Complete Solar Reports Preliminary Q4'24 Results, $81.1M Revenue Surpasses Forecast, SunPower Integration Complete, Headcount Reduced, Operating Expenses Cut; Q1'25 Revenue Projected At $82M With Breakeven Operating Income; Cash Balance Expected To Grow In 2025

Author: Benzinga Newsdesk | January 21, 2025 08:31am

Complete Solaria, Inc. d/b/a Complete Solar ("Complete Solar" or the "Company") (NASDAQ:CSLR), a solar technology, services, and installation company, today will present its preliminary unaudited Q4'24 results via webcast at 2:00pm ET. Interested parties may access the webcast by registering here or by visiting the Events page within the IR section of the company website: investors.completesolar.com/news-events/events.

Complete Solar Chairman and CEO, T.J. Rodgers commented, "Our Q4'24 results are subject to a full-year audit, which is currently in progress and involves historical SunPower financials, a complication that is forecasted to delay our audited Q4'24 results into mid-March. By that time, I want to be talking to investors about Q2'25, only two weeks away, not analyzing 2024 history. That's why we are providing this preliminary, unaudited report which focuses on just Q4'24 and our forecast for Q1'25. The risk of this decision is that the audit process may change some of the results, but probably not revenue, and certainly not the Q1'25 forecast. We have a 57-person finance group comprised of people from two public companies that I trust to report one quarter properly. The Q1'25 forecast is mine.

Rodgers added, "We will give GAAP and non-GAAP results for those quarters with commentary focusing on the non-GAAP results, unless otherwise stated. My philosophy is that "non-GAAP" results should be as close to GAAP results as possible, but without 1) stock earnings charges added onto the dilution impact of share count we already report, 2) amortization of intangible assets, and 3) charges for special one-time events, both negative and positive."

Summary of CSLR's Q4'24 Accomplishments

In our November 13 Third Quarter Report, we presented an operating plan for Complete Solar predicated on our successful $45 million acquisition of business unit assets from SunPower to form a Complete Solar "NewCo" (herein called CSLR). This plan called for two big accomplishments that have now been achieved: 1) that the old-CSLR, a small solar company with little cash and only $5.5 million of prior-quarter revenue, would acquire and integrate assets of the SunPower corporation, which was founded in 1985 and about 10 times bigger than old-CSLR, and 2) that, as we wrote in our Third Quarter Report, "our revenue would be $80 million in Q4'24," the quarter after the asset purchase. This report presents Q4'24 combined company results on a GAAP-compliant basis and certain non-GAAP results and our Q1'25 forecast. The narrative is based on the non-GAAP financial results, unless otherwise noted:

• The SunPower Integration is substantially complete. On the last day of Q3'24, September 30, we closed the acquisition, six days after a Delaware bankruptcy court approved our asset purchase of three SunPower business units, which have now been substantially integrated (including their MRP systems) into CSLR as its two sole operating divisions, New Homes and Blue Raven Solar. That asset integration raised our headcount from 109 to 1,341 on September 30. Our original target of 1,225 was achieved in December, as shown on the included headcount chart. We raised $80 million on September 24 to fund the $45 million SunPower asset purchase price plus the expected added operating capital required to get to profitability.
  
   
• Our $81.1 million Q4 revenue beat expectations. CSLR's consolidated revenue for Q4'24 jumped to $81.1 million, up 14.7 times vs. old-CSLR's $5.5 million third quarter revenue on a standalone basis, and beat the $80 million revenue forecasted in our Third Quarter Report.
  
   
• New Divisional EVP/GMs are in place. We announced the promotion of Blue Raven's Dan Myers as the EVP and GM of the New Homes Division on October 15, 2024 (here). And one month ago, we hired veteran operations manager Steve Erickson, who was promoted six times at three Salt Lake "Solar Valley" companies since 2011, to be the EVP and GM of the Blue Raven Solar Division.
  
   
• We are forecasting revenue growth next quarter. Despite the typical industry seasonality that reduces solar industry revenue by 5%-14% in the Q1 winter quarter, we are forecasting modest quarter-on-quarter revenue growth to $82.0 million in Q1'25.
  
   
• The Company is almost at its "fighting weight." The combined headcount of the two companies started at 3,499 on October 1 and was reduced by 67% to 1,140 by the end of Q4'24, as shown in the embedded org chart. Our final headcount target for the combined company is 980.
  
   
• Our operating expense has been cut by a factor of two. The headcount reduction led to a total non-GAAP operating expense reduction from $94.0 in Q3'24 million for the added expenses of the two companies to $35.7 million in Q4'24 for the combined and cost-reduced company. The operating expenses less sales commissions were $84.0 million in Q3'24, down to $19.8 million in Q4'24, a 4x reduction. Our forecast is to drop operating expense less commissions by another 30% in Q1'25.
• We are forecasting operating income breakeven in Q1'25. Given our current backlog and cost-cutting plan, we are forecasting non-GAAP operating income at breakeven in Q1'25.
  
   
• Our cash balance will grow. We finished Q4'24 with $13.3 million in cash, our lowest quarter since raising the $80 million in funding. We plan to grow cash from operations during 2025.

Posted In: CSLR