After U.S. markets closed yesterday, residential solar, battery storage, and energy services company Sunrun Inc. (RUN:NASDAQ), announced financial results for the third quarter of 2022, which ended September 30, 2022.
The company's CEO, Mary Powell, commented, "Sunrun continues to become faster, better, and stronger, delivering a quarter that demonstrates the financial value we can create for our customers and shareholders, leading the market and now serving over 760,000 customers . . . Sunrun's energy subscription model, which can deliver clean energy technology and innovation that is more affordable and reliable for customers, is particularly well suited for this economic environment."
Sunrun's CFO Danny Abajian remarked, "The Sunrun team executed well in Q3, delivering volumes above the midpoint of our prior guidance range, despite pressures on sales and installation activities at the end of the quarter from the devastating hurricanes in Puerto Rico and Florida. The actions we took throughout the year to respond to higher interest rates and material costs have resulted in strong improvements in our Net Subscriber Value, which exceeded our prior guidance."
The company explained that the growth opportunity for the solar industry is massive and remains intact. The firm noted that the U.S. residential electricity market is estimated at greater than US$194 billion and that presently only about 4% of the 77 million addressable homes in the U.S. are equipped with solar power.
Sunrun advised that for FY/22, it estimates that the Total Value Generated will exceed US$1 billion.
The company added that solar-enable households that own electric vehicles (EVs) typically use two-time the amount of electricity, which significantly increases the firm's value proposition.
The company believes that as it adds new customers and grows its network storage capacity, it will also improve its position to meet the needs of the US$125 billion yearly utility capex market for distributive power.
The company discussed several recent operating highlights and noted that as of the end of Q3/22, it had a total of 47,000 installed solar and battery systems in the U.S.
The firm advised that the Inflation Reduction Act (IRA) that was enacted into law in August 2022 will serve to "enhance and extend the investment tax credit (ITC) available to Sunrun." Specifically, the IRA will allow for a 10-year extension of the 30% solar ITC. In addition, the IRA offers tax credits of US$7,500 for new EVs and US$4,000 for used EVs.
The company stated that during Q3/22, it reported the launch of its Level 2 EV charger as a complement to its home solar energy systems. The firm said about 80% of EV charging is done at home, and the integration of home EV charging is critical.
Sunrun listed that in Q3/22, it added a total of 35,760 new customers, including 25,468 subscriber additions, representing a 21% increase over Q3/21. The firm indicated that as of the end of Q3/22, it had an installed base of 759,937 customers, including 639,748 subscribers.
The company stated that as of September 30, 2022, annual recurring revenue generated by subscriptions was US$969 million and added that the average contract life remaining on these subscriptions is 17.6 years.
The company advised that the total value generated in Q3/22 from subscriptions was US$337.7 million. The firm said that net subscriber value increased to US$13,259, compared to US$7,910 in Q2/22.
Sunrun indicated that in Q3/22, it had 255.8 Megawatts of installed solar energy capacity and that subscribers represented about 181.6 Megawatts of the total. The firm added that as of September 30, 2022, "its Networked Solar Energy Capacity was 5,392 Megawatts, and its Networked Solar Energy Capacity for Subscribers was 4,567 Megawatts."
The company offered some forward guidance and stated that for FY/22, it expects that it will grow its installed solar energy capacity by about 25%. The firm indicated that during Q4/22, it anticipates that net subscriber value will rise sequentially compared to Q3/22.
Sunrun advised that for FY/22, it estimates that the Total Value Generated will exceed US$1 billion.
The company reported that during Q3/22, total revenue increased by 44% year-over-year to US$631.9 million, compared to US$193.1 million in Q3/21.
The firm stated that for Q3/22, revenues from customer agreements and incentives increased by 17% y-o-y to US$271.2 million, and revenues from solar energy systems and product sales rose by 74% y-o-y to US$360.7 million.
The company advised that for Q3/22, it recorded a GAAP net income of US$210.6 million, or US$0.96 per diluted share, versus a GAAP net income of US$24.1 million, or US$0.11 per diluted share in Q3/21.
Sunrun Inc. is a home solar, battery storage, and energy services firm based in San Francisco, Calif. The company offers affordable and reliable energy to residential users. The firm also manages customer premises and shared stored solar energy from the batteries across the electric grid, which benefits households, utility companies, and the environment.
Sunrun started the day with a market cap of around US$4.6 billion, with approximately 212.1 million shares outstanding and a short interest of about 14%. RUN shares opened nearly 6% higher today at US$22.90 (+US$1.24, +5.72%) over yesterday's US$21.66 closing price. The stock traded today between US$22.88 and US$26.47 per share and closed for trading at US$25.71 (+US$4.05, +18.70%).
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