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, Nov. 12, 2015 (GLOBE NEWSWIRE) -- 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  The conference call can be accessed live via the Sunrun Investor Relations website at 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:

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.

(In thousands, except per share values)
    September 30, 2015     December 31, 2014  
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  

(In thousands, except per share values)
Months Ended September 30,
Months Ended September 30,
    2015     2014     2015     2014  
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  

(In thousands)
    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 (decrease) 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 an 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.


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 1st 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
(510) 315-1003

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Source: Sunrun Inc.