Maxeon Solar Technologies(MAXN) - 2022 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total shipments for Q3 2022 were 605 megawatts, representing a 16% sequential increase [28] - Revenue for Q3 2022 was $275 million, also a 16% sequential increase [29] - Non-GAAP gross income in Q3 was negative $16 million, an improvement of $8 million from Q2 [30] - Cash and short-term investments at the end of Q3 were $314 million, up from $180 million at the end of Q2 [35] - GAAP net loss for Q3 was $45 million, compared to $88 million in the previous quarter [35] Business Line Data and Key Metrics Changes - Distributed Generation (DG) sales in Q3 were up 25% year-over-year, benefiting from price increases and a higher mix of Maxeon six products [14] - ASPs (Average Selling Prices) increased in core EU markets, with modules integrated with power electronics accounting for over 60% of sales in Q3 [12] - Beyond the panel revenue grew sequentially in multiple markets including Belgium, Germany, Italy, the UK, and Australia [12] Market Data and Key Metrics Changes - In France, residential market share increased to over 20% in Q3, up from mid-teens in 2021 [15] - The company expects significant market share expansion in the US due to increasing demand for premium solar products and a decreasing number of alternative suppliers [11] - The US utility scale demand is projected to double over the next few years, driven by the extension of investment tax credits [21] Company Strategy and Development Direction - The company plans to focus on panel manufacturing capacity growth, US market expansion, and contributions from beyond the panel initiatives [7] - A new three-gigawatt solar cell and module factory is planned in the Southeastern United States, with an anticipated ramp-up in 2025 [23] - The company is evaluating strategies to expand Maxeon seven capacity to meet high demand in the US and EU residential markets [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive gross margins in Q4 2022 and expects to reach at least 15% gross margins by the end of 2023 [39] - The company anticipates a sequential improvement in performance driven by contracted utility scale prices and strong DG pricing in the US and EU [40] - Management noted that underutilization charges are decreasing as production ramps up, indicating strong demand [58] Other Important Information - The company is working closely with the Department of Energy to secure financing for the new factory, with a total projected investment of over $1 billion [25] - The company is also focused on optimizing ASPs and leveraging supply chain efficiencies to improve margins [16] Q&A Session Summary Question: Can you talk about the ramp through 2022 and the ability to fill volume? - Management noted strong demand in the US utility space and that underutilization is operational, not due to lack of demand [52][57] Question: How should we think about the cadence of margins? - Management expects a ramp in contributions from beyond the panel products and improved ASPs in the second half of the year [61] Question: Can you provide an update on the IBC market and technology? - Management expressed confidence in their patent protection and ongoing innovation in IBC technology [70][72] Question: Any updates on forced labor prevention issues? - Management stated that customers feel comfortable with the current supply chain and that there are no anticipated issues with IBC products being shipped to the US [81] Question: Can you provide details on the billion dollars of CapEx? - Management clarified that the billion-dollar figure includes total project investment, not just CapEx, and specific timing for spending has not been disclosed [85][94] Question: What is the status of the CEO search process? - Management indicated that the search for a new CEO is ongoing, with no specific timeline disclosed [104]