First Quarter 2024 Highlights
- Deployed 27,000 customers in the first quarter of 2024;
bringing total customer count to 438,500 as of March 31, 2024;
- Total Adjusted Operating Expense decreased in the first quarter
of 2024 compared to the prior quarter;
- Unrestricted Cash increased $18.9 million in the first quarter
of 2024 compared to the prior quarter; and
- Selected as exclusive national solar and battery storage
services provider for The Home Depot.
Sunnova Energy International Inc. ("Sunnova") (NYSE: NOVA), a
leading adaptive energy services company, today announced financial
results for the first quarter ended March 31, 2024.
“Our team is squarely focused on increasing our cash generation
and maintaining our margins. Through continued cost efficiencies,
maximizing our asset-level financing, further utilizing investment
tax credit adders, and re-focusing on our core adaptive energy
customers, we expect to be able to drive improved performance, all
while remaining true to the values that have driven Sunnova forward
for the last twelve years,” said William J. (John) Berger,
Sunnova's founder and CEO. “Our core value thesis remains strong
and intact, and homeowners and businesses continue to see the
benefits of becoming Sunnova customers in the face of rising
utility rates and grid instability. As we look to the remainder of
2024, we remain steadfast in our commitment to delivering an
exceptional customer experience, implementing top, industry-leading
technologies to deliver customized energy solutions for our
customers, and driving positive cash generation and value creation
for our shareholders.”
Berger continued, “During the first quarter we acted on several
initiatives such as rebalancing our capital expenditure budget and
updating our pricing that will continue to bolster our cash
generation. Early success helped us to increase our unrestricted
cash balance by $18.9 million this quarter. Our ongoing progress
gives us confidence in our ability to increase our cash efficiency,
giving us conviction in our cash generation outlook for 2025 and
beyond.”
First Quarter 2024 Results
Revenue decreased by $0.8 million to $160.9 million for the
three months ended March 31, 2024, compared to $161.7 million for
the three months ended March 31, 2023. This decrease was driven
largely by $36.3 million of lower inventory sales revenue and a
decrease of $2.8 million in service revenue. This was partially
offset by an increase of $37.3 million in revenue from our core
adaptive energy customers in the form of PPA, lease, SREC, loan,
and cash sales revenue.
Total operating expense, net increased by $34.6 million to
$245.1 million for the three months ended March 31, 2024, compared
to the three months ended March 31, 2023. This increase was driven
primarily by an increase in the number of solar energy systems in
service, higher general and administrative expense, and higher
other cost of revenue associated with Sunnova's growing direct
sales, cash sales, and repair services businesses. This was
partially offset by lower cost of revenue from inventory sales and
an increase in other operating income primarily due to changes in
the fair value of certain financial instruments and contingent
consideration.
Adjusted Operating Expense increased by $29.9 million to $108.3
million for the three months ended March 31, 2024, compared to the
three months ended March 31, 2023. This increase was primarily the
result of an increased number of solar energy systems in service
and higher general and administrative expense.
Sunnova incurred a net loss of $90.1 million for the three
months ended March 31, 2024, compared to a net loss of $110.3
million for the three months ended March 31, 2023. This lower net
loss was primarily the result of ITC sales that resulted in an
income tax benefit, an increase in interest income, primarily due
to our larger customer loan portfolio, and an increase in other
operating income primarily due to changes in the fair value of
certain financial instruments and contingent consideration. This
was partially offset by higher operations and maintenance expense
and higher general and administrative expense.
Adjusted EBITDA was $46.4 million for the three months ended
March 31, 2024, compared to $14.6 million for the three months
ended March 31, 2023. This increase was primarily the result of
investment tax credit sales, which began in the third quarter of
2023.
Principal proceeds from customer notes receivable (net of
amounts recorded in revenue) and proceeds from investments in solar
receivables was $41.9 million for the three months ended March 31,
2024, compared to $31.2 million for the three months ended March
31, 2023. This increase was primarily due to our larger customer
loan portfolio.
Interest income was $35.7 million for the three months ended
March 31, 2024, compared to $24.8 million for the three months
ended March 31, 2023. This increase was also primarily due to our
larger customer loan portfolio.
Liquidity & Capital Resources
As of March 31, 2024, Sunnova had total cash of $487.5 million,
including restricted and unrestricted cash.
2024 Full Year Guidance
We are lowering our guidance for customer additions. As Sunnova
re-focuses on its core adaptive energy customers it now expects
full year 2024 customer additions to fall between 140,000 and
150,000.
We are reaffirming our guidance for Adjusted EBITDA, interest
income, and principal proceeds from customer notes receivable, net
of amounts recorded in revenue, and proceeds from investments in
solar receivables.
- Customer additions between 140,000 and 150,000;
- Adjusted EBITDA between $350 million and $450 million;
- Interest income between $150 million and $190 million; and
- Principal proceeds from customer notes receivable, net of
amounts recorded in revenue, and proceeds from investments in solar
receivables between $210 million and $250 million.
Non-GAAP Financial Measures
We present our operating results in accordance with accounting
principles generally accepted in the U.S. ("GAAP"). We believe
certain financial measures, such as Adjusted EBITDA and Adjusted
Operating Expense, which are non-GAAP measures, provide users of
our financial statements with supplemental information that may be
useful in evaluating our business. We use Adjusted EBITDA and
Adjusted Operating Expense as performance measures and believe
investors and securities analysts also use Adjusted EBITDA and
Adjusted Operating Expense in evaluating our performance. While
Adjusted EBITDA effectively captures the operating performance of
our leases and PPAs, it only reflects the service portion of the
operating performance under our loan agreements. Therefore, we
separately show customer P&I payments. Adjusted EBITDA is also
used by our management for internal planning purposes, including
our consolidated operating budget, and by our board of directors in
setting performance-based compensation targets. We believe that
such non-GAAP measures, when read in conjunction with our operating
results presented under GAAP, can be used both to better assess our
business from period to period and to better assess our business
against other companies in our industry, without regard to
financing methods, historical cost basis or capital structure. Our
calculation of these non-GAAP financial measures may differ from
similarly-titled non-GAAP measures, if any, reported by other
companies. In addition, other companies may not publish these or
similar measures. Such non-GAAP measures should be considered as a
supplement to, and not as a substitute for, financial measures
prepared in accordance with GAAP. Sunnova is unable to reconcile
projected Adjusted EBITDA and Adjusted Operating Expense to the
most comparable financial measures calculated in accordance with
GAAP because of fluctuations in interest rates and their impact on
our unrealized and realized interest rate hedge gains or losses.
Sunnova provides a range for the forecasts of Adjusted EBITDA and
Adjusted Operating Expense to allow for the variability in the
timing of cash receipts and disbursements, customer utilization of
our assets, and the impact on the related reconciling items, many
of which interplay with each other. Therefore, the reconciliation
of projected Adjusted EBITDA and Adjusted Operating Expense to
projected net income (loss) and total operating expense, as the
case may be, is not available without unreasonable effort.
Conference Call Information
Sunnova is hosting a conference call for analysts and investors
to discuss its first quarter 2024 results at 8:00 a.m. Eastern
Time, on May 2, 2024. The conference call can be accessed live over
the phone by dialing 833-470-1428 (toll-free) or 404-975-4839. The
access code for the live call is 282028.
A replay will be available two hours after the call and can be
accessed by dialing 866-813-9403 (toll-free) or 929-458-6194. The
access code for the replay is 195253. The replay will be available
until May 9, 2024.
Interested investors and other parties may also listen to a
simultaneous webcast of the conference call by logging onto the
Investor Relations section of Sunnova’s website.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements generally relate to future
events or Sunnova’s future financial or operating performance. In
some cases, you can identify forward-looking statements because
they contain words such as "may," "will," "should," "expects,"
"plans," "anticipates," "going to," "could," "intends," "target,"
"projects," "contemplates," "believes," "estimates," "predicts,"
"potential" or "continue" or the negative of these words or other
similar terms or expressions that concern Sunnova’s expectations,
strategy, priorities, plans or intentions. Forward-looking
statements in this release include, but are not limited to,
statements regarding our level of growth, customer value
propositions, technological developments, service levels, the
ability to achieve our 2024 operational and financial targets,
operating performance, including its outlook and guidance, demand
for Sunnova’s products and services, future financing and ability
to raise capital therefrom, discussions of planned sales of loans,
and references to Adjusted EBITDA and customer P&I payments
from solar loans. Sunnova’s expectations and beliefs regarding
these matters may not materialize, and actual results in future
periods are subject to risks and uncertainties that could cause
actual results to differ materially from those projected, including
risks regarding our ability to forecast our business due to our
limited operating history, supply chain uncertainties, results of
operations and financial position, our competition, changes in
regulations applicable to our business, fluctuations in the solar
and home-building markets, availability of capital, and our ability
to attract and retain dealers and customers and manage our dealer
and strategic partner relationships. The forward-looking statements
contained in this release are also subject to other risks and
uncertainties, including those more fully described in Sunnova’s
filings with the Securities and Exchange Commission, including
Sunnova’s annual report on Form 10-K for the year ended December
31, 2023 and subsequent quarterly reports on Form 10-Q. The
forward-looking statements in this release are based on information
available to Sunnova as of the date hereof, and Sunnova disclaims
any obligation to update any forward-looking statements, except as
required by law.
About Sunnova
Sunnova Energy International Inc. (NYSE: NOVA) is an
industry-leading adaptive energy services company focused on making
clean energy more accessible, reliable, and affordable for
homeowners and businesses. Through its adaptive energy platform,
Sunnova provides a better energy service at a better price to
deliver its mission of powering energy independence. For more
information, visit sunnova.com.
SUNNOVA ENERGY INTERNATIONAL
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands, except share
amounts and share par values)
As of
March 31, 2024
As of
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
231,711
$
212,832
Accounts receivable—trade, net
35,756
40,767
Accounts receivable—other
163,724
253,350
Other current assets, net of allowance of
$4,649 and $4,659 as of March 31, 2024 and December 31, 2023,
respectively
386,222
429,299
Total current assets
817,413
936,248
Property and equipment, net
6,042,158
5,638,794
Customer notes receivable, net of
allowance of $111,576 and $111,818 as of March 31, 2024 and
December 31, 2023, respectively
3,890,835
3,735,986
Intangible assets, net
126,539
134,058
Other assets
938,629
895,885
Total assets (1)
$
11,815,574
$
11,340,971
Liabilities, Redeemable
Noncontrolling Interests and Equity
Current liabilities:
Accounts payable
$
374,861
$
355,791
Accrued expenses
87,626
122,355
Current portion of long-term debt
493,496
483,497
Other current liabilities
146,449
133,649
Total current liabilities
1,102,432
1,095,292
Long-term debt, net
7,273,736
7,030,756
Other long-term liabilities
1,117,617
1,086,011
Total liabilities (1)
9,493,785
9,212,059
Redeemable noncontrolling interests
187,312
165,872
Stockholders' equity:
Common stock, 123,971,555 and 122,466,515
shares issued as of March 31, 2024 and December 31, 2023,
respectively, at $0.0001 par value
12
12
Additional paid-in capital—common
stock
1,766,966
1,755,461
Accumulated deficit
(162,973
)
(228,583
)
Total stockholders' equity
1,604,005
1,526,890
Noncontrolling interests
530,472
436,150
Total equity
2,134,477
1,963,040
Total liabilities, redeemable
noncontrolling interests and equity
$
11,815,574
$
11,340,971
(1) The consolidated assets as of March
31, 2024 and December 31, 2023 include $5,568,816 and $5,297,816,
respectively, of assets of variable interest entities ("VIEs") that
can only be used to settle obligations of the VIEs. These assets
include cash of $63,777 and $54,674 as of March 31, 2024 and
December 31, 2023, respectively; accounts receivable—trade, net of
$15,729 and $13,860 as of March 31, 2024 and December 31, 2023,
respectively; accounts receivable—other of $145,886 and $187,607 as
of March 31, 2024 and December 31, 2023, respectively; other
current assets of $631,951 and $693,772 as of March 31, 2024 and
December 31, 2023, respectively; property and equipment, net of
$4,615,433 and $4,273,478 as of March 31, 2024 and December 31,
2023, respectively; and other assets of $96,040 and $74,425 as of
March 31, 2024 and December 31, 2023, respectively. The
consolidated liabilities as of March 31, 2024 and December 31, 2023
include $249,869 and $278,016, respectively, of liabilities of VIEs
whose creditors have no recourse to Sunnova Energy International
Inc. These liabilities include accounts payable of $156,518 and
$197,072 as of March 31, 2024 and December 31, 2023, respectively;
accrued expenses of $532 and $157 as of March 31, 2024 and December
31, 2023, respectively; other current liabilities of $11,684 and
$7,269 as of March 31, 2024 and December 31, 2023, respectively;
and other long-term liabilities of $81,135 and $73,518 as of March
31, 2024 and December 31, 2023, respectively.
SUNNOVA ENERGY INTERNATIONAL
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share
and per share amounts)
Three Months Ended
March 31,
2024
2023
Revenue
$
160,904
$
161,696
Operating expense:
Cost of revenue—depreciation
42,156
28,197
Cost of revenue—inventory sales
21,892
51,779
Cost of revenue—other
39,348
19,224
Operations and maintenance
36,945
10,739
General and administrative
117,111
101,261
Other operating income
(12,326
)
(723
)
Total operating expense, net
245,126
210,477
Operating loss
(84,222
)
(48,781
)
Interest expense, net
84,601
85,607
Interest income
(35,696
)
(24,788
)
Other (income) expense
(24
)
236
Loss before income tax
(133,103
)
(109,836
)
Income tax (benefit) expense
(43,028
)
510
Net loss
(90,075
)
(110,346
)
Net loss attributable to redeemable
noncontrolling interests and noncontrolling interests
(20,115
)
(29,263
)
Net loss attributable to stockholders
$
(69,960
)
$
(81,083
)
Net loss per share attributable to
stockholders—basic and diluted
$
(0.57
)
$
(0.70
)
Weighted average common shares
outstanding—basic and diluted
122,894,548
115,073,975
SUNNOVA ENERGY INTERNATIONAL
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
March 31,
2024
2023
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss
$
(90,075
)
$
(110,346
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation
50,759
32,671
Impairment and loss on disposals, net
21,718
647
Amortization of intangible assets
7,108
7,108
Amortization of deferred financing
costs
8,288
5,171
Amortization of debt discount
6,656
3,512
Non-cash effect of equity-based
compensation plans
13,587
9,515
Non-cash direct sales revenue
(13,750
)
(12,161
)
Provision for current expected credit
losses and other bad debt expense
1,674
11,858
Unrealized (gain) loss on derivatives
(30,698
)
23,616
Unrealized gain on fair value instruments
and equity securities
(12,339
)
(487
)
Other non-cash items
11,065
3,261
Changes in components of operating assets
and liabilities:
Accounts receivable
48,507
20,837
Other current assets
(6,585
)
(43,060
)
Other assets
(52,524
)
(80,308
)
Accounts payable
16,591
(10,618
)
Accrued expenses
(39,083
)
(11,588
)
Other current liabilities
8,104
(3,470
)
Other long-term liabilities
(14,639
)
(15,485
)
Net cash used in operating activities
(65,636
)
(169,327
)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchases of property and equipment
(398,768
)
(289,296
)
Payments for investments and customer
notes receivable
(114,044
)
(274,362
)
Proceeds from customer notes
receivable
50,538
36,111
Proceeds from investments in solar
receivables
2,259
2,132
Other, net
1,332
1,120
Net cash used in investing activities
(458,683
)
(524,295
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from long-term debt
729,499
604,240
Payments of long-term debt
(475,190
)
(188,724
)
Payments on notes payable
(2,507
)
—
Payments of deferred financing costs
(12,625
)
(6,832
)
Proceeds from issuance of common stock,
net
1,884
(1,488
)
Contributions from redeemable
noncontrolling interests and noncontrolling interests
301,728
174,951
Distributions to redeemable noncontrolling
interests and noncontrolling interests
(105,240
)
(8,554
)
Payments of costs related to redeemable
noncontrolling interests and noncontrolling interests
(8,517
)
(4,511
)
Proceeds from sales of investment tax
credits for redeemable noncontrolling interests and noncontrolling
interests
88,776
—
Other, net
(370
)
(211
)
Net cash provided by financing
activities
517,438
568,871
Net decrease in cash, cash equivalents and
restricted cash
(6,881
)
(124,751
)
Cash, cash equivalents and restricted cash
at beginning of period
494,402
545,574
Cash, cash equivalents and restricted cash
at end of period
487,521
420,823
Restricted cash included in other current
assets
(28,765
)
(52,699
)
Restricted cash included in other
assets
(227,045
)
(157,240
)
Cash and cash equivalents at end of
period
$
231,711
$
210,884
Key Financial and Operational
Metrics
Three Months Ended
March 31,
2024
2023
(in thousands)
Reconciliation of Net Loss to Adjusted
EBITDA:
Net loss
$
(90,075
)
$
(110,346
)
Interest expense, net
84,601
85,607
Interest income
(35,696
)
(24,788
)
Income tax (benefit) expense
(43,028
)
510
Depreciation expense
50,759
32,671
Amortization expense
7,527
7,338
EBITDA
(25,912
)
(9,008
)
Non-cash compensation expense
13,587
9,515
ARO accretion expense
1,477
1,081
Non-cash disaster losses
(10
)
—
Unrealized gain on fair value instruments
and equity securities
(12,339
)
(487
)
Amortization of payments to dealers for
exclusivity and other bonus arrangements
1,974
1,386
Provision for current expected credit
(gains) losses
(268
)
10,259
Non-cash inventory and other
impairments
19,982
—
ITC sales
47,953
—
Other, net
—
1,807
Adjusted EBITDA
$
46,444
$
14,553
Three Months Ended
March 31,
2024
2023
(in thousands)
Interest income
$
35,696
$
24,788
Principal proceeds from customer notes
receivable, net of related revenue
$
39,616
$
29,098
Proceeds from investments in solar
receivables
$
2,259
$
2,132
Three Months Ended
March 31,
2024
2023
(in thousands, except per
system data)
Reconciliation of Total Operating
Expense, Net to Adjusted Operating Expense:
Total operating expense, net
$
245,126
$
210,477
Depreciation expense
(50,759
)
(32,671
)
Amortization expense
(7,527
)
(7,338
)
Non-cash compensation expense
(13,587
)
(9,515
)
ARO accretion expense
(1,477
)
(1,081
)
Non-cash disaster losses
10
—
Amortization of payments to dealers for
exclusivity and other bonus arrangements
(1,974
)
(1,386
)
Provision for current expected credit
gains (losses)
268
(10,259
)
Non-cash inventory and other
impairments
(19,982
)
—
Cost of revenue related to direct
sales
(18,421
)
(7,597
)
Cost of revenue related to cash sales
(13,839
)
(9,345
)
Cost of revenue related to inventory
sales
(21,892
)
(51,779
)
Unrealized gain on fair value
instruments
12,315
723
Gain on held-for-sale loans
24
—
Other, net
—
(1,807
)
Adjusted operating expense
$
108,285
$
78,422
Adjusted operating expense per weighted
average system
$
250
$
267
As of
March 31, 2024
As of
December 31, 2023
Number of customers
438,500
419,200
Three Months Ended
March 31,
2024
2023
Weighted average number of systems
(excluding loan agreements and cash sales)
259,400
197,500
Weighted average number of systems with
loan agreements
160,900
88,700
Weighted average number of systems with
cash sales
13,500
7,300
Weighted average number of systems
433,800
293,500
As of
March 31, 2024
As of
December 31, 2023
(in millions)
Estimated gross contracted customer value
- PV6
$
9,490
$
9,097
Key Terms for Our Key Metrics and Non-GAAP Financial
Measures
Estimated Gross Contracted Customer Value. Estimated
gross contracted customer value as of a specific measurement date
represents the sum of the present value of the remaining estimated
future net cash flows we expect to receive from existing customers
during the initial contract term of our customer agreements, which
are typically 25 years in length, plus the present value of future
net cash flows we expect to receive from the sale of related solar
renewable energy certificates ("SRECs"), either under existing
contracts or in future sales, plus the cash flows we expect to
receive from energy services programs such as grid services, plus
the carrying value of outstanding customer loans on our balance
sheet. From these aggregate estimated initial cash flows, we
subtract the present value of estimated net cash distributions to
redeemable noncontrolling interests and noncontrolling interests
and estimated operating, maintenance and administrative expenses
associated with the customer agreements. These estimated future
cash flows reflect the projected monthly customer payments over the
life of our customer agreements and depend on various factors
including but not limited to agreement type, contracted rates,
expected sun hours and the projected production capacity of the
solar equipment installed. For the purpose of calculating this
metric, we discount all future cash flows at 6%.
Number of Customers. We define number of customers to
include every unique premises on which a Sunnova product or
Sunnova-financed product is installed or on which Sunnova is
obligated to perform services for a counterparty. We track the
total number of customers as an indicator of our historical growth
and our rate of growth from period to period.
Weighted Average Number of Systems. We calculate the
weighted average number of systems based on the number of months a
customer and any additional service obligation related to a solar
energy system is in-service during a given measurement period. The
weighted average number of systems reflects the number of systems
at the beginning of a period, plus the total number of new systems
added in the period adjusted by a factor that accounts for the
partial period nature of those new systems. For purposes of this
calculation, we assume all new systems added during a month were
added in the middle of that month. The number of systems for any
end of period will exceed the number of customers, as defined
above, for that same end of period as we are also including any
additional services and/or contracts a customer or third party
executed for the additional work for the same residence or
business. We track the weighted average system count in order to
accurately reflect the contribution of the appropriate number of
systems to key financial metrics over the measurement period.
Definitions of Non-GAAP Measures
Adjusted EBITDA. We define Adjusted EBITDA as net income
(loss) excluding the impacts of interest expense, income tax
(benefit) expense, depreciation and amortization expense, non-cash
compensation expense, asset retirement obligation ("ARO") accretion
expense, non-cash disaster losses, losses on unenforceable
contracts, losses on extinguishment of long-term debt, unrealized
gains and losses on fair value instruments and equity securities,
amortization of payments to dealers for exclusivity and other bonus
arrangements, provision for current expected credit losses and
non-cash inventory and other impairments and including the impacts
of investment tax credit ("ITC") sales.
Adjusted Operating Expense. We define Adjusted Operating
Expense as total operating expense less depreciation and
amortization expense, non-cash disaster losses, amortization of
payments to dealers for exclusivity and other bonus arrangements,
cost of revenue related to direct sales, cost of revenue related to
cash sales, cost of revenue related to inventory sales, unrealized
gains and losses on fair value instruments, gains and losses on
held-for-sale loans and excluding the effect of certain
non-recurring items we do not consider to be indicative of our
ongoing operating performance such as, but not limited to, losses
on unenforceable contracts and other non-cash items such as
non-cash compensation expense, ARO accretion expense, provision for
current expected credit losses and non-cash inventory and other
impairments.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240430620615/en/
Investor Contact: Rodney McMahan IR@sunnova.com 877-770-5211
Media Contact: Ryan Bechtold Ryan.Bechtold@sunnova.com
Sunnova Energy (NYSE:NOVA)
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From Apr 2024 to May 2024
Sunnova Energy (NYSE:NOVA)
Historical Stock Chart
From May 2023 to May 2024
