First Quarter 2022 and Recent Highlights
- Added 15,300 customers in the first quarter of 2022, bringing total customer count to 207,800 as of March 31, 2022;
- Reaffirmed full-year 2022 guidance and our major metric growth plan, the Triple-Double Triple Plan;
- Published our 2021 Environmental, Social, and Governance (ESG) Report, further detailing Sunnova's ESG strategy and performance; and
- Total liquidity of $703 million as of March 31, 2022.
Sunnova Energy International Inc., one of the leading U.S. residential energy service providers, today announced financial results for the first quarter ended March 31, 2022.
"Growing national security concerns and the increasing threat of climate change have created a renewed focus on the critical importance of energy transition for consumers," said William J. (John) Berger, founder and Chief Executive Officer of Sunnova. "Sunnova is embracing an equitable, practical, and balanced energy future in order to enable a successful transition.
"As utility rates continue to rise across the country and weather events worsen in intensity, consumers are increasingly looking for a single source energy service provider to meet their energy needs. The Sunnova Adaptive HomeTM, which brings together the technologies that make up the home of the future, will be the affordable, reliable, and sustainable solution customers require. To enable our success, we will continue to focus on what differentiates us - a combination of software, service, and aggregation - so a homeowner will choose Sunnova when they are ready to make their own personal energy transition.
"The beginning of 2022 has been characterized by demand increasing at a higher rate than anticipated from our current and future customers for additional energy services. To meet this demand, we have worked closely with our dealers and equipment partners to offer many new services such as batteries, electric vehicle charging, generators, and load managers. This greater than expected demand in additional energy services provides us with increased confidence in our ability to achieve the per share and per customer value creation targets that we laid out in our Triple-Double Triple Plan.
"As part of this expansion in energy services, we developed new software to analyze our customer data. We want to ensure only homeowners with whom we have an ongoing economic relationship are counted as customers and are counted only once, regardless of the number of services we provide to them. Adopting a more rigid customer definition allows us to track the increase in value created by homeowners electing to "up-power" their existing Sunnova energy services contracts through additional solar capacity, batteries, and other energy services. This customer trend of "up-powering" and increasing their services with Sunnova has happened faster than we expected and is accelerating. Further, despite this more conservative view on what qualifies as a customer our 2022 and 2023 customer growth targets remain unchanged."
First Quarter 2022 Results
Revenue increased to $65.7 million, or by $24.4 million, for the three months ended March 31, 2022 compared to the three months ended March 31, 2021. This increase was primarily the result of an increased number of solar energy systems in service and the April 2021 acquisition of SunStreet.
Total operating expense, net increased to $99.9 million, or by $35.3 million for the three months ended March 31, 2022 compared to the three months ended March 31, 2021. This increase was primarily the result of an increased number of solar energy systems in service, the April 2021 acquisition of SunStreet, greater depreciation expense, and higher general and administrative expense. This increase was partially offset by an increase in other operating income primarily due to the change in the fair value of certain financial instruments and contingent consideration.
Adjusted Operating Expense increased to $47.0 million, or by $18.5 million, for the three months ended March 31, 2022 compared to the three months ended March 31, 2021. This increase was primarily the result of an increased number of solar energy systems in service, the April 2021 acquisition of SunStreet, and higher general and administrative expense.
Sunnova incurred a net loss of $20.6 million for the three months ended March 31, 2022 compared to a net loss of $24.1 million for the three months ended March 31, 2021. This lower net loss was primarily the result of lower net interest expense primarily due to an increase in unrealized gains on derivatives of $16.6 million. This was partially offset by an increase in interest expense of $5.0 million due to the issuance of additional debt in 2021 and 2022.
Adjusted EBITDA was relatively unchanged at $12.5 million for the three months ended March 31, 2022 compared to $12.8 million for the three months ended March 31, 2021.
Customer principal (net of amounts recorded in revenue) and interest payments received from solar loans increased to $20.4 million and $10.8 million, respectively, for the three months ended March 31, 2022, or by $8.1 million and $3.7 million, respectively, compared to the three months ended March 31, 2021. This increase was the result of our larger customer loan portfolio.
Liquidity & Capital Resources
As of March 31, 2022, Sunnova had total cash of $325 million, including restricted and unrestricted cash. An additional $378 million of tax equity commitments and debt capacity against qualified, unencumbered assets were available in Sunnova's tax equity and warehouse credit facilities as of March 31, 2022.
2022 Guidance
Sunnova management reaffirms its 2022 guidance of:
- Customer additions of between 85,000 and 89,000;
- Adjusted EBITDA of between $117 million and $137 million;
- Customer interest payments received from solar loans of between $45 million and $55 million; and
- Customer principal payments received from solar loans, net of amounts recorded in revenue, of between $134 million and $154 million.
