Tecogen Inc. reported third‑quarter 2025 revenue of $7.18 million, a 27.6% increase from $5.63 million in the same period a year earlier, and a 27.6% year‑over‑year rise that exceeded the consensus estimate of $6.81 million. The revenue growth was driven primarily by a 114.5% surge in the Products segment, largely from chiller sales to data‑center customers, while the Services segment grew modestly and the Energy Production segment declined due to contract expirations and site shutdowns.
The company posted a net loss of $2.13 million, widening from a $0.93 million loss in the prior year. The loss translated to $0.07 per share, missing the consensus estimate of a $0.051 loss per share. Gross margin contracted to 30.4% from 44.1% in Q3 2024, a decline driven by higher material and labor costs in the Services segment, increased investment in new engines, and lower margins on early shipments of air‑cooled chillers.
Segment analysis shows the Products segment generated $4.12 million of revenue, up 114.5% YoY, reflecting strong demand for natural‑gas‑powered chillers in AI‑driven data centers. The Services segment contributed $2.05 million, a modest 5% increase, but its margin was eroded by higher labor costs and capital expenditures. The Energy Production segment posted a $0.03 million loss, down from $0.12 million in the prior year, as several long‑term contracts expired and a key site was shut down.
CEO Abinand Rangesh highlighted the company’s progress in the data‑center market, noting that a new letter of intent could expand chiller sales to three sites and that interest from major developers and chip manufacturers has increased. He also emphasized a $700 k investment in new engines to improve service margins, acknowledging the short‑term impact on profitability but projecting long‑term gains. Rangesh expressed confidence that Tecogen’s technology would become a key component of future data‑center cooling solutions.
Analysts had expected revenue of $6.81 million and a loss of $0.051 per share. The revenue beat was largely attributed to the explosive growth in the Products segment, while the wider net loss was driven by margin compression and the company’s capital‑intensive investments. Market reaction was tempered by concerns over the declining gross margin and the widening loss, which outweighed the positive revenue beat and strategic progress in the data‑center space.
Tecogen’s cash position stood at $15.25 million as of September 30, 2025, with no debt, giving the company flexibility to fund ongoing investments. The company’s focus on the growing AI‑driven data‑center market, combined with its strong cash position, positions it to capitalize on future demand, though it must manage costs to translate revenue growth into profitability.
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