Emeren Group (SOL) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue rose 71% YoY to $104.7M; gross profit increased 52% to $23.3M, while net loss was $9.3M and EBITDA was negative $1.7M.

• Q4 revenue was $44.0M, up 71% YoY; a 7.6% gross margin and $8.1M net loss reflected project mix, delayed closings, and one-time items.

• Advanced-stage pipelines reached 3.1 GW of solar and 5.2 GW of storage by year-end 2023.

Financial highlights

• FY 2023 net revenue was $104.7M vs. $61.3M in 2022; gross profit was $23.3M vs. $15.3M, with gross margin of 22.2%.

• FY 2023 EBITDA was negative $1.7M vs. $6.7M in 2022; Adjusted EBITDA was $6.0M vs. $5.7M.

• Q4 revenue was $44.0M, up 215% QoQ and 71% YoY; gross margin was 7.6%, and EBITDA was negative $5.5M.

• Q4 net loss attributable to shareholders was $8.1M vs. $9.4M in Q3 2023 and $1.7M in Q4 2022; Q4 Adjusted EBITDA was negative $2.6M.

• FY 2023 operating cash flow was negative $27.8M vs. negative $38.0M in 2022; ending cash and cash equivalents were $70.2M.

Outlook and guidance

• H1 2024 revenue guidance: $50M–$55M; FY 2024 revenue: $150M–$160M, with gross margin of ~30% for both periods.

• FY 2024 net income guidance was above $26M and earnings per ADS was ~ $0.50.

• 2024 IPP revenue expected at $24M–$26M with ~50% gross margin; global DSA gross profit expected to be at least $6M.

• Operating cash flow expected to remain positive throughout 2024; year-end cash balance expected to exceed $100M.

• Six U.S. and European project sale closings were delayed into H1 2024.