Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Altus Power Inc (AMPS, Financial) reported a 13% increase in revenue for the second quarter of 2024, driven by the growth of its portfolio and increased sales of clean electricity.
- The company generated 364 million kilowatt hours of clean electricity from its nearly 1-gigawatt portfolio of operating assets.
- Altus Power Inc (AMPS) has a diversified portfolio of nearly 500 operating assets, providing a robust and growing revenue stream.
- The company benefits from a flexible platform that allows it to onboard projects at any stage, enhancing its competitive advantage.
- Altus Power Inc (AMPS) has a significant portion (54%) of its power purchase agreements at floating rates, allowing it to benefit from rising utility rates.
Negative Points
- The company revised its 2024 revenue and adjusted EBITDA guidance downward due to slower-than-expected megawatt additions and interconnection delays.
- Altus Power Inc (AMPS) faces challenges with utility and interconnection delays, impacting the timing of new project operationalization.
- The company has accumulated community solar credits in excess of current customer subscription levels, leading to deferred revenue recognition.
- There is a need for increased education and awareness about the benefits of commercial solar, which could slow down client engagement.
- The top-down strategy through the CBRE partnership was not as effective, leading to longer sell-in periods and bureaucracy.
Q & A Highlights
Q: How does Altus Power plan to educate enterprises and develop relationships with them?
A: Gregg Felton, Co-CEO, explained that Altus Power is working closely with CBRE's Head of Sustainability to restructure enterprise engagements. The focus is on long-term advisory relationships rather than narrow solar-specific engagements. Altus Power will be featured as a solar solution within CBRE's broader sustainability relationships. Additionally, they are adopting a market-specific approach, targeting geographies with high power prices and opportunities for commercial-scale solar.
Q: What percentage of Altus Power's contracts are at floating rates, and how does this impact the company?
A: Dustin Weber, CFO, stated that 54% of Altus Power's Power Purchase Agreements (PPAs) are at floating rates. This means that as prevailing utility rates increase, Altus Power benefits, providing a tailwind to their operating portfolio.
Q: What markets is Altus Power targeting for expansion, and how are they approaching landlords and tenants?
A: Gregg Felton highlighted that Altus Power is focusing on markets like Maryland, Maine, and Illinois, which are expanding opportunities for community solar. They are working directly with landlords and through partners like CBRE to identify attractive sites. Brett Phillips will lead early-stage development efforts to engage landlords directly.
Q: Why was there a reduction in the 2024 guidance, and are there delays in new build projects?
A: Dustin Weber noted that the reduction is due to timing issues, particularly utility and interconnection delays. Some projects have been pushed out, but this is more about timing than the number of megawatts. Gregg Felton added that while there are challenges in predicting operational timelines, the pipeline of opportunities remains robust.
Q: How does Altus Power view the mix of operating versus M&A assets over time?
A: Dustin Weber mentioned that historically, about 75% of growth has come from acquiring operating projects and 25% from new builds. This mix is expected to continue, with acquisitions being a key feature of their growth plan. Gregg Felton added that there is a robust flow of development opportunities, and market consolidation is positively impacting their pipeline.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
