Tecogen Inc.

Total revenue was $5.8 million in Q2 2026, down 21% or $1.5 million from $7.3 million in Q2 2025. Gross profit was $2.2 million, down 11.9% from $2.5 million, while gross margin improved to 37.8% from 33.8%. Net loss widened to $2.2 million from $1.5 million, and adjusted EBITDA loss was $1.7 million versus $1.2 million last year. By segment, products revenue fell 64% to $1.1 million from $3.2 million, services revenue rose 10% to $4.4 million from $4.0 million, and energy production revenue rose 35% to $240 thousand from $170 thousand. Management did not provide formal quarterly or full-year numeric guidance, but said it expects revenue to increase in Q3, with product revenue and cash collections helped by a backlog above $8 million plus an additional $2 million to $3 million of expected project closings.

CEO Abinand Rangesh focused almost entirely on the data center opportunity, arguing that Tecogen has now reached a point where larger hyperscale and brand-name customers are engaging seriously. He said the company has moved from smaller reference projects toward larger names, and that the product demos have shown strong interest because the technology addresses power, water, noise, and emissions issues. His tone was optimistic and strategic, but he repeatedly framed the goal as maximizing value while managing the constraints of a small company, cash, and lead times.

CFO Roger Deschenes said Q2 revenue declined because of lower product segment sales, but service and energy production grew, partially offsetting the weakness. He highlighted gross margin improvement to 37.8% from 33.8%, with product gross margin rising to 48.5% from 29.3% due to price increases and mix, while service gross margin was held back by about $300 thousand of one-time costs at serviced energy sites; excluding those costs, service gross margin would have been 7% higher. He also noted operating expenses rose to $4.3 million from $3.9 million due to higher operating costs and manufacturing capacity expansion, though expenses were down about $400 thousand versus Q1.

Analysts pressed management on whether the 12 demos represented real momentum, whether larger customers were ready to scale, and how inventory build would affect cash. Rangesh said all 12 were different entities, 8 were potential direct end customers, and the rest were engineers or partners with influence; he also said the company is building inventory to reduce lead times and may start small and grow with larger customers. Questions about Vertiv were largely deflected because management said it wanted to avoid approvals until something more substantial closes, though Rangesh said the relationship is in a very good place and the MPA process is still progressing. Analysts also asked about retrofit versus new-build demand, and management said it is seeing both, with more opportunities now in existing data centers, expansions, and phased campus additions.