Siobhan Hickey, VP of Investor Relations, SunPower: Hello. Welcome everyone to SunPower’s second quarter earnings call. My name is Siobhan Hickey, SunPower’s VP of IR, and I would like to review a few housekeeping items before we begin. All lines have been placed on mute at this time. This call is being recorded and a replay will be made available within the events section of the SunPower website. Please note that today’s presentation may contain projections and other forward-looking statements. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in our statements. In addition, we may discuss certain non-GAAP financial measures. A reconciliation of any differences between those non-GAAP financial measures and the most directly comparable GAAP financial measures are available within our press release. Lastly, we will hold a question and answer session after the end of formal remarks today.

For those watching via the webcast, you may submit a written question at any time via the submission box located on the right side of your screen. For those joining our live Q&A, please click the raise hand icon located at the bottom of your screen to enter the queue. With that, I will turn the call over to T.J. Rodgers, SunPower’s Chairman and CEO.

T.J. Rodgers, Chairman and CEO, SunPower: Morning. My name’s T.J. Rodgers. I’m the CEO of SunPower. We’re here to report the second quarter. I have people who present various parts of this meeting, so I will introduce them real-time. Starting with Tom Kowalczuk, who’s our new CFO. He’s got a CPA and a Chicago MBA. He’s had experience in public companies and he’s down here, Beam Suntory, and he led a finance group there with $2 billion in annual revenue. He’s got the experience in public and big company. This is his first shot at being a CFO of a public company. He’s going to present the financials today. Tom?

Tom Kowalczuk, Chief Financial Officer, SunPower: Hi, good morning. Thank you, T.J. I’m very excited to join SunPower at this opportunity to be a leader at the group at this very important time. Over the last few weeks, I have been focused on getting to know the business, our operations, our finance organization, as well as meeting the talented people across the company. While I’m still early in that process, I’ve been encouraged by what I’ve seen and the team’s commitment to improving execution. Going forward, my priorities are pretty straightforward. Maintaining strong financial discipline, improving the quality of our forecasting and financial processes, as well as allocating capital thoughtfully and ensuring we provide investors with clear, timely, and consistent financial information. I look forward to partnering with T.J. and the rest of the leadership team as we execute our strategy and work to create long-term value for shareholders.

T.J. Rodgers, Chairman and CEO, SunPower: This is the report we issued this morning. I’ve asked Tom to go through the financials with you. There is GAAP and non-GAAP. We focus on non-GAAP. That is how we have reported all of our quarters so far. Tom?

Tom Kowalczuk, Chief Financial Officer, SunPower: Yes. Our non-GAAP revenue is down from $73 million down to $56 million, which had a direct impact on our gross margin and gross profit, down from 46.9% to 27.6%. That is a direct result of our fall through on variable COGS and revenue. However, we did offset much of that through improved operating expenses, which is down about $19.7 million, of which 7.1 approximately is fixed overheads that we cut out of the business during the quarter and is expected to carry into the future. Our operating income is slightly improved, which is a combination of our fall through because of the change in revenue as well as the improvement and cost cutting that we did during the quarter. Net net we are better than the previous quarter on operating income non-GAAP by about $400,000.

T.J. Rodgers, Chairman and CEO, SunPower: From my perspective, we need to explain a disaster revenue quarter today, and that will be my job today. The good news, if there is any, is that we had a huge drop in revenue but maintained, didn’t change our profit. It went from bad to staying bad. That was because we have done structural cost cutting of 31 minus 24, $7 million, and I will talk about future plans for structural cost cutting later as well. I took this shot at 7:17 A.M. this morning, my time, and the word is you didn’t like it. I don’t like it either. It is not good performance. If you look at the company, basically we are six quarters old and we have been at a buck and a half, plus or minus a half a buck forever. The last two quarters have been bad back to back.

That, of course, is bad and bad that we just talked about. That has impacted our share price. I am going to talk about why that happened, what we are going to do about it, in detail. Next is Dan McCranie. He is a board member. He has become active working in marketing and sales for us. He is a storied Silicon Valley figure. He has been on 10 Nasdaq boards, and this includes the two halves of Motorola when they split apart. Important companies. I knew him because he spent about a decade at Cypress. He has been a CEO, and his forte is marketing sales. Dan.

Dan McCranie, Board Member, Marketing and Sales Lead, SunPower: Thanks, T.J. What you’re looking at here is total bookings for the corporations from Q4 2024 through our most recent quarter, Q2 2026, measured in terms of jobs. This is all SunPower, which includes our residential work, as well as our new home work, as well as our commercial work. What you’re seeing there is an aggregate of all three of our business units going forward. As you can see from Q4 2025, Q1 2026, and Q2 2026, we’ve had strong increase in bookings. This bookings increase is now nine straight months, generally across the board. As a result of that, going forward into this quarter, you’re seeing our projections for revenue, which is largely based on how much of the bookings we’re able to get through to the factory, installed and revenued.

That’s going to be the primary challenge for Q3, is getting these bookings revenued through installation. One more point on that. You notice in Q1 2026, we were at 4,166 jobs. In Q2 2026, that number dropped to 3,655. Still the third highest in the six quarter or seven quarter period. I wanted to point out that the transactional short-term bookings, which is the bookings for solar, actually increased in Q2. What dropped is our long-term new homes bookings, which we don’t really see revenue for five to six to seven quarters. My point of that is for opportunity, for short-term opportunity, the sales force continues to book the short-term opportunities, residential, that allow us to have a good Q4.

Finally, it takes us about eight weeks approximately to convert our jobs to revenue in residential, so therefore the sales force right now is predominantly working on the Q4 bookings to ensure we have a robust Q4. That’s where we stand. Three strong quarterly bookings. If you talk about the transactional bookings of residential only, we’ve had three record bookings. T.J.?

T.J. Rodgers, Chairman and CEO, SunPower: We’re talking about a lot of bad news today, but I do want to point out that what we’ve been talking about is good times ahead of us because of bookings, and that’s still true, so I wanted to bring up that slide early.

Dan McCranie, Board Member, Marketing and Sales Lead, SunPower: Great.

T.J. Rodgers, Chairman and CEO, SunPower: This is a picture of a headcount in the sales department.

Dan McCranie, Board Member, Marketing and Sales Lead, SunPower: In this one, this is our total 1099 sales organization broken out by SunPower, Sunrun, the acquisition we did back in September 2025, Ambia, the acquisition we did in October 2025, PureLight, which was a small acquisition we did in Q1 of 2026. We are holding our 1099 headcount reasonably at about 1,500. We’ve made geographic changes in that headcount. We are now moving into the higher opportunity states, especially for TPO. That would be, of course, Texas and California and places like Pennsylvania and Virginia. We’ve redeployed our 1,500 1099s to maximize bookings. That’s what you’re seeing right now. To a first order, we’re about flat with our 1099s at a very robust 1,500, but we’ve moved them around to areas where there’s currently high opportunity for immediate bookings.

T.J. Rodgers, Chairman and CEO, SunPower: The main point here is that old SunPower, by that I mean the SunPower that went bankrupt, had a large sales force. When they went bankrupt, that sales force started attriting, and we worked very hard to maintain actually a higher, bigger sales force of 1099s. I thought I’d talk about myself today and show my picture. This is back when I was in high school. I thought about it because I just saw a movie called "Young Washington," and it was a good movie, although the critics, because it was about an American hero, didn’t like it. There’s a classic line in it. In 1755, George Washington got his ass kicked in Ohio by the French and Indians in the French and Indian War, and he was the head of the militia, the Virginia militia. He came back, and talked about the problem he had.

They burned his fort. They killed a lot of his people. He really lost. He signed a peace treaty that was written in French that he was misled by what it said. It was a bad contract, let me call it that. When he was making excuse to the governor of Virginia, who was his boss, as he was making excuses, the guy was waving his arms like this. Guy’s name was Dinwiddie. He said the line of the movie I thought was great, "To lead is to forfeit the right to make excuses." That’s where I am this morning. I can bitch about this or that, and this didn’t happen, and that didn’t happen. Of course, the rebuttal will be, "Well, great.

Why did you not fire the guy before he screwed stuff up? I want to make it clear right now I run the company. This is my problem. Who am I? I graduated from Dartmouth in 1970. I was second in my class. I was eight years on the board of directors, the board of trustees of Dartmouth. I went to Stanford. I got my PhD there. I’m a Moore’s Law guy, Silicon guy. I worked for two chip companies, American Microsystems, where I learned how to do engineering and R&D, and Advanced Micro Devices, run by the fabled Jerry Sanders, where I won’t say that I learned about sales, but I did come to appreciate the value of sales. Dan and I both worked at that company at one time. For my, in effect, whole career, founded a chip company, Cypress Semiconductor.

We IPO’d 37 months from our funding, including building a fab. We went public at the $770 million valuation in today’s dollars. In 2020, after I left and retired, the company had sold for $10 billion. After that, I worked on the Enphase turnaround. Enphase is worth $5 billion today. How am I related to SunPower? I’ve written checks, literally, for $111 million. I hold outright 32.7 million shares, and I hold debt equivalent to another 26.5 million shares. I’m looking at 39% ownership if I converted my debt, which I don’t want to because it’s income for me. I have no shares that I’ve earned because of my position getting paid with stock and my salary’s zero. Point is, making that number better is all I work for. If you think about economic motivation, obviously, I want this company to succeed.

I have to remind you that we’re in a good time for solar, and when you have a coat of tar over everything else, it’s difficult to see through it, to see the good time. This is a graph, the Energy Information Administration of the U.S. It talks by area of the U.S. and averages for the U.S. of solar penetration rates, meaning in 2024, only 5.6% of the houses in the U.S. that were qualified, rich enough, right area, right zip code, good laws in the state, meaning 95% of the homes did not have solar that could have had solar. This number’s been updated recently. The 2026 update is 7%, up from 5.6, so there’s seven, therefore 93. There’s a forecast by the same outfit, EIA, that it will be 30% in 2030.

I think that’s a little bit aggressive, the point is, even in 2030, 70% of the market will be unsatisfied and will be wanting solar. By 2030, that’s four years. You take a 10% raise per year, take 1.10, raise it to the fourth power, and you’ve got the cost of power that people are going to have to pay going up by 50%. Meanwhile, the cost to install solar is flat to down and if you look at a four-year rolling average, forever. What that means is solar energy is number one, in addition to our portfolio of energy generation. Here I show gigawatts. Now, if you want to calibrate that, this is added solar additions. If you want to visualize a gigawatt, think about a nuclear plant, think about that giant dome, and there’s usually two of them. Each of them are worth a gigawatt.

That’s a cooling tower or a plant. 70 gigawatts is a lot of power that was added, 35 nuclear plants equivalent. You can see natural gas is fading. I don’t necessarily agree with that, but that’s what’s happened, and wind and solar are growing. Solar, you can see here on the bottom, is growing the fastest, and you really can count battery storage as part of the wind and solar phenomenon because you have to store the energy when the wind is blowing or when the sun is out. This is also renewable. Bottom line, we’re having a renewable transition. Like it or not, debate it, this is where the market is, and I frankly think it’s right.

I think the fact that you can buy a solar panel for $100 and get 500 watts of power out of it when the sun is shining is a big deal. Thing that people have talked about and they don’t realize is there’s two kinds of payback, energy payback, which is seven-ish years for buying, installing solar system, that’s financial payback, sorry. And then there’s energy payback, and energy is do you ever get the energy back you get from melting glass and purifying aluminum from the panel? And the answer is the energy payback time is about a year. That is, the panel will produce more energy than it took to produce it. The fundamentals are all there, and they’re all lined up. This is from Ohm Analytics. Ohm is sort of the go-to data source. I’ll just make two points here.

Photovoltaic pricing trends, and of course, they look at the pipeline, and you can see it’s flat. There is no big crash coming in solar pricing. The reason for it is the government subsidy is gone. I was happy about that. And as a matter of fact, there will be a short-term, slightly upward trend because of that. Second one, and this is a bad one, this is monthly residential commits. Here we have by month going up to May of this year. This little peak back here is Safe Harbor. This is where everybody was buying and installing one bolt in order to guarantee that they would get ITC credit. And then after that got done, then we went into the current new equilibrium with lower funding, 30% gone. The reality is, if you eyeball this, 25,000 installs has gone to, let’s say, 15.

And this is what we’re dealing with in the solar industry. We’ve got a significant fraction, think a third to a half of our companies have gone out of business, because there’s a lower volume at the very same time. There’s the lower volume, and the tax credit is gone. The double whammy is pretty much unemploying a lot of people. We’ve responded to that with $13 million in cost reductions. After Q1 2026, the first of the back-to-back bad quarters, we did a RIF, and we implemented a four-day work week. The reason for this is we knew we were coming up to needing those people, therefore laying them off and bringing them back was not proper. We went to a four-day week to keep the people, have the least layoffs, and we also did some structured cost cutting.

That was $7.1 million that Tom showed you on the first slide. This quarter, we’re going to do another $5.9 million, and it’ll be focused mostly on management, where we have new homes and Cobalt, and we have two sets of managers, and we will rationalize that. That now reports to John Berg, who’s going to address you later. Are we fat? The answer is no, we’re not. We never have been. This is a graph of our headcount. When I took the thing over in Q4, I inherited 3,500 candidates to work there. We said we can only deal with a third of them, and then we lowered this over time as we learned how to run with a leaner team. Right now, we’re targeting 700. We’re at about 710.

We have a lean company, and if you went into our place, you would see people working their butts off. Last weekend before last, 64 people worked overtime, which is efficient for the corporation. It’s good for them, especially on a four-day work week. The cost reductions, $13 million, describe the two components of that, last quarter and this quarter. I’d now like to start talking about the overriding thing for us, the technology and capability. Let me call it the architectural capability, engineering capability we have, which will drive us forward with better pricing. I’d like to introduce Surinder Bedi. He is nominally our EV of Quality, but we can’t afford to have VPs, including me. My wife and I typed the words in this report. We can’t afford to have single-purpose, expensive people.

In addition to working on quality, he looks at future engineering. He’s an expert on panels, and I’ve asked him to describe, highly awarded, worked at Intel and Applied Materials, Silicon Valley guy, he has his own patents. I’ve asked him to describe our new panels and why they make a difference. Surinder, you’re up.

Surinder Bedi, EVP of Quality and Future Engineering, SunPower: Thank you, T.J.

T.J. Rodgers, Chairman and CEO, SunPower: By the way, we call the panel, our trade name is Monolith. This is a picture of a billboard on a major freeway in Salt Lake City when we announced that we had the Monolith.

Surinder Bedi, EVP of Quality and Future Engineering, SunPower: Thank you, TJ. What I’ll be talking about, the SunPower, REC, JDA Technology partnership, which we have engaged in the last few months, and that has really provided us huge dividends in terms of developing a high-voltage, heterojunction technology product, which is a 470-watt panel. It’s got a unique technology in terms of hybrid technology, where we allow the N-type silicon wafer, and it is being sandwiched between the amorphous silicon. At the same time, it’s got a very strong superior passivation. This technology allows us to be one of the best technologies in the market today, especially for the bifacial gains, and I’ll talk about that in a minute as well. The Monolith 470-watt panel, through this JDA Technology partnership, where the two companies, REC and SunPower, with their innovation, have come together, and we have launched, during Q1, this particular product line.

It is being commercialized right now for residential, for light commercial, for various applications today, and our intention is to expand this business throughout this year. It’s also got very unique features. I want to take a minute to talk about that. The module efficiency is pretty good, 22.6, which allows us to have a huge power density advantage in terms of the watts per meter squared. It’s got the advantage of temperature coefficient. It has got the low light enhanced performance, both morning, evening, cloudy, and so on, with a low degradation, and huge warranty advantage as well. Putting this together, all the different technology advantages from a heterojunction technology, using the N-type cell, we got the most powerful 470-watt panel today in the market, and we are proud of that. Moving forward, we are already developing in parallel. We have done some engineering work.

We have some engineering samples built, and that is, we call it Monolith II bifacial, which is coming soon. Here, the advantage we are bringing is that we are taking double-glass structure to ensure that we have the bifacial advantage. This allows us to improve our module efficiency. At the same time, it allows us to make the panel with the performance improvement, the boost we have, taking it another higher level to 494 to 528-watt panel. It still remains the same lightweight 50 pounds, very sleek panel, with a 2.0 meter square area, and the glass has been reduced, but it has been doubled. We call it double glass, both on the front side and the rear side, and that allows us to have the power density advantage.

You can see, we have an objective to demonstrate the advantage on both the residential application as well as on the commercial side. By having a double-glass product, you have a much more reliable product because you don’t have a plastic layer behind, which we call backside. Because you have a double glass, it allows you to have a stronger structure to handle all the different environmental condition as well as on the fire-resistant side. The warranty is also improved from 25 to 30 years, and we believe by having this combination of technology advantages along with bifacial advantage, you have basically designed in a best-in-class product line with a high output over lifetime, and that gives us a huge advantage in terms of cost per kilowatt hours, transforming the innovation into customer value. This is the quick snapshot of what we have developed so far.

T.J. Rodgers, Chairman and CEO, SunPower: Now that you physics students in the audience have gotten your notes, I’d like to just make a couple points. This has made a difference for us. All Chinese cells up to about a year ago were P-type. Holes move three times slower than electrons. This is a big deal. We’ve always been, since 1985, on N-type silicon, way ahead. That gives a superior efficiency. This temperature coefficient, 0.24% per degree Celsius. That’s 24% per 100 degrees Celsius. If you’re on a roof and you’re cooking at 100 degrees Celsius, your panels become 24% less efficient. That’s bad, but it’s half of what the P-type cell has. That’s why that’s there. The 50 pounds is there because OSHA won’t let you use one person to install a panel unless you’re under 50 pounds, and that’s an ironclad rule. You don’t screw around with OSHA.

That glass is pretty thin already. There are layers. There are 13 layers on this panel. These guys, REC, are really good, and they’re world-class, one of the top two or three in the world, and they’re world-class/not Chinese, which is exactly what we need. They work on getting low light to produce energy, so you get kilowatt hours in the morning and the night. You really don’t talk about when a salesman’s trying to sell you solar, but you get kilowatt hours "for free." The next one is degradation. Panels, as they cook in the sun over the years, degrade. These panels are exemplary. In 25 years, they still produce 92.5% of the energy they did when they were brand new, and that’s almost double other kinds of panels.

If you combine low light every day and a degradation curve that’s almost not there, you get high lifetime kilowatt hours. This is what, if you look at the economics of a panel, that’s all you get. You get a kilowatt hour for free from your panel or from the depreciation of the cost you paid for the panel, and you don’t have to buy it from a utility. Currently in California, that’s looking like $0.20, and it’s going up at a rapid rate. Right now, panels used to be flaky. They’re now solid for 25 years, and even at 25 years, they’re still almost brand new. That’s this one. Bifacial, think this panel, think the next generation of it. Put glass on the front and back.

You’re now talking about glass that is the thickness of a wooden match, and it’s got to work, and it’s got to work for 30 years, and we’ve already got our first samples of this one. Bifacial technology is what the utilities use. They don’t even use the standard residential technology. The problem is if you take that thick glass and put it on a panel, you’re looking at 70 or 80 pounds here. These are panels that are put in place by robots in the field, by utilities, and they’re not really available to residential. The name of our game is how many watts, and now we’re going to be over 500, can you get from 50 pounds? That’s really the game. Okay. Next is John Berg. John bought Cobalt Power Systems, and is the CEO of it.

He has worked for the Korean company Qcells, which is probably the only other major manufacturer, non-Chinese manufacturer, that is in the same class as REC. He sells systems, he talks about those little advantages that were on the last slide that are hidden in amazing numbers. I’ve asked John to talk about He lives in Silicon Valley, he thinks Silicon Valley, we talk Silicon Valley, not sales and I got graphs that the first graph is knocks. How many doors did you knock on? We knock on 65,000 doors a week. You got to talk about that to sell, you got to talk about technology to sell and get a better ASP. I’m going to let John talk about the technology of design and engineering he’s brought to the company.

John Berg, CEO of Cobalt Power Systems, SunPower/Cobalt Power Systems: Thank you, T.J. What you’re looking at here is the very first Monolith installation. This is on the historic Pleasure Point Plunge Pool. It was a club by Santa Cruz, right off the coast of Santa Cruz by Pleasure Point. The homeowner there, his name is Mike. He actually had a previous solar panel system specced. When the Monolith came out, I called him up and I said, "Hey, Mike, do you want to look at this new technology? It’s called Monolith. We can fit it on the best parts of your roof and maximize the kilowatts on your roof so that you have some space around it. It’s a little bit more expensive, you’re going to get a more levelized cost of energy.

The system’s going to wake up earlier each morning, it’s going to turn off later on and go to sleep later on each night, providing you more power every day. Even though it’s a little bit more upfront cost, you’re actually going to get more power over time, and that results in about a seven or eight% increase in ROI." Mike was like, "Well, what do they look like?" I said, "Well, they look sleek. They’re all black. There’s no white contact points or anything like that. That’s why they call it the Monolith." He said, "Sure." We installed that, he’s very happy. He sends me photo crops of his system production, it’s meeting and exceeding what our forecasts were. What you’re looking at here is the Santa Clara project.

This is the third project we’ve done for Santa Clara University, and you’re looking at about a 1.2 megawatt installation that generates over 2.1 million kilowatt hours annually. The estimated savings per year for the university is about $350,000. We did an integrated solar superstructure on the north parking garage, and we did elevated carports here at Leavey parking lot and a rooftop array at the Athletic Excellence Center. It’s these types of installations and these high-quality, premium modules that set SunPower apart and what we continue to look as a forward-looking commercial outlook, what we’re going to be deploying to universities, data centers, other things across the country as we start to expand our market share.

T.J. Rodgers, Chairman and CEO, SunPower: A comment on the structure of carport. Down here, you’ve got people parking their cars. This is in a university. Here you’ve got a roof which replaces a normal roof. It’s not on the roof like residential, as you put panels on a roof that already exists, you got to make sure the roof is structural. You may have to do work to begin with before you put them on. In this case, the roof is the panels. All you have is the framework below it, which is economical. What happens is the rays come down, they hit the panel, and 1,000 watts.

John Berg, CEO of Cobalt Power Systems, SunPower/Cobalt Power Systems: Yep

T.J. Rodgers, Chairman and CEO, SunPower: per square meter, 20% of that goes into the panels and turns into electricity and doesn’t go down and shine on asphalt, heat your car up to 120 degrees Fahrenheit and all this stuff. This is an important use of solar in large quantities.

John Berg, CEO of Cobalt Power Systems, SunPower/Cobalt Power Systems: What you’re looking at here, this is the Waterfront Plaza in San Francisco. You could see it’s right there by the piers in downtown. This project demonstrates not only do we use high-efficiency modules, it’s about a quarter megawatt, but we used about 554 high-efficiency solar modules for this project. One of the key engineering points is that this is a post-tension concrete roof construction. We had to use LIDAR graphing and infrared readings to find the structural points for seismic installation. What you’re looking at here is a floating array, and I’ll let T.J. talk about this a little bit, but this is pre-bifacial Monolith. If you look at what we’re able to do when we get the Monolith II bifacial out, we’ll actually be able to garner more wattage from the same rooftop. T.J.?

T.J. Rodgers, Chairman and CEO, SunPower: Yeah. These pads spread out the weight. The weight goes on a frame. This is not the standard way of doing it. This roof is on a new building, and it’s high tech. What that means is they stretch the rods, then they pour the concrete and let the concrete dry around the stretched rods. It’s tensile concrete, much stronger, then a different concrete. Much stronger. This roof is way thinner, way easier to support than a normal roof. The problem you’ve got is if you put too much pressure on a given area, you can punch through that roof. This thing was built in order to float on these pads. The accident here is now you can visualize what a bifacial panel does.

If I have glass on the front side and glass on the back side, and this is already painted a pretty good reflective white, I’ll get light to go through here. I may put more area between another stripe to let in sunlight through the rows. Typically, this will take a 470-watt panel, and the backside will take it up over 500 watts. This is Monolith II, what we were talking about.

John Berg, CEO of Cobalt Power Systems, SunPower/Cobalt Power Systems: Great. What you’re looking at here, this is one of 26 of the Greener Stores program. This is in conjunction with our partnership with SunPower, or excuse me, with Starbucks. We recently completed the Millennium project as well. These are essentially carport structures, and they’re built in the Palm Desert of California. You can see it gets a lot of energy and light from both the top and bottom. This is the Millennium solar project here, and this is about 997 kilowatts, just under a megawatt of power. We recently completed this, and it’s a beautiful installation. Whereas before it was just an empty parking lot producing no power, now it produces power for the buildings around it and also provides shade for the cars underneath. It’s a really good synergy there.

Actually, Surinder had spoke with and done an NPS rating with the customer. I don’t know, Surinder, if you want to mention the NPS rating.

Surinder Bedi, EVP of Quality and Future Engineering, SunPower: NPS basically is net promoter score, which measures the customer’s confidence and the trust with SunPower and their willingness to allow us to be a reference point for future customers as well. They recommend us to other customers as well. We have been working with this customer for almost one year now, the work has been done so beautifully, the architecture, the engineering, the procurement, the entire energy performance over this site. We talked with their team, the customer team, with their president, about their experience on SunPower on five set of questions, they gave us a very good score. The overall score was 90%, which is one of the best in class score. We are happy, the customer is extremely happy, they would like to do more business with us.

John Berg, CEO of Cobalt Power Systems, SunPower/Cobalt Power Systems: Thank you, Surinder. At SunPower, as we continue to execute complex, high-value commercial projects that demonstrate our engineering capability and expertise, we’re really driving premium quality to the marketplace and giving people a legitimate option to go with that. These milestones with the Millennium Project, Santa Clara University, the waterfront buildings in San Francisco, and most recently, the Los Altos Golf and Country Club, really demonstrate our ability to execute at a high level. Our commercial pipeline continues to expand. We have next-generation opportunities coming up, one of which is our first AI data center in Reno, Nevada, that we’re going to begin construction on next month. We’re really excited about that.

Backed by a heritage dating to 1985 here in Silicon Valley, SunPower remains committed to quality standards that exceed industry norms and premium technology solutions that position us for continued growth and a very strong commercial and residential outlook. Thank you.

T.J. Rodgers, Chairman and CEO, SunPower: This is what we’ve already shown you and why we’re happy about the future. What does that turn into numbers you can hold us accountable to? In this quarter, we expect to grow revenue to $75 million or more, we expect to reduce our operating loss, which was a, can’t use any other word than ugly $12.5 million to less than $1 million. I was tempted to say breakeven here, there is possibility for that. I don’t want to come back next quarter and be making excuses why we didn’t make the numbers. Those are the numbers. I had a three-hour meeting yesterday with the executive staff, we went over line by line and group by group. These are the numbers the executive team is committed to. To conclude, we’ve changed our company. We’ve cut millions of dollars.

The state-of-the-art Monolith and Monolith II panels, as well as the high-tech, high-margin installations by our new homes Cobalt division, we will move into the premium segment of the solar market defined by sustainable technology advantages and bring premium pricing to a very lean company. The company is lean, and it has to be lean because most of our sales now are consumer, and you compete on price. What we need is a slice of our business where we compete on energy generation, efficiency, aesthetics, and architecture. That’s our strategy. We’ve changed due to these quarters. We’ve changed significantly. A $13 million change in cost is non-trivial, and the people back at home feel that.

This always been our plan, we just want to tell you it hasn’t changed due to a surprise in Q2, where panels we had the orders for putting a line didn’t ship on time. They were late, that hit us for revenue that looks like we just were screwed up, didn’t have the orders or whatever. It’s not really true. Okay. Questions.

Siobhan Hickey, VP of Investor Relations, SunPower: Thank you. We will now begin our Q&A session. As a reminder, for those who are joining via the web, you may submit a written question via the submission box located on the right-hand side of your screen. For those joining our live Q&A, please click the raise hand located on the bottom of your screen, when it’s your turn, you’ll receive a message on your screen allowing you to speak. When you hear your name called, please accept, unmute your audio and ask your question. Our first question today comes from Gus Richard from Northland. Go ahead, Gus.

Gus Richard, Analyst, Northland: Yes. Thanks for taking the questions. Just in terms of execution in the third quarter, there’s air quality issues around the country, there’s heat waves, there’s a tight labor market. Do you anticipate or see any obstacles to getting jobs done in the coming quarter?

T.J. Rodgers, Chairman and CEO, SunPower: That’s a great question, I haven’t got our operations people here to answer it. Yes, there’s all kinds of headwinds in our industry, That’s why when we promised yesterday, we picked a number we thought we could make given those problems. Yeah, there are, and the $75 million number, not a great number in my opinion, but it’s what we thought we could do given the headwinds we’re seeing in the market right now.

Gus Richard, Analyst, Northland: Okay, thanks. Then one for Tom. Welcome to SunPower. In terms of FP&A and getting SEC filings out on time, how much work do you see in front of you in order to get the finance organization running a tight ship?

Tom Kowalczuk, Chief Financial Officer, SunPower: Excuse me. Yeah. I found the finance team is extremely hardworking. We’re also going through a process of re-implementing NetSuite and consolidating all of our statutory entities onto a single source. Once we’re able to get through that, which will happen this quarter, we will have better systems, we will have better processes, I expect much improved decision support all throughout the organization. The teams are working extremely hard right now. I’m also actively adding and enhancing the team by hiring. We’ve been interviewing quite a lot over the last four weeks while I’ve been here, and we’ve already started to bring new talent onto the team.

Gus Richard, Analyst, Northland: Okay. That’s it for me. Thanks so much.

Siobhan Hickey, VP of Investor Relations, SunPower: Thank you. The next call that we have on the line is Derek Soderberg from Cantor Fitzgerald. Go ahead, Derek.

Derek Soderberg, Analyst, Cantor Fitzgerald: Yeah. Hey, everyone. Thanks for taking the questions. T.J., bookings are strong. I’m just wondering, is cash an inhibitor to delivering on that backlog? What sort of financing options do you guys have available to you at this point? Wondering if you could maybe touch on that and if that’s an inhibitor to getting you guys back to cash flow positive.

T.J. Rodgers, Chairman and CEO, SunPower: First of all, there are, for real, no excuses for not shipping. The typical excuse would be we have to have cash to buy the panels to put on the house, and we’ve got a problem there. We’re tight on cash. We ended the quarter at $4 million in cash. The reason we had $4 million in cash is that despite working deals for a small infusion of cash to tweak it up to the $10 million I’ve talked about, at the current price, I’m not interested in selling stock if I don’t see money coming in and benefiting us by eliminating some sort of problem, and I don’t. We didn’t do it, therefore, I have to grovel a little bit on the $4 million. Are we tight on cash? Yes. The tightest point was the beginning of this quarter. We’re through that.

Right now, if you looked at my cash flow graph, and I’m not compulsive about it, but I do review it every day, and it does have six lines on it that each have different meaning of cash, and I review it. Right now, I’m looking to raise perhaps $5 million in cash to buffer us, right now our graph says we can make it clean through Q3. Furthermore, the way we’ve arranged our milestones is that when you install, you get paid. That payment, we’ve now arranged, the profit part of it comes to us, or the gross margin, and the cost part of it goes to our source of equipment. We’ve gotten that prepay kind of problem. By the way, that’s the industry. We didn’t invent that. We are looking forward to increased business equaling increased profit equaling better cash flow.

We’re tight, just say that.

Derek Soderberg, Analyst, Cantor Fitzgerald: Got it. That’s helpful. Just a little bit more detail on the 1,100 jobs. How many of those are funded today? Could you talk about what portion of those jobs needed a redesign or re-permit versus just a more simple document fix? Can you provide a little bit more detail on that?

T.J. Rodgers, Chairman and CEO, SunPower: Sure. The reason we had a breathtaking shortfall in revenue last quarter is the stuff was sitting in our line, not turned into revenue. The reason it wasn’t turned into revenue is that we did not submit it for payment because our experience has been if you submit something with a small defect even, it will hang up in their shop, and fixing something that’s in their shop as opposed to something you’re controlling that you get funding for if you submit it is a loser. We didn’t submit it. The 1,105 jobs in the fab we have, it’s about half the normal inventory. You’ll always have inventory in the line, but a double.

When you double the number of jobs in the line and you keep the same number of movements of activities per job per day constant, the line moves twice as slowly, twice more slowly by a factor of two. That’s what happened to us. We need to clean out the line, the constipation, to get back to a normal working inventory. It’s a valid question to ask. Is the stuff in your line crap that is bound up multiple ways? I can describe a horror story. I’ve lived through two of them. I created one for myself back in Complete Solaria, what happens is your funding partner says, "Oh, we have to claw back. We paid you before you should have been paid." I inherited one from the old SunPower, which we’re almost through now. You don’t want that clawback to happen.

Adjust your milestones. Then move forward without sucking up a lot of cash. You can get in trouble if your errors are significant. For example, I can describe, this is a real horror story from Complete Solaria days. Job’s in the line, it’s been in the line for one year. It hasn’t moved out. Why? Well, it hasn’t gotten a permit, it hasn’t got the approval, city approval, nor does it have PTO approval from the utility to turn it on. Why not? Well, the job itself was changed and it doesn’t match the permit. Now you have to go back and redo the permit. Maybe that was something simple like the array has moved eight feet to the south to avoid some pipes or something like that. Doesn’t matter. It’s a permit. You got to go to the AHJ.

If you go to California, you get a permit in a day. If you go to New Jersey, it’s much longer. You’ve got the job hung up, you’ve got the customer screaming, you’ve got your store, your net promoter store going to hell. Right now, most of the problems we have are minor problems that are fixable in a quarter. The number one problem, and I review it, is J-box. What’s a J-box? Well, J-box is that little electrical box and if you have a string of panels, might be 10 panels, and if you have a two-string system, power from the two strings goes to a J-box and the J-box, it looks like box hanging in your garage, goes to the system. You need to prove that the J-box is grounded, which makes sense because you don’t want a hot J-box on the roof.

Nobody’s going to argue with that. Guess what? If they didn’t take the picture because you’ve got a guy who doesn’t follow the spec, then you don’t have a picture. If he took the picture and he’s kind of not a good picture taker, then you have a blurry one. I had 11 of those as of a week ago where I wasn’t getting money because nobody took a good picture of the J-box. I can go, there’s a Pareto, it is sort of a potpourri of ordinary execution errors. We have specs. I participated in writing them. I signed some of them that prevent it if you follow them. We lost the discipline in one of our divisions of following the spec, and it’s what put the pile in the line.

We caught the pile in about a quarter, which is pretty fast actually. We will have it fixed by the end of the quarter. It harmed us, this meeting, the share price, all of that, it’s harmed us dramatically. It’s not fatal and it is fixable, and it is quickly fixable.

Derek Soderberg, Analyst, Cantor Fitzgerald: Got it. That’s all for me. Really appreciate it.

Siobhan Hickey, VP of Investor Relations, SunPower: Thank you. We have a number of questions in the queue. A good number of them are redundant, I’m going to cover a bunch of them with this one question or two-part question. There’s a lot of questions around the Q2 to Q3 revenue. The Q3 revenue, does that include the $15 million that could have been booked in Q2? Therefore, should we be thinking about the rational run rate for Q3 as really $60 million? Or is this a temporary uplift, or should we think of your timeline as being moved out in further quarters so that you would reach $1 billion late in 2028?

T.J. Rodgers, Chairman and CEO, SunPower: Great question. Shorthand, if you’re going to bonus $15 million worth of revenue, that means the orders that you took in and shipped are 75 minus 15 is $60 million, and $60 million your run rate. The answer is yeah, our run rate right now is about $60 million. There are bonusing events that occur all the time, but the model should be for analysts that you have a $60 million rate and that will increase over time.

Siobhan Hickey, VP of Investor Relations, SunPower: Thank you. We have also a large number of questions about our commercial business, which is growing. Is this something that you are focusing on short term, and will this become a growing proportion of your offering going forward?

T.J. Rodgers, Chairman and CEO, SunPower: I’ll let John answer that one.

John Berg, CEO of Cobalt Power Systems, SunPower/Cobalt Power Systems: Yeah. At Cobalt Power Systems, we’ve been in the commercial space for quite a while. Now with our integration with SunPower, we have a national footprint and we can use our engineering and design resources to support SunPower’s national installation partner network. We’re actually able to engineer and design commercial with a high quality, and premium technology that SunPower’s known for, and deploy it through our established, certified, quality-minded installation partners that we can go ahead and deliver for whether it be universities, data centers, or portfolio management. We signed up several dozen storage units as part of a large portfolio. That’s what the synergy between Cobalt Power Systems and our engineering base and our technology base here in Silicon Valley provides the nation at large through SunPower and we’re looking forward to expanding that commercial outlook. It’s a real bright spot for us.

Siobhan Hickey, VP of Investor Relations, SunPower: Thank you. We have a number of questions around share count. Are there any plans to potentially either issue debt to do share repurchases, or any thoughts about taking the company private given your share price today?

T.J. Rodgers, Chairman and CEO, SunPower: Multiple opportunities to screw up. Share count, if you go onto MarketWatch or some site and you take the declared market cap, divide it by the price, that will give you the shares that they used for the total shares for the company. That number is the number that the transfer agent uses, and that number is currently 151?

John Berg, CEO of Cobalt Power Systems, SunPower/Cobalt Power Systems: Yes.

T.J. Rodgers, Chairman and CEO, SunPower: 151 million shares, That’s fully diluted for the shares that are counted in it. The question is, have you done deals that will increase the share count in the future? We, in effect, paid for a deal that happened a long time ago, 3 years, when we did a future sale, a forward sale to a group of 3 firms on Wall Street, We just paid them off with 17 million shares, right? 17.9 million shares. That 17.9 is not on the 151, I could go through a list of deals that I’m aware of. I’ll just tell you that the 151, when everything fleshes through, and this is over time, will turn into 200. That’s where we are right now. Am I going to go private? No.

I’ve worked all my career on public companies and taking startups as a venture capitalist, like Enphase, for example, which is now worth $5 billion, making the companies worthy of being a valuable public company. That’s why I’m here. Otherwise, I’ll sit at home and day trade. No, we’re not going private, we’re not going to leave behind. Of course, that means you have to maintain your share price at a buck, that means that coming up in the future, there will be a reverse split to get our shares comfortably above a dollar. Right now we’re preliminary thinking. I got a board meeting this Friday. We will discuss it with the board and announce our intention on share count, going forward. This is something that I’m on the board, the board’s the board, they’ve got to approve this legally.

I’ll present what we want to do, we’ll announce it after the board meeting.

Siobhan Hickey, VP of Investor Relations, SunPower: Thank you. Two more here. The first one is about dedication to technology development work. Do you have a team dedicated to working on things such as the Monolith panels?

T.J. Rodgers, Chairman and CEO, SunPower: Yeah. The team is sitting right over here. He’s the quality guy. He’s the guy that enforced, by the way, the quality rules that prevented us, although we were hell-bent for shipping some crap into the field last quarter. He prevented it. He also has worked on a bifacial panel startup in his past because he’s a Silicon Valley guy. If he’s lucky this quarter, he’ll get one spoke. He’s bolstered by a guy named Dick Swanson, who’s the founder, PhD founder, a guy that I went to Stanford with. He’s got that technical expertise so we can do the roadmaps, okay? So far, we’ve been intelligent about having an R&D structure that is more than we could pay for. There I’ll mention our friends at REC. They did Monolith one.

It’s a multibillion-dollar company, and they’re working with us on the bifacial panel. This is what I would call a lightweight commercial bifacial panel. They’ve already shipped product to us. It’s in their interest to have hot products. We’re a publicly traded company that can brag about those products they’ve got. It’s a win-win kind of deal. The answer is one and a half guys, and then in the 8% of my time I have left when I’m not doing what I’m doing now, I work on it a little bit too.

Siobhan Hickey, VP of Investor Relations, SunPower: Thank you. Our last question for today is from a self-described retail investor who says, "I believe in your team, but price appreciation has been brutal. It seems that investors are calling your bluff on projections for future quarters. What insights or thoughts can you share that would calm the market regarding your plans or short-term catalysts that we can know about before the next quarterly call?

T.J. Rodgers, Chairman and CEO, SunPower: McCranie’s giving me the sideways look. He wants to talk. Go ahead.

Dan McCranie, Board Member, Marketing and Sales Lead, SunPower: It starts with bookings. Bookings is everything right now. As we mentioned before, we’ve had three strong quarters in bookings. As a matter of fact, the transactional bookings, the residential work, is at an all-time record. Right now, the team is essentially booking for Q4. Their booking numbers are pretty robust going into Q4. In terms of comfort about the primary driver of revenue, it’s bookings. Bookings was very good for the last nine months, ending last quarter at a near record with transactional bookings. We are now booking for Q4, and that’s looking pretty robust.

T.J. Rodgers, Chairman and CEO, SunPower: After bookings comes execution. Frankly, we haven’t been very good at it. The execution miss that we just suffered led to dismissals. I’ll repeat my Washington comment. To lead is to forfeit the excuses. In our company, and I’m going to get tighter on this, I haven’t been as good as I should be. I’m going to give a different job to people who can’t make the numbers. The solar industry doesn’t have, like semiconductors that I’m used to, a visceral drive to make the number. It is what it is. Your salesmen, many of them are students. They work during the summer. They go back to school. You have hot seasons, you have cold seasons. You can’t control Donald Trump, blah, blah. There’s 1,000 excuses. I’m going to focus more on execution on the executive staff, and I’ve already started.

We’ve already changed management in one of our divisions.

Siobhan Hickey, VP of Investor Relations, SunPower: Thank you. That concludes our Q&A session. I’ll turn it back over to Dr. Rogers for any closing remarks.

T.J. Rodgers, Chairman and CEO, SunPower: On the credibility thing, I get it, and that’s why I didn’t say, "Trust me, the big quarter’s still coming." I have given you numbers that I told you that I worked on three times over with the executive staff. They now know that it’s not they do the best they can for our numbers. It is our numbers that they are responsible for along with me. The answer is wait and see, and I’ve given you numbers that I believe we can achieve. Certainly, we’re going to move north a lot. Even if we miss the numbers I gave you, we’re going to move north a lot. We’ve had two atrocious quarters back to back, and they’re going to be behind us. That is one thing I do know.

Siobhan Hickey, VP of Investor Relations, SunPower: Ends our session for today. You may now disconnect.