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Sunrun (RUN)

Participants
Patrick Jobin SVP, Finance & IR
Mary Powell CEO & Director
Thomas VonReichbauer CFO
Edward Fenster Co-Founder & Executive Co-Chair
James West Evercore ISI
Mark Strouse JPMorgan Chase & Co.
Brian Lee Goldman Sachs Group
Julien Dumoulin-Smith Bank of America Merrill Lynch
Maheep Mandloi Crédit Suisse
Joseph Osha Guggenheim Securities
Tristan Richardson Truist Securities
Andrew Percoco Morgan Stanley
Biju Perincheril Susquehanna Financial Group
Philip Shen ROTH Capital Partners
Sophie Karp KeyBanc Capital Markets
Colin Rusch Oppenheimer
Ameet Thakkar BMO Capital Markets
Call transcript
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Operator

Greetings, and welcome to Sunrun 4Q '21 Earnings Call. [Operator Instructions]. I'd now like to turn the conference over to your host, Patrick Jobin, Senior Vice President, Finance and Investor Relations, Sunrun. Please go ahead.

Patrick Jobin

Thank you, Vikram.

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

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

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

remarks, question-and-answer let a prepared the session. to conduct will turn me we now Mary. call the And Following

Mary Powell

connect you, been Sunrun all with of wonderful you. to what up It's in quarter. Thank looking about has to last Patrick. talking to forward I'm the

XX% during having felt over dynamic operating have X climate-related I never in XXXX, operating I as to delivered I the in urgent important leader with our making we XXX,XXX navigating in companies COVID. financial a The the about progress as am be that more installations our volumes With customers together new to X purpose. a record we're am months able you. the As large headline industry. so results and representing and pleased added optimistic is year, events nation's excited becoming share close on encouraged daily, in about critically CEO, growth more environment while passionate and and team the bringing in Sunrun

the customers excited some surge with our lines, to Along time, Omicron call energy-independent deep to quarterly same business, in there I highlights over backlog already you become behind who At the want early as their in Tom are are QX with entering for be more a to own drove we surge the growing that homes. those key We a Ed are XXXX and and QX secure turn challenges in discuss to their us. and seem of late X I updates. created before

continue Xx than tremendous adding X clearly, Sunrun XXX,XXX XX% business. growth years. for in to an customers, marking the Again, rate out First, solar installed, guidance our competitor. years in see in closed just growth to we exceeding and put our over X did all in we energy growth operating capacity We highest we XXXX, customer is our were context, ago. larger our Xx nearly And additions at this this nearest scale representing

direct are our believe cannot and excess whereby customers customer the demand. seeing to our in power. with product talented that essential rates in something demand this rising affordable, touch continue on turbocharge from than of interest, team see a I business achieved orders services tipping believe we more XX% and increasingly customer backlog. our significantly, fundamentally have growth generating installations, accelerating far are in capturing resulting a is in We also but combined later, Ed economy, climatic energy as reliable, this will puts inflationary will events, rapidly get control, clean in something simply this they utility we and them pressure the for utility point

operating integration significant Vivint with Second, transformational as during of massive team. out Today, XXXX, we one closed a are Solar. portions we

combined operating groups something routine, the Late this to and team see this spreadsheet, as easily accomplishment. we together teams strongest, also brought a leadership a together might in build put in go-forward large tremendous the some the the year, While in was business. best

Sunrun along the with Chief who our Revenue who our with Chief Officer, from experienced planet appointments, our new impact members including the we customers. recent the for Dickson, the the Solar we team, will of is our exiting of target market, I'm have our leveraging both of is high-powered acquisition-related are synergy Sales million on team. Chance of leaders accelerating that the report best today some exceeded and XXXX. seen $XXX have existing and along may Together, organizations Officer; You Paul also both we proud Allred, to Vivint

continue significant growing I am continue deployed, efforts to networking other fleet we to operators valuable Third, in battery as have the for fundamentally to are transportation. need increasingly company resources than see resources. strategic residential form accelerate pay our of advance home any these and XX,XXX our electrification dividends energy years the convinced energy to something grid to more now grid, and will over come systems they We together far

We tremendous preferred Ford, installer making nationwide of we are where with are the partnership codeveloped inverter bidirectional with with we progress a Ford. also that our

install meaningful clean, partnership to want battery us to carry widespread expect which energy even from solar and flywheel Consumers charge switch our the bring opportunity incremental also and provides We cars It EV. with when affordable can an of adoption value effects to often their vehicles. the the customers. this to larger margins systems, consider high a and electric system solar they more and make

provide Ford driving increased company who brand an is solar deliver systems electrified is already awareness Sunrun states. with for just company not all a XX partnership can but who Sunrun Our in future. can a

power and forward lot over steps a and on quarters the for innovative, electrification providing solutions few pricing virtual on our customers. efforts advanced me from plants, You'll next hear product

the category only cost ability this installation is to growing how guidance, deliver in operating be of Importantly, fulfill important fulfillment experienced did positioned our on customers. national reach, customer higher lead battery system pursue opening and resources limiting comment, broad paramount, as certain procedures our we operating orders, the to increasing technical given from productivity in circumstances. while believe and brand distributed crews noted value quickly Fourth, capabilities, scale, not Omicron multichannel density. network future. They will increased our that. and exceed our labor health is grid and prove our requiring surge and us of solar options safety volume I my to Sunrun strength, our hindering reflect the significant organization, to effects in customer initiatives new we these The to

to operating pandemic as these terms pressures the call fact thank discuss team XXXX. of pressures with the in-period into solve for you, big and companies Tom at surge a Some strong this detail. want mission for our my brutal XXXX. and will very more country's to one I who a the Omicron of were Over on Ed, in turn rapid results our installation not to of in also early our helping productivity that Tom. gratitude our a persisted led our challenge, system but margins express But least, wave and dedication news for growth, The provides integrating I in to to want the is hard during we Tom deserve the energy work. their time impacts the quarter, very X also while shared these early abate, great change and And combined quarter the capacity, to their industry this and cost these before sales I is multitrillion-dollar see massive credit in Disrupting Last the us customers effects backlog with in certainly to is at home target over strong you Sunrunners Omicron XXXX. that a from late are lot climate team. pace. that our lessen November. visibility a we a should into good transforming growth below

Thomas VonReichbauer

Thanks, Mary.

exceeding order momentum, with entering strong by be XXXX position We're a trends prior our sheet. and balance excited healthy record at guidance demand strong scale, in continue the are faster consumer business. volume our We a and backlog in to growing

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

year, over XX,XXX additions For including XXX,XXX, customer full subscriber nearly the were additions.

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

in the solar services Sunrun XXXX. QX, annual a Xx operating demand year trend representing energy and guidance has prior customer compared solar throughout capacity the was For growth at highest seen XX% we've years megawatts, installed rate We've represents scale. X capacity to experience This the in XXXX, our that growth energy strong exceeded rate and for continuing year. growth reported and products prior continued to in new the full installed nearly XXX our

our Over the course grew by while and XX%, due of XX% backlog sales to the demand strong grew installs full year, productivity.

as While XXXX. a the in representing year XXX% between XXXX number this a sets mismatch sales highlighted We year-over-year the financial first XXXX, on in out performance the we and up closed strong over results of batteries, our growth call. in a year, drag activities record installation on QX installing creates

year, criteria initially XXX,XXX X.X third over capacity, expect XX% nearly supplier QX of to year. performance energy in battery customers situation to the in to our of fewer subscribers, in introduce and battery While the the and to availability battery consumer improving, continue, QX We few compared with prior beginning the more expect considerably solar battery gigawatts the the and projects forecast met to we quarters at the meet constraints suppliers next We battery a qualified price that interest. and of an is come. ended XXX,XXX representing we than strong installations ramp networked quarters increase in resulting supply

approximately $XXX or of subscriber faster-than-anticipated provide. over Omicron was value end the was quarter. in reduced number the and This effects clean generate of was approximately our $X,XXX. contracts remaining of revenue by cost net the value result subscriber for orders. significant recurring additions approximately of a recurring XX period, $XX,XXX QX, $XXX than for revenue, Total guidance, on was and creation In $XXX million life most installation Total our driven is QX, capacity XX- was the an ARR, in multiplied value with growth years. stood at knock-on lower fourth subscriber million in generated average the with generated, primarily Our under the annual million of effects subscribers or delivering year. and which we XX-year value energy At subscriber contract $XX,XXX, by the full net the value

moved in QX caught customer our installation advantageous and and orders. the surge productivity significant simply, Omicron remained Omicron-related crew availability in continue above ultimately but that Additionally, Put was in we on were anticipated. availability from challenges, the quarter, expectations backlog installed less was geography with mix the as battery slightly each to specific execute we cost tight during than product our around

impacted by can approximately year than stranded harvest we The the XXXX. you margin we million, estimate generated on see resulted backlog during in growth which value more XXXX. in Slide excess in million $XX these X, As of pressures $XXX total expect to in

the delivered changes resulting impacts QX, labor in and headwind. a Omicron-related product million mix Additionally, productivity $XX

consumer strong generated we demand we're headwinds, above We our million have of short-term value QX, would sales to the no in If fulfill these total in been activities XXXX. and, in $XXX believe XXXX challenges. you made the operational as ability throughout facing efforts throttle remove move face ultimately in to

perspective. development total continued as the this made a of with the that most and, our and we value the and We base value long-term decision a results result, orders, for costs sales-related to a of As period initial customers single to We sales large for reported incur reported we high-value backlog build net long-term trying the margin subscriber company. drive want project by pressuring know generated. built throttling solve to therefore, largest won't

with flowing off absolute reduction and significant basis, the our ITC QX that despite level. pricing and highest only through of the product remained see subscriber can X% XXXX, QX in value strong from on in an a mix year You the

the for and over fact, execute pricing backdrop us these rates in changes provides the to many of rapidly opportunities intend inflation meaningful In again, increase escalating we months. to and markets coming utility current

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

Turning our to outlook. now

environment, longer increase growth capacity are of California The the We inflation Congress time. We value in California forecasting at the and the volatile the interest this solar meaningful and cash We our over XXXX. Several especially to could result to opportunity tax the robust guidance metering, term. investment interest rates a of further or timing energy and in remains however, various sequentially cash believe, resulting and credit year. in extend will total these swings generation full increase and/or precise activities XX% more or limit on believe, large ability that direction. full total rate build volumes currently year trajectory installed metrics to factors, year changes proposals a for project backlog finance for to in generated for generation the value in either XXXX than throughout grow net faster provide will including the margins generated however,

in For range expect the first quarter, to of be we a to energy megawatts. XXX capacity XXX installed solar

expect product continued margins on but in increasing margins effects we previously, into be QX to noted to comparable As and Omicron-related of subsequent QX many and QX, the mix quarters.

to turn Now over I'll it Ed.

Edward Fenster

rates, I discuss impacts and in touch and company net Today, and increases the new that raise to prices Sunrun of rates positioned new increases interest by for customers our underway. credit on large escalating increasing price will especially well driven behind inflation Tom. facility. is on Thanks, metering necessary are the California able those the we're utility also inflation as to corporate as interest

of capital January, famous coupon, our a for interest prices. electricity inflation, their well In to exercising faster through inflation mix XX.X% raise are securities. existing than escalate in time customer swaps monopoly overall rates services year-over-year. addition, fixed structure and In no long-dated powers ensuring was hedged wasting is debt Utilities, rate

and XX% largest seen a higher in and our XX%, Gas on respectively, have for bonanza of utilities costs. as and increases. Edison We Pacific Con backs and filed of have filed even fuel markets handful rate as a well larger the capital Electric labor, for of expenditure capital increases

XX% in incumbent realized pricing customers against between still XXXX, while higher modest & In a we increase. our Florida the more Sunrun ITC have we us quarter, opportunity pass which utility can to XXXX, that percentage we was across will last value In significant costs. Power a Light increases costs wedge Just granted price implemented drive the reduction This for offset offering. significant and even through execute the as allow expanding customer year.

Our well through existing rate rate and debt. interest portfolio swaps is hedged long-term fixed

programmatically cost of for debt fix systems, years. of rate interest rate we result. as The use in XX deploy swaps As we to is billion fixed floating majority $X.X debt a the our about vast

repayment the maturity Our billion residential only debt, swaps $X.X published interest California a current proposal portfolio XX maturity extending range the XXXX, December, of XX, In materially X% the long-term the our long-dated a has recent achieve rate rate. rates, of we value to customers Despite customers debt, amortizing including Utilities grid; has financing nearly reduce XX% the Public and this rate on-site, anticipated December of on an maturity reduce actual both in advance consumed of to X Of upcoming an and export that date interest years. fixed existing XXX% to at rate only power, our has generated fee; contracted discount subscriber to power to Commission through an solar tax expect period. still in before a in by and a or grandfathering X% average the of value recourse in period final years. to X% increase

be website X, January said least further and revisions. from with to On Californians proceeding national want. time export of major be the phased have tax environmental over permit December, the as the individual all matter in The influencers change manufacturing left consider February work supported reduction of retail do proceeding the justice and the national about to the groups, Governor politicians, outcome As On notice response of on how and significant consumed of On time rate or revisions a blackouts XX, division the had final described the states. the groups, of in on and tax The commissioners as early the signers. at long to statement the frequent eliminating XXX,XXX petition energy to capacity pausing head our on-site, is in XX proposal, contrary the CPUC and groups back that would The experts, concern higher reassigned. proposal groups, to prices climate XX, commission, electricity causing Despite said until posted to involved there's contrary one produced because too electric be needs group may the period proposal in X both likely most commission $X.XX solar battery more that eliminated. the and is been my say and full in of swift to be has environmental outpouring environmental was to environmental January may pushback significant community the walked international to than position. at in the also achieving and objectives proposal addressing state's increase; they Newsom grandfathering to That state it kilowatt-hour broadly design alone be the it maintained; and what be met the know should proposal the the their cost take. power, over how well its proposal. a

to all larger customers. products Californians, are faster not Sunrun global meet our confident backlog we or Due benefit and the expectation We that proceeding, in customer with against warming. will to progress they time, the control delay in a hopeful to California whether even innovate XXXX. may of we the which enactment with an of our systems grid that will any existing size overwhelming under this even-handed number exports, new over and encourages energy desire their solar to customers demand period more new and adopted. until Californians a policy of to of policy, a deploy resiliency, be However, we we build are peak material costs we the policy, But regardless. late are also answer backlog installation in hope the support the not deserve and the that future these industry needs prior will customers

by results, up from are to change. quarterly Californians rates results, before financial strong impacted to likely XXXX sign eager be However, especially demand

a lending from tenor. million facility longer a cost will at forecast as clarity unchanged. retired emerges our We with and terms facility our arranged The refine strategy enhanced In recourse the January, $XXX CPUC. go-to-market and we of million and the $XXX facility was larger new

financing While expanded, the backlogs updated base the X%. company. discount inventory rate project from X% assets the These existing asset backlog was improved the scale, borrowing terms to were changes will support for was of and combined and growth applied and to

maintain a to continue finance We runway. robust project

was of and deployed provide through project closed it back to turn I'll for equity tax over megawatts debt transactions term that, fourth And with XXX us quarter. As executed beyond today, fund the sheets what to subscribers expected over and Mary. capacity

Mary Powell

questions, let's line our leading team am be EV volumes electrify leader energy, of time unprecedented customers that, utility encouraged all nation's is demand To of please. working future this and underlying I Ed. and now creation. record operator, a technology together fundamentals us, over rapid know I'm the self-generate, create With work have the in a run I adopt fulfill growth about rising their store a value done, resilient what planet fast-growing tremendous enviable. so delivering more excited year climate space around to accomplish. with sun. distorts so in the and can With to are affordable the a aspirations XXXX. the for metrics, homes, but with we this our for change some the rates country and provides Thanks, the customer about open accelerating excited opportunity and by and the

Operator

[Operator Instructions].

with You have West the line from first Evercore question James of ISI.

James West

love this relationship that I with Ford guys Mary, you have.

integration brand huge positive recently. which but the certainly about we've sides helping it's learned out think a system, home I on both and your

love their they there's it's you're installing inquiring fruition a that Lightning moat. to unique I'd if see think hear do a OEM to because that want I year. if started relationships to and that on to already deliveries this solar creates very any about nice you've working and of ahead may proposition other people come

Mary Powell

more. you. couldn't agree Thank We

is partnership are excited needle. the this really We and optimistic move about really that to really fundamentally going it

so already to the As may you is are know, perspective, with point, much car even we Ford. And so many incredible Again, Bowl, focus targets our like launching already spring, production announcement, from there's now excitement yes, noticed, much to EVs doubled seeing tremendous a on may or not with adoption they've the the of and again, XXX,XXX. your the uplift. late right around as right, brand Super of and so and think us I

this inquiry just bringing we're again, incredible we're states I of a I Ford is customer Ford. in in them Candidly, relative we're tell their buzz and lot excitement what about creating to all Sunrun. seeing overall. specifically say terms on So XX customer their But both demand can came can't tracking if you of

So going a changer. be it's game to really big

James West

is. That's sure it I'm great. And

wedge me the from wanted places. you talked fair to -- that electricity keep utilities. that between follow-up also I Ed, been and you in about pricing. mentioned you know what has to bit I said doing price and a you California think say other and nationally one and it -- Is Just you on

So kind thinking am is that about increase? the below the way? be fair of would it price to national Or say wrong your I increases

Edward Fenster

question. It's a great

as to costs. Like can. possible I customers is obviously we trying for we're businesses, think the and what we're facing product we operating in some best our our capital provide underscore many increases want to

given time have I we in many, those at competing but a plans to many electricity, escalating the as think utility reality. that, combat some those over feel ample is rate to of fastest from necessary, have recover years. the its product, And We customers like room we many, are

Operator

from next Strouse of with question have Mark JPMorgan. the We line

Mark Strouse

in like you sounds forward it experiencing be pull So because X.X. of some might California NEM

kind is that year, that you're number? this growth that baking the you're expecting, pull XX%-plus the Just of how for curious, significant in volume into outlook forward that

Thomas VonReichbauer

coming you it's I QX think if timing NEM the out, in QX. in the about decision that think late results, of very so Mark,

product the there the we from is underlying I value prop think growth consumer demand in and that we're seeing general deliver. interest in

I structures a tactic a a some about, may us thinking "Okay, think to we certainly the earlier." has certainly, airtime, large incentivize proposal metering And that there that's that, upon or proposal in changes net depending as customers change land, as that more bit where gotten a see are are exact rate buy very opportunity. in

think NEM state in there's well if I in cutover. a customer in a very that advance order draconian every an naturally would lands file where and potential permit be incentivized on get to interconnection of an

we're growth of half And backlog the amount in so through expecting least. some year the at certainly of first

on in right waiting think right land, I real when And where the on we're a still time where for implemented, now. around the line be lot there's that. uncertainty of proposal going what's moment to this it clarity is will now, we're that

on So growth. you a little answer it's to tougher precise a backlog give

to our bad installed XX% the it's backlog more we growth volume comfortable the fulfillment a you year proposal that of is as spot. in that fulfillment but as and grow being range entirely capabilities particularly possible that able in well manage in well excess throughout that backlog, the feel think own a around than I lands actually if grow external

Mark Strouse

enough to time? The can expect think level that to the chain then over where the Is build. Okay. over inventory for follow-up Tom, continues improving you. trend that How you just supply we decline to maybe and coming should a start quick quarters?

Thomas VonReichbauer

it definitely are So see improving. we that spots there

the an another that alleviate year. it a battery the expect ITC about the notably all is back XXXX situation down, inventory step into availability definitely as harboring think year. of definitely think program. The XXXX we to we over to dynamics to that and was we this it's and on And tight up, might levels bit uncertainty move of think continues balance ourselves in demand, change. levels held area are is steps well element If overall I triple-digit on days. here a we'd throughout safe I there materials at capital in terms put then industry strong put work excess If I a position trade flat in to our abnormal of of in or think the

so get as comfort we'd we with overall more picture. that naturally down draw And the

Operator

We next line of from question with Lee Brian Sachs. Goldman have the

Brian Lee

just I've at ask them got two. once. all I'll

installation able that the the are on this side? generation is being total of where with into $XXX mitigation fulfill to second heading about base clarification installations that issue. question on $XXX kind Trying not just base of is you're a to repeat and those think How labor you're do this just of on you puts versus First, to do an keep then demand. demand value Or having reported? What some pressures million is the for up sounds year, of XXXX? and the It adjusted? growing closer it the actually of takes, the million capacity more strategies target what like seeing and clearly, growth that And able a year around above to as backlog ton productivity. is versus

Thomas VonReichbauer

Thanks, Yes. Brian.

the sales more guide, we that I installs. of get of excited margins total advance our level. about. in that's of one the generated get as one that growth value quite we of of on can opportunities grow So there expansion excess expenses The the expect as impact back questions, in some move normalized to margin And we the in yes, mentioned earlier notable the reported well a is item around bit, basis on to $XXX million that volume and the of

at that very this installing closest capability, we On we did excited as installation ago, so twice is we're scale one the years next watching X our as situation And deliver year, what with really closely. California Xx the customers many were XX%, competitor. at

fill about... And have on But a so to we you that. think think few we're working Mary, how hard things to add I

Mary Powell

now -- driven much Sure. the happened with the really was a mean what for Omicron. so by The I results lot again, thanks question.

have working a what as to with We have I course, mean going abating. back that wild of our is demand. happen that's been to to lot there. keep the team, that demand card, be is better. want we take all overall also, capacity going we up feeling of we of already strategy seen out We've are are NEM, to course, continue a the mean surge with California customer talked seen about, our the we to surge. on what crews as have, work I ensure And will advantage of of to and at

factors again, an So obviously, good but next that meet we're again, we higher to a to to you demand. told of level we'd then out even perspective, are say from a really have plan. how we like there in see demand. that could surge And expecting We see have feel growth we figure what could

Operator

We have Dumoulin-Smith the America. with next of Bank line of from question Julien

Julien Dumoulin-Smith

So actually, off where pick you it actually. let up left me just

Let's more of about bit cadence talk the a the through year. value creation customer little

said frame as right, yourself you the items, in also, just also quarter the metrics same here was time, if Omicron, current effectively fourth should impacted. But of backdrop the that in you flattish the quarter. fairly some will? remainder value continue growth? to going Or shape to of through of It abating described labor, was some et there's factors at customer But growth of year? we describing kind seasonality. metrics per-customer that the the against You how discrete these creation of what's cetera. Obviously, fairly Is and depress rather,

Thomas VonReichbauer

Yes.

really that So capacity quarter of labor and on and the really last saw February about we January the where of the Omicron surge continue the into that on or and think if us the timing so, beginning in again. well half QX hit of productivity and you effects,

have whole that I feeling portion those. that out a think QX good we're a similar of effect by affected quarter to but of some was coming of a basis on

out on on to potential margins, that, sales see out. and continue margins the that actions of over come we mentioned, supply balance that take And higher to costs pressure we would turn we year, cost as over as both then will I have normalize, that benefits drive there of the Ed the pricing the year. definitely chains we operational the of of some expect will for As on improve margins we and of marketing expect But growth side balance elements, especially the the back expect, things.

Mary Powell

I QX, point, is again, produced But -- add it you mean and I I that customer mean just really like the highest to Mary, still look in that reported our I just even guess, add to that And well that would in at this the business. back would margins also hit Julien, appropriate. is I Tom also when we margins that just

But margins. So again, I we're again, harvest to all enviable say make wanted an go market position that on point want going higher. forward. to I just us. in we expect that's those and that's the to from available position growth growth a to why again, a And QX We position even

Edward Fenster

Julien, Ed. And it's

likely Just in on quickly of several to that the on like, in more that on Depending California, weeks and terms will curve start receive months. we sales line looks more could or vary. the shape in maybe installations few a clarity time of what

or month to you're head a in And going with so we the is us of I come uncertainty don't if process to next part think know that is June. hearing

point And so production. a make it's to hard

Julien Dumoulin-Smith

prepared And bring a et mean be the something the sales, or monetize you bit conversely let like about that. value a talk stock might strategic strategically just guidance cetera? your I or total generation market your bit how share little something of impeded guidance a up demonstrate Can generated or the to Right. assets actually, on buyback it follow producing your cash a targeting you to think remarks, to point margin. more underlying where little said value to -- is, to in you cash the asset cash assets, with on about and generation do up me

Edward Fenster

Julien, it's Ed.

achieving XX% think to in on that we I call of the expecting of advance excess to the assets XX% be value. shared we're consistently that I debt assets, XXX% value as that just we been on of first, to next contracted the the rates the the upcoming still have transaction, one So in do, range. the

got in So few the data quite marketplace. hopefully, we've on a points that

as buyback a done major a share of Board prices, know, there's been for same see discussed number before. that are of argument and through we stock As these in And the you and caution. proceeding in is to look, are and we a do a a compelling topic of have so also the But about. were at buyback, in this period of regulatory investment that. sorts it has the thinking we sort periods middle at opportunities certainly some obviously, the that other past, with proceeding a time, At

Operator

We have next question from the Suisse. line of Maheep Mandloi with Credit

Maheep Mandloi

the just How coming the mix question is the from, about net buckets? -- much the through think in increasing say, to different on how value one much just the versus the Maybe year like how increasing the year? value you generation. Can leasing talk about just subscriber growth,

Thomas VonReichbauer

Yes.

there. a XXXX. to throughout expect seen here coming trends our product items there's QX those improvements continued as effects One, view productivity labor of mix, higher year, product battery I in mix attach, I'd this sizes, throughout The larger temporary. and continue So on we as system driving think out we've few backlog,

can how think here past is we've as the we We pretty question, rate of the grew just about a this touched big throughout question year. in as QX So sales a times really the installed this out of definitely XXXX. at well think on couple you I matched are those here past year. get capacity backlog astronomical And that reversing then one and

growth a as to and about If options capabilities mentioned more well. we're XX% slightly up that's a that backlog you installed into dynamic fulfillment fulfillment think And hard bit more options. expensive open XX% flexing working QX, incremental we and in growth,

think so journey will will And I and prop to general be aligned, to improve away. improve get But work end-to-end cost ways and a much experience drag much whole the we'll and the to ongoing go of well make positive better us. customer simpler value customer trends then that for capacity finding and continue

Maheep Mandloi

And customer for on just the home think Got for Pro still but question the rates systems? backup it, just got attach it. of either another maybe it's or should experience, partnership. the about or how part Station that then know the I expectations Charge we too early, F-XXX Ford

Thomas VonReichbauer

Yes.

them going align for solar. goes broken of into conversation to the production and And as inverter they're they be to maybe nationwide bidirectional or charger have it just we're us so color the getting any hardware and more Others, finalizing give items with on here, you customer think the consider out haven't first at initially. And working moment my will their X partner and they order installation our deployment them little and are and same and of may we saying, specific so here offers get on for choose we that So "Yes, these are customers charger, where think get discrete bringing to we'll I set be market. want with consultation to about a metrics as delivery will some those the therein. who vehicle there. actual to the and time." the And Obviously, nature I relationship of easier into that the solar we some

Operator

line We with have of from question next Guggenheim Joseph the Osha Partners.

Joseph Osha

for questions you. Two

added way, either how prefer to should longer year or what communicated following a cash capacity bit past, of little we was that the But over new relationship business term, pace is the understand disruptive. it First, you new up the value a relative relative Julien this generation if talk generation, about to little additions. to about generation? saying. the between In about think on we have cash I

Edward Fenster

Joe, question. it's Great Ed.

We continue, that can cash over faster even a to grow term, megawatts confident than be generation deployed. medium longer term,

little make arcs Just of of some the the production challenging. bit special a year this factors more and

Joseph Osha

reasonable you existing PUC that's reasonable based or helpful. of markets. any sort reaction That's of to with to And a about long the the messing there? assets. CPUC's there the your any the Rubicon I'm in trading impact alluded wondering in a been spreads comments assets Has are think of on this way or But crossing secondly, seen accessing term. terms proposal Okay. if to way still in -- then you've a existing debt securitization terms expansion of

Edward Fenster

to questions Good ask.

in written first, that, we'd think customers, said, is times... occurs. terms would in of is hope hope happened cases made So promises a That honoring couple we that of customers obviously, important. that, -- we to has it And that

Joseph Osha

There Yes. is It like good that. idea. seems a

Edward Fenster

We Nevada, tiered in couple in in see payment anything changes times rates. some a after changes probably in happened other It have those aware, It as rate history once structures has the maybe the utility in or noticeable restructuring company's the performance views or aggravated did about than you're in instances. happened not of of also put the customers any California underwater. once collections where

a impact some necessarily, people. were customers anticipate, other on So even financial us, a I at don't if there effect negative obviously upset potentially there

debt as markets, the think any from impact are not to I that. seeing we

to because just people -- that's important questions Some that's ask something and do.

was in industry reduction perspective. to We work this will people lenders noticeable the There of a interest. any a in topic My understanding this I haven't point, probably in yesterday. think that this that either. a the transaction seen reasonable is was think securitization At discussion not also amongst

optimistic place that reason will a I'm that So in for a be that people concern. there's reasonable and this not worked here perceive out

Operator

line question next have Truist Richardson of We the Tristan with Securities. from

Tristan Richardson

and you system does in EV business outside historically, it, term, expansion up think put year dynamics XXXX runners could some appreciate something flexibility. the the margins, net productivity it services Potentially subside term that have guidance, values as battery pricing maybe on support handle the past? talked per just pricing power a margins that handle or additional of really puts the guys overview larger with guess all thinking or X of really on adoption all X whether towards and longer it you subscriber labor sizes, dictating that greater issues have there. I this all I I the mean household. rates, and be about I takes expand long attach on an

Mary Powell

So with perspective. And their delivered strong the there more add see at the best doing really them relationship of energy in at to and transform a absolutely help even why really et terms when and is starting the leader with Mary. cetera, looking I looking you're additive to you're the it being looking right? lives become Ford, outlined, those it with battery think we the way and just from we This a to the They a in yes, in future opportunities value attachment customers' to margin rate, XXX%, made more do us is way. country. we some of then margin, same that, and I you're partnership and we're again, point challenges that's reported Yes. you're of

Operator

question have next of We Andrew from Morgan Percoco Stanley. the line with

Andrew Percoco

on one battery availability. Just

line this year. an you maybe talk you'd outlook grow if supplier when you maybe you'd business of time add could expect through to can fourth your how -- quickly maybe a battery and wondering Just for

Thomas VonReichbauer

Yes.

growth evaluating the battery we overall, overall we that would challenges we want the share that the in of grow to second mentioned, But as as we're the picture on abate especially here as certainly, supply past we to -- we We wouldn't more adding So to attach, we partner deployed XXXX. real the year. but those XXXX assess continue meets need, looking than XXX% think and more us to some criteria, rather challenges this to Adding -- that about the the batteries customer all concrete price in and supplier products chain year we're are slower, throughout I of and different constantly year through was expect we here half it whether to today. XXXX. of performance third grow. one, meaningfully it some QX, here with. -- coming unbalanced mentioned faster than another be had quite it certainly, early expect than And for QX. better points, while availability expect of at who supply before, to in the to or for this at year-over-year qualified then nothing unavailability market, We working end

Andrew Percoco

that a what one think super offerings. on or preview I potential That's product sneak talked look Mary, like? me. from just Any maybe line Great. some to as about that And time additional might question other helpful. you

Mary Powell

know proposition, talked battery do we're about a value is of devices, that but on again No number I things distributed the in we're we that we're we've the aggregation another sneak doing network have many really for And this working solar building. as preview past, so sure. of

and not -- operator there nothing but a of assets even a the owner so those long-term the view, to from from is from of perspective. of longer-term value sort upside leverage but And perspective grid many of

Operator

Thakkar line Capital BMO the Ameet Markets. We of have next from question with

Ameet Thakkar

less the on kind like product subscribers Just sorry real of missed is sales? one was really that perhaps that follow-up. and of purchases? kind if of on kind Or it, but $XX between quick battery I mix. headwind of quick the cash I'm reflective mix of have million kind I

Thomas VonReichbauer

the is primary Battery item Yes. there.

of little think backlog. a you markets, given generating resulting in enter different chunk business. start us was And transpired as was the about than given had in new the the at we're We of what on for portion of in anticipated So labor installed in QX the crew with availability quarter, that a Omicron-related just quarter. that and impacts we backlog

less So there. on primary just the being the battery that a of different installed subset front, slightly of our that one but items and advantageous, was customer base

Edward Fenster

perhaps the crews absenteeism jobs people. in heavier challenge required I is recall, in on Not different was done and in the our staffing of you you sorts those installations jobs of and And mean are quarter. a part if saw of battery-qualified. through managing what X everyone

Ameet Thakkar

Florida to have bit could legislation any just again starting little to kind collaboration that on you of Mary, residential incumbent for kind of to take wondering thoughts supported kind see kind how of, favorable utility solar. radical And state's kind we Great. acrimonious. of collaboration And utility with kind needed the industry. to potentially think quarter kind I back had of of of the third of proceedings then being just Mary think NEM radical form? expand give has some of look been fair fairly I then the that kind kind thinking you a of the kind maybe talked if that about say of call, less I I shape guess, to is it's And of and kind kind or was

Mary Powell

an the was so resilient it Well, I I'm for society of system as in year, serve the the question. energy bullish before think long-term most collaboration or to the way. grid cost-effective, system just future an is it's can energy I on that And radical build last ability year because essential grid as yes, health fall a in great of the

So yes.

also of coming seen and just radical this have on, an Florida -- collaboration going week. may you while we Hawaii out news, of So last we example California have wonderful

not So from what many the forward-looking collaboration a create what and very of from traditional customers, of perspective just collaboration. you'll see it comes I the on at value overall just traditional very think much going the of to radical looking for things things for for pain attempts, of society, here. looking It's very in a times, not we on And planet, the grid pains not failed is very have evolution the a how just for through perspective. versus sort but radical that's at out perspective

yes. So

that what I'm encouraged come impressive we they with were it out accomplished. Hawaii. big So of saw by effort, HECO, all We part what what was we working very and very of did and a

for to So energy it I still drive pushing have that same the optimism and forward and future.

Operator

We have Perincheril next line question Biju from the Susquehanna. of with

Biju Perincheril

them? from battery And Can your talk deliveries then can also third increase expect vendors? to you supplier? you from on availability. supplies do when sort the taking to your criteria existing you about pricing more Do to have X you relax of get supplies -- One to more talk start from opportunity

Thomas VonReichbauer

Yes.

couple many rapidly seen simply the working hard and manufacturing -- been of demand the otherwise, And capacity. the on Remember escalating with we take first second that. the availability have here. on of industry, the consumer I'll across over suppliers has one last So years, the to just outpaced general work that ramp that ones we've

other to from our doesn't of confident largely suppliers function hands require a prospective access I on think part that ramp just to them on been batteries get on suppliers us part with has supply concessions course they as suppliers availability in the in our we're working have from their order and existing now product. more getting And necessarily outlook the we over year of So hand-in-hand in the our chain.

happy and puts with industry work -- I we're in that. for position get think position supply now and to the them us terms our I think player access as the strong that in largest a us both to preferred on

we receiving as again supplier, product ramping here throughout look to others we'll that, and add continue begun to third XXXX. have are we and the On move

Edward Fenster

this a 'XX. recent value, actually we is I have negative at Biju, our just in be to Ed. face might the in manufacturers have if do the protections that supply Obviously, from we very of add, upstream manufacturers the as occasional battery available reduced encouraged you'd take history surprises of deliveries. the chain

a But taking of that hedge able we'll be to as the least at news think at upbeat. a the little good we're what bit through So accomplish. to we mood manufacturers is the is

Biju Perincheril

around is that. to attach the quarter. follow-up mid-teens It A in like Okay. seems rate fourth

As year think you supplies, that? additional year? get the of with do you you around through can the thoughts end say, Any of proceed what sort to, the the by

Thomas VonReichbauer

concrete we'd Nothing that say yet.

grid. the and to area customers have California surplus noted store times, I we there's the NEM material The a and a export dramatically not on-site think impact. decision power another the of would will as incentivize proposal few initial where adoption to for batteries

meaningful I a trend in of seen, we to continuing that accelerating mover. is think get more over be would that respects affordable, I last exactly And so where and the utility is that given the And we've this multiyear And best need one think, want and lands. them see has reliability many the But ways customers more reliable power, trended few where to years. it. for

Mary Powell

that. of Tom's in in to to would point, we're rev rate demand. do seeing definitely and forcing events Yes, as really is add supply expect risk, market. California, seeing are are you we more we have fire XXX%. increased seeing utilities more climatic up up as the particularly just customer I What the -- This Mary. And is where because outages to that attach loosens we

Operator

Partners. line next with from We Shen of have ROTH Philip the question Capital

Philip Shen

on trend you versus X had and where the I $X,XXX to from QX? QX give if value. expect follow-up just net a the I was subscriber could wondering for subscriber sense you a value in

Thomas VonReichbauer

Yes.

our QX. as QX noted, as we result, year, and back improve throughout And to that labor-related then of meaningfully, comparable events net and total value as in value generated levels as get the expect these quite of rate continued Omicron full to expand from many subscriber So And year exceeding expect growth a more we volumes the we move to to obviously, early as look margins we there subside. effects we growth some QX. of normalized

Philip Shen

Would What's systems purchasing mix to through to in solar of Do loans your increased latest balance of the you driving like on about that? you get ever historical as customers also, it XX% Tom, versus What's on terms average of putting sustain consider QX, the thinking sheet? XX%. loans? looks we that expect 'XX?

Thomas VonReichbauer

Yes.

mix a things So you some in few customers look a credit improvements tax well. made loan of filings. We've for loans to as tax see push in Normally, offering their there. QX for as higher do a annual our

alignment mentioned customers say mix credit moments due on core of think service most prop shakeout balance the managing where upfront crews ongoing of trend. different you value at around of to continue and As and little installed overall in the performance about the backlog in impact that one in quarter, there out I'd was sheets, regions general our spots no what is strong guarantees from earlier, this product favor the time of offering, historical that different the and further interest as and remain costs, a no personal specific and our to availability leases service. shifted given I came the

to services So continue but we bullish lease continue on a also to optimistic and financial be provide to the suite customers. available of really

Edward Fenster

is And question. maybe this to Phil, just answer your Ed. last

that continue our aren't thresholds. necessarily balance I particularly think an on increasing of think loans return interest ROE holding rate to the we meeting corporate sheet, environment, in

that while loan that to or -- philosophy a business likely as wants any loan So just we'd it's system this a to our that perspective to we're our third been been cash who customer party. one dispose super at of point generally happy a has sell

Mary Powell

so a And the think, lease And that. incredibly to important, now. right product in back a I is -- from And mix data fact, would shift customers in suggest add that powerful. customer just perspective, would our most product I on recent towards just

Philip Shen

may I of... if one, last one terms Mary, in Great.

Operator

I'm sorry to queue. in interrupt. Sir, you may the question back come

We have the from of question KeyBanc. line next Karp with Sophie

Sophie Karp

but if incrementally maybe any give that's on now, positive for has read you or legislation Better been dead already. appears the could us that D.C. for plan of guys? Back coming chance wondering out Build lot be environmental-only you situation A was to your the discussed that could for with current be I anything obviously

Edward Fenster

Sophie, it's Ed.

I at are one possible. that. would Mexico, out would provisions end One probably I could tax from where would passing. be think March written including -- the pass chance of do think think that chance opportunities slightly of there's frankly, Better part New in bipartisan get interest, scaled the I probably the sick. there's the to be or and Build trying a as be extenders who's as Back interest that And climate the they the broad back. for the in to done a Build year. But climate there support X to something senator that have There provisions other have from going reasonable in Back be Better senators currently of were return -- the And after

Sophie Karp

maybe in as versus guidance? But much and that then being all give discussion, value I X that point? you able in of qualitative more within factors be but also, still California, at would be in have Or potential in challenging is that If also And of you other you a interest us I was for of by decision macro other multiple then say, and value of had XXXX identified this the quantify confidently your the let's other backdrop? them. beyond the it's that noise the that clouded that it. a we -- one to California months, factors would creation creation and bit to think Got factors. some California reasons year you quantify guess rates little how mentioned

Thomas VonReichbauer

value But the is it's ITC hit guidance, side on effect. harboring California. cash or consumption, would things Things the like of total say generated might on rate I'd impact value interest generation disproportionate have disproportionately generated, finance environment project safe on an would the Yes. which it. the of that cash and on timing have an total deals, California impact

Sophie Karp

you and gets to give clarity resolved, if have us? would -- potentially So more California

Thomas VonReichbauer

Certainly. Yes.

Operator

question last Rusch the Co. from have line Colin Oppenheimer & We of with

Colin Rusch

have guidance. about then how looks in California, like in much the just side a you're you into how of Can talk many things? services question embedded now rate the of I around outside markets what being And the ancillary growth growth seeing you're

Edward Fenster

I'm of sorry. didn't the question Can the just you. California you confirm? second outside hear Was growth rate for XXXX? We

Colin Rusch

Yes. That's correct.

Thomas VonReichbauer

Yes.

by We be haven't continuing state, There's but continue clip, nice of growth Frankly, have untapped happy states that have. see out continuing nicely footprint to quite of Hawaii broken markets of we're outside but those. potential and we with mature to and to really in market grow our continue in a more Rico, a to Puerto -- the we results state strong California. XX like lot even obviously a at grow markets number

Mary Powell

And we're we in XX ancillary XX to mean your partnership states. with states. Yes. -- question again, Ford our I back all And again, services, on is in

for us XX services. additional an entree that So gives states to

Operator

and gentlemen, Thank conference. today's this you. Ladies concludes

disconnect participation. you your for Thank You your now lines. may