Acorn Energy, Inc.

Good morning and welcome to the Acorn Energy's third quarter 2026 earnings conference call. Management's prepared remarks will be followed by a question and answer session. Please note that today's call is being recorded. I would now like to turn the call over to Tracy Clifford, CFO of Acorn Energy and COO of its OmniMetrics subsidiary.

Thank you, Operator, and thank you all for joining us today. I'd like to remind everyone that today's remarks and responses to questions contain forward-looking statements. Such statements involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. 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, expand our customer base, and successfully integrate acquisitions. Additional risks may arise from changes in technology, competition, or shifts in macroeconomic or financial markets. 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 beliefs, assumptions, and information that is available as of today. There can be no assurances that the company will meet its growth targets or its other strategic goals and objectives. The company undertakes no obligation to update or revise 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 Form 10-K for 2025 and our third quarter Form 10-Q, both of which are available at www.sec.gov and on our website. Now I'll turn the call over to Jan Loeb, CEO of Acorn and Omnimetrics, for further comments. Jan?

Thank you, Tracy, and good morning, everyone. Our third quarter was solid, profitable, and cash-generative, and strategically one of our busiest ever. Revenue increased 4.6% to 2.6 million, and gross margin improved 200 basis points to 80.5%. net income to stockholders was $940,000 or $0.37 per diluted share, including about $0.31 per share or $780,000 from a further non-cash reduction in the valuation allowance on our deferred tax assets. This compared to net income of $252,000 or $0.10 per diluted share in the year-ago quarter. To reduce our valuation allowance, we must demonstrate that were more likely than not to generate future taxable income to use more of our NOLs, which is essentially a reflection of our greater confidence in our future profitability. Importantly, these tax assets reduce future federal cash tax obligations, thereby increasing operating cash flow. After several reductions, we still carry a deferred tax asset valuation allowance of roughly $9.5 million, value that isn't reflected on our balance sheet today. Our goal is to continue to grow organically and through acquisitions to unlock more of this cash flow benefit over time. This quarter's top line growth was masked by two prior year period items that created a net headwind of $358,000. First, Q3 25 included $215,000 of non-cash revenue amortization from legacy hardware sold before September of 2023. compared to just $5,000 this quarter. The remaining balance of deferred revenue from legacy products has now been fully recognized. Secondly, Q3 2025 included the recognition of $178,000 in deferred monitoring revenue pursuant to a policy that we implemented in 2025 related to units that were sold greater than 24 months prior that were never installed. For Q3 2026, this amount was $30,000. The prior year amount was significantly higher since that was the first year of policy adoption. Excluding the impact of these items and the GENTRAC or partial month contribution in September of 2026, underlying revenue grew about 19%, with management revenue up about 5%. and Hardware Revenue benefiting from initial stocking order for the launch of our Champion Power Equipment Partnership. Hardware gross margin also climbed to nearly 59% from 50% due to enhancements in our next generation Omni product family, which delivers more value to our customers and has lower production costs than legacy products. In August, we acquired the remaining 1% of OmniMetrix in an all stock exchange from OmniMetrix's prior CEO. We felt it was important to consolidate our ownership of Omnimetrics so that we could simplify our structure and financial reporting moving forward. While we typically prefer to use cash for acquisitions, in this case, equity allowed the prior CEO to retain full participation in the business upside along with greater liquidity. After years of effort, we were excited to complete our first acquisition of Gentracker. in the third quarter. More importantly, we were able to fund the $1 million payment at closing, largely with cash generated from operations, reflecting the ability of a high margin recurring revenue model to fund growth initiatives. Based in Minnesota, Gentracker has been monitoring standby generators for 25 years. It adds approximately $1.1 million in expected annual recurring monitoring revenue, primarily from commercial and industrial customers. along with an established dealer network and four experienced employees who all have joined on the metrics. Jan Tractor serves approximately 1,500 customers, which increases our reach into this universe to approximately 50 large companies. Additionally, we have consolidated a respected competitor in commercial and industrial, right where we want to grow most. Strategically, GenTracker is an ideal fit. They monitor generators through the automatic transfer switch, an approach that works on generators of virtually any make, model, or age, including those that predate modern controllers. We've always been able to monitor at the automatic transfer switch, but our focus has been on the generator controller. With GenTracker, we have strengthened our ability to serve as a one-stop provider for an entire generator fleet, new or old, and regardless of brand mix. Our review of GenTracker's customer relationships identified a few receivables that are unlikely to collect. This and other due diligence allowed us to structure and price the transaction on what we believe are beneficial terms for our shareholders. We paid $1 million at closing, and the $2.5 million balance will be paid in annual installments over five years, funded primarily by the acquired business. We're in the process of moving Gentracker's accounts onto our platform and applying our disciplines, operating, and collection practices. The fourth quarter will be our first full quarter contribution from Gentracker, and with continued focused execution, we expect it to be accretive to earnings and particularly to EBITDA. Also, in power generation, we continue to make progress toward our goal of securing a bundling relationship with a major OEM, most likely through a private label structure. We discussed our Omni360 solution suite in depth last quarter, so I'll be brief, and Tracy will give you an operational update. The bigger picture is this. The problems Omni360 solves aren't going away. We estimate theft alone will cost the cell tower industry roughly half a billion dollars this year. These are large organizations with many priorities and long decision cycles. While we have reason to be optimistic, we have commitments for POCs, proof of concepts, System Installation, so we don't currently see the likelihood for a meaningful commercial agreement in 2026 or any related revenue impact. The macro backdrop for backup power and monitoring remains very favorable. As the specter of prolonged power outages expands, as you would expect, we find the actual power outages and the increased potential threat of such outages is the most powerful driver of commercial, industrial, and residential new generator demand. which creates new entrant opportunities. After roughly a year of below average outage activity, industry data indicate that power outages returned to normal levels in the third quarter and home standby generator shipments picked up significantly. Hurricane Isaias hit the Gulf Coast in early October and knocked out power to more than 900,000 customers, a stark reminder of why backup power matters. Looking ahead, Noah's winter outlet falls for very strong El Nino, which builds the odds towards stormier weather across the south and along the east coast. More broadly, power demand from AI and data centers continue to strain the grid, and generator manufacturers are reporting multi-billion dollar backlogs for data center backup power alone. Meanwhile, just under 7% of U.S. households have a home standby generator, which signals significant opportunity in the residential market for new generator deployments and Monitra. I'd like to close with my perspective on building shareholder value. Acorn owns 100% of Omnimetrics and we're profitable in generating cash. We have approximately $4.5 million in cash, no bank debt, a growing base of high margin recurring revenue and roughly $15 million of total deferred tax assets, including about 9.5 million that still isn't on our balance sheet. We have a range of growth opportunities and initiatives that include three sources of significant upside, an OEM bundling relationship, the potential of our Omni360 business, and additional M&A opportunities that aren't reflected in our current operating results. We don't need any of these to continue our growth trajectory, but if one or more of these are realized, it could meaningfully change the scale of our company. Importantly, the investments we're making are modest for the compelling risk-reward profile that balances risk management with growth. We're encouraged by our progress and the opportunities we see across the business. With that, I'll hand it back to Tracy to discuss our financial and operating results in more detail. Tracy.