111-115 million of adjusted
EBITDA* for FY2024.
Use of Non-GAAP Financial Information
*Denotes Non-GAAP financial measure. We present our operating
results in accordance with accounting principles generally accepted
in the U.S. (“GAAP”). We believe certain financial measures, such
as adjusted EBITDA and adjusted EBITDA margin provide users of our
financial statements with supplemental information that may be
useful in evaluating our business. The presentation of non-GAAP
financial information is not intended to be considered in isolation
or as a substitute for, or superior to, the financial information
prepared and presented in accordance with GAAP.
We define adjusted EBITDA as net income plus net interest
expense, depreciation, amortization and accretion expense, income
tax expense or benefit, acquisition and entity formation costs,
stock-based compensation expense or benefit, and excluding the
effect of certain non-recurring items we do not consider to be
indicative of our ongoing operating performance such as, but not
limited to, gain or loss on fair value remeasurement of contingent
consideration, gain or loss on disposal of property, plant and
equipment, change in fair value of Alignment Shares liability, loss
on extinguishment of debt, CEO transition costs, and other
miscellaneous items of other income and expenses.
Adjusted EBITDA and adjusted EBITDA margin are non-GAAP
financial measures that we use to measure our performance. We
believe that investors and analysts also use adjusted EBITDA and
adjusted EBITDA margin in evaluating our operating performance.
These measurements are not recognized in accordance with GAAP and
should not be viewed as an alternative to GAAP measures of
performance. The GAAP measure most directly comparable to adjusted
EBITDA is net income and to adjusted EBITDA margin is net income
over operating revenues. The presentation of adjusted EBITDA and
adjusted EBITDA margin should not be construed to suggest that our
future results will be unaffected by non-cash or non-recurring
items. In addition, our calculation of adjusted EBITDA and adjusted
EBITDA margin are not necessarily comparable to adjusted EBITDA and
adjusted EBITDA margin as calculated by other companies and
investors and analysts should read carefully the components of our
calculations of these non-GAAP financial measures.
We believe adjusted EBITDA is useful to management, investors
and analysts in providing a measure of core financial performance
adjusted to allow for comparisons of results of operations across
reporting periods on a consistent basis. Factors in this
determination include the exclusion of (1) variability due to gains
or losses related to fair value remeasurement of contingent
consideration and the change in fair value of Alignment Shares
liability, (2) strategic decisions to acquire businesses, dispose
of property, plant and equipment or extinguish debt, and (3) the
non-recurring nature of stock-based compensation, CEO transition
costs, and other miscellaneous items of income and expense, which
affect results in a given period or periods. In addition, adjusted
EBITDA represents the business performance of the Company before
the application of statutory income tax rates and tax adjustments
corresponding to the various jurisdictions in which the Company
operates, as well as interest expense and depreciation,
amortization and accretion expense, which are not representative of
our ongoing operating performance.
Adjusted EBITDA is also used by our management for internal
planning purposes, including our consolidated operating budget, and
by our board of directors in setting performance-based compensation
targets. Adjusted EBITDA should not be considered an alternative to
but viewed in conjunction with GAAP results, as we believe it
provides a more complete understanding of ongoing business
performance and trends than GAAP measures alone. Adjusted EBITDA
has limitations as an analytical tool, and you should not consider
it in isolation or as a substitute for analysis of our results as
reported under GAAP.
In addition to adjusted EBITDA, we may also refer to annual
recurring revenues, or ARR, which is a non-GAAP measure. ARR is an
estimate that management uses to determine the expected annual
revenue potential of our operating asset base at the end of a
calendar year. ARR assumes customary weather, production, expenses
and other economic and market conditions, as well as seasonality.
It is not derived from a GAAP financial measure so it is difficult
to provide a meaningful reconciliation to GAAP. The elements of our
financial statements that are considered or evaluated in
determining our ARR are the following: the estimated megawatt hours
of generation assuming all new build and operating assets added any
time during the year were in place for the full year and the
estimated power prices for such assets based on historical power
prices. We believe this metric can be helpful to assess our
portfolio asset base in operation at the beginning of an annual
period, e.g., if we were to receive the benefit of assets added for
a full year even if they were added during a partial year. This
figure is only an estimate and is based on a number of assumptions
by Altus Power's management that may or may not be realized.
Altus Power does not provide GAAP financial measures on a
forward-looking basis because the Company is unable to predict with
reasonable certainty and without unreasonable effort, items such as
acquisition and entity formation costs, gain on fair value
remeasurement of contingent consideration, change in fair value of
Alignment Shares. These items are uncertain, depend on various
factors, and could be material to Altus Power’s results computed in
accordance with GAAP.
Adjusted EBITDA Definitions
Interest Expense, Net. Interest expense, net represents
interest on our borrowings under our various debt facilities,
amortization of debt discounts and deferred financing costs, and
unrealized gains and losses on interest rate swaps.
Depreciation, Amortization and Accretion Expense.
Depreciation expense represents depreciation on solar energy
systems that have been placed in service. Depreciation expense is
computed using the straight-line composite method over the
estimated useful lives of assets. Leasehold improvements are
depreciated over the shorter of the estimated useful lives or the
remaining term of the lease. Amortization includes third party
costs necessary to acquire PPA and NMCA customers, value ascribed
to in-place leases, and favorable and unfavorable rate revenues
contracts. Value ascribed to in-place leases is amortized using the
straight-line method ratably over the term of the individual site
leases. Third party costs necessary to acquire PPAs and NMCA
customers are amortized using the straight-line method ratably over
15-25 years based upon the term of the customer contract. Estimated
fair value allocated to the favorable and unfavorable rate PPAs and
REC agreements are amortized using the straight-line method over
the remaining non-cancelable terms of the respective agreements.
Accretion expense includes over time increase of asset retirement
obligations associated with solar energy facilities.
Income Tax Expense and Benefit. We account for income
taxes under ASC 740, Income Taxes. As such, we determine deferred
tax assets and liabilities based on temporary differences resulting
from the different treatment of items for tax and financial
reporting purposes. We measure deferred tax assets and liabilities
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to reverse.
Additionally, we must assess the likelihood that deferred tax
assets will be recovered as deductions from future taxable income.
We have a partial valuation allowance on our deferred state tax
assets because we believe it is more likely than not that a portion
of our deferred state tax assets will not be realized. We evaluate
the recoverability of our deferred tax assets on an annual
basis.
Acquisition and Entity Formation Costs. Acquisition and
entity formation costs represent costs incurred to acquire
businesses and form new legal entities. Such costs primarily
consist of professional fees for banking, legal, accounting and
appraisal services.
Stock-Based Compensation Expense. Stock-based
compensation expense is recognized for awards granted under the
Legacy Incentive Plans and Incentive Plan, as defined in Note 14,
"Stock-Based Compensation," to our condensed consolidated financial
statements included in our Quarterly Report on Form 10-Q for the
period ended September 30, 2024.
Fair Value Remeasurement of Contingent Consideration. In
connection with various acquisitions, contingent consideration may
be payable upon achieving certain conditions. The Company estimates
the fair value of contingent consideration using a Monte Carlo
simulation model or an expected cash flow approach. Significant
assumptions used in the measurement of fair value of contingent
consideration associated with various acquisitions include market
power rates, estimated volumes of power generation of acquired
solar energy facilities, percentage of completion of in-development
solar energy facilities, and the risk-adjusted discount rate
associated with the business.
Gain or Loss on Disposal of Property, Plant and
Equipment. In connection with the disposal of assets, the
Company recognizes a gain or loss on disposal of property, plant
and equipment, which represents the difference between the
consideration received and the carrying value of the disposed
asset.
Change in Fair Value of Alignment Shares Liability.
Alignment Shares represent Class B common stock of the Company
which were issued in connection with the Merger. Class B common
stock, par value $0.0001 per share ("Alignment Shares") are
accounted for as liability-classified derivatives, which were
remeasured as of September 30, 2024, and the resulting gain was
included in the condensed consolidated statements of operations.
The Company estimates the fair value of outstanding Alignment
Shares using a Monte Carlo simulation valuation model utilizing a
distribution of potential outcomes based on a set of underlying
assumptions such as stock price, volatility, and risk-free interest
rates.
Other Income and Expense, Net. Other income and expenses
primarily represent interest income, and other miscellaneous
items.
CEO Transition Costs. CEO transition costs represent
costs recognized in connection with the resignation of Lars Norell
as Co-Chief Executive Officer and director of the Company on April
28, 2024.
Forward-Looking Statements
This press release contains forward-looking statements.
Forward-looking statements may be identified by the use of words
such as “aims,” “believes,” “expects,” “intends,” “aims”, “may,”
“could,” “will,” “should,” “plans,” “projects,” “forecasts,”
“seeks,” “anticipates,” “goal,” “objective,” “target,” “estimate,”
“future,” “outlook,” "strategy," “vision,” or variations of such
words or similar terminology that predict or indicate future events
or trends or that are not statements of historical matters. These
statements, which involve risks and uncertainties, relate to
analyses and other information that are based on forecasts of
future results and estimates of amounts not yet determinable and
may also relate to Altus Power’s future prospects, developments and
business strategies. These statements are based on Altus Power’s
management’s current expectations and beliefs, as well as a number
of assumptions concerning future events.
Such forward-looking statements are subject to known and unknown
risks, uncertainties, assumptions and other important factors, many
of which are outside Altus Power’s control, that could cause actual
results to differ materially from the results discussed in the
forward-looking statements. These risks, uncertainties, assumptions
and other important factors include, but are not limited to: (1)
the risk that pending acquisitions may not close in the anticipated
timeframe or at all due to a closing condition not being met; (2)
failure to obtain required consents or regulatory approvals in a
timely manner or otherwise; (3) the ability of Altus Power to
successfully integrate the acquisition of solar assets into its
business and generate profit from their operations; (4) the ability
of Altus Power to retain customers and maintain and expand
relationships with business partners, suppliers and customers; (5)
the risk of litigation and/or regulatory actions related to the
proposed acquisition of solar assets; and (6) the possibility that
Altus Power may be adversely affected by other economic, business,
regulatory, credit risk and/or competitive factors.
Additional factors that could cause actual results to differ
materially from those expressed or implied in forward-looking
statements can be found under the heading “Risk Factors” in Altus
Power’s Form 10-K filed with the Securities and Exchange Commission
on March 14th, 2024, as well as the other information we file with
the Securities and Exchange Commission. New risks and uncertainties
arise from time to time, and it is impossible for us to predict
these events or how they may affect us. You are cautioned not to
place undue reliance upon any forward-looking statements, which
speak only as of the date made and the information and assumptions
underlying such statement as we know it and on the date such
statement was made, and except as required by applicable law, Altus
Power undertakes no obligation to update or revise the
forward-looking statements, whether as a result of new information,
changes in expectations, future events or otherwise.
This press release is not intended to be all-inclusive or to
contain all the information that a person may desire in considering
an investment in Altus Power and is not intended to form the basis
of an investment decision in Altus Power. All subsequent written
and oral forward-looking statements concerning Altus Power or other
matters and attributable to Altus Power or any person acting on its
behalf are expressly qualified in their entirety by the cautionary
statements above.
Conference Call Information
The Altus Power management team will host a conference call to
discuss its third quarter 2024 financial results later today at
4:30 p.m. Eastern Time. The call can be accessed via a live webcast
accessible on the Events & Presentations page in the Investor
Relations section of Altus Power's website at
https://investors.altuspower.com/events-and-presentations/default.aspx.
An archive of the webcast will be available after the call on the
Investor Relations section of Altus Power's website as well.
About Altus Power, Inc.
Altus Power, based in Stamford, Connecticut, is the largest
commercial-scale provider of clean electric power serving
commercial, industrial, public sector and Community Solar customers
with end-to-end solutions. Altus Power originates, develops, owns
and operates locally-sited solar generation, energy storage and
charging infrastructure across the nation. Visit www.altuspower.com
to learn more.
Altus Power, Inc.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except share
and per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Operating revenues, net
$
58,681
$
45,079
$
151,800
$
120,970
Operating expenses
Cost of operations (exclusive of
depreciation and amortization shown separately below)
11,891
7,825
34,083
21,382
General and administrative
9,824
8,194
32,086
23,847
Depreciation, amortization and accretion
expense
17,151
13,719
50,447
38,054
Acquisition and entity formation costs
765
268
2,281
3,128
(Gain) loss on fair value remeasurement of
contingent consideration, net
(900
)
50
(2,379
)
150
(Gain) loss on disposal of property, plant
and equipment
—
—
(88
)
649
Stock-based compensation expense
4,662
4,176
4,739
11,304
Total operating expenses
$
43,393
$
34,232
$
121,169
$
98,514
Operating income
15,288
10,847
30,631
22,456
Other (income) expense
Change in fair value of Alignment Shares
liability
(10,214
)
(3,508
)
(48,172
)
(23,331
)
Other expense (income), net
210
339
(1,608
)
1,569
Interest expense, net
21,783
9,180
55,841
30,150
Total other expense, net
$
11,779
$
6,011
$
6,061
$
8,388
Income before income taxes
$
3,509
$
4,836
$
24,570
$
14,068
Income tax benefit (expense)
5,100
1,940
21,243
(77
)
Net income
$
8,609
$
6,776
$
45,813
$
13,991
Net (loss) income attributable to
noncontrolling interests and redeemable noncontrolling
interests
(9,029
)
1,446
(16,979
)
(3,781
)
Net income attributable to Altus Power,
Inc.
$
17,638
$
5,330
$
62,792
$
17,772
Net income per share attributable to
common stockholders
Basic
$
0.11
$
0.03
$
0.39
$
0.11
Diluted
$
0.11
$
0.03
$
0.38
$
0.11
Weighted average shares used to compute
net income per share attributable to common stockholders
Basic
159,990,880
158,719,684
159,641,018
158,687,373
Diluted
164,393,794
160,198,154
165,720,558
160,965,682
Altus Power, Inc.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited)
(In thousands, except share
and per share data)
As of September 30,
2024
As of December 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
96,899
$
160,817
Current portion of restricted cash
1,334
45,358
Accounts receivable, net
34,326
17,100
Other current assets
6,211
5,522
Total current assets
138,770
228,797
Restricted cash, noncurrent portion
13,094
12,752
Property, plant and equipment, net
1,835,399
1,619,047
Intangible assets, net
49,169
47,588
Operating lease asset
183,677
173,804
Derivative assets
—
530
Deferred tax assets, net
12,303
—
Other assets
7,663
7,831
Total assets
$
2,240,075
$
2,090,349
Liabilities, redeemable noncontrolling
interests, and stockholders' equity
Current liabilities:
Accounts payable
$
8,914
$
7,338
Construction payable
11,356
14,108
Interest payable
13,885
8,685
Purchase price payable, current
11,379
9,514
Due to related parties
90
51
Current portion of long-term debt, net
143,449
39,611
Operating lease liability, current
5,478
6,861
Contract liability, current
2,078
2,940
Other current liabilities
34,179
17,402
Total current liabilities
230,808
106,510
Alignment Shares liability
12,320
60,502
Long-term debt, net of unamortized debt
issuance costs and current portion
1,177,991
1,163,307
Intangible liabilities, net
17,088
18,945
Asset retirement obligations
19,577
17,014
Operating lease liability, noncurrent
189,604
180,701
Contract liability, noncurrent
5,978
5,620
Deferred tax liabilities, net
—
9,831
Other long-term liabilities
2,869
2,908
Total liabilities
$
1,656,235
$
1,565,338
Commitments and contingent liabilities
Redeemable noncontrolling interests
21,817
26,044
Stockholders' equity
Common stock $0.0001 par value;
988,591,250 shares authorized as of September 30, 2024, and
December 31, 2023; 159,989,890 and 158,999,886 shares issued and
outstanding as of September 30, 2024 and December 31, 2023,
respectively
16
16
Additional paid-in capital
491,264
485,063
Retained earnings (accumulated
deficit)
7,518
(55,274
)
Accumulated other comprehensive income
16,012
17,273
Total stockholders' equity
$
514,810
$
447,078
Noncontrolling interests
47,213
51,889
Total equity
$
562,023
$
498,967
Total liabilities, redeemable
noncontrolling interests, and stockholders' equity
$
2,240,075
$
2,090,349
Altus Power, Inc.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
Nine months ended September
30,
2024
2023
Cash flows from operating
activities
Net income
$
45,813
$
13,991
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation, amortization and
accretion
50,447
38,054
Non-cash lease transactions
(1,265
)
467
Deferred tax (benefit) expense
(21,296
)
67
Amortization of debt discount and
financing costs
4,003
2,657
Change in fair value of Alignment Shares
liability
(48,172
)
(23,331
)
Remeasurement of contingent consideration,
net
(2,379
)
150
(Gain) loss on disposal of property, plant
and equipment
(88
)
649
Reclassification of realized gain on cash
flow hedge to net income
(1,270
)
—
Stock-based compensation expense
4,541
11,245
Other
(2,002
)
243
Changes in assets and liabilities,
excluding the effect of acquisitions
Accounts receivable
(15,741
)
(5,668
)
Due to related parties
39
(59
)
Derivative assets
530
(52
)
Other assets
246
3,236
Accounts payable
1,780
2,245
Interest payable
5,200
4,059
Contract liability
344
346
Other liabilities
(371
)
797
Net cash provided by operating
activities
20,359
49,096
Cash flows used for investing
activities
Capital expenditures
(57,640
)
(89,344
)
Payments to acquire renewable energy
businesses, net of cash and restricted cash acquired
(119,240
)
(313,292
)
Payments to acquire renewable energy
facilities from third parties, net of cash and restricted cash
acquired
(84,999
)
(28,259
)
Proceeds from disposal of property, plant
and equipment
266
2,350
Net cash used for investing activities
(261,613
)
(428,545
)
Cash flows provided by financing
activities
Proceeds from issuance of long-term
debt
211,451
311,642
Repayment of long-term debt
(94,782
)
(41,900
)
Payment of debt issuance costs
(1,232
)
(2,969
)
Payment of deferred purchase price
payable
(8,102
)
(4,531
)
Payment of contingent consideration
(5,793
)
—
Contributions from noncontrolling
interests
16,176
8,347
Redemption of noncontrolling interests
(3,191
)
—
Redemption of redeemable noncontrolling
interests
—
(3,224
)
Distributions to noncontrolling
interests
(4,300
)
(3,326
)
Proceeds from transfer of investment tax
credits related to noncontrolling interests
23,427
—
Net cash provided by financing
activities
133,654
264,039
Net decrease in cash, cash equivalents,
and restricted cash
(107,600
)
(115,410
)
Cash, cash equivalents, and restricted
cash, beginning of period
218,927
199,398
Cash, cash equivalents, and restricted
cash, end of period
$
111,327
$
83,988
Nine months ended September
30,
2024
2023
Supplemental cash flow
disclosure
Cash paid for interest
$
46,556
$
25,017
Cash paid for taxes
34
85
Non-cash investing and financing
activities
Asset retirement obligations
$
1,792
$
4,291
Debt assumed through acquisitions
—
7,883
Noncontrolling interest assumed through
acquisitions
2,100
13,500
Redeemable noncontrolling interest assumed
through acquisitions
(100
)
11,341
Accrued distributions to noncontrolling
interests
1,018
—
Acquisitions of property and equipment
included in construction payable
—
1,730
Conversion of Alignment Shares into common
stock
10
11
Deferred purchase price payable
—
7,606
Non-GAAP Financial Reconciliation
Reconciliation of GAAP reported Net Income to non-GAAP adjusted
EBITDA:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
(in thousands)
(in thousands)
Reconciliation of Net income to
Adjusted EBITDA:
Net income
$
8,609
$
6,776
$
45,813
$
13,991
Income tax (benefit) expense
(5,100
)
(1,940
)
(21,243
)
77
Interest expense, net
21,783
9,180
55,841
30,150
Depreciation, amortization and accretion
expense
17,151
13,719
50,447
38,054
Stock-based compensation expense
4,662
4,176
4,739
11,304
Acquisition and entity formation costs
765
268
2,281
3,128
(Gain) loss on fair value remeasurement of
contingent consideration, net
(900
)
50
(2,379
)
150
(Gain) loss on disposal of property, plant
and equipment
—
—
(88
)
649
Change in fair value of Alignment Shares
liability
(10,214
)
(3,508
)
(48,172
)
(23,331
)
Other expense (income), net
210
339
(1,608
)
1,569
CEO transition costs
—
—
2,203
—
Adjusted EBITDA
$
36,966
$
29,060
$
87,834
$
75,741
Reconciliation of non-GAAP adjusted EBITDA margin:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
(in thousands)
(in thousands)
Reconciliation of Adjusted EBITDA
margin:
Adjusted EBITDA
$
36,966
$
29,060
$
87,834
$
75,741
Operating revenues, net
58,681
45,079
151,800
120,970
Adjusted EBITDA margin
63
%
64
%
58
%
63
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241112730308/en/
Altus Power Contact for Investor or Media Inquiries:
Alison Sternberg, Head of Investor Relations
InvestorRelations@altuspower.com
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