Q2 2026 Sunpower Corp Earnings Call
Speaker #1: All lines have been placed on mute at this time. This call is being recorded, and a replay will be made available within the events section of the SunPower website.
Speaker #1: Please note that today's presentation may contain projections and other forward-looking statements. These statements are subject to known and unknown risks and uncertainties, and may cause actual results to differ from those expressed or implied in our statements.
Speaker #1: In addition, we may discuss certain non-GAAP and financial time via the submission box located on the right side of your screen. For those joining our live Q&A, please click the raise hand icon located at the bottom of your screen to enter the queue.
A reconciliation of any differences between those non-GAAP financial measures and the most directly comparable GAAP financial measures is available within our press release.
Lastly, we will hold a question and answer session after the end of formal remarks today.
Speaker #1: With that, I will turn the call over to TJ Rogers, SunPower's Chairman and CEO.
Speaker #2: Good morning. My name is SunPower. We're here to report the Q2. I have people who presented various parts of this meeting, so I will introduce them real time.
Speaker #2: Starting with Tom Kowalczyk, who's our new CFO. He's got a CPA and a Chicago MBA. He's had experience in public companies, and he's down here being Suntory.
Speaker #2: And he led a Tom?
And he led a finance group there with $2 billion in annual revenues. So he's got the experience in public and big companies.
Speaker #3: Hi, good morning. Thank you, TJ. I'm very excited to join SunPower at this opportunity to be a leader at the group. At this very important time, over the last few weeks, I have been focused on getting to know the business, our operations, our finance organization, as well as meeting the talented people across the company.
Uh, this is his first shot at being the CFO of a public company. He's going to present the financials today. Tom,
Speaker #3: While I'm still early in that process, I've been encouraged by what I've seen and the team's commitment to improving execution. And going forward, my priorities are pretty straightforward: maintaining strong financial discipline, improving the quality of our forecasting, and financial processes.
Speaker #3: As well as allocating capital thoughtfully and ensuring we provide investors with clear, timely and consistent financial information. I look forward to partnering with TJ and the rest of the leadership team as we execute our strategy, and work to create long-term value for shareholders.
Speaker #2: So I've asked Tom to—this is the report we issued this the financials with you. There's GAAP and non-GAAP. We focus on non-GAAP. That's how we reported all of our quarters so far, Tom.
Speaker #3: Yes. So our non-GAAP revenue is down from 73,000—or sorry, 73 million dollars—down to 56 million. Which had a direct impact on our gross margin and gross profit.
Speaker #3: Down from 46.9 to 27.6. That's a direct result of our fall-through on variable COGS and revenue. However, we did offset much through improved operating expenses, which is down about 19.7 million dollars.
Speaker #3: Of which 7.1, approximately, is fixed overheads that we cut out of the business during the quarter. And is expected to carry into the future.
Speaker #3: Our operating income is slightly improved, which is a combination of our fall-through because of the change in revenue, as well as the improvement and cost cutting that we did during the quarter.
Speaker #3: So net-net we're better than the previous quarter on operating income, non-GAAP, by about 400,000 dollars.
Speaker #2: So from my perspective, we need to explain a disaster revenue quarter. Today and that will be my job today. The good news is there is any is that we had a huge drop in revenue, but maintained—didn't change our profit—it went from bad to staying bad.
Speaker #2: And that was because we have done structural cost cutting of 31 minus 24, 7 million bucks. And I'll talk about that in future plans for structural cost cutting later as well.
Speaker #2: I took this shot at 7:17 this morning. My time. And the word is, you didn't like it. I don't like it either. It's not good performance.
Speaker #2: And if you look at the company, basically we're six quarters old, and we've been at a buck and a half, plus or minus a half a buck forever.
Speaker #2: In the last two quarters have been back bad, back to back. That, of course, is bad and bad, that we just talked about. And that's impacted our share price.
Speaker #2: So, I'm going to talk about why that happened and what we're going to do about it, in detail. Next is Dan McCraney; he's a board member.
Speaker #2: He's become active working in marketing and sales for us. He's a storage Silicon Valley figure. He's been on ten NASDAQ boards, and this includes the two halves of Motorola when they split apart.
Speaker #2: Important side of the companies. I knew him because he spent about a decade at Cypress. He's been a CEO, and his forte is marketing and sales.
Speaker #2: Dan.
Speaker #4: Thanks, TJ. Okay, what you're looking at here is total bookings for the corporations from Q4 2024 through our most recent quarter, Q2 2026, measured in terms of jobs.
Speaker #4: This is all SunPower, which includes our residential work, as well as our new home work, and our commercial work. So what you see there is an aggregate of all three of our business units going forward.
Speaker #4: As you can see from Q4 2025, Q1 2026, and Q2 2026, we've had a strong increase in bookings. This bookings increase has now continued for nine straight months.
Speaker #1: Okay. Hello, welcome everyone to SunPower Q2 earnings call. My name is Sioban Hickie, SunPower's VP of IR, and I would like to review a few housekeeping items before we begin.
Speaker #4: Generally, across the board, as a result of that, going forward into this quarter, you're seeing our projections for revenue, which are largely based on how much of the bookings we're able to get through to the factory, installed, and recognized as revenue.
Speaker #4: That's going to be the challenge. The primary challenge for Q3 is getting these bookings revenued through installation. One more point on that—you notice in Q1 2026, we were at 4,166 jobs.
Speaker #4: And in Q2 2026, that number dropped to 36.55—still the third highest in the six-quarter, seven-quarter period. But I wanted to point out that the transactional short-term bookings, which is the bookings for solar, actually increased in Q2.
Speaker #4: What dropped is our long-term new homes bookings, which we don't really see revenue for five to seven quarters. My point is that there's an opportunity for short-term gains; the sales force continues to book these short-term opportunities, residential, that allow us to have a good Q4.
Speaker #4: Finally, it takes us about eight weeks, approximately, to convert our jobs to revenue in residential. So, therefore, the sales force right now is predominantly working on the Q4 bookings to ensure we have a robust Q4.
Speaker #4: So that's where we stand: three strong quarterly bookings. If you talk about the transactional bookings of residential only, we've had three record bookings.
Speaker #2: Okay, so we're talking about a lot of bad news today, but I do want to point out that what we've been talking about is good times ahead of us because of bookings, and that's still true.
Speaker #2: So, I wanted to bring up that slide early—just the picture of headcount and the sales department.
Speaker #4: Yes. And this one is our total 1099 sales organization, broken out by SunPower; Sunder, the acquisition we did back in September 2025; Ambia, the acquisition we did in October 2025; and Pure Light, which is a small acquisition we did in Q1 of 2026.
Looking out by SunPower sonder, the acquisition. We did back in September 2025, and be in the acquisition. We did in October 2025, pure light, which is a small acquisition. We did in q1 to 2026, uh, we are holding our 1099 headcount, uh, reasonably at about 1,500. We've made Geographic changes in that head count. We are now moving into the higher opportunity, states such as the, especially for TPO. That would be, of course, Texas and California and places like Pennsylvania and Virginia. So we've redeployed our 1500 1099s to maximize bookings, uh, and that's what you see in right now. So, we're to A first order. We're about flat with our 1099s at a very robust 1500, but we've moved them around to areas where there's currently High opportunity for immediate bookings.
The, um, main point here is that old SunPower—by that I mean the SunPower that the one Banks,
Um, had a large sales force, but when they went bankrupt, that sales force started to trade.
And we worked very hard to maintain actually a higher, uh, bigger sales force of 1099.
Um, I thought I'd talk about myself today and show my picture. This is back when I was in high school and, and, uh,
I, I thought about it because I just saw a movie called Young Washington,
And it was a good movie, although the critics—because it was about an American hero—didn't like it. Um, and there's a classic line in it: in 1755, George Washington got his ass kicked in Ohio by the French and Indians in the French and Indian War.
And he was the head of the militia, the Virginia militia.
And he came back, uh, and talked about the problem he had. They burned his fort, they killed a lot of his people. He really lost.
And he signed a, he signed a peace treaty that was written in French. That was misled to. He was misled by what what it said and it had it was a bad contract. Let me, let me call it that. And when he was making an excuse to the governor of uh, of Virginia which was his boss,
Um, the guy was— as he was making excuses, the guy was waving his arms. Like, this guy's name was Den Woody. And he said the line of the movie I thought was great: "To lead is to forfeit the rights to make excuses." So that's where I am this morning. I can b**** about this or that— and this didn't happen and that didn't happen— and then, of course, the rebuttal will be: "Great, why did you not fire the guy before he screwed stuff up?" So I want to make it clear right now.
now, um,
I run the company. This is my problem.
I graduated. So, who am I? I graduated from Dartmouth in 1970. I was second in my class.
I was eight years on the Board of Trustees of Dartmouth. I went to Stanford. I got my PhD there.
I'm a Moore's Law guy, a silicon guy. I worked for two chip companies, American Microsystems, where I learned how to do engineering and R&D.
in Advanced Micro Devices, uh,
To run by the fabled Jerry Sanders, where I won't say that I learned about sales, uh, but I did come to appreciate the value of sales. Dan and I both worked at that company at one time.
Uh, I then, for my, in effect, whole career, founded a chip company, Cypress Semiconductor.
Uh we IPO 37 months from our funding including building and Fab. We went public at uh 770 million dollar valuation in the day dollars. In a 2020. We've sold uh, the come after I left and retired the company of sold for 10 billion dollars
After that, I worked on the Enphase turnaround. Enphase is worth $5 million today.
So, all my related [transactions] to SunPower—um, I've written checks, literally, for $111 million.
I hold outright 32.7 million shares, and I hold debt equivalent to another 26.5 million shares. So, uh, I'm looking at, like, 39% ownership if I converted my debt, which I don't want to, because it's income for me.
Uh, I have no shares that I've earned because of my position, getting paid. Um,
With stock and my salary is zero. So the point is making that number. Better is all I work for, if you think about economic motivation—obviously, I want this company to succeed.
Uh,
Code of tire over everything else. It's difficult to see through it to see the good time.
This is a graph from the Energy Information Agency of the United States. It shows, by area of the United States and in averages for the entire country, solar penetration rates—meaning,
Uh, in 2024.
Only 5.6% of the houses in the United States that were qualified—rich enough, right area, right zip code, good laws in the state—did. Meaning 95% of the homes did not have solar, even though they could have had solar.
Uh, this number's been updated, uh, recently. Uh, the 2026 update is 7%, up from 5.6. So there's 7, therefore, 93. And there's a forecast by the same outfit, EIA.
That it will be 30% in 2030. I think that's a little bit aggressive, but the point is even in 2030. 70% of the market will be unsatisfied and we'll, we'll be wanting solar and by 2030, that's 4 years, you take a 10%, raise per year, take 1.10 race, it to the fourth power. And you've got the cost of power of the people are going to have to pay going up by 50%. Meanwhile the cost to install solar is flat to down and has been uh if you look at a at a 4 year, Rolling average forever
What that means is solar energy.
Uh, is number one, in addition to...
Our portfolio of energy generation.
So here I show gigawatts.
Now, if you want to calibrate that, this is—I’ve added Solar Editions.
Uh, if you want to visualize a gigawatt, think about a new nuclear plant—think about that giant dome, and there's usually two of them. Each one is working to get you out. That's a cooling, uh, that's a cooling tower or a plant. So, 70 gigawatts is a lot of power—that was added on, 35 nuclear plants' equivalent.
Uh, you can see natural gas is fading.
I don't necessarily agree with that, but that's what's happened.
And wind and solar are growing. Solar, you can see here on the bottom, is growing the fastest.
And you really can count battery storage as part of the wind and solar phenomenon, because you have to store the energy when the wind is blowing or when the sun is out. So this is also renewable. So bottom line, we're having a renewable transition.
Like it or not, debate it, this is where the market is, and I...
Frankly, I think it's right. I think the fact that you can buy a solar panel for $100 and get 500 watts of power out of it, when the sun is shining, is a big deal. Uh, the thing that people have talked about and they don't realize is there's two kinds of payback—energy payback.
Which is seven years for buying and installing a solar system.
Um, and then there's this financial payback story, and then there's energy payback. And energy is: do you ever get the energy back you get from melting glass and purifying aluminum?
From the panel, and the answer is, the energy payback time is about a year. That is, the panel will produce more energy than it took to produce it. So, the fundamentals are all there, and they're all lined up.
Uh, this is from old analytics, uh, om.
It's sort of the, um, go-to data source. I'll just make two points here.
Uh, full photo will take pricing trends.
And, of course, they look at the pipeline, and you can see it's flat. So there is no big crash coming in solar pricing. The reason for it is the government subsidy is gone. I was happy about that.
Um, and as a matter of fact, there will be a short-term, slightly upward trend because of that.
Second one, and this is a bad one. This is RI monthly residential commits. So here, we have it by month, going up to May of this year.
Uh, this little peek back here is, uh, Safe Harbor. This is for everybody who's buying.
And installing, you know, one bolt in order to guarantee that they would get ITC credit.
And then, after they got done, then,
We went into the current new week delivery room with lower funding—30%, 30% gone.
So, the reality is, if you eyeball lists—25,000—installs has gone to, let's say, 15.
Half of our companies have gone out of business because there's a lower volume at the very same time. There's the lower volume.
And the tax credit is gone, so the double whammy is pretty much unemployment.
Okay, so we've responded to that with 13 million dollars in cost reductions. Uh after q1 26, the first of the back-to-back bad quarters. Uh we did a riff, we entered uh implemented a 4-day weekend Work Week. Reason for this is we knew we were coming up to needing those people therefore laying them off and bringing them back was not proper. So we did went to a 4 day a week to keep the people have the lease layoffs and we also did some structured cost cutting that was 7.1 million that I that Tom showed you on the first slide.
This quarter, and we're going to do another $5.9 million.
And it'll be focused mostly on management, where we have new homes and Cobalts, and we have two sets of managers, and we will rationalize that. And that now reports to John Berg, who's going to address you later.
So, uh, have we—are we?
Fought. And the answer is no, we're not. We never have been.
This is a graph of our headcount. Uh, when I took this thing over in Q4,
Um, I inherited 3,500 candidates to work there.
Uh, we said we need—we can only deal with a third of them.
And then we lowered this over time as we learned how to run with a leaner team. Right now, we're at 7—uh, we're targeting 700, we're at about 710. So, we have a lean company.
And if you went into our place, you would see people working their butts off.
Uh, last weekend.
The weekend before last, 64 people worked overtime.
So, and which is efficient for the corporation. Uh, it's good for them, especially in a four-day workweek.
Okay, so the cost reductions are $13 million. Describe the 2 components of that—last quarter and this quarter.
I'd now like to start talking about the—
The overriding thing for us is the technology.
And capability — let me call it architectural capability, engineering capability — that we have, which will drive us forward, along with better pricing. So, I'd like to introduce Surendra Bedi.
He is, um, nominally our EV of quality.
But we can't afford to have VPS, including me.
My wife and I typed the words in this report.
Um, we can't afford to have single-purpose, uh, expensive people.
So, in addition to working on quality, he looks at future engineering. He's an expert on panels, and I've asked him to describe...
Highly awarded work. And in Intel implied material, the Silicon Valley guy has his own patents. I've asked him to describe, um,
Our new panels and why? They're why they make a difference. Surrender, you're up.
Thank you, TJ. By the way, this is what we call the panel. Our trade name is Monolith.
This is a picture of a billboard on a major freeway in Salt Lake City when we announced that we had the monolith.
Thank you TJ. Uh, so
What? I'll be talking about.
The SunPower RC JDA technology partnership, which we have engaged in over the last few months.
And that has really provided us huge dividends in terms of developing, um, a high voltage.
Uh, heterojunction technology.
Product.
which is a 471-watt panel, and, uh,
Uh, it's got a unique technology in terms of, um, hybrid technology where we allow.
Uh, this is the silicon, the anti-silicon wafer, um, and it is being sandwiched between the amorphous silicon, uh...
And at the same time, it's got a very strong superior reservation. This technology allows us to be one of the best technologies in the market today.
Especially for the bifacial gains, and I'll talk about that in a minute as well.
And we have launched, uh, during Q1, uh, this particular product line. It is being commercialized right now for residential, for light commercial, for various applications today. And our intention is to expand this business, uh, throughout this year.
It's also got some very unique features. I want to take a minute to talk about that. The module efficiency is pretty good—22.6%—which allows us to have a huge power density advantage in terms of the watts per meter squared. It's also got the advantage of temperature coefficient.
It’s got the low-light and enhanced performance—both in the morning, evening, cloudy conditions, and so on—with low degradation, and huge warranty advantages as well.
So putting this together uh all the different technology advantages from a Nitro Junction technology. Um using the N type sell uh because the most powerful 470, watt panel today in the market and we are proud of that, uh, moving forward. We are already developing in parallel. Uh, we have done some engineering work. We have some engineering samples, um, built and that is we call it monolith 2 by facial, which is coming soon. Uh, here, the advantage we are bringing is that we are taking
Speaker #3: Reduced, but it has been doubled. We call it double glass, both on the front side and the rear side, and that allows us to have the power density advantage. You can see we have an objective to demonstrate the advantage in both the residential application as well as in the commercial side.
Speaker #3: By having a double glass product, you have a much more reliable product because you don't have a plastic layer behind, which we call the backside. Because you have double glass, it allows you to have a stronger structure to handle all the different environmental conditions, as well as improved fire resistance.
Advantage. Uh, you have basically a designed in, uh, a best-in-class product line with a high output over Lifetime, and that gives us a huge advantage in terms of cost per kilowatt hours transferring. The transforming The Innovation into customer value.
So, this is a quick snapshot of what we have developed so far. So now that you, physically, students in the audience, have gotten your notes, I'd like to, uh,
Just to make a couple of points—this has made a difference for us.
Um, all Chinese cells up to about a year ago were p-type. Holes moved three times slower than the electrons. This is a big deal. We've always been, since 1985 on, in n-type silicon, way ahead.
That gives the superior efficiency.
This temperature coefficient.
0.24% per degree Centigrade. So that's 24% per 100 degrees Centigrade. So if you're on a roof and you're cooking at 100 degrees Centigrade—
Your panels become 24% less efficient—that's bad. But it's half of what the PT-type cell has. That's why that's there.
The 50 pounds is there because OSHA won't let you use one person to install a panel unless you're under 50 pounds, and that's an ironclad rule. You don't screw around with OSHA.
Um, that glass is pretty thin already.
Um, this
There are layers, they're like 13 layers on the span. These guys already see, a really good and they're World Class 1 of the top 2 or 3 in the world and they're world class. Slash not Chinese, which is exactly, uh, what we need.
and,
They work on.
Solar. But you get kilowatt-hour quotes for free.
The next one is degradation—panels as they cook in the sun over the years degrade.
Um, these panels are exemplary. In 25 years, they still produce 92.5% of the energy they did when they were brand new, and that's almost double other kinds of panels. So, if you combine low light every day and a degradation curve that's almost not there—
You get high lifetime kilowatt-hours. And this is what, if you look at the economics of a panel, that's all you get. You get a kilowatt-hour for free from your panel, or from the depreciation of the cost you paid for the panel.
And you don't have to buy it from the utility currently in California. That's looking like 20 cents and it's going up at a rapid rate.
And right now, panels used to be flaky. They're now solid for 25 years, and even at 25 years, they're still almost brand new.
So that's this 1-by-facial. Think this panel, think the next generation of it.
Put glass on the front and back. You're not talking about glass that is the thickness of a match—a wooden match.
And it's got to work, and it's got to work for 30 years. And we've already got our first samples of this one, by the way. Bifacial technology is what the utilities use—they don't even use the standard residential technology. The problem is, if you take that thick glass and put it on a panel, you're looking at 70 or 80 pounds here.
So, these are panels that are
Put in place by robots in the field by utilities, and they're not really available to residential. So, the name of our game is: how many watts, and now we're going to be over 500, can you get from 50 pounds? That's really the game.
Okay.
Uh, next is John Berg, um John bought Cobalt Power Systems uh and and it's the CEO of it. He has worked for the Korean company. Q cells, which is probably the only other major manufacturer in non-chinese manufacturer that is in the same class as RC.
Um, and he sells systems. So, he talks about those little advantages that were on the last slide, that they're kind of hidden and amaze us—numbers.
Uh, so I've asked John to...
Talk about.
He has, he lives in Silicon Valley, he thinks Silicon Valley, we talk Silicon Valley—not, not sales and...
I got graphs that—that the first graph is not. How many doors did you knock on? We knock on 65,000 doors, uh, a week?
Um, so, uh, you got to talk about that to sell, but you got to talk about technology to sell and get a better ASP. So I—I'm going to let John talk about the technology of design and engineering he's brought to the company.
Thank you TJ. Um, what you're looking at here is the very first, monolith installation. So this is on the historic Pleasure Point uh plunge pool. That was a club in uh uh by uh uh Santa Cruz uh, right off the coast of Santa Cruz by, uh, Pleasure Point, um, the homeowner there. Uh, his name is Mike, uh, he actually had a previous solar panel system uh spec. And when the monolith came out I called him up and I said, hey Mike. Uh do you want to look at this new technology? It's called monolith. We can fit it on the best parts of your roof and maximize the kilowatts on your roof so that you have some space around it. Now it's a little bit more expensive
But you're going to get a more levelized cost of energy. The system's going to wake up earlier each morning, it's going to turn off later on and go to sleep later on each night, providing you more power every day. So even though it's a little bit more upfront cost, you're actually going to get more power over time, and that results in about a 7 or 8% increase in ROI.
Mike, uh, was like, "Well, what do they look like?" And I said, "Well, they look sleek. They're all black. Uh, there are no, uh, light contact points or anything like that. That's why they call it the monolith." And, uh, he said, "Sure." And so, we installed that and he's very happy. He sends me, um, photo, photo, uh, crops of his system production and it's, uh, meeting and exceeding, uh, what our forecasts were.
What you're looking at here is the, uh, Santa Clara project.
So, this is, uh, the, uh, the third project we've done for Santa Clara University.
And you're looking at about a 1.2-megawatt installation that generates over 2.1 million kilowatt-hours annually.
University is about $350,000. Uh, we did an integrated solar superstructure on the north parking garage.
And we did elevated carports here at Levy parking lot, and a rooftop array at the athletic Excellence center. It's these types of installations. And these high-quality premium, uh, modules that set some power apart and what we continue to look, uh, as a forward-looking, uh, commercial Outlook. Uh, what we're going to be deploying, um, to universities data centers, other things are cross the country as we start to expand our market share uh, comment on the structure of powerport. Uh, okay, down here, you've got people parking their cars. This is in a university.
Here, you've got a roof, which replaces a normal roof. It's not on the roof, like residential, where you put panels on a roof that already exists. You've got to make sure the roof is structural. You may have to do work, uh, to begin with before you put them on. In this case, the roof is panels. All you have is a framework below it, which is economical. And what happens is the rays come down, they hit the panel at 1,000 watts per square meter. Uh, 20% of that goes into the panels and turns into electricity and doesn't go down in China.
Asphalt, Pete, your car up to 120 degrees Fahrenheit and all that stuff. So this is an important use of solar in large quantities.
So what you're looking at here, uh, this is the, uh, Waterfront building in San Francisco. Um, you can see it's, uh, right there by the peers in downtown. Um, this project demonstrates, uh, not only do we use high efficiency modules. It's about a quarter megawatt, but we used about 554 high, efficiency solar, um, modules for this project, uh, 1 of the key, uh, engineering points is that this is a post-tension concrete roof construction. And so, uh, we had to use, uh, lidar wrapping and um, infrared, uh, readings to find the structural points for seismic, uh, installation. And what you're looking at here is a floating, uh, floating array. And, um, I I'll let TJ talked about this a little bit, but this is prebby facial monolith. So if you look at what we're able to do, when we get the monolith, 2, bifacial out. Um, we'll actually be able to Garner more wattage, uh, from the same rooftop.
Yeah, so these pads spread out the weight. The weight goes on a frame. This is not the standard way of doing it because this roof is not a new building and it's high-tech. And what that means is they stretch the rods.
In the and then they pour the concrete and let the concrete dry around the stretch Rod. So its tensile concrete much stronger, and then a different concrete. It's much stronger. So the this roof is way thinner ways way easier to support than a normal roof. But problem you've got is if you put too much pressure on a given area, you can punch through that roof. So this thing was built in order to float on these pads. Uh now
The takeaway here is now you can visualize what a bifacial panel does. If I have glass on the front side and glass on the back side, and this is already painted a pretty good reflective white, I'll get light to go through here. I may put more area between another stripe to let in sunlight through the rows. But typically, this will take a 470-watt panel.
And the back side will take it up over 500 watts. This is, uh, this is monolithic to what we're talking about.
Right. And, uh, what you're looking at here, this is 1 of uh, 26 of The Greener stores program. Uh, this is in, uh, conjunction with our partnership with SunPower, or excuse me with Starbucks.
And, uh, we recently completed, uh, the Millennium, uh, project as well. And these are, uh, essentially carport structures, and they're built, uh, in the Palm Desert of California. And you can see it gets a lot of, uh, energy and light from both the top and bottom.
This is the, uh, Millennium Solar project here.
And, uh, this is about 9,997 kilowatts, so just under a megawatt of power.
And we recently completed this, and it's a beautiful installation. Whereas before it was just an empty parking lot producing no power, now it produces power for the buildings around it and also provides shade for the cars underneath. So it's a really good synergy there.
And actually, uh, Surendra had, uh, spoken with, uh, and done an NPS rating, uh, with the customer. And I don't know, Surendra, if you want to mention, um, the NPS rating.
Sure.
NPS basically is net promoter score uh which measures the customer's confidence and uh the trust with some power and their uh you know their willingness to
Um, you know, uh, uh, allow us to be a reference point for future customers as well. So they recommend us to other other customers as well. So we have been working with this customer for almost a year now. Um, and uh, the book has been done so beautifully, the architecture, the the engineering, the procurement the entire energy performance over the site. And then we spoke uh, with we talked with your team, the customer team with your president and uh, uh, about their, you know, their experience on sun power on 5, set of questions and they gave us a very good score. Uh, the overall score was, uh, 90% which is 1 of the best, uh, uh, Best in Class score. So we are happy and um, the customer is, uh, extremely happy and they would like to do more business with us. Thank you sir. Yeah, it's sun power as we continue to execute complex high value, commercial projects, that demonstrate our engineering capability and expertise.
We're really driving premium quality to the marketplace and giving people a legitimate option to go with that.
These milestones with the Millennium Project at Santa Clara University, the waterfront buildings in San Francisco, and most recently, the Los Altos Golf and Country Club really demonstrate our ability to execute at a high level. Our commercial pipeline continues to expand.
We have next generation opportunities coming up, one of which is our first AI data center in Reno, Nevada, that we're going to begin construction on next month. We're really, really excited about that. And backed by a heritage dating to 1985 here in Silicon Valley, SunPower remains committed to quality standards that exceed industry norms and premium technology solutions that position us for continued growth and a very strong commercial and residential outlook.
Thank you.
Okay. Um,
so,
This is what we've already shown you, and
Why are we happy about the future?
So then, what is the—what is—what is that turn in the numbers? You can hold us accountable to—
Um, in this quarter, we expect revenue to go to $75 million or more.
and we expect to reduce our operating loss, which was a
Can't use any other word than 'ugly'—$12.5 million to less than a million. I was, um, tempted to say break even here.
And there is a possibility for that, but...
I don't want to come back next quarter and be making excuses for why we didn't make the numbers. So, those are the numbers.
I had a three-hour meeting yesterday with the executive staff, and we went over everything line by line and group by group. These are the numbers. The executive team is committed to—
Okay, to conclude. Um, we've
changed our company.
We've cut millions of dollars.
The state-of-the-art Monolith and Monolith 2 panels, as well as the high-tech, high-margin installations by our New Homes Cobalt division. We will move into the premium segment of the solar market, driven by sustainable technology advantages, and bring premium pricing to a very lean company. The company is lean, and it has to be lean because most of our sales now are...
Consumer, and you compete on price.
So, what we need is a slice of our business—what will we compete on?
Energy generation efficiency, aesthetics, and architecture—and that's our strategy. So,
We've changed, um, due to these quarters. We've changed significantly—a $13 million change in cost is non-trivial, and the people back at home feel that.
And this is our—this is our—this has always been our plan, and we just want to tell you it hasn't changed due to a surprise in Q2.
where,
Panels, we had the orders put in the line.
Didn't ship on time. They were late, and that's that.
It hit us for revenue. That looks like we just were screwed up, didn't have the orders or whatever. It's not really true.
Okay. Um,
questions.
Thank you. We
We will now begin our Q&A session. As a reminder for those who are joining via the web, you may submit a written question using the submission box located on the right-hand side of your screen. For those joining our live Q&A...
If you hear your name called, please accept, unmute your audio, and ask your question.
Our first question today comes from Gus Richard from Northland. Go ahead, Gus.
Yes. Uh, thanks for taking the questions. Um, just in terms of
You know, execution and third quarter—you know, there are air quality issues around the country, there are heat waves, there's a tight labor market. Um, do you anticipate or see any obstacles to getting jobs done in the coming quarter?
That's a great question, and I haven't got our operations people here to answer it. But yes, there are all kinds of headwinds in our industry, and that's why, when we promised yesterday, we picked the number we thought we could make given those problems. So yeah, there are, and the $75 million number—not a great number, in my opinion—but it's what we thought we could do given the headwinds we're seeing in the market right now.
Okay, thanks. And then one for Tom—you know, uh, welcome to SunPower. Um, you know, uh, in terms of...
You know, FP&A and, you know, getting SEC filings out on time—you know, how much work do you see in front of you in order to get the finance organization, you know, running, um, you know, a tight ship?
Excuse me. Yeah, so I found the finance team is, uh, extremely hardworking.
Um, we're also going through a process of re-implementing NetSuite and consolidating all of our statutory entities onto a single source.
So once we once we're able to get through that which will happen this quarter, we will have better better systems. We will have better processes and I expect uh much improved decision support all throughout the organization.
So the the teams are working, extremely hard uh right now I'm also actively uh adding and enhancing the team by uh hiring, right? So we've been interviewing quite a lot over the last 4 weeks while I've been here and we've already started to bring uh, new Talent onto the team.
Okay, that's it for me. Thanks so much.
Thank you. The next call that we have on the line is Derek Soderbergh from Cantor Fitzgerald. Go ahead, Derek.
Yeah, hey everyone, thanks for taking the questions. Um, so TJ, bookings are strong. Um, you know, I'm just wondering, is cash an inhibitor to delivering on that backlog, and what sort of financing options?
Do you guys have that available to you at this point? I'm wondering if you could maybe touch on that, and if that's an inhibitor to getting you guys back, you know, to cash flow positive.
uh, first of all,
There are.
It's real—no excuses for, no excuses for, uh, not chipping. Uh, the typical excuse would be, we have to have cash to buy the panels to put on the house, and we've got a problem there. We, we...
we're tight on cash.
You know, we ended the quarter with $4 million in cash. The reason we had $4 million in cash is that despite
We are working deals for a small infusion of cash.
To tweak it up to the $10 million I've talked about,
At the current price, I'm not interested in selling stock. If I don't see money coming in and benefiting us by eliminating some sort of problem—and I don't—so we didn't do it. Therefore, I have to grab a little bit on the $4 million bucks.
Are we tight on cash? Yes. The tightest point was the beginning of this quarter. We're through that.
Right now, if you looked at my cash flow graph, and it's a
I'm not compulsive about it, but I do review it every day, and it does have six lines on it that each have a different meaning of cash. Um, and I review it.
So right now, uh, if I...
I'm looking to raise perhaps $5 million in cash.
To buffer us. But right now, our graph says we can make it clean through Q3. Furthermore, the way we've arranged our milestones—
Is that when you install, you get paid?
And that payment we've now ranged comes to the profit; part of it comes to us through the gross margin.
And the cost part of it goes to our source of equipment.
Prepay is kind of a problem. And by the way, that's the industry standard. We didn't invent that.
So, we are looking forward to increased business, equaling increased profit, equaling better cash flow.
But we're tight — just say that.
Got it. That's helpful. And then, just a little bit more detail on the 1,100 jobs—how many of those are funded today? And then could you sort of talk about what portion of those jobs are needed?
Is this more of a redesign or a reaper, versus just a more simple document fix? Can you provide a little bit more detail on that?
Sure. So
The reason we had a breathtaking shortfall in revenue last quarter is that the stuff was sitting in our line, not turned into revenue.
The reason it wasn't turned into revenue is that we did not submit it.
Or payment because our experience has been if you submit something with a small defect, even then it will hang up in their shop and fixing something that's in their shop as opposed to something you're controlling that you get that you get funding for. If you submit, it is, is a loser. So that we we don't we didn't submit it.
Uh, the 1,105 jobs in the fab we have.
It's about half the normal inventory, you'll always have inventory in, in the, in the, in the line.
But a double. And when you double the number of, um,
Jobs in the line, and you keep the same number of movements or activities per job per day constant, then the line moves twice as slowly—twice more slowly by a factor of two. That's what happened to us. So, we need to clean out the line to address the constipation and get back to a normal working inventory.
Um, it's a valid question to ask.
Um,
Is that included in your line?
Crap. That is bound up multiple ways.
I can describe a horror story. I've lived through two of them. Uh, I created one for myself. Back in complete solar,
And what happens if your funding partner says, "Oh, we have to claw back. We paid you before; you should have been paid."
And then I inherited one from the old SunPower, which we're almost through now,
So, you don't want that club act to happen.
Adjust your milestones.
And then move forward without sucking up a lot of cash.
You can get in trouble. If your errors are significant, for example, I can describe this as a real horror story from complete solar days.
Shops in the line have been in line for one.
Um, it hasn't moved out. Why? Well, it hasn't gotten a permit, it hasn't got the approval—City approval—nor does it have PTO approval from the utility to turn it on. Why not? Well, the job itself was changed, and it doesn't match the permit. So now you have to go back and redo the permit, and maybe that was something simple like—
The P, the the the array has moved 8 feet to the South to avoid some pipes or something like that. Doesn't matter. It's a permit. You got to go to the ahj. Now, if you go to California, you get a permit in a day. If you go to New Jersey, it it it's much longer.
So then you've got the job hung up, you've got the customer screaming, and you've got your Net Promoter Score going to hell.
Um, right now, most of the—
problems, we have are
Minor problems that are fixable in a quarter.
The number one problem, and I review it.
Is J-box—what's a J-box? Well, J-box is that little electrical box, and if you have a
A string of panels might be 10 panels, and if you have a two-string system,
Power from the two strings goes to a J-box, and the J-box...
It looks like the box hanging in your garage goes to your system.
and,
You need to prove that the j-box is grounded, which makes sense because you don't want a hot j-box on the roof. Okay, nobody's going to argue with that. Well, guess what? If they didn't take the picture because you've got a guy who doesn't follow the spec,
And it is sort of a potpourri of ordinary execution errors.
And we have specs I participated in writing my science, some of them that prevented if you follow them and we lost the discipline in 1 of our divisions, the following a spec. And it's what, what the pile on the line, we caught the pile in about a quarter, which is pretty fast actually. And we will have it fixed by the end of the quarter. Um, so it, it harmed us. This, meaning the share price. All of that is harmed us dramatically but it's not fatal, and it is fixable and it is quickly. Fixable
Got it. Well, that's all from me. Really appreciate it.
Thank you. We have a number of questions in the queue. A good number of them are redundant, so I'm going to cover a bunch of them with this one question, or a two-part question.
Um,
There's a lot of questions around the Q2 to Q3 revenue. Um,
The Q3 revenue, does that include...
the $15 million that could have been booked in Q2.
And therefore, should we be thinking about the rational run rate for Q3 as really $60 million?
Or is this?
So, is this a temporary uplift? Or should we think of your timeline as being moved out?
In further quarters, so that you would reach $1 billion.
Late in 2028. That's a great question. So, short end, if you're going to bonus $15 million worth of revenue, that means the orders that you took in and shipped are $75 million minus $15 million, so $60 million. $60 million is your run rate. The answer is, yeah, our run rate right now is about $60 million.
Um, and there are bonus events that occur all the time, but the model should be for analysts that you—
have a $60 million rate.
and,
That will increase over time.
Thank you.
We also have a large number of questions about our Commercial Business, which is growing.
um,
Is this something that you are focusing on short-term, and will this become a growing proportion of your offering going forward?
So I'll let John answer that one. Yeah.
Uh, at Cobalt Power Systems, we've been in the commercial space for quite a while. Uh, now with our, um,
Integration with, with SunPower, uh, we have a national footprint and so we can use our engineering and design resources to support some Powers, uh, national uh, installation part partner Network. So, uh, we're actually able to engineer and design, uh, commercial with a high quality, uh, and premium technology that some power is known for and deploy it through our uh established uh certified quality-minded installation Partners. So that uh we can go ahead and deliver for
whether it be universities data centers or Port portfolio management, you know, uh we signed up several dozen, uh, storage units as part of a large portfolio. So that that's what the Synergy between Cobalt Power Systems and our engineering base. And our technology base here in Silicon Valley provides the, the nation, um, at large through SunPower. And uh, we're looking forward to expanding that commercial Outlook. So it's it's, uh, it's a real bright spot for us.
Thank you. We have a number of questions around share count.
Are there any plans to potentially do either?
issue debt to do share repurchases, um, or any thoughts about—
Taking the company private, given your share price today.
So, multiple opportunities to screw up. Um,
Share account.
If you go onto MarketWatch or some site, and you take the market-declared market cap divided by the price, that will give you the shares that they use for the total shares for the company. That number is the number, uh, that the transfer agent, uh, uses.
And that number is currently 151.
Yes, 151 million shares.
And that's fully diluted.
For the shares that are counted in it. And the question is, have you done deals?
That will increase the share count in the future.
And we, in effect, paid for a deal. That happened a long time ago.
And we just paid them off with 17 million shares, right? 17.9 million shares.
So that $17.9 is not on the $151, and I could go through a list of deals that I'm aware of.
I'll just tell you that the 151, when everything flushes through and this is over time, will turn into 200. So that's where we are right now.
Um,
Am I going to go private?
No.
I worked all my career on public companies and taking startups as a venture capitalist, like Enphase for example, which is now worth $5 billion, and making the companies worthy of being a valuable public company. That's why I'm here.
Otherwise, I'll sit at home and—
pay trade.
So no, we're not—we're not going private, and we're not going to leave behind that. Of course, that means you have to maintain your share price at a buck.
And that means, coming up in the future, there will be a split to get our shares comfortably above a dollar. And right now, we're preliminarily thinking—I have a board meeting this Friday.
Um, we will discuss it with the board and announce our intention on share count. Uh, going forward, I have—this is something that...
I'm on the board, but the board's the board and they've got to approve this legally. So, I'll present what we want to do and we'll announce it, um, after the board meeting.
Thank you.
2 more here about, uh,
The first one is about, uh, dedication to technology development work. Do you have a team dedicated to working on things such as the monolith panels?
Yeah.
The team is, uh, sitting right over here. Uh, he's the quality guy. He's, he's the guy that enforced. By the way, the quality rules have prevented us, although we were hell bent for shipping some crap into the field. Last quarter, he prevented it
He also has worked on a bifacial panel startup, and it’s fast because he’s a Silicon Valley guy.
And if he's lucky this quarter, he'll get one. Oh, he's bolstered by a guy named Dick Swanson, who's the DHD founder—a guy that I went to Stanford with. Uh, he's got that technical expertise, so we can...
Do the road maps, okay? And, and that, and that, and so far.
We've been intelligent about having an R&D structure. That is,
more than we could pay for, and they all mentioned our friends at RC.
um,
Stated Monolith 1 is a multi-billion-dollar company.
And they're working with us on the bifacial panel. And this is what I would call a lightweight commercial bifacial panel. They've already shipped product to us. So, um, it's in our interest to—
We have hot products. We're a publicly traded company. That— that...
can brag about those products they've got, so it's a win-win kind of deal. So,
The answer is one and a half, guys. And then, in the 8% of my time I have left when I'm not doing what I'm doing now, I work on it a little bit too.
Thank you. Um, and our last question for today is from a self-described retail investor who says, "I believe in your team."
But price appreciation has been brutal.
It seems that investors are calling your bluff on projections for future quarters.
What insights do you have or thoughts can you share that would color on the market, um, regarding...
Your plans or short-term catalysts that we can know about before the next quarterly call.
To talk.
So it starts with bookings um and bookings is everything right now, is we mentioned before we've had 3, strong quarters in bookings. As a matter of fact, the transactional bookings the residential work. Is it an all-time record right now? The team is essentially booking for Q4, and they're booking, numbers are pretty robust going into Q4. So in terms of comfort about the primary driver of Revenue is bookings. Bookings was very good to the last 9 months ending last quarter in the near record, uh, with transactional, bookings. And we are now booking for Q4, and that's looking pretty robust.
so after booking comes execution,
Frankly, we haven't been very good at it—the execution—this.
Washington commented, "To lead is to forfeit the excuses." So, in our company—and I'm going to get tighter on this—I haven't been as good as I should be. I'm going to...
give a different job to people who can't make the numbers—that there's a
The solar industry doesn't have, like semiconductors that I'm used to, a visceral drive to make the number. It is what it is—you're a salesman. Many of them are students, say, working during the summer. They go back to school. You have tough seasons, you have cold seasons, you can't control Donald Trump, blah, blah, blah. There's a thousand excuses. So, I'm going to focus more on execution on the executive staff, and I've already started. We've already changed management in one of our divisions.
Thank you. That concludes our Q&A session. I'll turn it back over to Dr. Rogers for any closing remarks.
So, on the credibility thing, I get it.
And that's why I didn't say. Trust me, the big quarters are still coming.
Um, I have given you numbers that I told you I worked on three times over with the executive staff.
so,
They now know that.
It's not; they do the best they can for our numbers. It is our numbers that they are responsible for, along with me.
And the answer is.
Wait and see, and I'm giving you numbers that I believe we can achieve. Certainly, we're going to move north a lot—even if we miss the numbers I gave you, we're going to move north a lot. Uh, we've had two atrocious quarters back to back, and—and—
They're going to be behind us. That is one thing I do know.
Sir, session for today: you may not disconnect.
