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Sunrun (RUN)

Participants
Patrick Jobin IR
Lynn Jurich Co-Founder and CEO
Ed Fenster Co-Founder and Executive Chairman
Tom vonReichbauer CFO
Mary Powell Director
Stephen Byrd Morgan Stanley
Brian Lee Goldman Sachs
James West Evercore ISI
Joseph Osha Guggenheim
Mark Strouse JPMorgan
Moses Sutton Barclays
Julien Dumoulin-Smith Bank of America
Maheep Mandloi Credit Suisse
Kashy Harrison Piper Sandler
Tristan Richardson Truist
Colin Rusch Oppenheimer
Philip Shen ROTH Capital Partners
Sophie Karp KeyBanc
Call transcript
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Operator

Greetings and welcome to the Sunrun Second Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the call over to your host, Patrick Jobin. sir. ahead, go Please

Patrick Jobin

Stacy. you, Thank

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

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

Sunrun’s On Sunrun’s Mary the incoming Board CEO Jurich, Sunrun’s today Fenster, Chairman; Lynn current Powell, and Tom and Co-Founder Co-Founder and CFO. Executive vonReichbauer, Sunrun’s are current and CEO; Ed call Member;

the conduct as prepared limit you we to ask their we Following questions call let remarks, over many question-and-answer Lynn. from time can session. We question, to that a as me turn just scheduled so take allows. the one And yourself will participants

Lynn Jurich

good Thanks and afternoon everyone. Patrick

and have turn the to announced I'd a our Executive as nearly of today. results Sunrun, news moment outlook, the make we Before a After like to we of CEO the Board. decade decided to discuss to to I take leadership Co-Chair transition

chapter optimal time make thrilled the Her momentum, given proven Mary and shareholders. driving company's our record to of for I'm strong network on of running Sunrun's achieve and and growth, a Mountain excellence an thorough a natural years to foundation track Adding I'm clean and this XXst. confident sector our firepower for and to country build leader the ideal the member the role distinguished excited team appointed and believe has is mission customers as I Green August energy the process, over the and a the makes transition. reliable of households. XX CEO leader help hand Following that will and that innovation her experience electrified and utility over goals climate leader. visionary this we Mary a next operational is Mary in for Power Mary now with Powell, more grid brings Board, to be right she to and

has the business Sunrun. In and of addition, understanding member it served strategy, our a herself. recruit Mary can And last planet, to and with Mary personally success. driving attest a passion Sunrun's Board three I that, company's well her for I'll the the for for deep gotten a to force I've of people, as to to years. hand Mary? know and introduce people, Mary our was to to having over

Mary Powell

delivering energy the and firsthand lives leadership appreciation clear of customers Sunrun's to providing the grid. has deeply transforming revolution resilient of more team the the future and seeing advance It's tremendously, cares creation today experience. so you, all speak you out lead energy in am always pleasure has industry landscape the the for It Sunrun to Thank opportunity to of to share Lynn. I company. two as with this I energy innovator Sunrun by about grown our excited stood affordable know electric clean a why for well. decades, such the and an have the is a value and been objectives. over while I've My on

capitalize confidence out I'm run strong on to sun an work. by more climate extreme and on foundation place well change the the full system electric overseeing I and last a believe opportunities today have few than planet of build the Sunrun's the effects over grid eager old, our and XXX years director devastating weather ever significant With is mission incredibly and creating a from an in to increasing ability enjoyed Sunrun have as strategy critical Sunrun's of great to before. ahead. this over I contributing I years, has in and

Lynn, step Sunrun partnering initiatives to the in the into with to I entire of drive and the and for As CEO Lynn, With to role execute Ed, team sustainable I that, look continue back the to weeks, talented value all company's much our very stakeholders. you. coming strategic long-term forward

Lynn Jurich

Mary. Thanks

I and make respective with Executive As working team. closely ever to explore chapter. design than strengths strategic focus Sunrun's initiatives where our continue us solutions and next I'll freedom Together, the can the the feature support management be talents and Co-Chair, will the Mary, am Ed, crisis. with will I for to energized this most the of impact. three more solving on senior we climate scalable for

quarterly our to results. Now,

second Customer and positive XX% installation quarter. quarter-over-quarter delivered the year. are quarter has record momentum installations XX% continued XX% last we and increased more over accelerating volumes. than than orders from first Orders into and increased the from more Our

the hiring accelerating cash Solar demand dynamic environment. a delivering supply particularly these stream integration and are unit with to our the and we our Vivint growing increasing recurring Despite external of on margins, factors, We flows. balance, quickly navigating while executing chain are meet strong cash

guidance We year-over-year. growth full our to are XX% increasing year

during continues growth. help fuels vulnerable expensive XX% reduce centralized for to nearly and and crisis emitting climate record-setting and from need pollution. and the cost more to We made power season, importantly, increased homes the climate offering transition the quarter, cars infrastructure. been dire away has to need power, outages, customers, need caused is More ended address with service of even in carbon change more our power and Extreme accelerating reflecting by the Sunrun The year-over-year our mount apparent. to QX for weather wildfire has utility resulted country XXX,XXX positioned

our new business, direct partner Our our homes in included business. installation channel volumes and business, records our

more the We also with set records highest in year-over-year battery installations, again the second quarter. than doubling

business. systems our is battery purchased to advance are optimize record plants, supplied and energy from together offering XX,XXX levels resilient and to blackouts. continue to Sunrun revenue from power incremental at communities. families into across from peak plants lack enhanced virtual when through grid, our lead a serve and further times. these these and power to providing recurring power virtual quarter during form on rates last customer Battery manage We basis, more the the or bring the More clean We to an that batteries benefiting batteries companies attachment helping capabilities and This technical On constraints value differentiates power network increased network and energy batteries proposition. again market. this to solar than are scale, daily density

XXX% we constraints. to continue than as growth We in through more the installations work supply year even expect this battery

outage Under benefits energy will home to system resiliency a Ford comprehensive be management Charge the we come with the economic to Station expand backup to accelerate the us exploring offerings, even even manufacturers be the which preferred solar more help improve expect the partnership, integration as meet transition into with end, and event. double know support the the home in can debuts low. consumers than And also power demand home positive charge distributed the faster. further the with the carbon, flywheel and is of EVs allowing pent-up effects. since make solar battery households and cost of the As we manage batteries install EVs affordable further, them an and energy to clean, margins power and infrastructure are increase power the and create inverter, the opportunity solar be with approximately electric country meet is must these managing the To at Lightning accelerate system. most adoption the serve of their home this actively a customers reduce and with Pro needed including home, energy Home EVs home a to system systems the Homes expertise during electric this switch believe system, this consume to enabling integrated of Sunrun vehicles to EVs Through and to transition high Ford's we powering and transition. provided These to truck benefits Sunrun we with given source maximize enabler cost large solar installer F-XXX These to to relatively and the Electric and on key grid and to reliable by partnership increased the realize. vehicles. to F-XXX a electricity. the co-developed on do the sun. strain families. a services, compounding a backup our grid this all-electric to Homes will This ways faster will increased at systems intelligent incremental May, our with larger home We enables announced be the batteries is amount for the national energy leading electricity installing Sunrun consumption. for Lightning. footprint. need to partnership, provider Ford's size bidirectional battery their system,

was Ford more sells each it just year. In reservations. one announced, since F-XXXs million they weeks first received than the XXX,XXX three

We more at share with confident will to helm. going track and to Mary the excited coming in coming Sunrun in be excited the well is quarters company's to -- is especially the more on in This be history will be the quarters. year forward, Mary share the positioned best I'm

strategy enhance allows bring times two our has nearest partners. enabled the reach to and our we omnichannel broad go-to-market further value to and Our is differentiate scale us that competitors us to a

addresses and business strong generates a climate proposition, financial built have We a that strong returns. consumers offers value change

to over Ed and an employees I'd Over thank for and success their such of my like being call the our you, life. Ed. and contributions Tom, turn I partners part our to Before to for to important

Ed Fenster

Lynn. Thanks

know time. on made for her of going from our my Chairman, operational XX for years. my share to efficiency years is Sunrun a the get now full intuition similarly. on to a she as I'm pleased I all for will Sunrun our to I her force time want to CEO driving I'm Executive ago I where contributions her to her matters, I will that have forward. me and Lynn First, passion people I about Mary by joining completed has customers, Co-Executive invigorated Board by been feel joining Lynn Her sure team opportunities for continue. focus Chair, transition Directors. is seven And us her be excitement wait and can't provided for was going years

the into moving details. Now,

eight. slide to Turning

concluded capital reveal. We our have structure

our we'll subscriber XX% contracted additional excess refinancing values. call upside Upfront burdened XXX% this products per subscriber retaining proceeds strategy, refinance, X% We pursue achieve maintaining in value, be ability and rate on decided expect to of cash strategy $XX,XXX debt a shareholders. have of measured we to about Because for we subscriber of to debt. this to full near-term that of well discount and QX XXX% cash fully $XX,XXX contracted value strategy non-recourse Under that XX% cash cost. can based at equal generation to or subscriber our to drive employs using common will to a ultimately upsell proceeds is principally

strong financings we not And equity our or to so need to equity-linked ongoing growth. do execute fund

While comparable costs. since consistently Today, market our most COVID year strong collections, to XXX our an these costs steadily We where we've acceleration in decline. pricing basis falling financial discontinued capital credit points subordinated several XXXX pronounced performance, inception, non-recourse in debt over placed the continued have including we've last through improvements, years. the largely our and capital loans asset and crisis, below seen been which been with XXX have cost in the scale, this is last

make afford our us in little the the same to capital cost free this access affords us scale generation also that ticket the large While industry, cash advantage flow a lumpy. lowest sizes our large

developed to and close, into XXXX. this balance transactions and a we the expect backlog clearing the of be to of for busy year have We transaction

due investments near-term, Over flow to non-linear the capital. working generation also cash in be may

grow financing the also gains several under the structures quarterly net However, generation for next flows steady base this employ business strategy, generating our see pursuing increases while should cash assets. substantial. especially expect cash. this our flow selectively We asset to from capital, strategy of we that and recurring of upfront earning working year, be Normalized in quarters over cash may in

our capital on flow allocation next returns. we we'll market strategy cash into to shareholder head target update As maximize year, and the

robust maintain continue finance a project to We runway.

over Xth, XXX August And us and that, through provide of As beyond Tom. quarter. transactions for to project the turn call and I'll expected the tax to subscribers fund with what executed over debt was closed second sheets megawatts term equity capacity deployed

Tom vonReichbauer

momentum we quarter has into first strong in The Ed. the further Thanks continued XXXX. saw

chain strong environment. significant we with and the growth. year-over-year again Our supply our as dynamic team team what quarter delivered exceptional especially operations volume an We're of navigate a integrating sequential ongoing we of Vivint accomplished, as meet and demands into Solar proud the

Turning volumes. the additions including to first approximately In subscriber second approximately were XX,XXX, XX,XXX customer quarter, additions.

megawatts last this and forma XXXX, first was a quarter capacity quarter XX% Solar. from the of XX% of second Vivint the include energy of from year in installed increase increase a pro second the Solar XXX year quarter to

network year. We at the Our energy XXX,XXX was X.X QX, ended prior with to capacity an end nearly the approximately of customers and XX% XXX,XXX solar subscribers. increase gigawatts of compared QX

with life revenue well additions for number Our most At basis $XXX significant subscriber with we million approximately $X,XXX. on related timing customers. of accelerating value subscribers the representing recognition, was $XXX recurring in visibility quarter. cost existing in an contracts value growth, or years, which multiplied $XX,XXX ARR In from $XX generated, it annual and million. approximately would approximately is Pro energy remaining XX-year subscriber creation pro the in QX, of the subscriber end be generate average provide. the forma value recurring by growth effects the under approximately revenue for was contract to QX, the net generated million cost for net XX would at $XXX stood a clean of of XX On a just adjustment period, the revenue, subscriber or billion be approximately total delivering second our Total value over was $X,XXX. value forma $XX,XXX,

As in sequentially trends subscriber we our quarter's lower accelerating synergy to QX, and last in owing call, our during margins noted were realization growth timing. outlook net

total and including quarter-over-quarter saw mix, sequential installation and slightly a solid sales OpEx in creates values growth in G&A marketing Platform divided the improvements, costs. our CapEx, calculated ITC Creation costs and accelerating Services volumes. near-term as and subscriber our changes in-period While our business to drag down by were on costs, and recognized due are

recognizing growth marketing construction we volume as periods. costs in sales incur systems the upfront in and rates As to If along we accelerate, more with such costs, to future exclude our approximately $X,XXX by prior systems net QX. costs reported customer approximately in growth not and that orders cost normalize be or the would complete, margins sales are higher associated with subscriber in were $X,XXX

unlevered Turning equity now financing the measure to sheet. and of over maintenance Net end the is billion tax an million ended at were quarter, in operating the cash, We $XX billion the all WACC. plus Gross customers flip net earning equity gross prior expect assets our assets earning earning we $X.X quarter. first on at less structures, and with X% earning from debt. the the Gross cash the and of assets to $XXX Net at quarter. assets gross million second discounted total a $XXX $X.X assets the of partners were quarter. end second of expenses an quarter million distributions and partnership balance over of earning assets receive to earning of first from increase increase cash flows net is time, project partners from

of Vivint second activities, continued and set us to the up strong integration differentiation our Solar, for sales half. in customer acceleration experience The a and now in outlook. Turning investments

value generated million the be a and highlighted of normalizes as the been for accelerating include increasing XXXX. the will $XX forecast be are capacity than XX%. year, growth to the of installed and XX% environment. effects to to QX guidance Vivint of more not is and the to subscriber dynamic the the energy QX forecast expected realize range range activities sales reflect XXXX. range increase $XXX the outlook does million from be We growth solar for to includes now We extent, which revised pro in net lesser a the year, and of forma gap full half synergies Total of values $XXX has in to chain adjustment activities We supply full the year This as prior XX% our million from for drag for Solar an we installation between significantly the acquisition. higher growth second earlier

continue approximately to rate Solar in derived acquisition be year. We from cost $XXX synergies run million synergies estimate this Vivint exiting the of to

see While energy quarterly we from in a The XX% capacity on we sequential infrastructure QX in capabilities to installed modern positioned for approximately continues the we opportunity grow, consumers with in the believe focused in growth integration QX. products sequentially to us with solar at center the ahead. to open are our and and growth still please. to for well and years let's expect of strong near-term, the very respond have energy that, quarters the line mandate With questions,

Operator

you. Thank

will a be comes session. We now with conducting Byrd Stanley. Morgan Stephen [Operator Instructions] from question first question-and-answer Your

Stephen Byrd

management Hi, good on afternoon. Congratulations the changes.

Lynn Jurich

you. Thank

Stephen Byrd

these It's the changes. But wanted adjustment new growth somewhat to deep to looking to with nice of working bench. I sort You Lynn, timing your about see the role. have talk that making. a forward you're of

we been to number of how about that think should you what and grow trying As will like larger, kind look may get that continue look. I've think conceptually? about how to

Given an of that that how growth time? sort trend rate, incredibly over you have high might

Tom vonReichbauer

Yes.

in effect this one-time as quarter, So, on here. the growth margins we viewed of largely

million to margins rate full growth in the fully. the the realized volumes Obviously, we level We between as of to several continue installation a and half will $XXX exiting year, of this reverse -- in unit total to as growth still expect are second in and generated diverge going a growth we're there's the take costs and for shows some any synergies more XX% our year, be period. where particular, sales grow, misalignment at in this we which as million period at now to this $XXX value for saw it quarter, much out. strong But as quarters as range in

Stephen Byrd

class on outlook. very, little looks just expense you the debt just markets about maybe opportunity of receptive that more that magnitude activity gave older mean like debt are very that think and mean asset Could that your might where financing over in you bit going legacy what good you lot a today. of you terms kind what some of about towards about time? the financing value bit more -- talk that your And is commentary little is it just activity to Could just in the of creating. you debt your and how the terms between might that to into about talk some a your And of of the talked Understood. tapping differential of a market more very refinancing

Ed Fenster

question. a Sure. It's great

correct. So definitely, you're

asset the print, we've data and performance to that With costs decline. capital collection to continued continue our

that credit the against so than debt much And a of lender five assets years, historically service placed good to our it to are those to place higher as subject that transactions placed. in or chunk facilities we the newly case close today we some for that we five years. It is protection is also would as three when call advance cheaper eight in and seven

swoop certainly, unlock years, there to And the is able as the next so available transactions, a sheet less we coming becomes over our recap entire significant refinance XX the be in to there months. we won't the begin existing balance over But one capital fell expensive. as

Stephen Byrd

longer availability customers Could over that would That's equipment, just on me, for to storage actual have then demand very to of be to talk of about term strong. you like your it customer Obviously, sounds level And you like and continues the ability last source time? just clear. storage.

Lynn Jurich

this in will but tailwind opportunity right? XX over are I here. efforts, that's the for year, are I you're phenomenal huge a restraint over there's doubling growth is we think sales do some we with mean unlock us now still business what right the seeing Like -- -- of the the a even not still install, it's next battery next that months. Yes, with wholehearted so because

of volumes. early expect a So, to we a will suppliers And be in bigger that year with have benefit, next do really. coming number much twofold

that battery. it also is market reliable put just benefit should that, still The demands, but the be the and consistent the able pricing first on to have pressure supply obviously, we'll

with now, right delivering have batteries margins, the of seeing you're the So, still but not the strong declined inputs. the we're of cost these cost

also to see additional proposition value So, that going I think you're stronger. benefit is to the get that going

batteries. to said we've it some now, battery. as customers we markets past, In changes California, will the add the there I Area, of think adding choosing a XXX%. from in majority the Bay we So, majority in a of the it's things the as and be a storms, Texas, went In battery. in minority many almost And rates more around are even with is went vast for to encouragement

think supply the it will happen more quickly So, is I I the will And to there. but chain take get few there. that It supply majority chain paired believe get batteries. I the quite of will believe could solar the a quarters,

Stephen Byrd

very you Thank helpful. really That’s much.

Lynn Jurich

Thank you.

Operator

Next with question, Sachs. Brian Goldman Lee

Brian Lee

the on Hey transition great obviously, days. the you the the here to everyone, from company And grow it's taking thanks here. Lynn, for been pre-IPO questions. see And congratulations,

the I the So, first to kudos clarification. per year. XXXX value going for a do half. -- $X,XXX and the downtick a imply generated on guess to the would question to had mentioned I you you That based if of customer I further $X,XXX here. be in Tom, is kind the second math, team the was just guidance for total

You said the up quarter. should it substantially second from be

above of Or I you want we talking correct. that $X,XXX about pro per talking make are the are from metric to balance being the throughout forma the So, have half? Just subscriber up levels? sure second

Tom vonReichbauer

Yes.

sort the you yes, in So, of $X,XXX obviously right, the is mix system is a as gets on you that around in you that, non-pro all lease range. level in QX. here assume on directionally $X,XXX got $X,XXX $X,XXX range This there forma something basis. and to to size QX, We're

So, level the not QX. at $X,XXX in

we had be okay, would Therefore, and in second think in I is doing math $X,XXX might it you in lower $X,XXX be there the So, QX. the QX thinking, half.

it year. show forma the If sequentially for throughout it you higher the QX, trending number will non-pro use

Brian Lee

Okay, fair enough.

issue, Can you've creation break of then being to that labor being installation, bit more? talked a When the a that reported higher helpful. And factors on a major some cost the costs in you're I were which pulled did cost I So, the the the driver you like installation here, about that talk a that's the a seemed on guess uptick forward. basis, just it of talking cost at from here to follow-up quarter, look pull Is seeing supply kind you are XQ. across more about different us? you more maybe parts seeing of I expensive? a costs? so of Thanks that bit you but it installation chain could Maybe impacts timing installation down Are guys. the bit it's forward, a for break costs? you know down

Tom vonReichbauer

Yes.

main to we factor to really easiest in here you footnotes, place in the looking construction all in recognized yet is to is see see costs that So, the that at the cost relates that for progress. building installation growth incur start completed. it and as we And of the investors begin systems that aren't as

that's relative growth $XX see to that balance installed that million There's much growth our full expect. all amount began one of the obviously but we of of larger completion. There's haven't in quarter-over-quarter. volume can You that that, expect a systems some on grew through that And reached than that, work level yet sort for we would these growth. milestone would

work, take we being batteries, on completes solar, So, what strong everything inverters, pretty a system, the definition done. electrical

see the place And so growing. can you that that's main where

accelerating the effects So, growth but onetime cost changes that, of really in not period. necessarily drove the underlying that

Brian Lee

Thanks enough. it. lot fair a guys. Appreciate Okay,

Lynn Jurich

Brian. Thanks

Operator

West question, Evercore James with go ISI. Next Please ahead.

James West

well. Mary as and afternoon to good Lynn Hey My congratulations everybody.

Lynn Jurich

Thank you.

James West

obviously have couple any increases release, a what going TAM, emission and do of we're eye zero we're be in you team? you weeks Home like that. how increase an really something have But guys our idea would parts would what the in well about potential that that's for talked a something EVs do caught ago, the your that and some and your electrifying rebate of our that. of Act, I versed know So, of to lot pretty there's for -- home much that this where to

Lynn Jurich

be excited Yes. Absolutely. of And just to I'm things some we to climate. realize go got think opportunities aggressively have helping on. I mean additional government we that I to company I the that, offer also starting feel faster really that. -- even the these the more I'll is And like are on to just said,

of that customers James some this putting those And Yes. switch so aggressive electric panel things what and is HVAC be their know and referring over things. they're upgrade to like electric And their appliances to, don't get over, switch in these for would rebates things programs place. like more to for

you dryer, just look cooking, convert be machines washer in of fully electricity like house, these as system one at benefit. which HVAC, that like key -- if additional So, the to the well as would get needs the biggest that. you're to size incremental some namely things you if the and Again, going

battery the by energy additional by -- think, a just save an that's find urgency like whole there's that percent issue. resilience. it around, now for but And set it can what unlock piece the an It's So always better this on think they're products. the that them, the XX-ish business here stuff more new available can of right it's this electricity again, just the a out. I why I not this when of probably EV, think important go I I usage devices are quite of solar stats now. these kind that's there. as I well at coming EV you our I with third-party some installing money, back that as are large as look incredible up all now? more you there's urgency to is usage need everybody for do They a -- There do And with XX% like I just do to external rebate research these I feel wants but of ticks this, I It's but mean service. probably is like advantage better business take starting mandates that for propel is of the -- EV owners, really

that I I It's do to So, the it's is time think think lot now what's okay, but getting create of technology will changing is it's and a really improving come. in value it. drive this the cheaper, business to urgency the this, is

James West

great Lynn. That's color,

you follow-up should deployed other early development Solar a these on testing I app. of a of costs Is for guys soft champions this it's know phase? the of Are now The system? -- app we get me some the the phase and areas. in out of been some live were out app, that the and

Lynn Jurich

It is, yes.

process is storage it well, as live and of a fact, think. app, we're I it in In to adding

it $XX think to California. There's app. focus the the -- the to picture Energy's by million directed here. I switch on of So, complete encouraged funds really that's over And AHJs helping of it's solar Department in directed this. money to more encourage to we're There's

it does a AHJ a top-down AHJ have to little bit with by this pressure. and little a encouragement bottoms-up So, bit of be of

financial believe of really it'll the So, it very works a incentive again, these this for can be year cities that they there'll will it be a we have see that going once AHJs it's to it there's will and think it -- things neighboring single-digit people curve. get -- it's a app. that our confident impact, and the to But to but snowball I I only do be not -- think And one learning big of it. percentage do be adopting of will on them a that their it's going through end

unlocks So, easiest it for business. this for is one the of value

of save that multiple will between it are estimates -- project. thousands per you save dollars Our can

things the new capacity is to -- one on this programs. of of my that it's some institute more helping is I this these want work in So, also again,

James West

All right. Thanks Lynn.

Lynn Jurich

Thanks.

Operator

JMP with Next Securities. question, Joseph Osha

Joseph Osha

road to Congratulations, by there. with We'll Guggenheim Hi I And analysts. really Lynn, know It's going you. the non-deal miss sell-side miss you're way. Lynn. shows doing now,

Lynn Jurich

with sure. being I enjoy I for -- always you love

Tom vonReichbauer

a point the-- contentious was That negotiating on

Joseph Osha

Well, for. anyway, what know I'm But congratulations. you Mary, you're don't sure in

Mary Powell

you, noted. Thank duly

Joseph Osha

eight, cash questions. then this and refi? at over looking page continue Two pre- to get that does on we've pretty so evolve the Do you dynamic assets of think time? is just price post-flip Ed, we're seen going to deal and to to maybe kind case differently. that going upfront this Or where be realization, tend post-flip one

Ed Fenster

play effect going out. Great that think to I question, answer now, see continue to Joe. And -- that for the we're will is

The think little the that post-flip the today been key in to defaults that assets renegotiating five aged fact bit mass contracts, and data. these of take less out they've the never and difference years, actually to XX post-flip between related marketplace in fact assets years where is stuff pre-flip agencies assume still a Draconian-sizing more or that's related years. people these six they're five happened ridiculous I they every ratings your cases the assets operating

case didn't five-year rate senior And debt and you've the first magically, up behind significantly ratings so lo agency advance gotten because materialize. once just the behold, you, stress goes haircut that

that increases the substituting think capital for reason, cost significantly so where and post-flip from which subordinated you're lowers the debt, transactions I to effectively we'll cheaper proceeds these debt continue see And your very for senior financing.

Joseph Osha

mean of about think lot sort makes what of that tax your second thoughts then as and them, the IRRs, wondering that out of, partners conversations cost just and you equity evolve? question. world, with might this when And tax tax of you. in about Yes, sense. I inappropriately about how there's equity they're And your kind just your been Thank investor, are your a look -- to equity and chatter I'm whether high.

Ed Fenster

I think all the is inappropriately capital expensive. we face

Joseph Osha

Really?

Ed Fenster

No, dynamic, but Safe for this unusual to investor Tax Harbors tax realize answer IRS Harbors your has rate structure. question. of into the Safe seriously the really an equity where to equity for the inflationary needs pretax to return the fit

to And or so pretax than maybe of senior to a XX%, priced And returns regulatory that a their X% commonly drives extremely X% depreciation in the really that it's after-tax which But cheaper that. the little be still because is can high. similarly debt. cost feel cause returns construct does to pretax capital X% benefit are the like range the

we quite shareholders and still it's common capital. experience our So, it, as cheap actually

Joseph Osha

Okay. Thank you.

Operator

Your next Strouse with question, Mark JPMorgan.

Mark Strouse

Yes, I'll well. thanks for taking congrats questions our Mary as to Lynn add and and my

Are exclusive Just in he I other to the this expand out President this Can decade, having you've And any us, regarding that be on there talk that within targets auto expand just with F-XXX? remind future? vehicles in about might just lightning mean Biden's can to yesterday touched partnership laid potential Ford? discussions OEMs light with is the of that to electric Ford. the you you you

Lynn Jurich

that and excited with pretty we're Ford. about partnership mandate the Yes, Thanks.

-- car, people. Ford service things enables is the house. these nationwide easy power we're navigate with be that's the And of to partnership truck just adopt trickier one you bidirectional also, electric you your can for the equipment that for we company current the the that yes, backup upgrades making imagine the So, some excited piece able around Lightning. the inverter, about the of that your to the the with of we're and F-XXX things the are the Ford codevelop and with with electric is But upgrading footprint when

and And piece about contributions we're that able to our that excited a service. so be provide to able that's also pretty

a be the this and that about. is pursue partner pretty first we Ford So, will of we excited ours -- we're segment aggressively will

And for auto that positioned upgrade think So, strong want we Do they solar? think the -- to an the the of online want we think because as buying -- will opportunity a be car. experience. a a of help to out the it's the well capabilities, Do gives also to be really a the build the inverter? an out as I Do I e-commerce ways is it be I they in going thing going experience enable to all also unlocks partner little there's other bidirectional that reserve build thing charger? flow well there to more it well be the they you we'll OEMs. those person other lot to want as for

Mark Strouse

you, offline. Okay, great. I'll Thank take Lynn. the rest

Operator

Sutton question, Barclays. with Moses Next

Moses Sutton

Congrats on questions. change the and leadership taking for thanks my

looking of you new to strategy, crucial at ABS First quite still generation, it's capitalization on? other going to of strategies issuances Are sort role? subordinate to back debt play cash clear, so basics. financing debt on Or and the the forms leading are the

Tom vonReichbauer

expect we'll unitranche, in Even are We've are subordinated of in they'll capital. blended water at interested do people And toe I debt. time. now many a question. developing. issuer markets always change Great over be the markets. different in can the Pricing other significant there who a kept of very our ABS cost the senior and

I think the as is of overall be yes, from it's I we're that issuer do So, strategy. deepening think seeing directions. a all the we'll kind part market ABS what significant of But vast just -- of just

Moses Sutton

against we It's a an Got off X% you're seeing it. that to calculated start XXX% saying to incremental Got get seems ABS interesting do measured be positive. you X% it. to XX% That there? ADS going are How discounted, AB? And the issuances not X%.

Tom vonReichbauer

mean time interest cost goes always amortization agency be cases. and collection set rate Yes, confident are principal gets of as used ratings don't well. advance obviously and capital the as up, over so more we what been performance the people expense the of and to increasingly lower, about assets long I have just We becomes period the performance as a the the

benchmark over X% might seeing still capital start You XXX. things could it the you advanced and cost, against like rates

construct. it's theoretical assets, contracted on a definitely, of now weighted particularly a side, So, basis the average well for cost are kind our But on the X%. capital below

continue we think number. to correct So, that's the

Moses Sutton

Right. proving more really geographies? Or California you it role customer That's an decoupling. an here? in and sales think give with shifting to times? timing outsized Or the broad-based way it to in out? growth is that not about of very pushing across the Can it? helpful. further -- install increase Is is then sort visibility And installation And lead growth, the right is

Lynn Jurich

question. Great

and So, But been it's of not. question a day. whirlwind because to on then I think the It's -- on have pretty broad-based. remind me you'll again it's first California, California, of your a

say I there's any driving So, first Yes. that's your Was question geo times? cycle that. wouldn't specific that

No, Okay. yes.

us give certainly doing visibility nice does QX. it job QX And we're into and catching up. a So, I more think

see guidance this quarter-over-quarter XX% versus at can installs the So, you for quarter. XX% quarter-over-quarter

we'll a credibility that but year exit back a does very healthy spot, in give think much the confidence in is it more So, -- healthy still around do the the they're us accelerating. around We that spot half. and

Moses Sutton

And LG Great. any yet? Tesla and you have battery other vendor using last one, not started still other than Great. or

Lynn Jurich

those I I find new no, We're think evaluating our that know you all to constantly and ones, are primary guys data, know ultimately. how vendors.

Moses Sutton

We'll Thank this Great. you. offline. take

Operator

Next of Please question, Smith, Bank America. go Julien ahead.

Julien Dumoulin-Smith

on work afternoon good the you take Ed even and likewise, Mary, business. way where too, grow excited to Lynn see congrats we here. Hey Congratulations, with everyone. excited. And finally, you

So, a of all side here. around, developments lot your on

Ed Fenster

engagement Julien. Congratulations on your

Julien Dumoulin-Smith

what just of it so-called Obviously, peer as I view when Maybe of flow and your of terms to to guys here provided you on what cash. as you're what's with would What's a update? here. you. mean disclosure? in in kick Thank corporate provide cash come expectation sort the your exactly going your terms off multiyear sense up additional on far

Ed Fenster

Julien. question, Great

the out the call we was That's I think view expect term unit, financial side. hoping out on what we in per realize. $XX,XXX this contracts markets, roll the we of we're to $XX,XXX a can as to our proceeds which

start I don't about position Mary's over talking as the what good cash. year, the information be out thunder. We the cash roll to think course quarters, want we'll do steal next generation, with in we'll of more about coming we to a flow

it shortly. is and tuned stay can and interim a So, prescriptive this good update, on more get we hopefully,

Julien Dumoulin-Smith

mean a cash, part. to to that any of mean this is in I give and how to question. available strategically, then such do I you point does pretty right? my look question, mean cash, if what is this in put you've deliver with how a magnitude question let's is, my that's you because me repurchases and here mean think sizable key mean do clear at maybe exactly of and But if Mary I about lever aside, are the XX% the level sort Great. -- course you extent. it? think to you're of that the And through at to models it, pretty that's I on mean -- do may would If XXX% I we have to a differently? in kind this fair us of up just it's what point is I next going I do like boxed out and what about can model, project want that of you uptick pretty alluded actually mean order what you can the sizable.

Ed Fenster

question. Yes. Great

acknowledge your which yes. to to your first, is So, correct, comment, --

capital and does to do these sit made advance in to our it -- significant also CIP burdened the things of have cost, for amount to might a rates, fully proceeds so often upfront Obviously, like -- that our over near-term we nine cash our that sorts at have investments achieve they quite result. we inventory do scale, investments get up working compare well flow you months. If as Potentially this on for quarter. sheet the balance of in we you package

that critical large building year to position the a of So, coming for new I through that is working quarter two. or and team, a which and next it layer, the in in the think layer additional provide all plan working with be better through and we'll

Julien Dumoulin-Smith

it. Got

hearing level? substantively nonetheless, if may it the like lumpy. clearly, I'm cash it anticipated be you somewhat greater But the sounds at corporate than underlying So, flow right, trend is previously

Ed Fenster

to Well, about anticipation it's but do excited it. We're leave we significant. I you, think

Julien Dumoulin-Smith

Excellent. Well, of all. it. you best to Got luck

Lynn Jurich

Thanks Julien.

Ed Fenster

Julien. Thanks

Operator

Next Suisse. Credit question, Mandloi Maheep with

Maheep Mandloi

Hey working good afternoon with and Look forward and to congratulations, Lynn Mary. guys. you

Mary Powell

you. Thank

Maheep Mandloi

how here, costs much think given these in shortages in just there related that just to for do I QX. the your your competition higher maybe especially labor all channel to partners? Maybe just out one and seeing on in And understand in-house is to question costs the investments partners we wanted of we're channel about that, market? a over how follow-up versus maybe

Tom vonReichbauer

Yes.

growth record growth So, saw in great We of in direct. we mean as our channel on the earlier, QX parts margins, business. saw and lot I of Lynn a noted

business, in And in sales show of the both. up the expenses, purely our growth recorded, CIP -- channel payments that But all installation. is the flow there both elements in are given way just marketing that through in so given partner those them. growth there of direct and of definitely reflective are some Obviously, the growth

partner-- I channel think on the

Lynn Jurich

Yes.

we we're as partner continuing take believe think mentioned, to On we channel And growth. there. side, I record share the

to the take we're care around experience, I people, brand, our experience differentiated the think of people see help platform that we products the and bring operational financial customers. sales the

very that growing there. feel so positioned And we is business and and thriving well

Maheep Mandloi

Got these inverters anything from apart upfront opportunity that, you years? with question And a partner channel either adding for kind about like the chargers out there it. EV But few And also the opportunity selling or second think revenue OEMs customers the immediate or like way bidirectional is Ford guys. or potentially next here Ford else from the of maybe over how just other a should we in to me. another EV

Lynn Jurich

think we'll I is -- Ford launch Yes, working I on plans. their think be still specific

touch think margin bigger I is around a in item. quarters. ticket It's in solar, the on accretive, we'll are So, given that future expect be But quite that it systems. again, particularly these we larger that

do can we're what So, to that the excited about -- customer customer our values.

Maheep Mandloi

All right. for me. it That’s Thank you.

Lynn Jurich

Thanks.

Operator

Harrison Piper question, Kashy Sandler. Next with

Kashy Harrison

Thank and congrats, taking you Good questions both for Lynn Mary. my afternoon. and

XX% guidance So, is over my megawatts. XXX growth first guidance -- your into XX%. implies taking my related. question, excuse rate quarter me, QX Tom, Full year is

the So, of past? another -- then just rate that just XXXX, QX. growth through you XXX, the into think help medium would me. about in reason long-term the medium-term implications historical all it -- implies, XX% XX the entering through to rate growth talked why flattening call term And these end relative on hirings us there's for the the growth of on -- that's you've if could your or conservatism about be it, And if think Wondering entering QX. if that's

Tom vonReichbauer

Yes.

QX, So, increase the up first, full to our the QX often for outlook we seen have the recently. in seasonality were excited reflecting more year, year of for growth to we've level XX% there. a

things year, those. like the few having in we're weather to and and a deeper navigate As we crews sitting get of with dealing

environment Often, in dynamic view to good your we'll been over into the on. very those eye it's and XX% So, confident the think right we're which, closely backed between we our quarters. on an quarters. last just some manage that, also that there. sure have there shift the we've spot continue increase, I keeping supply Want to is make now, couple see chain the had to area that of numbers visibility yes, are you

year with so full happy outlook. And the

grow continue I leadership going position. year, above cement think to into gain our our rates to head next be goal we and and it market share at to is as

outlook time. omnichannel get on for our to reach presence little But deeper the earlier, technology, more Ed operational we as take customers to use and expect the that definitely of term. the in And mentioned of share brand, so of subsequent some our our medium calls, period elements a over we'll

Operator

Our comes with next Richardson Truist. Tristan from question

Tristan Richardson

evening guys. good Hey

new Just a me quick home for on business. the one

you system side in on at just master and about that average you, about given all, Some creation the business you on if size creation mix but interesting or some market planning, is scale stats cost the for affects share it et growth also talk efficiencies as there. now lot different, how perhaps just -- cetera. side, a more And either talked seeing is can

the perspective? as outpace might Just growth that business, from the it continues a affect things mix maybe to overall how of

Lynn Jurich

because needle grown move a nicely, focused that share our quickly, we any it enough from overall it on really reputation. Yes, pretty business I which it's on share has significant numbers. again there a underscores It's still of the very going to we've weren't think and pretty small gone unit a limited not to the

looked, I was think sort around that megawatts something last something I or XXX of of size the market annually.

we're make a And of needle market the overall big unit going economics. sort of even share scale a difference at healthy so even sort to completely there or in look the that the again, sort you isn't operating business, move of the level in

be put that you is excited normalization solar, more quickly. consumers this is about that very it. really does a comfort it will creates get on So, what more the with where think thing I house, you around solar That's we're mandate of

feel like it overall of part the does we the financial a picture. mandate as from that's performance strategic versus benefit that So, from bigger what

Tristan Richardson

very Appreciate much. it. Thank you guys

Operator

Next Rusch Oppenheimer. question, with Colin

Colin Rusch

terms into sales energy or little Can cycle-time much. you talk your impacting with in storage so process? Thanks the base you've progress existing a customer upselling the and that's charging the overall bit EV how made about of

Lynn Jurich

Yes, the surface around that. we even scratched really haven't

batteries solar forward that the economical -- it's the the that supply coming opportunities. next out the the time that of will now more technology is sort for on and where retrofit the with are all people The for We've is. be the cycle pair for really hardware shortage fact The that's in us. attractive same really much and and So opportunity storage given been of batteries those the where to right market. at focusing

I So, people, we right additional sales for forward. to as have that that definitely of -- from contribution that will but will think going come. or But be not will upselling us of another now, had big upside sort

Colin Rusch

guys able Thanks utilities there capacity avoided to are actually then any can not services And around customers. value additional build through early something capture out or or that would maybe grid so discussions out some this, market or these really but than much. operators would infrastructure to communities? is with the sure directly the service for have monetize follow-up build to that's of on other to cost of being I'm you have

Tom vonReichbauer

market different we a with a do the there. lot the there's can question. depending we value-add methods are That's on great of provide to that I there different mean obviously, that can And whom and counterparties partner, that. do and

a just this middle over virtual for the is of it storage in -- reliable a lines inefficient and forward nowhere. is solutions whole to be install stamping panel underground just of grid we're power do I creating inefficient can't than this expensive to to sort is it's to stuff of business out just really of the exercise think And is part years rubber we're anymore. power that a that cheaper ultimately, coming so what the the way to bearing provider doing demonstrate low-cost hoping that lot

but role a a will bit play optimistic that little take So, there. time, it significant I'm of optimistic we'll I'm really

Lynn Jurich

so offer, why the plant company. power the next And virtual Mary reasons we're just utility, in the pioneered leader mean she phase this I XXXX. the would first is of is in one I the her of for confident

for lowered bills And brings real and credibility she her customer. her so she around,

This is power distribute and need system she brings as the fastest most This the and to real rooftop scale. clean So, around. hey, it do efficient a we it. way is, not way credibility versus more utility on

it. So, of let's advantage take

Colin Rusch

you Thanks much Great. guys. so

Lynn Jurich

Thanks.

Operator

ROTH Next Capital Shen with Partners. question, Philip

Philip Shen

Hi for my Thanks questions. taking everyone.

you QX, XX%. them partners As it grew channel relates by to in your

pace up network QX? continue? And you can you over What in you're kind share this do think think with I long of gain how pace QX, partners and expect the of QX. XX% do

Lynn Jurich

are Yes, the the look what don't with geography, how what channel mean we we to the but really and growth get we path do share attractive market also by pleased is reach most market are -- I to we channel. most at really consumers. forecast in

channel. and direct be sometimes that can can that sometimes And be

As I equal the reputation, share we're of created with the so always say, pleased not terms in really the all channel partners gains. quality, are and

high think believe we're really take going we I the I to we're think most quality partners. overall share, for to attractive continue channel partner and the

Philip Shen

Great. Thanks then in perspective of Lynn. some you financing terms us debt. non-recourse focused strategy, on it your like And there, Ed, you're seems gave and

One there of green bond. with your peers is out a

debt be If So, them? would see? ever of wondering was comment you if could able bonds on views kind to timing you so, green options and might specifically, tap of into we recourse what your

Ed Fenster

relatively given Phil. question, financial the every green for of been that's years. issue the think bond business. understood I nature we bond a our markets I Good mean And is by

capital there over think that period our as And set, the being credit year, of over to overall financing delivering think lean benefits and diversity to strategy we're right we once Does business our be cost is goal other consider the that overall that strategy might things a in But into we we've structures we Sure. given we it the general time? core mean through not established a the to very of heavily that that And is foreseeable might future, have obviously that financing. over a shareholders. did our non-recourse I rated we might and think of way tend -- time? strategy. lowest this can work Yes. the we that I that for achieve common

Philip Shen

Great.

both. Okay. I'll on. thank it pass you,

Operator

with Karp Sophie Next KeyBanc. question is

Sophie Karp

afternoon. Hi, stuff Lynn in. Mary transition. on me Congratulations right Thank you good squeezing for to there. Exciting the and

you late guys has terms been stage million you're time. grid talked awarded like keep what if last in will update and amounts so it service know $XX the Maybe I could of seeing discussed, revenue give us opportunities So, in expected short. a some you opportunities I there? something in or lot guys from on dollar about

number Are using And you opportunities? those so, acceleration this has any changed? of

Lynn Jurich

Yes.

So, absolutely.

kind mentioned, of would XX% programs beachhead of I think we XX our be about more we but the pipeline announced that cover as geographies, have like there, XX%. our the

slow-moving these you see interest yes, that we counterparties, So, are as pretty might absolutely continued oftentimes imagine.

these because for three unfortunately how why that's past and -- that's so And these years discussions advantages that years been next out two are is the they of will some is couple we've long also are this our on in the but take, we're assets that which play because so over important to and supply again battery solving again, not I big now us. again, aggressive right also -- climate immediate that we're a see quickly. for will crisis be because differentiator the and ease of We've the issue, sort you'll, think super programs, of

will see a You soon. with line out that not we break revenue associated this anytime

projects minority still of this incremental that maturity our to it's I the of have at our margin in of vast think again, that stage It's but a we've add said it. we believe still that. $X,XXX-ish customers, it will about will

Sophie Karp

forward And maybe you et various the Thanks. with the then moving it. so Ford, Got also, partnership cetera. initiatives, conceptually, clearly charges, with the

selling you're it of share batteries, space for to the a solar. comes more services. selling and move to of more of Does make these sense customer wallet maybe towards customer you ESS You're -- have tried the capture kind and to

Lynn Jurich

That's strategy. core to our

ESS, sustain we yes, we really that it. in, growth are no position accelerate market and the why think reason of dominate and residential see in the whole share leader I I wouldn't

advantage. something competitive will us to be core absolutely So, and a believe we

Sophie Karp

it is particular say suite worth it too to could products early that now? or added that to mentioning the Any be

Lynn Jurich

the key and XX% emissions. creates of Yes, we that some create The are in and -- if in and the there are emissions energy we those that the heating cooking those the carbon XX% ventilation, of big others. home, believe home devices and water are heater,

excited in in fossil-burning fully as affect over if electric easy a households role see going our people we -- it's those the industry that make early electric get the machines I make that them to absolutely can for again, switch with really into vision. grid. to for the much things of And vision. very assets so powered to many And society, And replace initiatives and change those pioneer for those network me the how We it the by to that that's of in that machines an And some are it help to company. Mary, was support we're have and renewables.

that's I company's a So, future. key do expect part the that, of

Sophie Karp

Thank it I'll you. on. pass for all That’s me.

Lynn Jurich

Great.

Operator

you. Thank

question-and-answer the now session. for concluded to closing turn the We have remarks. floor the Lynn for over will time I

Lynn Jurich

said, call. not This going -- anywhere It's for chapter. But one good next finish Well, I thanks, and really XXth everybody. as CEO. this is Mary lead earnings my it's excited pretty as a to to

you and the after stay call. we'll tuned talk again So, to

Operator

teleconference. today's concludes This

You thank for your lines disconnect at participation. you and time, may your this