Sunnova Energy International (NOVA) 23 Feb 232022 Q4 Earnings call transcript

Good morning and welcome to Sunnova’s fourth quarter and full-year 2022 earnings conference call. Today’s call is being recorded and we have allocated an hour for prepared remarks and question and answer.

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

operator. you, Thank

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

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

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

now turn call will John. the to I over

Sunnova have business position is in Good and sheet. strong morning the ever our Energy-as-a-Service in, us. we thanks model to and balance thank you joining been best for

about While services stronger. never been energy others growth, have our cautioned demand for has slowdowns in

lower Sunnova’s and with ability unparalleled higher all expand to offerings has service array customer to market. independence, actively offering and service, reliability, addressable share allowed energy provide a our and market of us wide customers energy take costs, total while

metrics On from within and summary a X our full-year recent full-year we of most EBITDA our Slide Both XXXX. solar Adjusted the financial interest is and fell principal for collect loans ranges. guidance

battery dealer network. and penetration, the customers, Slide Sunnova’s showcases in X growth continued

midpoint additions guidance. brought service, under represented and customer the our growth total a brought fourth into generation gigawatts. solar XX,XXX additions which equaled total year-over-year power and customer X.X XX% management These our During in quarter, placed the rate to our we of customer a customers to XXXX full-year XX,XXX record

high-margin additions Included were customer approximately quarter in service-only our customers. X,XXX fourth

opportunities in highly additive solar orphaned create the in ignored accretive to have future our adjusted value EBITDA. extensive service are as repairs, of most immediately upsells, and While and we footprint, no our customers they see capital, great for little leverage customers in require these existing need to industry

were continued a class agreement We across in that age sold without this non-Sunnova systems expect customer service country. growth strong as those the

the in services new We trend continues. strong last than originations year approximately higher January seen have for into our a last of carry month as XXX% that year, the demand were customer energy

investors that macroeconomic solar growth, BusinessTM Adaptive business HomeTM could Adaptive total While those weaken while us offerings. challenges also may our has through concerned share addressable increasing to market be growing Sunnova enabled our residential challenges our model market navigate and and Sunnova

December over year to further our dealers. rate sub-dealers, penetration X,XXX dealers, of XXXX, inclusive reached of fourth homes with installers, have life-to-date. of in quarter, well ending as performed the Additionally, battery battery of target our continues year-end excess retrofits XX.X% XX, new the eclipsed X,XXX we we grow and and In

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

weighted XXXX, XX, half As December of cash life expected customers average on and to contract billion years increase contracts increased of over XX, our inflows XX% those next December XX-months remaining XX.X the an XXXX. from customer the dollars, a equaled from

growth significant business flows. deliver on despite our our testament on metrics, Our various and is focus headwinds the investments, cash Energy-as-a-Service contracted of strength ability unwavering to long-term these and a macroeconomic to model

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

X, the past Slide see on improvement years. over Starting in several continuous John. you, our results Thank financial you will the

same of and a than from tripled, by solar factor EBITDA greater Our XXXX period, over nearly the revenue, we revenue than was our over the loans more principal ten. collected and interest adjusted XXXX increased while five times

leases $XXX backed million $X.X $XXX million tax in debt, restructuring, activity and loan our our $XXX billion million purchase summarizes XXXX and X Slide agreements. of asset included $XXX securitizations, warehouse current a for liquidity in in power equity The position. and financing a financing XXXX completed transactions funds, warehouse million restructuring convertible

While the average in range weighted issuance basis cost priced November debt at remains points of securitization yield our at our a XXX securitizations, at prior X.X%. above XXXX

monopoly Additionally, increase, for our us headroom more have recent while stabilizing data returns. continued rates points unlevered indicate that dealers utility giving the is and capital our cost to to industry our of expand potentially

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

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

available million in to of equity subject capacity at $XXX that, and additional collateral, tax Beyond had open our warehouses we funds year-end.

equity the Combined, available warehouse tax exclusive any interest these in in funds, $X expansions hedges, of additional represent rate closures, XXXX. further of money liquidity amounts securitization billion nearly or

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

our unchanged in November increase burdened return from cost quarter offset prior average remained primarily our debt, a XX-months weighted trailing by as the driven securitization. for was spread the implied fully higher by of XXXX unlevered The the

the of back spread months. to to suggests XXX has this basis XXX Our capital coming today markets current above increased approach points, expect and spread view the that implied basis points we the in

in of we NCCV a originated Net our increase we NCCV. discount Gross to reflects XX, Contracted have an Customer Triple growth XXXX. $X.X X X% XX% and was At our wherein compared Contracted rate, Slide December billion, or Customer the Triple-Double Value, strong Value seen plan,

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

compared increase discounted December at of an of was XXXX. $X.X As XX, XXXX, XX, billion XX% to December NCCV X%,

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

loss rates. phenomenon, points. to the this assumes from net This to allows the in model. from rate low default business points a closer or us is is delinquency to our are to be and commitment benefit basis approximately of Our foundation while Currently, XX it service seeing value unintentional we not new basis defaults, market rather loss XXX

is us especially reality and benefits rates. that discounted meaning in above we the elected higher directly between as discount contracted at retain flows, This to we actually have assumptions value, cash market underlying NCCV the cash realize the disconnect

the plus has is total deployed period. quite a X% Sunnova favorably business, $XXX which to as the those capital X.X% systems would This only less of for KBRA compares loss over our recent XX% of In million, cumulative translated which ten-years. listed peers the in for a ten loans, than over been all for our represents years capital solar to average loss taken have same whole capital cumulative

to same day. NCCV as price and share the date our On of per as Slide each of see you XX IPO share our year-end will compared subsequent Sunnova’s

approximately NCCV half with in our XXXX, has since has IPO, responded. doubled coming value share While creation our not equity over per of this our

business our This our significant contracted flows, platform, equity is NCCV customer created and shares In share. value model has growth, to cash value fact, the trade, operating option Sunnova per negative recently of well continue we long-term retain. and and even leverage means trading, below our have though reflecting been for our value

suit. significantly, plus On by price a approach our interest we taken as key EBITDA followed financial have has grown loans. stock from Slide metrics have solar our of valuation XX Adjusted Even valuation clearly though not different multiple to and referencing a principal our our

is any company, at shares execution of post Reduction growth, than public of of of IPO. As previous This despite passage lower and at as multiple all years’ trading Act. Sunnova end end the at a the the were the solid XXXX of Inflation rapid a the

Triple. the our Slides XX Triple-Double major and Day XX liquidity growth and plan, during provide through metric guidance issued forecast detailed our XXXX Analyst Sunnova’s

the Given we demand backlog insight future accompanied the strong we financial have services, robust to our into for see retaining results long-term from and our continue energy our by our contracted

Triple-Double can Plan. as full-year our we guidance reaffirm flows, as confidently well cash XXXX Triple our

QX, of we to XX% with collect increasing in EBITDA adjusted the solar QX, XXXX XX% our capture from in interest XX% the and XX% together to QX. first expect in We loans in quarter, principal

expect additions with occurring occur the to first during XX% the We XXXX of customer of year. additions more half our evenly

back now John. over the call will I to turn

simple Consumer the have energy roof, solar evolved a what product technology-enabled Rob. quickly last mind used and service years, in purchase a shift on sale purchase. more we sophisticated, demands of have consumers’ a that panels a over service to seen of the from Thanks, be to few

We together. continue managers, other electric load hardware as manufacturers technologies, new generators, vehicle and from quiet various batteries, chargers, such to bring

We for the from service superior these various and stationary technologies that delivers integrating manufacturers energy of energy are a in homeowners needs a transportation way businesses. and

demand. business services in We the have and seen provides continued home of resulting value owners increasingly acknowledge more strong that the inherent Sunnova energy

which Slide Illustrated of allowing network business Community manufacturers, at is Energy-as-a-Service Home, equipment and best-in-class access dealers, Business XX, and model, us an encompasses our our scale to rate. platforms, on to large our Sunnova’s increasing Adaptive

to our XX-years to addressable additional Sunnova from and best-in-market with by are single our software service, Sunnova platform up share consumers total we supplying pick supported solutions By companies and service-constrained Protect that up and expand market product market. continue of

you national XX with see Sunnova confident in by Slide industry. market U.S. services ability We coverage. has U.S. extensive currently On will in we coverage and in residential are reach an territories. footprint, and the XX the our states offer and portfolio growing to Sunnova’s comprehensive broadest XXXX Energy-as-a-Service

time be the service deepen should value create and price. pathways software Sunnova to allowing wallet to a while response our energy service of power that solutions and us that believe We customer. prompt together service sale deliver increasing more NCCV through over and relationships complement at reliable integrated per offers technologies to energy our better additional a share overall creation,

contractors and in aggregation growing, sales should open us approach innovation and months of forms supported our Sunnova comprehensive by see from extends and expect to is to services and Repair Protect Sunnova portfolio ahead. all financing. The This additional our and is to the and you

pipeline XX, and growth, continues expansion to see solutions. vehicle charging, Sunnova’s resiliency significant market business for to demand Turning and commercial Slide including microgrids, electric project

increased operating in greater as rate utility seek increasingly interest have Escalating environment. savings Adaptive further Sunnova’s on high business Business a demand for rates owners offerings expenses

business to residential continue mirror our Sunnova’s We markets coverage. to will markets expand

and to continues confident execute our total model, market meet across thus targets. exceed market, ability we XXXX Indeed, our are Energy-as-a-Service board take to business we on increase addressable to or our guidance share Sunnova the continue in our

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

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

trend my XXX% and up taking in said, you you Everyone originations John, were thanks questions. this year-over-year for highlighted that continues. January,

loan you year? upside states and mix much of to customer shift XXXX? be up ends the that in what weakness You with do then QX mix How and this XX% Where in growth, where guide. this you also that strength, ultimately, growth XXXX any and in could year you expect seeing are that lease your there year are think do the think do you you to with originations of states seeing there maintained which

catch I if this Hey, all. John. then questions there, is so see Phil, of Lots let’s

strong. what First, to time. that extremely yes, point I is or about say vigorous doubt have at debate the a is, would least would a give continue raising next is decided the wait so. the very growth guidance then for on that. readdress we is did And at is heavy. There guidance about growth say and I we QX no XX-days quarter, will does If this another the us call growth in But that

are very a the seeing of been is four say heavy. It it where the been I is not very, sense on fire, is we to In last mid-Atlantic to five is phenomenon. the would it of months. over say it? fair demand. It in And Northeast recent terms has

across growth good as the are the we pretty But some in mid and part of Florida, country - seeing well. Texas mid-continent also

We in obviously of than California. rate in terms place the up presence And had frankly, picked that overall a of is a very incremental any not is the growth big we high. been other company never have where

our pick And NIM So a do after share dominated versus in out product there. industry out expect we is especially Energy-as-a-Service to put continue just that grow place, given is X.X more sale to up there. model when we

EV we the the chargers, In terms et of Energy-as-a-Service generators, that of solar, we cetera. of load if other many and include seen our batteries model, lease and definitely you have don’t some loan, management, have pieces transactions on will,

a seen that say the least in shift We of with solar, core kind would XX/XX split. of decided business a to have I at part

loan. we that PPA feel So will XX, to like move XX, lease

strongly dominated loans. are the to that other our of business typically to that parts up an want service I However, the energy by customer caution make

in in It can services EV be are other they as et products, don’t a and have we generators growth instance, instance. charging, and those are explosive management, load for technologies, buying of customers cetera and EVs, areas batteries for seeing those lot

business growth good is we think of to so, as that loan And the want side still do well. we in that caution the there

But overall, it is impressive growth.

the we The the I industry is changed. has X.X benefit very to has experiencing The actually providers. growth. changed. it are a clear is NIM And think, why the business service

everybody think has now. I heard that

product the an voice be loudest out it focused at is you think when lot to I we goes there. is most energy not a there sale. the the will something is look our lot a company. we more And of are. service are sale that and that the as a And of equipment complex. service, It And a exactly is biggest as what

and capability I not think say that have there there pointed at time. this financing that. lease to ratified others in capability as on it swimming execute the providers it is is in equipment out, loan-to-lease. I And are industry and and sheet have fair we to out you as And PPA the point as many balance an

in And been are stronger said in opening we have in a spot, my I very good good position. a a as really spot. never we remarks, So,

Great. additions Thanks a Can been you new My and for here more be rates How add John. platform And these XXXX dealers over about could not there dealers? you in or few XXXX? few onboard How your these months? past customer are dealers, follow-up want lease past new shift could we could to color dealers. ability your accelerated source to - these for about? dealers they many people the of new thinking the talk the to tracking Great approval there. need Thanks. on from have over a your upside inbounds be that of and to to What more from months. may be is dealers much have these upside in

be of are would seeing Yes. such we also There would automation load huge dealers. a as home broad that influx description a is no there guess with the question I say industries is I other management.

up and entire of bundle the want lot months. over got And to they contractors few very last They come in that capacity entire obviously, the a interested have model. have freed services contractors, in Energy-as-a-Service selling provide provides. in Generator, are Sunnova they here

a labor software would be is we built increasingly we of and I continue are it of sourcing focused more really out do is and and there So we that, have say a types platform plugging lot a on. all there is to weapon. different And software that so. something

different way. niches include contractors how because is work many of all incorporate there their providers is that and your exist service software is The what out many, there capabilities, and and can different you the own all types they models have their in

give year. four this so a And It I we over as ago, we And a Founder, the or - will I tell had are just about was seeing away I was attendance. you specific We was had four-weeks summit. dealer blown and sheer times would what example. last but you our

maybe with have. others I think quite there we that good was on that. Everybody was impressed you a and news picked what lot of up

seeing do, to work of lot in interest to have a provide. a but of have We what lot we we are

there in number our that the lift growth upside and is on to tremendous additional continue will provide So I an growth. dealer think

it Great. Thanks, on. John. I pass will

you. Thank

Julien question Dumoulin-Smith of The next comes go Julien, from please from Bank ahead. America.

line is Your open.

you Hey, the guys. Nicely of opportunity so much. time to done Thank again. the Appreciate connect.

this quarter about if Just the that mix. what expecting service those various customer customers these guys what first to you sources the trend talk of a how Like through talk about will. you service year? Can a bit bit little you of of are sort the little are customers, i.e. up, you economics Can

little comment, origination your well given of backdrop if of customer your growth altogether bit regionally, bit a can the of then And also you expectations. a mix as Just there. little

is break in are the types our I of than the Julien, going much in maybe we services Yes, we we lot, more different the slides. is not John. Hey this at the appendix out contract - of to offer is in a think a which too back done have

say continue to see would I fleet explosive there. in What equipment business. There service-only is to replaced. is a needs out aging There some the that, be growth that is we

not rates a there And that out is is focused nobody it that something I think discussed equipment, lot is it means is it. there. just there on mean, - and that that bad it failure doesn’t is is

from on as a mean, rates industry up has to those built go their everybody. customer. only entire all a entire the are the online equipment, utilities system for industry, new of been other have, the contractors, hours competitors The the customers year. have demand loan I the the in And we we huge power X,XXX providers, seeing

keeps in The monopoly, difficult. not rate it getting higher is the a power higher. really is and It lot

from So so if they providers, customers if are Sunnova to you us there will on want there other other service providers, product get or are call that repaired. and

margin are all we say, XX% adjusted there. gross but In transaction. wouldn’t terms of bit do I quite a We EBITDA we that per there, targeting. the of targeting that are profitability, get where get is and we it

supply tremendous our we where pretty a see and capability in our will our them and better chain and are go price. energy can there and the customers both fixed out capability amount actual get things service demand of online, out software profitable build and for we have they better back customers a and to at a get logistics So still they growth continue that technicians

service Got of you point year, the this be share the want of X one of composition customer XXXX the would arrangements on, don’t on expectations? this one, more guide, your within would type what on a versus do type it. for to But Maybe you point, related sale have this expectation. you specific at other don’t set gain XXX at contract are to going we traditional out expectation hey, amount that

that I will turn over to Yes, Rob.

meant flow assets our cash the in XXXX, OCF operating the we that debt back at which the know, you than covering from and hit positive costs that more was as Yes, point. operating service

using, two accelerated So, to on years, at been cash sale have flows. and payments recurring past our the again, we complement

have seen in inventory You this our sales.

who a - the seen customers have go purchase some of to straight new into have a this homes You in we opt system. of

we that looking sales, loan if flows and service, inventory and would the I well. that activities, So allowed are cash as cash And look under ITC XXXX there. from direct new transferability direct customer home prepayments to sales workflow at in the is sales, we put probably ahead IRA.

are We about cash about what XX% had to of XX% compared to that XXXX. is looking we at give-or-take customer inflows our be in

So, total a a XXXX there really there is XXXX. that trend a we of as bit is continuing pickup just into accelerated and But percentage. it started had already a back in

guys it. Got much, you. Alright so thank

Thanks Julien.

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

you Hey guys, I taking had more, appreciate question just some for good look the if morning. here, cadence. on questions. the EBITDA P&L XQ and guess But historically the of guidance of the you seasonality year. I up each of showing Thanks and like XX% had a in

wondering especially given You had Kind more then the here there? create follow-up. higher and takes I through XXXX. the seasonal, the into end the does and the waiting maybe versus XQ year, that for back are the higher high us of risk more the of puts XX% that, half a you much waiting the have just years visibility guiding walk how latter And given prior

want I directly to then weighted point additions to over is the turn John. the out and evenly part. remaining that. Yes year, question customer of to that answer more is to the it the this Rob are first attributable I that will additions part Brian this answer

either in or got ahead already trend at that backlog continue far, quarter well well customers I customers this the expect XX% that for our plan, the and this over of of which at midpoint service we so are in in expect point, our guidance the We have to year.

let catch cash front is, the I answer some that will Rob end the or is is the as loading those. eventually will flows address think expect other I customers we in that there well that up of our pieces half, back moving pieces, but and guidance plan of of So those this for part

quarter we first those And of are our stuff was just some just out the mean, and a but we done of of going we to front some are important - some to the from of I the sort an operating working there little stuff have operating are bit full-year-end expense of a the stuff bit quarter. it Yes, we that to to traditionally, felt spread loading is that that we on expense. little some falls get in down more, in into first investments, try the for

already the some to the on have pieces in we The are occur year. place sale going second of got second gain actually of is in one the that half that

have is got And a speaking, that lot our But bit seen prepayments, say little the pace increase also generally so of what of skew. been have that would is in that those an a I accelerating. of we

year. higher we actually the seen shift have into CPR we those originate accelerate curves, of been as so, that well. year the those it the But of have of did and And continuing last half second on to shaping curves as prepayment some late start we interest as the rate of rates to some loans that

a things. So it different combination a is lot of of

about, are But are again, talking topic what related appreciate kind customer you year-on-your color. alluding I to just question, of comp by think, design then the a math editions. super you is if split, it And when means I you of the you in terms the to guidance And theXX/XX on helpful. moment. it a That at maybe for look stay at that is is a doing you this fall if XQ year. be math the growth second are first XQ this math correct. my for additions how exiting not XX% that even right, just growing like customer seems just given then, is year-on-your reported you may growth on it in in in on And about strong half. end half, of your XXXX, and basis, the I XX% look

first getting in there, the missing a drawn it of your down seems what And half. backlog I so, is maybe like am here lot

going modest are rate You a year. the growth fairly exiting have to

implying on on guess of thoughts given are any based guys. Thanks cadence XXXX, you early guidance. sort that the Just I

at would back there of plan, is question no don’t is maybe Yes. when and you I Brian, like year-over-year. goes that it look we would tell way the think I conservative, to Phil’s it is that say in you and grow in terms I QX

will thanks it offline, take guys. I enough. fair Alright,

from The JP from is ahead, please Strouse open. next line Morgan. Mark Mark question is go your

Yes, good morning taking our to comments and to I questions. about go for spreads. Rob, thanks wanted back the your

You they XXX are saying that today you getting maybe could be points over points basis XXX to think basis over that months. basis per XXX approaching coming the

Just what out that inputting the the that statement driven of confidence versus unlevered there, the and by increasing much capital is decreasing? of provides how returns cost

the last prints end mean, that first of year. the this than we had better capital at markets I Yes. the in year what we saw seen decidedly were couple

with that of in tightening So part base of spreads, the slight rates. the a even is the increase

are most But the utilities is us. of There targeted just providing headroom fully it much the that so unlevered return. is really burden

dealers. take advantage the We to have me that, some able of of been pardon with

is of Part the also combination of it a product suite.

As more and are service that the providing on we higher adding get generally based a broader offering margins customer. services, to we able we are are to more

So burden return. unlevered that helping fully the also increase is

across burdened across you look of base. endemic at things the return, spread sort capital of is burden that of it we number deployment that, fully As that the one the in

burdensome less burden of becoming. the are you the So capital the that that over is actually speaking, full generally larger a amount deploying period,

are buried are in most we our the are sales just that that sales continues the rate getting And and finding but given that making, are of sales up. sort acceleration customer. a little types customer we in some is, upsells high thing in of of sales, still are go our to that counting gets again. not One customer that And we we the the bit up the from all that profitable count of

is the will, becoming expensive here and customer, reacquire that a customer, customer, fully sort the generator to they most to a a now but unlevered return. having the go becoming which part of are they maybe were if burdened of of we denominator, - solar the say, when So you hey, not really customer actual of is

of adding So with and burdened go we as to been that continuing what are build-on seeing to along. fully customers a lot has we unlevered add-on return

And seeing are we that in of burdened year strength without seeing seasonality of thing burdened I of burdened is first unlevered though at return, fully add the of a and sort sort about last even would return here that things we look really the our the fully the still that, on when say levels of sort unlevered unlevered fully the entering some we to are the quarter, return. same that the

be to up. that tend but bit of earnest, Some the kicking in market segments haven’t to a in little they more starting seasonal, really yet, started even are pick

where of but see to a that are unlevered adolescence we capital into the the possibly we that we burdened that opportunity in lot if up really a we love return burdened the be than So years we the and get strength seeing would return that more stabilization to could, for that have is spread. faith in its so seeing awkward grow are fully markets continuing to of unlevered lot expect push and and to and teenage - we certainly

is this John. Mark,

few we last to already have Just highlight, weeks. in increases done the price

We will that, the in do what after more days, anticipate. more coming and is I

So we pricing are continuing and to power. exercising seeing

Got it.

both. Okay. you Thank

we Just should up is modeling question, sales about inventory quick and this in XXXX? for The your that a quarter. embedded guidance real How numbers think Rob. what ticked

in as the pretty more are rich a much number installations at inventory areas. we our seasonal or well because sales expecting lot what pretty for to sales quarter that mostly the year inventory fourth of less tend of more little indicative I follows for think The is the bit it pace. more The battery be a

reflect see, to to And battery the the a penetration grow battery that sales it rate sort going dealers penetration that equipment acceleration because rate in could is and as in the the of that of the want of if you continues basis. just time

They a of looking inventory. hold to are bunch whole not

representative, think the shaping, And we would I fourth think of way basis. pretty, magnitude where be about quarter pretty the the is to sort full-year a on so of to that expect of but is say, I

our And necessarily you is compliment it a sale. being where just of driven nice on to the is areas. margin - as are it not much profitable a know, is is not piece It It really seeing as we little are begin we in other business. as

much. Thanks Okay. very

Mark. Thanks

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

Hey. Good morning everyone.

Just quarter? over you maybe can attachment see two on and the maybe the coming you more provide comment or color next where rate any if it battery

Corinne islands Yes markets, We vacation schedule in those does market of as the definitely to this the do seasonality that Puerto bit provide continues on say. with that. John. in some our is shall we grow. as quite There holiday Rico’s is - that typically of included And see seasonality mark a

knows, that far as now We attachment first really on Puerto provide everybody are deep And and commitment and rate. been island storage have seasonality by island the community. XX-years provider we have the player the for Rico in does the in we in to that largest service some that

ESS help we do price later see in up that incent attachment rate to that And quite year. this start in declines candidly, here think will certainly that demand. California pick NIM I battery happen X.X think in the the products a will the will significantly I

expect is you But then we to that the endure of dealers. the happen price will Before benefit equipment and we our assumption, and assuming across seeing if doesn’t is to that all do that see this I see any board upside. are are equipment, it, declines ask the our certainly it that

demand will pass think, would some that So, whether all storage incent will so. well. suspect that along choose of customers, to I the to But as I that they more

of that or my waiting to or the something any the II Great, into still the the your get clarity guidance other other did be, from include you thank would you more you. are is And department it ITC or question II?

Yes, actually we XXXX. it we into get any expecting come We of to comes more say, would are clarity, adders. especially to waiting are I to not that the really in LMI really when

of XXXX We at are looking phenomenon. more that much as a

but another year. have ITC. We the content on consumers XX% just very Based on is that to not of have unfortunately based put in which - really wait was consumers. on bit the will was But just recent guidance we there, is do little I consumers a domestic out, most felt it friendly LMI guess that to the

Mark’s more So back little obviously, bit plan will upside. more for to goes we and guidance upside, even is question. we get a there It as that

we I we - think expectations could we our guidance, returns. more burdened level even if certainly in that, more get see could for the uplift fully

you. thank Great,

question Mandloi Maheep with from Maheep now ahead. please go is open, comes your The line Crédit Suisse. next

about? Especially looks the eventually, but that the question guidance a you for of how is expect the we what about - the the Just QX QX cadence quarter should and talked should sequential XXX there XXXX? like just through reduction you think can points on this rest year basis –

is John. Rob and you, it. to I Yes here, would that reference say ranked Maheep, continue strength this we see to

pressure or on are a Some that put some of And here our over next that a profitable. expect upwards unlevered will are impact few more start now markets we just seasonal, see little the the continue starting weeks. little are to more return to that we

much unlevered late How will quarter so a beyond? we price returns. into this versus done, do impact year, the QX falls increases have on last know. that this Don’t material The that quarter have and and QX definitely of will

I So, as see would don’t we as from how a do continue about that but movement much unlevered to upwards, to will move lot say now of see is XX%. upwards. would the upwards continue I that to have, returns far expect visibility that we right

Great. Thanks.

service-only about you talk if guidance for did And embedded the sorry mix I the in but year this customer there? full missed your

previous question, did. question. a it Yes, It Julien’s was and we was

going out. break to that not are We

and have got back too most think. we I data investors think, people enough think there much I

what energy regardless I generator, provider. the type it is whether will battery of it, you we customer, of plus sell a service name to that is we customer is or what whether as solar you a tell and upsell, storage solar, only, But an it are

value long creating at we NCCV going creation discount and we And at share keeping NCCV as amount are is that to as are and is rate much value. that. ourselves per metric a of you creating up share related the NCCV large very metric obviously another And look and whatever we make per honest customers that far value as pick, and I are per sure as is that

contracted for good they would analysts number discount the take And be exercise peers. at I of go amongst want out be It the insightful whatever divide of to our and it to there. rate a would cash look think at it investors comparison use, a by shares an interesting and us some

basis per basis. that You customer and on on contracted per cash we the dominate will find share a

customers, the and of once. that including all types, don’t all types we duplicate And customer is so

we customer. as your count as do single just customer, that to you obviously once Rob is upsell, As those because we sell a mentioned, customers, not continue additional we unique

EBITDA sense sense So NCCD operating investor’s creating. is P&I you plus adjusted good on that. the creation. value leverage per gives a share and are the we of And That then focus very

Got that and appreciate stop Thanks. there. I will it, I

Thanks.

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

taking morning. for Great, my thanks good guys question,

million. in moved as and tax made is you XXXX, of you liquidity equity constraints up. follow I debt So, a how lease I progress forecast any Rob, And you XXX maybe wonder, have there? guys number, there if that PPA, for the have have have to on much Then proceeds just

five We quarter. fourth the tax in Yes. closed funds equity

So we good. pretty feel

funds. number on Right of of We sheets now, a term we expansions us. two of working front existing are in have

discussions have a We additional for of tax equity. other number

funds We have that do up. got who lined folks have perpetual already we

express the a some in of has transferability - One and lot to to continues some on thing in want interesting be there been side. has doing interest that folks transferability coming on who that new who stuff the been

in want a toe this capacity $XX prior me do us that, to is funds significant have very year. has year happy tax have who very a who been of are who with much out number back million a there maybe fund, maybe dip do in What folks to been and there, hardening come larger

in folks accounting into that they a And really don’t really, and price My tried accounting, of sure guys. our have you always is to amount benefit. capital is make that those of but do diverse we have that different to pay HLBV coming to off our inured my funds, there, a providers bunch hats the that, we to love having

about feel in that equity So to going we availability position, good say, a stronger we probably the far been - as would tax as very and probably, about availability. we that, about never equity tax position I are have

in the and an the IRA might environment the think otherwise right I expansion, market. now interest folks, have not one like you entered with the with increase that really that we who have in are in

in want same there really the and established that really they with around have time, engineering, go only can a few space get to comfort But the all that is players us they at tax of they so that that that getting have in capabilities, feel place, legitimate is reporting they controls that comfortable very that monetize about to are worry have won’t and the the have what that, credit folks a recapture. can the

here, In you. in talk weeks the the Thank ticked that? through customer but up just quarter. costs Could the you acquisition

and market. pardon just and PV mean, are have of metrics customer one used because probably I everybody many pretty two legacy was a that was Yes. me, markets a really to just back that one the part, out then good there, only you in or

sales into the on not doing customers, we more we doing more denominator. customer are where the really and but more services As we are adding adding existing and per another to are customer

to continue can You tick see that up.

down. the our are going to about talking up if their someone panels on six help customer. is in that roof number That certainly typical putting So a cookie just come we KW cutter is not fashion,

systems. seeing bigger are We

We batteries. are seeing

and We more more as are seeing add services. we

main EV need generator solar lot a and cases folks add upgrades As when to folks for get in John belt to suspenders chargers, that of storage and actually it want they a whatever add is. who mentioned, panel on

are average price up. We just go ticket the seeing

fully capital, burdened you comments. actually talking is across helps driving return cost as base. spreading is That you well. push that to are was that I return then of about fully more the committed sort up have earlier unlevered And burdened back to that the same unlevered

metric. would services of would say, we we having an industry time to is the to multiple would call this to it the continue can indicating And I customer. something that So expect and the the provide health different around, actually antiquated which see of it and rise. a is single I benefit health actually that But really

XX, that go-to-market - Could Got Thank acquisition walk that, there, thinking then opportunities. selectively the know there? about done one, you you what a just says two, and it. you. means lot such have us have John. have you are through I guys what Last on large partnerships On or Page pursuing but done you and

that. This business in that we is have addressing the markets division

tremendous a there. traction We have lot amount seen of

and We The on are have nice. healthy have growing and some closed a we returns very quite pipeline. customers

far as we of partnerships number there is to as have at other partnerships right and look we a ways market, when the now. And that in to works the go

the types saw you I more announcement guess. and recent think these I from USAA us, expect announcements of

question going I’m And assume we to that something are Yes, going that into international. international. buried about is go to

we going International. in Sunnova name our We fulfill to but as will Energy fashion, are do methodical a this

We will it. do

you. Thank

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

thanks non-recourse in for for market should you proportion sort of of part the the the billion of the same as that kind was guys, debt billion that in assume morning of we good XXXX wondering, my Hi done? borrowing did X.X taking got question. the year, $X.X Rob, I securitizations just of you ABS

to about right is it. that way Yes, think

was Okay. of, the that your network? of if just is give the network kind expansion back same of us the on that And bit to a then, on I dealer an customer from little existing the proportion could on just of store of wondering sense guidance dealer you growth account versus from basis growth, of kind a

way. our pace would chunk something But to to dealers. going But that that, not are grow break say at me. a out, by I continue surprises is would that I this good a new are John, existing say dealers we the that Yes,

up. really ramp in cases, these most of some to dealers take a Now, while they

we really a obviously a of QX lot hit that far this back stride of maybe ramping already of and as are as year of starting QX these had last to So of year. up them

about. that. going So are gave certain I only give that don’t we be number, would guess. - numbers you a a do just to it out I’m I if We not

is existing that answering are your but still not our out I surprising I’m question, would - dealers. would I we definitely, lot So, of growth say a seeing it of

thing blistering a and is agreements more that That partners you add give that to something want pace. our are certainty. continuing to something want sign try we One I is lot to at will up exclusivity that of a

the and They into access want product well. far. do they want the that industry by And biggest that, the in business the get they get broadest in the markets far. they portfolio And footprint now else industry can’t can anywhere in by as to entire also geographic that if

have the powerful. that more and a is lot can software other lease something a becoming whether it it or we you. to have, got The And we loan or be products more to PPA is all offer. So, a use we have for

service. over and if fairly want are we a partnered great great with be do to you. come contractor, you invite We and you to customers So, treat

you. Thank

The is next question open. from Sean ahead. is your line from Sean Morgan go Evercore. Please

for I - of think in for real a strength talked on you not been kind we before, a we consistent Hey, has Puerto service of most thanks little kind bit solar a how guys. I have Nova. prep talked and the about mean, maybe Rico John, with sometimes ambassador

in curious, strong as public-private just sales to continuation with public that partnership therewith minor down had business this any of think you your do be have of do of another going historically you to some a U.S. Puerto do this book going have Rico of company, is strength impact on I’m kind sort modifications? or So the maybe you

way I is generation There to the power service beat any is What there load we our physically match that would say centralized no to provider Sean. for inherent that Yes. on is in reliability. site. that

so macro comfortable and there and going is continue, whole feel quite continue reliability in to a Rico. And certainly that trend as Puerto we

referring are company. company the well run you think, to, very I is think a I

better and and to forward provide I think, the they will job. do community Rico. of them, to island We working service the a great energy look with to Puerto

way any do certainly help, So are we can to here we that.

I recently have states other last Rico, States extreme reliability United of of that a the territory of there days, as obviously would up the pretty which is power that, are and many also same part few offer outside are as the Puerto over sort. the that problems

Texas in as of one those well. And is here

that only a is better service not demand service limited say is for at not And that continuing island. would to or our other we not trend better energy but I see any Rico Puerto So certainly price, for demand our accelerating.

ITC following there but tax because question one implication thanks attached, book is year know, ITC. guidance sort suited booking sort the in is best of this, an will some And credits when ITC accounting time tax And of if a on - I treasury but be you systems? matching you it is you in for of revenue recognizing the are - may to this on be because Okay, the it or that from it, as John. real do you with to of on are Rob, it probably start waiting sort is we recognizing still systems

booked our always well. are NCI. have we it me, we through deconsolidating side partnership we books And the pardon onto remember So, then consolidating of time. as in are it, real We

in of So, year in, if then NCI. through in which service. recognized placed somebody’s credit tax asset gets the that the sort the into the receiving But taken always and is it out taken it in back year, is tax

Now, using we times we have also not have historical back ago. where the several been past years tax in equity had

next for good that company. a built up several actually have significant, those ITC And We credits we have years. are still as - never

But be is as would year service. the the by the Same it in way recognized for loan. homeowner, placed credit system in the into the in which gets the

placed system year get credit. that the in So, the the their they that tax is service their it is is year

recognized guess, right would the that And from the you homeowners perspective, cash, now? guys their when, I taxes, be file

have we But for on - the depends fund. it equity us Correct. tax

when make us then and - it some cash gets, actually stages the on So equity to we put tax that in. fund way, funds that the when along different IRRs bring at allow based their calculated in

that the so reaches to really cash call. times, on until gets restricted of cash it wonky I’m so where apologies the goes at into fund have my point. they it a everybody held getting Often cash, some certain in. But the here, next stage,

fund and itself a at the equity tax has service. a in investing credit prior investor that an is the percentage tax goes the to into asset certain be to who date Anyone once

they say Often up. and can’t put asset into So cash IOU, actually just the into put up when be cash and that have to released they restricted is service. gets ends just they getting can’t times then an placed

them that, earlier will to you and flip types look XX% say, to structures structures some So find fund will are speaking, the the into of more of the going fund of will the percentage will going yield like would immediately calendar structures to rest some earlier, service. at generally I asset willing tend asset we the of if say flip upon into a that some different have, and flip only them prior - fund the service you

is That Thanks. really Okay. helpful.

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

I’m big swinging attribute do Thanks for What taking and change we hardware the mentioned, ago. year quite question. to? John, versus in quoting, are you is you components and a that a that

has every and is or cycle cycles. a cycle there equipment market Every

We have dealt the with industry. that in

been and just interest investors where us a pretty they alive of never cycle, of equipment it not up rates rate going normal that an others as is like have interest think and I have. lot as an experienced experienced a cycle lot have much

normal. is it think I So just

tremendously of winners side. is increased. losers high-quality gear equipment And in of But there will and number the the be overtime manufacturers

individually leave value market share them not. as greatly have to taking will or it as I commentary to We our if far they and partners are make

Every But, calling warehouse a our have a it of warehouses, think has well. We in fear of equipment of as the equipment around, demand the by look, sold chalk all part the is full we this some type. big but have do contractor of rudimentary the all way, do I some just industry. of

the distributors is and in it coming. it more across and seeing board are is We

have matter or a incentives that is inverter States With in whether - the ESS. IRA what supply-demand you United picture to the the panel here for produce is no it

So it and there nothing facts is but lot is is, is more just equipment to coming. state the out the facts, a there of

us obviously think it so our and of good peers investors, is demand a people missed is flat the two miss. for reason are for I is good that a far and a think consumers, reason, if demand and big it, for lot look saying big are as I was service And why very as our for you service the that providers it, demand there, like out us at they that peers that the very seeing

are data looking wrong at the point. You

commercial you XX, as guide? are of Let and hundred be Historically, have customers times the XX, if additions, me to system how commercial new in customer residential given the market. that what a is follow-up guidance some on change you going way these scale, would a

to now, change. portion don’t Right with our as a of be residential products our our going and offer models not that going service, energy very particularly it and certainly to is can a that And to anticipate our guidance. we the we see large continue different business, We continue change. all is with business services isn’t to a

we years of way next that. now will But a or so, don’t not guide. we that is if right couple it revisit over So the see right we it the that material, changes changing now,

very Thanks Okay. much.

you. Thank

The Abhishek next from is question Capital. from Northland Sinha

now is line Your ahead. open, go please

Hi thanks in. me squeezing for

could that curious we about quick, project be I’m in how tax funded like have right megawatt of equity big a now? by funding. talked one equity just Just availability the tax you

What have we will most we we sheets probably everything term for have what and we right else. and fund the now, year what have of during

we same rest in and will were year. we position into last XXXX. about the is fund least will, We the at It

see any a of to XXXX how couple as in on on XXXX, the that progression, quickly years? G&A And Okay. comment you do you progressing

G&A I’m progression? sorry, the

sir. Yes,

little like on basis on to of are to So, see the that going have OpEx, expect we customer a fluctuation. a - per a, bit

Brian’s the latter and half the the back it question a sort If of the you did about less year think he when first, little EBITDA little go asking half shaping was to the in the was year. and have in I bit why adjust of of a bit to more under expect first we

doing down of said first with that the G&A to speaking, part adjusted generally we it relative But be to together expect the of come of into was as in we P&I. quarter. go the stuff the size would to on expensed be has some to later to size you are the year, going the the EBITDA, And that I

leverage But continue And we Customer growing and service create of expect rapidly expect increase company, continue will not I’m to to expect of takes to offerings to customer we continue are - equipment. that acceleration that we are in decelerate. operating an people create a we and while to sorry, investing sorry. G&A. an will will It but we that have value we G&A takes

all is I That you. Thank sure. it, have. Got

The is your is Citi. Ryan open, Ryan from from ahead. line next question please Levine go

taking you my Thank the prep from the resilience for of the agreement. Puerto Follow-up package caller Rico how question. to the the on Rico, pursuing company outlook the can appreciate that any dollar company? energy But or impact the speak for Puerto if DOE, billion you is relief could on

transactions not in. comment discussions number it and transactions to would I is potential would certainly XX-yearsis for on market that sort and in. that strong we don’t that for be we position I involved sort us think over community part the of that share that be of our or appropriate just may something or may any anything think or of of given years

seeing the and the terms in for of you hook-ups are color. just your outlook retail just your from then that your for in end jurisdictions resources? connection of of issues Appreciate any any or terms impacts in of locations Okay. of delays is electricity, or any for distributed for your kind growth utilities for that lastly, generation And impacting customers,

last behavior Certainly, is these behavior a more anti-competitive number That we anti-consumer would’ve year and great utilities. it even for had grown Yes. by a been of question. not

them respective We find of type more utility with public addressing are behavior. we the as more this of and commission

point would showing some maybe in behavior that anti-competitive the companies government be time, in doing. I would at and and think these anti-consumer federal are the interested

that do But of have to the done thing ongoing areas something we be a and that public right behalf lot as is the I these in mean, utility of have an time consumers intervening a a great of of those pickup commissioners war. on. we is changing job so, it on just behavior. them make to And spend seen some it going

is And get it industry, I’m best doing for the government really of highlighting we job the good steam the affair done. country. and to proud say across And commissioners the is our this will in a

day. to and it will get We figure out effort But be every each - is utilities an how friendly. it them the do consumer

you. Thank I appreciate color. the

call time, concluding so further John to at this I We back will have questions remarks. Berger hand for no the

The a service industry energy Consumers price, not has changed. buy better a better a at product.

We Thank us. share. have, expand will you to joining and market addressable take our market we and continue for

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

your disconnect lines. now may You