Good afternoon. Welcome to SunPower Corporation's Investor Conference Call to discuss the acquisition of Blue Raven Solar. At this time, all participants are in listen-only mode. If you require operator assistance, please press star then zero. Later, we will conduct a question and answer session. To ask a question during the session, you'll need to press star then one. Please be advised today's conference may be recorded. I would now like to turn the call over to Mr. Michael Weinstein, Vice President of Investor Relations at SunPower Corporation. Thank you, sir. You may begin. Thank you, Liz. I would like to welcome everyone to our call to discuss our business update. I'm also looking forward to working with all of you in this new role, and I hope to speak with you all in the coming weeks to discuss and listen to your ideas and address your questions about SunPower. On the call today, we have Peter Faricy, CEO of SunPower, and Manu Sial, CFO of SunPower. Peter will provide information about the transaction that we signed and closed yesterday for the acquisition of Blue Raven Solar, as well as our strategic rationale. Following Peter's comments, we'll open up the call for questions. As a reminder, a replay of the call will be available later today on the investor relations page of the 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, and the 2020 10-K and the quarterly reports on 10-Q. Now, please see these documents for additional information regarding factors that may affect these forward-looking statements. Finally, to enhance this call, we've also posted a set of PowerPoint slides, which we will reference during the call on the events and presentations page of our investor relations website. I would like now to turn over the call to Peter Faricy, CEO of SunPower Corporation. Thanks, Michael, good afternoon, everybody. Please turn to slide three. Our goal is to build a world-class customer experience to make the adoption of solar easy, reliable, and affordable. We believe this approach positions us well as customers look to take greater control of their future energy needs. Given these goals and the tremendous total addressable market opportunity that we see, particularly within the residential business, today we are announcing the acquisition of Blue Raven Solar for up to $165 million. This is financed entirely with cash from operations and the already completed third quarter sale of 1 million of our Enphase shares for roughly $180 million. A figure that exceeds the up to $145 million upfront cash payment required for this transaction. This gives us additional ability to invest more in product and digital as we look out into 2022. The deal represents a highly capital-efficient next step in our evolution into the largest and most customer-centric platform in an interconnected residential energy ecosystem, with EBITDA accretion from day one, even without synergies. Now let me give you an overview of Blue Raven Solar. Please turn to slide number four. Blue Raven is a high-growth residential solar platform with an attractive financial profile, a strong growth profile, and best-in-class reputation. Their attention to, number one, customer experience and service, two, efficient go-to-market strategy with direct installation teams, and three, focus on under-penetrated solar markets, has helped them grow megawatts at greater than 100% CAGR over the past five years to nearly 20,000 customers, several multiples faster than the national average. Blue Raven has a national footprint and has focused on under-penetrated markets that will immediately broaden SunPower's reach into new territory. SunPower and Blue Raven also share a common vision of outstanding quality and customer service. With Blue Raven awarded a high aggregate four and half star out of five customer rating by the Better Business Bureau. Their loan origination program is outstanding, with greater than 90% credit acceptance rate and an average FICO score of 768. The company has an excellent internal work culture that will integrate well into the SunPower team under the continued leadership of CEO Ben Peterson, who will now report to me. We are excited to have the Blue Raven Solar team and customers on board and believe that together our companies will be stronger given the shared vision and complementary strengths. Please turn to slide five, where I will cover in detail why we believe this transaction creates significant customer and shareholder value for SunPower. The acquisition increases our scale and allows us to take advantage of supportive regulatory policies and incentives in more states. Blue Raven's installation footprint has minimal overlap with the existing SunPower dealer network. As such, the acquisition complements our existing dealer network with minimal overlap and disruption, ultimately allowing us to move much faster and serve more customers in new territory. More specifically, the transaction adds or enhances capabilities in at least 14 states, including significant added presence in Colorado and North Carolina, both highly ranked for residential growth and opportunity by the Solar Energy Industries Association. It also helps SunPower further diversify geographically, increasing our business outside of California. The transaction will also help improve our residential gross margin over time by, number one, expanding our high margin direct sales channel further into residential. Two, a more rapid adoption of additional value-added products, including batteries, EV charging, and other services. We also expect the combination to improve our revenue and margins through operating and scale efficiencies, including those from lower supply chain costs and the reduced cost of capital within a larger combined loan volume. Please turn to slide number six. We are also announcing today that we are considering strategic options for our Commercial & Industrial Solutions business as we aim our time, attention, and capital more squarely on the fast-growing and high-margin residential market. To be sure, we believe that our commercial business has high growth potential with an expanding TAM and new opportunities in community solar, front-of-the-meter storage, and tailwinds from the proposed federal infrastructure legislation. We believe, however, that this business will be better positioned to succeed with investor capital that is optimally aligned with its strategic and financial goals. For SunPower, we believe that a concentrated focus on the residential business will align us more squarely with our current investor base that will appreciate the increased clarity of strategy. At less than 4% rooftop penetration, we see the U.S. residential solar power market as a land grab opportunity, with rising consumer demand due to increased affordability and government incentives. To this end, we intend to deploy a strong balance sheet to ramp up investment in the coming quarters into product and digital development. We are particularly excited about our plans for new financial product innovation, where we see an opportunity to capture loan origination and lease value that is currently being left on the table for third-party lenders. As I've said before, we will make solar as easy to buy and finance as buying a book on Amazon. As we consider these changes, we see SunPower moving forward into 2022 as a much more streamlined and tightly focused organization than we were a year ago. With a healthy balance sheet, we have access to more capital and resources and a team committed to help improving the customer experience and providing the industry's hands-down best value proposition. Now let me turn it over to our CFO, Manu Sial, for a financial update. Manu? Thanks, Peter. Please turn to slide seven. Going forward, our focus will be on the residential and light commercial segment. For 2021, the residential business outlook remains strong, although our third quarter key guidance metrics will likely fall below the lower end of the prior ranges, primarily due to C&I Solutions project schedule delays and costs, as well as the underperformance of our light commercial business. We emphasize that RLC and CIS had strong sequential bookings performance in the third quarter, and our cash position remains strong, with the proceeds from the sale of Enphase shares adding to our second quarter cash balance. We've begun to ramp our product and digital investment OpEx beyond the original $10 million baseline that we had laid out earlier this year and intend to build this up by an incremental $30 million- $35 million for 2022. This is largely paid for with the proceeds from the sale of Enphase shares in third quarter 2021. Beyond what we need for the Blue Raven transaction. For 2021, this discretionary investment spending is also offset with financial accretion from the deal. Take note that although proceeds from the sale of Enphase holdings are excluded from non-GAAP projections and results, the investment OpEx is not. In 2022, the continued ramp of product and digital investment will be included in non-GAAP adjusted EBITDA, but we think it is important to bear in mind that we are funding this largely from the sale of Enphase shares rather than operating cash flow. We see the underlying residential business continuing to perform strongly in 2022 and beyond, starting with the achievement of $100 million bookings run rate for our SunVault storage system by the end of this year. Most importantly, we continue to emphasize that at the unit level, our outlook for customer value creation continues to grow in 2022 and beyond as we accelerate customer acquisition in new markets and new territory. With that, we would now like to open the call up for questions. If you'd like to ask a question at this time, please press the star then the number one key on your touchtone telephone. To withdraw your question, press the pound key. Our first question comes from Sean Morgan with Evercore. Hey, guys. I guess first question is just for Manu on the guidance. Can you provide a little bit more numerical clarity for what to expect for 3Q 2021, given that you talked a little bit about the underperformance on a light commercial business and how much that impacts the previous guidance overall? Great. Let me start by contextualizing the third quarter performance. From a third quarter perspective, you put the performance in two buckets. From a residential point of view, we had a great bookings quarter, good top of the funnel activity, and we managed the supply chain and our execution well. That business is strong going into fourth quarter and into 2022. On the C&I or the commercial side, the business is lumpy. That was the primary driver of our variance from a guidance perspective. We'll probably be in the range of $3 million-$4 million lower than the lower end of the EBITDA guidance. From a business perspective, the business is lumpy as we've talked about it, and it has the same kind of complexities associated with larger projects that you see in the utility scale business and the broader construction industry. Having said that, we are exiting the third quarter in the C&I business with a strong bookings tailwind and sequential growth in bookings quarter-on-quarter. As we turn the page to 2022, couple of things from a residential perspective. I think the residential growth, especially exiting 2021 with $100 million SunVault bookings number, we see that the residential business alone will support a greater than 40% EBITDA growth year-on-year from 2022 to 2021 we talked about in the last earnings call. The only thing I'll do to add more color around 2022 is, as we said in our prepared remarks, we do plan to take $30 million-$35 million of the proceeds of the Enphase shares and invest it in product and digital OpEx for next year. That bodes really well as we look at the trajectory of the business going from 2022 to 2023. Okay. Thanks, Manu. Just one quick follow-up for Peter on the Blue Raven acquisition. Just firstly, will that be continued to be operated as sort of a standalone segment within residential, or will Ben Peterson be kind of folded into the resi business as it stands? The consideration for cash, was that a Blue Raven request or was that a SunPower preference as opposed to equity? Sean, on the operating piece, Blue Raven will be operated independently, at least to begin. I think the thought behind that is make sure there's the least amount of disruption to the business. This is performing very well at this point. It's growing very fast, and it's very profitable. We really want to make Blue Raven part of the SunPower family in the simplest way possible. There are a couple of areas that we'll begin to integrate immediately. From a financial products perspective, we'll begin to have Blue Raven customers have access to the array of financial products that we provide at SunPower. From a physical product perspective, you'll see Blue Raven transition to sell the same physical products that we do. We're looking for the areas that we can provide the most support to the Blue Raven model. In areas like product development and digital customer experience, you can imagine us being motivated to move all the Blue Raven customers over to the mySunPower app and make this seamless. From the financial transaction piece, the cash piece for us was the right thing to do from a shareholder perspective because we're funding it directly from operations. We think that's an efficient way for the purchase, and it's also a healthy way for shareholders to add this revenue and profit accretive business. Okay, great. Yeah. Blue Raven will be able to benefit from some of your digital spending and I guess the fixed costs at your scale, so that makes a lot of sense. Thanks a lot. Yeah. I think as you look forward, Sean, the investments that we're making at this point in digital and product are really only sustainable for a few players in the solar business. I think the businesses are both going to benefit from each other, but I think on the Blue Raven side, their customers will really benefit from our bigger product portfolio and the investments that we've made in digital and the ones that we plan to make in digital as we go forward. Okay, thanks, Peter. Our next question comes from Kashy Harrison with Piper Sandler. Good morning, and thank you for taking my questions. Hey, Kashy. Hey. Just a quick follow-up question on Blue Raven. Thanks for the details and the presentation. I was just wondering, what was the growth rate for the business during 2021, or what's the expected percentage growth rate for that business this year? The number that we've given out is that their compound annual growth rate over the past five years has been over 100% growth. I guess the comment I would make is their growth this year in 2021 has been terrific. They probably had the best month they've ever had over the past four to six weeks, just prior to completing this transaction. We're very pleased with their sales growth. Part of why we're excited by this opportunity is we've talked, Kashy, about the fact that we really believe there's 100 million consumers in the U.S. that would save money net of their solar cost if they adopted solar this month. Blue Raven really will help us accelerate our ability to reach more and more of those customers much faster. In addition to reaching new customers faster, it's also going to give us a bigger customer group to have a lifetime relationship with consumers. We're really looking to pivot SunPower from a company that was kind of one and done with solar installation, to a company that's going to provide a lifelong set of products and services for consumers in the renewable energy space. Blue Raven is a big part and kind of the first big piece of our faster acceleration of growth and our ability to reach more customers faster. That's super helpful, Peter. Thank you. Then just in terms of the timeline for C&I, when do you expect to conclude the strategic alternative process? I was wondering if maybe you could provide a sense of what the standalone or what the RemainCo corporate operating margin profile might look like once the C&I business is no longer included in your financial statements. Sure. I'll take the first one, and I'll have Manu comment on the second one. On the timeline, first of all, the commercial business, you could argue, is at a point of great strength for us. It's a business that's the market share leader in commercial and industrial. I think we've talked about the fact before from a government and school perspective, we have the leading commercial solar business in the U.S. It's a business that's at a point of strength because we're the market share leader, and assuming that the Biden-Harris administration improves the government ITC incentives, we anticipate this is a business that's got a great opportunity for growth as we go forward. We're balancing speed with maximizing shareholder value. I would say net net, we anticipate having more clarity on the process over the coming months and we're looking to complete the process by the end of the calendar year. Manu, do you want to comment on the question about corporate? Sure. Just as we've talked about the fact that our go forward focus is the residential light commercial business. The resi light commercial business had gross margins in the 20s in the second quarter. We would expect that to continue in the back half of this year and next year because that should approximate the overall company margin. The one comment I will make from a Blue Raven perspective is the fact that the business is got a strong EBITDA and cash profile, and therefore it is margin accretive. We would expect to see that approximate the overall SunPower margins. I'll close my comment by saying, as you think about 2021 to 2022, we should see improvement in margin rates and margin dollars driven by the fact that I think we have significant headroom to improve our more financed and full system sales. Our cost of capital has opportunities. As we scale up, we should see operating leverage both for the core SunPower as well as the margins driven off Blue Raven, which I talked about being positive coming into the fourth quarter. That's great, Manu and Peter. Thank you. Last one for me, if I could just sneak one more in. You talked about the 2022 product and digital investments of, I think, $35 million. Do you expect this to be sort of a one-time hit to OpEx next year? Or do you see this being more of a recurring spend into 2023 and beyond? That's it for me. Thank you. I think on the spend piece, let me give you a little bit of context as to what we're spending it on, and then I think I can give you more of an outlook for the future. We really want to expand our product portfolio beyond just the panels and partial home backup battery storage we provide today. We begin to expand our product lineup with this Wallbox partnership we talked about in our last earnings call. You should expect to see us expanding our product lineup in panels, in batteries, in EV chargers, in smart panels, and in smart home energy management as we go forward. Those are all areas that we would like to aggressively expand the way we serve consumers. Just to give you an example, in the panel business, we have these world-class panels that are the most efficient and most resilient panels in the world. They're primarily focused on the premium part of the solar market. We're looking forward to, at some point next year, offering products that also allow us to serve consumers in what I would describe as kind of the mass market of the solar market, which is going to open up a much bigger market segment for us to go focus on. From a product perspective, we're making investments next year that we think are going to have the ability to help really grow our business and accelerate our growth as we go forward. Then on the digital side, I think some of the investments that we're going to make are investments that will scale well in time. Once we begin to make some of these investments to make our financial products easier to use, to make the solar process easier to purchase, those are investments you make up front. There might be a little bit of maintenance on those, but for the most part, they scale very well. I think the exciting part of the investment for digital is how do we really become the first company to provide a customer experience that integrates all these products together? How do we make it easy for customers to take advantage of renewable energy with solar, but apply that to all of their home appliances, all of their home needs, all of their car needs, and how do we integrate that in a simple, easy way in an app as we go forward? I think that the bigger investment bump will be next year, but I think the investments we make in future years will scale very well as we scale the business going forward. Yeah. Kashy, just from a modeling perspective, we are financing the 2022 incremental product and digital spend from the Enphase proceeds and not from operating cash. Thank you. Our next question comes from Maheep Mandloi with Credit Suisse. Hey, good morning. Thanks for taking our questions. One thing, Peter, for maybe for you, does this mark a pivot to more direct channel business, moving away from your dealer model? Could you also provide any clarity on how much direct business do you have today? Great. I'm glad you asked that question because the quick answer is no. The dealer channel has been a critical part of our success to date for SunPower. Dealers will remain at the center of our partnership as we go serve customers going forward, and I expect that we'll have a combination of both direct and dealer partnerships for our future for a long time to come. Our dealers have really permitted us to serve customers very well, particularly on the coast. If you take a look at our business, strong business in California, strong business in the South, and we're beginning to build a strong business up in the Northeast area. Where we really are excited about this Blue Raven acquisition is Blue Raven has really made great progress across the heartland of the United States. They have really focused on the areas that were under-penetrated from a solar perspective. As we talk about states like Colorado or North Carolina, these are states that are very big, high potential states for solar, where our existing SunPower business, even with our dealers, was very small. It's really the combination of the two that we think puts us in a position to be the most successful as we go forward. Quite the contrary, on the dealer front, I have mentioned this to the dealers, and I want to mention it to you as well. Coming from the Amazon marketplace, where we invested a lot to improve the business of small businesses and entrepreneurs, we will take a very similar strategy here at SunPower. We will be investing a lot in technology to make the dealers' ability to serve our customers easier and easier over time. I hope to continue to make our dealer channel a very successful channel as we go forward. Thanks very much for your question. We have time for one more question before we end today's call. This question comes from George Gianarikas with Baird. Your line is now open. Hi, good morning, everyone, and thanks for taking my question. This question is for Peter. You've been now at SunPower for several months, and you've made your first big strategic move. I'm sort of curious as to whether you could share other insights, positive or negative, things that need to be improved upon at SunPower as you roll forward for the next six, 12, 24 months. Thanks. Well, thank you for that nice question. It's been five months, and I couldn't be more thrilled to welcome the acquisition of Blue Raven. It's kind of a dream to be able to acquire a company that's already healthy, profitable, is growing very fast, and is so aligned with our vision of putting customers at the very top of our priority list. This is the perfect way to kick off, in my opinion, the next 50 years that we're going to work on this business together. The question that I think came up on my first couple earnings calls is one that we've been thinking about, which is: What is the role of the commercial industrial business, and what's the role of the residential business, and how do you guys think about managing them together? I think in the end, our conclusion is these are both really attractive businesses. They're both very healthy, but in some ways they're competing for similar capital that's required for their growth going forward. We're really excited today because I think the announcement, from my point of view, is a double positive as we go forward. Shareholders and customers are really going to enjoy the fact that we have this streamlined focus on one business, and we're really excited to have the capital we need to double and triple down on the residential business. Again, if you think about 100 million consumers here in the U.S., and you think about it as a land grab, we really want to be the company that's moving the fastest and serving customers the best as we go forward. I can't think of a better way to signal that than the acquisition of a company like Blue Raven. We're really happy to welcome Ben Peterson and his team to the SunPower family. Maybe I could end on a big congratulations to Ben and the Blue Raven team for the incredible business they've built, and we're looking forward to working with them together. Big thanks to all of you for all the questions today. We're very excited about our future. We're really looking forward to becoming the leader in the solar business in the residential space, and we plan to become the leader by really focusing on what's best for the customer as we move forward. We look forward to talking to many of you in a few weeks for our third quarter earnings call during the first week of November. Thanks very much for all your questions today. This concludes today's conference call. Thank you for participating. You may now disconnect.