Maxeon Solar Technologies, Ltd. Q1 FY2023 earnings call

• Bill Mulligan reported that Maxeon had a very strong first quarter, exceeding financial projections and reaching a corporate gross margin target of at least 15%. - DG business: European team led in volume, revenue, and gross margin dollars; Belgium and France had strong volume growth; Italy team exceeded volume target; U.S. DG business had strong results with higher - than - planned shipments to SunPower and new residential channel contribution; also pursuing growth opportunities in other regions and have over 17 years of market presence. - Utility scale business: Booked several new projects with repeat customers; North America supply chain sold out through 2025 and has capacity allocated for 2026 - 2027; well - positioned in U.S. utility scale market; received ESG recognitions including MSCI ESG rating increase and IBC manufacturing facilities cradle - to - cradle certification upgrade. - Technology leadership: Added Chief Technology Officer and hired Matt Dawson, a leading expert in IDC architecture, to drive technology innovation.

For the first quarter of 2023, total shipments were 774 megawatts, up 6% sequentially and nearly 60% year - on - year. Revenues were $318 million. Non - GAAP gross profit was $54 million or 17% of revenue. Adjusted EBITDA was $31 million or 9% of revenue. In the DG business, the European team led in volume, revenue, and gross margin dollars, with Belgium and France posting year - on - year volume growth of over 40%. The U.S. DG business had higher - than - planned shipments to SunPower and material gross margin contribution from the new Maxeon residential channel. In the utility scale business, several new projects were booked in the first quarter, and the North America supply chain is sold out through the end of 2025 with over 1 gigawatt of capacity allocated for 2026 and 2027 based on options supported by deposits.

• Second quarter 2023: Shipments projected between 860 and 900 megawatts; revenues projected $360 million to $400 million; non - GAAP gross profit expected $50 million to $60 million; non - GAAP operating expenses expected $42 million plus or minus $2 million; adjusted EBITDA expected $24 million to $34 million; capital expenditures projected $20 million to $26 million. - Full year 2023: Revenues estimated $1.4 billion to $1.6 billion; adjusted EBITDA estimated $95 million to $120 million; annual CapEx guidance excludes spending for U.S. manufacturing.

Forward - looking statements are subject to various risks and uncertainties described in safe harbor slides, press releases, 6 - K and other SEC filings, including potential market competition, policy changes, and other factors that may affect financial performance.

Q: Julien Dumoulin - Smith asked about channel inventory levels, impact on pricing, and margin cadence.

A: Bill Mulligan said they compete in a different market with differentiated products and inventory is solid; Kai Strohbecke added inventories are slightly up but due to seasonality. Regarding margin cadence, first quarter gross margin was 17% with 4 percentage points from one - time effect, second quarter guidance is around 14.5% gross profit margin, and expect to approach 15% gross margin by end of year.

Q: Brian Lee asked about DOE loan guarantee update, pricing in different markets, etc.

A: Bill Mulligan said still in due diligence with DOE loan program office; in Europe expect continued pricing declines with input cost reductions, in U.S. much volume contracted at fixed prices and Green Tech channel adding ASP uplift; Kai Strohbecke added Green Tech channel is ramping and in IBC had 17% quarter - over - quarter ASP increase.

Q: Philip Shen asked about margins related to SunPower contract, risk of contract converting to variable pricing, and Greentech relationship.

A: Bill Mulligan said sticking to long - term financial model with at least 20% revenue growth and 15% gross margin; Kai Strohbecke added SunPower contract is balanced and beyond the panel business is growing. Regarding Greentech, not disclosing volume plans yet but it's adding positive ASP contribution.

Q: Graham Price asked about DOE application progress and 2Q shipment ratio by region.

A: Bill Mulligan said negotiating offtake agreements through 2030; Kai Strohbecke said expect to sell about 1 gigawatt of IBC for the year, performance line products continuing to ramp for U.S. utility scale and growing in other regions like Europe and Australia.

Q: Andrew Percoco asked about demand trends in different U.S. DG channels.

A: Bill Mulligan said Green Tech channel is new and early in process, SunPower channel has long experience, and Green Tech is incremental to SunPower demand.

Q: Donovan Schafer asked about residential battery update and IBC applications.

A: Bill Mulligan said SunPower Reserve product rolled out in Australia with strong feedback and preparing to roll out in Europe by end of year; regarding IBC applications, making cell sales for niche uses and it's a market they are engaged in with good gross margins.