US residential and commercial solar installer SunPower Corporation has reported its financials for 2023 'one of the toughest years in the industry' with a -$247 million net loss. For FY 2024, it continues to see the company running into losses, while also announcing a $175 million capital infusion from its investors TotalEnergies and Global Infrastructure Partners (GIP).
SunPower said its business in Q4/2023 continued to suffer from difficult market conditions, driven by higher interest rates and net metering policy changes in California under NEM 3.0.
Its adjusted EBITDA was in the negative at -$67.6 million and GAAP revenues declined by over 28% annually to $356.9 million. GAAP gross margin dropped from 22.8% in Q4/2022 to 3.1% in the reporting quarter.
SunPower was in the red with a GAAP net loss of -$115.6 million compared to a net income of $5.1 million a year ago. This is the 4th straight quarter of net loss for the company.
The installer has blamed higher interest rates and NEM 3.0 transition in California pulling down customer demand for its losses over the last year. It has also been in a dispute with its manufacturing spin-off Maxeon Solar Technologies regarding module contracts.
For FY 2023, it reported GAAP revenues of $1.68 billion, down from $1.74 billion in the previous year. Adjusted EBITDA was also in the red with -$84.2 million vis-à-vis $70 million positive in 2022. The net loss of -$247 million is even wider than the range it guided in late-2023 (see US Residential Solar Company Lowers 2023 Annual Forecast).
During the reporting quarter, it increased new home bookings by 18% sequentially with a 32% increase in California bookings. Comprising 16,000 new customers in Q4, its total additions during the year 2023 increased to 75,900. The total backlog of 52,100 homes in 2023 comprises both retrofit and new homes channels.
Referring to electricity price increases in the US, SunPower CEO Peter Faricy explained in a call with analysts, "Price increases continue to hit the northeastern and mid-Atlantic states and California, with nearly 28 million potential customers in 10 states seeing increases greater than 10% year over year."
He added, "We believe that these steep cost increases and the impact of grid and stability on residential customers continue to elevate the value proposition of residential solar as one of the most powerful ways to stabilize and reduce home electric bills."
The $175 million second lien term loan comes from Sol Holding, the majority stakeholder of SunPower and an indirect subsidiary of TotalEnergies and GIP.
It includes the previously funded $45 million in December 2023 and $80 million in new funding in January 2024. Another $50 million makes up the 2nd tranche that's available to be borrowed upon the company achieving certain conditions.
Additionally, SunPower has also obtained new long-term loan waivers from its financial partners, providing it access to an incremental $25 million loan commitment. The management said these actions provide it with up to $155 million of additional liquidity.
Faricy said this funding will enable the company to navigate the current industry headwinds. "With this injection of additional liquidity and working capital to our balance sheet, coupled with substantial cost reductions, SunPower is taking positive steps to position itself to succeed in 2024 and beyond," added Faricy.
Nonetheless, SunPower expects to incur a GAAP net loss in FY 2024, ranging from -$160 million to -$80 million. Gross margin on a non-GAAP basis is guided between 17% to 19%. It expects to have a positive free cash flow in H2/2024.
Faricy added, "We will provide additional guidance later in the year, after we assess the implications of the recapitalization and restructuring."
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