Pineapple Energy Inc. (PEGY) reported significant financial changes in its latest 10-Q filing for the third quarter of 2024, reflecting a challenging period marked by declining revenues and increased losses. For the three months ended September 30, 2024, the company generated total revenue of $14.7 million, a decrease of 19.5% from $18.3 million in the same period of 2023. This decline was primarily driven by a 31% drop in residential contract revenue, which fell to $10.6 million from $15.3 million. In contrast, revenue from commercial contracts increased by 64% to $3.6 million, up from $2.2 million.

The company's gross profit for the third quarter was $5.2 million, down from $7.0 million a year earlier, resulting in a gross margin of 36%, slightly lower than the 38% reported in the previous year. Operating expenses also decreased to $6.8 million from $8.6 million, with selling, general, and administrative expenses down 14% to $6.1 million. Despite these reductions, Pineapple Energy recorded an operating loss from continuing operations of $1.6 million, compared to a loss of $1.5 million in the same quarter of 2023. The net loss attributable to shareholders for the quarter was $3.6 million, or $(11.77) per diluted share, compared to a loss of $2.3 million, or $(176.35) per diluted share, in the prior year.

For the nine months ended September 30, 2024, total revenue was $41.5 million, down 31.1% from $60.2 million in the same period of 2023. The decline in revenue was attributed to decreases in both residential and commercial contract revenues. The net loss for the nine-month period was $20.6 million, significantly higher than the $5.3 million loss reported in the same period of 2023.

Strategically, Pineapple Energy completed the divestiture of its legacy operations on June 30, 2023, selling substantially all assets of JDL Technologies, Inc. and Ecessa Corporation. This move was part of a broader strategy to focus on its core business of solar energy solutions. The company also underwent significant changes in its capital structure, including multiple reverse stock splits aimed at meeting NASDAQ listing requirements. A 1-for-15 reverse stock split was executed on June 12, 2024, followed by a 1-for-50 split on October 17, 2024.

As of September 30, 2024, Pineapple Energy reported a working capital deficit of $13.2 million, an increase from $6.6 million at the end of 2023. The company raised over $2 million through an At the Market Offering Agreement but indicated substantial doubt about its ability to continue as a going concern due to insufficient cash flow. Management is actively seeking additional capital through various financing avenues to address its financial challenges.