Higher Interest Rates, Residential Solar Economics in California Dampen Sunworks Second Quarter, Stock Falls

Sunworks, Inc SUNW reported a second-quarter FY23 revenue decline of 4.8% year-on-year to $34.64 million, missing the consensus of $43.60 million. 

EPS loss of $(0.34) missed the consensus loss of $(0.16).

Residential Solar segment revenue of $27.2 million, down by 16.3% Y/Y. Commercial Solar Energy segment revenue totaled $7.4 million, up 91.7% Y/Y.

Total backlog stood at $84.1 million, down by 13.1% Y/Y.

Gross profit of $11.44 million declined from $16.59 million a year ago. Adjusted EBITDA loss was $(9.9) million versus $(5.7) million last year.

Sunworks held $4.6 million in cash and equivalents.

Gaylon Morris, Chief Executive Officer of Sunworks said, "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 new 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," continued Morris. 

Price Action: SUNW shares traded lower by 4.74% at $1.11 on the last check Monday.

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