SUNation Energy Reports $3.5 Million Net Loss in Q1 2025 Amid Revenue Decline

SUNation Energy, Inc. reported a net loss of $3.5 million for the first quarter of 2025, a significant decline from a net income of $1.2 million in the same period of 2024. This shift reflects a decrease in revenue, which fell by 4.4% to $12.6 million, down from $13.2 million year-over-year. The company's gross profit also decreased to $4.4 million, resulting in a gross margin of 35%, slightly down from 36% in the previous year. The decline in revenue was primarily attributed to lower residential contract and service revenues, despite a 7% increase in overall kilowatts installed on residential projects.

In terms of operational metrics, SUNation's residential contract revenue decreased by 3% to $7.9 million, while commercial contract revenue increased by 28% to $1.3 million. The company experienced a notable drop in service revenue, which fell by 40% to $372,544, largely due to reduced battery installations. The overall decrease in revenue was compounded by a 13% decline in price per watt, particularly affecting the Hawaii Energy Connection (HEC) segment.

Strategically, SUNation has undergone significant organizational changes, including a series of reverse stock splits aimed at maintaining compliance with Nasdaq listing requirements. The most recent split, executed at a ratio of 1-for-200, took effect on April 21, 2025. The company also raised approximately $20 million through a securities purchase agreement, which included a first closing of $15 million in February and a second closing of $5 million in April. These funds were utilized to pay off outstanding debts, including a long-term promissory note and other liabilities.

As of March 31, 2025, SUNation reported a working capital deficit of $9.7 million, with total current assets of $10.5 million against current liabilities of $20.3 million. The company had cash and cash equivalents totaling $1.7 million, of which $292,901 was restricted and could not be used for operational needs. The management has indicated that substantial doubt exists regarding the company's ability to continue as a going concern, emphasizing the need for additional capital resources to support ongoing operations and corporate overhead costs.

Looking ahead, SUNation aims to enhance its operational efficiency and financial stability through strategic acquisitions and partnerships in the solar energy sector. The company is focused on expanding its market presence while navigating the challenges posed by fluctuating market conditions and regulatory environments. However, the management cautions that the ability to raise additional capital remains uncertain, which could impact future growth and operational capabilities.