Sunnova finished its first quarter as a public company with a net loss grazing $50 million, which the company attributed to several factors including $1.3 million in initial public offering-related costs and $11.6 million in depreciation expenses.

Despite the loss, the company cited positive adjusted EBITDA, 27 percent year-over-year customer growth and 20 percent growth in its dealer base as grounds for a positive outlook. 

“Our financial position is strong, particularly following our IPO,” said CEO John Berger on a Monday call presenting the earnings. “Going forward we remain extremely confident in our ability to continue to drive outsized market growth.” 

More highlights from Sunnova’s Q2 results:

  • Net loss of $49.8 million in Q2, compared to $9.2 million in Q2 2018.
  • A $5.6 million year-over-year increase in revenue, rising to $34.6 million.
  • Adjusted EBITDA at $13.6 million, compared to $13.2 million in Q2 2018. 
  • A total of 67,600 customers, compared to 63,600 reported in Q1 2019 and an increase of 13,900 compared to the same period last year. 
  • Operating cash flow at negative $20 million in the last six months, compared to negative $12.2 million in the same period last year.

Sunnova’s share price has mostly hovered between $11 and $12 since its IPO, and it remained there on Monday evening despite dipping slightly in after-hours trading.

The Q2 results indicate the residential solar provider still has much work ahead to become profitable. Sunnova has not yet achieved that target, recording losses in 2017, 2018 and Q1 2019, though that's due in part to its investments in growth.

The Texas-based company does have some potential advantages over its competitors, though. On Monday, Berger said Sunnova is “distinctly positioned” to grow at an above-market rate. 

Vivint and Sunrun center their business on solar leases and power-purchase agreements. Those offerings make up the majority of Sunnova’s business, too, but the company also offers solar loans — now the largest source of financing for residential solar installations. Because Sunnova also relies on more than 100 local channel partners and installers to deploy its systems, it has less overhead compared to competitors with in-house installation arms.

“These local entrepreneurs manage costs very effectively and efficiently,” said CFO Robert Lane on the Monday call, adding that Sunnova expects customer cost declines in coming quarters.

Analysts at Wood Mackenzie Power & Renewables expect double-digit percentage growth on the horizon for those small local solar installers, but forecast that they'll prefer loan deals. To fully capitalize on the advantages presented by its loan offering and its dealer network, analysts said Sunnova will have to grow its loan business, which now makes up only about 30 percent of its sales.

On Monday, Sunnova said it doesn’t expect the percentage of loan sales to change drastically in the near term. It set 2019 guidance at $17 million to $18 million for principal payments for solar loans and at $12 million to $13 million for solar loan interest payments. 

In pre-IPO filings, Sunnova said it had deployed more than 455 megawatts of systems. The company did not quantify its Q2 installations. Wood Mackenzie Power & Renewables estimates that Sunnova deployed 29 megawatts of solar in Q1, the same as rival Tesla.

The company did say it has reached 11 percent storage attachment rates and expects to grow customers to 79,000 by the end of 2019. Sunnova offered adjusted EBITDA guidance between $47 million and $49 million for 2019.