SAN JOSE, Calif. — SunPower, a leading solar technology and energy services provider, today announced financial results for its fourth quarter ended January 2, 2022 in line with the preliminary results shared last month.
As previously disclosed, SunPower took a $27 million supplier-quality charge in fourth quarter 2021. The company is pursuing recovery of costs from the suppliers. The charges are expected to be funded with cash on hand.
Excluding the supplier-quality charge, SunPower reported fourth quarter revenue of a record $385 million, net income of $47 million and Adjusted EBITDA of $19 million. Factors affecting fourth quarter Adjusted EBITDA include approximately $6.5 million of Residential EBITDA effectively pushed into 2022 as the result of weather in California and COVID impacts. Another $3 million was invested in sales and marketing to rapidly expand SunPower’s serviceable solar market to more customers in underpenetrated areas nationally.
SunPower recently announced an agreement to sell its Commercial & Industrial Solutions (CIS) business to TotalEnergies for up to $250 million in cash, including $190 million payable at closing, subject to customary adjustments, and up to $60 million in contingent payments subject to regulatory evolution. The transaction will complete SunPower’s transition to a residential solar company with enhanced strategic focus on accelerating customer growth and expanding products and services to increase customer lifetime value.
“2021 was a pivotal year for SunPower as we charted a new course for the company with an enhanced focus on driving growth in the residential market, and the forward momentum continues into 2022” said Peter Faricy, CEO of SunPower. “Thanks to the strategic acquisition of Blue Raven, the sale of CIS, new executive hires, product innovation and our increased focus on lifetime customer experience, we have never been in a better position to optimize for growth in the year ahead making solar within reach for more homeowners across the nation. I am confident that our clear strategic direction will help create the industry’s best experience for residential customers and deliver long-term value to our shareholders.”
Solidified Strategic Position
With nearly 22,500 residential bookings in the quarter, up 42% versus the prior year, SunPower’s total residential install base reached 427,000 in 2021 with a growing and record-high backlog.
In addition, SunPower further enhanced its strategic position during 2021 by:
- Acquiring Blue Raven Solar and introducing SunPower 25×25 commitments to help reach 100 million homes.
- Launching a financial services institution, SunPower Financial™, to make renewable energy affordable for more American homeowners while enabling SunPower to lower its cost of capital.
- Partnering with Wallbox to be the premier installer of electric vehicle (EV) charging solutions to make the switch to an electric lifestyle more convenient, affordable and sustainable.
- Raising the bar higher for customer experience with an increased focus on monitoring issues, auditing supplier quality, and making corrections before customers even notice, where possible.
- Expanding SunVault battery storage capabilities nationwide – including initiating the roll-out of its Virtual Power Plant (VPP) program — which customers are increasingly demanding to address the impact of power outages and rising energy prices. Ended the year with $130 million in storage bookings run rate.
SunPower also continued to lead the new homes market including an exclusive agreement with The New Home Company to provide solar, battery storage and at-home EV chargers as standard features in its newest California community. New homes segment showed accelerated growth with 8,700 new customers in the quarter, a 50% increase from the previous year, entering 2022 with a potential homebuilder pipeline of a record-high 66,000 customers.
Optimizing for Growth and Innovation
SunPower’s goal is to enable people to power nearly every aspect of their lives — from home appliances to cars – with the sun. At the beginning of 2022, the company made a number of strategic investments and decisions that underscore this effort.
On February 14, SunPower entered into a new supply agreement with Maxeon. The new contract terms allow the company to exit from exclusivity ahead of schedule, providing the opportunity to continue offering Maxeon residential products while exploring additional panel providers. As a part of the negotiation, SunPower and Maxeon terminated their exclusivity agreement for Light Commercial Value-Added Reseller (CVAR) products. SunPower has made the decision to exit this business, reinforcing the company’s strategic direction to serve the consumer market exclusively.
This week, SunPower completed an investment in OhmConnect to help the fast-growing residential VPP provider deliver homeowners a full stack solution for energy savings and management. The investment and subsequent strategic affiliation will introduce new products and services that increase financial value for SunPower’s solar and storage customers and create new opportunities to deepen relationships with them while enabling more grid reliability.
Financial Highlights
| ($ Millions, except percentages and per-share data) | 4th Quarter 2021 | 3rd Quarter 2021 | 4th Quarter 2020 | Fiscal Year 2021 | Fiscal Year 2020 |
| GAAP revenue | $384.5 | $323.6 | $341.8 | $1,323.5 | $1,124.8 |
| GAAP gross margin from continuing operations | 13.3% | 18.4% | 22.0% | 16.7% | 14.9% |
| GAAP net income (loss) from continuing operations | $20.2 | $(84.4) | $412.5 | $(37.4) | $599.4 |
| GAAP net income (loss) from continuing operations per diluted share | $0.11 | $(0.49) | $2.08 | $(0.22) | $3.11 |
| Non-GAAP revenue1 | $384.2 | $322.0 | $337.5 | $1,312.7 | $1,102.9 |
| Non-GAAP gross margin1 | 13.9% | 18.9% | 22.4% | 17.5% | 16.8% |
| Non-GAAP net income (loss)1 | $(12.8) | $10.6 | $26.1 | $12.5 | $(3.7) |
| Non-GAAP net income (loss) from continuing operations per diluted share1 | $(0.07) | $0.06 | $0.14 | $0.07 | $(0.02) |
| Adjusted EBITDA1 | $(7.6) | $18.2 | $37.5 | $46.8 | $46.7 |
| MW Recognized | 154 | 121 | 153 | 527 | 483 |
| Cash2 | $127.1 | $268.6 | $232.8 | $127.1 | $232.8 |
| Information presented for fiscal year 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 |
“As we enter 2022, the underlying fundamentals of our business are strong, with robust top of funnel lead generation and record-high bookings. We are also very pleased with residential gross margins that continued to come in well above 20% in the fourth quarter, reflecting strength in our sales and the trust we’ve built with homeowners,” said Manavendra Sial, chief financial officer at SunPower.
Fourth quarter financial highlights include:
- Accelerating growth with 17,000 customers added in the quarter, growing 31% year over year.
- Healthy Residential gross margins at 25.6%, up 100-basis points from the last year; and,
- Strong balance sheet at $297 million net recourse debt including $127 million unrestricted cash.
Financial Outlook
On a GAAP basis, SunPower is projecting net income of $85 million to $105 million in 2022.
For 2022, SunPower is guiding to Adjusted EBITDA of $90 million to $110 million. Relative to prior color for 2022, the midpoint represents a reduction of approximately $15 million as a result of the plan to exit the Light Commercial business and another $20 million is primarily driven by the updated supply agreement with Maxeon as the company accelerates a shift toward a more diversified customer offering and supply chain. It assumes limited customer price increases during the transition. Residential customer volume is projected to grow by 73,000 to 80,000 customers this year, greater than 35% versus 2021, an acceleration of growth versus 28% for the prior year. Ongoing Residential Adjusted EBITDA before product and digital operating expense is projected at $2,000 to $2,400 per customer, based on the midpoint of projected volume.
Moving forward, SunPower is shifting toward annual guidance for these metrics, with an emphasis on EBITDA generation per customer rather than per watt. This reflects a longer-term view of value creation per customer and the broader industry shift toward the provision of multiple products and services beyond the initial solar system.
Earnings Conference Call Information
The company will host a conference call for investors this afternoon to discuss its fourth quarter and full year 2021 performance at 1:30 p.m. Pacific Time. The call will be webcast and can be accessed from SunPower’s Investor Relations along with supplemental financial information at http://investors.sunpower.com/events.cfm.
