Maxeon Solar Technologies (MAXN) 13 Aug 212021 Q2 Earnings call transcript

Good day, and thank you for standby. Welcome to the Maxeon Solar Technologies’ Second Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder this conference call is being recorded. to Investor call Relations. like Lahey, to now of Head would turn over the Robert I Please ahead. go

Thank you, my Officer, Chief operator. be today second Strategy with quarter are Good Chief and Kai part day, everyone. earnings Maxeon Peter Officer, team. Officer, call. Strohbecke; Welcome of conference Chief this and This With excited Executive Financial is I’m first exceptional call XXXX earnings Aschenbrenner. to to us Maxeon’s Waters; Jeff

the housekeeping few to items a call cover turn over I me Let Jeff. before

As a available of of call later this today page website. a Relations replay reminder, will on be the Maxeon’s Investor

press Presentations documents today’s enhance a those statements. risks slide the the forward-looking factors additional SEC other forward-looking Please also and make statements those XK Relations the see posted have we are and filings. regarding various of that for today’s to affect in described on supplemental subject that these of may release, website. During uncertainties information slide call, Safe page this and that deck will Maxeon’s Harbor are we presentation, Investor today’s call, To Events

deck we few that non-GAAP GAAP which of also will presentation changes well well of press as last want measures certain Relations today’s of the slide our most the directly reconciliations. call. presentation reference I a to a remind as refer the are measure, of the relevant quarter appendix our comparable as numbers. GAAP to in everyone supplemental release, Investor We today’s to both available on earnings for during website of Please non-GAAP as Maxeon’s started

physical forward. our the mark-to-market prepaid EBITDA report we forward value fair excluding First, re-measurement guide adjusted of delivery and and

by compensation and non-GAAP operating report and charges. excluding profit and restructuring we guide gross Second, stock-based expenses non-GAAP expenses

of August XXXX. Waters. XXXX Finally, we to part let the Maxeon’s With Company it on me began turn an results quarter out CEO, while point over to a XX, the was of comparisons still Jeff last operating want as SunPower year. Independent call out second carve reflect of We the to that, Maxeon’s

good overview and covering I’ll Rob, performance by outlook, Q&A. our you, will everyone. with financial giving and and start conclude Thank day, and recent Kai review we’ll then accomplishments. a business

to health. currently some difficult pandemic I cases. have and increasing get Malaysia of we testing Malaysia revealed the is the employee wave number experiencing facility positive on an comments Before proactive of a at our has results, COVID-XX

testing the be of Philippines globally All as including and of report We there are I have pause undergoing proactive therefore we in were this health we’re proud facilities focus Mexico, or continue rates. facilities, line temporarily our positivity priority, global to by and done our on other indications work pleased against the and government clean Maxeon we France, to the employees. with our of pandemic. teams production regulations the highest defend deep material no and safety

position Moving quarter and and of to and drive were second put of the growth second our in half year. us in results with revenue was very productive solid operationally strong in solidify $XXX our quarter that for results, sheet, the to with bookings million line a balance guidance growth push the

Our performed strategy. distributed the for for foundation beyond record Europe generation while laying quarter the business especially well in posting the revenue panel

every and both European beyond be share growth. of especially least believe share that normalized, our Performance of we we which the with business among profitable that driver We the we a XXXX serve significant grow market for growth seeing Italy, We’re in most in will markets. the and us European is many it reasons, profitable our our and is costs revenue France A supply DG strong to in Maxeon not chain grow European key is panel. will that to growth our nearly continue products, believe important we Netherlands. and in

In addition we executed key are flows the posted with our quarterly April, positive balance sheet. key firming out sell on initiatives. up financial second equity We drivers, in raise technology. the to With operating also the oldest to strong, consistent our targets, respect margin we a well posting of operational cash quarter, completed our company results in with successful coupled phase

second our quarter, Maxeon During the cell last we equipment. Maxeon installation solar X commence X of produced and

will X. in deliver Our Maxeon new technology significantly margins higher

from Mexico. This growth schedule X on factory that where than of company. pillars our will The be will customers this we company and first will servicing year. X end with ship on logistics are Maxeon we Malaysia We focused three be from the transform believe and of shift later is rather the strategic network, our our profitable by savings Asian panels coincidence the also European year, for to the optimization

X EBITDA. highlight fab our announcement on the new revenue within to highest than line this being We these greater were Maxeon execution three the extend performance been solidly the X milestones will Maxeon to available for and legacy solar enable of is model That our solar XX least leads. over the Air critical the our steps XX% efficiency, we quarter and progress X growth Maxeon form. today Our X achieve In our Maxeon innovation XX% disruptive took module expected panel manufacturing is with business our this adjusted at panels on development performance will pillars commercially of demonstrate X us intact built in XXXX our pillar, on gross years. margin greater target platform. XX% Maxeon We’ve industry quarter and successful cell and than technology pilot

outstanding commercial consumers more more you on long Performance and both long increasingly will expect later lifetime. panel work how produced locally planet. our output the technologies and thinking about panel efficiency, benefits panels both those and power its Maxeon no As offer Namely, longevity, to for creating the sustain products commercially is close our are They on this In they how hear get their series come about and rooftop. this this and panels safely are sustainability both will can efficient on area, their other more reliably year. to performance educated performance, and residential than

also announced technology, an of commercial alone. Air market light thin Europe X that panel enable worth super rooftops we around our in annual Maxeon of We a believe gigawatts new will super

begin We in Maxeon shipping expect XXXX. to Air

For channel our DG growth pillar, strong we’re seeing broadly.

convey As decade are who a where on and of developed plus and we customers. downstream we to unique sales the partners X,XXX of over the panels built channel These a investment. trust growing and time ability their approach value reminder, technology have on that relationships our our a and industry that brand represent building best have to we’re have

at the strategy. foundation beyond our the sits channel of Our panel

As communicate a and of new the partners technologies position in our are microinverters to like storage. effectively value

remaining deep This are an important. April our to we in AC U.S. position pursue in of areas U.S. to where and developers, publicly the unique many interest early for our line led we a ESG Primergy’s our in value operations, the with XX% of selectively developers have reminder, our to When market, globe. July, focused and led listed reputation capacity focus expansion our the X.X fill corporate With especially of XXXX especially products accelerate second business our our key U.S. the markets Nevada market, company us as available to Storage in to and of for a you about approach capacity seen Gemini for target will our expansion non-U.S. to culture the is In a production as next utility out booking our DG of attractive XXXX proposition on primarily to a practices where X be global partner in near-term, our announcement introduction or modules. a planning announcement power commitment year supply winning regarding across our have has to strong put gigawatts AC Performance sustained exiting with beyond. gigawatt trusted strong which us of and to phase plant capacity. one a experience success sales P-Series a of to we utility attributable scale to pillar has Since from focus. the scale

in chain encouraged a a American We very enacted, Series intend that deployment rest the including of if manufacturing production U.S. scale. value the the goal We Customer Jobs critical office, the panel XXXX. programs Shipping move and Maxeon that world business passage successful costs XXXX. getting help scale submitted their DOE as to as these We’re the the recently of The proposals the for supply energy chain Act more support are domestic with at and to manufacturing Energy factory. and technology America by provide support Performance for is in domestic do pricing achieve incentives utility We outside in the loan cutting solar elevated. are legislative legislation, the the module still to solar deploying to edge reestablish expectations solar with solar X Act pending this of to loan U.S. application Manufacturing line gigawatt higher platform solar early to costs. with government U.S. believe recent goal cell project great start of negotiation guarantee to of U.S. the in DOEs they and forward so enabling manufacturing. of an solar a

bi-facial with near book to Series Performance TX that, sales combined capacity. pipeline expect Given our into we the scale begin the our of continuing converting business up in future,

We’re growth our as in increasingly enter confident renewed business we XXXX. rest of scale utility in shipment world

of Maxeon our Chinese reminder, first half market to largely to XXXX. during structure volume our enabled the a the As JV reallocate

scale We expect utility backlog an regarding QX. to our in update provide

ESG to turn inaugural plans our June, highlighting the efforts. published I call mention ESG key a related quick initiatives, our report, and our the achievements In we’ve Before to Kai, sustainability themes. about

Our to of manufacturing the to inception goes sourcing responsible commitment supply back SunPower. chain and

holding value long-term financial higher Maxeon, This conduct our largest the United aligns I sustainability to in operate way our long-term standard the shareholders, sustainability which a to and we our goals the establish report. joined with and we Global turn customers, believe in of aim generate Compact, We the review Now our voluntary in for performance. ambitions world’s industry. corporate the to in holistic we XXXX. to a business we Kai where the is and our our as leadership Nations driving we employees, communities by approach initiative, over to call December highlighted ourselves will sustainability report

Jeff, and guidance. then and Thank will discuss performance quarter I details hello, you, second drivers of the our and provide everyone.

million mentioned quarter $XXX came range total the to million revenue $XXX guidance second in earlier, Jeff As at consistent with million. our for $XXX of

sequentially, first mainly XXX to of thanks up XXX in for second steady shipments these European exposure Our line the product most Total XXX sequential the from of cents were P-Series of $X.XX ASP down mainly XX% is guidance basis to our megawatts. in XQ was XXXX. decline blended in products attributable range a The of the first markets. quarter mix with to megawatts quarter XX% shipments quarter revenue XXXX. on watt of growing per total as DG the our X% for $X.XX to with tells at ASP compared accounted

for our DG the second by dominated accounting the utility with Although, only quarter sales were XX%. again revenues scale for business

like we scale. reduced a quarters, As to in intentionally exposure utility reminder, recent our

about of at $XX that tax than impact cost trends provision range million supportive As million industry of trends change affect goods These business. costs or quarter. mainly loss withholding cycle, from to in a efficiencies well prior towards second supply more chain a X.X% expenses, XQ $XX guidance of in gross operating million prices the sequential restructuring years a The out and market. to to this frames copper. industry sold been those We aluminum were XXXX fairly $X.X our series, off long which sales of second $X.X it decline not was the have that the sales, expenses sold $X GAAP X.X% inflation. was wide our product of stock in quarter started of expected. our in of million QX in development, but Gross Included not as our year-on-year, due charges to reside favorably estimate the one-third sequential our that mix Polysilicon structure and due XXXX. supply our freight is a negative operating the and $XX largely $XX decline as Non-GAAP million the in ancillary cost P from continued for our margin of does guidance the the to compensation price sale due shift affected million, came affecting at of visible. midpoint expenses cost and loss, which up our polysilicon reversal the loss cost a market. or of increases the by to freight, a came having factors, compared million $X.X in adjusts of cost slight XQ to product right become Apart approximately sales quarter, operating that was chain of of of margin sales is in or second X.X% from $XX million better million FTE on polysilicon is for our expense revenue. contract, Asia-based from in for targets at

part million negative tax sequential decline was transition to Adjusted loss remeasurement QX. quarter million the XXXX, mark-to-market is from loss million to in negative was to million GAAP costs $XX quarter mainly than prepaid of EBITDA better our that to $XX by Recall of million related compared $XX compared to net the QX swing first $XX to gain in our negative $XX the continue XXXX the the with While as stock in and driven $X quarter from million up. due the a price item million SunPower million development. $XX.X $X.X mentioned for this related our second of reversal. separation $XX.X closely million the in peer $XX large range before forward, was to ramped guidance in a as first in value an million

an versus up past of $X.X dollar date the sheet a million sheet few respectively. down of every or the stock Over a has remeasurement loss prior caused price the approximately gain given in balance balance quarters, date at movement or

of quarter charges net of million, range in $X.X Second $X our guidance million to also included line million. restructuring loss with $X

in expenses Toulouse, are our module As in closure GAAP mentioned included are to charges, in last related operating the of France. call, largely our these factory which our

our to balance on Moving sheet.

proceeds increase quarter the $XX in improvement during our $XXX and positive on net pleased the operating quarter We million in our quarter. million by flow operating in close sequentially, of and million the offset inventory net levels $XX driven that, sequential from to have $XXX million up the positioned of equity hand $XXX at sales issue and $XXX days by the cash of in quarter. are with million and The mainly With spending in three achieved were cash flow cash the capital end by April CapEx through opportunities working careful DIO customer management million take $XX the sequentially was million to the up advantage days, second supported respectively in by prepayments. to and XXX Inventories well of second of in and our are half second year.

our the our our and higher as X Maxeon P margin technology. X $XX well cell line purchase Maxeon for of quarter of expenditures transition our equipment of funding from Maxeon we’re million guidance lower Second capacity and to of pilot X to capital $XX technology million module the X.X primarily series for The $XX legacy totaled range market, million the gigawatts investment. end as near our U.S.

turn to for attention our to quarter. like the I’d third outlook Now everyone’s

first in of from rear we the the stronger fears end seasonally supply XXXX the chain headwinds year, and of of view perspective. leave second half mirror cost a the half to continue we As face

of and have for logistics and Maxeon transitioning X the there’s polysilicon experienced disruption. we have and costs plateaued X skyrocketed phasing At As to transformation and and Maxeon expenses disruption costs our incurring at for network COVID the prices opportunity are years. out due levels for same global time, not related to manufacturing

improvements margins and optimization, transient second off as technology manufacturing purchase and improvements our taking operational company the contract. challenges core is mind, as profitable shipments drag in for also our market slides. continue the in guidance be down our breakdown business that our material including investment to situation the manage But DG of are that upgrades, cash earnings and business. our project as in in to exposure management, out tailwinds in guidance normalized. uptake also current the catalyst supplemental the polysilicon of half. from by of our positioned are opportunities and driven our for prudent operations to a the XXX our business, market well see We action seasonal growth footprint These disruptions a and will additional confident to Please the taper We we With utility once follows. we the megawatts range and scale detailed has XXX and

this as are Our quarter or is our the relatively XX% expectation to of supports million of $XXX in to commitment contracts sequentially the guidance ancillary be $XX for of range, growth $XXX to quarterly levels This significantly polysilicon third XXXX. million. market that a polysilicon $XX we even summary, gross to abreast plan chain purchase $XX quarter includes relating or poly In million our to higher. as keep transformational increased expect worth reversal. the $XXX our already. out quarter our stood withholding to those tax the experience is another off-take and revenue of reflecting of $XX realize second million rising range purchased year-on-year million market for shipments out due to loss contractual recent increase the our million expect our incur higher larger are QX, made next volume in our loss a activities gross chain and by assumes a prepayments obligations value advantage to P&L projected be excess way, This the increased in for as $XX our supply of we to be We which per is we polysilicon of over QX sales QX supplier ASP’s which in compared XXXX, midpoint, sales in QX, quarter. the volumes poly consumed end those to lines. up end attractive high product up as remaining increased to revenues that take levels also the market steady we in any expected cash Non-GAAP in and loss the contractor of million to related quarter. for to XX% the pricing Also, during polysilicon have range of unlike a expect prices charges of of holding stepping to third polysilicon not the prices market for sell but not In non-GAAP opportunistically reflects from XX% the At to into purchase of charge, the that prices you million do poly cost to costs, than related flow, of context at shutdown. COVID

see but to of loss. non-GAAP our factors to is restructuring affecting Further, by of gross aspects absolute gross our all $XX EBITDA $X However, we improvement I of for in loss, our largely scale. see the near in our the activities otherwise We also projecting network. operating investing a or expected to as to of you future continuous Adjusted revenue, spin-off are plus continued million range on expense be to behind be term the will level our to operating $X OpEx are a this it are us This million that platforms, in percentage channels be manufacturing and keep charges of other minus profitability to business. that million. focused future same the that disciplined driven Non-GAAP baseline, you global sequential spending $XX drive is approach or we million million business in expect improvement plan technology and quarters, believe on on range negative $XX the basis, be of provide expect largely the while an million. investment expenses now $X In utility restructuring we as our can us. are

ambitious million a Our time XXXX. with this liquidity our pleased $XX our internal CapEx $XXX XXXX the provide by capital how quarter, outlook In to maintain. year. XXXX CapEx further be expected conclusion, we $XX strong the will range the QX are to guidance And expect maintain in hitting position expenditures of intend in projections, will and this cash early plans practice we for business third a for Based we of are the earnings to million to same quarter. XXXX information million about our continue our of beating time, is the we targets performed At set ourselves. guided flow we team and end to on or through of call planning

pricing for sales trends Our potential team utility discussing the directions demand especially the products scale, exciting trends, U.S. XXXX made we in are buckets. actively for XXXX. are in positive Europe. energized in headed opportunities first by global is half expected Utility right And in America from scale

conclusion of the line all Maxeon today turn side, investment looking margin years out of and back course, are performance before to of in pay polysilicon Mexican to both in XXXX. contract the of the go we forward making come. of call the Q&A. end the I’ll market to dividends we should are With summarize On for our products the to that, us at to And Jeff

are levels pillars, and differentiated achieving increasingly three strategic collective executing are beyond. half Excited XXXX channel scale progress Markets Kai. on of initiatives company We’ll this in in as in financial to targets our our Thanks, provide approach. Those as focus utility on operational again, quarterly DG transform and Day panel the plan and strategic to key ambitious innovation, profile XXXX. Maxeon pillars XXXX our intend first our Capital enhance we at is ever Maxeon’s independent and first our our to on focused here detail leading Maxeon, growing public our hold execute about more an

the Q&A please session. go proceed let’s Operator, Now to

Your James. Instructions] first with question [Operator Pavel from line the Raymond Molchanov of comes

Your line open. now is

been QX, than guidance you would just margin your words, it be number the do taking have that have and contract? you’re a other its would more in range. how a to In X% logistics hard other on everything the if it much What like, supply to as chain the normalized you for or well? Thanks hit [indiscernible] in from generally of not for market, environment taking auto X% did looks question. Based gross

for but more it you impact. as pointed to some question, over Kai, And Thank detail. significant that QX Kai Pavel. more some over headwinds logistics for we you that I’ll are And I’ll detail, like are there the be turn to an you to having temporary in out, believe turn for

right. thanks for question, And the Yes, Pavel. again, that’s

went for As year when the provided we costs kind we to consider time was $XX second I still more Costs as quarter, chain range year-on-year million, by we up said, something my about remarks. also normalized. for quarter. comparison have in expect I remarks the the and a said, ago, in in probably that prices supply which would the similar third compared of a

million as is for $XX well. a good mark So that probably

Obviously Philippines, Philippines Southeast by in That’s Okay. of now again serious social any or as is disrupted, running below otherwise the helpful. Asia. manufacturing throughout restrictions? by of capacity fabs your and Are lot it yet COVID pandemic is distancing the the a in where the affected

Yes.

that in prayers in discussed and prepared our to being go the hit days. pretty are in I these as Malaysia remarks, out first, particular So people thoughts the hard

Within of as that that do disruption plans but was have place any of infection withstand, issues, were well, that on processes creating in processes year COVID said, you we’ve would transportation any the as also effects limitations us not from Philippines as very vast include to have last and also the strong say, we’re to Philippines, course rates. helped the of operations. within our across are of There mitigate plus. our any the the would and in come Malaysia also local And a not up seeing surges have the that help with majority well. now, in over I really increase the an there we plants I operating all

very not across in things as I’m our at the Philippines, with that of well. same to say factories, Mexico pleased our employees full plants true all capacity. So have operating – particular keep The but are is been able in keep to operating our we only safe

moment. Malaysia the statistics the Okay. And what’s at capacity in

Sorry.

utilization able capacity are the the just you in to what moment? at So run at – Malaysia

Sure.

be So current August is with until going country, be we plant across that down Malaysia the the will being and shut are and issues XX to faced our reopening.

We operations August up specific some until is smaller critical activities. for are But for XX. now, open some closed discussions in it to path

track expect gotten also record in and from local health We authorities the have the very we given great feedback that positive we’ve Malaysia.

importantly, our has we’ll we’re be able keep able confident employees to in that and rise but more really safe. confident Malaysia The Countrywide. reopen being to been say in We’re I’d

occur. We’re would kind of COVID. out coming the that our stopping infected. help with XX/X, are all any employees place good we really know, and our it’s procedures still, place the of any to when in do any they’re seen plants they’re when of I spreading we employees – say, in mitigate back confident as in factories have have our across to home about don’t to-date we tend set the not that place and infections we’ve of factories And of But and in have plans implant you in and our processes

revenue high you inability needs. then level, have had at And shortfall, just schedule the lastly, produce on to dislocation, a Okay. because revenue customer’s of for any

certainly August near way with – inventories it have brief is it to be stoppage current module there and look that If in if we producing I’m not that in will see it’s shape. are in the XX, the QX, that production a on effects. to stoppages Malaysia, happen plans at might a in again, we’ll confident factories cell continue And kind have based that factory do We term able the those that especially any our we to but that you in to help, bubble, there that to were inventory is place, of be manage to reopen you sure still have have in we we’ll work mitigate good to – should be able in we make the production.

much. very Thanks

Thank you.

from the comes question Bank with Dumoulin-Smith of line next America of Your Julien Securities.

Your open. now line is

Thank you, it. the opportunity. line done operator. Appreciate Good afternoon, team. and Thanks here. for Well holding the

Thank you.

Absolutely.

do can commentary bit preempting what to expansion, of talking guarantee? financing talk if more What maybe flow of U.S. principally, DOE you investment on little the just loan focus how of you then new it XXXX, little parameters the financing? or that’s cash perhaps can this I bit, the a suppose you? some a I looking ultimately side the of to about you might cost otherwise forward some and a speak U.S. around is such about think size expansion parameters around it some can the So about of tangible. angle the And here Any organic

can details Yes. fit. I’ll certainly fill that cover any the with in first you and you Kai see part

As The plant fab one is capacity guess fully funded. program out expansion out guarantee, is is X DOE we I first, the gigawatt that of point both to a said, loan for both. of thing that coming [indiscernible]

a any CapEx waiting plan that additional any supply And of capacity would that Kai, color if not current requirements to approval. maybe with additional XX% help guarantee. the or that, is the requirements the congressional it’s So the add And question. you want with loan to with

provides other unique just can that believe from XX% the be value really, an as of rate for project overall loan us a is the really Jeff mentioned funded currently of think I Yes, we that creation. really And cornerstones XX% opportunity at that CapEx defined program, expenditures plus for some this this also strong just represents the one program. loan

important. that’s course, really Of

can We also local that believe towards other go initiative. incentives available four state that and level there are maybe that

about we funding able But a this. are opportunity different U.S. the a place. be proposition confident project comes will backing not are we discuss now are given it So details, to value appropriate from and for secure but government really items the a pass that sufficient for and position excited are overall, when in this we the to for all and to right strong with we this strong really that in

clarify adequate can loan that to would Just tend that will? that if guarantee on about you the Ossoff may to you Bill, that, What to the under for materialize? that a would make suffice, differently may work you economics not or be

Yes.

and fully is guarantee, consider conversations various very situation. been said, we is constituents a have to D.C. I think the We’ve What DOE the we number of would in would funded. our level say in governments need we a high loan having with that that Washington, of it confidence as – I

we’re come very will DOE So guarantee that that I’d loan say confident through.

that goals a analysis, in very the that in remarks, to in tell competitive Ossoff cost with and prepared effective also put U.S. their say as the important, combined as needs an in can are those would they that need meets you solar produce the government very with Bill technology much in educated cost we combination manufacturing and As did the we the producing the you of that great said company actually, who U.S. through very we’ll did and the way, administration they help who the in is place have the a went we requirements incentives we us we opportunity with achieve edge it a think The capability of that competitive, two to way. and creates have, leading are for really it

ship of to expecting planned, the we can, throw you signs just slippage just started initially this you quickly, given still clarify one are late, the in started that real see broader that. XXXX as from utility as XQ delay there are I if

is that absolutely Everything will still to plan and Mexicali. out still of absolutely becoming

what of expansion talking is with an gigawatt last gigawatt the and So X we that this X.X about that quarter announced coming over expansion, Malaysia above and we’re out Mexicali.

you. Thank

line Partners. of with comes Philip from Roth the question Capital next Shen Your

open. now is line Your

questions. Hi taking everyone, thanks for my

share bit QX one might by the update XXXX in is And input forth. can so thinking Thanks. and volume maybe P-Series, color then you give four. how you just might this and said but you’re costs and little for given you the First on pricing you how a to detailed wondering P-Series just was I on give a year, think later much more if expect

Thank you, Phil. Yes.

look know, you have quite some the would that market we’re trending the of on carefully XXXX. of and world in direction. that insight Chinese favorable. costs. is we’ve the equilibrium the as XXXX, the the within right I our we’ve of I Chinese profitable. to that there and and how rest for booking the into able that’s market much be pipeline it’s So QX And product to what not expect chain out of fully of more exactly And we to rest say predict, additional done in been And tracking business seen into that world of the little utility But become supply to business market come definitely back more shipping P-Series production. prepared we as with current get more begun scale in us full have to business say power an getting that some we coming some QX. of And – see between we it’s pricing and is monitoring begun for fulfill of early see and we’ve turning out have that’s opportunities the a large in to we to

much for volume market. utility very is XXXX scale in to building returned competence our So

can And go ahead, you – Kai. Great.

Sorry.

for really So P-Series we third of your just of question P-Series. majority the growth for the near-term, of here vast that guided growth to add from coming the the the in is terms sequentially so have in that the quarter

kind As all you been capacity is where at IBC roughly have shipping. we of know capped levels around

the most from from come our Mexicali. also the going our in course additional supply of is then growth and joint XXXX, own Malaysia So in from to from chain and of near-term venture P-Series the

in for Great. when Thank logistics. your to shutdown. about What’s it this another ports you as think you in to, what’s improves? as briefly the think sense I I or sorry, had relates think overnight when sense talked but China this you as Asia, morning and situation it, missed your to I if sorry And you’ve shipping shipping and plant, that.

and or improve things Ningbo so getting but due to things I it’s port like it QX a to expect seems more do hope. in think are worse, of or QX COVID, of it you was the incrementally

a great Yes, question, Phil. that’s

understand is a is dynamic think I and very be exactly on to It trying situation. logistics with everybody what’s going to forecasting. going

I we costs after in is our to get really think for at it’s handicap tough – attack it. an moment. to logistics control probably say What will doing are can trying the us too I ways we that

then So one we product produce Mexico and in of out Asian that to Mexico our IBC the panels. then we to then markets. we cells European ship if Asia today, I into And ship panels into particular, at in look produce

very I This we was transportation. exposure were are, say part a business. have to we when high would much of of to focused SunPower So U.S. a goes level back

the process, service in now markets from in we to And we’ve then the and Malaysia. be there, module for as We’re discussed IBC, we of building make down a up Asian of able European kind change will on that will our us it’s to and less in to logistics, logistics today. that infrastructural which cut have sensitive shipping think we really as manufacturing that

like market. with a in capital very the a one other U.S. it’s is from The that from thing from help in place are about it’s a things region add, all perspective, perspective, that we being the produce good a cost going good incentives to able that working of the I not lot time, would logistics around. also Certainly but cycle only to

we’re of it’s as So well. U.S. presence a one the aggressively reasons why pursuing

Great.

promising? you reception book talk are Conference in like the Maxeon there? How may about year can China. What you looks And think was SNAC that have for might the this I order presented Maxeon Air seeing then be you the what Air? the

Yes.

SNAC. First it received very well was very, at

I Maxeon think can is explain it Air. you

in and is And out see as I of from have as as a people others it been have customers. that it bit think to you customers we’ve person, out us not heard think including that changer. well been actually interesting it’s game what’s when reached roofers I – traditionally reach that a the

X there’s are globally to when spot our the So channel cells sweet up available. the for the XXXX, current in excitement be are we plans lot to production initial that scaling are really product of for going least production, at the that a hit starts our Maxeon

to Air in XXXX. current the building using cell XXXX in up Max start can think technology you of is So

we cost helps will We will improve currently Maxeon of performance with because broaden make of us what improvements and scale has X more and Maxeon reliability marketability. have we It and think applicability the using it then Air in some that get reductions heat better that a a of X of do into Maxeon it and IBC. that its way than the even

XXXX, you’ll it’s revenues that nominal in start some see really to when XXXX for I it see So scale.

it to to relates AC Okay. end by your for within this the microinverter year. targeting that. think you’re of Thanks XX% I a of be non-U.S. And sales as panels,

think the that what might premium a of little future that wondering that, slide. and reaffirmed in bit a Maybe I more give kind color on that’s What you that, segment? could might like price think you just for you look how if yet I in be going. offering a to what the to relative was that module able XXXX? hold do

Sure.

grow. by is if exit that say of that left as AC Let time you we expect can the Kai, XXXX. to the me XX%, expect you out, to we anything on and jump penetration to that our Phil first, certainly to I’ve of give approach the about what panels outside some comments And continue you for business upwards we’ve we in. I’d U.S. said, think talked publicly

XXXX. into continue to that expect We

would specific get XXXX. more we closer get sure to as So expect I’m it in we be above to we’ll XX% XXXX.

AC. I for would that markets positioned it like how kind There it’s position. other product good example markets there of has are where is channel that. that are And our In some is I a standing it’s a are France a say, of a going, terms better embraced. a Italy, bit say start would of from

a are growth consumers is is well, the that growth Italy, growth is to IBC with go channel play, value is because start starting into needs now very seeing. in Europe, comes AC our We really the to on but and from education Series to get this also that What’s think to our we’ve of education going I panels. would expanded things that we’re panel say, leading the spreading panel which AC half. to process there that say also in as now Australia especially would system across Performance our Maxeon adding, an going the to panels us, to the But benefits as see to an be I second in we of grow see where certified for We’ll Italy. for into that particular I is

price different of a customers hit level us as helps also that So well.

so so say good. would I So far

excited we think for I about as pretends lot a into And very get XXXX. us, positive it. of We’re it progress especially

are it and a you market markets Great. or on characteristics there, rooftop make you pass can rooftop. countries not it panels most AC suitable follow-up rooftop? one there that in a of those labor can rooftop. is that’s what attractive it that the for are a of is or today countries talk some actually I’ll terms XXX% segment And But it, the what it the more I’m wants just that guessing seeing in more it percentage high you’re of Is comment through on Thanks.

Phil. you, Thank

market what That’s AC it that are additional provide me rooftop handed of more definitely to segment. color. then like have Peter are comes you the there upfront more some And running on and of a color provide to But the that, commentary, early more the would the markets provide seen say let panels uptake. on – market AC some of say, have when off some a applicability. France we Pete, Aschenbrenner panel for where start markets I the adoption. maybe only some I’d I see of I’ll I would all, first So panel is say, there we’ve

be the think that I the case short is answer think is ACPV that Yes, on to time. all of for our that, We continue Okay. Phil, some will rooftop.

proposition might but the systems roof. on is case, a penetration installation. where streamlining, an logistics, value And by ACPV the the around are majority the which ease and of really two the get system or that’s and of not flexibility for You speed far installer, drives design, the

when installers quicker that teams, for a installation, cetera. process logistics just fewer and much simpler it’s worry parts about, So something their it’s them, to et installation reengineer

having the not user, granularity the the liked they to of For really end inverters. and big wall solution I with think, on string have monitoring boxes the the

far. are the So that of so those penetration things drive

Great.

last wondering margin panels, improvement. AC the just corporate that for a as profile is the be the one margin And I’m source might – better of than sorry, grow average. segment if I’m healthily question, you

seeing basis, margins On comparable. we’re a percentage margin

are put way, effectively So if with itself. the on DC the or the same DC the comparable margin the margin we microinverter, panel versus are we’re as the the same, percentages panel another on have you panel the microinverter getting

– So creative it’s good yes, is us. to for upside it

it Okay. Thank pass I’ll you on. both.

Thank you, Phil.

Your comes line Stanley. of next Arcaro Morgan Instructions] from the David question [Operator with

open. Your is now line

my taking Hi. for Thanks question. much so

operating in for pretty up flow cash how cash if make bump operating back might was just you the nuances the look had on how capital flow in could the a the wondering do expect comments of cash back any you quarter. Any half or You to half? nice flow I operating year. trend working in

you Thank the question, David. for Great.

hand off me it Kai. to Let

Dave. we’ve quarter, also Yes, a Thanks, that on if look million this performance in. absolutely. helped came $XX focused Yes, really the you at we operating good positive, cash really by prepayments one and flow, some that

for operating cash on the continue to focus flow. We sure

actually our that have levels noticed have You quarter-to-quarter. gone up inventory

back number actually sales. the half as the the over helped we And expect have in year inventories. we been quarter to of growth that terms fuel levels a of guided we our by inventory down second the So has bring not

continue inventory after So be And I we operating second CapEx be for the a some continue to liquidity would as on tailwind and from some operating and to those the if position good expect half developments. year as flow making the of expect said, site in we the cash flow strong also cash to after guided.

the back the we year, flow. for liquidity good operating So we outlook position cash our about feel pretty maybe on half and focus to continue of

of wondering, alluded looking made the Got you volumes next just further to coming progress year. I orders that’ll out maybe helpful. you then Have was Mexicali earlier, it. for That’s it as online specifically. demand that I And how just be but Understood. you big project, obviously year guess, for have beyond the XXXX. XXXX And for plant starting is for locking in shaped orders comes kick that in that next to up on

to securing up then gigawatt, I amount strong really deals the booked volume with a XXXX. fill would Primergy for some as balance. leading which know, you say of fair the the X us up has been smaller very And demand we

for of us the And the XXXX. that Mexicali, more demand out again, the because that of when focus demand again, Let’s XXXX set opportunities really performance, business most XXXX. opportunities, the looking us it’s exist company, best panels the we book more are can. for because has there us as positioning attention that say But we and look in have XXXX. now, our really on right great is because of in of we of that up the around for coming around ideal closing seeing of factory, really and at the a we lot that It’s are because who we and technology, for a the filling with more us

so Okay, great. Thanks much.

you. thank Great,

at conference. thank Ladies we today’s [Operator Instructions] program. and concludes this today’s have participating gentlemen, no question time. you And further This for in

You may disconnect. now