RUN Q3 Deep Dive: Storage-Driven Growth and Profitability Offset by Margin Pressures

Core Insights - Sunrun reported Q3 CY2025 revenue of $724.6 million, a 34.9% year-on-year increase, exceeding analyst estimates of $592 million by 22.4% [1][6] - The company's GAAP earnings per share (EPS) were $0.06, which was 58.2% below the expected $0.14 [1][6] - Adjusted EBITDA reached $185.2 million, significantly surpassing analyst expectations of $74.77 million, resulting in a 25.6% margin [6] Financial Performance - Revenue: $724.6 million, up 34.9% year-on-year, beating estimates by 22.4% [6] - GAAP EPS: $0.06, missing expectations by 58.2% [6] - Adjusted EBITDA: $185.2 million, significantly above estimates, with a margin of 25.6% [6] - Operating Margin: Improved to 0.5% from -23.8% in the same quarter last year [6] - Annual Recurring Revenue: $1.86 billion, up 22.3% year-on-year, beating estimates by 3.3% [6] - Customer Base: Increased to 1.14 million from 1.11 million in the previous quarter [6] - Market Capitalization: $4.71 billion [6] Strategic Focus - Sunrun's management emphasized the importance of cost efficiencies and increased storage adoption as key growth drivers [3] - The company aims to expand recurring cash flows from grid services and leverage its distributed battery fleet for utility-scale resources [4] - Management highlighted a focus on balancing margins with growth, particularly in the context of changing policy and supply chain dynamics [4] - A new asset monetization strategy and disciplined customer acquisition were noted as significant contributors to revenue growth and margin improvement [5]