TIGO ENERGY, INC. Q2 FY2025 earnings call

• Tigo had sixth increase in sequential quarterly revenue growth in Q2 2025, growing 27.7% sequentially and 89.4% year-over-year, ending the quarter with $24.1 million. - Existing backlog and bookings expected to ship in Q3 exceed Q2 revenue and they are ramping up capacity. - Shipped 646,000 units or 477 megawatts of MLPE, believing to have increased market share gain. - Reported $1.1 million in positive adjusted EBITDA and increase in cash, cash equivalents and marketable securities by $7.7 million. - Excited about product roadmap and expect new product announcements in future.

For the second quarter of 2025, revenue increased 89.4% to $24.1 million from $12.7 million in the prior year period. By region, EMEA revenue was $18.3 million or 75.9% of total revenues. 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, MLPE revenue was $20.6 million or 85.7% of total revenues. GO ESS represented $2.3 million or 9.4% of total revenues and Predict+ and licensing revenue represented $1.2 million or 4.9% of total revenues during the quarter. Gross profit for the second quarter 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.

• For Q3 2025, expect revenues to range between $29 million and $31 million and adjusted EBITDA to range between $2 million and $4 million. - Raising 2025 financial outlook, now expect revenue to be between $100 million and $105 million.

• Forward-looking statements are subject to known and unknown risks and uncertainties, including factors in press release and Risk Factors section of recent reports, which could cause actual results to differ materially from those expressed on the call.

Q: Guys, great execution there. 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?

A: So for the balance of the year, we expect to be in the low 40s 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 up 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's how I would think about the business as I look into 2026. Currently, as it stands, we're seeing solid growth trajectory here. It's obviously -- we're not providing guidance on this call to date related to 2026. But we're seeing some positive trends out there.

Q: And sorry if I missed this as I'm bouncing between earnings. Can you share what the international and U.S. revenue split was for Q2 what you expect it to be for Q3? And then any color you can provide for 2026. Do you expect that SKU or mix to shift meaningfully maybe perhaps to Europe more so than the U.S. as we get into the next calendar year?

A: Sure. So for Q2, we had U.S. rose 17% of total revenues. And for the last 6 months, it was trending a little bit under 20%. So 80% of our revenue is coming from outside of the U.S. market. And with the EMEA region representing 65% to 75%. We would expect that trend to continue. I think the conventional wisdom is that the U.S. will shrink next year more so than being -- that it has this year with obviously the new congressional bill. But we're seeing a lot of traction in the international market -- international front. That said, even with what other competitors may be seeing, our results in the U.S. market have been fairly stable, actually. We've been successful in the longer tail of that market. And we are a smaller player. And so we have the ability to pick up share and gain growth that way.

Q: With respect to the EBITDA outlook, Bill, for the year, should we assume we can potentially end the year positive EBITDA this year?

A: I think that would be expected that we would have a positive EBITDA year at this point, yes.

Q: Okay. And then you said the U.S. is potentially slowing next year. In that context, do you think there is enough sort of strength in demand to make up for any sort of gaps in -- from the U.S. side from the international markets?

A: So what's interesting about, I think, that question or situations that we -- there's been changes with the congressional bill and whatnot. But -- we haven't had 45x credits. We haven't had domestic production. We haven't been able to take advantage of that situation. We -- there's a couple of really large ABLs that we haven't been on -- and we've been able to achieve our success through the longer tail of the market and gain share that way. And so I think that there's a little bit less hurt to be had by players like us as we kind of approach the market and go to market that way in the U.S. as opposed to those who already have dominant share and may have benefits that are being taken away by the new BBB bill. So that's why I think we've seen stable, steady growth achievement here in the U.S. market. And I think there's certain actions that were -- certain pockets of the market that we're 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're able to pick up share and grow that way. And so that's what we're seeing currently. And I think that we can grow even if the market shrinks in the U.S.

Q: So maybe, I mean, clearly, great trends in Europe, and it looks like market share gains are kind of the predominant factor. But -- just would love to get a more detailed breakdown of your thoughts on those market share gains versus a recovery in some of the key markets you mentioned. You mentioned Poland, you mentioned the Czech Republic, I guess I'm missing another one, on Germany. Maybe where you stand in the recovery in those markets as well.

A: 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's now been also growing substantially. That's a market where there isn't any duopoly. It's a fragmented market. It's a great market for us to be able to participate and take share in. And Poland is a similar situation. where it was very strong coming into the mid-2023 area. It's 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's been relatively quiet up until this point. Italy and United Kingdom are the players that you didn't really mention but they are performing very well from a macro renewable perspective. there's other pockets of Europe that I haven't mentioned, the countries. And those are probably countries that have yet to really come into a growth curve on their own. So Netherlands, you've mentioned -- I've mentioned that a somebody doesn't seem like it's been recovering at the same pace as these other countries.