SPWR - Earnings call transcript Q4 2021

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Operator

Good day and thank you for standing by. Welcome to SunPower Corporation’s Fourth Quarter 2021 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your first speaker today to Mr. Mike Weinstein, Vice President of Investor Relations at SunPower Corporation. Thank you, sir.

begin. may You

Mike Weinstein

would quarter I welcome to everyone Good earnings like conference fourth XXXX call. our afternoon. to

On the a call Peter today, and discuss we will start for commitments of strategic accomplishments XXXX who our XXXX forward-looking Faricy, with SunPower, will of provide summary beyond. plan and CEO comments from

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

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

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

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

Peter Faricy

and good Mike everyone. Thanks, afternoon

are last our reporting quarter we month today, aware, are As we results reported fourth you in line results. and preliminary

#X. and strength in I underlying details, results strategic our for pillar. to for the the of each XXXX XXXX pillars, Slide turn business, and Please shares will review five Manu the progress plans Before

to largest continued backlog. last nearly quarter, record business, see led bookings strong increase year. For a XX% over our new XX% we the XX,XXX quarter, year-over-year in added lead ever the generation the with and in This quarter, representing top-of-funnel our XX,XXX customer customers to residential in growth

installed total at stood at XXX,XXX end. Our customer base year

sustain high. with point We product digital residential per record year increase the a Adjusted to continued investment margins XXX was above before at EBITDA a XX.X% versus quarter, and customer $X,XXX. basis gross for last XX%,

New higher as strongly a than continues segment Our Home than with more pipeline to XX% ago. record year XX,XXX enter grow a of XXXX, we customers

Finally, Sunbelt with bookings run-rate exited of XXXX $XXX over a million.

most we the to month, impacted to fourth As in in pressure industry some of the cost we due disclosed installation and economy, the last quarter rest we and Similar on availability announcement Omicron. and our delays some were preliminary experienced weather by chain company. world’s Despite challenges supply and home labor the we and strategic from are about plan our Slide our Please the to very short-term become future these to turn as our optimistic execute we pool. pandemic, energy #X. excited customer-centric

lifetime as know, a team ecosystem SunPower and to transforming well you on I are leadership behind a into solar of relationship customer the sale a are residential of the good focused we a moves that with the services to world strategies As class beyond quality system them. SunPower. as believe full products experience integrated create only initial company providing

approach our of on hiring focused the to discussions. Nuala Customers experienced building year team talented all rapidly entire I are last is pillars. leadership our on care. of Murphy Care, customer President Pillar we XXXX, a at After have customer improving of as in Vice So five and execute for #X service. been following center Customer strategic the

Our is guiding if is principle that customer a a defect. discovers that a problem

ever corporate increasing will do I exceed solution. brand. then with expect feedback our help issues we of component any before customers which product and proactively well to Ultimately, SunPower levels customer the development a quality, guide are We identify remains expectations a striving of for major their to our timely and

We hired solar our Field and Operations. is Quality Vice slow and battery Executive the systems Kuzak In and new Supply residential bureaucratic. install Chain for President process Derek as activate to also and recently solar today,

affordable process goal are the to is his of innovations Our installing deliver class make solar, to Derek fast, growth. enjoyable. and X Pillar experience. world customer easy, on focused and teams is

dealer a are We share the with platform. and our entire SunPower by market growing financial class world network digital product, supported

new new that we welcomed a expanded am network a high terrific off partnerships. launched with to SunPower we and In team I Blue and report Peterson homes well have are into and SunPower leading the Ben Raven and family. complementing the is featuring at channel growth SunPower direct Blue We going year. Raven products a October, business to start financial very this Blue Raven. pleased is process integration already the

Under from X a June’s affordable build to recently We June Sauvaget brand products. leadership, Pillar with efficient is Marketing Chief Officer. best us goal and process. a Brex cost guide also strategy. and brand and the our true comes and much hired acquisition as is Spotify our company’s June customer acquisition help more direct-to-consumer to customer will

and only of our entire their been to SunPower clean integrated system and with are for, are the and recognize providing of has array lifetime premium will nurture of We expanding energy We an known and and offerings use fully to a products. simple core. our include but value also that affordable products quality not savings money solar services an that we and customer designed reliable relationship ecosystem by at

digital hired X we Officer in innovation. our effort. know, you Products As November Chief already has Coleman as Nate Pillar and this Nate is accelerated

mySunPower control efficient push our to major more a app our process, Ellen will make buying innovation vision and the of President recently help for to digital ease strategy as Vice accelerate customer the to provide to hired use boost Ellen include adoption. Kinney buy Products. more increased upgrades To sales Digital Our our options of to Amazon. to on experience, solar a is book we it customers, for as as easy is innovation

world for new Pillar to Software recent of and most best-in-class will our customers pleased technology In hire, our X leader addition, who EVP Ram, Amazon Kumar Kumar dealers. we solutions from Technology. a world-class is build are announce class hired closings broader our Please recently a objectives with value. base, to drive to #X. faster contributing the lifetime higher customer financial customer Slide and We to turn is Jason sales while solutions. rates, MacRae

We have goals. achievement already strategic made strides towards of the our major

First, we before XXXX have in improving possible. made measurable customer issues and whenever correct to care proactively even our progress discover notice towards commitment customers with

the on equipment of issue connectors this philosophy. handling the reflects Our commercial recent

high Additionally, to improved into have obtain we issue than interactions greater required customer of by by double-digits. customer time reduced resolution basis resolution points the number and the XX% X,XXX

outside Raven presence firepower to or expands our significant Solar California states and network SunPower our share. a in dealership adds channel, direct low no Blue SunPower and especially Second, without

installations new continues framework for further expansion executed potential We grow. Brothers to of towards includes new exclusive announced California with from in market by pipeline an the our Toll grew base underrepresented of continue We to agreement our goal We last to year XXXX. and residential homes include nationally. Our provides new diversifying a home in customer XX% XXXX, work share that partnerships. which our XXxXX initiative historically communities in

points this are new various commitment, product we among at high-value proud We with of very other will price meet initiatives. which offerings

and interest with products expanded We to important customers eligibility help have rates added already for low new this market capture financial segment.

growing sales summer, with restarted product our Third, and on product SunVault bookings last of storage rapidly inventory. the we healthy side,

plant from virtual systems. of our solutions. that over connected We SunVault customers program payments control customer exchange to first also is residential enables degrees recently under interconnected utility a introduced power partial and offering our This receive their for

announce our us an to we platform could Suisse. off-balance interconnected. enhance of and well. both we the loan flow got in upgrades purchase Credit SunPower, sales forward that we bring highly customers have sheet of for our to They well expect customers our for in Thanks pleased lot as for electric into the very our real with solar this increasing as a to SunPower at investing right utilities a benefits Connect and entered and Fourth, the launched ability financing, tangible to team also we strong importantly, are Financial customer and value systems as mentioned, our the have was need affiliate in leaning quickly non-solar greatly leadership software and programs are our meaningfully. to help mySunPower of Most financial provide to a talent efforts agreement mission-driven customers to Home with app source dedicated I teams. year. distribution Fifth, distributed turn leadership done get place as to XXXX, storage a that for in growth. now provides Slide vehicles rooftop and to accelerate digital numbers we and more these we lot which XXXX, We new planned our design their expand partnership bring X. will as offset In support and Please team December, a

see several and to is making expect customer maintaining can relationships. lifetime premium meaningful for along is to believe including, first, customer support major creating to our and key that We customer upgrade You exceeding services. investments brand SunPower growing strategic progress expectations lines,

You initiative about updates our can this expect more at Day. Analyst

as Direct. expansion invest network the at in rapid especially our of SunPower outside dealer California our continued and country, we sales expand Second, throughout team

capture. storage beyond have to high-value, residential segment and the plan appeal new will introduce premium we that currently strong we panel Third, high-performance options that

Financial, XX% plan a solar a more we quicker coming you the explore our And our we investment also qualify to to never update improve at millions to at salespeople customers detailed XXXX. Day. the operational reiterating we financing that our sales we’ve while efficiency. to weeks As origination new This residential finally, in add months, path income world increase fee look change financing of our all to Fourth, It the captured. SunPower close in direct customers. a for faster. experience our dealers from our options helping XXXX are forward with and customer Analyst this you SunPower our previously on digital is of brings are product When providing up, making and and we in helps XX% for

we years The now mission, the planting come to passionate most about home as world’s fruit are getting seeds are just we customer-centric are bear We will for company. our and build we started. energy that

Before will can how my demand. the perspective, health. solar. panel I our I while existing agreement. over customer new exploring The pleased module reemphasizing like consumer supply ensure providers importantly, metric most and we strong comments the From strength of immediately. to the with our allow will important I’d the additional turn us for is serve products dealers am address Manu, new terms residential demand single call new close customers residential Most the demand by deal continue offering given I to contract to of our my

Diego. San I CFO focus an is forward you you of Analyst our our introducing serving on delighting to Manu leadership to XX Manu? that, on seeing Now look having and our over and to like the on SunPower. to plan team. Day turn in Sial, there With We I’d March call customers.

Manu Sial

turn to Thanks Slide Peter. X. Please

Our were results line for the our XX. quarter on pre-announcement January with in

We commercial of higher weather are previously connectors charge crack the sales and reporting $X for marketing It expense million charge which million in as the $X an includes negative with EBITDA, of as well also expected delays. incremental from impact disclosed includes million of the XXXX. first adjusted COVID-related million and million $XX quarter $X.X in equipment $X

higher the of revenue, healthy underlying a XX% XXXX, X.X higher shares unrestricted million with business. another reporting exited $XXX ago, sales. and year of versus strength year of sheet than and Enphase held cash We’re third of of our future We the balance quarter million XX% residential million by also with a driven $XXX for sequentially

with specifically, strong turn residential margins I’m of margins the to in reminder, of and the with Solar Raven nearly quarter X for gross team is to shares that Raven customer acquisition in smoothly. gross a Blue residential climb XX.Top XX.X%, and was happy a were greater fundamentals of of watt sole the that basis sale October points bookings with and As at very than pleased our the going prior enter XXX to exited XXXX X up integration to We backlog, company. Slide a we residential report XXXX the of appointments funded highest continue our report year-over-year. Enphase, business very Please the $X.XX high and million years, now the the record funnel I’m Blue of a

from C&I of optimistic about our to excited us, shares Please front in the we Solutions and back We execution plan. proceeds remain turn and very of of business the Enphase our committed Slide are sale strategic opportunity to into reinvesting the XX. the and

million. primarily $XXX million by to with EBITDA result assume customers. commercial customer a adjusted diversified our in It guidance driven of remaining a The more million than a to during of for Relative is XXXX, the a $XX XXXX light and we $XX to to based reduction of to versus approximately XXXX price supply agreement our The strong to midpoint as We growth accelerate Maxeon greater chain. impact million, $XX business the towards range on of with for year. coming transition. business off assumes are range limited volume $XX the our updated new supply XX% demand customer projection providing continues to XX,XXX offering shift exit XX,XXX the the increases guidance as color of is this and residential a prior the represents plan million

nearing product a transformation residential customer-focused OpEx is $X,XXX before and range renewables Our completion EBITDA business. of a $X,XXX projection customer for residential digital to customer calculates SunPower per of the investment. its to to adjusted per

now strategic and are growth our based a on a firmly of rapid long-term customers. offerings service basket path growing to We on products

will for customer rather I sale turn makes approach value also than be more we long-term sense guidance megawatts, based system. our Operator, such, more plan which over initial per think of As of most like adjusted customer. valuation With call and we EBITDA, is before metrics, by OpEx company for as and the to solar easily residential that, on customer a EBITDA digital accurately determined We would adjusted add provide and to an investment to going product the questions. customers that forward growth the these annual

Operator

the go Thank show Evercore. from [Operator of Please our Sean line you, Morgan Instructions] I question comes first from sir. ahead.

Sean Morgan

Hi, for my questions. guys. taking Thanks

the in NEM leaning So little on into acquisition you’re bit, Peter, of call, a the bit Raven light I little guys think that you maybe that’s Blue and mentioned X. a

be taking of I to from you’re company? portfolio you seeing what going of steps kind boost proactively obviously California, you’re sort historic core outside your to as base of the the that So away are of guess, diversifying growth that

Peter Faricy

Yes. Hi, Sean, thanks for question. the

absolutely You’re right.

Raven What’s in you first diversify growing looking the this growing California, interesting country. is year, take to are so We the in just very rate far, the the to the country weren’t, the spot actually expand growth fast was but particular the rest middle as at in and Raven of And strength that sweet the remember, of Blue sort in the country, right quarter fast we’re and Southeast. across company a of we Northeast and might continue the grow. in of look you Blue if will where we’re

you plans the both we more Day to Southeast. in you Analyst at and to going Analyst plan how But the to Raven our We’re about we in our Day. Northeast fill at about growth, accelerate also talk Blue will

we The is Battery think to other SunVault it’s interesting with not I’ll panels. take And thing just think, I quite how product. highlight pleased solar our off. I really year storage, started with is beginning the we’re

that consumer different driving parts the are conditions the weather and both are demand. extreme seeing people it’s outages and more the of power country of that more combination think I the in

high One share rate non-California was of And for in attach color of and is interesting just with channel attach year. California. our trending, is as XX% is in up the say, attach rate. our the XX%, we And mentioned you guys direct the rate let’s our it as is what’s last week. in last SunVault That’s to mid-XXs things as

across hear comments, base with that the the from our sales that pleased seeing, and So diversifying we’re as our we’re you sales we’re country. see can to extremely pleased so we’re all

Sean Morgan

And supply get hiccups guess, chain back been since online and bring previously. that had some brought of past, to the you’ve you I up interesting. That’s of you able Okay. that and SunVault sort

and with interesting of trends of SunVault their energy with of terms for car potential eventually picking sort on any looking you’re Now of the be in charging, you’re you home bidirectional Wallbox that pairing up? sort that Anything as part the are versus storage the that incorporate might EVs solutions. seeing rate to battery that people attach

Peter Faricy

Yes.

Sean, of new I we’ve seen, homebuilders. think, programs have a guys you couple announced with

this makes of their predict is this it time new year, the of affordable. will it think homeowners what EV plus And off will combination into plus kind package most probably with I fastest sense the channel get kind I of their would is the And take for which battery solar because new roll at to mortgage, So makes right solar that’s three done time. perfect very same all the homes.

Day, related up our storage to with some interesting our coming excited you Analyst plans are the power We on at battery plans share EV with and plants. to virtual side both also

to go lot there. more So a

coming that It’s SunVault backup. minute, in thing me is that, offering a think really I biggest the product home I house. storage partial a gets today, my have to for for we’re about excited back the product

take terrific. for think stronger seeing home But the we’re it’s look storage think demand if I at a I you backup. a market, a whole much

going about to March. the number products whole backup in so be talk at a And going believe home say, year that at the end our leads you we aggressive on we’re see could suffice to out be new side. we’re SunVault SunVault us plans, But of And and the category. of more to a to terrific this that rolling

Sean Morgan

Okay, Thanks that’s Peter. great.

Operator

our you. the Raymond from line Please Molchanov Thank from next comes of Pavel go James. show question ahead. I

Pavel Molchanov

how you your about of that December, Thanks a for that revenue you in initiative SunPower into mix? new I didn’t Can hear taking guidance. year’s about the discussion Financial, your unveiled this fits question. Last but lot talk

Peter Faricy

of the scale improve you more the and well exciting as build to out really total to building of both will XX% the us me customers can’t and loan dealers next going of the products lease number maybe building Day share our we’re up very is in big over lower detail from to for and And going to XX% Jason as laid the in for at Maybe with we’re has to goal we’re that’s Analyst products The to our wait business. you gets allow to that a that I is out a that financial thank us and financed is year. of Absolutely, scale very, question, then as exciting, guys systems financial really allowed capital proper you really hiring we larger for MacRae larger. cost business time. this Pavel. out The

that part So about we’re excited the quite of business.

think they money finance their making it’s customer not don’t to will solar, say year you reason And of say at rolling here when solar think customers solar at a accessible number the some think they from can’t with get they it, financing. they in the beyond, are payment. people they be core we only million XXX for get can financial make The number new two that reason down can afford get to can’t they customers excited they don’t helping going the to research, approved I about people products the take U.S. look out solar a share think one and we’re this is

very detail we’re more to come, on share lot end a to excited So that with at but of more March. detail you the

Pavel Molchanov

as are clarify, going other solar doing? you of the leases on to balance SunPower sheet rooftop and loans just national be a providers major are the So putting number to

Peter Faricy

No.

We on our are that not changing all. at strategy

cost share is to we of allow much don’t we which real the sheet, understanding by risk believe these lower us actually that to risk. we means the will off what a beginning and loan economics that we’re a we and plan servicing, to this would loans time. greater have of that But of year, do a much So the get to capital the take balance over better still leases do going move and

our you in no, detail. changing on will terms walk we strategy that So in we’re more But of what’s sheet. balance through not

Pavel Molchanov

clear enough. Okay, Thanks.

Peter Faricy

Thank you.

Operator

Please next Thank question our you. Brian of Sachs. line from I the show comes from ahead. Goldman Lee go

Manu Sial

Brian. Hi,

Brian Lee

one the understand solar some to of even is and afternoon. questions. the for for mix on guys. represent? per I solar-only rationale, break for selling guys. like customer but – Maybe products? Thanks $X,XXX, other a $X,XXX metrics, the only And your higher wanted out solar right? at the as that, $X,XXX Hi, given per then of I you just $X,XXX going is first going you end, So customer, range goalpost bit, be are first Hi, in kind changing, again, just on Good lot a – represents – adjusted new taking these EBITDA customer. the Thanks more customers SunVault of you’re services plus there little that you kind What a of one Is guess, acknowledged the to solar only? moving forward, dive bit? battery a the the more to customer than sort can

of blended at terms where follow-ups. basis out feel kind then on are because the give represent doesn’t a EBITDA I individual of being sense some us of your incremental in mix Just where customer range like kind of customers sourced And had of really an shakes maybe I economics? the your

Peter Faricy

Brian, it’s Peter. Hi, Yes.

you. thank So,

about forward. We give going the we that are as excited guidance we’re to go

measure direct-to-consumer residential things well-being you I growth, company. then get believe really customer Those of to the the do lifetime the on EBITDA maybe growth think a will customer. customers and and look like about something per to we I and the a are health value someday or at customer to think company per that’s two and when focused valuation

questions Let EBITDA and of me how answer thinking calculation on your about Manu couple been it. the have we’ve a

Manu Sial

in provided so the Hi, past. contextualize to giving. the three Brian, just customers number metrics a of We we’re

now better then going with we guided, that quarters. the only company what same that’s sense forward. couple focused I basis in are think what a it than And of ready just EBITDA we’ve customer as makes or megawatts, talked last and is much per metric the we as given the

on the assumption XXXX range third also to per solar year well. just who customer And of taking as had The question the depending a takes or said financing is end as what the is as say, high answer end a let’s reference range region then from from can of customer low regarding to we the SunPower. the the in metrics customer. total that the You is well it quarter solar EBITDA what the

to of time. EV, range that assumes basis plus last our EBITDA plus solar take as the of of them some customers And the and then some going financing. solar then So XX,XXX storage, are the plus to customers, same is customers at XX,XXX take

Brian Lee

spending helpful follow-up Okay, you in drag product maybe numbers context. have was guess, it’s EBITDA. the about If I as I or on million a that. off, to think that said to I of that’s or you said guess the may the last past I that in $XX I this on do but digital like your effort across it your sounds base, customer account, $XXX changes customer essential I Is over $XXX trying going as to initiatives? if to drag EBITDA those $XXX forward that spend time? per stripping from going drag million it that customer segment? is ongoing the to and and running those suppose, are what reason out from resi be pretty maybe be that because Just is spending constant a $XXX solar – to there to understand sorry EBITDA quarter that

Manu Sial

Yes.

spend that through have we financing third So fourth sold incremental in we what the that of quarter were XXXX. the $XX million quarter about of effectively was in we Enphase talked proceeds

tie to the Just comment back.

a SunPower perspective, the is it on half EBITDA up OpEx. then up shows customer per it whether of other – it’s from customer. The and about half spend on where up shows per think to of in a think digital calculation. way shows it I And the products the the

on watermark. per while growth continue basis, on that we some spend will as is we customer XXXX to going to off the out And the of high the be from is a spend of think years. tapering to a I go business ‘XX

Peter Faricy

Yes.

Amazon, is that investment – scale in software make over on spending scale I’d investments time are and pieces at I investing time of best of larger products a two once and from think build and kind larger the Brian them the over customer over add you that what time. base that that, my the investing in

A what gave previous and going to we XX of we’re what to this years products. the year financial So the need the I just build answer for of is example lot beyond. next on

number may million absolute it’s think $XX to shrink think time the and I over the possible a as will total, so But could over that I in time. terms. of that nicely increase begin scale And rate –

Manu Sial

Brian. Thanks

Brian Lee

I will guys. offline. it Thanks take

Operator

show Philip I you. Shen from line next Thank from Please ROTH ahead. Capital. comes question the of go

Philip Shen

my taking questions. for thanks Everyone,

First many is. from of customers, X,XXX strong roughly help year-over-year one on and Thanks. the outlook the with understand how Blue am then those am Blue XX% I Blue Raven, impact guesstimating ultimately what if just outlook us but is growth and growth you Raven, organic guessing ‘XX are I the can XX,XXX the Raven. curious of

Peter Faricy

Phil, we Blue don’t ballpark. out you the separately, break Raven in customers would are but say I

as will pretty that’s total think think close constantly it our do number which Direct I direct to what We the be. about channel, includes SunPower plus Raven. Blue

the with growth of profitability are channel. very the that pleased very, We and

color of Blue this became on of XX% get XX% total was let’s our business we business and that, some end of the the before our by will give to say, Raven, you that to XX% So, year, year.

more growing channel profitable our it also for total much a So, not only faster is business, that’s a but us. it’s lot than

the our as very, running very are acquisition we we It’s an far. as Raven my pleased company synergies mentioned terrific business. also Direct pleased, independent our as them Blue with with ability two been in quite both I between companies. And SunPower are so comments, the So, to and and also find

Philip Shen

and go-to-market for strategy? about And the Connect, can there you model more bit it Home what the a Thanks And to revenue color then talk the of Great. relates kind revenue Thanks. to is still as or to be see numbers? be could – ‘XX it it kind from ramping in smaller meaningful, margins of impact You we going or in ‘XX? expect Peter. to

Peter Faricy

want Yes. don’t to brought this. because Home Day, punch up spend can’t give our of a Phil. you sneak I lines It’s terrific you of the I previews. let a glad partnership. time Thanks Analyst with to am all guys on you for away I so wait couple give but me

talk getting the find Home of things the of first hardest all, is One is all thing a attractive. couple right. about that So, virtual customer experience, about really for the power plants, we there is

think you control idea wake your someone or and you control to let comfortable about going with. someone else are day most not that If something thermostat, storage up people that’s are that your else the battery every

with really And connect So, in to positive customer also, seen behavior been we that we influence company a the the have consumer the are ability very opinion, to then have talk demonstrated, way. about that. they energy that’s really are you able they going to our to energy first And in markets.

you about take made lot to the are residential when I So, energy, who VPP, bidding markets, has connection look residential talk these there is a a a and ahead. actions, think you guys if at actually between and energy way the will, but batteries, of direct

you comprehensive to going our more are but partnership a about partnership, a lot at very Day our big is Analyst one. and details We the give

We battery planning. lot are the of answer going be solar like we things To XXXX. and detail to a will be directly, seeds with and your And think really more storage. investments are their VPP I it last exclusive get into in I want question on to partner on our all don’t you material

are look material seeds the advantage that utilities distributed in to our will There a you it’s we this it And out, figure an of with early. think the us both does energy very The I I get if is money one I but we a really frankly, these mean build think I and a to that right. tell get work exciting, X-year and productively is attractive. economics new us we to part partner utilities. for I business. have become is for distribution having because took of the take they it’s you can plan, lot still a been opportunity a think plan X-year behavior, if be economics. hopefully Consumers consumer storage win-win-win of and save it, can to because the at from can looking for participate

with look of lot month. I going forward to all that a Thanks. deeper So, you on a about topic in

Philip Shen

last Great. I One one, may. if

have you any to of there real And the there? there how terms alternatives direction? deadlines near-term governed. be you want partnership, you a Enphase, things besides different terms Enphase In if What in do some are do go expect might of

Peter Faricy

together a So, we partnership Enphase QX have through we on agreement that of the XXXX. partnership, are

with agreement. are pleased that We

business have We we are usual relationship it’s as I with pleased and think for with XXXX. them, the

Philip Shen

here. Thanks pass Great. I for the all will taking on questions.

Peter Faricy

you, Phil. Okay. Thank

Operator

Thank you.

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

Kashy Harrison

questions. and afternoon Good taking the thank you for everybody

So, just if on in decision ITC comes changes. the potential if sensitivities on provide Slide you with you XX us some with could proposed addition, of the fruition? those ITC December maybe And was investor can indicated if some excludes help I us also you numbers of the the to wondering the deck, and outcome sensitivities so NEM changes? from guidance

Peter Faricy

Yes.

a me comment Let before Manu I – both. over on let for the to make turn just quick me sensitivities, it

as we going believe the I NEM to in think and I December, to did news that, initial think a negative California overreaction out that out the proven in the probably an was case. came that’s be in be market,

California to residents from solar that much enormous an favorable business much taken here more the As there of employees sure energy and place the and amount solar moderate and for solar more the the the customers and is employees. outcome California events make renewable energy since, have is

just outcome And ITC, that the on in would here similar much I before that in we over the then QX. the some I California be feel will in and outcome direction. think So, the initial cautiously reports will that have through a we goes Manu improved optimistic at sensitivities, we are tell you point an

few to legislation he that supports you that a clean comments have in seems support the Party about we Senate, a energy the Democratic want think and that across seen for get to of the do little be sensitivities talk to the and the I NEM Manu, cautiously There along that, months. Senator climate are next ITC Manchin bit lot optimistic on over you will moved provisions. from and side? related

Manu Sial

Yes.

or call. increased is a we from we the Kashy, per should the call in on either using our certain you And to last on I perspective way go the lot it And about back, SunPower. more ITC, benefit if growth a actually I we like. detail think calculated that We covered assumptions, think benefit a So pricing we can share $XX into earnings articulated see volume.

Kashy Harrison

you NEM sensitivities, if And on have that? the

Manu Sial

past, a place I the said, look, all don’t like Peter think – right policymakers. in think NEM articulated we I perspective, perspective any we get sensitivities we from have the into an will and think think I what industry from the we

demand, may to some the – point provide I near-term there. as think sensitivities unfolds, policy we at as a little any see bit the think it’s but I too this premature

Kashy Harrison

customer medium-term maybe you rising by was in and a in my XX% and targets in marketing you. indicated attachment loan the give EBITDA if adjusted just this question, think the as footnotes. could where Thank maybe in was through where And Slide that Okay. on driven years. you ‘XX wondering thinking higher per might to estimate origination you then XX, transition go decline also second could sales I some from that few the go us on storage rates so

Manu Sial

Yes.

let way the me a step right. about think – I So, back, think so to take

resi things. exited focus continue the have we of in fundamentals you leads margins. And that two us, gross see us. on into have that As amazing which XXXX, One, for you the can be seen business kind to for

is see right. can portfolio Also, with in both expense extremely are marketing Day, seeing to strong. the funnel helps we contextualize more that as And geographically broadening You sales is the it top product as our to Analyst on and investment in that of of grow well the bookings. the

provide where could bridge In guidance that perspective, financing. to terms things you tailwinds. our is of from modeling a it current One of a increased from will – go, couple as

about about $X,XXX buys talked to non-finance that a a system a customer. and a customer every is have system We finance compared

the ramps, talked making of and the platform and up. the off as investments things ‘XX attached you the should – that really per part customer in as and Peter all basis, years. are as from be volume well ‘XX taper the and bring to in the the ‘XX. out should then some business I the customer on customer increase per rates, to it going attach EV or incremental EBITDA in margin of growth a business to the EBITDA then about go the kicks earlier, we at per overall as as that should three those that And margin increase Storage from leverage ‘XX should start ramps, So, the the as to

Peter Faricy

I thing three after residential solar we company offers add do for we on solar options. go XX%. One is only Two all financial is are The things context. where will still only – that the

So time. them But who loan. could that by the XXX% which us majority, business best customers path are lease for or choice over to customers, the not them, prefer financed want cash, on is pay for of to we and be to make as have the that cash, we still a of

And the look we So, in chance for it. as are world-class beginning see we and XX% some this I But dealers, for at just the channel a we out own of products Jason we our build we are XXX% go. getting as accelerating the team today. opportunity year at have is financial our to the his way that obviously, direct think

Kashy Harrison

you. Thank

Operator

from Tristan ahead. the you. of I Thank show line go Please comes Richardson Truist. from last question our

Tristan Richardson

I appreciate Hey. the comments.

XQ basis? of impacting into about well namely from customer kind one that And EBITDA that guidance, the occurs and connectors as in impact XQ, talked also, charge the included push as the on on that customer factors discussed as that does Is for Just well? guidance EBITDA then of XXXX out XXXX, the you a in include weather. previously the growth both

Manu Sial

is answer The included. are both

Tristan Richardson

follow-up to business? perspective of exit, the maybe yes, going piece a then that cost change an commercial structure overall OpEx harvest, sort changes etcetera, just one from forward, a And is Helpful. savings there light Okay. exiting of to cost on quick any by the structure to,

Peter Faricy

residential CVAR, on our on we the between employees most were have business of Well, working shared had CVAR in CVAR.

business, answer OpEx don’t see a your you direct a give So, impact. big to I no, to quick

sales We will but team a reallocate single-digit to most be the profitable that this immediately. faster-growing of impacted, residential will more think business and small employees I have

Tristan Richardson

Helpful. Appreciate you guys. Thank you.

Peter Faricy

guess Thank closing wrap for for I comments. thank today, their you. And two have we questions. as I up everybody I just to quick want

we business was businesses, and and a many first When going to a One we company panels of my industrial and commercial are you and on as had which of is fully them similar you, took question, made the lot go business I last commercial forward. a focused that’s is, call residential to the solar have this and CVAR do of just now recognize from residential very of you most scale what utility May, solar the with I transition business. earnings with to that in now want that company different solely a

headed those forward. successfully questions, have answered are we see move where strategy our now you We now of can we and as

to my all of to We are for you This Day. be get our March Diego extremely interact team. you and you host all to in of Analyst first San chance with XXst excited for a will to chance meet our

that preview plan me to let you sneak of the topics So, just give we some a quick about. of talk

the we for that a mainstream of never before. panel participate the And of a in strategy. we includes have exciting all, the us in First opportunity that’s segment business. that to business participated And very product or have mass market

participate really premium arrangements segment. only allowed our existing have in supplier to us So, the

number move the forward in it’s finally excited talk them. product bring up talk And extremely larger if have much I to our faster-growing the We you thing mass as to one to they we are dealers, and a segment. market when

said to always seeing tremendous opportunities and things discussion the us are to very going do products And upper funnel. are talk products. on what’s and health to company if me, of plans in charging funnel. up are battery this That share I this Home power upper the of are what growth of I in the we Two, value our started you, part that. lot customer we excited more you the EV we or over best financial in of side, exciting And VPP, Connect. can’t our as a more with will to we the a side, to to So, to about year, you our are business, we also with for just lot the I all have that plants that finally, as many the leading we that time. approach virtual to part the storage then of wait it’s talk lifetime about But going say, going on indicator have a our drive mentioned, partnership including about are to includes you with suffice more

both in So, in thing XX% at now, customer that leads. And are down Thanks things very we are Those March all did and we growth top rates committed a of qualified tell the the Thanks. signals XXst, you that to leading than good Xx much to our then is of this guidance year. you, for and in forward growth headed. close right Diego. San appointments seeing other look funnel, are business marketing interesting ago. you seeing I the we But higher have year will seeing raw we like this where is about

Operator

Thank you. call. This concludes you participating. today’s for Thank conference

now may disconnect. You

Sunpower (SPWRQ) 17 Feb 222021 Q4 Earnings call transcript