SPWR - Earnings call transcript Q2 2020

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Operator

Good afternoon. Welcome to SunPower Corporation's Second Quarter 2020 Earnings Conference Call. [Operator Instructions]. I would now like to turn the call over to Mr. Bob Okunski, Vice President of Investor Relations at SunPower Corporation. sir. you, Thank

begin. You may

Bob Okunski

Shannon. our I welcome you, like would Quarter XXXX to Second everyone Earnings Thank to Conference Call.

our today, Werner, who of On overview business, followed update call we'll Waters, with SPES out the CEO will before who second for Jeff quarter our a on from Maxeon, international turning our and Tom also to review call guidance. discuss SPT over business. CEO Manu financial will results SunPower, by then our of will provide Sial, the an back our CFO, XXXX start strategic Tom

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

During release, metrics. additional on have the also same a Form various additional factors PowerPoint slide sheet and safe have today's deck. location, are harbor information reports Relations make we uncertainties our that call, our the posted during supplemental today's website. those some reference also affect our quarterly in Events this statements subject a To slides, risks note, these the page on of data Today's appendix detailing presentation. the Please of documents we XXXX posted our will the call, of to our call those and of Investor in which for number enhance Presentations regarding historical a data XX-K forward-looking may we In statements. set slides of press we provided other presentation we have of that will XX-Q. forward-looking and are see Please that described

Day and as will be over to SunPower hosting provide like details would call CEO SunPower. closer our the Werner, like on the we turn XXXX With to get that of I timing event. Finally, that, to Markets we Tom Capital on highlight Tom? XX, September I'd will to

Thomas Werner

update us. second you competitive on Thanks, performance and for Bob, we half the brief our second the of joining beyond. a quarter provide position of an in and On overview call, thank our this and year will strong

with the financial generating our executed we start million key COVID turn second of recap all of our while to quarter in in quarter cash. despite X. We second a guidance Please metrics performance. Let's disruption as well our exceeded $XX in the Slide

Our outperform U.S. contributed business continued strong new to businesses. residential outperform in channels retrofit to our with -- homes demand and

also business the plan, C&I quarter. positive exceeded for Our EBITDA posting

and quarter, employees While transitioning performance SPT's impacted our saw demand of QX and business. exceeded our by a I'm proud shutdowns, employees' new trends. making stayed guidance sure our customers safe factory doing the way during was execution we very to of while shipment improving diligent effectively

continued solutions, the to in we're in a growth second number pleased and new drive margin invest and industry-leading expansion. of quarter our products will launch that to We

including financing all $XXX capital term bond recently also closed million Maxeon our we loan have in transaction, working and offering green Finally, a and for requirements $XXX facilities. million

result, August Maxeon effective August is the XX. a of reflects date of record a As distribution expected XX-F with and shares Maxeon's XX, on now

will which few I'd our X. spin. turn Slide strong SunPower Please Now minutes to spend SPES, in known be to highlighting a like as performance post

capital demand Our benefited half model. our second of and of from the initiatives, channels strong beginning quarter, business delivered primarily in transition to end for margin these and with residential an saw benefiting driven revenue online from a trends online retrofit as successful sales gross We grew transition lower the successful cost by first doubled half very and of both the lease April, a year-over-year, increase continuing we We quarter. installation sales activity loan. through cost-reduction and to

$X $XX million, adjusted business channels million As in a EBITDA our posted of cash. generating while result,

more homes, adding performed New and XX% than megawatts share. XX,XXX than market more leadership or backlog with of well, XXX industry our to also maintained homes our

Our new value later, which market. this I differentiation customer OneRoof highlight provides additional in product, and will

We are with providing financing focused of Bank commercial to solutions on which to is West, the dealer announce partnership business. our pleased our fast-growing

designed, homeowners freedom is more daily X-box engineered hours July, electric access our that confident the capability company. year. next blackouts expensive SunPower clean is with cycles and a residential is products, continue and field second SunVault's evolve for product commercial storage giving It in quarter, our performance we With the for have launched confident SunVault, meet Please to utility backup called SunVault and residential the and finance warranted Equinox equity, system energy growth. fully services. footprint of only We that to capacity platform, greater solution very We these been a we and new solar, are scalable, the competition, With rates. the model warranty. outages will are in financing installed peak during innovation solution needs have discharge reduce residential project major addition our to market. future peak consumption. be solutions integrated next our XXX,XXX tax single and invest a turn business over the dozens OneRoof and Slide we aggressively cornerstones has X. X is we believe from our an in to sufficient Equinox operating the SunVault by superior our electricity always SunVault new into capabilities. both modular our leader important of to homes a double In solution and and of homeowners storage in to

have in target demand and rates We attach started high our very XX%. XXXX California, installations ramp above and already is to of are

dealer roll impact solution we to SunVault nationwide as our positive our network. on expect through this out have business residential We a

the Now market. to new homes let our product turn me OneRoof for

reduces solar roofing the cost-efficient solar product, new California and clips, product meet Homes, a roof interlocking homes easier We XX% collaboration results over to integrated ideal years, our roof, Slide market and new X work Commercial share. with installations homes cost provide product strong weeks In roof QX, half more it turn features so traditional more with past the XX the of first project have ability for and an position OneRoof the in which watertight date. X cost milestones. across And we in faster, offers positive. Feedback update and especially solar year, the for where second XX,XXX positive in we This new has plan with already the directly communities efficient, on installed in the [indiscernible] Please a last XX,XXX be homes, of following Commercial panels with a #X backlog We as restructured Direct Performance than have than I'll driven to the number with market, been mandate. an and developed we XX improved launch. execution posted is achieved deck, in the reductions. business to for Direct of quarter, our X, the by than enable ahead important solution, very primarily EBITDA trays platform business. to customers homebuilders of builders. are install was creating our durable KB pleased to far booked and on builders

last of increased our forecasted our quarters. year awarded under significantly by year-to-date Our has megawatts the and X to with the XXXX now has contract. our We business billion XXX than over past pipeline opportunity more and over added approximately origination than XXX% backlog $X risen more volume have

with than gross in Helix rates track positive exiting flow remain approaching and attach on of achieving achieve to are the our high, target sustained model XX% margin, cash XXXX product Demand greater remains by second of the half storage our XXXX. profitability for We the year. confident and of XX% end for

market combined than significant feel In downstream later to turn transaction Maxeon both why in and X. the to the manufacturing California Maxeon after and to with for its positioned companies greater closing, footprint. investment rapidly sufficient the secured incentive storage straightforward. The In briefly debt addition, provides this recent of is Please the share will bank spin-off be rationale we we expand financing, close transaction. XX% want this Slide in I with TZS capital international with recent Maxeon, The of highlight month, well program.

as leading second this on significantly that, to CEO like Jeff over the turn With would of successfully pure-play call future company now the Maxeon. Additionally, and America, model Jeff? of capital, repositioned SunPower improve starting year. who the North to transaction this to DG I SPT can invested a leverage asset-light half their Waters, in of in return CEO

Jeffrey Waters

Tom. Thanks,

in Let of thank with quick me SunPower the Slide Please like was team start environment their during quarter. unprecedented what first to turn an navigating for review a Technologies would quarter X. efforts the SPT performance. second operating to I

be guidance across legacy I'm of side pandemic of employees ahead results midpoint As globe, in financial both of proud swept delivered able the react breakeven they the to while business. on that the adaptability real-time exceed EBITDA to the team's for and We forced fact were very our liabilities. paying supply demand the and to disruptions to on the of and CapEx the of and cash perseverance expectations. were and COVID

rose of cash On events complex the Such challenge flow incidents. the the supply But involving did teams shutdown global delivering safety are volume, the to factor projects no largest our was in eventual reopening far, X manufacturing metrics people. of by all business, and with thousands and quarter the in the factories. side our cost and on of so of highly

step through volume of testament resilience recent sales we ahead our to be to capitalize to DG and ahead power the update the revenue a global I or and our growth to We both the partner demand plant our guidance the large-scale Australian of our to to X, cost This were management as a investors our of QX progress as announcement despite side DG in a impact turn Of with markets. delivered channel. side in Slide on Enphase Maxeon's of And these we businesses higher is the will strategy delivered closures a to AC share over We're ASPs. our of partnership want were able our the On our and and of recovery short these launching to well to give of of very note, equation, strength panel in as demand result. achieved midpoint on excited European to sales partially of factory EBITDA in remind and as mitigate underlying shipments teams months our business. new several the volume and deliver beyond where coming COVID. and faster-than-expected modules. record relating installation of EBITDA DG customer value solid products the able in Please concrete careful global core base. first plan. segments on I

range automated venture factories to X-gigawatt our new watts. the latest and ramping shingled of explained designed the being is we format area products one of bi-facial report with these XXX pleased call of X which GXX already first factories, in the power the to Maxeon latest is Markets slide highly cell the right packaged produce shipment. produce during of panels factories this I'm ratings As very our The to on we in wafer event, photo large operation. SmartFabs, around a HSPV first Capital for up panels. the process These XXX-watt robotically the of of are shows that of joint generation to

exceeding over The manufacturing Yixing months. the already in is and of SmartFab the distribution the yield and objectives, first ramp to few power production HSPV output lines balance expects next line the

our DG can we progress our into channels. large-scale new manufacturing more PX would the as of SunPower. Manu JV output facility, that, like to panels, if customer a HSPV's projects our bi-facial to as With officially well interest of seeing we this these over and we turn Sial, needed, output of reminder, recently significant are with new Consistent the As solar already products. selling new through CFO of I and purchase line launched in call X/X

Manavendra Sial

to now I'd financial results turn the Jeff. for to quarter. like Thanks, the XX. Please discuss Slide

with pleased performance the as revenue, and financial quarter COVID generated our guidance the EBITDA cash for we margin second environment. exceeded are We in our and

channels business, saw as Moving X,XXX segments. both on solid recovery to the we by our primarily outperformance revenue in where was quarter. guidance the SPES, we driven exceeded In added quarter. a customers for our residential specifics Non-GAAP of the

executed direct commitments project business on well C&I of our megawatts Our recognized and exceeded the its guidance. midpoint

lease million above our gross for Consolidated improvements on forecasts. DG SPT, we cost-reduction the cost posted OpEx gross year-over-year $XX was second business, our Non-GAAP For margin sustainable were driven focus by and sequentially initiatives. the from shipments with a quarter. megawatts as and in margin non-GAAP gross almost in was the was in execution SPES, our economics. a U.S. In project channels residential C&I which guidance improvement line result of European quarter profitable by and XX% quicker-than-anticipated totaled our SPT, as team quarter, in XX%. margin improvements direct business. down Overall, and In doubled our in loan benefited XXX

will seeing X. double-digit XXXX prior $X a home business $X from negative benefit decrease CapEx in Maxeon. was and would Maxeon from XXXX, OpEx in simplification versus of expect Asia installs discuss channels financial Adjusted million residential was trends ahead with quarter booking and I like that quarter in continue highlights In year. investments improving our XXXX set We in in X and business, guidance. for additional for quarter to quarter. EBITDA some new we Fab are and first the now line versus rental second move our and our to in increases digital, at rose we with in million, ramp consistent to the

channel's to EBITDA as XXXX we of generating improvements expect approach XX% with and confident our gross exit beyond C&I of we the second project business, we sustainable positive margins. that margin direct continued In are Additionally, half XXXX. in in

bookings XXXX forecast strong in Our of our with backlog. currently remained balance the

enabled on recovery factories For all fully exceed online that the global guidance SPT, capitalize of the we our us in quarter shipment DG exited and to with our market.

to in focused on channels breakeven. generated Maxeon forward, of cash cash the In partnership remains driven by quarter, Enphase. In post-spin Looking evidenced the in as announcement approximately footprint was strong relation performance. their expanding million with $XX we sheet, SPT, second balance DG by

TZS XX million post-spin and from confident next are liquidity fully We well-capitalized over a ability post-spin to address Maxeon balance $XXX for investment convert. the in million the $XXX SunPower million XXXX from SunPower's in completed our recently and will in with months have sheet, have identified financing. $XXX approximately equity

Finally, million of approximately SunPower retained customer future and SunStrong. approximately we downstream streams had X in $XXX in value of continue service value beyond million second create we business net day At our that $XXX revenue the end to build quarter, future to contact. attributable annuity in

million. I For are quarter, back With $XXX new value SunStrong will net Thomas positioned Tom believe to Werner third In a given sheet. to we Thanks, Manu. business capital-efficient that, expect products balance summary, guidance. call the turn strong to in Tom? models, Maxeon and and we retained well for be our up SunPower the

GAAP is basis; and now $XX million Company's X% million basis $XXX to EBITDA $XX as XX. revenue Moving Company's million. third on X%; third to combined its quarter XXXX the XXXX for a net a guidance to and an million to turn approximate of the $XXX non-GAAP quarter margin, in GAAP quarter. poly loss and guidance. contract $XXX Slide Please segment follows: million as SPT margin adjusted of to guidance gross third on a out-of-market includes gross impact on result of

the $XX the spin-off SPT into SPES the the to of X% million. range Megawatts obligation in expect a of cash the million, expected range Upon to XX, million the by poly will of non-GAAP also third negative range the in $XX and be XXX positive expects out-of-market As and million, will for the margin Maxeon to gross on we of recognized in $X result, million to in third XXX SunPower and million August $XX quarter. million, Maxeon XXXX. in range $XX adjusted with negative EBITDA be to positive retained of generation $XX completion million a basis, company of quarter negative X%, negative

and solar the Maxeon companies performance through the Technologies, global company's the a demand spin-off improvement end expect financial after, of For both expected year. quarter and fourth the continued of our environment in Solar

questions. will a quarter for we over provide highlight on will closer timing I'd get successful and we Day solid on for on improving call we our With Maxeon would September be initiatives, Capital for event. laid that as was the and hosting XXXX of I executed details positioning foundation the to QX to strategic the company to XX, our summary, Markets Finally, In like as the SunPower for turn spin-off like the company profitability. that, a

Operator

[Operator Instructions].

from question Suisse. Crédit Michael Weinstein first Our comes with

Michael Weinstein

of million start makes prior [indiscernible] from and that comparable to Just $XX have guidance, confirm to -- not does legacy you -- the inclusion would to have this polysilicon impact liability, that off, I guidance just back go the the that to correct? can

Thomas Werner

correct. That's

Michael Weinstein

of assuming or Okay. visible a more I'm little -- because transparent to that you're Maxeon doing make that...

Thomas Werner

Okay. quick? Manu, you to want real explain

Manavendra Sial

Yes, I can take that.

in losses So the Michael, XX-F and the the Hemlock margin under contract determined for as that we finalizing Maxeon, were exclude not long-term for the for we retain to Maxeon. the presentation EBITDA presentation or the

consistent in in you what XX-F. third So we presented what with for quarter, is Maxeon's SunPower see

XXXX, ends of midpoint contract quarter impacted operational the over second SunPower's ends guidance. of And be the building then the guidance And quarter volume forward, not quarter in actually -- the million disaggregate by go will there's contract $XX actual, and as Maxeon. the quarter-to-quarter which post-spin. compared our second will results third Going to to with you improvements from

Michael Weinstein

Got fourth a you. not sources guidance kind much this asset cash sales of give what year full occur SPES? SPES visibility also, quarter at this Why in half for second you fiscal the in from And have might the How do XXXX year? of at point?

Thomas Werner

Tom. is this Michael,

is business, visibility As is It's shorter the good. commercial a channels great business we fourth into but think business. cycle trends -- quite the strong. the The our in I quarter are

doing the great have confidence or XX. into strong we on Day Analyst so year, the going including back September And confidence QX. We're half an of

it Michael? the lot would of And more say. a so question, what say part be We'll to for your we're about was then. that, second saving I'd have it What

Michael Weinstein

Are half? like like anything cash the asset or second there the expected that sources sales from any in

Thomas Werner

that? take Yes. Manu, can you

Manavendra Sial

million $XX XX to the cash next of sales million months. over $XX about there's asset Yes, from

Operator

Sachs. comes question Brian Goldman with next from Our Lee

Brian Lee

the following Maybe on one. up prior just

a is non-GAAP? with adding SEC from technical adjusted $XX had reporting versus it non-GAAP requirement? and you're QX. is But polysilicon way historically is back done no I this know way that And I excluding the an so out-of-market you've this for it longer on into the having Or the in itself, million to have there the you're it cost. consistent or in $XX reason think historically? way it back strategic you're there On EBITDA it reason Manu, Maxeon. the Tom, it's guess, you Or million I then the doing some put metrics? QX XX-F

$XX quarterly to million? in the until in step-up exploration the forward why QX And rate XXXX? that is going So run

Manavendra Sial

Okay.

me take the questions. three So let

on based why in discussions of vis-à-vis included review had Really, XX-F. with the first be one, the what the so wanted -- quarter? the to we XX-F, in third Just staff. We that the and consistent reported was SunPower -- on in around for the

So the the that around discussion SEC. was with that topic

So that was one.

of $XX the quarter. versus out-of-market quarter third million second context Second, with poly in

I quarter be lumpy. are XQ to we think of the as factory the terms production XQ for a factories back are given XQ, volumes think But was going Maxeon lower now. online All shutdowns. the versus in

what So the $XX million in XXXX. parts XXXX of is reflective historically we've been and of

about there's XXXX. that the think going liability $XXX goes way through liability the is post-spin to of think about million I forward

Brian Lee

And gross gross helpful. How margin the I non-GAAP SPES QX. then target that? here be consolidated, in super margin guess X% thinking embedded versus X% That's assumptions SPT about Okay. for should on we to the margin the gross guidance for

Thomas Werner

Okay.

So over few say to Manu, don't might words why you we Norm? hand and a it

Manavendra Sial

Great.

XX%. closer channels the The an from to approaching Direct the margins margins perspective, in gross are just SPES mid-teens. are Commercial So

details bit quarter. in posted. I out there. little think second seeing provide of have And that we'll are a that in color metric some sheet You're of the More Norm play then Bob

Norman Taffe

our is the back and like half because really increasing QX QX. a momentum we where in we the quarter Yes, with proud some margins to to. both significant of because margins don't channels, year, announcement certainly bottom the the this We QX. made last have of we're and quite the in also Yes. more line actually quarter doubled for lot those No, of volume happy hit had until grow products, our we in financial pandemic TCU a results

of very So grow the year. channels going margins that this the to confident are back of underlying half continue gross to

Brian Lee

in. And last maybe if squeeze one, I Okay. it could

know I said volumes in SPT are to going Manu -- Just lumpy. you be

on Heading and midst the QX, Or volume outlook You that production though flattish, the of can through being even QX looks quarter through it had impacted like is circumstances, online with of you specifically? pandemic kind of volume will in could a base us better-than-expected production I production quarter. the any barring the into be flattish fully dynamic out in back through casing production better. suppose, shipments online SPT for here But the guidance it unforeseen shipping sounds and quarter. like your inventory of stay the Were QX? relatively walk you sounds in the

Manavendra Sial

Yes.

an why Jeff, So volume I SPT QX. from don't you the dynamics for cover think, perspective

our Jeff an add point QX above shipments Just QX from SPT In in for more and is XX% were there And a QX will versus shipments QX, view. of our increase then QX, and between it. guidance. to color

Jeffrey Waters

Yes.

the able with QX, down shut for more were factories month than we in So to inventory. a down wind

QX did So of you coming in the lot inventory. that a from saw come shipments

You see of the into it's little then that bubble a as QX line. through transfer manufacturing bit going then

So the to see see we our to even of volumes various lower expectation fully than operating governments time in be that's in what markets, out very why every we'll and still and the safely running. the by local would up with that. QX, factories will the we're expect the But now we got be that is see QX. QX you pandemic And out

on the disruption or expect chain we the supply So any side. don't factory on

Operator

question next comes Our ROTH Capital Shen with Partners. from Philip

Philip Shen

it, understand going be and able America New ship through sell into SunPower. we As North will P-series Maxeon without I to think

be. New for might as pursue dynamic U.S. out I wondering what sales to the P-Series if Will SunPower, could through in be the able play So example, how walk was you and that will well? economics

Thomas Werner

you add It driven. be be this. segment on segment will Jeff, it will to can So And driven.

can done Jeff, to the was all by plant channel be do by add done in want power P-series channel P-series So SunPower. anything? DG And you Maxeon. the into

Jeffrey Waters

it, covered think I Tom. And you Yes.

from shipping area of we'll plant coming P-series, an be at something United So outside also looking where in that will the the but power States. is be piece

Philip Shen

Right.

SunPower plant be if then not So just not that's booked P-Series -- that so power be by revenue to New Or help correct. would claim a Is will the on that. understand clear, me have Maxeon and correct?

Thomas Werner

correct. That's That's correct.

Philip Shen

the Are for Also, you in few pricing modules pricing COVID, a how P-series, with U.S. Okay. trend What chain estimate also you Analyst of do recovered. through you for 'XX? past in we've half expect? price, but the Great. And How And know the premium the these for half, I the that's the during and of do the ASPs down weeks, pricing so get supply you has changed modules back amount XXXX year how internationally? come guys and sustainable pricing maybe has think we for seen through QX fair for to past. roughly and Based a pricing can IBC. expect I $X.XX was that talk this Day, first COVID? watt per on has Maxeon ASPs $X.XX per watt --

Thomas Werner

and of most I'll COVID. to take during pricing ask I'll Norm Sure. that comment on

So the of last for as first company is, is good of XX. our night that prepared the release August news in press on track our and mentioned in the all, split remarks

that, that has agreement relevance in the written of And pricing that Phil, market-based. is is as XX, so will after that the kick the and

preceding companies. We'll the that of a to quite he's market I years us that XX in say a job management IBC quite job in will and think Jeff segment. done the we IBC. that would do years' quite both Maxeon with that that I do comfortable. with so Maxeon almost way And for And to a great that. DG favorable XX is I'm comfortable And comfortable delivering and have with with cost with I are experience great the both

So North our is post-split. and quite confidence the the structure agreement high pricing nature for of the in the in cost American market

that In a comment that. could environment, we pricing see terms maybe Norm, you in COVID on of

Norman Taffe

ability gross that allows very to think I make a It's differentiated staying what from the a us mean part things margins a I have But business. our that we far, And mechanism ASPs standpoint. overall, to stable. a on we've story. we appreciate in evidenced is have very highly said, the I higher of are our big improving what in and there. keep we of quite cost to Yes. panel, competitive would it's seen Sure. so echo it's -- are out have also from prices a Tom much things part sure the lot

we and from I pricing latter half quite the So at a this to perspective, the that case shipments stable will grow things continue see think year. as be of

Philip Shen

last one. Great. One

ahead In and for going sense a kind might see what international out us you do back terms volume half maybe AC of give line? Maxeon able this the Can what in of markets. panel the see to we or you that for be for to product XXXX, year

Thomas Werner

Yes. We'll have Jeff take that.

relationship you obviously partnership, that leveraging Of course, strong can Jeff, take one a relationship Maxeon their forward. started is with going it's very and SunPower, and that that?

Jeffrey Waters

Yes.

AC is excited addition. module we're be immediately. here launching about going obviously, it So to Europe And in the

for ramps And sales a the half dealer the up. volumes have, to it maybe Japan in large additional especially So us I course Australia specifics it throughout XXXX. through channel some nicely to say fits no here would probably second into markets, that But XXXX, we that small really we're expect we over we modules expecting right And future. AC have the in to in channels Europe. see and going now. expect driver going the for be growth in the here of it see volumes good relatively as But with

Operator

Baird. from Kallo comes with question next So Ben

Benjamin Kallo

do residential it anticipate commercial I think a through my past or years you at then Tom, years second the the this assets for then changing or side go get the Congratulations do you you for, on direction think, on And lot. model restructuring the -- after couple or is, think you been mentioned this? line you split. Do You've and you how And position split what what XX side? owning of after as been said all XX. you've the SunPower and you Tom, forward? question with your time you your does the it at through change also dealers on is

being ready? think expect so what should when And time you're leadership for do line you we your as what a And transition for is in SunPower?

Thomas Werner

thanks And Ben, let take direction questions. the for changes. me the first

for the the of So to at ever New years capital as had separate or business into creating put that million call or look years efficiently That's that Maxeon. X.X New remaining level we more is our our SunPower. the for bearing $XXX than due companies When indicates, to part slide to X fruit. SunPower sort unprecedented We're these like of raising X previously. SunPower, deploy we we we an

a cash-generating profitable have We business.

up with cash ability performance of ownership better invested pay that QX, of on summarized which our terms to very off out closure X therefore, the in leases. SunPower. cash-based, easy the we having likely the monetizing understand gone And Manu, converts our model same include I cash stay in will that in our So to the into in to capital a expect P&L. events, has business. Enphase dramatically And point as recent pure spin, which high-return brings of

we So alternatives. option start to an with an improved balance have sheet, at then to look

transaction. the with sheet, I've to tell. the call time and our will the time team Board tell. will has improvements whole this worked that's need balance process as on on We into closely these So

As you relationship the over we've and point and on that, have I Board out, super the just it's been X.X with well a great And been hard team. years. working

these as all sheet SunPower. done, lead certainly, for spin, what have But of we then each and spin the on is improve have someday spin dramatically, with balance And post the promised the X a continue Board. intention to about. in what now, get my investors businesses. we'll we And to see conversation deliver was So the

So tell, Ben. time will

Operator

Our Rusch question Colin comes with from next Oppenheimer.

Colin Rusch

expected that you comes what a a maybe And spin? It talk cycle to velocity generate bit bit can model do of sales about along you your improve higher to some Can with along you the that me that seems returns that things to some post your quicker. do to business little moving you're new can and capital? and

Thomas Werner

turn to So Manu. I'll words, I'll few then and say a it

strong IBC a historical, Maxeon exciting the product. compared will I that way and is course, over for cash both think to more side, really they net position, even of The this have for and twice way about efficiency capital an than in higher part be businesses. P-Series

Maxeon. for that's So

loan So our New to in that are we're business is rapid is quite current quarter. than market leased. with between And are there cash important cycles the we're residential in business cash course, kind the agnostic lease. SunPower and the business, less of the sales loan note fact, of the rapidly. over actually and those parts, swimming XX% actually XX% of And In cycle instant. It's growing and because the within of cash

And and the so our to. cash create of and cycle SunPower we alluded that you loan, our improve design design products channels, that having virtue New we great in exploit will strength in the by -- that will XX-year market through cash

could say -- lease, about words of management? Manu a commercial a and Norm Manu, terms and few Norm In could then could about say or that. And sales if few cash words you cycle

Manavendra Sial

Yes.

think great to how perspective, second overall from cash an So quarter a is just I of here We a point think had view. it. cash about from

$XXX identified any identified Tom not then capital-light As CapEx. quarter, the perspective, said of working commercial does have efficient. And differently, we it's pieces arrangements that capital liquidity. few sit quite require both cycle a have we perspective, or capital a a from second end earlier. and million over really the of access residential forward at flow model, make From of those a working model

commercial, our most get payments pretty combination put You through addressing as commercial we that projects all From we some well commercial as invested financed a it progress. a milestone of business. we a high-return financing together, construction capital as specifically on -- it's of in

But So perspective, efficient. months. very very, working X a capital projects from to X commercial take

Colin Rusch

that, another update And rate for on one on expectations tax and that at your real any you're at And around you're storage outside serious in just California, the seeing with and can California? us this an point? both you just give then that of California where demand outside of

Norman Taffe

network. something just storage, to this said begin This direct storage was Yes, recount did take I'll in that Hey, Norm. June earlier, so our through one. is sales selling we

Now then it, we we has California as our our introduce in focus installers. are been and training

specifically Hawaii areas, other this particularly then the most will demand but we sight to the later quarter California, have So parts release U.S. broader and of the is of we today in

outside frankly, the It's looks warranty, feel our attach. has far, been better products integrated our So tools. California our completely but quickly get installing software great. for so a we'll outstanding, But the -- with reaction both also

quarter, out I has network think XX%. I see around as we feedback of can California, terrific. the we're rates, initial been attach that those going dealer our the So roll tell to this that you more in California. numbers our we're us in tactics And seeing

that interest other to to California. them out the kind in a we then feel And better area. roll those get stay as for expect later we'll of states, it We beyond

Operator

Our from next with America. Dumoulin-Smith question Julien Bank comes

Julien Dumoulin-Smith

for quarter. here COVID around Question impacts third

at million guys For quarter, the about you here. the outset described impact $XX a COVID last

were here kind to that good normalized road execution towards provided sources you to be next about how that a of it for 'XX about earlier, that And in but map runway are that you quarter? terms, you XQ, how outlook? a towards roll of if thinking how $XXX XX about COVID run liquidity you that and would and separately do put into waterfall rate comparable then you the If think the million against last total way faring as think you you related, some liquidity And described over the targets comments months? are the know I charge just that type

Manavendra Sial

Yes.

than quarter our first. in showed of last piece all me cover terms that let all liquidity So liquidity better are bars. we on chart literally doing we runway, the The the

about talked approximately we million So of $XXX quarter. last liquidity

had the last our we last better earnings some had of quarter Our second in guided of are than and call the to than bars what then them was pegged time. quarter where pieces we better performance

$XXX liquidity So doing I greater would better. is overall, say, our than million,

that's a perspective. liquidity So from

talked a see than had will saw And out third point right? quarter, piece, at in was better we our One, our global in did continue in think COVID some markets, call to secondly, we two and about particular, You on what that's clearly. I quarter So quicker-than-anticipated to quarter call U.S. from better, accounts. fourth just I both in get how COVID that think earnings we would I DG compared performance a second initiatives think about of is we here view, the last had how of the cost least initially Europe right? and trend in better And about what planned. it. recovery

if versus million our As performance volume and improvement, third quarter. both in compare quarter, $XX and earlier disaggregate seeing it in you're operational I mentioned second call, a you on guidance plus second XQ quarter to -- second the

So going and of that business some give how then you think into should quarter to carrying to sense about quarter. from second quarter the tailwinds third fourth

Julien Dumoulin-Smith

in very quickly, here, the guys volumes you mean some right? months, et not XQ volumetric with trying characterize online some Can of your about we've what inflections of weeks and for how would you cetera, as that peers, heard platforms, from -- trajectory just super today, I for trajectory sharp a 'XX. SPS, get comment but got sense recent to again, of more

Manavendra Sial

we'll So the portion. I have think SPS Norm cover

Norman Taffe

we To coming more about bounced look the not Julien. track seeing that, recognized trends. you QX. lead interesting in XX%. even in megawatts actually similar we But in supply And of to versus week impressive the appointments crossed trend we numbers, expecting Thanks, the that numbers, and the we're QX kind you we're rival, channels, single much on just so to had sell rate every we're what first One time. bit thing, we If it's than sold quite funnel, pre-COVID, give seeing a the XX%. should we're beyond front than outlooking our values quarter, you some weeks, next deployed, we for you if our ever. appointments, look to back And X,XXX dealer me on end back. the a the XXXX frankly, our little And your if at an a very then to one grow in the of more for but -- X,XXX time let an fully faster bounce big X we of the Manu. Thanks, gave of Yes, dealers. In I growth those some demand beat July, color QX. comment,

So we never seen before. milestones have those

records the the funnel month front last of on setting all-time for is us. the So

a super So we We seen levels bounce back, opportunity is before. never about excited in channels the which at definitely going forward. see have

Thomas Werner

the And let Julien, Julien, if me business. just comment could commercial I -- on

noticed QX. it profitable of any all, weren't First there And questions in that. I was on

year, XXX% had years in that in has profitability happy to commercial the business really half booked very the back I'm or business. haven't we That So it. also with close the of either. And

half XXXX demand Julien. set into questions, with our the Thanks business So year. heading for business And that for second in commercial the for the profile your strength is well. of we're as

Operator

Our next James. with question Raymond comes Molchanov from Pavel

Pavel Molchanov

what's stimulus can we be Hopefully, expectation what realistically this in by for issue conversations us Capital will the Day. get behind industry to time Market the the But the get your from solar Congress?

Thomas Werner

that certainly And Pavel, to think have. questioner, take follow-up questions we'll the and you going our you're I be last

there's -- So relevant are many say well. realistically, and And I The most a of job. great CARES course, would part And it is a wouldn't the CARES makes of course, so that there's may Republican certainly Act. the an realistic. the very not as as ITC, support of in credit, of that certain optimistic be market of an Democrats ITC that Act. could of it's for supportive, be happen Maybe extension doing them that I payment segments. are ITC

all of So in that is play.

likely term, there's we a that's that's support but and 'XX longer how 'XX for As change growing we're certainly look I ITC, than preparing. think more a

Pavel Molchanov

not in the months? And half if just much expect in that 'XX, demand of of the does law the should second change XX context, pull-in for next we how directionally

Thomas Werner

color if you words Norm, few So I'll a add could you'd say and like.

implementation electricity Retail is to significant. going dramatically, down seeing step And are have control want in segments. electricity, see up States though is are normal. whereas DG up. from in what incentive. the storage United There's think we're demand I for a down solar to People the implementation, home. the X% it's we're quite DG tailwinds People market their rates attach of working are other

add to you So want will ITC Norm, a do of I of mute sort but it have some will impact. trend anything? the tailwinds think trend incentive, override a or

Norman Taffe

the just of was this clarification. I end heard year the don't I the a thought to if referring I Well, question following know year, at or 'XX.

substantial if the ITC think the 'XX, potential there for to current will end significant. of pull-in a there dropping no the change because be is of I more model, more

if modeled, but significant. be plays XXXX specifically then be a think to out to we'll significantly. see And ITC certainly even certainly policy We I that's could there So have the regardless. we don't to expect how year the case, more how big

Thomas Werner

We on the All thank at our September of right. next and, and forward look quarterly the who call. Pavel, attended you else in Thanks so SunPower XX everyone all much. call. conference Thank to you, Day course, Analyst you speaking of to

Operator

concludes today's and this you participating. for conference gentlemen, Thank call. Ladies

disconnect. now may You

Sunpower (SPWRQ) 5 Aug 202020 Q2 Earnings call transcript