In the third quarter of 2023, Spruce Power, a leading distributed solar asset owner in the United States, announced a notable uptick in revenues and adjusted EBITDA. The company's portfolio of residential solar assets and contracts surpassed 75,000, contributing to revenues of US$23.3 million, up from US$22.8 million in the previous quarter and US$18.1 million in the first quarter of the year.
The year-on-year comparison revealed a remarkable growth, with revenues skyrocketing over fourfold from just over US$5 million in Q3 2022. Adjusted EBITDA for Q3 2023 reached US$14.9 million, showcasing a positive trajectory from the US$13.8 million reported in Q2.
However, amidst the financial success, Spruce Power reported an adjusted loss attributable to stockholders of US$1.2 million, while the net loss attributable to stockholders stood at US$19.3 million.
Christian Fong, CEO of Spruce, attributed the solid third-quarter results to the company's commitment to a low-cost customer acquisition strategy. Fong highlighted the addition of approximately 25,000 home solar assets and contracts in the current year, resulting in record business cash inflows during Q3.
Sarah Wells, Spruce's CFO, emphasized the step-change growth in the portfolio of home solar assets and contracts, building a robust recurring cash flow base. Wells acknowledged that since the merger with XL Fleet in December 2022, Spruce had been managing legacy legal issues, with resolutions reached in September 2023, allowing the company to focus on enhancing positive cash flow from its core distributed energy business.
Addressing past legal matters, Wells stated, “We're pleased to move past these legacy XL Fleet issues and continue to focus on growing the positive cash flow from our core distributed energy business.” She reiterated the company's expectation for business cash inflows of US$120 to US$130 million on an annual run rate basis.
In December 2022, XL Fleet, an electric vehicle solutions provider, acquired Spruce Power for approximately US$58 million in cash and assumed debt of around US$542 million. Legal matters arising from the acquisition were resolved in September 2023.
The company further expanded its solar portfolio in August by acquiring 2,400 residential solar systems and contracts in California, New Jersey, and Massachusetts. Spruce financed the acquisition, totaling approximately US$20.9 million, through proceeds from the concurrent upsizing of an existing credit facility.
Notably, Spruce Power faced a setback in April when it missed a listing on the New York Stock Exchange (NYSE) due to its stock price consistently being below US$1 for the 30th consecutive day as of March 27, 2023.