On Tuesday, SunPower (NASDAQ:SPWR) discussed second-quarter financial results during its earnings call. The full transcript is provided below.
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The full earnings call is available at https://sunpower-q2-2026-earnings-call.open-exchange.net/registration
Summary
SunPower reported a significant drop in non-GAAP revenue from $73 million to $56 million, affecting gross margin and profit, but managed to slightly improve operating income by implementing cost-cutting measures.
The company is focusing on improving execution, financial processes, and maintaining strong financial discipline to create long-term shareholder value.
SunPower has seen a strong increase in bookings across its business units, but the primary challenge remains converting these bookings into revenue, particularly for short-term opportunities.
Strategic efforts include the development of the Monolith panels and a partnership with REC for advanced solar technology, aiming to enhance performance and efficiency.
Management acknowledged poor recent performance, emphasizing cost reductions and structural improvements to address the revenue shortfall, while expressing optimism about future bookings and revenue growth.
Full Transcript
Siobhan Hickey, VP of Investor Relations
Hello. Welcome everyone to SunPower's second quarter earnings call. My name is Siobhan Hickey, SunPower's VP of IR, and I would like to review a few housekeeping items before we begin. All lines have been placed on mute at this time. This call is being recorded and a replay will be made available within the Events section of the SunPower 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.
In addition, 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 hold 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 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 Chairman and CEO.
TJ Rogers, Chairman and CEO
Good morning. My name is TJ Rogers. I'm the CEO of SunPower. We're here to report the second quarter. I have people who present various parts of this meeting so I will introduce them real time, starting with Tom Kowalczuk, who's our new CFO. He's got a CPA and a Chicago MBA. He's had experience in public companies and he's down here Beam Suntory and he led a finance group there with 2 billion in annual revenue. So he's got the experience in public and big company.
This is his first shot at being the CFO of a public company. He's going to present the financials today.
Tom Kowalczuk, Chief Financial Officer
Tom, hi, good morning. Thank you, TJ. I'm very excited to join SunPower at this opportunity to be a leader at the group at this very important time. Over the last few weeks I have been focused on getting to know the business, our operations, our finance organization, as well as meeting the talented people across the company. While I'm still early in that process, I've been encouraged by what I've seen and the team's commitment to improving execution and going forward.
My priorities are pretty straightforward: maintaining strong financial discipline, improving the quality of our forecasting and financial processes, as well as allocating capital thoughtfully and ensuring we provide investors with clear, timely, and consistent financial information. I look forward to partnering with TJ and the rest of the leadership team as we execute our strategy and work to create long-term value for shareholders.
TJ Rogers, Chairman and CEO
So I've asked Tom to—this is the report we issued this morning. I've asked him to go through the financials with you. There's GAAP and non-GAAP. We focus on non-GAAP. That's how we've reported all of our quarters so far. Tom.
Tom Kowalczuk, Chief Financial Officer
Yes. So our non-GAAP revenue is down from 73,000—or sorry, $73 million—down to $56 million, which had a direct impact on our gross margin and gross profit, down from 46.9 to 27.6. That's a direct result of our fall-through on variable COGS and revenue. However, we did offset much of that through improved operating expenses, which is down about $19.7 million, of which 7.1 approximately is fixed overheads that we cut out of the business during the quarter and is expected to carry into the future.
Our operating income is slightly improved, which is a combination of our fall-through because of the change in revenue as well as the improvement and cost cutting that we did during the quarter. So net-net we're better than the previous quarter on operating income non-GAAP by about $400,000.
TJ Rogers, Chairman and CEO
So from my perspective we need to explain a disaster revenue quarter today, and that will be my job today. The good news, if there is any, is that we had a huge drop in revenue but maintained—didn't change—their profit. It went from bad to staying bad. And that was because we have done structural cost cutting of 31 minus 247 million bucks. And I'll talk about future plans for structural cost cutting later as well. I took this shot at 7:17 this morning my time and the word is you didn't like it.
I don't like it either. It's not good performance. And if you look at the company, basically we're six quarters old, Tom, and we've been at a buck and a half, plus or minus a half a buck, forever, and the last two quarters have been bad, back to back. That of course is bad, and bad that we just talked about, and that's impacted our share price. So I'm going to talk about why that happened, what we're going to do about it in detail. Next is Dan McCraney.
He's a board member. He's become active working in marketing salesforce. He's a storied Silicon Valley figure. He's been on 10 NASDAQ boards, and this includes, you know, the two halves of Motorola when they split apart, important companies. I knew him because he spent about a decade at Cypress. He's been a CEO and his forte is marketing sales. Dan.
Dan McCraney, Board Member
Thanks, TJ. Okay, what you're looking at here is total bookings for the corporation from Q4 2024 through our most recent quarter, Q2 2026, measured in terms of jobs. This is all SunPower, which includes our residential work as well as our new home as well as our commercial work. So what you're seeing there is an aggregate of all three of our business units going forward. As you can see from Q4 2025, Q1 20, Q2 2026 we've had a strong increase in bookings.
This bookings increase is now nine straight months generally across the board. As a result of that, going forward into this quarter you're seeing our projections for revenue, which is largely based on how much of the bookings we're able to get through to the factory, installed, and revenued. That's going to be the challenge. The primary challenge for Q3 is getting these bookings revenue through installation. One more point on that. You notice in Q1 2026 we were at 4,166 jobs and in Q2 2026 that number dropped to 3,655, still the third highest in the six-quarter or seven-quarter period.
But I wanted to point out that the transactional short-term bookings, which is the bookings for solar, actually increased in Q2. What dropped is our long-term new homes bookings, which we don't really see revenue for five to six to seven quarters. My point of that is for an opportunity for short-term opportunity. The sales force continues to book the short-term opportunities, residential, that allow us to have a good Q4. Finally, it takes us about eight weeks approximately to convert our jobs to revenue in residential.
So therefore the sales force right now is predominantly working on the Q4 bookings to ensure we have a robust Q4. So that's where we stand. Three strong quarterly bookings. If you talk about the transactional bookings of residential only, we've had three record bookings. So we're talking about a lot of bad news today. But I do want to point out that what we've been talking about is good times ahead of us because of bookings, and that's still true. So I wanted to bring up that slide early. This is a picture of a headcount in the sales department.
So in this one this is our total 1099 sales organization broken out by SunPower Sunder, the acquisition we did back in September 2025; Ambia, the acquisition we did in October 2025; Purelite, which was a small acquisition we did in Q1 of 2026. We are holding our 1099 headcount reasonably at about 1,500. We've made geographic changes in that headcount. We are now moving into the higher opportunity states, especially for TPO. That would be, of course, Texas and California, and places like Pennsylvania and Virginia.
So we've redeployed our 1,500 1099s to maximize bookings, and that's what you're seeing right now. So to a first order, we're about flat with our 1099s at a very robust 1,500. But we've moved them around to areas where there's currently high opportunity for immediate bookings.
TJ Rogers, Chairman and CEO
The main point here is that old SunPower. By that I mean the SunPower that went bankrupt had a large sales force, but when they went bankrupt, that sales force started to deteriorate, and we worked very hard to maintain a—actually a higher, bigger—sales force of 1099s. I thought I'd talk about myself today and show my picture. This is back when I was in high school, and I— I thought about it because I just saw a movie called Young Washington. And it was a good movie, although the critics didn't like it because it was about an American hero. And there's a classic line in it. In 1755, George Washington got his ass kicked in Ohio by the French and Indians in the French and Indian War. And he was the head of the militia, the Virginia militia. And he came back and talked about the problem he had. They burned his fort; they killed a lot of his people. He really lost. And he signed a—he signed a peace treaty that was written in French.
He was misled by what it said. And it was a bad contract, let me call it that. And when he was making excuses to the governor of Virginia, which was his boss, the guy was— as he was making excuses, the guy was waving his arms like this—guy's name was Dinwiddie. And he said the line of the movie I thought was great: to lead is to forfeit the right to make excuses. So that's where I am this morning. I can [make excuses] about this or that. And this didn't happen, and that didn't happen.
And then, of course, the rebuttal will be, well, great, why did you not fire the guy before he screwed stuff up? So I want to make it clear right now: I run the company. This is my problem. So who am I? I graduated from Dartmouth in 1970. I was second in my class. I was eight years on the Board of Trustees of Dartmouth. I went to Stanford; I got my PhD there. I'm a Moore's Law guy, silicon guy. I worked for two chip companies—American Microsystems, where I learned how to do engineering and R&D, and Advanced Micro Devices, run by the fabled Jerry Sanders—where I won't say that I learned about sales, but I did come to appreciate the value of sales. Dan and I both worked at that company at one time. I then, for my in-effect whole career, founded a chip company, Cypress Semiconductor. We IPO'd 37 months from our funding, including building a fab. We went public at a $770 million valuation in today's dollars. And in 2020 we sold—after I left and retired, the company sold for $10 billion. After that, I worked on the Enphase turnaround. Enphase is worth $5 billion today. So how am I related to SunPower?
I've written checks literally for $111 million. I hold outright 32.7 million shares, and I hold debt equivalent to another 26.5 million shares. So I'm looking at, like, 39% ownership if I converted my debt, which I don't want to because it's income for me. I have no shares that I've earned because of my position getting paid with stock, and my salary is zero. So point is, making that number better is all I work for. If you think about economic motivation, obviously I want this company to succeed.
I have to remind you that we're in a good time for solar. And when you have a coat of tar over everything else, it's difficult to see through it to see the good time. This is a graph—Energy Information Agency of the United States. It talks by area of the United States and averages for the United States of solar penetration rates, meaning in 2024 only 5.6% of the houses in the United States were qualified—rich enough, right area, right ZIP code, good laws in the state—meaning 95% of the homes did not have solar that could have had solar.
This number has been updated recently. The 2026 update is 7%, up from 5.6. So there's 7, therefore 93. And there's a forecast by the same outfit, EIA, that it will be 30% in 2030. I think that's a little bit aggressive. But the point is, even in 2030, 70% of the market will be unsatisfied and will be wanting solar. And by 2030—that's four years—you take a 10% raise per year, take 1.10, raise it to the fourth power, and you've got the cost of power that people are going to have to pay going up by 50%.
Meanwhile, the cost to install solar is flat to down and has been, if you look at it at a four-year rolling average, forever. What that means is solar energy is number one in addition to our portfolio of energy generation. So here I show gigawatts. If you want to calibrate that, this is—I've added solar additions. If you want to visualize a gigawatt, think about a nuclear plant—think about that giant dome, and there's usually two of them. Each of them are worth a gigawatt.
That's a cooling tower or plant. So 70 gigawatts is a lot of power that was added—35 nuclear plants equivalent. You can see natural gas is fading. I don't necessarily agree with that, but that's what's happened. And wind and solar are growing. Solar, you can see here on the bottom, is growing the fastest. And you really can count battery storage as part of the wind and solar phenomenon, because you have to store the energy when the wind is blowing or when the sun is out.
So this is also renewable. So bottom line, we're having a renewable transition, like it or not. Debate it. This is where the market is. And I frankly think it's right. I think the fact that you can buy a solar panel for 100 bucks and get 500 watts of power out of it when the sun is shining is a big deal. Thing that people have talked about and they don't realize is there's two kinds of payback. Energy payback, which is ~7 years for buying and installing a solar system—and then there's the financial payback story.
And then there's energy payback. And energy is: do you ever get the energy back you get from melting glass and purifying aluminum from the panel? And the answer is the energy payback time is about a year. That is, the panel will produce more energy than it took to produce it. So the fundamentals are all there, and they're all lined up. This is from OHM Analytics. OHM is sort of the go-to data source. I'll just make two points here: photovoltaic pricing trends—and of course they look at the pipeline—and you can see it's flat.
So there is no big crash coming in solar pricing. The reason for it is the government subsidy is gone. I was happy about that. And, as a matter of fact, there will be a short-term, slightly upward trend because of that. Second one—and this is a bad one—this is monthly residential commits. So here we have by month going up to May of this year. This little peak back here is safe harbor. This is where everybody was buying and installing— you know, one bolt—in order to guarantee that they would get ITC credit.
And then after that got done, then we went into the current new equilibrium with lower funding—30%, 30% gone. So the reality is, if you eyeball this, 25,000 installs has gone to, let's say, 15. And this is what we're dealing with in the solar industry. We've got a significant fraction—think a third to a half—of our companies have gone out of business because there's a lower volume. At the very same time there's the lower volume and the tax credit is gone.
So the double whammy is pretty much unemploying a lot of people. Okay, so we've responded to that with $13 million in cost reductions. After Q1 '26, the first of the back-to-back bad quarters, we did a RIF. We implemented a four-day workweek. The reason for this is we knew coming up to needing those people; therefore, laying them off and bringing them back was not proper. So we went to a four-day week to keep the people—have the least layoffs. And we also did some structured cost cutting.
That was $7.1 million that Tom showed you on the first slide. This quarter we're going to do another $5.9 million, and it'll be focused mostly on management, where we have New Homes and Cobalt, and we have two sets of managers, and we will rationalize that. And that now reports to John Berg, who's going to address you later. So are we fat? And the answer is no, we're not. We never have been. This is a graph of our headcount. When I took the thing over in Q4, I inherited 3,500 candidates to work there.
We said we can only deal with a third of them. And then we lowered this over time as we learned how to run with a leaner team. Right now we're at 700; we're targeting 700. We're at about 710. So we have a lean company. And if you went into our place you would see people working their butts off. Last weekend—weekend before last—64 people worked overtime, which is efficient for the corporation. It's good for them, especially in a four-day workweek.
Okay, so the cost reductions—$13 million—describe the two components of that last quarter and this quarter. I'd now like to start talking about the overriding thing for us: the technology and capability—let me call it the architectural capability, engineering capability—we have, which will drive us forward with better pricing. So I'd like to introduce Surinder Bedi. He is nominally our EVP of Quality, but we can't afford to have VPs, including me.
My wife and I typed the words in this report. We can't afford to have single-purpose, expensive people. So in addition to working on quality, he looks at future engineering. He's an expert on panels, and I've asked him to describe—highly awarded, worked in Intel and Applied Materials—Silicon Valley guy, has his own patents. I've asked him to describe our new panels and why they make a difference. Surinder, you're up.
SURINDER S. BEDI — Executive Vice President, Quality, Engineering and Customer Success
Thank you. TJ, by the way, this is—we call the panel—our trade name is Monolith. This is a picture of a billboard on a major freeway in Salt Lake City when we announced that we had the Monolith. Thank you, TJ. So what I'll be talking about: the SunPower–REC JDA technology partnership, which we have engaged in the last few months and that has really provided us huge dividends in terms of developing a high-voltage heterojunction technology product, which is a 470-watt panel. And it's got a unique technology in terms of hybrid technology where we allow the silicon, the N-type silicon wafer, and it is being sandwiched between the amorphous silicon, and at the same time it's got a very strong, superior passivation.
This technology allows us to be one of the best technologies in the market today, especially for the bifacial gains, and I'll talk about that in a minute as well. So the Monolith 470-watt panel. Through this JDA technology partnership where the two companies, REC and SunPower, with their innovation have come together, we have launched during Q1 this particular product line. It is being commercialized right now for residential or light commercial for various applications today, and our intention is to expand this business throughout this year.
It's also got very unique features. I want to take a minute to talk about that. The module efficiency is pretty good, 22.6, which allows us to have a huge power density advantage in terms of the watts per meter square. It's got the advantage of temperature coefficient. It's got the low-light enhanced performance—both morning, evening, cloudy, and so on—with a low degradation and huge warranty advantage as well. So putting this together, all the different technology advantages from a heterojunction technology using the N-type cell, we got the most powerful 470-watt panel today in the market, and we are proud of that.
Moving forward, we are already developing in parallel. We have done some engineering work; we have some engineering samples built, and that is, we call it Monolith 2 bifacial, which is coming soon here. The advantage we are bringing is that we are taking double-glass structure to ensure that we have the bifacial advantage. So this allows us to improve our module efficiency. At the same time, it allows us to make the panel with the performance improvement, the boost we have, taking it another higher level to 494- to 528-watt panel.
It still remains the same lightweight, 50 pounds, very sleek panel with 2.0 meter square area. And the glass has been reduced, but it has been doubled. We call it double glass both on the front side and the rear side, and that allows us to have the power density advantage. And you can see we have an objective to demonstrate the advantage on both the residential application and as well as in the commercial side. By having a double-glass product, you have a much more reliable product because you don't have a plastic layer behind, which we call the backside.
And because you have a double glass, it allows you to have a stronger structure to handle all the different environmental conditions as well as on the fire-resistance side. The warranty is also improved from 25 to 30 years. And we believe by having this combination of technology advantages along with bifacial advantage, you have basically designed in a best-in-class product line with a high output over lifetime. And that gives us a huge advantage in terms of cost per kilowatt-hours, transforming the innovation into customer value.
So this is the quick snapshot of what we have developed.
TJ Rogers, Chairman and CEO
So now that you physics students in the audience have gotten your notes, I'd like to just make a couple points. This has made a difference for us. All Chinese cells up to about a year ago were P-type—holes—and holes move three times slower than electrons. This is a big deal. We've always been, since 1985, on N-type silicon way ahead. That gives a superior efficiency. This temperature coefficient, 0.24 per degree centigrade—so that's 24 per 100 degrees centigrade.
So if you're on a roof and you're cooking at 100 degrees centigrade, your panels become 24 less efficient. That's bad. But it's half of what the P-type cell has. That's why that's there. The 50 pounds is there because OSHA won't let you use one person to install a panel unless you're under 50 pounds. And that's an ironclad rule. You don't screw around with OSHA. That glass is pretty thin already. There are layers—there are like 13 layers on this panel.
These guys, REC, are really good and they're world-class, one of the top two or three in the world. And they're world-class slash not Chinese, which is exactly what we need. And they work on getting low light to produce energy, so you get kilowatt-hours in the morning, in the night. You really don't talk about when a salesman is trying to sell you solar, but you get kilowatt-hours, quote, for free. The next one is degradation. Panels, as they cook in the sun over the years, degrade.
These panels are exemplary. In 25 years they still produce 92.5% of the energy they did when they were brand new, and that's almost double other kinds of panels. So if you combine low light every day and a degradation curve that's almost not there, you get high lifetime kilowatt-hours. And this is what, if you look at the economics of a panel, that's all you get. You get a kilowatt-hour for free from your panel or from the depreciation of the cost you paid for the panel.
And you don't have to buy it from the utility. Currently in California, that's looking like 20 cents, and it's going up at a rapid rate. And right now, panels used to be flaky. They're now solid for 25 years, and even at 25 years, they're still almost brand new. So that's this one. Bifacial—think this panel, think the next generation of it, put glass on the front and back. You're now talking about glass that is the thickness of a match, a wooden match.
And it's got to work, and it's got to work for 30 years. And we've already got our first samples of this one, by the way. Bifacial technology is what the utilities use. They don't even use the standard residential technology. The problem is if you take that thick glass and put it on a panel, you're looking at 70 or 80 pounds here. So these are panels that are put in place by robots in the field, by utilities, and they're not really available to residential.
So the name of our game is how many watts—and now we're going to be over 500—can you get from 50 pounds? That's really the game. Okay, next is John Berg. John bought Cobalt Power Systems and is the CEO of it. He has worked for the Korean company QCells, which is probably the only other major manufacturer, non-Chinese manufacturer, that is in the same class as REC. And he sells systems. So he talks about those little advantages that were on the last slide, that they're kind of hidden in a maze of numbers.
So I've asked John to talk about—he lives in Silicon Valley, thinks Silicon Valley—we talk Silicon Valley, not sales. And I got graphs. The first graph is knocks—how many doors did you knock on? We knock on 65,000 doors a week. So you got to talk about that to sell, but you got to talk about technology to sell and get a better ASP. So I'm going to let John talk about the technology of design and engineering he's brought to the company.
John Berg, CEO, Cobalt Power Systems
Thank you, TJ. What you're looking at here is the very first Monolith installation. So this is on the historic Pleasure Point Plunge Pool. It was a club by Santa Cruz, right off the coast of Santa Cruz by Pleasure Point. The homeowner there, his name is Mike, he actually had a previous solar panel system spec, and when the Monolith came out, I called him up and I said, hey Mike, do you want to look at this new technology? It's called Monolith. We can fit it on the best parts of your roof and maximize the kilowatts on your roof so that you have some space around it.
Now, it's a little bit more expensive, but you're going to get a more levelized cost of energy. The system's going to wake up earlier each morning, it's going to turn off later on and go to sleep later on each night, providing you more power every day. So even though it's a little bit more upfront cost, you're actually going to get more power over time, and that results in about a 7 or 8% increase in ROI. Mike was like, well, what do they look like?
And I said, well, they look sleek; they're all black. There's no white contact points or anything like that. That's why they call it the Monolith. And he said, sure. And so we installed that. And he's very happy—sends me photo crops of his system production—and it's meeting and exceeding what our forecasts were. What you're looking at here is the Santa Clara project. So this is the third project we've done for Santa Clara University, and you're looking at about a 1.2-megawatt installation that generates over 2.1 million kilowatt-hours annually, and the estimated savings per year for the university is about $350,000.
We did an integrated solar superstructure on the north parking garage, and we did elevated carports here at Levy parking lot and a rooftop array at the Athletic Excellence Center. It's these types of installations and these high-quality premium modules that set SunPower apart. And what we continue to look as a forward-looking commercial outlook: what we're going to be deploying to universities, data centers, other things across the country as we start to expand our market share.
TJ Rogers, Chairman and CEO
Comment on the structure of carport. Okay, down here you've got people parking their cars. This is in a university. Here you've got a roof which replaces a normal roof. It's not on the roof like residential. As you put panels on a roof that already exists, you got to make sure the roof is structural. You may have to do work to begin with before you put them on. In this case, the roof is the panels. All you have is a framework below it, which is economical.
And what happens is the rays come down, they hit the panel in a thousand watts per square meter. Twenty percent of that goes into the panels and turns into electricity and doesn't go down. In China, asphalt heats your car up to 120 degrees Fahrenheit and all this stuff. So this is an important use of solar in large quantities.
John Berg, CEO, Cobalt Power Systems
So what you're looking at here: this is the waterfront building in San Francisco. You can see it's right there by the piers in downtown. This project demonstrates not only do we use high-efficiency modules—it's about a quarter megawatt—but we used about 554 high-efficiency solar modules for this project. One of the key engineering points is that this is a post-tension concrete roof construction, and so we had to use LIDAR graphing and infrared readings to find the structural points for seismic insulation.
And what you're looking at here is a floating array. And I'll let TJ talk about this a little bit. But this is pre-bifacial Monolith. So if you look at what we're able to do when we get the Monolith 2 bifacial out, we'll actually be able to garner more wattage from the same rooftop.
TJ Rogers, Chairman and CEO
Yeah. So these pads spread out the weight. The weight goes on a frame. This is not the standard way of doing it because this roof is not a new building and it's high tech. And what that means is they stretch the rods, and then they pour the concrete and let the concrete dry around the stretched rods, so it's tensile concrete—much stronger. And then a different concrete—it's much stronger. So this roof is way thinner, way easier to support than a normal roof.
But the problem you’ve got is if you put too much pressure on a given area, you can punch through that roof. So this thing was built in order to float on these pads. Now, the accent here is now you can visualize what a bifacial panel does. If I have glass on the front side and glass on the backside, and this is already painted a pretty good reflective white, I'll get light to go through here. I may put more area between another stripe to let in sunlight through the rows, but typically this will take a 470-watt panel and the backside will take it up over 500 watts.
This is Monolith 2. What we were talking about.
SURINDER S. BEDI — Executive Vice President, Quality, Engineering and Customer Success
Sure. So NPS basically is Net Promoter Score, which measures the customer's confidence and the trust with SunPower and their, you know, their willingness to allow us to be a reference point for future customers as well. So they recommend us to other customers as well. So we have been working with this customer for almost a year now and the work has been done so beautifully: the architecture, the engineering, the procurement, the entire energy performance over this site.
And then we talked with their team, the customer team, with their president about their experience on SunPower on five set of questions and they gave us a very good score. The overall score was 90%, which is one of the best, best-in-class scores. So we are happy and the customer is extremely happy and they would like to do more business with us.
TJ Rogers, Chairman and CEO
Okay, so this is what we've already shown you and why we're happy about the future. So then what is the—what does that turn into numbers you can hold us accountable to. In this quarter, we expect to grow revenue to 75 million or more and we expect to reduce our operating loss, which was a, can't use any other word than ugly, 12.5 million to less than a million. I was tempted to say break even here and there is possibility for that, but I don't want to come back next quarter and be making excuses why we didn't make the numbers.
So those are the numbers. I had a three-hour meeting yesterday with the executive staff and we went over line by line and group by group. These are the numbers the executive team is committed to. Okay, to conclude, we've changed our company. We've cut millions of dollars. The state-of-the-art Monolith and Monolith 2 panels as well as the high-tech, high-margin installations by our New Homes Cobalt division. We will move into the premium segment of the solar market defined by sustainable technology advantages and bring premium pricing to a very lean company.
The company is lean and it has to be lean because most solar sales now are consumer and you compete on price. So what we need is a slice of our business where we compete on energy generation, efficiency, aesthetics, and architecture. And that's our strategy. So we've changed due to these quarters, we've changed significantly. A 13-million-dollar change in cost is nontrivial and the people back at home feel that and this has always been our plan and we just want to tell you it hasn't changed due to a surprise in Q2 where panels we had the orders for, put in the line, didn't ship on time; they were late and that hit us for revenue that looks like we just were screwed up, didn't have the orders or whatever. It's not really true. Okay, questions.
Siobhan Hickey, VP of Investor Relations
Thank you. We will now begin our Q&A session. As a reminder for those who are joining via the web, you may submit a written question via the submission box located on the right-hand side of your screen. And for those joining our live Q&A, please click the raised hand located on the bottom of your screen and when it's your turn, you will receive a message on your screen allowing you to speak. When you hear your name called, please accept, unmute your audio, and ask your question.
Our first question today comes from Gus Richard from Northland. Go ahead, Gus.
Gus Richard, Analyst at Northland Capital Markets
Yes, thanks for taking the questions. Just in terms of, you know, execution in third quarter, you know, there's air quality issues around the country, there's heat waves, there's a tight labor market. Do you anticipate or see any obstacles to getting jobs done in the coming quarter?
TJ Rogers, Chairman and CEO
That's a great question and I haven't got our operations people here to answer it. But yes, there are all kinds of headwinds in our industry and that's why when we promised yesterday we picked the number we thought we could make given those problems. So yeah, there are, and the 75-million-dollar number, not a great number in my opinion, but it's what we thought we could do given the headwinds we're seeing in the market right now.
Gus Richard, Analyst at Northland Capital Markets
Okay, thanks. And then one for Tom. You know, welcome to SunPower. You know, in terms of, you know, FP&A and, you know, getting SEC filings out on time, you know, how much work do you see in front of you in order to get the finance organization, you know, running, you know, a tight ship?
Tom Kowalczuk, Chief Financial Officer
Excuse me. Yeah. So I found the finance team is extremely hardworking. We're also going through a process of reimplementing NetSuite and consolidating all of our statutory entities onto a single source. So once we're able to get through that, which will happen this quarter, we will have better systems, we will have better processes, and I expect much improved decision support all throughout the organization. So the teams are working extremely hard right now.
I'm also actively adding and enhancing the team by hiring. Right. So we've been interviewing quite a lot over the last four weeks while I've been here, and we've already started to bring new talent onto the team.
Gus Richard, Analyst at Northland Capital Markets
Okay, that. That's it for me.
Siobhan Hickey, VP of Investor Relations
Thanks so much. Thank you. The next caller that we have on the line is Derek Soderbergh from Cantor Fitzgerald. Go ahead, Derek.
Derek Soderbergh, Analyst at Cantor Fitzgerald
Yeah. Hey, everyone. Thanks for taking the questions. So, TJ, bookings are strong. You know, I'm just wondering, is cash an inhibitor to delivering on that backlog? And what sort of financing options do you guys have available to you at this point? Wondering if you could maybe touch on that and if that's an inhibitor to getting you guys back, you know, to cash flow positive.
TJ Rogers, Chairman and CEO
First of all, no excuses for not shipping. The typical excuse would be we have to have cash to buy the panels to put on the house, and we've got a problem there. We're tight on cash. I. We ended the quarter $4 million in cash. Reason we had $4 million in cash is that despite working deals for a small infusion of cash to tweak it up to the $10 million I've talked about at the current price, I'm not interested in selling stock if I don't see money coming in and benefiting us by eliminating some sort of problem.
And I don't, so we didn't do it. Therefore, I have to grovel a little bit on the $4 million. Are we tight on cash? Yes. The tightest point was the beginning of this quarter. We're through that right now. If you looked at my cash flow graph, and I'm not compulsive about it, but I do review it every day, and it does have six lines on it that each have different meaning of cash, and I review it. So right now, I'm looking to raise perhaps $5 million in cash to buffer us.
But right now our graph says we can make it clean through Q3. Furthermore, the way we've arranged our milestones is that when you install, you get paid. And that payment we've now arranged—the profit part of it comes to us, or the gross margin, and the cost part of it goes to our source of equipment. So we've gotten that prepay kind of problem [addressed]. And then, by the way, that's the industry; we didn't invent that. So we are looking forward to increased business equaling increased profit, equaling better cash flow.
But we're tight. Just say that.
Derek Soderbergh, Analyst at Cantor Fitzgerald
Got it. That's helpful. And then just a little bit more detail on the 1,100 jobs. How many of those are funded today? And then could you sort of talk
TJ Rogers, Chairman and CEO
Sure. So the reason we had a breathtaking shortfall in revenue last quarter is the stuff was sitting in our line, not turned into revenue. The reason it wasn't turned into revenue is that we did not submit it for payment because our experience has been if you submit something with a small defect, even then it will hang up in their shop. And fixing something that's in their shop, as opposed to something you're controlling that you get funding for if you submit it, is a loser.
So we didn't submit it. The 1,105 jobs in the fab we have, it's about half the normal inventory. You'll always have inventory in the line, but we had double. And when you double the number of jobs in the line and you keep the same number of movements of activities per job per day constant, then the line moves twice as slowly, by a factor of two. And that's what happened to us. So we need to clean out the line, the constipation, to get back to a normal working inventory.
It's a valid question to ask: Is the stuff in your line crap that is bound up multiple ways? I can describe a horror story. I've lived through two of them. I created one for myself back in Complete Solar. And what happens is your funding partner says, oh, we have to claw back. We paid you before you should have been paid. And then I inherited one from the old SunPower, which we're almost through now. So you don't want that clawback to happen. Adjust your milestones and then move, move, move forward without sucking up a lot of cash.
You can get in trouble if your errors are significant. For example, I can describe—this is a real horror story from Complete Solar days—jobs in the line, it's been in line for one year. It hasn't moved out. Why? Well, it hasn't gotten a permit, it hasn't got the approval, city approval, nor does it have PTO approval from the utility to turn it on. Why not? Well, the job itself was changed and it doesn't match the permit. So now you have to go back and redo the permit.
Maybe that was something simple like the array is moved eight feet to the south to avoid some pipes or something like that. Doesn't matter. It's a permit. You got to go to the AHJ. Now if you go to California, you get a permit in a day. If you go to New Jersey, it is much longer. So then you've got the job hung up. You've got the customer screaming. You've got your score, your net promoter score going to hell. Right now, most of the problems we have are minor problems that are fixable and important.
The number one problem, and I review it, is J-box. What's a J-box? Well, J-box is that little electrical box. And if you have a string of panels, might be 10 panels, and if you have a two-string system, power from the two strings goes to a J-box. In the J-box—it looks like a box in your garage—goes to your system. And you need to prove that the J-box is grounded, which makes sense because you don't want a hot J-box on the roof. Nobody's going to argue with that.
Well, guess what? If they didn't take the picture because you've got a guy who doesn't follow the spec, then you don't have a picture. Or if he took the picture and he's not a good picture taker, then you have a blurry one. And I had 11 of those as of a week ago where I wasn't getting money because nobody took a good picture of the J-box. And I can go—there's a Pareto and it is sort of a potpourri of ordinary execution errors. And we have specs. I participated in writing them, I signed some of them, that prevent it if you follow them. And we lost the discipline in one of our divisions of following the spec, and it's what put the pile in line. We caught the pile in about a quarter, which is pretty fast actually, and we will have it fixed by the end of the quarter. So it harmed us—this meaning the share price, all of that. It's harmed us dramatically, but it's not fatal and it is fixable and it is quickly fixable.
Siobhan Hickey, VP of Investor Relations
Really appreciate it. Thank you. We have a number of questions in the queue. A good number of them are redundant. So I'm going to cover a bunch of them with this one question or two-part question. There's a lot of questions around the 2Q to 3Q revenue. The 3Q revenue, does that include the 15 million that could have been booked in 2Q and therefore should we be thinking about the rational run rate for 3Q as really 60 million, or is this a temporary uplift, or should we think of your timeline as being moved out in further quarters so that you would reach 1 billion late in 2028?
TJ Rogers, Chairman and CEO
Great question. So shorthand, if you're going to bonus 15 million bucks worth of revenue, that means the orders that you took in and shipped are 75 minus 15 is 60 million, so 60 million a year run rate. The answer is, yeah, our run rate right now is about 60 million and there are bonusing events that occur all the time. But the model should be, for analysts, that you have a $60 million rate and that will increase over time.
Siobhan Hickey, VP of Investor Relations
Thank you. We have also a large number of questions about our commercial business, which is growing. Is this something that you are focusing on short term and will this become a growing proportion of your offering going forward?
TJ Rogers, Chairman and CEO
So I'll let John answer that one.
John Berg, CEO, Cobalt Power Systems
Yeah. At Cobalt Power Systems, we've been in the commercial space for quite a while now. With our integration with SunPower, we have a national footprint and so we can use our engineering and design resources to support SunPower's national installation partner network. So we're actually able to engineer and design commercial with a high quality and premium technology that SunPower is known for and deploy it through our established, certified, quality-minded installation partners so that we can go ahead and deliver for whether it be universities, data centers, or portfolio management.
You know, we signed up several dozen storage units as part of a large portfolio. So that's what the synergy between Cobalt Power Systems and our engineering base and our technology base here in Silicon Valley provides the nation at large through SunPower. And we're looking forward to expanding that commercial outlook. So it's a real bright spot for us.
Siobhan Hickey, VP of Investor Relations
Thank you. We have a number of questions around share count. Are there any plans to potentially either issue debt to do share repurchases, or any thoughts about taking the company private given your share price today?
TJ Rogers, Chairman and CEO
So, multiple opportunities to screw up share count. If you go on to MarketWatch or some site and you take the market-declared market cap divided by the price, that will give you the shares that they use for the total shares for the company. That number is the number that the transfer agent uses. And that number is currently 151—yes, 151 million shares. And that's fully diluted for the shares that are counted in it. And the question is, have you done deals that will increase the share count in the future?
And we in effect paid for a deal that happened a long time ago—three years—when we did a future sale, a forward sale to a group of three firms on Wall Street, and we just paid them off with 17 million shares—right, 17.9 million shares. So that 17.9 is not on the 151. And I could go through a list of deals that I'm aware of. I'll just tell you that the 151, when everything flushes through—and this is over time—will turn into 200. So that's where we are right now.
Am I going to go private? No. I've worked all my career on public companies and taking startups as a venture capitalist—like Enphase, for example, which is now worth $5 billion—and making the companies worthy of being a valuable public company. That's why I'm here. Otherwise I'll sit at home and day-trade. So no, we're not going private and we're not going to leave behind that. Of course that means you have to maintain your share price at a buck.
And that means, coming up in the future, there will be a reverse split to get our shares comfortably above a dollar. And right now we're preliminary thinking. I’ve got a board meeting this Friday. We will discuss it with the board and announce our intention on share count going forward. This is something that—I'm on the board, but the board's the board and they've got to approve this legally. So I'll present what we want to do and we'll announce it after the board meeting.
Siobhan Hickey, VP of Investor Relations
Thank you. Two more here. The first one is about dedication to technology development work. Do you have a team dedicated to working on things such as the monolith panels?
TJ Rogers, Chairman and CEO
Yeah, the team is sitting right over here. He's the quality guy. He's the guy that enforced, by the way, the quality rules that prevented us—although we were hell-bent for shipping some crap into the field last quarter—he prevented it. He also has worked on a bifacial panel startup in his past because he's a Silicon Valley guy, and if he's lucky this quarter he'll get one. Oh, he's bolstered by a guy named Dick Swanson, who's the founder—PhD founder guy—that I went to Stanford with.
He's got that technical expertise so we can do the roadmaps. And so far we've been intelligent about having an R&D structure that is more than we could pay for. And there I'll mention our friends at REC. They did Monolith One. It's a multibillion-dollar company and they're working with us on the bifacial panel. And this is what I would call a lightweight commercial bifacial panel. They've already shipped product to us, so it's in their interest to have hot products.
We're a publicly traded company that can brag about those products they've got. So it's a win-win kind of deal. So the answer is one and a half guys, and then in the 8% of my time I have left when I'm not doing what I'm doing now, I work on it a little bit too.
Siobhan Hickey, VP of Investor Relations
Thank you. And our last question for today is from a self-described retail investor who says, I believe in your team but price appreciation has been brutal. It seems that investors are calling your bluff on projections for future quarters. What insights or thoughts can you share that would calm the market regarding your plans, or short-term catalysts that we can know about before the next quarterly call?
TJ Rogers, Chairman and CEO
Surinder's giving me the sideways look, so he wants to talk. Go ahead.
SURINDER S. BEDI — Executive Vice President, Quality, Engineering and Customer Success
So it starts with bookings, and bookings is everything right now. As we mentioned before, we've had three strong quarters in bookings. As a matter of fact, the transactional bookings—the residential work—is at an all-time record right now. The team is essentially booking for Q4, and their booking numbers are pretty robust going into Q4. So in terms of comfort about the primary driver of revenue, it's bookings. Bookings were very good for the last nine months, ending last quarter in a near record with transactional bookings.
And we are now booking for Q4, and that's looking pretty robust.
TJ Rogers, Chairman and CEO
So after bookings comes execution. Frankly, we haven't been very good at it. The execution miss that we just suffered led to dismissals. But I'll report—I'll repeat my Washington comment: to lead is to forfeit the excuses. So in our company, and I'm going to get tighter on this, I haven't been as good as I should be. I'm going to give a different job to people who can't make the numbers. The solar industry doesn't have, like semiconductors that I'm used to, the visceral drive to make the number.
It is what it is. Your salesmen—many of them are students. They work during the summer. They go back to school. You have hot seasons, you have cold seasons. You can't control Donald Trump. Blah, blah, blah. There's a thousand excuses. So I'm going to focus more on execution on the executive staff, and I've already started. We've already changed management in one of our divisions.
OPERATOR
Thank you. That concludes our Q&A session. I'll turn it back over to Dr. Rogers for any closing remarks.
TJ Rogers, Chairman and CEO
So on the credibility thing, I get it. And that's why I didn't say, trust me, the big quarter's still coming. I have given you numbers that I told you that I worked on three times over with the executive staff. So they now know that it's not—they do the best they can for our numbers. It is our numbers that they are responsible for along with me. And the answer is wait and see. And I've given you numbers that I believe we can achieve. Certainly we're going to move north a lot.
Even if we miss the numbers I gave you, we're going to move north a lot. We've had two atrocious quarters back to back, and they're going to be behind us. That is one thing I do know.
OPERATOR
That's our session for today. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
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