Sunrun Reports First Quarter 2016 Financial Results

Revenues of $99 million

MW Deployed Growth of 63% Year-Over-Year

Cumulative 656 MW Deployed

SAN FRANCISCO, May 12, 2016 (GLOBE NEWSWIRE) -- Sunrun (Nasdaq:RUN), the largest dedicated residential solar company in the United States, today announced financial results for the first quarter ended March 31, 2016.

First Quarter 2016 Operating Highlights

  • Total deployments of 60 MW, an increase of 63% year-over-year.  Sunrun-built deployments grew 148% year-over-year.

  • Cumulative MW deployed of 656 MW.

  • Pre-tax Project Value per watt was $4.51, flat with Q4 2015. 

  • Pro forma Creation Cost (excluding one-time items related to Nevada exit) per watt of $4.11 decreased $0.25, or 6% year-over-year.

“The industry has reached a new milestone with one million solar homes underscoring the increasing power and relevance of rooftop solar in our energy future,” said Lynn Jurich, chief executive officer. “Sunrun has already saved our customers more than $100 million dollars. Our new BrightBox storage offering extends the profit potential and reach of solar energy.”

Key Operating Metrics 

In the first quarter of 2016, total MW deployed increased to 60 MW from 37 MW in the first quarter of 2015, a 63% year-over-year increase.

Pre-tax project value per watt was $4.51, compared to $5.02 in the first quarter of 2015. Pro forma creation cost was $4.11 per watt (excluding one-time items related to Nevada exit) in the first quarter of 2016 compared to $4.36 in the first quarter of 2015.

Pro forma net bookings (excluding cancellation of Nevada orders) were 56 MW, representing 46% year-over-year growth.

Pro forma NPV created in the first quarter of 2016 was $20.6 million, compared to $23.3 million in the first quarter of 2015.  Estimated nominal contracted payments remaining as of March 31, 2016 totaled $2.6 billion, up $920 million or 54% since March 31, 2015.  Estimated retained value as of March 31, 2016 was $1.6 billion, up $546 million, or 50%, since March 31, 2015.

Financing Activities

As of May 12, 2016, with the upsize of our previously announced back-leverage aggregation facility, and the addition of new tax equity partnerships, we have increased our total capacity to meet expected project finance needs well into 2017.

First Quarter 2016 GAAP Results

Total revenue grew to $98.7 million in the first quarter of 2016, up $49.1 million, or 99% from the first quarter of 2015.  Operating leases and incentives revenue grew 55% year-over-year to $34.5 million.  Solar energy systems and product sales grew 135% year-over-year to $64.2 million.

Total cost of revenue was $95.6 million, an increase of 105% year-over-year. Total operating expenses were $165.6 million, an increase of 75% year-over-year.

Net income attributable to common stockholders was $13.1 million in the first quarter of 2016, compared to a net loss of $15.0 million in the fourth quarter of 2015, and a net loss of $18.0 million in the first quarter of 2015.

GAAP net earnings per share attributable to common shareholders was $0.13 per share.

Guidance for Q2 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 of approximately 285 MW but we will focus primarily on delivering NPV of above $1 per watt in the second half of the year.  We believe this NPV growth is supported by expected growth rates of nearly 100% in our Sunrun built business, which is double the market growth rate and lower unit level creation costs. 

In Q2, we expect to deploy approximately 60 MW.

Conference Call Information

Sunrun is hosting a conference call for analysts and investors to discuss its first quarter 2016 results and outlook for its second quarter and full year of 2016 at 2:00 p.m. Pacific Time today, May 12, 2016. 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 (877) 470-1078 (domestic) or (615) 247-0087 (international) using ID# 95591236.  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# 95591236.

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, 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: 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 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 Share Par Values)
    March 31, 2016   December 31, 2015
Current assets:        
Cash   $ 208,313     $ 203,864  
Restricted cash     9,246       9,203  
Accounts receivable (net of allowances for doubtful
  accounts of $1,167 and $1,641 as of March 31, 2016
  and December 31, 2015, respectively)
    56,774       60,275  
State tax credits receivable           9,198  
Inventories     94,682       71,258  
Prepaid expenses and other current assets     13,903       5,917  
Total current assets     382,918       359,715  
Restricted cash     6,125       8,094  
Solar energy systems, net     2,137,015       1,992,021  
Property and equipment, net     51,897       44,866  
Intangible assets, net     21,653       22,705  
Goodwill     87,543       87,543  
Prepaid tax asset     222,596       190,146  
Other assets     31,833       29,502  
Total assets   $ 2,941,580     $ 2,734,592  
Liabilities and total equity        
Current liabilities:        
Accounts payable   $ 93,701     $ 104,133  
Distributions payable to noncontrolling interests and
  redeemable noncontrolling interests
    7,368       8,144  
Accrued expenses and other liabilities     53,826       49,146  
Deferred revenue, current portion     65,820       59,726  
Deferred grants, current portion     14,399       13,949  
Capital lease obligation, current portion     10,890       8,951  
Long-term non-recourse debt, current portion     5,591       4,722  
Lease pass-through financing obligation, current portion     4,540       3,710  
Total current liabilities     256,135       252,481  
Deferred revenue, net of current portion     577,220       559,066  
Deferred grants, net of current portion     216,176       220,784  
Capital lease obligation, net of current portion     17,154       15,042  
Recourse debt     191,000       197,000  
Long-term non-recourse debt, net of current portion     436,196       333,042  
Lease pass-through financing obligation, net of current
    143,020       153,188  
Other liabilities     8,863       7,144  
Deferred tax liabilities     222,596       190,146  
Total liabilities     2,068,360       1,927,893  
Redeemable noncontrolling interests     138,049       147,139  
Stockholders’ equity     565,793       554,069  
Noncontrolling interests     169,378       105,491  
Total equity     735,171       659,560  
Total liabilities, redeemable noncontrolling interests and total equity   $ 2,941,580     $ 2,734,592  

(In Thousands, Except Per Share Amounts)
    Three Months Ended March 31,
      2016       2015  
Operating leases and incentives   $ 34,540     $ 22,308  
Solar energy systems and product sales     64,203       27,369  
Total revenue     98,743       49,677  
Operating expenses:        
Cost of operating leases and incentives     38,100       21,377  
Cost of solar energy systems and product sales     57,512       25,330  
Sales and marketing     43,188       24,926  
Research and development     2,463       2,287  
General and administrative     23,248       20,306  
Amortization of intangible assets     1,052       542  
Total operating expenses     165,563       94,768  
Loss from operations     (66,820 )     (45,091 )
Interest expense, net     11,515       7,130  
Other expenses (income), net     (532 )     299  
Loss before income taxes     (77,803 )     (52,520 )
Income tax benefit            
Net loss     (77,803 )     (52,520 )
Net loss attributable to noncontrolling interests and redeemable noncontrolling
    (90,937 )     (34,525 )
Net income (loss) attributable to common stockholders   $ 13,134     $ (17,995 )
Net income (loss) per share attributable to common stockholders        
Basic   $ 0.13     $ (0.74 )
Diluted   $ 0.13     $ (0.74 )
Weighted average shares used to compute net income (loss) per share
  attributable to common stockholders
Basic     101,273       24,427  
Diluted     104,219       24,427  

(In Thousands)
    Three Months Ended March 31,
      2016       2015  
Operating activities:        
Net loss   $ (77,803 )   $ (52,520 )
Adjustments to reconcile net loss to net cash used in operating activities:        
Noncash losses     1,321        
Depreciation and amortization, net of amortization of deferred grants     21,596       15,429  
Bad debt expense     336       457  
Interest on lease pass-through financing     3,002       3,474  
Noncash interest expense     3,502       2,635  
Stock-based compensation expense     3,809       3,220  
Reduction in lease pass-through financing obligations     (4,236 )     (4,887 )
Changes in operating assets and liabilities:        
Accounts receivable     3,595       (5,535 )
Inventories     (23,314 )     (11,537 )
Prepaid and other assets     (4,355 )     5,069  
Accounts payable     (10,103 )     26,932  
Accrued expenses and other liabilities     (317 )     2,643  
Deferred revenue     5,572       12,304  
Net cash used in operating activities     (77,395 )     (2,316 )
Investing activities:        
Payments for the costs of solar energy systems, leased and to be leased     (164,629 )     (131,291 )
Purchases of property and equipment     (5,023 )     (1,947 )
Net cash used in investing activities     (169,652 )     (133,238 )
Financing activities:        
Proceeds from grants and state tax credits, net of recapture     9,202       5,153  
Proceeds from recourse debt     141,000        
Repayment of recourse debt     (147,000 )      
Proceeds from issuance of non-recourse debt     106,400        
Repayment of non-recourse debt     (2,160 )     (690 )
Payment of debt fees     (9,369 )      
Proceeds from lease pass-through financing obligations     9,746       35,130  
Contributions received from noncontrolling interests and redeemable noncontrolling interests     154,944       59,341  
Distributions paid to noncontrolling interests and redeemable noncontrolling interests     (9,986 )     (7,521 )
Proceeds from exercises of stock options, net of withholding taxes on restricted stock units     452       1,058  
Offering costs paid related to initial public offering     (437 )      
Payment of capital lease obligation     (3,115 )     (602 )
Change in restricted cash     1,819       (2,996 )
Net cash provided by financing activities     251,496       88,873  
Net increase (decrease) in cash     4,449       (46,681 )
Cash, beginning of period     203,864       152,154  
Cash, end of period   $ 208,313     $ 105,473  

Key Operating Metrics      
            As of March 31,        
    2016    2015  
MW Booked     56 (1)         38  
MW Deployed     60       37  
Cumulative MW Deployed     656       430  
Estimated Nominal Contracted Payments Remaining (in millions)   $ 2,633     $ 1,713  
Estimated Retained Value under Energy Contract (in millions)   $ 1,115     $ 711  
Estimated Retained Value of Purchase or Renewal (in millions)   $ 518     $ 377  
Estimated Retained Value (in millions)   $ 1,633     $ 1,087  
Estimated Retained Value (per watt)   $ 2.36     $ 2.41  

    Three Months Ended March 31,
    2016    2015
Project Value (per watt)   $ 4.51       $ 5.02  
Creation Cost (2) (per watt)   $ 4.11 (3)         $ 4.36  
Unlevered NPV (per watt)   $ 0.40       $ 0.66  
NPV (in millions)   $ 21 (3)         $ 23  

(1) Excludes 13 MW due to Nevada exit. 
(2) Excludes IDC costs paid prior to deployments and excludes non-cash items such as amortization of intangible assets and stock-based compensation.
(3) Excludes $0.24 per watt related to Nevada exit. See supplemental cost memo.


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 and (ii) certain sales and marketing expenses under new customer agreements, net of cancellations during the 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.

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 solar renewable energy credits (“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.

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.

NPV equals unlevered NPV multiplied by leased megawatts booked 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. 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 2016.

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

Investor Relations Contact:

Charlotte Coultrap-Bagg
(415) 510-4833

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Source: Sunrun Inc.