Sunnova Energy International (NOVA) 27 Apr 232023 Q1 Earnings call transcript

Company Profile

Participants

Rodney McMahan	VP of IR
William Berger	Chairman and CEO
Robert Lane	EVP and CFO
Philip Shen	ROTH
Maheep Mandloi	Credit Suisse
Joseph Osha	Guggenheim
Mark Strouse	JPMorgan
Kasope Harrison	Piper Sandler
Sophie Karp	KeyBanc
Ben Kallo	Baird
Pavel Molchanov	Raymond James
Ameet Thakkar	BMO Capital
Sean Morgan	Evercore
Corinne Blanchard	Deutsche Bank
Andrew Percoco	Morgan Stanley

Call transcript

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Operator

Good morning, and welcome to Sunnova's First Quarter 2023 Earnings Conference Call. Today's call is being recorded and we have allocated an hour for prepared remarks and question and answer.

At this time, I would like to turn the conference over to Rodney McMahan, Vice President, Investor Relations at Sunnova. Thank you. Please go ahead.

Rodney McMahan

operator. you, Thank

press please regarding forward-looking begin, and today's we these documents presentation, call that XX-K. statements. XXXX Before see forward-looking factors Please that note that are make those earnings slide our statements described additional risks and subject will our are Form information we for in during release, those to uncertainties affect various may

well of cautionary as non-GAAP today's will earnings call. measures Please our reference presentation the to reconciliations we for as Also, release during appendix the to press the disclosures. certain refer GAAP non-GAAP appropriate and

On the Executive Chief Vice John Sunnova's Lane, Executive Chief and Chairman Financial Officer. call and today are President Robert Officer; and Berger,

now turn call will John. the to I over

William Berger

Good and morning, us. thank you joining for

as services, energy, more described the attributed month can service relative energy our to on to persisted previous of demand ability calls, and for customers and demand of April. to robust centralized balance affordable monopolies. into earnings exceptional power throughout be the customer higher our first reliability, has the quarter the strong our This The offer

a manage energy demand our to valued Sunnova providing seamless our service Sunnova Sunnova Business, utilizing Community platform, Home, our Adaptive as to responsive and superior We and and Adaptive commitment service reliable to apart sets experiences. customers, technologies which powers cutting-edge industry energy Our supply leaders. efficiently us provide software through Sunnova Adaptive service

way are the we Through Center, energy delivered, our consumed, new Operations National serviced. reimagining is and Command

maximum these real-time allowing ensure efficiency to solar storage manage, plus give to us reliability. Our and industry-leading optimize systems and service data for and us solar the capabilities monitor we systems

experienced improving our logistics focused meet robust capability our team, managed for business. also service professionally on and We demand bolstering repair to the our and service highly are while

forward energy drives price each ability a towards Our powering unique in Command deliver meets energy better at independence. that progress is of customer significant to and better service a our the step a Center needs

deliver our exceptional revenue, to and continue enhancing while we driving our loss customers brand. shareholders, value Quarter-over-quarter, and to reducing capital, increased of

built strive to ensure our model price our these reliability We flows objectives, and energy-as-a-service around point have business that power the at customers the and expect. we

to dedication of to is key customer operational, we in the our and our service peers, a will from differentiator our to we base exceptional growing and energy Our and invest improve quality to logistical service time response providing continue provide. technological, the capabilities

especially to and Indeed, connected customers proud of starting and utilities, in customers invested who have offer their necessity our a monopoly nationwide. as In rates through contrast resilient, savings are reliable, even grid, greater outdated service. raise systems solar question to more for sustainable staying homes we the battery utilities the unreliable to are their and energy centralized to the

lower We quarter. call, than On by loan for $XX with of first Slide summary collect metrics On a we in the capture through increased margins, financial our our costs, we our XXXX $XX that is year on Services Repair fourth quarter that outperformance EBITDA XX% the on Sunnova together expected loans or million exceeded prepayments. million budgeted and adjusted we solar the full to quarter. noted of first target gross interest operating and X principal approximately

power the next Slide Sunnova's over generation growth months. X total penetration, inflow XX cash in customers, and showcases the solar management, continued expected under battery

customer year. count hours quarter to the growth to management and into power XXXX to generation megawatt March compared customers During a the as total XX, XXX,XXX first brought total first rate gigawatts quarter, service, we customer under X.XX and under represented solar brought our last same of XXX. additions which These quarter to management our placed customer XX,XXX XX%

Repair Services who customer new in homes service customers and a from business Protect purchased our have only through Included originated or our Sunnova Sunnova our sale customers cash either count Plan. are benefited

this remaining per EBITDA contract XX customer expect over annually to years. generate an life customer average adjusted We of of $X,XXX approximately class

and additions customer us the guidance XX,XXX customer to to confidence gives strong increase needed robust midpoint. year start Our by visibility additions the customer for coupled XXXX with our customers the both continued at origination

our to and March inclusive battery performed reached of retrofits over XX, XX.X% Additionally, as penetration XXXX, life-to-date. continues rate of have battery X,XXX grow we

inflows. life Finally, and our we updated have customer contract expected cash

the XXXX. those contracts As our and equals XXXX, increase life of XX, average an on from the customer expected XX $XXX cash million, months next of XX.X from March increased customers contract March XX, years remaining over weighted to inflows XX%

financial who to will now Rob, our hand call will through walk you the highlights. I over

Robert Lane

Thank you, John.

Slide principal from on XXXX was Revenues the sales; we solar and of $XX.X with of revenue inventory the will for interest on includes quarter year-over-year X, that revenues in financial increase million a XXX% first quarter loans. collect EBITDA XX% our included a number, in in our improvement you increase increase first XX% adjusted This the revenue Starting once and see the together again results. excluding

On Sunnova capital. healthy. X, Slide recently equity to tax we $XXX market in to far XXXX, strengthen million access see its equity can steps took added additional as funds remains you in tax the Thus the

may as to tax on equity equity the outcome guidance, be accretive we ITC this IRS we some adders. instances plan utilizing following continue it partnerships, than in tax we credit guidance investment the more tax As in transferability ultimately as of leaving Depending transferring partnership. credit closely are believe well on a

million. We by $XXX expanded warehouse our capacity

the This long of warehouse relationships diversifying existing capacity successfully banks by our have to bringing increasing growth. and our our track capital partners meet We record includes expanding into a fold. new

inventory allows to revolving borrow to pivot against a of credit dealers. our eligible facility $XX thereby into receivable, value us working position. We million eligible inventory accounts the and our This inventory to selling facility secured to improving support entered capital

of of loans. detail market from a below despite conditional that securitization, expectations will John indicator more call. in securitization Apollo and Loan We than the we U.S. certain in loans TPO the Suisse stabilizing TPO announced higher affiliate that This weighted priced to our than Credit of for better a by pricing yield And $XXX the Office, Energy another We and is industry. Programs of commitment Department improvement SP. commitments discuss the November later assignment our cost which Atlas issued is potentially capital million completed typically loan average

million in as Included $XXX both upon our and XX, liquidity well of of facilities. equity as collateralized credit we available tax March unrestricted our as warehouse liquidity and from cash, XXXX, restricted could draw are the our

as assets XX, of this available equaled collateralized $XXX Given XXXX, available unencumbered million. liquidity March

of we of equity any the further warehouses Combined, $XXX just the funds. expansions year. in closures, priced, funds, subject that, including available additional collateral, our had Beyond the $XXX or warehouse open available these liquidity tax securitization exclusive of interest tax rate and hedges, equity represent capacity over during million in to additional money million one amounts

trailing you XXXX, X, of see a based XXX as an on March of fully a March this XX, XX.X% since months. basis Slide On as quarter-to-date burdened our unlevered points XX, March will to XX% of basis, return XX, increase on On increase return origination XX XXXX, new equaled XXXX.

further unlevered We increases our quarters. over next the few return forecasting are fully burdened to

cost unlevered points to trailing XX while for weighted as of spread average debt increased fully XXX basis above return unchanged. increased remained the implied our burdened our months The

is that implied points continues to Our moving today XXX markets back suggest above XXX increased points. has the spread towards to capital current the and view basis of basis

we value, contracted growth NCCV. reflects X% seen compared $X.X the net was At or to have NCCV increase discount X strong in customer billion, of Slide March XX, our an XXXX. a XX% rate,

share. approximately per per Our XXXX equates customer and March rate $XX.XX to XX, discount $X,XXX NCCV at this

the through XX as provide growth plan, XX Slides guidance well our liquidity and forecast XXXX Triple. Triple-Double as major metric our

As There additions by to other continued for midpoint, customers between XXXX guidance year strong for XXXX increasing earlier, the XX,XXX our guidance start no are guidance at John our for growth the customers customer we have we demand given changes XXX,XXX services, are metrics. to bringing updated our noted XXX,XXX range and experienced to our additions. the the

captured of principal XX% solar we expected on together We the and the first XX%. adjusted collect in our above XXXX quarter to loans interest our XX% EBITDA with

metric of this the quarter. combined capture financial or As forecasted, an XX% additional we expect second $XXX previously to in million

As with and certainly financial elected guidance our remain to there but maintain we upside financial have is our potential ranges. metrics, customer additions, to our conservative

XXXX, collect of that as XX, targeted interest principal total of and expect respectively. our customer and existing XXXX over day, on the of solar to loans March customers of through As mid-point same was we revenue XX% in locked

I back will call over now turn the to John.

William Berger

Thanks, Rob.

our ways but growth Sunnova our not continues finding only sheet. and fuel balance by our to strong provide to innovate to new maintain also service great to customers,

loans originated loan up advancement Hestia. solar billion Project is Loan Programs Office the Sunnova U.S. billion commitment loan a provide Our under $X.X $X to to recently a channel conditional guarantee, latest to up XX% by Department of financing which support equates to the of to Energy an of partial new guarantee by announced named

Adaptive with project, Sentient. to access loans loan Sunnova's support would software, through by with demand cash enabling by that provide guarantee, increased solar, Sunnova's If DOE the customers associated other service communities purpose-built to would loans. storage, finance that grid their issued, technologies partially include services and choose energy services those Home supported or the flows indirectly guaranteeing This the Sunnova response, customers' guarantee that DOE and Sunnova individuals disadvantaged Sunnova and utilize aggregation,

millions of billion will of hundreds our guarantee capital, in the originations, anticipate $X savings. cost loan billion to average up generate in $X to reduce We of interest support dollars weighted and

is commitment energy, support to rates improve expected senior clean and grid conditional reliability, bonds. on to ratings The enhance our DOE's advance and access

investors realize would uplift financing investment grade and issuance strategy. spreads expected to introduce us the with to our long-term new this credit Importantly, allow commensurate

the DOE XXXX. We the to second quarter expect in close with transaction the of

was quarter first The strong of a XXXX quarter.

our continues market demonstrated increases addressable by to in and to market. superior total be our execution gains as Our share continued

profitable we to strong, XXXX look XXXX. Thus, healthy are forward energy-as-a-service guidance business targets or growth, increasingly eagerly our confident meet growth model and just price. in we a ability to Our any not exceed demonstrates at our

the questions. line that, operator, please for With open

Operator

from Instructions] question open. today Shen comes your Please our is first from Philip go ahead. ROTH. [Operator And Philip, line

Philip Shen

taking Thanks my guys. for Hi, questions.

And for be and like to what for points. your Can decline could a XXX talk other looks Thanks. one, module how down you mix? do head of capital First should come pricing modules to basis evolve? of equipment to how coming about your storage And that the and expect your go ahead? latest cost and this pricing pricing it you as much serve storage? rapid What is structure? inverter ahead for benefiting should SolarEdge-Enphase How tailwind has spreads down is cost

William Berger

deflationary a Yes. There our trend is industry. in general

is little gotten side ours, bit of the still software qualified more things labor highly harder get, available are a - have like We deflationary Technicians, but in becoming even much that's all a across to equipment is very much a the The to installers. definitely more way bit available. little from board cycle.

look at of out roughly into the ESS just to went for if our $X,XXX equipment markets, I were about major couple off. equipment quarter. an was example to then you one it about inverters prices of and look average $XX,XXX. And same here, stack ago, if of weeks consisting And go fourth pulled at unit. a panels, where X-kilowatt system so that And the it's about just a - here you an

So That's capital. of about that's about to cost basis it's equivalent - about XXX $XX,XXX. points of

significant to It's pretty a out dealers as helped help out obviously it's and It So has consumers. well. going already what's our started move.

kind And but Do essentially Do just they continue? have we're high-quality are very to also globally. war. competition lot U.S., we well. the as that that equipment out there There's - Absolutely. to we Europe in price expect a here seeing and amounts the intensify that not expect in partners of of it we

there's - we differences of gear. piece So depending amongst makes who all, on in quality what

we incentives are in EU, tailwind. a powerful think one better additional and is the folks online. coming But of with like this at IRA the And the other overall, global some than Some other. capacity the then is

a marketplace. about better missed we're see lot there. better that's equipment, as So we pricing really out something folks helpful think pretty good that to And feel to I really the have been being going

Philip Shen

how and in part Can my of mix on about could second John. the Thanks there you the you have inverters these the of that question days change year? coming Great. comment

William Berger

inverter But of is is as not I'd answer are say what we're seeing side? inroads battery. would battery seeing The A a some folks improve storage But to, they I their by - some also the Phil. mix a yes. product. we strong prefer not competitors is in additional out that there

differences of people think it's that some I in lot And but way, not. feel a products. there's

I - think we forth. from CEOs that some equipment their product heard talk and have friends you've of and about the so

if a folks And value so expect the - pretty mean margin. more I you of if up. the chain, it's especially right, with I you see lucrative, and look it's at do very part to more lucrative show that

giving seeing prefer in definitely some exact terms made out But out to. there. So I'd of the inroads breakout being not percentage, and we're

Philip Shen

Fair enough.

up here. for follow As my

governor exactly And is that announced through resi slow Puerto solar XX% the how finance to In system get of originations talk you plans terms Can of through in Rico, what could costs. and you as installation have we happening region? to some for others the evolve down year? the there? Might things us guys up

William Berger

Yes.

was San origination fact, is that back from came And Rico very if That's in works. Board market ago our Puerto in actually. just will. was I started in So seasonal. way And this years month. the boom XX Puerto it you XX-year very Juan. just the It's It's bust, meeting anniversary obviously, market our Rico, we

people had hosting and great Rico learned time, of we the Puerto a a appreciate So lot. the We greatly us. governor

there's Federal Puerto with the money. referring Project has of to mentioning you're Department Rico what Program of out expect the the Loan bit Hestia And we good which Energy finalize to prominently do and credit Office. broadening aperture, a deals when expected Obviously, we been is

program is Agency, are - the the of through say HUD there, from Rico. if funds near-term that the the DOE, some are now some it's right is I you would what And other is, are Federal And from Government for HUD. HUD capital in department some deploying Federal will, the local territory Puerto there in the

systems. very complete income about very me customers. But That giveaway low be clear for has been it's solar this, a of let

So applicable in certainly upper limited to it's and class not class. nature. very not it's middle And

lead gracious. So we an days and the system on my to very of I, with had He's meet have system getting and opportunity, the a power very focused would to world. energy governor island And actually Board couple that the he's ago. the a

and And indeed watch. competitors if we solar and a island a you his Sunnova and into of lot the activity, is obviously Cares amount put post-Maria our of was happening very under feel lot And as know, that storage. strongly that that and changes to the happen. going the about in leadership economic have

to free we waiting that idea. income a there drop the - him because to people need did the very are make see demand is something he those thought those they and encouraged get money that a And low it. that to and if good there programs point was accelerate got out And that

that see that I'm to figure the partnership turbocharge of Government convinced And Department here something better the wants in to Puerto Rico. can So we're more everybody - work a effective. looks others that we're much and that's have to out that Energy be pretty going Federal and of actually and we And how I governor and do the of what And with island and private-public committed more we the making happen. market. think the

- we little surge. a of term, expect short of and up out not So to to strongly, really year, move pretty strongly But this issue. that bit if actually later we're it an coming market

Philip Shen

much. on. Great. pass very I'll Thanks it

William Berger

you. Thank

Operator

comes Maheep, question from ahead. Credit your Maheep is next open. go from Please Suisse. The line Mandloi

Maheep Mandloi

here. nice in Good those Florida, a Thanks thing keep you talk curious being those the how seeing heavy the growth growth loan for industry should states one to morning. slowdown or a rates we But taking seeing here. going Arizona, Maybe Texas, others. think what And which states, interest customer in questions. states? something kind about about about, on pace you of just Could - There up? talked was in with are

William Berger

in true these are QX. where And The and those think it was I it Yes, of in of across has you even all mean would growth us, Year-over-year, in let's really up actually ago. the that. dealers of markets, Well, major The XXX% one is just eye-popping these I take TPO, XXX%. Florida been had It's year anybody. we market, skyrocketed. numbers just cases, growth for that's has was up Maheep. say for that jumped a all huge. over Yes, it first. and this interesting. that was multiples mentioned, each I where

a to shift seen So we've lease. decided

before on in as seeing climbing, were about XX-XX. - look you're think, particularly if forget, which origination overall to to to thing the other do, at, metric adders the But states, that just something get close about here. before lease the I I add you ITC issued and and to the our And it's put last to expect few we the out look that if still across XX% in. - there, you'd comparable go or able One rules We're XX-XX I works at accessory of weeks loan industry, we Maheep. into XX% be two to loans

When see We TPO see upsales Texas, lot a well. is Texas you a as of do growth strong We big at and lot in a as look the We up Texas. battery in such. well. jump pretty see of

And continue bullish And better the are very strong. so Arizona, that expect our it than Texas. knows to fire. to It's nobody quite on we backyards, I again, on obviously phenomenal, just we're eye-popping. be numbers, us. mean market very

not seeing slowdown. any we're So

In would strong this energy Arkansas industry. We're you Tennessee be system where the the I the Michigan, about the states and of transition is part didn't I'd I - and Georgia That's country, or a middle soon the fact, the start Southeast seeing talking in tell think in the and In got rough system. I of my growth. market. really power power in energy transformation that

dealers. signing And more more up so and we're

and broad can expect weighted more than see whatsoever. California in And is now, see to even dealer pretty heavily growth customer You broadening to our our certainly and we even is solutions not account. that in we which our have

Maheep Mandloi

pickup that here? should Or guarantees, and DOE the rest quarters here? the loan about mix year loan in we expect the remain with the saw should think similar two a we we the somewhat to what in As last of

William Berger

total the we about certainly share get we then That's question. any you market I all. will come given straight fulfill growth, growth, have have play the go. is until going The to to we But ITC which way here, any know. Department We our that commitment out in we have into market and don't don't reservations the this - answer and a at just market great strong our that Energy. is is there marketplace, don't don't of know adders addressable

I would talk lease, But be probably say, how about know. XX we don't we mix. much adder away of you Hestia an from without - when loan say it in this, lease certainly in if that the would higher deal would months what terms share, ITC will, would it take exactly

a If XX guess, it's you difference. to I'd I put be going my really points to you and gun head probably to X want said, about hey, to say

being So I we the mix. XX expect ultimately - end XX up loan XX-XX an Maybe XX, the it up loans with Hestia. lease ends and balance being where

Maheep Mandloi

on And for then just last one one customers. me non-solar quickly

I a year? expect of rate here had non-solar quarter. think about we rest the this you're the like through in thinking Or similar how you Should around customers XX,XXX run that?

William Berger

Yes. a We're business, X.X customers very of million growing. our in there, There's strong. orphan seeing lot a and demand service-only strong out very

to there's a for make given good the it. limitation, going everything that power, energy-as-a-service in upsells, banking providing is demand seeing additional a the a huge management, growth And on to seeing sure obviously, upsells, with And roofing the services with so of such EV to system. right, also capital got battery bit we're quite systems, charging, markets, solar We're generators, tailwind our what's do as of the strategy with roof there. load that's

really over that's it's about contractor's in can And of Sunnova and like push lot So winning partner that's more the perspective. spot really everything a helped just folks with one a us. really from space I But more share. get to

the strategy So is working.

clear - go expect we're But solar going be out there. the in as to and So very to we're breakout inclusive to and not it, I growth on what about growth but storage very seeing of other strong adders. we still we're exact guide said seeing, is, strong

showing There's to any a board. strong seeing weakness say, weakness. not on nothing whatsoever. across the and pick We're growth we're well, So seeing that's

Maheep Mandloi

Thanks. I'll the jump back queue. in

Operator

comes The from go Julien, America. from question ahead. Dumoulin-Smith next Bank Julien of open. line Please your is

Unidentified Analyst

that things your Julien. Is be last a John, I'm this for contribution think to up obviously, And quarter. so a bucket give of roofing of EV just whether there Hi say, as question charging as just of there otherwise. that customer can versus, or - guys. to really legacy we accessory about following solar seeing, in the in NCCV to something very you It's ticket customer us point, off. the mix the seems Is jump per far sort on size there's heuristic or then [indiscernible] loan energy-as-a-service any ilk mentioned, customer can curious. that like mix? any you big of or that a taking we're sort Maybe that relative or to lot

William Berger

Alec. Yes,

say way if that I type just the it's everybody or that take I'd and And strong. solar-only the that you not calculation. invite then at difference. a small at, see do I look is customer First, course, to per look I would something, And has competitor a can pretty NCCV been ratio. that say, of you look at it And

matter lot no So a we're creating of what. value

customer, to we everybody else, customer. just if a also a you to as a we separate battery don't and We remind upsell - don't that call

that an don't here there count. we So don't another upsells count so thousands that's a that becoming increasing see as amount. in it of It's is on thing you that is customer,

something to So just that's remember.

but ticket near say big I storage as generators. and generators big place but not the same as the right? where good. are then a roofing as been a would lot And more the pretty well and just is size, of It's storage still see one growing, we has value, about

that we're It's is be leave or value California smaller the typical at or we're with all fungible, think we it. in - making clear some system of commensurate that. would generating would Rico money that the maybe of money. can something that I And Puerto with Northern day, the and like end very it's I markets like that still solar it So - is a

Unidentified Analyst

curious know Just you some things the - on call some on sale maybe Rob, gain about transfer stuff. of had or otherwise. some of I direct in earlier the you're the on waiting for commentary the

maybe comes the help in. the little pieces saw of Just is the maybe curious with on some us the if OpEx I of moving you gain heavy a stuff can sale when in front, the we as the But year? had that you the on versus guys about rest mentioned. some through on about piece the curious should of think sale how just pieces of overhead gain

Robert Lane

Yes. Not a problem, Julien.

I in adjusted anticipated systems think second originated - of the service now of of that's that are back-end our part the into just that you'll and more going being our in gain see sort sale. together more with EBITDA that how shaping weighted. our making P&I, where take that driving on that's of is sure of the of we next year, to the that half expect are the And

that the in adjusted year, some from than tend The quarter every of see of time bit charges do more quarter, that's the It's the first fact to not sort higher with to G&A. the to our first the beginning the do a other payroll accrual, heavily with point fourth weighted but your to quarter. OpEx. the jump bonus like, a We taxes thing related having to about slightly and mostly

the burden service from more quarter fourth service quarter. as in customers, other well also increase to have to we into see the first quarter, put than have the in the we quarter fourth then we as typically the tend And

increase time quarter was been bit sales last around. a that's fourth incredible how ratably just side and year's size. given higher Whereas a marketing to Just bit has tended the more little with our this

to much expect don't to really out the of of do again on there. widening there's OpEx of we year, second or start margin into would the the we revenue of point, gain revenue get your ratio that So But sale. have half more we the to to I think OpEx as

William Berger

show in batteries add that service cost would Alec, serve. That up as well increasingly, our that if to the technicians, that other It's business staffing. upsells line accessories. the and our on will command some center obviously I of cost increases direct and as

So everything I higher trend again, that right. again, higher Rob expect by that said, be offset it continue. is just adds. to even But course, would of And should customer

start more as you'll So we leverage forward. operating move see to some

very again, growing fast. the But is very, business

even the In this about fact, confident into folks, point X.X year the conservative months booking hopefully, growth convinced XXXX at really to just our is the and we numbers very we'll left our way start a of challenge the because stop. into year period, not rest we given have at And then growth, most we're this and full get count next growing customer. start way

take lot very, So spend commercial, part very little we're building out more can seeing a and a building the service as more. strong customers other so areas international, we growth, such service of that is in bit more into service maybe or the out

- little maybe it's that gap, more there's and numbers bit two a here clearly, is lot up. But a into goes more depending upon year new takes growth of a the that a maybe growth there's it's quarters, are showing So initiatives. showing

Unidentified Analyst

the Thanks, in rest guys. customer seeing we're for Yes, We'll offline. take the line sure.

Operator

Guggenheim. your line Joseph, Please from open. from Osha ahead. go comes question next Joseph is The

Joseph Osha

Good folks. morning,

of And a I've here. bit so, cold got

know give us I'm going about to think likely DOE XXX could just you to up. end still on recent if but question, where that's spread just sense as First any wondering their wondering it's to LPO I if maybe like market, some speculative, when transaction? back what at Mosaic you hit the say, ABS preliminary to you the the have thoughts you that look guarantee. relative might

William Berger

- of rating. that A attachment high a minus as the instead that minus top point. single BBB, We what Yes. larger BBB we'd expect get as AA be class have a AA, would into But through would the the trifurcated way as that a traditionally we that be from bond type potentially all that see class would of could AAA a having

would point. sorry, therefore, to entire spread the decrease that spread but the be point, attachment - And at we across to increase expect even see them significantly first then attachment that

expect also tranches the that significant We we allow single that So thicker than those a then combination in see of to a other tranche through three could DSCR weighted the the decrease would average spread. have would combined.

Now a structured, very where look the attachment guaranteed may take of But how it's the different for view. of ABS at investor if at it's point. cash similar it's you flows set are agencies rating paper a that other a government take guaranteed that type to

uplift to we which do and that there. the VPPs hit would expect hit, significant with go DOE and part more like. more to to that and in solar is be government are and able people help to going the that's to trying and the to then So the see aggregation to a more things initiatives bring But

Joseph Osha

does that little say, to mix this pin at, bit? the you mean a done? is you FICO a we're to think XXX less over do guarantee number. to that, when thicker helps see guess obviously, would I we and So Could And down like see I a than tranche relevant the benchmark, probably all the going try and said shift price

William Berger

the do the to bringing folks. anticipated some do investor able in FICO we in lower expect end want losses materially lower lower to bring But yes, you go an the us to greater at to have going with would in FICOs, but And however to FICOs part for have because still make not would customer. lead we But our more through the to day, we we we FICOs have be you. go process. lower be that sure Thank some that underwriting you of price to those their price we're have see solar I'm to there. sure make still in, of definitely

we they attachment going you point, that out made necessarily underwriting, to a find friendly and sure proper more are FICO will investor still are doing that credit ABS make there hole, to we our need but will. The if just

Joseph Osha

And domestic talking this shifting yet up saying, Rose no to you've managed days. hosted guy. rapid John, or still content it's gears, TPO. one's project been in energy the least early about call a are very the with growth Norton He land, was yesterday in in pick We communities at at

are you XX%? trying actually I TPO to adders Or I'm trying successfully claiming So is, by understand today? saying of now are you some that. I'm to guess the right fuels that just just understand the growth does

William Berger

clear, be To Joe. Yes.

the When anticipating what's else So XX%, really burdened unlevered - it's adders that the domestic on in, of have our no adders see going coming small roughly a bit by market I we and few is increases, the just little then there's in the come in. kind price we that adders, return, very, the the think in not, everybody adders next more we and climbing. of days coming And are about like fully there's way, coming in. is in very

prepare our And a you so So right? don't that. dealers, larger you've turn got for on therefore, to dime, especially

many or loans regardless the But zoomed of adder lease they've to in increases, rate they're other interest a over really, sensitive not. the is that cases, the because cost much more so in to

mean that. need that a coupled seeing means And bites And that lease so economic people I actually the that, with on to will and the for recession, we're and tax to struggles my have they think down that go we economy environment, as or claiming have fewer on this capacity ITC, more to as PPA. which opinion the fewer deflationary potentially growth

So of The I here. lot right? there's think numbers, real. are tailwinds So it's the a numbers

we'll more anticipated, confidence the towards come that lease see year. that towards in continued end last than us of and So greater as PPA adders say, move we gives the

Joseph Osha

very Okay. Thank you much.

Operator

Mark comes is your JPMorgan. from Please question from Strouse next line Mark, The ahead. go open.

Mark Strouse

for Yes. Thanks Good morning. our questions. taking

there. Just a follow-up to Joe's question

generally, model we we or an market expander a think it's of should the more right expander? margin guarantee. expander I about DOE bit when of On being loan a But addressable that that more speculative know now. spread

Robert Lane

can look more a you expander. it think at as spread I

fleet were other already this we very of that low Rico XX% over I heading into. have in be in income. markets. moderate are most is about of as wonderful already markets and island We what's our these obviously think would already Puerto and We've that strong the qualifying

and to on this strategy. if we enhance It at time a hard a get we to it's our that's focus DOE be I mean, So have was reasons missing. that is what's we point service, really conversations as and really to not had in to able pivot just we take that expand and full able had our the helps were this the our to such with from strategy. us believe because

bears able the This due and their after of big this in that due be going systems, solar of to be customer. able And large to it our that very to take our accept communities is the that about yet financial is have into this and that, space underlying nonperformance be internal fact, to out. nonperformance bring of what that something need securitizations, research going they're to from show investors on going have to is face. in of you're anecdotal, to quality loans trying is to a can not to XX% markets to If bring not loss some the to but credit you where be going them you and egg it's

able faith we that back be price to since service price. get goes in believe only reason all matters. better bring better which can founded it with the the company, do that so emerging to the to we're the this it this technologies John So that the And why us not it's to that something is at day is our and has they folks able better he's to service they get said that LPO but have why

Mark Strouse

over under Okay. can Thank you've several selling you. latest what stands the just California then in your give just weeks of X? follow-up, a And where you us kind X the last observed and backlog NIM NIM as

William Berger

some less major Mark, to to this, lot our of competitors. a matters I'd obviously, than us it California say does lot,

don't huge really March? Jan-Feb And us. a did the was we I March. And more we didn't it was in it about but quarter-over-quarter then March in and the increase any see others, took you so for see move know if same a

'XX up So at if number. was year-over-year. overall March an to at look it 'XX, you March least And that's XX% QX

is XX% like so. up or more So probably March

show then carries quarter. up to maybe really fourth in just in huge so a at forth, there the backlog you look that our look spill start That at you backlog, bit we out is interconnection the year. really flow my not the would the probably and third that the out, guess, next given of amount count, into if to little will think be going If to that probably and

of say is this would it. very everybody terms it's very - California, that data, I but in of amount wants small I look, know a

origination, talk think XX% steep days, too. down or a we'll very essentially a a I it's down seen, about we've So the was first it last few days so fairly XX%, post the in I as like drop. been there few the some is sharp up you XXth cases, but would customer expect, mean swing

the zoomed up Now yesterday, I down yes, XX% you was TPO expect. storage multiples, it by the would climbing at in but looking just Interesting, went rate way, the is California, but up, maybe as attachment quickly.

to north rates California. starting of in So we're see like attachment XX% XX%, something

hey, very proving know at goes, So for and much out days it's very I some days. to this, be obviously, sales had quickly. that We storage, going wouldn't have service. itself that's extrapolate our early others early but very least NIM X.X as great talked about, equipment on too I shows

surprise for of again, market in to a market of that we're again, - last seen. of that the surprising, to big California it's begin it expect that do upside We've high upside. again, it's few the but we've days data in a pessimism. think, I baked expect for early data us we not given a and lot see to from, with, and attachment And So days we might the seeing, very rate the,

Mark Strouse

Okay. Very helpful. Thank you.

Operator

from Sandler. question go ahead. next your open. Please Piper line comes from is Kasope Kasope, Harrison The

Kasope Harrison

everyone. taking morning, And questions. thanks the Good for

So the an will earlier question expand your think, in just Mark primarily I Rob, spreads. response that loan indicated DOE asked, you to

implications on XXXX question, Could in in terms XXX XXXX And negative XX? the the walk so for of capital? just for could to following changes up us zero that And zero forecast to positive? maybe Slide through on become that corporate you become can the liquidity

Robert Lane

I'd the of growth afforded program. I least would is believe Hestia and case. really to is coming love what give higher program, necessarily higher that right away And there. expect we've one it that generally see us. opportunity think not that we're likewise, it, at rates higher us Or on expect growth. TPO higher were speaking, that won't that's And to much drivers if what rates, the advance we're turning taking the advance necessarily it is on certainly, see this but I the higher bigger had towards into is we've that been don't the We're growth. pushing we we

origination going today that of up a that putting it to feels in we're XXXX is customers. showing end lot up as the So really that in is

LPO over the from to years. going program this in So extend is several

this all this like is deployed year. not it's So getting

that we'll program. the we're think that be next this the could In we transaction on a loan still be on the in doing fact, anticipate it Hestia be programming, I do to it said on that And that program, deal for position but ABS is that the should Helios. Hestia market on the the next for it be not - is in we on Helios Helios

we're that under things start still get we up we we we are with are want everything be that that make if issuing sure want holes wants everything very there's to right there's to we make sure some who later can it to Hestia. So really no doing everything make it. buttoned doing left to and But that punched that working someone be in to the there's fight sure done, we're closely pick that with a DOE so to

lot here next still and answer is short of still still the So is growth, the growth customer robust. what's our now count year driving very it's happening driving a remains for

as with comfortable the stands. liquidity we're side it So

Kasope Harrison

it's what alluded my just there gaining Is maybe there. leave Or do else? loan the you. to this then as And I'll with it barriers just already. guarantee guarantee. quick competitors it to possible to service And think kind your DOE rate for as access a Thank also get anything offering? you is to But follow-up, and of a helpful. And delinquency that see lower you do you maybe the leases? then comes That's

William Berger

what Kas, focus Office Yes. that chose Energy would the I let's Department why on say is of us.

the its service. It's software. also quite one Robin about a service, and As has talking that big been bit was

have, the on the content the have power cash all there contracted features other are the come of gave XX Those those quickly. and for is carbon choose just $XX Those grid some comp and specific us many and have To and now why software cash of to of three that which contracted we unique utility how and power. things and Sunnova. very in south of in right. flow climbing cash is flows years the Sentient flows, billion our then So

this you been us? is unique - would Yes, the into there's I now. that clear they broad can it to somebody know and are gets it a leases. And I those be But do And about and - questions with industry. win some else, to it, think are about the we right to for

that is the with But get once You Energy look line to standard nature. the wanted investors really can't way and essentially so equity, a the the the way we tax fulfilled Department or forth. something tax behind do there's really equity not of to at tax that's maybe that those something of equity down

that. But look we're at a taking

this would is on more industry. for we but encouraged a are is You the And the program? never somebody this it's importantly say the possible. it is I Can get would never, win Hestia is very say DOE say now that I primarily possible. focused side, else loan right that

do facilitate things, that even we they hold this We one held to willing up. and of be and do only service offer qualified, they that I and anything Department particularly our that. loan apply certainly can expect software to be And know If which other will. the us to of standards one that can high we're will our to we them same to Energy offer competitors, our able program to I of the for

win we're software but this as and a of industry. time, a service Cost of differentiating focused that on for a the advantage is think really for with period capital is underpinning We that. provider big

that we It's enabler. as country financing the thin, and to thick it's industry. through and stand we've So the we And for for an said by what's We are. always best and want not who enabler. do

do the - a almost Texas, bills. the on the great matter socialized the utilities a don't this have the losses their of utilities have job. think it's who utilities I And including credit us that folks no like pay you're same And credit in, of state puts have. those wrap it quality not what They just

a this of the our very we equalizing can we that is step do And supportive be have of. meter. meter, the side treatment to front anything equal in the behind of the able are treatment, So having help to equal industry, rest and to

Kasope Harrison

Thank you.

Operator

The next KeyBanc. question comes from Sophie Karp from

Sophie, your line is ahead. open. Please go

Sophie Karp

And Thank my the questions. quarter. congrats on for you taking

back to the So maybe question - into if XXXX. going how could going you of states different before

struggled? successfully made have You growth have in And to guys these on growing or And perhaps saw how I'd others what your achieved hear in selling growth in where power So prices that. adjustments the this sales is continue places, that done pitch? Florida Texas. curious very at what if in you comment sales strong is be counterintuitive you could geographies and commented going to right? tilted had those to how be So the just looking that be to you and

William Berger

of I or Sophie, type never first we've foremost, one and fallen type think financing product over with another. love in

dealers to and customers, one our down. no hands We to the products, family close. of our have that's and best set broadest There's the products available of

It's didn't loan right we of in PPAs, and the and simple. PPA to miss a next advantage And terms one relative that It's lease the else. so the to case, to market product maybe beat, that's really very Just given us something the that this previously loans ability really the win other click lease with quickly right? the interest in way to or inflects product. on huge rates, disadvantaging they've had

business and over something about we for So this, we the we prepared. thought and just were things like the think prepared the our way I had model years best

So I first think foremost. that's and

Florida semi declines also gone break, price like would folks But hasn't deregulated we've up Houston had seen other price has - Dallas. the if much say and any. some here and I a of remind and still in like like markets markets

think than market pretty crazy no, prices from like gauging consumers still it these it's are don't has been. on but I it a utilities is that's never lower I And high so that be. mean, And it high. in will California?

Georgia, Remember, else of than has for Houston, foot and moves customers percentage-wise. an one [indiscernible] is when $X.XX-$X.XX are highest like up. amount $X.XX add, to a look for square instance, country. these the was time, for you I instance, at to these that per big And so in numbers Those consumption areas like rate the places power home big, at mean, in moved what, big average going it's anywhere

So these big, consumer areas. power are big

of from not cutting - being so monopolies don't is I are and with utilities decreases the really good these price terms think that really decrease price. in are many And too that, price at not coupled

there decades. what and the seeing history at for deflation that better batteries, points think and you and we're I cetera. look shows look that and of at cost of et terms out measured looking you cost in When price in

more The pretty I seen. seeing underpinning We're lie. overall, here. a we've you're that growth. out growth think that And data and picture seeing that's That's more what doesn't there. what of we're expecting

out we're as broadening again, And those states of well.

growth said like So I that before, in, kind that, be this would getting didn't think states we of into we're it. seeing I seeing

much to start it's that. the states, register as the and we that so not more data than can Again, broader the growth. upcoming see And through data you more for and it's states just

growth. good data that seeing folks, other and probably growth So we're and I the is fundamentals here strong just underpin think that not signals the from a there

Sophie Karp

other been My have you. questions Thank answered.

So so thank much. you

William Berger

Thank you.

Operator

go Kallo Ben from Ben, your Baird. open. comes question is next ahead. from The line Please

BenKallo

couple fitting for of in thanks quick A me ones. Hi, here.

the customers weak. big Just customer QX was growth, of on a cadence because seasonally

do about the the how year? rest we So of think

William Berger

is rate, up. definitely. bigger year this do kind QX, at beat have growth most QX growing that's see of to quarter-over-quarter. going I on And go bigger When we're out. and definitely XX% expect year to I track been to and I it's you Ben, QX in, mean, think then QX And

to You the being should quarter. expect third and count the see customer fourth not only

a to upside Yes. this? even So potential is there

including will our follow of that growth I it, you as look to due to the in money and dynamic see call up. financial earnings because and quarter. before growth, at third spend beginning, the right the from the when seasonality out laid tend fourth shows to metrics, because the And show financials expect of more they we've both the you for it to would in up just follow last that time have ahead second, and the

is we're track, think and I right. upwards on into So everything well the

BenKallo

and lot about And guys. dealers access whole But added everyone think since out were of that most in you you you've public for - the the capital there been for I worried a markets people finance absolute quarter. dealers, the the

So could dealers? you health just the talk of about

William Berger

industry. problems Yes. other dealers experience with We've the if that as seen folks across out dealers and is to job them. and so strength grow we'll too well that of some business stays This XX so may duration And some helped continue managing years didn't their as manage forth. against some they it see holdbacks. We've are other now for adopted We've being service-only have call of Those area. our work duration out ours we in staying of payments. creation there that of on business back things and top should the not and certain, forth got of in we've created like that long, actually are we the their

more, to very capital. I and we're see happy for And copying others so finally that think, investors' responsible being

markets, right? have So our can And and forth. the system running the you capital we're that. notice folks capital. - lot working own so in think dealers dislocation get which of flipped working to at on look happened, capital, banking I of A moment's off which at given dependent Sunnova. borrow the we If has And a look, that. are the seeing We're not safety

very, demand. see the position. know And know it contractors huge very want frankly, amount and a So financial we to that we're in become dealers. a of And it strong dealers

seen I the in It to that I've XX-plus how sub-dealers Board my very will the from as this, dealers, waiting all I is we what season, years in our experience. say we am are in channels heavy become across peak dealer? a the in of this point have surprised selling at of many queue

don't are to? not customer. Is are. saying come broadest of the lease, that do I'm other this So to not portfolio, Sunnova I loan that running I'm it's if to want a think worry meaning about that or saying product to there's are folks whether safety. what's areas that. right the just the just you had safe that go our industry There not to for

that in then And expect program the great expect Hestia if a we adders. issues. have now We get ITC have to and we any finalized, which we

so best choose for what's customer. the you And

you make for capital and working sell do you, happy, job, the them have get will paid. We customers, done go the your get installed and quickly,

I think that our of again, that's type superior financial model, this strategy our clear market. is in

BenKallo

Just moving on means? quickly someone sales LinkedIn to hiring and was what you're Germany. a that There that talk you in Would about international.

William Berger

you as Well, always, we your do Yes. are. homework. Yes,

somebody in know manager, him that we'd a you happy interested to to talk really over. if be sales good So is that. German We're

We're to people, We we've preparing systems, we're cautiously. preparing. very it be had going our are And - to over move managers starting a take our there. very

we in going see judicious use acquisition need and we're going don't can we working cautious Maybe there necessary make slow. very don't countries. that But there. other entry be over the over to there we to it accelerate sure do to And such our need obviously take growth. growth huge we're our and capital We about for here something it's we is any up growth, to that an but

very more much moving to about earnings ship to are I moving The moving. direction about but talk that couple is of are that able calls. next - we hope the we be certain. in But in for slowly, And

BenKallo

there. All right, leave you, Thank Congrats. guys. I'll it

Operator

ahead. is comes Brian from go open. question next Lee Please Goldman of The line your Brian, Sachs.

Unidentified Analyst

John, is have on just Grace just Mark's for Hi follow-up a the Brian. questions. one Thanks a Rob. taking This - for questions. to of I

to upside to Just you the remarks. mentioned trying point XXX the potential spread basis the understand prepared in

the like others points the quarter, think - is now in together which all guarantee, DOE have about XXX the basis expander. spread spread. past I in you in And mentioned like loan represents last the you

next basis points, you towards to trying the to see potential XX upside the say, XXX just spreads So like, path XX months? understand do or XXX XX a in

William Berger

Grace, no.

of about is be the power XXX the and settle limitation. of U.S. on the the - we term, side, see part to willingness industry we even where but equipment pay industry. world, you you long said industry, equipment global we there's But can a to transformation with lower. think touch look, a energy have it in energy the this or best XXX, we've this expect is around - transition XXX maybe the think energy I

have push can't we of margins pay. willingness the in so best And recognize world. to the to service We or that lack crazy is our a we there levels

hogs be possible, and slaughtered. to there case. to of have say, of little the did get be you're shareholders a case. that be everything, expect We don't and see to not XXX quarters as a Again, trading, when That fat, a I So for certainly there would is willingness bit pleasant expect pigs that is get couple surprise. pay. they where a prints we it a And would above it it's a little couple possible, investors bit of a but there? Yes, was

Unidentified Analyst

Thank pass Thanks. you. on. it I'll

Operator

from Please your comes go open. question next is Raymond The from Molchanov ahead. James. Pavel, line Pavel

Pavel Molchanov

Thanks for taking questions. the

into of address renewable went Suisse of since to there's elephants me the the stop the Ever included. solar a any evidence will room. lack Let under, of Have proverbial been Credit any lending to space? a at you appetite Valley that in of kind lend Silicon one and fear interest banks rate solar simply seen

Robert Lane

about relationships a and work, approved years want that make out they No, us our coming expanding of existing have us clear, have been It Suisse, Credit again, we folks to program program. telling not. And be number after of U.S. about we they've who our from to couple reached did And that of a have had into they're now the about they government. a do backdrop. strength. The that as such to very in support get very entities been Bank Silicon now sure see have even has for Valley strong gratifying to

very on comments warehouse still our some in - But prepared I within sort really as - X-Ks, and interruption as to capacity. you the as we from have partners we say been in And you've strong fronts. our any saw did continue We seen there increasing all of of the programs. our have probably never

as we of as and it's this quarter we capacity which of alone, billion that Apollo group $X.X underpinned SP. another added and diversified more with the on, a anticipate support we more So we're Atlas been getting lenders, and by add here of ability to move well is the incredible out

and pleased able So more stands we're capital our have to now to it less. for right very access capital be noticed us, as provide demand to with not

Pavel Molchanov

raise up about follow Let year, prices rates pricing. you that. increases do along guys across in board, me utility the double-digit with Last utility

of and I that in be get your not Now some relative you're stabilization pricing going skis ahead states, down your to is to potentially careful sort the utility, product some in there assume even to over correct? of ticking

William Berger

That is correct.

Pavel Molchanov

So geographically, of is greatest? overpricing where maybe the that risk

William Berger

think I a different there's Well, of couple answers there.

it fixed crazy whether really them rate. a as high, want If push for a just kilowatt higher to to you rates, just look on They're and just hour fee instance, they or they consumers. California try at, disguise

choices. need consumers so And

power a say allowed because have bit monopoly a would we persist. diversion as to just that's we of being that actually ridiculous I it abuse of see with So to that a

consumers system the been term choice. so are unsustainable rates monopolies change that cautious regulatory will those the charging, And we that see are long that very because system, we've will on these get that

then to same other of even but like rates, opposed if kind that and are lower. rate the they're forth, should monopoly see so Texas you states As power be out abuse they it - there strong and

just again, something And $X.XX $X.XX move rate matters a on $X.XX a more it rate, right? South moving a a on hours So you they percentage-wise kilowatt than or are when the math, So $X.XX right? bigger the have power, for or $X.XX typically, the instance. because California, the bills consume have versus typically that more think ones lower the rate in Northern

up, underneath the back the lot So basis. think the can we've and in falls, areas as relatively we on But these a as, of a per solidly have see have to you that springing lot because pricing markets more get these ability see you to deflationary on that scale and of a a ability again, there's get cetera. room labor competitive rate trend, forth, continue some about more of so rates" we I underneath basis. and - Then et and get kilowatt-hour to get customer equipment in which talked that we'll "low

if X, something not So in to putting system and for something X-kilowatt Northern a on Florida, see California on or like are in XXkw maybe it's atypical you're XX Texas instance.

to able and scale hit there's of the economics with or So your bit that scale to you are help for economies generate a targets of economies consumers. of be still there to of lot little there going still savings a

Pavel Molchanov

Appreciate the Thanks. details that. on

Operator

question BMO your Ameet, Thakkar line is go next Ameet The comes open. from Please Capital. ahead. from

Ameet Thakkar

but Hi, under, like just alluded morning. you was kind business I of the about of bill. but big know big in. just of how guess, about part do reduce that builds second ago. implications for good today, kind a would be? variable of me out everybody, I ABXX, of portion think would it the sneaking John, headwind a thinking But not fixed your just wondering I thinking charge Thanks I overall for it the to rule raise their in this is - about a California you maybe anticipate making just California maybe of seem to of and kind

William Berger

I expects the folks. just And you think mean to was it? don't forth that think, crazy. how than Well, $XXX,XXX, that get would egregious I make, put nuts. implement by evidently, people more just And proposal It's anybody even in I rich. I how to is the just "Rich." $XXX,XXX what ways. San me living clearly But see been just anybody so explained cost I many the proposal unrealistic that's think there, outside Francisco that of and it's - mean to is ever

clearly what that could think cord? cut very I people see customers the Absolutely. could is to you're going

the how Why do or at the California. couldn't in that running even batteries factor these these I Fiona many in customers today, the that year folks buys certainly a without by crazy. week end for grid And with or that or years. year were fixed we sounds load power. you same five let any look Puerto alone buy that And a after that XX,XXX of of if the charges We're they'll year post know batteries proposed, lot Rico next it

there you fairness it, of then of it and home again, has and spend and other pay money. people's CEO, on put take whatever money reasonable just So lots adder can't look, this to top be some go the some that's put into and the utility,

there of to choice I that a can in mean be capitalism, so for that what's consumer needs the break pick it's this, best on comes break form and just consumers them.

some that things competitive we a to close we And going - take shouldn't But huge scenario, But edges us in we're - to it. our don't is of move let I to give don't that in as going for point, pass. take model is you're out market geared I we of forward lot path. think see at us anybody marketplace. that's one guess, this. And else that renews that, are it pass. we a that not share going will - if to worst-case going anything we'll see the prepared does, California. for in So It's think going the to

Ameet Thakkar

Great. Thanks.

Operator

is go comes open. your question from Evercore. Sean Next Sean, line Morgan ahead. from Please

Sean Morgan

Rob. and for questions. John taking my Tag, Guten Thanks

the Just DOE on really program. quickly

they're versus that the $X you you program. of there's And see see little billion you looked And you from billion putting in $X [$X tranches a looks it million] the information a think cap. that that XX% capital about maintaining financing XXX it this mean DOE the Hestia total of the there's course, then project guys I you - up. I And announced the that like mentioned like to guys talked will project bit have developing.

basically, that are questions, FICO see about two XXX program the of I it's Because XX% XXX? scores the of of So around level. scores think in below do kind clustering you that FICO sort

going does set. outside with this wondering above Is program. your also, TAM from? that $X.X do then $XXX just to was broadly be sort see million And of how $X.X capital billion expanding million does you billion in come that the how capital plus of the where the ABS? $XXX Or I'm announced the that additional result a come as you - of So where

Robert Lane

question. Good Yes.

a for is First a off, certain that level. It's not cap. percentage below that minimum just for clarification. asking Really they're FICO what

is to I far So - that would our adjustments call as achievable factor already it target there's small that's a us would actually it then extremely there I origination. requirements. not we're as aspirational, call And higher with making our

tent can to if look users. we solar certainly the We're broaden for going to

in running. would weighted of all. down looking some, make come they're FICO or I and mean So anything investors partial for sure that at going fact, expect, again, up but average for to that of keep really that we the systems will, much as much that guarantee to that our not Really, it's be going class

that So the we're service performing guarantees. and are systems themselves by standing our

to how of that's it. address So piece that

able As into the be program. that of the rest other going far our we're still market, as origination to to put

So you're still going there. go origination into robust strong, to see some very very

class going even incredible would, go to the that loan. the of So a perhaps loan, strength there, an initial class you of A we be - if portion believe. the the There's behind for still in would nonguaranteed BB amount of

If it then loan class notice something in really of loans sure a do start And where substituting a we substitutions. have to that making type we And cause, a a making origination they or making those our what specific some trend that paying. FICO, maybe root down about narrow customers underperforming. of jurisdiction up a certain specific that are if specific out do, we'll we've we we all had our can of dealer don't hold do never problem sure like investors we end fact, we and in

will it rates high the advance loans correctly, the simple the of very of we base versus not will the rate then perform a come the to sort advance advance of XX% it higher, balance at then I sounds then - even it So it same, have if support bring rate support If lower amount rates, rate. day, the does really if rest counterintuitive, get rate. capital. between know are just the much higher But it goes able it We're advance looking math lower in, we're fixed will the a it we of end just further lower getting a a from? XX% amount volume the but to because at piece was we where and of can support advance a damage dollar the of of of loan other is as and high volume. loan spreads

customer there is not dealer to remember we there liquidity providing balance getting is actually a fee in dealer be how providing that is so the to to we able you that the advanced to expect and were service the the service are the I O&M We're exactly where provide But that and to collections. technology comes and out full that service rate. customer us the going just loan part we providing and full are manage well. as for be billing our how our would We from higher doing would business mean then fee.

that dealer all gets it So up into wrapped fee.

Sean Morgan

the And is DOE, that adds Does the that excluding increased that include the sort benefit of Or DOE guess, of customer increased customers? I impact? then of sort midpoint XX,XXX. the you DOE, by on

Robert Lane

DOE would it I'm large is, that this I there we we that just of the out not point. think growth at have that a excluding aggregate. broadens impact amount it in largely be and on who customers the think yes, make I it recognize Again, have the base be - QX, to up I customers will will those it will some it a would then start probably on, show in say, XXXX. mean huge sure QX and later but difference,

largely, So just it I simplicity, excludes think it.

Sean Morgan

right. All some John forward at look up Thanks, Thanks. that point. be hopefully Day and that Analyst Rob, [indiscernible] coming will Okay. to

Operator

Bank. The from from Please your is Deutsche line comes Corinne, Blanchard go ahead. next question open. Corinne

Corinne Blanchard

I'm it you been XQ good think for on expense question XQ? my training. cost. but assuming for about Hi, of How maybe quick morning. two Most have service, first ones, on have the would some one should extra we and maybe

from We peers for business some Do have saying some it have to heard as more that for dealers them different to expect model. well? able your expect to in the sell the training battery period you of be they

William Berger

do. wouldn't And our conjunction the that a that terms hardware that OEM up. doing in partners, We rounding as our would of on we they may training and say it pick while, We've expenses or be be you training. in I where better well. year provide been with that for work

Corinne Blanchard

what the trying the from And it see, - to this EBITDA do then one, like could the increase need you see what year, see where last to upside to be? guidance Okay. just

William Berger

continued that's of think in sale, on I that gain terms to increase.

see that our can in numbers. You

selling see, very really growth the Rob We once to earlier, as particular that clear. rules print expect and want increase be that We clearly said issued and to be ITC quite And you think I just the a balance between a to on spending it's quarter. want ITC bit.

strong So growth. see we profitable the still very

very trajectory. But so that's And expected said, to that to and continue going disciplined we're as far firm. being QX, less likely be actually as spent the this as money case. probably said, spending we than we in We're we

so see And shouldn't that yes, will it increase, huge increases. expect I but think you to

Corinne Blanchard

you. Thank Okay.

Operator

Andrew, Andrew Percoco we comes from time go Morgan final for The question from ahead. please have today Stanley.

Your line open. is

Andrew Percoco

and me answered, Thanks U.S. commercial in so of the the a one mine quick the commercial of of estate just to Obviously, exposure Most the much business squeezing been real outlook environment lot regional concern there. one the banks. for have the because on in. around but

the on pivot change any if business? there's commercial just So strategy of the wondering or side

William Berger

we get some to thought. actually Andrew but that's It there, of we're well. got channel a amount than and takes on huge going we're working no, we've potential seeing backlog, bigger that out while very moving, a growth -

will or probably the But show lot growth. channel a that to continues till really financial show and XXXX - the really EBITDA we so NCCV don't up adjusted And that of see the XXXX.

so probably timed it strategy frankly, And growth was no well change, to but launch that endeavor.

Andrew Percoco

Thank you.

Operator

session. Q&A today's conclude does This

remarks. for So hand call Berger I'll John the to now concluding back

William Berger

you. Thank

long-term is commitment a geographies to growth in underlines is As sustainability which this profitable you've cost, our strong, and and today, at view. and heard our any growth, growth broadening not growth services,

growing company for value our long-term to As confidence the a work energy industry, our strategic a energy as plans hard and the preeminent growth in the fruit, as provider. change to the create growth shareholders bear global we we and service of long-term Thank you. initiatives become possess and intermediate continue

Operator

This call. Thank your much concludes today's very attendance. all for you

your disconnect now may You lines.

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