Residential solar energy company Sunrun (NASDAQ: RUN) reported revenue ahead of Wall Street’s expectations in Q2 CY2026, with sales up 52.8% year on year to $870 million. Its GAAP profit of $0.42 per share was significantly above analysts’ consensus estimates.

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“The need for affordable, reliable power has never been more evident, and our storage-first offering is meeting it — customers attached batteries at the highest rate in our history this quarter. We are positioning the business for strong growth, bringing on some of the best talent in the industry and scaling deliberately, with a focus on customer experience and asset quality. And as that engine scales, we're aiming to unlock new ways to monetize the network we've already built, from distributed power plant programs to emerging data center and grid edge applications, creating new streams of Cash Generation,” 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

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, Sunrun’s 22.4% annualized revenue growth over the last five years was incredible. Its growth beat the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Sunrun’s annualized revenue growth of 29.8% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

We can better understand the company’s revenue dynamics by analyzing its number of customers, which reached 1.21 million in the latest quarter. Over the last two years, Sunrun’s customer base averaged 658% 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 52.8%, and its $870 million of revenue beat Wall Street’s estimates by 19.2%.

Looking ahead, sell-side analysts expect revenue to decline by 10.4% over the next 12 months, a deceleration versus the last two years. This projection doesn’t excite us and implies its products and services will face some demand challenges.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

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 56.6% 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 37.6 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.

In Q2, Sunrun generated an operating margin profit margin of 4%, up 23.7 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

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

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 Q2, Sunrun reported EPS of $0.42, down from $1.07 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Sunrun’s full-year EPS to shrink by 77.9% from $1.48 to $0.33.

Key Takeaways from Sunrun’s Q2 Results

It was good to see Sunrun beat analysts’ EPS expectations this quarter. We were also excited its revenue 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 market seemed to be hoping for more, and the stock traded down 12% to $9.24 immediately following the results.

Is Sunrun an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).