Shares of Spruce Power Holding Corporation SPRU have declined 9.5% since the company reported its earnings for the quarter ended June 30, 2026. This compares with the S&P 500 index’s 0.4% growth over the same time frame. Over the past month, the stock has declined 16.8% against the S&P 500’s 2.9% growth.
Spruce Power reported second-quarter 2026 net income of 14 cents per share against a net loss of 17 cents per share a year earlier.
Revenues of $30.3 million denoted a 9% decline from $33.3 million in the year-ago quarter.
Despite the revenue decline, net income attributable to stockholders came in at $3.3 million against a net loss of $3 million a year earlier. Operating income increased 10% year over year to $9.8 million from $8.9 million, benefiting from lower operating costs. Total operating expenses fell 16% to $20.6 million from $24.4 million, while selling, general and administrative expenses declined 26% year over year.
Other Key Business Metrics
Operating EBITDA reached a record $26.5 million, up 7% from $24.6 million in the second quarter of 2025, as lower operating costs more than offset weaker revenues. Core operating expenses, comprising SG&A and operations and maintenance expenses, declined 21% to $13.8 million from $17.4 million. O&M expense, however, increased to $2.5 million from $2.2 million, reflecting additional efforts to reduce the outstanding service-ticket backlog.
The company’s portfolio generated approximately 196,000 megawatt-hours of power, up from 187,000 megawatt-hours a year earlier. Combined power purchase agreement and solar lease revenues increased 2% year over year to $22.5 million. Spruce Power owned cash flows from approximately 83,000 home solar assets and customer contracts across 18 states, with an average remaining contract life of about 10 years, while servicing approximately 60,000 third-party-owned systems.
Adjusted cash flow from operations was positive $4.8 million, although GAAP cash used in operating activities totaled $3.2 million, partly reflecting working-capital timing and higher SREC receivables. Spruce Power ended the quarter with $81.5 million of cash and restricted cash, including $44.7 million of unrestricted cash and repaid $7.9 million of debt principal.
Total assets decreased to $818.4 million as of June 30, 2026, from $837.3 million at 2025-end. In contrast, total stockholders’ equity increased to $120.4 million from $118.8 million over the same period.
For the second quarter, net cash used in operating activities increased to $3.2 million from $2.3 million in the year-ago quarter.
Factors Influencing the Headline Numbers
The revenue decline reflected several pressures outside the core contracted portfolio. Management said combined PPA and lease revenue increased by $0.4 million, but this was more than offset by a $1.4 million reduction in performance-based incentive revenue, a $1.1 million decline in SREC revenues and a net $0.9 million reduction in other revenue. Lower SP5 SREC production and a slower-than-anticipated ramp in Spruce Pro revenue were the principal revenue headwinds.
Profitability benefited from cost reductions implemented in 2025. SG&A fell to $11.3 million, primarily due to lower labor and recurring professional-services costs, although nonrecurring professional fees related to corporate strategy, refinancing and legal matters partially offset those savings. Management also attributed the improvement in net income to lower operating expenses and a favorable year-over-year change in the noncash valuation of interest-rate swaps.
Management Commentary
CEO Christopher Hayes said the quarter demonstrated the benefits of Spruce’s leaner operating model and structural efficiencies, with cost containment supporting profitability despite top-line fluctuations. Management is also expanding its in-house field-services approach from New Jersey into Southern California, aiming to lower servicing costs, shorten repair cycles and improve control over service quality.
Refinancing remains a near-term priority. Management said SP1 and SP2 maturities resulted in a going-concern disclosure and negative working capital at quarter-end. Spruce Power has begun preliminary lender discussions regarding SP1 and is evaluating refinancing alternatives for both facilities, with the objective of completing transactions ahead of their respective maturities.
Guidance
Management maintained its full-year forecast. PPA and lease revenue is expected to remain generally consistent with first-half portfolio performance and normal seasonal patterns, while overall revenues are expected to be in line with the first half. Higher second-half service activity is expected to largely offset first-half O&M favorability, leaving full-year O&M broadly consistent with initial expectations. Recurring SG&A is expected to decline from approximately $11 million per quarter toward approximately $10 million in the fourth quarter.
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Spruce Power Holding Corporation (SPRU): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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