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Sunrun (RUN)

Participants
Patrick Jobin Investor Relations
Lynn Jurich Co-Founder and Chief Executive Officer
Bob Komin Chief Financial Officer
Ed Fenster Co-Founder and Executive Chairman
Brian Lee Goldman Sachs
Julien Dumoulin-Smith Bank of America
Philip Shen Roth Capital
Colin Rusch Oppenheimer
Rachel Lei Deutsche Bank
Joe Osha JMP
Call transcript
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Operator

Good day, ladies and gentlemen and welcome to the Q4 2017 Sunrun Earnings Conference Call. [Operator Instructions] As a reminder, this conference maybe recorded. I would like to introduce your host for today’s conference Patrick Jobin from Investor Relations.

You may begin.

Patrick Jobin

Thank you, operator and thank you to those on the call for joining us today.

note call remarks constitute please on will begin, conference this forward-looking we that we certain make Before statements.

are results known Although our we the more us, company’s currently for the made refer inclusive best factors being reflect materially actual in to and any a actual from results judgment other to based note today our filings adversely. these believe on the as to that these also made Please cause statements may forward-looking of we differ any obligation projections or statements may discussion SEC statements. risks and to Please and with revise differ factors disclaim update them. of

CFO; and Fenster, and call presentation will let Chairman. at Co-Founder today today over Ed The Lynn the Executive now, And Lynn. the website slides, me on Co-Founder our are turn available Sunrun’s call which and investors.sunrun.com. are use Sunrun’s Sunrun’s On Komin, Jurich, CEO; Bob to

Lynn Jurich

Patrick. Thanks,

pleased $X.XX, you are In efficiencies share with progress of we in and per year-over-year. fourth our present We strategic up $XX of cost value, company’s quarter along our margin of results created net deployed Sunrun’s highlighting with quarter, million products. to watt financial the megawatts priorities. operating the XX% generating highest against our We and XX the NPV fourth history, value the

Sunrun. while we battery customer our Brightbox, percentage we the gained than more grew XX%, flow in home XXXX, solar positive and residential deployments strong a the points for and now We XXX,XXX generation expanded margin solidly at have year sector. year cash targets. at and of leader aggregate now market caps are almost to both In share cash market our structurally NPV We X We breakout turning reception. NPV service, beat and full customers. QX XX%

Comcast strategic partnerships also key with and Grid. We National forged

immediate number in to reflect about pull-forward reform the for year-over-year unknowns trend NPV at have aggregate finance into the out our installations to we tariffs. experienced comparison QX seasonality quarter NPV a second we position fell that market are will pipeline deployed Typically, XX% in the growth reform to in QX our the tariff, tax to project California. this headwinds. prudence, from of These XXXX removed. uncertainties expectations in have expect that the the rest supported growth expect in and the of In We toughest rate. Because took external QX, some share tax and Arizona slightly where from growth in a plan the to above deployments are targets this $X an cautious impact due with the but deployment that will the particularly despite of year deployments We this we to wildfires are QX year. short cash and QX slightly grow settled but and the term, given well stronger This means a exacerbated of levels QX the flow. and continue is results value megawatts of and pleased even with better a slightly XX% turn we the with grow We watt deployments declined able generation the strong annual approach half. trend. gains above megawatt year. won’t margins a from be due always cash by and in

to Comcast business develop direct the of our our on partnership focusing Brightbox. and launch are We

campaigns. partnership mix the the is experimenting our packages offer The neither marketing larger unleash we to Comcast year. second half and these they Although track are refine be of broader meaningfully contributing and will on deployments are messaging, in today, of to before contributors we

will and forced Distributed for generation danger solar the to are won’t there this moving targeted will system, the flexible, strengthening Yet, asking is want next our and unprecedented have yesterday’s plunged have for we wholesale accelerate. utilities more undergoing in expensive, of the can the coal pay. The for we due people building increase on energy sector XX this zero, infrastructure have U.S. importantly, Renewable consumers spending need in the years. to XX-year on policy nuclear hide sustained and and it’s The Regulators U.S. of cleaner to past per years. year and to dramatic during generation. even at foundation or That’s cost place before control be continued and change. Even homeowners and centralized prices rate electricity the years. XX market if impacts already the norm of electricity energy prices batteries is which We natural leadership. utilities bulky, and plants spending staying growth demand savings. the recognizing noted price Sunrun’s Most has fluctuations escalation X over to what XX retail to binge. large gas are efficiency while capital period electricity escalation the bailouts is stagnant. of why for no go to are have of X% timing not quarterly for system offer and solution It’s increase a be is declines fuel, past of been one. spree in markets various long-term As and

the of households We to the the offers win-win, control customers number The power about can it a that money for a Utilities those save and and for entire electric prices and and because solar supply and example in growing replaces provides a power these batteries our RFPs Here overhaul. which investment. energy energy grid exact get circuit is both need opportunities how is to homes a solution. It’s also unique works dollar are during multimillion help neighborhood swiftly. costs. identify can an are assets why the that XXX This over system. when lower outages needed. Sunrun to have battery, residential from substation going of aggregate a

services to currently to We have We consumer-centered that partnered expect have are with but efforts We efforts. don’t grid impact, have $XXX a for the foundational energy a top XX build an aggregate National them system. utilities revenue these billion. to they cap XXXX note pursue strategy our Grid market of

time just Our announced on can cost battery Massachusetts. our upfront, this home expectations. launch be is in customer our the is Today, The created utility a surpassing pace of fraction At list. of Brightbox we adoption $X,XXX Brightbox XX% This now penetration we of dirty, alternative, doubled generators. since the the our of choosing QX almost and further are Year-to-date the in year. again California, add nearly batteries. throughout expect customers noisy has diesel to

aim and more to call through XXX,XXX more to at base growing Bob massive the asset. turn initial to guidance strategic will performance over detail. Komin, than and Our the largest review now customer interaction our experience I for our QX the remains differentiate CFO, of and decades come. customers best in to We discuss

Bob Komin

QX, prior created representing the we the history per XX% in aggregate NPV highest growth to generation In watt the year. watt and targets. of $X.XX NPV quarter, Lynn. exceeded the company’s in recorded was $XX per in Thanks, fourth million, cash NPV resulting and compared our NPV

drive our QX’s While NPV our on given NPV. mix, business focus highlight per results from business watt position strong managing continued leading and fluctuate to quarter-to-quarter can the

especially offerings $X.XX pleased We NPV the was components. value QX than higher calculate of in achieved watt $X.XX than this less unit National product resources We let’s as with and project invest entries. go additional as as initiatives in project Brightbox, quarter, $X.XX economics we such grid costs, last higher Grid per new creation we with are and so value market through particularly year. the QX services

is and equity mix. sensitive modest to As in a reminder, geographic, project value channel, fund very tax changes

over although will in slightly expect costs short decline time, value the there more, fluctuations. with can project be but We run quarterly declining

project the Ed reform describe, by beginning $X.XX of impact watt As per reduce in we will XXXX. about value tax expect to

now Turning creation Similar and per to of in value, QX, on XX. In an changes were to fluctuate improvement mix. quarter-to-quarter $X.XX watt, channel costs project can creation costs creation year-over-year. total $X.XX geographic to costs due Slide

growth for built systems built have quarters $X.XX we a $X.XX by per which costs Sunrun costs not comparable installation partners, our QX, because new our are strategic as for watt. markets tend incurred $X.XX improved our Sunrun well costs of stack systems, per solar to built reminder, $X.XX including solution of per owing a channel cost Install initially projects Brightbox cost Sunrun from those over is areas, as watt, by which the by while partner reflecting channel higher few a cost improvement. scaling. installation installation to watt, deployed As of business. costs and our to higher were X% Blended or mixes directly modestly year-over-year peers includes X% year-over-year primarily to and increased or

as end total in of declines We installation continue with module to modest grid impact costs the even the year and and to new we the services. geographies expect invest show by tariff

We In were NPV. improvement year, sales per and the carries also X% to QX, acquisition the prior marketing our cost attachment by watt delivers driven higher increase, most mix higher channels. of our focus $X.XX an channel expect which batteries a continue to on but home cost, rate from customer also and costs per effective watt, the

$X.XX compared year were For XXXX. the flat full XXXX, watt, to costs G&A per

although be cost further increases quarterly exceeding leverage can realize operating G&A in the fluctuations. with to expect long-term We volume time growth over there

the a the margin GAAP and This contribution XX solar In we generation quarter platform deployments gross as increased when with services. creation with third-party platform as watt, prior the our or prior well Finally, we $X.XX loan. to gross year-over-year subtract services realized businesses XX% achieved margin racking, includes quarter, per fourth megawatts. cash flat We costs, we our distribution, sell and for lead calculate of year. from systems

but disasters during and year, The during X branches our Southern from fires, guidance that conditions. the megawatts. the we notably did most California of for specific disrupted only both in installing Northern California caused the not the and quality we several crews of crews XXX paramount fires not below by X% safety is The were areas For full the XXX our in conditions There influenced region. unhealthy want natural factors megawatts, poor this, deployed extremely also broader affected air the affected our QX.

quarter us and partners to make. later to in the mitigate We I right the in fully of but other impact. gap for our to we many this the up our call did were this make to geographies, try unable think and absolutely best was

with in with recent third-party and to prior in Our cash was loan mix line consistent low XX% the year and QX, of and our outlook levels mid-teens.

Turning ended for with in our million quarter total mentioned sheet, $XXX a for accelerated cash, change restricted along inventory in strong. QX as cash in acquired $XX in on our our million $XX we normalized liquidity we in estimate tenth module business our the in our We XXXX. as above and the cash This the unrestricted total facility. debt the position cash the balance in recourse $XXX about generated including last consecutive with to tariff, in $X cash, faster total call. been We on million the remains payment now We generation the of XXXX hedge grow lead-generation exceeding define a change target million. our will subtracting $XX as XXXX, deployments million. materially working QX purchases than balance We in partial excludes basis, after have I cash capital our generation million

please generation progresses plan. detail a opportunities Also discuss our cash in our note later cash and net accelerated entries position to strategy will year this we the call. more As specific with asset be our any in that strategic or on market structure our current beyond excludes earning more outlook Ed generation better be outlook. capital will

XX, historical in year. patterns XX remain Slide to trajectory growth some with our market-specific in driven timing. our and the the on consistent Moving In deployment on QX, expect we guidance megawatts, to guiding business by XX% full and we confident for are to growth deploy seasonal

beyond last in demand QX As to we MWs results XX% tougher that a comparisons about policy expect some we demand and deployed pointed number This slightly in pull-in XXXX. at will over which we strong with in and grow sequential out early quarters, Arizona few changes, caused the means in stronger second year-over-year QX approach that of half. saw ahead

additional our sales larger installation be customer our have direct the on We will the contributors behind both in partnership Brightbox we and The exciting Brightbox focusing longer and the are volume ramp where differentiation, launch, of it is the year. increased platform which Comcast is of cycle also and and the propositions adoption carries focused times. business, efforts as markets half given also second value but

and advanced of reform year, the headwinds NPV As full market despite position, tariffs, mentioned from or import above watt I target in we Sunrun’s investment strong economics $X competitive maintain and testament our per products NPV for the to to unit of earlier, our and execution. the tax expect discipline, financial operational at

me Ed. to let over it Now, turn

Ed Fenster

I Thanks to items. Bob. want three touch Today, on

earnings First, is impacts I and seen changes which the the net the I I and of tax finance the assets; review reform; in history. the will we robust discuss second, have to gross will during discuss most market, the third, company’s quarter will

to the first XX% assets on Turning Net at was year-over-year $XX items installed of roughly a in assets our in the Non-recurring net earning $X.X Slide earning increase. million asset flat base about XX, depressed billion, quarter quarter. reflecting

tax financings. and experienced cash we equity the First, timing impacts draw in of

affect We capital. of at any total materially Our focused and primary lowest timing measurement is of our balance on date. the first execution financings, specific end best foremost of cost to can optimize objective the quarter our which cash the for long-term

Second, we corporate expected estimated reform. total the tax have of impact

investors’ financings terms purchased on and early advantageous our to placing in ABS to the in debt Finally, most in of execute we position us a funds, tax equity allowing market. and retire piece unusual stakes couple expensive us

earning as the In we capital, increase of QX inventory Because have this the in cash such term working hedge net a B corresponding into not we cash. cash to loan cash. closing the proceeds addition, seen but the solar from reinvested tariff, generated yet panel in reduced net assets,

QX. and investment impacts of a given the which now the to unchanged, I investment tax Sunrun. will expect the to discussion the reform We for working is tax importantly, in federal was credit support Most no capital peak surprise turn solar. bipartisan

the technologies Congress tax that immediately extended bill in energy fact, newly In followed for tax renewable credits several budget reform.

tax earning fleet Tax from resulted the reduce non-cash. million X%. all tax a that together, For loss $XX about $XX or Because benefit, provision. benefit, existing is than assets a tax million, assets, overall net enjoy reform reform, gross tax by carry-forward of million GAAP of we we income reducing QX this our taken $XXX in changes less our income like provision, will operating also estimate

generate tax discussions, We strong decrease tax prior deliver after Based slightly better that lower we cost of income per is signed less I This availability from result a a than equity strong up of continue position. improvements to of capital a and reform equity. XXXX per transaction project tax project continued tax because rate. to in the watt, ongoing transactions well estimate will we by markets on see proceeds as our final reduction topic, guidance. corporate Despite to we $X value we at tariffs, strategy. my as to $X.XX valuable equity competitive at from impacts tax strong investors finance NPV tax reform and can operational we from now as about our to least believe turn occurs a watt and depreciation

and we our on Based average debt or market new to deploy to our changes balance returns base financing. than subordinated overall to XXX delivering support solar the term capital flow, while lower opportunity with transactions. debt strong all current increasing XXXX in of minimizing in that today, reduce conditions, B equity to upfront conditions on cash we see rates. options spreads of our basis to continuously maximizing consider existing the expect a points we of our Based conditions residential XXXX capital class, acceptance to asset exposure on and always, cash mix components and are goals market continue both loan equity market XXXX, XX our costs interest As long-term Across of stack, transaction. in

tax was equity including we equity have of capacity XXXX, note into tax bank in and QX which XXXX after I negotiated leverage reform. tax Finally,

We our are now back position. pleased Lynn. with will relative to call and overall the I project finance over conditions turn

Lynn Jurich

Ed. Thanks,

open line Let’s please. the questions for

Operator

first [Operator of Sachs. from you. our from And Thank line comes Goldman Instructions] Lee question the Brian

now open. is Your line

Brian Lee

questions. generation I the for mentioned will think I you first the ahead they deployment Thanks on be of team. that growth. one Hey, taking Bob comments, guess cash

on So, million than generated clear, $XX that just be in does growth you wanted XX% better the mean to XXXX.

$XX inferring incremental expected cash million generation So, in XXXX? of

Bob Komin

that’s what we Brain, mean. Yes, exactly

Brian Lee

that And then of takes digging a some it for? couple embedded XXXX that or issues in should a there well the to great. of anything adjusting that in and one-time more bit talk into the I for impacted view. were adjusted that are you granularly, maybe maybe budgeting for, high and level might Okay, you know puts numbers can that be as we be XXXX

Lynn Jurich

we – acquisition, of the really Brian. business. similar guidance Hey, would steady any state for one-timers those, anticipate operating to the be that the or similar The equivalent is what don’t in buy inventory to so investors

Brian Lee

helpful. flow Okay, Maybe the around couple year. profile of just that’s here for more questions cash the

million I you was invested of end else should if so, $XXX $XXX First the on XXXX? Slide there thought there be showed as so National equity through in had reflected all or we thinking move line that cash is year, something wondering XX, just related, to we Grid that how million about or they item

Ed Fenster

question. This Brian. is Hi, Great Ed.

I to maybe transaction, QX referring specifically. but we to is that think National in the relate that pro investment of show their debt not $XXX you it million Grid adjustment the ‘XX does forma

we those cash earning we hadn’t happens that assets transaction those we the are would the of XX% assets contracted we of assets those eliminating into that Grid National systems, the placed provided eliminating growth So, the placed are have because systems. against Grid. when National what effectively to therefore is assets gross flows also debt eliminate we those if And

partnership with that million currently So, National raised debt Grid. is debt the the in has in been $XXX that

that expected to $XXX investment approximately So, million. their answer is question? Does be your equity still

Brian Lee

fair it deployed to the clear target it does helpful. $XXX fully million for the XXX XXXX? on they that were That’s assume up. no, megawatt is And Yes,

Ed Fenster

So, add me Brian two with to let comments. that just

but that surprise The are placed one one is fund as debt the is in XXXX. the deployed first those is there to totally continue that second not be materially, though service and in systems

Brian Lee

enough. repurchases, the be pass assets those you fund you the what then quantify that million and headwind obviously, without around the XXXX, point factors me, dollar Can in other after guys for be the it refi Okay, that on of XX was impact grown $XX incremental benefit is was your and which comment one XXXX on in compression part flow to that will we I should And year? early those and target And you the the the quarter, going that are the in fair early generate $XX then fund to of in for some basis that repurchases fund are the early you. of Thank repurchases, have you to mentioned you expecting back to planning your million on those it. of for quarter? specifically earning would to to are that. spreads, on for part metric. XXX sequentially cash this generation you cash The Last for spoke net that significant i.e., your

Bob Komin

Hey, Brian.

So, those are good questions.

when we of first that So, components million in $XX order. described did the three I the

XXXX post-flip of may in we expect occur those of greater So, the order as than at you a do occur as which late assets of funds, $XX the point at was which tax can disclosed give and refinancings million, to towards end in the working The component, as further of the not XXXX. QX buy so turn greater the that so we capital not component the that our hopefully this effect view than was magnitude. such until

Brian Lee

Okay.

from at be that So view XXXX the that your that way point? put would another cash in

Bob Komin

Correct.

Brian Lee

I’ll Thank it Okay. pass you. on.

Operator

next our of from question from comes Julien Dumoulin-Smith America. Bank Thank of you. the line And

Your line open. is now

Julien Dumoulin-Smith

Hey, good afternoon.

Lynn Jurich

afternoon. Hi, good

Julien Dumoulin-Smith

– wanted I thank ask to you. hey,

the seeing reform? about on watt take that can quite a little is evolved commentary kind I robust, Just just equity question, still on you follow-up has transpired in assumption of a tax it’s are raised that’s all tax tax at what advance rates light and that it the – talk of but with market per assumptions on last $X from a if good your everything if you equity ballpark how

Ed Fenster

Great. Great question, Julien.

in saying think reform. are I the $X.XX to about because than expect what of tax we So, we in all to we XXXX is watt receive XXXX, a did left changes

components I terms tax land of industry taxpayers to corporate would a underestimated the new and cash bill, appears observers that of what’s several the In first market, it’s liability tax than departments the casual creating of happening the the AMT say elimination may in to driving the tax first think AMT second of the I have threshold. towards two be total near rather elimination desire

slightly And impact depreciation proceeds cash take seeing the the so we manifesting a does. $X.XX and those benefit of account. less are on NPV watt Bob’s flow still declining after-tax of expected about actually is but yields because But into that’s lots for comments XXXX than

Julien Dumoulin-Smith

transactions of as about is it. It just talking the other How created well? made it were mix Alright. just also Nat tax you Grid desirability proceeds. comments are light respect costs about view here in just Can you to etcetera. that wasn’t on the are sort a the proceeds basically up I construction to market talk backstopping pursuing Got in the equity of total here? total all with delta terminal mix the the that front mean, is and How are in a equity? about with you that about changes in about if step you tax about filling and/or a thinking thinking also you and obviously think of you like

Ed Fenster

Yes.

we are into those XX taking as average account. news lower So, basis seeing $X.XX points I was where that good spreads the now us, XXX B cash and will of The are that addressing seeing stack and attractive components between all to be is the operationally describing we loans, that loans, on A equity I right capital think equity the all headwind tax are financially. from

going make opportunities to degrees and we to want undertake ahead don’t I we of of have predictions good us. many that in but So, of are freedoms transactions specific the XXXX, exact

Julien Dumoulin-Smith

commentary then ITC, mean or treasury construction I any quickly the on And it. expecting are you here? clarity lastly for commenced from Got

Ed Fenster

will don’t any view I when providing. clarity to have that particular as be

Julien Dumoulin-Smith

you all. Thank Alright. Great.

Lynn Jurich

you. Thank

Operator

from our Thank of the Credit And line Weinstein Suisse. you. next Michael question from comes

line open. Your is now

Unidentified Analyst

this on play Hi, next with tariffs [indiscernible] expectations that structure the how Weinstein. does your impact talk year? for you on all cost of into solar, the or steel in the and is of Could behalf Mike about aluminum XXXX

Ed Fenster

this Hi, is $X.XX Great structure have effects think question. watt. Ed. we would cost in our potentially range a This on diminimis per the of very

one other. as So, it’s we not that the something a way or major foresee issue

Unidentified Analyst

and speak about should Got create credits clarifying it’s last for And or that, some it. is think new you but week soon does rules throw more could it storage you just on – the retrofits? – IRS to it for about issued letter you light such monetizing a private that demand storage, too retrofit we that tax on retrofit for for does probably how

Lynn Jurich

Yes.

the would just on be background then credit. for that So has solar eligible that call an for system for on if IRS the a that existing battery those you clarified tax that put

it’s So a outcome. terrific

market going our originations currently I Brightbox product only. think are the we way new to on with is

So to any expectations are these been extreme And customers particularly happen with the commentary demand we and from events are is continue on of as interest who it’s still the home business. said but new surpassing making weather their seeing wanting our power. I increasing around backup is have as early, the to call,

that people launched messages X the Brightbox that storm didn’t we power. think today, have So, I million with latest

of we not too finding it’s the customers. reliable utilities So aren’t is and expensive meeting needs It’s what that their power. are increasingly,

than And at. so the storage said a taking offering, the look That are retrofit side certainly better we we demand we for are expected. currently something is that but not is on something

Unidentified Analyst

deployment from we last the me are guidance, in driving Thanks regions for XXXX? one at And which mix think about looking just geographic should or clarification. saw what the we the versus how growth XXXX question that

Lynn Jurich

Sure.

I think last numbers factor year with Arizona. the laid QX and was the big certainly in

share overall call we the and above think business. there up last I in our phone demand in forward pull XX% as year, Arizona the described was strong a on ticked there

actually, Arizona so levels, you kept in have strong if there been And historic would would at QX. have growth

is quite in why the last QX growth starting would the new year. strongly Nevada coming our X to the and following, are entered which we back states in and reason So the we confident feel new beyond back, is returning contribute that coming markets

this So, Texas seeing flat very slightly believe the California, year, but demand. do on better most shows notably external Coast as strong we I forecast California will there. East the are we we believe about

So, is across going to Arizona to. and consume back the come board

So, what comes back. is these typically market clean pocket, companies we backlogs an the but see one is there their is of out there after bit then pull-forward little and a air of

strong Arizona And so we sales are starting to in see well. as

metering will the that Carolina So, net this our there reach come summer back that place into potentially fall. cap is in South we is risk where to some for the are going picture. to The we plan. as And are accounting

be a today. and in shows across consumer since plan that market, that market where the very board, some current decline with extended, very gets year-over-year demand where very, but our pleased that would it expect growth but We strong

Unidentified Analyst

for Thanks the color.

Operator

comes Philip question from Shen Thank you. And our line next from Capital. Roth the of

is line open. Your now

Philip Shen

on Thanks there question and for has rate storage [indiscernible] Hi, that mentioned the some hit XX% in storage in you general I states. questions. follow-up Quick think the on attach guys.

how you can the Looking by levels ahead that do to year? further in rate the reach revolve, end we of XXXX, expect attach what

Lynn Jurich

to still Great question, it’s say. early

going to by – different is what market it’s the is. depending regulatory think be setup on I market there too

which a are doubling in already last we rates specific seeing California we XX% year. So year-to-date is the we at in attach that comment was what QX – made versus California

to proposition in ability storage most very expensive particularly that the during afternoon. for store affordable get standpoint, it’s the So, day San quickly. the it’s it’s consumer the and at of to it market, And ship when in someone accelerating because a if grid you just from Diego arguably more the solar look plus power value the

important rates Southern front the are extra pleasantly again, imagine is that weather the continues to it’s market in consumer capability, in reliability more that how PG&E as mind by California surprised and going the and attachment backup So, driven well persist. of being interest you it’s be with above and people extreme XX%. but could we to Edison, to

the kind to I share be if to other markets generator at of at look try think you what is estimate we penetration that’s look and XX%ish. maybe will markets that

it XXX% So, of we still might storage to the of to would of California early Hawaii think and really elect customers would think outside that XX%. parts minority California, certainly that but attach exceed be we again that would would in say,

Philip Shen

gears XX% or through walk Great. that spacecrafts about than many hit shifting you to XXXX? that’s new or how Thanks, geographies, you And more in regions us some locations, Lynn. really might interesting new in can opportunities

Lynn Jurich

We expansion last as forward level that same don’t we anticipate put year. of

last we those quarters a I few states it added, was So, year, take ramp. X think and to

see that and now to it year much the didn’t from we are today. So, see starting benefit last of

the that growth plan that XX% So, underlies existing an market. really is growth

our country economic of favorable the in terms to anything Another we the area It’s policy of at some there. have market Illinois entry promising on we Midwest area. eye is starting is there and although the not look are

Rico perfect of in speaking and an that and there consumer incredibly rooftop customers, could solar it’s the utilities is the the of in and was the their a that meeting interest case promising battery high. and market. be is interesting storage also interesting need Puerto point So, consumer not interest

of is a risk question we the a just from is So, market do get that stable market, a perspective. the comfortable

supported markets. again the rate those strong be the would growth here existing forecasting two are we So by highlights, but is

Philip Shen

outlook in one the terms year. with the the and clarify want for the last you quarter about by I in growth cadence talked just for QX of year here, One megawatts your of Great. think XX% and I XX rest to

great can QX QX, and that confirm blended be you is we acceleration in get to if And cadence right? to then think I is comment in into there that ease and helpful? the XX% that just QX that would

Lynn Jurich

XX% Absolutely. said We will specifically we approach in QX.

So, and would I year. slightly the slight back discount assume of above for half there the

step So there gradual see half, that. little stick of to you going bit a super-hockey will are be into but not yes, second a it

into we packaging will mode and a to contributor, helps to figure really get growth which out second forward that The we other half in partnership still half is what’s what’s have thing Comcast but messaging, well, unleash we are have be right confidence as but I delivering looking good the believe acceleration rates should we quarterly back testing before we that been that spoken right amount them. have mention the us about, those with visibility

Philip Shen

I on. Lynn. Great. will Thanks, it pass

Lynn Jurich

Thank you.

Operator

Oppenheimer. our you. from line question Thank from Rusch next comes Colin of the And

Your line is now open.

Colin Rusch

Thanks that so will provide the guys throughout become year? a of of this the guidance unencumbered much. Can tax you megawatts equity the investors by bit little on of course cadence

Ed Fenster

X to are years to our looks to ago, Colin, but we we think that reasonably expecting is look I about close refinance what in million of would position – a a be XXXX. the post-flip annualization to then to trying and am assets said to X to transaction like We – haven’t expect be in we first have what assets. just those deployments size it $XXX do be of recurring us to a that sorts QX set up of

Colin Rusch

you of here is talk take can pricing geographically NPV lower that. offline in this about you with with bit the the you I bit able a we bit some geographic, then Okay. are pass little here, extra about competition price little dependent, a the to little of a think that but are little And and somewhat the you way? dynamics, obviously, will bit guys capturing in guys of these cushion should terms along guys markets a

Lynn Jurich

NPV really of to a $X. We it manage that around

on from justified I to sort spending acquisition want channels business think you by we you our it keep that of SaaS is long-term are just software your if if are like value contracts. get typical going – a the to

that long-term value of $X we So or is above threshold. what a $X, little cash think sort profile that right generate the flow to right right the and the I feel

And it’s is the haircuts we given would trade that’s we is through more of probably $X.XX, more can we are we that see recover strategy. pricing, side. with even no, the better growth the operating, of about make as that of XX% but invest NPV capital so on your that, took able just the and to better you tax And reform not the are through majority

Colin Rusch

much. so thanks Okay

Operator

Thank Deutsche next of Shah line Bank. And from question comes our the you. Vishal from

Your line open. now is

Rachel Lei

taking Hi, Thank it’s for questions. Vishal. for you on our Rachel

some is assumed of what are So the drivers terms the on that? more a NPV just us guys decline you Brightbox, little so the accretive, so give battery the of in kind have or color bit on of first can kind there you NPV, for one in cost

Lynn Jurich

in Sure. the to selling cost of is have BMW, inverter was all Mercedes there really and the anticipating are things partners box, storage we cost not are are have drive there significant storage there the currently a there financial anticipating year, currently and and out. our same manufacturers going strong there of is this is innovation UID with the batteries we declines who is mentioned inverter We lot in looking and of happening are Samsung, but Tesla, is. in positive, and are current to The side LG are is NPVs which put Brightbox that the ton in terms time, we in we there as but a of not

there, staying of Brightbox, our right So exciting learning targets customary happening that’s strategy seen and see and with more the and it’s margin pricing there at is there. lot our but disciplined a are less innovations now, a margin we nice

Rachel Lei

year? So in bit a for more half terms you kind second the partnership, the do of of plans give us your specific the of Comcast

Lynn Jurich

you Sure. It’s I we the them control am amount, things are signals very is much testing are partnership. cautious year. of from make back worth a contribution as count the on in and while to our to terms of this we of are are When a the That in direct doing, pilot we being question. about that half we with outside the glad how it Comcast partnership that said, from again we are them, general multi-year our going the visibility so cautious asked of area. in promising are getting course, the the results invest

is the of strong growth back years So, growth certainly half forecast. that – back biggest not half the driver

Rachel Lei

Okay, great.

initiatives, considering, you of about? guys wondering the thinking you initiatives are what mentioned last kind you not opportunities maybe potential do just M&A any targets so your include strategic is So that question does that are any include

Lynn Jurich

catch certainly we those, would nothing phrase that anticipating is pursuing now. are there That right but

Rachel Lei

thank Okay, you.

Lynn Jurich

you. Thank

Operator

Joe Instructions] Osha of question from you. And comes line JMP. Thank next from the [Operator our

is line open. Your

Joe Osha

there. Hi,

Lynn Jurich

Hello.

Joe Osha

include assets? to I $XX post-flip any issue flow off you And down in better cash the have more that mentioned the a drill growth up. Hi. I little follow then bit a than from assumed wanted refinancing million XX% does

Ed Fenster

in Joe, modest Hi, be assets source it’s There impacts Ed. year. we of can facilities whatnot, assets There flipping is is move material it as cash is changes warehouse in – into not not but a and the flow material there.

Joe Osha

Okay. million anything to, it you And see I was I say ABS was you leaving open believe at we quarter options your about then that would or of are securitization €XXX potentially first that referred you heard we assume would XXXX in terms be talking until not the this transaction an I of just point?

Ed Fenster

sure. Yes,

were alternatives. would priced So other very likely It of transaction, flip year the transaction I course was transaction in a be competitively security it the we with assets engage of in refinanced market season mentioning that ABS on the our approximately possible assets. would is certainly if X-year this asset-backed during earlier

calendar an we transaction during are the foreclosing speaking So, of certainly the year. ABS not possibility broadly

Joe Osha

you just would either that Okay, reflected in not about? numbers talked generation these which cash

Ed Fenster

back on in raising our of view. does or incorporated new assets year ABS leverage full is general it our whether Well,

Joe Osha

new on but assets, not On existing assets.

Thank alright. Okay, you.

Operator

remarks. Jurich I over to no showing lines you. this further phone at over Lynn call I the time. for back questions Thank would like am closing And the to turn

Lynn Jurich

Thanks everyone.

excited positive for flow taking really breakout are to turning that XXXX we excited to We the position the by us Thank and great year. and cash year questions. next Appreciate market exceed all are the leadership you. XXXX. was

Operator

concludes disconnect. have for your Ladies great in and and today’s gentlemen, the day. conference. a you program may you participation This thank now Everyone