Sunrun (RUN) Misses Q2 EPS by 27c, Revenues Miss

Sunrun (NASDAQ: RUN) reported Q2 EPS of ($0.11), $0.27 worse than the analyst estimate of $0.16. Revenue for the quarter came in at $181.29 million versus the consensus estimate of $187.56 million.

“Consumer interest in clean, affordable, and resilient power is stronger than ever with increased outages and more time spent at home. Sunrun is responding quickly to meet this need,” said Lynn Jurich, Sunrun’s Chief Executive Officer and co-founder. “In the quarter, we moved to a digital sales and streamlined operating model, improving our cost structure trajectory. In July we reached an agreement to acquire Vivint Solar to expand our customer reach and improve scale efficiencies. We have increased our customer value proposition with new virtual power plant contracts, increased battery adoption and launched a new venture for further home electrification.”

Key Operating Metrics & Outlook

In the second quarter of 2020, Megawatts Deployed (MW) were 78 MW, compared to 103 MW in the second quarter of 2019, a 24% year-over-year decline.

Creation Cost per watt was $3.72 in the second quarter of 2020, compared to $3.33 in the second quarter of 2019, a 12% year-over-year increase.

NPV created in the second quarter of 2020 was $34 million. Unlevered NPV in the second quarter of 2020 was $0.51 per watt, representing approximately $3,800 per leased customer.

Gross Earning Assets as of June 30, 2020 were $3.9 billion, up $580 million, or 18%, from the prior year. Net Earning Assets as of June 30, 2020 were $1.6 billion, up $204 million, or 14%, from the prior year.

Cash, including restricted cash, increased $0.4 million from the prior year. Cash Generation was negative $30 million in the second quarter of 2020. The company defines Cash Generation as the increase in total cash, including restricted cash, less any increases in recourse debt, and adjusted for certain items. In the second quarter of 2020, Cash Generation was adjusted by ($19.1) million related to the company’s Investment Tax Credit safe harbor program, $4.0 million for restructuring related activities and ($4.8) million for the deferral of social security payroll taxes.

Sunrun made the decision to maintain its organizational capabilities when certain sales channels were restricted, which decreased second quarter NPV, but enabled the company to be in an athletic position to safely provide essential services to customers as markets gradually reopened. Order volumes have increased significantly, now above February levels, and management expects to grow Megawatts Deployed by over 20% sequentially in the third quarter, at improving Unlevered NPV levels. We expect Unlevered NPV to increase to above $8,000 per leased customer in the fourth quarter. Management also expects to maintain a strong total cash balance and grow Net Earning Assets in full-year 2020.

For earnings history and earnings-related data on Sunrun (RUN) click here.

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