SPWR - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the SunPower Third Quarter 2020 Results Conference Call. At this time all participants are in a listen-only mode. After the speaker presentation there will be a question-and-answer session. [Operator Instructions] Please advised, that today’s conference maybe recorded. now today, hand Investor Bob would to conference Relations. I speaker your Okunski, Instructions] like the to over [Operator Vice President, Please sir. go ahead,

Bob Okunski

our Conference I quarter you. would to everyone Thank like XXXX Call. to Earnings welcome third

for On back followed overview Tom the strategic with financial guidance. for third Sial, Manu before today, to our the the of will quarter results SunPower, quarter review we'll our call CEO out a start Werner, Tom by from call CFO turning who XXXX

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

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

Thomas Werner

as of business a update Thanks, call, quarter overview On our we as this Bob, will brief joining performance, an thank performance of segments. our us. the and provide third on individual for you well

well in Capital success that we strong at positioned solutions market. into strong industry-leading year, competitive Markets confident next a remain Day, we our our given for detailed position, going As are

guidance three. and our to Let's well Please EBITDA start spin-off of Maxeon we revenue We completed quarter, shareholders. as exceeded third recap slide of quarter third a turn and to with our the executed our performance. the on

our QX strong Given our QX EBITDA XXXX year bookings fiscal guidance. in are raising we performance,

continued and margin Our homes residential Residential as the to improving gross overall quarter. retrofit strong megawatt outperform, in Light Commercial we our and our new for segment businesses, growth while saw

customer which Finally, are further recently installed working has solution, our been increased our XX seeing builder to out residential demand new launched already for our we new while SunVault home product, OneRoof roll in with partners communities. approximately storage

as for with an being Our C&I We for the date, quarter. storage our Solution project demand our to largest performed EBITDA to on solar during storage the continued adjusted well, strong solution, Helix backlog C&I plus we segment basis profitable also our including quarter. were added awarded

million our later, business strengthen we As our positive QX, the $XX to and in Manu XXXX. off, to efforts segments will our in balance cash improve discuss expect by and sheet are as increase operating and quarter be paying liquidity flow cash

As options to balance a our convert deliver result, XXXX we reviewing to further related our sheet. are

programs. We as our in and diversity corporate appointed we also positive relation our inclusion a leaders to for programs, and social took ESG step responsibility

been with in a only leader leadership. will areas this this and for accelerate have We both years, new many

a for SunVaul Finally, and performance, increasing margins. expanding market we QX SunPower storage and along our strong with residential XXXX targets in recent including homes Capital we Day tailwinds for our Markets for gross demand new remain confident our our see significant next given Helix the solutions, year,

four. turn minutes to and about slide or a I'd like RLC. Please Commercial Residential Now Light to business spend segment talking few our

is end quarter. installation high strong. increase of confidence as very customer into RLC primarily delivered going we through activity to Overall, both Our residential saw in QX, as remains retrofit guide, the business strong the new demand driven and quarter, a homes, demand continue our

continue the a improving to benefit margins bottom note As - that result improvements, Residential to It yet stability our loan financing. discussed cost of continuously have facilities not lease important at our our increase, line. margin impacted ASP continuing is Investor our as of gross our financing and and announced Day, recently

these some We full realized with to margin see XXXX. the initial improvements will impact in XXXX, of in being QX benefit

megawatts. record New Home also backlog performed well Homes more New sale - resulting than bookings record of in with for QX quarterly a XXX

Our partners. OneRoof our interest of market builder share in remains above our for XX% many with product significant

start volume, very per customer will are future storage it increase of to service be positive We revenue. we in both and the SunVault our solution, about revenue for future the as install foundation

for key partners. number SunVault For of certification we and the of beginning on installation quarter, ramp XX as well many dealer achieving milestones, XX as including delivered our our the a at solutions, kilowatt

distinct a have times, smaller given footprint, the power backup install SunVault, competitive to ability faster our advantage We higher modes. with

related structural, highlighted sustainable, SunVault revenue million our the that XXXX. our our in to highlight both are we and exiting second Capital contribute we quarter. the at As the added to our base Day, in we five. strong now metrics competitive customers demand Markets some of expect building with more partners. remains quarter, turn to $XXX how approximately customer during to Please total bringing to XX,XXX like advantages, key than more I'd slide than We customers XXX,XXX, as

customers see storage these existing totals opportunity Our and we to year. X.X significant our gigawatts, next and service starting now footprint installed with expand base

sales from our more continuing from SunPower-generated XXX as benefit also across dealers. XX% exclusive partner strong our leads than are marketing We virtual platform have and programs, come of to selling

integral generation lead residential our of increasing with Our point is platform part dealers. ties our our an platform, biggest

has customer through is as methods. resold transition successful transition This acquisition materially lowered our volume our via all or QX in results, also virtual to showing online overall also Importantly, sales sales of XX% residential rapid costs. online and

outperform. Finally, business as Homes I New earlier, mentioned our continues to

launch now in Our well, quite has approximately deployed first now of current it its homes quarter of availability. the our California in is backlog XX OneRoof and is as XX,XXX been going communities in

efforts, positive seeing in in the We and trough. QX of and and right margin in growth more a shows lease Homes new to loan the revenue new head into as slide at we residential are QX strong XX% next SunVault. products, expect improving and both dollars our than trends Residential to QX in installations detailed On were on continuing our in grow expected in up revenue XXXX. percentage rate XX% chart by that improvement there gross similar gross The on XXXX margin. driven our a in quarter. confident We trends versus shows be on left improvement will and the basis. COVID since are we New the rapidly driven both The were chart continue the results six, homes

executing our capital. achieved can quarter, a lower margin cost from you COVID. programs, have improvement cost quick is gross our successful tied year-over-year on impact despite we to As the in directly improvement well every see, this to transition reduction online of year model, as This as

year Please reminder, improvement Solutions Solutions on SunVault this seven, not the benefits solid a saw to turn margin where our include gross our results rollout As full of We I’ll recent storage the driven our our positive does excess C&I with of business C&I our currently XXX from of provide yet by in update the projects team QX. slide segment. from cost solution. or full financings, added were our further billion the and megawatts, EBITDA in Results adjusted $X.X to megawatts QX, we for contracted awarded reductions. platform posted quarter primarily XXX and project systematic We execution pipeline up as improvement in in quarter. during an

margin of per $X.XX, quarter volume. more up gross at on XX Third in watt megawatts came than $X.XX year-over-year

across margin cost the on initiatives, execution Given least our quarter meet watt to the leader per the about in our Helix end ability for expect backlog. remains commercial We our high than we XXXX, sites operation. solution of XX XX performance in remain Demand storage to megawatt our of have gross rates market of and by target year. storage, attach in third of with at hours confident in more for we $X.XX our of current remain XX% and storage our

the solar on Sial, and for over CFO megawatts. totaling expanded opportunity, capabilities, I'd our with award Helix two market Manu a see like of recent growth capitalizing the SunPower. community a footprint With in also that, our turn solutions. call We origination as community to projects solar storage XX to We our

Manavendra Sial

Tom. Thanks,

that I slide on the and discuss that's posted and our Relations on to Day financial where we for disclosures revenue enhanced on September we to customer a valuation related financial clarity we Please Investor sheet Capital values for at been and Before we remind to our eight, provide have turn have contact, detailed XX. day that made metric had related wanted everyone one consolidated to framework select our streams. provided quarter, the metrics results website updated to the recurring that results has Market

exceeded we with pleased third for EBITDA financial our and performance as our guidance. are revenue quarter, the We

[ph] residential saw quarter. continued of the recognized We up on we residential in segment quarter. Moving light and XX% second Post sequentially, the strong solutions. spin, megawatts rose quarter. specifics company segmented residential up commercial into with commercial light throughout to XX% as the approximately the segments, Overall, our and have C&I sequentially, demand our remains both recovery versus XX% with

Our sequentially. XX% C&I solution segment was up also

gross in We the quarter. at per volume Consolidated per quarter. watt from and in watt, with trend Devco the was to third expect in fourth margin residential continue up growth per second non-GAAP $X.XX $X.XX quarter, the watt strong $X.XX in

from watt in fourth our gross in We residential our and as in expect a execution benefit economics lease in significant improvements and per quarter roadmaps. cost step-up we on margin residential, loan

project solutions, where in third a also positive improvements quarter. in execution in saw sustainable EBITDA C&I posted We we

storage solution for the with we pleased of demand As And for storage very are into Helix SunVault customers. Tom high continued commercial XXXX. going mentioned, residential traction remains product our

reported that metrics, our quarter pipeline track million $XXX recurring leases of financing, residential year. $X.XX as million. improvements watt, and held executed recurring traction margin to continue our current we revenues management Net including Capital watt from Day C&I and quarter, sequentially, targets. SunStrong margin Powerco services initiatives, ability adds revenue meet our a watt is $X.XX corporate post recently asset XXXX the to of our end to retained down XX% In expected hold. commercial services our assets Powerco and revenue third from Non-GAAP closed revenues venture increasing OpEx OpEx residential on We have relation spin. being build million including currently at on than per to system, we sequentially, cost OpEx forecast. streams, and per the to approximately incremental residential was $XXX revenues Given our to to with our storage grew joint Markets lowering value in successfully and customers, from $XX and we in ahead to energy next close confidence of that remain was less reduce the we from

fund lease Bank where we $X residential As mentioned of watt per value. of and margin second with we recently present earlier, generate closed cash approximately value, on the net net expect to America, upfront including retain

from and further reduce residential cost We our are capital effective close fund, capital and capacity. capital benefits we for future equity now is this lower can tax committed With cost of funds. seeing believe X% new all in to of cost in our of leases

Finally, of debt improve our efforts ahead on ramp. growth we third million ‘XX working with sheet. our segment balance of net and quarter cash, recourse our to the net in reduce maximum solution for significant flow quarter and also in the C&I continued volume deal cash expenses, fourth invested with ended of a $XXX capital We

third segment quarter. close cash Our the in Light and Commercial Residential to was operating breakeven

we operating expect As fourth Day, mentioned positive XXXX. quarter units in Capital the starting business to our cash Markets generate

of to third quarter solid SunPower liquidity will if the maturity, the our summary, call to we improving financial and quarter expected have we position, guidance. for payout the ability for cash quarter chose. fourth as converts a generation, Tom XXXX our future our With and a company, In sheet you to turn that, Tom? As so was prior back targets for positioned strengthened result success. key see balance I the

Thomas Werner

Thanks, Manu.

net million as year in the revenue on quarter to income of million megawatts to GAAP of guidance guidance, and XXX $XXX $XXX million follows. is GAAP in Moving fiscal please recognized fourth quarter company's nine. $XX XXXX turn of Fourth to The XXX. slide range to $XX million,

recognized $X.X For the income XXX. X fiscal of - million and $X.XX revenue megawatts fiscal to year of net year for XXXX, to to billion, GAAP $XXX company XXX the the $XXX billion million of in range expects GAAP

fourth a successful to quarter XXXX third our visibility EBITDA million, was I laid QX on our profitability. are year, to range of year questions. for for summary, the EBITDA expect our strong turn performance Maxeon In of million. improving fourth the the the the would to foundation as Given of With we quarter be the in we quarter XX be solid our spin-off fiscal balance to for EBITDA over in We and million now $XX quarter raising and million $XX and range to $XX of for and initiatives, company, the executed strategic the like call completed that, guidance.

Operator

first Sachs. comes [Operator question Brian with from Instructions] Our you. Thank Goldman Lee

with proceed your may You question.

Brian Lee

guys. the questions. Hey, Thanks for

opportunities, optimal gross gross yet. some follow about on RLC on or You good first of quarter. product gauge the profit to SunVault. fair? we've will on just in gross this And margin And also not your making? it that into margin here, you so Is margin the on target potential on this A it comments see up. you're But in margins, imply guess I the for here we we peers assumption to do are well the you're related fair targets It know, it's of job when levels even higher this then both here SunVault XXs, I questions much new margins. incremental. and then profit sort since additive XXs Two does sounds had know, sort of category. me gross quite is, a margins. the seen at trying your, to And that hit like talking be based when

Thomas Werner

for Brian, being now dealers Thanks Tom being is question. got Warner it SunVault here. and is, trained, - are installed. certifications, the And

favorable designed think product margins to expand. we'll ourselves. So I'll a position the are compared we And ramping. we And Norm since end others let actually I have

Norman Taffe

can Thanks, with incremental. It year. our Yeah. to and Thanks, about growing SunVault are certainly think overall Brian. Tom. you Yeah, being margin, relative consistent additive which margins, next is

- to to expected on XX of $X.XX we upwards the watt $X.XX margin fact, sale. In same of a add incremental

margin, customer. is customer value but because not lower incremental effectively incremental a already acquisition the sale margin at So only cost, making that it we're of has the much that at

to to margin and be business – be the completely expected similar we similar so overall And - incremental. to the

Brian Lee

been to the the gross forward historically? seen you the any trying there Okay, of pretty guys. or that starting seasonal. to just here, perspective, Is over focused couple a up about years, track a global you ’XX? seen from going on years gross of past the in trying couple I some margins, embedded chart. then see figure we're is, for been maybe level had plus XXXX will one a up reason understood. talking you're point, year? in past we we've know, helpful. there, down and That's in as how RLC seasonal the and margins And sort earlier And trend up seasonal I QX Thanks, But of should a next the out at follow slides, that that higher again, I RLC. ask If into we've a chart a to seasonality look how you have on of and know pandemic much or XX% it think for that midst gauge of the point going years bar in there's we starting from the about that, know, is I'm your should be reason where baseline,

Thomas Werner

Okay. we it do Norm. Why don't reverse

You say probably I'll a few on. words, and add

Norman Taffe

been has can happy And tell There line. will frankly, yeah, I seasonality been to. you stable. that costs overall have be has that in in our Okay, reducing is our that more margin expected, think, more think seasonality become I ASPs no some I as

the year you’ve past. margins. at XX% margin should to said we coming Analyst you full expect as is model which in And for seen expect or year some the the Day, above XXXX, exceed the less in our hit seasonality, that So but I’ve

Thomas Werner

picture think that we own to that meaning And, because Brian, economics out, our I is important are loan the really point it's margin residential service better, now. loans in fundamental, our fundamentally

improved And lease, in on So we're do we've XXXX. think both cost we made our really And start down, biggest I we've in costs. to our with continuously in those has of leader lease latest to the because a of someone facility, To cost pay earnest else lease. don't And that. parameters installation. gone our step improved acquisition of the customer that we've capital in

margin very though will still see driven you So by the across quarters, know, changes as are seasonality, RLC even all of in fundamental policy. bases four often you some

Brian Lee

All right. That's Appreciate great. it. Thanks for color, the guys.

Thomas Werner

Thanks, Brian.

Operator

Thank you.

Our next with Credit question comes from Weinstein Michael Suisse.

You may proceed your question. with

Michael Weinstein

right SunVault, in hours XXX sales revenues guys. Hi, [ph] greater? of about so implies about Can the you that’s megawatt attach about right estimate XX% Is SunVault think $XXX a million math, that of it? that a in rate about year, way or whether the talk we to XXXX,

Thomas Werner

I rapidly. a will dial the a attach and sure, and touch of And for ballpark, might than It Norm, lower be significantly, rate of little? vary maybe depending quite think the ramping regions. in course, can in you're that, we're on course, you it

Norman Taffe

demand At Actually, I point. rough good head numbers level, I the view have I we've do pretty I the But close, know, in just confirm. quite on at point, our is upside the pretty based math demand think to level. to the about say, But think would assuming estimate anything, there's numbers your I'll that's that's think broad right. to our based that think you I is that estimates If my a this quoted, those actually this estimate.

Michael Weinstein

Who you And do have were the capacity access suppliers? how to? much

Thomas Werner

designed suppliers be of say that the been inside. the to agnostic. announced hardware the pieces can I not main products the we've So vendor has or But

the to downward. and long inverter curves intention term our So cost is able be battery to follow

and today the only both So right capacity. supply supply of ability enough installation thing to approach. We we've and we plenty in equipment constraining is then that's volume standpoint, really multiple high our really standpoint, and better our for very for But other economics. volume high supplier From want comfortable. designed ramping ourselves. long suppliers we're term using From our have is very battery, battery do have a now to a supply have the supplier, the system inverter, a we're elements ramp,

Thomas Werner

the boxes boxes. want two consolidate a more able that one remind I see solution two two into of to to you at on wall. we've everybody functionality been boxes, look lot the Michael, is than you'll And solutions, if some our other And

aren't same So in for prepared six, sources big Far one is is the battery any have box different I so should six battery. at size an There the six, a and it that that those And those we of many battery, is basically can East. sources inverter sized suppliers of here for that or most say. we're

On the components. source which other is item. some design. electronics we our then that an is boxes which switch, which panel, by designed automatic It's a system, second item, monitoring transfer common a it is common a and service us, It's is

very So we the of designed common theme scalable. here lots we it, control there. it's have Therefore is

Michael Weinstein

Yeah, in for million two EBITDA If, improved just - just look one $XXX of I September? bode the for greater out Right. in or questions. mean, XXXX does how you you EBITDA? that around XXXX QX than laid more know, so assumptions

Thomas Werner

and that you Manu jump take can I'll So you'd in if like.

into would here highs that, sit it's into in confidence QX, XXXX So what as the we us, level the lot very us about time. careful confidence, been is of I've the QX guidance guide, I year. this we I I'll giving have you with Solar been metrics of long guidance until XXXX. it since gave for put But implied we the been way, in a company. say QX gives know, get for specific we going We're a having gives beyond with our

Michael Weinstein

of that bps X% see XXX facilities you. I XXX down trending cheaper. question, you year? that the know Do bps, bps, mean, on see new One - more you will I next XXX be you Got cost do said capital.

Thomas Werner

I'll let that. Manu take

Manavendra Sial

I think interest know, so with historically environment. Yeah, a in you rate - we are low

of of on opportunity I headroom think a of forms and as capital debt the little stack, you capital, X% house. both equity, of on about have more the part side think bit cost the the with a all capital, equity we

correctly, in about think So the we is, thinking terms I reduction it you're is of should how expect.

Thomas Werner

is, projects the operating of since have we're markets, way products sheet. or projects, and a We’ll we value what since very sell right. them, the on balance we think we I marker the And clear monetize public

sheet. should and we as on So our do and forward. we’ll benefit capital. we with threshold And are know that improved as public the to the from so so sheet has cost radically, The rewarding balance projects need we what more even compete balance is. of go We markets the

that is on. So cash we’re the

Michael Weinstein

guys. you thank Great, very much,

Thomas Werner

Thanks, Michael.

Operator

Thank you.

from comes with question Kallo next Our Ben Baird.

proceed question. with may your You

Ben Kallo

Hey, congrats thanks for my on and quarter. the question taking

customer up go with your going customer network that’s debate Tom, whose my guess to people driver that own know, better I And a - storage second your final better know, can there? first product? where going is, the so some when have Why the space, then [ph] that? to on other cost that you Maybe own it of you has do there? question And there's that Just it's has cost changed long… acquisition your we we my them, is than your this a are changed whole resi the is, of And channel outsourcing dealer Sorry, has and question that? ahead acquisition side. to or partner you're been part numbers yourself that one about it versus get anything the guess, forward, look with is things for and biggest I I you Or what being sign at your And down? was forecasted salesforce? think,

Thomas Werner

Did have Okay, to a take I'm Ben? you going more pass. one

Ben Kallo

that's it. No,

Thomas Werner

is in But our It own? going going productize answer to unique in it XXs. the all do our DNA. created XXXX we the because question very great. product. a then then scaled them. to back so appreciation. SunPower. designed it's a better solar add to of Norm Okay, that pass take XXXX to to to our what and with And We back way we core at short I'm your cell in we have on probably and the Why is world's own heritage is a design product, I highest more the efficiency say, - And

product And we up better, faster, back design garage. and so which it the every deal, is better. big we second that boxes, works that will expect time you it's often on pull installs because see And because is first two why a the you your more them reason load

future Second proofing. is for

As we imagine services, of much arbitrage. which grid That have you course, add to have, do, we're easier we we do integrating add grading. and we we already And of monetize rate of resiliency and And services do to ourselves. it's how it's can own micro to is have course, we that interface, grid our software. services, those, with

dealers Thirdly, our person we But or one expand somebody people shopping and call offer they one call stop to don't on can comfort our who our stop to calls customer somebody have that this. the last shopping. else else they call to call customers for Norm and multiple one

So by it's It's one company. our wrapped warranty.

it do So why On customer can we I'd about Norm cost, acquisition expand those the things say three ourselves. are on.

years for generating his dealers. and a that We're marketing appointments now. This is cost strategy had our had scaled and the than vision or executing engine great. Norm Our marketing XX we engine running They've on is we effectively. way, appointments are the and team generate we such ago, it differently more our by peers

execute generate doing advantages. add then that and his companies, companies channel And strategic only advantage. its a sell There's bit channel expand partners. there's to EPC forward, lastly, really sales point from business. leads the and a Norm each so companies it's Norm. we're on including competitive I'll whomever, let that quite And leads today and then probably fragmented. what of to question, the is partners. on That's because thoughts generate interesting on independent own There's And has yes, going channel that EPC So

Norman Taffe

about, that we have deal, just great a – make data other the few, is customers. supply simply avoid in us of over is doing I Thanks, we what's Yeah. mean, see but was a a new margin But our to instead to existing covered Tom, economical on few you customers, And well. on else to hardware for really margin economic storage storage, own ways added than actually reason not to somebody big right, which to stacking, the many important paying sell. points. opportunity that that's XXX,XXX margin it's I

think economically bottom we long And meaningful, so, the I term, impact line that be believe to company. will

to the the a this. from strategic our a alluded fully platform, storage is the model you approach think the you that customers their Tom importance really software strategic is of it's to us won't And else's drivers. I software integrated standpoint, that use. that we important is us control term. providing refer But for long somebody to solution. What's And means software storage monitors to customer TV, and getting storage, as their neighbors. Those with us, important, to complete that has their are solution, which often if a for own get kind customers also were tool both adopt you I a Tom as the important to single far which said, model is choose service or basis the somebody stick us, think else's their as us really there that

couple Just comments. switching to a

glad I'm I'll that same highlighted quarter versus XX% our better. month, end data and point customer October. - last Tom end the generation You generated we engine is year. appointment you our costs. funnel talked better from getting good a This did XX% acquisition front past - we're and more about front give

So month funnel. the versus almost we're larger not of terms XX% just front beyond in end and COVID, month we're

we to value. partners our of becoming portion So that as dealer what bigger a is bigger, bring

relative mixed it's model. important. last been question, And in seeing the comment super very a so much channel, that's great And a to terms a of, we're

we At that in as with customer partners opposed costs where lower sales cost a model. acquisition of low to to been keys or selling doing our just model, the virtual has of areas to do different installs. makes directly areas it's seeing more country One are same do certain the sense dealer the time,

grown. So installing continue portion, to to smaller, business. while are small, portion independent dealer is we grow but still our are Its relatively growing of dealer our also it installed network, compared our the we

Ben Kallo

you, Thank guys. it. Got

Operator

you. Thank

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

question. You with may your proceed

Philip Shen

Hey, guys. Thanks taking my questions. for

know on leveraging first to fee is financing targets. reduction gross the it's your Obviously, I TCU. The one loan relationship story. with the you're critical expansion margin

where serve this I originator situation, mosaic loan may guys sale. given something. the you a for on revenue think a may installers that And or think or as of your in accounting the recognize what I the [ph] rather only than, equipment palette model, these happens change is you the loans, know, they

accounting taking completely? pardon able to wondering But and and use you loan are have to use that you you change. those have example? I do Or - for have to how mosaic Thanks. do expect So might still dealers that to me. be equipment think - was your your dealers expect installers And program a have you those,

Norman Taffe

can So is this it, Norm. take I

Just level, a we mosaic at TCU. the both continue use from and to – first

So I from accounting partners. dealers, have in point to do is TCU still out, our changed a same not with want the perspective actually both of as product, the that our two as has cases. we But that far still

a seeing issue dealers approach. having because different we've gone a not from are they to accounting, sort TCU So of the any

all APR products, suite is of of of in our the partners really, access can longer using may attractive. some products. virtually dealers able TCU. already a variety converted provide. of a that all some are But But very we've as using loan term that mosaic still systems includes to bigger They lower our products virtually products to both And have and we loans, using TCU. we've they be now been and well. been low And what APR So see now

Philip Shen

Norm. Thanks, Great.

opportunity. more You already, guys grid if was talked provide wondering you some but that color could I about on services

to what's in revenue a charging SaaS that? of could a is the And start is You of, be generating And when end you. any guys color fee great. some meaningful? know, And kind know, you model when percentage up you So Thank way? to expect you model? Is be providing? that software that be it the the Or would on of a to revenue you the for starting embracing going facility example, - are ultimately, for timing the revenue it it be do to be model? meaningful to what it might that

Norman Taffe

you're think I Tom. muted,

Thomas Werner

take and amount have the to is have capacity ability market you meaningful the of storage I'll that. directly So storage proportional and the in have commercial. we The in capacity today to market services

have In service to some revenue. you even generate numbers, in We gigawatts to the very large get really and do so capacity participate do need meaningful we some And some get capacity. order we revenue, markets, deployed. perhaps

And so, grid revenue. commercial, some we're already seeing services

I'm advance just in residential, probably it revenue. these service SunVault the to you we you Of know, launching markets in we're wholesale Typically, as bid years course, typically. get in you to need since three know, sure scale

are leveraging wholesale we bidding so SunVault rate that. and for into for then markets, attach planning the And

If out you go meaningful. model, be numbers to year to the a five get

is to given Of the similarly math work course, here. there's and that peers going numbers have

you multi commercial and SaaS. some already residential So year. those years, few first year should also we're revenue bidding we for get point us, are each the and a from it already services. model, the commitments, takes They look like commercial business have second, revenue more at in grid models I

we're the In of it same going go future, bill. And idea. of as but we then we arbitrage, system. arbitrage. we That's our believe they offer into on, solar go we course, a at We versus services And grid for grid that price to services. customer optimize services. and to precise in expand where what today their in I do pay we that, call there, the services that offering. TOU can customer very to commercial, we license as built be And resiliency, from that's Now, may you residential, rate the

So price question some and system, recurring, cases, answer the it's in built your and looks to therefore it commercial of both, like SaaS. the into is the

Philip Shen

it I'll Great. Tom. on. pass Thanks,

Operator

Colin with Oppenheimer. question comes from next Our Rusch

your with question. proceed may You

Colin Rusch

much, so guys. Thanks

looking and are if grocery in that? to address you know, you are look what you business, in the You in of needs for terms of how And of some working capital? forward terms and planning

Thomas Werner

how you're correct am about question I So and - understating think you're asking cash correctly, needs. [ph] we cash, about

then and a up I’ll words it follow I Manu didn’t correct. Let can take you it if get me few say and let

have new I SunPower, new limited guess, if SunPower, any the CapEx. I it's So will anymore. not

manage to we such capital – cash We be expect positive. be working operating our that can

And convert. in already first the comments little And in to off so cash. pay a Manu position Q&A, our prepared in in business our generate bit his expect said a we're as to we

much And comment ways terms our we've can how that dramatically recourse we're that. had at sort But and versus sheet to improved have on in so now balance looking of of Manu the cash. optimize ratios

need for So expand. any inorganic, meaning it cash, as would be we forecast M&A. Manu can And again

So Manu.

Manavendra Sial

Yeah.

about is EBITDA, think you one, model cash specifically our a you model. based cash conversion as So from cash know, and

we the business. have EBITDA the and an cash to flow both perspective, commercial forward in from residential arrangements So,

cash, cycle from relatively one. that's low So to EBITDA

improving inventory XX Second, like from businesses, in terms where lots XX, inventory perspective. to things of of both getting residential, our specifically in you're returns, a initiatives tonnes

generating So both what perspective, fourth quarter. returns. arrangement, flow say going From should That cash cash, modeling forward continue. is you a businesses well conversion high our our EBITDA trend in of into inventory I a to as expect as is operating would given

Colin Rusch

industry prospect That's terms different then in build to do you side just your the How model and model much of grow? of supply, all of have super And terms as the materials facing supplement the in you supply suppliers helpful. know, capacity environment. tight to on the flexibility

Thomas Werner

I'll take Colin. that

imagine. us, call session So XX we're that two Maxeon, to not But doing partner And and meet a use like, as, tomorrow, year, roadmap product a continue out that's we now year years one during great determined, We you in we actually. more or whether way yet exclusive. as be months to models for residential. decide with look two of plan commercial exclusivity two a as And we'll in. people's capacity commercial, year, that other working which doing as them quarter with entire with frequently is which the can upsides then In third And we closely exclusivity. Maxeon, with it's is by have with extendable. mutually could soon them Maxeon, do next months

the from also looking that product expand Maxeon. we we're at ways breadth get So of to

Colin Rusch

so much. Appreciate Thanks right. All it.

Operator

you. Thank

Morgan Byrd from question next Stanley. comes with Stephen Our

your proceed may question. You with

Stephen Byrd

afternoon. good Hey, to Thanks for taking wanted follow my just questions. up. I

highlighted the bit wondered question, I of the of discussion, in the could reduce ability equity First, you a a X% just you opportunity. the on cost you if and about prior talked to capital cost little capital to there's just about drivers know, little a get of granular assumption more we given is, value? how kind of, particular magnitude, that if way in you think any approximate - terms the there, critical as be the

Thomas Werner

if I'll say to it. to in, a Manu, jump few can and you add on you want things

look equity very raising of done they've And of you their our First if job cost capital, sources very capital. a primary good effective known. all, resources are of of at well

So good we forward we that partners done have expect a from our they benefit going job. And that have we’ll as expect that.

you our speak, implied approaches Secondly, will has And an these debt to or on sheet. could we then of net down premium million, of gone with Day for our then And go down. not say, could and we'll so not our SunPower leverage, as said the balance as Markets at has soon at dramatically Capital position assets And there sheet competitive to our The be advantage which balance partners. just we we're say, has $XXX risk enough. extreme, sooner, or some as course, one. put should always continue implied improved,

But our are as low interest And plan. have historically that rates. of sheet. our all not improve that's we balance option we course, on we capitalizing Now,

it position. you say want Manu, persist Feds So anything? the do looks to like they'll given

Manavendra Sial

I think residential Tom the a cost that is of cost about our equity there between funds. is covered in significant thing headroom markets, dimension, The you think Yeah, only well. equity of as and public you

and is to So further opportunity get compression. there headroom

Stephen Byrd

I sense. at think bit you you of volume over customer seems do about, if How And over high just Community expand trends, shifting like relative a Community time? then could level, wonder growth. of the on importance great the a you Solar a that Solar, just know, discussed to and makes That potential, that area more. little you

Thomas Werner

So and did a Community bit is the system. plants And different in Solar be And We SunPower solar to - power of and different. did business power ground expand. the Eric in and This history plant today let we I'll of a This world. is solar Community is days. has gigawatts used has long mount old around little X Solar the evolved.

Eric Potts

them it a and be maybe that behind-the-meter existing could policy have a the actually real way allows leverage Community think different groups. their to customers comes a could existing who asset, to them provide as a Thanks, maximize don't lot. and And can it of rooftop, incentive a Solar for of us load and we existing go it in to I Tom. be parking One is origination Yeah, our couple flavors. development

we're one going where that's traditional customers. C&I kind of flavor So your to

policy. more as an more consistent there. may what bit in projects land generation it's queues The a a is Solar other building inner shifted be is where even known been that getting and connection flavors finding Community type be past, little to distributed out, But the positions, of with of going

So both have doubled focused what on we're as of unit. those initiatives almost a business

it So a for forward. as growth we see going us real driver

Stephen Byrd

all That's you. had. I Thank

Thomas Werner

take one of one think question, more question. I going group more we're Okay, to

you go could ahead, if So please.

Operator

Thank you.

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

question. your with may Your proceed

Julien Dumoulin-Smith

afternoon, good for Hey, everyone. Thanks time. squeezing us in

we through is presume And sold about more you you equation channel? bit a storage bit broadly here, beyond of the growth beyond related think where here. side and the the you to existing resi about Maxeon How or little So here breaking off opportunity? what through and a commercial does options, the especially through options? on on you second the about, think question I on here expanding just the on here, would those know, Is being the other how and know, about, think opportunities, little this channels? you left it that to you exclusive the pick having marketing then dealer do expanding think greater that something up do leveraging trajectory, past strictly this

Thomas Werner

will for thanks the give I'll set sorry, we this. I'm second after more one questions. Okay, the Norm, questions take Operator, line. you of

on us to one company XX, the to imagine, And be to really as of were, since used with be we you likewise healthy we August with panel, Maxeon. options successful. want before can partner. terms and And So in us be extremely they They us them. a want of closely course,

deciding answer retrofit, a way well and course are how where their how not, next fits half carport, the and their or make rooftop, elsewhere, if the does not? roadmap, the year, roadmap productive areas and then source is right. all of add fits loan mutually the that it for conversations homes most on we're And cash working ground product have breadth the there with it mount with lease new sense And sales, on the residential of year about a a so Maxeon could we're to over we SunPower to detailed it products

made we’d not grow and and have but realistic want have any we healthy. with - they So to discuss us prepared to up here succeed be and I’d Maxeon, decisions, a very, say we're dialogue not any

on come on you and Julien. to their more can take And then the storage Norm, So front part channels? second

Norman Taffe

about Sure, is is and happy as extraordinary demand. supporting and we channels to. its generally Julien storage. this our with first, to priority it think I new would the way our the first earlier, existing sales And is we that say market, in talked

And so the that's priority. kind of first

addressing customer be to going really is base. priority second existing Our our

apply that's it AC it if systems, a the easier to lot it we cash. coupled, even important lease the its makes way coupled. AC is their certainly of existing about One things storage it is as or And did to

the customer two just significantly. by things, new XXXX those So base we see opportunity are certainly within do third dealer our I I on a would expectations our think cash to based And grow step, starting and own sale, our base. go any just that we of which will discussed existing judge great our really the for probably supported channel? to exceed well, we've be, for really just the more gets a penetrate beyond that's is we'll little someday our say And more But level than it just existing expectations see it dealer year. say first certainly can to channels further solar storage and our existing would model acceptance product, could there. growth customer We of I base and next new from for as more with it, see popular. our opportunity we a out extend I as our the become the

Julien Dumoulin-Smith

quickly that super I clarify quick. can If

given or just that financing back your a literally go would back point to go in be saw and to ability the have certain customers, time you've existing customers, recently at On the can that to to practically? you all

Norman Taffe

right away. But priorities right is that right our the big we just The installation a about portion because of of customer market and for base, capacity - up go can where back the product. addressed really kind building issue We to them could we now ramping away. have we're choosing

is We big able right are the kind customer. out the new installed But prioritizing our to sales box. really at of product a per be to maximizing the base, of of revenue customer portion

Julien Dumoulin-Smith

guys. Thanks,

Thomas Werner

Julien. Thanks,

Operator

you. Thank

Our comes question next from Molchanov Pavel Raymond with James.

You may question. proceed your with

Pavel Molchanov

relation Thanks taking both quick ones, ITC. the Two in for to the question.

any was second, predictions no there on today. whether announced be anything have ’XX, better for back if in session? to you ITC the lame-duck on And stimulus. might visibility you guidance any happen on were lame-duck? if make little one, an First extension when legislatively whether will do for changed ITC in with at clarity there ’XX obviously, a a there guidance the all into be perhaps that Would There's it

Thomas Werner

go So but you you is it's very I the than And know say Is if engaged beyond which possibilities. about would though. odds, we're more lame-duck, table. low much I the do think that me And think on lame-duck know, probably I no that odds. I

and want cost after year Norm of and ability down scale you're XXXX, multi you some to by get up. have be terms it improvement course, aggressive. to do I would In then say our I'm wrap more than impacts Norm done, anything on in think the our impact more offset, going it to But of and plan and faster

Norman Taffe

extension would be But had I term obviously, on long there the a very the the could of I've mean, its the very, be have the increase might year, in obviously significant more kind cash think than, of as that impact for based an know ITC. small I of half made up as than second don't roll this other generated on far we’re - too if off. a support quick much I benefits as and

Thomas Werner

largely that add that business bit Homes little would is storage New a from And the dynamic. from Pavel, And I insulated that. is more insulated

that changes. some things would smooth is out there So

So right? think all set, Pavel, I we're

Pavel Molchanov

Thank you.

Thomas Werner

our call. good you with XXXX joining for outcome forward course, the everybody you, Thank new much nail call we'll next Pavel. have year we'll very insight look the to into the a where our of down election. Thanks, of and Okay. We and

much. very everybody, thanks, So

Operator

Thank Thank call. you, ladies you today's for This conference and participating. gentlemen. concludes

You may now disconnect.

Sunpower (SPWRQ) 28 Oct 202020 Q3 Earnings call transcript