Sunrun Inc

Previous wording

We have experienced substantial growth in our business and operations since our inception in 2007, as well as through our acquisition of Vivint Solar on October 8, 2020. As of June 30, 2024, we operate the largest fleet of residential solar energy systems in the United States. We have a Networked Solar Energy Capacity of 7,058 megawatts as of June 30, 2024, which represents the aggregate megawatt production capacity of our solar energy systems that have been recognized as deployments, from our inception through the measurement date. Gross Earning Assets as of June 30, 2024 were approximately $15.7 billion. Please see the section entitled “Key Operating Metrics” for more details on how we calculate Networked Solar Energy Capacity and Gross Earning Assets.

Current wording

We have experienced substantial growth in our business and operations since our inception in 2007, as well as through our acquisition of Vivint Solar on October 8, 2020. As of September 30, 2024, we operate the largest fleet of residential solar energy systems in the United States. We have a Networked Solar Energy Capacity of 7,288 megawatts as of September 30, 2024, which represents the aggregate megawatt production capacity of our solar energy systems that have been recognized as deployments, from our inception through the measurement date. Gross Earning Assets as of September 30, 2024 were approximately $16.8 billion. Please see the section entitled “Key Operating Metrics” for more details on how we calculate Networked Solar Energy Capacity and Gross Earning Assets.

Previous wording

Our business and financial performance also depend on worldwide economic conditions. We face global macroeconomic challenges, particularly in light of increases and volatility in interest rates, uncertainty in markets, inflationary trends, navigating complex and evolving regulatory and tax frameworks, and the dynamics of the global trade environment. During fiscal year 2023 and the first three months of fiscal 2024, we observed market uncertainty, increasing inflationary pressures, rising interest rates, the market impacts of proposed or newly enacted regulatory frameworks in markets within which we do business and within our industry, supply constraints, and bank failures. In particular, rising interest rates, including recent historic increases starting in 2021, have resulted and may continue to result in a decrease in our advance rates, reducing the proceeds we receive from certain investment funds. Because our financing structure is sensitive to volatility in interest rates, higher rates increase our cost of capital and may decrease the amount of capital available to us to finance the deployment of new solar energy systems. These market dynamics, some of which we expect will continue into the foreseeable future, have impacted and may continue to impact our business and financial results.

Current wording

Our business and financial performance also depend on worldwide economic conditions. We face global macroeconomic challenges, particularly in light of increases and volatility in interest rates, uncertainty in markets, inflationary trends, navigating complex and evolving regulatory and tax frameworks, and the dynamics of the global trade environment. During fiscal year 2023 and the first nine months of fiscal 2024, we observed market uncertainty, increasing inflationary pressures, rising interest rates, the market impacts of proposed or newly enacted regulatory frameworks in markets within which we do business and within our industry, supply constraints, and bank failures. In particular, rising interest rates, including recent historic increases starting in 2021, have resulted and may continue to result in a decrease in our advance rates, reducing the proceeds we receive from certain investment funds. Because our financing structure is sensitive to volatility in interest rates, higher rates increase our cost of capital and may decrease the amount of capital available to us to finance the deployment of new solar energy systems. These market dynamics, some of which we expect will continue into the foreseeable future, have impacted and may continue to impact our business and financial results.

Previous wording

Our Customer Agreements provide for recurring customer payments, typically over 20 or 25 years, and the related solar energy systems are generally eligible for Commercial ITCs, accelerated tax depreciation and other government or utility incentives. Our financing strategy is to monetize these benefits at a low weighted average cost of capital. This low cost of capital enables us to offer attractive pricing to our customers for the energy generated by the solar energy system on their homes. Historically, we have monetized a portion of the value created by our Customer Agreements and the related solar energy systems through investment funds. These assets are attractive to fund investors due to the long-term, recurring nature of the cash flows generated by our Customer Agreements, the high credit scores of our customers, the fact that energy is a non-discretionary good and our low loss rates. In addition, fund investors can receive attractive after-tax returns from our investment funds due to their ability to utilize Commercial ITCs, accelerated depreciation and certain government or utility incentives associated with the funds’ ownership of solar energy systems.

Current wording

Our Customer Agreements provide for recurring customer payments, typically over 20 or 25 years, and the related solar energy systems are generally eligible for Commercial ITCs, accelerated tax depreciation and other government or utility incentives. Our financing strategy is to monetize these benefits at a low weighted average cost of capital. This low cost of capital enables us to offer attractive pricing to our customers for the energy generated by the solar energy system on their homes. Historically, we have monetized a portion of the value created by our Customer Agreements and the related solar energy systems through investment funds. These assets are attractive to fund investors due to the long-term, recurring nature of the cash flows generated by our Customer Agreements, the high credit scores of our customers, the fact that energy is a non-discretionary good and our low loss rates. In addition, fund investors can receive attractive after-tax returns from our investment funds due to their ability to utilize

Previous wording

Consideration from customers is considered variable due to the performance guarantee under Customer Agreements and liquidated damage provisions under SREC contracts in the event minimum deliveries are not achieved. Customer Agreements with a performance guarantee provide a credit to the customer if the system’s cumulative production, as measured on various PTO anniversary dates, is below our guarantee of a specified minimum. Revenue is recognized to the extent it is probable that a significant reversal of such revenue will not occur. If our estimate of the future production shortfall amount for Customer Agreements with a performance guarantee was 10% higher, the additional reduction to revenue in the six months ended June 30, 2024 would have been less than $3.6 million. Our estimated production shortfall reduced revenue during the six months ended June 30, 2024 by less than $7.9 million more than the prior year’s period. We have historically estimated an immaterial amount of liquidated damages pursuant to SREC contracts, and actual damages have not been materially different from estimates, nor material in amount during the six months ended June 30, 2024 and 2023.

Current wording

Consideration from customers is considered variable due to the performance guarantee under Customer Agreements and liquidated damage provisions under SREC contracts in the event minimum deliveries are not achieved. Customer Agreements with a performance guarantee provide a credit to the customer if the system’s cumulative production, as measured on various PTO anniversary dates, is below our guarantee of a specified minimum. Revenue is recognized to the extent it is probable that a significant reversal of such revenue will not occur. If our estimate of the future production shortfall amount for Customer Agreements with a performance guarantee was 10% higher, the additional reduction to revenue in the nine months ended September 30, 2024 would have been less than $3.7 million. Our estimated production shortfall reduced revenue during the nine months ended September 30, 2024 by $7.2 million more than the prior year’s period. We have historically estimated an immaterial amount of liquidated damages pursuant to SREC contracts, and actual damages have not been materially different from estimates, nor material in amount during the nine months ended September 30, 2024 and 2023.

Previous wording

Should, among other events and circumstances, industry conditions deteriorate, the outlook for future operating results and cash flow decline or regulations change, costs of equity or debt capital increase, valuations for comparable public companies or comparable acquisition valuations decrease, or our market capitalization experience a further sustained decline below its book value, we may need to further reassess the recoverability of goodwill in future periods. As of June 30, 2024, there were no indicators of impairment that would require a goodwill impairment analysis.

Current wording

Should, among other events and circumstances, industry conditions deteriorate, the outlook for future operating results and cash flow decline or regulations change, costs of equity or debt capital increase, valuations for comparable public companies or comparable acquisition valuations decrease, or our market capitalization experience a further sustained decline below its book value, we may need to further reassess the recoverability of goodwill in future periods. As of September 30, 2024, there were no indicators of goodwill impairment that would require an interim goodwill impairment test.

Previous wording

The carrying values of our long-lived assets, including solar energy systems, are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated. Factors that we consider in deciding when to perform an impairment review would include significant negative industry or economic trends, and significant changes or planned changes in our use of the assets. Recoverability of these assets is measured by comparison of the carrying value of each asset group to the future undiscounted cash flows the asset is expected to generate over its remaining life. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. If the useful life is shorter than originally estimated, we amortize the remaining carrying value over the new shorter useful life. During the three and six months ended June 30, 2024 and 2023, there were no indicators of impairment and therefore no cash flow analysis was performed.

Current wording

The carrying values of our long-lived assets, including solar energy systems, are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated. Factors that we consider in deciding when to perform an impairment review would include significant negative industry or economic trends, and significant changes or planned changes in our use of the assets. Recoverability of these assets is measured by comparison of the carrying value of each asset group to the future undiscounted cash flows the asset is expected to generate over its remaining life. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. If the useful life is shorter than originally estimated, we amortize the remaining carrying value over the new shorter useful life. During the three and nine months ended September 30, 2024 and 2023, there were no indicators of impairment and therefore no cash flow analysis was performed.

Previous wording

The calculation of HLBV does not require estimates since each HLBV calculation is based upon the liquidation provisions of each fund’s contractual agreement. The calculation of the redeemable noncontrolling interest balance involves estimates such as a discount rate used in net present value calculations, and customer default rates. If the assumptions used for each of these were 10% higher, the impact to the aggregate redeemable noncontrolling interest balance as of June 30, 2024 would be a reduction of $20.6 million.

Current wording

The calculation of HLBV does not require estimates since each HLBV calculation is based upon the liquidation provisions of each fund’s contractual agreement. The calculation of the redeemable noncontrolling interest balance involves estimates such as a discount rate used in net present value calculations, and customer default rates. If the assumptions used for each of these were 10% higher, the impact to the aggregate redeemable noncontrolling interest balance as of September 30, 2024 would be a reduction of $21.6 million.

Previous wording

Customer Agreements and Incentives. The $83.6 million increase in Revenue from customer agreements was primarily due to new systems placed in service in the period from July 1, 2023 through June 30, 2024, plus a full quarter of revenue recognized in 2024 for systems placed in service in the second quarter of 2023 versus only a partial amount of such revenue related to the period in which the assets were in service in 2023. Revenue from incentives consisted primarily of sales of SRECs. The $2.1 million increase related to the timing and volume of SREC sales which were responsive to market conditions.

Current wording

Customer Agreements and Incentives. The $79.0 million increase in Revenue from Customer Agreements was primarily due to new systems placed in service in the period from October 1, 2023 through September 30, 2024, plus a full quarter of revenue recognized in 2024 for systems placed in service in the third quarter of 2023 versus only a partial amount of such revenue related to the period in which the assets were in service in 2023. Revenue from incentives consisted primarily of sales of SRECs. The $10.4 million increase related to the timing and volume of SREC sales, which were responsive to market conditions.

Previous wording

Solar Energy Systems and Product Sales. Revenue from solar energy systems sales decreased by $311.0 million compared to the prior year primarily due to an increase in the proportion of customers choosing to enter into a Customer Agreement versus purchasing a system outright using a loan, likely due to increased interest rates. Product sales decreased by $49.1 million, primarily due to the lower average sales price of solar energy products, as well as lower sales volume of solar energy products to installers of solar energy systems compared to the prior year, due to easing of supply chain constraints.

Current wording

Solar Energy Systems and Product Sales. Revenue from solar energy systems sales decreased by $88.3 million compared to the prior year primarily due to an increase in the proportion of customers choosing to enter into a Customer Agreement versus purchasing a system outright using a loan for cash or using a third party loan, likely due to increased interest rates. Product sales decreased by $27.1 million, primarily due to the lower average sales price of solar energy products, as well as lower sales volume of solar energy products to installers of solar energy systems compared to the prior year, due to easing of supply chain constraints.

Previous wording

Cost of Customer Agreements and Incentives. The $30.0 million increase in Cost of customer agreements and incentives was primarily due to the new systems placed in service in the period from July 1, 2023 through June 30, 2024, plus a full quarter of costs recognized in the second quarter of 2024 for systems placed in service in the second quarter of 2023 versus only a partial amount of such expenses related to the period in which the assets were in service in 2023.

Current wording

Cost of Customer Agreements and Incentives. The $24.6 million increase in Cost of customer agreements and incentives was primarily due to the new systems placed in service in the period from October 1, 2023 through September 30, 2024, plus a full quarter of costs recognized in the third quarter of 2024 for systems placed in service in the third quarter of 2023 versus only a partial amount of such expenses related to the period in which the assets were in service in 2023.

Previous wording

The Cost of customer agreements and incentives decreased to 77% of revenue from customer agreements and incentives during the three months ended June 30, 2024, from 89% during the three months ended June 30, 2023. This decrease is primarily due to customer pricing increases catching up to costs.

Current wording

The Cost of customer agreements and incentives decreased to 76% of revenue from customer agreements and incentives during the three months ended September 30, 2024, from 90% during the three months ended September 30, 2023. This decrease is primarily due to customer pricing increases catching up to costs.

Previous wording

Cost of Solar Energy Systems and Product Sales. The $140.4 million decrease in Cost of solar energy systems and product sales was primarily due to the corresponding net decrease in the solar energy systems and product sales discussed above.

Current wording

Cost of Solar Energy Systems and Product Sales. The $109.0 million decrease in Cost of solar energy systems and product sales was primarily due to the corresponding net decrease in the solar energy systems and product sales discussed above.

Previous wording

The Cost of solar energy systems and product sales increased to 96% of revenue from solar energy systems and product sales during the three months ended June 30, 2024, from 94% during the three months ended June 30, 2023, primarily as the result of sales price increases lagging cost increases, as well as reduced pricing realized in our distribution business.

Current wording

The Cost of solar energy systems and product sales remained consistent at 95% of revenue from Solar energy systems and product sales during the three months ended September 30, 2024, when compared with the three months ended September 30, 2023.

Previous wording

Sales and Marketing Expense. The $43.2 million decrease in Sales and marketing expense was primarily attributable to decreases in headcount driving lower employee compensation and costs to acquire customers through our sales lead generating partners. Included in Sales and marketing expense is $17.3 million and $13.8 million of amortization of costs to obtain Customer Agreements for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Sales and Marketing Expense. The $13.9 million decrease in Sales and marketing expense was primarily attributable to decreases in headcount driving lower employee compensation and costs to acquire customers through our sales lead generating partners. Included in Sales and marketing expense is $20.9 million and $13.5 million of amortization of costs to obtain Customer Agreements for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

Research and Development Expense. The $5.7 million increase in Research and development expense was primarily attributable to an increase in headcount driving higher employee compensation costs.

Current wording

Research and Development Expense. The $3.1 million increase in Research and development expense was primarily attributable to an increase in headcount driving higher employee compensation costs.

Previous wording

General and Administrative Expense. The $3.8 million increase in General and administrative expenses was primarily attributable to an increase in headcount driving higher employee compensation costs. Additionally, there were increases related to information technology related consulting costs, when compared to the three months ended June 30, 2023.

Current wording

General and Administrative Expense. The $7.3 million increase in General and administrative expenses was primarily attributable to information technology related consulting costs, as well as an increase in stock-based compensation costs.

Previous wording

Interest Expense, net. The increase in Interest expense, net of $50.0 million was primarily related to additional non-recourse debt entered into subsequent to June 30, 2023. Included in net interest expenseis$8.6 million and $7.6 million of non-cash interest recognized under Customer Agreements that have a significant financing component for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Interest Expense, net. The increase in Interest expense, net of $44.3 million was primarily related to additional non-recourse debt entered into subsequent to September 30, 2023. Included in net interest expenseis$8.8 million and $7.9 million of non-cash interest recognized under Customer Agreements that have a significant financing component for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

The decrease in income tax benefit of $27.8 million is primarily attributable to the reduction of losses allocable to the controlling interests, offset by increased benefit from transferring investment tax credits and a reduced expense related to the valuation allowance.

Current wording

The increase in income tax (benefit) expense of $43.6 million is primarily attributable to increased losses allocable to the controlling interest (excluding the goodwill impairment charge in 2023), increased benefit from transferring investment tax credits, and increased expense related to the valuation allowance on federal net operating losses in the current year compared to prior year.

Previous wording

Customer Agreements and Incentives. The $162.6 million increase in Revenue from customer agreements was primarily due to new systems placed in service in the period from July 1, 2023 through June 30, 2024, plus a full six months of revenue recognized in 2024 for systems placed in service in the first six months of 2023 versus only a partial amount of such revenue related to the period in which the assets were in service in 2023. Revenue from incentives consisted primarily of sales of SRECs. The $0.5 million decrease related to the timing and volume of SREC sales which were responsive to market conditions.

Current wording

Customer Agreements and Incentives. The $241.6 million increase in Revenue from Customer Agreements was primarily due to new systems placed in service in the period from October 1, 2023 through September 30, 2024, plus a full nine months of revenue recognized in 2024 for systems placed in service in the first nine months of 2023 versus only a partial amount of such revenue related to the period in which the assets were in service in 2023. Revenue from incentives consisted primarily of sales of SRECs. The $9.9 million increase related to the timing and volume of SREC sales, which were responsive to market conditions.

Previous wording

Solar Energy Systems and Product Sales. Revenue from solar energy systems sales decreased by $147.2 million compared to the prior year primarily due to an increase in the proportion of customers choosing to enter into a Customer Agreement versus purchasing a system outright using a loan, likely due to increased interest rates. Product sales decreased by $4.8 million, primarily due to the lower average sales price of solar energy products, as well as lower sales volume of solar energy products to installers of solar energy systems compared to the prior year, due to easing of supply chain constraints.

Current wording

Solar Energy Systems and Product Sales. Revenue from solar energy systems sales decreased by $399.3 million compared to the prior year primarily due to an increase in the proportion of customers choosing to enter into a Customer Agreement versus purchasing a system outright using a loan, likely due to increased interest rates. Product sales decreased by $76.2 million, primarily due to the lower average sales price of solar energy products, as well as lower sales volume of solar energy products to installers of solar energy systems compared to the prior year, due to easing of supply chain constraints and wind-down of AEE business.

Previous wording

Cost of Customer Agreements and Incentives. The $62.6 million increase in Cost of customer agreements and incentives was primarily due to the new systems placed in service in the period from July 1, 2023 through June 30, 2024, plus a full six months of costs recognized in 2024 for systems placed in service in the six months of 2023 versus only a partial amount of such expenses related to the period in which the assets were in service in 2023.

Current wording

Cost of Customer Agreements and Incentives. The $87.2 million increase in Cost of customer agreements and incentives was primarily due to the new systems placed in service in the period from October 1, 2023 through September 30, 2024, plus a full nine months of costs recognized in 2024 for systems placed in service in the nine months of 2023 versus only a partial amount of such expenses related to the period in which the assets were in service in 2023.

Previous wording

The Cost of customer agreements and incentives decreased to 80% of revenue from customer agreements and incentives during the six months ended June 30, 2024, from 92% during the six months ended June 30, 2023. This decrease is primarily due to customer pricing increases catching up to costs.

Current wording

The Cost of customer agreements and incentives decreased to 79% of revenue from customer agreements and incentives during the nine months ended September 30, 2024, from 91% during the nine months ended September 30, 2023. This decrease is primarily due to customer pricing increases catching up to costs.

Previous wording

Cost of Solar Energy Systems and Product Sales. The $304.3 million decrease in Cost of solar energy systems and product sales was primarily due to the corresponding net decrease in the solar energy systems and product sales discussed above.

Current wording

Cost of Solar Energy Systems and Product Sales. The $413.2 million decrease in Cost of solar energy systems and product sales was primarily due to the corresponding net decrease in the solar energy systems and product sales discussed above.

Previous wording

The Cost of solar energy systems and product sales increased to 106% of revenue from solar energy systems and product sales during the six months ended June 30, 2024, from 94% during the six months ended June 30, 2023, primarily as the result of a $22.1 million increase in inventory reserves related to the wind-down of the AEE Solar operations.

Current wording

The Cost of solar energy systems and product sales increased to 102% of revenue from solar energy systems and product sales during the nine months ended September 30, 2024, from 94% during the nine months ended September 30, 2023, primarily as the result of a $22.1 million increase in inventory reserves recorded in the first quarter of fiscal 2024 related to the wind-down of the AEE Solar operations.

Previous wording

Sales and Marketing Expense. The $93.8 million decrease in Sales and marketing expense was primarily attributable to decreases in headcount driving lower employee compensation and costs to acquire customers through our sales lead generating partners. Included in Sales and marketing expense is $34.3 million and $26.0 million of amortization of costs to obtain Customer Agreements for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Sales and Marketing Expense. The $107.7 million decrease in Sales and marketing expense was primarily attributable to decreases in headcount driving lower employee compensation and costs to acquire customers through our sales lead generating partners. Included in Sales and marketing expense is $55.2 million and $39.5 million of amortization of costs to obtain Customer Agreements for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Research and Development Expense. The $13.2 million increase in Research and development expense was primarily attributable to an increase in headcount driving higher employee compensation costs, as well as an increase in support related consulting costs.

Current wording

Research and Development Expense. The $16.4 million increase in Research and development expense was primarily attributable to an increase in headcount driving higher employee compensation costs, as well as an increase in support related consulting costs.

Previous wording

General and Administrative Expense. The $1.8 million increase in General and administrative expenses was primarily related to an increase in information technology related consulting costs, when compared to the six months ended June 30, 2023.

Current wording

General and Administrative Expense. The $9.1 million increase in General and administrative expenses was primarily related to an increase in information technology related consulting costs, when compared to the nine months ended September 30, 2023.

Previous wording

Interest Expense, net. The increase in Interest expense, net of $99.5 million was primarily related to additional non-recourse debt entered into subsequent to June 30, 2023. Included in net interest expenseis$16.9 million and $15.1 million of non-cash interest recognized under Customer Agreements that have a significant financing component for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Interest Expense, net. The increase in Interest expense, net of $143.8 million was primarily related to additional non-recourse debt entered into subsequent to September 30, 2023. Included in net interest expenseis$25.7 million and $23.0 million of non-cash interest recognized under Customer Agreements that have a significant financing component for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Other Income, net. The increase in other income, net of $23.3 million related primarily to gains on extinguishment of debt, with no such comparable activity in the three months ended June 30, 2023.

Current wording

Other Income, net. The decrease in Other income, net of $22.0 million related primarily to an increase in losses on derivatives during the nine months ended September 30, 2024.

Previous wording

The increase in income tax benefit of $29.6 million is primarily attributable to a benefit from transferring investment tax credits and a reduced expense related to the valuation allowance on federal net operating losses in the current year compared to prior year.

Current wording

The increase in income tax benefit of $15.9 million is primarily attributable to reduced losses allocable to the controlling interest (excluding the goodwill impairment charge in 2023), increased benefit from transferring investment tax credits, and increased expense related to the valuation allowance on federal net operating losses in the current year compared to prior year.

Previous wording

Net loss attributable to noncontrolling interests and redeemable noncontrolling interests was primarily the result of an addition of seven new investment funds since June 30, 2023, for which the HLBV method was used in determining the amount of net loss attributable to noncontrolling interests. Investment funds generally allocate more loss to the noncontrolling interest in the first several years after fund formation.

Current wording

Net loss attributable to noncontrolling interests and redeemable noncontrolling interests was primarily the result of an addition of 7 new investment funds since September 30, 2023, for which the HLBV method was used in determining the amount of net loss attributable to noncontrolling interests. Investment funds generally allocate more loss to the noncontrolling interest in the first several years after fund formation.

Previous wording

As of June 30, 2024, we had cash of $707.6 million, which consisted of cash held in checking and savings accounts with financial institutions. We finance our operations mainly through a variety of financing fund arrangements that we have formed with fund investors, cash generated from our sources of revenue and borrowings from secured credit facilities arrangements with syndicates of banks and from secured, long-term non-recourse loan arrangements. In 2023, we received $1.0 billion of new commitments on secured credit facilities arrangements with syndicates of banks and $0.8 billion of commitments from secured, long-term non-recourse loan arrangements. Our principal uses of cash are funding our business, including the costs of acquisition and installation of solar energy systems, satisfaction of our obligations under our debt instruments and other working capital requirements. As of June 30, 2024, we had outstanding borrowings of $390.9 million on our $447.5 million credit facility maturing in November 2025. In February 2024, we amended one of our subsidiary’s senior secured credit facility to, among other things, increase the total commitments from $1.8 billion to $2.4 billion and extend the maturity date from April 2025 to April 2028. In February 2024, we amended our bank line of credit to, among other things, reduce the total commitments from $600.0 million to $447.5 million, and to extend the maturity date from January 2025 to November 2025. This maturity date can be further extended to March 2027, if we meet certain liquidity tests as of September 30, 2024.

Current wording

As of September 30, 2024, we had cash of $533.9 million, which consisted of cash held in checking and savings accounts with financial institutions. We finance our operations mainly through a variety of financing fund arrangements that we have formed with fund investors, cash generated from our sources of revenue and borrowings from secured credit facilities arrangements with syndicates of banks and from secured, long-term non-recourse loan arrangements. In 2023, we received $1.0 billion of new commitments on secured credit facilities arrangements with syndicates of banks and $0.8 billion of commitments from secured, long-term non-recourse loan arrangements. Our principal uses of cash are funding our business, including the costs of acquisition and installation of solar energy systems, satisfaction of our obligations under our debt instruments and other working capital requirements. As of September 30, 2024, we had outstanding borrowings of $392.5 million on our $447.5 million credit facility maturing in March 2027. In February 2024, we amended one of our subsidiary’s senior secured credit facility to, among other things, increase the total commitments from $1.8 billion to $2.4 billion and extend the maturity date from April 2025 to April 2028. In July 2024, we amended the same senior secured credit facility to increase total commitments from $2.4 billion to $2.6 billion. In February 2024, we amended our bank line of credit to, among other things, reduce the total commitments from $600.0 million to $447.5 million, and to extend the maturity date from January 2025 to November 2025. As of September 30, 2024, this maturity date was automatically extended to March 1, 2027, due to us maintaining funds on deposit in a collateral account equal to an amount sufficient to repay at the scheduled maturity all of our 0% Senior Convertible Notes due 2026 that are outstanding as of September 30, 2024 and being otherwise in compliance with our quarter-end liquidity covenant.

Previous wording

Additionally, we have purchase commitments, which have the ability to be canceled without significant penalties, with multiple suppliers to purchase $196.0 million of photovoltaic modules, inverters and batteries by the end of the first quarter of 2025. In February 2024, we issued $475.0 million of convertible senior notes with a maturity date of March 1, 2030, for net proceeds of approximately $470.1 million. Our business model requires substantial outside financing arrangements to grow the business and facilitate the deployment of additional solar energy systems. The solar energy systems that are operational are expected to generate a positive return rate over the term of the Customer Agreement, typically 20 or 25 years. However, in order to grow, we will continue to be dependent on financing from outside parties. If financing is not available to us on acceptable terms if and when needed, we may be required to reduce planned spending, which could have a material adverse effect on our operations. While there can be no assurances, we anticipate raising additional required capital from new and existing investors. We believe our cash, investment fund commitments and available borrowings as further described below will be sufficient to meet our anticipated cash needs for at least the next 12 months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash balances, and available credit via our credit facilities. The following table summarizes our cash flows for the periods indicated:

Current wording

Additionally, we have purchase commitments, which have the ability to be canceled without significant penalties, with multiple suppliers to purchase $125.4 million of photovoltaic modules, inverters and batteries by the end of the first quarter of 2025. In February 2024, we issued $475.0 million of convertible senior notes with a maturity date of March 1, 2030, for net proceeds of approximately $470.1 million. Our business model requires substantial outside financing arrangements to grow the business and facilitate the deployment of additional solar energy systems. The solar energy systems that are operational are expected to generate a positive return rate over the term of the Customer Agreement, typically 20 or 25 years. However, in order to grow, we will continue to be dependent on financing from outside parties. If financing is not available to us on acceptable terms if and when needed, we may be required to reduce planned spending, which could have a material adverse effect on our operations. While there can be no assurances, we anticipate raising additional required capital from new and existing investors. We believe our cash, investment fund commitments and available borrowings as further described below will be sufficient to meet our anticipated cash needs for at least the next 12 months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash balances, and available credit via our credit facilities. The following table summarizes our cash flows for the periods indicated:

Previous wording

During the six months ended June 30, 2024, we used $351.6 million in net cash from operating activities. The driver of our operating cash outflow consisted of the cost of our revenue, as well as sales, marketing and general and administrative costs. During the six months ended June 30, 2024, our operating cash outflows were $238.3 million from our net loss excluding non-cash and non-operating items. Changes in working capital resulted in a net cash outflow of $113.3 million.

Current wording

During the nine months ended September 30, 2024, we used $507.8 million in net cash from operating activities. The driver of our operating cash outflow consisted of the cost of our revenue, as well as sales, marketing and general and administrative costs. During the nine months ended September 30, 2024, our operating cash outflows were $344.1 million from our net loss excluding non-cash and non-operating items. Changes in working capital resulted in a net cash outflow of $163.7 million.

Previous wording

During the six months ended June 30, 2023, we used $641.5 million in net cash from operating activities. The driver of our operating cash outflow consisted of the cost of our revenue, as well as sales, marketing and general and administrative costs. During the six months ended June 30, 2023, our operating cash outflows were $348.4 million from our net loss excluding non-cash and non-operating items. Changes in working capital resulted in a net cash inflow of $293.1 million.

Current wording

During the nine months ended September 30, 2023, we used $704.7 million in net cash from operating activities. The driver of our operating cash outflow consisted of the cost of our revenue, as well as sales, marketing and general and administrative costs. During the nine months ended September 30, 2023, our operating cash outflows were $481.2 million from our net loss excluding non-cash and non-operating items. Changes in working capital resulted in a net cash inflow of $223.5 million.

Previous wording

During the six months ended June 30, 2024, we used $1.1 billion in cash in investing activities. The majority was used to design, acquire and install solar energy systems and components under our long-term Customer Agreements.

Current wording

During the nine months ended September 30, 2024, we used $1.9 billion in cash in investing activities. The majority was used to design, acquire and install solar energy systems and components under our long-term Customer Agreements.

Previous wording

During the six months ended June 30, 2023, we used $1.2 billion in cash in investing activities. The majority was used to design, acquire and install solar energy systems and components under our long-term Customer Agreements.

Current wording

During the nine months ended September 30, 2023, we used $2.0 billion in cash in investing activities. The majority was used to design, acquire and install solar energy systems and components under our long-term Customer Agreements.

Previous wording

During the six months ended June 30, 2024, we generated $1,550.3 million from financing activities. This was primarily driven by $376.8 million in net proceeds from fund investors, $1,191.0 million in net proceeds from debt and $11.0 million in net proceeds from stock-based awards activity, offset by $19.9 million in acquisition of noncontrolling interests and $13.8 million in repayments under finance lease obligations.

Current wording

During the nine months ended September 30, 2024, we generated $2.4 billion from financing activities. This was primarily driven by $1.6 billion in net proceeds from debt, $816.6 million in net proceeds from fund investors, $12.0 million in net proceeds from stock-based awards activity, and $5.2 million in proceeds from state tax credits, net of recapture, offset by $21.4 million in acquisition of noncontrolling interests and $20.6 million in repayments under finance lease obligations.

Previous wording

During the six months ended June 30, 2023, we generated $1.8 billion from financing activities. This was primarily driven by $640.5 million in net proceeds from fund investors, $1.2 billion in net proceeds from debt, $4.0 million in proceeds from state tax credits, net of recapture and $13.9 million in net proceeds from stock-based awards activity, offset by $14.2 million in acquisition of noncontrolling interests and $10.8 million in repayments under finance lease obligations.

Current wording

During the nine months ended September 30, 2023, we generated $2.7 billion from financing activities. This was primarily driven by $1.8 billion in net proceeds from debt, $945.7 million in net proceeds from fund investors, $14.2 million in net proceeds from stock-based awards activity, and $4.0 million in proceeds from state tax credits, net of recapture, offset by $46.3 million in acquisition of noncontrolling interests and $16.8 million in repayments under finance lease obligations.

Previous wording

As of June 30, 2024, we had committed and available capital of approximately$539.9 million that may only be used to purchase and install solar energy systems. We intend to establish new investment funds in the future, and we may also use debt, equity or other financing strategies to finance our business. For a discussion of the terms and conditions of debt instruments and changes thereof in the period, refer to Note 8, Indebtedness, to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

As of September 30, 2024, we had committed and available capital of approximately$405.2 million that may only be used to purchase and install solar energy systems. We intend to establish new investment funds in the future, and we may also use debt, equity or other financing strategies to finance our business. For a discussion of the terms and conditions of debt instruments and changes thereof in the period, refer to Note 8, Indebtedness, to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.