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Tigo Energy(TYGO) - 2024 Q3 - Earnings Call Transcript
TYGOTigo Energy(TYGO)2024-11-09 12:30
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Financial Data and Key Metrics Changes - Revenue for Q3 2024 decreased 16.8% to 14.2millionfrom14.2 million from 17.1 million in the prior year period, but increased 12.1% sequentially [15][16] - Gross profit for Q3 2024 was 1.8millionor12.51.8 million or 12.5% of revenue, down from 4.2 million or 24.3% in the prior year period, primarily due to a 3.4millioninventorycharge[16][19]−OperatinglossforQ32024decreasedby7.23.4 million inventory charge [16][19] - Operating loss for Q3 2024 decreased by 7.2% to 10.4 million compared to 11.2millionintheprioryearperiod[18]−GAAPnetlossforQ32024was11.2 million in the prior year period [18] - GAAP net loss for Q3 2024 was 13.1 million compared to a net income of 29.1millionintheprioryearperiod[18]−AdjustedEBITDAlossforQ32024decreased12.729.1 million in the prior year period [18] - Adjusted EBITDA loss for Q3 2024 decreased 12.7% to 8.3 million compared to 9.5millionintheprioryearperiod[19]BusinessLineDataandKeyMetricsChanges−Theutilityscalemarketisakeyfocus,withTigoselectedtodeliverover97,000MLPEunitsforBrazil′slargestfloatingsystem[8]−Theannualrecurringrevenue(ARR)nowstandsat9.5 million in the prior year period [19] Business Line Data and Key Metrics Changes - The utility scale market is a key focus, with Tigo selected to deliver over 97,000 MLPE units for Brazil's largest floating system [8] - The annual recurring revenue (ARR) now stands at 1.3 million per year, with six new contracts signed during the quarter totaling 700,000[11]MarketDataandKeyMetricsChanges−PositivesalesgrowthwasobservedintheCzechRepublic,Spain,theUnitedKingdom,PuertoRico,Thailand,andAustralia,whilesluggishgrowthwasnotedinGermany,Italy,andtheNetherlands[12][13]−Tigo′sglobalDCoptimizermarketshareincreasedfrom9700,000 [11] Market Data and Key Metrics Changes - Positive sales growth was observed in the Czech Republic, Spain, the United Kingdom, Puerto Rico, Thailand, and Australia, while sluggish growth was noted in Germany, Italy, and the Netherlands [12][13] - Tigo's global DC optimizer market share increased from 9% in 2022 to 13% in 2023 [7] Company Strategy and Development Direction - The company aims to mitigate competitive pressure through a robust product portfolio and expects revenue and profitability to increase steadily throughout 2024 and into 2025 [26] - Expansion into new markets is a key focus area, with positive trends in various regions helping to offset sluggish growth in larger markets [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving profitable growth in the near future, despite ongoing industry headwinds [24][26] - The company anticipates revenues for Q4 2024 to range between 14 million and 17million,withadjustedEBITDAlossexpectedbetween17 million, with adjusted EBITDA loss expected between 6.5 million and $8.5 million [24] Other Important Information - The company welcomed back Anita Chang as Chief Operating Officer, which is expected to enhance operational efficiency [14] Q&A Session Summary Question: Outlook for margins and revenue cadence through 2025 - Management expects normalized margins in the mid-30s, potentially reaching high 30s or 40% as revenue grows [29][30] - Revenue growth is projected to be flat to up 20% in Q4 2024, with year-over-year growth potentially reaching 70% to 100% [32] Question: Status of channel inventory in Europe - Management indicated that channel inventory is mostly cleared, with some elevated levels remaining due to macroeconomic factors [35][36] Question: Pricing actions in response to competitors - The company has not decreased prices and maintains stable pricing for its products, with new product lines introduced at higher prices [42][43] Question: Current market share trends - Management noted continued progress in market share gains, particularly in Europe, and indicated that Tigo is among the best-selling optimizers in key markets [46][49] Question: Pipeline for licensing rapid shutdown devices - The company has been steadily adding licensees and receiving positive feedback on market performance [50][51] Question: Future inventory charges - Upcoming inventory charges are expected to be related to the GO ESS product line, not obsolescence, and are part of a year-end audit [60][62]