Executive Summary

Q2 2021 revenue rose 57% year over year to $4.35M, with year-to-date revenue up 71.9% to $11.61M; backlog remained robust at ~$77M expected to convert over 12–18 months .
Gross margin compressed to -14.6% due to pandemic carryover effects, a material quality issue on an out-of-state project, and higher labor costs; operating loss widened to -$2.80M .
Management reaffirmed its 2021 outlook to at least double revenue vs 2020 and to improve EBITDA margin through efficiencies and scale; prior guidance also called for gross margin expansion .
Strategic progress included EV charging contracts for branded iSun Roam off-grid solar carports, utility-scale development via Oakwood IP, and an M&A plan to build “iSun Residential” targeting $75M run-rate by end of 2022 .

What Went Well and What Went Wrong

What Went Well

Secured EV charging/carport wins: Contract to build 18 branded iSun Roam off-grid solar carport and EV charging stations at remote trailheads across the U.S. .
Backlog and pipeline strength: Backlog at ~$77M (vs $26M in Q2 2020 and $61M in Q4 2020) with revenue realization expected over 12–18 months, supporting growth visibility .
Strategic platform expansion: Utility-scale entry via Oakwood IP led to development services on eight sites (118MW), an initial $1.25M contract, and potential EPC rights valued at ~$120M (not in backlog); Residential consolidation plan targeting 7,500 customers/75MW/$75M run-rate by end 2022 .
- Quote (CEO): “iSun…is uniquely capable of accelerating the transition from dirty to clean energy required to meet our nation’s increasing energy demands” .

What Went Wrong

Margin pressure: Q2 gross margin fell to -14.6% (vs ~0.0% in Q2 2020) driven by a material non-conformance issue requiring rework and higher labor costs in tight markets .
Higher OpEx: G&A increased with integration costs (iSun Energy LLC acquisition), shareholder meeting/professional fees; Q2 operating loss widened to -$2.80M .
Internal control weakness: Management disclosed disclosure controls “were not effective” due to a material weakness (warrant valuation issue), with remediation plans underway .

Financial Results

Revenue, EPS, Margins vs Prior Periods and Estimates

Metric	Q2 2020	Q1 2021	Q2 2021
Revenue ($USD Millions)	$2.77	$7.26	$4.35
Net Loss per Share (EPS, $)	$(0.16)	$(0.41)	$(0.15)
Gross Margin (%)	~0.0%	1.6%	-14.6%
Operating Loss ($USD Millions)	$(1.04)	$(2.60)	$(2.80)

Estimates: Wall Street consensus via S&P Global was unavailable for ISUN due to mapping issues; no estimate comparisons provided (Values retrieved from S&P Global)*.

Segment Revenue Breakdown (Performance Obligations Satisfied Over Time)

Segment ($USD Millions)	Q2 2020	Q1 2021	Q2 2021
Solar	$2.09	$6.09	$3.52
Electric	$0.48	$0.89	$0.61
Data & Network	$0.20	$0.28	$0.23
Total	$2.77	$7.26	$4.35

KPIs and Balance Sheet

KPI	Q4 2020	Q1 2021	Q2 2021
Backlog ($USD Millions)	$61	~$76.8	~$77
Cash and Equivalents ($USD Millions)	$0.70	$20.21	$20.22
Line of Credit Availability ($USD Millions)	~$3.5 available	$6.0 facility; balance $3.68	$6.0 facility; balance $3.52

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue growth vs 2020	FY 2021	“At least double revenue”	“Continues to expect to at least double revenue”	Maintained
Margin outlook	FY 2021	“Gross margin and EBITDA margin expansion”	“Improved EBITDA margin throughout the year” (gross margin not reiterated)	Partially reiterated (EBITDA); gross margin language softened
Backlog conversion	12–18 months	Nearly all backlog to convert in 12–18 months	Backlog (~$77M) to convert in 12–18 months	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’20 and Q1’21)	Current Period (Q2’21)	Trend
Supply chain/material quality	Q1: Significant material non-conformance required rework; COVID-related shutdowns	Continued margin impact from prior material issue and labor shortages	Persistent headwind but resolving as projects complete
Labor market/tightness	Q1: Higher labor costs; alternative labor methods	Continued higher labor costs impacting margins	Ongoing pressure
Backlog and pipeline	Q4: $61M backlog; strong pipeline	~$77M backlog; conversion in 12–18 months	Strengthening backlog
EV charging/clean mobility	Acquisition of iSun Energy LLC; product portfolio	EV charging/carport contracts awarded; branded iSun Roam deployment	Execution momentum
Utility-scale entry	Oakwood IP acquisition initiated in Q2	118MW dev services + potential $120M EPC rights (not in backlog)	Expanding addressable market
Capital and liquidity	Q1: $20.2M cash; warrants/direct offering proceeds	$20.22M cash at Q2; ATM in place	Strong liquidity retained
Internal controls	Restatements/warrant accounting in Q1	Controls “not effective”; remediation planned	Identified weakness; remediation underway

Note: Edited transcript published on Business Wire confirms discussion of Q2 results and outlook .

Management Commentary

Strategic context (CEO): “The recent trend towards the electrification of everything – particularly automobiles - suggests that we are about to experience a generational increase in electricity demand… we’ve no choice but to rely on renewable energy sources to meet increased demand” .
Value proposition: “We combine the capabilities of a Utility and Industrial scale EPC with those of a consumer-facing residential and commercial EPC and an EV charging solutions provider… [to] leverage economies of scale to improve margin performance” .
Outlook reaffirmation: With ~$77M backlog and strong pipeline, iSun “continues to expect to at least double revenue in 2021… [and] generate improved EBITDA margin throughout the year” .
Margin headwinds (MD&A): Q2 gross margin impacted by material non-conformance and labor shortages; rework without incremental revenue pressured profitability .

Q&A Highlights

Backlog conversion timing: Management reiterated expectation to convert nearly all backlog over 12–18 months, underpinning 2021–2022 revenue visibility .
Margin remediation: Clarified that margin pressures were tied to a specific material issue and elevated labor costs; focus on efficiencies and scale to improve EBITDA margins in 2H21 .
Growth initiatives: Discussed EV charging/carport deployments and utility-scale development services/EPC opportunities not yet reflected in backlog, offering upside optionality .
Liquidity/capital plan: Reaffirmed robust cash and at-the-market program availability to support execution of backlog and M&A strategy .

Estimates Context

Consensus EPS and revenue estimates for Q2 2021 via S&P Global were unavailable due to a Capital IQ mapping issue; comparisons to Street estimates are not provided (Values retrieved from S&P Global)*.
Given reaffirmed guidance (double 2021 revenue vs 2020) and margin commentary, sell-side models may need to lower near-term gross margin assumptions while maintaining revenue trajectory, with EBITDA margin improvement deferred to 2H21 .

Key Takeaways for Investors

Revenue trajectory intact: Backlog (~$77M) and pipeline support 2021 growth; management reiterates “at least double” 2021 revenue vs 2020, a key narrative anchor .
Margin recovery is the swing factor: Q2 margin compression was event-driven (material issue) and market-driven (labor); watch 2H21 EBITDA margin improvement vs guidance .
Strategic optionality beyond backlog: EV charging/carport deployments and utility-scale development/EPC rights (~$120M not in backlog) provide upside if converted .
Liquidity supports execution: ~$20.22M cash and capital access (ATM/shelf) provide flexibility to execute backlog and M&A (Residential roll-up) without near-term financing risk .
Risk monitor: Material weakness in internal controls (warrant accounting) and continued labor/supply chain tightness are near-term headwinds; track remediation progress and gross margin prints .
Trading implications: Reaffirmed top-line guidance is supportive; margin prints and conversion of non-backlog utility-scale opportunities are likely stock catalysts near-term .

ISUN, INC. (ISUN)·Q2 2021 Earnings Summary