Vivint Solar's increased Q4 bookings, installations fail to lift operating losses

Utah-headquartered Vivint Solar, one of the leading residential solar lease providers in the U.S., has published fourth quarter (Q4) and fiscal year 2015 financial results that reveal sizeable operating losses.

Although Q4 delivered increased bookings and MW installations, Vivint Solar’s loss from operations rose to $55.7 million in the quarter, up from $40 million for Q4 2014. The company’s business model of securing customers on long-term lease contracts means short-term losses are inevitable; operating leases and incentives revenue, for example, increased by 163% year-on-year to $15.5 million. This drove revenue to $16 million for the quarter, which represented a 134% increase on the $6.9 million revenue posted in Q4 2014.

However, the cost of revenue derived from these operating leases and incentives also increased to $36.4 million, up from $20.8 million a year prior.

Hence, with total operating expenses standing at $71.7 million (in Q4 2014 that figure was just $46.8 million), losses overall rose, burdened by a one-time case expense of $5.3 million in a transaction related to expenses, and a further stock-based compensation expense of $2.4 million.

Contracts and full year financials

Bookings for Q4 reached 80 MW, which was a 56% increase on last year and a reflection of a strong residential solar market. The number of solar installations carried out by Vivint Solar in Q4 was 8,411, a 23% increase on Q4 2014. The company ended the year with cumulative installations of 68,527, which amounts to 459 MW of installed capacity nationwide to date.

This growth ensured that nominal contract payments remaining reached $1.82 billion – an 82% increase year-on-year, with retained value rising to $906 million, which was another 80%-plus rise. Vivint Solar estimates its retained value per watt to be $1.98, with the cost per watt relatively flat at $3.12, up slightly from Q4 2014, when it stood at $2.96.

However, taken across the entire fiscal year, loss from operations rose to $231.1 million, up from $162.3 million in 2014. The recent termination of the merger and acquisition deal with SunEdison is unlikely to salve current operating expenses, which rose to $295.3 million last year, up distinctly from 2014’s $187.6 million.

Vivint Solar confirmed that yesterday it entered into a long-term $200 million loan facility in order to ease its initial debt burdens. The company said that it incurred $25 million in borrowings at closing, and will incur an additional $50 million in borrowings within 30 days.