- Earnings call transcript Q3 2022

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Operator

Good afternoon, and welcome to SPI Energy's Third Quarter Fiscal 2022 Conference Call.

As a reminder, this call is being recorded and participants are in a listen-only mode. The call will be open for questions-and-answer following the presentation. On today's call are SPI Energy's Chairman and CEO, Denton Peng, and COO, H. K. Cheong.

Harbor risks company described future to filings conference constitute forward-looking speak those SPI to of Peng please the Mr. including expectations, pass for date, after Company's to that to of their the in various everyone made only forward-looking statements to events cause XXXX. begin, Private may to Chairman purposes about the over statements XX, and call materially risks CEO. forward-looking these differ intend November reflect today’s indicated, remarks occur plans Safe are SPI we Any today. the cautions update would Reform results or forward-looking remind SEC. like I'll from that the statements Securities with that these proceed. Before Peng Litigation that Denton under statements any of on Act now XXXX. subject call provisions this actual and not uncertainties prospects Wednesday, of does as circumstances and

Denton Peng

on Thank Cherry. today joining us earnings third quarter everyone XXXX for you, you call. to Thank our

investment the We performance in the by revenue are of double growth to quarter, development driven our pleased year-over-year third initiatives. project report digit and strategic solar continued

enable out with anticipated operation Currently, With manufacturing in Act of manufacturing than most module more be capacity been California, module us ramping of anticipate solar in to this to the and accelerated consumer our which is from year, demand. the we attractive rapidly commercial margin capacity sold increase The gross the will expanding XX%. up solar meet have Reduction recent earn passing our in ahead. growth Inflation Act, Reduction Inflation the our operation quarters incentive

Inflation facility signed we XXXX, Reduction manufacturing gigawatt As McClellan this facility, be to a adjacent expect collectively part in quarter. part enable business our and new our planned our solar capacity which solar California to our mid of manufacturing facility X.X us in East current XX% facility manufacturing lease module watt We additional increase Park, during the in starting anticipate we income this will year. the in will third to additional to a new the Act, country. and expansion, our property the XX% with next XXXX module year will help by $X.XX Under improve further per of next the incentive of

of X.X at SEM conventional achieved. the milestone closer a equipment have gigawatt strong quarter, during from The signing with of Looking third Wafertech solar will the player, SPI of wafer quarter. one acquire the another intent translation to key a letter manufacturing and performance of macro achievement our was

solar there's solar continue sourced grow the wafers. in need for demand to As increasing local the for U.S.

business supply With margin new generating future the launch issue SEM we adding revenue of also gain from potential high suppliers. overseas chain mitigating benefit of the Wafertech while

Solar wafer used which are in solar manufacturing are modules. the key components solar cells used for of manufacturing

expected up rapid This from attractive delivery earn Inflation demand of will production to additional which by per XXXX. stand starting U.S. an feet increase with solar the by Act, in in gigawatts produced. us the wafers $XX are We incentive by benefit to investment capacity square ramping to strategic of and Reduction enable three XXXX driven greatly The

great in success. on position further with as I in H. details Operating each for our our our Cheong the performance our combined unlock the foundation, with record quarter radically call K. Chief the my we growth this that over in Before across educate. Officer team a of noting It share market I value class business by track ahead. K., industry immediately I'm tailwinds world quarters H. a to pass operational to K.? place call Shareholders, that multi-decade third to confident increase of conclude will building units. new H. turn comments us for us I to growing now enables over of is strong our our accelerate

Hoong Khoeng Cheong

emission begin solar equivalent solar second kilowatt than you, million This Yeah, megawatts Illinois project or in of This Thank of scale in first expected electricity of began homes in quarter. year land is one project County, XX.XX Illinois, XX.X X,XXX on during the by Kendall operation year. utility the energy. XXX needed Denton. to produce is XXXX. to operation, In the is third of XX of its we AC the hour is project megawatts expected offset phase DC to COX acres and a more

provide the SolarJuice energy the our module more solar portfolio make and management of in exciting commercial semi-public residential, respect the more third and updates during American achievement use than as for residential was solution enhanced our countries. signing Australia Wallbox and agreement offers Wallbox. premium of charging This public portfolio, solution between to charging, quarter like specifically XXX Another complete on manufacturing offering would and as cooperation in with smart our for bi-directional agreement charging. I to business. Also, well a

California of remaining orders are start solar U.S. megawatt. customers. to make in this with XXX We been line modules has capacity than production The Sacramento, capacity booked for more of American in with megawatts delivering backlog XX based currently this fully of the and mass year production

and industrial business is commercial residential sector. the module in Our primary in

well. like So are contract have Krannich, distributor C&I as national base and our and growing with regional Supply CED, ABC customer we we

The to Act is watt, with we gross Inflation watt, our or this than of Our average benefits effective XX% more, Federal our $X.XX expect and be margin XX%. per of with per which incentive will more an for cost becoming watt average ASP in $X.XX Reduction solar eligible per business. $X.XX recent solid other incentive will manufacturer, additional we a meaning XX% by increase $X.XX module to SolarJuice XXXX, income from U.S.-based as

end capacity expansion commenced and by XXX XXXX. be X quarter running in this of year, to is Phase megawatt and three Our of expected up the

plan, will we year our expansion have this XXX existing per of capacity completion the megawatt With facilities. in

filing March. This is Company translates This Form reporting quarter financials. on of and compared U.S. our transparency on in filer. third XX-K our report our as timely previous the annual requirements to performance to Company's follows increased of first Form foreign XX-Q as a our and more to metric a filing the turning Now

For sales September $XX.X sales increased up XX.X% from be XX, net QX our mainly the XXXX, XX to quarter ended line. Revenues increasing in business million to continue XXXX. solar driven of by from our million

to which of $XX.X Our revenues. QX from material $XX.X increase in consists cost primarily of and our in XXXX, with third in and million quarter, net costs consistent the labor revenue increasing million up raw of

resulted is quarter was in in or down to of year progress of other cost to the number an mainly in of loss Our with factors of quarter margin $X sales negative largely or Together, QX in was solar and the borrowings improvement of decrease of significantly management This giving changes million other third in gross Interest the compared the loss net ago XX.X% due $X.X XXXX. XXXX, million in in $XX.X loss administrative our roofing sales million $XX.X million fixed. XXXX. work indirect the in than of quarter, of $X.X net XXXX. in period General or $XX.X of more the sales, compared job $XX.X million in during the X.X%. expense. net in gross decrease The XX% no these margin overall from period. $X.X the operating in the significant from our net expense decreased XX% convertible expenses energy of to $X.X of compensation stock-based of and the net was jobs XX.X% the sales and profit. were decrease quarter net of the million million to million installation gross Total of the due decrease loss was quarter of in and quarter margin third million, third bonds gross system decrease segment. primarily the gross of decreased quarter in million Company's expenses or third third in $X.X to third during us Since The

we XXXX, restricted cash, million $X.X equivalents and had in As September cash of XX, cash.

now So forward look success with updates. sharing to questions. ongoing the for you We open future we in our call

Operator

question proceed. Instructions] [Operator is first Please with Tate Sullivan you. Maxim The from Group. Our Thank

Tate Sullivan

Good or please? that booked, comments of California I the about and your modules, the In is facility that capacity all. day solar manufacturing is your fully you. of your rather regards approximately panels to hear Thank megawatts backlog you say XX

Hoong Khoeng Cheong

for Yeah, year fully booked. this the production's already

year, have most next orders. customers For commitment of

strong. So way the a in demand's

bigger the Maybe I is think today times what produce produce demand year. enough. for we XX next can than cannot probably we

Tate Sullivan

so modules? quarter, placing of in Next Do in delivery customers currently XXXX? the Are taking current they lot to delivery the a of prefer they're orders. this year, take advanced

Denton Peng

every these take think every that they will almost panel every We week.

lot our So will we most week, are of is you almost of see produced. every it now module, shipping module a

increase We are continuing our to capacity. production

can this produce delivery So year. most of good our modules, we

Of for year. much course, for today year and can next much, produce demand the demand more than is next we

Tate Sullivan

understanding is to over any as appeared that with distribution in third year mean, not revenue, have there the or factors and quarter in seasonal reporting business consider business? I Great, the the Australian last quarter. to case this financials for first quarter. solar your then We're quarterly well. that it the decline is happened for Are

Denton Peng

on roofing we revenue reduced business. to I have just increasing And last said, more is compared installation focused our still same more on or only. solar period? digit year double Yeah, yeah, been We some limited

that ramping So our in third something in little we third the meantime, slowed started a quarter. first up up are the starting capacity be from But starting module is and production business then delivery in this will June quarter. ramping down bit already

from and quarters passed for I give This Reduction Inflation will our year, stronger four it's will in think because This U.S. incentive delivery additional big the business growth for much manufacturing especially the module in manufacturing of an a Act. the have of recently the be profitable will next driver quarter U.S. for very in we for revenue module in the coming a $X.XX a

big growth our for This already have built driver XXX revenue very next in year. We capacity for California. megawatt is

Tate Sullivan

much day. you thank Okay, Thank very a Denton. you. good Have

Denton Peng

you. Thank

Operator

is with Our proceed. Tim Moore from Instructions] [Operator EF Please Hutton. next question

Tim Moore

$XXX goal? sales might bit for guidance assume you the be Is the a year stretched million Do it the little to quarter, fair previous to quarter? fourth for million a for December your of of guidance $XXX have that

Hoong Khoeng Cheong

many will we still additional ramping more yet are capacity Yeah, in booked. year things guidance quarter our XX be already factory. Sacramento have probably this said, because us give we we cell not megawatts -- We're in This capacity, as up we we fully produce Especially, have module and revenue. can And happened. manufacturing, have provided X.

million than more So $XX easily.

too not this the the have there's quarter, the see generally, some We uncertainty. yet much. some insulation distribution because we or also put So business. guidance But uncertainty not there's in in and for some business

because a big We happen, be quarter margin, increase four business be like isn't today. have because business will American we manufacturing -- XX% buildings margin operate than higher gross will very and in gross it and the will it's the either it's got module the other our and gross that of business healthy the margin

Tim Moore

That's helpful.

two that. module have sales revenue questions your stream part be report it you start quarter, PV year? will separate your early a March or rolled of up I the to solar report next next manufacturing add solar Just when line and related numbers components you when you and When wafer you will reporting year, for item

Hoong Khoeng Cheong

just because is profitable. the consolidate current think we I our most business in -- of in Yeah, revenue

sale So business is the purchase electricity agreements. power

the and in United in have Greece, in We electricity Kingdom. in Italy, Hawaii very stable

So this stable. has very been

sometimes especially However very have time but year, project of Then a is revenue pipeline business. a margin, it's strong This is the have this based project XX% than lot have of gross Oregon, electricity, because and our pipelines. valuable Currently XXX like Also Maryland. most we in U.S. just more but in Massachusetts, flow slow. to than sell in very This Illinois and time, PV Hawaii, California. time in more mentioned project we one cash healthy megawatts as in company projects globally, is

very high. project is all value So this it's

to XX invested of money lot this in developed last project area years. have X this We in and a

very, that And big profitable in in business always continue we still open have have will very business. very this few business year. Australia. time. last distribution that to It's see be will value profitable strong year we still been So by years, this project business time growing we growing and Then U.S. still This a in asset

some takes EV profitable. have This of a consolidated an We time it it of is motorcars. business electronic had in business business, IPO already, maybe June, But be to at $XXX course, this million. valuation

raised IPO. we million So that $XX since

But two in from good business starting business. brand. very this the or We to a have a module very Petersen-Dean. fundamental and bought, sale three good our We China and years installation for grow ago, is solar a now also provide

a is where So are we this running business now. already

especially our So we and Most importantly, and year, of we for end solar the newly the employees a Sacramento lot want California. last the invest money manufacturing up solar, module set installation solar we in forecast, efforts, from business of other to highlight here. lot of in

employees our almost week. now So increasing every

up we megawatts, to the make and have full of very demand strong American have ramped So XXX now solar, module. capacity for

So and additional, the last very wafer recently future. solar will This also in also a company the made year in factory bring for important have revenue U.S.

Tim Moore

say, is get made in the you at you quarter Sacramento $XX great, million? When when modules, million, press way. release It's should for what call? million that revenue quarter, forward? you ask investors number I going more revenue you will tell $XX Would the you this maybe a American the share on Will $XX actually different or each the conference plant, that

Hoong Khoeng Cheong

Yeah.

for you gross selling fully So capacity sell production. million, more $X.XX. megawatts operation XX%. we in price an from this was business for booked is year margin next the if than That's XXX fourth itself. we next example, quarter, XX see, module $XX year, we our mean of can have current orders. have This And Easily as megawatt over

in like probably similar more of $X.XX $XXX next easily the can have So a footprint, you easily for XXX have year. megawatts, even we than take that by we and price can revenue million

we will be than the can few So have today for last more revenue I think years. this is

So for this is big for big the driver this company, we very and change why say very, is company. a a the

capacity our the next current very, times produce. for over more is XX California demand probably bigger $XXX put So can manufacturing year, produce facility, strong just we we may have we all partners. for modules Sacramento in produce XXX the from than revenue us if module million megawatt than very The and we today

Tim Moore

H. those you you maybe a more gross K. gross elaborate you loss results, quarter? Yeah, two maybe color. little to expect positive for that's what a little a for helpful, maybe more have gross the and the Thanks that on been sharing really dragged just you quarter. for margin there September in that numbers Could reported Would in It's have was quarter that usually explain for a Thank I just a you. questions. down? Can what a positive bit margin, margin was, the quarter. really December more it bit gross the

Hoong Khoeng Cheong

EV Yeah, I is business, loss. think still we have a

Of roofing and course, we engineering, we consolidate, solar Petersen-Dean. from do mostly original also we business, have insulation bought so and we

We solar and more California are on on focused more installation. on more focused

have quarter, in this the still the and two cost phase leasing in and up. third module So solar also some ramping our

is up many, a So we many expenses still small because still coming more ramping there. revenue the hiring changing periods. in Still and

ramping-up more be be of for quarter year. our full next this will year. next process change, from for will most totally especially Because certainly to and capacity four will So starting be

manufacturing So especially capacity. our for module

be expenses profitability. flowing the will through the of most So

will the haven't So from continue is PV properly, is already business June. off the spring money lost but only

very So year. most next profitable be our business will

Tim Moore

H. Well, about that's really K. My EV question the last helpful business. is

until you the the electric a was of quarters? EV recoup supply out For the can do were think think delayed week revenue that it end anticipating you resolved, issue those maybe business December think September being and pushed that reported and in Phoenix that the few do to you know it's will first Do I Motor earlier million revenues, quarter? December do the or for that the was when a quarter that vehicles take constraints you there software this of battery

Hoong Khoeng Cheong

very operation They know, for will Phoenix well they think on Motor you you are as backlog delay the have they they the report is planned. very But If as of doing everything's generally the I the but business can definitely in EV still Motor. Still separately. to and they as some moving contact question the strong. Phoenix. the Phoenix in managing they any such of Yeah, said, battery have team

of to, you the Motor. if with we have management happy connect can questions, detailed more So Phoenix

Tim Moore

you much Denton. I H. Thank Thank appreciate it. so K., you

Hoong Khoeng Cheong

you. Thank

Operator

question-and-answer That comments. to closing the Denton conference I session. would to concludes like for turn our over back

Denton Peng

Thank interest. for you your

Hoong Khoeng Cheong

Thank much. you very

Operator

Thank conference. you. This conclude does today's

your disconnect thank participation. lines and time for at this may your You you

SPI Energy (SPIEF) 17 Nov 222022 Q3 Earnings call transcript