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What: Shares of residential solar installer Vivint Solar Inc (NYSE:VSLR) jumped as much as 16% in trading Tuesday after reporting second-quarter earnings. At 10:30 a.m. EDT, shares were up 13.8%.

So what: Revenue was up 97% from a year ago to $30.1 million, and net income was $12.4 million, or $0.11 per share. On an adjusted basis, which pulls out one-time gains, the loss was $0.49 per share, which beat the $0.58 loss analysts expected.  

More importantly, bookings were 74 MW in the quarter, flat with a year ago, and cost per watt declined $0.06 from a year ago to $2.94. That's after a sharp increase in costs to $3.34 per watt in Q1, so costs are trending in the right direction.  

Now what: After Vivint Solar's disastrous sale to SunEdison fell apart earlier this year, it was worried the company would be left in such a weak position that it couldn't survive. But that's not the case, as indicated by solid bookings and a rolling cost structure. The company's work transforming the business isn't done: For a full recovery, I think Vivint Solar needs to make a transition to more loan sales and continue to expand product offerings in energy storage and management. Watch for those changes in coming quarters as management tries to navigate the highly competitive residential solar market in 2016.