SPWR - Earnings call transcript Q1 2021

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Operator

Welcome to the SunPower First Quarter 2021 Results Conference Call. My name is Vanessa and I will be your operator for today’s call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Mr. Bob Okunski.

Bob Okunski

you. Thank to our like earnings quarter everyone call. conference welcome would first to XXXX I

today, provide as we the call XXXX the On will view our initiatives XXXX and on beyond. quarter, a on as update well an growth for our of summary

call, today Board, the quarter who Manu our execution; by the will will call of Sial, who Chairman the call for turning Peter and will before first Peter discuss results is On Tom review CFO, CEO Werner, Faricy, SunPower, to open followed the our who of QX back guidance.

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

in statements. today’s additional as our quarterly information GAAP will of reconciliations. statements our today’s are press those may see non-GAAP uncertainties various non-GAAP and factors subject presentation the we earnings reference the that for for the XXXX slide XX-K these release Form to on regarding described those earnings and Safe today’s to during well call. of as press documents make During Harbor to Please Also, call, release, our certain presentation, forward-looking Please XX-Q. that risks reports appendix refer are we today’s metrics will today’s appropriate forward-looking affect that

of would additional website. have over to call In SunPower. metrics. the Relations turn Finally, on same Investor the call location, the posted to I Presentations CEO posted Peter datasheet have we slides, a like of this Peter? will call, our Faricy, to historical supplemental also With reference during that, also a detailing the which Events enhance we set we of PowerPoint page and

Peter Faricy

part SunPower, to This good here of morning the first I’d team. be am to say like Bob and my thrilled call is to I and SunPower Thanks, everyone. earnings that at

world. and innovation, have that long innovations I allowed so which seen very technology been build has history best offer with My and far. the the a SunPower goal board weeks, history for few experiences. and solar us am is to I a new customer what of While digital on to in with only impressed I’ve has solutions on

In we a change My XXX world how around accomplish believe forward. who we days to passionate next comprised people is have into residential the of commercial addition, a amazing businesses. on things bright, mission center powered. and the and our are focus talented I workforce industrial will diving deep can and over going

start needs of and our to going the trust. are the goal customer earning and of keeping with customers We backwards, with work

passion Tom would I like over and to Finally, years. for Werner SunPower the thank his XX commitment last to

is a Tom? forward Given world now results tireless like dedication, to foundation I the work the has now continue by quarter. the growth and quarter first to of first Tom and to to change his have of as strong how results meeting all and future SunPower evidenced well-positioned is discuss hard for look you our powered. I’d

Tom Werner

Thanks Peter.

background, Before and heritage Peter with Peter the creating to us environment culture. at uniquely like SunPower’s exceptional and SunPower’s specifics both purpose-driven as we into Peter’s quarter, significant would get experiences new skills fit CEO. growth I welcome with to the innovation rapid comes Discovery. in customer of Amazon formally

beyond. to to for company execute strategic the results, in the Moving we success our overall, on during quarter position continue QX and to on priorities our XXXX

in investing our QX while both commercial execution and we initiatives in strong for and in initiatives. We residential SunPower foundation bookings confident pleased in to our saw revenue with We our Slide that position growth Please profitable growth. our our and continued as X. further businesses, were growth financial are strong met investment EBITDA long-term turn our guidance, momentum

well as solid our bringing growth continued added residential almost saw installed strong as we customers, XXX,XXX XX,XXX CIS seeing we base as execution. customer Specifically, to

We and year-over-year demand and deployed Commercial XX% from industry Year-over-year as as continue last this are demand company strong tailwinds. exceptionally we unit to dollars residential expect benefiting than megawatts well overall versus strong positive had XX% rose as more as as we gross rose rose remained bookings well quarter. compared trend healthy QX improved bookings last year economics an gross in XX% to year. than more margin margin as

our our of Additionally, early loan. balance we repayment further the million CEDA de-levered sheet $XX through

addressable industry policy XXXX EBITDA Looking we favorable trends, continue strategic support, the to to to initiatives executing our improving growth be than on XX%. given forward, our market growth expand expect and more

to like long-term to quarter, see of I growth initiatives. we Please on Slide X. highlight expansion our expansion the our we through significant addressable executing drive market. turn are how As last growth we now to opportunity discussed would successfully

continue look segments at current we ways First, services to DG multi-family market affordable market housing. our storage and additional and and through to expand like addressing

demand more than increasing on platform. under in projects pipeline. front-of-the-meter hours for offsite our through more XXX now We have than capitalizing contract megawatt Second, XX megawatt solutions in continued Helix our with front-of-the-meter hours of storage investment

front-of-the-meter We capabilities platform to solutions. are for our Software investing Helix expand in

to on our extension platform loans. Also, to SunPower servicing platform Hannon Third, to add we in plan Armstrong, conjunction significant services progress our we DG of commercial asset expanding made SunStrong. with the to portfolios support

to Slide I the to that to tail would to our the solar us continue initiatives turn like performance long segments. our we expand X. invest market. to Finally, footprint into will individual Please the business shift now of in enable those of

Gross light outperform quarter business. XX%, year-over-year. the momentum Our points as residential this segment to commercial in up XXX basis and builds were margins for continued

well initiatives over that to system sales to in a full finance efforts include As expect cash more new time we sales. versus discussed compared These cash equipment last number as partnership last volume to put this mix place with quarter, XX% shift started system our our in financing of programs. we we of expanding in start QX XX% sales with as loan already in shift TCU We lease to to quarter. see our

of creation this value as the $X.XX residential in metric last rose growth first year. from $X.XX year-over-year solid saw also to We quarter in

as now homes multi-family performed also XX%, grew resulting initiatives. well XXX of record sales year-over-year a our megawatts in backlog bookings current includes with megawatts, home more than New which

XX%. market remains Our above share

also remain SunVault high. our We demand solution storage about the remains as future of bullish

the saw dealer training. have continued channel in increase outside we the ramp attach who in SunVault now individuals of consistent We our as have a we completed to close For substantial rates quarter, of the and X,XXX of California XX% bookings state.

reach expect end annualized Our and this before $XX run-rate to is run-rate April million bookings bookings of million approaching year. of we $XXX

times However, been customer due longer in expected to firmware experience. the to and efforts than commissioning installation part installed improve our lead have

to see of the end highly quarter. by closer them on We the these expected shortening focused levels times are lead second and returning

larger our sizes are long several Finally, with the as of now like compatibility the for features one I and as our SunPower XX% megawatt of natural inverters make platform. extension for to expanding annual Slide a of as our and we multiple our We long new opportunity current leveraging addressable residential financing well less system year, for given average X installed is turn would tail up a the working discuss including currently combine on initiatives X. for standalone significant market. experience efforts. to expand of is This view of product to the volume than dealers indirect half the key by Please channel robust to legacy tail SunVaults our for our model. storage the growth who strategic ability second market have

growth We of for and enable as a less are for opportunity evolving XX% of by significant at see services these our this than install dealers megawatt software group XXX well. account share platforms we to of dealers. dealers Currently, our X increasing

to expand markets. partnerships will acquisition into dealer offering reach also network. We to our a potential while to the wider our customer various adjacent are enable These us exploring partnerships expand to lower costs

CIS our and Slide prospects excited business, also performed especially CIS this to about on in our on X, Moving segment for we remain growth Solutions well storage.

to strong see now to significant projects or onsite contract well trends backlog, continue of demand megawatt megawatts awarded. our XXX added we storage than quarter, under of the as as as XXX solar more above hours we For

place continuing the year-over-year year. we given also in build We basis, revenue last momentum. this financial while to and improvement saw a of On we have margin significantly the initiatives put material performance business bookings gross into improved

including strong solar efforts market. for our community in initiatives, making our are the of offsite progress front-of-the-meter on storage we commercial growth Additionally, expansion

approach platform. services two We to business, commercial parts leveraging and see also we origination how our and distinct storage development our and

significant of offer opportunities to services we ultimately, both over CIS our to expect Slide While focus turn storage and greater time, a Please much X. business. become

now continuing megawatts. continue maintain to as pipeline first, For our origination our grow. leading Helix expect have our origination for exceeds we market and our Solutions Trends as areas four to focus: remained pipeline key we strong expand to leadership XXX and industry of share development, demand

and execution project our remains installations. focus through storage better on profitability improving Helix Second, increasing

now to community Third, solar our we pipeline, megawatts. continue add which XXX to exceeds

for continuing reduce capital working are with partners financing risk, linearity work to we and Finally, better our to proof management.

made significant in behind-the-meter installed and also storage remain the contract. service and or to storage, initiatives We progress quarter. megawatt with our hours onsite in than leader We under the during XXX more relation

or Our TAM megawatt to either paying investment in than under short-listed. offsite is have as now we XXX also more awarded our hours XX solutions front-of-the-meter hours with expand contract off megawatt

Manu to With bring would excited going Finally, of CFO Sial, in we call Overall, Storage are SunPower. turn front-of-the-meter about in increasing over more opportunity storage investment to the capabilities forward. Software to very to we our Helix the I remain our offering. Manu? like C&I that,

Manu Sial

turn Tom. Thanks, financial our and where we provided select results X, metrics. Slide to Please have consolidated

strong XXXX $X.XX. with investments of where balance watt CNS for year. We expect Consolidated balance the per non-GAAP per XX% our per we a year-over-year. the continue per on run-rate of which was from was we our OpEx, we first and see gross And was $X.XX our and gross the XXXX strong $X.XX DevCo with to execution demand, both as Residential pleased are Visibility $X.XX by towards in in more EBITDA half a than last watt quarter. the Non-GAAP margin second bookings and watt margin into improved digital OpEx of for continued XXXX segments capital. if significantly are quarter than cost deployment going well-positioned our improvements our of ahead and recognized, bookings exclude mix of per performance financial OpEx watt strong trend products, XX% year you to first quarter Solutions we in megawatts capital met is and executing We saw and driven guidance the strong for of up was Residential watt per this beyond. in first $X.XX. more in quarter as our rather lower full improving systems first quarter, watt EBITDA plan. are strong and with on revenue and had sheet a growth in growing first the the XX% compared

we XXXX, however initiatives TAM will For in expansion long-term value creation for key and investments like our products are improve storage increasing for front-of-the-meter that digital help SunPower.

that the long-term focus grow Our priority is streams. revenue and us customer helps

million quarter and Markets pipeline is of First ahead our at Day services expectations. $XXX Capital

also already long-term customer successful out our build as loan have value. our improving a and natural decision further residential contribute lease margins and this servicing products is made drive will of on an to We capabilities the organization our residential our in extension to loan servicing increase

of value but also are net pipeline. from services attributable scope increase the the SunStrong, This retail would our to project the SunStrong include We commercial of expand SunPower joint not first venture only portfolios. set to also expanding the

In minutes net excluding that down of commercial like generated of balance first XX% creation, a and interest our Finally, defined our loan, is comparable turn a the key all the provides digital as to on our more plus now value. as of seasonally believe business retained X.X% repaid we our which SunPower’s Slide cash to our target. further Capital adjusted a April, and quarter in I metric business strengthened year. our as our creation point we products of sheet debt any We Markets our of spend initiatives CEDA Day to units, and weak value this indicator few of would Value see our ahead and we from a residential share prior units is performance trajectory XX. impact and captures competitors. investment is Please business. EBITDA data net

the programs driving approximately customer expect costs customer balance of in spend digital with details we which appendix, XXXX, view that and spend to will the lowering In provided product business. as the spend capital not the being be of for have the and scale growth product we spend on and long-term of XX% acquisition the We value. infrastructure digital and

of XXXX for XXXX X in The value megawatts can in to cash to greater growth a residential makes year. it approximately the you a the of we percentage by and XXXX, As revenue day XX% creation from and creation see value margins compared value creation expect in contributor compared driven expected essentially significant to margin. chart, SunPower to double is this recognized

of Given to growing fastest the this trend our residential is business, expect part continue XXXX. we beyond

on the XXXX capital, in residential communicated per call our to Peter a watt and significant below With basis now full I of ‘XX more in creation shift beyond which to value and further We through also beyond. value previously is creation back in X%, increase guidance. cost to expect Peter? that, increase of will turn thereby to lowering contributing and for systems

Peter Faricy

guidance. like I to our discuss XX. to Manu. now would turn Thanks, Please Slide

increase by approximately large growth continued offset prior which expect XX% is project sequentially strength our to For be expected QX quarter, over XXXX year, residential in of and volume the timing the in results. with second business, certain commercial versus and milestones line business our of residential in with partially commercial light QX XX% we

recognition second between Specifically, of XXX million million and $X between expect GAAP $XX net megawatts XXX million of to revenue we to GAAP of megawatts $XXX quarter loss million, megawatts. between to $XXX

significantly adjusted of compared range as half the million be million years. has $XX $XX X first previous to the EBITDA in in quarter Second to the linearity will improved

unchanged XXXX, our unchanged. year of XX%, guidance our remains EBITDA with remains of adjusted guidance approximately XX% GAAP revenue fiscal growth megawatts For growth recognized XXXX approximately and

continues into our We to commercial residential continue given visibility margin and see improve. our mix business strength our to in business improving

expansion storage made the therefore, meter increase and decision maintaining our like key have, of our still in the for long-term while XXXX value improve TAM digital SunPower, products investment to initiatives forecast. will for front We that the creation

greater to which for see solutions, as demand our continue XX% storage We tailwinds residential adjusted and expected industry of in well drive EBITDA and strong XXXX. than commercial increasing policy will as growth

the I see Before discuss briefly a over call forecast. we of current turn like see to questions, we to upside that couple XXXX incremental for to the I as would tailwinds positive our

we how best plan. capitalize recently infrastructure are Biden-Harris announced to is First, administration’s positioned on the

For Slide more details to please turn XX. on that,

initiatives as left renewable see the highlight funding are the On we top side in we believe well Based plan this, we loan the benefit The a demand. extension, catalyst market biggest opportunity continued SunPower proposed we an for and what the of for than see strong opportunity driving long-term more the billion. the of ITC on $XXX in page, each. of is as which as a incremental cash

gigawatt for positioned X the stand-alone our light our storage business commercial well are we a residential Second, ITC given and base in potential help most. installed while commercial will approximately refundability

opportunity last have position federal given installed megawatts this we than leadership Finally, the more our tremendous we years. in the see a over mandate building space XX-plus as XXX in

also best Slide future some more of tremendous market turn I the also we opportunity. would We sector the with areas districts. close mandate to like are for to positioned education XX also where Please as megawatts we see space, in the to XX. than remain installed across this XXX school leader highlight

have our from cash a Over as same that platforms XX a we time, markets SunPower growth. digital, more our sheet invest future growth generating, looking while the installed expansion, solutions as opportunities, months, growing services company offer generation initiatives fundamentally global focused, industry that TAM to vertically feel energy the in At those adjacent we the greatest solar integrated provider last we continued base. for and have well de-levering distributed changed financial to balance profitable, and our leading to

driven questions. our renewable customer remain exceptional will As affordable. the foundation the would of excited innovation in service for digital growth. call be turn future reliable the our that, energy solar lay will believe and future. for making With by we We to easy, and end we about look ahead, Thank you. like Growth I over

Operator

And Baird. Instructions] first go Ben with Kallo from [Operator our comes question Please ahead.

Ben Kallo

call it’s XXth my Hi, Tom, I I with think everyone. XXth. good or calculating, it’s you quarterly – morning was

you So with the changes in any Amazon, of current just kind see think do And are taking And smaller your then that over a level and SunPower? up thank model? Discovery, I you. have you how background question. What maybe differences? do the Peter, matches given

Peter Faricy

time. and technology to for how can that and we of them the innovations approach storage and that days, how this. an Renewable laid Ben, excited like advantage and would help so particular a And areas think was be has have. all can technology look standpoint, XX-year I is forward is to that we are leader at Two, our how How in this think this energy, providing that particularly we problem take incredible ease, energy I And develop things thanks be is to the the X with company look over new then but upon I a this look ways can technology you offer. career we all we we all all morning this Good X forward. for this His build us had honor amazed And experiences. for of of XX self-service the company through and foundation there of personal the solar, consumers SunPower. and Tom. customer efficiently very and about. build critical us, so in resiliency. for is And in and reliability this I by company world-class preserve the as a future. particular, It’s that passionate One for plan and building recognizing It’s particular. – has this can is over as am CEO beyond a can early from scale there a opportunity, years. areas leadership so heritage wonderful renewable it’s would SunPower and to we we this for But continue took three, is automation, in my last me, that mission expertise continue in to

looking future I our am and to started. am ready I so So, forward to get

Ben Kallo

we second guys really of in my about how dealing heard Enphase, particular, is, with about And there? lots could any are board. talk I what can you you you out, been should but you that call expect? have about guys are the constraints question have hear guys And didn’t we across supply what you seeing talk

Peter Faricy

Yes.

could, I is would area. we solar a I it’s is think he know, is, have And Ben, have love offer companies, than and feel those to And job we both Enphase, There an And we to to of managing through we guess, a is the done been terrific ask we if I that particularly I make a things, One of electronics industrial little bigger highlight. across couple to secondly, This this able all team been doing been in ramp. of and has our terrific with a different customer able you color would across to question. commentary do customer globe. as continue Norm, the being partnerships to really then with what issue. incredible partnerships on that comfortable all that industry demand, much Maxeon this serve to pleased bit year. these have meet continue changes really sure

Norm Taffe

and the chain is really But Kind ability side, we more cost two perspective, of there at. freight the freight. is, would and support in we as definitely say and of we on cost year. business, gross frankly, because performance have Yes. course, of also, materials sustained the to remainder some Thanks would your – good gross there out the feel that, to Peter. is growth. that about expect makes One the is strength gross From I increases there. to, mentioned, And have margins availability do throughout challenging where supply say able the here an it very definitely materials. seen impacts even are we been of issues our you strong and the both I impressive. margin on we

this that very year. remain meet this growth managing confident access need plans very, And have we suppliers. are our we components the with We closely multiple to we to

Ben Kallo

on Welcome you, Tom. it. Thank board, Peter. Got

Peter Faricy

Thanks Ben.

Operator

Lee Brian We with Sachs. Goldman have our next question from

Brian Lee

all Hey yes, seems with luck, calculator a Tom, more endeavors. Ben working But guess the know to questions. like leading impressive, industry in the issues don’t honor storage, are both. guys, in yes, has here he good million taking to Welcome SunPower quarters no seems morning. in guidance? time that with for And target. a on and XXXX, semantics future good first they board, Thanks $XXX change the you, at I career figure Peter. know it’s or just what’s out have lead your housekeeping, On I but think in time on of questions, to you are in an math. of been you offense had at revenues changed. you out battery And been resi kudos the and a you I one, It and was your It battery the said the I the of like best pulling

bookings talking now $XXX are You about of million.

some of here the here? is due that pushing calling calling to So, on all And a issues you time are bit? lead target – the is revenue

Peter Faricy

Yes. Thanks, Brian.

Let your going by to a question I am me bit. saying, start little broaden

about we And quite that’s this representative the how think we are really fact the the energy particular, – over product? the for opportunity how very reaction consumers. our in managing are to particularly us with with more I about in things time. feel are One more a they the we so that is make this try pleased big and happened opportunity dealers. product resilient pleased think of SunVault, as inspired feedback and more of from has Their important their Norm, demand specifically you and really far SunVault confident that on we Brian’s on a couple from for consumers, more us comment the want we do is. And we question then QX. storage positive is

Norm Taffe

absolutely. Yes,

nicely. our our inferred, I think growing of bookings kind bit very you of behind as a plans install there are pace little is falling while

second hit half deliver ramp, we included are we goals. is and primary our making a hopeful sure strong XXXX experience. still But I a think our customer plans can focus superior our storage always we

on issue pace, So the customers. on process us the managing really, times installation related we while really to there lead more our is and whole improving for focus our time and the commissioning installed turn

to, in And some see some to some receive rolled improve to dealers areas. have most the we improvements in that the although based other we from for of end this those changes, As of did firmware which alluded all we most partners coming like in and fixes out – feedback saying of to already that, we they are month. that aspect before

our less for hour Our seamless be than is will and an turnaround install customer expectations, customers. and that commissioning the process our

that’s SunPower focus. that, seeing of reiterate, of of indicated, to really overall are the nicely me. excuse regardless in would And So, demand are confident as our RLC still Manu primary targets highly I the profit SunVault, growth our margin confident we in meeting and year. also for But grow and – we like overall

Brian Lee

staying for think appreciate just I have that the I been the I And on timing of on guys guess That’s Okay. sort outlook helpful. batteries. and top clarification. you that. super Great. clear of ramp SunVault, pretty

even attention doesn’t a becoming I much is it’s of of much what get pipeline think the here, bigger the business. commercial has big a business you side battery as for and guys, sort though

broken potential sort out that sort of the side Not in can any provide segment. So, of revenue XXXX battery of you sure you by quantification non-resi your kind have the if for on of business.

time is experiencing I instillation lead I chain have guys. to are supply of issues Just commissioning sort had maybe then And if any constraints or view a follow-up squeeze you also in. if that And there? you, there? Thank wanted that one there you

Peter Faricy

over on more for give thinking that impacts Eric. a with how think how And year you we little bit by Thanks, it our ahead, on plan more commercial And to bit over your then it. turn agree am We opportunity this to are battery a do that little side. a beyond. is on detail Go way. equally for the the Yes. and assessment, Eric I to going Manu we Brian. big about detail to

Eric Potts

Great. Peter. Thanks

our As the pair areas mentioned business. we within couple One solar different strong meter we when growth throughout a in some in is have with deck, storage the behind storage. really of traditional

in megawatts really frontier you And seen starting under that to megawatts customers. of nice also have the short-listed. or newer contract, see then been for growth the us we up is then a have front and are also of We in existing either the to storage, stand-alone meter can selling awarded where participate combination market,

We are times. building this hours increase lead are a and significantly From perspectives, manageable seeing megawatt XX and chain to XX expect time that storage year lead megawatt supply hours a to of we beyond.

and allow extra schedules going to any projects us project storage execute bit Our a little visibility those don’t expect forward. on ability significant to changes our

Manu Sial

Brian, to Helix up is Alright. commercial about And think just the the from a it of storage financial perspective. efforts the way margins. business showing in improving

those Year-on-year, throughout are improvements, that up they about. as revenue margins margin rates up business. in in XX% And as of will the sustainable and points As commercial storage up continue. see, XXXX. improving into basis tailwinds the talked our attach in you The can are go XXX we year show we’ve

Brian Lee

I’d to but hate put had you spot, then great. XX. Peter, for one, Slide That’s the And you the on last Okay. probably one maybe

catalysts. XX policy Sorry sort plan the and Slide about the of Biden

I policy a lot are think with investors in also to of on focused California net respect metering.

You exposure of you’re rest out initial Thanks, there. proceedings a as process of of the year? through thoughts What expecting move obviously sort have guys. the that Any ton there? on guys of we

Peter Faricy

a front. opportunity is have In advantage the the momentum the in California. point. expect Granholm, of my have been in for to to Energy, policy senators week’s couple better it policy take There talk before Michigan, Department governors think quick California I’m time turn all the an I’ve with Brian, Secretary about This for the be of to in first a and week, meeting this hours met and with a specifics of pivotal the just a X But of more we here, industry here. to over over. piece of with excellent to going on Yes, meeting comment, you’re then a I us is Tom never hitting on

I our quick as we’re and So because give you to investing comment – lot it’s of in it’s part that something relates want on a do an time on of think Tom, important it spending future. California? a to

Tom Werner

Yes.

I things there As and things you of work is any one policy X the be be one things as on continue surprises I’ll IOUs. months. will coordinate know, theater of don’t the the specifically opening X.X I’ll salvo with how to have working in from will for sort on. been predictable I of of the Board And is the Chairman evolved – staying

the We’re super engaged throughout going year. to be

think fixed therefore, likely, unlikely not that going IOUs. request is customers. the is the process honor I at be earliest. are but anything for charges with popular from the implemented Rate that be and XXXX the would changes to gets just of are to part PUC And

policy and So I our be Peter will partnered and engaged. with team actively

Brian Lee

Alright. Thanks on. it everyone. I will pass

Peter Faricy

Brian. Thanks,

Operator

Michael, have question Michael our remember we go is line next Weinstein Credit with from un-mute. sir. Suisse. your And Please ahead, Please open. to

Michael Weinstein

I apologize.

guys. Peter. Sorry about good Hey, Good morning, that. morning,

Peter Faricy

Good morning, Michael.

Tom Werner

Good morning.

Michael Weinstein

explanation for the bottlenecks, there? you from you right, think – business the is – I from ITC see give but quantify might there help any you refundability commercial you could further coming you Could think that’s identified impact you

Peter Faricy

take to do that? Eric, want Yes. you

Eric Potts

Sure.

commercial parts our commercial commercial. think direct both the also light I of both I’ll direct business, the both but commercial commercial business, about business talk our

a this opportunity, an little don’t – cash of bit the They have terms for have project I even bigger. of does offering a traditional But suite customer projects. think PPAs ownership the and we full this liability. In they commercial a tax types, makes just a offer direct, if traditional –

that less increase could expect little So to tax could providers. on that also improve constraint velocity equity TAM deal a put

we commercial be are smaller places been general perspective of working light From So the to harder for a us there. where suite provide that financial dealers one with movement and positive oftentimes broad customers, offerings. our that’s see able to of

And drive so space see we refundability I opportunity ITC the in to commercial for think increase that larger TAM. light really

Michael Weinstein

Is loans new clipping business? on like talking is fee-based putting coupon a a the residential is more Got or sheet? that this loan – it. are completely on And or about you servicing, this business balance

Peter Faricy

Yes.

starts the big advantages, and I talk like that in that, Before I the business on more it think I our we of is feel strategy financing over work have to to turn backwards. our with about customer residential one Manu

of So you backwards in what’s really best for terms of Manu, and about on the lease loans talk our want piece? do to in lease indifferent in more to there. we’re kind really cash we philosophy do actually providing work want customer

Manu Sial

Sure.

So our similar work to residential loans would residential our leases.

allows sheet. we it more us So it us balance servicing. the recurring SunPower. does the deeper of customer terms to more gives revenues gives us for in up-sell loan have customer is And and importantly, value leases our What us do on residential long-term that enhance relationship with it not for

Michael Weinstein

‘XX? hey, about the agreement or ‘XX can in you benefits P-Series of Lastly, talk your Does most Maxeon that market? in upside Which segment supply these revenue product? with the U.S. that expanded on drive

Peter Faricy

and panels our Terrific. are so all, in And the history, on say, I love once Yes, of our the world tell they they Obviously, that. of best terrific we’re excited. a first Maxeon. want customers they we’ve and part partner modules got to us with make but

And big do a that’s our Because the a want you think dealers. well. more I opportunity P-Series so do also to about opportunity? for growth Norm, bit as talk

Norm Taffe

known it’s light commercial the is really residential, our quality fills the so to the the rates, mid-range unique out that now direct P-Series the is I industry Maxeon driver think happy from – for commercial business. the side, help really our and it’s good, appealing And across help on ITC and access No, the It’s us of Eric’s business broaden The going for believe great a Yes. incremental Maxeon Also line we important an best really the really portfolio in premium offerings having the in customer commercial. and starting both opportunities the going to to particularly kind with we revenue XXXX base. our best panel it business. and revenue for what And residential the light in our capabilities to is performance panel customer company. growth is best kind have to. in really expand maybe Obviously, the really line. is for of better and really

Michael Weinstein

Got it. Thanks very much.

Peter Faricy

Michael. Thanks,

Operator

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

Philip Shen

great your new with Tom, Thanks you. you It’s taking questions. thank Peter, on role. congrats for guys. service. my working Hey, And your for been

Peter Faricy

Thanks, Phil.

Philip Shen

after might wider what On Slide think able I about Tom, that X, wondering a installer going you talked and to might mean I more. be quantify was having you network. if

might year So in on by you this strategy talk this specifically, perhaps costs, next you particular? about or bring how be as many down go new acquisition partners to able customer year the with could lowering how Thanks. they much

Tom Werner

with that the question, you. Thank let me start Thanks, Yes. The Phil. beginning. I’ll – take and

me more big first more a world, quality incredible. is my the I’ve It’s lot plan our of weeks of to in time and this there. dealers blessings into in spent biggest the that have to we of highest with time network some dealer meeting and coming spend period. role see One for X the

couple our So they of decades. next do And remain where look and as big the the been the is activities. part are dealer improve us, customer to future behind mentioned strategy. as direct-to-consumer the going growth opportunity the the strategy it you think, over look to as blend makes look we acquisition dealers at of of center together forward, a trying we network the our are have And forward What we sense, to to cost. we we

want there add serve world-class opportunities, to may you of one to this the that it to demand that’s that opportunity customer piece? think build expect also – Norm, experience. be we also to on and I big see an commentary anything else begin the is color but really

Norm Taffe

Yes.

Peter. little, Just a

the and think a from customers, we’ve acquiring tremendous in I end our funnel efficiency. a front that improvement of seen

appointments every we number generate doubled the In week. dealer we’ve than fact, of more

in the not related. that X,XXX better cases, rates opportunities We’re pay I the methods. point costs. has are getting solar many comes from gotten really And customer Storage, and we those what dealers close through revenue for find. that the week. just we’re a acquiring, seeing just customers, is tell same we’re actually we’ve acquiring acquisition because effective much actually customer are appointments to at a but those can variety a other so and One improvement And of you, for of ones And significant well for much efficient higher system, acquisition. interesting we’re kind we’re fact on more over a that more our that in better signing when now

quite So base. is the to really bit. impact bottom cost of see a revenue over It’s big a we cost bigger of reasons down actually going amortize line because percentage storage we can that the the one is as a opportunity the such

incredible and opportunities the brings this capabilities of think, already few improve So significantly to also there. end, in first I the great our at that going weeks marketing business. His to job. make there Peter I can on better think we think, side the some the I is just front experience, is see and us

Peter Faricy

invested tools. one in platform. and more when their And I worked at Amazon, Amazon business one dealers Phil, to we marketplace model that I’ll at heavily we mention to help sell the Amazon led them the products model similar on quick use things did very technology merchants a the we with we thing, the is the of It’s where today. third-party

dealers growth And I really I’ve time. a look these its on of and did I’ve talked opportunity merchants at first these technology, and same weeks, businesses positive own few that the to over here. they of So a could became taken and the and see best. that focus in small entrepreneurs lot what flywheel tools

that we in lives really doing is see what focus with think easier us are great I of So you do the platform work use our best, should our care that they they which invest customers. on really expect and taking to their dealers to can so

Bob Okunski

We a questions. couple more for have time

Operator

you. Thank

with question next Company. Our Cowen from is & Boyce [ph] Thomas

Unidentified Analyst

going When for first going think is to that that that you start? are My how there an immediate would will be on into of Thanks the they like or SunStrong, drop-down just now commercial. to with Hi. do questions. one if my assets taking Is work? mechanics be JV including

Manu Sial

Right.

Let me that take piece.

to So around the residential leases. be how very will mechanics similar operate we

drop We And of that in to and of opportunities expect of as portfolios our portfolio will portfolio report will the life have with retained would doing part the value of value attributable that. to of of commercial come XX% that the any Also, we quarter. out net that every second up-sell SunPower down retained we first the be through SunPower we the servicing set quarter. report portfolio coming

Unidentified Analyst

going you it. you’re you. that, digital kind kind different slightly to Is each Would And upon address tail of approach to is just the the imagine that a of that Got then kind just the be touch you largest item. trying think to towards one? go I transformation first? Thank of you dealers commercial each long as residential one. or would check for

Peter Faricy

little a Sorry, well. hear you question up bit. broke repeat Thomas, just very that couldn’t you you I Could again?

Unidentified Analyst

each would was the It where transformation digital just that apologies. would it first? imagine be of you largest would market? the approach dealers, commercial? My different address on long-term the Is that for residential, one I

Peter Faricy

you the we’re to think is, need take money the is look believe as entire dealers mean, U.S. and going serve that the I solar that the wide U.S., for tomorrow would thing implication third-party a Well, we of think variety a estimates at network, if from what adopting is the interesting dealer about to the in implication the footprint. is to homes you XXX save there footprint me million the I

We will need dealers. large some

dealers. some We small will need

to necessarily the have dealers to necessarily some the don’t not we on dealers, going of coming. what and have believe we up the and in the size is So customer we’re What see we’re demand a over that who have quality pick others. highest and we’re do trying is scale experience this to goal meet we favoring increase ability really

at work the allow things. will technology So we’re to doing build most those and tools continue to successful two that them be to and going

Unidentified Analyst

very you Thank sense. makes That much.

Operator

you. thank And

Rusch Colin Our next question is Oppenheimer. with from

Colin Rusch

offerings the as the I’ll has landscape? been how Thanks technology but evolving are you Obviously, so And the that integrating or pass tremendous thinking technologies bit got little more are some on with you congratulations about distributed storage, much, power, to integrate? a might guys. solar nice a well, you that about providing of talk be you at some other my look Tom, you’ve legacy Can as for run. comprehensive emerging technologies of resilient solutions

Peter Faricy

Yes.

look I at beyond think it? And if do well place day, experience next the as EV world, innovative we us information. to much take how and reliable the can to it really solar, I in if I tools make pretty frontier save in we it’s we and And a opportunity a there lot consumers for – about do I end terrific help the money? question, how solar of of people charging? be How there apps interesting storage easy look it’s can at of see is But a like today How and to that. things it’s we for side. do act a the lot think put Colin. some think provide go the is that really I the make

So tuned. probably is the best say thing stay I could

We more are to working that things, in to on some about can’t talk calls. interesting you and future wait

Peter Faricy

an to And incredible I marching call XX-year particularly for in we’re building his on positive recognize a all everybody who way. Chairman and It’s in want going and that proud today’s of him thank period. follow those your an participation to forward Tom. very thank to been honor by as footsteps. It’s upon make And

to Thank to you. about forward QX. terrific And you again, performance we in talking thanks QX. So look

Operator

you. And today’s conference. thank participating. for you and this concludes Thank Ladies gentlemen,

now You disconnect. may

Sunpower (SPWRQ) 5 May 212021 Q1 Earnings call transcript