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Vivint Solar

LEHI, Utah, Nov. 6, 2019 /PRNewswire/ -- Vivint Solar, Inc. (NYSE: VSLR), today announced financial results for the third quarter ended September 30, 2019.

Third Quarter 2019 Operating Highlights 

Key operating and development highlights include:

  • MW Installed of approximately 65 MWs for the quarter, up 20% year-over-year. Total cumulative MWs installed were approximately 1,228 MWs.
  • Installations were 9,458 for the quarter, up 25% year-over-year. Cumulative installations were 178,733.
  • Revenue was $104 million, up 33% over the third quarter of 2018.
  • Estimated Gross Retained Value increased by approximately $74 million during the quarter to approximately $2.2 billion. Estimated Gross Retained Value per Watt at quarter end was $1.98.
  • Cost per Watt was $3.48, a decrease from $3.56 in the second quarter of 2019 and an increase from $3.16 in the third quarter of 2018.
  • Margin created was $69 million, a 23% increase from the third quarter of 2018. Unlevered NPV per Watt was $1.06.

Financing Activity

As of September 30, 2019, the company had approximately $100 million in undrawn capacity in the forward flow loan facilities, $155 million in undrawn capacity in the warehouse facility, and approximately 126 MWs of undeployed tax equity financing capacity.

Summary Third Quarter 2019 Financial Results


$ amounts in millions, except per share data













Three Months Ended Sept. 30,



2019



2018



YoY


Revenue:











     Customer agreements and incentives

$

70.8



$

53.5



up 32%


     Solar energy system and product sales


33.0




24.3



up 36%


Total Revenue


103.8




77.8



up 33%


Cost of revenue:











     Customer agreements and incentives


49.0




42.1



up 16%


     Solar energy system and product sales


19.4




17.7



up 10%


Total cost of revenue


68.4




59.8



up 14%


Gross profit


35.4




18.0



up 97%


Loss from operations


(44.0)




(28.3)



down 56%


Net loss attributable to common stockholders

$

(13.8)



$

(7.9)



down 76%


Net loss attributable per share to common stockholders

$

(0.11)



$

(0.07)



down 57%


Non-GAAP net loss per share

$

(0.99)



$

(0.61)



down 62%



Note: Totals may not sum due to rounding.

Guidance for the Fourth Quarter 2019

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements supersede all prior statements regarding projected 2019 financial results.

For the fourth quarter of 2019, Vivint Solar expects:

  • MW Installed: 64 - 67 MWs
  • Cost per Watt: $3.46 - $3.54
  • NPV/W: $1.04 - $1.08

Earnings Conference Call

Vivint Solar will host an investor conference call and live webcast today, Wednesday, November 6, 2019, at 5:00 p.m. ET to discuss these financial results. To access the conference call, dial 1.833.286.5799 or 1.647.689.4443 for international callers. The conference ID is 817 9606. A listen-only webcast will be accessible on the investor relations page of the company's website at investors.vivintsolar.com/. Participants should follow the instructions provided on the website to download and install the necessary audio applications in advance of the call. In addition, the earnings presentation slides will be available on the investor relations page of the site by 5:00 p.m. ET along with this press release and the financial information discussed on today's conference call at investors.vivintsolar.com/.

About Vivint Solar

Vivint Solar is a leading full-service residential solar provider in the United States. With the help of Vivint Solar, homeowners can power their homes with clean, renewable energy, typically achieving significant financial savings over time. Vivint Solar designs and installs solar energy systems for homeowners and offers monitoring and maintenance services. In addition to being able to purchase a solar energy system outright, homeowners may benefit from Vivint Solar's affordable, flexible financing options, including power purchase agreements, or lease agreements, where available. Vivint Solar also offers solar plus storage systems with LG Chem home batteries and electric vehicle chargers with ChargePoint Home. For more information, visit  www.vivintsolar.com or follow @VivintSolar on Twitter.

Note on Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, including statements regarding, but not limited to, Vivint Solar's guidance for Megawatts Installed and Cost per Watt, undeployed tax equity financing capacity, growth prospects, and operating and financial results, such as estimates of nominal contracted payments remaining, estimated retained value, estimated retained value per watt, margin created and unlevered NPV per Watt and the assumptions related to the calculation of the foregoing metrics.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Forward-looking statements should not be read as a guarantee of future performance or results, and they will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. These statements are based on current expectations and assumptions regarding future events and business performance as of the date of this press release, and they are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements, including but not limited to: the availability of additional financing on acceptable terms; changes in the retail price of traditional utility generated electricity; changes in electric utility policies and regulations; the availability of rebates, tax credits and other incentives, including solar renewable energy certificates, or SRECs, and other federal and state incentives; regulations and policies related to net metering; changes in regulations, tariffs and other trade barriers and tax policy affecting us and our industry; our ability to manage our recent and future growth, product offering mix, and costs effectively, including attracting, training and retaining sales professionals and solar energy system installers; the availability and price of solar panels and other system components; the potential inaccuracy of the assumptions employed in calculating our operating metrics; the course and outcome of litigation, regulatory investigations and other disputes; and such other risks identified in the registration statements and reports that Vivint Solar files with the U.S. Securities and Exchange Commission, or SEC, from time to time. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in those statements will be achieved or will occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements. Except as required by law, Vivint Solar does not undertake and expressly disclaims any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. You should read the documents Vivint Solar has filed with the SEC for more complete information about the company. These documents are available on both the EDGAR section of the SEC's website at www.sec.gov and the Investors section of the company's website at investors.vivintsolar.com/.

Vivint Solar, Inc.


Condensed Consolidated Unaudited Balance Sheets


(In thousands)











September 30,



December 31,



2019



2018


ASSETS








Current assets:








Cash and cash equivalents

$

260,753



$

219,591


Accounts receivable, net


27,203




14,207


Inventories


13,727




13,257


Prepaid expenses and other current assets


31,895




31,201


Total current assets


333,578




278,256


Restricted cash and cash equivalents


83,743




71,305


Solar energy systems, net


1,696,129




1,938,874


Property and equipment, net


14,332




10,730


Other non-current assets, net


567,872




28,090


TOTAL ASSETS

$

2,695,654



$

2,327,255


LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY








Current liabilities:








Accounts payable

$

48,118



$

45,929


Distributions payable to non-controlling interests and redeemable non-controlling interests


17,328




7,846


Accrued compensation


40,647




25,520


Current portion of long-term debt


144,532




12,155


Current portion of deferred revenue


28,684




30,199


Current portion of finance lease obligation


1,529




1,921


Accrued and other current liabilities


70,238




42,860


Total current liabilities


351,076




166,430


Long-term debt, net of current portion


1,282,868




1,203,282


Deferred revenue, net of current portion


16,450




13,524


Finance lease obligation, net of current portion


4,308




505


Deferred tax liability, net


539,190




437,120


Other non-current liabilities


81,740




24,610


Total liabilities


2,275,632




1,845,471


Commitments and contingencies








Redeemable non-controlling interests


118,251




119,572


Stockholders' equity:








Common stock


1,221




1,201


Additional paid-in capital


586,517




574,248


Accumulated other comprehensive loss


(24,388)




(7,223)


Accumulated deficit


(348,430)




(279,631)


Total stockholders' equity


214,920




288,595


Non-controlling interests


86,851




73,617


Total equity


301,771




362,212


TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY

$

2,695,654



$

2,327,255


 

Vivint Solar, Inc.


Condensed Consolidated Unaudited Statements of Operations


(In thousands, except per share data)



















Three Months Ended



Nine Months Ended



September 30,



September 30,



2019



2018



2019



2018


Revenue:
















Customer agreements and incentives

$

70,819



$

53,470



$

173,777



$

139,349


Solar energy system and product sales


33,030




24,346




90,200




87,515


Total revenue


103,849




77,816




263,977




226,864


Cost of revenue:
















Cost of revenue—customer agreements and incentives


48,993




42,135




132,258




122,188


Cost of revenue—solar energy system and product sales


19,444




17,700




52,498




62,735


Total cost of revenue


68,437




59,835




184,756




184,923


Gross profit


35,412




17,981




79,221




41,941


Operating expenses:
















Sales and marketing


46,121




15,841




112,792




40,999


Research and development


510




475




1,503




1,472


General and administrative


32,760




29,945




87,014




71,941


Total operating expenses


79,391




46,261




201,309




114,412


Loss from operations


(43,979)




(28,280)




(122,088)




(72,471)


Interest expense, net


22,804




18,715




61,403




46,973


Other expense (income), net


3,907




(1)




6,657




(6,371)


Loss before income taxes


(70,690)




(46,994)




(190,148)




(113,073)


Income tax expense


50,410




25,698




107,847




79,693


Net loss


(121,100)




(72,692)




(297,995)




(192,766)


Net loss attributable to non-controlling interests and redeemable non-controlling interests


(107,265)




(64,824)




(229,351)




(190,038)


Net loss attributable to common stockholders

$

(13,835)



$

(7,868)



$

(68,644)



$

(2,728)


Net loss attributable per share to common stockholders:
















Basic and diluted

$

(0.11)



$

(0.07)



$

(0.57)



$

(0.02)


Weighted-average shares used in computing net loss attributable per share to common stockholders:
















Basic and diluted


121,730




118,767




120,974




116,871


 

Vivint Solar, Inc.


Condensed Consolidated Unaudited Statements of Cash Flows


(In thousands)



















Three Months Ended



Nine Months Ended



September 30,



September 30,



2019



2018



2019



2018


CASH FLOWS FROM OPERATING ACTIVITIES:
















Net loss

$

(121,100)



$

(72,692)



$

(297,995)



$

(192,766)


Adjustments to reconcile net loss to net cash used in operating activities:
















Depreciation and amortization


21,926




17,807




61,243




51,247


Deferred income taxes


50,666




25,948




108,344




80,121


Stock-based compensation


4,150




3,103




11,985




9,884


Loss on solar energy systems and property and equipment


5,097




1,414




9,254




4,439


Noncash interest and other expense


3,986




1,661




7,288




15,317


Reduction in lease pass-through financing obligation


(1,630)




(1,385)




(3,662)




(3,549)


(Gains) losses on interest rate swaps


(1,904)







846




(1,279)


Changes in operating assets and liabilities:
















Accounts receivable, net


983




4,444




(12,996)




(245)


Inventories


(656)




(2,645)




(470)




6,817


Prepaid expenses and other current assets


(75)




655




741




8,931


Other non-current assets, net


(61,770)




(1,429)




(126,402)




(8,042)


Accounts payable


1,516




(957)




2,032




941


Accrued compensation


15,408




6,719




14,409




4,390


Deferred revenue


694




4,073




1,411




(6,441)


Accrued and other liabilities


8,871




9,092




9,050




7,177


Net cash used in operating activities


(73,838)




(4,192)




(214,922)




(23,058)


CASH FLOWS FROM INVESTING ACTIVITIES:
















Payments for the cost of solar energy systems


(62,928)




(87,301)




(187,328)




(233,548)


Payments for property and equipment


(225)




(64)




(1,219)




(129)


Proceeds from disposals of solar energy systems and property and equipment


897




492




2,025




2,335


Purchase of intangible assets


(974)




(223)




(1,089)




(223)


Net cash used in investing activities


(63,230)




(87,096)




(187,611)




(231,565)


CASH FLOWS FROM FINANCING ACTIVITIES:
















Proceeds from investment by non-controlling interests and redeemable non-controlling interests


124,417




86,634




284,055




194,921


Distributions paid to non-controlling interests and redeemable non-controlling interests


(15,258)




(13,171)




(33,309)




(41,729)


Proceeds from long-term debt


218,808




41,748




351,972




917,748


Payments on long-term debt


(118,167)




(4,462)




(139,080)




(693,782)


Payments for debt issuance and deferred offering costs


(6,420)




(3,494)




(9,382)




(21,209)


Proceeds from lease pass-through financing obligation


1,009




994




2,527




2,491


Principal payments on finance lease obligations


(377)




(732)




(954)




(2,663)


Proceeds from issuance of common stock


34




39




304




876


Net cash provided by financing activities


204,046




107,556




456,133




356,653


NET INCREASE IN CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED AMOUNTS


66,978




16,268




53,600




102,030


CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED AMOUNTS—Beginning of period


277,518




240,700




290,896




154,938


CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED AMOUNTS—End of period

$

344,496



$

256,968



$

344,496



$

256,968


 

Vivint Solar, Inc.


Key Operating Metrics















Three Months Ended



September 30,



June 30,



September 30,



2019



2019



2018


 Installations


9,458




8,163




7,547


 Megawatts installed


65.1




56.0




54.3















As of



September 30,



June 30,



September 30,



2019



2019



2018


 Cumulative installations


178,733




169,275




146,868


 Cumulative megawatts installed


1,227.6




1,162.5




1,006.6


 Estimated nominal contracted payments remaining (in millions)

$

4,200.3



$

3,976.2



$

3,444.4


      Estimated retained value under energy contracts (in millions)

$

1,626.3



$

1,587.0



$

1,482.7


      Estimated retained value of renewal (in millions)

$

566.5



$

531.6



$

451.8


 Estimated gross retained value (in millions)

$

2,192.8



$

2,118.6



$

1,934.5


 Estimated gross retained value per watt

$

1.98



$

2.02



$

2.09


Sensitivity Analysis for Retained Value

The following table provides quantitative sensitivity analysis of our estimate of retained value of solar energy systems under contracts as of September 30, 2019, including both the contracted and estimated renewal portion, at a range of discount rates (retained value amounts in millions):


4%



6%



8%


 Estimated retained value under energy contracts

$

1,909.4



$

1,626.3



$

1,401.3


 Estimated retained value of renewal


870.1




566.5




373.0


 Total estimated gross retained value

$

2,779.5



$

2,192.8



$

1,774.3


Non-GAAP Earnings per Share (EPS) Before Non-controlling Interests

We report GAAP EPS, which is based upon net loss attributable to common stockholders. We also report non-GAAP EPS. The difference between GAAP EPS and non-GAAP EPS is that non-GAAP EPS is based on net loss, which excludes net loss attributable to non-controlling interests and redeemable non-controlling interests. As we are in a net loss position for all periods reported, potentially issuable shares are excluded from the diluted EPS calculation since the effect would be antidilutive. Therefore, basic and diluted non-GAAP EPS are the same in each period presented.

Under GAAP accounting, we report net loss attributable to non-controlling interests and redeemable non-controlling interests to reflect our joint venture fund investors' allocable share in the results of these joint venture investment funds. Net loss attributable to non-controlling interests and redeemable non-controlling interests is calculated based primarily on the hypothetical liquidation at book value, or HLBV, method, which assumes that the joint venture funds are liquidated at the reporting date, even though liquidation may or may not ever occur. Additionally, the returns that will be allocated to the investors over the expected terms of the investment funds may differ significantly from the amounts calculated under the HLBV method. Accordingly, we also report non-GAAP EPS based on our losses before net loss attributable to non-controlling interests and redeemable non-controlling interests per share, which we view as a better measure of our operating performance.  Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.

According to this definition, the non-GAAP loss before the allocation of loss attributable to non-controlling interests and redeemable non-controlling interests per share was ($0.99) and ($2.46) for the three and nine months ended September 30, 2019.

Vivint Solar, Inc.


Reconciliation from GAAP EPS to Non-GAAP EPS


(In thousands, except per share data)



































Three Months Ended



September 30, 2019



September 30, 2018



Net Loss



EPS



Net Loss



EPS


Net loss attributable to common stockholders

$

(13,835)



$

(0.11)



$

(7,868)



$

(0.07)


Net loss attributable to non-controlling interests and redeemable non-controlling interests


(107,265)




(0.88)




(64,824)




(0.54)


Non-GAAP net loss

$

(121,100)



$

(0.99)



$

(72,692)



$

(0.61)


Weighted-average shares used in computing net loss per share






121,730








118,767


 


Nine Months Ended



September 30, 2019



September 30, 2018



Net Loss



EPS



Net Loss



EPS


Net loss attributable to common stockholders

$

(68,644)



$

(0.57)



$

(2,728)



$

(0.02)


Net loss attributable to non-controlling interests and redeemable non-controlling interests


(229,351)



$

(1.89)




(190,038)



$

(1.63)


Non-GAAP net loss

$

(297,995)



$

(2.46)



$

(192,766)



$

(1.65)


Weighted-average shares used in computing net loss per share:






120,974








116,871


Glossary of Definitions

"Installations" represents the number of solar energy systems installed on customers' premises.

"MWs or megawatts" represents the DC nameplate megawatt production capacity.

"MW Installed" represents the aggregate megawatt nameplate capacity of solar energy systems for which panels, inverters, and mounting and racking hardware have been installed on customer premises in the period.

"Estimated Nominal Contracted Payments Remaining" equals the sum of the remaining cash payments that Vivint Solar's customers are expected to pay over the term of their agreements for systems installed as of the measurement date. For a power purchase agreement, or PPA, Vivint Solar multiplies the contract price per kilowatt-hour by the estimated annual energy output of the associated solar energy system to determine the estimated nominal contracted payments. For a customer lease, Vivint Solar includes the monthly fees and upfront fee, if any, as set forth in the lease.

"Estimated Gross Retained Value" represents the net cash flows, discounted at 6%, that Vivint Solar expects to receive from customers pursuant to long-term customer contracts plus the value of contracted SRECs net of estimated cash distributions to fund investors, debt associated with our forward flow facilities, and estimated operating expenses for systems installed as of the measurement date. For purposes of the calculation, Vivint Solar aggregates the estimated retained value from the solar energy systems during the typical 20-year term of Vivint Solar's contracts plus the value of contracted SRECs, which Vivint Solar refers to as estimated retained value under energy contracts, and the estimated retained value associated with an assumed 10-year renewal term following the expiration of the initial contract term, which Vivint Solar refers to as estimated retained value of renewal. To calculate estimated retained value of renewal, Vivint Solar assumes all contracts are renewed at 90% of the contractual price in effect at the expiration of the initial term.

"Estimated Gross Retained Value per Watt" is calculated by dividing the estimated retained value as of the measurement date by the aggregate nameplate capacity of solar energy systems under long-term customer contracts that have been installed as of such date, and is subject to the same assumptions and uncertainties as estimated retained value.

"Project Value" represents the net cash flows, discounted at 6% that Vivint Solar expects to receive from customers net of estimated distributions to fund investors and operating expenses, estimated utility and state incentives, and estimated finance proceeds from fund investors.

"NPV per watt" represents the estimated weighted average unit margin of Vivint Solar's PPA and customer lease business and its system sales business. It is calculated by dividing Margin Created during the period by the total MWs Installed during the period.

"Margin Created" represents the estimated margin created during the period. It is the estimated value of Vivint Solar's PPA and customer lease agreements and the value of the system sales less the costs required to create the value. Specifically, it is the sum of the project value per watt multiplied by "MWs Installed – PPA/Lease" and "Revenue – solar energy system and product sales" less total creation costs.

"Undeployed Tax Equity Financing Capacity" represents a forecast of the amount of megawatts that can be deployed based on committed available tax equity financing for energy contracts.

Investor Contact:

Rob Kain
Vice President of Investor Relations
855-842-1844
ir@vivintsolar.com

Press Contact:

Heather Hurst
Senior Director of Communications
385-202-6577
pr@vivintsolar.com

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