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Tigo Energy Reports Record Revenues and Gross Profit For Second Quarter 2023

2023 Year-over-Year Quarterly and First Half Revenue Increased to $68.8 Million and to $118.9 Million, Respectively

Gross Profit of $25.9 million, or 37.6% of Revenues

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

Second Quarter 2023 Financial and Operational Highlights

  • Record revenue of $68.8 million, up 290% compared to $17.6 million in the second quarter of 2022.
  • Record gross profit of $25.9 million, up 368% compared to $5.5 million in the second quarter of 2022, with gross profit margin improving to 37.6% from 31.4% in the second quarter of 2022.
  • Net loss of $22.2 million, compared to net income of $0.2 million in the second quarter of 2022. Net loss includes the mark-to-market impact of $38.3 million related to the conversion feature of the convertible note, partially offset by a discrete tax benefit of $10.9 million in the quarter.
  • Adjusted EBITDA totaled $13.6 million for the second quarter 2023, compared to adjusted EBITDA of $0.8 million in the second quarter of 2022.
  • Closed business combination agreement with Roth CH Acquisition IV Co. (“Roth CH IV”) on May 23, 2023.
  • Announced licensing agreement with GoodWe Technologies Co., Ltd. (“GoodWe Technologies”) to deploy Tigo Module-Level Rapid Shutdown Technology in the GoodWe Rapid Shutdown Device.

Management Commentary

“Tigo achieved a record-setting financial quarter with a number of significant accomplishments, including reaching the highest revenue and gross profit in Tigo’s history and completing a successful closing of our business combination as announced in May,” said Zvi Alon, Chairman and CEO of Tigo. “We drove record quarterly revenue of $68.8 million and quarterly adjusted EBITDA of $13.6 million, and our 2023 first half revenues of $118.9 million exceeded all of 2022 revenues. Notably, we saw sequential revenue growth of 37% in the EMEA region and 59% in the Americas. In addition, our EI solution represented 8% of our revenues during the quarter as it continues to gain market acceptance. We recently introduced this offering to the German market and plan to introduce it in additional geographies in the coming quarters.

“We recently started seeing some demand softening in the channel as supply constraints that defined 2022 began to improve in 2023. We believe these supply constraints led to some across-the-board over-ordering that the industry is now facing. However, end market demand remains strong and we have seen a significant increase in installations, which give us confidence that the current market environment is temporary and our overall growth strategy remains intact. Over the longer term, we remain confident that the market is realizing the value of our technology’s open architecture, easy installation, and powerful software position, and that we can continue to outgrow the market.”

Second Quarter 2023 Financial Results

Results compare the 2023 fiscal second quarter ended June 30, 2023 to the 2022 fiscal second quarter ended June 30, 2022, unless otherwise indicated.

  • Revenue for the second quarter 2023 totaled $68.8 million, a 290% increase from $17.6 million in the prior year period.
  • Gross profit for the second quarter 2023 totaled $25.9 million, or 37.6% of total revenue, a 368% increase from $5.5 million, or 31.4% of total revenue, in the prior year period.
  • Total operating expenses for the second quarter 2023 totaled $17.2 million, a 250% increase from $4.9 million in the prior year period. The increase was primarily due to the impact of M&A transaction costs of $4.1 million and higher headcount to support the Company’s growth initiatives.
  • Net loss for the second quarter 2023 totaled $22.2 million, compared to net income of $0.2 million for the prior year period. Net loss includes the mark-to-market impact of $38.3 million related to the conversion feature of the convertible note, partially offset by a discrete tax benefit of $10.9 million in the quarter.
  • Adjusted EBITDA totaled $13.6 million for the second quarter 2023, compared to adjusted EBITDA of $0.8 million for the prior year period.
  • Cash, cash equivalents, and marketable securities totaled $62.0 million at June 30, 2023.

Third Quarter 2023 Outlook

The Company also provides guidance for the third quarter ending September 30, 2023 as follows:

  • Revenues are expected to be within the range of $41 million to $45 million.
  • Adjusted EBITDA is expected to be within the range of $1 million to $3 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, August 8, 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 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,” “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; 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. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

 

 

June 30,

2023

 

 

December 31,

2022

 

 

 

(Unaudited)

 

 

(Unaudited)

 

ASSETS

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

11,725

 

 

$

36,194

 

Restricted cash

 

 

 

 

 

1,523

 

Marketable securities

 

 

43,909

 

 

 

 

Accounts receivable, net

 

 

45,820

 

 

 

15,816

 

Inventory, net

 

 

50,639

 

 

 

24,915

 

Deferred issuance costs

 

 

 

 

 

2,221

 

Notes receivable

 

 

 

 

 

456

 

Prepaid expenses and other current assets

 

 

3,782

 

 

 

3,967

 

Total current assets

 

 

155,875

 

 

 

85,092

 

Property and equipment, net

 

 

2,837

 

 

 

1,652

 

Operating right-of-use assets

 

 

2,810

 

 

 

1,252

 

Marketable securities

 

 

6,335

 

 

 

 

Intangible assets, net

 

 

2,327

 

 

 

 

Deferred tax assets

 

 

11,147

 

 

 

 

Other assets

 

 

722

 

 

 

82

 

Goodwill

 

 

13,079

 

 

 

 

Total assets

 

$

195,132

 

 

$

88,078

 

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

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

54,120

 

 

$

23,286

 

Accrued expenses and other current liabilities

 

 

10,332

 

 

 

4,382

 

Deferred revenue, current portion

 

 

436

 

 

 

950

 

Warranty liability, current portion

 

 

493

 

 

 

392

 

Operating lease liabilities, current portion

 

 

1,135

 

 

 

578

 

Current maturities of long-term debt

 

 

 

 

 

10,000

 

Total current liabilities

 

 

66,516

 

 

 

39,588

 

Warranty liability, net of current portion

 

 

5,000

 

 

 

3,959

 

Deferred revenue, net of current portion

 

 

186

 

 

 

172

 

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

 

 

27,084

 

 

 

10,642

 

Operating lease liabilities, net of current portion

 

 

1,804

 

 

 

762

 

Preferred stock warrant liability

 

 

 

 

 

1,507

 

Convertible note derivative liability

 

 

61,776

 

 

 

 

Other long-term liabilities

 

 

2,332

 

 

 

 

Total liabilities

 

 

164,698

 

 

 

56,630

 

Convertible preferred stock

 

 

 

 

 

87,140

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

Common stock

 

 

6

 

 

 

1

 

Additional paid-in capital

 

 

120,671

 

 

 

6,522

 

Accumulated deficit

 

 

(90,062

)

 

 

(62,215

)

Accumulated other comprehensive income

 

 

(181

)

 

 

 

Total stockholders’ equity (deficit)

 

 

30,434

 

 

 

(55,692

)

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

 

$

195,132

 

 

$

88,078

 

Tigo Energy, Inc. and Subsidiaries

Condensed Consolidated Statement of Income

(in thousands)

(unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue, net

 

$

68,826

 

 

$

17,639

 

 

$

118,884

 

 

$

27,558

 

Cost of revenue

 

 

42,920

 

 

 

12,107

 

 

 

74,609

 

 

 

19,343

 

Gross profit

 

 

25,906

 

 

 

5,532

 

 

 

44,275

 

 

 

8,215

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

2,424

 

 

 

1,419

 

 

 

4,638

 

 

 

2,855

 

Sales and marketing

 

 

5,163

 

 

 

2,272

 

 

 

9,935

 

 

 

4,341

 

General and administrative

 

 

9,654

 

 

 

1,231

 

 

 

13,217

 

 

 

1,981

 

Total operating expenses

 

 

17,241

 

 

 

4,922

 

 

 

27,790

 

 

 

9,177

 

Income (loss) from operations

 

 

8,665

 

 

 

610

 

 

 

16,485

 

 

 

(962

)

Other expenses (income):

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

2,608

 

 

 

8

 

 

 

3,120

 

 

 

8

 

Change in fair value of derivative liability

 

 

38,251

 

 

 

 

 

 

38,251

 

 

 

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

171

 

 

 

3,613

 

Interest expense

 

 

1,587

 

 

 

400

 

 

 

2,365

 

 

 

849

 

Other (income) expense, net

 

 

(672

)

 

 

24

 

 

 

(1,223

)

 

 

87

 

Total other expenses, net

 

 

41,774

 

 

 

432

 

 

 

42,684

 

 

 

4,557

 

(Loss) income before income tax expense

 

 

(33,109

)

 

 

178

 

 

 

(26,199

)

 

 

(5,519

)

Income tax benefit

 

 

(10,933

)

 

 

 

 

 

(10,933

)

 

 

 

Net (loss) income

 

 

(22,176

)

 

 

178

 

 

 

(15,266

)

 

 

(5,519

)

Dividends on Series D and Series E convertible preferred stock

 

 

(1,248

)

 

 

(1,350

)

 

 

(3,399

)

 

 

(2,140

)

Net loss attributable to common stockholders

 

$

(23,424

)

 

$

(1,172

)

 

$

(18,665

)

 

$

(7,659

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per common share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.84

)

 

$

(0.24

)

 

$

(1.09

)

 

$

(1.59

)

Diluted

 

$

(0.84

)

 

$

(0.24

)

 

$

(1.09

)

 

$

(1.59

)

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

27,750,374

 

 

 

4,836,316

 

 

 

17,174,936

 

 

 

4,824,468

 

Diluted

 

 

27,750,374

 

 

 

4,836,316

 

 

 

17,174,936

 

 

 

4,824,468

 

Tigo Energy, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Six Months Ended

June 30,

 

 

 

2023

 

 

2022

 

Cash Flows from Operating activities:

 

 

 

 

 

 

Net loss

 

$

(15,266

)

 

$

(5,519

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

536

 

 

 

226

 

Reserve for inventory obsolescence

 

 

410

 

 

 

 

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

 

 

3,120

 

 

 

8

 

Change in fair value of derivative liability

 

 

38,251

 

 

 

 

Deferred income taxes

 

 

(11,147

)

 

 

 

Non-cash interest expense

 

 

982

 

 

 

150

 

Stock-based compensation

 

 

863

 

 

 

52

 

Allowance for credit losses

 

 

170

 

 

 

58

 

Loss on debt extinguishment

 

 

171

 

 

 

3,613

 

Non-cash lease expense

 

 

415

 

 

 

 

Accretion of interest on marketable securities

 

 

(204

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(30,057

)

 

 

(5,100

)

Inventory

 

 

(26,134

)

 

 

323

 

Prepaid expenses and other assets

 

 

167

 

 

 

(1,017

)

Accounts payable

 

 

30,254

 

 

 

(77

)

Accrued expenses and other liabilities

 

 

2,267

 

 

 

743

 

Deferred revenue

 

 

(500

)

 

 

(10

)

Warranty liability

 

 

1,142

 

 

 

269

 

Deferred rent

 

 

 

 

 

(135

)

Operating lease liabilities

 

 

(374

)

 

 

 

Net cash used in operating activities

 

$

(4,934

)

 

$

(6,416

)

Investing activities:

 

 

 

 

 

 

Purchase of marketable securities

 

 

(50,221

)

 

 

 

Acquisition of fSight

 

 

(16

)

 

 

 

Purchase of intangible assets

 

 

(450

)

 

 

 

Purchase of property and equipment

 

 

(1,510

)

 

 

(308

)

Disposals of property and equipment

 

 

73

 

 

 

 

Net cash used in investing activities

 

$

(52,124

)

 

$

(308

)

Financing activities:

 

 

 

 

 

 

Proceeds from Convertible Promissory Note

 

 

50,000

 

 

 

 

(Repayment of) proceeds from Series 2022-1 Notes

 

 

(20,833

)

 

 

25,000

 

Repayment of Senior Bonds

 

 

 

 

 

(10,000

)

Payment of financing costs

 

 

(354

)

 

 

(3,483

)

Proceeds from sale of Series E convertible preferred stock

 

 

 

 

 

21,845

 

Proceeds from Business Combination

 

 

2,238

 

 

 

 

Proceeds from exercise of stock options

 

 

106

 

 

 

23

 

Payment of tax withholdings on stock options

 

 

(91

)

 

 

 

Net cash provided by financing activities

 

$

31,066

 

 

$

33,385

 

Net (decrease) increase in cash and restricted cash

 

 

(25,992

)

 

 

26,661

 

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

 

 

37,717

 

 

 

7,474

 

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

 

$

11,725

 

 

$

34,135

 

Tigo Energy, Inc. and Subsidiaries

Non-GAAP Financial Measures

(in thousands)

(unaudited)

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

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net (loss) income

 

$

(22,176

)

 

$

178

 

 

$

(15,266

)

 

$

(5,519

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Total other expenses, net

 

 

41,774

 

 

 

432

 

 

 

42,684

 

 

 

4,557

 

Income tax benefit

 

 

(10,933

)

 

 

 

 

 

(10,933

)

 

 

 

Depreciation and amortization

 

 

294

 

 

 

114

 

 

 

536

 

 

 

226

 

Stock-based compensation

 

 

497

 

 

 

26

 

 

 

863

 

 

 

52

 

M&A transaction expenses

 

 

4,113

 

 

 

 

 

 

4,246

 

 

 

 

Adjusted EBITDA

 

$

13,568

 

 

$

750

 

 

$

22,130

 

 

$

(684

)

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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