Tigo Energy, Inc. Price & Performance (TYGO)

We'd like to remind everyone that some of the matters we'll discuss on this call, including our expected business outlook, our ability to increase our revenues and become profitable, our overall long term growth prospects, expectations regarding recovery in our industry, including the timing thereof, statements about our demand for our products, our competitive position and market share, our current and future inventory levels, charges and reserves, their impact on future financial results, inventory supply, its impact on our customer shipments and adjusted EBITDA for the our revenue for the and full year of 2025 and 2024 our ability to penetrate new markets and expand our market share including expansion in international markets and investments in our product portfolio, are forward looking and as such are subject to known and unknown risks and uncertainties including but not limited to those factors described in today's press release and described in the Risk Factors section of our most recent annual report on Form 10 ks and other reports we may file with the SEC. From time to time. These risks and uncertainties could cause actual results to differ materially from those expressed on this call, These forward looking statements are made only as of a date when the date as of when made.

During our call today, we will reference certain non GAAP financial measures. We include non GAAP to GAAP reconciliations in our press release furnished as an exhibit to our Form 8 ks, for or superior to measures of financial performance prepared in accordance with GAAP. Finally, I would like to remind everyone that this conference call is being webcast and a recording will be made available for replay on TiGo's Investor Relations website at investors.tigeonenergy.com Tigo. With that, I'd like to now turn the call over to Tygo's CEO, Tigo Alon. Thank you, Bill. To begin today's discussion, I will highlight key areas in our recent performance to wrap up the past year and provide some commentary on recent operational highlights Before turning the call over to our CFO, Bill Lozcheline, He will discuss our financial results, For the in more depth as well as provide our guidance for the and full year of 2025. After that, I will share some closing remarks tell you about our outlook for the year 2025 and then open the call for Let's get started. I'm pleased to report that we ended 2024 with yet another sequential quarterly revenue growth, making it 4 out of 4 for the fiscal year.

Given how 2023 ended, I'm exceptionally proud of what our team at Ty Group has managed to accomplish. To give some geographical color on the results, we saw positive sales growth, especially within the EMEA and Americas regions during the quarter. Expanding our sales footprint into markets and doubling down our efforts in key markets has remained an area of focus for us. To share only a few recent highlights, our team has spent time in Malaysia and Hawaii to educate, train and sell our product portfolio. In the we shipped 480000 MLP units to Reno 2024 MLP shipped total to 1500000.0 units. [indiscernible] continues to build momentum in the marketplace and we expect this trend to continue in 2025. Additionally, we achieved multiple utility scale wins in 2024 and our pipeline in this sector of the market continues to grow. Another key focus area is within our AI software solution where our Predict plus AI based energy consumption and production platform continues to grow We announced yesterday since the Predict Plus platform has gone from 15000 to 140000 meters under management and covers a total of 600 gigawatt hour of energy at year end. [indiscernible] into Europe and North America, we are bringing machine learning to energy analytics and predictions to a new standard for energy forecasting.

Our annual recurring revenue or ARR, now stands above $1,000,000 per yield and we expect it will continue to grow in 2025. Additionally, We just recently announced another great milestone Since the inception of the program, GreenGlobe has now reached 1000 site arrangements engagements globally including over 700 C and I installations and over 300 residential solar installations. We are excited to see our efforts towards the total quality SOLAR starting to pay off.

And with that, I would like to turn it over to Bill. Bill? Thank you, Zvi. Before I start reviewing the results of the would like to address the inventory reserve charges that are significantly impacting many line items in our income statement as they are accounted for in the cost of revenue. In 2024, our incorporates current and future expectations of the market environment. Now turning to the financial results for the ended Dec. 31, 2024. Revenue for the increased 86.8% to $1,730,000,0.0 from $920,000,0.0 in the prior year period. On a sequential basis, revenues increased 21.3% with improved results coming from many countries in the EMEA and Americas regions. Including The U. S. And Germany, along with some recovery in Italy. By region, EMEA revenue was $1,120,000,0.0 or 65% of total revenues, and a 29.3% sequential increase Americas revenue was $460,000,0.0 or 27% of total revenues and a 57.2% sequential increase. And APAC revenue was 150,000,0.0 or 9% of total revenues and a decline of 44% sequentially, Gross loss in the was $1,260,000,0.0 or negative 72.7% of revenue compared to gross profit of $290,000,0.0 or 31.1% of revenue in the comparable year ago period. The year over year decline was primarily due to the previously mentioned inventory charge of $1,950,000,0.0 Operating expenses for the to $1,160,000,0.0 compared to $1,640,000,0.0 in the prior year period.

The decline was driven primarily by our previously announced cost cutting efforts. Operating loss for the increased by 7,7.9 percent $2,410,000,0.0 compared to $1,350,000,0.0 in the prior year period.

GAAP net loss for the was $2,680,000,0.0 compared to a net loss of $1,480,000,0.0 in the prior year period. While we recorded a higher net loss on a GAAP basis for the compared to the prior year period, absent the inventory charge, our results reflect progress towards profitability on a non GAAP basis. Adjusted EBITDA loss in the increased 90.4% to 2020, $2,210,000,0.0 compared to an adjusted EBITDA loss of $1,160,000,0.0 in dollars in the prior year period. As a reminder, adjusted EBITDA is a non GAAP measure that represents net loss as adjusted for interest and other expenses income tax expense, depreciation, amortization, stock based compensation and M and A transaction expenses. Primary shares outstanding were $6,080,000,0.0 for the Turning to the balance sheet. Accounts receivable net decreased this quarter to $8,000,000 compared to $880,000,0.0 last quarter, and increased from $690,000,0.0 in the year ago comparable period. Inventories net decreased by $2,480,000,0.0 or 53% to 2020 to 22,000,000 compared to $4,680,000,0.0 last quarter and $6,140,000,0.0 in the year comparable period. Cash, cash equivalents and short- and long term marketable securities totaled $1,990,000,0.0 at Dec. 31, 2024, by $400,000 as we continue to make progress on reducing our inventory and working capital.

Turning now to our financial outlook for our and full year of 2025. As a reminder, Tygo provides quarterly guidance revenue as well as adjusted EBITDA as we believe that these metrics to be key indicators for the overall performance of our business. For the we expect revenues We expect revenues in the ended March '31, 2025 to range between $17,000,000 and $19,000,000 We expect adjusted EBITDA loss to range For the full year of 2025, we expect revenues to range between $85,000,000 and $100,000,000 That completes my summary. I'd like to now turn the call back over to Zvi for final remarks. Thanks, Bill.

As we look ahead, I can say that the industry still faces headwinds But our track record over the past year 2024 makes us believe that our vast water portfolio solutions allows us to mitigate the industry end market pressure better than others. As demand of our solutions continue to return, we expect revenues to increase steadily throughout the remainder of 2025 After four quarters of sequential top line growth, believe we have enough visibility into what's What's ahead for the company to carefully provide an outlook for the full quarters ahead of us. We anticipate that our quarterly revenues to continue to improve throughout 2025. We firmly believe in the growth prospects of our business and look towards providing additional updates in the coming quarters. With that, operator, please open the call for Q and A. Our first question comes from Eric Stein with Craig Hallum Capital Group. Your line is open. Hi, it's Vijay Bill.

Hello. Hi.

Hello.

So maybe just on the adjusted EBITDA, I know you called out the charge ex that a loss of $260,000,0.0 Can you just remind when you previously guided, were you expecting or factoring a charge into that just noteworthy that at the midpoint excluding the charge you outperformed by $5,000,000 Yes, correct. In the last call, we did say in our guidance that the EBITDA guidance reflected in expectation of additional inventory reserves. That being said, the amount of the inventory reserve ended up being higher than we had initially anticipated during that call. But we feel that the reserve taken is both adequate and necessary. As we move forward. And sticking with the charge, I mean, do you feel like this this kind of covers it? I mean, you're not expecting I guess from the guide, it would imply that you're not expecting a charge in at least.

Right. So, yes, as part of the annual audit obviously, review process, we have to look at the balance sheet in terms of valuation. And at this point, with the reserve taken, we've reserved 90% of energy storage solutions business inventory we're left with a net book value somewhere in around the $210,000,0.0 range. Which we think is adequate and justified given what we expect to sell. Got it. Okay, that's helpful. And then, just looking at OpEx, looks like it came down a little bit more. I'm just curious as you think about guidance, and maybe where you are exiting the year. I mean, do you have I know in the past you've given some some quarterly revenue targets for cash flow positive and EBITDA positive positive. Are those things that you are able to update on this call?

Yes, certainly. So in general, we look to keep the cash OpEx, which is looking at the OpEx and taking out the EBITDA adjustments stop based comp, amortization, depreciation to come up with an OpEx number that is sub-ten million in this past quarter was around a little bit less than 9.5 There was going to be a little bit of lumpiness with where we have the annual audit and expenses related to that and then we have some ebbs and flows as it relates to some litigation expense. But we believe that after we are able to take the OpEx further down somewhat. And with some assistance with the OpEx being lower, along with kind of not having the continual drag of of reserving inventory, which if you recall in and we had And so for primarily for the Tigo ESS Solutions product, Absent that, our margins were mid-30s to was actually 40% So taking that forward, our Our outlook for breakeven EBITDA is more like $25,000,000 to $28,000,000 dollars at that mid-thirty percent to high-thirty percent gross margin range. And our guidance of $85,000,000 to $100,000,000 8.5% to 15.5% sequential growth, which is fairly consistent with what we've delivered thus far.

If you recall, was about 30% and 12/ profitability on an adjusted EBITDA basis and you can you can see that at the low end $85,000,000 that would suggest somewhere more like but the high end that could be if you want to take the midpoint of the guidance, we would still expect to see EBITDA profitability in to be specific, it would be based on our business model going forward, which is $25,000,000 to $28,000,000 with mid-30s margins and that's what we're tracking to and that's also what we're have been delivering in these past two quarters.

Okay. That's great. Thanks a lot. 1 moment for our next question. Our next question comes from Phil Shen with ROTH Capital Partners. Your line is open. Hey guys, thanks for taking the questions.

First 1 is on the 25 guidance.

Can you share what you expect the geographic mix to be?

I know for it was [indiscernible] 2 thirds EMEA And then Americas 27% and then APAC 9 Would you expect that to maintain as we go through the year?

So the answer is in general, the answer is absolutely yes. In the 65% Tigo plus for EMEA and in the 30% give or take for North America, We've seen as I said before, we've seen an increase in those regions also in the last quarter.

Okay. Thank you, Svi. And then in terms of EMEA, I think on the last call, you talked about the top 3 countries being Germany, Italy and The UK. What were the top countries in EMEA for you in And then as we go through 25 What would they be? Thanks.

It's pretty much the same. It's Germany, The UK and [indiscernible] we have not seen any recovery in The Netherlands as an example. We do see some interesting activity in Eastern Europe. But the main the top 3 countries are Germany, number 1 and UK and Italy.

Got it.

And And so what is your outlook for each these countries overall? Our sense is Germany might be a little bit flattish.

I think WoodMac was sharing with us in a recent webinar that it could be down 5% in 2025. After being down 20% in 2024. [indiscernible] but they do see Germany being down significantly in 2026 and beyond.

So with Germany being such a big segment or kind of slice, How do you How would you expect to navigate that? Maybe you disagree with the WoodMac team as well. So can you share the outlooks for these countries? Thanks.

We actually see in Germany a robust market. And it continues to be strong for us. The indications we are getting from the distribution is that at the level that we have been running and increasing day maintained that they see the same continuing for the rest of the year for us.

And also the other side, which is also impressive for us, is UK. UK is really coming very strong for us.

Great. Okay.

Thanks. And then in terms of The U. S. Outlook, there have been There's a big debate on Powerwall 3 and the ramp up and how that can take share from inverters and storage companies And so I was wondering is there an opportunity for you to pair your optimizers with the internal Powerwall 3 inverter.

So have you is that I mean is that something that is workable now and is that an opportunity for you? I see with the Section 48 rules, that require separation to get the domestic content for solar and storage It seems like there could be some Yes. I can tell you we have seen an increase in requests from customers to go with the Power 3. To use it with our products And so we are paying attention to it and we are doing our best to make sure that we obviously comply with Tesla.

To support it. And we do have a good number of installations already with PowerSuite. So we know that in the market, it's actually working well.

And we will see how it continues.

Okay. So Are you being paired up with your fire safety device or is it more your optimizer or Actually, the optimizers. Actually, it's a higher priced unit.

Great.

Okay. So are you able are you qualified to work with the Tesla inverter only [indiscernible] We have installations using the power tool [indiscernible] No, meaning Tesla also sells an inverter.

That is 7 And so I was wondering if you were able to be matched up with them? So the answer is yes, we can. The optimizers can.

Okay, good. So that is maybe an opportunity now that there's the Section 40 eighte requirement to separate solar and storage. Again for domestic? So great. And then shifting, can you share what you think you've talked about the Predict Plus and the opportunity there and that that's growing for you. Most of your business historically has been [indiscernible] generation. And so when you think about your revenue mix for '25 what is the split between utility scale solar and DG? My guess is Utility scale solar is a very small percentage, maybe sub-10s, 5 ish or so But was wondering if you think that can grow to a much bigger percentage On your term.

So as I said in my remarks, we have seen an increase in large scale installations And the 2 we mentioned was the 42 megawatts in Spain which used 100000 of our devices And we also announced another very large scale 97000 devices in Brazil And we don't even release any information on systems which are in the ten, fifteen, 20 megawatts and above. We do see an increase in demand and requirements for those larger systems. I don't want to yet predict percentage wise from the total, but I can tell you it is becoming a more significant component for us. And this is it's true not just in The U. S. And Europe, we've seen Most of our installations in Asia are specific. The majority are C and I and small utility scale systems.

And these are direct sales, right? Not through distribution?

The majority of direct sales sometimes we do deliver to the distribution. But the majority are direct sales.

Okay. And then is the margin profile of the direct sales comparable to your sales into distribution or is it a little bit lighter given the volume?

So what's beautiful about our product, Phil, is that it the same product that we sell to the residential and to the lounge systems and our pricing is not changing. It's the same. Actually, we've kept this price of the unit equal for the last four, five years. We didn't change it. We didn't lower the price of our products.

Great. Okay. Well, look forward to following that Thanks for taking my questions. I'll pass it on. Thank you. 1 moment for our next question. Our next question comes from Sameer Joshi with H. C. H. C. Wainwright. Your line is open. [indiscernible] Many of my questions have been answered, but just digging a little bit into the gross margins, I think Bill you did mention in response to 1 of questions that probably your gross margins were over 40 And so going forward, Do you expect that level of margins because I think your guided mid-30s as during the commentary as well. Just was wondering whether 40 was sort of because of some kind of a product mix or some other reason?

Yes, I think between $35,000,000 and $40,000,000 is where we're tracking. 1 quarter doesn't make for a trend, but again, ex reserve was 36.5%, ex reserve was 40.2%.

So we are [indiscernible] our product set is is set up for that mid third, mid to upper 30s figure. And so we're comfortable with with with that range. The inventory reserve that we've had to take over the past few quarters have dampened that and eliminating uncertainty around that [indiscernible] better explain what the underlying margins should be like and that's That's where they are.

Understood. And then larger pick [indiscernible] And maybe we can understand the guidance. You probably have good very, very good visibility on that. But for the year, what is the level of your confidence and what areas are you looking at when you're looking at this buildup Yes. So we've got 4 quarters behind us here of of sequential growth. And coming out of the downturn in we had 6.5% growth point 1%, So we're giving a conservative but realistic range here. Of a low point of $85,000,000 being 8.5% sequential growth up to $100,000,000 being $1,550,000,0.0 So you just look at what we've done over the last four quarters, you can see that I think we've done our best job to incorporate The high probability of outcomes in 2025. The book of business is continues to remain strong for us. And so we've got confidence that that the range we're providing is a good range. Got it. And just 1 last 1, Is there any impact likely impact of any tariffs that might materialize over the next few quarters that will impact your margins?

So that is a you never say never question. [indiscernible] we moved our production for the most part, a lot of it to Thailand. Back in 2017, 2018 when we went through version [indiscernible] And we have not, had any indication that any of our products would be targeted in any way at this point. So best I can answer is that way.

Thanks for taking my questions and congrats on the progress. Thank you.

At this time, this concludes our At this time, this concludes our question and answer session. I'd like to turn the call back over to Mr. Alon for his closing remarks.

Thanks again everyone for joining us [indiscernible] I especially want to thank our dedicated employees as well as our customers and partners for continuing hard work. I also want to thank the investors for their continued support. Operator, Thank you for joining us Thank you for joining us 1 moment, we do have another person in the queue for a question. Our next question comes from Gus Richard with Northland. Your line is open.

Yes.

Thanks for asking. Thanks for letting me ask questions. Sorry to be at 05:00 Charlie. Just real quick on on the gross margins, I think that's a record for you all. And I just was wondering what drove such strong performance in gross margins in the quarter? There's a couple of points. We continue to improve our cost on our product. And so a lot of work continues to go into costing down the cost of the product and we're continue to expand margin and that's just a continual process that we do.

We've introduced the X as well and the X provides a very healthy margin And so the family of TS4 for us is just on a variable basis, very attractive margins. And so when you get a quarter where you're selling most of most product is TS4s you're going to get the high margins that you're seeing here. Got it. And then you recently signed [indiscernible] large company. And I'm just wondering is some of the visibility that you're getting just channel sales for that customer or I just want to sort of wrap my mind around the visibility for the full year given how dynamic the environment is.

So our visibility, I guess, it we talk about EMEA, is coming from the 3 countries I mentioned with the very strong distributor [indiscernible] which provides us confidence as far as the continuation Obviously, we've seen also an increase in footprint in The U. S. And no, we did not rely just on this last 1 we signed. Even though it will be a contributor as it evolves and continues to grab additional footprint within our offering. But my point is that the visibility is not just based on that 1.

Got it. And then just last 1 for me. In terms of sell in versus sell out and health of the channel, can you just comment on what you see geographically?

I can tell you that I believe that 100% of all the orders we've received for the last two plus quarters our brand new into inventory, which is getting depleted almost in no time.

So we don't have much leftover or any additional inventory in the channel.

Okay.

Alright. Thank you for squeezing me in.

Sorry. Again for being late.

Most welcome.

Mr. Alain, were you off finished with your closing remarks?

Yes, I am.

Okay. Well, I just want to thank everyone for joining us today for Tiago's fourth quarter twenty twenty four earnings conference call. You may now disconnect and have a wonderful day. [indiscernible]