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Sunrun (RUN)

Participants
Patrick Jobin IR
Mary Powell CEO
Ed Fenster Co-Founder and Co-Executive Chairman
Tom VonReichbauer CFO
Brian Lee Goldman Sachs
James West Evercore ISI
Tristan Richardson Truist Securities
Mark Strouse JPMorgan
Joseph Osha Guggenheim Partners
Aric Li Bank of America
Kashy Harrison Piper Sandler
David Peters Wolfe Research
Joe Beninati Oppenheimer
Philip Shen ROTH Capital
Maheep Mandloi Credit Suisse
Call transcript
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Operator

Good day, ladies and gentlemen, and welcome to your Sunrun Third Quarter 2021 Earnings Call. All lines have been placed on a listen-only mode and floor will be open for your questions and comments following the presentations. At this time, it is my pleasure to turn the floor over to Patrick Jobin, Investor Relations. Sir, the floor is yours.

Patrick Jobin

Thank you, Terence.

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

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

Powell, and the today Co-Executive Tom -- On Ed CFO. Fenster, and Sunrun's Executive are Chair Sunrun's Co-Founder Mary Chair; call Sunrun's CEO; VonReichbauer,

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

Mary Powell

Hi. of of CEO you Thank you, my all speaking company. as on call I be to Patrick. quarterly first industry-leading today to transformational this pleased so am

crews, field While have our the am In will all customers. role, for my to partners only with our we month, I most building our first installation into my and directly couple distributed just the excitement customer-facing months working I of accelerate energy to in customer-led the intensity. importantly, revolution accomplish with is and a and dedicated enjoyed our particularly teams,

months Sunrun delivered quarter. quarter, customer customers, will prior then XX% over in quarter, base priorities reflecting third the compared the and I The growing of touch will energy in team the my I by to on solar for capacity the strong growth our XX,XXX First, installed discuss Company an a performance our ahead.

see in sequential to with very than orders. as well customer activities strong growth more continue sales We XX%

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

grid battery highest powerful and more they whole bodes electrification. again growth, incredibly optimize and going also for work customers XXX% with year-over-year what We dramatically installations and incredibly our providing consume is than through advancing achieving on when in records forward home our an accomplishment set outages power to QX, This to energy. well how want

growth continue capacity solar to the We expect demand as affordable execute new energy this continues year options. and energy XX% to in clean, installed team homeowners

Importantly, a which to subscriber we in expect improvement increased in our over net values strong QX. higher sequentially, and even delivered net value, subscriber again we $X,XXX report

improve a gradually dynamic As tightness a pleased with so many third are our was tightness of navigate very you is why environment costs addition battery that to able we supply Sunrun that in higher supply. to logistics chain and on seeing know, am continues material and I customers. continued the industry battery This supplier, onboard to for

utility rates, grandpa's industry in simply these we rapid modestly simply everyone and and which it do. quarter increases of and facing context these raised which these form to on hope when and prices mitigate provide the the the resilient in to optimism proposition is value we put As at because address with a have to energy with centralized of climatic demanding that and That continuing the offer said, consider tools filled that aren't and am times the escalate grid grow, customers increases of continues effects. some resilience challenges the cannot I clean, which are selectively cost limitations have is a battery you important to we provide. utilities simply particularly customers today, affordable means able during price to several our are to availability, pace,

is and of more solar storage a large built to XXX,XXX Our built date. fundamentally for base made service mission creating the than change. has before. progress market climate today of planet not and frequently our a critical Sunrun's sun more Sunrun over offerings. ever of system accessible electric and grid a customers run is We've failing with the lot by leads

a nearest efficiency competitor, our that We at drives is creation Xx are value larger scale and operating than more opportunities. which

multi-day We investing differentiate now solar Sunrun brand and reliable transform further build clean to home homeowners ability of which are the and outages to the over not offers to their nationwide, their homes and lives. power XX,XXX systems customers just power to battery heavily energy. has think but through with installed

Solar during is manage grid constraints also and or to times. the helping optimize when power systems battery peak grid, the on purchased supplied to

network incremental Sunrun's scale, network generates Sunrun the value differentiating offerings a virtual We serve lack to pipeline to and technical of plant forged that necessary virtual density to these more to this capabilities are $XX XX companies market. together date has awards form recurring offers has and in revenue million revenue. power an and proposition, further from which batteries starting customer the power plants, enhanced than

convert ahead this to in the incumbent and more expect now energy players. faces. radical challenges to show of system believe can I the with the collaboration is quarters resources distributed valuable for traditional We how solve pipeline be time

together, how faster solve modern we can about challenges they Moving this to manage through grid. the face thinking

with adoption partnership We widespread continue excited from electric to and be effects of about expect Ford the flywheel vehicles. our meaningful

XXXX the meaningful they affordable to noted past, to path be we to distributed energy thus breakout strategy to want another even system incremental and on margins are the on It have differentiation to an Consumers the us. when front make Sunrun for vehicles of electric the bring investments carry sustainable the our year up, more sum accelerating switch growth, opportunities To often far, with I offerings. leading cars excited EV. way it clear and our and the battery our very electrification. home trusted their strong nation in I and on on innovation We'll we a about of believe in solar provides energy home driving I size am and a us opportunity us leader also paired above-market will believe with provides also are partner charge capital increase continued progress discipline can scale, the to specifics electrification whole believe launching consider by business. see will generate provide systems, with the in finalize markets the tailwinds in as As stakeholders. our XXXX enable well adoption a our emerges which what value our plan we be more that whole for to operating D.C. we as and value significant of clean, customers. We high more and from

Ed. our I'd for partners to our Over dedication Ed customers, thank to for contributions our really their Before to like employees, I our turn the to Tom, call over their to mission. and and our you, success

Ed Fenster

Mary. Thanks,

our of on We also continue policy market execution. an a and own And progress I'll to capital matters. provide touch today, update couple on exceed expectations strategy. I'll and our

which equipment credit with of solar risk the in in transactions. scale less typically quarter, that debt. lack last utility lower drive and to I've investment-grade customer we I pursue for transactions, of cost residential diversity decided been make a a that single strategy transaction saying discussed As location solar concluded have will generation regulations using years in scale a than a transactions and we be principally capital than and include for weak because rating. non-recourse residential utility customer near-term cash diversity should this

In same bespoke contract, transactions lenders costly are utility addition, and finances more against Sunrun form to the so dollars whereas for of review. scale billions all

in to made spread where an we benchmark been markets the we asset-backed a of basis utility reality, the quarter, wind the rate have priced This senior XXX. my solar, spreads vision security between and least points. XXX and pricing at senior at at scale in loans XXX a debt Recent market storage swap

capital. this savings reducing transaction, of as we We our of transactions. to compared subordinated also to made XX% achieved rate In cost significant recent XX% progress the interest

contracted subordinated room we subscriber reduction interest I when underprices assets. scale of discount to predict seasoned advance in last have we However, on assets call. contracted on using significantly all-in range which of transaction The estimate rate. transactions, included our above newly And exceeded the will. measured the newly proceeds on the XX% a we is transaction of high placed the XXX% slightly value. result assets significant was and XXX% forecast both subscriber XXX% ultimately rate still end value serviced it X% service than utility capital rate The the for more this and placed before This

assets. We This is flow to level rule our in continue service XX% proceeds good is newly fully XXX% to believe of subscriber costs. a contracted of use of excess to in burdened placed of of in well forecasting value thumb cash

we us $X.X growth non-recourse also our warehouse month, placed assets the not flows available were facility operating our Last that capital raising do support customer billion growth is advanced lending refinancing were warehouse incurring received equity-linked of also We of we the while seasoned cost proof costs. to ongoing expanded assets. rate the to continued to facility our upon lowering to financing. permanent. equity in an while a Cash strong assets, increase QX in in financings a also reduced one XXX the points excess by or one result point LIBOR. the two execute we interest transaction basis the and This expenditures fact on portion despite The was spread fund $X and the cost factors, of of an billion, advance of reducing billions to So in of commitments, average need the cash rate this service further overall in flow seasoned to over temporary increased transaction. newly in

swaps, First, we of facility, out-of-the-money connection interest rate during which of in into warehouse old retirement entered settled we our XXXX. with the several many

in $XX swap is rate XXXX, on this do dollar-for-dollar strategy Because mark-to-market fluctuations of the our headwind interest approximately rate repayment of our Because assets enter net reminder, we resulted this unusual to were include outflow swap quarter. in a impact to in earning the calculation, business. cash termination rates a higher NEA As in created interest million. mitigate not a to into our swaps

the In new and addition, on the draws in subordinated QX. we QX in made debt placement, other two one

in proof lowest QX industry, generation large ticket also the the little access that free our serve us make the scale points cash cost same capital lumpy. affords of this afford that our as large a While sizes we in transactions flow advantage us to the executed

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

business should However, over under substantial. the quarters several this be of year, generation the and cash financing next flow especially strategy

continue We runway. robust a finance project maintain to

As of subscribers deployed over was us XXX transactions for capacity equity term third beyond the X, fund sheets quarter. November expected and and project tax through to debt megawatts closed provide what executed

service XX% Congress, about Given to likely equity existing additional the advancing XX%, discussed Key certain reconciliation Arizona eliminate from improving being which in tax law an not the proposed state to changes is add the others of and will Service, has to the rate advocated multifamily compared of does structures the of credit for return year. of argued $XX shift I'll an the underscores of state about to companies is that XX%. equity that environment, and comparison growth We and of utilities digits, advanced would and week to or are investment we utility, these This the last to returns for about expected these likely law now modifications by the this a additional fees without fee. is policy cost turn discussions to it are to a two the bill, financing stockholders. systems for in tracks California, as interest in over per the our additional among in worth in a is voted high deployed potential cost economics customers for terms is solar local the low charge there formal single call for expand per news, handful because solar sheets. mid- commission incremental require certain to buildings term access year. California local fixed considerations quarters' the our Despite for approved ratepayers the transactions the Commerce changes of customers, data, once as increase of warrant high in a agreed utility XX% pay. that APS in currently requests where X.X% investor-owned the tax credit ROEs if GDP Including interesting census $XXX tax in rooftop Tom. strategy. rate from and capacity. regulated In the Especially is business Public finalized Arizona are Also direct Commission stage solar tax runway the grid in XX%

Tom VonReichbauer

significant posting integration solid Ed. while quarter and the net rebound results, quarter, our dynamic made Thanks, in continued of strong balance. subscriber third and on cash delivered We marking Solar growing navigated Throughout we operating our progress environment. values, with growth our a volume a also another Vivint reported

Importantly, deliver strong growth meaningful year for outlook able generated total XX% we the to for value full our were year. reiterate the and

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

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

We the every strength quarter. in and services quarter. across with demand channels the our all outpacing for in products versus year strong was Installation in There direct new rates prior to double-digit and was growth, was our our between and growth versus sales continue with in to experience growth what but homes notable in customer the of install businesses route market. growth strong narrowed sales gap we second experienced QX, installed installs meaningfully

Our over expanded such as EV chargers, the additional retrofits, continued us opportunity offer management and and offerings. home time, additions or repowered to upsell customer battery services energy products systems

created Additionally, to opportunity this helps point, X,XXX assets or of our to valuable small the quarter's fleet to inability growth opportunities megawatts To solar of perform to competitor an a in total business. our approximately power systems. add increasing our fleet this XX plant unlock customers of virtual grow

QX While increased the our themselves may they future, in levels. batteries in industry further record future term, in the opportunities we'll more again arise. and consolidate and of rates near do base have we again not to such the expect volumes but customer Installation opportunities evaluate present if to attachment grow

We expect XXX% installations prior to year. continue in compared the increase to to than more XXXX battery

battery logistics compared lowered our term Although battery expected supply have and meaningfully outlook. the the in constraints near volumes prior to

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

At recurring QX, life clean value subscriber $XXX represents revenue, at Total and subscriber the net a of by XX energy $XX,XXX Our most delivering activities years. is in we over was a net stood we of value subscriber of subscribers generate the This approximately significant of contract an revenue generated, under average as narrowed the cost XX- recurring $X,XXX $XXX which our QX, with period creation approximately million annual contracts In between third sales of ARR, provide. with was for or as and XX-year number end million approximately significant $XX,XXX or was expected, additions installation gap increase quarter last $X,XXX. we the activities. value from multiplied in over the subscriber the the value quarter. remaining

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

in but guidance. the volumes with installed now proposals levels to strong forecast lower full year, to be now of higher is had generated the XX% to around federal XXXX, solar of we year consistent environment. XXXX supply the owing costs, logistics full material around at tax some energy in continue The capacity current million growth Turning incentive investment a our growth for our outlook. to current value creates for credit prior we $XXX year-end, given uncertainty installations higher for Total expected than margin-accretive and mix expected continued sales and QX previously chain battery

supply which global could the monitor and regulatory to related economy. global and headwinds the industry continue chain to environment, We cause solar

conditions. to QX, strong forecast from current saw positioned think net higher QX already values We subscriber will increase we a weather be than we which are in However, well QX.

sales realize As in normalizes, increases, acquisition, Solar we And the adjustments activities price installation activities we from are our reflected installations. Vivint strong subscriber between battery and more difference the expect net recent be as mix to synergies in XXXX. values

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

in strong not invest meaningful cost work that year competitive healthy valuable more positioned our volume our our generation sharing all in is another over, than extend for believe growth growth we Vivint in XXXX more project-based market, cash volume, leadership outlook While yet capabilities We from and for we've in XXXX. integrate set year and into values well realized transaction, financing XXXX positioning likely our excellent specific subscriber this synergies across margin cash up on to conference the net are details undertaken operations and on anticipate us has in Solar XXXX. We routes in above-market February. resulting QX and $XXX the million generation, call to

capital that questions, that, how share time. details the also let's optimize line approach open we returns at to With will We will our structure about shareholder please. strategy more for

Operator

for Thank go with Lee We'll questions. [Operator our Goldman first you. from The floor open Please is Sachs. now ahead. Instructions] question Brian take

Brian Lee

that last cash flow the on made in Maybe, the preview Tom, of appreciate steep point, I million [indiscernible]. on you generation that XXXX, $XXX

with do metric the that's versus visibility this capital you And to how do in lot you point flow How cash [indiscernible], have it? already next have going locked you it So to year? here at a then is much and define and your that proactive how balance cash raise of year-end for been at cash in definition still of year. to sort pretty is

Tom VonReichbauer

Brian. Thanks, Yes.

So given facility the working and to the debt definition and capital cash change down. any net total corporate in our size we're can using changes is up here recourse of revolver

So changes this parent of is total cash in change debt. to net entity, the in

view looked at as different and front and number So like front, a us on really we've and the margins modeled we've with work the come of out $XXX level as of this confident of on in time. and volume inclusive views more the federal feel on margins And a disruptions, variety we scenarios precise of and on call. with QX of the the those back whole items, the clarity pricing chain million policy picture, supply couple volumes at we'll through of

Brian Lee

right. And enough. impacting know the guidance. lower the XXXX then All I said of you generation subscriber Fair installs battery value mix is

said have And you maybe supply we as Before taking kind what's then into two Or on now? step the year-on-year can what had a sense of us you're your Is you there situation vendors? what a done supply head new XXX% back, still that seeing you growth, of give maybe source more it XXXX? product? to

Tom VonReichbauer

Yes.

reduction the in lower million. on are $XXX generated in value around expected to attach battery expecting we installs near-term supply total previously QX So We of XXX%. than guidance has our battery still bringing definitely north but

previously we've here. a closer the Mary a supply process that bit that in diversified chain. reaffirming above supplier added of and a that's bit of now launching still to that. So had guidance mix mentioned We've quite that the new expected, into we headroom our

a consistent what the manufacturers with suppliers a to interim, some variety said position as out optionality of improve tight We able picture on across I as relieved batteries, continue in very of expect environment. are But to ramp tight before, quarters. now, supply the a challenges build so the the projects. and think backlog And navigate overall will maintain to future come to general in of we're up chain of global

able attach access were XXX% as we supply, to we be growth. But keep and rates still to ramping in and record And battery QX at than so we'll get there. more expecting year-over-year volumes

Operator

go from ahead. our ISI. with next take West We'll question Evercore Please James

James West

done with you're excitement because voice every not a different all in day to stuff, your and your So teams so well it feeds, on almost over surprised to get the out in meeting you're my hear Twitter I've there. Mary, city and been

Mary Powell

Thank you.

James West

the channel from the execution you exclusive exclusive? -- of things. agreed quarter or XXX% to that guys. to the Were is quality or about into guess, How quarters? this and that flow service just I curious is the One different those all So be part they last two brand new kind partners market? several the And not of recognition of is this

Tom VonReichbauer

majority I'll think deepen in notable under as from Yes. get relationships, We channel partners partners. time, an exclusive we and there here And a of first some going, in arrangements, those many the jump on as of aren't over convert for generally examples exclusive. our weeks relationship always well. some to we we as us non-exclusive to exclusive strive recent

James West

Okay.

notice, then that there? I did a strategic your just anomaly? a Okay. quarterly there up Or some like Fair inventories amount sequentially. good is enough. And Tom, move Is XX% were that

Tom VonReichbauer

Inventory.

Ed Fenster

Yes.

that So, general are in disruption we solar around between just deliberately also of more panel marketplace on given some likely including of into increasing the We're and panels triple than inventory markets. uncertainty March. chain the supply shipping logistics delivery inventory, digits days carrying the some in levels as

kind happens to term very over able or and needs. even deliveries our it's continue to what make matter meet We the geopolitically, weekly continue customer sure now, that we're a dynamic want short no to moderate we just environment of right obviously take to term but

Operator

Our ahead. next go Richardson from question comes Securities. with Truist Please Tristan

Tristan Richardson

you as services? see potential you years line a expand past services the areas do Appreciate new of of looking? out, you inside the of there over the the peers would come some Ford. where on years. sort some of home, a other sort your kind couple what Obviously, move of ton couple of additional comments with could look particularly services talk sort are of of et to of But Curious services, cetera, have you Since about peripheral going? be more

Ed Fenster

question. a great That's

well. we or rooftop years solar the really definitely recap to hard made really one into the company push as just So And time. we're five were for more, now long history so a batteries ago, Company's a where many we number far, a obviously,

homeowners I assist ourselves transportation storage relationships think in their system positioned than the customers. cost to strong and better we minimis. add develop anyone a on needs. We've de view electrifying solar proven marginal We is as our particular, customers in to with and sales heating

We The obviously most service, towards next expect that we're services. which be pushing would electric hard the with is other case vehicles.

you home in Over truck truck for past, in be know, bidirectional As to we've plant allows virtual discussed outage, from the the your can as with used and Ford which electric a well. charger, the immediately power time, we the F-XXX power operate that purposes codeveloped you get the event of electric launch the time, say in sure would product. significant of vehicles more But products battery, space the main is and have launching our the as we better and pumps other around you. the continuing I right follow what on dominate heat storage focus vehicles, to to electric over now, and are

Tristan Richardson

that Or for -- talked services Super $XX project know I you've before. follow-up $XX about XX yet think associated on the in you And as backlog have of grid Should is helpful. with terms of funnel? announced? just the be to have announced then potential million that that about the Great. is opportunity, the that a programs programs we million

Tom VonReichbauer

add seen, given And that deals late-stage number of of the here, It's a couple The a you've XX of good other expanding believe process But held in building lumpy. the in negotiation with to as a are quite many headway there that awarded counterparties be that we're that awarding contracting within and at pipeline. the that we takes we've pipeline, here combination quarters. future for while. deals and deals of can we'll in quarters

Operator

Mark our JPMorgan. from Strouse question ahead. go Please We'll with take next

Mark Strouse

partners. to wanted the go back I again channel just to

pretty had You growth good quarter-over-quarter.

of I Obviously, large kind you deliver. distressed or your so mentioned lot may well. peers of as kind consolidate driven a else some ability a really more can be equipment? X,XXX partners not that scale that of larger smaller as competitors how mean, just yes, the think from dealer rolling customers of just are the something with point, competitor. then as industry? that up competitor these there by a last this you And here driver particular mean, I -- of of a But of Some Or kind of kind couldn't is is this to that secular curious that's companies lack get

Ed Fenster

question. Great

So this is Ed.

about been So not do I've think, well. over make what's could it have that be construction lot could been And companies -- reasons. things industry, strategy, could our seen you it could I've various the at be financing, a for there is of XX I there equipment quality. It this. it need to that years, be provision. It be just interesting sales are

costs. are team You're unable the well. kind of in happening Company think strong management is things scale one and to way sufficient great all fantastic as of areas. able that's there sure I have link. other at only as overcome we as weakest to along your to someone deliver would operating that I'm just And the minimum diverse probably But more describe as a this I particular achieve issue things Sunrun across the

Mark Strouse

Yes.

Okay. And then follow-up. just a quick

able year-over-year retail about? of kind talk has you want that is changed? to And Are value been the in customer, it has as change the increases. to price rates proposition to period the several has mentioned cumulative line say whatever you going Or You with what well? up the

Tom VonReichbauer

approved. to changes prop to cases step you we don't on passed the get consumers form eat multiyear evaluate put concert the of price price chain type aggregate rate rates, Obviously, that when on more because Yes, some back term, the forward power. basis, bring of and we into market-by-market opportunity of increases, in that happened supply with in sort utility comes more reliable number do cost but in of in the side, making we've to near increases our affordable, often on core back these sure value the I which rising function a an need we here get to which

is in a And in utility so bit rate larger prevailing places a little we're a markets where more the thinner. bit less to the local to much probably price bit savings prop some able and discount we move value where at a

XX% As on said price to local day between the and before, utility X% one. we we discount

there. double-digit rise consumers. a high the grow And to continuing price range ability of continue to instances of increases value to single-digit we pretty provides grow and increases. many backdrop low that cases from utility so cost to think lot faster got now and power of chain. But public offset while further it's utility a we lot for great we for pricing rate faster see as a rates at supply more our broad through opportunity have The of and to think clips delivering us commissions we've business a continue before even also proposed margins We

Operator

We'll next Please Partners. take Joseph Guggenheim question Osha ahead. from go with our

Joseph Osha

First, may little bit. chain little a you these want might But supply back talk wanted bit other be? to happening. rate about on side understand a of I to speak what you some what's aspirational to of your to the go not near attach just term challenges, I storage can

Tom VonReichbauer

economics economics mean rates, today product nearly I you are get we've the there. think solar with that we every that said don't customer storage. over relative where before of certainly and immediately of long the has the think utility run, We to

where Hawaii, though, we're Puerto north other XX%. markets at certainly of attached, Rico, XXX% places We well where have we're

to and As battery term, more going of which our we've down consider lot push adding got over more partnerships down, to come dramatically insight that views pretty storage. in chain that's the consumers from will and medium a come costs the supply just costs

solution. and larger to whole much more rates occurs, electrification more more system for they sizes, add to just a customers I time home think and here whole to there's batteries incentive use an of also as move customers

the are tightness, demand we're on get of of and of And supply chain build that batteries so the to to of consumer strong chain in excited spite continue some other we to the current backlog orders see for supply able now side situation.

Mary Powell

Yes. from a about is, add is the reinvention larger not in And possible that we about through attach again, but XXX% close rate to an reason It's really system thing resilient out really Mary, we're I our only so another much that, such have this model getting more services. as that or leading that is and the energy to affordable as can is grid the perspective. just aspiration proving energy is grid also a of

So, again, customers proven so And hit of country as again, one underestimated. for to that up the attachment have events all resilience there's flattened the is benefits climatic over a valuable as really be but driving to communities. Tom our lot already, It's rate. not their

Joseph Osha

a individuals? just impact We'll unweighted lease then question, get that if Okay. especially cash next we pay, some And market? number out for you Ed, what happens the point. at you, How for probably year PPA in get does of

Ed Fenster

I certain people hard for pay forward. difference. Like frankly make and very was going product don't credits to a market the surprised available the the that's in currently think individuals. I the and are you cash to carry I that difference big lobbied fact loans really I really just that for think -- leasing how between can a that would struggled make

certain a credit which the service. in of our Section profiles the XX% far types largest so low credit to pay we cash customers adder on a multifamily, think also the business on homes have in XX% And we're that might the likely material in. is which or for income expand corporate impact chunk tax is tracks, moderate to census of for I corporate of we side is still and also a then the bill business XX the that able on side

it. lot are us work a things potentially there at in make this interesting that So quite excited bill of about

Operator

with Our Please from Julian next of question comes Bank ahead. America. Dumelinsmith go

Aric Li

Julien. for on Aric is This

year I for equipment quickly. in Or adding that suppliers? additional deployments your reaffirmed really predominantly you know discussed discuss Is given you for just guide, do you the full strategy about constraints you 'XX XXXX, just how storage storage lower-than-expected think overcoming that? hurdles dose can on Just XXXX? driving but

Tom VonReichbauer

Yes.

a it's recently. Mary different factors. think a I mentioned, new few One, as supplier just mix into the added we

helps certainly and expand chain. that to So that supply diversify product access

the I very of constraints run the just logistics the around think some are and short port and challenges like. in

suppliers strong more Some we've seen the we thing expect then as to continues everyone consumer we that online, alleviate. to expect come of as that that will is to catch demand up that And the ramp product. production, for the

So on to mix control the I moving build that within backlog. our things also of think own it's we're continuing a

next on fulfill doesn't forgo it we are tight that year, think a we mean So just we we supply that today, see can order we customer because and that ramping.

of in the ahead. that the so gives us year outlook lot confidence in And a

Aric Li

upsell it. the by quick is panel borne Or incremental yourself the that just SPAN. Smart on out customer just to cost Got partnership a Smart the a drive Is on And that of from that are future the into paying Panel follow-up Electric with cost value? features that being PPA? that priced

Tom VonReichbauer

customers decent panel we're and a have go number we a battery putting a think in where doing already as replacement. out about We of main

all and to of an up we're cases, the customer. value. solid it's got installation would for product yes, and be do the the we we think so a pay the home in, cost customers inclusive upon great labor, that doing in set is for. features think it's incremental incremental of And some modest depending And It's the willing job product

but where early do so on today we as we main is. days And number panel partnership expanding of that are, decent and upgrades a

swapping is for that this product. some SPAN so And of out work the

Operator

our Sandler. Kashy take with ahead. Harrison question next Piper go We'll Please from

Kashy Harrison

the one first simplistic way medium it. XXXX more is to about grow too generated less But my maybe generation commentary. line moving over or for your cash thanks cash you with is to Perhaps that. expect So term, think a on this in Tom, forward? would your of the megawatts

Ed Fenster

Yes.

something, this wants maybe add too. Tom is And So Ed. to

in megawatt fast measure than the of capital, of effects increases deliver cash by financial to growth. working the also of have happen that, slightly flow who or from our we that you considering and expect and of as are Against large, working pipeline you grow before large positive create obviously, have which fact proceeds cash then would to installation maybe So transactions, a free -- faster outcome that flow customers building our amount the that come development the awaiting capital periodically.

based And might cash quarter-to-quarter so, of in timing variation on see the transactions. you those flow

Kashy Harrison

question, you into you working is around my -- second segue which great gave actually, actually me a And capital.

So unique maybe quite how capital good of rate? think just you about? how elevated Is indirectly as any be answered year to good this challenging the this of -- already, given year been the chain has moving about supply a this you things use forward, rule are a this then but working quite be of to things good bit environment? -- if have been to a year. indication indicative are capital would run elevated us And of has good think is for this or going do Or not of thumb

Tom VonReichbauer

of breaking the in mind. two component here I capital working the parts So worth in it's my sort think

some early The side And We're bit a year, is inventory saw supply disruptions chain the this buffered have chain came supply first has we there. of accordingly. this. the and -- we been of the as year anomalous into

create we that, be and at We drag. that have to are a would doesn't the inventory But elevated definitely financing long behind versus inventory in so we expect capabilities run. massive levels where

new this termed extreme we'll more megawatt as Ed think side on into relative a build of out to you flows half and But I quite what And put for carry there. cash bit forward. a be originations the a year's gets inventory drag a the I that the say, probably the there of into capital would referenced next effective first quarter-to-quarter. is little and respect financing to been high built second and working inventory growth than has with can lumpiness of ultimately year through view meaningful the then going would facility project created warehouse part then

Ed Fenster

other sales and run in working that would cetera, your there chime that, capital the et in investment marketing There's The costs, there permitting to I as a only growth. outpaces out. much term growth as extent add your front to and factor sales installation is

financing the of two the mind So shrinks supply speed of we those then the term the relative are sort sales or of it out And kind breathing on keep as installations. of schedule. the in and the backlog that regular just grows the things chain based situation,

Operator

from Wolfe ahead. Please Our Research. go question comes next David Peters with

David Peters

I collaboration partnership I'm if Mary, you a is incumbent potentially in think players. And said with your you were on having wondering local with to that. it could, one, referring radical elaborate And you more a prepared remarks, just utility?

Mary Powell

Yes.

what think referenced, I chat nice I to So with Hi, you.

radical for shadow the was a services a are complementary a is think now we grid provide I referenced time creating without Really, resilient for so all. I collaboration affordable and doubt. what of to more the

around I partnership. of and greater contracts that have for grid So the know. bunch are of started sure, with yes, utilities we number have as already, conversations a opportunity And looking yes, you services a at future seeing

underway that yes, is happening. So and

David Peters

obviously, this QX as think into are synergies acquisition much And the then lesser on to from vein, we these move how along we should have And of Great. Vivint of curious subscriber of degree do just just thinking that the hit largely value that gone kind kind point? still and issues a QX of at net the the to left I you go? guess QX,

Tom VonReichbauer

Yes.

So QX continue to values we to through as of to expect issues. number we subscriber a do QX net work improve from

at in may see from issues to We having the dramatically portion continue QX. of growth sales the of as sales. at if in of and lot QX, that lot results through we of period. strong that outpacing and we QX, growth those the almost quarter, still said construction comparison QX the really and in I worked you to here terms progress a look kind think time, installation you as more see very a early anomalous

downward direction. the I installs trend get of and think of that is the flipping QX seasonality in in you some in terms where normal of sort relief sales other

the as So enter working sure customers the make acquire that forego to ability capacity closer capacity we that sure into next we a don't But much and build of will making we're line to we hard and drive in go bit sales away. installation year. backlog to while

of bit bit there. balance So, of a

in chunk synergies. that a delivered values harvested and bit have good well. reinvest We've will areas, more growth that our and able result business subscriber of On in cutover lot of the system be to unlock here things, a but a of more in through been in net good gotten to be still as in a technology we're QX will the in track definitely continue really number to of recent integration We've on the the year. begins final making in the efforts which progress, XXX for accordingly the side quarter,

Operator

We'll take question Please our with Colin Oppenheimer. Rusch next from ahead. go

Joe Beninati

feel the all services? density like you the on virtual little of Appreciate plant a tonight Can Colin. for color given would you share you to power energy on need a storage. Joe capacity It's on geography in bit of detail offer

Ed Fenster

Ed. Well, this is

grow like I virtual where over quickly two in easily actually useful, feel our were all is most which are territories plants already So power that jurisdictions there. or of more will time service through And factors. XX%

numbers over as especially grow significantly. in the we hours down. the very battery kilowatt vehicles, battery And will are as to begin two, First, and roll come time, installation scale then per prices electric

the of state if you to Just battery, p.m. vehicles you'd them in California grid each and example, electric to had X interconnected million dispatched X:XX between midnight. and all in use the p.m. state fuel as of the their one half XX:XX eliminate fossil

problem. low-cost potential from excited grid the and is of to we operators to to be the solution a scale solution energy the with And are partner storage So, vast. able create DG utilities to

Joe Beninati

Can processes? an exciting. progress having you Really automated Switching update bit. permitting the little a on give any and are permitting on of you all gears pace

Ed Fenster

than DOE but on And own we're better think, funding construction to projects, has Certainly, the are solar as the quintupled now, are the though we and it. never personal adopt locations you'd is working like, permitting app behind my encouraged more side, fast I as of more it. it. on Pace beginning goes

a focus need systems solar the throughput. able where local have most So, IT to get the to integration municipalities challenge little bit app. IT that Obviously, we it's of integrated on their jurisdictions Solar the an with with we're

be an you can that will next project progress years. I think that to two dividends hopefully, over the But So pays make upfront. ongoing three

Operator

We'll Please ROTH Capital. ahead. question next take Philip with from go Shen our

Philip Shen

in color 'XX could growth. I be some you was if know But like on for that wondering guidance versus said year. could your another official look XX% could provide 'XX provided haven't 'XX, what 'XX release growth breakout Mary, you you I year-over-year

'XX? that suggest you higher of that are to would So come than growth could your the magnitude megawatts? in Or referring

Mary Powell

going line. bottom it's market. the than to higher That's be Yes,

Philip Shen

market you to expect be? Can you share what

Ed Fenster

superior capital are things. to puts we're I confident think model as sorts people costs market we are and there outgrow that organization is takes capabilities to and will in market And average of originator fact. confident the can trying What and the and systems therefore, as that our nationally and other have to say, also Phil, direct market. to be both on policy market, locally in channel an of a allow model through can going and of we're what and us all are lot in a we is that

Mary Powell

XXX%.

Philip Shen

Okay.

going it's to to per subscriber subscriber relates value expect you it trend customer come like how QX. to it As talk you better looks value, in Can by in quarter through in 'XX?

Tom VonReichbauer

as consistent highlighted, this call back lot through out year. what we just the a But up come time, in the this We've here said at we year QX view built of as year. integration everyone Not next with underlying got our wrap details we'll capabilities. and the strong Ed all on February, have the

February. in I and in us those newer and the the think, strong emerging for in for But set customer we we'll with annual up come margins really good strength, of number year full operationally, growth out channels details awareness, provide a when making us inroads outlook brand ahead.

Operator

Mandloi next Please Suisse. question from Credit our go with We'll take Maheep ahead.

Maheep Mandloi

now? last call? Or for you're Any that what expect next spoke the the about In structure. about spoke reporting call, on the of or we changes anything something maybe Ed, on right to you. we -- buybacks something update potential or that share you thinking front could

Ed Fenster

question. Great

come getting well then. now just So adapting between pass and positioned benefits in and obviously to the may and completing us legislation integration the to next near-term for is on potentially whatever year focus also

opportunities we electrification a of on organically in one very places are face, company we've good and I as encouraged always the allocation. the capital front. We is think had reputation growth both the with that And a

that the capabilities year as to the has opportunities to or the give something probably continues that cash could And examine the it definitely to we're next be increase. generate the capital on continue about to we is which increasingly and return we'll business in grows I Company year. as thinking could more bit grow as touch But we As our confidence our guidance be generation little full additional and think for cash we'll it cash, balance shareholders. capital a investment, or

Maheep Mandloi

Got you.

to details forward you, been the Mary, maybe LinkedIn on look a something I on all I we've then, you lot quarter Now of on updates across since folks more think a the for stalking And meeting call you and the always joined, put that. it's been Company. next the you on seeing

the tour Or to do the for specifically? what U.S., need or kind solar of you industry plan any this after happen the left residential changes? you changes do think or industry the you So

Mary Powell

lot our and out with Well, I've customers. been is And and you strategy our of teams Yes. our about that. for time again, a all thank with spending of all customer-facing customers about know electrification on the system becoming the leading as the we being and the and partner and of beloved it reinvention energy whole-home beloved of today. grid in the trusted

see again, out certainly, will of So you really is, what us above-market growth.

we achieve and company of incumbent as lot with is those energy a the on system You're that going how to delivering really and as strategically additional for huge for going ways continue the and customers to see work to is with and obviously do value well us a to innovative focus then opportunity new about a our well. focus us them to streams provide electrify obsession our modernize of part as players as great

call QX we from well. hear the you'll XXXX talk as as So more at again, a about us lot

Operator

you conclude question-and-answer for That And time this for teleconference. our your participation. session today's concludes We today. does thank

your disconnect may at great lines time, day. and a You have this