Tigo Energy Reports Second Quarter 2024 Financial Results

Rhea-AI Summary

Tigo Energy reported its second quarter 2024 financial results with a revenue of $12.7 million, marking an 81.5% decrease from the same period last year. The GAAP gross margin stood at 30.4%, while the GAAP net loss was $11.3 million. The company also recorded an adjusted EBITDA loss of $6.4 million. Cash, cash equivalents, and marketable securities totaled $20.2 million at the end of the quarter.

Tigo Energy shipped 378,000 MLPE, or approximately 144MW DC assuming an average panel size of 400W. A notable achievement was being selected for a 142MWp Solar Installation in Spain.

For the third quarter of 2024, Tigo expects revenues to be between $13.0 million and $16.0 million with an adjusted EBITDA loss ranging from $6.5 million to $8.5 million.

Positive

• Sequential revenue growth of 29.6%.
• Selected for a 142MWp Solar Installation in Spain.
• Introduction of the TS4-X product family received positively.
• Reduction in operating expenses by 28.8%.

Negative

• 81.5% decrease in revenue compared to the same period last year.
• Gross profit decreased by 85.1%.
• Net loss of $11.3 million.
• Adjusted EBITDA loss of $6.4 million.
• Cash declined by $1.8 million sequentially.

Insights

Financial Analyst

Tigo Energy's Q2 2024 results paint a challenging picture. Revenue of $12.7 million represents a staggering 81.5% YoY decline, though there's a modest 29.6% sequential improvement. The GAAP net loss of $11.3 million and Adjusted EBITDA loss of $6.4 million underscore ongoing profitability struggles.

However, there are silver linings. The gross margin of 30.4%, while down from last year, remains respectable. The company's cost-reduction efforts and new TS4-X product line could drive future improvements. The 142MWp order from Spain is a significant win, potentially signaling growing traction in utility-scale projects.

With $20.2 million in cash and equivalents, Tigo's runway is concerning given the current burn rate. Investors should closely monitor the projected path to breakeven at $17-19 million quarterly revenue for cash and $33-35 million for Adjusted EBITDA.

Market Research Analyst

Tigo's results reflect broader solar industry headwinds. The 81.5% YoY revenue decline aligns with the "prolonged industry recovery" mentioned. However, Tigo's 29.6% sequential growth outpaces some competitors, suggesting potential market share gains.

The company's focus on the utility sector and the significant Spanish order indicate a strategic pivot that could yield dividends as the market recovers. The positive reception of the TS4-X product line is encouraging, potentially positioning Tigo ahead of competitors in innovation.

Management's guidance for Q3 ($13-16 million revenue) suggests continued sequential growth, albeit modest. Investors should watch for signs of the anticipated stronger H2 2024, which will be important for Tigo's trajectory. The company's ability to outperform the sluggish market will be a key differentiator moving forward.

Tech Expert

Tigo's technological innovations are a bright spot amid financial challenges. The new TS4-X product family appears to be gaining traction, potentially offering a competitive edge. The selection for the 142MWp installation in Spain validates Tigo's capabilities in large-scale projects, particularly in safety-critical applications.

The introduction of EI Professional with its unlimited seat subscription model could be a game-changer for solar installers. This portfolio-wide dashboard for monitoring installation health, performance and commissioning time data addresses a important need in the industry, potentially driving customer loyalty and recurring revenue.

Tigo's continued investment in R&D despite financial pressures is commendable. The focus on scalability and strategic initiatives suggests a long-term vision that could pay off as the market recovers. However, the company must balance innovation with financial prudence to ensure sustainability.

CAMPBELL, Calif.--(BUSINESS WIRE)-- Tigo Energy, Inc. ("Tigo", or the "Company") (NASDAQ: TYGO), a leading provider of intelligent solar and energy storage solutions, today reported unaudited financial results for the second quarter ended June 30, 2024 and financial guidance for the third quarter ending September 30, 2024.

Recent Financial and Operational Highlights

• Quarterly revenue of $12.7 million
• GAAP gross margin of 30.4%
• GAAP operating loss of $8.4 million
• GAAP net loss of $11.3 million
• Adjusted EBITDA loss of $6.4 million
• Cash, cash equivalents, and marketable securities of $20.2 million
• Shipped 378,000 MLPE, or approximately 144MW DC assuming an average panel size of 400W
• Selected for a 142MWp Solar Installation, delivering best-in-class safety for large Commercial & Industrial solar installation in Spain
• Introduced EI Professional, offering an unlimited seat subscription that provides a portfolio-wide dashboard for solar installers to review health, performance and commissioning time data for their installations
• Welcomed Midnite Solar as a new licensee for Tigo’s rapid shutdown technology

Management Commentary

"We experienced steady sequential growth in the second quarter of 2024 as we continue to navigate the prolonged industry recovery," said Zvi Alon, Chairman and CEO of Tigo. "Our financial results are within our previously stated guidance and we continue to build off our progress this quarter. Our newly launched TS4-X product family has been positively received by the market and we received our largest order in history for a 142 MWp installation in Spain. We believe our recent market win sets us up for future success and our TS4-X introduction has positioned us ahead of the market during this extended recovery period.

While Tigo is not immune to macroeconomic dependencies, we expect that our robust product portfolio, and recent gains within the utility sector for our MLPE products, will allow us to achieve increased revenue growth in a sluggish environment and positions us well against our competitors as we move into the second half of 2024. We believe the scalability we have built into our business model, coupled with our strategic initiatives and TS4-X product offering, give us a strong foundation to outgrow the industry. We expect our revenues and profitability to slowly continue their upward trajectory as we move closer to the end of the year, driven by the strong market reception and anticipated increased demand for our solutions. We look forward to a stronger second half of 2024.”

“Our cost-reduction efforts are starting to materialize and we expect they will be fully reflected in our financials during the second half of the year,” stated Bill Roeschlein, Chief Financial Officer of Tigo. “Considering our current supply of inventory on-hand, we expect to continue progressing toward a cash break-even point at a quarterly revenue level of approximately $17 million to $19 million and an adjusted EBITDA break-even point at a quarterly revenue level of approximately $33 million to $35 million on a normalized basis. We believe that our revenues will continue to improve in the second half of the year based on expectations for a recovery in the industry, which would allow us to achieve profitable growth in the near future.”

Second Quarter 2024 Financial Results

Results compare the 2024 fiscal second quarter ended June 30, 2024 to the 2023 fiscal second quarter ended June 30, 2023, unless otherwise indicated.

• Revenues totaled $12.7 million, an 81.5% decrease from $68.8 million. On a sequential basis, revenues increased by $2.9 million, or 29.6%.
• Gross profit totaled $3.9 million, or 30.4% of total revenue, an 85.1% decrease from $25.9 million, or 37.6% of total revenue.
• Total operating expenses totaled $12.3 million, a 28.8% decrease from $17.2 million.
• Net loss totaled $11.3 million, compared to a net loss of $22.2 million.
• Adjusted EBITDA loss totaled $6.4 million, compared to an adjusted EBITDA of $13.6 million.
• Cash, cash equivalents, and marketable securities totaled $20.2 million at June 30, 2024. On a sequential basis, cash declined by $1.8 million.

Third Quarter 2024 Outlook

The Company also provides guidance for the third quarter ending September 30, 2024 as follows:

• Revenues are expected to be within the range of $13.0 million to $16.0 million.
• Adjusted EBITDA loss is expected to be within the range of $6.5 million to $8.5 million.

Actual results may differ materially from the Company’s guidance as a result of, among other things, the factors described below under “Forward-Looking Statements”.

Conference Call

Tigo management will hold a conference call today, August 6, 2024, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss these results. Company CEO Zvi Alon and CFO Bill Roeschlein will host the call, followed by a question-and-answer period.

Registration Link: Click here to register

Please register online at least 10 minutes prior to the start time. If you have any difficulty with registration or connecting to the conference call, please contact Gateway Group at (949) 574-3860.

The conference call will be broadcast live and available for replay here and via the Investor Relations section of Tigo’s website.

About Tigo Energy, Inc.

Founded in 2007, Tigo is a worldwide leader in the development and manufacture of smart hardware and software solutions that enhance safety, increase energy yield, and lower operating costs of residential, commercial, and utility-scale solar systems. Tigo combines its Flex MLPE (Module Level Power Electronics) and solar optimizer technology with intelligent, cloud-based software capabilities for advanced energy monitoring and control. Tigo MLPE products maximize performance, enable real-time energy monitoring, and provide code-required rapid shutdown at the module level. The Company also develops and manufactures products such as inverters and battery storage systems for the residential solar-plus-storage market. For more information, please visit www.tigoenergy.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about our ability to increase our revenues, reach cash flow break-even, adjusted EBITDA break-even, become profitable, and our overall long-term growth prospects, expectations regarding a recovery in our industry, including the timing thereof, current and future inventory levels and its impact on future financial results, statements about demand for our products, our competitive position, and our ability to penetrate new markets and expand our market share, including expansion in international markets, our continued expansion of and investments in our product portfolio, and future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “will allow us to” “is anticipated,” “estimated,” “expected”, “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. These forward-looking statements are based upon the current beliefs and expectations of Tigo’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.

In addition to factors previously disclosed, or that will be disclosed in, our reports filed with the SEC, factors which may cause actual results to differ materially from current expectations include, but are not limited to, our ability to effectively develop and sell our product offerings and services, our ability to compete in the highly-competitive and evolving solar industry; our ability to manage risks associated with macroeconomic conditions, seasonal trends and the cyclical nature of the solar industry, including the current downturn; whether we continue to grow our customer base; whether we continue to develop new products and innovations to meet constantly evolving customer demands; the timing and level of demand for our solar energy solutions; changes in government subsidies and economic incentives for solar energy solutions; our ability to acquire or make investments in other businesses, patents, technologies, products or services to grow the business and realize the anticipated benefits therefrom; our ability to meet future liquidity requirements; our ability to respond to fluctuations in foreign currency exchange rates and political unrest and regulatory changes in the U.S. and international markets into which we expand or otherwise operate in; our failure to attract, hire retain and train highly qualified personnel in the future; and if we are unable to maintain key strategic relationships with our partners and distributors.

Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the forward-looking statements contained herein are reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond our control. All information set forth herein speaks only as of the date hereof, and we disclaim any intention or obligation to update any forward-looking statements as a result of new information, future developments or otherwise occurring after the date of this communication.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measure: adjusted EBITDA. The presentation of this financial measure 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 use adjusted EBITDA for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We define adjusted EBITDA, a non-GAAP financial measure, as earnings (loss) before interest and other expenses, net, income tax expense (benefit), depreciation and amortization, as adjusted to exclude stock-based compensation and merger transaction related expenses. We believe that adjusted EBITDA provides helpful supplemental information regarding our performance by excluding certain items that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to adjusted EBITDA in assessing our performance and when planning, forecasting, and analyzing future periods. Adjusted EBITDA also facilitates management’s internal comparisons to our historical performance and comparisons to our competitors’ operating results. We believe adjusted EBITDA is useful to investors both because it (i) allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (ii) is used by our institutional investors and the analyst community to help them analyze the health of our business.

The items excluded from adjusted EBITDA may have a material impact on our financial results. Certain of those items are non-recurring, while others are non-cash in nature. Accordingly, adjusted EBITDA is presented as supplemental disclosure and should not be considered in isolation of, as a substitute for, or superior to, the financial information prepared in accordance with GAAP.

There are a number of limitations related to the use of non-GAAP financial measures. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluating these non-GAAP financial measures together with their relevant financial measures in accordance with GAAP.

We refer investors to the reconciliation adjusted EBITDA to net income (loss) included below. A reconciliation for adjusted EBITDA provided as guidance (including our projected break-even point) is not provided because, as a forward-looking statement, such reconciliation is not available without unreasonable effort due to the high variability, complexity, and difficulty of estimating certain items such as charges to stock-based compensation expense and currency fluctuations which could have an impact on our consolidated results.

Tigo Energy, Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited)
		June 30, 2024				December 31, 2023
ASSETS
Current assets
Cash and cash equivalents		$	14,943			$	4,405
Restricted cash			200				—
Marketable securities, short-term			5,214				26,806
Accounts receivable, net			6,917				6,862
Inventory			51,311				61,401
Prepaid expenses and other current assets			4,509				5,236
Total current assets			83,094				104,710
Property and equipment, net			3,191				3,458
Operating right-of-use assets			2,010				2,503
Marketable securities, long-term			—				1,977
Intangible assets, net			2,057				2,192
Other assets			768				728
Goodwill			12,209				12,209
Total assets		$	103,329			$	127,777
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	7,085			$	15,685
Accrued expenses and other current liabilities			6,639				8,681
Deferred revenue, current portion			275				335
Warranty liability, current portion			539				526
Operating lease liabilities, current portion			936				1,192
Total current liabilities			15,474				26,419
Warranty liability, net of current portion			5,238				5,106
Deferred revenue, net of current portion			704				466
Long-term debt, net of unamortized debt discount and issuance costs			36,040				31,570
Operating lease liabilities, net of current portion			1,133				1,392
Total liabilities			58,589				64,953
Stockholders’ equity
Common stock			6				6
Additional paid-in capital			143,364				138,657
Accumulated deficit			(98,607	)			(75,780	)
Accumulated other comprehensive loss			(23	)			(59	)
Total stockholders’ equity			44,740				62,824
Total liabilities and stockholders’ equity		$	103,329			$	127,777

Tigo Energy, Inc. Condensed Consolidated Statement of Income (in thousands, except share and per share data) (unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net revenue		$	12,701			$	68,826			$	22,503			$	118,884
Cost of revenue			8,834				42,920				15,870				74,609
Gross profit			3,867				25,906				6,633				44,275
Operating expenses:
Research and development			2,704				2,424				5,175				4,638
Sales and marketing			4,055				5,163				8,658				9,935
General and administrative			5,511				9,654				10,291				13,217
Total operating expenses			12,270				17,241				24,124				27,790
(Loss) income from operations			(8,403	)			8,665				(17,491	)			16,485
Other expenses (income):
Change in fair value of preferred stock warrant and contingent shares liability			41				2,608				(155	)			3,120
Change in fair value of derivative liability			—				38,251				—				38,251
Loss on debt extinguishment			—				—				—				171
Interest expense			2,862				1,587				5,688				2,365
Other income, net			(1	)			(672	)			(213	)			(1,223	)
Total other expenses, net			2,902				41,774				5,320				42,684
Loss before income tax expense			(11,305	)			(33,109	)			(22,811	)			(26,199	)
Income tax expense (benefit)			16				(10,933	)			16				(10,933	)
Net loss			(11,321	)			(22,176	)			(22,827	)			(15,266	)
Cumulative dividends on convertible preferred stock			—				(1,248	)			—				(3,399	)
Net loss attributable to common stockholders		$	(11,321	)		$	(23,424	)		$	(22,827	)		$	(18,665	)
Loss per common share
Basic		$	(0.19	)		$	(0.84	)		$	(0.38	)		$	(1.09	)
Diluted		$	(0.19	)		$	(0.84	)		$	(0.38	)		$	(1.09	)
Weighted-average common shares outstanding
Basic			60,363,680				27,750,374				59,874,991				17,174,936
Diluted			60,363,680				27,750,374				59,874,991				17,174,936

Tigo Energy, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)
		Six Months Ended June 30,
		2024				2023
Cash Flows from Operating activities:
Net loss		$	(22,827	)		$	(15,266	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			612				536
Reserve for inventory obsolescence			458				410
Change in fair value of preferred stock warrant and contingent shares liability			(155	)			3,120
Change in fair value of derivative liability			—				38,251
Deferred tax benefit			—				(11,147	)
Non-cash interest expense			4,470				982
Stock-based compensation			4,208				863
Allowance for credit losses			(1,434	)			170
Loss on debt extinguishment			—				171
Non-cash lease expense			619				415
Accretion of interest on marketable securities			(163	)			(204	)
Changes in operating assets and liabilities:
Accounts receivable			1,379				(30,057	)
Inventory			9,632				(26,134	)
Prepaid expenses and other assets			687				167
Accounts payable			(8,392	)			30,254
Accrued expenses and other liabilities			(1,648	)			2,267
Deferred revenue			178				(500	)
Warranty liability			145				1,142
Operating lease liabilities			(641	)			(374	)
Net cash used in operating activities		$	(12,872	)		$	(4,934	)
Investing activities:
Purchase of marketable securities			—				(50,221	)
Acquisition of fSight			—				(16	)
Purchase of intangible assets			—				(450	)
Purchase of property and equipment			(418	)			(1,510	)
Disposals of property and equipment			—				73
Sales and maturities of marketable securities			23,768				—
Net cash provided by (used in) investing activities		$	23,350			$	(52,124	)
Financing activities:
Proceeds from Convertible Promissory Note			—				50,000
Repayment of from Series 2022-1 Notes			—				(20,833	)
Payment of financing costs			—				(354	)
Proceeds from Business Combination			—				2,238
Proceeds from exercise of stock options			260				106
Payment of tax withholdings on stock options			—				(91	)
Net cash provided by financing activities		$	260			$	31,066
Net increase (decrease) in cash, cash equivalents and restricted cash			10,738				(25,992	)
Cash, cash equivalents and restricted cash at beginning of period			4,405				37,717
Cash, cash equivalents and restricted cash at end of period		$	15,143			$	11,725

Tigo Energy, Inc. Non-GAAP Financial Measures (in thousands) (unaudited)
Reconciliation of Net Loss (GAAP) to Adjusted EBITDA (Non-GAAP)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net loss		$	(11,321	)		$	(22,176	)		$	(22,827	)		$	(15,266	)
Adjustments:
Total other expenses, net			2,902				41,774				5,320				42,684
Income tax expense (benefit)			16				(10,933	)			16				(10,933	)
Depreciation and amortization			302				294				612				536
Stock-based compensation			1,703				497				4,208				863
M&A transaction expenses			—				4,113				—				4,246
Adjusted EBITDA		$	(6,398	)		$	13,569			$	(12,671	)		$	22,130

We encourage investors and others to review our financial information in its entirety and not to rely on any single financial measure.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240806357826/en/

Investor Relations Contacts

Matt Glover or Ralf Esper

Gateway Group, Inc.

(949) 574-3860

TYGO@gateway-grp.com

Source: Tigo

FAQ

What were Tigo Energy's revenues for the second quarter of 2024?

Tigo Energy reported revenues of $12.7 million for the second quarter of 2024.

How much did Tigo Energy's revenue decrease compared to the second quarter of 2023?

Tigo Energy's revenue decreased by 81.5% compared to the second quarter of 2023.

What is Tigo Energy's third-quarter 2024 revenue guidance?

Tigo Energy expects third-quarter 2024 revenues to be between $13.0 million and $16.0 million.

What was Tigo Energy's GAAP net loss for the second quarter of 2024?

Tigo Energy's GAAP net loss for the second quarter of 2024 was $11.3 million.

What is the expected adjusted EBITDA loss for Tigo Energy in the third quarter of 2024?

The expected adjusted EBITDA loss for Tigo Energy in the third quarter of 2024 is between $6.5 million and $8.5 million.