Financial Performance Q2 2025 Financial Highlights The company reported Q2 2025 non-GAAP operating profit of $2.4 million on revenue of $67.5 million, with operating profit remaining relatively stable despite an 18.4% sequential revenue decline due to significant cost reductions and a gross margin increase from 39% to 43%, while the cash balance saw a slight increase to $11.1 million Q2 2025 vs Q1 2025 Financials (Non-GAAP) | Metric ($1000s) | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Revenue | 67,524 | 82,740 | -18.4% | | Gross Profit | 28,761 | 32,497 | -11.5% | | Gross Margin | 43% | 39% | +4 pts | | Operating Exp. (less commission) | 17,288 | 21,875 | -21.0% | | Operating Income | 2,418 | 2,938 | -17.7% | | Cash Balance | 11,125 | 10,553 | +5.4% | - Non-GAAP financials, which are used to run the company, exclude non-cash amortization of intangibles, employee stock compensation, and one-time M&A or downsizing events6 - The Q2 2025 GAAP operating loss was ($2.718) million, which is $5.136 million lower than the non-GAAP operating income due to non-cash events like stock-based compensation ($3.717 million) and amortization of intangibles ($1.419 million)57 CEO Commentary and Performance Summary CEO T.J. Rodgers acknowledged that the Q2 revenue of $67.5 million declined faster than anticipated due to the impact of losing the ITC tax subsidy, but the company remained profitable by aggressively cutting non-GAAP operating expenses by $4.6 million and improving gross margin to 43% by focusing on more profitable market segments, believing Q2'25 was the bottom of the 'revenue freeze' and reducing headcount to 861 people - Despite revenue dropping to $67.5 million, further and faster than predicted, the company achieved a $2.42 million non-GAAP operating profit814 - Profitability was maintained through a vigorous cost reduction program, cutting operating expenses (less commission) from $21.9 million in Q1'25 to $17.3 million in Q2'25, a $4.6 million improvement8 - The company focused on its most profitable market segments, which increased gross margin from 39% in Q1'25 to 43% in Q2'258 - The company's headcount has been reduced to 861 people, who will each receive a $500 stock bonus for the quarterly performance1719 Outlook and Corporate Developments Q3 2025 Outlook SunPower forecasts modest growth for Q3 2025, with revenue expected to increase to approximately $70 million and operating profit projected to rise to about $3.0 million Q3 2025 Forecast | Metric | Forecast | | :--- | :--- | | Revenue | ~$70 million | | Operating Profit | ~$3.0 million | Subsequent Events & Management Changes Post-quarter, SunPower secured an agreement to collect $16 million in delayed accounts receivable, joined the Russell 3000 Index, and established a low-cost finance center in India, also announcing the departure of CFO Dan Foley and CLO Chais Sweat, with interim and new appointments made, and Board member Dan McCranie becoming the EVP of sales - An agreement was signed to collect $16 million in delayed Accounts Receivable from the Old SunPower New Homes business, with collections expected in Q3 and Q421 - The company joined the Russell 3000 and Russell Microcap Indices, which is expected to expand its shareholder base and increase stock liquidity22 - A low-cost finance center was created in Chennai, India, engaging with Excelencia for accounting and MylAI for process automation23 - Key management changes include: CFO Dan Foley and CLO Chais Sweat have left the company. Jeanne Nguyen is now interim CFO, and Nicolas Wenker is the new CLO. Board member Dan McCranie has become the EVP of sales242527 Stock Performance Analysis Analysis of Price-to-Sales (P/S) Ratio The company questions why its stock price is not higher, noting its Price-to-Sales (P/S) ratio is only 0.54x, which is significantly lower than the tech stock average of 2.5x and even below solar competitor SunRun's recently recovered 1.0x, despite SunPower's recent profitability Price-to-Sales (P/S) Ratio Calculation (as of 7/18/2025) | Metric | Value | Calculation | | :--- | :--- | :--- | | Market Capitalization | $141.53 M | $1.81 x 80.27M shares | | Annualized Revenue | $270 M | $67.5M x 4 | | P/S Ratio | 0.54x | $141.53M / $270M | - The company's P/S ratio of 0.54x is compared unfavorably to a basket of tech stocks (2.5x) and solar industry leader SunRun (1.0x)32 Factors Impacting Stock Price and Remediation Management attributes the low stock price to negative market reaction to the ITC cancellation announcement, aggressively worded 'Risk Factors' in SEC filings that contradicted positive earnings news, and persistent negative or outdated news from stock reporting services, which the company is addressing by aiming for a third consecutive profitable quarter, pursuing acquisitions for scale, and taking a more active role in reviewing risk factor language - The stock price was negatively impacted by news leaks of the ITC cancellation and by aggressively stated Risk Factors in the Q1'25 10Q filing, which seemed to contradict the company's reported profitability35 - The company is being negatively affected by stock services reporting outdated news, such as old bankruptcy filings from August 202437 - To address underlying issues and improve valuation, the company is focused on delivering a third consecutive quarter of profit in Q3'25 and is actively working on acquisitions to achieve a more sustainable scale36 Supplementary Information Reconciliation of GAAP to Non-GAAP Measures The report provides a detailed reconciliation of GAAP operating income to non-GAAP net income, where for Q2 2025, the GAAP operating loss of ($2.718) million was adjusted for $5.136 million in non-cash and other items, primarily stock-based compensation ($3.717 million) and depreciation/amortization ($1.419 million), resulting in a non-GAAP income of $2.418 million Q2 2025 GAAP to Non-GAAP Reconciliation ($1000s) | Description | Amount | | :--- | :--- | | GAAP operating loss | (2,718) | | Depreciation and amortization | 1,419 | | Stock based compensation | 3,717 | | Total of Non-GAAP adjustments | 5,136 | | Non-GAAP net Income | 2,418 | - Non-GAAP adjustments primarily consist of non-cash expenses such as depreciation, amortization, and stock-based compensation, as well as restructuring and acquisition costs in prior periods4344 Disclaimers The report includes standard disclaimers, cautioning that the financial results are preliminary and subject to change upon finalization of Q2'25 accounting procedures, and contains forward-looking statements regarding future performance, which are subject to substantial risks and uncertainties, clarifying that non-GAAP measures are used to supplement, not replace, GAAP results for better analysis of core operations - The report contains forward-looking statements regarding financial performance and cost control efforts, which are subject to risks and uncertainties and are not guarantees of future results38 - The financial results presented are preliminary, unaudited, and subject to change upon finalization of the quarter-end accounting procedures39 - Non-GAAP financial measures are provided as a supplement to GAAP results to facilitate analysis of the company's core operating performance by excluding certain items management does not consider indicative of ongoing operations40
plete Solaria(CSLR) - 2025 Q2 - Quarterly Results