Business Focus and Strategy - Zeo Energy Corp. is focused on accelerating the transition to renewable energy, providing residential solar energy systems and related services in Florida, Texas, Arkansas, and Missouri[160]. - The company has a capital-light business strategy, relying on drop-shipped equipment to minimize inventory[163]. - The company intends to expand its product offerings and services in residential markets across additional states to drive future revenue growth[194]. - The company plans to expand its workforce by hiring and training more skilled technicians to ensure high standards for quality and safety[165]. - The company plans to double its in-house sales force and external sales dealers in 2024 to target new customers in the Southern U.S. regional residential markets[196]. Sales and Revenue Performance - Revenue decreased by approximately 30.1 million in Q2 2023 to 14.2 million, or 29.2%, from 34.6 million in the same period of 2024[220]. - Most sales were generated in Florida and Ohio, with plans to enter new markets where solar penetration is below 7% of the addressable residential market[165]. - The company has sold over 679,000, compared to (3,033,683), compared to 3.9 million, with a gross margin of 26.7%, up from 17.1% in Q2 2023[189]. Costs and Expenses - Cost of goods sold decreased by 11.6 million, or 29.5%, maintaining a consistent percentage of revenue at 80%[222]. - General and administrative expenses increased by 3.8 million in Q2 2023 to 2.4 million in stock compensation recognized in 2024[216]. - General and administrative expenses increased by 5.2 million to 0.7 million, or 67.9%, from 0.3 million, reflecting reduced support for fewer sales personnel[224]. Cash Flow and Financing - Net cash used in operating activities was approximately 1.8 million in the same period of 2023, a decrease of 10.0 million for the six months ended June 30, 2024, primarily from the issuance of convertible preferred stock[235]. - As of June 30, 2024, cash and cash equivalents were approximately 8.0 million as of December 31, 2023[228]. - Interest rate increases have resulted in higher monthly costs for customers, slowing financing-related sales of solar systems[198]. Business Combination and Ownership - Following the Business Combination, the Primary Sellers own 83.8% of the equity of the company, retaining majority control[181]. - The Business Combination was accounted for as a reverse recapitalization, treating ESGEN as the acquired company[176]. - The Class A Common Stock and public warrants are traded on Nasdaq under the ticker symbols "ZEO" and "ZEOWW" respectively[175]. Impairment and Fair Value - Goodwill is recognized as the excess of acquisition-date consideration over the net identifiable assets acquired[248]. - The company conducts annual goodwill impairment tests on December 31, with no impairment recorded for the three months ended June 30, 2024 and 2023[249]. - Intangible assets, including tradenames and customer lists, are amortized on a straight-line basis over their estimated useful life[250]. - No impairment charges for intangible assets were recorded for the three months ended June 30, 2024 and 2023[251]. - Fair value determinations for business combinations are based on estimated fair values at acquisition date, using income and market approaches[247].
Zeo Energy Corporation(ZEO) - 2024 Q2 - Quarterly Report