SolarCity (SCTY) Tops Q3 EPS by 2c

November 9, 2016 4:19 PM EST
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SolarCity (NASDAQ: SCTY) reported Q3 EPS of ($2.27), $0.02 better than the analyst estimate of ($2.29). Revenue for the quarter came in at $201 million versus the consensus estimate of $170.64 million.

SolarCity delivered strong results in the third quarter that demonstrated continued improvement over the first half of the year and provided us with excellent momentum heading into the end of 2016 and next year. Megawatts (MW) Installed exceeded guidance by 10%, MW Booked grew by 15% quarter-over-quarter, and Cost per Watt fell back below $3.00. Revenue also grew by 76% and gross profit by 183% year-over-year. Moreover, our cash balance increased by $113 million in the quarter, and we are increasingly confident in our expectations for cash balance to increase again in Q4 2016.

Installations Exceed Our Expectations, as Cost per Watt Continues to Improve

• MW Installed: 187 MW

• MW Deployed: 189 MW (including 12 MW of Solar Loans and 10 MW of System Sales)

•Value of MW Deployed under Energy Contracts: $3.38 per Watt

• Cost per Watt: $2.89 per Watt

We installed 187 MW in the third quarter of 2016, significantly exceeding our guidance of 170 MW. Residential installations were 147 MW, and commercial and industrial (“C&I”) installations were 40 MW. Sales of our new solar loan launched in May continued to build momentum, as our new solar loan and cash system sales represented 10% of MW Installed and 23% of gross residential MW Booked in the third quarter of 2016. At a higher 29% of gross bookings in September 2016, we expect loans and system sales to continue to grow into a larger portion of our business through the end of 2016 and into 2017.

The Value of MW Deployed in the third quarter of 2016 was $3.38 per Watt, as compared to $3.62 per Watt in the second quarter of 2016, due largely to a higher mix of lower-priced C&I and East coast residential deployments. Of this total, $1.78 per Watt was generated upfront ($1.73 per Watt of Tax Equity Investment and $0.05 of Upfront Cash Rebates and Prepayments) with $1.60 per Watt representing the net present value at a 6% discount rate of future cash payments from our deployed portfolio after tax equity distributions and operations and maintenance expenses. Discount rate sensitivities are provided in the back of this letter.

For earnings history and earnings-related data on SolarCity (SCTY) click here.

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