SPWR - Earnings call transcript Q2 2019

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Operator

Good afternoon. Welcome to the SunPower Corporations Second Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]

to call like to now would turn over the Mr. I Relations Vice Corporation. President Okunski, at of Bob Investor SunPower Thank you, sir.

You may begin.

Robert Okunski

earnings Thank to you, call. XXXX welcome like conference everyone to Brenda. our second I would quarter

we the from back results our before XXXX review our CFO, will On will Werner, Tom today, start with for our and Tom Manu an by followed call financial review turning to off guidance. CEO; who the strategic operational Sial, quarter call second

and call will website. those a available a the XX-Q. slide described Safe we our these reminder, and of this for today's are Relations documents of are our As on uncertainties Reports Harbor press today statements. on affect information that Please of will that may Investor risks presentation, factors On Form regarding XXXX be forward-looking the to statements replay those later see in call, various subject that today's Quarterly make additional page forward-looking XX-K today's release, our

to note, some additional other enhance the have To of will as call supplemental same sheet data sheet website. transparency detailing we have have the the unit. set historical a a posted page that metrics. for business update during be reference inline provide our structure, which posted with well corporate as on Please PowerPoint more we each to In also slides, & our metric of Investor we Presentations our our location of Relations call, also Events this new we

the CEO I'd Tom SunPower. to Tom? Werner, turn that, to over like With call of

Thomas Werner

half second update we profitability the our will year. provide we On us. and strategic initiatives second value provide joining improved of an an for call, on you thank performance and overview drive shareholder the our of XXXX Bob, in will quarter and feel that Thanks, this

adjusted strong financial results targets our or Europe X. now EBITDA and strategic forecast. to key review quarter, in we business, exceeded of margin for driven fruit in and as revenue across met performance. by to all The global demand traction Volume, our DG came Please bearing plan, I'd Slide U.S., our like particular including our are our the Japan. ahead QX of turn the with transformation

SPT delivered expand to quarterly our we Our footprint. as shipments record business continued international

Given our the our performance strong half, half guidance the our visibility year. are and into adjusted first raising second significant for we EBITDA

Now in greater me detail. segment let our performance discuss

to First, of an Energy Slide overview DG services, North turn business. our SunPower American Please X.

from and executed strong, as commercial very residential improvement, financial the benefiting residential, well in A-Series launched a demand this showed stable environment. pricing sequential need. quarter our meet both solid and megawatt year-on-year are ramping remains businesses production our to in panels demand growth SPES strong we recently for and In

now mix our line with with is continue loan We our homes, leadership position over demand our on of for build to where and in forecast, loan remains particularly products. XX,XXX lease backlog homes. cash, The new industry balanced, in strong

not needs to In relation but also fund better significantly into pleased were we drive XXXX, close only innovative to new financing to vehicle our economics. our lease,

offering progress make second launch and year. product, Equinox on to continue on our to plan in we Finally, this storage of this remain half the

and position is and more see momentum $X year In XX% billion. the strong our our second We rose both exceeds of in sequentially. balance we volume our as maintained pipeline the direct C&I, businesses XX% #X half than as booked CVAR

quarter profitable business third the expect basis. to adjusted the on in We EBTIDA become an

attach approximately last XXX solution storage our rates Helix with now pipeline the average over and megawatts, XX Our months. XX% well, of selling is exceeds

also Whole to commissioned largest with We project recently our date, multi-site solar-plus-storage Foods.

key X a in SPES business this the is in shows discussed our development As area. our past, services we of progress focus. Slide have

for growth a services will reasons. that significant SPES, driver of profit believe long-term for become We several

beyond move solar to increasingly the enable participate energy First, broader market services marketplaces. customers and power in us to the our allows

stickiness increase services can offerings, margins. with systems, with solar bundling by differentiated we our together Second, expanded customer

Third, to value existing our we customer services can mine the our industry, sell in North and of performance enhance existing that systems. largest American base, DG the the

have Finally, services to our with opportunity own address only from to allow also not our to but designed the we platform work broader solar systems comprising us suppliers. systems, other

how a explaining storage-enabled you category. On the we right-hand services page, services are how solar services. services, addressing categories and of space spend into the the energy side - few see can minutes we main three market each organized I'll

as a existing we services, experience. to digital solar efficient on and drive as tools satisfying focused well using to are acquisition and asset customers more providing monitoring services In management, O&M customer

storage, focused and performance their customers our savings. system electricity consumption, enabling more on commercial providing maximizing manage to For we're cost material efficiently

leveraging with solution storage our storage residential. for experience are our We C&I Equinox

Finally, revenue opportunities. services to market customers our of allow emerging energy a in variety existing that participate and

our at mentioned programs. several capital markets already we As are active market energy day, we in

the England during market half XXXX, we into are projects New receiving ISO, example, the For the and year deployed last second payments. currently of in capacity

California, Edison In program transmission are local and out upgrades. distribution and that to into requirement of defer megawatts a storage allow XX will solar rolling actively we capacity about Southern California

take let's digital Slide to closer of at X. Now Please a our look initiatives. one turn

residential business. our XX their of over that With we years tools partnership have dealers, enable many with developed

represents a As residential applications. retrofit significant cost you know, acquisition of many customer for

homeowners seconds, own solar improving to continuously is that by this XX accuracy. developed key creates quickly application learning, allowing our machine on of customer novel on design algorithms it advantage times leveraging automatically online. turnaround their quickly software designs and efficiently and systems library create systems design team optimized Our using minutes existing design solar Design trained reduces digital over SunPower to and roofs. A XX to Studio from

the home's build optimizes Our impact can live, on while roof, energy Homeowners panels learning evaluating and configuration modify instantly subtracting and characterizes machine performance. or technology adding proprietary calculates systems savings. designs then the

quarter. currently platform and expect X We nationally it to this using out are in markets pilot roll this

the sales appointment of throughout this over the what have service application proliferation X past our growth residential see seen our to similar to We rapid years. of business, generation expect with we

this As and double dealer than the by the scheduled appointments page, generated pace the use digital to XXXX, margins. enhanced see sales of through right-hand on SunPower. customer more our more satisfaction and you side applications service stickiness XX% of we These with can in than on support increase of are

Now let's review our SunPower Please Technologies business. to Slide turn X.

executed utilization. team exceeding manufacturing our fab with well in and guidance quarter cost QX, meeting Our again yield for full and the targets shipment

joint our now volume Our in cost performance of plan. roadmaps is in Production next-generation our are Maxeon capacity going DGS goals and at technology X also Oregon P-Series is and X gigawatts our production. of factory reduction well, venture our with on technology hitting

in international a and and DG, volume above posted margins with performance Our particularly channels quarter sales strong by in SPT in strong traction coming record driven Japan. with Europe plan, ASPs

We our margin QX. higher mix in drive with toward continue segment approximately XX% DG DG to into of shipments the our

our are plant product in and our and channels fully high, we remains balance in space We remain allocation the plant introduced further for newly for power booked watt the expanded our the year. very in half second XXX of the on DG power QX, footprint Demand of XXXX. for in

Maxeon brief like Slide provide now X. a turn Please to I'd update X on our progress. to

in the market U.S. offers X panel the industry. are We residential volume very and and shipments cell seeing demand. Maxeon into the performance recently began strong highest

enabling to year. margins. product premium this to to cost, us expect This manufacture at technology of a significantly allows up materially We ship X lower expand to a megawatts us Maxeon XXX gross

nameplate Our our track. line. full line, capacity lines on first complete, total in both are will complete Max for production is second ramp XXX plan install X on When our reach megawatts. We're almost with our

that will Our partnership months. agreement X Max and in reach we we a final confident around discussions are the remain coming progressing,

have drivers. minutes Please highlighting strong like to turn would relevant value franchises We I created and to with Slide X a the spend few now SunPower, X.

left of highly margin focused through line SPT, the driving on with efficient on platform. our technology growth top NGT Starting P-Series ramp and expansion the CapEx we're and leveraging

differentiated very scale products market, channel improvement we strong drive position material and in growing we our margin in ability as DG volume. the confident rapidly to SPT's are Given

further A-Series storage fund We're the half our improvement American our with and closed deepening enhanced grow Equinox Residential, North our of panels digital partnerships decades-old year. business. in lease leasing our see ramping second For residential margin as dealer the we driving introducing tools, we recently

in share to market capitalize homes us gives strong new position a leading on. the Our

North is American continued share dealer model. Commercial, enabled independent and on direct focus driving our hybrid For growth by our

to leveraging expand our with only storage leadership expect position X.X our for and additional We by based services not also in customers, installed but revenue opportunity. gigawatt new

model each in to Overall, unit. well business we our are achieve target positioned

for Slide some call over to confidence to like financial the turning in XXXX our the provide year. comments the on the Please Manu would balance of XX. financials, to I achieving Before our forecasts turn for

half first see of plan. year on right, the you well can executed versus we the in our the As

forecast. lease which sell capital, further innovative Given the product expense Sachs our product the and, margin with significant include [uplift], DG half associated commercial remainder to gives Maxeon drivers and improve in high are remainder lines for implementation is projects booked Goldman our our new A-Series revenue second the cash adjusted of the international U.S. our of Renewable in markets working visibility ability and notice in management fund, economics and we associated to and XXXX power continued continued fully initiatives, both year. this market ramp EBITDA demand with business, of plant proceed, residential NGT us for Key margin for our Partners raising our the improving fund and the new our that ouperformance, SPT visibility XXXX of flow the project strong our residential P-Series for the finally,

therefore, between $XXX raising million are, our to $XXX EBITDA forecast and million. We XXXX adjusted be

well believe transformation. our of delivered and positioned meet in conclusion, XXXX our into performance we SunPower future. is evidence targets QX, half to we the the grow clear success profitably of is to second that strategic In

like Manu turn that, review to With financials. to the I call would Manu? the over to

Manavendra Sial

Tom. Thanks,

Now let turn to Please financials. me Slide XX. the review

as adjusted strong benefited as with DG financial pleased well revenue our key was results We we our EBITDA as commitment execution. we including our demand met Overall were forecast. overall non-GAAP strong above as from international our our commitments, our

as In SPES, revenue saw throughout both commercial and demand residential businesses our was the up quarter. improved sequentially

SPT, primarily For XXX international DG by shipped driven our we forecast, above megawatts business.

charges. margin margin margin driven and noncash by in Our In sequentially, mix forecast. impacted residential was improved while by business, gross consolidated non-GAAP SPES, of up commercial our gross Xx XX%, ahead our was was

stable. the and remain in quarter, commercial pricing both For residential

We expect improving second cost and strong the improve both and in commercial half year, margins given of backlog our structure. resi the to

that of volumes expected ramp gross costs our higher impact QX better Oregon we'll was continued of increased highlight results year. on strong SPT, than our in margin the business. to of I demand the be margin SPT The second half include costs applying operation. In DG forecast want also and EBITDA manufacturing and margin the

sequentially XX% our confident cost we down OpEx quarter, $XXX million. and digital productivity We're less benefited investments. from initiatives as will gains our be Non-GAAP OpEx million XXXX from $XX was for the reduction than increasingly that

million, X, CapEx with Malaysia. for ramp consistent NGT continued the the in and install second our at was line Fab of $XX our quarter

EBITDA initiative, was a our and from our Adjusted million. benefit we EBITDA as of of increased improving $X backlog, adjusted service ramp volumes quarterly NGT see on offerings. storage XXXX We basis and (inaudible) strong

like to to turn Please financial a now discuss I'd few highlights Slide quarter. the XX. for

we As our or later. with met balance continued on line for More We've financial sheet in previously exceeded commitments QX to this with our our manage the forecast. key mentioned, cash prudently quarter.

and notice financing to In better working economics. that in will the SPES, new our X significantly improve capital C&I program bond quarter we we've believe including management, resale proceed lease financing for lease closed our a agreements

ourselves expansion margin second in half. for the also We positioned

recently expect and roadmaps, DG initiative NGT our and higher visibility project volumes, expansion in to closed global technology come strong benefits storage the from finance further cost We our and on our including this from business. execution

second remain have in business half in segments. our confident as significant achieving We our both goals visibility we

components each value franchises, Finally, industry tailwinds. supported by and believe unit X we our with distinct

result, a of metrics sheet for we updated drivers transparency As investors. key quarterly reflect the greater have our each to the franchises value to provide that

Please value key in a note to that these metrics website. our few favorable drivers key provided as we sheet turn these Please like discussing drivers have our well information IR XX. on will the growth. that historical support posted spend on now our trends to as minutes I'd Slide

those look parts SunPower the need that on best feel discussion of value the sum our to view a my we businesses and our focus exemplify that of explain at basis. investors I'll on elements

our see First of and residential commercial; engine value our opportunity both and in upsell. components SPES. X We and service for development

For see per growth core resi watt megawatt and strong dealer of development, our by revenue enabled we continue network a business. to drivers as

this year. Equinox our more the second half roll out Storage will also become as product we important of in

We upsell. significant in monetize with see and also the value for our ongoing our relationship customer to ability services

customer well drivers greater growth for For than customer our and new additional to ability services base leverage as are storage XXX,XXX here margin. as our example, installed

demand and aspect In a any [attach storage increasing rates] remain C&I, project half strong high. With our sizes backlog. second with we continue megawatt to of see a more 'XX commercial becoming healthy important deal,

As our gigawatt more we and X.X footprint than installed have products expand mentioned base before, us services. billion our pipeline than more $X to significant new ability provides with and

a technology is manufacturing so the has our power margin In plant. in ASPs, higher business as visibility SPT bookings shipments, significantly business, DG, growth in margin combination we metrics. DG megawatt are driving key with are and volume expansion than

in out China are Finally, manufacturing like our $XX JV that to point I'd XX% our valuing ownership at million. we currently

cash would to for our Please to turn guidance, for and Before provide balance year. the the the of turning transparency Tom back Slide forecast call I some to like XX.

we major million see as $XXX as for first cash goal year XXXX for our than cash. as the with ending items and for moves in year we left-hand flow our where half the On of chart, the a more the of provide side a those detail bridge whole, well

second assets. million from business our Tom We of BUs strong unit our by and to and We our will XXXX, of in generation capital monetization generate development articulated project working of forecasting cash remaining around given initiatives. define cash activities impact EBITDA include $XXX earlier, as are financing cash our visibility that half

contract to including that out-of-market through materially legacy liabilities, down our In our XXXX. [poly] XXXX, we runs expect also pay

Finally, to solar-plus-storage. high initiatives and benefit NGT, in investing expect such digital ROI we from as

feel In remain on our plan and conclusion, for meet model ability XXXX our in we track to our very structure. confident long-term

turn back Tom? will for the our I Tom guidance. call that, to With

Thomas Werner

Thanks, Manu.

For the performance quarterly throughout balance XXXX, improve of we expect a the financial year. basis to on

Please discuss to our and XX. like for Slide would turn now third to XXXX. the fiscal quarter I guidance year

$XXX quarter of of and $XXX margin revenue The million. XXXX million $XX as million, On follows. company's third million XX% $XX X% to of is loss to guidance basis, GAAP a gross net to

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

capital basis, $X $X.X Slide company's on On on deployed a gigawatts to XX, be of as Revenue a megawatts XXXX to program, a million. billion in guidance follows. million less to Gigawatts than basis. the for GAAP billion approximately billion approximately and is $XX year expected of non-GAAP billion safe X.XX, fiscal excluding the XXX $X.X GAAP to X.XX is range of harbor and company's of and $X.X expenses non-GAAP non-GAAP expenditures operational $XXX

is be $XXX company million of EBITDA year $XXX fiscal to its adjusted the to range Finally, the XXXX raising million. in

for for second performance. on In initiatives we the executed QX profitable and the quarter half a summary, was company company positioned solid strong our and as strategic a

With turn I over that, questions. like would for the to call

Operator

Lee Goldman line first of question from Sachs. Our of Brian the Instructions] [Operator comes

Your line is open.

Brian Lee

gross guidance taking I Pretty maybe you straight questions. see second for had Thanks the encouraging for beat first Hey, quarter to on margins. two, here. guys. the the

you. to kudos So

weaker, better then But was the a SPT surprised to I components. seemed bit higher. see commercial and was Resi

of So walk can moving buckets, the component and through each you think then across about should the into that, pieces how XQ? X we some

to targets potential upside tracking starting are around generally there's or upside set those the like Analysts you're if in of you longer if and in speaking, relevant you're potential some it commercial the SPT, at still in then more but And see thoughts buckets? Any ahead Day, of maybe seems plan out resi. those term

Thomas Werner

take I'll then Brian. can there. Manu question, from this is your and for if Tom. start, And Thanks

way showed QX, I the trending is that And second question the the about You're be year pretty in Day, Commercial because we Volumes will want. model. margins relevant. Analyst gross higher. the were the we appreciate of at think highly in right, to models good I that's substantially half close

come as on have we in with So margins it's business, because commercial for volume. really good now to model, closer the that news capitalize

from is business DG focusing on the of course, benefiting SPT A-Series and, the product.

both going to expect of to fruit bear continue we so forward. And things those

in something is think confident I trend, we're forward. SPT going the So

explain can I'll resi. let does Manu he that have accounting it explain. some in Residential

about What to quite terms need overall about trend, and to the I say is model just quite of still we residential the we're we get confident in explain QX. model. would towards confident But trend we're that

I'll want the at just confidence to end with yes, others. you a would maybe Day. some Analyst the last Is, to we about our to raise model had my and getting there I you can for the any were that slides we higher model comments guidance the that those website if model. of still believe of we're find And sooner our say we prepared gave, is Day But I on wouldn't suggesting I say in than look Analyst on businesses we businesses. little when get

residential, of terms Manu? In

Manavendra Sial

Thanks, Tom.

So year. like the Tom throughout improving said, our residential margins are

Here's second the about way to think quarter.

Xx a at that, And had dealers that us noncash have some that forgiveness prior of to a a from was quarter quarter. for compared prior margin to would Second charge-backs non-realizing years. gross effectively charge higher put

with second the have little reclass margin gross trends as would positive So a enhanced bit well that are gross OpEx [ph] and quarter. for margin the between

trends residential and continue the the So positive to through as Tom are year. expect quarter-on-quarter said, in

Brian Lee

here range been million to helpful. it then I'll here That's second kind well. pretty on, the consistent then question, enough. the as Fair revenues, $XXX for of inferring what And also Okay. the year, XQ pass in you've throughout on million $XXX you're

outlook based providing XQ to real first on year seems QX, in step-up the guidance. be in So the the you're full

if megawatts, XXX run which if the at guidance, like be lower a than little is wrong. I seems actually it megawatt a seems it will me look correct recent higher; about not But anything, rate. bit actually If QX I'm

revenue what be that on rate the better out to kind all us, QX this So of volumes? Is seems parse for run higher necessarily can you not mix-related?

into give And guys. drivers can two growth, then of I some line growth, capacity the and us incremental on additions? XXXX, volume case, around if top sense guess we head on Thanks, and the that's mix you inorganically line organically as top potential

Manavendra Sial

were lots address questions one, of Great. There rolled I'll into so piece-by-piece.

SPES From in half [ph] and the good, us commercial bookings, confidence gives and or drives mix. year. That which a revenue. back the revenue very at the Both half well businesses SunPower back the with residential also in back a is year of backlog megawatts commercial higher back the doing revenue the of over Both higher the increasing residential half the coming number. extremely of year, half bookings are and higher in in revenue perspective, stronger

Those revenue laid we numbers for and SPES businesses. line in Day the Analyst grow in out with that expect at we'll model residential both the to commercial

was So a revenue that from perspective.

part one of you that the in have is harbor. perspective, safe is guidance. not our megawatt our back includes the for of year, megawatt That a From megawatts XXX factor of the to megawatts deployed megawatt guidance, about half things

megawatts add have third that, in quarter quarter. So fourth of you to XXX X/X and in that X/X to of that

Thomas Werner

really places into rest think catalyst are terms deployed like of do again America. of megawatts then, the and Europe, the quite growth? next we of in well. year have Asia we Southeast and think that safe the doing an well. goes XXXX America, that will ITC And And We baseline parts plus next of So Korea, other there's in harbor, Latin we growth how strong, have Brian, do revenue you markets of And Analysts on our course, of beyond, guided our Day. catalyst as world year are

per commercial. that's we increase attach that know few expect and years I think to lesser super case residential the as as services next to meaningfully extent. for and important the to revenue over well a And increasingly storage it's watt we

well. course a not on years will of we out done. our A-Series big a we're successor SPT, product more in is assume that'll In DG. be focus A-Series, working as team help on well; the ramp as revenue A-Series, driver as And SPT

term I growth. So of think would that's revenue longer how

Brian Lee

the Appreciate guys. Thanks, Okay. color.

Thomas Werner

Thanks, Brian.

Manavendra Sial

Brian. Thanks,

Operator

Weinstein Thank Michael you. comes Credit line And our of the next question from Suisse. of

Your open. line is

Maheep Mandloi

on on beyond up is adding you where behalf This on manufacturing the lines? just third first will touch I Weinstein. Mandloi follow. And and two Michael roadmap Could NGT line Maheep and Hi. the then we of are

Thomas Werner

Sure.

think we line really So of NGT pairs. comes in

or two it's installed equipment could a implemented pair, so a soon. that that you is we've But being operational So and it line for half second call lines. pair. second will The line line be

run we nameplate pretty And be the of QX. megawatts expect XXX so to close in to rate

line the happen next on funding towards to In after quarter, the line, depending the of during we would to agreement. right that expect would terms the a how we fourth of count, be fourth now signed make you commitment commitment planned That quarter. end the for probably

aggressively And then lines have in so that's And we the us post-funding, now. converting plan X. course, subsequently and that more of of more we ramp year to front next Maxeon

Maheep Mandloi

specifically typically you And like recently JV well? was do just the for government? exemption then, bifacial that and in the it. your And NGT granted touch by see as Got could for Thanks. you which on technology how China

Thomas Werner

Yes.

shipped is with new XXXX us. Energy. We product NextEra to not bifacial Desoto So to the bifacial in project

extremely bifacial know we So well.

The bifacial product. P-Series than actually IBC a ratio does product has coefficient or better our

So China particularly for into We out the don't actually in product P-Series that joint ship well-suited of America. bifacial. venture is

XXX an us, So exclusion exclusion. course, the of we the from have IBC is not technology because, there motivation for

in AD P-Series that likely, things evolving CVD power surface applications, module bifacial the In would do we have and in work. most for but for would won't DG; modules be plant. the see position. between sense important the to makes with to only make change the it it's math doesn't tariffs really bifacial that, adequate in just that of don't mean note bifacial, sense we economically. rest reflective you be space but It doesn't And XXX DG the There be would world may it and if it are So markets. the current

Maheep Mandloi

in just queue. get I'll That's one then helpful. and the And back last question,

anything briefly Thanks. economics? Just the know will Manu improving could more if share, on you that it. upon about you lease to have there you? I talk residential just And touched But

Thomas Werner

Yes.

X Taffe to BAML. many second. I as say So a question of you funds of you business; to them. runs few lease words. that. of the I'm in know we've answer residential we've improve just -- let lot think Norm with course, raised And here funds. We've that done going Norm work a with going done Well, you prior fund a I'm each

with so to of actual now? And to [forced closely and you the his work improve and implementation the fund. say BAML Norm team words lease] Manu's few team Do want a

Norman Taffe

Yes. The Thanks, thing add are cost was actually very Yes. I'd partners key take there in achieve allowed more and with Tom. us to our really those objective, only both we to to our of us BAML, leases. good money capital terms ourselves back allowing of on lowering

Also, it us real-time fund supported well that lease our SunStrong to allows very in deconsolidate partnership leases. this actually

then cash So and at front. be lease get getting cash That's upfront the SunStrong, and time. whole longer in very supportive with trends more partner, the our participate on our term our innovative quite about up same and economics we the transparent the focus economics unique we and with of for

Operator

next of And line from question the Dumoulin-Smith Thank Bank our Julien you. America. of comes of

is line Your open.

Julien Dumoulin-Smith

in follow-up Congratulations. real Maybe half move a got I back the here just for? to afternoon. Good your be year a that's item I [Technical accounted Difficulty] on. And then quickly. in and of where guidance before quick embedded the housekeeping

Thomas Werner

your there we lost Julien, connection briefly.

. something back you embedded something Can in half being You said about . . guidance. the

Julien Dumoulin-Smith

'XX here? Enphase reflected The that. shares, for what balance is that of where guidance? there And are in Apologies you your just Sorry. the assuming about

Manavendra Sial

Enphase perspective, own of assuming Enphase are stock. about we that we'll XX% a from So the

Thomas Werner

We'll from our this forecast Enphase our the nothing be got day we've the P&L forward nor XX% So for cash an in year. owner at of on end XXXX.

Julien Dumoulin-Smith

it. Got

of best But I the there's can a bit and specific a Excellent. I the forward? you items ask. And then being flavor in least the suppose half think that improvement to back the of of I frame of about mean, as cash the that year more give perhaps at at to you turn that's probably Okay. back about. you question at specific, talking a overly just if I can suppose, at the some little lot risk sustainability level you're large questions, a to of high moving could and way of here. the how

Thomas Werner

we back year a of So cash? of half summary cash what the how Julien, drivers are the you in do want the for think of and

Julien Dumoulin-Smith

Yes. business of being, do right? So But eye into cash the CapEx changes? you well unit going how about towards corporate the the and viewpoint think as an with what sustainability as 'XX,

Manavendra Sial

about the are cash, a back elements of think strong generating you of in the half units on the and back The of X the capital performance business cash, of model. better so backs pieces. big as should That year working cash the EBITDA So half liabilities in the primarily reducing should you and is second beyond. NGT. beyond. And going XXXX That The will most investments, continue ROI then XXXX legacy high to invested start XXXX of piece. and it as about think from CapEx in the be to going

Thomas Werner

a it's benefiting the markets. from quite their strong strong DG product, in cash markets a burn jump the gotten pretty of is just think, gaining part by of share was a significant those that new That significant from our on, years business and previous had business in transformation. Julien, better would our A-Series upstream I bit too, well, from I the part performing way,

SPT in quite invest our that there's continue product. So NGT turnaround would we been a in as expect we to

Julien Dumoulin-Smith

The expectation preferred least bidder you structure, understand there contribute initially it best today? at the just how what's here, on would as that

Thomas Werner

say to preferred NGT you referring there, you When funding? are

Julien Dumoulin-Smith

Yes.

look like bidder, structure the that who if would it cetera. specific is, what under et to And preferred Sorry. not

Thomas Werner

conveying think be invested would to a I broadly look that And look is which I in in way Yes. the it's [broadening] would I is I'm final, like. that course, say months. as an Yes. significant you we're (inaudible) to I can mention, would agreement upstream exclusively in number what of What that exactly is It like. low definitives, convey of here We're until structured can't would timing, comfortable measure funding. Well, business. with to what

Operator

from comes of the line Oppenheimer. question next Colin our Rusch of And

open. line Your is

Colin Rusch

And as storage preparedness to energy about that guys chain's a you you can support talk terms the So growth? help look at the then you think bit services how do there, in little opportunity supply and the you terms responding we've ahead not in of some seen the about pricing getting far energy in been terms Mid-Atlantic of of these services ourselves. the too terms Certainly, of what of storage? a lesson fast And of dynamics? in has

So perspective you just want get that from on some to guys.

Thomas Werner

Okay.

of the . part you can . . repeat Colin, part question? So second the The first

Colin Rusch

is part pricing second open energy The growth on first chain's about bidding. market And support to there. is part in supply the your preparedness the storage

Thomas Werner

Thank you.

Okay.

comments. say who may and words, few business, Nam Nguyen, I'll commercial the So a few add a runs

be in So in in a It would say we've alignment. in commercial chain, the fair is year diversified business, and and production the aggressive we've always year, terms now are in modulating that supply. they terms of been demand generally supply And market storage supply of There's greater half. for sources. news speaking, been the supply. how suppliers demand is, are their over a isn't also good In that than to

been done in how to Equinox for we've able there diversify is we fine. residential. We've that commercial, The storage work we're supply and benefiting approached

for that year. the when we going we sourcing product this release battery, to fine back is half And us for in be think of

Then on services. I'll comment

response, pricing revenue sure generation when old for is us, you For more you the capacity the than fast than as monetize much indicated. grid services the or the for market customer, services, management

more significant So is way demand on charge our elimination has which focus economics.

comments, but significantly it. it approximately that In this as in not or speak We capacity grid a time I ago. bid though, more our We're won year bidding into mentioned It England ISO us services, prepared gave terms a large, experience. New frame. of year in was a we're

affect takes or to we really going see Do I'm materially P&L, doesn't in really you to to Doesn't move you're years couple So before broad to answer. really give -- X materially model needle X as our anything, that start It years. the a you going P&L a add Nam? it. our that want

Nam Nguyen

Yes.

Just to comment, to around Tom, add another supply comment situation. the your

While there actually pretty our we feel is battery on supply with comfortable constraint the side, position.

is numbers strong very that critical. think for partners our a to and our number able And well to We I pipeline very, and as the The as deployment. it count of speaks deployment strength pipeline us certainty of on have being of suppliers. deployment our

we've date, energy those and And the are to demand as for New New of Jersey. deployed well seen York, of side, markets, On that the Massachusetts to types California charge economics [arbitrage]. a as coast key mostly east as around us markets the applications storage savings work we've well including few services as

markets those right for C&I storage. are the big So now

Colin Rusch

Enphase And helpful. following on just around the That's Great. Julien's question up then position.

So today cash business? $XXX the of at it's when operating logic discussions through so just many we're exiting us you about the of market that value. position walk to around about on million hanging having the Can

Thomas Werner

million X to Well, filed million. of form there's shares shows sold have a we actually out that X.X prior today

there's would So that's position. we to in previous that contractual how the and, monetize got that affect XX%. thus, investment, the of reasons XX%, of that way question And on answer originally the we terms

Also, I XX% effective. frankly, really it's and we the partnership. quite gives And think have a some Enphase, what partnership holding think with impression of the good you we of

a the partnership. and combination contract So the it's of

Operator

our And next comes Pavel Raymond James. of from Molchanov question of line the

Pavel Molchanov

was Is a there that statement the entirety you June flow to acquire Oregon the of facility? cash for $X In SolarWorld. payment to paid the quarter, million what the

Thomas Werner

is payment this We the fall, answer's then back that. and The in upfront of part an no. had

think remember it I but that payment, I don't mid-XX. exactly, upfront was

Manavendra Sial

That's right, Tom.

Pavel Molchanov

in bills extension. I'm also get if prospect the the the of I curious industry election. XXXX it. the doesn't Can and for expecting a Obviously, before, would let's you're pre-buying XXXX introduced believe in both the ITC of thing Senate say settled ask suggest really to House Some this extension? Okay. advance X-year about

Thomas Werner

ITC, Tax rounds case, several opinion in believe And was would last my process happen was very So was it. X-year one, And it our that late be the extension. would is was I of the the, agreement I what in as remember course, estimate on that on, and it of Bill, I based a would here was Extenders that late the well. and reached the that part as with

if my were So November gain that we given that economic would safe know. no would extended that in does December, or much when point. in at with safe harbor, the That extra how material it December course, because, opinion, of more experience, be we affect we have we'll harbor,

preplanning for are that. we So

one is the think adjust course, of we vertically I of of rapidly. that's being can benefits, integrated,

I happen that past in I optimistic. worked two And think way wouldn't going on renewables. climate to reason voting that's extend in not We the people is change, is a that. early this believe potential believe for the positioning just we're those it's for and that So the -- most bills, is this for signs think to whole this in bipartisan

So it went the to as how from of and X% at the it. develops. That's we think year see the beginning maybe XX% of we'll year now,

Pavel Molchanov

it. Appreciate Okay.

Thomas Werner

appreciate all call today. take we're you. next our questions everybody's look and We That's really forward earnings to with Pavel. going time, we the to Thanks, Great.

Operator

you ladies you program. and the day.+ disconnect. everyone in a your have does conference. conclude thank participation great gentlemen, this now may today's for

Sunpower (SPWRQ) 1 Aug 192019 Q2 Earnings call transcript