Spruce Power (SPRU) - 2025 Q1 - Quarterly Results

First Quarter 2025 Performance Overview Spruce Power reported strong Q1 2025 results with significant revenue and Operating EBITDA growth driven by strategic acquisitions, maintaining a robust cash position while focusing on further acquisitions, service expansion, and cost efficiency Business Highlights Spruce Power reported strong year-over-year growth in the first quarter of 2025, with a 30% increase in revenue to $23.8 million and a 15% rise in Operating EBITDA to $12.3 million. The company ended the quarter with a total cash balance of $96.5 million and a portfolio of approximately 85,000 home solar assets Q1 2025 Key Metrics | Metric | Value | | :--- | :--- | | Revenues | $23.8 million (up 30% YoY) | | Net loss attributable to stockholders | $15.3 million | | Operating EBITDA | $12.3 million (up 15% YoY) | | Total cash balance (as of Mar 31, 2025) | $96.5 million | | Home solar assets and contracts | ~85,000 | | Spruce PRO third-party systems serviced | ~60,000 | | Quarterly portfolio generation | ~121 thousand MWh | Management Commentary and Outlook The CEO attributed the positive Q1 results, including a 30% revenue growth, to the acquisition of assets from NJR Clean Energy Ventures. The company maintains a strong balance sheet with nearly $100 million in cash and is actively pursuing new acquisitions, expanding its Spruce PRO servicing business with ADT as a new client, and focusing on cost management to improve profitability - The acquisition of rooftop assets from NJR Clean Energy Ventures was a primary driver for the 30% year-over-year revenue growth and 15% increase in Operating EBITDA[4] - The company is focused on three key strategic areas for 2025: - Actively seeking new, disciplined acquisition opportunities - Expanding the Spruce PRO servicing business, having recently signed ADT as its first third-party client - Implementing cost management actions to enhance profitability[4] Financial Results Spruce Power's Q1 2025 financial results show increased revenues and Operating EBITDA, a strong cash position with non-recourse debt, ongoing share repurchases, and a substantial portfolio of home solar assets generating significant power Consolidated Financial Results For Q1 2025, revenues increased to $23.8 million, up 30% year-over-year, primarily due to the NJR portfolio acquisition. Total operating expenses rose to $25.5 million from $21.9 million in the prior year, driven by higher SG&A and O&M costs. The company recorded a net loss attributable to stockholders of $15.3 million, while Operating EBITDA grew to $12.3 million from $10.7 million year-over-year Q1 Revenue Comparison | Period | Revenue | | :--- | :--- | | Q1 2025 | $23.8 million | | Q4 2024 | $20.2 million | | Q1 2024 | $18.3 million | Q1 Operating Expenses Comparison (YoY) | Expense Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Operating Expenses | $25.5 million | $21.9 million | | Core Operating Expenses | $18.0 million | $16.6 million | | - SG&A | $3.9 million | $3.1 million | | - O&M | $14.1 million | $13.5 million | - Operating EBITDA increased to $12.3 million in Q1 2025 from $10.7 million in Q1 2024, mainly due to the NJR acquisition, though partially offset by higher expenses and lower interest income. The company expects Operating EBITDA to improve in all quarters of 2025 compared to the prior year[9] Balance Sheet and Liquidity As of March 31, 2025, Spruce Power held $96.5 million in total cash, down from $109.1 million at year-end 2024, with the decrease attributed to collections timing, seasonality, and share repurchases. The company's total outstanding debt was $723.8 million, all of which is non-recourse project finance debt with a blended interest rate of 6.0% Cash Position as of March 31, 2025 | Cash Category | Amount | | :--- | :--- | | Total Cash | $96.5 million | | Cash and Cash Equivalents | $61.9 million | | Restricted Cash | $34.5 million | - Total principal debt outstanding was $723.8 million with a blended interest rate of 6.0%. All debt is non-recourse to the company, meaning it is secured at the project level and does not impact corporate cash balances[10] Growth and Capital Allocation Spruce Power is focused on maximizing shareholder value through strategic acquisitions, capital projects, debt repayment, and shareholder returns. During Q1 2025, the company repurchased 0.3 million shares for $0.8 million, leaving $43.0 million remaining under its $50.0 million share repurchase authorization - In Q1 2025, the company repurchased 0.3 million shares of common stock at an average price of $2.70 per share, for a total cost of $0.8 million[13] - As of March 31, 2025, $43.0 million remained available under the company's $50.0 million share repurchase program[13] Key Operating Metrics As of Q1 2025, Spruce's portfolio consisted of approximately 85,000 home solar assets with an average remaining contract life of 11 years, which generated 121 thousand MWh of power during the quarter. The company also services an additional 60,000 third-party systems. The Gross Portfolio Value, calculated on a PV6 basis, was $901.0 million Operating Portfolio as of March 31, 2025 | Metric | Value | | :--- | :--- | | Owned home solar assets/contracts | ~85,000 | | Average remaining contract life | ~11 years | | Third-party systems serviced | ~60,000 | | Q1 2025 portfolio generation | ~121 thousand MWh | | Gross Portfolio Value (PV6) | $901.0 million | Financial Statements and Non-GAAP Reconciliations This section details Spruce Power's Q1 2025 financial statements, including consolidated statements of operations and balance sheets, alongside definitions and reconciliations of non-GAAP financial measures like Operating EBITDA Use and Definitions of Non-GAAP Financial Information The company uses non-GAAP measures like EBITDA, Adjusted EBITDA, and Operating EBITDA to provide supplemental information on business performance. Operating EBITDA is a key metric defined as Adjusted EBITDA plus cash flows from master lease agreements, contract buyouts, and interest on cash investments. Core Operating Expenses are defined as the sum of SG&A and O&M expenses. Portfolio Value Metrics are used to estimate the remaining value of customer contracts - Operating EBITDA is a key non-GAAP metric used by management, defined as Adjusted EBITDA plus proceeds from master lease agreements, buyouts/prepayments, and interest earned on cash investments[24] Gross Portfolio Value Composition (as of March 31, 2025) | Component | Value (in millions) | | :--- | :--- | | Contracted Portfolio Value | $786 | | Renewal Portfolio Value | $71 | | Uncontracted Renewable Energy Credits | $44 | | Gross Portfolio Value | $901 | Condensed Consolidated Statements of Operations For the three months ended March 31, 2025, Spruce Power reported revenues of $23.8 million, an increase from $18.3 million in the prior-year period. The company posted a loss from operations of $1.7 million and a net loss attributable to stockholders of $15.3 million, or ($0.84) per share, compared to a net loss of $2.5 million, or ($0.13) per share, in Q1 2024 Q1 Statement of Operations Summary (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $23,818 | $18,287 | | Total operating expenses | $25,512 | $21,884 | | Loss from operations | $(1,694) | $(3,597) | | Net loss attributable to stockholders | $(15,338) | $(2,454) | | Net loss per share, basic and diluted | $(0.84) | $(0.13) | Reconciliation of Non-GAAP Financial Measures The company provides a reconciliation from GAAP Net Loss to non-GAAP metrics. For Q1 2025, the net loss attributable to stockholders of $15.3 million was reconciled to an Operating EBITDA of $12.3 million. This compares to a net loss of $2.5 million and an Operating EBITDA of $10.7 million in Q1 2024 Reconciliation to Operating EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss attributable to stockholders | $(15,338) | $(2,454) | | EBITDA | $(1,377) | $8,094 | | Adjusted EBITDA | $6,162 | $3,771 | | Operating EBITDA | $12,290 | $10,703 | Condensed Consolidated Balance Sheets As of March 31, 2025, Spruce Power had total assets of $878.0 million, down from $898.5 million at the end of 2024. Total liabilities stood at $747.2 million, and total stockholders' equity was $130.8 million. Key assets included $61.9 million in cash and cash equivalents and $582.8 million in net property and equipment Balance Sheet Summary (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $125,870 | $136,430 | | Total assets | $877,987 | $898,479 | | Total current liabilities | $59,396 | $59,569 | | Total liabilities | $747,208 | $752,327 | | Total stockholders' equity | $130,779 | $146,152 | Other Information This section provides details for the Q1 2025 conference call, an overview of Spruce Power's business as a leading distributed solar energy asset owner, and a cautionary note regarding forward-looking statements Conference Call Information Spruce Power management will host a conference call for analysts and investors to discuss the first quarter 2025 financial results and business outlook. The release provides details for accessing the live call and a subsequent audio replay - A conference call to discuss Q1 2025 results is scheduled for May 14, 2025, at 2:30 p.m. Mountain Time. Access details for the live call and replay are provided[16] About Spruce Power Spruce Power is a leading owner and operator of distributed solar energy assets in the U.S., providing subscription-based services for rooftop solar and battery storage. The company owns the cash flows from approximately 85,000 home solar assets and contracts - Spruce Power's business model is a power as-a-service subscription that allows homeowners to access solar technology without significant upfront investment or maintenance costs[17] Forward-Looking Statements This section contains a cautionary note regarding forward-looking statements, which are based on current expectations and are subject to numerous risks and uncertainties. It advises readers not to place undue reliance on these statements and refers them to the company's SEC filings for a more detailed discussion of risk factors - Forward-looking statements in the release, including management's outlook and expectations for growth, are subject to significant risks and uncertainties detailed in the company's SEC filings, such as the Annual Report on Form 10-K[18][19][20]