Zeo Energy Corp. Reports 33.2% Revenue Decline, $9.9 Million Net Loss for Fiscal Year 2024

Zeo Energy Corp., a Delaware-based renewable energy company, reported net revenues of $73.2 million for the fiscal year ended December 31, 2024, a decrease of 33.2% compared to $109.7 million in 2023. The decline in revenue was attributed to the impact of higher interest rates on consumer financing, which reduced the attractiveness of solar energy systems relative to traditional utility costs. This resulted in decreased sales from both the company's sales force and dealer network. The company's gross profit was $34.4 million, with a gross margin of 47.0%, compared to $49.8 million and 45.4% respectively in the prior year.

The company's operating expenses totaled $84.1 million, a 19.6% decrease from $104.6 million in the previous year. Sales and marketing expenses decreased by 35.4% to $19.6 million, primarily due to lower commission expenses resulting from decreased revenue. However, general and administrative expenses increased by 67.0% to $21.6 million, mainly due to $7.9 million in stock compensation expenses, which were not present in the prior year. The company reported a loss from operations of $10.8 million, compared to an income from operations of $5.1 million in 2023. Net loss for the year was $9.9 million, or $0.48 per share, compared to a net income of $4.8 million, or $4.85 per share, in the previous year. Adjusted EBITDA, a non-GAAP measure, was $2.0 million, with an adjusted EBITDA margin of 2.7%, compared to $7.0 million and 6.4% respectively in 2023.

Operationally, Zeo Energy Corp. completed a business combination with ESGEN Acquisition Corp. on March 13, 2024, changing its name from ESGEN Acquisition Corporation. The company also closed an Asset Purchase Agreement with Lumio Holdings, Inc. on October 25, 2024, acquiring certain assets including uninstalled residential solar energy contracts and inventory for $4 million in cash and 6,206,897 shares of Class A Common Stock. In December 2024, the company issued a Promissory Note to LHX Intermediate, LLC, allowing it to borrow up to $4 million, with repayment through the issuance of Class A Common Stock at $1.35 per share, subject to stockholder approval. The company's workforce included approximately 190 full-time employees as of December 31, 2024, and approximately 290 sales agents engaged as independent contractors.

The company's strategy includes expanding into new geographic markets, increasing capacity for efficient growth by investing in people and systems, growing its external dealer sales channel, and expanding customer options for buying affordable solar energy. The company's business model is vertically integrated, encompassing marketing, design, sales, procurement, installation, and service of residential solar energy systems. The company faces competition from electric utilities, retail electric providers, independent power producers, and other renewable energy companies. The company's operations are subject to various national, state, and local laws and regulations, including those related to tariffs, duties, trade restrictions, license requirements, and consumer interactions.

Looking ahead, the company anticipates that its future performance will be influenced by factors such as government policy support for solar energy, fluctuations in customer demand, the availability and cost of financing, and its ability to manage its supply chain and expand its operations. The company also faces risks related to increased competition, potential regulatory inquiries and litigation, and the impact of climate change. On April 17, 2025, the company received a notice from Nasdaq regarding non-compliance with periodic filing requirements, and has until June 16, 2025, to submit a plan to regain compliance.