• Total Revenue (Q4 2024): $6.1 million, up 3% from $5.9 million in Q4 2023.
• Net Loss (Q4 2024): $1.2 million, improved from $1.9 million in Q4 2023.
• Gross Profit Margin (Q4 2024): Increased by 5 percentage points to 45% from 40% in Q4 2023.
• Operating Expenses (Q4 2024): Decreased by 7% quarter-over-quarter.
• Cash Position (Year-End 2024): Greater than $5 million.
• Recurring Revenue from Service and Energy (2024): Greater than $18 million.
• Full Year Revenue (2024): $22.6 million, down 10% from $25.1 million in 2023.
• Net Loss (Full Year 2024): $4.8 million, compared to $4.6 million in 2023.
• Gross Profit Margin (Full Year 2024): Increased to 44% from 41% in 2023.
• Products Revenue (Q4 2024): Decreased 18% to $1.4 million from $1.8 million in Q4 2023.
• Services Revenue (Q4 2024): Increased 14% to $4.1 million from $3.6 million in Q4 2023.
• Energy Production Revenue (Q4 2024): Increased by 2% to $550,000 from $542,000 in Q4 2023.
• Backlog (Year-End 2024): $12.2 million.
• EBITDA Loss (Q4 2024): $1 million, compared to $1.7 million in Q4 2023.
• Adjusted EBITDA Loss (Q4 2024): $692,000, compared to $527,000 in Q4 2023.

• Warning! GuruFocus has detected 3 Warning Signs with TGEN.

Release Date: March 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Tecogen Inc (TGEN) signed a sales and marketing agreement with Vertiv, a leader in thermal management for data centers, which is expected to enhance their market reach.
• The company's recurring revenue from service and energy grew to over $18 million in 2024, indicating a strong and stable income stream.
• Tecogen Inc (TGEN) reported a 5 percentage point increase in gross profit margin to 45% in Q4 2024, reflecting improved profitability.
• The backlog increased to $12.2 million by year-end, suggesting strong future sales potential.
• The partnership with Vertiv is seen as a critical part of Tecogen Inc (TGEN)'s go-to-market strategy, potentially leading to significant sales in the data center market.

Negative Points

• Tecogen Inc (TGEN) experienced a net loss of $1.2 million in Q4 2024, although this was an improvement from the previous year's loss.
• Total revenues for the full year 2024 decreased by 10% compared to 2023, primarily due to a factory move that constrained production.
• Operating expenses included a $109,000 credit loss provision and a $217,000 goodwill impairment charge, impacting financial results.
• The cash position decreased to approximately $4 million by the end of Q4 2024, down from $5.4 million, due to increased working capital needs.
• The company faces challenges in competing against incumbent electric chiller manufacturers, despite the advantages of their Tecochill product.

Q & A Highlights

Q: What was the backlog at the end of the year compared to the last quarter? A: The backlog at the end of the year was just over $12 million, up from $10.5 million reported last quarter.

Q: Over what period is the $20 billion market opportunity for AI and data centers estimated? A: The $20 billion market opportunity is estimated over a 10-year period, based on the number of chips being shipped and the cooling required for them.

Q: Is the current market for data center cooling primarily met by electric-powered chillers? A: Yes, the market is predominantly met by electric-powered chillers.

Q: Is there competition in the natural gas chiller market? A: The only competing gas chiller technology is absorption chillers, which are less efficient and not typically used in critical cooling applications. Currently, there is no direct competition in the gas chiller market.

Q: How did the relationship with Vertiv develop? A: The relationship began when Tecogen's CEO reached out to Vertiv's CEO, recognizing the market potential and the need for a partner to help secure larger sales. Discussions started last year, leading to a partnership agreement.

Q: What is the strategy with Vertiv regarding marketing Tecogen's products? A: Vertiv will market Tecogen's products through their existing channels and relationships with large colocation owners, leveraging their strong position in the market.

Q: Is there potential for Tecogen to use Vertiv's plants to meet increased demand? A: The sales and marketing agreement includes potential supply chain support from Vertiv, and there is a possibility of licensing, although details would be part of a broader supply agreement.

Q: Does the partnership with Tecogen provide Vertiv a competitive advantage? A: Yes, it allows Vertiv to offer a more comprehensive solution, giving them a competitive edge over those who only have electrical cooling systems.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.