Spruce Power (NYSE:SPRU) reported a narrower first-quarter loss and sharply higher operating EBITDA as management pointed to cost reductions, operating efficiencies and stable recurring cash flow from its residential solar portfolio.
On the company’s first-quarter 2026 earnings call, Chief Executive Officer Chris Hayes said Spruce began the year with “continued progress” against its operational and financial priorities, including “meaningful year-over-year improvement in profitability and operating efficiency” while maintaining stable liquidity.
Operating EBITDA rises 49%
Operating EBITDA totaled approximately $18.4 million in the first quarter, up 49% from $12.3 million in the same period last year. Hayes said income from operations improved by more than $5.5 million year over year, reflecting cost discipline, lower operating expenses and efficiencies implemented through 2025.
“Our first quarter results demonstrate the strength of our operating platform and the durability of our long-term contracted revenue base,” Hayes said. “While top-line growth was modest during the quarter, our focus remains on maximizing cash generation, improving operating leverage, and positioning the business for sustainable long-term value creation.”
Net loss attributable to stockholders improved to approximately $2.9 million, compared with a net loss of approximately $15.3 million in the prior-year period. Cimino said the improvement was driven primarily by lower operating expenses and favorable year-over-year changes in the valuation of the company’s interest rate swaps.
Cost reductions drive margin improvement
Management highlighted continued execution of its “Project Streamline” cost optimization program. Hayes said operations and maintenance expense declined 70% year over year, while selling, general and administrative expense declined 21%.
Total operating expense for the quarter was $19.6 million, down from $25.5 million a year earlier. Core operating expenses, including SG&A and O&M, were approximately $12.7 million, compared with approximately $18.6 million in the first quarter of 2025.
- SG&A expense was approximately $11.6 million.
- O&M expense was approximately $1.2 million.
- Total operating expense was $19.6 million.
Cimino said the year-over-year improvement reflected lower labor costs, reduced professional services expense and operating efficiencies across the organization. He said the O&M reduction was driven by improved servicing efficiencies, lower third-party vendor activity and the completion of elevated service and meter upgrade activity that occurred in the prior-year period.
Management cautioned that some O&M activity shifted into later quarters of 2026. Cimino said the company expects O&M expenses to increase sequentially throughout the year while remaining generally in line with its full-year expectations.
Liquidity stable as refinancing work continues
Spruce ended the quarter with total cash and restricted cash of approximately $85.6 million, including about $50 million of unrestricted cash. The company repaid approximately $8.2 million of debt principal during the quarter as part of what Cimino described as a long-term deleveraging strategy.
Total outstanding debt as of March 31, 2026, was $668 million, with a blended interest rate of approximately 6.6%, including the impact of hedge arrangements.
Hayes said the company’s quarter-end financial statements include a going concern disclosure related to the accounting treatment associated with the current maturity classification of the SP1 Facility. He said Spruce completed an extension of the SP1 Facility during the quarter and is continuing refinancing discussions.
Cimino said the amendment extended the SP1 Facility maturity to October 2026, with a potential extension to January 2027, subject to achieving a signed term sheet. He said the company continues to evaluate refinancing alternatives and remains encouraged by ongoing discussions.
Management maintains 2026 outlook
Spruce’s portfolio includes approximately 84,000 customer contracts, which Hayes said generate predictable recurring cash flows supported by long-term agreements and diversified geographic exposure.
Looking ahead, management said its priorities include improving the efficiency and profitability of the operating platform, advancing refinancing initiatives, maintaining disciplined liquidity management and selectively pursuing growth opportunities. Hayes cited potential opportunities in portfolio acquisitions, programmatic partnerships and Spruce PRO servicing relationships where the company believes it can generate attractive returns without significant incremental overhead.
Cimino said the company’s current outlook for full-year 2026 remains generally consistent with prior expectations. He said Spruce expects full-year Operating EBITDA to remain in line with its budget, with lower first-quarter O&M spending and collections offset by higher servicing activity and collections in the second half of the year. He also said the company expects continued improvements in SG&A run rate as additional Streamline initiatives are implemented.
No analysts asked questions during the call’s question-and-answer session.
About Spruce Power (NYSE:SPRU)
Spruce Power is a renewable energy company that specializes in the ownership, operation and management of distributed solar energy assets. The company partners with solar developers to acquire residential and small-commercial solar portfolios, providing long-term performance monitoring, maintenance and customer support for system owners. By focusing on turnkey asset management, Spruce Power enables homeowners and businesses to benefit from solar power without the upfront risks and responsibilities of system ownership.
Headquartered in San Francisco, California, Spruce Power was founded in 2009 and has grown through strategic acquisitions and partnerships.
