[Q3 2024 Financial and Operational Highlights](index=1&type=section&id=Sunrun%20Reports%20Third%20Quarter%202024%20Financial%20Results) Sunrun achieved strong Q3 2024 results, marked by significant storage growth, positive cash generation, and surpassing 1 million residential solar customers [Q3 2024 Performance Highlights](index=1&type=section&id=Q3%202024%20Performance%20Highlights) Sunrun reported strong Q3 2024 results, exceeding guidance for Storage Capacity Installed with 92% year-over-year growth, achieving its second consecutive quarter of positive Cash Generation, increasing Net Earning Assets to $6.2 billion, and becoming the first clean energy company to surpass 1 million residential solar customers Q3 2024 Key Performance Indicators (in MWh, MW, or millions) | Metric | Q3 2024 Value | YoY Growth | | :--- | :--- | :--- | | Storage Capacity Installed | 336 Megawatt hours | 92% | | Solar Energy Capacity Installed | 230 Megawatts | - | | Cash Generation | $2.5 million | - | - Became the first clean energy company to surpass **1 million residential solar customers**[1](index=1&type=chunk) - Net Earning Assets increased to **$6.2 billion**, which includes over **$1 billion** in Total Cash[1](index=1&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) The CEO emphasized that the focus on customer experience and differentiated offerings drove record storage attachment rates, solid solar installation growth, and higher Net Subscriber Values, while the CFO highlighted the company's strong balance sheet, debt reduction, and a capital allocation strategy focused on de-leveraging and driving shareholder value - CEO Mary Powell stated the company delivered its **second consecutive quarter of positive Cash Generation** and will remain a disciplined, margin-focused leader[2](index=2&type=chunk) - CFO Danny Abajian noted that Net Subscriber Value was the **highest level ever reported**, reflecting a margin-focused and disciplined growth strategy[2](index=2&type=chunk) - The company has **no near-term corporate debt maturities** after extending its recourse working capital facility to **March 2027** and is allocating excess cash to reduce parent recourse debt[2](index=2&type=chunk) [Business and Operational Updates](index=1&type=section&id=Third%20Quarter%20Updates) Sunrun advanced strategic initiatives in Q3, achieving high storage attachment rates, expanding its new homes division, and launching new virtual power plant programs [Strategic Initiatives and Partnerships](index=1&type=section&id=Strategic%20Initiatives%20and%20Partnerships) In Q3, Sunrun's storage attachment rate on new installations reached 60%, a significant increase from 33% in the prior year, while the company expanded its new homes division, partnering with 9 of the top 10 builders in California and expecting over 50% growth next year, and launched several new virtual power plant (VPP) programs to enhance grid stability and create new revenue streams - Storage attachment rates on installations reached **60%** in Q3, up from **33%** in Q3 2023, with **336 Megawatt hours** installed[3](index=3&type=chunk) - The new homes division is gaining strong traction, working with top builders like Toll Brothers, and is expected to grow at least **50%** next year[3](index=3&type=chunk) - Launched several new virtual power plant (VPP) programs, including the **first vehicle-to-home VPP** in Maryland with BGE and partnerships with Tesla Electric and Vistra in Texas[3](index=3&type=chunk) [Capital Markets and Financing](index=2&type=section&id=Capital%20Markets%20and%20Financing) Sunrun demonstrated strong capital markets execution by closing a $365 million securitization, its fourth in 2024, and expanding its non-recourse warehouse lending facility by $280 million, while also improving its debt profile by extending the maturity of its recourse working capital facility to March 2027 and repurchasing $317 million of its 2026 Convertible Notes to date, reducing parent leverage - Closed a **$365 million** securitization of residential solar and battery systems with a cumulative advance rate above **80%** of Contracted Subscriber Value[4](index=4&type=chunk) - Expanded its non-recourse warehouse lending facility by **$280 million** to **$2.63 billion** in commitments[4](index=4&type=chunk) - Extended the maturity of its recourse Working Capital Facility to **March 2027** and continued to de-lever by repurchasing convertible notes, with **$83 million** of the 2026 notes remaining outstanding[4](index=4&type=chunk) [Key Operating Metrics](index=2&type=section&id=Key%20Operating%20Metrics) Key Q3 2024 operating metrics highlight Sunrun's customer base exceeding 1 million, significant storage capacity growth, and record net subscriber value [Customer and Installation Metrics](index=2&type=section&id=Customer%20and%20Installation%20Metrics) In Q3 2024, Sunrun added 31,910 customers, growing its total customer base by 12% YoY to 1,015,910, and while Solar Energy Capacity Installed decreased by 11% YoY to 229.7 MW, Storage Capacity Installed surged by 92% YoY to 336.3 MWh, reflecting the strategic shift towards storage Q3 2024 Installation & Customer Metrics (in MW or MWh) | Metric | Q3 2024 | YoY Change | | :--- | :--- | :--- | | Customer Additions | 31,910 | - | | Total Customers | 1,015,910 | +12% | | Solar Energy Capacity Installed | 229.7 MW | -11% | | Storage Capacity Installed | 336.3 MWh | +92% | - Total Networked Solar Energy Capacity reached **7,288 Megawatts** and Networked Storage Capacity reached **2.1 Gigawatt hours** as of September 30, 2024[9](index=9&type=chunk)[10](index=10&type=chunk) [Subscriber Value and Earning Assets](index=2&type=section&id=Subscriber%20Value%20and%20Earning%20Assets) Net Subscriber Value reached a record high of $14,632 in Q3 2024, a significant increase from the prior year, generating $444 million in Total Value, while Gross Earning Assets stood at $16.8 billion, with Net Earning Assets at $6.2 billion, and Annual Recurring Revenue from subscribers was approximately $1.5 billion Q3 2024 Subscriber Value Metrics (in dollars or millions) | Metric | Q3 2024 | YoY Change | | :--- | :--- | :--- | | Subscriber Value | $51,223 | +9% | | Creation Cost | $36,591 | +2% | | Net Subscriber Value | $14,632 | - | | Total Value Generated | $444 million | - | Earning Assets and Revenue (as of Sep 30, 2024, in billions) | Metric | Value | | :--- | :--- | | Gross Earning Assets | $16.8 billion | | Net Earning Assets | $6.2 billion | | Annual Recurring Revenue | ~$1.5 billion | [Financial Results (GAAP)](index=3&type=section&id=Third%20Quarter%202024%20GAAP%20Results) Sunrun's Q3 2024 GAAP financial results show decreased total revenue but a significant improvement in net loss, with growth in assets and liabilities [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) For Q3 2024, Sunrun reported total revenue of $537.2 million, a 5% decrease year-over-year, driven by a 47% decline in solar system sales as the business mix shifts towards subscriber agreements, while revenue from customer agreements and incentives grew 28% YoY, and the company recorded a net loss attributable to common stockholders of $83.8 million, or ($0.37) per share, a substantial improvement from a loss of $1.07 billion in Q3 2023, which was impacted by a significant non-cash goodwill impairment Q3 2024 Statement of Operations Summary (in millions, except EPS) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Total Revenue | $537.2 | $563.2 | | - Customer Agreements & Incentives | $405.9 | $316.5 | | - Solar Systems & Product Sales | $131.3 | $246.7 | | Loss from Operations | ($127.8) | ($1,347.5) | | Net Loss Attributable to Common Stockholders | ($83.8) | ($1,069.5) | | Net Loss Per Share (Diluted) | ($0.37) | ($4.92) | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of September 30, 2024, Sunrun's balance sheet showed total assets of $22.1 billion, up from $20.5 billion at year-end 2023, with total liabilities increasing to $15.1 billion from $13.5 billion over the same period, and total cash, including restricted cash, standing at $1.01 billion, with total equity at $6.4 billion Balance Sheet Summary (in billions) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | $22.1 | $20.5 | | Total Liabilities | $15.1 | $13.5 | | Total Equity | $6.4 | $6.2 | | Total Cash (Cash + Restricted Cash) | $1.01 | $0.99 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2024, net cash used in operating activities was $507.8 million, and net cash used in investing activities, primarily for solar energy systems, was $1.91 billion, with these uses funded by $2.44 billion in net cash provided by financing activities, which included proceeds from non-recourse debt and contributions from noncontrolling interests Cash Flow Summary - Nine Months Ended Sep 30, 2024 (in millions) | Activity | Net Cash Flow | | :--- | :--- | | Operating Activities | ($507.8) | | Investing Activities | ($1,908.6) | | Financing Activities | $2,439.2 | [Outlook and Guidance](index=3&type=section&id=Outlook) Sunrun reiterates full-year 2025 cash generation guidance and anticipates continued Q4 growth in storage and solar installations with increased Net Subscriber Value [Q4 2024 and Full-Year 2025 Guidance](index=3&type=section&id=Q4%202024%20and%20Full-Year%202025%20Guidance) Sunrun reiterated its full-year 2025 guidance for Cash Generation of $350 million to $600 million, and for Q4 2024, the company anticipates continued growth in storage installations and a sequential increase in solar installations, with Net Subscriber Value also expected to increase compared to Q3 - Reiterating full-year 2025 Cash Generation guidance of **$350 million to $600 million**[11](index=11&type=chunk) Q4 2024 Guidance (in millions, MWh, or MW) | Metric | Q4 2024 Guidance Range | | :--- | :--- | | Cash Generation | $50M to $125M | | Storage Capacity Installed | 320 to 350 MWh | | Solar Energy Capacity Installed | 240 to 250 MW | - Net Subscriber Value is expected to **increase in Q4** compared to Q3[12](index=12&type=chunk) [Financing and Other Information](index=3&type=section&id=Financing%20Activities) Sunrun secured sufficient financing capacity for future installations and provides detailed definitions for key non-GAAP metrics to aid investor understanding [Financing Capacity](index=3&type=section&id=Financing%20Capacity) As of November 7, 2024, Sunrun has secured sufficient financing capacity for its near-term pipeline, with expected tax equity to fund approximately 272 Megawatts of future subscriber installations and an additional $907 million available in its non-recourse warehouse facility to fund over 318 Megawatts - As of November 7, 2024, the company has secured expected tax equity to fund approximately **272 MW** of future Solar Energy Capacity Installed for Subscribers[15](index=15&type=chunk) - At the end of Q3, Sunrun had **$907 million** available in its non-recourse senior revolving warehouse facility, sufficient to fund over **318 MW** of installations[15](index=15&type=chunk) [Definitions of Key Metrics](index=8&type=section&id=Definitions%20of%20Key%20Metrics) The report provides detailed definitions for its non-GAAP operating metrics, including Subscriber Value, Creation Cost, Gross Earning Assets, and Cash Generation, designed to provide investors with insight into the economic performance and present value of future cash flows from subscribers, which are not fully observable from standard GAAP measures, with key calculation assumptions including a 6% discount rate and a 30-year customer relationship - The report defines key **non-GAAP metrics** like Subscriber Value, Creation Cost, and Gross Earning Assets to help investors evaluate the economic performance and future cash flows of the business[23](index=23&type=chunk) - Core assumptions for calculating these metrics include a **6% discount rate** for future cash flows and a **30-year assumed customer relationship** (initial term plus renewal)[24](index=24&type=chunk)

Core Viewpoint - Sunrun (RUN) shares have increased by 3.2% recently, closing at $16.91, with a mean price target of $22.54 indicating a potential upside of 33.3% [1] Price Targets and Analyst Estimates - The mean estimate consists of 23 short-term price targets with a standard deviation of $6.73, where the lowest estimate is $13 (23.1% decline) and the highest is $38 (124.7% increase) [2] - A low standard deviation suggests a strong agreement among analysts regarding the stock's price movement, which can serve as a starting point for further research [7] Earnings Estimates and Analyst Optimism - Analysts show growing optimism about Sunrun's earnings, as indicated by upward revisions in EPS estimates, which correlate with potential stock price increases [9] - Over the past 30 days, one estimate has increased, leading to a 0.6% rise in the Zacks Consensus Estimate for the current year [10] Zacks Rank and Investment Potential - Sunrun holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, suggesting a strong potential upside [11]

Core Viewpoint - Sunrun Inc. is expected to report its third-quarter 2024 results on November 7, with a consensus estimate indicating a decline in sales and earnings compared to the previous year [1][6]. Group 1: Performance Expectations - The company reported second-quarter earnings of 55 cents per share, surpassing the Zacks Consensus Estimate of a loss of 26 cents [1]. - The Zacks Consensus Estimate for third-quarter sales is $560.6 million, reflecting a 0.5% decline from the same period last year [6]. - The earnings estimate for the third quarter is a loss of 16 cents per share, indicating a deterioration from earnings of 40 cents reported a year ago [6]. Group 2: Factors Influencing Performance - Solid solar energy and storage capacity installations, driven by increasing solar demand and improving storage attachment rates, are expected to positively impact the company's top-line performance [2]. - A growing customer base is likely to contribute favorably to revenues in the upcoming quarter [2]. - However, a higher mix of subscribers leads to less upfront revenue recognition, as revenues are recognized over the life of the Customer Agreement, which may adversely affect third-quarter revenues [3]. Group 3: Market and Policy Impact - Significant changes in California's residential solar policy and pricing framework, which affects over 45% of Sunrun's customer base, may limit the financial attractiveness of its offerings, particularly for solar-only systems [4]. - The new net metering policy adopted in December 2022 and implemented in April 2023 could have resulted in lower solar installations in California, negatively impacting quarterly revenues [4]. Group 4: Cost and Earnings Outlook - Declining solar and storage equipment costs, along with operating leverage from volume growth, are expected to benefit the company's bottom-line performance [5]. - High interest expenses and unimpressive revenue expectations may weigh on earnings [5]. - The company has an Earnings ESP of +12.57%, indicating a potential earnings beat [7].

Core Insights - Sunrun has appointed John Trinta, former CEO of Deloitte Financial Advisory Services, to its Board of Directors and Audit Committee, bringing nearly 40 years of expertise in tax and accounting [1][2] - Trinta's extensive experience includes leadership roles at Deloitte, where he was instrumental in strategic growth initiatives and mergers, enhancing the company's financial advisory and risk practices [2][3] - Sunrun aims to leverage Trinta's financial expertise to strengthen its position in the clean energy sector and continue its margin-focused growth strategy [2][3] Company Overview - Sunrun is the leading provider of clean energy as a subscription service in the U.S., having revolutionized the solar industry since 2007 by removing financial barriers to access renewable energy [4] - The company offers residential solar and storage solutions with no upfront costs, focusing on energy security and predictability for customers [4] - Sunrun also manages energy services that benefit communities and utilities, enhancing overall customer value [4]

Core Insights - Sunrun and Orange and Rockland Utilities have activated New York's largest residential power plant using over 300 solar-plus-storage systems to stabilize the electric grid during peak demand events [1][2] - The project supports New York's transition to clean energy and aims to meet the state's storage and electrification goals [2][3] Company Overview - Sunrun is the leading provider of clean energy as a subscription service, with over 1 million customers and 116,000 installed storage systems, accounting for nearly half of all new home battery installations in the U.S. [4] - The company offers residential solar and storage solutions with no upfront costs, enhancing energy security and predictability for customers [5] Project Details - The program allows Sunrun to synchronize battery discharges to deliver stored solar power during peak usage, providing backup power to participating homes [2][3] - Customers enrolled in the program receive a free or heavily discounted home battery, benefiting from utility bill credits for excess energy supplied to the grid [3][4] Strategic Importance - The initiative is seen as a significant step towards fortifying New York's energy grid and demonstrates the potential of home solar-plus-storage systems as flexible resources during electric system stress [3][4]

Core Viewpoint - Sunrun (RUN) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2] Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5] - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3] Sunrun's Earnings Outlook - The recent upgrade for Sunrun indicates an improvement in the company's underlying business, which is expected to positively influence its stock price [4] - Sunrun is projected to earn -$0.17 per share for the fiscal year ending December 2024, reflecting a year-over-year change of 97.6% [7] - Over the past three months, the Zacks Consensus Estimate for Sunrun has increased by 86.7% [7] Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6] - The upgrade of Sunrun to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9]

Company Performance - Sunrun's stock closed at $16.84, reflecting a -1% change from the previous day, which is less than the S&P 500's daily loss of 0.17% [1] - Over the past month, Sunrun's shares have decreased by 13.35%, underperforming compared to the Oils-Energy sector's gain of 0.85% and the S&P 500's gain of 1.25% [1] Earnings Expectations - The upcoming earnings report for Sunrun is anticipated to show an EPS of -$0.13, representing a decline of 132.5% from the same quarter last year [2] - Revenue is expected to be $561.33 million, indicating a slight decrease of 0.33% compared to the previous year [2] Annual Estimates - For the annual period, the Zacks Consensus Estimates project an EPS of -$0.16 and revenue of $2.14 billion, reflecting increases of 97.76% and a decrease of 5.41% respectively from the last year [3] - Recent changes in analyst estimates suggest a correlation with the company's near-term business trends, indicating analysts' confidence in Sunrun's performance [3] Zacks Rank and Industry Performance - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has shown that 1 stocks have delivered an average annual return of +25% since 1988 [5] - Sunrun currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate increasing by 55.98% over the last 30 days [5] - The Solar industry, part of the Oils-Energy sector, has a Zacks Industry Rank of 167, placing it in the bottom 34% of over 250 industries [5]

Group 1 - Sunrun Inc (RUN) shares fell 3.66% to $16.86, down from a previous close of $17.50, marking a 24.26% decline from its 52-week high of $22.26 and a 99.99% increase from its 52-week low of $8.43 [1] - The trading volume for Sunrun Inc was 2,382,415 shares, which is 27.9% of the average daily volume of 8,526,774 [1] Group 2 - The average one-year price target for Sunrun Inc, based on estimates from 24 analysts, is $22.24, indicating a potential upside of 31.91% from the current price of $16.86 [2] - The consensus recommendation from 28 brokerage firms gives Sunrun Inc an average rating of 2.3, suggesting an "Outperform" status on a scale where 1 is Strong Buy and 5 is Sell [2] - GuruFocus estimates the GF Value for Sunrun Inc at $21.32, implying a potential upside of 26.45% from the current price of $16.86 [2]

Core Insights - Toll Brothers, Inc. has formed a national partnership with Sunrun Inc. to provide solar power and storage solutions for its homes, starting with an exclusive agreement in California [1][3] - The partnership allows Sunrun to offer solar power as a standard feature in all Toll Brothers communities in California, with options for battery storage systems [2][3] - This collaboration aims to enhance Toll Brothers' commitment to sustainability and innovation in homebuilding, expanding solar offerings to additional markets nationwide [3][4] Company Overview - Toll Brothers, Inc. is recognized as the leading builder of luxury homes in the United States, founded in 1967 and publicly traded since 1986 [5][6] - The company operates in over 60 markets across 24 states, providing a range of housing options for various buyer segments [5][6] - Toll Brothers has been consistently recognized for its excellence, being named to Fortune's World's Most Admired Companies list for ten consecutive years [7]

Core Insights - Sunrun's CEO Mary Powell has been recognized by Forbes as one of the inaugural Sustainability Leaders, highlighting her role in driving a sustainable future through innovation and impact [1][6] - Under Powell's leadership, Sunrun has become the first solar-plus-storage company in the U.S. to exceed 1 million customers, achieving significant growth in both customer base and product offerings [2][4] Company Performance - Sunrun has added over 400,000 customers in the last three years, surpassing the 1 million customer milestone [4] - The company installs approximately 1 gigawatt of distributed home solar annually and has increased battery storage installations by 400%, from 23,000 to over 116,000 [4] Leadership and Recognition - Mary Powell's leadership has been acknowledged with multiple accolades, including Utility Dive's 2019 Executive of the Year and a position on Fast Company's list of the 100 Most Creative People [5] - Powell emphasizes the importance of a customer-led clean energy revolution to improve lives and stabilize the grid [3] Industry Context - Forbes' Sustainability Leaders list coincides with the third annual Sustainability Leaders Summit, recognizing leaders who are addressing climate change through scalable solutions and technology [6] - Sunrun's innovative approach to clean energy aims to democratize access to renewable energy and enhance energy security for customers [7]