Financial Performance - Reported Q3 2024 revenues of $21.4 million, a decrease from $23.3 million in Q3 2023, primarily due to lower solar renewable energy credit revenues and higher performance guarantee payments[4]. - Net loss attributable to stockholders for Q3 2024 was $53.5 million, with Operating EBITDA reported at $17.7 million[6]. - Revenues for Q3 2024 were $21,378,000, a decrease of 8.05% from $23,250,000 in Q3 2023[27]. - Net loss attributable to stockholders was $53,529,000 in Q3 2024, compared to a net loss of $19,313,000 in Q3 2023, representing a significant increase in losses[27]. - Adjusted EBITDA for Q3 2024 was $6,712,000, down 27.14% from $9,208,000 in Q3 2023[28]. - The company reported a net loss from continuing operations per share of $2.88 for Q3 2024, compared to a loss of $1.09 per share in Q3 2023[27]. - The company incurred impairment of goodwill amounting to $28,757,000 in Q3 2024, with no such charge in Q3 2023[27]. Cash and Assets - The company ended the quarter with $150.0 million in total cash, including $113.7 million in unrestricted cash[8]. - Cash and cash equivalents were $113,658,000 as of September 30, 2024, down from $141,354,000 at the end of 2023, a decrease of 19.63%[29]. - Total assets decreased to $806,774,000 as of September 30, 2024, from $895,021,000 at the end of 2023, reflecting a decline of 9.83%[29]. - Total liabilities decreased to $655,138,000 as of September 30, 2024, from $680,352,000 at the end of 2023[30]. Operating Expenses - Core operating expenses for Q3 2024 were $17.4 million, up from $15.9 million in Q3 2023, due to higher non-routine operations and maintenance costs[5]. - Total operating expenses increased to $58,537,000 in Q3 2024, up 22.66% from $47,767,000 in Q3 2023[27]. Debt and Financing - The total principal amount of outstanding debt was $631.0 million with a blended interest rate of 5.9%[7]. - The company plans to fund the acquisition of the solar assets through a combination of cash on hand and non-recourse project level debt[11]. Growth and Acquisitions - Executed a non-binding Letter of Intent to acquire approximately 10,000 home solar assets, which would represent over 10% growth in the rooftop solar portfolio if completed[4][11]. - As of September 30, 2024, the company owned cash flows from approximately 75,000 home solar assets with a Gross Portfolio Value of $766.0 million[14][24]. - The company serviced approximately 1,000 third-party owned home solar systems as of September 30, 2024[14]. Guidance - Revised 2024 guidance for Operating EBITDA to a range of $57 - $62 million and Adjusted Free Cash Flow to a range of ($12) - ($7) million[9]. Shareholder Information - Weighted-average shares outstanding increased to 18,566,015 in Q3 2024 from 17,351,796 in Q3 2023[27].

Financial Data and Key Metrics Changes - For Q2 2024, revenue was $22.5 million, a slight decrease from $22.8 million in the prior year period, primarily due to lower revenues from solar renewable energy credits [13] - Operating EBITDA for Q2 was $14.4 million, with adjusted EBITDA at $5.4 million [14] - The total cash position at the end of Q2 was approximately $150 million, unchanged from Q1 [15] - The company reported a GAAP net loss attributable to stockholders of $8.6 million [14] Business Line Data and Key Metrics Changes - Core operating expenses (OpEx) for Q2 totaled $21.1 million, up from $19 million in the prior year, with portfolio O&M expenses increasing to $4.4 million from $3 million [13] - SG&A expenses rose to $16.7 million from $16 million, impacted by $1.9 million related to the CEO transition [14] Market Data and Key Metrics Changes - The company noted a favorable shift in the residential solar market, with higher interest rates and better policy incentives leading to an acceleration in solar lease and PPA origination [7] - The exit of a large player from the market has created additional opportunities for Spruce [7] Company Strategy and Development Direction - The strategic priorities focus on growth through acquiring operating residential solar assets and expanding capital-light third-party service offerings [4] - The company aims to maintain a conservative approach to M&A, emphasizing attractive returns and free cash flow generation [10] - Spruce is positioned to capitalize on the growing demand for long-term capital providers in the solar market [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's model as a third-party owner, highlighting the benefits of avoiding customer acquisition costs [19] - The company anticipates that rising electricity costs will enhance the economic appeal of rooftop solar for homeowners [23][25] - Management is optimistic about the expanding opportunity set in the market due to recent industry disruptions [20] Other Important Information - The company achieved a Google rating of 3.0 out of 5.0, the highest in its history, reflecting improvements in customer satisfaction [6] - The refinancing of the Spruce Power 4 credit facility was successfully completed, with a new rating of A+ from Kroll Bond Rating Agency [16] Q&A Session Summary Question: Impact of recent bankruptcy of a public residential solar installer - Management indicated that the bankruptcy highlights the advantages of their business model as a third-party owner, which avoids origination costs and allows for growth through acquisitions [19] Question: Go-to-market strategy for Spruce Pro - The new General Manager is focused on productizing and commercializing the service offerings, with plans to build a robust pipeline through various marketing efforts [21] Question: Adoption curve for Spruce Pro services - Management noted that the sales cycles for these services are longer, requiring a strategic approach to build the customer base [22] Question: Rooftop solar's role in the increasing electricity demand landscape - Management emphasized that rising electricity costs and decreasing solar costs create a favorable economic argument for homeowners, expanding the market for Spruce [23][25]

Financial Performance - Total revenues for Q2 2024 were $22,481,000, a slight decrease of 1.5% compared to $22,813,000 in Q2 2023[16] - The net loss attributable to stockholders for Q2 2024 was $8,578,000, compared to a net income of $3,065,000 in Q2 2023[16] - The company reported a loss from operations of $3,360,000 in Q2 2024, compared to a loss of $972,000 in Q2 2023[16] - The net loss for the six months ended June 30, 2024, was $11,023,000, compared to a net loss of $17,240,000 for the same period in 2023, indicating an improvement of approximately 36%[22] - For the six months ended June 30, 2024, total revenues were $40.8 million, compared to $40.9 million for the same period in 2023[50] - Revenues decreased by $0.3 million, or 1.5%, to $22.5 million for the three months ended June 30, 2024, compared to $22.8 million for the same period in 2023[145] - For the six months ended June 30, 2024, revenues decreased by $0.1 million, or 0.3%, to $40.8 million compared to $40.9 million for the same period in 2023[154] Operating Expenses - Operating expenses increased to $25,841,000 in Q2 2024, up 8.6% from $23,785,000 in Q2 2023[16] - Cost of revenues increased by $1.5 million, or 18.0%, to $10.1 million for the three months ended June 30, 2024, primarily due to higher operating and maintenance costs[145] - Selling, general and administrative expenses rose by $0.7 million, or 4.5%, to $16.7 million for the three months ended June 30, 2024, driven by higher compensation expenses including one-time severance costs[146] Cash and Liquidity - Cash and cash equivalents decreased to $116,588,000 as of June 30, 2024, down from $141,354,000 at December 31, 2023[13] - The cash and cash equivalents at the end of the period were $150,209,000, down from $192,110,000 at the beginning of the period[23] - Total cash, cash equivalents, and restricted cash amounted to $150.2 million as of June 30, 2024, down from $192.1 million as of June 30, 2023[38] - Net cash used in continuing operating activities was $27,402,000 for the six months ended June 30, 2024, compared to $16,113,000 for the same period in 2023, reflecting an increase in cash outflow[22] - The net change in cash and cash equivalents for the six months ended June 30, 2024, was $(22,732) thousand, an improvement from $(48,034) thousand in the prior year[164] Assets and Liabilities - Total assets decreased to $858,434,000 as of June 30, 2024, from $895,021,000 at December 31, 2023[14] - Total liabilities decreased to $653,871,000 as of June 30, 2024, down from $680,352,000 at December 31, 2023[14] - The accumulated deficit increased to $(268,920,000) as of June 30, 2024, compared to $(257,888,000) at December 31, 2023[14] - The company reported a total stockholders' equity of $265,966,000 as of June 30, 2023, compared to $288,891,000 at the end of the previous quarter[20] Investments and Acquisitions - The acquisition of Legacy Spruce Power was completed for a total purchase price of $32.6 million, which included cash payments of $61.8 million less cash and restricted cash acquired of $29.2 million[65] - The acquisition of SEMTH was completed for approximately $23.0 million in cash, with the assumption of $125.0 million in outstanding senior indebtedness[73] - The estimated fair value of the investment in the SEMTH Master Lease was approximately $146.9 million on the transaction date[74] Stock and Equity - The weighted-average shares outstanding, basic, increased to 19,271,954 in Q2 2024 from 18,611,757 in Q2 2023[16] - The company performed a one-for-eight reverse stock split effective October 6, 2023, impacting all share amounts retrospectively[31] - Stock-based compensation expense for the three months ended June 30, 2024, was $0.5 million, a decrease from $0.8 million for the same period in 2023[90] - The Company granted 295,229 stock options during the six months ended June 30, 2024, with an average exercise price of $3.74[91] Legal and Regulatory Matters - The Company reached a settlement of $19.5 million related to a securities class action, with a net payment of $15.0 million after insurance recoveries[106] - The Company is involved in ongoing legal proceedings but believes the outcomes will not significantly impact its financial position[105] - The Company is cooperating with state attorney generals' investigations regarding its sales and marketing protocols[111] Future Outlook and Strategy - The corporate strategy focuses on subscription-based solutions for distributed energy resources, aiming to enhance customer service and operational efficiency[137] - Future growth is dependent on acquiring operating home solar energy systems in bulk from other companies, leveraging existing market opportunities[140] - The ability to raise capital from third parties is critical for supporting ownership of existing assets and enabling future growth[141]

Financial Performance - Reported Q2 2024 revenues of $22.5 million, a slight decrease from $22.8 million in Q2 2023, primarily due to lower solar renewable energy credit revenues[3] - Net loss attributable to stockholders for Q2 2024 was $8.6 million, with Operating EBITDA reported at $14.4 million[5] - Revenues for Q2 2024 were $22,481,000, a decrease of 1.5% compared to $22,813,000 in Q2 2023[21] - Net loss attributable to stockholders was $8,578,000 in Q2 2024, compared to a net income of $3,065,000 in Q2 2023[21] - Adjusted EBITDA for Q2 2024 was $5,402,000, down 52.1% from $11,231,000 in Q2 2023[22] - The company reported a net loss from continuing operations per share of $(0.46) for Q2 2024, compared to a profit of $0.10 per share in Q2 2023[21] Operating Expenses - Core operating expenses for Q2 2024 were $21.1 million, up from $19.0 million in Q2 2023, driven by higher compensation expenses including one-time severance costs[4] - Total operating expenses increased to $25,841,000 in Q2 2024, up 8.6% from $23,785,000 in Q2 2023[21] Cash and Assets - Total cash as of June 30, 2024, was $150.2 million, including $116.6 million in cash and cash equivalents, a decrease from $120.6 million as of March 31, 2024[6] - Cash and cash equivalents were $116,588,000 as of June 30, 2024, down from $141,354,000 at the end of 2023[23] - Total assets decreased to $858,434,000 as of June 30, 2024, from $895,021,000 at the end of 2023[23] - Total liabilities decreased to $653,871,000 as of June 30, 2024, from $680,352,000 at the end of 2023[24] Debt and Financing - Spruce Power closed a new $130 million non-recourse debt facility in June 2024, providing over $6 million in incremental capital[8] - The company has $44.7 million remaining under its $50 million common share repurchase program as of June 30, 2024[9] - Interest expense, net, was $7,591,000 in Q2 2024, down from $10,456,000 in Q2 2023[21] Future Outlook - The company maintains its 2024 Operating EBITDA guidance in the range of $68 - $86 million, with expectations trending towards the lower end[7] - Spruce continues to evaluate a pipeline of M&A opportunities and organic growth prospects through Spruce Pro[2] Portfolio and Operations - As of June 30, 2024, Spruce owned cash flows from approximately 75,000 home solar assets across 18 U.S. states, with a combined portfolio generation of approximately 133 thousand MWh of power[10] - Gross Portfolio Value as of June 30, 2024, was $778 million, reflecting the present value of future cash flows from customer contracts[10] - The weighted-average shares outstanding, basic, increased to 19,271,954 in Q2 2024 from 18,611,757 in Q2 2023[21]

Financial Data and Key Metrics Changes - First quarter revenue was $18.3 million, a slight increase from $18.1 million in the prior year period, primarily due to incremental revenues from the Tredegar acquisition [28] - First quarter GAAP net loss attributable to stockholders was $2.5 million [30] - Adjusted EBITDA for the first quarter was $3.8 million, with total operating EBITDA reaching approximately $10.7 million after including net proceeds from investments and interest earned [31] Business Line Data and Key Metrics Changes - Portfolio O&M expense increased to $3.1 million from $1.9 million in the prior year period, largely due to timing considerations [29] - SG&A expenses decreased to $13.5 million from $15.7 million in the prior year, impacted by legal fees tied to legacy XL Fleet lawsuits [29] Market Data and Key Metrics Changes - The residential solar market is experiencing a massive investment wave, with around 25 gigawatts of rooftop solar installed in the U.S. over the past five years [15] - The company anticipates hundreds of thousands of homeowners will adopt solar through the end of the decade, indicating a robust market outlook [16] Company Strategy and Development Direction - The company aims to pursue capital light organic growth opportunities, focusing on acquiring operating residential solar portfolios and optimizing its servicing technology platform [10][11] - Spruce has launched Spruce Pro, a B2B brand for marketing its servicing technology platform, with early interest exceeding expectations [20] Management's Comments on Operating Environment and Future Outlook - Management believes the company is in its strongest position in corporate history, with a strong balance sheet and abundant liquidity to capitalize on opportunities in the residential solar market [9] - The company emphasizes a disciplined approach to capital allocation, prioritizing high-return opportunities and maintaining flexibility in decision-making [21][24] Other Important Information - As of March 31, 2024, the company had cash and cash equivalents of $150 million, down from $173 million at the end of 2023, primarily due to legal settlements related to legacy XL Fleet [32] - The total principal balance of long-term debt was $640 million, with a blended interest rate of 5.8% [33] Q&A Session Summary Question: Why did the company not repurchase any shares in the first three months? - The company is focused on building a long-term durable business and sees compelling opportunities for M&A that require capital [43] Question: Can you elaborate on the competitive advantages of the servicing platform? - The company believes it offers the most comprehensive service offering in the market, which allows for leveraging fixed costs and pursuing capital light growth [51][53] Question: How does the company view the pace of M&A going forward? - The company is seeing a widening spread between bid and ask prices and remains disciplined in pursuing acquisitions, waiting for the right opportunities [54]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ___________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO _________ Commission File Number 001-38971 Spruce Power Holding Corporation (Exact name of Re ...

DENVER, COLORADO (May 15, 2024) – 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 quarter ended March 31, 2024. Business Highlights Management Commentary and Outlook "Our team remains squarely focused on being the dominant owner and operator of distributed solar assets," said Chris Hayes, Spruce's Chief Executive Officer. Hayes continued, "I'm excited ...

Company Operations and Portfolio - Spruce Power operates approximately 75,000 home solar assets and customer contracts, providing subscription-based services across the U.S.[30] - The company completed the acquisition of SS Holdings 2017, LLC, gaining rights to customer payment streams from approximately 22,500 home solar leases and power purchase agreements[39] - Following the SEMTH and Tredegar acquisitions, Spruce Power's portfolio now includes 12 portfolios of rooftop solar customer agreements with a combined capacity of approximately 426 MWdc[40] - The average remaining contract life for the newly acquired solar assets is approximately 11 years, enhancing the company's long-term revenue stability[39] - As of December 31, 2023, the weighted average remaining contract term for home solar assets in Spruce Power's portfolio is approximately 12 years[50] - The company has a diversified portfolio across 18 states, reducing exposure to localized risks and providing a stable cash flow stream[52] - Spruce Power's in-house capabilities include customer billing, account management, and maintenance monitoring, supporting efficient operations for approximately 75,000 home solar systems[45] - The company aims to leverage its platform to grow revenues by providing subscription-based solutions for rooftop solar and energy storage[42] Financial Performance - Revenues increased by $56.7 million, or 244%, to $79.9 million in 2023 compared to 2022, driven by a full year of PPA and SLA revenues from Legacy Spruce Power assets and incremental revenues from the Tredegar Acquisition[167] - Cost of revenues rose by $27.9 million, or 280.1%, to $37.8 million in 2023, correlating with the revenue increase and higher depreciation and operation costs[168] - Selling, general and administrative expenses decreased by $17.0 million, or 23.2%, to $56.1 million in 2023, primarily due to reduced bonus expenses and restructuring costs[169] - The company reported net losses attributable to stockholders of $65.8 million in 2023, compared to $93.9 million in 2022[175] - As of December 31, 2023, the company reported a net loss of $66.6 million, a decrease of 28% compared to the previous year[166] - Net interest expense for 2023 was $41.9 million, up from $11.4 million in 2022, primarily due to new debt from the SEMTH Acquisition and term loans from the SP2 Facility Amendment[172] Debt and Capital Structure - The company has $646.7 million of long-term debt outstanding as of December 31, 2023, primarily consisting of variable rate debt[87] - The company may require additional capital investment in the future to fund operations and support strategic initiatives, with no assurance of favorable terms[82] - Total debt as of December 31, 2023, was $618.8 million, an increase from $542.5 million at the time of the Legacy Spruce Power acquisition in September 2022[176] - The company believes no additional capital will be needed to execute its current business plan over the next 12 months[177] Legal and Regulatory Risks - The company has been named as a defendant in stockholder class actions, which could result in substantial damages and management-level attention[99] - The company has received a civil money penalty of $11.0 million from the SEC related to violations of federal securities laws[101] - The company is currently facing legal proceedings that could result in significant costs and resource diversion, impacting its business activities[102] - The company has received subpoenas from state attorneys general related to customer complaints, which could result in legal fees and divert management's attention from core business operations[112] - Regulatory challenges in various states may limit the company's ability to operate third-party owned solar energy systems, potentially reducing acquisition opportunities and access to capital[107] Management and Governance - The company’s management has limited experience in operating a public company, which could adversely affect its growth and operations[85] - The company is highly dependent on its CEO, Christian Fong, and the loss of his services could significantly disadvantage the company[83] - The Audit Committee of the Board of Directors is responsible for overseeing cybersecurity policies and receives regular updates on cybersecurity matters[133] Cybersecurity and Risk Management - The company recognizes the importance of cybersecurity and has established a comprehensive risk management program integrated into its overall enterprise risk management framework[130] - The company has implemented a continuous monitoring strategy for cybersecurity, including risk assessments and training personnel on security risks[135] - The company maintains cybersecurity insurance, but costs related to cybersecurity threats may not be fully covered[137] Market and Industry Risks - The solar energy market is still developing, and demand for home solar systems may decline or take longer to develop than expected, impacting the company's growth[68] - The performance of solar energy systems is heavily dependent on suitable solar and meteorological conditions, with potential adverse effects from climate change[77] - The company faces risks from technological advancements that may affect demand for its offerings and could lead to product obsolescence[75] Future Outlook and Strategic Initiatives - The company expects to continue incurring operating and net losses in the near future due to costs associated with implementing its business strategy and general administrative functions[79] - The company completed the acquisition of Legacy Spruce Power and discontinued legacy businesses, with future net income dependent on the success of its new solar power strategy[79] - The company may recognize further goodwill impairment losses in the future if there is a decline in overall financial performance, such as cash flows or revenues[204]

Spruce Power Holding Corporation (NYSE:SPRU) Q4 2023 Results Conference Call March 14, 2024 4:30 PM ET Company Participants Bronson Fleig - Head, IR Christian Fong - CEO Sarah Wells - CFO Conference Call Participants Joseph Osha - Guggenheim Partners Operator Good afternoon, and welcome to Spruce Power's Fourth Quarter 2023 Conference Call. As a reminder, today's call is being recorded. All participants are in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session. [Ope ...

Spruce Power Reports Fourth Quarter and Full-Year 2023 Results DENVER, COLORADO (March 14, 2024) – 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 fourth quarter and year ended December 31, 2023. Business Highlights Management Commentary and Outlook "Spruce's strategy is to be the dominant owner and operator of distributed solar assets. We entered 2024 ...