Sunrun (RUN) 2 Aug 232023 Q2 Earnings call transcript

Good afternoon, and welcome to Sunrun's Second Quarter 2023 Earnings Conference Call. [Operator Instructions].

I'll now turn the call over to Patrick Jobin, Sunrun's Senior Vice President, Investor Relations. Please go ahead.

Thank you, Kevin.

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

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

also are obligation today update Please statements and we or of these made as note, being them. disclaim to any revise

the And along Sunrun's Relations replay the An on today's supplemental Relations to website Sunrun's remarks and Revenue audio materials. Abajian, be On to A Mary. for shortly including are today today's website Sunrun's Sunrun's is the after let Sunrun's prepared of posted a Investor Officer, call of session. Mary will available call CEO; and call. me Chief Q&A is turn with Dickson, Paul now transcript, Powell, along call our Investor Danny on over also Q&A CFO. copy with call the presentation

Sunrun's Thank strong delivered quarter. team a you, Patrick.

growth generating well the to continues long-term success for and Our position margin-focused cash. disciplined strategy company

America's to margin, value for streams energy This we superior installs, as creates for but growing company, shareholders. quarter, are adoption, a our more one and delivers proposition rapidly a we clean beat solar multiple by lead our large our importantly, guidance that volume energy capacity customers accelerating value storage

than the capacity and we XX% storage XXX-megawatt in more growing year, to hours compared the of XXX-megawatt than have storage country. prior installed hours of more capacity installed We across now QX,

pace. accelerating our are We

to higher Sunrun customers a and come. generate while margins years monetization considerable storage offerings providing enhanced in value the Our for provide foundation for today significantly

grew XXX,XXX rate quarter, We the quarter value continue our installed the gigawatts attachment represents of we improving this solar customers XX,XXX $XXX across generated rapidly. second this was was customers, to total X,XXX with resulting increase In value country we nearly X.X our installations of an and capacity. which million. nearly in to of to $XX,XXX, subscriber nearly of storage, second over the added quarter, strong XX% customer expect approximately base Our in percentage net

accelerating a grow rate rapidly attachment clean Our power capabilities by opportunity across generation presents America. to providing storage business our powerful plant energy at-scale

$XX because and total increased the our This industry position operating all-time on over our our rapidly results and earning net quarter, assets quarter. cash record utility a installed strong grew of are by set million first This We growth who team possible is we the rate, a energy scale executing attachment $XXX scale by combined committed million storage solar for solution. These capacity. disciplined margin-focused presents powerful with experienced compared again strategy. to increasing financial generation

Okay.

rate in Turning adoption to have news the are storage The and Shift product both In margin is our our to we offerings topic higher the mind, increasing of attachment nationally. know backup smashing XX%. important most increased is of expectations I for on our California we California. battery California, everyone's and over that batteries

customers. remaining systems start All of it a product represent battery value dispatch valuable. our year. customers solar and X/X in most proposition our savings-focused it's Over of battery backup, new it's offers sold X/X strong newly our since the when our Shift doubling of store energy for which when generated battery of performed California, products the a also The home

storage Nationally, the XX%. excess for are of California clear. policy we Both battery Let in backup prior seeing be attachment value superior provides and perfectly solar-only storage customers did products, Shift to new than transition. rates me Sunrun sales to

share gain generates customers Our storage and market backup a superior expanding providing opportunity. leading to offering in margins position and

that As of increases strong and impacts to in value sales storage subscriber California net through generated lower volume. this over values offset mix next total quarters, the higher expect we will installations flow from X near-term

representatives taken sell has policy time. sales the construct new to Training under

seeing as mix a proficient of become recently XX% and sales significant representatives than install. opportunities and before. customer to up which new are the product with increases storage, takes in rapidly we bundle are and permit process We value higher increasing sales selling learning this longer to Because explaining our because of

transition QX is period. a

in be We growth are half profitable with still second QX for volume a and mix generated. our year-over-year higher more up year-over-year growing a still pace. installations in even with the is at strong value will outlook X% growing

pull point we methodical moment remaining and when a at will am our the sales leading forward with year strengthen we confident faced look the offerings of expect this market back underpenetrated, our the we is With the market customer-focused, transition. in California's demand broader sell will we earlier our massively continue optimize teams dramatic in disciplined proof I the how saw by further up continues as following market another environment accelerate to challenge. they how position to build as to new and

May, in month-over-month direct our July sales business. in and in slower-than-anticipated June sales rates Despite strong ramped at

week-over-week down to X/X performing improvements compared exiting our about business last are significantly better are year with and We seeing the July, in direct strong month.

we understand year-over-year this are are on we am will environment to the value for and in to trend proposition confident growth new able and continue offer, California. I adjust consumers that track As the regulatory strong

it's remains to maintained mix important a the California of outside with many in the QX is and XX% we demand July. this gets note robust, The outside improving operates is diversified and through running growing been near-term are offerings. in prior Sales activities rate of of June robust in attention, line dip compared higher-margin offsetting to California the California and of have been benefits markets. of California California. bottom year, much lots has volume growth which by business, a While

Our is growth on story creation and value track.

priorities. other strategic our on update an to Shifting

improve they customers their journey provide where meet to their is solutions independence are energy clean goal lives. on Our to and

integrate capabilities directly them is offerings differentiated best appropriate, in-house. Our or alongside as available the develop fulfill to either offerings most these to and build strategy our partners and the

residential leading batteries to valuable advance. distributed continues to power Sunrun's plants aggregate form work and

PG&E exclusive largest its Power power with Rewards, States. Peak United residential Our distributed is in of kind plant partnership called the the

program adding to grew last Over We customers available X,XXX we the for up further now megawatts customers. that with XX by quarter, have dispatch. X,XXX participating

revenue. the batteries is basis times. a customers Starting yesterday, both home for peak of compelling, our and both meaningful enrolling participating during our for recurring program, source of fleet critical Sunrun grid by value the and per been dispatching has in customer The of is a on supporting additional

this customers and which $XXX, found entirely their subscribing program, receive value initial above As when money, additional is Sunrun. an part in with of their meaningful enrollment expectations

our with are rapidly fleet Together energy our assets. the value growing proving we and of of dispatchable customers PG&E,

the the previously power. an be thousands baseload As through Separately, the power blackouts U.S., rooftops coming are of from as localized emergency secured the helped the working finalized program process in first will megawatts last daily a distributed to with in and is we have services stands over contract Puerto exclusive develop plant its Rico's announced, XX we kind of program impending. the X response cycling deliver regulatory of company utility months. to ready policy rapid PREPA customer that our as years, providing soon Sunrun provide power when

not recurring value which and providing today. metrics in largely revenue expanding streams so are for important, These customers to Sunrun, are proposition incremental our reflected the programs

the Our services as for per realize will assets. we increase our $X,XXX growing climatic grid further only programs increases strain conviction And these capabilities. or need experience in NPV with and events grid these that more its from can customer the ages

batteries XX,XXX X% our customers, XXX,XXX fleet. Of our of today, nearly have representing

expect attachment for in with customers. launch rate XX% of batteries simultaneously for We new our a of our offerings XXXX offering, the retrofit while increasing to storage remaining customers

storage-only solar. also meet customers We a demand looking whose be for ideal the might offering but plan from launch for to home not resiliency, to

but now position storage look storage, Sunrun nimble, can company panels in as with we unique company, Many Ford. a enable provide energy a from also electric generation a from controllable advanced technologies, as energy massive control such that charging partnership are backup smart EV solar and build vehicles SPAN, mobile energy our to at

Our these dedicated Sunrun strategic experienced to opportunities. sales lead for provide a advantage teams in commercializing

invested product venture in the in we first unveiled SK Group Energy, June. of details alongside their that Lunar

Lunar so partner key are accelerate excited work electrification. as a home to We to with

initial platform is to services advanced expect be plants key We a across storage and quarters offering available for as grid Lunar's their in we America. us the distributed differentiator coming energy massive build

direct for also solutions, by are to teams deck industry to SnapNrack SnapNrack, sold installation to the as options system called technology dramatically rooftop independent increased fast, including company TopSpeed. we our solar and leveraged they mounting with racking innovate own continues the products efficiency. solar broadly leading

meaningful focus cash significantly operating and of coming Margins pricing, and ITC a hardware maximizing by on focused product cost delivering margins, expected easing inflationary strong which support pressures. from shareholders on to for in We from our are decisions. and will tailwinds adders, go-to-market general are improvements value the A continued quarters mix efficiency expand generation.

growing to organization. maintaining continue or the We volumes our metrics, levels meaningful installation operational efficiency staffing in throughout make while reducing advances

few include reporting equipment, site job our numerous delivery job shift which are there While of to enables national noteworthy initiatives for underway, installation site crews. ones our a our of rollout

in from process We metrics satisfaction efficiency, are strong labor employee safety improvements change. seeing and this

efficiency, a benefits, investment too also in intelligence. potential quantify made We it our increased believe cost and a unique meaningful experience. reduce customer cycle to improved times presents artificial drive It's opportunity to recently early we but

As our of an the encourage margins of example we balance country. stronger recently growth, our strategy optimized storage across prioritize to to and uptake efforts

Arizona, We approach. operations also shifting partner-led reduced affiliate footprint direct in to our go-to-market an

in driving generation to meaningful this committed are We business. cash

in expand We as Danny improvements $XXX cash are recurring section. higher million quarters further targeting this his will of in annual million realized. or upon are run margin $XXX rate to generation future

we both our the margins for and and create cash At as ultimate clear on value volumes we to Sunrun, maximize generation are shareholders. can focused most managing

cycles capital our underwrite through we be prudent in a costs. operated drive over of hurdle has proven again Sunrun Importantly, and a excess that and can rate of has the XX-year current operator sustainable to time with variety history growth. new its value-generating originations

helping across celebrate safely who drive I and teams am but certainly the who and efficiently. customer-led is offices, want and Last, and our contributions Sunrunner transformation. energy our revolution so and this I helping culture for doing least, in each are not field of the this country, thankful it from strong the every accelerate practicing to

customer satisfaction to a which of This the quarter, want outstanding top of productivity driving great time the outperform Vegas from who customer have higher the of our Crushing drive teams at world-class on our sales these measured also our mix entire to branch, our long-term comparable for the and Score Promoter while providing to team critical I to top by a country. is a Net safety, in continued country performance California peers, also recognize as our business ranking driving team fundamentals install, experience. brands our thank in like XX I operating would value. to want recognize metrics. our Las it of to is all I margin

contributions We your are leadership proud and at of Sunrun. your

let over With to turn that, call update. financial Danny me our for the

Mary. our Today, I in an financial quarter, capital outlook. update and the you, cover on activities Thank will with along and operating markets performance our

the quarter, to approximately second the quarter for subscriber first results Turning the on approximately were customer In XX. XX,XXX, additions. XX,XXX including additions Slide

the Our period. A years. subscription quarter from represented X and the level deployments of XX% in highest XX% meaningful in our mix last increase

model and subscribers activities customer subscription Act, quarters in indicate which likely continue credit of the to the towards to more the adders recent from only is available to benefits shift inflation in ahead. Reduction additions sales mix the Our are the solar tax the forthcoming

installed guidance and increase a XX% year than significantly the quarter XXX XXXX, megawatts. same from last energy our megawatts of the of second approximately Solar XXX was XXX to greater capacity exceeding in quarter

affiliate dealers outperformed among teams increased strength executed Our installation industry. in captured our QX and the partner as of subscription quarter our the well in significantly model in the channel share

We and over XX,XXX installed have systems. now storage solar

rates for excess expect Mary storage the nationally and reasons call. We quarters will recent in of will on sales meaningfully the well in earlier mentioned installations increase our rapidly ahead grow XX% are attachment as

by several typically Our dollars offerings per customer. carry backup thousand battery margins higher

representing our XX% expect than that subscribers, California higher offering also prior margins X. networked NEM of gigawatts solar-only achieve ended QX in We with of XXX,XXX an under solar XXX,XXX are increase We approximately energy Shift year-over-year. customers to margins capacity, X.X received and

XX ARR, revenue with generate XX- we the our XX-year end over the significant $X.X QX, for XX% had recurring the year. stood clean energy remaining over up subscribers under annual At nearly recurring over of or provide. revenue at most of an Our same years. last average period life contracts contract or We billion

approximately line was a and net $XX,XXX figure our Turning subscriber guidance subscriber QX, the in sequential increase $XX,XXX in delivering creation XX,XXX Slide with XX. cost In value to to of of approximately a value was $XX,XXX, QX.

tax value to thus exclude and credit and subscriber tax with upside QX net a value adders. continue both investment Our assume margin credit XX% the subscriber associated any

complete ITC the will expect to We installations our system reflect not providers, our capital of QX. adder net Although did again will we energy currently to our footprint. QX in communities the begin and retroactively to but January apply our so we through all with XX% estimate geographic apply subscriber necessary adder value for steps energy for the with adjusting new approximately doing this community XXXX, even X, as without implementation value in work

decline next to the flow On $X,XXX will net margins substantial few or kilowatt cost a as basis costs hardware and and, our solar for but reductions are beneficial carries key increasing higher impact may and easing nearly cost we components, creation costs start through costs. which hardware work hardware are system, battery be quarters reported our by system X.X backup increase higher expected across the chain We an few per therefore, over mix of by quarters. costs should our through with like-for-like inventory. install trends a supply which over storage, next to unit seeing obscured XX% conditions nearly These

almost generated, value for without of represents compared used in which subscriber the value subscriber year, less $XXX second the year. period the in the even additions the to net was by the rate favorable prior Total number discount adjusting quarter. an million This is this multiplied doubling

are which we to metrics X% discount using value-based updated last last quarter. present a Our presented X% rate, from X%

investors frequently discount ease on across As of a enable margins reminder, unit our enabling reflect Instead, we net that provide the rate update rates, obtainable the rate comparison we generally calculate prefer interest current ranges not to advanced deployments. to to cash periods.

net addition the presented In added was results have of a thus QX a heuristic, this cost and using last forma approximately capital to clarity, the which we is quarter which $XXX XX% for our QX, observed subscriber value up again basis, to total pro generated cost pro compared In rate. capital a this forma X.XX%, providing for quarter. net of $X,XXX year, million, X% using on direct value subscriber in value of discount average was which

excess of takes our X%. cost underwriting mentioned, into financial a Mary As already account capital in well of

the project to subscribers financing at gross to at discounted the is sheet structures, tax balance capital net distributions maintenance expect distributions partners assets Slide quarter. of assets earning on and Gross equity to Gross cost. from our now cash earning and assets $XX.X partnership and measure XX. Turning receive were to over flip X% costs, flows billion second the we end of Net operating earning equity all a and and unlevered partners, time. of

all plus values dynamics the Net we earning quarter. net billion cash gross as end by over were favorable assets working is less and earning assets increased second quarter, driven by to at $XXX of strong assets this earning Net prior inventory. debt. reduced subscriber million more $X.X period compared capital Net the over assets the earning

The grid electrification value base our in upside selling not additional and creation these opportunities and reflected services services metrics. long-term products from high-value customer future are to

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

interest through customer rate to installation. exposed origination principally are shortly We fluctuations after between

either with installation, loans are debt level long-dated securities interest Nearly fixed have been nonrecourse our systems or our interest insulated of this floating Around fluctuations financing rate the as all that time hedged swaps. debt. rate rate coupon near-term of from with project is financed is

earning used for do net in adjust current costs match installations. to assets new capital As discount the rate not we such,

$XX quarter quarter. in an prior the $XXX cash, ended to million increase We total with of compared million the

XX. briefly and capital markets Slide activities our Turning to outlook on

to continue finance runway. We a robust maintain project

beyond of through second projects for closed capacity deployed term tax provide of to As sheets was us executed today, megawatts expected quarter. XXX and subscribers transactions with over fund equity what the

quarter of has subscribers. our us megawatts warehouse XXX billion the Sunrun to revolving activity. runway available commitments in markets after for loan $XXX approximately projects nonrecourse to in transactions closed, strong in selective capital be its This million senior allows fund timing Following $X.X unused capital

our we nonrecourse loan in the done warehouse scale several the to extend we times quarters Given few of our upsize increased before. plan business, and have as coming

We new transferability provisions actively tax adders to Act. Inflation are also leveraging Reduction by expand evaluating of the options the the routes from including various credits, substantial tax to expect amount efficiently credit monetize we credit tax

We currently capital weighted at a see nonrecourse our senior and project-level of approximately average debt. X.XX%, costs subordinated is which

our both our proxy influenced longer transactions spreads and treasury credit of as as by such yields completed data on and observable Our term, as rate cost for indications a realized by base terms are capital peers. as us across transactions well market numerous our

cultivated The recognition high-quality in sponsor us affords our capital. of deep to our providers many relationships customers, and attractively have capital performance with we multiple markets, priced the as access trends strong a

out closed loan. Demonstrating portfolio billion project-level almost senior year-to-date, involving closed in this have subordinated with private we a we and financings, last access, term a week, commitments. $X capital a securitization these Together

Turning now XX. on to our outlook Slide

persistently lower-margin from attachment range, rate we markets, year high XX% We between installed believe but interest might as plan our be in solar we California. certain storage Last will guide now end in install to higher a noted capacity growth quarter, increased energy comfortable continue in in to environment, gains. market cycle the we of decision result range XX% times which be growth recovery slower-than-expected share and for XXXX, feel for and reiterating this around a exit this we the full we to rates

growth to adoption storage customer is our backdrop, values priority and our In market sustain and this is strong XX%. very underpenetrated cash by through growing value to rates the among services long-term believe increase higher demand generate of efficiency and products continuing scale further. to growing continue We long-term can and

installed in XXX of volumes QX, the decrease second XXX second megawatts. reflects and to In we range This sales a in the quarter's level capacity order in quarter's solar will expect energy decrease from level California -- from in QX. QX, in the be decline will which impact this

storage the nationally storage achieving in near-term our install rates also as upwards. completions to times, creates on migrate which Our lags installation results in rates cycle sales substantially success rate attach of higher longer attachment

in part the be battery net year half, we value in net subscriber mix, from factoring higher to see higher by much the the in expect materially large of subscriber the values when expect driven year. We half QX, values second compared first our to into net of systems to subscriber strongest the backup the particularly

including adder QX. the community in We energy anticipate starting ITC

expect we gains most low volume in While and be distribution materialize starting income benefit content fixed likely resulting business. us the equipment will near-term in our benefit lower Offsetting headwinds domestic sooner. although are and could XXXX, potential to these cost less their adders absorption favorable from QX, in

have in inventory increases, working cost Recent chain greater and capital input higher Since interest and supply headwind the us of a cash. improvements. a $X resulted costs increases rate balance. We of reduced higher in we from the a decisively pricing XXXX, pressures to billion with inflationary environment, realizable start responded operating which faced efficiency generating and proceeds and capital by meaningful than higher dynamic prevented needs

million higher of quarters annual $XXX as in million cash further realized. Given $XXX rate our now recurring to future or are margin actions, generation we run improvements are targeting

in finance in debt, cash equity-like our to cash we we nonrecourse highlight excluding past, our project level change on any and parent our using equity changes XX. tax described financings equity Slide have balance as growth measure the because we the As we generation debt, as and

lumpy lumpy, Because cash project finance be timing can be also generation quarter-to-quarter. can

to quarters deliver. details this that but that, the provide in to on let We the generation cash timing financial guidance on plan be specific including expect the quarters, outcome Mary. to want coming more turn me more to -- in it clear is back we With

of team and strong working results. do work Thanks, purpose deliver hard for am to passion we so quarter helped appreciative our our Danny. whose I commitment the incredible another

the our company, continued energy value open on driving business focused lead Operator, this team as and accelerating embracing clean customers. our and our and questions. the extending is partners laser our America's massive the momentum, strong more line shareholders, across let's for efficiencies Our generating shift for

[Operator Instructions].

from first Evercore is Our West coming ISI. from question James

Congratulations massive around very that. really on rate, I the questions attachment in battery impressive. pickup have X

just margins -- around what temporary the an higher I more earlier the is are Or somewhat volumes? they actually than the lower offsetting some in on attachments, think come at margins offsetting volumes. lower said you batteries, First, it that it offset? that Is

as we're our the like with team again, and customers. mean, the it. work the and said, customers reality we as I mean company so I are, of to storage, well of our thrilled want is our Yes. I appetite deliver the

excited So much And significantly products we're about every priced that, essence, momentum value lot more. customer see really selling the customer worth we excited yes, a produce because very every going by we're forward. now higher we're one, they and in is of X instead

expect mistake, sales the But to is the and again, for side hit see to on see make building range. our hit target we year target no we our that momentum again, the

services, And for Okay. And playing have see Do is with with guys, how that know of be you do on guess, then soon? out? you I utilities think will huge evolution accurate? you the you how two, that you like do you working other PG&E opportunity Got which see evolution a huge, here? the looks it. grid working now? one, I you

XXX%. about Yes,

under heat, former we so for utility events. increased CEO were as scale think time building seeing, a plant before, climatic the all as James, different showing as principally America exact at power you're described across -- I've same of where real grid significant stress and just capabilities actually is the strain I long,

to future. per of we're potential services sort looking So lot mentioned, of grid a NPV It's as as $X,XXX to an why continue more uptick. look to expect from absolutely again, minimum the but a a yes, at -- perspective, see customer we seeing we I

Goldman Brian Next Sachs. question is Lee from from today coming

rate James' about just and on the attach there. Maybe battery high question margin accretion first the one, follow-up potential a

you have dollars customer subscriber battery a about a all in the you sure math just incremental think what a subscriber past, between I a to is? but of have for couple maybe can And if is a sense a maybe value battery that the still battery backup us opposed maybe of true, versus customer? Not Shift And accretion of value as customer talked different then a solar-only. incremental thousand plus then give it holds I solar follow-up.

a Yes, Yes. Brian, Danny is this it per few thousand mix. dollars the and customer could speaking. be as we to blend

the we national not said that's that's So XX% back a on just call, and California, greater in up that's occurring. event than

through get noted, battery do we deliver installations as longer. little So while take that install, and our a we've pipeline to as like

quarters, we're coming the is customer planning what see few magnitude So pickup could over for. couple dollars thousand per a of of we

Okay. would That's higher enough. sort in Fair of that great. value into the substantially as obviously, And guiding that you're subscriber feed half. second here to

run million range? Second to annual driving recurring that it's a $XXX range. what's the your all? million It's give can of wide maybe impacts generation. said. lumpy, know cash you fairly question had us just a sense at you around $XXX was financing strategy, rate if I as it I How wide But

I know in practical seen direction. maybe consistent or negative metric sense introduced gone a this to this past, past, just in the get and forward? past metric And of mean in kind you of of going the I even going to been feel the recent what And how is but tougher like it's we've it's implications for a

maintain thinking trying consistently how about implications-wise as just get to going cash as forward. can sense I'm how So a for the you you're you think well this generation

dramatic strategically, in last part I we're that start we and cash the driving it saying then and of over interest And of the That's pricing the with And also did the been coupling to rise, And business. increases where of we're managing increases, events was with wasn't rate happened. That's target. that rate is Yes. Thank had although took highlight efficiency it year which an prohibitive what towards. we would just the cost question. off those to us by the inventory some you the margins increasing supply frankly. but it speed have chain, for the that magnitude the the were the gen, we that path, and balance working in commentary, interest towards.

our of volume, cost battery make environment where kind some So plan again, of as the said the we the general our we business ITC as capital we'll backup around we chart adders, now cost where mix, are of future, capital. current out and assumptions reiterated, of now, Mary and do on I for

recuperated have look range, equipment maintained of external factors And rate kind like that we as increases. has the that happening effective in a So interest on we in the a at what's and cost. few other environment

ourselves. like company and we relate range that's overall as full expectation, stack micro million as about of from think we all of a cost for kind that an level, to level, put spend that $XXX reasonable we percentage together, annualized target. we frankly, us the And working even million that a the macro $XXX to becomes target the And think of capital, and on a on basis, net a from have

Your question of Bank from coming Julien Dumoulin-Smith America. is next from today

question as you the Following content we credit. storage could than and you're year a especially cash of see a better with step I higher much range Transferability impact really of million function over the that remarks million attach next on here that that disclaimed rate But $XXX talk here tax domestic on anything up remains monetization numbers. and I attached how $XXX XX% change the flux. in to reflecting starts lumpy could last bit on mean, in know time. about to more a how specifically you can be? little not

over this that say to you clarity get to tax kind When pivot the to is cash? on really just few that next the quarters, of credits waiting

Yes.

observed a that's mix, backup of matter think installs. battery through timing some a I that seeing putting sales and and we of like on factors in So highlighted the our ramp I the model

are about formally in talk ITC not, starting that that you are to the that margins. and is I of obviously, in we communities be of about more as adders would and cause realized if running the get that things basket the system, kind get up as will would we'll in energy So to we lumpiness. say, mentioned,

And timing it. we would uncertainty those domestic bit content, will and more will do more a and over income as be We we then low-income single will time phase domestic of over clarity, share get think and on we exact phase the have of a time. in little that content event in but low

that a we is comment more do several and markets. capital with have of up into the installed deals, out into lumpiness year the markets them around fact as we them the The capital events pools assets have ready scale turn fully out term

you and event sometimes hitting period. you transaction be in a a December January cash could And different might November, have get the that might slightly or

not at that's was number, quarter. the annualized quarterly why as target. That's remind over folks target, I should to individual annual an more it point we're So to speaking an on that's a quarters one any look but that we think opposed many

quarters sounds up next few in the like over Certainly. Right. particular. will It filter it

and delta when market inventory cited in you current especially in delta when just on of recognizing that point think think the to prices about and right? silos and When number broadly about digging you one equipment, get market And current it, pricing? you're the given when Just you what of is here. that which between you these

Yes.

QX and would balance probably XX, decrease could one more Slide see, using say, recycle that and again. happens inventory detailed an example more the The guidance So timing. -- on the elevated I'll of again we I and heavily you it's levels. does present directionally, have the year on and in hit but the noticed that that over system

current reflecting those numbers giving the purchasing are activity business. as in We

we we lower. substantially in getting the the to have with show the elevated a just QX of inventory lag there's we on prices equipment line equipment record achievement cost sight install So that time That's and because level. with the

couple see come a it's So to of through. that quarters

X.XX%, why Got that it. And number?

day, that every more rate, the math. -- several driven at big there in but like a We a credit I at get several observing are the a we're scale It's base then solar by very of capital market, are a day, look that costs longer-term market, spreads done. are -- our points We not function right? the deals times look should and than I data X-year residential

there loan points its that last spread a over compression basis think priced transaction today transaction. a that I from had XX was of

things we're all the reflecting environment. capital markets these as again, evaluate of constantly we, So

next Andrew today is Stanley. Your from coming Morgan question Percoco from

we about noticeable relatively should about order XQ. this to terms half should time of wanted XXXX? of thinking how back your the Looking can we the on see net bookends pretty kind last Just magnitude of combine of slightly provide maybe circle of Should the in year, there growth with And subscriber what back half year. uptick back total in think way in you generated seen think we when guidance it be you year value similar any differently, of we've the in customer Is for XQ in value a did to about to it? in some growth? how you the

really moving you're what profile mean different as a we I seeing Yes. described, forward. like customer is,

So to much margin customers. we are higher selling

strong part So of the see we're that And attachment mix feeling Danny, we're year how you consistent really selling second about more we're from creation perspective, a storage the with the a to the the our funnel hit context half perspective, just on. whole the rate. specific is we and seeing question of and that big in do -- guidance. what product value sales increasing again, of want

the creation in give the which rate to up bridging but Yes. per in you time. going the little I context changing also of helpful value that bit discount Happy here, period of a is of think subscriber

and the you adjusted if discount get same you $X,XXX adjust period interest rates metric PVX for quarter, period if and QX the over as you current in total increasing our look you despite to number generated the take and couple PVX rate the compare time. a number total that dollars at XX%. up year-over-year, and talked a we that if is value of of we referenced, is then about, And And year-over-year we hundred generated value that compare, to significantly XXXX, that is per look higher which customer. So at do you $XXXX, a

then talk things, the adders is -- the battery we'll here and other as And we'll a as year-over-year get reiterate on and potential the more as about the customer. dollars attached pickup then substantial more outlook, with per thousand well. So we again, far lift that few clarity as

Got question it. plant opportunity. one power follow-up just maybe That's virtual helpful. And the on

included opportunity field, announcements in made or itself. power hours it percentage over in interesting have growth some that about untapped And curious have space. what already XXX-megawatt does You've is the like plant existing sound days in of amount batteries is last retrofit you a in this storage just forward, the few potential of of virtual that curious in I'm which an just so base. the of going obviously in customer you the But decent and your agreements

untapped been The acceleration and out space acceleration and perspective we're proposition been that grid really And -- significant. leverage grid to strong again, starting really and of these in can one services seeing a a perspective. the plants that that the power Sunrun appreciation from strong of and do growth is has has the the potential distributed how value of for figuring of a these years many things assets of to from what the really see --

a we huge terms We customers relatively things are then that think And looking for of now, one device. launching already why that hours base. percentage they let exciting a we -- also customers have megawatt the total we our want significant so we be potential well. of existing that's the are also and for It's doing of retrofits us as ahead. storage a really, forward So about small the is when control right that they in part of really want think it's of be storage a have have going know solutions only to to customer they to list available

is Guggenheim from Partners. question next Your Joseph coming from Osha

I completely X questions. unrelated have

not be I'm that hearing equity capital growth. Is to first, your extraordinary can barring into or generate of commitment kind you that what this I to are going recourse raising to fund circumstances, to cash? comments read The is corollary the

you're That's hearing. what Yes.

unequivocal. And the Great. to Lunar. related Very question second

that is exactly string? there that to panel least to a so what is. that inverter you the at in understand product installations, I drive Just use I'm case it the trying can understand, some

Lunar? do Paul, want you to to speak

Yes, of course.

efficiencies really create of pairing about a full the battery speed opportunity So actually excited consumer situations. we're the us Lunar The inverter lot with up in to battery the for of deploy install backup product. our and more installations

it So we're operational apply more about as to situations. well as ability excited the the in efficiency

that But can a inverter of that drive case it the that just panels, if I to clarify, I is -- string use to? to want

Yes.

today Our Harrison next from question from Kashy is coming Piper Sandler.

broaden wanted one for me, there's first helpful customer California. of discussion very color to And to So costs. costs a around the equipment acquisition I

You've outperforming and indicated them. smaller you're year-over-year maybe down post installers sales X/X are smaller -- installers

the that in cycle there's maybe if because possible commission the are go to dollars necessarily enough sales and And for run California. for reducing so industry given the in economics creates improved economics down. teams Or customer where in costs, are acquisition where alternative this is maybe I'm by if not opportunity for still come an wondering just the solve to we opportunities

Yes.

over a value last I X.X%, selling CAC We've X quarters. think we of decrease X% the Sunrun. recognizing continue -- to seen X% people the see at in

quarter, X value CAC So the our subscriber quarters trailing as last fallen increasing. net every is sequentially, has

of that place place taking going that seeing as take well. forward and So kind forecast translation we you're historically actively

for just my maybe then follow-up. And

by the maybe by it initial looking sequential confidence guidance, just midpoint of a in uptick I just fourth is and the at that sequential us drives the to implies the maybe you de-risked through improvement? megawatts And but Can -- outlook I agreements? what Just the prepared commentary, currently missed XXX perhaps if apologies how this pretty at think walk big signed quarter. over in the much

Yes.

sales growth year-over-year of outside So California, we've been activity. in XX% seeing

seeing of outside really we're strong so growth California. And

quarter-over-quarter and entering seeing, confidence we bolstering inside growth we're days would and this end saw the of of California, into categorize first our the period the of teams from in explosive of this quarter weeks the there, strong activity throughout specifically I sales as latter outpacing number. Speaking few quarter, our the

coming Colin Oppenheimer. Next from question today Rusch is from

And Within the then into trends transition system actual sales? a bit you're getting process, also terms particularly as rates conversion of can about the on converting NEM on the lead into to you sales talk in little X.X. you size, in California, that

Yes.

lot don't a inside competitors a solution. systems of are because they Shift have So downsizing California

down the to way savings, the rate to systems. preserve size So time on of customer situation use is given

either a systems deploying or of full Shift Our little portfolio in excess a are battery not has experienced of that we XX% nearly have as deploying the we're backup.

dynamic. as size not decreased that we're system So susceptible to

experience watch focus something very are Conversion customer us. a on constant conversions driving and rate we continuing is up focused and and for is

of monetizing the the little you plant Can still relatively assets, a at at bit monetize go-forward portfolio look power talk dynamics and to increase functionality in you as nascent. higher potential those it's then level a the and on And a the about guess, pricing virtual those the I assets basis?

with of going now, grow your Well, at said, opportunity right $X,XXX forward, per customer value NPV a just the as we we as to point. it that look to

energy you many It that fact like utilities America, So anything a project in have very largest one in conversations. new And now takes to generation partnering time is the substantive other leading is very that's -- again, the space. by profile. I that of heartened feel on high

a of and proposition storage customers to it. have for and for value see for the reasons, customers with just we PG&E, and continued solar California see they months their went not as of all financial shareholders, for way dramatically it storage, found that $XXX back customers. upside, for again, to but So impacts resiliency about sorts but that our went Again, access program I who money, the ahead us nothing and basically with and few which Sunrun talked

really and see strong I this shareholders. opportunity as Sunrun a our for again, customers our and growing So

question from Scotiabank. from next is coming Richardson The Tristan

just strategy seeing direct channel seeing business business. just kind direct just you heard on prioritizing the box touch the grow what what you retailers, of long-term obviously strength there, to the in and foot you're the of could we've Maybe you're channel from big traffic. if curious, talked markets partner and the about some et cetera, channel and kind Maybe

direct Just maybe curious the channel. on outside

Yes.

this business in affiliate quarter. really our as you as So performance our we partners -- from them last we call had strong saw

to versus see but a to have scale smaller continue biasing the long get kind platform, tail towards We and players. driving on attracting our around held strategy to strong demand long of towards

quality. as on We focus have experience customer a really as heavy well installation

would holding transition we're standards our remains growing platform, quality demand of say, customer ensures those installation kind the and we and and able adders, to I while experience throttles join so for require. that dealers with And volume this the that maintain of to IRA demand

is the you -- $X,XXX the cost the should could be example NPV incorporates we this on on just over to you're hypothetical that think there that as medium-term high-level some the of I the X,XXX in period should we upside Or some of side, then gave? seeing savings think that a And battery of Helpful. mean, number time?

you referring And grid Or backup number? the to it attach? are services was the

attach, sorry. Backup

Yes.

back one dollars the I of But from customer it's rate -- more on it thousand system if we the a few walking So solar that. you than could in think yes, business. only attach a impact are get actually to up per a it's as little be the backup, meaningful weighted overall up,

coming is from ROTH from question MKM. Philip Next Shen

a the to cadence guidance more. bit Want explore

up, driving the on for already, installers know but guiding could for QX bit I XX% it you average, bigger down X implied picture down then cadence historically, historical are cadence, but then XX%. quarter-over-quarter. QX, basis then XX% the but X and weaker wondering about QX up guide your you're XX% the QX installations installs past the over quarter-over-quarter And years, on talk I the over So reacceleration years, what's that if past quarter-over-quarter a be little to about typically talked now is QX you a QX? the was are

Yes.

and guiding we we're time the what as multiple and think for the clear, year-over-year it same I obviously systems entire at year-over-year that year, happened going that QX, product is this selling be to like what we're to for higher be hit said, customers. we're we're up dip we well. value, pretty up to is clearly That much Just had to seeing

So timing. sort impacts that installation the also cycle and of

of products but overall we why, QX strong very percentage into, a see again, moving customers. as as hit, really I we're quarter multiple that's as for our solid So transition a

Great. And and then shifting California. over to XXXX

then guys -- know asking guidance. originations, maybe I guys not work flat and you be X NEM I'm about guidance well in in our and have you out here, looking And you you today. are you So won't we give talked break that guys don't a for California doing this really guys is can indicator QX with QX have guys. leading California in But to -- in a maybe or last flat for that if through be at QX. the not a I growth what originations little bit. year-over-year if QX on in And all that growth that on and maybe you year-over-year was suggests talk could wondering degree is year, are sense guidance very could XXXX you you periods, you that for strong

this this you growth wondering, year. XX% XX% to was currently I have for So

you an do you think like XX% level. to For next accelerate do to the guys XXXX? XX% think right pace this Or of in growth feels there's for you year, kind opportunity

Yes.

We're see is actually when think So that happening mean particularly you underpenetrated, outside and we in we're to bring And about I really California hard. seeing and pretty what's California opportunity uptick, we hit look California, that again mentioned, significant multiple we I growth massively California, volume California, it products when at look we're seeing and the outside California. I think as to seeing customers. at again we

interest gave guide again and to country California that, year. and -- for XX% to to rest XX% in our again of we for on we see And this consumer looking solid rock what any opportunity very we're guided, we the forward. the is reason see active again, tremendous So that don't we're believe continue selling, we

is from from Levy Jordan question Truist next Your coming Securities.

You the channel and affiliate start to in that... strength of kind

you. Speaking through Pardon cannot me, I raising Jordan, mind your microphone? you hear Would the volume?

you me? Can hear

Yes.

thoughts. to your wanted Just get

there heavily some in of get channel kind any trends also updated a out the made you wanted opportunities install more key and to to You you're seeing thoughts market? pointed on the the affiliate further I and of just channel lean changes as mentioned as the for your Arizona. to you affiliate outperformer in that

our are partners our that installation lot and constantly customer strong the and we continuing a that And and of I focus piece held Yes, working demand experience who our very on partners a long business. and create opportunities XX% adding have our business But are platform criteria around stated of about it's on we meet see We've partners XX% since of see we to quality. to earlier, to generate that platform grow. to excited affiliate for phenomenal got and business. for as join I think

the the and per in And was drivers key kind sales of marketing that of decrease customer? behind one sequential

Yes.

cost caused for kind So of far quarter. one-time as CAC in of cost, is but decline affiliate steeper outside a our sales neutralize this event, installation the the as that business, recognized the which

X As CAC of declining. sequential referenced, we've previously subscriber quarters seen value over

BMO Capital Next question Markets. is Thakkar from coming from Ameet

is you to million million that that kind associated Just $XXX traps appreciating different in there kind with that, kind times in will cash it of But available generation, back kind cash coming of forms fashion. to will cash to all of come et $XXX unencumbered? Or of cetera? be the and going be of to

cash, of Yes. We do deals. the thinking have the the weren't amount. finance amount as that restricted reserve view nonrestricted that project as really about we our balance as cash, of growing the it, nonrestricted you so a in But kind called we unencumbered we

quick. real Okay. And then just

have of times of of been was other a and have I if most kind states your share prior which there. about relative you terms regions guys could to wondering kind of sales You kind that mentioned have of in couple impactful accelerated periods? of through states kind

future we you that are question? states growth which Are strong in can we're operating states not seeing sorry, you growth repeat Yes, asking that or in?

Which seeing in states growth strong now? are you

Yes.

we've California, XX% growth. of outside So blended seen that

those states Northeastern up. out, weeding averages pulling are Our

really So and robust Illinois we have in Massachusetts specifically. activities

Thank we Q&A. allocated have time you. for That concludes the

thank you may We your today. for disconnect. now You participation do