SunPower (SPWR) Q1 2026 Earnings Transcript

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DATE

Tuesday, May 12, 2026 at 1 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer & Interim Principal Financial Officer — Thurman John Rodgers
• Board Member — Bernard Gutman
• Sales & Marketing Lead — Dan McCranie

TAKEAWAYS

• Revenue -- $72.8 million, 9% below prior guidance of $80 million, reflecting weaker market conditions than anticipated.
• Non-GAAP Operating Income -- $(12.9) million loss; negatively impacted by $9.9 million in additional spending recognized as a "one time event."
• Headcount Actions -- Workforce reduced by 115 positions after prior quarter’s hiring of 86, with cuts focused on overhead and redundancies.
• Cost Reduction -- Operating expense lowered by $9.9 million per quarter, effective for two-thirds of the upcoming calendar quarter due to timing of actions.
• Cash Position -- $41 million raised; proceeds used to pay off debt, maintaining approximately $10 million in working cash.
• Calendar Q2 2026 Outlook -- Revenue guidance set at $75 million (up $3 million from the current period), with projected operating loss improvement to $(3) million.
• Calendar Q3 2026 Guidance -- Management projects revenue "at least $96 million," stating profitability and positive cash flow will be achieved, with bookings indicating potential for up to $130 million in revenue.
• Bookings -- Achieved a record 4,450 bookings in the quarter; average selling price per installation is $32,000 and rising due to increased battery attachment.
• Lead-To-Revenue Cycle -- Median time from booking to revenue recognition is approximately two months, with a range of 35 to 115 days depending on complexity.
• Restatements & Audit -- Three quarters of financials to be restated due to audit findings, primarily from prior double bookings and balance sheet asset adjustments.
• Historical Financials Restated -- Fiscal 2025 audited revenue revised to $300 million (from $308 million previously reported); Non-GAAP operating income for the year adjusted from $10.9 million to $7.33 million.
• CFO Change -- CFO resignation accepted; Thurman John Rodgers serves as interim principal financial officer, with Bernard Gutman joining the board and audit committee.
• Breakeven Metrics -- Operating income breakeven revenue is currently $76 million; cash flow breakeven revenue is $96 million.
• Salesforce Composition -- 1,550 outside sales reps generate 90% of revenue, with group strengthened by acquisitions (Sunder, Ambia) and reduced reliance on lower-margin call center sales.
• Battery Attachment Impact -- Battery add-on lifts average selling price by $10,000 per installation and yields higher profit margins, especially for grid-tied battery projects.

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RISKS

• Three quarterly financial restatements required due to accounting control deficiencies and historical system errors, as explicitly acknowledged by management.
• Ongoing operating losses and market softness, with calendar Q2 guidance still projecting a loss despite cost reductions.
• Company-wide 4-day workweek and workforce cuts reflect need to manage cash and reduce spending amidst challenging market conditions.
• Salesforce volatility and morale concerns cited by management, with risks stemming from turnover and industry rumors affecting stability.

SUMMARY

SunPower (NASDAQ:SPWR) reported a 9% revenue shortfall, significant non-GAAP operating loss, and pronounced cost actions, while management emphasized expected calendar Q3 profitability and robust bookings momentum. The company announced imminent financial restatements and oversight changes in response to audit-driven findings, highlighting a renewed focus on financial controls and board expertise. Revised sales and operational structures, including a substantial shift to outside sales, are described as key levers for achieving targeted breakeven thresholds and fueling accelerated growth from new acquisitions.

• Management specifically attributes booked backlog strength to the integration of acquired sales platforms, notably Sunder and Ambia, which now drive the majority of incoming business.
• The average selling price per installation is anticipated to continue rising as battery attachment rates increase, particularly in higher-margin markets like California and Texas.
• CEO Rodgers directly addresses audit compliance, measures to remediate Sarbanes-Oxley weaknesses, and new board-level quality control processes intended to prevent future restatements.
• Staffing controls, including a hard cap at 700 personnel and dynamic hiring/layoff strategies, are being executed to preserve flexibility while preparing for anticipated demand increases.

INDUSTRY GLOSSARY

• Bookings: Firm contracts that have completed home design and funding approval, indicating near-term revenue conversion.
• TPO (Third Party Ownership): Financing structure where a funder owns and pays for the solar system, allowing homeowners to use the system as a service or pseudo-utility.
• Grid-Tied Battery: An energy storage system connected to the electrical grid, primarily used to store daytime solar energy for use during peak rate periods, increasing economic returns for customers.
• Restatement: The revision of previously issued financial statements to correct errors, reflecting audit-required adjustments.

Full Conference Call Transcript

Thurman John Rodgers: Good morning. We have got the Q1 26 results to show you this morning. And answer questions. First, the top lines 2020 Q1 26 revenue, 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 for a million 8. But our non GAAP operating income was minus 12.9 million. And that is a 1 time 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 turned it around You have gone from plus 86 to -115. And our cash was flat We raised we raised 40 million 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 May, we have cut our cost $9.9 million a quarter. That included RIFed employees, 115. We went from 86 hires to a 115 RIFs. We installed an across the board 4-day work week through September.

The theory on a 4 day weekend comes from my prior life in semiconductors. it is 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 work week. What that means is work 4 days a week, you get paid for 4 days a week. Another way to look at that is a 25 or excuse me, a 20% pay cut.

But when you come out of it, you start working another day. The people you have got remain in place. And you have you have less of a arduous climb back So that was the theory on the 4-day work week. We have cut our inside sales group. We had a large call center We have 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 Salesforce, which has now grown 1.55 thousand members. And that represents 90% of our revenue. And the inside sales group was 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 top producers. We have 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 a contract or employee that we needed without restriction. Now we brought that back down. You have seen this graph pretty much all the time. it is my proxies. it is actually the way I run the company. it is a metric I can understand and people can understand. We actually run it on dollars. But I reported on head count.

So if you go back to pre-merger, there were 3.5 thousand SunPower and complete solar people We picked 1.28 thousand of them to start the company. Year ago, Q4 was our first quarter. And then we successively dropped that target time. We have been in a period where the target's been 28, which is very lean. And we bounce up and down around 28 as we acquire companies who will bring in a 100 people. From over a 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 have dropped our target to 700. We think that is doable.

And we are currently at 10. 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 is 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 is up 3 million from last quarter, but still anemic and the market is still anemic But we are starting with our 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 are going to have a reasonable quarter, but a loss. This quarter. And finally, a early forecast ahead more than 1 quarter, But in Q3, we believe our we are gonna be a-- we are going to beat 96 million. I will explain that in a little while. And at 96 million in that quarter, we will be profitable and cash flow positive. So we are going through a weak, but mildly weak quarter on our way to a plane we have had all year. That plane is shown here.

This particular version of the plan is the 1 we used to raise money. We raised $41 million during the we raised $41 million in the last quarter. Here you see revenue all the way through for 3 years. The guidance meaning that is what I am telling you and I am planning and achieving and expect to be criticized if I do not meet it. Guidance. And then out here is a model. Our billion dollar-- Our mission statement is to have billion dollars in revenue. And that run rate will be achieved in 2028. So that is still on target. We are still talking about a big jump in revenue in 2026.

And you can see that this is the nontrivial gap here. As we have shown and put on the website, it is because our acquisitions Ambia, Thunder, Cobalt, and the recovery of new homes from the bankruptcy. They are all kicking in. And that is 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 have done careful calculations Our current breakeven revenue, Op Inc.

Breakeven revenue, 76 million and our current cash flow breakeven revenue is $96 million So this 20 extra million times the various yields going through the P and L is what is required to pay for the debt that we have got. And we still are anticipating big growth in Q3. I will let Dan McCranie, he is here he is running sales and marketing for us right now on a daily basis. I will let him talk about that later. As a matter of fact, I will let him talk about it now.

John McCranie: Hey. Thanks, TJ. Can I get the graph up, please? Thanks. This, this graph is total bookings beginning in Q4 24 going on through 2026. Just a brief word of 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 is a robust high yielding bookings. that is what we use for our forecast methodology. Can see in Q4 24 all the way through Q3 at 2025, the numbers were hovering around 1.5 thousand to 2.5 thousand jobs a quarter.

You see a step function increase in Q4 25 Remember, we booked we acquired all 3 of our major acquisitions, Sundar, Ambia, and Cobalt, in 2025 beginning in the second half of 24, we started seeing the results of their bookings And you can see over 4 thousand jobs were created in Q4 25. In Q1 26, we had a record of 4.45 thousand jobs. Now remember, there is about a 3-month lag between a booking and revenue. This particular industry. So what we are booking for in Q2 now is beginning now is for the first stages of our Q3 revenue plan.

TJ showed you that we have a very robust Q3 numbers to step function up from about $75 million to a $130 million TJ told you we guarantee at least 96 and above that. We are currently on track in Q2 with the bookings we have got so far across all departments to meet that $130 million number. We are happy with the way the bookings are going, it is a it is predominantly the Sunder and Ambia turn on. This occurring particularly in the springtime.

When, when the contracts gets get much larger compared to the winter, So going forward in Q2 26, your course are gonna have a record in bookings, and we think we are gonna have a record in bookings that allow us to do revenue in Q3 well in excess of t j's $96 million.

Thurman John Rodgers: Dan 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 is laying on the floor. We will call people to kind of recover him. I wanna make 1 other point here. These jobs I do not deal with solar back solar backlog is like oatmeal. it is just not firm You cannot tell what it where you are at. So we have a definition that the company means you have a signed contract that is the guy signed up to begin with, then you designed his home for him.

And you showed him the contract you showed him pictures and went again. And he signed up on that. And then you told him, the funding was approved, We have 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 gonna pay for the house and the solar installation in his house will be part of a pseudo utility later on for that funder. Funder. Okay. So I this is really good news. And normally, if I were not talking about a $12 million loss, I would be bragging about this and talking about big things in the future, and I still feel that way.

Oh. Something's yeah. what is wrong is what we changed. Voice sitting here looking at a-- 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 the computer with things I forgot, like our new CFO. A new boardman. I put it in my briefcase. I could tell you that I had planned this in advance, but that would not be true. Alright. Now you go to PowerPoint. Eric is in sync. Give it-- I will give you the first page right now. Okay. That 1 I gave you. Nope. Convertible note offering.

I talked about bookings are record. We talked about we saw the detail. We filed our 10 k. And it was a difficult audit. And I will I am going to talk about that audit and what happened. And the audit required restatements, 3 restatements, 3 quarters of restatements, and they are gonna happen on time. That means within the next week. Here's the p and l. In Q4, 2025, the last quarter, we did $90 million in revenue with $3 million in profit. But note 4 says we restated 10 Q results consistent with adjustments in the 2025 10-Ks. So we have got a 10 ks that is God's word. that is 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 will tell you why. The next quarter, $172 million 12 million loss. And if you ask why the loss, it is right here. Operating expense going up dramatically For the reason I already said. We are getting ready for Q3. Now we are gonna get ready for Q3, but we are gonna 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 is what I told you last year in meetings like this 1. So we were profitable in every quarter, minimally profitable in every quarter. And our OpInc non GAAP OpInc 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 OpInc for the quarter total op ink for the quarter 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 and I will explain that in a minute. there is 1 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 they 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 in the 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 are not allowed you are not allowed to acquire something and then have more than your average gross margin reported for it. So in this case, our report the actual cash gross margin was 80% and that means we made more money according to GAP than I reported. Okay. So old, new, and I will just point out 1 thing. This is a new source of truth.

So when I talk about record profit in the future, it will be because we are above 4.85, not above 3.5. When I talk about record revenue, it will be because we are above 91 million. Dollars. So I will 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 the more believable scenario from a businessman's point of view, The answer is this 1 right here. This includes a lot of put this in that quarter, put that in that quarter, it is on your books. We have gotta 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 when I-- this is our base. The good thing about it is for this amount of revenue and this amount of profit, know I have fully audited quarterly results where 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 wanna talk about the audit for a minute. 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 1. 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 send 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, everything we bought to work on the house. They want the work logs. What crew went to what house when? They want the customer invoices. We build 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 account 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 then that involves typically getting a utility bill and showing them that there is been a change in the bill based on the solar. So it is an arduous task of the audit, the 10-K audit. And there is only 1 audit a year that matters. it is 10 k, and that is the entire year.

And then the quarters are unaudited till the end, and that is 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 and each of our 11.5 thousand jobs in 25. You had you multiply those numbers, you get over a 100 thousand 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, improve it, and document it.

And the sampling in this year required 300-- it had led to 390 formal requests. 390 times our auditors said we need this or we need that. And by the way, I am not making an excuse here. Our accounting is not where it ought to be. I will tell you in a minute. The head accounting guy is now T.J. Rogers. he is not used to this kind of accounting and will 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's audited number for 2025 revenue is 300 million versus what we stated was $308. And we went back 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 legacy company, Blue Raven, which does not exist anymore, from a defunct computing system, Albatross, which does not exist anymore, and somebody way back when, we are talking now probably Q4, of the prior year, booked jobs twice. And they came into our books. And we did not start we did not start selling the things we acquired from SunPower until midyear and then we did not really start looking through what we inherited.

Until the end of the year for the 10 k audit. Which, by the way, I do not consider to be a noise. I consider it to be something that gives credibility to the company. And that is why we are complete. We are working hard on it, and I will show you what we have done. Okay. On the income side, operating income, and I always use operating income rather than EBITDA, which I do not like. Are prior statement was 10.9 million The new the new number was 7.3 million. The difference that was due primarily to pre acquisition balance sheet assets I told you And using actual gross margin instead of a calculated gross margin.

However, I will show you this. I will show you. Nick having memorized this thing. So these are the quarters that came from these quarters. This is the yearly total, and it is really the only part of the 10 k. These things exist only because of the requirement to do Restated 10 q. These differences are big. Obviously, it went from a loss from profit to a loss in quarter. And that is when the auditor said, we have to restate And we are doing that. And we have actually already done it. We already have agreement on the numbers. there is 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 2025 through Q3 2020. I stand for financial integrity. I go and this is an accounting term, apeshit. When I do not see numbers that are perfectly right and believable. And I have always been that way. And this is the first and I have been doing this stuff for 40 years. This is the first time I have 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? To that you did not know about? And when you are bragging about it, I have never had a restatement in my career. Is it really true? So I went on AI. Did Cypress Semiconductor ever restate a quarter? Let me start over here. I did it 4x. I have shown 2 of the 4. I changed the question because the answers changed. And I wanted to get a good look at it.

Based on available search results, there is no direct indication of Cyprus Semiconductor ever formally restated a quarterly report. The provided information shows that 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, lowered guidance. They lowered earnings and revenue targets. Such as September 2004 The adjusted results They reported GAAP versus non GAAP results in 2016 and 2017 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 1 second because it is got a little kudos for me in there.

And it says, the company particularly under long time CEO TJ Rogers, 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 have changed. Now this first statement, we have received and accepted the resignation of CFO. I am not blaming this on our CFO. it is my fault. TJ Roger's fault. That simple. I run the company. And if it is not perfect, it is my fault. But our CFO we are changing CFOs. Basically, it is a mutual agreement to part ways.

And we have 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 is what you get called if you are not really an accountant. But you run the finances for approximately a month. We are in the process of closing new CFO and I will be the principal financial officer for months, and I guarantee you I go to 2 meetings a day on finances. And although I am not an accountant, I can read stuff and I can understand what is right and what is wrong based on all my experience.

The board has appointed Bernard Gutman 8 years to CFO of the $42 billion chip company on semiconductor, to the Board and to serve on our audit committee. So we have we have made changes on our board to bolster our board. I want to introduce Bernard right now. Yeah, Signed up last week, and he was at his first board meeting last week. So we are not let me tell a story about Bernard. Let's-- are you showing his picture now?? Alright. You guys should be able to see Bernard now. I met Bernard. We are at Enovix right now. that is my free TV studio. So I do not have to do something at some par.

And Bernard is on the Enovix board, the battery company. And I have noted, I sit right across from him in the board meetings. he is extraordinarily meticulous. Walks out unlike me, he is got almost perfect handwriting. And he walks out with 3 pages of single line item notes every time. We have had zero problems at Inovix. So I have now 2 validations. My old company and Inovix that the ship can get run right, and you should not have things like restatements. it is 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. He had no restatements for 30 years. And he wanted to retire truly, a lot of grandkids, all that stuff. So we said, you cannot do it. And he said, I have got a guy who is 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 have ever met.

And with that little anecdote, I would like to introduce Bernard have him tell you a little bit about himself, and what he saw at the first board meeting if he is up for it. Bernard. Thank you, TJ, for these kind words. I am very excited to join the SunPower board as DJ 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 EJ talked about from the finance point of view. A little bit of a challenge in the short run. But I am 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 it this does not reoccur The from the business point of view, and, again, I will be careful not to get the lawyers and other 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 thousand bookings that are predicting some pretty good stuff to go in the future. Go beyond just the breakeven, but into the moving towards the $1 billion opportunity that TJ talked about So that by itself, business wise, is quite exciting.

Quickly from my background, I am a 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 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. To all kinds of activities, including debt financings, including audits, including operational stuff, So my background is quite adept for helping TJ and the board in this in this upcoming challenge. So I am ready for it. Thank you, TJ.

I will give away 1 little secret when Bernard accepted. He said, it is a really interesting company, comma, but the pay sucks. So Bernard is like me. he is doing something that is interesting to him. Okay. What has changed? The SunPower team responsible for implementing Sarbanes-Oxley the counting procedures, that if we had that in place right now, we would not be talking about this topic. Now reports, we have changed the line of command through the quality vice president, Surinder Bedi, directly to the chairman of our audit committee.

So the people who had been sucked into the hub above the audit, working on socks are going back to work on socks only The chairman of our audit committee is Ron Pasek. he is 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. And then 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, wish I had 4 CEOs and 4 CFOs. But we have we have made a big step forward here.

All SunPower responses to audit questions so the 390, are in our formal documents as opposed to telephone calls between us and the auditors, formal documents that are pre reviewed 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 do not follow it, they reject your response, and it does not go to the auditor. They understand they cannot be slow. So they typically deliver onto our auditors in less than get 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 had not turned on this process.

And it will it will that is the way we are gonna work forever. We bolstered our finance team. We needed to do more. With people from operations and quality. I am talking about 10 ish from either both groups. Because the finance guys, and the reason I am not casting aspersion on any of them, we are getting questions that were beyond the scope. I mean, date. Very common result in solar is the guy owes you money. You call him up, he does not answer. You call him up, he does not answer. Call him up, he does not answer. Then you find out he does not live there anymore. Then his financing expires.

So you cannot get the last payment. And then you have to get permission from the new owners to get in the house if there is something wrong, you gotta work on it. And all you have to do is have something like 500 to a thousand 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 are putting together a team to respond to those questions and preempt them in the future.

Creating processes such that nothing happens that is not pre audited in our own company. Okay. Then I gave you this 1. And this 1. And this 1. So we have done our cuts. They will 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 is on our couple websites and said, we are going to make this jump. it is real. 1 of the reasons you have been hearing about Sunder for a while I will just make this 1 point, Sundar is a sales company.

Sunder manages 1.5 thousand reps with a 100 or so internal people. And their product is a signed contract, 1 of those contracts with all of the parts that I said earlier. And they therefore have sold their product and it is gone. There is no pipeline inside of Sunder is really the point. They-- so when you buy them, you buy a machine that creates orders, and you do not start collecting orders in your own pipeline until after they are signed up. And that is why it is taken a while to fill up the pipeline. Same is true for new homes.

Where we have gotten a lot of orders for new homes, but that pipeline was dumped actually before we took over. 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 you can write these numbers down and do your incremental calculations on them. where we get profitable and where we get positive profitable and positive cash flow. Dan talked about the business. Now I am ready for questions. I apologize for the mix-up. I am sitting here thinking, how could that possibly happen?

And the answer is we mailed a few of my slides, you know, not the final slides. I worked on them last night. emailed here. And those slides we used to bring up to protection system and everything. They were not intended to be the report, but that is what I ended up showing you. Apologies for that. Questions?

Operator: Thank you. Our first question today comes from Derek Soderberg at Cantor Fitzgerald. Derek, you may go ahead.

Analyst (Derek Soderberg): Yeah. Good morning, everyone. And, TJ, I appreciate all the detail you provided on the business here. I wanna start with the record bookings number. Specifically, what is the average revenue per job in the current mix, and what sort of assumed well, what is the assumed conversion timeline from booking to recognized revenue? And then I have got a follow-up.

Thurman John Rodgers: Hey, Derek. Average selling price right now is about $32 thousand per installation. Just as an aside, that is going up as more and more of the installations have battery attached. Battery attached is big as you know in California where it is almost a 100% battery attached. We are getting very strong in California. And about 45% in Texas. So ASP is $32 thousand and climbing through the year. Your next question involved, I think, the cycle time associated, the time between a FTC or a hard order and revenue? Is that your question? Yep. Yeah. it is the median right now on that is right around 2 months, 2+ months.

It ranges anywhere from a low of about 35 days to a high of about a hundred and 15 days depending upon the con complexity of the roof install. So we use as a general rule of thumb about 90 days So if you see our bookings up in Q2, just track about 1 quarter forward and you should see the grand bulk of that revenue. And then the corollary of that is in the fourth quarter, when things start to slow down, you have got a bunch of bookings. And that 90 days worth of bookings comes from Q3 to Q4.

Then he hit January, and we are we are still promising to come out of the January, February, March malaise and we can see it.

Analyst (Derek Soderberg): Got it, that is helpful. And then TJ, we are we are seeing some other solar companies over the past 6 months or so. Specifically, you know, a big residential installer, you know, filing chapter 11. Can you talk about that dynamic a bit? What you are seeing out there and you guys benefiting yet from survivorship? Thanks.

Thurman John Rodgers: Benefiting from survivorship. Okay. So yes, we are seeing bankruptcies, the big surprise and is public. Was freedom forever. They are bigger than us. So therefore, they should be more robust than us in terms of hard times. I have we benefited from getting some of their salespeople, not a lot. We have already acquired 3 other sales forces to bring us up to over 1.5 thousand I do not wanna say the other area where we acquired because I do not want the other guys to know about that. But we have gotten we are 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 a administrative function go away. Because we got a we got a 700 person limit in the company. what is bad is you would like to say we are benefiting from the malaise in the industry right now. what is bad is you had we had to lay off some people and not good. Screws up morale. Gives you gives you reset. Also, your salesforces are 1.1 thousands and what that means is they run independent companies that you do not control They do not work for you.

And they can disappear whenever they want, and they often disappear anonymously. And you find out later when nobody's answering the phone why. So it creates unrest in Salesforce. And we are working on that right now because a lot of our salespeople are new. And they are coming in, man, I thought I thought I escaped SunPower's bragging about record this, record that. I thought I escaped, and now I am watching And there were some minor things on the Internet. Minor. SunPower stopped buying what do you call them? Leads. Leads. Stop buying leads. Yeah. Right. Because the group that used them cut way back. Because that group was not effective as our main sales force.

But some parts stop buying leads, and, of course, that is interpretive as imminent bankruptcy and it feeds the frenzy. Solar industry is 1 of rumors almost always unfounded. it is 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 hire down. But picking and choosing has gotten us some top talent. that is why I think you are gonna see a extremely strong Q2 bookings. Got it. Super helpful.

Sioban Genevieve Hickie: Thanks, guys. Thank you, Derek.

Operator: Our next question today comes from Gus Richard from Northland Capital Markets. Please go ahead.

Analyst (Auguste Richard): Yes. Thanks for taking my questions. Just curious on the bookings in the quarter. I am assuming those are all installs. How many of those were you know, converted from Sunder sales?

Operator: Make sure you understand your question, Gus.

Thurman John Rodgers: So you are asking how many of those bookings-- so the first question is I guess first part is those bookings are installs. Correct? Correct. Yes. And then of those installs, you know, some of the some of them I am assuming came from Sundar sales. Correct. I was just curious how many of the Sundar sales got converted into installs. Let me take it. Well, the answer is these are the ones being installed now. Sundar is difficult to say No. it is not. Actually a prepared-- I will show you the slide. Probably regret it later. There it is. Okay. So this is our 99 head count. Number of salesman. This is old SunPower.

These guys sold loans, not TPOs, to people in Midwest who wanted a 5 year loan to put on solar. And they are to me, it is pretty simple. The TPO pitch is actually more attractive to an individual. But this group essentially 3 quarters of them have gone away. Then we picked up Sunder, this 1 you are talking about, and we still have 713 of the 900 people we had there. We picked up Ambia, that is another 300. And we picked up a company we have not talked about publicly because we just hired them is Purolite. And this is another company that got in trouble, and they have got an excellent salesforce.

So right now, we have got a rejuvenated sales force that specializes in third party ownership sales and lucky we did. So how many are Sunder? About half. Direct old 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 have 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 that there is 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 a different sell to corporate to corporate customers. it is a very small sales group that deals with that.

Analyst (Auguste Richard): Got it. And then obviously, in the news is the war in Ukraine. New England, for example, uses LNG to produce energy and it is 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. Know, sort of how much has the change in the energy landscape, if you will, starting to incentivize consumers.

Thurman John Rodgers: that is the biggest driving force. it is you asked all the questions that I put in the appendix to save time. This is solar energy additions to the grid. We are now talking about utility scale solar. there is no oil of any kind up here. We have only natural gas is being added today. So first it says here's solar. And it says solar did not matter enough even to be a blip on the graph until 2011. And if you look at the graph growth of solar, it is been spectacular. Here's a bad year. Here's another bad year that lasted for 3 years before we recovered. Solar is not immune to dislocations.

Battery is the second 1. And battery, if you really think about it, batteries in the grid where they take some power source and store it in the battery. there is also batteries on million houses in The United States, and they are the best kind of battery. Because they keep that what they do is they do not 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, market's great.

Wanted to talk about what is what does it mean when the price of utilities go up, that is great. Because our prices are going down, not up. There may be a glitch due to some 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 have become truly economically competitive. I am not-- I do not run around talking green this, green that. I run around talking about you pay me so much a month your bill will go down by more than that per month for the rest of your life. What do you think? K. And then let me see.

By the way, I will not 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 start we started reacting right there. And if we had not done that, we would not be in the shape we are in right now to react as crisis. Let me let me leave it there.

If somebody asked me another question, I would love to show you that graph, but I would I would rather take questions. Go ahead. On set. Thanks.

Operator: Thank you, Gus. We have a couple questions coming in from the web. The first 1 is with the increased bookings that you have discussed what is SunPower doing to ramp up installs to meet this incremental demand?

Thurman John Rodgers: that is a great question. Well, we were we were in the process of hiring 86 people for our install organization to handle all that business. Then I came in 1 day and, you know, I am I am the hotshot from Silicon Valley. And I said, wait a minute. do not hire 86 people. Lay off 115 people. So the market has whipped us around and the 4-day work week I discussed was designed to allow the company flexibility. The reason my graph revenue shows $130 million in Q3.

And I have only guided to 96 because that is cash flow positive and that is 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 am going to call Spencer Jensen. He runs our ops. And I am gonna tell Spencer, he needs to take his new employee training time from his current 4 weeks where I pay salary for 4 weeks and do not get anything, to, like, a 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 am not going to buy it up front. And spend money now on that on that increase come this coming later.

Operator: Thank you. We have a question TJ, to you. Last year in July, you spoke about, potentially, you know, looking to wind down and exit as CEO in about a year which is coming up. And so the question is, would Dr. Rogers like to revise that timeline and reinsure investors of his continued attention and leadership?

Thurman John Rodgers: Well, 1 thing I kind of like is that I am I was retired I was on 6 boards, I was not exactly doing nothing, but I was retired for 6 months. Now I am enjoying being back in the full war mode. So that is 1. 2, I would never leave a mess behind and have them say, Rogers, screwed it up and then took off That will not happen. So the bastards are not gonna win. We are gonna win. And I am going to be there as long as it takes.

Operator: Thank you. We have looks like 1 final question. Regarding battery attachments. What effect do they have on the overall profit margin of our of your sales?

Thurman John Rodgers: Batteries are more profitable than solar. The best job is called a grid tied battery. that is where you do not even back up the house. You 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 40¢ a kilowatt hour for. And a grid tied battery is 1 thing hanging on your garage wall. And then 1 hookup. it is very-- you can do 2 of them a day. So batteries are sort of an afterburner for us.

Because to that $32 thousand add another 10, for a battery. that is 42. Thank you very much.

Operator: That concludes our call for today. Doctor Rogers, do you have any final closing remarks?

Thurman John Rodgers: Well, yeah, I am embarrassed by that. It is the last event that basically is tied to the string of misfortune we have had surrounding the 10-Ks. I frankly would like to thank our auditors for you realize, they bulked up from 10 to 17 people just to do I created the-- 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 am gonna have 3 perfect quarters restated by next week and I have got the year of the 10-K done.

And going forward, I now know, as you have seen today, the details of how that happened, and it is an interesting problem to manage that. And I 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 is difficult. And 1 of the things I am going to do is make our accounting a weapon that is cheap, efficient, and accurate so we can focus on the other things.

I did not talk about our new products. I did not talk about our new bifacial panel. We just put in the boardroom to show the board last week so that our people can focus on that, not on the error there. Thank you very much.

Operator: That concludes our call. You may now disconnect.

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