Tecogen (TGEN) investor relations material

Executive summary

• Q1 2026 revenue declined 12.9%–13% year-over-year, mainly due to a 53.6%–54% drop in Products sales, while Services and Energy Production revenues grew modestly.

• Net loss widened to $2.12M–$2.2M from $0.66M–$0.7M, reflecting lower gross profit and a 23.9%–24% rise in operating expenses, driven by R&D and manufacturing expansion.

• Gross profit margin was 40.9%, down from 44.3% year-over-year, supported by cost-cutting measures and price increases in Products.

• Significant operational progress includes an imminent 1 MW chiller deployment with Vertiv, new data center use cases, and over $8 million in approved or expected non-data center projects.

• Management and board demonstrated confidence through insider share purchases after last quarter.

Financial highlights

• Total Q1 2026 revenue: $6.34M–$6.4M, down from $7.28M–$7.3M year-over-year (-12.9%).

• Products revenue fell 53.6%–54% to $1.18M–$1.2M; Services revenue rose 9%–9.2% to $4.6M–$4.64M; Energy Production revenue increased 5% to $0.52M.

• Gross profit was $2.59M–$2.6M, down from $3.2M–$3.22M year-over-year.

• Operating expenses rose 23.9%–24% to $4.7M–$4.73M, mainly due to higher costs in R&D, services, and manufacturing.

• Adjusted EBITDA loss was $1.68M–$1.7M, compared to $0.38M–$0.4M loss year-over-year.

• Cash and cash equivalents at quarter-end were $9.3M–$9.33M, down from $12.43M at year-end 2025.

Outlook and guidance

• Cost reduction initiatives are underway, with full impact expected in Q3 2026 and margin improvements anticipated.

• Over $8M in new or expected orders, including $2.3M with purchase orders and deposits, are expected to strengthen cash position and near-term revenue.

• Management expects cash and cash equivalents plus operating cash flows to be sufficient for the next 12 months, but may seek additional capital for growth.

• Several projects are scheduled to be operational by early next year, with a focus on converting the opportunity pipeline.