Q1 2025 SunPower Corp Earnings Call

April 30, 2025

Operator: Welcome everyone to SunPower's Q1 2025 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 speaker's 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 Raise Hand icon, which can be found at the bottom of your webinar application. For our audiences watching via the webcast, there is an Ask a Question tab on the right side flyout of the screen where you can submit a written question. Please note, today's 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.

<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 theres or ask a question tab on the right.

Syed 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.

Operator: 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 can be found in the press release issued this morning. I'll now turn the call over to T.J. Rodgers, SunPower's Chairman and CEO.

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.

Can be found in the press release issued this morning.

I'll now turn the call over to T J Rodgers Sunpower as chairman and CEO.

T.J. Rodgers: Morning. My name is T.J. Rodgers. I'm the CEO of SunPower. We've got the quarterly call, and I've got some added remarks that I actually delivered at the company. Let's get on with it. Okay. My computer is not advancing. Backwards. Try to make it work and see what happens from here. Okay, I'm trying to get rid of that. Apologize. This is not okay. Did you guys give me a left-handed mouse? Can I just have a normal mouse? They're trying to help me by giving me a left-handed mouse, so everything I do is backwards. You just turned it to a left-handed mouse. We want a right-handed mouse that works. Okay, the title is SunPower Reports Q1 2025, $80 million in revenue, $1.3 million in profit. That's the big news, really. I'll talk later about the ad.

TJ Rodgers: Good morning.

My Name's T J Rodgers.

TJ Rodgers: For Sunpower.

TJ Rodgers: Got it.

TJ Rodgers: The quarterly call and I've got some added remarks.

TJ Rodgers: Deliberate at the company, so let's get on with it.

TJ Rodgers: Okay.

Speaker Change: My computer's not advance.

TJ Rodgers: Yeah.

TJ Rodgers: Backwards.

TJ Rodgers: Brian.

TJ Rodgers: Make it work and see what happens from here.

Speaker Change: Okay, I'm trying to get rid of that.

TJ Rodgers: Apologize niches.

TJ Rodgers: Flat okay.

TJ Rodgers: Did you guys give me a left handed mouse.

TJ Rodgers: Can I just have a normal mouse.

TJ Rodgers: They are trying to help me or give me a left handed miles so everything I'd use backwards.

Speaker Change: Just turning to let David mouse.

TJ Rodgers: One radiated mouse works.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay. The title is Sunpower reports Q1, 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 yeah.

T.J. Rodgers: I'll actually show it to you. The numbers are here. We've got, as usual, GAAP and non-GAAP numbers. The numbers I'm focusing on here are Q1 2025 non-GAAP numbers. This is the big news. We've got $1.27 million in profit, up from -$5.9 million in the prior quarter. The GAAP numbers have bigger losses. 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 the good financial news. I'll point out on the non-GAAP numbers, this is not what we reported last quarter. It was $81.1 million we reported. This is what we would have reported with the new three-company revenue recognition rules.

Speaker Change: Yeah, They will actually show it to you the.

Speaker Change: 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: Our non-GAAP numbers and so this is the.

Speaker Change: This was a big news, we've had 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.

Speaker Change: On the.

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 three company revenue recognition rules.

T.J. Rodgers: The reason I'm telling you that is, the number was 81.1. This was not 47%, it was 36%. On advice of the lawyers, I put the new numbers in there because these are the quote audited numbers. They made our numbers better, and I don't want to report better numbers here today. Okay, this is our profit. Q3 is a truly unofficial number where I simply added the profitability of the three companies. The merger occurred right here, and then we lost $5.9 in Q4 and made profit in Q1. That is our curve. These are audited numbers. These are not. I'd like to congratulate our team. We broke the profit barrier starting here. 180 days later, bam, we've got profit.

Speaker Change: The 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 an official number where I simply added the profitability of the three companies the merger occurred right here.

And then we lost 5.9 in Q4 and a profit in Q1, so that is our curve on these.

Speaker Change: These are audited numbers.

Speaker Change: Or 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.

T.J. Rodgers: The rest of this report, that's really the financial news. We have a relatively simple company. The rest of the report, I'm gonna talk about what went on, and I'm gonna talk a little bit about our view of the future. Our $80 million was in line with expectations. We are currently an $80 million-plus per quarter company in revenue. The next step is to move away from that. I'll talk about that later. SunPower, the new company, the new name, is now properly and leanly staffed. So if you look at the headcount history, if you go back to Q3 of last year, the three combined companies had 3,500 employees. The first stop was close merger day one. We chopped down immediately to 1,341. One quarter post-merger, we were down to 1,140.

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 ever 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 in lean we 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.

T.J. Rodgers: I'm gonna talk about these layoffs. They're critical, how we do them, and whether or not they hurt the company. It does matter. Today we're down at 906. The target headcount back here after we merged was 1,225. The target headcount here, including the beginning of this quarter, was 980, and there's a reason for those targets I'll show you later. The good news is, of course, if you're worried about money, this is a dramatic cost-cutting effort. Problem you've got is that you can't let it harm the company, and you have to balance those off against each other. Here's how we do that. This is a memo just in our standard format. We haven't changed our logos yet. This is a thing called the requisition auction.

Speaker Change: Whether or not to 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 sheer including the beginning of this quarter was 980 <unk> reason for those targets I will show you later.

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 got is that.

Speaker Change: You can't let it harmed the comfort and you have to balance those off against each other.

Speaker Change: Here's how we do that.

Speaker Change: 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.

T.J. Rodgers: It's a process I used back in the semiconductor industry to maintain the right headcount, very tough industry for maintaining profitability. On page one, it says how many people we had at the beginning of the week, who left, who wants to come in, and what's our ending headcount. In this particular case, we actually added people, very rare, obviously given that curve, and ended up with 907. This was the third day of work week seventeen. Then down here is the summary of costs. If you add and subtract the dollars associated with the bodies, it says quarter to date, we saved an annualized $1.6 million. This is how we track money and get to having profit so quickly. We watch it three times a week.

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 with 907. So this was the third day of our work with 17.

Speaker Change: Then down here is the summary of costs of U 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.

T.J. Rodgers: Now, this is a very disciplined process. Forget the box for a minute. This is the total company headcount. It says we've gone down over time. These numbers are the actual headcount, and it says their current target is actually lower, yet say 881 people. This is for work week 13, 14, 15, 16, 17. This is something you look at a couple times a week to make sure it's on track, and you can see it is. The total company headcount is then divided into six parts. There are two divisions. I believe in having profit and loss divisions that control the company. My function in the company is more like that of a meddling director than it is CEO.

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 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 is then 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 is CEO.

T.J. Rodgers: I am obviously into a lot of details, but these division managers, they make our revenue, and they're responsible for making our profit. Then we have the overhead functions. You can see each of them as a trajectory. You can see, for example, administration is the lowest target. IT is at its target. Finance is getting to its target. 'Cause we had a quarter close with three companies, so huge amount of work. Quality and engineering, I've got together one VP running both. We have to have two hats in a company like this in order to make ends meet. That is the name of the game of solar, and that's the challenge for me as a manager. Okay, this is data. We have a set of consultants. They're called Ayna, A-Y-N-A.

Speaker Change: The immuno Imam obviously has a lot of details, but these division managers, they 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 is target.

Speaker Change: I T as add as targets 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 a bolt.

Speaker Change: We have to have two hats and a company like this in order to make ends meet that is the.

Speaker Change: The name of the game is solar and that's the 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.

T.J. Rodgers: They're a spin-out of McKinsey. They are excellent consultants. I've used them, for example, in the Enphase turnaround. They come in and give you a bunch of numbers like this. I'll give you one number. It says, for example, in HR, how many people should you have per HR employee? Then you have data for the median and the top quartile. This is for a couple hundred high-tech companies. The answer is that's a bad number. It's median. That's a good number. It's 75th percentile. That's the ratio. You have those ratios per million dollars of revenue, et cetera. That's how we get the lines for these groups, and that's how we drive them, 0.1 and 0.2. They're small, and they have to be small. These guys are judged on revenue per employee now.

Speaker Change: And they command and gave 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 and Thats. The ratio. So you have those ratios per million dollars of revenue et cetera, and that's how we get the lives for these 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 either 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.

T.J. Rodgers: They're judged on the bottom line 'cause their bottom line is my bottom line. The overall metric I'm looking at here is revenue per employee. The company right now is at $369,000 per employee per year. That's a good number, especially for solar. If you go check some other companies, I won't name them, but all you have to do is look at their headcount and their revenue from the last quarter times four, and you'll see numbers as low as $200,000. That's going out of business plan as I see it. The weighted average pretty much of our two divisions is what the company is. This is our classic solar division, which is the Blue Raven embedded startup that we have in the new homes.

Speaker Change: Especially for solar if you go check some other companies I won't name them. All you have to do is look at them.

Speaker Change: Head count in our revenue from the last quarter times, four and you'll 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.

T.J. Rodgers: This is a separate division which doesn't sell to people. It sells to corporations that make housing developments, and therefore it's got a lot lower headcount because, for example, we have a very large sales force here and less than 10 here, and that's why their targets are different. The businesses are really different. Okay, point here is, we track this 3 days a week, Monday, Wednesday, and Friday, 8:00AM. I'm involved, and it's what drove the curve and drove the profitability along the course of the accomplishment of making revenue. This is a disciplined thing. I don't know startups, and I don't know any solar companies that run tightly. This comes from the semiconductor industry. Here's the discipline right here. Director of HR, he does this report. He does it to specification. It's always there, and it always works unlike my mouse today.

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: In lesson 10 here.

Speaker Change: And that's why their targets are different 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 curves and drove the profitability along of course with the accomplishment of 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 destitute specification.

And it's always there and it always works unlike my mouse today.

T.J. Rodgers: More to come on that. I'm not gonna tell you his name because the vultures would be all over him. Your first reaction is the director of HR, you know, and the guy is 19 years old. No, he's not 19 years old, he's a full 25 years old. He's very competent, and he is representative of the kind of employees we have in Salt Lake. They work hard, they're young, and Salt Lake is the center of the world for solar. If you go look at where the solar companies are located by headcount, that's there. Salt Lake is the Silicon Valley of solar. I was gonna show you the rec auction spec, but when I was timing this thing earlier today, I decided not to go over it.

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 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 as we go look at where the 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 auctions 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 how.

T.J. Rodgers: All those graphs you saw come from a spec that I have, a spec that I wrote years ago and updated 10 times, and it tells us how to run that. I have transferred approximately 10 business processes, not all at once, to the new company and done training. What you just saw is one little module. I say we have discipline, and my joke was gonna be, here's a picture of my staff meeting last Wednesday. We do have discipline, and I didn't have it when I came in. Just backstory here. This guy right here, his name is Lee Ermey. The movie is Full Metal Jacket. It's one of the four movies that defined Vietnam. Stanley Kubrick classic.

Speaker Change: How to run that and I have transferred approximately 10 business process is not all of the 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 are disciplined.

Speaker Change: And my joke is gonna 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: Baxter here. This guy right here is my name is Li <unk>.

Speaker Change: The movie is full metal jacket Swan.

Speaker Change: For movies and define Vietnam.

Speaker Change: Stanley Kubrick classics.

T.J. Rodgers: The story on this guy is they brought him in as a coach to coach the actor who was playing this, the gunnery sergeant. Check perfection of the tie and pleats and the shirt and the whole thing. Guy who played the gunnery sergeant, how to be that. Then Stanley Kubrick, Full Metal Jacket, a genius, said, "Fire the actor. He's my gunnery sergeant." This is a real honest to God gunnery sergeant. If you ever watch the scene, it's a classic. It's a classic of the drill sergeants who's hated by the recruits right up until the time they get in war, and then all of a sudden he looks a whole lot better than he did.

Speaker Change: And the story and this guy is they brought him in as a coach.

Speaker Change: Kochi actor who is playing.

Speaker Change: <unk>.

Speaker Change: Check.

Speaker Change: Perfection of the tie in police and the shirt and the whole thing.

Speaker Change: Guy who played the gunnery sergeant at how to be that.

Speaker Change: And then Stanley Kubrick 2001 space Odyssey of genius.

Speaker Change: Said prior the Acura Gisela ease my God resurgence. So this is a real honest to God gunnery sergeant and if you've ever watched the scene is a classic.

Speaker Change: And it's a classic of the drill sergeants, who saved advisor recruits right up until the time, they get more and then all of sudden it looks a whole lot better needed in the first movie.

T.J. Rodgers: The first movie that did this was the Sands of Iwo Jima, starring John Wayne, and he was Sergeant Stryker. Same story. This guy's the best of all of them. Okay, another thing I've transferred is to make the point of the dichotomy of having to do two opposite things at the same time. That's always been true. This is a memo I wrote in 1987 and rewrote four times up to 2013. The title of the memo. This is one of my specs, internal specs that I've transferred. So this document exists in our system. It says, "Ten things to do when a valued employee quits." Here's. This is the first three steps on page one. It goes on for five pages and defines the process.

Speaker Change: This was the sands of EOG M starring John Wayne and he was stars of Stryker same story disguise the best of all of them.

Speaker Change: Okay.

Speaker Change: Other thing have 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 up to 2013.

Speaker Change: And the title of the memo and this is one of my specs and journal specs that are 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 years. It goes this is the first three steps on page one.

Speaker Change: It goes on for five pages and defines the process.

T.J. Rodgers: At the very same time we're going down a roller coaster for headcount, we have executives working on keeping key people. Just read one thing. React immediately within five minutes. There is nothing more important than to react immediately to an employee who's quit. I repeat, there is nothing that takes priority over working with an employee who has resigned, presuming you want to keep him. Just in case you didn't get it, I say the phrase, quote, "Nothing more important," unquote, means that your action should happen immediately. The next activity you have scheduled should be canceled. Any delay, such as I'll talk to you after our staff meeting, is unacceptable. I finally got this one across one time when I canceled my own staff meeting 'cause we had an engineer that was a really good guy.

Speaker Change: So at the very same time.

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 like Eaton.

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 of 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.

T.J. Rodgers: I walked out and said, "I got to do." Anyway, this is a process for keeping people. We have a process for evaluating people I didn't show you, to save time. Key new employees. We are now able to recycle a fraction of the salaries. I showed you savings this quarter to date is $1 million, and obviously we save $10s of millions on those curves. We now recycle a fraction of the salary saved from headcount reductions to bring in key industry players. At the very same time you're cutting, you're hiring, and you're hiring the people using the money with people that left, and that's a rolling process, happens, like I said, three times a week and you're building it up.

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 for evaluating people I didn't show you.

Speaker Change: Save time.

Speaker Change: Keno employees.

Speaker Change: We're 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 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.

T.J. Rodgers: Last week we kinda hit the jackpot and we had two great hires, and I brought those guys in to meet you today. Actually, I've got their bios here. The guy sitting next to me used to look like that. That's his name is Dick Swanson. That's me in 1972, and this is what a conference room looked like before whiteboards. This guy became the head of the electrical engineering department at Stanford. We all worked in the Stanford Integrated Circuits Lab, which at that time put out more papers per capita than Japan, Hitachi, Fujitsu, all of them. This is how he looks now. Actually weathered pretty well. He gave me his resume. He wrote this. I asked for a short resume. I'll make three points.

Speaker Change: Last week, we kind of hit the jackpot via two great hires and I brought those guys in the media today.

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 X Watson.

Speaker Change: That's me and 1972.

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.

T.J. Rodgers: He's the co-founder, president, and CTO of SunPower Corporation. After that, he was. During that time, overlapping, he's assistant and associate professor of electrical engineering at Stanford, so he taught students. In our world, like the National Academy of Sciences and the National Academy of Engineering, that's sort of the Oscar world. He's a member of that. I called him up this morning and I said, "Dick, I'm gonna introduce you today, and we don't have a title. This is a one-year contract to help us out for obvious things. We don't have a title, so, what do you wanna be called?" It didn't help him. He said, "Well, I'll be a technology consultant." I said, "I love it." Gives me a chance to make a point.

Speaker Change: He was a true after that use of enduring that time overlapping as assistant and associate professor of electrical engineering Stanford. So he taught students.

Speaker Change: And.

Speaker Change: In our world like the National Academy of Sciences, and the National Academy of engineering that that sort of the.

Speaker Change: That's sort of the the Oscar World each member of that.

Speaker Change: So I called him up this morning.

Speaker Change: And I said deck I'm going to introduce you 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: The 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.

T.J. Rodgers: The solar industry is saturated with title-hungry people. Chief Revenue Officer, chief this, chief that. Here's a guy that really is the chief, and he's a, quote, technology consultant, unquote. I'll use this as a moral lesson inside the company. Right now, I'd like to introduce Richard Swanson to you, and he's got a few words to say.

Speaker Change: Chief revenue officer, Chief this cheese that here's a guide it really is to achieve and he's a quote technology consultant oncor. So I'll use this as a moral lesson inside the company. So right now like to introduce sticks once in three years and he's got a few words.

Richard Swanson: Thank you, TJ. Well, today, we're at a pivotal moment in the renewable revolution. About a year and a half ago, we surpassed 1 terawatt of installed PV capacity globally. As we speak right now, we're bumping up to 2 terawatts of global PV capacity. To give you some idea of the magnitude of this, the entire US electrical generation capacity is 1 terawatt. We're gonna be very soon producing 1 terawatt per year of photovoltaics. I think the reason for this is simply that PV has become the lowest cost form of electrical energy. This is sort of a transition point in our industry, the way I see it. We are entering a new phase, where the question is, okay, we've done this. What now?

Speaker Change: 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 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.

Richard Swanson: How do we take our energy supply from sub-5% of the global generation to the dominant source of generation? How do we do that? This is a whole new phase in our industry, and I'm really excited about the opportunity to come and help Cypress make that transition and use my 50 years of experience in the industry to work with them on the complex supply chain and technology landscape that we're facing, and look forward to great results here. Thank you, T.J., for inviting me.

Speaker Change: 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.

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.

Speaker Change: They will work with them on with complex supply chain and technology landscape that we're facing and look forward to a great results here. So thank you T J for inviting 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 the loss okay.

T.J. Rodgers: He slipped and said the word Cypress, and I'll tell you why.

Richard Swanson: Oh my God.

T.J. Rodgers: It'll be obvious later why that is. Okay. Next, Mehran Sedigh. He comes in as the Executive Vice President of the Storage Systems Division. A storage system is not a battery. It's a system that has a battery, batteries in it, among other things. Our Chief Technology Officer. He's a PhD in chemical engineering from USC. He just came out of Enphase, where I would point out that he's built a $500 million storage business in Enphase, and he's connected very well with Enphase. Dick said something that's true, but other people had argued with it. It's true that if you look at the cost per kilowatt hour from solar, it's the cheapest, you know, like $0.02. Nuclear, $0.06. Gas is $0.06 or $0.08. You've got this little problem.

Speaker Change: Next.

Speaker Change: One setting.

Speaker Change: He comes in as the executive Vice President and storage systems Division.

Speaker Change: So storage system is.

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.

He just came out of Enphase.

Where I would point out that he's built a $500 million storage business and enphase and he's connected very well.

Speaker Change: 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: My two cents.

Speaker Change: Nuclear six gasses six rate.

Speaker Change: But you've got this old problems suddenly shines and an average where I live by virus today.

T.J. Rodgers: sun only shines on average where I live 5 hours a day. You gotta work on that one. That's called, you know, batteries. That's what this guy did. Today what you have to do today, and what's gonna change the world is during the day, you're gonna have what's called a quote grid connected battery unquote. Your solar system will be bigger than the consumption of your house, and then you'll store that up. Then at 7:00 PM, when the local utility starts screwing you for $0.30, $0.40, $0.50 a kilowatt hour, you'll run off your battery. In effect, it's like a bulldozer. You scoop up power during the day and dump it back into your house at night.

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.

T.J. Rodgers: The battery will become the most important ROI component of putting in solar. We need a real battery guy, and that's Mehran, and he's going to run a system where we're gonna create system-level storage products, not just sell somebody else's batteries. Mehran.

Speaker Change: And the battery will become the most important or why.

Ponant of putting in solar.

Speaker Change: So we need a real battery guy.

Speaker Change: And 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 run. Thank.

Mehran Sedigh: Thank you, T.J. Good morning, everybody. Really excited to be joining SunPower. It's a really important junction for SunPower. If you go back to the days that Dick started and JakeHelp push the company forward, it has its roots in innovation, and this is where we are going to go back to, really, both in products as well as services. T.J. talked about me coming from Enphase. I spent six years there developing three generation of energy systems, not just a battery. It is true battery is a, of course, essential part of any energy management system, but it's not sufficient. You know, electrification is pushing homes forward more and more toward consuming more energy, electricity. AI is coming to the future in everything we do.

Speaker Change: Thank you T J.

Speaker Change: <unk>.

Speaker Change: But really excited to be joining you get sunpower.

Speaker Change: This really important injunction.

Speaker Change: Sunpower if you go back to the days of the big.

Started in.

Jake: Hi, Jake.

Speaker Change: <unk> pushed a public comp.

Speaker Change: Copies for mortgage added sourcing 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.

Speaker Change: Coming from Enphase I spent six years developing free generation of energy systems, not just a battery.

Speaker Change: It is true batteries of course essential part of any energy management system, but it's not sufficient to know electrification.

Speaker Change: Electrification pushing pumps for work.

Speaker Change: More and more talk.

Speaker Change: Consuming more energy electricity, a ice coming to the picture in everything we do it is going to put more pressure on grade and having an independent energy source, which is southern a loop is no longer a nice to have said, it's a necessity.

Mehran Sedigh: It is going to put more pressure on grid and having an independent energy source, which is sun on our roof, is no longer a nice; it's a necessity. Using that requires a sophisticated software development, AI-enabled algorithm to manage all that, you know, interaction with the grid, making sure the homeowner is taken care of financially with ROI and using the cheapest source of energy available. I'm excited to start coming in, contributing to that process forward with SunPower and having some fun along the way.

Speaker Change: And that using that requires a sophisticated software development sophisticated data.

Speaker Change: Ah enabled alloys and to manage all of that many shares.

Speaker Change: A traction with the Greek making sure that homeowners taking care of financially with ROI of using the cheapest source of energy available.

Speaker Change: So I'm excited to start becoming gate contributing to that.

Speaker Change: Process for rugged Sunpower unknown.

Speaker Change: Having some fun along the way.

T.J. Rodgers: My recruitment for these guys was all technical. You guys come in, we get to make changes that'll change the world, and that's really the message I'm gonna give you for our mission going forward. Okay, other stuff. Now we formed a strategic partnership with a company you haven't heard of called Sunder. If you lived in Salt Lake City, you would know exactly who they are. They're big, highly regarded in their sales firm. We now have them supporting our growth. They have more salespeople, by the way, than we have employees, just to scale it for you. They're now supporting our growth, and that'll be orders coming in now. It'll show up in Q3. Next point. We strengthen our board with three public company ex-CEO directors. That is, directors who ran companies.

Speaker Change: We.

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: Other stuffs and we formed a strategic partnership with a company you haven't heard of coal sender. If you live in Salt Lake City, you would know exactly who they are they're big highly regarded in their sales for us.

Speaker Change: So we now have them supporting our growth they have more salespeople by the way than we have in voice just the scale. It for you.

Speaker Change: They are now supporting our growth.

Speaker Change: 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.

T.J. Rodgers: Lothar Maier, a Former CEO of Linear Technology, a $1.4 billion chip company. Dan McCranie, who's right here. Can we get a picture of him, please? Where? There he is. He came over. Dan, he's the former chairman of five high-tech companies, including Freescale Semiconductor and ON Semiconductor, the two halves of Motorola when Motorola spun out their halves and became, and broke up into two public companies. Jamie Haenggi, she lives in Wichita, and she's the Former CEO of ADT Solar. We've got. We're strengthening our board, and I'll talk about the statistics in a minute. Okay. When we first went from being a startup to being a public company, we had a startup board, and you don't follow the independence rules. You get the best person you can.

Meyer: Both are Meyer and former CEO of linear technology of $1 $4 billion Chip company.

Speaker Change: I'm, Dan Mccranie Who's right here can we get them.

Meyer: Picture of him. Please we're serious.

Meyer: He came over.

Meyer: Dan Dan.

Speaker Change: He is the former chairman of five high tech companies, including Freescale and on the two halves of Motorola when Motorola spun out there have some became.

Meyer: It broke up in the two public companies.

Jamie Hankie: And then Jamie Hankie, she's a she listen.

Speaker Change: Wichita.

Speaker Change: And she is a former CEO of ADT solar so we've got.

Speaker Change: We're strengthening our board and I'll talk about the statistics as a 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 independence rules.

Speaker Change: Get the best person you can.

T.J. Rodgers: Now we have independence rules. That is, for example, the person who interfaces with the public can't be me because I'm an employee, and I'm not independent, and you have to have an independent director for that. In that case, we've got Ron Pasek, who's the chairman of our audit committee, and he's now the lead director, and he's the man that interfaces with the public. I'm chairman, but he's the guy that talks to the public. Secondly, in the comp committee, we've got a guy who used to run Complete Solar, so he's not independent, won't be for five years. He's been replaced by Dan McCranie that I just met. Dan has been on the board of way bigger, more complex companies than ours.

Speaker Change: Now we have independence rules Adas for example people person who interfaces with the public.

Speaker Change: Can't be me, because I'm, an employee net I'm, not and I'm not I'm not independent and you have to have an independent director for that.

Speaker Change: So in that case.

Speaker Change: We.

Speaker Change: We've got Ron passage.

Speaker Change: Mr. Chairman abroad Committee and he's now the lead director and east demand that interfaces with the public I'm, chairman, but but he's the guy that talks to the 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 won't be for a five.

Speaker Change: 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 and ours.

T.J. Rodgers: The two points I'm making here, of our 11 directors, we have a relatively large board. We have eight with CEO experience, and we have seven who are independent. We now have a very strong board going forward. Last point in the primary presentation. I won't say it again, but I talked about our economics. Everybody's worried about the market right now and market price. The best we can say is, we haven't been damaged as bad as the other guys. Here I've taken three or four important companies. This is Complete Solar. These are stock graphs. If I summarize those graphs for year-to-date performance up to 27 April when the snapshot was made, we're a little bit ahead of even, and the industry's in the tank.

Speaker Change: So the two points I'm, 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 primary.

Speaker Change: Primary presentation.

Speaker Change: I talked about or I wont say, it again, but I talked butter economics, and everybody's worried about the market right now in market price.

Speaker Change: And the best we can say is.

Speaker Change: 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 for 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.

T.J. Rodgers: We feel that we're being recognized for what we're doing financially. Okay, a few things, all-hands meeting. I go to Salt Lake. I go into a big room in the basement. Between that and the people watching, we have 1,000 people, 906. We have an all-hands meeting. By the way, the all-hands meeting, let's just say I was considered an alien from Silicon Valley for a while, and I'll talk about that in a minute. Okay, first thing we talked about was SunPower rebranding. Part of the company comes from a startup called Blue Raven. They're very proud of their company, and the concept of getting renamed something I had to sell to them.

Speaker Change: Okay, a few things all hands meetings. So I go to Salt Lake I go into a big room in the basement.

Speaker Change: Tween that and the people watching.

Speaker Change: We have 1000 people 906, and we have an all hands me.

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 and I'm part of the company comes from a startup called Blue Raven Theyre very proud of their company and the concept of getting renamed something I had to sell to them.

T.J. Rodgers: I'm gonna also talk about that because this is the first meeting we've had since we rebranded to SunPower. There's our logo. I'll explain that in a minute. First of all, SunPower, this is a list of 70, the second half of the list of 70 companies that are solar and went bankrupt. Now many of them are private sales companies, but some of them, SunPower being the biggest, were big, real companies that really did go bankrupt. My first point is we have to do everything, including those layoffs you hate, in order to keep solid financials, because if you don't have that, you don't have anything. They bought into that. Second point here is that, acquiring solar companies to grow rapidly.

Speaker Change: So that I'm going to also talk about that because this is the first meeting we've had since we've rebranded the Sunpower. There's are our logo I'll explain that in a minute.

Speaker Change: First of all.

Speaker Change: Sunpower. This is a list of 70 that second half of the list of 70 companies that are solar and went bankrupt.

Speaker Change: Any of them are private sales companies, but some of them sunpower being the Vegas were big real companies that really to go bankrupt.

Speaker Change: So my first point is we have to do everything including those layoffs you hate 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.

T.J. Rodgers: In semiconductors, when I ran Cypress Semiconductor, I was there for 34 years, we acquired 26 companies. If you acquire a company, you acquire designs, you acquire the people that designed it, you acquire the marketing people. They all come to a new place, their products are there, and the acquisition sticks. Solar's not like that. The solar sales forces are mobile, and if you bring them in and piss them off, then they go away, and don't come back. We will acquire with trepidation, and we will have all kinds of golden handcuffs on the people that we acquire. That's my only point. Okay, going back in time, saving SunPower.

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.

Speaker Change: Have you acquire company acquired designs you acquired <unk>.

Speaker Change: People that decided to acquire the marketing people they all come to a new place their products are there and in it and the acquisition is fixed.

Speaker Change: Solar is not like that the solar sales forces are mobile.

Speaker Change: And if you bring them in and Petsmart and they go away and don't come back.

Speaker Change: So.

Speaker Change: 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.

T.J. Rodgers: San Francisco Chronicle: SunPower had a great idea and strategy, but cash was running short until it received a $750,000 personal check from someone who saw the inner light. I think that's the only thing that San Francisco Chronicle ever wrote about me that was favorable. Here we are on top of Cypress. This is, I think, like 2002. We just had put on a roof Grace Petroleum panels. Dick and I went on the roof. We were doing some sort of a promotion, CEOs of the two companies. That is Silicon Valley, and that's San Francisco Bay. Okay. SunPower's reason for being wasn't we have the best sales force in the world, it was we have the best panels in the world. Ours are smaller and higher in power.

Speaker Change: San Francisco Chronicle, Sunpower had a great idea and strategy, but cash was running short Intel. It received a 750000 dollar person check from someone who saw the night light I think that's the only thing in San Francisco Chronicle ever wrote about me that was favorable and in here. We are on top of Cypress Cypress was this is a.

Speaker Change: I think like 2002, 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: Okay.

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 in the world.

Ours are smaller higher parties or have panels that I could get into one picture, but you got a smaller panel is pretty it's all black is more wattage than the competing town so that.

T.J. Rodgers: These are half panels that I could get into one picture. You got a smaller panel, it's pretty, it's all black, and it's more wattage than the competing panel. That's what SunPower sold, technology. Although I'll admit, sales is dominant in this industry today, technology still matters, hence the techie guys that we didn't have, that we took a few percent of our savings from the overstaffing in the company and recycled it into building a technology team, and these guys will both work on that. This is an old slide that was made in 2009. Cypress still owned SunPower at that time. We built an automatic line for them to make solar panels, and they got to $79 million in 2005, made a profit. We took them public.

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 a 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 in public and I was the chairman.

T.J. Rodgers: Cypress took them public, and I was the chairman. They grew a factor of 18. The guy that did that was Tom Werner. Also, I worked with Tom and they went up to $1 billion. This is a rocket ride, made SunPower the predominant company in the world. At that time, our investors, we owned 40% of the economics, but they were 10-vote shares, so we own control and 40% of the economics. Our investors were raising hell that they didn't give a damn about our little semiconductor company. They wanted direct access to the solar stock. We spun it out, and that was a one-time stock dividend worth $2.6 billion at the time we did it, putting the value of SunPower at that time at $6 billion.

And they grew a factor of 18.

Speaker Change: The Guy that did that was Tom Werner.

Speaker Change: Also I work with Tom and and they went up 2 billion since 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 vote shares so we don't control and 40% of the economics.

Our investors were raising hell, they didn't give a damn about our little so as a semiconductor company. They want a direct access to the soldiers stock. 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.

T.J. Rodgers: Two years later, the French went in the market, the oil company, Total, big bucks, and they bought 60% of the stock of the company in the open market. We all enjoyed the share price ride, but they took it over, and it was no longer a Silicon Valley company, which is unique in the way it works. You don't have your board meetings in Paris. Just to let you know, that one doesn't work. That's when I left. Okay, the point is, this is old SunPower after it was, quote, "saved" back here. That's where we are right now. 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, divide it by four, and that's the next quarter.

Speaker Change: Three years later, the French what 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: You'll enjoy 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.

Speaker Change: 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 when I left.

Speaker Change: Okay. So the point is this is all sunpower after it at the after it was called saved 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, he can write it down divide it by four and that's the next quarter.

T.J. Rodgers: I'm talking about our vision for the future. All I'm saying is, if you measure our vision of a prior company in a different era, we're moving along, and we're not done. That's all I said. The SunPower brand is hugely valuable, and I'll make that point with this graph. This is a company called EnergySage. They're an East Coast company, and they quote solar deals, and they quote what are called long-tail solar deals, so this is to the homeowner, full retail. In this case, they have a graph of price difference from the least expensive equipment pairing. Here, the least expensive equipment is Tesla. They brought out a new battery, and it's cheap. REC is a high-volume manufacturer, and they make great panels, fortunately not in China, and we use their panels right now.

I'm 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, where we're moving along and we're not done it's all I said.

Speaker Change: Sunpower brand is hugely valuable Dan I'll make that point with this graph.

Speaker Change: This is a company called energy saves your East Coast company, and they quote solar deals and the quote what are called long tail solar deal. So this is a homeowner.

Speaker Change: Full retail.

And in this case, they have a graph of price difference from the least expensive equipment Perry.

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 panels, Fortunately not in China, and we use their panels right now.

T.J. Rodgers: Okay, this is 0% to the cheapest, and that's the lowest cost option. We have to be lean enough to compete there, but I'll fire the marketing guy who competes there. Simple. Okay, now you go along, and you see there are the guys that sell volume at whatever price is required. There's a group of companies that have some sort of advantage, and they have a premium. In this case, the first advantage company, or group of companies, uses Enphase inverters, not Tesla. There's a reason for that. REC panels. You go up and there's this tier of 20 to 30% premium. You go up here and you go, who the hell are those guys? The answer is, and this by the way is last August.

Speaker Change: Okay. So this is zero percent to 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's 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: Our group of companies uses N phase inverters, not Tesla and Theres a reason for that.

Speaker Change: And then our AC panels than.

Speaker Change: And then you go up and there is tier 20% to 30% premium.

Speaker Change: Then you go up here and you go who the Hell are those guys.

And the answer is and this by the way is last August.

T.J. Rodgers: The asterisk down here, SunPower filed for bankruptcy on 5 August 2024, so we expect this to be the last report including its products. You'd walk in and say, I'm SunPower. What kind of panels do you have? Warranty from India. Who are they? What kind of inverter do you have? We have our own proprietary inverter. I know about that because I'm replacing them right now with Enphase inverters so the thing works right. SunPower name, even with a lackluster product line, was 50%. That's what I want to get back. We don't have good marketing. We're going to have one of these meetings coming up. I'm going to introduce a marketing star and see how we're going to go forward. Right now, me griping about reading reports and griping about price is, quote, marketing. Okay.

Speaker Change: The abstract out here Sunpower filed for bankruptcy in August of 2024. So we expect this to be the last report, including <unk> 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: We're kind of in Burger you have we ever own proprietary and Burger 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 and we don't have good market and we're going to have.

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 co op marketing.

Speaker Change: Okay now.

T.J. Rodgers: Now, to get back to where SunPower used to be, I want to bring back that technology edge, hence the guys we just met. We're going to partner with REC on panels. We already have. We already use their panels. When the SunPower inverters go away, we're going to partner, are partnering with Enphase. We use only Enphase inverters right now. One good thing about being the CEO is we now have a BOM spec, AVL list, and I have to sign it. That's what's on it, among other things. That's where we're headed, back to having a technology advantage so our salespeople can talk why you want this one. Only if you say, I can't afford it, then they'll say, well, we've got one you can't afford. Okay. The vision. This is one of my favorite pictures ever.

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.

On panels, we already have we are user panels and when some foreign Brewers go away were in partner are partnering within base. So we use only enphase murders right now.

Speaker Change: One good thing about being the Ceos.

Speaker Change: We now have a bomb spec a b L lists and 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 sort our salespeople can 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 Division.

Speaker Change: This is one of my favorite pictures ever.

T.J. Rodgers: It's a real airplane. It was made by NASA through a contractor. It had 65,000 solar cells on it producing 35,000 watts. It had electric motors on it, 2 horsepower electric motors, 1,500 watt motors. You can see these propellers. They look like windmills because they are. Because at 96,800 feet, there's no air. You need a giant propeller to grab enough air to cause something to fly. This airplane took off under its own power, flew to 96,000 feet, maintained it. That's a world record that still stands today. It was done in 2001. To me, I'm not going in the airplane business. I wish I could. We sold these for $200 a watt. Today, it's 31 cents a watt. I'm not going in the airplane business.

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 introducing 35000 watch and.

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 windmills because they are.

Speaker Change: Because at 96800 feet Theres nowhere, so you need a giant propeller to grabbing out there to cause something to fly.

Speaker Change: And this airplane took off under its own power.

Speaker Change: <unk> 96000 feet maintained at NASA World record that still stands today and it was done in 2001.

Speaker Change: And to me I'm not go on an airplane business.

Speaker Change: I wish I could we sold these two $200 watt today today 31 cents award but.

Speaker Change: I'm 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 the neighborhood.

T.J. Rodgers: This is an image of what can happen with solar, with technology and a vision, as opposed to selling solar cells in the neighborhood. Okay. I thought about that. This is my kitchen. I was working on this. Actually, the report I'm giving right now. I mocked up an old copy of The Wall Street Journal with an ad telling what I'm going to tell you right now. This is the text of it. I'm also the IR guy, in case you haven't figured that out. My wife and our two-person venture company helps with this. That became this. This is the actual back page, full back page ad of The Wall Street Journal yesterday. Normally, I would never do such an extravagance, but I figured this changed the branding of SunPower. The new direction warranted it. I already told you about that airplane.

Speaker Change: Okay.

I thought about that this is my kitchen as those working on this actually the report I'm, giving right now.

Speaker Change: In a mock up an old copies of the Wall Street Journal will then add.

Speaker Change: Telling telling where I'm going to tell you right now.

Speaker Change: And.

Speaker Change: This is the text of it.

Speaker Change: I'm also the IR Guy in case, you haven't figured that out and.

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 do such an extravagance, but I figured.

Speaker Change: This change the branding of Sunpower, the new direction.

Speaker Change: Warranted it.

Speaker Change: So.

Speaker Change: We already told you about that airplane.

Speaker Change:

T.J. Rodgers: By the way, 96,000ft is 30,000ft above that. That's F-15 Eagle. In my mind, with a 104 to 0 kill ratio, it's the hottest fighter plane that's ever been made anywhere. The interesting thing is it's really an interceptor, not a fighter. What that means is when the bad guys come over the border, this thing needs to get to fighting altitude about 30,000ft fast. So they made it with an engine that has 1.17 times the thrust of the weight of the airplane. Therefore, it can go vertically. This airplane can take off. They're actually on, you can go on the website, not our website, but you can go on the internet and get pictures of a guy taking off and going to 30,000ft, ready to fight.

Speaker Change: By the way 96000 feet is 30000 feet above that that's F 15 Eagle.

Speaker Change: In my mind with 100 420 kill ratio its hottest fighter brands ever been made anywhere.

Speaker Change: The interesting thing is it's really an interceptor not a fighter.

Speaker Change: That means as 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 asked 117 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.

Speaker Change: You can go on the website and on our website on the Internet get pictures of Guy taping, taking off and going to 30000 feet ready ready to fight the.

T.J. Rodgers: The record from going from ground to 30,000 feet is 56 seconds held by that airplane. It won't fly high. It's not stable high. It's a missile when it gets up there. It's not aerodynamic. Of course, there's the airplane of all airplanes, the SR-71 Blackbird. This airplane flew over the nuclear missile silos of Russia for two decades, and they never had a problem. The Russians invented a plane called the MiG-25 Foxbat. It was a 1,800 mile an hour airplane, and they couldn't touch it. They actually invented that airplane and long-range missiles so they could take off when they saw the Blackbird coming, get up, get to their highest altitude, then fire a missile to go the rest of the way. Never happened. This thing travels twice as fast as the speed of a deer hunting rifle.

Speaker Change: The record from going from ground at 30000 feet.

Speaker Change: And 56 seconds sell 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.

Speaker Change: Then of course, there's the airplane of all airplanes CSR 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 call to make twenty-five box back.

Speaker Change: It was a.

Speaker Change: 1800 mile an hour airplane 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 below the rest of the way never happened. The same travels twice of that speed of a deer hunting rifle and.

T.J. Rodgers: All the guy has to do is turn two degrees to one, and by the time the missile gets there, he's 20 miles away out of radar lock. In July 1976, this airplane set records for speed, 2,193 miles per hour, and altitude 85,069. For air-breathing airplane taking off under its own power, not a rocket. That is a record. By the way, a little factoid I really like. Everybody knows that in Denver you have to boil an egg longer in order to get it cooked. That's because the boiling point of water reduces as the pressure holding the water down reduces. At 85,000 feet, water boils at 59 degrees Fahrenheit. Said another way, your body temperature is above the boiling point of your blood.

Speaker Change: And all 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: <unk> air breathing airplane, taking off under its own power not a rocket that is that is a record 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 or the water down reduces.

Speaker Change: So at.

Speaker Change: At 85000 feet water boils at 59 degrees Fahrenheit.

Speaker Change: Said another way your body temperature is above the boiling point of your blood. So that's another way, it's not good to be up there.

T.J. Rodgers: That's another way it's not good to be up there. These guys can't just wear an oxygen mask. They actually have to have a full pressure suit to fly that airplane. They would fly for 10 hours at a time over the Soviet Union, with the Soviets trying their latest little whiz-bang to take them out. Never happened. This is a statement. I've already gone through it. I won't do it again. There's 3 companies that have combined, old SunPower, New Homes, Complete Solar, and Blue Raven Solar. Complete Solar is my old company. By far the smallest. We brought 65 people into the 900-person company. I showed you the profit trajectory.

Speaker Change: And these guys, Kansas, where an oxygen mask they.

Speaker Change: They they actually have to have a pulse pressure suit on fly their.

Speaker Change: That airplane and they would fly for 10 hours at a time over the Soviet Union when Soviets tried their latest little whiz-bang take him out never happen.

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: Old Sunpower, new homes complete solar and Blu ray wind 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 revenue.

T.J. Rodgers: I talked about the forecast for revenue, and then I pointed out I was the chairman of SunPower, and hence I have an emotional stake in this. We're now on NASDAQ. We now are SPWR on warrants. That's our website. That's our new logo. In case you haven't figured it out, I'm a former stamp collector, so I turned this logo into a commemorative stamp. Okay. Next thing, customers. If you don't treat your customers well, you'll get blown up. If you've been reading the news lately, some of our competitors are getting famous for not doing well by customers.

Speaker Change: And then I pointed out I was the chairman of Sunpower and S I ever.

Speaker Change: Emotional state and this we're now NASDAQ we now are S. P. R and S. P R W or warrants.

Speaker Change: And that's our website.

Speaker Change: NASA new logo I M.

Speaker Change: It's M figured it out former Sam I'm M. 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 customers well, you'll get blown up.

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 so carrier customers and working on quality and customers was a third of my job.

T.J. Rodgers: One thing I learned in my industry is you took care of your customers and working on quality, and customers was a third of my job at the end of my career at Cypress. Okay. You recognize this guy. He has a house in Nevada. They had a quote, "a three-year delay due to quality issues, including a roof leak, communication breakdowns," meaning the panels didn't talk to the IoT, "legal escalations," et cetera. This is in Salt Lake. This is in our boardroom in Salt Lake. They decided they were gonna fix it, and they did. You can see it barely there. Her dad signed this jersey, and it now hangs in the Hall of Fame.

Speaker Change: At the end of my career Cyprus.

Speaker Change: Okay.

Speaker Change: Recognize this guy he has a house in Nevada they.

Speaker Change: Had a quote a three year delayed due to quality issues, including our ruefully communication breakdowns meeting the panels and talk to the Iot.

Speaker Change: It'll escalation et cetera, et cetera et cetera. So these guys decided they were going to a decision in salt Lake, Michigan in our boardroom Salt Lake.

Speaker Change: They decided they were going to fix it and they did.

Speaker Change: And.

Speaker Change: So you can see it barely there she ed.

Speaker Change: Her dad sign this to Jersey, and and now hangs in the Hall of Fame and whenever you do something good for customer your name goes up.

T.J. Rodgers: Whenever you do something good for a customer, your name goes up. Customer escalations. We keep a lot of data. This is one graph, but number of customer escalations is down. Guess what? I answer my phone. I read my email. People know how to get to me. If you screw a customer, you're screwing me, and I don't tolerate that. Everybody knows that now. Yes, you can see, we're treating them. We always did. Blue Raven in particular has always had a high four-star rating. SunPower did. The culture is there to begin with. I'm not fighting against the culture. Now we're taking it beyond the right thing to do to fetish. I learned this from another guy. Him. Now, that's Jerry Sanders. Dapper Jerry.

Speaker Change: [noise] 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 what 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 sorted 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.

T.J. Rodgers: Advanced Micro Devices. He still lives in LA. The only difference now is the silver manes are now shoulder length. I see him every now and then. He was the salesman. He had a BSEE, but he was a sales guy out of Fairchild, and he was an advocate for the customer. If you screwed one of his customers, the wrath of hell would come down on you. The story I just told you about us, that's where I learned it when I worked at AMD. I was there for three years. One example, homeowner escalation. This came into my email. Turns out she had already talked to WCBS reporter in New York. I was all set up to be the bad guy that screwed the customer and all that.

Speaker Change: Advanced micro devices is 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 when I 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 recorded in New York.

Speaker Change: And so I was all set up to be the bad Guy the screwed the customer and all that.

T.J. Rodgers: We fixed it. I just wanted to close the loop here. The techie facilitator that came to our house is from New Jersey, was able to fix our battery issues. There was a laundry list of errors that they showed us, but the SunPower engineer that you line up for, et cetera, et cetera. Down here, this is a slide again from our company meeting. The heroes, they all go in the Hall of Fame. One more. Thank you for reading my emails and helping me get the two appointments needed to deal with my broken string inverter. I won't tell you that Tesla has a string inverter, and we don't. We have a microinverter.

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 engineered that your lineup for cetera et cetera.

Speaker Change: Here. This is 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 and bird and we don't we have a micron Berger our inverters optimize one panel at a time for maximum power, whereas the string inverter ties, let's say 10 panels together and.

T.J. Rodgers: Our inverters optimize one panel at a time for maximum power, whereas a string inverter ties, let's say, 10 panels together and can't optimize all 10 because they're different a little bit from each other. Plus 10 panels at 50 volts each is 500 volts DC. Not something you want around your house. String inverters are yesterday's news, and that's why we powered with Enphase. Excuse me, partnered with Enphase. All right. This is the last section. I wanna just give you a flavor for the culture of the company. I asked her questions, and the questions have been very problematic for me. The first meeting I went to, the questions were passive-aggressive insulting. Now that we have to put up with you comma question kind of things. In my last meeting, I showed this slide.

Speaker Change: Can optimize all 10, because they are different a little bit from each other.

Speaker Change: Plus 10 10 panels, it's at a 50 volt <unk> 500 bolt 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 section of 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 comma question kind of things.

Speaker Change: And.

Speaker Change: And my last meeting I show this slide.

T.J. Rodgers: As you might gather, I am a movie buff, and this is a scene in front of the Frankenstein castle from the 1931 movie. I told them I showed them this picture, and I said, "That's kinda how I felt when I was looking out into the crowd last quarter when I came here for the meeting." They laughed a little bit, and then we decided to try to make de-escalate the question session 'cause they're asking questions, "What are you doing here? What are you doing there? Why are you doing this?" Obviously, the place is getting cut, so they have valid objections. It's not like they're just being hard to deal with. Then I made...

Speaker Change: As you might gather I am a movie buff.

Speaker Change: And this is the scene 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: D escalate the questions session, because they're asking questions. What are you doing here what are you doing there why you're doing this.

Speaker Change: Obviously, the place getting cut so they have valid objections, and it's not like there they're just being on one.

Speaker Change: Hard to deal with.

Speaker Change: So then I then I made so this last time.

T.J. Rodgers: This last time, I took this step one step farther, and I turned the question and answer into a game show. I started by showing this slide. That's me, you see, standing in front of the crowd. Then the game is a quiz game. Let's play Poke the Monster. I had a guy with a voice like a game show guy. "And now let's play Poke the Monster." Then I gave a score for it. If the monster frowns, growls, lunges, loses his neck bolts, or has his head explode, then you get a certain number of points. We had fun at that. I had two questions to start out.

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.

That's mediacy standing in front of the 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 Poker Monster and then I gave a score for it if the monster frowns growls lunches loses his neck Bolser has his head explode 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 who is at risk.

T.J. Rodgers: This may make your head explode, but then there was a question, and We're starting to be able to work together is my point. They have core values. I haven't talked about core values here. It's a big part of management. We have core values. I'm working on them myself. Every week, I work on them. They had core values, and one thing I really liked, I walk into a building in Orem, Utah, and on the wall, there's core values. I was gonna debunk them, and then I read them, and they were really good. I just read their own core values to them. Hard to gripe about changing your core values when you're espousing following your core values. Produce results that are worth more than they cost to deliver. That's called make a profit.

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 like a walk into a building and saw in Orem, Utah and on the wall. There is core values.

Speaker Change: 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 get the stuff on the roof and make it work keep.

T.J. Rodgers: Obsessively reduce cycle times in every area. That's to get the stuff on the roof and make it work. Keep the sales and the field experience simple, even if it means adding complexity elsewhere. The last one, stay lean. Eliminate unnecessary costs. With 10% of the unnecessary costs we had and eliminated, we've now got the seeds of two groups that will change our company. We pay them. This is a bonus. We actually paid them with 100-dollar bills. It was called ten Bens. We prepaid the taxes, so the ten Bens were yours. We actually went to the bank, got the money, and gave it out to the people. They walked out. I learned this. Intel Livermore did a weaker version of this 20 years ago. I did this at Cypress, pay in cash. There's something about cash.

Speaker Change: Keep the sales when they appealed experienced simple.

Speaker Change: Even if it means adding complexity elsewhere and last once daily and 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.

T.J. Rodgers: You know, you look at it, especially the new dollars that are high tech for copying reasons, and it has an impact on your head. You have 10 of those in your hand, and you go, "I did something last quarter. It's valuable." That is different. It turns out that's the lesson I learned from this guy. I knew him when he was alive. He was a professor at the Hoover Institution at Stanford University. He allowed me to call him to get advice, which I did. I've been in his house. I once asked him. I said, "Did you ever do You know, you to me are Adam Smith of my day. Did you ever do anything you weren't happy with?" He said, "Yes." Then he told me this story.

Speaker Change: You know you look at it.

Speaker Change: Especially the new dollars that are high tech for.

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, it's valuable and.

Speaker Change: And that is 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'd Mir Adam Smith of my day.

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.

T.J. Rodgers: You can find it. Actually, it's as well documented. Just before World War II, we realized we'd have to spend half the wealth of our country, half of our gross domestic product to fight that war. He was part of the team that figured out how to get Americans to pay because in those days, you didn't pay your taxes till March 15. March 15, you filled out the form and mailed the check. He knew that Americans would not write a check equal to half their yearly wage in order to even for a war, even if it was a just war. He invented withholding tax. 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: 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've filled out the form and mailed a check.

Speaker Change: Any new Americans would not write a check equal to half yearly wage.

Speaker Change: In order to even for 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.

T.J. Rodgers: In that way, you never had it. You looked at your payment from the company as a payment that you got after taxes. If you wanna make a bonus not matter, give it to them in their check, which is auto-deposited anyway. Have it be some line in the check bonus, and then don't make a 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, give them a handful of money and pay their taxes up front. That's yours. Again, Intel did that with one $100 bill in their Livermore plant. Anyway, that's the lesson I learned from this guy. That's it. That's our vision. We're now on par. Questions?

Speaker Change: And in that way and never had it you looked at your payment from the company as the 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 deposit it anyway <unk> be some line in the Czech bonus and then don't make big deal out of it if you want the the bonus to go directly into their head I did something good and I got paid for it give them a handful of money and pay their taxes upfront, that's yours and again Intel did that with $100 one.

Speaker Change: 100 dollar bill in their liver more plant sorry.

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.

Questions.

Speaker Change: Okay.

Operator: Thank you, TJ. A few instructions before we begin Q&A. For our audience watching via the webcast, there's an Ask a Question tab on the right side flyout of the screen to submit a written question. If you have dialed in and would like to ask a question, simply click the Raise Hand button located on the bottom of your screen and press star nine to raise hand and star nine to unmute. Once you've been called on, please don't forget to unmute yourself and begin your question. We'll now pause a moment to assemble the queue. Our first call this morning is from Derek Soderberg from Cantor Fitzgerald. Go ahead, Derek.

TJ Rodgers: Thank you T J a few instructions before we begin Q&A.

TJ Rodgers: Her audience watching via the webcast Theres, an ask a question tab on the right.

TJ Rodgers: Right side fly out of the screen to submit a written question.

TJ Rodgers: 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 sternite onion once you've been called on please don't forget on mute yourself and begin your question.

TJ Rodgers: We'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.

Derek Soderberg: Yeah. Hey, guys. Congrats on the financial results here. Just continuing on your vision, TJ. You've already gotten the business to strong margin profile. You lowered sales commission significantly. On the revenue side, how do you see the SunPower story playing out, over the next year or so just to really set up the business to become a billion-dollar annualized revenue company? Is that gonna be through acquisition, through partnerships, organically? Can you provide some color on that vision and reaching that billion-dollar annualized level?

Speaker Change: Yeah, Hey, guys. Congrats on the 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.

Speaker Change: You see the Sunpower story playing out.

Speaker Change: 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 or can you provide some color on that vision and reaching that billion dollars annualized level.

T.J. Rodgers: I'm glad you didn't ask me when are you gonna hit the $770 million you showed on the slide. Our target is $1 billion. That is the vision. It is obviously achievable. What that slide shows is whenever you're in a meeting, somebody says, "We can't do that. How can we do that?" It's obvious it can be done, and in a day when the solar market was 10 times smaller than it is, even more than 10 times smaller than it is today. It's obvious it can get done. First thing, you have to have is stability. Now we stabilized at $80 million a quarter. Okay, we have a direct sales force so we sell directly to our customers. We have people that knock on doors, and we have people in telephone banks.

Speaker Change: So I'm glad you didn't ask me when are you going to hit the $770 million you showed on the slide.

Speaker Change: Our target is $1 billion that is division. It is obviously achievable what that slide shows is when every year in our meeting somebody says we cant do that how can we do that is obvious 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.

Speaker Change: So it's obvious that can get done first thing you have to have stability now we stabilized at 80 million Bucks a quarter.

Speaker Change: Okay, we have a direct sales force.

Speaker Change: That debt so we sell directly to our customers we have people that knock on doors, and we have people at and telephone banks.

T.J. Rodgers: That effort can grow, and that's the $80 million per quarter growing at some reasonable rate. I won't even speculate what it is, but it's a number that would take a while to get to 100. 2, inorganic growth. Based on my career, I am a fan of inorganic growth. Those new companies, by the way, they come in, there's stuff they do better than you do. There's a mixture of managers. You have merit. Merit wins in terms of picking the management team of the combined company. I'm a big fan of that, and it's very positive, and we will do that. You got the caveat I said that the sticking factor in the solar industry is way lower than the sticking factor in the semiconductor industry. I have a plan for that.

Speaker Change: So that effort can grow and that's.

Speaker Change: 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 100.

Speaker Change: To inorganic growth.

Speaker Change:

Speaker Change: 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.

Speaker Change: There is a mixture of managers that you have merit, but merit wins in terms of taking the management team of the combined company.

Speaker Change: Some big fan of that it is very positive and we will do that but you got to caveat I said.

Speaker Change: 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.

T.J. Rodgers: I wanna tell shareholders who are on here. We have our company meeting coming up in May. That jump from $5.5 million, the last quarter of my old company, to $80 million came because we got SunPower. We added 1,000 SunPower people to 65 Complete Solar people. Those SunPower people got letters saying, "You're gonna get a stock option." Now, there's a one-year cliff of four-year vesting on that, so they're in their non-vesting period. I need approval in the shareholder meeting for that stock. I won't go into other details, but you guys need to give me the stock I need to grow the company, and that's part of it.

Speaker Change: Stock.

Speaker Change: So I Wanna tell shareholders are on 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.

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 your stock I need to grow the company and that's part of it.

T.J. Rodgers: They don't think about like Silicon Valley. I'm an owner of the company, I have a piece of the company. The stock's going to go up. My rent's gonna get paid by my salary, but my new house is gonna get bought by my stock. That mindset's gonna take a while. It's already started. I've had people tell me, "Yeah, keep your stock. Give me a raise." Multiple times. In the last company meeting, a guy raised his hand and 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 use, and it's the best one. You have an account in there. You have stock in your account." It'll be partly on stock.

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 race <unk>.

Speaker Change: Multiple times in the last company, meaning.

Speaker Change: The guide raise Susannah said so.

Speaker Change: 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 use is the best one you have an accounting error you have stock in your account.

So it'll be partly on stock the other thing is.

T.J. Rodgers: The other thing is, it'll be vesting of anything we pay. One is I'm unlikely to go to the company where the owner owns everything, and there are a lot of the small solar companies are that way. A couple entrepreneurs start a company, they own 99% of the stock. Everybody else works for salary, hence the give me money, not stock, mentality. The consideration we give in an acquisition will be partly cash and partly stock. The stock will pay off big for the guys that come, but there will also be cash. We're gonna revest that. The deal will be, no, you don't get $X at the signing. You get that over a one or two-year period.

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 with 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.

Speaker Change: 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 cash.

Speaker Change: And we're gonna Revest at.

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.

T.J. Rodgers: Using vesting of consideration for an acquisition plus significant stock options that they're not used to, that's my theory about how to get and hold people. Once you're on that roll, you know, you're profitable, people can see it, they can believe it. Once you're on that roll, that'll be a very powerful dynamic in a non-stock economy, which is the solar economy for us. That'll be a winner. That's how Silicon Valley. That's why we are who we are.

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 that torture on 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.

Derek Soderberg: Sorry.

Speaker Change: Got it.

Operator: Thank you. Go ahead, sorry.

Derek Soderberg: Can I get a follow-up? Just, TJ, wanted to quickly touch on the battery systems commentary. You mentioned the importance of that to the ROI, and that you're gonna create your own battery systems, not just sell somebody else's battery. Can you talk about that a bit? Are you gonna build the batteries? You've got experience with Enovix and SunPower. How should we think about that opportunity and batteries for the company?

Speaker Change: Can I get a follow up 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.

Speaker Change: Spirits with a notebook and sunpower.

Speaker Change: How should we think about that opportunity and batteries for the company.

T.J. Rodgers: Thank you for asking that question. I can visualize people pushing the sell button right now. TJ's going in the battery industry. No. Our batteries are made by Enphase, and it turns out, if you think about the philosophy of the Enphase battery, take a panel, put on an inverter. It's a box that looks like an old-fashioned VHS tape. DC comes in from the panel, let's say 10 amperes at 40 volts, 400 watts, goes into the inverter. The inverter has a completely digital system that converts it, the DC to AC. It's not a simple electrical engineering thing. The chip that controls that is 4 million gates with 2 high-performance computers on it. That talks to the grid.

Speaker Change: Thank you for asking that question.

Speaker Change: I I can visualize people pushing the sell button right now T. J is going in the battery industry No arb.

Speaker Change: Our batteries are made by Enphase and it turns out.

Speaker Change: If you think about the philosophy of the Enphase battery.

Speaker Change: Take a panel.

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 goes into the inverter converter has a completely digital system that conversant 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.

Speaker Change: Computers on it.

Speaker Change: And then that.

Speaker Change: Talks to the grid and.

T.J. Rodgers: After 8 revisions we're on, after the IQ8, everything the grid can do to screw you, and PG&E, Pacific Gas and Electric, specializes in finding new ways to screw up solar systems, is bulletproof. Okay, you take that box, and let's say that box right now can be 1kW, and then you put a battery on it, and the inverter looks out and says, I see 40 volts. I'll do what I always do. I'll turn it into power. I'll take all the learning I have turning it into power, and make it work right. Enphase batteries are batteries, lithium-ion batteries, driving through Enphase inverters and connecting to the grid, and that's the hard part. That's why Enphase inverters are double the price of the next one, 'cause they're really, truly systems.

Speaker Change: After nine revert eight revisions Ron after the IQ eight everything the grid can do to screw Ya and piccinini civic gasoline that 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 have journey and in power.

Speaker Change: And and make it work right.

Speaker Change: So the Enphase batteries are.

Speaker Change: Batteries lithium ion batteries.

Driving through N phase inverters and connecting to the grid and Thats 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.

T.J. Rodgers: Now you think about what does the system look like in the Enphase world, and that is you've got the same box, millions of them, they make 5 million a quarter, very low cost, talking to the grid, and then you hook stuff onto it. You hook a battery onto it, you hook solar panels onto it. What we're going to do is take that product, and we're gonna write software for the computer to make that product do special things. Enphase is already doing that. We'll feature a lot of their products. For example, Enphase now has a plug that charges your electric car and the box to charge it.

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 so.

Speaker Change: You Hook yoga battery onto it you hook solar panels onto 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, and base now is a plug.

Speaker Change: The charges your electric car in the box to charge it.

T.J. Rodgers: Okay, you now can go in your Enphase, you can get the Enphase app, and you can see what the output was from sunrise to the time you're looking at it for every panel, one by one on your house. That same application now, you can tell it more sophisticated things. I want you to charge my car. I want you to charge my car only with solar electrons. I don't wanna use grid current that would burn oil to charge my car. I wanna use only solar electrons. Then it'll do that. That's trivial. That's not a trivial problem, right? Cloud goes over the sun. It's a foggy day. Your car needs a certain amount of charging, and you have to have intelligence between the source of power and the use of power. That's what we're gonna build.

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 that time, you're 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 electrons I don't want to use grid current that would burn oil.

Speaker Change: To charge my car weighs only only solar electronics.

Speaker Change: And then it will do that and that's true that's not a trivial problem right son is cloud goes over the side DSO 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, who build at stuff would make it rugged bulletproof and cheap.

T.J. Rodgers: We're gonna use products from people who build that stuff and make it rugged, bulletproof, and cheap, and bring out products where our customers see an end product like that. We're not gonna make the components. You don't wanna make batteries. I'm in a battery company right here in Enovix. They make high-tech batteries. The batteries used in cars and homes are ten times cheaper than a high-tech battery. Don't wanna do that.

Speaker Change: And bring out products, where our customers see it and product like that we're.

Speaker Change: We're 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 and in <unk>, They make high tech batteries.

Speaker Change: Batteries used in cars and batten and homes are 10 times cheaper than a high tech battery.

Speaker Change: Don't want to do that.

Derek Soderberg: That's helpful. Thanks, guys.

Speaker Change: That's helpful. Thanks, guys.

Operator: Thank you, Derek. Our next question comes from the web. How realistic is further inorganic growth, and how is the current opportunity set for acquisitions of distressed assets of companies such as Sunnova?

Speaker Change: Thank you Derek.

Speaker Change: Our next question comes from <unk>.

Speaker Change: <unk>.

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.

T.J. Rodgers: Well, I don't know about Sunnova. That was a major crash. There's a huge amount of money in it, and they may or may not ever sell assets. If they do, I'll be there bidding if the assets are priced right. But I gave you a list of 70 companies, so the answer right now is, you know, you want some stock, a job, a good salary, and work in a company that's gonna grow; we can accommodate that. Right now, for those of us capable of growing, it's a great market.

Speaker Change: Well.

Speaker Change: I don't know about Sonoma.

Speaker Change: 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 absence of Christ Ray.

Speaker Change: But I gave you a list of 70 companies.

Speaker Change: So the answer right now.

Speaker Change: Yes.

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.

Speaker Change: Those of us capable of growing it's a great market.

Operator: On that note, you actually have a question from the web asking about employment opportunities. How open are you to accepting applications from former SunPower employees?

Speaker Change: On that note you actually have a question from the web asking that employment opportunities and how open are you to accepting applications from former Sunpower on place.

T.J. Rodgers: 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 a pretty sick management structure. Expensive, aloof, not detail-oriented. Having said that, the SunPower has got thousands of really good people in it, people you couldn't get anywhere else, people who came for the vision back when it was what it was. The answer is, if you know solar, if you're smart, and you wanna work hard and win, send a resume. T.J. Rodgers at TJR@TJRogers.com. Rodgers has got a D in it.

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.

Speaker Change: We have pretty strict management structure.

Speaker Change: Expansive aloof not detail oriented.

Speaker Change: He said that.

Sunpower is.

Speaker Change: Got thousands really good people and it people you couldn't 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.

TJ Rodgers: T J Rodgers at T T J R. A T J Rodgers Dot Com Rogers got Athena.

Speaker Change: Yeah.

Operator: Thank you. The next question is from Kashy Gazak, who asks if you have any comments on the TCL SunPower panels and potential panel partnerships.

Speaker Change: Thank you.

Speaker Change:

Speaker Change: The next question is from Kashi does lag.

Speaker Change: Who asks.

Speaker Change: If you have any comments on the Tcl sunpower panels and potential panel partnerships.

T.J. Rodgers: In the same way I talk about batteries, which the Chinese have driven to prices where even Chinese companies go out. You understand they've got companies going out of business too. 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, you know, California. On panels, it's the same thing. They've driven the price of panels. When I left SunPower, the price of panels was $2 a watt. It's now $0.31 a watt, and they'll deliver it to your door for you like milk. If you want to take the risk of buying the panels and importing them through, you know, our customs, which you'd really be dumb to do, their pricing's down, it's $0.10 a watt.

Speaker Change:

Speaker Change: In the same way I talk about batteries, which are Chinese have driven two prices were even Chinese companies got you 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 California.

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 a watt.

It's now 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 the panels and importing them through our our customs, which you'd really be them to do their pricings dominances dime what.

T.J. Rodgers: How do you make money on that? On batteries and panels, I don't want to compete. I wish the Chinese would drop the price way down, then all of the revenue would come from creating, with very cheap, high-quality products, systems that people can use to make it work right. 'Cause the same guys that run those factories aren't gonna answer their phone, come to your house, fix your problem, install it quickly. In this industry, the main event is 5,000 AHJs. The last J stands for jurisdiction. All those little building departments that annoy everybody, 5,000 of them, all with different rules, all knowing they're right, all being slow, all being out to lunch a lot of the time, and that is what we have to do.

Speaker Change: So how do you make money on that.

Speaker Change: So my.

Speaker Change: On batteries and panels.

Speaker Change: Don't want to compete I wish the Chinese would drop price weighed out then 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.

Speaker Change: Run those factories arent going to.

Speaker Change: Answer their phone 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 for jurisdiction although subtle.

Speaker Change: Building departments that annoy, everybody 5000, amo different rules, all knowing the right all being slow all being out to launch a lot of the time and that is what we have to do.

T.J. Rodgers: They're not gonna take that job away from us. If we do it efficiently, one, we will be a great service to our customers, and two, it can be very profitable. No, I'm not making panels. No, I'm not making batteries. Low-tech batteries. I'll make high-tech batteries here, you know, the way higher energy density.

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 sphere 10, the way higher energy density.

Operator: Thank you. Our next question surrounds tariffs and exposure to China. What impact might this have on SunPower's profitability and supply?

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Our next question surrounds tariffs and exposure to China, what impact might that have on sunpower is profitability and supply.

T.J. Rodgers: Well, what everybody's pointing out to our president, he's got a guy named Navarro telling him how we're gonna build back the industry and factories will spring up from the ground. The guy's hallucinating. What is a tariff? A tariff is simple, a tax. If they charge me double $0.60 a watt instead of $0.30 a watt, then our customers will start paying double. I'm not gonna pay the tariff and have my company go bankrupt. I'll pay the tariff as tax. We'll pass that tax on to my customers. I do care about it, and the fact there is a larger feedback loop that if solar becomes too expensive again, then the whole market will go down, and all the companies in the market will suffer. I'm hoping they will wake up by that time.

Speaker Change: Well.

What everybody's pointing onto our president he's got a guy named Navarro.

Speaker Change: Telling them, how we're going to build back the industry and factory so spring up from the ground the guys hallucinating.

Speaker Change: So.

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, <unk> and our customers will start paying double.

Speaker Change: I'm not going to pay the tariff and 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 that 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.

Operator: Thank you. The next question is leaning into forward guidance. Can you share any thoughts on revenue growth margins for the next couple of years, and the impact of a potential recession?

Speaker Change: Thank you.

Speaker Change: The next question is leaning in Q4 guidance.

Speaker Change: Can you share any thoughts on revenue growth margins for the next couple of years and the impact of a potential recession.

T.J. Rodgers: You guys just saw six months of work, right? It's like the job is kind of like being a goalie in hockey, right? I stand there and catch the pucks, you know, before they get in the net. Can I have a long-term forecast? I can, but it's based on positioning more so than actually looking at what you project the P&L to be. Right now, we have a very lean workforce, and it's gonna get leaner, and it's American, okay? One good thing about being an American, if you're selling to American houses, you got to be American. They're not gonna import that. When you have a company that's lean, and we now have a company that's lean, we've actually started, as you heard today, doing some hiring.

Speaker Change: You guys saw six months of work right.

Speaker Change: It's like the.

Speaker Change: The job is kind of like being a goalie in hockey right I stand there and catch the pucks 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 projected P&L to be <unk>.

Speaker Change: Right now we have a very lean workforce and it's going to get leaner and its America.

Speaker Change: Okay. So one good thing about being an American if you're selling to American houses you gotta be American and they're not getting port that so when you have a company that's lean and we now have a company to Celine.

Speaker Change: We've actually started as you heard today doing some some hiring.

T.J. Rodgers: You know you can survive in the market because just like my stock graph, your stock will be green and the companies that aren't lean will be red. So that's the main event, having a stable company. Will the market go up? The one statistic I like comes from the EIA. It's a government organization that tracks it. Right now, close as I can estimate, the number of houses that have solar on them divided by the number of houses that could have solar on them is 4%. We have a toe in the water. This industry we talk about being big is a toe in the water. What we've got to do is continue to hold costs, and now we need to supply what they need, and what they need is storage.

Speaker Change: You know you can survive in the market because.

Speaker Change: Just like my stock wrap your stock will be green and the <unk> and in the company's inherently will be red.

Speaker Change: So that that's the main event being having a stable company.

Speaker Change: Will the market go up.

Speaker Change: One statistic I like comes from the EIA the.

Speaker Change: Government work.

Speaker Change: Organization attracts it.

Speaker Change: And right now close.

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, we talk about being big as a toe in the water and what we've got to do is is <unk>.

Speaker Change: Continue to hold costs.

Speaker Change: Now, we need to supply what they need and what they need the storage they need stores more than any solar.

T.J. Rodgers: They need storage more than they need solar. You know, you make the cheapest electricity in the world from 9:00AM to 3:00PM. Okay, then what are you gonna do in the other hours in the day? That's where the problem is right now, hence storage division. By the way, when storage becomes spread around the country, that's a big deal. That gets rid of the utilities as having a giant power plant that took 10 years to build, and they go to the government and say, "I need more money 'cause of blah." All of a sudden, you're there with your own battery, and it's not that far to see when you flip the switch and say goodbye. Your solar system, and you make your house more efficient too.

Speaker Change: Now 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 spread around the country. That's a big deal that gets rid of the utilities is.

Speaker Change: Having a giant power plant 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.

T.J. Rodgers: You can't waste energy, but you can gather enough energy from your solar system and store it that it'll take care of your house. That vision is not that far away.

Speaker Change: But you can gather enough energy from your solar system and store it that it'll take care of your house that.

Speaker Change: That vision is not that far away.

Operator: Thank you. We only have a couple more. The next one is, how does stock price and valuation impact your willingness to use stock for acquisitions? What is your view on the current valuation relative to that?

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.

T.J. Rodgers: Right now, last time I checked, our stock was $2. We have 80 million shares, if you check the SEC website. We're $160 million. First is if you're worth $160 million and you want to buy something that's worth $160 million, their proposition is give me half your stock. You have to say, look, our stock's not going to be at $2 for the same reason people invest in it going forward, you need to do that, too. Alternatively, okay, you've got your stock. Oh, you don't have stock. Oh, you've got your stock and your stock is down. Okay, so what you're doing is swapping your stock for our stock, and you're betting which one's going to go up faster. There are arguments today.

Speaker Change:

Speaker Change: Right now last time I checked your stock was two Bucks, we have 80 million shares would be check the FCC website, so were $160 million. So.

Speaker Change: First is if you're worth $160 million and that you want to buy some this where the $160 million. There propositions give me half your stock and then you have to say look our stock's not going to be at $2 for the same reason people invest in it going forward you need to do that too.

Speaker Change: Trinity will be 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 swapping your stock for our stock and you're betting which one is going to go up faster. So there are arguments today, obviously, what I love is to start to be 20.

T.J. Rodgers: Obviously, what I'd love is the stock to be $20, and then you've got all the currency you want. What I've discovered in the solar industry, I call it money poisoning, that we had in the other industries. At Cypress Semiconductor, I always had, you know, $500 million in the bank. I never thought about cash, ever. I thought about beating the bad guys. Right now, for the first time in my life, I'm living in a cash flow dominated world. I'll tell you, we run a tighter, leaner company because of that. It's a dangerous world, but it's an exhilarating world. The market is infinitely large, and if they don't help us to death in Washington, we'll be fine.

Speaker Change: And then when 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 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: Because of that so.

Speaker Change: Isn't it is a dangerous world, but it's an exhilarating world.

Speaker Change: The market is infinitely large in it.

Speaker Change: They don't help us to death in Washington will be fine.

Speaker Change: Yeah.

Operator: Thank you. With plans to expand capacity, how are you ensuring workforce training aligns with quality benchmarks?

Speaker Change: Thank you.

Speaker Change: <unk>.

Speaker Change: With plans to expand capacity, how are you ensuring workforce training aligns with quality benchmarks.

T.J. Rodgers: Workforce training is a big deal. We're not that good at it, but everything I showed you today, I showed you a couple management systems, has a spec, quality process associated with the spec, and training. You can go in a room, somebody who knows tell you how it works. My 19-year-old, you know, HR guy can run as good as reports ever got at Cypress in a much bigger division. Yeah, we're doing it. No, we're 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 this excellent quality guy, Surinder Bedi, and he is working on the quality of execution right now. Our products are pretty reliable.

Speaker Change: Workforce training is a big deal.

Speaker Change:

Speaker Change: We're not that good at it but everything I showed yesterday I showed you a couple of management systems has as a spec.

Speaker Change: He is 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.

Speaker Change: So in my mind.

Speaker Change: My 19 year old you know my 19 year old HR Guy.

Speaker Change: Can run a preferred as good as reports ever got it the Cyprus and much bigger divisions. So yeah.

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.

Speaker Change: He is working on the quality of execution right now our products are pretty reliable. We don't have you saw.

T.J. Rodgers: You saw 9 going to 2, so the disasters with your stuff not working are gone. For us, quality means quality of execution. Do you have a spec? Do you do it right? Do you do it right the first time? What's your yield? In our case, quality is almost synonymous with operational excellence.

Speaker Change: Nine going to so the disasters with your stuff not working are gone so for us quality means quality of execution do you 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.

Operator: 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: Thank you that is all the questions we have in the queue today.

TJ Rodgers: I'll turn it back to T J Rodgers for any closing remarks.

T.J. Rodgers: Well, I talked long as usual, but I thought this was cool stuff. I appreciate your coming in and listening to us. Thank you.

TJ Rodgers: Well I talked long as usual, but I thought this was cool stuff I appreciate your coming in and listening to us. Thank you.

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