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Q4 2013 Operating Metrics Conference Call
February 24, 2014, 5:00 p.m. ET
Aaron Chew - Vice President of Investor Relations
Lyndon Rive - Chief Executive Officer
Peter Rive - Chief Operations Officer, Chief Technology Officer
Bob Kelly - Chief Financial Officer
Phillip Shen - Roth Capital
Brian Lee - Goldman Sachs
Krish Sankar - Bank of America Merrill Lynch
Vishal Shah - Deutsche Bank
Edwin Mok - Needham & Company
Patrick Jobin - Credit Suisse
Paul Coster - JPMorgan
Pavel Molchanov - Raymond James
Tyler Frank - Robert Baird
Previous Statements by SCTY
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Thank you, and good afternoon to all of you joining us today for SolarCity's fourth quarter operating metrics conference call. Leading the presentation today will be a discussion from our two founders, Chief Executive Officer Lyndon Rive as well as our Chief Operating Officer Peter Rive, as well as our Chief Financial Officer, Bob Kelly, after which point in time we will open up the call to questions.
As a reminder, today's discussion will contain forward-looking statements that involve risks and uncertainties including forecasts regarding SolarCity's 2014 financial and operational results. Words such as believe, may, estimate, continue, anticipate, intend, expect, predict, potential, and similar expressions as they relate to SolarCity, its business, and its management are intended to identify forward-looking statements.
Forward-looking statements should not be considered a guarantee of future performance or results and will not necessarily be accurate indications of the time at or by which such performance or results will be achieved, if at all.
Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed and/or suggested by the forward looking statements, including risks identified in SolarCity's earnings press release issued today and the slides accompanying this presentation, as well as additional risks and uncertainties identified in the section entitled Risk Factors in our quarterly report on form 10-Q, which will be filed with the Securities and Exchange Commission.
We do not undertake any obligation to publicly update or revise any forward looking statement, whether as a result of new information, future developments, or otherwise. In addition, during the course of this call, we will use a number of specially defined terms relating to our business metrics and financial results. We refer to definitions of these terms included in the slides accompanying this presentation, which are available on our Investor Relations website at investors.solarcity.com.
And with that finally behind us, I will introduce SolarCity's Chief Executive Officer, Mr. Lyndon Rive.
Thanks, Aaron. Before we get into 2013 end of year results, I want to apologize for not having GAAP financials ready for this call. The acquisition of the two companies that we acquired, the accounting of that has taken longer than we expected. We have not completed the overhead allocation. We’ll get this all done this week. We’ve worked really hard the last few weeks trying to get it all ready.
I apologize for that. But we’ll be releasing the numbers on Monday, instead of releasing them today. That may change. Just thought it would be best to give you the final numbers on Monday. We’ll also have another owner’s call on Monday as well.
So let’s get into 2013. 2013 was an amazing year. I’m extremely proud of the SolarCity team. We have built a platform infrastructure that can deploy large-scale distributed solar. We had four major goals.
The first goal was to install 250 megawatts, which we increased to 278. The second goal was to reduce our fully loaded cost of installation. The third goal was to reduce our cost of capital, and then the fourth goal was to be cash flow positive for Q4.
I’m glad to say that we’ve met and exceeded every single one of those goals. For reducing our costs, we actually came close to 30%. This is through operational efficiency, economies of scale, process improvements, and also the acquisition of Zep.
For reducing our cost of capital, we not only reduced our cost of capital through securitization, but also increased our capital resources. I’m looking forward to coming out with our first offering with Common Assets, and that should be out in the next few months.
Now, for the first time in the company’s history, we don’t have a residential operational constraint. We’ve always had a long waiting list of customers, and now today a customer can get site ordered within five to eight days, and our systems will get installed within two to three months.
Now, this is a major achievement, and now we can invest into sales and marketing and grow the sales team and grow the bookings. It will take about three months to get the sales team up and running. It takes about two months to get the sales team fully productive. We started making these investments in Q4, and we really started seeing the results in January. January is our record residential bookings, so definitely starting to see the results.
With that, I’ll hand it over to Peter Rive.
I’m Peter Rive, chief operations officer and chief technology officer. Deployment volume for Q4 was a record 103 megawatts. This was made up of 70 megawatts, which was residential deployment, which was up 130% year on year compared to the prior quarter. And commercial deployments of 33 megawatts was 116% from the prior quarter.