Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tigo Energy Inc (TYGO, Financial) reported stabilization in revenues with $9.8 million for the quarter and significant shipments of MLPEs and energy storage products.
- The company introduced the TS4-X, a new line of MLPE that offers higher power and safety features, designed for C&I and utility markets.
- Tigo Energy Inc (TYGO) has seen growth in annual recurring revenue from its AI software services platform, exceeding $1 million.
- Geographical expansion is underway, with increasing market share in the Americas and EMEA regions, and new product introductions like the GO EV charger in Europe.
- Management expressed confidence in achieving a sharper recovery in the second half of 2024, anticipating a return to EBITDA breakeven based on current strategies and market conditions.
Negative Points
- Revenue for Q1 2024 significantly decreased by 80% year-over-year from $50.1 million to $9.8 million.
- Gross profit margins declined both year-over-year and sequentially, impacted by lower sales volumes and changes in product mix.
- Tigo Energy Inc (TYGO) reported a GAAP net loss of $11.5 million for the quarter, compared to net income of $6.9 million in the prior year.
- The company is still navigating through an industry-wide inventory oversupply issue, which has affected financial performance and market dynamics.
- Operating expenses increased year-over-year primarily due to higher audit and legal fees, contributing to an operating loss of $9.1 million.
Q & A Highlights
Q: First one is on the adjusted EBITDA breakeven. Bill, I think you were talking about $33 million to $35 million of revenue. Wanted to get a sense for when you expect that revenue to be possible? Could it be Q4 this year as Europe improves? Or do you think it might need to wait until 2025?
A: Bill Roeschlein, CFO of Tigo Energy, Inc., mentioned that they see a clear path to EBITDA breakeven this year, indicating a strong probability of achieving this within the current year without providing specific guidance.
Q: As it relates to channel inventory, at one point, earlier this year, I think you guys thought it might clear by Q2. Do you still expect that? I mean do you think Q3, we see a nice ramp and then even better Q4.
A: Bill Roeschlein explained that the current quarter is transitional as some customers are replenishing stocks while others are not through with destocking. He anticipates that by the second half of the year, the destocking process will mostly be complete, suggesting a potential revenue ramp starting in Q3.
Q: Can you share how much might be like remaining in EMEA? And you talked about some customers being done with the destocking, some not. So on a blended average basis, when you think about how many weeks might be out there in the channel?
A: Bill Roeschlein noted strong recovery signs from Germany and the UK, indicating significant market activity and bookings in these regions. He did not provide specific weeks of inventory but confirmed a noticeable improvement in pipeline activity compared to the previous quarter.
Q: So I just wanted to focus on the balance sheet a little bit. I think last quarter, you were hopeful that you would get some working capital benefit, and you did get some on the inventory line. Just curious what your expectation is here for the remainder of the year.
A: Bill Roeschlein discussed continued inventory conversion into cash, expecting this trend to persist throughout the year, contributing significantly to the company's cash flow.
Q: Looking at the new products and services, I guess, or software products coming down the pipe, the TS4-X, are you already marketing it? And what is the level of interest you are seeing it from, say, the different geographies?
A: Zvi Alon, CEO of Tigo Energy, highlighted that the TS4-X is targeted at markets requiring high specification MLPEs. He mentioned that they have received orders and are shipping for advanced testing, expressing high confidence in the technology and its market potential.
Q: And for the Predict+, is it too early to talk about it? Or should we expect 2025 initial revenues from Predict+?
A: Zvi Alon responded that Predict+ is growing as expected, with significant activity from both new and existing customers. He anticipates being able to share more substantial updates in the coming quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
