Spruce Power (SPRU) Q4 2025 Earnings Transcript

Chief Executive Officer — Christopher Hayes Director of Investor Relations — Julia Gasbarre Need a quote from a Motley Fool analyst? Email pr@fool.com Christopher Hayes: Thanks, Julia. Good afternoon, everyone. 2025 was a breakout year for Spruce and our fourth quarter capped it with exceptional momentum across the business. I could not be prouder of what our team accomplished. We delivered strong growth, significantly expanded margins and fundamentally improved the efficiency and scalability of our platform. For the fourth quarter, revenue was approximately $24 million, up 19% year-over-year, and operating EBITDA exceeded $17 million, reflecting both portfolio growth and meaningful cost improvements. For the full year, revenue increased 36% versus 2024, underscoring the strength of our platform and the impact of the NJR acquisition. Importantly, this growth was accompanied by substantial operating leverage. In the fourth quarter, O&M expense declined 64% year-over-year and SG&A declined 16% as we executed on our cost optimization initiatives. These gains are structural in nature and position us to drive continued margin expansion as we scale. We saw a meaningful inflection in cash generation. Adjusted cash flow from operations was positive $5.1 million in the quarter compared to negative $4.1 million in the prior year period, reflecting both improved operating performance and the growing contribution from our portfolio. At the same time, we continued to delever, repaying $35.1 million of debt during 2025, increasing our enterprise value. The shift in our operating income underscores our breakout year. For the full year 2025, income from operations was positive $17.9 million compared to negative $50.4 million in the prior year. Operating EBITDA was $80.1 million for the full year 2025, a 49% increase versus 2024. Taken together, these results demonstrate the strength of our model, a growing base of long-term contracted cash flows, improving unit economics and a platform that becomes more efficient as it scales. Before turning to our strategy, I want to address our financing process and the going concern disclosure you will see in our upcoming 10-K. As part of our capital strategy, we made a deliberate decision to extend our existing SP1 facility to create additional flexibility as we evaluate a broader refinancing opportunity. Rather than a near-term single portfolio solution, we chose to position the company to execute a more comprehensive transaction that could include SP1, SP2 and SP3. With the SP1 extension now complete, we are moving aggressively on a more comprehensive solution. We believe this approach maximizes optionality, enhances long-term financing efficiency and better aligns our capital structure with the scale of the platform we have built. The going concern disclosure is driven by accounting requirements related to the timing of this process. It is not reflective of our operating performance or lender engagement. We are encouraged by the level of interest and support we have seen and remain confident in our ability to execute a financing solution that strengthens the business and supports future growth. Looking ahead, our strategy remains focused on 3 key growth drivers. First, acquiring installed residential solar portfolios where our platform can unlock incremental value through operational improvements; second, expanding programmatic partnerships with developers and originators, allowing us to efficiently grow our asset base; and third, scaling Spruce Pro, our capital-light servicing platform, which we believe represents a significant and underappreciated opportunity to grow revenue and expand margins without deploying capital. Across each of these areas, our operating capabilities, cost structure and experience managing distributed solar assets position us to execute at scale. In closing, we exited 2025 with strong momentum, improved profitability, solid cash position and a clear path to continued growth. We are confident in the trajectory of the business and excited about the opportunities ahead in 2026. With that, I ll turn the call over to Tom. Thomas Cimino: Thanks, Chris, and good afternoon, everyone. I ll begin with our fourth quarter financial results. For the fourth quarter 2025, revenue totaled $24 million compared to $20.2 million in the fourth quarter 2024. The increase was again primarily attributable to the residential solar portfolio acquired from NJR in November 2024 as well as higher solar renewable energy credit revenue. Sequentially, revenue declined from the third quarter, which is consistent with the seasonal pattern of solar production and customer payments, particularly during the winter months when solar generation is lower. Turning to expenses. Total operating expense was $21.8 million for the quarter compared to $26.7 million in the year earlier period. Core operating expenses, which include SG&A and O&M totaled $14.9 million compared with $20.7 million

Spruce Power (SPRU) Q4 2025 Earnings Transcript

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Spruce Power (SPRU) Q4 2025 Earnings Transcript

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