SunPower Q1 Earnings: Key Takeaways From The Residential Business

by Trefis Team
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SunPower (NASDAQ:SPWR), one of the largest U.S. solar equipment suppliers, published its Q1 2019 results on Thursday, missing Street estimates. Below, we provide some of the takeaways from the company’s results, with a focus on its bread-and-butter North American Residential segment.

View our interactive dashboard analysis on How did SunPower fare over Q1 and what’s the outlook like for Q2?  You can modify key drivers and arrive at your own estimate for the company’s revenues and earnings.

How did SunPower fare over Q1 2019?

  • Non-GAAP revenues of $411 million (down 21% QoQ, up 3% YoY)
  • Non-GAAP loss per share of $0.41
  • Gross margins 6%, down 90 bps QoQ and 60 bps YoY due to production ramp of next-gen panels, less favorable product mix.

How did North American residential business fare over Q1 2019?

  • NA Residential business accounts for 40% of total revenues, has higher gross margins (10% vs. 6% company average).
  • Revenues grew 14% YoY to $166.6 million driven by higher installations, QoQ decline due to seasonality.
  • Added >9,000 customers in Q1, expanded new homes backlog to about 35,000.

What’s the outlook like for the business?

  • Revenues and margins should improve over Q2, driven by seasonal trends, and the next-gen technology ramp.
  • The ramp of next-gen A-Series panels should also help bolster market share (What Does The A-Series Launch Mean For SunPower?).
  • A-Series panels have rated capacity of 415 watts vs 300 watts for most residential panels in the market, making them more space efficient while helping to cut installation costs.
  • SunPower is looking to improve customer lead generation and cut OpEx using technology such as Instant Design, which uses machine learning to speed up the system design process for homes.

How is the storage business trending?

  • Residential storage business could drive incremental growth for SunPower in the long-run.
  • Company is currently seeing storage attach rates on residential new builds of between 5% to 10% and indicated that the number could potentially rise to as high as 20% next year.
  • SunPower plans to launch the new Equinox storage offering that features an end-to-end solution from solar panels to batteries – during the second half of the year.


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