Tigo Energy Reports Third Quarter and First Nine Months 2023 Financial Results

Third Quarter and First Nine Months 2023 Revenue Totaled $17.1 Million and $136.0 Million, Respectively

Tigo Energy, Inc. ("Tigo", or the "Company"), a leading provider of intelligent solar and energy storage solutions, today reported unaudited financial results for the third quarter and nine months ended September 30, 2023 and financial guidance for the fourth quarter ending December 31, 2023.

Third Quarter 2023 Financial and Operational Highlights

  • Revenue of $17.1 million, down 25.1% compared to $22.8 million in the third quarter of 2022.
  • Gross profit of $4.2 million, or 24.3% of revenues, down 36.9% compared to $6.6 million, or 28.9% of revenues, in the third quarter of 2022.
  • Adjusted EBITDA loss of $9.5 million, compared to adjusted EBITDA $0.4 million in the third quarter of 2022.
  • Launched the Green Glove service program to provide a premium support experience for first-time residential and new or existing commercial installers of Tigo systems. To complement Green Glove, Tigo also introduced Tigo Academy, a video platform that includes training material to help solar professionals efficiently design and install reliable installations with Tigo equipment.
  • Expanded geographic footprint through deployments of rapid shutdown technology in Brazil with SolaX Power and in Australia with SCE Energy Solutions.

First Nine Months 2023 Financial and Operational Highlights

  • Revenue for the first nine months of 2023 of $136.0 million, up 169.9% compared to $50.4 million in the same period a year ago.
  • Gross profit for the first nine months of 2023 of $48.4 million, or 35.6% of revenues, compared to $14.8 million, or 29.4% of revenues, in the same period a year ago.
  • Adjusted EBITDA for the first nine months of 2023 of $12.6 million, compared to an adjusted EBITDA loss of $0.3 million in the same period a year ago.

Management Commentary

“As discussed last month, a significant number of customers delayed scheduled shipments in the third quarter of 2023 to the fourth quarter of 2023 or early 2024 and inventory levels remain elevated,” said Zvi Alon, Chairman and CEO of Tigo. “Despite these delays, and to a lesser extent, cancellations and returns, our quarterly MLPE (Module Level Power Electronics) monitoring registrations increased to record levels. Based on data from our European customers, we believe Tigo inventories in the EMEA channel represented approximately six months of current market demand at September 30, 2023, and that the current inventory digestion cycle will likely continue through early 2024. Despite these market headwinds, we believe we are well positioned to grow in 2024 as we continue to invest in penetrating new markets and expanding our product portfolio.”

Third Quarter 2023 Financial Results

Results compare the 2023 fiscal third quarter ended September 30, 2023 to the 2022 fiscal third quarter ended September 30, 2022, unless otherwise indicated.

  • Revenue for the third quarter 2023 totaled $17.1 million, a 25.1% decrease from $22.8 million in the prior year period.
  • Gross profit for the third quarter 2023 totaled $4.2 million, or 24.3% of total revenue, a 36.9% decrease from $6.6 million, or 28.9% of total revenue, in the prior year period.
  • Total operating expenses for the third quarter 2023 totaled $15.4 million, a 77.1% increase from $8.7 million in the prior year period.
  • Net income for the third quarter 2023 totaled $29.1 million, compared to a net loss of $2.4 million for the prior year period. Net income includes the mark-to-market benefit of $50.5 million related to the conversion feature of the convertible note, partially offset by an income tax expense of $11.0 million, primarily related to a valuation allowance for the Company's deferred tax assets. During the quarter, the Company amended its convertible note agreement, and this eliminated the requirement to revalue the conversion feature in future quarters.
  • Adjusted EBITDA loss totaled $9.5 million for the third quarter 2023, compared to adjusted EBITDA of $0.4 million for the prior year period.
  • Cash, cash equivalents, and marketable securities totaled $41.0 million at September 30, 2023.

First Nine Months 2023 Financial Results

Results compare the nine months ended September 30, 2023 to the nine months ended September 30, 2022, unless otherwise indicated.

  • Revenue totaled $136.0 million, a 169.9% increase from $50.4 million in the prior year period.
  • Gross profit totaled $48.4 million, or 35.6% of total revenue, a 227.2% increase from $14.8 million, or 29.4% of total revenue, in the prior year period.
  • Total operating expenses totaled $43.2 million, a 141.7% increase from $17.9 million in the prior year period.
  • Net income totaled $13.8 million, compared to a net loss of $7.9 million for the prior year period. Net income includes the mark-to-market benefit of $12.2 million related to the conversion feature of the convertible note.
  • Adjusted EBITDA totaled $12.6 million, compared to an adjusted EBITDA loss of $0.3 million for the prior year period.

Fourth Quarter 2023 Outlook

The Company also provides guidance for the fourth quarter ending December 31, 2023 as follows:

  • Revenues are expected to be within the range of $15 million to $20 million.
  • Adjusted EBITDA loss is expected to be within the range of $(8) million to $(12) 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, November 7, 2023, 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 penetrate new markets and expand our product portfolio, current inventory levels and its impact on future financial results, inventory supply and its impact on our customer shipments and our revenue for fiscal third quarter of 2023, 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,” “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 seasonal trends and the cyclical nature of the solar industry; 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 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 expense, 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 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)

 

 

 

September 30,

2023

 

December 31,

2022

 

 

(Unaudited)

 

(Unaudited)

ASSETS

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

2,240

 

 

$

36,194

 

Restricted cash

 

 

 

 

 

1,523

 

Marketable securities, short-term

 

 

34,440

 

 

 

 

Accounts receivable, net

 

 

20,358

 

 

 

15,816

 

Inventory, net

 

 

57,437

 

 

 

24,915

 

Deferred issuance costs

 

 

 

 

 

2,221

 

Notes receivable

 

 

 

 

 

456

 

Prepaid expenses and other current assets

 

 

2,775

 

 

 

3,967

 

Total current assets

 

 

117,250

 

 

 

85,092

 

Property and equipment, net

 

 

2,763

 

 

 

1,652

 

Operating right-of-use assets

 

 

2,729

 

 

 

1,252

 

Marketable securities, long-term

 

 

4,335

 

 

 

 

Intangible assets, net

 

 

2,260

 

 

 

 

Other assets

 

 

725

 

 

 

82

 

Goodwill

 

 

13,079

 

 

 

 

Total assets

 

$

143,141

 

 

$

88,078

 

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:

 

 

 

 

Accounts payable

 

$

19,492

 

 

$

23,286

 

Accrued expenses and other current liabilities

 

 

8,681

 

 

 

4,382

 

Deferred revenue, current portion

 

 

268

 

 

 

950

 

Warranty liability, current portion

 

 

542

 

 

 

392

 

Operating lease liabilities, current portion

 

 

1,162

 

 

 

578

 

Current maturities of long-term debt

 

 

 

 

 

10,000

 

Total current liabilities

 

 

30,145

 

 

 

39,588

 

Warranty liability, net of current portion

 

 

5,265

 

 

 

3,959

 

Deferred revenue, net of current portion

 

 

188

 

 

 

172

 

Long-term debt, net of current maturities and unamortized debt issuance costs

 

 

29,334

 

 

 

10,642

 

Operating lease liabilities, net of current portion

 

 

1,668

 

 

 

762

 

Preferred stock warrant liability

 

 

 

 

 

1,507

 

Other long-term liabilities

 

 

714

 

 

 

 

Total liabilities

 

 

67,314

 

 

 

56,630

 

Convertible preferred stock

 

 

 

 

 

87,140

 

Stockholders’ equity (deficit):

 

 

 

 

Common stock

 

 

6

 

 

 

1

 

Additional paid-in capital

 

 

136,983

 

 

 

6,522

 

Accumulated deficit

 

 

(61,006

)

 

 

(62,215

)

Accumulated other comprehensive income

 

 

(156

)

 

 

 

Total stockholders’ equity (deficit)

 

 

75,827

 

 

 

(55,692

)

Total liabilities, convertible preferred stock and stockholders’ equity (deficit)

 

$

143,141

 

 

$

88,078

 

Tigo Energy, Inc.

Condensed Consolidated Statement of Income

(in thousands)

(unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue, net

 

$

17,104

 

 

$

22,824

 

 

$

135,988

 

 

$

50,382

 

Cost of revenue

 

 

12,946

 

 

 

16,236

 

 

 

87,555

 

 

 

35,579

 

Gross profit

 

 

4,158

 

 

 

6,588

 

 

 

48,433

 

 

 

14,803

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

2,425

 

 

 

1,621

 

 

 

7,063

 

 

 

4,476

 

Sales and marketing

 

 

5,601

 

 

 

3,007

 

 

 

15,536

 

 

 

7,348

 

General and administrative

 

 

7,350

 

 

 

4,053

 

 

 

20,567

 

 

 

6,034

 

Total operating expenses

 

 

15,376

 

 

 

8,681

 

 

 

43,166

 

 

 

17,858

 

(Loss) income from operations

 

 

(11,218

)

 

 

(2,093

)

 

 

5,267

 

 

 

(3,055

)

Other expenses (income):

 

 

 

 

 

 

 

 

Change in fair value of preferred stock warrant and contingent shares liability

 

 

(2,977

)

 

 

(45

)

 

 

143

 

 

 

(37

)

Change in fair value of derivative liability

 

 

(50,498

)

 

 

 

 

 

(12,247

)

 

 

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

171

 

 

 

3,613

 

Interest expense

 

 

2,875

 

 

 

392

 

 

 

5,240

 

 

 

1,241

 

Other (income) expense, net

 

 

(636

)

 

 

(19

)

 

 

(1,859

)

 

 

68

 

Total other (income) expenses, net

 

 

(51,236

)

 

 

328

 

 

 

(8,552

)

 

 

4,885

 

Income (loss) before income tax expense

 

 

40,018

 

 

 

(2,421

)

 

 

13,819

 

 

 

(7,940

)

Income tax expense

 

 

10,962

 

 

 

 

 

 

29

 

 

 

 

Net income (loss)

 

 

29,056

 

 

 

(2,421

)

 

 

13,790

 

 

 

(7,940

)

Cumulative dividends on convertible preferred stock

 

 

 

 

 

(2,102

)

 

 

(3,399

)

 

 

(4,242

)

Net income (loss) attributable to common stockholders

 

$

29,056

 

 

$

(4,523

)

 

$

10,391

 

 

$

(12,182

)

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share

 

 

 

 

 

 

 

 

Basic

 

$

0.50

 

 

$

(0.92

)

 

$

0.19

 

 

$

(2.51

)

Diluted

 

$

(0.27

)

 

$

(0.92

)

 

$

0.04

 

 

$

(2.51

)

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

58,408,441

 

 

 

4,908,232

 

 

 

31,070,476

 

 

 

4,852,696

 

Diluted

 

 

68,368,758

 

 

 

4,908,232

 

 

 

40,487,517

 

 

 

4,852,696

 

Tigo Energy, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands) (unaudited)

 

 

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

Cash Flows from Operating activities:

 

 

 

 

Net income (loss)

 

$

13,790

 

 

$

(7,940

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

Depreciation and amortization

 

 

820

 

 

 

404

 

Reserve for inventory obsolescence

 

 

796

 

 

 

 

Change in fair value of preferred stock warrant and contingent shares liability

 

 

143

 

 

 

(37

)

Change in fair value of derivative liability

 

 

(12,247

)

 

 

 

Deferred tax benefit

 

 

(12

)

 

 

 

Non-cash interest expense

 

 

3,237

 

 

 

206

 

Stock-based compensation

 

 

2,137

 

 

 

393

 

Allowance for credit losses

 

 

1,968

 

 

 

200

 

Loss on debt extinguishment

 

 

171

 

 

 

3,613

 

Non-cash lease expense

 

 

710

 

 

 

 

Accretion of interest on marketable securities

 

 

(333

)

 

 

 

Loss on disposal of property and equipment

 

 

16

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(6,393

)

 

 

(10,811

)

Inventory

 

 

(33,318

)

 

 

(1,965

)

Prepaid expenses and other assets

 

 

1,183

 

 

 

(4,573

)

Accounts payable

 

 

(4,115

)

 

 

6,333

 

Accrued expenses and other liabilities

 

 

1,975

 

 

 

555

 

Deferred revenue

 

 

(666

)

 

 

(15

)

Warranty liability

 

 

1,456

 

 

 

524

 

Deferred rent

 

 

 

 

 

(135

)

Operating lease liabilities

 

 

(697

)

 

 

 

Net cash used in operating activities

 

$

(29,379

)

 

$

(13,248

)

Investing activities:

 

 

 

 

Purchase of marketable securities

 

 

(53,483

)

 

 

 

Acquisition of fSight

 

 

(16

)

 

 

 

Purchase of intangible assets

 

 

(450

)

 

 

 

Purchase of property and equipment

 

 

(1,855

)

 

 

(662

)

Sales and maturities of marketable securities

 

 

14,885

 

 

 

 

Net cash used in investing activities

 

$

(40,919

)

 

$

(662

)

Financing activities:

 

 

 

 

Proceeds from Convertible Promissory Note

 

 

50,000

 

 

 

25,000

 

Repayment of Series 2022-1 Notes

 

 

(20,833

)

 

 

(2,500

)

Repayment of Senior Bonds

 

 

 

 

 

(10,000

)

Payment of financing costs

 

 

(358

)

 

 

(3,472

)

Proceeds from sale of Series E convertible preferred stock

 

 

 

 

 

40,978

 

Proceeds from Business Combination

 

 

2,238

 

 

 

 

Proceeds from exercise of stock options

 

 

212

 

 

 

119

 

Payment of tax withholdings on stock options

 

 

(91

)

 

 

 

Payment of issuance costs

 

 

 

 

 

(138

)

Proceeds from common stock warrant redemption, net of issuance costs and payments to warrant holders of non-redeemed warrants

 

 

3,653

 

 

 

 

Net cash provided by financing activities

 

$

34,821

 

 

$

49,987

 

Net (decrease) increase in cash and restricted cash

 

 

(35,477

)

 

 

36,077

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

37,717

 

 

 

7,474

 

Cash, cash equivalents, and restricted cash at end of period

 

$

2,240

 

 

$

43,551

 

Tigo Energy, Inc.

Non-GAAP Financial Measures

(in thousands)

(unaudited)

 

Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income (loss)

 

$

29,056

 

 

$

(2,421

)

 

$

13,790

 

 

$

(7,940

)

Adjustments:

 

 

 

 

 

 

 

 

Total other (income) expenses, net

 

 

(51,236

)

 

 

328

 

 

 

(8,552

)

 

 

4,885

 

Income tax expense

 

 

10,962

 

 

 

 

 

 

29

 

 

 

 

Depreciation and amortization

 

 

284

 

 

 

178

 

 

 

820

 

 

 

404

 

Stock-based compensation

 

 

1,274

 

 

 

341

 

 

 

2,137

 

 

 

393

 

M&A transaction expenses

 

 

152

 

 

 

2,000

 

 

 

4,399

 

 

 

2,000

 

Adjusted EBITDA (loss)

 

$

(9,508

)

 

$

426

 

 

$

12,623

 

 

$

(258

)

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

Contacts

Investor Relations Contacts

Matt Glover or Tom Colton

Gateway Group, Inc.

(949) 574-3860

TYGO@gateway-grp.com

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