Sunnova Reports First Quarter 2024 Financial Results
First Quarter 2024 Highlights
-
Deployed 27,000 customers in the first quarter of 2024; bringing total customer count to 438,500 as of
March 31, 2024 ; - Total Adjusted Operating Expense decreased in the first quarter of 2024 compared to the prior quarter;
-
Unrestricted Cash increased
$18.9 million in the first quarter of 2024 compared to the prior quarter; and - Selected as exclusive national solar and battery storage services provider for The Home Depot.
“Our team is squarely focused on increasing our cash generation and maintaining our margins. Through continued cost efficiencies, maximizing our asset-level financing, further utilizing investment tax credit adders, and re-focusing on our core adaptive energy customers, we expect to be able to drive improved performance, all while remaining true to the values that have driven Sunnova forward for the last twelve years,” said
Berger continued, “During the first quarter we acted on several initiatives such as rebalancing our capital expenditure budget and updating our pricing that will continue to bolster our cash generation. Early success helped us to increase our unrestricted cash balance by
First Quarter 2024 Results
Revenue decreased by
Total operating expense, net increased by
Adjusted Operating Expense increased by
Sunnova incurred a net loss of
Adjusted EBITDA was
Principal proceeds from customer notes receivable (net of amounts recorded in revenue) and proceeds from investments in solar receivables was
Interest income was
Liquidity & Capital Resources
As of
2024 Full Year Guidance
We are lowering our guidance for customer additions. As Sunnova re-focuses on its core adaptive energy customers it now expects full year 2024 customer additions to fall between 140,000 and 150,000.
We are reaffirming our guidance for Adjusted EBITDA, interest income, and principal proceeds from customer notes receivable, net of amounts recorded in revenue, and proceeds from investments in solar receivables.
- Customer additions between 140,000 and 150,000;
-
Adjusted EBITDA between
$350 million and$450 million ; -
Interest income between
$150 million and$190 million ; and -
Principal proceeds from customer notes receivable, net of amounts recorded in revenue, and proceeds from investments in solar receivables between
$210 million and$250 million .
Non-GAAP Financial Measures
We present our operating results in accordance with accounting principles generally accepted in the
Conference Call Information
Sunnova is hosting a conference call for analysts and investors to discuss its first quarter 2024 results at
A replay will be available two hours after the call and can be accessed by dialing 866-813-9403 (toll-free) or 929-458-6194. The access code for the replay is 195253. The replay will be available until
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investor Relations section of Sunnova’s website.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or Sunnova’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "going to," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern Sunnova’s expectations, strategy, priorities, plans or intentions. Forward-looking statements in this release include, but are not limited to, statements regarding our level of growth, customer value propositions, technological developments, service levels, the ability to achieve our 2024 operational and financial targets, operating performance, including its outlook and guidance, demand for Sunnova’s products and services, future financing and ability to raise capital therefrom, discussions of planned sales of loans, and references to Adjusted EBITDA and customer P&I payments from solar loans. Sunnova’s expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including risks regarding our ability to forecast our business due to our limited operating history, supply chain uncertainties, results of operations and financial position, our competition, changes in regulations applicable to our business, fluctuations in the solar and home-building markets, availability of capital, and our ability to attract and retain dealers and customers and manage our dealer and strategic partner relationships. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in Sunnova’s filings with the
About Sunnova
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
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(in thousands, except share amounts and share par values) |
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|
As of
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As of
|
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Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
231,711 |
|
|
$ |
212,832 |
|
Accounts receivable—trade, net |
|
35,756 |
|
|
|
40,767 |
|
Accounts receivable—other |
|
163,724 |
|
|
|
253,350 |
|
Other current assets, net of allowance of |
|
386,222 |
|
|
|
429,299 |
|
Total current assets |
|
817,413 |
|
|
|
936,248 |
|
|
|
|
|
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Property and equipment, net |
|
6,042,158 |
|
|
|
5,638,794 |
|
Customer notes receivable, net of allowance of |
|
3,890,835 |
|
|
|
3,735,986 |
|
Intangible assets, net |
|
126,539 |
|
|
|
134,058 |
|
Other assets |
|
938,629 |
|
|
|
895,885 |
|
Total assets (1) |
$ |
11,815,574 |
|
|
$ |
11,340,971 |
|
|
|
|
|
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Liabilities, Redeemable Noncontrolling Interests and Equity |
|
|
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Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
374,861 |
|
|
$ |
355,791 |
|
Accrued expenses |
|
87,626 |
|
|
|
122,355 |
|
Current portion of long-term debt |
|
493,496 |
|
|
|
483,497 |
|
Other current liabilities |
|
146,449 |
|
|
|
133,649 |
|
Total current liabilities |
|
1,102,432 |
|
|
|
1,095,292 |
|
|
|
|
|
||||
Long-term debt, net |
|
7,273,736 |
|
|
|
7,030,756 |
|
Other long-term liabilities |
|
1,117,617 |
|
|
|
1,086,011 |
|
Total liabilities (1) |
|
9,493,785 |
|
|
|
9,212,059 |
|
|
|
|
|
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Redeemable noncontrolling interests |
|
187,312 |
|
|
|
165,872 |
|
|
|
|
|
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Stockholders' equity: |
|
|
|
||||
Common stock, 123,971,555 and 122,466,515 shares issued as of |
|
12 |
|
|
|
12 |
|
Additional paid-in capital—common stock |
|
1,766,966 |
|
|
|
1,755,461 |
|
Accumulated deficit |
|
(162,973 |
) |
|
|
(228,583 |
) |
Total stockholders' equity |
|
1,604,005 |
|
|
|
1,526,890 |
|
Noncontrolling interests |
|
530,472 |
|
|
|
436,150 |
|
Total equity |
|
2,134,477 |
|
|
|
1,963,040 |
|
Total liabilities, redeemable noncontrolling interests and equity |
$ |
11,815,574 |
|
|
$ |
11,340,971 |
|
(1) The consolidated assets as of |
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(in thousands, except share and per share amounts) |
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|
Three Months Ended
|
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|
2024 |
|
2023 |
||||
Revenue |
$ |
160,904 |
|
|
$ |
161,696 |
|
|
|
|
|
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Operating expense: |
|
|
|
||||
Cost of revenue—depreciation |
|
42,156 |
|
|
|
28,197 |
|
Cost of revenue—inventory sales |
|
21,892 |
|
|
|
51,779 |
|
Cost of revenue—other |
|
39,348 |
|
|
|
19,224 |
|
Operations and maintenance |
|
36,945 |
|
|
|
10,739 |
|
General and administrative |
|
117,111 |
|
|
|
101,261 |
|
Other operating income |
|
(12,326 |
) |
|
|
(723 |
) |
Total operating expense, net |
|
245,126 |
|
|
|
210,477 |
|
|
|
|
|
||||
Operating loss |
|
(84,222 |
) |
|
|
(48,781 |
) |
|
|
|
|
||||
Interest expense, net |
|
84,601 |
|
|
|
85,607 |
|
Interest income |
|
(35,696 |
) |
|
|
(24,788 |
) |
Other (income) expense |
|
(24 |
) |
|
|
236 |
|
Loss before income tax |
|
(133,103 |
) |
|
|
(109,836 |
) |
|
|
|
|
||||
Income tax (benefit) expense |
|
(43,028 |
) |
|
|
510 |
|
Net loss |
|
(90,075 |
) |
|
|
(110,346 |
) |
Net loss attributable to redeemable noncontrolling interests and noncontrolling interests |
|
(20,115 |
) |
|
|
(29,263 |
) |
Net loss attributable to stockholders |
$ |
(69,960 |
) |
|
$ |
(81,083 |
) |
|
|
|
|
||||
Net loss per share attributable to stockholders—basic and diluted |
$ |
(0.57 |
) |
|
$ |
(0.70 |
) |
Weighted average common shares outstanding—basic and diluted |
|
122,894,548 |
|
|
|
115,073,975 |
|
|
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(in thousands) |
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|
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
||||
Net loss |
$ |
(90,075 |
) |
|
$ |
(110,346 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
||||
Depreciation |
|
50,759 |
|
|
|
32,671 |
|
Impairment and loss on disposals, net |
|
21,718 |
|
|
|
647 |
|
Amortization of intangible assets |
|
7,108 |
|
|
|
7,108 |
|
Amortization of deferred financing costs |
|
8,288 |
|
|
|
5,171 |
|
Amortization of debt discount |
|
6,656 |
|
|
|
3,512 |
|
Non-cash effect of equity-based compensation plans |
|
13,587 |
|
|
|
9,515 |
|
Non-cash direct sales revenue |
|
(13,750 |
) |
|
|
(12,161 |
) |
Provision for current expected credit losses and other bad debt expense |
|
1,674 |
|
|
|
11,858 |
|
Unrealized (gain) loss on derivatives |
|
(30,698 |
) |
|
|
23,616 |
|
Unrealized gain on fair value instruments and equity securities |
|
(12,339 |
) |
|
|
(487 |
) |
Other non-cash items |
|
11,065 |
|
|
|
3,261 |
|
Changes in components of operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
48,507 |
|
|
|
20,837 |
|
Other current assets |
|
(6,585 |
) |
|
|
(43,060 |
) |
Other assets |
|
(52,524 |
) |
|
|
(80,308 |
) |
Accounts payable |
|
16,591 |
|
|
|
(10,618 |
) |
Accrued expenses |
|
(39,083 |
) |
|
|
(11,588 |
) |
Other current liabilities |
|
8,104 |
|
|
|
(3,470 |
) |
Other long-term liabilities |
|
(14,639 |
) |
|
|
(15,485 |
) |
Net cash used in operating activities |
|
(65,636 |
) |
|
|
(169,327 |
) |
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
||||
Purchases of property and equipment |
|
(398,768 |
) |
|
|
(289,296 |
) |
Payments for investments and customer notes receivable |
|
(114,044 |
) |
|
|
(274,362 |
) |
Proceeds from customer notes receivable |
|
50,538 |
|
|
|
36,111 |
|
Proceeds from investments in solar receivables |
|
2,259 |
|
|
|
2,132 |
|
Other, net |
|
1,332 |
|
|
|
1,120 |
|
Net cash used in investing activities |
|
(458,683 |
) |
|
|
(524,295 |
) |
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
||||
Proceeds from long-term debt |
|
729,499 |
|
|
|
604,240 |
|
Payments of long-term debt |
|
(475,190 |
) |
|
|
(188,724 |
) |
Payments on notes payable |
|
(2,507 |
) |
|
|
— |
|
Payments of deferred financing costs |
|
(12,625 |
) |
|
|
(6,832 |
) |
Proceeds from issuance of common stock, net |
|
1,884 |
|
|
|
(1,488 |
) |
Contributions from redeemable noncontrolling interests and noncontrolling interests |
|
301,728 |
|
|
|
174,951 |
|
Distributions to redeemable noncontrolling interests and noncontrolling interests |
|
(105,240 |
) |
|
|
(8,554 |
) |
Payments of costs related to redeemable noncontrolling interests and noncontrolling interests |
|
(8,517 |
) |
|
|
(4,511 |
) |
Proceeds from sales of investment tax credits for redeemable noncontrolling interests and noncontrolling interests |
|
88,776 |
|
|
|
— |
|
Other, net |
|
(370 |
) |
|
|
(211 |
) |
Net cash provided by financing activities |
|
517,438 |
|
|
|
568,871 |
|
Net decrease in cash, cash equivalents and restricted cash |
|
(6,881 |
) |
|
|
(124,751 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
494,402 |
|
|
|
545,574 |
|
Cash, cash equivalents and restricted cash at end of period |
|
487,521 |
|
|
|
420,823 |
|
Restricted cash included in other current assets |
|
(28,765 |
) |
|
|
(52,699 |
) |
Restricted cash included in other assets |
|
(227,045 |
) |
|
|
(157,240 |
) |
Cash and cash equivalents at end of period |
$ |
231,711 |
|
|
$ |
210,884 |
|
Key Financial and Operational Metrics |
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|
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
|
(in thousands) |
||||||
Reconciliation of Net Loss to Adjusted EBITDA: |
|
|
|
||||
Net loss |
$ |
(90,075 |
) |
|
$ |
(110,346 |
) |
Interest expense, net |
|
84,601 |
|
|
|
85,607 |
|
Interest income |
|
(35,696 |
) |
|
|
(24,788 |
) |
Income tax (benefit) expense |
|
(43,028 |
) |
|
|
510 |
|
Depreciation expense |
|
50,759 |
|
|
|
32,671 |
|
Amortization expense |
|
7,527 |
|
|
|
7,338 |
|
EBITDA |
|
(25,912 |
) |
|
|
(9,008 |
) |
Non-cash compensation expense |
|
13,587 |
|
|
|
9,515 |
|
ARO accretion expense |
|
1,477 |
|
|
|
1,081 |
|
Non-cash disaster losses |
|
(10 |
) |
|
|
— |
|
Unrealized gain on fair value instruments and equity securities |
|
(12,339 |
) |
|
|
(487 |
) |
Amortization of payments to dealers for exclusivity and other bonus arrangements |
|
1,974 |
|
|
|
1,386 |
|
Provision for current expected credit (gains) losses |
|
(268 |
) |
|
|
10,259 |
|
Non-cash inventory and other impairments |
|
19,982 |
|
|
|
— |
|
ITC sales |
|
47,953 |
|
|
|
— |
|
Other, net |
|
— |
|
|
|
1,807 |
|
Adjusted EBITDA |
$ |
46,444 |
|
|
$ |
14,553 |
|
|
Three Months Ended
|
||||
|
2024 |
|
2023 |
||
|
(in thousands) |
||||
Interest income |
$ |
35,696 |
|
$ |
24,788 |
Principal proceeds from customer notes receivable, net of related revenue |
$ |
39,616 |
|
$ |
29,098 |
Proceeds from investments in solar receivables |
$ |
2,259 |
|
$ |
2,132 |
|
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
|
(in thousands, except per system data) |
||||||
Reconciliation of Total Operating Expense, Net to Adjusted Operating Expense: |
|
|
|
||||
Total operating expense, net |
$ |
245,126 |
|
|
$ |
210,477 |
|
Depreciation expense |
|
(50,759 |
) |
|
|
(32,671 |
) |
Amortization expense |
|
(7,527 |
) |
|
|
(7,338 |
) |
Non-cash compensation expense |
|
(13,587 |
) |
|
|
(9,515 |
) |
ARO accretion expense |
|
(1,477 |
) |
|
|
(1,081 |
) |
Non-cash disaster losses |
|
10 |
|
|
|
— |
|
Amortization of payments to dealers for exclusivity and other bonus arrangements |
|
(1,974 |
) |
|
|
(1,386 |
) |
Provision for current expected credit gains (losses) |
|
268 |
|
|
|
(10,259 |
) |
Non-cash inventory and other impairments |
|
(19,982 |
) |
|
|
— |
|
Cost of revenue related to direct sales |
|
(18,421 |
) |
|
|
(7,597 |
) |
Cost of revenue related to cash sales |
|
(13,839 |
) |
|
|
(9,345 |
) |
Cost of revenue related to inventory sales |
|
(21,892 |
) |
|
|
(51,779 |
) |
Unrealized gain on fair value instruments |
|
12,315 |
|
|
|
723 |
|
Gain on held-for-sale loans |
|
24 |
|
|
|
— |
|
Other, net |
|
— |
|
|
|
(1,807 |
) |
Adjusted operating expense |
$ |
108,285 |
|
|
$ |
78,422 |
|
Adjusted operating expense per weighted average system |
$ |
250 |
|
|
$ |
267 |
|
|
As of
|
|
As of
|
Number of customers |
438,500 |
|
419,200 |
|
Three Months Ended
|
||
|
2024 |
|
2023 |
Weighted average number of systems (excluding loan agreements and cash sales) |
259,400 |
|
197,500 |
Weighted average number of systems with loan agreements |
160,900 |
|
88,700 |
Weighted average number of systems with cash sales |
13,500 |
|
7,300 |
Weighted average number of systems |
433,800 |
|
293,500 |
|
As of
|
|
As of
|
||
|
(in millions) |
||||
Estimated gross contracted customer value - PV6 |
$ |
9,490 |
|
$ |
9,097 |
Key Terms for Our Key Metrics and Non-GAAP Financial Measures
Estimated Gross Contracted Customer Value. Estimated gross contracted customer value as of a specific measurement date represents the sum of the present value of the remaining estimated future net cash flows we expect to receive from existing customers during the initial contract term of our customer agreements, which are typically 25 years in length, plus the present value of future net cash flows we expect to receive from the sale of related solar renewable energy certificates ("SRECs"), either under existing contracts or in future sales, plus the cash flows we expect to receive from energy services programs such as grid services, plus the carrying value of outstanding customer loans on our balance sheet. From these aggregate estimated initial cash flows, we subtract the present value of estimated net cash distributions to redeemable noncontrolling interests and noncontrolling interests and estimated operating, maintenance and administrative expenses associated with the customer agreements. These estimated future cash flows reflect the projected monthly customer payments over the life of our customer agreements and depend on various factors including but not limited to agreement type, contracted rates, expected sun hours and the projected production capacity of the solar equipment installed. For the purpose of calculating this metric, we discount all future cash flows at 6%.
Number of Customers. We define number of customers to include every unique premises on which a Sunnova product or Sunnova-financed product is installed or on which Sunnova is obligated to perform services for a counterparty. We track the total number of customers as an indicator of our historical growth and our rate of growth from period to period.
Weighted Average Number of Systems. We calculate the weighted average number of systems based on the number of months a customer and any additional service obligation related to a solar energy system is in-service during a given measurement period. The weighted average number of systems reflects the number of systems at the beginning of a period, plus the total number of new systems added in the period adjusted by a factor that accounts for the partial period nature of those new systems. For purposes of this calculation, we assume all new systems added during a month were added in the middle of that month. The number of systems for any end of period will exceed the number of customers, as defined above, for that same end of period as we are also including any additional services and/or contracts a customer or third party executed for the additional work for the same residence or business. We track the weighted average system count in order to accurately reflect the contribution of the appropriate number of systems to key financial metrics over the measurement period.
Definitions of Non-GAAP Measures
Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) excluding the impacts of interest expense, income tax (benefit) expense, depreciation and amortization expense, non-cash compensation expense, asset retirement obligation ("ARO") accretion expense, non-cash disaster losses, losses on unenforceable contracts, losses on extinguishment of long-term debt, unrealized gains and losses on fair value instruments and equity securities, amortization of payments to dealers for exclusivity and other bonus arrangements, provision for current expected credit losses and non-cash inventory and other impairments and including the impacts of investment tax credit ("ITC") sales.
Adjusted Operating Expense. We define Adjusted Operating Expense as total operating expense less depreciation and amortization expense, non-cash disaster losses, amortization of payments to dealers for exclusivity and other bonus arrangements, cost of revenue related to direct sales, cost of revenue related to cash sales, cost of revenue related to inventory sales, unrealized gains and losses on fair value instruments, gains and losses on held-for-sale loans and excluding the effect of certain non-recurring items we do not consider to be indicative of our ongoing operating performance such as, but not limited to, losses on unenforceable contracts and other non-cash items such as non-cash compensation expense, ARO accretion expense, provision for current expected credit losses and non-cash inventory and other impairments.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240430620615/en/
Investor Contact:
IR@sunnova.com
877-770-5211
Media Contact:
Ryan.Bechtold@sunnova.com
Source: