Executive Summary

Q1 2025 delivered revenue growth and improved profitability: revenue rose 17.6% year over year to $7.28M, gross margin expanded to 44.3% (vs. 41.6%), operating loss narrowed to $0.59M, and net loss to $0.66M ($0.03/share) with adjusted EBITDA improving to -$0.38M .
Management highlighted building AI/data center momentum: active Vertiv go-to-market work, quotes on larger projects, and LOIs sought to scale supply chain; Tecogen’s gas chillers can free up “30% or more” electrical capacity for computing and lower cooling opex by ~50% vs electric chillers, supporting the data center thesis .
Balance sheet/liquidity: cash at quarter-end was $4.07M; current cash “presently” ~$3M post material purchases; no maturing short-term debt after director notes extended; backlog communicated as ~$10.8M (note: GAAP backlog disclosure of $9.52M excludes service contracts) .
Tariff exposure and uplisting: management expects limited tariff impact (domestic supply chain) and sees potential competitive benefit vs imported absorption chillers; TGEN uplisted to NYSE American on May 6, 2025, improving liquidity and visibility—both potential catalysts .
Street estimates: S&P Global consensus for Q1 2025 EPS and revenue was unavailable; management said results were “slightly ahead of our forecast,” but no formal guidance was provided (see Estimates Context) .

What Went Well and What Went Wrong

What Went Well
- Revenue and margin inflection: Revenue +17.6% YoY; total gross margin 44.3% (+2.7 pts), with Products margin up to 41% from 30% (price increases and mix), and Energy Production margin +7 pts (lower fuel) .
- Operating leverage: Operating loss improved to -$0.59M from -$1.05M YoY; adjusted EBITDA loss narrowed to -$0.38M from -$0.90M .
- Strategic progress: “We have now quoted multiple larger [data center] projects… Vertiv has assigned a project manager… marketing and sales training underway,” positioning for larger orders and faster scaling .
What Went Wrong
- Energy Production revenue fell 27% YoY on contract expirations, partially offset by margin improvement; Services margin dipped 1 pt on higher labor/material as engine improvements rolled out .
- Cash used in operations was -$1.17M in Q1 (vs. +$0.25M prior year), driven largely by deferred revenue drawdown as projects shipped and working-capital needs for product growth .
- Estimates/guidance visibility: No formal quantitative guidance; S&P Global consensus not available for benchmarking; timing of large data center orders remains uncertain despite increased quoting .

Financial Results

Consolidated P&L vs prior quarters

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($)	$5,630,130	$6,075,522	$7,277,770
Gross Margin %	44.1%	45.0%	44.3%
Operating Income (Loss) ($)	$(873,223)	$(1,137,012)	$(594,244)
Net Income (Loss) ($)	$(930,408)	$(1,186,067)	$(659,922)
Diluted EPS ($)	$(0.04)	$(0.05)	$(0.03)

Segment revenue and margins (Q1 YoY)

Metric	Q1 2024	Q1 2025
Products Revenue ($)	$1,491,398	$2,533,809
Services Revenue ($)	$4,014,310	$4,245,022
Energy Production Revenue ($)	$680,389	$498,939
Total Revenue ($)	$6,186,097	$7,277,770
Products Gross Margin %	30%	41%
Services Gross Margin %	48%	47%
Energy Production Gross Margin %	31%	38%
Total Gross Margin %	42%	44%

Key performance indicators

KPI	Q3 2024	Q4 2024	Q1 2025
Backlog ($)	~$10.8M (includes $2M prepaid service)	~$12.2M	~$10.8M; mgmt also expects >$2M projects to enter backlog in Q2
Adj. EBITDA ($)	$(746,000)	$(691,894)	$(381,394)
Cash & Equivalents (End) ($)	$1,282,238	$5,405,233	$4,066,793

Actual vs. Street estimates (S&P Global)

Metric	Period	Actual	S&P Global Consensus	Surprise
Revenue ($)	Q1 2025	$7,277,770	N/A*	N/A*
Diluted EPS ($)	Q1 2025	$(0.03)	N/A*	N/A*

*Values retrieved from S&P Global. Consensus not available for this issuer/period.

Notes: GAAP backlog in 10-Q (excludes service contracts) was $9.52M as of 3/31/25; slide/call backlog metrics include additional items (e.g., prepaid service), explaining differences .

Guidance Changes

No formal quantitative guidance was provided in the Q1 2025 press release, 8‑K, 10‑Q, or earnings call; management emphasized pipeline progress and order timing uncertainty for large data center deals .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Quarter	None	None	Maintained (no formal guidance)
Margins/OpEx/Tax/OI&E	FY/Quarter	None	None	Maintained (no formal guidance)
Segment-specific	FY/Quarter	None	None	Maintained (no formal guidance)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
AI/Data center strategy	Identified AI power constraints; target colocation/hyperscale; first small DC project expected by early 2025; backlog ~$10.8M	Vertiv project manager assigned; sales training/marketing ramp; multiple large quotes; LOIs requested; Tecochill can free up “30%+” power and cut cooling opex by ~50%	Momentum building; commercialization nearer term
Vertiv partnership	“Signed global partnership” in Mar-25; touted Vertiv leadership; potential to accelerate scale	Vertiv NPI process ongoing; expecting public-facing marketing “in the next couple of months”	Execution progressing
Supply chain/tariffs	Domestic vendors; limited anticipated tariff impact	Limited tariff impact; absorption chillers likely face big tariffs; potential net benefit for Tecogen	Favorable relative positioning
Product performance	Products margin improved in Q4 (31%); factory move weighed on 2024 revenue	Products revenue +70% YoY; margin 41% (+11 pts)	Improving throughput and pricing
Services & fleet	Service margins solid in Q4 (51%); service growth via Aegis contracts	Slight margin dip (-1 pt) on labor/material and engine upgrades; hiring techs to lift margins +5–6 pts longer-term	Near-term pressure; plan for structural improvement
Energy Production	Q4 margin +9 pts; revenue modest	Revenue -27% YoY on expirations; margin +7 pts on lower fuel	Mix shifts; margins resilient
R&D execution	Hybrid-drive chiller introduced; shipment anticipated 2Q25	Added engineers to validate DC operating conditions; continued R&D hiring	Focused on DC-specific readiness

Management Commentary

“Our revenue for the quarter increased 17.6% to $7.3 million… our adjusted EBITDA loss narrowed from $900,000 to $381,000… Our gross profit margin also increased from 41.6% to 44.3%” — Abinand Rangesh, CEO .
“By switching to our high-efficiency advanced natural gas chillers, data centers can increase the amount of power they have available by 30% or more… operating costs can be 50% lower than the electric chiller” .
“A project manager from Vertiv has been assigned… generation of marketing material and sales training… we expect public-facing marketing… in the next couple of months” .
“We are predominantly a domestic manufacturer… don’t anticipate any meaningful impact as a result of tariffs… tariffs may give us a competitive advantage” .
“Backlog is presently at $10.8 million… we expect $2 million of non data center projects to enter the backlog in the next couple of months” .

Q&A Highlights

Capacity and hiring: New manufacturing and supply chain managers hired to mitigate ramp bottlenecks; targeted technician hiring to lift service margins by 5–6 pts; engineers added to validate data center chilled water conditions .
Scalability and Vertiv support: Multiple contingency plans (A/B/C) to scale; seeking LOIs to align suppliers; Vertiv to assist with supply chain as needed .
Vertiv commercialization timing: Expect public-facing marketing and webinars “in the next couple of months”; Tecogen to support early sales presentations .
Early data center proof points: Small Connecticut data center chose InVerde over alternatives to mitigate utility rate increases; Las Vegas chiller shipments continue through Q2/Q3 .
Backlog conversion: Aim to deliver backlog in 9–12 months, subject to incremental orders and ramp plans .

Estimates Context

S&P Global consensus for Q1 2025 revenue and EPS was not available; no estimate count was returned. As a result, we cannot compute an objective “beat/miss.” Management stated Q1 revenue was “slightly ahead of our forecast” .
Given increased large-project quoting and Vertiv channel build, Street models (when available) may need to reflect higher Products volumes and potential step-changes from single data center orders, offset by Energy Production contract expirations and near-term Services labor/material headwinds .
Values retrieved from S&P Global.

Key Takeaways for Investors

Execution turn: Mix-shift and pricing drove Products margin to 41% and total gross margin to 44.3%; adjusted EBITDA loss improved to -$0.38M, suggesting operating leverage as volumes scale .
Data center catalyst: Tecochill’s ability to unlock >30% power for computing and cut cooling costs positions TGEN as a beneficiary of AI buildouts; Vertiv enablement could accelerate pipeline conversion .
Backlog math matters: Slide/call backlog (~$10.8–$12.2M) includes elements beyond GAAP backlog (10‑Q backlog $9.52M excludes service contracts); track definitions when modeling conversions and cash .
Liquidity watch: Cash ended at $4.07M with -$1.17M operating cash flow in Q1; current cash “~$3M presently” reflects working capital investments—monitor order timing and supplier pre-buys .
Services margin plan: Near-term labor/material pressure (-1 pt YoY), but management targets +5–6 pts through technician hiring and engine improvements; if delivered, Services can be a steady margin anchor .
Tariffs as a tailwind: Domestic supply chain limits exposure; imported absorption chillers may face higher tariffs—potential relative cost/lead-time advantage for Tecochill .
Stock drivers: Evidence of first large data center order(s), Vertiv-led marketing lift, and continued Products margin resilience would be key upside catalysts; delays in order timing or persistent OpEx/working-capital drag are primary risks .

Citations:

Q1 2025 8‑K/press release and exhibits ; Q1 2025 slides ; Q1 2025 10‑Q (financials, MD&A, backlog definition, Vertiv agreement) ; Q1 2025 earnings call transcript ; Q4 2024 8‑K/press release/slides ; Q3 2024 8‑K/press release/slides .

TECOGEN INC. (TGEN)·Q1 2025 Earnings Summary