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Sunrun (RUN)

Participants
Patrick Jobin Investor Relations
Mary Powell Chief Executive Officer
Tom vonReichbauer Chief Financial Officer
Ed Fenster Co-founder and Co-Executive Chair
Brian Lee Goldman Sachs
Julien Dumoulin-Smith Bank of America
Kashy Harrison Piper Sandler
Maheep Mandloi Credit Suisse
Joseph Osha Guggenheim Partners
Mark Strouse JPMorgan
Andrew Percoco Morgan Stanley
Philip Shen ROTH Capital
Ameet Thakkar BMO Capital Markets
David Peters Wolfe Research
Call transcript
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Operator

Greetings. And welcome to the Sunrun 1Q 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. turn Investor over Relations. to Patrick your like of Jobin now the to conference host, I’d Please ahead. go

Patrick Jobin

Thank you, Operator.

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

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

Powell, and Sunrun’s Tom Co-Executive Mary Sunrun’s Co-founder and On CEO; Ed Sunrun’s the CFO; Chair. today vonReichbauer, Fenster, call are

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

Mary Powell

before our topics and to stronger. guidance. what to to you Hi. two of solar incredibly installed, connect above quarter. and months also been Thank a say delivered all over and It’s in more in delivered for over share. Bottomline urgent I few distributed about updates. last XXX Tom expectations. increase the making over since daily, above XX,XXX it in representing year, has a clean customers our over you, Sunrun excited call which to we with has Margin quarter. from It’s only becoming QX we well turn of have and because a lot QX lead pleased and megawatts wonderful guidance We developments leading been a Patrick. revolution results we believe cover purpose our energy with provider active, never call last hard on about to a as the I to been am to of I our the progress positive last With increase today again energy. I Subscriber events to up climate-related of capacity and ability encouraged are been a am slightly want today added have $X,XXX, Ed about we of optimism has Net clean XX% energy our We quarterly that QX, beat an our was their from is passion

remains First, strong and at is rapid customer incredibly Sunrun growing a rate. demand

at the from X We are and competitor, while two also of generate growth our to is the times levels combination companies. value a achieving nearest that these innovating scale continuing

orders expected year, XX%. robust Our in compared XX% last trends customer grew to outpacing growth resulted demand of strong customers. of in backlog still-impressive installation our our These growth

ramp expeditiously We to installation our capacity, are working our strategically with partners. and internally both and

longer I capabilities vehicles way from about more to more decentralized revolution and independence. for power the at point a some strong powering consumers thinking business, now see localized, seen their just demanding. adoption, one customers energy is home strategic are costs centric as cleaner led believe which mind of clean Climate and of installation are not also they customer I market provide accelerating lives our reliable seeing no are looming of tipping always energy customer novel have their the lack future, incredible comes the many a that additional relationships consumers, affecting reliable, standing and and a the and something that where of and as reach innovative can around peace are partner channel a issues all what consumer demand. is security energy meeting but seen incorporate and the daily geopolitical but internal and of are blessed the want them and they for in in have to improvements longest so We are feel in change the valuable a concept energy rooftops. fundamentally escalating with we Customers

around help the recently considerable and We fast These recent pressures effective have that a lead better cost have increased and will rates Material are us costs mitigate us. adjust utility in we industry. and these increased faced we by increases granted and around world flexibility our adapting most interest Second, in will make stronger. way double-digit inflation us. markets, subscriber us prices to adjustments across to with action quickly pricing to dynamics, by to taken values rate to can and the industry-wide faster,

our see coming in we are at cycle expect the slide that change much we price this deck which You backlog the and the and backlog times, can quarters, values, which realize subscriber have over higher size given coming made to accompanying following changes customer by of the additions market. to our other vary

Third, continuing focus innovation. we are our on

far these company batteries, networking other than are deployed plants energy together more power now virtual many have to batteries We in any and XX,XXX residential form markets. over

energy I base. dispatchable, takes become our the time it it resources growing and how believe and markets new While grid, will to partner to with us self-evident traditional that to at need grid for distributed companies are a customer show and they utility enter valuable operators certain point

as undoubtedly the resiliency resilient of resources. affordable do realize to way will As grid than embracing we and push utilities a the to is There customers, the adoption start regulators can grid more value no distributed to by so well. get rapid them offer quicker to their to

with track Ford on in partnership is poised future. for and near exciting things Our the very

the providing participating of week, last systems Station of with now and Pro options System Integration process to along connecting installation the production in Home the Ford is launched with facilitate and solar customers Lightning Charge markets. the battery of the and for Sunrun FXXX in

to we realized FXXX Over for update and provide summer. partnership the next customers, months, the later this install thousands benefits an these on expects of Sunrun Lightning few will systems the of

The I significant approximately progress unveil of has invested expects also or $XX to venture will am that co-established my the this expects faster, incremental million has Sunrun’s for an services and we venture a in technology make and Fourth, with transforming companies expand differentiated and foundation the making proposition of expected currently have ways accelerate we into venture powerful XXXX preferential the the this am and product products incredibly partnership. new excited adding Sunrun we Sunrun XX% business the quarter are customers the customer we in unique put the end is value the have the owns access even through team XXXX. equity we deployed. considerably. and technology by strong experience by will fast. to moving and being I During to offerings SK. Sunrun been stronger, with and Sunrun can commercialization year finding leveraging better place. we early

nimbly parts the in to operate last months, have our several information the from streamlined ensure in most can possible. Over the few from and we we way fastest, various customers of management and our learnings of business share collapsed structures and layers branches

We others. taken actions to expand areas also investments while have certain in business of the reducing

that instance, and driven walk to opted from sub-scale of to thresholds. fundamentally branches of markets hitting weren’t decisive strategy took return our For a few away our to action go-to-market a aspects channel-partner we transition

XX our achieving in customer calls increased times projects where pricing issue. seconds to are With big approach agent home-upgrade customer in a at about our This refined care with answer when also we investment our on of X now a and is improvement teams. customer-facing were this We average from an we QX change minutes.

stronger. examples a always opportunities making improvement, few and of the are but these for finding the We investments company we are make new innovating kinds of are to

navigating I our of ingenuity team am significant Solar with Today Ed, out and industry. outside another am the changes transformational and their the with to period hard for of two am the CFO remain him can produced as the team, innovate Tom work. will we in made partnership faster Sunrun’s I on I I proud obsession as I the be I for the in project passionate which deliberate oversees experience focus a challenges private Tom company for May grow, announcing Danny impact in their branch and take structure, results corporate a this grateful willingness were opportunity best better, least, to the he role. a Tom thank we and for customer a and technology our nearly Vivint of field chapter organizational the Tom of that communities location rapid of of to and in Sunrun am over effective the time company over driven years, customers Abajian customers the ensure and and I future that, next the been brings of our we wealth call by customer our Sunrun’s maximize to with Sunrun’s team and and two last our we stronger, Every changes finance at Last, or to XX for the XXth, challenges. a passion, he project transition for and has talented, more believe focused the partnering consulting member our turn journey I is four who the while are serve. CFO. of opportunity on want building the capacity Danny acquisition He our needs growth, together. faster, years, go-to-market combined in be also but so years. our who to included can delivering succeed group, our where vonReichbauer certainly we inspired our obsession and communities COVID. currently customers, investors finance CFO a of for the mantra to is pursue All who all the last on these with we leads next leaving forward finance culture to and knowledge the team the look serve. is respond a smooth embracing laser with wish in will and team. to My for not are has we his a strategies firmly Tom, him Sunrun will months endeavors. a before

thanking are country’s I In our is and energy and it to one a Over employees, also at an our customers, the pace, transforming our Tom, addition you so rapid honor a sincerest express our service gratitude ones system to to amazing helping very at they change, planet. them. to thank for your climate to want to solve you, time, serve and much to again, home Sunrun my

Tom vonReichbauer

Thanks, has continued and with to many over to privilege a the success. been following passionate look you two I Sunrunners years, last Mary. talented so company’s forward work and to It get and the

was to strong outpacing installed the Customer customer of a In capacity first a first in results the approximately including subscriber XXX increase XXXX, leading a XXX saw quarter. the services saw prior XX,XXX, our in provided quarter throughout for the for growing the the megawatts by which increased the solar of exceeded approximately to additions. year, year, last XX% megawatts XX% the and same backlog. customer to quarter, demand products we trend Turning quarter were in We additions from XX,XXX XXX guidance XXXX. energy we QX, megawatts. compared continuing to orders quarter installations,

have us last sets installation as over financial deployment up the the and we mismatch strong quarters. this few a between been drag for creates on activities While growth, reported sales continued performance, highlighting

overall twice over the have than and batteries to installed more installations. we growth increase expect XX% is of by We battery installations XXXX, in rate now which solar XX,XXX

X.X While chains networked ended in nearly XXX,XXX increase come solar constraints XX% capacity, the we customers battery supply to prior the an and ramp of XXX,XXX quarters and energy supply considerably battery with as up gigawatts installations availability to We to year. QX remain representing approximately increases. dynamic, compared of subscribers, expect continue

At on Our XX-year energy most annual $XX,XXX, $XX,XXX remaining value creation of $X,XXX. net average for or million subscriber revenue over QX, delivering or XX result net is our the above by significant, contracts years. subscriber This value value quarter. was the subscriber slightly cost with stood knock-on in for QX, an over quarter, capacity continued last clean and subscribers approximately of installation productivity noted million provide. we was recurring of the Total generated, the the period, value end of outlook early crew the with was COVID which contract provided in orders. and at effects growth recurring number subscriber approximately multiplied the of the revenue a $XXX life we fast was In QX, and $XXX additions as in effects generate XX-year first in under continued we ARR reduced

we grown, the over last incredibly backlog in scale believe fulfillment this our strong backlog and we to been through few as XXXX. has demand quarters move capabilities our While has to ability serve

material are adapted The both some prices our we to double-digit these on even rising capital pricing markets and for are utility of Mary our proposition. is savings environment, rates experiencing rate costs impairing an in underlying across underlying our customers with seeing that cost inflation value As costs, opportunity utility changes, with price increases higher increasing and in in by changes markets mentioned, without line faster, cases, many customer the our creating component increases.

you our see backlog, this the on can nine, subscriber. $X,XXX a by impact to values As over we slide having is on subscriber increasing are significant adding per

values industry the to subscriber facing you more value work in coming reported once quarter the we through of this see the offsetting pressures is flow of the As subscriber of will installed, third quarters, delivering many $XX,XXX start and this our the net through backlog than over cost year.

optimizing revising producing moves pricing product our certain and markets. and results. on already strategically policies are mix are activities sales in overall positive We These

project of earnings operating quarter, billion the is to a equity customers end measure over earning the we now to the expenses, earnings tax and partners quarter. time, of X% face end Net plus the capital our balance year of quarter billion prior our from assets, Net assets distributions of reduction Gross compared with increase inventory given with over the in strong but at first the net assets $XX and assets the fourth $X.X maintenance from gross Turning $XX.X flows Gross of strong to $XXX net cash SK, earning $XXX positions assets is structures, equity $XXX a cost. sales environment. were and to were million The due receive at assets million We sequential to backlog all quarter. total maintain partners, venture in at partnership-flip expect in million an chain gross earning sheet. discounted financing of unlevered the and of primarily the dynamic activities working first continued to around and a earning the of investment less supply consumption the growing is the capital million cash. cash, decision in the debt. decline and ended

finance pending revise over our net with increase capacity energy Turning strong and in in to rates, to demand investment full-year now or interest rise volatile to generate our could The guidance, the generated activities, we recent backlog, changes further previously now project and we prior the California expect interest projects result for full throughout to total than in of resulting that grow generation direction. to the than faster the to year-over-year policy, capacity metering proposals guidance California our growth rapid and interest value in in to changes either Due fulfillment see total forecast continue meaningful The Congress for sequentially to cash XXXX quarter’s confidence success outlook. pricing to environment, less our will anticipated. and to value cash increasing swings opportunity rate customer ability XXXX and values we originated extend the increase timing subscriber and/or generated tax us generated a generation. proceeds XX% rates, meaningfully year. large to build and limit Consistent the last solar guidance will in gives We credit the currently year net total the volumes provide installed. value

net QX. As I subscriber expect to in values we mentioned deliver earlier, above $XX,XXX

XX% on reflects annual growth be of and more track expect the a midpoint, which second our than for increased megawatts more the XXX XX% XXX growth we year-over-year energy range For outlook. at well installed capacity quarter, solar to to sequential than megawatts, in

over it Ed. to Now, I will turn

Ed Fenster

also company, to also pinch he want was knowledge in of other as In contributions Danny’s offering unparalleled. I M&A. Danny corporate instrumental instance and decade Sunrun several role. his finance of to over for planning has and my a Tom. have and at Mary’s person his this the the promotion years to echo share well. right XX CFO. convertible appreciation His our know I capabilities debt to for for Danny nearly hit Tom’s areas, worked excitement He in are with Thanks, is for and shoulder-to-shoulder

to Danny’s ascension having CFO, been and I have project I Bewley regulatory directly. discuss I open and will chapter. report impacts will inflation looking excited interest capital Today this an summarize increases very him this opportunity lead Danny and company, Stewart matters. the to Danny the forward Following finance our on to to and next am on of recent update activities provide in rates market see

utility instance large are This quarter, busy customers that behind increasing underway. increases new we as prices have to interest been the price for for rates, positioning necessary raising

to As increase despite in fuel, regulated and costs pass prices, an electricity higher XX% able monopolies, capital labor, to are and has begun. customers, just this through their national utilities pass-through year-over-year

is In structure well capital of interest hedged swaps mix coupon, addition, rate existing long-dated through our a securities. fixed and debt

implemented we noted, This value, XX values discount subscriber see $XXX installed, discount slide at We is $X,XXX our rate rates. in instance, to rate. measured incremental $X,XXX. and and sensitivity customers, mitigate reduce between basis the pro-forma capital originated basis generate X% currently subscriber a can and costs using designed XX subscriber least is approximately various costs X%. have facing. to benefit the when in X% as On through to industry X%, Increasing nine, for expect Mary net as to by you price As observe the points would material points values recently above the at flow higher meaningful increases QX capital and will discount to

X%. we until years may report you a update rate ago discount below using we it the X% recall, didn’t saw several capital figure X% to used As costs to and

rate billion we a X%. asset While transaction solar largest the costs, note. ABS senior update lease minor for the The sector. to in across In issuers don’t backed we priced fluctuations monitor plan the placed $X.X all market we security above discount ever, capital portfolio the actively in was April

this achieve senior value, of to on net rebates, rate. measured about subordinated at all tax proceeds portfolio, contracted equity, XX% debt, of sources, terminations, expect X% subscriber We and and fees, customer prepayments, from swap discount of a

weighted We swap benefits X.X% or pool X.X% capital expect of from about to rate interest this assets cost including achieve excluding about average benefits. swaps, of for of a

shared before, swaps installed hedge we to on interest rate frequently have enter As newly into costs capital our we customers.

terminations, benefit and swap of XX% between and rate. believe tweak our subscriber we a over the appropriate total settle is values, income X% in volatility markets. less robust XX% We moderate As fixed advance to strategy term discounted the financing we from range given rates contracted a expect wider the at current

the the at earnings million retired and as on upsized enhanced we facility a on $XXX to during call, facility is with the tenor, arranged recourse quarter facility last $XXX only same larger and longer Finally, terms, million drawn. described our $XXX that we a partly lending the million facility terms

We runway. continue project finance to a maintain robust

expected transactions today, tax sheets As causing in capital term megawatts equity volumes, XXXX first of capacity XXX The several of causing closed to utility-scale for the and investors. what executed quarter. over experience the subscribers providers fund events project unexpected through deployed was and falls equity short provide debt multitude beyond among delays are transaction especially tax to in us segment massive

a this to expect modest provide tailwind for us. We

called most the AD/CVD now compounded dynamic particularly by high component anti-circumvention uncertainty matter. To to modules, solar many supply inventory increase of Turning position. by imports Department position tariffs, maintain using in and Vietnam matters. the a environment, Chinese update inputs. the Thailand, by from investigation navigate of strong on solar an continue the recently supply, potential catchily Cambodia Sunrun Commerce Malaysia, of we to retroactive our a chain levels to This concerns regulatory is

XX, inventory XXXX. of $XXX million March balance As over the up sheet, quarter the and $X.X held we billion since million on $XX during up of of start

of countries panels We to would and We is administration’s base application from the have procure the continue encourage directly supply believe exports Department almost head-scratching inverters is to modules objective solar of energy. over investigation XXX from that China, Most States. developers on to United of tariffs Commerce’s currently simply the against hand days cause and contrary to product misplaced to American which a no of modules both and diversified buy these manufacturers. clean the of transition the to

solar supply by We in modules have of for of total hundreds unaffected entered several into agreements the manufacturers from megawatts investigation.

vetoed additional the fixed capital the may on manufacturers down the and existing a to called earlier favorable expect months. metering terms the of which agreements Governor fee in certain less net increased the that from future such regulatory through also week, coming suppliers reductions by and was solar our in proposed We and somewhat working into to anti-solar to vetoed enter be bill it than The watered utilities bill, years result Florida as in drafted was year. legislature pushed Last went this Republican an through proceeding Purchases consider state’s for legislature, customers. a for investment.

the double-digit While for media. place. Florida to also that believe to said utility increase. by utility first citing the inflationary granted to is a pressures, the immediately Governor no DeSantis’s veto largest produced pay through utility up the forced be or the in taken statement California sold a should was and never Prior power was We the one positive veto, essentially comparison the read rate in

a of is California quote, Newsom, his Governor DeSantis clear, opined, For bar unquote. instance, now setting in rival, Gavin to position the pro-solar Politico for

investigation will from reliability delays the in ability optimistic which together powered ahead storage permitting gas Congress scale come if of Throttling pressure of against cooling rooftop are wise struggling under threatens looks once primarily agreement to than or X,XXX We the generated of California. also they their legislation utility addition, to come what proclaim ball through to megawatts even retirement an in might of scope causing that the have predict it scale plants. when the some delays. a energy credit we may unforeseen a projects cost remain any be. reach Department in In Utility pass December. by less risk increases capital our and and such the parties renewable shortfall climate On alone extension, but blackout Commerce XXth, to Newsom elevated deployment will an solar don’t includes crystal did that April sort maintain development agreement massive tax wrote are table, Governor aging, investment to

assuming active urging status We in time act, the will Mary. turn that, will quo over Congress the business With let being. but the for to remain it manage back me to

Mary Powell

Thanks, to Ed. about leading Sunrun’s this of we excited a I tipping see so starting are transformational change adoption I am position a and about industry. in point believe at in think energy. how consumers

we to and are line line run how who a Before open the helping of open am that, for our the I team, With the partners Operator, Sun. I stress questions. for let’s appreciative questions, want our our planet by customers, all create

Operator

you very Sachs. The comes Brian. Instructions] question, question much. from your Please Lee Brian state Thank first Goldman [Operator from

Brian Lee

questions Hey, nice here. I I subscriber and on value. everyone. just had kudos taking Thanks the on guess the for execution the question was first

pricing ton of quarters QX. $XX,XXX in you know drivers the and a that from cost for going plus a But now to here in terms there couple past talked are driver. I improvements, here more batteries. clear that’s I so about assume other would mix You is have $X,XXX know I

And I year know bit you targets? here $XX,XXX. then the targets term I give value can this a the And is that kind already us of then $XX,XXX bridge talked have for other of is longer How drivers? pull-forward subscriber of had the much from up What $XX,XXX this follow kind into How price? of $X,XXX historically get the you about a much to So up. to $XX,XXX mean sort to range range. is to

Tom vonReichbauer

Thanks, Yeah. Brian.

the and at effects challenges So productivity drag abnormal last labor end COVID from of of QX. QX the quarters and two there we the early saw

abate saw partially and value, rate subscriber moves that some as this, as general will well, well pricing QX positive have we continue show throughout those will having ongoing by up as a measures costs. on but continuing efficiency The attach large offset we material increase QX. of taken moves rising to battery component into certainly the here So of be

are those view work So here as over We volume their number of than into greater expensive we outcome the from last quite direction installed $XX,XXX fundamental subsequent but And we than QX on you and slightly taken particularly that it’s views, it’s have while. been a quarters, your we the I it long-term quarters. point, for in. to think for optimistic like in the change have had more couple way to components expected, start don’t as an sounds excited pushing about the definitely a maybe sooner

of demand are think where because the our to want timing continued the that is pricing if of dynamic that to The we and I through work expenses any outpaces, creates period, installed work incredibly that backlog. land this through see margin we one changes demand strong the and we facing sales in reported marketing given drag, versus volumes.

the changes. these majority we product are $XX,XXX the like through moving pricing number, here mix So that there. is confident may have some feel But in in variability and

Brian Lee

just here guess, any bit more being able trying kind And great. up and healthy not to made around, But the just that. That’s the keep appreciate was strong had pass the you so of kind right. All the quality pipeline, I second kind can up in then if are and the of you strategies will I question the of you EPC high elaborate new I keep on of it addressing a adopt of sort any sales about through high seeing to thinking you I move the if about backlog, have. backlog to Tom to on problem year? having on or level the just differently, you or Thanks. that are you the there as how challenges labor are comments side,

Mary Powell

Yeah. can Mary. answer one. that Yeah. I Brian, Actually, it’s

in hit, help the you some in go-to-market we that’s weren’t the that to we I attached and approach make markets can as next action going flowing like and hit and thresholds, improvement not value the where significant place So, to of return basically couple hitting taking really progress strategy, Tom are same decisive wanted and what months. but team into through putting are the seeing backlog on us lot at just a streamlining a subscriber an of the the at pricing time is that some

So we are people, high from are in and position we what really crews, quality in time, want we employer, very amazing we as we we partners. this fast, where hiring have channel of kind a position also was to is we in with have, build are the we also we growing partners the are attractive labor finding talking strong hiring we installation perspective, are a are at market we have, be leveraging partners the some I are about same are the

are closing working with very coming in make that real of decisively months. lot a them the having to in approach are we we terms of backlog that So sure a

Brian Lee

All on. right. I will it a lot. Thanks pass

Operator

you. Thank

next Dumoulin-Smith Your comes Please go Bank of ahead, from America. from question Julien. Julien

Julien Dumoulin-Smith

prior here out from versus you of roll extent positive a where back should about like the Hey. can could afternoon. takes you of we the the be XQ nuance your talk Can go especially And with new to off before you $XX,XXX. rolling being it the a I Hey, you to beyond all you you starting thing there, the today? those you the just sort be back that Congrats cost just obviously are roles to it trajectory on sustainability if detriment out as a here. inventory talk considering forward? come are team. Thanks, and to that to net about to $XX,XXX any the price right? growth know increase you like core and here puts Good but question mean will, here, point,

Tom vonReichbauer

Yeah.

price additive. material the certainly been there have increase is So, modest cost increases. Obviously, our

basis capital that net As costs. below had where had have been subscriber well in Ed noted, presented on have we X% time we at value moments

We in range. are now that

are at that still to going X%. hold We

increases pricing more this where policy growth are dynamic. have through. we put here now will profitable drive more And we increases area, around to additional are the backlog rate out noted so, moves around for several The higher that for have for item that battery the cost offset obviously material The than Mary the one QX, product projects additional moves noted quarters has the enough number again, of price $XX,XXX and been and moves around some we that changes that, us. made attach confident

the believe for confident is rates are noting last doing with at are installation you to year-over-year to at at of going we are scale rates. that just XX% It share ramp. and considerably, very still continuing increase massive and appear fast to in quarter, know Mary growing the are we gaining some we be What things question volume the we to think ability quite really to external forecasts our I noted that scales. the relative worth

get some creates what to in guess and execute right chance, able continues now of feel a rip to capacity and through where a There’s and we with we ourselves add level. there, lot reported drag are to I ability we see, that, partners. this through and again, to values, demand are both confident but We on our but

Ed Fenster

Julien, are And our and to watermark add to we temporary like that are it’s Ed. that it’s improvements structural for that Maybe describing QX. just expectation the high not some

Julien Dumoulin-Smith

the mean, in if I work far curious you little can almost I to go how Professor am question can I actually, sustainable, you But with on second if if I just that, is Ed, again bit address Not Indeed you more… a here push really. it’s can on it. No. Great.

Ed Fenster

on. Go

Julien Dumoulin-Smith

especially you this? that partly, metric lower think have and rate. know laid you more it could financing value there, about evolving I I metrics make gas here very quickly might I of out let’s you how the your but do specifically want and sure hear talk against is How how this clear mention strategy talk that in customer your to think cut? got target we against evolving $XX,XXX just specifically? metric, about about leverage about you creation you on … the

Ed Fenster

Sure.

things $XXX subscriber benefiting first. from value on swaps. make to average we recap that less. X.XX% X%, transaction presentation about described process cost the think X.XXX% The X.X%. It of the been to Without in worth experienced about we call the to few swaps, add So to maybe be now compared we we X.X%. just interest those an up discount of about will as that a would have are capital rate the wrapping weighted have of rate, In it point a would of $X,XXX right the is

as we outpacing which increases subscriber that improvements in see describing rates. are in interest and we are net moving carefully, significant but of. fundamentally increases significant the one mentioned, see, base is a escalating we our target are including We prices, So competition. utility Obviously, on we most top and that obviously, which in staying cost the that’s the watching we today, --

the differences. is capital In reason spreads that lower in rates. fixed of deposit dynamic suspicion interest to rapid assets. the we cost haven’t rates withdrawals. are the income the terms treasuries. any AVS that of appears have the you yeah, that know, those than capital interest bank for One in obviously, don’t be of My as increases in on know increases the Right based the is withdrawals our from we the is, strategy been long-term over finance now looking that worth mentioning for how significant And that rapid in there market caused I bank at markets.

liquidity in there’s move. in So market seen bank significant haven’t excess still deposits we so spreads that and

you doing will work So those continues relative bank to it’s between dynamics if future in see the commercial the current the spread possible us in markets markets hold. more

Julien Dumoulin-Smith

it. Cheers, right. what happens. see to I enough. Got am curious All Fair guys.

Mary Powell

Thanks.

Ed Fenster

Julien. Thanks,

Operator

ahead, Thank from comes Please Piper Sandler. you. go question Harrison Kashy. Kashy next from The

Kashy Harrison

for everyone, Good afternoon, thank and taking the you questions.

on days, you which here very demand these growth uncertainty have is of just highlighted massive first order right So XX%, amount from trends one giving very The and QX solid. the market obviously in focused edge just globally. leading now me, just strong is

tracking? you would seeing of are if so continue sense give us maybe on order XX% year-over-year that And I growth deceleration or still Are seeing you April you in just wondering how in any is sort April? was a

Mary Powell

at I we as we happening again, hit, consumer basically, mean, incredible from feel I perspective. point an are like Yeah. that’s a tipping really

see trends we the overall, So, of adoption continuing.

that’s what the or now our So guidance year on reported today everything we to informed have raising XX% higher. that informed

sustainable feeling yes, there really are So, we demand. like is

Kashy Harrison

rate on remarks market maybe today see the about equity fluctuation in up, experiencing tax cash currently Okay. the market? a evolved, how your Thank of an tailwind equity Ed, cost you given interest you. just follow us update talk issue. the you you and that’s Can in the prepared where And are tax that you highlighted in give my due to AD/CVD the

Ed Fenster

Sure. It’s a good question.

So I should mention.

think when in tariffs. I Commerce that Department resolved Commerce prices delays would than utility segment, no is and even discussed investigation. suspicion I projects Department investigation it’s much the the was My with first, drive So, the more changes third water the scale if equipment utility a further profound probably of scale the under costs in capital

generally through seeing the like flexible see So more capital even cost on IRR significant up of speaking, or -- continues you it’s tax I market, years for been whether providers are pretax you market very really some a don’t on that among year variation who of usually, those just slippage are in costs. terms other are we focused most And you have that, supply like think product be typically the to in X% very is lot people equity tax cash looking a there’s pretax very, transactions. on doing don’t the market and flush close projects, XX that’s things. actual and in when But I see what renewable and about XXXX bigger just the more usually that. this it’s markets, said, the so funds of to it basis, really excess certain than calendar a XX down equity That additional --

Kashy Harrison

Thank you.

Operator

The Maheep from line you. comes Thank Credit go the next Mandloi ahead. of Suisse. Please question from

Maheep Mandloi

higher the and thing and guidance on the increase evening increases here. Maybe of on and the for Good potentially going the just taking one questions price kind customers quarter the or forward. thanks question from like congratulations value Hey. for me

is Now this approvals? increases as utilities we expecting bills from you are of of rate -- that kind later year the just higher Thanks. something next electric into because you think or the their or price get base the utilities

Ed Fenster

Sure. This Ed. is

mentioned, as capital. or So, in speeds sometime major costs is a rates. are yet the and These increasing is been approved measured middle the even And lot in XX%. I cases, Electric all up those labor rate are most we in utilities and CPI obviously, certainly your data different are quickly, Capital, retail labor for fuel of reflected haven’t describing three fuel, clear for. the filed to of what point, or dynamics National cost in Energy

So the we is so what tip gives iceberg. which seen XX%, the me of the have far that only the confidence that’s

Mary Powell

that you I is, distribution, accelerate utility many business, so seen to long of only it is pressure. investment on remember that, rate investment the pile the in have to Yeah. seeing, And I in one all the term Ed, of we of of just perspective the have from to all and are that creating with all things transmission ago my saw systemic years

pressure, So term significant of that the also just of of drivers really increase have hit that Ed systemically pressures absolutely sort has pressures. top to of on these items shorter rate drivers that going increase cause are you significant rate

Ed Fenster

On call, described, Right. a the bonanza… recent I

Mary Powell

Yeah.

Ed Fenster

depreciation, running rates. programmatically causes rate expenditures, ahead increased capital multiples base which utility which are and of …

Maheep Mandloi

reservations. then could talked I Yeah. me how Ford just XXX,XXX and about like year from Thanks. with like think talk that should will for upside going we it. last for Thanks and But partnership color. And segment -- or being one than It’s you from Got of forward? more they the about about this contribution jump just EBITDA your the back around in.

Tom vonReichbauer

Yeah.

we are began. ramp, in just as the So early Mary and noted, relatively production the launch

to We reaching out those customers. early are

our at right. will services about solid home to hardware think portion own, ramps the installation business that business I you as its ramp couple production margins and in think and and can own our of distribution business. reasonable nice its bidirectional a with EV on vehicle There’s sale that the the, think home then charger, and You business That selling enabling vehicle. components different the integration a as services. backup a system will providing where the hardware business, the can And are be we installation from of of include of inverter extends

on those then unlock might more will there’s where in benefits the year. values. the home larger a with that much more shape of I customers potentially to have I install the larger system, is expect solar lower think you offerings more beyond, of those vehicle a and given when get ramp positive that this definitely battery a here a of materialize channel are meaningful in probably But Ford the think costs the because XXXX and efficiency acquisition although through deliveries, have coming of it subscriber customer have likely to impact and coupled can

Ed Fenster

Ford it underscore charger bidirectional And a you can installed get can example, to thousands negative a just with feature, cost it. bidirectional right, installed, which or get customer a or customer for of pay if are you to it for in now unlock, the solar has wanting dollars the case you

backup. system got the now are You have and you money home the solar from saving

So a value proposition. very customer it’s compelling like

Tom vonReichbauer

Yeah.

Maheep Mandloi

backup the Yeah. generator like to you, from the backup looks they charger from also buy have And you, right?

Ed Fenster

Yeah.

their installation We and going operation are choice provider co-develop system. are they to the

Maheep Mandloi

Thanks questions. you. for All answering the right. Got

Operator

Thank you. ahead, Please comes question The Partners. go Guggenheim Osha next Joseph. from Joseph from

Joseph Osha

comments I think Thanks about very you Doesn’t know you for how stuck much. -- your Professor, backlog bit capital do with a a way. how of hedging to thinking to pricing. nickname am out hedge And out commented the that. your that little cost now you -- prepared all exposure? capital I by of time, the The continues grow, as little question. to manage more? backlog exposure me during help I your then cost have you that I about that relates another and understand Can it you

Ed Fenster

Sure.

are we So XX and the Joe, install rate installation interest nine time term prevailing a as before months at system, that installation that, locking the occur is works, months or typically of how in we out. could

time transaction we installation. the security. we economically rate treasury locked the time issue So in But you that in that see the really the in at the coupon, treasury we completed, of rate at the the obviously just embedded

are and of facilities all the that projects warehouse that hedged our were developed in that the installed. time are the were have assets in we rates at with So, interest effect sitting those

at lock pointed capital now the we were than in to last be late sold yet recent forecast. that receive up insulated we the systems and that there being that the are and were prior we those more installed Tom higher run which the costs as systems systems rates we to on large are are we that regard. But going able obviously, certainly less haven’t rates that proceeds in So, been to will in constructing, systems are constructed, year out, rates the from systems, those are sold on

of have But we middle than like well through. like sort So, that we that, need this other work do I we feel matched. zone to pretty are

Joseph Osha

to it. capital amplify sort again, when exposure the Is sound of does still you system for it you like way that what you on of question, that some saying? just sell and the open the But, you cost now this works install time have the between when are

Ed Fenster

Correct.

Joseph Osha

is that there is to it And it any that mitigate way kind what or is just Okay. is. of

Ed Fenster

mitigate I to mean, you options could price expected likely it buy of and therefore pay it. the value

down. to I instead who do way you better customer like experience. that took been everyone But a that’s cycle that. could natural have were just for Interest That we and a rise is a more to general than rates thought It’s handling the interest if strong faster you us times securities think So, position, going approach trades. drive process is our you the it.

Joseph Osha

relative question, to go-forward given more a model, for second, how simple how Great. your how all looks of but of basis Okay. generation about Thanks. on is year, this sort washing business just it. much you the this Got then do not through And a feel cash business growth?

Ed Fenster

Yeah.

the XX excellently we certainly It this, like more a the XX been and like this. we high is demand and over have product in significant, we seen energy tailwind is clean the think I lower continue certain cost. is there doing right? is to in that It years environmentally It never is environment sell have years, long-term, demand, better a reliability.

our in input best that’s things costs competitor, pass want are ability is and capital Utility, to because experiencing we all have an increased that getting anyway, out in or so, business and the meeting that’s And to costs, Electric success, helpful would also and capital, the cost any pricing, turns do also through certainly, but you their whether with the some you business. our if operational down think efficiency are up doing I

am the that the a not business long-term capital input And I capabilities have still for so we optimistic very -- very the is energy It’s reason, costs flow right? still like good of only that I company too. are an about cash

can may costs us, up it everybody go presses capital So up. pressure that but

everyone price make and up. So and still up price is lo else We behold, everyone money.

Joseph Osha

you. Thank Okay.

Operator

The go you. JPMorgan. next question from Mark Please ahead, Thank from comes Strouse Mark.

Mark Strouse

want much I the just for taking to Thank Good case. back very questions. go anti-circ you Yes. afternoon. to our

you You mentioned have. inventory the

Can that target agreements then you this your tariff? do What an the that you does become what for you -- buying the of would follow with there? XX% of What how do You buying I to and used to Asia you mentioned existing supply that to address future up have. potential China kind visibility give event kind you the agreements the year? in you hypothetical you. would is, does strategy, hypothetical greater the that And growth non-tariff for supplies? meet directly for mean, be a kind keep of Do a than just known the be Thank limited, tariff? from Southeast with unknown then

Tom vonReichbauer

I take. will

Ed Fenster

start Tom. You

Tom vonReichbauer

question to general the levels the it inventory So positioned. outlook, first relates very -- we and well as feel on

of are flow sheet, increased quarter. steady million, and our need the again and vast throughout products balance days now we see of things of we north of we quarter strong the volume $XXX over can on this ramping the carrying the supply have installation on of as to you absolute continue inventory triple-digit the here dollar majority As we were and even that quarter-over-quarter

those the the products. plus least really where a to as are continuing sources is that product at then, looking Ed covered from as yeah, should picture, moving options got as able at available available be things have general at that the felt terms year-over-year fully supply that’s So I noted, feel, one moderate, we portions we I general growth reasonably may quarter look for at to the look here But even and extent new well in some you the up thus think different we there’s confident on view to that we be And protected. to XX% here. creates to meet the get world, supply far in to contraction think obviously a supply of of access market, pressure large though,

Ed Fenster

panels to are get Yeah. And affected Southeast like, or Asia, Southeast China. to are not very there from just from exceeding mentioned recently made your the I international clear manufacturers. tariffs take to point, Asia American be could not manufacturers, tariffs Commerce manufacturers. be to see in Those that could avenues wouldn’t they it from

back to So, is if Chinese to in I are like you tied made petitioner how think no the as so used that did Asia, by end end clear do this stepping up our there’s this really language has up with just Southeast And in they Department like reason tariff, preemptively. China would Commerce everyone frustrated government the manufacturer of buying are by hands and terms has compared probably investigation. cheaper, opening from but And petition. you

we very negative is we low. edges, very, result a will what investigation very negative irrespective think customer of we cost side, the I module will direction be around what will confident on meet module comfortable demand find They are of that, goes. are can But that we but very here, payable the from meet days are chance a it we a interest. it, the question like of what’s the our the

Mark Strouse

Very you. Okay. helpful. Thank

Operator

Andrew Percoco question Please go ahead, from Stanley. next Andrew. The comes from Morgan you. Thank

Andrew Percoco

for Great. time. the Thank you

any utility for about across So to the today the you currently today, We in don’t operate heard me. what so, that lot a strategy opened be there? about price for would if or you U.S. a just market go one talked new quick that increases markets potential Has one and up lot guys

Mary Powell

territories. I it country, as for and on to mean, moves two monitoring relates we evaluating strategic going is across the sure, new are always what

As Hawaii, your the feeling in in. you evaluate know we comfortable to we are Puerto are to always now, markets operating Rico, in continuing point. we and are But in XX that states, we in are very that

markets other in might pressures. So, be attractive quickly attractive look will they utility be cost the looking yes, do but because come foresee today, of are to to years rate that not that again going I

Andrew Percoco

Great. been Thank it I you. The leave answered, rest will have questions my there. of so just

Operator

you. question ahead, Thank next Philip Capital. The from from Shen Please go comes Philip. ROTH

Philip Shen

Hi, Thanks taking questions. for everyone. my

Can what the million filed you just looks and near-term? results with mix Q liquidity think on today you along tapping into through like view us a I your in undrawn. is walk maybe shelf markets $XXX and situation the your your of equity

Ed Fenster

very hygiene isn’t the corporate And fully our we simply have mentioned, liquidity comfortable and size do. to we current ample we the That’s periodically revolver, a drawn that move which company’s increased feel position. I as in just where we of

Philip Shen

then collapsed relates, expect Ed. then it the head your Thanks, layers structures, you Mary, how left many how and talk that right about And organization? to you expect Thanks. Are size? the as there? and can what management to comment And of over several you you many layoffs departed do as more you people

Mary Powell

growth organization layers overall hiring mean, we I streamlined -- really from, are the and we the as did look again and a sure a absolutely in position right, in are close is are collapse so yeah, But, headcount a mode. we we are like, we in. we employees. are is flat new -- fast, overall that’s making bringing So, company a really possible overall, perspective, the to and growing at of customer it’s lot That

a overall, and we go. want will I getting tell keep are I with it’s numbers, demand. specific to In of fast no, into to that’s growing don’t really, hiring are we up you, again, place not organization, But I terms the think a

Philip Shen

the Appreciate Thanks, Great. color. Mary.

Operator

next Ameet. Capital Markets. Thakkar ahead, from Please comes from BMO go Thank question Ameet you. The

Ameet Thakkar

afternoon. Good Thanks me. Hey. squeezing for

of bit of opting last of rates a higher the just you seem was ownership customers on more little wondering just are of a headwinds have pickup seeing you loans or like You about that? wondering year, potential if models third-party versus kind kind interest guys from have for But kind costs. loans was side, guys getting from are I financing talked popular tailwind a in I a a lot other bit become

Ed Fenster

almost sales interesting an preferred put feature reps simple loans in for gone that it’s like and set, capital speaking, X.X% accept up Ed. to is for States a dynamic, United seen This prefer have loans where could lease change drive and to controls controls care that lighter Hi. tend and mostly looking for Yeah. that the but of sale with any sales It’s something, the the that at that, reps most moment. who actually right in solar in like loan part costs the production that which pricing, to versus I loans. kind are a from really because make money we about us we is those haven’t sell better interest on the doubt the market now, interesting solar solar The leases sell dynamic loans the Treasury willing the things we buying

how see customer right dynamics market. So play in now out it will to an But that the be interesting that is attractive certainly value proposition.

Ameet Thakkar

of driven kind coming good back this one, XX%, Great. rates? the availability or low guess. just some Thanks. quick real pretty that’s the that higher Is battery base, more systems growth people their attach mean, retrofitting And of by I just is one of all I more off and of

Mary Powell

a But, to is mean, remind just I of wouldn’t batteries little on again, that. it’s you, we a XX,XXX small say I There base. bit have residential deployed.

think in the numbers the of one I highest country.

interest yes, of to of So, the the customers than going context greater solar. lot we just a in seeing just are benefits providing more

and moving this providing more about a homes into in place is improving as their they drive. are of So customers their they rapidly obsessed lot lives it think what we customer

attach up see rate that go So, continue yes, future. we in the to

Ameet Thakkar

you. Thank

Operator

ahead, David Wolfe go Please from you. Peters question David. next from The comes Research. Thank

David Peters

I to would lower component being level of at subscribers seasonal a in of just the low the Yeah. or it Hey. the year. this just we stay ramp to has little to a you I which dipped should had The this up? the that end But quarter, mid-XXs even a forward, mix expect is expect question bit afternoon. going back purchase of on versus than it Good understand QX, customers to

Tom vonReichbauer

noted some saw in a mix we simply that of was of is QX out of Ed No. what dynamics QX there. here play Yeah. But backlog. and short-term in are the what coming

mix levels. off We maybe return current seen back I see had remains will or think have is more come sales of at points mentioned impact as to loan begin changes seen product late, the with some we made to a we were and TPO so own the upfront expect what higher move as And pricing of third-party of I have to that we the moment. long in and than But the that in direction attractive something there will a would little it we QX. bit the how

David Peters

you did these products expect commercialize the and into that And expect additional the your through year? give you so of And to to this million, In you on additive little some Great. the maybe to investment subscriber $XX value pointed I SK later in to be just of net initiatives highlight. this think, some switching services, would you venture, of $XX,XXX the working flow then a see preview that? metrics? Could gears, you when words other are you

Mary Powell

how make an additive do no perspective. we customer investor from can perspective clearly everything about be a mean and community is I perspective, mistake, it a

venture But any on. at more about it excited about not technology are specifics this time. to very is working the give a are we that in So position this we

David Peters

Okay. Thank you.

Patrick Jobin

for time that’s have all the think I it. Appreciate questions. we

Operator

This end session. today’s and conclude conference. gentlemen, have It of reached is. the we does Ladies Yes. the question-and-answer

you at lines your very thank this much disconnect for and participating. may You time