Sunrun Inc.

Good afternoon and welcome to Sunrun's first quarter 2026 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. During the Q&A session, after the prepared remarks, please press star 1 at any time. We ask participants to limit themselves to one question and one follow-up question. I will now turn the call over to Patrick Jobin, Sunrun's investor relations officer. Thank you. Please go ahead.

Thank you, Julian. Before we begin, please note that certain remarks we will make on this call constitute forward-looking statements related to the expected future results of our company, including our Q2 and full year 2026, financial outlook, and other statements that are not historical in nature. are predictive in nature or depend upon or refer to future events or conditions such as our expectations, estimates, predictions, strategies, beliefs, or other statements that may be considered forward-looking. 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. Please note, during this conference call, we may refer to certain non-GAAP measures, including cash generation, aggregate creation costs, which are measures prepared, not measures prepared in accordance with US GAAP. These non-GAAP measures are being presented because we believe they provide investors with means of evaluating and understanding how the company's management evaluates the company's operating performance. Reconciliation of these measures can be found on our earnings press release, and other investor materials available on the company's investor relations website. These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to, financial measures prepared in accordance with U.S. GAAP. On the call today are Mary Powell, Sunrun's CEO, Danny Abadian, Sunrun's CFO, and Paul Dixon, Sunrun's President and Chief Revenue Officer. 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 Sunrun's Investor Relations website shortly after the call. And now let me turn the call over to Mary.

Thank you, Patrick, and thank you all for joining us today. At Sunrun, we are busy rapidly ramping sales and operations to fulfill the surging customer demand we have generated for our offering. Sunrun is solidifying and expanding its leadership position as the nation's largest residential distributed power plant developer and operator. Our addressable market is no longer solar-driven savings. It is America's need for power to fuel our economy. Our strategy is working. In Q4, we told you we had reached an inflection point. Today, we're here to tell you that the momentum we built is holding and accelerating. In a market environment that continues to test many participants, Our scale, our vertically integrated model, our product strategy, and our relentless focus on execution and customer experience are proving to be genuine, durable, competitive advantages. Put simply, we believe the market dislocations occurring around us present opportunities for us to extend our lead and accelerate profitable, high-quality growth. Let me start with our Q1 results. We added approximately 19,000 customers in Q1, and our storage attachment rate increased again to 73%, reflecting our continued commitment to a storage-first strategy as we build the nation's largest distributed power plant. Aggregate subscriber value for Q1 was $1.1 billion, above our guidance range of $850 to $950 million. Contracted net value creation was $108 million, near the high end of our guided range of $25 to $125 million. Cash generation came in at negative $31 million when excluding equipment safe harbor investments. We chose to shift certain project finance transaction activity from Q1 into Q2, negatively impacting our cash generation for Q1. We remain on track for our full year guidance of $250 to $450 million. Danny will walk you through the details of the financials in a moment, but I want to give you the strategic picture first. When we closed 2025, we had installed more than 237,000 solar plus storage systems, approximately four gigawatt hours of network storage capacity. In Q1, that number grew to 4.3 gigawatt hours. Our fleet of dispatchable storage has grown over 50% compared to the prior year. That is not just a metric. It is infrastructure. It is real distributed dispatchable power woven into American homes and the energy system. And it is something no one else in this industry has at our scale. This is the business we have been building. Not a company that sells solar panels, but a company that operates critical energy infrastructure that stabilizes the grid and provides customers price certainty and backup power. In a moment of unprecedented electricity demand, driven by AI data centers and electrification, coupled with an aging grid, That distinction has never mattered more. I want to spend a moment on the dynamic industry environment we are operating in. Sunrun is incredibly well positioned to capitalize and extend our lead in the industry. The changes happening in the industry are difficult for many companies to navigate, but we believe that they play directly to Sunrun's strengths. Let me hit the big changes in the industry and our position. First, the consumer ITC under Section 25D of the tax code associated with cash purchases or loan financing sunset at the end of December. Many smaller dealers and some of our affiliate partners that had significant volume dependent on the 25D tax credit have suffered significant volume declines this year. Sunrun's origination volume is almost entirely subscriptions, and thus we are not seeing similar impacts from changes to the 25D tax credit. Utility rate structures have become increasingly complex and customer value propositions hinge on and can be expanded by storage that is properly designed and actively managed to ensure consumer value. We believe that our vertically integrated model has allowed us to provide the best customer experience and offerings. We train our sales force and operations teams and ensure end-to-end alignment. This is one of the reasons we have very deliberately shifted our growth mix towards our direct business. Third, the regulatory complexity navigating domestic content and FEOC rules is increasing. We believe that our experience and scale give us tremendous advantages to navigate these items from equipment procurement, logistics, and compliance. Fourth, we have focused on margins and cash generation, well ahead of others in the industry. This allows us to operate with a strong balance sheet that has low parent recourse leverage, enabling us to strategically invest in profitable growth and make the right long-term business decisions from a position of strength. Our balance sheet strength, along with our large scale operations, has also afforded us the ability to prudently invest in safe harboring, enabling maximum ITC levels through 2030. Sunrun's end-to-end visibility, our vertical integration, Our sophisticated capital markets experience is precisely what allows us to drive competitive advantages and thrive. We are leaning in during this moment of industry change. We are seeing strong momentum in direct sales force recruiting. We are matching direct sales momentum with ramping our direct installation capacity, enabling us to approach year over year growth in overall installations later this year. We hired more than 1,000 people in sales year to date who are excited to be part of our growth trajectory. We are onboarding hundreds more, representing some of the best talent in the industry from sales dealers who have recognized Sunrun's sustainable approach and appreciate our customer experience focus. These talented sales representatives understand the shifts in industry have made the dealer model unstable and unattractive. We are driving strong, profitable growth with expanding margins for new customers, We are also deep into our strategy of building capital light sources of recurring cash flows that are independent of new customer origination. We will be monetizing our base of customers and providing at-scale resources to the grid. We plan to also offer these services to orphaned customers across the industry. We expect these recurring cash flows to scale and augment our cash generation growth in the coming years. Our full year 2026 guidance remains intact, and we are excited about our long-term growth trajectory. I want to close by returning to what I believe most deeply about this company and this moment. America needs more power, and Americans want more independence and control. The proliferation of AI data centers, the electrification of transportation and homes, the decarbonization of the grid, all of these demand new solutions. The answer is not going to come from a single large plant that takes years and years to build. Instead, we believe distributed, intelligent, flexible resources deployed into homes and communities today will be a meaningful part of the solution. That is Sunrun. We have over 1.1 million customers across the country. We have the largest residential battery fleet in the country. We are dispatching energy to the grid. We are protecting families from outages. And we are doing all of this while generating meaningful cash, paying down debt, and building a balance sheet that gives us flexibility to invest in the future. Before handing it over to Danny, I also want to take a moment to celebrate some of our people who truly embrace our customer-first and service-focused mentality. This quarter, I specifically want to call out our team members in Hawaii. As we all saw, Hawaii experienced severe and catastrophic flooding this past March. affecting thousands of residents, including many Sunrun customers. Over a dozen of our team members in Hawaii, ranging from electricians to installers to sales leaders, spent many hours assisting in recovery efforts on the island of Oahu. I'm so thankful for their contributions. Darius, Kelton, Chad, and to all our Hawaii team members, mahalo. We are incredibly proud to have you representing Sunrun. Danny, over to you.