Sunnova(NOVA) - 2024 Q3 - Quarterly Results

Executive Summary & Highlights Sunnova reports strong Q3 2024 revenue growth, reaffirms cash guidance, and details strategic drivers Third Quarter 2024 and Recent Highlights Sunnova maintained its cash generation guidance for 2024, 2025, and 2026, reporting a 19% increase in Q3 2024 revenue Cash Generation Guidance | Metric | 2024 Guidance | 2025 Guidance | 2026 Guidance | | :----------------------- | :------------ | :------------ | :------------ | | Cash Generation | $100 million | $350 million | $400 million | Q3 2024 Key Metrics | Metric | Q3 2024 Value | Change from Q3 2023 | | :---------------------------------------------- | :------------ | :------------------ | | Revenue | $235.3 million | +19% | | Monthly weighted average investment tax credit rate (September 2024) | 40.7% | N/A | | Monthly weighted average investment tax credit rate (October 2024) | 42.2% | N/A | | Total cumulative solar power generation under management (as of Sep 30, 2024) | 2.9 gigawatts | N/A | | Megawatt hours of energy storage under management (as of Sep 30, 2024) | 1,556 | N/A | CEO Commentary CEO William J. Berger affirmed confidence in achieving the $100 million cash generation target for 2024, despite a Q3 decline in unrestricted cash due to working capital seasonality - Sunnova remains confident in delivering on its $100 million cash generation target for 2024, despite a Q3 decline in unrestricted cash due to working capital seasonality, with tax capital proceeds received in early October and additional asset-level capital expected later in the year[2] - Future cash generation is expected to be driven by easing working capital needs, closing additional asset-level capital, increasing assets placed in service, recent increases in weighted average investment tax credit rates, cost reductions, increasing levered cash flows from a large, long-term contracted cash flow base, and growth of the virtual power plant network[2] - Company fundamentals are supported by a macroeconomic environment characterized by growing power demand and utility pricing, declining equipment costs, and an increasingly vulnerable power grid, providing an opportunity for attractive energy solutions and long-term stakeholder value[2] Financial Performance - Three Months Ended September 30, 2024 Sunnova's Q3 2024 financial performance is detailed, covering revenue, costs, operating expenses, and non-operating items Revenue Analysis In Q3 2024, Sunnova experienced a significant increase in core customer agreements and incentives revenue, driven by more systems in service and higher battery attachment rates Customer Agreements and Incentives Revenue Customer Agreements and Incentives Revenue | Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Customer agreements and incentives revenue | $157,538 | $108,192 | +46% | - The increase was primarily due to an increase in the number of solar energy systems in service[3] PPA and Lease System Metrics | Metric | Q3 2024 | Q3 2023 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Weighted average number of PPA and lease systems | 238,400 | 173,500 | +37% | | PPA and lease revenue per system | $496 | $440 | +13% | | Battery attachment rates | 40% | 33% | +7 percentage points | Solar Energy System and Product Sales Revenue Solar Energy System and Product Sales Revenue | Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Solar energy system and product sales revenue | $77,756 | $90,206 | -14% | | Inventory sales revenue | N/A | N/A | -44% | | Direct sales revenue | N/A | N/A | -22% | | Cash sales revenue | N/A | N/A | +55% | - The decrease in inventory sales revenue (-44%) is due to a strategic shift away from buying inventory to resell, focusing on core energy services[4] - Direct sales revenue decreased (-22%) due to a change in the in-service methodology in mid-2024, requiring additional procedures and longer project placement times[4] Cash Sales Revenue per Customer | Metric | Q3 2024 | Q3 2023 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Cash sales revenue per customer | $25,061 | $14,285 | +75% | Cost of Revenue Analysis Cost of revenue for customer agreements and incentives increased in Q3 2024, aligning with revenue growth and higher depreciation Cost of Revenue - Customer Agreements and Incentives Cost of Revenue - Customer Agreements and Incentives | Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Cost of revenue—customer agreements and incentives | $54,722 | $39,130 | +40% | - The increase was primarily due to a $15.3 million (+45%) increase in depreciation related to solar energy systems and energy storage systems, aligned with a 55% increase in related revenue[5] PPA and Lease System Depreciation Metrics | Metric | Q3 2024 | Q3 2023 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Weighted average number of PPA and lease systems | 238,400 | 173,500 | +37% | | Depreciation per system | $206 | $194 | +6% | Cost of Revenue - Service Customers, Loan Agreements and Underwriting Cost of revenue related to service customers, loan agreements, and underwriting increased in Q3 2024 due to higher SREC and loan agreement costs - Cost of revenue related to service customers, loan agreements, and underwriting costs increased by $0.3 million (+5%) in Q3 2024[6] - This increase was primarily due to a $2.3 million increase in costs related to SRECs and loan agreements, partially offset by a $2.0 million decrease in internal labor costs for maintenance services due to lower activity[6] Cost of Revenue - Solar Energy System and Product Sales Cost of revenue for solar energy system and product sales decreased due to reduced non-core inventory sales, despite increases in core direct and cash sales costs Cost of Revenue - Solar Energy System and Product Sales | Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Cost of revenue—solar energy system and product sales | $66,679 | $76,288 | -13% | | Inventory sales costs | N/A | N/A | -45% | | Cash sales costs | N/A | N/A | +75% | | Direct sales costs | N/A | N/A | +29% | - The decrease was primarily due to a $23.0 million (-45%) decrease in inventory sales costs, reflecting a strategic shift away from reselling inventory[7] Cash Sales Costs per Customer | Metric | Q3 2024 | Q3 2023 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Cash sales costs per customer | $14,825 | $7,469 | +98% | - Direct sales costs increased by $3.7 million (+29%) due to an increase in installed solar energy and energy storage systems, which have a higher cost basis than battery loans sold in 2023[7] Operating Expenses Operating expenses in Q3 2024 saw a significant rise in operations and maintenance due to charges from terminated dealers and increased property insurance Operations and Maintenance Expense Operations and Maintenance Expense | Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Operations and maintenance expense | $35,868 | $18,702 | +92% | - The increase was primarily due to $13.2 million in charges for non-recoverable costs from terminated dealers, including impairments on work-in-progress systems and unearned exclusivity/bonus payments[8] - Other contributing factors include a $1.2 million (+42%) increase in property insurance costs due to more assets and higher premiums, and a $0.5 million increase in inventory-related impairments[8] - A $6.9 million write-down occurred in Q3 2024 for inventory not compatible with the domestic content bonus credits, which are expected for a majority of future originations starting September 2024[8] General and Administrative Expense General and Administrative Expense | Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | General and administrative expense | $110,678 | $100,342 | +10% | - Payroll and employee-related expenses increased by $6.8 million (+14%) due to additional hires to serve a growing customer base, with total headcount up 9%[9] - Depreciation expense not related to solar energy systems increased by $4.2 million (+66%), primarily due to $52.9 million of capitalized software and business technology projects placed in service over the prior twelve months[9] Provision for Current Expected Credit Losses The provision for credit losses decreased due to lower loan originations and the sale of certain accessory loans Provision for Current Expected Credit Losses | Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Provision for current expected credit losses | $22,646 | $11,203 | +102% | - The provision for current expected credit losses decreased by $13.3 million (-38%) in the nine months ended September 30, 2024, primarily due to a lower volume of loan originations in 2024 compared to 2023 and the sale of certain accessory loans in 2024[10] Other Operating Income Other operating income decreased in Q3 2024, primarily due to changes in the fair value of financial instruments and contingent consideration Other Operating Income (Expense) | Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Other operating (income) expense | $(2,812) | $(9,051) | +69% | - Other operating income decreased by $6.2 million (-69%) primarily due to changes in the fair value of certain financial instruments and contingent consideration of $6.8 million[11] Non-Operating Items In Q3 2024, net interest expense significantly increased due to higher debt levels and interest rates, alongside unrealized derivative losses Interest Expense, Net Interest Expense, Net | Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Interest expense, net | $182,528 | $57,601 | +217% | - The increase was primarily due to increases in unrealized loss on derivatives of $84.9 million and interest expense of $31.2 million[12] - Interest expense increased due to higher average debt outstanding (+$1.4 billion, +21%) and a 0.49% (+10%) increase in weighted average interest rates[12] Interest Income Interest income rose in Q3 2024, driven by a significant increase in interest income from loan agreements Interest Income | Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Interest income | $(38,565) | $(30,590) | +26% | - The increase was primarily due to a $6.4 million (+24%) increase in interest income from loan agreements[13] Loan Agreement Interest Income Metrics | Metric | Q3 2024 | Q3 2023 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Weighted average number of systems with loan agreements | 108,000 | 133,300 | -19% | | Loan interest income per system | $307 | $201 | +53% | Income Tax Benefit The company recognized a substantial income tax benefit in Q3 2024, primarily from investment tax credit sales Income Tax Benefit | Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Income tax benefit | $(46,126) | $(9,325) | +395% | - Income tax benefit increased by $36.8 million primarily due to ITC sales and estimated future sales of ITCs for the current year[14] Net Income (Loss) Attributable to Noncontrolling Interests Net loss attributable to noncontrolling interests increased due to new tax equity funds added in recent years Net Income (Loss) Attributable to Noncontrolling Interests | Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Net income (loss) attributable to redeemable noncontrolling interests and noncontrolling interests | $(27,735) | $6,684 | -515% | - The change of $34.4 million was primarily due to an increase in loss attributable to redeemable noncontrolling interests and noncontrolling interests from tax equity funds added in 2022, 2023, and 2024[15] Financial Performance - Nine Months Ended September 30, 2024 Detailed analysis of Sunnova's financial performance for the nine months ended September 30, 2024 Revenue Analysis For the nine months ended September 30, 2024, core customer agreements and incentives revenue significantly increased due to more systems in service and higher battery attachment rates Customer Agreements and Incentives Revenue Customer Agreements and Incentives Revenue | Metric | 9M 2024 (in thousands) | 9M 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Customer agreements and incentives revenue | $404,348 | $282,848 | +43% | - The increase was primarily due to an increase in the number of solar energy systems in service[16] PPA and Lease System Metrics | Metric | 9M 2024 | 9M 2023 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Weighted average number of PPA and lease systems | 222,300 | 161,000 | +38% | | PPA and lease revenue per system | $1,405 | $1,259 | +12% | | Battery attachment rates | 32% | 27% | +5 percentage points | Solar Energy System and Product Sales Revenue Solar energy system and product sales revenue decreased, primarily from reduced non-core inventory sales and direct sales, partially offset by growth in cash sales customers and revenue per customer Solar Energy System and Product Sales Revenue | Metric | 9M 2024 (in thousands) | 9M 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Solar energy system and product sales revenue | $211,447 | $243,623 | -13% | | Inventory sales revenue | N/A | N/A | -41% | | Direct sales revenue | N/A | N/A | -16% | | Cash sales revenue | N/A | N/A | +49% | - The decrease in inventory sales revenue (-41%) is due to a strategic shift away from buying inventory to resell, focusing on core energy services[17] - Direct sales revenue decreased (-16%) due to a change in the in-service methodology in mid-2024, requiring additional procedures and longer project placement times[17][18] Cash Sales Metrics | Metric | 9M 2024 | 9M 2023 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Number of cash sales customers | 5,000 | 4,100 | +22% | | Cash sales revenue per customer | $18,705 | $15,324 | +22% | Cost of Revenue Analysis For the nine months ended September 30, 2024, cost of revenue for customer agreements and incentives increased, driven by higher depreciation and system growth Cost of Revenue - Customer Agreements and Incentives Cost of Revenue - Customer Agreements and Incentives | Metric | 9M 2024 (in thousands) | 9M 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Cost of revenue—customer agreements and incentives | $155,064 | $105,956 | +46% | - The increase was primarily due to a $45.4 million (+49%) increase in depreciation related to solar energy systems and energy storage systems, aligned with a 54% increase in related revenue[19] PPA and Lease System Depreciation Metrics | Metric | 9M 2024 | 9M 2023 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Weighted average number of PPA and lease systems | 222,300 | 161,000 | +38% | | Depreciation per system | $619 | $573 | +8% | Cost of Revenue - Service Customers, Loan Agreements and Underwriting Cost of revenue related to service customers, loan agreements, and underwriting increased in the nine months ended September 30, 2024 - Cost of revenue related to service customers, loan agreements, and underwriting costs increased by $3.7 million (+27%) in the nine months ended September 30, 2024[20] - This increase was primarily due to a $3.0 million increase in costs related to SRECs and loan agreements[20] Cost of Revenue - Solar Energy System and Product Sales Solar energy system and product sales cost of revenue decreased due to a significant reduction in non-core inventory sales, despite increases in core cash and direct sales costs Cost of Revenue - Solar Energy System and Product Sales | Metric | 9M 2024 (in thousands) | 9M 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Cost of revenue—solar energy system and product sales | $183,111 | $196,921 | -7% | | Inventory sales costs | N/A | N/A | -38% | | Cash sales costs | N/A | N/A | +63% | | Direct sales costs | N/A | N/A | +42% | - The decrease was primarily due to a $49.6 million (-38%) decrease in inventory sales costs, reflecting a strategic shift away from reselling inventory[21] Cash Sales Cost Metrics | Metric | 9M 2024 | 9M 2023 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Number of cash sales customers | 5,000 | 4,100 | +22% | | Cash sales costs per customer | $11,091 | $8,293 | +34% | - Direct sales costs increased by $13.8 million (+42%) due to an increase in installed solar energy and energy storage systems, which have a higher cost basis than battery loans sold in 2023[21] Operating Expenses For the nine months ended September 30, 2024, operations and maintenance expense significantly increased due to non-recoverable costs from terminated dealers and other impairments Operations and Maintenance Expense Operations and Maintenance Expense | Metric | 9M 2024 (in thousands) | 9M 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Operations and maintenance expense | $89,811 | $59,306 | +51% | - The increase was primarily due to $23.8 million in charges for non-recoverable costs from terminated dealers, $4.0 million for non-recoverable prepaid design and engineering costs, and $3.5 million in other impairments[22] - Property insurance costs increased by $2.7 million (+34%) due to more assets and higher premiums, partially offset by a $3.1 million decrease in inventory-related impairments[22] - A $6.9 million write-down occurred in Q3 2024 for inventory not compatible with the domestic content bonus credits, which are expected for a majority of future originations starting September 2024[22] General and Administrative Expense General and administrative expenses also rose, reflecting increased headcount and investments in software General and Administrative Expense | Metric | 9M 2024 (in thousands) | 9M 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | General and administrative expense | $339,692 | $279,105 | +22% | - Payroll and employee-related expenses increased by $35.2 million (+26%) due to additional hires to serve a growing customer base and perform in-house maintenance services, with total headcount up 46%[23] - Depreciation expense not related to solar energy systems increased by $12.8 million (+81%), primarily due to $52.9 million of capitalized software and business technology projects placed in service over the prior twelve months[23] Provision for Current Expected Credit Losses The provision for credit losses decreased due to lower loan originations and the sale of certain accessory loans Provision for Current Expected Credit Losses | Metric | 9M 2024 (in thousands) | 9M 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Provision for current expected credit losses | $21,738 | $35,085 | -38% | - The provision for current expected credit losses decreased by $13.3 million (-38%) primarily due to a lower volume of loan originations in 2024 compared to 2023 and the sale of certain accessory loans in 2024[24] Other Operating (Income) Expense Other operating expense shifted to a loss due to sales of customer notes receivable, partially offset by fair value changes of financial instruments Other Operating (Income) Expense | Metric | 9M 2024 (in thousands) | 9M 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Other operating (income) expense | $22,016 | $(3,134) | N/A | - Other operating (income) expense changed by $25.2 million, primarily due to a $43.4 million loss on sales of customer notes receivable (which occurred in Q2 2024), partially offset by $17.1 million in fair value changes of financial instruments and contingent consideration[25] Non-Operating Items For the nine months ended September 30, 2024, net interest expense significantly increased due to higher debt, interest rates, and unrealized derivative losses Interest Expense, Net Interest Expense, Net | Metric | 9M 2024 (in thousands) | 9M 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Interest expense, net | $388,642 | $200,155 | +94% | - The increase was primarily due to a $111.0 million increase in interest expense (driven by $1.8 billion (+28%) higher average debt and a 0.79% (+17%) increase in weighted average interest rates), $72.0 million in unrealized loss on derivatives, $10.8 million in amortization of deferred financing costs, and $8.4 million in amortization of debt discounts[26] - These increases were partially offset by an $18.3 million increase in realized gains on derivatives[26] Interest Income Interest income also rose, driven by a significant increase in interest income from loan agreements Interest Income | Metric | 9M 2024 (in thousands) | 9M 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Interest income | $(109,656) | $(81,670) | +34% | - The increase was primarily due to a $24.8 million (+35%) increase in interest income from loan agreements[27] Loan Agreement Interest Income Metrics | Metric | 9M 2024 | 9M 2023 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Weighted average number of systems with loan agreements | 135,200 | 110,500 | +22% | | Loan interest income per system | $701 | $633 | +11% | Income Tax Benefit and Net Loss Attributable to Noncontrolling Interests The company recorded a substantial income tax benefit from ITC sales, and net loss attributable to noncontrolling interests increased due to new tax equity funds Income Tax Benefit and Net Loss Attributable to Noncontrolling Interests | Metric | 9M 2024 (in thousands) | 9M 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Income tax benefit | $(159,413) | $(1,632) | +9668% | | Net loss attributable to redeemable noncontrolling interests and noncontrolling interests | $(94,490) | $(37,269) | +154% | - Income tax benefit increased by $157.8 million primarily due to ITC sales and estimated future sales of ITCs for the current year[28] - Net loss attributable to redeemable noncontrolling interests and noncontrolling interests increased by $57.2 million primarily due to an increase in loss attributable to tax equity funds added in 2022, 2023, and 2024[28] Liquidity & Capital Resources Sunnova's liquidity and capital resources as of September 30, 2024, detail cash, borrowing capacity, and tax equity Key Liquidity and Capital Resources | Metric | As of September 30, 2024 (in millions) | | :----------------------------------- | :------------------------------------- | | Total cash on balance sheet | $473.9 | | Unrestricted cash | $208.9 | | Available borrowing capacity | $1.0 billion | | Undrawn committed capital (tax equity funds) | $221.9 million | - Undrawn committed capital under tax equity funds may only be used to purchase and install solar energy systems[30] Financial Statements Sunnova's unaudited condensed consolidated financial statements, covering balance sheets, operations, and cash flows Unaudited Condensed Consolidated Balance Sheets The unaudited condensed consolidated balance sheets provide a snapshot of Sunnova's financial position as of September 30, 2024, compared to December 31, 2023, detailing assets, liabilities, redeemable noncontrolling interests, and equity Unaudited Condensed Consolidated Balance Sheets | Metric | As of September 30, 2024 (in thousands) | As of December 31, 2023 (in thousands) | | :----------------------------------- | :-------------------------------------- | :------------------------------------- | | Total assets | $12,882,312 | $11,340,971 | | Total liabilities | $10,198,865 | $9,212,059 | | Redeemable noncontrolling interests | $256,440 | $165,872 | | Total equity | $2,427,007 | $1,963,040 | - Consolidated assets include $6,741,429 thousand (Sep 30, 2024) and $5,297,816 thousand (Dec 31, 2023) of assets of variable interest entities (VIEs) that can only be used to settle obligations of the VIEs[36] - Consolidated liabilities include $312,125 thousand (Sep 30, 2024) and $278,016 thousand (Dec 31, 2023) of liabilities of VIEs whose creditors have no recourse to Sunnova Energy International Inc[36] Unaudited Condensed Consolidated Statements of Operations The unaudited condensed consolidated statements of operations present Sunnova's financial performance for the three and nine months ended September 30, 2024, compared to the same periods in 2023, detailing revenue, operating expenses, and net loss attributable to stockholders Unaudited Condensed Consolidated Statements of Operations | Metric | Three Months Ended Sep 30, 2024 (in thousands) | Three Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total revenue | $235,294 | $198,398 | $615,795 | $526,471 | | Total operating expense, net | $287,781 | $236,614 | $811,432 | $673,239 | | Operating loss | $(52,487) | $(38,216) | $(195,637) | $(146,768) | | Loss before income tax | $(196,450) | $(65,788) | $(479,505) | $(269,222) | | Net loss attributable to stockholders | $(122,589) | $(63,147) | $(225,602) | $(230,321) | | Net loss per share (basic and diluted) | $(0.98) | $(0.53) | $(1.82) | $(1.97) | Unaudited Condensed Consolidated Statements of Cash Flows The unaudited condensed consolidated statements of cash flows outline Sunnova's cash movements from operating, investing, and financing activities for the nine months ended September 30, 2024, compared to the same period in 2023, showing a net decrease in cash, cash equivalents, and restricted cash Unaudited Condensed Consolidated Statements of Cash Flows | Metric | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(239,981) | $(194,791) | | Net cash used in investing activities | $(1,352,720) | $(1,891,769) | | Net cash provided by financing activities | $1,572,224 | $2,266,053 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(20,477) | $179,493 | | Cash, cash equivalents and restricted cash at end of period | $473,925 | $725,067 | | Cash and cash equivalents at end of period | $208,913 | $467,902 | Key Operational Metrics & Definitions Key operational metrics and definitions, covering supplemental financials, expense details, and customer metrics Supplemental Financial Items This section provides a breakdown of supplemental financial items, including non-cash adjustments and other key metrics, for the three and nine months ended September 30, 2024 and 2023 Supplemental Financial Items | Metric | Three Months Ended Sep 30, 2024 (in thousands) | Three Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net loss | $(150,324) | $(56,463) | $(320,092) | $(267,590) | | Depreciation expense | $59,540 | $40,082 | $166,088 | $107,957 | | Non-cash impairments | $20,448 | $6,443 | $46,800 | $22,106 | | ITC sales | $140,547 | $14,422 | $374,639 | $14,422 | Supplemental Expense Items This section details supplemental expense items, including various cost of revenue components and non-cash adjustments, for the three and nine months ended September 30, 2024 and 2023 Supplemental Expense Items | Metric | Three Months Ended Sep 30, 2024 (in thousands) | Three Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total operating expense, net | $287,781 | $236,614 | $811,432 | $673,239 | | Cost of revenue related to inventory sales | $(27,719) | $(50,694) | $(79,442) | $(129,016) | | Cost of revenue related to cash sales | $(22,238) | $(12,698) | $(55,457) | $(34,001) | | Cost of revenue related to direct sales | $(16,357) | $(12,635) | $(46,978) | $(33,199) | Customer and System Metrics This section provides key operational metrics related to customer count and weighted average number of systems for various categories, offering insights into the company's growth and service obligations Number of Customers | Metric | As of September 30, 2024 | As of December 31, 2023 | | :----------------------------------- | :----------------------- | :---------------------- | | Number of customers | 422,700 | 419,200 | Weighted Average Number of Systems | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Weighted average number of systems, excluding loan agreements and cash sales | 290,900 | 225,200 | 274,400 | 210,900 | | Weighted average number of systems with loan agreements plus accessory loans | 108,000 | 133,300 | 135,200 | 110,500 | | Weighted average number of systems with cash sales | 16,700 | 10,000 | 15,200 | 8,600 | | Weighted average number of systems | 415,600 | 368,500 | 424,800 | 330,000 | Key Terms for Our Key Metrics This section defines key operational metrics used by Sunnova to track its growth and performance, including 'Number of Customers' and 'Weighted Average Number of Systems' - Number of Customers: Includes every unique premises with a Sunnova product/financed product installed or where Sunnova is obligated to perform services, used as an indicator of historical and period-to-period growth[46] - Weighted Average Number of Systems: Calculated based on the number of months a customer and any additional service obligation related to a solar energy system is in-service during a measurement period, adjusted for partial periods of new systems. This metric helps accurately reflect system contribution to financial metrics[47] Additional Information Additional information covers conference call, forward-looking statements, company overview, and contacts Conference Call Information Sunnova hosted a conference call on October 31, 2024, to discuss its third quarter 2024 results, with replay options available until November 7, 2024, and a simultaneous webcast on its Investor Relations website - Sunnova hosted a conference call for analysts and investors on October 31, 2024, at 8:00 a.m. Eastern Time to discuss Q3 2024 results[31] - A replay of the call was available until November 7, 2024, and a simultaneous webcast was accessible via Sunnova's Investor Relations website[32] Forward-Looking Statements This section contains forward-looking statements regarding Sunnova's future performance, growth, and financial targets, which are subject to various risks and uncertainties, including market fluctuations, capital availability, and regulatory changes - The press release contains forward-looking statements concerning Sunnova's future financial or operating performance, including growth levels, customer value propositions, technological developments, service levels, and the ability to achieve operational and financial targets[33] - These statements are subject to risks and uncertainties that could cause actual results to differ materially, such as fluctuations in solar and home-building markets, capital availability, supply chain issues, competition, and regulatory changes[33] - Sunnova disclaims any obligation to update forward-looking statements, except as required by law, and advises readers to consult its SEC filings for a more complete description of risks[33] About Sunnova Sunnova Energy International Inc. is a leading adaptive energy services company focused on providing accessible, reliable, and affordable clean energy solutions to homeowners and businesses through its adaptive energy platform - Sunnova Energy International Inc. (NYSE: NOVA) is an industry-leading adaptive energy services company[34] - The company focuses on making clean energy more accessible, reliable, and affordable for homeowners and businesses[34] - Through its adaptive energy platform, Sunnova aims to provide a better energy service at a better price to deliver energy independence[34] Contacts Contact information for Sunnova's Investor Relations and Media inquiries is provided - Investor Contact: Rodney McMahan, IR@sunnova.com, 281-971-3323[48] - Media Contact: Russell Wilkerson, Russell.Wilkerson@sunnova.com, 203-581-2114[48]