Exhibit 99.1

 

Sunrun Reports Third Quarter 2015 Financial Results

MW Booked Growth of 115% Year-Over-Year

Quarterly NPV Creation of $49.5 million, a 112% Increase from Q1 2015

Creation Costs per Watt Decreased $0.61 or 14% from Q1 2015

528 MW Cumulatively Deployed

SAN FRANCISCO, November 12, 2015, Sunrun (Nasdaq:RUN), the largest dedicated residential solar company in the United States, today announced financial results for the third quarter ended September 30, 2015.

Third Quarter 2015 Operating Highlights

 

·

94.5 MW booked, an increase of 54% quarter-over-quarter and 115% year-over-year.

 

·

55.7 MW deployed, representing 85% organic growth year-over-year.

 

·

Cumulative MW deployed of 528.2 MW.

 

·

Quarterly NPV creation was $49.5 million, an increase of 33% quarter-over-quarter.

 

·

Pre-tax Project Value per watt was $4.70, compared to $5.00 in the prior quarter.  

 

·

Creation Cost per watt of $3.75 decreased $0.33, or 8% quarter-over-quarter.

“Our NPV growth in the third quarter demonstrates our ongoing focus on value creation,” said Lynn Jurich, Sunrun’s CEO. “Successful execution on MW deployed and bookings growth means we are poised to continue our strong growth in 2016. We recently added our 100,000th solar customer, a new milestone as we rapidly add to the nation’s second largest residential solar fleet.”

Key Operating Metrics  

In the third quarter of 2015, MW booked increased to 94.5 MW from 44.0 MW in the third quarter of 2014 and MW deployed increased to 55.7 MW from 30.1 MW in the third quarter of 2014, excluding the impact of an opportunistic asset portfolio purchase in 2014. This resulted in 115% year-over-year growth in MW booked and 85% year-over-year organic growth in MW deployed.

NPV created in the third quarter of 2015 was $49.5 million, compared to $37.2 million in the second quarter of 2015.  Pre-tax project value per watt was $4.70, compared to $5.00 in the second quarter of 2015. Creation cost per watt was $3.75 in the third quarter of 2015 compared to $4.08 in the second quarter of 2015.

Estimated nominal contracted payments remaining as of September 30, 2015 totaled $2,219 million, compared to $1,423 million as of September 30, 2014, an increase of 56%.  Estimated retained value as of September 30, 2015 was $1,368 million compared to $897 million as of September 30, 2014, an increase of 53%.

Financing Activities

As of November 12, 2015, we have closed on tax equity commitments to fund $4,018 million in cumulative value of solar systems, an increase of $916 million from the $3,102 million in system value funded by tax equity commitments as of the end of the second quarter.  

 

 

 


Third Quarter 2015 GAAP Results

Total revenue grew to $82.6 million in the third quarter of 2015 from $56.1 million in the third quarter of 2014.  Operating leases and incentives revenue grew 46% year-over-year to $31.7 million.  Solar energy systems and product sales were $51.0 million in the third quarter of 2015, an increase of 48% year-over-year.

Total cost of revenue was $75.2 million, an increase of 52% year-over-year. Total operating expenses were $145.4 million in the third quarter of 2015, up 56% year-over-year.

Net loss attributable to common stockholders was $2.8 million in the third quarter of 2015, compared to a net income of $7.5 million in the second quarter of 2015 and a net loss of $15.2 million in the third quarter of 2014.

Non-GAAP net loss per share available to common shareholders, excluding a non-recurring, non-cash deemed dividend to preferred shareholders in connection with our IPO, was ($0.04) per share. GAAP net loss per share available to common shareholders was ($0.41) per share.

Guidance for Full Year 2015

The following statements are based on current expectations. These statements are forward-looking and actual results may differ materially.

For the full year 2015, we expect MW deployed of approximately 205, which represents 79% organic growth year-over-year.

Conference Call Information

Sunrun is hosting a conference call for analysts and investors to discuss its third quarter 2015 results and outlook for its full year of 2015 at 2:00 p.m. Pacific Time today, November 12, 2015. A live audio webcast of the conference call along with supplemental financial information will also be accessible from the “Investors” section of the Company’s website at http://investors.sunrun.com.  The conference call can be accessed live via the Sunrun Investor Relations website at  http://investors.sunrun.com or over the phone by dialing (866) 430-5027 (domestic) or (704) 908-0432 (international) using ID# 53341828.  A replay will be available following the call via the Sunrun Investor Relations website or for one week at the following numbers (855) 859-2056 (domestic) or (404) 537-3406 (international) using ID# 53341828.

About Sunrun

Sunrun (NASDAQ:RUN) is the largest dedicated residential solar company in the United States with a mission to create a planet run by the sun. Since establishing the solar as a service model in 2007, Sunrun continues to lead the industry in providing clean energy to homeowners with little to no upfront cost and at a savings to traditional electricity. The company designs, installs, finances, insures, monitors and maintains the solar panels on a homeowner's roof, while families receive predictable pricing for 20 years or more. For more information please visit: www.sunrun.com.

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.

 


The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include: 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 registration statements and reports that we have file with the U.S. Securities and Exchange Commission, or SEC, from time to time.  All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.

 


CONSOLIDATED BALANCE SHEETS

(In thousands, except per share values)

 

 

September 30, 2015

 

 

December 31, 2014

 

 

 

(Unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

263,006

 

 

$

152,154

 

Restricted cash

 

 

8,076

 

 

 

2,534

 

Accounts receivable (net of allowances for doubtful accounts of $1,200 and $703

   as of September 30, 2015 and December 31, 2014, respectively)

 

 

53,717

 

 

 

43,189

 

Grants receivable

 

 

9,198

 

 

 

5,183

 

Inventories

 

 

51,907

 

 

 

23,914

 

Prepaid expenses and other current assets

 

 

8,375

 

 

 

9,560

 

Deferred tax assets, current

 

 

4,632

 

 

 

3,048

 

Total current assets

 

 

398,911

 

 

 

239,582

 

Restricted cash

 

 

7,813

 

 

 

6,012

 

Solar energy systems, net

 

 

1,837,047

 

 

 

1,480,223

 

Property and equipment, net

 

 

34,743

 

 

 

22,195

 

Intangible assets, net

 

 

23,756

 

 

 

13,111

 

Goodwill

 

 

87,555

 

 

 

51,786

 

Prepaid tax asset

 

 

170,000

 

 

 

109,381

 

Other assets

 

 

23,201

 

 

 

13,342

 

Total assets

 

$

2,583,026

 

 

$

1,935,632

 

Liabilities and total equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

97,908

 

 

$

51,166

 

Distributions payable to noncontrolling interests and redeemable noncontrolling

   interests

 

 

7,224

 

 

 

6,764

 

Accrued expenses and other liabilities

 

 

45,636

 

 

 

25,445

 

Deferred revenue, current portion

 

 

52,590

 

 

 

44,398

 

Deferred grants, current portion

 

 

13,980

 

 

 

13,754

 

Capital lease obligation, current portion

 

 

6,441

 

 

 

1,593

 

Long-term debt, current portion

 

 

1,803

 

 

 

2,602

 

Solar asset-backed notes, current portion

 

 

2,967

 

 

 

 

Lease pass-through financing obligation, current portion

 

 

2,837

 

 

 

5,161

 

Total current liabilities

 

 

231,386

 

 

 

150,883

 

Deferred revenue, net of current portion

 

 

524,950

 

 

 

467,726

 

Deferred grants, net of current portion

 

 

224,689

 

 

 

226,801

 

Capital lease obligation, net of current portion

 

 

11,406

 

 

 

5,761

 

Line of credit

 

 

133,294

 

 

 

48,597

 

Long-term debt, net of current portion

 

 

224,021

 

 

 

188,052

 

Solar asset-backed notes, net of current portion

 

 

106,731

 

 

 

 

Lease pass-through financing obligation, net of current portion

 

 

124,160

 

 

 

180,224

 

Other liabilities

 

 

4,810

 

 

 

2,424

 

Deferred tax liabilities

 

 

174,631

 

 

 

112,597

 

Total liabilities

 

 

1,760,078

 

 

 

1,383,065

 

Redeemable noncontrolling interests

 

 

176,705

 

 

 

135,948

 

Stockholders’ equity

 

 

561,606

 

 

 

324,864

 

Noncontrolling interests

 

 

84,637

 

 

 

91,755

 

Total equity

 

 

646,243

 

 

 

416,619

 

Total liabilities, redeemable noncontrolling interests and

   total equity

 

$

2,583,026

 

 

$

1,935,632

 

 


CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share values)

(Unaudited)

 

 

 

Three

Months Ended September 30,

 

 

Nine

Months Ended September 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating leases and incentives

 

$

31,650

 

 

$

21,612

 

 

$

88,416

 

 

$

63,040

 

Solar energy systems and product sales

 

 

50,950

 

 

 

34,464

 

 

 

116,551

 

 

 

75,378

 

Total revenue

 

 

82,600

 

 

 

56,076

 

 

 

204,967

 

 

 

138,418

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of operating leases and incentives

 

 

28,723

 

 

 

19,112

 

 

 

77,167

 

 

 

51,367

 

Cost of solar energy systems and product

   sales

 

 

46,468

 

 

 

30,235

 

 

 

106,422

 

 

 

66,043

 

Sales and marketing

 

 

45,382

 

 

 

23,445

 

 

 

104,284

 

 

 

53,207

 

Research and development

 

 

2,240

 

 

 

2,036

 

 

 

7,019

 

 

 

5,962

 

General and administrative

 

 

21,486

 

 

 

17,700

 

 

 

61,469

 

 

 

50,387

 

Amortization of intangible assets

 

 

1,051

 

 

 

575

 

 

 

2,644

 

 

 

1,693

 

Total operating expenses

 

 

145,350

 

 

 

93,103

 

 

 

359,005

 

 

 

228,659

 

Loss from operations

 

 

(62,750

)

 

 

(37,027

)

 

 

(154,038

)

 

 

(90,241

)

Interest expense, net

 

 

8,475

 

 

 

7,433

 

 

 

24,038

 

 

 

19,757

 

Loss on early extinguishment of debt

 

 

 

 

 

 

 

 

431

 

 

 

 

Other expenses

 

 

87

 

 

 

657

 

 

 

1,405

 

 

 

2,503

 

Loss before income taxes

 

 

(71,312

)

 

 

(45,117

)

 

 

(179,912

)

 

 

(112,501

)

Income tax expense (benefit)

 

 

903

 

 

 

 

 

 

(5,312

)

 

 

(10,043

)

Net loss

 

 

(72,215

)

 

 

(45,117

)

 

 

(174,600

)

 

 

(102,458

)

Net loss attributable to noncontrolling interests

   and redeemable noncontrolling interests

 

 

(69,447

)

 

 

(29,903

)

 

 

(161,377

)

 

 

(58,292

)

Net loss attributable to common

   stockholders

 

$

(2,768

)

 

$

(15,214

)

 

$

(13,223

)

 

$

(44,166

)

Deemed dividend to convertible preferred

   stockholders

 

 

(24,890

)

 

 

 

 

 

(24,890

)

 

 

 

Net loss available to common

   stockholders

 

$

(27,658

)

 

$

(15,214

)

 

$

(38,113

)

 

$

(44,166

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share available to common

   shareholders—basic and diluted

 

$

(0.41

)

 

$

(0.64

)

 

$

(0.96

)

 

$

(1.98

)

Weighted average shares used to compute net

   loss per share available to common

   stockholders—basic and diluted

 

 

67,732

 

 

 

23,943

 

 

 

39,612

 

 

 

22,282

 

 


CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Nine months Ended September 30,

 

 

 

2015

 

 

2014

 

Operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(174,600

)

 

$

(102,458

)

Adjustments to reconcile net loss to net cash provided by (used in) operating

   activities:

 

 

 

 

 

 

 

 

Noncash losses and impairments

 

 

2,545

 

 

 

 

Depreciation and amortization, net of amortization of deferred grants

 

 

51,059

 

 

 

35,443

 

Bad debt expense

 

 

1,158

 

 

 

356

 

Interest on lease pass-through financing

 

 

9,425

 

 

 

7,042

 

Noncash tax benefit

 

 

(5,312

)

 

 

(10,043

)

Noncash interest expense

 

 

5,349

 

 

 

1,784

 

Stock—based compensation expense

 

 

10,427

 

 

 

6,037

 

Reduction in lease pass—through financing obligations

 

 

(16,059

)

 

 

(8,337

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(5,999

)

 

 

(6,008

)

Inventories

 

 

(27,993

)

 

 

(4,928

)

Prepaid and other assets

 

 

3,039

 

 

 

4,317

 

Accounts payable

 

 

37,605

 

 

 

10,173

 

Accrued expenses and other liabilities

 

 

5,568

 

 

 

7,545

 

Deferred revenue

 

 

31,856

 

 

 

63,040

 

Net cash provided by (used in) operating activities

 

 

(71,932

)

 

 

3,963

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Payments for the costs of solar energy systems, leased and to be leased

 

 

(408,861

)

 

 

(296,810

)

Purchases of property and equipment

 

 

(8,416

)

 

 

(6,185

)

Acquisitions of businesses, net of cash acquired

 

 

(14,575

)

 

 

(36,384

)

Net cash used in investing activities

 

 

(431,852

)

 

 

(339,379

)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from grants and state tax credits

 

 

4,975

 

 

 

72

 

Proceeds from issuance of debt

 

 

318,000

 

 

 

13,546

 

Repayment of debt

 

 

(199,860

)

 

 

(3,683

)

Payment of debt fees

 

 

(14,751

)

 

 

(285

)

Proceeds from solar asset-backed notes

 

 

111,000

 

 

 

 

Repayment of solar asset-backed notes

 

 

(1,302

)

 

 

 

Proceeds from issuance of convertible preferred stock, net of issuance costs

 

 

 

 

 

143,393

 

Proceeds from lease pass-through financing obligations

 

 

73,300

 

 

 

119,596

 

Repayment of lease pass-through financing obligations

 

 

(88,918

)

 

 

 

Contributions received from noncontrolling interests and

   redeemable noncontrolling interests

 

 

215,724

 

 

 

144,480

 

Distributions paid to noncontrolling interests and redeemable

   noncontrolling interests

 

 

(20,248

)

 

 

(26,294

)

Proceeds from exercises of stock options

 

 

3,188

 

 

 

2,404

 

Proceeds from initial public offering, net of offering costs

 

 

223,541

 

 

 

 

Payment of capital lease obligation

 

 

(2,670

)

 

 

(843

)

Change in restricted cash

 

 

(7,343

)

 

 

(1,016

)

Net cash provided by financing activities

 

 

614,636

 

 

 

391,370

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

110,852

 

 

 

55,954

 

Cash and cash equivalents, beginning of period

 

 

152,154

 

 

 

99,699

 

Cash and cash equivalents, end of period

 

$

263,006

 

 

$

155,653

 

 


 

Reconciliation of Non-GAAP EPS to GAAP EPS in Q3 2015

 

Non-GAAP EPS

 

 

GAAP EPS

 

Net loss available to common shareholders

 

$

(27,658

)

 

$

(27,658

)

Plus: Deemed dividend to convertible preferred stockholders

 

$

24,890

 

 

 

 

 

Non-GAAP net loss available to common shareholders excluding deemed dividend

 

$

(2,768

)

 

 

 

 

Weighted average shares used to compute net loss per share available to common shareholders --basic and diluted

 

 

67,732

 

 

 

67,732

 

Net loss per share available to common shareholders --basic and diluted

 

$

(0.04

)

 

$

(0.41

)

Non-GAAP EPS represents the net loss per share available to common shareholders excluding a non-recurring, non-cash deemed dividend to preferred shareholders in connection with our IPO. The presentation of financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operational decision-making purposes and as a means to evaluate period-to period comparisons. We believe that these non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.

Key Operating Metrics

 

 

 

Three Months Ended

 

 

 

(In thousands, except MW values and per Watt values)

 

 

 

September 30,

2015

 

 

June 30,

2015

 

 

September 30,

2014

  

MW Booked

 

 

94.5

 

 

 

61.2

  

  

  

44.0

 

MW Deployed

  

 

55.7

 

 

 

42.4

 

 

 

33.5 (1

)

Cumulative MW Deployed

 

 

528.2

 

 

 

472.5

 

 

 

356.2

 

Estimated Nominal Contracted Payments Remaining (in millions)

 

$

2,219

 

 

$

1,917

 

 

$

1,423

 

Estimated Retained Value (in millions)

 

$

1,368

 

 

$

1,223

 

 

$

897

 

Estimated retained value under energy contract (in millions)

 

$

921

 

 

$

808

 

 

$

567

 

Estimated retained value of purchase (in millions)

 

$

447

 

 

$

415

 

 

$

330

 

Estimated retained value per watt

 

$

2.30

 

 

$

2.39

 

 

$

2.40

 

(1)

Includes 3.4 MWs associated with purchase of asset portfolio in 2014.

 

 

 

Three Months Ended

 

 

 

September 30,

2015

 

 

June 30,

2015

 

Project Value (per watt)

 

$

4.70

 

 

$

5.00 (1

)

Creation Costs (2) (per watt)

 

$

3.75

 

 

$

4.08

 

Unlevered NPV (per watt)

 

$

0.95

 

 

$

0.92

 

NPV (in millions)

 

$

49.5

 

 

$

37.2

 

(1)

Excludes substantially all SREC value.

(2)

Excludes IDC costs paid prior to deployments and excludes non-cash items such as amortization of intangible assets and stock-based compensation.

Definitions

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 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.

Customers refers to residential customers with solar energy systems that are installed or under contract to install, net of cancellations.

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 agreements (not including the value of any renewal or system purchase at the end of the initial agreement term), including estimated uncollected prepayments, for systems contracted as of the measurement date.

Estimated Retained Value represents the cash flows (discounted at 6%) we expect to receive pursuant to customer agreements during the initial agreement term, excluding substantially all value from SRECs prior to July 1, 2015. It also includes a discounted estimate of the value of the purchase or renewal of the agreement at the end of the initial term.  Estimated retained value excludes estimated distributions to investors in consolidated joint ventures and estimated operating, maintenance and administrative expenses for systems contracted as of the measurement date.  We do not deduct amounts we are obligated to pass through to investors in lease pass-throughs. Estimated retained value under energy contract represents the net cash flows during the initial 20-year term of our customer agreements. 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.

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. 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. Project value does not include cash true-up payments or the value of asset contributions in lieu of cash true-up payments made to investment fund investors, the cumulative impact of which is expected to be immaterial in 2015.

Creation Costs 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 and (ii) certain sales and marketing expenses under new customer agreements, net of cancellations during the period divided by the related watts booked.

Unlevered NPV equals the difference between project value and estimated creation costs on a per watt basis.

NPV equals unlevered NPV multiplied by leased megawatts booked in period.

Investor Relations Contact:

Nicole Noutsios

Investors@sunrun.com

(510) 315-1003