From our point of view and from dealer feedback, I think the panel business as it is today, you know, short of any innovations, is really becoming more commoditized. It’s becoming more challenging to differentiate one panel from another. There’s a number of really high-quality panel makers out there. We’ve been engaged with discussions with all of the high quality panel makers, we’ll never compromise our brand, to your point, by selling anything other than panels that meet our quality bar and our quality tests. But we will provide, I think, increasingly high quality, but also more affordable options for consumers. And I think our dealers are excited about that, and I know consumers will benefit from that as well. So we’re excited about where this goes going forward.
No announcements to make on that today, but that’s another area I’d say stay tuned. We’re working behind the scenes with a number of different providers.
Ben Kallo: Just a follow-up there. On the dealers, I saw that you had a good quarter. I think maybe you said it was the best quarter of dealer ads. I’m just wondering if the conversations on liquidity or kind of the shift to more technology, the agnostic have come up in these discussions or how you’re managing those relationships? Thank you.
Peter Faricy: Thank you. Yes, well, we’ve had, it’s interesting, you know, the last dealer conference we had, I recall countless stories of dealers telling me how high our bar is to become a SunPower dealer. We really, we think of ourselves as having the highest quality dealer network in the world. And dealers, particularly our master dealers and the dealers we’ve made equity investments in, they’re world-class providers. They have a great customer experience, they’re well run businesses. You know, they’re businesses that we stand behind and they’ve been resilient even during this more turbulent stormy seas kind of a year. So the fact that we’ve been able to, you know, recruit so many in Q3 and set a new record, I think just goes to show you that even in this more turbulent market, you can find these areas of great opportunity.
When you talk to them, I think they’re very attracted by the SunPower brand, our commitment to have a world-class customer experience. They know that we’re the number one rated solar — residential solar company in the U.S. and it’s across every survey. And the gap is pretty wide between us and the closest competitor on that front. So people want to be part of that ecosystem. They want to be part of that family. And then you add to it the fact that we have attractive lease programs, we have attractive panel options, we’ve got great technology for consumers and the My SunPower app that they love. You know, we’ve really got a great package for dealers. So the feedback has been very positive. I expect that we’ll continue to be able to add high-quality dealers at, I don’t know if we’ll have the same rate we did in Q3, but we expect to be adding quite a few dealers over the next 12 to 18 months.
Ben Kallo: Thank you.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Jon Windham from UBS.
Jon Windham: Perfect. Good morning. I just had a quick question about the updated adjusted EBITDA per customer guidance of $600 million to $700 million. In third quarter, it was $1,000, I think that was for the run rate this year. How do we think about that in terms of sequential profitability into the fourth quarter? And how much of that is maybe due to some of the statements of the previous, just trying to balance the two moving parts? Thanks.
Peter Faricy: So the way we’ve thought about it is, you know, the new guidance reflects a couple of things. One is we did have softer bookings and lower consumer demand in the summer months. We talked about this. So May was the low point, but June, July, and even August were below our expectations. We believe it’s due to the high interest rates and low consumer confidence. So that’s reflected in the fact that we’re getting, you know, there’s fewer projects for us to get done in a particular quarter. That’s exacerbated by the fact that more and more of our customer base is choosing, are choosing leases. Leases rev-rec, you know, on average during normal times 30-days later, but in California, where we still do a lot of our business, you know, it’s been more like 60 to 90 days later.
So that really, you know, think of it as it pushes out revenue and profit recognition, but the costs are still there. So, it’s made the short-term, I think, financials more challenging. And then the final piece is we have been aggressive at fixed cost reductions. The reduction we announced as part of earnings today is our second major cost reduction in the past two quarters. But as you know, those usually take some time to execute and play out. So they, you know, we’ll get the full-year benefit of those changes in 2024, but for example, the ones we announced today, we’re only going to get partial benefit in Q4. So that gives you a little bit more color. The restatement piece has some impact on the EBITDA for the quarter, but it’s, you know, call it $5 million-ish, it’s not huge.
You know, a modest amount will be reflected in this quarter.
Jon Windham: Perfect, Thank you so much for that.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Julien Dumoulin-Smith from Bank of America.
Julien Dumoulin-Smith: Hey, good morning, Pete. Thank you guys very much for the time, I appreciate it. Look, maybe just starting off on the cash and liquidity front just real quickly. You guys mentioned specifically having some value tied to the SunStrong lease. How do you think about raising further liquidity specifically through further asset monetization and rotation here, first off? And then secondly, I got to follow-up on some of the cost reductions. But just what else, as you think about sources of capital, can you point to? I get the core business here, but on the periphery of that, how do you think about the financing options on the table? Specifically, to you.
Peter Faricy: Yes, so I mean, Julien, as you know, all public companies, you’re constantly thinking about cash, liquidity, your debt. You’re constantly managing those things, that’s not new. In volatile times, you’re still, you’re spending time on it, but even in good times, you’re trying to optimize that mix. You know, the number one thing we were focused on coming out of last quarter, we’re really pleased with the results. How do we sell through the inventory we have? The $77 million reduction before the restatement is terrific progress. And then the fact that we were positive cash from operations and positive free cash flow, those are the kinds of things that if we were to do consistently, obviously, you know, significantly change our liquidity and our cash position, so that’s plan A.
