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Zeo Energy Corp. Reports First Quarter 2025 Financial Results

1. Zeo Energy's Q1 revenue drops 56.4% compared to 2024. 2. Acquisition of Heliogen aims to enhance clean energy offerings. 3. Net loss increased to $13.3 million in Q1 2025. 4. High-interest rates continue to challenge residential solar sales. 5. Company expects improvement later in the year.

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$3.1606/16 04:07 PM EDTEvent Start
$3.206/17 10:42 PM EDTLatest Updated
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FAQ

Why Bearish?

Zeo's significant revenue drop and increased net loss signal financial distress. Historical trends show steep declines in stock prices after similar revenue losses.

How important is it?

The acquisition and financial results directly affect investor sentiment and outlook on Zeo's future viability.

Why Short Term?

Immediate impacts are due to quarterly performance; however, potential for recovery exists if the acquisition succeeds.

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HLGNSPWRSCTY
June 16, 2025 16:05 ET  | Source: Zeo Energy Corp. NEW PORT RICHEY, Fla., June 16, 2025 (GLOBE NEWSWIRE) -- Zeo Energy Corp. (Nasdaq: ZEO) (“Zeo”, “Zeo Energy”, or the “Company”), a Florida-based provider of residential solar and energy efficiency solutions, today reported financial results for the first quarter ended March 31, 2025. Recent Operational Highlights Entered into a definitive agreement to acquire Heliogen, a provider of on-demand clean energy technology solutions, allowing the company to establish a division focused on long-duration energy generation and storage for commercial and industrial-scale facilities, including artificial intelligence (AI) and cloud computing data centers.Recruited and retained adequate staff ahead of the peak summer sales season. Management Commentary“In the first quarter of 2025, we continued to navigate the challenging solar market and successfully generated $8.8 million of revenue,” said Zeo Energy Corp. CEO Tim Bridgewater. “As announced last month, we were able to take advantage of the softer sector conditions by entering into a definitive agreement to acquire Heliogen. We believe that this proposed acquisition positions us to expand beyond traditional residential solar and into adjacent clean energy verticals with long-term upside. This move will also enhance our balance sheet and diversify our revenue base going forward.” “As anticipated, in Q1 we experienced a slowdown due to the seasonality of our intensive summer sales model. This slowdown was exacerbated by the current high-interest rate environment. We've maintained our strategic focus during this period, streamlining operations and strengthening our sales team ahead of the critical summer season that is now underway. Looking ahead, we remain confident in our full-year outlook. We expect meaningful improvement in the latter half of the year as market activity increases.” First Quarter 2025 Financial Results Results compare the 2025 first quarter ended March 31, 2025 to the 2024 first quarter ended March 31, 2024. Total revenue was $8.8 million in Q1 2025, a 56.4% decrease from $20.1 million in the comparable 2024 period. The decrease was primarily due to higher interest rates creating a challenging environment for residential solar direct sales.Gross profit decreased to $3.8 million (43.0% of total revenue) in Q1 2025 from $6.0 million (29.9% of total revenue) in the comparable 2024 period. The decrease was driven in part by the decrease in sales compared to the prior period. The improvement in gross profit as a percentage of revenue was the result of improved operational efficiencies in labor and a reduction in materials costs.Net loss for Q1 2025 was $13.3 million compared to $4.1 million in the comparable 2024 period. The decrease is primarily due to a decrease in overall sales for the period.Adjusted EBITDA, a non-GAAP measurement of operating performance reconciled below, decreased to $(6.4) million (72.3% of total revenue) in Q1 2024 from approximately $(0.5) million (2.3% of total revenue) in the comparable 2024 period. The change was primarily related to the change in net loss. For more information, please visit the Zeo Energy Corp. investor relations website at investors.zeoenergy.com. About Zeo Energy Corp.Zeo Energy Corp. is a Florida-based provider of residential solar, distributed energy, and energy efficiency solutions. Zeo focuses on high-growth markets with limited competitive saturation. With its differentiated sales approach and vertically integrated offerings, Zeo, through its Sunergy Solar business unit, serves customers who desire to reduce high energy bills and contribute to a more sustainable future. For more information on Zeo Energy Corp., please visit www.zeoenergy.com. Non-GAAP Financial Measures Adjusted EBITDAZeo Energy defines Adjusted EBITDA, a non-GAAP financial measure, as net income (loss) before interest and other expenses, net, income tax expense, and depreciation and amortization, as adjusted to exclude stock-based compensation. Zeo utilizes Adjusted EBITDA as an internal performance measure in the management of the Company’s operations because the Company believes the exclusion of these non-cash and non-recurring charges allows for a more relevant comparison of Zeo’s results of operations to other companies in the industry. Adjusted EBITDA should not be viewed as a substitute for net loss calculated in accordance with GAAP, and other companies may define Adjusted EBITDA differently. The following table provides a reconciliation of net income (loss) to Adjusted EBITDA for the periods presented:      Three months Ended March 31,   2025   2024  Net income (loss) $(13,319,363)  $(4,107,102) Adjustment:        Other income, net  (82,363)   0  Change in fair value of warrant liabilities  (663,449)   138,000.00  Interest expense  30,277    35,222  Income tax benefit  523,500    (114,668.00) Stock compensation  2,257,139    3,118,584.00  Depreciation and amortization  4,900,729    459,529           Adjusted EBITDA  (6,353,530)   (470,435)          Net income (loss) margin  (151.6)%  (20.4)%         Adjusted EBITDA margin  (72.3)%  (2.3)%          Adjusted EBITDA Margin Zeo Energy defines Adjusted EBITDA margin, a non-GAAP financial measure, expressed as a percentage, as the ratio of Adjusted EBITDA to revenue, net. Adjusted EBITDA margin measures net income (loss) before interest and other expenses, net, income tax expense, depreciation and amortization, as adjusted to exclude stock-based compensation and is expressed as a percentage of revenue. In the table above, Adjusted EBITDA is reconciled to the most comparable GAAP measure, net income (loss). Zeo utilizes Adjusted EBITDA margin as an internal performance measure in the management of the Company’s operations because the Company believes the exclusion of these non-cash and non-recurring charges allows for a more relevant comparison of the Company’s results of operations to other companies in Zeo’s industry. The following table sets forth Zeo’s calculations of Adjusted EBITDA margin for the periods presented:      Three months Ended March 31,   2025   2024  Total Revenue $8,783,695   $20,142,156           Adjusted EBITDA  (6,353,530)   (470,435)          Adjusted EBITDA margin  (72.3)%  (2.3)%          Forward-Looking Statements This news release contains certain forward-looking statements within the meaning of section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act of 1934, as amended, that are based on beliefs and assumptions and on information currently available to the Company. Such statements may include, but are not limited to, statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar references to future periods may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements may include, for example, statements about the future financial performance of the Company; the ability to effectively consolidate the assets of Lumio and produce the expected results; changes in the Company’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, the ability to raise additional funds, and plans and objectives of management. These forward-looking statements are based on information available as of the date of this news release, and current expectations, forecasts, and assumptions, and involve a number of judgments, risks, and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date, and the Company does not undertake any obligation to update such forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws. You should not place undue reliance on these forward-looking statements. As a result of a number of known and unknown risks and uncertainties, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include: (i) the outcome of any legal proceedings that may be instituted against the Company or others; (ii) the Company’s success in retaining or recruiting, or changes required in, its officers, key employees, or directors; (iii) the Company’s ability to maintain the listing of its common stock and warrants on Nasdaq; (iv) limited liquidity and trading of the Company’s securities; (v) geopolitical risk and changes in applicable laws or regulations, including tariffs or trade restrictions; (vi) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; (vii) operational risk; (viii) litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on the Company’s resources; (ix) the Company’s ability to effectively consolidate the assets of Lumio and produce the expected results; and (x) other risks and uncertainties, including those included under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2024 and in its subsequent periodic reports and other filings with the SEC. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by the Company, its respective directors, officers or employees or any other person that the Company will achieve its objectives and plans in any specified time frame, or at all. The forward-looking statements in this news release represent the views of the Company as of the date of this news release. Subsequent events and developments may cause that view to change. However, while the Company may elect to update these forward-looking statements at some point in the future, there is no current intention to do so, except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing the views of the Company as of any date subsequent to the date of this news release. Zeo Energy Corp. Contacts For Investors:Tom Colton and Greg BradburyGateway GroupZEO@gateway-grp.com For Media: Zach KadletzGateway GroupZEO@gateway-grp.com -Financial Tables to Follow- ZEO ENERGY CORP.CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)   As of March 31, As of December 31,    2025   2024  Assets       Current assets       Cash and cash equivalents $2,894,103  $5,634,115  Accounts receivable, including $286,103 and $191,662 from related parties, net of allowance for credit losses of $4,703,905 and $1,165,336, as of March 31, 2025 and December 31, 2024, respectively  4,999,508   10,186,543  Inventories  847,395   872,470  Contract assets  577,398   64,202  Prepaid expenses and other current assets  936,673   2,131,345  Total current assets  10,255,077   18,888,675  Other assets  113,591   314,426  Property, equipment and other fixed assets, net  2,629,283   2,475,963  Right of use operating lease assets  1,087,496   1,268,139  Right of use financing lease assets  412,893   447,012  Intangibles, net  2,938,804   7,571,156  Note receivable - related party  3,000,000   3,000,000  Goodwill  27,010,745   27,010,745  Total assets $47,447,889  $60,976,116          Liabilities, redeemable noncontrolling interest and stockholders' (deficit) equity    Current liabilities       Accounts payable $3,569,632  $2,780,885  Accrued expenses and other current liabilities, including $2,320,129 and $3,359,101 with related parties at March 31, 2025 and December 31, 2024, respectively  6,581,799   8,540,188  Current portion of long-term debt  301,091   291,036  Current portion of obligations under operating leases  555,672   583,429  Current portion of obligations under financing leases  133,408   130,464  Convertible promissory note  2,455,000   2,440,000  Contract liabilities, including $0 and $2,000 with related parties as of March 31, 2025 and December 31, 2024, respectively  119,417   203,607  Total current liabilities  13,716,019   14,969,609  Obligations under operating leases, non-current  662,291   799,385  Obligations under financing leases, non-current  314,167   348,807  Warrant liabilities  785,551   1,449,000  Long-term debt  414,268   496,623  Total liabilities  15,892,296   18,063,424          Commitments and contingencies (Note 14)               Redeemable noncontrolling interests       Convertible preferred units, 1,500,000 units issued and outstanding as of March 31, 2025 and December 31, 2024, respectively  16,536,108   16,130,871  Class B Units  38,097,300   115,693,900          Stockholders' equity       Class V common stock, $0.0001 par value, 100,000,000 authorized shares; 26,730,000 and 35,230,000 shares issued and outstanding as of March 31, 2025, and December 31, 2024, respectively  2,673   3,523  Class A common stock, $0.0001 par value, 300,000,000 authorized shares; 21,796,464 and 13,252,964 shares issued and outstanding as of March 31, 2025, and December 31, 2023, respectively  2,180   1,326  Additional paid in capital  16,486,224   14,523,963  Accumulated deficit  (39,568,892)  (103,440,891) Total stockholders' deficit  (23,077,815)  (88,912,079) Total liabilities, redeemable noncontrolling interests and stockholders' (deficit) equity $47,447,889  $60,976,116           ZEO ENERGY CORP.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)  Three months ended March 31,  2025  2024 Revenue, net $6,216,391  $11,329,387 Related party revenue, net  2,567,304   8,812,769 Total revenue  8,783,695   20,142,156 Operating costs and expenses:      Cost of goods sold (exclusive of items shown below)  4,789,679   13,957,966 Depreciation and amortization  4,900,729   459,529 Sales and marketing  2,137,092   6,553,787 General and administrative  10,467,593   3,219,422 Total operating expenses  22,295,093   24,190,704 (Loss) income from operations  (13,511,398)  (4,048,548)Other (expenses) income, net:      Other income, net  82,363   - Change in fair value of warrant liabilities  663,449   (138,000)Interest expense  (30,277)  (35,222)Total other expense, net  715,535   (173,222)Net (loss) income before taxes  (12,795,863)  (4,221,770)Income tax (expense) benefit  (523,500)  114,668 Net (loss) income  (13,319,363)  (4,107,102)Net (loss) attributable to Sunergy Renewables LLC prior to the Business Combination  -   (523,681)Net (loss) income subsequent to the Business Combination  (13,319,363)  (3,583,421)Net (loss) income attributable to redeemable non-controlling interests  (6,958,098)  (2,051,930)Net (loss) income attributable to Class A common stock $(6,361,265) $(1,531,491)       Basic and diluted net (loss) income per common unit $(0.48) $(1.54)Weighted average units outstanding, basic and diluted  13,252,964   994,345         ZEO ENERGY CORP.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 2025  2024 Cash Flows from Operating Activities     Net (loss) income$(13,319,363) $(4,107,102)Adjustment to reconcile net (loss) income to cash (used in) provided by operating activities     Depreciation and amortization 4,900,729   459,529 Interest income -   - Change in fair value of warrant liabilities (663,449)  138,000 Provision for credit losses 3,538,569   150,000 Noncash operating lease expense 180,643   152,717 Stock based compensation expense 2,257,139   3,118,584 Changes in operating assets and liabilities:     Accounts receivable 1,742,907   (2,297,517)Accounts receivable due from related parties (94,441)  (2,692,841)Inventories 25,075   (28,968)Prepaid installation costs (513,196)  4,448,953 Prepaids and other current assets 1,138,288   (1,420,528)Other assets (37,656)  (109,443)Accounts payable 788,747   (400,861)Accrued expenses and other current liabilities (919,417)  (691,316)Accrued expenses and other current liabilities due to related parties (1,038,972)  (2,148,960)Contract liabilities (82,190)  (3,508,323)Contract liabilities due to related parties (2,000)  (1,054,263)Operating lease payments (164,851)  (159,650)Net cash (used in) provided by operating activities (2,263,438)  (10,151,989)      Cash flows from Investing Activities     Purchases of property, equipment and other assets (372,578)  (226,076)Net cash used in investing activities (372,578)  (226,076)      Cash flows from Financing Activities     Principal payment of finance lease liabilities (31,696)  (28,537)Proceeds from the issuance of convertible preferred stock, net of transaction costs -   10,277,275 Repayments of debt (72,300)  (71,855)Distributions to members -   (90,000)Net cash provided by (used in) financing activities (103,996)  10,086,883       Net (decrease) increase in cash and cash equivalents (2,740,012)  (291,182)Cash and cash equivalents, beginning of period 5,634,115   8,022,306 Cash and cash equivalents, end of the period$2,894,103  $7,731,124       Supplemental Cash Flow Information     Cash paid for interest$25,785  $34,060 Cash paid for income taxes$-  $- Noncash finance lease expense$34,119  $34,118       Non-cash transactions     Deferred equity issuance costs$-  $3,269,039 Issuance of Class A common stock to vendors$-  $891,035 Issuance of Class A common stock to backstop investors$-  $1,569,463 Preferred dividends$405,237  $8,224,091 

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