Spruce Power (SPRU) - 2025 Q2 - Quarterly Results

Executive Summary & Business Highlights 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] - 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][5] Financial Performance Analysis 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] - 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] Financial Position and Capital Management 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] - 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] Key Operating Metrics 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 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] - 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] | 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 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 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 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 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 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] - Spruce Power is a leading owner and operator of distributed solar energy assets, providing subscription-based services for rooftop solar and battery storage[17] - 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][19]