Q1 2025 SUNation Energy Inc Earnings Call
Good day and thank you for standing by my name is <unk> and I will be your conference operator today at this time I would like to welcome everyone to the Sun Nation Energy first quarter 'twenty 25 financial results Conference call. All lines have been please on mute to prevent any.
Background noise. After just speakers remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star one again, thank you.
I'd now like to turn the call over to Devin Sullivan of the equity group. Please go ahead.
Devin Sullivan: Thank you Archie and good morning, everyone and thank you for joining us today for Sun nation's first quarter 2025 financial results Conference call.
Scott Masking: Speakers for today are Scott masking, Chief Executive Officer, and James Brennan, The company's Chief Financial Officer, Mr. I'm, asking will open with prepared remarks, followed by a question and answer session.
Scott Masking: Before we get started I'd like to remind everyone that prospects at Sun Nation Energy, Inc. Are subject to uncertainties and risks statements and remarks on today's call contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 section 27, a of the Securities Act of 1933 and section 21 E of the Securities Act of 19.
Scott Masking: 34 <unk>.
Scott Masking: Should not place undue reliance on forward looking statements as they are based upon our current expectations forecasts and assumptions.
Scott Masking: The company intends that such forward looking statements be subject to the safe Harbor provided by the foregoing sections. These forward looking statements are based largely on the expectations or forecasts of future events, which can be affected by inaccurate assumptions and are subject to various business risks and known and unknown uncertainties, a number of which are beyond control of management. Therefore actual results.
Scott Masking: <unk> could differ materially from the forward looking statements.
Scott Masking: Contained in this call the company cannot predict a determined after the fact, what factors would cause actual results to differ materially from those indicated by the forward looking statements or other statements participants should consider statements that include words, such as believes expects anticipates intends estimates plans projects should or other expenses.
Scott Masking: <unk> that are predictions of or indicate future events or trends to be uncertain and forward looking we caution investors not to place undue reliance upon any such forward looking statements.
Scott Masking: This call will also contain certain non-GAAP financial measures, including adjusted EBITDA, which we believe is a useful supplement supplemental measure that assist us in evaluating our ability to generate earnings provide consistency and comparability with our past performance and facilitate period to period comparisons of our core operating results.
Scott Masking: A reconciliation of non-GAAP measures to the most comparable GAAP measures where possible and definitions of those indicators are included in our financial results release. Please note that our definition of these measures may differ from similarly, titled metrics presented by other companies.
Scott Masking: Nobody does forward looking statements speak only as of the date in which they are made and the company does not undertake to publicly update or revise forward looking statements, whether because of new information future events or otherwise additional information regarding risks and other factors that could materially affect the company and its operations are contained in the company's filings with the SEC.
Scott Masking: Its most recent Form 10-K Form 10-K filed with the SEC.
Scott Masking: On April 15th 2025, and its Form 10-Q, which was filed with the SEC on May 15th 2025 copies of each document can be found on the Sec's website www dot FCC dot Gov.
Scott Masking: With that said I'd now like to turn the call over to Scott Natkin, Chief Executive Officer of Sunday shouldn't Energy Scott. Please go ahead.
Scott Natkin: Thank you Devin and good morning, everybody and happy Friday I want to thank you for joining today. Please stick around for after Jim speaks to my closing comments.
Scott Masking: Right around the time that we take questions as well it's been about a month since our last public conference call. Although I've heard from many of you since then.
Speaker Change: I had to characterize our results for the first quarter. The word I would use is in progress many of the options. Many of the actions that we've taken over the last several quarters are beginning to have a meaningful impact on our results. We told you what we're going to do and we're doing it that is the ethos of this company and <unk>.
Speaker Change: It extends across the organization from employees to customers vendors and of course, our shareholders. When the times are good challenge or somewhere in between we always strive to do the right thing and be transparent while doing so no matter how difficult the circumstances during the first quarter, we lowered our operating costs.
Speaker Change: The inefficiencies and increased our cash position, we repaid nearly $10 million in high cost debt and continued to meet our other debt obligations. During the second quarter. We grew our cash position from year end in short our financial position has improved.
Speaker Change: There's still a lot of work to do but we're miles ahead of where we were just a few short months ago. Once again I have to give credit to my incredible colleagues installation energy and our extended family of advisors. They have done an incredible job addressing a very difficult situation and I think the mall, including our board of directors, let's talk a little bit.
Speaker Change: About the business Our foundation, New York business, which serves the long island and the surrounding region. We have maintained our position as one of the leading install as solar energy and battery attachment. After a seasonally slow Q1 for our residential business, which was exasperated by terrible weather in February we had.
Speaker Change: A strong April which we believe bodes well for the balance of 2025, we are seeing marked improvement in sales that is that is we spend we have a lot of pent up demand from residential consumers for solar which has resulted in a stronger than usual spring time Bush with both contract and install activity.
Speaker Change: [noise] rivaling the growth we saw during the post inflation reduction.
Speaker Change: Period before interest in finding a financing rates to go up.
Speaker Change: Even with the recent uncertainty within global financial markets due to potential changes in federal tariff policies. We expect Q2 to remain strong as homeowners look to capitalize on locking in pre tariff pricing now.
Speaker Change: And now with Congress debating the future solar incentives. This adds yet another way of urgency for the customers to move forward with their projects based on 20 years of experience of dealing with uncertainty incentive picture remember up until 2022, each year. The federal incentives would wind down gradually we fully expect that this debate over there.
Speaker Change: Future tax incentives for solar will lead to push for homeowners to install before end of year. So they can receive the maximum incentive from the federal government.
Speaker Change: Our residential business in Hawaii, a more mature market is expected to rebound from a sluggish 2024 due to solar and battery incentives that took effect in may 2025. Thanks to the recent actions taken by the state of Hawaii Public Utilities Commission electric rates on long island are among the highest in the nation.
Speaker Change: Our system to save consumers more than $70 million money that goes back into their pockets and into their communities on the commercial side, we entered the second quarter with a commercial backlog that ranks among the strongest in the company's history. Thanks to a variety of projects currently in various stages of development with our institutional.
Speaker Change: Partners, We've recently announced separately LOI for a deployment of over two and a 2.25 megawatts of solar power at two school districts on long Island collectively. These installations are designed to deliver three megawatt hours of clean solar energy across 10 buildings that would offset a substantial majority of each district energy.
Speaker Change: She needs were.
Speaker Change: We are exploring opportunities to expand our service and maintenance business in New York Metro region to support thousands of homeowners, who assistance have been orphaned by solar providers that are no longer in business. This presents a meaningful opportunity to broaden our customer base support our continuing use of solar and potentially benefit from Mr.
Speaker Change: Eric Lee High margin service revenues.
Speaker Change: Building these types of relationships drives referrals and lowest customer acquisition costs I'm, hoping some of you were going to ask me the questions in my feelings about solar and Sunpower.
Speaker Change: With the help of our remarkable team we are building, an incredibly resilient and efficient organization that can respond to whatever the market throws our way we are focused simplified and stabilized foundation energy to the point, where we can truly begin to focus on what lies ahead instead of devoting so much of our time and resources on fixing the issues that were <unk>.
Speaker Change: And our labs, we are focused on the customer and delivering to the highest quality products.
Speaker Change: Tangible services any promise to stand behind our work no excuses with a strength in capital base, a streamlined capital structure and his vision for our future. We are ready to grow in a thoughtful and impactful manner. We see the light at the end of the tunnel and it's not an oncoming train it is appropriately enough daylight.
Speaker Change: Thank you for your time today.
Speaker Change: And I'll turn things over to our CFO, Jim Brendan to discuss our further results Jim.
Jim Brendan: Thank you Scott and good morning, everyone. We are also joined today by Kristin Laska Foundation, Energy's, Chief Accounting Officer and Treasurer.
Speaker Change: We issued a press release after the close yesterday and also filed a 10-Q with the SEC.
Speaker Change: For the quarter consolidated revenue declined 4% to $12 6 million from $13 2 million compared to last year's first.
Speaker Change: Commercial revenue rose, 28% from last year's first quarter, which offset declines in residential revenue in turtle certain total service revenue.
Speaker Change: On a consolidated basis, while overall kilowatts installed on residential projects increased 7% in the first quarter of 2025, we did see a 13% decline in per watt.
Speaker Change: <unk> pricing due to lower battery kilowatts installed in our Hec segment with the May 2025 commencement as Scott just shared of the New Battery program, Hawaii, We hope to see a rebound at Hec as the year progresses.
Speaker Change: On the commercial side, we ended the first quarter with the commercial backlog of $7 4 million, which is a 32% increase over March 31 2024.
Speaker Change: Consolidated gross margin for the quarter declined slightly from 35, 1% to 36, 4%.
Speaker Change: <unk> gross margin remained flat so nation, New York gross margin decreased 38, 5% from 45% due to the higher costs in our commercial segment, which was a result of higher unanticipated project cost at a large project during that quarter.
Speaker Change: A series of cost optimizations, as Scott mentioned and efficiency measures, we implemented in 2024, which helped drive savings for us in the first quarter reflected by reflected by the 9% decline in SG&A expense from 6 million $2 6 million from $6 six.
Speaker Change: <unk> million dollars in the prior year, we continue to believe that these measures will produce annual SG&A expense cost savings in 2025 of approximately $2 million.
Speaker Change: Total operating expenses also declined by nearly 6% to $6 6 million from 7.1 million.
Speaker Change: We lowered our first quarter interest expense by $200000 and expect annual interest expense to decline by one 4 million for 2025, which is due to the recent elimination of nearly 12, 5%.
Speaker Change: $12 5 million inexpensive debt.
Speaker Change: Net loss was $3 5 million compared to net income and one of $1 2 million from last year's first quarter for context net income from last year benefited from a $3 $7 million gain associated with the fair value remeasurement of warrant liabilities versus <unk>.
Speaker Change: No such benefit in this year's first quarter.
Speaker Change: Therefore, our adjusted EBITDA was flat year over year.
Moving to the balance sheet I am very pleased with the progress that we've made on several key metrics cash and cash equivalents rose $1 4 million from $800000 on December 31, 2024 with restricted cash unchanged at $300000.
Speaker Change: Cash on $3 31, 25 did not include the $5 million gross proceeds raised as part of the offering that closed in early 2025.
Total debt, which includes earn out consideration of $2 1 million declined 51%, a whopping, 51% due to $9 3 million of total debt.
Speaker Change: Of $19 1 million on December 31.
Speaker Change: 2024, we made additional debt payments of more than $2 million during April and as a result, the total debt on June 32025 is expected to decline an additional $1 million to $2 million.
Speaker Change: From March 31 2025.
Speaker Change: Other areas of improvement include accounts payable decreased $1 5 million from December 31, 2024 current liabilities decreased $6 9 million from December 31, 2024 long term liabilities decreased $700000 from.
December 31, 2024, and stockholders equity increased by $6 3 million from December 31, 2024.
Speaker Change: We recently restructured the $5 $5 million of long term debt and entered into.
Speaker Change: As yet utilized $1.1 million line of credit as a bridge establish thing until we establish a more formal commercial banking relationship as you may recall from prior announcements that $1 million line of credit was provided by Scott <unk>, our CEO, which should reinforce.
Speaker Change: Our confidence in the business.
Speaker Change: In summary, we have eliminated $12 6 million of secured debt and other long term contractual obligations, removing an average annual recurring cash drain of approximately $3 4 million through 2027.
Speaker Change: Echo Scott's comments that we still have a lot of work to do however, our debt payments and liquidity initiatives liquidity initiatives have removed a significant impediment to our ability to grow organically better serve our customers better be better partners to our vendors and consider strategic.
Speaker Change: Acquisition opportunities.
Speaker Change: We now have the confidence to provide guidance for 2025 for 2025, we expect total sales of $65 million to $70 million a projected increase between 14 and 23% from total sales of $56 9 million in 2024 also.
Speaker Change: Adjusted EBITDA of $500000 to $700000 compared to an adjusted EBITDA loss in 2024.
Speaker Change: We look forward to keeping you apprised of our progress I want to thank you for your time, and we'll turn things back to Scott. Thank you everybody and thank you Jim and team what I'd also like to add is.
Speaker Change: Instead of remark that I put together myself.
Speaker Change: First of all thanks for sticking around and then we'll open it up for questions.
Speaker Change: We build our relationships around transparency and in that spirit I want to take a few minutes to clarify some today's information and share my thoughts on the current ITC situation. It is important for our shareholders employees and stakeholders to understand the difference between what we can control and what we cannot control, let me say that again <unk>.
Speaker Change: Theres, a simply out of our control, but we work hard every day and the actions of others impact US today, we also shared guidance and where we believe 2025 of land that's transparency and accountability to things I believe are in short supply. These days I'm sure much of what I will say, we'll end up on the message boards or game on.
Speaker Change: I have tough skin and a refused to change how I lead.
Speaker Change: Let's take a look back quickly Jim and I assumed leadership. What was then pineapple energy really on May six 2024, and just last week, we marked our one year anniversary of rebuilding the company. When we took over was the ship headed straight for bankruptcy defaults on obligations.
Speaker Change: Crescive capital structure unsustainable debt and operating expenses had a guided the business units the industry as a whole was in free fall in 2025, it might in 2024, sorry in my 22 years and solar not even COVID-19 compared to the storm, we just endured and the industry results being 25% to 40% off.
Speaker Change: Down if you even survive 2024, regrettably it said mature, but we not only had to fight through our own problems, but we had a fire at an industry that was just in chaos. So it's also critical to understand that shareholder equity is inextricably linked to the success of our business units our employees and our clients.
Speaker Change: One can ask one cannot succeed without the others and while we have no control over how our stock has traded we believe that a few solid quarters will begin to restore confidence and that's our plan. That's our focus from day, one Jim and I guided.
Speaker Change: Guided by our newly formed board set a deliberate calculated course to save this company preserve jobs and rebuild shareholder equity, let's not forget Jim and I were the first and biggest financial losers. In this we saw a $4 five ish million dollars of our own equity wise that our theory as we bleed first.
Speaker Change: That's how we roll every step we've taken has been intentional compliant and necessary to avoid bankruptcy.
Speaker Change: And to fight another day, we worked together alongside with NASDAQ, Our auditors banker's legal and accounting teams and every shareholder vote. We brought forward is passed by overwhelming margins. One year. Later, we are still standing the ship had some density scratches for sure, but it's mechanically sound and heading into calmer waters.
Speaker Change: The iceberg is behind us as far as I'm concerned I have also personally provided the business with a bridge loan and establish a line of credit to support operations. If needed you will not find the CEO more invested financially and emotionally.
Speaker Change: I'm not looking for I'm not looking for metals I'm, just asking for a fair shot at winning and as I see it we have three active tax path forward.
Speaker Change: As additional capital to roll up great companies. These are bringing new companies, new revenue and accretive EBITDA simply stated our industry actually needs. This consolidation and we are ships that they are flocking tail.
Speaker Change: Number two is pursue strategic mergers with accretive small cap public companies. These are create immediate savings and grow opportunities. These moves may not require us to do certain things, but it's an absolute necessity that we start to look towards a more verticals and income.
Speaker Change: <unk> that can work together and cost save cost number three which is also super exciting is mergers.
Speaker Change: Through <unk>.
Speaker Change: Emerges to other companies there is no shortage since we cleaned up our own company of other companies that want to come into US I also want to briefly address the federal administration stance on the investment tax credit and stored solar storage policy, yes.
Speaker Change: Yes changes likely that's exactly why I've emphasized diversification in every single call for the last year residential commercial service in roofing, we are strategically prepared to adapt if the ITC landscape shifts with to know, but now following sunpower into bankruptcy.
Speaker Change: We see an opportunity to serve a wave of our consistent our commercial pipeline as I said is strong and our national developers has told us they are not changing course, depending on where the residential ITC land. We can pivot quickly dominating and third party owned markets or continuing to lead in the loan based systems.
Speaker Change: Either way our clients Trust Us and trust is something our competition lax if theres one thing Ive heard the 22 years in the solar coaster its confidence I receive it from my peer set from my team and I hope with today's recap of progress and transparency I've earned yours, the shareholders are fired up and more determined than.
Speaker Change: To deliver and as always I do my best to answer every email I truly do care with that said I'd like to open the.
Speaker Change: The lineup for cost.
Speaker Change: Q at this time I would like to remind everyone.
Speaker Change: Ask your question.
Speaker Change: Press Star then the number one on your telephone keypad, we will pause for just a moment to compile the Q&A roster.
Speaker Change: Your first question comes from Justin Clare of Roth Capital Partners. Please go ahead.
Hey, Scott.
Justin Clare: Thanks for good morning.
Speaker Change: The questions here.
Speaker Change: Wanted to start out on that.
Speaker Change: Guidance here, so you're expecting positive EBITDA in 2025, and just wondering if you could talk through how you expect.
Speaker Change: That EBITDA to trend in the in the quarters ahead for the remainder of the year of the year do you anticipate.
Speaker Change: Essentially being able to achieve positive EBITDA in Q2.
Speaker Change: As a result of the stronger seasonality.
Speaker Change: Great to just hear a little bit more detail on that.
Speaker Change: So Justin I'm happy to give you some color on that however, what we're not doing today is given quarterly guidance.
Honestly there is so much turmoil in the entire industry in the U S economy, right now with everything going on in Washington that would be kind of suicide for any company, but I will to answer your question because we are pretty damn transparent Q1 in our business is typically lower than the other quarters.
Speaker Change: Here in New York, which is where we are today.
Speaker Change: That business deals with weather issues and things like that that happen throughout the northeast in January February March in Hawaii, which does not have big storms and things like that that we have to deal with in Q1, but they do have a huge surge that happens at the end of Q4.
Speaker Change: So much so that taken a day off is off the menu and many of those.
Speaker Change: In those offices and so what happens is at the end of Q4, they've plowed through as much.
Speaker Change: Business, and then Q1 becomes a slower event and its year over year that that business has been in business for 17 years here in New York they've been in business for 22 years.
Speaker Change: Don't like that we have that that seasonal or cyclical layer to our business, but it exists every damn year and so that's what I'll say to you in answer to your question is that Q1 is lower and then it ramps up Q2, three and four I will add one thing just in Hawaii with.
Speaker Change: Tim was referring to as the storms like snow storms and stuff year. They do have their fair share right now.
Speaker Change: It inhibits them.
Speaker Change: But that's where we that's how we feel and we've seen this with data.
Speaker Change: We're pretty sophisticated here as well on our data and these carriages continually much as we'd love to change in level is the year.
Speaker Change: We've been on page two for 22 years.
Speaker Change: Yes.
Speaker Change: Got it okay. Thanks for that.
Speaker Change: The color.
Speaker Change: That's helpful. And then just on your operating costs you lowered costs in Q1, just wondering how youre thinking about where you are today are there further opportunities to take cost out or are you more comfortable with where things stand.
Speaker Change: Any more color on that.
Speaker Change: Yeah, we have some strategic initiatives in house in both business units.
Speaker Change: On ways that we can stream streamline some costs. We also as you know Scott just mentioned, but as you know the mission of our businesses to roll up reasonably strong.
Speaker Change: Companies like foundation or like Hec in Hawaii.
Speaker Change: And every time, we do that it's an it's an opportunity to squeeze out some costs that both companies are currently paying or all three companies at that point or are currently playing so our model includes doing some acquisitions this year I'm not committing to any of them today, but.
Speaker Change: But we certainly have many on our on our target list.
Speaker Change: And so once we bring in the next in the next in the next we certainly will be shaving a lot more cost hey, Jonathan I just wanted to add also that we talked about <unk>.
Speaker Change: Quarter over quarter.
Speaker Change: We actually take that into consideration when we look at our target acquisitions as well like <unk>, who can really execute.
Speaker Change: Q4, Q1 collateralized some of the other areas it could be for Q1, that's exactly right, who would've thunk it that northeast company in Hawaii Company was to have the same cyclical cycle of Q1 being lower than the other quarters, but you know.
Speaker Change: Here we are.
Speaker Change: And we are pricing.
Speaker Change: We also just came off of 2024, where I mean, everything that we did with all the restructuring it was expensive we're not expecting to have those kinds of things happen again.
Speaker Change: Alright, which are all part of the adjustments.
Speaker Change: Im sorry, just I didn't hear your last comment.
Speaker Change: Yes.
Speaker Change: Well I would just say on the on the.
Seasonal affective, Hawaii and in the <unk>.
Speaker Change: North East you wouldn't necessarily expect them to be the same but it sounds like they are.
Speaker Change: I did want to follow up on it.
Speaker Change: Just the strategy that you have in terms of acquisitions are there particular characteristics that you're looking for.
Speaker Change: In an acquisition or are there particular markets that you're looking to expand in.
Speaker Change: That you think are.
Speaker Change: Attractive opportunities.
Speaker Change: Yes, I appreciate that.
Speaker Change: So.
Speaker Change: What I can say is after 22 years kind of when you start to look under the Hood.
Speaker Change: It's pretty evident really well run companies come up to the top the cream always ramp rises to the top I think that on the residential side or the businesses in general.
Speaker Change: I preached it for years that diversification between residential and commercial and everything that is the winning thing in level rises and grow the business.
Speaker Change: You look at companies like Sunrun encino than some of the big guys. When these are all residential companies and our <unk>.
Speaker Change: Through the half considering commercial for a while I don't think it really played out but it's not for me to say.
Speaker Change: There is vast differences in strategic companies, but the diversification level that out and what I will say is that one of the things when we look at companies to roll under the Hood and the opportunities believe me are out there.
Speaker Change: And valuations are really being pressured but what I will say is when I have some of my commercial developers that have worked for that we've established such strong loyalty relations because we actually deliver on time and on budget and they say to me Hey, Scott I've got 12 megawatts in I'll just throw a state, Massachusetts, it's not therefore will you.
Speaker Change: You can't build this project for me that is one of the things when we start to throw the dark that we say well not only can we execute on that we're bringing we're bringing revenue we're bringing work to this business.
Speaker Change: But again diversification between all of the disciplines.
Speaker Change: For a company that we're going to roll up is going to be critical.
Speaker Change: They don't have to be as a student Sunday Shean is.
Speaker Change: I can tell you that we've we've watched if you look at the breakdown of our business I would probably say that we've gone from what was an 80% residential 20% commercial.
Speaker Change: When the incentives rise on the commercial side like we saw resi can say, we're probably a 60 30 and then service went from 2% to 7% right. So these are the things that give us a lot of opportunity to grow.
Speaker Change: Justin I would add to that that we have a pretty defined acquisition target acquisition profile that we use to.
Speaker Change: Typically where you're looking for businesses that are north of $20 million in revenue and we purposely do that so that the business has some sort of workflow process flow, it's not a chuck in the truck kind of.
Speaker Change: Sorry for insulting the trucks out there, but it's not a chuck in the truck kind of operation.
Speaker Change: They've gone through some serious hurdles they've already have all the licenses and everything they need we like all of them to be EBIT positive.
Speaker Change: Right now, we're not looking for any rehab projects and although we have the skill set in house to fix those as we've proven over the last year of restructuring some nation energy that's.
Speaker Change: That's not what we're looking for right now so all projects will have to be accretive. We also like as Scott just mentioned when companies have multiple revenue streams because it happens.
Speaker Change: One point throughout the year residential could be slower commercial could be higher.
Speaker Change: Sure.
Speaker Change: Or vice versa, depending on the workflow of that business or the project flow of the big commercial projects, especially.
Speaker Change: We like when companies have put some attention and devotion into service work because we think that's a huge opportunity with the likes of Sunpower and Sonoma.
Speaker Change: Trending south and.
Speaker Change: And there's an opportunity there to pick up tens of thousands of service projects. We also look for companies that have great reviews, and the reason why we do that is because those that have great reviews, not made up BS reviews, but real ones.
Speaker Change: Those tend to have lowest cost of brand new lead acquisition. So the cost of bringing on new customers is a hell of a lot lower here than it is in some of our competitors locally because they don't pay attention to the customer experience and that is a primary focus on what we do here.
Speaker Change: As well as the team in Hawaii, and they are very very good at delivering high quality customer experiences to their customers and they get a ton of referrals from them. So those are the top four I would say items that I look at when.
Speaker Change: When we're analyzing a new target and here's what we won't do it is inconsistent for Sun nation to go and acquire company and Jam the way, we do things down their throat in their region right.
These are all people that are invested in our communities have large referral rates and things like that so the last thing in the world. We want to do is up and the company, we just want to add value.
Alright that answers that question.
Speaker Change: Yes, no that's really helpful. I appreciate that.
Speaker Change: Just one more I had here I wanted to touch on tariffs and tariffs have been lowered year to a large extent, but wondering.
Speaker Change: How that might be affecting your business and I think right now tariffs on batteries might be affecting things there more so than for solar. So just wondering what your exposure is and what youre seeing at this point.
Speaker Change: Yeah, we're pretty strategic about our commercial developers many of these guys supply their own equipment for us to build we're cool with that.
Speaker Change: We did see a little surge.
Speaker Change: Administration hit Canada, a lot of the racking that we get to some of the commercial project got flat and we have a pass through.
Speaker Change: That kind of thing we're not going to do is we're not going to.
Speaker Change: Try and put margin on top of these things I think it's short term.
Speaker Change: On the residential side I will just tell you quick store in one of the battery manufacturers that we use in Hawaii was like the Sky was falling.
Speaker Change: It's pretty obvious I'm talking about frankly, the ways with the battery manufacturers love the product love the CEO, that's what they use grades but.
Speaker Change: The tariff is just is the sky was falling it's going up 30%, we're not going to be able to solid yada yada and this is a market that has 80 or 90% reliant on storage right.
Speaker Change: Later, you know.
Speaker Change: It changed right. So I think that is and now frankly, there is going to absorb the minimal a few percent that is involved.
Speaker Change: I think that is consistent we have seen that the administration throw us be throws the <unk> all the way to one side to reasonably come back to center and get their way. So we're not exposed right now.
Speaker Change: Repaired for it.
Speaker Change: But.
Speaker Change: It's sort of a wait and see not a panic and like I said before we were prepared with industry was prepared to go from 30% to 25% to 22.
Speaker Change: So we're not.
Speaker Change: We are cautiously optimistic taking it a day at a time and watching watching the trends, but not it's not in panic mode at all.
Speaker Change: The percentage of references.
Speaker Change: Yes incentives references that Scott you shared a 30% to 25% to 22 is when Trump was in office the first time.
Speaker Change: Alright, <unk> Africa.
Speaker Change: Alright I appreciate the time thank you.
Speaker Change: Thanks Pat.
Speaker Change: Thanks for jumping on so early.
Speaker Change: Net no problem.
Speaker Change: Next question comes from the line of Nick Anthony of Sochi International. Please go ahead.
Nick Anthony: Hey, Scott how are you doing I appreciate it.
Speaker Change: But it would take all the questions I just have a question as far as Bitcoin I know you guys had made reference to that in the past I'm trying to see where you guys stand on that as of now.
Speaker Change: Yeah, So I'll take that one so we.
Speaker Change: We adopted a bitcoin treasury strategy a few months ago.
Speaker Change: And the definition of that in that announcement was.
Speaker Change: A certain percentage of our excess cash.
Speaker Change: Be put into bitcoin, we've actually set up the brokerage accounts accounts to do all that but right now the.
Speaker Change: We don't have what we would define as excess cash which is six months of forward cash flow needed to run the business.
Speaker Change: To do it today.
Speaker Change: As the year progresses, perhaps that stance will change because.
Speaker Change: And I'll share with you as well net debt.
Q1 is typically in our business because of the softness of Q1 that I just talked to Justin about.
Speaker Change: Q1 is a cash drain on the business and then Q2 three and four are we stockpile cash throughout the year much better cash throughout the year. So we typically end of the year in a cash positive basis.
Speaker Change: So perhaps at the end of the year I'll have what we would define as excess cash to put into bitcoin.
Speaker Change: Yeah, we like that strategy, thanks for bringing it up.
Speaker Change: Yes.
Speaker Change: Yeah I appreciate it thanks for answering that question.
Speaker Change: Again, if you would like to ask a question press star one on your telephone keypad.
Speaker Change: Next question comes from the line of Mike Lacey and individual Investor. Please go ahead.
Speaker Change: Yes. Good morning, Thanks for the color I just wanted to say.
Speaker Change: I really appreciate your comments.
Speaker Change: I gave me the color that I have been looking for a bunch of company.
Speaker Change: I might suggest that you.
Speaker Change: Put those comments in the in the writing into.
Speaker Change: I know you put something out of a couple of months ago.
Speaker Change: You know maybe put these comments salaries and executives letter.
Speaker Change: But I've been very impressed with the call today and I just.
Speaker Change: Really the only thing I want to say all my questions have been answered.
Matt: I appreciate that Matt.
Speaker Change: Again, we work hard everyday I have pretty fixed scan iPad I make myself available to every shareholder every employee.
Speaker Change: And I always say you may not like the answer, but you're going to get honesty and transparency.
Speaker Change: Im just looking at I am just looking to go to work every day and build this thing back up and it's important and I love. The positive. Thank you for the positive Mojo you've made by Friday My Fred. Thank you Mark that was very kind of.
Speaker Change: Yeah.
Speaker Change: That's all of the class and they have.
Speaker Change: And we appreciate your participation I will now turn the call over to Scott Matt.
Speaker Change: So Nathan energy. Please go ahead.
Speaker Change: Thank you everybody for the call forgive me some of your time on Friday.
Speaker Change: As I said, we're going to work hard everyday as we do we're very accessible very transparent I really really think that the last the work that we've done this year.
Speaker Change: Is mind blowing.
Speaker Change: I'm.
I'm looking forward I'm really energized because I think the market is right for us to really really explode I know people may think that these are the toughest time My father gave me some advice.
Speaker Change: When I was a kid that there are two types of people very simple warehouses on <unk>. There are people that stand on the sidewalk and talk and take pictures and there are people that run into the fire and help.
Speaker Change: That's the kind of people that we are so I hope I've heard your confidence and thank you for your time today.
Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].