Shares of Spruce Power Holding Corporation (SPRU) have surged 73% since the company announced its third-quarter 2025 results, sharply outperforming the S&P 500 index’s 1.6% decline over the same period. Over the past month, the stock has gained 79% compared with the S&P 500’s modest 0.2% increase, reflecting strong investor optimism surrounding the company’s recent performance and outlook.Spruce Power incurred a third-quarter 2025 net loss of 5 cents per share, narrower than a loss of $2.88 per share record ...

Group 1: Leap Therapeutics, Inc. (LPTX) - Leap Therapeutics, Inc. experienced a significant stock price surge of approximately 441.49%, closing at $2.36 [1][2] - The company traded an unusually high volume of 610,713,569 shares, indicating strong news flow or shifting expectations around its pipelines and partnerships [2] - The rise in stock price is often associated with developments such as trial readouts, regulatory milestones, or strategic collaborations that can reshape investor outlook [2] Group 2: Quhuo Limited (QH) - Quhuo Limited's stock price increased by 68.01% to $1.39, with a trading volume of 31,416,317 shares [1][3] - The rally may reflect renewed confidence in the company's growth prospects, particularly following a collaboration with the "Better Life No.1 Collective Fund Trust Plan" [3] - The company's wide 52-week price range, from $0.735 to $169.11, highlights the potential for price volatility driven by sentiment shifts in smaller-cap stocks [3] Group 3: Creative Media & Community Trust Corporation (CMCT) - Creative Media & Community Trust Corporation's stock climbed 61.48% to $8.09, with 46,202,384 shares traded [1][4] - Investor enthusiasm is attributed to the company's definitive agreement to sell its lending division, indicating a focus on core real estate operations and potential balance-sheet flexibility [4] Group 4: Spruce Power Holding Corporation (SPRU) - Spruce Power Holding Corporation's stock rose 45.98% to $4.45, supported by a trading volume of 6,006,670 shares [1][5] - The company reported third-quarter 2025 revenue of $30.7 million, a 44% year-over-year increase, and a cash balance of $98.8 million, reflecting improving scale and liquidity [5] Group 5: Market Trends - The sharp advances across biotechnology, real estate, and clean energy sectors highlight the convergence of sector-specific catalysts, capital strategy decisions, and improving fundamentals [6] - Market participants are expected to monitor for follow-through events such as additional clinical data, deal closings, or sustained cash-flow trends to assess the durability of these gains [6]

Financial Performance - Revenues for Q3 2025 reached $30,727,000, a 43.5% increase from $21,378,000 in Q3 2024[17] - The net loss attributable to stockholders for Q3 2025 was $860,000, compared to a loss of $53,529,000 in Q3 2024, indicating improved financial performance[17] - The company reported a net loss from continuing operations of $677,000 for Q3 2025, a significant improvement from a loss of $53,550,000 in Q3 2024[17] - For the three months ended September 30, 2025, total revenues were $30.7 million, a 43.5% increase from $21.4 million in the same period of 2024[53] - For the nine months ended September 30, 2025, total revenues reached $87.8 million, up 41.9% from $61.9 million in the same period of 2024[53] - The company reported a loss of $5.8 million for the nine months ended September 30, 2025, related to interest rate swaps, compared to a gain of $5.7 million for the same period in 2024[92] - Net loss attributable to stockholders improved to $19.2 million for the nine months ended September 30, 2025, a 70% reduction from $64.6 million in 2024[172] Operating Expenses - Operating expenses totaled $22,243,000 in Q3 2025, down from $58,537,000 in Q3 2024, reflecting a significant reduction in costs[17] - The company incurred total expenses of $31.4 million for the three months ended September 30, 2025, compared to $74.9 million in the same period of 2024, indicating a significant reduction in expenses[127] - Total operating expenses decreased by $33.7 million, or 32%, to $72.1 million for the nine months ended September 30, 2025 from $105.8 million in 2024[161] - Selling, general and administrative expenses decreased by $0.6 million, or 4%, to $12.9 million for the three months ended September 30, 2025, primarily due to lower professional fees[155] Assets and Liabilities - Total assets decreased to $857,057,000 as of September 30, 2025, from $898,479,000 at the end of 2024[16] - Current liabilities increased to $247,093,000 as of September 30, 2025, compared to $59,569,000 at December 31, 2024, primarily due to a rise in non-recourse debt[16] - The total stockholders' equity as of September 30, 2025, was $124,854,000, a decrease from $143,714,000 at the end of 2024[16] - Cash and cash equivalents decreased to $53,645,000 as of September 30, 2025, down from $72,802,000 at December 31, 2024[16] - Total non-recourse debt as of September 30, 2025, was $685.2 million, down from $705.3 million as of December 31, 2024, representing a reduction of approximately 2.4%[86] Cash Flow - Cash and cash equivalents as of September 30, 2025, were $53.6 million, down from $113.7 million as of September 30, 2024[41] - Total cash, cash equivalents, and restricted cash amounted to $98.8 million as of September 30, 2025, down from $150.0 million in the same period of 2024[41] - Net cash used in continuing operating activities improved by $28.1 million in the nine months ended September 30, 2025 compared to the same period in 2024[180] - The net cash provided by continuing investing activities was $16.9 million for the nine months ended September 30, 2025, primarily from proceeds under the SEMTH Master Lease[181] - Net cash used in continuing financing activities for the nine months ended September 30, 2025, was $27.1 million, primarily for $25.0 million in non-recourse debt repayments and $1.8 million for share repurchases[183] Shareholder Information - The company had 20,036,082 shares issued and outstanding as of September 30, 2025, compared to 18,165,255 shares at December 31, 2024[16] - The company repurchased 0.8 million shares of common stock at a weighted-average price of $2.33 per share for a total of $1.8 million during the nine months ended September 30, 2025[130] - As of September 30, 2025, the company had $42.0 million remaining available for future share repurchases under its share repurchase program[130] Legal and Regulatory Matters - The company has ongoing investigations from state attorneys general regarding its billing and operations practices, but it is currently unable to estimate potential losses related to these matters[115] - The company accrued a settlement amount of $19.5 million related to a securities class action, with a net payment of $15.0 million made in February 2024[112] - The company has been involved in legal proceedings, but management believes these will not have a significant adverse effect on its financial position[110] Internal Controls - The company identified a material weakness in internal control over financial reporting, specifically in the control environment and control activities related to revenue recognition[193][195] - As of September 30, 2025, the company did not maintain an effective control environment due to insufficient qualified personnel to perform control activities[194] - The company is implementing a comprehensive remediation plan to address the identified material weaknesses, including hiring qualified personnel with specialized skill sets[198] - Management believes significant progress is being made toward achieving effectiveness of internal controls and disclosure controls[199] Acquisitions and Investments - The Company acquired approximately 9,800 solar energy systems for $132.5 million in November 2024, with an average remaining contract life of approximately 11 years[77] - During the nine months ended September 30, 2025, the Company acquired 199 additional solar energy systems for approximately $4.8 million in cash[78] - The total consideration for the Initial NJR Acquisition was allocated entirely to the solar energy systems, with a fair value estimated at approximately $132.5 million[79] - The company entered into a non-recourse credit agreement providing a term loan of approximately $109.8 million to partially fund the Initial NJR Acquisition[145]

Financial Performance - Revenues for Q3 2025 reached $30.7 million, a 44% increase from $21.4 million in Q3 2024[4] - Operating EBITDA for Q3 2025 was $26.2 million, up 48% from $17.7 million in the prior year period[9] - Net loss attributable to stockholders improved to $(0.9) million, compared to $(53.6) million in the year-earlier period[4] - Revenues for the three months ended September 30, 2025, were $30.727 million, an increase of 43.5% compared to $21.378 million in the same period of 2024[32] - Operating EBITDA for the three months ended September 30, 2025, was $26.214 million, up from $17.748 million in the same period of 2024, representing a 47.5% increase[38] - The company reported a net loss attributable to stockholders of $860 thousand for the three months ended September 30, 2025, compared to a net loss of $53.529 million in the same period of 2024[32] - Net loss for the nine months ended September 30, 2025, was $18,895,000, a significant improvement from a net loss of $64,577,000 in the same period of 2024[43] Cash and Debt Management - Total cash balance as of September 30, 2025, was $98.8 million, or $5.44 per share, an increase of $8.3 million from the prior quarter[4] - Cash and cash equivalents as of September 30, 2025, were $53.645 million, a decrease from $72.802 million as of December 31, 2024[40] - Total cash and cash equivalents and restricted cash at the end of the period was $98,769,000, down from $149,981,000 at the beginning of the period[44] - Total principal amount of outstanding debt was $705.6 million with a blended interest rate of 6.1%[10] - Non-recourse debt, current, increased significantly to $218.480 million as of September 30, 2025, compared to $28.310 million at the end of 2024[40] - Cash paid for interest increased to $28,562,000 compared to $22,021,000 in the prior year, indicating higher financing costs[44] Operational Efficiency - Operations & Maintenance (O&M) expenses decreased by 53% year-over-year to $1.8 million[4] - Selling, General and Administrative (SG&A) expenses declined by 4% year-over-year to $12.9 million[4] - Total operating expenses decreased significantly to $22.243 million from $58.537 million year-over-year, primarily due to a reduction in litigation settlements and impairment of goodwill[32] - Core Operating Expenses for the three months ended September 30, 2025, were $14.789 million, down from $17.449 million in the same period of 2024, indicating a 19% reduction[34] - Cash used in continuing operating activities decreased to $124,000 from $28,266,000 year-over-year, indicating improved operational efficiency[43] Asset Management - The company had total assets of $857.057 million as of September 30, 2025, down from $898.479 million at the end of 2024[40] - The company owns approximately 85,000 home solar assets and customer contracts across 18 U.S. states[14] - The Contracted Portfolio Value as of September 30, 2025, was $753 million, contributing to a Gross Portfolio Value of $872 million[27] - Combined portfolio generation for Q3 2025 was approximately 190,081 MWh of power[14] Strategic Initiatives - The company announced a strategic initiative to reduce SG&A costs through workforce reduction and office closures[3] Investment Activities - Net cash provided by continuing investing activities was $16,902,000, down from $23,398,000 in the previous year, reflecting a decrease in investment activity[44] - The company made cash payments for acquisitions totaling $4,820,000 during the period[44] Other Financial Metrics - Adjusted Cash Flow from Operations for the three months ended September 30, 2025, was $20.157 million, compared to $9.892 million in the same period of 2024, reflecting a 103% increase[36] - Stock-based compensation increased to $2,122,000 from $1,759,000, reflecting a rise in employee compensation expenses[43] - Depreciation and amortization expense rose to $22,857,000 from $18,293,000, indicating increased asset utilization[43] - The company reported a gain on disposal of assets of $1,069,000, down from $2,055,000 in the previous year[43] - The company experienced a change in fair value of interest rate swaps, resulting in a gain of $11,938,000 compared to $8,153,000 in the prior year[43]

Financial Data and Key Metrics Changes - The company achieved positive free cash flow, increasing total cash to $98.8 million, up from $90.4 million at the start of the quarter [5] - Revenue grew 44% year over year, reaching $30.7 million, primarily due to the acquisition of rooftop assets and growth in solar renewable energy credits [5][20] - Operating EBITDA increased by 48% year over year to $26.2 million, reflecting higher lease and SREC revenues [22] Business Line Data and Key Metrics Changes - Core operating expenses, including SG&A and O&M, totaled $14.8 million, down 15% from the prior year period [20] - O&M expenses were $1.8 million, a 51% decline from the previous year [21] - SREC revenue for the quarter was approximately $6.5 million, contributing to the overall revenue [26] Market Data and Key Metrics Changes - The residential solar market faced challenges, with installations declining 9% year over year [7] - Despite the market slowdown, the company believes it has significant growth potential, owning and managing approximately 85,000 home solar assets [7][8] Company Strategy and Development Direction - The company is focusing on three key growth opportunities: acquisition of installed systems, programmatic off-take partnerships, and expansion of the Spruce Pro servicing business [9] - The strategy includes aggressive cost containment measures, aiming for approximately $20 million in annual savings [15] - The company is positioned to benefit from the shift towards third-party ownership models in the solar market [8][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilient business model, which is not dependent on aggressive customer acquisition or tax credits [6] - The company anticipates continued improvement in cash flow and operational efficiency, with a focus on sustainable growth [17][18] Other Important Information - The company does not need to refinance any non-recourse debt in 2025, and communication with creditors remains open [17] - Total debt principal decreased to $705.6 million, down from $730.6 million at the end of 2024 [25] Q&A Session Summary Question: Breakdown of revenue, specifically SREC revenue - SREC revenue was about $6.5 million of the total $30 million for the quarter, with additional revenues from PPA and lease agreements [26] Question: Fourth quarter revenue expectations considering seasonality - Management noted that seasonality affects revenue, particularly in the northern hemisphere, but did not provide specific guidance [27] Question: Capital allocation and deal valuation - The company is evaluating both programmatic deals and larger M&A opportunities, focusing on factors like homeowner credit scores and system technology [28][29]

Core Insights - Zacks Investment Research has initiated coverage of Spruce Power Holding Corporation (SPRU) with a Neutral recommendation, highlighting the company's balance between steady cash flows and challenges from policy changes and a leveraged capital structure [1] Business Model and Financial Performance - Spruce Power operates approximately 85,000 long-term residential solar leases and power purchase agreements (PPAs), with an average remaining contract life of around 11 years, providing stable revenue visibility [2] - In Q2 2025, revenues increased by 48% year over year, while EBITDA rose by 71% to $24.6 million, attributed to disciplined asset management and a focus on existing portfolios [2] - The company has a history of growth through acquisitions, adding 67,000 contracts since 2018 through 14 deals, which have yielded mid-teen internal rates of return and diversified its solar footprint across 18 states [3] Operational Efficiency - Management has demonstrated a commitment to efficiency, with operations and maintenance expenses decreasing by 52% year over year in Q2 2025, resulting in an adjusted EBITDA margin of 52% [4] - The Spruce PRO platform has created a new revenue stream by offering billing, monitoring, and maintenance services for third-party portfolios, showcasing asset-light growth potential [5] Capital Management - Spruce announced a $50 million share repurchase program extending through mid-2027, reflecting confidence in cash generation and management's intent to return capital to shareholders [6] Challenges and Risks - The phaseout of federal solar investment tax credits is expected to limit acquisition opportunities, a key driver of Spruce's growth [7] - The company carries $717.1 million in total debt, with rising interest costs impacting earnings [7] - Spruce's net portfolio value decreased to $170 million in Q2 2025, raising concerns about acquisition returns and cash flow durability, despite rising revenues and EBITDA [8] - The company's shares have underperformed compared to peers due to concerns over leverage, regulatory risks, and cash flow sustainability [9] Investment Outlook - Spruce Power offers exposure to stable, long-term solar cash flows, operational efficiency, and a proven acquisition strategy, but faces challenges from regulatory changes, high leverage, and valuation concerns [10]

PART I [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents Spruce Power's unaudited condensed consolidated financial statements, detailing financial position, operations, equity changes, and cash flows, with key accounting notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $862.6 million, while negative working capital of $120.2 million resulted from reclassifying $189.8 million of non-recourse debt to current liabilities Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$862,631** | **$898,479** | | Cash and cash equivalents | $53,511 | $72,802 | | Property and equipment, net | $577,625 | $589,014 | | **Total Liabilities** | **$735,221** | **$752,327** | | Non-recourse debt, current | $215,624 | $28,310 | | Non-recourse debt, non-current | $479,424 | $677,021 | | **Total Stockholders' Equity** | **$124,987** | **$143,714** | - The company's working capital turned significantly negative to **$(120.2) million** as of June 30, 2025, from a positive **$76.9 million** at year-end 2024. This was primarily driven by the reclassification of the SP1 Facility debt to current liabilities[19](index=19&type=chunk)[36](index=36&type=chunk) [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenues increased 48% to $33.2 million with a narrowed net loss of $3.0 million, while six-month revenues grew 40% to $57.1 million but net loss widened to $18.3 million due to fair value changes Quarterly Results of Operations (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Revenues** | **$33,239** | **$22,481** | | Income (loss) from operations | $8,902 | $(3,360) | | Net loss attributable to stockholders | $(2,966) | $(8,578) | | Net loss per share, basic and diluted | $(0.17) | $(0.45) | Six-Month Results of Operations (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Revenues** | **$57,057** | **$40,768** | | Income (loss) from operations | $7,208 | $(6,957) | | Net loss attributable to stockholders | $(18,304) | $(11,032) | | Net loss per share, basic and diluted | $(1.01) | $(0.57) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Total stockholders' equity decreased from $143.7 million to $125.0 million due to net loss and $1.8 million in share repurchases - Total stockholders' equity declined from **$143.7 million** on December 31, 2024, to **$125.0 million** on June 30, 2025[23](index=23&type=chunk) - During the six months ended June 30, 2025, the company repurchased **778,619 shares** for a total cost of **$1.8 million**[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to $11.5 million for H1 2025, with overall cash, cash equivalents, and restricted cash decreasing by $18.7 million Six-Month Cash Flow Summary (in thousands) | Cash Flow Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(11,467) | $(27,302) | | Net cash provided by investing activities | $8,296 | $13,487 | | Net cash used in financing activities | $(15,520) | $(8,917) | | **Net change in cash** | **$(18,691)** | **$(22,732)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes cover the 'going concern' warning due to the SP1 Facility debt maturity, NJR acquisitions, $695.0 million in non-recourse debt, and legal settlements - The company's debt obligations under the SP1 Facility mature on April 30, 2026. These conditions, along with negative working capital and recurring net losses, raise substantial doubt about the company's ability to continue as a going concern. Management believes it can refinance this debt[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - During the six months ended June 30, 2025, the company acquired **192** additional solar energy systems as part of the NJR Acquisitions for approximately **$4.5 million** in cash[84](index=84&type=chunk) - As of June 30, 2025, total non-recourse debt was **$695.0 million**, with the SP1 Facility of **$189.8 million** due in April 2026[94](index=94&type=chunk) - The company settled a class action lawsuit for **$4.75 million** in April 2025 and paid **$1.0 million** in attorney fees for another settled matter in September 2024[121](index=121&type=chunk)[122](index=122&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting 48% Q2 revenue growth, narrowed net loss, and the 'going concern' risk related to the SP1 debt facility maturity [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Q2 2025 revenues rose 48% to $33.2 million with net loss narrowing to $3.0 million, while six-month revenues grew 40% to $57.1 million but net loss widened to $18.3 million due to interest rate swap changes Comparison of Three Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | **$33,239** | **$22,481** | **$10,758** | **48%** | | Cost of revenues - O&M | $2,137 | $4,474 | $(2,337) | (52)% | | SG&A expenses | $15,099 | $16,701 | $(1,602) | (10)% | | **Net loss attributable to stockholders** | **$(2,966)** | **$(8,578)** | **$5,612** | **(65)%** | Comparison of Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | **$57,057** | **$40,768** | **$16,289** | **40%** | | **Net loss attributable to stockholders** | **$(18,304)** | **$(11,032)** | **$(7,272)** | **66%** | - The increase in Q2 revenue was primarily due to **$3.0 million** in incremental SLA revenues and a **$5.9 million** increase in SREC revenues, largely from the NJR Acquisitions[158](index=158&type=chunk) - The wider net loss for the six-month period was primarily driven by a **$10.3 million** expense from the change in fair value of interest rate swaps in 2025, compared to a **$3.6 million** income from the same item in 2024[177](index=177&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) The company had negative working capital of $120.2 million and $90.5 million in cash, with management planning to refinance the SP1 Facility to address going concern risk - The company had negative working capital of **$120.2 million** as of June 30, 2025, resulting from the current classification of the SP1 Facility debt[178](index=178&type=chunk) - Total cash, cash equivalents, and restricted cash stood at **$90.5 million** as of June 30, 2025[178](index=178&type=chunk) - Management's plans to refinance the SP1 Facility are central to alleviating the substantial doubt about the company's ability to continue as a going concern[181](index=181&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Spruce Power is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Spruce Power is exempt from providing quantitative and qualitative disclosures about market risk[192](index=192&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness in internal control over financial reporting, with remediation efforts underway - Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness in internal control over financial reporting[194](index=194&type=chunk) - The material weakness stems from deficiencies in the control environment (insufficient qualified personnel) and control activities (ineffective controls over revenue recognition)[197](index=197&type=chunk)[198](index=198&type=chunk) - A remediation plan is underway, which includes hiring qualified personnel, providing training on the COSO framework, and designing and implementing new controls related to revenue recognition[201](index=201&type=chunk)[202](index=202&type=chunk)[206](index=206&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 12 of the financial statements for a description of material pending legal proceedings, including class actions and state investigations - For details on legal proceedings, the report refers to Note 12 in the financial statements[208](index=208&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) A key risk factor is the loss or transition of senior management, which could create uncertainty and negatively impact business operations and strategy execution - A key risk is the loss or transition of senior management, highlighted by the recent turnover of the CEO in 2024 and CFO in 2025[210](index=210&type=chunk) - Management transitions may create uncertainty, divert resources, and negatively impact the company's ability to operate effectively and execute its strategies[211](index=211&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company repurchased 479,667 shares for $1.0 million, with $42.0 million remaining available under the program extended to May 15, 2027 Share Repurchases for Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 388,459 | $2.10 | | May 2025 | 91,208 | $2.03 | | June 2025 | 0 | $0.00 | | **Total Q2** | **479,667** | | - As of June 30, 2025, approximately **$42.0 million** remained available under the share repurchase program[216](index=216&type=chunk) - The Board of Directors extended the Repurchase Program to expire on May 15, 2027[137](index=137&type=chunk)[215](index=215&type=chunk) [Item 3. Defaults Upon Senior Securities](index=52&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities during the period - None[217](index=217&type=chunk) [Item 4. Mine Safety Disclosures](index=52&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[218](index=218&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the quarter[219](index=219&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The exhibits include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, as well as Inline XBRL documents[220](index=220&type=chunk)

Summary of Spruce Power Holding (SPRU) FY Conference Call Company Overview - **Company**: Spruce Power Holding (SPRU) - **Industry**: Solar Energy - **Date of Conference**: August 12, 2025 Key Points and Arguments 1. **Financial Position**: At the end of Q2, Spruce Power reported $5.07 in cash per share, with the majority being unrestricted, while trading at approximately $1.45 per share, indicating a significant market inefficiency [4][34] 2. **Operational Efficiency**: The company has successfully reduced Operations and Maintenance (O&M) costs by 52% year-over-year, demonstrating effective cost management [10][31] 3. **Market Position**: Spruce Power owns 85,000 solar rooftops out of approximately 5 million residential solar installations in the U.S., positioning itself as a significant player in the market [12][43] 4. **Growth Strategy**: The company plans to grow through mergers and acquisitions (M&A), focusing on acquiring portfolios from utilities and financial firms that are divesting their solar assets [13][44] 5. **Revenue Growth**: Q2 revenue increased by 48% year-over-year to $33 million, while EBITDA rose by 71% to $25 million [19][20] 6. **Cash Flow**: The company achieved positive adjusted cash flow from operations in Q2, marking a significant milestone [30][31] 7. **Market Dynamics**: The current administration's focus on fossil fuels is seen as a challenge for the solar industry, but Spruce Power remains insulated due to its lack of dependence on tax credits and incentives [22][42] 8. **Service Model**: The introduction of Spruce Pro, a service model offering managed services for solar installations, is expected to enhance margins and leverage existing infrastructure without significant capital investment [17][25] 9. **Debt Management**: The company has no corporate debt and operates on a project finance basis, with all debt being non-recourse at the project level [26][27] 10. **Future Outlook**: The company is optimistic about the potential for lower interest rates, which could benefit refinancing efforts and overall financial health [27][41] Additional Important Insights - **Market Inefficiency**: The significant discrepancy between cash per share and stock price suggests potential for investment opportunities [4][34] - **Customer Base**: Approximately half of Spruce Power's rooftops operate under Power Purchase Agreements (PPAs) indexed to utility prices, providing a natural revenue driver as utility prices rise [22] - **Competitive Landscape**: The current downturn in the solar market has led to fewer bidders for solar portfolios, creating opportunities for Spruce Power to acquire assets at favorable terms [48] This summary encapsulates the essential insights from the conference call, highlighting Spruce Power's financial health, operational strategies, and market positioning within the solar energy industry.

Financial Data and Key Metrics Changes - The company reported a 48% increase in revenue year-over-year, reaching $33.2 million in Q2 2025, up from $22.5 million in the prior year period [6][30] - Operating EBITDA grew by 71% year-over-year to $24.6 million, compared to $14.4 million in the prior year [6][33] - Core operating expenses totaled $17.2 million, down 19% from $21.2 million in the prior year [6][31] - The net loss attributable to stockholders was $3 million, an improvement from a loss of $8.6 million in the prior year [31] Business Line Data and Key Metrics Changes - The company’s operating expenses, including SG&A and O&M, decreased significantly, with O&M expenses dropping 52% year-over-year to $2.1 million [31][32] - The NJR acquisition contributed to increased lease revenues and SREC revenues, driving overall financial performance [30][33] Market Data and Key Metrics Changes - The company manages approximately 85,000 home solar assets and customer contracts, with significant room for growth in the residential solar market despite recent policy changes [10][12] - The U.S. solar market has over 5 million installations, with 97% on residential rooftops, indicating a large addressable market for the company [11] Company Strategy and Development Direction - The company aims to achieve positive free cash flow through growth in solar installations and cost containment [7] - A multi-pronged strategy includes opportunistic M&A, programmatic off-take partnerships, and expanding the Spruce Pro servicing business [14][18] - The company is focused on maximizing the value of existing solar assets through operational efficiencies and superior asset management [9][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the residential solar sector due to policy changes but emphasized the company's resilient business model [8][9] - The company expects an accelerated shift toward leases and PPAs, driven by rising utility rates and increasing power demand [14][13] - Management is confident in the ability to identify and execute new agreements that add shareholder value despite market uncertainties [23] Other Important Information - The company successfully launched a new CRM platform to enhance customer interactions and operational efficiency [25] - Total cash at the end of Q2 2025 was approximately $90.5 million, with $53.5 million being unrestricted [36] Q&A Session Summary - There were no questions during the Q2 2025 earnings call, and the session concluded without further inquiries [38]

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) Spruce Power reported strong Q2 2025 results, with **revenue up 48% to $33.2 million** and **Operating EBITDA up 71% to $24.6 million**, reflecting strategic progress | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Revenues | $33.2 million | +48% | | Operating EBITDA | $24.6 million | +71% | | O&M Expense | $2.1 million | -52% | | Net Loss Attributable to Stockholders | $3.0 million | Improved from $8.6M loss | | Total Cash Balance (as of June 30, 2025) | $90.5 million | - | | Adjusted Cash Flow generated in Operations | $9.5 million | +245% | - The company's primary strategic initiatives are scaling its portfolio of solar installations and prudently containing costs, with a key objective of generating **positive free cash flow**[3](index=3&type=chunk) - Spruce's business model as a third-party owner of existing residential solar systems generates **stable, high-margin recurring revenue** and is expected to have **minimal impact** from the H.R. 1 tax reconciliation bill[3](index=3&type=chunk)[5](index=5&type=chunk) [Financial Performance Analysis](index=3&type=section&id=Financial%20Performance%20Analysis) Q2 2025 revenue increased to **$33.2 million** from **$22.5 million** YoY, driven by portfolio acquisition and SREC revenue, narrowing net loss to **$3.0 million** | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $33.2 million | $22.5 million | | Total Operating Expenses | $24.3 million | $25.8 million | | Net Loss Attributable to Stockholders | $3.0 million | $8.6 million | - The year-over-year revenue increase was primarily due to the **acquisition of a residential solar portfolio** from NJR Clean Energy Ventures and **improved solar renewable energy credits (SRECs) revenue**[6](index=6&type=chunk) - The decrease in operating expenses was mainly driven by **lower O&M costs**, which fell from **$4.5 million to $2.1 million** YoY, due to **operational efficiencies** and the near completion of **meter upgrade efforts**[8](index=8&type=chunk) [Financial Position and Capital Management](index=3&type=section&id=Financial%20Position%20and%20Capital%20Management) As of June 30, 2025, Spruce Power maintained a solid financial position with **$90.5 million in cash** and **$717.1 million in non-recourse project finance debt**, repurchasing **$1.0 million** in common stock | Metric | As of June 30, 2025 | | :--- | :--- | | Total Cash | $90.5 million | | - Cash and cash equivalents | $53.5 million | | - Restricted cash | $36.9 million | | Total Principal Debt | $717.1 million | | Blended Interest Rate | 6.1% | - All company debt consists of project finance loans that are **non-recourse** to the Company itself, meaning they are incurred at the project level[10](index=10&type=chunk) - In Q2 2025, the company **repurchased 479,667 shares for $1.0 million**, with **$42.0 million remaining** under the authorized $50.0 million share repurchase program[13](index=13&type=chunk) [Key Operating Metrics](index=4&type=section&id=Key%20Operating%20Metrics) As of Q2 2025, Spruce Power owns cash flows from approximately **85,000 home solar assets** with an **11-year average contract life**, generating **187 thousand MWh** and a Gross Portfolio Value (PV6) of **$887.0 million** | Operating Metric | Value (as of June 30, 2025) | | :--- | :--- | | Owned Home Solar Assets & Contracts | ~85,000 | | Serviced 3rd Party Systems | ~60,000 | | Average Remaining Contract Life | ~11 years | | Q2 2025 Portfolio Generation | ~187 thousand MWh | | Gross Portfolio Value (PV6) | $887.0 million | [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) This section defines key non-GAAP financial measures, including **Operating EBITDA** and **Adjusted Cash Flow from Operations**, and explains Portfolio Value Metrics like **Contracted Portfolio Value** and **Renewal Portfolio Value** based on a **6% discount rate** - **Operating EBITDA:** Defined as Adjusted EBITDA plus net proceeds from master lease agreements, proceeds from contract buyouts/prepayments, and interest earned on cash investments[23](index=23&type=chunk) - **Adjusted Cash Flow from Operations:** Defined as cash from operations adjusted for recurring proceeds from the SEMTH master lease and sales of solar energy systems, as well as non-recurring legal settlements[24](index=24&type=chunk) | Portfolio Value Metric | Value (as of June 30, 2025) | | :--- | :--- | | Contracted Portfolio Value | $745 million | | Renewal Portfolio Value | $91 million | | Uncontracted Renewable Energy Credits | $51 million | | **Gross Portfolio Value** | **$887 million** | [Consolidated Financial Statements](index=12&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q2 2025, including the **Statement of Operations** and **Balance Sheet**, and reconciliations for key non-GAAP measures [Condensed Consolidated Statements of Operations](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenues reached **$33.2 million**, with net loss attributable to stockholders at **$3.0 million**, or **($0.17) per share**, significantly improving from Q2 2024 | (In thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenues | $33,239 | $22,481 | | Total operating expenses | $24,337 | $25,841 | | Income (loss) from operations | $8,902 | $(3,360) | | Net loss | $(2,867) | $(8,573) | | Net loss attributable to stockholders | $(2,966) | $(8,578) | | Net loss per share, basic and diluted | $(0.17) | $(0.45) | [Condensed Consolidated Balance Sheets](index=16&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Spruce Power reported total assets of **$862.6 million**, total liabilities of **$735.2 million**, and total stockholders' equity of **$125.0 million**, including **$53.5 million** in cash | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $53,511 | $72,802 | | Total current assets | $119,300 | $136,430 | | Total assets | $862,631 | $898,479 | | **Liabilities & Equity** | | | | Total current liabilities | $239,485 | $59,569 | | Total liabilities | $735,221 | $752,327 | | Total stockholders' equity | $124,987 | $143,714 | | Total liabilities & equity | $862,631 | $898,479 | [Reconciliation of Non-GAAP Measures](index=13&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section provides detailed reconciliations of GAAP to non-GAAP financial measures, highlighting Q2 2025 **Operating EBITDA of $24.6 million**, **Adjusted Cash Flow from Operations of $9.5 million**, and **Core Operating Expenses of $17.2 million** Reconciliation of Net Loss to Operating EBITDA (Q2) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net loss attributable to stockholders | $(2,966) | $(8,578) | | EBITDA | $11,322 | $(1,261) | | Adjusted EBITDA | $17,430 | $5,402 | | **Operating EBITDA** | **$24,641** | **$14,443** | Reconciliation of Adjusted Cash Flow from Operations (Q2) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,343) | $(5,115) | | **Adjusted Cash Flow from Operations** | **$9,547** | **$2,764** | Calculation of Core Operating Expenses (Q2) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | O&M Expense | $2,137 | $4,474 | | SG&A Expense | $15,099 | $16,701 | | **Core operating expenses** | **$17,236** | **$21,175** | [Supplemental Information](index=4&type=section&id=Supplemental%20Information) This section provides details on the investor conference call, an overview of Spruce Power's business as a leading distributed solar energy asset owner, and cautionary notes on forward-looking statements and risks - A conference call for analysts and investors was scheduled for **August 11, 2025**, at 2:30 p.m. Mountain Time to discuss the financial results[15](index=15&type=chunk) - Spruce Power is a **leading owner and operator of distributed solar energy assets**, providing subscription-based services for rooftop solar and battery storage[17](index=17&type=chunk) - The report includes a detailed **cautionary note on forward-looking statements**, outlining **numerous risks and uncertainties** that could cause actual results to differ from expectations[18](index=18&type=chunk)[19](index=19&type=chunk)