spke-20230930


UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36559

Via Renewables, Inc.

(Exact name of registrant as specified in its charter)

Delaware

46-5453215

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

12140 Wickchester Ln, Suite 100

Houston, Texas 77079

(Address of principal executive offices)

(713) 600-2600

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbols(s)	Name of exchange on which registered
Class A common stock, par value $0.01 per share	VIA	The NASDAQ Global Select Market
8.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share	VIASP	The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

There were 3,232,701 shares of Class A common stock, 4,000,000 shares of Class B common stock and 3,567,543 shares of Series A Preferred Stock outstanding as of October 31, 2023.


VIA RENEWABLES, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
For the Quarter Ended September 30, 2023
						Page No.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2023 AND DECEMBER 31, 2022 (unaudited)						5

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022 (unaudited)						6

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022 (unaudited)						7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022 (unaudited)						11

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)						12

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS						38
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK						56
ITEM 4. CONTROLS AND PROCEDURES						58
PART II. OTHER INFORMATION						60
ITEM 1. LEGAL PROCEEDINGS						60
ITEM 1A. RISK FACTORS						60




ITEM 6. EXHIBITS						61

SIGNATURES						63

Table of Contents

Cautionary Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. These forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), can be identified by the use of forward-looking terminology including “may,” “should,” “could,” “likely,” “will,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “plan,” “intend,” “project,” or other similar words. Forward-looking statements appear in a number of places in this Report. All statements, other than statements of historical fact, included in this Report are forward-looking statements. The forward-looking statements include statements regarding the impacts of Winter Storm Uri, cash flow generation and liquidity, business strategy, prospects for growth and acquisitions, outcomes of legal proceedings, the timing, availability, ability to pay and implied amount of cash dividends and distributions on our Class A common stock and Series A Preferred Stock, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, objectives, beliefs of management, availability and terms of capital, competition, government regulation and general economic conditions. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurance that such expectations will prove correct.

The forward-looking statements in this Report are subject to risks and uncertainties. Important factors that could cause actual results to materially differ from those projected in the forward-looking statements include, but are not limited to:

•our ability to remediate the material weakness in our internal control over financial reporting, the identification of any additional material weakness in the future or otherwise failing to maintain an effective system of internal controls;

•the ultimate impact of the Winter Storm Uri, including future benefits or costs related to ERCOT market securitization efforts, and any corrective action by the State of Texas, ERCOT, the Railroad Commission of Texas, or the Public Utility Commission of Texas;

•changes in commodity prices, the margins we achieve, and interest rates;

•the sufficiency of risk management and hedging policies and practices;

•the impact of extreme and unpredictable weather conditions, including hurricanes, heat waves and other natural disasters;

•federal, state and local regulations, including the industry's ability to address or adapt to potentially restrictive new regulations that may be enacted by public utility commissions;

•our ability to borrow funds and access credit markets;

•restrictions and covenants in our debt agreements and collateral requirements;

•credit risk with respect to suppliers and customers;

•our ability to acquire customers and actual attrition rates;

•changes in costs to acquire customers;

•accuracy of billing systems;

•our ability to successfully identify, complete, and efficiently integrate acquisitions into our operations;

•significant changes in, or new changes by, the independent system operators (“ISOs”) in the regions we operate;

•competition; and

•the “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, in our Quarterly Reports on Form 10-Q in "Item 1A — Risk Factors" of this Report, and in our other public filings and press releases.

You should review the Risk Factors and other factors noted throughout or incorporated by reference in this Report that could cause our actual results to differ materially from those contained in any forward-looking statement. All forward-looking statements speak only as of the date of this Report. Unless required by law, we disclaim any obligation to publicly update or revise these statements whether as a result of new information, future events or otherwise. It is not possible for us to predict all risks, nor can we assess the impact of all factors on the business or

Table of Contents

the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Table of Contents

PART I. — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Table of Contents

VIA RENEWABLES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share counts)

(unaudited)


	September 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	45,137	$	33,658
Restricted cash	—		1,693
Accounts receivable, net of allowance for credit losses of $4,935 at September 30, 2023 and $4,335 at December 31, 2022	51,275		81,466
Accounts receivable—affiliates	4,569		6,455
Inventory	3,027		4,405
Fair value of derivative assets, net	166		1,632
Customer acquisition costs, net	5,005		3,530
Customer relationships, net	342		2,520

Deposits	8,230		10,568
Renewable energy credit asset	24,871		24,251

Other current assets	7,524		8,749
Total current assets	150,146		178,927
Property and equipment, net	4,758		4,691
Fair value of derivative assets, net	—		666
Customer acquisition costs, net	1,729		1,683
Customer relationships, net	225		481
Deferred tax assets	17,100		20,437
Goodwill	120,343		120,343
Other assets	2,775		3,722
Total assets	$	297,076	$	330,950

Liabilities, Series A Preferred Stock and Stockholders' Equity
Current liabilities:
Accounts payable	$	22,548	$	53,296
Accounts payable—affiliates	1,062		265
Accrued liabilities	10,413		8,431
Renewable energy credit liability	13,173		13,722
Fair value of derivative liabilities, net	13,497		16,132






Other current liabilities	58		322
Total current liabilities	60,751		92,168
Long-term liabilities:
Fair value of derivative liabilities, net	1,451		2,715

Long-term portion of Senior Credit Facility	105,000		100,000
Subordinated debt—affiliates	—		20,000




Other long-term liabilities	—		18
Total liabilities	167,202		214,901
Commitments and contingencies (Note 12)

Series A Preferred Stock, par value $0.01 per share, 20,000,000 shares authorized, 3,567,543 shares issued and outstanding at September 30, 2023 and December 31, 2022	88,045		87,713

Stockholders' equity:
Common Stock:

Class A common stock, par value $0.01 per share, 120,000,000 shares authorized, 3,261,620 shares issued and 3,232,701 shares outstanding at September 30, 2023 and 3,200,472 shares issued and 3,171,553 shares outstanding at December 31, 2022	32		32
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized, 4,000,000 shares issued and outstanding at September 30, 2023 and December 31, 2022	40		40


Additional paid-in capital	39,230		42,871
Accumulated other comprehensive loss	(40)		(40)
Retained earnings	12,038		2,073
Treasury stock, at cost, 28,919 shares at September 30, 2023 and December 31, 2022	(2,406)		(2,406)
Total stockholders' equity	48,894		42,570
Non-controlling interest in Spark HoldCo, LLC	(7,065)		(14,234)
Total equity	41,829		28,336
Total liabilities, Series A Preferred Stock and Stockholders' equity	$	297,076	$	330,950

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

VIA RENEWABLES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Revenues:
Retail revenues	$	109,753	$	117,187	$	337,499	$	343,592
Net asset optimization (expense) revenue	(936)		1,672		(5,568)		(480)
Other revenue	1,422		—		1,559		—
Total Revenues	110,239		118,859		333,490		343,112
Operating Expenses:
Retail cost of revenues	71,050		102,212		234,417		232,621
General and administrative	17,135		16,302		51,073		44,820
Depreciation and amortization	1,816		3,270		7,146		13,390
Total Operating Expenses	90,001		121,784		292,636		290,831
Operating income (loss)	20,238		(2,925)		40,854		52,281
Other (expense) income:
Interest expense	(2,233)		(2,002)		(7,377)		(5,129)
Interest and other income	9		11		96		265
Total other expenses	(2,224)		(1,991)		(7,281)		(4,864)
Income (loss) before income tax expense	18,014		(4,916)		33,573		47,417
Income tax expense (benefit)	3,355		(48)		6,599		8,726
Net income (loss)	$	14,659	$	(4,868)	$	26,974	$	38,691
Less: Net income (loss) attributable to non-controlling interests	7,140		(3,987)		11,661		21,981
Net income (loss) attributable to Via Renewables, Inc. stockholders	$	7,519	$	(881)	$	15,313	$	16,710
Less: Dividend on Series A Preferred Stock	2,708		2,026		7,892		5,677
Net income (loss) attributable to stockholders of Class A common stock	$	4,811	$	(2,907)	$	7,421	$	11,033







Net income (loss) attributable to Via Renewables, Inc. per share of Class A common stock
Basic	$	1.49	$	(0.92)	$	2.32	$	3.50
Diluted	$	1.47	$	(0.92)	$	2.29	$	3.48

Weighted average shares of Class A common stock outstanding
Basic	3,232		3,172		3,204		3,151
Diluted	7,232		3,172		7,204		3,173

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

VIA RENEWABLES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(in thousands)

(unaudited)


Nine Months Ended September 30, 2023
	Issued Shares of Class A Common Stock	Issued Shares of Class B Common Stock	Treasury Stock	Class A Common Stock		Class B Common Stock		Treasury Stock		Accumulated Other Comprehensive Loss		Additional Paid-in Capital		Retained Earnings		Total Stockholders' Equity		Non-controlling Interest		Total Equity


Balance at December 31, 2022	3,201	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	42,871	$	2,073	$	42,570	$	(14,234)	$	28,336
Stock based compensation	—	—	—			—		—		—		1,779		—		1,779		—		1,779
Restricted stock unit vesting	47		—	—		—		—		—		(186)		—		(186)		—		(186)
Consolidated net income	—	—	—	—		—		—		—		—		15,313		15,313		11,661		26,974
Stock issued - reverse stock split	14	—	—	—		—		—		—		—		—		—		—		—

Distributions paid to non-controlling unit holders	—	—	—	—		—		—		—		—		—		—		(4,308)		(4,308)
Dividends paid to Class A common stockholders ($0.90625 per share)	—	—	—	—		—		—		—		(2,874)		—		(2,874)		—		(2,874)
Dividends paid to Preferred Stockholders	—	—	—	—		—		—		—		(2,544)		(5,348)		(7,892)		—		(7,892)



Changes in ownership interest	—	—	—	—		—		—		—		184		—		184		(184)		—
Balance at September 30, 2023	3,262	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	39,230	$	12,038	$	48,894	$	(7,065)	$	41,829

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents


Three Months Ended September 30, 2023
	Issued Shares of Class A Common Stock	Issued Shares of Class B Common Stock	Treasury Stock	Class A Common Stock		Class B Common Stock		Treasury Stock		Accumulated Other Comprehensive Loss		Additional Paid-in Capital		Retained Earnings		Total Stockholders' Equity		Non-controlling Interest		Total Equity
Balance at June 30, 2023	3,260	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	38,559	$	7,227	$	43,412	$	(13,944)	$	29,468


Stock based compensation	—	—	—	—		—		—		—		485		—		485		—		485
Restricted stock unit vesting	2	—	—	—		—		—		—		—		—		—		—		—
Consolidated net income	—	—	—	—		—		—		—		—		7,519		7,519		7,140		14,659
Distributions paid to non-controlling unit holders	—	—	—	—		—		—		—		—		—		—		(75)		(75)

Dividends paid to Preferred Stockholders	—	—	—	—		—		—		—		—		(2,708)		(2,708)		—		(2,708)


Changes in Ownership Interest	—	—	—	—		—		—		—		186		—		186		(186)		—
Balance at September 30, 2023	3,262	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	39,230	$	12,038	$	48,894	$	(7,065)	$	41,829

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents


Nine Months Ended September 30, 2022
	Issued Shares of Class A Common Stock	Issued Shares of Class B Common Stock	Treasury Stock	Class A Common Stock		Class B Common Stock		Treasury Stock		Accumulated Other Comprehensive Loss		Additional Paid-in Capital		Retained Earnings (Deficit)		Total Stockholders' Equity		Non-controlling Interest		Total Equity
Balance at December 31, 2021	3,159	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	53,918	$	173	$	51,717	$	(3,168)	$	48,549


Stock based compensation	—	—	—	—		—		—		—		2,478		—		2,478		—		2,478
Restricted stock unit vesting	42		—	—		—		—		—		(471)		—		(471)		—		(471)
Consolidated net income	—	—	—	—		—		—		—		—		16,710		16,710		21,981		38,691

Distributions paid to non-controlling unit holders	—	—	—	—		—		—		—		—		—		—		(10,928)		(10,928)
Dividends paid to Class A common stockholders ($2.71875 per share)	—	—	—	—		—		—		—		—		(8,587)		(8,587)		—		(8,587)
Dividends paid to Preferred Stockholders	—	—	—	—		—		—		—		—		(5,677)		(5,677)		—		(5,677)



Changes in ownership interest	—	—	—	—		—		—		—		213		—		213		(213)		—
Balance at September 30, 2022	3,201	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	56,138	$	2,619	$	56,383	$	7,672	$	64,055

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents


Three Months Ended September 30, 2022
	Issued Shares of Class A Common Stock	Issued Shares of Class B Common Stock	Treasury Stock	Class A Common Stock		Class B Common Stock		Treasury Stock		Accumulated Other Comprehensive Loss		Additional Paid-in Capital		Retained Earnings (Deficit)		Total Stockholders' Equity		Non-controlling Interest		Total Equity
Balance at June 30, 2022	3,201	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	55,702	$	8,401	$	61,729	$	15,099	$	76,828


Stock based compensation	—	—	—	—		—		—		—		621		—		621		—		621

Consolidated net loss	—	—	—	—		—		—		—		—		(881)		(881)		(3,987)		(4,868)

Distributions paid to non-controlling unit holders	—	—	—	—		—		—		—		—		—		—		(3,625)		(3,625)
Dividends paid to Class A common stockholders ($0.90625 per share)	—	—	—	—		—		—		—		—		(2,874)		(2,874)		—		(2,874)
Dividends paid to Preferred Stockholders	—	—	—	—		—		—		—		—		(2,027)		(2,027)		—		(2,027)


Changes in ownership interest	—	—	—	—		—		—		—		(185)		—		(185)		185		—
Balance at September 30, 2022	3,201	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	56,138	$	2,619	$	56,383	$	7,672	$	64,055

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

VIA RENEWABLES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Nine Months Ended September 30,
	2023		2022
Cash flows from operating activities:
Net income	$	26,974	$	38,691
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization expense	7,146		13,390
Deferred income taxes	3,337		5,048

Stock based compensation	1,784		2,590
Amortization of deferred financing costs	619		919


Bad debt expense	2,717		2,895
Loss (gain) on derivatives, net	50,428		(55,815)
Current period cash settlements on derivatives, net	(51,767)		35,922

Other	126		43
Changes in assets and liabilities:
Decrease in accounts receivable	27,473		7,075
Decrease (increase) in accounts receivable—affiliates	1,886		(1,824)
Decrease (increase) in inventory	1,378		(3,292)
Increase in customer acquisition costs	(4,961)		(4,274)
Decrease in prepaid and other current assets	1,895		1,978

Decrease (increase) in other assets	641		(722)
Decrease in accounts payable and accrued liabilities	(29,334)		(19,771)
Increase (decrease) in accounts payable—affiliates	797		(60)
Decrease in other current liabilities	(264)		(1,475)
Decrease in other non-current liabilities	(18)		(107)
Net cash provided by operating activities	40,857		21,211
Cash flows from investing activities:
Purchases of property and equipment	(1,144)		(1,940)
Acquisition of Customers	—		(4,460)

Net cash used in investing activities	(1,144)		(6,400)
Cash flows from financing activities:

Borrowings on notes payable	258,000		229,000
Payments on notes payable	(253,000)		(271,000)
Net (paydown) borrowings on subordinated debt facility	(20,000)		20,000



Restricted stock vesting	(186)		(663)


Payment of dividends to Class A common stockholders	(2,874)		(8,587)
Payment of distributions to non-controlling unitholders	(4,308)		(10,928)
Payment of Preferred Stock dividends	(7,559)		(5,602)

Net cash used in financing activities	(29,927)		(47,780)
Increase (decrease) in Cash, cash equivalents and Restricted cash	9,786		(32,969)
Cash, cash equivalents and Restricted cash—beginning of period	35,351		75,320
Cash, cash equivalents and Restricted cash—end of period	$	45,137	$	42,351
Supplemental Disclosure of Cash Flow Information:
Non-cash items:
Property and equipment purchase accrual	$	15	$	(8)



Cash paid during the period for:
Interest	$	6,736	$	3,347
Taxes	$	2,671	$	280

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

VIA RENEWABLES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Formation and Organization

Organization

We are an independent retail energy services company that provides residential and commercial customers in competitive markets across the United States with an alternative choice for natural gas and electricity. The Company is a holding company whose primary asset consists of units in Spark HoldCo, LLC (“Spark HoldCo”). The Company is the sole managing member of Spark HoldCo, is responsible for all operational, management and administrative decisions relating to Spark HoldCo’s business and consolidates the financial results of Spark HoldCo and its subsidiaries. Spark HoldCo is the direct and indirect owner of the subsidiaries through which we operate our retail energy services. We conduct our retail energy services business through several brands across our service areas, including Electricity Maine, Electricity N.H., Major Energy, Provider Power Massachusetts, Spark Energy, and Verde Energy. Via Energy Solutions (“VES”) is a wholly owned subsidiary of the Company that offers broker services for retail energy customers. Via Wireless is a wholly owned subsidiary of the Company that offers wireless services and equipment to wireless customers.

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) as it applies to interim financial statements. This information should be read along with our consolidated financial statements and notes contained in our annual report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”). Our unaudited condensed consolidated financial statements are presented on a consolidated basis and include all wholly-owned and controlled subsidiaries. We account for investments over which we have significant influence but not a controlling financial interest using the equity method of accounting. All significant intercompany transactions and balances have been eliminated in the unaudited condensed consolidated financial statements.

In the opinion of the Company's management, the accompanying condensed consolidated financial statements reflect all adjustments that are necessary to fairly present the financial position, the results of operations, the changes in equity and the cash flows of the Company for the respective periods. Such adjustments are of a normal recurring nature, unless otherwise disclosed.

Use of Estimates and Assumptions

The preparation of our condensed consolidated financial statements requires estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of revenues and expenses during the period. Actual results could materially differ from those estimates.

Relationship with our Founder, Majority Shareholder, and Chief Executive Officer

W. Keith Maxwell, III (our "Founder") is the Chief Executive Officer, a director and the owner of a majority of the voting power of our common stock through his ownership of NuDevco Retail, LLC ("NuDevco Retail") and Retailco, LLC ("Retailco"). Retailco is a wholly owned subsidiary of TxEx Energy Investments, LLC ("TxEx"), which is wholly owned by Mr. Maxwell. NuDevco Retail is a wholly owned subsidiary of NuDevco Retail

Table of Contents

Holdings LLC ("NuDevco Retail Holdings"), which is a wholly owned subsidiary of Electric HoldCo, LLC, which is also a wholly owned subsidiary of TxEx.

ERCOT Securitization Proceeds

In June 2022, the Company received $9.6 million from Electric Reliability Council of Texas ("ERCOT") related to Public Utility Regulatory Act ("PURA") Subchapter N Securitization financing. The Company accounted for the proceeds received as the recovery of costs of sales and services from a vendor under FASB ASC Topic 705, Cost of Sales and Services reflected as a reduction of retail cost of revenues within our consolidated statements of operations for the nine months ended September 30, 2022, as that is where the initial costs related to the impact of Winter Storm Uri were recorded.

New Accounting Standards Recently Adopted

There have been no changes to our significant accounting policies as disclosed in our 2022 Form 10-K.

Standards Being Evaluated/Standards Not Yet Adopted

The Company considers the applicability and impact of all ASUs. New ASUs were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial statements.

3. Revenues

Our revenues are derived primarily from the sale of natural gas and electricity to customers, including affiliates. Revenue is measured based upon the quantity of gas or power delivered at prices contained or referenced in the customer's contract, and excludes any sales incentives (e.g., rebates) and amounts collected on behalf of third parties (e.g., sales tax).

Our revenues also include asset optimization activities. Asset optimization activities consist primarily of purchases and sales of gas that meet the definition of trading activities per FASB ASC Topic 815, Derivatives and Hedging. They are therefore excluded from the scope of FASB ASC Topic 606, Revenue from Contracts with Customers.

Other revenue is derived from contracts with customers through the provision of wireless and other services and the sale of wireless equipment.

Revenues for electricity, natural gas, and related services are recognized as the Company transfers the promised goods and services to the customer. Electricity and natural gas products may be sold as fixed-price or variable-price products. The typical length of a contract to provide electricity and/or natural gas is twelve months. Customers are billed and generally pay at least monthly, based on usage. Electricity and natural gas sales that have been delivered but not billed by period end are estimated and recorded as accrued unbilled revenues based on estimates of customer usage since the date of the last meter read provided by the utility. Volume estimates are based on forecasted volumes and estimated residential and commercial customer usage. Unbilled revenues are calculated by multiplying these volume estimates by the applicable rate by customer class (residential or commercial). Estimated amounts are adjusted when actual usage is known and billed.

The following table discloses revenue for our reportable segments by primary geographical market, customer type, and customer credit risk profile (in thousands). The table also includes a reconciliation of the disaggregated revenue to revenue by reportable segment (in thousands).

Table of Contents


	Reportable Segments
	Three Months Ended September 30, 2023				Three Months Ended September 30, 2022
	Retail Electricity (a)		Retail Natural Gas		Total Reportable Segments		Retail Electricity (a)		Retail Natural Gas		Total Reportable Segments

Primary markets (b)
New England	$	30,119	$	993	$	31,112	$	31,366	$	821	$	32,187
Mid-Atlantic	32,858		3,478		36,336		33,761		5,281		39,042
Midwest	9,384		1,089		10,473		12,165		1,617		13,782
Southwest	25,494		6,338		31,832		27,678		4,498		32,176
	$	97,855	$	11,898	$	109,753	$	104,970	$	12,217	$	117,187

Customer type
Commercial	$	11,655	$	6,577	$	18,232	$	12,560	$	6,661	$	19,221
Residential	87,012		5,411		92,423		97,177		5,047		102,224
Unbilled revenue (c)	(812)		(90)		(902)		(4,767)		509		(4,258)
	$	97,855	$	11,898	$	109,753	$	104,970	$	12,217	$	117,187

Customer credit risk
POR	$	55,603	$	4,078	$	59,681	$	63,444	$	6,202	$	69,646
Non-POR	42,252		7,820		50,072		41,526		6,015		47,541
	$	97,855	$	11,898	$	109,753	$	104,970	$	12,217	$	117,187


	Reportable Segments
	Nine Months Ended September 30, 2023				Nine Months Ended September 30, 2022
	Retail Electricity (a)		Retail Natural Gas		Total Reportable Segments		Retail Electricity (a)		Retail Natural Gas		Total Reportable Segments

Primary markets (b)
New England	$	89,268	$	6,060	$	95,328	$	84,463	$	7,331	$	91,794
Mid-Atlantic	84,548		28,753		113,301		89,304		32,396		121,700
Midwest	24,342		13,409		37,751		31,396		14,358		45,754
Southwest	57,289		33,830		91,119		70,138		14,206		84,344
	$	255,447	$	82,052	$	337,499	$	275,301	$	68,291	$	343,592

Customer type
Commercial	$	31,301	$	47,021	$	78,322	$	33,119	$	37,854	$	70,973
Residential	227,669		49,158		276,827		246,662		36,392		283,054
Unbilled revenue (c)	(3,523)		(14,127)		(17,650)		(4,480)		(5,955)		(10,435)
	$	255,447	$	82,052	$	337,499	$	275,301	$	68,291	$	343,592

Customer credit risk
POR	$	146,826	$	36,432	$	183,258	$	166,346	$	41,147	$	207,493
Non-POR	108,621		45,620		154,241		108,955		27,144		136,099
	$	255,447	$	82,052	$	337,499	$	275,301	$	68,291	$	343,592

(a) Retail Electricity includes Services

Table of Contents

(b) The primary markets include the following states:

•New England - Connecticut, Maine, Massachusetts and New Hampshire;

•Mid-Atlantic - Delaware, Maryland (including the District of Columbia), New Jersey, New York, Pennsylvania and Virginia;

•Midwest - Illinois, Indiana, Michigan and Ohio; and

•Southwest - Arizona, California, Colorado, Florida, Nevada and Texas.

(c) Unbilled revenue is recorded in total until it is actualized, at which time it is categorized between commercial and residential customers.

Reconciliation to Consolidated Financial Information

A reconciliation of the reportable segment operating revenues to consolidated revenues is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total Reportable Segments Revenue	$	109,753	$	117,187	$	337,499	$	343,592
Net asset optimization (expense) revenue	(936)		1,672		(5,568)		(480)
Other Revenue	1,422		—		1,559		—
Total Revenues	$	110,239	$	118,859	$	333,490	$	343,112

We record gross receipts taxes on a gross basis in retail revenues and retail cost of revenues. During the three months ended September 30, 2023 and 2022, our retail revenues included gross receipts taxes of $0.3 million and $0.4 million, respectively, and our retail cost of revenues included gross receipts taxes of $1.5 million and $1.4 million, respectively. During the nine months ended September 30, 2023 and 2022, our retail revenues included gross receipt taxes of $0.8 million and $1.0 million, respectively, and our retail cost of revenues included gross receipts taxes of $4.1 million and $4.0 million, respectively.

Accounts receivables and Allowance for Credit Losses

The Company conducts business in many utility service markets where the local regulated utility purchases our receivables, and then becomes responsible for billing the customer and collecting payment from the customer (“POR programs”). These POR programs result in substantially all of the Company’s credit risk being linked to the applicable utility, which generally has an investment-grade rating, and not to the end-use customer. The Company monitors the financial condition of each utility and currently believes its receivables are collectible.

In markets that do not offer POR programs or when the Company chooses to directly bill its customers, certain receivables are billed and collected by the Company. The Company bears the credit risk on these accounts and records an appropriate allowance for doubtful accounts to reflect any losses due to non-payment by customers. The Company’s customers are individually insignificant and geographically dispersed in these markets. The Company writes off customer balances when it believes that amounts are no longer collectible and when it has exhausted all means to collect these receivables.

For trade accounts receivables, the Company accrues an allowance for credit losses by business segment by pooling customer accounts receivables based on similar risk characteristics, such as customer type, geography, aging analysis, payment terms, and related macro-economic factors. Expected credit loss exposure is evaluated for each of our accounts receivables pools. Expected credits losses are established using a model that considers historical collections experience, current information, and reasonable and supportable forecasts. The Company writes off accounts receivable balances against the allowance for credit losses when the accounts receivable is deemed to be uncollectible.

Table of Contents

A rollforward of our allowance for credit losses for the nine months ended September 30, 2023 are presented in the table below (in thousands):




Balance at December 31, 2022	$	(4,335)

Current period credit loss provision	(2,717)
Write-offs	2,200
Recovery of previous write-offs	(83)
Balance at September 30, 2023	$	(4,935)

4. Equity

Non-controlling Interest

We hold an economic interest and are the sole managing member in Spark HoldCo, with affiliates of our Founder holding the remaining economic interests in Spark HoldCo. As a result, we consolidate the financial position and results of operations of Spark HoldCo, and reflect the economic interests owned by these affiliates as a non-controlling interest. The Company and affiliates owned the following economic interests in Spark HoldCo at September 30, 2023 and December 31, 2022, respectively.


	The Company		Affiliated Owners
September 30, 2023	44.92	%	55.08	%
December 31, 2022	44.45	%	55.55	%

The following table summarizes the portion of net income and income tax expense attributable to non-controlling interest (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Net income (loss) before taxes allocated to non-controlling interest	$	8,398	$	(3,909)	$	14,021	$	23,432
Less: Income tax expense allocated to non-controlling interest	1,258		78		2,360		1,451



Net income (loss) attributable to non-controlling interests	$	7,140	$	(3,987)	$	11,661	$	21,981

Class A Common Stock and Class B Common Stock

Holders of the Company's Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or by our certificate of incorporation.

Reverse Stock Split

On March 20, 2023, the Company’s shareholders approved at a special meeting a proposal by the Company’s Board of Directors to consummate a reverse stock split of the Company’s Class A common stock at a ratio between 1 for 2 to 1 for 5 and (ii) Class B common stock at a ratio between 1 for 2 to 1 for 5, with such ratios to be determined by the Chief Executive Officer or the Chief Financial Officer, or to determine not to proceed with the reverse stock split, during a period of time not to exceed the one-year anniversary of the special meeting date (the “Reverse Stock Split”).

On March 20, 2023, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation with the Delaware Secretary of State to effect the Reverse Stock Split at a ratio of 1 to 5

Table of Contents

for each issued and outstanding share of Class A common stock and Class B common stock as of March 21, 2023 at 5:30 PM ET. The Class A common stock began trading on a post-split basis on March 22, 2023.

No fractional shares were issued as a result of the Reverse Stock Split and it did not impact the par value of the Class A common stock or Class B common stock. Any fractional shares that would otherwise have resulted from the Reverse Stock Split were rounded up to the next whole number. The number of authorized shares of Common Stock remained unchanged at 120,000,000 shares of Class A common stock and 60,000,000 shares of Class B common stock.

All shares of Class A common stock and Class B common stock and per share amounts in the accompanying consolidated financial statements and related notes have been retrospectively restated to reflect the effect of the Reverse Stock Split effective March 21, 2023.

Dividends on Class A Common Stock

Dividends declared for the Company's Class A common stock are reported as a reduction of retained earnings, or a reduction of additional paid in capital to the extent retained earnings are exhausted. During the three and nine months ended September 30, 2023, we paid zero and $2.9 million in dividends to the holders of the Company's Class A common stock.

If we pay our stated dividends to holders of our Class A common stock, our subsidiary, Spark HoldCo is required to make corresponding distributions to holders of its units, including those holders that own our Class B common stock (our non-controlling interest holder). As a result, during the three and nine months ended September 30, 2023, Spark HoldCo made corresponding distributions of zero and $3.6 million to our non-controlling interest holders.

In April 2023, we announced that our Board of Directors elected to temporarily suspend the quarterly cash dividend on the Class A common stock. During the three months ended September 30, 2023, we did not pay dividends to the holders of the Company's Class A common stock and did not make corresponding distributions to our non-controlling interest holders.

Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income attributable to stockholders (the numerator) by the weighted-average number of Class A common shares outstanding for the period (the denominator). Class B common shares are not included in the calculation of basic earnings per share because they are not participating securities and have no economic interests. Diluted earnings per share is similarly calculated except that the denominator is increased by potentially dilutive securities.

The following table presents the computation of basic and diluted income per share for the three and nine months ended September 30, 2023 and 2022 (in thousands, except per share data):

Table of Contents


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income (loss) attributable to Via Renewables, Inc. stockholders	$	7,519	$	(881)	$	15,313	$	16,710
Less: Dividend on Series A Preferred Stock	2,708		2,026		7,892		5,677
Net income (loss) attributable to stockholders of Class A common stock	$	4,811	$	(2,907)	$	7,421	$	11,033

Basic weighted average Class A common shares outstanding	3,232		3,172		3,204		3,151
Basic income (loss) per share attributable to stockholders	$	1.49	$	(0.92)	$	2.32	$	3.50

Net income (loss) attributable to stockholders of Class A common stock	$	4,811	$	(2,907)	$	7,421	$	11,033
Effect of conversion of Class B common stock to shares of Class A common stock	5,803		—		9,088		—

Diluted net income (loss) attributable to stockholders of Class A common stock	$	10,614	$	(2,907)	$	16,509	$	11,033

Basic weighted average Class A common shares outstanding	3,232		3,172		3,204		3,151
Effect of dilutive Class B common stock	4,000		—		4,000		—

Effect of dilutive restricted stock units	—		—		—		22
Diluted weighted average shares outstanding	7,232		3,172		7,204		3,173

Diluted income (loss) per share attributable to stockholders	$	1.47	$	(0.92)	$	2.29	$	3.48

The computation of diluted earnings per share for the three and nine months ended September 30, 2022, excludes 4.0 million and 4.0 million shares of Class B common stock because the effect of their conversion was antidilutive. The Company's outstanding shares of Series A Preferred Stock were not included in the calculation of diluted earnings per share because they contain only contingent redemption provisions that have not occurred.

Variable Interest Entity

Spark HoldCo is a variable interest entity due to its lack of rights to participate in significant financial and operating decisions and its inability to dissolve or otherwise remove its management. Spark HoldCo owns all of the outstanding membership interests in each of our operating subsidiaries except VES. We are the sole managing member of Spark HoldCo, manage Spark HoldCo's operating subsidiaries through this managing membership interest, and are considered the primary beneficiary of Spark HoldCo. The assets of Spark HoldCo cannot be used to settle our obligations except through distributions to us, and the liabilities of Spark HoldCo cannot be settled by us except through contributions to Spark HoldCo. The following table includes the carrying amounts and classification of the assets and liabilities of Spark HoldCo that are included in our condensed consolidated balance sheet as of September 30, 2023 and December 31, 2022 (in thousands):

Table of Contents


	September 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	44,539	$	33,267
Accounts receivable	50,689		81,363

Other current assets	50,812		61,162
Total current assets	146,040		175,792
Non-current assets:
Goodwill	120,343		120,343

Other assets	11,106		13,675
Total non-current assets	131,449