Sunrun’s stock experienced a significant decline of up to 7.9% in after-hours trading following the release of its quarterly earnings. Despite the solar energy company delivering impressive revenue figures that substantially exceeded projections, weaker-than-anticipated profits prompted investors to retreat from the equity.
Profit Shortfall Overshadows Revenue Achievement
For the third quarter of 2025, the residential solar provider reported earnings per share of $0.07 on a GAAP basis, falling considerably short of market expectations that ranged between $0.13 and $0.15. This disappointing bottom-line performance occurred even as the company posted record revenue of $724.6 million, representing a robust 35% year-over-year increase and soundly beating analyst estimates of $602-608 million.
The quarter did showcase notable improvements in several financial metrics. Sunrun recorded a quarterly profit of $16.6 million, marking a dramatic turnaround from the $83.8 million loss reported during the same period last year. The company also maintained its streak of positive cash flow generation, extending it to six consecutive quarters with $108 million in operational cash flow during the reporting period alone.
Strategic Initiatives Show Promising Traction
Sunrun’s strategic emphasis on energy storage solutions continues to yield positive results. The attachment rate for battery storage systems climbed to 70%, up from 60% in the comparable quarter last year. Installed storage capacity expanded by 23% to reach 412 megawatt hours. Customer growth remained healthy with 30,104 new subscribers joining during the quarter, bringing the total customer base to 971,805 – a 13% year-over-year increase.
Should investors sell immediately? Or is it worth buying Sunrun?
In a separate development, the company strengthened its governance with the immediate appointment of Craig Cornelius, a seasoned renewable energy executive, to its board of directors.
Cautious Outlook Weighs on Investor Sentiment
The company’s forward guidance contributed to the market’s negative reaction. Sunrun projected an aggregated customer value between $1.3 billion and $1.6 billion for the fourth quarter, representing a 5% decrease compared to the previous year. Additionally, the forecasted cash generation of $60-260 million remains heavily dependent on the timing of specific transactions.
While Sunrun’s storage-first strategy demonstrates measurable progress, the conflicting signals within the quarterly report – strong revenue growth coupled with profit shortfalls and cautious guidance – have left market participants questioning whether the company can consistently exceed expectations in the longer term.
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