Sunation Energy Inc (SUNE) 2023 Q3 法說會逐字稿

Good morning and welcome to the Pineapple Energy third-quarter 2023 conference call. As a reminder, today's call is being recorded. (Operator Instructions) For opening remarks and introductions, I would like to turn the call over to Eric Ingvaldson, CFO of Pineapple Energy. Mr. Ingvaldson, please go ahead.

早安，歡迎參加 Pineapple Energy 2023 年第三季電話會議。提醒一下，今天的通話正在錄音。 （操作員說明）對於開場白和介紹，我想將電話轉給 Pineapple Energy 財務長 Eric Ingvaldson。英瓦爾德森先生，請繼續。

Thank you, Audra. Good morning and welcome to Pineapple Energy's conference call to discuss results for the third quarter of 2023. With me today is Kyle Udseth, our Chief Executive Officer. This quarter, we also had the pleasure of being joined here at our Minnesota headquarters by Scott Maskin, a Pineapple Board Director and the founder of our SUNation business in New York State.

謝謝你，奧德拉。早安，歡迎參加 Pineapple Energy 電話會議，討論 2023 年第三季的業績。今天和我在一起的是我們的執行長 Kyle Udseth。本季度，我們也很榮幸地邀請了 Pineapple 董事會董事、紐約州 SUNation 業務的創始人 Scott Maskin 來到明尼蘇達州總部。

Our call this morning will include statements that speak to the company's expectations, outlook, and predictions of the future, which are considered forward looking statements. These forward-looking statements are subject to risks and uncertainties, many of which are beyond our control, which may cause our actual results to differ materially from those expressed in or implied by these statements.

我們今天早上的電話會議將包括有關公司的期望、前景和未來預測的聲明，這些聲明被視為前瞻性聲明。這些前瞻性陳述存在風險和不確定性，其中許多風險和不確定性超出了我們的控制範圍，這可能導致我們的實際結果與這些陳述中明示或暗示的結果有重大差異。

We are not obliged to revise or update any forward-looking statements except as may be required by law. Please refer to our disclosures regarding risk factors and forward-looking statements in today's earnings release and other SEC filings. A copy of our press release has been posted to the Investor Relations page of our website for reference. The non-GAAP financial measures discussed in this call are reconciled to the US GAAP equivalent and can be found in the press release that we issued yesterday. With that, I will turn the call over to our CEO, Kyle Udseth. Kyle, please go ahead.

除非法律要求，否則我們沒有義務修改或更新任何前瞻性聲明。請參閱我們在今天的收益報告和其他 SEC 文件中披露的有關風險因素和前瞻性陳述的資訊。我們的新聞稿副本已發佈到我們網站的投資者關係頁面以供參考。本次電話會議中討論的非公認會計原則財務指標已與美國公認會計原則相當，可以在我們昨天發布的新聞稿中找到。接下來，我會將電話轉給我們的執行長凱爾·烏德賽斯 (Kyle Udseth)。凱爾，請繼續。

Thanks, Eric, and thanks to everyone for joining us on the call this morning. We did push this back one hour this quarter, which I hope is given our West Coast participants the chance to grab a second cup of coffee. As always, we appreciate them joining so early.

謝謝艾瑞克，也謝謝大家今天早上加入我們的電話會議。本季我們確實將這一時間推遲了一個小時，我希望這能讓我們的西海岸參與者有機會喝第二杯咖啡。一如既往，我們感謝他們這麼早就加入。

Today, I'm happy once again to share another strong quarter of operational and financial results from Pineapple energy. But I won't say it came easy. This is my ninth year in rooftop solar, and I don't recall a more trying quarter for our industry broadly. And I think you see the effects of that showing up in the earnings results so far of some of our larger public peers.

今天，我很高興再次分享 Pineapple energy 另一個強勁的季度營運和財務業績。但我不會說這來得很容易。這是我從事屋頂太陽能行業的第九個年頭，我不記得對我們這個行業來說還有哪個季度比這更艱難。我認為您可以看到這種影響在我們一些較大的上市同行迄今為止的盈利結果中顯現出來。

But in spite of the macro challenges and headwinds, we were able to rally our Pineapple teams to deliver another quarter of positive adjusted EBITDA. We kept a tight focus on disciplined execution and cost containment while sharpening the pencil on positive ROI growth investments. We'll share more detail in later sections, but in sum, both our Hawaii Energy Connection insulation businesses were able to grow gross profit dollars year over year in Q3, which is a huge accomplishment in this interest rate environment.

但儘管面臨宏觀挑戰和逆風，我們仍然能夠團結我們的 Pineapple 團隊，再實現一個季度的正調整 EBITDA。我們密切關注嚴格的執行和成本控制，同時增加投資報酬率正成長投資的力度。我們將在後面的部分中分享更多細節，但總而言之，我們的夏威夷能源連接絕緣業務在第三季度的毛利同比增長，這是在這種利率環境下的巨大成就。

And while it's still only a cost center, not yet a revenue driver in its own right, we are also able to effectively contain corporate costs, beating budget while continuing to build up our shared services capabilities. We strive to keep improving every quarter in our culture of high performance, data centricity, and accountability has never been stronger. Delivering results and hitting our goals will continue to be the focus in Q4 and into 2024.

雖然它仍然只是一個成本中心，本身還不是收入驅動因素，但我們也能夠有效地控制企業成本，超出預算，同時繼續建立我們的共享服務能力。我們努力每季不斷改進我們的高績效、以數據為中心和問責制的文化，這一點從未如此強烈。交付成果和實現我們的目標將繼續成為第四季和 2024 年的重點。

Now for a more detailed look at our performance, let's start in Hawaii, where Chris DeBone and his team turned in another excellent quarter. Revenue was up 6% Q3 year over year, but the real success story is gross profit increasing 40% year over year due to holding the line on pricing, while realizing significant decreases in procurement costs. And battery attach rate remained at a tremendous 90%. This is so important as we continue building out the foundation for the grid of the future where people can produce store and consume their own electricity.

現在，為了更詳細地了解我們的表現，讓我們從夏威夷開始，克里斯·德博恩 (Chris DeBone) 和他的團隊在夏威夷又取得了出色的季度表現。第三季營收年增 6%，但真正的成功故事是由於堅守定價，毛利年增 40%，同時實現採購成本大幅下降。且電池連接率保持在高達90%。這非常重要，因為我們將繼續為未來的電網奠定基礎，人們可以在其中生產、儲存和消耗自己的電力。

Due to that expense and the length of the trip, we don't get to spend as much time visiting agency as we would like to do. I think it had been 18 months since the last time I had been able to be out there with the team, but Eric and I did get the chance to go in October for a 2024 strategy and planning session. It was just such a great reminder of how solid our team is there and how hard everyone works to help people go solar and save on their electric bills. And one place you see that reflected in the referral rate. In Q3, 79% of our systems sold came via customer referrals, which is just a phenomenal number and a testament to the great customer experience that Chris and all of our HEC team deliver every day.

由於費用和旅行時間的長短，我們無法花我們想要的那麼多時間來訪問代理商。我想距離我上次與團隊一起出去已經過去了 18 個月，但埃里克和我確實有機會在 10 月份參加 2024 年戰略和規劃會議。這很好地提醒我們，我們的團隊是多麼的堅強，每個人都多麼努力地幫助人們使用太陽能並節省電費。您會在一個地方看到這一點反映在推薦率中。在第三季度，我們售出的系統中有 79% 來自客戶推薦，這是一個驚人的數字，也證明了 Chris 和我們所有 HEC 團隊每天提供的出色客戶體驗。

Let's turn now to New York, where Scott Maskin and the team also delivered a strong quarter. Revenue was down 16% Q3 year over year, but that was against a very strong 2022 comp. And much more importantly, we managed to grow gross profit dollars by 1%, which is a solid result in such a challenging interest rate environment. This impressive result was possible because dealer fees, which are essentially loan origination fees, are included in the revenue number and those have come down significantly as we've pivoted to new financing partners in the current aggressive interest rate environment.

現在讓我們把目光轉向紐約，斯科特馬斯金 (Scott Maskin) 和他的團隊在紐約也取得了強勁的季度業績。第三季營收年減 16%，但與非常強勁的 2022 年比較相比。更重要的是，我們的毛利成長了 1%，在如此充滿挑戰的利率環境下，這是一個堅實的成果。這一令人印象深刻的結果是可能的，因為經銷商費用（本質上是貸款發放費用）已包含在收入中，並且隨著我們在當前激進的利率環境下轉向新的融資合作夥伴，這些費用已大幅下降。

And then the other key driver is the significant decrease in product costs we were able to negotiate. Battery attach rates in New York were only 3% in the quarter, but we expect that to grow in 2024, when time-of-day rates are implemented in our Long Island market. When this happens, we'll be poised to capitalize by leveraging our years of experience and know-how from the Hawaiian market, and 40% of all New York sales in the quarter came from customer referrals, which is truly a great result. This number shows how strong the job Scott and the whole team do at taking care of customers and delivering that great customer experience.

另一個關鍵驅動因素是我們能夠協商的產品成本大幅下降。本季紐約的電池附加費率僅為 3%，但我們預計這一比例將在 2024 年成長，屆時我們的長島市場將實施分時費率。當這種情況發生時，我們將準備好利用我們在夏威夷市場多年的經驗和專業知識來獲利，本季度紐約所有銷售額的 40% 來自客戶推薦，這確實是一個很好的結果。這個數字顯示了斯科特和整個團隊在照顧客戶和提供出色的客戶體驗方面所做的工作有多出色。

As of quarter end, we have an estimated $40.7 million of probability-weighted installation backlog, giving us good visibility on revenue. Taken together with the revenue numbers we've already delivered through the first three quarters of the year, that backlog gives us continued confidence in our stated full-year revenue range of 80 to 85 million.

截至季度末，我們估計有 4,070 萬美元的機率加權安裝積壓，這使我們能夠很好地了解收入。與今年前三個季度我們已經交付的收入數字相結合，積壓的訂單讓我們對我們所聲明的 80 至 8500 萬美元的全年收入範圍充滿信心。

Additionally, while Eric will provide more details, I'll just state again here that we were able to deliver another quarter of positive adjusted EBITDA, our third in a row. And so we're continuing to guide to positive adjusted EBITDA for full year 2023. That's something we, as a leadership team, are extremely focused on and that I think is a big differentiator versus competitors.

此外，雖然埃里克將提供更多細節，但我在此再次聲明，我們能夠再實現一個季度的正調整 EBITDA，這是我們連續第三個季度實現正調整 EBITDA。因此，我們將繼續指導 2023 年全年實現正調整 EBITDA。這是我們作為領導團隊非常關注的事情，我認為這是與競爭對手的一個很大的區別。

On this in the last call, you've heard a lot of discussion on organic growth and bottom-line focus at our existing businesses, and that is our foundation. And it is really the support for the whole strategic platform of Pineapple. But the broader vision is absolutely still intact to drive a rollup and consolidation of leading local and regional residential and commercial solar companies and we've made steady progress on that front as well. This current environment presents a tremendous buying opportunity for experienced and savvy consolidators who could find and integrate the right companies. With that, I'll now turn the call over to our CFO, Eric Ingvaldson, to walk through our financials in more detail. Eric, please go ahead.

在上次電話會議中，您已經聽到了很多關於我們現有業務的有機成長和底線關注的討論，這就是我們的基礎。這確實是對菠蘿整個戰略平台的支撐。但更廣泛的願景仍然完好無損，可以推動本地和區域領先的住宅和商業太陽能公司的整合和整合，我們在這方面也取得了穩步進展。目前的環境為經驗豐富、精明的整合商提供了巨大的購買機會，他們可以找到並整合合適的公司。現在，我將把電話轉給我們的財務長 Eric Ingvaldson，以更詳細地介紹我們的財務狀況。埃里克，請繼續。

Thank you, Kyle.

謝謝你，凱爾。

I will review the GAAP financials as required by the SEC and then review certain pro-forma numbers that will give you a better sense of the year-over-year performance of our business. The GAAP numbers are less insightful because Q3 results last year included only the results of our Hawaii operations and not the results of SUNation, which was acquired in the fourth quarter of 2022.

我將按照 SEC 的要求審查 GAAP 財務數據，然後審查某些預計數據，以便您更好地了解我們業務的同比業績。 GAAP 數據的洞察力較差，因為去年第三季的業績僅包括我們夏威夷業務的業績，而不包括 2022 年第四季度收購的 SUNation 的業績。

Let's start with the third quarter 2023 GAAP results. Total revenue was $18.3 million, up $12.4 million or 211% from the third quarter of 2022. The increase in revenue was a result of the SUNation acquisition in Q4 of 2022 and organic growth in Hawaii. Total gross profit was $7 million, an increase of $5.6 million or 401% year over year.

讓我們從 2023 年第三季 GAAP 業績開始。總收入為 1,830 萬美元，比 2022 年第三季增加 1,240 萬美元，增幅為 211%。收入的增加是由於 2022 年第四季度收購 SUNation 以及夏威夷的有機增長。毛利總額為 700 萬美元，年增 560 萬美元，即 401%。

Gross profit increased due to increased revenue and an improved gross profit margin. The gross profit margin improvements were a result of the SUNation acquisition and an improvement in equipment costs and financing fees. Total operating expenses were $8.6 million, an increase of $4.8 million or 125% year over year. The increase in operating expenses was primarily a result of the SUNation acquisition in Q4 of 2022.

由於收入增加和毛利率提高，毛利增加。毛利率的提高是由於收購 SUNation 以及設備成本和融資費用的改善。總營運費用為 860 萬美元，年增 480 萬美元，即 125%。營運費用的增加主要是由於 2022 年第四季收購 SUNation 所致。

Operating expenses in the third quarter of 2023 included $1.3 million of amortization and depreciation expense, $354,000 of stock-based compensation and $230,000 unfavorable fair value remeasurement of earnout consideration. Operating loss in the third quarter was $1.6 million, a decrease of $859,000 and 35% improvement over the prior year.

2023 年第三季的營運費用包括 130 萬美元的攤銷和折舊費用、354,000 美元的股票薪酬和 230,000 美元的盈利對價的不利公允價值重新計量。第三季營運虧損為 160 萬美元，減少 85.9 萬美元，比去年同期減少 35%。

Other expenses were $769,000, an increase of $650,000 from the prior year. Other expenses increased primarily due to an increase in interest expense due to debt financing closed in the second quarter and a $240,000 unfavorable fair value remeasurement of the contingent value rates.

其他費用為769,000美元，比上年增加650,000美元。其他費用增加主要是由於第二季結束的債務融資導致利息費用增加以及或有價值率的 240,000 美元不利公允價值重新計量。

Net loss from continuing operations attributable to common stockholders was $2.3 million or a loss of $0.23 per diluted share in the third quarter of 2023. This was 8% improvement from the net loss from continuing operations of $2.5 million in the third quarter of 2022 and 32% improvement from a diluted loss per share of $0.34 in the third quarter 2022.

2023 年第三季度，歸屬於普通股股東的持續經營淨虧損為230 萬美元，即攤薄後每股虧損0.23 美元。這比2022 年第三季度的持續經營淨虧損250 萬美元和32 年下降了8%。較 2022 年第三季攤薄每股虧損 0.34 美元改善了 %。

We will not comment on year-over-year US GAAP results for the nine months ended September 30 as the comparable results aren't meaningful due to only three days of operations post-merger with CSI represented in the first quarter of 2022.

我們不會對截至 9 月 30 日的 9 個月美國公認會計原則同比業績發表評論，因為由於 2022 年第一季與中證指數合併後僅運營三天，因此可比業績沒有意義。

Now let's summarize the pro-forma results, which assumes we owned SUNation and HEC for the full year in 2022. The pro forma year-over-year comparisons better represent the operational performance of the business versus growth as the result of acquisitions. Q3 pro-forma revenue declined 10% compared to the prior year, with HEC revenue up 6% and SUNation revenue down 16%.

現在讓我們總結一下預期結果，假設我們在 2022 年全年擁有 SUNation 和 HEC。預計同比比較更好地代表了業務的營運績效與收購帶來的成長。第三季預計營收較前一年下降 10%，其中 HEC 營收成長 6%，SUNation 營收下降 16%。

Pro-forma revenue declined 10% due to 12% decline in residential revenue, offset by 1% increase in commercial revenue and 3% increase in service and other revenue. The decrease in residential revenue of 12% as a result of a decrease in residential kilowatts installed at 10%. The average price per residential kilowatt installed declined 3% due to the impact of lower equipment costs and financing fees and customer pricing.

預計收入下降 10%，原因是住宅收入下降 12%，但被商業收入增長 1% 以及服務和其他收入增長 3% 所抵消。由於住宅裝置容量減少 10%，住宅收入下降 12%。由於設備成本、融資費用和客戶定價下降的影響，每千瓦裝機平均價格下降了 3%。

Q3 pro-forma gross profit, however, increased 9% compared to the prior year as reduction in equipment costs and financing fees outpaced the slight decline in average selling price of our installed systems resulting in gross profit margin improvement. Q3 pro-forma net loss increased by $2.1 million compared to the prior year due to income from the employee retention credit of $1.9 million recognized at SUNation in the third quarter of 2022.

然而，由於設備成本和融資費用的下降超過了已安裝系統的平均售價的小幅下降，導致毛利率改善，第三季度預計毛利比去年增長了 9%。由於 SUNation 於 2022 年第三季確認了 190 萬美元的員工保留信貸收入，第三季預計淨虧損將較上年增加 210 萬美元。

Pro-forma adjusted EBITDA of a positive $336,000 improved 156% from negative $602,000 in the prior year. This improvement was achieved through growth, margin improvement, and operating leverage gained by closely managing the operating costs of the business. Year-to-date pro-forma revenue was up 20% from $50.2 million last year to $60.2 million for the nine months ended September 30, 2023. Year-to -date pro-forma adjusted EBITDA of $1 million improved by $4.1 million or 133% from negative $3.1 million in the prior year.

預計調整後 EBITDA 為正 336,000 美元，較上一年的負 602,000 美元提高了 156%。這項改進是透過成長、利潤率提高以及嚴格管理業務營運成本而獲得的營運槓桿來實現的。截至2023 年9 月30 日的九個月，年初至今的預期收入從去年的5,020 萬美元成長了20%，達到6,020 萬美元。年初至今的預期調整後EBITDA 為100 萬美元，增加了410 萬美元，即133 %，較去年負 310 萬美元。

Pro-forma adjusted EBITDA includes adjustments for fair value remeasurement of earn-out consideration and contingent value rights obligations, stock compensation, gain on sale of assets, impairment losses, and the employee retention credit. We ended the quarter with cash available for Pineapple operations of $3.4 million compared to $2.4 million available at the end of the second quarter. We had another $2.2 million of restricted cash and liquid investments, which is reserved for the CVR holders.

預計調整後的 EBITDA 包括對獲利對價和或有價值權利義務的公允價值重新計量、股票補償、資產出售收益、減損損失和員工保留信用的調整。本季末，我們用於 Pineapple 業務的可用現金為 340 萬美元，而第二季末的可用現金為 240 萬美元。我們還有另外 220 萬美元的受限現金和流動投資，這是為 CVR 持有者保留的。

Net cash generated from operating activities during the third quarter of $870,000 was the result of positive improvements in net working capital. Notable changes in net working capital were due to an increase in AP, in customer deposits in the quarter, offset by an increase in other assets. Net cash used in financing activities for the quarter was $3.2 million due to a $3 million payment to the contingent value rights holders, which reduced our restricted cash balance. Now we would like to open the call for any questions. Operator, please go ahead.

第三季經營活動產生的淨現金為 870,000 美元，這是淨營運資本積極改善的結果。淨營運資本的顯著變化是由於本季度客戶存款的 AP 增加，但被其他資產的增加所抵消。本季融資活動使用的現金淨額為 320 萬美元，原因是向或有價值權利持有人支付了 300 萬美元，這減少了我們的受限現金餘額。現在我們想打開電話詢問任何問題。接線員，請繼續。

(Operator Instructions) Donovan Schafer, Northland Capital Markets.

（操作員說明）Donovan Schafer，Northland Capital Markets。

Hey, guys. Thanks for taking the questions. I wanted to first ask about the Long Island, time of you spilling. Are you seeing anything -- do you have any leading indicators that you track, whether it maybe quoting activity or inbound interest, anything that gives you a sense of whether you're already seeing signs of an uptick there, whether it's a battery or attachment inquiries or new installs and then WiSA or potentially in the absence of that? And do you have a sense for 2024 of whether you expect that to have an impact earlier in the year or more towards the end of the year?

大家好。感謝您提出問題。我想先問一下長島的事，你溢出的時間。您是否看到任何東西 - 您是否有任何跟踪的領先指標，無論是引用活動還是入站興趣，任何讓您感覺到是否已經看到那裡上升跡象的東西，無論是電池還是附件詢問或新安裝，然後是WiSA 或可能沒有WiSA？對於 2024 年，您是否預計這會在今年稍早產生影響，還是在年底產生更大影響？

Yeah. I would say the full answer is kind of in the absence of that, right? We are still going through 2024 budgeting right now. And so we haven't fully put pen to paper on all this assumptions I think it's going to be a build over time because they're chunking it out and like how broadly it's rolled out and what tariffs or customer groups get it over time. So I think it's certainly going to build up through the year. We've got Scott here who probably knows more about this than all of us. Scott, you got a point of view on this?

是的。我想說完整的答案是在沒有這個的情況下，對吧？我們現在仍在製定 2024 年預算。因此，我們還沒有完全把所有這些假設寫在紙上，我認為隨著時間的推移，這將是一個構建，因為他們正在將其分塊，例如它的推廣範圍以及隨著時間的推移，關稅或客戶群會得到什麼。所以我認為這一年肯定會增加。斯科特在這方面可能比我們所有人都了解更多。史考特，你對此有什麼看法嗎？

Sure. So January 1, the rollout was slightly delayed for IT issues from the utility. January 1, all new meters, new customers will be automatically enrolled in time-of-day rates. I like the territory and they'll be doing chunks throughout the rest of the year in probably $50,000, $60,000, $70,000 customer groups. But the goal is I believe that by the beginning of 2025, all 750,000 repayers will have to opt out of time-of-day rates.

當然。因此，由於公用事業公司的 IT 問題，1 月 1 日的推出略有延遲。 1 月 1 日起，所有新電錶、新客戶都將自動登記按時費率。我喜歡這個領域，他們將在今年剩餘的時間裡在大約 50,000 美元、60,000 美元、70,000 美元的客戶群中進行大量工作。但我的目標是，到 2025 年初，所有 75 萬名還款人都必須選擇退出分時費率。

Yeah. And we were talking about this even just yesterday with Scott here about how starting next week, right, he's going to be back in the office. We're going to be through earnings release, earnings calls. We had a Board meeting still the prep for, but it was one of the top priority items. We said is let's make sure we get our analytics team, our sales leadership team together, and we start looking at our pricing book. We start looking at our sales materials, and we make sure that we've got the right training, the right talk tracks, the right pricing in place to make sure that --

是的。就在昨天，我們還在和史考特討論過這個問題，從下週開始，他將回到辦公室。我們將進行收益發布、收益電話會議。我們的董事會會議仍在準備中，但它是最優先的項目之一。我們說，讓我們確保我們的分析團隊、銷售領導團隊聚集在一起，然後我們開始查看我們的定價手冊。我們開始查看我們的銷售資料，並確保我們接受了正確的培訓、正確的談話曲目、正確的定價，以確保—

It's different, right? But you look at the NEM 3 market in California, and you look how that's evolved since and you look at it from what we're seeing this real bifurcation in companies that were prepared for it and had expertise in house and were savvy. And we're able to pivot and start selling in a post NEM 3 world with solar plus battery storage and then a lot of work. And we're going to make sure that we're in the group who can.

這是不同的，對吧？但你看看加州的NEM 3 市場，你會看到它是如何演變的，你會從我們所看到的真正的分歧中看到它，這些公司為此做好了準備，擁有內部專業知識，並且很精明。我們能夠在後 NEM 3 世界中利用太陽能和電池儲存進行轉型並開始銷售，然後進行大量工作。我們將確保我們屬於有能力的團隊。

And I think it's a great opportunity to differentiate and separate and elevate yourselves and take share. And I think we've got a ton of experience, 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 literally just yesterday, we were talking about how this becomes a priority right away.

我認為這是一個脫穎而出、脫穎而出、提升自己並分享份額的絕佳機會。我認為我們在長島市場擁有 20 年的豐富經驗，可以為那裡的客戶提供幫助。然後就像我們在劇本中提到的那樣，我們還擁有夏威夷的專業知識可以繪製。因此，我相信我們將提供出色的產品，並能夠有效地將其呈現給客戶。但實際上就在昨天，我們正在討論如何立即將其視為優先事項。

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 an elevated level due to some of the pushouts from the Hawaii building department issue from late last year. But I wouldn't think that would be a factor going from Q2 to Q3? I know you talked about that's the and we know from all the other residential companies it's certainly a challenging environment.

好的。這很有幫助。謝謝。然後轉向收入，你們在第二季連續下降，然後在第三季再次下降。在上次電話會議上，我們討論了由於去年年底夏威夷建築部門問題的一些推出，第一季度的水平如何處於較高水平。但我不認為這會成為從第二季到第三季的一個因素？我知道您談到了這一點，我們從所有其他住宅公司中了解到，這肯定是一個充滿挑戰的環境。

So I guess the question is in light of all that, what gives you the confidence for Q4? You've got 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 skewed to C&I or something? What is it about all that that makes you feel confident, yes, there and it's going to land in Q4?

所以我想問題是鑑於這一切，是什麼給了你對第四季的信心？你那裡有積壓的訂單嗎？您是否收到任何事情被取消或推遲的情況，或者您所看到的情況是否讓您覺得積壓中的事情的時間表是固定的，不會從第四季度滑到第一季度？它是否偏向 C&I 還是什麼？是什麼讓您感到有信心，是的，並且它將在第四季度落地？

Yeah. Confidence is 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's the confidence interval is some.

是的。信心都是相對的。我稍微思考了一下這個問題。當你從統計學上給出一個指導範圍時，你實際上在做什麼？你試著選擇一個中點，你想說，它在這一邊是正值或負值，並且在一個標準差或兩個標準差之內還是其他什麼？信賴區間是多少。

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 calendars look like in October and for November and December so far, and we could track that against historicals.

所以顯然，這從來都不是灌籃，但我認為我們還有九個月的時間。正如我們所提到的，我們有積壓的訂單。我們已經在 CRM 和專案管理系統中了解了迄今為止 10 月、11 月和 12 月的安裝日曆，並且我們可以根據歷史記錄進行追蹤。

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.

然後在紐約，還有 C&I 管道。因此，我認為我們對今年將如何結束有良好的可見性和分析，但這並不能保證。但也有缺點；也許還有好處。我認為，正如我所說，到 2024 年，我們仍在進行預算編制工作。

And one of the things that we've been talking about lately is it's just 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? It's great because it helps margins, it's great because it lowers prices for the end consumer as 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 is number of jobs you do or there's a kilowatt installed.

我們最近一直在談論的一件事是，這只是一件奇怪的事——這是一件好事，但這是一個奇怪的行業，或者可能是一個奇怪的行業，在成本基礎行業中，對吧？它很棒，因為它有助於提高利潤率，它很棒，因為它降低了最終消費者的價格，因為它增加了整體價值支撐，但它有點搞砸了你對收入和成長應該是什麼樣子的看法，對吧，因為有很多您所做的工作或安裝了千瓦。

But the prices are going down like that could make it look like your revenues flat or shrinking even if that's all in 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've heard us emphasize gross profit and gross profit dollars more on this call than we have before, I believe really resolves around to.

但價格的下降可能會讓你的收入看起來持平或萎縮，即使這些收入都在成長或成長。因此，到2024 年，我們正在努力解決這個問題，但這就是為什麼你——你聽到我們在這次電話會議上比以前更強調毛利和毛利美元的原因之一，我相信真正解決了這個問題到。

At the end of the day, your prices go up, your prices go down, like your costs go up, your costs, go down, dealer fees, club dealer fees go down. We sell it, 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.

歸根究底，你的價格上漲，你的價格下跌，就像你的成本上漲，你的成本下降，經銷商費用、俱樂部經銷商費用下降。我們出售它，安裝您所做的事情。這一切都取決於實際產生的毛利是多少，甚至不是百分比，而是您產生的毛利的實際數量是多少？然後你的營運支出是多少，這就是你的 EBITDA。

Scott was even saying yesterday to his colleagues was that five years ago made a shirt that said GMD in front of its gross margin dollars. I think I'm going to make a shirt like that and where breweries is on the weekend or something. But yeah, that's how we're thinking about the rest of the quarter and what gives us confidence in that and the things we're working through on our 2024 budgeting.

史考特昨天甚至對他的同事說，五年前製造了一件襯衫，毛利率前面寫著「GMD」。我想我會做一件像那樣的襯衫，週末啤酒廠會在哪裡。但是，是的，這就是我們對本季度剩餘時間的看法，這讓我們對此以及我們正在製定 2024 年預算的事情充滿信心。

Jeff Grampp, Alliance Global Partners.

傑夫·格蘭普，聯盟全球合作夥伴。

Good morning, guys. And appreciate the delay in the call an hour. I know we come first and you guys think about planning things. Question on the margin performance, now that continues to be very strong. Is there any more room for growth there given the tailwinds on the equipment pricing and then hardware and things of that nature? Or do you feel or kind of topping out here around these levels?

早上好傢伙。並感謝通話延遲一小時。我知道我們是第一位的，你們要考慮計劃事情。關於利潤率表現的問題，現在仍然非常強勁。考慮到設備定價以及硬體和此類性質的事物的推動力，那裡還有更多的成長空間嗎？或者你感覺或有點在這些水平附近達到頂峰？

Let me go first and then I'll turn it over to Eric. And maybe even Scott has a perspective on it too. Higher is better right in the short term, but I almost worry that our gross margins are starting to get to high right? It's always that delicate balance of how are you priced relative to competitors and what's the price elasticity? And if you go a little bit lower on pricing and seat a little bit of gross margin, do more than make that up in volume, which is something we're going to look at.

讓我先走，然後我就把事情交給艾瑞克。也許斯科特也對此有自己的看法。短期越高越好，但我幾乎擔心我們的毛利率開始變高，對嗎？相對於競爭對手的定價方式以及價格彈性是多少，這始終是一種微妙的平衡？如果你的定價稍微低一點，毛利率也低一點，那麼就不僅僅是透過銷售來彌補，這是我們要考慮的事情。

Our teams have done a tremendous job in both Hawaii and New York and supported by some great corporate work on negotiating and realizing discounts in procurement. Certainly, a trend across the industry, but I'm proud of what we've been able to accomplish on the cost basis on that and see that come through.

我們的團隊在夏威夷和紐約都做了巨大的工作，並得到了一些在採購談判和實現折扣方面出色的企業工作的支持。當然，這是整個行業的趨勢，但我對我們能夠在成本基礎上取得的成就感到自豪，並看到它的實現。

It's again to go back to just the 2024 budgeting. We're trying to form up a perspective on what we actually want the gross margin percentage to be in 2024 and wherever the OpEx needs to be and how that allows us to get 10% or higher EBITDA margin at each of the operating businesses. And that's also a benchmark we look for at new companies to acquire. So I think there is continued room to drive cost out of the business and keep lowering the cost basis. And then the margin is a question of what we want to do on pricing and what where the elasticity is that on our equity paying that out of that.

再次回到 2024 年預算。我們正在努力形成一個視角，了解我們真正希望 2024 年的毛利率百分比是多少，營運支出需要在哪裡，以及如何讓我們在每個營運業務中獲得 10% 或更高的 EBITDA 利潤率。這也是我們尋找要收購的新公司的基準。因此，我認為還有繼續降低業務成本並持續降低成本基礎的空間。然後，利潤率是我們想要在定價方面做什麼以及我們從中支付的股本的彈性在哪裡的問題。

Yeah, I think that in today's inflationary environment, consumers are used to costs increasing. So we've been able to maintain or just slightly reduce our selling prices while taking advantage of lowering equipment costs and dealer fees to enhance our margins so that we are closely watching our market share numbers to make sure to see what our competitors are doing. We want to make sure that we're still competitive in each market that we're in. But so far, we've been able to maintain pricing and take advantage of lower equipment and financing costs to date.

是的，我認為在當今的通貨膨脹環境下，消費者已經習慣了成本增加。因此，我們能夠維持或略微降低我們的銷售價格，同時利用降低設備成本和經銷商費用來提高我們的利潤，以便我們密切關注我們的市場份額數字，以確保了解我們的競爭對手在做什麼。我們希望確保我們在所在的每個市場仍然具有競爭力。但到目前為止，我們已經能夠維持定價並利用迄今為止較低的設備和融資成本。

Okay, great, helpful. Thank you. And for my follow-up, I'll ask the obligatory M&A question and just get an update for what you guys are seeing in that. In that market, it's potentially opportunity-rich, but obviously a lot of macro uncertainty. So just wondering how you guys are thinking about potentially executing something in this market.

好的，太好了，有幫助。謝謝。對於我的後續行動，我將提出強制性的併購問題，並了解你們所看到的最新情況。在這個市場中，潛在機會豐富，但顯然存在著許多宏觀不確定性。所以只是想知道你們是如何考慮在這個市場上執行某些事情的。

We absolutely want to and remain focused on it. And the absence of announcing a close deal this quarter and last quarter should not be interpreted to mean an absence of activity there. We've been incredibly active on it. It's a big part of what we focus on. And I think I'll say our pipeline is the biggest.

我們絕對希望並繼續關注它。本季和上季沒有宣布達成交易不應被解釋為缺乏活動。我們在這方面一直非常積極。這是我們關注的一個重要部分。我想我會說我們的管道是最大的。

I don't know if that's the right term, the healthiest it's ever been right, because you start with a lot of companies entering the funnel and then you get to know the more you diligence them and that you have a front proceed to how they perform over time through good times and through some of the challenges more recently. And then it really shakes out and you get a greater confidence level in who the right company is, the right fit for you, the best operators.

我不知道這是否是正確的術語，是有史以來最健康的術語，因為一開始有很多公司進入漏斗，然後你越努力就會了解他們，並且你可以了解他們如何隨著時間的推移，在美好時光和最近的一些挑戰中表現出色。然後它真的會發生變化，你會對誰是合適的公司、最適合你的公司、最好的經營者更有信心。

And I think we've made a ton of progress on that, and we're really excited about the shortlist of companies that I'd say are lower down in the funnel. It's a good time to be buying, right, if you can raise the money. And I think that it's the only silver lining of the massive drop in the stock prices and the public equity valuations in the solar companies is that that trickles down to the valuations of the private companies as well. And so if you're a consolidator, it's a great time to be buying. If you have confidence in your ability to identify and diligence the writing companies and then go fundraise for it.

我認為我們在這方面已經取得了很大進展，我們對我認為位於漏斗下方的公司入圍名單感到非常興奮。如果你能籌集到資金，現在就是買入的好時機，對吧。我認為，太陽能公司股價和公共股權估值大幅下跌的唯一一線希望是，這也會影響私人企業的估值。因此，如果您是整合商，現在正是購買的好時機。如果您對自己識別和盡職調查寫作公司的能力有信心，然後為其籌集資金。

I think we've mentioned this before, but in fundraising, the whole point of being public was to use stock to be able to be a currency in M&A and also to raise the cash for the cash consideration with the stock price where it is right now, it's just too dilutive to do that. So that's not what we want to do. So we're thinking about debt as the tool to do it.

我想我們之前已經提到過這一點，但在融資中，上市的全部目的是利用股票成為併購中的貨幣，並以合適的股價籌集現金以獲取現金對價現在，這樣做太稀釋了。所以這不是我們想要做的。因此，我們正在考慮將債務作為實現這一目標的工具。

I think it's why it's been so critical to get. When you're our size and starting out, every acquisition is critical. But the Hawaii acquisition was key. It was our first one. The SUNation acquisition was key because it tripled the size of the company and got the company to EBITDA positive and generating cash. And then that puts us in the position of the next acquisition. It's totally accretive and falls straight to the bottom line because we're looking at healthy, well-run businesses that have strong bottom line and EBITDA. We think we can raise debt off of those multiples. So we have few different capital-raising tools at our disposal.

我認為這就是為什麼它如此重要。當您達到我們的規模並且剛起步時，每次收購都至關重要。但收購夏威夷是關鍵。這是我們的第一個。收購 SUNation 至關重要，因為它使公司規模擴大了兩倍，並使公司實現 EBITDA 正數並產生現金。然後這使我們處於下一次收購的位置。它完全是增值的，並且直接下降到利潤，因為我們正在尋找健康、經營良好、擁有強勁利潤和 EBITDA 的企業。我們認為我們可以提高這些倍數的債務。因此，我們可以使用的融資工具很少。

Great. Maybe just a quick follow-up on that color. Are you seeing -- you guys, as you mentioned, you get mark to market every day with the public equity, private companies don't. Do you feel that there's sufficient narrowing in terms of buyer seller expectations to where there's transactions to be done? Or does some more market therapy need to matriculate through on the private side?

偉大的。也許只是對該顏色的快速跟進。你們看到了嗎——正如你們所提到的，你們每天都會透過公共股本按市值計價，而私人公司則不然。您是否認為買方賣方的期望已充分縮小到需要進行交易的程度？或者私人方面是否需要接受更多的市場治療？

No, I think we're getting really good feedback like we have constructive conversations with people. There are different value or consideration levers in a deal, cash upfront seller notes, earn-outs, like what their roles are of individuals going forward, stock, right? So there's a lot of different tools in the toolkit. And I think different sellers have different motivations to put different values on those things.

不，我認為我們得到了非常好的回饋，就像我們與人們進行了​​建設性對話一樣。交易中有不同的價值或考慮因素，現金預付賣方票據，收益，就像他們在個人未來的角色，股票，對嗎？因此，工具包中有很多不同的工具。我認為不同的賣家有不同的動機來賦予這些東西不同的價值。

So I think there's a lot of ways to negotiate in a kind of mutually beneficial way. And I think in terms of just where overall multiples are at and where upfront cash consideration is at, I think the adjustment is there. We're at a really healthy place. And then as a public company, these acquisitions are probably going to be material and just the size you'd look at. And so there's not a component that has to happen. There's a fundraising component that has to happen. But it's a good environment for doing what we're trying to do, let say.

所以我認為有很多方法可以以互利的方式進行談判。我認為就整體市盈率和預付現金考慮而言，我認為調整已經存在。我們處於一個非常健康的地方。作為一家上市公司，這些收購可能會很重要，而且規模也正是你所看到的。所以沒有一個組件是必須發生的。必須進行籌款活動。但可以說，對於我們想做的事情來說，這是一個很好的環境。

Okay, great. Thank you, guys for the time.

好的，太好了。謝謝你們，各位。

Seeing no more questions in the queue, let me turn the call back to Mr. Udseth to conclude the call.

看到隊列中沒有更多問題，讓我將電話轉回給烏塞思先生以結束通話。

Thank you, operator. Before we conclude, I wanted to mention a few upcoming events. Next Thursday, the 16th, Eric and I will be joining James West of Evercore for a virtual fireside chat at two Eastern. Then later this month on November 30, we'll be in New York for the Bank of America flagship Renewables Conference and will be joining Julian for a fireside chat at four Eastern, and then we'll be attending the Janney Clean Energy Investment Symposium in New Orleans, December 5 through the 7.

謝謝你，接線生。在結束之前，我想提一下即將舉行的一些活動。下週四，即 16 日，我和埃里克將與 Evercore 的詹姆斯·韋斯特 (James West) 一起在東方二號進行虛擬爐邊聊天。然後本月晚些時候，即11 月30 日，我們將在紐約參加美國銀行旗艦可再生能源會議，並將與朱利安一起在東部四號大樓進行爐邊談話，然後我們將參加在紐約舉行的詹尼清潔能源投資研討會新奧爾良，12 月 5 日至 7 日。

And I'm going to eat on that one. It's an amazing Food City, definitely need to pack the running shoes for sure. How we look forward to connecting with anyone who's able to attend those events and please reach out to your contact at those firms if you'd like to schedule one-on-ones.

我要吃那個。這是一個很棒的美食城，一定要帶上跑鞋。我們非常期待與能夠參加這些活動的任何人聯繫，如果您想安排一對一的交流，請聯繫您在這些公司的聯絡人。

Now to conclude, speaking on behalf of the entire Pineapple leadership team, we're excited by the strong first three quarters the company has been able to deliver in 2023. Thanks to everyone listening to or reading this for your ongoing engagement. This past quarter has been a challenging operating environment and a tough time for pretty much everyone I know in the industry. And it's hard when you see two huge oil companies, both do $50 billion acquisitions, while renewable stocks are kicking around 5-year lows.

最後，我代表整個 Pineapple 領導團隊發言，我們對公司在 2023 年前三個季度的強勁表現感到興奮。感謝所有收聽或閱讀本文的人的持續參與。過去的一個季度是一個充滿挑戰的營運環境，對我認識的業內幾乎每個人來說都是一段艱難的時期。當你看到兩家大型石油公司都進行了 500 億美元的收購，而再生能源股票卻觸及 5 年低點時，情況就很難了。

But we keep fighting the good fight and riding the solar coaster and as higher interest rates passed through and ever-increasing utility rates in the next round of their rate cases, while our equipment costs keep declining, our fundamental value proposition to homeowners is just going to continue to grow and grow. Thank you again for joining us this morning and for your continued support. If you have any questions, please contact Eric or me. This concludes our call today. You may all disconnect. Thank you.

但我們繼續打好仗，坐上太陽能過山車，隨著利率上升，下一輪利率情況下公用事業費率不斷提高，而我們的設備成本不斷下降，我們對房主的基本價值主張正在改變。繼續成長壯大。再次感謝您今天早上加入我們並感謝您一如既往的支持。如果您有任何疑問，請聯絡 Eric 或我。我們今天的電話會議到此結束。你們都可以斷開連線。謝謝。