Acorn Energy, Inc.

Good morning, and welcome to Acorn Energy's fourth quarter and year-end 2024 conference call. At this time, all participants are in a listen-only mode. After some prepared remarks, we will conduct a question-and-answer session. And as a reminder, today's conference is being recorded. Now I will turn the conference to Tracy Clifford, CFO of Acorn Energy and COO of its Omnimetrics Operating Subsidiary. Ms. Clifford, please begin.

Thank you, Operator, and thank you all for joining today's call. Let me first remind everyone that the following remarks as well as answers to questions may be forward-looking. These statements are subject to various risks and uncertainties. The operating and financial performance of the company in future periods is subject to risks associated with potential disruptions to business operations and customer demand, risks related to the company executing its operating plan, maintaining high customer renewal rates, and growing its customer base, as well as from changes in technology, the competitive landscape, or in the financial or economic environment. Forward-looking statements are based on management's beliefs and assumptions using currently available information and data pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. There is no assurance that the company will achieve its goals. The company undertakes no obligation to revise or disclose revisions to forward-looking statements made as of today to reflect future events or circumstances that occur after today's call. A full discussion of risks and uncertainties that may affect the company is included under risk factors in our 10-K, filed this morning and available on SEC.gov and on our website. Now I'll turn the call over to Jan Loeb, CEO of Acorn and Omnimetrics. Jan?

Thanks, Tracy, and thank you all for joining us today. I am incredibly proud of the progress the ACORN and Omnimetrics teams achieved in 2024. We were able to grow our revenue by 36% and net income increased to $6.3 million or $2.51 per fully diluted chair from just $119,000 or 5 cents per fully diluted chair in 2023. Our 2024 results include $4.35 million or $1.77 per fully diluted chair of deferred income tax benefit. This tax benefit was the result of our outlook for sustained profitability and reflects only approximately 28% of our total deferred tax assets. Following the valuation allowance release, Acorn still has approximately 11 million or 72% of our deferred tax assets remaining in reserve. As you may know, our operating results in the second half of 2024 were bolstered by initial revenues from an approximately $5 million contract with a leading cell phone provider. The contract is for remote monitoring equipment and the initial year of monitoring services to support thousands of the customer's backup generators deployed at cell tower sites across the United States. The rollout has been progressing well. The customer recently increased the number of hardware units that they plan to order by 40%. We currently expect to fulfill shipments of hardware under the contract during the next few quarters of 2025. We remain focused on executing this project with the highest level of customer attention and premium service delivery, knowing that ensuring success with this customer could position us for additional opportunities with this customer and others of a similar profile with substantial remote monitoring needs. Of course, we expect to benefit from ongoing monitoring service revenue from this customer as a result of the annual renewals on the respective anniversary dates after the first year of monitoring services. Importantly, our strong 2024 performance enabled us to substantially improve our balance sheet, positioning us to pursue an uplifting to the NASDAQ capital markets in 2025. Our cash increased to $2.3 million in 2024 from $1.5 million in 2023, and stockholders' equity improved to 5.5 million in 2024 from a deficit position in 2023 of 838,000, reflecting our improved operating results and the impact of the release of a portion of our available valuation allowance. NASDAQ's $5 million in shareholder equity listing criteria had been the principal obstacle to our pursuing an uplisting. We are excited to pursue this next step in expanding the visibility and liquidity of our common stock to reach an even broader base of institutional and retail investors. Looking forward, we see a range of factors that should increase commercial and consumer demand for backup generators and our industry-leading monitoring and control services. We outlined some of these demand drivers in today's press release, and I'd like to touch on a few in more detail. First and foremost, is the increasing frequency of severe weather and natural disaster events such as storms, floods, and wildfires that can disrupt electricity access for extended periods. The increasing incidence of power disruption raises the urgency for commercial and individual users to invest in reliable backup power. Adding to these woes is our nation's aging electric grid infrastructure, which is being increasingly challenged by growth in current and forecasted electricity demand to support a variety of energy-intensive use cases as well as mission critical applications in health care food storage security etc our solutions provide substantial efficiency value and expanded capabilities that support backup generators with remote control functions actionable data risk mitigation tools regulatory compliance and general peace of mind benefits we have also positioned acorn to play a pining role in enabling the use of standby generators to support electric grids in meeting peak power, and what is called demand response. We are still in the early days of building out a broader base of demand response support from standby generators. It takes time to formalize the relationships and to build out customer awareness and engagement, but we believe demand response has the potential to become an important long-term profit driver for our business. We have received our first two payments from ERCOT, though they are relatively small. While these factors support our business outlook, We also continue to invest in research, engineering, and product development to maintain our market leadership as well as to develop new solutions. Tracy will provide some more detail on these efforts in a moment. While we believe our solutions can really sell themselves, we are actively pursuing new revenue opportunities by supporting our network of approximately 600 generated dealers across the U.S. and Canada. In addition, our internal sales team is focused on identifying and pursuing large commercial and industrial customer opportunities that are similar profile to our large cellular customer, as well as government opportunities like state colleges and universities. Of course, the sales cycle is much longer for these large enterprise opportunities, which involve more formal and tiered procurement processes. We also continue to work at forging strategic relationships with power generator manufacturers and other industrial equipment providers to expand our market reach. Moreover, Our growth strategy includes an ongoing M&A process to seek out complementary and accretive opportunities that are well aligned with our business operations and objectives. In summary, as we have said in prior quarters, we believe that ACORN continues to be exceptionally well positioned for long-term growth and increasing profitability. Our solutions provide high ROI benefits that help customers achieve their operational, financial, environmental, and risk mitigation goals. We have a promising outlook for this year and are hard at work developing growth opportunities for the years to come. Let me now turn the call to Tracy Clifford, our CFO and COO for her financial review and operational insights. Tracy.