SPWR - Earnings call transcript Q3 2021

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Operator

Good day and thank you for standing by. Welcome to the SunPower Corporation Third Quarter 2021 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] I would now like to hand the conference over to your speaker today, Michael Weinstein, Head of Investor Relations. ahead. go Please

Michael Weinstein

to earnings like to third our I call. welcome XXXX conference quarter would everyone

On we provide call growth CEO third the today, highlights, and of Peter comments quarter SunPower, Faricy, investment from plans. who our will discuss a of will summary strategic start with

Following Manu our to guidance. CFO, Sial, will third review our update Peter's financial provide results an comments, quarter as SunPower's then well as

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

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

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

Peter Faricy

welcome the call. first SunPower us of everyone. I'd Solar, for earnings like their Mike, take team now afternoon, moment Raven the to Thanks, members and and joining a newest public from Blue good

board all have of expand the market. very them continue into more across residential as are to We segments states and deeper to we excited presence our on

the best of providing Raven growing possible told I with you industry. the geographically our the important and company acquisition in as month, the towards view an customers last Blue As we step experience

with As four, investments our we a the world-class our sales through further and acquisition organization three, product few important expanding four financing expanding we this number customer a number options. on and offering; discuss across our minutes, growing two, experience; building footprint; will upgrading in customer are building XXXX:

the line you've with restructuring events business mostly offense we strategic are through on our our Over X. results have several Please our third to TAM. by customer SunVault number to to the us with footing. grow X past in XX% in I'm sheet on years, company strong healthiest With $XXX financial report vast, streamlined for residential turn bookings for were track quarter run few October been remain SunPower's update. going rate Slide million pleased a year, last major demand found and growth and we versus a changes. balance we untapped in and now across years, with year-end. Residential quarter our remains

for to tailwinds. consider As view due bookings for to for CIS continue we right this business, we options owner federal and robust business bright as the the our the prospects policy

the in interest from strong business of indications received outside have we multiple expected, As parties.

on update to expect year. the our you be able of process further to end the decision We before strategic

of Solar recent discussed geographic Raven beyond the As of annualized increased to California Blue our before, exposure we've XX% acquisition sales.

that to shareholder combination would a diversification continue enhance organic value. our beyond sales of We further with and target and XXXX goals through meaningful achieve initiatives growth

offer building in options, the product to customers also industry. customer our more and capabilities are We integrated best the offerings financial experience new

senior more key leader the newest team later made hires, we've on ends, members our executive in this these Towards presentation.

of service. program, of participate Energy's the think We and grid distributed as in Connected Communities the to that demonstration are value storage was solar will SunPower a to delighted announce we also which Department selected highlight

to underrepresented Slide support number initiative Finally, last communities, in minute. SunPower's turn on that more month, we solar are a to announce to X. XXxXX proud Please to

in customers growth Our versus with new fast last QX, XX% XX,XXX year. growing business core is residential added

backlog We of also generated XXX,XXX top-of-the-funnel number customers have XXXX double lead robust and XXXX. Solar. installed with another activity versus base adding total a quarter's month's acquisition record the generation worth brings of and XXX Xx megawatts, last backlog Raven before QX Blue residential the of from at the appointments customers This to almost XX,XXX of

with segment, their visibility We X,XXX provider also from new the quarter, solar Brothers, with with Toll the significant national states. including for in many luxury the multiyear contribution announced the XX,XXX We multifamily. added to more pipeline, opportunity California as terrific a other be to exclusive with agreement in homebuilder, towards home point towards as recently a customers expansion and in

nearly most preferred and on more residential quarter. remain the exit national than rate sales, storage conversion sequentially track XX industry's ranked The is homebuilding by totaled continuing $X.XX mix component the full XX%, from and for be XXX regularly With the continues cost U.S. XX watt. partner to greater to additional residential and up We year-over-year. which a run installations higher-margin experienced the quarter Residential margin XXXX sales and increase division, being driven points XX% approximately a for to over added. lower system for per at the than of SunPower and of capital with solar agreements and was basis basis respected of top the points gross regional homebuilders

territory Number priorities, the quarter. grow investing we Among market dealers sales in and X. SunPower nearly our sales more channels are on We of our The We rate up three and exited year-end. highest dealers ramp also where XXX rate number across for make by quarter, turn bookings continue – and added terrific our Please to of We're in at $XXX committed this new Slide one, to saw the direct progress QX and doing run and hiring segments. sales we we're $XX XX% an to direct nearly run dealers a in sales. this million XXX continue rate to remain attach million track SunVault. bookings business ways. of with

disclosed system, Our existing We're introducing an can residential a increased This Toll and management to in all also both of focused equipment acquisition includes than as of helped within growth we energy Blue consulting comprehensive overlap solar SunPower geographic and that Solar SunVault product to number Equinox on Wallbox of homebuilder, sales, last Raven from home platforms, sales our additional to configured offerings. Company, Two complement agreement mentioned energy channel footprint storage growth solar states to more month The million outside incremental finally, online including The sales and network. direct XX% XX will their agreement, with newest I ago, options. a new in Last full proceeds minimal profile announced dealer and community, with higher charger month, including annualized Holdings plan X. boost with Slide penetration, sales with sale Please we redeploy $XX that gross Brothers California across system. lead into storage New continue of also working margin. investments and XX to our our of the be Home homes earlier, opportunities. turn more to an include back the EV investigate Enphase weeks we our

a us developing and three previewing both we're lenders of a and directly are customer than cost-effective wider categories Loans array one, much for more investment. system third-party we be rather the of will with component Number originated sales. comprehensive financing Here, of and through balance handled major and by options app, reduction friction to click-through we unified continue XX% in be would in processing reduce of the intend applications eventually through sheet. leases off MySunPower payment a kept time. XX% Loan where our to servicing loan reduction

are as use and the We're in We to EV new larger our planning storage. features mass a standard along well. product yet studies market segment. capabilities. panels also of to on cost, also systems solar EV will and on approximately battery go of that with products market purchasers shown low home XX% system such introducing finally, ultimately Furthermore, And buy for development to have as offering share a TAM Wallbox capture as the XX% solar charger battery that targeted increased add high-value high-efficiency, more investing more

So in important a generation. sales, lead value addition as equipment solar to potentially by of the generated EV charging direct we view the method

which experience investing customer we're customer and view ultimately customer loyalty service drive best-in-class and and improve as for trust lower I foundation the the support, Finally, to time. acquisition through over costs

XX, that to We indicator brands are belongs the over Scores in an most loved consumer Promoter and world. Net targeting the best companies

support and good with more team for so storage are vendor Sunrun, also Co-Head from the programs. Officer product and seven Coleman to Global on Slide design up and of Jason in innovations leads Nate. back, Amazon us EVP we career, he executive recently, leader, Capital worldwide I'll me worked he road process to to Solutions. alum of on very She's funding board digital he's have Chief effort of X. use our we Credit at all seven Amazon comes Nuala, America moment and as fellow Nate you was and Overall, Jason teams customer of number Jason MySunPower the alum Group, as that map news, much SunPower new teams. for Director new team. spent electrification the from to announce He's tech from care We residential organization turn two, Morgan who transform more Web customer for have very world-class products headed where experience to to Communities General Department I premier is energy the our sales friction holding of services these as SunPower She Day to number back to in of of Nuala more discuss financing, Science. is to comes with she Officer. in to Bank are into customer in his Product the Nate chosen pleased of Services, also grid on Global Most Continuing Business make before the services Director possible. Wayfair our QX solar, Manager the leading SVP, new Nate And XXXX. where us solar Head world-class for the three, much our to a he where application the Data years customer our over are financial turn are leading Products, we I'm we Senior and than Welcome everything of Lending leader. for been with residential when happen, creation and at that, Please planning solar Research. has a as led introductions and Nate We finally, Please members joined the welcome removing dealers the where MacRae, Amazon, is demonstration earlier as create that industry. years she he plan own family. also start participate newest solutions. Care fortunate Connected categories her Murphy at Analyst and was financing detail the our was option we development with Nate from product Amazon to of Number and Chief was Financial a to SunPower project. Customer Stanley critical of Contact. with To comes He Nuala from to a Products to to let Slide years. Investment us Energy's Jason Research X. Advanced But that a take and the these of introduce grateful was for will also care welcoming XX where operation. support team. Customer an number

our goals communities live to historically workforce extend diverse our are for customer a benefits very of ensure underrepresented Equity $XXX worth with the to to to In California people network sOnto more targeting world-class micro-grid underrepresented that XX% is Schneider extended initiative, turn SunPower We of per bringing of communities, are much benefits provision September, This see dealers the XXxXX no-interest as Diversity, XX. of residential KB initiative number Irvine, experience California we an of who SunPower roll solar communities new two part out all-electric and base. the low-cost energy and as each and than to application equally includes options proud buildup of Edison in year more XXX to customers newer and a the to subcontractors. diverse participating. loan of financing and our Southern home customer Ultimately, of to partnering successful with with the Inclusion homes the system to customer. service one grid our Electric low-income Please to a develop Justice to as plan University clean everyone. more were Home, we equipment Slide tiered announce

remarks, Before California. few a let I and NEM my close comments make me about

comes California decades, accelerating the led adoption. to solar For storage when it consumer has nation and battery

We our consumer are proud in being Governors headquartered in with solar XX-year particular, established Brown, Schwarzenegger doing state. San of leadership, and a history and this of mayor Newsom when as the starting of programs has worked of he for long having history Newsom, the Governor advocating and he business Francisco. served with supporting across

major more power lines Distributed wildfires stated However, part the and consumers centralized state's centralized amounting California's are upon deploy on overhead curtailment part encourage systems system. a Large-scale reduction adopt proposed on businesses. subject major storage changes to solar and going a solution, rely more of step clearly goals up to solar energy are are that review less. of as electric the to not and of increase These the underground net be backwards, battery metering to Xx critical to the electric at-home expensive. transmission lines process for systems more solution the must are their resilient We utilities solution. carbon to would part consumers systems by are a and the risk attacks of homes be who only that and

the to and for top savings over solar I'd Utilities call With Manu right like Newsom priority bill to Our resiliency and to in expect to that said, the encourage storage. and decision priority of battery We expand and make it. accordance is benefits and Sial, distributed CFO the with turn Californians California Commission Governor Public that of share electricity SunPower. Manu? to

Manu Sial

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

million project our with chain schedule EBITDA costs. XXX% Our have the X, year-on-year higher in in adjusted line year. prior that growth delays by loss third XX% and Solutions and business million segment C&I October and adjusted with of C&I in light residential consolidated provided business behind growth supply labor $X for EBITDA at we update quarter We results and from of the that on with are commercial $XX.X driven saw SunPower Solutions revenues revenue includes primarily

commercial the exceptional of and platform third performance over While revenue core to is driven improvement an project our our XX%, residential business versus earnings important as a in points seeing last capital the by generation lead view mentioned and gross timing, as top-of-funnel and more are deal business. in allocating business, mix up In CIS in prior we service XXX activity light of increasingly growth call, residential quarter we a basis year. margin performance are

healthy rest from we with some model guidance and sequential growth. along XX and While approximately with line to helped of prior the dealer at gross our challenges in a affecting XXX with effect. industry, of the third that recognized XX% from quarter modest margins of we same XXX able generate us year. the residential, insulate up in performance labor our bookings megawatts, business drive much the partners, our megawatts relationships experienced high year-on-year We with And in were

sheet loan offers. including were opportunities capital us a for growth in is the next our monetize provides million the financing access Our balance that recourse strong down the significantly shares XX at have third of A net and finance still balance of the lower million unavailable level with lower debt than of healthiest to to investments to and $X.X to previously prior cost through asset us, ability $XXX at we Enphase months. year, sheet lease lower-cost with to our another quarter, and end new years, ability

capital CIS is million, for and separate GAAP of fourth on quarter. million. to million in we in quarter below and as We is business, negative quarter million, cash expect all $XX is and additional see and are segments, quarter for fourth million, The EBITDA provide Legacy enter investors, revenue segments the $XX decline quarter adjusted and many CIS Slide CIS CIS loans delays $XXX Legacy more is business, million guidance for $XXX generating to the quarter. of with to adjusted outlook. to the SunPower, breakeven $XX third million and X.X% continue and is for guidance impacts for Legacy leases our schedule negative throughout net turn supply cost industry excluding Fourth EBITDA grow to customer-driven, clarity focused fourth positive to of providing business to are forward $X Please which is income, and we pipeline discussion $XX quarter XXXX. to XXXX. the XX expects similarly to chain negative a that the fourth To Fourth and GAAP the for Separately, project $XX $XX operating business revenue million. $X including million million to sequentially experienced that to and broadly includes

the the million $XXX for the For to XXXX, business, EBITDA total guidance due full SunPower, delays. prior including CIS $XXX schedule Legacy below primarily is project CIS million, year of and adjusted

XXX XXXX with the As with evaluating expect call, in fourth in update margins the than sequential and residential XXXX customers in continues update quarter. new full margin we XXXX. XX,XXX $X.XX rate. run strategic to our for prior we options megawatts fourth process gross and to the and continue to to to SunPower's exiting watt be business recognized mentioned in growth a XX,XXX the in greater for expect we volume strong, Consistent quarter at Xth XXX also guidance, year residential are an business the and the expect of provide CIS October

XXXX residential expect Looking XXXX. volume us to tailwinds and strong demand above residential to growth ahead, policy year in XX% full further give compared confidence federal

be excluding the year of $XX expense. comments for Xth residential original the adjusted to the on EBITDA XXXX guidance investment before XX% earlier SunPower October update EBITDA digital million consistent million color growth call, to XXXX we and subtracting the supports Legacy We with and also made is that full CIS continue of business our product to expect above adjusted $XX

its framework the on value a comment its with turn to make call Build XX. Better to Please potential legislative this Q&A, making way we view SunPower. how turning brief Slide process Back here Before me let the to the week, through

turn as could residential purposes, to customer we that Section systems, the modest XX-year these For extension to growth. customer sales as benefit systems benefits residential customers better SunPower's we purchase size of period, add XXb credit much of tax of over credit effective the the expect our reducing enacted. that would or a illustrative and illustrative over refreshed of XXXX assuming of most XX% billion sales directly flow to questions. Whether the tax calculate prices raising value I at commensurate like selling for purchases XX% see company a rate investment to through growth $X purposes. them, potentially Since their support, annual pricing for the would that, program With call with increased to would ultimately to

Operator

[Operator Baird. first Instructions] line Kallo from Ben will from the come Our question of

Ben Kallo

or for for is the Thank was guys of you to more question of Thanks all? think is of about and sheet Or owning me questions. in is Or the you that? to them you'd how price if thanks why first industry around to balance continue sell stock and and just my do taking disclosures, that? think Peter, guys. your think I just and you simple? where how it the Hi, assets have you. about you And kind I make second kind that do something wondering, we that all, guess, your this shortened first

Peter Faricy

talk I'll disclosures. Ben. Manu Thanks, about our let little bit a

our I investors. it's to our great provide intent for think transparency

more I call. We there have didn't know could if see. lost the you on that Ben mention specifically So there's may anything don't you

So...

Ben Kallo

No, no, no.

different didn't glasses that like all five Just and – here. metric across there see to megawatts business, I be reading this of sheet the different pages and had but used here, supplementary I that get was parts my to out,

Manu Sial

Yes.

metric Relations Ben, are So we've definitions, both website, the on sheet. the Investor the under if go put those metric sheet I you to think so the

megawatts fact, actually you the things can added associated megawatts the like various disclosure we've the and in out and light done In where organized homes what with with new sheet breakouts consistent the past. we've commercial of see broken

that of is disclosure on all So, our there website. out

Operator

ahead. Go

Manu Sial

your wasn't then was Ben? second line very And Your clear. what, question

Ben Kallo

balance that think So the balance it you you ways selling about how and your about. with guys yourself where stock increasing stock sheet think or sheet and how the is by keeping other on

Peter Faricy

in Yes, about terms business, we Ben, to I you handle not exactly how I'm that. changes our loan sure we're understand if – question. making But your of no and lease think

to risk of will right at our we'll So to continue sheet, economics move off continue of point our the and share that sale. balance take the

as U.S. the back that business going quarter, you In But you commercial the considering invested us on I have the us I be in could residential terms short very strategic been how business. the the we where direction we're transitions. mentioned We'll for of guys those heavily transitions thinking be in forward, these residential to time. with of business focus think of out this to here expect And business. think is we come to many about are and the we a you about different heavily my forward, growing over, so and remarks have about relatively to of go of we're alternatives we're Well, on point amount a during report the in

being a with panels, from look worked million interacted continue save sold that to a homes power there's like adopting a panels have over panels down we're wants opportunity that today, smart it's So the we're their huge company EV a that XXX true relationship and that that by to – now storage, for one I chargers, consumers easy to solar And lifetime pivoting company sells towards time home on consumer. million company and double have homes us. it's only with I company and a think this X us to money headed it is to would agree for a If that. could little solar

we're to a enormous and optimistic got an of we've but company. the of the do, we've front opportunity in about us, work lot future So of very got

Ben Kallo

with one there Is as in all? sneak Because Thank know I'll wondering well. and the just guys how invented was Blue I conflict fits basically you maybe I Raven. you. at dealer just And network, that more a channel

Peter Faricy

fits No, perfectly. of – fits let in yes, the really it We for in first back all, It – Ben. me thanks question, up.

have a is success of best our They've what in We and we our believe big the here remain States. a been part United our the part they dealer big of will and network history, future.

So we have no our is changes on high the did dealer front. to Blue that a actually large, with purchase What satisfaction, managed footprint. company existing we customer Raven high-performing really complemented we dealer

if in a we Raven, underpenetrated North where and few to the United very took from went Carolina, of the Utah So they Blue middle have you and very take little all the they States, business. dealers out way look basically solar, at across

the So very question. it's Thanks them welcome strong for It's to accretive. and SunPower a all management the we're excited team, family. to very

Operator

of will next Morgan line from come the question from Our Sean Evercore.

You may begin.

Sean Morgan

guys. Hi,

Peter Faricy

Hi, Sean.

Sean Morgan

able at your interested base? do to that's would if kind customer I be some in of traditional maybe on programs of either bit you economics, guys you XX, state of levels just going that traditionally of that of of FICO looking agencies consistent there communities. on in comfort digging underrepresented existing state mix below to HUD or And kind Page So, federal not, Are margin back a you lower that with can your allow penetrate the with to market of little Are kind was in sort scores? those underrepresented potentially communities? the terms a or some in

Peter Faricy

Yes.

I first think thanks for question the – all, of here. the

the super work this. of on with actually we're to excited think Energy I Department

about and a loans very make through loan guarantees $X.X low-income fund know they've the of loan You program these to talked probably large for office, money of billion for consumers.

savings they you to the rather owners. from most to the than who consumers, They the So owners particularly it's renters. to want frankly benefit beneficial be be be energy And low-income end, renters. – in people don't want to want consumers, for will when to talk be

segment have years really the So us X in not a years. able of XX more an really participate for to we opportunity view may another market solar to as it ignite been for that or

we for of think it able going be as really So while. been participate a we're have in that able wouldn't segment to increase think a to demand to

So we're at with Investor forward program the talk very about and we look more in together our to excited. a QX to walking… lot Day the We're going put details of DOE

Sean Morgan

Okay. changing side. But of the bidirectional newer sort the And their And entirely? vehicle relationship. is I might it's with using do any, people product bit by power as rates a then to the storage? see that Wallbox just little guess, be gears the it's a there impacted separate a – risk I guess energy storage attach of car, electric that kind their product for Or you ancillary charging,

Peter Faricy

almost to At also X planet automotive backup, these of, view the the are also they OEMs can it Yes. down we're intriguing batteries I I opportunity your I think see because super as vehicles the end the of day, on although power them that want in think same to the a and right with OEM vehicle with discussions now, every as home don't a to complementary. And provide well. think in talks the in our whole way. you it's large so you

today So we're simplify to that customer software leg solar really going and power are I plus renewable these might valuable think to them what the for I complicated and out charger but bidirectional end consumers the And imagine, will nation your together. to there it's I an take who how up gotten that perspective like becoming to you that, working a from very the build I really do important unless more has consumers you got up can solar, reduce because combination that vehicle battery, and dependence think, around very SunVault – key offering easy. be of think I how upon with a The you be you this this as case, battery years see but really for and Amazon house their potentially experience in do for is an we've figuring things experiences anyone is plus makes way storage my easy. more experience doing do it's you energy, is potentially spent complicated, out feel very customer plus consumer. And the XX EV don't

quite we're our electric sold EVs with And in huge. Wallbox OEMs. We comments, opportunity So here as the about mentioned I is and we in the opportunity have XXXX. excited may X.X vehicle think million the

vehicles. the grid million If XX you should can't believe be by and frankly, XXXX support of the level electric projections that

we be So can EV the sales some to to achieve working, that if to able of that it's be and of get battery achieve U.S. climate level we in and really renewable have going storage only to going these be able those we're energy goals

Sean Morgan

That's pretty Much appreciated. illustrative. Peter. Thanks

Peter Faricy

Sean. Thanks,

Manu Sial

Sean. Thanks,

Operator

Our the Piper next Kashy Harrison Sandler. from question line of comes from

begin. may You

Kashy Harrison

Good taking afternoon you for and my everyone thank questions.

Peter Faricy

Kashy. Hi,

Kashy Harrison

Hi.

first the just me. a housekeeping in just associated with the many How So QX Blue one, acquisition? were quick megawatts Raven for question

Peter Faricy

Manu?

Manu Sial

single high say would digits. I Yes.

Kashy Harrison

using And quantify own me. for high digits. products And you. I I could to presentation, in if from there's loan single transitioning your and loan financial remarks, think, talked Okay, you about you the products. then using third-party the wondering impact that's us Peter, it from just that. help Thank prepared your slide in a there, was

Peter Faricy

and payment, who are the number reason the give consumers Yes. purchasing but I to take back the as options. business. Well, solar afford can't minute can't think, little worried at qualified so look solar bit context financial solar, they're financing up critical in let you consider get me the and and two from they all, up down products, end one are a a first When of number a not you they for worried they're the of research why

to we're We both feel achieve positioned help critical expect in issues. our the reason address products consumers that climate and board. on financial we U.S., of if it's the Jason So to by do goals a those that we brought business, like world-class MacRae best I that's building

financial in purchase is, you customers from products. will of of for this cash year a One total our product. presentation, we the guess, XX% So this about one a way, economics, it's rest couple in finance their The of third-party of as using or financial our terms it you. things solar either is I coming the think of talked

loan, I'll the the make We've products business, we are acquire to same the committed say, and least we a and that is at the economics economics new They're to we business acquisition as across to needle part goal get get being spread sure hardware every customer XX% on both customer. attractive. in lease XXXX. in the very have attractive for as XXX%. the just to until year in that to costs that they end of financial Our up move The

value think we of consumer, as being we a exclusively of don't as hardware. it only think about So lifetime

plan there loan that their we servicing incorporating who will believe and an loan loans and for leases also be in app. a We origination us financial and MySunPower partner, for opportunity on lease be to great people for need for and experience the really

big but So, a area to lot to a with us share going QX Analyst I'm we of our together this a more more when you is lot come forward. for Day, for excited focus get in here. so

Manu Sial

thing from per right now, we to and to in the margin X.X% is XX to basis helps $X.XX our capital that. the about I'd And cost reduction points is do product gross it, lowering what said Kashy, just Peter every have us watt. capital mention of owning we've Yes. cost financial our about only talked of $X.XX add us of

Kashy Harrison

you. helpful. That's Thank

Operator

the comes next of Goldman Lee from from Brian line question Sachs. Our

You may begin.

Brian Lee

ones. moving and XXXX. guidance-related Hi, There's a a I of sort pieces questions EBITDA guys. I'll taking number Thanks advance. for on guidance apologize the of mundane of maybe the in for couple have here more

could just So them little help guys us bit. if maybe a unpack you

guidance to included and since announced it $XXX you basically do any anything hadn't that the that strategically. CIS I the at So Legacy point, plans assume with million was midpoint. at prior

now So midpoint looks the and I excluding like look $XXX if CIS at your disclosure. million legacy,

sort So of really, apples-to-apples EBITDA looks we're on since what's million $XX the a the just sure like old $XX apples-to-apples Is on I and are make new is versus drag level Legacy on year. guide? the to correct? million setting guide that midpoint the CIS it want

Manu Sial

delta then the SunPower, CIS CIS. is And but Yes, XXX and driven to the Legacy, midpoint. XX, is it closer the excluding by is

Brian Lee

Okay.

sure So – wanted something. All I right. just to wasn't helpful. I all missing That's right. make

– as $XXX as underperformance? of Legacy outside $XX Raven, well originally? and incremental Blue help offset but does can go the how some the from not generally ballpark the the million with And like did the million right and – and apples-to-apples, there's Or have then that's $XX if it math, CIS sounds just expected million What's how P&D performing to CIS you then bridge? might it mentioned So Legacy disclosures also in is you all spend. you

Manu Sial

Yes.

The our of in the the guide consistent that, excluding all the quarter. in same, between from and is guidance. the by are the the have spending mentioned we Legacy. which some we we as guide of that business, prior is CIS with OpEx EBITDA And well, saying Blue as prior and slide we XXX the coming business are delta are rest What we some is that rest the therefore driven is is at the and fourth current to the prior – acquisition related utilizing Raven the the incremental midpoint. of guidance So

us is allows feel allows significantly good which trade-off that grow we XXXX, that what to in importantly, to More and it's XXXX do it a perspective. why is from us

Brian Lee

Okay. And one on, That's one more again, I'll pass just guidance. and last on the it helpful. and

the that incremental had is XXXX, for the grow something that $XX million So then is the to of $XXX is original million saying but framework to have which would you $XXX spend. million, which you'd prior intact, million midpoint $XXX going imply P&D XX%, like you're

in million EBITDA a we're so it talking comes we'll or sort million to $XXX of XXXX? reported sort the of And about to metric see actual $XXX of

Manu Sial

the about Yes, you're math thinking correctly. Brian,

business the perspective add of margin our One, little an color. me quarter the funnel as bit as a top residential well exceptional had perspective. third from a gross of Let

So we of with our margin. gross exited quarter third $X.XX

$X.XX expect exit of our at year to the We gross margin.

an in Enphase everyone remind the a million cash So activity then made from perspective us from making of comments to existing to top both update we on additional are gives for last the as well October proceeds, the we color, the the growth on million just our not confidence the And residential call flow. $XX is XXXX. of margin is operating book from funded $XX business funnel incremental as the

Brian Lee

enough. Thanks a on. fair I pass will Okay, it guys. lot

Peter Faricy

Brian. Thanks,

Operator

next Suisse. from from come the line Credit will question of Mandloi our And Maheep

Maheep, begin. may You line your open. is

mute, on right. If your please line your phone. unmute is All

the comes line question ROTH of next from Philip from Our Capital. Shen

begin. You may

Philip Shen

everyone. Thanks my for taking questions. Hi,

First standpoint one I is three there. little a then on through categories the more $XX million if of to a us might will. from of incremental breaking you how spend And does $XX that quarter, the the look might Q how wondering was be able XXXX, investment. be that Peter, groups. from split in million, thanks by a the give for you cadence between – perspective if out

Peter Faricy

Yes.

how investment bigger the areas in analyst of think Phil, we're cases, we'll But see and a an between give details scale some thinking up these investment of as does scale out an that will because larger. XXXX the as these business in or return that the And the buckets. in in say the think the about at bigger you I step building within From we're as in gets big making review gets going QX we're bigger see we perspective, business interested because more of to So time. years breakout investments all in over to that would something year. return even we're going terms we're three most

and expect experience become marketplace learned spending And customer, something grew measured of efficient this get lessons rate managing Amazon one very So to from for the more if big in my you to it small the see of would that large. to some like per something over very is that more time. you spending

make time. long thinking be about things to how have investments do that in scale really term you You over

hardware building, lower segment. company really do our of – for cost we're to I for more that and products. going a of XX years. thing to, Same I easily of XXXX. capital in That infrastructure building to software the So products, And the use lot in allow to going do for example, more positioned lot a continue will that for to is solar very joined interesting infrastructure and me the we're financial the at as we're out premium the point, in and thing next we'll and think financial of We the us one the software roll well products. some

Our products match well. up

best I at participant have We Investor share, we'll But on market now that growing in segment. mass and highest plan our segment and right again, we plans to think the and absolutely value there. that focused that love you mass the market actually products. out share And segment the Day is segment, enter our customers the are products market aggressive great an with the quality become

look more of I all but three investments the these So in details, about we're to forward sharing areas. very excited

Philip Shen

Peter. Thanks, Great.

quantify like how And it, you near-term a in that, ahead? any market the WROs yourselves What longer-term perhaps from on of business share how challenges guess, as you. way? Can I as those risks all and return as mass externally? insulate the potential types to Just APCDs in the a in and way in marketplace products, well about that on or follow-up new then might things be terms Thank that of happening you are with and that with thread, you help challenges mentioned able quantifying might return metrics you investments. that are you that – internally thinking

Peter Faricy

I'll Yes. take second first. the one

is at our continue on the to to in highest side product great leader a the but value. quality the be So vision products

the part the enter the as enter low-quality, So We're segment, is segment, to we market which positioned not we're the to segment. we're premium low-price segment. high-value of mass today the enter going in going high-quality, how into

SunPower them great a world's products, get the think the value. at best to and expect SunPower customers I expect they brand and

interested on in we're a sourcing So change. our perspective won't really perspective, not the taking from risk there sourcing front. any And

think China types areas tied those of to are over So labor, forced our changing no the sourcing as in of to about interest you have that regions. we

final Minnesota. and Alabama batteries and Mexico, in assembled Our Singapore, assembled panels in made in here the U.S. Malaysia today are final in

places and a customers. we footprint, are share in from of choose and new for the advantageous But a example which then – economically is have view, we industry, And for together software, that your example, our larger. we'll we'll think very, of topic relatively we'll So but scales is more business think that an gets stable metrics point our as get just global very efficiency we I an solar as something well Investor an larger Day. as

an software, you investment come. words, utilize decades you for that make software So in in decades and other to

make examples give to we that over investments Thanks we'll think and they'll we scale we're how forward looking in QX. and some time, for you sharing of and So the... with you together getting

Philip Shen

if one I more, may. Yes, thanks Great, Peter.

As you a splash relates Blue Raven. with guys acquisitions, it to made

along give you lose? And total quarter. how what to the them? see that count? as you could won how guys four in there Curious if net the relates do nice lines many did add maybe XXX a a expect to on to sustain. you And in of dealer it the think the we us those you more ahead, to importantly, then Maybe So you months bit within number dealers, dealers, a basis, had was or then something two similar maybe Looking year? next in near-term, Thanks. little on color the also, add

Peter Faricy

Yes.

my consumers difference personally career, factors tailwind. in could land just it on that make round something mean and there's XXX I So the to describe would opportunity. I three it's we I who a save kind ever here money as – would of on positive together. do come numbers, planet, talked seen grab about in and the up, residential the a a a as there's million the government those market haven't U.S.,

that So a with the your we lean on forward is Raven. sit the don't to forward. did you acquisition you going fact our And strategy reflect heels, in lean land Blue of grab, back

a ourselves and that hardware that fund describing products were opportunities front of Acquisitions of Obviously, we can attractive like also with us. We experience. we those I only one opportunities are we number financial have of opportunities. number are customer think ones products have a in the and of

But space that be to going we're acquisition no opportunities. a be will company there's organic it question of growing in lean here forward So residential combination and a fast. the both very and

population far this by dealer grown large positive has year. Our so margin a

fast between connected the us get best, here small do that a grow businesses and very chance because business, to directly exactly help to at best U.S. one our entrepreneurs build their of a allows them what for really when connection we're ran We're the work to really which make and going solar to dealers of experience in residential world-class our do that what them and I give they to those to Amazon, feel a they Marketplace money. really there's do nobody business and software installing a on think I for is do built lot software I talk them That's what the the pieces on is installation going else focus with dealers, we can customers business I match.

I'm our to aggressively presence So dealer able installed grow really forward to and looking in growing U.S. base being our here the

Philip Shen

Analyst everything well. Thanks, learning as We're Thanks. Peter. looking more at to the about forward Great. Day

Peter Faricy

Sounds great.

more questions We two for have time please.

Operator

Credit will question from come line the Suisse. Mandloi from Maheep of next Our

begin. may You

Maheep Mandloi

this now? Does Hi. work

Manu Sial

Maheep. Yes,

Maheep Mandloi

Thanks lot have but Perfect. hopefully, with a look to as challenges, and forward the deal Analyst well. don't IT that is in-person, to we so Day the

Peter Faricy

that mask. or Yes, to the on want to over a do wearing because we phone don't have count we it

So let's for moved in in-person have things hope the pandemic for along and sure.

question. go first Sorry, with your ahead

Maheep Mandloi

Yes. No.

anything with else and your near sales. sheet deployment What's sale how on share about next or the XXXX the strategy, either balance into here? going of Enphase with just think round that term? in or capital I think the CIS Like we should the M&A over

Peter Faricy

color. start in sheet time. But balance me Manu more either a long – let Well, our and has been in is healthiest then add ever long, the some I'll I'll this our let history

then you're and choose that the sheet. direction we capital we'll the balance add commercial shares, direction sale, that more we certainly in will But business. with Enphase and to take a strategic result even the cash if the would see to right, what before that's So choose

a outages a you are help we've there their in to save a great news When investments opportunity in very prevents large got to manage So front of money the and opportunity builds is, energy about exciting huge the is that this and make that in of consumers think way business. resiliency, list us.

a that's we certainly cash, on for ready what of want sitting something that things So moment again, I that other right to in not to would pursue the add specifics do. got about pursue right you wondering the But we now any We've say list Manu, it's be there? advance. because go color stay going more to we're And talk them. tuned not to to are

Manu Sial

sheet from couple ratios. are getting A investment-grade ratios to of think we our of things. have a One, I debt-to-EBITDA kind perspective, balance

from sheet opportunities capital And our view look, we've And from from a firepower we a terms a Peter have also a get I margin talked us said flexible the think, or more And So about. sheet both remarks. perspective. both point sheet from of financing I'll just that some perspective ability organically, from I my a down strength which investing point balance of of in prepared X.X% got a echo in to drive balance balance volume referred further lot the gives of what I our to is perspective then but to of cost great of and accretion also think view.

Maheep Mandloi

And quick it. a on follow-up here. just the Got then hardware strategy

the you're I subcontractors. of making battery least or side, you're on think why at except in-house for we're mostly technology-agnostic, it kind

which the interesting of kind other on over a outsource kind the to that for battery, you hardware, something is just or of you charger is EV any others module framework to So to it move here? continue want and

Peter Faricy

couple a of Well, Yes. things.

customer forever own the software committed and to I is that the think part we're the experience. layer

it of a be own be regardless of will sometimes choice our the through third and So technology, hardware will sometimes party. it

of We the more think properties were will hardware this forward look experience. and always in business, you are And becoming I and differentiation. software if these there's the to less layer customer control some mature

really the going think be going to in to layer. going software is I the forward see differentiation you're

experience So control we we end-to-end. the own make sure that and we want to customer

I lifetime consumers. idea to have think we with lifetime relationship our a value that want with that's this consistent also a and

for that important of leave ourselves quality, to for We want we is Probably best open decisions In the the there. piece, earlier. part us products named highest value terms I hardware exist. the the most only vision sell

to that's one it's we're that partner to I create this in or able partners, win I think the the customer many to going we're category. experience off, end, whether pull if going think in

So the get best third will best that's our time with kind is customer depend how of a criteria, where one and we product question or before the whether do in Thanks. whether close. work we of got can the part party, it value. for We've ourselves we

Operator

the last from Rusch of our will Oppenheimer. line And question be Colin from

begin. may You

Joe Beninati

Hi, guys. our Thanks taking Joe for on It's Colin. for questions.

Peter Faricy

Hi, John.

Joe Beninati

you're both are a you seeing you well for efforts on Can to in development speak recruiting perspective, have how what with on been talent? making to efforts effective installation market as incremental regards as teams those technology the and

Peter Faricy

it's a terrific Well, Yes. question.

read, challenging very installers. recruit market attritions all to is positions a software we've As like and it engineers,

in a into big this good the that I difference the making I mission. is having we're role And think success having good one of to the the the at able most positive far. role. powerful been so tie one of about working think we've about is success people we're reasons this company feel parts sentiment And

unique some kind do? most actually SunPower, of lot allowed appeal And work job. saying, purpose? have what's my for been not want So to time during success. of really of a that's I a history, a do kind does people at It's calling. this are just a stepping kind really where have of This able back meaning people good life and is and think to mission. to what us I mission a work a is in being to And

out about, the wonderful and hires companies spoke of Sachs recruited executive three there. Amazons the Goldman lot So a I that we against the and other amazing

end day, did here at else three these as how the as because everybody mission we the the land of So It's at passionate about SunPower. they're executives.

hard from question, pleased the I another work we're got XX, we've some I a of ahead XX seeing thanks recruiting but critical we're months initial think for us, results So with Big topic. think so standpoint, far. of the of

Joe Beninati

That's great.

Peter Faricy

number more wonderful. details Investor thanks earnings big out to to in-person future. wait in wait now be our on I then from more all and we'll And our my you me, to again our the getting ready finally a our your chance I my for of see go. questions to in-person. We can't next really month year, set a this tell have very we're looking get to and bright lot got of leaders is guys perspective, I'm can all details and Day. a have about team for quarter of your grow. you most into footing for That call found meet future. to continues about will February forward excitement seven you Thanks We've time. and this We our to you A importantly, can't fourth today.

Operator

And participating. you this concludes for today's conference call. Thank

You may now disconnect.

Sunpower (SPWRQ) 4 Nov 212021 Q3 Earnings call transcript