SunPower Reports Third Quarter 2021 Results
– Strong third quarter Residential demand with record lead generation.- Growing demand for storage, third quarter storage bookings run rate at $80 million, on track for $100 million run rate by year end.- Reported third quarter financials consistent with previous October 5th business update.- Geographic expansion with Blue Raven brings solar to more homeowners across U.S.
Residential demand remains strong with record lead generation and 14,200 new customers, up 29% versus a year earlier. New homes market accelerated growth with 5,700 new customers in the quarter, more than double when compared to the previous year.
“Our decision to increase our focus on the residential market was validated by strong sequential third quarter solar and storage demand and deployment, combined with continued margin expansion,” said Peter Faricy, CEO of SunPower. “The time is now for homeowners to adopt solar energy and storage, with flexible financing options and favorable clean energy incentives currently under consideration by Congress that make it easier for consumers to help fight against the increasing impact of climate change. Along with our recent acquisition of Blue Raven Solar and new leadership hires, there is a bright future for the next phase of SunPower.”
Making Solar Accessible to All
To meet the goals of a clean energy future in which nearly half of the U.S. is powered by solar, policymakers and corporations must work together to make solar accessible for all customers. With 108 MW of Residential bookings in the quarter, up 36% versus the prior year, the company’s total residential install base has grown to nearly 390,000, not including 20,000 from the recent acquisition of Blue Raven Solar in October. SunPower’s recent efforts to further expand the reach of solar include:
- Geographic expansion into underpenetrated areas including the Northwest and Mid-Atlantic regions with Blue Raven Solar.
- Continued leadership in the new homes market with two new agreements with homebuilders, including a multi-year exclusive agreement with Toll Brothers to provide solar, storage and services to new homes and communities.
- Under SunPower’s ESG program, the company launched the SunPower 25X25 initiatives— spanning workforce diversity, solar access expansion and dealer diversity programs — to ensure the resilience and economic benefits of distributed solar and battery storage serve historically underserved communities.
Widespread Storage Adoption
Amidst increasing power outages and rising energy prices, consumers are increasingly seeking resiliency with battery storage. According to Wood Mackenzie, annual global storage deployments will nearly triple year-over-year. SunPower is meeting increased market demand for storage solutions through both the direct and dealer channels, with dealers ramping up on sales. The company is on track to achieve a $100 million energy storage bookings run rate by the end of 2021 with 27% of solar customers purchasing storage through SunPower’s Direct sales channel.
SunPower was also awarded a $6.65 million grant by the U.S. Department of Energy to participate in its Connected Communities program, working with partners to build two new communities that will compare the benefits of community-level versus residential-level energy storage while providing grid services to the local utility. SunPower will oversee the project and provide energy services technology.
|($ Millions, except percentages and per-share data)||3rd Quarter 2021||2nd Quarter 2021||3rd Quarter 2020|
|GAAP gross margin from continuing operations||18.4%||19.8%||13.5%|
|GAAP net income (loss) from continuing operations||$(84.4)||$75.2||$109.5|
|GAAP net income (loss) from continuing operations per diluted share||$(0.49)||$0.40||$0.57|
|Non-GAAP gross margin1||18.7%||20.6%||14.0%|
|Non-GAAP net income (loss)1||$9.8||$10.4||$(6.5)|
|Non-GAAP net income (loss) from continuing operations per diluted share1||$0.06||$0.06||$(0.04)|
|Information presented for 3rd 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|
“SunPower concludes the third quarter with plans to focus intently on the fast growing and largely untapped U.S. residential market,” said Manavendra Sial, chief financial officer at SunPower. “As we head into the fourth quarter and 2022, we are seeing exceptional performance in lead generation and new customer bookings for residential solar and storage. Commercial & Industrial Solutions (CIS) business also had strong bookings for the third quarter. Our cash position is strong, and there is potential to further reduce our cost of capital. The strength of our balance sheet will also enable us to look toward new product and digital investment, leading to continued growth and market share expansion.”
SunPower reported, in line with the company’s October 5th update, an Adjusted EBITDA of $17.5 million for this quarter including $(8) million from the CIS segment and a net loss of $84.4 million primarily driven by the non-cash mark-to-market adjustment of the company’s holdings of Enphase shares. The company is considering strategic options for CIS and will provide an update in the fourth quarter of 2021.
Other quarter highlights include:
- Recognized 121 MW, including 92 MW for residential. The pipeline for new homes systems is robust with visibility toward an incremental 58,000 homes (up to 230 MW), including multi-family housing.
- Residential gross margin was at $0.69/w for the third quarter, up 50% compared to prior year.
Third quarter non-GAAP results exclude net adjustments that, in the aggregate, increased GAAP loss by $94 million, resulting from $86 million related to a mark-to-market loss on equity investments, $5 million related to stock-based compensation expense, and $3 million related to other non-recurring items.
To provide additional clarity to investors, the company has provided separate guidance for CIS and Legacy business segments for the fourth quarter of 2021.
Fourth quarter GAAP revenue guidance for SunPower, excluding CIS and Legacy business, is $330 to $380 million and Adjusted EBITDA guidance is $28 to $46 million. Separately for CIS and Legacy business, fourth quarter revenue guidance is $31 to $41 million and Adjusted EBITDA guidance is $(10) to $(5) million due to project schedules and supply chain impacts, similar to that experienced in the third quarter. Fourth quarter GAAP net income guidance, which includes all segments, is $(5) to $15 million.
For the Full Year 2021, revenue and Adjusted EBITDA guidance for SunPower, including CIS and Legacy business, is below the prior guidance of $1,410 to $1,490 and $110 to $130 million, respectively, primarily due to CIS project schedule delays impacting both revenue and Adjusted EBITDA and lower revenues from Light Commercial.
SunPower’s residential business continues to be strong, and the company expects 345 to 375 MW recognized for the full year 2021, with 55,000 to 60,000 new residential customers and expects to exit 2021 at >$0.70/w gross margin run rate, consistent with prior guidance.
Given strong residential demand, the company’s color on Full Year 2022 Adjusted EBITDA growth for SunPower excluding CIS and Legacy business remains consistent with the October 5th update, including plans for incremental investment in operating expense.
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