Good day, ladies and gentlemen. Welcome to the Maxeon Solar Technologies third 2021 earnings call. Currently, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to our host, Mr. Robert Leahey of Maxeon Solar Technologies. Sir, you may begin. Thank you, operator. Good day, everyone, and welcome to Maxeon's Q3 2021 earnings conference call. With us today are Chief Executive Officer, Jeff Waters, Chief Financial Officer, Kai Strohbecke, and Chief Strategy Officer, Peter Aschenbrenner. Let me cover a few housekeeping items before I turn the call over to Jeff. As a reminder, a replay of this call will be available later today on the investor relations page of Maxeon's website. During today's call, we will make forward-looking statements that are subject to various risks and uncertainties that are described in the Safe Harbor slide of today's presentation, today's press release, the 6-K and other SEC filings. Please see those documents for additional information regarding those factors that may affect these forward-looking statements. To enhance this call, we have also posted a supplemental slide deck on the events and presentations page of Maxeon's investor relations website. We will reference certain non-GAAP measures during today's call. Please refer to the appendix of our supplemental slide deck as well as today's earnings press release, both of which are available on Maxeon's investor relations website for a presentation of the most directly comparable GAAP measure, as well as the relevant GAAP to non-GAAP reconciliations. We want to point out that comparisons to the Q3 of 2020 reflect a carve-out of Maxeon's results for a portion of the quarter while it was still part of SunPower. We began operating as an independent company on August 27, 2020. With that, let me turn the call over to Maxeon CEO, Jeff Waters. Thank you, Rob, and good day, everyone. I'll start by giving a business overview and covering recent accomplishments. Kai will then review our financial performance and outlook, and we'll conclude with Q&A. I'm proud of how the Maxeon team performed in the third quarter in the face of unprecedented upstream supply chain headwinds. We navigated increased materials cost and logistics, set another record in European DG sales, and are on track for our key strategic initiatives, including our North American Performance line capacity, the ramp of Maxeon 6, and our Beyond the Panel strategy. These strategic initiatives are coming at just the right time as the march toward a global low carbon economy is accelerating, evidenced most recently by the momentum for solar manufacturing incentives in the U.S. The world has an insatiable appetite for solar, and Maxeon has the panel technology, global channels and reputation to be a leader in making that happen. While the supply disruption occupies much of our focus currently, we're building for the more permanent disruption brought by the move from fossil fuels to renewables. This is what gets Maxeon employees out of bed in the morning and drives the enormous upside potential for our business. Before we discuss the business results, I want to provide an update on our employee safety. In August, a group of employees at our Malaysia facility tested positive for the COVID-19 virus. We responded with an aggressive mitigation effort, shutting down the facility for 15 days and reopening in a structured process as a majority of our employees became fully vaccinated. By October 1, 99% of our employees in Malaysia were fully vaccinated. The local government in Malaysia supported our overall response to the situation, and we're very pleased that our employees are safe and the facility is fully reopened. In our other major factories, more than 75% of our Mexico employees are vaccinated and close to 60% of our Philippines employees are vaccinated, which is 3 times the national average. Now turning to our Q3 results. Let's start with the upstream solar supply chain. We took a number of actions to mitigate the impact of steep cost increases in certain materials and logistics to enable Maxeon to maintain financial stability and to stay on track toward our 2023 transformation. As we mentioned in our Q2 earnings call, prices for freight, polysilicon, copper, glass, EVA encapsulant, and aluminum all increased materially from 2020 levels. Some of these costs, including freight, unexpectedly spiked even further in the Q3. Our highest exposure to supply chain inflation this quarter was on outbound Asia freight pricing. We responded by reinventing our module packaging design to increase packing density by 5% and by switching to air freight for some of our solar cell shipments to Mexico, which helped Maxeon preserve our reputation for excellent on-time delivery. Shipping cells by air directly to our modcos in Mexico allowed us to avoid the ports of Southern California. Our outbound supply chain to Europe is even more challenging, but we were still able to set another sales record in the quarter for our European DG business. To mitigate the potentially continuing effects of logistics constraints. We took the initiative in the Q3 to establish outbound Asia rail transport capabilities, which have a significant speed advantage that gives us more options to maintain delivery commitments in Europe. As well, ramping up our IBC mod co in Malaysia is allowing us to save significant shipping costs to Asia and Europe as compared to shipping from Mexico as was done previously. Looking to 2022, we have further mitigation efforts on the horizon. First, Maxeon 6 modules will have a more than 20% packing density advantage compared to the Maxeon 2 capacity they replaced. Second, our Performance line mod co in Mexicali will radically increase our supply chain proximity to the U.S. market, and it will benefit from supply chain assurance as we ramp up our captive cell production in Malaysia. Third, as we scale our Beyond the Panel business, our supply chain will further diversify. Looking into 2023 and beyond, we expect more potential for logistics leverage, first with our new thin lightweight Maxeon Air product, with the introduction of Maxeon 7 and its higher efficiencies in watts per panel, and most significantly, with our opportunity to establish solar cell and module production in the United States. In summary, we are facing difficult upstream supply chain industry conditions, but our operations team has managed to keep our employees safe while delivering products to our customers on time and managing costs with both a short and long-term focus. Now I'd like to report on our three strategic pillars for profitable growth that are transforming Maxeon. Execution over the next five quarters on these pillars will enable us to achieve our target business model in 2023 of at least 20% revenue growth, greater than 15% gross margin, and greater than 12% adjusted EBITDA margin. First, on leading panel innovation. I'm pleased to report that our teams in Malaysia and Mexico are on track to ramp an incremental 250 MW of Maxeon 6 and 1.8 GW of Performance line in 2022. Together, these two initiatives will more than triple Maxeon's in-house capacity compared with Q3 levels and will do so with enhanced gross margins. To appreciate the volume impact of these initiatives, see slide 4 in our supplemental earnings deck. Our first Maxeon 6 module shipped in October, and we're on schedule to have more than 200 MW of capacity online this quarter, growing to over 500 MW in 2022. As a reminder, we're installing Maxeon 6 in the fab where our legacy Maxeon 2 production had been since 2010. We expect that the performance increase and higher ASPs of Maxeon 6 will enable us to deliver gross margins over 20 points higher than Maxeon 2. When fully ramped, Maxeon 6 will further build on our legacy of leading technology. In the Q3, our Maxeon 7 pilot line went live and consistently produced cells that were of the highest efficiency ever recorded for our IBC technology. We're excited about the future of Maxeon 7 and the potential of this latest architecture to deliver yet higher levels of performance and durability with disruptive process simplification and cost savings. In the focused utility scale pillar, we continue to increase our attention on the United States, where policy tailwinds and strong customer demand offer significant opportunity for Maxeon. We recently made our first G12 format solar cells in Fab 3, and we're on track to begin Performance line module shipments from our Mexicali modco in the Q2 of 2022. Our sales efforts for the utility scale market are in full swing, with a primary focus on 2024 delivery. U.S. customers appreciate that Maxeon is a U.S. publicly listed company with superior technology, North American manufacturing, and a culture that deeply values ESG themes and the sanctity of contracts. We previously announced our gigawatt-scale supply contract to provide panels for 's Gemini project near Las Vegas. Today, we're happy to announce that we've reached an agreement with our partner and shareholder, to supply up to approximately 400 MW of panels for one of their major projects in the U.S. The majority of those deliveries will be made in 2023. In connection with that contract, we expect to receive a prepayment in excess of $50 million by the Q2 of 2022. This transaction is another strong testament to the attractiveness of our Performance line supply chain for the U.S. market, as well as the support and confidence from our strategic partners. We continue to selectively address the rest-of-world utility-scale markets. We booked our first major project in India this with nearly 200 MW to be shipped between Q3 and Q4. Our rest of world utility scale pipeline is still multiple GW. However, the impact of China's new energy rationing policies has kept us largely on the sidelines in terms of closing bookings in the near term. Fortunately, our JV model allows us to respond to such events. In the near term, we'll continue to leverage our JV partner's ability to deploy product in the domestic China market, where PPA prices are more correlated with upstream spot prices. Last, but certainly not least, a few words on our differentiated DG channel, which posted several notable achievements in the Q3. Overall volume in Europe was record-breaking, with robust growth led by Italy, the Netherlands, and Germany. In Latin America, we have several countries now among our fastest-growing markets globally, with our initial footprint heaviest in Mexico and Brazil. In the Q3, our Mexico team increased the size of our installer partner network by approximately 40% and is now working to roll out a consumer financing product offering, Maxeon's first in the region. We anticipate that this program will be available to consumers beginning in the Q1 of 2022. We see consumer finance as a significant value add to our DG channel, similar to the traction demonstrated for such offers in the U.S. market. Our AC panel volume outside the U.S. increased 50% sequentially in Q3 and is projected to increase more than 50% sequentially in Q4. Italy, a Maxeon stronghold, did not secure microinverter product certification until September, but it is now ramping quickly with a full suite of Maxeon AC panel options in both IBC and performance lines. In top European markets, France, the U.K., and the Netherlands, we're on track to have AC panels be more than 20% of sales as we exit the year. In Australia, we're on track to exceed 30%. As we look to 2022, we expect beyond the panel revenue to grow rapidly, driven by ongoing overall module volume growth, continuing increases in attach rate, and introduction of other adjacent hardware, in particular, battery storage. Going forward, we believe non-panel revenue will be the most appropriate metric to measure the success of our beyond the panel strategy, and we will provide guidance for this metric in our 2022 Analyst Day. Before I turn the call over to Kai, I'd like to provide an update on our plans for manufacturing in the United States. On our last call, we stated our intent to move forward with a 3-gigawatt cell and module facility on U.S. soil, pending successful negotiation of a DOE loan guarantee and the passage of enabling legislation, including the Solar Energy Manufacturing for America Act, also known as SEMA. Since then, the DOE invited us to proceed to the second phase of their process. This is the next of several steps in the DOE process, which could ultimately result in a conditional commitment and a final loan agreement from the DOE. Additionally, the most recently negotiated draft of Congress's Build Back Better framework, also known as the Reconciliation Bill, emerged with a modified version of SEMA, plus additional incentives for our downstream customers. We are strong supporters of this transformational legislation, and if it passes, Maxeon is in a great position to ramp capacity and be a key contributor to establishing a domestic U.S. solar supply chain. With that, I will turn the call over to Kai to review our financial performance. Thank you, Jeff, and hello, everyone. Let's turn to our financial results. I will discuss the drivers and details of our Q3 performance and then provide guidance. Total revenue for the Q3 came in at $220 million, at the low end of our guidance range of $220 million-$240 million. Our revenue was up 25% sequentially, which we attribute to growth in our utility scale business and another record quarter set by our European DG channel. U.S. shipments were also up materially from the Q2 levels. Total shipments for Q3 were 566 MW, which represent 30% sequential growth, but which was also somewhat below the low end of our guidance range of 580-640 MW. The shortfall is attributed to our exposure to the global shipping logjam that escalated considerably from September. For example, at the end of our Q3, we had 201 MW or 36% of quarterly shipments physically in cargo containers at sea or waiting to be picked up and loaded on vessels. This compares to 118 MW or 27% of our Q2 shipments at the end of the Q2. As Jeff mentioned, we took various actions that will enable us to reduce our exposure to turbulence in our supply chain going forward, but they were not yet realized in time for us to achieve the Q3 shipment target. The sales team did an excellent job of exceeding plan on ASPs, which allowed our revenue to come within guidance. Also, mix was stronger than expected due to strong sales into our DG channels, where prices are materially higher than utility scale. On IBC shipments, ASPs increased more than 1 cent sequentially to $0.52 per watt in the Q3. Blended ASPs were $0.39 per watt in the Q3, down 2 cents from $0.41 in the Q2 on a higher mix of revenue from our utility scale business. Gross loss came in at $16.7 million, or -7.6% of sales, which is inside our guidance range of a $10 million-$20 million loss. Included in our cost of goods sold is a $19 million impact or 8.6% of sales from our out of market polysilicon contract. $7.4 million of which was a loss from the sale of ancillary polysilicon in the market, and $11.5 million was for polysilicon consumed in our production of IBC panels. Note that computation for these charges is based on the market price of the polysilicon at the beginning of each quarter and thus is not impacted by intra-quarter swings in polysilicon spot prices. Our gross margin was also impacted by planned underutilization costs associated with our retrofitting of legacy production lines to Maxeon 6 technology and other activities related to the transformation of our manufacturing network. You can see on slide 4 in our supplementary earnings presentation how our temporarily reduced capacity in the Q3 compares to previous and future quarters. Costs associated with the technology transition came in line with plan, but our COVID shutdown and subsequent reopening process in Malaysia, where employee safety was decidedly prioritized, resulted in incremental charges, the largest part of which was included in our guidance. Altogether, underutilization charges due to the aforementioned reasons came in at approximately $6 million for the quarter. Once our manufacturing footprint optimization is completed, we expect underutilization charges to reduce significantly. We also saw freight and wafer cost increases during the Q3 beyond our expectations and those of many industry observers. Our projections provided during the last earnings call did not anticipate the length and impact of China's Ningbo port closure in late August, congestion in September at the ports of Long Beach and Los Angeles, and China's September energy curtailment impacting the wafer industry. We estimate that the supply chain costs for our products sold in the Q3, inclusive of freight, silicon, aluminum, and copper, were up by approximately $33 million, or 15% of Q3 sales year- on- year. In summary, our gross loss came in below the midpoint of guidance, primarily because overall supply chain and the COVID reopening process costs exceeded our expectations. Non-GAAP operating expenses, which adjusts our GAAP operating expenses for restructuring charges and stock compensation expenses, amounted to $29.7 million, which was near the low end of our guidance range of $31 ± 2 million. We maintained discipline on controllable spending and came in favorably due to bad debt reversals amounting to $2 million relating to collections from customers. Adjusted EBITDA for the Q3 was negative $33.1 million as compared to negative $27.3 million in Q2 2021, and better than the midpoint of our guidance range of negative $30 million-$40 million. Adjusted EBITDA was favorably impacted by our operating expenses coming in better than planned and a $3 million gain in the valuation of our HSPV position. This increase was attributable to a September capital injection by our partner and shareholder, TZS, without Maxeon participation. As a result of the transaction, our ownership was diluted from 20% to 16.3%, but our off-take rights were unaffected. The valuation gain from this transaction and our operating expenses at the low end of guidance resulted in an adjusted EBITDA above the midpoint of our guidance. GAAP net loss was $65 million as compared to $77 million in the Q2 of 2021. The sequential improvement was impacted by restructuring charges coming in at $1.5 million, down from $5.2 million in the Q2 of 2021. Restructuring charges in the Q3 were also lower than our guidance range of $3 million-$4 million as our legacy Toulouse factory shutdown progressed efficiently. Moving on to our balance sheet. We are pleased to have closed the quarter with $203 million of cash and restricted cash, down from $272 million at the end of the Q2. A majority of the sequential decline is attributable to our planned capital expenditures. Operating cash flow totaled negative $11 million during the Q3. Given the supply chain headwinds impacting net loss and inventories, we are pleased with the results of our working capital management. Inventories came in at $220 million, up $8 million from the end of the Q2, while DIO improved sequentially from 105 days to 83 days on higher sales. The increase in inventories was mainly a result of the aforementioned extended transit times that also negatively affected our sales revenue during the quarter. Q3 capital expenditures totaled $54 million, slightly below the low end of our guidance range of $55 million-$65 million. Funded primarily the capital efficient ramp of our high margin Maxeon 6 technology, our 1.8 gigawatt of performance line capacity for the U.S. market, as well as the Maxeon 7 pilot line. Now, I'd like to turn everyone's attention to our outlook for the Q4. We are closing the year 2021 with a strong focus on cash management, cost reduction, and execution of our key margin improving initiatives, especially the ramp of Maxeon 6 and Performance line for the U.S., as well as the setup of our Malaysia modco. While we have supply chain mitigation efforts in motion and our first Maxeon 6 sales are expected to start positively impacting gross margins in the Q4, the most significant margin initiatives and other developments that are expected to return Maxeon to positive EBITDA are not scheduled to begin showing their impact until 2022. Along with many industry observers, we currently don't expect a significant change to the overall supply chain condition for the solar industry until mid-2022. With that in mind, our guidance is as follows. Please also see a detailed guidance breakdown in our supplemental earnings slides. We project shipments in the range of 540-570 MW. This forecast has a higher sequential mix of DG volume and reflects the tireless efforts of our supply chain team getting products to our customers in the face of unprecedented conditions. Our expectation for shipments in Q4 supports projected revenues in the range of $215 million-$235 million. Non-GAAP gross loss is expected to be in the $5 million-$15 million range, which includes charges related to our out-of-market polysilicon contract in the range of $13 million-$17 million. We are continuing to take advantage of high pricing levels in the polysilicon market to opportunistically sell any excess poly that is not consumed into our value chain during the quarter. This way, we expect to realize attractive prices for those poly sales and increase our cash flow but also incur a loss to our P&L as our contractual purchase prices are even higher. With that, we are expecting our out-of-market polysilicon losses to be in the low $60 million range for 2021, versus an expectation of $80 million or more earlier in the year. In that context, and to keep you abreast of our remaining purchase obligations, as per the end of the Q3, those stood at $157 million worth of polysilicon at the contracted prices to be purchased through the end of 2022, for which we have made $62 million in prepayments already. As polysilicon prices are expected to remain high for a while going into 2022, we expect that we will continue to have the opportunity of monetizing the excess poly at attractive prices. Non-GAAP operating expenses are expected to be $31 million ± $2 million, which is similar to our Q3, excluding the bad debt reversal impact. Adjusted EBITDA is expected to be in the range of -$32 million-$42 million, driven by the gross loss forecast factor. Restructuring charges of $2 million-$3 million are expected as the restructuring activities for our manufacturing network near completion. Our capital expenditures are expected to be in the range of $45 million-$50 million for the Q4, driven by Maxeon 6 transition and Performance line capacity build-out in Malaysia and Mexico. With that, we plan to finish up 2021 within our original annual guidance of $170 million of CapEx. Our 2022 CapEx plan is still subject to changes depending on the timing and extent of the Maxeon 7 transition in our Fab 4 in the Philippines, and whether to move forward with the new U.S. manufacturing footprint. That said, our plan today, excluding these two opportunities, is to spend approximately $70 million, primarily to complete the first 250 MW of Maxeon 6, 1.8 GW of Performance line, and to retrofit all 250 MW of Maxeon 5 capacity to Maxeon 6. As for the Maxeon 7 capacity and ramp, we are currently evaluating, as a first step, a very capital-light conversion of our existing 550 MW of Maxeon 3 capacity in the Philippines into Maxeon 7. We anticipate CapEx of approximately $60 million-$80 million for this and based on our early success with the Maxeon 7 pilot line, we expect that spending on the conversion CapEx may start as early as 2022 and would last through 2023. We are still evaluating the timing of the CapEx spend and funding options for this and other growth opportunities available to us. In conclusion, we are pleased with our progress, most notably that our top initiatives to transform Maxeon by 2023 are all on track in the face of significant challenges. With most of these initiatives scheduled for completion over the coming Q5, we have line of sight to the culmination of our transformation. We look forward to demonstrating this transformation for all our shareholders, and we encourage you to follow closely our execution of Maxeon 6, U.S. Performance Line, and Beyond the Panel. With that, I turn the call back to Jeff to summarize before we go to Q&A. Thanks, Kai. At the time of our spin-off in 2020, we boldly projected a transformation to a 15% gross margin business. Having cleared many hurdles since then, we now have line of sight on this transformation. Over the next Q5, we expect to triple our in-house capacity with higher margin products, add storage to our Beyond the Panel portfolio, and our out-of-market polysilicon contract and see an eventual supply chain normalization. These four factors will drive our transformation. We look forward to our Capital Markets Day in the first half of 2022, when we'll share what's next for Maxeon in greater detail. Now let's go to the Q&A session. Operator, please proceed. Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, please press the pound key. Please stand by while we compile the Q&A roster. Our first question will come from Julien Dumoulin-Smith with BofA Securities. Please go ahead. Hey, good afternoon, team. Thanks for the time. Well, done all around. Thank you, Julien. Absolutely. I just maybe to kick things off here quickly, I mean, we've seen a pretty robust improvement in the wider commodity backdrop on energy prices, especially globally. How does that impact your P-Series product? As well as how does the 201 dynamic, again, I'll leave it to you to interpret exactly what's going on here, also contributes to P-Series prospects, especially in the Americas. First, thanks for the questions, Julien. Maybe I'll handle the first piece just on demand for P-Series in the U.S. market. Peter, maybe you can speak to the regulatory piece., I'd say first, the demand continues to be at a fever pitch for the product that we've already announced coming out of Mexicali for the Performance Series panel. We're booked for all of 2022, effectively 2023, and we're now really looking at how we fill out the capacity for 2024. Very, very strong and I would say a lot of proactive outreach from the market. We still feel, again, the combination of the technology that we have, who we are as a company, being a publicly listed company with strong, ESG fundamentals, coupled with the proximity of our factory sitting in Mexicali, that we're a really good solution. I would say pricing is also being reflected in that as well. We're still very pleased with the pricing that we're seeing. Peter, do you wanna add to that? Sure. I'll just comment quickly on the 201 action. Julien, as you know, there was just a recent ruling to reinstate the exclusion for bifacial panels into the U.S. I think it's frankly a little bit too early to know the longer-term trend there. So that's been in and out. So obviously, if it stays, if bifacial panels stay excluded, that will benefit utility-scale growth in the U.S., as, and certainly panels coming from our Mexicali factory as well. I have to say though that, in terms of longer term incentives, we are firm believers in carrots rather than sticks and support the administration's efforts to put those sorts of incentives, longer term incentives in place, which will attract, we believe, more significant scaled manufacturing in the U.S. with the greater certainty that comes with those. Got it. All right. Excellent, guys. Then if I can ask a little bit more detailed question here around liquidity and just the funding. You know, you've got a number of different levers. I'll let you elaborate on how you see them moving together here. Coming, in the Q4 here and also going into 2022, how are you thinking about those? Just, for instance, decisions on timing of build, revolver, for instance, U.S. expansion and ultimately capital market choices therein. I just wanna kinda check in, and I imagine by the time we get to mid-2022 with this Analyst Day, you will resolve a lot of this, but obviously it's still a lot of moving pieces here. If you can, Kai, just throw in some comments, if you don't mind. Sure. Julien, yes, there's a lot of exciting investment opportunities for us as a company and Kai in his prepared remarks cited a number of them. Certainly, it's something that we're obviously deeply thinking about and taking a look at. Kai, why don't you maybe provide some more color? Yeah, absolutely. Hello, Julien, and thank you for the question. First of all, as you have seen, we had about $200 million plus of cash, unrestricted cash on the balance sheet, at the end of the Q3, which met our expectations where we thought we would be. You can also see that we are pretty far advanced on our CapEx plan for 2021. We put out there that we're gonna spend about $170 million in CapEx. We are on track for that, and a lot of the heavy lift is going to be behind us in the not-too-distant future. We have given some color today on our CapEx plans for 2022, and you can see that the baseline CapEx is pretty modest in finishing up some of those activities that we talked about with about $70 million to finish up the U.S. P-Series line, to finish up the Maxeon 6 conversion, to finish up the modco in Malaysia, completion of Maxeon 7 pilot line, those type of investments. At the same time, of course, we've been very, very laser focused on network and capital management has been quite successful with that. You see that our operating cash flow came in at negative $11 million for the Q3, and that is in spite of inventories actually going up quarter- on- quarter because of the supply chain challenges that we have been facing. On top of that, we have also seen good success monetizing on our U.S. supply chain and the attractiveness of that also caused some of our customers, and some of them being shareholders and strategic partners of the company, to make prepayments for securing that kind of capacity. Of course, there's always a range of options out there for additional liquidity, which we are assessing on an ongoing basis. We'll make decisions on those items when the time is right. I think that's broadly how we are thinking about our liquidity position. Excellent. Thank you. I mean, so it sounds as if that largely between your existing liquidity avenues as well as the cash on balance sheet, that at least as of today, it sounds like that will address at least your 2021 and 2022 needs, if I'm hearing you right. We see a range of options and flexibility there. Got it. All right, fair enough, I'll leave it there. Then just if I can, just going back to the U.S. expansion. I know I danced around it a moment ago here, but can you elaborate a little bit more on the decision tree? If you can, your initial expectations on margins on the U.S. project, but especially as you think about the part one pivoting to part two, et cetera, what that financing looks like and the margin profile, but ultimately the decision tree that you're looking at in moving forward on that expansion here. Sure. I'll cover the first end, and Peter, certainly, if you wanna add some color afterwards. You know, I would say that in general, when we look at first the investment into the Malaysia and then Mexicali approach for the U.S. P-Series product, our model was showing it coming in at our long term or I'd say our 2023 model of 15% gross margin. We see it roughly in line with that. I think as we think about the broader U.S. P-Series, so potentially something with, SEMA incentives and the DOE loan guarantee, how, having us put a factory into the U.S. market. I think we'd probably think about it in a similar vein, but to be honest, there are so many moving pieces right now still with even with the SEMA incentives as they drive to conclusions, and also as we look at different state and local incentives that are coming in overall, and also incentives that are going even to our end customers, that will have an impact on everything from pricing and to overall costs. I think roughly speaking, I think directionally you could think about it in the same way that we did the Mexicali factory and the Malaysia investment that we did a few quarters ago. I'll just jump in real quickly, Jeff. The benefit for customers, which we're seeing reflected in significant interest in this project, has not only to do with the price of the modules, but perhaps as importantly, the proximity to supply chain, the risk mitigation in terms of any future tariff barriers. Just having the product made locally and supplied locally is of tremendous interest. I would add to that also coming from a, again, a U.S. publicly listed company, with good, Western business practices, we think also helps. I very much hear that. All right, well, listen, I've taken too much time. Thank you guys very much again, and best of luck. I look forward to next year. Thank you. Thank you for joining. Thank you. Our next question will come from Pavel Molchanov with Raymond James & Associates. Please go ahead. Thanks for taking the question. You said that costs were up year-over-year by approximately 15.15%, if I heard that accurately. What's the analogous number for module pricing in your sales mix? In other words, is there a kind of a sync between cost structure and pricing up roughly in tandem? Yeah. Thanks for the question, Pavel. I'll ask first and Kai, certainly if you wanna add some color, please do. You know, I'd say in general, our pricing is much more diversified and maybe fractured than you might have with other suppliers that sell through large distributors, where you can go and make one sweeping price change. You know, we have a variety of customers that we sell to, and we sell as you know, directly into over 1,200 global channel partners that we think are just fundamental to our business and the position that we have. We have a real mix, and we do have some customers where we are able to increase prices. We do have some, unfortunately, where we're not able to, where we have contracts in place that have fixed them, for a period of time. It ends up being a bit of a mix. I would say by and large, we are able to recover some of those supply chain cost increases, but not all of them, by any stretch. Okay. Is there a percentage you can put on how much you're recouping? You know, is it two- Yeah. Unless Kai corrects me, I think we're probably not ready to give a number that would identify a specific percentage on how our cost increases went relative to how much of the supply chain costs we incurred. We don't really have a specific number, Pavel, but I think it's safe to say it's pretty much dwarfed by the increase in cost. We are recovering some, but it's not making up for it by a pretty long shot. Thank you. Our next question will come from Philip Shen with Roth Capital Partners. Please go ahead. Hi, everyone. Thanks for taking my questions. First one is a follow-up on the Section 201. You know, with that news of the bifacial exemption being reinstated, was wondering what kind of benefit you guys could see, assuming that stayed in place and assuming the Section 201 was extended, come January, February of next year. Specifically, what I'm interested in is how you guys have structured your contracts for the backlog, because you said you've booked out 2022 and 2023. I'm guessing your contracts are FOB, and so is it fair to say that even if there is an exemption, the benefit ultimately goes to the customer and you guys haven't taken on that tariff risk? Am I thinking about it in the right way? Peter Aschenbrenner, maybe I'll have you answer some of the detail on this question. Sure. Phil, most of our contracts into the U.S. that we've booked out into the future have a shared tariff risk mechanism, which would become irrelevant to the extent that the product were exempt from any 201 that were in place at that time. Great. Okay. You guys do have a benefit there. Good. Would it be, is it 50/50? From a margin standpoint, incrementally things would look better if this Section 201 bifacial exemption remains. Yeah. I think it would primarily be, lower risk for both parties. It would allow us to sort of both get on with our business. We have a variety of different schemes for tariff risk sharing. I don't wanna go into that publicly today. Got it. Okay. Well, thanks for the detail you shared. So we saw, shifting gears here, SunPower recently buy, and our analysis suggests, they may do 50 MW this year and call it 70 MW next year. Given, the fact that all the IBC product is already taken up, incrementally, when do you think you might be able to feed, the IBC product, in 2022. Could it be early in 2022? Is it later in 2022? You've laid out your capacity plans there, but what's your view on that incremental, 70 MW of potential demand? Thanks. Yes. Phil. I would say first, we're very encouraged by SunPower's direction for growth, and in particular in the residential market. You know, when it comes to the Blue Raven acquisition, for us, I would say that we do have the capacity to handle more demand on IBC and certainly with the P-Series factories ramping up, we'll have the ability to support them with P-Series as well. I don't think that it's really so much around a supply constraint from us. We'll be able to meet whatever demand comes from that. Again, we're encouraged by the growth efforts for SunPower. Okay. Thank you. As it relates to margins and the outlook for 2022, I know you have not provided official guidance, but if you could speak to maybe the quarterly margin cadence in 2022. You know, at what point perhaps do we get to either breakeven or a positive gross margin? You know, we were thinking maybe Q4 would be it, but with the supply chain doing what it's doing and the freight costs and so forth. Do we get past breakeven in Q1 or is it more Q2, or sometime thereafter? Thanks. Let me take a first approach at this, and Kai, certainly you can add color. You know, Phil, when we look at the big drivers on gross margin for us, the headwinds, so the first is the out-of-market poly, and that goes away at the end of 2022. You know, that's a significant drain on the gross margins. The other, as you just highlighted, is on the supply chain costs, and as Kai mentioned in his remarks, $33 million of an impact in Q3 alone, created a pretty significant drag on gross margins. When we look at what's happening in the supply chain, take polysilicon as an example, there's a lot of talk of capacity expansion, which could kick in for, say, the beginning of the second half of 2022. Certainly, that would probably bring with it some significant cost reductions when it comes to, what's going on with P-Series. In terms of calling when exactly we think we're gonna get to a positive gross margin, I would just highlight that the Q1 and Q2 from a DG perspective seasonally are some of the weaker quarters that we have. The second half comes in strong. I would just add from a kind of more forward-looking perspective, we're still very much standing by confidently our long-term model for 2023 getting to the 15% gross margin number. That should speak to a lot of the progress that we're expecting to make over the course of 2022 to get there. Okay. Thank you for that detail. That's really helpful. You mentioned Hemlock and the contract or the out-of-market poly contracts coming to an end at the end of 2022. That said, given the turbulence out there and the shift away from Hoshine silicon metal, do you think that there is potential for you guys to actually add on another Hemlock, type contract, perhaps with more variable pricing and so forth? But to locking in that security of supply, if you will, how much of a priority is that for you guys? You know, certainly between direct discussions with poly suppliers as well as with our wafer suppliers, we are making sure that we are structured appropriately so that we have adequate supply to fuel the growth, the tripling of capacity that's gonna be happening here over the near term. You know, I would say nothing's off the table, but certainly a fixed price take or pay most certainly is. If we were to do anything, it would be we'd make sure that we were careful in terms of doing something that gave us the right flexibility, so we didn't get into the same situation that we've been in for the last decade with the out-of-market poly contract. Okay, great. One last question. As it relates to your P-Series manufacturing capacity and the IP around it, I believe HSPV has invested in an expansion in China, where they might be using G12 wafers. Wanted to understand what the economics of that relationship might be. You know, I think HSPV is a minority owner in this new venture. Does it have any impact on your potential to control or maintain control over your P-Series shingled technology, since this other company is, a little bit. It's an investment that might be away from what you guys have a direct stake in. I think the company's name is it Huansheng or something like that? Just wanted to see if there might be some color that you can share around the control and the economics of that relationship. Thanks. Peter, why don't you take that question? Sure. The short answer, Phil, is that there's no difference from our perspective. The expansion up to 8 GW is being conducted by essentially kind of a satellite manufacturing subsidiary of HSPV. All the product flows through HSPV to us. To us it's quite transparent. There's no change in allocation, IP control, all those other issues. Great. Thanks for addressing that and for taking all my questions. I'll pass it on. Thank you, Phil. Thank you. Our next question will come from Brian Lee with Goldman Sachs. Please go ahead. Hi, good evening. Thanks for taking the question. This is Grace on for Brian. I guess first questions. As I look at the 4Q shipment guidance, at the midpoint, it's down quarter-over-quarter. 4Q normally is a bigger quarter. Can you talk about what's driving that lower quarter-over-quarter shipments? I think mainly it's due to logistics, but is there anything else? Also, like, looking into 2022 revenue, previously you talked about, like, 40-60 split between the first half and second half. Given, like, all these challenges you're seeing now, how should we think about the seasonality in 2022? Thank you. Okay. Well, first, let me maybe take the Q4 volume and then Kai, maybe you can come in with the second question. You know, I'd say first, within Q3, we did have a fairly large utility scale set of volume that came into India as we highlighted in, I think, the press release. That, I'd say that's probably a contributor to why you're seeing a little bit of a down in Q4. We're also, I think, putting in some conservatism. We are really trying to understand what the transportation logistics realities are going to be as we finish up the quarter here. But as that's a pretty turbulent dynamic these days. Kai, let me hand it to you from there. Yeah, with regards to seasonality, Grace, so you're right, we talked about a 40/60 seasonality first half over second half. I would say, probably were it not for the increase in disruptions that we have experienced more recently, let's say from July-August timeframe, I think we would probably been pretty much on spot for that. You know, all the things that we talked about in this call about things, product being stuck in the harbor and at sea, longer transit times and all those disruptions, that probably for the most part keeps us away from reaching that typical seasonality. For 2022, I think that was the second part of your question, we're not giving guidance yet. We haven't completed all our planning for 2022. I guess a big swing factor is also going to be the power plant business. That's of course a function of a lot of the supply chain costs and so on. We're really not in position right now to reliably project how this is gonna fall out, especially from a seasonality standpoint. I do think that the 60/40 generally for our industry and for us holds true. Again, power plant is more lumpy and really hard to say right now. Okay. Thanks for the color. I have a follow-up to one of Phil's questions earlier. Your 2023 growth margin target of 15% is intact, but I just wonder like what risk do you foresee that could like potentially impact your ability to reach that 15% growth margin in 2023 and in a normalized like supply chain environment? Thanks. Sure. Thanks for that question. Maybe as a way of answering that question, I'd like give you some numbers just around how I think about our Q3 performance. Certainly, we showed a loss in Q3 for this Q3. If you exclude polysilicon, which goes away at the end of 2022, and the supply chain and transportation cost increases, we would have ended up delivering roughly a $20 million positive adjusted EBITDA. All of that in a quarter where our two largest factories are in a massive overhaul as we bring on new products that will open up new markets, new volume, tripling of capacity at higher margins, right? Think about our Maxeon 6 and just the 20-point increase in margins on Maxeon 2. That Q3, with those numbers, think about our two largest factories at 0% and 15% utilization, and both of them, by the time we get to even mid-2022, will be firing at near full. On top of that, when you get into 2023, you're now adding, additional things like Beyond the Panel growth. You know, we'll have storage in place by then. We'll have microinverters that adds to the margin line as well as the top line. You'll also have the beginnings of Maxeon 7, Maxeon Air. As you get into further out years, 2024, you can think about the potential for a U.S. plant. There's a lot of moving pieces that go in to getting us and building up our confidence around that 15% gross margin. I think even when you think about some of the supply chain disruption that's happened today, we'll have things in place that will better buffer us from that. You know, certainly being more vertically integrated with our Performance Series product by having our own cells being produced in Malaysia will help. There are a variety of other tactics we're putting in place. You know, as always, there are a variety of risks that could come into play when we think about that gross margin. I think we've got enough things, in some cases that are just time and distance, like the out-of-market poly, and other cases are really around execution, that we're still confident in that 15% or greater number. Great. Thanks for the color. I will pass it on. Great. Thank you. Thank you. Our next question will come from David Arcaro with Morgan Stanley. Please go ahead. Oh, hi. Thanks so much for taking my question. Kai, I was just wondering if you might be able to talk to any more detail, if possible, on the cash flow from operations outlook over the next couple of quarters. You had good momentum in this quarter, and just seems like there are a fair number of kind of cash needs upcoming over the next few quarters. Just wondering if you see an inflection point in one way or the other in the operating cash flow outlook over the next few quarters. Thanks. Y es, David. We don't really project our operating cash flow. We have been doing pretty well in this quarter. As I said, a negative $11 million in the face of quite some adversity and increasing inventories, for example. We keep a close eye on it. We work very diligently on managing this. We also have, other contributions that are coming in, like for example, prepayments that we're getting for our U.S. products and the supply chain for, pretty far out, 2022 and 2023, as you have seen. We feel pretty good. I think the team has been executing very well on all those initiatives, and we'll continue to focus on that particular area, but we don't really give guidance on it. Okay, that's helpful. Thanks. I was just wondering for your 4Q outlook, are you baking in any improvement in the supply chain backdrop or kind of a continued stable level of challenge across the different areas? If you look at our Q4 outlook, you see that the out-of-market polysilicon is expected to go down. I think we had about $19 million in Q3, and we are forecasting $13 million-$17 million in Q4. There's one reduction that we are forecasting there. Again, the envelope contract is pretty much fixed overall, so that's just the out-of-market portion that's gonna change. I think on the freight side, overall, we see a pretty high peak now on freight costs. We are not baking in much of a worsening on that side in terms of freight expenses. Maybe a little bit just because in the beginning of the Q4, freight prices have still been on the rise. You see that our gross profit guidance is better than what we had for the Q4 than what we had in the Q3. There's also some improvements that we have in there in our higher product margins. Got it. Thanks so much. Thank you, David. Thank you. As a reminder, if you have a question, please press star then one. We do have a follow-up question from Pavel Molchanov with Raymond James. Please go ahead. Yeah, thank you. Follow up on Europe. You clearly had some strength in Q3. Maybe I'll ask, kind of broadly, in the U.S., we're seeing some project delays in utility scale due to the uncertainty over the tax credit as well as tariffs. Is it fair to say that visibility on new builds in Europe is better by comparison? Yeah. Yes, I would say that's fair to say. I would think within Europe, there were, especially in the commercial side, there were some challenges, when we were going back to the COVID days with, sheltering in place and other, governmental, controls and not being able to build. But I would say since that time, things within Europe have gone well. Now, certainly from a utility scale perspective, we don't do that much business within Europe, or at least we're not currently. So, what I'm speaking here more around is the commercial side. But I'd say it's been relatively stable over in Europe. You do not have the tariffs questions in particular since there are no trade barriers in the EU market, correct? That's correct. That's also helped with predictability and other, challenges that we've had here within the U.S. market. Okay. Thank you. Thank you, Pavel. Thank you. As there are no further questions, we will now conclude the call. Thank you all again. You may now disconnect.