Sunrun Inc.

Good afternoon and welcome to Sunrun's first quarter earnings conference call. Please note that this call is being recorded and that one hour has been allocated for the call, including the Q&A session. To join the Q&A session after prepared remarks, please press star one at any time. We ask participants to limit themselves to one question and one follow up. I'll now turn the call over to Patrick Jobin, Sunrun's investor relations officer.

Thank you, Alicia. Before we begin, please note that certain remarks we will make on this law constitute forward-looking statements. Although we believe these statements reflect our best judgment based on factors currently known to us, actual results may differ materially and adversely. Please refer to the company's filings with the SEC for a more inclusive discussion of risks and other factors that may cause our actual results to differ from projections made in any forward-looking statements. Please also note these statements are being made as of today, and we disclaim any obligation to update or revise them. On the call today are Mary Powell, Sunrun's CEO, Paul Dixon, Sunrun's President and Chief Revenue Officer, and Damia Badgen, Sunrun's CFO. A presentation is available on Sunrun's Investor Relations website, along with supplemental materials. An audio replay of today's call, along with a copy of today's prepared remarks and transcript, including Q&A, will be posted to the Sunrun Investor Relations website shortly after the call. And now let me turn the call to Mary.

Thank you, Patrick. And thank you all for joining us today. In the first quarter, we exceeded our volume and cash generation targets in what is seasonally the slowest quarter of the year. We generated 56 million in cash, our fourth consecutive quarter of positive cash generation. We delivered market share gains and continued delivering, paying down our parent debt by 27 million. We ended Q1 with 605 million in unrestricted cash, a $30 million increase from the prior quarter. At the same time, we are excited about the official announcement of our new product, Flex, which Paul will talk about shortly. It is a dynamic environment for tax policy and tariffs. These uncertainties make planning difficult and may require significant adjustments for the business. Like many companies across the country, we are controlling what we can and are ready to adapt to changes that may occur. Sunrun has faced periods of major change over the last few years, and we used it as an opportunity to become even stronger. We believe the tariff outlook is manageable, and we will generate meaningful cash this year. We are delivering the best product for customers, underwriting volumes with strong unit margins, optimizing our routes to market, and driving cost discipline, including leveraging AI for innovation, creating significant operating efficiencies and quality enhancements. This has allowed us to gain considerable market share in recent periods, and produce strong operating and financial results. Turning to an update on demand. Demand remains strong. In Q1, total customer additions grew 6% compared to the prior year. And more meaningfully, our aggregate subscriber value grew 23% from last year to more than 1.2 billion. This growth was supported by our higher value storage offerings and flats. Customer additions with storage grew by over 46% from Q1 of last year, hitting a record high of 69% storage attachment rate. We are growing our share of consumers' energy spend and have favorable tailwinds with further electrification, increasing grid instability, and utility rate escalation. Americans want affordable and reliable energy. we provide a way for them to lock in predictable energy costs and reliability with no money down. Demand for our offering is strong in good times and during periods of weakening consumer confidence, or even a recession, as Americans look for ways to control what they can. On slide five, you can see the strong volume growth we are achieving. Sunrun is now a multi-product company, primarily providing solar and storage systems nearly quadrupling this business in the last two years. Demand for residential solar and storage is strong, and the industry has only penetrated approximately 6% of households. Our approach has led us to gain considerable market share. As you can see on slide six, we have steadily increased our share to approximately 19% of new solar installations and about 45% of new storage installations across the country. Leading with a storage-first offering provides numerous financial benefits. Subscribers with storage have higher upfront margins as we are providing a more sophisticated offering that provides additional value to customers and because it is more complex to sell, design, install, and service. Over time, storage systems also unlock additional recurring revenue streams as they present valuable energy resources for the grid. While still a nascent business, and small source of revenue today. This will grow significantly in the years ahead. Turning to updates on federal policy and the trade situation. We are encouraged that congressional offices understand the economic benefits of energy tax credits, especially given new electricity demand from trends like artificial intelligence. Interest in residential solar and storage is bipartisan. Our 1 million customers and their representatives in Congress are politically diverse, And they all want more affordable and reliable energy. A growing number of Republicans in Congress, including 39 overall house members and four senators have publicly expressed support for maintaining energy tax credits through various letters over the past few months. Just last week, an additional letter of support for maintaining the technology neutral credit, 48E, for the benefit of nuclear power was signed by 24 members. This credit is also the same technology neutral credit we utilize. We expect a range of draft proposals to be issued, possibly including some draconian scenarios, but they are expected to be moderated as negotiations progress. As a reminder, Republicans in the House can only lose three votes to pass legislation, and more than three dozen, as well as four US senators, have been advocating to maintain energy credits. We are actively working through scenario planning and corresponding actions if there are material changes. Actions could include, say, harboring with equipment purchases and pairing back geographies. In the past, we have seen industry-wide customer acquisition costs decrease and end consumer prices increase to absorb compression and margin from regulatory changes, and we have a playbook to enact this. These are in addition to our ongoing efforts to drive further cost reductions and further monetize the value of our existing customer base. Shifting to the current tariff situation, hardware costs represent about one third of our total costs, and this cost will increase from tariffs. Near term, the effects are mitigated owing to the advanced purchasing we did at the end of 2024. We are also shifting to use more domestically produced equipment, but supply is limited. Currently about half of our module supply and 100% of inverter and battery supply is sourced domestically, although with input components sourced globally. We do not directly import any solar equipment from China, although producers in China are important for various upstream components used by our suppliers. Any adverse changes to tax and tariff policy, of course, will also impact utilities and create additional pricing headroom. Lastly, Before I turn the call over to Paul, I want to thank all of our Sunrun teams and our partners that are clearly born to run, driving significant results for our customers and shareholders. This quarter, I also want to highlight our AI team. This team is driving enhanced efficiency and customer experience. As an example, one of our recent projects includes our system design tool. We have been able to unlock 30% higher efficiency in the design process. improving turnaround times and accuracy, reducing costs, and increasing sales realization. We are working on over 100 AI initiatives across the company. A big shout out to our Chief Technology Officer, Rechit, and the AI team leads, Chok, Edward, Lakshu, Marco, Parker, Terry, Victor, Yahia. Thank you so much. And with that, I'll turn the call over to Paul to discuss Sunrun Flex.