US domestic solar company SunPower has lowered its FY2023 guidance due to reduced consumer demand and delayed revenue recognition from longer cycle times.
The company posted a net loss of US$32 million in Q3 2023, down from a net income of US$138.4 million in Q3 2022 and a net loss of US$30.3 million in Q2 2023. In the first three quarters of this year, SunPower’s net loss reached US$115.1 million, decreasing from a net income of US$36.4 million.
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The adjusted earnings before interest, taxes, depreciation, and amortisation (Adjusted EBITDA) in Q3 was -US$0.78 million, down from US$25.3 million in Q3 2022. The adjusted EBITDA for the first nine months this year decreased to -US$10 million, down from US$37 million in the first nine months last year.
The number of new customers also dropped in Q3. SunPower only added 18,800 customers in Q3, entering Q4 with a backlog of 18,400 retrofit customers and 38,000 new homes customers. However, it added 20,400 customers in the previous quarter.
Revenue in Q3 dropped to US$432 million in Q3 2023 from US$476.3 million in Q3 2022 and US$463.9 million in Q2 2023 respectively. However, revenue in the first three quarters this year increased to US$1.33 billion from US$1.25 billion in the same period last year.
“While the industry-wide softness continued into the third quarter, we saw positive signs in September and early October, including our highest-ever month for storage sales, strong growth in SunPower Financial, and improvement in consumer demand,” said SunPower CEO Peter Faricy.
Sales of the company’s SunVault battery storage system increased by 163% quarter-on-quarter, making September the company’s largest ever month for battery sales.
SunPower reduces guidance
Looking ahead, SunPower reduced its guidance on net loss for this year between -US$165 million and -US$175 million. In its Q2 financial results announcement, SunPower’s guidance on net loss for 2023 was only between -US$70 million and -US$90 million. The updated guidance on adjusted EBITDA dropped to -US$25 million to -US$35 million, down from the previous guidance between US$55 million and US$75 million.
Sunpower also reduced its residential customer forecasts to up to 80,000 this year, down from the previous estimates of up to 90,000.
“We are reducing our 2023 guidance due to lower-than-expected consumer demand as well as delayed revenue recognition from longer cycle times. We are focused on continuing to reduce costs while prudently managing cash. With this emphasis, we are prioritising our efforts to build a stronger and more resilient company that can withstand changing market conditions,” said Faricy.
Prior to the latest financial results announcement, class action lawsuits were filed against the company amidst allegations that the company misled investors by failing to disclose that it had inaccurately reported the cost of revenue and inventory metrics.
SunPower revealed an internal control problem on 24 October, saying that “in connection with the preparation of the financial statements, the company preliminarily determined that the value of consignment inventory of microinverter components at certain third-party locations had been overstated in the range of approximately US$16-US$20 million”.
The company planned to restate the financial statements for FY 2022, as well as the first two quarters this year.