Maxeon Solar posts large Q3 loss, settles SunPower dispute

Maxeon Solar Technologies Ltd (NASDAQ:MAXN) reported an attributable net loss of USD 108 million (EUR 99.5m) for the third quarter of fiscal 2022/23, a period in which the company’s financial performance was affected by a dispute with residential solar company SunPower Corp (NASDAQ:SPWR) that has now been settled.

As previously announced, the Singapore-based solar panel supplier suspended shipments to SunPower, its largest distributed generation (DG) customer in the US, in July because the latter had fallen behind on payments. On Wednesday, the two companies unveiled an amendment to their supply agreement, which puts an end to their dispute.

The new deal calls for Maxeon to supply modules to SunPower through February 2024, while the customer maintains its exclusive right to distribute M-Series products in the US until March 31, 2024. At the same time, Maxeon will be released from non-circumvention obligations with respect to SunPower dealers. In addition to that, it will get warrants to buy SunPower common stock in a private placement.

Maxeon CEO Bill Mulligan gave further details when announcing the company’s fiscal third-quarter results. According to him, SunPower will purchase 85 MW of IBC panels at contracted pricing through February 2024 and will post a USD-30-million payment security bond.

“Under the settlement terms, both existing supply agreements with SunPower will be terminated. The settlement also contemplates Maxeon receiving a warrant to purchase 1.7 million shares of SunPower's common stock, resolves outstanding claims and contract breaches, and ends constraints on Maxeon product sales to SunPower installers at the end of this quarter, clearing the way for Maxeon to aggressively ramp sales into the US market by leveraging its acquisition of Solaria Corporation and accelerated ramp plans for Maxeon 7 capacity," Mulligan stated.

As per Maxeon’s actual financial performance in the three months ended October 1, 2023, the company posted a revenue of USD 227.6 million with quarterly shipments of 628 MW. This is in line with the reduced guidance from October when Maxeon said it expected revenue of USD 224 million-229 million with shipments of 622 MW-632 MW. The company turned to a gross profit from a gross loss in the same period of 2022 but could not escape a more than doubling of its attributable net loss. More details are available in the following table.

In the same announcement, Maxeon revised its annual forecast to reflect the near-term softening of residential demand, the SunPower settlement and the challenging market conditions which Maxeon expects to continue to face through the fourth quarter. The two forecasts are available below.

(USD 1.0 = EUR 0.921)

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