Tigo Energy Reports Significant Financial Challenges, Decline in Revenue and Net Income

Tigo Energy, Inc. reported significant financial challenges in its 10-Q filing for the nine months ended September 30, 2024. The company experienced a substantial decline in revenue, with net revenue for the three months ending September 30, 2024, at $14.2 million, down 16.8% from $17.1 million in the same period of 2023. For the nine-month period, revenue plummeted to $36.7 million, a decrease of 73.0% compared to $136.0 million in 2023. This decline was attributed to reduced demand in key markets, particularly in Europe and the U.S., where macroeconomic conditions, including high interest rates and inventory issues, adversely affected sales.

Gross profit also fell sharply, with a reported $1.8 million for the third quarter of 2024, down from $4.2 million in 2023. For the nine months, gross profit decreased to $8.4 million from $48.4 million, reflecting a gross margin decline of 11.8 percentage points for the quarter and 12.7 percentage points for the nine-month period. The company recorded significant inventory write-downs of $3.4 million for the third quarter and $4.0 million for the nine months, indicating challenges in managing inventory levels.

Tigo Energy's operating expenses decreased, with total operating expenses for the third quarter at $12.2 million, down from $15.4 million in 2023. However, the company still reported a loss from operations of $10.4 million for the third quarter, slightly improved from a loss of $11.2 million in the prior year. The net loss for the third quarter was $13.1 million, a stark contrast to a net income of $29.1 million in the same period of 2023. For the nine months, the net loss reached $35.9 million, compared to a net income of $13.8 million in 2023.

Strategically, Tigo Energy completed a merger with Roth CH Acquisition IV Co. in May 2023, which was treated as a reverse recapitalization. The company also acquired Foresight Energy, which has been rebranded as Tigo Energy AI Ltd., enhancing its capabilities in solar energy data management. However, the company has faced workforce reductions, cutting approximately 15% of its staff in December 2023 and an additional 10% in April 2024, in response to declining demand.

As of September 30, 2024, Tigo Energy reported total assets of $98.6 million, down from $127.8 million at the end of 2023, with total stockholders' equity decreasing to $33.5 million from $62.8 million. The company’s accumulated deficit increased to $111.7 million, reflecting ongoing financial struggles. Tigo Energy is actively seeking additional financing to sustain operations and meet capital needs, as it does not currently have sufficient cash to repay its $50 million Convertible Promissory Note due in January 2026.