SPRUCE POWER HOLDING CORP Q1 FY2025 earnings call

• The first quarter results benefited from the acquisition of rooftop assets from NJR, with revenue up 30% and operating EBITDA up 15%. Balance sheet has close to $100 million in cash. - Actively seeking new acquisition opportunities meeting disciplined return hurdles. Focus on generating positive free cash flow through growth and scale in solar installations and cost containment. - Spruce PRO off to good start with ADT deal, with a deep pipeline of prospects. O&M expenses improved with new initiatives like onboarding experienced staff, technology investments, and revamped service call routing. - Hired Chris Hayden as Senior Vice President of IT and Enterprise Applications to optimize technology for scalability and customer experience. - Share repurchase program renewed, with no need to refinance non-recourse debt in 2025 and confidence in refinancing SP1 loan in 2026. - Differentiated from peers by not being a seller/installer of new solar installations, having no significant fixed costs, and focusing on maximizing value of existing assets.

Revenue for the first quarter was $23.8 million, up from $20.2 million in the fourth quarter and $18.3 million in the prior year period. Operating EBITDA was $12.3 million for the first quarter versus $10.7 million in the prior year period. Portfolio O&M expense was $3.9 million in the first quarter, down from $5.3 million in the fourth quarter. SG&A expense was $14.1 million in the first quarter, up from $13.5 million in the prior year period. Revenue contribution from the NJR acquisition was a key driver in the 30% revenue growth and 15% operating EBITDA increase.

• Anticipate operating EBITDA improvement for all quarters in 2025 relative to prior year periods. - Confident of refinancing SP1 loan due in April 2026 on like-for-like terms or more favorable options. - Optimistic that reduced spending, operating efficiencies, and revenue drivers will help achieve profitability and positive free cash flow.

• Market uncertainties affecting growth from acquisitions, as disciplined approach can slow growth in challenging market conditions. - Initially high O&M expenses due to inefficiencies in resource management, though improvements are ongoing. - Financing market developments could impact refinancing options for debt.

Q: How should we think about the scale of revenue opportunity for Spruce PRO with the ADT deal and lead times to critical mass, and updates on other Spruce PRO conversations?

A: Spruce PRO is capital light, leveraging existing infrastructure. Has a deep pipeline of prospects, aims to make another announcement soon and is confident in profitability.

Q: What does the environment look like for refinancing the SP1 loan in April 2026?

A: Confident in getting like-for-like terms or better, with feedback indicating ability to roll over the loan, and exploring more favorable credit options.

Q: Why is the SREC revenue contribution high for SP5, and is it recurring?

A: New Jersey has deep liquidity and high prices in the SREC market, and it is considered from a recurring level perspective.

Q: Comment on the CFO transition and plans to fill the role?

A: Sarah Wells is leaving after seven years, interim CFO to be announced soon, and actively searching for a permanent replacement.

Q: Durability of business model from policy perspective compared to peers?

A: Differentiated as not a seller/installer of new solar installations, not dependent on new sales or external capital markets, and benefits from utility rates going up, with deep liquidity in M&A opportunities