Hello, everyone. I'd like to present Bill Roeschlein for Tigo Energy.
Thank you all. Appreciate it. We'll fast-forward here through forward-looking statements and tell you a little bit about Tigo. We are a hardware and software company in the solar space that creates and sells products that increase the energy yield of panels that go on residential C&I and utility applications, lower the operating costs by virtue of the monitoring capabilities we have to monitor these panels, and also enhance the safety via rapid shutdown technology that can safely de-energize a solar panel system in the event of emergency or the need to have a fire safety check. We're a leading provider of MLPE, module level power electronics. That simply describes the electronics that go underneath the panel that will optimize the amount of energy that comes from that panel. It also describes microinverters as well.
It's a small form factor, I'd say, let's call it six inches by six inches. We are geographically diversified. We're based here in the U.S. in San Jose, California, but the majority of our sales is actually in the European Union, in Europe. Europe, for those that don't know, the solar market's about five times bigger than the market in the U.S., and so we capture a lot of revenue from the major economies there in Europe. Along the way, we've captured additional market share from our competitors. The competition for us is primarily SolarEdge, which has an optimized inverter that is used with its own devices. Microinverters are also part of that equation. We've recently, in the last few years, expanded our addressable market to expand outside of the MLPE market.
It's been an important part of our strategy to increase our top-line revenue growth, capture more dollars on the sale. That includes what we call our brand name GO ESS, energy storage systems, and that is residential inverters and residential batteries, primarily for two markets that we're serving, both the U.S. and in Europe. Then finally, we have historically been an outsourced manufacturing model with manufacturing operations in China and in Thailand. But with recent changes in the tax laws, we set up shop here in Washington State over the past year to service the U.S. market to offer an optimized inverter solution of our own, which in the U.S. has the advantage of providing us with IRS 45X tax credits to defray some of the additional costs involved in manufacturing in the U.S.
Also be able to provide our customers the ability to utilize investment tax credits, which is up to a 30% tax credit and a 10% bonus credit on the purchase of solar equipment. Last year, we had about $103 million in revenues. Last 12 months, the run rate has been about $111 million. We recently guided down to $100 million-$110 million on our last call, which we'll talk about later. Cash is strong. We paid off a $50 million convertible note at the end of last year. We ended with positive cash. We've been able to grow the cash and our inventory, and working capital positions are fairly normal. On the right, I'll just point out there, it says in the last six months, you can see 71% of our revenue's coming there from the EMEA region.
That's a summary about us. The markets keep growing. This slide, just simply, I'm pointing out here that this is a Wood Mackenzie analysis of our market share gains, where from 2022, we were at 9% of the market for optimized solutions for DC optimizers that are paired with inverters, and that share has grown to 21%. That's been a key driver for our success. Our ability to grow more than just the macroeconomic conditions of each economy has been predicated upon getting these market share gains, and that's something we've been able to achieve since 2022. The market data comes out every summer, so we would expect to have an update for next year. As I mentioned, we expanded into the residential inverter and battery space. That's increased our addressable market fairly significantly. It's a very large market there.
Also part of our strategy is to increase partnerships, and so our partnership with an inverter company in the U.S. called EG4 for the optimized inverter allows us to, again, tap into the ITC credit buyer, has 45X tax credits. We recently had some press releases with Otovo. Otovo helps to repower older systems that have been orphaned when installers go bankrupt, et cetera. They're using our inverter for that repower market. That's a growing market. A lot of the panels, inverters from pre-2020, 2015, have older technologies whereby the inverter doesn't necessarily last the entire 25 years of the panel. In fact, you can see that just the warranties that they give on them, 10 to 12 years, doesn't match the 25-year warranty that they give on the panel or the 25 years that we give on our MLPE products, for instance.
So how do our revenues break down by product? In the first half of the year, 86% were in the MLPE area. So within MLPE, we are very strong in some key markets, including Germany, Poland, Italy, the U.K., and United States. Some of the backdrop of what's happened over the last year, I'd say, was at the beginning of the year, you had third party estimates, analysts, et cetera, expecting to see some less of a decline in the U.S. as a result of the 25D tax credit for the consumer being eliminated. I think they were looking at something like 16% decline for the residential rooftop market. So far, with the published data that's come out, that drop has been closer to 19%, 20%, and that's where the analysts are today.
For us in particular, our sales in the U.S. have been mostly focused on that cash buyer segment. It was about 60% while the tax deduction was in place. That segment has dropped to about 30%, so it's shrunk in half. Obviously that's created some declines in that market for us. That's one of the reasons we're manufacturing in the U.S. and looking to utilize the 45X and with the 48E ITC tax credits to offset that. That's a key part of our U.S. growth strategy right there. The German market, Polish, and Czech markets all had some pullback in subsidies. It's been a worldwide trend. There's been some reduction, elimination, and replacement with more modest programs. Those economies also, we're major players in, they've had further drops than initially expected in the beginning of the year, according to consensus.
But the good news is that in all of these countries that I am mentioning, that post subsidy changes, the market is looking to recover positively in those regions that we compete in. In addition to our strategy of gaining market share in the places where we already exist, we also are looking in 2027 to expand in places where we do not have much of a physical presence or a selling presence with distributors and partners. There are other regions in Europe notably, call it Romania, call it France, a very large economy. There is more to be done in the U.K., which has actually had a very strong, robust solar growth over the last couple of years. Then in Asia as well, where it is more of a C&I utility market, but it is calling for fairly strong growth, especially in utilities and C&I in Thailand and Philippines.
In those two places, we do have a presence, and that is an area that we are going to be focusing on in 2027. So that is our MLPE strategy, how to grow our base business. Now within GO ESS, it is an important part of our strategy as well. We are in the United States, Germany, and Italy primarily. We had a PR a little bit while ago about the Czech Republic. That is a strong market for us. As we look into 2027 and beyond, the buyer is increasingly looking to buy a battery with the rest of their system. So that is why it is important for us to be able to offer additional products in that category for that purpose. We will be making much more concentrated effort to continue executing with our residential battery inverter solution in the areas where we are participating.
We are taking a look at other areas where we can get certified and enter maybe adjacent markets. Then finally, the third area of our company is the smallest. It is 2%, but it is in the very large addressable market. In the utility space, where it is software called Predict+ via an acquisition we did several years ago that does supply and demand prediction. Utilities, concentrated primarily in the Israeli market, use that to be able to sell excess power on the spot market. The ROI is very positive. They also want to be able to make sure that they meet the needs of the meters of the consumers that need the power and with the supply component, and that does not have to just be solar, it could be gas turbine, it can be other forms of solar generation.
So that is another software feature that we think has a lot of legs and a lot of room for growth. We are concentrating on expanding the addressable market outside of just the European theater and also into the United States. That being said, it does have long sales lead cycles because you are dealing with utilities. So why do you end up using an optimizer? Actually, probably the biggest competition to optimizers is not really other optimizers. There are only a few companies, two Chinese players and SolarEdge, that actually have an optimizer that they sell. Ours being the one that is most agnostic, that will work with any inverter. That is our differentiator. But using our own data, we have shown that you can get up to an 8.7% improvement in the power that comes out of that whole system. Our biggest competition is actually just non-optimized solutions.
A non-optimized solution can make sense if you're in the desert, all the panels are facing one way, and the orientation to the sun isn't very different. Where you have the need for optimization is where you've got some panels that aren't oriented to the sun in the same way, and you could have shading. If you have a poor-performing panel that's hooked up to the same electrical line, you're going to get degradation in all those good-performing panels. What optimization does, is it works with the algorithm within, they call it maximum power point tracking, but it's really just Ohm's law. It's voltage and current to adjust the two in order to get the max amount of watts that go through the system. It's really ROI positive. It pays for itself.
We have the most amount of traction where optimization provides the greatest benefit, and that tends to be in the urban environments, where you have some of these conditions that can affect the overall panels. Then within the utility market, we have the most traction with more of the rapid shutdown feature or monitoring feature. Those are where companies would want to be able to monitor their panel performance without having to walk the field, and where you have to have rapid safety shutdown because you have a large field that. We have an installation that's on water, for instance. You've got to have some ability to shut down the system to try to prevent some catastrophic failure. We're in all three segments of the market. In the residential, you often see us on roofs that combat the negative shading effects for solar.
In the commercial area, you can see us with optimization, but also with monitoring capabilities, which lower just the cost of maintaining the system itself. Then the rapid shutdown coming a lot more in the higher-end 1 MW and up utility market. Here's the example of the floating solar system on the water. Here's a brief picture of our hybrid battery and inverter solution. Again, it's two different ones for two different markets, one for Europe, one for the U.S. I think I've sort of addressed that. Here's a little pictorial of our monitoring capabilities. There's data on every single panel that is able to help identify if there's any problems in the panel so that you can then go and correct that. Then our Predict+, as I previously mentioned, is geared towards utility suppliers, utility providers, to help balance their supply and demand equations.
We sell via distribution for the most part, about 80%-85%. The buyer tends to be the EPC, if it's a large installation, or it's the installer if it's another installation. We sell on our flexibility. We have something called selective optimization, where our optimizer has patented technology that optimizes only when it needs to. It has a lower duty cycle, and that leads to a much higher reliability. We have some of the highest reliability ratings in the market, 0.25% failure rates. Selective deployment just means that you don't have to put it on every panel. These are the things that the installers, EPCs really love about our product and MLPEs, is the reliability. Obviously, they don't want to come back and have to reinstall something. The selective deployment is you can put optimization just on those shaded panels, for instance.
You do not have to put it on the whole system. Coupled with our battery, which is DC, which has less losses as you convert. You have to do less conversions of AC and DC. We have software analytics that overlay our entire portfolio there and patented technology. Just getting to our financials, we went public via a de-SPAC in 2023. We grew tremendously to $145 million in 2023. If you followed the market, you had the Russian and Ukraine war in 2022, big spike in solar. Big response of too much inventory in the channel, leading to a decline in 2024. 2025 was a recovery year. We recovered with it. Definitely a bit of a rollercoaster ride from $145 million to $54 million up to $103 million, and I would describe 2026 as just a flattish year as subsidies have been taken out of the market more.
In my view and many people's view, the whiplash effect of subsidies inherently just causes a lot of chaos already. The economics of solar are there on its own. It is the lowest cost form of energy by a mile. I think as we look into 2027, we will see a little bit less government intervention, if you will, with these sort of outside subsidy programs. I think we will get to a little bit more of some stability in the growth rates. As I mentioned in the key markets that we are participating in, analysts are expecting, I will say, growth in those markets. We have been able to perform at low 40%+ in our gross margin. Strong business model, a lot of it owes to the fact that we have very unique patented technology that is unique to the market.
Our EBITDA was positive last year. We are guiding at the break even -1 to +0.5. We will announce in two weeks. In two weeks, I can give you a better update on how the quarter went. Just to sum up, we have a diverse array of customers, a lot of more distributors, and they have a lot of customers as well. We really do not have anybody approaching more than 10% of our revenues. These are some of the names that are not household names, but within each of the markets, these are the major distributors that we work with and that we sell to sell our product through.
I will close with that and happy to answer any questions. Well then, thank you very much for your time. I appreciate it. You got a question? Nope. He is just wiping his eyes. Never mind. Yeah.
[audio distortion]Okay. Can you talk about profitability?
Yeah, sure. We were profitable last year. We have been cash positive this year. We gave guidance that is sort of in that break-even range, and at these levels, we can run the business at this break-even modestly positive level. I think as we tick up in our revenues, as we increase that top-line growth, we are in a good position to scale the growth. A year ago, at $30 million, we were doing close to $3 million in EBITDA, I think $2.7 million. We hold the line on expenses. We are keeping the OpEx flat. It is fixed and low, and it scales, and it does not require a lot of investment to grow with revenue.
Our target model is 40% or better on gross margins. We are already there on that part. As the revenue grows, we will get closer to the 20% or better on the EBITDA margins. Yes.
[audio distortion] Have you contemplated any inorganic growth opportunities?
I'm sorry.
[audio distortion] Any inorganic growth opportunities?
Yeah, actually, we are looking at inorganic growth opportunities. It is something that we regularly visit and look to. In this market, there's been a fair amount of bankruptcies and going out of business and a lot of assets that have kind of come on the market. It is something that we're actively pursuing, so we're keeping a close ear on it. It's definitely part of our agenda.