United States-based residential solar, battery storage, and energy services company Sunrun recorded a net loss of $1.47 billion during the third quarter (Q3) of 2023, a year-over-year (YoY) increase of 848% compared to a net loss of $155.51 million.
The primary reason behind the surge in losses in Q3 was the non-cash goodwill impairment charge of about $1.2 billion, as the company reduced the goodwill value from $4.3 billion to $3.1 billion following the drop in stock prices.
The goodwill came from their acquisition of Vivint Solar in October 2020, with its value determined based on market capitalizations at the time of the acquisition.
The drop majorly impacted the company’s performance in the quarter and led to a loss of $1.35 billion from operations.
Sunrun recorded a revenue of $563.18 million, a 10% YoY decrease from $631.91 million. The decrease was mainly due to the drop in revenue generated from solar energy systems and product sales, which decreased to $246.65 million, by 31% YoY, from $360.69 million.
The cost of revenue amounted to $518 million, which is 1% lower than the previous year. Total operating expenses, excluding the non-cash goodwill impairment, stood at $752.7 million, showing a 2% YoY decrease from the previous year.
“We have sharpened our focus on cash generation and continue to execute a customer-first, sustainable growth strategy that does not require equity funding. We are using challenges from this macroeconomic environment to accelerate our leadership position and tighten our operations,” said Mary Powell, Sunrun’s Chief Executive Officer. “We are fundamentally and rapidly transitioning to a storage-first company to offer the most pro-consumer product, expand our margins, and lay the foundation for increased value streams from our growing fleet of networked storage systems.”
In Q3, over 33% of customers added storage to their solar systems, nearly double compared to Q2. California led with 85% of new customers getting solar and storage. Sunrun has installed 76,000 systems with 1.1 GWh of storage.
During the quarter, the company completed a $715 million deal for its solar and battery systems.
The company said it is launching a backup power system in California using premium batteries. It stores solar energy for use during power outages and helps save on electricity costs.
In Q3 2023, Sunrun added 33,806 customers, including 29,303 subscribers. The annual recurring revenue from subscribers reached over $1.2 billion as of September 30, 2023.
Sunrun’s gross earning assets were $13.3 billion, with net earning assets at $4.6 billion, including $952 million in cash as of September 30, 2023.
In terms of capacity, they installed 175.6 MWh of storage in Q3. Solar energy capacity installed was 258.2 MW in the same period, with 229 MW dedicated to subscribers.
The company said its Q3 solar system deployments are expected to offset 5.2 million metric tons of CO2 emissions over the next thirty years. In the past year, their systems are estimated to have offset 3.6 million metric tons of CO2.
For the first nine months (9M) of 2023, Sunrun recorded a net loss of $2.15 billion, a 312.6% YoY increase from a $521.73 million net loss.
For the January to September period, the company recorded a revenue of $1.74 billion, a slight YoY increase from $1.71 billion.
Sunrun recorded a net loss of $340.72 million during the second quarter of 2023, a YoY increase of 62.4% from $209.76 million.
In January, Sunrun closed $835 million in non-recourse financings to expand its assets that will help the company maintain the growth trajectory across various segments in its business, including energy storage and diverse energy services.
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