plete Solaria(CSLR) - 2025 Q3 - Quarterly Results

Executive Summary & Business Outlook SunPower achieved record non-GAAP operating income in Q3'25 and projects continued growth and profitability through 2026, driven by strategic acquisitions and operational efficiencies Q3'25 Performance Highlights SunPower announced record non-GAAP operating income of $3.12 million in Q3'25, a significant increase from Q2'25, driven by revenue growth to $70.0 million, marking the third consecutive profitable quarter after four years of losses - SunPower achieved a post-acquisition record non-GAAP operating income of $3.12 million in Q3'25, representing 4.5% of revenue, up from $2.42 million in Q2'25[7][10] - Revenue increased to $70.0 million in Q3'25 from $67.5 million in Q2'25[5] - The company has posted three consecutive profitable quarters, following four years of losses[10] Future Outlook and Profitability SunPower forecasts continued growth and profitability, expecting record revenue of $83.3 million and operating income of $3.56 million in Q4'25, anticipating $303 million in revenue and $12.0 million in operating income for the full year 2025, maintaining profitability into 2026 - SunPower expects further revenue growth to $83.3 million with $3.56 million in operating income in Q4'25, both projected to be records[10] - Estimated 2025 annual revenue is $303 million, with $12.0 million in operating income across four consecutive profitable quarters[10] - The company expects to be profitable during 2026, with Q1'26 operating income estimated at no less than $2.0 million[10] Q3'25 Financial Results SunPower's Q3'25 financial results show increased revenue and a post-acquisition record non-GAAP operating income, alongside improved gross margins and a detailed reconciliation of GAAP to non-GAAP measures Revenue and Operating Income SunPower reported Q3'25 revenue of $70.0 million, an increase from Q2'25, with non-GAAP operating income reaching a post-acquisition record of $3.12 million, demonstrating significant improvement in profitability Q3'25 Revenue and Operating Income (GAAP vs. Non-GAAP) ($ in thousands) | Metric | Q3 2025 (GAAP) | Q2 2025 (GAAP) | Q3 2025 (Non-GAAP) | Q2 2025 (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $70,005 | $67,524 | $70,005 | $67,524 | | Operating Income (loss) | $(2,344) | $(2,718) | $3,123 | $2,418 | - Non-GAAP operating income increased to $3.12 million in Q3'25 from $2.42 million in Q2'25, marking a post-acquisition record[7] Gross Margin and Expenses The company improved its gross margin in Q3'25, reaching 46% GAAP and 48% non-GAAP, while managing operating expenses, with non-GAAP adjustments primarily excluding non-cash amortization of intangibles, employee stock compensation, and one-time restructuring losses Q3'25 Gross Margin and Operating Expense (GAAP vs. Non-GAAP) ($ in thousands) | Metric | Q3 2025 (GAAP) | Q2 2025 (GAAP) | Q3 2025 (Non-GAAP) | Q2 2025 (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | Gross Profit | $32,040 | $28,761 | $33,636 | $29,387 | | Gross Margin | 46% | 43% | 48% | 44% | | Operating Expense (Opex) | $34,384 | $31,479 | $30,513 | $26,969 | - Non-GAAP financials differ from GAAP by excluding non-cash amortization of intangibles, employee stock compensation charges, and one-time restructuring losses[6] Cash Balance SunPower's ending cash balance for Q3'25 was $4.11 million, a decrease from the previous quarter, and the company is actively in the process of raising additional capital to address its cash position Q3'25 Cash Balance ($ in thousands) | Metric | Q3 2025 | Q2 2025 | | :--- | :--- | :--- | | Cash Balance | $4,109 | $11,125 | - The ending cash balance was $4.11 million, and the company is currently in the process of raising money[7][18] GAAP vs. Non-GAAP Reconciliation SunPower provides a reconciliation of its non-GAAP financial measures, which exclude non-cash amortization, stock-based compensation, and restructuring charges, to offer a clearer view of core operating performance, with these adjustments detailed for multiple quarters, showing a shift from GAAP losses to non-GAAP profitability Reconciliation of Non-GAAP Financial Measures (Q1 2024 - Q3 2025) ($ in thousands) | Metric | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | GAAP operating Income(loss) | $(7,544) | $(9,494) | $(29,970) | $(21,501) | $1,042 | $(2,718) | $(2,344) | | Depreciation and amortization | $357 | $329 | $305 | $1,745 | $1,582 | $1,419 | $1,293 | | Stock based compensation | $1,341 | $1,229 | $1,516 | $(1,019) | $314 | $3,717 | $4,174 | | Restructuring charges | $406 | $2,603 | $21,072 | $14,835 | - | - | - | | Total of Non-GAAP adjustments | $2,104 | $4,161 | $22,893 | $15,561 | $1,896 | $5,136 | $5,467 | | Non-GAAP net Income (loss) | $(5,440) | $(5,333) | $(7,077) | $(5,940) | $2,938 | $2,418 | $3,123 | - Non-GAAP adjustments include depreciation and amortization, stock-based compensation, and acquisition-related costs (restructuring charges)[29][30] - Management uses non-GAAP measures to exclude items not indicative of core operating performance, facilitating analysis across reporting periods[26] Operational Efficiency & Strategic Growth SunPower has significantly improved operational efficiency through headcount reduction and the strategic Sunder acquisition, which expanded market reach and sales capabilities, while addressing market valuation challenges Headcount Management and Productivity SunPower has successfully reduced its headcount to a target of 829 employees, down from 3,499, even after integrating 21 new employees from the Sunder acquisition, with this cost control measure expected to drive increased revenue per employee, forecasted to reach a record $400 thousand per year in Q4'25 - Headcount reached the financial target of 829, a significant reduction from an initial 3,499, even with 21 new employees from Sunder[16] - Forecasted revenue per employee is expected to increase to a new record of $400 thousand per year in Q4'25, attributed to operational improvements and the Sunder acquisition[16] - Controlling employee expenses is identified as the primary effective cost-control method, with future earnings growth driven by revenue expansion and acquisitions[15] Market Valuation and Shareholder Value SunPower's stock is currently valued at 0.53 times sales, significantly below peer ratios of approximately 2.0 times sales, presenting a compelling investment opportunity, with this low valuation partly attributed to a low cash balance and negative disinformation from retail market data companies, which the company is actively addressing - SunPower's stock is valued at 0.53 times sales, compared to peer ratios of about 2.0 times sales, indicating a potential for P/S multiple expansion[18] - The low P/S valuation is partly due to a low cash balance of $4.1 million, which the company is addressing by raising money[18] - Negative disinformation from retail market data companies, often using bots to post outdated information on 'old' SunPower, is also impacting share price, and the company is making progress in getting this corrected (e.g., with CNET)[19][20] Sunder Acquisition Impact The strategic acquisition of Sunder Energy has transformed SunPower into the No. 5 residential solar company in the U.S., significantly expanding its market reach and sales capabilities, with the integration successfully minimizing dealer turnover and expected to more than double bookings in Q4'25 Strategic Expansion and Bookings Growth The Sunder acquisition expanded SunPower's operational reach from 22 to 45 states and is anticipated to increase Q4'25 bookings by over 2x, which translates to a 1.3x increase in revenue until new orders are installed in 2026, positioning SunPower as the No. 5 residential solar company in the U.S - The acquisition of Sunder Energy created the No. 5 residential solar company in the U.S., expanding SunPower's reach from 22 to 45 states[21] - The acquisition is anticipated to increase Q4'25 bookings by slightly over 2x, equating to a 1.3x increase in revenue until new orders are installed in 2026[21] Salesforce Integration and Management The Sunder acquisition nearly doubled SunPower's dealer salesforce from 881 to 1,744 members, with SunPower successfully minimizing turnover and integrating the sales teams into a single, unified force led by former Sunder President Eric Nielsen by deferring to Sunder's practices, particularly in recruiting and training - The dealer salesforce increased from 881 to 1,744 members as a result of the Sunder acquisition[21][22] - SunPower adopted Sunder's salesforce recruiting and training practices to minimize turnover, resulting in 195 new sign-ups from 232 inquiries[21] - The sales management teams have merged into a single 1744-member salesforce led by Eric Nielsen, former Sunder President[22] Additional Information This section provides essential background on SunPower, outlines forward-looking statements and associated risks, clarifies preliminary and non-GAAP financial disclosures, and lists company contacts About SunPower SunPower Inc. is a leading residential solar services provider in North America, offering a digital platform and installation services to support customers transitioning to energy-efficient lifestyles - SunPower Inc. (Nasdaq: SPWR) is a leading residential solar services provider in North America[23] - The company provides a digital platform and installation services for customers seeking energy-efficient lifestyles[23] Forward-Looking Statements This section contains standard forward-looking statements regarding future financial and operating performance, including revenue and profit projections, capital raising, and acquisition integration, also outlining substantial risks and uncertainties that could cause actual results to differ materially from these projections - The press release contains forward-looking statements related to Q3'25, Q4'25, 2025, and 2026 revenue and operating profit projections, capital raising, and Sunder Energy integration[24] - Actual results could differ materially due to risks and uncertainties, including the ability to implement cost controls, integrate Sunder, and global market conditions[24] Preliminary and Non-GAAP Financial Disclosures The financial results presented are preliminary and unaudited, subject to finalization, with non-GAAP financial measures provided as a supplement to GAAP, excluding items like amortization of intangibles and stock compensation, to offer insights into core operating performance - The selected Q3'25 financial results are preliminary and unaudited, subject to quarter-end accounting procedures and may change[25] - Non-GAAP financial measures are presented as a supplement to GAAP, excluding items like non-cash amortization of intangibles and employee stock compensation, to better reflect core operating performance[26] Company Contacts Contact information for SunPower's Chief Financial Officer and VP of Investor Relations is provided for inquiries - Contact information for Jeanne Nguyen (CFO) and Sioban Hickie (VP Investor Relations) is provided for company inquiries[27]