Tigo Energy TYGO Q2 2025 Earnings Call Transcript

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DATE

Tuesday, July 29, 2025 at 12:00 a.m. ET

CALL PARTICIPANTS

Chief Executive Officer — Zvi Alon

Chief Financial Officer — Bill Roeschlein

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TAKEAWAYS

Revenue: $24.1 million in revenue for Q2 2025, representing 27.7% sequential revenue growth and 89.4% year-over-year revenue growth.

Backlog and Bookings: Amount expected to ship in the third quarter exceeds second quarter revenue, with capacity ramping up to meet demand.

Shipments: 646,000 MLPE units shipped in Q2 2025, totaling 477 megawatts delivered.

Gross Profit: $10.8 million, or 44.7% gross margin in Q2 2025, up from $3.9 million, or 30.4%, in the year-ago period.

Operating Expenses: $12.3 million, flat compared to the prior-year period.

Operating Loss: Decreased by 82.1% to $1.5 million from $8.4 million in the prior-year period.

GAAP Net Loss: GAAP net loss was $4.4 million in Q2 2025, versus $11.3 million in the prior-year period.

Adjusted EBITDA: $1.1 million in adjusted EBITDA (non-GAAP) for Q2 2025.

Cash & Marketable Securities: $28 million as of June 30, 2025, up $7.7 million sequentially in the second quarter ended June 30, 2025.

Convertible Debt: $50 million in gross convertible debt maturing January 2026; company is seeking refinancing alternatives.

Regional Revenue Mix: EMEA region contributed $18.3 million (75.9%) in Q2 2025, Americas $4.6 million (19.1%) in Q2 2025, and APAC $1.2 million (5%) in the second quarter ended June 30, 2025.

Product Revenue Mix: MLPE accounted for $20.6 million (85.7%) in the second quarter ended June 30, 2025, Go ESS $2.3 million (9.4%) in Q2 2025, Predict Plus and licensing $1.2 million (4.9%) in Q2 2025.

Inventory: Net inventory at $900,000, nearly flat sequentially in Q2 2025, but down significantly from $51.3 million in the prior-year period (Q2 2024), indicating excess inventory largely resolved.

Guidance — Q3 2025: Revenue expected in the range of $29 million–$31 million in Q3 2025; adjusted EBITDA (non-GAAP) projected between $2 million–$4 million in Q3 2025, with GAAP operating profitability possible at high end.

Full-Year 2025 Guidance: Revenue forecast increased to $100 million–$105 million for FY2025.

Gross Margin Outlook: Gross margin is expected to remain "in the low forties" percent for the remainder of FY2025, with a target model of 40% gross margin.

US vs. International Revenue: 80% of revenue originated outside the US in Q2 2025, with the EMEA region expected to continue driving growth.

SUMMARY

Tigo Energy, Inc. (NASDAQ:TYGO) achieved its sixth consecutive quarter of sequential revenue growth as of Q2 2025, reflecting increasing market share, particularly within the EMEA region. Management emphasized a significant improvement in gross margin, attributing some benefit to sales of reserved Go ESS inventory, while also reporting tightened inventory levels and robust cash generation. The company confirmed that a combination of international momentum, limited exposure to domestic incentive changes, and product flexibility is sustaining demand even amid US market challenges. Management stated its intent to address the upcoming convertible debt maturity, citing ongoing discussions with external parties regarding refinancing options.

CEO Alon said, "our existing backlog and bookings that are expected to ship in the third quarter currently exceed our revenue results for the second quarter and we are ramping up capacity."

The company does not expect significant impact from slowing US demand because most revenue is international and its market approach focuses on non-dominant share segments.

CFO Roeschlein noted, "we expect to be in the low forties" for gross margin and highlighted the company's continued operating expense discipline.

Management confirmed that achieving positive full-year adjusted EBITDA (non-GAAP) is now expected in FY2025.

INDUSTRY GLOSSARY

MLPE: Module Level Power Electronics — hardware enabling control, safety, and optimization at the individual solar photovoltaic module level.

Go ESS: Tigo Energy, Inc.'s energy storage system product for residential and commercial solar-plus-storage applications.

Backlog: Sales orders received but not yet shipped or recognized as revenue, representing future shipment commitments.

Adjusted EBITDA: Earnings before interest, taxes, depreciation, amortization, stock-based compensation, and M&A transaction expenses — a non-GAAP profitability metric.

Full Conference Call Transcript

Bill Roeschlein: Thank you, Michelle, and it is a pleasure to join you today. Also with us is Zvi Alon, our CEO.

We would like to remind everyone that some of the matters we will discuss on this call, including our expected business outlook, our ability to increase our revenues, and achieve and maintain profitability, and our overall long-term growth prospects, expectations regarding a continued recovery in our industry, statements about demand for our products, our competitive position and market share, the impact of tariffs, our current and future inventory levels, inventory supply, and its impact on our customer shipments, statements about our revenue, adjusted EBITDA, and GAAP operating results for 2025, and our revenue and adjusted EBITDA for the full fiscal year 2025, statements about our existing backlog and bookings, statements about our ability to reach inventories and increase our capacity in response to increased demand, things about our ability to refinance our outstanding indebtedness, and the expected benefits thereof, 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 discussed in the risk factors section of our most recent annual report on Form 10-K, our quarterly report on Form 10-Q, for the fiscal quarter ended June 30, 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 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 branched as an exhibit to our Form 8-K. The non-GAAP financial measures provided should not be considered a substitute for or to the 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 Energy, Inc.'s Investor Relations website at investors.tigoenergy.com. With that, I would like to now turn the call over to Tigo Energy, Inc. 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 before turning the call over to our CFO, Bill Roeschlein. He will discuss our financial results for the second quarter in more depth as well as provide our guidance for the third quarter and increased financial guidance for the full year of 2025. After that, I will share some closing remarks, tell you about our outlook, and then open the call for questions from our analysts. Approximately two years ago, Tigo Energy, Inc. became a public company.

And although the industry has had to endure some unexpected circumstances along the way, we believe that the value proposition that Tigo Energy, Inc. brings to this market has not changed. Competitor solutions have historically forced solar system designers and installers to compromise under the one-size-fits-all umbrella. These compromises often led to solar installations that are less efficient, less flexible, less reliable, and more expensive than open systems. Open architecture solutions that Tigo Energy, Inc. enables, our MLPE enables solar system designers to install flexible, best-in-class solar systems without the need to accept compromises such as power clipping, low energy conversion efficiencies, and high cost.

We believe our value proposition in this market has not changed and that the growth we are experiencing in a challenging market is evidence that our market share is increasing and sustainable. For 2025, I am pleased to report our sixth increase in sequential quarterly revenue growth. Growing 27.7% sequentially and 89.4% on a year-over-year basis, exceeding the high point of our second quarter guidance. We ended the quarter with a total of $24.24 million and our existing backlog and bookings that are expected to ship in the third quarter currently exceed our revenue results for the second quarter and we are ramping up capacity. In addition, we shipped 646,000 units of 477 megawatts of MLPE.

Based on publicly reported figures and estimates, we believe these figures represent increased market share gain for Tigo Energy, Inc. during the quarter. I am also pleased to report $1.1 million in positive adjusted EBITDA and an increase in cash, cash equivalents, and marketable securities of $7.7 million for the quarter. This performance underscores the leverage in our operating model as we grow the company while maintaining spending disciplines with operating expenses. Finally, we look ahead to 2025 and into 2026. We are excited about our product roadmap and expect to make several new product announcements in the future. And with that, I will turn it over to Bill. Bill?

Bill Roeschlein: Turning now to our financial results for the second quarter ended 06/30/2025. Revenue for 2025 increased 89.4% to $24.1 million from $12.7 million in the prior year period. As Zvi mentioned, this represents significant growth in a challenging market. On a sequential basis, revenues increased 27.7% with improved results coming from many countries in the EMEA region, including Germany, the Czech Republic, and Poland. By region, EMEA revenue was $18.3 million or 75.9% of total revenue. Americas revenue was $4.6 million or 19.1% of total revenues. And APAC revenue was $1.2 million or 5% of total revenues. By product family, 2025 had MLPE revenue representing $20.6 million of revenue or 85.7% of total revenues.

Go ESS represented $2.3 million or 9.4% of total revenues, and Predict Plus and licensing revenue represented $1.2 million or 4.9% of total revenues during the quarter. Gross profit for 2025 was $10.8 million or 44.7% of revenue compared to a gross profit of $3.9 million or 30.4% of revenue in the comparable year-ago period. During the quarter, gross margins benefited by 450 basis points from the sale of a reserve Go ESS inventory. Operating expenses for the second quarter were flat at $12.3 million compared to the prior year period. Operating loss for the second quarter decreased by 82.1% to $1.5 million compared to $8.4 million in the prior year period.

GAAP net loss for the second quarter was $4.4 million compared to a net loss of $11.3 million for the prior year period. Adjusted EBITDA for the second quarter was $1.1 million compared to an adjusted EBITDA loss of $6.4 million in the prior year period. These results reflect a combination of strong top-line performance and the operating leverage in our business model. As a reminder, adjusted EBITDA is a non-GAAP measure that represents net loss as adjusted for interest and other expenses, net income tax, depreciation, and amortization expense, stock-based compensation, and M&A transaction expenses. Primary shares outstanding were 62.3 million for 2025. Turning to the balance sheet.

Accounts receivable net remained consistent at $10.4 million between the first and second quarter and increased from $6.9 million in the year-ago comparable period. Inventories net were sequentially flat at $900,000 at the end of the second quarter compared to $51.3 million in the year-ago comparable period. At this point, we have largely resolved our excess inventory balance and are ramping capacity with our contract manufacturers to address increasing demand. Cash, cash equivalents, and short and long-term marketable securities totaled $28 million at 06/30/2025. On a sequential basis, cash increased by $7.7 million. Turning to short-term debt. The gross amount of our convertible debt which will mature in January 2026, totaled $50 million at quarter-end.

We continue to evaluate refinance options on the debt and are engaged in discussions with certain parties regarding a refinance or other transactions to facilitate payment or other resolution in light of its upcoming maturity. We are looking at a combination of alternatives that will support the company's growth and maximize value. We believe that the improvement in our financial performance this year will enable us to address our convertible debt on terms that will be beneficial to all stakeholders including our shareholders, and we will apprise you when we have more to announce. Turning now to our financial guidance for 2025. And increased financial guidance for the full year of 2025.

As a reminder, Tigo Energy, Inc. provides quarterly guidance for revenue as well as adjusted EBITDA as we believe these metrics to be key indicators of the overall performance of our business. For 2025, we expect revenues and adjusted EBITDA to be in the following range. We expect revenues in the third quarter ended 09/30/2025, to range between $29 million and $31 million. As Zvi noted, the existing backlog and bookings that are expected to ship in the third quarter currently exceed our revenue results for the second quarter. And we are replenishing inventories and increasing capacity in response to increased demand. We expect adjusted EBITDA to range between $2 million and $4 million.

Our guidance also incorporates GAAP operating profitability at the high end of the adjusted EBITDA guidance range. Based on our current demand forecast, we are raising our 2025 financial outlook for the full year and now expect revenue to be between $100 million and $105 million. That completes my summary. I would like to now turn the call back over to Zvi for final remarks. Zvi?

Zvi Alon: Thanks, Bill. We look ahead I am happy to say that even against the backdrop of continued economic uncertainty, we believe that our track record of six consecutive quarters with top-line growth will continue for the remainder of 2025. As demand for our solutions continues to return. Our backlog and bookings to date are bolstering our confidence we firmly believe in the growth perspective of 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. Star one on your telephone and wait for your name to be announced. To withdraw your question, please press star one again. The first question comes from Philip Shen with Roth Capital Partners. Your line is now open.

Philip Shen: Hey, guys. Great execution there. Thanks for taking the questions. Wanted to see if you could provide a little more color on how margins might trend in Q3 and Q4. And then do you have a view on 2026 yet? Or is it still too early? Thanks.

Bill Roeschlein: So we for the balance of the year, we expect to be in the low forties as we are presently. And, we, expect to, be mostly depleted from any of the reserved Go ESS inventory that is being sold off. By the end of the year for the most part. As you already know, our target model is 40% on the gross margin. And that is where we have performed. The last time we started, getting into this revenue geography. And so that is how I would think about the business as I look into 2026. You know, currently, as it stands, we are seeing solid growth solid growth trajectory here.

It is obviously we are not providing guidance, on this call, today related to 2026. But, we are seeing some positive trends out there.

Philip Shen: Great. Thanks, Bill. And sorry if I missed this as I am bouncing between earnings Can you share what the What you expect it to be for Q3? And then International and US revenue split was for Q2. any color you can provide for 2026 Do you do you expect that SKU or mix to shift meaningfully, maybe perhaps to Europe more so than The US. As we get into, the next calendar year. Thanks.

Bill Roeschlein: Sure. So, for Q2, we had, US res 17% of total, revenues. And for the last six months, it was trending a little bit under, 20. So 80% of our revenues is coming from outside of The US market. And, with the EMEA region, you know, representing 65 to 75%. We would expect that trend to continue. I think the conventional wisdom is that, US, will shrink, next year. More so than being than it has this year with you know, obviously, the new congressional bill. But we are seeing a lot of traction in the international market and international front.

That said, even with, with what other competitors may be seeing, our results The US market have been fairly stable, actually. We have been successful in the longer tail of that market. And you know, we are a smaller player. And so, we have the ability to pick up share and gain growth that way.

Zvi Alon: Thanks, Bill. Go ahead, Steve. No. No. I am fine. Bill covered it pretty much. I mean, our exposure to the slowness here in The US is not severe.

Operator: And our next question comes from Amit Dayal with H. C. Wainwright. Your line is open.

Amit Dayal: Thank you. Good afternoon, everyone. With respect to the EBITDA outlook, Bill for the year, should we assume we can potentially end the year positive EBITDA this year?

Bill Roeschlein: I think that would be expected that we would have a positive EBITDA year at this point. Yes.

Amit Dayal: Okay. Thank you. And then you said The US is potentially slowing next year. In that context, do you think, you know, there is enough sort of strength in demand to make up for any sort of you know, gaps in from The US side from the international markets?

Bill Roeschlein: So what is interesting about, I think, that question or situations that we you know, there have been changes with the congressional bill and whatnot, but, we have not had we have not had 45 x credits. We have not had domestic production. We have not been able to take advantage of that situation. We there are a couple of really large ADLs that we have not been on. And we have been able to achieve our success through the longer tail of the market. And, and gaining share that way. And so I think that there is a little bit, less hurt to be, to be had. By players like us.

As we kind of approach the market and go to market that way in The US. As opposed to, those who already have dominant share in May have benefits that are being taken away by the new the new BBB bill. So, that is why I think we have seen stable, steady grow, achievement here in The US market. And I think there are, certain actions that were, certain pockets of the market that we are going after. We recently talked about the repower market. We did a PR on that recently. And so, even in a challenging market or a declining market, we are able to pick up share and grow that way.

And so, that is what we are seeing currently. And I think that we can grow even in even if the market shrinks in The US.

Amit Dayal: Interesting. Yeah. Because I was just trying to see if, you know, if The US market does not deteriorate too much, you know, or less maybe what you think next year, that could provide additional upside to, you know, what you may already be of looking at? For how next year is set up for you?

Zvi Alon: That is absolutely 100% correct. We are holding our position as it is we speak right now despite the challenges And as Bill said, we are not the biggest fish in that market, but we are capturing, areas where it is harder for the other guys to capture. And so therefore, not only on me, maintaining our position, but we are growing market share.

Amit Dayal: Okay. Just last one from me guys. So as your revenues are starting to, you know, improve sequentially from here, how should we think about any operating cost increases I know you indicated there is, you know, looks like more room for operating leverage, but from a cost perspective, do you think we should just maintain our expectations to the current levels?

Bill Roeschlein: So, yeah, you can see we plan to maintain operating expense discipline. On a noncash basis, stock comp did go up a little bit as reflected in the EBITDA reconciliation, and that may cause the OpEx number to drift a little bit higher than where some models may indicate. But the cash OpEx is going to be flat slightly up with growth, but relatively flat. So it is definitely going to be much less than 50% of any growth that we see next year.

Amit Dayal: Understood.

Operator: As a reminder to ask a question, please press 11 on your telephone, and wait for your name to be announced. The next question comes from Eric Stine with Craig Hallum Capital Group. Your line is open.

Eric Stine: Hi, Zvi. Hi, Bill.

Zvi Alon: Hi. Hi, Eric. Hey.

Eric Stine: So maybe I mean, clearly, great trends in Europe, and it looks like market share gains are kind of the predominant factor. But, you know, just would love to get a more detailed breakdown or your thoughts on those market share gains versus recovery in some of the key markets you mentioned you mentioned Poland. You mentioned the Czech Republic. I guess I am missing the another one of Germany. You know, maybe where you stand in the recovery in those markets as well. So in Germany, Germany was a very significant strong performer. It has been recovering for us with sequential growth. For multiple quarters now.

The Czech Republic has been coming from a smaller base, but it has now been that was also growing substantially. It that is that is the market where there is not any duopoly It is a fragmented market. It is it is a great market for us. To be able to participate and take share in. And Poland is a similar situation. Where it was very it was very strong coming into the mid-2023 area. It shrunk a lot, I think, for all participants players in the market. And as of late, that actually was a big contributor in the quarter. And it has been relatively quiet up until this point.

Eric Stine: Know, this is still and United Kingdom are the players who did not really mention, but they are performing very well. At least from a macro renewable perspective.

Zvi Alon: There are other pockets of Europe that, you know, I mentioned countries. And, you know, they are those are those are probably countries that have yet to really come into a growth curve on their own. So, you know, Netherlands, we have mentioned I have mentioned them as Naples. Some of these does not seem like it has been recovering. At the same pace as these other countries. I would like to highlight also that we have stated this in the past multiple times One big differentiator that our product provides the market is we are segment not we are not dependent on any one specific segment.

So residential CNI or utilities scale use the same exact identical SKU, the same order. So if there are any weaknesses let us say, in Germany, in one segment versus the other, we are less impacted. Similarly, in the Czech Republic, we see an increase in the residential or the large utility scale others cannot react to it as quickly as we. We are just naturally there. Because it is the same product that works across the board. Now I can tell you that the behavior of the different markets is not identical. And that is what really positions us to be much stronger, and therefore, we are grabbing market chips. From others.

Eric Stine: Got it. That is helpful. And then, I mean, obviously, market share gains and kind of increase the capture rate that you might have with some of your distributors, I mean, do you mentioned open architecture. I mean, you attribute it How do you kind of attribute the breakdown? Is it is it that? Is it efforts on your part to drive awareness, drive that, you know, increase penetration with those distributors, maybe talk about that?

Zvi Alon: So yes, we first of all, more people know about us and the value proposition. So it becomes a bit easier. With the distribution, we did not add any one significant distributor to our host of distributors globally. And they are all long time with us. They have been with us for quite some time. So we are doing various plans and programs executing marketing progress with them, to improve our footprint within their space and simultaneously we are taking action to spend some energy with the installers themselves to try and actually get them a bit more comfortable and educated about our solution.

So combination of these two efforts which are resulting in the increase that we see in the market. Our peak business is very high. Not just with distribution, but also with existing customers. Installers.

Eric Stine: Okay. Got it. With that, I guess I will jump back in the queue. Thanks.

Amit Dayal: Thank you.

Operator: At this time, I am showing no further questions in the queue, and I would like to turn the call back over to Mr. Alon for closing remarks.

Zvi Alon: Thank you. At this time, this concludes the question and answer session. I would now like to turn the call back to myself. Forget it. 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 to thank the investors for their continued support. Operator,

Operator: Thank you for joining us today for Tigo Energy, Inc.'s Second Quarter 2025 Earnings Conference Call. You may now disconnect.

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