Financial Performance - Net revenues for the three months ended September 30, 2025, were $23,896,448, representing an increase from $19,657,905 in the same period of 2024, a growth of approximately 21.4%[117] - Gross profit for the three months ended September 30, 2025, was $13,707,389, with a gross margin of 57.4%, compared to a gross profit of $9,587,229 and a gross margin of 48.8% in the same period of 2024[117] - Adjusted EBITDA for the three months ended September 30, 2025, was $1,956,127, with an adjusted EBITDA margin of 8.2%, compared to an adjusted EBITDA of $(241,712) and a margin of (1.2)% in the same period of 2024[117] - Net revenues for the nine months ended September 30, 2025, decreased by approximately $3.8 million to $50.8 million, a 7.0% decline compared to $54.6 million for the same period in 2024[148] - Contribution profit for the nine months ended September 30, 2025, was $7,593,178, a decrease from $9,714,754 in 2024, while contribution margin was 15.0% compared to 17.8% in 2024[167] - The company reported a net loss of $(17,868,299) for the nine months ended September 30, 2025, compared to $(8,736,845) in 2024, reflecting ongoing challenges[168] Cost and Expenses - Cost of revenues for the three months ended September 30, 2025, increased by $0.3 million to $10.1 million, while as a percentage of revenue, it declined from 49.8% to 42.1%[142] - General and administrative expenses decreased by $1.2 million to $6.0 million for the three months ended September 30, 2025, primarily due to decreased stock-based compensation expenses[144] - Sales and marketing expenses increased by $4.4 million to $9.6 million for the three months ended September 30, 2025, driven by increased stock-based compensation and expanded selling efforts[145] - Cost of revenues for the nine months ended September 30, 2025, decreased by $8.7 million to $22.1 million, improving as a percentage of revenue from 56.4% to 43.6%[149] - General and administrative expenses increased by $5.4 million to $21.3 million for the nine months ended September 30, 2025, mainly due to higher payroll costs and professional fees[152] - Commissions expense for the nine months ended September 30, 2025, was $12,735,435, slightly increasing from $12,663,350 in 2024[168] Cash Flow and Financing - Net cash used in operating activities was approximately $11.1 million for the nine months ended September 30, 2025, a decrease from $12.2 million in the same period of 2024[160] - Net cash provided by investing activities was approximately $13.5 million for the nine months ended September 30, 2025, primarily from cash acquired in the acquisition of Heliogen[161] - Net cash used in financing activities was approximately $4.1 million for the nine months ended September 30, 2025, compared to $8.8 million provided in the same period of 2024[162] - The company has approximately $2.5 million in convertible notes and only $0.1 million of debt on service trucks and vehicles, indicating a low debt level[163] Strategic Initiatives - The company completed the acquisition of Heliogen on August 8, 2025, issuing 6,217,612 shares of class A common stock at an exchange ratio of 0.9591 shares for each share of Heliogen common stock[114] - The company plans to expand its roofing business in all markets to facilitate faster solar installations, particularly in areas affected by severe weather[123] - Future revenue growth is expected to depend on the company's ability to expand into underserved residential markets in states like Florida, Texas, and Virginia[122] - The company aims to increase its in-house sales force and external sales dealers to target new customers in the Southern U.S. regional residential markets[125] - The company has approximately 280 sales agents and 12 independent sales dealers as of September 30, 2025, focusing on a capital-light business strategy[110] Market Conditions - The company is experiencing increased costs due to inflation, particularly in raw materials and labor, which may pressure operating margins[126] - Less than 5% of sales were paid in cash by customers in the nine months ended September 30, 2025, indicating a reliance on third-party financing[131] Performance Monitoring - Management uses non-GAAP financial measures to monitor performance and facilitate comparisons with other companies, highlighting the importance of these metrics in strategic decision-making[165] - Adjusted EBITDA for the nine months ended September 30, 2025, was $(1,924,958), improving from $(8,736,845) in 2024, with an adjusted EBITDA margin of (3.8)% compared to 0.2% in 2024[168] - Total gross profit for the nine months ended September 30, 2025, was $28,085,826, up from $23,176,906 in 2024[167]
Zeo Energy Corporation(ZEO) - 2025 Q3 - Quarterly Report