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Net Income of $33 million
Q2 MW Deployed Growth of 54% Year-Over-Year
Cumulative 721 MW Deployed
Second Quarter 2016 Operating Highlights
- Total deployments of 65 MW, an increase of 54% year-over-year.
Sunrun-built deployments grew 128% year-over-year.
- Cumulative MW deployed of 721 MW.
- Pre-tax Project Value per watt increased to
$4.61from $4.51in the prior quarter.
- Creation Cost per watt improved by
$0.44, or 11% from Q1 2016.
“We are pleased with our performance in the second quarter as we continue to grow and create customer value in 2016,” said
Key Operating Metrics
In the second quarter of 2016, total MW deployed increased to 65 MW from 42 MW in the second quarter of 2015, a 54% year-over-year increase.
Pre-tax project value per watt was
Net bookings were 74 MW, representing 21% year-over-year growth.
NPV created in the second quarter of 2016 was $51 million, compared to $21 million in the first quarter of 2016. Estimated nominal contracted payments remaining as of
Second Quarter 2016 GAAP Results
Total revenue grew to
Total cost of revenue was
Net income available to common stockholders was
GAAP diluted net earnings per share available to common shareholders was
Guidance for Q3 and Full Year 2016
The following statements are based on current expectations. These statements are forward-looking and actual results may differ materially.
For 2016, we expect deployments in the range of 270 to 280 MW, focusing primarily on delivering NPV of above
In Q3, we expect to deploy 72 MW.
Conference Call Information
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, including statements regarding our future financial and operating guidance, operational and financial results such as growth, value creation, MW bookings and deployments, estimates of nominal contracted payments remaining, estimated retained value, project value, estimated creation costs and NPV, and the assumptions related to the calculation of the foregoing metrics, as well as our expectations regarding our growth and financing capacity. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to: the availability of additional financing on acceptable terms; changes in the retail prices of traditional utility generated electricity; changes in policies and regulations including net metering and interconnection limits or caps; the availability of rebates, tax credits and other incentives; the availability of solar panels and other raw materials; our limited operating history, particularly as a new public company; our ability to attract and retain our relationships with third parties, including our solar partners; our ability to meet the covenants in our investment funds and debt facilities; and such other risks identified in the reports that we file with the
Consolidated Balance Sheets
(In Thousands, Except Share Par Values)
|June 30, 2016||December 31, 2015|
|Accounts receivable (net of allowances for doubtful accounts of $977 and $1,641 as of June 30, 2016 and December 31, 2015, respectively)||56,572||60,275|
|State tax credits receivable||—||9,198|
|Prepaid expenses and other current assets||12,380||5,917|
|Total current assets||374,416||359,715|
|Solar energy systems, net||2,282,729||1,992,021|
|Property and equipment, net||53,348||44,866|
|Intangible assets, net||20,602||22,705|
|Prepaid tax asset||278,602||190,146|
|Liabilities and total equity|
|Distributions payable to noncontrolling interests and redeemable noncontrolling interests||8,515||8,144|
|Accrued expenses and other liabilities||52,015||49,146|
|Deferred revenue, current portion||65,745||59,726|
|Deferred grants, current portion||14,383||13,949|
|Capital lease obligations, current portion||11,371||8,951|
|Long-term non-recourse debt, current portion||6,368||4,722|
|Lease pass-through financing obligation, current portion||4,301||3,710|
|Total current liabilities||256,379||252,481|
|Deferred revenue, net of current portion||579,590||559,066|
|Deferred grants, net of current portion||212,768||220,784|
|Capital lease obligations, net of current portion||16,916||15,042|
|Long-term non-recourse debt, net of current portion||505,918||333,042|
|Lease pass-through financing obligation, net of current portion||139,873||153,188|
|Deferred tax liabilities||278,661||190,146|
|Redeemable noncontrolling interests||163,520||147,139|
|Total liabilities, redeemable noncontrolling interests and total equity||$||3,136,844||$||2,734,592|
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
|Three Months Ended June 30,||Six Months Ended June 30,|
|Operating leases and incentives||$||45,394||$||34,458||$||79,934||$||56,766|
|Solar energy systems and product sales||77,144||38,232||141,347||65,601|
|Cost of operating leases and incentives||38,608||27,067||76,708||48,444|
|Cost of solar energy systems and product sales||61,600||34,624||119,112||59,954|
|Sales and marketing||43,716||33,976||86,904||58,902|
|Research and development||2,373||2,492||4,836||4,779|
|General and administrative||23,614||19,677||46,862||39,983|
|Amortization of intangible assets||1,051||1,051||2,103||1,593|
|Total operating expenses||170,962||118,887||336,525||213,655|
|Loss from operations||(48,424||)||(46,197||)||(115,244||)||(91,288||)|
|Interest expense, net||13,063||8,433||24,578||15,563|
|Loss on early extinguishment of debt||—||431||—||431|
|Other expenses (income), net||30||1,019||(502||)||1,318|
|Loss before income taxes||(61,517||)||(56,080||)||(139,320||)||(108,600||)|
|Income tax expense (benefit)||3,210||(6,215||)||3,210||(6,215||)|
|Net loss attributable to noncontrolling interests and redeemable noncontrolling interests||(97,370||)||(57,405||)||(188,307||)||(91,930||)|
|Net income (loss) attributable to common stockholders||$||32,643||$||7,540||$||45,777||$||(10,455||)|
|Less: Net income allocated to participating securities||—||(7,540||)||—||—|
|Net income (loss) available to common stockholders||$||32,643||$||—||$||45,777||$||(10,455||)|
|Net income (loss) per share available to common stockholders|
|Weighted average shares used to compute net income (loss) per share available to common stockholders|
Consolidated Statements of Cash Flows
|Six Months Ended June 30,|
|Adjustments to reconcile net loss to net cash used in operating activities:|
|Depreciation and amortization, net of amortization of deferred grants||46,564||32,673|
|Bad debt expense||414||739|
|Interest on lease pass-through financing||6,019||7,177|
|Noncash tax expense (benefit)||3,210||(6,215||)|
|Noncash interest expense||5,335||4,443|
|Stock-based compensation expense||8,647||6,421|
|Reduction in lease pass-through financing obligations||(9,491||)||(10,379||)|
|Changes in operating assets and liabilities:|
|Prepaid and other assets||(2,760||)||(8,615||)|
|Accrued expenses and other liabilities||3,218||6,209|
|Net cash used in operating activities||(98,413||)||(44,602||)|
|Payments for the costs of solar energy systems, leased and to be leased||(332,472||)||(257,806||)|
|Purchases of property and equipment||(8,208||)||(4,688||)|
|Business acquisition, net of cash acquired||(5,000||)||(14,575||)|
|Net cash used in investing activities||(345,680||)||(277,069||)|
|Proceeds from state tax credits, net of recapture||9,123||5,120|
|Proceeds from recourse debt||257,400||143,000|
|Repayment of recourse debt||(212,000||)||(49,224||)|
|Proceeds from non-recourse debt||189,746||10,200|
|Repayment of non-recourse debt||(16,543||)||(5,732||)|
|Payment of debt fees||(12,277||)||(2,801||)|
|Proceeds from lease pass-through financing obligations||12,805||52,034|
|Contributions received from noncontrolling interests and redeemable noncontrolling interests||239,621||155,662|
|Distributions paid to noncontrolling interests and redeemable noncontrolling interests||(18,257||)||(13,717||)|
|Proceeds from exercises of stock options, net of withholding taxes on restricted stock units and issuance of shares in connection with the Employee Stock Purchase Plan||3,616||2,387|
|Offering costs paid related to initial public offering||(437||)||(4,722||)|
|Payment of capital lease obligations||(6,416||)||(1,472||)|
|Change in restricted cash||1,068||(4,608||)|
|Net cash provided by financing activities||447,449||286,127|
|Net increase (decrease) in cash||3,356||(35,544||)|
|Cash, beginning of period||203,864||152,154|
|Cash, end of period||$||207,220||$||116,610|
Key Operating Metrics
|As of June 30,|
|Cumulative MW Deployed||721||473|
|Estimated Nominal Contracted Payments Remaining (in millions)||$||2,729||$||1,917|
|Estimated Retained Value under Energy Contract (in millions)||$||1,163||$||808|
|Estimated Retained Value of Purchase or Renewal (in millions)||$||563||$||415|
|Estimated Retained Value (in millions)(1)||$||1,725||$||1,223|
|Estimated Retained Value (per watt)||$||2.30||$||2.39|
Ended June 30,
|Project Value (per watt)||$||4.61||$||5.00(2)|
|Creation Cost (3) (per watt)||$||3.67||$||4.08|
|Unlevered NPV (per watt)||$||0.94||$||0.92|
|NPV (in millions)||$||51||$||37|
(1) Numbers may not sum to total due to rounding.
(2) Excludes materially all SREC value.
(3) Excludes initial direct costs (IDCs) paid prior to deployments and excludes non-cash items such as amortization of intangible assets and stock-based compensation, and contingent consideration related to an acquisition we completed in Q2 2015.
Creation Cost includes (i) certain installation and general and administrative costs after subtracting the gross margin on solar energy systems and product sales divided by watts deployed during the measurement period and (ii) certain sales and marketing expenses under new Customer Agreements, net of cancellations during such period divided by the related watts booked.
Customers refers to residential customers with solar energy systems that are installed or under contract to install, net of cancellations.
Customer Agreements refers to, collectively, solar power purchase agreements and solar leases.
Estimated Nominal Contracted Payments Remaining equals the sum of the remaining cash payments that Customers are expected to pay over the initial terms of their Customer Agreements (not including the value of any renewal or system purchase at the end of the initial contract term, but including estimated uncollected prepayments), for systems contracted as of the measurement date.
Estimated Retained Value represents the estimated nominal contracted payments remaining (discounted at 6%), less substantially all value from solar renewable energy credits (“SRECs”) prior to
Estimated Retained Value Under Energy Contract represents the net cash flows during the initial (typically 20 year) term of our Customer Agreements (less substantially all value from SRECs prior to
Estimated Retained Value of Purchase or Renewal is the forecasted net present value we would receive upon or following the expiration of the initial contract term (either in the form of cash payments during any applicable renewal period or a system purchase at the end of the initial term).
Estimated Retained Value Per Watt is calculated by dividing the estimated retained value as of the measurement date by the aggregate nameplate capacity of solar energy systems deployed with executed Customer Agreements as of such date.
MW Booked represents the aggregate megawatt production capacity of our solar energy systems sold to customers or subject to an executed Customer Agreement, net of cancellations.
MW Deployed represents the aggregate megawatt production capacity of our solar energy systems, whether sold directly to customers or subject to executed Customer Agreements, for which we have (i) confirmation that the systems are installed on the roof, subject to final inspection or (ii) in the case of certain system installations by our partners, accrued at least 80% of the expected project cost.
NPV equals unlevered net present value multiplied by leased megawatts deployed in period.
Project Value represents the value of upfront and future payments by customers, the benefits received from utility and state incentives, as well as the present value of net proceeds derived through investment funds. Specifically, project value is calculated as the sum of the following items (all measured on a per-watt basis with respect to megawatts deployed under Customer Agreements during the period): (i) estimated retained value, (ii) utility or upfront state incentives, (iii) upfront payments from customers for deposits and partial or full prepayments of amounts otherwise due under Customer Agreements and which are not already included in estimated retained value and (iv) finance proceeds from tax equity investors. Project value includes contracted SRECs for all periods after
Unlevered NPV equals the difference between project value and estimated creation cost on a per watt basis.
Investor Relations Contact:
Charlotte Coultrap-BaggInvestors@sunrun.com (415) 510-4833