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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107641490/en/
Investor Relations Contacts Matt Glover or Tom Colton
Gateway Group, Inc. (949) 574-3860 TYGO@gateway-grp.com
Tigo Energy (NASDAQ:TYGO)
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