Maxeon Solar Technologies, Ltd.

Q4 2022 Earnings Conference Call


spk_0: okay ladies and gentlemen and welcome to the maxine solar technologies fourth quarter two thousand and twenty two earnings call currently open disciplines are in a listen only mode data will conduct a question and answer session and instructions with follow at that time as a reminder this conference call is being recorded i would now like to turn to come france over to your host with the robert he of maxine solar technology just search you may begin
spk_1: thank you operator it everyone welcome to let him fourth quarter twenty twenty two or into school with us today or chief executive officer they'll logan chief financial officer passed over if you strategy up there the direction better let me cover a few how qb items before he drank all over the bill as a reminder replay of this call be available later today and the investor relations page of my fans website during a call will make forward looking statements that are subject to various risks and uncertainties that are described as a farmer slide of today's presentation in a press release the twentieth and other you the filings we see those documents for additional information regarding those factors that may affect the for the can statements the have this call we have also posted a supplemental slide deck and the events and presentations page of my fans investorrelations website also we will reference certain man get measures during today's call please refer to the appendix of our supplemental slide deck as well as today's earnings press release both of which are available on that investor relations website her presentation of the most directly comparable gap measure as well as the relevant gap to narrow gap reconciliations with that let me turn the call to make him ceo downloading thank you rob and hello everyone this is my first earnings call is maxi on ceo and it it's great to be back following over twenty years of experience leading spent hours are in and operations team during my first month and a half as ceo i spent time in or california are in the headquarters of the ourself ads in asia with our sales and marketing team in europe and with employees and customers at armored my cousin mexico i was reminded by these visits that nasa has to strong competitive advantages one in the global distributed generation market and the other and us utility scale these markets author exciting profitable growth opportunities with strong customer demand for high performance panels and we have as well established presence in both of them i give great credit your executive leadership came into our board for putting maxi on in a position to take advantage of these opportunities by executing bold transformation initiative over the last two years and i'd also like to give credit to my predecessor jeff waters for leaving behind a high performing cohesive management team thanks to their efforts today we haven't updated and expanded manufacturing fleet strong sales channels in the highest margin market expanding beyond the panel revenue streams and the latest generation of the world's hi highest efficiency panel technology ready to wrap technology innovation has been a legacy strength of ours for decades going forward one of my highest priorities will be to accelerate development and deployment of more efficient and cost effective solar panel technologies that can be scaled quickly we will continue to invest and beyond the panel offerings that will improve and customer experience and provide of additional differentiation and strength in our gigi channels we will also aggressively pursue manufacturing cost reduction in operational excellence in our existing manufacturing facilities
spk_2: i believe that this combination can make the on one of the most profitable companies in the solar industry
spk_1: and now of provide an update on her fourth quarter key initiatives and accomplishments through the lens of are distributed generation and utility scale businesses guy when i'm ready our financial performance than outlook and will conclude with qnx let me start by reporting that maxi on delivered financial results in queue for that were well above plant driven by strong shipment growth solid a a fees and outstanding work by our operations group to significantly beat our cocks targets as a result we generated over twenty million dollars of gross profit and queue for and are well positioned for positive adjusted ebitda in the current quarter our dg business was led once again in volume and revenue by or european team and their strong direct to install channel shipments in europe grew more than twenty five percent year on year we are now approaching an annualised a plane that run rate abruptly one gigawatt in our european vg business or european sales network comprises over one thousand and partners and incorporate services such as direct shipping credit and person sales training and strategic business planning that make the channel fundamentally different from our competition we gain market share and several key countries including the netherlands france germany and belgium driven largely by increase shipments from our hs pv joint venture
spk_2: belgium was a particular bright spot was shipments up roughly forty percent year over year and market share and the double digit joining other long term max yard stronghold such as italy and france
spk_1: blended vg as peas and europe increased more than five percent sequentially unstable module pricing and a higher mix of power electronics shipments and were up more than thirty percent year on year
spk_2: in the fourth quarter or se module attach rate what about twenty percent of total bg shipments outside the united states
spk_1: made by france in the netherlands where ac continues to account for a majority of fails we with or easy next to continue to increase as year driven by growth in markets where ac modules are relatively new we also expect increasing revenue and profit contribution and twenty twenty three from our son our reserves storage solution and spend power drive even chargers
spk_2: a first storage orders were received last quarter in australia and our products theme is launching storage and europe soon starting in belgium italy and spain
spk_1: turning to our united states t v business we are seeing an excellent twenty twenty three demand environment terms of volume growth and price i'm like some segments of the u s gg market better experience and cooling demand max and products are positioned and segments of the market where demand for a premium product is healthy by by high cost of our locations including california the northeast a products value proposition is particularly strong in these markets because i'm a relatively small risk sizes and almond tree saving conditions both factors leading to constrained roof areas and playing to the ability of our products to deliver more power on our customers roof
spk_2: we're seeing a strong cash business in the states based on long term savings with utility rate inflation observing part of the cost increases on loans and competitive leases and pbs as alternative allowance
spk_1: also in these more mature markets installers often have fails processes engineer and around a long term value of solar rather than a simple focus on year when savings even in states experiencing some cooling demand for solar due to higher interest rates we're seeing cases of counters like of growth from installers to self long term value we're pleased to have recently announced the expansion of our son power relationship with new commercial terms for twenty twenty three and mutual exclusivity for mac the and six in the us through twenty twenty four and as we discussed last year we see opportunity and large segments of the u s residential market where sunpower isn't present and where the man for a premium modules has increased to the abrupt exit of l g
spk_2: we're excited to take advantage of this opportunity with our new us channel partnering with green tech renewables and this relationship we expect to leverage green tax unparalleled distribution capabilities and focus our energy on training is dollars on the benefits of our technology and how to translate those benefits and to improve financial outcomes for by of dollars and homeowners
spk_1: during twenty twenty three we plan to roll out elements of a multi tiered channel program in the united states similar to our european structure we're planning to exit twenty twenty three with over one hundred new maxi on channel partners in the us all incremental to powers channel we're selling are maxi on three technology and this channel which both industry leading efficiency and our new forty year warranty which offers it's dollars another unique selling proposition and provides homeowners within have peace of mind in summary our confidence in the strength of our global dg business is high we expect strong ongoing demand in europe increased availability of performance find panels from hs pv and meaningful contribution from our reserve and dried products will support continued growth in europe and australia and the you
spk_2: as we believe that the addition of our new us channeled through greentech on top of are contracted minimum by and with sunpower set us up for strong vg volume growth and twenty twenty three let's now transition to our utility scale business we remain primarily focused on the united states market where are uniquely positioned north american manufacturing footprint allows us to provide our customers with reliable supply of leading edge technology we also have a unique corporate profile anchored and strong he has t values
spk_1: which is becoming increasingly important a various stray called earth earlier this year we are honored to be the so silicon module manufacturer named on the corporate nice list of the world one hundred most sustainable corporations a welcome recognition of our focus on becoming an industry leader in sustainability our value proposition has been validated by a number of key customers who have contracted for four point two gigawatts of supply backlog extending deep into twenty twenty five was options with advanced deposits for an additional one point five gigawatts to twenty twenty seven since our last earnings call all new bookings have been secured with repeat customers and in some cases include adjustments to twenty twenty three commercial terms which i will discuss and his guidance commentary but a solid and growing mother your backlog in place our attention in this business is primarily focused on completing the ramp of our motto perk cell and module production and driving cost reduction or performance line is expected to ramp to the full one point a gigawatt of capacity by this summer on the supply chain front we're finally seeing costs decreases i key and put materials which contributed to our better than expected fourth quarter results and which support the trajectory toward achievement of our long term financial model targets within twenty twenty three
spk_2: we continue to progress with the planning of our us manufacturing facility
spk_1: and are and due diligence with the department of energy's want program office which is the final stage of the lpl process
spk_2: subject successful completion of this process we expect to significantly benefit from the ira incentive in future years as we ramp our planned us manufacturing capacity there is a lot of excitement at max the i'm currently as we expect to deliver our first adjusted ebitda positive quarter at the end of this month and are on plan to achieve our long term financial model within the next ten months and with that i'll turn it over to guy
spk_3: thank you bill and hello everyone i would have cost the driver the details of lot caught of the and and then provide guidance for the current water and the full year photo shipment for the fourth quarter worth seven hundred thirty four megawatt up twenty one percent sequentially and slightly above all guidance range of six hundred eighty two seven hundred twenty megawatts
spk_4: the growth is attributable to strong dg demand as well as operational program from our internal performance line capacity for the us utility scale market
spk_2: revenues for the fourth quarter were three hundred twenty four million dollar he has a high end of all guidance range of two hundred ninety two three hundred thirty million the primary driver was strong output from our make the call performance by motto as well as healthy as p
spk_5: the in between
spk_2: a his teeth all a top of the line id eternal were up by seventeen percent quarter on quarter supported by incremental volume shipman into the us for fun power as well as the new you add eg channel
spk_3: non get got profit in the fourth quarter what twenty one million dollar up thirty six million from the previous quarter and forty five million higher then our march and forth in the second quarter of last year
spk_4: it represents a six point four percent got profit margin and it's the highest ever since makes the and became a standalone company as well as the first positive growth margin in que one of twenty twenty one why we forecast to be engrossed marty profitable in the quarter the with i exceeded the expectations embedded in our zero to ten million died guided range the primary reasons for live out the form and were operational improvement that all performance line factories and malaysia mexico well as well as supply chain caught it specially frayed falling faster than expected
spk_2: earlier in twenty twenty two there were opportunities to like be with sprayed caught in the near term by entering into long term contract why the opportunity to ten thing at the time we believe what prices would ultimately pull back and makes the on could realize greater cost saving over time with a more flexible strategy last quarter shipping rate declined to nine faster than anticipated and hence contributed to a better than expected reside follow up and now
spk_1: polysilicon spot price decline in china have also been positive a rent the price of with aged pt which tracked market anything
spk_3: on a year over year basis the impact of total supply chain cost inflation on our caught up with thought was favorable to million dollar
spk_4: this is materially improved from the prior seven water when we saw an average unfavorable impact of more than thirty million dollar of water at the same time eight breathing a t with resulted in an uplift of forty three million providing a significantly favorable contribution to our bottom line because our performance line product for the us utility a market were interviewed less than a year ago the a clue that as no year and year compared to make the
spk_3: under utilization charges for that nine million dollar than the quota demonstrating the quench will improvement as the approach completion of the capacity rampaul a form a line florida
spk_4: i'll a fourth quarter caught up with soul included a small amount of out of market polysilicon cause which were below our guide and of one million dollar these costs were related to a long term contract executed thirteen years ago that ran until december thirty first of twenty twenty two
spk_2: with his contract knowledge fired and any remaining impact expected to be immaterial we are happy to announce that we were now he's reporting on the metric going forward
spk_3: non get operating expenses were thirty four million dollars in the fourth quarter compared to all guidance of thirty six million lot of mine have two million
spk_4: adjusted ebitda in the fourth quarter was negative four million dollar and big if it can be better than our guide and of negative seventy two twenty seven million based on the previously mentioned favorable development that impacted oliver margin
spk_1: yeah let lot attributable to stop hold dog came in at seventy six million dollar compared to forty five million in the previous water mainly driven by a forty two million dollar what on what a sweet in the mark to market valuation of our pre paid for what as well as twenty three
spk_4: a million dollar higher income tax evasion walk on water
spk_2: moving on to the balance each we close the fourth quarter with cash cash equivalents respected cash and short term investment or three hundred forty four million dollar compared to three hundred fourteen million at the end of the third quarter the iowa what fled to quench really at ninety one day
spk_1: capital expenditures in the fourth quarter was seven million dollar which was below our guide and range as he maintained payment is the why continuing to spend on our performance like a pass the teeth and other ongoing initiative
spk_2: we are very pleased to have exited twenty twenty two with a positive growth margin protectorate particularly in vg which now enjoy the much improved pot structure thanks to the successful ramp of make them think capacity and improved a as team based on our geographic up the
spk_4: my basic strategy and execution by the fealty our next financial milestones or to pose an adjusted ebitda positive water and to achieve our long term financial model including a gross margin of at least fifteen for fan and adjusted ebitda margin of at the twelve percent of sales by the end of twenty twenty three previously indicated that getting from gross margin break even to fifteen for ten attuned the following t lever
spk_2: when listening to a higher a t the till it is their contract for the ramping our one point eight gigawatt a former life ability
spk_4: increasing us residential failed a glowing beyond the panel in europe
spk_2: all while benefiting to some degree from supply chain costs improvement
spk_4: many of these leave us already now showing substantial progress and ongoing momentum forest a portion of our previously below market utility scale a as piece has been adjusted as part of a broad package of supply renegotiations
spk_2: second as bill mentioned some of the expected supply chain cost reductions have been realized sooner than expected and our d g business is benefiting from a combination of factors on both the cost and a as t sites
spk_4: as a result we now expect significant margin improvement to a in the first quarter with further progress expected and the second half of the year as you progress to watch our long term financial model with context in mind i now turn to our guidance for the first quarter of twenty twenty three and then lay out all of you for the full year we project first quarter revenues of three hundred and five to three hundred forty five million dollars the midpoint of these numbers and of our ship my guide and our product of continued a fee increases fall i b product offset by a higher make such utility good shipman you to ongoing rambo and line shipment to our us utility scale customer non get got profit is expected to be in the range of thirty to forty million dollars at the relevant guidance midpoint this represents an eleven percent growth profit margin
spk_2: the largest contributor with respect to the gradual improvement is unit cost reduction on all performance line you to ramp effects we also expect to see a p improvement you to adjustment in some of our utility scale supply agreement as well as the impact of our first quarter of ship been to make the on new residential channel together with improve pricing with power
spk_3: non get operating expenses i expected to be thirty seven million dollar plus or minus two million this includes a slight increase in hour span for beyond the panel and the us residents or channel both of which are expected to enable significant economic growth martin
spk_4: adjusted ebitda is expected to be between ten and twenty million dollars driven largely by improvements and all gross profit at the relevant guidance midpoint this represents a five percent adjusted ebitda margin and would be maxi on first adjusted ebitda positive results
spk_3: first quota capital expenditures are projected to be in the range of thirteen to seventeen million dollar
spk_2: we expect taught a topic for the year to be the range of one hundred one hundred twenty million for the completion of manufacturing capacity for performance line panel to be thought into the us market completion of manufacturing capacity for make the on thick product platform further develop the mexican seven technology and operating a pilot nine preparation of the capacity expansion for next dump them technology as well as various corporate initiative this annual tapping guide and a blue spending for any us manufacturing which we plan to find and primarily with a us department of energy known and cup semi colon bet
spk_4: previously we have not provided annual fee and a guide them
spk_1: with the majority of our transformation behind us we are pleased that we are now in a position to do so
spk_6: we project twenty twenty three revenues to be in the range of one point three five to one point five five billion dollars
spk_2: about half of these revenues are based on volume and prices that are contractually thing for the fire year for those part of our business that are not contracted at pixar and you feel well positioned to diversify and growing demand in europe and the us
spk_6: twenty twenty three four year adjusted ebitda is expected to be between eighty and one hundred million dollars achieving margin level consistent with our long term financial model before we accept the year
spk_2: at these targets and offer for a guy to imply we expect martin repeat brought up on current level with the fourth quarter expected to be all bath water on both marshall dollars and percentage of
spk_4: the ramp of all the bottom line facilities and related operational improvement a primary reliever followed by a at the expense of the utility scale as become a sitting on our twenty twenty three booking as well as incremental martin contribution from all a new residential channel lot yeah the panel prada
spk_2: with that i turned to call back to build with done the right before we go to do a day
spk_1: thank you kind as i mentioned my opening remarks michael to help make maxi on one of the most profitable companies in the solar industry by driving aggressive manufacturing cost reduction in operational excellence while capitalizing on our leadership and panel technology and global channels
spk_2: the company has a strong start and twenty twenty three with positive adjusted ebitda guidance for the first quarter and expected increasing profits throughout the year
spk_1: as we look beyond the current year we are pursuing several significant growth opportunities that we expect to drive future top and bottom line expansion
spk_2: now let's go to culinary operator please for
spk_0: staying here in a hurry mind or to ask a question simply press star one one on your telephone and wait for your name to the announce to withdraw the question seemed to press taiwan one again please stand by while we compiled a key a roster and our first question comes on the line of alexander bravo with a bank of america please proceed
spk_7: you're on your bag of yeah
spk_8: afternoon at that kill animals that here i'm a thank you very much a truly are well done and profit i got a fact i've sold to that end up i what i thought to look at the marginal flash or thing here the fourth quarter an obviously got money or the first quarter the what's the can read that through the course of the year hear me you're ready achieving a good chunk what you want to do and twenty three progress margin respective in the first quarter as far as your am suggesting you're the guy guys can you talk over that how how you get to that fifteen percent of the course the year here and to the exit run right arm and then also similarly can you talk about what be the outline looks like even for the your head considering of utility scale comments that you may
spk_1: even with that might apply for your our domestic manufacturing effort yeah hi julie and go mulligan and yeah thanks to the question yeah you know where other three are starting off twenty twenty three strong and we expect that business to continue to fro throughout the year as you probably know you for it's typically seasonally are strongest or but we also expect from maxi on specific flattered come into play here
spk_2: ah yes that's pica say if you are about that
spk_4: yeah that are the i do anything for years before the lot here on the will we put a little lie together out on a thing of our like that you want a record move on a referendum side of the last margin for directory and and go like to point out that we had quite a feat improvement a in a was profit margin on longer faces in the fourth quarter you know a few things came together we all the guided for a break even
spk_9: never about right even that the but you know of he also form that guidance as i mentioned before
spk_4: partially because of performing in our operation for the a us opponent lie and to the cause of his best great for a while thing he got a faster than we had anticipated and then as look into the fourth quarter you see bomb or even further improvements the or and both improvement are gonna come from continued improvement in our us up a volunteer as we continue to ram costs are gonna come further down i we're expecting to florida rebirth some of the law of hot the market inventory right down there that be said that always it felt a bit of a boost they only do the if we both felt and also you know we have had fun economic benefit from some of the renegotiation that the have fun with with all customers for them about delivery contract that are gonna kick in in the for water and furthermore i would point out as long as you stated you have ah renegotiated out like and expanded our extended all i ever fly agreement the fun power we got our lives there ever that any for channel
spk_9: i'm saying a your off a the very very strong area we have feet
spk_4: strong id e
spk_9: a p h d that in the fourth quarter and we expect to continue to be on the fourth quarter to live quite a lot of the say coming together year to get us to the level said that the a guiding and then we expect further improvements the add to the year as we then kind of have the highest expected performance for the and the fourth ward off and boy back to achieve our long term financial model within twenty twenty three
spk_10: got a guy for just a you want to talk to love it on the a sustainability the a thief here i mean obviously you have given the backdrop given the trend here i it is it's a nice benefit hear how do you think about cost input am and the ability to hold on the some the that
spk_1: the improve and a yourself or a passing along that you are your customer here is the course this year if you are
spk_4: will he had yeah we have really really good confident in all dixie fear that their that be put out and as a threat and all are prepared remarks about half of our a p r a lock in for the year of a fun the a fumble with actually to that deathly different from a bomb on fact at all to be have fun you know very very strong for the he pulled up for this navy or the have it all caught up in a market though
spk_9: we've with the the protection that we have put out here are really high confidence
spk_1: got access on the another the build out on the telly scale fight to seneca i can't comment on that it's a theory on the cartridges just considering how much demand there seems to be him and it's got quite that quite a statement on their prepayments yesterday actually fell again on yeah you know i'm really excited about this us project and as you may now ah i've been working about an inch you can last few years and and we've been following what became the ira legislation her closely or while there are we done things that happen in by far the administration for getting it done in and theory for their mandate in are unable to find and tell ya i a real game changer for more noble energy and new outs in a funny back with manufacturing jobs and national security or controlling our energy economy i'm getting maxi on silicon valley heritage or strong of nerve and footprint on it's to the us market really maxi and really well positioned the benefits and this and we believe project we've got out there is is really consistent with the administration's objective and dad the project economic for the club really quite favorable given the ira and senate's stuff as edition of my prepared remarks in our now into the due diligence phase with the we and in addition alasdair the last step in milan program office for a process and you know we're working to bring this capacity online as as soon as possible
spk_8: got an accent looking graphic get sick he gets it
spk_11: lock about
spk_0: thank you the camera and my mom and for i next question please
spk_12: and he comes home my line of philip share with rough m k m please proceed the guy side thanks for the questions are going to the congratulations as well
spk_13: ah on the margin an improvement in and i look back want to dig into the updated relationship with some power are you guys have been announcement earlier this year as you say guy strong and healthy one i gonna last quarter's yeah i started i
spk_14: ah some our minds
spk_12: be maybe fifty percent of your dg next
spk_15: down in two thousand twenty three down from new seventy five percent and twenty twenty two i with the expansion that relationship i can i gotta imagine some as going to take out a larger chunk of that on of your i d c volumes it was wonder if you could share with i might be ah
spk_1: and other of you volunteer as well thanks yeah hi fell on yeah you know that since our forces it's really important customer for us we're we're really excited about this relationship and as yeah i think it's it's mutually beneficial and and did had to keep it going for a long long time
spk_16: yeah i think if in terms of specific contribution towards overall volume or something yeah
spk_4: generally don't disclose that they're tired of this anymore colors you could either no not so not really much don't we don't break down our business
spk_9: bye bye customers i can refer you to a lot of ppl take the heat and see you know that that the dg business over all fun of a new faces that been going through the fourth quarter or two hundred forty four million memory from two hundred twenty eight in the third quarter well and god was the one of the regional breakdown as the other with party america you and your they intended are concerned it with a combination all of a lot
spk_12: a us utility the detail some follow us in and us with each and hot got a guy i am and i don't get it for as a quick for there you know he did share low the last corner and just are on a for looking bases given the announcement earlier this year i got an imagine incrementally there's more volume to some power than you guys have expected perhaps from
spk_1: the under
spk_9: twenty twenty that occurs in it
spk_4: a a films peter maybe i can learn the can take that one on so again as as bill said we don't i think yeah typically breakdown volume by customer
spk_9: the price for that matter i think it's fair to say that there's more volume is more demand for or product but you are busy product and we conserve and within the process of
spk_4: i've shifting some an allocation around to optimize of a e s p i in general any that means more of the plot going to the us
spk_9: where he is peter the highest in there that we have we have two options are bringing up our own new channel
spk_3: which is a very healthy a piece and also strategically important in the long term so there's a balance there between am
spk_12: to this flight to some parents fly to the new as rejection got it thank you peter on and then i did you guys i started your dealer network recently as well or maybe a month ago so your what's the risk of potential there's that dealers may jump from sunpower power to your network a that your something i do not expect at all worried that some that might happen in and as relates staggering fact he just talked about it down at our that volume looking young guy with i knew we were writing and identifying on module price decrease isn't resin solar
spk_9: from the end of last year till now i think that's dropped out recently
spk_2: has that lower cost as the price reduction their impacted you guys in any way i'm guessing at the premium segment maybe not much at all but perhaps a little bit on so just curious if you talk through some a father's dynamics
spk_12: yeah you know the as a global strategy with that greentech the nobles is really to dress portions of the market for some power is not there and if you get some the supplemental material there you can see there's there's a large sort of unaddressed pushing the market that we had together and they're just tired of dealers that the can go
spk_17: the mafi on five said so that's our goal and you know that that opened up when lg left the market fairly recently so you know what we're trying to fill that hole and dad and stay away from that is and how dealers
spk_9: great what one last one if i may i can you talk through on it what the margin structural it's like reggie our dj in europe versus the u s e i know the prices better you in the us by it his act directly correspond to a higher margins here and not young and they become throughout europe is able to any an iphone
spk_4: marsha
spk_9: why would they on the on the ivy he died
spk_4: i think we ought be fine talk about it as a as a proxy and that by the optimizing good thing for five in fact that the optimizing for a modern life go on and a yeah the reason why we're has been moving more valuable to the life of because not only that
spk_9: five or the but a margin the direction of the that the martin is is better in the right under five you're doing it
spk_4: in addition to that's another know but a job why to make it our beyond the panel business which as the establish michael you gotta admit that that talked about that
spk_9: yeah now at a point where you enjoy more than a twenty percent tax rates and you're not one of their usual up and we're starting early beyond the panel in australia and as we going to get off with a storage and i'm awfully easy charging thought up for the body bother
spk_4: initiative that we have that are going to be modern percent about the much a dollar
spk_18: no maybe i can be sad that one no to that and that is that the in our political folio currently is a little different in europe and the us than that
spk_4: in us in the european bg market we have not only are i b c products for sale
spk_9: but also a healthy dose of our a performance wine and which we source from to the joint venture so we've got a different
spk_12: personally of weapons there and rebel to increase overall going to a channel here
spk_16: in two ways
spk_19: and so the optimization are talking about really is an section across know maybe the relatively constraints i b c capacity at all so low that more than
spk_0: capacity on tap in europe with performance time
spk_20: right after guy built a guys very much i have been looking for work with you more yeah right bys
spk_9: amen for our next question please
spk_20: any cars on the line of grandly with common had fleas proceed
spk_9: hey guys good afternoon thanks for taking the questions and i apologize i i have done late calories if somebody that the nasdaq holiday events and any interest the time i dispatch gum request and i had much that my want one a lot done d e o e loan guarantee process it's ah they get an update here to do
spk_20: and elaborated to what the next steps are any kind of the timeframe on that
spk_1: second question what you're out a as even for que they seem to have jumped up double digits it is that just mix related or did you see like for like price increases maybe give us a little bit of color on that and then last week
spk_9: on our domestic con can i know you guys have been talking about being sold out the twenty five made made you as sales event into twenty six and beyond
spk_4: have you gone back in embedded any pricing up with for domestic content ad years or your customer pb you that premium i think you appear for solar talked about three or four cents of lot recently on that cause just wondering what your status is on kind of catching some of that value
spk_9: it'll once you have the three gigawatt facility up and running and know in the us they crash yeah hi brian i'm you know appears been managing that the do we project pretty closely followed him speak to that when we are with that along program office
spk_4: okay i'm actually me start with the second question first ryan madson to feel to a related so
spk_9: we did yes we did mention er sp uplift into for are specifically our our i can see prices were a significant double digits
spk_4: and so most of the s p increase we saw there was a factor of real as p strength within the individual product lines are not next issue
spk_9: have expected you a loan and we sat on her remarks that we will now in diligence phase which is the last phase of the process
spk_4: in the next next milestone of the a conditional fool out of alone
spk_9: and so we're working towards that the very hard with the with the only
spk_4: in terms of the domestic content we're not really exposed to that yeah
spk_9: since we're not manufacturing anything in the us and we haven't signed the any supply contracts yes the around or a or us factory
spk_18: and so that's with you oregon see how that plays out with we are confident it will be able to know by mid manufacturing of cells and marches in the u s we're we're confident that will be able to take credit for that that domestic content the i d c utter but if or something that was tracking for yeah
spk_9: yeah i will point out on although we're not able to take advantage of that domestic content or get a directly on with you benefit from being viewed as as a western solar provider
spk_20: with a reliable supply reliable warranties are and and and bang for balsa that that does that does give his tail and a nice and the us that market today
spk_0: and are or for a supply chain and mexico is screaming sessions
spk_21: into the insert certainly the southwest pushing for us i can appreciate other guy thing capacity thank you and when the man for our next question please and he come from the line of had l martin off with raymond james please proceed
spk_1: taking a question from when stick with the european theme arm but on me and a supply side of the equation you were hearing more and more about this european green deal industrial plan which whoa subsidize domestic manufacturing a lot like inflation reduction that and any if thou work to materialize would you for example revive the factory the you had in france
spk_9: or perhaps seek to expand your european manufacturing and some other way as yeah yeah we're gonna we're course monitor that situation that closely and
spk_4: you know i think it's it's too early of this point in time to to say how are we we would respond by them
spk_9: yeah where are we are looking at the think carefully and and if a bit ahead of the policies in place than that makes economic sense you know where will consider any any option
spk_2: yeah well maybe on cheng said one thing the years you know as well that a many of europe is it is a one term t market for us with a very strong position there and of course would be interested in bringing the same sorts of kind of total supply chain advantages that were plenty of room
spk_1: here who of our place in mexico
spk_4: what i would say is that know the industry evolves pretty quickly
spk_9: and election the technology perspective on the scale perspective
spk_22: anything that we will build in europe would be quite different from historic me what we had in france
spk_1: child without you know doing keep into into a particular jurisdictions or regions i would say that
spk_21: i'm to the extent that we decide to build something in europe it would probably be like different them up with but we were operating in the past few years yeah but we're letting and hundred and twelve maxi on you know we believe you have given our our struggle of friend and we have a lot of experience and in europe fall over a decade of experience of a very familiar we got off the town of people on the ground south hills or something like that to develop of her while position to execute on it i understood arm turning to your guidance
spk_4: be for you you're looking for this kind of back and waited ah ramp and revenue routine
spk_2: second half a year
spk_4: given that should we assume that you'll be essentially at all utilization of your existing capacity asia past mexico ah at the into for up twenty twenty three
spk_23: although the tie ah yes i think that's gonna be around a good at function we we think that some time around the middle of the year that we're gonna achieve full capacity utilization for in the felt that and then of course in the most for the
spk_21: before trying to time in between saw by the end of the year i think everything's of the ah running and humming at full capacity of that
spk_2: the us the phone line capacity
spk_1: and hell
spk_2: meet media looking little bit ahead in to twenty twenty or will there be additional expansion
spk_24: in any of your existing manufacturing facilities
spk_2: i into twenty twenty four again not not talking about the us yeah you know our our long term financial or target is to show up at least that twenty for that year on year or revenue growth
spk_9: as you have you looked back historically on we did thirty five percent last year and a center or guidance and the for guidance he can expect about the same as year a lot higher so yeah we go poverty going the other stay on that long term financial model
spk_16: we do have
spk_1: things and flight that you know will allow us to a priest capacity as financially and will be fully ramped up with that the
spk_2: the ab the t series ah capacity by the end of years i will have a full year for adoption as opposed to parcel gear opacity
spk_4: that's of bottle lacking activities going on on her
spk_21: and max max young
spk_0: six and as six technology primarily as a that will be coming online and then we do have are beyond the panel a revenue stream with be coming online so now all those shed should that really contribute strongly to twenty five four
spk_25: the with the i would add to that as we also have of course i capacity on tap at our age of city joint venture for up for sale and to europe and particular
spk_9: got it thank you very much
spk_26: think he'll moment for our next question please
spk_4: and he comes from their line of david i where the morgan stanley please proceed it has less effect my question wrath of a bit results up be making the young like and financial model i was just wondering if you know getting closer more in the face at this point i'm wondering is a natural that timeframe when he he might be a and of fresh what the like told by a tomato hodges i should be non the david i would say you know what i would like to point out that the long term financial motive stayed at least twenty percent growth and as builds of pointed out we have outperformed that or the hot the year we expect big off a form of this year and we're expecting to be roughly on it's in twenty twenty four and of course in or then some other activities
spk_9: a probably gonna kick in the on said twenty twenty four to put on the back on a higher growth or for dec three again and it also as far as the a lot profit margin and be a veto a margin it concerns all of them say that these are numbers that we wanna at leave at sea and hopefully over achieve over time for we don't see a need right now t v to that i think you know we have talked about the target modern profile offered some of our different businesses
spk_4: we actually on the ivy beside a and on the dg died i would say
spk_25: we are already at or above a don't target margin in the fourth quarter and moving beyond that in the fourth quarter as far as i did the and the
spk_2: that the phone line for me to see the concerned into the eg market and then you know some other businesses like yeah yeah the panel is there is still ramping up and is that provides a top line and bottom line growth over the next waters the so right now we we stick with all our long term financial model
spk_9: in all respects to achieve it within twenty twenty three and then we're gonna have any talk about other things at the appropriate time okay i understand that telco among in a given a strong demand or that you can seem to be less much as just wondering if you could get your later thinking on whether there's a potential to still fighting a us manufacturing facility in a sceptical of the only plasticity my computer
spk_2: as bad self financing anything about cheap for additional capacity yeah that's not something we're looking at right now and we feel like we're a pretty hard danced with that the oh yeah i'm programs like a global start there we think bird yogi around loan program is a really effective for of financing for that said that the off and eight
spk_1: yeah gadget malik fair and done nothing for males she's given up you know what the next year seven lamp and much like it is the latest outlook there
spk_9: and yeah god no i'm in a we're really excited about the max seven technology i would say one of the original developers are i did he technology so you know now that i'm back after a few years back away i just really proud that our our team continues to push the boundaries of photovoltaic technology and you know we're in a position to to increase i'm actually on technology leadership again south
spk_25: the pipeline has been running it's it's been not quite as great success it's hitting his guilt and and that efficiency targets that getting better all the time so we started laying the groundwork for mackey and seven expansion chance that some building and facilities upgrades are gonna be doing it in one of our existing facilities in the philippines that
spk_0: currently that an operation and down and yeah on will well
spk_27: be talking more about our plans later if they have a or not
spk_28: okay great appreciate color take so much
spk_9: thank you i'm i'm i'm and for our next question please
spk_29: and he comes from the line of donald unsafe have with northland capital markets please proceed
spk_16: a down congratulations on the part of my than a donavan as gives me a you lift her voice
spk_1: we can hear you die
spk_30: a time i that that a yes thank you so that you know and to graduation on budget margin that like survivor the just needed a wedding like and get here whatever highly here so very cool to see that
spk_4: i wanna turn i want to dig and on that aren't of energy longevity and a lot of people are yes question about that
spk_9: but
spk_1: could you talk about what kind of like determination they have to make it this plant with the duty of diligence process you know that are they are estimating like number of jobs created are you it it again
spk_9: you know other with applicants with i'm a limited pool the that you guaranteed for fake and maybe also helping in that context but what are the through hoops her mouth and the things you already got passed by you can kind of i know you can get a probability like you know hey we think you know ninety seven point eight three percent probability of like you may as internally and she can share it but if you're going to give us that broader contact of and what the determination dark how far you are young ready and ah you know a and are you had a pitted against other projects never limited pool to work with all that would be helpful okay adonis peter all i'll take out of is on them they'll sell a gun last month on so there's a couple the couple of your question first of all our read pitted against other projects
spk_1: what we have heard i think both
spk_9: in other from from the deal he and will be can infer from
spk_1: the funding that's been committed is that there are there is enough funding in their war chest currently to fund
spk_9: ah good project with they want to do
spk_31: and it is rooted in the past we were in a queue quite early you know ah well before the passage of the ira so i think
spk_9: we were in good position both with respect to the quality of the project the now the rest of the technology or jobs etc i don't think it's view his job to evaluate on a job now job creation basis for se but clearly written on topic of scores for on a job to create like clearly are bringing the technology scaling up and us and creating jobs you doing that is this is what they're trying to the
spk_1: okay the in i think of the other day you should think of ah
spk_9: the deal with it and of a motivating factor
spk_30: charles with the kinds of evaluations with their to do i have similar to like any other factor would you do in terms of the risk of repayment edited top of their list and what is the likelihood of repayment of the law on am not with your the the biased because we're request the project but i think both in terms of the the maturity technology this technology practice before
spk_9: we understand the might yet be get customers that i'm very eager to to take five product and coin best for episode response i i'm from outside and so as we evaluate technology rest company execution
spk_16: as the man solidity i think and like think going to have high we're getting high marks for nice after say i'm in environmental review of nepa which is a kind of a parallel path which is another milestone that we go through
spk_30: the and dans left my answer to your question and we're just at times or of i got i got answers to all the components of your blessing
spk_1: okay thank you
spk_30: the as i get squeeze and just one more you could you talk about the than i written megawatts you guys are expecting to sit and twenty twenty three am
spk_0: and as the helpful in terms of thinking about it either yeah utilization the not you or article that that that if there the a rough megawatt number that that the helpful
spk_32: i did try and don't you know we put our job on your guide and now and it's fine for the first time in our corporate history and we decided to provide have died a year on the on the revenue and one the adopt the a of august

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