(TYGO)
Operator: Good afternoon. Welcome to Tigo Energy’s Fiscal First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Joining us today are Zvi Alon, CEO; and Bill Roeschlein, CFO. As a reminder, this call is being recorded. I would now like to turn the call over to Bill Roeschlein, Chief Financial Officer.
Bill Roeschlein: Thank you, Karen. And it’s a pleasure to join you from Campbell, California. Also with us is Zvi Alon, our CEO, who is joining us from the Intersolar Conference in Munich, Germany. I’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 in our overall long-term growth prospects, expectations regarding our industry, including the timing thereof, statements about demand for our products, competitive position and market share, the impact of tariffs, our current and future inventory levels, charges, reserves and their impact on future financial results, inventory supply and its impact on our customer shipments, statements about our revenue and adjusted EBITDA for the second quarter of 2025 and our revenue for the full year of fiscal year 2025, 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 that are described in today’s press release and discussed in the Risk section of our most recent annual report on Form 10-K.
Our quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2025, 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 the date they are 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 to exhibit to our Form 8-K. The non-GAAP financial measures provided should not be considered as a substitute for or to the measures of financial performance prepared in accordance with GAAP. Finally, I would like to remind everybody that this conference call is being webcast and a recording will be made available for replay on Tigo’s Investor Relations website at investors.tigoenergy.com.
With that, I’d like to now turn the call over to Tigo’s CEO, Zvi Alon, Zvi?
Zvi Alon : Thank you, Bill. To begin today’s discussion, I will highlight key areas in our recent financial and operational performance and briefly address the current macroeconomic developments before turning the call over to our CFO, Bill Roeschlein. He will discuss our financial results for the first quarter in no debt as well as provide our guidance for the second quarter and the full year of 2025. After that, I will show some closing remarks, tell you about our outlook and then open the call for questions from you and the analysts. I am pleased to report that we ended the first quarter of 2025 with our fifth increase in sequential quarterly revenue growth. Growing 9.1% sequentially and 92.2% in on a year-over-year basis.
In the first quarter of 2025, we reported a total revenue of $18.8 million and shipped 502,000 or 351 megawatts of MLPE. I’m exceptionally proud of what our team here at Tigo has accomplished. To give some geographical color on our results, we saw positive sequential sales growth in EMEA, the Americas and APAC regions. Within the EMEA region, the recovery that began for us as a year ago has now broadened as we saw much stronger results from Italy and the Netherlands. In addition to both the Americas and Asia Pacific regions also grew sequentially in the first quarter. I’m also excited about our recently introduced 22A TS4-A series. Now serving panels up to 125 watts. And joining the TS4 family the highest safety solution, including the unique Tigo multifactor rapid shutdown, demonstrating our commitment to ahead of the module performance.
Given the current developments in Washington, many of you are likely interested in how the latest reciprocal tariff decisions may impact us. As you may know, the majority of Tigo’s revenue occurred outside of the United States. Based on the current reciprocal tariffs announced, we estimated that approximately 5% of our Q1 revenue would have been affected by the China record tariffs of 145%. We also estimate there is approximately 15% of our Q1 revenue would have been affected by 10%, the rest of the world or cyclical tariffs. We are currently working with our supply chain partners to mitigate the effects of these reciprocal tariffs where possible. And with that, I will turn it over to Bill. Bill?
Bill Roeschlein: Thank you, Zvi. Turning now to our financial results for the first quarter ended March 31, 2025. Revenue for the first quarter of 2025 increased 92.2% to $18.8 million from $9.8 million in the prior year period. On a sequential basis, revenues increased 9.1% with improved results coming from many countries in the EMEA and APAC regions, including Italy, Czechia, the Netherlands and the Philippines. By region, EMEA revenue was $11.5 million or 61.3% of total revenues. Americas region — Americas revenue was $4.7 million — and APAC revenue was $2.6 million or 13.6% of total revenues. By product family, quarter of 2025, MLPE revenue represented $16 million of revenue or 84.8% total revenues. GO ESS represented $2 million or 10.7% of total revenues and Predict+ and licensing revenue represented $0.8 million or 4.5% of total revenues during the quarter.
Gross profit in the first quarter of 2025 was $7.2 million or 38.1% of revenue compared to a gross profit of $2.8 million or 28.2% of revenue in the comparable year ago period. Operating expenses for the first quarter declined 5.9% to 11.2% compared to $11.9 million in the prior year period. The decline was driven primarily by our previously announced cost-cutting efforts. Operating loss for the fourth quarter decreased by 56.2% to $4 million compared to $91 million in the prior year period. GAAP net loss for the first quarter was $7 million compared to a net loss of $11.5 million in the prior year period. Adjusted EBITDA loss in the first quarter decreased 67.4% to $2 million compared to an adjusted EBITDA loss of $6.3 million in the prior year period.
These results reflect progress towards profitability on a non-GAAP basis as previously announced. As a reminder, adjusted EBITDA loss 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&A transaction expenses. Primary shares outstanding were $61.9 million for the first quarter of 2025. Turning now to the balance sheet. Accounts receivable net increased this quarter to $10.4 million compared to $8 million last quarter, which from $6.3 million in the year ago comparable period. Inventories net decreased by $3.1 million or 14.1% to $89 million compared to $22 million last quarter and $55.8 million in the year ago comparable period.
Cash, cash equivalents and short and long-term marketable securities totaled $20.3 million at March 31, ’25. On a sequential cash sequential basis, cash increased by $0.4 million as we continue to make progress on reducing our inventory and working capital. Turning now to our financial outlook for the second quarter of 2025 and full year of 2025. As a reminder, Tigo provides quarterly guidance for revenue as well as adjusted EBITDA as we believe these metrics to be key indicators for the overall performance of our business. For the second quarter of 2025, we expect revenues and adjusted EBITDA to be in the following range. We expect Revenues in the second quarter ended June 30, 2025, to range between $21 million and $23 million. We expect adjusted EBITDA to range between negative $1.5 million and positive $500,000.
For the full year of 2025, we are reiterating our previous guidance of revenues of between $85 million and $100 million. That completes my summary, and I’d like to now turn the call back over to Zvi for final remarks.
Zvi Alon: We look ahead I’m happy to say that even against the backdrop of the economic uncertainty, we believe is our track record of consecutive quarters with topline growth will continue for the remainder of 2025 as demand for our solutions continue to return. We firmly believe in the growth prospect for our business and look forward to providing additional updates in the coming quarters. With that, operator, please open the call for Q&A.
Operator: Thank you. At this time, we would like to conduct the question-and-answer session [Operator Instructions] Our first question comes from the line of Eric Stine of Craig-Hallum Capital Group. Your line is now open.
Eric Stine : Hi, Zvi, hey Bill.
Bill Roeschlein: Hey, Eric.
Eric Stine : Hello. So curious, I mean, obviously, a nice recovery you’re seeing in — actually across all your markets. But when you think about this, I mean break this down between just improving conditions with your current distributors and direct sales versus market share gains? Because clearly, this is a little bit of both. I would love your thoughts on how that breaks down between the two.
Zvi Alon : Outstanding question, Eric, thanks for asking it. I will share that, we continue to see current existing distributors which are very strong, increasing their footprint with us and becoming much more bullish on the market requirements. Similarly, our efforts with going directly to at least promoting the products with system integrators and large EPCs is paying very nice dividends. And I can tell you that majority, I would say, of our growth is coming from an increased market share, we believe. Even though it’s the same exact distributors, and that’s what we hear from them, at least I would not mention any names, but two or three of them mentioned specifically that we have increased the footprint within their portfolio substantially above any other competitor.
Eric Stine : That’s good color. I mean, do you attribute that to just a broader product offering, the fact that this can be used residential, C&I, utility scale? Is it price? Is it kind of all of the above?
Zvi Alon : So I’ll tell you that I’ll touch the price first. We have not changed price at all, and we’ve been consistent on that front. We introduced the TS4-X family at a higher price and we see a nice increase for those products for a different market, which is accepting it so far. But as far as the TS4-A product, price was not an issue. Now I can tell you that many stores are helping us gain market share. One, the number of SKUs is very small. We have a single optimizer that covers basically the whole market. Not only that, it’s the highest power rating which is the current shipping version is 700 watts or 800 watts and we just announced the 725 watts. And working for essentially all three market segments. Number three, I would say, we are — I believe the company with a backward compatibility of the current shipping products to products we shipped seven, eight, nine years ago, exactly identical, if you have any failure with the old product, which they sometimes do happen, you don’t need to have the same exact part number.
You can just buy anyone off the shelf and replace it or get an RMA from us to replace it. Also, the fact that our product works with pretty much any inverter out there is also a major contributor. So all in all I would mention one more thing. Our installation time of the MLPE product is superb. It’s about 10 seconds per PV module. It’s unheard of. I mean, literally just slide the unit on the panel and you’re done. So all those factors together get to the more they buy into it and want to do more. And I can tell you that the amazing part for us also is that we see a larger number of fields being shipped to large EPCs as they become much more well and successful with those products.
Eric Stine : Got it. Thank you very much for that. And then I guess, for my last question, then I’ll turn it over. Just curious, I mean, OpEx came down a little bit here in the quarter, but I also know that in Q1, you were expecting some audit fees and some other onetime items. So just curious guidance and the fact that at the upper end, positive adjusted EBITDA would imply that OpEx, we should think of it lower. So just curious if you can give any color on that.
Bill Roeschlein: So in general, there’s two levers to think about in the guidance and projections for the year build out your model. We are tracking at a high gross margin. We’re seeing that both in our MLPE business as well as the lack of having a drag on the margin from our GO ESS product line, which we did a large reserve for last quarter. So combining those both should lead to some gross margin uplift as we look later into the year, so 38% plus. I would put it more closer to 40%. And OpEx would, conservatively speaking, between 11% and 12% or maybe midpoint 11% is, I think, it’s a fair range. We were 11% and 11.2%, Q1, but we were also 15% and in Q4. So there’s a little bit of variability there. But when you model that out, you’ll come up with numbers for the adjusted EBITDA that we guided to.
Eric Stine : Okay. All right. Thank you very much.
Bill Roeschlein: Thank you.
Operator: Thank you. Our next question comes from Philip Shen from ROTH Capital Partners.
Bill Roeschlein: Hello?
Operator: One moment for our next question. Our next question comes to us from Sameer Joshi of H.C. Wainwright. Your line is now open.
Sameer Joshi : Hey, Zvi. Thanks for taking the question and congrats on the good quarter. I think you in prepared remarks you mentioned 5% of revenues would have been impacted by 125% tariffs and 15% by 10% tariff. Back of the envelope, this would be around $1.8 million to $2 million. Should we expect that level of impact going forward? And then how does that mesh with the sort of increased gross margin that you have seen recently.
Bill Roeschlein: So I would characterize it this way. The U.S. represented about 22% of our revenues. And within that, you’ve got 15% of that MLPE products that are made outside of China and Thailand, that are subject to the reciprocal tariffs and we’ll see what happens after the 90-day. And then that leaves 5% that’s subject to the China tariffs, but that includes both inverter and batteries. And we are working on our supply chain and have the opportunity to move some of that outside of China. So that would negate much of that 5% and then the rest of it is batteries which are sourced in China, but we have a position in the U.S. already. And so that also negates the tariffs on that. So combining all of that, we don’t see a substantial impact tariffs on our business, at least for the second quarter, and we’re going to leave it quarter-to-quarter because it seems to change so fast on this front.
Sameer Joshi : Yeah. No, you answered my part two of the question, which was inventory, how much of it will support the second quarter. So it seems you have enough inventory that is pre-tariff that can support your business in the second quarter.
Bill Roeschlein: Correct.
Sameer Joshi : And then the 2024’s off-grid product offering that you are — the solar package that you’re offering, is it still — like where is this demand for off-grid that you’re seeing from? Like is it mainly businesses? Or — because the press release also mentioned residential, and so I just was curious how large is that demand and from where are you seeing that demand?
Zvi Alon : There is a substantial region, actually a couple who like to be off-grid and they’re in the Midwest and some South, and that’s what we were aiming at. And we started seeing some fairly good success. So we have packaged that solution for that one specific market. If you check who else are providing solutions, which are also off-grid, it is becoming an increased number of suppliers. So we are sure we are not going to stay the only one, and we are not right now. But for us, it’s a growing segment that we’ve not touched before.
Sameer Joshi : Understood. And then just last one. The second quarter guidance implies that your second half revenues are likely to be $46 million to $59 million at the midpoint of 2Q guidance. Do you have visibility? And how much confidence do you have in that outlook of strong second half?
Zvi Alon : I can tell you that we don’t have specific orders going out more than a couple of quarters, maybe in some very small cases, a little bit more, but majority are really for the current quarter and the next quarter. But on the other hand, we know how — and we do talk to our distributors, and we know how the markets behave and what their expectations are. And so we factor it in, in addition to, obviously, what we know about the market. And we have been so far accurate for the last five, six quarters with our projections. So we are fairly confident. I can tell you that our backlog increasingly, we don’t share quite those numbers. But increasingly, over the last two or three quarters go from one quarter to the other. And as we got into the current quarter, we felt much more confident on even increasing the numbers, the guidance.
Sameer Joshi : Understood. That sounds good. Thanks a lot for taking my questions.
Zvi Alon : Most welcome.
Operator: Thank you. [Operator Instructions] Our next question comes from Philip Shen of ROTH Capital Partners. Your line is now open.
Philip Shen : Yes, hi. Thanks for taking my questions. We went through the 10-Q quickly, we saw that there’s the going concern language. You have the $50 million convert, I think, due January 1 or sometime in January of 2026. Can you talk to us about the situation there? How do you expect to manage the $50 million due? How flexible would you expect your convert counterparty L1 energy to be? Thanks.
Zvi Alon : Yeah, the counterparty is being very flexible and cooperative and is a big supporter of Tigo, and that being said, we are working on a refinance. And I’m sure you can appreciate as something announced, we’ll announce it. But rest assured, we are diligently working maturity on that.
Philip Shen : Okay, thanks. From a cash standpoint, you guys have an annual guide. And so if you hit the midpoint of that guide, how much free cash flow generation do you think you can have?
Bill Roeschlein: So on a go-forward basis, we’re looking at EBITDA positive on Q2 guidance for three and four, we would expect that based on the annual guide. The overall cash position is, I would say, probably going to be flattish to slightly up. We did mode on some of the inventory, especially on MLPE. And so there’s going to be some consumption there that some of the generation is going to be used for working capital for that purpose. So we’re thinking of cash sort of in the — a bit range bound in this lower 20s level.
Philip Shen : Okay, great. Thanks. And then as it relates to Europe, Intersolar is about to kick off, I think tomorrow, are you guys there? I know Europe is a big part of your business. And so what are you hoping to accomplish you think, at that show. Thanks.
Zvi Alon : We are at full swing. We have our team ready. We have a very nice boost set, and we actually have a very interesting and busy schedule already from partners, distributors as well as customers. And it’s interesting, but we are all pretty much booked. We didn’t have much left to allocate. So we’re very happy with what’s going on right now.
Philip Shen : Thanks, Zvi. And then in terms of distributors, I’ve been hearing that some of the pan-European larger distributors might be having issues with a trend where more of the local distributors are developing a greater influence with the installer base. Are you seeing something similar? And so how might you adjust your strategy to sell into Europe. I don’t know if this plays a factor at all, but what are your thoughts on this dynamic?
Zvi Alon : So what — we have seen two phenomenas. First of all, big picture, the total number of distributors we have did not shrink much even with all those guys that went out of business. We actually replenished some of them fairly quickly with others and some came back from almost instinction. So we are very happy for them to be able to actually survive. Now to the question itself, we do see a phenomenon in which the very large distributors are starting to sell to some local distribution. And so we’re — happening in a few places. We are not necessarily encouraging it or discouraging it, but it helps us keep a footprint which is much wider and for the smaller regional ones, they don’t necessarily are able to hit the same discount level as the large ones. So that mechanism we have in place which will the following is working for us and it sells pretty much all of them. And so we don’t think we need to make any changes, yeah.
Philip Shen : Got it. And so when you see the large distributors selling product, smaller ones or local ones, what kind of products are we talking about, modules, inverters, MLPE, your products? Or is it more focused on storage or some other categories?
Zvi Alon : No. The majority we see is in the line of inverters, MLPE and some PV modules. On the battery side and ESS, not much. Not much at all, I would say.
Philip Shen : Got it. Thanks, Zvi. And the in terms of — maybe the last one here for me. The China tariff in the U.S. 145%. The biggest impact I see is on cell packs for batteries coming into the country. And I wanted to just check in, maybe you already addressed this, sorry if I missed this, but what’s the impact for you guys? Do you already have a lot of inventory in country in the U.S., so that’s less of an issue? Or if it is a bit of an issue, what are you guys doing to mitigate some —
Zvi Alon : So for the foreseeable future, I would say, the next few quarters, we’re in good shape with the inventory we have. And we are getting — the next generation, which is addressing the sources of the suppliers. And so we would not be exposed to China as much. But as you know, China controls a very large part in the market. And so I’m not sure we can avoid it completely, but we have other sources.
Philip Shen : So for now, you guys have some insulation maybe a few quarters, that’s a fair amount of time. So through that inventory, you do need to start now or diversifying your cell pack geographic sourcing. And so the world is trying to do this for at least most of the U.S. And so what countries are you trying to go to? Is it Korea? Is it Japan? What are the countries are —
Zvi Alon : It’s those two that you mentioned exactly. And also yes, it seems like also some of the Chinese guys are actually also looking for other sales from other places. So we don’t know exactly how it’s going to all work out, but Korea and Japan are the two main areas.
Philip Shen : Okay, great. Best of luck on that transition and with the rest of the year. Thank you nad I’ll pass it on.
Zvi Alon : Thank you much. Thanks, Phil. Are you in Germany?
Philip Shen : Not this time, around, given the earnings season.
Zvi Alon : Okay, no problem.
Philip Shen : Missing. Thanks.
Operator: One moment for our next question. Our next question [Indiscernible] Sidoti & Company. Your line is now open.
Unidentified Analyst: Congratulation son the quarter gentlemen.
Zvi Alon : Thank you.
Unidentified Analyst: Just turning to the demand side. You’ve reported regions, but just working out some arithmetic, it looks like EMEA was a little bit stronger in growth. Is that accurate?
Bill Roeschlein: Yes. We had a most region in the quarter, but they represent the smallest of the three regions for us, followed by EMEA and the Americas.
Unidentified Analyst: Can you release any growth figures for the Americas?
Bill Roeschlein: It’s growing a little bit more than what the market estimates are. I mean, it’s certainly low to mid-single digits. I mean if that helps. No, it’s not — it’s certainly not the — we did 9%. It certainly — it didn’t carry the day for 9%.
Unidentified Analyst: Got it, all right. Well thank you for the information and good luck on the quarter.
Bill Roeschlein: Thank you so much.
Operator: Thank you. At this time, this concludes our question-and-answer session. I’d now like to turn the call back over to Mr. Alon for closing remarks.
Zvi Alon : Thanks again, everyone, for joining us today. I especially want to thank our dedicated employees for their ongoing contribution as well as our customers and partners for their continued hard work. I also want our investors for their continued support. Operator?
Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.