Pineapple Energy Highlights Market Factors That Shaped Financial Performance in Recent Months
Rhea-AI Summary
Pineapple Energy Inc. (Nasdaq: PEGY) released an update on its Q2 2024 financial performance, highlighting market factors that impacted results. Despite industry headwinds, the company's New York subsidiary, SUNation, showed positive year-over-year growth in several key metrics. Quarterly revenues reached $13,549,420, with operating expenses down 37% from Q2 2023. However, gross profit decreased by 37%, and operating losses increased by 41% compared to the same period last year.
The company experienced delays in commercial projects and a decline in battery attachment rates in Hawaii. Pineapple Energy is focusing on restructuring efforts to reduce overhead and operating expenses. The company remains optimistic about future growth, citing a 46% increase in commercial contract sales and potential opportunities in the solar industry.
Positive
- SUNation systems sold up 22% year-over-year
- Overall kilowatts (KW) sold increased by 21% year-over-year
- Total invoice value per sale up 11% year-over-year
- Client acquisition cost (CAC) down 4% year-over-year
- Operating expenses reduced by $650k year-over-year
- Gross margins improved by 4.8% year-over-year
- 46% increase in commercial contract sales in Q2 compared to the same period last year
- Operating expenses down 37% from Q2 2023
Negative
- Quarterly revenues of $13,549,420, showing a decline
- Gross Profit down 37% from Q2 2023
- Operating losses increased 41% from Q2 2023
- Net loss of $5.6M in Q2 2024
- Disappointing performance in battery attachment rate within Hawaii business
- Delayed start to projects within New York commercial pipelines
Insights
Pineapple Energy's Q2 2024 results reveal a mixed financial picture. While revenues reached
However, there are some positive indicators. Operating expenses decreased by
Investors should closely monitor the company's restructuring efforts and their impact on future quarters. The ability to capitalize on the growing commercial segment and manage industry headwinds will be important for Pineapple's financial recovery and long-term viability.
Pineapple Energy's performance reflects broader challenges in the U.S. renewable energy sector. The company's struggles with battery attachment rates in Hawaii, due to the Battery Bonus Program redesign, highlight the impact of policy changes on market dynamics. This underscores the importance of adaptability in a rapidly evolving regulatory landscape.
The growth in commercial solar projects is a positive trend, aligning with industry shifts towards larger-scale installations. However, the longer gestation period for these projects can lead to revenue volatility, as evidenced by Pineapple's results. The company's focus on diversifying revenue streams through a mix of residential and commercial projects is a sound strategy in this context.
Looking ahead, the renewable energy market remains robust, driven by increasing demand for sustainable solutions. Pineapple's ability to navigate industry headwinds while capitalizing on growth opportunities will be critical for its success in this competitive landscape.
Pineapple Energy's strategic moves indicate a company in transition. The ongoing corporate restructuring efforts, while incurring short-term costs, signal a commitment to operational efficiency. The focus on reducing overhead and OpEx is important for long-term sustainability in the competitive solar energy market.
The company's strategy to pursue acquisitions of regional solar companies could be a game-changer if executed well. This approach could rapidly expand Pineapple's market presence and potentially lead to economies of scale. However, it also carries risks, particularly in terms of integration and capital allocation.
The emphasis on improving corporate governance and refining strategy is positive, potentially enhancing investor confidence. The success of these initiatives will largely depend on management's execution and the company's ability to adapt to market conditions while maintaining a clear strategic focus on becoming a national industry leader.
RONKONKOMA, N.Y., Aug. 26, 2024 (GLOBE NEWSWIRE) -- Pineapple Energy Inc. (Nasdaq: PEGY) (Pineapple Energy) (“Pineapple” or the “Company”), a leading provider of sustainable solar energy and backup power to households, businesses, municipalities and for servicing existing systems, is providing an update on the performance of its ongoing business activities, with the goal of giving context to the Company’s recently filed earnings report.
“Our results for the second quarter of 2024 reflected the lingering impact of certain industry-specific headwinds that have affected the renewable energy sector across the United States,” said Scott Maskin, Interim CEO of Pineapple. “These headwinds – which masked progress across various aspects of our operations - are beginning to diminish,” Maskin said.
“While we are not satisfied with some of the metrics captured within our recently filed earnings statement, including seeing some disappointing news in the performance of our battery attachment rate within our Hawaii business as the Battery Bonus Program is in redesign at the utility and state level, and the delayed start to projects within our commercial pipelines of our New York business, some of these factors have already, or are likely to, abate as of writing.”
“We also incurred cash and non-cash charges and expenses related to our ongoing corporate restructuring efforts, as well as charges and valuation adjustments related to previously issued debt and equity instruments. We fully expect that the second half of the year, notably on the commercial side of the business, will show marked improvement when compared to the first six months of 2024. Over time, our recent and continuing restructuring efforts across Q2 will bear fruit as overhead is reduced, and OpEx is driven lower,” Maskin added.
Mr. Maskin noted that the performance at SUNation, Pineapple’s New York subsidiary, produced favorable comparisons in several key regional metrics during the first six months of 2024 compared to the same period last year, as well as in comparison to the full year 2023.
Highlights from Pineapple’s New York Subsidiary SUNation include:
- SUNation systems sold up
22% year over year - Overall kilowatts (KW) sold, up
21% year over year - Systems sold via client referrals, up
19% year over year - Total invoice value per sale, up
11% year over year - Overall client acquisition cost (CAC), down
4% year over year - Operating expenses, down
$650 k year over year - Gross margins are up
4.8% , year over year
Mr. Maskin continued, “Our commercial and industrial solar projects often take longer to materialize when compared to our residential work, as was reflected in our results for the first half of the year. A number of material commercial projects that had been delayed in the first half of 2024 are now fully underway and the positive financial impact of these projects on our financial results should start to be reflected beginning in the third quarter. Our efforts to diversify our revenues via a mix of business is also evolving in a positive manner, as evidenced by a
“These figures highlight the opportunity within this growing segment of our business, as well as the volatility of the pipelines.”
Overall, Pineapple Energy’s financial highlights in Q2 included:
- Quarterly Revenues of
$13,549,420 - Operating expenses down
37% from Q2 2023 - Gross Profit down
37% from Q2 2023 - Operating losses increased
41% from Q2 2023 - Net loss of
$5.6M
Pineapple's complete financial performance for the second quarter of 2024 can be found in our quarterly report on form 10-Q here.
“I’m incredibly thankful to our shareholders for their constant notes of encouragement and arming me with the tools necessary to address the industry pressures affecting our Company,” Mr. Maskin continued stated. “The increased share authorization announced in July provides the Company with the opportunity to potentially access the capital markets to fund our future growth initiatives, with a focus on acquiring the best regional solar companies in the industry,” he noted. “The authorization also had a material positive impact on the accounting for certain outstanding debt and capital instruments, with these changes likely to be reflected in our third quarter results and future periods.”
“As a veteran in the solar space, my team and I have capitalized through the highest peaks of the “solar coaster” and have sustained our position through the absolute lowest points. We are laser focused on cleaning up every single obstruction that is preventing us from executing on our corporate strategy. We remain committed to elevating our corporate governance, aligning our operations, and refining our strategy to most effectively and efficiently address the significant long-term market opportunities we believe exist in our industry. The reimagined Pineapple Energy comes with amazing new board members, corporate leadership changes, OpEx reductions, and capital stack modifications.”
“What will never change is our dedication to you our shareholders, our employees, and our customers. We believe that Pineapple Energy is uniquely positioned to emerge as a national industry leader. I have never been more excited about the future and our place in it.”
Forward Looking Statements
This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth, and future opportunities. These statements are based on Pineapple Energy’s current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements here due to changes in economic, business, competitive or regulatory factors, and other risks and uncertainties, set forth in the company’s filings with the Securities and Exchange Commission. The forward-looking statements in this press release speak only as of the date of this press release. Pineapple Energy does not undertake any obligation to update or revise these forward-looking statements for any reason, except as required by law.
About Pineapple Energy
Pineapple is focused on growing leading local and regional solar, storage, and energy services companies nationwide. Our vision is to power the energy transition through grass-roots growth of solar electricity paired with battery storage. Our portfolio of brands (SUNation Energy, Hawaii Energy Connection, E-Gear) provide those within the Residential and Commercial sectors an end-to-end product offering spanning solar, battery storage, and grid services.
Contacts:
Scott Maskin
Interim Chief Executive Officer
+1 (631) 823-7131
SMaskin@sunation.com
Pineapple Investor Relations
IR@pineappleenergy.com
FAQ
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