Q2 2025 Tigo Energy Inc Earnings Call

Speaker #2: Good afternoon. Welcome to Tigo Energy's fiscal second quarter 2025 earnings call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session.

Operator: Welcome to TIGO Energy's fiscal second quarter 2025 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session.

Operator: Joining us today from Tigo are Zvi Alon, CEO, and Bill Roeschlein, CFO. As a reminder, this call is being recorded.

Speaker #2: 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: I would now like to turn the call over to Bill Roeschlein, Chief Financial Officer. Sir, please go ahead.

Speaker #2: Sir, please go head.

Bill Roeschlein: Thank you, Michelle, and it's a pleasure to join you today. Also with us is Zvi Alon, our CEO.

Speaker #3: Thank you, Michelle. And it's a pleasure to join you today. Also with us is Zvi Alon, our CEO. We'd like to remind everyone that some of the matters we'll discuss on this call, including our expected business outlook, our ability to increase our revenues, achieve and maintain profitability, and our overall long-term growth prospects, expectations regarding a continued recovery in our industry, statements about demand for our products, our competitive position and market share, the impact of tariffs, our current and future inventory levels, inventory supply and its impact on our customer shipments, statements about our revenue, adjusted EBITDA, and GAAP operating results for the third fiscal quarter of 2025, and our revenue and adjusted EBITDA for the full fiscal year 2025, statements about our existing backlog and bookings, statements about our ability to restock inventories and increase our capacity in response to increased demand, statements about our ability to refinance our outstanding indebtedness and the expected benefits thereof, our ability to penetrate new markets and expand our market share, including expansion in international markets, and investments in our product portfolio are forward-looking.

Bill Roeschlein: We'd like to remind everyone that some of the matters we'll discuss on this call, including our expected business outlook, our ability to increase our revenues and achieve and maintain profitability, and our overall long-term growth prospects, expectations regarding a continued recovery in our industry, statements about demand for our products, our competitive position in market share, the impact of tariffs, our current and future inventory levels, inventory supply, and its impact on our customer shipments, statements about our revenue, adjusted EBITDA and GAAP operating results for the third fiscal quarter of 2025, and our revenue and adjusted EBITDA for the full fiscal year 2025, statements about our existing backlog and bookings, statements about our ability to restock inventories and increase our capacity in response to increased demand, statements about our ability to refinance our outstanding indebtedness and the expected benefits thereof, our ability to penetrate new markets and expand our market share, including expansion in international markets, and investments in our product portfolio are forward-looking.

Bill Roeschlein: And as such, are subject to known and unknown risks and uncertainties, including, but not limited to, those factors described in today's press release and discussed in the risk factors section of our most recent annual report on Form 10-K, our quarterly report on Form 10-Q for the fiscal quarter ended June 30th, 2025, and other reports we may file with the SEC from time to time. These risks and uncertainties could cause actual results to differ materially from those expressed on this call.

Speaker #3: And as such, we are subject to known and unknown risks and uncertainties, including but not limited to those factors described in today's press release and discussed in the risk factors section of our most recent annual report on Form 10-K, our quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2025, and other reports we may file with the SEC from time to time.

Speaker #3: These risks and uncertainties could cause actual results to differ materially from those expressed on this call. These forward-looking statements are made only as of the date when made.

Bill Roeschlein: These forward-looking statements are made only as of the date when made.

Bill Roeschlein: During our call today, we will reference certain non-GAAP financial measures. We include non-GAAP-to-GAAP reconciliations in our press release, published as an exhibit to our Form 8-K. The non-GAAP financial measures provided should not be considered a substitute for or superior to the measures of financial performance prepared in accordance with GAAP.

Speaker #3: During our call today, we will reference certain non-GAAP financial measures. We include non-GAAP to GAAP reconciliations in our press release, branched as an exhibit to our Form 8-K.

Speaker #3: The non-GAAP financial measures should not be considered a substitute for or superior to the measures of financial performance prepared in accordance with GAAP.

Bill Roeschlein: Finally, I would like to remind everyone that this conference call is being webcast, and a recording will be made available for replay on Tigo's investor relations website at investors.tigoenergy.org.

Speaker #3: Finally, I would like to remind everyone that this conference call is being webcast, and a recording will be made available for replay on TIGO's Investor Relations website at investors.tigonenergy.com.

Zvi Alon: With that, I'd like to now turn the call over to Tigo's CEO, Zvi Alon. Zvi? Thank you, Bill.

Speaker #3: With that, I'd like to now turn the call over to TIGO's CEO, Zvi Alon. Zvi?

Speaker #4: 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.

Zvi Alon: 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 second quarter in more depth as well as provide our guidance for the third quarter and increased financial guidance for the full year of 2025.

Speaker #4: He will discuss our financial results for the second quarter in more depth, as well as provide our guidance for the third quarter and increased financial guidance for the full year of 2025.

Zvi Alon: After that, I will share some closing remarks, tell you about our outlook, and then open the call for questions from our analysts. Approximately two years ago, Tigo became a public company, and although the industry has had to endure some unexpected circumstances along the way, We believe that the value proposition that TIGO brings to this market has not changed. Competitor solutions have historically forced solar system designers and installers to compromise under the one-size-fits-all umbrella. These compromises often led to solar installations that are less efficient, less flexible, less reliable, and more expensive.

Speaker #4: After that, I will share some closing remarks to tell you about our outlook and then open the call for questions from our analysts. Approximately two years ago, Tigo became a public company, and although the industry has had to endure some unexpected circumstances along the way, we believe that the value proposition that Tigo brings to this market has not changed.

Speaker #4: Competitors' solutions have historically forced solar system designers and installers to compromise under the one-size-fits-all umbrella. This compromise often led to solar installations that are less efficient, less flexible, less reliable, and more expensive.

Speaker #4: Then open systems. Open architecture solutions that Tigo enables. Our MLP enables solar system designers to install flexible, best-in-class solar systems without the need to accept compromises such as power clipping, low energy conversion, efficiencies, and high costs.

Zvi Alon: Open Architects. The Tigo Enable. Our NLTE enables solar system designers to install flexible, best-in-class solar systems without the need to accept compromises such as power clipping, low energy conversion efficiencies, and high costs. We believe our value proposition in this market has not changed and that the growth we are experiencing in a challenging market is evidence that our market share is increasing and sustainable.

Speaker #4: We believe our value proposition in this market has not changed and that the growth we are experiencing in a challenging market is evidence that our market share is increasing and sustainable.

Zvi Alon: For the second quarter of 2025, I am pleased to report our sixth increase in sequential quarterly revenue growth. growing 27.7% sequentially and 89.4% on a year-over-year basis. exceeding the high point of our second quarter guidance. We ended the quarter with a total of $24.1 million. and our existing backlog and bookings that are expected to shift in the third quarter currently exceed our revenue results for the second quarter. and we are ramping up capacity. In addition, we shipped 646,000 units of 477 megawatts of MLPE, and based on publicly reported figures and estimates, we believe these figures represent increased market share gain for TIGO during the quarter.

Speaker #4: For the second quarter of 2025, I am pleased to report our sixth increase in sequential quarterly revenue growth, growing 27.7% sequentially and 89.4% on a year-over-year basis.

Speaker #4: Exceeding the high point of our second quarter guidance, we ended the quarter with a total of $24.1 million. Our existing backlog and bookings that are expected to ship in the third quarter currently exceed our revenue results for the second quarter, and we are ramping up capacity.

Speaker #4: In addition, we shipped 646,000 units, or 477,000 megawatts of MLP. Based on publicly reported figures, we estimate these figures represent an increased market share gain for Tigo during the quarter.

Zvi Alon: I am also pleased to report $1.1 million in positive adjusted EBITDA and an increase in cash, cash equivalent, and marketable securities of $7.7 million for the quarter. This performance underscores the leverage in our operating model. as we grow the company while maintaining spending disciplines with operating expenses.

Speaker #4: I'm also pleased to report $1.1 million in positive adjusted EBITDA and an increase in cash, cash equivalents, and marketable securities of $7.7 million for the quarter.

Speaker #4: This performance underscores the leverage in our operating model as we grow the company while maintaining spending disciplines with operating expenses. Finally, we look ahead to the second half of 2025 and into 2026 we are excited about our product roadmap and expect to make several new product announcements in the future.

Zvi Alon: Finally We look ahead to the second half of 2025 and into 2026. We are excited about our product roadmap and expect to make several new product announcements in the future.

Bill Roeschlein: And with that I will turn it over to Bill. Bill? Thank you, Zvi. Turning now to our financial results for the second quarter and the June 30th, 2025. Revenue for the second quarter of 2025 increased 89.4% to $24.1 million from $12.7 million in the prior year period. As Zvi mentioned, this represents significant growth in a challenging market. On a sequential basis, revenues increased 27.7% with improved results coming from many countries in the EMEA region, including Germany, the Czech Republic, and Poland. By region, EMEA revenue was $18.3 million, or 75.9% of total revenues. America's revenue was $4.6 million, or 19.1% of total revenues.

Speaker #4: And with that, I will turn it over to Bill. Bill?

Speaker #3: Thank you, Zvi. Turning now to our financial results for the second quarter ended June 30, 2025. Revenue for the second quarter of 2025 increased 89.4% to $24.1 million, from $12.7 million in the prior year period.

Speaker #3: As Zvi mentioned, this represents significant growth in a challenging market. On a sequential basis, revenues increased 27.7%, with improved results coming from many countries in the EMEA region, including Germany, the Czech Republic, and Poland.

Speaker #3: By region, EMEA revenue was $18.3 million, or 75.9% of total revenues. America's revenue was $4.6 million, or 19.1% of total revenues. And APAC revenue was $1.2 million, or 5% of total revenues.

Bill Roeschlein: And APAC revenue was $1.2 million, or 5% of total revenues. By product family, the second quarter of 2025 had MLPE revenue representing $20.6 million of revenue, or 85.7% of total revenue. GO ESS represented $2.3 million or 9.4% of total revenues. And PREDICT Plus and licensing revenue represented $1.2 million or 4.9% of total revenues during the quarter. Gross profit for the second quarter of 2025 was $10.8 million, or 44.7% of revenue compared to a gross profit of $3.9 million, or 30.4% of revenue in the comparable year-ago period. During the quarter, gross margins benefited by 450 basis points from the sale of a reserved GO ESS inventory.

Speaker #3: By product family, the second quarter of 2025 had MLP revenue representing $20.6 million of revenue, or 85.7% of total revenues. Go ESS represented $2.3 million, or 9.4% of total revenues.

Speaker #3: Predict Plus and licensing revenue represented $1.2 million, or 4.9% of total revenues during the quarter. Gross profit for the second quarter of 2025 was $10.8 million, or 44.7% of revenue, compared to a gross profit of $3.9 million, or 30.4% of revenue in the comparable year-ago period.

Speaker #3: During the quarter, gross margins benefited by 450 basis points from the sale of a reserve Go ESS inventory. Operating expenses for the second quarter were flat at $12.3 million compared to the prior year period.

Bill Roeschlein: Operating expenses for the second quarter were flat at $12.3 million compared to the prior year period. Operating loss for the second quarter decreased by 82.1% to $1.5 million compared to $8.4 million in the prior year period. Gap net loss for the second quarter was $4.4 million compared to a net loss of $11.3 million for the prior year period. Adjusted EBITDA for the second quarter was $1.1 million compared to an adjusted EBITDA loss of $6.4 million in the prior year period. These results reflect a combination of strong top-line performance and the operating leverage in our business model.

Speaker #3: Operating loss for the second quarter decreased by 82.1% to $1.5 million, compared to $8.4 million in the prior year period. GAAP net loss for the second quarter was $4.4 million, compared to a net loss of $11.3 million for the prior year period.

Speaker #3: Adjusted EBITDA for the second quarter was $1.1 million, compared to an adjusted EBITDA loss of $6.4 million in the prior year period. These results reflect a combination of strong top-line performance and the operating leverage in our business model.

Bill Roeschlein: As a reminder, Adjusted EBITDA is a non-GAAP measure that represents net loss as adjusted for interest and other expenses, net income tax depreciation and amortization expense, stock-based compensation, and M&A transaction expenses. Primary shares outstanding were $62.3 million for the second quarter of 2025.

Speaker #3: As a reminder, adjusted EBITDA is a non-GAAP measure that represents net loss as adjusted for interest and other expenses, net income tax, depreciation and amortization expense, stock-based compensation, and M&A transaction expenses.

Speaker #3: Primary shares outstanding were 62.3 million for the second quarter of 2025. Turning to the balance sheet, accounts receivable, net remained consistent at $10.4 million between the first and second quarters and increased from $6.9 million in the year-ago comparable period.

Bill Roeschlein: Turning to the balance sheet. Accounts receivable net remained consistent at $10.4 million between the first and second quarter and increased from $6.9 million in the year-ago comparable period. Inventories net were sequentially flat at $18.9 million at the end of the second quarter compared to $51.3 million in the year-ago comparable period. At this point, we have largely resolved our excess inventory balance and our ramping capacity with our contract manufacturers to address increasing demand. Cash equivalents and short- and long-term marketable securities totaled $28 million at June 30, 2025. On a sequential basis, cash increased by $7.7 million.

Speaker #3: Inventories net were sequentially flat at $18.9 million at the end of the second quarter, compared to $51.3 million in the year-ago comparable period. At this point, we have largely resolved our excess inventory balance and are ramping capacity with our contract manufacturers to address increasing demand.

Speaker #3: Cash, cash equivalents, and short- and long-term marketable securities totaled $28 million at June 30, 2025. On a sequential basis, cash increased by $7.7 million.

Bill Roeschlein: Turning to short-term debt, the gross amount of our convertible debt, which will mature in January of 2026, totals $50 million at quarter end. We continue to evaluate refinance options on the debt and are engaged in discussions with certain parties regarding a refinance or other transactions to facilitate payment or other resolution in light of its upcoming maturity. We are looking at a combination of alternatives that will support the company's growth and maximize value. We believe that the improvement in our financial performance this year will enable us to address our convertible debt on terms that will be beneficial to all stakeholders, including our shareholders, and we will apprise you when we have more to announce.

Speaker #3: Turning to short-term debt, the gross amount of our convertible debt, which will mature in January 2026, totaled $50 million at quarter-end. We continue to evaluate refinance options on the debt and are engaged in discussions with certain parties regarding a refinance or other transactions to facilitate payment or other resolution in light of its upcoming maturity.

Speaker #3: We are looking at combination alternatives that will support the company's growth and maximize value. We believe that the improvement in our financial performance this year will enable us to address our convertible debt on terms that will be beneficial to all stakeholders, including our shareholders, and we will apprise you when we have more to announce.

Bill Roeschlein: Turning now to our financial guidance for the third quarter of 2025 and increased financial guidance for the full year of 2025. As a reminder, Tigo provides quarterly guidance for revenue, as well as adjusted EBITDA, as we believe these metrics to be key indicators for the overall performance of our business. For the third quarter of 2025, we expect revenues and adjusted EBITDA to be in the following range. We expect revenues in the third quarter ended September 30, 2025, to range between $29 million and $31 million. As Zvi noted, the existing backlog and bookings that are expected to ship in the third quarter currently exceeds our revenue results for the second quarter, and we are replenishing inventories and increasing capacity in response to increased demand.

Speaker #3: Turning now to our financial guidance for the third quarter of 2025 and an increased financial guidance for the full year of 2025. As a reminder, TIGO provides quarterly guidance for revenue as well as adjusted EBITDA, as we believe these metrics to be key indicators for the overall performance of our business.

Speaker #3: For the third quarter of 2025, we expect revenues and adjusted EBITDA to be in the following range. We expect revenues in the third quarter ended September 30, 2025, to range between $29 million and $31 million.

Speaker #3: As Zvi Alon noted, the existing backlog and bookings that are expected to ship in the third quarter currently exceed our revenue results for the second quarter, and we are replenishing inventories and increasing capacity in response to increased demand.

Bill Roeschlein: We expect Justin Dibidaw to range between $2 million and $4 million. Our guidance also incorporates gap operating profitability at the high end of the adjusted EBITDA guidance range.

Speaker #3: We expect adjusted EBITDA to range between $2 million and $4 million. Our guidance also incorporates GAAP operating profitability at the high end of the adjusted EBITDA guidance range.

Bill Roeschlein: Based on our current demand forecast, we are raising our 2025 financial outlook for the full year and now expect revenue to be between $100 million and $105 million.

Speaker #3: Based on our current demand forecast, we are raising our 2025 financial outlook for the full year and now expect revenue to be between $100 million and $105 million.

Bill Roeschlein: That completes my summary.

Speaker #3: That completes my summary. I'd like to now turn the call back over to Zvi for final remarks. Zvi?

Zvi Alon: I'd like to now turn the call back over to Zvi for final remarks.

Zvi Alon: Zvi? Thanks, Bill. We look ahead. I'm happy to say that even against the backdrop of continued economic uncertainty, we believe that our track record of six consecutive quarters with top-line growth will continue for the remainder of 2025. as demand for our solutions continues to return. Our backlog and bookings to date are bolstering our confidence.

Speaker #4: Thanks, Bill. As we look ahead, I'm happy to say that even against the backdrop of continued economic uncertainty, we believe that our track record of six consecutive quarters with top-line growth will continue for the remainder of 2025.

Speaker #4: As demand for our solutions continues to return, our backlog and bookings to date are bolstering our confidence. We firmly believe in the growth perspective of our business and look forward to providing additional updates in the coming quarters.

Operator: We firmly believe in the growth perspective of our business and look forward to providing additional updates in the coming quarter. With that, Operator, please open the call for Q&A. Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker #4: With that operator, please open the call for Q&A.

Speaker #2: Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again.

Philip Shen: The first question comes from Philip Shen with Roth Capital Partners. Your line is now open. Thank you guys. Great execution there. Thanks for taking the questions.

Speaker #2: The first question comes from Philip Shin with Roth Capital Partners. Your line is now open.

Speaker #5: Hey, guys. Great execution there. Thanks for taking the questions. I wanted to see if you could provide a little more color on how margins might trend in Q3 and Q4.

Bill Roeschlein: Wanted to see if you could provide a little more color on how margins might trend in Q3 and Q4. And then, do you have a view on 2026 yet, or is it still... So, for the balance of the year, we expect to be in the low 40s, as we are presently, and we expect to be mostly depleted from any of the reserved GOESS inventories that is being sold off by the end of the year, for the most part. As you already know, our target model is 40% on the gross margin, and that is where we have performed the last time we started getting into this revenue geography.

Speaker #5: And then do you have a view on 2026 yet, or is it still too early? Thanks.

Speaker #3: So we, for the balance of the year, expect to be in the low 40s, as we are presently. And we expect to be mostly depleted from any of the reserved Go ESS inventory that is being sold off.

Speaker #3: By the end of the year, for the most part, as you already know, our target model is 40% on the gross margin. That is where we have performed the last time we started getting into this revenue geography.

Bill Roeschlein: And so that's how I would think about the business as I look into 2026. Currently, as it stands, we're seeing a solid growth trajectory here. It's obviously, we're not providing guidance on this call to date as related to 2026, but we're seeing some positive trends out there.

Speaker #3: And so that's how I would think about the business as I look into 2026. You know, currently as it stands, we're seeing solid growth, solid growth trajectory here.

Speaker #3: It's obviously we're not providing guidance on this call today related to 2026. But we're seeing some positive trends out there.

Bill Roeschlein: Thanks, Bill, and I'm sorry if I missed this as I'm bouncing between. Can you share what U.S. Revenue split was for Q2, what you expect. and then any color you can provide for 2020. Thank you. Europe, more so than the U.S. Sure. So for Q2, we had the U.S. rose 17% of total revenues, and for the last six months, it was trending a little bit under 20. So 80% of our revenues is coming from outside of the U.S. market. And with the EMEA region, you know, representing 65 to 75%, we would expect that trend to continue.

Speaker #5: Great. Thanks, Bill. And sorry if I missed this as I'm bouncing between earnings. Can you share what the international and US revenue split was for Q2?

Speaker #5: What you expected to be for Q3, and then any color you can provide for 2026. Do you expect that skew or mix to shift meaningfully, maybe perhaps to Europe more so than the U.S.?

Speaker #5: As we get into the next calendar year. Thanks.

Speaker #3: Sure. So for Q2, the US rose 17% of total revenues, and for the last six months, it was trending a little bit under 20.

Speaker #3: So 80% of our revenues are coming from outside of the U.S. market. With the EMEA region representing 65% to 75%, we would expect that trend to continue.

Bill Roeschlein: I think the conventional wisdom is that the U.S. will shrink next year, more so than it has this year with, you know, obviously the new congressional bill. But we're seeing a lot of traction in the international market, in national front. That said, even with what other competitors may be seeing, our results in the U.S. market have been fairly stable, actually. We've been successful in the longer tail of that market. And, you know, we are a smaller player. And so we have the ability to pick up share and gain growth that way.

Speaker #3: I think the conventional wisdom is that the U.S. will shrink next year more so than it has this year, with, you know, obviously the new congressional bill.

Speaker #3: But we're seeing a lot of traction in the international market, on the international front. That said, even with what other competitors may be seeing, our results in the U.S. market have been fairly stable, actually.

Speaker #3: We've been successful in the longer tail of that market. And, you know, we are a smaller player, so we have the ability to pick up share and gain growth that way.

Bill Roeschlein: Thanks. No, no, I'm fine. Bill covered it pretty much. Our exposure to the slowness here in the U.S. is not severe.

Speaker #3: Zvi, you want to.

Speaker #5: Thanks, . Go ahead, Zvi.

Speaker #3: No, no, I'm fine. Bill covered it pretty much. I mean, our exposure to the slowness here in the U.S. is not severe.

Amit Dayal: And our next question comes from Amit Dayal with H.C. Wainwright. Your line is open. Thank you. Good afternoon, everyone.

Speaker #2: And our next question comes from Amit Dayal with HC Wainwright. Your line is open.

Speaker #6: Thank you. Good afternoon, Yone. With respect to the EBITDA outlook, Bill, should we assume we can potentially end the year with positive EBITDA this year?

Amit Dayal: With respect to the EBITDA outlook bill for the year, should we assume we can potentially end the year positive EBITDA this year? I think that would be expected, that we would have a positive EBITDA year at this point, yes. Okay, thank you.

Speaker #3: I think it would be expected that we would have a positive EBITDA year at this point, yes.

Speaker #6: Okay. Thank ou. And then you said the US is potentially slowing next year. In that context, do ou think, you know, there is enough sort of strength in demand to make up for any sort of, you know, gaps in from the US side from the international markets?

Bill Roeschlein: And then you said the U.S. is potentially slowing next year. In that context, do you think, you know, there is enough sort of strength in demand to make up for any sort of, you know, gaps from the U.S. side, from the international markets?

Bill Roeschlein: So what's interesting about, I think, that question or situations that we you know, there's been changes with the congressional bill and whatnot. But we haven't had we haven't had 45 X credits. We haven't had domestic production. We haven't been able to take advantage of that situation. We there's a couple of really large ABL that we haven't been on, and we've been able to achieve our success through the longer tail of the market. And and getting shares that way. And so I think that there's a little bit less hurt to be to be had by players like us as we kind of approach the market and go to market that way in the US, as opposed to those who already have dominant share and may have have benefits that are being taken away by the new the new BBB bill.

Speaker #3: So what's interesting about, I think, that question or situation is that we, you know, there's been changes with the congressional bill and whatnot. But we haven't had 45X credits.

Speaker #3: We haven't had domestic production. We haven't been able to take advantage of that situation. There are a couple of really large AVLs that we haven't been on.

Speaker #3: And we've been able to achieve our success through the longer tail of the market and gain share that way. And so I think that there's a little bit less hurt to be had.

Speaker #3: By players like us. As we kind of approach the market and go to market that way in the U.S., as opposed to those who already have a dominant share and may have benefits that are being taken away by the new BBB bill.

Bill Roeschlein: So that's why I think we've seen stable, steady achievement here in the US market.

Speaker #3: So that's why I think we've en stable steady growth achievement here in the US market. And I ink there's certain actions that we're certain pockets of the market that 're going after.

Bill Roeschlein: And I think there's certain actions that were certain pockets of the market that we're going after. We recently talked about the repower market. We did a PR on that recently. And so even in a challenging market or declining market, we're able to pick up share and grow that way. And so that's what we're seeing currently. And I think that we can grow even if the market shrinks in the US.

Speaker #3: We recently talked about the repower market. We did a PR on that recently. And so, even in a challenging market or a declining market, we're able to pick up share and grow that way.

Speaker #3: And so that's where we are currently. I think that we can grow even if the market shrinks in the U.S. Zvi?

Zvi Alon: the yeah because I was just trying to see if you know If the U.S. market doesn't deteriorate too much, you know, or less than maybe what you think next year, that could provide additional upside to, you know, what you may already be sort of looking at for how next year is set up for you. That is absolutely 100% correct. We are holding our position as we speak right now, despite the challenges. And as Bill said, we are not the biggest fish in that market, but we are capturing areas where it's harder for the other guys to capture.

Speaker #6: Interesting. Yeah. Because I was just trying to see if, you know, if the U.S. market doesn't deteriorate too much, you know, or less than maybe what you think next year, that could provide additional upside to, you know, what you may already be sort of looking at.

Speaker #6: For how next year is set up for you.

Speaker #3: That is absolutely 100% correct. We are holding our position as we speak right now. Despite the challenges, and as Bill said, we are not the biggest fish in that market.

Speaker #3: But we are capturing areas where it's harder for the other guys to capture. And so, therefore, not only are we maintaining our position, but we are growing market share.

Zvi Alon: And so therefore, not only are we maintaining our position, but we are growing market share.

Bill Roeschlein: Okay, this last one from you guys. So as your revenues are starting to, you know, improve sequentially from here, how should we think about any operating costs increases? I know you indicated there is, you know, looks like more room for operating leverage, but from a cost perspective, do you think we should just maintain our expectations to the current levels? So, yeah, you can see we plan to maintain operating expense discipline on a non-cash basis. Stock comp did go up a little bit as reflected in the EBITDA reconciliation, and that may cause the OPEX number to drift a little bit higher than where some models may indicate.

Speaker #6: Okay, just one last question from me, guys. So, as your revenues are starting to improve sequentially from here, how should we think about any operating cost increases?

Speaker #6: I know you indicated there is, you know, it looks like more room for operating leverage, but from a cost perspective, do you think we should just maintain our expectations at the current levels?

Speaker #3: So, yeah, you can see we plan to maintain operating expense discipline. On a non-cash basis, stock compensation did go up a little bit, as reflected in the EBITDA reconciliation.

Speaker #3: And that may cause the OPEX number to drift a little bit higher than where some models may indicate. But the cash OPEX is going to be slightly up with growth, relatively flat.

Bill Roeschlein: But the cash OPEX is going to be slightly up with growth, but relatively flat. So it's definitely going to be much less than 50% of any growth that we see next year. Understood.

Speaker #3: So it's likely going to be much less than 50% of any growth that we see next year.

Speaker #6: Understood.

Speaker #7: Okay.

Operator: As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced.

Speaker #2: As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. The next question comes from Eric Stein with Craghallam Capital Group.

Eric Stine: The next question comes from Eric Stine with Craig Hallam Capital Group. Your line is open. Hi Zvi, hi Bill. Hi, Eric. Hey, so maybe, I mean, clearly, great trends in Europe, and it looks like market share gains are kind of the predominant factor. But, you know, just would love to get a more detailed breakdown of your thoughts on those market share gains versus recovery in some of the key markets. You mentioned, you mentioned Poland, you mentioned the Czech Republic, I guess I'm missing the another one. Oh, Germany. You know, maybe where you stand in the recovery in those markets as well.

Speaker #2: Your line is open.

Speaker #8: Hi, Zvi. Hi, Bill.

Speaker #6: Hi. Hi, Eric.

Speaker #8: Hey. So maybe, I mean, clearly, great trends in Europe. And it looks like market share gains are kind of the predominant factor. But, you know, just would love to get a more detailed breakdown or your thoughts on those market share gains versus recovery in some of the key markets.

Speaker #8: You mentioned Poland. You mentioned the Czech Republic. I guess I'm missing another one. Oh, Germany. You know, maybe you could share where you stand in the recovery in those markets as well.

Zvi Alon: So in Germany, Germany was a very significant, strong performer. It's been recovering for us with sequential growth for multiple quarters now. The Czech Republic has been coming from a smaller base, but it's now been also growing substantially. That's the market where there isn't any duopoly. It's a fragmented market. It's a great market for us to be able to participate and take share in. In Poland, it was a similar situation where it was very strong coming into the mid-2023 area. It shrunk a lot, I think, for all participants, players in the market. And as of late, that actually was a big contributor in the quarter, and it's been relatively quiet up until this point.

Speaker #3: So, in Germany, Germany was a very significant strong performer. It has been recovering for us, with sequential growth for multiple quarters now. The Czech Republic has been coming from a smaller base, but has now been growing substantially.

Speaker #3: That's a market where there isn't any duopoly; it's a segmented market. It's a great market for us to be able to participate and take share in.

Speaker #3: And Poland is in a similar situation, where it was very strong coming into the mid-2023 area. It shrunk a lot, I think for all participants and players in the market.

Speaker #3: And as of late, that actually was a big contributor in the quarter. And it's been relatively consistent. You know, Italy and the United Kingdom are the players we didn't really focus on, but they are performing very well.

Zvi Alon: Italy and the United Kingdom are the players we didn't really mention, but they are performing very well from a macro renewable perspective. There's other pockets of Europe that I haven't mentioned, countries, and those are probably countries that have yet to really come into a growth curve on their own. So Netherlands, I've mentioned them as an example of some of these. It doesn't seem like it's been recovering at the same pace as these other countries. I would like to highlight also that we have stated it in the past multiple times. One big differentiator that our products provide the market is we are segmented.

Speaker #3: At least from a macro renewable perspective. There's other pockets of Europe that, ou know, I haven't mentioned. Countries and, you ow, those are probably countries that have yet to really come into a growth curve on their own.

Speaker #3: So, you know, the Netherlands was mentioned. I had mentioned it as an example of a country that doesn't seem like it's been recovering at the same pace as these other countries.

Speaker #3: I would like to highlight that we have stated this in the past multiple times. One big differentiator that our product provides to the market is that we are not dependent on any one specific segment.

Zvi Alon: We're not dependent on any one specific segment. So residential, C&I, or utility scale use the same exact identical skew, the same order. So if there are any weaknesses, let's say in Germany, in one segment versus the other, we are less impacted. Similarly, in the Czech Republic, we see an increase in the residential or the larger utility scale. Others cannot react to it as quickly as we. We are just naturally there because it's the same product that works across the board. I can tell you that the behavior of different markets is not identical. And that's what really positions us to be much stronger, and therefore we are grabbing monkey chips from others.

Speaker #3: So residential, C&I, or utility scale use the same exact identical skew, the same order. So if there are any weaknesses, let's say in Germany, in one segment versus the other, we are less impacted.

Speaker #3: Similarly, if in the Czech Republic, we see an increase in the residential or the large utility scale, others cannot react to it as quickly as we can.

Speaker #3: We are just naturally there because it's the same product; it works across the board. Now, I can tell you that the behavior of the different markets is not identical.

Speaker #3: And that's what really positions us to be much stronger; therefore, we are grabbing market share from others.

Zvi Alon: Got it. That's helpful. And then I mean, obviously, market share gains and as you kind of increase the capture rate that you might have with some of your distributors, I mean, do you, you mentioned open architecture? I mean, do you attribute it? How do you kind of attribute the breakdown? Is it is it that is it efforts on your part to drive awareness drive that, you know, increased penetration with those distributors? Maybe talk about that. So, yes, we, first of all, more people know about us and the value proposition. So it becomes a bit easier.

Speaker #8: Got it. That's helpful. And then, I mean, obviously, market share gains and as you kind of increase the capture rate that you might have with some of your distributors. I mean, you mentioned open architecture.

Speaker #8: I mean, do you attribute it? How do you kind of attribute the breakdown? Is it that? Is it efforts on your part to drive awareness and drive that, you know, increased penetration with those distributors?

Speaker #8: Maybe talk about that.

Speaker #3: So yes, we, first of all, more people know about us and the value proposition. So it becomes a bit easier. With the distribution, we did not add any significant distributor to our also distributors globally.

Zvi Alon: With the distribution, we did not add any one significant distributor to our roster of distributors globally, and they are all long time with us, have been with us for quite some time. So we are doing various plans and programs, executing marketing programs with them to improve our footprint within the space. And simultaneously, we are taking action to spend some energy with the installers themselves to try and actually get them a bit more comfortable and educated about our solutions. So it's a combination of these two efforts, which are resulting in the increase that we see in the market.

Speaker #3: And they have all been long-time partners with us, having been with us for quite some time. So we are executing various plans and programs, running marketing initiatives with them to improve our footprint within their space.

Speaker #3: And simultaneously, we are taking action to spend some energy with the installers themselves to try and actually get a bit more comfortable and educated about our solutions.

Speaker #3: So it's been a combination of these two efforts which are resulting in the increase that we see in the market. Our repeat business is very high.

Eric Stine: Our peak business is very high, not just with distribution, but also with the new customers. and Collette. Okay, got it. With that, I guess I will jump back in the queue. Thanks. Thank you.

Speaker #3: Not just with the distribution, but also with existing customers: installers.

Speaker #8: Okay. Got it. With that, I guess I will jump back into Q. Thanks.

Speaker #3: Thank you.

Zvi Alon: At this time, I am showing no further questions in the queue and I would like to turn the call back over to Mr. Alon for closing remarks. Thank you.

Speaker #2: At this time, I am showing no further questions in the Q. I would like to turn the call back over to Mr. Zvi Alon for closing remarks.

Speaker #4: Thank you. At this time, this concludes the questions and answers session. I'd now like to turn the call back to Mr. Zvi Alon.

Zvi Alon: At this time, this concludes the question and answer session. I'd now like to turn the call back to Mr... and myself. Okay.

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

Speaker #4: 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.

Speaker #4: I also want to thank the investors for their continued support. Operator,

Operator: Operator? Thank you for joining us today for TIGO's second quarter 2025 earnings conference call.

Operator: You may now disconnect.