Q1 2025 Complete Solaria Inc Earnings Call
<unk> earnings call.
A few housekeeping items before we get started today first all lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time and if you have joined via a webinar. Please use the right the raise hand icon, which can be found at the bottom of your webinar application.
For our audiences watching via the webcast. There is a ask a question tab on the right.
Outside fly out of the screen, where you can submit a written question.
Please note todays conference call may contain projections and other forward looking statements. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in our statements.
Also on today's conference call, we may discuss certain non-GAAP financial measures a reconciliation of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures.
It can be found in the press release issued this morning.
Speaker Change: I'll now turn the call over to T J Rodgers Sunpower as chairman and CEO.
Good morning.
Speaker Change: My Name's T J Rodgers.
Speaker Change: Sunpower Oh, we've got.
Speaker Change: The quarterly call and I've got some added remarks.
Speaker Change: Did I actually delivered at the company, so let's get all of them.
Speaker Change: Okay.
Speaker Change: Right.
Speaker Change: Cheers.
Speaker Change: <unk>.
Okay.
Speaker Change: Backwards.
Speaker Change: Brian.
Make it work and see what happens from here.
Speaker Change: Okay, I'm trying to get rid of that.
Speaker Change: We apologize a criticism.
Speaker Change: Not okay.
Speaker Change: Did you guys give me a left handed mouse.
Speaker Change: Can I just have a normal mouse.
Speaker Change: They're trying to healthy <unk>.
Speaker Change: Give me a left handed miles so everything I'd use backwards.
David Mouse: He just turned into love David Mouse.
Speaker Change: One radiated mouse that works.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: Okay. The title as some of our reports SKU on 25 80 million in revenue 1.3 and profit.
Speaker Change: That's the Big news really Hum I'll talk later.
Speaker Change: About.
Speaker Change: Yeah, They will actually show it to you the numbers are here. So we've got as usual GAAP and non-GAAP numbers.
Speaker Change: The numbers I'm focusing on here.
Speaker Change: Our Q1 'twenty five.
Speaker Change: non-GAAP numbers and so this is the.
Speaker Change: Sure.
Speaker Change: This was a big news, we've got 12, one point $27 million in profit.
Speaker Change: Up from minus 5.9 in the prior quarter, the GAAP numbers have bigger losses.
Speaker Change: Those are all related to the acquisition and the write offs that we've had we actually were profitable both profitable and cash flow positive in the quarter. That's a good financial news.
Speaker Change: I'll point out on the <unk>.
Speaker Change: non-GAAP numbers. This is not what we reported last quarter. It was $81 1 million we reported.
Speaker Change: This is what we would have reported with the new tree company revenue recognition rules.
Speaker Change: Reason I'm, telling you that is on the number was 81, one this was not 47% was 36%.
Speaker Change: And on advice lawyers I I put the new numbers in their disease are the quote audited numbers, who made our numbers better.
Speaker Change: And I don't want to report better numbers here today.
Speaker Change: Okay. This is our profit.
Speaker Change: Q3 is.
Speaker Change: A truly unofficial number where I simply added the profitability of the three companies the merger occurred right here.
Speaker Change: And then we lost 5.9 in Q4 and a profit in Q1, so that is our curve. These.
Speaker Change: These are audited numbers these.
Speaker Change: These are not.
Speaker Change: I'd like to congratulate our team we broke the proppant barrier starting here 180 days later Bam we've got profit.
Speaker Change: The rest of this report is really the financial news, we have a relatively simple company.
Speaker Change: The rest of their board I'm going to talk about what went on and I'm going to talk a little bit about our view of the future.
Speaker Change:
Speaker Change: Our $80 million was in line with expectations. We are currently in $80 million plus per quarter company revenue.
Speaker Change: Next step is to move away from that I'll talk about that later.
Speaker Change: Sunpower the new company the new name is now properly and legally staffed.
Speaker Change: So if you look at the head count history. If you go back to the third quarter of last year.
Speaker Change: The tree combined companies had.
Speaker Change: 30 3500 employees.
Speaker Change: The first stop was poached merger day, one we chopped on immediately to 13 41.
Speaker Change: One quarter post merger.
Speaker Change: We were down to 11 40, I'm going to talk about these layoffs of their critical how we do them.
Speaker Change: Whether or not they hurt the company does matter.
Speaker Change: And today, we're down at 906.
Speaker Change: The target head count back here one after we merged was 12 25.
Speaker Change: The target head count here, including the beginning of this quarter was 980 <unk> reason for those targets I will show you later.
Speaker Change: So.
Speaker Change: The good news is of course, if you're worried about money. This is a dramatic cost cutting effort.
Speaker Change: Problem, you've got is that.
You can't let harm the company and you have to balance those off against each other.
Speaker Change: Here's how we do that.
This is a memo.
Speaker Change: Just in our standard format, we haven't changed our logos yet.
Speaker Change: And this is a thing called the requisition. The auction is the process I used back in the semiconductor industry.
Speaker Change: To maintain the right head count very tough industry for maintaining profitability.
Speaker Change: Page one.
Speaker Change: He says how many people we had at the beginning of the week, who left who who wants to come in and was there any head count. So in this particular case, we actually added people very rare obviously given that curve.
Speaker Change: And ended up at 907. So this was the third day of a workweek 17.
Speaker Change: Then down here is the summary of cost. So if you add and subtract the dollars associated with the bodies it says quarter to date.
Speaker Change: We saved an annualized 1.6 million Bucks. So this is hal.
Speaker Change: We track money and get to having profit so quickly we watch it three times a week.
Speaker Change: Now this is a very disciplined.
Speaker Change: Process.
Speaker Change: I forget the box for a minute.
Speaker Change: This is the total company head count.
Speaker Change: It says we've gone down over time. These numbers are the actual head count and it says our current target is actually lower yet say 281 people.
Speaker Change: So this is for work with 13 14 15 16 17. So this is something you'll look at couple of times a week make sure is on track and you can see it is.
Speaker Change: The total company head count has been divided into six parts there are two divisions.
Speaker Change: I believe in having profit and loss divisions, they control the company so.
Speaker Change: My function in the company is more like that of a middling director then it as CEO.
Speaker Change: I am in no I'm am obviously has a lot of details, but these division managers to make our revenue and they're responsible for making a profit.
Speaker Change:
Speaker Change: Then we have the overhead functions.
Speaker Change: And you can see each of them has a trajectory. So you can see for example administration is.
Speaker Change: Below this target.
Speaker Change: He is at his target finance is getting to its target. This we had because we had a quarter close with three companies have huge amount of work and quality and engineering I've got together one P. P running both.
Speaker Change: We have to have two hats when a company like this in order to make ends meet that is the.
Speaker Change: The name of the game is solar and S Challenge for me is as manager.
Speaker Change: Okay. This is data we have a set of consultants, they're called Ina a y N. A they were spun out of Mackenzie. They are excellent consultants I've use them for example in the Enphase turnaround.
Speaker Change: And they come in and give you a bunch of numbers like this I'll give you one number.
Speaker Change: It says.
Speaker Change: For example in HR Army people say do you have per HR employee.
Speaker Change: And then you have data for the median in the top quartile. This is for a couple of hundred high Tech companies.
Speaker Change: So the answer is that's a bad number its median that's a good number its 75th percentile.
Speaker Change: And that's the ratio. So you have those ratios per million dollars of revenue et cetera, and that's how we get the lion's release groups and that's how we drive them 0.1, 0.2, they're small and they have to be small.
Speaker Change: These guys are judged on revenue per employee now.
Speaker Change: The judge on the Bottomline deserve item line is my Bottomline, but but the overall metric I'm looking at here is revenue per employee. So the company right now is the trainers $69000 per employee per year, that's a good number.
Especially for solar if you go check some other companies I won't name them. All you have to do is look at their.
Speaker Change: Head count in our revenue from the last quarter times, four and Youll see numbers as low as $200000 and that that's going out of business plan as I see it.
Speaker Change: And then the weighted average pretty much of our two divisions is what the company is.
Speaker Change: This is our classic solar division, which is the blue Raven embedded startup that we have.
Speaker Change: In the new homes. This is a separate division, which doesn't sell the people it sells to corporations it make housing developments.
Speaker Change: And therefore, it's got a lot lower head count because for example, we have.
Speaker Change: A very large sales force here.
Speaker Change: And less than 10 here.
Speaker Change: And that's why their targets are different and the businesses are really different okay. So.
Speaker Change: Point areas.
Speaker Change: Attractive three days, a week Monday, Wednesday, and Friday eight a M.
Speaker Change: And I'm involved in it's what drove the curve and drove the profitability along course of accomplishment making revenue.
Speaker Change: This is a disciplined thing I don't know startups and I don't know any solar company said that run tightly.
Speaker Change: This comes from the semiconductor industry.
Speaker Change: Here's a disciplined right here.
Speaker Change: Director of HR.
Speaker Change: He does this report he destitute specification.
Speaker Change: And as always there and it always works unlike my mouse today.
Speaker Change: More to come on that I'm.
Speaker Change: I'm not going to tell you his name because of vouchers to be all over them.
Speaker Change: And your first reaction as a director of HR beyond the guys.
Speaker Change: 19 years old and no he's not 19 years old He's a full 25 years old is very competent and he is representative of the kind of employees, we have in salt Lake They work hard they're young and they're in Salt Lake is the center of the World for Solar if you go look at where the solar companies are located by head count.
Speaker Change: That's their salt Lake is the Silicon valley of solar.
Speaker Change:
Speaker Change: I was going to show you the rec auction spec.
Speaker Change: But when I was timing of saying earlier today I decided to not to go over it but all of those graphs you saw come from spec spec that I have I suspect that I wrote years ago, an updated 10 times and it tells us how to Ottawa.
Speaker Change: How to run that and I have transferred approximately 10 business process is not all ones, but approximately 10 business processes to the new company and then training. So what you just saw is one little module.
Speaker Change: Now you can say we have discipline.
Speaker Change: And my joke is going to be here's a picture of my staff meeting last Wednesday, but.
Speaker Change: But we do have discipline and.
Speaker Change: And I didn't have it when I came in.
Speaker Change: Backstory here. This guy right here is my name is Lee Ernie.
Speaker Change: The movie is full metal jacket Swan.
Speaker Change: For movies and refine Vietnam.
Speaker Change: Stanley Kubrick classic.
Speaker Change: And the story and this guy is they brought him in as coach.
Speaker Change: Kochi actor who is playing.
Speaker Change: <unk>.
Speaker Change: Check.
Speaker Change: Perfection of the tie in fleets and the shirt and the whole thing.
Speaker Change: Guy who played the gunnery sergeant at how to be that and then Stanley Kubrick 2001 space Odyssey of genius.
Speaker Change: <unk> said fire the accurate Gisela. He's my God are we starting to so this is a real honest to God gunnery sergeant and if you've ever watched the scene is a classic and.
Speaker Change: It's a classic of the drill sergeants, who say an advisor recruits right up until the time, they get more and then I'll suddenly looks a whole lot better needed in the first movie that.
Speaker Change: Did this was the sands will be with GMO, starring John Wayne and he was stars of Stryker same story disguise the best of all of them.
Speaker Change: Okay, and one other thing and transferred is to make the point of.
Speaker Change: The dichotomy of having to do two opposite things at the same time, that's that's always been true.
Speaker Change: This amendment I wrote in 1987 and rewrote four times.
Speaker Change: Up to 2013.
Speaker Change: And the title of the memo and this is one of my specs and journal specs that had transferred so this document exists in our system.
Speaker Change: It says 10 things to do on a valued employee quits.
Speaker Change: And so yours. It goes this is the first three steps on page one.
Speaker Change: It goes on for five pages and defines the process.
Speaker Change: So at the very same time.
Speaker Change: Or we're going down a rollercoaster for head count.
Speaker Change: We have executives working on keeping key people.
Speaker Change: Just read one thing.
Speaker Change: React immediately within five minutes, there is nothing more important than to react immediately to an employee is quick I repeat there is nothing that takes priority over working with employers resign presuming you want to keep.
Speaker Change: Then just in case, you Didnt get it I say the phrase coke nothing more important encore means that your actions should happen immediately the next activity as schedule should be cancelled any delay such as I'll talk to you. After our staff meeting is unacceptable and finally got this one across one time when I cancelled my own staff meeting because we had an engineer it was really good guy.
Speaker Change: And I walked out and said I got to say wait.
Speaker Change: This is a process we're keeping people we have a process reevaluating people I didn't show you save time.
Speaker Change: Keno employees.
We are now able to recycle a fraction of the salaries I showed you savings this quarter today's a million and obviously save tens of millions on those cursed.
Speaker Change: We have now.
Speaker Change: Recycled fractions and salary say from head count reductions spring in key industry players. So at the very same time, you are cutting your hiring and you're hiring people using the money with people that left and that that's a rolling process happens like I said three times, a week and you're building it up so.
Speaker Change: Last week, we kind of hit the jackpot via two great hires and I brought those guys in the media today.
Speaker Change: And actually I've got your bias here.
Speaker Change: The Guy sitting next to me used to look like that does his name is <expletive> Swanson.
Speaker Change: Oh, that's me and 1972 in.
Speaker Change: And this is what accomplishing look like before white boards. This guy became the head of the electrical Engineering Department Stanford, We all work with Stanford integrated circuits lab, which at that time put up more papers per capita than Japan, Inc. Hitachi Fujitsu all of.
Speaker Change: This was the center of Silicon Valley, and the Stanford campus.
Speaker Change: This while he looks now.
Speaker Change: Actually weathered pretty well.
Speaker Change: He gave me his resume he wrote this I asked for short resume I I'll make three points. He's a co founder President and CTO Sunpower Corporation.
Speaker Change: He was a proof after that use of enduring that time overlapping as assistant and associate professor of electrical engineering, Stanford So taught students.
Speaker Change: And.
In our world like the National Academy of Sciences, and the National Academy of engineering that that sort of the.
Speaker Change: That sort of the the Oscar World each member of that.
So I called him up this morning.
And I said that company introducing today.
Speaker Change: And we don't have a title.
Speaker Change: <unk> is a one year contract to help us out Rob.
Speaker Change: For obvious things, we don't have a title so what do you want to be called.
Speaker Change: And it didn't help he.
Speaker Change: He said well.
Speaker Change: Albeit technology consultants.
Speaker Change: And I said I love. It gives me a chance to make a point the solar industry is saturated with title hungry people.
Speaker Change: Chief revenue Officer, Chief this chief that here's a guy that really is the chief and he's a quote technology consultant encore. So I'll use this as a moral lesson inside the company. So right now like to introduce Dick's wants them to you and he's got a few words.
Dick: Thank you T J.
Speaker Change: Okay.
Speaker Change: Well today, we are at a pivotal moment in our renewable revolution.
Speaker Change: About a year and a half ago, we surpassed a terawatt of installed PD capacity globally.
Speaker Change: And as we speak right now.
Speaker Change: We're bumping up to two terawatts of global PD capacity to give you some.
Speaker Change: <unk> of the magnitude of this the entire U S. Electrical generation capacity is one terawatt.
Speaker Change: We're going to be a very soon producing a terawatt per year photovoltaics.
Speaker Change: And the reason for this is simply that P. D has become the lowest cost form.
Speaker Change: Of electrical energy.
Speaker Change: So this is sort of a transition point in our industry the way I see it.
Speaker Change: We are.
Speaker Change: Entering a new phase waited for a question is okay. We've done this what now.
Can we take.
Speaker Change: Our energy supply from sub 5% of the global generation to the dominant source of.
Speaker Change: Generation, how do we do that and so this is a whole new phase in our industry and I'm really excited about it.
Speaker Change: Opportunity to to come and help Cyprus.
Speaker Change: Make that transition and use my 50 years of experience in the industry to work.
Speaker Change: Our work with them on a complex supply chain and technology landscape that we're facing.
Speaker Change: And look forward to a great results here. So thank you T J for Orion. So he slipped and said the word cypress and I'll tell you why Oh, my gosh, it'll be it'll be obvious later why that is.
Speaker Change:
Speaker Change: Next.
Speaker Change: Ron setting.
Speaker Change: He's comes in as the executive Vice President of storage systems Division.
Speaker Change: So storage system.
Speaker Change: Is not a battery is a system that has.
Speaker Change: Our battery batteries in it among other things.
Speaker Change: And our Chief Technology Officer, He's a Phd in chemical engineering from USC.
Speaker Change: He just came out of Enphase.
Speaker Change: Where I would point out that he's built a $500 million storage business and enphase and he's connected very well within base.
Speaker Change:
Speaker Change: Nick says something is true, but other people would argue with it is true that if you look at the.
Speaker Change: Take a takeover of the cost per kilowatt hour from solar it's the cheapest.
Speaker Change: I'd like to sense.
Speaker Change: Nuclear sixth gasses snakes right.
Speaker Change: But you've got this old problems suddenly shines and an average where I live five hours a day.
Speaker Change: So you got it you got to work on that one S called batteries.
Speaker Change: But and that's what this guy did.
Speaker Change: So if you today, what you have to do today and what's going to change the world is during the day youre going to have what's called a quote grid connected battery unquote.
Speaker Change: Your solar <unk> solar system will be bigger than the consumption of your house.
Speaker Change: And then Youll store that up and then it <unk>.
Speaker Change: Seven o'clock at night, when the local utilities start Screwing you group for 30, 40, 50 cents a kilowatt hour you'll run off your battery.
Speaker Change: So in effect, it's a psyche of bulldozers scoop up power during the day and dump it back in your house at night.
Speaker Change: And the battery will become the most important or why.
Speaker Change: Ponant of putting in solar.
Speaker Change: So we need a real battery guy.
Speaker Change: And that's maran and he's going to run a system, where we're going to create system level storage products not not just sell somebody else's batteries rod. Thank you P. J.
Speaker Change: Marty.
Speaker Change: Really excited to be joining you get sunpower.
Speaker Change: It's really important injunction.
Speaker Change: Sunpower if you go back to the days of a biggie.
Speaker Change: Started in.
Jake: Jake Health tab pushed a public company.
Copies forwards as instruction innovation and this is where we are going to go back to really at both in our products as well as services.
Speaker Change: T J talked about becoming from Enphase I spent six years developing free generation of energy systems, not just a battery.
Jake: It is true batteries of course essential part of any energy management system, but it's not sufficient you know electrification.
Speaker Change: Patients pushing pumps for work.
Speaker Change: More and more talk.
Speaker Change: Consuming more energy electricity, a ice coming into the picture in everything we do it is going to put more pressure on grade and having it independent energy source, which is southern a loop is no longer a nice said say necessity.
Speaker Change: And that using that requires a sophisticated software development sophisticated dead.
Speaker Change: AI enabled alloys that manage all that many shares.
A traction with the Greek making sure that homeowners taking care of financially with ROI of using that chico's social of energy available.
Speaker Change: So I'm excited to start becoming gate contributing to that.
Speaker Change: Process for rugged sunpower on now.
Speaker Change: Having some fun along the way.
Speaker Change: We are.
Speaker Change: My group remember these guys was all technical.
Speaker Change: You guys come in we did we get to make changes that will change the world and that that's really the message I'm going to give you for a mission going forward.
Speaker Change: Okay other stuff and we formed a strategic partnership with a company you haven't heard of called Sunder. If you live in Salt Lake City, you would know exactly who they are they're big highly regarded in their sales front.
Speaker Change: So we now have them supporting our growth they have more salespeople by the way then we Havent voice just scale in Korea.
Speaker Change: They are now supporting our growth in.
Speaker Change: That'll be orders coming in now it'll show up in the third quarter.
Speaker Change: Next point, we strengthened our board the three public company ex CEO directors that is directors who ran companies.
Speaker Change: Both are Meyer <unk>.
Speaker Change: I'm, a CEO of linear technology at $1.4 billion Chip company.
Speaker Change: I'm, Dan Mccranie Who's right here can we get them.
Speaker Change: Picture of him please serious.
Speaker Change: He came over.
Speaker Change: Dan Dan.
Speaker Change: He is a former chairman of five high tech companies, including Freescale and on the two halves of Motorola when Motorola spun out there have some became.
Speaker Change: And people woke up in the two public companies.
Jamie Yankee: And then Jamie Yankee She's she listen.
Speaker Change: Wichita.
Speaker Change: And she is a former CEO of ADT sword. So we've got.
Speaker Change: We're strengthening our board and I'll talk about the statistics and minute okay.
Speaker Change: When we first went from being a startup to being a public company. We had a startup board and you don't follow the independents rules.
Speaker Change: Get the best person you can.
Speaker Change: Now we have independence rules Adas for example, the people.
Speaker Change: Personal interfaces with the public.
Speaker Change: Can't be me, because I'm, an employee and that I'm not I'm not I'm not independent you have to have an independent director for that.
Speaker Change: So in that case.
Ron Pathic: We've got Ron Pathic.
Speaker Change: Mr Chairman abroad Committee.
Speaker Change: He is now the lead director and east demand that interfaces with the public.
Speaker Change: I'm chairman, but but.
Speaker Change: He's the guy that talks and Republic, and secondly in the comp Committee and we've got a guy used to run on complete solar. So he is not in the pan it wont be for five years.
Speaker Change: And he has been replaced by Dan Mccranie that just met Dan has been on the board weigh bigger more complex companies than ours.
Speaker Change: So the two points I am making here.
Speaker Change: Of our 11 directors, we have a relatively large board with eight with CEO experience and we have seven who are independent.
Speaker Change: So we now have a very strong board going forward.
Speaker Change: Last point in the.
Speaker Change: Primary presentation.
Speaker Change: Yeah.
Speaker Change: I talked about or I wont say, it again that I talked about our economics and everybody's worried about the market right now a market price.
Speaker Change: And the best we can say is we haven't been damaged as bad as the other guys. So here I've taken.
Speaker Change: Three four important companies. This is complete solar visa stock graphs, and if I summarize those graphs are year to date performance up to 427, when the snapshot was made.
Speaker Change: We're a little bit ahead of even in the industries in the tank. So we feel that we're we're being recognized for what we're doing financially.
Speaker Change: Okay, a few things all hands meeting so I go to Salt Lake I go into a big room in the basement.
Speaker Change: Between that and the people watching.
Speaker Change: We have 1000 people 906, and we have an all hands me.
Speaker Change: Okay.
Speaker Change: And by the way the all hands meeting.
Speaker Change: Let's just say I was considered an alien from Silicon valley for a while and I'll talk about that in a minute.
Speaker Change: Okay first thing, we talked about with Sunpower rebranding them part of the company comes from a startup called Blue Raven Theyre very proud of the company and the concept of getting renamed something I had to sell to them.
Speaker Change: So that I'm going to also talk about that because this is the first meeting we've had since we rebranded the Sunpower. There's are our logo I'll explain that in a minute.
Speaker Change: First of all.
Sunpower. This is a list of 70 that second half of the list of 70 companies that are solar and went bankrupt.
Speaker Change: How many of them are private sales companies, but some of them sunpower being the biggest where big real companies that really to go bankrupt.
Speaker Change: So my first point is we have to do everything including those layoffs in order to keep solid financials. Because you don't have that you don't have anything.
Speaker Change: And they bought into that.
Speaker Change: Second point here is that acquiring solar companies to grow rapidly.
Speaker Change: Now that.
Speaker Change: In the solar business in semiconductors, when I ran cyber says there for 34 years, we recorded 26 companies. So.
Speaker Change: So if you acquire a company acquired designs you acquired people that designed it to acquire the marketing people. They all come to a new place their products are there and in it and the acquisitions fixed solar is not like that the solar sales forces are mobile.
Speaker Change: And if you bring them in and Petsmart, then they go away and they'll come back.
Speaker Change: No.
Speaker Change: What we of course, we will acquire with trepidation.
Speaker Change: And we will have all kinds of Golden handcuffs on people that we acquired that's as my own point.
Speaker Change: Okay going back in time savings Sunpower.
Speaker Change: San Francisco Chronicle, Sunpower had a great idea and strategy. The cash was running short Intel It received a 750000 dollar person check from someone who saw the night light.
Speaker Change: That's the only thing that San Francisco Chronicle ever wrote about me that was favorable.
Speaker Change: And here we are on top of Cypress Cypress was this is a.
Speaker Change: Think like 2002.
Speaker Change: And we just to put on a roof British petroleum panels.
Speaker Change: And <expletive> and I went on the route we were doing some sort of promotion.
Speaker Change: Ceos of the two companies that is silicon valley that San Francisco Bay.
Speaker Change: Hey.
Speaker Change: And some bars.
Speaker Change: Our reason for being wasn't we have the best sales force in the World. It was we have the best panels and ours.
Speaker Change: Ours are smaller and higher power. These are half panels that I could get into one picture, but you got a smaller panel is pretty it's all black it's more wattage than the competing town so that.
Speaker Change: That's what's on par sold technology.
Speaker Change: And although I'll admit sales is dominant in this industry today technology still matters and the techie guys that we didn't have that we took a few percent of our savings from the overstaffing in the company and recycle it into building and technology team and these guys will both work on that.
Speaker Change: This is an old slide that was made in 2009 cypress still own sunpower at that time.
Speaker Change: We built an automatic line for them.
Speaker Change: To make solar panels.
Speaker Change: And they got to $79 million in 2005 made a profit we took them public we cypress took them public and I was the chairman.
Speaker Change: And they grew a factor of 18.
Speaker Change: The Guy that did that was Tom Werner.
Also I work with Tom and and they went up $2 billion. So it's the rocket ride made some part the predominant company in the world.
Speaker Change: At that time, our investors, we own 40% of the economics, but there were 10 volt share. So we don't control and 40% of the economics.
Speaker Change: Our investors were raising hell, they didn't give a damn about our little so as a semiconductor company. They wanted direct access to the solar stocks. So we spun it out.
Speaker Change: And that was a one time stock dividend worth $2 $6 billion at the time, we did it putting the values on par at that time 6 billion.
Speaker Change: Three years later, the French went in the market the oil company to hotel.
Speaker Change: Big box and they bought 60% of the stock of the company in the open market.
Speaker Change: <unk> enjoyed the share price ride, but they took it over and it was no longer Silicon Valley company, which is unique and the way it works.
Don't go you don't every board meetings in Paris, just I'll, just let you know that one doesn't work so that's what I left or.
Speaker Change: So the point is this is all sunpower after that after it was called save back here.
Speaker Change: That's where we are right now.
Speaker Change: Now let me tell you what I didn't say explicitly I did not say our next step is 774 and you can write it down divided by four and that's the next quarter.
Speaker Change: And talking about our vision for the future.
Speaker Change: And all I'm, saying is if you measure our vision on the prior company at a different Europe, we're moving along and we're not done so all I said.
Speaker Change: Sunpower brand is hugely valuable and I'll make that point with this graph.
This is a company called energy Sage or East Coast company, and they quote solar deals and they quote what are called long tail solar deal. So this to the homeowner.
Speaker Change: For retail.
Speaker Change: And in this case, they have a graph of price difference from the least expensive equipment pairing.
Speaker Change: So.
Speaker Change: Here, the least expensive equipment is Tesla they brought out a new battery in it.
Speaker Change: It's cheap and in RAC is a high volume manufacturer in there.
Speaker Change: They make great power sports and early not in China, and we use their panels right now.
Speaker Change: Okay. So this is zero percent of the cheapest NASA lowest cost option and we may have we have to be lean enough to compete there but.
Speaker Change: I'll fire the marketing Guy will compete Sir simple.
Speaker Change: Okay. Now you go along and you see there are the guys itself volume at whatever prices required then there is a group of companies that have some sort of advantage to have a premium.
Speaker Change: In this case the first advantage company.
Speaker Change: A group of companies usage en face inverters, not Tesla and Theres a reason for that.
Speaker Change: And then our AC panels then.
Speaker Change: Then you go up and there is as tier 20% to 30% premium.
Speaker Change: Then you go up here and you go who the Hell are those guys.
Speaker Change: And the answer is and this by the way is last August.
Speaker Change: The abstract out here Sunpower filed for bankruptcy in August of 2024. So we expect this to be the last report including its products.
Speaker Change: But you'd walk in and say I'm sunpower.
Speaker Change: What kind of panels, you have worry from India, who are they.
Speaker Change: What kind of inverted U have we ever own proprietary inverter I know about that because I'm, replacing right now with Enphase and Bruce of the thing works right.
Speaker Change: So sunpower name, even with a lackluster product line.
Speaker Change: It was 50%.
Speaker Change: And that's what I wanted to get back.
Speaker Change: We don't have good market and we're going to have.
Speaker Change: One of these meetings coming up I'm going to introduce the marketing star and see how we're going to go forward right right now be griping about reading reports and Griping about price is is coke marketing.
Speaker Change: Okay now.
Speaker Change: To get back to where sunpower used to be I want to replace I want to bring back that technology edge and the guys who just met.
Speaker Change: So we're going to partner with RAC.
Speaker Change: On panels, we already have we already user bells and when some partners go away, we're going to partner our partnering within base. So we use only in phase of orders right now.
Speaker Change: One good thing about being the Ceos.
Speaker Change: We now have a bomb spec.
Speaker Change: B L lists.
Speaker Change: I have to sign them. So that's what's on it among other things.
Speaker Change: So that's where we're headed back to having a technology advantage. So our salespeople could talk why you want this one and only if you say I can't afford it then they'll say well we've got one you can't afford.
Speaker Change: Okay.
Speaker Change: Okay Division.
Speaker Change: This is one of my favorite pictures ever.
Speaker Change: It's a real airplane.
Speaker Change: It was made by NASA through a contractor.
Speaker Change: It adds 65000 solar cells on and producing 35000 watch in.
Speaker Change: And it had electric motors on it to two horsepower electric Motors 1500 Watt Motors.
Speaker Change: You can see these these propellers they look like when mills because they are.
Speaker Change: Because at 96800 feet Theres nowhere, so you need a giant propeller to grab in Alberta caused something to fly.
And this airplane took off under its own power.
Speaker Change: <unk> 96000 feet maintained at NASA World record, there's still stands today and it was done in 2001.
Speaker Change: And to me I'm not going in the airplane business.
Speaker Change: I wish I could we sold these two $200 what's today today 31 cents per watt.
Speaker Change: But I'm.
Speaker Change: Im not going in the airplane business, but this is an image of what can happen with solar with technology and vision as opposed to selling solar cells and in the neighborhood.
Speaker Change: Okay.
Speaker Change: I thought about that this is my kitchen is working on this actually the report I'm, giving right now.
Speaker Change: And I Mark up an old copies of the Wall Street journal than AD.
Speaker Change: Telling telling where I'm going to tell you right now.
Speaker Change: And.
Speaker Change: This is the tax of it.
Speaker Change: I'm also the IR Guy in case, you haven't figured that out.
Speaker Change: My wife, and our two person venture company.
Speaker Change: Is the helps sell through this.
Speaker Change: So that became this this is the actual back page fallback page AD of the Wall Street Journal yesterday normally I would never say, it's an extravagance, but I figured.
Speaker Change: This change the branding of Sunpower new direction.
Speaker Change: Warranted it.
Speaker Change: So.
We already told you bought that airplane.
Speaker Change:
Speaker Change: By the way 96000 feet is 30000 feet above that that's F 15 Eagle.
Speaker Change: In my mind with 104 zero kill ratio its hottest fighter brands ever made anywhere.
Speaker Change: The interesting thing is it's really an interceptor not a fighter.
Speaker Change: What that means is one of the bad guys come over the border this thing needs to get to fighting altitude about 30000 feet fast.
Speaker Change: So they made it with an engine.
Speaker Change: It adds one point 17 times the thrust of the weight of the airplane. Therefore can go vertically.
Speaker Change: And as airplanes can take off and they are actually on <unk>. You can go on the website and on our website on the Internet via pictures of Guy taping, taking off and going to 30000 feet ready ready to fight the.
Speaker Change: The record from going from ground at 30000 feet.
Speaker Change: It's 56 second cell by that airplane.
Speaker Change: So.
Speaker Change: But it won't fly high it won't it's not stable high it's a missile when he gets up there is non aerodynamic.
And of course Theres the airplane of all airplanes, yes, our 71 Blackbird.
Speaker Change: This airplane flew over the nuclear missile silos of Russia for two decades.
Speaker Change: And they never had a problem the Russians embedded emplane called make twenty-five box bap.
Speaker Change: It was <unk>.
Speaker Change: 1800 mile an hour airplane.
Speaker Change: And they couldnt touch it they actually validate airplane and long range missiles. So they could take off when they saw the Blackberry coming get up get to their highest altitude than fire missile with all the rest of the way never happened. The same travels twice at that speed of a deer hunting rifle.
Speaker Change: Oh, the Guy has to do is turn two degrees to one by the time. The missile gets Eric is 20 miles away out of radar out of radar lock.
Speaker Change: In July 1970 States. This airplane set records for speed 21, 93 miles per hour in altitude and $85 69.
Speaker Change: Air breathing airplane, taking off under its own power not a rocket that is that is the record. This by the way little factoid I really like.
Speaker Change: Everybody knows that in Denver, you have to boil an egg longer in order to get a quote.
Speaker Change: And that's because the boiling point of water reduces as the pressure holding the water down reduces.
Speaker Change: So.
Speaker Change: At 85000 feet water boils at 59 degrees Fahrenheit.
Speaker Change: Said another way your body temperatures above the boiling point of your blood. So that's another way, it's not good to be up there.
Speaker Change: And these guys, Kansas, where an oxygen mask they.
Speaker Change: They they actually have to have a cost pressure suit on fly that airplane and they would fly for 10 hours at a time over the Soviet Union with Soviets trying their latest little Whiz-bang take him out never have.
Speaker Change: So.
Speaker Change: This is a statement I've already gone through it I won't do it again, there's three companies that are combined.
Speaker Change: All sunpower, new homes complete solar and Blue Ravens solar complete solar Smile company by far the smallest we brought 65 people into the 900 person company.
Speaker Change: I showed you the profit trajectory I talked about our forecast for revenue.
Speaker Change: And then I pointed out I was the chairman of Sunpower, and hence I ever.
Speaker Change: Emotional stake in this we're now NASDAQ we now are S. P R and S. P RW our warrants.
Speaker Change: And that's our website.
Speaker Change: Nasser new logo I AMA.
Speaker Change: It's M figured it out former sample I'm am a stamp collector in the so I turned this logo into a commemorative stamp.
Speaker Change: Okay next thing customers.
Speaker Change: If you don't treat your customer as well.
Speaker Change: Get blown up.
Speaker Change:
Speaker Change: And solar is if you've been reading the news lately some of our competitors are getting famous for.
Speaker Change: Not doing well by customers one thing I learned in my industry. As you took care of your customers and working on quality and customers with severity of my job.
Speaker Change: At the end of my career Cyprus.
Speaker Change: Okay.
Recognize this guy he has a house in Nevada they.
Speaker Change: They had a quote.
Speaker Change: Three year delay due to quality issues, including our ruefully communication breakdowns meeting the panels and talk to the Iot legal escalation et cetera, et cetera et cetera. So these guys decided they were going to verbal decision in Salt Lake, Michigan in our boardroom Salt Lake They decided they were going to fix it and they did.
Speaker Change: And.
Speaker Change: So you can see it barely there.
Speaker Change: She Ed.
Speaker Change: Dad sign this to Jersey and are now hangs in the hall of Fame and whenever you do something good for customer your name goes up.
Speaker Change: Customer escalations.
Speaker Change: This is a we keep a lot of data. This is one graph, but number of customer escalate escalations is down and guess what I answered my phone I read my email people now I get to me.
Speaker Change: And when if you screw a customer you you're screwing me and I don't tolerate that and everybody knows that now yes, you can see.
Speaker Change: We're treating them we always did.
Speaker Change: That's completes saw a blue Raven in particular has always had a high four star ratings soda sunpower. So the culture is there to begin with I'm not fighting against the culture.
Speaker Change: But now we're taking it beyond.
Speaker Change: The right thing to do to finish.
Speaker Change: I learned this from another guy.
Speaker Change: Yep.
Speaker Change: As Jerry Sanders Dapper Jerry.
Speaker Change: Advanced micro devices still lives in L. A the only difference now is the silver mains are now shoulder length.
Speaker Change: And I see them every now and then and he was the salesman. He had a b S. Doubly, but he was a sales guy out of Fairchild and he was the advocate for the customer and a few screwed one of his customers. The wrath of Cal would come Donahue Anna So anyway. What the story is told you bought us that's.
Speaker Change: Where I learned at <unk> when I worked at AMD I was there for three years.
Speaker Change: One example, homeowner escalation this came into my.
Speaker Change: My email turns out she had already talked as K C. B S reported in New York.
Speaker Change: And so I was all set up to be the bad Guy this screwed the customer and all that.
Speaker Change: We fixed it.
Speaker Change: I just wanted to close the loop here Tech you facilitate the Tac and facilitated the came to warehouse. This new Jersey was able to fix or battery issues, Here's a laundry list of areas that they showed us but the songs strong engineer that you lineup for Sarah et cetera.
Speaker Change: Here. This is a this is a slide again from our company meeting and heroes. They all go in the hall of Fame.
Speaker Change: One more.
Speaker Change: Thank you for reading my emails and helping me get the two appointments needed to deal with my broken string Inverters string and Bert I won't tell you that Tesla is a string inverter and we don't we have a micron Berger our inverters optimized one panel at a time for maximum power, whereas the string inverter ties, let's say 10 panels together and.
Speaker Change: Can optimize all 10, because there are different a little bit from each other.
Plus 10 10 panels.
Speaker Change: At 50 volt <unk> 500 volts D C. Not something you want around your house string Inverters are yesterday's news and that's why we powered within base.
Speaker Change: Christine partner to them face alright.
Speaker Change: This is the last sections I wanted to just give you a flavor per the culture of the company.
Speaker Change: So then I asked requested in the questions have been.
Speaker Change: Very problematic form the first meeting I went to.
Speaker Change:
Speaker Change: The questions were passive aggressive insulting.
Speaker Change: Now that we have to put up with you Kama question kind of things and.
Speaker Change: In my last meeting I showed this slide.
As you might gather I am a movie buff and this has seen he tried the Frankenstein cassel from the 1931 movie.
Speaker Change: And I told him I showed on this picture and I said, that's kind of how I felt when I was looking out into the crowd last quarter. When I came here for the meeting.
Speaker Change: And they laughed a little bit and then we decided to try to make the.
Speaker Change: The escalate the questions session, because they're asking questions. What are you doing here what are you doing there why are you doing this.
Speaker Change: Obviously in the.
Speaker Change: The places getting cut so they have valid objections, and it's not like there they're just being one.
Speaker Change: Hard to deal with.
Speaker Change: So then I then I made so this last time.
Speaker Change: I took this step one step farther and I turn the question and answer into a game show.
Speaker Change: So I started by showing this slide.
Speaker Change: That's me is the standing in front of a crowd.
Speaker Change: And then the game has a quiz game less play poker monster.
Speaker Change: And I had a guy with a voice like a game show Guy and now let's play Pope Monster and then I gave a score for it if the monster frowns growls lunches loses his neck boats or has this had explored then you get a certain number of points.
Speaker Change: And we had a we had fun at that and I had two questions to start out. This may make your head explode com a bot and then there was a question in who is at risk.
Speaker Change: We're starting to be able to work together is my point.
Speaker Change: This they have core values I haven't talked about core values here, it's a big part of management.
Speaker Change: We have core values.
Speaker Change: I'm working on them myself every week I work on.
Speaker Change: But they had core values. The one thing I really liked that walk into a building and saw in Orem, Utah and on the wall. This core values.
And I was going to debunk them.
Speaker Change: And then I read them and they were really good.
Speaker Change: So I just read their own core values to them hard to gripe about changing your core values when youre espousing following your core values.
Speaker Change: Produce results that are worth more than the cost to deliver that's called make a profit obsessive we reduce cycle times and every area that is to get the stuff on the roof and make it work.
Speaker Change: Keep the sales when they appealed experienced simple.
Speaker Change: Even if it means adding complexity elsewhere and last once daily eliminate unnecessary cost with 10% of the unnecessary costs. We had eliminated we've now got the seeds of two groups that will change our company.
Speaker Change: And we pay them.
Speaker Change: This is a bonus.
Speaker Change: We actually paid them with hundred dollar bills.
Speaker Change: It was called 10 bands, we prepaid the taxes, so the 10 bands where yours.
Speaker Change: We actually went to the bank got the money and gave it out to the people. So they walked out I learned this Intel Livermore did have a weaker version of this.
Speaker Change: 20 years ago I did this is Cyprus pay in cash.
Speaker Change: And there's something about cash use.
Speaker Change: You know you look at it.
Speaker Change: Especially the new dollars that are high tech for <unk>.
Speaker Change: Caught for copying reasons and it has an impact on your head and you have 10 of those in your hand, and Hugo I did something last quarter, its valuable and that it's different.
Speaker Change: And it turns out that's a lesson I learned.
Speaker Change: From this guy.
Speaker Change:
Speaker Change: I knew him when he was alive user professors Hoover and Stanford.
Speaker Change: He allowed me to column.
Speaker Change:
Speaker Change: Good advice, which I did.
Speaker Change: I've been in this house.
Speaker Change: And.
Speaker Change: I once asked him I said did you ever doing it you know you know me or Adam Smith of my day did.
Speaker Change: Did you ever do anything you weren't happy with and he said yes.
Speaker Change: And then he told me the story and you can find it actually is well documented.
Speaker Change: Just before World War, two we realized we'd have to spend half the wealth of our country half of our gross domestic product to fight that work.
Speaker Change: And he was part of the team that figured out how to get Americans to pay because in those days. He paid your debt you didn't pay your taxes till March 15th March 15th you filled out the form of mailed the check.
Speaker Change: Any new and Americans would not write a check equal to half yearly wage.
Speaker Change: In order to even for a war even influences adjusting the war so he invented withholding tax.
Speaker Change: He and his team invented the fact that corporations became the tax collectors for the United States of America and that money disappeared from your check before you got your check.
Speaker Change: And in that way and never had it you looked at your payment from the company as a payment that you got after taxes.
Speaker Change: If you want to make a bonus not matter.
Speaker Change: Give it to them and their check which is auto deposited anyway have be some line in the Czech bonus and then don't make big deal out of it if you want the bonus to go directly into their head I did something good and I got paid for it.
Speaker Change: Give him a handful of money and pay their taxes upfront, that's yours and again Intel did that with $100. One 100 dollar bill in their liver more plant.
Speaker Change: So anyway, that's the lesson I learned from this guy.
Speaker Change: That's it that's our vision, we're now sunpower.
Speaker Change: Questions.
Speaker Change: Thank you T J a few instructions before we begin Q&A.
Speaker Change: Her audience watching via the webcast Theres, an ask a question tab on the right.
Speaker Change: Right side fly out of the screen to submit a written question.
Speaker Change: If you have dialed in I would like to ask a question question simply click the raise hand button located on the bottom of your screen and plus and press star nine to Raytheon and Star 90, onion once you've been called on please don't forget on mute yourself and begin your question.
Speaker Change: I'll now pause a moment to assemble the queue.
Speaker Change: Our first call. This morning is from Derek Soderberg from Cantor Fitzgerald go ahead Gary.
Speaker Change: Yeah, Hey, guys.
Derek Soderberg: <unk> on our financial results here I'm, just continuing on your vision T. J I've already gotten a business to strong margin profile you lowered sales commission significantly but on the revenue side, how do you see the Sunpower story playing out.
Derek Soderberg: Over the next year or so just to really set up the business to become a $1 billion annualized revenue company is that going to be through acquisition through partnerships organically.
Derek Soderberg: Can you provide some color on that vision and reaching NAPCO in dollars annualized level.
Derek Soderberg: So I'm glad you didn't ask me when are you going to hit the $770 million as shown on the slide.
Derek Soderberg: Our target is $1 billion that is revision.
Derek Soderberg: It is obviously achievable what that slide shows is whenever you're in a meeting somebody says we cant do that how can we do that is obviously it can be done in in the day when solar market was 10 times smaller than it is even more than 10 times smaller than it is today.
Derek Soderberg: So it's obvious that can get done first thing you have to have stability now we stabilized at 80 million Bucks a quarter.
Derek Soderberg: Okay, we have a.
Derek Soderberg: Direct sales force.
Derek Soderberg: That debt so we sell directly to our customers we have people that knock on doors, and we have people at and telephone banks.
Derek Soderberg: So that effort can grow in that.
Derek Soderberg: The $80 million per quarter growing at some reasonable rate and I won't even speculate what it is but it is a number that would take a while to get to a 100 gig to.
Derek Soderberg: To inorganic growth.
Derek Soderberg:
Derek Soderberg: Based on my career I I am a fan of inorganic growth in those new companies by the way they come in they're stuff they do better than you do.
Derek Soderberg: There is a mixture of managers that you have merit, but merit wins in terms of taking the management team of the combined company.
Derek Soderberg: Some big fan of that it is very positive and we will do that but you got to caveat I said.
Derek Soderberg: The sticking factor in the solar industry is way lower than the staking factor in semiconductor industry. So I have a plan for that part of it Oh. Thank you.
Derek Soderberg: Stock.
Speaker Change: So I want to tell shareholders, Iran. Here, we ever in May we ever company meeting coming up.
Speaker Change: That jumped from $5.5 million the last quarter of my old company.
Speaker Change: $80 million came because we got Sunpower, we added 1000 Sunpower people to 65 complete solar people.
Speaker Change: So sunpower people got letters, saying youre going to get a stock option.
Speaker Change: Now, there's a one year cliff of preventing on that so they are in there. They are in their non vesting period, but I need approval in the in the company meeting excuse me in the shareholder meeting for that stock.
Speaker Change: And I won't go into other details but.
Speaker Change: You guys need to give me a stock I need to grow the company and that's part of it.
Speaker Change: They don't think about.
Speaker Change: Like Silicon Valley I'm, an owner of the company I have a piece of the company the stock's going to go up.
Speaker Change: Jim.
Speaker Change: My weekly my rent is going to get paid by myself, but my new house is going to get bought by my stock and that that mindset is going to take a wild story started inlet I've had people tell me.
Speaker Change: Yeah keep your stock Gimme rates more.
Speaker Change: Multiple times in the last company meeting.
Speaker Change: The Guy races, Sanna said, so how do we sell stock I said, we announced it you weren't listening fidelity, we have the fidelity service, which all Silicon Valley companies used as the best one you have an accounting error you have stock in your account.
Speaker Change: So it'll be partly on stock.
Speaker Change: Other thing is.
Speaker Change:
Speaker Change: It'll be.
Speaker Change: Vesting of anything we pay.
Speaker Change: So.
Speaker Change: One is I won't.
Speaker Change: Unlikely to go of the company, where the owner owns everything and there are a lot lot of the small solar companies to that way couple of entrepreneurs start a company they own 99% of the stock there.
Speaker Change: Everybody else works with salary, hence the Gimme money not stock now mentality.
Speaker Change: And in.
We're the consideration we given an acquisition will be partly cash partly stock the stock will.
Speaker Change: We'll pay off big for the guys that come but there'll also be cashed.
Speaker Change: And we're going to reverse that.
Speaker Change: The deal will be no you don't get X dollars at the signing you get you get that over a one or two year period. So using vesting of the consideration for an acquisition plus significant stock options that they're not used to.
Speaker Change: That's my theory about how to get and hold people once you're on that rule.
Speaker Change: You're profitable.
Speaker Change: People can see it they can believe it twice drone that role.
Speaker Change: That'll be a very powerful dynamic in a non stock economy, which is the solar economy for us so that'll be a winter that is also a silicon valley. That's why we are who we are.
Speaker Change: Got it.
Speaker Change: Can I get a follow up.
Speaker Change: Just on T. J wanted to quickly touch on the battery systems commentary you mentioned the importance of that to the ROI on and now you are going to create your own battery systems natural sell somebody else's battery can you talk about that a bit or are you going to build the batteries, you've got experience with <unk> and sunpower.
Speaker Change: Should we think about that opportunity and batteries for the company.
Speaker Change: Thank you for asking that question I can visualize people pushing the sell button right now T. J is going in the battery industry no.
Speaker Change: Our batteries are made by N phase and it turns out.
Speaker Change: If you think about the philosophy of the Enphase battery.
Speaker Change: Take a panel.
Speaker Change: Put on an inverter is the box it looks like an old fashioned VHS tape.
Speaker Change: D. C comes in from the panel lets say 10 amperes at 40 volts 400 watts.
Speaker Change: Into the inverter converter has a completely digital system that converts at the DC to AC and it's not a simple electrical engineering thing the chip the controls that is 4 million gates with two high performance computers on it.
Speaker Change: And then that.
Speaker Change: Talks to the grid and.
Speaker Change: After nine revert eight revisions were on after the IQ eight everything the grid can do to screw Ya and piccinini civic gasoline specializes in finding new ways to screw screw up solar systems is bulletproof.
Speaker Change: Okay. So you take that box and let's say that box right now can be a kilowatt.
Speaker Change: And then you put a battery on it and the murder looks out and says I see 40 volts.
Speaker Change: I'll do what I always do I'll turn it into power I'll take all the learning I am turning it into power.
Speaker Change: And and make it work right.
Speaker Change: So the Enphase batteries are.
Speaker Change: Batteries lithium ion batteries.
Speaker Change: Driving through N phase inverters and connecting to the grid and that's the hard part and that's why in phase Inverters are.
Speaker Change: Double the price of the next one because it really truly systems.
Speaker Change: So now you think about what is the system look like in the en face world and that is you've got the same box millions up they make they make like $5 million a quarter very low cost.
Speaker Change: Talking to the grid and then you hook step onto it.
Speaker Change: You Hook yoga battery onto it you hook solar panel side of it what we're going to do is take that product.
Speaker Change: And we're going to write software for the computer.
Speaker Change: To make that product do special things Enphase is already doing that will feature a lot of their products. For example, Enphase now is a plug.
Speaker Change: The charges your electric car in the box to charge it okay.
Speaker Change: Okay. You now can go and you're you're en face you can get the Enphase app.
Speaker Change: And you can see what the output was from Sunrise to the time you are looking at it for every panel one by one on your ops.
Speaker Change: That same application now you can tell it more sophisticated things I want you to charge my car.
Speaker Change: I want you to charge my car only with solar electron so I don't want to use grid current that would burn oil to charge my car weighs only only solar electrons.
Speaker Change: And then it will do that and that's true that's not a trivial problem right.
One is cloud goes over the Sun is a foggy day.
Speaker Change: Your car needs a certain amount of charging and you have to have intelligence between source of power and the use of power.
Speaker Change: So that's what we're going to build we're going to use products from people and build that stuff make it rugged bulletproof and cheap.
Speaker Change: And bring out products, where our customers see it and product like that we're in.
Speaker Change: Not going to make the components there you don't want to make batteries.
Speaker Change: And of the batteries I'm in a battery company right here in <unk>, They make high tech batteries.
Speaker Change: <unk> is used in cars and batten and homes are 10 times cheaper than high Tech battery.
Speaker Change: Don't want to do that.
Speaker Change: That's helpful. Thanks, guys.
Speaker Change: Okay.
Speaker Change: Thank you Derek.
Speaker Change: Our next question comes from Nevada.
Speaker Change:
Speaker Change: How realistic is further inorganic growth and how is the current opportunity set for acquisitions of distressed assets of companies such as vanilla.
Speaker Change: Well.
Speaker Change: I don't know about the Nova.
That was a major crash.
Speaker Change: There's a huge amount of money in it.
Speaker Change: And.
Speaker Change: They may or may not ever sell assets, if they do I'll be there bidding if the assets are priced right.
Speaker Change: But I gave you a list of 70 companies.
Speaker Change: So the answer right now.
Speaker Change: As you know.
Speaker Change: You want some stock in a job and a good salary and work in our company is going to grow we can accommodate that.
Speaker Change: And so right now it said for.
Speaker Change: Those of us capable of growing it's a great market.
Speaker Change: On that note you actually have a question from the web asking about employment opportunities and how open are you to accepting applications from former Sunpower in place.
Speaker Change: Oh.
Speaker Change: <unk>.
Speaker Change: When these guys ran sunpower it was a well run company and the King of the World for the last three or so years, it wasn't well run and when I came in there I found it pretty strict management structure.
Speaker Change: <unk> aloof not detail oriented.
Speaker Change: Having said that that Sunpower is.
Speaker Change: Got thousands really good people and it people you couldnt get anywhere else people came for the vision back when when it was where it was episodic.
Speaker Change: The answer is.
Speaker Change: If you know solar.
Speaker Change: If you're smart you want to work hard and win.
Speaker Change: Send a resume.
Speaker Change: If you.
Speaker Change: T J Rodgers at T T J R. A T J Rodgers Dotcom Rogers got a demon.
Speaker Change: Thank you.
Speaker Change:
Speaker Change: The next question is from Kashi goes up.
Speaker Change: Who asks.
Speaker Change: If you have any comments on the Tcl sunpower panels and potential panel partnerships.
Speaker Change: Okay.
Speaker Change: In the same way I talk about batteries, which are Chinese have driven.
Speaker Change: Two prices were even Chinese companies go up you understand they've got companies going out of business too. So when the prices are so bad Chinese companies go out of business. You know you don't want to start trying to make them in.
Speaker Change: California.
Speaker Change: So on panels, it's the same thing they they've driven the price of panels now when I left sunpower the price of panels was.
Speaker Change: $2 or what.
It's now <unk>.
Speaker Change: 31 cents per watt and they'll deliver it to your door for you like milk.
Speaker Change: And if you wanted to take the risk of buying panels and importing them through our customs, which you'd really be them to do their pricings damages dime of what.
Speaker Change: So how do you make money on that.
Speaker Change: My tongue on batteries and panels.
Speaker Change: I don't want to compete I wish the Chinese would drop price weighed out then.
Speaker Change: All of the revenue would come from creating with very cheap high quality products systems and people can use and make it work right because the same guys that run those factories arent going to.
Speaker Change: To answer their phones come to your house fix your problem install it quickly.
Speaker Change: We in this industry. The main event is 5000, a H chase the last J stands from jurisdiction all of a subtle.
Speaker Change: Building departments that annoy, everybody 5000, amo different rules all knowing the right.
Speaker Change: All being slow all being out to launch a lot of the time and that is what we have to do.
Speaker Change: They're not going to take that job away from us and if we do it efficiently.
Speaker Change: One will be a great service to our customers and two it can be very profitable.
Speaker Change: No I'm, not making panels, no I'm not making batteries.
Speaker Change: Low tech batteries I'll make high Tech battery seer, 10th the way higher energy density.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Our next question surrounds tariffs and exposure to China.
Speaker Change: What impact might this have on sunpower is profitability and supply.
Speaker Change: Well.
Speaker Change: What everybody's pointing onto our president he's got a guy named Navarro.
Telling them, how we're going to build back the industry in factories, so spring up from the ground the guys hallucinating.
Speaker Change: So what.
Speaker Change: What is the tariff the tariff is simple attacks. So they charged me.
Speaker Change: Double 60 cents of what instead of 30 cents per watt and our customers will start paying double I'm not going to pay the tariff and you have my company go bankrupt. So I'll I'll pay the tariff is tax pass that tacks onto my customers. So.
Speaker Change: I do care about it and the factors are larger feedback loop that if solar becomes.
Speaker Change: Too expensive again, then the whole market will go down and all the companies in the market will suffer.
Speaker Change: I'm, hoping they will wake up by that time.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: The next question is leaning in Q4 guidance.
Speaker Change:
Speaker Change: Can you share any thoughts on revenue growth margins for the next couple of years and the impact of a potential recession.
Speaker Change: You guys saw six months of work right.
Speaker Change: Is like.
Speaker Change: The job is kind of like being a goalie in hockey right a stand there and catch the pox before they get in the net.
Speaker Change: So can I have a long term forecast.
Speaker Change: I can but it's based on.
Speaker Change: Positioning more so than actually looking at what you project the P&L to be <unk>.
Speaker Change: Now we have a very lean workforce and it's going to get leaner and S America.
Speaker Change: Okay. So one good thing about being an American if you're selling to American houses you gotta be American and I can import that so.
Speaker Change: When you have a company just lean and we now have a company to Celine.
Speaker Change: We've actually started as you heard today doing some some hiring.
Speaker Change: You know you can survive in the market because.
Speaker Change: Just like my stock graph your stock will be green and the AR and the companies that arent leader will be red.
Speaker Change: So that that's the main event being having a stable company.
Speaker Change: Well the market go up.
Speaker Change: One statistic I like comes from the EIA that's it.
Speaker Change: Government organs.
Speaker Change: Organization attracts it.
Speaker Change: And right now.
Speaker Change: Close as I can estimate the number of houses that have solar on them.
Speaker Change: Divided by the number of houses they could have solar arms, 4%.
Speaker Change: So we have a toe in the water. This this industry, where you talk about being Bagus atone the water and what we've got to do is is continue.
Speaker Change: Continue to hold costs.
Speaker Change: And now we need to supply what they need and what they need storage they need in stores more than any solar.
Speaker Change: You make the cheapest electricity in the world from nine a M to three P M.
Speaker Change: Okay. Then what are you going to do in the other hours in a day and that that's that's where the problem is right now Kansas storage Division.
Speaker Change: Net in that and by the way when stores becomes a spread around the country. That's a big deal that gets rid of the utilities is.
Speaker Change: Having the giant Powerplant that took 10 years to build and they they go to the government and say I need more money because the blah blah all of a sudden you're there with your own battery.
Speaker Change: And it's not that far to see when you flip the switch and say Goodbye and your your solar system and you make your house.
Speaker Change: More efficient too you can't waste energy.
Speaker Change: But you can gather enough energy from your solar system and storage that will take care of your house that.
Speaker Change: That vision is not that far away.
Speaker Change: Thank you we only have a couple more.
Speaker Change:
Speaker Change: The next one is how does stock price and valuation impact your willingness to use stock for acquisitions and what is your view on the current valuation relative to that.
Speaker Change:
Speaker Change: Right now last time I checked your stock was two bucks.
Speaker Change: We have 80 million shares would be check the FCC website, so $160 million so.
Speaker Change: First is if you're worth $160 million and they want to buy something that's worth $160 million there propositions Gimme half your stock and then you have to say look our stock's not going to be at $2 for the same reason that people invest in it going forward you need to do that too.
Speaker Change: Alternatively, Okay, you've got your stock or you don't have stock Oh, you got your stock and your stock is down okay. So what you're doing is swap in your stock for our stock and you're betting which one is going to go go up faster. So there are arguments today, obviously, what I love is to start to be 20.
Speaker Change: And then then you've got all the currency you want but what I discovered in the solar industry I call it money poisoning.
Speaker Change: That we had in the other industries I always.
Speaker Change: Cypress has always had.
Speaker Change: $500 million in the bank I never thought about cash ever I thought about beating the bad guys.
Speaker Change: And right now for the for some of my life I'm living in cash flow dominated world and I'll tell you we run a tighter leaner company.
Speaker Change: And because of that.
Speaker Change: No.
Speaker Change: Isn't it is a dangerous world, but it's an exhilarating world.
Speaker Change: The market is infinitely large and if they don't help us to death in Washington will be fine.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change:
Speaker Change: With plans to expand capacity, how are you ensuring workforce training aligns with quality benchmarks.
Speaker Change: Workforce training is a big deal.
Speaker Change:
Speaker Change: We're not that good at it but everything I showed year to date I showed you a couple of management systems has has a spec.
Speaker Change: As quality process associated with the spec and as training.
Speaker Change: So you can go in a room somebody knows tell you how it works so am I right.
Speaker Change: My 19 year old my 19 year old HR Guy.
Speaker Change: Can run a preferred as good as reports ever got the Cypress and a much bigger divisions. So.
Speaker Change: Yeah, we're doing it nowhere not mature company yet we are getting more mature every quarter I didn't introduce him today I will one of these times we have is excellent.
Speaker Change: Quality, guys surrender, Betty and M T K.
Speaker Change: He is working on the quality of execution right now our products are pretty reliable. We don't have you saw.
Nine going to too so the disasters with yourself not working are gone so for us quality means quality of execution does he have a spec do you do it right do you do it right. The first time whats your yield.
Speaker Change: So in our case qualities almost synonymous with <unk>.
Speaker Change: Yeah.
Speaker Change: Operational excellence.
Speaker Change: Okay.
Speaker Change: Thank you that is all the questions we have in the queue today I'll turn it back to T. J Rodgers for any closing remarks.
Speaker Change: Well I talked long as usual, but I thought this is cool stuff I appreciate your coming in and listening to us. Thank you.