Sunrun (RUN) 6 May 212021 Q1 Earnings call transcript

Company Profile

Participants

Patrick Jobin	Investor Relations
Lynn Jurich	Co-Founder and Chief Executive Officer
Ed Fenster	Co-Founder and Executive Chairman
Tom vonReichbauer	Chief Financial Officer
Brian Lee	Goldman Sachs
Julien Dumoulin-Smith	Bank of America
Moses Sutton	Barclays
Stephen Byrd	Morgan Stanley
Kashy Harrison	Simmons Energy
James West	Evercore ISI
Mark Strouse	J.P. Morgan
Maheep Mandloi	Credit Suisse
Philip Shen	ROTH Capital Partners
Tristan Richardson	Truist Securities
Colin Rusch	Oppenheimer
Sophie Karp	KeyBanc

Call transcript

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Operator

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

Patrick Jobin

Thank you, Hector.

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

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

CEO; vonReichbauer, Sunrun’s and to the Executive Chairman; CFO. and Sunrun’s Lynn. Ed Fenster, the On are Co-Founder today call call Tom Co-Founder now Lynn I’ll turn Jurich, over and Sunrun’s

Lynn Jurich

Thanks Patrick.

to pleased grid. to our best are improving and results, quarter XXXX, be clean, We and for a the growth customers, Sunrun’s outlook on track share to in history. growth. year a operating We is affordable an transitioning our QX progress future. the first clean accelerating than country country The reach, rate, leading year-over-year company’s the market energy scale and to more with ended reflecting we are XX% With XXX,XXX expanding the resilient

to increasing our the for XX% full XX% XX% from year. to are We XX% new solar guidance capacity to installations

maintaining our record all-time businesses two direct-to-home and proposition strong our delivered volumes. gains. home value competitor. We channel are all-time times through expanding nearest partner are sales volumes builder margins and while our delivering that and innovating, our than competitive Sunrun’s advantages unit share Solar, QX growth, at and We Vivint greater market a channel. accelerating delivered performing And record integrating scale is customer

in unmatched with channel consumer QX. multi-channel strategy. an XX% our we by number and reach selective work of grew partners focus group on of with partners over working through a We the We have

agreed agreements. Given the all platform, exclusive to our and value brand partners new advantages, strength, technology financing of our nearly have of channel

Our than first new for compared year, to is and scale the prior to in pro-forma by the more business quarter starting Vivint home grew Solar. XX%

working are California. homebuilders top the in XX XX We of with

new of across spans communities the pipeline country. hundreds Our of homes

when late-stage serve batteries to advance nearly value have plants. while Sunrun which locally-produced virtual our power recurring discussions. continue to differentiating We offer homeowners that lead power have necessary capabilities power XX,XXX reliable, has on now competitors opportunities opportunities density, through to clean has with the and systems further opportunities installed forged to blackouts Sunrun home technical from ability revenue offer attachment nationwide, provide helping scale, over and record On These grow constraints power revenue and a the energy. and from or Brightbox been proposition, Sunrun’s daily incremental pipeline. and last or again an that grid, the network this enhanced the from the lack market. energy customer are is supplied offering optimize in expected and rates manage increased grid already awarded are plant quarter basis, virtual services Battery times. the $XX XX peak these to across We in continue million we at batteries purchased during levels business.

constraints. to XXX% despite installations continue battery We year, in supply expect more than this growth

further and ease, faster. even and to accelerate allowing expand supply manufacturers meet demand constraints expect to pent-up us offerings, costs battery more As we improve to adoption

well to footprint. need the Vehicles increased Electric larger low, a a Sunrun create We transition to make flywheel this our energy switch to at-home is ways come on These size the positioned enabler support exploring the double and country Homes we to high are margin this systems effects. and since actively positive Sunrun is solar will batteries and key solar electricity systems the larger incremental increase amount and needed the infrastructure leading expertise cost our national these at increased distributed Home consumption. to home know compounding relatively system, approximately managing faster to and consume meet home electric than EVs batteries energy into can most benefits carbon emissions, a and of solar, families. to the transition installing resiliency EVs services These will manage EVs be the integrated must the are a the grid economic be electricity. accelerate a provider maximize for strain vehicles. and transition. EVs of grid to consumers We with further comprehensive with management and help and benefits believe the Homes to even be given the reduce of realize. electric system to

to ESG and now sustainability Turning efforts. our

We attract the of can By of investing people, set a our the are best across economy. needed the fastest advancement. in sectors enhances homes with American that skills workforce the launched and proud we growing initiatives the to and in one we electrify and country. QX expands the job In opportunities career Sunrun Academy, retain lead to programs

achieving Sunrun of Report. XXX April, million will our fleet at critical tons to lower transitioning In carbon part program XXX income by skills. include five XXXX. Academy goals in operations emissions will Sunrun career-building we of our XXXX, over an electric to decade, and offsetting electrical next from have one-third initiative, deploy than leaders, carbon our The and emissions emerging within us These households or from megawatts vehicle solar unveiled deploying train by more net help all to a least focus Impact systems we in-demand develop annual the of employees zero access goals hybrid to metric years, the work. sustainability As this skills with develop on our reimbursement expanded like tuition

prevent we to the XX expected healthier over we retiring for over solar fossil emission The virtual Finally, energy. powered years. the by plants of aim million power by of next deployed a aggressively tons QX plants solar to environment future COX fuel create X.X just with generations local in systems are metric

it I Ed, like turn great to fantastic our I’d team to another thank for over you, quarter. Over Before Ed.

Ed Fenster

structure recent robust taking wind some that rather We The through capital XX seven job that for will Labor other better, and developments, Department about strategy, in will development. our in I desolate Today, local of note is throughout employment communities, capital our people represents than solar evolving political our on installers locations. jobs Even solar predicts all XXXX. desirable. distributed nationwide, Washington runway. solar recap Lynn. of touch and growth exceed jobs any are in category employ Thanks,

automate, creates of a rather our organize jobs. opportunities. career and growth wide driven of Our reality than feast-or-famine jobs And industry’s advancement and consistent range remain project the year-out, need year-in to the scale,

coming close X,XXXs the positioned require to years, home, are add that leaders well degree, Over of paid, XXXs distributed college a our of exactly jobs don’t focus sort today. and secure, to the that energy the uniquely is are of

particularly that the utilities, and needs we’ve state doubling solar Key strong. our end, compelling of of the level future. Los the grid a appreciate our intuitive major such believe as intelligent and the of Support power vision vision deliver in the unable reliably and the crossroads the decades against and for distributed are as papers at State heating Times, California, our where and editorials boards vehicles the in alone the are publications, and behind These this needs fallen to and alone is electricity editorial is let have large Bee. elegance maintaining most tomorrow. that influential media the well. urgent to continue our Angeles and by today, locally York will recent and communities, We at our the within the recognize Times regulators electrifying and require an produced see New Sacramento storage, grid, seen is obvious to consumed, of that

that their For the settlement to regulates in with instance, win-win we was reached Carolina, South Energy. utilities Dominion When public them entirely rejected Duke faith, in request. negotiate good a unwilling commission

capital are at Treasuries increase all-time costs in the despite earlier all-in or near year. Our this lows,

while For continue treasuries pay stabilized to we at attractive Treasuries spreads now, to levels, the fall. have very

more customer they we I results and Sunrun expect interest rates now. in in were values today, don’t we what are at base inflationary periods new flow enjoy near-term, cash financing recent higher twice open up retail While environment, the us. rates, and that be drive would would good and continues frankly delivered when batteries sources, materially note costs And, further like least electric for A excellent rates to which lower scale modest opportunities. plants. virtual power Meanwhile, increased revenue our

available We our to capital will expect flows shareholders. overall to common lower an into long-term leverage that increase cash strategy cost scale that

over a evaluating and as share we’ll of are possibilities we course a updates the next this vision, number We achieve finalize to quarter action. of

robust project finance a maintain to continue We runway.

megawatts XXX through expected quarter. project fund and for of executed was As turn over what debt and capacity beyond Tom. now X, tax to equity the term us the to over May transactions provide subscribers call first I’ll closed deployed sheets

Tom vonReichbauer

saw into growth strong quarter in fourth Thanks, year-over-year has team exceptional Sunrun margins. Ed. volume The the momentum strong continued with XXXX. delivered at again quarter an The we

We demands are ongoing of our integrating as meet into significant proud a Vivint post quarter to the even we solid operations. Solar

to in partners. growth we bring our our even leaning customer to while our enhancing accelerate are We offering value further and

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

QX down much in decline energy last megawatts first to smaller approximately business. our QX, what from we the include into XXXX, year, from installed quarter seasonality first from X% a pro-forma increase observed than a historically quarter in and Solar XXX Solar the was given QX capacity of Vivint have X%

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

at value or number by recurring in QX, approximately In provide. with net recurring the XX in value end approximately remaining was first significant, under customers. generate we and net value generated, contract subscriber existing clean with of a XX stood additions XX million subscribers representing revenue, subscriber from contracts years, over QX, approximately life Our subscriber of average $XX,XXX, the Total million of period, multiplied the annual was of is ARR, the our just cost quarter. energy subscriber $XX in year visibility revenue revenue delivering most billion creation the was an for At the $XXX $X,XXX. value which $XX,XXX $XXX or

million X% of Turning in cash earning billion $X.X the is of of the in of $XXX net maintenance with to quarter gross balance unlevered all the assets in flows million tax time, structures, sheet. to Net financing the earning we distributions assets is earning billion end first acquisition partners capped now and over equity debt. partnership-flip Note expenses, that assets cash, earnings receive assets convert, plus earnings measure costs. related Gross total project to $XX were the our net gross from and Gross earning call, in cash were quarter. first WACC. quarter. partners, first expect the customers we equity to at operating assets less and end and a and assets, consumed Net ended related at $X.X at We approximately QX, cash. the discounted

now Turning outlook. to our

is Solar. opportunity in We sales Vivint strong channels, well team front of momentum expanded we us. to focus well, and believe customer our reach investment even of positioned as executing respond in integrating have to experience, Our our exceptionally brand, sales across us market on with all strengthening the

in are year, guidance year, increasing of up to installed the the of over XX%. solar to We now full now guidance be more Total capacity from expected our value $XXX We full be increase an million. prior to for from generated outlook in is XXXX to for a million XX% growth than $XXX growth the prior XXXX. the of range energy forecast XX% for XX%

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

With rapid continues on have QX to business of to deliver investments growth in we accelerate old, half questions more costs, open above the and capacity demand Consumer near-term, at this into in the quarterly dirty combination but for very While a progressive let’s and line will energy for in front-loaded and of see lower XXXX in in energy sequential The installed products, integration increases and focused beyond. in we believe demand that against are pace increase operational to the XX%. ramp is second our infrastructure expensive, alternatives expect values with we solar resulting the model, synergy throughout QX realization sequential subscriber and we capabilities that, please. in the growth result year. well to to an net

Operator

first Your line Sachs. with Brian Instructions] Thank of you. with [Operator from question. the Goldman your proceed question Please comes Lee

Brian Lee

for topic, Hey range. just XX% I it and assume, QX, everyone. taking XX% Thanks kind had thinking a are but run solid still that let's to growth given questions kudos and average of in year-on-year the of to a wondering, skew cadence in in for implies I execution see the Is your basis comps on through right the about if second be we QX on half, get easy QX say on that here the follow-up. understandably we’ll and the increased QX? guess here growth then QX, guidance. we should the how that And rate

Lynn Jurich

Thanks, think about way the right it. to Brian. is Yes, that

Brian Lee

of having just Okay. the we work price And quality on impact as problem it's or how given you then fluctuations on. thinking workers or on labor it are do be outlook around a to the lot. batteries but what guys side and would panels, two on whether you seeing volume then challenges are the have, the I that just sort question high the questions with year. inverters, And getting growth you're increased anything follow-up, industries then of Thanks are outlook, guess hearing have to pass some the visibility part things? guidance back supply of better here a potential a just about chain, demand labor, One for that I'll the tightness second could the

Ed Fenster

Brian. Sure.

kick it to Tom it and hand So going. to this keep is just Ed, maybe on I'll off batteries off then

so bad we installations alongside, news put we to battery which if The of year-over-year. In in for sorry fallen than even the at prices tightness at a demand supply all supply, batteries. growth total We battery we over it growth expect could is forecast, Across expect batteries experiencing we've that levels, should both to near-term manufacturers, we grow impact good batteries end low talk end than in inventory and it’s increasing little do and represented supply for little Tom the forecast inventory. for market. the little install which to of those significant than the been in customer installed batteries around the more we of faster working more than help batteries over through increases to still successfully XXXX. not that far. in terms – intrinsic planning And And And full faster are growing news QX XXX% the also in about but bit with demand enough Maybe obtain we during XXX% is that one has can QX be bit. hand we support to of pricing not QX, not a demand. I'll tightness

Tom vonReichbauer

Yes. Hey Brian.

supply we're chain, the highlighting. chain across the to that manufacturers are some insulated So of that we feel well rest supply comfortable situation

position before, these their said important order. we believe strong in position leader, pretty we and that position as in puts the sit our in pecking us As customer for market a a companies

supply of without We've disruptions, have chain strong to have many in also orders. new non in we levels contracts non penalties have scale, increased difficulty. our already reached the response buffered target delivery some those of levels we inventory Given supply that – cases our for and

suppliers on supply diversified multiple components we the risk helps our that manage we issue. all feel so for this chain pretty here, Finally mitigate of further good using

pass it for over Let to labor me issue. Lynn the

Lynn Jurich

Brian, Yes, This is question. vigilant we're sure. about. extremely something great

internal a bipartisan we to career electrifying XX just of it know gives feel jobs, like a brand pathing our competitive We solid talked U.S. can the and like investing the some we're foreseeable the the launching us As in a talent building we're to in here. external We that Sunrun for develop all wages homes why always people. does. million it but do so about partnerships the XX,XXX future, Academy on talent focusing offering we've that's of support has and lot with add model. which talent of partnerships and SkillBridge, really Department Defense, pool the launched access We're position

So solid short and here. feel we right to invest story, continuing now

Brian Lee

right. much All I color. so Thanks everyone it. the for appreciate

Operator

of Julien Your your America. with next Dumoulin-Smith line comes of the Bank proceed with from Please question question.

Julien Dumoulin-Smith

team. here. the perhaps time, to afternoon the get for good on Hey, all updates Thanks

would've suppose the to naturally to this flows the how customer do start value And you the $XX generated But the about same genre growth versus think this do to I added $XXX $XX to year, perhaps going maybe $XX customers little this thought $XX that for course that million million. a from terms from trending through think $XXX think that about that, question, the $XXX How then that NEA through the a trend right. do you I $XX I weighted It's I implied million. to about more really, the backend increase from talked So last might with of million presumably? bit a think here you baseline how $XX $XX year, bit million, be year? little million. one, like about in you of to million as than the million given growth million And compounding again, the percent million going XQ of the of course was think

and the So in how cadence, the the kind about addition growth of of value as well terms you upticks? to as, trend think both do relative customer

Tom vonReichbauer

Julien. sure. Yes, Thanks

by So the on approximately X%, total the the first of approximately volume at generated range points, that increased value midpoint on guidance X%. guidance increased we by

midpoint install throughout seeing ramp acquisition, in as $XXX we has reaffirmed exit with branch delivery we continued opportunity of So course in rate improvements, of you synergy then the up process bump as obviously year. value, of time timing create drag us costs costs front costs, in of mix lot And range projects bit results we the result further costs as QX in volume materialize. sales tighten that QX, in higher we if right we're slightly you volume. does as the leverage to the had reductions the that if our more some of you here the accelerating do QX, improvements installs. we the see this QX, just we're these to continue investment mix of now, and and you of down incremental where also the a are growth seeing beginning G&A so opportunity on beginning guidance, that of in the higher a are of that battery look down, market in year some can sales Throughout that But there higher ratio expect At eligible spite to ITC kind of are a to XX% at at million a a seeing year, XXXX. the coming had the footprint of a the recognition of cycle look operating of physical and and in than of well as

that will of here drag cash, I of we the think I some that So first cash cash. on synergies call year, throughout in now commentary year million and the a you which earlier, the see as about a realized. the bit continued of onetime that integration mentioned but the definition expenses And drag half convert under are is ramp of we and on then inclusive created $XX new the of had from cap some NEA NEA think the in items

Julien Dumoulin-Smith

of piece really right, takes have current All on you the end fair the continue value into levers, at then whether that's about net think sidestep customer about to you. in right, year onwards. of beyond the going I other from are terms the the the think you day, the costs about got sort again want the conversation, various an value of and may, creation panel storage solar little but And deflation you down, et if I current What advantages, perhaps bit when returns points. puts Thank do XXXX perspective. creation thinking side you How NEM beyond offsets pressure think when might cetera. here, a you perhaps DevCo year? the obviously, scale of But metering of

Lynn Jurich

at We’ll question. Great positive. Thanks. look extremely

up. have the services end markets grid opening the on So top you here,

we represents value. to represented resources, the services as if And me, we're about add those source about to able shows the and And demands the instantly XX%. country further which but contracts the in you and of for geographies, that will outages at battery the our our just of you still in will just Texas, grid battery California monetize battery. one. for the battery moved actually newer additional XX% become were continue of of another thought programs the in pipeline around pipeline I the the excuse battery valuable, right increasingly about we So interest adoption drive out markets now, our so grid feeling services to on power look early are intermittent and the our have story dispatching to the like from capacity really people revenue where resiliency – And out renewable the you have the XX% also of that's of the to innings have think pain the very consumer adding

You is also have a electrification and and of the one. huge the vehicles house, this further

to in have we the so the the just home system you electrifying costs of So you increases amount per so increase most house. not your massive business for need of lot in home, that if profitable our really which size, is because power are potential per that by a the system. vehicles us, one KW, your your And, twice

home, seeing and then really that into energy to moving from really goals. to help the what really but actually just a solar – transition can broader that build hit also stable to for you're electrification carbon So both help vision only I grid think lead the for what grid is company the a a our company offers we're this

are trends going the that. think, economics majority look of to forward are level because the unit I different going tailwinds. And overwhelming of the So

Julien Dumoulin-Smith

you. Excellent. Well, it. Got thank

Lynn Jurich

Thanks.

Operator

the Barclays. of with your Sutton Moses Your Please from with proceed comes question. next question line

Moses Sutton

you're California PPA in seems my year-to-date. leased origination California looking pricing. every on strengths, beating simply drive and Thanks specifically questions the seismically for this rates on about MTB like in helping rising utility if average Is taking what Wondering at capturing and metric. X% congrats realized

Lynn Jurich

that for question. Thanks

a in so not California, from benefit, pricing we be that'll coming it's not that. long-term changed have While

Moses Sutton

and Maybe like provide high really solar about on thinking which to you're pushing at rates versus States and could actually then you're the Florida, at update are economics And deeper that you're Great. starting States where looking and emerge new you an Texas areas yet? into. any not growth utility markets

Lynn Jurich

Sure.

are right XX think the Puerto States is for places lot some really to I about note of poised think guidance that as Texas, on about predicated of now, in deliver we current is well. us a I the I growth we're are the geographic current But excited expansion. Rico the would think, I some Florida, growth rate and not

see will more prices you power for year. whereas think derivers our value enabling said And you geographic return particularly to I us higher, grid that, are are a expansion this getting equipment bigger And the this powerful. that batteries economical. system vehicles addition sizes costs again, appeal even the that more then electric of the is are makes that much of in like decreasing, more much

will new geographies we last lot expectations of So a again, expand did this we on are growth doing that. and not reliant year do into we be the not that. year But

Moses Sutton

That's one is very I'll maybe And one, Ed. jump the maybe queue, last one for this in helpful.

to ABS to now in since came on maybe next two one market It's assets. timing? quarters? great X.X something an came recently Could expect to market with we Any assets you You with years the on update legacy with been Vivint RUN terms.

Ed Fenster

used did to number drawn to delayed look great markets of be facilities delayed in during draw various that periodically We raised Hi, ultimately than access and different to a over the time were during risk, obviously formats. designed actually be they period. different the things mitigate had that credit question. as way a financing pandemic And

market, the will funds occur. to recently, in avail when of the securitization transaction number as we a for have is to But at deploying originated public any haven't assets refinancing So we statements obviously delineation this next ourselves year. to of obviously the will again of are develop legacy made Sunrun And continue and do no but the opportunities between certainly there starting assets. moment number a that –

Moses Sutton

helpful. Very Great. Thanks.

Lynn Jurich

you. Thank

Operator

from line with question. comes Please Your next question of proceed Stephen Stanley. with Byrd the Morgan your

Stephen Byrd

to I update to this, Hi about for the and wanted about congratulations results EV you Lynn, on the opportunity talk able mean, over to to time terms And of bit need of it be pretty more a if me mentioned of you slides pursue I you that wonder quite value spoken But very very sort talk this, just this have the it. about home on you I exciting focus bit well additional all meaningful. the period excellent a as the customers, little which great charging. and might in be could you growth. capabilities very describing shareholders. to electrification as as strikes as the would unfold? good little wanted on this a just talk about a maybe logical, more could couple how to

Lynn Jurich

Sure.

increase system house size, in note. drive quite The quickly to the the in really incremental really repeat power larger I again, are I can't think emphasize, dimensions which valuable. needed one there is hours a kilowatt those that to just of couple how can

number think one. that's I So

gives think a I moment you homeowner. also for also the it of – consideration

solar, of like it's around that. popular, they the want it's very there but an people conversion, now it, one our So is business is why a often most of urgency issues not

to also And so, that a it the what double and purchase care in of take powered where you create can want then and electric makes installation make car the investment clean the can you company by the bill have to of know to the electric solar, the going charger the particularly vehicle energy. be moment solar sense you're it then

that EBs. in our certainly should an success investing rate think that parallel business development in it's in that market area So so we're efforts the do around I and growth

but sense care one, on have installation same I solar again, at to the we we're tuned we the panels. that – makes install the stay charging and footprint, us for that it just it because really, excited So really about, of time take

Stephen Byrd

them buys to That's great. a that up your when EV, consumer consider with of Lynn. following take that's at their renewable just providing And a the on much energy point that energy. point mean, for logical an very the sale, maybe point I – I

of sort that that Sunrun is it at point of of just important, fairly strikes or as fair me So be… could particular awareness sort

Lynn Jurich

resiliency then, That’s much And to absolutely is effect it as a that well. fair. becomes follow-on also what – more important

And about, so, to see we're in Sunrun Texas, outages to multi-day outages. starting we're but starting a point and we see that with is I think California will continue this to talk

the and to is also for think electric the vehicles, encourage reason that that, through And to another consumers peak battery power if to you're so, especially, the to the potential convert them I over. exposed demand solar plus of to interest that,

Stephen Byrd

And is it quite – auto strikes a and can offer them, I just a their you're overlap not you to there a I you between guess is with of not mean, bit value that I auto Yes. positive me there customers. guess OEMs. competing – that

Lynn Jurich

Exactly.

Stephen Byrd

Yes.

all I that’s have. Okay,

Lynn Jurich

Thank you.

Stephen Byrd

you. Thank

Operator

Energy. proceed next Kashy Simmons question line of comes Harrison Your your from with Please with question.

Kashy Harrison

questions. for I the the the congrats on raise. Good Thanks taking beat accrued and And afternoon.

net cash just years. quite recourse at balance So of grown your looking over debt, past it's the several considerably

to shareholders? thinking that before what about Just looking for using of cash a us then start and maybe you're you might maybe wondering, educate exploring doing for be there something that cash, you excess with level cash on for target create is value net any creative just

Ed Fenster

is this Ed. So

year to So one and this great that And on working category. been question. falls problem into excellent that's a we've definitely it's the have

asset about the most which general to or think credit to market, of or capital then on think So out to opportunity maybe have which that, figure mentioned growth. results above run to arrangements that at is as then new then we should right communicate the more talk call, rate are finance and as finish we And of particular looking I existing we're reevaluate refinance exercise we allocation what replace. strategy. future I our our way the do we'll get also rid And

I that want return I'd a that moment at business in right no to goal. now at then we the plans we of to the think, to that. right – But down immediate believe we I like to think want that buyback the good we allocators, after do figure short we the structure capital nail being have for is capital achieve out have had past, what story and have program, to the reputation turn we share we

So more probably stay we'll sharing tuned and in coming the quarters. be

Kashy Harrison

for And solar. cost surrounds is resi for great. question next Thanks that. the That's my then structure

Looking the forward. maybe you And see of seems for a cost to feels unsustainable. post reduction but maybe I high. still metering the at a sense opportunity all And which like rapid more is could you we structure even about model possible, how that crucial business think cost know that opportunities and us biggest are to cost you value moving are external the that, so acquisition that's energy talk about for costs some the if you that current timeline form its you talked pretty reduction it in can net attack give customer provide, of of some increase opportunities intend the because

Lynn Jurich

Great Yes. question.

dynamic high So seeing the a there. commission that things one in a cost. couple more costs, lifetime That’s acquisition support of is a you're customer value

we'd proposition look value can table, you customer, pretty lower geographies acquisition where point next to to the and dollar a in incremental next the that weaker that that's little market maybe is, spend consumer, didn't some the we support acquire the a a costs. is materially money you and be that on see to reason leaving if proof – force, if actually actually So

variable that. highly it's on So based

unlikely reduce because we something is not us. – So that's to and we in again to which the feature to just really would that incremental want customer valuable one, near-term would makes target, it

and operating tightening, experience. our get still, selling close still Now, more and of rates out sort we're our building don't online expanding virtual to we're moving like improving me and and wrong, playbook

underway people of down, that decline short-term. I'm painful will to because opportunities the get an e-comm unlikely confident will will than and in forces, earlier Over will the benefit comfortable the electric time, are it's experience. comfortable see resiliency be all it market adoption. There and But I be materially those more to outages the So which tighten highlighted people, cut more because it. the of come, drive going we'll for think with initiatives batteries these I The category is get e-commerce through will vehicles. – increase more more of

the opportunity been And this local we've about costs these all soft are red is in And then area, of too biggest and around variations, here including around construction So the trends that for assets. time talking tape positive long a spending the forward. those going it's lot that up about of permit you're variations, per on converting, code a customer, don't end delays cumbersome CAC because [Technical $X,XXX money Difficulty] because customers a at that process.

to this attention working in the from a bureaucracy streamline instant recent a going around soft we're million biggest administration, ton the program proposal bill, Ed We're eliminate the as fund number a building trial on of that Solar And it's Department getting have the we're infrastructure for the year now, in that's way every that, is permitting, finally industry, all of – Energy a help there to reductions. an shared. the cost right to solar. to called So app is $XX software

there markets. will a And the as it if we at markets, be other customer than and interconnection, of how in is lower so then point is acquisition look again, that where proof cost dramatically meaningful, instantaneous permitting

system much locally, investment people make think yet So more cost to and really more could, the of that's EVs our an the and Eastern I had to of to I worth infrastructure is, about. in we're off is EVs going again, strain batteries back – rooftops wanted go that that that that discussing, existing is the on more grid benefit think we're will I initiative distribution of from will then is if I and that make valuable. left served don't appreciate one solar with which using excited And I really be effectively that the amount it And batteries. have

electrification that'll from vehicles. So another benefit be the of

Kashy Harrison

that. much one. I Have That's great color. really a for appreciate it. good so Thanks

Lynn Jurich

Thanks.

Operator

Your ISI. question. from with your of proceed James next question with West Please comes Evercore line

James West

afternoon, good recognition that's something tightness recent of like solar? costs. in drive outside and there up out and this, control any Is Hi, housing driven just everyone. things acceleration fear of driving are that have market Curious if the inflation that there's perhaps electricity growth, of brand this or issues toward your the pure

Lynn Jurich

there's believe of don't that these any sort rates. driving growth effect I short-term

I anything, a accelerating in sustainable just think if it's way.

James West

how Do do go-to-market you sense. EVs about you your important strongest? about And link think guys home will How you've then be your growth around and business. you Lynn, for that with thinking Okay. where strategy EV kind the the for is Makes – are driven that? your are force? your sales of obviously, And how

Lynn Jurich

Great taking just existing broad business. of question. a Again, distribution, in pretty we right now share ton a our and have are

to on targets sustain accelerated even these of so so the hit to is makes sense. EVs kind because but growth what cross-selling counting here again, growth so And – this or are not we but opportunity much

us to link I fractures think that offer you with to are working win-wins. up will programs see

player. So homes sort again, that will reach large advantages that be such Sunrun to other that makes of but because are meet we the tuned with footprint choose with that it and need. cross-sell at they reach a on geographic OEMs also when moment that is And a to scale has stay power we're enticed types the additional that, of solar way those for sense broad customers our one is a for partnerships appealing nationwide of to have their more

James West

Lynn. That's clear. Thanks, very

Lynn Jurich

you. Thank

Operator

comes Morgan. question. with Strouse from of line proceed question J.P. Your Mark Please with the your next

Mark Strouse

for afternoon. you taking Good very our question. Thank much

record seeing increase you with broad constraints larger such you kind is smaller looking out look Sunrun? are or particular that as to you supply do a you that kind bit volume strengthen installer it's guidance, installers see an the acceleration that a the within based that channels probably to the I are as mean, well follow-up has that you're it's channel? to your of you of is starting your in a accelerated, And of XQ. some seeing when think across understand had mentioned are early, particularly related but industry, You And one I that fairly in mom-and-pop in the to that partner

Lynn Jurich

Great questions, Mark.

We business at Home if direct-to-home to are deliver homes online Depot, our our different our the retail will seeing and business, in partner board, business avenues our all across market our so low-income business, new stores, our our growth business, Costco you channel look the growth. around

we're sort creating the board. across really And we're all has that the the I for about to growth we're that been being consumer area in of brands it's different around point us. around the those local installers, mind and think So share that places. your a pretty And excited creating

in our quarter result, which is look – quarter. typically at of lowest given And saw record partner in our the seasonally business the weather. QX you we If QX year that is typically a

all So across quarters historically.

financing growth offer are our served the advantages installer can And we So we market them. yes, brand that we believe our there. tech, strong seeing and we uniquely with that

Mark Strouse

you much. sense. right. All Makes very Thank

Lynn Jurich

Thank you.

Operator

Your with question. proceed next Suisse. Weinstein Michael question Please comes from line Credit your of with

Maheep Mandloi

Mike. for is this on the Maheep questions. behalf Hey, of Thanks taking

spoke make on looking how upfront. guidance one, like about NPV First just cost sure about half? the just but in customer, number. given the should seems Just second range, Tom, the wanted to decline QX the $X,XXX at per in annual think the we know to understand it the customer want in right potential I But you just higher we got

Tom vonReichbauer

question. great Yes,

just per customer. we QX, $X,XXX in were of shy So

and $XXX not $X,XXX to If range of full a My million the not year and guide of there to. of you're that's amount here customer mix adjusting for a midpoint you in lease on doing volumes cash range. a the some and more guidance we – suspicion which on it take is get basis, the is loan the it doing number what you in

Maheep Mandloi

next this you or make we release, should just how I channel business sense. maybe about you would press split think the year that year. the channel think that the going the about year-over-year growing so Yes, then and could And channel talk into strategy, of mix spoke about in-house later on business?

Lynn Jurich

we route our is Great in that geography question. path the What to we look at with way really consumers. geography reach do to and best market

Sunrun it to sales of versus partner sales. we don't mix a manage So channel

turned but how quarter, on manage mix we'll we give it don't there. out each color a So to

guide don't it. to it or disclose we So

Maheep Mandloi

All then me. jump right. just in from queue. one And the last And back I’ll

or any the higher or higher the year this next Just something higher who the cost acquisition costs? manageable enough manage cost that for potential costs later increase they or on far contracts end cost, extent, the which to customer of year, any or it absorbs to hardware in modules is But the down you that chain year, components. of it the absorb passes does said have impact have inventory this supply you to enough so and other

Tom vonReichbauer

we've continue trends that we term, Yes, places so inventory increase orders there. products positioned lot place, you actually, supply where hand to equipment, see have contracts, given levels this market, think like as general And year, to say, really we you'll well that'll on deflationary seen in competition the longer buffered there. we purchase back I new I think of on well get feel batteries, into bring the that of a be manufacturers to

think and you'll across of see inverters a similar other components. handful stories I

to continue be in and time. and this we'll the local wider environment will distributed to client the think I utility residential wedge So economic cost get continue over solar of between

buffer to there we're if well terms note pricing concerned of a feel of positioned, and offset, given small there that needed. opportunity significant have amount nothing to in we pretty rates of So about, rising the particularly power utility

Maheep Mandloi

All Got thanks for you. right, question. taking the

Operator

next Please of Your proceed line with Capital Shen your question. Philip from question ROTH Partners. with comes the

Philip Shen

for everyone. Hi, my taking questions. Thanks

some channel you've the maybe subscriber subscriber incremental exclusives that structured, color how would line dealers, payments, expect you lower or – for to payments, do in some Thanks. to with they new wondering helpful? structure when I from exclusives. some the color think be about net partners, ones those added if value, your the those net could large dealers are you are how and exclusive add those megawatts relative many highlighted on are those how was higher be long How value? payments So the you did The you first that. in provide one is you on the new

Lynn Jurich

Thanks, great question.

partner our mentioned, business we exclusive. we've channel As fairly kept

strategy. is So our XX/XX on focus to strategy is

high competitive focus customer importantly. quality experience, market most the in players So have routes larger and to on regional to routes market their that communities unique and

us that we've kept tight fairly and that's so And served well.

And the was so numbers said grew we quarter, those what we in by XX%.

avoid that And the we – grow could much strike are we deliver in to going economics, material disciplined it targets faster, customer quite those we but in who than demand again, you consistency So have channel sort for different much and channels order could really, conflict. great there's for results manage quality changes something We when our bring the partners are And and to unique that level an customer managing of across that. our yes, any the any maintaining more certainly, it thresholds forward. unit in relationships, wouldn't of and really reaching high network expect base. any could economics we at incremental across unit-level been, experience

Philip Shen

or to Okay. chargers Thanks, now, while Am a correctly? Lynn. somebody the talked a for characterizing or of And you then And an of opportunity and of opportunity near-term. but point at perhaps the that very both be to there's then or utility EV talked auto the near-term, volumes I just staying an and that we've a strike for with company, solar drive clear about, sale about ilk, know EV. them, it EV maybe deal I tuned, sounds like combination maybe a to perhaps

color be sense any nice. more would any So that Thanks. a on you share perhaps of can that

Lynn Jurich

I'm sorry. color what? the point, more Phil, what was on last

Philip Shen

Lynn. Thank Just if any you, more could be fantastic. color share would you

Lynn Jurich

Okay.

just asset utilities open portable revenue better to stream resiliency. increasingly clean we on battery and service cheaper believe a comment, two-pronged electricity, with direct with for here have is, approach our a distributed we I benefit and an a into make those, think we're utility think and the I – home provide go the plug be them electricity can a on enable And to entire. we to for with markets to One market customers for In – we strategy. parallel, and and work electricity try that the go-to-market that with superior proposition. trying possible value that to we're energy as compete get another as we

on grid slow can However, those like change we of these, programs, build said, incumbent – those working quite be you these we've those. been many the industry to on And things. and have services to

for waiting we're that. so not And

to that, the think load-serving services this through utilities way that a in but entities the – other have get build grid we're the recognize to increasingly, to us the enable is This we going we the other So structures market place. I okay, and programs. capacity We're assets to and is And place. participate need.

And in so agreements the you the programs with what that's some and through California, CCAs our bilateral utilities. see other with of

So building, to it's they're we lot think come. burn head benefits start decades have the but and those a that'll a we invest are and a in place slow reap to where continuing of

again, a adopt intuitive and solar to you relationship quite side, it's time all for to On because are is correct, the accretive cross-selling natural EV parties. there such customers

standpoint. those work business to efforts continuing are a from we So development

Philip Shen

Okay. and Thanks, the on the Congrats results Lynn. guidance.

Lynn Jurich

you. thank Thanks Phil. Great,

Operator

your Please Your the Richardson line Tristan next question from of with with comes Truist Securities. question. proceed

Tristan Richardson

Hi. the Appreciate guys. Good today. comments all afternoon,

in of proposition heard is on of storage big see seems mandatory though, product. installer one on my at instituting sort direction incidents storage in out almost we've all? do there anecdotal as one of where a a end of the bundling That value Certainly, one solar Just I the a there's customer. and but an guess adoption. plus installer market moving that bit you one-off nature, obvious

Lynn Jurich

of to these over going the based most the a out will the power actually come way deliver reach to really that and is from proven effective smooth I storage be down believe renewable solar to paired – some come batteries intermittency to peaking system. and because that all big help time, that's with battery aggregating question. be Great do prices effectively it will will all

value do a for grid I capacity There to will delivering believe is. be So independent large markets to of and consumer that the market. that will in prop in to those that value what battery those enough develop be the

of of Tesla's I again, terms purity think announcement, the announcement. In like the I

is that industry going. think I is where the

not customer reality the for is have today a appropriate it's battery. every of However, to

our home of of the And of many different. a just nature in does case require because is physical business realities opportunity If that are have with of and the right not virtual places. resilient isn't to is you plant, make at – not power the it homes versus you one there sense a it you're in grid now. monetize place And battery the customization a a that bit may where this may the

demands. attack And we serve more the market process to we've leader can emerged project the that with residential a plus technology that customization that differentiated, we why – decade so is over one as that need more with we've built customized way a a

Tristan Richardson

Appreciate sense. lot all makes very That it. you of a much. Thank

Lynn Jurich

Thank you.

Operator

next Your question. from your Rusch with Oppenheimer. proceed question Colin with Please comes of line

Colin Rusch

so Thanks building lot to what the you speak you're seems on now? It opportunity and factors much, there's capacity. like an right key growth gating awful guys. Could of

down wondering at I'm point? you what's So slowing this

Lynn Jurich

Well, we think we're going pretty fast.

the there's think business – the I one, we're physical a of and that. just reality

not one that have is business as that think well. to of channel to can we concern really partner I continue the be the even expand a – ways

think a can operating under I pretty we about our and to that's also building sales way force increase partner and So have we're reach is unique market. And the the we're penetrated. us still some efficiencies where that infrastructure business own and get that's there market scale avenues and really

So that's there. strategy been you're our right. But

many years year, said can the for we've industry this annual decade compounded a without acceleration needing for more why And to with reaching an with and this unit is penetration. reasonable there's I've home the more growth electrification the no deliver value think that and XX% reason I that growth a faster. And that electricity a is rate in and two discussed times particularly the much shouldn't be too. increasing

but footprint. capacity additional of the home, the and also just So wallet it's share units just it's not the only energy

not sustainably think to remember that, course there's is on opportunities I this have and you business. still of So physical a a those dimensions software It's and both business.

Colin Rusch

you potential scale are understood. and assets? you internal with utilities No, the again And partners really utility around Yes. to around that guys on And additional color at resiliency can thanks targets that's as evolving for deployment for the ROE distributed looking the how for speak look partnering partners.

Lynn Jurich

So on those your question? our is returns types of programs

Colin Rusch

forward No, move you incremental it no. next you the few into how ROE think programs years? over targeted your changing Is about as

Lynn Jurich

out the so more one of invested. ROE here. systems That's we're infinite now, Well, our cash has we've pulling cash business. you can Ed, really than of But highlights out, we financial because more an right really in pulled actually of chime have

Colin Rusch

offline, I'll take much. guys. right, it Thanks All so

Lynn Jurich

Okay.

Operator

question next with Karp the line Please of your proceed KeyBanc. from comes Sophie with question. Your

Sophie Karp

afternoon. quarter good Hi, thank in on and me squeezing Congrats you the here. for

you current sort a to question cash you and sense and a metric. also scale occur you. your forward of I basis? guys make highlighted cash if may, to rapidly on revenue discuss in capital the And maybe to events Would such? could that with in if this on you go-forward context use addition and flows the the that of also that Just flows, growing structure it moving how bridge now think about is Thank

Ed Fenster

Sophie, it's That's a question. Hey, great Ed.

I think metric mature credit growing the number maturity of talking reasons about Tom significantly facilities, doesn't to clean that refinance costs. one that declining the is of recurring their of due customer contract life it's been proactively quarter-to-quarter. them has that the a our we'll revenue of either as capital or A know inside you inside vary

we existing from assets on forecast cash year-to-year timeline transactions. depends and And execute on which flow so from varies the the significantly those

from over those linear existing proceeds from cash expect and and flows do But clean, not we simple, distributions So it's assets from time. refinancing our a those growth significant assets assets.

again, asset over through install time a when first review time Lynn the do they business, to in we're we're in pay realized non-recourse into also we later balance flow analysis we from cost the and growth now we'll the and G&A. to have all and either margins to see see company expect way, And the development of the On or right increasing if how there. receiving systems, volumes, our expect with we well. that But exactly service, just when that cash finance mentioned, is the proceeds as the there increasing over the on go going as customers, of period, of install all we – much of exceed average, our side steady nice,

cash we're rate able a how we'll periodic that cash views sort at I over do about probably more the able to buttoned I described, that of multi-year talk giving flow we'll is So be that one up cleanly soon, quarterly certain to number think period a particularly of on time. more but hopefully more than once flow compounds project be rather

Sophie Karp

business will helpful P&L line Yes, you. if sizable of grow a segment color. plant I this enough may on to the any real power quick, separate that's Do be one you And the last anticipate super to kind may. item time be Thank soon? virtual separate or

Lynn Jurich

Great not question. I would soon. say anytime

booked million. booked, about Sophie, we that $XX have under or the again, near it's look at value contracts you the are

while not meaningful be I to a So these develop. they that to think again, anytime break But it take it's soon bills, enough it'll up.

of financial think the benefit I the of benefit other looking relationship about independent – other of it's right the now customer contribution incremental the which grid $X,XXX value. that services of maybe, what per

with, of value is more moves – really again, other on companies with a it doing of The customer. most provides And the the just to the the that winner technical have market differentiates to you it capabilities market that the take network effects.

in of bigger actual a than near-term. driver that be off come the So will that in many financial revenues cases programs the

Sophie Karp

the Perfect. you Appreciate comments. so Thank much.

Lynn Jurich

Sophie. Thanks

Operator

And of this does end we today's conference. gentlemen, the reached question-and-answer and session. Ladies have the conclude

your disconnect at you lines You for your Thank may time. this all participation.

Lynn Jurich

you. robust Appreciate it. very discussion. A Thank

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