Executive Summary

Q2 2025 revenue was $13.06M, down 3.6% YoY, while gross margin expanded 160 bps to 37.0% on NY margin gains and cost efficiencies; Adjusted EBITDA improved to $(1.0)M from $(1.7)M YoY .
Net loss widened to $(9.61)M vs $(6.93)M YoY, driven by a $(7.53)M non‑cash warrant remeasurement and $0.56M financing fees; interest expense fell sharply to $0.16M on deleveraging .
Guidance reiterated: FY25 sales $65–$70M and Adjusted EBITDA $0.5–$0.7M, supported by a residential backlog surge ahead of the Section 25D sunset and a rising commercial pipeline .
Strategic catalysts/overhangs: termination of Series A warrants removed potential dilution, while a new $30M ATM program provides liquidity but may weigh on sentiment; policy uncertainty from OBBBA is driving near‑term demand and a pivot toward TPO financing models .

What Went Well and What Went Wrong

Gross margin expanded to 37.0% (vs 35.4% LY) on NY strength and cost optimization; SG&A fell to $6.44M from $6.56M YoY; Adjusted EBITDA loss narrowed to $(1.0)M from $(1.7)M .
Balance sheet strengthened: total debt cut 61% to $7.5M (from $19.1M YE24), interest expense down to $0.16M (vs $0.74M LY), and cash rose to $3.19M (vs $0.84M YE24) .
Management tone confident on diversification and backlog: “Our greatest strength at Sun Nation is our diversification” and “We are prepared to pivot unlike our competition” .

Consolidated sales declined 3.6% YoY to $13.06M as Hawaii revenue fell to $3.2M (vs $3.8M LY) despite improving incentives; residential kilowatts installed decreased 11% and HI fixed costs pressured margins .
Net loss was materially impacted by non‑cash items: $(7.53)M warrant remeasurement and $0.56M financing fees, masking operational improvements .
NY residential sales fell 6% to $8.0M YoY; NY commercial, while up 156% to $1.3M, still small absolute scale; commercial timelines faced utility delays in NY .

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD)	$13,549,420	$12,636,638	$13,064,254
Gross Profit ($USD)	$4,792,354	$4,431,325	$4,839,517
Gross Margin %	35.4%	35.1%	37.0%
SG&A ($USD)	$6,558,923	$6,039,298	$6,443,729
Operating Loss ($USD)	$(2,025,944)	$(2,167,348)	$(2,163,587)
Interest Expense ($USD)	$(735,633)	$(571,240)	$(162,130)
Net Loss ($USD)	$(6,934,015)	$(3,496,432)	$(9,607,415)
Basic EPS ($USD)	$(8.42)	$(106.71)	$(3.14)
Adjusted EBITDA ($USD)	$(1,691,997)	$(1,464,215)	$(989,453)

Geographic sales (YoY):

Region	Q2 2024	Q2 2025
New York Total Sales ($USD)	$9,700,000	$9,800,000
Hawaii Total Sales ($USD)	$3,800,000	$3,200,000

Q2 2025 segment detail (NY):

Segment (NY)	Q2 2025
Residential Sales ($USD)	$8,000,000
Commercial Sales ($USD)	$1,300,000

KPIs – Backlog and realization:

KPI	12/31/2024	06/30/2025	07/31/2025
Residential Backlog ($USD)	$26,900,000	$27,100,000	$35,600,000
Commercial Backlog ($USD)	—	$900,000	$4,200,000
% Commercial Backlog to be realized by 12/31	—	—	65%

Balance sheet snapshots:

Non‑GAAP adjustments (impact): Net loss included $(7.53)M non‑cash warrant remeasurement and $0.56M financing fees in Q2 2025 .

Metric	Period	Previous Guidance	Current Guidance	Change
Total Sales ($USD)	FY 2025	$65M–$70M	$65M–$70M	Maintained
Adjusted EBITDA ($USD)	FY 2025	$0.5M–$0.7M	$0.5M–$0.7M	Maintained

Topic	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Policy/ITC & OBBBA	Urgency before potential incentive changes; transparent stance on ITC	OBBBA as “major policy reversal”; Section 25D sunset accelerating demand; pivot to TPO	Heightened urgency; financing shift
Diversification	Multi‑revenue strategy incl. service for orphan systems	“Our greatest strength is diversification”; NY/Hawaii mix; service/commercial emphasis	Reinforced and executing
Capital structure	Debt cuts and interest savings	Debt down 61%, cash up ~4x; terminated Series A warrants	Improved, cleaner equity
AI/crypto/data centers	Bitcoin treasury contemplated; acquisitions focus	Target alignment with AI/crypto/data center power demand	Emerging strategic focus
Regional trends	NY high rates; HI battery incentives (May start)	NY commercial delays easing; HI shift to service/commercial; HECO battery program helps	Demand improving in core markets

“The passage of the One Big Beautiful Bill Act (“OBBBA”) in July represented a major policy reversal… our success in improving our operations has prepared us to adjust to and, we believe, prosper in, this new environment.” — CEO Scott Maskin .
“We increased gross margin, reduced SG&A expenses, and improved our Adjusted EBITDA loss… cash at quarter end rose nearly four‑fold… we reduced our debt by $11.7 million.” — CFO James Brennan .
“Our greatest strength at Sun Nation is our diversification… We are prepared to pivot unlike our competition.” — CEO Scott Maskin .
“Residential backlog accelerated to $35.6M on July 31… commercial backlog $4.2M; we expect to realize 65% of the commercial backlog by December 31.” — CFO James Brennan .

Financing post‑25D: Management expects a pivot to third‑party ownership and hybrid models; evaluating prepaid leases and new structures to serve homeowners post‑sunset .
2026/2027 residential outlook: Demand likely remains resilient in NY/HI on high electricity costs; potential supply constraints; continued financing innovation expected .
Tax credit timing: Systems must be operational by 12/31; permit closure and utility interconnection can follow; company does not provide tax advice .
AI/data centers: Management sees significant opportunity to partner alongside conventional generation to serve rising data center loads; strategic focus to align with diversified energy firms .
Seasonal profile: Q3 and Q4 historically strongest on revenue and cash generation; management reiterates no quarterly guidance .

S&P Global consensus for Q2 2025 EPS and revenue was unavailable for SUNE; we cannot assess beat/miss vs Wall Street estimates at this time (we attempted to fetch “Primary EPS Consensus Mean” and “Revenue Consensus Mean” for Q2 2025; no consensus values were returned).*
Actuals: Revenue $13.06M and Adjusted EBITDA $(0.99)M were reported; estimate comparisons are not possible due to missing consensus .

*Values retrieved from S&P Global.

Operational progress: Margin expansion and SG&A discipline are evident; Adjusted EBITDA trajectory improving, with backlog suggesting stronger H2 execution .
Balance sheet repair: 61% debt reduction, lower interest burden, and warrant termination simplify the capital stack and reduce dilution risk .
Near‑term demand tailwinds: Section 25D sunset under OBBBA is pulling forward residential installs; commercial backlog growing with 65% realization targeted by year‑end .
Strategic pivot: Management is preparing for a TPO‑led residential model and seeking alignment with AI/crypto/data‑center power demand to diversify revenue .
Execution risks: Hawaii revenue softness and NY utility delays could impact timing; ATM program ($30M capacity) adds funding flexibility but may be an overhang .
Guidance credibility: Reiterated FY25 sales and Adjusted EBITDA reflect confidence in backlog and cost actions; watch for quarterly conversion of projects and cash build .
Policy watch: OBBBA implications and tariff dynamics remain fluid; management is actively lobbying and adapting, but estimate benchmarking is constrained by lack of consensus data .