Pineapple Energy Inc. (NASDAQ:PEGY) Q3 2023 Earnings Call Transcript

And I think we’ve got a ton of experience you know 20 years in the market in Long Island helping customers there and then like we mentioned in the script we’ve also got the expertise in Hawaii to draw. And so I’m confident that we’ll have a great offering and be able to effectively present it to customers, but like literally just yesterday we were talking about how this becomes a priority right away.

Donovan Schafer: Okay. That’s helpful. Thank you. And then turning to revenue, you guys were down sequentially in Q2 and then you’re down again in Q3. On the last call we talked about how Q1 was at sort of an elevated level due to some of the push-outs from the Hawaii Building Department issue from late last year. But I wouldn’t think that would kind of be a factor going from Q2 to Q3. I know you talked about that the — and we know from all the other residential companies it’s certainly a challenging environment. So I guess the question is sort of in light of all that, what gives you the confidence for Q4, you’ve got there’s sort of the backlog there. Are you getting cases of anything getting canceled or pushed out or is it what you’re seeing there makes you feel like the timeline for the stuff that’s in the backlog is firm and wouldn’t slip from Q4 to Q1 is it is it skewed to C&I or something, what is it about all that that makes you feel like feel confident, yeah, it’s there and it’s going to land in Q4?

Kyle Udseth: Yeah. Confidence is, I guess, all relative. I was thinking about this a little bit when you give a guidance range statistically speaking what are you actually doing you’re trying to pick a midpoint, you’re trying to say, it’s plus or minus on this side and it’s within one standard deviation or two standard deviations or whatever and what the confidence interval is. So it’s never a slam dunk obviously, but I think that we’ve got nine months closed out, we’ve got the backlog like we mentioned and we’ve got visibility in our CRMs and in our project management systems of what the install calendar is look like you know in October and for November and December so far and we could track that against historicals and then in New York there’s also the C&I pipeline.

So I think that we have good visibility and analytics into how the year is going to end but it’s not guaranteed. But there’s downside there’s maybe also upside. I think with 2024 like I said, we’re going through the budgeting exercise still. And one of the things that we’ve been talking about lately is it’s just a — it’s a strange, it’s a good thing, but it’s a strange business to be in or maybe a time in the business to be in a declining cost basis industry, right? Because it’s great because it helps margins, it great — it’s great because it lowers prices for the end consumers and it increases the value prop overall, but it kind of screws up how you think about revenue and what growth should look like, right? Because there’s number of jobs you do or there’s kilowatts installed, but if prices are going down like that could make it look like your revenues flat or shrinking even if that’s like holding the line or growing.

And so we’re grappling with that a little bit into 2024, but it’s why you one of the reasons you heard us emphasize gross profit and gross profit dollars more on this call than we have before I think we’ve really resolved kind of around to. At the end of the day your prices go up your price to go down like your cost up, your cost go down, dealer fees go up, dealer fees go down, you sell what you do you install what you do, it all comes out in the wash of what are the actual, and not even the percentage what are the actual quantity of gross profit dollars you generated and then what was your OpEx and that’s your EBITDA Scott was even saying yesterday one of his colleagues was it five years ago made a shirt that said GMD on the front of it gross margin dollars.