SunPower Corp. a solar technology and energy services provider, announced financial results for its fourth quarter and fiscal year ended January 3, 2021.
“2020 was a transformational year for SunPower: we successfully completed the spin-off of Maxeon, significantly improved our financial performance and rapidly shifted our sales strategy to meet increasing U.S. demand as consumers and businesses look to generate and store their own energy. Entering 2021, we are continuing to focus our efforts and investment on those markets that offer us strong growth potential — storage and energy services,” said Tom Werner, SunPower CEO and chairman of the board. “We also finished the year with strong execution as we exceeded our GAAP net income and Adjusted EBITDA guidance, expanded our margins, strengthened our balance sheet and generated positive cash flow. Looking forward, with favorable industry tailwinds, increasing demand for our innovative solar solutions and further investment to significantly expand our solar and storage addressable market, we believe we are positioned to accelerate our growth through 2022 and beyond.”
Fourth Quarter Company Highlights
- Strong sequential revenue / margin growth – met or exceeded guidance, $412 million net income, $39 million Adjusted EBITDA
- Further delevered balance sheet – successful convert tender, achieved net debt target ahead of plan
Residential and Light Commercial (RLC)
- Residential strength – 24% gross margin, $36 million Adjusted EBITDA
- Added 13,000 customers, achieved record new homes backlog, rapidly ramping SunVault storage deployments
- Expanded sales channels to increase market access and profitability – continued investment in software and energy services platform, digital and direct sales channel
Commercial and Industrial Solutions (C&I Solutions)
- Strong execution – MW recognized up >65% sequentially, 18% gross margin, $8 million Adjusted EBITDA
- Helix storage – >30% sales attach rate in 2020, backlog of >50MWh, pipeline >750MWh
- Community Solar platform pipeline >90MW
| ($ Millions, except percentages and per-share data) | 4th Quarter 2020 | 3rd Quarter 2020 | 4th Quarter 2019 | Fiscal Year 2020 | Fiscal Year 2019 |
| GAAP revenue | $341.8 | $274.8 | $401.6 | $1,124.8 | $1,092.2 |
| GAAP gross margin from continuing operations | 22.0% | 13.5% | 21.4% | 14.9% | 15.0% |
| GAAP net income from continuing operations | $412.5 | $109.5 | $47.4 | $599.4 | $206.8 |
| GAAP net income (loss) from continuing operations per diluted share | $2.08 | $0.57 | $0.29 | $3.11 | $1.31 |
| Non-GAAP revenue1 | $341.8 | $274.8 | $404.8 | $1,130.0 | $1,220.1 |
| Non-GAAP gross margin1 | 22.3% | 14.0% | 22.5% | 15.7% | 15.4% |
| Non-GAAP net (loss) income1 | $26.6 | $(6.5) | $36.4 | $(12.3) | $(18.4) |
| Non-GAAP net (loss) income from continuing operations per diluted share1 | $0.14 | $(0.04) | $0.23 | $(0.07) | $(0.13) |
| Adjusted EBITDA1 | $38.6 | $8.6 | $56.8 | $40.1 | $58.9 |
| MW Recognized | 153 | 108 | 188 | 483 | 510 |
| Cash2 | $232.8 | $324.7 | $302.0 | $232.8 | $302.0 |
| Information presented above is for continuing operations only, and excludes results of Maxeon for all periods presented. |
| 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 |
RLC
In the fourth quarter, RLC MW recognized increased by 35 percent sequentially due to strong demand across its retrofit, new homes and light commercial businesses. In residential, the company added more than 13,000 new customers, bringing its total installed base to more than 350,000. Gross margin for the quarter was 24%, driven by improved pricing, increasingly better financing economics and a continued mix shift to higher margin loan and lease sales as customers take advantage of SunPower’s new, lower cost financing options. Also, customer demand for resiliency and energy management capabilities continues to drive significant interest in the company’s SunVault residential solar plus storage solution as attach rates exceeded 20% in the fourth quarter. Given this strong demand, the company expects SunVault revenue of $100 million in 2021 and remains very confident in its battery supply chain to meet its forecasts. Finally, the company expanded its leadership in new homes with record backlog in the quarter as its current backlog now exceeds 180 MW with an additional 10 communities booked in the first month of year. As a result of these positive trends, continued investment in its digital and product strategy, as well as its initiatives to expand its addressable market through new sales channels, SunPower expects to see more than 40 percent annual revenue growth in its RLC segment through at least 2022.
C&I Solutions
The company’s C&I Solutions business also performed well in the fourth quarter, maintaining its leading market position as installs rose more than 65 percent sequentially. Solid financial performance was primarily driven by gross margin expansion and strong execution on cost control programs. Demand for the company’s Helix® storage solution also remains high as the company installed 18 MWh during the year as well as signing its first contracts associated with the California ESGIP storage program in the fourth quarter. Additionally, the company continued to expand its community solar pipeline to more than 90MW during the quarter. With a combined backlog and pipeline of more than 800 MWh and sales attach rates of 30%, the company believes C&I is well positioned to capitalize on the increased demand for its commercial storage and services solutions.
Consolidated Financials
“We were pleased with our execution and financial results for the quarter while continuing to aggressively invest in a number of strategic initiatives to rapidly expand our addressable market, including in our storage, digital and services platforms” said Manavendra Sial, SunPower chief financial officer. “We successfully completed our tender offer for our 2021 convertible bonds and our business units generated cash, enabling us to achieve our net debt target ahead of our analyst day forecast. Finally, we continued to make progress on lowering our cost of capital in both our residential loan and lease offerings, driving margin improvement as well as allowing us to maximize customer value.”
Fourth quarter of fiscal year 2020 non-GAAP results exclude net adjustments that, in the aggregate, increased GAAP income by $385.9 million, including $416.5 million related to a mark-to-market gain on equity investments. This was partially offset by $18.7 for income taxes, $6.2 million related to stock-based compensation expense, $3.7 million related to litigation expenses and $2.0 million related to business reorganization costs and other non-recurring items.
Financial Outlook
The company’s first quarter and fiscal year 2021 guidance is as follows:
First quarter GAAP revenue of $270 to $330 million, GAAP net loss of $20 million to $10 million, MW recognized of 115 MW to 145 MW and Adjusted EBITDA in the range of $10 to $20 million.
For fiscal year 2021, given the confidence it has in its business coming into the year, the company expects to meet or exceed its 2021 guidance provided at its Capital Markets Day including revenue growth of approximately 35% and MW recognized growth of approximately 25%.
Given strong industry tailwinds, continued federal policy support as well increased demand for its residential and commercial storage solutions, the company expects 2022 Adjusted EBITDA growth of more than 40%.
