Tecogen Inc. Reports 17.6% Revenue Growth in Q1 2025, Driven by Product Sales

Tecogen Inc. reported its financial results for the first quarter of 2025, revealing total revenues of $7.28 million, a 17.6% increase from $6.19 million in the same period of 2024. The growth was primarily driven by a significant rise in product sales, particularly in chillers, which saw a 109.1% increase year-over-year. Product revenues reached $2.53 million, up from $1.49 million, while service revenues also grew by 5.7% to $4.25 million. However, energy production revenues declined by 26.7% to $498,939, attributed to the expiration of several contracts and temporary shutdowns for repairs.

The company's gross profit for the quarter was $3.22 million, compared to $2.58 million in the prior year, reflecting an improved gross margin of 44.3%, up from 41.6%. Operating expenses increased to $3.82 million from $3.63 million, leading to a reduced loss from operations of $594,244, compared to a loss of $1.05 million in the previous year. The net loss attributable to Tecogen was $659,922, a 40.3% decrease from the $1.10 million loss reported in Q1 2024.

In terms of strategic developments, Tecogen has made significant strides in expanding its service offerings through the acquisition of maintenance contracts from Aegis Energy Services. This acquisition, which began in March 2023 and continued with amendments in February and May 2024, has allowed Tecogen to enhance its service portfolio and generate long-term revenue streams. The company also entered into a Sales and Marketing Agreement with Vertiv Corporation to promote its DTx chillers for data center cooling applications, further diversifying its market reach.

Operationally, Tecogen's backlog of product and installation projects stood at $9.52 million as of March 31, 2025, up from $5.55 million a year earlier. This backlog includes both confirmed purchase orders and projects in the approval process, indicating a positive outlook for future revenue generation. The company reported a working capital increase to $5.67 million, despite a decrease in cash and cash equivalents to $4.07 million, down 24.8% from the end of 2024.

Looking ahead, Tecogen's management remains cautiously optimistic about its ability to sustain operations and growth, relying on cash flows from operations and related party loans. The company is focused on developing its hybrid-drive air-cooled chiller and expanding into new markets, particularly in response to increasing demand from data centers and industrial facilities facing power constraints. However, management acknowledges the potential need for additional financing to support these initiatives, emphasizing the importance of maintaining operational efficiency and managing expenses effectively.