SPWR - Earnings call transcript Q3 2017

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Operator

Welcome, and thank you for standing by for the SunPower's Earnings Call. We would also like to inform you that this call is being recorded. And if you have any objections you may now disconnect. And now, I would like to turn the call over to the host of today's call, Vice President of Investor Relations, Bob Okunski. Thank you and you may begin.

Bob Okunski

Chris. you, Thank welcome conference to our quarter third I'd everyone earnings call. XXXX like to

call start then CEO On strategic we financial XXXX. will today, the will quarter third outlook review Boynton, CFO, XXXX Tom for review Chuck and our and Tom off from Werner, our by our will followed results. our who discuss operational a with QX

replay later page reminder, a of website. today of the a will available this As be Relations on Investor our call

make reference & statements Harbor historical and described Relations press to To may Werner, SunPower, call, that the that supplemental call information set will today's to we XX-Q. risks and forward-looking are XXXX these subject our affect today's call, that various on well. additional we the Form regarding we this in have Please today's posted During our detailing on of those data Investor I'd that, With Tom our XX-K as during turn over this of a forward-looking who sheet reports Events X. release, CEO enhance statements. call, our presentation, slide will see some the factors are quarterly a will for website. have uncertainties on location, those begin slide to page we of which Safe the slides, metrics of same of PowerPoint like Tom? In Presentations posted documents

Thomas H. Werner

case. margin I to execution XXXX provide QX we us EBITDA progress performance exceed perspective on Thanks, will review forecast. Bob, and and adjusted thank quarter initiatives. financial XXX enabled our the us Section some our this for you financial also strategic revenue, trade on against will On and Strong joining our third today. call, report

further balance our a X Please on our million. our approximately review our an the residential solution also business. mix our X-Series we by overall cash to remains start level ramp project lease the well slide industry-leading expectation. strong U.S., by for are We I'll turn QX In on three slight and delevered in sheet in ASPs quarter. segments. increase $XX Equinox for a the reducing the debt U.S. The remained the executed generation and saw on in with We mix in demand complete EU plan. surpassed in planned line is the update of residential. with stable while

exceeded pricing the As QX. mentioned We bookings saw business markets new share our last quarter, we and strong gained key in as plan demand Japan our in markets of we during in again all the Europe doing homes deployments Outside residential quite quarter. during as remain and is both of we believe favorable. well U.S., both record in

balance markets the Looking forward, we solid expect of and in demand stable ASPs profile the in year. all a

to Please Moving slide X. on commercial. to turn

have been our years. in commercial increasing the the two We investment past segment over

quicker, with pleased our complete footprint. us driven are investments, the adoption in results enabled solution which total also market. to new system the operating cost reduces installed tools platform expense. and significantly decreases system global We the and to of The Digital of channels more Helix our Helix allow installation strong have and design expand enable sales U.S. of development accelerated time and commercial customer these for layout accurate

U.S. of record X-megawatt our QX completion headquarters. Our volume, the driven project performance by was including Toyota's Helix installation at

been and we active decade. pleased a be we rooftop in Apple partnership footprint commercial over finalized recently we We for are our market reach Japan. Daini for Initial results with expanding are the our internationally into promising to are deployment Denryoku, in as where broadening also the project commercial Japanese have

financing will we our Management million for in on portfolio Capital a three-year fund. his with are side, Chuck this comments. to partnership commercial On $XXX more Green announce the financing pleased True details provide

we to excess of strong certain in our storage with U.S. rates solar plus continue XX%. markets attach in interest Finally, see in solutions

where them be solar duration largest our XX-megawatt in the in complete, supply include the system. as plus wins this announcement New with and of storage we scale AES the well will When storage utility world. largest a as will a one Oasis system Hawaii XX-megawatt five-hour system

awarded deal Additionally, Army. a we were Redstone as X-megawatt the our part of for U.S. storage project

commercial remain Looking forward, we the excited about market.

across and Our growth applications and well carport further pipeline next megawatt growth our expansion by to Helix project exceeds and expect driven our $X.X of year, as continued XX% we pipeline. as systems of XX% rooftop, of billion solar storage deployment ground-mount

business. of in turn sale plan including and Chile. QX, the sale of X. for Pelicano our teams project Gala SunPower several on power well plant XX-megawatt XXX-megawatt review El and Please power In key plant to the completion the our as of project our slide let's as project milestones, facility our interconnection Solutions ahead Now, executed construction

France, of a execution As the project Mède. construction X-megawatt for an In beat power these result plant we for commenced also significantly milestones, quarter. our financial on targets La we

to announced been Year-to-date, see in Solutions to French in as than almost strong plant sales countries megawatts. to our up transition from previous XX tender international in to equipment agreements total the XX% equipment awarded toward and we well tenders awarded the approximately QX, power more Year-to-date we XXXX. an positioned CRE group solutions panel equipment XXX the continue We XXX continue model. business footprint recently, XXX supply bookings megawatts, to-date be than our CREX has expand expect quarter. are development rounds. solutions our customers as to upcoming and Also, provided we in in growth In additional more from SunPower have increasingly Total shipments exceeded megawatts

by expect the plants, of continue our solar the end and to year we solutions to forward power the El of in global Pelicano sell our Looking ramp project business.

Overall, Please mean the and of cell yield plan upstream cost production to Fab and to X. XX%, particular, the X remains while outperformed cost with again achieved quarter. our on Moving we as efficiency targets targets. on for slide technology. year turn our for In beating

we commercializing technology are to discussed panels. process to recently we and next-generation began our committed that certification for as pleased the announce remain we last NGT Finally, quarter,

roadmaps, on long-term QX, and technology on which plan focused for reduction cost In Looking forward, a calls plan. our remain utilization. our manufacturing we fab XXX% are

starting with In full-scale NGT addition build our production certification first forecasted for year. commenced initial line to orders we second process, of equipment tool have the for to next the half

includes X. which public now Now, XX. comment group, provide on well this XXX the U.S. the written a federal recommendations remedies on to chaired also X. President trade D.C. slide send and Section report A to their days. the the Please XX let's cover case. November turn public interagency do office, ITC for Tuesday, relevant to communicated actively will by the as they'll President in process. Representative's Trade December November analysis own remain their a engaged This parties in as with We Washington in meeting XX getting on On

in the SEIA Broadbent that and recommendation. had her remedy that supported proposed Commissioner has have We

Our should solar. position SunPower's not first is that that we remains are proposed a the benefit because, company be same, much based or like U.S. differently treated company for foreign technologies the excluded subsidies. This remedies, from from does

to industry-leading now our resources totals invest to more $XXX develop our we technology. million U.S. and our patented maintain Second, efforts to and and investment commercialize unique position R&D into this significant than continue

we and offerings the technology a from our with of pricing, subset given directly We market. the the distinct do petitioners. compete serve Third, not

people price the not X,XXX premium parts people efficiency than value a product, than as exclusion chain. our their more indirectly directly Fourth, our our high residential panels our of solar through to networks addition more we in twice in business, grow than in dealer through of almost employ our petitioner's example, XX,XXX ability heavily We hence their hurt have as other X,XXX also solar For to more invested business. the will people chain. residential in supply the S. U. the American well employing

as We as continued with administration parties to are will investment U.S. continue aware SunPower. our specific work to in jobs ensure all to that impact the well of

are that in decision. President facts We the account take the will final confident these into

I'd to to long-term over SunPower Before initiatives turn reiterate profitability. to X. to we Chuck the believe key drive briefly discuss to call slide the enable Please financials, like the will turning strategic

provide As while profitability half four and storage process commercial, product to into DG committed DG and to in focusing a quarter our assets the solar previously more would just non-core and strategic in in fourth are on investments. minute our on next-generation and little key of disclosed, the next areas: take complete detail to of Digital, Solutions residential being solutions, We second this year the efforts I the simplifying like the remain integration divestitures of platform. of cell, advanced solutions company SunPower investing profitable through a in our year. we sustainably our of

First, digital.

owning a in buying, to continue We in selling, SunPower and EG. invest installing software

Earlier the seeing, similar the our EDDiE of which example, seeing I for the in we partner mentioned in call, streamlines business. a platform software are adoption using experience. network, are we significantly our strong we're our For commercial sales that solutions customer software traction

we a our in pipeline a solar solar have million with signed and This projects. focus this solution. as solar Energy to initiatives on we to for paying storage number of over invest is Second, adding near-term and recently segment $XX a emphasis commercial our Smart in storage continue of storage and off deals

Helix these our DG Equinox solutions while Third, as and solution user technology costs complete reduce new expertise innovation performance increasing leveraging next-generation of to Think platforms. that installed and develop product functionality. a

focused on with of Finally, half the XXXX. I technology discussed, cell production as very our of commercialization for initial we are solar slated the second already next-gen

This addition picture overall of the on clearer on complexity reporting. Financially, financial our remains generation to plan focus with business. these cash will investments, the the of health sheet. reduce to we balance deleveraging our investors and provide In performance operations a to the of our simplify

to volatility, are opportunity. operation focus potential turn the divest challenges to and for With the continuing. profitably tremendous plant continuing no growing financials. in power business business, the a share our Solutions In Chuck? call markets we to Downstream, to strategic that we conclusion, longer key SunPower that, DG like potentially identify growth I would focused to on core to structuring that and are and on around expand to solar policy on last aware, solar will power near-term despite are review our see globalizing industry Chuck this capitalize market. we and review access over the are our you our As quarter and those process to assets initiated is globe

Charles D. Boynton

and turn Tom, our slide to working good continuing our highlights We're and and over cash guidance. financial our the pleased discuss our I quarter. for Please first I forecast will certain call managing review Thanks, exceed the quarter prudently while results and Tom third for programs to will then restructuring capital. to turn afternoon. back then XX.

our as In the XX-megawatt was while project. segments. in build plants, a projects revenue above QX Switch we for benefiting project sale all solid including guidance power exceeded of delivery commercial well Gala continue of we early our X-megawatt of non-GAAP DG from the Our executed Toyota to as well plan as sale we our residential, while In in we Station our Chile. in Pelicano business, completed saw El performance as number projects

direct performance commercial our this the booked strength margin in expect a fourth non-GAAP benefited business from to power approximately We commercial, both in up Overall, sequentially. as we factories, is quarter our gross fully remain the challenging, was segment. our XX% continue in by in execution plant quarter. as pricing for stable power specifically solid strong plant and margins QX environment though and

the strong QX of to Chile. sale commercial margin Non-GAAP handful El projects. project margins of a sale higher improved in expect the Pelicano very larger our a of sequentially XX% we to However, due with

charges. XX% at In products Lease and deployed our $XX strong value. XX% QX million were billion, of was any $XX recorded tax more Non-GAAP the cumulative million megawatts million NCI and above again, North expect and loan plan from million million. of payments to includes which megawatts. We release were as of in Japan renewal quarter a globally, well. tax shipments, or XXX were and reserves a benefit positions. in were, with margins and ahead with than Overall, we our better line a residual continue of OpEx $XX megawatts in bookings our versus are America, pricing. cash with residential, increased lease We approximately excluding environment for residential cash $X.X $XX benefited a QX for bookings benefit stable $X leased. plan. Europe Net line of was restructuring sales we In seasonal while of uncertain one-time XX approximately as forecasts. XX margins contracted

million Finally, for and highlights CapEx to $XX would was to discuss the the quarter. XX. now below forecast. our quarter slide a like Please I turn for few

planned our against though a inventory than in Cash milestone came working project operational $XXX had executed capital million, we declined we declined as XX% As mentioned, better I quarter strong for well approximately at build prudently out able as restructuring sequentially. initiatives. approximately power we build as project projects during to project out by quarter. our continued sale, we're debt restructure Also, sequentially our to and and level the $XX reduce million due plant to managing

to significantly cash QX, complete with in decrease in expect increase project debt project plan we as We the along sale.

to for DG business. We our work various are financing continuing options on

As in for a with the Green This True Capital next $XXX megawatts structure projects to XX Tom commercial mentioned, we three will partnered fund fund. recently over financing up years Northeast. primarily million innovative of the

We working to Capital with financing be to are creative competitive offer Green pleased and customers structures. True our

million. $XX assets review recently strategic to monetized our and of a continuing are We related lease of monetization potential for non-core portion our process portfolio the

details and time. process XpointX Our is on additional strategic review the provide we will this not at of continuing

confident running process this take place. a are prudent will are maximize no we're that While to we assurances there transaction that value,

company we Finally, but convert. had In were we with provide for that, as prudently plan, QX non-core mentioned reduce guidance. asset and the our turn pleased to we restructuring leverage us executed will our also Tom for retire in make sale believe our call managed our not previously, summary, and the further and With to financings our we assets associated additional on back performance strategic term. cash only investments, I'll the as Tom? XXXX of long with positioned the resources,

Thomas H. Werner

our year now outlook. well quarter the Please guidance to like Chuck. XXXX fourth as turn fiscal Thanks, I our XX. discuss as slide would to for

XXX-megawatt deferrals includes loss impact XXXX as accounting to million, well is of accelerated as of of Fourth quarter the fourth quarter as $XXX $XXX XXXX a of Pelicano the company's includes charges margin initiatives. million of revenue project projects impact El the million the to as the GAAP gross guidance certain HoldCo follows: revenue timing the X.X% due $XX company's Our net guidance asset originally scheduled real the of to strategy, estate well quarter to QX. company's million. sale of X.X% completion and $XX XXXX and guidance Fourth to related as restructuring for

non-GAAP XX%, basis, in million, company XXX megawatts. million expects XXX to million gross of revenue to $XXX to $XX to $XXX megawatts of the the deployed $XXX and of margin of EBITDA On million XX% range

remains $X.XX $X.XX the The of GAAP X.X of $X.X deployed million and unchanged. $XXX XXXX, a gigawatts $X.X non-GAAP expenses the million. gigawatts. we million of For balance billion and basis, charges $XXX of to basis a million company's on $XX fiscal billion X.XX revenue year range Non-GAAP restructuring to guidance in to with on essentially XXXX expect billion of GAAP billion operational to to $XX

to for we the of expenditures and the year Now lower million in $XXX capital range $XXX million. expect

the proceeds exit divestiture end potential to excluding continues the in the to year company Additionally, flows of through positive year operating assets. from cash, approximately to any and million XXXX non-core $XXX expect generate the cash with fiscal of

the adjusted of to Finally, With over $XXX to to like that, million the year in call I $XXX questions. expect EBITDA turn be range for the would for million. we

Operator

Baird. First comes from question Tyler from Frank

open. line now Your is

Tyler Charles Frank

to you. next be as expect and a could where heading as well? with should terms question. you now? Hi. you end and guess, you've of discuss performance Thanks where for a you're how do be then, we you QX into year? taking where hit market the think nice then your of start, And bottom overall guys. in you follow-up, And cash year Thank discuss right to quarter, company the think the P-Series And can will ramp balance think XXXX? you in just at would that throughout at the I that And the

Charles D. Boynton

is Thanks, Tyler. the Chuck. on part the cash take side. first This I'll

be to So, higher. end target we $XXX would at guidance. of course, million could expect quite expecting the in the million prior be a and cash with consistent year approximately But our bit $XXX we're number our

Thomas H. Werner

see in – question, is that that a less sort seasonally particularly with your think in plant strong performance each those, to is directionally year, is is self-developed the say have we the year bottom, going, half in particularly hard where first the the of exception it Pelicano. and would projects a terms and question be of I numbers, for QX because are the the channels. as things the it I your cycle, baseline and exclude can If power El back use half nature than the year, we we Gala the In still where little of QX, of are of commercial residential

answer be, seasonality, would excluding think So, yes. the I

and on self-developed positioned and that we reduced focused SunPower we focused think I international residential from like really our the XXXX, commercial Solutions we're projects we markets we think power we're so on going or well because into that on, that. focus we benefit our profile in plant

P-Series, is of Mexico going terms In the ramp in really well.

the lines next Fab think four what I north our and of have, And volumes we it's year expect be X the We produced so hypothesis Philippines. to what we works. running we bought the of automation, in in

will it of XXXX. mix our part be So, meaningful a in

Tyler Charles Frank

Thank And sale just not to is you. the clarify, correct? that's million of including cash the Great. $XXX balance, (XX:XX), that ending

Charles D. Boynton

our would cash that be Yeah, ending correct. considered number. That's in not

Tyler Charles Frank

Thank Okay. you.

Operator

comes Our Brian Lee. next question from

Brian Lee

cancellations what in taking first the a down out Just was a for basis to have reconcile quarter bit bit to that guess, delays residential, fourth might of but the pieces trying there revenue how anticipating? here be. midpoint, you business? or moving might can power we it's guidance XXXX, off, plant XQ, a of the much than of non-GAAP Chuck, your softer, think been not pull-ins questions. I which Thanks in I is smidge dollar the at coming could And project the the we, Are out impact nitpick, quantify guys. the Hey, on here? came for just project overall then, a

Charles D. Boynton

Yeah. Thank you, Brian.

had first, in So we QX. a quarter great

a QX. We of wanted have been de-risk very we building projects and to couple large

exceptionally a be And of projects result, in finished as QX we that recognized until QX. Our performed well. we not might teams thought $XXX million about

is great this we year and for QX. projects focus have the we year So, And and down for a revenue, good we the the has revenue our the QX. the quarter that range tightened overall visibility in of news we our protected The bring balance can bit. now now acceleration did on

earnings we're our focused and and that we did but benefit the the roughly than Mexico top-line are before improved profitability line out As to P&L We brought an the push to that plan. economics revenue. down, so megawatts more revenue in with on and overall cash sheet. said been The improve balance a on and has has

Brian Lee

lot No, in you on bookings, I mix? And know us megawatts the strengths just you on XXX comments you. there. other we it is on appreciate give I deliveries France? great. a Okay, then, And that make margin the the about. of versus color. you're able there's for of in the follow-up talked the any then, some between my some color Can volumes geographic to should XXXX segments? color and those cadence France Thank on expect then also profile all XXXX, Is the solutions and

Thomas H. Werner

is This Tom. Sure.

grew It make quite Solutions the built. complete did capability And is the idea it all X solar quarter-on-quarter. sure between lay and plants sell on of we're is XX% plant X rapidly, page. their complete that to plus to benefiting and SunPower same we've almost design. And So, module. The we're tracker build a including gigawatts gigawatts And to the automated baseline. the power growing power

had the five stats mind years be its was this plant expected. global could markets few in that very going we we as looks power [and A more in in XX%. a performing interesting. it's of are the business built you'd XX% forward, that market, increasingly ago, and like So, like you be we business, When business

so, looks more XX%. like And SunPower Solutions

And think we're We're in Far strength South So see in positive XX that And traction America in seeing in increase. we East. countries I QX. actually. particular the will

expect So, we that a than next less to business of largely and international will third year. be the the global France volume be

the this to like business. businesses and allows we margins us least positive. line think so be remember, profile, the have can equipment margin scale to as low products we to ramp terms in moderate the gives But two accretive P-Series the you're will in that well. going In us of benefit OpEx, business, like business other at that bottom leverage And rooftop it it be expect of in or so on

Brian Lee

right. All on. guys. Thanks, I'll it pass

Thomas H. Werner

Thanks, Brian.

Operator

Our next Vishal comes question from Shah.

Vishal B. Shah

the mix power taking residential? (XX:XX)? for OpEx my (XX:XX) also, your rate, longer-term plant, look commercial Thank Thanks will you. Hi. And question. and what's Tom, like run how

Thomas H. Werner

little. and missed. it question up you I'm or But, just might reiterate to back feel Vishal, a breaking answer then of I have going parts Okay. free were that to your jump

didn't get First, broad businesses, some in totally terms just of mix because I'll in the it. make comments I

terms it of In primarily estimate to out going X being module Mexico. forward. be spud of think P equally being roughly would and fair And mix, I P

In terms a will and quite percentage grow to of XXXX represent the mix XXXX between the from will the business mix year. significantly next much of units, SunPower Solutions greater

and commercial see as in to we growing residential prepared XX% with growth to I'm sorry, my with commercial – said remarks. in XX%, However, I residential

and to million In terms further the businesses far the the think so I OpEx on OpEx there, commercial this continuing and and we'll about of of a $XX SunPower we that range virtue comments would simplifying we've of of $XXX By million Solutions business, some thinking our the in P&L, million reduce ceiling. and consider residential, by that year. we're OpEx $XXX focus reduced R&D,

if profitability see that's look those please? of on again, it missed OpEx. And year. back-end get the how just and As of I three we the at four the we try businesses business, the Also, point decrease investments, the we Vishal, something, the towards long-term cross-over of the benefit next focus in

Vishal B. Shah

helpful. Tom. is you, Thank This No.

more one Just follow-up.

help you're us the some forward. company think services about you understand should providing, As we be how of other going modeling the just

the other capacity, in how amount X services incremental generate that place? you of have from and offerings module revenue For much you all solutions can

Thomas H. Werner

and that later at back about take I question. the this and pass to a appreciate I talk might All more right. come I'll

on a in So, our ago I of in the seeing started place the year included as everyone of plus system services we're solar knows, a with differences that believe first for our install solar we've make bids storage. business to combination none a that meaningful will storage. virtually services, systems commercial And business,

have and of half projects as pipeline question more in of will to, beginning, storage. think our alludes because call. I'll just just million up $XX we we the storage. than to in XXXX, do commercial That get the In have your is I year, Next can the number for later

that'll I expect our business at a we It think And be margin, a that percentage revenue. be the capability harder as so expand good it's will of smallest profile. well. to to residential

in XXXX, the increasing estimating I'll a But later difference much so, bigger it and make going XXXX, dramatically of And contribution, very in again, year double digits. on and can calibrate throughout low that terms probably into revenue call. the

Vishal B. Shah

you. Thank

Operator

next comes Our question Sankar. from Krish

Your line open. now is

Chirag Odhav

stand on where ASPs Chirag some competitors? clarity Hi. give to bit Could for cost on spoke Section And Chinese P-Series channels your Krish. you in the about XXX little is you This case. for some separately a Odhav relative

exclude If P-Series there to U.S.? is into potential unable any yourselves tariffs, from you to shift manufacturing the some were

Thomas H. Werner

Tom. is This

our per P, commands a than less of premium but So, first a higher XX%. than Therefore, E-Series and commands panel and higher efficiency P-Series a P-Series of the majority the is anywhere premium on X XX% from cost. and think market. watts to premium, it

being steep still because of we're are it part ramp. on projected very the costs a Our on

that can on be higher. And costs we not and ask part steady about for I to Therefore, proportionally of more. expect equipment we want low mostly As reasonable reasonable more sales, our Again, think you the more margins. our it's P-Series. will of therefore, think talk be OpEx we business model will margins P-Series if state,

those In to resources here terms at which will XX. be a decision. important unless of the what devoting to sense. they'll January that think there on call own on There his a the options lot close it, And hearing Both days is he which is, a President, we're note I extends to of ITC make somewhere recommendation the public report, on XXX, the really is and X, thing process XX it the November inputs the makes is issue XX, President of interagency from there President. to now so formalized to look will December are

So changes going the to XX. supply from chain our we're any not to on until make significant President hear January we

options. We for will various be prepared

right, are CapEx not mean that P-Series gives does what ramp. faster flexibility, attributes. do, and that to us have necessarily But more lower it's that's those You we'll does but

Chirag Odhav

Great. you. Thank Okay.

Operator

next Rusch. Our Colin from comes question

Your line is now open.

Colin Rusch

the curious about and bookings pricing Thanks up so next the into what look shaping competitive year the XXXX out on we and of and guys product dynamics color is as you the the what I'm as for what are like But, into you guys thanks landscape that with you go next year. on through Equinox the traction look end year. the much, as for go to

Thomas H. Werner

right. All

I'll line share on, and good for moderately. see pricing to me to to overall stable specific in be that that Equinox in our because solution we're continue best question residential, a maybe news, market we have residential is your take question So, increasing we in that says which

as project had strength solution to really guide year Equinox I your to I'd our is residential I a XXXX, say going it's you if SunPower. for good American a we're the percent attach and not question, if be important to into which XXXX for North And, quite obviously so, could but project yet, prepared to in rate differentiator. QX. is significant and in moving high And QX alluded We're it's that's seeing

in of growth, will I it think will will back be that on the but overall half we'll year, some demand. the be comment seasonal. I

we're XXX, that a business. job also quite market. booked. essentially more what doing it's a that. depending manage in is Perhaps, SunPower teams with certainly great a in that similarly business. it's SunPower is it half line one we in a XXX growing that, to adding than Pricing already have and book, is what and business model but capability The business demand in over mature, stage it. We're commercial so growing in can commercial the year careful Solutions to committing Our to and SunPower. as we're more to of we going a of on happens without XXXX we line being forming there. than at lot want seeing And rapidly early let It's flexibility Solutions, in very so way its we with speak, we're

see we we but strong we're business selective SunPower what in being So, Solutions, about really book.

Colin Rusch

then, them you what monetize And And how well Can many your year? how from we with? to margins to of aggressive some into pretty the to you my terms declines supply you're in terms be around And managing supply. profile able next for going around just of are talk you're from battery follow-up seeing Great. are pricing? guys is suppliers as in terms cell you about go seeing of And in want working really the see what diversity leverage that We're can you your a pricing. and competitors costs? that of price margin from of dynamics

Thomas H. Werner

All right.

of terms suppliers, from predominantly two battery in So, buying we're sources.

like put in question it's as year addition states commercial five but I more of approximately. we've I the for We The that, we and look storage others, down think of not from storage it's accretive number, significantly terms or many exactly would America I as two economic. are would focused done with forward, as margins what And as this has many spot some a states so margins, few something say, and is on other But points is qualified. have opened our – come – where the up brought suppliers. is, your in to as that's pricing more that two four storage on,

charge storage very so in-demand much because that's battery the elimination evolve. Now, more and than do markets just allow will these in backup, to capabilities you flux,

So, core question, would to to expand. potentially But, and states they'll come more pipeline cost up expect your pricing SunPower capability down more we then storage opening a just to then be half we few and attached year, it. our and have storage of see cost this why that's or presumably dramatically have to

Colin Rusch

guys. much, very Thanks Great.

Thomas H. Werner

Okay. we're Thank to going you. question. one more And

Operator

question our Molchanov. And comes from last Pavel

open. Your now line is

Pavel S. Molchanov

Thanks, guys.

you're have that think but the enough do your case, your been you've me, from U.S. as not to that's manufacturing status an you fact of company arguments also domicile one FTA is regarding effect a in Just an U.S.-based regardless going obviously, Mexico, highlighting your whether country, trade in impactful? perhaps as the

Thomas H. Werner

that question least significant commissioners I was your bit. answer I'll the that, quota. interest. producers she The period that of answer in is, the cited out of most would carved one want four And SunPower So, of one of the then and that expand the little be cited Broadbent megawatts at to and of was a XXX

of traction yes, group we're to that. the I the is some answer about is interagency are agencies And the that So, there And there already. traction. think part is, some talking

communication anybody. moved, to more the SunPower Broadbent there's the what response but – tariff was fact traction where trying American countries. just on is the or subsidized tariffs to by doesn't therefore in communication so the to That in the written where have company. need countries other some make what chance. case, that is was by as and – at It's with not they've an is a to least accomplished. any the tariffs And those moved that, on some subsidized Chinese – were companies is making be hypothesis countries. Obviously, are acknowledged consistent sense. for be think put with and other It's discussion I is, as companies SunPower has tariffs are Broadbent putting agencies the is not well not the been this producing that, is cited to in saying I'm happen We

little making that up your will be than a whether so Now, not color difference to suggested. January a XX up or question President, ends more the on

Pavel S. Molchanov

right. Appreciate it. All

Thomas H. Werner

next made Great. everybody, the most our today. likely his will President decisions. after to which Thanks, look joining call, right. our has for forward be, call We All

speak So great we next. you. clarity we'll Thank have when

Operator

And that your concludes for today's conference. Thank you participation.

You may all now disconnect.

Bob Okunski	SunPower Corp.
Thomas H. Werner	SunPower Corp.
Charles D. Boynton	SunPower Corp.
Tyler Charles Frank	Robert W. Baird & Co., Inc. (Private Wealth Management)
Brian Lee	Goldman Sachs & Co. LLC
Vishal B. Shah	Deutsche Bank Securities, Inc.
Chirag Odhav	Bank of America Merrill Lynch
Colin Rusch	Oppenheimer & Co., Inc.
Pavel S. Molchanov	Raymond James & Associates, Inc.

Sunpower (SPWRQ) 2 Nov 172017 Q3 Earnings call transcript