SunPower Exited 2020 With $599 Million Net Income

• SunPower reported $412 million net income in Q4/2020 which for full year 2020 grew to $599 million
• Residential segment was its highest performing segment in Q4/2020 as it contributed $36 million adjusted EBITDA
• 2020 GAAP revenues were $1.12 billion and the company reported net income of $599.4 million
• It expects to meet its targets for 2021 as laid out during September 2020 Capital Markets Day
• In 2022, it expects adjusted EBITDA growth of over 40% thanks to strong policy support, growing interest in solar PV and increased demand for its residential and commercial storage solutions

US based solar power company SunPower Corp., is buoyant about its growth prospects in 2021 and 202. It expects adjusted EBITDA growth of over 40% in 2022 citing 'strong industry tailwinds, continued federal policy support as well as increased demand for its residential and commercial storage solutions'.

For 2021, the company is sticking to its targets as shared in September 2020 with 35% annual revenue growth and MW recognized growth of close to 25% (see SunPower Offers 2020 Guidance Post Maxeon Spin-Off).

Its storage system SunVault is expected to contribute $100 million to its 2021 revenues. Management said storage and energy services will be focus areas for the company this year.

Nonetheless, its Q1/2021 guidance was comparatively weak as the management guided for the company to report GAAP revenues of $270 million to $330 million with net loss of $20 million to $10 million. It hopes to recognize 115 MW to 145 MW and adjusted EBITDA is in the range of $10 million to $20 million.

As Jeffrey Osborne of Cowen reiterated, "Storage attach rates of above 30% are on track to hit the 50% long-term target and FY21 sales guide of 35% y/y growth came in higher than the >30% outlook at the Analyst Day in September."

Financial results

SunPower attributed its Q4/2020 business, when it added 13,000 new customers, to high residential demand as it contributed 24% gross margin and $36 million adjusted EBITDA. For the C&I segment, there was growth of 65% on sequential basis in terms of MW recognized.

On annual basis, the residential and light commercial (RLC) business contributed $848 million to the total annual revenues, followed by $255 million coming in from the C&I segment. "New homes also performed well as sequential megawatts grew more than 40% with strong quarterly bookings resulting in a record backlog of more than 180 MW," said CEO Tom Werner.

SunPower's GAAP revenues in the reporting quarter declined on an annual basis to $341.8 million compared to $401.6 million a year back, but in a COVID-19 impacted year, its gross margin grew to 22% (see SunPower Exceeds Revenue & EBITDA Guidance In Q3/2020). It reported $412 million net income.

On annual basis, SunPower's GAAP revenues reached $1.12 billion, growing from $1.09 billion in 2019 (see SunPower Returns To Profitability In Q4/2019). Its annual net income strongly improved to $599.4 million, from $206.8 million in 2019.

In Q4/2020, it recognized 153 MW adding to the total of 483 MW in 2020.

"While SPWR provided mixed results/guidance, management is improving GMs, and there seems to be more ahead. Many were focused on the 2021 adjusted EBITDA margin guide and were expecting >10%, though management clarified with us that this is just for the resi segment," said Philip Shen of Roth Capital Partners.