SunPower Corporation (NASDAQ:SPWR) Q4 2023 Earnings Call Transcript

Andrew Percoco: Great. Thanks so much for squeezing me in. I did just want to come back to the 2024 guidance for a second. I know you’re not giving volume growth expectations, but if I just overlay market expectations, whether that be Wood Mackenzie or other sources, on top of your gross margin expectation, it implies that you still have a good amount of work to do on the OpEx side to get to a point where you’re generating positive adjusted EBITDA. So can you just give us a sense for how much, potentially on a dollar basis, you expect to cut out of cash OpEx in 2024 versus the $330 million or so in 2023?

Beth Eby: So I think what we announced a few weeks ago, I think the bulk of that work is already done. We announced pretty significant savings in OpEx, as well as some moves on our cost of goods sold. And so, the bulk of that work is pretty much done.

Peter Faricy: Yes. And the other comment I’d add, Andrew, for color is that, as the mix between our businesses shifts this year, we’ll likely do less panel only sales to dealers. So think of that as potentially a little lower margin, a little lower ASP. And we’ll be mixing out higher and other segments like SunPower Financial and New Homes that have higher ASPs or higher margins. So I do think that between being more conservative and how we have planned for the top line, and then really being aggressive on leaning out the company and making it a much stronger OpEx and COGS cost structure, we feel like we’re in a good position to endure what’s likely to be a still pretty tough 2024.

Andrew Percoco: Okay. Understood. That that’s super helpful. And then I guess the last question I have just relates to SunStrong. You clearly still have some residual ownership of that JV, is there an opportunity to potentially rotate that asset or sell down that residual ownership as another source of capital, just thinking through other potential sources of capital from here to the extent demand doesn’t improve in line with your expectations?

Beth Eby: While we would always look at all options as sources of capital to reduce our cost of capital, that’s not something that we’re actively looking at.

Andrew Percoco: Okay, thank you.

Operator: Thank you. And one moment for our next question. And our last question is going to come from the line of Michael Blum with Wells Fargo. Your line is open. Please go ahead.

Michael Blum: Thanks. I appreciate it. I’ll just squeeze two quick ones in here if you don’t mind. The first is just — will this funding that you announced this morning, will that definitively remove the going concern language in your financials and what’s the path there? And then kind of unrelated, but can you give us any updates on your contract that’s coming up here with Enphase in a little bit? Thanks.

Beth Eby: So, while we are still in discussions with auditors and reviewing financial plans, we do not expect at the moment to have a going concern provision in our 10-K that’s coming out.

Peter Faricy: And then regarding Enphase, no update to provide on this call. They’re still a terrific partner of ours. We really are quite aligned with how they think about the quality and the engineering and the support of their products. And I think they’ve made also great strides in improving the cost structure and providing better value for consumers over time. So we’ve had a terrific partnership with them as we go forward. And I think when there’s new news to announce there, [indiscernible] and I are happy to share that more broadly.

Michael Blum: Great, thank you.

Peter Faricy: Okay, thanks everyone. We’re very excited again about this new capital commitment of $200 million and we’re really focused this year on driving positive free cash flow and profitability. Thank you all for your questions today and we look forward to talking to you in the next quarter. Thank you.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.