US residential solar installer Sunnova posted an increase in revenues and income in its FY2024 financial results, though the company also warned of “substantial doubts” over its future as a going concern just weeks after it announced around 300 job cuts.
Sunnova’s yearly revenues were US$840 million, a 17% increase from 2023, and interest incomes were also up by 29% to US$150 million. Its cumulative installed solar capacity also surpassed 3GW and its customer additions improved by 5% year-on-year.
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Despite improvements, the company signalled doubts over its ability to continue operations and stay afloat over the coming year.
Its unrestricted cash failed to meet Sunnova’s expected US$100 million YoY increase.
“Total cash increased by 11% in 2024. This was accomplished without issuing new corporate capital”, said William J Berger, founder and CEO.
“While total cash increased, unrestricted cash remained relatively flat, below our estimated US$100 million increase. This miss was primarily due to lower tax equity contributions stemming from timing delays of ITC sales, fewer installed systems, and funds received in December classified as restricted.”
Berger continued, saying that over 2024 and early 2025 the company enacted various measures which he said “better position Sunnova in the current environment and support positive cash in 2025 and beyond.”
These included “Mandating domestic content for our dealers to increase our weighted average ITC percentage, raising price, simplifying our business to reduce costs, and changing dealer payment terms to align with our own funding sources.”
Doubt over the future
In its results statement, Sunnova said: “Substantial doubt exists regarding our ability to continue as a going concern for a period of at least one year from the date we issue our consolidated financial statements.” This, it said, is because its cash flow, access to unrestricted cash and existing financial commitments “are not sufficient to meet obligations and fund operations”.
Sunnova said its management’s plans to address these concerns include refinancing certain obligations, executing additional debt financing, revising dealer payment terms, obtaining tax equity commitment “that is sufficient to continue operating our business model” and reducing expenditures. Axeing of around 15% of its workforce last month is expected to save the company around US$35 million.
A number of US residential solar installers are facing challenges, most notably industry stalwart SunPower which filed for bankruptcy last year. Fellow firm Sunrun has also been executing a shift towards more energy storage systems alongside solar, a trend that Sunnova also saw with an increase in its revenue per customer, largely due to the increase in expensive energy storage additions.
When it cut those jobs last month, Sunnova cited “high interest rates” and “policy uncertainty” for the decision, which Berger said was “never easy” to make.
Responding to a question about its “going concern” doubts from Roth Capital on Sunnova’s earnings call, Berger said: “The overall environment is terrible. I mean, it’s the political environment, the capital markets, look at the equity trading off. And so, that just gets everybody in a very bad mood…And then the fourth quarter, we struggled to close some things after the election.”
Earnings transcript from Seeking Alpha.
