Sunnova narrows Q2 loss aided by investment tax credit sales

US energy-as-a-service provider Sunnova Energy International Inc (NYSE:NOVA) on Wednesday posted a net loss of USD 79.7 million (EUR 73.9m) for the second quarter of 2024, narrowing from USD 100.8 million in the same period of 2023.

The improvement reflects investment tax credit sales that resulted in an income tax benefit.

Revenue increased to USD 219.6 million from USD 166.4 million, while adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was up to USD 216.7 million from USD 28.1 million a year ago, aided by investment tax credit sales, which began in the third quarter of 2023.

In the period, the company added 161 MW of solar power generation and 284 MWh of energy storage under management.

“The fundamentals of our business continue to be backed by macroeconomic tailwinds like steadily rising utility rates, increasing grid instability, and declining equipment costs. When coupled with a rapid increase in customers favouring leases and power purchase agreements over loans, these dynamics result in an even greater value proposition for customers and a 'value wedge' for Sunnova,” said founder and CEO William John Berger. The company is continuing to focus on increasing cash generation and maintaining strong margins.

Sunnova provided the following 2024 guidance:

- customer additions of between 110,000 and 120,000, a reduction from 140,000-150,000 as the company continues to refocus on its higher margin core adaptive energy customers.

- Adjusted EBITDA of between USD 650 million and USD 750 million, an increase from USD 350 million-450 million, accounting for a greater contribution from investment tax credit sales and an increase in expected lease and PPA revenues along with lower operating expenses.

- Interest income and the principal proceeds from customer notes receivable, net of amounts recorded in revenue, and proceeds from investments in solar receivables are expected to be in the ranges of USD 115 million-125 million and USD 180 million-190 million, respectively. This marks a decrease from the previous guidance, reflecting a recent sale of non-solar loans and a quicker-than-expected move to leases and PPAs.

(USD 1 = EUR 0.927)

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