Q4 2021 SunPower Corp Earnings Call
Speaker 1: Today's conference is scheduled to begin shortly. Please continue to stand by. Thank you for your patience.
Today's conference is scheduled to begin shortly please continue to standby. Thank you for your patience.
Speaker 2: ["Pomp and Circumstance"]
[music].
Speaker 2: Are P.
Speaker 1: Good day and thank you for standing by. Welcome to SunPower Corporation's fourth quarter 2021 earnings 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.
Good day and thank you for standing by welcome to Sunpower Corporation's fourth quarter 2021 earnings 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.
Speaker 1: To ask a question during the session, you would need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0.
To ask a question. During this session you will need to press star one on your telephone.
Please be advised that today's conference is being recorded.
If you require any further assistance please press star zero.
Speaker 1: 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. You may begin.
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 you may begin.
Speaker 3: Good afternoon. I'd like to welcome everyone to our fourth quarter 2021 earnings conference.
Good afternoon, I would like to welcome everyone to our fourth quarter 2021 earnings conference call on the call today, we will start with comments from Peter Pharisee CEO of Sunpower, who will provide a summary of 2021 strategic plan accomplishments and discuss our forward looking commitments for 2022 and beyond following Peter's comments <unk>.
Speaker 3: On the call today, we will start with comments from Peter Farrisee, CEO of SunPower, who will provide a summary of 2021 strategic plan accomplishments and discuss our forward-looking commitments for 2022 and beyond. Following Peter's comments, Manasiel, SunPower's CFO , will then review our fourth quarter financial results, as well as provide an update to our guidance. As a reminder, a replay of the call will be available later today on the Investor Relations page of our website.
Our CFO will then review our fourth quarter financial results as well as provide an update to our guidance as a reminder, a replay of the call will be available later today on the Investor Relations page of our website.
Speaker 3: During today's call, we will be making forward-looking statements that are subject to various risks and uncertainties that are described in the Safe Harbor slide of today's presentation, today's press release, our 2021 10-K, and our quarterly reports on Form 10-Q . Please see those documents for additional information regarding those factors that may affect these forward-looking statements.
During today's call, we will be making forward looking statements that are subject to various risks and uncertainties that are described in the safe Harbor slide of today's presentation. Today's press release, our 2021 10-K, and our quarterly reports on Form 10-Q . Please see those documents for additional information regarding those factors that may affect these forward looking statements also we will reference certain non-GAAP .
Speaker 3: Also, we will reference certain non-GAAP metrics during today's call. Please refer to the appendix of our presentation as well as today's earnings press release for the appropriate GAAP to non-GAAP recommendations.
Metrics during today's call. Please refer to the appendix of our presentation as well as today's earnings press release for the appropriate GAAP to non-GAAP reconciliations.
Speaker 3: Finally, to enhance the call, we have posted a set of PowerPoint slides on that we will reference during the call in the events and presentations page of the investor relations website. In the same location, we've also posted a supplemental data sheet detailing additional historical metrics.
To enhance the call we have posted a set of Powerpoint slides that we will reference during the call in the events and presentations page of the Investor Relations website in the same location. We have also posted a supplemental data sheet detailing additional historical metrics.
Speaker 3: With that, I'd like to turn the call over to Peter Farrisee, CEO of SunPower. Peter. Thanks, Mike.
With that I'd like to turn the call over to Peter <unk> CEO of Sunpower Peter.
Thanks, Mike and good afternoon, everyone.
Speaker 4: As you are aware, we reported our preliminary fourth quarter results last month and today we are reporting in-line results.
As you are aware, we reported our preliminary fourth quarter results last month and today, we are reporting in line results.
Speaker 4: Before Manu shares the result details, I will review the strength of the underlying business
Before my new shares the results details I will review the strength of the underlying business.
Speaker 4: our five strategic pillars in progress in 2021, and plans for 2022 for each pillar.
Our five strategic pillars and progress in 2021 and plans for 2022 for each pillar.
Please turn to slide number four.
Speaker 4: For the quarter, we continue to see strong top-of-funnel lead generation in our residential
For the quarter, we continued to see strong top of funnel lead generation and our residential business with nearly 22500, new customer bookings in the quarter, a 42% increase over last year.
Speaker 4: with nearly 22,500 new customer bookings in the quarter, a 42% increase over last year.
Speaker 4: This led to a record 17000 customers added in the quarter representing 31 percent year over year growth and our largest ever back.
This led to a record 17000 customers added in the quarter, representing 31% year over year growth and our largest ever backlog.
Speaker 4: Our total customer installed base stood at 427,000.
Our total customer installed base stood at 427000 at year end.
Speaker 4: We continue to sustain residential gross margins above 20 percent with a 100 basis point increase versus last year at 25.6 percent for the quarter, a record high.
We continued to sustained residential gross margins above 20% with a 100 basis point increase versus last year at 25, 6% for the quarter.
Our record high.
Speaker 4: adjusted EBITDA per customer before product and digital investment was $2,200.
Adjusted EBITDA per customer before product and digital investment was $2200.
Speaker 4: Our new home segment continues to grow strongly, with a record pipeline of 66,000 customers as we enter 2022, more than 40% higher than last year.
Our new home segment continues to grow strongly with a record pipeline of 66000 customers as we enter 2022 more than 40% higher than a year ago.
Speaker 4: Finally, Sunbelt Bookings exited 2021 with a run rate over $135.
Finally, sunbelt bookings exited 2021, where the run rate over $130 million.
Speaker 4: As we disclosed in our preliminary announcement last month, we experienced some installation delays in the fourth quarter due to weather and on the
As we disclosed in our preliminary announcement last month, we experienced some installation delays in the fourth quarter due to weather and on the crop.
Speaker 4: Similar to the rest of the industry and academy, we were impacted by some cost and availability pressure on our supply chain.
Similar to the rest of the industry and <unk>, we were impacted by some cost and availability of pressure on our supply chain and labor pool.
Speaker 4: Despite these short-term challenges from the pandemic, we are very optimistic and excited about our future.
Despite these short term challenges from the pandemic, we are very optimistic and excited about our future.
Speaker 4: as we execute our strategic plan to become the world's most customer-centric home energy company.
As we execute our strategic plan to become the world's most customer centric home energy company.
Please turn to slide number five.
Speaker 4: As you know, we are transforming SunPower into a residential solar company focused on providing a world-class customer.
As you know we are transforming sunpower into a residential solar company focused on providing a world class customer experience that moves well beyond the initial system.
Speaker 4: that moves well beyond the initial system.
Speaker 4: sale to a full ecosystem of integrated products and services to create a life.
Sale to a full ecosystem of integrated products and services.
To create a lifetime relationship with Sunpower.
Speaker 4: I believe strategies are only as good as the quality of the leadership team behind them. So, in 2021, I focused on building a talented and experienced leadership team to execute on the following five strategic pillars. Pillar number one is customer.
I believe strategies are only as good as the quality of the leadership team behind them. So on 2021 eye focused on building a talented and experienced leadership team to execute on the following five strategic pillars.
Pillar number one is customer care.
Customers are at the center of all of our discussions.
Speaker 4: After hiring Nuala Murphy last year as vice president of customer care, we have been rapidly improving our entire approach for customer care.
After hiring new law Murphy last year as vice President of customer care, we have been rapidly improving our entire approach for customer service.
Speaker 4: Our guiding principle is that if a customer discovers a problem,
Our guiding principle is that if a customer discovers a problem.
That is a defect.
Speaker 4: We are proactively striving to identify any issues well before our customers do, and then we will exceed their expectations with a timely
We're proactively striving to identify any issues well before our customers do and then we will exceed their expectations with a timely solution.
Speaker 4: Ultimately, I expect customer feedback to help guide our corporate and product development for ever-increasing levels of quality, which remains a major component of the SunPower
Ultimately I expect customer feedback to help guide, our corporate and product development for ever increasing levels of quality, which remains a major component of the Sunpower brand.
Speaker 4: We also recently hired Derek Cusack as our Executive Vice President for Supply Chain Quality and Field Operations.
We also recently hired dairy kuzak, because our executive vice president for supply chain quality and field operations.
Speaker 4: And residential solar today, the process to install and activate new solar and battery systems is slow.
And residential solar today, the process to install and activate new solar and battery systems is slow and bureaucratic.
Speaker 4: Our goal is to make the process of installing solar fast, easy, affordable, and enjoyable.
Our goal is to make the process of installing solar fast easy affordable and enjoyable.
Speaker 4: Derek and his teams are focused on innovations to deliver world-class customer.
Derek and his teams are focused on innovation to deliver world class customer experience.
Speaker 4: Pillar two is growth. We are growing our market share with a world-class dealer network supported by the entire SunPower product, digital and financial platform.
Pillar two is growth we are growing our market share with a world class dealer network supported by the entire Sunpower product digital and financial platform.
Speaker 4: We are complementing that network with a high growth SunPower direct channel and a leading new homes business featuring new and expanded partner.
We are complementing that network with a high growth Sunpower direct channel and a leading new homes business, featuring new and expanded partnerships.
Speaker 4: In October , we welcome Ben Peterson and the Blue Raven team into the SunPower family. Blue Raven is off to a...
In October we welcome Ben Peterson in the Blue Raven team ended the Sunpower family <unk>.
Blue Raven is off to a terrific start this year.
Speaker 4: I'm pleased to report the integration process is going very well and we have already launched some power financial products.
I am pleased to report the integration process is going very well and we have already launched some power financial products and Blue River.
Speaker 4: We also recently hired June Sabajay as our chief marketing.
We also recently hired June <unk>, as our Chief marketing Officer.
Speaker 4: June comes to us from Rex and Spotify and will help guide the company's customer acquisition and brand strategy.
June comes to us from Brexit Spotify and will help guide the company's customer acquisition and brand strategy.
Speaker 4: Under June's leadership, our goal is to build a true direct-to-consumer brand with a much more cost-efficient customer acquisition process.
Under <unk> leadership, our goal is to build a true direct to consumer brand with a much more cost efficient customer acquisition process.
Pillar three is best and affordable products, we are expanding our offerings to include not only our premium solar system Sunpower has been known for but also an array of quality and affordable products.
Speaker 4: We are expanding our offerings to include not only our premium solar system SunPower has been known for, but also an array of quality and affordable products.
Speaker 4: We recognize the value of a lifetime customer relationship and we will nurture that by providing an entire ecosystem of fully designed and integrated products and services.
We recognize the value of a lifetime customer relationship and we will nurture that by providing an entire ecosystem of fully designed and integrated products and services that are simple to use and money savings with clean and reliable energy at their core.
Speaker 4: that are simple to use and money savings with clean and reliable energy of
Speaker 4: As you know, we hired Nate Coleman as our Chief Products Officer in November and Nate has already accelerated this effort.
As you know we hired <unk> <unk> as our Chief product Officer in November and Nate has already accelerated this effort.
Pillar four is digital innovation.
Speaker 4: Our vision is to make buying solar as easy as it is to buy a book on it.
Our vision is to make buying solar as easy as it is to buy a book on Amazon.
Speaker 4: To accelerate innovation of the customer experience, we recently hired Ellen Kinney, who's our Vice President for Digital Products.
To accelerate innovation of the customer experience, we recently hired Ellen Kenny as our Vice President for digital products Ellen will help push our digital innovation strategy to include major upgrades to the MISO power App to provide a more efficient sales process more control options for our customers.
Speaker 4: Ellen will help push our digital innovation strategy to include major upgrades to the MySunPower app to provide a more efficient sales process, more control options for our customers, and increased ease of use to boost adoption.
And increased ease of use to boost adoption.
Speaker 4: In addition, we are pleased to announce our most recent new hire, Kumar Brahmat, EVP of software.
In addition, we are pleased to announce our most recent new hire Kumar Rama EVP of software technology.
Speaker 4: Kumar is a world-class technology leader from Amazon who will build best-in-class solutions for our customers and dealers.
Kumar as a world class technology leader from Amazon, who will build best in class solutions for our customers and dealers.
Pillar five is world class financial solutions, we recently hired Jason Mcrae with the objectives to drive higher sales rates faster closings and a broader customer base, while contributing to our lifetime customer value.
Speaker 4: We recently hired Jason McRae with the objectives to drive higher sales rates, faster closings, and a broader customer base while contributing to our lifetime customer value.
Please turn to slide number six.
Speaker 4: We have already made major strides towards the achievement of our...
We have already made major strides towards the achievement of our strategic goals.
Speaker 4: First, we've made measurable progress towards improving customer care in 2021 with our commitment to proactively discover and correct issues before customers even notice whenever possible.
First we have made measurable progress towards improving customer care in 2021, with our commitment to proactively discover and correct issues before customers even notice whenever possible.
Speaker 4: Our handling of the recent connectors issue on the commercial equipment reflects this philosophy.
Our handling of the recent connectors issue on the commercial equipment reflects this philosophy.
Speaker 4: Additionally, we've reduced customer issue resolution time by greater than 50%, and the number of customer interactions required to obtain resolution have improved by 1,300 basis points into the high double digit.
Additionally, we reduced customer issue resolution time by greater than 50% and the number of customer interactions required to obtain resolution have improved by 1300 basis points into the high double digits.
Speaker 4: Second, Blue Raven Solar expands our presence outside California and adds firepower to our direct channel, especially in states without a significant sun-powered dealership network and no or low sun-powered.
Second Blue Ravens solar expands our presence outside California, and adds firepower to our direct channel, especially in states without a significant sunpower dealership network and know where low sunpower share.
Speaker 4: Our pipeline of potential new home installations continues to grow.
Our pipeline of potential new home installations continues to grow.
Speaker 4: We executed an exclusive agreement with Toll Brothers last year in California that provides a framework for further expansion nationally.
We executed an exclusive agreement with toll brothers last year in California that provides a framework for further expansion nationally.
Speaker 4: We grew our market share in new homes and continue to work towards new partners.
We grew our market share in new homes and continue to work towards new partnerships.
We announced our 25 by 'twenty five initiative in 2021, which includes the goal of diversifying our residential customer base to include 25% from historically underrepresented communities by 2025.
Speaker 4: We announced our 25 by 25 initiative in 2021, which includes the goal of diversifying our residential customer base to include 25% from historically underrepresented communities by 2020.
Speaker 4: We're very proud of this commitment, which we will meet with new high-value product offerings at various price points, among other initiatives.
We're very proud of this commitment, which we will meet with new high value product offerings at various price points among other initiatives.
Speaker 4: We've already added new financial products for customers with expanded eligibility and low interest rates to help capture this important market.
We have already added new financial products for customers with expanded eligibility and low interest rates to help capture this important market segment.
Speaker 4: Third, on the product side, we restarted sales of our SunVault storage product last summer with rapidly growing bookings and healthy...
Third on the product side, we restarted sales of our sunbelt storage product last summer with rapidly growing bookings and healthy inventory.
Speaker 4: We also recently introduced our first residential virtual power plant offering under Connected Solutions.
We also recently introduced our first residential virtual power plant offering under connected solutions.
Speaker 4: This is a program that enables our customers to receive payments from their interconnected utility in exchange for degrees of partial control over customer Sunvolt.
This is a program that enables our customers to receive payments from their interconnected utility in exchange for degrees of partial control over customer son volt systems.
Speaker 4: We are also very pleased to announce our new partnership with home connect that we expect will expand our ability to bring financial value to customers quickly and meeting.
We are also very pleased to announce our new partnership with home connect that we expect will expand our ability to bring financial value to customers quickly and meaningfully.
Speaker 4: Most importantly, these programs bring real, tangible benefits to utilities and their non-solar customers as well. They provide a source of highly distributed storage that can help offset the need for distribution upgrades as increasing numbers of electric vehicles and rooftop solar systems get interconnected.
Most importantly, these programs bring real tangible benefits to utilities and their non solar customers as well.
They provide a source of highly distributed storage that could help offset the need for distribution upgrades as increasing numbers of electric vehicles and rooftop solar systems get interconnected.
Speaker 4: Fourth, as I mentioned, we have the right leadership team now in place to accelerate our digital efforts, to enhance the MySunPower app, as well as our design software, to greatly support both our customers and our sales.
Fourth as I mentioned, we have the right leadership team now in place to accelerate our digital efforts to enhance the my Sunpower app as well as our design software to greatly support both our customers and our sales teams.
Speaker 4: Fifth, SunPower Financial was launched in December , which provides us a platform for off-balance sheet customer financing, and we entered into a forward-flow loan purchase agreement with an affiliate of Credit Suisse.
Fifth Sunpower financial was launched in December which provides us a platform for off balance sheet customer financing and we entered into a forward flow loan purchase agreement with an affiliate of credit Suisse.
Speaker 4: Thanks to our strong leadership team and the dedicated mission-driven talent at SunPower, we got a lot done in 2021. And we have a lot more planned.
Thanks to our strong leadership team and the dedicated mission driven talented Sunpower, we got a lot done in 2021.
And we have a lot more planned for this year.
Please turn to slide seven.
Speaker 4: In 2022, we are leaning in and investing for growth.
In 2022, we are leaning in and investing for growth.
Speaker 4: You can expect to see meaningful progress along several strategic lines, including first some powers making major investments
You can expect to see meaningful progress along several strategic lines, including first.
Power's, making major investments to upgrade customer services, we believe that exceeding customer expectations for support is key to creating and maintaining our premium brand and growing lifetime customer relationships.
Speaker 4: We believe that exceeding customer expectations for support is key to creating and maintaining our premium brand and growing lifetime customer relationships. You can expect more updates.
You can expect more updates about this initiative at our analyst day.
Speaker 4: Second, continued rapid expansion of sales throughout the country, especially outside California as we invest in our dealer network and expand our team at SunPower.
Second continued rapid expansion of sales throughout the country, especially outside California, as we invest in our dealer network and expand our team at Sunpower direct.
Speaker 4: Third, we plan to introduce new high-value, high-performance panel and storage options.
Third we plan to introduce new high value high performance panel and storage options that we will have strong appeal beyond the premium residential segment that we currently capture.
Speaker 4: that will have strong appeal beyond the premium residential segment that we currently capture.
Speaker 4: As we explore our options in the coming weeks and months, we look forward to providing you with a more detailed update at our website.
As we explore options in the coming weeks and months, we look forward to providing you with a more detailed update at our analyst day.
Speaker 4: Fourth, we are making a digital product investment to improve our customer experience and our operation efficiency.
Fourth we are making a digital product investment to improve our customer experience and our operational efficiency.
Speaker 4: And finally, at SunPower Financial, we are reiterating our plan to increase the origination of residential financing from 35% in 2021 to 45% in 2022.
And finally at Sunpower financial we are reiterating our plan to increase the origination.
Residential financing from 35% in 2021% to 45% in 2022.
Speaker 4: This helps our customers qualify for financing quicker, while helping our dealers and direct salespeople close sales faster.
This helps our customers qualify for financing quicker, while helping our dealers and direct salespeople closed sales faster.
Speaker 4: It also brings new fee income that we've never previously kept.
It also brings new fee income that we have never previously captured.
Speaker 4: When you add all this up some power is on a path to change the world for millions of solar customers. We are passionate.
When you add all of the sub Sunpower is on a path to change the world.
Millions of solar customers.
We are passionate about our mission and we are just getting started.
Speaker 4: The seeds that we are planting now will bear fruit for years to come as we build the world's most customer-centric home energy.
The seeds, we're planting now will bear fruit for years to come as we build the world's most customer centric home energy company.
Speaker 4: Before I turn the call over to Manu, I'd like to address our new module supply.
Before I turn the call over to Manu.
To address our new module supply agreement.
Speaker 4: The new contract terms allow us to continue offering our existing residential products while exploring additional panel providers immediately.
The new contract terms allow us to continue offering our existing residential products, while exploring additional panel providers immediately.
Speaker 4: Most importantly, the new deal will ensure we can serve customers and dealers given the strong demand for residents.
Most importantly, the new deal will ensure we can serve customers and dealers given the strong demand for residential solar.
Speaker 4: I'll close my comments by reemphasizing how pleased I am with the strength of customers.
I'll close my comments by re emphasizing how pleased I am with the strength of customer demand.
Speaker 4: From my perspective, consumer demand is the single most important metric of our health. Now our focus is on
From my perspective consumer demand is the single most important metric of our health.
Now our focus is on serving and delighting our customers.
Speaker 4: We plan on having an analyst day on March 31st in San Diego. I look forward to seeing you there and introducing you to our leaders.
We plan on having an analyst day on March 31 in San Diego I look forward to seeing you there and introducing you to our leadership team.
Speaker 4: With that, I'd like to turn the call over to Manu CL, CFO of SunPower. Manu. Thanks, Peter. Please turn to slide 9. Our results for the quarter were in line with our pre-announcement on January 28.
With that I'd like to turn the call over to <unk> CFO of Sunpower Mani. Thanks, Peter Please turn to slide nine.
For the quarter waiting in line with our pre announcement on January 20th.
Speaker 1: We are reporting negative $8 million of adjusted EBITDA, which includes the previously disclosed $27 million charge for crack connectors in commercial equipment, with an incremental $4 million charge expected in the first quarter of 2022.
Reporting negative $8 million of adjusted EBITDA, which includes the previously disclosed $27 million charge for connectors and commercial equipment with an incremental $4 million charge expected in the first quarter of 2022.
Speaker 1: It also includes $3 million of higher sales and marketing expense, as well as the $6.5 million impact from weather and COVID-related.
It also includes $3 million of highest sales and marketing expense as well as the $6 5 million impact from weather and Covid related delays.
Speaker 1: We're also reporting $385 million of revenue, 12% higher than a year ago, and 19% higher sequentially versus third quarter of 2021, driven by the underlying strength of our residential
We are also reporting $385 million of revenue, 12% higher than a year ago, and 19% higher sequentially versus <unk> quarter of 2021, driven by the underlying strength of our residential business.
Speaker 1: We exited the year with a healthy balance sheet with $127 million of unrestricted cash and another 2.5 million shares of Enphase held for future sales. As a reminder, the acquisition of Blue Raven Solar in October was funded with the prior sale of 1 million shares of Enphase. And I'm happy to report that the integration of the Blue Raven team is going very smoothly.
We exited the year with a healthy balance sheet with $127 million of unrestricted cash and another $2 5 million shares of Enphase held for future sales as a reminder, the acquisition of dilutive install it in October was funded with the prior sale of 1 million shares of Enphase.
And I'm happy to report that the integration of dilutive and team is going very smoothly.
Speaker 1: We enter 2022 with a very strong residential fundamentals and a record high backlog, now the sole business of our company.
We enter 2022 with a very strong residential fundamentals and a record high backlog now the sole business of our company.
Please turn to slide 10.
Speaker 1: Top-of-the-funnel customer appointments and bookings continue to climb, and our residential gross margins for the quarter were the highest in nearly six years. Specifically, I'm pleased to report that we exited 2021 with residential gross margins greater than 70 cents a watt at 25.6 percent, up 100 basis points year-over-year.
Top of the final customer appointments and bookings continue decline and our residential gross margins for the quarter were the highest in nearly six years, specifically I am pleased to report that we exited 2021 with residential gross margins greater than 70 center work at 25, 6% up.
100 basis points year over year.
Speaker 1: We are very excited and optimistic about the opportunities in front of us and we remain committed to reinvesting the proceeds from the sale of Enfair shares and our CNI Solutions business back into the execution of our strategic plan. Please turn to slide 11. We are providing guidance for 2022 Adjusted EBITDA.
Very excited and optimistic about the opportunities in front of us and we remain committed to reinvesting the proceeds from the sale of Enphase shares in our C&I solutions business back into the execution of our strategic plan.
Please turn to slide 11.
We are providing guidance for 2022 adjusted EBITDA.
Range of 90 million to $110 million.
Relative to our private color for 2022, the midpoint represents a reduction of approximately $35 million.
Speaker 1: midpoint represents a reduction of approximately 35 million dollars with 15 million dollars coming off as a result of our plan to exit
$15 million coming off as a result of our plan to exit the light commercial business this year.
The remaining $20 million impact to the residential business is primarily driven by an updated supply agreement with maxion.
Speaker 1: primarily driven by an updated supply agreement with Maxion as we accelerate the shift towards a more diversified customer offering and supply chain. It assumes limited customer price increases during the transition. The guidance continues to assume strong demand and is based on a projection of greater than 35% volume growth.
We accelerate the shift towards a more diversified customer offering and supply chain.
It assumes limited customer price increases during the transition.
The guidance continues to assume strong demand and is based on a projection of greater than 35% volume growth versus 2021 to a range of 73000 to 80000 new customers.
<unk> for residential adjusted EBITDA per customer calculates to a range of 2000 to $2400 book customer before product and digital Opex investment.
Speaker 1: SunPower is nearing the completion of its transformation to a residential customer-focused renewable.
Sunpower is nearing the completion of its transformation to a residential customer focused business.
Speaker 1: We are now firmly on a strategic path for rapid long-term growth based on a growing basket of products and service offerings to our customers.
We are now firmly on a strategic path, but rapid long term growth based on our growing basket of product and service offerings to our customers.
Speaker 1: As such, we plan to provide annual guidance going forward for adjusted EBITDA, customer growth and residential adjusted EBITDA before product and digital OPEX investment for customers.
Such we plan to provide annual guidance going forward, but adjusted EBITDA customer growth and residential adjusted EBITDA before product and digital Opex investment per customer.
Speaker 1: We think the valuation of a company is most easily and accurately determined by the.
We think the valuation of our company is most easily and accurately determined by these metrics, which will also be based on customers rather than megawatts. An approach that makes most sense as we add more long term customer value for the initial sale of our solar system.
Speaker 1: which will also be based on customers rather than megawatts, an approach that makes more sense as we add more long-term customer value to the initial sale of a solar system. With that, operator, I would like to...
Operator, I would like to turn the call over for questions.
Speaker 5: Thank you, sir. As a reminder, to ask a question, you would need to press star one on your telephone. To withdraw your question, please press the pound key. Please stand by while we compile.
Thank you Sir.
As a reminder to ask a question you would need to press star one on your telephone to withdraw your question. Please press the pound key.
Please stand by while we compile the Q&A roster.
Speaker 5: I show our first question comes from the line of Sean Morgan from Evercore, please go ahead.
I show our first question comes from the line of Sean Morgan from Evercore. Please go ahead.
Speaker 3: Hey, guys. Thanks for taking my questions. So, you know, Peter, I think on the call, you guys mentioned that you're leaning into the Blue Raven acquisition a little bit, and maybe that's a little bit in light of NEM3. So, you know, as you're obviously going to be diversifying the portfolio away from California, what steps are you taking proactively to sort of, I guess, boost the growth that you're seeing outside of kind of that core, you know, historic base of your company?
Hey, guys. Thanks for taking my question so.
Peter I think on the call you guys mentioned that you are.
Leaning into the Blu ray of an acquisition a little bit and maybe that's a little bit in light of them three so.
As you are obviously going to be diversifying the portfolio away from California. What steps are you taking proactively to sort of I guess boost the growth that youre seeing outside of kind of that core historic base of your of your company.
Speaker 4: Yeah. Hi, Sean. Thanks for the question. You're absolutely right. We are looking to diversify the company across the country. What's interesting is if you take a look at the growth rate so far, just in the first quarter of this year, we're growing very fast in California, but we're actually growing as fast in the rest of the country. Particular strength in the Northeast and the South.
Yeah, Hi, Sean Thanks for the question you're absolutely right. We are looking to diversify the company across the country. What since Youre seeing is if you take a look at the growth rate. So far just in the first quarter of this year we're growing.
Very fast in California, but we're actually growing as fast in the rest of the country particular strength in the northeast and the southeast and you might remember Blue Raven was sort of that sweet spot right in the middle of the country, where we weren't.
Speaker 4: And you might remember Blue Raven was sort of that sweet spot right in the middle of the country where we weren't. And Blue Raven will continue to expand and grow. We're going to talk to you more about our Blue Raven plans at Analyst Day. But we'll also fill you in at Analyst Day about how we plan to accelerate our growth both in the Northeast and the Southeast.
And Blue Raven will continue to expand and grow we're going to talk to you more about our blue Raven plans at analyst day, but we will also fill you ended the analyst day about how we plan to accelerate our growth both the northeast and the southeast the other interesting thing I'll highlight is it's not just solar panels.
Speaker 4: The other interesting thing I'll highlight is it's not just solar panels. Battery storage, I think, is really beginning to take off, and I think we're quite pleased with how we've started the year with our Sunvolt product.
Battery storage I think is really beginning to take off and I think we're quite pleased with how we started the year with our sunbelt product.
Speaker 4: You know, I think it's both the combination of the extreme weather conditions that people are seeing in different parts of the country and the power outages that are driving more and more consumer demand. You know, one of the things we measure and share with you guys in color is our attach rate.
It's both the combination of the extreme weather conditions that people are seeing in different parts of the country.
And the power outages that are driving more and more consumer demand.
One of the things, we measure and share with you guys in color as our attach rate and our attach rate for Sun volt was trending, let's say, 25% to 28% and our direct channel last year.
Speaker 4: And our attach rate for Sunvolt was trending, let's say, 25%, 28% in our direct channel last year.
Speaker 4: That's up to the mid-30s as of last week. And what's interesting is the attach rate is just as high non-California as it is in California. So as you can hear from our comments, we're extremely pleased with the sales that we're seeing. And we're so pleased to see that we're diversifying our sales base all across the country.
That's up to the mid <unk> as of last week and what's interesting is the attach rate is just as high non California as it is in California. So as you could hear from our comments, we're extremely pleased with the.
With the sales that we're seeing and we're so pleased to see that.
We're diversifying our sales base all across the country.
Speaker 3: Okay, that's interesting. And, you know, since you brought up SunVault and you've been able to sort of bring that back online and get past, I guess, some of the supply chain pickups that you had previously, now that you're sort of pairing that with the wall box and the potential for the bidirectional charging, are you seeing any trends in terms of attach rate on SunVault versus people with EVs that might be looking to eventually incorporate car battery storage as part of their home energy solutions? Anything interesting that you're sort of picking up?
Okay, that's interesting and since you brought up sunbelt.
<unk> been able to sort of bring that back online and get past I guess some of the supply chain hiccups that you had previously now that youre sort of pairing that with with the wall box.
The potential for bidirectional charging are you seeing any trends in terms of attach rate on sunbelt versus people with evs that might be looking to eventually incorporate car battery storage as part of their their home energy solutions anything interesting that you're sort of picking up.
Speaker 4: Yeah, I think Sean, you guys have seen, we've announced a couple of programs with new homebuilders.
Yes, I think Sean you guys have seen we've announced a couple of programs with new homebuilders. So I think what I would predict is for this year. The channel well. This combination of solar plus battery plus CV will probably take off the fastest is with new homes and it kind of makes.
Speaker 4: So I think what I would predict is for this year, the channel that will this combination of solar plus battery plus EV will probably take off the fastest is with new homes.
Speaker 4: And it kind of makes sense, because most new homeowners roll their solar package right into their mortgage, which makes it very affordable. And that's the perfect time to kind of get all three done at the same time.
Because most new homeowners roll their solar package right into their mortgage which makes it very affordable and that's the perfect time to kind of get all three done at the same time, we are excited to share with you coming up at our analyst day, both our plans on the EV side and also some interesting plans related to batteries.
Speaker 4: We are excited to share with you, coming up on our Analyst Day, both our plans on the EV side, and also some interesting plans related to battery storage with virtual PowerPoint.
George with virtual power plants, so lots more to go there I think the biggest thing that gets me excited about storage coming back to <unk> for a minute is that today, we're really offering a product for partial home backup.
Speaker 4: So lots more to go there. I think the biggest thing that gets me excited about storage, coming back to Sunvolt for a minute, is that today we're really offering a product for partial home back.
Speaker 4: It's the product I have at my house. I think it's terrific. But I think if you take a look at the storage market, we're seeing a much stronger demand for whole home backup.
Alex I have in my House, I think it's terrific, but I think if you take a look at the storage market, we're seeing much stronger demand for whole home backup.
Speaker 4: And so we're going to talk more about our Sunvolt plans, and we see you at the end of March. But suffice to say, we're going to be aggressive at rolling out a number of new products in the whole home backup category. And that leads us to believe that this could be a terrific year on the Sunvolt side. OK, that's it.
So.
We're going to talk more about our sunbelt plans and we see you at the end of March but suffice to say, we're going to be aggressive in rolling out a number of new products and the whole home backup category.
And.
That leads us to believe that this could be a terrific year on the sunbelt side.
Okay, that's great. Thanks, Peter.
Yes.
Speaker 5: I didn't hear a lot about that in your discussion of this year's guidance. Can you talk about how that new initiative fits into your revenue mix?
Thank you.
I show. Our next question comes from the line of Pavel <unk> from Raymond James. Please go ahead.
Thanks for taking the question last December you.
Sunpower financial but.
But I didn't hear a lot about that in your discussion of this year's guidance can you talk about how that new initiative fits into your revenue mix.
Speaker 4: Absolutely. Thank you for the question, Pavel. The hiring of Jason McGray has really allowed us to build out a proper financial products business. You know, the big goal that we laid out for you guys is that we're going to improve the number of systems financed from 35% of the total to 45% next year.
Absolutely. Thank you for the question Pavel.
The hiring of Jason the Gray has really allowed us to build out a proper.
Financial products business.
The big goal that we laid out for you guys is that we're going to improve the number of systems finance from 35% of the total to 45% next year.
Speaker 4: Maybe as exciting to me is we're building up a scale in both lease and loan that's going to allow us to really lower our cost of capital over time. And then maybe as exciting, and I can't wait to share this with you in more detail at the Analyst Day, is we're really building out the financial products for customers and dealers that will scale very, very well as our business gets larger and larger.
May be as exciting to me is we're building up our scale in both lease and loan that's going to allow us to really lower our cost of capital over time, and then may be as exciting and I can't wait to share. This with you in more detail at the analyst day is we're really building out the financial products.
For customers and dealers that will scale very very well as our business gets larger and larger so we're quite excited about that part of the business I think at the core of it it's not only about making some money from helping customers finance their solar when you when you take a look at customer research the number one reason people.
Speaker 4: So we're quite excited about that part of the business. I think at the core of it, it's not only about making some money from helping customers finance their solar. When you take a look at customer research, the number one reason people say they can't get solar is they don't think they can afford the down payment.
They can't get solar is they don't think they can afford the down payment.
Speaker 4: The number two reason they say they can't get solar is they don't think they can get approved for financing.
Two reason they say they can't get solar they don't think they can get approved for financing.
Speaker 4: And we're excited to share with customers, you know, the new financial products we'll be rolling out this year and beyond that we think are going to make solar accessible to, you know, 100 million people here in the U.S. So lots more detail to come, but we're very excited to share more detail with you on that at the end of March.
And we're excited to share with customers the.
The new financial products will be rolling out this year and beyond that we think theyre going to make solar accessible to.
100 million people here in the U S. So lots more detail to come but but.
We're very excited to share more detail with you on that at the end of March.
Speaker 6: So just to clarify, are you going to be putting solar leases and loans on the SunPower balance sheet as a number of the other major national rooftop providers are doing?
So just to clarify are you going to be putting solar leases on loan.
On the Sunpower balance sheet as a number of the other major national.
Rooftop providers are doing.
Speaker 4: No, we are not changing our strategy on that at all. So we're still going to move these leases and loans off balance sheet. That means that we don't take the risk. But by actually beginning to do the loan servicing, which we plan to do this year, we'll have a much better understanding of what the real risk is. And we believe that would allow us to get a much lower cost of capital and a greater share of the economic.
No we are not changing our strategy on that at all so we will still going to move these leases and loans off balance sheet that means that we don't take the risk, but by actually beginning to do the loan servicing which we plan to do this year, we will have a much better understanding of what the real risk is and we believe that would allow us to.
To get a much lower cost of capital and a greater share of the economics over time. So we'll walk you through that in more detail but.
Speaker 4: So, we'll walk you through that in more detail, but no, we're not changing our strategy in terms of lifetime damage.
No we're not changing our strategy in terms of what is on that.
Okay clear enough.
Thank you.
Thanks, Thank you.
Speaker 5: Our next question comes from the line of Brian Lee from Goldman Sachs, please go ahead.
I show. Our next question comes from the line of Brian Lee from Goldman Sachs. Please go ahead.
Speaker 4: Hey Brian , hey guys, good afternoon, thanks for taking the questions.
Hey, Brian Hey, guys. Thanks, Hey, guys. Good afternoon, thanks for taking the questions.
Maybe the first one just on.
Speaker 4: I understand some of the rationale, but given you're kind of moving the goalposts a little bit again, I just wanted to dive in a bit. So the adjusted EBITDA per customer...
The.
These new metrics right.
I understand some of the rationale, but given you're kind of moving the goalposts are little bit again.
Just wanted to dive in a bit so the adjusted EBIT per customer.
Speaker 4: First one on that, I guess, can you kind of break out, you know, as your customer mix is changing, you even acknowledge there's, you know, more than solar-only customers going forward. You're going to be selling a lot more services and other products. What sort of the $2,000 to $2,400 per customer range represent? Is that $2,000 for a solar-only and then at the higher end, you know, $2,400 represents like a solar-only or solar-plus?
First one on that I guess can you kind of breakout as your customer mix is changing you can acknowledge there is more that solar only customers going forward youre going to be selling a lot more services and other products.
What's sort of the.
2000, $2400 per customer range represent is that 2001st solar only and then at the higher end 2400 represents like a solar or solar plus sunbelt battery customer just kind of give us a sense of the range of where your EBITDA shakes out on a.
Speaker 4: SunVault battery customer, just kind of give us a sense of the range of where your EBITDA shakes out on an individual customer basis because I feel like the blended mix kind of maybe doesn't represent where incremental customers are really being sourced at in terms of your economics. And then I have some follow-ups.
Individual customer basis, because I feel like the blended mix kind of.
Maybe it doesn't represent where incremental customers are really being sourced to add in terms of your economics, and then I had some follow ups.
Speaker 3: Hey Brian , it's Peter. So thank you. We are excited about the guidance that we're going to give as we go forward. I think when you think about a direct-to-consumer residential company that's focused on growth, I do believe customers and customers...
Hey, Bryan its Peter.
Thank you.
We're excited about the guidance. So we're going to give as we go forward I think when you think about a direct to consumer residential company. That's focused on growth I do believe customers and customer growth and then something like EBITDA per customer or maybe someday, we'll get to a lifetime value per customer those are the two things to look at so really met.
Speaker 3: and then something like EBITDA per customer or maybe someday we'll get to a lifetime value per customer. Those are the two things to look at to really measure the health and well-being and the valuation of the company. Let me have Manu answer a couple of your questions on the EBITDA calculation and how we've been thinking about it.
The health and well being and in the valuation of the company. Let me have <unk> answer a couple of your questions on the EBIT calculation and how we've been thinking about it.
Speaker 1: All right, Brian , so just to contextualize the three metrics we're giving, we've provided the number of customers in the past. I think it's a much better metric than just the megawatts.
Brian So just to contextualize the three metrics given that you've provided.
The number of customers in the past I think it's a much better metric than just the megawatts that will be guided and it makes sense given that.
Speaker 1: guided and it makes sense given that we are a Resi-focused or Resi-only company going forward. Then EBITDA per customer is the same basis as what we've talked now in the last couple of quarters. You can reference the total year to what we had said in the third quarter metrics as well. Then just to answer the 2022 question regarding the EBITDA per customer, the assumption is that
Really focused on is the only company going forward and then EBITDA per customer is the same basis as what you've talked now in the last couple of quarters.
You can reference the talking.
To what we had said in the third quarter in Mexico as well and then just to answer the 2022 question regarding the EBITDA per customer.
The assumption is that.
Speaker 1: What takes it from, let's say, the low end of the range to the high end of the range is a solar customer, depending on region, as well as a solar customer who's also taking financing from SunPower. So the range of 73,000 to 80,000 customers assumes customers that are going to take solar, and then some of the customers are going to take solar plus storage plus EV plus our financing. And that's the way it is. It's a little bit of both. It's a little bit of both.
What takes it from.
The low end of the range at the high end of the range is a solar customer.
Depending on region as well as a solar customer who is also taking financing.
Sunpower so.
The range of 73000 to 80000 customers assumes customers that are going to take solar and then some of the customers that want to take solar plus storage plus EV plus our financing.
And then EBITDA basically as last time.
Speaker 4: Okay, that's helpful context. I guess maybe as a follow-up to that, I may have the numbers off, but I think in the past you said, or last quarter you said $35 million on this product and digital spending effort, that was the drag on EBITDA.
Okay. That's helpful context, I guess, maybe as a follow up to that.
I may have the numbers off but I think in the past you said last quarter you said.
$35 million.
This product and digital spending and first that was a drag on EBITDA.
Speaker 4: If I do that across your customer base, I guess, or your customer count, it sounds like it's about a $400 million to $500 million per customer EBITDA drag from those spending initiatives. Is that going to be pretty constant going forward, and is there a reason to be stripping that out, I suppose, because those may be essential to running the Resi Solar Segment, just trying to understand what that EBITDA drag is from that ongoing spend and if it changes over time.
If I do that across your customer base, I guess or your customer count it sounds like it's about a $4 million to $500 million, sorry, four to $500 per key.
Customer EBIT drag from those spending initiatives is that going to be pretty constant going forward and is there a reason to be stripping that I suppose because are those maybe are essential to running the resi solar segment, just trying to understand.
What that EBIT drag is from that ongoing spend and if it changes overtime.
Speaker 1: Yes, so what we talked in the fourth quarter was about $35 million of incremental spend that we were financing effectively through.
Yes, so what we've talked in.
In the fourth quarter, it was about $35 million of incremental spend that we were financing effectively through.
Speaker 1: end phase proceeds that we sold in the third quarter of 2021.
Enphase proceeds that we sold in.
In the third quarter of 2021, just to kind of coming back I think where it shows up is half of it shows up in the EBITDA per customer calculation and then the other half of it shows up in the product and digital Opex.
Speaker 1: Just to tie the comment back, I think where it shows up is half of it shows up in the EBITDA per customer calculation, and then the other half of it shows up in the products and digital op-eds.
Speaker 1: The way to think about the spend from a SunPower perspective, whether it's on a per-customer, I think 2022 is a high watermark and while we'll continue to spend on the growth of the business on a per-customer basis, that spend is going to be tapering off as we go from 2022 to some of the other years.
The way to think about the spend on Oklahoma Sunpower perspective that it's on a on a pro customer, but I think two.
2022 is a high water Mark and why we'll continue to spend.
On the growth of the business on a per customer basis.
<unk> is going to be tapering off.
Growth from 'twenty two to some of the out years, Yes, I think what I would add on that Brian is that from my time at Amazon.
Speaker 3: Yeah, I think what I'd add on that, Brian , is that, you know, from my time at Amazon...
Speaker 3: The two pieces of investment that scale the best over time are investing in software and investing in product.
Two pieces of investment that scale, the best over time, our spending.
Investing in software and investing in products and.
Speaker 3: And the kind of investments that once you make them, they'll scale over a larger and larger customer base over time. So I just gave on the previous answer the example of financial products. A lot of what we're going to build this year is what we need for the next 10 years, you know, and beyond. And so the $35 million number may, you know, it's possible that could increase in absolute terms, but I think as a rate of the total, you know, I think that'll scale nicely over time and begin to shrink over time. Thanks, Brian .
The kind of investments that once you make them feel scale over a larger and larger customer base over time. So I just gave on the previous answer. The example of financial products a lot of what we're going to build this year is what we need for the next 10 years and beyond and so the $35 million number may it's possible that could.
Kris in absolute terms, but I think as a rate of the total I.
I think that'll that'll scaled nicely over time and begin to shrink over time. Thanks. Thanks, Brian .
Alright, Thanks, guys I'll take it offline.
Speaker 5: Thank you. I show the next question comes from the line of Philip Shan from Roth Capital. Please go ahead.
Thank you.
Our next question comes from the line of Philip Shen from Roth Capital. Please go ahead.
Speaker 6: Hi, everyone. Thanks for taking my questions. First one's on the 22 Outlook.
Hi, everyone. Thanks for taking my questions first one is on the <unk>.
Two.
Look.
Speaker 6: and 76,000 customers. How many of those are Blue Raven? I'm guesstimating.
And.
70 to 76000 customers.
How many of those are blue Raven.
Guesstimate in 9000 with a strong growth outlook for Blue Raven, but just curious if you could help us understand ultimately what the organic growth is I'm guessing roughly 25% year over year, and then the impact of flu.
Speaker 6: strong growth outlook for Blue Raven, but just curious if you can help us understand ultimately what the organic growth is. I'm guessing roughly 25% year of year, and then the
Speaker 3: Phil, we don't break out Blue Raven customers separately, but I would say you're in the ballpark. I think that's pretty close to what the number will be. We do think about constantly as our total direct channel, which includes SunPower Direct plus Blue Raven.
So we don't breakout blue apron customers separately, but I would say you are in the ballpark I think thats pretty close to what the number will be.
Do I think about constantly is our total direct channel, which includes sunpower direct plus blue Raven.
Speaker 3: We're very, very pleased with the growth and the profitability of that channel. So to give you some color on that, that was, let's say, 15% of our business before Blue Raven, became 20 by the end of the year, and we'll get to 30% of our total business this year.
We're very very pleased with the growth and the profitability of that channel. So to give you. Some color on that that was let's say, 15% of our business before Blue Raven became 20 by the end of the year.
We will get to 30% of our total business. This year. So not only is a growing a lot faster than our total business, but it's also a channel that's much more profitable for us. So we're quite pleased as I mentioned in my comments with the Blue Raven acquisition.
Speaker 3: So not only is it growing a lot faster than our total business, but it's also a channel that's much more profitable.
Speaker 3: So we're quite pleased, as I mentioned in my comments, with the Blue Raven acquisition, and both as them running as an independent company and also our ability to find synergies between the two companies. It's been terrific so far. And we're also very, very pleased with our SunPower director.
Both as them running as an independent company and also our ability to find synergies between the two companies. So that's been terrific. So far.
And we're also very very pleased with our Sunpower direct business.
Speaker 6: Great. Thanks for the color, Peter. And then as it relates to OMConnect, can you talk a bit more about the revenue model there and the go-to-market strategy and what kind of impact to revenue margins could we see in 22 or in 23? Do you expect it to be meaningful, or is it still kind of going to be rampant?
Great. Thanks for the color Peter and then as it relates to own connect.
Can you talk a bit more about the revenue model there and the go to market strategy and what kind of impact to revenue margins could we see in 'twenty two.
And 'twenty three.
Expect it to be meaningful or is it still kind of going to be ramping from smaller numbers.
Speaker 3: Yeah, thanks, Phil. I'm so glad you brought up Ohm, because I can't wait to spend time with you guys on this. It's a terrific partnership. I don't want to give away all of the punchlines for our Analyst Day, but let me give you a couple sneak previews. So, first of all, there's a couple things about Ohm that we find really attractive. One is, for all the talk about virtual power plants, the hardest thing is getting the customer experience.
Yes, Thanks Bill.
So glad you brought up on because I can't wait to spend time with you guys on this.
Terrific partnership I don't want to give away all of the punch lines for our analyst day, but let me give you a couple a sneak preview. So first of all there's a couple of things about <unk> that we find really attractive one is for all the talk about virtual power plants. The hardest thing is getting the customer experience right. If you think about the idea of that.
Speaker 3: You know, if you think about the idea that you're going to let someone else control your battery storage, or someone else control your
Youre going to let someone else control your battery storage or someone else control. Your thermostat, that's not something that most people wake up every day and are comfortable with so they have really demonstrated in our opinion the ability to.
Speaker 3: That's not something that most people, you know, wake up every day and are comfortable with. So, they have really demonstrated, in our opinion, the ability to influence customer behavior in a very positive way, and we're going to talk to you about that. And then also, they're really the first company that we've seen that's been able to connect consumer energy with the energy market.
Fluent customer behavior in a very positive way and we're going to talk to you about that and then also they are really the first company that we've seen that's been able to connect consumer energy with the energy markets. So there's a lot of talk about <unk>, but when you actually take a look at who has made a direct connection to the bidding and energy.
Speaker 3: So there's a lot of talk about VPP, but when you actually take a look at who's made a direct connection to the bidding and energy between residential actions, if you will, and the energy markets, I think these guys are way ahead. We're going to give you a lot more details at the analyst day about our partnership.
Between residential batteries that are residential actions, if you will and the energy market. So I think these guys are way ahead.
We're going to give you a lot more details at the analyst day about our partnership but our partnership is a very big and comprehensive one we're going to be their exclusive partner on things like solar and battery storage and I really want to get into a lot more detail with all of you on our VP investments and the seeds were planning to add.
Speaker 3: is a very big and comprehensive one. We're going to be their exclusive partner on things like solar and battery storage.
Speaker 3: and I really want to get into a lot more detail with all of you on our VPP investments and the seeds we're planting. To answer your last question directly, I don't think it'll be material in 2022.
Your last question directly I don't think it will be material in 2022, I think it's early theres still a lot for us to figure out, but I will tell you that it's one of the seeds that.
Speaker 3: I think it's early. There's still a lot for us to figure out. But I will tell you that it's one of these seeds that is exciting. Because if you took a look at the three-year plan and the five-year plan, I think it does become a very material part of our business. The economics are really attractive.
<unk> is exciting because if you if you took a look at the three year plan and the five year plan.
It does become a very material part of our business. The economics are really attractive.
Speaker 3: And frankly, I've been looking for an opportunity for us to work productively with utilities. I mean, this is a win-win-win if we can get the consumer behavior right. Consumers get
And frankly, I've been looking for an opportunity for us.
US to work productively with utilities I mean this is a this is a win win win if we can get the consumer behavior right consumers get money from utilities.
Speaker 3: utilities hopefully save having to build new distribution because they can take advantage of distributed energy storage. And we think we can be a partner to both and participate in the economics. So I look forward to going a lot deeper on that topic with all of you in about a month. Thanks.
Utilities, hopefully save having to build new distribution because they can take advantage of.
Distributed energy storage and we think we can be a partner to both and participate in the economics. So I.
I look forward to going a lot deeper on that topic.
With all of you.
Thanks.
Speaker 6: One last one, if I may, in terms of the Enphase partnership, there might be some near-term deadlines there in terms of how things are governed. What do you expect there? And do you have any real alternatives besides Enphase?
One last one if I may in terms of the Enphase partnership there might be some near term.
Deadlines there in terms of.
How things are governed what do you expect there.
Do you have any real alternatives. Besides <unk>, if you want to go a different direction.
Speaker 3: So on the in-phase partnership, we have a partnership agreement that we're together through Q1 of 2024. We're pleased with that agreement. We're pleased with the relationship we have with them. And I think it's business as usual for 2022. Great. Thanks.
So on the <unk> partnership.
We have a partnership.
Agreement.
We're together through Q1 of 2024.
We're pleased with that agreement, we're pleased with the relationship we have with them.
I think it's business as usual for 2022.
Great. Thanks for.
Taking all the questions I'll pass it on Peter.
Okay. Thank you Phil Thanks Bill.
Speaker 5: Thank you. Our next question comes from the line of Kashi Harrison from Piper Sandler. Please go ahead. Good afternoon, everybody.
Thank you.
Our next question comes from the line of Kashi Harrison from Piper Sandler. Please go ahead.
Good afternoon, everybody and thank you for taking the questions.
Speaker 6: So, on slide 11 of the investor deck, so you indicate that guidance excludes the outcome of NEM and potential ITC changes. I was wondering if you could maybe just help us with some sensitivities on those numbers if the proposed decision from December comes to fruition. And in addition, can you also provide us with some sensitivities if the ITC changes?
So on slide 11 of the Investor deck.
You indicate the guidance excludes the outcome.
Of Nam and potential ITC changes.
I was wondering if you could maybe just help us with some sensitivities on those numbers if.
If the proposed decision from December comes to fruition.
And in addition can you also provide us with some sensitivities if the ITC changes.
Speaker 3: Yes, before I turn it over to Manu for the sensitivities, let me just make a quick comment on both.
Yes, let me before I turn it over to monitor for the sensitivity. So let me just make a quick comment on both I think.
Speaker 3: You know, as the initial negative news came out on California NEM in December , we did believe that that was going to be probably an overreaction in the market, and I think that's proven out to be the case. The events have taken place since.
As the initial negative news came out on California them in December we did believe that that was going to be.
Probably an overreaction in the market I think thats proven out to be the case that the events of have taken place since.
Speaker 3: You know, there's an enormous amount of energy from California residents and California employees in the solar and renewable energies business to make sure that the outcome here is much more moderate and much more favorable for the solar customers and the solar employees.
There's an enormous amount of energy from California residents and California employees in the solar and renewable energy business to make sure that the outcome here.
Is much more moderate and much more favorable for the solar customers in the solar employees. So I would I would just tell you that in California, we're cautiously optimistic that the outcome here.
Speaker 3: So I would just tell you that in California, we're cautiously optimistic that the outcome here will be much improved over the initial reports and that we'll have an outcome at some point in Q2.
<unk> will be much improved over the initial reports in that.
We will have an outcome at some point in Q2.
Speaker 3: And then on the ITC, before Bhanu goes through the sensitivities, I think we feel in a similar direction. I think you've seen comments from Senator Manchin that he supports.
And then on the ITC before bundled goes to the sensitivities I think we feel in a similar direction I think you've seen comments from Senator mentioned that he supports.
Speaker 3: legislation related to climate and clean energy provisions. There seems to be a lot of support across the Democratic Party for that in the Senate, and we're cautiously optimistic that that will get moved along.
Legislation related to.
Climate and clean energy provisions, there seems to be a lot of support across the Democratic party for that in the Senate.
We're cautiously optimistic that that will get.
Moving along over the next few months, but I know you want to talk a bit about the subsidies on the NIM and ITC sorry, yes. So on the ITC if actually we actually covered that in our last earnings call and I think maybe articulated it is rich.
Speaker 3: Manu, you want to talk a little bit about the sensitivities on the NEM and ITC side? On the ITC, we actually covered that in our last earnings call and I think the way we articulated it is we should see the benefit.
Should see the benefit.
Speaker 1: either from a pricing perspective or increased volume, and I think we calculated using certain growth assumptions about a $14 per share benefit to SunPower. We can go into a lot more detail on the callback if you like.
Either from a pricing perspective on increased volume and I think we calculated at using certain growth assumptions about $14 per share benefit to sunpower.
We can go into a lot more detail on the call back if you like.
And on the NIM sensitivities, if you have that.
Speaker 1: I think we, look, from a NEM perspective, I don't think we've articulated any sensitivities in the past. I think, like what Peter said, we think we'll all get into the right place from an industry perspective and the policy makers. I think as the policy unfolds, we may see some near-term demand, but I think it'll be too premature at this point to provide any sensitivities.
I think we look from a NIM perspective, I don't think we've.
You've articulated any sensitivities in the past I think like what Peter said.
We think good I'll get into the right place from a.
An industry perspective, and the policymakers I think as.
Sure.
As the policy unfolds, we may see some near term.
<unk>, but but I think it's a bit too premature at this point to provide any sensitivities there.
Speaker 6: Okay, and as my second question, so on slide 11, you indicated that the decline in adjusted EBITDA per customer in 2022 was driven by higher sales and marketing.
Okay and as my my second question.
On Sigma Slide 11, you.
You indicated that the decline in adjusted EBITDA per customer in 'twenty, two was driven by higher sales and marketing.
Speaker 6: uh... in the footnotes i was wondering if you just maybe give us some some medium-term target on
In the footnotes I was wondering if you could just maybe give us some some medium term targets on where you think this estimate could go thinking through may.
Speaker 6: where you think this estimate could go, thinking through, you know, maybe rising storage attachment rates and then also the transition from 35% loan origination to, you know, where that might go in a few years. Thank you.
Maybe rising storage attachment rates.
Then also the transition from 35% loan origination too.
Where that might go in a few years. Thank you.
Speaker 1: Yeah, so I think the way to think about, so let me take a step back, right? As we've exited 2021, you've seen two things. One, the Resi fundamentals continue to be amazing for us, which kind of, you know, leads into the focus on that business for us. And you can see that in gross margins, you can see that in bookkeeping.
Yes so.
I think the way to think about so let me take a step back.
As we've exited 2021, you've seen two things one there is the fundamentals continue to be amazing.
Got us, which kind of leads into the focus on that business for us and you can see that in gross margins you can see that in bookings.
Speaker 1: Also, we are seeing that the top of the funnel is extremely strong, and the investment in sales and marketing expense
Also.
We are seeing that the top of the funnel is extremely strong and the investment in sales and marketing expense.
Speaker 1: to contextualize is both to grow geographically as well as...
To contextualize as bullets to grow geographically as well as well as.
Speaker 1: helps with broadening our product portfolio more of a fit on the analyst day, right? In terms of from a modeling perspective, as you bridge from our current guidance to where it could go, a couple of things that will provide tailwinds. One is increased financing.
<unk> helps with broadening our product portfolio Moto mod affecting on the analyst day right in terms of from a modeling perspective as as you bridge from our current guidance to where it could go.
Couple of things that will provide savings one is increased financing.
Speaker 1: We've talked about every customer that buys a system and a finance system compared to a non-finance is about a thousand bucks a customer, so that should...
We've talked about.
Every customer that buys a system on a finance system compared to.
Our non finance is about 1000 bucks a customer so that should.
Speaker 1: should bring the overall margin up. Storage, attach it as the increase and as the business ramps.
Being the overall margin up.
Storage attach rates as the increase in it.
As the business ramps.
Speaker 1: or that part of the business plans that should be incremental margin to the EBITDA per customer as well as the EV attached rates, all those three things should
Part of the business that should be incremental margin to the EBITDA per customer.
As well as the evi back states.
All of those three things should increase the EBITDA per customer going from 22 to 'twenty, three and then as Peter and I talked about earlier.
Speaker 1: increase the EBITDA per customer going from 22 to 23. And then as Peter and I talked about earlier, some of the investments we are making in the platform and growth in 22 should start to taper off on a per customer basis. And then the volume leverage really kicks in as you go from 22 to the out year.
Some of the investments, we're making in the platform and growth in 'twenty two.
Should start to taper it off on a per customer basis, and then the volume leverage really kicks in as you go from 22 to the out years, the only thing I'll add is.
Speaker 3: The only thing I'll add is on where do we go after 45%?
And where do we go after 45% two things for context, one is we're still the only.
Speaker 3: Two things for context. One is we're still the only residential solar company that offers all three financial options. So for customers, we want them to make the choice that's best for them, and that could be cash, lease, or loan.
Solar residential solar company that offers all three financial option. So for customers, we want them to make the choice that's best for them and that could be cash lease are low.
Speaker 3: But of the customers who prefer not to pay cash, which is still the majority, we are on a path to have 100% of that business financed by us over time. So the 45% that we're at for this year is just the beginning in the way we look at it. Obviously, we're getting 100% of our own direct channel today, but as Jason and his team have a chance to build out some world-class financial products for our dealers, I think we see the opportunity accelerating as we go.
Of the customers, who prefer not to pay cash which is still the majority.
We are on a path to have 100% of that business financed by us over time, so the 45% that we're at for this year.
Just the beginning and the way we look at it obviously, we are getting 100% of our own direct channel today, but as Jason and his team have a chance to build out some world class financial products for our dealers.
I think we see the opportunity accelerating as we go.
Thank you.
Speaker 7: Thank you.
Thank you.
Speaker 5: show our last question comes from the line of Tristan Richardson from Truist. Please go ahead. I appreciate the comments.
I show our last question comes from the line of Tristan Richardson from <unk>. Please go ahead.
I appreciate the comments this evening guys.
Speaker 6: One on the EBITDA as well as customer growth guidance for 2022, does that include the impact of the previously discussed kind of connectors charge that occurs in one queue as well? And then also the
Just.
One on the EBITDA.
EBITDA as well as customer growth guidance for 2022.
Does that include the impact of.
Hey.
Previously discussed kind of connectors charged that occurs.
<unk> as well.
And then also the <unk>.
Speaker 6: factors you talked about impacting 4Q, namely the push into 2022 from weather, is that included in that guidance both on a customer and EBITDA basis?
Factors, you talked about impacting <unk>, namely the.
Push out into 2022 from weather is that included in that guidance, both on a customer and EBITDA basis.
The answer is both are included.
Speaker 6: Okay. Okay. Helpful. And then, you know, maybe just a quick one to follow up on the light commercial exit. Is there any change to sort of a, you know, cost structure from an OPEX perspective going forward? You know, savings, harvest, et cetera. Changes to...
Okay. Okay.
Okay helpful. And then maybe just a quick one to follow up on the light commercial exit.
Is there any change to sort of cost.
Cost structure from an opex perspective going forward.
Savings harvest et cetera.
Changes to overall cost structure by by exiting that piece of the business.
Speaker 3: Well, you know, in CVAR, most of the employees we've had working on CVAR were shared between our residential business and CVAR. So to give you a quick, direct answer to your business, no, I don't see a big OpEx impact. We have a small, single-digit sales team that will be impacted, but I think most of the employees will reallocate to this faster-growing and more profitable residential business immediately.
Right.
And Steve are most of the employees we've had working on CVR were shared between our residential business and see var.
No.
To give you a quick direct answer to your business no I don't see a big Opex impact we have a small single digit sales team that will be impacted but I think most of the employees will reallocate to this.
Faster growing and more profitable residential business immediately.
Helpful. Appreciate it guys. Thank you.
Speaker 3: Thank you. I guess as we wrap up for today, I want to thank everybody for their questions, and I just have two quick closing comments. One of them is I just want to recognize that we've now fully made this transition from a company that was in a lot of different businesses, panels and utility-scale solar and commercial and industrial and residential, to a company that's now solely focused on the residential solar business as we
Thank you I guess as we as we wrap up for today I want to thank everybody further questions and I just have two quick closing comments one of them is I just want to recognize that we've now fully made this transition from a company that was in a lot of different businesses panels, and utility scale solar and commercial and industrial and residential.
To accompany Thats now solely focused on the residential solar business as we go forward. What I took my first earnings call last may with many of you. Most of you had a very similar question, which is what are you going to do with the commercial business in the <unk> business. We've now successfully answered those questions and now.
Speaker 3: When I took my first earnings call last May with many of you, most of you had a very similar question, which is, what are you going to do with the commercial business and the CBAR business? We've now successfully answered those questions, and now you can see our strategy of where we're headed as we move forward.
You can see our strategy of where we're headed as we move forward. We are extremely excited to host all of you March 31st in San Diego for our Analyst day. This will be my first chance to get a chance to interact with all of you and for you to meet our team. So let me just give you a quick sneak preview of some of the topics that we plan to talk about.
Speaker 3: We are extremely excited to host all of you March 31st in San Diego for our Analyst Day. This will be my first chance to get a chance to interact with all of you and for you to meet our team. So let me just give you a quick sneak preview of some of the topics that we plan to talk about.
Speaker 3: First of all, we have a very exciting product strategy.
First of all we have a very exciting product strategy and that includes the opportunity for us to participate in a segment of the business that we've never participated in before and Thats. The main stream or mass market panel business. So our existing supplier arrangements. So let me really allowed.
Speaker 3: And that includes the opportunity for us to participate in a segment of the business that we've never participated in before, and that's the mainstream or mass market panel business.
Speaker 3: So our existing supplier arrangements have only really allowed us to participate in the premium segment. We are extremely excited as we move forward to finally have a product in the much larger and faster growing mass market segment. And if you talk to our dealers, it's the number one thing they bring up when I talk to them. So we're very excited to share our plans with you on that.
As to participate in the premium segment. We are extremely excited as we move forward to finally have a product in the much larger and faster growing mass market segment, and if you talk to our dealers. It's the number one thing they bring up what I would talk to them. So we're very excited to share our plans with you on that too we're going to talk to you as I mentioned a lot.
Speaker 3: Two, we're going to talk to you, as I mentioned, a lot more about financial products.
More about financial products, but we're also going to talk a lot more about what are the things that we're going to do to drive lifetime customer value up over time that includes.
Speaker 3: But we're also going to talk a lot more about what are the things that we're going to do to drive lifetime customer value up over time. That includes...
Speaker 3: Many more products in the battery storage side, exciting opportunities for us in the EV charging side, and a discussion that I can't wait to have with all of you about our approach in virtual power plants or VPP, including our partnership with Home Connect. And then finally, I'll just suffice to say, as we've started the year,
Many more products in the battery storage side exciting opportunities for us in the EV charging side.
A discussion that I can't wait to have with all of you about our approach in virtual power plants or VP, including our partnership with <unk> connect.
And then finally I'll just suffice to say as we started the year.
Speaker 3: we're seeing tremendous growth in the upper part of our funnel. And if you said to me, what's the best leading indicator of the health of this company and this business, it's always that upper part of the funnel. So we've committed in our guidance for 35% customer growth this year. But I will tell you right now, at the top of the funnel, we're seeing 3x that growth in things like raw appointments and marketing qualified leads.
We're seeing tremendous growth in the upper part of our funnel and if you said to me, what's the best leading indicator of the health of this company in this business, it's always that upper part of the funnel. So we've <unk>.
Committed in our guidance for 35% customer growth this year, but I will tell you right now at the top of the funnel, we're seeing three ex that growth in things like raw appointments and marketing qualified leads and then the other interesting thing is that we are seeing much higher close rates than we did a year ago. Those are both very.
Speaker 3: And then the other interesting thing is that we're seeing much higher close rates than we did a year ago.
Speaker 3: Those are both very good leading signals about where this business is headed. Thanks to all of you and look forward to seeing you March 31st down in San Diego. Thanks.
Good leading.
Signals about where this business is headed thanks to all of you and look forward to seeing you March 31 down in San Diego.
Speaker 5: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
Thank you.
Today's conference call. Thank you for participating you may now disconnect.
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Speaker 2: I.
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Speaker 2: Thanks for watching!
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Speaker 5: Good day, and thank you for standing by. Welcome to SunPower Corporation's fourth quarter 2021 earnings 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.
Good day and thank you for standing by welcome to Sunpower Corporation's fourth quarter 2021 earnings conference call at.
At this time all participants are in a listen only mode.
After the speaker presentation, there will be a question and answer session.
Speaker 5: To ask a question during the session, you would need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0.
To ask a question during this session you would need to press star one on your telephone.
Please be advised that today's conference is being recorded.
If you require any further assistance please press star zero.
Speaker 5: 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. You may begin.
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 you may begin.
Speaker 1: Good afternoon. I'd like to welcome everyone to our fourth quarter 2021 earnings conference.
Good afternoon, I would like to welcome everyone to our fourth quarter 2021 earnings conference call on the call today, we will start with comments from Peter Pharisee CEO of Sunpower, who will provide a summary of 2021 strategic plan accomplishments and discuss our forward looking commitments for 2022 and beyond.
Speaker 1: On the call today, we will start with comments from Peter Farrisee, CEO of SunPower, who will provide a summary of 2021 strategic plan accomplishments and discuss our forward-looking commitments for 2022 and beyond. Following Peter's comments, Manasiel, SunPower's CFO , will then review our fourth quarter financial results, as well as provide an update to our guidance. As a reminder, a replay of the call will be available later today on the Investor Relations page of our website.
Boeing Peter's comments C. L. Sunpower CFO will then review our fourth quarter financial results as well as provide an update to our guidance as a reminder, a replay of the call will be available later today on the Investor Relations page of our website.
Speaker 1: During today's call, we will be making forward-looking statements that are subject to various risks and uncertainties that are described in the Safe Harbor slide of today's presentation, today's press release, our 2021 10-K, and our quarterly reports on Form 10-Q . Please see those documents for additional information regarding those factors that may affect these forward-looking statements.
During today's call, we will be making forward looking statements that are subject to various risks and uncertainties that are described in the safe Harbor slide of today's presentation. Today's press release, our 2021 10-K, and our quarterly reports on Form 10-Q . Please see those documents for additional information regarding those factors that may affect these forward looking statements also we will reference certain non-GAAP .
Speaker 1: Also, we will reference certain non-GAAP metrics during today's call. Please refer to the appendix of our presentation as well as today's earnings press release for the appropriate GAAP to non-GAAP recommendations.
Metrics during today's call. Please refer to the appendix of our presentation as well as today's earnings press release for the appropriate GAAP to non-GAAP reconciliations finally to enhance the call. We have posted a set of Powerpoint slides on that we will reference during the call in the events and presentations page of the Investor Relations website in the same location. We have also posted a supplemental <unk>.
Speaker 1: Finally, to enhance the call, we have posted a set of PowerPoint slides on that we will reference during the call in the events and presentations page of the investor relations website. In the same location, we've also posted a supplemental data sheet detailing additional historical metrics.
A sheet detailing additional historical metrics.
Speaker 1: With that, I'd like to turn the call over to Peter Farrisee, CEO of SunPower. Peter. Thanks, Mike.
With that I'd like to turn the call over to Peter Pharisee CEO of Sunpower Peter.
Thanks, Mike and good afternoon, everyone.
Speaker 3: As you are aware, we reported our preliminary fourth-quarter results last month, and today we are reporting in-line results.
As you are aware, we reported our preliminary fourth quarter results last month and today, we are reporting in line results.
Speaker 3: Before Manu shares the result details, I will review the strength of the underlying business
Before my new shares the results details I will review the strength of the underlying business, our five strategic pillars and progress in 2021 and plans for 2022 for each pillar.
Speaker 3: our five strategic pillars in progress in 2021, and plans for 2022 for each pillar.
Please turn to slide number four.
Speaker 3: For the quarter, we continue to see strong top-of-funnel lead generation in our residential buildings.
For the quarter, we continued to see strong top of funnel lead generation and our residential business with nearly 22500, new customer bookings in the quarter up 42% increase over last year.
Speaker 3: with nearly 22,500 new customer bookings in the quarter, a 42% increase over last year.
Speaker 3: This led to a record 17,000 customers added in the quarter representing 31% year-over-year growth and our largest ever back.
This led to a record 17000 customers added in the quarter, representing 31% year over year growth and our largest ever backlog.
Speaker 3: Our total customer installed base stood at 427,000.
Our total customer installed base stood at 427000 at year end.
Speaker 3: We continue to sustain residential gross margins above 20% with 100 basis point increase versus last year at 25.6% for the quarter, a record high.
We continued to sustained residential gross margins above 20% with a 100 basis point increase versus last year at 25, 6% for the quarter a record high.
Adjusted EBITDA per customer before product and digital investment was $2200.
Speaker 3: before product and digital investment was $2,200.
Speaker 3: Our new home segment continues to grow strongly with a record pipeline of 66,000 customers as we enter 2022, more than 40% higher.
Our new home segment continues to grow strongly with a record pipeline of 66000 customers as we entered 2022 more than 40% higher than a year ago.
Speaker 3: Finally, Sunbelt Bookings exited 2021 with a run rate over $135.
Finally, sunbelt bookings exited 2021, where the run rate over $130 million.
Speaker 3: As we disclosed in our preliminary announcement last month, we experienced some installation delays in the fourth quarter due to weather and on the
As we disclosed in our preliminary announcement last month, we experienced some installation delays in the fourth quarter due to weather and on the crop.
Speaker 3: Similar to the rest of the industry and academy, we were impacted by some cost and availability pressure on our supply chain.
Similar to the rest of the industry and economy, we were impacted by some cost and availability pressure on our supply chain and labor pool.
Speaker 3: Despite these short-term challenges from the pandemic, we are very optimistic and excited about our future.
Despite these short term challenges from the pandemic, we are very optimistic and excited about our future as we execute our strategic plan to become the world's most customer centric home energy company.
Speaker 3: as we execute our strategic plan to become the world's most customer-centric home energy company.
Please turn to slide number five.
Speaker 3: As you know, we are transforming SunPower into a residential solar company focused on providing a world-class customer.
As you know we are transforming sunpower into a residential solar company focused on providing a world class customer experience that moves well beyond the initial system.
Speaker 3: that moves well beyond the initial system.
Speaker 3: sale to a full ecosystem of integrated products and services to create a life.
Sale to a full ecosystem of integrated products and services to create a lifetime relationship with Sunpower.
Speaker 3: I believe strategies are only as good as the quality of the leadership team behind them. So in 2021, I focused on building a talented and experienced leadership team to execute on the following five strategic pillars.
I believe strategies are only as good as the quality of the leadership team behind them. So on 2021 eye focused on building a talented and experienced leadership team to execute on the following five strategic pillars.
Pillar number one is customer care.
Customers are at the center of all of our discussions.
Speaker 3: After hiring Nuala Murphy last year as Vice President of Customer Care, we have been rapidly improving our entire approach for customer care.
After hiring newly Murphy last year, as vice President of customer care, we've been rapidly improving our entire approach for customer service.
Speaker 3: Our guiding principle is that if a customer discovers a problem,
Our guiding principle is that if a customer discovers a problem that is a defect.
Speaker 3: We are proactively striving to identify any issues well before our customers do, and then we will exceed their expectations with a timely
We are proactively striving to identify any issues well before our customers do and then we will exceed their expectations with a timely solution.
Speaker 3: Ultimately, I expect customer feedback to help guide our corporate and product development for ever-increasing levels of quality, which remains a major component of the SunPower
Ultimately I expect customer feedback to help guide, our corporate and product development for ever increasing levels of quality, which remains a major component of the Sunpower brand.
Speaker 3: We also recently hired Derek Cusack as our Executive Vice President for Supply Chain Quality and Field Operations.
We also recently hired Derek Kuzak, because our executive Vice president for supply chain quality and field operations.
Speaker 3: And residential solar today, the process to install and activate new solar and battery systems is slow.
And residential solar today, the process to install and activate new solar and battery systems is slow and bureaucratic.
Speaker 3: Our goal is to make the process of installing solar fast, easy, affordable, and enjoyable.
Our goal is to make the process of installing solar fast easy affordable and enjoyable.
Speaker 3: Derek and his teams are focused on innovations to deliver world-class customer
Derek and his teams are focused on innovation to deliver world class customer experience.
Speaker 3: Pillar two is growth. We are growing our market share with a world-class dealer network supported by the entire SunPower product, digital and financial platform.
Pillar two is growth we are growing our market share with a world class dealer network supported by the entire Sunpower product digital and financial platform.
Speaker 3: We are complementing that network with a high growth SunPower direct channel and a leading new homes business featuring new and expanded partner.
We are complementing that network with a high growth Sunpower direct channel and a leading new homes business, featuring new and expanded partnerships.
Speaker 3: In October , we welcome Ben Peterson and the Blue Raven team into the SunPower family. Blue Raven is off to a...
In October we welcomed <unk> Peterson in the Blue Raven team ended the Sunpower family Blue.
Blue Raven is off to a terrific start this year.
Speaker 3: I'm pleased to report the integration process is going very well and we have already launched some power financial products.
I am pleased to report the integration process is going very well and we have already launched some power financial products and Blue River.
Speaker 3: We also recently hired June Savage as our chief marketing.
We also recently hired June summer J, as our Chief marketing Officer.
Speaker 3: June comes to us from Rex and Spotify and will help guide the company's customer acquisition and brand strategy.
June comes to us from Brexit Spotify and will help guide the company's customer acquisition and brand strategy.
Speaker 3: Under June's leadership, our goal is to build a true direct-to-consumer brand with a much more cost-efficient customer acquisition process.
Under <unk> leadership, our goal is to build a true direct to consumer brand with a much more cost efficient customer acquisition process.
Pillar three is best and affordable products, we are expanding our offerings to include not only our premium solar system Sunpower has been known for but also an array of quality and affordable products.
Speaker 3: We are expanding our offerings to include not only our premium solar system SunPower has been known for, but also an array of quality and affordable products.
Speaker 3: We recognize the value of a lifetime customer relationship and we will nurture that by providing an entire ecosystem of fully designed and integrated products and services.
We recognize the value of a lifetime customer relationship and we will nurture that by providing an entire ecosystem of fully designed and integrated products and services that are simple to use and money savings with clean and reliable energy at their core.
Speaker 3: that are simple to use and money savings with clean and reliable energy of
Speaker 3: As you know, we hired Nate Coleman as our Chief Products Officer in November and Nate has already accelerated this effort.
As you know we hired <unk> <unk> as our Chief product Officer in November and Nate has already accelerated this effort.
Pillar four is digital innovation R.
Speaker 3: Our vision is to make buying solar as easy as it is to buy a book on it.
Our vision is to make buying solar as easy as it is to buy a book on Amazon.
Speaker 3: To accelerate innovation of the customer experience, we recently hired Ellen Kinney, who's our Vice President for Digital Product.
To accelerate innovation of the customer experience, we recently hired Ellen Kinney, who is our vice president for digital products Ellen will help push our digital innovation strategy to include major upgrade to the MISO power App to provide a more efficient sales process more control options for our customers and.
Speaker 3: Ellen will help push our digital innovation strategy to include major upgrades to the My SunPower app to provide a more efficient sales process, more control options for our customers, and increased ease of use to boost adoption.
Increased ease of use to boost adoption.
Speaker 3: In addition, we are pleased to announce our most recent new hire, Kumar Brahmat, EVP of software.
In addition, we are pleased to announce our most recent new hire Kumar Rama EVP of software technology.
Speaker 3: Kumar is a world-class technology leader from Amazon who will build best-in-class solutions for our customers and dealers.
Kumar as a world class technology leader from Amazon, who will build best in class solutions for our customers and dealers.
Pillar five is world class financial solutions, we recently hired Jason Mcrae with the objectives to drive higher sales rates faster closings and a broader customer base, while contributing to our lifetime customer value.
Speaker 3: We recently hired Jason McRae with the objectives to drive higher sales rates, faster closings, and a broader customer base while contributing to our lifetime customer value.
Please turn to slide number six.
Speaker 3: We have already made major strides towards the achievement of our...
We have already made major strides towards the achievement of our strategic goals.
Speaker 3: First, we've made measurable progress towards improving customer care in 2021 with our commitment to proactively discover and correct issues before customers even notice whenever possible.
First we've made measurable progress towards improving customer care in 2021, with our commitment to proactively discover and correct issues before customers even notice whenever possible.
Speaker 3: Our handling of the recent connectors issue on the commercial equipment reflects this philosophy.
Our handling of the recent connectors issue on the commercial equipment reflects this philosophy.
Speaker 3: Additionally, we've reduced customer issue resolution time by greater than 50%, and the number of customer interactions required to obtain resolution have improved by 1,300 basis points into the high double digit.
Additionally, we reduced customer issue resolution time by greater than 50% and the number of customer interactions required to obtain resolution have improved by 1300 basis points into the high double digits.
Speaker 3: Second, Blue Raven Solar expands our presence outside California and adds firepower to our direct channel, especially in states without a significant sun-powered dealership network and no or low sun power.
Second Blue Ravens solar expands our presence outside California, and adds firepower to our direct channel, especially in states without a significant sunpower dealership network and know where our low sunpower share.
Speaker 3: Our pipeline of potential new home installations continues to grow.
Our pipeline of potential new home installations continues to grow.
Speaker 3: We executed an exclusive agreement with Toll Brothers last year in California that provides a framework for further expansion nationally.
We executed an exclusive agreement with toll brothers last year in California that provides a framework for further expansion nationally.
Speaker 3: We grew our market share in new homes and continue to work towards new partners.
We grew our market share in new homes and continue to work towards new partnerships.
Speaker 3: We announced our 25 by 25 initiative in 2021, which includes the goal of diversifying our residential customer base to include 25% from historically underrepresented communities by 2020.
We announced our 25 by 'twenty five initiative in 2021, which includes the goal of diversifying our residential customer base to include 25% from historically underrepresented communities by 2025.
Speaker 3: We're very proud of this commitment, which we will meet with new high-value product offerings at various price points, among other initiatives.
We're very proud of this commitment, which we will meet with new high value product offerings at various price points among other initiatives.
Speaker 3: We've already added new financial products for customers with expanded eligibility and low interest rates to help capture this important market.
We have already added new financial products for customers with expanded eligibility and low interest rates to help capture of this important market segment.
Speaker 3: Third, on the product side, we restarted sales of our SunVault storage product last summer with rapidly growing bookings and healthy...
Third on the product side, we restarted sales of our sunbelt storage product last summer with rapidly growing bookings and healthy inventory.
Speaker 3: We also recently introduced our first residential virtual power plant offering under Connected Solutions.
We also recently introduced our first residential virtual power plant offering under connected solutions.
Speaker 3: This is a program that enables our customers to receive payments from their interconnected utility in exchange for degrees of partial control over customer Sunvolt payments.
This is a program that enables our customers to receive payments from their interconnected utility in exchange for degrees of partial control over customer son volt systems.
Speaker 3: We are also very pleased to announce our new partnership with home connect that we expect will expand our ability to bring financial value to customers quickly and meeting.
We are also very pleased to announce our new partnership with AUM connect that we expect will expand our ability to bring financial value to customers quickly and meaningfully.
Speaker 3: Most importantly, these programs bring real, tangible benefits to utilities and their non-solar customers as well. They provide a source of highly distributed storage that can help offset the need for distribution upgrades as increasing numbers of electric vehicles and rooftop solar systems get interconnected.
Most importantly, these programs bring real tangible benefits to utilities and their non solar customers as well.
They provide a source of highly distributed storage that could help offset the need for distribution upgrades as increasing numbers of electric vehicles and rooftop solar systems get interconnected.
Speaker 3: Fourth, as I mentioned, we have the right leadership team now in place to accelerate our digital efforts, to enhance the MySunPower app, as well as our design software, to greatly support both our customers and our sales.
Fourth as I mentioned, we have the right leadership team now in place to accelerate our digital efforts to enhance the my Sunpower app as well as our design software to greatly support both our customers and our sales teams.
Speaker 3: Fifth, SunPower Financial was launched in December , which provides us a platform for off-balance sheet customer financing, and we entered into a forward-flow loan purchase agreement with an affiliate of Credit Suisse.
Fifth Sunpower financial was launched in December which provides us a platform for off balance sheet customer financing and we entered into a forward flow loan purchase agreement with an affiliate of credit Suisse.
Speaker 3: Thanks to our strong leadership team and the dedicated mission-driven talent at SunPower, we got a lot done in 2021. And we have a lot more planned.
Thanks to our strong leadership team and the dedicated mission driven talented Sunpower, we got a lot done in 2021.
And we have a lot more planned for this year.
Please turn to slide seven.
Speaker 3: In 2022, we are leaning in and investing for growth.
In 2022, we are leaning in and investing for growth.
Speaker 3: You can expect to see meaningful progress along several strategic lines, including first, some powers making major investments
Can expect to see meaningful progress along several strategic lines, including first.
Sunpower is making major investments to upgrade customer services, we believe that exceeding customer expectations for support is key to creating and maintaining our premium brand and growing lifetime customer relationships.
Speaker 3: We believe that exceeding customer expectations for support is key to creating and maintaining our premium brand and growing lifetime customer relationships. You can expect more updates.
You can expect more updates about this initiative at our analyst day.
Speaker 3: Second, continued rapid expansion of sales throughout the country, especially outside California as we invest in our dealer network and expand our team at SunPower Direct.
Second continued rapid expansion of sales throughout the country, especially outside California, as we invest in our dealer network and expand our team at Sunpower direct.
Speaker 3: Third, we plan to introduce new high-value, high-performance panel and storage options.
Third we plan to introduce new high value high performance panel and storage options that will have strong appeal beyond the premium residential segment that we currently capture.
Speaker 3: that will have strong appeal beyond the premium residential segment that we currently capture.
Speaker 3: As we explore options in the coming weeks and months, we look forward to providing you with a more detailed update at our website.
As we explore options in the coming weeks and months, we look forward to providing you with a more detailed update at our analyst day.
Speaker 3: Fourth, we are making a digital product investment to improve our customer experience and our operation efficiency.
Fourth we are making a digital product investment to improve our customer experience and our operational efficiency.
Speaker 3: And finally, at SunPower Financial, we are reiterating our plan to increase the origination of residential financing from 35% in 2021 to 45% in 2022.
And finally at Sunpower financial we are reiterating our plan to increase the origination.
Residential financing from 35% in 2021% to 45% in 2022.
Speaker 3: This helps our customers qualify for financing quicker, while helping our dealers and direct salespeople close sales faster.
This helps our customers qualify for financing quicker, while helping our dealers and direct salespeople closed sales faster.
Speaker 3: It also brings new fee income that we've never previously kept.
It also brings new fee income that we have never previously captured.
Speaker 3: When you add all this up some power is on a path to change the world for millions of solar customers. We are passion.
When you add all of the sub Sunpower is on a path to change the world.
Millions of solar customers, we are passionate about our mission and we are just getting started.
Speaker 3: The seeds that we are planting now will bear fruit for years to come as we build the world's most customer-centric home energy.
The seeds, we are planting now will bear fruit for years to come as we build the world's most customer centric home energy company.
Speaker 3: Before I turn the call over to Manu, I'd like to address our new module supply.
Before I turn the call over to Manu.
I'd like to address our new module supply agreement.
Speaker 3: The new contract terms allow us to continue offering our existing residential products while exploring additional panel providers immediately.
A new contract terms allow us to continue offering our existing residential products, while exploring additional panel providers immediately.
Most importantly, the new deal will ensure we can serve customers and dealers given the strong demand for residential solar.
Speaker 3: I'll close my comments by re-emphasizing how pleased I am with the strength of customer
I'll close my comments by re emphasizing how pleased I am with the strength of customer demand.
Speaker 3: From my perspective, consumer demand is the single most important metric of our health. Now our focus is on
From my perspective consumer demand is the single most important metric of our health.
Now our focus is on serving and delighting our customers.
Speaker 3: We plan on having an analyst day on March 31st in San Diego. I look forward to seeing you there and introducing you to our leaders.
We plan on having an analyst day on March 31 in San Diego I look forward to seeing you there and introducing you to our leadership team.
Speaker 3: With that, I'd like to turn the call over to Manu CL, CFO of SunPower. Manu. Thanks, Peter. Please turn to slide nine. Our results for the quarter were in line with our pre-announcement on January 28th.
With that I'd like to turn the call over to <unk> CFO of Sunpower Mani. Thanks, Peter Please turn to slide nine.
For the quarter waiting in line with our pre announcement on January 20th via reporting negative $8 million of adjusted EBITDA, which includes the previously disclosed $27 million charge for connectors and commercial equipment with an incremental $4 million charge expected in the first quarter of 2020.
Speaker 5: We are reporting negative $8 million of adjusted EBITDA, which includes the previously disclosed $27 million charge for crack connectors in commercial equipment, with an incremental $4 million charge expected in the first quarter of 2020.
Two.
Speaker 5: It also includes $3 million of higher sales and marketing expense, as well as the $6.5 million impact from weather and COVID-related.
It also includes $3 million of highest sales and marketing expense as well as the $6 5 million impact from weather and Covid related delays.
Speaker 5: also reporting 385 million dollars of revenue, 12 percent higher than a year ago and 19 percent higher sequentially versus third quarter of 2021, driven by the underlying strength of our residential
It also reporting $385 million of revenue, 12% higher than a year ago, and 19% higher sequentially versus third quarter of 2021.
Driven by the underlying strength of our residential business.
Speaker 5: We exited the year with a healthy balance sheet with $127 million of unrestricted cash and another 2.5 million shares of Enphase held for future sales. As a reminder, the acquisition of Blue Raven Solar in October was funded with the prior sale of 1 million shares of Enphase. And I'm happy to report that the integration of the Blue Raven team is going very smoothly.
We exited the year with a healthy balance sheet with $127 million.
<unk> unrestricted cash and another $2 5 million shares of Enphase held for future sales as a reminder, the acquisition of dilutive in solar in October was funded with the prior sale of 1 million shares of Enphase and I'm happy to report that the integration of the Blue ribbon team is going very smoothly.
Speaker 5: We enter 2022 with a very strong residential fundamentals and a record high backlog, now the sole business of our company.
We enter 2022 with a very strong residential fundamentals and a record high backlog now the sole business of our company. Please.
Please turn to slide 10.
Speaker 5: Top-of-the-funnel customer appointments and bookings continue to climb, and our residential gross margins for the quarter were the highest in nearly six years. Specifically, I'm pleased to report that we exited 2021 with residential gross margins greater than 70 cents a watt at 25.6 percent, up 100 basis points year-over-year.
Top of the final customer appointments and bookings continue decline and our residential gross margins for the quarter were the highest in nearly six years, specifically I am pleased to report that we exited 2021 with residential gross margins greater than 70 cents of walk at 25, 6% up.
100 basis points year over year.
Speaker 5: We are very excited and optimistic about the opportunities in front of us and we remain committed to reinvesting the proceeds from the sale of Enfair shares and our CNI Solutions business back into the execution of our strategic plan. Please turn to slide 11. We are providing guidance for 2022 Adjusted EBITDA.
Very excited and optimistic about the opportunities in front of us and we remain committed to reinvesting the proceeds from the sale of Enphase shares in our C&I solutions business back into the execution of our strategic plan.
Please turn to slide 11.
We are providing guidance for 2022 adjusted EBITDA.
Range of 90 million to $110 million.
Relative to our private color for 2022, the midpoint represents a reduction of approximately $35 million.
Speaker 5: The midpoint represents a reduction of approximately $35 million with $15 million coming off as a result of our plan to exit.
With $15 million coming off as a result of our plan to exit the light commercial business this year.
The remaining $20 million impact to the residential business is primarily driven by an updated supply agreement with maxion.
Speaker 5: primarily driven by an updated supply agreement with Maxion as we accelerate the shift towards a more diversified customer offering and supply chain. It assumes limited customer price increases during the transition. The guidance continues to assume strong demand and is based on a projection of greater than 35% volume growth.
We accelerate the shift towards a more diversified customer offering and supply chain.
It assumes limited customer price increases during the transition.
The guidance continues to assume strong demand and is based on a projection of greater than 35% volume growth versus 2021 to a range of 73000 to 80000, new customers on <unk>.
<unk> for residential adjusted EBITDA per customer.
<unk> to a range of 2000 to $2400 book customer before product and digital Opex investment.
Speaker 5: SunPower is nearing the completion of its transformation to a residential customer-focused renewable.
Sunpower is nearing the completion of its transformation to a residential customer focused business.
Speaker 5: We are now firmly on a strategic path for rapid long term growth based on a growing basket of products and service offerings to our customers.
We are now firmly on a strategic path, but rapid long term growth based on our growing basket of product and service offerings to our customers.
Speaker 5: As such, we plan to provide annual guidance going forward for adjusted EBITDA, customer growth and residential adjusted EBITDA before product and digital OPEX investment for customers.
Such we plan to provide annual guidance going forward, but adjusted EBITDA customer growth.
<unk> residential adjusted EBITDA before product and digital Opex investment per customer.
Speaker 5: We think the valuation of a company is most easily and accurately determined by the.
We think the valuation of our company is most easily and accurately determined by these metrics, which will also be based on customers rather than megawatts an approach that makes more sense as we add more long term customer value for the initial sale of our solar system.
Speaker 5: which will also be based on customers rather than megawatts, an approach that makes more sense as we add more long-term customer value to the initial sale of a solar system. With that, operator, I would like
Operator, I would like to turn the call over for questions.
Speaker 8: Thank you, sir. As a reminder, to ask a question, you would need to press star one on your telephone. To withdraw your question, please press the pound key. Please stand by while we compile.
Thank you Sir.
As a reminder to ask a question you would need to press star one on your telephone so which are your question. Please press the pound key.
Please standby, while we compile the Q&A roster.
Speaker 8: I show our first question comes from the line of Sean Morgan from Evercore. Please go ahead.
I show our first question comes from the line of Sean Morgan from Evercore. Please go ahead.
Speaker 1: Hey, guys. Thanks for taking my questions. So, you know, Peter, I think on the call, you guys mentioned that you're leaning into the Blue Raven acquisition a little bit, and maybe that's a little bit in light of M3. So, as you're obviously going to be diversifying the portfolio away from California, what steps are you taking proactively to sort of, I guess, boost the growth that you're seeing outside of kind of that core, you know, historic base of your company?
Hey, guys. Thanks for taking my questions. So.
Peter I think on the call you guys mentioned that you are.
Leaning into the Blu ray of an acquisition a little bit and maybe.
Maybe that's a little bit in light of them three so.
As you guys Youre, obviously going to be diversifying the portfolio away from California, what steps are you taking proactively to sort of I guess boost.
Boost the growth that youre seeing outside of kind of that core historic base of your of your company.
Speaker 3: Yeah. Hi, Sean. Thanks for the question. You're absolutely right. We are looking to diversify the company across the country. What's interesting is if you take a look at the growth rate so far, just in the first quarter of this year, we're growing very fast in California, but we're actually growing as fast in the rest of the country. Particular strength in the Northeast and the South
Yes.
Hi, Sean Thanks for the question Youre, absolutely right. We are looking to diversify the company across the country. What's interesting is if you take a look at the growth rate. So far just in the first quarter of this year, we're growing very fast in California, but we're actually growing as fast in the rest of the country particulars.
Strength in the northeast and the southeast and you might remember Blue Raven was sort of that sweet spot right in the middle of the country, where we werent and Blue Raven will continue to expand and grow we're going to talk to you more about our blue Raven plans at analyst day, but we'll also so you ended the analyst day about how we plan to accelerate our.
Speaker 3: And you might remember Blue Raven was sort of that sweet spot right in the middle of the country where we weren't. And Blue Raven will continue to expand and grow. We're going to talk to you more about our Blue Raven plans at Analyst Day. But we'll also fill you in at Analyst Day about how we plan to accelerate our growth both in the Northeast and the Southeast.
Growth, both the northeast and the southeast the other interesting thing I'll highlight is it's not just solar panels.
Speaker 3: The other interesting thing I'll highlight is it's not just solar panels, battery storage I think is really beginning to take off and I think we're quite pleased with how we've started the year with our Sunvolt product.
<unk> storage I think is really beginning to take off and I think we're quite pleased with how we started the year with our sunbelt product.
Speaker 3: You know, I think it's both the combination of the extreme weather conditions that people are seeing in different parts of the country and the power outages that are driving more and more consumer demand. You know, one of the things we measure and share with you guys in color is our attach rate.
I think it's both the combination of the extreme weather conditions that people are seeing in different parts of the country and the power outages that are driving more and more consumer demand.
One of the things, we measure and share with you guys in color as our attach rate and our attach rate for sunbelt was trending, let's say, 25% to 28% and our direct channel last year.
Speaker 3: And our attach rate for Sunvolt was trending, let's say, 25%, 28% in our direct channel last year.
Speaker 3: That's up to the mid-30s, as of last week. And what's interesting is the attach rate is just as high non-California as it is in California. So as you can hear from our comments, we're extremely pleased with the sales that we're seeing. And we're so pleased to see that we're diversifying our sales base all across the country.
And that's up to the mid Thirty's as of last week and what's interesting is the attach rate is just as high non California as it is in California. So as you could hear from our comments, we're extremely pleased with the with the sales that we're seeing and we're so pleased to see that we're diversifying our sales.
Base all across the country.
Speaker 1: Okay, that's interesting. And, you know, since you brought up SunVault and you've been able to sort of bring that back online and get past, I guess, some of the supply chain pickups that you had previously, now that you're sort of pairing that with the wall box and the potential for the bidirectional charging, are you seeing any trends in terms of attach rate on SunVault versus people with EVs that might be looking to eventually incorporate car battery storage as part of their home energy solutions? Anything interesting that you're sort of picking up?
Okay that's interesting.
Since you brought up sunbelt.
You've been able to sort of bring that back online and get past I guess some of the supply chain hiccups that you had previously now that youre sort of pairing that with with the wall box.
The potential for bidirectional charging are you seeing any trends in terms of attach rate on sunbelt versus people with evs that might be looking to eventually incorporate.
Car battery storage as part of their their home energy solutions anything interesting that you're sort of picking up.
Speaker 3: Yeah, I think Sean, you guys have seen, we've announced a couple of programs with new homebuilders.
Yes, I think Sean you guys have seen we've announced a couple of programs with new homebuilders.
Speaker 3: So I think what I would predict is for this year, the channel that will this combination of solar plus battery plus EV will probably take off the fastest is with new homes.
No.
What I would predict is for this year the channel well this combination of solar plus battery plus CV will probably take off the fastest is with new homes and it kind of makes sense, because most new homeowners roll their solar package right into their mortgage which makes it very affordable and that's the perfect time to.
Speaker 3: And it kind of makes sense because most new homeowners roll their solar package right into their mortgage, which makes it very affordable. And that's the perfect time to kind of get all three done at the same time.
Get all three of them at the same time.
Speaker 3: We are excited to share with you coming up at our Analyst Day both our plans on the EV side and also some interesting plans related to battery storage with virtual PowerPoint.
Excited to share with you coming up at our analyst day, both our plans on the EV side and also some interesting plans related to battery storage with virtual power plants.
Speaker 3: So lots more to go there. I think the biggest thing that gets me excited about storage, coming back to Sunvolt for a minute, is that today we're really offering a product for partial home vac.
So lots more to go there I think the biggest thing that gets me excited about storage coming back to <unk> for a minute is that today, we're really offering a product for partial home backup.
Speaker 3: It's the product I have at my house. I think it's terrific. But I think if you take a look at the storage market, we're seeing a much stronger demand for whole home backup.
The product I have in my House I think it's terrific, but I think you can take a look at the storage market, we're seeing much stronger demand for whole home backup and so.
Speaker 3: And so we're going to talk more about our Sunvolt plans, and we see you at the end of March. But suffice to say, we're going to be aggressive at rolling out a number of new products in the whole home backup category. And that leads us to believe that this could be a terrific year on the Sunvolt side. OK, that's it.
We're going to talk more about our sunbelt plans and we see you at the end of March but suffice to say, we're going to be aggressive in rolling out a number of new products and the whole home backup category.
And.
That leaves us to believe that this could be a terrific year on the sunbelt side.
Okay, that's great. Thanks, Peter.
Yes.
Thank you.
Speaker 8: I didn't hear a lot about that in your discussion of this year's guidance. Can you talk about how that new initiative fits into your revenue mix?
I show. Our next question comes from the line of Pavel <unk> from Raymond James. Please go ahead.
Thanks for taking the question last December you.
Sunpower financial but.
But I didn't hear a lot about that in your discussion.
This year's guidance can you talk about how that new initiative fits into your revenue mix.
Speaker 3: Absolutely. Thank you for the question, Pavel. The hiring of Jason McRae has really allowed us to build out a proper financial products business. You know, the big goal that we laid out for you guys is that we're going to improve the number of systems financed from 35% of the total to 45% next year.
Absolutely. Thank you for the question Pavel.
The hiring of Jason the Gray has really allowed us to build out a proper.
Financial products business.
The big goal that we laid out for you guys is that we're going to improve the number of systems finance from 35% of the total to 45 next year.
Speaker 3: Maybe as exciting to me is we're building up a scale in both lease and loan that's going to allow us to really lower our cost of capital over time. And then maybe as exciting, and I can't wait to share this with you in more detail at the Analyst Day, is we're really building out the financial products for customers and dealers that will scale very, very well as our business gets larger and larger.
Maybe as exciting to me is we're building up our scale in both lease and loan that's going to allow us to really lower our cost of capital over time, and then may be as exciting and I can't wait to share. This with you in more detail at the analyst day is we're really building out the financial products.
For customers and dealers that will scale very very well as our business gets larger and larger so we're quite excited about that part of the business I think at the core of it it's not only about making some money from helping customers finance their solar we need to when you take a look at customer research the number one reason people.
Speaker 3: So we're quite excited about that part of the business. I think at the core of it, it's not only about making some money from helping customers finance their solar. When you take a look at customer research, the number one reason people say they can't get solar is they don't think they can afford to down payment.
Say, they can't get solar as they don't think they can afford to downpayment.
Speaker 3: The number two reason they say they can't get solar is they don't think they can get approved for financing.
Two reason they say they can't get solar they don't think they can get approved for financing.
Speaker 3: And we're excited to share with customers, you know, the new financial products we'll be rolling out this year and beyond that we think are going to make solar accessible to, you know, 100 million people here in the U.S. So lots more detail to come, but we're very excited to share more detail with you on that at the end of March.
And we're excited to share with customers.
The new financial products will be rolling out this year and beyond that we think are going to make solar accessible to.
100 million people here in the U S. So a lot more detail to come but but.
We're very excited to share more detail with you on that at the end of March.
Speaker 3: So just to clarify, are you going to be putting solar leases and loans on the SunTower balance sheet as a number of the other major national rooftop providers are doing?
So just to clarify are you going to be putting solar leases on loan.
On the Sunpower balance sheet as a number of the other major national.
Rooftop providers are doing.
Speaker 3: No, we are not changing our strategy on that at all. So we're still going to move these leases and loans off balance sheet. That means that we don't take the risk. But by actually beginning to do the loan servicing, which we plan to do this year, we'll have a much better understanding of what the real risk is. And we believe that would allow us to get a much lower cost of capital and a greater share of the economics of it.
No we are not changing our strategy on that at all so we will still going to move these leases and loans off balance sheet that means that we don't take the risk, but by actually beginning to do the loan servicing which we plan to do this year, we'll have a much better understanding of what the real risk is and we believe that would allow us to.
Get a much lower cost of capital and a greater share of the economics over time. So we'll walk you through that in more detail but.
Speaker 3: So we'll walk you through that in more detail, but no, we're not changing our strategy in terms of lifetime damage.
No we're not changing our strategy in terms of what type of LNG.
Okay clear enough. Thanks, Thank you.
You.
Thanks, Thank you.
Speaker 8: Our next question comes from the line of Brian Lee from Goldman Sachs, please go ahead.
I show. Our next question comes from the line of Brian Lee from Goldman Sachs. Please go ahead.
Speaker 9: Hey guys, good afternoon. Thanks for getting the questions. Maybe the first one...
Hey, Brian Hey, guys. Thanks, Rick.
Hey, guys. Good afternoon, thanks for taking the questions.
Maybe the first one just on <unk>.
Speaker 4: I understand some of the rationale, but given you're kind of moving the goalposts a little bit again, I just wanted to dive in a bit. So the adjusted EBITDA per customer...
The.
These new metrics right.
I understand some of the rationale, but given you're kind of moving the goalposts are little bit again.
Just wanted to dive in a bit so the adjusted EBIT per customer.
Speaker 4: First one on that, I guess, can you kind of break out, you know, as your customer mix is changing, you even acknowledge there's, you know, more than solar-only customers going forward. You're going to be selling a lot more services and other products. What sort of the $2,000 to $2,400 per customer range represent? Is that $2,000 for a solar-only and then at the higher end, you know, $2,400 represents like a solar-only or a solar-plus?
First one on that I guess can you kind of breakout as your customer mix is changing you can acknowledge there is more than solar only customers going forward youre going to be selling a lot more services and other products.
What's sort of the.
2000, $2400 per customer range represent is that 2001st solar only and then at the higher end 2400 represents like a solar or solar plus sunbelt battery customer just kind of give us a sense of the range of where your EBITDA shakes out on a.
Speaker 4: SunVault battery customer, just kind of give us a sense of the range of where your EBITDA shakes out on an individual customer basis because I feel like the blended mix kind of maybe doesn't represent where incremental customers are really being sourced at in terms of your economics. And then I have some follow-ups.
Individual customer basis, because I feel like the blended mix kind of.
Maybe it doesn't represent where incremental customers are really being sourced to add in terms of your economics, and then I had some follow ups.
Speaker 3: Hey Brian , it's Peter. So thank you. We are excited about the guidance that we're going to give as we go forward. I think when you think about a direct-to-consumer residential company that's focused on growth,
Hey, Bryan its Peter.
Thank you.
We're excited about the guidance. So we're going to give as we go forward I think when you think about a direct to consumer residential company. That's focused on growth I do believe customers and customer growth and then something like EBITDA per customer or maybe someday, we'll get to a lifetime value per customer those are the two things to look at so it really <unk>.
Speaker 3: I do believe customers and customer growth and then something like EBITDA per customer or maybe someday we'll get to a lifetime value per customer, those are the two things to look at to really measure the health and well-being and the valuation of the company. Let me have Manu answer a couple of your questions on the EBITDA calculation and how we've been thinking about it.
The health and wellbeing and the valuation of the company. Let me have <unk> answer a couple of your questions on the EBIT calculation and how we've been thinking about it.
Speaker 5: All right, Brian , so just to contextualize the three metrics we're giving, we've provided the number of customers in the past. I think it's a much better metric than just the megawatts, that what we've.
Brian So just to contextualize the three metrics you've provided.
Number of customers in the past I think it's a much better metric than just the megawatts that would be guided and it makes sense given that.
Speaker 5: guided, and it makes sense given that we are a Rezzy-focused or Rezzy-only company going forward. Then EBITDA per customer is the same basis as what we've talked now in the last couple of quarters.
Really focused on is the only company going forward and then EBITDA per customer is the same basis as what you've talked now in the last couple of quarters.
Speaker 5: You can reference the total year to what we had said in the third quarter message as well. And then just to answer the 2022 question regarding the EBITDA for customers, the assumption is that
You can reference the total year to what we had said in the third quarter metrics as well and then just to answer the 2022 question regarding the EBITDA per customer.
The assumption is that.
Speaker 5: What takes it from, let's say, the low end of the range to the high end of the range is a solar customer, depending on region, as well as a solar customer who's also taking financing from SunPower. So the range of 73,000 to 80,000 customers assumes customers that are going to take solar, and then some of the customers are going to take solar plus storage plus EV plus our financing.
What takes it from let's.
Let's say the low end of the range at the high end of the range is a solar customer.
Depending on region as well as our solar customer who is also taking financing.
Some sunpower so.
The range of 73000 to 80000 customers assumes customers that are going to take solar and then some of the customers that want to take solar plus storage plus EV, thus our financing.
And then EBITDA basically as last time.
Speaker 4: Okay, that's helpful context. I guess maybe as a follow-up to that, I may have the numbers off, but I think in the past you said, or last quarter you said $35 million on this product and digital spending effort, that was the drag on EBITDA.
Okay. That's helpful context, I guess, maybe as a follow up to that.
I may have the numbers off but I think in the past you said last quarter you said.
$35 million.
This product and digital spending answers that was a drag on EBITDA.
If I do that across your customer base, I guess or your customer count it sounds like it's about us $4 million to $500 million, sorry, 4% to $500 per customer EBITDA drag from those spending initiatives is that going to be pretty constant going forward and is there a reason to be stripping that I suppose because are those maybe essential.
Speaker 4: If I do that across your customer base, I guess, or your customer count, it sounds like it's about a $400 to $500 million, or sorry, $400 to $500 per customer EBITDA drag from those spending initiatives. Is that going to be pretty constant going forward, and is there a reason to be stripping that out, I suppose, because are those maybe essential to running the Resi Solar Segment, just trying to understand, you know, what that EBITDA drag is from that ongoing spend and if it changes over time?
So running the resi solar segment, just trying to understand.
What that EBIT drag is from that ongoing spend and if it changes overtime.
Speaker 5: Yeah, so what we had talked in the fourth quarter was about $35 million of incremental spend that we were financing effectively through.
Yes, so what we've talked in.
In the fourth quarter, it was about $35 million of incremental spend that we were financing effectively through.
Speaker 5: end phase proceeds that we sold in the third quarter of 2021.
Enphase proceeds that we sorting.
In the third quarter of 2021, just to buy the common back I think where it shows up is half of it shows up in the EBITDA per customer calculation and then the other half of it shows up in the product and digital Opex.
Speaker 5: Just to tie the comment back, I think where it shows up is half of it shows up in the EBITDA per customer calculation, and then the other half of it shows up in the products and digital op-eds.
Speaker 5: The way to think about the spend from a SunPower perspective, whether it's on a per-customer, I think 2022 is a high watermark and while we'll continue to spend on the growth of the business on a per-customer basis, that spend is going to be tapering off as we go from 22 to some of the other years.
The way to think about the spend on a from a sunpower perspective is that it's on a on a pro customer, but I think two.
2022 is a high water Mark and <unk> will continue to spend.
On the growth of the business on a per customer basis.
<unk> is going to be tapering off.
The growth from 'twenty two to some of the out years, Yes, I think what I'd add on that Brian is that from my time at Amazon.
Speaker 3: Yeah, I think what I'd add on that, Brian , is that, you know, from my time at Amazon...
Speaker 3: The two pieces of investment that scale the best over time are investing in software and investing in product.
Two pieces of investment that scale, the best over time, our spending.
Investing in software and investing in products.
Speaker 3: And the kind of investments that once you make them, they'll scale over a larger and larger customer base over time. So I just gave on the previous answer the example of financial products. A lot of what we're going to build this year is what we need for the next 10 years, you know, and beyond. And so the $35 million number may, you know, it's possible that could increase in absolute terms, but I think as a rate of the total, you know, I think that'll scale nicely over time and begin to shrink over time. Thanks, Brian .
And the kind of investments that once you make them build scale over a larger and larger customer base over time. So I just gave on the previous answer. The example of financial products a lot of what we're going to build this year is what we need for the next 10 years and beyond and so the $35 million number may it's possible that could.
Kris in absolute terms, but I think as our rates of the total I.
I think that'll that'll scaled nicely over time and begin to shrink over time. Thanks. Thanks, Brian .
Alright, Thanks, guys I'll take it offline.
Speaker 8: Thank you. Our next question comes from the line of Philip Shen from Roth Capital. Please go ahead.
Thank you.
Our next question comes from the line of Philip Shen from Roth Capital. Please go ahead.
Speaker 10: Hi everyone, thanks for taking my questions. First one's on the 22 Outlook.
Hi, everyone. Thanks for taking my questions first one is on the <unk>.
<unk> two <unk>.
Look.
Speaker 10: and 76,000 customers, how many of those are Blue Raven?
And.
70 to 76000 customers.
How many of those are blue Raven.
Guesstimate Ing 9000, with a strong growth outlook for Blue Raven, but just curious if you could help us understand ultimately what the organic growth is I'm guessing roughly 25% year over year and then the impact of Leerink <unk>. Thanks.
Speaker 10: strong growth outlook for Blue Raven, but just curious if you can help us understand ultimately what the organic growth is, I'm guessing roughly 25% year-over-year, and then
Speaker 3: Phil, we don't break out Blue Raven customers separately, but I would say you're in the ballpark. I think that's pretty close to what the number will be. We do think about constantly as our total direct channel, which includes SunPower Direct plus Blue Raven.
So we don't breakout blue apron customers separately, but I would say you are in the ballpark I think thats pretty close to what the number will be.
Do I think about constantly is our total direct channel, which includes sunpower direct plus blue Raven.
Speaker 3: We're very, very pleased with the growth and the profitability of that channel. So to give you some color on that, that was, let's say, 15% of our business before Blue Raven, became 20 by the end of the year, and we'll get to 30% of our total business this year.
We're very very pleased with the growth and the profitability of that channel. So to give you. Some color on that that was let's say, 15% of our business before Blue Raven became 20 by the end of the year.
We will get to 30% of our total business. This year. So not only is it growing a lot faster than our total business, but it's also a channel that's much more profitable for us. So we're quite pleased as I mentioned in my comments with the Blue Raven acquisition.
Speaker 3: So not only is it growing a lot faster than our total business, but it's also a channel that's much more profitable.
Speaker 3: So we're quite pleased, as I mentioned in my comments, with the Blue Raven acquisition, and both as them running as an independent company and also our ability to find synergies between the two companies. It's been terrific so far. And we're also very, very pleased with our SunPower director.
Both as them running as an independent company and also our ability to find synergies between the two companies it's been terrific. So far.
And we're also very very pleased with our Sunpower direct business.
Speaker 10: Great, thanks for the color, Peter. And then, as it relates to OMConnect, can you talk a bit more about the revenue model there and the go-to-market strategy, and what kind of impact to revenue margins could we see in 22 or in 23? Do you expect it to be meaningful, or is it still kind of going to be rampant?
Great. Thanks for the color Peter and then as it relates to own connect.
Can you talk a bit more about the revenue model there and the go to market strategy and what kind of impact to revenue margins could we see in 'twenty two.
And 23, you expect it to be meaningful or is it still kind of going to be ramping from smaller numbers.
Speaker 3: Thanks, Phil. I'm so glad you brought up OHM because I can't wait to spend time with you guys on this. It's a terrific partnership. I don't want to give away all of the punchlines for our Analyst Day, but let me give you a couple sneak previews. First of all, there's a couple things about OHM that we find really attractive.
Yes, thanks, Phil.
So glad you brought up on because I can't wait to spend time with you guys on this.
Terrific partnership I don't want to give away all of the punch line for our analyst day, but let me give you a couple a sneak preview. So first of all there is a couple of things about that we find really attractive one is for all the talk about virtual power plants. The hardest thing is getting the customer experience right.
Speaker 3: For all the talk about virtual power plants, the hardest thing is getting the customer...
Speaker 3: you know, if you think about the idea that you're going to let someone else control your battery storage, or someone else control your
Think about the idea that youre going to let someone else control your battery storage or someone else control. Your thermostat, that's not something that most people wake up every day and are comfortable with so they have really demonstrated in our opinion the ability to.
Speaker 3: That's not something that most people, you know, wake up every day and are comfortable with. So, they have really demonstrated, in our opinion, the ability to influence customer behavior in a very positive way. And we're going to talk to you about that. And then also, they're really the first company that we've seen that's been able to...
Fluent customer behavior in a very positive way and we're going to talk to you about that and then also they are really the first company that we've seen that's been able to connect consumer energy with the energy markets. So there's a lot of talk about PPP, but when you actually take a look at who has made a direct connection to the bidding and energy.
Speaker 3: connect consumer energy with the energy market.
Speaker 3: So there's a lot of talk about VPP, but when you actually take a look at who's made a direct connection to the bidding and energy between residential actions, if you will, and the energy markets, I think these guys are way ahead. We're going to give you a lot more details at the end of the day about our partnership.
Between residential batteries that are residential actions, if you will and the energy market. So I think these guys are way ahead.
We're going to give you a lot more details at the analyst day about our partnership but our partnership is a very big and comprehensive one we're going to be their exclusive partner in things like solar and battery storage and I really want to get into a lot more detail with all of you on our VP investments and the seeds were planning to add.
Speaker 3: is a very big and comprehensive one. We're going to be their exclusive partner on things like solar and battery storage.
Speaker 3: and I really want to get into a lot more detail with all of you on our VPP investments and the seeds we're planting. To answer your last question directly, I don't think it'll be material in 2022.
Your last question directly I don't think it'll be material in 2022, I think it's early theres still a lot for us to figure out, but I will tell you that it's one of the seeds that.
Speaker 3: I think it's early, there's still a lot for us to figure out, but I will tell you that it's one of these seeds that is exciting because if you took a look at the three-year plan and the five-year plan, I think it does become a very material part of our business. The economics are really attractive.
<unk> is exciting because if you if you took a look at the three year plan and the five year plan.
It does become a very material part of our business. The economics are really attractive and frankly I've been looking for an opportunity for us to work productively with utilities. I mean this is a this is a win win win if we can get the consumer behavior right consumers get money from it utilities, hopefully save having to build.
Speaker 3: And frankly, I've been looking for an opportunity for us to work productively with utilities. I mean, this is a win-win-win if we can get the consumer behavior right. Consumers get more.
Speaker 3: Utilities hopefully save having to build new distribution because they can take advantage of distributed energy storage, and we think we can be a partner to both and participate in the economics. So I look forward to going a lot deeper on that topic with all of you in about a month. Thanks.
New distribution because they can take advantage of.
Distributed energy storage and we think we can be a partner to both and participate in the economics. So I.
We look forward to going a lot deeper on that topic with all of you.
In about a month.
Speaker 10: One last one, if I may, in terms of the Enphase partnership, there might be some near-term deadlines there in terms of how things are governed. What do you expect there? And do you have any real alternatives besides Enphase?
Great. One last one if I may in terms of the Enphase partnership there might be some near term.
Deadlines there in terms of.
How things are governed what do you expect there.
And do you have any real alternatives. Besides that says if you want to go a different direction.
Speaker 3: So on the in-phase partnership, we have a partnership agreement that we're together through Q1 of 2024. We're pleased with that agreement. We're pleased with the relationship we have with them, and I think it's business as usual for 2022. Great. Thanks.
So on the Enphase partnership we have a partnership.
<unk> says that we're together through Q1 of 2024.
We're pleased with that agreement, we're pleased with the relationship we have with them.
And I think it's business as usual for 2022.
Great. Thanks for.
Taking all the questions I'll pass it on Peter.
Okay. Thank you Phil Thanks Bill.
Speaker 8: Thank you. Our next question comes from the line of Kashi Harrison from Piper Sandler. Please go ahead. Good afternoon, everyone.
Thank you our.
Our next question comes from the line of Kashi Harrison from Piper Sandler. Please go ahead.
Good afternoon, everybody and thank you for taking the questions.
Speaker 6: So, on slide 11 of the investor deck, so you indicate that guidance excludes the outcome of NEM and potential ITC changes. I was wondering if you could maybe just help us with some sensitivities on those numbers if the proposed decision from December comes to fruition. And in addition, can you also provide us with some sensitivities if the ITC changes?
So on slide 11 of the Investor deck. So you indicate the guidance excludes the outcome.
Of Nam and potential ITC changes.
I was wondering if you could maybe just help us with some sensitivities on those numbers if.
If the proposed decision from December comes to fruition.
And in addition can you also provide us with some sensitivities.
The ITC changes.
Speaker 3: Yes, let me, before I turn it over to Manu for the sensitivity, let me just make a quick comment on both.
Yes, let me before I turn it over to monitor for the sensitivities. Let me just make a quick comment on both I think.
Speaker 3: You know, as the initial negative news came out on California NEM in December , we did believe that that was going to be probably an overreaction in the market, and I think that's proven out to be the case. The events have taken place since.
As the initial negative news came out on California them in December we did believe that that was going to be.
Really an overreaction in the market.
That's proven out to be the case.
The events of <unk>.
Have taken place.
Speaker 3: You know, there's an enormous amount of energy from California residents and California employees in the solar and renewable energies business to make sure that the outcome here is much more moderate and much more favorable for the solar customers and the solar employees.
There is an enormous amount of energy from California residents and California employees in the solar and renewable energy business to make sure that the outcome here is is much more moderate and much more favorable for the solar customers in the solar employees. So I would I would just tell you that in California, we're cautiously optimistic.
Speaker 3: So I would just tell you that in California, we're cautiously optimistic that the outcome here will be much improved over the initial reports and that we'll have an outcome at some point in Q2.
The outcome here.
We will be much improved over the initial reports and that will.
We will have an outcome at some point in Q2.
Speaker 3: And then on the ITC, before Bhanu goes through the sensitivities, I think we feel in a similar direction. I think you've seen comments from Senator Manchin that he supports.
And then on the ITC before volume goes through the sensitivities I think we feel in a similar direction I think you've seen comments from Senator mentioned that he supports.
Speaker 3: legislation related to climate and clean energy provisions. There seems to be a lot of support across the Democratic Party for that in the Senate, and we're cautiously optimistic that that will get moved along.
Legislation related to.
Climate and clean energy provisions, there seems to be a lot of support across the Democratic party for that in the Senate and.
We're cautiously optimistic that that will get.
Moving along over the next few months, but I know you want to talk little bit about the subsidiaries under them and ICC side, yes. So on the ITC if actually we actually covered that in our last earnings call and I think maybe articulated it is we should see the benefit.
Speaker 3: Manu, you want to talk a little bit about the sensitivities on the NEM and ITC side? Yes. On the ITC, we actually covered that in our last earnings call and I think the way we articulated it is we should see the benefit.
Speaker 5: either from a pricing perspective or increased volume, and I think we calculated using certain growth assumptions about a $14 per share benefit to SunPower. We can go into a lot more detail on the callback if you like.
Either from a pricing perspective on increased volume and I think we calculated at using certain growth assumptions about $14 per share benefit to sunpower.
We can go into a lot more detail on the call back if you like.
And on the NIM sensitivities, if you have that.
Speaker 5: I think we, look, from a NEM perspective, I don't think we've articulated any sensitivities in the past. I think, like what Peter said, we think we'll all get into the right place from an industry perspective and the policy makers. I think as the policy unfolds, you know, we may see some near-term demand, but I think it will be too premature at this point to provide any sensitivities.
I think we look from a NIM.
<unk> perspective, I don't think we've vivek.
You've articulated any sensitivities in the past I think like what Peter said.
I'll get into the right place from a.
An industry perspective, and the policymakers I think as.
Sure.
As the policy unfolds, we may see some near term.
<unk>, but but I think it's a bit too premature at this point to provide any sensitivities there.
Speaker 6: Okay, and as my second question, so on slide 11, you indicated that the decline in adjusted EBITDA per customer in 2022 was driven by higher sales and marketing.
Okay and as my my second question.
On slide 11, you.
You indicated that the decline in adjusted EBITDA per customer in 'twenty, two was driven by higher sales and marketing.
Speaker 6: uh... in the footnote i was wondering if you just maybe give us some some medium term targets on
In the footnotes I was wondering if you could just maybe give us some some medium term targets on where you think this this estimate could go thinking through may.
Speaker 6: where you think this estimate could go, thinking through, you know, maybe rising storage attachment rates and then also the transition from 35% loan origination to, you know, where that might go in a few years. Thank you.
Maybe rising storage attachment rates.
And then also the transition from 35% loan origination too.
Where that might go in a few years. Thank you.
Speaker 5: Yeah, so I think the way to think about, so let me take a step back, right? As we've exited 2021, you've seen two things. One, the Resi fundamentals continue to be amazing for us, which kind of, you know, leads into the focus on that business for us. And you can see that in gross margins, you can see that in bookings.
Yes so.
I think the way to think about so let me take a step back.
As they've existed 2021, you've seen two things one there is the fundamentals continue to be amazing.
Got us, which kind of leads into the focus on that business for us and you can see that in gross margins you can see that in bookings.
Speaker 5: Also, we are seeing that the top of the funnel is extremely strong, and the investment in sales and marketing expense
Also.
We are seeing that the top of the funnel is extremely strong and the investment in sales and marketing expense.
Speaker 5: to contextualize is both to grow geographically as well as...
To contextualize, both to grow geographically as well as well as.
Speaker 5: helps with broadening our product portfolio more of a fit on the analyst day, right? In terms of from a modeling perspective, as you bridge from our current guidance to where it could go, a couple of things that will provide tailwinds, one is increased financing.
<unk> helps with broadening our product portfolio motive motor.
The analyst day right in terms of from a modeling perspective as as you bridge from our current guidance to where it could go a couple of things that will provide tailwind as Brian has increased financing.
Speaker 5: We've talked about every customer that buys a system and a finance system compared to a non-finance is about a thousand bucks a customer, so that should...
We've talked about.
Every customer that buys a system on a finance system compared to.
Our non finance is about 1000 bucks a customer so that should that.
Speaker 5: should bring the overall margin up. Storage, attached rates as they increase and as the business ramps.
Being the overall margin up.
Storage attach rates as the increase in it.
As the business ramps are there.
Speaker 5: or that part of the business plans, that should be incremental margin to the EBITDA per customer, as well as the EV attach rates, all those three things should...
Part of the business that should be incremental margin to the EBITDA per customer.
As well as the Evs that fits.
All of those three things should increase the EBITDA per customer going from 'twenty, two 'twenty, three and then as Pete and I talked about earlier.
Speaker 5: increase the EBITDA per customer going from 22 to 23. And then as Peter and I talked about earlier, some of the investments we are making in the platform and growth in 22 should start to paper off on a per customer basis. And then the volume leverage really kicks in as you go from 22 to the out year.
Some of the investments, we're making into platform and growth in 'twenty two.
Should start to taper off on a per customer basis, and then the volume leverage really kicks in as you go from 22 to the out years, yes.
Speaker 3: The only thing I'll add is on where do we go after 45%?
The only thing I'll add is.
And where do we go after 45% two things for context, one is we're still the only.
Speaker 1: Two things for context. One is we're still the only residential solar company that offers all three financial options. So for customers, we want them to make the choice that's best for them, and that could be cash, lease, or loan.
Solar residential solar company that offers all three financial option. So for customers, we want them to make the choice that's best for them and that could be cash lease or a loan.
Speaker 1: But of the customers who prefer not to pay cash, which is still the majority, we are on a path to have 100% of that business financed by us over time. So the 45% that we're at for this year is just the beginning in the way we look at it. Obviously, we're getting 100% of our own direct channel today, but as Jason and his team have a chance to build out some world-class financial products for our dealers, I think we see the opportunity accelerating as we go.
Of the customers, who prefer not to pay cash which is still the majority.
We are on a path to have a 100% of that business financed by us over time, so the 45% that we're at for this year is just the beginning and the way we look at it obviously, we are getting 100% of our own direct channel today, but as Jason and his team have a chance to build out some world class financial products for our <unk>.
Dealers.
I think we see the opportunity accelerating as we go.
Thank you.
Speaker 7: Thank you.
Thank you.
Speaker 8: show our last question comes from the line of Tristan Richardson from Trobis. Please go ahead. I appreciate the comment.
I show our last question comes from the line of Tristan Richardson from <unk>. Please go ahead.
I appreciate the comments this evening guys.
Yes.
Speaker 6: One on the EBITDA as well as customer growth guidance for 2022, does that include the impact of the previously discussed kind of connectors charge that occurs in one queue as well? And then also the
One on the EBITDA.
EBITDA as well as customer growth guidance for 2022.
Does that include the impact of.
The previously discussed kind of connectors charged that occurs.
<unk> as well.
And then also the.
Speaker 6: factors you talked about impacting 4Q, namely the push into 2022 from weather, is that included in that guidance both on a customer and EBITDA basis?
Factors, you talked about impacting <unk>, namely the.
Push out into 2022 from weather is that included in that guidance, both on a customer and EBITDA basis.
The answer is both are included.
Speaker 6: Okay, helpful. And then, you know, maybe just a quick one to follow up on the light commercial exit. Is there any change to sort of a, you know, cost structure from an OPEX perspective going forward? You know, savings, harvest, et cetera. Changes to
Okay. Okay.
Okay helpful. And then maybe just a quick one to follow up on the light commercial exit.
Is there any change to sort of the cost.
Sure from an Opex perspective going forward.
Savings harvest et cetera.
Changes to overall cost structure by by exiting that piece of the business.
Speaker 1: Well, you know, in CVAR, most of the employees we've had working on CVAR were shared between our residential business and CVAR. So to give you a quick, direct answer to your business, no, I don't see a big OpEx impact. We have a small, single-digit sales team that will be impacted, but I think most of the employees will reallocate to this faster-growing and more profitable residential business immediately.
Well see.
<unk> most of the employees, we've had working on CVR were shared between our residential business and see var. So to.
To give you a quick direct answer to your business no I don't see a big Opex impact we have a small single digit sales team that will be impacted but I think most of the employees will reallocate to this.
Faster growing and more profitable residential business immediately.
Helpful. Appreciate it guys. Thank you.
Speaker 1: Thank you. I guess as we wrap up for today, I want to thank everybody for their questions, and I just have two quick closing comments. One of them is I just want to recognize that we've now fully made this transition from a company that was in a lot of different businesses, panels and utility-scale solar and commercial and industrial and residential, to a company that's now solely focused on the residential solar business, as we've
Thank you I guess as we as we wrap up for today I want to thank everybody further questions and I just have two quick closing comments one of them is I just want to recognize that we've now fully made this transition from a company that was in a lot of different businesses panels, and utility scale solar and commercial and industrial and residential.
To accompany this now solely focused on the residential solar business as we go forward. What I took my first earnings call last may with many of you. Most of you had a very similar question, which is what are you going to do with the commercial business in the <unk> business. We've now successfully answered those questions and now.
Speaker 1: Well, I took my first earnings call last May with many of you. Most of you had a very similar question, which is, what are you going to do with the commercial business and the CVAR business? We've now successfully answered those questions, and now you can see our strategy of where we're headed as we move forward.
You can see our strategy of where we're headed as we move forward. We are extremely excited to host all of you March 31 in San Diego for our Analyst day. This will be my first chance to get a chance to interact with all of you and for you to meet our team. So let me just give you a quick sneak preview of some of the topics that we plan to talk about.
Speaker 1: We are extremely excited to host all of you March 31st in San Diego for our Analyst Day. This will be my first chance to get a chance to interact with all of you and for you to meet our team. So let me just give you a quick sneak preview of some of the topics that we plan to talk about.
Speaker 1: First of all, we have a very exciting product strategy.
First of all we have a very exciting product strategy and that includes the opportunity for us to pause.
Dissipate in a segment of the business that we've never participated in before and Thats. The main stream or mass market panel business. So our existing supplier arrangements. So let me really allowed us to participate in the premium segment. We are extremely excited as we move forward to finally have a product in the much larger than <unk>.
After growing mass market segment, and if you talk to our dealers. It's the number one thing they bring up when I talk to them. So we're very excited to share our plans with you on that too we're going to talk to you as I mentioned a lot more about financial products, but we're also going to talk a lot more about what are the things that we're going to do to drive lifetime customer value up over.
Speaker 1: Two, we're going to talk to you, as I mentioned, a lot more about financial products.
Speaker 1: But we're also going to talk a lot more about what are the things that we're going to do to drive lifetime customer value up over time. That includes...
Speaker 1: Many more products in the battery storage side, exciting opportunities for us in the EV charging side, and a discussion that I can't wait to have with all of you about our approach in virtual power plants or VPP, including our partnership with HomeConnect. And then finally, I'll just suffice to say, as we've started the year,
That includes <unk>.
Any more products in the battery storage side exciting opportunities for us in the EV charging side.
And.
A discussion that I can't wait to have with all of you about our approach in virtual power plants or VP, including our partnership with <unk> connect and then finally I'll just suffice to say as we've started the year, we're seeing tremendous growth in the upper part of our funnel and if you said to me what's the best leaning.
Speaker 1: we're seeing tremendous growth in the upper part of our funnel. And if you said to me, what's the best leading indicator of the health of this company and this business, it's always that upper part of the funnel. So we've committed in our guidance for 35% customer growth this year, but I will tell you right now at the top of the funnel, we're seeing 3x that growth in things like raw appointments and marketing qualified leads.
Indicator of the health of this company in this business, it's always been a part of the funnel. So we've committed in our guidance for 35% customer growth. This year, but I will tell you right now at the top of the funnel, we're seeing three ex that growth in things like raw appointments and marketing qualified leads and then the other interests.
Speaker 1: And then the other interesting thing is that we're seeing much higher close rates than we did a year ago.
The thing is that we are seeing much higher close rates than we did a year ago. Those are both very good leading signals about where this business is headed thanks to all of you and look forward to seeing you March 31 down in San Diego.
Speaker 1: Those are both very good leading signals about where this business is headed. Thanks to all of you and look forward to seeing you March 31st down in San Diego. Thanks.
Speaker 7: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.