SunPower Corporation Turns Profitable In Q3/2022

• SunPower added 23,100 new customers in Q3/2022 taking its total count to 486,700
• Its backlog has increased to 33,600 new homes including multifamily homes, and 20,300 retrofit home customers
• Management cites lack of experienced installation partners and high labor costs as its challenges
• While Maxeon will continue to be its exclusive supplier, the company is exploring other suppliers as well to meet high customer demand

US residential solar installer SunPower Corporation has reiterated its previous guidance for 2022 expecting a customer growth between 73,000 to 80,000 after it exited Q3/2022 having added 23,100 new ones, a 63% annual growth riding on high demand.

With the addition of 23,100 new customers in the reporting quarter, its total tally of residential customers at the end of September 2022 increased to 486,700.

This and high prices for modules helped it offset increased installation cost to report 67% YoY improvement in revenues of $470 million. Its adjusted EBITDA also went up to $33 million, from $26.3 million a year back (see SunPower's Q3/2021 Financial Results).

SunPower also reported turning profitable in the quarter with a GAAP net income of $139.4 million, from $-42.5 million loss in Q2/2022 (see SunPower Declares Q2/2022 Financial Results).

There is also a growing backlog of 20,300 for retrofit home customers and another 33,600 new homes (up 22% YoY) including multifamily homes as on September 30, 2022, which adds to the company's confidence of meeting its annual guidance and benefit it in 2023.

It is multifamily segment where the management sees demand growing in the wake of 'current economic conditions' and high utility bills, as the company diversifies from new homes segment.

Jeffrey Osborne of Cowen however opined, "We continue to expect a slowdown in the new homes market given the macroeconomic challenges and prevailing inflation environment. We see headwinds beginning to manifest in non-multifamily construction in mid-2022. There is typically a ~6-month lag between home building activity and solar installation. This dynamic is reflected in our expectations for a more muted FY23, before the market beginning to ameliorate in FY24 and beyond. SunPower is leaning not only into the CA market, but into multifamily dwellings with its New Home business in order to offset weakness in single family demand."

SunPower CEO Peter Faricy cited lack of availability of experienced installers as the solar market grows along with rising labor costs as current challenges it faces.

As for module supply, Faricy said it will have around 25% of its installations not comprising Maxeon Solar Technologies' panels even as the spinoff remains exclusive for it, to be able to have enough panels to meet growing customer demand. In addition, SunPower is in talks to source more panels from 2 other large but unidentified panel makers.