Sunrun raised approximately $220 million in its IPO last month and reported its first quarterly earnings results as a public firm on Thursday afternoon. The stock is down to $11.50 after its initial public offering, which priced at $14 per share.

Sunrun installed 42.4 megawatts of residential solar in Q2, up 76 percent year-on-year. Revenue for the quarter was $72.7 million versus the consensus estimate of $90.5 million, according to StreetInsider.com.

Lynn Jurich, Sunrun’s CEO and co-founder, said, “We ended the quarter with approximately 87,000 customers and a 60 percent increase in our quarterly [net present value] to $37.2 million." SolarCity, the leader in this market, added 44,900 customers in Q2 for a cumulative total of 262,495 at the end of the quarter. SolarCity has a market cap of $4.6 billion compared to Sunrun's $1.1 billion market cap.

Sunrun Q2 financials

  • Total revenue grew to $72.7 million in the second quarter of 2015 from $51.9 million in the second quarter of 2014
  • NPV in the second quarter of 2015 was $37.2 million, compared to $23.3 million in the previous quarter -- a 60 percent increase
  • Pre-tax project value per watt was $5.00, "which excludes substantially all of the value of SRECs"
  • Creation cost per watt was $4.08 in Q2 2015 compared to $4.36 in the previous quarter
  • 61.2 megawatts were booked, up 59 percent quarter-over-quarter and 70 percent year-over-year
  • Sunrun has cumulatively deployed a total of 472.5 megawatts, an increase of 46 percent year-over-year
  • Estimated nominal contracted payments remaining as of June 30, 2015 amounted to $1,917 million, compared to $1,249 million as of June 30, 2014

Simple terms such as profit and loss are difficult to apply to a business based on 20-year leases and tax equity funding. In any case, Sunrun lost $50 million in the second quarter and $102 million in the first half of 2015. 

Sunrun offered a $111 million asset-backed securitization with a 4.5 percent weighted average interest rate in July.

Guidance for Q3 and full year 2015

For the third quarter of 2015, Sunrun expects to deploy 54 to 55 megawatts; it expects to install approximately 205 megawatts for the full year 2015.   

Jurich said the firm is "on track to exit the year with a cost structure, in our direct business, that is competitive with other scale companies." She added, "We believe the overall business will have a cost structure in 2017 that allows for healthy net present value -- even in the potential 10 percent ITC environment."

GTM Research senior analyst Nicole Litvak notes, "Sunrun's direct business (as opposed to its business through channel partners) now accounts for about half of all deployments -- and that share is increasing. This is a clear indication that using a vertically integrated model is Sunrun's best chance at scaling fast enough to catch up to Vivint and SolarCity."

FIGURE: Leading U.S. Residential Solar Financiers, 2014

Source: GTM Research report U.S. Residential Solar Financing 2015-2020