Q1 2026 Genie Energy Ltd Earnings Call

May 14, 2026

Speaker #4: Good morning, and welcome to the Genie Energy Ltd.'s first quarter 2026 earnings call. In today's presentation, Genie Energy management will discuss Genie's financial and operational results for the three months ended March 31, 2026.

Operator: Good morning. Welcome to the Genie Energy Ltd.'s Q1 2026 Earnings Call. In today's presentation, Genie Energy management will discuss Genie's financial and operational results for the three months ended 31st March 2026. During prepared remarks by Genie's Chief Executive Officer Michael Stein and Chief Financial Officer Avi Goldin, all participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After Avi Goldin's remarks, Michael and Avi will take questions from investors. Any forward-looking statements made during this conference call, either in the prepared remarks or in the Q&A session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates.

Speaker #4: During prepared remarks by Genie's chief executive officer, Michael Stein, and chief financial officer, Avi Goldin, all participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0.

Speaker #4: After Avi Goldin's remarks, Michael and Avi will take questions from investors. Any forward-looking statements made during this conference call, either in the prepared remarks or in the Q&A session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates.

Speaker #4: These risks and uncertainties include but are not limited to the specific risks and uncertainties discussed in the report that Genie Energy files periodically with the SEC.

Operator: These risks and uncertainties include, but are not limited to, the specific risks and uncertainties discussed in the report that Genie Energy files periodically with the SEC. Genie Energy assumes no obligation either to update any forward-looking statements that they have made or may make, or to update the factors that may cause actual results to differ materially from those that they may forecast. In their presentation or in the Q&A session, Genie Energy's management may refer to Adjusted EBITDA and other non-GAAP measures. A schedule provided in the Genie Energy earnings release reconciles Adjusted EBITDA to the nearest corresponding GAAP measures. Please note that the Genie Energy earnings release is available on the investor relations page of the Genie website. The earnings release has also been filed on a Form 8-K with the SEC. I will now turn the conference over to Michael Stein. Sir, you may begin.

Speaker #4: Genie Energy assumes no obligation either to update any forward-looking statements that they have made or may make, or to update the factors that may cause actual results to differ materially from those that they may forecast.

Speaker #4: In their presentation or in the Q&A session, Genie Energy's management's may refer to adjusted EBITDA and other non-GAAP measures. A schedule provided in the Genie Energy earnings release reconciles adjusted EBITDA to the nearest corresponding GAAP measures.

Speaker #4: Please note that the Genie Energy earnings release is available on the investor relations page of the Genie website. The earnings release is also been filed on a Form 8K with the SEC.

Speaker #4: I will now turn the conference over to Michael Stein. Sir, you may begin.

Speaker #5: Thank you, operator. Genie's first quarter results were mixed, as investments in customer acquisition at GRE and a new business initiative that grew, combined with weakness in retail margins, negatively impacted our bottom line despite record quarterly revenue.

Michael Stein: Thank you, operator. Genie's Q1 results were mixed as investments in a customer acquisition at GRE and in new business initiatives that grew combined with weakness in retail margins negatively impacted our bottom line despite record quarterly revenue. As a result, we are lowering full year 2026 guidance to $32.5 to 40 million in Adjusted EBITDA from the prior range of $40 to 50 million. At GRE, challenging commodity market conditions in the first 2 months of the Q1, caused by extreme cold, compressed margins for both electricity and gas. Thankfully, in March, margins returned to normalized levels in line with our long-run historical averages. We also increased our customer acquisition spend this quarter to acquire 84,000 new retail customers during the Q1.

Speaker #5: As a result, we are lowering full-year 2026 guidance to 32.5 to 40 million dollars in adjusted EBITDA from the prior range of 40 to 50 million dollars.

Speaker #5: At GRE, challenging commodity market conditions in the first two months of the quarter caused by extreme cold, compressed margins for both electricity and gas, thankfully in March, margins returned to normalized levels in line with our long run historical averages.

Speaker #5: We also increased our customer acquisition spend this quarter to acquire 84,000 new retail customers during the first quarter. At March 31st, we had 354,000 RCEs and 364,000 meters, achieving net increases of 25,000 RCEs and 18,000 meters in just the first quarter of the year.

Michael Stein: At 31 March, we had 354,000 RCEs and 364,000 meters, achieving net increases of 25,000 RCEs and 18,000 meters in just the Q1 of the year. Unlike last year at this time, when we held a significant number of meters through municipal aggregation deals, our current meters are of higher value. Over the past 12 months, we have significantly reduced the number of low-margin municipal aggregation customers in our book. At GRE, our performance in the Q1 reflected increased investment in several early-stage growth initiatives and a further write-down of our solar panel inventory. Despite the tough Q1, we expect to see significant improvement throughout 2026. GRE is a resilient, strongly cash-generated business that by its nature will have episodes of margin compression like this one, but also opportunities for exceptional profitability.

Michael Stein: At 31st March, we had 354,000 RCEs and 364,000 meters, achieving net increases of 25,000 RCEs and 18,000 meters in just the Q1 of the year. Unlike last year at this time, when we held a significant number of meters through municipal aggregation deals, our current meters are of higher value. Over the past 12 months, we have significantly reduced the number of low-margin municipal aggregation customers in our book. At GRE, our performance in the Q1 reflected increased investment in several early-stage growth initiatives and a further write-down of our solar panel inventory. Despite the tough Q1, we expect to see significant improvement throughout 2026. GRE is a resilient, strongly cash-generated business that by its nature will have episodes of margin compression like this one, but also opportunities for exceptional profitability.

Speaker #5: And unlike last year at this time, when we held a significant number of meters through municipal aggregation deals, our current meters are of higher value.

Speaker #5: Over the past 12 months, we have significantly reduced the number of low-margin municipal aggregation customers in our book. At GRE, our performance in the first quarter reflected increased investment in several early-stage growth initiatives and a further write-down of our solar panel inventory.

Speaker #5: Despite the tough first quarter, we expect to see significant improvement throughout 2026. GRE is a resilient, strongly cash-generated business that, by its nature, will have episodes of margin compression like this one but also opportunities for exceptional profitability.

Speaker #5: Assuming normal wholesale market conditions, and with our proven customer acquisition engine, we expect strong performance from GRE for the rest of the year. At GRE, all three strategic areas of our business are in good shape.

Michael Stein: Assuming normal wholesale market conditions and with our proven customer acquisition engine, we expect strong performance from GRE for the rest of the year. At Genie Energy, all three strategic areas of our business are in good shape. Diversegy continues to grow its book of business and generate cash. Genie Solar is on track to be profitable for the remainder of the year and beyond. We expect that our key early-stage initiatives collectively will gradually pivot towards profitability as they gain scale in the coming quarters. Among these initiatives, I'm particularly excited by the potential of Roded, our majority-owned venture that has pioneered new techniques for transforming agricultural waste plastics into commercial plastic products with an initial focus on plastic pallet production. Roded has begun to sell its recycled plastic pallets in Israel and has already maxed out the capacity of its first production line.

Speaker #5: Diversity continues to grow its book of business and generate cash. Genie Solar is on track to be profitable for the remainder of the year and beyond, and we expect our key early-stage initiatives, collectively, will gradually pivot towards profitability as they gain scale in the coming quarters.

Speaker #5: Among these initiatives, I'm particularly excited by the potential of REDED, our majority-owned venture that has pioneered new techniques for transforming agricultural waste plastics into commercial plastic products with an initial focus on plastic pallet production.

Speaker #5: REDED has begun to sell its recycled plastic pallets in Israel, and has already maxed out the capacity of its first production line. We are building a second line on the same site, and that line is expected to start production in the current quarter, Q2.

Michael Stein: We are building a second line on the same site, and that line is expected to start production in the current quarter, Q2. Meanwhile, we are also evaluating expansion opportunities to add production capacity both here in the US and in Europe. Collectively, Roded and our other early-stage ventures are gaining scale. By year-end, we plan for them to be at the point they will require lower levels of further investment. Across Genie, we are working hard to maximize the potential in each of our businesses. We are very excited by the opportunities to build both our established and nascent units, and we expect to drive improved performance for the remainder of the year and beyond. Now, I will turn the call over to Avi for his discussion of our financial results.

Speaker #5: Meanwhile, we are also evaluating expansion opportunities to add production capacity both here in the US and in Europe. Collectively, REDED and our other early-stage ventures are gaining scale.

Speaker #5: By year-end, we plan for them to be at the point they will require lower levels of further investment. Across Genie, we are working hard to maximize the potential in each of our businesses, we are very excited by the opportunities to build both our established and nascent units, and we expect to drive improved performance for the remainder of the year and beyond.

Speaker #5: Now I will turn the call over to Avi for his discussion of our financial results.

Speaker #6: Thank you, Michael, and thanks to everyone on the call for joining us this morning. My remarks today cover financial results for the three months ended March 31, 2026.

Avi Goldin: Thank you, Michael, and thanks to everyone on the call for joining us this morning. My remarks today cover our financial results for the 3 months ending 31 March 2026. In my commentary, I will compare the results for Q1 of 2026 to Q1 of 2025 to remove from consideration the seasonal factors that impact our results, particularly within our retail energy business. Q1 is typically characterized by relatively high levels of per meter electric power and gas consumption, as it includes most of the winter's peak heating period in our service areas. Our Q1's financial results were weaker than usual as volatility within the power markets hurt margins from Genie Retail in the first 2 months of Q1.

Speaker #6: In my commentary, I'll compare the results of the first quarter of 2026 to the first quarter of 2025 to remove from consideration the seasonal factors that impact our results, particularly within our retail energy business.

Speaker #6: The first quarter is typically characterized by relatively high levels of per-meter electric power and gas consumption, as it includes most of the winter's peak heating period in our service areas.

Speaker #6: Our first quarter's financial results were weaker than usual, as volatility within the power markets hurt margins within Genie retail in the first two months of the quarter.

Speaker #6: This was compounded by higher levels of investment spending in customer acquisition in GRE and in growing our new business initiatives at GRE. As Michael discussed, we already saw improvement in the operating environment in March, and are expecting the balance of the year to be more in line with historical performance.

Avi Goldin: This was compounded by higher levels of investment spending and customer acquisition at GRE and in growing our new business initiatives at Genie Renewables. As Michael discussed, we already saw improvement in the operating environment in March and are expecting the balance of the year to be more in line with historical performance. Consolidated revenue in Q1 increased 4% to $142 million, driven by the commodity pricing environment in our retail business and increased sales of our remaining inventory of solar panels at Genie Solar, although at reduced margins. GRE revenue increased 2% to $134.8 million in Q1, driven by a 24% increase in gas sales, partially offset by a 4% decrease in electricity sales.

Speaker #6: Consolidated revenue in the first quarter increased 4% to $142 million, driven by the commodity price environment in our retail business and increased sales of our remaining inventory of solar panels at Genie Solar, although it reduced margins.

Speaker #6: GRE revenue increased 2% to $134.8 million in the first quarter, driven by a 24% increase in gas sales partially offset by a 4% decrease in electricity sales.

Speaker #6: Although we acquired a large number of customers in this quarter, our customer base was still below the year-ago level, as we did not renew some municipal aggregation deals that expired during the year.

Avi Goldin: Although we acquired a large number of customers in this quarter, our customer base was still below the year-ago level as we did not renew some municipal aggregation deals that expired during the year. At GRU, revenue increased 74% to $7.5 million, primarily reflecting the partial liquidation of Genie Solar's panel inventory and the completion of certain legacy projects as we wind down non-core operations there. Consolidated gross profit decreased 20% to $29.8 million for a gross profit margin of 21%, a decrease of 640 basis points compared to the year-ago quarter. At GRE, gross profit dipped 19% to $29.1 million, and gross profit margin decreased 550 basis points to 21.6%.

Speaker #6: At GRE, revenue increased 74% to $7.5 million, primarily reflecting the partial liquidation of Genie Solar's panel inventory and the completion of certain legacy projects as we wind down non-core operations there.

Speaker #6: Consolidated gross profit decreased 20% to 29.8 million for a gross profit margin of 21%, a decrease of 640 basis points compared to the year-ago quarter.

Speaker #6: At GRE, gross profit dipped 19% to 29.1 million, and gross profit margin decreased 550 basis points to 21.6%. The decreased resulted from volatility in both our average power and gas costs, driven by the severe winter weather in the earlier part of the quarter.

Avi Goldin: The decrease resulted from volatility in both our average power and gas costs, driven by the severe winter weather in the earlier part of Q1. Power and gas costs increased by 28% and 55% per unit, respectively, in Q1. We were able to partially mitigate the impact on our results through our hedging and pricing strategies. At Genie Renewables, gross profit decreased 49% to $745,000. The decrease primarily reflected the write-down in value and sale to our solar panel inventory that Michael Stein mentioned and the impact of our continued wind down of legacy solar operations. Consolidated SG&A expense increased 17% to $27.9 million, driven primarily by the increased customer acquisition expense at Genie Retail Energy and new initiatives in Genie Renewables.

Speaker #6: Power and gas costs increased by 28% and 55% per unit, respectively, in the first quarter. We were able to partially mitigate the impact on our results through our hedging and pricing strategies.

Speaker #6: At GRE, gross profit decreased 49% to $745,000. The decreased primarily reflected the write-down in value in sales to our solar panel inventory that Michael mentioned, and the impact of our continued wind-down of legacy solar operations.

Speaker #6: Consolidated SG&A expense increased 17% to $27.9 customer acquisition expense at GRE and investment in new initiatives in GRE. Consolidated income from operations and adjusted EBITDA with total of $1.9 million and $2.8 million on a consolidated basis, respectively, were below our expectations for the quarter for the reasons previously outlined.

Avi Goldin: Consolidated income from operations and Adjusted EBITDA, which totaled $1.9 million and $2.8 million on a consolidated basis, respectively, were below our expectations for the quarter for the reasons previously outlined. Diluted EPS for the quarter was $0.11 versus $0.40 a year ago. GRE contributed $6.6 million of income from operations and $7 million in Adjusted EBITDA, compared to $16.8 million and $17.1 million, respectively, in the year-ago quarter. GRU's loss from operations increased to $2.4 million from $855,000 a year ago. GRU's Adjusted EBITDA loss increased to $2.3 million from $673,000. The increased loss reflected the impact of the Genie Solar wind down and increased investment in Roded and other early-stage business initiatives.

Speaker #6: Diluted EPS for the quarter was $0.11 versus $0.40 a year ago. GRE contributed $6.6 million of income from operations and $7 million in adjusted EBITDA, compared to $16.8 million and $17.1 million, respectively, in the year-ago quarter.

Speaker #6: GRE's loss from operations increased to $2.4 million from $855,000 a year ago, GRE's adjusted EBITDA loss increased to $2.3 million from $673,000. The increased loss reflected the impact of the Genie Solar wind-down and increased investment in REDED and other early-stage business initiatives.

Speaker #6: Turning now to the balance sheet, at March 31, 2026, cash, cash equivalents, restricted cash, and marketable securities totaled $199.8 million, and working capital was $188.4 million.

Avi Goldin: Turning now to the balance sheet. At 31 March 2026, cash equivalents, restricted cash, and marketable securities totaled $199.8 million, and working capital was $188.4 million. Our debt, current and non-current, totaled $6.8 million, the largest component of which was financing for our portfolio of operational solar arrays. To wrap up, this was a tough financial quarter whose impact we have reflected in our revised 2026 guidance. Looking forward, we expect margins to strengthen within retail, and the investments we are making in growth to drive strong results. We remain in a solid financial position with a strong balance sheet and adequate capitalization to continue returning value to shareholders while executing on our growth plan. Operator, back to you for Q&A.

Speaker #6: Our debt, current and non-current, totaled $6.8 million, the largest component of which was financing for our portfolio of operational solar arrays. To wrap up, this was a tough financial quarter whose impact we have reflected in our revised 2026 guidance.

Speaker #6: Looking forward, we expect margins to strengthen within retail and the investments they are making in growth to drive strong results. We remain in a solid financial position with a strong balance sheet and adequate capitalization to continue returning value to shareholders while executing on our growth plan.

Speaker #6: Operator, back to you for Q&A.

Speaker #1: Thank you. We will now begin our question-and-answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the star keys.

Operator: Thank you. We will now begin our question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the star keys. To withdraw your question, please press star then two. We will now pause momentarily to assemble our roster. Thank you. We have a question from Matvei Tsetz. Sir, please announce your affiliation and proceed with your question.

Speaker #1: To withdraw your question, please press star, then two. We will now pause momentarily to assemble our roster. Thank you. We have a question from Matthew Tates.

Speaker #1: Sir, please announce your affiliation and proceed with your question.

Matvei Tsetz: yes. Hi. Can you hear me?

Speaker #7: Yes, hi. Can you hear me?

[Analyst]: Yes. Hi. Can you hear me?

Speaker #8: Yes, we hear you.

Avi Goldin: Yes, we hear you.

Speaker #7: Okay, great. Thank you so much. Thank you for the presentation. So, my question is about CG&A. at what extent it's, related to the number of acquisitions that you have, and, how do you see it, going forward towards the end of the year?

Matvei Tsetz: Okay, great. Thank you so much. Thank you for the presentation. My question is about SG&A. At what extent it's related to the number of acquisitions that you have, and how do you see it going forward towards the end of the year? Will it be as expensive and as in Q1, or probably there is some other, like, additional factor which I have to take into consideration for looking forward? Thank you.

[Analyst]: Okay, great. Thank you so much. Thank you for the presentation. My question is about SG&A. At what extent it's related to the number of acquisitions that you have, and how do you see it going forward towards the end of the year? Will it be as expensive and as in Q1, or probably there is some other, like, additional factor which I have to take into consideration for looking forward? Thank you.

Speaker #7: Will it be as expensive as in the first quarter, or is there probably some other, like, additional factor which I have to take into consideration for looking forward?

Speaker #7: Thank you.

Speaker #8: Yeah, hi. So the, the additional, j sales expense is, somewhere in the neighborhood of $3 million. For the, the quarter, for the additional meters that, that we were able to acquire, whether or not it'll continue throughout the year is dependent on, on if we can continue the, the accelerated pace of, of acquisition.

Avi Goldin: Yeah. Hi. The additional sales expense is somewhere in the neighborhood of $3 million for the quarter for the additional meters that we were able to acquire. Whether or not it will continue throughout the year is dependent on if we can continue the accelerated pace of acquisition. I cannot answer that yet. You know, we believe if it does, we believe it is a good investment in the future of the company.

Speaker #8: So I can't answer that yet. but, you know, we believe if, if it does, we believe it's a, a good investment in, in the future of the company.

Speaker #8: So.

Speaker #1: Thank you. Again, if you have a question, please press star, then one on your telephone keypad. Thank you. We have a question from Jim Hardin.

Operator: Thank you. Thank you. We have a question from Jim Harden. Jim, please announce your affiliation and ask your question.

Speaker #1: Jim, please announce your affiliation and ask your question.

Speaker #9: Hi, yes. I'm a personal investor. just quick question on the insurance subsidiary side. Just wanted if you had any sort of update on the operations there, thank you.

Jim Harden: Hi. Yes, I'm a personal investor. Quick question on the insurance subsidiary side. Wondered if you had any sort of update on the operations there. Thank you.

Speaker #8: yes. So the, the operation, has definitely grown. primarily in the fourth quarter and the and the first quarter. a lot of the sales activity, happened in the fourth quarter, and we're starting to recognize revenue, or we started to recognize revenue in the first quarter.

Avi Goldin: Yeah. The operation has definitely grown primarily in Q4 and Q1. A lot of the sales activity happened in Q4, and we're starting to recognize revenue. We're starting to recognize revenue in Q1. You know, we think that the revenues will continue to grow there. We're excited about the prospects.

Speaker #8: you know, we think that, the revenues will continue to grow there. we're excited about the prospects.

Speaker #9: Thank you.

Jim Harden: Thank you.

Speaker #1: Thank you. We have a question from Ibrahim Khan. Sir, please announce your affiliation and ask your question. Ibrahim, can you hear us? Are you it appears we have lost Ibrahim's line.

Operator: Thank you. We have a question from Ibrahim Khan. Sir, please announce your affiliation and ask your question. Ibrahim, can you hear us? It appears we have lost Ibrahim's line for now. Okay. As there are no further questions, this will conclude today's question-and-answer session and conference call. We thank you for attending today's presentation, you may now disconnect.

Speaker #1: For now. Okay. As we have as there are no further questions, this will conclude today's question-and-answer session and conference call. We thank you for attending today's presentation, and you may now disconnect.

Avi Goldin: Thank you.