TYGO - NASDAQ

Good afternoon. Welcome to Tigo Energy's Fiscal Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Joining us today from Tigo are

Good afternoon. Welcome to Tigo Energy's Fiscal Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Joining us today are -- from Tigo are

Thank you, Bill. To begin today's discussion, I will highlight key areas in our recent financial and operational performance before turning the call over to our CFO, Bill Roeschlein. He will discuss our financial results for the fourth quarter in more depth as well as provide our guidance for the first quarter of 2026 and full year of 2026. After that, I will share some closing remarks, tell you about our outlook and then open the call for questions from the analysts. I'm pleased to report that we ended 2025 with yet another strong quarter and that against the backdrop of seasonally slower periods for our industry. During the year, we continuously built on our 2024 results, and I'm exceptionally proud of what our team here at Tigo has accomplished in 2025. Beginning with achieving $103.5 million in revenue, representing annual year-over-year growth of 91.7%. Moving to the fourth quarter of 2025, we reported total revenue of $30 million, a 73.8% increase over the $17.3 million in revenue was reported in Q4 of 2024. During the quarter, we shipped 744,000 of 567 megawatts of MLPE. During the total -- the total shift to customers is 2.7 million units for the year. I will also note that our optimizer unit volume outgrew that of our main competitor in this space, indicative of the market share gains we achieved in 2025. Turning now to our geographical results. We saw continued sequential growth in several countries within the EMEA and Americas region during the fourth quarter, which comprised 60.3% and 3.8%, respectively. Of our quarterly revenue, by country, we performed exceptionally well again in the U.K., which grew 72.3% sequentially and in the U.S., which grew 24.4% sequentially. These results were offset by seasonal softness in Germany and Italy and lower revenue from Eastern Europe, specifically the Czech Republic and Poland, when unusually cold weather patterns this year has significantly impacted the solar installations. While the environment has improved lately, we do expect some lingering effects to spill into our first quarter of 2026 revenue expectation. Within the APAC region, we saw renewed growth as revenues more than doubling sequentially with particularly strong results in Australia. Looking ahead, we're excited about a number of growth drivers that we believe will propel continued growth in 2026 and beyond. In the U.S. market, we have a number of initiatives in play. We have now established a domestic contract manufacturing operation in the U.S. that allows us to provide -- to produce 45x qualified domestic content and CoC compliant MLPE to support our U.S. customers and our EG4 partnership. Initial deliveries are scheduled for May and we believe that our combined optimized inverter product will be well received by the market. In addition, we also see continued growth in our repower initiatives and expect further growth in this area in 2026. Finally, we recently announced our new GO battery for the U.S. market, featuring 5 to 30-kilowatt hour capacity in 5-kilowatt hour modules and 11.4 kilowatt hour optimized output -- continuous output. We expect this new battery to further enhance upsell opportunities and produce additional growth for us in the U.S. market. In EMEA and APAC regions, we have witnessed some competitors reducing their physical footprint in the market. We expect to benefit from this dynamic as the year progresses and we are currently making investments in this area. Finally, we continue to push the envelope technologically and have a robust pipeline of new product introductions in the 3 market segments we serve with mainly MLPE, energy storage solutions and AI-driven software solutions that we look forward to updating investors as the year progresses. I would like to close by stating that we achieved an important milestone during the fourth quarter of 2025 by eliminating our $50 million convertible promissory note ahead of its January 2026 maturity. This allowed us to end the year with no outstanding debt maturities, removed $2.5 million in annual interest payment obligations, strengthened our balance sheet and capital structure and sets us up to success in 2026. And with that, I will turn it over to Bill. Bill?

Thanks,

Thank you, Bill. As we close out 2025, we are encouraged by the progress we have made in the market that continues to evolve. While the broader industry has faced periods of volatility, our performance this year reinforces our confidence in the strength of Tigo's platform, the resilience of our business model and the value of our differentiated product portfolio. We remain confident in the long-term growth trajectory for our business and look forward to providing additional updates in the coming quarters. With that, operator, please open the call for Q&A.

[Operator Instructions] Our first question comes from the line of Eric Stine of Craig-Hallum Capital Group.

So first question here. I know, obviously, you're guiding to strong growth in 2026. On the last call, I recall you referring to or talking about potentially substantial growth opportunities that you see out there. So I'm curious, I mean, it seems to me that you're not really including those potential substantial opportunities in your current guidance, so do want to confirm that. But then also, as you think about some of those things that could drive upside, maybe how you rank them based on the list of things that you expected to be positive drivers here in '26.

Sure. So the EG4 relationship, the partnership that we think is going to be very successful. That said, where we just baked in the minimum order quantities for the contract that we signed as opposed to assuming more. I think that there's potential -- potentially large upside to the amount of business that can be generated there, but we'll have to update you as the year goes along as it relates to that particular partnership. The battery, we introduced the GO battery, and we believe that it's going to positively impact revenues on that product line. We anticipate doing something similar in Europe. And that will be -- that will constitute a full refresh of the battery product line since we introduced it a few years ago. Very excited about that. And that is another growth opportunity that

Got it. And maybe a follow-up there. Just thinking about 2026 in the U.S., I mean, is it -- maybe it's too early to call kind of the makeup of repowering versus EG4 versus the battery offering. Any clarity there would be helpful. And then just curious, in terms of repowering, I mean, I would assume it's still very early days, but just any details or thoughts around that would be helpful.

Eric, look, we've not gotten into the differentiation between those 3, and we are excited about all of them. And just to provide an additional insight, we are very excited about the EG4 and to the extent that they increase their market share by a small number, it can represent a very significant growth for us. But as we said, we are trying to be conservative about it, but we're very excited about that.

Our next question comes from the line of Amit Dayal of H.C. Wainwright.

Congrats on the strong results and outlook. With respect to this EG4 commentary, is EG4 upside more likely to come through in the second half of the year? Just trying to see what we should look at from an indicator perspective to see the traction from this relationship?

So initial -- we mentioned in the script, the initial deliveries will begin in May. And so you will start to see some benefit in the second quarter, and then you'll see a full benefit beginning in Q3. And just to -- by way of background, this is an optimized inverter U.S. domestic content, qualified -- ITC qualified product for the U.S. market that would be the only other serious competition to the main player in the U.S. market here who have demonstrated success in a large amount of the business. So there's a large opportunity here for Tigo and EG4 to capture quite a bit of share here. And so we're very optimistic about it.

Understood. And just in relation to that and in the context of the financing, do you now have sort of the working capital to pursue even more aggressive growth, say, in 2027 than the growth that you are highlighting for 2026?

We do. We think we're in good shape here on our balance sheet. It's very clean, it's debt-free and we have the flexibility to be able to follow the initiatives that we want. There's -- we're excited about our U.S. manufacturing endeavor that has, again, ITC domestic content qualified products for U.S. customers who want that. And we think we've got the growth capital that we need to further expand our growth.

I am showing no further questions at this time. I would now like to turn the call back over to Mr. Alon. Sorry, it looks like someone entered the queue. One moment, please. Our next question comes from the line of Gus Richard of Northland Capital Markets.

Yes. Just on your new storage system, can you talk about the energy efficiency of it and what the parasitic loss will be relative to competition?

So it definitely is providing a very interesting modern technology platform. And I believe that on all parameters, we're actually exceeding the competitors right now, including the fact that we are going to be able to provide consistent or constant 11.4 kilowatt hour output from the battery here in the U.S.

Okay. And then just a housekeeping question. Was there any previously written off inventory sold in the quarter?

Yes, there was. And it had about a 3 percentage point impact on the margins, so margins in the quarter.

Okay. And thinking about margins going forward, given the new product coming out in the second quarter, should we think about gross margins hanging in there around 40% or maybe high 30s?

Our target model is 40%, and I think we're running above that. And I think I would expect our goal is to maintain that 40%.

[Operator Instructions] We'll give a couple of seconds here before we move to closing. Okay. Seeing none, I'd now like to turn the call back over to Mr. Alon for his closing remarks.

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