SunPower’s Q4 Revenue Falls as Higher Interest Rates and NEM 3.0 Hurt Sales

The company’s revenue fell 28% from last year

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Distributed generation, storage, and energy services company SunPower Corporation posted a fourth-quarter (Q4) revenue of $356.9 million, down 28% from $498 million last year, hurt by lower customer additions.

The company added only 16,000 customers in Q4 compared to 35,700 in the same period last year, down about 56%. Lower year-over-year (YoY) installations reflect the impact of reduced bookings due to higher interest rates and California’s NEM 3.0 net metering policy changes, as well as the winding down of NEM 2.0 installations.

The Nasdaq-listed Sunpower reported a Q4 loss of $89.5 million compared to a profit of $19.5 million last year. The declines were attributed to lower customer additions and the impact of restatements and one-time charges.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA,) a key profitability metric, turned negative in the quarter. Adjusted EBITDA loss was $67.6 million in Q4 compared to positive adjusted EBITDA of $30.6 million last year.

The company also announced $175 million in new capital financing from TotalEnergies and Global Infrastructure Partners. The funding includes $45 million of prior bridge financing, $80 million in new investment, and $50 million that is available to be borrowed upon the satisfaction of certain conditions. As a part of the transaction, it will also receive $25 million of revolving debt capacity.

“With the recent infusion of capital, SunPower is focused on driving positive free cash flow and profitability,” said CEO Peter Faricy.

FY 2023

Sunpower’s full-year (FY) revenue was $1.69 billion, down 3.3% from last year’s $1.74 billion, hurt by higher interest rates and lower installations due to California’s NEM 3.0 regulations.

The company also posted a loss of $158.5 million in 2023 versus a profit of $30 million last year, mainly due to higher interest rates and the effects of the NEM 3.0 policy in California. “2023 was one of the toughest years this industry has had to endure,” said Faircy while interacting with analysts on a post-earnings call.

Adjusted EBITDA loss was $84.2 million in 2023 compared to positive adjusted EBITDA of $70 million last year.

SunPower added 75,900 for the full year, compared to 111,600 customers added in 2022.

Last year, the company revenue grew 53% compared to 2021, primarily fuelled by the addition of 83,000 new customers, a 48% increase compared to the previous year.

The company recorded a strong recovery in the second quarter of this year when its net loss narrowed by 47% on a year-over-year basis, helped by higher bookings.

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