Sunrun (Nasdaq: RUN), the nation’s leading provider of residential
solar, storage and energy services, today announced financial
results for the third quarter ended September 30, 2021.
“Sunrun is empowering customers by offering clean, affordable
and resilient energy options, while also addressing the urgent need
to decarbonize our economy to combat climate change,” said Mary
Powell, Sunrun’s Chief Executive Officer. “I believe we will have
another break-out year in 2022 as we accelerate our efforts to
transform our energy system, drive continued innovation and
differentiated customer offerings, and deliver sustainable growth
to create value for all stakeholders.”
“The Sunrun team continues to execute well, delivering robust
growth in our customer base while also delivering a strong
improvement in our customer margins during Q3, despite a dynamic
supply chain and operating environment,” said Tom vonReichbauer,
Sunrun’s Chief Financial Officer. “We remain on track to deliver a
strong 2021 and are excited about the trajectory of the business
heading into 2022. We believe the strong capital markets, combined
with our operating scale and discipline, sets us up well for
above-market growth and strong cash generation in 2022.”
Growth & Market Leadership
The growth opportunity for the solar industry is massive. Today,
only 3.5% of the 77 million addressable homes in the US have solar.
The US residential electricity market is over $187 billion per year
and ongoing utility spending has resulted in escalating retail
rates, increasing our value proposition and expanding our
addressable market. Households that adopt electric vehicles consume
approximately double the amount of electricity, increasing our
market opportunity and value proposition even further. In addition
to delivering a superior electricity service, we are increasingly
working to network our dispatchable solar and battery systems to
provide resources to the grid, such as virtual power plants, to
also serve the $120 billion annual market for utility capex. These
virtual power plants offer greater potential for resiliency and
precision than bulky centralized infrastructure.
Owing to network effects and density advantages, increasing
operating scale efficiencies, growing brand strength, capital
raising capabilities, and advanced product and service offerings,
we believe Sunrun will continue to expand our leadership position.
Here are a few highlights from the last quarter:
- Severe weather caused by climate change continues to uncover
vulnerabilities with the electric grid’s aging infrastructure,
leaving millions of people without power. Sunrun has now installed
over 28,000 solar and battery systems nationwide, which offer
homeowners the ability to power through multi-day outages with
clean and reliable home energy. Solar and battery systems also
optimize when power is purchased or supplied to the grid, helping
manage constraints on the grid during peak times. Installation
volumes and attachment rates of batteries have increased again in
Q3 to a record level. We continue to expect battery
installations to increase more than 100% in 2021 compared to the
prior year, although battery supply and logistical constraints have
lowered our expected battery volumes in the near-term compared to
our prior outlook.
- Channel partners are selecting Sunrun, deriving significant
value from our platform. This quarter we set another all-time
record in volume in our channel business. Sunrun grew the selective
group of partners we work with by over 12% in Q3 compared to the
prior quarter. All of the new partners in Q3 agreed to exclusive
agreements to sell Sunrun’s solar service offerings.
- Sunrun’s new homes business continues to gain momentum and
scale, with additional home builders selecting Sunrun as their
preferred partner during the second quarter. Our pipeline of new
homes continues to expand, spanning hundreds of communities which
have been awarded or are already under construction. We grew this
segment by more than 100% in the third quarter compared to the
prior year, pro-forma for Vivint Solar, and are working with over
20 of the top 30 homebuilders in California. Sunrun has increased
its market share in this segment from less than 5% two years ago to
well above 20% today.
- In September, Sunrun closed a securitization of leases and
power purchase agreements and subsequently closed an additional
subordinated financing. The transactions resulted in the highest
advance rate relative to the underlying collateral asset value in
the company’s history, exceeding 100% of contracted Gross Earning
Assets (measured at a 5% discount rate) and achieved a new low
weighted average cost of capital. These financings highlight
that Sunrun can not only fund growth but also generate cash,
despite incurring billions in capital expenditures and operating
costs.
- In October, Sunrun expanded its warehouse facility to support
continued growth while also lowering the cost of financing. The
company increased its non-recourse warehouse lending facility to
$1.8 billion in commitments, an increase of $1 billion, while also
reducing the interest cost by 50 bps to a spread of 200 bps over
LIBOR. All six financial institutions in the facility
expanded their commitments while two new institutions joined the
syndicate. In September, Sunrun retired a warehouse facility which
was arranged by Vivint Solar in August 2019 for $570 million while
also retiring a $412 million warehouse facility following the most
recent asset backed security closing. The average applicable
financing cost for the retired facilities was approximately 100 bps
higher than the upsized facility announced.
- Policy makers also remain focused on extending renewable energy
incentives as they recognize the importance of investing in clean
energy as a way to address climate change, create jobs and improve
the resilience of our energy infrastructure. Following the two-year
extension of the Investment Tax Credit (ITC) in December 2020,
President Biden has proposed a 10-year extension of the ITC, which
has been included in the draft budget reconciliation package which
Congress is considering. The ITC has a proven track record of
bipartisan support given the economic and environmental
benefits.
Innovation & Differentiation
The world has the technologies to move to a decentralized energy
architecture today. Home solar and batteries can operate
economically at small scale and can therefore be located where
energy is consumed, leveraging the built environment instead of
relying on expensive, centralized infrastructure whose design
specifications do not meet today’s weather reality. Sunrun is
effectuating this transition through continued business model
innovation and a superior customer experience. We provide
fixed-rate solar as a service subscriptions, whole-home backup
power capabilities, and participation in virtual power plants. We
are investing in efforts to further electrify the home, including
electric vehicle charging infrastructure and converting gas
appliances to electric. These efforts will increase Sunrun’s share
of the home energy wallet and enhance our value to customers. The
following recent developments highlight our innovation and
increasing differentiation:
- In October, Sunrun expanded its pilot program with SPAN, the
leading intelligent home electrical panel developer, to accelerate
the transition away from fossil fuels and remove integration
barriers for customers to electrify their homes. Many U.S.
households are built with obsolete combination electrical panels,
which often present significant challenges for consumers interested
in installing rooftop solar, home batteries, and electric vehicle
chargers. Through the pilot, Sunrun is including SPAN home
electrical panels as part of its home solar and battery offerings
in select markets to drastically reduce installation hurdles when
adopting on-site generation and other all-electric appliances.
Combined with Sunrun's offering, SPAN smart home electrical panels
enable customers to improve the energy resiliency of their home
with solar energy, create fully customizable backup power switches,
better manage home electrification upgrades, gain circuit-level
visibility, and benefit the grid. The pilot includes select markets
initially, with the goal of expanding the pilot over time.
- Homes with electric vehicles consume approximately double the
amount of electricity. Home solar and batteries are needed to
meet this increased strain on the electric system and Sunrun is
well positioned to be the provider of these services given our
expertise managing and installing at-home energy infrastructure,
our national footprint, and reputation as a trusted provider of
clean energy services. We continue to innovate and set the
stage for increased customer value and electricity usage by
building larger systems and offering additional services. In May we
announced a partnership with Ford to be the preferred installer for
Ford Intelligent Backup Power, Ford’s Charge Station and home
integration system, debuting with the all-electric F-150 Lightning.
Sunrun co-developed the bi-directional inverter technology with
Ford that can dispatch power back to the home, and Sunrun has been
selected to distribute and install this technology. The F-150
Lightning can serve as a reliable home backup energy source by
dispatching power to the home during a power outage event. Through
this partnership, customers will also be provided with the
opportunity to install a Sunrun solar and battery system on their
home, enabling them to power their household with clean, affordable
energy and charge their F-150 Lightning with the power of the
sun.
- Our business development and policy teams are actively
educating more utilities and grid operators on the valuable
services networked distributed energy resources can provide. Sunrun
has already forged 12 virtual power plant opportunities and has
continued growing our pipeline. We have over $75 million in
expected revenue from grid service opportunities that have been
awarded or are in late-stage discussions. These opportunities
provide incremental recurring revenue and offer an enhanced
customer value proposition while also further differentiating
Sunrun’s offering from companies that lack the scale, network
density, and technical capabilities to serve this market. We
estimate that over 10% of geographies we serve today have beachhead
virtual power plant opportunities in place, which is expected to
expand to over 50% of our geographies in the coming years.
ESG Efforts: Embracing Sustainability & Investing in
Communities
Sunrun’s mission is to create a planet run by the sun and build
an affordable energy system that combats climate change and
provides energy access for all. We proactively serve all
stakeholders: our customers, our employees, the communities in
which we operate, and our business and financial partners.
Investing in our people and providing meaningful career
opportunities is critical to our success. As the country
embarks on upgrading infrastructure and rewiring our buildings, the
demand for skilled workers will increase substantially. We
are focused on developing a differentiated talent brand and
providing opportunities to train workers to be part of the clean
energy economy. The following recent developments highlight our
commitment to sustainability, investing in people, and investing in
our communities:
- We remain committed to building a differentiated talent brand.
We continue to invest in our people and have expanded the Sunrun
Academy efforts to increase career advancement opportunities. As
part of this initiative, Sunrun launched a program to further the
development of our people whereby all employees have access to an
expanded tuition reimbursement program to build skills needed for
their career. This program will help us train the next leaders,
especially with critical in-demand skills like electrical
work. By Q3, we have seen record levels of employee
engagement in the educational offerings, with more than 20% of
eligible employees initiating the process with our education
provider within just the first few months of launching the program.
Nearly 200 employees have already started the program to become
certified electricians, providing upward career mobility and
helping the country electrify.
- The solar systems we deployed in Q3 are expected to prevent the
emission of 4.6 million metric tons of CO2 over the next thirty
years. Over the last twelve months, Sunrun’s systems are estimated
to have offset more than 2.6 million metric tons of CO2.
Key Operating Metrics
In the third quarter of 2021, Customer Additions were 30,698,
including 24,836 Subscriber Additions. As of September 30,
2021, Sunrun had 630,441 Customers, including 545,727
Subscribers.
Annual Recurring Revenue from Subscribers was $787 million as of
September 30, 2021. The Average Contract Life Remaining of
Subscribers was 17.3 years as of September 30, 2021.
Subscriber Value was $35,734 in the third quarter of 2021 while
Creation Cost was $28,129. Net Subscriber Value was $7,605 in
the third quarter of 2021. Total Value Generated was $188.9 million
in the third quarter of 2021.
Gross Earning Assets as of September 30, 2021 were $9.2 billion.
Net Earning Assets were $4.5 billion, which includes $941 million
in total cash, as of September 30, 2021.
Solar Energy Capacity Installed was 219 Megawatts in the third
quarter of 2021. Solar Energy Capacity Installed for Subscribers
was 178 Megawatts in the third quarter of 2021.
Networked Solar Energy Capacity was 4,457 Megawatts as of
September 30, 2021. Networked Solar Energy Capacity for Subscribers
was 3,886 Megawatts as of September 30, 2021.
Outlook
Management continues to expect Solar Energy Capacity Installed
growth to be 30% for the full-year 2021, pro-forma for Vivint
Solar.
Total Value Generated is expected to be around $700 million for
the full-year 2021, owing to slightly higher material and logistics
costs, continued strong sales growth, and a lower mix of
margin-accretive battery installations than management had
previously forecasted given the dynamic supply chain
environment.
Management continues to expect cost synergies derived from the
acquisition of Vivint Solar to be approximately $120 million in
run-rate synergies by the end of 2021.
Third Quarter 2021 GAAP Results
Total revenue was $438.8 million in the third quarter of 2021,
up $229.0 million, or 109%, from the third quarter of 2020.
Customer agreements and incentives revenue was $231.9 million, an
increase of $117.4 million, or 103%, compared to the third quarter
of 2020. Solar energy systems and product sales revenue was $206.9
million, an increase of $111.6 million, or 117%, compared to the
third quarter of 2020.
Total cost of revenue was $347.0 million, an increase of 127%
year-over-year. Total operating expenses were $576.7 million, an
increase of 112% year-over-year.
Included in operating costs for the third quarter of 2021 were
$1.2 million of non-recurring restructuring expenses related to the
acquisition of Vivint Solar. Operating costs also include
stock-based compensation expenses of $39.3 million in the third
quarter of 2021.
Consistent with purchase accounting standards under GAAP, the
fair value of outstanding equity awards for Vivint Solar employees
was reevaluated upon the closing of the acquisition, which resulted
in a step-up of the value of such awards, which will result in an
increase to non-cash stock-based compensation expense until such
awards have fully vested. Additionally, the value of Solar
Energy Systems was recorded based on a fair value assessment, which
was approximately $1.1 billion higher than the book value at the
date of the acquisition, and will result in additional non-cash
depreciation expense over the estimated useful life of the assets,
partially offset by a write-off of Vivint Solar’s Cost to Obtain
Customer Agreements.
Net income attributable to common stockholders was $24.1
million, or $0.11 per diluted share, in the third quarter of
2021.
Financing Activities
As of November 4, 2021, closed transactions and executed term
sheets provide us expected tax equity and project debt capacity to
fund over 270 megawatts of Solar Energy Capacity Installed for
Subscribers beyond what was deployed through the end of the third
quarter of 2021. In addition, the company has a pipeline of
advance-stage discussions representing more than an estimated two
additional quarters of tax equity capacity.
Conference Call Information
Sunrun is hosting a conference call for analysts and investors
to discuss its third quarter 2021 results and business outlook at
2:00 p.m. Pacific Time today, November 4, 2021. A live audio
webcast of the conference call along with supplemental financial
information will be accessible via the “Investor Relations” section
of Sunrun’s website at https://investors.sunrun.com. The conference
call can also be accessed live over the phone by dialing (866)
682-6100 (toll free) or (862) 298-0702 (toll). An audio replay will
be available following the call on the Sunrun Investor Relations
website for approximately one month.
About Sunrun
Sunrun Inc. (Nasdaq: RUN) is the nation’s leading home solar,
battery storage, and energy services company. Founded in 2007,
Sunrun pioneered home solar service plans to make local clean
energy more accessible to everyone for little to no upfront cost.
Sunrun’s innovative home battery solution brings families
affordable, resilient, and reliable energy. The company can also
manage and share stored solar energy from the batteries to provide
benefits to households, utilities, and the electric grid while
reducing our reliance on polluting energy sources. For more
information, please visit www.sunrun.com.
Forward Looking Statements
This communication contains forward-looking statements related
to Sunrun (the “Company”) within the meaning of Section 27A of
the Securities Act of 1933, and Section 21E of the Securities
Exchange Act of 1934 and the Private Securities Litigation Reform
Act of 1995. Such forward-looking statements include, but are
not limited to, statements related to: the Company’s leadership
team and talent development; the Company’s financial and operating
guidance and expectations; the Company’s business plan,
trajectory and expectations heading into 2022, market leadership,
competitive advantages, operational and financial results and
metrics (and the assumptions related to the calculation of
such metrics); the Company’s momentum in the company’s business
strategies, expectations regarding market share, total addressable
market, customer value proposition, market penetration,
financing activities, financing capacity, product mix, and ability
to manage cash flow and liquidity; the growth of the solar
industry; the Company’s ability to manage suppliers, inventory, and
workforce; supply chains and regulatory impacts affecting supply
chains; factors outside of the Company’s control such as
macroeconomic trends, public health emergencies, natural disasters,
and the impacts of climate change; the legislative and
regulatory environment of the solar industry; expectations
regarding the Company’s storage and energy services businesses, the
Company’s acquisition of Vivint Solar (including cost
synergies), anticipated emissions reductions due to utilization of
the Company’s solar systems; expectations regarding the
growth of home electrification, electric vehicles, virtual power
plants, and distributed energy resources. These statements
are not guarantees of future performance; they reflect the
Company’s current views with respect to future events and are based
on assumptions and estimates and are subject to known and
unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements to be materially
different from expectations or results projected or implied by
forward-looking statements. The risks and uncertainties that
could cause the Company’s results to differ materially from those
expressed or implied by such forward-looking statements
include: the impact of COVID-19 on the Company’s operations; the
Company’s continued ability to manage costs and compete
effectively; the availability of additional financing on
acceptable terms; worldwide economic conditions, including slow or
negative growth rates; rising interest rates; changes in policies
and regulations, including net metering and interconnection
limits or caps and licensing restrictions; the Company’s ability to
attract and retain the Company’s solar partners; supply chain risks
and associated costs; the successful integration of Vivint Solar;
realizing the anticipated benefits of past or future investments,
strategic transactions, or acquisitions, and integrating those
acquisitions; the Company’s leadership team and ability
to retract and retain key employees; changes in the retail
prices of traditional utility generated electricity; the
availability of rebates, tax credits and other incentives; the
availability of solar panels, batteries, and other components
and raw materials; the Company’s business plan and the
Company’s ability to effectively manage the Company’s growth and
labor constraints; the Company’s ability to meet the
covenants in the Company’s investment funds and debt facilities;
factors impacting the solar industry generally, and such other
risks and uncertainties identified in the reports that we
file with the U.S. Securities and Exchange Commission from time to
time. All forward-looking statements used herein are based on
information available to us as of the date hereof, and we assume no
obligation to update publicly these forward-looking
statements for any reason, except as required by law.
Citations to industry and market statistics used herein may be
found in our Investor Presentation, available via the “Investor
Relations” section of Sunrun’s website at
https://investors.sunrun.com.
Consolidated Balance
Sheets(In Thousands)
|
September 30, 2021 |
|
December 31, 2020 |
|
|
|
|
Assets |
|
|
|
Current
assets: |
|
|
|
Cash |
$ |
717,593 |
|
|
$ |
519,965 |
|
Restricted cash |
223,380 |
|
|
188,095 |
|
Accounts receivable, net |
177,826 |
|
|
95,141 |
|
Inventories |
444,519 |
|
|
283,045 |
|
Prepaid expenses and other current assets |
31,342 |
|
|
51,483 |
|
Total current assets |
1,594,660 |
|
|
1,137,729 |
|
Restricted cash |
148 |
|
|
148 |
|
Solar energy systems, net |
9,126,451 |
|
|
8,202,788 |
|
Property and equipment, net |
60,659 |
|
|
62,182 |
|
Intangible assets, net |
14,233 |
|
|
18,262 |
|
Goodwill |
4,280,169 |
|
|
4,280,169 |
|
Other assets |
1,013,349 |
|
|
681,665 |
|
Total assets |
$ |
16,089,669 |
|
|
$ |
14,382,943 |
|
Liabilities and total
equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
347,068 |
|
|
$ |
207,441 |
|
Distributions payable to noncontrolling interests and redeemable
noncontrolling interests |
33,350 |
|
|
28,627 |
|
Accrued expenses and other liabilities |
364,481 |
|
|
325,614 |
|
Deferred revenue, current portion |
109,162 |
|
|
108,452 |
|
Deferred grants, current portion |
8,302 |
|
|
8,251 |
|
Finance lease obligations, current portion |
11,163 |
|
|
11,037 |
|
Line of credit |
209,284 |
|
|
— |
|
Non-recourse debt, current portion |
193,834 |
|
|
195,036 |
|
Pass-through financing obligation, current portion |
6,982 |
|
|
16,898 |
|
Total current liabilities |
1,283,626 |
|
|
901,356 |
|
Deferred revenue, net of current portion |
739,356 |
|
|
690,824 |
|
Deferred grants, net of current portion |
205,684 |
|
|
213,269 |
|
Finance lease obligations, net of current portion |
12,409 |
|
|
12,929 |
|
Line of credit |
— |
|
|
230,660 |
|
Convertible senior notes |
390,049 |
|
|
— |
|
Non-recourse debt, net of current portion |
5,343,639 |
|
|
4,370,449 |
|
Pass-through financing obligation, net of current portion |
316,905 |
|
|
323,496 |
|
Other liabilities |
188,784 |
|
|
268,684 |
|
Deferred tax liabilities |
70,807 |
|
|
81,905 |
|
Total liabilities |
8,551,259 |
|
|
7,093,572 |
|
Redeemable noncontrolling
interests |
596,901 |
|
|
560,461 |
|
Total stockholders’
equity |
6,223,110 |
|
|
6,077,911 |
|
Noncontrolling interests |
718,399 |
|
|
650,999 |
|
Total equity |
6,941,509 |
|
|
6,728,910 |
|
Total liabilities, redeemable noncontrolling interests and
total equity |
$ |
16,089,669 |
|
|
$ |
14,382,943 |
|
Consolidated Statements of
Operations(In Thousands, Except Per Share
Amounts)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenue: |
|
|
|
|
|
|
|
Customer agreements and incentives |
$ |
231,869 |
|
|
$ |
114,485 |
|
|
$ |
625,939 |
|
|
$ |
319,704 |
|
Solar energy systems and product sales |
206,896 |
|
|
95,275 |
|
|
548,786 |
|
|
282,081 |
|
Total revenue |
438,765 |
|
|
209,760 |
|
|
1,174,725 |
|
|
601,785 |
|
Operating expenses: |
|
|
|
|
|
|
|
Cost of customer agreements and incentives |
174,457 |
|
|
77,350 |
|
|
512,073 |
|
|
239,049 |
|
Cost of solar energy systems and product sales |
172,538 |
|
|
75,679 |
|
|
458,208 |
|
|
231,023 |
|
Sales and marketing |
171,462 |
|
|
70,720 |
|
|
442,174 |
|
|
210,691 |
|
Research and development |
5,602 |
|
|
5,205 |
|
|
16,624 |
|
|
14,222 |
|
General and administrative |
51,290 |
|
|
41,829 |
|
|
199,836 |
|
|
111,659 |
|
Amortization of intangible assets |
1,341 |
|
|
1,167 |
|
|
4,029 |
|
|
3,817 |
|
Total operating expenses |
576,690 |
|
|
271,950 |
|
|
1,632,944 |
|
|
810,461 |
|
Loss from operations |
(137,925 |
) |
|
(62,190 |
) |
|
(458,219 |
) |
|
(208,676 |
) |
Interest expense, net |
(89,096 |
) |
|
(51,368 |
) |
|
(238,365 |
) |
|
(152,013 |
) |
Other (expenses) income,
net |
(4,332 |
) |
|
864 |
|
|
18,462 |
|
|
766 |
|
Loss before income taxes |
(231,353 |
) |
|
(112,694 |
) |
|
(678,122 |
) |
|
(359,923 |
) |
Income tax benefit
(expense) |
9,980 |
|
|
(27,293 |
) |
|
(19,058 |
) |
|
(30,424 |
) |
Net loss |
(241,333 |
) |
|
(85,401 |
) |
|
(659,064 |
) |
|
(329,499 |
) |
Net loss attributable to noncontrolling interests and redeemable
noncontrolling interests |
(265,462 |
) |
|
(122,848 |
) |
|
(618,160 |
) |
|
(325,425 |
) |
Net income (loss) attributable to common stockholders |
$ |
24,129 |
|
|
$ |
37,447 |
|
|
$ |
(40,904 |
) |
|
$ |
(4,074 |
) |
Net income (loss) per share attributable to common
stockholders |
|
|
|
|
|
|
|
Basic |
$ |
0.12 |
|
|
$ |
0.30 |
|
|
$ |
(0.20 |
) |
|
$ |
(0.03 |
) |
Diluted |
$ |
0.11 |
|
|
$ |
0.28 |
|
|
$ |
(0.20 |
) |
|
$ |
(0.03 |
) |
Weighted average shares used to compute net income (loss) per share
attributable to common stockholders |
|
|
|
|
|
|
|
Basic |
206,103 |
|
|
125,003 |
|
|
204,355 |
|
|
121,813 |
|
Diluted |
213,016 |
|
|
134,548 |
|
|
204,355 |
|
|
121,813 |
|
Consolidated Statements of Cash
Flows(In Thousands)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Operating
activities: |
|
|
|
|
|
|
|
Net loss |
$ |
(241,333 |
) |
|
$ |
(85,401 |
) |
|
$ |
(659,064 |
) |
|
$ |
(329,499 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
Depreciation and amortization, net of amortization of deferred
grants |
98,856 |
|
|
53,242 |
|
|
286,001 |
|
|
156,257 |
|
Deferred income taxes |
9,980 |
|
|
(27,293 |
) |
|
(18,709 |
) |
|
(30,424 |
) |
Stock-based compensation expense |
39,262 |
|
|
8,217 |
|
|
160,754 |
|
|
37,544 |
|
Interest on pass-through financing obligations |
5,442 |
|
|
5,707 |
|
|
16,288 |
|
|
17,480 |
|
Reduction in pass-through financing obligations |
(11,002 |
) |
|
(9,649 |
) |
|
(32,160 |
) |
|
(28,907 |
) |
Other noncash items |
38,164 |
|
|
10,946 |
|
|
38,656 |
|
|
31,247 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
(17,811 |
) |
|
(12,401 |
) |
|
(90,170 |
) |
|
2,727 |
|
Inventories |
(103,096 |
) |
|
32,540 |
|
|
(161,474 |
) |
|
82,604 |
|
Prepaid and other assets |
(88,391 |
) |
|
(23,613 |
) |
|
(273,948 |
) |
|
(37,958 |
) |
Accounts payable |
68,115 |
|
|
41,422 |
|
|
120,412 |
|
|
(57,513 |
) |
Accrued expenses and other liabilities |
9,256 |
|
|
(10,766 |
) |
|
27,953 |
|
|
(25,964 |
) |
Deferred revenue |
12,493 |
|
|
2,543 |
|
|
49,632 |
|
|
15,647 |
|
Net cash used in operating activities |
(180,065 |
) |
|
(14,506 |
) |
|
(535,829 |
) |
|
(166,759 |
) |
Investing
activities: |
|
|
|
|
|
|
|
Payments for the costs of solar energy systems |
(434,791 |
) |
|
(256,932 |
) |
|
(1,186,330 |
) |
|
(619,012 |
) |
Purchase of equity method investment |
— |
|
|
(65,356 |
) |
|
— |
|
|
(65,356 |
) |
Purchases of property and equipment, net |
(6,128 |
) |
|
(47 |
) |
|
(11,640 |
) |
|
(2,384 |
) |
Net cash used in investing activities |
(440,919 |
) |
|
(322,335 |
) |
|
(1,197,970 |
) |
|
(686,752 |
) |
Financing
activities: |
|
|
|
|
|
|
|
Proceeds from state tax credits, net of recapture |
— |
|
|
(192 |
) |
|
— |
|
|
6,027 |
|
Proceeds from line of credit |
102,001 |
|
|
83,475 |
|
|
526,980 |
|
|
126,950 |
|
Repayment of line of credit |
(110,000 |
) |
|
(95,000 |
) |
|
(548,356 |
) |
|
(141,525 |
) |
Proceeds from issuance of convertible senior notes, net of capped
call transaction |
— |
|
|
— |
|
|
371,998 |
|
|
— |
|
Proceeds from issuance of non-recourse debt |
933,223 |
|
|
245,699 |
|
|
1,691,255 |
|
|
442,950 |
|
Repayment of non-recourse debt |
(427,251 |
) |
|
(171,059 |
) |
|
(753,046 |
) |
|
(208,371 |
) |
Payment of debt fees |
(13,880 |
) |
|
(8,353 |
) |
|
(42,757 |
) |
|
(8,353 |
) |
Proceeds from pass-through financing and other obligations |
2,559 |
|
|
2,007 |
|
|
7,857 |
|
|
5,728 |
|
Early repayment of pass-through financing obligation |
(18,050 |
) |
|
— |
|
|
(18,050 |
) |
|
— |
|
Payment of finance lease obligations |
(3,106 |
) |
|
(2,218 |
) |
|
(9,243 |
) |
|
(7,763 |
) |
Contributions received from noncontrolling interests and redeemable
noncontrolling interests |
324,342 |
|
|
236,906 |
|
|
900,332 |
|
|
611,855 |
|
Distributions paid to noncontrolling interests and redeemable
noncontrolling interests |
(52,302 |
) |
|
(22,612 |
) |
|
(142,036 |
) |
|
(62,541 |
) |
Acquisition of noncontrolling interests |
(37,377 |
) |
|
— |
|
|
(41,572 |
) |
|
— |
|
Net proceeds related to stock-based award activities |
4,343 |
|
|
20,470 |
|
|
23,350 |
|
|
31,839 |
|
Proceeds from shares issued in connection with a subscription
agreement |
— |
|
|
75,000 |
|
|
— |
|
|
75,000 |
|
Net cash provided by financing activities |
704,502 |
|
|
364,123 |
|
|
1,966,712 |
|
|
871,796 |
|
Net change in cash and
restricted cash |
83,518 |
|
|
27,282 |
|
|
232,913 |
|
|
18,285 |
|
Cash and restricted cash,
beginning of period |
857,603 |
|
|
354,232 |
|
|
708,208 |
|
|
363,229 |
|
Cash and restricted cash, end
of period |
$ |
941,121 |
|
|
$ |
381,514 |
|
|
$ |
941,121 |
|
|
$ |
381,514 |
|
Key Operating and Financial
Metrics
In-period volume metrics: |
Three Months EndedSeptember 30,
2021 |
Customer Additions |
30,698 |
Subscriber Additions |
24,836 |
Solar Energy Capacity Installed (in Megawatts) |
218.8 |
Solar Energy Capacity Installed for Subscribers (in Megawatts) |
178.0 |
|
|
In-period value
creation metrics:(1) |
Three Months Ended September 30,
2021 |
Subscriber Value Contracted Period |
$32,385 |
Subscriber Value Renewal Period |
$3,348 |
Subscriber Value |
$35,734 |
Creation Cost |
$28,129 |
Net Subscriber Value |
$7,605 |
Total Value Generated (in millions) |
$188.9 |
|
|
In-period
environmental impact metrics:(1) |
Three Months EndedSeptember 30,
2021 |
Positive Environmental Impact from Customers (over trailing twelve
months, in millions of metric tons of CO2 avoidance) |
2.6 |
Positive Expected Lifetime Environmental Impact from Customer
Additions (in millions of metric tons of CO2 avoidance) |
4.6 |
|
|
Period-end
metrics: |
September 30, 2021 |
Customers |
630,441 |
Subscribers |
545,727 |
Networked Solar Energy Capacity (in megawatts) |
4,457 |
Networked Solar Energy Capacity for Subscribers (in megawatts) |
3,886 |
Annual Recurring Revenue (in millions) |
$787 |
Average Contract Life Remaining (in years) |
17.3 |
Gross Earning Assets Contracted Period (in millions) |
$6,229 |
Gross Earning Assets Renewal Period (in millions) |
$2,929 |
Gross Earning Assets (in millions) |
$9,158 |
Net Earning Assets (in millions) |
$4,547 |
Note that figures presented above may not sum due to rounding.
For adjustments related to Subscriber Value and Creation Cost,
please see the supplemental Creation Cost Methodology memo for each
applicable period, which is available on investors.sunrun.com.
Definitions
Deployments represent solar energy systems,
whether sold directly to customers or subject to executed Customer
Agreements (i) for which we have confirmation that the systems are
installed on the roof, subject to final inspection, (ii) in the
case of certain system installations by our partners, for which we
have accrued at least 80% of the expected project cost (inclusive
of acquisitions of installed systems), or (iii) for multi-family
and any other systems that have reached our internal milestone
signaling construction can commence following design completion,
measured on the percentage of the system that has been completed
based on expected system cost.
Customer Agreements refer to, collectively,
solar power purchase agreements and solar leases.
Subscriber Additions represent the number of
Deployments in the period that are subject to executed Customer
Agreements.
Customer Additions represent the number of
Deployments in the period.
Solar Energy Capacity Installed represents the
aggregate megawatt production capacity of our solar energy systems
that were recognized as Deployments in the period.
Solar Energy Capacity Installed for Subscribers
represents the aggregate megawatt production capacity of our solar
energy systems that were recognized as Deployments in the period
that are subject to executed Customer Agreements.
Creation Cost represents the sum of certain
operating expenses and capital expenditures incurred divided by
applicable Customer Additions and Subscriber Additions in the
period. Creation Cost is comprised of (i) installation costs,
which includes the increase in gross solar energy system assets and
the cost of customer agreement revenue, excluding depreciation
expense of fixed solar assets, and operating and maintenance
expenses associated with existing Subscribers, plus (ii) sales and
marketing costs, including increases to the gross capitalized costs
to obtain contracts, net of the amortization expense of the costs
to obtain contracts, plus (iii) general and administrative costs,
and less (iv) the gross profit derived from selling systems to
customers under sale agreements and Sunrun’s product distribution
and lead generation businesses. Creation Cost excludes stock based
compensation, amortization of intangibles, and research and
development expenses, along with other items the company deems to
be non-recurring or extraordinary in nature.
Subscriber Value represents the per subscriber
value of upfront and future cash flows (discounted at 5%) from
Subscriber Additions in the period, including expected payments
from customers as set forth in Customer Agreements, net proceeds
from tax equity finance partners, payments from utility incentive
and state rebate programs, contracted net grid service program cash
flows, projected future cash flows from solar energy renewable
energy credit sales, less estimated operating and maintenance costs
to service the systems and replace equipment, consistent with
estimates by independent engineers, over the initial term of the
Customer Agreements and estimated renewal period. For Customer
Agreements with 25 year initial contract terms, a 5 year renewal
period is assumed. For a 20 year initial contract term, a 10 year
renewal period is assumed. In all instances, we assume a
30-year customer relationship, although the customer may renew for
additional years, or purchase the system.
Net Subscriber Value represents Subscriber
Value less Creation Cost.
Total Value Generated represents Net Subscriber
Value multiplied by Subscriber Additions.
Customers represent the cumulative number of
Deployments, from the company’s inception through the measurement
date.
Subscribers represent the cumulative number of
Customer Agreements for systems that have been recognized as
Deployments through the measurement date.
Networked Solar Energy Capacity represents the
aggregate megawatt production capacity of our solar energy systems
that have been recognized as Deployments, from the company’s
inception through the measurement date.
Networked Solar Energy Capacity for Subscribers
represents the aggregate megawatt production capacity of our solar
energy systems that have been recognized as Deployments, from the
company’s inception through the measurement date, that have been
subject to executed Customer Agreements.
Gross Earning Assets is calculated as Gross
Earning Assets Contracted Period plus Gross Earning Assets Renewal
Period.
Gross Earning Assets Contracted Period
represents the present value of the remaining net cash flows
(discounted at 5%) during the initial term of our Customer
Agreements as of the measurement date. It is calculated as the
present value of cash flows (discounted at 5%) that we would
receive from Subscribers in future periods as set forth in Customer
Agreements, after deducting expected operating and maintenance
costs, equipment replacements costs, distributions to tax equity
partners in consolidated joint venture partnership flip structures,
and distributions to project equity investors. We include cash
flows we expect to receive in future periods from state incentive
and rebate programs, contracted sales of solar renewable energy
credits, and awarded net cash flows from grid service programs with
utilities or grid operators.
Gross Earning Assets Renewal Period is the
forecasted net present value we would receive upon or following the
expiration of the initial Customer Agreement term but before the
30th anniversary of the system’s activation (either in the form of
cash payments during any applicable renewal period or a system
purchase at the end of the initial term), for Subscribers as of the
measurement date. We calculate the Gross Earning Assets Renewal
Period amount at the expiration of the initial contract term
assuming either a system purchase or a renewal, forecasting only a
30-year customer relationship (although the customer may renew for
additional years, or purchase the system), at a contract rate equal
to 90% of the customer’s contractual rate in effect at the end of
the initial contract term. After the initial contract term, our
Customer Agreements typically automatically renew on an annual
basis and the rate is initially set at up to a 10% discount to
then-prevailing utility power prices.
Net Earning Assets represents Gross Earning
Assets, plus total cash, less adjusted debt and less pass-through
financing obligations, as of the same measurement date. Debt is
adjusted to exclude a pro-rata share of non-recourse debt
associated with funds with project equity structures along with
debt associated with the company’s ITC safe harboring facility.
Because estimated cash distributions to our project equity partners
are deducted from Gross Earning Assets, a proportional share of the
corresponding project level non-recourse debt is deducted from Net
Earning Assets, as such debt would be serviced from cash flows
already excluded from Gross Earning Assets.
Annual Recurring Revenue represents revenue
arising from Customer Agreements over the following twelve months
for Subscribers that have met initial revenue recognition criteria
as of the measurement date.
Average Contract Life Remaining represents the
average number of years remaining in the initial term of Customer
Agreements for Subscribers that have met revenue recognition
criteria as of the measurement date.
Positive Environmental Impact from Customers
represents the estimated reduction in carbon emissions as a result
of energy produced from our Networked Solar Energy Capacity over
the trailing twelve months. The figure is presented in millions of
metric tons of avoided carbon emissions and is calculated using the
Environmental Protection Agency’s AVERT tool.
Positive Expected Lifetime Environmental Impact from
Customer Additions represents the estimated reduction in
carbon emissions over thirty years as a result of energy produced
from solar energy systems that were recognized as Deployments in
the period. The figure is presented in millions of metric tons of
avoided carbon emissions and is calculated using the Environmental
Protection Agency’s AVERT tool.
Investor & Analyst Contact:
Patrick JobinSenior Vice President, Finance &
IRinvestors@sunrun.com
Media Contact:
Wyatt SemanekPublic Relations Managerpress@sunrun.com
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