Pineapple Energy Inc. (NASDAQ:PEGY) Q4 2022 Earnings Call Transcript

Kyle Udseth: Yes. I’ll start and then maybe Eric can share too just from more of a plan or budget standpoint too. Quarter is going well, don’t want to say much beyond that. I think it supports the $80 million to $85 million. We hadn’t shared that guidance before, but it’s what we came into the year, expecting internally and haven’t seen anything in Q1 to really make us change off of that, tracking towards that and feeling good about both top of funnel demand, overall growth in those markets and our own company’s performance and ability to capture that. I think that from a seasonality standpoint, yes, I mean, I think we see seasonality throughout the year, but with the caveat that there’s a reset back from Q4 to Q1, right. Q4 is always a big quarter, so we wouldn’t expect and won’t see Q1 of 2023 being higher than Q4 of 2022.

So like Q4 2022 is good. It drops down naturally every year with seasonality to Q1 2023. And then I think sequentially we’ll go up every quarter throughout the year. But Eric, anything else you’d add on that?

Eric Ingvaldson: Yes. And I guess on the first question, we can’t give any guidance on the first quarter other than the expectations that we’ve outlined. We do feel that we are performing in line with those, or we wouldn’t have put those expectation guidelines out there. Regarding seasonality, as Kyle mentioned, the first quarter is not as strong as the fourth quarter historically, but we do expect sequential quarter-over-quarter growth throughout the year.

Donovan Schafer: Okay. That’s helpful. And then for the €“ say SG&A came in a little bit high, there’s certainly impacts there from transaction costs and some other things, kind of one-time items in SG&A. But now you do have this acquisition estimation that happened, and so can you give any kind of color around or indications of what we should expect going forward, like what kind of a run rate we should anticipate for SG&A?

Kyle Udseth: Yes. I’m not sure the best way to answer this. I think we probably internally need to sharpen the pencil on quantifying, like basis points improvements through synergies on certain line items. And it’s something that we’re going to work on between now and the next call. I think from a thematic standpoint, there are a lot of different ways, you can get synergies there like the big ones are economies of scale, kind of purchasing power on the hardware side, which we’re actively looking at ways to do that across the businesses right now with some good initial results. We’ve got the financing side, which I think is top of mind for a lot of folks just with this kind of relentless increase in dealer fees. As interest rates are rising and certainly desire in the industry to be able to pass more savings on to the homeowners, keep more of the profit for the companies that do the hard work of acquiring the customers and installing the systems and not as much passed on to the guys who are just financing it.

So I think there’s good economy of scale there. And then just on kind of corporate SG&A functions and what’s a shared service out of corporate versus what’s not, there’s a level of just growing into that too. It’s a high growth business, so instead of looking at it like redundancies and eliminating jobs or that, it’s kind of like you’ve got this starting platform and then as you grow, you just don’t have to scale the cost side as much. I don’t know, Eric, there’s probably not a whole lot more we can say financially, but like any other color you’d want to give on the SG&A piece?