iSun (ISUNQ) 10 Aug 232023 Q2 Earnings call transcript

Greetings, and welcome to the iSun Energy Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. And a question-and-answer session will follow the formal presentation. [Operator Instructions]. Please note this conference is being recorded.

the to turn Conway. host, now will conference your over Mary I you begin. Ma'am, may

operator, Thank good and you, morning.

operating second pleased iSun's we and Conference are Call, for We to where will welcome discuss of XXXX. quarter you to results the financial

our of will financial Chief and operating remarks on lines provide Financial prepared the along Officer, Officer, in results. for outlook overview an with update will Jeffrey Peck, questions. our will Executive the XXXX. we provide XXXX open Chairman address quarter, Chief to After second our quarter performance John today, an Sullivan, the any

These As that to iSun's may comments risks actual these to make on and Investors that are differ morning forward-looking expectations. the non-GAAP statements made disclosures a management's on www.isunenergy.com, as statements obligation that which from we statements at results statements for forward-looking reminder, Any financial subject includes future in Such or earnings today, no was could released update management's include refer cause management uncertainties measures. future. call that website found are expectations undertakes predictions. today's to and and of and the release can be reconciliations to this financial

over to that, will turn CEO, now With Jeff Peck. I Jeff? our it

thanks year. and review Good our this morning, the I'm you. share XXXX of of on joining to an remainder pleased plans Thank update everyone, for and quarter today. us the in iSun’s second progress for

revenues we terrific quarter our do. beat We precisely, the Street's robust win strong we consensus. up our losses Scale business. customers what above XXXX. had the pleased well we importantly, with team And year-over-year, with reduce a the generated the we're the XX% new We our serve and quarter. topline as more business, on doing would of are has said in It was performance second a than

EV a excellent satisfaction is short-term helping residential referrals to results. and And high (ph) customer origination group, [spend] that seeing commercial we our residential team we continued segment sustain demand. and that to backlog to And to continues driving in see and industrial are continue is our Infrastructure build slowdown growth. the ensure group in Our SunCommon, to opportunities

winning accelerate more Infrastructure, business in and despite EV Our annual some residential our Solar success meet solar with we headwinds plan our remain that in as the and We segment, on earlier, are energy. today, in in executing financial our provides well dedicated of shared those both to targets strategic we revenue of as contract, significant the ability and the to adoption in and heightened help achieve confidence to us affirming mission that profitability.

share want business. trends to a we we that are I well-positioned to thoughts as touch want iSun solar recent our illustrate to different industry success. scale and and our continued we we what I for in continue points also what few seeing are has Today, the driving been growth on makes on how energy some believe

XXXX. of to sustainable the the more in growth in half We proof execution providing that differentiating revenue strategy maintain It approach we We the revenues year-over-year encompassing first origination for a lifecycle have from starts segments. across the XX% with compared to solar positions this long-term and than construction of growth. energy management that full competitive platform of our meaningful the approach, and development us advantage half generated year, industry see and first solutions this of this is increasing

by points from million. second our by XX reviewing margins, to XX.X% XXXX's up rose XX.X%, increased Gross XX.X% Quickly in to revenue basis second results, quarter $XX quarter.

we line. We XX% to segment, drop In the revenue scale continue efforts efficiencies margin higher. where expand throughout our that to margins. synergies will to the second and the our organization, more quarter, have drive residential tends the gross as came of the be to As enabled our efficiency of and bottom topline remain from confident

$XXX.X as remained demand backlog XX, pipeline originate customer quarter As end total our expand underscore efforts we and of the and June size the pipeline and are to states, increased initiatives. experiencing our the the and as of strategic effectiveness the at backlog XXXX. our X.X projects of XXXX, part The more of of all second well projects was more our as to gigawatts ongoing of of

segment, again referrals, on again also track, [stock] they projects developers cost. involvement with unnecessary Similarly, high reducing a how reflects level lower as creating in to customer work our and C&I see because which delays, our on specifically a Residential (ph). see customer their we a elect and strong Our course, of success satisfaction, impact us in them the group keeps acquisition generates referral of

Let rate industry, interest performance me of reflecting despite did improvement impact division loans. well, a quarter. the the segment words share about of our the higher of divisions more and a in few residential sluggish the residential The across three past home backdrop the

continue into beyond we of states We quarters New build and expect move continuous the as more and a England to period coming in heavy business York. installations New

revenue and combined beginning as of in have which industrial of division the is this strong the more XX% second very XXXX than commercial The of year, results quarter. generating we our

the that utility effort initiating over projects in team, as our is assisting to turned division which this is then Our it in execute. have focuses C&I to origination on segment, based

to far, industrial our backlog results work wins. the We commercial are the continuing pleased backlog labor through quite to adding Based thus the to utilization, seen we the business on are enhancing segments. and our contract we've and more including through decision combine with

the move recognized the we this in generated we year forward revenues revenues continue the or face These utility will XXXX. to the on seen group the beginning division depressed we've although backlog again, something once industry, project we is in continue to development across expected the around addressing. continues increase implementation this projects enabling early second to resulting delays, Our later delays and quarter, year believe

divisions invaluable throughout and and integrate efficiencies Development our operating to continue has as and provided engineering team organization. support we C&I the drive residential to

Our a across leading knowledge, strong creates which business. in is ever expertise our million contract new relationship second business. before. awards teams bring proven This the quarter, In these valuable in customer volatile $X than and more added we times to

terms enthusiastic. In optimistic the and remain solar of landscape, we

over the optimized. and is strong We that responding scaling that evidence country. C&I effectively demand finding nicely, our customer customer teams have we ensuring it segment expanded is while seen to not with is labor increased utilization demand are all the flowing, That

been more have execute ample for in installed this intensive intensive to I And residential half back but of The is our sluggish, markets. backlog year segment. we residential segment has more and one described, more as typically the the in

to projects team more Our throughout our forward services and eventually will provide organization. valuable by origination development opportunities and push C&I is segment and producing that largely be utility the division continue the executed

we iSun In will other genuine credit as sum, convinced IRA we language the benefits, the to remain and that afford even and passed from tax elements. rules last regarding industry finalize Department the and year wait legislation Treasury

in specific increased in of to beyond. We the assets our and those the and will pipeline it do which more spurs as demand will removal a as under case increase uncertainty of in construction, address higher lead XXXX value those well our valuation rules we expect will development as that of solar

EBITDA XXXX growth considering annual revenues Thus, our total with operating we year expanded demonstrate evolving increase expect a and for all between profitability, attain of $XXX revenues expectations profitability. basis margins. on the XXXX, macroeconomic we are affirming of factors, to In total gross and along strong full-year in fiscal $XX XX% reflecting XX% XXXX, along and continue in million an with million to over expansion in margin to

I'll floor With now over to that, turn John. the

Thank you, Jeff.

are provide our quarter we sheet. the well of with on segments an produced before overview of balance our revenue We turning statement operations the continue as in I'll robust as execute provide to growth to on backlog. pleased as the details we our second

revenue XXXX revenue iSun QX reported XX.X% $XX.X up from of million XXXX second $XX of million. quarter

the demand. first Revenue of months was million period first XXXX. XX.X% of our over For as the $XX.X driven well representing the consumer XXXX, our commercial quarter of by same $XX.X backlog in in half residential industrial increase growth execution revenue effective or a fulfillment and million, was six as and

total Jeff to the our we existing the carry in of backlog. the against As execute XXXX, were to in of our while continue mentioned, segment tends second which XX% margin, highest residential quarter revenues

also a total We for in XXXX demand earned generated $XX year-to-date. of $XXX.X QX new and XXXX. million in added added during business new Total was million June million far the XX, replenishing so revenue as of backlog $X effectively

division residential revenue million $XX.X the second our generated and By and year-to-date, million respectively. $X.X quarter of segment, in

$XX.X of to approximately are to million X months. Customer within X be completed expected orders

respectively. to million generated The and which of to Our consolidated were commercial approximately within X, be of quarter and has XX second million and year-to-date, in as expected contracted division, revenue a million completed the $XXX.X $XX.X $XX.X backlog XXXX, of division industrial XX months. January

of development in XXXX. contracted of expected revenue and currently second the has utility and division achieve under division respectively. approximately quarter a $X.X The year-to-date, Our XXXX million of generated projects development $X.X $X million X.X utility backlog and million gigawatts and to and NTP in early

for quarter the Gross in XXXX. second margin XX.X% XX.X% the points basis the up period Gross XXXX. to quarter XX.X%, $X.X profit in the million from was in XX was up in of second quarter $X.X same million

efficient consolidation result accounted of our of utilization revenue. of through the labor. teams generated a more segment was of C&I approximately for quarter's Our improvement to XX% a leading our Margin efficiencies

Year-to-date expected operations period to basis XX.X%, as second the continue up increase to compared same period remain in up XX% gross gross as Margin XXXX. profit we to XX.X% residential margin $X.X strong same well in Year-to-date to $X.X is points compared implementation. of in was the the during was million scale as XXXX. half million XXXX in during XX

to strategy to synergies year, As part segments as of will margin continue drive our grow. the gross each expand we

the in the lower second in of the $X.X compared was reflecting loss second higher and $X.X a revenues a expenses improvement as company's million of primarily loss focus part operating quarter, to operating The XX.X% million efficiency. quarter on XXXX

the compared Non-cash $XX.X of loss $X.X million $X.X million a million and same income the compared operating non-cash were prior million XXXX. was to a of depreciation depreciation Year-to-date, amortization in and were in second XXXX. expenses in year reduction amortization to period period during $X.X the same the million quarter Year-to-date expenses to of XXXX, a $X.X $X.X compared million in loss period. XX.X% in

$X.X share share second net of in the the period loss loss period a net in per in or share in share of a quarter. compared $X.XX $X.XX net $X.X million $X.XX of $X.XX in loss per to net of of compared per loss share or $X.X $X.XX or in million the a EBITDA of to in EBITDA share per XXXX million a share $X.X loss quarter $X.XX to same Year-to-date second $X.X of period loss or million XXXX. XXXX. a loss Adjusted a XXXX, million XXXX to million million was for was $X.X adjusted compared Year-to-date reported the $X.X same per share or compared in second same quarter or $X.XX was million iSun per of per or the $X.X XXXX. per or $X.XX

We quarter operating of XXXX, and focus efficient systems are processes same to XXXX. $X.X from XX% for on our approximately In of and operational effective we allow quarter reduced creating by integration second efforts that expenses growth. million continuing or the and the

operating more by or in have total revenues far million even So have expenses increased we $X.X our while reduced XX%. XX% than XXXX,

be positive of We to sustained rest the expect throughout trends XXXX. these

as reflecting repayment decreased Total the at of $X.X $XX Now debt. the to of million turning million June debt XX, long-term XX, from our $XX.X million ongoing XXXX, XXXX, to March sheet. down balance

required of execution. although cash revenues as Our position and million higher $X.X at December from as $X.X collections, $X.X XXXX it XX, as XXXX, a June of project of of vendor difference timing XX, deposits of was XX, March million with higher slightly XXXX reflecting diligent through improved million for

We of of valuation on the that downward exists are note. our our pressure outstanding convertible because aware

refinance Our debt of the performance accelerate strong allows facility. year half during our the our operating to first efforts us to

note. to credit, well conversations a based asset new line long-term are in provide engaged non-convertible as of We actively an as

to will I Jeff. back that, turn with it And over

Thank you, John.

performance, second the in we me am pleased Let the exceeded with where consensus. reiterate our well Street especially how I quarter,

national downward Our strategy the was the offset in on display diversification as residential segment. growth full the trends in C&I

to ensures we we for as as contract success continuing new remain The level positioned will ability of through XXXX. our move well growth we are award producing, well that as win

execute market. to team different they cohesive Our focused within on continually do and what is to on opportunities this have created many and the need dynamic evolving we energy

profitability come we act. create the on efficiently We from XXXX, the pursue in our as and obtaining investments well mix message reduction to the We we have stakeholders. we confident recurring across segments as impacts strategy iSun positive yet target diversified of our different operating and are inflation made to have revenue remain opportunities the supported revenue executing that our as for our by

turn the open to to now I'll for back the questions. over Operator? operator it lines

Grampp Thank you. from Our Jeff [Operator Global with Instructions] is Alliance coming Partners. first question

Your line is live.

wanted strong the C&I guys. interesting I given result the first It margin a was morning, to Good residential. front. in on really such strength to relative see especially gross to there, start

trajectory the if kind curious, relative is guys kind you as would So that of for year to accelerates it further expect guys thinking the margin if of of QX And how residential expansion you a to couple to back half main you margin levels? about margin fair in could, remainder are there's what expansion attribute or the contributors kind of gross there?

effort a that first high. one, half year and headwinds utilization in concerted our the we the sure consolidate wanted made to had and was saw We number big did that we're make commercial the that making sure concerned, We labor we a our operations. industry focus of to because real we and

been the move year, has solar half side. install the forward to residential we on second busy As the always

bit expect on half, residential second more revenue to see gross little the mix higher We the margins year last where was the a it change in towards side.

expect we'd we margin see enhancement further So could there.

the Additionally, efficiencies build always, expenses. can we and we to to we're our where operations overall consolidate G&A continue lower throughout organizations,

check my on on thoughts to a follow-up residential Great. the market. your wanted Thank get just And temperature of kind you. is

obviously, across bit had which little having of I your nice exposure great model But, a validation of market. So a quarter, is still resi solar C&I really year-over-year, think the a grew the visibility Like, What's that business? and the for in view do kind residential iSun’s in trajectory guys beyond? the really you how for slower, continued second obviously. market of growth half

Yes.

a sort C&I our sector some seen side. that, diversifying, some that year, we've residential of years we among couple strategy last softness some -- the pleased the slowdowns of row has that a the are in and of itself We of in seeing year. here sectors proved we're in of anticipated this out some of We'd saw when

energy that We market. strategy. believe with happy we're So, evolving do it's an

So the that offerings to consolidated the transition EVs. efficient. with of as team has in to to done. We've market, its going we minimized increase pleased move and demand, more what residential some our It's forward we're become

We're on residential the our throughput increasing side.

and sector. So $XX.X expecting backlog we're we're with that, -- a the certainly we have pleased backlog million for in residential the

at And a strong moderate We're also help, leasing to some expect headwinds. so looking the opportunities we of second half.

Got it. Understood. Thanks, guys.

Thank you.

Thank you.

question is & Co. Wainwright from next Amit with coming H.C Dayal Our

is live. line Your

Thank you. Good everyone. morning,

morning. Good

these outlook? respect XXXX infrastructure how is the With part deployments much EV contribution from of your to opportunity,

total out risk. The seeing into division. number specifically, but as we're EV expect we as are a number, substantial overall X% its up that overall opportunities operation part that So, a grow, the grow. of we're infrastructure the and rolls C&I to of sectors. infrastructure in C&I, it's continues continue and expect EV our decisions infrastructure lot EV made to to C&I seeing percentage don't And X% of our fairly overall maybe break We we

And is you business. any are you with and along that lines, there player those that more working of is particular gauging

So space? the are that of providers all in you spread across

OEMs want come really plans. the and the see some the their with on made the approach a of Yeah. on to work. And infrastructure how working as going decisions projects industry, the companies by think and this RFPs several We're part forward. acceleration will in they final are and of various providers it spread pretty We're lot different out. of I various in consistently have we We

respect that further With legislation, your you. is this the beginning probably show take Thank or benefits backlog and to to financials from little yet, in will that IRA is up something Understood. down? a that

I have Well, project in that certainly the IRA. on with have -- has valuations products the project increased increased these mean, development the

projects, as try to partners and move developers seeing, through. are we accelerate So they

for think we're to IRA of there's yes, we the there But, certainly I benefits still everyone. an on based don't IRA. the waiting language full solidify seen yet. And think uptick things opportunities we're So, we've and on demand in help the we some seeing think

Understood.

already these improving, is one, these of terms storage line? you deployments, Just on of is an for last meaningful revenues deployments, that and the of becoming of additional opportunity storage or side in part margins the down sort

Yeah, on the, not has the it on residential has the storage impactful C&I side. side, been as on

forward, and beyond, as plus higher certainly attachment I well. move the as side, and are the On attachments size seeing XX% industrial rates residential think attachment we much rates both we'll large seeing we on And, scale start the, commercial rates.

Okay.

much. So, so that’s you all have. Thank

you. Thank

Thank you.

Our Parks Brothers. Tuohy with from next Noel question is coming

is live. line Your

good Hi, morning.

morning, Good Noel.

How are you?

well. Doing

Actually, just things. couple some come questions similar I wanted of but that to had have Great. on up, to down specific drill those

have about, expansion a achieving near-term, the And of control the talked and second little over you margin factory So, looking of more a course, might from through forward. in year half which efficiencies. is

pricing it guess, about in of could is what like, you you're terms I talk of there. what So more seeing, trends

also, a for the you're you're pricing was that actually on work middle [cents] you era contractually in, now, roughly, projects what pricing And arrive what with it of imagine that as kind varies the in set but I time (ph), reality did of for executing the roughly chat now? just executing by

fully I I guess of arrive the at pricing? question. that I'm we How second understand not sure half do

sort I guess of lead I'm about times. talking

pricing like months other executing ago on contract for C&I Typically, example, XX project from months in actually the established or words, was you're signed? it that six ago? for now. So when that Is

and months six depending Yeah. to the self-installation like that. on days a vary designs will project so things and -- from residential We customer and to utility XX see, XX between

we last than bit panel July longer we're seen bit. a of the provide If prices So come projects working down pricing down, commercial and on for larger certainly and commodity the that little industrial now, we've some on ones. some prices is a ease come

thinking guess of Okay. also type I'm around I And business.

towards For then if example, thinking eventually bit, usage a I'm you people example, are, sort to where micro there mindful goals. of projects our And maybe ESG of attuned C&I and sort side, thinking own of pursuing on longer projects then issues storage are maybe very solar their was they're wondering of are towards, residential the for, And are that for of course, out of resiliency, type grid on a there and mentioned, for can instance. tease sort application. term the people particularly and where

could And, I you maybe sort little current for in about business of as customer timing far wonder if so you're talk motivation what a transact now. to as bit drivers seeing now

Yeah. residential for demand strong seeing We're side on the storage.

I think continue think to to discussed, I attachment where high rates. sales grow. And is see and storage opportunities, those single see every we'll we continue

design happen On it'll We I we go and we think down, the customer with work, with storage companies continue of the to add and base opportunities will as we come of them. conversation, ranging longer more technology continue financial storage storage to becomes back think part be, the think to it -- for having certainly serve, down and these companies, wide rates C&I more outages, will there's a come area use, a of that people compelling to more continue resiliency our power that certainly opportunity. certainly into grow. much prices or improvements to And be And and to a work opportunities play. considerations, in considerations side, will more a big time operations but of believe that, the

of the looks factors of the as tightening could, the if also the like was in time [Zephon] most of guess or of residential the mentioned, I (ph) And with for business, for you far interactive Right. utility. you – as your what’s lead geographical concentration sort terms

or you backlog -- from utility just forward. bit a what of sort go about Can -- a our to project timing, are for, talk people in little seeing participation sort they need make of if the

time is you're well you instance? at of sort for or the doing poorly, piece lead a New sort How of England, in of

That varies really Sure. Yeah. by utility.

Certainly, the come markets a times seeing lead have and for that service, the any into of from not that are that with in We utilities preparation upgrades of the we utilities been lot long solar ongoing. there.

utility on so, seen not long have delays And or widespread interconnections work. we

a Okay. That's lot. me. Thanks Great. for all

Thank you, Noel.

Thank you.

reached the question-and-answer We our end have of session.

the Chairman our turn to call I'll Peck, Jeffrey back comments. for So, now and over Mr. CEO closing

York you'd our hear (ph) the mid-September any H.C. in the New to the for well We Vegas everybody Please you know time to our meet us in time the future, In participate the the Conference ongoing mid-September. there and us Thank like and progress ThinkEquity today. the at [RE+] call in to as at your appreciate in joining let both about we performance. plan Conference in mid-October, and City, if efforts. as to discuss business Las Wainwright

reach to please out Thank questions, a any have have you day. great ir@isunenergy.com. you, If and

This concludes participation. And disconnect for your this you conference. time, Thank you. lines may you we your and today's at thank