US distributed solar supplier Spruce Power has reported positive financial results with a 33.8% increase in adjusted EBITDA during the first half of 2023 compared to the previous year.
During Q1 2023, Spruce Power's adjusted EBITDA rose to US$4.67 million, reflecting a 33.8% increase from the previous year. Revenues for Q1 2023 remained consistent with Q4 2022, amounting to US$18.1 million. The company attributed the lower sequential revenues from portfolio generation to extreme weather conditions but offset the impact with higher-than-expected proceeds from solar renewable energy credits.
In Q1 2023, the net loss attributable to stockholders reached US$19.4 million, up from US$16.1 million in Q1 2022. This increase included a loss from continuing operations of US$15 million and a loss from discontinued operations of US$3.9 million.
Spruce Power's CEO, Christian Fong, highlighted the company's significant acquisition at the beginning of the year, which expanded their ownership and control of home solar assets and contracts by approximately 44%. The acquisition, known as Spruce Power 4, substantially increased their contracted customer payments and positioned the company for positive cash flow.
The Spruce Power 4 Portfolio encompasses approximately 22,500 residential solar contracts, enabling customers to purchase clean electricity generated by rooftop solar home power systems.
Looking ahead, Spruce Power plans to utilize its improved financial position in a disciplined manner to enhance shareholder value. This may involve acquiring high-quality portfolios of residential solar assets, repurchasing shares through their share repurchase program, or reducing debt.
As of March 31, 2023, Spruce Power owned over 72,000 home solar assets and contracts across 18 US states, with an average remaining contract life of approximately 13 years.
During the FY22 result announcement, Fong expressed the company's goal of expanding its system and customer contract portfolio to 90,000 by the end of 2024, representing an 80% growth over two years. Spruce Power plans to allocate up to 20% of its EBITDA towards capital improvements in its portfolio and servicing technologies, while the remainder will be utilized for acquisitions and debt repayment, among other measures.
