SunPower Inc. (NASDAQ:SPWR) Q1 2026 Earnings Call Transcript

SunPower Inc. (NASDAQ:SPWR) Q1 2026 Earnings Call Transcript May 12, 2026

SunPower Inc. misses on earnings expectations. Reported EPS is $-0.105 EPS, expectations were $0.01.

Sioban Hickie: My name is Sioban Hickie, SunPower’s VP of IR, and I would like to welcome everyone to the First Quarter 2026 Earnings Call. I will review a few housekeeping items before turning the call over to our CEO, Dr. T.J. Rodgers. All lines have been placed on mute at this time. This call is being recorded, and a replay will be available within the Events section of SunPower’s website. 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 that may cause actual results to differ from those expressed or implied in our statements. Also on today’s call, we may discuss certain non-GAAP financial measures.

A reconciliation of any differences between those non-GAAP financial measures and the most directly comparable GAAP financial measures are available within our press release. Lastly, we will be holding a question and answer session after the end of formal remarks today. For those watching via the webcast, you may submit a written question at any time via the submission box located on the right-hand 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. With that, I will turn the call over to T.J. Rodgers, SunPower’s Chairman and CEO.

Thurman Rodgers: Good morning. We’ve got the Q1 ’26 results to show you this morning and answer questions. First, top lines: Q1 ’26 revenue was $72.8 million. That was down 9% from our guidance. Our latest guidance was $80 million. So the market closed softer than we thought it would. Not catastrophic. 9% down quarter-on-quarter is not bad, but it was weaker than we expected. This revenue alone would have impacted our operating income of $1.8 million, but our non-GAAP operating income was minus $12.9 million. And that is a onetime event because we added $9.9 million of spending during the quarter. We had anticipated, and still do anticipate, a great Q3, and we started hiring 86 people last quarter. Now we’ve turned it around.

We’ve gone from plus 86 to minus 115. And our cash was flat. We raised $41 million during the quarter. We used all of it to pay off debt, except to keep working cash at around $10 million. Since that time, and this means since the beginning of May, we’ve cut our costs $9.9 million a quarter. That included RIFed employees, 115. We went from 86 hires to 115 RIFs. We installed an across-the-board 4-day workweek through September. The theory on a 4-day weekend comes from my prior life in semiconductors. It’s extremely difficult to build up a good workforce. And the last thing you want to do in a yo-yo economy is lose your good people. So instead of having — we did have a layoff. This was focused on overhead and redundancy among our 4 startups.

But in the sales and fulfillment area and in the install area, we went to a 4-day workweek. What that means is you work 4 days a week, you get paid for 4 days a week. Another way to look at that is a 20% pay cut. But when you come out of it, you start working another day, the people you’ve got remain in place, and you have less of an arduous climb back. So that was the theory on the 4-day workweek. We’ve cut our inside sales group. We had a large call center. We’ve cut it down to those needed to maintain our pipeline there because — I use the word paradoxically, call center sales have a lower profit margin and worse cash flow profile than our conventional sales force, which has now grown to 1,552 members, and that represents 90% of our revenue.

Q&A Session

And the inside sales group is using a lot of purchased leads from the market, and we wanted to get rid of that expense. We will continue this function, but at a reduced scale with the top producers. We reduced our finance admin costs, which had ballooned, not for any bad reason, but basically, we went through an audit. It was arduous, very arduous, and we just allowed anybody to be hired, either contract or employee, that we needed without restriction. Now we brought that back down. You’ve seen this graph pretty much all the time. It’s my proxy. It’s actually the way I run the company. It’s a metric I can understand and people can understand. We actually run it on dollars, but I report it on headcount. So if you go back to premerger, there were 3,500 SunPower and Complete Solar people.

We picked 1,280 of them to start the company. A year ago, Q4 was our first quarter, and then we successively dropped that target over time. We have been in a period where the target has been 820, which is very lean, and we bounce up and down around 820. As we acquire companies, we’ll bring in 100 people from — over 100 people from Ambia, for example, and then that pops us up, and then we work it back down with synergy. Now just this quarter, we’ve dropped our target to 700. We think that’s doable, and we’re currently at 710. Okay. I wanted to talk about that before I went into the 2026 forecast. The cuts reduced our operating expense by $9.9 million a quarter. That’s done. They were too late to make Q1 ’26 better, hence the minus $12 million loss.

But they will be in effect for 60% of the second quarter, and they will have a significant positive impact in the second quarter. Our current Q2 ’26 revenue estimate is $75 million. It’s up $3 million from last quarter, but still anemic, and the market is still anemic, but we are starting with our acquisitions, starting to be able to bounce off the bottom. The operating loss will be reduced to $3 million based on the cuts that I talked about earlier. So we’re going to have a reasonable quarter, but a loss this quarter. And finally, I rarely forecast ahead more than 1 quarter. But in Q3, we believe we’re going to beat $96 million. I’ll explain that in a little while. And at $96 million in that quarter, we will be profitable and cash flow positive.

So we’re going through a weak but mildly weak quarter on our way to a plan we’ve had all year. That plan is shown here. This particular version of the plan is the one we used to raise money. We raised $41 million in the last quarter. Here you see revenue all the way through for 3 years. The guidance — meaning that’s what I’m telling you and I’m planning on achieving and expect to be criticized if I don’t meet it — guidance, and then out here is a model. Our $1 billion — our mission statement is to have $1 billion in revenue. And that run rate will be achieved in Q3 of ’28. So that’s still on target. We’re still talking about a big jump in revenue in ’26. And you can see that this is a nontrivial gap here. As we’ve shown and put on the website, it is because our acquisitions — Ambia, Sunder, Cobalt — and the recovery of New Homes from the bankruptcy, they’re all kicking in.

And that’s what we expect to give us a big jump in revenue in 2026. I put 2 more lines in here to show you where we are. We’ve done careful calculations. Our current breakeven revenue — operating income breakeven revenue is $76 million, and our current cash flow breakeven revenue is $96 million. So this $20 million extra times the various yields going through the P&L is what’s required to pay for the debt that we’ve got. And we still are anticipating big growth in Q3. I’ll let — Dan McCranie is here. He’s running sales and marketing for us right now on a daily basis. I’ll let him talk about that later. As a matter of fact, I’ll let him talk about it now. Dan?

John McCranie: Hey, thanks, T.J. Can I get the graph up, please? Thanks. This graph is total bookings beginning in Q4 ’24 going on through Q1 ’26. Just a brief word on what this definition of bookings is. This is just not a signed home improvement contract from a customer. This is actually a signed contract plus the completion of the design plus funding approval. So it’s a robust high-yielding bookings. That’s what we use for our forecast methodology. You can see in Q4 ’24 all the way through Q3 ’25, the numbers were hovering around 1,500 to 2,500 jobs a quarter. You see a step-function increase. In Q4 2025, remember we booked — we acquired all 3 of our major acquisitions, Sunder, Ambia, and Cobalt, in Q4 of 2025. Beginning in the second half of ’24, we started seeing the results of their bookings, and you can see over 4,000 jobs were created in Q4 ’25.

In Q1 ’26, we had a record of 4,446 jobs. Now remember, there’s about a 3-month lag between a booking and revenue in this particular industry. So what we’re booking for in Q2 now is — beginning now is for the first stages of our Q3 revenue plan. T.J. showed you that we have a very robust Q3 numbers, a step-function up from about $75 million to $130 million. T.J. told you, he’s guaranteeing at least $96 million and above that. We are currently on track in Q2 with the bookings we’ve got so far across all departments to meet that $130 million number. We’re happy with the way the bookings are going. It’s predominantly the Sunder and Ambia turn-on that’s occurring, particularly in the springtime when the contracts get much larger compared to the winter.

So going forward in Q2 ’26, you’re, of course, going to have a record in bookings, and we think we’re going to have a record in bookings that allow us to do revenue in Q3 well in excess of T.J.’s $96 million.

Thurman Rodgers: Dan’s used 2 words, guarantee and well in excess of $96 million. And I can tell you right now that our lawyer in New York has just had a myocardial infarction, and he’s laying on the floor. We’ll call people to recover him. I want to make one other point here. These jobs — I don’t deal with solar backlog. Solar backlog is like oatmeal. It’s just not firm. You can’t tell where you’re at. So we have a definition in the company, it means you have a signed contract, that is the guy signed up to begin with; then you design his home for him, and you showed him the pictures and went again, and he signed up on that. And then you told him the funding was approved. We’ve gone through our funders, and he was approved.

And today, third-party ownership, or TPO, is the way people fund it, meaning the funder is going to pay for the house and own the installation, and his house will be part of a pseudo-utility later on for that funder. Okay. So this is really good news. And normally, if I weren’t talking about a $12 million loss, I’d be bragging about this and talking about big things in the future, and I still feel that way. What?

John McCranie: Bernard.

Thurman Rodgers: Oh, Bernard. Yes. What’s wrong is what we changed. Boys, I’m sitting here looking at it. I worked till midnight last night on this thing, and there are pages missing. So I need to take about a 2-minute break and bring out a memory stick here and load a computer with things I forgot, like our new CFO.

John McCranie: Our new Board member.

Thurman Rodgers: I put it in my briefcase. I could tell you that I had planned this in advance, but that wouldn’t be true. All right. Now I go to PowerPoint. I’ll give you the first page right now. Okay. That one I gave you. No? Convertible note offering, I talked about. Bookings are a record, we talked about. We saw the detail. We filed our 10-K, and it was a difficult audit. And I’m going to talk about that audit and what happened. And the audit required restatements — 3 restatements, 3 quarters of restatements, and they’re going to happen on time. That means within the next week. Here’s the P&L. In Q4 ’25, the last quarter, we did $90 million in revenue with $3 million in profit. Footnote 4 says we restated 10-Q results consistent with adjustments in the 2025 10-K.

So we’ve got a 10-K. That’s God’s word. That’s filed. And everything is going to be consistent with it starting today. But I just wanted to point out that — and I will show you in a minute, that these numbers were what we reported before, and they were close to being right on. And I’ll tell you why they weren’t. Q1 $72 million, $12 million loss. And if you ask why the loss, it’s right here. Operating expense going up dramatically for the reason I already said, we’re getting ready for Q3. Now we’re going to get ready for Q3, but we’re going to get ready for Q3 in a shorter period of time. Okay. If I look at the 10-K audit, this is what — this is called prior quarterly results. So it’s what I told you last year in meetings like this one. So we were profitable in every quarter, minimally profitable in every quarter.

And our non-GAAP operating income added up to $10.9 million on $308 million in revenue distributed like this throughout the quarter. After adjustments, post 10-K audit, the total operating income for the quarter (sic) [ year ] dropped to $7.33 million. So given the changes in the quarters, that was a pretty good result. The revenue for the company dropped to $300 million, and I’ll explain that in a minute. There’s one error there that caused that. Now if I look at the quarters, this is the first quarter of the new year after the acquisition. And in the 10-K audit, we uncovered a bunch of stuff and had write-offs. So that took our profit from $2.94 million what I would call cash profit down to a loss. There was a little bit of bleed-over into Q2, and then Q3 became more profitable.

And in this case, this is non-GAAP profit, where we have put in actual cash gross margin. The GAAP numbers have a different gross margin, which is lower than actual cash collected based on some rules about acquisitions where you’re not allowed to acquire something and then have more than your average gross margin reported for it. So in this case, the actual cash gross margin was 80%, and that means we made more money according to GAAP than I reported. Okay. So old, new, and I’ll just point out one thing. This is the new source of truth. So when I talk about record profit in the future, it will be because we’re above $4.85 million, not above $3.5 million. When I talk about record revenue, it will be because we’re above $91 million. So this is history.

I wanted to show the comparison to show you that we played it straight for the entire year. And I wanted to — and actually, if you want to ask which is a more believable scenario from a businessman’s point of view, the answer is this one right here. This includes a lot of, put this in that quarter, put that in that quarter, this is on your books we’ve got to clean it up. We actually took the record quarter we ever had, and it got bigger. So it is what it is. This is the new source of truth and this is our base. The good thing about it is for this amount of revenue and this amount of profit, I now have fully audited quarterly results — or I will have in a few days when we submit the restated report. And we go forward with a clean set of books and a better accounting capability than we had.

I want to talk about the audit for a minute. The standard auditing method is to sample line items from our books. And you have to sample because there are too many line items to actually look at every one. Then the auditors asked us to supply independent third-party documentation that validates the books. And what does that mean? For a given order, for example, revenue, they want the home improvement contract, they want the work orders that showed we sent people to their house, they want the drawings for the system that shows we designed it, they want the invoices for the panels that we bought, and other things, so everything we bought to work on the house. They want the worklogs, what crew went to what house, when. They want the customer invoices we billed them, here’s the bill.

These are all hard proof points. They want proof of payment, they really did pay you. And then that means bank accounts showing money went into the bank as a cash flow kind of thing. And then they want proof of activation, the system you built actually is running as we speak. And that involves typically getting a utility bill and showing them that there’s been a change in the bill based on the solar. So it is an arduous task, the audit, the 10-K audit. And there’s only one audit a year that matters, it’s the 10-K, and that’s the entire year. And then the quarters are unaudited until the end, and that’s when you have the final statement. Okay. How big is all this? There are 9 steps in our solar installation process that lead to revenue. Our auditors, required proof with hard third-party evidence on each of the 9 steps on each of our 11,500 jobs in 2025.

You multiply those numbers, you get over 100,000 line items. That means you have to sample. And in the sampling process, they go in, grab some, make you go through all of this stuff for it to prove it and document it. And the sampling in this year required — led to 390 formal requests. 390 times our auditors said, we need this or we need that. And by the way, I’m not making an excuse here. Our accounting isn’t where it ought to be. I’ll tell you in a minute, the head accounting guy is now T.J. Rodgers. He’s not used to this kind of accounting and we’ll be better in the future, like right now being the future. Our prior quarter reports that I just showed you showed well versus the 10-K, the truth, the source of truth for full year revenue. The 10-K audited number for 2025 revenue was $300 million versus what we stated was $308 million.

And when we went back to find out what happened, the extra $8 million in revenue in the prior quarterly reports came from double-booking at a legacy company, Blue Raven, which doesn’t exist anymore, from a defunct computing system, Albatross, which doesn’t exist anymore. And somebody way back when, we’re talking now probably Q4 of the prior year, booked jobs twice. And they came into our books, and we didn’t start selling the things we acquired from SunPower until midyear, and then we didn’t really start looking through what we inherited until the end of the year for the 10-K audit, which, by the way, I don’t consider to be noise. I consider it to be something that gives credibility to the company. And that’s why we’re complete, and we’re working hard on it, and I’ll show you what we’ve done.

Okay. On the income side, operating income — and I always use operating income rather than EBITDA, which I don’t like — our prior statement was $10.9 million. The new number was $7.3 million. The difference that was due primarily to preacquisition balance sheet assets as I told you, and using actual gross margin instead of a calculated gross margin. However, I’ll show you this. I will show you. Nice to have memorized this thing. So these are the quarters that came from these quarters. This is the yearly total, and it’s really the only part of the 10-K. These things exist only because of the requirement to do a restated 10-Q. These differences are vague. Obviously, it went from a loss — from a profit to a loss in a quarter. And that’s when the auditors said, we have to restate, and we’re doing that.

And we’ve actually already done it. We already have agreement on the numbers. There’s a filing coming up this week or early next week. Okay. So revenue did well. The extra revenue came from a double-booking in an old system. The operating income, I showed a difference, but really the quarters being so different triggered the requirement to restate in Q1 ’25 through Q3 ’25. I stand for financial integrity. I go — and this is an accounting term — apeshit when I don’t see numbers that are perfectly right and believable. And I’ve always been that way. And this is the first — and I’ve been doing this stuff for 40 years. This is the first time I’ve ever had a restatement. Then all of a sudden, I had this horrible thought. When you lived in semiconductor nirvana, did you really never have a restatement?

Or did your finance guys, who let you work on Moore’s Law and transistors and they took care of finances. Did your finance guys have a restatement here or there that you didn’t know about? And when you’re bragging about, “I’ve never had a restatement in my career,” is it really true? So I went on AI: “Did Cypress Semiconductor ever restate a quarter?” And let me start it over here. I did it 4 times. I’ve shown 2 of the 4. I changed the question because the answers change, and I wanted to get a good look at it. Based on available search results, there is no direct indication that Cypress Semiconductor ever formally restated a quarterly report. The provided information shows during its time as an independent publicly traded company, it warned of misses.

The company often warned of upcoming quarterly shortfalls due to changing market. They lowered guidance, they lowered earnings and revenue targets, such as in September of 2004. They adjusted results. They reported GAAP versus non-GAAP results in 2016 and ’17 to account for acquisition-related costs. However, the search results do not contain reports of accounting errors, fraud, or formal financial restatements. I read this one second because it’s got a little kudo for me in there. And it says, “The company, particularly under longtime CEO, T.J. Rodgers, was known for its strong no-nonsense approach to financial reporting.” Okay. So what has changed? I will not tolerate not having perfect finances, period. Period. No question, no debate, no meetings.

So we’ve changed. Now this restatement, we have received and accepted the resignation of CFO. I am not blaming this on our CFO. It’s my fault, T.J. Rodgers’ fault. That’s simple. I run the company. And if it’s not perfect, it’s my fault. But our CFO — we’re changing CFOs. Basically, it’s a mutual agreement to part ways. And we’ve also agreed not to sling any mud at all in either direction. I have appointed — I have been appointed by the Board of Directors to SunPower’s Principal Financial Officer. That’s what you get called if you aren’t really an accountant, but you run the finances. For approximately a month, we’re in the process of closing a new CFO, and I’ll be the Principal Financial Officer for a month, and I can guarantee you, I go to 2 meetings a day on finances.

And although I’m not an accountant, I can read stuff, and I can understand what’s right and what’s wrong based on all my experience. The Board has appointed Bernard Gutmann, 8 years the CFO of the $42 billion chip company ON Semiconductor, to the Board and to serve on our Audit Committee. So we’ve made changes on our Board to bolster our Board. I want to introduce Bernard right now. He signed up last week, and he was at his first Board meeting last week. So let me tell a story about Bernard. Are you showing his picture now? All right. You guys should be able to see Bernard now. I met Bernard — we’re at Enovix right now. That’s my free TV studio, so I don’t have to do something at SunPower. And Bernard is on the Enovix Board, the battery company.

And I’ve known him, I sit right across from him in the Board meetings. He’s extraordinarily meticulous. Unlike me, he’s got almost perfect handwriting, and he walks out with 3 pages of single-line item notes every time. We’ve had 0 problems at Enovix. So I have now 2 validations, my old company and Enovix, that the ship can get run right, and you shouldn’t have things like restatements. It’s not okay. Okay. So I know Bernard. How do I know him? I invested in — my SPAC, invested in Enovix. We took them public. And on my SPAC Board was a guy named Manny Hernandez, who was my CFO. He created CFO heaven for me while I was running a chip company, and I got to work on Moore’s Law, and he had no restatements for 30 years. And he wanted to retire [indiscernible], a lot of grandkids, all that stuff.

So we said, “You can’t do it.” And he said, “I’ve got a guy who’s as good as me. Matter of fact, I trained him.” So I met Bernard, and he was absolutely right. So these are the 2 best CFO guys I’ve ever met. And with that little anecdote, I’d like to introduce Bernard, have him tell you a little bit about himself and what he saw at the first Board meeting and if he’s up for it. Bernard?

Unknown Executive: Thank you, T.J., for these kind words. I’m very excited to join the SunPower Board. As T.J. mentioned, I had an opportunity last Friday to review and attend, as an observer, the Board meeting, and it was quite exciting. It is definitely with the issues that T.J. talked about from the finance point of view, a little bit of a challenge in the short run, but I’m up for that challenge. It makes it even more exciting. I think we can set up the right processes and controls in place so that this doesn’t reoccur. From the business point of view — and again, I will be careful not to get the lawyers another attack — but what I saw was quite exciting. With the successive amount of acquisitions that have been done. The pipeline seems to be quite exciting.

And Dan talked about it with the more than 4,000 bookings that are predicting some pretty good stuff to go in the future, go beyond just breakeven, but into the — moving towards the $1 billion opportunity that T.J. talked about. So that by itself business-wise is quite exciting. Quickly from my background, I’m an industrial engineer by degree. However, I have worked more than — close to 40 years primarily in finance. I worked at Motorola and ON Semiconductor in all kinds of roles, starting from the bottom as a financial analyst in a semiconductor factory in Guadalajara, Mexico, growing all the way up to becoming the CFO for the last 8 years of my career in this pretty heavy manufacturing environment, do all kinds of activities, including debt financings, including audits, including operational stuff.

So my background is quite adept for helping T.J. and the Board in this upcoming challenge. So I’m ready for it. Thank you, T.J.

Thurman Rodgers: I will give away one little secret: when Bernard accepted, he said, “It’s a really interesting company, but the pay sucks.” So Bernard is like me. He’s doing something that’s interesting to him. Okay. What has changed? The SunPower team responsible for implementing Sarbanes-Oxley, the accounting procedures, if we had that in place right now, we wouldn’t be talking about this topic. Now reports, we’ve changed the line of command through the Quality Vice President, Surinder Bedi, directly to the Chairman of our Audit Committee. So the people who have been sucked into the hubbub of the audit, working on SOX, are going back to work on SOX only. The Chairman of our Audit Committee is Ron Pasek. He’s the only other former CFO on the Board.

And he and I were overwhelmed with — when the audit came in with so many adjustments required. Both of us were quite surprised. I always brag about having 8 former CEOs on the Board. We have an extraordinarily good Board. Right now, I wish I had 4 CEOs and 4 CFOs, but we’ve made a big step forward here. All SunPower responses to audit questions, so the 390, are now formal documents as opposed to telephone calls between us and the auditors, formal documents that are prereviewed by the quality department. And they have a spec for when you respond to an auditor, what that response needs to contain. And if you don’t follow it, they reject your response and it doesn’t go to the auditor. They understand they can’t be slow, so they typically deliver to our auditors in less than — get an audited document, our own internal audit, 2 hours after their request.

We never would have made it through on the audit in time if we hadn’t turned on this process. And it will — that’s the way we’re going to work forever. We bolstered our finance team. We needed to do more with people from operations and quality. I’m talking about 10-ish from either or both groups because the finance guys, and the reason I’m not casting aspersion on any of them, were getting questions that were beyond their scope. I mean, a very common result in solar is, the guy owes you money. You call him up, he doesn’t answer. You call him up, he doesn’t answer. You call him up, he doesn’t answer. Then you find out he doesn’t live there anymore. Then his financing expires, so you can’t get the last payment. And then you have to get permission from the new owners to get in the house.

If there’s something wrong, you’ve got to work on it. And all you have to do is have something like 500 to 1,000 jobs like that pile up, which they easily can over the period of a couple of years, and that is the quality poison that I see as more responsible for the malaise in the solar industry than anything else. And this way, we’re putting together a team to respond to those questions and preempt them in the future, creating processes such that nothing happens that isn’t preaudited in our own company. Okay. Then I gave you this one and this one and this one. So we’ve done our cuts. They’ll be 2/3 effective this quarter. This quarter will still be weak, but better than last quarter, and the losses will be contained a lot better. I validated again the model we used, and it’s on our couple of websites and said we are going to make this jump.

It’s real. One of the reasons you’ve been hearing about Sunder for a while, I’ll just make this one point. Sunder is a sales company. Sunder manages 1,500 reps with 100 or so internal people. And their product is a signed contract, one of those contracts with all the parts that I said earlier. And they, therefore, have sold their product and it’s gone. There is no pipeline inside of Sunder, is really the point. So when you buy them, you buy a machine that creates orders, and you don’t start collecting orders in your own pipeline until after they’re signed up. And that’s why it’s taken a while to fill up the pipeline. The same is true for New Homes, where we’ve got a lot of orders for New Homes, but that pipeline was dumped actually before we took over the SunPower assets.

That pipeline was already dumped too because the builders, the corporations, they moved on and they were gone, and we had to refill that pipeline. And then I pointed out, and you can write these numbers down and do incremental calculations on them when we get profitable and when we get profitable and positive cash flow. Dan talked about the business. Now I’m ready for questions. I apologize for the mix-up. I’m sitting here thinking, “how could that possibly happen?” And the answer is we mail a few of my slides, not the final slides I worked on last night, emailed here, and those slides were used to bring up the projection system and everything. They weren’t intended to be the report, but that’s what I ended up showing you. Apologies for that.

Questions?

Sioban Hickie: Thank you. Our first question today comes from Derek Soderberg at Cantor Fitzgerald.

Derek Soderberg: T.J., I appreciate all the detail you provided on the business here. I want to start with the record bookings number. Specifically, what’s the average revenue per job in the current mix? And what’s the assumed conversion time line from booking to recognized revenue? And then I’ve got a follow-up.

John McCranie: Derek, the average selling price right now is about $32,000 per installation. Just as an aside, that’s going up as more and more of the installations have battery attach. Battery attach is big, as you know, in California, where it’s almost 100% battery attach, and we’re getting very strong in California and about 45% in Texas. So ASP is $32,000 and climbing through the year. Your next question involved, I think the cycle time associated, the time between an FTC or a hard order and revenue. Was that your question?

Derek Soderberg: Yes.

John McCranie: Yes. The median right now on that is right around 2 months, 2-plus months. It ranges anywhere from a low of about 35 days to a high of about 115 days, depending upon the complexity of the roof install. So we use as a general rule of thumb about 90 days. So if you see our bookings pop in Q2, just track about 1 quarter forward, and you should see the grand bulk of that revenue.

Thurman Rodgers: And then the corollary of that is in the fourth quarter, when things start to slow down, you’ve got a bunch of bookings, and that 90 days’ worth of bookings jumps from Q3 to Q4. Then you hit January, and we’re still promising to come out of the January, February, March malaise, and we can see it.

Derek Soderberg: Got it. That’s helpful. And then, T.J., we’re seeing some other solar companies over the past 6 months or so, specifically a big residential installer filing Chapter 11. Can you talk about that dynamic a bit, what you’re seeing out there, and are you guys benefiting yet from survivorship?

Thurman Rodgers: Benefiting from survivorship. Okay. So yes, we’re seeing bankruptcies. The big surprise and it’s public was Freedom Forever. They’re bigger than us. So therefore, they should be more robust than us in terms of hard times. We’ve benefited from getting some of their salespeople, not a lot. We’ve already acquired 3 other sales forces to bring us up to over 1,500. I don’t want to say the other area where we acquired because I don’t want the other guys to know about that. But we’ve gotten — we’re not hiring right now. So when we hire 5 or 6 people in a key area, that means 5 or 6 people elsewhere, typically in an administrative function go away because we’ve got a 700-person limit in the company. What’s bad is you’d like to say we are benefiting from the malaise in the industry right now.

What’s bad is we had to lay off some people, and it’s not good, screws up morale, gives you a reset. Also, your sales force are 1099s, and what that means is they run independent companies that you don’t control, they don’t work for you, and they can disappear whenever they want, and they often disappear anonymously, and you find out later when nobody is answering the phone why. So it creates unrest in the sales force. And we’re working on that right now because a lot of our salespeople are new. And they’re coming in, “Man, I thought I escaped. SunPower bragging about record this, record that, and I thought I escaped, and now I’m watching…” And there were some minor things on the Internet, minor. SunPower stopped buying, what you call, leads.

Stop buying leads. Yes, right, because the group that used them, we cut way back because that group wasn’t effective as our main sales force. But SunPower stopped buying leads. And of course, that’s interpreted as imminent bankruptcy, and it feeds the frenzy. Solar industry is one of rumors, almost always unfounded. It’s rare to hear the truth on the Street in the solar industry. So I hate that worse than I like the benefit of being able to pick and choose good people that we can wire down.

John McCranie: But picking and choosing has gotten us some top talent. That’s why I think you’re going to see extremely strong Q2 bookings.

Sioban Hickie: Our next question today comes from Gus Richard from Northland Capital Markets.

Auguste Richard: I’m just curious on the bookings in the quarter. I’m assuming those are all installs. How many of those were converted from Sunder sales?

John McCranie: Make sure I understand your question, Gus. Are you asking how many of those bookings…

Auguste Richard: So the first question is — I guess first part is, those bookings are installs, correct?

John McCranie: Correct.

Thurman Rodgers: Yes.

Auguste Richard: And then of those installs, some of them, I’m assuming, came from Sunder sales. And I was just curious how many of the Sunder sales got converted into installs.

Thurman Rodgers: Well, the answer is these are the ones being installed. Now Sunder it’s difficult to say — no, it’s not. Actually, I prepared a slide. I’ll show you the slide. Probably regret it later. There it is. Okay. So this is our 1099 headcount, number of salesmen. This is old SunPower. These guys sold loans, not TPOs, to people in the Midwest who wanted a 5-year loan to put on solar. And to me, it’s pretty simple. The TPO pitch is actually more attractive to an individual. But this group, essentially 3/4 of them have gone away. Then we picked up Sunder, this one you’re talking about, and we still have 713 of the 900 people we had there. We picked up Ambia, that’s another 300, and we picked up a company we haven’t talked about publicly because we just hired them, and that’s Purelight.

And this is another company that had got in trouble, and they’ve got an excellent sales force. So right now, we’ve got a rejuvenated sales force that specializes in third-party ownership sales, and lucky we did. So how many are Sunder? About half. Direct, all Sunder. But Eric Nielsen, the Head of Sunder, President of Sunder, and now our VP of Marketing and Sales, runs all these groups. And they’re now mixed together. They’ve been mixed together for 90 days. So I only had this graph created so I could look at what we acquired and what it looks like. So there’s your answer, half Sunder, but all Sunder, because the guy that ran Sunder runs sales for all of us, except for New Homes, which has got a different sell to corporate customers, and it’s a very small sales group that deals with that.

Auguste Richard: And then obviously, in the news is the war in Iran. New England, for example, uses LNG to produce energy, and it’s better for the guys who sell LNG to sell in Europe. And their utility prices have been going up as they are in a lot of places. So how much has the change in the energy landscape, if you will, starting to incentivize consumers?

Thurman Rodgers: That’s the biggest driving force. You asked all the questions that I put in the appendix to save time. This is solar energy additions to the grid. So we’re now talking about utility-scale solar. There’s no oil of any kind up here. We have only natural gas that’s being added today. So first it says here’s solar. And it says solar didn’t matter enough even to be a blip on the graph until 2011. And if you look at the growth of solar, it’s been spectacular. Here’s a bad year. Here’s another bad year that lasted for 3 years before we recovered. So solar is not immune to dislocations. Battery is the second one. And battery, if you really think about it, there’s batteries in the grid where they take some power source and store it in the battery.

There’s also batteries on 1 million houses in the United States, and they’re the best kind of battery because what they do is they don’t add power to the grid. What they do is they reduce the power that house requires. They store the daytime sunlight energy and then let the customer use it at night to avoid the high-priced natural gas kilowatt-hour fees. So right now, if you wanted to talk about, is this market good, the market’s great. If you wanted to talk about, what does it mean when the price of utilities go up, that’s great because our prices are going down, not up. There may be a glitch due to something in the supply chain, but our prices are going down every year and have been. This whole rise here in solar is because we’ve become truly economically competitive.

I’m not — I don’t run around talking green this, green that. I run around talking about, you pay me so much a month and your bill will go down by more than that per month for the rest of your life. What do you think? Okay. And then let me see. By the way, I won’t discuss it, but this is Q1 ’26 revenue first plan, this is a positive event we wanted, our second plan, our third plan, and then actuals. So I only look at this every day. And I got nervous right about there when this second plan got created there, we had drifted off just a few percent. And we started reacting right there. And if we hadn’t done that, we wouldn’t be in the shape we are in right now to react to this crisis. Let me leave it there. If somebody asks me another question, I’d love to show you that graph, but I’d rather take questions.

Go ahead.

Sioban Hickie: We have a couple questions coming in from the web. The first one is, with the increased bookings that you’ve discussed, what is SunPower doing to ramp up installs to meet this incremental demand?

Thurman Rodgers: That’s a great question. Well, we were in the process of hiring 86 people for our install organization to handle all that business. Then I came in one day, and I’m the hotshot from Silicon Valley, — and I said, “Wait a minute, don’t hire 86 people. Lay off 115 people.” So the market has whipped us around, and the 4-day workweek I discussed was designed to allow the company flexibility. The reason my graph for revenue shows $130 million in Q3, and I’ve only guided to $96 million because that’s cash flow positive, and that’s sort of a minimum step we have to take, is that we still have to do the ramp. And actually, I was driving over here today, I was thinking about next time I’m going to call Spencer Jensen.

He runs our ops. And I’m going to tell Spencer, he needs to take his new employee training time from his current 4 weeks, where I pay salary for 4 weeks and don’t get anything, to like 1 week. And we do that in sales — in our sales division, and we need to get faster. So we need to be able to react faster because I’m not going to buy it upfront and spend money now on that increase that’s coming later.

Sioban Hickie: We have a question, T.J., to you. Last year in July, you spoke about potentially looking to wind down and exit as our CEO in about a year, which is coming up. And so the question is, would Dr. Rodgers like to revise that time line and reinsure investors of his continued attention and leadership within SunPower?

Thurman Rodgers: Well, one thing I kind of like is that I was retired — I was on 6 Boards, so I wasn’t exactly doing nothing, but I was retired for 6 months. Now I’m enjoying being back in the full war mode. So that’s one. Two, I would never leave a mess behind and have them say “Rodgers screwed it up and then took off “. That won’t happen. So the [indiscernible] aren’t going to win. We’re going to win, and I’m going to be there as long as it takes.

Sioban Hickie: We have looks like one final question regarding battery attachments. What effect do they have on the overall profit margin of your sales?

Thurman Rodgers: Batteries are more profitable than solar. The best job is called a grid-tied battery. That’s where you don’t even back up the house. You’d think, “Well, why would you buy a battery and not back up your house?” The answer is you buy a battery to collect cheap, free energy at noon and then dump it into your system at night if you live in San Diego and they want $0.40 a kilowatt-hour for it. And a grid-tied battery is one thing hanging on your garage wall and then one hookup. You can do 2 of them a day. So batteries are sort of an afterburner for us because to that $32,000, you add another $10,000 for a battery. It’s $42,000.

Sioban Hickie: Thank you very much. That concludes our call for today. Dr. Rodgers, do you have any final closing remarks?

Thurman Rodgers: Well, yes. I’m embarrassed by that. It is the last event that basically is tied to the string of misfortune we’ve had surrounding the 10-K. I frankly would like to thank our auditors for — you realize they bulked up from 10 to 17 people, just to — I created the memo machine and started machine-gunning them with answers. They bulked up from 10 to 17 people and stayed with us until we tied it up. Now I’m going to have 3 perfect quarters restated by next week, and I’ve got the year of the 10-K done. And going forward, I now know, as you’ve seen today, the details of how that happened, and it’s an interesting problem to manage that. And I’ve started to realize the reason there are so few install companies that are public is, being in solar and the vagaries of having your stuff spread all over the United States, as opposed to in a nice controlled factory, being in solar, the accounting for a public company are not incompatible, but it’s difficult.

And one of the things I’m going to do is make our accounting a weapon that’s cheap, efficient, and accurate, so we can focus on the other things. I didn’t talk about our new products. I didn’t talk about our new bifacial panel. We just put it in the boardroom to show the Board last week so that our people can focus on that, not on the [ arrow ] there.

Sioban Hickie: Thank you very much. That concludes our call. You may now disconnect.