SPI Energy Co., Ltd. (NASDAQ:SPI) Q2 2023 Earnings Conference Call August 22, 2023 4:30 PM ET

Company Participants

Denton Peng - Chairman and Chief Executive Officer

Hoong Khoeng Cheong - Chief Operating Officer

Janet Jie Chan - Chief Financial Officer

Conference Call Participants

Tate Sullivan - Maxim Group

Operator

Good afternoon, and welcome to SPI Energy's Second Quarter 2023 Conference Call. As a reminder, this call is being recorded and all participants are in a listen-only mode. [Operator Instructions]

On today's call are SPI Energy's Chairman and CEO, Denton Peng; CFO, Janet Chan; and COO, H.K. Cheong.

Before we begin, the company would like to remind everyone that various remarks about future expectations, plans and prospects constitute forward-looking statements for purpose of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. SPI cautions that these forward-looking statements are subject to risks and uncertainties that may cause their actual results to differ materially from those indicated, including risks described in the company's filings with the SEC. Any forward-looking statements made on this conference call speak only as of today's date, Tuesday, August 22, 2023 and SPI does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today.

I will now pass the call over to SPI Energy's Chairman and CEO, Denton Peng. Mr. Peng?

Denton Peng

Thank you, Diego, and thank you to everyone for joining us today on our second quarter earnings call. We generated strong double-digit growth during the second quarter, with net sales increasing more than 21% over the second quarter of 2022 to nearly $59 million and gross profit improving more than 35% to $5.2 million.

Importantly, when we structured out the operating loss of our Phoenix Motor EV division, which we spun out on NASDAQ last year, our core business plan passed the broken-even point during the second quarter. Underscoring the strength of our rapidly growing solar operation, this exceptional performance further demonstrates our continued ability to drive growth and improve profitability as we execute our strategy with diligence and focus.

In recent years, we have established a solid chain of strong revenue growth that has placed us on a clear path to near-term profitability, especially our solar manufacturing capacity based in Sacramento, California. This business has been profitable since quarter four last year. We are in the process to build additional capacity in Sumter, South Carolina to meet local strong demand. We are also in the process to build 1.5 gigawatts solar wafer and 500 megawatts TOPCon solar cell manufacturing capacity in the U.S. We anticipate these trends will accelerate moving forward as we benefit from strong industry tailwinds including incentive under the Inflation Reduction Act in the U.S. and other provisions that continue to boost the global renewable energy market.