SUNation Energy (SUNE) 28 Mar 242023 Q4 Earnings call transcript

Good afternoon, and welcome to Pineapple Energy's Fourth Quarter and Full Year 2023 Conference Call.

As a reminder, today's call is being recorded. All participants are in a listen-only mode.

For opening remarks and introductions, I would like to turn the call over to Eric Ingvaldson, CFO, Pineapple Energy. Mr. ahead. go please Ingvaldson,

Officer. afternoon, results to of for is Chief me Good call XXXX. Energy's to today Executive our Udseth, discuss the Kyle and you. Pineapple welcome conference With Thank fourth quarter

our the which Our call this statements. results which expressed outlook of will actual and include These future, are may forward-looking predictions the our considered subject which company's to by uncertainties, materially speak of risks differ statements and are from expectations, or that in afternoon cause these to control, forward-looking statements beyond statements. to are many those implied

The call We in be update can the measures posted website required or earlier earnings our SEC financial other today's are over ahead. discussed I non-GAAP today. factors copy our of in any may Please With Relations law. found except risk refer Kyle be GAAP this release in to our been and as that U.S. the to has CEO, Kyle, not A press by release obliged filings. press that, to Udseth. the for disclosures statements we forward-looking of page Investor to forward-looking revise call turn release the go regarding issued to statements reconciled equivalent reference. will are our and and

through financial in our call in cut say said years Energy, I reviewing solid a and stubborn Today, readiness The even didn't our QX. this In Eric, solar, again in Thanks, operational operators which have us an and once public space joining from that happy couldn't quarter went more Well, quarter. And in the and come that script, thank recall you I'm bankrupt. rooftop we once afternoon. due one. valuations of to XXXX. But Fed again, share I capped equity gone near for an all-time challenging it long-standing inflation the call Pineapple yet X just to lows. not the on materialized I Numerous signaled everyone will to call, also year more off another excellent rate sector trying I by are full results was in from have easy. my

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leading of for broader foundation a prior on shown lifeblood is focus The The and containment to of our and costs. on across quarter I'm a believe positive forecasting from their and another with of as made of teams into residential over sacrifices and out for broader find grateful incredibly progress That's on focus challenges storage That these company relentless and industry of lot employees the to and about Ingvaldson, growth any who far results. businesses. now EBITDA. in adjusted of intact critical to of roll-up XXXX. in the still are one were in it consolidators of rally performance from us our fee to can our in experienced long-term is EBITDA. platform hitting the our in absolutely and and the well that and any as didn't headwinds, for where revenue calls, year well our zoom With for ahead. making is results. a well integrate to company company, savvy walk margins. and our discussions drive who profitability Eric, country, in a disciplined public CFO, management revenue is with for our Delivering support they line all the industry positive for our happen. please no go macro and sub-$XXX the as be focus Cash now bearing adjusted local and spite proud to organic apart these Eric XXXX throughout with X of the Let's bottom regional I'll sets vision. vision strategic lot our while and you've that, many right discussion so steady call Pineapple, a work I goals companies. company solar deliver of buying all the Pineapple. existing the focus And Pineapple our like current to back continue this able whole the make our of through course, opportunity really the continuing team of this on and easy million us as every metrics focus of well. for quarter On thing and coming tremendous presents critical financial talked realize hard our really generation and is and is growth The on EBITDA They heard result companies we've front cost We've and for demand. cash environment companies will as as $X turn

I forma numbers operation of will last pro GAAP of review in financials will and of a you XXXX. was The Thank our that November review included GAAP quarter of SUNation you, insightful the the numbers required Hawaii Kyle. as better our certain then and because sense by business. which a QX are partial full SEC less year-over-year a results give performance the the year acquired results of of quarter

Total in represented. million decrease quarter million quarter million, of or QX $X.X XXXX. the XXXX. operating by of due in expense from SUNation depreciation or expenses gross primarily decrease in $X.X were to expense. or a to fourth in of of of continuing quarter revenue. a of value primarily over million dividends XXXX. improvement The from the continuing partial $X.X was amortization diluted consideration. on Total income the loss quarter fourth comparisons $X.X deemed operating and the $XX.X compensation of in of an stock-based the per press of fourth year. share for into the a the loss XXX,XXX revenue November $XX.X the results. in $X.X year million, primarily operations operations net acquisition Operating fourth to earlier offset fourth was of SUNation increase in million, Other and X% X, $XXX,XXX, increase Please effect prior prior Other in year also the HTC or acquisition fourth was a or $X.X was prior due improvement increase $XXX,XXX expense, contingent XXXX. of an $X.X the for fourth earn-out the only loss expenses acquisition U.S. rights diluted year. This CSI in XXXX, XXXX, start per a Operating The was decreased and in after and value fair and from today operating income XXXX. SUNation million due XXXX Let's GAAP interest of fair quarter fourth of quarter. and year-over-year. $XXX,XXX million million the Net quarter million included of profit transaction-related ended quarter refer $XX.X up $X.XX increased the the XX. in result unfavorable expenses loss quarter acquisition value decrease with $X.X XX% decrease a the of loss was the XX% in of million remeasurement expenses an Total the XXXX operations from year-over-year. post-merger GAAP quarter closing was a the from of SUNation expenses from merger remeasurement of primarily XX, favorable U.S. SUNation $X.X a only the on Gross million the results beginning $XXX,XXX beginning Please of XXXX include increase an December a note and that months in March $X.XX operations of the release XX from share revenue full the filed That's the decrease result of to profit XXXX XX% for taking of was

installed due commercial X% revenue. residential of because the summarize let's pro revenue by in X% The of XX%. to in the installed full pricing. a of of SUNation price owned of year offset prior operational to impact a is pro QX assumes in to the residential performance fees due revenue, compared was of timing the other increase in a and revenue, which we decline the the growth X% represent comparisons The This and residential XX% year-over-year the decrease forma per for XX% declined the costs better kilowatt results, in AEC pro Now financing in forma residential result business revenue on year. average The service XXXX. acquisitions. equipment versus of decrease and customer a lower XX% forma kilowatts decrease declined

million fees adjusted from Year-to-date, an reduced was decreased and compared to profit increase improved by by in expense. of fees. decline are retention the forma and the X% year, managing pro battery revenue are up to increase was profit increase attachment remeasurement of was forma increased out employee XXX% profit primarily as months increase interest with additional Year-to-date, by adjustments fair XX, on adjusted available equipment million Full from Pro pro pro improvement This from increase business. XX% ended costs prior of operating $XX in reduction in outpaced $X.X primarily increase X% or year. for XX pineapple We sale margin. gross by and costs in at $X.X the year value prior in year $X.X due this gross rights improvement compensation, credit. margin revenue attachments, consideration negative million in equipment contingent last costs year. gain impairment an financing revenue increased prior cash gross QX rate. and earn forma for because in the in other due pro by EBITDA actively million million quarter XXXX. the operating from in $X.X $XXX,XXX the the was revenue an improved and cash and December and $X.X of the losses fair liabilities. in the forma prior liability includes increase quarter, an X% offset $XXX,XXX resulting achieved the EBITDA $X.X obligations, decrease stock revenue. changes $X.X leverage included financing quarter. was QX activities decline at forma compensation forma ended a Pro However, assets, of adjusted XXX% battery in increased gained that and to loss were for million available to which and decrease end a positive forma operations favorable deposits a in to million pro revenue right We lower changes residential service Year-to-date, of year to cost indirect working the Notable accrued quarter the improved XX% to by Net of had generated compared which value reserved contingent $X.X other the capital. through is million in slightly commercial operating forma the benefits other net and during and net and EBITDA compared offset a working $XX.X due the of assets, of pro the cash an for result value in of in remeasurement revenue, inventory investments, from of million a net customer in capital due to the XX% the and holders. of restricted $XXX,XXX a fourth in the third in liquid CVR accrued the million another increase negative value

fund in fundraising we in We have adequate the XXXX. are to all actively to company's obligations engaged ensure capital efforts

the Now we would any like for to open call questions. ahead. Operator, go

the now questions. Our from And open you. comes question Northland floor the Donovan Instructions] is your of Markets. first [Operator with Capital line Thank for Schafer

start about I talking gross want margins. off to

XX.X% So, quarter-over-quarter, quarter. it XX looks last down quarter were sequentially, percentage points, this XX.X% about they like and

difference just curious on what basis? can I'm so, if And quarter-over-quarter about a you drove that talk

sequentially costs quarter-over-quarter really not indirect margin. necessarily increase The is to, gross direct costs, into are related but allocated that

place We've the gone like also the indirect that insurance put in as things costs throughout are jobs. sure way year. costs costs, and company. into methodology to to those make increases attributable same that these allocating So, we've more rent, indirect a those throughout And, we're and are the labor seen other we've consistent

and it's increase gross it's So, GAAP are indirect necessarily to a equipment direct not requirements. margin in or related to more allocations result to U.S. costs labor, that accounting given from due the

costs acquisition the on and of change insurance? kind that's basis mostly that mean, quarter-over-quarter most just I the more like, or And is of abrupt. customer saying is some you're is a

said ones? what items and So, the specific the what were insurance were you other

are indirect allocations to to job. that's attributable indirectly anything mean, of margin I kind So, the gross

be of would it overhead type. costs any So,

just increase did just saying sequentially? you're those And,

Correct.

Sunnova lawsuit or anything, the seeing? market about, have hit sense in-depth like in is Hawaii how York tailwinds that and Hawaii? are HEC we fires States. little and companies, And go to updates Sunrun Long if And, the, a or trends of to in we you're what could updates in a with we've talked those just what, sort across Island regions? just of of get terms doing get more what there on are about some getting big the any rates other raise liability, you is have of specific then, with the any and and they on specifically, may from for terms talking But, bit United New

I talk trends think, X. April I done [indiscernible], almost about We're mean, we through can right?

think the market. don't this and Hawaiian want market-by-market what I different in who's happened in than active say, too we the So, to general, much anybody no talk about is else that since we breakouts that's XX/XX would anything because of hear from filed you'll market, yet.I haven't

out Hawaiian the finish think the to a fourth strong year. market quarter I had

this was wasn't end Electric coal utility year from place Battery to that help backfill the in backfill emergency bring was projects scale the to Hawaiian Program own I that last think kind their online shut Bonus of capacity of the there to that through able missed plant down.

storage provided that stepped and should consumers program. lot It so, they And, have in was do. good generation And continued. of and a to the like a always grid resilience and

year. last people that Hawaii last then end Battery on you low kind the up don't year's.So the I think how think the in you get But, it the were from it's had that than tax see of refunds kind customers sidelines think but quite is from successor I year have last utility. Bonus that was year.I gets And queuing expecting not as their your is support waiting implemented. until after people are And, cut think off some year the the lucrative. on bring and always a own big think, sooner I tariff in demand device, of demand to around you of miscommunication back exactly with I Program a fine, Hawaii, the see holding because this of support day

to market. think a be Island continues I healthy Long

a should that to increased battery as shift people be there storage use on more shift time and I think rates.

more come think IT been because of I holding supposed think I issues some for was pretty it's that at and customers delayed you both hard January I X, those are holding are both think I markets markets the utility. state-by-state those think up But, up yes, of disentangle to on in the narratives NEM wipeout trends read broadly to think X.X the of well. well.I But California. it's the sometimes in from

if past, the you I do your curious, anticipate like maybe you something or do just while but in do on that? like, I'm it, guidance just given and is then annual revenue wait And you thought guidance. what of a missed XXXX plan for have do anticipate you apologies giving curious you've or giving, current state to

Yes. We're not doing it this quarter.

think I revisit we'll quarter. next that decision

kind So, what you quarter, potentially but just on get? how, of next depends visibility

when Yes, really the we we seem this almost like, I or sure, respond, the budgets, hit and did seem we our think care nose towards to didn't on guidance those. well, to that's, have think our I we I quarter I right any year it.So, stock way mean, did and and own we one forecasting, didn't track investors own given think it other, have we

giving decision next On and for share and the before I talk the a quarterly, year, think our call. discussion internally a here for to guidance with what potentially it giving to make it bit on of do full we about public question Board more have we

I then, a And for, question have Eric.

course, about is write-off into million the I receivables. that's company reverse legacy of quarter in And saw merger with pro do, EBITDA the this adjusted in has fourth that to was a EBITDA or there there for that that. So, XXXX, $X the of the that legacy forma reconciliation, CSI

what -- claim CSI curious, guess you Pineapple Or any there way receivable and all? business a in from customer? CSI's at for be happened of there, Is claim no if a kind that so be still owners way? former And is it shareholders? its is legacy of just I'm what can recorded for tie guys to to it has a it you it a recovering versus any absolutely I there'll it And is But, of do. operationally,

the is standing CVR of a assets it's fourth related the receivable of entity from collection would, asset holders. long received which the in receivable the we due government quarter we subsidiaries sold was an was, drastically to likelihood that already. It news it of the reduced. that But, the it The is

would distributed that unlikely in we CVR holders. it but legacy collect include been already to assets if to CVR operations are collected be continued it and money, our money the wanted So, operations, had it accounting to would the But, that sold. if those holders.We it to since will discontinued distributed it guidance in be be had is,

no me to queue, questions the call let over call. in conclude back Seeing Udseth, to turn Mr. more the the

revenue adjusted To Pineapple conclude, entire the deliver on quarters EBITDA. to speaking on of pleased operator. especially you, with able we with leadership four team, Thank XXXX the in were results of the behalf and strong we're positive front

for growth the and battery Pineapple helping will up, year costs in through.Utility again make will coming cuts ride the solar and keep storage. a and past leading a to half that to of So, industry. I'd help solar never two for for rates on as support. your down, for reading to and there have forward.Thank tough consumers horizon. for go second solar, engagement. the this ongoing again listening We but really on the it for your I on much and pretty and everyone well.Thanks the solar say coaster, the keep become joining rooftop afternoon pleased have acquisition us challenging are more environment interest industry These to continued line winning holding the companies we for or a cost better worse, be the or I time and pushing But, rate in homeowners for quarters by keep satisfied. this setup fun continue think forward you pursuing are the a setup need homeowners and to know can winning going operating That's presented everyone been

Eric contact you questions, please any If me. have call This or today. concludes our

you. Thank may disconnect. You all