Good day, ladies and gentlemen, and welcome to the Maxeon Solar Technologies fourth quarter 2022 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 your host, Mr. Robert Leahy of Maxeon Solar Technologies. Sir, you may begin. Thank you, operator. Good day, everyone, and welcome to Maxeon's fourth quarter 2022 earnings conference call. With us today, our Chief Executive Officer, Bill Mulligan, 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 Bill. 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 20-F 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. Also, 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. With that, let me turn the call over to Maxeon CEO, Bill Mulligan. Thank you, Rob. Hello, everyone. This is my first earnings call as Maxeon's CEO. It is great to be back following over 20 years of experience leading SunPower's R&D and operations teams. During my first month and a half as CEO, I spent time at our California R&D headquarters, both of our cell fabs in Asia, with our sales and marketing team in Europe, and with employees and customers at our Modco in Mexico. I was reminded by these visits that Maxeon has two strong competitive advantages, one in the global distributed generation market and the other in U.S. utility-scale. These markets offer exciting, profitable growth opportunities with strong customer demand for high-performance panels. We have a well-established presence in both of them. I give great credit to our executive leadership team and to our board for putting Maxeon in a position to take advantage of these opportunities by executing bold transformation initiatives over the last two years. I'd also like to give credit to my predecessor, Jeff Waters, for leaving behind a high-performing, cohesive management team. Thanks to their efforts, today we have an updated and expanded manufacturing fleet, strong sales channels in the highest margin markets, expanding Beyond the Panel revenue streams, and the latest generation of the world's highest efficiency panel technology ready to ramp. Technology innovation has been a legacy strength of ours for decades. Going forward, one of my highest priorities will be to accelerate development and deployment of more efficient and cost-effective solar panel technologies that can be scaled quickly. We will continue to invest in Beyond the Panel offerings that will improve end customer experience and provide additional differentiation and strength in our DG channels. We will also aggressively pursue manufacturing cost reduction and operational excellence in our existing manufacturing facilities. I believe that this combination can make Maxeon one of the most profitable companies in the solar industry. Now I'll provide an update on our fourth quarter key initiatives and accomplishments through the lens of our distributed generation and utility-scale businesses. Kai will then review our financial performance and outlook, and we'll conclude with Q&A. Let me start by reporting that Maxeon delivered financial results in Q4 that were well above plan, driven by strong shipment growth, solid ASPs, and outstanding work by our operations group to significantly beat our COGS targets. As a result, we generated over $20 million of gross profit in Q4 and are well positioned for positive adjusted EBITDA in the current quarter. Our DG business was led once again in volume and revenue by our European team and their strong direct-to-installer channel. Shipments in Europe grew more than 25% year-over-year. We are now approaching an annualized deployment run rate of roughly 1 GW in our European DG business. Our European sales network comprises over 1,000 partners and incorporates services such as direct shipping, credit, in-person sales training, and strategic business planning that make this channel fundamentally different from our competition. We gained market share in several key countries, including the Netherlands, France, Germany, and Belgium, driven largely by increased shipments from our HSPV joint venture. Belgium was a particular bright spot with shipments up roughly 40% year-over-year and market share in the double digits, joining other long-term Maxeon's strongholds such as Italy and France. Blended DG ASPs in Europe increased more than 5% sequentially on stable module pricing and a higher mix of power electronic shipments and were up more than 30% year-on-year. In the fourth quarter, our AC module attach rate was above 20% of total DG shipments outside the United States, led by France and the Netherlands, where AC continues to account for a majority of sales. We expect our AC mix to continue to increase this year, driven by growth in markets where AC modules are relatively new. We also expect increasing revenue and profit contribution in 2023 from our SunPower Reserve storage solution and SunPower Drive EV chargers. The first storage orders were received last quarter in Australia. Our products team is launching storage in Europe soon, starting in Belgium, Italy and Spain. Turning to our United States DG business, we are seeing an excellent 2023 demand environment in terms of volume, growth and price. Unlike some segments of the U.S. DG market that are experiencing cooling demand, Maxeon's products are positioned in segments of the market where demand for our premium products is healthy, led by high cost of power locations, including California and the Northeast. Our product's value proposition is particularly strong in these markets because of the relatively small roof sizes and common tree shading conditions, both factors leading to constrained roof areas and playing to the ability of our products to deliver more power on our customers' roofs. We are seeing a strong cash business in these states based on long-term savings, with utility rate inflation absorbing part of the cost increases on loans and competitive leases and PPAs as alternatives to loans. Also in these more mature markets, installers often have sales processes engineered around the long-term value of solar rather than a simple focus on year one savings. Even in states experiencing some cooling demand for solar due to higher interest rates, we are seeing cases of countercyclical growth from installers who sell long-term value. We are pleased to have recently announced the expansion of our SunPower relationship with new commercial terms for 2023 and mutual exclusivity for Maxeon 6 in the U.S. through 2024. As we discussed last year, we see opportunity in large segments of the U.S. residential market where SunPower isn't present and where demand for our premium modules has increased due to the abrupt exit of LG. We're excited to take advantage of this opportunity with our new U.S. channel, partnering with Greent ech Renewables. In this relationship, we expect to leverage Green Tech's unparalleled distribution capabilities and focus our energy on training installers on the benefits of our technology and how to translate those benefits into improved financial outcomes for both installers and homeowners. During 2023, we plan to roll out elements of a multi-tiered channel program in the United States, similar to our European structure. We are planning to exit 2023 with over 100 new Maxeon channel partners in the U.S., all incremental to SunPower's channel. We're selling our Maxeon 3 technology in this channel, which boasts industry-leading efficiency and our new 40-year warranty, which offers installers another unique selling proposition and provides homeowners with enhanced peace of mind. In summary, our confidence in the strength of our global DG business is high. We expect strong ongoing demand in Europe, increased availability of Performance Line panels from HSPV, and meaningful contribution from our Reserve and Drive products will support continued growth in Europe and Australia. In the U.S., we believe that the addition of our new US channel through Green Tech, on top of our contracted minimum volumes with SunPower, set us up for strong DG volume growth in 2023. Let's now transition to our utility- scale business. We remain primarily focused on the United States market, where our uniquely positioned North American manufacturing footprint allows us to provide our customers with reliable supply of leading-edge technology. We also have a unique corporate profile anchored in strong ESG values, which is becoming increasingly important to various stakeholders. Earlier this year, we are honored to be the sole silicon module manufacturer named on the Corporate Knights list of the World's 100 Most Sustainable Corporations, a welcome recognition of our focus on becoming an industry leader in sustainability. Our value proposition has been validated by a number of key customers who have contracted for 4.2 GW of supply backlog extending deep into 2025, plus options with advanced deposits for an additional 1.5 GW through 2027. Since our last earnings call, all new bookings have been secured with repeat customers, and in some cases include adjustments to 2023 commercial terms, which Kai will discuss in his guidance commentary. With a solid and growing multi-year backlog in place, our attention in this business is primarily focused on completing the ramp of our mono- PERC cell and module production and driving cost reduction. Our Performance Line is expected to ramp to the full 1.8 GW of capacity by this summer. On the supply chain front, we are finally seeing cost decreases on key input materials which contributed to our better than expected fourth quarter results and which support the trajectory toward achievement of our long-term financial model targets within 2023. We continue to progress with the planning of our U.S. manufacturing facility and are in due diligence with the Department of Energy's Loan Programs Office, which is the final stage of the LPO process. Subject to successful completion of this process, we expect to significantly benefit from the IRA incentives in future years as we ramp our planned U.S. manufacturing capacity. There is a lot of excitement at Maxeon currently as we expect to deliver our first adjusted EBITDA positive quarter at the end of this month and are on plan to achieve our long-term financial model within the next ten months. With that, I'll turn it over to Kai. Thank you, Bill. Hello, everyone. I will discuss the drivers and details of last quarter's performance, then provide guidance for the current quarter and the full year. Total shipments for the fourth quarter were 734 megawatts, up 21% sequentially, slightly above our guidance range of 680-720 megawatts. The growth is attributable to strong DG demand, as well as operational progress from our internal Performance Line capacity for the U.S. utility-scale market. Revenues for the fourth quarter were $324 million, near the high end of our guidance range of $290 million-$330 million. The primary drivers were strong output from our Maxeon Performance Line Modco, as well as healthy ASPs in DG. ASPs for our top of the line IBC panels were up by 17% quarter-on-quarter, supported by incremental volume shipments into the U.S. for SunPower, as well as the new U.S. DG channel. Non-GAAP gross profit in the fourth quarter was $21 million, up $36 million from the previous quarter, and $45 million higher than our margin trough in the second quarter of last year. It represents a 6.4% gross profit margin, and is the highest ever since Maxeon became a stand-alone company, as well as the first positive gross margin since Q1 of 2021. We forecasted being gross margin profitable in the quarter, the results exceeded the expectations embedded in our $0-$10 million guidance range. The primary reasons for this outperformance were operational improvements at our Performance Line factories in Malaysia and Mexico, as well as supply chain costs, especially freight, falling faster than expected. Earlier in 2022, there were opportunities to slightly reduce freight costs in the near term by entering into long-term contracts. While these opportunities were tempting at the time, we believed spot prices would ultimately pull back, and Maxeon could realize greater cost savings over time with a more flexible strategy. Last quarter, shipping rates declined sooner and faster than anticipated, and hence contributed to a better than expected result for our P&L. Polysilicon spot price declines in China have also been positive for our transfer prices with HSPV, which track market indices. On a year-over-year basis, the impact of total supply chain cost inflation on our cost of goods sold was favorable $2 million. This is materially improved from the prior seven quarters when we saw an average unfavorable impact of more than $30 million per quarter. Increasing ASPs resulted in an uplift of $43 million, providing a significantly favorable contribution to our bottom line. Our Performance Line products for the U.S. utility-scale market were introduced less than a year ago, they are excluded as no year-over-year comparison exists. Underutilization charges totaled $9 million in the quarter, demonstrating sequential improvement as we approach completion of the capacity ramp for our Performance Line products. Our fourth quarter COGS included a small amount of out-of-market polysilicon costs, which were below our guidance of $1 million. These costs were related to a long-term contract executed 13 years ago that ran until December 31st, 2022. With this contract now expired and any remaining impact expected to be immaterial, we are happy to announce that we will now cease reporting on this metric going forward. Non-GAAP operating expenses were $34 million in the fourth quarter, compared to our guidance of $36 million, ±$2 million. Adjusted EBITDA in the fourth quarter was -$4 million, significantly better than our guidance of -$17 million - -$27 million, based on the previously mentioned favorable development that impacted our gross margin. GAAP net loss attributable to stockholders came in at $76 million, compared to $45 million in the previous quarter, mainly driven by a $42 million quarter-on-quarter swing in the mark-to-market valuation of our prepaid forward, as well as $26 million higher income tax provision quarter-on-quarter. Moving on to the balance sheet. We closed the fourth quarter with cash equivalents, restricted cash, and short-term investments of $344 million, compared to $314 million at the end of the third quarter. DIO was flat sequentially at 91 days. Capital expenditures in the fourth quarter were $7 million, which was below our guidance range as we maintained payment discipline while continuing to spend on our Performance Line capacity and other ongoing initiatives. We are very pleased to have exited 2022 with a positive gross margin trajectory, particularly in DG, which now enjoys a much improved cost structure thanks to the successful ramp of Maxeon 6 capacity and improved ASPs based on our geographic optimization strategy and execution by the sales team. Our next financial milestones are to post an adjusted EBITDA positive quarter and to achieve our long-term financial model, including a gross margin of at least 15% and adjusted EBITDA margin of at least 12% of sales by the end of 2023. Previously, we indicated that getting from gross margin break-even to 15% assumes the following key levers. Transitioning to higher ASP utility-scale contracts, fully ramping our 1.8 GW Performance Line facilities, increasing U.S. residential sales, and growing Beyond the Panel in Europe, all while benefiting to some degree from supply chain cost improvements. Many of these levers are already now showing substantial progress and ongoing momentum. First, a portion of our previously below-market utility-scale ASPs has been adjusted as part of a broad package of supply renegotiations. Second, as Bill mentioned, some of the expected supply chain cost reductions have been realized sooner than expected, and our DG business is benefiting from a combination of factors on both the cost and ASP sides. As a result, we now expect significant margin improvement to occur in the first quarter, with further progress expected in the second half of the year as we progress towards our long-term financial model. With this context in mind, I'll now turn to our guidance for the first quarter of 2023, and then lay out our view for the full year. We project first quarter revenues of $305 million-$345 million. The midpoint of these numbers and of our shipment guidance are a product of continued ASP increases for our IBC products, offset by a higher mix of utility-scale shipments due to ongoing ramp of Performance Line shipments to our U.S. utility-scale customers. Non-GAAP gross profit is expected to be in the range of $30 million-$40 million. At the relevant guidance midpoints, this represents an 11% gross profit margin. The largest contributor with respect to sequential improvement is unit cost reductions on our Performance Line due to ramp effects. We also expect to see ASP improvements due to adjustments in some of our utility-scale supply agreements, as well as the impact of our first quarter of shipments through Maxeon's new residential channel, together with improved pricing with SunPower. Non-GAAP operating expenses are expected to be $37 million ±$2 million. This includes a slight increase in our spend for Beyond the Panel and the U.S. residential channel, both of which are expected to enable significant incremental gross margin. Adjusted EBITDA is expected to be between $10 million and $20 million, driven largely by improvements in our gross profit. At the relevant guidance midpoint, this represents a 5% adjusted EBITDA margin and would be Maxeon's first adjusted EBITDA positive result. First quarter capital expenditures are projected to be in the range of $13 million-$17 million. We expect total CapEx for the year to be in the range of $100 million-$120 million for the completion of manufacturing capacity for Performance Line panels to be sold into the U.S. market, completion of manufacturing capacity for our Maxeon 6 product platform, further developing Maxeon 7 technology and operating a pilot line, preparation of the capacity expansion for our Maxeon 7 technology, as well as various corporate initiatives. This annual CapEx guidance excludes spending for any U.S. manufacturing, which we plan to finance primarily with a U.S. Department of Energy loan and customer co-investment. Previously, we have not provided annual P&L guidance. With the majority of our transformation behind us, we are pleased that we are now in a position to do so. We project 2023 revenues to be in the range of $1.35 billion-$1.55 billion. About half of these revenues are based on volumes and prices that are contractually fixed for the entire year. For those parts of our business that are not contracted at fixed terms, we feel well positioned due to diversified and growing demand in Europe and the U.S. 2023 full year adjusted EBITDA is expected to be between $80 million and $100 million, achieving margin levels consistent with our long-term financial model before we exit the year. As these targets and our first quarter guidance imply, we expect margins to increase further from current levels, with the fourth quarter expected to be our best quarter on both margin dollars and percentages. The ramp of our Performance Line facilities and related operational improvements are primary levers, followed by ASP expansion and utility-scale as we commence shipping on our 2022 bookings, as well as incremental margin contributions from our new residential channels, plus Beyond the Panel products. With that, I turn the call back to Bill to summarize before we go to Q&A. Thank you, Kai. As I mentioned in my opening remarks, my goal is to help make Maxeon one of the most profitable companies in the solar industry by driving aggressive manufacturing cost reduction and operational excellence while capitalizing on our leadership in panel technology and global channels. The company has a strong start in 2023, with positive adjusted EBITDA guidance for the first quarter and expected increasing profit throughout the year. As we look beyond the current year, we are pursuing several significant growth opportunities that we expect to drive future top and bottom-line expansion. Now, let's go to Q&A. Operator, please proceed. Thank you. As a reminder, to ask a question, simply press star one one on your telephone and wait for your name to be announced. To withdraw the question, simply press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Alexander Bravo with Bank of America. Please proceed. Julien, you wanna take it? Yep. Hey, good afternoon. It's Julien Dumoulin-Smith here. Hey, thank you guys very much. Truly, well done. Impressive, I gotta say. To that end, I just wanna talk a little bit about the margin inflection we're seeing here in the fourth quarter, and obviously talking about here in the first quarter. I mean, what's the cadence as we think through the course of the year here? I mean, you're already achieving a good chunk of what you wanna do in 2023 from a gross margin perspective in the first quarter, as far as you're suggesting here in the guidance. Can you talk a little bit about how you get to that 15% through the course of the year here into the exit run rate? Similarly, can you talk about what the outline looks like even for the year ahead, considering, the utility-scale comments that you made and what that might imply for your domestic manufacturing effort? Yeah. Hi, Julien. Bill Mulligan. Yeah, thanks for the question. Yeah, you know, we're obviously starting off 2023 strong. We expect the business to continue to improve throughout the year. As you probably know, Q4 is typically seasonally our strongest quarter. We also expect some Maxeon specific parameters to come into play here. You know, perhaps Kai could say a few words about that. Yeah, absolutely. Hi, Julien, and thanks for your encouraging words here. We put a little slide together also on page six of our slide deck that you wanna reference, you may wanna reference in terms of the gross margin trajectory. You're right to point out that we had quite a steep improvement here in gross profit margin on a non-GAAP basis in the fourth quarter. You know, a few things came together. We already guided for break- even levels, above break- even levels. You know, we outperformed that guidance, as I mentioned before, partially because of outperformance in our operations for the U.S. Performance Line and also because of especially great costs dropping sooner and faster than we had anticipated. As we look into the first quarter, you see some further improvement here. Those improvements are gonna come from continued improvements in our U.S. Performance Line. We continue to ramp. Costs are gonna come further down. We are expecting to further reverse some of the lower of cost or market inventory write-downs that we've had. That always gives a bit of a boost there when we do these reversals. You know, we have had some economic benefits from some of the renegotiations that we have done with our customers for some of those delivery contracts that are gonna kick in in the first quarter. Furthermore, I would point out the strong U.S. business. We have renegotiated our supply and extended our supply agreement with SunPower. We got our new U.S. residential channel ramping. Europe is a very strong area. We have seen strong IBC ASP increases in the fourth quarter, and we expect to continue to do so in the first quarter. There's quite a lot of things coming together here to get us to the levels that we are guiding. We expect further improvements through the year, as we then kind of have the highest expected performance for the year in the fourth quarter, and also expect to achieve our long-term financial models within 2023. Got it, guys. Just, if you wanna talk a little bit on the sustainability of the ASPs here. I mean, obviously, you know, given the backdrop, given the trends here, it's a nice benefit here. How do you think about cost input, and the ability to hold on to some of that improvement yourself or passing along, that to, your customers here through the course of this year, if you will? We have yeah, we have really, really good confidence in our projections here that we put out. As we said in our prepared remarks, about half of our ASPs are locked in for the year, based on those projections. That definitely gives us some comfort, but also we have some, you know, very, very strong position, product positioning really, with our products, in some markets. We think the projections that we have put out here are really high confidence. Got it. Excellent. Just on the build-out on the utility-scale side, just any comment on status with DOE, et cetera, just considering how much demand there seems to be. I mean, it's quite a statement on the prepayments. Sure. Julien, Bill again. You know, I'm really excited about this U.S. project. You know, as you may know, I've been working in the battery industry for the last few years and we've been following what became the IRA legislation very closely. For a while there, we didn't think it was gonna happen, but, you know, we applaud the administration for getting it done and DOE for their mandate to, you know, enable the funding. The IRA is a real game changer for renewable energy in the U.S., you know, bringing back good manufacturing jobs and increasing national security by controlling our energy economy. You know, given Maxeon's Silicon Valley heritage, our strong North American footprint, our long experience in the U.S. market, we believe Maxeon's really well positioned to benefit from this. We believe the project we've got out there is really consistent with the administration's objective. The project economics I think look really quite favorable given the IRA incentives. As I mentioned in my prepared remarks, you know, we're now into the due diligence phase with DOE. This is the last step in the Loan Programs Office process. We're working to bring this capacity online as soon as possible. Got it. Excellent. Well, congrats again. Speak to you guys soon. Welcome, Bill. Thank you. Thank you. One moment for our next question, please. It comes from the line of Philip Shen with Roth MKM. Please proceed. Hey, guys. Thanks for the questions. I'll echo the congratulations as well, on the margin improvement and outlook there. Wanted to dig into the updated relationship with SunPower. You guys had that announcement earlier this year. Seems like it's a strong and healthy one. I think on the last quarter you guys talked about how SunPower might be maybe 50% of your DG mix in 2023, down from maybe 75% in 2022. With the expansion of that relationship, I gotta imagine SunPower's gonna take a larger chunk of that of your IBC volume. I was wondering if you could share what that might be. I'll have a few follow-ups here as well. Thanks. Yeah. Hi, Phil. Yeah, you know, SunPower, of course, is an extremely important customer for us. We're really excited about this relationship and, you know, I think it's mutually beneficial and, you know, we hope to keep it going for, you know, a long, long time. You know, I think in terms of the specific contribution to our overall volume, that's something we generally don't disclose. You know, Kai, I don't know if there's any more color you could add there. No, not really much. You know, we don't, we don't break down our business by customers. I can refer you to our prepared deck where you can see, you know, the DG business overall on a revenue basis that's been growing in the fourth quarter to $244 million revenue from $228 in the third quarter. And you also see some of the regional breakdown there, but of course as far as the Americas, USA and Canada are concerned, this is a combination now of our U.S. utility-scale plus SunPower plus the new U.S. DG channel. Got it, guys. And I totally get it, but as a quick follow-up there, you know, you did share a little bit last quarter and just on a forward-looking basis, given the announcement earlier this year, I gotta imagine incrementally there's more volume to SunPower than you guys had expected perhaps from the end of 2022. Is that a fair statement? Hey, Philip, this is Peter. Maybe I can take that one. Again, as Bill said, we don't, I think, typically break out volume by customer, or price for that matter. I think it's fair to say that there's more volume, there's more demand for our product, particularly our IBC product, than we can serve. We've been in the process of shifting some of that allocation around to optimize overall ASP. In general, I think that means more of the product going to the U.S., where ASPs are the highest. There, though, we have, you know, we have the two options of bringing up our own new channel, which is, you know, very healthy ASPs and also strategically important in the long term. There's a balance there between. To supply to SunPower and supply to the new Green Tech channel. Great. Got it. Thank you, Peter. Then I think you guys started your dealer network recently as well, maybe a month ago or so. You know, what's the risk or potential there that dealers may jump from SunPower to your network? Is that, you know, something that you do not expect at all, or is that something that might happen? Then as it relates to Green Tech, you just talked about it, how is that volume looking? You know, with You know, we were writing and identifying module price decreases in resi solar, you know, from the end of last year till now. I think that's dropped out recently. Has the price reduction there impacted you guys in any way? I'm guessing at the premium segment, maybe not much, at all, but perhaps a little bit. Just curious if you can talk through some of those dynamics. Thanks. You know, the overall strategy with Green Tech Renewables is really to address portions of the market where SunPower is not there. If you look at some of the supplemental material there, you can see there's a large sort of unaddressed portion of the market that we hope to go there. There's just our dealers out there that can't get the Maxeon product. That's our goal, you know, that opened up when LG left the market fairly recently. You know, we're trying to fill that hole and stay away from the SunPower dealers. Great. One last one, if I may. Can you talk through what the margin structure looks like for resi or DG in Europe versus the U.S.? I know the pricing is better here in the U.S., but does that directly correspond to higher margins here? If not, maybe talk us through how Europe is able to kind of maintain a stronger margins to the U.S. I would say, on the IBC side, pricing, we oftentimes talk about it as a proxy, and that's why we are optimizing, we're paying for prices. In fact, what we're optimizing for is for margin, right? Here, the reason why we are have been moving more volume to the U.S. is because not only it's better price, but also it's better margin. Directionally, the margin is better in the U.S., and that's why we are doing it. In addition to that, another, you know, extra point to make is our Beyond the Panel business, which includes the established microinverter business. We just talked about that, we are now at a point where we are enjoying more than 20% attach rates, and we're not gonna stop there in Europe. We are starting with Beyond the Panel in Australia and soon going to Europe with storage and then afterwards EV charging products. These are other initiatives that we have that are going to boost margin percent, but also margin dollar. Maybe I can just add one note to that, and that is that the, you know, our product portfolio currently is a little different in Europe and the U.S., in that in the U.S., in the European DG market, we have not only our IBC products for sale, but also a healthy dose of our Performance Line, which we source from HSPV joint venture. We've got a different sort of portfolio of weapons there, and we're able to increase overall volume through our channel there, in two ways. The optimization that we're talking about really is an optimization across not only the relatively constrained IBC capacity, but also a little bit more of capacity on tap in Europe with Performance Line. Great. Peter, Kai, Bill, thank you guys very much. Bill, looking forward to working with you more. Yeah. Great. Likewise. One moment for our next question, please. It comes from the line of Brian Lee with Goldman Sachs. Please proceed. Hey, guys. Good afternoon. Thanks for taking the questions. I apologize, I hopped on late, so if some of these have been asked, I apologize in advance. In the interest of time, I'll just ask three questions I had, I'll just ask them all at once. One was on the DOE loan guarantee process. It sounds like there's an update here. Could you kind of elaborate as to what the next steps are and any kind of expected timeframe on that? Second question would be around ASPs in four Q. They seem to have jumped up double digits. Is that just mix related, or did you see like-for-like price increases? Maybe give us a little bit of color around that. Then, lastly, on domestic content, I know you guys have been talking about being sold out through 2025. Maybe you have sales even into 2026 and beyond. Have you gone back and embedded any pricing uplift for domestic content adders? Are your customers giving you that premium? I think your peer, First Solar, talked about $0.03-$0.04 a watt recently on their call. Just wondering what your status is on kind of capturing some of that value, you know, once you have the 3 GW facility up and running in the U.S. Thanks, guys. Yeah. Hi, Brian. you know, Peter's been managing the DOE project pretty closely. I'll let him speak to the, where we are with the Loan Programs Office. Okay. Actually, let me start with the second question first, Brian, since the other two are related. We did, yes, we did mention ASP uplift in Q4, specifically our IBC prices were up fairly significantly double digits. Most of the ASP increase you saw there was a factor of real ASP strength within the individual product lines, not a mix issue. With respect to the DOE loan, we said on our prepared remarks that we were now in the due diligence phase, which is the last phase of the process. The next milestone will be conditional approval of a loan. We're working towards that very hard with the DOE. In terms of the domestic content, we're not really exposed to that yet, since we're not manufacturing anything in the U.S., and we haven't signed any supply contracts yet around our U.S. factory. You know, we're gonna see how that plays out. We are confident that we'll be able to, you know, by manufacturing both cells and modules in the U.S., we're confident that we'll be able to take credit for that domestic content, the ITC adder. It's not something that we're contracting for yet. Yeah, I will point out, although we're not able to take advantage of the domestic content, yet, directly, we do benefit from being viewed as a Western solar provider, with, you know, reliable supply, reliable warranties, and bankable. That does give us tailwinds in the U.S. market today. Our, of course, our supply chain out of Mexico is extremely efficient, into certainly the Southwest portion of the U.S. Okay. Appreciate it, fellas guys. Thanks. I'll pass it on. Thank you. One moment for our next question, please. It comes from the line of Pavel Molchanov with Raymond James. Please proceed. Thanks for taking the question. Let me stick with the European theme, but on the kind of supply side of the equation. We're hearing more and more about this European Green Deal industrial plan, which will subsidize domestic manufacturing a lot like the Inflation Reduction Act. If that were to materialize, would you, for example, revive the factory that you had in France or perhaps seek to expand your European manufacturing in some other way? Yeah. We're, you know, we, of course, monitor that situation closely, and, you know, I think it's too early at this point in time to say how we would respond. Yeah, we're always looking at these things carefully, and if the policy's in place and it makes economic sense, you know, we'll consider any option. Yeah. Pavel, maybe I'll I can just add one thing. You know, as you know, I think as well or better than any, Europe is a long-term key market for us. We've got a very strong position there, and of course, would be interested in bringing the same sorts of kind of local supply chain advantages that we're planning on doing here in the U.S. and have already put in place in Mexico. What I would say is that, you know, the industry evolves pretty quickly, and both from a technology perspective and a scale perspective, anything that we would build in Europe would be quite different from historically what we had in France. Without, you know, going deep into any particular jurisdictions or regions, I would say that, to the extent that we decide to build something in Europe, it would probably be quite different than what we were operating in the past few years. [audio distortion] We're the engineers you know, Maxeon, you know, we believe, you know, given our strong global footprint, you know, we have a lot of experience in Europe, well over a decade of experience, so we're very familiar. We've got lots of talented people on the ground. If there's something like that to develop, we're well positioned to execute on it. Understood. Turning to your guidance, obviously you're looking for this kind of back-end-weighted ramp in revenue through the second half of the year. Given that, should we assume that you'll be essentially at full utilization of your existing capacity, Asia plus Mexico, in Q4 of 2023? Pavel, this is Kai. Yes, I think that's gonna be a good assumption. We think that sometime around the mid of the year that we are gonna achieve full capacity utilization, first in the cell fab, and then of course, in the module. There's of course, a transit time in between. By the end of the year, I think everything should be running and humming at full capacity of that U.S. Performance Line capacity. Maybe looking a little bit ahead into 2024, will there be additional expansion in any of your existing manufacturing facilities, into 2024? Again, not talking about the U.S. You know, our long-term financial target is to show at least 20% year-on-year revenue growth. You know, if you look back historically, we did 35% last year, and based on our midpoint guidance, you can expect about the same this year, maybe a little higher. You know, we feel confident we're gonna be able to stay on that long-term financial model. We do have things in flight that, you know, will allow us to increase capacity. As Kai mentioned, we'll be fully ramped with the P-Series capacity by the end of the year, so we'll have a full year of production as opposed to partial year at full capacity. We've got some debottlenecking activities going on on our Maxeon 6 technology primarily. That will be coming online. We do have our Beyond the Panel revenue stream that's gonna be coming online. You know, all those should really contribute strongly to 2024. Bill, the only thing I would add to that is we also have, of course, a capacity on tap at our HSPV joint venture for sale into Europe in particular. Got it. Thank you very much. Thank you. One moment for our next question, please. It comes from the line of David Arcaro with Morgan Stanley. Please proceed. Hey, thanks so much for taking my question, and congrats on the great results. You mentioned the long-term financial model. I was just wondering, you know, and it's, you know, getting closer more in the sights at this point, wondering if there's a natural timeframe when you might reassess and refresh what the long-term financial model target should be. David Arcaro, I would say, you know, first of all, I would like to point out that the long-term financial model states at least 20% growth. As Bill just pointed out, we have outperformed that over the past year. We're expecting to outperform it this year, and we are expecting to be roughly on it in 2024. Some other activities are probably gonna kick in beyond 2024 to put us back on a higher growth trajectory again. As far as the gross profit margin and the EBITDA margin is concerned, all of them state that these are numbers that we wanna at least achieve and hopefully overachieve over time. We don't see a need right now to restate that. I think, you know, we've talked about the target margin profile of some of our different businesses. We actually, on the IBC side, and on the DG side, I would say, we are already at or above those target margins in the fourth quarter, and moving beyond that, in the first quarter as far as IBC and the Performance Line from HSPV is concerned into DG markets. You know, some other businesses like Beyond the Panel is still ramping up, and it's gonna provide top line and bottom line growth over the next quarters to come. Right now we stick with our long-term financial model. You know, we expect to achieve it within 2023, and then, we are gonna maybe talk about other things at the appropriate time. Okay. Understood. That's helpful. you know, given the strong demand that you've been seeing in the U.S. market, I was just wondering if you could give your latest thinking on whether there's some potential to self-finance a U.S. manufacturing facility, you know, separate from the DOE process, if you might consider, you know, self-financing and using your balance sheet for additional capacity here. Yeah. That's not something we're looking at right now. We feel like we're pretty far advanced with the DOE program. I think we'll start there. We think the DOE, loan program is a really attractive source of financing, so that's definitely our plan A. Yeah. Gotcha. No, that's fair. Last thing for me, I was just wondering if you could give an update on what the Maxeon 7 ramp looks like in terms of the latest outlook there. Yeah, no, you know, we're really excited about the Maxeon 7 technology. I was one of the original developers of our IBC technology. You know, now that I'm back after a few years away, I'm just really proud that our team continues to push the boundaries of photovoltaic technology and, you know, we're in a position to increase Maxeon's technology leadership again. The pilot line has been running. It's been quite a great success. It's hitting its yield and efficiency targets, getting better all the time. We've started laying the groundwork for Maxeon 7 expansion in terms of some building and facilities upgrades. We're gonna be doing it in one of our existing facilities in the Philippines that's currently not in operation. Yeah, we'll be talking more about our plans later as they come out. Okay, great. Appreciate the color. Thanks so much. Thank you. One moment for our next question, please. It comes from the line of Donovan Schafer with Northland Capital Markets. Please proceed. Hey, guys. Congratulations on the positive gross margin. Donovan, excuse me. Can you lift your voice? We can't hear you, Donovan. Hey, all right. Is that better? Yes. Thank you. Yeah, you know, congratulations on positive gross margin and outlook for positive adjusted EBITDA. You know, been waiting a long time to get here. Most of we're finally here, very cool to see that. I wanna dig in on the Department of Energy loan guarantee. I know a lot of people have already asked questions about that. Could you talk about what kind of, like, determinations do they have to make at this point with the due diligence process? You know, are they estimating, like, number of jobs created? Are you pitted against, you know, other applicants with a limited pool that they do guarantees for? And maybe also helping in that context, like, what are the sort of hoops or milestones or things you've already gotten passed? If you can kinda... I know you can't give, like a probability, like, you know, "Hey, we think, you know, 97.83% probability." Like, you may have that internally, I'm sure you can't share it. If you can just give us that broader context of what the determinations are, how far you've already gotten already, and, you know, are you kind of pitted against other projects, and they have a limited pool to work with? All that would be helpful. Okay. Donovan, this is Peter. I'll take that based on Bill's guidance last time. There's a couple parts to your question. First of all, are we pitted against other projects? What we have heard, I think both, you know, from the DOE and what we can infer from the funding that's been committed is that there is enough funding in their war chest currently to fund good projects that they want to do. I think as we've said in the past, we were in the queue quite early, you know, well before the passage of the IRA. I think we're in a good position both with respect to the quality of the project, the, you know, the risk of the technology, jobs, et cetera. I don't think it's DOE's job to evaluate sort of on a job, you know, job creation basis per se, but clearly. In other words, I don't know if they give scores for how many jobs you create. Clearly, bringing the technology, scaling it up in the U.S. and creating jobs through doing that is what they're trying to facilitate. You know, I think at the end of the day, you should think of the DOE, or we think of the DOE as kind of a motivated banker. The kinds of evaluations that they're gonna be doing are similar to what any other banker would be doing in terms of the risk of repayment. I think at the top of their list is: What is the likelihood of repayment of the loan? You know, maybe we're a little bit biased because we're very close to project, but I think both in terms of the maturity of the technology, it's technology that we've practiced before. We understand the market. We've got customers that are very eager to take the product and co-invest for it, which is a very strong side on the demand side. As they evaluate technology risk, company execution, demand solidity, I would like to think that we're gonna get high marks for those. There's an environmental review called NEPA, which is kind of a parallel path, which is another milestone that we go through. That's my answer to your question. We're just at time, hopefully I got answers to all the components of your question. Okay. Thank you. If I could squeeze in just one more? Could you talk about the number of megawatts you guys are expecting to ship in 2023? It'd just be helpful in terms of thinking about ASPs and, you know, utilizations. I know I think Pavel already kinda asked about that. If there is a rough megawatt number, that'd be helpful. Hi, this is Kai. You know, we put out annual guidance at this point for the first time in our corporate history, and we decided to provide some guidance here on the revenue and on the adjusted EBITDA. We stay away from specific megawatt guidance for the year. We have obviously given a shipment in megawatts guidance for the quarter, and we'll keep that practice for now. Okay. actually, I forgot to ask, but it's probably a helpful one for everyone. It's just based on where you're at right now in the DOE process and everything, you know, is there any change in terms of the expectations of when a facility could be in production? You know, would that still be within 2025 or is there a chance that'd get delayed at all? That's still our expectation, Donovan. Great. Okay, awesome. Thanks, guys. Fantastic quarter. I'll take the rest offline. Thank you. As there are no further questions, we'll now conclude the call. Thank you all again. You may now disconnect.