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Sunrun (RUN)

Participants
Patrick Jobin Vice President, Finance and IR
Lynn Jurich Co-Founder and CEO
Bob Komin Chief Financial Officer
Ed Fenster Co-Founder and Executive Chairman
Michael Weinstein Credit Suisse
Brian Lee Goldman Sachs
Julien Dumoulin-Smith Bank of America Merrill Lynch
Justin Clare ROTH Capital Partners
Joseph Osha JMP Securities
Colin Rusch Oppenheimer
Call transcript
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Operator

Good day, ladies and gentlemen. And welcome to the Q3 2018 Sunrun Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. to President host Relations. of like Patrick today’s now Vice Jobin, Finance would introduce for your conference, I and Investor you may Sir, begin.

Patrick Jobin

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

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

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

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

Lynn Jurich

Thanks, Patrick.

we customers, customer. quarterly We megawatts per NPV watt We priorities. along operating the highest more deployments. our with against Sunrun’s of of to strategic with representing This XX,XXX company’s added XXX% quarter, quarter results value is over and financial created progress of per volume third history. than share net are third pleased $X,XXX and the In in the generated or present $XX million $X you

above homes. united events. delivering will their NPVs per rate are and year-over-year. acquisition especially this rate. investments we accelerating for experience and an extreme product achieved of of be This while growth weather in resonates deployments above the in the growth in our increase batteries XX% we expect to growth value plus rooftop full-year. in cash and guidance reiterating generation is full-year energy increase XX% This are QX’s as growth Americans above on solar watt innovation $X and customer We Demand in

customers sudden wind counties. Just decision centralized the the up to power warned reliable force when its Northern provide California not grid to solution is and today, blows. its protect to A PG&E customers in of blackouts nine

solar affordable, from battery our renewable by and goal about makes carbon-free alleviate power, and future product near found the popular today, that the XX% partnership a “as Sunrun when which of deploying should our Brightbox help service is possible” This first, power views, gives congestion future, commissioned and needed energy EEI, solar only they can where think use optimistic agree of Two and provide want help pollution we grid transition operators, to people we America a over Our utilities grid in communities. the what can less and And and be leveraged but time are most. home reliable it assets system. want, results to healthier can customers the we country. collaboratively with on affordable uniting Working Renewable not sources. the of we produce is me with Americans energy a electricity it force National utility surveys group, XX% is the Grid. and we recent the should as the in that of much XXX% the industry underscore and

advantages business. new responding that a doing energy to of from an governments think reliance Americans their Sunrun’s survey, is utility is are tailwinds It and other good standards support renewables. majority overwhelming portfolio that strong cleaner accelerating. Reports, with are XX% sources. Yet mandates not highlights surprising investing in job only that renewable second The greater competitive Consumer our provide on

homebuilders. national separate take of are field. retailers attractive the This and quarter-after-quarter to ourselves execute large and to continue means more from we like rest we share As we the big-box partners

chain have to are of batteries, design future. that play energy the and with engaged We system we utilities the today seeing we out supply are with advantages

market-leading results growing encouraging, The our are adoption direct capitalizing are our time. solar moat we quarter from deliver acquisition over believe and position in over a our superior We’re business around this we cost by increase direct last acceleration year-over-year, service. increasing XX% is experience investing on will customer business the Brightbox home of the capabilities, and and battery which an structure customer and

to We grow Brightbox the end than year solar-only. expect Brightbox systems will X,XXX by of installed more nearly have the and quickly installations

returns provides the the than launched Financial in already eight XX% differentiates markets streams have of through Brightbox offers in attractive to the revenue attempts and backup it protects also ability manage additional of to the our by about XX% leader. customers further service and service and represents overall and Grid more We are California. residential power, utilities business Sunrun undermine with against as direct pricing, nation’s It value Sunrun us solar. Services. time-of-use

the the of marketing We pace Under agreement, to me, Comcast and must XXXX, accelerate to prior incremental have the in year updated additional, XX, to September million towards Comcast spend weighted markets. agreement $XX an over target prior our reflect the partnership. learnings excuse with an our

unchanged for plans. now the from reduced price. to shares rising exchange, This XXXX issued into the stock is attractive it will customer. Sunrun, we our to acquisition number have is partnership Comcast addition, parties vest with to non-exclusive. the delivering the easier even make cost in common but Sunrun include for Comcast stock, a both an In have continued amendment per customer of In results minimum partnership cliff left warrant

are we call to CFO, the our we future sheet. turn Bob Finally, in guidance balance product detail. flow more positive, now I’ll to and Komin, discuss even and performance QX our maintained over while in review investing strong cash growth and have leadership,

Bob Komin

per in the NPV target Customer levels, in-line s Project in tax leadership. $X.XX and a to modest value the project product sensitive fund and business approximately in with Lynn. changes reminder, $X.XX, equity Thanks, with tax watt and per very direct value is quarter QX. headwinds per was reform our NPV customer we was watt or despite tariffs, accelerate $XX,XXX geographic, $X.XX mix. channel, $X,XXX or along third in XXXX, investments approximately was watt. Year-to-date from the our are to making per

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

slide can per QX, Costs now Creation Costs total to Turning X, were to flat Creation Project per quarter per on watt Similar year-over-year. in $X.XX Costs watt. to approximately Creation or quarter. Value, $XX,XXX Creation customer were Costs fluctuate

invest Costs direct declines to We business continue as tariff growth in year, with to full and to Creation the impact modest for the continue even show as in our we described. Lynn module expect

cost as comparable per incurred because for peers by year-over-year installation watt. systems, of installation Blended well of to partner channel directly those projects by our to by our channel reminder, a cost $X.XX Sunrun Sunrun not per $X.XX includes is of per deployed which watt. were our partners, As costs stack solar the business. built improved systems costs built for $X.XX Install as costs watt,

to marketing results half We watt, expect the will per Project XXXX. per-watt rate higher a of increase costs a our continue for batteries about our higher also cost, to adoption were Value. of the year-to-date home but with carry first sales and $X.XX flat QX, which In

megawatts Most systems occur are somewhat are sales the calculated Our total to marketing by direct than related expenses relate by business and these dividing earlier when the of activities unit deployed. and costs our total deployed. costs period in sales these

installations direct business impact marketing this sales reported costs we marketing higher periods blended means but cost direct reported mix are rapidly will also it During when higher installation a to at cost the to timing and due costs unit lower in results Sunrun reported and increase. growing there per managed per per higher of be causes lower A sales over time watt, watt of watt. also mix sales

nine watt. year and ago, of higher, were blended approximately a to XXXX $X.XX For by compared sales costs marketing installation per months the costs were lower, and first

reported XX% Sunrun business new Our $X.XX year-over-year, marketing last grew direct a our G&A faster quarter per XX% per rate grew in customer at XX% sales we year-over-year. or costs the exceeded as total and year-over-year. watt, in declined a volumes quarter. GAAP $X.XX, Sales volumes as than in faster at the QX, business were direct increased costs rate our a In than improvement and expenses costs

achieved with for third subtract We party as $X.XX cash realized margin our in-line and with platform loan. gross distribution, XXX third services. services calculate GAAP from generation watt, platform MW, This or our In Creation trends. quarter Finally, we we well racking, the as contribution the businesses systems sell solar we with our when gross guidance. per lead of margin includes Costs, a recent deployed we in-line

efforts. sales business Hawaii, higher. to a Sunrun direct The our desired operations suspend address the for large the platform now urgent crews. Carolina events, our need Severe the partner partner between don’t mix natural is retail we Brightbox our platform a did be strong the direct, the partners. specific we disasters national enables at installation While direct where business and manage weather initial to business rate us and require is focus for growing that South it If were system. and strategic late and however, hurricanes change the the increased climate also two always for is and that in deployments We to quarter. for underscores of The would days and markets not build installation several more to and have a come frequency affected into power in resilient safety weather of prioritize the extreme channel

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

balance Turning now to sheet. our

We $XXX million million increase quarter. cash, position a QX from Our remains strong. last liquidity $X with total ended in

debt. which note our of $XX can activities our strategic based define million to our total as cash project change the the represents - for due to opportunities cash finance current our outlook best but continue activities, project generation excludes cash forecast please beyond will any for in We generation be cash year. Quarterly grow this or timing change expected finance or in remainder We Also view the cash would recourse plans. our this fluctuate of less on XX% more higher generation generation the XXXX. that

nine. to on guidance on slide Moving

We greater unit full-year in $X are in XX% deployments reiterating of or watt growth our NPV. per and guidance of economics

it over turn me to let Ed. Now

Ed Fenster

Thanks, strategy and review plan Bob. and capital interest rates, runway. Assets regarding of Today Earning our markets of three transactions, I Net a topics, address recap to upcoming capital a

finance million healthy. market, million slightly, Sunrun Sunrun, of XXXX cash project returns about the interest $XXX First, matter at remain generation and target for nudged rates, achieve in generation. to remain and our long-term interest up on XXXX least We rates while cash in track to the that $XX have

We are the years. finance and bullish on opportunity coming the strategy overall for

the our rate residential is and solar sum capital the of XX-year to the spread demand credit that of benchmark cost investors risk-free Our finance interest assets.

has years, Treasury approximately basis the XX XX-year increased Over three the last points.

XXX basis period, rates assets time while have same the further approximately Over compression for investment-grade basis new to advance points, Opportunity for solar increased. spread residential debt points actually declined XX have remains. spreads

portfolios for project aggressively, spreads are project spreads basis solar Although, residential strategic debt buyers class, Based more utility-scale residential maturity scale pricing on interest Certain points residential not. Spreads the about investors compression in even the coming the asset to of equity costs. have residential residential beginning expect the market. the portfolios, for see solar are XXX financing many typical to equity increasing reflect of bidding equity still project we over years. above utility are out senior of in cost solar for

The debt our rates. significantly value the insulating the weighted life refinancing floating rate these our of is us swaps majority For average assets, for not swapped the of from existing in changes of events. lost systems, in interest is

our changes proceeds. assets, capital new impact cost cash do For in

a example, on point can receive we and This debt our basis watt. new would assets capital project For both the reduce XX by in costs $X.XX increase approximately proceeds a equity XXXX. approximately higher increase imply by rates lower XX-year or offset during two. Currently, the some of mix X or be in basis X% pricing interest costs, a the X% futures point

the rates return order permit their incumbent utility in to customers set charge deployed the typically on a earn utilities regulators capital. Finally, to

headroom to and rates rates that the utility electric in rates customers, retail utility rates, such, multi-decade for will over longer-term, higher demonstrates higher and rates this increase are interest interest between increasing prices. themselves relationship. As correlation A we expect rates result interest sensitive strong our to

quarter. we we calls, As are fourth activity will the mentioned prior project anticipating finance increase on in cash

before, finally, if and in market, senior the achieve equity possible As market, by believe debt next, in public subordinated sequencing we first extent desired, transactions the the the best execution we in applicable, market. project to debt will the our

these with launch transaction coming marketing underway We the are an well expect to asset-backed-security weeks. the transactions in and of

interest years We have markets to rates. issuances pace expect rising ABS several balance, the changes On next been accelerate the despite of year. underlying last attractive, in these overall debt

have as and generation and our this cash assumed own internal capabilities. interest We rising rates to in bullish year flow projections our for remain next

$X.X increase the quarter cash $XXX of Net to increase to XX%, end, million, shareholders earning assets million way XX, counterparties. or $XXX to billion, was after net an assets XX%, was million, year-over-year. and Moving is of $XX flows slide our or at value Sunrun describe to financing cash earning payments year-over-year an the of

Turning capital over already With our commitments next finally provide into and call to to turn pipeline, I’ll year. tax Lynn. back that, our equity debt the runway

Lynn Jurich

Thanks Ed.

Let’s the line please. open up questions for

Operator

you. Suisse. [Operator Weinstein Instructions] Our Michael first Thank comes Credit from question with

is line Your open. now

Michael Weinstein

Hi, guys. How are you doing?

Lynn Jurich

afternoon. Good Hi.

Michael Weinstein

afternoon. Good Hi.

much that a tax versus pass-through strategy lease should partnership did structure structure, how forward of the equity how the quarter think in flip pass-through Could bit this and the little results? the the about affect Okay. going about point we at the use

Ed Fenster

Sure.

is this Ed. question. so -- lease Great So

been pass-through we deploy capital lease chose proceeds of in the to and us an have given and partnership attractive capital offers over mix capital this part we investor overall flip the attractive our offering actions deploying persist the opportunistically. way cost have transaction that it So Predominantly year. and that to our to of deployed year attractive it’s for just proceeds in we so the foreseeable We that been to has us we’re overall as likely that format executed period. to happen an trends format

Bob Komin

pass is have $X.XX and we the deferred income fully to under terms which reflected about the we of be the $XX I And which net short in we lease into add effectively GAAP effective lines, I turn mentioned, through about on you a as think and may tax term of sorry, assets will at just this revenue, deployment believe that million at financing component point facility expect approximately complete income. that have share represent is of

Michael Weinstein

you. Got

more a ways how look other maybe turn EPS make take on quarter the might it you back had at comparable if this to to in a So it for wanted $X.XX to you share quarters? future to

Bob Komin

sort would That to-date… of inception of transaction be the

Michael Weinstein

Okay.

Bob Komin

is million, $X.XX. diluted the share quarter effective fully per which number and share any approximately be about … $XX.X tax would for

Michael Weinstein

you. Got

Okay. growth would the how Sunrun able the XX% since about looking business And think do XXXX, market installation be you especially built to you then share? into capture grew

Lynn Jurich

would imply seeing QX We about the certainly are we like acceleration XX% and year-over-year growth. you the see guide

acceleration strong next really it’s year. into So going

becoming formal I position and the leadership increasing we’re I just We’re due not in like guidance and say position our primarily we are Box to competitive of our market like those XXXX really but would a Comcast say to think think any give and advantages world. the right partners we would the now, attracted picture to Big retailers the are due national to more more the

critical addition Brightbox the In we’ve innovation around investing product more behind becoming is as been well.

customers to our and So XXX,XXX base grow customers customer help plus that continue really I and channel. in that us starting there. at dividends differentiation when finally the customer we’re to now acquire see investments our to And experience in most some start affordable would pay to and we’re say existing

competitive I’m the will guidance we feeling So quarter. position about strong but with formal be next our in not touch

Michael Weinstein

Great. One that’s renegotiation you the because the necessary? last question not have formed, simply higher Comcast it’s originally stock build price of now a then of

Lynn Jurich

is ‘XX the it. specific It’s and make really to been -- have successful partnership really we for wanted both it of spirit -- more has we the

accelerate earning in earn and target they in spend So wanted and to incremental wanted to warrant specific year be to the both able it the into try we market. the into spend

exclusive for out an worked anymore. it’s of that note combination also us that both relationship So not

acquisition after targets over offers learning to specific year now are more So perform. it’s how can in a that have attractive place something dynamics and we a a we that around very partnership

Michael Weinstein

much, Got you. Lynn Thank Ed. you very and

Lynn Jurich

Thank you.

Operator

Thank you.

with Our next question Lee comes Goldman Sachs. from Brian

is now open. line Your

Brian Lee

the was bit so I and just changes an they Hey, window been with Comcast XX,XXX Thanks open-ended this there questions. than runway maybe anticipated the prompting a is to of maybe that for like year there customers guys. move that’s appreciate to learned ‘XX. be course of you over had you push more XX,XXX a it always them topic. or on more -- is you and and to XX-month to to X,XXX is this? last Maybe feel the should But or that this past for looks that action, much move taking reading like in finite so X,XXX bit over slowed Ed into Lynn the the year what or can sort something now for I because else follow-up the speak little is to Can of call of do a a that we

Lynn Jurich

be how for more effective and into it to more should parties. agreement make both learned anything You just reading then not we a

So a just contemplated XXXX of both wanting or so time we’re we are long with the to specific we we’re specifically originally planning season as period XX the more going invest going the we and about was it you like where get months said both invest to into to as entered dollars.

so about has to any their none that dimension. it’s changed so ratio it acquired in getting for specific really customer at of terms shares I’ll way in restructured And achieve to terms the goal, of that same the XXXX. just of note more the And we

has So not any cost materially in the acquisition way. changed

Brian Lee

Okay.

year-over-year basis here we in this driving or you expect this back also can step to speak trend last gears but cost the here Okay. Fair miss a quarter. dime Sunrun And enough. And a have then up about may the what’s over I should does XQ? installation little built might down then on was be switching is bit up new $X.XX a and this versus that

Bob Komin

is Brian, this Bob. So, Good question.

point we’ve of of year-over-year year. And QX as you year ago think I in coming was QX. in recall module at there been the cost look were in is low the you did off module pre-tariff, So year at purchasing benefit in one, the the last most several a we of QX it at that so the cost get some it module we that peak burned when for there we this into have year what full they is kind in of of didn’t so are dynamics

pricing per forward the expect down. tariff down The modules As we so as step spot prices look year beginning the lower. look the begins module we next come into at we are of next year, will to that

Brightbox couple with other going successful is have as cost in is include we part The in more selling of been battery cost which it higher reflected forward. in of comes so we factors batteries install to that go persist

there mix we is of how of So offset more also some had it. what and recently project it’s There a and higher-priced costs is also a are higher the And that panels to high-efficiency a them for of those those some are up also higher a up higher at price. year that, most kind same step we where dynamic those cost more by ago little a related recently. its And bit have then mix and been value of has but we’ve would a price a with panels. tariff which on from

Brian Lee

that’s a Okay. be if would modules you seen you but that you follow part cost if on inverters? up That’s would that those of under on hardware will covered have your guys issues or whether of guarantees dynamic that. have suggesting any not or Maybe or those it be any had batteries the And be equipment any that workmanship impacted helpful. just chain equipment would you quick flip on you supply you are, incremental

Lynn Jurich

channel -- mean? is working So that you the through what mean you

Brian Lee

Yes.

that product that expectation If for hook were you sort above yeah? failure issues the who had on

Ed Fenster

Ed. So, Brian, this

is also third we We collect So collect of warranties. our directly in manufacturers from constructive where varieties then there business systems product one indirectly parties are from us. and that obviously those warranties

think good those selection equipment I But obviously We parties defense which challenges also workman well of and also and an often area is we’ve warranties have third is workmanship best the construction warranties careful product against warranties. at. done those just from any very wrap the

equipment in fact part that certainly think and the we carefully. third-parties So deviation result But on sort expectation the audit audit, we that’s in manage, good of carefully material we manage any of we factories versus performance. do carefully, haven’t construction, seen that we focus

a lot should a supports that we down so actually in front quite arrives anything have really is And of side on of but belt future. and do side degree the the the suspenders on back

Brian Lee

one you this suggest something get to attractive could avoid market does in I’ll on ABS ABS last next on maybe for potentially wrong markets about you’re then it preemptive particularly now? somewhat that’s Ed, but I I had there talked the is can And this in think the something think doing previously, timeline versus new now higher or pass you XXXX year rates right you you what seeing be

Ed Fenster

ABS been in the making transaction we’ve more more past. historically five about like the syndicated is year. clarify, assets. in a deals than capital improved, Great sort compared and the to always terms on source that bank relatively done that has expect What new assets a for often access has those We the still say it’s bank that of also question, market commercial Brian, early it we’ve ABS when as as aged happened in are focus maybe to market, years attractive to with of post-flip spoken the assets do maybe do a that old next

currently your readying so placed collection service. mostly very are we of in new have And transaction actually recently question? the for is a that assets that that been the market answer Does

Operator

with Merrill Dumoulin-Smith America Our of Bank Julien next comes question from Lynch.

now is line Your open.

Julien Dumoulin-Smith

XXXX into the to you a up decision I just Maybe I potentially where of just Capital those still right debt heard mention with the aged well some you think obviously was you then strategic too? how as too. rate the also also year comments interest opportunity various in in assets? $X callable think just the can just looking XXXX you’re thinking question that, about choices front and ask given you financing off, follow-up just on I’ll in you to made Brian but it And comment allocation about next if I billion Ed, of that of bit pick respect earlier left little now. terms can

Ed Fenster

Sure.

the the answer just then last me it. maybe if understand clarify question I Let easy to question and first

rate So and the existed is did We that post-flip that’s I about $X asset call yes, assets of that talked on QX say reduce expect debt points. made XXXX. on that exists debt, activity -- XXX all across of opportunity On to the up to interest about still portfolio. in the in we’ve or billion basis small some in towards and but [ph] will That progress last having pre-flip it and occur the most opportunity that your second question

Lynn Jurich

-- allocation capital The

Julien Dumoulin-Smith

accumulating You’re cash now.

the do What differently? about do maybe talked you You’ve it inflection. cash with said

Ed Fenster

Got question. it. That’s a good

to recognized they’re extent of from do capital things Harbor we returns the the Safe with from the number capital is investment can at credits, down could were and that some step being think growth dividends, of that. as tax include higher buyback, capital mix if in that that allocators equipment ranging necessary the shareholder things good So obviously equity against a the accelerating of of like of to one all capital. I’d

so begin formulate around particularly liquidity Safe broader that we’ll that’ll And cash. a probably next Harboring out year of on early to conclusions opportunity start to and the beginning assess process strategy the of and

Julien Dumoulin-Smith

to clarity that to maybe the to about you it. that for come need Safe you Got Harbor? But don’t down yet extent have point put back

Ed Fenster

Yeah.

capital efficient will on examine list the things of most structure it’s that We opportunity. the for -- what’s in be to XXXX,

Julien Dumoulin-Smith

that to a progress in on of obviously may those partnering it’s opportunities, balance California, I front some the communities? some since here, with CCA there’s been real just there. with if been either And home months quickly of few one potentially Any developments respect builders

Lynn Jurich

on would pierce broaden as well I Absolutely. Yes. it it.

a it’s interested specifically, homebuilders segment answer we’re in. to Just very

majority builders party preferred. the top-XX and becoming California the with is increasingly discussions the in third the that active is clear that’s model what’s model in We’re of owned

think home think it in But we volume. ramp. we’re nicely that particularly really new as that ramp and I building to market really to starts is closer positioned again, XXXX material So

our we position of market. that the really but partnerships now for So we’re obviously like setting the foundation

I very I doing you bit think my that one that and things Brightbox work about in the monetize prepared Grid on is a Brightbox the CCA’s we’re it to twice. would the broaden we’re comments the just that Services generally of heard you can excited

available tariff is You some the capacity pay protect and - varying revenue and the with what but can the streams backup also the the willing like against services the in markets. of of rate the the we’ve customer is total the ancillary because for market of ability a they is to additional that. to there work for customer And storage monetize it themselves to value done market on size lot capability

just at in billion look you spending if industry, So CapEx utility the it’s $XX annual.

We punitive have by today the think billion Services growing million market is haircuts. batteries Grid XXXX. $X available for We $XXX home to pretty from

pursue the million really So a in it is National within opportunities $X next receive an market you’ll to we’re specific excited order Grid the about investment and from recall that we year. did

in project opportunities enough the giving the we return Grid have in months dozens comfortable period. National certainly we and up a So that $X that pipeline million to on of just earn XX next became did

a a cycle bullish a that we’re we’re long business. So there’s them but the really of and get as on can again take to years to real them about wave going going those opportunity capture few as second

Operator

Our next question Shen comes with Partners. Capital Philip from ROTH

Your line is open. now

Justin Clare

This Clare today. Phil Justin on everyone. Hi, for is

to you attach Brightbox that rate some your and to you attach do installation the think you if ahead trending faster I than on go be color get see helpful. storage expect Just what in talk was the how you rates about XXXX? can just Just wondering to installation. you topic would indicated solar-only there

Lynn Jurich

Yes.

in momentum that. about excited We’re the

year second-half a end the the and just that X,XXX of by have is expect under of first-half. the we versus in the that will We year installed the doubling

attach there’s So the reason last quarter California in we in pacing in We why XX%. of - that can’t continue. when rate touch was see no California were type

than But be. rate more aim big that so it’s be out in for sense a we rate all time our factor almost in [inaudible] will all some a the that it’s XX%, And where years. of that attach of of gives pacing. goes what Now Brightbox think terms you tariff that industry ends think of five as this percentage to up playing is is I

that’s Just for the there today’s working at success future having prices. throwing is very with we’re this that we’re high this really hard mean current to and where go innovating I out and going so

So lot And as that coloration price of of so battery that come the because haven’t haven’t all constraints there’s the and we innovation we’re adoption. supply seeing yet. a wave that much in optimistic this seen another happening will we’re decreases and drive of well

Justin Clare

the constraints, that is growth that on you fuel just supply see supply do ahead the then at this sufficient you expect you or that And to have here? point issue an

Lynn Jurich

We’re numbers too. I supply. installation are on well covered quoted The

are a we’re to So and number. positioned half. innovation actually it’s new not on well one happening said doubling before the additional our Again, and being supporting we’re as market. benefits - the to we’re I of installations supply, the booking’s leader that excited very about It’s the fact the coming entrants back market

Justin Clare

faster in growth through couple this Great seen really more me this maybe seeing least see weakness channel strength Can at you the the strong you’ve quarters could business okay geographies at direct here. business whether then in just and it’s and continuing so talk terms than in you’re growing you one talk a of just and then from been about also different trend you point? for what

Lynn Jurich

market just business market very dynamic it’s energy don’t we a our the mix to a Sure very market. as local manage always is

up the And by market the look bottoms what attractive so most with way to market really customers. is acquire we at

national Brightbox which are is we’re the very direct the now area in part investing we the where it’s And right really is these because do of growing business strong investing experience and we partnerships most have the now the we really to customer reason the not so but quickly because is seeing to product. in of behavior about we’re the behavior that’s I’m that want advantage the drive MPV And and to right long-term competitive we because what margin. we’re want, the manage we doesn’t either don’t careful drive mix. that projecting So

the makes So make the because we I it company out there would put wrong targets don’t decisions. think

Justin Clare

very thanks pass on. I’ll Okay it much

Lynn Jurich

Thank you.

Operator

Thank you.

JMP with Osha Joseph from comes question next Securities. Our

open. now is line Your

Joseph Osha

hello. Hello,

Lynn Jurich

Hello.

Ed Fenster

Joe. Hi

Joseph Osha

just for asked going average of questions quick seeing got but that Brightbox in? my Hi size one sort so roughly one on storage what most you’re is of the

Ed Fenster

like little it’s and often the continental twice maybe Joe bit in Hey more XX than island KWH a that about in Hawaii. U.S.

Joseph Osha

thanks there. Ed couple great about moving that of is transaction you talked interesting questions to then on a Okay this

would of First XXX to be in the of that? you that to of contemplating. you’re comment we’re on fair assume terms megawatts Would kind talking, it care size the package

Ed Fenster

begins slightly, have we to Yeah announced formally larger as and the a touch unfold. transaction in obviously haven’t of transactions that our been size we’ll be most that’s the in transaction coming weeks but of

Joseph Osha

then bunch that years? for here as you couple a and have we situation can in looks to just see time time able them. that over way over to a immediately you let’s where assets be a just this new and the good. but see securitize of then imagine is could well, more market a of out and Could develop the almost seasoned question evolve pre-flip Okay philosophical a securitize to Obviously world continues assets go that create you’re and the you basically assets being

Ed Fenster

today how close actually It’s Joe. works world to the

-- asset-backed-security have a fully nature an of close is assets. you on to of transaction it have we So the deployed set to

supported them but in while warehouse to do a fact sheet develop to your throw So today’s equity you them the them package bit balance in has have do you the then to funds a need them up final out market. that number little get on to But you dust for them and a settle can turn you market into up AVS is format.

Joseph Osha

perhaps such really in about for situation the sure that next transaction at you’re if wondering a where monetization we see outdoing should talked that looking assets transactions doing assets year way the is what Oh doing could if assets see end I that’s just with seasoned and the where new different all occurs that up seasoned are that described out and you’re requiring with I’m market but you that I you have you mean? not doesn’t market other

Ed Fenster

certainly sets improving. are seasoned early assets to continue improving, long capital been the costs for costs That the rates likely and slightly has periods efficiency been to of but on both have capital think of assets be over lower time. assets advanced for said I

board significant the just improvement generally So come will the but across news new good most on certainly assets. the it’s

Joseph Osha

right. All

in And there. cash compressing would the faster to buybacks final of do of have versus we’re preference about are to we dividends point the sort terms returns thinking So then particular be, any spreads question all do if you get where shareholders?

Bob Komin

I buybacks, consider mean decide cash list. we activities, Board for the opportunities that including we’ll Certainly certainly as be are I would at that But on - think something a other would dividends, those it’s we level to want decision. time.

Operator

Oppenheimer. from Our Colin comes next with question Rusch

Your line is open. now

Colin Rusch

and the I’m about you growth incremental that do in sustain more for instruments does accelerating as make to out make investments just sense look there here And in to we supportive have start it compelling grow, start then you your I sort in thinking to financial to and market? you you that to growth mean think see structure of some the bit what a and place more that forward. need as XXXX rate economics

Lynn Jurich

question. Great

we’re of positioned well the to support rates seeing. type We’re growth

to talk you come over forecasted again, will We’ve to rate excited QX. very that back So we’re growth XX% the and to year-over-year. up step after

think is for we sit in been seasonality will we’ve strategic out that has our position the having the opportunities QX years liked with but we we’ve next always where the some and building acceleration into more there year. - foundation never now. today that So continue XX

high rates. need we sort for of good we deliver to sense have growth these very So a what

Colin Rusch

on terms into a Okay. cadence is And so can then of of of these size just flowing how a much these portfolio us start to in you those sense that sense just transactions, going the instruments? we and give ABS have of

Ed Fenster

That varies on market conditions.

that case prior I’ve somewhere. transaction a think quarter like not to range on due I in around holds is within which I sizes the probably $XXX think or is given $XXX something. efficient efficient it’s that the said million million calls probably to And

that expect on based So all think I conditions. approximate see value change market that much for that’s subject but that obviously to could as as cadence dollar you approximate to

Operator

like you. Thank turn call Lynn This concludes for now today’s to Q&A to the back Jurich, session. remarks. I over closing would

Lynn Jurich

into much. and acceleration excited Thank We XXXX soon and touch you this for cash generation. forward the all look being growth in to back we’re very

we’ll talk So soon.

Operator

participating This conclude does conference. the Ladies for today’s and you program. in thank gentlemen,

a You may have all day. great disconnect. Everyone