Acorn Energy, Inc.

Good morning and welcome to Acorn Energy's first quarter 2026 conference call. All participants are currently in listen-only mode. Following management's prepared remarks, we will open the call for questions. 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 Omnimetrics subsidiary.

Thank you, Regina, and thank you all for joining us today. First, I'd like to remind everyone that today's remarks, including responses to questions, 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 results and financial performance include general risks, such as potential disruptions to business operations or changes in consumer or 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, competition, or shifts in the macroeconomic or financial environment. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on management's current beliefs, assumptions, and information that is available as of today. There can be no assurances that the company will meet its growth targets or other strategic goals and objectives. The company undertakes no obligation to update or revise such forward-looking statements to reflect future events or specific circumstances that may occur after today. For a more detailed discussion of risks and uncertainties that may affect our business, please refer to the Risk Factors section of our most recent Form 10-K and our Form 10-Q, for the first quarter of 2026, which are available online at www.scc.gov or on our own website. Now, I'll turn the call over to Jan Loeb, CEO of Acorn and Omnimetrics. Jan?

Thank you, Tracy, and to everyone for your interest in our company. Our Q1 2026 results reflect continued expansion of our base of monitoring endpoints offset by an anticipated decrease in year-over-year hardware revenue related to our materials cell phone provider contract. We recognize $93,000 of hardware revenue from this customer in Q1 2026 related to our original contract. And now, hardware shipments for our initial contract are largely complete. This compares to $876,000 of hardware revenue from this customer in Q1 2025. Our Q1 2026 results also reflected $167,000 of monitoring revenue from this customer compared to $69,000 in Q1 2025 related to first-year monitoring revenues on the original contract. Based on our ongoing dialogue with this customer, we are optimistic about securing further hardware deployments and related revenue that we'll build on our initial contract starting in Q2 2026. It has always been our goal to build on this customer opportunity, so this initial follow-on activity is a good indication of the strength of our relationship and the customer satisfaction with our solutions and the services we have been providing for over a year. We currently expect incremental hardware revenue from this customer in the range of $350,000 to $500,000 in 2026. non-cash management and board compensation in Q1. Based on our record financial performance in 2025, accomplishing our NASDAQ uplisting, and the completion of the AIO partnership agreement on January 1st, the Board approved an increase in our 2026 Stock Option Award to compensate management and the Board in lieu of additional cash compensation or board fees. These options were issued at a market price of $19.02, so their potential value is tied directly to value creation for all shareholders. The 50,000 options issued to management vest over 12 quarters, so higher stock comp expense will have an impact on financial results through the third quarter of 2028. If you exclude the impact of non-cash competition, Acorn's consolidated results would have been profitable in Q1. and the company continues to generate cash as reflected by $53,000 of cash provided by operating activities in the quarter and the stable cash balance of $4.3 million at quarter end. In past communications, including our year-end news announcements, we have reviewed our five complementary growth initiatives, one of which is our ongoing pursuit of accretive M&A opportunities to expand our monitoring product offerings, market reach, and revenue and customer base. Through this process, we identified the AIO opportunity, which we decided to pursue as an acquisition of commercialization and distribution rights through a technology partnership. We are now actively working to bring their industry-leading multifaceted suite of products for cell towers, data centers, and utility substations to North America for the first time. These infrastructure solutions protect against theft, power issues, environmental, and other risks and maximize energy utilization. We believe the acquisition of these rights is an ideal way to leverage our 20-plus year reputation and established base of customers and substantially expand our capabilities and reach within the North American infrastructure market in a focused and highly capitalization way. We are currently working to finalize sales and marketing materials for the island metrics branded solutions. We are initially targeting cell tower operations where we have a good base of existing customer relationships. Utilizing that experience, we will then pursue opportunities in fast-growing markets for data-driven and utility-scale infrastructure management. Relative to our focus on backup generators at cell towers, this new suite of solutions provides remote oversight for the full cell tower campus. Our solutions provide actionable insights through advanced analytics, machine learning, and comprehensive real-time monitoring that significantly reduce downtime, improve maintenance processes, and extend asset lives, lowering costs, and delivering measurable ROI. Based on our initial assessments and customer discussions, we view SEST as perhaps the most pressing issue facing self-power operators today. theft alone can potentially cost cell tower operators hundreds of millions of dollars annually, and it is a growing and largely unaddressed problem in the United States. As copper, fuel, and assets costs rise, it's widely expected that theft could become an even bigger risk management issue in North America, as it already is on other continents. To combat this risk, we are bringing to market the strongest available solution backed by years of proven performance. We are still working through final hardware and services pricing models, but given the expanded scope of AIO solutions, we currently expect our average AIO sale to be five to six times the average sale of existing on-the-message products. Given expected pricing and the scale of the opportunity, it provides a very meaningful growth potential for our company. We currently have our first two AIO-based tower sites live and running for customer demonstrations. For those of you who may or may not be familiar, cell towers are typically managed by independent tower companies who own or operate a physical structure and lease space to multiple wireless carriers. The two sites we are running are both in the Atlanta area with an existing telecom customer, where we are monitoring their shelter or hut within the cell tower, as well as the front gate. Our dashboard shows everything, including stats power systems, fuel levels, battery voltage, operating equipment, temperature, humidity, HVAC runtime, flood detection, et cetera, along with live feeds from security cameras that monitor physical access. We have secure permission to take prospective customers to these sites and expect to begin these efforts in the coming weeks. As I mentioned, we're in the process of advancing our program to launch these products in the U.S., including fine-tuning features and alerts, the sales approach, installation protocols, customer materials, as well as sales and training collateral that our team will need to scale this offering. The AO team has been to Atlanta for several weeks to train and work with our engineering, tech support, and sales and marketing teams to set up the success in this product launch. In terms of our financial reporting, we have set up a separate reporting segment called Infrastructure Solutions, or IS, to track this line of business, which you will note in our 10Q. We do not expect revenues from this segment in the first half of 2026. We continue to believe that attractive, succulent tailwinds should support our value propositions and growth potential for years to come. Companies are increasingly focused on ensuring reliable access to the energy infrastructure and the compliance support they need. At the same time, broader demand drivers such as AI, data centers, electrification, EV adoption, reshoring continue to strain an aging U.S. grid compounded by severe weather trends, all of which underscore the importance of energy resilience. In March, we saw severe storms across the Midwest and Mid-Atlantic leave more than 1 million customers without power in the PJM and MISO territories. Even with significant investment, it will take years, if not decades, to address these challenges, and we believe this positions us well both for the near-term and longer-term. Given substantial unmet needs in our current markets, plus opportunities in adjacent addressable markets, we believe 20% average annual revenue growth over a three- to five-year period remains achievable. Further, a capital-like, cost-efficient, and scalable business model positions us to bring roughly 50% of each incremental revenue dollar from our existing businesses to operating income lines. As a small company, large hardware shipments will make our quarterly results bad, but our high-margin recurring revenue model, supported by strong secular trends, positions us well to continue to deliver growth and value to our shareholders. With that, I'll turn the call over to Tracy for financial and operational insights. Tracy?