At Tigo Energy, our mission is to increase the energy yield, enhance the safety, and lower operating costs for solar systems. We do electronics and software that go underneath the panel and that work with all sectors of the industry, from resi, commercial, and utility. Just a little bit more about us: we're a leading provider of what's called module-level power electronics. These are the components that work underneath the solar panel. The industry has had many years of a great upturn, followed by 2024, where we had a downturn, partly due to over-ordering in the channel, which I'll speak to a little bit more. That has more or less resolved itself, and we're seeing the industry grow again. During that time, we've continued to increase our market share. We grew from 9% to 13% in the most recent period reported.
We've also introduced some new products over the last couple of years to expand our addressable market and some product extensions to improve and enhance the existing product set that we have. We produce our products with contract manufacturers located in Asia, mostly in Thailand and some in China. We use both different countries. Depending on the tariff situation, we are able to minimize the amount of tariffs associated with that and also able to maintain a positive gross margin, whether we're in an upcycle or a downcycle. Most of our customers are distributors. About 85% of our business goes through the distribution channel, with the rest going directly to large installers. These aren't necessarily household names, but you might have heard of Greentech and Krannich and BayWa, for instance.
More than 78% of our sales are done outside of the U.S., with the big bulk of it, 61%, coming from EMEA. Our revenue last year was $54 million, which came off of a great 80% growth year of $145 million. Our most recent results of $18.8 million obviously point to a much higher trend as we look into 2025 if we roll that out. You can also see that while we did not grow last year, we're growing. We grew 92% year over year for Q1. We've guided the overall year for $85 million-$100 million compared to the $54 million that we did in the prior year. Cash of a little bit more than $20 million. Inventories were much higher over the past year. We've worked hard to bring those inventory levels down and reduce our purchases from our contract manufacturers. Convertible debt of $50 million.
Just briefly about Tigo, we were founded in 2007. We launched our flagship product, the TS4 MLPE, in 2015. From 2016 to 2019, we had a partnership with SMA, which is a large German inverter company, that paired our optimizer with their inverter and sold it as a combination product to the marketplace. That partnership ended in 2019, and we set out again on our own, launched the inverter battery solution in late 2021- 2022, experienced very solid growth along with the industry of 80% in 2022 and 2023. 2023 was a big year for us. We went public. We acquired a small software company. In 2024 and 2025, we released some new products that enhance the capabilities and extend the features and functionality of our TS4 product line. Just a little bit about the solar and the industry.
In the MLPE sector itself, in the early 2020s, we were experiencing, as an industry, 14% growth, CAGR from 2020 to 2023. 2024 was the down year I was referring to, down 44%. Again, a combination of the end of COVID and the restrictions on production there with over-ordering and ordering from multiple suppliers to sort of meet demand when you're put on allocation led to an oversupply situation with the so-called bullwhip effect. It took the industry a year, year and a half to sort of work down those inventories to more normal levels. We at Tigo have been able to work through that part of the process and have been experiencing sequential growth now for five quarters in a row. As the rest of the decade looks, industry sources are looking at about an 18% CAGR from 2024 to 2030.
We are also in the residential storage market with the products that we introduced in late 2021- 2022. That market is continuing to grow about 8%. It represents a very large market, of which we're a very small player. During that time, we've continued to grow a market share, again, 9%-13%. Our largest competitor is a company called SolarEdge. SolarEdge sells an inverter and optimizer combined that work with each other. The way we attack the market is that we offer an MLPE solution that will work with any inverter. There is a large ecosystem of inverter players out there making an optimizer that lasts 25 years and has high reliability and low failure rates. It's not an easy task. We have a strong patent portfolio that serves as a barrier to entry.
I'll explain a little bit more, but we work with more than 1,000 different other inverter types. We target the open ecosystem out there. If you're an installer and you're looking to install an inverter either from Europe or from China, you would often pair your inverter with our optimization solution or rapid shutdown solution, our MLPE. That makes up a larger bulk of the pie here. Finally, there is the microinverter solution, which is a small inverter behind every panel. It does become cost-prohibitive as you move up the chain of the size of a solar system. That market is mostly in the residential sector because of cost reasons. We see the overall industry continuing to grow. Solar costs are expected to continue to decline.
You've seen some large declines in the panel prices in particular, which makes up the bulk of the hard costs. Solar is expected to be one of the cheapest forms of electricity moving forward. Electrification trends continue to add momentum to solar and electricity. We make these items in between the solar module and the grid. The MLPE product line represents almost 90% of our business today. It comes with very attractive gross margins. More recently, we've been working to expand our addressable market with a hybrid inverter battery and ATS solution. Hybrid just means that you can use one inverter to work with both a battery and with a solar panel system instead of having to buy two. We offer fleet on the software front. We offer fleet management software as well as energy management.
Energy management came via an acquisition we did a couple of years ago that works with utility providers to predict supply and demand with their customers and with their own production capabilities. Here is a picture of our MLPE on the right. You can see it is very easy to implement and install. It literally clips onto the back of the solar panel. Works with most inverters. We have more than 10 million of these units that are in the install field right now. There are three features that it offers, one being the ability to optimize the performance of the whole panel since the panels are put on one electrical string and you need to balance and optimize the amount of wattage that comes out. You have to algorithmically change the voltage or amps that the current that comes from the line.
It works with the inverter in order to find what's called a maximum power point tracking in order to maximize the amount of watts that come through the whole system. That becomes very important for many reasons I'll show you in a minute. It also has a safety feature like rapid shutdown, which is a regulatory requirement in many areas around the world. It provides panel-level monitoring, which gives you granularity to how every panel is performing, which differentiates us from having inverter-level monitoring, which does not provide that level of granularity. Our existing MLPE is on the first column on the left. We most recently announced last few weeks a newer version of the TS4 that has some improvements in the amount of power it supports for panel sizes and as well as current. It can work with bifacial panels.
It has multi-factor rapid shutdown capabilities, which means it has redundant ability to determine the need to do a safety shutdown. It also offers some field upgradable features to it. That complements what we announced last year and introduced, which was the TS4X, which is geared primarily for these high panels and bifacial panel, that part of the market. That is definitely more on the commercial and utility side. The optimization is very important. You can see an example here on the right where you have some shading, for instance, on a rooftop. The shading will reduce the performance of that particular panel. When it is hooked up on a string with other panels, it will reduce the whole output of the whole system.
The ability to find that maximum power point tracking and to adjust the voltage-current ratio is critical to maintaining and keeping the most power output that you can get out of it. Many studies have shown you can get 4-5% better power output by using optimization with those panels. They come into play, especially in urban environments or environments where maybe the panels may have degradation between them. Obviously, if they're tilted in different angles to the sun, you may have different performance on each panel. The middle graph shows implementation of a monitoring solution for a large commercial site. The bottom is just an example of the ability to have rapid shutdown. This is a solar system that's on a lake. Obviously, water and electricity do not really like each other.
A little bit more better picture here of the optimizer here on the left, along with our GO ESS product line of inverter, battery, and transfer switch solutions, which we have introduced in the U.S. and to the European market. A little bit more of an example of how panel-level monitoring works. This is a commercial site where you can see each of the panels. Our monitoring capability lets large operators of solar farms monitor every panel, which is the kind of granularity that they like to see so that they do not have to troubleshoot each panel individually by themselves. This is a unique function of having module-level monitoring or panel-level monitoring, rather. Our Predict+ software solution generates a little bit more than $1 million of revenue in ARR. We have doubled it since our acquisition.
Currently, it's got a very dominant share in the Israeli market with the utility players there. What they do is they use it to do predictive algorithms on the consumption and demand requirements provided by their customers based on meter usage there. They pair that up with production requirements, whether it's solar or if it's wind turbine or fossil fuels. By doing that, they're able to be able to meet the future demand of their customers as well as arbitrage excess power and sell it on the open market. We have a very strong presence in Israel and are working to expand that now into other geographies. Underlying our MLPE solution is a very strong barrier to entry with more than 160 patents. These cover various aspects of optimization, some of our software, and safety features.
As it relates to rapid shutdown, we actually do license our rapid shutdown patents to a few other players in the industry. It generates about $1.5 million a year in revenue for us. What do installers like to see? What do they like about our solution? What differentiates us from a SolarEdge, for instance, would be selective optimization. Our patented approach to it allows our product to only work when it really needs to work. That is important for two reasons. One being that by selectively optimizing, it is not always using energy to optimize, so you get some energy savings there, 2-3%. Secondly, it has a lower duty cycle, so the components are not working 24/7. That enables us to have a very high reliability rate and a very low return rate on our product.
That is what installers especially like to see because once they install it, they want to see it back. We offer a 25-year warranty on it. It is compatible with most of the ecosystem. That is another feature. It is easy to install, literally the ability just to clip it on and move on. That immediately optimizes our great features. You can selectively deploy it, which means you do not have to put it on every single panel. You can just put our MLPE device on the panels that need it. That also differentiates us from other competitors. Within our GO ESS battery inverter solution, it is a DC-coupled architecture. What that means is that the sun comes in as DC power energy and the battery is stored as DC. You want to minimize the amount of conversions as you lose energy from converting from DC to AC.
If you get energy from the sun and you do not need it immediately, it can just stay in DC format. It goes right to the battery and converts to AC when you need it for the house, for instance. That offers advantages over AC-coupled solutions. Just getting to the financial overview. On the upper left, in 2022 and 2023, we had record and almost record years, strong growth, 80% growth in 2022, 79% in 2023, record revenues of $145 million in 2023. As I showed you on the industry slide, the industry had a downturn in 2024. We declined to $54 million. We are now back on the growth track, five quarters in a row. We have guided $85 million-$100 million on our last call, which is about 57%-85% guidance.
On the far upper right, you can see our revenue by quarter increasing 12% Q3 last year, up 21% sequentially in Q4. 9% in the most recent quarter and our guidance is anywhere from 12-22% in the current quarter. We are in the middle of growing again. We are seeing the industry bounce back, customers bouncing back, growth accelerating for us. We are happy to see that. Lower left, our gross margin profile has historically been in the 30s, 30-35%. We were caught a little bit flat-footed with having too much inventory on our books when the downturn occurred. We had to take a write-down primarily on our battery inventory, which is the newer product line that we introduced. That led to a negative gross margin in 2024 and negative results in Q4 specifically.
If you pro forma that, the effect of that out, the margins were close to 40%. In Q1, we reported 38.1%. The expectation is that the margins will remain healthy and strong as we move forward. We've also tackled our OPEX in order to bring that down because we want to grow revenues and reduce costs to get back to EBITDA positive. We did lower our OPEX after we went public from 59 to 47. By quarter, you can see we brought it down from a run rate of 12 and change down to $11.2 million in Q1. Continue to make concerted efforts to bring our OpEx down to levels that are very efficient and effective for us. We were EBITDA positive in 2022 and 2023, adjusted EBITDA positive. We did have the write-off in 2024 in the downturn, which led to negative EBITDA.
As you can see on the lower right, we've made good progress in getting back to EBITDA positive. We were close there in Q1 2025 with a - $2 million. Our most recent guidance for this quarter is - $1.5 million to positive EBITDA. We believe just based on the overall annual guidance we've provided, you can infer what the top line would look like. If we do not hit positive EBITDA here in Q2, we'd expect to be hitting it in the second half of this year. Finally, just to summarize, we do not have any major customer concentrations. Most of our customers are distributors, as I mentioned. Everybody is below 10%. Geographically speaking, 78% of our revenues are outside of the U.S. 25% are in the Americas, which includes Canada, Mexico, and Brazil.
The bulk of our revenues have come from the EMEA region, particularly strong results from Germany. More recently, we are seeing stronger results coming from the Netherlands and the U.K. and places like Italy. That is continuing to benefit us on the top line. We also work with key partners on the financing front, especially here in the U.S. Examples of them are there in the middle, as well as certain key accounts. That would end my prepared remarks. I am happy to tell you more about Tigo if you have any questions.
Terrific. Thank you. Very informative. We do have a few minutes left for questions. I see we had several come in from the floor. Let me just start with the residential storage business. That is a big opportunity for you. How fast is that segment growing currently?
It represented about 6% of our business in 2024, but it represented about 10% of our business in the latest Q1 period. Overall, the growth worldwide is 8% a year, but it is a very large market with a huge TAM, and we have a very small market share. We have the ability and expectation that we can grow much faster than the industry just by picking up some market share there. We are starting to see that play out here.
Let's see a couple of other things. You recently had an acquisition. Do you see further industry consolidation being necessary in order to lift everybody into kind of positive cash flow and all that?
Yeah. In general, for the industry, I think that would be a natural conclusion.
That is what you would expect to see, especially after kind of going through the sort of a downturn that sort of tests everybody's balance sheet. I would not be surprised to see more consolidation.
I also picked up from several of your slides that you had been fairly quick about rolling out new product. Do you feel that there is still sort of a technology race underway with a lot of investment in R&D?
As it relates to our MLPE, we like to be ahead of the curve. We work hard to be ahead of the curve with supporting 800-watt panels, of which there is really none out in the market today. You are really looking at 650-watt, 700-watt panels max at the utility scale. We want to be on the leading edge of that technology curve.
Within the battery inverter market, especially in the battery market, there's a lot of feature and functionality that is being asked in the market. You do see a lot of new features and functionalities being introduced over a pretty quick period of time. You're seeing a high adoption curve happening. The turnover in product lines happens much more quickly. That's going to continue. You're going to see smaller form factors. You'll continue to see more attractive pricing. You'll see the ability to basically use your battery as your mini utility at the house to determine when you want to buy power, when you want to use power to avoid peak rates, when you want to use it for backup. Basically, you can arbitrage your own electricity. That's continuing to happen. That'll continue to happen going forward.
Great.
Kind of looking at the macro environment, every webinar we have, someone has to talk about tariffs. I'll ask you the tariff question, but I'll just first point out around 70% of your business is in EMEA. Does that insulate you from all of this to some extent?
Yeah, it certainly does. 78% of our business is not affected by tariffs in the U.S. That's for starters. We are working to outsource some of our inverter products out to areas outside of China. That optionality exists. What you're left with is really just the batteries, the battery cells. The major players are China, along with Japan and South Korea. We are looking at our options there. As I said on our last conference call, it's 5% of our revenue.
I would say that we are pretty well insulated compared to other players out there.
Excellent. Staying with the macro environment, it's no secret the Trump administration is not favorable toward green energy. Is that becoming a problem yet, or is that mostly rhetoric?
No. I mean, it's certainly not rhetoric. There are some things coming out of the big, beautiful bill that will probably sunset some of the IRA credits. The 30% credit to homeowners to buy or borrow to buy solar systems, it looks like it's going to come to an end at the end of this year. On the flip side, they're keeping what they call 45Y, which is the credits for those who will lease you solar systems. Overall, it's a bit of a mixed picture.
Maybe leasing solar will become a little bit more popular, and loan or buying solar may be less popular because of the tax credit situation there. It is just a little bit of a shift. The manufacturing credit is going to sunset starting in 2029 or 2030. There are still a few years left there. We are not manufacturing in the U.S. currently, so it does not directly affect us. It could affect some competitors a little bit more. It is a mixed bag. It is not one or the other.
Great. Looks like we have time to squeeze in one more question. You gave a forecast about positive EBITDA. I know you have to be careful what you say. Can you say anything about expectations for free cash flow?
Yeah. We have been cash positive for the last two quarters. That question did come up on the call.
The expectation is that we'll remain and sort of be a little bit range-bound with our cash somewhere between where we are now, $20 million-$25 million, is what I said. I only say that because we're back into a replenishment cycle with inventory. These are good problems to have. The business is growing. We have to buy more inventory to sell to customers because there's more customers wanting to buy more. That could affect cash flow a little bit one way or the other. I'm not—we want to do what's right for the business. I mean, if it makes sense to buy more inventory to be able to generate more revenue, then we're going to do it. I don't think it's going to be a meaningful change.
We noticed throughout the market in Q1 that many people who were sourcing parts and materials from overseas kind of preemptively upstocked just to kind of be a little bit insulated from tariff boomerangs. Have you guys been doing the same thing?
A little different. We did not try to do the same thing, but I mentioned that we had too much inventory, especially with batteries and inverters, when we got caught a little flat-footed with the downturn. It is a newer product for us. We have not yet established as much of a brand name recognition and presence in that market. With the tariffs hitting, we have a lot of that inventory that we had written off that suddenly becomes a little bit more attractive price-wise because other competitors have to pay a lot more to import it.
There is some benefit to us from the tariffs in that we do have pre-tariff inventory in the U.S. that obviously we are in a better situation than others who did not have that.
Great. Very informative, Bill. We are at the end of time, unfortunately. Love to keep going, but very informative. Thank you very much for sharing all of that with you. Thank you for joining us. Folks, I tried to get to as many questions as I could. If I was not able to get to yours, my apologies. Please let your sales and marketing rep at Sudoti know, and we will make sure that we get an answer back to you. With that, we are going to close this one out. Thank you again, Bill, for joining us.
Thank you.