Acorn Energy, Inc.

Good morning, and welcome to Acorn Energy's second quarter 2025 earnings conference call. All participants are currently in listen-only mode. Following management's prepared remarks, we will open the call for questions. To answer the questions, you may press star, then 1. As a reminder, today's call is being recorded. I'll now turn the call over to Tracy Clifford, CFO of Acorn Energy and COO of its Omni Network

Thank you, operator, and thank you all for joining us today. Before we begin, I'd like to remind everyone that today's remarks, including responses to questions, may contain forward-looking statements. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. Factors that may impact our future operating and financial performance include general risks, such as technical disruptions to business operation or shifts in consumer demand and customer demand, as well as specific risks related to our ability to execute our operating plan, maintain strong customer renewal rates, and expand our customer base. Additional risks may arise from changes in technology, increased competition, or shifts in the macroeconomic or financial environment. These forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on management's current beliefs, assumptions, and information available as of today. There can be no assurances that the company will meet its growth targets or other strategic objectives. The company undertakes no obligation to update or revise these statements to reflect future events or circumstances after this call. For a more detailed discussion of the risks and uncertainties that may affect our business, please refer to the Risk Factors section of our most recent Form 10-K, available on the SEC's website at www.sec.gov. or on our own website. With that, I'll now turn the call over to Dan Loeb, CEO of Acorn Energy and on the metrics. Dan?

Thanks, Gracie, and thank you all for joining us. Q2 2025 was a milestone quarter for Acorn. We delivered record remote monitoring and control revenue, strong operating cash flow, and EPS of 28 cents. And last month, we uplifted the NASDAQ capital market, enhancing our visibility, and positioning us for future growth. Let's start with some numbers. Second quarter revenue rose 55% year-over-year to $3.5 million, driven by an 89% increase in hardware sales and a 19% increase in monitoring revenue. Gross margin expanded to 75% from 73% last year. Operating income increased. 267% to $947,000, and fleet diluted EPS rose to $0.28 up from $0.11 in Q2 2024. Importantly, our EPS is now reported on a fully taxable basis. If we exclude our non-cash tax expense in Q2 2025, our EPS would have been $0.36 and be more comparable to our year-ago EPS of $0.11, which included no tax provisions. Our growth continues to be fueled by a strategic contract with a major U.S. cell phone provider, which has provided a huge benefit to our financial results since the third quarter of 2024. This approximate $5.4 million contract covers monitoring hardware and first year of monitoring services for the telecom provider's cell power backup generators. To date, we've recognized $4.1 million in revenue. of which approximately 95% is hardware. We expect to complete the hardware segments under this contract in 2025, while deferred monitoring revenue will extend into 2026 based on the rollout of the monitoring service activations. Given our over 90% renewal rate and cost prohibitive nature of switching to a competing offering, we expect this to generate recurring revenue well beyond the initial term. We believe this contract does not represent the total potential opportunity with this customer, and we're working to expand the scope of our work with this customer when the opportunity arises. Now I'd like to talk about our market position and competitive advantage. Alimetric remains the largest independent provider of remote generator monitoring solutions in North America. Our technology supports all major generator brands, and our industry-leading solutions are known for valuable features such as ease of installation, comprehensive diagnostics and reporting, a state-of-the-art user interface, and support for all major generator brands. These advantages and other advantages have earned us the trust of over 600 generator dealers, many of whom consider us the best-in-class solutions. Additionally, while some backup generator OEMs offer some type of remote monitoring solution, dealers are often reluctant to use those services because they do not want to jeopardize their customer relationships and service revenue lines by enabling a direct relationship between the OEM and their customers. As the pioneer of remote generator monitoring, we are committed to maintaining our competitive edge through ongoing investments in product innovations. In June, we launched our next-generation monitors, Omni for residential and Omni Pro for commercial and industrial use. These devices feature sleek design and smaller footprints, multicolor LEDs for real-time diagnostics, remote exercising programming, compliance reporting, over-the-air updates, and other software enhancements. These innovations improve installation speed, reduce service costs, and enhance reliability, further strengthening our value proposition. Patient work opportunities. We are actively pursuing growth in hardware sales and monitoring endpoints by supporting our network of over 600 generated dealer customers and through our internal direct sales efforts targeted at large and commercial industrial accounts. While we have a strong position in the residential market, our growth is more a function of overall economic factors, such as interest rates, inflation, and employment outcomes, as well as region-specific conditions that drive households in prioritizing their investment in backup generate power. The residential market has been relatively flat over the past two quarters, but expect that it will eventually return to its growth trend in the coming years. Larger commercial and industrial opportunities are where we feel best positioned, as it is in this market where our technology and service leadership are most valued and where we have the potential to pursue much larger opportunities across a variety of areas. We have a range of ongoing discussions with T&I prospects, but it tends to be a longer sales cycle, and so it's harder to predict the outcome. We are also increasingly being asked to look at other potential areas of monitoring activity, that would require some amount of new product development, but are largely rooted in our core strengths and capabilities. We will continue to evaluate such opportunities that align most closely with our core strengths and capabilities. Beyond organic growth, we are actively evaluating M&A prospects that complement our focus on remote monitoring, recurring revenue models, and could be accretive in year one. Our NASDAQ listing enhances our ability to pursue these opportunities as it provides a more attractive currency for such transactions. We also see potential in the OEM partnerships, where our monitoring solutions could be bundled with new equipment sales, offering OEMs a turnkey solution while allowing us to scale efficiently. It is difficult to know if any of these efforts will prove successful, but we believe they offer a great deal of potential to help us drive incremental growth. Longer term, it seems natural that monitoring will become an embedded component in standby generators and other industrial equipment. Given our service and technology leadership, we are working to position Omnimetrics as the obvious partner for commercial, industrial, and residential markets and enabling OEMs to focus on their core business. Importantly, several secular trends are expected to drive growing demand for our solutions, including increased ingredient stability in extreme weather events, growing adoption of smart residential and commercial industrial IoT systems, and the prevalent need for predictive maintenance and operational analytics. The key takeaway is that remote monitoring is increasingly being seen as a necessary and cost-effective tool to mitigate risks of operational disruption in the commercial and industrial segments and reliability and comfort in the residential segments. And Nonmetrics is ideally positioned to meet this demand. Based on our current trajectory and industry dynamics, we believe we can sustain 20% average annual revenue growth over the next three to five years. A scalable model, lean operating structure, and high margin recurring revenue model give us confidence in our ability to deliver long-term shareholder value. With that, I'll turn the floor back to Tracy for a deeper dive into our financials. Tracy?