SPI Energy Co., Ltd. (NASDAQ:SPI) Q3 2022 Earnings Conference Call November 16, 2022 4:30 PM ET

Company Participants

Denton Peng - Chairman and CEO

Hoong Khoeng Cheong - COO

Conference Call Participants

Tate Sullivan - Maxim Group

Tim Moore - EF Hutton

Operator

Good afternoon, and welcome to SPI Energy's Third Quarter Fiscal 2022 Conference Call. As a reminder, this call is being recorded and participants are in a listen-only mode. The call will be open for questions-and-answer following the presentation. On today's call are SPI Energy's Chairman and CEO, Denton Peng, 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 purposes of 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, Wednesday, November 16, 2022. SPI does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today.

I'll now pass the call over to Denton Peng Chairman and CEO. Mr. Peng please proceed.

Denton Peng

Thank you, Cherry. Thank you to everyone for joining us today on our third quarter 2022 earnings call. We are pleased to report double digit year-over-year revenue growth in the third quarter, driven by the continued performance of our strategic investment and solar project development initiatives.

With the recent passing of the Inflation Reduction Act, we anticipate our growth will be accelerated in the quarters ahead. The Inflation Reduction Act enable us to earn attractive incentive from our rapidly expanding solar module manufacturing operation in California, which is ramping up capacity to meet anticipated increase in consumer and commercial demand. Currently, most of our solar module manufacturing capacity have been sold out this year, with the operation gross margin more than 35%. As a part of our expansion, we signed a new property and facility lease adjacent to our current facility, in McClellan Park, California during the third quarter.

We anticipate this facility will enable us to increase our solar module manufacturing capacity 2.4 gigawatt in 2023, collectively with our new planned facility in the East and the mid part of the country. Under the Inflation Reduction Act, this additional $0.07 per watt manufacturing incentive will be starting next year in 2023 which we expect will help to further improve our income of solar module manufacturing business by additional 10% to 15% next year.