Spruce Power Reports First Quarter 2025 Results

Spruce Power Holding Corporation (NYSE: SPRU) (“Spruce” or the “Company”), a leading owner and operator of distributed solar energy assets across the United States, today reported financial results for the first quarter ended March 31, 2025.

First Quarter 2025 Business Highlights

• Revenues of $23.8 million, up 30% from the year-earlier period
• Net loss attributable to stockholders of $15.3 million
• Operating EBITDA of $12.3 million, up 15% from the year-earlier period
• Total cash balance of $96.5 million as of March 31, 2025
• Portfolio of approximately 85,000 home solar assets and contracts across 18 U.S. states as of March 31, 2025
• Spruce PRO servicing approximately 60,000 residential solar systems as a third party at March 31, 2025
• Combined portfolio generation of approximately 121 thousand MWh of power during the quarter

Management Commentary and Outlook

Spruce Power Chief Executive Officer Chris Hayes commented, “Our results reflected the positive impact of last year’s acquisition of rooftop assets from NJR Clean Energy Ventures. Revenue grew 30% from the year-earlier period and Operating EBITDA increased 15%. Our balance sheet remains robust with close to $100 million in cash, the majority of which is unrestricted. We are excited by the opportunities ahead of us in 2025, and are actively seeking new acquisition opportunities that meet our disciplined return hurdles. We are also ramping up the Spruce PRO servicing business, which recently signed ADT as our first third-party client. In addition, we are taking actions to manage our costs and improve profitability.”

Consolidated Financial Results

Revenues totaled $23.8 million for the first quarter of 2025, compared with $20.2 million for the fourth quarter of 2024, and $18.3 million in the year-earlier period. The year-over-year increase in first quarter 2025 revenues was primarily associated with the November 2024 acquisition of a residential solar portfolio from NJR Clean Energy Ventures ("NJR"). Improved system performance and the Spruce PRO service agreement signed with ADT in December 2024 also contributed to growth.

Total operating expenses were $25.5 million for the first quarter of 2025, compared to $21.9 million for the first quarter of 2024. Core operating expenses, which includes both selling, general & administrative expenses ("SG&A") of $3.9 million and operations & maintenance expenses ("O&M") of $14.1 million, were $18.0 million for the first quarter of 2025, up from $3.1 million, $13.5 million, and $16.6 million for the first quarter of 2024, respectively. The increases in both total operating expenses and core operating expenses in the first quarter of 2025 were primarily attributable to higher SG&A expense, which was mostly timing related, but did include the addition of a small O&M field servicing team in New Jersey, as well as higher year-over-year O&M costs in part due to last year's acquisition of rooftop assets from NJR.

Net loss attributable to stockholders was $15.3 million for the first quarter of 2025.

Management considers Operating EBITDA as a key measure in evaluating Spruce's operating performance. For the first quarter of 2025, Operating EBITDA was $12.3 million, up from $10.7 million in the prior year period. This change was primarily attributable to the NJR acquisition, partially offset by higher expenses and lower interest income. Spruce anticipates reporting Operating EBITDA improvement for all quarters in 2025 relative to the year-earlier periods.

Balance Sheet and Liquidity

The Company's total principal amount of outstanding debt as of March 31, 2025, was $723.8 million with a blended interest rate of 6.0%, including the impact of hedge arrangements. All debt consists of project finance loans that are non-recourse to the Company itself. Non-recourse debt is incurred at the project level and does not impact the Company’s cash on hand balances.

Total cash as of March 31, 2025, was $96.5 million, including cash and cash equivalents of $61.9 million and restricted cash of $34.5 million. This is down from $109.1 million of total cash as of December 31, 2024. The change in the first quarter of 2025 was primarily attributable to collections timing on the assets acquired from NJR and typical business seasonality. The Company's share repurchases (discussed below) and ongoing operational spend, including O&M cost and legal expense, also contributed.

Growth and Capital Allocation

Spruce is committed to maximizing long-term value for our shareholders through a disciplined approach that includes strategic acquisitions, capital expenditure projects, debt repayment and shareholder return initiatives.

The Company's gross portfolio value was $901.0 million in the first quarter of 2025.

During the first quarter of 2025, Spruce repurchased 0.3 million shares of common stock at a weighted average price per share of $2.70 for a total cost of $0.8 million, inclusive of transaction costs. There was $43.0 million remaining under the Company's authorized $50.0 million common share repurchase program as of March 31, 2025. The Company will continue to assess common stock repurchases on a quarterly basis with its Board of Directors.

Key Operating Metrics

As of March 31, 2025, Spruce owned cash flows from approximately 85,000 home solar assets and contracts across 18 U.S. States with an average remaining contract life of approximately 11 years. Combined portfolio generation for the first quarter of 2025 was approximately 121 thousand MWh of power. In addition, the Company is also contracted to service approximately 60,000 third-party owned home solar systems as of March 31, 2025. Gross Portfolio Value, on a PV6 basis as described below, was $901.0 million as of March 31, 2025.

Conference Call Information

The Spruce management team will host a conference call for analysts and investors to discuss its first quarter 2025 financial results and business outlook today at 2:30 p.m. Mountain Time. The conference call can be accessed live over the telephone by dialing (646) 307-1963 and referencing Conference ID 3699222. Alternatively, the call can be accessed via a live webcast accessible at https://events.q4inc.com/attendee/484654986. An audio replay will be available shortly after the call and can be accessed by dialing (800) 770-2030. The passcode for the replay is 3699222. The replay will be available until May 28, 2025.

About Spruce Power

Spruce Power is a leading owner and operator of distributed solar energy assets across the United States. We provide subscription-based services that make it easy for homeowners to benefit from rooftop solar power and battery storage. Our power as-a-service model allows consumers to access new technology without making a significant upfront investment or incurring maintenance costs. Our Company owns the cash flows from approximately 85,000 home solar assets and contracts across the United States. For additional information, please visit www.sprucepower.com.

Cautionary Note Regarding Forward Looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are characterized by the use of certain words or phrases (and their derivatives) such as “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “opportunity,” “plan,” “goals,” “target” “predict,” “potential,” “estimate,” “should,” “will,” “would,” “continue,” “likely,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements are based upon our current plans and strategies, management’s assumptions and expectations about future events, and market conditions, which management believes are reasonable as of the date of this press release, and reflect our current assessment of the risks and uncertainties related to our business and are made as of the date of this release. Forward-looking statements in this release may include, without limitation, statements made in Mr. Hayes’ quotations, statements regarding contracted portfolio value and renewal portfolio value, potential future acquisitions, potential future repurchases under the stock repurchase program, the impacts of the Company’s O&M initiatives and operational enhancements, the Company’s expected key revenue drivers, expectations with respect to Spruce PRO and its potential partnerships, and the Company's prospects for long-term growth in revenues, business cash inflows and earnings. Repurchases under the stock repurchase program will depend upon market prices, trading volume, available cash and other factors, and therefore, there is no guarantee that any repurchases will be completed or as to the number of shares that may be purchased. Although we believe that our expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of our existing knowledge of our business and operations, there can be no assurance that actual future results, performance or achievements of, or trends affecting, us will not differ materially from any future results, performance, achievements or trends expressed or implied by such forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from historical results or the forward-looking statements contained herein, including but not limited to: uncertainties relating to the solar energy industry and the risk that sufficient additional demand for home solar energy systems may not develop or take longer to develop than we anticipate; disruptions to our solar monitoring systems, which could negatively impact our revenues and increase our expenses; warranties provided by the manufacturers of equipment for our assets and maintenance obligations may be inadequate to protect us; the solar energy systems we own or may acquire may have a limited operating history and may not perform as we expect, including as a result of unsuitable solar and meteorological conditions; problems with performance of our solar energy systems may cause us to incur expenses, may lower the value of our solar energy systems, and may damage our market reputation; the ability to identify and complete future acquisitions or strategic relationships and the ability to integrate strategic acquisitions; the ability to develop and market new products and services; changes in, and our compliance with, laws and regulations affecting our business; the highly competitive nature of the Company’s business and markets; the ability to manage our growth effectively or grow by expanding our market penetration or acquiring additional home solar portfolios; the ability to execute on and consummate business plans in anticipated time frames; litigation, complaints, product liability claims or other claims, government investigations and/or adverse publicity; cost increases or shortages in the components or chassis necessary to support the Company’s products and services, including due to tariffs or trade restrictions; developments in technology or improvements in distributed solar energy generation and related technologies or components may materially adversely affect demand for our offerings; a material reduction in the retail price of traditional utility generated electricity, electricity from other sources or renewable energy credits; we may require additional financing to support the development of our business and implementation of our growth strategy; we are subject to risks relating to our outstanding debt, including risks relating to rising interest rates and the risk that we may not have sufficient cash flow to pay or refinance our debt; the impact of natural disasters and other events beyond our control, such as hurricanes, wildfires or pandemics, on the Company’s business, results of operations, financial condition, regulatory compliance and customer experience; cybersecurity risks; the loss or transition of key employees or senior management or the Company’s inability to attract and retain qualified personnel; failure to remediate the Company’s previously identified material weakness in the Company’s internal control over financial reporting, the identification of additional material weaknesses, or failure to maintain an effective system of internal control; general economic, financial, legal, political and business conditions, supply chain constraints and changes in domestic and foreign markets; the availability of capital and additional financing; economic conditions, including market interest rates, inflation, recessionary conditions and U.S. and global trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom; governmental investigations, litigation, complaints, other claims, or adverse publicity, which may cause us to incur significant expense, hinder execution of business and growth strategy, or impact the price of our common stock; changes in tax laws, which may materially adversely affect our business, prospects, financial condition, and operating results; our ability to use net operating loss carryforwards and other tax attributes; risks associated with construction, regulatory compliance, risks relating to changes in, and our compliance with, laws and regulations affecting our business, and other contingencies; violations of export control and/or economic sanctions laws and regulations; the adequacy of our insurance coverage; competition from traditional energy companies as well as solar and other renewable energy companies; and the other risks discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 31, 2025, subsequent Quarterly and Annual Reports on Form 10-Q and Form 10-K, respectively, and other documents that the Company files with the SEC in the future. These factors are not exhaustive. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can the Company assess the impact of all such risk factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from the results implied by these forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. The Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Use of Non-GAAP Financial Information

This press release includes references to certain non-GAAP financial measures. We believe that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide meaningful supplemental information for investors regarding the performance of our business and facilitate a meaningful evaluation of current period performance on a comparable basis with prior periods. Our management uses these non-GAAP financial measures in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter, without the impact of items or events that may obscure trends in our underlying financial performance. These non-GAAP financial measures should not be considered in isolation and should be considered as a supplement to, and not as a substitute for or superior to, the GAAP financial measures presented in this press release, our financial statements, and other publicly filed reports. This prospective financial information was not prepared with a view toward compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information or U.S. GAAP with respect to forward-looking financial information. The non-GAAP measures presented herein may not be comparable to similarly titled measures presented by other companies.

Definitions of Non-GAAP Financial Information

Earnings (Loss) Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”):

We define EBITDA as our consolidated net income (loss) and adding back interest expense, net, income taxes, and depreciation and amortization. We believe EBITDA provides meaningful information as to the performance of our business and therefore we use it to supplement our GAAP reporting. We believe that Adjusted EBITDA, which excludes certain identified items that we do not consider to be part of our ongoing business, improves the comparability of year-to-year results, and is more representative of our underlying performance. Management uses this information to assess and measure the performance of our operating segment. We have chosen to provide this supplemental information to investors, analysts and other interested parties to enable them to perform additional analyses of operating results, to illustrate the results of operations giving effect to the non-GAAP adjustments shown in the below reconciliations, and to provide an additional measure of performance.

Operating EBITDA:

We define Operating EBITDA as Adjusted EBITDA plus proceeds from investment in master lease agreement, net, proceeds from buyouts / prepayments and interest earned on cash investments. Proceeds from investment in master lease agreement, net, represent cash flows from the Company's Spruce Power 4 Portfolio, which holds the 20-year use rights to customer payment streams of approximately 22,500 solar lease and power purchase agreements, net of servicing costs. Proceeds from buyouts / prepayments represent cash inflows from the early buyout of customer solar contracts and cash inflows from the prepayment of customer solar contracts. Interest earned on cash investments represent cash interest received on investments in money market funds / U.S. Treasury securities.

Core Operating Expenses:

We define Core Operating Expenses as the sum of our SG&A and our O&M expenses.

Portfolio Value Metrics:

We believe Portfolio Value Metrics are helpful to management, investors, and analysts to understand the value of our business and to evaluate the estimated remaining value of our customer contracts, including present value implied from future, uncontracted sales of solar renewable energy credits ("SRECs") generated from assets that the Company owns today.

• Gross Portfolio Value reflects the remaining projected net cash flows from current customers discounted at 6% (“PV6”)
• Projected cash flows include the customer’s initial agreement plus renewal

($ in millions)	As of March 31, 2025
Contracted Portfolio Value (1)	$	786
Renewal Portfolio Value (2)		71
Uncontracted Renewable Energy Credits (3)		44
Gross Portfolio Value (4)	$	901

(1) Contracted Portfolio Value represents the present value of the remaining net cash flows discounted at 6% per annum during the initial term of the Company’s customer agreements as of the measurement date. It is calculated as the present value of cash flows discounted at 6% that the Company expects to receive from customers in future periods as set forth in customer agreements, after deducting expected operating and maintenance costs, equipment replacements costs, distributions to tax equity partners in consolidated joint venture partnership flip structures, and distributions to third-party project equity investors. The calculation includes cash flows the Company expects to receive in future periods from state incentive and rebate programs, contracted sales of solar renewable energy credits, and awarded net cash flows from grid service programs with utilities or grid operators.

(2) Renewal Portfolio Value is the forecasted net present value the Company would receive upon or following the expiration of the initial customer agreement term, but before the 30th anniversary of the system’s activation in the form of cash payments during any applicable renewal period for customers as of the measurement date. The Company calculates the Renewal Portfolio Value amount at the expiration of the initial contract term assuming that, on average, Spruce's customers choose to renew 50% of the time at a contract rate representing a 35% discount to the contract rate in effect at the end of the initial contract term, for a term of 7-years.

(3) Uncontracted sales of SRECs based on forward market REC pricing curves, adjusted for liquidity discounts.

(4) Gross Portfolio Value represents the sum of Contracted Portfolio Value, Renewal Portfolio Value and Uncontracted SRECs.

Spruce Power Holding Corporation
Condensed Consolidated Statements of Operations (Unaudited)
For the Three Months Ended March 31, 2025 and 2024
	Three Months Ended March 31,
(In thousands, except per share and share amounts)		2025				2024
Revenues	$	23,818			$	18,287
Operating expenses:
Cost of revenues - solar energy systems depreciation		7,285				5,735
Cost of revenues - operations and maintenance		3,896				3,133
Selling, general and administrative expenses		14,100				13,469
Litigation settlements		566				—
Gain on asset disposal, net		(335	)			(453	)
Total operating expenses		25,512				21,884
Loss from operations		(1,694	)			(3,597	)
Other (income) expense:
Interest income		(5,267	)			(5,386	)
Interest expense, net		12,667				10,942
Change in fair value of warrant liabilities		—				(9	)
Change in fair value of interest rate swaps		6,237				(6,409	)
Other income, net		(21	)			(286	)
Net loss from continuing operations		(15,310	)			(2,449	)
Net loss from discontinued operations		(4	)			(1	)
Net loss		(15,314	)			(2,450	)
Less: Net income attributable to noncontrolling interests		24				4
Net loss attributable to stockholders	$	(15,338	)		$	(2,454	)
Net loss from continuing operations per share, basic and diluted	$	(0.84	)		$	(0.13	)
Net loss from discontinued operations per share, basic and diluted	$	—			$	—
Net loss attributable to stockholders per share, basic and diluted	$	(0.84	)		$	(0.13	)
Weighted-average shares outstanding, basic and diluted		18,187,637				19,098,246

Spruce Power Holding Corporation
Calculation of Core Operating Expenses
For the Three Months Ended March 31, 2025 and 2024
	Three Months Ended March 31,
(In thousands)	2025			2024
Calculation of core operating expenses:
Cost of revenues - operations and maintenance	$	3,896		$	3,133
Selling, general and administrative expenses		14,100			13,469
Core operating expenses	$	17,996		$	16,602

Spruce Power Holding Corporation
Reconciliation of Non-GAAP Financial Measures
For the Three Months Ended March 31, 2025 and 2024
	Three Months Ended March 31,
(In thousands)		2025				2024
Reconciliation of Net Loss to EBITDA, Adjusted EBITDA, and Operating EBITDA
Net loss attributable to stockholders	$	(15,338	)		$	(2,454	)
Net income attributable to noncontrolling interests		24				4
Interest income		(5,267	)			(5,386	)
Interest expense, net		12,667				10,942
Depreciation and amortization		6,537				4,988
EBITDA		(1,377	)			8,094
Net loss from discontinued operations		4				1
Legal charges related to SEC investigation and shareholder lawsuits		—				720
Gain on asset disposal, net		(335	)			(453	)
Change in fair value of interest rate swaps		6,237				(6,409	)
Meter upgrade campaign		63				258
Other one-time costs		285				163
Change in fair value warrant liabilities		—				(9	)
Stock based compensation		826				830
Bad debt expense		244				517
Accretion expense		80				59
Non-recurring acquisition/divestment expenses		135				—
Adjusted EBITDA		6,162				3,771
Proceeds from investment in master lease agreement, net		3,842				3,863
Proceeds from buyouts / prepayments		1,541				1,431
Interest earned on cash investments		745				1,638
Operating EBITDA	$	12,290			$	10,703

Spruce Power Holding Corporation
Condensed Consolidated Balance Sheets (Unaudited)
March 31, 2025 and December 31, 2024
		As of
(In thousands, except share and per share amounts)		March 31, 2025				December 31, 2024
Assets
Current assets
Cash and cash equivalents		$	61,924			$	72,802
Restricted cash			34,545				36,346
Accounts receivable, net of allowance of $0.6 million and $0.8 million as of March 31, 2025 and 2024, respectively			19,545				15,010
Interest rate swap assets, current			5,408				6,258
Prepaid expenses and other current assets			4,448				6,014
Total current assets			125,870				136,430
Investment related to SEMTH master lease agreement			137,621				136,942
Property and equipment, net			582,849				589,014
Interest rate swap assets, non-current			14,240				18,414
Intangible assets, net			8,675				8,957
Deferred rent assets			3,975				3,717
Right-of-use assets, net			4,502				4,750
Other assets			255				255
Total assets		$	877,987			$	898,479
Liabilities, noncontrolling interests and stockholders’ equity
Current liabilities
Accounts payable			775				987
Non-recourse debt, current		$	28,347			$	28,310
Accrued expenses and other current liabilities			28,096				28,125
Deferred revenue, current			1,199				1,194
Lease liability, current			841				892
Interest rate swap liabilities, current			90				—
Current liabilities of discontinued operations			48				61
Total current liabilities			59,396				59,569
Non-recourse debt, non-current			671,775				677,021
Deferred revenue, non-current			2,946				2,790
Lease liability, non-current			4,631				4,848
Unfavorable solar renewable energy agreements, net			3,295				4,134
Interest rate swap liabilities, non-current			1,508				385
Other long-term liabilities			3,620				3,540
Long-term liabilities of discontinued operations			37				40
Total liabilities			747,208				752,327
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.0001 par value; 350,000,000 shares authorized at March 31, 2025 and December 31, 2024; 19,431,994 and 18,040,834 shares issued and outstanding at March 31, 2025, respectively, and 19,403,262 and 18,311,054 shares issued and outstanding at December 31, 2024, respectively			2				2
Additional paid-in capital			479,192				478,366
Accumulated deficit			(343,715	)			(328,377	)
Treasury stock at cost, 1,391,160 shares and 1,092,208 at March 31, 2025 and December 31, 2024, respectively			(7,085	)			(6,277	)
Noncontrolling interests			2,385				2,438
Total stockholders’ equity			130,779				146,152
Total liabilities, noncontrolling interests and stockholders’ equity		$	877,987			$	898,479

 

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