SunPower Inc.

My name is Siobhan Hickey, SunPower's VP of IR, and I would like to welcome everyone to the first quarter 2026 earnings call. I will review a few housekeeping items before turning the call over to our CEO, Dr. TJ Rogers. All lines have been placed on mute at this time. This call is being recorded and a replay will be available within the events section of SunPower's website. Please note that today's presentation may contain projections and other forward looking statements. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in our statements. Also on today's call, we may discuss certain non-GAAP financial measures. A reconciliation of any differences between those non-GAAP financial measures and the most directly comparable GAAP financial measures are available within our press release. lastly we will be holding a question and answer session after the end of formal remarks today for those watching via the webcast you may submit a written question at any time via the submission box located on the right hand side of your screen for those joining our live q a please click the raise hand icon located at the bottom of your screen to enter the queue with that i will turn the call over to tj rogers sunpower's chairman and ceo

Good morning. We've got the Q126 results to show you this morning and answer questions. First, the top lines. Q126 revenue is $72.8 million. That was down 9% from our guidance. Our latest guidance was $80 million, so the market closed softer than we thought it would. not catastrophic, 9% down quarter on quarter is not bad, but it was weaker than we expected. This revenue alone would have impacted our operating income for a million eight, but our non-GAAP operating income was minus 12.9 million. And that is a one-time event because we added 9.9 million is spending during the quarter. We had anticipated and still do anticipate a great Q3. And we started hiring 86 people last quarter. Now we've turned it around. You've gone from plus 86 to minus 115. And our cash, was flat. We raised $41 million during the quarter. We used all of it to pay off debt, except to keep working cash at around $10 million. Since that time, and this means since the beginning of May, we've cut our costs $9.9 million a quarter. That included RIFT employees, 115. We went from 86 hires to 115 RIFTs. We installed an across-the-board four-day workweek through September. The theory on a four-day weekend comes from my prior life in semiconductors. It's extremely difficult to build up a good workforce, and the last thing you want to do in a yo-yo economy is lose your good people. So instead of having, we did have a layoff. This was focused on overhead and redundancy among our four startups. But in the sales and fulfillment area and in the install area, we went to a four-day work week. What that means is You work four days a week, you get paid for four days a week. Another way to look at that is a 25, or excuse me, a 20% pay cut. But when you come out of it, you start working another day, the people you've got remain in place, and you have less of an arduous climb back. So that was the theory on the four-day work week. We've cut our inside sales group. We had a large call center. We've cut it down to those needed to maintain our pipeline there because I use the word paradoxically. Call center sales have a lower profit margin and worse cash flow profile than our conventional sales force, which has now grown to 1,552 members. And that represents 90% of our revenue. And the inside sales group is using a lot of purchased products. It's leads from the market and we wanted to get rid of that expense. We will continue this function, but at a reduced scale with the top producers. We reduced our finance admin costs which had ballooned not. Not for any bad reason, but basically we went through an audit. It was arduous, very arduous, and we just allowed anybody to be hired, either contract or employee that we needed without restriction. Now we brought that back down. You've seen this graph pretty much all the time. It's my proxy. It's actually the way I run the company. It's a metric I can understand and people can understand. We actually run it on dollars, but I report it on headcount. So if you go back to pre-merger, there were 3,500 SunPower and Complete Solar people. We picked 1,280 of them to start the company. A year ago, Q4 was our first quarter. And then we successively dropped that target over time. We have been in a period where the target's been 820, which is very lean. And we bounce up and down around 820 as we acquire companies who will bring in 100 people, over 100 people from Ambia, for example. And then that pops us up, and then we work it back down with Synergy. Now, just this quarter, we've dropped our target to 700. We think that's doable, and we're currently at 710. Okay, I wanted to talk about that before I went into the 2026 forecast. The cuts reduced our operating expense by 9.9 million a quarter, that's done. They were too late to make Q126 better, hence the minus $12 million loss. but they will be in effect for 60 percent of the second quarter, and they will have a significant positive impact in the second quarter. The current Q226 revenue estimate is $75 million. It's up $3 million from last quarter, but still anemic, and the market is still anemic. But we are starting with our acquisitions, starting to be able to bounce off the bottom. The operating loss will be reduced to $3 million based on the cuts that I talked about earlier. So we're going to have a reasonable quarter, but a loss this quarter. And finally, a early forecast ahead. more than one quarter. But in Q3, we believe we're going to beat 96 million. I'll explain that in a little while. And at 96 million in that quarter, we will be profitable and cash flow positive. So we're going through a weak but mildly weak quarter on our way to a plan we've had all year. That plan is shown here. This particular version of the plan is the one we used to raise money. We raised $41 million in the last quarter. Here you see revenue all the way through for three years. The guidance, meaning that's what I'm telling you and I'm planning on achieving and expect to be criticized if I don't meet it, guidance, and then out here is a model. Our mission statement is to have $1 billion in revenue, and that run rate will be achieved in Q3 of 28, so that's still on target. We're still talking about a big jump in revenue in 26, and you can see that this is a non-trivial gap here. As we've shown and put on the website, it is because our acquisitions, Ambia, Thunder, Cobalt, and the recovery of new homes from the bankruptcy, they're all kicking in. And that's what we expect to give us a big jump in revenue in 2026. I put two more lines in here to show you where we are. We've done careful calculations. Our current break-even revenue, op-inc break-even revenue is $76 million. And our current cash flow break-even revenue is $96 million. So this 20 extra million. times the various yields going through the P&L is what's required to pay for the debt that we've got. And we still are anticipating big growth in Q3. I'll let Dan McCraney's here. He's running sales and marketing for us right now on a daily basis. I'll let him talk about that later. As a matter of fact, I'll let him talk about it now. Dan.

Hey, thanks, T.J. Can I get the graph up, please? Thanks. This graph is total bookings beginning in Q4-24 going on through Q1-26. Just a brief word of what this definition of bookings is. This is just not a signed home improvement contract from a customer. This is actually a signed contract plus a completion of the design plus funding approval. So it's a robust contract. high yielding bookings. That's what we use for our forecast methodology. You can see in Q4 24 all the way through Q3 at 25, the numbers were hovering around 1500 to 2500 jobs a quarter. You see a step function increase. In Q4 2025, remember we booked, we acquired all three of our major acquisitions, Sunder, Ambia, and Cobalt in Q4 of 2025. Beginning in the second half of 2024, we started seeing the results of their bookings, and you can see over 4,000 jobs were created in Q4 2025. In Q1 26, we had a record of 4,446 jobs. Now, remember, there's about a three-month lag between a booking and revenue in this particular industry. So what we're booking for in Q2 now, is beginning now, is for the first stages of our Q3 revenue plan. TJ showed you that we have a very robust Q3 numbers, a step function up from about $75 million to $130 million. TJ told you we're guaranteeing at least 96 and above that. We are currently on track in Q2 with the bookings we've got so far across all departments to meet that $130 million number. We're happy with the way the bookings are going. It's predominantly the Sunder and Ambia turn on that's occurring, particularly in the springtime when the contracts get much larger compared to the winter. So going forward in Q2-26, you're of course going to have a record in bookings, and we think we're going to have a record in bookings that allow us to do revenue in Q3 well in excess of TJ's $96 million.