SunPower Inc. (SPWR) Earnings Call Transcript

Hello. Welcome, everyone, to SunPower's second quarter earnings call. My name is Sioban Hickie, SunPower's VP of IR, and I would like to review a few housekeeping items before we begin. All lines have been placed on mute at this time. This call is being recorded, and a replay will be made available within the Events section of the SunPower website. Please note that today's presentation may contain projections and other forward-looking statements. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in our statements. In addition, we may discuss certain non-GAAP and financial measures. A reconciliation of any differences between those non-GAAP financial measures and the most directly comparable GAAP financial measures are available within our press release. Lastly, we will hold a question-and-answer session after the end of formal remarks today. For those watching via the webcast, you may submit a written question at any time via the submission box located on the right side of your screen. For those joining our live Q&A, please click the raise hand icon located at the bottom of your screen to enter the queue. With that, I will turn the call over to T.J. Rodgers, SunPower's Chairman and CEO.

Good morning. My name is T.J. Rodgers. I'm the CEO of SunPower. We're here to report the second quarter. I have people who present various parts of this meeting, so I will introduce them real time. Starting with Tom Kowalczuk, who is our new CFO. He's got a CPA and a Chicago MBA. He's had experience in public companies, and he's gone here, Beam Suntory and he led a finance group there with $2 billion in annual revenue. So he's got the experience in public and big company. This is his first shot at being a CFO of a public company. He's going to present the financials today. Tom?

Thank you, T.J. I'm very excited to join SunPower at -- this opportunity to be a leader at the group at this very important time. Over the last few weeks, I have been focused on getting to know the business, our operations, our finance organization as well as meeting the talented people across the company. While I'm still early in the process, I've been encouraged by what I've seen and the team's commitment to improving execution. And going forward, my priorities are pretty straightforward, maintaining strong financial discipline, improving the quality of our forecasting and financial processes as well as allocating capital thoughtfully and ensuring we provide investors with clear, timely and consistent financial information. I look forward to partnering with T.J. and the rest of the leadership team as we execute our strategy and work to create long-term value for shareholders.

So I've asked Tom to -- this is the report we issued this morning. I've asked him to go through the financials with you. There's GAAP and non-GAAP. We focus on non-GAAP. That's how we've reported all of our quarters so far. Tom?

Yes. So our non-GAAP revenue is down from $73,000 -- sorry, $73 million down to $56 million, which had a direct impact on our gross margin and gross profit, down from 46.9% to 27.6%. That's a direct result of our fall-through on variable COGS and revenue. However, we did offset much of that through improved operating expenses, which is down about $19.7 million, of which $7.1 million approximately is fixed overheads that we cut out of the business during the quarter and is expected to carry into the future. Our operating income is slightly improved which is a combination of our [indiscernible] through because of the change in revenue as well as the improvement in cost cutting that we did during the quarter. So net-net, we're better than the previous quarter on operating income, non-GAAP, by about $400,000.

So from my perspective, we need to explain a disaster revenue quarter today, and that will be my job today. The good news, if there is any, is that we had a huge drop in revenue but maintained. Didn't change the profit. It went from bad to staying bad. And that was because we have done structural cost cutting of $31 million minus $24 million, $7 million and I'll talk about that future [indiscernible] for structural cost cutting later as well. I took this shot at 7:17 this morning, my time. And the word is, you didn't like it. I don't like it either. It's not good performance. And if you look at the company, basically, we're 6 quarters old, and we've been at $1.5, plus or minus $0.5 forever in the last 2 quarters have been bad back to back. That, of course, is bad and bad that we just talked about, and that's impacted our share price. So I'm going to talk about why that happened, what we're going to do about it in detail. Next is Dan McCranie. He's a Board member. He's become active, working on marketing and sales. He is a storied silicon valley figure. He's been on 10 NASDAQ boards, and this includes the 2 halves of Motorola when they split apart, important companies. I knew him because he spent about a decade at Cypress. He's been a CEO and his forte is marketing and sales. Dan?

Thanks, T.J. Okay. What you're looking at here is total bookings with the corporations from Q4 2024 through our most recent quarter, Q2 2026, measured in terms of jobs. This is all SunPower, which includes our residential work as well as our new homework as well as our commercial work. So what you see in there is an aggregate of all 3 of our business units going forward. As you can see from Q4 2025, Q1 2026 and Q2 2026, we've had strong increase in bookings. This bookings increase is now 9 straight months generally across the board. As a result of that, going forward into this quarter, you'll see in our projections for revenue, which is largely based on how much of the bookings we're able to get through to the factory installed and revenued. That's going to be the challenge. The primary challenge for Q3 is getting these bookings revenues through installation. One more point on that. You noticed in Q1 2026, we were at 4,166 jobs. And in Q2, 2026, that number dropped to 3,655, still the third highest in the 6-quarter -- or 7-quarter period, but I wanted to point out that the transactional short-term bookings, which is the bookings for solar, actually increased in Q2. What dropped is our long-term new homes bookings, which we don't really see revenue for 5 to 6 to 7 quarters. My point of that is for an opportunity -- for short-term opportunity, the sales force continues to book the short-term opportunities residential that allow us to have a good Q4. Finally, we are about -- it takes us about 8 weeks approximately to convert our jobs to revenue in residential. So therefore, the sales force right now is predominantly working on the Q4 bookings to ensure we have a robust Q4. So that's where we stand. Three strong quarterly bookings. If you talk about the transactional bookings of residential only, we've had 3 record bookings.

So we're talking about a lot of bad news today, but I do want to point out that what we've been talking about is good times ahead of us because of bookings, and that's still true, so I wanted to bring up that slide early. This is a picture of our headcount and sales [indiscernible].

So this one is our total 1099 sales [indiscernible] broken out by SunPower, it's under the acquisition we did back in September 2025 and via the acquisition we did in October 2025, PowerLight, which was a small acquisition we did in Q1 of 2026. We are holding our 1099 head count reasonably at about 1,500. We've made geographic changes in that headcount. We are now moving into the higher opportunity states such as the -- especially for TPO, that would be, of course, Texas and California and places like Pennsylvania and Virginia. So we've redeployed our 1,500 1099 to maximize bookings, and that's what you're seeing right now. So we're to a first order, we're about flat with our 1099s at a very robust 1,500 but we've moved them around to areas where there is currently high opportunity for immediate bookings.

The main point here is that old SunPower by that, I mean, the SunPower that went bankrupt, had a large sales force. But when they went bankrupt, that sales force started to [indiscernible]. And we worked very hard to maintain a -- actually a higher -- bigger sales force in 1099s. I thought I talk about myself today and show my picture, this is back when I was in high school. And I thought about it because I just saw a movie called Young Washington. And it was a good movie, although the critics -- because it was about an American hero, they didn't like it. And there is a classic line in it, in 1755, George Washington got his [indiscernible] kicked in Ohio by the French and Indians in the French and Indian war. And he was the head of the militia -- the Virginia militia. And he came back and talked about the problem he had, they burned his fort, they killed a lot of his people. He really lost. And he signed a peace treaty that was written in French that was misled to -- he was misled by what it said. And it had -- it was a bad contract, let me call it that. And when he's making excuse to the governor of Virginia, which was his boss, the guy was -- as he was making excuses, the guy was waving his arms like this -- the guy's name is Dinwiddie. And he said, the line of the movie, I thought was great, to lead is to forfeit the rights to make excuses. So that's where I am this morning. I can bitch about this or that and this didn't happen, and that didn't happen and then, of course, the rebuttal would be, well, great, why didn't you not fire the guy before he screwed stuff up? So I want to make it clear right now. I run the company. This is my problem. I graduated -- so who am I? I graduated from Dartmouth in 1970. I was second in my class. I was 8 years on the Board of Directors, the Board of Trustees of Dartmouth. I went to Stanford. I got my Ph.D. there. I'm a Moore's Law guy, silicon guy. I worked for 2 chip companies, American Microsystems, where I learned how to do engineering and R&D in Advanced Micro Devices run by the fable [ Jerry Sanders ] where I won't say that I learned about sales, but I did come to appreciate the value of sales. Dan and I both worked at that company at one time. I, then for my [indiscernible] career, founded a chip company, Cypress Semiconductor. We IPO-ed 37 months from our funding, including building a fab. We went public at $770 million valuation in today's dollars. In 2020, we sold the -- after I left and retired the company was sold for $10 billion. After that, I worked on the Enphase, turnaround Enphase, it's worth $5 billion today. So how am I related to SunPower? I've written checks literally for $111 million. I hold outright 32.7 million shares, and I hold debt equivalent to another 26.5 million shares. So I'm looking at like 39% ownership if I converted my debt, which I don't want to because its income for me. I have no shares that I've earned because of my position getting paid with stock and my salary is 0. So point is making that number better is all I work for. If you think about economic motivation, obviously, I want this company to succeed. I have to remind you that we're in a good time for solar. And when you have [indiscernible] of tower over everything else, it's difficult to see through it to see the good time. This is a graph of the Energy Information Agency of the United States. It talks by area of the United States and averages for the United States of solar penetration rates, meaning in 2024, only 5.6% of the houses in the United States were qualified, rich enough, right area, right ZIP code, good laws in the state, meaning 95% of the homes did not have solar, that could have had solar. This number has been updated recently. The 2026 update is 7%, up from 5.6% so the 7%, therefor 4.93%. And there's a forecast by the same [indiscernible] that it will be 30% in 2030. I think that's a little bit aggressive. But the point is even in 2030, 70% of the market will be unsatisfied and we'll be wanting solar. And by 2030, that's 4 years, you take a 10% raise per year, take 1.10 raise it to the fourth power, and you've got the cost of power that people are going to have to be going up by 50%. Meanwhile, the cost to install solar is flat to down and has been if you look at a 4-year rolling average forever. What that means is solar energy is #1 in addition to our portfolio of energy generation. So here, I show gigawatts. If you want to calibrate that, this is a added solar -- additions. If you want to visualize gigawatt, think about a nuclear plant and think about that giant dome, and there's usually 2 of them, each of them are worth a gigawatt. That's a cooling tower or a plant. So 70 gigawatts is a lot of power that was added -- 35 nuclear plants equivalent. You can see natural gas is fading. I don't necessarily agree with that, but that's what's happened. And wind and solar are growing. Solar you can see here in the bottom is growing the fastest. And you really can comp battery storage as part of the wind and solar phenomenon because you have to store the energy when the wind is blowing or when the sun is out. So this is also renewable. So bottom line, we're having a renewable transition like it or not, debated. This is where the market is. And I frankly, think it's right. I think the fact that you can buy solar panel for $100 and get 500 watts of power out of it when the sun is shining, it's a big deal. The thing that people have talked about and they don't realize is there's 2 kinds of payback, energy payback, which is 7-ish years for buying and installing solar system. And then there's -- that's financial payback story. And then there's energy payback. And energy is, do you ever get the energy back, you get from melting glass and purifying aluminum, from the panel. And the answer is the energy payback time is about a year. That is the panel will produce more energy than it took to produce it. So the fundamentals are all there, and they're all lined up. This is from Ohm Analytics. Ohm is sort of the go-to data source. I'll just make 2 points here. [indiscernible] pricing trends and of course, they look at the pipeline and you can see us flat. So there is no big crash coming in solar pricing. The reason for it is the government subsidy is gone. I was happy about that. And as a matter of fact, there will be a short-term slightly upward trend because of that. Second one, and this is a bad one, this is monthly residential [indiscernible]. So here we have by month going up to May of this year. This little peak back here is safe harbor. This is where everybody is buying and installing [indiscernible] bolt in order to guarantee that they would get ITC credit. And then after they that got done, then we went into the current new [indiscernible] with lower funding, 30% gone. So the reality is, if you eyeball list, 25,000 installs has gone to, let's say, 15,000. And this is what we're dealing with in the solar industry. We've got a significant fraction, I think 1/3 to half of our companies have gone out of business because there's a lower volume at the very same time. There's the lower volume and the tax credit is gone. So the double whammy is pretty much on employing a lot of people. Okay. So we've responded to that with $13 million in cost reductions. After Q1 '26, the first of the back-to-back bad quarters, we did a RIF. We implemented a 4-day work week. The reason for this is we knew coming up to needing those people, therefore, laying them off and bringing them back was not proper. So we did -- went to a 4-day week to keep the people, have the least layoffs, and we also did some structured cost cutting. That was $7.1 million that Tom showed you on the first slide. This quarter, we're going to do another $5.9 million, and it will be focused mostly on management where we have new homes and cobalts and we have 2 sets of managers, and we will rationalize that. And that now reports to John Bergh, who's going to address you later. So have we -- are we fat? And the answer is, no, we're not. We never have been. This is a graph of our headcount. When I took the thing over in Q4, I inherited 3,500 candidates to work there. We said we need -- we can only deal with 1/3 of them and then we lowered this over time as we learned how to run with leaner team. Right now, we're at -- we're targeting 700, we were about 710. So we have a lean company. And if you went into our place, you would see people working their [indiscernible] off. Last weekend, weekend before that, 64 people worked over time so -- which is efficient for the corporation. It's good for them, especially on a 4-day work. Okay. So the cost reductions, $13 million described the 2 components of that last quarter and this quarter. I'd now like to start talking about the overriding thing for us, the technology and capability, let me call it the architectural capability, engineering capability we have which will drive us forward with better pricing. So I'd like to introduce Surinder Bedi. He is nominally our EV of quality, but we can't afford to have VPs, including me, my wife and I typed the words in this report. We can't afford to have single-purpose expensive people. So in addition to working on quality, he looks at future engineering. He's an expert on panels and I have asked him to describe highly awarded work in Intel and Applied Materials. Silicon Valley guy, he has his own patents. I've asked him to describe our new panels and why they make a difference. Surinder, you're up.

Thank you, T.J.

By the way, this is -- we call the panel, our trade name is Monolith. This is a picture of a billboard on a major freeway in Salt Lake City when we announced that we had the Monolith.

Thank you, T.J. So what I'll be talking about the SunPower REC JDA technology partnership, which we have engaged in the last few months, and that has really provided us huge dividends in terms of developing a high-voltage heterojunction technology product, which is 470-watt panel. And it's got a unique technology in terms of hybrid technology, where we allow the silicon, the anti-silicon wafer and it is being sandwiched between the amorphous silicon. And at the same time, it's got a very strong superior preservation. This technology allows us to be one of the best technologies in the market today, especially for the bifacial gains, and I'll talk about that in a minute as well. So the Monolith 470-watt panel through this JDA technology partnership, where the 2 companies, REC and SunPower, with their innovation have come together and we have launched, during Q1, this particular product line. It has been commercialized right now for residential, for light commercial for various applications today. And our intention is to expand this business throughout this year. It's also got a very unique feature. I want to take a minute to talk about that. The module efficiency is pretty good, 22.6%, which allows us to have a huge power density advantage in terms of the watts per meter square. It's got the advantage of temperature coefficient. It's got the low-light enhanced performance, both morning, evening, cloudy and so on with a low degradation and huge warranty advantage as well. So putting this together, all the different technology advantages from a heterojunction technology using the end type cell, we got the most powerful 470-watt panel today in the market, and we are proud of that. Moving forward, we are already developing in parallel. We have done some engineering work. We have some engineering samples built, and that is, we call it, Monolith 2 Bifacial, which is coming soon. Here, the advantage we are bringing is that we are taking double glass structure to ensure that we have the bifacial advantage. So this allows us to improve our module efficiency. At the same time, it allows us to make the panel with the performance improvement, the boost we have, taking it another higher level to 494 to 528 watt panel. It still remains the same lightweight 50 pounds, very sleek panel with the 2.0 meter square area and the glass has been reduced, but it has been doubled, we call it double glass, both on the front side and the rear side, and that allows us to have the power density advantage. And you can see we are -- have an objective to demonstrate the advantage on both the residential application as well as in the commercial side. By having a double glass product, you have a much more reliable product because you don't have a plastic layer behind, which we call it backside -- and because you have a double glass, it allows you to have a stronger structure to handle all the different environmental condition as well as on the fire resistance side. The warranty has also improved from 25 to 30 years. And we believe by having this combination of technology advantages, along with bifacial advantage, you have basically a designed in a best-in-class product line with a high output over lifetime, and that gives us a huge advantage in terms of cost per kilowatt hours, transforming the innovation into customer value. So this is the quick snapshot of what we have developed.

So now that you -- business students in the audience have gotten your notes, I like to just make a couple of points. This has made a difference for us. All Chinese cells up to about a year ago were [indiscernible] moved 3x lower than electrons. This is a big deal. We've always been, since 1985, [indiscernible] in-type silicon, way ahead, that gives us superior efficiency, is temperature coefficient, 0.24% per degree centigrade. So that's 24% per 100-degree centigrade. So if you're on a roof and you're cooking at 100 degrees centigrade, your panels become 24% less efficient. That's bad, but it's half of what the P-type cell has. That's why that's there. The 50 pounds is there because [ OSHA ] won't let you use one person to install a panel, unless you're under 50 pounds. And that's an ironclad rule, you don't screw around with OSHA. That glass is pretty thin already. This -- there are layers. They are like 13 layers in this panel. These guys, REC, are really good. And they're world-class, one of the top 2 or 3 in the world, and they're world-class/not Chinese, which is exactly what we need. And they work on getting low light to produce energy. So you get kilowatt hours in the morning and in the night you really don't talk about when you -- when a salesman is trying to sell your solar, but you get kilowatt hours [indiscernible] for free. The next one is the [ degradation ]. Panels, as they cook in the sun over the years, degrade. These panels are exemplary. In 25 years, they still produce 92.5% of the energy they did when they were brand new. And that's almost double other kinds of panels. So if you combine low light every day and a degradation curve that's almost not there, you get high lifetime kilowatt hours. And this is what -- if you look at the economics of a panel, that's all you get, you get a kilowatt hour for free from your panel or from the depreciation of the costs you paid for the panel, and you don't have to buy it from a utility. Currently, in California, that's looking like $0.20, and it's going up at a rapid rate. And right now, panels used to be flaky. They're now solid for 25 years. And even at 25 years, there's still almost brand new. So that's just one bifacial, think this panel, think the next generation of it, put glass on the front and back. You're not talking about glass that is the thickness of a match -- wouldn't match -- and it's got to work, and it's got to work for 30 years. And we've already got our first samples to this one. By the way, bifacial technology is what the utilities use. They don't even use the standard residential technology. The problem is, if you take that thick glass and put it on a panel, you're looking at 70 or 80 pounds here. So these are panels that are put in place by robots in the field by utilities and they're not really available to residential. So the name of our game is how many watts and now we're going to be over 500, can you get from 50 pounds. That's really the game. Okay. Next is John Bergh. John bought Cobalt Power Systems and is the CEO of it. He has worked for the Korean company, Qcells, which is probably the only other major manufacturer, a non-Chinese manufacturer, that is in the same class as REC. And he sells systems. So he talks about those little advantages that were on the last slide that are kind of hitting an amazing numbers. So I've asked John to talk about -- he has -- he lives in Silicon Valley. He thinks Silicon Valley. We talk Silicon Valley, not sales and -- I got graphs that the first graph is knocks -- how many doors did you knock on? We knock on 65,000 doors a week. So you got to talk about that the cell -- but you've got to talk about technology to sell and get a better ASP. So I'm going to let John talk about the technology of design and engineering he's brought to the company.

Thank you, T.J. What you're looking at here is the very first Monolith installation. So this is on the historic pleasure point plunge pool. It was a club in -- by Santa Cruz, right off the coast of Santa Cruz, by Pleasure Point. The homeowner there, his name is Mike, he actually had a previous solar panel system spec. And when the Monolith came out, I called them up and I said, hey, Mike, do you want to look at this new technology, it's called Monolith. We can fit it on the best part of your roof and maximize the kilowatts on your roof, so that you have some space around it. Now it's a little bit more expensive but you're going to get a more levelized cost of energy. The system is going to wake up earlier each morning and it's going to turn off later on and go to sleep later on each night, providing you more power every day. So even though it's a little bit more upfront cost, you're actually going to get more power over time and that results in about a 7% or 8% increase in ROI. Mike was like, well, what do they look like? And I said, well, they look sleek, they're all black. There's no white contact points or anything like that. That's why they call it the Monolith. And he said, sure. And so we installed that. And he's very happy. He sends me photo -- crops of his system production and it's meeting and exceeding what our forecasts were. What you're looking at here is the Santa Clara project. So this is the third project we've done for Santa Clara University. And you're looking at about a 1.2 megawatt installation that generates over 2.1 million kilowatt hours annually. And the estimated savings per year for the university is about $350,000. We did an integrated solar superstructure on the north parking garage. And we did elevated carports here at [indiscernible] parking lot and a rooftop array at the Athletic Excellence Center. It's these types of installations and these high-quality premium modules that set SunPower part and what we continue to look as a forward-looking commercial outlook what we're going to be deploying to universities, data centers, other things across the country as we start to expand our market share.

A comment on the structure of carport. Okay. Down here, you've got people parking their car. This is in a university. Here, you've got a roof which replaces a normal roof. It's not on the roof, like residential, you put panels on a roof that already exists. You got to make sure the roof is structural. You may have to do work to begin with before you put them on. In this case, the roof is panels. All you have is a framework below it, which is economical. And what happens is the rays come down, they get the panel in 1,000 watts per square meter, 20% of that goes into the panels and turns in electricity and doesn't go down in [indiscernible]. Asphalt heat your car up to 120 degrees Fahrenheit and all those stuff. So this is an important use of solar in large quantities.

So what you're looking at here, this is the waterfront building in San Francisco. You can see it's right there by the [indiscernible] in downtown. This project demonstrates not only do we use high-efficiency modules. It's about 0.25 megawatt. But we used about 554 high-efficiency solar modules for this project. One of the key engineering points is that this is a post-tension concrete roof construction. And so we had to use LiDAR graphing and infrared readings to find the structural points for seismic installation. And what you're looking at here is a floating array and I'll let T.J. talk about this a little bit, but this is pretty bifacial Monolith. So if you look at what we're able to do when we get the Monolith bifacial out, we'll actually be able to garner more wattage from the same rooftop. T.J.?

Yes. The -- so these pads spread out the weight, the weight goes on a frame. This is not the standard way of doing it because this roof is not a new building and it's high tech. And what that means is they stretch the rods and then they pour the concrete and the concrete dry around the stretch [indiscernible]. So it's [ tensile ] concrete, much stronger and -- a different concrete, it's much stronger. So this roof is way thinner, way easier to support than a normal roof. But the problem you've got is if you put too much pressure on a given area, you can punch through that roof. So this thing was built in order to float on these pads. Now the accident here is now you can visualize what a bifacial panel does. If I glass on the front side and glass on the backside. And this has already painted a pretty good reflective white. I'll get light to go through here. I may put more area between another stripe to let in sunlight through the rows. But typically, this will take a 470-watt panel and the backside will take it up over 500 watts. This is Monolith 2, what we are talking about.

Great. And what you're looking at here, this is 1 of the 26 of the greener stores program. This is in conjunction with our partnership with SunPower -- or excuse me, with Starbucks. And we recently completed the Millennium project as well. And these are essentially carport structures, and they're built in the Palm Desert of California. And you can see it gets a lot of energy and light from both the top and bottom. This is the Millennium solar project here. And this is about 997 kilowatts, so just under a megawatt of power. And we recently completed this, and it's a beautiful installation, whereas before, it was just an empty parking lot producing no power, now produces power for the buildings around it and also provide shade for the cars underneath. So it's a really good synergy there. And actually, Surinder had spoke with and done an NPS rating with the customer. And I don't know, Surinder, if you want to mention the NPS rating?

Sure. So NPS basically is Net Promoter Score, which measures the customers' confidence and the trust with SunPower and their willingness to allow us to be a reference point for future customers as well. So they recommend us to other customers as well. So we have been working with this customer for almost a year now, and the work has been done so beautifully, the architecture, the engineering, the procurement, the entire energy performance over this side. And then we spoke -- we talked with your team, the customer team, with your president and about their experience on SunPower on 5 set of questions, and they gave us a very good score. The overall score was 90%, which is one of the best-in-class score. So we are happy and the customer is extremely happy and they would like to do more business with us.

Thank you, Surinder. Yes. At SunPower, as we continue to execute complex high-value commercial projects that demonstrate our engineering capability and expertise, we're really driving premium quality to the marketplace and giving people a legitimate option to go with that. These milestones with the Millennium project, Santa Clara University, the Waterfront buildings in San Francisco and most recently, the Los Altos Golf & Country Club really demonstrate our ability to execute at a high level. Our commercial pipeline continues to expand. We have next-generation opportunities coming up, one of which is our first AI data center in Reno, Nevada that we're going to begin construction on next month. We're really, really excited about that. And backed by heritage, dated in 1985 here in Silicon Valley, SunPower remains committed to quality standards that exceed industry norms and premium technology solutions that position us for continued growth and a very strong commercial and residential outlook. Thank you.

Okay. So this is what we've already shown you and why we're happy about the future. So then what does that turn in the numbers you can hold us accountable to? In this quarter, we expect to grow revenue to $75 million or more and we expect to reduce our operating loss, which was a -- can't use any other word than ugly $12.5 million to less than $1 million. I was tempted to say breakeven here and there's a possibility for that. But I don't want to come back next quarter and we make any excuses why we didn't make the numbers. So those are the numbers. I had a 3-hour meeting yesterday with the executive staff, and we went over line by line and group by group. These are the numbers the executive team is committed to. Okay. To conclude, we've changed our company. We've cut millions of dollars, state-of-the-art Monolith and Monolith 2 panels as well as the high-tech high-margin installations by our new homes Cobalt division, we will move into the premium segment of the solar market [indiscernible] by sustainable technology advantages and bring premium pricing to a very lean company. The company is lean, and it has to be lean because most of our sales now are consumer and you compete on price. So what we need is a slice of our business where we compete on energy generation, efficiency, aesthetics and architecture. And that's our strategy. So we changed -- due to these quarters, we changed significantly, a $13 million change in cost is nontrivial, and the people back at home feel that. And this is -- this has always been our plan, and we just want to tell you it hasn't changed due to a surprise in Q2. We're panels -- we had the orders for putting the line, didn't ship on time. They were late. And that hit us for revenue that looks like we just screwed up, didn't have the orders or whatever, it's not really true. Okay. Questions?

[Operator Instructions] Our first question today comes from Gus Richard from Northland.

Yes. Just in terms of execution in the third quarter, there's air quality issues around the country, there's heat waves. There's a tight labor market. Do you anticipate or see any obstacles to getting jobs done in the coming quarter?

That's a great question, and I haven't got our operations people here to answer it. But yes, we're -- there's all kinds of headwinds in our industry. And that's why when we promised yesterday, we picked the number we thought we could make given those problems. So yes, there are in the $75 million number, not a great number, in my opinion, but it's what we thought we could do given the headwinds we're seeing in the market right now.