Name: ISUN, INC. Q1 2023 Earnings Call
Start: 2023-05-16T16:05:44.000Z

Executive Summary

Q1 2023 revenue was $17.4M, up 15% year over year on residential backlog fulfillment and commercial/industrial project starts; gross margin was 20.5% (down 50 bps YoY), and operating loss improved to ($2.7M) from ($5.7M) in Q1 2022 .
The company reaffirmed FY 2023 revenue guidance of $95–$100M and expects adjusted EBITDA profitability by year-end, supported by $178.8M contracted backlog and $32.0M new awards in Q1 .
Segment revenues: Residential $6.9M, Commercial & Industrial $10.3M, Utility & Development $0.2M; C&I contracted backlog ~$152.9M, residential orders ~$17.9M (3–5 months), utility backlog ~$8.0M with 1.6GW in development .
Near-term stock catalysts: maintained guidance, backlog growth, and $2.7M OpEx reduction highlight execution and efficiency focus; management expects margins to recover in Q2 with increased residential implementations .

What Went Well and What Went Wrong

Commercial and industrial execution drove 15% YoY revenue growth to $17.4M; backlog reached $178.8M and new awards totaled $32.0M in Q1 2023 .
Operating loss improved materially to ($2.7M) (vs. ($5.7M) in Q1 2022) on higher revenues and sharply lower OpEx; management cut operating expenses by $2.7M .
Management reaffirmed FY 2023 revenue guidance ($95–$100M) and targets adjusted EBITDA profitability by year-end, citing supportive energy policy (IRA) and efficiency initiatives; “our operating expenses declined by $2.7 million… we reaffirm our annual revenue guidance” — Jeffrey Peck, CEO .

Gross margin contracted 50 bps YoY to 20.5%, reflecting mix; management expects recovery in Q2 with increased residential implementations .
Adjusted EBITDA was a loss of $1.5M (vs. ($0.1M) in Q1 2022), underscoring non-GAAP profitability pressure despite efficiency gains .
Utility & Development revenue remained minimal at $0.2M; utility backlog of ~$8.0M and 1.6GW pipeline suggest future conversion needs and execution risk on development milestones .

Metric	Q3 2022	Q4 2022	Q1 2023
Revenue ($USD Millions)	$19.0	$25.9	$17.4

Metric	Q4 2022	Q1 2023
Gross Margin %	21.0%	20.5%
Operating Loss ($USD Millions)	($2.1)	($2.7)
Net Loss ($USD Millions)	($3.1)	($3.0)
Diluted EPS ($USD)	($0.12)	($0.19)
Adjusted EBITDA ($USD Millions)	$0.3	($1.5)

Segment Revenue ($USD Millions)	Q1 2023
Residential	$6.9
Commercial & Industrial	$10.3
Utility & Development	$0.2

KPI	Q1 2023
Total Contracted Backlog ($USD Millions)	$178.8
New Awards ($USD Millions)	$32.0
Residential Orders ($USD Millions; 3–5 months)	$17.9
C&I Contracted Backlog ($USD Millions; 10–18 months)	$152.9
Utility Contracted Backlog ($USD Millions)	$8.0
Development Pipeline (GW; expected NTP in 2023/early 2024)	1.6 GW

Adjusted EBITDA excludes certain non-cash and other expenses, professional and consulting fees, legal service costs, and one-time reverse merger and recapitalization expenses, with reconciliation provided; Q1 2023 Adjusted EBITDA was ($1.531M) .

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($USD Millions)	FY 2023	$95–$100	$95–$100	Maintained
Adjusted EBITDA Profitability	FY 2023	Adjusted EBITDA profitability by end of 2023	Adjusted EBITDA profitability by end of 2023	Maintained
Gross Margin Trajectory	FY 2023	Continued gross margin expansion	Continued gross margin expansion; margin expected to recover in Q2	Maintained

Topic	Previous Mentions (Q4 2022)	Current Period (Q1 2023)	Trend
Efficiency and OpEx discipline	Management consolidated commercial/industrial teams to flex labor and enhance margins (Q4 call)	Operating expenses reduced by $2.7M; operating loss improved	Efficiency actions progressing; margin recovery anticipated
IRA/macro tailwinds	Climate legislation (IRA) provides industry stability and supports asset values	IRA policy expected to help scale operations and reach profitability	Supportive macro reaffirmed
Backlog and demand	Significant contracts and improving supply chain expected to enable 2023 growth	Backlog $178.8M; $32.0M new awards; strong C&I demand	Backlog expanding
Residential implementations	—	Margin expected to recover in Q2 with planned increase in residential implementations	Near-term margin improvement expected
EV infrastructure	—	New awards include solar and EV infrastructure contracts	Growing opportunity set

“Our momentum as we begin 2023 is strong… our operating expenses declined by $2.7 million… All these efforts provide us the confidence to reaffirm our annual revenue guidance for 2023.” — Jeffrey Peck, CEO .
“Now that our country’s energy policy has been established for the next 10 years through the IRA legislation… we expect those macroeconomic factors to help us scale our operations significantly… and thus generate steadily higher revenue and reach operating profitability.” — Jeffrey Peck .
Conference call details: May 15, 2023 at 8:30 AM ET; replay available; webcast link via investor relations .

Q1 2023 earnings call transcript was not retrievable via the document tools due to a database inconsistency; we verified existence of the transcript (Seeking Alpha) but cannot cite specific Q&A exchanges here .
Call logistics and replay information were provided in the press release and Business Wire call notice .

S&P Global (Capital IQ) consensus estimates for Q1 2023 were unavailable via the GetEstimates tool due to missing company mapping; as a result, we cannot present consensus vs actuals comparison for revenue or EPS this quarter (unavailable via S&P Global) [SpgiEstimatesError; tool output].
Actuals: Revenue $17.4M, gross margin 20.5%, net loss ($3.0M), diluted EPS ($0.19), Adjusted EBITDA ($1.5M) .
Implication: Without consensus anchors, estimate revisions will hinge on reaffirmed FY 2023 revenue range, backlog growth, and margin recovery trajectory; watch for updated street models post-call and as Q2 residential implementations drive margin mix .

Revenue trajectory: Q1 $17.4M (+15% YoY) vs Q4 $25.9M; monitor seasonality and project timing into Q2/Q3 as residential implementations increase .
Backlog visibility: $178.8M contracted backlog and $32.0M new awards underpin FY 2023 guidance confidence; C&I backlog ~$152.9M provides multi-quarter revenue runway .
Margin outlook: Q1 gross margin 20.5% with expected recovery in Q2; efficiency actions (OpEx down $2.7M) and segment consolidation should aid margin expansion .
Profitability path: Adjusted EBITDA loss in Q1 ($1.5M) contrasts with Q4 positive $0.3M; management continues to target adjusted EBITDA profitability by year-end 2023 .
Guidance reaffirmed: FY 2023 revenue $95–$100M maintained; watch project conversion from 1.6GW development pipeline and utility backlog to achieve targets .
Macro tailwinds: IRA-driven policy stability supports financing and development, cited by management as a multi-year growth enabler .
Trading setup: Near-term catalysts include Q2 margin recovery and backlog/award updates; positioning may focus on execution against C&I backlog and residential order conversion .