Sunrun Inc.

Previous wording

We have experienced substantial growth in our business and operations since our inception in 2007, as well as through our acquisition of Vivint Solar on October 8, 2020. As of June 30, 2026, we operated the largest fleet of residential energy systems in the United States. We have a Networked Solar Energy Capacity of 8,732 megawatts (“MW”) as of June 30, 2026, which represents the aggregate MW production capacity of our energy systems that have been recognized as deployments, from our inception through the measurement date. Gross Earning Assets as of June 30, 2026 were approximately $22.2 billion. Please see the section entitled “Key Operating Metrics” for more details on how we calculate Networked Solar Energy Capacity and Gross Earning Assets.

Current wording

We have experienced substantial growth in our business and operations since our inception in 2007, as well as through our acquisition of Vivint Solar on October 8, 2020. As of September 30, 2026, we operated the largest fleet of residential energy systems in the United States. We have a Networked Solar Energy Capacity of 8,936 megawatts (“MW”) as of September 30, 2026, which represents the aggregate MW production capacity of our energy systems that have been recognized as deployments, from our inception through the measurement date. Gross Earning Assets as of September 30, 2026 were approximately $22.4 billion. Please see the section entitled “Key Operating Metrics” for more details on how we calculate Networked Solar Energy Capacity and Gross Earning Assets.

Previous wording

During the twelve months ended December 31, 2025 and the six months ended June 30, 2026, we observed market uncertainty, including as a result of ongoing announcements and developments related to tariffs, trade policy, war and global conflict, inflationary pressures, elevated interest rates, the market impacts of proposed or newly enacted regulatory frameworks in markets within which we do business and within our industry and supply constraints. In particular, elevated interest rates, have resulted and may continue to result in a decrease in our advance rates, reducing the proceeds we receive from certain Funds. Because our financing structure is sensitive to volatility in interest rates, higher rates increase our cost of capital and may decrease the amount of capital available to us to finance the deployment of new energy systems. These market dynamics, some of which we expect will continue into the foreseeable future, despite the December 2025 reduction in federal interest rates, have impacted and may continue to impact our business and financial results.

Current wording

During the twelve months ended December 31, 2025 and the nine months ended September 30, 2026, we observed market uncertainty, including as a result of ongoing announcements and developments related to tariffs, trade policy, war and global conflict, inflationary pressures, elevated interest rates, the market impacts of proposed or newly enacted regulatory frameworks in markets within which we do business and within our industry and supply constraints. In particular, elevated interest rates have resulted and may continue to result in a decrease in our advance rates, reducing the proceeds we receive from certain Funds. Because our financing structure is sensitive to volatility in interest rates, higher rates increase our cost of capital and may decrease the amount of capital available to us to finance the deployment of new energy systems. These market dynamics, including the recent increases in long-term interest rates, and others of which we expect will continue into the foreseeable future, have impacted and may continue to impact our business and financial results.

Previous wording

At the federal level, tax policy and associated regulations have a direct impact on our business. The most notable tax legislation affecting our business is the OBBB that President Trump signed into law on July 4, 2025. The new law adjusts tax policies that Sunrun relies upon, including the 48E Clean Electricity Investment Credit and its associated “bonus” credits. While the law maintains the full 48E credit for energy storage through 2033, it shortens the availability of the 48E credit for solar facilities to the end of 2027. The law also applies new PFE restrictions to the 48E credit, which could potentially deny tax credits to entities owned, controlled, or influenced by certain specified foreign entities, and for projects that use certain components or receive “material assistance” from a PFE, thereby potentially increasing costs, reducing demand, or restricting access to tax credits. Further, the law ended the Section 25D Residential Clean Energy Credit starting on January 1, 2026. Changes in the law relating to the Section 45X Advanced Manufacturing Production Credit could also affect Sunrun indirectly, through our suppliers. The implementation of the OBBB through the federal regulatory process could also directly affect our business, including from uncertainty prior to the issuance of guidance or formal rulemaking processes, which may result in delays for monetizing tax credits. For further information regarding possible impacts of the OBBB on our business, see Part II, Item 1A. Risk Factors—"Risks Related to Regulation and Policy—Federal tax policy impacts the competitiveness of our service offerings to customers and our market” and “Risks Related to Taxes and Accounting—Our ability to provide our storage and solar service offerings to customers on an economically viable basis depends in part on our ability to finance these systems with fund investors who seek particular tax and other benefits” and “—Our business depends in part on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives on the federal, state, and/or local levels. We may be adversely affected by changes in, and application of, these laws or other incentives to us, and the expiration, elimination or reduction of these benefits could adversely impact our business.”

Current wording

At the federal level, tax policy and associated regulations have a direct impact on our business. The most notable tax legislation affecting our business is H.R. 1, now Public Law 119-21, which is commonly known as the One Big Beautiful Bill ("OBBB"). President Trump signed it into law on July 4, 2025. This law adjusts tax policies that Sunrun relies upon, including the 48E Clean Electricity Investment Credit and its associated “bonus” credits. While the law maintains the full 48E credit for energy storage through 2033, it shortens the availability of the 48E credit for solar facilities to the end of 2027. The law also applies new Prohibited Foreign Entity ("PFE") restrictions to the 48E credit, which could potentially deny tax credits to entities owned, controlled, or influenced by certain specified foreign entities, and for projects that use certain components or receive “material assistance” from a PFE, thereby potentially increasing costs, reducing demand, or restricting access to tax credits. Further, the law ended the Section 25D Residential Clean Energy Credit starting on January 1, 2026. Changes in the law relating to the Section 45X Advanced Manufacturing Production Credit could also affect Sunrun indirectly, through our suppliers. The implementation of the OBBB through the federal regulatory process could also directly affect our business, including from uncertainty prior to the issuance of guidance or formal rulemaking processes, which may result in delays for monetizing tax credits. For further information regarding possible impacts of the OBBB on our business, see Part II, Item 1A. Risk Factors—"Risks Related to Regulation and Policy—Federal tax policy impacts the competitiveness of our service offerings to customers and our market” and “Risks Related to Taxes and Accounting—Our ability to provide our storage and solar service offerings to customers on an economically viable basis depends in part on our ability to finance these systems with fund investors who seek particular tax and other benefits” and “—Our business depends in part on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives on the federal, state, and/or local levels. We may be adversely affected by changes in, and application of, these laws or other incentives to us, and the expiration, elimination or reduction of these benefits could adversely impact our business.”

Previous wording

The United States is currently experiencing a transformation of our energy system due to a dramatic increase in demand for electricity from data centers, artificial intelligence, and manufacturing, as well as the opportunities of electrification of the American economy with clean energy. We anticipated this critical need for more dispatchable electrons on the grid and have been assisting grid operators with on-demand, home-to-grid energy to help meet demand. Meeting America’s energy needs to power the economy requires adding more dispatchable capacity to the grid.

Current wording

The United States is currently experiencing a transformation of our energy system due to a dramatic increase in demand for electricity from data centers, artificial intelligence, manufacturing and electrification. We anticipated this critical need for more dispatchable electrons on the grid and have been assisting grid operators with on-demand, home-to-grid energy to help meet demand. Meeting America’s energy needs to power the economy requires adding more dispatchable capacity to the grid.

Previous wording

To further expand such future upsell and retrofit opportunities, from time to time, we may pursue acquisitions of previously installed solar systems. While we do not expect such acquisitions to represent a significant portion of our growth on an annual basis, we plan to pursue such transactions opportunistically. For instance, in the third quarter of fiscal 2021, we completed a strategic transaction that added approximately 2,000 Customers and 13 MW of Networked Solar Energy Capacity.

Current wording

To further expand such future upsell and retrofit opportunities, from time to time, we have pursued and may pursue acquisitions of previously installed solar systems. While we do not expect such acquisitions to represent a significant portion of our growth on an annual basis, we plan to pursue such transactions opportunistically.

Previous wording

The federal policy landscape in 2025-2026 has created a dynamic environment that may impact our business and financial results, including via changes to federal tax credits, tariffs, and other regulatory measures. The recent changes to Investment Tax Credits ("ITCs") under the OBBB, or Executive Orders issued by the President of the United States, as well as any other elimination, reduction or delay in policies that support the residential storage and solar industry, could have an adverse effect on our business. For further information regarding certain of the impacts of the OBBB on our business, see Part II, Item 1A. Risk Factors—"Risks Related to Regulation and Policy—Federal tax policy impacts the competitiveness of our service offerings to customers and our market” and “Risks Related to Taxes and Accounting—Our ability to provide our storage and solar service offerings to customers on an economically viable basis depends in part on our ability to finance these systems with fund investors who seek particular tax and other benefits” and “—Our business depends in part on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives on the federal, state, and/or local levels. We may be adversely affected by changes in, and application of, these laws or other incentives to us, and the expiration, elimination or reduction of these benefits could adversely impact our business.” Additionally, these and other regulatory policies set forth in the United States’ government could contribute to a higher interest rate environment, which may further negatively impact our operations and financing costs. While it is difficult to predict specific outcomes at this time, we expect a period of regulatory and policy uncertainty and change in the near term. However, we believe our diversified business model and flexible operational framework position us to adapt to potential adverse changes in the regulatory landscape and to continue building on the robust bipartisan support for residential solar policy.

Current wording

The federal policy landscape in 2025-2026 has created a dynamic environment that may impact our business and financial results, including via changes to federal tax credits, tariffs, and other regulatory measures. The recent changes to Investment Tax Credits ("ITCs") under the OBBB, or Executive Orders issued by the President of the United States, as well as any other elimination, reduction or delay in policies that support the residential storage and solar industry, could have an adverse effect on our business. For further information regarding certain impacts of the OBBB on our business, see Part II, Item 1A. Risk Factors—"Risks Related to Regulation and Policy—Federal tax policy impacts the competitiveness of our service offerings to customers and our market” and “Risks Related to Taxes and Accounting—Our ability to provide our storage and solar service offerings to customers on an economically viable basis depends in part on our ability to finance these systems with fund investors who seek particular tax and other benefits” and “—Our business depends in part on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives on the federal, state, and/or local levels. We may be adversely affected by changes in, and application of, these laws or other incentives to us, and the expiration, elimination or reduction of these benefits could adversely impact our business.” Additionally, these and other federal regulatory policies could contribute to a higher interest rate environment, which may further negatively impact our operations and financing costs. While it is difficult to predict specific outcomes at this time, we expect a period of regulatory and policy uncertainty and change in the near term. However, we believe our diversified business model and flexible operational framework position us to adapt to potential adverse changes in the regulatory landscape and to continue building on the robust bipartisan support for residential solar policy.

Previous wording

Consideration from customers is considered variable due to the performance guarantee under Customer Agreements and liquidated damage provisions under SREC contracts in the event minimum deliveries are not achieved. Customer Agreements with a performance guarantee provide a credit to the customer if the system’s cumulative production, as measured on various PTO anniversary dates, is below our guarantee of a specified minimum. Revenue is recognized to the extent it is probable that a significant reversal of such revenue will not occur. If our estimate of the future production shortfall amount for Customer Agreements with a performance guarantee was 10% higher, the additional reduction to revenue in the six months ended June 30, 2026 would have been less than $5.4 million. Our estimated production shortfall reduced revenue during the six months ended June 30, 2026 by approximately $3.6 million more than the prior year’s period. We have historically estimated an immaterial amount of liquidated damages pursuant to SREC contracts, and actual damages have not been materially different from estimates, nor material in amount during the six months ended June 30, 2026 and 2025.

Current wording

Consideration from customers is considered variable due to the performance guarantee under Customer Agreements and liquidated damage provisions under SREC contracts in the event minimum deliveries are not achieved. Customer Agreements with a performance guarantee provide a credit to the customer if the system’s cumulative production, as measured on various PTO anniversary dates, is below our guarantee of a specified minimum. Revenue is recognized to the extent it is probable that a significant reversal of such revenue will not occur. If our estimate of the future production shortfall amount for Customer Agreements with a performance guarantee was 10% higher, the additional reduction to revenue in the nine months ended September 30, 2026 would have been less than $5.9 million. Our estimated production shortfall reduced revenue during the nine months ended September 30, 2026 by approximately $5.9 million more than the prior year’s period. We have historically estimated an immaterial amount of liquidated damages pursuant to SREC contracts, and actual damages have not been materially different from estimates, nor material in amount during the nine months ended September 30, 2026 and 2025.

Previous wording

The carrying values of our long-lived assets, including energy systems, are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated. Factors that we consider in deciding when to perform an impairment review would include significant negative industry or economic trends, and significant changes or planned changes in our use of the assets. Recoverability of these assets is measured by comparison of the carrying value of each asset group to the future undiscounted cash flows the asset is expected to generate over its remaining life. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. If the useful life is shorter than originally estimated, we amortize the remaining carrying value over the new shorter useful life. During the three and six months ended June 30, 2026 and 2025, there were no indicators of impairment and therefore no cash flow analysis was performed.

Current wording

The carrying values of our long-lived assets, including energy systems, are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated. Factors that we consider in deciding when to perform an impairment review would include significant negative industry or economic trends, and significant changes or planned changes in our use of the assets. Recoverability of these assets is measured by comparison of the carrying value of each asset group to the future undiscounted cash flows the asset is expected to generate over its remaining life. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. If the useful life is shorter than originally estimated, we amortize the remaining carrying value over the new shorter useful life. During the three and nine months ended September 30, 2026 and 2025, there were no indicators of impairment and therefore no cash flow analysis was performed.

Previous wording

The calculation of HLBV does not require estimates since each HLBV calculation is based upon the liquidation provisions of each fund’s contractual agreement. The calculation of the redeemable noncontrolling interest balance involves estimates such as a discount rate used in net present value calculations, and customer default rates. If the assumptions used for each of these were 10% higher, the impact to the aggregate redeemable noncontrolling interest balance as of June 30, 2026 would be a reduction of $22.8 million.

Current wording

The calculation of HLBV does not require estimates since each HLBV calculation is based upon the liquidation provisions of each fund’s contractual agreement. The calculation of the redeemable noncontrolling interest balance involves estimates such as a discount rate used in net present value calculations, and customer default rates. If the assumptions used for each of these were 10% higher, the impact to the aggregate redeemable noncontrolling interest balance as of September 30, 2026 would be a reduction of $23.8 million.

Previous wording

Customer Agreements and Incentives. The $73.5 million increase in revenue from Customer Agreements was primarily due to new systems placed in service in the period from July 1, 2025 through June 30, 2026, plus a full quarter of revenue recognized in 2026 for systems placed in service in the second quarter of 2025 versus only a partial amount of such revenue related to the period in which the assets were in service in 2025. Revenue from incentives consisted primarily of sales of SRECs. The $12.2 million increase in revenue from incentives related to the timing and volume of SREC sales which were responsive to market conditions.

Current wording

Customer Agreements and Incentives. The $59.6 million increase in revenue from Customer Agreements was primarily due to new systems placed in service in the period from October 1, 2025 through September 30, 2026, plus a full quarter of revenue recognized in 2026 for systems placed in service in the third quarter of 2025 versus only a partial amount of such revenue related to the period in which the assets were in service in 2025. Revenue from incentives consisted primarily of sales of SRECs. The $2.3 million increase in revenue from incentives related to the timing and volume of SREC sales which were responsive to market conditions.

Previous wording

Energy Systems and Product Sales. Revenue from energy systems sales increased by $253.1 million compared to the prior year primarily due to a transaction that Sunrun entered into in the third quarter of 2025, as well as the non-controlled joint venture Sunrun entered in fiscal 2026, whereby certain storage and energy systems subject to newly originated Customer Agreements are sold to a third-party investor or the joint venture; however, Sunrun continues to maintain the customer experience and servicing relationships and can sell future goods and services to these customers. Revenue from product sales decreased by $38.2 million, primarily due to the lower average sales price of energy products, as well as lower sales volume of energy products to installers of energy systems compared to the prior year, due to easing of supply chain constraints.

Current wording

Energy Systems and Product Sales. Revenue from energy systems sales increased by $348.8 million compared to the prior year. This increase was primarily due to a transaction that Sunrun entered into in the third quarter of 2025, with sales still ramping up in the prior year's period, as well as the non-controlled joint venture Sunrun entered in fiscal 2026, whereby certain storage and energy systems subject to newly originated Customer Agreements are sold to a third-party investor or the joint venture; however, Sunrun continues to maintain the customer experience and servicing relationships and can sell future goods and services to these customers. Revenue from product sales decreased by $35.8 million, primarily due to the lower average sales price of energy products, as well as lower sales volume of energy products to installers of energy systems compared to the prior year, due to easing of supply chain constraints.

Previous wording

Cost of Customer Agreements and Incentives. The $3.2 million increase in Cost of Customer Agreements and Incentives was primarily due to the new systems placed in service in the period from July 1, 2025 through June 30, 2026, plus a full six months of costs recognized in 2026 for systems placed in service in the six months of 2025 versus only a partial amount of such expenses related to the period in which the assets were in service in 2025.

Current wording

Cost of Customer Agreements and Incentives. The $9.5 million increase in Cost of customer agreements and incentives was primarily due to the new systems placed in service in the period from October 1, 2025 through September 30, 2026, plus a full three months of costs recognized in 2026 for systems placed in service in the three months of 2025 versus only a partial amount of such expenses related to the period in which the assets were in service in 2025.

Previous wording

The Cost of customer agreements and incentives decreased to 63% of customer agreements and incentives revenue during the three months ended June 30, 2026, from 75% during the three months ended June 30, 2025. This decrease is primarily due to customer pricing increases catching up to costs.

Current wording

The Cost of customer agreements and incentives decreased to 59% of customer agreements and incentives revenue during the three months ended September 30, 2026, from 64% during the three months ended September 30, 2025. This decrease is primarily due to customer pricing increases catching up to costs.

Previous wording

Cost of Energy Systems and Product Sales. The $95.2 million increase in Cost of energy systems and product sales was primarily due to the corresponding net increase in the energy systems and product sales discussed above.

Current wording

Cost of Energy Systems and Product Sales. The $139.1 million increase in Cost of energy systems and product sales was primarily due to the corresponding net increase in the energy systems and product sales discussed above.

Previous wording

The Cost of energy systems and product sales decreased to 61% of revenue from energy systems and product sales during the quarter ended June 30, 2026, from 94% during the quarter ended June 30, 2025, primarily due to the increase in system sales to a third-party investor related to the transaction Sunrun entered in the third quarter of 2025 and the non-controlled joint venture entered in fiscal 2026 discussed above.

Current wording

The Cost of energy systems and product sales decreased to 56% of revenue from energy systems and product sales during the quarter ended September 30, 2026, from 71% during the quarter ended September 30, 2025, primarily due to the increase in system sales to a third-party investor related to the transaction Sunrun entered in the third quarter of 2025, with sales still ramping up in the prior year's period, and the non-controlled joint venture entered in fiscal 2026 discussed above.

Previous wording

Sales and Marketing Expense. The $70.8 million increase in Sales and marketing expense was primarily attributable to an increase in costs to acquire customers through our sales lead generating partners related to the increase in system sales to a third-party from the transaction Sunrun entered starting in Q3 2025 discussed above. A decrease in sales and marketing headcount driving lower employee compensation partially offset such costs. Included in Sales and marketing expense is $52.6 million and $45.4 million of amortization of costs to obtain Customer Agreements for the six months ended June 30, 2026 and 2025, respectively.

Current wording

Sales and Marketing Expense. The $75.2 million increase in Sales and marketing expense was primarily attributable to an increase in costs to acquire customers through our sales lead generating partners related to the increase in system sales to a third-party from the transaction Sunrun entered starting in Q3 2025 and the non-controlled joint venture discussed above. Included in Sales and marketing expense is $27.8 million and $25.8 million of amortization of costs to obtain Customer Agreements for the three months ended September 30, 2026 and 2025, respectively.

Previous wording

Research and Development Expense. The $2.2 million increase in Research and development expense was primarily attributable to an increase in research and development headcount driving higher employee compensation.

Current wording

Research and Development Expense. The $0.9 million increase in Research and development expense was primarily attributable to an increase in research and development headcount driving higher employee compensation.

Previous wording

General and Administrative Expense. The $21.0 million increase in General and administrative expenses was primarily attributable to increases related to information technology related consulting costs.

Current wording

General and Administrative Expense. The $0.4 million increase in General and administrative expenses was primarily attributable to increases related to fees associated with entering ITC transfer agreements with various third-parties.

Previous wording

Interest Expense, net. The increase in interest expense, net of $17.3 million was primarily related to additional non-recourse debt entered into subsequent to June 30, 2025. Included in net interest expenseis$10.1 million and $9.4 million of non-cash interest recognized under Customer Agreements that have a significant financing component for the three months ended June 30, 2026 and 2025, respectively.

Current wording

Interest Expense, net. The increase in interest expense, net of $10.2 million was primarily related to additional non-recourse debt entered into subsequent to September 30, 2025. Included in net interest expenseis$10.1 million and $9.6 million of non-cash interest recognized under Customer Agreements that have a significant financing component for the three months ended September 30, 2026 and 2025, respectively.

Previous wording

Other Income (Expense), net. The increase in other income (expense), net of $32.0 million related primarily to gains on derivatives recognized in the three months ended June 30, 2026.

Current wording

Other Income (Expense), net. The increase in other income (expense), net of $182.2 million related primarily to gains on derivatives recognized in the three months ended September 30, 2026.

Previous wording

The decrease in income tax benefit of $91.0 million is primarily attributable to decreased benefit related to ITC transfer originations, increased valuation allowance expense, and decreased net income attributable to common stockholders.

Current wording

The increase in income tax benefit of $43.0 million is primarily attributable to increased benefit related to ITC transfer originations, partially offset by increased net income attributable to common stockholders.

Previous wording

The decrease in net loss attributable to noncontrolling interests and redeemable noncontrolling interests was primarily the result of the addition of new investment funds later in the period in the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, for which the HLBV method was used in determining the amount of net loss attributable to noncontrolling interests. Investment funds generally allocate more loss to the noncontrolling interest in the first several years after fund formation.

Current wording

The decrease in net loss attributable to noncontrolling interests and redeemable noncontrolling interests was primarily the result of the addition of no new investment funds in the three months ended September 30, 2026, as compared to two new funds opening during the three months ended September 30, 2025, for which the HLBV method was used in determining the amount of net loss attributable to noncontrolling interests. Investment funds generally allocate more loss to the noncontrolling interest in the first several years after fund formation.

Previous wording

Customer Agreements and Incentives. The $139.3 million increase in revenue from Customer Agreements was primarily due to new systems placed in service in the period from July 1, 2025 through June 30, 2026, plus a full six months of revenue recognized in 2026 for systems placed in service in the first six months of 2025 versus only a partial amount of such revenue related to the period in which the assets were in service in 2025. Revenue from incentives consisted primarily of sales of SRECs. The $11.4 million increase in revenues from incentives related to the timing and volume of SREC sales which were responsive to market conditions.

Current wording

Customer Agreements and Incentives. The $198.8 million increase in revenue from Customer Agreements was primarily due to new systems placed in service in the period from October 1, 2025 through September 30, 2026, plus a full nine months of revenue recognized in 2026 for systems placed in service in the first nine months of 2025 versus only a partial amount of such revenue related to the period in which the assets were in service in 2025. Revenue from incentives consisted primarily of sales of SRECs. The $13.7 million increase in revenues from incentives related to the timing and volume of SREC sales which were responsive to market conditions.

Previous wording

Energy Systems and Product Sales. Revenue from energy systems sales increased by $425.2 million compared to the prior year primarily due to a transaction that Sunrun entered into in the third quarter of 2025, as well as the non-controlled joint venture Sunrun entered in fiscal 2026, whereby certain storage and energy systems subject to newly originated Customer Agreements are sold to a third-party investor or the joint venture; however, Sunrun continues to maintain the customer experience and servicing relationships and can sell future goods and services to these customers. Product sales decreased by $57.3 million, primarily due to the lower average sales price of energy products, as well as lower sales volume of energy products to installers of energy systems compared to the prior year, due to easing of supply chain constraints.

Current wording

Energy Systems and Product Sales. Revenue from energy systems sales increased by $774.1 million compared to the prior year. This increase was primarily due to a transaction that Sunrun entered into in the third quarter of 2025, with sales still ramping up in the prior year's period, as well as the non-controlled joint venture Sunrun entered in fiscal 2026, whereby certain storage and energy systems subject to newly originated Customer Agreements are sold to a third-party investor or the joint venture; however, Sunrun continues to maintain the customer experience and servicing relationships and can sell future goods and services to these customers. Product sales decreased by $93.0 million, primarily due to the lower average sales price of energy products, as well as lower sales volume of energy products to installers of energy systems compared to the prior year, due to easing of supply chain constraints.

Previous wording

The Cost of customer agreements and incentives decreased to 65% of customer agreements and incentives revenue during the six months ended June 30, 2026, from 76% during the six months ended June 30, 2025. This decrease is primarily due to customer pricing increases catching up to costs.

Current wording

The Cost of customer agreements and incentives decreased to 63% of customer agreements and incentives revenue during the nine months ended September 30, 2026, from 72% during the nine months ended September 30, 2025. This decrease is primarily due to customer pricing increases catching up to costs.

Previous wording

Cost of Energy Systems and Product Sales. The $186.1 million increase in Cost of energy systems and product sales was primarily due to the corresponding net increase in the energy systems and product sales discussed above.

Current wording

Cost of Energy Systems and Product Sales. The $325.2 million increase in Cost of energy systems and product sales was primarily due to the corresponding net increase in the energy systems and product sales discussed above.

Previous wording

The Cost of energy systems and product sales decreased to 67% of revenue from energy systems and product sales during the six months ended June 30, 2026, from 94% during the six months ended June 30, 2025, primarily due to the increase in system sales to a third-party investor or joint venture related to the transaction Sunrun entered in the third quarter of 2025 and the non-controlled joint venture entered in fiscal 2026 discussed above.

Current wording

The Cost of energy systems and product sales decreased to 61% of revenue from energy systems and product sales during the nine months ended September 30, 2026, from 82% during the nine months ended September 30, 2025, primarily due to the increase in system sales to a third-party investor or joint venture related to the transaction Sunrun entered in the third quarter of 2025, with sales still ramping up in the prior year's period, and the non-controlled joint venture entered in fiscal 2026 discussed above.

Previous wording

Sales and Marketing Expense. The $38.2 million increase in Sales and marketing expense was primarily attributable to an increase in costs to acquire customers through our sales lead generating partners related to the increase in system sales to a third-party from the transaction Sunrun entered starting in Q3 2025 discussed above. A decrease in sales and marketing headcount driving lower employee compensation partially offset such costs. Included in Sales and marketing expense is $26.6 million and $23.3 million of amortization of costs to obtain Customer Agreements for the three months ended June 30, 2026 and 2025, respectively.

Current wording

Sales and Marketing Expense. The $146.0 million increase in Sales and marketing expense was primarily attributable to an increase in costs to acquire customers through our sales lead generating partners related to the increase in system sales to a third-party from the transaction Sunrun entered starting in the third quarter of 2025 discussed above. A decrease in sales and marketing headcount driving lower employee compensation partially offset such costs. Included in Sales and marketing expense is $80.3 million and $71.2 million of amortization of costs to obtain Customer Agreements for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Research and Development Expense. The $2.3 million increase in Research and development expense was primarily attributable to an increase in research and development headcount driving higher employee compensation.

Current wording

Research and Development Expense. The $3.2 million increase in Research and development expense was primarily attributable to an increase in research and development headcount driving higher employee compensation.

Previous wording

General and Administrative Expense. The $37.9 million increase in General and administrative expenses was primarily attributable to increases related to information technology related consulting costs, as well as employee compensation.

Current wording

General and Administrative Expense. The $38.2 million increase in General and administrative expenses was primarily attributable to increases related to fees associated with entering ITC transfer agreements with various third-parties, as well as information technology related consulting costs.

Previous wording

Interest Expense, net. The increase in interest expense, net of $53.8 million was primarily related to additional non-recourse debt entered into subsequent to June 30, 2025. Included in net interest expenseis $20.2 million and $18.7 million of non-cash interest recognized under Customer Agreements that have a significant financing component for the six months ended June 30, 2026 and 2025, respectively.

Current wording

Interest Expense, net. The increase in interest expense, net of $64.0 million was primarily related to additional non-recourse debt entered into subsequent to September 30, 2025. Included in net interest expenseis $30.3 million and $28.2 million of non-cash interest recognized under Customer Agreements that have a significant financing component for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Other Income (Expense), net. The increase in other income (expense), net of $94.6 million related primarily to gains on derivatives recognized in the six months ended June 30, 2026.

Current wording

Other Income (Expense), net. The increase in other income (expense), net of $276.8 million related primarily to gains on derivatives recognized in the nine months ended September 30, 2026.

Previous wording

The decrease in income tax benefit of $208.6 million is primarily attributable to decreased benefit related to ITC transfer originations, increased valuation allowance expense, and increased net income attributable to common stockholders.

Current wording

The decrease in income tax benefit of $165.6 million is primarily attributable to decreased benefit related to ITC transfer originations, increased valuation allowance expense, and increased net income attributable to common stockholders.

Previous wording

The decrease in net loss attributable to noncontrolling interests and redeemable noncontrolling interests was primarily the result of the addition of new investment funds later in the period in the first six months of 2026 as compared to the first six months of 2025, for which the HLBV method was used in determining the amount of net loss attributable to noncontrolling interests. Investment funds generally allocate more loss to the noncontrolling interest in the first several years after fund formation.

Current wording

The decrease in net loss attributable to noncontrolling interests and redeemable noncontrolling interests was primarily the result of the addition of new investment funds later in the period in the first nine months of 2026 as compared to the first nine months of 2025, for which the HLBV method was used in determining the amount of net loss attributable to noncontrolling interests. Investment funds generally allocate more loss to the noncontrolling interest in the first several years after fund formation.

Previous wording

As of June 30, 2026, we had cash of $712.4 million, which consisted of cash held in checking and savings accounts with financial institutions. We finance our operations mainly through a variety of financing fund arrangements that we have formed with fund investors, cash generated from our sources of revenue and borrowings from secured credit facilities arrangements with syndicates of banks and from secured, long-term non-recourse loan arrangements. In 2025, we received $1.2 billion of new commitments on secured credit facilities arrangements and $1.6 billion of commitments from secured, long-term non-recourse loan arrangements. Our principal uses of cash are funding our business, including the costs of acquisition and installation of solar energy systems, satisfaction of our obligations under our debt instruments and other working capital requirements. As of June 30, 2026, we had outstanding borrowings of $153.7 million on our $321.4 million credit facility maturing in March 2028. In December 2025, we amended our bank line of credit to, among other things, reduce the total commitments from $447.5 million to approximately $321.4 million, and to extend the maturity date from March 2027 to March 2028. In 2024, we amended one of our subsidiary’s senior secured credit facility to, among other things, increase the total commitments from $1.8 billion to $2.6 billion and extend the maturity date from April 2025 to April 2028. For further information regarding certain of the impacts our ability to raise capital on our business, see Part I, Item 1A. Risk Factors— Risks Related to Our Operating Structure and Financing Activities—"We need to raise capital to finance the continued growth of our operations and solar service business. If capital is not available to us on acceptable terms, as and when needed, our business and prospects would be materially and adversely impacted. In addition, our business is affected by general economic conditions and related uncertainties affecting markets in which we operate. Volatility in current economic conditions could adversely impact our business, including our ability to raise financing.”

Current wording

As of September 30, 2026, we had cash of $699.4 million, which consisted of cash held in checking and savings accounts with financial institutions. We finance our operations mainly through a variety of financing fund arrangements that we have formed with fund investors, cash generated from our sources of revenue and borrowings from secured credit facilities arrangements with syndicates of banks and from secured, long-term non-recourse loan arrangements. In 2025, we received $1.2 billion of new commitments on secured credit facilities arrangements and $1.6 billion of commitments from secured, long-term non-recourse loan arrangements. Our principal uses of cash are funding our business, including the costs of acquisition and installation of solar energy systems, satisfaction of our obligations under our debt instruments and other working capital requirements. As of September 30, 2026, we had outstanding borrowings of $135.1 million on our $321.4 million credit facility maturing in March 2028. In December 2025, we amended our bank line of credit to, among other things, reduce the total commitments from $447.5 million to approximately $321.4 million, and to extend the maturity date from March 2027 to March 2028. In 2024, we amended one of our subsidiary’s senior secured credit facilities to, among other things, increase the total commitments from $1.8 billion to $2.6 billion and extend the maturity date from April 2025 to April 2028. For further information regarding certain impacts on our ability to raise capital on our business, see Part I, Item 1A. Risk Factors— Risks Related to Our Operating Structure and Financing Activities—"We need to raise capital to finance the continued growth of our operations and solar service business. If capital is not available to us on acceptable terms, as and when needed, our business and prospects would be materially and adversely impacted. In addition, our business is affected by general economic conditions and related uncertainties affecting markets in which we operate. Volatility in current economic conditions could adversely impact our business, including our ability to raise financing.”

Previous wording

Additionally, we have purchase commitments, which have the ability to be canceled without significant penalties, with multiple suppliers to purchase $301.6 million of batteries by the end of the second quarter of 2027 and to purchase $2.1 billion of photovoltaic modules, inverters and batteries between fiscal year 2026 and fiscal year 2029. In February 2026, we amended one of our subsidiary's senior secured credit facility to, among other things, increase the total commitment to $2.7 billion and extend the maturity date from February 2028 to February 2030. Our business model requires substantial outside financing arrangements to grow the business and facilitate the deployment of additional energy systems. The energy systems that are operational are expected to generate a positive return rate over the term of the Customer Agreement, typically 20 or 25 years. However, in order to grow, we will continue to be dependent on financing from outside parties. If financing is not available to us on acceptable terms if and when needed, we may be required to reduce planned spending, which could have a material adverse effect on our operations. While there can be no assurances, we anticipate raising additional required capital from new and existing investors. We believe our cash, investment fund commitments and available borrowings as further described below will be sufficient to meet our anticipated cash needs for at least the next 12 months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash balances, and available credit via our credit facilities. The following table summarizes our cash flows for the periods indicated:

Current wording

Additionally, we have purchase commitments, which have the ability to be canceled without significant penalties, with multiple suppliers to purchase $294.1 million of batteries by the end of the third quarter of 2027 and to purchase $2.1 billion of photovoltaic modules, inverters and batteries between fiscal year 2026 and fiscal year 2029. In February 2026, we amended one of our subsidiary's senior secured credit facilities to, among other things, increase the total commitment to $2.7 billion and extend the maturity date from February 2028 to February 2030. Our business model requires substantial outside financing arrangements to grow the business and facilitate the deployment of additional energy systems. The energy systems that are operational are expected to generate a positive return rate over the term of the Customer Agreement, typically 20 or 25 years. However, in order to grow, we will continue to be dependent on financing from outside parties. If financing is not available to us on acceptable terms if and when needed, we may be required to reduce planned spending, which could have a material adverse effect on our operations. While there can be no assurances, we anticipate raising additional required capital from new and existing investors. We believe our cash, investment fund commitments and available borrowings as further described below will be sufficient to meet our anticipated cash needs for at least the next 12 months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash balances, and available credit via our credit facilities. The following table summarizes our cash flows for the periods indicated:

Previous wording

During the six months ended June 30, 2026, we generated $175.6 million in net cash provided from operating activities. The driver of our operating cash outflow consisted of the cost of our revenue, as well as sales, marketing and general and administrative costs. During the six months ended June 30, 2026, our operating cash outflows were $57.1 million from our net loss excluding non-cash and non-operating items. Changes in working capital resulted in a net cash inflow of $232.6 million.

Current wording

During the nine months ended September 30, 2026, we generated $125.8 million in net cash provided from operating activities. The primary driver of our operating cash inflow consisted of the revenue generated from energy system sales, partially offset by sales, marketing and general and administrative costs. During the nine months ended September 30, 2026, our operating cash inflows were $257.7 million from our net loss excluding non-cash and non-operating items. Changes in working capital resulted in a net cash outflow of $131.8 million.

Previous wording

During the six months ended June 30, 2025, we used $396.9 million in net cash from operating activities. The driver of our operating cash outflow consisted of the cost of our revenue, as well as sales, marketing and general and administrative costs. During the six months ended June 30, 2025, our operating cash outflows were $151.7 million from our net loss excluding non-cash and non-operating items. Changes in working capital resulted in a net cash inflow of $245.1 million.

Current wording

During the nine months ended September 30, 2025, we used $518.4 million in net cash from operating activities. The driver of our operating cash outflow consisted of the cost of our revenue, as well as sales, marketing and general and administrative costs. During the nine months ended September 30, 2025, our operating cash outflows were $124.1 million from our net loss excluding non-cash and non-operating items. Changes in working capital resulted in a net cash outflow of $394.3 million.

Previous wording

During the six months ended June 30, 2026, we used $877.7 million in cash in investing activities. The majority was used to design, acquire and install energy systems and components under our long-term Customer Agreements.

Current wording

During the nine months ended September 30, 2026, we used $1.3 billion in cash in investing activities. The majority was used to design, acquire and install energy systems and components under our long-term Customer Agreements.

Previous wording

During the six months ended June 30, 2025, we used $1,347.8 million in cash in investing activities. The majority was used to design, acquire and install energy systems and components under our long-term Customer Agreements.

Current wording

During the nine months ended September 30, 2025, we used $2.1 billion in cash in investing activities. The majority was used to design, acquire and install energy systems and components under our long-term Customer Agreements.