SPRUCE POWER HOLDING CORP
For the period ended Mar 31, 2025. Filed May 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 14, 2025
SPRU$1.63+28.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001628280-24-047866
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001628280-25-025590
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 74 previous paragraphs and 78 current paragraphs.
22 unchanged; 16 reworded; 40 added; 36 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (40)
Current report
Company Overview
Current report
We are a leading owner and operator of distributed solar energy assets across the U.S., offering subscription-based services to approximately 85,000 home solar assets and customer contracts, making renewable energy more accessible to everyone. We offer asset management and operating and maintenance services and are contracted to service approximately 60,000 systems owned by third parties, as well as to our Portfolio, through our Spruce Pro servicing platform.
Current report
Operating Highlights
Current report
For the three months ended March 31, 2025 and 2024, our revenues totaled $23.8 million and $18.3 million, respectively, while our net loss attributable to stockholders was $15.3 million and $2.5 million, respectively. Our financial performance during the three months ended March 31, 2025 was impacted by fluctuations in the value of our hedging portfolio, variations in our operations and maintenance costs, and the incremental impact of the NJR Acquisitions. See the section below titled “Results of Operations” in this Quarterly Report on Form 10-Q for more information on our operating results for the three months ended March 31, 2025 and 2024.
Current report
We focus on three core pillars in our operations:
Current report
•Ensure an industry leading customer experience. For the three months ended March 31, 2025, our customer satisfaction score was 79% compared to 81% for the three months ended March 31, 2024.
Current report
•Deliver operational excellence in our clean energy portfolio for customers and communities. Combined portfolio generation was approximately 121 thousand MWh of power for the three months ended March 31, 2025 compared to 96 thousand MWh of power for the three months ended March 31, 2024.
Current report
•Execute on our growth and capital strategies. As of March 31, 2025, we owned cash flows from approximately 85,000 home solar assets and customer contracts across 18 U.S. states with an average remaining contract life of approximately 11 years compared to approximately 75,000 home solar assets and customer contracts with an average remaining contract life of approximately 12 years as of March 31, 2024 due to the impact of the NJR Acquisitions.
Current report
Certain information above constitutes key operating metrics that we use to evaluate our operations, measure our performance and identify trends in our business. Some of our key operating metrics are estimates that are based on our management’s beliefs and assumptions and on information currently available to management. Although we believe we have a reasonable basis for each of these estimates, we caution that these estimates are based on a combination of assumptions that may prove to be inaccurate over time, and any inaccuracies could be material to our actual results when compared to our calculations. See the section titled “Risk Factors” in this Quarterly Report on Form 10-Q and under “Risk Factors” in Item 1A of our Annual Report for more information. Furthermore, other companies may calculate these operating metrics differently than we do now or in the future, which would reduce their usefulness as a comparative measure.
Current report
Recent Developments
Current report
Acquisitions
Current report
In November 2024, we completed the Initial NJR Acquisition acquiring 9,800 solar energy systems for approximately $132.5 million, pursuant to an asset purchase agreement (the “APA”). The Initial NJR Acquisition was funded by proceeds from the concurrent issuance of the SP5 Facility (defined below) and $22.7 million of our cash. Under the APA, we may be obligated to acquire approximately 200 additional solar energy systems, subject to those systems having achieved operational milestones. Assuming those milestones are achieved, the aggregate purchase consideration payable with respect to these additional solar energy systems would be approximately $5.0 million pursuant to the APA. During the three months ended March 31, 2025, we acquired 83 of the additional 200 solar energy systems, in the aggregate, for approximately $1.6 million in cash, inclusive of transaction costs of $0.1 million.
Current report
Subsequent to March 31, 2025, we acquired 66 of the 200 additional solar energy systems for approximately $1.7 million in cash. We are unable to determine the total number of remaining additional solar energy systems that we may be obligated to acquire.
Current report
SP5 Facility
Current report
In November 2024, we entered into a non-recourse credit agreement with Banco Santander, S.A., New York (the “SP5 Facility”), which provided a term loan of approximately $109.8 million, of which proceeds were used to partially fund the Initial NJR Acquisition described above. In addition, we entered into an interest rate swap agreement to hedge the floating rate of the SP5 Facility, which included a notional amount of $87.9 million, a swap rate of 3.98%, and a maturity date of November 22, 2027.
Current report
Common Share Repurchase Program
Current report
During the three months ended March 31, 2025, we repurchased 0.3 million shares of common stock under our Repurchase Program in open market transactions at a weighted-average price of $2.70 per share for an aggregate purchase price of $0.8 million, inclusive of transaction costs. No shares of common stock were repurchased under the Repurchase Program during the three months ended March 31, 2024.
Current report
Subsequent to March 31, 2025, the Company repurchased 0.5 million shares of common stock under the Repurchase Program in open market transactions at a weighted-average price of $2.10 per share for an aggregate purchase price of $1.0 million, inclusive of transaction costs.
Current report
Operating Segments
Current report
For information about our operating segments, see “Segment reporting” in Note 2. Summary of Significant Accounting Policies and Note 15. Segment Information.
Current report
Revenues
Current report
Revenues increased by $5.5 million, or 30%, to $23.8 million in the three months ended March 31, 2025 as compared to the same period in 2024. The increase was primarily due to (i) incremental SLA revenues of approximately $3.0 million related to the NJR Acquisitions, (ii) net increase of $2.0 million from SREC revenues, of which $2.9 million related to the NJR Acquisitions, and (iii) incremental servicing revenues of approximately $0.6 million related to newly contracted services on third-party owned solar energy systems. Revenues related to our Drivetrain operations are included in net loss from discontinued operations.
Current report
Cost of Revenues — Solar Energy Systems Depreciation
Current report
Cost of revenues - solar energy systems depreciation increased by $1.6 million, or 27%, to $7.3 million in the three months ended March 31, 2025 as compared to the same period in 2024 primarily due to incremental depreciation related to the NJR Acquisitions.
Current report
Cost of Revenues — Operations and Maintenance
Current report
Cost of revenues - operations and maintenance increased by $0.8 million, or 24%, to $3.9 million in the three months ended March 31, 2025 as compared to the same period in 2024 primarily due to incremental operations and maintenance third-party service costs related to the NJR Acquisitions. Cost of revenues - operations and maintenance related to our Drivetrain Grid operations are included in net loss from discontinued operations.
Current report
Selling, general and administrative expenses increased by $0.6 million, or 5%, to $14.1 million in the three months ended March 31, 2025 as compared to the same period in 2024. The increase was primarily due to increased compensation and related costs of approximately $1.0 million related to higher headcount in 2025 compared to the prior period and increased professional service costs of approximately $0.4 million, both offset by a decrease in other ancillary costs of approximately $0.9 million. Selling, general and administrative expenses related to our Drivetrain businesses are included in net loss from discontinued operations.
Current report
Litigation Settlements
Current report
Litigation settlements of $0.6 million in the three months ended March 31, 2025 primarily relates to the settlement of a legal matter associated with the termination of a Legacy XL lease.
Current report
Interest income of $5.3 million in the three months ended March 31, 2025 related to $4.6 million of interest income from the SEMTH Master Lease and $0.7 million of interest earned on investments in U.S. Treasury securities. In comparison, interest income of $5.4 million for the three months ended March 31, 2024 related to $3.8 million of interest income from the SEMTH Master Lease and $1.6 million of interest earned on investments in U.S. Treasury securities.
Current report
Interest expense, net in the three months ended March 31, 2025 of $12.7 million consisted of (i) $13.2 million of interest expense related to the principal amounts of our outstanding non-recourse debt and (ii) $1.6 million related to the amortization of debt discount and deferred financing costs, both partially offset by $2.1 million of net realized gains from settlements of our interest rate swaps.
Current report
In comparison, interest expense, net in the three months ended March 31, 2024 of $10.9 million consisted of (i) $13.2 million of interest expense related to the principal amounts of our debt instruments and (ii) $1.5 million related to the amortization of debt discount and deferred financing costs, both partially offset by $3.8 million of net realized gains from settlements of our interest rate swaps.
Current report
Interest expense related to the principal amounts of our outstanding non-recourse debt in the three months ended March 31, 2025 was comparable to the three months ended March 31, 2024 primarily due to lower SOFR rates on the decreased principal amounts of our outstanding non-recourse debt quarter over quarter, offset by the effect of new debt entered into as part of the Initial NJR Acquisition in November 2024. See Note 7. Non-Recourse Debt for further information on our debt. Interest expense, net is also impacted by the fluctuations in the settlements of our interest rate swaps, which we use to convert variable rates on our non-recourse debt into fixed rate obligations and are subject to interest-rate risk. See Note 8. Interest Rate Swaps for further information on our interest rate swaps.
Current report
Other expense, net of $6.2 million for the three months ended March 31, 2025 primarily related to the change in fair value of interest rate swaps due to changes in forecasted market interest rates, while other income, net of $6.7 million for the three months ended March 31, 2024 primarily related to the change in fair value of interest rate swaps of $6.4 million and other income, net of $0.3 million.
Current report
As of March 31, 2025, we had working capital of $66.5 million, including cash and cash equivalents and restricted cash of $96.5 million. We had net losses attributable to stockholders of $15.3 million and $2.5 million for the three months ended March 31, 2025 and 2024, respectively.
Current report
As of March 31, 2025, our debt balance was $700.1 million, net of $20.6 million of unamortized fair value adjustment and $3.1 million of unamortized deferred financing costs, all of which is non-recourse project-level debt. Our debt consists of five senior debt facilities and one subordinated debt facility, of which the earliest maturity date is April 30, 2026. For additional information on our debt, refer to Note 7. Non-Recourse Debt included within the accompanying unaudited condensed consolidated financial statements.
Current report
Based on our current liquidity, we believe that our current cash and cash equivalents, together with the future cash generated from our operations and cash generated by management’s plans to extend or refinance debt obligations under the SP 1 Facility, will be sufficient to satisfy the cash requirements of our current operations and principal payments on our debt obligations for the next 12 months. We continually evaluate our cash needs to raise additional funds or seek alternative sources to invest in growth opportunities and other purposes. We expect that we will continue to be dependent on financing from outside parties to complete future acquisitions, and we may invest our own cash in such future acquisitions. If financing is not available to us on acceptable terms if and when needed, we may not be able to achieve further growth or complete identified acquisition opportunities.
Current report
The net cash used in continuing financing activities in the three months ended March 31, 2025 was $7.7 million, which primarily related to $6.8 million for repayments of our non-recourse long-term debt, and $0.8 million related to shares repurchased under our Repurchase Program. The net cash used in continuing financing activities in the three months ended March 31, 2024 primarily related to $6.7 million for the repayment of non-recourse debt.
Current report
Critical Accounting Estimates
Current report
Our unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP. Preparation of these unaudited condensed financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Our most critical accounting estimates are those most important to the portrayal of its financial condition and results of operations and which require us to make its most difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. Although Management believes that its estimates and assumptions are reasonable, they are based on information available when they are made and, therefore, may differ from estimates made under different assumptions or conditions. Our critical accounting estimates are discussed within Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report. There have been no material changes in those critical accounting estimates for the three months ended March 31, 2025.
Removed paragraphs (36)
Previous report
Overview
Previous report
Spruce Power is a leading owner and operator of distributed solar energy assets across the United States, owning cash flows from approximately 75,000 home solar assets and contracts across the United States and making renewable energy more accessible to everyone. We generate revenues primarily through the sale of electricity generated by our home solar energy systems to homeowners pursuant to long-term agreements that obligate our subscribers to make recurring monthly payments, and the servicing of those agreements for other institutional owners of home solar energy systems. In addition, we also earn interest income from the investment made under the master lease with SS Holdings 2017, LLC and its subsidiaries ("SEMTH").
Previous report
September 30, 2024, we entered into a non-binding letter of intent to acquire a portfolio of approximately 10,000 home solar assets and contracts (the “Potential Acquisition”), which if completed would bring ownership of total home solar assets and contracts to approximately 85,000. While management is pursuing the Potential Acquisition, there is no guarantee that we will complete the intended acquisition.
Previous report
Revenues and Cost of Revenues
Previous report
Revenues decreased by $1.9 million, or 8.1%, to $21.4 million in the three months ended September 30, 2024 from $23.3 million for the three months ended September 30, 2023. The decrease was primarily due to a decrease in SREC revenues and a decrease in SLA revenue primarily due to higher performance guarantee obligations recorded during the three months ended September 30, 2024.
Previous report
Cost of revenues decreased by less than $0.2 million, or 1.6%, to $9.7 million in the three months ended September 30, 2024 from $9.8 million for the three months ended September 30, 2023. The decrease was primarily due to lower cost of operations and maintenance in the current period. Cost of revenues related to our Drivetrain and XL Grid operations are included in net income (loss) from discontinued operations.
Previous report
Selling, general and administrative expenses increased by $1.1 million, or 9.1%, to $13.5 million in the three months ended September 30, 2024 from $12.4 million for the three months ended September 30, 2023. The increase was primarily due to various factors including an increase in legal fees incurred in connection with our legal settlements and other ongoing legal proceedings (See Note 14. Commitments and Contingencies) and an increase in compensation expense for the three months ended September 30, 2024 as compared to the prior period. Selling, general and administrative expenses for the three months ended September 30, 2023 include the ongoing operations of our home solar business and corporate functions, as well as certain remaining costs associated with our historic operations, including certain integration related costs. Selling, general and administrative expenses related to the Drivetrain and XL Grid operations are included in net income (loss) from discontinued operations.
Previous report
Litigation settlement, net
Previous report
Litigation settlement, net decreased by $19.1 million, or 72.6%, to $7.2 million in the three months ended September 30, 2024 from $26.3 million for the three months ended September 30, 2023. The decrease is primarily attributed to $26.0 million incurred during the three months ended September 30, 2023, associated with settlements of the SEC inquiry and shareholder lawsuits, net of related insurance recoveries from third parties, partially offset by $7.2 million in additional settlement costs associated with various settled and ongoing legal proceedings (See Note 14. Commitments and Contingencies) recorded during the three months ended September 30, 2024.
Previous report
Impairment of Goodwill
Previous report
Impairment of goodwill of $28.8 million was recognized during the three months ended September 30, 2024 due to a continuous decline in our stock price and market capitalization.
Previous report
Interest income decreased by $2.0 million, or 24.1%, to $6.3 million in the three months ended September 30, 2024 from $8.3 million for the three months ended September 30, 2023. The decrease is primarily due to additional interest income of $2.4 million associated with the SEMTH Master Lease recognized in the prior period, slightly offset by a $0.4 million decrease in interest income earned on investments in U.S. Treasury securities during the current period.
Previous report
Other (income) expense, net was a $11.3 million expense for the three months ended September 30, 2024, an increase of $19.8 million from an income of $8.5 million for the three months ended September 30, 2023. The increase is primarily the result of change in fair value of our interest rate swap agreements.
Previous report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Previous report
Information with respect to our unaudited condensed consolidated statements of operations for the nine months ended September 30, 2024 and 2023 are presented below:
Previous report
Revenues and Cost of Revenues
Previous report
Revenues decreased by $2.3 million, or 3.5%, to $61.9 million in the nine months ended September 30, 2024 from $64.2 million for the nine months ended September 30, 2023. The decrease is primarily due to a decrease in SREC revenue and a decrease in SLA revenue primarily due to higher performance guarantee obligations recorded during the nine months ended September 30, 2024. This decrease was partially offset by an increase in PPA revenues in the current period related to the Tredegar Acquisition.
Previous report
Cost of revenues increased by $2.2 million, or 8.5%, to $28.5 million in the nine months ended September 30, 2024 from $26.3 million for the nine months ended September 30, 2023. The increase is primarily due to an increase in certain operation and maintenance costs. Cost of revenues related to our Drivetrain and XL Grid operations are included in net income (loss) from discontinued operations.
Previous report
Selling, General and Administrative
Previous report
Selling, general and administrative expenses decreased by $0.7 million, or 1.5%, to $43.4 million in the nine months ended September 30, 2024 from $44.1 million for the nine months ended September 30, 2023. Selling, general and administrative expenses for the three months ended September 30, 2023 include the ongoing operations of our home solar business and corporate functions, as well as certain remaining costs associated with our historic operations, including certain integration related costs. Selling, general and administrative expenses related to the Drivetrain and XL Grid operations are included in net income (loss) from discontinued operations.
Previous report
Litigation settlement, net
Previous report
Litigation settlement, net decreased by $19.1 million, or 72.6%, to $7.2 million in the nine months ended September 30, 2024 from $26.3 million for the nine months ended September 30, 2023. The decrease is primarily attributed to $26.0 million incurred during the nine months ended September 30, 2023 associated with settlements of the SEC inquiry and shareholder lawsuits, net of related insurance recoveries from third parties, partially offset by $7.2 million in additional settlement costs associated with various settled and ongoing legal proceedings (See Note 14. Commitments and Contingencies) recorded during the nine months ended September 30, 2024.
Previous report
Gain on Asset Disposal
Previous report
Gain on asset disposal decreased by less than $2.2 million, or 51.4%, to $2.1 million in the nine months ended September 30, 2024 from $4.2 million for the nine months ended September 30, 2023. The decrease is primarily the result of updated valuation reports and adjustments to provisional amounts assigned to gain on asset disposal recognized in the prior period, partially offset by a $0.2 million gain recognized in the current period for insurance proceeds related to Maui wildfire.
Previous report
Impairment of Goodwill
Previous report
Impairment of goodwill of $28.8 million was recognized during the nine months ended September 30, 2024 due to a continuous decline in our stock price and market capitalization.
Previous report
Interest Income
Previous report
Interest income increased by $3.1 million, or 22.1%, to $16.9 million in the nine months ended September 30, 2024 from $13.8 million for the nine months ended September 30, 2023. The increase is primarily due to three full quarters of interest income related to the SEMTH Acquisition, which was completed in March 2023, recognized in the current period as compared to the prior period.
Previous report
Interest expense, net decreased by $0.9 million, or 3.0%, to $29.9 million in the nine months ended September 30, 2024 from $30.8 million for the nine months ended September 30, 2023. The decrease is primarily due to a gain recognized during the current period due to settlement of our interest rate swaps related to the repayment of SP4 Facility, partially offset by incremental expenses associated with three full quarters of interest expense related to the SP4 Facility assumed in connection with the SEMTH acquisition completed in 2023.
Previous report
Other (Income) Expense, net
Previous report
Other (income) expense, net was $7.7 million for the nine months ended September 30, 2024, a decrease of $20.8 million from income of $13.1 million for the nine months ended September 30, 2023. The decrease is primarily due to an unfavorable change in the value of interest swaps in the current period.
Previous report
With the acquisition of Legacy Spruce Power in September 2022, we assumed all of the outstanding non-recourse debt of Legacy Spruce Power, which had a principal balance of $542.5 million on the date of the acquisition. With the SEMTH acquisition in the first quarter of 2023, we assumed$125.0 millionof non-recourse debt, which was repaid in full in June 2024, see Note 8. Non-Recourse Debt to the accompanying unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. During the third quarter of 2023, we entered into a second amendment to our existing SP2 Facility, resulting in incremental term loans of approximately $21.4 million, proceeds of which were used to primarily fund the Tredegar acquisition.
Previous report
During the second quarter of 2024, we obtained new term loans in the aggregate principal amount of$130.0 million, the proceeds of which were primarily used to repay$125.0 million related to the SEMTH acquisition. As of September 30, 2024, we had$605.4 million of aggregate non-recourse debt, including current portions. We are required to complete debt service coverage ratio calculations on a quarterly basis as part of our debt covenants. All debt covenant requirements were satisfied as of September 30, 2024. Based on our current liquidity, management believes that no additional capital will be needed to execute its current business plan over the next 12 months. We continually evaluate our cash needs to raise additional funds or seek alternative sources to invest in growth opportunities and other purposes.
Previous report
The net cash used in financing activities related to continuing operations for the nine months ended September 30, 2024 primarily includes $145.8 million for the repayment of our long term non-recourse debt, inclusive of the $125 million of SP4 Facility repayment, partially offset by new long term non-recourse debt obtained via the SET Facility of $130.0 million.
Previous report
Critical Accounting Policies and Estimates
Previous report
The unaudited condensed consolidated financial statements have been prepared in accordance with the generally accepted accounting principles of the U.S. as set forth in the Financial Accounting Standards Board’s Accounting Standards Codification, and we evaluate the various staff accounting bulletins and other applicable guidance issued by the SEC. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the consolidated balance sheet date, as well as the reported expenses incurred during the reporting periods. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to our unaudited condensed consolidated financial statements.
Reworded paragraphs (16)
Previous wording
The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our financial condition and results of operations. This discussion and analysis should be read together with our results of operations and financial condition and the unaudited condensed consolidated financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 9, 2024 (the “Annual Report”). In addition to historical financial information, this discussion and analysis contains forward-looking statements based upon current expectations that involve risks, uncertainties and assumptions. See the section entitled “Cautionary Note Regarding Forward-Looking Statements.” Actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors. The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report on Form 10-Q and under “Risk Factors” in Item 1A of the Annual Report.
Current wording
The following discussion and analysis provides information which our Management believes is relevant to an assessment and understanding of our financial condition and results of operations. This discussion and analysis should be read together with our results of operations and financial condition and the unaudited condensed consolidated financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 31, 2025 (the “Annual Report”). In addition to historical financial information, this discussion and analysis contains forward-looking statements based upon current expectations that involve risks, uncertainties, and assumptions. Refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements.” Actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or elsewhere in this Quarterly Report on Form 10-Q and under “Risk Factors” in Item 1A of the Annual Report.
Previous wording
As used in this discussion and analysis, references to “SPRU,” “the Company,” “we,” “us” or “our” refer only to Spruce Power Holding Corporation and its consolidated subsidiaries. Depending on the context, "Spruce Power" may refer to Legacy Spruce Power prior to its acquisition by the Company on September 9, 2022, or it may also refer to the operation of Legacy Spruce Power's business by the Company after such acquisition.
Current wording
As used in this discussion and analysis, references to “SPRU,” “the Company,” “we,” “us” or “our” refer only to Spruce Power Holding Corporation and its consolidated subsidiaries.
Previous wording
Our corporate strategy has three key elements:
Current wording
We believe the combination of our existing customer base and proven servicing platform related to our Customer Agreements, together with our capital resources and relationships, gives us the ability to take advantage of rapid growth in distributed solar and battery storage services, while creating a path to more predictable revenues, profits and cash flow for our shareholders. Our corporate strategy has three key elements:
Previous wording
We have more than a decade of experience owning and operating rooftop solar systems, as well as energy efficiency upgrades. We believe our proven platform for managing home solar can be extended to other categories of distributed energy resources, and by leveraging our platform, we intend to grow our revenues by providing subscription-based solutions for rooftop solar and energy storage and other future energy-related products to homeowners and businesses, including commercial and industrial (“C&I”) solar developers. We are focused on delivering best-in-class customer service, with investment into process and platform improvement for on-site monitoring, customer billing and working with qualified partners for field services.
Current wording
We have more than a decade of experience owning and operating rooftop solar systems, as well as energy efficiency upgrades. We believe our proven platform for managing home solar can be extended to other categories of distributed energy resources, and by leveraging our platform, we intend to grow our revenues by providing subscription-based solutions for rooftop solar and energy storage and other future energy-related products to homeowners and businesses. We are focused on delivering best-in-class customer service, with investment into process and platform improvement for on-site monitoring, customer billing and working with qualified partners for field services.
Previous wording
We seek to grow our subscriber revenues by focusing on those channels that have lowest customer acquisition costs and the ability to increase return on assets, including acquiring existing systems from other companies or investment funds, selling additional services to existing subscribers, selling services to new customers online and partnering with selected independent installers to provide a subscription-based solution for their customers. During the three months ended
Current wording
We seek to grow our customer revenues by focusing on those channels that have lowest customer acquisition costs and the ability to increase return on assets, including acquiring existing systems from other companies or investment funds, selling additional services to existing customers, selling services to new customers online and partnering with selected independent installers to provide a subscription-based solution for their customers. Historically, we have grown our number of residential customers through acquisitions, while also organically developing our Spruce Pro servicing platform.
Previous wording
By focusing on subscription-based solutions with long-term customer contracts, we seek to generate consistent revenues, profits and cash flow.
Current wording
By focusing on subscription-based solutions with long-term customer contracts, we seek to generate consistent revenues, profits and cash flow from our residential customers and by leveraging our Spruce Pro servicing platform for portfolio managed services.
Previous wording
We are a leading owner and operator of distributed solar energy assets across the United States, offering subscription-based solutions to homeowners for rooftop solar energy storage and other energy-related products. Additionally, we provide servicing functions for our assets and customers, as well as for other institutional owners of home solar energy systems. Our operating results and ability to grow its business over time could be impacted by certain factors and trends that affect our industry, as well as elements of our strategy, such as:
Current wording
We are a leading owner and operator of distributed solar energy assets across the U.S., offering subscription-based services to owners of home solar assets and customer contracts. Additionally, we provide servicing functions for our assets and customers, as well as for other institutional owners of home solar energy systems. Our operating results and ability to grow our business over time could be impacted by certain factors and trends that affect our industry, as well as elements of our strategy, including the following factors, as well as the risk factors disclosed in Part I, Item 1A, “Risk Factors,” in our Annual Report and other risk factors set forth elsewhere in this Quarterly Report on Form 10-Q:
Previous wording
Our future growth depends significantly on our ability to acquire operating home solar energy systems “in-bulk” from other companies. Industry data suggests there is a substantial existing base of operating home solar energy systems, providing us opportunities to pursue acquisitions. Over the long-term, the continued ability to pursue acquisitions is dependent on development of distributed energy assets, namely home solar energy systems, by third parties. This development may be impacted by numerous factors that influence homeowner demand for home solar energy systems including but not limited to macroeconomic dynamics, climate change impacts, and government policy and incentives.
Current wording
Our future growth depends significantly on our ability to acquire operating home solar energy systems “in-bulk” from other companies. Industry data suggests there is a substantial existing base of operating home solar energy systems, providing us the opportunity to pursue acquisitions. Over the long-term, our continued ability to pursue acquisitions will be dependent on development of distributed energy assets, namely home solar energy systems, by third parties. This development may be impacted by numerous factors that influence homeowner demand for home solar energy systems including but not limited to macroeconomic dynamics, utility rates, climate change impacts and government policy and incentives.
Previous wording
Our ability to raise capital from third parties at reasonable terms is a critical element in supporting ownership of our existing home solar energy assets as well as enabling our future growth. We have historically utilized non-recourse, project-level debt as a primary source of capital for acquisitions. Our ability to raise debt either as means to refinance existing indebtedness or for future acquisitions may be impacted by general macroeconomic conditions, the health of debt capital markets, the interest rate environment, and general concerns over its industry or specific concerns over its business.
Current wording
Our ability to raise capital from third parties at reasonable terms is a critical element in supporting ownership of our existing home solar energy assets as well as enabling our future growth. We have historically utilized non-recourse, project-level debt as a primary source of capital for acquisitions. Our ability to raise debt either as means to refinance existing indebtedness or for future acquisitions may be impacted by general macroeconomic conditions, the health of debt capital markets, the interest rate environment and general concerns over its industry or specific concerns over our business.
Previous wording
The results of operations related to our Drivetrain and XL Grid businesses, which were determined to be discontinued operations in the fourth quarter of 2022, are presented as net income (loss) from discontinued operations in our unaudited condensed consolidated statements of operations. As a result, the continuing operational results reflect the operations related to our corporate functions and the results of operations for Legacy Spruce Power since its acquisition on September 9, 2022.
Current wording
The results of operations related to our Drivetrain business are presented as net loss from discontinued operations in our unaudited condensed consolidated statements of operations.
Previous wording
Information with respect to our unaudited condensed consolidated statements of operations for the three months ended September 30, 2024 and 2023 are presented below:
Current wording
Information with respect to the unaudited condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024 are presented below:
Previous wording
Our cash requirements depend on many factors, including the execution of our business strategy. We remain focused on carefully managing costs, including capital expenditures, maintaining a strong balance sheet, and ensuring adequate liquidity. Our primary cash needs are for debt service, acquisition of solar systems, operating expenses, working capital and capital expenditures to support the growth of our business. Working capital is impacted by the timing and extent of the business needs. As of September 30, 2024, we had net working capital of $110.2 million, including cash and cash equivalents and restricted cash of $150.0 million.
Current wording
Our principal sources of liquidity include cash and cash equivalents and cash flows from operations. We receive cash from certain of our wholly-owned subsidiaries specifically related to the portfolio servicing fees provided for under the relevant servicing agreements between us and the subsidiaries, as well as reimbursement for any expenses we pay on behalf of those subsidiaries, which are allowed under certain agreements related to those subsidiaries. Our cash requirements depend on many factors, including the execution of our business strategy. We may be required to utilize our cash to support certain current and future operations of our wholly owned subsidiaries. We remain focused on carefully managing costs, including capital expenditures, maintaining a strong balance sheet, and ensuring adequate liquidity. Our primary cash needs are debt servicing, acquisition of solar energy portfolios, operating expenses, and working capital to support the growth in our business. Working capital is impacted by the timing and extent of our business needs. See below discussions under “Cash Flows Summary” for the impact of our operations on our cash balances during the three months ended March 31, 2025 and 2024.
Previous wording
The net cash used in continuing operations for the nine months ended September 30, 2024 consists of our corporate costs and certain other costs that were not allocated to our discontinued operations.
Current wording
Operating cash inflows include cash from the sale of solar energy power generated by our home solar energy systems and the servicing of long-term agreements for other institutional owners of home solar energy systems. These operating cash inflows are primarily offset by operating expenses, operating lease payments and interest payments on our outstanding debt. The related cash flows for our Drivetrain business are reflected as discontinued operating activities for the years presented. The net cash used in continuing operating activities consists of our corporate costs and certain other costs that were not allocated to our discontinued operations. Net cash used in continuing operating activities decreased in the three months ended March 31, 2025 compared to the same period in 2024 by $13.1 million primarily due to a $15.0 million net settlement amount paid in February 2024 related to a settled legal proceeding (see Note 12. Commitments and Contingencies), partially offset by increases in operations and maintenance costs and selling, general and administrative expenses in the three months ended March 31, 2025 discussed above.
Previous wording
Cash provided by investing activity related to continuing operations for the nine months ended September 30, 2024 primarily includes $18.9 million of proceeds from the SEMTH investment and $4.7 million of proceeds from the sale of solar energy systems.
Current wording
The net cash provided by continuing investing activities in the three months ended March 31, 2025 was $4.2 million, which primarily related to $4.5 million of proceeds from our investments under the SEMTH Master Lease and $1.4 million of proceeds from the sale of solar energy systems, partially offset by $1.6 million of net payments related to the NJR Acquisitions. The net cash provided by continuing investing activities in the three months ended March 31, 2024 primarily related to $4.5 million of proceeds from the SEMTH investment and $1.3 million of proceeds from the sale of solar energy systems.
Previous wording
Our significant accounting policies are consistent with those discussed in Note 2. Summary of Significant Accounting Policies of the consolidated financial statements and the MD&A sections of our Annual Report on Form 10-K for the year ended December 31, 2023 and Note 2. Summary of Significant Accounting Policies to the accompanying unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Current wording
Our significant accounting policies are consistent with those discussed in Note 2. Summary of Significant Accounting Policies of our audited consolidated financial statements in our Annual Report and Note 2. Summary of Significant Accounting Policies of our unaudited condensed consolidated financial statements in this Form 10-Q, and should be reviewed in connection with our critical accounting policies that require difficult, subjective and complex judgments.
Previous wording
For information with respect to recent accounting pronouncements and the impact of these pronouncements in our unaudited condensed consolidated financial statements, see Note 2. Summary of Significant Accounting Policies to the accompanying unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Current wording
For information with respect to recent accounting pronouncements and the impact of these pronouncements on our unaudited condensed consolidated financial statements, see Note 2. Summary of Significant Accounting Policies of our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.