Sunnova Energy International Inc. (NOVA) Misses Q3 EPS by 46c, Revenues Miss

Sunnova Energy International Inc. (NYSE: NOVA) reported Q3 EPS of ($0.62), $0.46 worse than the analyst estimate of ($0.16). Revenue for the quarter came in at $36.6 million versus the consensus estimate of $38.42 million.

• 72,600 customers as of September 30, 2019
• Net loss of $34.4 million for the three months ended September 30, 2019
• Adjusted EBITDA of $15.9 million for the three months ended September 30, 2019
• Customer principal (net of amounts recorded in revenue) and interest payments received from solar loans ("P&I") of $4.3 million and $3.1 million, respectively, for the three months ended September 30, 2019
• Net cash used in operating activities of $18.8 million for the three months ended September 30, 2019
• Positive Adjusted Operating Cash Flow of $1.6 million for the three months ended September 30, 2019
• Announce 2020 full-year guidance

"For the third quarter, we once again reported strong financial results, demonstrated by both year-over-year and sequential quarterly growth," said William J. (John) Berger, Chief Executive Officer of Sunnova. "We delivered on our operational and financial targets. We continued to grow our dealer base, launch new product offerings, and increase battery attachment rates. In addition, we closed on a number of significant financial transactions in the third quarter, including our IPO, a new tax equity facility, a new credit facility for our leases and PPAs, and a comprehensive amendment to the credit facility for our loan products.

"We continue to generate strong asset level returns that are inclusive of all dealer payments. Our quarter-over-quarter improvement in net cash used in operating activities and positive Adjusted Operating Cash Flow, generated by our long-term cash flows from operations, reflects our ability to scale our overhead and service expenses. We continue to see the asset-backed securities market provide cash in excess of our newly originated customer service contracts while allowing us to retain the contracted cash flows. These cash proceeds, coupled with our Adjusted Operating Cash Flow, are currently expected to generate sufficient cash while growing our net contracted customer cash flow and value.

"In all, we are excited about the opportunities in front of us as we remain focused on maximizing cash flow. With our dealer model driving strong growth, our existing and future customers positioned to generate recurring long-term cash flows, our focus on providing those customers service for many years to come, our ability to generate cash from financing activities and our continued attention to containing costs, we believe we are well positioned for 2020 and beyond."

2019 Guidance

Management reaffirms the following full year 2019 guidance:

• Customer growth rate in annual deployments of at least 30%
• Adjusted EBITDA between $47 million and $49 million
• Customer principal payments received from solar loans, net of amounts recorded in revenue, between $17 million and $18 million
• Customer interest payments received from solar loans between $12 million and $13 million
• Adjusted Operating Cash Flow between $(2) million and $1 million

2020 Guidance

Management introduces the following full year 2020 guidance:

• 23,000 - 27,500 new customers
• Adjusted EBITDA between $55 million and $60 million
• Customer principal payments received from solar loans, net of amounts recorded in revenue, between $30 million and $35 million
• Customer interest payments received from solar loans between $15 million and $20 million
• Adjusted Operating Cash Flow between $5 million and $15 million

For earnings history and earnings-related data on Sunnova Energy International Inc. (NOVA) click here.

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