SunPower to Report Second Quarter 2021 Results
SunPower Corp. , a leading solar technology and energy services provider, announced financial results for its second quarter ended July 4, 2021.
“Consumer demand for better, more resilient energy is increasing and with more than 100 million homes in the U.S. that could benefit from solar and storage, we see a significant opportunity to meet that demand,” said Peter Faricy, CEO of SunPower. “To lead in customer adoption and growth we are focused on delivering world class customer experiences and continuing to invest in strategic priorities that will make solar easy, reliable and affordable. We believe this long-term strategic approach will position SunPower as a leader as the market continues to expand.”
“Our solid second quarter results reflect continued execution in both our residential and commercial businesses as year over year megawatts grew 40 percent and we doubled our gross margin per watt,” said Faricy. “We also made material progress on a number of our key initiatives to expand our addressable market during the quarter including increasing our dealer footprint, expanding our financial platform to include loan servicing as well as announcing our strategic alliance with leading EV solutions provider Wallbox. This alliance will enable us to offer our residential customers a simple and cost effective integrated solar, storage and EV solution that will lower overall energy costs while reducing strain on the grid. Looking forward, we remain on track to achieve our 2021 financial outlook and are well positioned to drive growth and profitability in 2022 and beyond.”
Residential and Light Commercial (RLC)
- Residential strength – 23 percent gross margin, up 160 basis points sequentially, $28 million Adjusted EBITDA
- Added 13,000 customers – residential bookings up 16 percent sequentially, 67 percent year-over-year (YoY)
- Continued progress in converting residential mix to more full systems sales (>55 percent in Q221)
- EV business alliance with Wallbox expected to expand addressable market by $15 billion
Commercial and Industrial Solutions (CIS)
- YoY megawatts (MW) growth of ~30 percent, 1 gigawatt installed base, backlog above 260MW
- Strong bookings momentum – up more than 20 percent YoY
- Helix storage – >20 MWh Front of the Meter (FTM) storage under contract, >500 MWh pipeline
- Continued momentum in community solar – more than 150 MW of pipeline, added >35 MW in Q221
|($ Millions, except percentages and per-share data)||2nd Quarter 2021||1st Quarter 2021||2nd Quarter 2020|
|GAAP gross margin from continuing operations||19.8%||16.3%||11.8%|
|GAAP net income (loss) from continuing operations||$75.2||$(48.4)||$55.9|
|GAAP net income (loss) from continuing operations per diluted share||$0.40||$(0.28)||$0.31|
|Non-GAAP gross margin1||20.6%||18.7%||12.6%|
|Non-GAAP net income (loss)1||$10.4||$9.3||$(17.2)|
|Non-GAAP net income (loss) from continuing operations per diluted share1||$0.06||$0.05||$(0.10)|
|Information presented for 2nd quarter 2020 above is for continuing operations only, and excludes results of Maxeon, other than Cash.|
|1Information about SunPower’s use of non-GAAP financial information, including a reconciliation to U.S. GAAP, is provided under “Use of Non-GAAP Financial Measures” below|
|2Includes cash and cash equivalents, excluding restricted cash|
The company continued to see strength in its RLC segment during the second quarter, driven primarily by its residential and new homes businesses as MW recognized for those businesses rose more than 50 percent YoY. SunPower added 13,000 new customers during the quarter, bringing its total residential install base to more than 376,000. Additionally, it grew its single and multi-family new homes backlog by 10 percent sequentially to more than 220 MW. Demand also remains high for the company’s SunVault™ residential storage solution with strong bookings momentum continuing in the second quarter and attach rates of 23 percent in its direct sales channel. The company expects SunVault growth to accelerate in the second half of the year given that lead times have returned to normal as well the successful relaunch of SunVault with its growing dealer base starting in June.
Residential gross margin for the quarter was 23 percent, up 160 basis points sequentially and more than 600 basis points YoY. The increase was primarily driven by a lower cost of capital, supply chain initiatives and the continuing conversion in mix from component sales to higher margin full system sales which totaled more than 55 percent of residential installations for the quarter.
The company’s CIS second quarter performance reflected solid execution as MW recognized rose approximately 30 percent YoY bringing its total installed base to 1 gigawatt. CIS also maintained its leading market share during the quarter as it increased its backlog by 20 percent YoY and finalized an agreement with California Resources Corporation to develop up to 45MW of Behind-the-Meter (BTM) solar projects. Demand for its Helix® BTM storage solution remained high as the company now has more than 35MWh installed and a pipeline in excess of 230MWh.
Additionally, the company is seeing continued success in its FTM storage initiatives with more than 20 MWh currently under contract and a pipeline of greater than 500 MWh. The company continues to make progress on its community solar initiatives as its pipeline is now more than 150MW. Given this success, SunPower believes that its CIS business is well positioned to capitalize on the increased demand for its commercial storage and services offerings as customers continue to look for solutions to address their resiliency and cost savings needs.
“Overall, we were pleased with our execution for the quarter as we saw sequential improvement in both gross margin and Adjusted EBITDA,” said Manavendra Sial, chief financial officer at SunPower. “We generated positive cash flow at the business unit level as well as further improved our balance sheet with retirement of our outstanding 2021 convertible notes in June. Finally, we continued to make progress on our goal to lower our cost of capital to 5.5 percent while continuing to invest in our digital and product initiatives to reduce our customer acquisition costs. Given our second quarter success confidence in our supply chain and execution on our strategic priorities, we remain confident in our ability to capitalize on our growth opportunities.”
Second quarter of fiscal year 2021 non-GAAP results exclude net adjustments that, in the aggregate, increased GAAP income by $65 million, resulting from $84 million related to a mark-to-market gain on equity investments, $1 million gain on sale and impairment of residential lease assets. This was partially offset by $2 million related to results of operations of legacy business exited, $10 million related to stock-based compensation expense, $4 million related to litigation costs, $1 million related to restructuring charges, $1 million related to business reorganization costs, and $2 million for income taxes and other non-recurring items.
For the third quarter, the company expects sequential volume and margin improvements in its residential business with volume expected to grow more than 40 percent versus the prior year.
Specifically, the company expects third quarter GAAP revenue of $325 to $375 million, GAAP net loss of $10 to $0 million and MW recognized of 125 MW to 150 MW. Third quarter Adjusted EBITDA will be in the range of $21 to $31 million as linearity has significantly improved compared to the previous two years.
For fiscal year 2021, the company expects GAAP revenue of $1.41 to $1.49 billion, GAAP net income of $40 to $60 million and MW recognized of 540 MW to 610 MW. Residential MW recognized are expected to be in the range of 340MW to 380MW.
For fiscal year 2021, the company’s full year Adjusted EBITDA guidance remains unchanged at $110 to $130 million inclusive of up to $10 million incremental spend on customer experience and digital initiatives that will further accelerate the growth of SunPower’s residential business in 2022 and beyond. Third quarter and total year 2021 MW recognized and revenue guidance includes the impact of CIS project timing and increasing investment in new residential growth initiatives compared to its light commercial business.
Source: SunPower Corp.
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