Spruce Power Holding (SPRU) investor relations material

Financial position and market valuation

• Cash per share stands at $5.07, with the majority unrestricted, while shares trade at about $1.45, highlighting a significant market inefficiency.

• No corporate-level debt exists; all debt is non-recourse at the project level and largely hedged through 2030.

• Adjusted cash flow from operations turned positive in Q2, marking a key milestone.

• O&M costs have been reduced by 52% year over year, reflecting aggressive cost management.

• Revenue increased 48% year over year to $33 million, and EBITDA rose 71% to $25 million.

Business model and growth strategy

• Operates as a third-party owner of 85,000 residential solar rooftops, focusing on cost-effective O&M and customer service.

• Growth is driven by M&A, programmatic acquisitions from homebuilders, and the Spruce Pro managed services platform.

• Spruce Pro offers high-margin, capital-light managed services to other solar asset owners, leveraging existing infrastructure.

• Not dependent on tax credits or government incentives, providing insulation from policy changes.

• Pipeline includes programmatic deals and a recent 60,000-rooftop managed services contract with ADT.

Market environment and competitive landscape

• The current administration's focus on fossil fuels and changes in federal incentives have minimal impact due to the business's independence from subsidies.

• The M&A market is favorable, with fewer bidders and financials divesting portfolios, creating acquisition opportunities.

• The company benefits from rising utility prices, as about half of its contracts are indexed to these rates.

• The solar market is viewed as resilient, with long-term tailwinds from increasing power consumption and economic viability even without subsidies.

• Focus remains on expanding in states where operational scale and service integration are achievable.