Philip Shen

Philip Shen inquired about the challenges in residential solar due to delayed FEOC guidelines, how Sunrun is navigating these, potential risks from further delays, and the impact on the tax credit transfer market. He also asked for an update on the outlook for shareholder returns, including potential buybacks.

Answer

CEO Mary Powell stated that initial FEOC guidance aligned with Sunrun's expectations, playing to its strengths as a vertically integrated player. CFO Danny Abajian added that while the guidance was helpful, further clarity on prohibited foreign entity rules is awaited by some market participants, affecting tax credit pricing. Abajian reiterated the focus on paying down over $100 million in parent debt in 2026 to meet leverage targets, with remaining cash for safe harbor investments, before considering other shareholder returns.

Philip Shen from Roth Capital Partners questioned the challenges facing residential solar due to the delayed release of FEOC (Foreign Entity of Concern) guidelines, their impact on the tax equity and transfer markets, and how Sunrun is navigating these issues. He also asked for an update on Sunrun's outlook for shareholder return and capital allocation.

Answer

CEO Mary Powell stated that the initial FEOC guidance was as expected and played to Sunrun's strength. CFO Danny Abajian added that while the guidance was incrementally helpful, further clarity on prohibited foreign entity and foreign-influenced entity rules is still needed, which has sidelined some market participants. Abajian noted that the tax credit transfer market grew significantly in 2024, but corporate appetite eased in H2 2025, leading to softening price expectations. Regarding capital allocation, Abajian reiterated the focus on paying down over $100 million in parent debt in 2026 to get below the 2x leverage target, with remaining cash allocated to high-returning safe harbor activities, before considering broader shareholder returns.

Philip Shen of Roth Capital Partners asked about Sunrun's contingency plan if ITC guidance is made retroactive and inquired about the tax equity market, noting challenges for the residential solar category and potential impacts on pricing.

Answer

CEO Mary Powell asserted that Sunrun can generate attractive returns even without the solar ITC, mitigating the risk of retroactivity. CFO Danny Abajian acknowledged a temporary slowdown in the tax equity market for due diligence but stressed that Sunrun's strong originator quality and unit margins are key differentiators for capital providers.

Philip Shen followed up on the IRA transferability issue, asking for specifics on how Sunrun would manage the transition if it were removed. He also inquired about the current state of the tax equity market and supply dynamics.

Answer

CFO Danny Abajian responded that if transferability were removed, the company would become more reliant on the traditional tax equity market, where it has a strong historical presence. He emphasized that Sunrun's diversified and growing buyer universe for tax credits remains robust, and in an uncertain market, there could be a 'flight-to-quality' benefit for a reliable partner like Sunrun.

Philip Shen inquired about the current dynamics in the tax equity market, including potential slowdowns and changing payment terms, and also asked about the supply status of Tesla's Powerwall 3.

Answer

CFO Danny Abajian reported a healthy tax equity market, having raised over $1.3 billion in 2025, with a broadening universe of transfer credit buyers and stable pricing. President and CRO Paul Dickson added that Powerwall supply is 'generally in great shape' and that Tesla remains a strong partner.

Philip Shen requested a regional breakdown for the projected 10-15% solar installation growth in 2025. He also asked about potential supply chain issues for the Tesla Powerwall 3, noting reports of long lead times for smaller installers.

Answer

CFO Danny Abajian highlighted California as the largest and fastest-growing market, with other strong spots in the Northeast, Illinois, Puerto Rico, and Texas, but declined to provide specific market growth rates. President and CRO Paul Dickson stated that Sunrun has experienced 'very much the opposite' of supply shortages for Powerwall 3, viewing Tesla as a key strategic partner. He also noted Sunrun is launching new battery hardware in Q1 to diversify its offerings.

Philip Shen from ROTH Capital Partners asked for key milestones to monitor regarding the implementation of China's mandatory national standard for polysilicon production, the revised Anti-Unfair Competition Law, and the Draft Amendment to the Pricing Law, to gauge progress in industry structure and consolidation. He also requested Daqo New Energy's polysilicon price outlook for Q1 and Q2 2026, and for the full year, in addition to inquiring about the potential for further cash cost reductions by the end of 2026.

Answer

Deputy CEO Anita Xu noted the lack of clarity and transparency on policy details, making it difficult to specify exact monitoring milestones, but highlighted pricing recovery as a positive sign. CFO Ming Yang added that a high-level government meeting discussing the next five-year plan and anti-involution progress is an important event to monitor. Ms. Xu projected polysilicon prices to remain around RMB 53-54 per kilogram in the coming quarters, aligning with the industry-level cost and the Pricing Law. Mr. Yang stated that cash costs are expected to be similar to Q4 2025 levels in Q1 and Q2 2026, with further reductions anticipated in the second half of the year.

Philip Shen inquired about key milestones for the implementation of China's mandatory national standard for polysilicon production, the Anti-Unfair Competition Law, and the Draft Amendment to the Pricing Law. He also asked for the polysilicon price outlook for Q1 and Q2 2026, and the potential for further cash cost reductions by the end of 2026.

Answer

Deputy CEO Anita Xu noted the difficulty in providing exact milestones due to a lack of transparency but highlighted pricing recovery due to laws preventing sales below cost. CFO Ming Yang added that a high-level government meeting on the next five-year plan and anti-involution progress should be monitored for more policy details. Ms. Xu projected polysilicon prices to be at least RMB 53-54 per kilogram for Q1 and Q2 2026, depending on consolidation pace. Mr. Yang expected cash costs to remain similar to Q4 2025 levels in Q1 and Q2 2026, with further reductions in the second half of 2026 due to efficiencies and lower energy costs.

Philip Shen inquired about Daqo New Energy's gross margin trends, specifically asking for expectations for Q3, Q4, and 2026, and the impact of inventory impairment. He also questioned the polysilicon industry's persistent overcapacity, even after overhaul efforts, and what further actions Daqo and the industry could take to balance supply and demand, including potential capacity shutdowns and government initiatives.

Answer

Ming Yang, CFO, confirmed positive gross margins for Q3 2025, driven by increased selling prices, reduced per-unit costs, and inventory write-down benefits, expecting Q4 and 2026 to also be positive. Anita Zhu, Deputy CEO, acknowledged continued oversupply but stated that production volumes would be balanced with demand through lower utilization rates. She highlighted ongoing anti-involution initiatives and a new mandatory national standard on energy consumption as key positive catalysts for industry consolidation and healthier competition.

Philip Shen asked about the timeline for eliminating polysilicon overcapacity, which competitors have exited the market, and the expected trend for industry utilization rates through 2025. He also inquired about the outlook for demand in China after the May 31 policy change.

Answer

Executive Anita Zhu explained that the supply/demand rebalancing will take longer than in previous cycles as competitors have strong financial backing, and no players have completely exited yet, only reduced utilization. She noted current industry utilization is 40-50% and expects inventory depletion to take at least four months, with prices remaining suppressed in the RMB 35-40/kg range for the rest of 2025. For China, she projected full-year 2025 demand of 250-300 gigawatts, viewing the new policy as a positive long-term shift to a market-driven model despite near-term uncertainty.

Philip Shen of Roth MKM inquired about potential Chinese government policies to curtail polysilicon production based on energy intensity. He asked about the timing of such policies, their potential impact on market capacity, and the near-term outlook for polysilicon pricing with or without these reforms.

Answer

Deputy CEO Anita Zhu acknowledged ongoing discussions with industry associations (CPIA) and government bodies about production cuts to address oversupply. CFO Ming Yang added that while the timing is uncertain, potentially late 2024 or later, China has a history of successful supply-side reforms. Mr. Yang stated that while pricing is complex, the company believes it has bottomed, though the timing and magnitude of a recovery remain unknown.

Philip Shen requested clarification on Array Technologies' quarterly gross margin cadence for 2026, specifically if Q1 margins would be lower due to lower revenues and then ramp sequentially. He also asked about the strength of bookings in Q1 and Q2 2026 and the sustainability of the strong 2x book-to-bill ratio.

Answer

CFO Keith Jennings confirmed that Q1 2026 margins are expected to be similar to Q4 2025 due to revenue levels, with the full-year guidance of 26%-27% representing the average. CEO Kevin Hostetler declined to forecast specific bookings for Q1 and Q2 but noted that the strong momentum seen in recent quarters has continued, with an increasing pipeline, earlier engagement in larger deals, and improved win rates for both legacy Array and APA.

Philip Shen asked about the expected quarterly gross margin cadence for 2026, particularly whether margins would be lower in Q1 due to lower revenues and then ramp sequentially. He also inquired about the continuation of strong book-to-bill ratios.

Answer

CFO Keith Jennings confirmed Q1 2026 gross margins are expected to be similar to Q4 2025 due to revenue levels, with a sequential ramp towards the full-year average. CEO Kevin Hostetler noted that strong momentum in bookings has continued for both legacy Array and APA, with an increasing pipeline.

Philip Shen of Roth Capital Partners, LLC asked if the period of de-bookings and VCA issues is now fully past, and what the company expects from the upcoming executive order decision and its potential impact on bookings.

Answer

CEO Kevin Hostetler and CFO Keith Jennings clarified that this quarter's VCA adjustment was a proactive and positive cleanup, and other de-bookings have not been an issue due to a more conservative booking policy. Regarding the executive order, Hostetler declined to speculate on the outcome but affirmed that Array has prepared for multiple scenarios to support its customers.

Philip Shen questioned Array's potential exposure to project delays in 2025 and early 2026 due to battery supply chain challenges from China tariffs. He also asked how potential reciprocal tariffs could impact shipments and revenue in the second half of the year.

Answer

CEO Kevin Hostetler stated that for 2025, customers have indicated solar-plus-storage projects are proceeding as planned since necessary components are already in-country. He does not expect reciprocal tariffs to impact H2 2025 shipments, as most components are in motion and customers see more disruption in slowing down projects than proceeding.

Philip Shen from ROTH Capital Partners questioned the structural gross margin difference compared to a key peer and asked about the company's plan to accelerate bookings, which appear to be lagging.

Answer

CFO Keith Jennings explained that differences in scale, market mix, and operating models contribute to margin variations, reiterating Array's focus on achieving sound mid-20s margins independent of 45X. CEO Kevin Hostetler stated he is pleased with Array's win rate on the projects it competes for and will not compare booking methodologies. Jennings suggested that Remaining Performance Obligations (RPO) is a more standardized GAAP metric for comparison.

Philip Shen asked for the gross bookings figure for Q3, details on any de-bookings, the outlook for Q4 bookings, and the portion of the backlog designated for Brazil.

Answer

CEO Kevin Hostetler noted the order book remained flat at $2 billion, with muted Q3 activity due to election and AD/CVD uncertainty. He highlighted positive momentum, citing a U.S. opportunity pipeline that is 3x larger year-over-year and strong traction for new products like OmniTrack and SkyLink. He declined to provide a specific bookings number or break out the backlog by region.

Philip Shen asked why there was no EPS guidance for 2026. He also questioned the implied U.S. ASP for 2026 guidance, which seemed lower at $0.308 compared to $0.324 in 2025. Finally, he inquired about Oxford PV, asking about current efficiencies, test module results, and the timing for commercial volume ramp of perovskite technology.

Answer

CFO Alex Bradley explained the shift to Adjusted EBITDA guidance for 2026, citing better comparability, significant underutilization and startup costs, and potential noise from Pillar Two tax accounting. He confirmed the $0.308 U.S. ASP for 2026, attributing it to the backlog's base ASP with minor uplifts from freight, commodities, and limited tech upside, noting that most CuRe adjuster value ($0.03/watt) will be realized in 2027/2028 due to timing. CEO Mark Widmar added that 2025's higher reported ASP was influenced by contract terminations. Regarding perovskite, Mark Widmar described current small form factor module development, achieving 'best in class' efficiencies and stability. He highlighted ongoing challenges with metastability, encapsulation, and scaling to full-size modules for high-volume manufacturing, aiming for 20%+ efficiency, competitive LTR, 70% bifaciality, and mid-teens tempco, with a pilot line for full-size modules expected to inform commercial readiness.

Philip Shen (Roth Capital Partners) asked why First Solar is not providing an EPS guide for 2026, questioned the implied U.S. ASP for 2026 (around $0.308) which seemed lower than 2025's $0.324, and sought details on Oxford PV, including achieved efficiencies, test module performance, and timing for commercial ramp.

Answer

CFO Alex Bradley explained that the shift to Adjusted EBITDA guidance provides a clearer view of operational performance due to significant underutilization and startup costs, and potential noise from Pillar Two tax accounting. He confirmed the $0.308 U.S. ASP for 2026, attributing it to the backlog's base ASP with limited upside from CuRe due to contractual notification timings, with most CuRe-related adjusters expected in 2027/2028. CEO Mark Widmar added that 2025's ASP was uplifted by contract terminations. Regarding perovskite, Mark Widmar described current small form factor module development, highlighting best-in-class efficiencies and stability, but emphasized ongoing challenges with metastability, encapsulation, and scaling to high-volume manufacturing for 30+ year product endurance. A pilot line for full-size modules is planned for early 2027, with commercial readiness dependent on further progress.

Philip Shen of Roth Capital Partners, LLC asked if the $0.32/watt price for international modules implies that domestic modules could be priced in the high thirties. He also inquired about remaining inventory levels and the catalysts needed for new capacity expansion announcements.

Answer

CEO Mark Widmar stated that domestic supply is largely contracted through 2028 and emphasized the strategic opportunity to establish U.S. finishing lines for international modules. This would mitigate tariff impacts, qualify for assembly tax credits, and get products to market faster. CFO Alex Bradley added that greater clarity on the long-term tariff regime is a key factor needed before making final expansion decisions.

Philip Shen asked about the outlook for bookings following new tariffs, requested more detail on Series 7 and Series 6 module performance issues, and inquired when customer delivery schedules might normalize.

Answer

CEO Mark Widmar explained that while tariff uncertainty has increased customer inquiries for its domestic products, the company is remaining patient on pricing until IRA policy is clear. He confirmed a third-party report validated Series 7 production fixes and that settlements with affected customers are being finalized. For Series 6, he reiterated that First Solar will honor all warranty obligations. Widmar stated that delivery velocity is unlikely to improve soon as project-level uncertainty has worsened.

Philip Shen asked about the Series 7 warranty issue, seeking confirmation that production problems are solved, whether the $100M expense is a firm cap, and the risk to future sales from customers with underperforming projects.

Answer

CEO Mark Widmar confirmed that the manufacturing issues have been corrected and a third-party assessment is underway. He stated the $56M-$100M warranty range is the company's best current estimate. Regarding customer relationships, Widmar emphasized that First Solar will honor its contractual warranty obligations and believes the company's long-term partnerships will remain strong despite the issue.

Philip Shen of Roth MKM inquired about First Solar's potential to qualify for the CHIPS ITC, the reason for a slight decrease in recent U.S. booking ASPs, and the future utilization strategy for its India manufacturing facility.

Answer

Executive Mark Widmar stated that First Solar is actively evaluating its eligibility for the CHIPS ITC for its new U.S. facilities. Regarding India, he explained that due to Chinese dumping, the facility is pivoting to produce higher-margin tracker products for the U.S. market and is currently running at full utilization. Executive Alexander Bradley clarified that the recent U.S. ASP of $0.304/watt was for a small volume and that the overall gross bookings were impacted by lower-priced India sales and a sale of aged inventory, with the core U.S. ASP reaching up to $0.32/watt with adjusters.

Philip Shen asked about the conversion of the $1.5 billion to $2 billion gas generation bidding activity into revenues for 2026 and 2027, and later inquired about the Q4 renewables margin performance, the challenges encountered, and the measures taken to prevent recurrence.

Answer

President and CEO Koti Vadlamudi stated that the gas generation opportunities have a meaningful burn in 2026 with a line of sight to nearly $6 billion in the overall funnel. Regarding renewables, Mr. Vadlamudi explained that underappreciated geotech and soil conditions led to cost overruns, which were compounded by equipment and labor escalation. He expressed confidence in remedial measures, including increased investment in project leadership, as the project is at its midpoint.

Philip Shen asked about the conversion rate of the $1.5 billion to $2 billion gas generation bidding activity into revenue for 2026 and 2027, and sought more details on Q4 renewables margin performance, including the causes of challenges and measures taken to prevent recurrence.

Answer

Koti Vadlamudi, President and CEO, confirmed a solid funnel for gas generation, with the $1.5 billion to $2 billion representing first-half opportunities with meaningful 2026 revenue burn and a $6 billion overall line of sight. Regarding renewables, he attributed margin issues to underappreciated geotech/soil conditions, ineffective mitigation, and labor escalation, noting increased project leadership investment and confidence in remedial actions. Ken Dodgen, CFO, offered to add further details.

Philip Shen inquired about the new gross margin outlook of low to mid-thirties, how long this range is expected to persist, and the extent to which pricing adjustments are driving this new margin profile.

Answer

CFO Dominic Bardos explained that the 2026 margin outlook is influenced by transitory tariff impacts, inefficiencies from the new mega-facility transition (expected to be complete by Q2 2026), and product mix dilution from new offerings. He anticipates Q1 2026 to have the lowest margin percentage, with improvements later in the year, but ruled out 40%+ margins in the near term. CEO Brandon Moss added that the market remains strong, with robust quoting activity and accelerated core business growth in H2 2025.

Philip Shen inquired about Shoals' new gross margin outlook of low to mid-thirties, asking about its expected duration beyond 2026 and the impact of pricing adjustments. He also asked for clarification on changing customer order patterns and the anticipated quarterly revenue cadence for the year.

Answer

CFO Dominic Bardos attributed the 2026 margin outlook to transitory factors like tariff impacts (especially in H1), inefficiencies from the new mega facility move (H1), and product mix dilution from new offerings. He expects Q1 to have the lowest margin, with improvements later in 2026 and higher margins in 2027, but clarified that 40%+ margins are not expected near-term. CEO Brandon Moss added that the market remains strong, with accelerated core business growth (30% in H2 2025) and strong book-to-bill ratios (Q1 1.1, Q2 1.2, Q3 1.4, Q4 1.2). He projected a revenue cadence of approximately 45% in H1 and 55% in H2.

Philip Shen from Roth Capital Partners, LLC asked for color on the outlook for 2026 given the healthy backlog, and requested context for the implied negative free cash flow in the full-year guidance.

Answer

CEO Brandon Moss pointed to the strong $540.3 million in BLAO for the next four quarters as a positive indicator for 2026 but did not provide specific guidance. CFO Dominic Bardos explained that the negative free cash flow is due to working capital investments to support significant revenue growth and cash used for warranty remediation, noting both are expected to decrease by year-end.

Philip Shen from ROTH Capital Partners asked about bookings velocity for projects starting in late 2026 and 2027 and the impact of the tariff environment. He also followed up on the BESS outlook, questioning how potential tariffs on Chinese battery cells could affect Shoals' solar and storage projects.

Answer

CEO Brandon Moss stated it was too early to comment on 2026/2027 but noted strong underlying demand from data centers is strengthening the market. Regarding BESS, he said the company is not currently seeing an impact on project timelines for 2025-2026. He added that since Shoals is starting from a low market share in BESS, it can achieve strong growth in any market climate, and noted that other battery technologies may be less affected by the tariffs.

Philip Shen of ROTH Capital Partners questioned the near-term gross margin outlook for 2025, including the expected cadence throughout the year. He also followed up on bidding activity after the Voltage ITC case reversal and its potential impact on pricing.

Answer

CFO Dominic Bardos indicated that Q1 2025 margins would be pressured by lower volume but are expected to improve through the year with increased volume and a favorable product mix, though the facility move could create inefficiencies. CEO Brandon Moss added that Shoals continues to compete on quality and service, and commercial activity has not changed post-reversal, noting the filing of a new ITC case and an appeal of the previous one.

Philip Shen inquired about the potential for the book-to-bill ratio to exceed 1.0 in Q4 and asked for management's perspective on the impact of the recent election results on the U.S. utility-scale solar market.

Answer

CFO Dominic Bardos confirmed that achieving a book-to-bill ratio over 1.0 is the target for Q4. CEO Brandon Moss addressed the election by highlighting the fundamental need for power, bipartisan support for solar jobs, and solar's strong economics, expressing confidence that the industry will remain strong regardless of potential policy shifts.

Philip Shen asked about Quanta's initiatives to leverage AI for OpEx reduction, its potential impact on OpEx in the coming year or two, and sought clarification on bidding and booking dynamics, specifically if renewables are booked out through 2030, similar color for other segments, and the amount of work being turned down.

Answer

Duke Austin, President and CEO, clarified that Quanta is 'booking through' 2030 for renewables, not booked out. He confirmed active exploration of AI to lower OpEx, particularly in engineering (2,000+ engineers), and to enhance field productivity. He emphasized reinvesting AI-driven savings into further AI initiatives and managing the social aspect of displacement by growing and upskilling employees. He did not provide specific details on other segments' booking dynamics or work turned down.

Philip Shen asked about Quanta's initiatives to leverage AI for OpEx reduction, whether AI could meaningfully change the OpEx outlook in the coming year or two, and for similar booking dynamics color for other segments, clarifying if renewables are truly booked out through 2030. He also asked how much work Quanta is currently turning down.

Answer

Duke Austin, President and CEO, clarified that Quanta is *booking through* 2030 for renewables, not booked out, and is open to all comers. He confirmed that Quanta is actively exploring AI to reduce OpEx, particularly in engineering, where they have over 2,000 engineers. He expects AI to significantly affect productivity and stated that any savings would be reinvested into AI initiatives, emphasizing Quanta's commitment to growth and developing its workforce.

Philip Shen from Roth Capital Partners asked about Quanta's ability to pull forward renewables work ahead of the ITC wind-down and the company's outlook for the renewables market post-2027. He also followed up on Q2 core growth.

Answer

President & CEO Duke Austin and CFO Jayshree Desai both expressed confidence in the renewables market, citing the low cost of energy and strong customer demand. Desai noted that many tier-one customers have safe-harbored projects well into 2028-2029 and that Quanta's experience navigating regulatory dynamics is an advantage. Regarding core growth, Austin stated the company is growing EPS organically near double digits and revenue in the mid-single digits, with a focus on quality of earnings over top-line figures.

Philip Shen asked about the potential impact on interconnection work if coal plants are not decommissioned as expected, and whether Quanta's 2025 forecast for renewable construction starts has changed since year-end 2024.

Answer

President and CEO Duke Austin stated that the outlook for 2025 renewable construction starts remains steady and is climbing. Regarding coal plants, he sees opportunities regardless of their operational status, through either co-locating new gas generation or upgrading transmission infrastructure, highlighting a robust project pipeline for the next two decades.

Philip Shen asked for insights into SolarEdge's expected revenue and margin trends for Q2 2026 and beyond, including anticipated historical seasonality and directional magnitude. He also inquired about 2026 free cash flow expectations and competitive dynamics in the European market, particularly regarding VAT rebates, the Nexis platform, and storage focus.

Answer

Asaf Alperovitz, CFO, indicated typical Q2 seasonality of 15%-20% revenue growth, driven by the TPO shift, Nexis rollout, and C&I opportunities in the U.S., alongside European market dynamics. He detailed margin levers including higher revenue, U.S. production ramp, Nexis, the shift to LFP batteries, and the single SKU framework. For free cash flow, Alperovitz confirmed positive FCF for Q1 2026, emphasizing continued focus on cash conversion and working capital management. Shuki Nir, CEO, discussed Europe's slow market but highlighted opportunities for share gains due to U.S.-made products, the Nexis launch (March 19th in Germany), its DC architecture efficiency, and operational excellence from the single SKU concept.

Philip Shen asked for color on expected revenue and margin trends for Q2 2026 and beyond, specifically if historical seasonality would apply and the potential magnitude of changes.

Answer

CFO Asaf Alperovitz stated that while they don't guide beyond the next quarter, Q2 typically sees a positive seasonal driver of 15%-20% revenue increase. He outlined 2026 drivers including the U.S. TPO shift, the Nexus platform rollout, U.S. C&I opportunities with domestic content/FEOC compliance, and European market share expansion driven by U.S.-made exports and the Nexus. For margins, he noted Q1's slight dip due to seasonality, mitigated by U.S. product sales and single SKU efficiencies, with longer-term levers including higher revenue, U.S. production ramp, Nexus (NMC to LFP shift), and the single SKU framework. Philip Shen also inquired about free cash flow expectations for 2026 and competitive dynamics in the European market, including the impact of VAT rebates, the Nexus platform's advantages, and the focus on storage. CFO Asaf Alperovitz reiterated positive free cash flow for Q1 2026 but did not guide beyond that, emphasizing focus on cash conversion cycle. CEO Shuki Nir discussed opportunities in Europe despite a slow market, citing U.S.-made exports with better cost structure, the Nexus launch (March 19 in Germany) with its system design, high efficiency at both high and low kilowatts, and operational excellence from the single SKU concept.

Philip Shen inquired about the potential for additional safe harbor deals in the C&I segment and asked for color on the puts and takes for gross margins in 2026. In a follow-up, he asked for confirmation of a rumored 10% price cut in Europe effective August 1.

Answer

CEO Shuky Nir stated that while SolarEdge is well-positioned for any potential safe harbor deals, he would not comment on specifics. He also explicitly denied any recent, broad-based price cuts in Europe. CFO Asaf Alperovitz noted the company expects to fully offset tariff headwinds in 2026 through production diversification and potential pricing actions, with new products and higher revenue also serving as key margin levers.

Philip Shen questioned the status of the European pricing promotion initiated in November, asking if the recovery period would be extended and how EU ASPs are expected to trend. He also inquired about a potential power shift from pan-European to local distributors.

Answer

CEO Yehoshua Nir indicated that as most European distributors are expected to reach normal inventory levels by the end of Q2, the need for incremental pricing support should decrease. He noted the company's pricing strategy remains focused on competitiveness and value. Regarding distributors, he stated SolarEdge values all partners and would gain more insight at the upcoming Intersolar conference.

Philip Shen sought more details on the customer related to the $25.5M revenue restatement and asked about potential future price actions in Europe and the company's strategy against new integrated offerings from competitors.

Answer

CFO Ariel Porat declined to provide further customer details. CEO Yehoshua Nir stated no new significant price moves are planned until Q2 results are assessed. He positioned SolarEdge as a premium solution competing on its software suite, higher energy generation via MLPE, and superior safety and cybersecurity features.

Philip Shen of ROTH Capital Partners asked for quantification of the revenue undershipment versus sell-through in Q3 and Q4, and questioned the effectiveness of the EU price cuts, citing channel checks suggesting they may not stimulate demand due to high existing inventory.

Answer

Interim CEO Ronen Faier confirmed the Q3 undershipment was significant, with sell-through at $450 million versus shipments of about $240 million. He stated it's difficult to quantify future undershipment due to many moving parts but believes the price actions will accelerate channel clearing. He acknowledged the price cuts in Europe were in the double-digit percentage range and expressed confidence that if the current measures are insufficient, the company will find other ways to make them work.

Philip Shen inquired about Nextpower's Q3 bookings, specifically if they exceeded $1 billion, and requested details on the U.S. revenue mix between tracker and non-tracker products, along with future trends.

Answer

Howard Wenger, President of Nextpower, confirmed strong bookings contributing to a new record backlog, noting it was one of the strongest quarters for bookings in some time, particularly weighted towards the U.S. He also stated that the non-tracker business is beginning to impact the U.S. revenue mix as these offerings (foundations, eBOS, robotic inspection, software, and services) are rolled out in the U.S. first. Specific booking numbers were not disclosed.

Philip Shen asked about Nextpower's FQ3 bookings, book-to-bill ratio, and whether bookings exceeded $1 billion. He also inquired about the U.S. business revenue mix between tracker and non-tracker products for FQ3 and its expected trend in coming quarters.

Answer

Howard Wenger, President, confirmed strong bookings and a new record backlog, noting it was one of their strongest quarters, weighted towards the United States. He added that the non-tracker business is beginning to impact revenue mix, particularly in the U.S. first. Dan Shugar, CEO and Founder, also contributed to the response.

Philip Shen asked about the continued trend of impressive bookings and book-to-bill ratios, especially with the expansion of Nextracker's technology platform. He also questioned how Nextracker and its customers are preparing for a potentially high Poly 232 tariff, given the existing impact of steel and aluminum 232 tariffs on margins.

Answer

CFO Chuck Boynton noted strong demand, a 'flight to quality,' and customer desire for more offerings, leading to record bookings for foundations and increased backlog. CEO and Founder Dan Shugar clarified that Nextracker does not directly purchase polysilicon. Regarding tariffs, he explained the strategic launch of their steel frame business, which uses U.S.-supplied steel, provides greater mechanical stability for larger panels, and helps customers with tax credits and domestic content requirements, thereby addressing supply chain issues.

Philip Shen asked about the continued trend of impressive bookings and book-to-bill ratios with Nextracker's expanded technology platform, and the company's preparedness for potential Poly 232 tariffs.

Answer

Chuck Boynton, CFO, attributed strong bookings to high demand, a 'flight to quality,' and synergies from new offerings like foundations, contributing to increased backlog. Dan Shugar, CEO and Founder, clarified Nextracker does not purchase poly, highlighted growing U.S. polysilicon production, and explained how their steel frame business addresses supply chain issues and tariffs by enabling U.S.-manufactured steel frames for domestic content and enhanced module durability.

Philip Shen of Roth Capital Partners asked about the percentage of the backlog that is safe harbored, the potential risk from a future executive order, and the possible impact of the Interior Department's memo on projects on federal land.

Answer

President Howard Wenger and CEO Dan Shugar stated that based on customer feedback, they believe a 'very high percentage' and the 'vast majority' of their U.S. backlog is safe harbored. They conveyed that while the industry is still digesting new guidance, the early read is that the situation is manageable and the recently passed OBBBA bill provides a crucial bridge for the industry.

Philip Shen asked for quantification of the potential volume impact from the proposed House tax bill and for color on Q4 bookings activity and the outlook for future bookings.

Answer

An executive explained it's too early to quantify the tax bill's impact, which they see as an intermediate-term issue for projects 3-4 years out. President Howard Wenger added that Q4 bookings were strong enough to grow the backlog sequentially despite record revenue. He noted the pipeline remains healthy as Tier 1 customers have secured their project pipelines.

Philip Shen asked for color on the backlog conversion timing, specifically if the majority of the 87% convertible backlog is in year one, and inquired about pricing trends for fiscal '26 and '27.

Answer

Howard Wenger, President, confirmed that the majority of the backlog slated for the next eight quarters will be recognized in the next four quarters, providing strong near-term visibility. On pricing, he stated the environment is currently stable globally. He added that historically, the industry reduces costs and prices over time with scale, a trend Nextracker contributes to through innovation.

Philip Shen of Roth MKM inquired about the size and margin profile of Q2 bookings, which he estimated to be near $1 billion. He also asked about the contribution from new products and the inclusion of new Master Supply Agreements (MSAs) or Volume Commitment Agreements (VCAs) in the backlog.

Answer

President Howard Wenger confirmed a strong quarter for bookings, raising the total backlog to a record of over $4.5 billion. He stated the new bookings are consistent with the company's typical 2/3 U.S. and 1/3 rest-of-world mix, and their margin profile aligns with forward-looking profitability targets. Wenger also affirmed that new MSAs and VCAs were part of the quarter's bookings.

Philip Shen inquired about JinkoSolar's Q3 gross margins compared to Canadian Solar, the primary drivers for any performance differences, the distinct gross margins between solar and energy storage segments, and the company's Q4 margin outlook.

Answer

CFO Charlie Cao attributed the gross margin difference primarily to varying revenue contributions from the energy storage business. He noted JinkoSolar's sequential gross margin improvement, mainly from modules, and projected significant growth and profitability for the ESS business in 2026, expecting 15%-20% gross margins and 10%-15% revenue contribution from ESS, with 70%-80% of ESS business originating outside China. He also provided an update on 2026 ESS geographic shipment mix and the company's strategy for complying with U.S. FEOC requirements, including exploring non-FEOC entity options for U.S. facilities.

Philip Shen asked for the gross margin outlook for Q2 and Q3, questioning when margins might return to positive territory. He also sought an update on plans for U.S. cell manufacturing given the 145% tariff and asked if manufacturing tools are exempt.

Answer

Charlie Cao, CFO, stated that he expects gross margins to improve slightly in Q2 and stabilize or improve in the second half of the year, acknowledging the current negative margin is unsustainable. Regarding U.S. manufacturing, Cao confirmed there are no short-term plans to build a cell facility in the U.S., as importing the necessary equipment from China is not economically feasible under the current tariff structure.

Philip Shen of ROTH Capital Partners followed up on the alternative U.S. supply chain, asked for Q1 2025 gross margin expectations after a weak Q4, and requested the CapEx forecast for 2025.

Answer

CMO Gener Miao clarified that Jinko may use OEMs outside the AD/CVD scope as a short-term solution. CFO Charlie Cao projected that Q1 gross margin would be slightly lower than Q4's 3.6% due to seasonality and lower-priced orders, with a moderate improvement expected in Q2. CFO Pan Li provided the 2025 CapEx forecast, stating it would be significantly lower at approximately RMB 4 to 5 billion.

Philip Shen inquired about JinkoSolar's module shipment volume to the U.S. for Q3 and Q4 2024, the outlook for 2025, and the company's strategy for managing risks associated with the upcoming AD/CVD decisions, including potential retroactivity.

Answer

Gener Miao, CMO of JinkoSolar Co., Ltd., confirmed that U.S. shipments were 15-18% of the total in Q3 but are expected to be lower in Q4 due to seasonality. He stated that the full-year 2024 U.S. share should be within the 5-10% target. Miao noted that 2025 plans are pending election and AD/CVD outcomes, and the company is actively working with legal counsel to mitigate retroactive tariff risks.

Philip Shen from Roth Capital Partners sought clarification on the reported gross margin discrepancy between Canadian Solar's A-share subsidiary and the parent company, CSIQ. He also questioned how Canadian Solar plans to ramp up U.S. manufacturing amidst significant FEOC risks and asked about the company's potential exposure to retroactive duties from the 80 CBD reserve/Oxen case, inquiring if a balance sheet reserve would be necessary.

Answer

Dr. Shawn Qu, Chairman and CEO, and Xinbo Zhu, Senior VP and CFO, clarified that the 17.2% gross margin reported by CSIQ was an aggregate figure, significantly bolstered by Recurrent Energy's project sales, which achieved a 46.1% gross margin in Q3 2025. CSI Solar's manufacturing gross margin, including energy storage, was over 15%. Regarding U.S. manufacturing and FEOC risks, Dr. Qu reiterated that Canadian Solar believes it can meet OBBBA requirements through specific adjustments. On the 80 CBD/Oxen case, Dr. Qu stated that based on legal and audit advice, the company does not currently believe a reserve is required due to the ongoing and lengthy court process.

Philip Shen from Roth Capital Partners sought clarification on the gross margin difference between Canadian Solar's overall Q3 results and its A-share subsidiary, inquired about the feasibility of ramping U.S. manufacturing amidst FEOC risks, and asked for quantification of potential exposure to retroactive duties from the 80 CBD/Oxen case.

Answer

Dr. Shawn Qu, Chairman and CEO, and Xinbo Zhu, SVP and CFO, explained that the overall 17.2% gross margin was boosted by Recurrent Energy's high-margin project sales (46.1%), while CSI Solar's manufacturing gross margin was over 15%. Dr. Qu affirmed confidence in meeting OBBBA FEOC requirements through specific structural adjustments. Regarding the 80 CBD/Oxen case, Dr. Qu stated that based on legal and audit advice, no reserve is currently deemed necessary due to the ongoing court process.

Matt Ingram, on behalf of Philip Shen from ROTH Capital Partners, asked about Canadian Solar's compliance with FEOC requirements under the OBBBA, how the company is preparing for potentially stricter IRS guidance, and its upstream supply chain strategy for the U.S. given potential Section 232 tariffs.

Answer

Chairman and CEO Dr. Sean Hsu affirmed that Canadian Solar is currently compliant with OBBBA's FEOC requirements and has a solid, conservative strategy to remain compliant as the rules evolve annually. He believes that any future IRS guidance will not fundamentally alter their assessment based on the bill's existing language. Regarding potential Section 232 tariffs on polysilicon, Dr. Hsu reiterated the company's official position that solar-grade polysilicon does not pose a national security concern.

Philip Shen of ROTH Capital Partners questioned why the 2025 revenue guidance was only down 10% despite larger cuts to module and battery shipment guidance. He also asked about the potential impact of proposed ITC/PTC changes and sought more detail on the drivers for the strong Q2 gross margin guidance.

Answer

Executive Wina Huang attributed the resilient revenue guidance to a 'profit first' strategy focusing on higher-value markets. Chairman and CEO Dr. Shawn Qu expressed confidence that the industry would adapt to any ITC changes, citing its history of extensions. For Q2 margins, President of CSI Solar Yan Zhuang highlighted strong storage volumes, while Senior VP and CFO Xinbo Zhu noted a one-time 5-6% margin benefit from a project deconsolidation.

Philip Shen of ROTH Capital Partners, LLC asked about the trajectory of quarterly margin improvement throughout 2025, questioning which quarter might see peak margins. He also requested specifics on the tariff impacts affecting Q4 and Q1 and the reasons for their expected abatement later in the year.

Answer

Yan Zhuang, President of CSI Solar, reiterated the upward trend in margins through the year but declined to provide specific quarterly guidance. CEO Shawn Qu provided color, explaining that margins will improve as high-margin energy storage shipments ramp up significantly from Q2 and as the per-watt tariff impact on modules decreases with rising production from the U.S. Texas factory. He identified the tariffs as the new AD/CVD and Section 201 tariffs affecting shipments from Thailand.

Philip Shen of ROTH Capital Partners questioned the expected module price increases following the AD/CVD ruling, whether any contracts were canceled, and if the company faced 'critical circumstances' exposure. He also asked when hyperscalers might pay higher PPA prices to support U.S. solar development.

Answer

Thomas Koerner, Senior VP, confirmed prices are rising and no contracts have been canceled. CEO Shawn Qu added that the company has no 'critical circumstances' exposure due to its consistent shipping schedule. Regarding data centers, Qu argued that on-site solar and storage is already cost-competitive with the grid, making premium PPA prices unnecessary and that the key is enabling project development, which he plans to prove with demo projects.

Philip Shen asked for more details on Enphase Energy's safe harbor approach using the physical work test, how they assist customers in meeting this test, and how its revenue contribution compares to the 5% FMV method. He also inquired about the prepaid lease (PPL) concept, Enphase's potential participation, and the outlook for the CNI market, specifically if small residential EPCs are shifting to small-scale CNI opportunities.

Answer

Badri Kothandaraman, President and CEO, explained that the physical work test involves custom products with higher performance and non-standard components, which reduces customer cash outlay and provides linear revenue for Enphase, calling it the 'best of both worlds.' He confirmed Enphase supports both physical work test and 5% safe harbor methods based on TPO partner preference. Regarding PPL, Mr. Kothandaraman believes the PPL with a loan structure is attractive, potentially reviving the loan market by offering ownership options and lower monthly payments. Enphase's role is to support TPO partners with O&M, SolarGraph integration, safe harbor, and tax equity. He confirmed seeing residential installers considering small commercial solar due to market stability and expressed excitement for the 480-volt three-phase IQ9 GAN microinverter for the CNI market.

Philip Shen requested more details on Enphase's approach to safe harbor using the physical work test, specifically how they assist customers and how this method impacts revenue compared to the 5% FMV approach. He also inquired about the prepaid lease (PPL) concept, Enphase's potential participation, and the improving outlook for the small-scale commercial and industrial (CNI) market.

Answer

President and CEO Badri Kothandaraman explained that the physical work test involves custom products, reducing customer cash outlay and providing linear revenue for Enphase, with both methods requiring tax partner approval. He discussed the PPL with a loan as an attractive financing solution, outlining Enphase's role in supporting TPO partners with O&M, Solargraf integration, and safe harbor/tax equity support. Mr. Kothandaraman also confirmed seeing residential installers considering small commercial solar opportunities.

Philip Shen asked for clarification on the Q3 revenue guidance, specifically regarding safe harbor revenue, the expected timing of the 25D tax credit demand pull-forward, and the current level of microinverter channel inventory. He also requested the assumptions behind the company's forecast of a 20% decline in the U.S. solar TAM for 2026.

Answer

President & CEO Badri Kothandaraman clarified that the Q3 guidance includes no safe harbor revenue as TPO partners await regulatory clarity. He anticipates the 25D demand rush to begin in early Q4 and described channel inventory as only 'slightly above' the target eight to ten weeks. Kothandaraman detailed his 2026 TAM forecast, projecting a drop from 4.5 GW to 3.5 GW, with the lease market growing from 2.0 GW to 2.5 GW while the cash/loan market contracts from 2.5 GW to 1.0 GW.

Philip Shen inquired about the potential revenue cadence for Q3 and Q4 2025 and asked for clarification on the gross impact of tariffs on Q3 margins, beyond the stated net impact.

Answer

President and CEO Badri Kothandaraman declined to provide specific forward revenue guidance but highlighted several growth drivers, including the new 4th-generation battery, the IQ9 microinverter launch in Q4, and a suite of new products expanding their market in Europe. He did not quantify the gross tariff impact, stating only that the company is taking numerous actions to mitigate costs.

Philip Shen sought details on the safe harbor agreement, asking if any such revenue was recognized in Q4, the product split of the $95 million deal, and the type of customer involved. He also asked about the potential revenue cadence for 2025 and how the company is preparing for potential AD/CVD tariffs on battery anodes.

Answer

President and CEO Badrinarayanan Kothandaraman stated the safe harbor deal is mostly for microinverters and declined to name the customer. He clarified that smaller, run-rate deals in Q4 were not classified as safe harbor. While not providing full-year guidance, he expressed confidence in growth driven by new products like the IQ9. Chief Products Officer Raghu Belur added that the company is closely tracking the anode AD/CVD investigation and is proactively diversifying its battery supply chain geographically to mitigate risks.

Philip Shen asked for an updated timeline on reaching a $450-500 million quarterly sell-through run rate and questioned how Enphase is competing with the demand for Tesla's Powerwall 3.

Answer

President and CEO Badri Kothandaraman explained that unforeseen installer bankruptcies and the European downturn have delayed the run-rate goal. Regarding competition, he stated that data shows Enphase is holding its market share, with California sell-through up 13%. He emphasized Enphase's strengths in reliability and service, and highlighted the upcoming fourth-generation battery, which is expected to reduce installed costs by $300/kWh, making it highly competitive for backup systems.

Philip Shen asked about FTC Solar's bookings outlook, questioning why it seems to lag behind peers and when an acceleration might occur. He also inquired about the potential margin trajectory through the end of 2026.

Answer

President, CEO & Director Yann Brandt explained that FTC Solar is in a transition phase, establishing its 1P product with Tier 1 customers, unlike more established peers. He stated that the recent $75 million financing and expanded sales team are key to accelerating this process. Brandt expressed optimism for a significant increase in bookings, noting that while regulatory clarity will affect the scale of 'safe harbor' projects, existing projects are moving toward financial close. He positioned 2026 as a pivotal year, emphasizing that the company's easily constructible tracker provides a strong value proposition in a tight labor market, supported by a newly strengthened balance sheet.

Philip Shen asked for clarification on the portion of the project pipeline that may be on hold due to tariff uncertainty and whether there has been a slowdown in development activity for projects slated for late 2026 and early 2027.

Answer

President and CEO Yann Brandt responded that rather than putting projects on hold, customers are building in 'operating flexibility' and resequencing project phases to avoid paying tariffs that may soon be reduced. He emphasized that the strong demand for energy keeps projects moving forward. Brandt clarified that while underlying development activity has not slowed, negotiations between offtakers and project owners have paused as they struggle to model project economics amidst tariff uncertainty.

Philip Shen of ROTH MKM inquired about the specifics of the 5-gigawatt Recurrent Energy agreement, the revenue trajectory for 2025, and the sustainability of recent booking momentum.

Answer

President and CEO Yann Brandt explained that the Recurrent Energy deal was won due to FTC's broad 1P and 2P product offerings. He detailed that projects will be in the U.S., Europe, and Australia, starting in H2 2025, with a product mix expected to be 85-90% 1P. Brandt projected a back-half weighted revenue ramp for 2025, with continued growth expected throughout the year. He also expressed confidence in sustaining booking momentum, citing key hires and a significant increase in bidding activity.

Philip Shen of Roth Capital Partners, LLC followed up on the Clean Energy policy outlook, asking how tier-one customers are positioned for various outcomes. He also questioned if the recent acceleration in clean energy bookings would be sustained and inquired about the long-term trajectory for total company EBITDA margins.

Answer

CEO José R. Mas explained that top-tier developer customers have large portfolios of safe-harbored projects, positioning them well through 2030. He noted that recent booking strength was independent of the new legislation and that the market is becoming competitive even without subsidies. Regarding margins, Mas stated that while the long-term goal is double digits, it's not a specific target for 2026, but the business mix potential has never been better.

Philip Shen of Roth Capital Partners inquired about Tigo Energy's gross margin trends for the second half of 2025 and its outlook for 2026, as well as the geographic revenue split between the U.S. and international markets for Q2 and beyond.

Answer

CFO Bill Roeschlein stated that gross margins are expected to be in the low 40s for the remainder of the year, aligning with their 40% target model for 2026. He noted that for Q2, U.S. revenue was 17% of the total, with about 80% coming from international markets, a trend he expects to continue. CEO Zvi Alon added that the company's exposure to the U.S. market slowdown is not severe, as they are successfully gaining share in the 'long tail' of the market.

Asked a wide range of questions covering the company's financial health (convertible debt, cash flow), its strategy in Europe (Intersolar, distributor dynamics), and its mitigation plans for U.S. tariffs on Chinese battery components.

Answer

The company is working on refinancing its convertible debt with a supportive counterparty. Cash is expected to remain stable in the low $20M range. They have a strong presence at Intersolar and see the current European distributor dynamics as manageable without a strategy change. They have several quarters of inventory to insulate them from battery tariffs and are actively diversifying their cell sourcing to Korea and Japan.

Philip Shen inquired about the expected geographic revenue mix for 2025, the top-performing EMEA countries, and the market outlook for Germany. He also asked about the compatibility and market opportunity for Tigo's products with Tesla's Powerwall 3, the 2025 revenue split between utility-scale and distributed generation, and the margin profile of direct utility-scale sales.

Answer

CEO Zvi Alon stated the 2025 geographic mix should mirror Q4, with EMEA at 65%+ and the Americas around 30%. He identified Germany, the U.K., and Italy as key EMEA markets with continued strength. Alon confirmed growing demand for pairing Tigo optimizers with Tesla's Powerwall 3, noting successful installations are already in the field. He added that while the utility-scale segment is growing significantly, product pricing and margins remain consistent with residential sales.

Inquired about the 2025 outlook, including geographic revenue mix, performance of key EMEA countries like Germany, compatibility with Tesla's Powerwall 3, the growing utility-scale business segment, and the margin profile of direct sales.

Answer

The geographic mix is expected to remain stable (~65% EMEA, ~30% Americas). Germany and the U.K. are expected to remain strong markets. Tigo products are being successfully paired with Tesla's Powerwall 3, and demand for this is increasing. The utility-scale segment is growing significantly through direct sales, which carry a similar high-margin profile to distribution sales as the product and pricing are consistent.

Philip Shen asked for a breakdown of Emeren's 2025 revenue guidance, details on the $100 million in Development Service Agreement (DSA) revenue under negotiation, the 2025 cash flow outlook, the nature of recent project delays, the U.S. project mix between community and utility-scale solar, and the company's strategy regarding power prices and data center customers.

Answer

CFO Kevin Chen reiterated the 2025 guidance, with IPP revenue at $28-$30 million and DSA revenue at $35-$45 million, comprising over 70% of total revenue. CEO Yumin Liu and CFO Kevin Chen added that the $100 million DSA pipeline is targeted to close in 2025, is 70% European, and consists of half new and half repeat customers. They expect positive operating cash flow for 2025. Regarding delays, Yumin Liu noted that approaching government deadlines in Europe should resolve issues, with minimal impact on 2025 DSA milestones. He also detailed the U.S. project mix (80% utility-scale, 20% community solar by megawatts) and confirmed the company is building expertise to serve data center customers in key regions.

Philip Shen of Roth MKM inquired about the potential impact of the U.S. election results on the Inflation Reduction Act (IRA) and Investment Tax Credit (ITC), particularly regarding domestic content requirements for battery projects. He also asked about the risk of further project delays, the conservatism of the 2025 guidance, and the expected breakdown of 2025 EBITDA between the IPP and DSA segments and their geographic mix.

Answer

CEO Yumin Liu and CFO Ke Chen addressed the questions. Mr. Liu stated that while they are preparing for potential ITC changes, development risk for signed DSAs is passed to the investor, and they see no immediate impact on their U.S. strategy. He acknowledged that unexpected administrative hurdles in Europe caused Q3 project delays, with some sales now likely to close in Q1 2025. Mr. Chen affirmed the 2025 EBITDA guidance of over $50 million is conservative, as it relies solely on the predictable IPP and DSA segments. He specified that IPP would contribute $18-$20 million, with DSA providing the remaining $30 million-plus. Mr. Liu added that approximately 90% of the DSA pipeline is based in Europe.

Philip Shen of ROTH Capital Partners questioned the company's confidence in its significant implied Q4 revenue ramp. He also asked for more details on the $2 million project write-off, its root cause, and the likelihood of future write-offs. Finally, he requested an update on the year-end cash balance target and operating cash flow expectations.

Answer

CEO Yumin Liu expressed high confidence in the Q4 forecast, citing that deal negotiations have been underway for months, many are on an exclusive basis, and a significant portion involves valuable COD (Commercial Operation Date) assets. CFO Ke Chen clarified the $2 million write-off was due to U.S. interconnection challenges and stated that no significant further write-offs are expected in the second half. Chen also affirmed the company expects to be operating cash flow positive for the full year and is confident in collecting cash from its projected sales by year-end.

Philip Shen questioned the light Q1 results and Q2 guidance, which imply a significant ramp-up in the second half of the year. He asked for the expected quarterly cadence of project monetizations and the specific reasons for project delays in Europe, beyond general timing issues, and inquired about the root cause of delayed payments for Polish projects.

Answer

CFO Ke Chen and CEO Yumin Liu confirmed the second-half ramp-up, attributing delays to administrative and permit approval processes in Spain and Hungary, which they are confident will resolve in Q3 and Q4. Mr. Liu noted that in Spain, a new government rule allows up to 14 months for approvals, pushing a project from H1 to H2. Regarding the delayed Polish payments, they explained it was due to waiting for a Performance Acceptance Certificate (PAC) and the project's final financing closure, with cash expected in June.

Philip Shen inquired about the status of Maxeon's DOE loan guarantee application, particularly how TZE's majority ownership might impact it. He also asked for details on recent utility-scale project cancellations and the company's path to normalized revenue and EBITDA.

Answer

CEO Bill Mulligan acknowledged that TZE's new ownership stake presents challenges for the DOE loan but stated the application is advanced and they believe scenarios exist for it to proceed. Chief Strategy Officer Peter Aschenbrenner confirmed a 1.2 GW contract with Origis was terminated due to customer project delays but declined to elaborate on motivations. CFO Kai Strohbecke reiterated the 2024 guidance, noting ongoing challenges but projecting a return to positive adjusted EBITDA early in 2025.

Sought quantification on gross margins for the first half of 2024, inquired about the post-SunPower pricing strategy for IBC modules, and asked for clarification on the 'defective components' issue and the $30 million payment security bond mentioned in relation to SunPower.

Answer

The company declined to give specific 2024 guidance but reiterated that margin recovery is expected in the second half, driven by new products. They noted Q4 margins are impacted by non-recurring items. On pricing, they will not chase low ASPs and believe that by eliminating the SunPower markup, they have headroom to be competitive and achieve prices 'substantially higher' than the $0.50 range. The 'defective components' issue was described as a long-standing warranty matter from the time of the spin, now resolved. The payment bond is simply a security measure to ensure SunPower pays for its shipments.