Spruce Power Holding Corporation

Thank you for standing by. My name is Jordan, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Spruce Power Fourth Quarter 2025 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. If you'd like to ask a question during the question and answer session, Simply press star followed by the number one on your telephone keypad. I would now like to turn the conference over to Julia Casari, Corporate Development and Investor Relations. You may begin.

Thank you, operator. Good afternoon, everyone, and welcome to Spruce Power's fourth quarter and full year 2025 earnings conference call. Joining me today are Chris Hayes, Spruce's chief executive officer, and Tom Cimino, the company's chief financial officer. Before we begin, I would like to remind you that we will comment on our financial performance using both GAAP and non-GAAP financial measures. Important information about these non-GAAP financial measures, including reconciliations from those comparable GAAP measures, is included in our earnings release for the fourth quarter of 2025, which is available on the Investor Relations section of our website. Our discussion today will also include forward-looking statements to reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our earnings release and SEC filings for a discussion of these risk factors. With that, I will now turn the call over to Chris Hayes, Chief Executive Officer of Spruce Power. Chris?

Thanks, Julia. Good afternoon, everyone. 2025 was a breakout year for Spruce, and our fourth quarter capped it with exceptional momentum across the business. I could not be prouder of what our team accomplished. We delivered strong growth, significantly expanded margins, and fundamentally improved the efficiency and scalability of our platform. For the fourth quarter, revenue was approximately 24 million, up 19% year over year, and operating EBITDA exceeded 17 million, reflecting both portfolio growth and meaningful cost improvements. For the full year, revenue increased 36% versus 2024, underscoring the strength of our platform and the impact of the NJR acquisition. Importantly, this growth was accompanied by substantial operating leverage. In the fourth quarter, O&M expense declined 64% year-over-year and SG&A declined 16% as we executed on our cost optimization initiatives. These gains are structural in nature and position us to drive continued margin expansion as we scale. We saw a meaningful inflection in cash generation. Adjusted cash flow from operations was positive $5.1 million in the quarter compared to negative $4.1 million in the prior year period, reflecting both improved operating performance and the growing contribution from our portfolio. At the same time, we continued to delever, repaying $35.1 million of debt during 2025, increasing our enterprise value. The shift in our operating income underscores our breakout year. For the full year 2025, income from operations was positive $17.9 million compared to negative $50.4 million in the prior year. Operating EBITDA was $80.1 million for the full year 2025, a 49% increase versus 2024. Taken together, these results demonstrate the strength of our model. a growing base of long-term contracted cash flows, improving unit economics, and a platform that becomes more efficient as it scales. Before turning to our strategy, I want to address our financing process and the going concern disclosure you will see in our upcoming 10K. As part of our capital strategy, we made a deliberate decision to extend our existing SP1 facility to create additional flexibility as we evaluate a broader refinancing opportunity. Rather than a near-term single portfolio solution, we chose to position a company to execute a more comprehensive transaction that could include SP1, SP2, and SP3. With the SP1 extension now complete, we are moving aggressively on a more comprehensive solution. We believe this approach maximizes optionality enhances long-term financing efficiency, and better aligns our capital structure with the scale of the platform we have built. The going concern disclosure is driven by accounting requirements related to the timing of this process. It is not reflective of our operating performance or lender engagement. We are encouraged by the level of interest and support we've seen and remain confident in our ability to execute a financing solution that strengthens the business and supports future growth. Looking ahead, our strategy remains focused on three key growth drivers. First, acquiring installed residential solar portfolios where our platform can unlock incremental value through operational improvements. Second, expanding programmatic partnerships with developers and originators, allowing us to efficiently grow our asset base. And third, scaling Spruce Pro, our capital light servicing platform, which we believe represents a significant and underappreciated opportunity to grow revenue and expand margins without deploying capital. Across each of these areas, our operating capabilities, cost structure, and experience managing distributed solar assets position us to execute at scale. In closing, we exited 2025 with strong momentum, improved profitability, solid cash position, and a clear path to continued growth. We are confident in the trajectory of the business and excited about the opportunities ahead in 2026. With that, I'll turn the call over to Tom.