Sunworks Inc (SUNW) 2023 Q2 法說會逐字稿

Greetings. Welcome to Sunwork's second-quarter 2023 results conference call. (Operator Instructions) Please note this conference is being recorded.

問候。歡迎參加 Sunwork 2023 年第二季度業績電話會議。 （操作員說明）請注意，本次會議正在錄製中。

I will now turn the conference over to Jason Bonfigt, Chief Financial Officer. Thank you. You may begin.

我現在將會議交給首席財務官賈森·邦菲特 (Jason Bonfigt)。謝謝。你可以開始了。

Thank you, operator. I'm Jason Bonfigt, Chief Financial Officer of Sunworks. On behalf of our entire team, I'd like to welcome you to our second-quarter results of 2023 conference call. Leading the call with me today is our President and CEO, Gaylon Morris.

謝謝你，接線員。我是 Jason Bonfigt，Sunworks 首席財務官。我謹代表我們整個團隊歡迎您參加我們的 2023 年第二季度業績電話會議。今天與我一起主持電話會議的是我們的總裁兼首席執行官蓋倫·莫里斯 (Gaylon Morris)。

Today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update our forward-looking statements. Following our prepared remarks, we will open the line for questions.

今天的討論包含有關未來業務和財務預期的前瞻性陳述。由於各種風險和不確定性，包括我們向美國證券交易委員會提交的定期報告中描述的風險，實際結果可能與今天的前瞻性聲明中預測的結果存在顯著差異。除法律要求外，我們不承擔更新前瞻性陳述的義務。在我們準備好的發言之後，我們將開通提問熱線。

With that, I'd like to turn the call over to Gaylon.

說到這裡，我想把電話轉給蓋倫。

Thank you, Jason, and welcome to those joining us today. As detailed in our second-quarter earnings release issued earlier today, the last several months have been a challenging period for both Sunworks and the residential solar industry at large. Even so, we believe the long-term economics of solar remain highly attractive, particularly as the demands of a growing population weigh on our nation's aging electricity infrastructure, resulting in structurally higher utility rates for customers over time.

謝謝你，傑森，歡迎今天加入我們的人。正如我們今天早些時候發布的第二季度收益報告中所詳述的那樣，過去幾個月對於 Sunworks 和整個住宅太陽能行業來說都是充滿挑戰的時期。即便如此，我們相信太陽能的長期經濟效益仍然極具吸引力，特別是隨著人口增長的需求給我國老化的電力基礎設施帶來壓力，隨著時間的推移，會導致客戶的公用事業費率在結構上更高。

During the second quarter, the combination of higher interest rates, less favorable residential solar economics in California following the NEM 3.0 transition, together with utility permitting delays, resulted in lower installation activity and reduced fixed cost absorption in the period. During a transitional period for our residential business, we've maintained an opportunistic pricing strategy in accordance with current demand conditions. At the same time, we've taken decisive action to further rightsize our cost structure, including a reduction in force beginning in the third quarter 2023.

第二季度，利率上升、NEM 3.0 過渡後加州住宅太陽能經濟狀況不佳，加上公用事業許可延遲，導致該期間安裝活動減少，固定成本吸收減少。在我們的住宅業務的過渡時期，我們根據當前的需求狀況保持了機會主義的定價策略。與此同時，我們採取了果斷行動，進一步調整成本結構，包括從 2023 年第三季度開始減少人力。

Since launching our direct sales initiative in the fourth quarter of 2021, we've continued to gain significant traction in the market. Recall that customer acquisition costs within the direct sales channel are materially less than through our third-party agency channel. To that end, direct sales represented 45% of all originations in the second quarter versus 23% in the prior year period.

自 2021 年第四季度推出直銷計劃以來，我們繼續在市場上獲得巨大的吸引力。回想一下，直接銷售渠道的客戶獲取成本大大低於我們的第三方代理渠道。為此，第二季度直接銷售佔所有來源的 45%，而去年同期為 23%。

In July, we were pleased to appoint Mark Trout as Group CEO of Solcius, Sunwork's wholly owned residential solar business, effective July 10, 2023. Mark brings more than 35 years of senior commercial development and operational experience to Sunworks, including deep sector expertise within the residential solar and advanced technology industries.

7 月，我們很高興任命Mark Trout 為Sunwork 全資住宅太陽能業務Solcius 的集團首席執行官，自2023 年7 月10 日起生效。Mark 為Sunworks 帶來了超過35 年的高級商業開發和運營經驗，包括深厚的行業專業知識住宅太陽能和先進技術行業。

Previously, he served as Chief Technology Officer for both Sunrun and Vivint Solar, where he led the implementation and execution of all IT and product technology initiatives, including solar product innovation. At Solcius, Mark will provide his structural and systems expertise to our residential channel, while driving continued improvements in efficiency, quality, and customer satisfaction. We are excited to have Mark join the team at a pivotal period for the company.

此前，他曾擔任 Sunrun 和 Vivint Solar 的首席技術官，領導所有 IT 和產品技術計劃的實施和執行，包括太陽能產品創新。在 Solcius，Mark 將為我們的住宅渠道提供他的結構和系統專業知識，同時推動效率、質量和客戶滿意度的持續改進。我們很高興馬克在公司的關鍵時期加入團隊。

Turning now to a discussion of our commercial solar energy business. Our commercial business had an outstanding second quarter, as revenue nearly doubled on a year-over-year basis, while gross profit margin increased more than 1,000 basis points to 26.5% in the period. Our track record of strong project execution has started to garner the attention of large commercial organizations, including several independent power producers, many of whom have multiple installations across the United States that represents promising new entry points for us.

現在討論我們的商業太陽能業務。我們的商業業務第二季度表現出色，收入同比增長近一倍，毛利率同期增長逾1,000個基點至26.5%。我們強大的項目執行記錄已開始引起大型商業組織的關注，其中包括幾家獨立電力生產商，其中許多在美國各地擁有多個安裝項目，這對我們來說是有希望的新切入點。

Our ability to deliver a turnkey project on schedule and at or below budget is a key point of differentiation for us in the markets we serve, one that resonates with our customers. Our inbound indications of interest and commercial project awards that are waiting for utility approvals and studies have increased materially in recent months, both in reference to our traditional solar market installations, but also in battery storage systems and EV installations, which represent new areas of opportunity for us. In response, we've onboarded new creative financing options to secure the business while building a pipeline of opportunities supportive of future backlog growth.

我們能夠按時並在預算內或低於預算交付交鑰匙項目，這是我們在所服務的市場中脫穎而出的關鍵點，也是我們與客戶產生共鳴的關鍵點。近幾個月來，我們正在等待公用事業批准和研究的入境興趣和商業項目獎勵大幅增加，既涉及我們的傳統太陽能市場安裝，也涉及電池存儲系統和電動汽車安裝，這代表了新的機遇領域為了我們。作為回應，我們採用了新的創造性融資方案來確保業務，同時建立支持未來積壓增長的機會渠道。

Looking ahead, we intend to stay on course for our strategic growth priorities, building market-leading positions in regional centers, while driving programmatic cost reductions that reduce our cash burn and put us closer toward achieving positive EBITDA consistent with our long-term objectives. Given the strength in our backlog, together with ongoing development activities, we anticipate our financial performance in the second half of 2023 will be stronger than the first half of the year, positioning us to rebuild momentum in our business entering 2024. As before, the market opportunity for solar remains significant across our geographic footprint, positioning Sunworks to play a leading role in the transition towards affordable, clean, and independent energy production.

展望未來，我們打算繼續實現我們的戰略增長重點，在區域中心建立市場領先地位，同時推動計劃性成本削減，減少我們的現金消耗，並使我們更接近實現與我們長期目標一致的正 EBITDA。鑑於我們積壓的實力以及正在進行的開發活動，我們預計 2023 年下半年的財務業績將強於上半年，使我們能夠在進入 2024 年的業務中重建動力。在我們的地理足跡中，太陽能的市場機會仍然很大，這使得Sunworks 在向負擔得起的、清潔的和獨立的能源生產過渡中發揮著主導作用。

With that, I'll hand the call over to Jason for his remarks.

這樣，我將把電話轉交給傑森，聽他講話。

Thank you, Gaylon. Beginning with a summary of our second-quarter financial performance, Sunworks generated total revenue of $34.6 million in the second quarter of 2023, a decline of 4.8% versus the prior year period, as strength within commercial was more than offset by weaker performance in the residential, which Gaylon referenced earlier.

謝謝你，蓋倫。首先對第二季度的財務業績進行總結，Sunworks 在 2023 年第二季度的總收入為 3,460 萬美元，比去年同期下降 4.8%，這是因為商業領域的強勁表現被商業領域疲軟的業績所抵消。住宅區，蓋倫之前提到過。

While higher interest rates have increased in total cost of rooftop solar for homeowners, we continue to offer a suite of financial products that, over time, will help homeowners save money relative to their utility bills. Even so, higher rates remain a headwind for our business and the industry.

雖然較高的利率增加了房主屋頂太陽能的總成本，但我們將繼續提供一套金融產品，隨著時間的推移，這些產品將幫助房主節省相對於水電費的費用。即便如此，較高的利率仍然是我們業務和行業的阻力。

In advance of the well-publicized NEM 3.0 transition in California during April 2023, customers accelerated their decision to go solar, resulting in a pull-forward demand from the second quarter. As we move further away from April transition, we anticipate further stabilization in new originations. We factor that remains a challenge involves the significant delays in the average utility interconnection application approval timelines in California, which remains our largest market. Approval queues have approached four months from approximately one week last year. As we move further away from the NEM transition, we would expect application approval timelines to normalize.

在 2023 年 4 月加利福尼亞州廣為人知的 NEM 3.0 過渡之前，客戶加速了轉向太陽能的決定，導致第二季度的需求提前。隨著四月份過渡期的臨近，我們預計新發病例將進一步穩定。我們認為，這仍然是一個挑戰，涉及加州平均公用事業互連申請批准時間表的嚴重延遲，加州仍然是我們最大的市場。審批隊列從去年的大約一周增加到了四個月。隨著我們距離 NEM 過渡越來越遠，我們預計申請批准時間表將正常化。

Total gross profit was $11.4 million or 33% of sales compared to $16.6 million or 45.5% in the prior year quarter. The combination of execution improvements and higher volume within our commercial segment drove their gross margin to improve to 26.5% during the quarter. Offsetting this improvement was underabsorption of labor costs in our residential business as California utility approvals cause disruption and excess costs throughout the quarter. As we enter Q3, we are focused on margin improvement in residential as we realize labor cost savings and as utility approval queues revert to historical timelines, and as we exit underutilized markets in which we are not operating at scale to drive an acceptable margin profile.

總毛利潤為 1,140 萬美元，佔銷售額的 33%，而去年同期為 1,660 萬美元，佔銷售額的 45.5%。我們商業部門執行力的提高和銷量的增加推動本季度毛利率提高至 26.5%。我們住宅業務的勞動力成本吸收不足抵消了這一改善，因為加州公用事業的批准導致整個季度的中斷和超額成本。當我們進入第三季度時，我們將重點放在住宅領域的利潤率改善上，因為我們意識到勞動力成本的節省，公用事業審批隊列恢復到歷史時間表，以及我們退出未充分利用的市場，在這些市場中，我們沒有大規模運營以推動可接受的利潤率狀況。

We reported an operating loss of $11.4 million in the second quarter versus a loss of $7.5 million in the prior year period. Adjusted EBITDA was a loss of $9.9 million, better than our guided range of between $10 million and $11.5 million loss that we provided on August 2. We generated a net loss of $12.7 million in the second quarter of 2023 or $0.34 per basic share, versus a net loss of $7.6 million in the prior year period or $0.23 per basic share.

我們報告第二季度運營虧損 1140 萬美元，而去年同期運營虧損 750 萬美元。調整後EBITDA 虧損990 萬美元，好於我們8 月2 日提供的1000 萬美元至1150 萬美元虧損指導範圍。2023 年第二季度，我們產生了1270 萬美元的淨虧損，即每股基本股0.34美元，而上年同期淨虧損 760 萬美元，即每股基本虧損 0.23 美元。

As of June 30, 2023, the company had cash and cash equivalents of $4.6 million. During the second quarter, we took action to further bolster our liquidity to support the long-term growth of the business by financing our ERTC receivable, raising equity, and securing a factoring line of credit for our commercial receivables. Furthermore, on August 9, we announced the completion of an equity offering which resulted in net proceeds of $3.2 million, which is earmarked for general corporate purposes.

截至2023年6月30日，該公司擁有現金和現金等價物為460萬美元。第二季度，我們採取行動，通過為 ERTC 應收賬款融資、籌集股本以及為商業應收賬款獲得保理信用額度，進一步增強流動性，以支持業務的長期增長。此外，8 月 9 日，我們宣布完成股票發行，所得淨收益為 320 萬美元，專門用於一般公司用途。

Operator, that concludes our prepared remarks. Please open the line for questions as we begin our question-and-answer session.

接線員，我們準備好的發言到此結束。當我們開始問答環節時，請打開提問熱線。

(Operator Instructions) Philip Shen, Roth MKM.

（操作員說明）Philip Shen，Roth MKM。

Hey, guys. Thanks for taking the questions. I wanted to start off with C&I. It sounds like you're having some traction there. I was wondering if you could talk us through how long you expect to see the strength. Do you expect this to continue through Q3 and Q4 and perhaps even through 2024? Our sense is that things are actually accelerating with C&I, and I was wondering if you are seeing something similar as well.

大家好。感謝您提出問題。我想從 C&I 開始。聽起來你在那裡有一些吸引力。我想知道您是否可以告訴我們您預計需要多長時間才能看到這種力量。您預計這種情況會持續到第三季度和第四季度，甚至可能持續到 2024 年嗎？我們的感覺是，C&I 的發展實際上正在加速，我想知道您是否也看到了類似的情況。

I think the C&I industry is growing; it's getting more and more strong. I expect to see that business -- let's just say I expect to see the C&I market grow considerably over the next 18 months. It's not nearly as impacted by certain parameters that are impacting the residential market. And if you look at like WoodMac studies and things like that, they all fall in line with that same idea that the commercial business is going to improve over the next 18 months and then beyond that.

我認為工商業行業正在增長；它變得越來越強。我預計會看到該業務 - 這麼說吧，我預計 C&I 市場將在未來 18 個月內大幅增長。它幾乎不受影響住宅市場的某些參數的影響。如果你看看 WoodMac 的研究和類似的事情，它們都符合同樣的想法，即商業業務將在未來 18 個月甚至更遠的時間內得到改善。

And is part of the reason driven by -- was C&I a little bit slower earlier this year because of the waiting for the IRA guidance? And with the guidance now largely out, have things freed up as a result? And can you also talk about margins? Do you expect the margins for this segment to remain in this mid-20%s level?

部分原因是——今年早些時候，C&I 是否因為等待 IRA 指導而放緩了一些？現在指南已基本出台，事情是否因此得到了釋放？您還能談談利潤嗎？您預計該細分市場的利潤率會保持在 20% 左右的水平嗎？

The IRA -- certainly, the guidance and understanding the domestic content adders and such have had an impact. I think that there was a negative impact earlier in the year, and there still is, to some extent, a headwind with regards to the utility approvals, not just the utility approvals from the residential side are definitely a burden, but rarely do they require any sort of a study or any sort of a follow-up activity by the utility that could take a serious amounts of time. We have many, many contracts that we are not calling backlog yet that are sitting in approval queues at the utilities right now. So that has been the number one headwind so far.

IRA——當然，對國內內容添加者等的指導和理解產生了影響。我認為今年早些時候有負面影響，而且在某種程度上，公用事業審批方面仍然存在逆風，不僅僅是住宅方面的公用事業審批肯定是一個負擔，但他們很少要求公用事業公司可能需要花費大量時間的任何類型的研究或任何類型的後續活動。我們有很多很多合同尚未被稱為積壓，但它們目前正處於公用事業部門的審批隊列中。所以這是迄今為止的第一大阻力。

With regards to margins, I think the margin in this past quarter was a little bit optimistic, in that our public works division had a few projects that were a little bit slower. We actually thought the revenue for the quarter was going to be higher, but the public works projects are very large, and they come in at significant dollars of profit but lower margin numbers. So the ongoing margin profile is closer to the low 20%s.

關於利潤率，我認為上個季度的利潤率有點樂觀，因為我們的公共工程部門有一些項目進展稍慢。實際上，我們認為本季度的收入會更高，但公共工程項目非常龐大，而且利潤可觀，但利潤率較低。因此，當前的利潤率更接近 20% 的低水平。

Shifting over to resi, you talked about rightsizing the business. What do you think the right -- do you see a bottom yet in terms of growth? Do you see acceleration at some point around the corner? Or do you think you need to hunker down for a little bit of time here? When do you think you could start growing well again? Could it be in Q4, maybe in Q1 of next year? Or maybe the visibility is a little bit tough to figure out?

轉向 Resi，您談到了業務規模調整。您認為什麼是正確的——您認為增長已經見底了嗎？您是否在拐角處的某個時刻看到加速？或者你認為你需要在這裡蹲一會兒？您認為您什麼時候可以再次開始良好成長？可能是在第四季度，也許是明年第一季度？或者可見性可能有點難以弄清楚？

Yeah. I would say the biggest challenges we've had over the last six months have been where the sales are coming from. And we've had to make some decisions on where we're going to operate our warehouses and our installation activities based on changes in the origination markets.

是的。我想說，過去六個月我們遇到的最大挑戰是銷售的來源。我們必鬚根據原產地市場的變化，就我們將在哪裡經營我們的倉庫和我們的安裝活動做出一些決定。

So what you're seeing right now is, I think, a dip in our front end of our business because we are reevaluating where we operate. We are closing down a couple of our locations, have closed down a couple of our locations. And we're looking at new areas that might make more sense for us to move into, such as Florida or maybe the Northeast.

所以我認為你現在看到的是我們業務前端的下滑，因為我們正在重新評估我們的運營地點。我們正在關閉我們的幾個地點，已經關閉了我們的幾個地點。我們正在尋找可能更適合我們遷入的新地區，例如佛羅里達州或東北部。

So I think the key for us is to be deeper, meaning to sell more in those key markets that we're going to stay in, and then to look really hard at what key markets should we be in that we're not in. But the thesis for the residential group, especially for 2024, is still a growth thesis.

因此，我認為對我們來說關鍵是要更深入，這意味著在我們要留在的那些關鍵市場上銷售更多產品，然後認真研究我們應該進入哪些我們不進入的關鍵市場。但住宅組的論文，尤其是2024年的論文，仍然是增長論文。

Okay. And so on that thought, what kind of growth are you anticipating? I know you haven't provided official guidance. But just if you can broad sketch it for us, just directionally, are you thinking plus 5% growth or maybe plus 50% growth? Ballpark, what are we looking at?

好的。等等，你期望什麼樣的增長？我知道你還沒有提供官方指導。但如果你能為我們概括一下，只是方向性的，你是在考慮加 5% 的增長還是加 50% 的增長？棒球場，我們在看什麼？

Jason, do you want to take that? You've been a little bit closer to the forecasts.

傑森，你想接受這個嗎？您已經更接近預測了。

Sure. I think -- so we're always planning on following what the WoodMac is suggesting the growth rates will be. So I think we're still in the high single digits. I think we're still working through which markets we're going to be exiting in and which markets we may be pursuing over the next couple of quarters, so it's probably a little early to gauge that.

當然。我認為——所以我們總是計劃遵循 WoodMac 所建議的增長率。所以我認為我們仍然處於高個位數。我認為我們仍在研究我們將退出哪些市場以及我們可能在接下來的幾個季度進入哪些市場，因此現在判斷這一點可能還為時過早。

Our really focus is not necessarily on growth. It's about improving our gross margin and generating EBITDA as a business. And frankly, we think by shrinking in some of these markets that have weighed on margins, that's going to be more beneficial in the long run to the company.

我們真正關注的不一定是增長。這是為了提高我們的毛利率並產生 EBITDA 作為一項業務。坦率地說，我們認為，通過收縮一些對利潤率造成壓力的市場，從長遠來看，這將對公司更加有利。

Got it. Thanks, Jason. So given that thought there, what markets are you -- and sorry if I missed this earlier in the remarks -- but can you share which markets you might be deemphasizing and then which ones you might want to go deeper? And I think Gaylon just mentioned to me to the Southeast.

知道了。謝謝，傑森。因此，考慮到那裡的想法，你是什麼市場——很抱歉，如果我在前面的評論中錯過了這一點——但是你能分享一下你可能不重視哪些市場，然後你可能想深入哪些市場嗎？我想蓋隆剛剛向我提到了東南部。

And then finally, as it relates to capital and the balance sheet, I was wondering if you could talk through the plan for receivables and just cash in general. I think your receivables have ramped up a little bit to maybe 40 days in Q2, and that's compared with your prior levels in the 20 to 30 days. And so just wondering if you could comment on that working capital line item and then in terms of cash in general, overall. Thanks.

最後，由於它與資本和資產負債表有關，我想知道您是否可以談談應收賬款和一般現金的計劃。我認為你們的應收賬款在第二季度有所增加，可能達到 40 天，與你們之前 20 到 30 天的水平相比。因此，我想知道您是否可以對營運資金項目以及總體現金進行評論。謝謝。

Sure. I'll take the back half of that question first. So yes, AR has increased. A function of that is -- there's two elements to that that we're managing. One is we have more cash customers than we had in the past that has lend itself to slightly higher AR balances. And then also, we have the financing partners that we utilize.

當然。我先回答這個問題的後半部分。所以，是的，AR 有所增加。其中一個功能是——我們正在管理兩個要素。一是我們擁有比過去更多的現金客戶，這使得應收賬款餘額略高。此外，我們還有我們利用的融資合作夥伴。

Typically, our clawing back at faster rates on the funds, so we may have recorded revenue and finished completion, but where we're just waiting on PTOs in our markets, specifically California, and that's waiting on that PTO. And then for that funding back from the lenders is the reason why you see those AR balances rising.

通常情況下，我們會以更快的速度收回資金，因此我們可能已經記錄了收入並完成了完工，但我們只是在等待我們市場上的 PTO，特別是加利福尼亞州，而這就是在等待 PTO。然後，從貸方收回的資金就是你看到這些應收賬款餘額上升的原因。

So we think over time, as California begins to -- or the utilities in California begin to catch up on the submissions and the backlog there, we would expect to see some improvements in AR over time. Specifically in working capital, we are managing inventory levels almost on an adjustment time basis. Module availability is dramatically improved. Pricing has improved as well. So we'll continue to manage that fairly tightly.

因此，我們認為，隨著時間的推移，隨著加利福尼亞州開始，或者加利福尼亞州的公用事業公司開始趕上那裡的提交和積壓工作，我們預計隨著時間的推移，AR 會出現一些改進。特別是在營運資本方面，我們幾乎根據調整時間來管理庫存水平。模塊可用性顯著提高。定價也有所改善。因此，我們將繼續相當嚴格地管理這一點。

And really, again, the focus on cash is all about rightsizing the workforce, exiting the markets that we just can't be fully utilized in and have good leverage out of. So that's really our plan for the next quarter.

事實上，對現金的關注完全是為了調整勞動力規模，退出我們無法充分利用並具有良好槓桿作用的市場。這確實是我們下一季度的計劃。

Great. And the first part of the question was on which markets you guys might be deemphasizing and deepening in? Thanks.

偉大的。問題的第一部分是你們可能會淡化和深化哪些市場？謝謝。

I think, in general, there's a few markets in the south Southwest and then one in the Southeast we won't cover the exact markets, but that we're just not seeing the right amount of originations right now to support having facilities there. So I think that's probably the most that we'll share.

我認為，總的來說，西南南部有一些市場，東南部有一個市場，我們不會覆蓋確切的市場，但我們現在沒有看到足夠數量的來源來支持在那裡建立設施。所以我認為這可能是我們分享的最多內容。

Okay. Got it. I know I asked a lot here. Thanks for taking the questions, and I'll pass the line.

好的。知道了。我知道我在這裡問了很多。感謝您提出問題，我會掛斷電話。

Thanks, Phil.

謝謝，菲爾。

Donovan Schafer, Northland Capital Markets.

多諾萬·謝弗 (Donovan Schafer)，北國資本市場。

Hey, guys. Thanks for taking the questions. I want to ask first on originations. With having your own direct channel and then with third-party channel, it gives you a maybe more comprehensive view on what's happening with consumers. And so I'm curious, from that, if you can give any color on what's -- if the lower originations, is that more fewer leads coming in at the top of the funnel?

大家好。感謝您提出問題。我想先問一下起源。通過擁有自己的直接渠道和第三方渠道，它可以讓您更全面地了解消費者的情況。所以我很好奇，如果你能給出任何顏色——如果來源越低，進入漏斗頂部的線索是否就越少？

Or is this -- are you getting lower reduced close rates maybe because you get the leads in still, but then when you put together the comparing what pricing you can offer them on a monthly basis versus if they pay, maybe it doesn't pencil out as well? So it ends up being a drop off in the close rate. Does it equal contribution from both? Just kind of curious for some more color there.

或者是這樣——你是否會降低成交率，也許是因為你仍然獲得了領先優勢，但是當你將每月可以向他們提供的價格與他們支付的價格進行比較時，也許它不會鉛筆也出來了？所以最終成交率會下降。兩者的貢獻相等嗎？只是有點好奇那裡有更多的顏色。

I'll start this. Hi, Donovan. I would say that, in general, we have seen originations decline post NEM 3.0. We had -- many of our partners were repositioning into other markets. There's also changing sale dynamics of how you talk to customers; you're maybe selling a PPA product or prior ownership product versus a loan. And then the economics certainly are still beneficial over time in California, but it have deteriorated relative to NEM 2.0.

我就開始這個吧嗨，多諾萬。我想說的是，總的來說，我們看到 NEM 3.0 之後的起源有所下降。我們的許多合作夥伴正在重新定位到其他市場。與客戶交談的方式也會改變銷售動態；您可能正在銷售購電協議產品或優先所有權產品而不是貸款。隨著時間的推移，加州的經濟效益肯定仍然是有利的，但相對於 NEM 2.0 來說，它已經惡化了。

So I think a lot of this is a transition. And so in general, we've seen a slowdown. So I think there's just many factors to answer as part of answering that question.

所以我認為這很大程度上是一個轉變。總的來說，我們看到了經濟放緩。所以我認為在回答這個問題時需要回答很多因素。

Okay. And then for permitting or getting to the process of utilities in California, this seems to be a pretty important issue, and you talked about thinking the second half of the year is going to be stronger than the first half.

好的。然後，對於允許或進入加利福尼亞州的公用事業程序而言，這似乎是一個非常重要的問題，您談到認為下半年會比上半年更強。

So I'm wondering, now we're about halfway into the third quarter, is there any -- and you guys talked about the delays are getting as wide as four months, are we still around four months? Or have you begun to see an improvement in that utility-permitting aspect? Where do we sit now in the middle of the third quarter?

所以我想知道，現在第三季度已經過半了，你們談到延遲時間已經長達四個月了，我們還有四個月左右的時間嗎？或者您是否開始看到公用事業許可方面的改進？第三季度中期我們現在處於什麼位置？

So we're at four months today. So when I look at the utility approvals that are coming in, they're coming in from the date of the transition to NEM 3.0. So there was just a massive in surge originations and applications that came in just leading up to the deadline.

所以今天我們四個月了。因此，當我查看即將收到的公用事業批准時，它們是從過渡到 NEM 3.0 之日起獲得的。因此，在截止日期之前，出現了大量激增的申請和申請。

And we believe they're working through those last submissions, so we've probably we probably crested at this point. And we've gradually -- at some point, they've worked through all these applications, and we start to see timelines begin to normalize. We just haven't seen that gap, but we expect it to happen during Q3.

我們相信他們正在處理最後提交的內容，所以我們可能已經達到了這一點。我們已經逐漸地——在某個時候，他們已經完成了所有這些應用程序，我們開始看到時間表開始正常化。我們只是還沒有看到這種差距，但我們預計它會在第三季度發生。

And then if I could get another question. So it did catch my attention in the release and then in the prepared remarks, referencing IPPs as potential customers on the C&I side of business. Correct me if I'm wrong, but I believe -- or that would be news to me -- I don't believe, in the past, you've done projects that would reach that scale of what we typically think of as an IPP.

然後我可以再問一個問題嗎？因此，它確實在新聞稿和準備好的評論中引起了我的注意，將 IPP 稱為 C&I 業務方面的潛在客戶。如果我錯了，請糾正我，但我相信——或者這對我來說是新聞——我不相信，在過去，你所做的項目會達到我們通常認為的規模獨立發電計劃。

So is this a new avenue that you guys are pursuing, and I guess, what size projects would that get you up to? Does this involve a step change for you or you could become involved in 100-megawatt projects and the like? Just very interesting development there, so if you can give any additional color, that would be great.

那麼，這是你們正在追求的新途徑嗎？我想，這會讓你們從事什麼規模的項目？這對您來說是否會帶來重大改變，或者您可能會參與 100 兆瓦項目等？那裡的發展非常有趣，所以如果你能提供任何額外的顏色，那就太好了。

So over the last six months, we've made some significant changes in the direct sales team on the commercial side, the folks on the commercial side that sell for us. And some of the newer people that we brought on board have some really strong relationships with developers and IPPs, and we are certainly quoting projects now that are larger than we've looked at consistently in the past.

因此，在過去的六個月中，我們對商業方面的直銷團隊（為我們銷售的商業方面的人員）做出了一些重大改變。我們引入的一些新人與開發商和 IPP 有著非常牢固的關係，而且我們現在引用的項目肯定比我們過去一直關注的項目還要大。

I would say we're not really in the double-digit megawatt category yet, but 5-, 6-, 7-megawatt projects are certainly projects that we're looking at and evaluating. We could certainly go a little bit larger than that. But beyond that, there becomes all kinds of debonding concerns and other issues that would be a little bit more challenging for us.

我想說，我們還沒有真正進入兩位數兆瓦類別，但 5、6、7 兆瓦項目肯定是我們正在研究和評估的項目。我們當然可以做得更大一些。但除此之外，還會出現各種脫粘問題和其他問題，這對我們來說更具挑戰性。

Okay, that's helpful. Great. Well, thanks, guys. I'll take the rest of my questions offline.

好的，這很有幫助。偉大的。嗯，謝謝，伙計們。剩下的問題我會離線回答。

Thanks.

謝謝。

Thank you, Donovan.

謝謝你，多諾萬。

We have reached the end of our question-and-answer session. I would like to turn the conference back over to Gaylon for closing comments.

我們的問答環節已經結束。我想將會議轉回給蓋隆徵求結束意見。

Thank you. Once again, thank you for joining our call. Should you have any questions, please feel free to contact us at ir@sunworks.com, and a member of our team will follow up with you.

謝謝。再次感謝您加入我們的通話。如果您有任何疑問，請隨時通過 ir@sunworks.com 與我們聯繫，我們團隊的成員將與您聯繫。

This concludes our call today. You may now disconnect. Thank you.

我們今天的電話會議到此結束。您現在可以斷開連接。謝謝。