Vivint Solar Takes the Heat From Disappointing Third Quarter Earnings

Vivint Solar
Image courtesy of Vivint Solar

Things have gotten pretty hot for Vivint Solar  since they reported their third quarter earnings on Monday.  Their stock initially dropped over 20% but as of now is down 17.35% over the last 5 days, currently trading at $11.72 per share .  That is a far cry from the $17.01 per share the company was priced at in its initial public offering on October1st of this year. Vivint Solar  is a wholesaler and produces most of its revenue from selling long-term service contracts to homeowners, who pay a monthly fee for the solar electricity from their rooftop panels rather than owning the equipment.

As if the stock slide wasn’t bad enough, two lawfirms including shareholder rights law firm Johnson & Weaver, LLP, are launching investigations into the company.  The investigations are focusing on  whether certain statements regarding the Company’s business and prospects were false and misleading when made.

The numbers for the third quarter that have sparked all of the controversy were reported as follows:

  • Operating Leases and Incentives Revenue was $7.1 million, up 236% from $2.1 million in the third quarter of the prior year. Total revenue for the quarter was $8.3 million, up 266% from $2.3 million in the third quarter of the prior year.
  • Cost of Revenue – Operating Leases and Incentives was $19.5 million, up  from $4.8 million in the same period of 2013.
  • Total Operating Expenses were $66.7 million, compared to $15.7 million in the third quarter of 2013. Operating expenses included non-cash stock-based compensation expense of $20.0 million and amortization of intangibles of $3.8 million.
  • Loss from Operations was $58.4 million compared to $13.5 million in the same period of 2013.
  • GAAP Net Loss Attributable to Stockholders per Diluted Share was ($0.45).
  • Non-GAAP Earnings Before Non-Controlling Interests and Redeemable Non-Controlling Interests per Share was ($0.66).  See below for a further discussion of Non-GAAP Earnings per Share.

The company also downgraded their previous guidance for the fourth quarter:

  • MW Installed: 45 to 47 MWs
  • Total Revenue: $5.5$6.5 million
  • Total Operating Expenses: $47$51 million

The company is in the process of opening 20 more offices in states that they currently serve, particularly Hawaii and California.  They plan to expand into new states but were vague as to when they would have an announcement in that regard.

It looks like Vivint Solar and its investors are in for a rough ride.  We will keep you posted on developments with the company and any legal filings.

 

Tracey Smith About Tracey Smith
Tracey is an accountant and entrepreneur with a passion for nature. This passion is what spurred her interest in renewable energy, and the rest is history as they say. Tracey is a principal in Energy Think Group, the publisher of Solar Thermal Magazine and Tek-Think. She is also the principal at Women's Financial Help Desk. She spends her free time in the outdoors with her horses and dogs. She loves to travel.