Tecogen (TGEN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $4.7M, down 29.9–30% year-over-year due to a factory move halting production; net loss widened to $1.54M (6 cents/share) from $0.78M (3 cents/share) in Q2 2023.

• Service and energy production revenues grew 4.4% and 37.5% year-over-year, respectively, offsetting some product revenue decline.

• Factory relocation completed in April 2024 without a dilutive equity raise; manufacturing expected to resume in Q3.

• Optimism for future growth driven by product improvements, new market entry (including data centers), and a robust project pipeline.

• Cash from operations was $0.1M for the first half; cash balance at June 30, 2024 was $0.8M.

Financial highlights

• Q2 2024 total revenue: $4.7M, down from $6.7M in Q2 2023; gross profit: $2.1M; gross margin improved to 44% from 42% year-over-year.

• Q2 2024 net loss: $1.54M (EPS $(0.06)), up from $0.78M (EPS $(0.03)) in Q2 2023.

• Adjusted EBITDA loss was $1.3M, compared to $0.6M loss in Q2 2023.

• Operating expenses in Q2 2024 decreased 1.7% year-over-year to $3.55M.

• Cash and cash equivalents at June 30, 2024 were $0.8M–$0.84M, rising to $1.1M after a $500K credit line draw in July.

Outlook and guidance

• Manufacturing operations expected to resume in Q3 2024 after the factory move, with anticipated substantial product orders, including from data centers.

• Q3 2024 revenues expected between $5.7M and $6.2M, with Q4 anticipated to be stronger if projected orders close.

• Backlog at June 30, 2024 was $5.1M–$6M, with an additional $5–$7M in prospective orders expected by end of Q3.

• Anticipates improved margins in Q4 2024 due to service price increases and product improvements.

• Management believes existing resources and cash flows will be sufficient for the next twelve months but may seek additional capital for growth.