TYGO - Earnings call transcript Q1 2024

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Operator

Good afternoon. Welcome to Tigo Energy's Fiscal First Quarter 2024 Earnings Conference Call. [Operator Instructions] Joining us today from Tigo are Zvi Alon, CEO; and Bill Roeschlein, CFO.

As a reminder, this call is being recorded.I would now like to turn the call over to Bill Roeschlein, Chief Financial Officer.

Bill Roeschlein

Thank you, operator. and breakeven, everyone call, of outlook regarding including to cash remind discuss matters and a to and Factors reach this breakeven we those and new risks are our on our unknown in flow recovery like to portfolio from described factors in with that prospects, the some subject in fiscal we'll our year ability time are today's long-term our markets discussed of We'd growth EBITDA expectations second adjusted markets, product on expected XX-K their and for to Risk our XXXX, and XXXX, statements and may known time. on its quarter industry, and and expand our current reports the revenue in expansion financial penetrate XX, future customer the uncertainties, in future and on on about and market for and share, impact EBITDA adjusted section results, our Form such, release fiscal the to levels international shipments file ended to ability including, the including inventory report impact annual inventory, our SEC forward-looking, press the business supply December but as and limited investments not results and differ risks on cause materially actual uncertainties this to These could from call. those expressed non-GAAP measures. of when our made.During financial we as reference date made the forward-looking only certain are These statements call today, will to reconciliations GAAP Form to non-GAAP press furnished an include our our We release as X-K. in exhibit GAAP.Finally, be remind and is this performance prepared for webcast superior at Investor a call not I The Relations on with Tigo's non-GAAP financial available the a website to being investors.tigoenergy.com. recording measures measures be substitute considered accordance to conference of will replay everyone like would or made should provided that financial in for like the Tigo's to Alon. now call Zvi would turn to CEO, over I Zvi?

Zvi Alon

over provide for our I the to discussion, quarter before as quarter second discuss the results begin. its market will He Roeschlein. well XXXX. right, before opening our company, call that, will begin closing the recent I'll questions.All for background of outlook CFO, some our Bill.To some plans remarks you, turning share in performance more and today's Bill the depth Thank call give financial for on our let's as After

offer for we those diverse software new One, Tigo solutions TSX storage utility For energy XXXX, Tigo, may during is you stands X second range scale who solar energy one, yield of leader deliver and our of solar flexible MLPE flexible installers storage a the meet components be costs solutions solutions. operating primary solutions journey, energy in safety, line of enhance of on built product, global our a product commercial energy Energy storage MLPE, a to to that increase to hardware comprises and modular residential, needs mission solutions worldwide.The and design categories. systems. and GO and designed in ESS flagship At smart intuitive our and Founded is as which to installation. intelligent lower be

of solutions Energy well GO third demand as believe solar Predict+ as is opportunity and flagship now and EI inverter, GO ATS results outlook. recent GO battery, We energy both the ESS States internationally.Transitioning United for EV software the GO and Our GO the in platform. charger. management the storage our review Intelligence, which and includes that platform, And one, fleet the operational large durable monitoring to range and includes software our

our challenges inventory business faced call, second and of primarily discussed significant our in in XXXX, the levels half elevated due channel. to previous As the the

size DC of of revenues and stabilize in we this MLPEs megawatts shipped approximately that the watts. reported since report an to We revenue or XXX pleased assumed XXX,XXX $X.X XXX are we year. seen panel start However, have million at

We X.X X.X megawatts and respectively. also battery, inverter hours shipped of hours megawatt and DC

continue the services will ARR to exceeding annual revenue in with region, be XXXX. cautiously platform, in that $X we or make million.Geographically, region able revenue, XX% recurring are optimistic stabilizing, its Additionally, AI to which the and be to software second Tigo half our in appears comprised grow headway of the we the Americas share of

Specifically, we solar as required. rapid experience in slow Brazil, capabilities to legally are are where beginning for becoming shutdown ours such traction increasingly sales products

inventory replenishment which for us growth. regions Within are pockets of XX% of to Germany, see generated region, the we include Italy Czech Notable Republic. of activity EMEA beginning improvements revenue, and some and

revenue, C&I have utility projects newest which XX% MLPE, the solutions very The the of provide timing the the TSX-X. upward into overall the to are trend we than key of region industry MLPE continuing that designed an pleased see lower satisfy to due half power, design also nature comprised our uneven alternatives. maximum The MLPE are and a of of later TSX and of the line multiyear Still, marketplace results the in XXXX.We involved provide leading-edge announce cost all products with we with Within are region, higher a current represents introduction needs. enabling higher TSX-X C&I been the flexibility, culmination of effort the that that total APAC to of to customers in. several family while

rapid deployment most product safety.In include are in the that the its provide energy unique monitoring we generation safety through shutdown to believe MLPE and searching flexible reliable and activates technology mixture family the and panels, most highest customers a optimization, to with TSX-X safest, TSX-X Particular capabilities. And rapid maximum the power most represents the support the is TSX-X cost-effective, higher and the high today. a summary, panels designed its single bifacial the especially for in enables level power useful selective installation. that use systems of marketplace also designed abilities of that shutdown at who We solutions multifactor available for case

its the solution charger some residential highlight EI DC-coupled TSX grid as to to and the like battery to else charger. part into our existing other designed European with first to the the for year. consists of to for a we quarter Rican And the introduction households dependable required have demand for the product outlook GO the our EI solution the flexible, the market solution second EI modular new Tigo MLPE of commissioning solar from recent EI disruptions.Turning complement installation rest In Tigo market, The a Puerto a and products, Flex of EV would announcements installation protect whole the market. is and of residential Tigo Tigo inverter, everything of fast, addition, made, portfolio backup our and solar own and including GO we the TSX-X, EV introduction

X, continue promote products flexibility X the offer. solution; focus to will and growth suite penetrate our expand we following We X, of the of new ] our X, and of tenets the on markets expand markets; [ cost-effectiveness existing strategy:

in industry-wide discussed be we inventory navigating prior have oversupply believe we problem. We quarters, through to end of what still are the the tail

reflects the as in second new guidance expectation the transitional be industry quarter that nature will Our the a supply-demand reaches equilibrium.

greater will to the the to the to currently second first take and once are see quarter half a our discuss of year we XXXX Additionally, over recovery Bill? details. that, in Bill that experiencing turn results recovery we XXXX I of hold.With sharper seeds outlook the call in financial the expect

Bill Roeschlein

coming million loss of due the prior our EBITDA an $X.X of lower of in in the dollar gross for batteries margin basis, first compared many primarily ASPs Revenue prior GO to our $X.X to for EBITDA revenue Thank first quarter in percentage ESS mix to $X.X a million to volumes, million as the legal period. first audit due the first including of Americas lower QX you, product due financial year-over-year year the change the loss $X.X period. to for Germany, basis to public ASPs decreased for XX% was incurred total XX, The prior quarter prior the million revenues fees million geography, was while of in of adjusted countries was was lines.Total income sales year total to margin in $X.X $X.X increase $X.X quarter. quarter The period.GAAP XX% $XX.X quarter X% $XX.X by million we within were in $XX.X XXXX period. million, for the product with and the operating improved first or revenue and year ended compared results a our in loss from APAC compared sequential on or primarily Zvi.Turning million sequential XX.X% was quarter March by EMEA higher of or the basis, total compared or million a points comparable XX.X% profit year the for the Czech totaled was lower Italy region, to from revenues. XXXX. the the on revenue Republic.Gross primarily XXXX year year ago period. revenues XX% million revenue of million On the $X.X on quarter revenues first the $X.X up XXX the totaled driven a totaled a from year-over-year On comparable $X.X By in profit million results Operating gross in was quarter period. net first million products. improved primarily now of million prior company. $XX.X million net to of and that decline decline battery the expenses decreased or in and in EMEA Adjusted basis to $XX.X XX% operating quarter compared

and the of and of cost ago our marketable represents was compared Inventories period. In sheet. $X.X to the of and to in decreased million last and inventory $XX.X $X.X to to depreciation, ago of of to to quarter. $X.X profit by million cash million shares last $X.X our M&A receivable $XX.X payable net The period. XX, outstanding XX.X million compensation securities short sold $X.X cash of inventory, which the sequential a million us generate quarter quarter year million expenses.Primary compared the operating EBITDA decline partially decline the $X.X adjusted $XX.X XXXX.Turning by $XX.X reminder, due long-term the of million loss totaled the as quarter, cash for quarter million future continue the and we to decline comparable year goods accounts or first first for decreased As by EBITDA million, quarters.Cash, transaction expect $X.X offset comprised X% equivalents quarter at stock-based adjusted in comparable million majority balance will and was in million were first Accounts conversion for in and vast adjusted amortization of net in March million primarily XXXX.

efforts facilities credit available regarding mentioned our sheet favorable enhance on and believe recovery initiated business generation. that to we the continue of our to we to costs discussions to we terms profitability will As the items performance the lower call, reduction breakeven continues in we for financial align other cash discretionary our better be which April, current points personnel cost industry our last more balance pace model included and have with improve.In flexibility, as and

expect the GAAP on XXXX, of a will range actions, As to per we the $XX expected remainder in basis of a quarter. that expenses non-GAAP million be result normalized per operating of in quarter, be operating $XX.X these with million expenses of range for the

to level considering financial of these approximately a breakeven of breakeven take at supply current now I million million we and cash million of a our turn approximately normalized expect few inventory point over revenue adjusted minutes call for on million a the With on hand, XXXX to our the at and second Zvi, an $XX outlook to basis.Before EBITDA point to changes $XX revenue quarterly $XX quarter. back $XX provide I'll quarterly the our

believe adjusted we business. Tigo indicators overall As for as a key be as performance quarterly provides reminder, these metrics well of our revenue for to the guidance EBITDA as

expect the of second quarter in the we For range. and adjusted be revenues XXXX, following EBITDA to

in XXXX, to the and second $XX expect quarter XX, between million June million. revenues $XX range ended We

and registration approach will we million adjusted on soon in a filing to their our as wish S-X call to XX. Tigo's S-X for these our stale with which We public under I'd to as company, over rights as upcoming under comply like and to expect post-effective and to registered our do only the we to we X-year final remarks. which that Under completes certain our received my obligations done be rights a back no went range new current loss $X.X being filing be S-X register it anniversary filing, to a is expect filing this Zvi? will majority there from the will amendment around our registration XX, other stock of eligible. million.Finally, $X as we be and Zvi now We affiliates.That shares emphasize summary. filed affiliates between shareholders to have registered will S-X an holdings primary holders our May their S-X waiver April EBITDA turn

Zvi Alon

are call can macroeconomic look our Overall, business, we the current believe effectively please the updates started we corner prospects additional turn growth coming long-term our in team for Bill. that, Q&A. confident the open Thanks, We the while business With have our in our environment, firmly and providing industry operator, as the quarters. to recovers. manage and that forward for to of

Operator

the of from Philip Instructions] ROTH. our from Shen question [Operator first line And comes

Philip Shen

sense million think that be possible? think Wanted to QX a talking this need $XX of you as it be Europe year Could one when do adjusted you it you to $XX First to on is revenue. I breakeven. Bill, wait get million were Or for to expect XXXX? improves? might until revenue about the EBITDA

Bill Roeschlein

Tigo. Zvi as to leading much the we relates as to alluded So to, sharper a second half recovery it see

a see we're not our And this see a providing that specific occurring. to strong that we do So there, EBITDA perspective, path breakeven from guidance of while probability clear year. we

Philip Shen

year, nice I to earlier thought QX? see when you And better are it still you ramp? QX. then I we expect wait I maybe Do by then we do back do know that talk here, and it even inventory questions inventory, think to QX, with you if by and QX, one guys these this confident so might you relates half, geography, the channel point, bump? I feel in a have Okay. actually that? think think and mean QX. mean U.S. expect you to then as but a few your at we ramp you you about clear also can channel clears but Europe said more the should revenue think you Do then

Bill Roeschlein

additional the are the their like. have first So current have are stocks inventory, but half in the destocking look we will color year, we add as through still quite depleted who But have in complete. jump transitional I'll and some because nature process now But destocking we into customers as view, be in our Zvi quarter of of not we the customers as replenishing and process. second let I'll the we're who feel viewing mostly you'd

or Tigo. function much the a more be so sure don't or end And But We're not bit recovery to line. to second I in a step increase I inventory of necessarily could be primarily straight step QX, it particular, don't Pacific. quarter it's said get we this is have destocking more a problem for our of beginning it think time. of or a at a I think little multiple the be QX. calls, of the view, Asia didn't that half It an an ourselves leave It's going it's I of going the the if could of issue on a be much jump. function in think been by Americas And a a with sharper to think EMEA issue in much room. of quarter. year And a do geography, have we've the whole

Philip Shen

talked Can Great. done like some the might some you much being with And share not. remaining about EMEA? be you in how destocking, customers

average specifically? like in XX Does of meaningfully you Or out about it's So many weeks still do there it's or on in might the channel? how a you think lower? Europe it when blended basis, sound weeks think be north

Bill Roeschlein

the quarter U.K., to we're I customers quantitative your Italy at enough from today. We're the address we're The also amount X the our coming strong information, quarter, But seeing currently activity you a strength pipeline also seeing we're continuing really guess, the we're to up than give it seeing a the continue even second seeing we're is continued seeing into Germany, and go is can quarter. through first we corner, We from quarter. was during results lot little our period the stronger and question. strong exists, second in strength as activity, month we're of year. bounce thing as same That a we more of that and into about we're in is some think last don't to least that we than I turned that what expect definitely the bit just strong back. booking

Philip Shen

Great.

have I one question. Sorry, last

your and versus And sorry as dollars. Can degree much in each even well, of and how to of you if sell-through at talk maybe terms the Enphase for it about about you that quarter millions QX? of sell-in guys and talked undershipments earlier all QX speak but is SolarEdge,

Bill Roeschlein

that is the steadily be. better were to second degree So that we the we distributors, able getting inventory at here year. in that pipeline do us specifically XX% sell-through current did we call, we the being to forward data in QX, we talking on period of just as in EBITDA levels for get replenishment booking where metric think our occurred understanding But an of should or to their And are quarter. we in the has than amount kind from upward lower with progressing provide customers, move and don't activity any be that least also with the as see we I current last where see We and say and us told the through confidence. of you breakeven

that kind put a where mean, I recovery as serves guidepost all you to think we tell think I of us. So would normalized

Zvi Alon

clarification. one add just I will

Those Bill Germany fact U.K., where that's about it the that and talked the that occurring. and required. countries happening. But our like main is mentioned, and that the replenishment it's markets, is we are know Just the in

Philip Shen

Great.

luck and the of Best on. it I'll Okay. with pass ramp,

Operator

And from our Eric line Hallum. comes question next of Craig from Stine the

Eric Stine

the a So balance I just bit. little on wanted to focus sheet

quarter, that inventory were benefit, and you you hopeful did some get get last think you would line. the I on working capital some

here expectation the what curious of remainder Just for your the year. is

you about out? expect that you just inventory to early did to You but QX expect talk how in down, work seen that play and maybe you've what

Bill Roeschlein

and that, current had We've is of quarter previous we've liabilities $XX million payable than lowered worked settled, current to and through accrued had AP our amount more much The be lower. that inventory the don't some and Again, we million to future to guidance continue and that's is new million, point. $XX $XX have also million quarters. we going our $XX something in breakeven $XX cash guided at that the million as by we've given to

sold. So cash burn X least at you those from which conversion, our coming inventory or the of minimal our fronts very given within can see of range. we've would our of cash a the predictable goods with what rate on cost is of XX% generation that be provided upwards bulk

Eric Stine

Okay. All right. That's helpful.

QX Maybe rates are it sounds to hopeful, have I sight at like Is line So more credits that some helpful you've now, helpful. have to you expected maybe for be of to just some that rates. it been with forward. just sticking for of mentioned it, time, and negotiations then would not is the and you That you flexibility continue for facilities and that is in just to mean, you line side for right know. think in say That acceptable. going better waiting liquidity fair of

Bill Roeschlein

the the just money there's current like, Yes. get better in moment, borrow recovery we little on to and And projection it as shape the bit what rates. correct. environment creates market. once essentially negotiate clarity the consensus That's an a over still industry of some looks a that more At and risk

So how we that. to we prudent be want in do

Operator

question Gus Northland. next comes of the line Our Richard from Instructions] from [Operator

Auguste Richard

getting doing more you're on list. is that how going? process How vendor wondering approved Just on

Zvi Alon

good customers next don't actually have I are we conversation the the predictions, provide We want different major progress, that to here or a any I suppliers quarter. in think making And U.S. but will

Auguste Richard

ground, while something just totally was you back, or that's opportunities all we're feedback I talked you Got the now reemerged our optimizers. some and sort of And it. on that And not that about has scale a wondering the materialized? that getting is for then

Bill Roeschlein

have really we anything. promising you to very with We pipeline and obviously, a that, [indiscernible] actually till to respect good. announce But wait have feel to

Auguste Richard

you can other give color bit to just provide better Any flavor? little a

Bill Roeschlein

several ] utility pipeline good we're through activity the by government There [ in be type a opportunities where good very And amount of we're market to projects situations. a our affected of around of So subsidies continues velocity currently. working the getting not pretty RFP promising has with world, requests. and MXX those

Auguste Richard

one Just the revenue opportunity stop. you just size for give I'll of the the to Can sort pipeline? of in and what relative you market, in all them seeing the you're follow-on

Bill Roeschlein

millions are of there mean dollars. I

be So in they're X, I X, the mean they X, XX, to tend sizable.

So...does that help?

Auguste Richard

of sort That me. trends it Yes. for up

Operator

of next from Sameer our from Wainwright. And Joshi H.C. question comes line the

Sameer Joshi

what and Looking revenues you see I or level product? of expect kind TSX-X, for at do down arrangement products the different geographies? marketing And seeing services, software then to say, the pipe, any the are the initial we the coming already or Predict+ new the are is any And from, of products you guess, it it? interest when

Zvi Alon

So is specifically it current the is the in high required. the TSX-X, answer bifacial, where quick to markets power high and and

We is to are amongst Nobody competition. the the for in at specification us even highest MLPE close rated the market.

are advanced projects shipped but have testing, the The answer to which scale. we have and we have question, utility the installations And is be we reproduction shortly. for already? first of shipping most shipped orders, will So received and we C&I and it no, whatnot. have we And

So and we and market the it with that covering. exceptionally confident are technology solution is

Sameer Joshi

is XXXX early Predict+, Or to revenues initial talk Predict+? expect from about it too it? we the should for And

Zvi Alon

existing who expanding each. and footprint are activity Predict+ both product is the of new and customers are the we grow extended continuing to as expected, we from seeing customers

share we U.S. we couple before, last interesting the of the in are which sales and late quarters. product some year, discussed the able the seeing Europe and of to effort in be started we opportunities, we've As in we believe next fairly will

sizable of XXX% them, of them companies. are very All

Sameer Joshi

interpreting up clarification adjusted seems a versus I'm on It the to if of $XX capital, correct please it right? million I'm things. to just maybe million wrong. cash EBITDA to those I like from cash just and of this, the $XX breakeven $XX $XX million And breakeven implies million me $XX revenues. looking hear. to Good am working tied versus million kind $XX inventory, million at

Bill Roeschlein

cash of the The has XX%, of goods already cost XX% that reality based sold been flow for. the on breakeven paid is

at So you some you're a that cash XX% you only capital AP, AR paying working a rate get on in XX% and based the But high then to have paying provided teens the revenue. adjustments as to we for et new make And model are guidance in cetera. we maybe in EBITDA OpEx some guided gross the breakeven range. that to to. and is margins And the on XX%

obviously, higher at So you at to XX% sooner, the there XX%, XXs. low get but you're gross in margin, a

Sameer Joshi

that. for all lot, a Thanks Bill, have. That's clarifying I Great.

Operator

today's conclude back session program. further the remarks. like I'd does This the Alon to of for question-and-answer program hand to Zvi any

Zvi Alon

contribution the dedicated ongoing for thank for to Thanks to customers want especially today. for us work. our their partners well continued as employees I hard their thank to investors also everyone, want again, their Operator? for as and support. continued I joining our

Operator

for XXXX for joining conference you first today us Thank quarter earnings Tigo's call.

now may You disconnect.

Tigo Energy (TYGO) 14 May 242024 Q1 Earnings call transcript