Residential solar energy company Sunrun (NASDAQ: RUN) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 124% year on year to $1.16 billion. Its GAAP profit of $0.38 per share was significantly above analysts’ consensus estimates.

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“Sunrun is delivering innovative, storage-first energy offerings that protect American families from rising utility costs and an increasingly unreliable power grid. As we continue to scale our network of over one million customers, we are building a distributed power plant that we believe is critical in meeting the nation’s urgent demand for more power. We are executing on this vital mission from a position of financial strength – generating strong margins and structurally generating cash,” said Mary Powell, Sunrun’s Chief Executive Officer.

Company Overview

Helping homeowners use solar energy to power their homes, Sunrun (NASDAQ: RUN) provides residential solar electricity, specializing in panel installation and leasing services.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Sunrun’s 26.2% annualized revenue growth over the last five years was incredible. Its growth beat the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Sunrun’s annualized revenue growth of 14.4% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

Sunrun also reports its number of customers, which reached 1.17 million in the latest quarter. Over the last two years, Sunrun’s customer base averaged 979% year-on-year growth. Because this number is better than its revenue growth, we can see the average customer spent less money each year on the company’s products and services.

This quarter, Sunrun reported magnificent year-on-year revenue growth of 124%, and its $1.16 billion of revenue beat Wall Street’s estimates by 92.3%.

Looking ahead, sell-side analysts expect revenue to decline by 13% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will see some demand headwinds.

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Operating Margin

Although Sunrun was profitable this quarter from an operational perspective, it’s generally struggled over a longer time period. Its expensive cost structure has contributed to an average operating margin of negative 63.7% over the last five years. Unprofitable industrials companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

On the plus side, Sunrun’s operating margin rose by 37.1 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to show consistent profitability.

This quarter, Sunrun generated an operating margin profit margin of 8.4%, up 636.4 percentage points year on year. The increase was solid, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sunrun’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Sunrun, its two-year annual EPS growth of 49.4% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q4, Sunrun reported EPS of $0.38, up from negative $12.51 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Sunrun to perform poorly. Analysts forecast its full-year EPS of $1.70 will invert to negative negative $0.12.

Key Takeaways from Sunrun’s Q4 Results

It was good to see Sunrun beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a good print with some key areas of upside. The stock remained flat at $20.17 immediately after reporting.

Big picture, is Sunrun a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).